[Title 20 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2014 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

          Title 20

Employees' Benefits


________________________

Part 657 to End

                         Revised as of April 1, 2014

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2014
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

[[Page ii]]

          U.S. GOVERNMENT OFFICIAL EDITION NOTICE

          Legal Status and Use of Seals and Logos
          
          
          The seal of the National Archives and Records Administration 
              (NARA) authenticates the Code of Federal Regulations (CFR) as 
              the official codification of Federal regulations established 
              under the Federal Register Act. Under the provisions of 44 
              U.S.C. 1507, the contents of the CFR, a special edition of the 
              Federal Register, shall be judicially noticed. The CFR is 
              prima facie evidence of the original documents published in 
              the Federal Register (44 U.S.C. 1510).

          It is prohibited to use NARA's official seal and the stylized Code 
              of Federal Regulations logo on any republication of this 
              material without the express, written permission of the 
              Archivist of the United States or the Archivist's designee. 
              Any person using NARA's official seals and logos in a manner 
              inconsistent with the provisions of 36 CFR part 1200 is 
              subject to the penalties specified in 18 U.S.C. 506, 701, and 
              1017.

          Use of ISBN Prefix

          This is the Official U.S. Government edition of this publication 
              and is herein identified to certify its authenticity. Use of 
              the 0-16 ISBN prefix is for U.S. Government Printing Office 
              Official Editions only. The Superintendent of Documents of the 
              U.S. Government Printing Office requests that any reprinted 
              edition clearly be labeled as a copy of the authentic work 
              with a new ISBN.

              
              
          U . S . G O V E R N M E N T P R I N T I N G O F F I C E

          ------------------------------------------------------------------

          U.S. Superintendent of Documents  Washington, DC 
              20402-0001

          http://bookstore.gpo.gov

          Phone: toll-free (866) 512-1800; DC area (202) 512-1800

[[Page iii]]




                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 20:
          Chapter V--Employment and Training Administration, 
          Department of Labor (Continued)                            3
          Chapter VI--Office of Workers' Compensation 
          Programs, Department of Labor                            177
          Chapter VII--Benefits Review Board, Department of 
          Labor                                                    373
          Chapter VIII--Joint Board for the Enrollment of 
          Actuaries                                                391
          Chapter IX--Office of the Assistant Secretary for 
          Veterans' Employment and Training Service, 
          Department of Labor                                      427
  Finding Aids:
      Table of CFR Titles and Chapters........................     483
      Alphabetical List of Agencies Appearing in the CFR......     503
      List of CFR Sections Affected...........................     513

[[Page iv]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 20 CFR 658.400 
                       refers to title 20, part 
                       658, section 400.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 2014), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

PAST PROVISIONS OF THE CODE

    Provisions of the Code that are no longer in force and effect as of 
the revision date stated on the cover of each volume are not carried. 
Code users may find the text of provisions in effect on any given date 
in the past by using the appropriate List of CFR Sections Affected 
(LSA). For the convenience of the reader, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume. For changes to 
the Code prior to the LSA listings at the end of the volume, consult 
previous annual editions of the LSA. For changes to the Code prior to 
2001, consult the List of CFR Sections Affected compilations, published 
for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed as 
an approved incorporation by reference, please contact the agency that 
issued the regulation containing that incorporation. If, after 
contacting the agency, you find the material is not available, please 
notify the Director of the Federal Register, National Archives and 
Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001, 
or call 202-741-6010.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Authorities 
and Rules. A list of CFR titles, chapters, subchapters, and parts and an 
alphabetical list of agencies publishing in the CFR are also included in 
this volume.

[[Page vii]]

    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, 8601 Adelphi Road, College Park, MD 
20740-6001 or e-mail [email protected].

SALES

    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call toll-free, 
866-512-1800, or DC area, 202-512-1800, M-F 8 a.m. to 4 p.m. e.s.t. or 
fax your order to 202-512-2104, 24 hours a day. For payment by check, 
write to: US Government Printing Office - New Orders, P.O. Box 979050, 
St. Louis, MO 63197-9000.

ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers of the Presidents of the United 
States, Compilation of Presidential Documents and the Privacy Act 
Compilation are available in electronic format via www.ofr.gov. For more 
information, contact the GPO Customer Contact Center, U.S. Government 
Printing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). E-
mail, [email protected].
    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.archives.gov/federal-
register.
    The e-CFR is a regularly updated, unofficial editorial compilation 
of CFR material and Federal Register amendments, produced by the Office 
of the Federal Register and the Government Printing Office. It is 
available at www.ecfr.gov.

    Charles A. Barth,
    Director,
    Office of the Federal Register.
    April 1, 2014.







[[Page ix]]



                               THIS TITLE

    Title 20--Employees' Benefits is composed of four volumes. The first 
volume, containing parts 1-399, includes current regulations issued by 
the Office of Workers' Compensation Programs, Department of Labor and 
the Railroad Retirement Board. The second volume, containing parts 400-
499, includes all current regulations issued by the Social Security 
Administration. The third volume, containing parts 500 to 656, includes 
current regulations issued by the Employees' Compensation Appeals Board, 
and the Employment and Training Administration. The fourth volume, 
containing part 657 to End, includes the current regulations issued by 
the Office of Workers' Compensation Programs, the Benefits Review Board, 
the Office of the Assistant Secretary for Veterans' Employment and 
Training Service (all of the Department of Labor) and the Joint Board 
for the Enrollment of Actuaries. The contents of these volumes represent 
all current regulations codified under this title of the CFR as of April 
1, 2014.

    An index to chapter III appears in the second volume.

    For this volume, Michele Bugenhagen was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of the 
Managing Editor, assisted by Ann Worley.


[[Page 1]]



                      TITLE 20--EMPLOYEES' BENEFITS




                  (This book contains part 657 to end)

  --------------------------------------------------------------------
                                                                    Part

chapter v--Employment and Training Administration, 
  Department of Labor (Continued)...........................         657

chapter vi--Office of Workers' Compensation Programs, 
  Department of Labor.......................................         701

chapter vii--Benefits Review Board, Department of Labor.....         801

chapter viii--Joint Board for the Enrollment of Actuaries...         900

chapter ix--Office of the Assistant Secretary for Veterans' 
  Employment and Training Service, Department of Labor......        1001

[[Page 3]]



 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR 

                               (CONTINUED)




  --------------------------------------------------------------------
Part                                                                Page
657

Provisions governing grants to State agencies for employment services 
activities [Reserved]

658             Administrative provisions governing the Job 
                    Service System..........................           5
660             Introduction to the regulations for 
                    workforce investment systems under Title 
                    I of the Workforce Investment Act.......          34
661             Statewide and local governance of the 
                    workforce investment system under Title 
                    I of the Workforce Investment Act.......          37
662             Description of the one-stop system under 
                    Title I of the Workforce Investment Act.          51
663             Adult and dislocated worker activities under 
                    Title I of the Workforce Investment Act.          58
664             Youth activities under Title I of the 
                    Workforce Investment Act................          74
665             Statewide workforce investment activities 
                    under Title I of the Workforce 
                    Investment Act..........................          82
666             Performance accountability under Title I of 
                    the Workforce Investment Act............          86
667             Administrative provisions under Title I of 
                    the Workforce Investment Act............          92
668             Indian and Native American programs under 
                    Title I of the Workforce Investment Act.         118
669             National farmworker jobs program under Title 
                    I of the Workforce Investment Act.......         135
670             The Job Corps under Title I of the Workforce 
                    Investment Act..........................         145
671             National emergency grants for dislocated 
                    workers.................................         161
672             Provisions governing the Youthbuild Program.         164
673-699         [Reserved]

[[Page 5]]

 PART 657_PROVISIONS GOVERNING GRANTS TO STATE AGENCIES FOR EMPLOYMENT 
                     SERVICES ACTIVITIES [RESERVED]



PART 658_ADMINISTRATIVE PROVISIONS GOVERNING THE JOB SERVICE SYSTEM--Table of 

Contents



Subparts A-D [Reserved]

                 Subpart E_Job Service Complaint System

Sec.
658.400 Purpose and scope of subpart.
658.401 Types of complaints handled by the JS complaint system.

                    State Agency JS Complaint System

658.410 Establishment of State agency JS complaint system.
658.411 Filing and assignment of JS-related complaints.
658.412 Complaint resolution.
658.413 Initial handling of complaints by the State or local office.
658.414 Referral of non-JS-related complaints.
658.415 Transferring complaints to proper JS office.
658.416 Action on JS-related complaints.
658.417 Hearings.
658.418 Decision of the State hearing official.

                       Federal JS Complaint System

658.420 Establishment of JS complaint system at the ETA regional office.
658.421 Handling of JS-related complaints.
658.422 Handling of non-JS-related complaints by the Regional 
          Administrator.
658.423 Handling of other complaints by the Regional Administrator.
658.424 Federal hearings.
658.425 Decision of DOL Administrative Law Judge.
658.426 Complaints against USES.

  Subpart F_Discontinuance of Services to Employers by the Job Service 
                                 System

658.500 Scope and purpose of subpart.
658.501 Basis for discontinuation of services.
658.502 Notification to employers.
658.503 Discontinuation of services.
658.504 Reinstatement of services.

  Subpart G_Review and Assessment of State Agency Compliance with Job 
                           Service Regulations

658.600 Scope and purpose of subpart.
658.601 State agency responsibility.
658.602 ETA national office responsibility.
658.603 ETA regional office responsibility.
658.604 Assessment and evaluation of program performance data.
658.605 Communication of findings to State agencies.

   Subpart H_Federal Application of Remedial Action to State Agencies

658.700 Scope and purpose of subpart.
658.701 Statements of policy.
658.702 Initial action by the Regional Administrator.
658.703 Emergency corrective action.
658.704 Remedial actions.
658.705 Decision to decertify.
658.706 Notice of decertification.
658.707 Requests for hearings.
658.708 Hearings.
658.709 Conduct of hearings.
658.710 Decision of the Administrative Law Judge.
658.711 Decision of the Administrative Review Board.

    Authority: Wagner-Peyser Act of 1933, as amended, 29 U.S.C. 49 et 
seq.; 38 U.S.C. chapters 41 and 42; 5 U.S.C. 301 et seq.; sections 
658.410, 658.411 and 658.413 also issued under 44 U.S.C. 3501 et seq.

    Source: 45 FR 39468, June 10, 1980, unless otherwise noted.

Subparts A-D [Reserved]



                 Subpart E_Job Service Complaint System



Sec.658.400  Purpose and scope of subpart.

    This subpart sets forth the regulations governing the Job Service 
complaint system at both the State and Federal levels.



Sec.658.401  Types of complaints handled by the JS complaint system.

    (a)(1) The types of complaints (JS related complaints) which shall 
be handled to resolution by the JS complaint system are as follows: (i) 
Complaints against an employer about the specific job to which the 
applicant was referred by the JS involving violations of the terms and 
conditions of the job order or employment-related law (employer-related 
complaint) and (ii) complaints about Job Service actions or omissions 
under JS regulations (agency-related complaints). These complaint 
procedures are not applicable to UI, or WIA

[[Page 6]]

complaints. Complaints alleging violations of UI, or WIA regulations 
should be handled within the procedures set forth in the respective 
regulations.
    (2) A complaint shall be handled to resolution by these regulations 
only if it is made within one year of the alleged occurrence.
    (b) Complaints by veterans alleging employer violations of the 
mandatory listing requirements under 38 U.S.C. 2012 shall not be handled 
under this subpart. The State agency shall handle such complaints under 
the Department's regulations at 41 CFR part 60-250.
    (c) Complaints from MSFWs alleging violations of employment-related 
laws enforced by ESA or OSHA shall be taken in writing by the State 
agency and the ETA regional office and referred to ESA or OSHA pursuant 
to the procedures set forth in Sec. Sec.658.414 and 658.422. All other 
complaints alleging violations of employment-related Federal, State or 
local laws other than JS regulations by employers, their agents, or DOL 
subagencies other than JS (non-JS related complaints) shall be logged by 
the State agency and the ETA regional office and the complainant shall 
be referred to the appropriate agency pursuant to procedures set forth 
in Sec. Sec.658.414 and 658.422.
    (d) Certain types of complaints, such as, but not limited to, 
complaints by MSFWs, and complaints alleging unlawful discrimination, 
shall, as set forth in this subpart, be handled by specified officials 
of the State agency or of ETA.

[45 FR 39468, June 10, 1980, as amended at 71 FR 35523, June 21, 2006]

                    State Agency JS Complaint System



Sec.658.410  Establishment of State agency JS complaint system.

    (a) Each State agency shall establish and maintain a Job Service 
complaint system pursuant to this subpart.
    (b) The State Administrator shall have overall responsibility for 
the operation of the State agency JS complaint system. At the local 
office level, the local office manager shall be responsible for the 
management of the JS complaint system.
    (c)(1) State agencies shall ensure that centralized control 
procedures are established for the handling of complaints and files 
relating to the handling of complaints. The Manager or Administrator of 
the local or State office taking the complaint shall ensure that a 
central complaint log is maintained, listing all complaints received, 
and specifying for each complaint:
    (i) The name of the complainant,
    (ii) The name of the respondent (employer or State agency),
    (iii) The date the complaint is filed,
    (iv) Whether the complaint is by or on behalf of an MSFW,
    (v) Whether the complaint is JS-related,
    (vi) If the complaint is JS-related, whether it is employer-related 
or agency-related,
    (vii) If the complaint is non-JS-related, the information required 
by Sec.658.414(c), and
    (viii) The action taken, including for JS-related complaints, 
whether the complaint has been resolved.
    (2) Within one month after the end of the calendar quarter during 
which a local office receives an MSFW complaint (JS or non-JS related), 
the local office manager shall transmit a copy of that portion of the 
log containing the information on the MSFW complaint(s) or a separate 
listing of the relevant information from the log for each MSFW complaint 
to the State Administrator. Within two months after the end of each 
calendar quarter the State Administrator shall transmit copies of all 
local and State office complaint logs received for that quarter to the 
Regional Administrator.
    (3) State agencies shall ensure that any action taken by the 
responsible official, including referral, on a JS-related or non-JS 
related complaint from an MSFW alleging a violation of employment 
related laws enforced by ESA or OSHA is fully documented in a file 
containing all relevant information, including a copy of the original 
complaint form, a copy of any JS reports, any related correspondence, a 
list of actions taken, and a record of related telephone calls.
    (4) At the State office level, the State Administrator shall ensure 
that all JS-related complaints referred from local

[[Page 7]]

offices, and all correspondence relating thereto are logged with a 
notation of the nature of each item.
    (d) State agencies shall ensure that information pertaining to the 
use of the JS complaint system is publicized. This shall include the 
prominent display of an ETA-approved JS complaint system poster in each 
local office, satellite or district office, and at each State agency 
operated day-haul facility.

(Approved by the Office of Management and Budget under control number 
1205-0039)

(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[45 FR 39468, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec.658.411  Filing and assignment of JS-related complaints.

    (a) JS-related complaints may be filed in any office of the State 
job service agency.
    (b) Assignment of complaints to local office personnel shall be as 
follows:
    (1) All JS-related complaints filed with a local office, and 
alleging unlawful discrimination by race, color, religion, national 
origin, sex, age, or physical or mental status unrelated to job 
performance (handicap) shall be assigned to a local office Equal 
Opportunity (EO) representative if the local office has a trained and 
designated EO representative, or, if the local office does not have such 
a representative, shall be sent immediately to the State agency for 
logging and assignment to the EO representative or, where appropriate, 
handled in accordance with the procedures set forth at 29 CFR part 31. 
The EO representative shall refer complaints alleging discrimination by 
employers to the Equal Employment Opportunity Commission or other 
appropriate enforcement agency. Complaints retained by an EO 
representative shall be subject to the hearing and appeal rights as are 
normally provided in accordance with this subpart. The State agency 
complaint specialist shall follow-up with the EO representative or with 
other responsible enforcement agency monthly regarding MSFW complaints 
and quarterly regarding non-MSFW complaints, and shall inform the 
complainants of the status of the complaint periodically.
    (2) All JS-related and non-JS related complaints other than those 
described in paragraph (b)(1) of this section shall be handled by the 
local office manager or assigned by the local office manager to a local 
office employee trained in JS complaint procedures.
    (c) Assignment of complaints to State office personnel shall be as 
follows:
    (1) The handling of all JS-related complaints received by the State 
office alleging unlawful discrimination by race, color, religion, 
national origin, sex, age, physical or mental status unrelated to job 
performance (handicap) status shall be assigned to a State EO 
representative and, where appropriate, handled in accordance with 
procedures set forth at 29 CFR part 31.
    (2) The handling of all other JS-related complaints and all non-JS-
related complaints received by the State office shall be assigned to a 
State agency official designated by the State Administrator, provided 
that the State agency official designated to handle MSFW complaints 
shall be the State MSFW Monitor Advocate.



Sec.658.412  Complaint resolution.

    (a) A JS-related complaint is resolved when:
    (1) The complainant indicates satisfaction with the outcome, or
    (2) The complainant chooses not to elevate the complaint to the next 
level of review, or
    (3) The complainant or the complainant's authorized representative 
fails to respond within 20 working days or in cases where the 
complainant is an MSFW, 40 working days of a written request by the 
appropriate local or State office, or
    (4) The complainant exhausts the final level of review, or
    (5) A final determination has been made by the enforcement agency to 
which the complaint was referred.



Sec.658.413  Initial handling of complaints by the State or local office.

    (a) There shall be an appropriate official available during regular 
office hours to take complaints in each local office.

[[Page 8]]

    (b) Whenever an individual indicates an interest in making any 
complaint to a State agency office, the appropriate JS official shall 
offer to explain the operation of the JS complaint system. The 
appropriate JS official shall offer to take the complaint in writing if 
it is JS related, or if non-JS related, it alleges violations of 
employment related laws enforced by ESA or OSHA and is filed by or on 
behalf of an MSFW. The official shall require that the complainant put 
the complaint on the JS Complaint/Referral Form prescribed or approved 
by the ETA. The JS Complaint/Referral Form shall be used for all 
complaints taken by a State agency, including complaints about unlawful 
discrimination, except as provided in paragraph (c) of this section. The 
State agency official shall offer to assist the complainant in filling 
out the form and shall do so if the complainant desires such assistance. 
If the complainant also represents several other complainants, all such 
complainants shall be named on the JS Complaint/Referral Form. The 
complainant shall sign the completed form. The identity of the 
complainant(s) and any persons who furnish information relating to, or 
assisting in, an investigation of a complaint shall be kept confidential 
to the maximum extent possible, consistent with applicable law and a 
fair determination of the complaint. A copy of the completed JS 
Complaint/Referral Form shall be given to the complainant(s), and the 
complaint form shall be given to the appropriate JS official.
    (c) If a JS official receives a complaint in any form (e.g., a 
letter) which is signed by the complainant and includes sufficient 
information for the JS official to initiate an investigation, the 
document shall be treated as if it were a properly completed JS 
Complaint/Referral Form filed in person by the complainant. The JS 
official shall send a confirming letter to this effect to the 
complainant and shall give the document to the appropriate JS official. 
If the complainant has not provided sufficient information to 
investigate the matter expeditiously, the JS official shall request 
additional information from the complainant.
    (d) If the appropriate JS official determines that the complaint is 
not JS-related, the official shall follow the procedures set forth in 
Sec.658.414.
    (e) If the appropriate JS official determines that the complaint is 
JS-related, the official shall ensure that the complaint is handled in 
accordance with this subpart E.
    (f) During the initial discussion with the complainant, the JS 
official receiving the complaint shall:
    (1) Make every effort to obtain all the information he/she perceives 
to be necessary to investigate the complaint;
    (2) Request that the complainant indicate all of the addresses 
through which he or she might be contacted during the investigation of 
the complaint;
    (3) Request that the complainant contact the JS before leaving the 
area if possible, and explain the need to maintain contact during the 
complaint investigation.

(Approved by the Office of Management and Budget under control number 
1205-0039)

(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[45 FR 39468, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec.658.414  Referral of non-JS-related complaints.

    (a) To facilitate the operation of the coordinated enforcement 
procedures established at 29 CFR part 42, the State agency shall take 
from MSFWs in writing non-JS related complaints which allege violations 
of employment related laws enforced by ESA or OSHA. The official shall 
immediately refer the complaint to ESA or OSHA for prompt action. The JS 
official shall inform the MSFW of the enforcement agency (and the 
individual if known) to which the complaint will be referred and refer 
the complainant to other agencies, attorney, consumer advocate and/or 
other assistance where appropriate.
    (b) Upon receipt of all other non-JS related complaints, the JS 
official shall refer the complainant to the appropriate enforcement 
agency, another public agency, an attorney, a consumer advocate and/or 
other appropriate assistance.
    (c) For all non-JS-related complaints received pursuant to 
paragraphs (a) and (b) of this section, the appropriate

[[Page 9]]

JS official shall record the referral of the complainant and the 
complaint where paragraph (a) is applicable, and the agency or agencies 
(and individual(s), if known) to which the complainant and the complaint 
where paragraph (a) is applicable, were referred on the complaint log 
specified in Sec.658.410(c)(1). The JS official shall also prepare and 
keep the file specified in Sec.658.410(c)(3) for the complaints filed 
pursuant to paragraph (a) of this section.



Sec.658.415  Transferring complaints to proper JS office.

    (a) Where a JS-related complaint deals with an employer, the proper 
office to handle the complaint initially is ordinarily the local office 
serving the area in which the employer is located. Where a JS-related 
complaint deals with an office of a State agency, the proper office to 
handle the complaint initially is the local office serving the area in 
which the alleged violation of the JS regulations occurred. Where an 
agency-related complaint deals with more than one office of a State 
agency, with an alleged agency-wide violation, or with the State office, 
the appropriate State agency official may direct that the State office 
of that agency handle the complaint initially.
    (b) The State Administrator shall establish a system whereby the 
office in which an JS-related complaint is filed, alleging a violation 
in that same State, ensures that the JS Complaint/Referral Form is 
adequately completed and then sent to the proper State or local office 
of that agency. A copy of the referral letter shall be sent to the 
complainant.
    (c) Whenever a JS-related complaint deals with an employer in 
another State or another State agency, the State JS agency shall send, 
after ensuring that the JS Complaint/Referral Form is adequately 
completed, a copy of the JS Complaint/Referral Form and copies of any 
relevant documents to the State agency in the other State. Copies of the 
referral letter shall be sent to the complainant, and copies of the 
complaint and referral letter shall be sent to the ETA Regional 
Office(s) with jurisdiction over the transferring and receiving State 
agencies.
    (d) The State agency receiving the complaint after an interstate 
transferral under paragraph (c) of this section shall handle the 
complaint as if it had been initially filed with that office.
    (e) The ETA regional office with jurisdiction over the receiving 
State shall follow-up with the receiving State agency to ensure the 
complaint is handled in accordance with these regulations.
    (f) If the JS complaint is against more than one State JS agency, 
the complaint shall so clearly state. The complaint shall be handled as 
separate complaints and shall be handled according to procedures at 
Sec.658.416(c) and paragraph (c) of this section.



Sec.658.416  Action on JS-related complaints.

    (a) The appropriate State agency official handling an JS-related 
complaint shall offer to assist the complainant through the provision of 
appropriate JS services. For complaints against employers, this may 
include such services as referring a worker-complainant to another job.
    (b)(1) If the JS-related complaint concerns violations of an 
employment-related law, the local or State office official shall refer 
the complaint to the appropriate enforcement agency and notify the 
complainant in writing of the referral. The agency shall follow-up with 
the enforcement agency monthly regarding MSFW complaints and quarterly 
regarding non-MSFW complaints, and shall inform the complainant of the 
status of the complaint periodically.
    (2) If the enforcement agency makes a final determination that the 
employer violated an employment related law, the State JS agency shall 
initiate procedures for discontinuation of services immediately in 
accordance with subpart F. The State agency shall notify the complainant 
and the employer of this action.
    (c) If the complaint is filed initially in a local office, and is 
not referred under paragraph (b), the appropriate local office official 
shall investigate and attempt to resolve the complaint immediately upon 
receipt. If resolution

[[Page 10]]

has not been achieved to the satisfaction of the complainant within 15 
working days after receipt of the complaint, or 5 working days with 
respect to complaints filed by or on behalf of MSFWs, the local office 
official shall send the complaint to the State office for resolution or 
further action except that if the local office has made a written 
request for information pursuant to Sec.658.412(a)(3), these time 
periods shall not apply until the complainant's response is received in 
accordance with Sec.658.412(a)(3). The local office shall notify the 
complainant and the respondent, in writing, of the results of its 
investigation pursuant to this paragraph, and of the referral to the 
State office.
    (d) If the complaint is filed initially with the State office, and 
is not transferred to a local office under Sec.658.415(a), or not 
referred to an enforcement agency under paragraph (b) of this section, 
the appropriate State office official shall investigate and attempt to 
resolve the complaint immediately upon receipt. If the State office 
receives the complaint on referral from a local office, the State 
official shall attempt to resolve the complaint immediately and may, if 
necessary, conduct a further investigation. If resolution at the State 
office level has not been accomplished within 30 working days (20 
working days with respect to complaints by MSFWs) after the complaint 
was received by the State office (whether the complaint was received 
directly or from a local office pursuant to paragraph (c) of this 
section), the State office shall make a written determination regarding 
the complaint and shall send copies to the complainant and the 
respondent except that if the State office has made a written request 
for information pursuant to Sec.658.412 (a)(3) these time periods 
shall not apply until the complainant's response is received in 
accordance with Sec.658.412(a)(3). The determination must be sent by 
certified mail. The determination shall include all of the following:
    (1) The results of any State office investigation pursuant to this 
paragraph.
    (2) Conclusions reached on the allegations of the complaint.
    (3) An explanation of why the complaint was not resolved.
    (4) If the complaint is against an employer, and the State office 
has found that the employer has violated JS regulations, the 
determination shall state that the State will initiate procedures for 
discontinuation of services to the employer in accordance with subpart 
F.
    (5) If the complaint is against an employer and has not been 
referred to an enforcement agency pursuant to paragraph (b)(1) of this 
section, and the State office has found that the employer has not 
violated JS regulations, an offer to the complainant of the opportunity 
to request a hearing within 20 working days after the certified date of 
receipt of the notification.
    (6) If the complaint is against the State agency, an offer to the 
complainant of the opportunity to request in writing a hearing within 20 
working days after the certified date of receipt of the notification.
    (e) If the State office, within 20 working days from the certified 
date of receipt of the notification provided for in paragraph (d) of 
this section, receives a written request for a hearing in response 
thereto, the State office shall refer the complaint to a State hearing 
official for hearing. The parties to whom the determination was sent 
(the State agency may also be a party) shall then be notified in writing 
by the State office that:
    (1) The parties will be notified of the date, time and place of the 
hearing;
    (2) The parties may be represented at the hearing by an attorney or 
other representative;
    (3) The parties may bring witnesses and/or documentary evidence to 
the hearing;
    (4) The parties may cross-examine opposing witnesses at the hearing;
    (5) The decision on the complaint will be based on the evidence 
presented at the hearing;
    (6) The State hearing official may reschedule the hearing at the 
request of a party or its representative; and
    (7) With the consent of the State agency's representative and of the 
State hearing official, the party who requested the hearing may withdraw 
the request for hearing in writing before the hearing.

[[Page 11]]



Sec.658.417  Hearings.

    (a) Hearings shall be held by State hearing officials. A State 
hearing official may be any State official authorized to hold hearings 
under State law. They may be, for example, the same referees who hold 
hearings under the State unemployment compensation law or any official 
of the State agency, authorized by State law to preside at State 
administrative hearings.
    (b) The State hearing official may decide to conduct hearings on 
more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously in this fashion.
    (c) The State hearing official, upon the referral of a case for a 
hearing, shall:
    (1) Notify all involved parties of the date, time and place of the 
hearing; and
    (2) Re-schedule the hearing, as appropriate.
    (d) In conducting a hearing the State hearing official shall:
    (1) Regulate the course of the hearing;
    (2) Issue subpoenas, if empowered to do so under State law, if 
necessary;
    (3) Assure that all relevant issues are considered;
    (4) Rule on the introduction of evidence and testimony; and
    (5) Take any other action which is necessary to insure an orderly 
hearing.
    (e) The testimony at the hearing shall be recorded and may be 
transcribed when appropriate.
    (f) The parties shall be afforded the opportunity to present, 
examine, and cross-examine witnesses.
    (g) The State hearing official may elicit testimony from witnesses, 
but shall not act as advocate for any party.
    (h) The State hearing official shall receive and include in the 
record, documentary evidence offered by any party and accepted at the 
hearing. Copies thereof shall be made available by the party submitting 
the document to other parties to the hearing upon request.
    (i) Technical rules of evidence shall not apply to hearings 
conducted pursuant to this section, but rules or principles designed to 
assure production of the most credible evidence available and to subject 
testimony to test by cross-examination, shall be applied where 
reasonably necessary by the State hearing official. The State hearing 
official may exclude irrelevant, immaterial, or unduly repetitious 
evidence.
    (j) The case record, or any portion thereof, shall be available for 
inspection and copying by any party at, prior to, or subsequent to the 
hearing upon request. Special procedures may be used for disclosure of 
medical and psychological records such as disclosure to a physician 
designated by the individual.
    (k) The State hearing official shall, if feasible, resolve the 
dispute by conciliation at any time prior to the conclusion of the 
hearing.
    (l) At the State hearing official's discretion, other appropriate 
individuals, organizations, or associations may be permitted to 
participate in the hearing as amicus curiae (friends of the court) with 
respect to specific legal or factual issues relevant to the complaint. 
Any documents submitted by the amicus curiae shall be included in the 
record.
    (m) The following standards shall apply to the location of hearings 
involving parties in more than one State or in locations within a State 
but which are separated geographically so that access to the hearing 
location is extremely inconvenient for one or more parties as determined 
by the State hearing official.
    (1) Whenever possible, the State hearing official shall hold a 
single hearing, at a location convenient to all parties or their 
representatives wishing to appear and present evidence, and with all 
such parties and/or their representatives present.
    (2) If a hearing location cannot be established by the State hearing 
official pursuant to paragraph (m)(1) of this section, the State hearing 
official may conduct, with the consent of the parties, the hearing by a 
telephone conference call from a State agency office with all parties 
and their representatives not choosing to be present at that location 
permitted to participate in the hearing from their distant locations.
    (3) Where the State agency does not have the facilities to conduct 
hearings

[[Page 12]]

by telephone pursuant to paragraph (m)(1) or (m)(2) of this section, the 
State agencies in the States where the parties are located shall take 
evidence and hold the hearing in the same manner as used for appealed 
interstate unemployment claims in those States, to the extent that such 
procedures are consistent with Sec.658.416.

[45 FR 39468, June 10, 1980, as amended at 71 FR 35523, June 21, 2006]



Sec.658.418  Decision of the State hearing official.

    (a) The State hearing official may:
    (1) Rule that the case is improperly before it, that is, that there 
is a lack of jurisdiction over the case;
    (2) Rule that the complaint has been withdrawn properly and in 
writing;
    (3) Rule that reasonable cause exists to believe that the request 
has been abandoned or that repeated requests for re-scheduling are 
arbitrary and for the purpose of unduly delaying or avoiding a hearing;
    (4) Render such other rulings as are appropriate to the issues in 
question. However, the State hearing official shall not have 
jurisdiction to consider the validity or constitutionality of JS 
regulations or of the Federal statutes under which they are promulgated.
    (b) Based on the entire record, including the investigations and 
determinations of the local and State offices and any evidence provided 
at the hearing, the State hearing official shall prepare a written 
decision. The State hearing official shall send a copy of the decision 
stating the findings and conclusions of law and fact and the reasons 
therefor to the complainant, the respondent, entities serving as amicus 
capacity (if any), the State office, the Regional Administrator, and the 
Solicitor of Labor, Attn: Associate Solicitor for Employment and 
Training Legal Services, Department of Labor, room N2101, 200 
Constitution Avenue, NW., Washington, DC, 20210. The notification to the 
complainant and respondent must be sent certified mail.
    (c) All decisions of a State hearing official shall be accompanied 
by a written notice informing the parties (not including the Regional 
Administrator, the Solicitor of Labor, or entities serving in an amicus 
capacity) that, if they are not satisfied, they may, within 20 working 
days of the certified date of receipt of the decision, file an appeal in 
writing with the Regional Administrator. The notice shall give the 
address of the Regional Administrator.

                       Federal JS Complaint System



Sec.658.420  Establishment of JS complaint system at the ETA regional office.

    (a) Each Regional Administrator shall establish and maintain a JS 
complaint system at the DOL regional office level.
    (b) The Regional Administrator shall designate DOL officials to 
handle JS-related complaints as follows:
    (1) The handling of all JS-related complaints alleging 
discrimination by race, color, religion, national origin, sex, age, or 
physical or mental status unrelated to job performance (handicap), shall 
be assigned to a Regional Director for Equal Opportunity and Special 
Review (RDEOSR) and, where appropriate, handled in accordance with 
procedures at 29 CFR part 31.
    (2) The handling of all JS-related complaints other than those 
described in paragraphs (b)(1) of this section, shall be assigned to a 
regional office official designated by the Regional Administrator, 
provided that the regional office official designated to handle MSFW 
complaints shall be the Regional MSFW Monitor Advocate.
    (c) The Regional Administrator shall designate DOL officials to 
handle non-JS-related complaints in accordance with Sec.658.422: 
Provided, That the regional official designated to handle MSFW non-JS-
related complaints shall be the Regional MSFW Monitor Advocate.
    (d) The Regional Administrator shall assure that all JS-related 
complaints and all correspondence relating thereto are logged, with a 
notation of the nature of each item.



Sec.658.421  Handling of JS-related complaints.

    (a) No JS-related complaint shall be handled at the ETA regional 
office level until the complainant has exhausted the State agency 
administrative remedies set forth at Sec. Sec.658.410

[[Page 13]]

through 658.418. Therefore, if the Regional Administrator determines 
that any complainant, who has filed a JS-related complaint with the 
regional office, has not yet exhausted the administrative remedies at 
the State agency level, the Regional Administrator shall inform the 
complainant within 10 working days in writing that the complainant must 
first exhaust those remedies before the complaint may be filed in the 
regional office. A copy of this letter shall be sent to the State 
Administrator. However, nothing in this provision shall prevent an ETA 
regional office from accepting and handling to resolution a JS-related 
complaint pursuant to Sec.658.423 or Sec.658.702(c).
    (b) The ETA regional office shall be responsible for handling 
appeals of determinations made on complaints at the State level. An 
``appeal'' shall include any letter or other writing requesting review 
if it is received by the regional office and signed by a party to the 
complaint. Upon receipt of an appeal by the Regional Administrator after 
the exhaustion of State agency administrative remedies, the Regional 
Administrator immediately shall send for the complete State agency file, 
including the original JS Complaint/Referral Form.
    (c) The Regional Administrator shall review the file in the case and 
shall determine within ten (10) days whether any further investigation 
or action is appropriate, provided however that the Regional 
Administrator shall have twenty (20) working days to make this 
determination if legal advice is necessary.
    (d) If the Regional Administrator determines that no further action 
is warranted, the Regional Administrator shall send this determination 
in writing by certified mail to the appellant within five (5) days of 
his/her determination and may, in the Regional Administrator's 
discretion, offer the appellant a hearing before a DOL Administrative 
Law Judge, provided the appellant requests such a hearing in writing 
from the Regional Administrator within 20 working days of the certified 
date of receipt of the Regional Administrator's offer of hearing.
    (e) If the Regional Administrator determines that further 
investigation or other action is warranted, the Regional Administrator 
immediately shall undertake such an investigation, informal resolution 
or other action.
    (f) If the Regional Administrator determines to reverse or modify 
the decision of the State hearing official or the State Administrator, 
the Regional Administrator shall offer in writing by certified mail each 
party to the State hearing official's hearing or to whom the State 
office determination was sent, the opportunity for a hearing before a 
DOL Administrative Law Judge, provided the party requests such a hearing 
in writing within 20 working days of the certified date of the Regional 
Administrator's offer of hearing.
    (g) If the Regional Administrator finds reason to believe that a 
State agency or one of its local offices has violated JS regulations, 
the Regional Administrator shall follow the procedures set forth at 
subpart H of this part.
    (h) If the appeal is not resolved, pursuant to paragraph (e) of this 
section, to the appellant's satisfaction, the Regional Administrator 
may, in the Regional Administrator's discretion, offer the appellant in 
writing by certified mail a hearing before a DOL Administrative Law 
Judge provided the appellant requests such a hearing in writing from the 
Regional Administrator within 20 working days of the certified date of 
receipt of the Regional Administrator's offer of hearing.



Sec.658.422  Handling of non-JS-related complaints by the Regional 

Administrator.

    (a) Each non-JS-related complaint filed by an MSFW alleging 
violations of employment related laws enforced by ESA or OSHA shall be 
taken in writing, and referred to ESA or OSHA for prompt action pursuant 
to 29 CFR part 42.
    (b) Upon referring the complaint in accordance with paragraph (a) of 
this section, the regional official shall inform the complainant of the 
enforcement agency (and individual, if known) to which the complaint was 
referred and shall also refer the complainant to

[[Page 14]]

the enforcement agency, another public agency, an attorney, a consumer 
advocate and/or other appropriate assistance.
    (c) All other non-JS-related complaints alleging violations of 
employment related laws shall be logged. The complainant shall be 
referred to the appropriate agency for assistance.
    (d) For all non-JS-related complaints received and/or referred, the 
appropriate regional official shall record the referral of the 
complainant (or complaint filed on behalf of an MSFW), and the agency or 
agencies (and individual(s) if known) to which the complainant (or 
complaint) was referred on a complaint log, similar to the one described 
in Sec.658.410(c)(1). The appropriate regional official shall also 
prepare and keep the file specified in Sec.658.410(c)(3).



Sec.658.423  Handling of other complaints by the Regional Administrator.

    Whenever the regional office receives a JS-related complaint and the 
appropriate official determines that the nature and scope of the 
complaint are such that the time required to exhaust the administrative 
procedures at the State level would adversely affect a significant 
number of applicants, he/she shall take the complaint and follow up on 
the complaint as follows: for a complaint against an employer, the 
regional office shall handle the complaint in a manner consistent with 
the requirements imposed upon State agencies by Sec. Sec.658.413 and 
658.416 of this part. A hearing shall be offered to the parties once the 
Regional Administrator makes a determination on the complaint. For a 
complaint against a State agency, the regional office shall follow 
procedures established at Sec.658.702(c).



Sec.658.424  Federal hearings.

    (a) If a party requests a hearing pursuant to Sec.658.421 (d), 
(f), or (h) or Sec.658.423, the Regional Administrator shall:
    (1) Send the party requesting the hearing and all other parties to 
the prior State agency hearing, a written notice containing the 
statements set forth at Sec.658.416(e);
    (2) Compile four hearing files containing copies of all documents 
relevant to the case, indexed and compiled chronologically;
    (3) Send simultaneously one hearing file to the DOL Chief 
Administrative Law Judge, 800 K Street, NW., suite 400, Washington, DC 
20001-8002, one hearing file to the Administrator, and one hearing file 
to the Solicitor of Labor, Attn: Associate Solicitor for Employment and 
Training Legal Services, and retain one hearing file.
    (b) Upon the receipt of a hearing file, the DOL Administrative Law 
Judge designated by the Chief Administrative Law Judge shall notify the 
party requesting the hearing, all parties to the prior State hearing 
official hearing (if any), the State agency, the Regional Administrator, 
the Administrator, and the Solicitor of the receipt of the case. The DOL 
Administrative Law Judge shall afford the non-Federal parties 20 working 
days to submit legal arguments and supporting documentation, if any, in 
the case. The DOL Administrative Law Judge shall afford the Solicitor 20 
working days to submit legal arguments and supporting documentation, if 
any, in the case on behalf of the Federal parties. After the 20 working 
days elapse, the Hearing Officer shall decide whether to schedule a 
hearing, or make a determination on the record.
    (c) The DOL Administrative Law Judge may decide to conduct hearings 
on more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously in this fashion.
    (d) At the DOL Administrative Law Judge's discretion, other 
appropriate individuals, organizations, or associations may be permitted 
to participate in the hearing as amicus curiae with respect to specific 
legal or factual issues relevant to the complaint. Any documents 
submitted by the amicus curiae shall be included in the record.
    (e) The following standards shall apply to the location of hearings 
involving parties in more than one State or in locations which are 
within a State but which are separated geographically so that access to 
the hearing location is extremely inconvenient for one or more parties 
as determined by the Administrative Law Judge.

[[Page 15]]

    (1) Whenever possible, the Administrative Law Judge shall hold a 
single hearing, at a location convenient to all parties or their 
representatives wishing to appear and present evidence, and with all 
such parties and/or their representatives present.
    (2) If a hearing location cannot be established by the 
Administrative Law Judge at a location pursuant to paragraph (e)(1) of 
this section, the Administrative Law Judge may conduct, with the consent 
of the parties, the hearing by a telephone conference call from an 
office with all parties and their representatives not choosing to be 
present at that location permitted to participate in the hearing from 
their distant locations.
    (3) Where the Administrative Law Judge is unable to locate 
facilities to conduct hearings by telephone pursuant to paragraph (e)(1) 
or (e)(2) of this section, the Administrative Law Judge shall take 
evidence in the States where the parties are located and hold the 
hearing in the same manner as used for appealed interstate unemployment 
claims in those States, to the extent that such procedures are 
consistent with Sec.658.416.
    (f) The DOL Administrative Law Judge shall:
    (1) Notify all involved parties of the date, time and place of the 
hearing; and
    (2) Re-schedule the hearing, as appropriate.
    (g) In conducting a hearing the DOL Administrative Law Judge shall:
    (1) Regulate the course of the hearing;
    (2) Issue subpoenas if necessary;
    (3) Consider all relevant issues which are raised;
    (4) Rule on the introduction of evidence and testimony;
    (5) Take any other action which is necessary to insure an orderly 
hearing.
    (h) The testimony at the hearing shall be recorded, and shall be 
transcribed if appropriate.
    (i) The parties to the hearing shall be afforded the opportunity to 
present, examine, and cross-examine witnesses. The DOL Administrative 
Law Judge may elicit testimony from witnesses, but shall not act as 
advocate for any party.
    (j) The DOL Administrative Law Judge shall receive, and make part of 
the record, documentary evidence offered by any party and accepted at 
the hearing. Copies thereof shall be made available by the party 
submitting the documentary evidence, to any part to the hearing upon 
request.
    (k) Technical rules of evidence shall not apply to hearings 
conducted pursuant to this part, but rules or principles designed to 
assure production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where reasonably 
necessary by the Administrative Law Judge conducting the hearing. The 
Administrative Law Judge may exclude irrelevant, immaterial, or unduly 
repetitious evidence.
    (l) The case record, or any portion thereof, shall be available for 
inspection and copying by any party to the hearing at, prior to, or 
subsequent to the hearing upon request. Special procedures may be used 
for disclosure of medical and psychological records such as disclosure 
to a physician designated by the individual concerned.
    (m) The DOL Administrative Law Judge shall, if feasible, encourage 
resolution of the dispute by conciliation at any time prior to the 
conclusion of the hearing.

[45 FR 39468, June 10, 1980, as amended at 56 FR 54708, Oct. 22, 1991]



Sec.658.425  Decision of DOL Administrative Law Judge.

    (a) The DOL Administrative Law Judge may:
    (1) Rule that there is a lack of jurisdiction over the case;
    (2) Rule that the appeal has been withdrawn properly and in writing, 
with the written consent of all the parties;
    (3) Rule that reasonable cause exists to believe that the appeal has 
been abandoned or that repeated requests for re-scheduling are arbitrary 
and for the purpose of unduly delaying or avoiding a hearing; or
    (4) Render such other rulings as are appropriate to the issues in 
question. However, the DOL Administrative Law Judge shall not have 
jursidiction to consider the validity or constitutionality of JS 
regulations or of the

[[Page 16]]

Federal statutes under which they are promulgated.
    (b) Based on the entire record, including any legal briefs, the 
record before the State agency, the investigation (if any) and 
determination of the Regional Administrator, and evidence provided at 
the hearing, the DOL Administrative Law Judge shall prepare a written 
decision. The DOL Administrative Law Judge shall send a copy of the 
decision stating the findings and conclusions of law and fact and the 
reasons therefor to the parties to the hearing, including the State 
agency, the Regional Administrator, the Administrator, and the 
Solicitor, and to entities filing amicus briefs (if any).
    (c) The decision of the DOL Administrative Law Judge shall be the 
final decision of the Secretary.



Sec.658.426  Complaints against USES.

    Complaints alleging that an ETA regional office or the national 
office of USES has violated JS regulations should be mailed to the 
Assistant Secretary for Employment and Training, U.S. Department of 
Labor, Washington, DC 20210. Such complaints should include:
    (a) The allegations of wrong-doing, (b) the date of the incident, 
(c) location of the incident, (d) who the complaint is against, and (e) 
any other relevant information available to the complainant. The 
Assistant Secretary or the Regional Administrator as designated shall 
make a determination and respond to the complainant after investigation 
of the complaint.



 Subpart F_Discontinuation of Services to Employers by the Job Service 

                                 System



Sec.658.500  Scope and purpose of subpart.

    This subpart contains the regulations governing the discontinuation 
of services provided pursuant to 20 CFR part 653 to employers by the 
USES, including State agencies.



Sec.658.501  Basis for discontinuation of services.

    (a) The State agency shall initiate procedures for discontinuation 
of services to employers who:
    (1) Submit and refuse to alter or withdraw job orders containing 
specifications which are contrary to employment-related laws;
    (2) Submit job orders and refuse to provide assurances, in 
accordance with paragraph (d) above, that the jobs offered are in 
compliance with employment-related laws, or to withdraw such job orders;
    (3) Are found through field checks or otherwise to have either 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders;
    (4) Are found by a final determination by an appropriate enforcement 
agency to have violated any employment-related laws and notification of 
this final determination has been provided to the JS by that enforcement 
agency;
    (5) Are found to have violated JS regulations pursuant to Sec.
658.416(d)(4);
    (6) Refuse to accept qualified workers referred through the 
clearance system;
    (7) Refuse to cooperate in the conduct of field checks conducted 
pursuant to Sec.653.503; or
    (8) Repeatedly cause the initiation of the procedures for 
discontinuation of services pursuant to paragraphs (a)(1) through (6) of 
this section.
    (b) The State agency may discontinue services immediately if, in the 
judgment of the State Administrator, exhaustion of the administrative 
procedures set forth in this subpart at Sec. Sec.658.501 through 
658.502 would cause substantial harm to a significant number of workers. 
In such instances, procedures at Sec.658.503 (b) et seq. shall be 
followed.
    (c) For employers who are alleged to have not complied with the 
terms of the temporary labor certification, State agencies shall notify 
the Regional Adminstrator of the alleged non-compliance for 
investigation and pursuant to Sec.655.210 consideration of 
ineligibility for subsequent temporary labor certification.



Sec.658.502  Notification to employers.

    (a) The State agency shall notify the employer in writing that it 
intends to

[[Page 17]]

discontinue the provision of JS services pursuant to 20 CFR part 653 and 
the reason therefore:
    (1) Where the decision is based on submittal and refusal to alter or 
to withdraw job orders containing specifications contrary to employment-
related laws, the State agency shall specify the date the order was 
submitted, the job order involved, the specifications contrary to 
employment-related laws and the laws involved. The employer shall be 
notified in writing that all JS services will be terminated in 20 
working days unless the employer within that time:
    (i) Provides adequate evidence that the specifications are not 
contrary to employment-related laws, or
    (ii) Withdraws the specifications and resubmits the job order in 
compliance with all employment-related laws, or
    (iii) If the job is no longer available makes assurances that all 
future job orders submitted will be in compliance with all employment-
related laws, or
    (iv) Requests a hearing from the State agency pursuant to Sec.
658.417.
    (2) Where the decision is based on the employer's submittal of an 
order and refusal to provide assurances that the job is in compliance 
with employment-related laws or to withdraw the order, the State agency 
shall specify the date the order was submitted, the job order involved 
and the assurances involved. The employer shall be notified that all JS 
services will be terminated within 20 working days unless the employer 
within that time:
    (i) Resubmits the order with the appropriate assurances,
    (ii) If the job is no longer available, make assurances that all 
future job orders submitted will contain all necessary assurances that 
the job offered is in compliance with employment-related laws, or
    (iii) Requests a hearing from the State agency pursuant to Sec.
658.417.
    (3) Where the decision is based on a finding that the employer has 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders, the 
State agency shall specify the basis for that determination. The 
employer shall be notified that all JS services will be terminated in 20 
working days unless the employer within that time:
    (i) Provides adequate evidence that terms and conditions of 
employment were not misrepresented, or
    (ii) Provides adequate evidence that there was full compliance with 
the assurances made on the job orders, or
    (iii) Provides resolution of a complaint which is satisfactory to a 
complainant referred by the JS, and
    (iv) Provides adequate assurance that specifications on future 
orders will accurately represent the terms and conditions of employment 
and that there will be full compliance with all job order assurances, or
    (v) Requests a hearing from the State agency pursuant to Sec.
658.417.
    (4) Where the decision is based on a final determination by an 
enforcement agency that the employer-related laws, the State agency 
shall specify the determination. The employer shall be notified that all 
JS services will be terminated in 20 working days unless the employer 
within that time:
    (i) Provides adequate evidence that the enforcement agency has 
reversed its ruling and that the employer did not violate employment-
related laws, or
    (ii) Provides adequate evidence that the appropriate fines have been 
paid and/or appropriate restitution has been made, and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future.
    (5) Where the decision is based on a finding of a violation of JS 
regulations under Sec.658.416(d)(4), the State agency shall specify 
the finding. The employer shall be notified that all JS services will be 
terminated in 20 working days unless the employer within that time:
    (i) Provides adequate evidence that the employer did not violate JS 
regulations, or
    (ii) Provides adequate evidence that appropriate restitution has 
been made or remedial action taken, and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been

[[Page 18]]

corrected and the same or similar violations are not likely to occur in 
the future, or
    (iv) Requests a hearing from the State agency pursuant to Sec.
658.417.
    (6) Where the decision is based on an employer's failure to accept 
qualified workers referred through the clearance system, the State 
agency shall specify the workers referred and not accepted. The employer 
shall be notified that all JS services will be terminated in 20 working 
days unless the employer within that time:
    (i) Provides adequate evidence that the workers were accepted, or
    (ii) Provides adequate evidence that the workers were not available 
to accept the job, or
    (iii) Provides adequate evidence that the workers were not 
qualified, and
    (iv) Provides adequate assurances that qualified workers referred in 
the future will be accepted; or
    (v) Requests a hearing from the State agency pursuant to Sec.
658.417.
    (7) Where the decision is based on lack of cooperation in the 
conduct of field checks, the State agency shall specify the lack of 
cooperation, the employer shall be notified that all JS services will be 
terminated in 20 working days unless the employer within that time:
    (i) Provides adequate evidence that he did cooperate, or
    (ii) Cooperates immediately in the conduct of field checks, and
    (iii) Provides assurances that he/she will cooperate in future field 
checks in further activity, or
    (iv) Requests a hearing from the State agency pursuant to Sec.
658.417.
    (b) If the employer chooses to respond pursuant to this section by 
providing documentary evidence or assurances, he/she must at the same 
time request a hearing if such hearing is desired in the event that the 
State agency does not accept the documentary evidence or assurances as 
adequate.
    (c) Where the decision is based on repeated initiation of procedures 
for discontinuation of services, the employer shall be notified that 
services have been terminated.
    (d) If the employer makes a timely request for a hearing, in 
accordance with this section, the State agency shall follow procedures 
set forth at Sec.658.417 and notify the complainant whenever the 
discontinuation of services is based on a complaint pursuant to Sec.
658.501(a)(5).



Sec.658.503  Discontinuation of services.

    (a) If the employer does not provide a satisfactory response in 
accordance with Sec.658.502, within 20 working days, or has not 
requested a hearing, the State agency shall immediately terminate 
services to the employer.
    (b) If services are discontinued to an employer subject to Federal 
Contractor Job Listing Requirements, the State agency shall notify the 
ETA regional office immediately.



Sec.658.504  Reinstatement of services.

    (a) Services may be reinstated to an employer after discontinuation 
under Sec.658.503, if:
    (1) The State is ordered to do so by a Federal Administrative Law 
Judge or Regional Administrator, or
    (2)(i) The employer provides adequate evidence that any policies, 
procedures or conditions responsible for the previous discontinuation of 
services have been corrected and that the same or similar difficulties 
are not likely to occur in the future, and
    (ii) The employer provides adequate evidence that the employer has 
responded adequately to any findings of an enforcement agency, State JS 
agency, or USES, including restitution to the complainant and the 
payment of any fines, which were the basis of the discontinuation of 
services.
    (b) The State agency shall notify, within 20 working days, the 
employer requesting reinstatement whether his request has been granted. 
If the State denies the request for reinstatement, the basis for the 
denial shall be specified and the employer shall be notified that he/she 
may request a hearing within 20 working days.
    (c) If the employer makes a timely request for a hearing, the State 
agency shall follow the procedures set forth at Sec.658.417.
    (d) The State agency shall reinstate services to an employer if 
ordered to do so by a State hearing officer, Regional Administrator, or 
Federal Administrative Law Judge as a result of a hearing

[[Page 19]]

offered pursuant to paragraph (c) of this section.



  Subpart G_Review and Assessment of State Agency Compliance With Job 

                           Service Regulations

    Authority: Wagner-Peyser Act of 1933, as amended, 29 U.S.C. 49 et 
seq. 5 U.S.C. 301 et seq.



Sec.658.600  Scope and purpose of subpart.

    This subpart sets forth the regulations governing review and 
assessment of State agency compliance with the Job Service regulations 
at 20 CFR parts 601, 602, 603, 604, 620, 621, 651-658 and 29 CFR part 8. 
All recordkeeping and reporting requirements contained in parts 653 and 
658 have been approved by the Office of Management and Budget as 
required by the Federal Reports Act of 1942.



Sec.658.601  State agency responsibility.

    (a) Each State agency shall establish and maintain a self-appraisal 
system for job service operations to determine success in reaching goals 
and to correct deficiencies in performance. The self-appraisal system 
shall include numerical (quantitative) appraisal and non-numerical 
(qualitative) appraisal.
    (1) Numerical appraisal at the local office level shall be conducted 
as follows:
    (i) Performance shall be measured on a quarterly-basis against 
planned service levels as stated in the State Program and Budget Plan 
(PBP). The State plan shall be consistent with numerical goals contained 
in local office plans.
    (ii) To appraise numerical activities/indicators, actual results as 
shown on the Employment Security Automated Reporting System (ESARS) 
tables and Cost Accounting Reports shall be compared to planned levels. 
Variances between achievement and plan shall be identified.
    (iii) When the numerical appraisal of required activities/indicators 
identifies significant variances from planned levels, additional 
analysis shall be conducted to isolate possible contributing factors. 
This data analysis shall include, as appropriate, comparisons to past 
performance, attainment of PBP goals and consideration of pertinent non-
numerical factors.
    (iv) Results of local office numerical reviews shall be documented 
and significant deficiencies identified. A corrective action plan as 
described in paragraph (a)(6) shall be developed to address these 
deficiencies.
    (v) The result of local office appraisal, including corrective 
action plans, shall be communicated in writing to the next higher level 
of authority for review. This review shall cover adequacy of analysis, 
appropriateness of corrective actions, and need for higher level 
involvement. When this review is conducted at an area or district 
office, a report describing local office performance within the area or 
district jurisdiction shall be communicated to the central office on a 
quarterly basis.
    (2) Numerical appraisal at the central office level shall be 
conducted as follows:
    (i) Performance shall be measured on a quarterly basis against 
planned service levels as stated in the State Program and Budget Plan 
(PBP). The State plan shall be consistent with numerical goals contained 
in local office plans.
    (ii) To appraise these key numerical activities/indicators, actual 
results as shown on the Employment Security Automated Reporting System 
(ESARS) tables and Cost Accounting Reports shall be compared to planned 
levels. Variances between achievement and plan shall be identified.
    (iii) The central office shall review Statewide data, and 
performance against planned service levels as stated in the State 
Program and Budget Plan (PBP) on at least a quarterly basis to identify 
significant Statewide deficiencies and to determine the need for 
additional analysis, including identification of trends, comparisons to 
past performance, and attainment of PBP goals.
    (iv) Results of numerical reviews shall be documented and 
significant deficiencies identified. A corrective action plan as 
described in paragraph (a)(5) of this section shall be developed to 
address these deficiencies. These plans shall be submitted to the ETA

[[Page 20]]

Regional Office as part of the periodic performance process described at 
20 CFR 658.603(d)(2).
    (3) Nonnumerical (qualitative) appraisal of local office job service 
title III activities shall be conducted at least annually as follows:
    (i) Each local office shall assess the quality of its services to 
applicants, employers, and the community and its compliance with Federal 
regulations.
    (ii) At a minimum, nonnumerical review shall include an assessment 
of the following factors:
    (A) Appropriateness of services provided to applicants and 
employers;
    (B) Timely delivery of services to applicants and employers;
    (C) Staff responsiveness to individual applicant and employer needs;
    (D) Thoroughness and accuracy of documents prepared in the course of 
service delivery; and
    (E) Effectiveness of JS interface with external organizations, i.e., 
other ETA funded programs, community groups, etc.
    (iii) Nonnumerical review methods shall include:
    (A) Observation of processes;
    (B) Review of documents used in service provisions; and
    (C) Solicitation of input from applicants, employers, and the 
community.
    (iv) The result of nonnumerical reviews shall be documented and 
deficiencies identified. A corrective action plan that addresses these 
deficiencies as described in paragraph (a)(6) of this section shall be 
developed.
    (v) The result of local office nonnumerical appraisal, including 
corrective actions, shall be communicated in writing to the next higher 
level of authority for review. This review shall cover thoroughness and 
adequacy of local office appraisal, appropriateness of corrective 
actions, and need for higher level involvement. When this review is 
conducted at an area or district level, a report summarizing local 
office performance within that jurisdiction shall be communicated to the 
central office on an annual basis.
    (4) As part of its oversight responsibilities, the central office 
shall conduct onsite reviews in those local offices which show 
continuing internal problems or deficiencies in performance as indicated 
by such sources as data analysis, nonnumerical appraisal, or other 
sources of information.
    (5) Nonnumerical (qualitative) review of central office job service 
activities shall be conducted as follows:
    (i) Central office operations shall be assessed annually to 
determine compliance with Federal regulations and to assess progress 
made on annually established work plans established for central office 
staff.
    (ii) Results of nonnumerical reviews shall be documented and 
deficiencies identified. A corrective action plan that addresses these 
deficiencies shall be developed.
    (6) Corrective action plans developed to address deficiencies 
uncovered at any administrative level within the State as a result of 
the self-appraisal process shall include:
    (i) Specific descriptions of the type of action to be taken, the 
time frame involved and the assignment of responsibility.
    (ii) Provision for the delivery of technical assistance as needed.
    (iii) A plan to conduct follow-up on a timely basis to determine if 
action taken to correct the deficiencies has been effective.
    (7)(a) The provisions of the JS regulations which require numerical 
and nonnumerical assessment of service to special applicant groups, 
e.g., services to veterans at 20 CFR 653.221 through 653.230 and 
services to MSFWs at 20 CFR 653.108, are supplementary to the provisions 
of this section.
    (b) Each State Administrator and local office manager shall assure 
that their staffs know and carry out JS regulations, including 
regulations on performance standards and program emphases, and any 
corrective action plans imposed by the State agency or by the ETA.
    (c) Each State Administrator shall assure that the State agency 
complies with its approved program budget plan.
    (d) Each State Administrator shall assure to the maximum extent 
feasible the accuracy of data entered by the State agency into ETA 
required management information systems. Each State agency shall 
establish and maintain a data validation system pursuant to ETA 
instructions. The system shall

[[Page 21]]

review every local office at least once every four years. The system 
shall include the validation of time distribution reports and the review 
of data gathering procedures.



Sec.658.602  ETA national office responsibility.

    The ETA national office shall:
    (a) Monitor ETA regional offices' carrying out of JS regulations;
    (b) From time to time, conduct such special reviews and audits as 
necessary to monitor ETA regional office and State agency compliance 
with JS regulations;
    (c) Offer technical assistance to the ETA regional offices and State 
agencies in carrying out JS regulations and programs;
    (d) Have report validation surveys conducted in support of resource 
allocations;
    (e) Develop tools and techniques for reviewing and assessing State 
agency performance and compliance with JS regulations.
    (f) ETA shall appoint a National MSFW Monitor Advocate, who shall 
devote full time to the duties set forth in this subpart. The National 
MSFW Monitor Advocate shall:
    (i) Review the effective functioning of the Regional and State MSFW 
Monitor Advocates;
    (ii) Review the performance of State agencies in providing the full 
range of JS services to MSFWs;
    (iii) Take steps to resolve or refer JS-related problems of MSFWs 
which come to his/her attention;
    (iv) Take steps to refer non JS-related problems of MSFWs which come 
to his/her attention;
    (v) Recommend to the Administrator changes in policy toward MSFWs; 
and
    (vi) Serve as an advocate to improve services for MSFWs within JS. 
The National MSFW Monitor Advocate shall be a member of the National 
Farm Labor Coordinated Enforcement Staff Level Working Committee.
    (1) The National MSFW Monitor Advocate shall be appointed by the 
Administrator after informing farmworker organizations and other 
organizations with expertise concerning MSFWs of the openings and 
encouraging them to refer qualified applicants to apply through the 
federal merit system. Among qualified candidates, determined through 
merit systems procedures, individuals shall be sought who meet the 
criteria used in the selection of the State MSFW Monitor Advocates, as 
provided in Sec.653.108(b).
    (2) The National MSFW Monitor Advocate shall be assigned staff 
necessary to fulfill effectively all the responsibilities set forth in 
this subpart.
    (3) The National MSFW Monitor Advocate shall submit an annual report 
(``Annual Report'') to the Administrator, the ETA Assistant Secretary, 
and the National Farm Labor Coordinating Committee covering the matters 
set forth in this subpart.
    (4) The National MSFW Monitor Advocate shall monitor and assess 
State agency compliance with JS regulations affecting MSFWs on a 
continuing basis. His/her assessment shall consider
    (i) Information from Regional and State MSFW Monitor Advocates;
    (ii) Program performance data, including the service indicators;
    (iii) Periodic reports from regional offices;
    (iv) All federal on-site reviews;
    (v) Selected State on-site reviews;
    (vi) Other relevant reports prepared by USES;
    (vii) Information received from farmworker organizations and 
employers; and
    (viii) His/her personal observations from visits to State JS 
offices, agricultural work sites and migrant camps. In the Annual 
Report, the National MSFW Monitor Advocate shall include both a 
quantitative and qualitative analysis of his/her findings and the 
implementation of his/her recommendations by State and federal 
officials, and shall address the information obtained from all of the 
foregoing sources.
    (5) The National MSFW Monitor Advocate shall review the activities 
of the State/federal monitoring system as it applies to services to 
MSFWs and the JS complaint system including the effectiveness of the 
regional monitoring function in each region and shall recommend any 
appropriate changes in

[[Page 22]]

the operation of the system. The National MSFW Monitor Advocate's 
findings and recommendations shall be fully set forth in the Annual 
Report.
    (6) If the National MSFW Monitor Advocate finds that the 
effectiveness of any Regional MSFW Monitor Advocate has been 
substantially impeded by the Regional Administrator or other Regional 
Office official, he/she shall, if unable to resolve such problems 
informally, report and recommend appropriate actions directly to the 
Administrator. If the National MSFW Monitor Advocate receives 
information that the effectiveness of any State Monitor Advocate has 
been substantially impeded by the State Administrator or other State or 
federal JS official, he/she shall, in the absence of a satisfactory 
informal resolution at the regional level, report and recommend 
appropriate actions directly to the Administrator.
    (7) The National MSFW Monitor Advocate shall be informed of all 
proposed changes in policy and practice within USES, including JS 
regulations, which may affect the delivery of services to MSFWs. The 
National MSFW Monitor Advocate shall advise the Administrator concerning 
all such proposed changes which may adversely affect MSFWs. The National 
MSFW Monitor Advocate shall propose directly to the Administrator 
changes in JS policy and administration which may substantially improve 
the delivery of services to MSFWs. He/she shall also recommend changes 
in the funding of state agencies and/or adjustment or reallocation of 
the discretionary portions of funding formulae.
    (8) The National MSFW Monitor Advocate shall participate in the 
review and assessment activities required in this section and Sec.
658.700 et seq. As part of such participation, the National MSFW Monitor 
Advocate, or if he/she is unable to participate a Regional MSFW Monitor 
Advocate, shall accompany the National Office review team on National 
Office on-site reviews. The National MSFW Monitor Advocate shall engage 
in the following activities in the course of each State on-site review:
    (i) He/she shall accompany selected outreach workers on their field 
visits.
    (ii) He/she shall participate in a random field check[s] of migrant 
camps or work site[s] where MSFWs have been placed on inter or intra 
state clearance orders.
    (iii) He/she shall contact local WIA 167 National Farmworker Jobs 
program organizations or other farmworker organizations as part of the 
on-site review, and, conduct an interview with representatives of the 
organizations.
    (iv) He/she shall meet with the State MSFW Monitor Advocate and 
discuss the full range of the JS services to MSFWs, including the 
monitoring and complaint systems.
    (9) In addition to the duties specified in paragraph (f)(8) of this 
section, the National MSFW Monitor Advocate each year during the harvest 
season shall visit the four states with the highest level of MSFW 
activity during the prior fiscal year, if they are not scheduled for a 
National Office on-site review during the current fiscal year, and 
shall:
    (i) Meet with the State MSFW Monitor Advocate and other central 
office staff to discuss MSFW service delivery, and (ii) contact 
representatives of MSFW organizations and interested employer 
organizations to obtain information concerning JS service delivery and 
coordination with other agencies.
    (10) The National MSFE Monitor Advocate shall perform the duties 
specified in Sec.658.700. As part of this function, he/she shall 
monitor the performance of regional offices in imposing corrective 
action. The National MSFW Monitor Advocate shall report any deficiencies 
in performance to the Administrator.
    (11) The National MSFW Monitor Advocate shall establish routine and 
regular contacts with WIA 167 National Farmworker Jobs program 
organizations, other farmworker organizations and agricultural employers 
and/or employer organizations. He/she shall attend conferences or 
meetings of these groups wherever possible and shall report to the 
Administrator and the National Farm Labor Coordinated Enforcement 
Committee on these contacts when appropriate. The National MSFW Monitor 
Advocate shall include in the Annual Report recommendations as to how 
DOL might better coordinate

[[Page 23]]

JS and WIA 167 National Farmworker Jobs program services as they pertain 
to MSFWs.
    (12) In the event that any State or Regional MSFW Monitor Advocate, 
enforcement agency or MSFW group refers a matter to the National MSFW 
Monitor Advocate which requires emergency action, he/she shall assist 
them in obtaining action by appropriate agencies and staff, inform the 
originating party of the action taken, and, upon request, provide 
written conformation.
    (13) Through all the mechanisms provided in this subpart, the 
National MSFW Monitor Advocate shall aggressively seek to ascertain and 
remedy, if possible, systemic deficiencies in the provisions of JS 
services and protections afforded by these regulations to MSFWs. The 
National MSFW Monitor Advocate shall:
    (i) Use the regular reports on complaints submitted by State 
agencies and ETA regional offices to assess the adequacy of these 
systems and to determine the existence of systemic deficiencies.
    (ii) Provide technical assistance to ETA regional office and State 
agency staffs for administering the JS complaint system.
    (iii) Recommend to the Administrator specific instructions for 
action by regional office staff to correct any JS-related systemic 
deficiencies. Prior to any ETA review of regional office operations 
concerning JS services to MSFWs, the National MSFW Monitor Advocate 
shall provide to the Administrator a brief summary of JS-related 
services to MSFWs in that region and his/her recommendations for 
incorporation in the regional review materials as the Administrator and 
ETA reviewing organization deem appropriate.
    (iv) Recommend to the National Farm Labor Coordinated Enforcement 
Committee specific instructions for action by ESA and OSHA regional 
office staff to correct any non-JS-related systemic deficiencies of 
which he/she is aware.

[45 FR 39468, June 10, 1980, as amended at 71 FR 35523, June 21, 2006]



Sec.658.603  ETA regional office responsibility.

    (a) The Regional Administrator shall have responsibility for the 
regular review and assessment of State agency performance and compliance 
with JS regulations.
    (b) The Regional Administrator shall review and approve annual 
program budget plans for the State agencies within the region. In 
reviewing the program budget plans the Regional Administrator shall 
consider relevant factors including the following:
    (1) State agency compliance with JS regulations;
    (2) State agency performance against the goals and objectives 
established in the previous year's program budget plan;
    (3) The effect which economic conditions and other external factors 
considered by the ETA in the resource allocation process may have had or 
are expected to have on State agency performance;
    (4) State agency adherence to national program emphasis; and
    (5) The adequacy and appropriateness of the program budget plan for 
carrying out JS programs.
    (c) The Regional Administrator shall assess the overall performance 
of State agencies on an ongoing basis through desk reviews and the use 
of required reporting systems and other available information.
    (d) As appropriate, Regional Administrators shall conduct or have 
conducted:
    (1) Comprehensive on-site reviews of State agencies and their 
offices to review State agency organization, management, and program 
operations;
    (2) Periodic performance reviews of State agency operation of JS 
programs to measure actual performance against the program budget plan, 
past performance, the performance of other State agencies, etc.;
    (3) Audits of State agency programs to review State agency program 
activity and to assess whether the expenditure of grant funds has been 
in accordance with the approved budget. Regional Administrators may also 
conduct audits through other agencies or organizations or may require 
the State agency to have audits conducted;

[[Page 24]]

    (4) Validations of data entered into management information systems 
to assess:
    (i) The accuracy of data entered by the State agencies into 
management information system;
    (ii) Whether the State agencies' data validating and reviewing 
procedures conform to ETA instructions; and
    (iii) Whether State agencies have implemented any corrective action 
plans required by the ETA to remedy deficiencies in their validation 
programs;
    (5) Technical assistance programs to assist State agencies in 
carrying out JS regulations and programs;
    (6) Reviews to assess whether the State agency has complied with 
corrective action plans imposed by the ETA or by the State agency 
itself; and
    (7) Random, unannounced field checks of a sample of agricultural 
work sites to which JS placements have been made through the clearance 
system to determine and document whether wages, hours, working and 
housing conditions are as specified on the job order. If regional office 
staff find reason to believe that conditions vary from job order 
specifications, findings should be documented on the JS Complaint 
Referral Form and provided to the State agency to be handled as a 
complaint under Sec.658.411(b).
    (e) The Regional Administrator shall provide technical assistance to 
State agencies to assist them in carrying out JS regulations and 
programs.
    (f) The Regional Administrator shall appoint a Regional MSFW Monitor 
Advocate who shall devote full time to the duties set forth in this 
subpart. The Regional MSFW Monitor Advocate shall:
    (i) Review the effective functioning of the State MSFW Monitor 
Advocates in his/her region;
    (ii) Review the performance of State agencies in providing the full 
range of JS services to MSFWs;
    (iii) Take steps to resolve JS-related problems of MSFWs which come 
to his/her attention;
    (iv) Recommend to the Regional Administrator changes in policy 
towards MSFWs;
    (v) Review the operation of the JS complaint system; and
    (vi) Serve as an advocate to improve service for MSFWs within JS. 
The Regional MSFW Monitor Advocate shall be a member of the Regional 
Farm Labor Coordinated Enforcement Committee.
    (1) The Regional MSFW Monitor Advocate shall be appointed by the 
Regional Administrator after informing farmworker organizations and 
other organizations in the region with expertise concerning MSFWs of the 
opening and encouraging them to refer qualified applicants to apply 
through the federal merit system. The Regional MSFW Monitor Advocate 
shall have direct personal access to the Regional Administrator wherever 
he/she finds it necessary. Among qualified candidates, individuals shall 
be sought who meet the criteria used in the selection of the State MSFW 
Monitor Advocates, as provided in Sec.653.108(b).
    (2) The Regional Administrator shall ensure that staff necessary to 
fulfill effectively all the regional office responsibilities set forth 
in this subsection are assigned. The Regional MSFW Monitor Advocate 
shall notify the Regional Administrator of any staffing deficiencies and 
the Regional Administrator shall take appropriate action.
    (3) The Regional MSFW Monitor Advocate within the first three months 
of their tenure shall participate in a training session(s) approved by 
the National office.
    (4) At the regional level, the Regional MSFW Monitor Advocate shall 
have primary responsibility for (i) monitoring the effectiveness of the 
JS complaint system set forth at subpart E of this part; (ii) apprising 
appropriate State and ETA officials of deficiencies in the complaint 
system; and (iii) providing technical assistance to State MSFW Monitor 
Advocates in the region.
    (5) At the ETA regional level, the Regional MSFW Monitor Advocate 
shall have primary responsibility for ensuring that State agency 
compliance with JS regulations as they pertain to services to MSFWs is 
monitored by the regional office. He/she shall independently assess on a 
continuing basis the provision of JS services to MSFWs, seeking out and 
using:

[[Page 25]]

    (i) Information from State MSWF Monitor Advocates, including all 
reports and other documents; (ii) program performance data; (iii) the 
periodic and other required reports from State JS offices; (iv) federal 
on-site reviews; (v) other reports prepared by the National office; (vi) 
information received from farmworker organizations and employers; and 
(vii) any other pertinent information which comes to his/her attention 
from any possible source. In addition, the Regional MSFW Monitor 
Advocate shall consider his/her personal observations from visits to JS 
offices, agricultural work sites and migrant camps. The Regional MSFW 
Monitor Advocate shall assist the Regional Administrator and other 
appropriate line officials in applying appropriate corrective and 
remedial actions to State agencies.
    (6) The Regional Administrator's quarterly report to the National 
office shall include the Regional MSFW Monitor Advocate's summary of 
his/her independent assessment as required in paragraph (f)(5) of this 
section. The fourth quarter summary shall include an annual summary from 
the region. The summary also shall include both a quantitative and a 
qualitative analysis of his/her reviews and shall address all the 
matters with respect to which he/she has responsibilities under these 
regulations.
    (7) The Regional MSFW Monitor Advocate shall review the activities 
and performance of the State MSFW Monitor Advocates and the State 
monitoring system in the region, and shall recommend any appropriate 
changes in the operation of the system to the Regional Administrator. 
The Regional MSFW Monitor Advocate's review shall include a 
determination whether the State MSFW Monitor Advocate (i) does not have 
adequate access to information, (ii) is being impeded in fulfilling his/
her duties, or (iii) is making recommendations which are being 
consistently ignored by State agency officials. If the Regional MSFW 
Monitor Advocate believes that the effectiveness of any State MSFW 
Monitor Advocate has been substantially impeded by the State 
Administrator, other State office officials, or any Federal officials, 
he/she shall report and recommend appropriate actions to the Regional 
Administrator. Information copies of the recommendations shall be 
provided the National MSFW Monitor Advocate.
    (8) The Regional MSFW Monitor Advocate shall be informed of all 
proposed changes in policy and practice within USES, including JS 
regulations, which may affect the delivery of services to MSFWs. He/she 
shall advise the Regional Administrator on all such proposed changes 
which, in his/her opinion, may adversely affect MSFWs or which may 
substantially improve the delivery of services to MSFWs. The Regional 
MSFW Monitor Advocate may also recommend changes in JS policy or 
regulations, as well as changes in the funding of State agencies and/or 
adjustments of reallocation of the discretionary portions of funding 
formulae as they pertain to MSFWs.
    (9) The Regional MSFW Monitor Advocate shall participate in the 
review and assessment activities required in this section and Sec.
658.700 et seq. He/she, an Assistant, or another Regional MSFW Monitor 
Advocate, shall participate in national office and regional office on-
site statewide reviews of JS services to MSFWs in States in the region. 
The Regional MSFW Monitor Advocate shall engage in the following 
activities in the course of participating in an on-site State agency 
review:
    (i) He/she shall accompany selected outreach workers on their field 
visits;
    (ii) He/she shall participate in a random field check of migrant 
camps or work sites where MSFWs have been placed on inter or intrastate 
clearance orders;
    (iii) He/she shall contact local WIA 167 National Farmworker Jobs 
program organizations or other farmworker organizations as part of the 
on-site review, and shall conduct interviews with representatives of the 
organizations; and
    (iv) He/she shall meet with the State MSFW Monitor Advocate and 
discuss the full range of the JS services to MSFWs, including the 
monitoring and complaint system.
    (10) During the calendar quarter preceding the time of peak MSFW 
activity in each State, the Regional MSFW Monitor Advocate shall meet 
with the State MSFW Monitor Advocate and

[[Page 26]]

shall review in detail the State agency's capability for providing full 
services to MSFWs as required by JS regulations, during the upcoming 
harvest season. The Regional MSFW Monitor Advocate shall offer technical 
assistance and recommend to the State agency and/or the Regional 
Administrator any changes in State policy or practice that he/she finds 
necessary.
    (11) The Regional MSFW Monitor Advocate each year during the peak 
harvest season shall visit each state in the region not scheduled for an 
on-site review during that fiscal year and shall:
    (i) Meet with the State MSFW Monitor Advocate and other central 
office staff to discuss MSFW service delivery, and (ii) contact 
representatives of MSFW organizations to obtain information concerning 
JS service delivery and coordination with other agencies and interested 
employer organizations.
    (12) The Regional MSFW Monitor Advocate shall initiate and maintain 
regular and personal contacts, including informal contacts in addition 
to those specifically required by these regulations, with State MSFW 
Monitor Advocates in the region. In addition, the Regional MSFW Monitor 
Advocate shall have personal and regular contact with the National MSFW 
Monitor Advocate. The Regional MSFW Monitor Advocate shall also 
establish routine and regular contacts with WIA 167 National Farmworker 
Jobs program organizations, other farmworker organizations and 
agricultural employers and/or employer organizations in his/her region. 
He/she shall attend conferences or meetings of these groups wherever 
possible and shall report to the Regional Administrator and the Regional 
Farm Labor Coordinated Enforcement Committee on these contacts when 
appropriate. He/she shall also make recommendations as to how DOL might 
better coordinate JS and WIA 167 National Farmworker Jobs program 
services to MSFWs.
    (13) The Regional MSFW Monitor Advocate shall attend MSFW-related 
public meeting(s) conducted in the region, pursuant to 29 CFR 42.20. 
Following such meetings or hearings, the Regional MSFW Monitor Advocate 
shall take such steps or make such recommendations to the Regional 
Administrator, as he/she deems necessary to remedy problem(s) or 
condition(s) identified or described therein.
    (14) The Regional MSFW Monitor Advocate shall attempt to achieve 
regional solutions to any problems, deficiencies or improper practices 
concerning services to MSFWs which are regional in scope. Further, he/
she shall recommend policies, offer technical assistance or take any 
other necessary steps as he/she deems desirable or appropriate on a 
regional, rather than state-by-state basis, to promote region-wide 
improvement in JS services to MSFWs. He/she shall facilitate region-wide 
coordination and communication regarding provision of JS services to 
MSFWs among State MSFW Monitor Advocates, State Administrators and 
federal ETA officials to the greatest extent possible. In the event that 
any State or other Regional MSFW Monitor Advocate, enforcement agency, 
or MSFW group refers a matter to the Regional MSFW Monitor Advocate 
which requires emergency action, he/she shall assist them in obtaining 
action by appropriate agencies and staff, inform the originating party 
of the action taken, and, upon request, provide written confirmation.
    (15) The Regional MSFW Monitor Advocate shall initiate and maintain 
such contacts as he/she deems necessary with Regional MSFW Monitor 
Advocates in other regions to seek to resolve problems concerning MSFWs 
who work, live or travel through the region. He/she shall recommend to 
the Regional Administrator and/or the National office inter-regional 
cooperation on any particular matter, problem, or policy with respect to 
which inter-regional action is desirable.
    (16) The Regional MSFW Monitor Advocate shall establish regular 
contacts with the ESA and OSHA farmworker specialists in the region and, 
to the extent necessary, shall establish contacts with the staff of 
other DOL agencies represented on the Regional Farm Labor Coordinated 
Enforcement Committee. The Regional MSFW Monitor Advocate shall 
coordinate his/her efforts with specialists in the region to ensure that 
the policy specified in 29 CFR 42.20(c)(3) is followed.

[[Page 27]]

    (17) The Regional MSFW Monitor Advocate shall participate in the 
regional reviews of State agency Program Budget Plans, and shall comment 
to the Regional Administrator as to the adequacy of the affirmative 
action plans, the outreach plans, and other specific plans included 
therein.

[45 FR 39468, June 10, 1980, as amended at 71 FR 35523, June 21, 2006]



Sec.658.604  Assessment and evaluation of program performance data.

    (a) State agencies shall compile program performance data required 
by ETA, including statistical information on program operations.
    (b) The ETA shall use the program performance data in assessing and 
evaluating whether the State agencies have complied with JS regulations 
and their State agency program budget plans.
    (c) In assessing and evaluating program performance data, the ETA 
shall act in accordance with the following general principles:
    (1) The fact that the program performance data from a State agency, 
whether overall or relative to a particular program activity, indicate 
poor program performance does not by itself constitute a violation of JS 
regulations or of the State agency's responsibilities under its State 
agency program budget plan;
    (2) Program performance data, however, may so strongly indicate that 
a State agency's performance is poor that the data may raise a 
presumption (prima facie case) that a State agency is violating JS 
regulations or the State agency program budget plan. A State agency's 
failure to meet the operational objectives set forth in the PBP shall 
raise a presumption that the agency is violating JS regulations and/or 
its PBP. In such cases the ETA shall afford the State agency an 
opportunity to rebut the presumption of a violation pursuant to the 
procedures at subpart H of this part.
    (3) The ETA shall take into account that certain program performance 
data may measure items over which State agencies have direct or 
substantial control while other data may measure items over which the 
State agency has indirect or minimal control.
    (i) Generally, for example, a State agency has direct and 
substantial control over the delivery of job services such as referrals 
to jobs, job development contacts, applicant counseling, referrals to 
supportive services and the conduct of field checks.
    (ii) State agencies, however, have only indirect control over the 
outcome of services. State agencies, for example, cannot guarantee that 
an employer will hire a referred applicant, nor can they guarantee that 
the terms and conditions of employment will be as stated on a job order.
    (iii) Outside forces, moreover, such as a sudden heavy increase in 
unemployment rates, a strike by State agency employees, or a severe 
drought or flood may skew the results measured by program performance 
data;
    (4) The ETA shall consider a State agency's failure to keep accurate 
and complete program performance data required by JS regulations as a 
violation of the JS regulations.



Sec.658.605  Communication of findings to State agencies.

    (a) The Regional Administrator shall inform State agencies in 
writing of the results of review and assessment activities and, as 
appropriate, shall discuss with the State Administrator the impact or 
action required by ETA as a result of review and assessment activities.
    (b) The ETA national office shall transmit the results of any review 
and assessment activities conducted by it to the Regional Administrator 
who shall send the information to the State agency.
    (c) Whenever the review and assessment indicates a State agency 
violation of JS regulations or its State agency program budget plan, the 
Regional Administrator shall follow the procedures set forth at subpart 
H of this part.
    (d) Regional Administrators shall follow-up any corrective action 
plan imposed on a State agency under subpart H of this part by further 
review and assessment of the State agency pursuant to this subpart.

[[Page 28]]



   Subpart H_Federal Application of Remedial Action to State Agencies

    Authority: Wagner-Peyser Act of 1933, as amended, 29 U.S.C. 49 et 
seq.; 5 U.S.C. 301 et seq.



Sec.658.700  Scope and purpose of subpart.

    This subpart sets forth the procedures which ETA shall follow upon 
either discovering independently or receiving from other(s) information 
indicating that State agencies may not be adhering to JS regulations.



Sec.658.701  Statements of policy.

    (a) It is the policy of the Employment and Training Administration 
(ETA) to take all necessary action, including the imposition of the full 
range of sanctions set forth in this subpart, to ensure that State 
agencies comply with all requirements established by JS regulations.
    (b) It is the policy of ETA to initiate decertification procedures 
against State agencies in instances of serious or continual violations 
of JS regulations if less stringent remedial actions taken in accordance 
with this subpart fail to resolve noncompliance.
    (c) It is the policy of the ETA to act on information concerning 
alleged violations by State agencies of the JS regulations received from 
any person or organization.



Sec.658.702  Initial action by the Regional Administrator.

    (a) The ETA Regional Administrator shall be responsible for ensuring 
that all State agencies in his/her region are in compliance with JS 
regulations.
    (b) Wherever a Regional Administrator discovers or is apprised of 
possible State agency violations of JS regulations by the review and 
assessment activities under subpart G of this part, or through required 
reports or written complaints from individuals, organizations or 
employers which are elevated to ETA after the exhaustion of State agency 
administrative remedies, the Regional Administrator shall conduct an 
investigation. Within 10 days after receipt of the report or other 
information, the Regional Administrator shall make a determination 
whether there is probable cause to believe that a State agency has 
violated JS regulations.
    (c) The Regional Administrator shall accept complaints regarding 
possible State agency violations of JS regulations from employee 
organizations, employers or other groups, without exhaustion of the 
complaint process described at subpart E, if the Regional Administrator 
determines that the nature and scope of the complaint are such that the 
time required to exhaust the administrative procedures at the State 
level would adversely affect a significant number of applicants. In such 
cases, the Regional Administrator shall investigate the matter within 10 
working days, may provide the State agency 10 working days for comment, 
and shall make a determination within an additional 10 working days 
whether there is probable cause to believe that the State agency has 
violated JS regulations.
    (d) If the Regional Administrator determines that there is no 
probable cause to believe that a State agency has violated JS 
regulations, he/she shall retain all reports and supporting information 
in ETA files. In all cases where the Regional Administrator has 
insufficient information to make a probable cause determination, he/she 
shall so notify the Administrator in writing and the time for the 
investigation shall be extended 20 additional working days.
    (e) If the Regional Administrator determines that there is probable 
cause to believe that a State agency has violated JS regulations, he/she 
shall issue a Notice of Initial Findings of Non-compliance by registered 
mail to the offending State agency. The Notice will specify the nature 
of the violation, cite the regulations involved, and indicate corrective 
action which may be imposed in accordance with paragraphs (g) and (h) of 
this section. If the non-compliance involves services to MSFWs or the JS 
complaint system, a copy of said notice shall be sent to the National 
MSFW Monitor Advocate.
    (f)(1) The State agency shall have 20 working days to comment on the 
findings, or a longer period, up to 20 additional days, if the Regional 
Administrator determines that such a longer

[[Page 29]]

period is appropriate. The State agency's comments shall include 
agreement or disagreement with the findings and suggested corrective 
actions, where appropriate.
    (2) After the period elapses, the Regional Administrator shall 
prepare within 20 working days, written final findings which specify 
whether or not the State agency has violated JS regulations. If in the 
final findings the Regional Administrator determines that the State 
agency has not violated JS regulations, the Regional Administrator shall 
notify the State Administrator of this finding and retain supporting 
documents in his/her files. If the final finding involves services to 
MSFWs or the JS complaint system, the Regional Administrator shall also 
notify the National Monitor Advocate. If the Regional Administrator 
determines that a State agency has violated JS regulations, the Regional 
Administrator shall prepare a Final Notice of Noncompliance which shall 
specify the violation(s) and cite the regulations involved. The Final 
Notice of Noncompliance shall be sent to the State agency by registered 
mail. If the noncompliance involves services to MSFWs or the JS 
complaint system, a copy of the Final Notice shall be sent to the 
National MSFW Monitor Advocate.
    (g) If the violation involves the misspending of grant funds, the 
Regional Administrator may order in the Final Notice of Noncompliance a 
disallowance of the expenditure and may either demand repayment or 
withhold future funds in the amount in question. If the Regional 
Administrator disallows costs, the Regional Administrator shall give the 
reasons for the disallowance, inform the State agency that the 
disallowance is effective immediately and that no more funds may be 
spent in the unallowed manner, and offer the State agency the 
opportunity to request a hearing pursuant to Sec.658.707. The offer, 
or the acceptance of an offer of a hearing, however, shall not stay the 
effectiveness of the disallowance. The Regional Administrator shall keep 
complete records of the disallowance.
    (h) If the violation does not involve misspending of grant funds or 
the Regional Administrator determines that the circumstances warrant 
other action:
    (1) The Final Notice of Noncompliance shall direct the State agency 
to implement a specific corrective action plan to correct all 
violations. If the State agency's comment demonstrates with supporting 
evidence (except where inappropriate) that all violations have already 
been corrected, the Regional Administrator need not impose a corrective 
action plan and instead may cite the violations and accept their 
resolution, subject to follow-up review, if necessary. If the Regional 
Administrator determines that the violation(s) cited had been found 
previously and that the corrective action(s) taken had not corrected the 
violation(s) contrary to the findings of previous follow-up reviews, the 
Regional Administrator shall apply remedial actions to the State agency 
pursuant to Sec.658.704.
    (2) The Final Notice of Noncompliance shall specify the time by 
which each corrective action must be taken. This period shall not exceed 
40 working days unless the Regional Administrator determines that 
exceptional circumstances necessitate corrective actions requiring a 
longer time period. In such cases, and if the violations involve 
services to MSFWs or the JS complaint system, the Regional Administrator 
shall notify the Administrator in writing of the exceptional 
circumstances which necessitate a longer time period, and shall specify 
that time period. The specified time period shall commence with the date 
of signature on the registered mail receipt.
    (3) When the time period provided for in paragraph (h)(2) of this 
section elapses, ETA staff shall review the State agency's efforts as 
documented by the State agency to determine if the corrective action(s) 
has been taken and if the State agency has achieved compliance with JS 
regulations. If necessary, ETA staff shall conduct a follow-up visit as 
part of this review.
    (4) If, as a result of this review, the Regional Administrator 
determines that the State agency has corrected the violation(s), the 
Regional Administrator shall record the basis for this determination, 
notify the State agency, send a copy to the Administrator, and retain a 
copy in ETA files.

[[Page 30]]

    (5) If, as a result of this review, the Regional Administrator 
determines that the State has taken corrective action but is unable to 
determine if the violation has been corrected due to seasonality or 
other factors, the Regional Administrator shall notify in writing the 
State agency and the Administrator of his/her findings. The Regional 
Administrator shall conduct further follow-up at an appropriate time to 
make a final determination if the violation has been corrected. If the 
Regional Administrator's further follow-up reveals that violations have 
not been corrected, the Regional Administrator shall apply remedial 
actions to the State agency pursuant to Sec.658.704.
    (6) If, as a result of the review the Regional Administrator 
determines that the State agency has not corrected the violations and 
has not made good faith efforts and adequate progress toward the 
correction of the violations, the Regional Administrator shall apply 
remedial actions to the State agency pursuant to Sec.658.704.
    (7) If, as a result of the review, the Regional Administrator 
determines that the State agency has made good faith efforts and 
adequate progress toward the correction of the violation and it appears 
that the violation will be fully corrected within a reasonable time 
period, the State agency shall be advised by registered mail (with a 
copy sent to the Administrator) of this conclusion, of remaining 
differences, of further needed corrective action, and that all 
deficiencies must be corrected within a specified time period. This 
period shall not exceed 40 working days unless the Regional 
Administrator determines that exceptional circumstances necessitate 
corrective action requiring a longer time period. In such cases, the 
Regional Administrator shall notify the Administrator in writing of the 
exceptional circumstances which necessitate a longer time period, and 
shall specify that time period. The specified time period shall commence 
with the date of signature on the registered mail receipt.
    (8)(i) If the State agency has been given an additional time period 
pursuant to paragraph (b)(7) of this section, ETA staff shall review the 
State agency's efforts as documented by the State agency at the end of 
the time period. If necessary, ETA shall conduct a follow-up visit as 
part of this review.
    (ii) If the State agency has corrected the violation(s), the 
Regional Administrator shall document that finding, notify in writing 
the State agency and the Administrator, and retain supporting documents 
in ETA files. If the State agency has not corrected the violation(s), 
the Regional Administrator shall apply remedial actions pursuant to 
Sec.658.704.



Sec.658.703  Emergency corrective action.

    In critical situations as determined by the Regional Administrator, 
where it is necessary to protect the integrity of the funds, or insure 
the proper operation of the program, the Regional Administrator may 
impose immediate corrective action. Where immediate corrective action is 
imposed, the Regional Administrator shall notify the State agency of the 
reason for imposing the corrective action prior to providing the State 
agency an opportunity to comment.



Sec.658.704  Remedial actions.

    (a) If a State agency fails to correct violations as determined 
pursuant to Sec.658.702, the Regional Administrator shall apply one or 
more of the following remedial actions to the State agency:
    (1) Imposition of special reporting requirements for a specified 
period of time;
    (2) Restrictions of obligational authority within one or more 
expense classifications;
    (3) Implementation of specific operating systems or procedures for a 
specified time;
    (4) Requirement of special training for State agency personnel;
    (5) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant Secretary, the elevation of specific decision-making functions 
from the State Administrator to the Regional Administrator;
    (6) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant

[[Page 31]]

Secretary, the imposition of Federal staff in key State agency 
positions;
    (7) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant Secretary, funding of the State agency on a short-term basis 
or partial withholding of funds for a specific function or for a 
specific geographical area;
    (8) Holding of public hearings in the State on the State agency's 
deficiencies;
    (9) Disallowance of funds pursuant to Sec.658.702(g); or
    (10) If the matter involves a serious or continual violation, the 
initiation of decertification procedures against the State agency, as 
set forth in paragraph (e) of this section.
    (b) The Regional Administrator shall send, by registered mail, a 
Notice of Remedial Action to the State agency. The Notice of Remedial 
Action shall set forth the reasons for the remedial action. When such a 
notice is the result of violations of regulations governing services to 
MSFWs (20 CFR 653.100 et seq.) or the JS complaint system (20 CFR 
658.400 et seq.), a copy of said notice shall be sent to the OWI 
Administrator, who shall publish the notice promptly in the Federal 
Register.
    (c) If the remedial action is other than decertification, the notice 
shall state that the remedial action shall take effect immediately. The 
notice shall also state that the State agency may request a hearing 
pursuant to Sec.658.707 by filing a request in writing with the 
Regional Administrator pursuant to Sec.658.707 within 20 working days 
of the State agency's receipt of the notice. The offer of hearing, or 
the acceptance thereof, however, shall not stay the implementation of 
remedial action.
    (d) Within 60 working days after the initial application of remedial 
action, the Regional Administrator shall conduct a review of the State 
agency's compliance with JS regulations unless the Regional 
Administrator determines that a longer time period is necessary. In such 
cases, the Regional Administrator shall notify the OWI Administrator in 
writing of the circumstances which necessitate a longer time period, and 
specify that time period. If necessary, ETA staff shall conduct a 
follow-up visit as part of this review. If the State agency is in 
compliance with the JS regulations, the Regional Administrator shall 
fully document these facts and shall terminate the remedial actions. The 
Regional Administrator shall notify the State agency of his/her 
findings. When the case involves violations of regulations governing 
services to MSFWs or the JS complaint system, a copy of said notice 
shall be sent to the OWI Administrator, who shall promptly publish the 
notice in the Federal Register. The Regional Administrator shall 
conduct, within a reasonable time after terminating the remedial 
actions, a review of the State agency's compliance to determine whether 
any remedial actions should be reapplied.
    (e) If, upon conducting the on-site review referred to in paragraph 
(c) of this section, the Regional Administrator finds that the State 
agency remains in noncompliance, the Regional Administrator shall 
continue the remedial action and/or impose different additional remedial 
actions. The Regional Administrator shall fully document all such 
decisions and, when the case involves violations of regulations 
governing services to MSFWs or the JS complaint system, shall send 
copies to the OWI Administrator, who shall promptly publish the notice 
in the Federal Register.
    (f)(1) If the State agency has not brought itself into compliance 
with JS regulations within 120 working days of the initial application 
of remedial action, the Regional Administrator shall initiate 
decertification unless the Regional Administrator determines that 
circumstances necessitate continuing remedial action for a longer period 
of time. In such cases, the Regional Administrator shall notify the OWI 
Administrator in writing of the circumstances which necessitate the 
longer time period, and specify the time period.
    (2) The Regional Administrator shall notify the State agency by 
registered mail of the decertification proceedings, and shall state the 
reasons therefor. Whenever such a notice is sent to a State agency, the 
Regional Administrator shall prepare five indexed copies

[[Page 32]]

containing, in chronological order, all the documents pertinent to the 
case along with a request for decertification stating the grounds 
therefor. One copy shall be retained. Two shall be sent to the ETA 
national office, one shall be sent to the Solicitor of Labor, Attention: 
Associate Solicitor for Employment and Training, and, if the case 
involves violations of regulations governing services to MSFWs or the 
complaint system, one copy shall be sent to the National MSFW Monitor 
Advocate. The notice sent by the Regional Administrator shall be 
published promptly in the Federal Register.

[45 FR 39468, June 10, 1980, as amended at 71 FR 35523, June 21, 2006]



Sec.658.705  Decision to decertify.

    (a) Within 30 working days of receiving a request for 
decertification, the Assistant Secretary for ETA shall review the case 
and shall decide whether to proceed with decertification.
    (b) The Assistant Secretary shall grant the request for 
decertification unless he/she makes a finding that (1) the violations of 
JS regulations are neither serious nor continual; (2) the State agency 
is in compliance; or (3) the Assistant Secretary has reason to believe 
that the State agency will achieve compliance within 80 working days 
unless exceptional circumstances necessitate a longer time period, 
pursuant to the remedial action already applied or to be applied. (In 
the event the Assistant Secretary does not have sufficient information 
to act upon the request, he/she may postpone the determination for up to 
an additional 20 working days in order to obtain any available 
additional information.) In making a determination of whether violations 
are ``serious'' or ``continual,'' as required by this subsection, the 
Assistant Secretary shall consider:
    (i) Statewide or multiple deficiencies as shown by performance data 
and/or on-site reviews;
    (ii) Recurrent violations, even if they do not persist over 
consecutive reporting periods, and
    (iii) The good faith efforts of the State to achieve full compliance 
with JS regulations as shown by the record.
    (c) If the Assistant Secretary denies a request for decertification, 
he/she shall write a complete report documenting his/her findings and, 
if appropriate, instructing that an alternate remedial action or actions 
be applied. Copies of the report shall be sent to the Regional 
Administrator. Notice of the Assistant Secretary's decision shall be 
published promptly in the Federal Register, and the report of the 
Assistant Secretary shall be made available for public inspection and 
copying.
    (d) If the Assistant Secretary decides that decertification is 
appropriate, he/she shall submit the case to the Secretary providing 
written explanation for his/her recommendation of decertification.
    (e) Within 30 working days after receiving the report of the 
Assistant Secretary, the Secretary shall determine whether to decertify 
the State agency. The Secretary shall grant the request for 
decertification unless he/she makes one of the three findings set forth 
in Sec.658.705(b). If the Secretary decides not to decertify, he/she 
shall then instruct that remedial action be continued or that alternate 
actions be applied. The Secretary shall write a report explaining his/
her reasons for not decertifying the State agency and copies will be 
sent to the State agency. Notice of the Secretary's decision shall be 
published promptly in the Federal Register, and the report of the 
Secretary shall be made available for public inspection and copy.
    (f) Where either the Assistant Secretary or the Secretary denies a 
request for decertification and order further remedial action, the 
Regional Administrator shall continue to monitor the State agency's 
compliance. If the agency achieves compliance within the time period 
established pursuant to Sec.658.705(b), the Regional Administrator 
shall terminate the remedial actions. If the State agency fails to 
achieve full compliance within that time period after the Secretary's 
decision not to decertify, the Regional Administrator shall submit a 
report of his/her findings to the Assistant Secretary who shall 
reconsider the request for decertification pursuant to the requirements 
of Sec.658.705(b).

[[Page 33]]



Sec.658.706  Notice of decertification.

    If the Secretary decides to decertify a State agency, he/she shall 
send a Notice of Decertification to the State agency stating the reasons 
for this action and providing a 10 working day period during which the 
State agency may request an administrative hearing in writing to the 
Secretary. The notice shall be published promptly in the Federal 
Register.



Sec.658.707  Requests for hearings.

    (a) Any State agency which received a Notice of Decertification 
under Sec.658.706 or a notice of disallowance under Sec.658.702 may 
request a hearing on the issue by filing a written request for hearing 
with the Secretary within 10 working days of receipt of the notice. This 
request shall state the reasons the State agency believes the basis of 
the decision to be wrong, and it must be signed by the State 
Administrator.
    (b) When the Secretary receives a request for a hearing from a State 
agency, he/she shall send copies of a file containing all materials and 
correspondence relevant to the case to the Assistant Secretary, the 
Regional Administrator, the Solicitor of Labor, and the Chief 
Administrative Law Judge of the DOL. When the case involves violations 
of regulations governing services to MSFWs or the ES complaint system, a 
copy shall be sent to the National MSFW Monitor Advocate.
    (c) The Secretary shall publish notice of hearing in the Federal 
Register. This notice shall invite all interested parties to attend and 
to present evidence at the hearing. All interested parties who make 
written request to participate shall thereafter receive copies of all 
documents filed in said proceedings.



Sec.658.708  Hearings.

    (a) Upon receipt of a hearing file by the Chief Administrative Law 
Judge, the case shall be docketed and notice sent by registered mail, 
return receipt requested, to the Solicitor of Labor, Attention: 
Associate Solicitor for Employment and Training, the Administrator, the 
Regional Administrator and the State Administrator. The notice shall set 
a time, place, and date for a hearing on the matter and shall advise the 
parties that:
    (1) They may be represented at the hearing;
    (2) They may present oral and documentary evidence at the hearing;
    (3) They may cross-examine opposing witnesses at the hearing; and
    (4) They may request rescheduling of the hearing if the time, place, 
or date set are inconvenient.
    (b) The Solicitor of Labor or the Solicitor's designee shall 
represent the Department at the hearing.



Sec.658.709  Conduct of hearings.

    (a) Hearings shall be conducted in accordance with sections 5-8 of 
the Administrative Procedure Act, 5 U.S.C. 553 et seq.
    (b) Technical rules of evidence shall not apply, but rules or 
principles designed to assure production of the most credible evidence 
available and to subject testimony to test by cross-examination, shall 
be applied if necessary by the Administrative Law Judge conducting the 
hearing. The Administrative Law Judge may exclude irrelevant, immaterial 
or unduly repetitious evidence. All documents and other evidence offered 
or taken for the record shall be open to examination by the parties. 
Opportunity shall be given to refute facts and arguments advanced on 
either side of the issue. A transcript shall be made of the oral 
evidence except to the extent the substance thereof is stipulated for 
the record.
    (c) The general provisions governing discovery as provided in the 
Rules of Civil Procedure for the United States District Court, title V, 
28 U.S.C., rules 26 through 37, may be made applicable to the extent 
that the Administrative Law Judge concludes that their use would promote 
the proper advancement of the hearing.
    (d) When a public officer is a respondent in a hearing in an 
official capacity and during its pendency dies, resigns, or otherwise 
ceases to hold office, the proceeding does not abate and the officer's 
successor is automatically substituted as a party. Proceedings following 
the substitution shall be in the name of the substituted party, but any 
misnomer not affecting the substantive

[[Page 34]]

rights of the parties shall be disregarded. An order of substitution may 
be entered at any time, but the omission to enter such an order shall 
not affect the substitution.



Sec.658.710  Decision of the Administrative Law Judge.

    (a) The Administrative Law Judge shall have jurisdiction to decide 
all issues of fact and related issues of law and to grant or deny 
appropriate motions, but shall not have jurisdiction to decide upon the 
validity of Federal statutes or regulations.
    (b) The decision of the Administrative Law Judge shall be based on 
the hearing record, shall be in writing and shall state the factual and 
legal basis of the decision. Notice of the decision shall be published 
in the Federal Register and the Administrative Law Judge's decision 
shall be available for public inspection and copying.
    (c) Except when the case involves the decertification of a State 
agency, the decision of the Administrative Law Judge shall be the final 
decision of the Secretary.
    (d) If the case involves the decertification of an appeal to the 
State agency, the decision of the Administrative Law Judge shall contain 
a notice stating that, within 30 calendar days of the decision, the 
State agency or the Administrator may appeal to the Administrative 
Review Board, United States Department of Labor, by sending by 
registered mail, return receipt requested, a written appeal to the 
Administrative Review Board, in care of the Administrative Law Judge who 
made the decision.

[45 FR 39468, June 10, 1980, as amended at 61 FR 19983, May 3, 1996]



Sec.658.711  Decision of the Administrative Review Board.

    (a) Upon the receipt of an appeal to the Administrative Review 
Board, United States Department of Labor, the Administrative Law Judge 
shall certify the record in the case to the Administrative Review Board, 
which shall make a decision to decertify or not on the basis of the 
hearing record.
    (b) The decision of the Administrative Review Board shall be final, 
shall be in writing, and shall set forth the factual and legal basis for 
the decision. Notice of the Administrative Review Board's decision shall 
be published in the Federal Register, and copies shall be made available 
for public inspection and copying.

[61 FR 19983, May 3, 1996]



PART 660_INTRODUCTION TO THE REGULATIONS FOR WORKFORCE INVESTMENT SYSTEMS 

UNDER TITLE I OF THE WORKFORCE INVESTMENT ACT--Table of Contents



Sec.
660.100 What is the purpose of title I of the Workforce Investment Act 
          of 1998?
660.200 What do the regulations for workforce investment systems under 
          title I of the Workforce Investment Act cover?
660.300 What definitions apply to the regulations for workforce 
          investment systems under title I of WIA?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49388, Aug. 11, 2000, unless otherwise noted.



Sec.660.100  What is the purpose of title I of the Workforce Investment Act of 

1998?

    The purpose of title I of the Workforce Investment Act of 1998 (WIA) 
is to provide workforce investment activities that increase the 
employment, retention and earnings of participants, and increase 
occupational skill attainment by participants, which will improve the 
quality of the workforce, reduce welfare dependency, and enhance the 
productivity and competitiveness of the Nation's economy. These goals 
are achieved through the workforce investment system. (WIA sec. 106.)



Sec.660.200  What do the regulations for workforce investment systems under 

title I of the Workforce Investment Act cover?

    The regulations found in 20 CFR parts 660 through 671 set forth the 
regulatory requirements that are applicable to programs operated with 
funds provided under title I of WIA. This part 660 describes the purpose 
of that Act, explains the format of these regulations and sets forth 
definitions for terms that apply to each part. Part 661 contains 
regulations relating to Statewide

[[Page 35]]

and local governance of the workforce investment system. Part 662 
describes the One-Stop system and the roles of One-Stop partners. Part 
663 sets forth requirements applicable to WIA title I programs serving 
adults and dislocated workers. Part 664 sets forth requirements 
applicable to WIA title I programs serving youth. Part 665 contains 
regulations relating to Statewide activities. Part 666 describes the WIA 
title I performance accountability system. Part 667 sets forth the 
administrative requirements applicable to programs funded under WIA 
title I. Parts 668 and 669 contain the particular requirements 
applicable to programs serving Indians and Native Americans and Migrant 
and Seasonal Farmworkers, respectively. Parts 670 and 671 describe the 
particular requirements applicable to the Job Corps and other national 
programs, respectively. In addition, part 652 describes the 
establishment and functioning of State Employment Services under the 
Wagner-Peyser Act, and 29 CFR part 37 contains the Department's 
nondiscrimination regulations implementing WIA section 188.



Sec.660.300  What definitions apply to the regulations for workforce 

investment systems under title I of WIA?

    In addition to the definitions set forth at WIA section 101, the 
following definitions apply to the regulations in 20 CFR parts 660 
through 671:
    Department or DOL means the U.S. Department of Labor, including its 
agencies and organizational units.
    Designated region means a combination of local areas that are partly 
or completely in a single labor market area, economic development 
region, or other appropriate contiguous subarea of a State, that is 
designated by the State under WIA section 116(c), or a similar 
interstate region that is designated by two or more States under WIA 
section 116(c)(4).
    Employment and training activity means a workforce investment 
activity that is carried out for an adult or dislocated worker.
    EO data means data on race and ethnicity, age, sex, and disability 
required by 29 CFR part 37 of the DOL regulations implementing section 
188 of WIA, governing nondiscrimination.
    ETA means the Employment and Training Administration of the U.S. 
Department of Labor.
    Grant means an award of WIA financial assistance by the U.S. 
Department of Labor to an eligible WIA recipient.
    Grantee means the direct recipient of grant funds from the 
Department of Labor. A grantee may also be referred to as a recipient.
    Individual with a disability means an individual with any disability 
(as defined in section 3 of the Americans with Disabilities Act of 1990 
(42 U.S.C. 12102)). For purposes of WIA section 188, this term is 
defined at 29 CFR 37.4.
    Labor Federation means an alliance of two or more organized labor 
unions for the purpose of mutual support and action.
    Literacy means an individual's ability to read, write, and speak in 
English, and to compute, and solve problems, at levels of proficiency 
necessary to function on the job, in the family of the individual, and 
in society.
    Local Board means a Local Workforce Investment Board established 
under WIA section 117, to set policy for the local workforce investment 
system.
    Obligations means the amounts of orders placed, contracts and 
subgrants awarded, goods and services received, and similar transactions 
during a funding period that will require payment by the recipient or 
subrecipient during the same or a future period. For purposes of the 
reallotment process described at 20 CFR 667.150, the Secretary also 
treats as State obligations any amounts allocated by the State under WIA 
sections 128(b) and 133(b) to a single area State or to a balance of 
State local area administered by a unit of the State government, and 
inter-agency transfers and other actions treated by the State as 
encumbrances against amounts reserved by the State under WIA sections 
128(a) and 133(a) for Statewide workforce investment activities.
    Outlying area means the United States Virgin Islands, Guam, American 
Samoa, the Commonwealth of the

[[Page 36]]

Northern Mariana Islands, the Republic of the Marshall Islands, the 
Federated States of Micronesia, and the Republic of Palau.
    Participant means an individual who has registered under 20 CFR 
663.105 or 664.215 and has been determined to be eligible to participate 
in and who is receiving services (except for follow up services) under a 
program authorized by WIA title I. Participation commences on the first 
day, following determination of eligibility, on which the individual 
begins receiving core, intensive, training or other services provided 
under WIA title I.
    Recipient means an entity to which a WIA grant is awarded directly 
from the Department of Labor to carry out a program under title I of 
WIA. The State is the recipient of funds awarded under WIA sections 
127(b)(1)(C)(I)(II), 132(b)(1)(B) and 132(b)(2)(B). The recipient is the 
entire legal entity that received the award and is legally responsible 
for carrying out the WIA program, even if only a particular component of 
the entity is designated in the grant award document.
    Register means the process for collecting information to determine 
an individual's eligibility for services under WIA title I. Individuals 
may be registered in a variety ways, as described in 20 CFR 663.105 and 
20 CFR 664.215.
    Secretary means the Secretary of the U.S. Department of Labor.
    Self certification means an individual's signed attestation that the 
information he/she submits to demonstrate eligibility for a program 
under title I of WIA is true and accurate.
    State means each of the several States of the United States, the 
District of Columbia and the Commonwealth of Puerto Rico. The term 
``State'' does not include outlying areas.
    State Board means a State Workforce Investment Board established 
under WIA section 111.
    Subgrant means an award of financial assistance in the form of 
money, or property in lieu of money made under a grant by a grantee to 
an eligible subrecipient. The term includes financial assistance when 
provided by contractual legal agreement, but does not include 
procurement purchases, nor does it include any form of assistance which 
is excluded from the definition of Grant in this part.
    Subrecipient means an entity to which a subgrant is awarded and 
which is accountable to the recipient (or higher tier subrecipient) for 
the use of the funds provided. DOL's audit requirements for States, 
local governments, and non-profit organizations provides guidance on 
distinguishing between a subrecipient and a vendor at 29 CFR 99.210.
    Unobligated balance means the portion of funds authorized by the 
Federal agency that has not been obligated by the grantee and is 
determined by deducting the cumulative obligations from the cumulative 
funds authorized.
    Vendor means an entity responsible for providing generally required 
goods or services to be used in the WIA program. These goods or services 
may be for the recipient's or subrecipient's own use or for the use of 
participants in the program. DOL's audit requirements for States, local 
governments, and non-profit organizations provides guidance on 
distinguishing between a subrecipient and a vendor at 29 CFR 99.210.
    Wagner-Peyser Act means the Act of June 6, 1933, as amended, 
codified at 29 U.S.C. 49 et seq.
    WIA regulations mean the regulations in 20 CFR parts 660 through 
671, the Wagner-Peyser Act regulations in 20 CFR part 652, subpart C, 
and the regulations implementing WIA section 188 in 29 CFR part 37.
    Workforce investment activities mean the array of activities 
permitted under title I of WIA, which include employment and training 
activities for adults and dislocated workers, as described in WIA 
section 134, and youth activities, as described in WIA section 129.
    Youth activity means a workforce investment activity that is carried 
out for youth.

[[Page 37]]



PART 661_STATEWIDE AND LOCAL GOVERNANCE OF THE WORKFORCE INVESTMENT SYSTEM 

UNDER TITLE I OF THE WORKFORCE INVESTMENT ACT--Table of Contents



                 Subpart A_General Governance Provisions

Sec.
661.100 What is the workforce investment system?
661.110 What is the role of the Department of Labor as the Federal 
          governmental partner in the governance of the workforce 
          investment system?
661.120 What are the roles of the local and State governmental partner 
          in the governance of the workforce investment system?

                  Subpart B_State Governance Provisions

661.200 What is the State Workforce Investment Board?
661.203 What is meant by the terms ``optimum policy making authority'' 
          and ``expertise relating to [a] program, service or 
          activity''?
661.205 What is the role of the State Board?
661.207 How does the State Board meet its requirement to conduct 
          business in an open manner under the ``sunshine provision'' of 
          WIA section 111(g)?
661.210 Under what circumstances may the Governor select an alternative 
          entity in place of the State Workforce Investment Board?
661.220 What are the requirements for the submission of the State 
          Workforce Investment Plan?
661.230 What are the requirements for modification of the State 
          Workforce Investment Plan?
661.240 How do the unified planning requirements apply to the five-year 
          strategic WIA and Wagner-Peyser plan and to other Department 
          of Labor plans?
661.250 What are the requirements for designation of local workforce 
          investment areas?
661.260 What are the requirements for automatic designation of workforce 
          investment areas relating to units of local government with a 
          population of 500,000 or more?
661.270 What are the requirements for temporary and subsequent 
          designation of workforce investment areas relating to areas 
          that had been designated as service delivery areas under JTPA?
661.280 What right does an entity have to appeal the Governor's decision 
          rejecting a request for designation as a workforce investment 
          area?
661.290 Under what circumstances may States require Local Boards to take 
          part in regional planning activities?

                  Subpart C_Local Governance Provisions

661.300 What is the Local Workforce Investment Board?
661.305 What is the role of the Local Workforce Investment Board?
661.307 How does the Local Board meet its requirement to conduct 
          business in an open manner under the ``sunshine provision'' of 
          WIA section 117(e)?
661.310 Under what limited conditions may a Local Board directly be a 
          provider of core services, intensive services, or training 
          services, or act as a One-Stop Operator?
661.315 Who are the required members of the Local Workforce Investment 
          Boards?
661.317 Who may be selected to represent a particular One-Stop partner 
          program on the Local Board when there is more than one partner 
          program entity in the local area?
661.320 Who must chair a Local Board?
661.325 What criteria will be used to establish the membership of the 
          Local Board?
661.330 Under what circumstances may the State use an alternative entity 
          as the Local Workforce Investment Board?
661.335 What is a youth council, and what is its relationship to the 
          Local Board?
661.340 What are the responsibilities of the youth council?
661.345 What are the requirements for the submission of the local 
          workforce investment plan?
661.350 What are the contents of the local workforce investment plan?
661.355 When must a local plan be modified?

                 Subpart D_Waivers and Work-Flex Waivers

661.400 What is the purpose of the General Statutory and Regulatory 
          Waiver Authority provided at section 189(i)(4) of the 
          Workforce Investment Act?
661.410 What provisions of WIA and the Wagner-Peyser Act may be waived, 
          and what provisions may not be waived?
661.420 Under what conditions may a Governor request, and the Secretary 
          approve, a general waiver of statutory or regulatory 
          requirements under WIA section189(i)(4)?
661.430 Under what conditions may the Governor submit a Workforce 
          Flexibility Plan?
661.440 What limitations apply to the State's Workforce Flexibility Plan 
          authority under WIA?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

[[Page 38]]


    Source: 65 FR 49390, Aug. 11, 2000, unless otherwise noted.



                 Subpart A_General Governance Provisions



Sec.661.100  What is the workforce investment system?

    Under title I of WIA, the workforce investment system provides the 
framework for delivery of workforce investment activities at the State 
and local levels to individuals who need those services, including job 
seekers, dislocated workers, youth, incumbent workers, new entrants to 
the workforce, veterans, persons with disabilities, and employers. Each 
State's Governor is required, in accordance with the requirements of 
this part, to establish a State Board; to designate local workforce 
investment areas; and to oversee the creation of Local Boards and One-
Stop service delivery systems in the State.



Sec.661.110  What is the role of the Department of Labor as the Federal 
governmental partner in the governance of the workforce investment system?

    (a) Successful governance of the workforce investment system will be 
achieved through cooperation and coordination of Federal, State and 
local governments.
    (b) The Department of Labor sees as one of its primary roles 
providing leadership and guidance to support a system that meets the 
objectives of title I of WIA, and in which State and local partners have 
flexibility to design systems and deliver services in a manner designed 
to best achieve the goals of WIA based on their particular needs. The 
WIA regulations provide the framework in which State and local officials 
can exercise such flexibility within the confines of the statutory 
requirements. Wherever possible, system features such as design options 
and categories of services are broadly defined, and are subject to State 
and local interpretation.
    (c) The Secretary, in consultation with other Federal Agencies, as 
appropriate, may publish guidance on interpretations of statutory and 
regulatory provisions. State and local policies, interpretations, 
guidelines and definitions that are consistent with interpretations 
contained in such guidance will be considered to be consistent with the 
Act for purposes of Sec.661.120.



Sec.661.120  What are the roles of the local and State governmental partner in 

the governance of the workforce investment system?

    (a) Local areas should establish policies, interpretations, 
guidelines and definitions to implement provisions of title I of WIA to 
the extent that such policies, interpretations, guidelines and 
definitions are not inconsistent with the Act and the regulations issued 
under the Act, Federal statutes and regulations governing One-Stop 
partner programs, and with State policies.
    (b) States should establish policies, interpretations, guidelines 
and definitions to implement provisions of title I of WIA to the extent 
that such policies, interpretations, guidelines and definitions are not 
inconsistent with the Act and the regulations issued under the Act, as 
well as Federal statutes and regulations governing One-Stop partner 
programs.



                  Subpart B_State Governance Provisions



Sec.661.200  What is the State Workforce Investment Board?

    (a) The State Board is a board established by the Governor in 
accordance with the requirements of WIA section 111 and this section.
    (b) The membership of the State Board must meet the requirements of 
WIA section 111(b). The State Board must contain two or more members 
representing the categories described in WIA section 111(b)(1)(C)(iii)-
(v), and special consideration must be given to chief executive officers 
of community colleges and community based organizations in the selection 
of members representing the entities identified in WIA section 
111(b)(1)(C)(v).
    (c) The Governor may appoint any other representatives or agency 
officials, such as agency officials responsible for economic 
development, child support and juvenile justice programs in the State.

[[Page 39]]

    (d) Members who represent organizations, agencies or other entities 
must be individuals with optimum policy making authority within the 
entities they represent.
    (e) A majority of members of the State Board must be representatives 
of business. Members who represent business must be individuals who are 
owners, chief executive officers, chief operating officers, or other 
individuals with optimum policy making or hiring authority, including 
members of Local Boards.
    (f) The Governor must appoint the business representatives from 
among individuals who are nominated by State business organizations and 
business trade associations. The Governor must appoint the labor 
representatives from among individuals who are nominated by State labor 
federations.
    (g) The Governor must select a chairperson of the State Board from 
the business representatives on the board.
    (h) The Governor may establish terms of appointment or other 
conditions governing appointment or membership on the State Board.
    (i) For the programs and activities carried out by One-Stop 
partners, as described in WIA section 121(b) and 20 CFR 662.200 and 
662.210, the State Board must include:
    (1) The lead State agency officials with responsibility for such 
program, or
    (2) In any case in which no lead State agency official has 
responsibility for such a program service, a representative in the State 
with expertise relating to such program, service or activity.
    (3) If the director of the designated State unit, as defined in 
section 7(8)(B) of the Rehabilitation Act, does not represent the State 
Vocational Rehabilitation Services program (VR program) on the State 
Board, then the State must describe in its State plan how the member of 
the State Board representing the VR program will effectively represent 
the interests, needs, and priorities of the VR program and how the 
employment needs of individuals with disabilities in the State will be 
addressed.
    (j) An individual may be appointed as a representative of more than 
one entity if the individual meets all the criteria for representation, 
including the criteria described in paragraphs (d) through (f) of this 
section, for each entity. (WIA sec. 111)



Sec.661.203  What is meant by the terms ``optimum policy making authority'' 

and ``expertise relating to [a] program, service or activity''?

    For purposes of selecting representatives to State and local 
workforce investment boards:
    (a) A representative with ``optimum policy making authority'' is an 
individual who can reasonably be expected to speak affirmatively on 
behalf of the entity he or she represents and to commit that entity to a 
chosen course of action.
    (b) A representative with ``expertise relating to [a] program, 
service or activity'' includes a person who is an official with a One-
stop partner program and a person with documented expertise relating to 
the One-stop partner program.



Sec.661.205  What is the role of the State Board?

    The State Board must assist the Governor in the:
    (a) Development of the State Plan;
    (b) Development and continuous improvement of a Statewide system of 
activities that are funded under subtitle B of title I of WIA, or 
carried out through the One-Stop delivery system, including--
    (1) Development of linkages in order to assure coordination and 
nonduplication among the programs and activities carried out by One-Stop 
partners, including, as necessary, addressing any impasse situations in 
the development of the local Memorandum of Understanding; and
    (2) Review of local plans;
    (c) Commenting at least once annually on the measures taken under 
section 113(b)(14) of the Carl D. Perkins Vocational and Technical 
Education Act;
    (d) Designation of local workforce investment areas,
    (e) Development of allocation formulas for the distribution of funds 
for adult employment and training activities and youth activities to 
local areas,

[[Page 40]]

as permitted under WIA sections 128(b)(3)(B) and 133(b)(3)(B);
    (f) Development and continuous improvement of comprehensive State 
performance measures, including State adjusted levels of performance, to 
assess the effectiveness of the workforce investment activities in the 
State, as required under WIA section 136(b);
    (g) Preparation of the annual report to the Secretary described in 
WIA section 136(d);
    (h) Development of the Statewide employment statistics system 
described in section 15(e) of the Wagner-Peyser Act; and
    (i) Development of an application for an incentive grant under WIA 
section 503. (WIA sec. 111(d).)



Sec.661.207  How does the State Board meet its requirement to conduct business 

in an open manner under the ``sunshine provision'' of WIA section 111(g)?

    The State Board must conduct its business in an open manner as 
required by WIA section 111(g), by making available to the public, on a 
regular basis through open meetings, information about the activities of 
the State Board. This includes information about the State Plan prior to 
submission of the plan; information about membership; the development of 
significant policies, interpretations, guidelines and definitions; and, 
on request, minutes of formal meetings of the State Board.



Sec.661.210  Under what circumstances may the Governor select an alternative 

entity in place of the State Workforce Investment Board?

    (a) The State may use any State entity that meets the requirements 
of WIA section 111(e) to perform the functions of the State Board.
    (b) If the State uses an alternative entity, the State workforce 
investment plan must demonstrate that the alternative entity meets all 
three of the requirements of WIA section 111(e). Section 111(e) requires 
that such entity:
    (1) Was in existence on December 31, 1997;
    (2)(i) Was established under section 122 (relating to State Job 
Training Coordinating Councils) or title VII (relating to State Human 
Resource Investment Councils) of the Job Training Partnership Act (29 
U.S.C.1501 et seq.), as in effect on December 31, 1997, or
    (ii) Is substantially similar to the State Board described in WIA 
section 111(a), (b), and (c) and Sec.661.200; and
    (3) Includes, at a minimum, two or more representatives of business 
in the State and two or more representatives of labor organizations in 
the State.
    (c) If the alternative entity does not provide for representative 
membership of each of the categories of required State Board membership 
under WIA section 111(b), the State Plan must explain the manner in 
which the State will ensure an ongoing role for any unrepresented 
membership group in the workforce investment system. The State Board may 
maintain an ongoing role for an unrepresented membership group, 
including entities carrying out One-stop partner programs, by means such 
as regularly scheduled consultations with entities within the 
unrepresented membership groups, by providing an opportunity for input 
into the State Plan or other policy development by unrepresented 
membership groups, or by establishing an advisory committee of 
unrepresented membership groups.
    (d) If the membership structure of the alternative entity is 
significantly changed after December 31, 1997, the entity will no longer 
be eligible to perform the functions of the State Board. In such case, 
the Governor must establish a new State Board which meets all of the 
criteria of WIA section 111(b).
    (e) A significant change in the membership structure includes any 
significant change in the organization of the alternative entity or in 
the categories of entities represented on the alternative entity which 
requires a change to the alternative entity's charter or a similar 
document that defines the formal organization of the alternative entity, 
regardless of whether the required change to the document has or has not 
been made. A significant change in the membership structure is 
considered to have occurred when members are added to represent groups 
not previously represented on the entity. A significant change in the 
membership structure is not considered to have occurred when additional 
members are added to an existing membership category, when non-

[[Page 41]]

voting members are added, or when a member is added to fill a vacancy 
created in an existing membership category.
    (f) In 20 CFR parts 660 through 671, all references to the State 
Board also apply to an alternative entity used by a State.



Sec.661.220  What are the requirements for the submission of the State 

Workforce Investment Plan?

    (a) The Governor of each State must submit a State Workforce 
Investment Plan (State Plan) in order to be eligible to receive funding 
under title I of WIA and the Wagner-Peyser Act. The State Plan must 
outline the State's five year strategy for the workforce investment 
system.
    (b) The State Plan must be submitted in accordance with planning 
guidelines issued by the Secretary of Labor. The planning guidelines set 
forth the information necessary to document the State's vision, goals, 
strategies, policies and measures for the workforce investment system 
(that were arrived at through the collaboration of the Governor, chief 
elected officials, business and other parties), as well as the 
information required to demonstrate compliance with WIA, and the 
information detailed by WIA and the WIA regulations, including 29 CFR 
part 37, and the Wagner-Peyser Act and the Wagner-Peyser regulations at 
20 CFR part 652:
    (c) The State Plan must contain a description of the State's 
performance accountability system, and the State performance measures in 
accordance with the requirements of WIA section 136 and 20 CFR part 666.
    (d) The State must provide an opportunity for public comment on and 
input into the development of the State Plan prior to its submission. 
The opportunity for public comment must include an opportunity for 
comment by representatives of business, representatives of labor 
organizations, and chief elected official(s) and must be consistent with 
the requirement, at WIA section 111(g), that the State Board makes 
information regarding the State Plan and other State Board activities 
available to the public through regular open meetings. The State Plan 
must describe the State's process and timeline for ensuring a meaningful 
opportunity for public comment.
    (e) The Secretary reviews completed plans and must approve all plans 
within ninety days of their submission, unless the Secretary determines 
in writing that:
    (1) The plan is inconsistent with the provisions of title I of WIA 
or the WIA regulations, including 29 CFR part 37. For example, a finding 
of inconsistency would be made if the Secretary and the Governor have 
not reached agreement on the adjusted levels of performance under WIA 
section 136(b)(3)(A), or there is not an effective strategy in place to 
ensure development of a fully operational One-Stop delivery system in 
the State; or
    (2) The portion of the plan describing the detailed Wagner-Peyser 
plan does not satisfy the criteria for approval of such plans as 
provided in section 8(d) of the Wagner-Peyser Act or the Wagner-Peyser 
regulations at 20 CFR part 652.
    (3) A plan which is incomplete, or which does not contain sufficient 
information to determine whether it is consistent with the statutory or 
regulatory requirements of title I of WIA or of section 8(d) of the 
Wagner-Peyser Act, will be considered to be inconsistent with those 
requirements.



Sec.661.230  What are the requirements for modification of the State Workforce 

Investment Plan?

    (a) The State may submit a modification of its workforce investment 
plan at any time during the five-year life of the plan.
    (b) Modifications are required when:
    (1) Changes in Federal or State law or policy substantially change 
the assumptions upon which the plan is based.
    (2) There are changes in the Statewide vision, strategies, policies, 
performance indicators, the methodology used to determine local 
allocation of funds, reorganizations which change the working 
relationship with system employees, changes in organizational 
responsibilities, changes to the membership structure of the State Board 
or alternative entity and similar substantial changes to the State's 
workforce investment system.

[[Page 42]]

    (3) The State has failed to meet performance goals, and must adjust 
service strategies.
    (c) Modifications are required in accordance with the Wagner-Peyser 
provisions at 20 CFR 652.212.
    (d) Modifications to the State Plan are subject to the same public 
review and comment requirements that apply to the development of the 
original State Plan.
    (e) State Plan modifications will be approved by the Secretary based 
on the approval standard applicable to the original State Plan under 
Sec.661.220(e).



Sec.661.240  How do the unified planning requirements apply to the five-year 

strategic WIA and Wagner-Peyser plan and to other Department of Labor plans?

    (a) A State may submit to the Secretary a unified plan for any of 
the programs or activities described in WIA section 501(b)(2). This 
includes the following DOL programs and activities:
    (1) The five-year strategic WIA and Wagner-Peyser plan;
    (2) Trade adjustment assistance activities and NAFTA-TAA;
    (3) Veterans' programs under 38 U.S.C. Chapter 41;
    (4) Programs authorized under State unemployment compensation laws;
    (5) [Reserved]
    (6) Senior Community Service Employment Programs under title V of 
the Older Americans Act.
    (b) For purposes of paragraph (a) of this section:
    (1) A State may submit, as part of the unified plan, any plan, 
application form or any other similar document, that is required as a 
condition for the approval of Federal funding under the applicable 
program. These plans include such things as the WIA plan. They do not 
include jointly executed funding instruments, such as grant agreements, 
or Governor/Secretary Agreements or items such as corrective actions 
plans.
    (2) A state may submit a unified plan meeting the requirements of 
the Interagency guidance entitled State Unified Plan, Planning Guidance 
for State Unified Plans Under Section 501 of the Workforce Investment 
Act of 1998, in lieu of completing the individual State planning 
guidelines of the programs covered by the unified plan.
    (c) A State which submits a unified plan covering an activity or 
program described in subsection 501(b) of WIA that is approved under 
subsection 501(d) of the Act will not be required to submit any other 
plan or application in order to receive Federal funds to carry out the 
activity or program.
    (d) Each portion of a unified plan submitted under paragraph (a) of 
this section is subject to the particular requirements of Federal law 
authorizing the program. All grantees are still subject to such things 
as reporting and record-keeping requirements, corrective action plan 
requirements and other generally applicable requirements.
    (e) A unified plan must contain the information required by WIA 
section 501(c) and will be approved in accordance with the requirements 
of WIA section 501(d).

[65 FR 49390, Aug. 11, 2000, as amended at 71 FR 35525, June 21, 2006]



Sec.661.250  What are the requirements for designation of local workforce 

investment areas?

    (a) The Governor must designate local workforce investment areas in 
order for the State to receive funding under title I of WIA.
    (b) The Governor must take into consideration the factors described 
in WIA section 116(a)(1)(B) in making designations of local areas. Such 
designation must be made in consultation with the State Board, and after 
consultation with chief elected officials. The Governor must also 
consider comments received through the public comment process described 
in the State workforce investment plan under Sec.661.220(d).
    (c) The Governor may approve a request for designation as a 
workforce investment area from any unit of general local government, 
including a combination of such units, if the State Board determines 
that the area meets the requirements of WIA section 116(a)(1)(B) and 
recommends designation.
    (d) The Governor of any State that was a single service delivery 
area State under the Job Training Partnership Act as of July 1, 1998, 
and only those

[[Page 43]]

States, may designate the State as a single local workforce investment 
area State. (WIA sec.116.)



Sec.661.260  What are the requirements for automatic designation of workforce 

investment areas relating to units of local government with a population of 

500,000 or more?

    The requirements for automatic designation relating to units of 
local government with a population of 500,000 or more and to rural 
concentrated employment programs are contained in WIA section 116(a)(2). 
The Governor has authority to determine the source of population data to 
use in making these designations.



Sec.661.270  What are the requirements for temporary and subsequent 

designation of workforce investment areas relating to areas that had been 

designated as service delivery areas under JTPA?

    The requirements for temporary and subsequent designation relating 
to areas that had been designated as service delivery areas under JTPA 
are contained in WIA section 116(a)(3).



Sec.661.280  What right does an entity have to appeal the Governor's decision 

rejecting a request for designation as a workforce investment area?

    (a) A unit of local government (or combination of units) or a rural 
concentrated employment program grant recipient (as described at WIA 
section 116(a)(2)(B), which has requested but has been denied its 
request for designation as a workforce investment area under Sec. Sec.
661.260 through 661.270, may appeal the decision to the State Board, in 
accordance with appeal procedures established in the State Plan.
    (b) If a decision on the appeal is not rendered in a timely manner 
or if the appeal to the State Board does not result in designation, the 
entity may request review by the Secretary of Labor, under the 
procedures set forth at 20 CFR 667.640(a).
    (c) The Secretary may require that the area be designated as a 
workforce investment area, if the Secretary determines that:
    (1) The entity was not accorded procedural rights under the State 
appeals process; or
    (2) The area meets the automatic designation requirements at WIA 
section 116(a)(2) or the temporary and subsequent designation 
requirements at WIA section 116(a)(3), as appropriate.



Sec.661.290  Under what circumstances may States require Local Boards to take 

part in regional planning activities?

    (a) The State may require Local Boards within a designated region 
(as defined at 20 CFR 660.300) to:
    (1) Participate in a regional planning process that results in 
regional performance measures for workforce investment activities under 
title I of WIA. Regions that meet or exceed the regional performance 
measures may receive regional incentive grants;
    (2) Share, where feasible, employment and other types of information 
that will assist in improving the performance of all local areas in the 
designated region on local performance measures; and
    (3) Coordinate the provision of WIA title I services, including 
supportive services such as transportation, across the boundaries of 
local areas within the designated region.
    (b) Two or more States may designate a labor market area, economic 
development region, or other appropriate contiguous subarea of the 
States as an interstate region. In such cases, the States may jointly 
exercise the State's functions described in this section.
    (c) Designation of intrastate regions and interstate regions and 
their corresponding performance measures must be described in the 
respective State Plan(s). For interstate regions, the roles of the 
respective Governors, State Boards and Local Boards must be described in 
the respective State Plans.
    (d) Unless agreed to by all affected chief elected officials and the 
Governor, these regional planning activities may not substitute for or 
replace the requirements applicable to each local area under other 
provisions of the WIA. (WIA sec. 116(a).)

[[Page 44]]



                  Subpart C_Local Governance Provisions



Sec.661.300  What is the Local Workforce Investment Board?

    (a) The Local Workforce Investment Board (Local Board) is appointed 
by the chief elected official in each local area in accordance with 
State criteria established under WIA section 117(b), and is certified by 
the Governor every two years, in accordance with WIA section 117(c)(2).
    (b) In partnership with the chief elected official(s), the Local 
Board sets policy for the portion of the Statewide workforce investment 
system within the local area.
    (c) The Local Board and the chief elected official(s) may enter into 
an agreement that describes the respective roles and responsibilities of 
the parties.
    (d) The Local Board, in partnership with the chief elected official, 
develops the local workforce investment plan and performs the functions 
described in WIA section 117(d). (WIA sec.117 (d).)
    (e) If a local area includes more than one unit of general local 
government in accordance with WIA section 117 (c)(1)(B), the chief 
elected officials of such units may execute an agreement to describe 
their responsibilities for carrying out the roles and responsibilities. 
If, after a reasonable effort, the chief elected officials are unable to 
reach agreement, the Governor may appoint the members of the local board 
from individuals nominated or recommended as specified in WIA section 
117(b).
    (f) If the State Plan indicates that the State will be treated as a 
local area under WIA title I, the Governor may designate the State Board 
to carry out any of the roles of the Local Board.



Sec.661.305  What is the role of the Local Workforce Investment Board?

    (a) WIA section 117(d) specifies that the Local Board is responsible 
for:
    (1) Developing the five-year local workforce investment plan (Local 
Plan) and conducting oversight of the One-Stop system, youth activities 
and employment and training activities under title I of WIA, in 
partnership with the chief elected official;
    (2) Selecting One-Stop operators with the agreement of the chief 
elected official;
    (3) Selecting eligible youth service providers based on the 
recommendations of the youth council, and identifying eligible providers 
of adult and dislocated worker intensive services and training services, 
and maintaining a list of eligible providers with performance and cost 
information, as required in 20 CFR part 663, subpart E;
    (4) Developing a budget for the purpose of carrying out the duties 
of the Local Board, subject to the approval of the chief elected 
official;
    (5) Negotiating and reaching agreement on local performance measures 
with the chief elected official and the Governor;
    (6) Assisting the Governor in developing the Statewide employment 
statistics system under the Wagner-Peyser Act;
    (7) Coordinating workforce investment activities with economic 
development strategies and developing employer linkages; and
    (8) Promoting private sector involvement in the Statewide workforce 
investment system through effective connecting, brokering, and coaching 
activities through intermediaries such as the One-Stop operator in the 
local area or through other organizations, to assist employers in 
meeting hiring needs.
    (b) The Local Board, in cooperation with the chief elected official, 
appoints a youth council as a subgroup of the Local Board and 
coordinates workforce and youth plans and activities with the youth 
council, in accordance with WIA section 117(h) and Sec.661.335.
    (c) Local Boards which are part of a State designated region for 
regional planning must carry out the regional planning responsibilities 
required by the State in accordance with WIA section 116(c) and Sec.
661.290. (WIA sec. 117.)



Sec.661.307  How does the Local Board meet its requirement to conduct business 

in an open manner under the ``sunshine provision'' of WIA section 117(e)?

    The Local Board must conduct its business in an open manner as 
required by WIA section 117(e), by making available to the public, on a 
regular basis

[[Page 45]]

through open meetings, information about the activities of the Local 
Board. This includes information about the Local Plan prior to 
submission of the plan; information about membership; the development of 
significant policies, interpretations, guidelines and definitions; and, 
on request, minutes of formal meetings of the Local Board.



Sec.661.310  Under what limited conditions may a Local Board directly be a 

provider of core services, intensive services, or training services, or act as 

a One-Stop Operator?

    (a) A Local Board may not directly provide core services, or 
intensive services, or be designated or certified as a One-Stop 
operator, unless agreed to by the chief elected official and the 
Governor.
    (b) A Local Board is prohibited from providing training services, 
unless the Governor grants a waiver in accordance with the provisions in 
WIA section 117(f)(1). The waiver shall apply for not more than one 
year. The waiver may be renewed for additional periods, but for not more 
than one additional year at a time.
    (c) The restrictions on the provision of core, intensive, and 
training services by the Local Board, and designation or certification 
as One-Stop operator, also apply to staff of the Local Board. (WIA sec. 
117(f)(1) and (f)(2).)



Sec.661.315  Who are the required members of the Local Workforce Investment 

Boards?

    (a) The membership of Local Board must be selected in accordance 
with criteria established under WIA section 117(b)(1) and must meet the 
requirements of WIA section 117(b)(2). The Local Board must contain two 
or more members representing the categories described in WIA section 
117(b)(2)(A)(ii)-(v), and special consideration must be given to the 
entities identified in WIA section 117(b)(2)(A)(ii), (iv) and (v) in the 
selection of members representing those categories. The Local Board must 
contain at least one member representing each One-Stop partner.
    (b) The membership of Local Boards may include individuals or 
representatives of other appropriate entities, including entities 
representing individuals with multiple barriers to employment and other 
special populations, as determined by the chief elected official.
    (c) Members who represent organizations, agencies or other entities 
must be individuals with optimum policy making authority within the 
entities they represent.
    (d) A majority of the members of the Local Board must be 
representatives of business in the local area. Members representing 
business must be individuals who are owners, chief executive officers, 
chief operating officers, or other individuals with optimum policymaking 
or hiring authority. Business representatives serving on Local Boards 
may also serve on the State Board.
    (e) Chief elected officials must appoint the business 
representatives from among individuals who are nominated by local 
business organizations and business trade associations. Chief elected 
officials must appoint the labor representatives from among individuals 
who are nominated by local labor federations (or, for a local area in 
which no employees are represented by such organizations, other 
representatives of employees). (WIA sec. 117(b).)
    (f) An individual may be appointed as a representative of more than 
one entity if the individual meets all the criteria for representation, 
including the criteria described in paragraphs (c) through (e) of this 
section, for each entity.



Sec.661.317  Who may be selected to represent a particular One-Stop partner 

program on the Local Board when there is more than one partner program entity 

in the local area?

    When there is more than one grant recipient, administrative entity 
or organization responsible for administration of funds of a particular 
One-stop partner program in the local area, the chief elected official 
may appoint one or more members to represent all of those particular 
partner program entities. In making such appointments, the local elected 
official may solicit nominations from the partner program entities.

[[Page 46]]



Sec.661.320  Who must chair a Local Board?

    The Local Board must elect a chairperson from among the business 
representatives on the board. (WIA sec. 117(b)(5).)



Sec.661.325  What criteria will be used to establish the membership of the 

Local Board?

    The Local Board is appointed by the chief elected official(s) in the 
local area in accordance with State criteria established under WIA 
section 117(b), and is certified by the Governor every two years, in 
accordance with WIA section 117(c)(2). The criteria for certification 
must be described in the State Plan. (WIA sec. 117(c).)



Sec.661.330  Under what circumstances may the State use an alternative entity 

as the Local Workforce Investment Board?

    (a) The State may use any local entity that meets the requirements 
of WIA section 117(i) to perform the functions of the Local Board. WIA 
section 117(i) requires that such entity:
    (1) Was established to serve the local area (or the service delivery 
area that most closely corresponds to the local area);
    (2) Was in existence on December 31, 1997;
    (3)(i) Is a Private Industry Council established under section 102 
of the Job Training Partnership Act, as in effect on December 31, 1997; 
or
    (ii) Is substantially similar to the Local Board described in WIA 
section 117 (a), (b), and (c) and (h)(1) and (2); and,
    (4) Includes, at a minimum, two or more representatives of business 
in the local area and two or more representatives of labor organizations 
nominated by local labor federations or employees in the local area.
    (b)(1) If the Governor certifies an alternative entity to perform 
the functions of the Local Board; the State workforce investment plan 
must demonstrate that the alternative entity meets the requirements of 
WIA section 117(i), set forth in paragraph (a) of this section.
    (2) If the alternative entity does not provide for representative 
membership of each of the categories of required Local Board membership 
under WIA section 117(b), including all of the One-stop partner 
programs, the local workforce investment plan must explain the manner in 
which the Local Board will ensure an ongoing role for the unrepresented 
membership group in the local workforce investment system.
    (3) The Local Board may provide an ongoing role for an unrepresented 
membership group, including entities carrying out One-stop partner 
programs, by means such as regularly scheduled consultations with 
entities within the unrepresented membership groups, by providing an 
opportunity for input into the local plan or other policy development by 
unrepresented membership groups, or by establishing an advisory 
committee of unrepresented membership groups. The Local Board must enter 
into good faith negotiations over the terms of the MOU with all entities 
carrying out One-stop partner programs, including programs not 
represented on the alternative entity.
    (c) If the membership structure of an alternative entity is 
significantly changed after December 31, 1997, the entity will no longer 
be eligible to perform the functions of the Local Board. In such case, 
the chief elected official(s) must establish a new Local Board which 
meets all of the criteria of WIA section 117(a), (b), and (c) and (h)(1) 
and (2).
    (d) A significant change in the membership structure includes any 
significant change in the organization of the alternative entity or in 
the categories of entities represented on the alternative entity which 
requires a change to the alternative entity's charter or a similar 
document that defines the formal organization of the alternative entity, 
regardless of whether the required change to the document has or has not 
been made. A significant change in the membership structure is 
considered to have occurred when members are added to represent groups 
not previously represented on the entity. A significant change in the 
membership structure is not considered to have occurred when additional 
members are added to an existing membership category, when non-voting 
members (including a Youth

[[Page 47]]

Council) are added, or when a member is added to fill a vacancy created 
in an existing membership category.
    (e) In 20 CFR parts 660 through 671, all references to the Local 
Board must be deemed to also apply to an alternative entity used by a 
local area. (WIA sec. 117(i).)



Sec.661.335  What is a youth council, and what is its relationship to the 

Local Board?

    (a) A youth council must be established as a subgroup within each 
Local Board.
    (b) The membership of each youth council must include:
    (1) Members of the Local Board, such as educators, which may include 
special education personnel, employers, and representatives of human 
service agencies, who have special interest or expertise in youth 
policy;
    (2) Members who represent service agencies, such as juvenile justice 
and local law enforcement agencies;
    (3) Members who represent local public housing authorities;
    (4) Parents of eligible youth seeking assistance under subtitle B of 
title I of WIA;
    (5) Individuals, including former participants, and members who 
represent organizations, that have experience relating to youth 
activities; and
    (6) Members who represent the Job Corps, if a Job Corps Center is 
located in the local area represented by the council.
    (c) Youth councils may include other individuals, who the chair of 
the Local Board, in cooperation with the chief elected official, 
determines to be appropriate.
    (d) Members of the youth council who are not members of the Local 
Board must be voting members of the youth council and nonvoting members 
of the Local Board.



Sec.661.340  What are the responsibilities of the youth council?

    The youth council is responsible for:
    (a) Coordinating youth activities in a local area;
    (b) Developing portions of the local plan related to eligible youth, 
as determined by the chairperson of the Local Board;
    (c) Recommending eligible youth service providers in accordance with 
WIA section 123, subject to the approval of the Local Board;
    (d) Conducting oversight with respect to eligible providers of youth 
activities in the local area, subject to the approval of the Local 
Board; and
    (e) Carrying out other duties, as authorized by the chairperson of 
the Local Board, such as establishing linkages with educational agencies 
and other youth entities.



Sec.661.345  What are the requirements for the submission of the local 

workforce investment plan?

    (a) WIA section 118 requires that each Local Board, in partnership 
with the appropriate chief elected officials, develops and submits a 
comprehensive five-year plan to the Governor which identifies and 
describes certain policies, procedures and local activities that are 
carried out in the local area, and that is consistent with the State 
Plan.
    (b) The Local Board must provide an opportunity for public comment 
on and input into the development of the local workforce investment plan 
prior to its submission, and the opportunity for public comment on the 
local plan must:
    (1) Make copies of the proposed local plan available to the public 
(through such means as public hearings and local news media);
    (2) Include an opportunity for comment by members of the Local Board 
and members of the public, including representatives of business and 
labor organizations;
    (3) Provide at least a thirty (30) day period for comment, beginning 
on the date on which the proposed plan is made available, prior to its 
submission to the Governor; and
    (4) Be consistent with the requirement, in WIA section 117(e), that 
the Local Board make information about the plan available to the public 
on a regular basis through open meetings.
    (c) The Local Board must submit any comments that express 
disagreement with the plan to the Governor along with the plan.

[[Page 48]]



Sec.661.350  What are the contents of the local workforce investment plan?

    (a) The local workforce investment plan must meet the requirements 
of WIA section 118(b). The plan must include:
    (1) An identification of the workforce investment needs of 
businesses, job-seekers, and workers in the local area;
    (2) An identification of current and projected employment 
opportunities and job skills necessary to obtain such opportunities;
    (3) A description of the One-Stop delivery system to be established 
or designated in the local area, including:
    (i) How the Local Board will ensure continuous improvement of 
eligible providers of services and ensure that such providers meet the 
employment needs of local employers and participants; and
    (ii) A copy of the local Memorandum(s) of Understanding between the 
Local Board and each of the One-Stop partners concerning the operation 
of the local One-Stop delivery system;
    (4) A description of the local levels of performance negotiated with 
the Governor and the chief elected official(s) to be used by the Local 
Board for measuring the performance of the local fiscal agent (where 
appropriate), eligible providers, and the local One-Stop delivery 
system;
    (5) A description and assessment of the type and availability of 
adult and dislocated worker employment and training activities in the 
local area, including a description of the local ITA system and the 
procedures for ensuring that exceptions to the use of ITA's, if any, are 
justified under WIA section 134(d)(4)(G)(ii) and 20 CFR 663.430;
    (6) A description of how the Local Board will coordinate local 
activities with Statewide rapid response activities;
    (7) A description and assessment of the type and availability of 
youth activities in the local area, including an identification of 
successful providers of such activities;
    (8) A description of the process used by the Local Board to provide 
opportunity for public comment, including comment by representatives of 
business and labor organizations, and input into the development of the 
local plan, prior to the submission of the plan;
    (9) An identification of the fiscal agent, or entity responsible for 
the disbursal of grant funds;
    (10) A description of the competitive process to be used to award 
grants and contracts for activities carried out under this subtitle I of 
WIA, including the process to be used to procure training services that 
are made as exceptions to the Individual Training Account process (WIA 
section 134(d)(4)(G)),
    (11) A description of the criteria to be used by the Governor and 
the Local Board, under 20 CFR 663.600, to determine whether funds 
allocated to a local area for adult employment and training activities 
under WIA sections 133(b)(2)(A) or (3) are limited, and the process by 
which any priority will be applied by the One-Stop operator;
    (12) In cases where an alternate entity functions as the Local 
Board, the information required at Sec.661.330(b), and
    (13) Such other information as the Governor may require.
    (b) The Governor must review completed plans and must approve all 
such plans within ninety days of their submission, unless the Governor 
determines in writing that:
    (1) There are deficiencies identified in local workforce investment 
activities carried out under this subtitle that have not been 
sufficiently addressed; or
    (2) The plan does not comply with title I of WIA and the WIA 
regulations, including the required consultations, the public comment 
provisions, and the nondiscrimination requirements of 29 CFR part 37.
    (c) In cases where the State is a single local area:
    (1) The Secretary performs the roles assigned to the Governor as 
they relate to local planning activities.
    (2) The Secretary issues planning guidance for such States.
    (3) The requirements found in WIA and in the WIA regulations for 
consultation with chief elected officials apply to the development of 
State and local plans and to the development and operation of the One-
Stop delivery system.
    (d) During program year 2000, if a local plan does not contain all 
of the

[[Page 49]]

elements described in paragraph (a) of this section, the Governor may 
approve a local plan on a transitional basis. A transitional approval 
under this paragraph is considered to be a written determination that 
the local plan is not approved under paragraph (b) of this section.



Sec.661.355  When must a local plan be modified?

    The Governor must establish procedures governing the modification of 
local plans. Situations in which modifications may be required by the 
Governor include significant changes in local economic conditions, 
changes in the financing available to support WIA title I and partner-
provided WIA services, changes to the Local Board structure, or a need 
to revise strategies to meet performance goals.



                 Subpart D_Waivers and Work-Flex Waivers



Sec.661.400  What is the purpose of the General Statutory and Regulatory 

Waiver Authority provided at section 189(i)(4) of the Workforce Investment 

Act?

    (a) The purpose of the general statutory and regulatory waiver 
authority is to provide flexibility to States and local areas and 
enhance their ability to improve the statewide workforce investment 
system.
    (b) A waiver may be requested to address impediments to the 
implementation of a strategic plan, including the continuous improvement 
strategy, consistent with the key reform principles of WIA. These key 
reform principles include:
    (1) Streamlining services and information to participants through a 
One-Stop delivery system;
    (2) Empowering individuals to obtain needed services and information 
to enhance their employment opportunities;
    (3) Ensuring universal access to core employment-related services;
    (4) Increasing accountability of States, localities and training 
providers for performance outcomes;
    (5) Establishing a stronger role for Local Boards and the private 
sector;
    (6) Providing increased State and local flexibility to implement 
innovative and comprehensive workforce investment systems; and
    (7) Improving youth programs through services which emphasize 
academic and occupational learning.



Sec.661.410  What provisions of WIA and the Wagner-Peyser Act may be waived, 

and what provisions may not be waived?

    (a) The Secretary may waive any of the statutory or regulatory 
requirements of subtitles B and E of title I of WIA, except for 
requirements relating to:
    (1) Wage and labor standards;
    (2) Non-displacement protections;
    (3) Worker rights;
    (4) Participation and protection of workers and participants;
    (5) Grievance procedures and judicial review;
    (6) Nondiscrimination;
    (7) Allocation of funds to local areas;
    (8) Eligibility of providers or participants;
    (9) The establishment and functions of local areas and local boards;
    (10) Procedures for review and approval of State and Local plans; 
and
    (b) The Secretary may waive any of the statutory or regulatory 
requirements of sections 8 through 10 of the Wagner-Peyser Act (29 
U.S.C. 49g-49i) except for requirements relating to:
    (1) The provision of services to unemployment insurance claimants 
and veterans; and
    (2) Universal access to the basic labor exchange services without 
cost to job seekers.
    (c) The Secretary does not intend to waive any of the statutory or 
regulatory provisions essential to the key reform principles embodied in 
the Workforce Investment Act, described in Sec.661.400, except in 
extremely unusual circumstances where the provision can be demonstrated 
as impeding reform. (WIA sec. 189(i).)



Sec.661.420  Under what conditions may a Governor request, and the Secretary 

approve, a general waiver of statutory or regulatory requirements under WIA 

section 189(i)(4)?

    (a) A Governor may request a general waiver in consultation with 
appropriate chief elected officials:

[[Page 50]]

    (1) By submitting a waiver plan which may accompany the State's WIA 
5-year strategic Plan; or
    (2) After a State's WIA Plan is approved, by directly submitting a 
waiver plan.
    (b) A Governor's waiver request may seek waivers for the entire 
State or for one or more local areas.
    (c) A Governor requesting a general waiver must submit to the 
Secretary a plan to improve the Statewide workforce investment system 
that:
    (1) Identifies the statutory or regulatory requirements for which a 
waiver is requested and the goals that the State or local area, as 
appropriate, intends to achieve as a result of the waiver and how those 
goals relate to the Strategic Plan goals;
    (2) Describes the actions that the State or local area, as 
appropriate, has undertaken to remove State or local statutory or 
regulatory barriers;
    (3) Describes the goals of the waiver and the expected programmatic 
outcomes if the request is granted;
    (4) Describes the individuals affected by the waiver; and
    (5) Describes the processes used to:
    (i) Monitor the progress in implementing the waiver;
    (ii) Provide notice to any Local Board affected by the waiver;
    (iii) Provide any Local Board affected by the waiver an opportunity 
to comment on the request; and
    (iv) Ensure meaningful public comment, including comment by business 
and organized labor, on the waiver.
    (d) The Secretary issues a decision on a waiver request within 90 
days after the receipt of the original waiver request.
    (e) The Secretary will approve a waiver request if and only to the 
extent that:
    (1) The Secretary determines that the requirements for which a 
waiver is requested impede the ability of either the State or local area 
to implement the State's plan to improve the Statewide workforce 
investment system;
    (2) The Secretary determines that the waiver plan meets all of the 
requirements of WIA section 189(i)(4) and Sec. Sec.661.400 through 
661.420; and
    (3) The State has executed a Memorandum of Understanding with the 
Secretary requiring the State to meet, or ensure that the local area 
meets, agreed-upon outcomes and to implement other appropriate measures 
to ensure accountability.
    (f) The Secretary will issue guidelines under which the States may 
request general waivers of WIA and Wagner-Peyser requirements. (WIA sec. 
189(i).)



Sec.661.430  Under what conditions may the Governor submit a Workforce 

Flexibility Plan?

    (a) A State may submit to the Secretary, and the Secretary may 
approve, a workforce flexibility (work-flex) plan under which the State 
is authorized to waive, in accordance with the plan:
    (1) Any of the statutory or regulatory requirements under title I of 
WIA applicable to local areas, if the local area requests the waiver in 
a waiver application, except for:
    (i) Requirements relating to the basic purposes of title I of WIA;
    (ii) Wage and labor standards;
    (iii) Grievance procedures and judicial review;
    (iv) Nondiscrimination;
    (v) Eligibility of participants;
    (vi) Allocation of funds to local areas;
    (vii) Establishment and functions of local areas and local boards;
    (viii) Review and approval of local plans;
    (ix) Worker rights, participation, and protection; and
    (x) Any of the statutory provisions essential to the key reform 
principles embodied in the Workforce Investment Act, described in Sec.
661.400.
    (2) Any of the statutory or regulatory requirements applicable to 
the State under section 8 through 10 of the Wagner-Peyser Act (29 U.S.C. 
49g-49i), except for requirements relating to:
    (i) The provision of services to unemployment insurance claimants 
and veterans; and
    (ii) Universal access to basic labor exchange services without cost 
to job seekers; and
    (3) Any of the statutory or regulatory requirements under the Older 
Americans Act of 1965 (OAA) (42 U.S.C. 3001 et seq.), applicable to 
State agencies on aging with respect to activities carried

[[Page 51]]

out using funds allotted under OAA section 506(a)(3) (42 U.S.C. 
3056d(a)(3)), except for requirements relating to:
    (i) The basic purposes of OAA;
    (ii) Wage and labor standards;
    (iii) Eligibility of participants in the activities; and
    (iv) Standards for agreements.
    (b) A State's workforce flexibility plan may accompany the State's 
five-year Strategic Plan or may be submitted separately. If it is 
submitted separately, the workforce flexibility plan must identify 
related provisions in the State's five-year Strategic Plan.
    (c) A workforce flexibility plan submitted under paragraph (a) of 
this section must include descriptions of:
    (1) The process by which local areas in the State may submit and 
obtain State approval of applications for waivers;
    (2) The statutory and regulatory requirements of title I of WIA that 
are likely to be waived by the State under the workforce flexibility 
plan;
    (3) The statutory and regulatory requirements of sections 8 through 
10 of the Wagner-Peyser Act that are proposed for waiver, if any;
    (4) The statutory and regulatory requirements of the Older Americans 
Act of 1965 that are proposed for waiver, if any;
    (5) The outcomes to be achieved by the waivers described in 
paragraphs (c)(1) to (4) of this section including, where appropriate, 
revisions to adjusted levels of performance included in the State or 
local plan under title I of WIA; and
    (6) The measures to be taken to ensure appropriate accountability 
for Federal funds in connection with the waivers.
    (d) The Secretary may approve a workforce flexibility plan for a 
period of up to five years.
    (e) Before submitting a workforce flexibility plan to the Secretary 
for approval, the State must provide adequate notice and a reasonable 
opportunity for comment on the proposed waiver requests under the 
workforce flexibility plan to all interested parties and to the general 
public.
    (f) The Secretary will issue guidelines under which States may 
request designation as a work-flex State.



Sec.661.440  What limitations apply to the State's Workforce Flexibility Plan 

authority under WIA?

    (a)(1) Under work-flex waiver authority a State must not waive the 
WIA, Wagner-Peyser or Older Americans Act requirements which are 
excepted from the work-flex waiver authority and described in Sec.
661.430(a).
    (2) Requests to waive statutory and regulatory requirements of title 
I of WIA applicable at the State level may not be granted under work-
flex waiver authority granted to a State. Such requests may only be 
granted by the Secretary under the general waiver authority described at 
Sec. Sec.661.410 through 661.420.
    (b) As required in Sec.661.430(c)(5), States must address the 
outcomes to result from work-flex waivers as part of its workforce 
flexibility plan. Once approved, a State's work-flex designation is 
conditioned on the State demonstrating it has met the agreed-upon 
outcomes contained in its workforce flexibility plan.



PART 662_DESCRIPTION OF THE ONE-STOP SYSTEM UNDER TITLE I OF THE WORKFORCE 

INVESTMENT ACT--Table of Contents



      Subpart A_General Description of the One-Stop Delivery System

Sec.
662.100 What is the One-Stop delivery system?

    Subpart B_One-Stop Partners and the Responsibilities of Partners

662.200 Who are the required One-Stop partners?
662.210 What other entities may serve as One-Stop partners?
662.220 What entity serves as the One-Stop partner for a particular 
          program in the local area?
662.230 What are the responsibilities of the required One-Stop partners?
662.240 What are a program's applicable core services?
662.250 Where and to what extent must required One-Stop partners make 
          core services available?
662.260 What services, in addition to the applicable core services, are 
          to be provided by One-Stop partners through the One-Stop 
          delivery system?

[[Page 52]]

662.270 How are the costs of providing services through the One-Stop 
          delivery system and the operating costs of the system to be 
          funded?
662.280 Does title I require One-Stop partners to use their funds for 
          individuals who are not eligible for the partner's program or 
          for services that are not authorized under the partner's 
          program?

 Subpart C_Memorandum of Understanding for the One-Stop Delivery System

662.300 What is the Memorandum of Understanding (MOU)?
662.310 Is there a single MOU for the local area or are there to be 
          separate MOU's between the Local Board and each partner?

                      Subpart D_One-Stop Operators

662.400 Who is the One-Stop operator?
662.410 How is the One-Stop operator selected?
662.420 Under what limited conditions may the Local Board be designated 
          or certified as the One-Stop operator?
662.430 Under what conditions may One-Stop operators designated to 
          operate in a One-Stop delivery system established prior to the 
          enactment of WIA be designated to continue to act as a One-
          Stop operator under WIA without meeting the requirements of 
          Sec.662.410(b)?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49398, Aug. 11, 2000, unless otherwise noted.



      Subpart A_General Description of the One-Stop Delivery System



Sec.662.100  What is the One-Stop delivery system?

    (a) In general, the One-Stop delivery system is a system under which 
entities responsible for administering separate workforce investment, 
educational, and other human resource programs and funding streams 
(referred to as One-Stop partners) collaborate to create a seamless 
system of service delivery that will enhance access to the programs' 
services and improve long-term employment outcomes for individuals 
receiving assistance.
    (b) Title I of WIA assigns responsibilities at the local, State and 
Federal level to ensure the creation and maintenance of a One-Stop 
delivery system that enhances the range and quality of workforce 
development services that are accessible to individuals seeking 
assistance.
    (c) The system must include at least one comprehensive physical 
center in each local area that must provide the core services specified 
in WIA section 134(d)(2), and must provide access to other programs and 
activities carried out by the One-Stop partners.
    (d) While each local area must have at least one comprehensive 
center (and may have additional comprehensive centers), WIA section 
134(c) allows for arrangements to supplement the center. These 
arrangements may include:
    (1) A network of affiliated sites that can provide one or more 
partners' programs, services and activities at each site;
    (2) A network of One-Stop partners through which each partner 
provides services that are linked, physically or technologically, to an 
affiliated site that assures individuals are provided information on the 
availability of core services in the local area; and
    (3) Specialized centers that address specific needs, such as those 
of dislocated workers.
    (e) The design of the local area's One-Stop delivery system, 
including the number of comprehensive centers and the supplementary 
arrangements, must be described in the local plan and be consistent with 
the Memorandum of Understanding executed with the One-Stop partners.



    Subpart B_One-Stop Partners and the Responsibilities of Partners



Sec.662.200  Who are the required One-Stop partners?

    (a) WIA section 121(b)(1) identifies the entities that are required 
partners in the local One-Stop systems.
    (b) The required partners are the entities that are responsible for 
administering the following programs and activities in the local area:
    (1) Programs authorized under title I of WIA, serving:
    (i) Adults;
    (ii) Dislocated workers;
    (iii) Youth;
    (iv) Job Corps;
    (v) Native American programs;

[[Page 53]]

    (vi) Migrant and seasonal farmworker programs; and
    (vii) Veterans' workforce programs; (WIA sec. 121(b)(1)(B)(i));
    (2) Programs authorized under the Wagner-Peyser Act (29 U.S.C. 49 et 
seq.); (WIA sec. 121(b)(1)(B)(ii));
    (3) Adult education and literacy activities authorized under title 
II of WIA; (WIA sec. 121(b)(1)(B)(iii));
    (4) Programs authorized under parts A and B of title I of the 
Rehabilitation Act (29 U.S.C. 720 et seq.); (WIA sec. 121(b)(1)(B)(iv));
    (5) [Reserved]
    (6) Senior community service employment activities authorized under 
title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.); 
(WIA sec. 121(b)(1)(B)(vi));
    (7) Postsecondary vocational education activities under the Carl D. 
Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2301 
et seq.); (WIA sec. 121(b)(1)(B)(vii));
    (8) Trade Adjustment Assistance and NAFTA Transitional Adjustment 
Assistance activities authorized under chapter 2 of title II of the 
Trade Act of 1974, as amended (19 U.S.C. 2271 et seq.) and Section 
123(c)(2) of the Trade Adjustment Assistance Reform Act of 2002 (Pub. L. 
107-210), respectively; see (WIA sec. 121(b)(1)(B)(viii));
    (9) Activities authorized under chapter 41 of title 38, U.S.C. 
(local veterans' employment representatives and disabled veterans 
outreach programs); (WIA sec. 121(b)(1)(B)(ix));
    (10) Employment and training activities carried out under the 
Community Services Block Grant (42 U.S.C. 9901 et seq.); (WIA sec. 
121(b)(1)(B)(x));
    (11) Employment and training activities carried out by the 
Department of Housing and Urban Development; (WIA sec. 
121(b)(1)(B)(xi)); and
    (12) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law); (WIA sec. 
121(b)(1)(B)(xii).)

[65 FR 49398, Aug. 11, 2000, as amended at 71 FR 35523, June 21, 2006]



Sec.662.210  What other entities may serve as One-Stop partners?

    (a) WIA provides that other entities that carry out a human resource 
program, including Federal, State, or local programs and programs in the 
private sector may serve as additional partners in the One-Stop system 
if the Local Board and chief elected official(s) approve the entity's 
participation.
    (b) Additional partners may include:
    (1) TANF programs authorized under part A of title IV of the Social 
Security Act (42 U.S.C. 601 et seq.);
    (2) Employment and training programs authorized under section 
6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4));
    (3) Work programs authorized under section 6(o) of the Food Stamp 
Act of 1977 (7 U.S.C. 2015(o));
    (4) Programs authorized under the National and Community Service Act 
of 1990 (42 U.S.C. 12501 et seq.); and
    (5) Other appropriate Federal, State or local programs, including 
programs related to transportation and housing and programs in the 
private sector. (WIA sec. 121(b)(2).)
    (c) The State may require that one or more of the programs 
identified in paragraph (b) of this section be included as a partner in 
all of the local One-Stop delivery systems in the State.



Sec.662.220  What entity serves as the One-Stop partner for a particular 

program in the local area?

    (a) The ``entity'' that carries out the program and activities 
listed in Sec. Sec.662.200 and 662.210 and, therefore, serves as the 
One-Stop partner is the grant recipient, administrative entity or 
organization responsible for administering the funds of the specified 
program in the local area. The term ``entity'' does not include the 
service providers that contract with or are subrecipients of the local 
administrative entity. For programs that do not include local 
administrative entities, the responsible State Agency should be the 
partner. Specific entities for particular programs are identified in 
paragraph (b) of this section. If a program or activity listed in Sec.
662.200 is not carried out in a local area, the requirements relating to 
a required One-Stop partner are not applicable to such program or 
activity in that local One-Stop system.
    (b)(1) For title II of WIA, the entity that carries out the program 
for the

[[Page 54]]

purposes of paragraph (a) is the State eligible entity. The State 
eligible entity may designate an eligible provider, or a consortium of 
eligible providers, as the ``entity'' for this purpose;
    (2) For title I, Part A, of the Rehabilitation Act, the entity that 
carries out the program for the purposes of paragraph (a) of this 
section is the designated State agency or designated unit specified 
under section 101(a)(2) that is primarily concerned with vocational 
rehabilitation, or vocational and other rehabilitation, of individuals 
with disabilities; and
    (3) Under WIA, the national programs, including Job Corps, the WIA 
Indian and Native American program, the Migrant and Seasonal Farmworkers 
program, and the Veterans' Workforce Investment program, are required 
One-Stop partners. Local Boards must include them in the One-Stop 
delivery system where they are present in their local area. In local 
areas where the national programs are not present, States and Local 
Boards should take steps to ensure that customer groups served by these 
programs have access to services through the One-Stop delivery system.



Sec.662.230  What are the responsibilities of the required One-Stop partners?

    All required partners must:
    (a) Make available to participants through the One-Stop delivery 
system the core services that are applicable to the partner's programs; 
(WIA sec. 121(b)(1)(A).)
    (b) Use a portion of funds made available to the partner's program, 
to the extent not inconsistent with the Federal law authorizing the 
partner's program, to:
    (1) Create and maintain the One-Stop delivery system; and
    (2) Provide core services; (WIA sec. 134(d)(1)(B).)
    (c) Enter into a memorandum of understanding (MOU) with the Local 
Board relating to the operation of the One-Stop system that meets the 
requirements of Sec.662.300, including a description of services, how 
the cost of the identified services and operating costs of the system 
will be funded, and methods for referrals (WIA sec. 121(c));
    (d) Participate in the operation of the One-Stop system consistent 
with the terms of the MOU and requirements of authorizing laws; (WIA 
sec. 121(b)(1)(B).) and
    (e) Provide representation on the Local Workforce Investment Board. 
(WIA sec. 117(b)(2)(A)(vi).)



Sec.662.240  What are a program's applicable core services?

    (a) The core services applicable to any One-Stop partner program are 
those services described in paragraph (b) of this section, that are 
authorized and provided under the partner's program.
    (b) The core services identified in section 134(d)(2) of the WIA 
are:
    (1) Determinations of whether the individuals are eligible to 
receive assistance under subtitle B of title I of WIA;
    (2) Outreach, intake (which may include worker profiling), and 
orientation to the information and other services available through the 
One-Stop delivery system;
    (3) Initial assessment of skill levels, aptitudes, abilities, and 
supportive service needs;
    (4) Job search and placement assistance, and where appropriate, 
career counseling;
    (5) Provision of employment statistics information, including the 
provision of accurate information relating to local, regional, and 
national labor market areas, including--
    (i) Job vacancy listings in such labor market areas;
    (ii) Information on job skills necessary to obtain the listed jobs; 
and
    (iii) Information relating to local occupations in demand and the 
earnings and skill requirements for such occupations;
    (6) Provision of program performance information and program cost 
information on:
    (i) Eligible providers of training services described in WIA section 
122;
    (ii) Eligible providers of youth activities described in WIA section 
123;
    (iii) Providers of adult education described in title II;
    (iv) Providers of postsecondary vocational education activities and 
vocational education activities available to

[[Page 55]]

school dropouts under the Carl D. Perkins Vocational and Applied 
Technology Education Act (20 U.S.C. 2301 et seq.); and
    (v) Providers of vocational rehabilitation program activities 
described in title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et 
seq.);
    (7) Provision of information on how the local area is performing on 
the local performance measures and any additional performance 
information with respect to the One-Stop delivery system in the local 
area;
    (8) Provision of accurate information relating to the availability 
of supportive services, including, at a minimum, child care and 
transportation, available in the local area, and referral to such 
services, as appropriate;
    (9) Provision of information regarding filing claims for 
unemployment compensation;
    (10) Assistance in establishing eligibility for programs of 
financial aid assistance for training and education programs that are 
not funded under this Act and are available in the local area; and
    (11) Followup services, including counseling regarding the 
workplace, for participants in workforce investment activities 
authorized under subtitle (B) of title I of WIA who are placed in 
unsubsidized employment, for not less than 12 months after the first day 
of the employment, as appropriate.

[65 FR 49398, Aug. 11, 2000, as amended at 71 FR 35523, June 21, 2006]



Sec.662.250  Where and to what extent must required One-Stop partners make 

core services available?

    (a) At a minimum, the core services that are applicable to the 
program of the partner under Sec.662.220, and that are in addition to 
the basic labor exchange services traditionally provided in the local 
area under the Wagner-Peyser program, must be made available at the 
comprehensive One-Stop center. These services must be made available to 
individuals attributable to the partner's program who seek assistance at 
the center. The adult and dislocated worker program partners are 
required to make all of the core services listed in Sec.662.240 
available at the center in accordance with 20 CFR 663.100(b)(1).
    (b) The applicable core services may be made available by the 
provision of appropriate technology at the comprehensive One-Stop 
center, by co-locating personnel at the center, cross-training of staff, 
or through a cost reimbursement or other agreement between service 
providers at the comprehensive One-Stop center and the partner, as 
described in the MOU.
    (c) The responsibility of the partner for the provision of core 
services must be proportionate to the use of the services at the 
comprehensive One-Stop center by the individuals attributable to the 
partner's program. The specific method of determining each partner's 
proportionate responsibility must be described in the MOU.
    (d) For purposes of this part, individuals attributable to the 
partner's program may include individuals who are referred through the 
comprehensive One-Stop center and enrolled in the partner's program 
after the receipt of core services, who have been enrolled in the 
partner's program prior to receipt of the applicable core services at 
the center, who meet the eligibility criteria for the partner's program 
and who receive an applicable core service, or who meet an alternative 
definition described in the MOU.
    (e) Under the MOU, the provision of applicable core services at the 
center by the One-Stop partner may be supplemented by the provision of 
such services through the networks of affiliated sites and networks of 
One-Stop partners described in WIA section 134(c)(2).



Sec.662.260  What services, in addition to the applicable core services, are 

to be provided by One-Stop partners through the One-Stop delivery system?

    In addition to the provision of core services, One-Stop partners 
must provide access to the other activities and programs carried out 
under the partner's authorizing laws. The access to these services must 
be described in the local MOU. 20 CFR part 663 describes the specific 
requirements relating to the provision of core, intensive, and training 
services through the One-Stop system that apply to the adult and the 
dislocated worker programs authorized

[[Page 56]]

under title I of WIA. Additional requirements apply to the provision of 
all labor exchange services under the Wagner-Peyser Act. (WIA sec. 
134(c)(1)(D).)



Sec.662.270  How are the costs of providing services through the One-Stop 

delivery system and the operating costs of the system to be funded?

    The MOU must describe the particular funding arrangements for 
services and operating costs of the One-Stop delivery system. Each 
partner must contribute a fair share of the operating costs of the One-
Stop delivery system proportionate to the use of the system by 
individuals attributable to the partner's program. There are a number of 
methods, consistent with the equirements of the relevant OMB circulars, 
that may be used for allocating costs among the partners. Some of these 
methodologies include allocations based on direct charges, cost pooling, 
indirect cost rates and activity-based cost allocation plans. Additional 
guidance relating to cost allocation methods may be issued by the 
Department in consultation with the other appropriate Federal agencies.



Sec.662.280  Does title I require One-Stop partners to use their funds for 

individuals who are not eligible for the partner's program or for services 

that are not authorized under the partner's program?

    No, the requirements of the partner's program continue to apply. The 
Act intends to create a seamless service delivery system for individuals 
seeking workforce development services by linking the One-Stop partners 
in the One-Stop delivery system. While the overall effect is to provide 
universal access to core services, the resources of each partner may 
only be used to provide services that are authorized and provided under 
the partner's program to individuals who are eligible under such 
program. (WIA sec. 121(b)(1).)



 Subpart C_Memorandum of Understanding for the One-Stop Delivery System



Sec.662.300  What is the Memorandum of Understanding (MOU)?

    (a) The Memorandum of Understanding (MOU) is an agreement developed 
and executed between the Local Board, with the agreement of the chief 
elected official, and the One-Stop partners relating to the operation of 
the One-Stop delivery system in the local area.
    (b) The MOU must contain the provisions required by WIA section 
121(c)(2). These provisions cover services to be provided through the 
One-Stop delivery system; the funding of the services and operating 
costs of the system; and methods for referring individuals between the 
One-Stop operators and partners. The MOU's provisions also must 
determine the duration and procedures for amending the MOU, and may 
contain any other provisions that are consistent with WIA title I and 
the WIA regulations agreed to by the parties. (WIA sec. 121(c).)



Sec.662.310  Is there a single MOU for the local area or are there to be 

separate MOU's between the Local Board and each partner?

    (a) A single ``umbrella'' MOU may be developed that addresses the 
issues relating to the local One-Stop delivery system for the Local 
Board, chief elected official and all partners, or the Local Board, 
chief elected official and the partners may decide to enter into 
separate agreements between the Local Board (with the agreement of the 
chief elected official) and one or more partners. Under either approach, 
the requirements described in this subpart apply. Since funds are 
generally appropriated annually, financial agreements may be negotiated 
with each partner annually to clarify funding of services and operating 
costs of the system under the MOU.
    (b) WIA emphasizes full and effective partnerships between Local 
Boards, chief elected officials and One-Stop partners. Local Boards and 
partners

[[Page 57]]

must enter into good-faith negotiations. Local Boards, chief elected 
officials and partners may request assistance from a State agency 
responsible for administering the partner program, the Governor, State 
Board, or other appropriate parties. The State agencies, the State 
Board, and the Governor may also consult with the appropriate Federal 
agencies to address impasse situations after exhausting other 
alternatives. The Local Board and partners must document the 
negotiations and efforts that have taken place. Any failure to execute 
an MOU between a Local Board and a required partner must be reported by 
the Local Board and the required partner to the Governor or State Board, 
and the State agency responsible for administering the partner's 
program, and by the Governor or the State Board and the responsible 
State agency to the Secretary of Labor and to the head of any other 
Federal agency with responsibility for oversight of a partner's program. 
(WIA sec. 121(c).)
    (c) If an impasse has not been resolved through the alternatives 
available under this section any partner that fails to execute an MOU 
may not be permitted to serve on the Local Board. In addition, any local 
area in which a Local Board has failed to execute an MOU with all of the 
required partners is not eligible for State incentive grants awarded on 
the basis of local coordination of activities under 20 CFR 
665.200(d)(2). These sanctions are in addition to, not in lieu of, any 
other remedies that may be applicable to the Local Board or to each 
partner for failure to comply with the statutory requirement.



                      Subpart D_One-Stop Operators



Sec.662.400  Who is the One-Stop operator?

    (a) The One-Stop operator is the entity that performs the role 
described in paragraph (c) of this section. The types of entities that 
may be selected to be the One-Stop operator include:
    (1) A postsecondary educational institution;
    (2) An Employment Service agency established under the Wagner-Peyser 
Act on behalf of the local office of the agency;
    (3) A private, nonprofit organization (including a community-based 
organization);
    (4) A private for-profit entity;
    (5) A government agency; and
    (6) Another interested organization or entity.
    (b) One-Stop operators may be a single entity or a consortium of 
entities and may operate one or more One-Stop centers. In addition, 
there may be more than one One-Stop operator in a local area.
    (c) The agreement between the Local Board and the One-Stop operator 
shall specify the operator's role. That role may range between simply 
coordinating service providers within the center, to being the primary 
provider of services within the center, to coordinating activities 
throughout the One-Stop system. (WIA sec. 121(d).)



Sec.662.410  How is the One-Stop operator selected?

    (a) The Local Board, with the agreement of the chief elected 
official, must designate and certify One-Stop operators in each local 
area.
    (b) The One-Stop operator is designated or certified:
    (1) Through a competitive process,
    (2) Under an agreement between the Local Board and a consortium of 
entities that includes at least three or more of the required One-Stop 
partners.identified at Sec.662.200, or
    (3) Under the conditions described in Sec. Sec.662.420 or 662.430. 
(WIA sec.121(d), 121(e) and 117(f)(2))
    (c) The designation or certification of the One-Stop operator must 
be carried out in accordance with the ``sunshine provision'' at 20 CFR 
661.307.



Sec.662.420  Under what limited conditions may the Local Board be designated 

or certified as the One-Stop operator?

    (a) The Local Board may be designated or certified as the One-Stop 
operator only with the agreement of the chief elected official and the 
Governor.
    (b) The designation or certification must be reviewed whenever the 
biennial certification of the Local Board is made under 20 CFR 
663.300(a). (WIA sec. 117(f)(2).)

[[Page 58]]



Sec.662.430  Under what conditions may One-Stop operators designated to 

operate in a One-Stop delivery system established prior to the enactment of 

WIA be designated to continue as a One-Stop operator under WIA without 

meeting the requirements of Sec.662.410(b)?

    Under WIA section 121(e), the Local Board, the chief elected 
official and the Governor may agree to certify an entity that has been 
serving as a One-Stop operator in a One-Stop delivery system established 
prior to the enactment of WIA (August 7, 1998) to continue to serve as a 
One-Stop operator without meeting the requirements for designation under 
Sec.662.410(b) if the local One-Stop delivery system is modified, as 
necessary, to meet the other requirements of this part, including the 
requirements relating to the inclusion of One-Stop partners, the 
execution of the MOU, and the provision of services.(WIA sec. 121(e).)



PART 663_ADULT AND DISLOCATED WORKER ACTIVITIES UNDER TITLE I OF THE WORKFORCE 

INVESTMENT ACT--Table of Contents



 Subpart A_Delivery of Adult and Dislocated Worker Services Through the 
                        One-Stop Delivery System

Sec.
663.100 What is the role of the adult and dislocated worker programs in 
          the One-Stop delivery system?
663.105 When must adults and dislocated workers be registered?
663.110 What are the eligibility criteria for core services for adults 
          in the adult and dislocated worker programs?
663.115 What are the eligibility criteria for core services for 
          dislocated workers in the adult and dislocated worker 
          programs?
663.120 Are displaced homemakers eligible for dislocated worker 
          activities under WIA?
663.145 What services are WIA title I adult and dislocated workers 
          formula funds used to provide?
663.150 What core services must be provided to adults and dislocated 
          workers?
663.155 How are core services delivered?
663.160 Are there particular core services an individual must receive 
          before receiving intensive services under WIA section 
          134(d)(3)?
663.165 How long must an individual be in core services in order to be 
          eligible for intensive services?

                      Subpart B_Intensive Services

663.200 What are intensive services for adults and dislocated workers?
663.210 How are intensive services delivered?
663.220 Who may receive intensive services?
663.230 What criteria must be used to determine whether an employed 
          worker needs intensive services to obtain or retain employment 
          leading to ``self-sufficiency''?
663.240 Are there particular intensive services an individual must 
          receive before receiving training services under WIA section 
          134(d)(4)(A)(i)?
663.245 What is the individual employment plan?
663.250 How long must an individual participant be in intensive services 
          to be eligible for training services?

                       Subpart C_Training Services

663.300 What are training services for adults and dislocated workers?
663.310 Who may receive training services?
663.320 What are the requirements for coordination of WIA training funds 
          and other grant assistance?

                 Subpart D_Individual Training Accounts

663.400 How are training services provided?
663.410 What is an Individual Training Account (ITA)?
663.420 Can the duration and amount of ITA's be limited?
663.430 Under what circumstances may mechanisms other than ITA's be used 
          to provide training services?
663.440 What are the requirements for consumer choice?

                  Subpart E_Eligible Training Providers

663.500 What is the purpose of this subpart?
663.505 What are eligible providers of training services?
663.508 What is a ``program of training services''?
663.510 Who is responsible for managing the eligible provider process?
663.515 What is the process for initial determination of provider 
          eligibility?
663.530 Is there a time limit on the period of initial eligibility for 
          training providers?
663.535 What is the process for determining the subsequent eligibility 
          of a provider?
663.540 What kind of performance and cost information is required for 
          determinations of subsequent eligibility?
663.550 How is eligible provider information developed and maintained?
663.555 How is the State list disseminated?

[[Page 59]]

663.565 May an eligible training provider lose its eligibility?
663.570 What is the consumer reports system?
663.575 In what ways can a Local Board supplement the information 
          available from the State list?
663.585 May individuals choose training providers located outside of the 
          local area?
663.590 May a community-based organization (CBO) be included on an 
          eligible provider list?
663.595 What requirements apply to providers of OJT and customized 
          training?

               Subpart F_Priority and Special Populations

663.600 What priority must be given to low-income adults and public 
          assistance recipients served with adult funds under title I?
663.610 Does the statutory priority for use of adult funds also apply to 
          dislocated worker funds?
663.620 How do the Welfare-to-Work program and the TANF program relate 
          to the One-Stop delivery system?
663.630 How does a displaced homemaker qualify for services under title 
          I?
663.640 May an individual with a disability whose family does not meet 
          income eligibility criteria under the Act be eligible for 
          priority as a low-income adult?

       Subpart G_On-the-Job Training (OJT) and Customized Training

663.700 What are the requirements for on-the-job training (OJT)?
663.705 What are the requirements for OJT contracts for employed 
          workers?
663.710 What conditions govern OJT payments to employers?
663.715 What is customized training?
663.720 What are the requirements for customized training for employed 
          workers?
663.730 May funds provided to employers for OJT of customized training 
          be used to assist, promote, or deter union organizing?

                      Subpart H_Supportive Services

663.800 What are supportive services for adults and dislocated workers?
663.805 When may supportive services be provided to participants?
663.810 Are there limits on the amounts or duration of funds for 
          supportive services?
663.815 What are needs-related payments?
663.820 What are the eligibility requirements for adults to receive 
          needs-related payments?
663.825 What are the eligibility requirements for dislocated workers to 
          receive needs-related payments?
663.830 May needs-related payments be paid while a participant is 
          waiting to start training classes?
663.840 How is the level of needs-related payments determined?

    Authority: Section 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49402, Aug. 11, 2000, unless otherwise noted.



 Subpart A_Delivery of Adult and Dislocated Worker Services Through the 

                        One-Stop Delivery System



Sec.663.100  What is the role of the adult and dislocated worker programs in 

the One-Stop delivery system?

    (a) The One-Stop system is the basic delivery system for adult and 
dislocated worker services. Through this system, adults and dislocated 
workers can access a continuum of services. The services are organized 
into three levels: core, intensive, and training.
    (b) The chief elected official or his/her designee(s), as the local 
grant recipient(s) for the adult and dislocated worker programs, is a 
required One-Stop partner and is subject to the provisions relating to 
such partners described in 20 CFR part 662. Consistent with those 
provisions:
    (1) Core services for adults and dislocated workers must be made 
available in at least one comprehensive One-Stop center in each local 
workforce investment area. Services may also be available elsewhere, 
either at affiliated sites or at specialized centers. For example, 
specialized centers may be established to serve workers being dislocated 
from a particular employer or industry, or to serve residents of public 
housing.
    (2) The One-Stop centers also make intensive services available to 
adults and dislocated workers, as needed, either by the One-Stop 
operator directly or through contracts with service providers that are 
approved by the Local Board.
    (3) Through the One-Stop system, adults and dislocated workers 
needing training are provided Individual Training Accounts (ITA's) and 
access to lists of eligible providers and programs of training. These 
lists contain quality consumer information, including cost and 
performance information for each of the providers' programs, so that 
participants can make informed choices

[[Page 60]]

on where to use their ITA's. (ITA's are more fully discussed in subpart 
D of this part.)



Sec.663.105  When must adults and dislocated workers be registered?

    (a) Registration is the process for collecting information to 
support a determination of eligibility. This information may be 
collected through methods that include electronic data transfer, 
personal interview, or an individual's application.
    (b) Adults and dislocated workers who receive services funded under 
title I other than self-service or informational activities must be 
registered and determined eligible.
    (c) EO data must be collected on every individual who is interested 
in being considered for WIA title I financially assisted aid, benefits, 
services, or training by a recipient, and who has signified that 
interest by submitting personal information in response to a request 
from the recipient.



Sec.663.110  What are the eligibility criteria for core services for adults in 

the adult and dislocated worker programs?

    To be eligible to receive core services as an adult in the adult and 
dislocated worker programs, an individual must be 18 years of age or 
older. To be eligible for the dislocated worker programs, an eligible 
adult must meet the criteria of Sec.663.115. Eligibility criteria for 
intensive and training services are found at Sec. Sec.663.220 and 
663.310.



Sec.663.115  What are the eligibility criteria for core services for 

dislocated workers in the adult and dislocated worker programs?

    (a) To be eligible to receive core services as a dislocated worker 
in the adult and dislocated worker programs, an individual must meet the 
definition of ``dislocated worker'' at WIA section 101(9). Eligibility 
criteria for intensive and training services are found at Sec. Sec.
663.220 and 663.310.
    (b) Governors and Local Boards may establish policies and procedures 
for One-Stop operators to use in determining an individual's eligibility 
as a dislocated worker, consistent with the definition at WIA section 
101(9). These policies and procedures may address such conditions as:
    (1) What constitutes a ``general announcement'' of plant closing 
under WIA section 101(9)(B)(ii) or (iii); and
    (2) What constitutes ``unemployed as a result of general economic 
conditions in the community in which the individual resides or because 
of natural disasters'' for determining the eligibility of self-employed 
individuals, including family members and farm or ranch hands, under WIA 
section 101(9)(C).



Sec.663.120  Are displaced homemakers eligible for dislocated worker 

activities under WIA?

    (a) Yes, there are two significant differences from the eligibility 
requirements under the Job Training Partnership Act.
    (b) Under the dislocated worker program in JTPA, displaced 
homemakers are defined as ``additional dislocated workers'' and are only 
eligible to receive services if the Governor determines that providing 
such services would not adversely affect the delivery of services to the 
other eligible dislocated workers. Under WIA section 101(9), displaced 
homemakers who meet the definition at WIA section 101(10) are eligible 
dislocated workers without any additional determination.
    (c) The definition of displaced homemaker under JTPA included 
individuals who had been dependent upon public assistance under Aid for 
Families with Dependent Children (AFDC) as well as those who had been 
dependent on the income of another family member. The definition in WIA 
section 101(10) includes only those individuals who were dependent on a 
family member's income. Those individuals who have been dependent on 
public assistance may be served in the adult program.



Sec.663.145  What services are WIA title I adult and dislocated workers 

formula funds used to provide?

    (a) WIA title I formula funds allocated to local areas for adults 
and dislocated workers must be used to provide core, intensive and 
training services through the One-Stop delivery system. Local Boards 
determine the most appropriate mix of these services, but

[[Page 61]]

all three types must be available for both adults and dislocated 
workers. There are different eligibility criteria for each of these 
types of services, which are described at Sec. Sec.663.110, 663.115, 
663.220 and 663.310.
    (b) WIA title I funds may also be used to provide the other services 
described in WIA section 134(e):
    (1) Discretionary One-Stop delivery activities, including:
    (i) Customized screening and referral of qualified participants in 
training services to employment; and
    (ii) Customized employment-related services to employers on a fee-
for-service basis that are in addition to labor exchange services 
available to employers under the Wagner-Peyser Act.
    (2) Supportive services, including needs-related payments, as 
described in subpart H of this part.



Sec.663.150  What core services must be provided to adults and dislocated 

workers?

    (a) At a minimum, all of the core services described in WIA section 
134(d)(2) and 20 CFR 662.240 must be provided in each local area through 
the One-Stop delivery system.
    (b) Followup services must be made available, as appropriate, for a 
minimum of 12 months following the first day of employment, to 
registered participants who are placed in unsubsidized employment.



Sec.663.155  How are core services delivered?

    Core services must be provided through the One-Stop delivery system. 
Core services may be provided directly by the One-Stop operator or 
through contracts with service providers that are approved by the Local 
Board. The Local Board may only be a provider of core services when 
approved by the chief elected official and the Governor in accordance 
with the requirements of WIA section 117(f)(2) and 20 CFR 661.310.



Sec.663.160  Are there particular core services an individual must receive 

before receiving intensive services under WIA section 134(d)(3)?

    (a) Yes, at a minimum, an individual must receive at least one core 
service, such as an initial assessment or job search and placement 
assistance, before receiving intensive services. The initial assessment 
provides preliminary information about the individual's skill levels, 
aptitudes, interests, and supportive services needs. The job search and 
placement assistance helps the individual determine whether he or she is 
unable to obtain employment, and thus requires more intensive services 
to obtain employment. The decision on which core services to provide, 
and the timing of their delivery, may be made on a case-by-case basis at 
the local level depending upon the needs of the participant.
    (b) A determination of the need for intensive services under Sec.
663.220, as established by the initial assessment or the individual's 
inability to obtain employment through the core services provided, must 
be contained in the participant's case file.



Sec.663.165  How long must an individual be in core services in order to be 

eligible for intensive services?

    There is no Federally-required minimum time period for participation 
in core services before receiving intensive services. (WIA sec. 
134(d)(3).)



                      Subpart B_Intensive Services



Sec.663.200  What are intensive services for adults and dislocated workers?

    (a) Intensive services are listed in WIA section 134(d)(3)(C). The 
list in the Act is not all-inclusive and other intensive services, such 
as out-of-area job search assistance, literacy activities related to 
basic workforce readiness, relocation assistance, internships, and work 
experience may be provided, based on an assessment or individual 
employment plan.
    (b) For the purposes of paragraph (a) of this section, work 
experience is a planned, structured learning experience that takes place 
in a workplace for a limited period of time. Work experience may be paid 
or unpaid, as appropriate. A work experience workplace may be in the 
private for profit sector, the non-profit sector, or the public sector. 
Labor standards apply in any work experience where an employee/employer 
relationship, as defined by the Fair Labor Standards Act, exists.

[[Page 62]]



Sec.663.210  How are intensive services delivered?

    (a) Intensive services must be provided through the One-Stop 
delivery system, including specialized One-Stop centers. Intensive 
services may be provided directly by the One-Stop operator or through 
contracts with service providers, which may include contracts with 
public, private for-profit, and private non-profit service providers 
(including specialized service providers), that are approved by the 
Local Board. (WIA secs. 117(d)(2)(D) and 134(d)(3)(B).)
    (b) The Local Board may only be a provider of intensive services 
when approved by the chief elected official and the Governor in 
accordance with WIA section 117(f)(2) and 20 CFR 661.310.



Sec.663.220  Who may receive intensive services?

    There are two categories of adults and dislocated workers who may 
receive intensive services:
    (a) Adults and dislocated workers who are unemployed, have received 
at least one core service and are unable to obtain employment through 
core services, and are determined by a One-Stop operator to be in need 
of more intensive services to obtain employment; and
    (b) Adults and dislocated workers who are employed, have received at 
least one core service, and are determined by a One-Stop operator to be 
in need of intensive services to obtain or retain employment that leads 
to self-sufficiency, as described in Sec.663.230.



Sec.663.230  What criteria must be used to determine whether an employed 

worker needs intensive services to obtain or retain employment leading to 

``self-sufficiency''?

    State Boards or Local Boards must set the criteria for determining 
whether employment leads to self-sufficiency. At a minimum, such 
criteria must provide that self-sufficiency means employment that pays 
at least the lower living standard income level, as defined in WIA 
section 101(24). Self-sufficiency for a dislocated worker may be defined 
in relation to a percentage of the layoff wage. The special needs of 
individuals with disabilities or other barriers to employment should be 
taken into account when setting criteria to determine self-sufficiency.



Sec.663.240  Are there particular intensive services an individual must 

receive before receiving training services under WIA section 134(d)(4)(A)(i)?

    (a) Yes, at a minimum, an individual must receive at least one 
intensive service, such as development of an individual employment plan 
with a case manager or individual counseling and career planning, before 
the individual may receive training services.
    (b) The case file must contain a determination of need for training 
services under Sec.663.310, as identified in the individual employment 
plan, comprehensive assessment, or through any other intensive service 
received.



Sec.663.245  What is the individual employment plan?

    The individual employment plan is an ongoing strategy jointly 
developed by the participant and the case manager that identifies the 
participant's employment goals, the appropriate achievement objectives, 
and the appropriate combination of services for the participant to 
achieve the employment goals.



Sec.663.250  How long must an individual participant be in intensive services 

to be eligible for training services?

    There is no Federally-required minimum time period for participation 
in intensive services before receiving training services. The period of 
time an individual spends in intensive services should be sufficient to 
prepare the individual for training or employment. (WIA sec. 
134(d)(4)(A)(i).)



                       Subpart C_Training Services



Sec.663.300  What are training services for adults and dislocated workers?

    Training services are listed in WIA section 134(d)(4)(D). The list 
in the Act is not all-inclusive and additional training services may be 
provided.

[[Page 63]]



Sec.663.310  Who may receive training services?

    Training services may be made available to employed and unemployed 
adults and dislocated workers who:
    (a) Have met the eligibility requirements for intensive services, 
have received at least one intensive service under Sec.663.240, and 
have been determined to be unable to obtain or retain employment through 
such services;
    (b) After an interview, evaluation, or assessment, and case 
management, have been determined by a One-Stop operator or One-Stop 
partner, to be in need of training services and to have the skills and 
qualifications to successfully complete the selected training program;
    (c) Select a program of training services that is directly linked to 
the employment opportunities either in the local area or in another area 
to which the individual is willing to relocate;
    (d) Are unable to obtain grant assistance from other sources to pay 
the costs of such training, including such sources as Welfare-to-Work, 
State-funded training funds, Trade Adjustment Assistance and Federal 
Pell Grants established under title IV of the Higher Education Act of 
1965, or require WIA assistance in addition to other sources of grant 
assistance, including Federal Pell Grants (provisions relating to fund 
coordination are found at Sec.663.320 and WIA section 134(d)(4)(B)); 
and
    (e) For individuals whose services are provided through the adult 
funding stream, are determined eligible in accordance with the State and 
local priority system, if any, in effect for adults under WIA section 
134(d)(4)(E) and Sec.663.600. (WIA sec. 134(d)(4)(A).)



Sec.663.320  What are the requirements for coordination of WIA training funds 

and other grant assistance?

    (a) WIA funding for training is limited to participants who:
    (1) Are unable to obtain grant assistance from other sources to pay 
the costs of their training; or
    (2) Require assistance beyond that available under grant assistance 
from other sources to pay the costs of such training. Program operators 
and training providers must coordinate funds available to pay for 
training as described in paragraphs (b) and (c) of this section.
    (b) Program operators must coordinate training funds available and 
make funding arrangements with One-Stop partners and other entities to 
apply the provisions of paragraph (a) of this section. Training 
providers must consider the availability of other sources of grants to 
pay for training costs such as Welfare-to-Work, State-funded training 
funds, and Federal Pell Grants, so that WIA funds supplement other 
sources of training grants.
    (c) A WIA participant may enroll in WIA-funded training while his/
her application for a Pell Grant is pending as long as the One-Stop 
operator has made arrangements with the training provider and the WIA 
participant regarding allocation of the Pell Grant, if it is 
subsequently awarded. In that case, the training provider must reimburse 
the One-Stop operator the WIA funds used to underwrite the training for 
the amount the Pell Grant covers. Reimbursement is not required from the 
portion of Pell Grant assistance disbursed to the WIA participant for 
education-related expenses. (WIA sec. 134(d)(4)(B).)



                 Subpart D_Individual Training Accounts



Sec.663.400  How are training services provided?

    Except under the three conditions described in WIA section 
134(d)(4)(G)(ii) and Sec.663.430(a), the Individual Training Account 
(ITA) is established for eligible individuals to finance training 
services. Local Boards may only provide training services under Sec.
663.430 if they receive a waiver from the Governor and meet the 
requirements of 20 CFR 661.310 and WIA section 117(f)(1). (WIA sec. 
134(d)(4)(G).)



Sec.663.410  What is an Individual Training Account (ITA)?

    The ITA is established on behalf of a participant. WIA title I adult 
and dislocated workers purchase training services from eligible 
providers they select in consultation with the case manager. Payments 
from ITA's may be made in a variety of ways, including

[[Page 64]]

the electronic transfer of funds through financial institutions, 
vouchers, or other appropriate methods. Payments may also be made 
incrementally; through payment of a portion of the costs at different 
points in the training course. (WIA sec. 134(d)(4)(G).)



Sec.663.420  Can the duration and amount of ITA's be limited?

    (a) Yes, the State or Local Board may impose limits on ITA's, such 
as limitations on the dollar amount and/or duration.
    (b) Limits to ITA's may be established in different ways:
    (1) There may be a limit for an individual participant that is based 
on the needs identified in the individual employment plan; or
    (2) There may be a policy decision by the State Board or Local Board 
to establish a range of amounts and/or a maximum amount applicable to 
all ITA's.
    (c) Limitations established by State or Local Board policies must be 
described in the State or Local Plan, respectively, but should not be 
implemented in a manner that undermines the Act's requirement that 
training services are provided in a manner that maximizes customer 
choice in the selection of an eligible training provider. ITA 
limitations may provide for exceptions to the limitations in individual 
cases.
    (d) An individual may select training that costs more than the 
maximum amount available for ITAs under a State or local policy when 
other sources of funds are available to supplement the ITA. These other 
sources may include: Pell Grants; scholarships; severance pay; and other 
sources.



Sec.663.430  Under what circumstances may mechanisms other than ITA's be used 

to provide training services?

    (a) Contracts for services may be used instead of ITA's only when 
one of the following three exceptions applies:
    (1) When the services provided are on-the-job training (OJT) or 
customized training;
    (2) When the Local Board determines that there are an insufficient 
number of eligible providers in the local area to accomplish the purpose 
of a system of ITA's. The Local Plan must describe the process to be 
used in selecting the providers under a contract for services. This 
process must include a public comment period for interested providers of 
at least 30 days;
    (3) When the Local Board determines that there is a training 
services program of demonstrated effectiveness offered in the area by a 
community-based organization (CBO) or another private organization to 
serve special participant populations that face multiple barriers to 
employment, as described in paragraph (b) in this section. The Local 
Board must develop criteria to be used in determining demonstrated 
effectiveness, particularly as it applies to the special participant 
population to be served. The criteria may include:
    (i) Financial stability of the organization;
    (ii) Demonstrated performance in the delivery of services to hard to 
serve participant populations through such means as program completion 
rate; attainment of the skills, certificates or degrees the program is 
designed to provide; placement after training in unsubsidized 
employment; and retention in employment; and
    (iii) How the specific program relates to the workforce investment 
needs identified in the local plan.
    (b) Under paragraph (a)(3) of this section, special participant 
populations that face multiple barriers to employment are populations of 
low-income individuals that are included in one or more of the following 
categories:
    (1) Individuals with substantial language or cultural barriers;
    (2) Offenders;
    (3) Homeless individuals; and
    (4) Other hard-to-serve populations as defined by the Governor.



Sec.663.440  What are the requirements for consumer choice?

    (a) Training services, whether under ITA's or under contract, must 
be provided in a manner that maximizes informed consumer choice in 
selecting an eligible provider.
    (b) Each Local Board, through the One-Stop center, must make 
available to customers the State list of eligible providers required in 
WIA section

[[Page 65]]

122(e). The list includes a description of the programs through which 
the providers may offer the training services, the information 
identifying eligible providers of on-the-job training and customized 
training required under WIA section 122(h) (where applicable), and the 
performance and cost information about eligible providers of training 
services described in WIA sections 122 (e) and (h).
    (c) An individual who has been determined eligible for training 
services under Sec.663.310 may select a provider described in 
paragraph (b) of this section after consultation with a case manager. 
Unless the program has exhausted training funds for the program year, 
the operator must refer the individual to the selected provider, and 
establish an ITA for the individual to pay for training. For purposes of 
this paragraph, a referral may be carried out by providing a voucher or 
certificate to the individual to obtain the training.
    (d) The cost of referral of an individual with an ITA to a training 
provider is paid by the applicable adult or dislocated worker program 
under title I of WIA.



                  Subpart E_Eligible Training Providers



Sec.663.500  What is the purpose of this subpart?

    The workforce investment system established under WIA emphasizes 
informed customer choice, system performance, and continuous 
improvement. The eligible provider process is part of the strategy for 
achieving these goals. Local Boards, in partnership with the State, 
identify training providers and programs whose performance qualifies 
them to receive WIA funds to train adults and dislocated workers. In 
order to maximize customer choice and assure that all significant 
population groups are served, States and local areas should administer 
the eligible provider process in a manner to assure that significant 
numbers of competent providers, offering a wide variety of training 
programs and occupational choices, are available to customers. After 
receiving core and intensive services and in consultation with case 
managers, eligible participants who need training use the list of these 
eligible providers to make an informed choice. The ability of providers 
to successfully perform, the procedures State and Local Boards use to 
establish eligibility, and the degree to which information, including 
performance information, on those providers is made available to 
customers eligible for training services, are key factors affecting the 
successful implementation of the Statewide workforce investment system. 
This subpart describes the process for determining eligible training 
providers.



Sec.663.505  What are eligible providers of training services?

    (a) Eligible providers of training services are described in WIA 
section 122. They are those entities eligible to receive WIA title I-B 
funds to provide training services to eligible adult and dislocated 
worker customers.
    (b) In order to provide training services under WIA title I-B, a 
provider must meet the requirements of this subpart and WIA section 122.
    (1) These requirements apply to the use of WIA title I adult and 
dislocated worker funds to provide training:
    (i) To individuals using ITA's to access training through the 
eligible provider list; and
    (ii) To individuals for training provided through the exceptions to 
ITA's described at Sec.663.430 (a)(2) and (a)(3).
    (2) These requirements apply to all organizations providing training 
to adult and dislocated workers, including:
    (i) Postsecondary educational institutions providing a program 
described in WIA section 122(a)(2)(A)(ii);
    (ii) Entities that carry out programs under the National 
Apprenticeship Act (29 U.S.C. 50 et seq.);
    (iii) Other public or private providers of a program of training 
services described in WIA section 122(a)(2)(C);
    (iv) Local Boards, if they meet the conditions of WIA section 
117(f)(1); and
    (v) Community-based organizations and other private organizations 
providing training under Sec.663.430.
    (c) Provider eligibility procedures must be established by the 
Governor, as required by this subpart. Different

[[Page 66]]

procedures are described in WIA for determinations of ``initial'' and 
``subsequent'' eligibility. Because the processes are different, they 
are discussed separately.



Sec.663.508  What is a ``program of training services''?

    A program of training services is one or more courses or classes, or 
a structured regimen, that upon successful completion, leads to:
    (a) A certificate, an associate degree, baccalaureate degree, or
    (b) The skills or competencies needed for a specific job or jobs, an 
occupation, occupational group, or generally, for many types of jobs or 
occupations, as recognized by employers and determined prior to 
training.



Sec.663.510  Who is responsible for managing the eligible provider process?

    (a) The State and the Local Boards each have responsibilities for 
managing the eligible provider process.
    (b) The Governor must establish eligibility criteria for certain 
providers to become initially eligible and must set minimum levels of 
performance for all providers to remain subsequently eligible.
    (c) The Governor must designate a State agency (called the 
``designated State agency'') to assist in carrying out WIA section 122. 
The designated State agency is responsible for:
    (1) Developing and maintaining the State list of eligible providers 
and programs, which is comprised of lists submitted by Local Boards;
    (2) Determining if programs meet performance levels, including 
verifying the accuracy of the information on the State list in 
consultation with the Local Boards, removing programs that do not meet 
program performance levels, and taking appropriate enforcement actions, 
against providers in the case of the intentional provision of inaccurate 
information, as described in WIA section 122(f)(1), and in the case of a 
substantial violation of the requirements of WIA, as described in WIA 
section 122(f)(2);
    (3) Disseminating the State list, accompanied by performance and 
cost information relating to each provider, to One-Stop operators 
throughout the State.
    (d) The Local Board must:
    (1) Accept applications for initial eligibility from certain 
postsecondary institutions and entities providing apprenticeship 
training;
    (2) Carry out procedures prescribed by the Governor to assist in 
determining the initial eligibility of other providers;
    (3) Carry out procedures prescribed by the Governor to assist in 
determining the subsequent eligibility of all providers;
    (4) Compile a local list of eligible providers, collect the 
performance and cost information and any other required information 
relating to providers;
    (5) Submit the local list and information to the designated State 
agency;
    (6) Ensure the dissemination and appropriate use of the State list 
through the local One-Stop system;
    (7) Consult with the designated State agency in cases where 
termination of an eligible provider is contemplated because inaccurate 
information has been provided; and
    (8) Work with the designated State agency in cases where the 
termination of an eligible provider is contemplated because of 
violations of the Act.
    (e) The Local Board may:
    (1) Make recommendations to the Governor on the procedures to be 
used in determining initial eligibility of certain providers;
    (2) Increase the levels of performance required by the State for 
local providers to maintain subsequent eligibility;
    (3) Require additional verifiable program-specific information from 
local providers to maintain subsequent eligibility.



Sec.663.515  What is the process for initial determination of provider 

eligibility?

    (a) To be eligible to receive adult or dislocated worker training 
funds under title I of WIA, all providers must submit applications to 
the Local Boards in the areas in which they wish to provide services. 
The application must describe each program of training services to be 
offered.

[[Page 67]]

    (b) For programs eligible under title IV of the Higher Education Act 
and apprenticeship programs registered under the National Apprenticeship 
Act (NAA), and the providers or such programs, Local Boards determine 
the procedures to use in making an application. The procedures 
established by the Local Board must specify the timing, manner, and 
contents of the required application.
    (c) For programs not eligible under title IV of the HEA or 
registered under the NAA, and for providers not eligible under title IV 
of the HEA or carrying out apprenticeship programs under NAA:
    (1) The Governor must develop a procedure for use by Local Boards 
for determining the eligibility of other providers, after
    (i) Soliciting and taking into consideration recommendations from 
Local Boards and providers of training services within the State;
    (ii) Providing an opportunity for interested members of the public, 
including representatives of business and labor organizations, to submit 
comments on the procedure; and
    (iii) Designating a specific time period for soliciting and 
considering the recommendations of Local Boards and provider, and for 
providing an opportunity for public comment.
    (2) The procedure must be described in the State Plan.
    (3)(i) The procedure must require that the provider must submit an 
application to the Local Board at such time and in such manner as may be 
required, which contains a description of the program of training 
services;
    (ii) If the provider provides a program of training services on the 
date of application, the procedure must require that the application 
include an appropriate portion of the performance information and 
program cost information described in Sec.663.540, and that the 
program meet appropriate levels of performance;
    (iii) If the provider does not provide a program of training 
services on that date, the procedure must require that the provider meet 
appropriate requirements specified in the procedure. (WIA sec. 
122(b)(2)(D).)
    (d) The Local Board must include providers that meet the 
requirements of paragraphs (b) and (c) of this section on a local list 
and submit the list to the designated State agency. The State agency has 
30 days to determine that the provider or its programs do not meet the 
requirements relating to the providers under paragraph (c) of this 
section. After the agency determines that the provider and its programs 
meet(s) the criteria for initial eligibility, or 30 days have elapsed, 
whichever occurs first, the provider and its programs are initially 
eligible. The programs and providers submitted under paragraph (b) of 
this section are initially eligible without State agency review. (WIA 
sec. 122(e).)



Sec.663.530  Is there a time limit on the period of initial eligibility for 

training providers?

    Yes, under WIA section 122(c)(5), the Governor must require training 
providers to submit performance information and meet performance levels 
annually in order to remain eligible providers. States may require that 
these performance requirements be met one year from the date that 
initial eligibility was determined, or may require all eligible 
providers to submit performance information by the same date each year. 
If the latter approach is adopted, the Governor may exempt eligible 
providers whose determination of initial eligibility occurs within six 
months of the date of submissions. The effect of this requirement is 
that no training provider may have a period of initial eligibility that 
exceeds eighteen months. In the limited circumstance when insufficient 
data is available, initial eligibility may be extended for a period of 
up to six additional months, if the Governor's procedures provide for 
such an extension.



Sec.663.535  What is the process for determining the subsequent eligibility of 

a provider?

    (a) The Governor must develop a procedure for the Local Board to use 
in determining the subsequent eligibility of all eligible training 
providers determined initially eligible under Sec.663.515 (b) and (c), 
after:

[[Page 68]]

    (1) Soliciting and taking into consideration recommendations from 
Local Boards and providers of training services within the State;
    (2) Providing an opportunity for interested members of the public, 
including representatives of business and labor organizations, to submit 
comments on such procedure; and
    (3) Designating a specific time period for soliciting and 
considering the recommendations of Local Boards and providers, and for 
providing an opportunity for public comment.
    (b) The procedure must be described in the State Plan.
    (c) The procedure must require that:
    (1) Providers annually submit performance and cost information as 
described at WIA section 122(d)(1) and (2), for each program of training 
services for which the provider has been determined to be eligible, in a 
time and manner determined by the Local Board;
    (2) Providers and programs annually meet minimum performance levels 
described at WIA section 122(c)(6), as demonstrated utilizing UI 
quarterly wage records where appropriate.
    (d) The program's performance information must meet the minimum 
acceptable levels established under paragraph (c)(2) of this section to 
remain eligible;
    (e) Local Boards may require higher levels of performance for local 
programs than the levels specified in the procedures established by the 
Governor. (WIA sec.122(c)(5) and (c)(6).)
    (f) The State procedure must require Local Boards to take into 
consideration:
    (1) The specific economic, geographic and demographic factors in the 
local areas in which providers seeking eligibility are located, and
    (2) The characteristics of the populations served by programs 
seeking eligibility, including the demonstrated difficulties in serving 
these populations, where applicable.
    (g) The Local Board retains those programs on the local list that 
meet the required performance levels and other elements of the State 
procedures and submits the list, accompanied by the performance and cost 
information, and any additional required information, to the designated 
State agency. If the designated State agency determines within 30 days 
from the receipt of the information that the program does not meet the 
performance levels established under paragraph (c)(2) of this section, 
the program may be removed from the list. A program retained on the 
local list and not removed by the designated State agency is considered 
an eligible program of training services.



Sec.663.540  What kind of performance and cost information is required for 

determinations of subsequent eligibility?

    (a) Eligible providers of training services must submit, at least 
annually, under procedures established by the Governor under Sec.
663.535(c):
    (1) Verifiable program-specific performance information, including:
    (i) The information described in WIA section 122(d)(1)(A)(i) for all 
individuals participating in the programs of training services, 
including individuals who are not receiving assistance under WIA section 
134 and individuals who are receiving such assistance; and
    (ii) The information described in WIA section 122(d)(1)(A)(ii) 
relating only to individuals receiving assistance under the WIA adult 
and dislocated worker program who are participating in the applicable 
program of training services; and
    (2) Information on program costs (such as tuition and fees) for WIA 
participants in the program.
    (b) Governors may require any additional verifiable performance 
information (such as the information described at WIA section 122(d)(2)) 
that the Governor determines to be appropriate to obtain subsequent 
eligibility, including information regarding all participating 
individuals as well as individuals receiving assistance under the WIA 
adult and dislocated worker program.
    (c) Governors must establish procedures by which providers can 
demonstrate if the additional information required under paragraph (b) 
of this section imposes extraordinary costs on providers, or if 
providers experience extraordinary costs in the collection of

[[Page 69]]

information. If, through these procedures, providers demonstrate that 
they experience such extraordinary costs:
    (1) The Governor or Local Board must provide access to cost-
effective methods for the collection of the information; or
    (2) The Governor must provide additional resources to assist 
providers in the collection of the information from funds for Statewide 
workforce investment activities reserved under WIA sections 128(a) and 
133(a)(1).
    (d) The Local Board and the designated State agency may accept 
program-specific performance information consistent with the 
requirements for eligibility under title IV of the Higher Education Act 
of 1965 from a provider for purposes of enabling the provider to fulfill 
the applicable requirements of this section, if the information is 
substantially similar to the information otherwise required under this 
section.



Sec.663.550  How is eligible provider information developed and maintained?

    (a) The designated State agency must maintain a list of all eligible 
training programs and providers in the State (the ``State list'').
    (b) The State list is a compilation of the eligible programs and 
providers identified or retained by local areas and that have not been 
removed under Sec. Sec.663.535(g) and 663.565.
    (c) The State list must be accompanied by the performance and cost 
information contained in the local lists as required by Sec.
663.535(e). (WIA sec. 122(e)(4)(A).)



Sec.663.555  How is the State list disseminated?

    (a) The designated State agency must disseminate the State list and 
accompanying performance and cost information to the One-Stop delivery 
systems within the State.
    (b) The State list and information must be updated at least 
annually.
    (c) The State list and accompanying information form the primary 
basis of the One-Stop consumer reports system that provides for informed 
customer choice. The list and information must be widely available, 
through the One-Stop delivery system, to customers seeking information 
on training outcomes, as well as participants in employment and training 
activities funded under WIA and other programs.
    (1) The State list must be made available to individuals who have 
been determined eligible for training services under Sec.663.310.
    (2) The State list must also be made available to customers whose 
training is supported by other One-Stop partners.



Sec.663.565  May an eligible training provider lose its eligibility?

    (a) Yes. A training provider must deliver results and provide 
accurate information in order to retain its status as an eligible 
training provider.
    (b) If the provider's programs do not meet the established 
performance levels, the programs will be removed from the eligible 
provider list.
    (1) A Local Board must determine, during the subsequent eligibility 
determination process, whether a provider's programs meet performance 
levels. If the program fails to meet such levels, the program must be 
removed from the local list. If all of the provider's programs fail to 
meet such levels, the provider must be removed from the local list.
    (2) The designated State agency upon receipt of the performance 
information accompanying the local list, may remove programs from the 
State list if the agency determines the program failed to meet the 
levels of performance prescribed under Sec.663.535(c). If all of the 
provider's programs are determined to have failed to meet the levels, 
the designated State agency may remove the provider from the State list.
    (3) Providers determined to have intentionally supplied inaccurate 
information or to have subsequently violated any provision of title I of 
WIA or the WIA regulations, including 29 CFR part 37, may be removed 
from the list in accordance with the enforcement provisions of WIA 
section 122(f). A provider whose eligibility is terminated under these 
conditions is liable to repay all adult and dislocated worker training 
funds it received during the period of noncompliance.

[[Page 70]]

    (4) The Governor must establish appeal procedures for providers of 
training to appeal a denial of eligibility under this subpart according 
to the requirements of 20 CFR 667.640(b).



Sec.663.570  What is the consumer reports system?

    The consumer reports system, referred to in WIA as performance 
information, is the vehicle for informing the customers of the One-Stop 
delivery system about the performance of training providers and programs 
in the local area. It is built upon the State list of eligible providers 
and programs developed through the procedures described in WIA section 
122 and this subpart. The consumer reports system must contain the 
information necessary for an adult or dislocated worker customer to 
fully understand the options available to him or her in choosing a 
program of training services. Such program-specific factors may include 
overall performance, performance for significant customer groups 
(including wage replacement rates for dislocated workers), performance 
of specific provider sites, current information on employment and wage 
trends and projections, and duration of training programs.



Sec.663.575  In what ways can a Local Board supplement the information 

available from the State list?

    (a) Local Boards may supplement the information available from the 
State list by providing customers with additional information to assist 
in supporting informed customer choice and the achievement of local 
performance measures (as described in WIA section 136).
    (b) This additional information may include:
    (1) Information on programs of training services that are linked to 
occupations in demand in the local area;
    (2) Performance and cost information, including program-specific 
performance and cost information, for the local outlet(s) of multi-site 
eligible providers; and
    (3) Other appropriate information related to the objectives of WIA, 
which may include the information described in Sec.663.570.



Sec.663.585  May individuals choose training providers located outside of the 

local area?

    Yes, individuals may choose any of the eligible providers and 
programs on the State list. A State may also establish a reciprocal 
agreement with another State(s) to permit providers of eligible training 
programs in each State to accept individual training accounts provided 
by the other State. (WIA secs. 122(e)(4) and (e)(5).)



Sec.663.590  May a community-based organization (CBO) be included on an 

eligible provider list?

    Yes, CBO's may apply and they and their programs may be determined 
eligible providers of training services, under WIA section 122 and this 
subpart. As eligible providers, CBO's provide training through ITA's and 
may also receive contracts for training special participant populations 
when the requirements of Sec.663.430 are met.



Sec.663.595  What requirements apply to providers of OJT and customized 

training?

    For OJT and customized training providers, One-Stop operators in a 
local area must collect such performance information as the Governor may 
require, determine whether the providers meet such performance criteria 
as the Governor may require, and disseminate a list of providers that 
have met such criteria, along with the relevant performance information 
about them, through the One-Stop delivery system. Providers determined 
to meet the criteria are considered to be identified as eligible 
providers of training services. These providers are not subject to the 
other requirements of WIA section 122 or this subpart.



               Subpart F_Priority and Special Populations



Sec.663.600  What priority must be given to low-income adults and public 

assistance recipients served with adult funds under title I?

    (a) WIA states, in section 134(d)(4)(E), that in the event that 
funds allocated to a local area for adult employment

[[Page 71]]

and training activities are limited, priority for intensive and training 
services funded with title I adult funds must be given to recipients of 
public assistance and other low-income individuals in the local area.
    (b) Since funding is generally limited, States and local areas must 
establish criteria by which local areas can determine the availability 
of funds and the process by which any priority will be applied under WIA 
section 134(d)(2)(E). Such criteria may include the availability of 
other funds for providing employment and training-related services in 
the local area, the needs of the specific groups within the local area, 
and other appropriate factors.
    (c) States and local areas must give priority for adult intensive 
and training services to recipients of public assistance and other low-
income individuals, unless the local area has determined that funds are 
not limited under the criteria established under paragraph (b) of this 
section.
    (d) The process for determining whether to apply the priority 
established under paragraph (b) of this section does not necessarily 
mean that only the recipients of public assistance and other low income 
individuals may receive WIA adult funded intensive and training services 
when funds are determined to be limited in a local area. The Local Board 
and the Governor may establish a process that gives priority for 
services to the recipients of public assistance and other low income 
individuals and that also serves other individuals meeting eligibility 
requirements.



Sec.663.610  Does the statutory priority for use of adult funds also apply to 

dislocated worker funds?

    No, the statutory priority applies to adult funds for intensive and 
training services only. Funds allocated for dislocated workers are not 
subject to this requirement.



Sec.663.620  How do the Welfare-to-Work program and the TANF program relate to 

the One-Stop delivery system?

    (a) The local Welfare-to-Work (WtW) program operator is a required 
partner in the One-Stop delivery system. 20 CFR part 662 describes the 
roles of such partners in the One-Stop delivery system and applies to 
the Welfare-to-Work program operator. WtW programs serve individuals who 
may also be served by the WIA programs and, through appropriate linkages 
and referrals, these customers will have access to a broader range of 
services through the cooperation of the WtW program in the One-Stop 
system. WtW participants, who are determined to be WIA eligible, and who 
need occupational skills training may be referred through the One-Stop 
system to receive WIA training, when WtW grant and other grant funds are 
not available in accordance with Sec.663.320(a). WIA participants who 
are also determined WtW eligible, may be referred to the WtW operator 
for job placement and other WtW assistance.
    (b) The local TANF agency is specifically suggested under WIA as an 
additional partner in the One-Stop system. TANF recipients will have 
access to more information about employment opportunities and services 
when the TANF agency participates in the One-Stop delivery system. The 
Governor and Local Board should encourage the TANF agency to become a 
One-Stop partner to improve the quality of services to the WtW and TANF-
eligible populations. In addition, becoming a One-Stop partner will 
ensure that the TANF agency is represented on the Local Board and 
participates in developing workforce investment strategies that help 
cash assistance recipients secure lasting employment.



Sec.663.630  How does a displaced homemaker qualify for services under title 

I?

    Displaced homemakers may be eligible to receive assistance under 
title I in a variety of ways, including:
    (a) Core services provided by the One-Stop partners through the One-
Stop delivery system;
    (b) Intensive or training services for which an individual qualifies 
as a dislocated worker/displaced homemaker if the requirements of this 
part are met;
    (c) Intensive or training services for which an individual is 
eligible if the requirements of this part are met;
    (d) Statewide employment and training projects conducted with 
reserve

[[Page 72]]

funds for innovative programs for displaced homemakers, as described in 
20 CFR 665.210(f).



Sec.663.640  May an individual with a disability whose family does not meet 

income eligibility criteria under the Act be eligible for priority as a low-

income adult?

    Yes, even if the family of an individual with a disability does not 
meet the income eligibility criteria, the individual with a disability 
is to be considered a low-income individual if the individual's own 
income:
    (a) Meets the income criteria established in WIA section 101(25)(B); 
or
    (b) Meets the income eligibility criteria for cash payments under 
any Federal, State or local public assistance program. (WIA sec. 
101(25)(F).)



       Subpart G_On-the-Job Training (OJT) and Customized Training



Sec.663.700  What are the requirements for on-the-job training (OJT)?

    (a) On-the-job training (OJT) is defined at WIA section 101(31). OJT 
is provided under a contract with an employer in the public, private 
non-profit, or private sector. Through the OJT contract, occupational 
training is provided for the WIA participant in exchange for the 
reimbursement of up to 50 percent of the wage rate to compensate for the 
employer's extraordinary costs. (WIA sec. 101(31)(B).)
    (b) The local program must not contract with an employer who has 
previously exhibited a pattern of failing to provide OJT participants 
with continued long-term employment with wages, benefits, and working 
conditions that are equal to those provided to regular employees who 
have worked a similar length of time and are doing the same type of 
work. (WIA sec. 195(4).)
    (c) An OJT contract must be limited to the period of time required 
for a participant to become proficient in the occupation for which the 
training is being provided. In determining the appropriate length of the 
contract, consideration should be given to the skill requirements of the 
occupation, the academic and occupational skill level of the 
participant, prior work experience, and the participant's individual 
employment plan. (WIA sec. 101(31)(C).)



Sec.663.705  What are the requirements for OJT contracts for employed workers?

    OJT contracts may be written for eligible employed workers when:
    (a) The employee is not earning a self-sufficient wage as determined 
by Local Board policy;
    (b) The requirements in Sec.663.700 are met; and
    (c) The OJT relates to the introduction of new technologies, 
introduction to new production or service procedures, upgrading to new 
jobs that require additional skills, workplace literacy, or other 
appropriate purposes identified by the Local Board.



Sec.663.710  What conditions govern OJT payments to employers?

    (a) On-the-job training payments to employers are deemed to be 
compensation for the extraordinary costs associated with training 
participants and the costs associated with the lower productivity of the 
participants.
    (b) Employers may be reimbursed up to 50 percent of the wage rate of 
an OJT participant for the extraordinary costs of providing the training 
and additional supervision related to the OJT. (WIA sec. 101(31)(B).)
    (c) Employers are not required to document such extraordinary costs.



Sec.663.715  What is customized training?

    Customized training is training:
    (a) That is designed to meet the special requirements of an employer 
(including a group of employers);
    (b) That is conducted with a commitment by the employer to employ, 
or in the case of incumbent workers, continue to employ, an individual 
on successful completion of the training; and
    (c) For which the employer pays for not less than 50 percent of the 
cost of the training. (WIA sec. 101(8).)



Sec.663.720  What are the requirements for customized training for employed 

workers?

    Customized training of an eligible employed individual may be 
provided for an employer or a group of employers when:

[[Page 73]]

    (a) The employee is not earning a self-sufficient wage as determined 
by Local Board policy;
    (b) The requirements in Sec.663.715 are met; and
    (c) The customized training relates to the purposes described in 
Sec.663.705(c) or other appropriate purposes identified by the Local 
Board.



Sec.663.730  May funds provided to employers for OJT of customized training be 

used to assist, promote, or deter union organizing?

    No, funds provided to employers for OJT or customized training must 
not be used to directly or indirectly assist, promote or deter union 
organizing.



                      Subpart H_Supportive Services



Sec.663.800  What are supportive services for adults and dislocated workers?

    Supportive services for adults and dislocated workers are defined at 
WIA sections 101(46) and 134(e)(2) and (3). They include services such 
as transportation, child care, dependent care, housing, and needs-
related payments, that are necessary to enable an individual to 
participate in activities authorized under WIA title I. Local Boards, in 
consultation with the One-Stop partners and other community service 
providers, must develop a policy on supportive services that ensures 
resource and service coordination in the local area. Such policy should 
address procedures for referral to such services, including how such 
services will be funded when they are not otherwise available from other 
sources. The provision of accurate information about the availability of 
supportive services in the local area, as well as referral to such 
activities, is one of the core services that must be available to adults 
and dislocated workers through the One-Stop delivery system. (WIA sec. 
134(d)(2)(H).)



Sec.663.805  When may supportive services be provided to participants?

    (a) Supportive services may only be provided to individuals who are:
    (1) Participating in core, intensive or training services; and
    (2) Unable to obtain supportive services through other programs 
providing such services. (WIA sec. 134(e)(2)(A) and (B).)
    (b) Supportive services may only be provided when they are necessary 
to enable individuals to participate in title I activities. (WIA sec. 
101(46).)



Sec.663.810  Are there limits on the amounts or duration of funds for 

supportive services?

    (a) Local Boards may establish limits on the provision of supportive 
services or provide the One-Stop operator with the authority to 
establish such limits, including a maximum amount of funding and maximum 
length of time for supportive services to be available to participants.
    (b) Procedures may also be established to allow One-Stop operators 
to grant exceptions to the limits established under paragraph (a) of 
this section.



Sec.663.815  What are needs-related payments?

    Needs-related payments provide financial assistance to participants 
for the purpose of enabling individuals to participate in training and 
are one of the supportive services authorized by WIA section 134(e)(3).



Sec.663.820  What are the eligibility requirements for adults to receive 

needs-related payments?

    Adults must:
    (a) Be unemployed,
    (b) Not qualify for, or have ceased qualifying for, unemployment 
compensation; and
    (c) Be enrolled in a program of training services under WIA section 
134(d)(4).



Sec.663.825  What are the eligibility requirements for dislocated workers to 

receive needs-related payments?

    To receive needs related payments, a dislocated worker must:
    (a) Be unemployed, and:
    (1) Have ceased to qualify for unemployment compensation or trade 
readjustment allowance under TAA or NAFTA-TAA; and
    (2) Be enrolled in a program of training services under WIA section 
134(d)(4) by the end of the 13th week after the most recent layoff that 
resulted in a

[[Page 74]]

determination of the worker's eligibility as a dislocated worker, or, if 
later, by the end of the 8th week after the worker is informed that a 
short-term layoff will exceed 6 months; or
    (b) Be unemployed and did not qualify for unemployment compensation 
or trade readjustment assistance under TAA or NAFTA-TAA.



Sec.663.830  May needs-related payments be paid while a participant is waiting 

to start training classes?

    Yes, payments may be provided if the participant has been accepted 
in a training program that will begin within 30 calendar days. The 
Governor may authorize local areas to extend the 30 day period to 
address appropriate circumstances.



Sec.663.840  How is the level of needs-related payments determined?

    (a) The payment level for adults must be established by the Local 
Board.
    (b) For dislocated workers, payments must not exceed the greater of 
either of the following levels:
    (1) For participants who were eligible for unemployment compensation 
as a result of the qualifying dislocation, the payment may not exceed 
the applicable weekly level of the unemployment compensation benefit; or
    (2) For participants who did not qualify for unemployment 
compensation as a result of the qualifying layoff, the weekly payment 
may not exceed the poverty level for an equivalent period. The weekly 
payment level must be adjusted to reflect changes in total family income 
as determined by Local Board policies. (WIA sec. 134(e)(3)(C).)



PART 664_YOUTH ACTIVITIES UNDER TITLE I OF THE WORKFORCE INVESTMENT ACT--Table 

of Contents



                        Subpart A_Youth Councils

Sec.
664.100 What is the youth council?
664.110 Who is responsible for oversight of youth programs in the local 
          area?

                Subpart B_Eligibility for Youth Services

664.200 Who is eligible for youth services?
664.205 How is the ``deficient in basic literacy skills'' criterion in 
          Sec.664.200(c)(1) defined and documented?
664.210 How is the ``requires additional assistance to complete an 
          educational program, or to secure and hold employment'' 
          criterion in Sec.664.200(c)(6) defined and documented?
664.215 Must youth participants be registered to participate in the 
          youth program?
664.220 Is there an exception to permit youth who are not low-income 
          individuals to receive youth services?
664.230 Are the eligibility barriers for eligible youth the same as the 
          eligibility barriers for the five percent of youth 
          participants who do not have to meet income eligibility 
          requirements?
664.240 May a local program use eligibility for free lunches under the 
          National School Lunch Program as a substitute for the income 
          eligibility criteria under title I of WIA?
664.250 May a disabled youth whose family does not meet income 
          eligibility criteria under the Act be eligible for youth 
          services?

                      Subpart C_Out-of-School Youth

664.300 Who is an ``out-of-school youth''?
664.310 When is dropout status determined, particularly for youth 
          attending alternative schools?
664.320 Does the requirement that at least 30 percent of youth funds be 
          used to provide activities to out-of-school youth apply to all 
          youth funds?

        Subpart D_Youth Program Design, Elements, and Parameters

664.400 What is a local youth program?
664.405 How must local youth programs be designed?
664.410 Must local programs include each of the ten program elements 
          listed in WIA section 129(c)(2) as options available to youth 
          participants?
664.420 What are leadership development opportunities?
664.430 What are positive social behaviors?
664.440 What are supportive services for youth?
664.450 What are follow-up services for youth?
664.460 What are work experiences for youth?
664.470 Are paid work experiences allowable activities?

                     Subpart E_Concurrent Enrollment

664.500 May youth participate in both youth and adult/dislocated worker 
          programs concurrently?

[[Page 75]]

664.510 Are Individual Training Accounts allowed for youth participants?

                Subpart F_Summer Employment Opportunities

664.600 Are Local Boards required to offer summer employment 
          opportunities in the local youth program?
664.610 How is the summer employment opportunities element administered?
664.620 Do the core indicators described in 20 CFR 666.100(a)(3) apply 
          to participation in summer employment activities?

                  Subpart G_One-Stop Services to Youth

664.700 What is the connection between the youth program and the One-
          Stop service delivery system?
664.710 Do Local Boards have the flexibility to offer services to area 
          youth who are not eligible under the youth program through the 
          One-Stop centers?

                   Subpart H_Youth Opportunity Grants

664.800 How are the recipients of Youth Opportunity Grants selected?
664.810 How does a Local Board or other entity become eligible to 
          receive a Youth Opportunity Grant?
664.820 Who is eligible to receive services under Youth Opportunity 
          Grants?
664.830 How are performance measures for Youth Opportunity Grants 
          determined?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49411, Aug. 11, 2000, unless otherwise noted.



                        Subpart A_Youth Councils



Sec.664.100  What is the youth council?

    (a) The duties and membership requirements of the youth council are 
described in WIA section 117(h) and 20 CFR 661.335 and 661.340.
    (b) The purpose of the youth council is to provide expertise in 
youth policy and to assist the Local Board in:
    (1) Developing and recommending local youth employment and training 
policy and practice;
    (2) Broadening the youth employment and training focus in the 
community to incorporate a youth development perspective;
    (3) Establishing linkages with other organizations serving youth in 
the local area; and
    (4) Taking into account a range of issues that can have an impact on 
the success of youth in the labor market. (WIA sec. 117(h).)



Sec.664.110  Who is responsible for oversight of youth programs in the local 

area?

    (a) The Local Board, working with the youth council, is responsible 
for conducting oversight of local youth programs operated under the Act, 
to ensure both fiscal and programmatic accountability.
    (b) Local program oversight is conducted in consultation with the 
local area's chief elected official.
    (c) The Local Board may, after consultation with the CEO, delegate 
its responsibility for oversight of eligible youth providers, as well as 
other youth program oversight responsibilities, to the youth council, 
recognizing the advantage of delegating such responsibilities to the 
youth council whose members have expertise in youth issues. (WIA sec. 
117(d); 117(h)(4).)



                Subpart B_Eligibility for Youth Services



Sec.664.200  Who is eligible for youth services?

    An eligible youth is defined, under WIA sec. 101(13), as an 
individual who:
    (a) Is age 14 through 21;
    (b) Is a low income individual, as defined in the WIA section 
101(25); and
    (c) Is within one or more of the following categories:
    (1) Deficient in basic literacy skills;
    (2) School dropout;
    (3) Homeless, runaway, or foster child;
    (4) Pregnant or parenting;
    (5) Offender; or
    (6) Is an individual (including a youth with a disability) who 
requires additional assistance to complete an educational program, or to 
secure and hold employment. (WIA sec. 101(13).)



Sec.664.205  How is the ``deficient in basic literacy skills'' criterion in 

Sec.664.200(c)(1) defined and documented?

    (a) Definitions and eligibility documentation requirements regarding 
the ``deficient in basic literacy skills'' criterion in Sec.
664.200(c)(1) may be established at the State or local level. These

[[Page 76]]

definitions may establish such criteria as are needed to address State 
or local concerns, and must include a determination that an individual:
    (1) Computes or solves problems, reads, writes, or speaks English at 
or below the 8th grade level on a generally accepted standardized test 
or a comparable score on a criterion-referenced test; or
    (2) Is unable to compute or solve problems, read, write, or speak 
English at a level necessary to function on the job, in the individual's 
family or in society. (WIA secs. 101(19), 203(12).)
    (b) In cases where the State Board establishes State policy on this 
criterion, the policy must be included in the State plan. (WIA secs. 
101(13)(C)(i), 101(19).)



Sec.664.210  How is the ``requires additional assistance to complete an 

educational program, or to secure and hold employment'' criterion in Sec.

664.200(c)(6) defined and documented?

    Definitions and eligibility documentation requirements regarding the 
``requires additional assistance to complete an educational program, or 
to secure and hold employment'' criterion of Sec.664.200(c)(6) may be 
established at the State or local level. In cases where the State Board 
establishes State policy on this criterion, the policy must be included 
in the State Plan. (WIA sec. 101(13)(C)(iv).)



Sec.664.215  Must youth participants be registered to participate in the youth 

program?

    (a) Yes, all youth participants must be registered.
    (b) Registration is the process of collecting information to support 
a determination of eligibility.
    (c) Equal opportunity data must be collected during the registration 
process on any individual who has submitted personal information in 
response to a request by the recipient for such information.



Sec.664.220  Is there an exception to permit youth who are not low-income 

individuals to receive youth services?

    Yes, up to five percent of youth participants served by youth 
programs in a local area may be individuals who do not meet the income 
criterion for eligible youth, provided that they are within one or more 
of the following categories:
    (a) School dropout;
    (b) Basic skills deficient, as defined in WIA section 101(4);
    (c) Are one or more grade levels below the grade level appropriate 
to the individual's age;
    (d) Pregnant or parenting;
    (e) Possess one or more disabilities, including learning 
disabilities;
    (f) Homeless or runaway;
    (g) Offender; or
    (h) Face serious barriers to employment as identified by the Local 
Board. (WIA sec. 129(c)(5).)



Sec.664.230  Are the eligibility barriers for eligible youth the same as the 

eligibility barriers for the five percent of youth participants who do not 

have to meet income eligibility requirements?

    No, the barriers listed in Sec. Sec.664.200 and 664.220 are not 
the same. Both lists of eligibility barriers include school dropout, 
homeless or runaway, pregnant or parenting, and offender, but each list 
contains barriers not included on the other list.



Sec.664.240  May a local program use eligibility for free lunches under the 

National School Lunch Program as a substitute for the income eligibility 

criteria under title I of WIA?

    No, the criteria for income eligibility under the National School 
Lunch Program are not the same as the Act's income eligibility criteria. 
Therefore, the school lunch list may not be used as a substitute for 
income eligibility to determine who is eligible for services under the 
Act.



Sec.664.250  May a disabled youth whose family does not meet income 

eligibility criteria under the Act be eligible for youth services?

    Yes, even if the family of a disabled youth does not meet the income 
eligibility criteria, the disabled youth may be considered a low-income 
individual if the youth's own income:
    (a) Meets the income criteria established in WIA section 101(25)(B); 
or

[[Page 77]]

    (b) Meets the income eligibility criteria for cash payments under 
any Federal, State or local public assistance program. (WIA sec. 
101(25)(F).)



                      Subpart C_Out-of-School Youth



Sec.664.300  Who is an ``out-of-school youth''?

    An out-of-school youth is an individual who:
    (a) Is an eligible youth who is a school dropout; or
    (b) Is an eligible youth who has either graduated from high school 
or holds a GED, but is basic skills deficient, unemployed, or 
underemployed. (WIA sec. 101(33).)



Sec.664.310  When is dropout status determined, particularly for youth 

attending alternative schools?

    A school dropout is defined as an individual who is no longer 
attending any school and who has not received a secondary school diploma 
or its recognized equivalent. A youth's dropout status is determined at 
the time of registration. A youth attending an alternative school at the 
time of registration is not a dropout. An individual who is out-of 
school at the time of registration and subsequently placed in an 
alternative school, may be considered an out-of-school youth for the 
purposes of the 30 percent expenditure requirement for out-of-school 
youth. (WIA sec. 101(39).)



Sec.664.320  Does the requirement that at least 30 percent of youth funds be 

used to provide activities to out-of-school youth apply to all youth funds?

    (a) Yes, the 30 percent requirement applies to the total amount of 
all funds allocated to a local area under WIA section 128(b)(2)(A) or 
(b)(3), except for local area expenditures for administrative purposes 
under 20 CFR 667.210(a)(2).
    (b) Although it is not necessary to ensure that 30 percent of such 
funds spent on summer employment opportunities (or any other particular 
element of the youth program) are spent on out-of-school youth, the 
funds spent on these activities are included in the total to which the 
30 percent requirement applies.
    (c) There is a limited exception, at WIA section 129(c)(4)(B), under 
which certain small States may apply to the Secretary to reduce the 
minimum amount that must be spent on out-of-school youth. (WIA sec. 
129(c)(4).)



        Subpart D_Youth Program Design, Elements, and Parameters



Sec.664.400  What is a local youth program?

    A local youth program is defined as those youth activities offered 
by a Local Workforce Investment Board for a designated local workforce 
investment area, as specified in 20 CFR part 661.



Sec.664.405  How must local youth programs be designed?

    (a) The design framework of local youth programs must:
    (1) Provide an objective assessment of each youth participant, that 
meets the requirements of WIA section 129(c)(1)(A), and includes a 
review of the academic and occupational skill levels, as well as the 
service needs, of each youth;
    (2) Develop an individual service strategy for each youth 
participant that meets the requirements of WIA section 129(c)(1)(B), 
including identifying an age-appropriate career goal and consideration 
of the assessment results for each youth; and
    (3) Provide preparation for postsecondary educational opportunities, 
provide linkages between academic and occupational learning, provide 
preparation for employment, and provide effective connections to 
intermediary organizations that provide strong links to the job market 
and employers.
    (4) The requirement in WIA section 123 that eligible providers of 
youth services be selected by awarding a grant or contract on a 
competitive basis does not apply to the design framework component, such 
as services for intake, objective assessment and the development of 
individual service strategy, when these services are provided by the 
grant recipient/fiscal agent.

[[Page 78]]

    (b) The local plan must describe the design framework for youth 
program design in the local area, and how the ten program elements 
required in Sec.664.410 are provided within that framework.
    (c) Local Boards must ensure appropriate links to entities that will 
foster the participation of eligible local area youth. Such links may 
include connections to:
    (1) Local area justice and law enforcement officials;
    (2) Local public housing authorities;
    (3) Local education agencies;
    (4) Job Corps representatives; and
    (5) Representatives of other area youth initiatives, including those 
that serve homeless youth and other public and private youth 
initiatives.
    (d) Local Boards must ensure that the referral requirements in WIA 
section 129(c)(3) for youth who meet the income eligibility criteria are 
met, including:
    (1) Providing these youth with information regarding the full array 
of applicable or appropriate services available through the Local Board 
or other eligible providers, or One-Stop partners; and
    (2) Referring these youth to appropriate training and educational 
programs that have the capacity to serve them either on a sequential or 
concurrent basis.
    (e) In order to meet the basic skills and training needs of eligible 
applicants who do not meet the enrollment requirements of a particular 
program or who cannot be served by the program, each eligible youth 
provider must ensure that these youth are referred:
    (1) For further assessment, as necessary, and
    (2) To appropriate programs, in accordance with paragraph (d)(2) of 
this section.
    (f) Local Boards must ensure that parents, youth participants, and 
other members of the community with experience relating to youth 
programs are involved in both the design and implementation of its youth 
programs.
    (g) The objective assessment required under paragraph (a)(1) of this 
section or the individual service strategy required under paragraph 
(a)(2) of this section is not required if the program provider 
determines that it is appropriate to use a recent objective assessment 
or individual service strategy that was developed under another 
education or training program. (WIA section 129(c)(1).)



Sec.664.410  Must local programs include each of the ten program elements 

listed in WIA section 129(c)(2) as options available to youth participants?

    (a) Yes, local programs must make the following services available 
to youth participants:
    (1) Tutoring, study skills training, and instruction leading to 
secondary school completion, including dropout prevention strategies;
    (2) Alternative secondary school offerings;
    (3) Summer employment opportunities directly linked to academic and 
occupational learning;
    (4) Paid and unpaid work experiences, including internships and job 
shadowing, as provided in Sec. Sec.664.460 and 664.470;
    (5) Occupational skill training;
    (6) Leadership development opportunities, which include community 
service and peer-centered activities encouraging responsibility and 
other positive social behaviors;
    (7) Supportive services, which may include the services listed in 
Sec.664.440;
    (8) Adult mentoring for a duration of at least twelve (12) months, 
that may occur both during and after program participation;
    (9) Followup services, as provided in Sec.664.450; and
    (10) Comprehensive guidance and counseling, including drug and 
alcohol abuse counseling, as well as referrals to counseling, as 
appropriate to the needs of the individual youth.
    (b) Local programs have the discretion to determine what specific 
program services will be provided to a youth participant, based on each 
participant's objective assessment and individual service strategy. (WIA 
sec. 129(c)(2).)



Sec.664.420  What are leadership development opportunities?

    Leadership development opportunities are opportunities that 
encourage

[[Page 79]]

responsibility, employability, and other positive social behaviors such 
as:
    (a) Exposure to postsecondary educational opportunities;
    (b) Community and service learning projects;
    (c) Peer-centered activities, including peer mentoring and tutoring;
    (d) Organizational and team work training, including team leadership 
training;
    (e) Training in decision-making, including determining priorities; 
and
    (f) Citizenship training, including life skills training such as 
parenting, work behavior training, and budgeting of resources. (WIA sec. 
129(c)(2)(F).)



Sec.664.430  What are positive social behaviors?

    Positive social behaviors are outcomes of leadership opportunities, 
often referred to as soft skills, which are incorporated by many local 
programs as part of their menu of services. Positive social behaviors 
focus on areas that may include the following:
    (a) Positive attitudinal development;
    (b) Self esteem building;
    (c) Openness to working with individuals from diverse racial and 
ethnic backgrounds;
    (d) Maintaining healthy lifestyles, including being alcohol and drug 
free;
    (e) Maintaining positive relationships with responsible adults and 
peers, and contributing to the well being of one's community, including 
voting;
    (f) Maintaining a commitment to learning and academic success;
    (g) Avoiding delinquency;
    (h) Postponed and responsible parenting; and
    (i) Positive job attitudes and work skills. (WIA sec. 129(c)(2)(F).)



Sec.664.440  What are supportive services for youth?

    Supportive services for youth, as defined in WIA section 101(46), 
may include the following:
    (a) Linkages to community services;
    (b) Assistance with transportation;
    (c) Assistance with child care and dependent care;
    (d) Assistance with housing;
    (e) Referrals to medical services; and
    (f) Assistance with uniforms or other appropriate work attire and 
work-related tools, including such items as eye glasses and protective 
eye gear. (WIA sec. 129(c)(2)(G).)



Sec.664.450  What are follow-up services for youth?

    (a) Follow-up services for youth may include:
    (1) The leadership development and supportive service activities 
listed in Sec. Sec.664.420 and 664.440;
    (2) Regular contact with a youth participant's employer, including 
assistance in addressing work-related problems that arise;
    (3) Assistance in securing better paying jobs, career development 
and further education;
    (4) Work-related peer support groups;
    (5) Adult mentoring; and
    (6) Tracking the progress of youth in employment after training.
    (b) All youth participants must receive some form of follow-up 
services for a minimum duration of 12 months. Follow-up services may be 
provided beyond twelve (12) months at the State or Local Board's 
discretion. The types of services provided and the duration of services 
must be determined based on the needs of the individual. The scope of 
these follow-up services may be less intensive for youth who have only 
participated in summer youth employment opportunities. (WIA sec. 
129(c)(2)(I).)



Sec.664.460  What are work experiences for youth?

    (a) Work experiences are planned, structured learning experiences 
that take place in a workplace for a limited period of time. As provided 
in WIA section 129(c)(2)(D) and Sec.664.470, work experiences may be 
paid or unpaid.
    (b) Work experience workplaces may be in the private, for-profit 
sector; the non-profit sector; or the public sector.
    (c) Work experiences are designed to enable youth to gain exposure 
to the working world and its requirements. Work experiences are 
appropriate and desirable activities for many youth throughout the year. 
Work experiences should help youth acquire the personal attributes, 
knowledge, and skills needed to obtain a job and advance in employment. 
The purpose is to provide

[[Page 80]]

the youth participant with the opportunities for career exploration and 
skill development and is not to benefit the employer, although the 
employer may, in fact, benefit from the activities performed by the 
youth. Work experiences may be subsidized or unsubsidized and may 
include the following elements:
    (1) Instruction in employability skills or generic workplace skills 
such as those identified by the Secretary's Commission on Achieving 
Necessary Skills (SCANS);
    (2) Exposure to various aspects of an industry;
    (3) Progressively more complex tasks;
    (4) Internships and job shadowing;
    (5) The integration of basic academic skills into work activities;
    (6) Supported work, work adjustment, and other transition 
activities;
    (7) Entrepreneurship;
    (8) Service learning;
    (9) Paid and unpaid community service; and
    (10) Other elements designed to achieve the goals of work 
experiences.
    (d) In most cases, on-the-job training is not an appropriate work 
experiences activity for youth participants under age 18. Local program 
operators may choose, however, to use this service strategy for eligible 
youth when it is appropriate based on the needs identified by the 
objective assessment of an individual youth participant. (WIA sec. 
129(c)(2)(D).)



Sec.664.470  Are paid work experiences allowable activities?

    Funds under the Act may be used to pay wages and related benefits 
for work experiences in the public; private, for-profit or non-profit 
sectors where the objective assessment and individual service strategy 
indicate that work experiences are appropriate. (WIA sec. 129(c)(2)(D).)



                     Subpart E_Concurrent Enrollment



Sec.664.500  May youth participate in both youth and adult/dislocated worker 

programs concurrently?

    (a) Yes, under the Act, eligible youth are 14 through 21 years of 
age. Adults are defined in the Act as individuals age 18 and older. 
Thus, individuals ages 18 through 21 may be eligible for both adult and 
youth programs. There is no specified age for the dislocated worker 
program.
    (b) Individuals who meet the respective eligibility requirements may 
participate in adult and youth programs concurrently. Concurrent 
enrollment is allowable for youth served in programs under WIA titles I 
or II. Such individuals must be eligible under the youth or adult/
dislocated worker eligibility criteria applicable to the services 
received. Local program operators may determine, for individuals in this 
age group, the appropriate level and balance of services under the 
youth, adult, dislocated worker, or other services.
    (c) Local program operators must identify and track the funding 
streams which pay the costs of services provided to individuals who are 
participating in youth and adult/dislocated worker programs 
concurrently, and ensure that services are not duplicated.



Sec.664.510  Are Individual Training Accounts allowed for youth participants?

    No, however, individuals age 18 and above, who are eligible for 
training services under the adult and dislocated worker programs, may 
receive Individual Training Accounts through those programs. 
Requirements for concurrent participation requirements are set forth in 
Sec.664.500. To the extent possible, in order to enhance youth 
participant choice, youth participants should be involved in the 
selection of educational and training activities.



                Subpart F_Summer Employment Opportunities



Sec.664.600  Are Local Boards required to offer summer employment 

opportunities in the local youth program?

    (a) Yes, Local Boards are required to offer summer youth employment 
opportunities that link academic and occupational learning as part of 
the menu of services required in Sec.664.410(a).
    (b) Summer youth employment must provide direct linkages to academic 
and occupational learning, and may provide other elements and strategies

[[Page 81]]

as appropriate to serve the needs and goals of the participants.
    (c) Local Boards may determine how much of available youth funds 
will be used for summer and for year-round youth activities.
    (d) The summer youth employment opportunities element is not 
intended to be a stand-alone program. Local programs should integrate a 
youth's participation in that element into a comprehensive strategy for 
addressing the youth's employment and training needs. Youths who 
participate in summer employment opportunities must be provided with a 
minimum of twelve months of followup services, as required in Sec.
664.450. (WIA sec. 129(c)(2)(C).)



Sec.664.610  How is the summer employment opportunities element administered?

    Chief elected officials and Local Boards are responsible for 
ensuring that the local youth program provides summer employment 
opportunities to youth. The chief elected officials (which may include 
local government units operating as a consortium) are the grant 
recipients for local youth funds, unless another entity is chosen to be 
grant recipient or fiscal agent under WIA section 117(d)(3)(B). If, in 
the administration of the summer employment opportunities element of the 
local youth program, providers other than the grant recipient/fiscal 
agent, are used to provide summer youth employment opportunities, these 
providers must be selected by awarding a grant or contract on a 
competitive basis, based on the recommendation of the youth council and 
on criteria contained in the State Plan. However, the selection of 
employers who are providing unsubsidized employment opportunities may be 
excluded from the competitive process. (WIA sec. 129(c)(2)(C).)



Sec.664.620  Do the core indicators described in 20 CFR 666.100(a)(3) apply to 

participation in summer employment activities?

    Yes, the summer employment opportunities element is one of a number 
of activities authorized by the WIA youth program. WIA section 136(b)(2) 
(A)(ii) and(B) provides specific core indicators of performance for 
youth, and requires that all participating youth be included in the 
determination of whether the local levels of performance are met. 
Program operators can help ensure positive outcomes for youth 
participants by providing them with continuity of services.



                  Subpart G_One-Stop Services to Youth



Sec.664.700  What is the connection between the youth program and the One-Stop 

service delivery system?

    (a) The chief elected official (or designee, under WIA section 
117(d)(3)(B)), as the local grant recipient for the youth program is a 
required One-Stop partner and is subject to the requirements that apply 
to such partners, described in 20 CFR part 662.
    (b) In addition to the provisions of 20 CFR part 662, connections 
between the youth program and the One-Stop system may include those that 
facilitate:
    (1) The coordination and provision of youth activities;
    (2) Linkages to the job market and employers;
    (3) Access for eligible youth to the information and services 
required in Sec. Sec.664.400 and 664.410; and
    (4) Other activities designed to achieve the purposes of the youth 
program and youth activities as described in WIA section 129(a). (WIA 
secs. 121(b)(1)(B)(i); 129.)



Sec.664.710  Do Local Boards have the flexibility to offer services to area 

youth who are not eligible under the youth program through the One-Stop 

centers?

    Yes, however, One-Stop services for non-eligible youth must be 
funded by programs that are authorized to provide services to such 
youth. For example, basic labor exchange services under the Wagner-
Peyser Act may be provided to any youth.

[[Page 82]]



                   Subpart H_Youth Opportunity Grants



Sec.664.800  How are the recipients of Youth Opportunity Grants selected?

    (a) Youth Opportunity Grants are awarded through a competitive 
selection process. The Secretary establishes appropriate application 
procedures, selection criteria, and an approval process for awarding 
Youth Opportunity Grants to applicants which can accomplish the purpose 
of the Act and use available funds in an effective manner in the 
Solicitation for Grant Applications announcing the competition.
    (b) The Secretary distributes grants equitably among urban and rural 
areas by taking into consideration such factors as the following:
    (1) The poverty rate in urban and rural communities;
    (2) The number of people in poverty in urban and rural communities; 
and
    (3) The quality of proposals received. (WIA sec.169(a) and (e).)



Sec.664.810  How does a Local Board or other entity become eligible to receive 

a Youth Opportunity Grant?

    (a) A Local Board is eligible to receive a Youth Opportunity Grant 
if it serves a community that:
    (1) Has been designated as an empowerment zone (EZ) or enterprise 
community (EC) under section 1391 of the Internal Revenue Code of 1986;
    (2) Is located in a State that does not have an EZ or an EC and that 
has been designated by its Governor as a high poverty area; or
    (3) Is one of two areas in a State that has been designated by the 
Governor as an area for which a local board may apply for a Youth 
Opportunity Grant, and that meets the poverty rate criteria in section 
1392 (a)(4), (b), and (d) of the Internal Revenue Code of 1986.
    (b) An entity other than a Local Board is eligible to receive a 
grant if that entity:
    (1) Is a WIA Indian and Native American grant recipient under WIA 
section 166; and
    (2) Serves a community that:
    (i) Meets the poverty rate criteria in section 1392(a)(4), (b), and 
(d) of the Internal Revenue Code of 1986; and
    (ii) Is located on an Indian reservation or serves Oklahoma Indians 
or Alaska Native villages or Native groups, as provided in WIA section 
169 (d)(2)(B). (WIA sec. 169(c) and (d).)



Sec.664.820  Who is eligible to receive services under Youth Opportunity 

Grants?

    All individuals ages 14 through 21 who reside in the community 
identified in the grant are eligible to receive services under the 
grant. (WIA sec. 169(a).)



Sec.664.830  How are performance measures for Youth Opportunity Grants 

determined?

    (a) The Secretary negotiates performance measures, including 
appropriate performance levels for each indicator, with each selected 
grantee, based on information contained in the application.
    (b) Performance indicators for the measures negotiated under Youth 
Opportunity Grants are the indicators of performance provided in WIA 
sections 136(b)(2)(A) and (B). (WIA sec. 169(f).).



PART 665_STATEWIDE WORKFORCE INVESTMENT ACTIVITIES UNDER TITLE I OF THE 

WORKFORCE INVESTMENT ACT--Table of Contents



                      Subpart A_General Description

Sec.
665.100 What are the Statewide workforce investment activities under 
          title I of WIA?
665.110 How are Statewide workforce investment activities funded?

    Subpart B_Required and Allowable Statewide Workforce Investment 
                               Activities

665.200 What are required Statewide workforce investment activities?
665.210 What are allowable Statewide workforce investment activities?
665.220 Who is an ``incumbent worker'' for purposes of Statewide 
          workforce investment activities?

                   Subpart C_Rapid Response Activities

665.300 What are rapid response activities and who is responsible for 
          providing them?
665.310 What rapid response activities are required?

[[Page 83]]

665.320 May other activities be undertaken as part of rapid response?
665.330 Are the NAFTA-TAA program requirements for rapid response also 
          required activities?
665.340 What is meant by ``provision of additional assistance'' in WIA 
          section 134(a)(2)(A)(ii)?

    Authority: Section 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49415, Aug. 11, 2000, unless otherwise noted.



                      Subpart A_General Description



Sec.665.100  What are the Statewide workforce investment activities under 

title I of WIA?

    Statewide workforce investment activities include Statewide 
employment and training activities for adults and dislocated workers, as 
described in WIA section 134(a), and Statewide youth activities, as 
described in WIA section 129(b). They include both required and 
allowable activities. In accordance with the requirements of this 
subpart, the State may develop policies and strategies for use of 
Statewide workforce investment funds. Descriptions of these policies and 
strategies must be included in the State Plan. (WIA secs. 129(b), 
134(a).)



Sec.665.110  How are Statewide workforce investment activities funded?

    (a) Except for the Statewide rapid response activities described in 
paragraph (c) of this section, Statewide workforce investment activities 
are supported by funds reserved by the Governor under WIA section 
128(a).
    (b) Funds reserved by the Governor for Statewide workforce 
investment activities may be combined and used for any of the activities 
authorized in WIA sections 129(b), 134(a)(2)(B) or 134(a)(3)(A) (which 
are described in Sec. Sec.665.200 and 665.210), regardless of whether 
the funds were allotted through the youth, adult, or dislocated worker 
funding streams.
    (c) Funds for Statewide rapid response activities are reserved under 
WIA section 133(a)(2) and may be used to provide the activities 
authorized at section 134(a)(2)(A) (which are described in Sec. Sec.
665.310 through 665.330). (WIA secs. 129(b), 133(a)(2), 134(a)(2)(B), 
and 134(a)(3)(A).)



    Subpart B_Required and Allowable Statewide Workforce Investment 

                               Activities



Sec.665.200  What are required Statewide workforce investment activities?

    Required Statewide workforce investment activities are:
    (a) Required rapid response activities, as described in Sec.
665.310;
    (b) Disseminating:
    (1) The State list of eligible providers of training services 
(including those providing non-traditional training services), for 
adults and dislocated workers;
    (2) Information identifying eligible providers of on-the-job 
training (OJT) and customized training;
    (3) Performance and program cost information about these providers, 
as described in 20 CFR 663.540; and
    (4) A list of eligible providers of youth activities as described in 
WIA section 123;
    (c) States must assure that the information listed in paragraphs 
(b)(1) through (4) of this section is widely available.
    (d) Conducting evaluations, under WIA section 136(e), of workforce 
investment activities for adults, dislocated workers and youth, in order 
to establish and promote methods for continuously improving such 
activities to achieve high-level performance within, and high-level 
outcomes from, the Statewide workforce investment system. Such 
evaluations must be designed and conducted in conjunction with the State 
and Local Boards, and must include analysis of customer feedback, 
outcome and process measures in the workforce investment system. To the 
maximum extent practicable, these evaluations should be conducted in 
coordination with Federal evaluations carried out under WIA section 172.
    (e) Providing incentive grants:
    (1) To local areas for regional cooperation among Local Boards 
(including Local Boards for a designated region, as described in 20 CFR 
661.290);
    (2) For local coordination of activities carried out under WIA; and
    (3) For exemplary performance by local areas on the performance 
measures.

[[Page 84]]

    (f) Providing technical assistance to local areas that fail to meet 
local performance measures.
    (g) Assisting in the establishment and operation of One-Stop 
delivery systems, in accordance with the strategy described in the State 
workforce investment plan. (WIA sec. 112(b)(14).)
    (h) Providing additional assistance to local areas that have high 
concentrations of eligible youth.
    (i) Operating a fiscal and management accountability information 
system, based on guidelines established by the Secretary after 
consultation with the Governors, chief elected officials, and One-Stop 
partners, as required by WIA section 136(f). (WIA secs. 129(b)(2), 
134(a)(2), and 136(e)(2).)



Sec.665.210  What are allowable Statewide workforce investment activities?

    Allowable Statewide workforce investment activities include:
    (a) State administration of the adult, dislocated worker and youth 
workforce investment activities, consistent with the five percent 
administrative cost limitation at 20 CFR 667.210(a)(1).
    (b) Providing capacity building and technical assistance to local 
areas, including Local Boards, One-Stop operators, One-Stop partners, 
and eligible providers, which may include:
    (1) Staff development and training; and
    (2) The development of exemplary program activities.
    (c) Conducting research and demonstrations.
    (d) Establishing and implementing:
    (1) Innovative incumbent worker training programs, which may include 
an employer loan program to assist in skills upgrading; and
    (2) Programs targeted to Empowerment Zones and Enterprise 
Communities.
    (e) Providing support to local areas for the identification of 
eligible training providers.
    (f) Implementing innovative programs for displaced homemakers, and 
programs to increase the number of individuals trained for and placed in 
non-traditional employment.
    (g) Carrying out such adult and dislocated worker employment and 
training activities as the State determines are necessary to assist 
local areas in carrying out local employment and training activities.
    (h) Carrying out youth activities Statewide.
    (i) Preparation and submission to the Secretary of the annual 
performance progress report as described in 20 CFR 667.300(e). (WIA 
secs. 129(b)(3) and 134(a)(3).)



Sec.665.220  Who is an ``incumbent worker'' for purposes of Statewide 

workforce investment activities?

    States may establish policies and definitions to determine which 
workers, or groups of workers, are eligible for incumbent worker 
services under this subpart. An incumbent worker is an individual who is 
employed, but an incumbent worker does not necessarily have to meet the 
eligibility requirements for intensive and training services for 
employed adults and dislocated workers at 20 CFR 663.220(b) and 663.310. 
(WIA sec. 134(a)(3)(A)(iv)(I).)



                   Subpart C_Rapid Response Activities



Sec.665.300  What are rapid response activities and who is responsible for 

providing them?

    (a) Rapid response activities are described in Sec. Sec.665.310 
through 665.330. They encompass the activities necessary to plan and 
deliver services to enable dislocated workers to transition to new 
employment as quickly as possible, following either a permanent closure 
or mass layoff, or a natural or other disaster resulting in a mass job 
dislocation.
    (b) The State is responsible for providing rapid response 
activities. Rapid response is a required activity carried out in local 
areas by the State, or an entity designated by the State, in conjunction 
with the Local Board and chief elected officials. The State must 
establish methods by which to provide additional assistance to local 
areas that experience disasters, mass layoffs, plant closings, or other 
dislocation events when such events substantially increase the number of 
unemployed individuals.
    (c) States must establish a rapid response dislocated worker unit to 
carry

[[Page 85]]

out Statewide rapid response activities. (WIA secs. 101(38), 
112(b)(17)(A)(ii) and 134(a)(2)(A).)



Sec.665.310  What rapid response activities are required?

    Rapid response activities must include:
    (a) Immediate and on-site contact with the employer, representatives 
of the affected workers, and the local community, which may include an 
assessment of the:
    (1) Layoff plans and schedule of the employer;
    (2) Potential for averting the layoff(s) in consultation with State 
or local economic development agencies, including private sector 
economic development entities;
    (3) Background and probable assistance needs of the affected 
workers;
    (4) Reemployment prospects for workers in the local community; and
    (5) Available resources to meet the short and long-term assistance 
needs of the affected workers.
    (b) The provision of information and access to unemployment 
compensation benefits, comprehensive One-Stop system services, and 
employment and training activities, including information on the Trade 
Adjustment Assistance (TAA) program and the NAFTA-TAA program (19 U.S.C. 
2271 et seq.);
    (c) The provision of guidance and/or financial assistance in 
establishing a labor-management committee voluntarily agreed to by labor 
and management, or a workforce transition committee comprised of 
representatives of the employer, the affected workers and the local 
community. The committee may devise and oversee an implementation 
strategy that responds to the reemployment needs of the workers. The 
assistance to this committee may include:
    (1) The provision of training and technical assistance to members of 
the committee;
    (2) Funding the operating costs of a committee to enable it to 
provide advice and assistance in carrying out rapid response activities 
and in the design and delivery of WIA-authorized services to affected 
workers. Typically, such support will last no longer than six months; 
and
    (3) Providing a list of potential candidates to serve as a neutral 
chairperson of the committee.
    (d) The provision of emergency assistance adapted to the particular 
closing, layoff or disaster.
    (e) The provision of assistance to the local board and chief elected 
official(s) to develop a coordinated response to the dislocation event 
and, as needed, obtain access to State economic development assistance. 
Such coordinated response may include the development of an application 
for National Emergency Grant under 20 CFR part 671. (WIA secs. 101(38) 
and 134(a)(2)(A).)



Sec.665.320  May other activities be undertaken as part of rapid response?

    Yes, a State or designated entity may provide rapid response 
activities in addition to the activities required to be provided under 
Sec.665.310. In order to provide effective rapid response upon 
notification of a permanent closure or mass layoff, or a natural or 
other disaster resulting in a mass job dislocation, the State or 
designated entity may:
    (a) In conjunction, with other appropriate Federal, State and Local 
agencies and officials, employer associations, technical councils or 
other industry business councils, and labor organizations:
    (1) Develop prospective strategies for addressing dislocation 
events, that ensure rapid access to the broad range of allowable 
assistance;
    (2) Identify strategies for the aversion of layoffs; and
    (3) Develop and maintain mechanisms for the regular exchange of 
information relating to potential dislocations, available adjustment 
assistance, and the effectiveness of rapid response strategies.
    (b) In collaboration with the appropriate State agency(ies), collect 
and analyze information related to economic dislocations, including 
potential closings and layoffs, and all available resources in the State 
for dislocated workers in order to provide an adequate basis for 
effective program management, review and evaluation of rapid response 
and layoff aversion efforts in the State.

[[Page 86]]

    (c) Participate in capacity building activities, including providing 
information about innovative and successful strategies for serving 
dislocated workers, with local areas serving smaller layoffs.
    (d) Assist in devising and overseeing strategies for:
    (1) Layoff aversion, such as prefeasibility studies of avoiding a 
plant closure through an option for a company or group, including the 
workers, to purchase the plant or company and continue it in operation;
    (2) Incumbent worker training, including employer loan programs for 
employee skill upgrading; and
    (3) Linkages with economic development activities at the Federal, 
State and local levels, including Federal Department of Commerce 
programs and available State and local business retention and 
recruitment activities.



Sec.665.330  Are the NAFTA-TAA program requirements for rapid response also 

required activities?

    The Governor must ensure that rapid response activities under WIA 
are made available to workers who, under the NAFTA Implementation Act 
(Public Law 103-182), are members of a group of workers (including those 
in any agricultural firm or subdivision of an agricultural firm) for 
which the Governor has made a preliminary finding that:
    (a) A significant number or proportion of the workers in such firm 
or an appropriate subdivision of the firm have become totally or 
partially separated, or are threatened to become totally or partially 
separated; and
    (b) Either:
    (1) The sales or production, or both, of such firm or subdivision 
have decreased absolutely; and
    (2) Imports from Mexico or Canada of articles like or directly 
competitive with those produced by such firm or subdivision have 
increased; or
    (c) There has been a shift in production by such workers' firm or 
subdivision to Mexico or Canada of articles which are produced by the 
firm or subdivision.



Sec.665.340  What is meant by ``provision of additional assistance'' in WIA 

section 134(a)(2)(A)(ii)?

    Up to 25 percent of dislocated worker funds may be reserved for 
rapid response activities. Once the State has reserved adequate funds 
for rapid response activities, such as those described in Sec. Sec.
665.310 and 665.320, the remainder of the funds may be used by the State 
to provide funds to local areas, that experience increased numbers of 
unemployed individuals due to natural disasters, plant closings, mass 
layoffs or other events, for provision of direct services to 
participants (such as intensive, training, and other services) if there 
are not adequate local funds available to assist the dislocated workers.



PART 666_PERFORMANCE ACCOUNTABILITY UNDER TITLE I OF THE WORKFORCE INVESTMENT 

ACT--Table of Contents



                 Subpart A_State Measures of Performance

Sec.
666.100 What performance indicators must be included in a State's plan?
666.110 May a Governor require additional indicators of performance?
666.120 What are the procedures for negotiating annual levels of 
          performance?
666.130 Under what conditions may a State or DOL request revisions to 
          the State negotiated levels of performance?
666.140 Which individuals receiving services are included in the core 
          indicators of performance?
666.150 What responsibility do States have to use quarterly wage record 
          information for performance accountability?

        Subpart B_Incentives and Sanctions for State Performance

666.200 Under what circumstances is a State eligible for an Incentive 
          Grant?
666.205 What are the time frames under which States submit performance 
          progress reports and apply for incentive grants?
666.210 How may Incentive Grant funds be used?
666.220 What information must be included in a State Board's application 
          for an Incentive Grant?
666.230 How does the Department determine the amounts for Incentive 
          Grant awards?
666.240 Under what circumstances may a sanction be applied to a State 
          that fails

[[Page 87]]

          to achieve negotiated levels of performance for title I?

                 Subpart C_Local Measures of Performance

666.300 What performance indicators apply to local areas?
666.310 What levels of performance apply to the indicators of 
          performance in local areas?

        Subpart D_Incentives and Sanctions for Local Performance

666.400 Under what circumstances are local areas eligible for State 
          Incentive Grants?
666.410 How may local incentive awards be used?
666.420 Under what circumstances may a sanction be applied to local 
          areas for poor performance?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49402, Aug. 11, 2000, unless otherwise noted.



                 Subpart A_State Measures of Performance



Sec.666.100  What performance indicators must be included in a State's plan?

    (a) All States submitting a State Plan under WIA title I, subtitle B 
must propose expected levels of performance for each of the core 
indicators of performance for the adult, dislocated worker and youth 
programs, respectively and the two customer satisfaction indicators.
    (1) For the Adult program, these indicators are:
    (i) Entry into unsubsidized employment;
    (ii) Retention in unsubsidized employment six months after entry 
into the employment;
    (iii) Earnings received in unsubsidized employment six months after 
entry into the employment; and
    (iv) Attainment of a recognized credential related to achievement of 
educational skills (such as a secondary school diploma or its recognized 
equivalent), or occupational skills, by participants who enter 
unsubsidized employment.
    (2) For the Dislocated Worker program, these indicators are:
    (i) Entry into unsubsidized employment;
    (ii) Retention in unsubsidized employment six months after entry 
into the employment;
    (iii) Earnings received in unsubsidized employment six months after 
entry into the employment; and
    (iv) Attainment of a recognized credential related to achievement of 
educational skills (such as a secondary school diploma or its recognized 
equivalent), or occupational skills, by participants who enter 
unsubsidized employment.
    (3) For the Youth program, these indicators are:
    (i) For eligible youth aged 14 through 18:
    (A) Attainment of basic skills goals, and, as appropriate, work 
readiness or occupational skills goals, up to a maximum of three goals 
per year;
    (B) Attainment of secondary school diplomas and their recognized 
equivalents; and
    (C) Placement and retention in postsecondary education, advanced 
training, military service, employment, or qualified apprenticeships.
    (ii) For eligible youth aged 19 through 21:
    (A) Entry into unsubsidized employment;
    (B) Retention in unsubsidized employment six months after entry into 
the employment;
    (C) Earnings received in unsubsidized employment six months after 
entry into the employment; and
    (D) Attainment of a recognized credential related to achievement of 
educational skills (such as a secondary school diploma or its recognized 
equivalent), or occupational skills, by participants who enter post-
secondary education, advanced training, or unsubsidized employment.
    (4) A single customer satisfaction measure for employers and a 
single customer satisfaction indicator for participants must be used for 
the WIA title I, subtitle B programs for adults, dislocated workers and 
youth. (WIA sec. 136(b)(2).)
    (b) After consultation with the representatives identified in WIA 
sections 136(i) and 502(b), the Departments of

[[Page 88]]

Labor and Education will issue definitions for the performance 
indicators established under title I and title II of WIA. (WIA sec. 136 
(b), (f) and (i).)



Sec.666.110  May a Governor require additional indicators of performance?

    Yes, Governors may develop additional indicators of performance for 
adults, youth and dislocated worker activities. These indicators must be 
included in the State Plan. (WIA sec. 136(b)(2)(C).)



Sec.666.120  What are the procedures for negotiating annual levels of 

performance?

    (a) We issue instructions on the specific information that must 
accompany the State Plan and that is used to review the State's expected 
levels of performance. The instructions may require that levels of 
performance for years two and three be expressed as a percentage 
improvement over the immediately preceding year's performance, 
consistent with the objective of continuous improvement.
    (b) States must submit expected levels of performance for the 
required indicators for each of the first three program years covered by 
the Plan.
    (c) The Secretary and the Governor must reach agreement on levels of 
performance for each core indicator and the customer satisfaction 
indicators. In negotiating these levels, the following must be taken 
into account:
    (1) The expected levels of performance identified in the State Plan;
    (2) The extent to which the levels of performance for each core 
indicator assist in achieving high customer satisfaction;
    (3) The extent to which the levels of performance promote continuous 
improvement and ensure optimal return on the investment of Federal 
funds; and
    (4) How the levels compare with those of other States, taking into 
account factors including differences in economic conditions, 
participant characteristics, and the proposed service mix and 
strategies.
    (d) The levels of performance agreed to under paragraph (c) of this 
section will be the State's negotiated levels of performance for the 
first three years of the State Plan. These levels will be used to 
determine whether sanctions will be applied or incentive grant funds 
will be awarded.
    (e) Before the fourth year of the State Plan, the Secretary and the 
Governor must reach agreement on levels of performance for each core 
indicator and the customer satisfaction indicators for the fourth and 
fifth years covered by the plan. In negotiating these levels, the 
factors listed in paragraph (c) of this section must be taken into 
account.
    (f) The levels of performance agreed to under paragraph (e) of this 
section will be the State negotiated levels of performance for the 
fourth and fifth years of the plan and must be incorporated into the 
State Plan.
    (g) Levels of performance for the additional indicators developed by 
the Governor, including additional indicators to demonstrate and measure 
continuous improvement toward goals identified by the State, are not 
part of the negotiations described in paragraphs (c) and (e) of this 
section. (WIA sec. 136(b)(3).)
    (h) State negotiated levels of performance may be revised in 
accordance with Sec.666.130.



Sec.666.130  Under what conditions may a State or DOL request revisions to the 

State negotiated levels of performance?

    (a) The DOL guidelines describe when and under what circumstances a 
Governor may request revisions to negotiated levels. These circumstances 
include significant changes in economic conditions, in the 
characteristics of participants entering the program, or in the services 
to be provided from when the initial plan was submitted and approved. 
(WIA sec. 136(b)(3)(A)(vi).)
    (b) The guidelines will establish the circumstances under which a 
State will be required to submit revisions under specified 
circumstances.



Sec.666.140  Which individuals receiving services are included in the core 

indicators of performance?

    (a)(1) The core indicators of performance apply to all individuals 
who are registered under 20 CFR 663.105 and 664.215 for the adult, 
dislocated worker

[[Page 89]]

and youth programs, except for those adults and dislocated workers who 
participate exclusively in self-service or informational activities. 
(WIA sec. 136(b)(2)(A).)
    (2) Self-service and informational activities are those core 
services that are made available and accessible to the general public, 
that are designed to inform and educate individuals about the labor 
market and their employment strengths, weaknesses, and the range of 
services appropriate to their situation, and that do not require 
significant staff involvement with the individual in terms of resources 
or time.
    (b) For registered participants, a standardized record that includes 
appropriate performance information must be maintained in accordance 
with WIA section 185(a)(3).
    (c) Performance will be measured on the basis of results achieved by 
registered participants, and will reflect services provided under WIA 
title I, subtitle B programs for adults, dislocated workers and youth. 
Performance may also take into account services provided to participants 
by other One-Stop partner programs and activities, to the extent that 
the local MOU provides for the sharing of participant information.



Sec.666.150  What responsibility do States have to use quarterly wage record 

information for performance accountability?

    (a) States must, consistent with State laws, use quarterly wage 
record information in measuring the progress on State and local 
performance measures. In order to meet this requirement the use of 
social security numbers from registered participants and such other 
information as is necessary to measure the progress of those 
participants through quarterly wage record information is authorized.
    (b) The State must include in the State Plan a description of the 
State's performance accountability system, and a description of the 
State's strategy for using quarterly wage record information to measure 
the progress on State and local performance measures. The description 
must identify the entities that may have access to quarterly wage record 
information for this purpose.
    (c) ``Quarterly wage record information'' means information 
regarding wages paid to an individual, the social security account 
number (or numbers, if more than one) of the individual and the name, 
address, State, and (when known) the Federal employer identification 
number of the employer paying the wages to the individual. (WIA sec. 
136(f)(2).)



        Subpart B_Incentives and Sanctions for State Performance



Sec.666.200  Under what circumstances is a State eligible for an Incentive 

Grant?

    A State is eligible to apply for an Incentive Grant if its 
performance for the immediately preceding year exceeds:
    (a) The State's negotiated levels of performance for the required 
core indicators for the adult, dislocated worker and youth programs 
under title I of WIA as well as the customer satisfaction indicators for 
WIA title I programs;
    (b) The adjusted levels of performance for title II Adult Education 
and Family Literacy programs; and
    (c) The adjusted levels of performance under section 113 of the Carl 
D. Perkins Vocational and Technical Education Act (20 U.S.C. 2301 et 
seq.). (WIA sec. 503.)



Sec.666.205  What are the time frames under which States submit performance 

progress reports and apply for incentive grants?

    (a) State performance progress reports must be filed by the due date 
established in reporting instructions issued by the Department.
    (b) Based upon the reports filed under paragraph (a) of this 
section, we will determine the amount of funds available, under WIA 
title I, to each eligible State for incentive grants, in accordance with 
the criteria of Sec.666.230. We will publish the award amounts for 
each eligible State, after consultation with the Secretary of Education, 
within ninety (90) days after the due date for performance progress 
reports established under paragraph (a) of this section.

[[Page 90]]

    (c) Within forty-five (45) days of the publication of award amounts 
under paragraph (b) of this section, States may apply for incentive 
grants in accordance with the requirements of Sec.666.220.



Sec.666.210  How may Incentive Grant funds be used?

    Incentive grant funds are awarded to States to carry out any one or 
more innovative programs under titles I or II of WIA or the Carl D. 
Perkins Vocational and Technical Education Act, regardless of which Act 
is the source of the incentive funds. (WIA sec. 503(a).)



Sec.666.220  What information must be included in a State Board's application 

for an Incentive Grant?

    (a) After consultation with the Secretary of Education, we will 
issue instructions annually which will include the amount of funds 
available to be awarded for each State and provide instructions for 
submitting applications for an Incentive Grant.
    (b) Each State desiring an incentive grant must submit to the 
Secretary an application, developed by the State Board, containing the 
following assurances:
    (1) The State legislature was consulted regarding the development of 
the application.
    (2) The application was approved by the Governor, the eligible 
agency (as defined in WIA section 203), and the State agency responsible 
for vocational and technical programs under the Carl D. Perkins 
Vocational and Technical Education Act.
    (3) The State exceeded the State negotiated levels of performance 
for title I, the levels of performance under title II and the levels for 
vocational and technical programs under the Carl D. Perkins Vocational 
and Technical Education Act. (WIA sec. 503(b).)



Sec.666.230  How does the Department determine the amounts for Incentive Grant 

awards?

    (a) We determine the total amount to be allocated from funds 
available under WIA section 174(b) for Incentive Grants taking into 
consideration such factors as:
    (1) The availability of funds under section 174(b) for technical 
assistance, demonstration and pilot projects, evaluations, and Incentive 
Grants and the needs for these activities;
    (2) The number of States that are eligible for Incentive Grants and 
their relative program formula allocations under title I;
    (3) The availability of funds under WIA section 136(g)(2) resulting 
from funds withheld for poor performance by States; and
    (4) The range of awards established in WIA section 503(c).
    (b) We will publish the award amount for eligible States, after 
consultation with the Secretary of Education, within 90 days after the 
due date, established under Sec.666.205(a), for the latest State 
performance progress report providing the annual information needed to 
determine State eligibility.
    (c) In determining the amount available to an eligible State, the 
Secretary, with the Secretary of Education, may consider such factors 
as:
    (1) The relative allocations of the eligible State compared to other 
States;
    (2) The extent to which the negotiated levels of performance were 
exceeded;
    (3) Performance improvement relative to previous years;
    (4) Changes in economic conditions, participant characteristics and 
proposed service design since the negotiated levels of performance were 
agreed to;
    (5) The eligible State's relative performance for each of the 
indicators compared to other States; and
    (6) The performance on those indicators considered most important in 
terms of accomplishing national goals established by each of the 
respective Secretaries.



Sec.666.240  Under what circumstances may a sanction be applied to a State 

that fails to achieve negotiated levels of performance for title I?

    (a) If a State fails to meet the negotiated levels of performance 
agreed to under Sec.666.120 for core indicators of performance or 
customer satisfaction indicators for the adult, dislocated worker or 
youth programs under title I

[[Page 91]]

of WIA, the Secretary must, upon request, provide technical assistance, 
as authorized under WIA sections 136(g) and 170.
    (b) If a State fails to meet the negotiated levels of performance 
for core indicators of performance or customer satisfaction indicators 
for the same program in two successive years, the amount of the 
succeeding year's allocation for the applicable program may be reduced 
by up to five percent.
    (c) The exact amount of any allocation reduction will be based upon 
the degree of failure to meet the negotiated levels of performance for 
core indicators. In making a determination of the amount, if any, of 
such a sanction, we may consider factors such as:
    (1) The State's performance relative to other States;
    (2) Improvement efforts underway;
    (3) Incremental improvement on the performance measures;
    (4) Technical assistance previously provided;
    (5) Changes in economic conditions and program design;
    (6) The characteristics of participants served compared to the 
participant characteristics described in the State Plan; and
    (7) Performance on other core indicators of performance and customer 
satisfaction indicators for that program. (WIA sec. 136(g).)
    (d) Only performance that is less than 80 percent of the negotiated 
levels will be deemed to be a failure to achieve negotiated levels of 
performance.
    (e) In accordance with 20 CFR 667.300(e), a State grant may be 
reduced for failure to submit an annual performance progress report.
    (f) A State may request review of a sanction we impose in accordance 
with the provisions of 20 CFR 667.800.



                 Subpart C_Local Measures of Performance



Sec.666.300  What performance indicators apply to local areas?

    (a) Each local workforce investment area in a State is subject to 
the same core indicators of performance and the customer satisfaction 
indicators that apply to the State under Sec.666.100(a).
    (b) In addition to the indicators described in paragraph (a) of this 
section, under Sec.666.110, the Governor may apply additional 
indicators of performance to local areas in the State. (WIA sec. 
136(c)(1).)



Sec.666.310  What levels of performance apply to the indicators of performance 

in local areas?

    (a) The Local Board and the chief elected official must negotiate 
with the Governor and reach agreement on the local levels of performance 
for each indicator identified under Sec.666.300. The levels must be 
based on the State negotiated levels of performance established under 
Sec.666.120 and take into account the factors described in paragraph 
(b) of this section.
    (b) In determining the appropriate local levels of performance, the 
Governor, Local Board and chief elected official must take into account 
specific economic, demographic and other characteristics of the 
populations to be served in the local area.
    (c) The performance levels agreed to under paragraph (a) of this 
section must be incorporated in the local plan. (WIA secs. 118(b)(3) and 
136(c).)



        Subpart D_Incentives and Sanctions for Local Performance



Sec.666.400  Under what circumstances are local areas eligible for State 

Incentive Grants?

    (a) States must use a portion of the funds reserved for Statewide 
workforce investment activities under WIA sections 128(a) and 133(a)(1) 
to provide Incentive Grants to local areas for regional cooperation 
among local boards (including local boards for a designated region, as 
described in WIA section 116(c)), for local coordination of activities 
carried out under this Act, and for exemplary performance on the local 
performance measures established under subpart C of this part.
    (b) The amount of funds used for Incentive Grants under paragraph 
(a) of this section and the criteria used for determining exemplary 
local performance levels to qualify for the incentive grants are 
determined by the Governor. (WIA sec. 134(a)(2)(B)(iii).)

[[Page 92]]



Sec.666.410  How may local incentive awards be used?

    The local incentive grant funds may be used for any activities 
allowed under WIA title I-B.



Sec.666.420  Under what circumstances may a sanction be applied to local areas 

for poor performance?

    (a) If a local area fails to meet the levels of performance agreed 
to under Sec.666.310 for the core indicators of performance or 
customer satisfaction indicators for a program in any program year, 
technical assistance must be provided. The technical assistance must be 
provided by the Governor with funds reserved for Statewide workforce 
investment activities under WIA sections 128(a) and 133(a)(1), or, upon 
the Governor's request, by the Secretary. The technical assistance may 
include the development of a performance improvement plan, a modified 
local plan, or other actions designed to assist the local area in 
improving performance.
    (b) If a local area fails to meet the levels of performance agreed 
to under Sec.666.310 for the core indicators of performance or 
customer satisfaction indicators for a program for two consecutive 
program years, the Governor must take corrective actions. The corrective 
actions may include the development of a reorganization plan under which 
the Governor:
    (1) Requires the appointment and certification of a new Local Board;
    (2) Prohibits the use of particular service providers or One-Stop 
partners that have been identified as achieving poor levels of 
performance; or
    (3) Requires other appropriate measures designed to improve the 
performance of the local area.
    (c) A local area may appeal to the Governor to rescind or revise a 
reorganization plan imposed under paragraph (b) of this section not 
later than thirty (30) days after receiving notice of the plan. The 
Governor must make a final decision within 30 days after receipt of the 
appeal. The Governor's final decision may be appealed by the Local Board 
to the Secretary under 20 CFR 667.650(b) not later than thirty (30) days 
after the local area receives the decision. The decision by the Governor 
to impose a reorganization plan becomes effective at the time it is 
issued, and remains effective unless the Secretary rescinds or revises 
the reorganization plan. Upon receipt of the appeal from the local area, 
the Secretary must make a final decision within thirty (30) days. (WIA 
sec. 136(h).)



PART 667_ADMINISTRATIVE PROVISIONS UNDER TITLE I OF THE WORKFORCE INVESTMENT 

ACT--Table of Contents



                            Subpart A_Funding

Sec.
667.100 When do Workforce Investment Act grant funds become available?
667.105 What award document authorizes the expenditure of Workforce 
          Investment Act funds under title I of the Act?
667.107 What is the period of availability for expenditure of WIA funds?
667.110 What is the Governor/Secretary Agreement?
667.120 What planning information must a State submit in order to 
          receive a formula grant?
667.130 How are WIA title I formula funds allocated to local workforce 
          investment areas?
667.135 What ``hold harmless'' provisions apply to WIA adult and youth 
          allocations?
667.140 Does a Local Board have the authority to transfer funds between 
          programs?
667.150 What reallotment procedures does the Secretary use?
667.160 What reallocation procedures must the Governors use?
667.170 What responsibility review does the Department conduct for 
          awards made under WIA title I, subtitle D?

          Subpart B_Administrative Rules, Costs and Limitations

667.200 What general fiscal and administrative rules apply to the use of 
          WIA title I funds?
667.210 What administrative cost limits apply to Workforce Investment 
          Act title I grants?
667.220 What Workforce Investment Act title I functions and activities 
          constitute the costs of administration subject to the 
          administrative cost limit?
667.250 What requirements relate to the enforcement of the Military 
          Selective Service Act?
667.255 Are there special rules that apply to veterans when income is a 
          factor in eligibility determinations?
667.260 May WIA title I funds be spent for construction?

[[Page 93]]

667.262 Are employment generating activities, or similar activities, 
          allowable under WIA title I?
667.264 What other activities are prohibited under title I of WIA?
667.266 What are the limitations related to religious activities?
667.268 What prohibitions apply to the use of WIA title I funds to 
          encourage business relocation?
667.269 What procedures and sanctions apply to violations of Sec. Sec.
          667.260 through 667.268?
667.270 What safeguards are there to ensure that participants in 
          Workforce Investment Act employment and training activities do 
          not displace other employees?
667.272 What wage and labor standards apply to participants in 
          activities under title I of WIA?
667.274 What health and safety standards apply to the working conditions 
          of participants in activities under title I of WIA?
667.275 What are a recipient's obligations to ensure nondiscrimination 
          and equal opportunity, and what are a recipient's obligations 
          with respect to religious activities?

                    Subpart C_Reporting Requirements

667.300 What are the reporting requirements for Workforce Investment Act 
          programs?

                   Subpart D_Oversight and Monitoring

667.400 Who is responsible for oversight and monitoring of WIA title I 
          grants?
667.410 What are the oversight roles and responsibilities of recipients 
          and subrecipients?

 Subpart E_Resolution of Findings From Monitoring and Oversight Reviews

667.500 What procedures apply to the resolution of findings arising from 
          audits, investigations, monitoring and oversight reviews?
667.505 How do we resolve investigative and monitoring findings?
667.510 What is the Grant Officer resolution process?

 Subpart F_Grievance Procedures, Complaints, and State Appeals Processes

667.600 What local area, State and direct recipient grievance procedures 
          must be established?
667.610 What processes do we use to review State and local grievances 
          and complaints?
667.630 How are complaints and reports of criminal fraud and abuse 
          addressed under WIA?
667.640 What additional appeal processes or systems must a State have 
          for the WIA program?
667.645 What procedures apply to the appeals of non-designation of local 
          areas?
667.650 What procedures apply to the appeals of the Governor's 
          imposition of sanctions for substantial violations or 
          performance failures by a local area?

    Subpart G_Sanctions, Corrective Actions, and Waiver of Liability

667.700 What procedure do we use to impose sanctions and corrective 
          actions on recipients and subrecipients of WIA grant funds?
667.705 Who is responsible for funds provided under title I of WIA?
667.710 What actions are required to address the failure of a local area 
          to comply with the applicable uniform administrative 
          provisions?
667.720 How do we handle a recipient's request for waiver of liability 
          under WIA section 184(d)(2)?
667.730 What is the procedure to handle a recipient's request for 
          advance approval of contemplated corrective actions?
667.740 What procedure must be used for administering the offset/
          deduction provisions at section 184(c) of the Act?

        Subpart H_Administrative Adjudication and Judicial Review

667.800 What actions of the Department may be appealed to the Office of 
          Administrative Law Judges?
667.810 What rules of procedure apply to hearings conducted under this 
          subpart?
667.820 What authority does the Administrative Law Judge have in 
          ordering relief as an outcome of an administrative hearing?
667.825 What special rules apply to reviews of NFJP and WIA INA grant 
          selections?
667.830 When will the Administrative Law Judge issue a decision?
667.840 Is there an alternative dispute resolution process that may be 
          used in place of an OALJ hearing?
667.850 Is there judicial review of a final order of the Secretary 
          issued under section 186 of the Act?
667.860 Are there other remedies available outside of the Act?

    Authority: Subtitle C of Title I, Sec. 506(c), Pub. L. 105-220, 112 
Stat. 936 (20 U.S.C. 9276(c)); Executive Order 13198, 66 FR 8497, 3 CFR 
2001 Comp., p. 750; Executive Order 13279, 67 FR 77141, 3 CFR 2002 
Comp., p. 258.

    Source: 65 FR 49421, Aug. 11, 2000, unless otherwise noted.

[[Page 94]]



                            Subpart A_Funding



Sec.667.100  When do Workforce Investment Act grant funds become available?

    (a) Program year. Except as provided in paragraph (b) of this 
section, fiscal year appropriations for programs and activities carried 
out under title I of WIA are available for obligation on the basis of a 
program year. A program year begins on July 1 in the fiscal year for 
which the appropriation is made and ends on June 30 of the following 
year.
    (b) Youth fund availability. Fiscal year appropriations for a 
program year's youth activities, authorized under chapter 4, subtitle B, 
title I of WIA, may be made available for obligation beginning on April 
1 of the fiscal year for which the appropriation is made.



Sec.667.105  What award document authorizes the expenditure of Workforce 

Investment Act funds under title I of the Act?

    (a) Agreement. All WIA title I funds that are awarded by grant, 
contract or cooperative agreement are issued under an agreement between 
the Grant Officer/Contracting Officer and the recipient. The agreement 
describes the terms and conditions applicable to the award of WIA title 
I funds.
    (b) Grant funds awarded to States. Under the Governor/Secretary 
Agreement described in Sec.667.110, each program year, the grant 
agreement described in paragraph (a) of this section will be executed 
and signed by the Governor or the Governor's designated representative 
and Secretary or the Grant Officer. The grant agreement and associated 
Notices of Obligation are the basis for Federal obligation of funds 
allotted to the States in accordance with WIA sections 127(b) and 132(b) 
for each program year.
    (c) Indian and Native American Programs. (1) Awards of grants, 
contracts or cooperative agreements for the WIA Indian and Native 
American program will be made to eligible entities on a competitive 
basis every two program years for a two-year period, in accordance with 
the provisions of 20 CFR part 668. An award for the succeeding two-year 
period may be made to the same recipient on a non-competitive basis if 
the recipient:
    (i) Has performed satisfactorily; and
    (ii) Submits a satisfactory two-year program plan for the succeeding 
two-year grant, contract or agreement period.
    (2) A grant, contract or cooperative agreement may be renewed under 
the authority of paragraph (c)(1) of this section no more than once 
during any four-year period for any single recipient.
    (d) National Farmworker Jobs programs. (1) Awards of grants or 
contracts for the National Farmworker Jobs program will be made to 
eligible entities on a competitive basis every two program years for a 
two-year period, in accordance with the provisions of 20 CFR part 669. 
An award for the succeeding two-year period may be made to the same 
recipient if the recipient:
    (i) Has performed satisfactorily; and
    (ii) Submits a satisfactory two-year program plan for the succeeding 
two-year period.
    (2) A grant or contract may be renewed under the authority of 
paragraph (d)(1) of this section no more than once during any four-year 
period for any single recipient.
    (e) Job Corps. (1) Awards of contracts will be made on a competitive 
basis between the Contracting Officer and eligible entities to operate 
contract centers and provide operational support services.
    (2) The Secretary may enter into interagency agreements with Federal 
agencies for funding, establishment, and operation of Civilian 
Conservation Centers for Job Corps programs.
    (f) [Reserved]
    (g) Awards under WIA sections 171 and 172. (1) Awards of grants, 
contracts or cooperative agreements will be made to eligible entities 
for programs or activities authorized under WIA sections 171 or 172. 
These funds are for:
    (i) Demonstration;
    (ii) Pilot;
    (iii) Multi-service;
    (iv) Research;
    (v) Multi-State projects; and
    (vi) Evaluations
    (2) Grants and contracts under paragraphs (g)(1)(i) and (ii) of this 
section

[[Page 95]]

will be awarded on a competitive basis, except that a noncompetitive 
award may be made in the case of a project that is funded jointly with 
other public or private entities that provide a portion of the funding.
    (3) Contracts and grants under paragraphs (g)(1)(iii), (iv), and (v) 
of this section in amounts that exceed $100,000 will be awarded on a 
competitive basis, except that a noncompetitive award may be made in the 
case of a project that is funded jointly with other public or private 
sector entities that provide a substantial portion of the assistance 
under the grant or contract for the project.
    (4) Grants or contracts for carrying out projects in paragraphs 
(g)(1)(iii), (iv), and (v) of this section may not be awarded to the 
same organization for more than three consecutive years, unless the 
project is competitively reevaluated within that period.
    (5) Entities with nationally recognized expertise in the methods, 
techniques and knowledge of workforce investment activities will be 
provided priority in awarding contracts or grants for the projects under 
paragraphs (g)(1)(iii), (iv), and (v) of this section.
    (6) A peer review process will be used for projects under paragraphs 
(g)(1)(iii), (iv), and (v) of this section for grants that exceed 
$500,000, and to designate exemplary and promising programs.
    (h) Termination. Each grant terminates when the period of fund 
availability has expired. The grant must be closed in accordance with 
the closeout provisions at 29 CFR 95.71 or 97.50, as appropriate.

[65 FR 49421, Aug. 11, 2000, as amended at 71 FR 35525, June 21, 2006]



Sec.667.107  What is the period of availability for expenditure of WIA funds?

    (a) Grant funds expended by States. Funds allotted to States under 
WIA sections 127(b) and 132(b) for any program year are available for 
expenditure by the State receiving the funds only during that program 
year and the two succeeding program years.
    (b) Grant funds expended by local areas. (1) Funds allocated by a 
State to a local area under WIA sections 128(b) and 133(b), for any 
program year are available for expenditure only during that program year 
and the succeeding program year.
    (2) Funds which are not expended by a local area in the two-year 
period described in paragraph (b)(1) of this section, must be returned 
to the State. Funds so returned are available for expenditure by State 
and local recipients and subrecipients only during the third program 
year of availability. These funds may:
    (i) Be used for Statewide projects, or
    (ii) Be distributed to other local areas which had fully expended 
their allocation of funds for the same program year within the two-year 
period.
    (c) Job Corps. Funds obligated for any program year for any Job 
Corps activity carried out under title I, subtitle C, of WIA may be 
expended during that program year and the two succeeding program years.
    (d) Funds awarded under WIA sections 171 and 172. Funds obligated 
for any program year for a program or activity authorized under sections 
171 or 172 of WIA remain available until expended.
    (e) Other programs under title I of WIA. For all other grants, 
contracts and cooperative agreements issued under title I of WIA the 
period of availability for expenditure is set in the terms and 
conditions of the award document.



Sec.667.110  What is the Governor/Secretary Agreement?

    (a) To establish a continuing relationship under the Act, the 
Governor and the Secretary will enter into a Governor/Secretary 
Agreement. The Agreement will consist of a statement assuring that the 
State will comply with:
    (1) The Workforce Investment Act and all applicable rules and 
regulations, and
    (2) The Wagner-Peyser Act and all applicable rules and regulations.
    (b) The Governor/Secretary Agreement may be modified, revised or 
terminated at any time, upon the agreement of both parties.

[[Page 96]]



Sec.667.120  What planning information must a State submit in order to receive 

a formula grant?

    Each State seeking financial assistance under WIA sections 127 
(youth) or 132 (adults and dislocated workers) or under the Wagner-
Peyser Act must submit a single State Plan. The requirements for the 
plan content and the plan review process are described in WIA section 
112, Wagner-Peyser Act section 8, and 20 CFR 661.220, 661.240 and 
652.211 through 652.214.



Sec.667.130  How are WIA title I formula funds allocated to local workforce 

investment areas?

    (a) General. The Governor must allocate WIA formula funds allotted 
for services to youth, adults and dislocated workers in accordance with 
WIA sections 128 and 133, and this section.
    (1) State Boards must assist Governors in the development of any 
discretionary within-State allocation formulas. (WIA sec. 111(d)(5).)
    (2) Within-State allocations must be made:
    (i) In accordance with the allocation formulas contained in WIA 
sections 128(b) and 133(b) and in the State workforce investment plan, 
and
    (ii) After consultation with chief elected officials in each of the 
workforce investment areas.
    (b) State reserve. (1) Of the WIA formula funds allotted for 
services to youth, adults and dislocated workers, the Governor must 
reserve funds from each of these sources for Statewide workforce 
investment activities. In making these reservations, the Governor may 
reserve up to fifteen (15) percent from each of these sources. Funds 
reserved under this paragraph may be combined and spent on Statewide 
employment and training activities, for adults and dislocated workers, 
and Statewide youth activities, as described in 20 CFR 665.200 and 
665.210, without regard to the funding source of the reserved funds.
    (2) The Governor must reserve a portion of the dislocated worker 
funds for Statewide rapid response activities, as described in WIA 
section 134(a)(2)(A) and 20 CFR 665.310 through 665.330. In making this 
reservation, the Governor may reserve up to twenty-five (25) percent of 
the dislocated worker funds.
    (c) Youth allocation formula. (1) Unless the Governor elects to 
distribute funds in accordance with the discretionary allocation formula 
described in paragraph (c)(2) of this section, the remainder of youth 
funds not reserved under paragraph (b)(1) of this section must be 
allocated:
    (i) 33\1/3\ percent on the basis of the relative number of 
unemployed individuals in areas of substantial unemployment in each 
workforce investment area, compared to the total number of unemployed 
individuals in all areas of substantial unemployment in the State;
    (ii) 33\1/3\ percent on the basis of the relative excess number of 
unemployed individuals in each workforce investment area, compared to 
the total excess number of unemployed individuals in the State; and
    (iii) 33\1/3\ percent on the basis of the relative number of 
disadvantaged youth in each workforce investment area, compared to the 
total number of disadvantaged youth in the State. (WIA sec. 
128(b)(2)(A)(i))
    (2) Discretionary youth allocation formula. In lieu of making the 
formula allocation described in paragraph (c)(1) of this section, the 
State may allocate youth funds under a discretionary formula. Under that 
formula, the State must allocate a minimum of 70 percent of youth funds 
not reserved under paragraph (b)(1) of this section on the basis of the 
formula in paragraph (c)(1) of this section, and may allocate up to 30 
percent on the basis of a formula that:
    (i) Incorporates additional factors (other than the factors 
described in paragraph (c)(1) of this section) relating to:
    (A) Excess youth poverty in urban, rural and suburban local areas; 
and
    (B) Excess unemployment above the State average in urban, rural and 
suburban local areas; and
    (ii) Was developed by the State Board and approved by the Secretary 
of Labor as part of the State workforce investment plan. (WIA sec. 
128(b)(3).)
    (d) Adult allocation formula. (1) Unless the Governor elects to 
distribute funds in accordance with the discretionary

[[Page 97]]

allocation formula described in paragraph (d)(2) of this section, the 
remainder of adult funds not reserved under paragraph (b)(1) of this 
section must be allocated:
    (i) 33\1/3\ percent on the basis of the relative number of 
unemployed individuals in areas of substantial unemployment in each 
workforce investment area, compared to the total number of unemployed 
individuals in areas of substantial unemployment in the State;
    (ii) 33\1/3\ percent on the basis of the relative excess number of 
unemployed individuals in each workforce investment area, compared to 
the total excess number of unemployed individuals in the State; and
    (iii) 33\1/3\ percent on the basis of the relative number of 
disadvantaged adults in each workforce investment area, compared to the 
total number of disadvantaged adults in the State. (WIA sec. 
133(b)(2)(A)(i))
    (2) Discretionary adult allocation formula. In lieu of making the 
formula allocation described in paragraph (d)(1) of this section, the 
State may allocate adult funds under a discretionary formula. Under that 
formula, the State must allocate a minimum of 70 percent of adult funds 
on the basis of the formula in paragraph (d)(1) of this section, and may 
allocate up to 30 percent on the basis of a formula that:
    (i) Incorporates additional factors (other than the factors 
described in paragraph (d)(1) of this section) relating to:
    (A) Excess poverty in urban, rural and suburban local areas; and
    (B) Excess unemployment above the State average in urban, rural and 
suburban local areas; and
    (ii) Was developed by the State Board and approved by the Secretary 
of Labor as part of the State workforce investment plan. (WIA sec. 
133(b)(3).)
    (e) Dislocated worker allocation formula. (1) The remainder of 
dislocated worker funds not reserved under paragraph (b)(1) or (b)(2) of 
this section must be allocated on the basis of a formula prescribed by 
the Governor that distributes funds in a manner that addresses the 
State's worker readjustment assistance needs. Funds so distributed must 
not be less than 60 percent of the State's formula allotment.
    (2)(i) The Governor's dislocated worker formula must use the most 
appropriate information available to the Governor, including information 
on:
    (A) Insured unemployment data,
    (B) Unemployment concentrations,
    (C) Plant closings and mass layoff data,
    (D) Declining industries data,
    (E) Farmer-rancher economic hardship data, and
    (F) Long-term unemployment data.
    (ii) The State Plan must describe the data used for the formula and 
the weights assigned, and explain the State's decision to use other 
information or to omit any of the information sources set forth in 
paragraph (e)(2)(i) of this section.
    (3) The Governor may not amend the dislocated worker formula more 
than once for any program year.
    (4)(i) Dislocated worker funds initially reserved by the Governor 
for Statewide rapid response activities in accordance with paragraph 
(b)(2) of this section may be:
    (A) Distributed to local areas, and
    (B) Used to operate projects in local areas in accordance with the 
requirements of WIA section 134(a)(2)(A) and 20 CFR 665.310 through 
665.330.
    (ii) The State Plan must describe the procedures for any 
distribution to local areas, including the timing and process for 
determining whether a distribution will take place.



Sec.667.135  What ``hold harmless'' provisions apply to WIA adult and youth 

allocations?

    (a)(1) For the first two fiscal years after the date on which a 
local area is designated under section 116 of WIA, the State may elect 
to apply the ``hold harmless'' provisions specified in paragraph (b) of 
this section to local area allocations of WIA youth funds under Sec.
667.130(c) and to allocations of WIA adult funds under Sec.667.130(d).
    (2) Effective at the end of the second full fiscal year after the 
date on which a local area is designated under section 116 of WIA the 
State must apply the ``hold harmless'' specified in paragraph (b) of 
this section to local area allocations of WIA youth funds under Sec.
667.130(c) and to allocations of WIA adult funds under Sec.667.130(d).

[[Page 98]]

    (3) There are no ``hold harmless'' provisions that apply to local 
area allocations of WIA dislocated worker funds.
    (b)(1) If a State elects to apply a ``hold-harmless'' under 
paragraph (a)(1) of this section, a local area must not receive an 
allocation amount for a fiscal year that is less than 90 percent of the 
average allocation of the local area for the two preceding fiscal years.
    (2) In applying the ``hold harmless'' under paragraph (a)(2) of this 
section, a local area must not receive an allocation amount for a fiscal 
year that is less than 90 percent of the average allocation of the local 
area for the two preceding fiscal years.
    (3) Amounts necessary to increase allocations to local areas must be 
obtained by ratably reducing the allocations to be made to other local 
areas.
    (4) If the amounts of WIA funds appropriated in a fiscal year are 
not sufficient to provide the amount specified in paragraph (b)(1) of 
this section to all local areas, the amounts allocated to each local 
area mustbe ratably reduced. (WIA secs. 128(b)(2)(A)(ii), 
133(b)(2)(A)(ii), 506.)



Sec.667.140  Does a Local Board have the authority to transfer funds between 

programs?

    (a) A Local Board may transfer up to 20 percent of a program year 
allocation for adult employment and training activities, and up to 20 
percent of a program year allocation for dislocated worker employment 
and training activities between the two programs.
    (b) Before making any such transfer, a Local Board must obtain the 
Governor's approval.
    (c) Local Boards may not transfer funds to or from the youth 
program.



Sec.667.150  What reallotment procedures does the Secretary use?

    (a) The first reallotment of funds among States will occur during PY 
2001 based on obligations in PY 2000.
    (b) The Secretary determines, during the first quarter of the 
program year, whether a State has obligated its required level of at 
least 80 percent of the funds allotted under WIA sections 127 and 132 
for programs serving youth, adults, and dislocated workers for the prior 
year, as separately determined for each of the three funding streams. 
Unobligated balances are determined based on allotments adjusted for any 
allowable transfer between the adult and dislocated worker funding 
streams. The amount to be recaptured from each State for reallotment, if 
any, is based on State obligations of the funds allotted to each State 
under WIA sections 127 and 132 for programs serving youth, adults, or 
dislocated workers, less any amount reserved (up to 5 percent at the 
State level and up to 10 percent at the local level) for the costs of 
administration. This amount, if any, is separately determined for each 
funding stream.
    (c) The Secretary reallots youth, adult and dislocated worker funds 
among eligible States in accordance with the provisions of WIA sections 
127(c) and 132(c), respectively. To be eligible to receive a reallotment 
of youth, adult, or dislocated worker funds under the reallotment 
procedures, a State must have obligated at least 80 percent of the prior 
program year's allotment, less any amount reserved for the costs of 
administration of youth, adult, or dislocated worker funds. A State's 
eligibility to receive a reallotment is separately determined for each 
funding stream.
    (d) The term ``obligation'' is defined at 20 CFR 660.300. For 
purposes of this section, the Secretary will also treat as State 
obligations:
    (1) Amounts allocated by the State, under WIA sections 128(b) and 
133(b), to the single State local area if the State has been designated 
as a single local area under WIA section 116(b) or to a balance of State 
local area administered by a unit of the State government, and
    (2) Inter-agency transfers and other actions treated by the State as 
encumbrances against amounts reserved by the State under WIA sections 
128(a) and 133(a) for Statewide workforce investment activities.



Sec.667.160  What reallocation procedures must the Governors use?

    (a) The Governor may reallocate youth, adult, and dislocated worker 
funds among local areas within the State in accordance with the 
provisions of sections 128(c) and 133(c) of the

[[Page 99]]

Act. If the Governor chooses to reallocate funds, the provisions in 
paragraphs (b) and (c) of this section apply.
    (b) For the youth, adult and dislocated worker programs, the amount 
to be recaptured from each local area for purposes of reallocation, if 
any, must be based on the amount by which the prior year's unobligated 
balance of allocated funds exceeds 20 percent of that year's allocation 
for the program, less any amount reserved (up to 10 percent) for the 
costs of administration. Unobligated balances must be determined based 
on allocations adjusted for any allowable transfer between funding 
streams. This amount, if any, must be separately determined for each 
funding stream.
    (c) To be eligible to receive youth, adult or dislocated worker 
funds under the reallocation procedures, a local area must have 
obligated at least 80 percent of the prior program year's allocation, 
less any amount reserved (up to 10 percent) for the costs of 
administration, for youth, adult, or dislocated worker activities, as 
separately determined. A local area's eligibility to receive a 
reallocation must be separately determined for each funding stream.



Sec.667.170  What responsibility review does the Department conduct for awards 

made under WIA title I, subtitle D?

    (a) Before final selection as a potential grantee, we conduct a 
review of the available records to assess the organization's overall 
responsibility to administer Federal funds. As part of this review, we 
may consider any information that has come to our attention and will 
consider the organization's history with regard to the management of 
other grants, including DOL grants. The failure to meet any one 
responsibility test, except for those listed in paragraphs (a)(1) and 
(a)(2) of this section, does not establish that the organization is not 
responsible unless the failure is substantial or persistent (for two or 
more consecutive years). The responsibility tests include:
    (1) The organization's efforts to recover debts (for which three 
demand letters have been sent) established by final agency action have 
been unsuccessful, or that there has been failure to comply with an 
approved repayment plan;
    (2) Established fraud or criminal activity of a significant nature 
within the organization.
    (3) Serious administrative deficiencies that we identify, such as 
failure to maintain a financial management system as required by Federal 
regulations;
    (4) Willful obstruction of the audit process;
    (5) Failure to provide services to applicants as agreed to in a 
current or recent grant or to meet applicable performance standards;
    (6) Failure to correct deficiencies brought to the grantee's 
attention in writing as a result of monitoring activities, reviews, 
assessments, or other activities;
    (7) Failure to return a grant closeout package or outstanding 
advances within 90 days of the grant expiration date or receipt of 
closeout package, whichever is later, unless an extension has been 
requested and granted; final billings reflecting serious cost category 
or total budget cost overrun;
    (8) Failure to submit required reports;
    (9) Failure to properly report and dispose of government property as 
instructed by DOL;
    (10) Failure to have maintained effective cash management or cost 
controls resulting in excess cash on hand;
    (11) Failure to ensure that a subrecipient complies with its OMB 
Circular A-133 audit requirements specified at Sec.667.200(b);
    (12) Failure to audit a subrecipient within the required period;
    (13) Final disallowed costs in excess of five percent of the grant 
or contract award if, in the judgement of the grant officer, the 
disallowances are egregious findings and;
    (14) Failure to establish a mechanism to resolve a subrecipient's 
audit in a timely fashion.
    (b) This responsibility review is independent of the competitive 
process. Applicants which are determined to be not responsible will not 
be selected as potential grantees irrespective of their standing in the 
competition.

[[Page 100]]



          Subpart B_Administrative Rules, Costs and Limitations



Sec.667.200  What general fiscal and administrative rules apply to the use of 

WIA title I funds?

    (a) Uniform fiscal and administrative requirements. (1) Except as 
provided in paragraphs (a)(3) through (6) of this section, State, local, 
and Indian tribal government organizations that receive grants or 
cooperative agreements under WIA title I must follow the common rule 
``Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments'' which is codified at 29 CFR 
part 97.
    (2) Except as provided in paragraphs (a)(3) through (7) of this 
section, institutions of higher education, hospitals, other non-profit 
organizations, and commercial organizations must the follow the common 
rule implementing OMB Circular A-110 which is codified at 2 CFR part 215 
and 29 CFR part 95.
    (3) In addition to the requirements at 29 CFR 95.48 or 29 CFR 
97.36(i) (as appropriate), all procurement contracts and other 
transactions between Local Boards and units of State or local 
governments must be conducted only on a cost reimbursement basis. No 
provision for profit is allowed. (WIA sec. 184(a)(3)(B).)
    (4) In addition to the requirements at 29 CFR 95.42 or 29 CFR 
97.36(b)(3) (as appropriate), which address codes of conduct and 
conflict of interest issues related to employees:
    (i) A State Board member or a Local Board member or a Youth Council 
member must neither cast a vote on, nor participate in any decision-
making capacity, on the provision of services by such member (or any 
organization which that member directly represents), nor on any matter 
which would provide any direct financial benefit to that member or a 
member of his immediate family.
    (ii) Neither membership on the State Board, the Local Board, the 
Youth Council nor the receipt of WIA funds to provide training and 
related services, by itself, violates these conflict of interest 
provisions.
    (5) The addition method, described at 29 CFR 95.24 or 29 CFR 
97.25(g)(2) (as appropriate), must be used for the all program income 
earned under WIA title I grants. When the cost of generating program 
income has been charged to the program, the gross amount earned must be 
added to the WIA program. However, the cost of generating program income 
must be subtracted from the amount earned to establish the net amount of 
program income available for use under the grants when these costs have 
not been charged to the WIA program.
    (6) Any excess of revenue over costs incurred for services provided 
by a governmental or non-profit entity must be included in program 
income. (WIA sec. 195(7)(A) and (B).)
    (7) Interest income earned on funds received under WIA title I must 
be included in program income. (WIA sec. 195(7)(B)(iii).)
    (8) On a fee-for-service basis, employers may use local area 
services, facilities, or equipment funded under title I of WIA to 
provide employment and training activities to incumbent workers:
    (i) When the services, facilities, or equipment are not being used 
by eligible participants;
    (ii) If their use does not affect the ability of eligible 
participants to use the services, facilities, or equipment; and
    (iii) If the income generated from such fees is used to carry out 
programs authorized under this title.
    (b) Audit requirements. (1) All governmental and non-profit 
organizations must follow the audit requirements of OMB Circular A-133. 
These requirements are found at 29 CFR 97.26 for governmental 
organizations and at 29 CFR 95.26 for institutions of higher education, 
hospitals, and other non-profit organizations.
    (2)(i) We are responsible for audits of commercial organizations 
which are direct recipients of Federal financial assistance under WIA 
title I.
    (ii) Commercial organizations which are subrecipients under WIA 
title I and which expend more than the minimum level specified in OMB 
Circular A-133 ($300,000 ($500,000 for years ending after December 21, 
2003)) must have either an organization-wide audit conducted in 
accordance with A-133 or a program

[[Page 101]]

specific financial and compliance audit.
    (c) Allowable costs/cost principles. All recipients and 
subrecipients must follow the Federal allowable cost principles that 
apply to their kind of organizations. The DOL regulations at 29 CFR 
95.27 and 29 CFR 97.22 identify the Federal principles for determining 
allowable costs which each kind of recipient and subrecipient must 
follow. The applicable Federal principles for each kind of recipient are 
described in paragraphs (c)(1) through (5) of this section; all 
recipients must comply with paragraphs (c)(6) and (c)(7) of this 
section. For those selected items of cost requiring prior approval, the 
authority to grant or deny approval is delegated to the Governor for 
programs funded under sections 127 or 132 of the Act.
    (1) Allowable costs for State, local, and Indian tribal government 
organizations must be determined under OMB Circular A-87, ``Cost 
Principles for State, Local and Indian Tribal Governments.''
    (2) Allowable costs for non-profit organizations must be determined 
under OMB Circular A-122, ``Cost Principles for Non-Profit 
Organizations.''
    (3) Allowable costs for institutions of higher education must be 
determined under OMB Circular A-21, ``Cost Principles for Educational 
Institutions.''
    (4) Allowable costs for hospitals must be determined in accordance 
under appendix E of 45 CFR part 74, ``Principles for Determining Costs 
Applicable to Research and Development Under Grants and Contracts with 
Hospitals.''
    (5) Allowable costs for commercial organizations and those non-
profit organizations listed in Attachment C to OMB Circular A-122 must 
be determined under the provisions of the Federal Acquisition Regulation 
(FAR), at 48 CFR part 31.
    (6) For all types of entities, legal expenses for the prosecution of 
claims against the Federal Government, including appeals to an 
Administrative Law Judge, are unallowable.
    (d) Government-wide debarment and suspension, and government-wide 
drug-free workplace requirements. All WIA title I grant recipients and 
subrecipients must comply with the government-wide requirements for 
debarment and suspension, and the government-wide requirements for a 
drug-free workplace, codified at 29 CFR part 98.
    (e) Restrictions on lobbying. All WIA title I grant recipients and 
subrecipients must comply with the restrictions on lobbying which are 
codified in the DOL regulations at 29 CFR part 93.
    (f) Nondiscrimination. All WIA title I recipients, as the term is 
defined in 29 CFR 37.4, must comply with the nondiscrimination and equal 
opportunity provisions of WIA section 188 and its implementing 
regulations found at 29 CFR part 37. Information on the handling of 
discrimination complaints by participants and other interested parties 
may be found in 29 CFR 37.70 through 37.80, and in Sec.667.600(g).
    (g) Nepotism. (1) No individual may be placed in a WIA employment 
activity if a member of that person's immediate family is directly 
supervised by or directly supervises that individual.
    (2) To the extent that an applicable State or local legal 
requirement regarding nepotism is more restrictive than this provision, 
such State or local requirement must be followed.

[65 FR 49421, Aug. 11, 2000, as amended at 71 FR 35523, June 21, 2006]



Sec.667.210  What administrative cost limits apply to Workforce Investment Act 

title I grants?

    (a) Formula grants to States:
    (1) As part of the 15 percent that a State may reserve for Statewide 
activities, the State may spend up to five percent (5%) of the amount 
allotted under sections 127(b)(1), 132(b)(1) and 132(b)(2) of the Act 
for the administrative costs of Statewide workforce investment 
activities.
    (2) Local area expenditures for administrative purposes under WIA 
formula grants are limited to no more than ten percent (10%) of the 
amount allocated to the local area under sections 128(b) and 133(b) of 
the Act.
    (3) Neither the five percent (5%) of the amount allotted that may be 
reserved for Statewide administrative costs nor the ten percent (10%) of 
the amount allotted that may be reserved for local administrative costs 
needs to be allocated back to the individual funding streams.

[[Page 102]]

    (b) Limits on administrative costs for programs operated under 
subtitle D of title I will be identified in the grant or contract award 
document.
    (c) In a One-Stop environment, administrative costs borne by other 
sources of funds, such as the Wagner-Peyser Act, are not included in the 
administrative cost limit calculation. Each program's administrative 
activities area chargeable to its own grant and subject to its own 
administrative cost limitations.



Sec.667.220  What Workforce Investment Act title I functions and activities 

constitute the costs of administration subject to the administrative cost 

limit?

    (a) The costs of administration are that allocable portion of 
necessary and reasonable allowable costs of State and local workforce 
investment boards, direct recipients, including State grant recipients 
under subtitle B of title I and recipients of awards under subtitle D of 
title I, as well as local grant recipients, local grant subrecipients, 
local fiscal agents and one-stop operators that are associated with 
those specific functions identified in paragraph (b) of this section and 
which are not related to the direct provision of workforce investment 
services, including services to participants and employers. These costs 
can be both personnel and non-personnel and both direct and indirect.
    (b) The costs of administration are the costs associated with 
performing the following functions:
    (1) Performing the following overall general administrative 
functions and coordination of those functions under WIA title I:
    (i) Accounting, budgeting, financial and cash management functions;
    (ii) Procurement and purchasing functions;
    (iii) Property management functions;
    (iv) Personnel management functions;
    (v) Payroll functions;
    (vi) Coordinating the resolution of findings arising from audits, 
reviews, investigations and incident reports;
    (vii) Audit functions;
    (viii) General legal services functions; and
    (ix) Developing systems and procedures, including information 
systems, required for these administrative functions;
    (2) Performing oversight and monitoring responsibilities related to 
WIA administrative functions;
    (3) Costs of goods and services required for administrative 
functions of the program, including goods and services such as rental or 
purchase of equipment, utilities, office supplies, postage, and rental 
and maintenance of office space;
    (4) Travel costs incurred for official business in carrying out 
administrative activities or the overall management of the WIA system; 
and
    (5) Costs of information systems related to administrative functions 
(for example, personnel, procurement, purchasing, property management, 
accounting and payroll systems) including the purchase, systems 
development and operating costs of such systems.
    (c)(1) Awards to subrecipients or vendors that are solely for the 
performance of administrative functions are classified as administrative 
costs.
    (2) Personnel and related non-personnel costs of staff who perform 
both administrative functions specified in paragraph (b) of this section 
and programmatic services or activities must be allocated as 
administrative or program costs to the benefitting cost objectives/
categories based on documented distributions of actual time worked or 
other equitable cost allocation methods.
    (3) Specific costs charged to an overhead or indirect cost pool that 
can be identified directly as a program cost are to be charged as a 
program cost. Documentation of such charges must be maintained.
    (4) Except as provided at paragraph (c)(1), all costs incurred for 
functions and activities of subrecipients and vendors are program costs.
    (5) Costs of the following information systems including the 
purchase, systems development and operating (e.g., data entry) costs are 
charged to the program category:
    (i) Tracking or monitoring of participant and performance 
information;
    (ii) Employment statistics information, including job listing 
information,

[[Page 103]]

job skills information, and demand occupation information;
    (iii) Performance and program cost information on eligible providers 
of training services, youth activities, and appropriate education 
activities;
    (iv) Local area performance information; and
    (v) Information relating to supportive services and unemployment 
insurance claims for program participants;
    (6) Continuous improvement activities are charged to administration 
or program category based on the purpose or nature of the activity to be 
improved. Documentation of such charges must be maintained.



Sec.667.250  What requirements relate to the enforcement of the Military 

Selective Service Act?

    The requirements relating to the enforcement of the Military 
Selective Service Act are found at WIA section 189(h).



Sec.667.255  Are there special rules that apply to veterans when income is a 

factor in eligibility determinations?

    Yes, under 38 U.S.C. 4213, when past income is an eligibility 
determinant for Federal employment or training programs, any amounts 
received as military pay or allowances by any person who served on 
active duty, and certain other specified benefits must be disregarded. 
This applies when determining if a person is a ``low-income individual'' 
for eligibility purposes, (for example, in the WIA youth, Job Corps, or 
NFJP programs) and applies if income is used as a factor in applying the 
priority provision, under 20 CFR 663.600, when WIA adult funds are 
limited. Questions regarding the application of 38 U.S.C. 4213 should be 
directed to the Veterans Employment and Training Service.



Sec.667.260  May WIA title I funds be spent for construction?

    WIA title I funds must not be spent on construction or purchase of 
facilities or buildings except:
    (a) To meet a recipient's, as the term is defined in 29 CFR 37.4, 
obligation to provide physical and programmatic accessibility and 
reasonable accommodation, as required by section 504 of the 
Rehabilitation Act of 1973, as amended, and the Americans with 
Disabilities Act of 1990, as amended;
    (b) To fund repairs, renovations, alterations and capital 
improvements of property, including:
    (1) SESA real property, identified at WIA section 193, using a 
formula that assesses costs proportionate to space utilized;
    (2) JTPA owned property which is transferred to WIA title I 
programs;
    (c) Job Corps facilities, as authorized by WIA section 160(3)(B); 
and
    (d) To fund disaster relief employment on projects for demolition, 
cleaning, repair, renovation, and reconstruction of damaged and 
destroyed structures, facilities, and lands located within a disaster 
area. (WIA sec. 173(d).)



Sec.667.262  Are employment generating activities, or similar activities, 

allowable under WIA title I?

    (a) Under WIA section 181(e), WIA title I funds may not be spent on 
employment generating activities, economic development, and other 
similar activities, unless they are directly related to training for 
eligible individuals. For purposes of this section, employer outreach 
and job development activities are directly related to training for 
eligible individuals.
    (b) These employer outreach and job development activities include:
    (1) Contacts with potential employers for the purpose of placement 
of WIA participants;
    (2) Participation in business associations (such as chambers of 
commerce); joint labor management committees, labor associations, and 
resource centers;
    (3) WIA staff participation on economic development boards and 
commissions, and work with economic development agencies, to:
    (i) Provide information about WIA programs,
    (ii) Assist in making informed decisions about community job 
training needs, and
    (iii) Promote the use of first source hiring agreements and 
enterprise zone vouchering services,

[[Page 104]]

    (4) Active participation in local business resource centers 
(incubators) to provide technical assistance to small and new business 
to reduce the rate of business failure;
    (5) Subscriptions to relevant publications;
    (6) General dissemination of information on WIA programs and 
activities;
    (7) The conduct of labor market surveys;
    (8) The development of on-the-job training opportunities; and
    (9) Other allowable WIA activities in the private sector. (WIA sec. 
181(e).)



Sec.667.264  What other activities are prohibited under title I of WIA?

    (a) WIA title I funds must not be spent on:
    (1) The wages of incumbent employees during their participation in 
economic development activities provided through a Statewide workforce 
investment system, (WIA sec. 181(b)(1).);
    (2) Public service employment, except to provide disaster relief 
employment, as specifically authorized in section 173(d) of WIA, (WIA 
sec. 195(10));
    (3) Expenses prohibited under any other Federal, State or local law 
or regulation.
    (b) WIA formula funds available to States and local areas under 
subtitle B, title I of WIA must not be used for foreign travel. (WIA 
sec. 181(e).)



Sec.667.266  What are the limitations related to religious activities?

    (a) Limitations related to sectarian activities are set forth at WIA 
section 188(a)(3) and 29 CFR 37.6(f).
    (b)(1) 29 CFR part 2, subpart D governs the circumstances under 
which DOL support, including WIA Title I financial assistance, may be 
used to employ or train participants in religious activities. Under that 
subpart, such assistance may be used for such employment or training 
only when the assistance is provided indirectly within the meaning of 
the Establishment Clause of the U.S. Constitution, and not when the 
assistance is provided directly. As explained in that subpart, 
assistance provided through an Individual Training Account is generally 
considered indirect, and other mechanisms may also be considered 
indirect. See also 20 CFR 667.275 and 29 CFR 37.6(f)(1). 29 CFR part 2, 
subpart D also contains requirements related to equal treatment in 
Department of Labor programs for religious organizations, and to 
protecting the religious liberty of Department of Labor social service 
providers and beneficiaries.
    (2) Limitations on the employment of participants under WIA Title I 
to carry out the construction, operation, or maintenance of any part of 
any facility used or to be used for religious instruction or as a place 
for religious worship are described at 29 CFR 37.6(f)(2).

[65 FR 49421, Aug. 11, 2000, as amended at 69 FR 41891, July 12, 2004]



Sec.667.268  What prohibitions apply to the use of WIA title I funds to 

encourage business relocation?

    (a) WIA funds may not be used or proposed to be used for:
    (1) The encouragement or inducement of a business, or part of a 
business, to relocate from any location in the United States, if the 
relocation results in any employee losing his or her job at the original 
location;
    (2) Customized training, skill training, or on-the-job training or 
company specific assessments of job applicants or employees of a 
business or a part of a business that has relocated from any location in 
the United States, until the company has operated at that location for 
120 days, if the relocation has resulted in any employee losing his or 
her jobs at the original location.
    (b) Pre-award review. To verify that an establishment which is new 
or expanding is not, in fact, relocating employment from another area, 
standardized pre-award review criteria developed by the State must be 
completed and documented jointly by the local area with the 
establishment as a prerequisite to WIA assistance.
    (1) The review must include names under which the establishment does 
business, including predecessors and successors in interest; the name, 
title, and address of the company official certifying the information, 
and whether WIA assistance is sought in connection with past or 
impending job losses at other facilities, including a review of whether 
WARN notices relating to the employer have been filed.

[[Page 105]]

    (2) The review may include consultations with labor organizations 
and others in the affected local area(s). (WIA sec. 181(d).)



Sec.667.269  What procedures and sanctions apply to violations of Sec. 

Sec.667.260 through 667.268?

    (a) We will promptly review and take appropriate action on alleged 
violations of the provisions relating to:
    (1) Employment generating activities (Sec.667.262);
    (2) Other prohibited activities (Sec.667.264);
    (3) The limitation related to sectarian activities (Sec.667.266);
    (4) The use of WIA title I funds to encourage business relocation 
(Sec.667.268).
    (b) Procedures for the investigation and resolution of the 
violations are provided for under the Grant Officer's resolution process 
at Sec.667.510. Sanctions and remedies are provided for under WIA 
section 184(c) for violations of the provisions relating to:
    (1) Construction (Sec.667.260);
    (2) Employment generating activities (Sec.667.262);
    (3) Other prohibited activities (Sec.667.264); and
    (4) The limitation related to sectarian activities (Sec.
667.266(b)(1)).
    (c) Sanctions and remedies are provided for in WIA section 181(d)(3) 
for violations of Sec.667.268, which addresses business relocation.
    (d) Violations of Sec.667.266(b)(2) will be handled in accordance 
with the DOL nondiscrimination regulations implementing WIA section 188, 
codified at 29 CFR part 37.



Sec.667.270  What safeguards are there to ensure that participants in 

Workforce Investment Act employment and training activities do not displace 

other employees?

    (a) A participant in a program or activity authorized under title I 
of WIA must not displace (including a partial displacement, such as a 
reduction in the hours of non-overtime work, wages, or employment 
benefits) any currently employed employee (as of the date of the 
participation).
    (b) A program or activity authorized under title I of WIA must not 
impair existing contracts for services or collective bargaining 
agreements. When a program or activity authorized under title I of WIA 
would be inconsistent with a collective bargaining agreement, the 
appropriate labor organization and employer must provide written 
concurrence before the program or activity begins.
    (c) A participant in a program or activity under title I of WIA may 
not be employed in or assigned to a job if:
    (1) Any other individual is on layoff from the same or any 
substantially equivalent job;
    (2) The employer has terminated the employment of any regular, 
unsubsidized employee or otherwise caused an involuntary reduction in 
its workforce with the intention of filling the vacancy so created with 
the WIA participant; or
    (3) The job is created in a promotional line that infringes in any 
way on the promotional opportunities of currently employed workers.
    (d) Regular employees and program participants alleging displacement 
may file a complaint under the applicable grievance procedures found at 
Sec.667.600. (WIA sec. 181.)



Sec.667.272  What wage and labor standards apply to participants in activities 

under title I of WIA?

    (a) Individuals in on-the-job training or individuals employed in 
activities under title I of WIA must be compensated at the same rates, 
including periodic increases, as trainees or employees who are similarly 
situated in similar occupations by the same employer and who have 
similar training, experience and skills. Such rates must be in 
accordance with applicable law, but may not be less than the higher of 
the rate specified in section 6(a)(1) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(a)(1)) or the applicable State or local minimum wage 
law.
    (b) Individuals in on-the-job training or individuals employed in 
programs and activities under Title I of WIA must be provided benefits 
and working conditions at the same level and to the same extent as other 
trainees or employees working a similar length of time and doing the 
same type of work.
    (c) Allowances, earnings, and payments to individuals participating 
in programs under Title I of WIA are not

[[Page 106]]

considered as income for purposes of determining eligibility for and the 
amount of income transfer and in-kind aid furnished under any Federal or 
Federally assisted program based on need other than as provided under 
the Social Security Act (42 U.S.C. 301 et seq.). (WIA sec. 181(a)(2).)



Sec.667.274  What health and safety standards apply to the working conditions 

of participants in activities under title I of WIA?

    (a) Health and safety standards established under Federal and State 
law otherwise applicable to working conditions of employees are equally 
applicable to working conditions of participants engaged in programs and 
activities under Title I of WIA.
    (b)(1) To the extent that a State workers' compensation law applies, 
workers' compensation must be provided to participants in programs and 
activities under Title I of WIA on the same basis as the compensation is 
provided to other individuals in the State in similar employment.
    (2) If a State workers' compensation law applies to a participant in 
work experience, workers' compensation benefits must be available for 
injuries suffered by the participant in such work experience. If a State 
workers' compensation law does not apply to a participant in work 
experience, insurance coverage must be secured for injuries suffered by 
the participant in the course of such work experience.



Sec.667.275  What are a recipient's obligations to ensure nondiscrimination 

and equal opportunity, and what are a recipient's obligations with respect to 

religious activities?

    (a)(1) Recipients, as defined in 29 CFR 37.4, must comply with the 
nondiscrimination and equal opportunity provisions of WIA section 188 
and its implementing regulations, codified at 29 CFR part 37. Under that 
definition, the term ``recipients'' includes State and Local Workforce 
Investment Boards, One-Stop operators, service providers, vendors, and 
subrecipients, as well as other types of individuals and entitites.
    (2) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, are 
governed by the regulations implementing WIA section 188, codified at 29 
CFR part 37, and are administered and enforced by the DOL Civil Rights 
Center.
    (3) As described in Sec.667.260(a), financial assistance provided 
under WIA title I may be used to meet a recipient's obligation to 
provide physical and programmatic accessibility and reasonable 
accommodation/modification in regard to the WIA program, as required by 
section 504 of the Rehabilitation Act of 1973, as amended, the Americans 
with Disabilities Act of 1990, as amended, section 188 of WIA, and the 
regulations implementing these statutory provisions.
    (b) 29 CFR part 2, subpart D governs the circumstances under which 
recipients may use DOL support, including WIA Title I financial 
assistance, to employ or train participants in religious activities. 
Under that subpart, such assistance may be used for such employment or 
training only when the assistance is provided indirectly within the 
meaning of the Establishment Clause of the U.S. Constitution, and not 
when the assistance is provided directly. As explained in that subpart, 
assistance provided through an Individual Training Account is generally 
considered indirect, and other mechanisms may also be considered 
indirect. See also 20 CFR 667.266 and 29 CFR 37.6(f)(1). 29 CFR part 2, 
subpart D also contains requirements related to equal treatment of 
religious organizations in Department of Labor programs, and to 
protection of religious liberty of Department of Labor social service 
providers and beneficiaries. Limitations on the employment of 
participants under WIA Title I to carry out the construction, operation, 
or maintenance of any part of any facility used or to be used for 
religious instruction or as a place of religious worship are described 
at 29 CFR 37.6(f)(2). See section 188(a)(3) of the Workforce Investment 
Act of 1998, 29 U.S.C. 2938(a)(3).

[65 FR 49421, Aug. 11, 2000, as amended at 69 FR 41891, July 12, 2004]

[[Page 107]]



                    Subpart C_Reporting Requirements



Sec.667.300  What are the reporting requirements for Workforce Investment Act 

programs?

    (a) General. All States and other direct grant recipients must 
report financial, participant, and performance data in accordance with 
instructions issued by DOL. Required reports must be submitted no more 
frequently than quarterly within a time period specified in the 
reporting instructions.
    (b) Subrecipient reporting. (1) A State or other direct grant 
recipient may impose different forms or formats, shorter due dates, and 
more frequent reporting requirements on subrecipients. However, the 
recipient is required to meet the reporting requirements imposed by DOL.
    (2) If a State intends to impose different reporting requirements, 
it must describe those reporting requirements in its State WIA plan.
    (c) Financial reports. (1) Each grant recipient must submit 
financial reports.
    (2) Reports must include any income or profits earned, including 
such income or profits earned by subrecipients, and any costs incurred 
(such as stand-in costs) that are otherwise allowable except for funding 
limitations. (WIA sec. 185(f)(2))
    (3) Reported expenditures and program income, including any profits 
earned, must be on the accrual basis of accounting and cumulative by 
fiscal year of appropriation. If the recipient's accounting records are 
not normally kept on the accrual basis of accounting, the recipient must 
develop accrual information through an analysis of the documentation on 
hand.
    (d) Due date. Financial reports and participant data reports are due 
no later than 45 days after the end of each quarter unless otherwise 
specified in reporting instructions. A final financial report is 
required 90 days after the expiration of a funding period or the 
termination of grant support.
    (e) Annual performance progress report. An annual performance 
progress report for each of the three programs under title I, subpart B 
is required by WIA section 136(d).
    (1) A State failing to submit any of these annual performance 
progress reports within 45 days of the due date may have its grant (for 
that program or all title I, subpart B programs) for the succeeding year 
reduced by as much as five percent, as provided by WIA section 
136(g)(1)(B).
    (2) States submitting annual performance progress reports that 
cannot be validated or verified as accurately counting and reporting 
activities in accordance with the reporting instructions, may be treated 
as failing to submit annual reports, and be subject to sanction. 
Sanctions related to State performance or failure to submit these 
reports timely cannot result in a total grant reduction of more than 
five percent. Any sanction would be in addition to having to repay the 
amount of any incentive funds granted based on the invalid report.



                   Subpart D_Oversight and Monitoring



Sec.667.400  Who is responsible for oversight and monitoring of WIA title I 

grants?

    (a) The Secretary is authorized to monitor all recipients and 
subrecipients of all grants awarded and funds expended under WIA title I 
to determine compliance with the Act and the WIA regulations, and may 
investigate any matter deemed necessary to determine such compliance. 
Federal oversight will be conducted primarily at the recipient level.
    (b) In each fiscal year, we will also conduct in-depth reviews in 
several States, including financial and performance audits, to assure 
that funds are spent in accordance with the Act. Priority for such in-
depth reviews will be given to States not meeting annual adjusted levels 
of performance.
    (c)(1) Each recipient and subrecipient must continuously monitor 
grant-supported activities in accordance with the uniform administrative 
requirements at 29 CFR parts 95 and 97, as applicable, including the 
applicable cost principles indicated at 29 CFR 97.22(b) or 29 CFR 95.27, 
for all entities receiving WIA title I funds. For governmental units, 
the applicable requirements are at 29 CFR part 97. For non-

[[Page 108]]

profit organizations, the applicable requirements are at 29 CFR part 95.
    (2) In the case of grants under WIA sections 127 and 132, the 
Governor must develop a State monitoring system that meets the 
requirements of Sec.667.410(b). The Governor must monitor Local Boards 
annually for compliance with applicable laws and regulations in 
accordance with the State monitoring system. Monitoring must include an 
annual review of each local area's compliance with the uniform 
administrative requirements.



Sec.667.410  What are the oversight roles and responsibilities of recipients 

and subrecipients?

    (a) Roles and responsibilities for all recipients and subrecipients 
of funds under WIA title I in general. Each recipient and subrecipient 
must conduct regular oversight and monitoring of its WIA activities and 
those of its subrecipients and contractors in order to:
    (1) Determine that expenditures have been made against the cost 
categories and within the cost limitations specified in the Act and the 
regulations in this part;
    (2) Determine whether or not there is compliance with other 
provisions of the Act and the WIA regulations and other applicable laws 
and regulations; and
    (3) Provide technical assistance as necessary and appropriate.
    (b) State roles and responsibilities for grants under WIA sections 
127 and 132. (1) The Governor is responsible for the development of the 
State monitoring system. The Governor must be able to demonstrate, 
through a monitoring plan or otherwise, that the State monitoring system 
meets the requirements of paragraph (b)(2) of this section.
    (2) The State monitoring system must:
    (i) Provide for annual on-site monitoring reviews of local areas' 
compliance with DOL uniform administrative requirements, as required by 
WIA section 184(a)(4);
    (ii) Ensure that established policies to achieve program quality and 
outcomes meet the objectives of the Act and the WIA regulations, 
including policies relating to: the provision of services by One-Stop 
Centers; eligible providers of training services; and eligible providers 
of youth activities;
    (iii) Enable the Governor to determine if subrecipients and 
contractors have demonstrated substantial compliance with WIA 
requirements; and
    (iv) Enable the Governor to determine whether a local plan will be 
disapproved for failure to make acceptable progress in addressing 
deficiencies, as required in WIA section 118(d)(1).
    (v) Enable the Governor to ensure compliance with the 
nondiscrimination and equal opportunity requirements of WIA section 188 
and 29 CFR part 37. Requirements for these aspects of the monitoring 
system are set forth in 29 CFR 37.54(d)(2)(ii).
    (3) The State must conduct an annual on-site monitoring review of 
each local area's compliance with DOL uniform administrative 
requirements, including the appropriate administrative requirements for 
subrecipients and the applicable cost principles indicated at Sec.
667.200 for all entities receiving WIA title I funds.
    (4) The Governor must require that prompt corrective action be taken 
if any substantial violation of standards identified in paragraphs (b) 
(2) or (3) of this section is found. (WIA sec. 184(a)(5).)
    (5) The Governor must impose the sanctions provided in WIA section 
184 (b) and (c) in the event of a subrecipient's failure to take 
required corrective action required under paragraph (b)(4) of this 
section.
    (6) The Governor may issue additional requirements and instructions 
to subrecipients on monitoring activities.
    (7) The Governor must certify to the Secretary every two years that:
    (i) The State has implemented uniform administrative requirements;
    (ii) The State has monitored local areas to ensure compliance with 
uniform administrative requirements; and
    (iii) The State has taken appropriate corrective action to secure 
such compliance. (WIA sec. 184(a)(6)(A), (B), and (C).)

[[Page 109]]



 Subpart E_Resolution of Findings From Monitoring and Oversight Reviews



Sec.667.500  What procedures apply to the resolution of findings arising from 

audits, investigations, monitoring and oversight reviews?

    (a) Resolution of subrecipient-level findings. (1) The Governor is 
responsible for resolving findings that arise from the State's 
monitoring reviews, investigations and audits (including OMB Circular A-
133 audits) of subrecipients.
    (2) A State must utilize the audit resolution, debt collection and 
appeal procedures that it uses for other Federal grant programs.
    (3) If a State does not have such procedures, it must prescribe 
standards and procedures to be used for this grant program.
    (b) Resolution of State and other direct recipient level findings. 
(1) The Secretary is responsible for resolving findings that arise from 
Federal audits, monitoring reviews, investigations, incident reports, 
and recipient level OMB Circular A-133 audits.
    (2) The Secretary uses the DOL audit resolution process, consistent 
with the Single Audit Act of 1996 and OMB Circular A-133, and Grant 
Officer Resolution provisions of Sec.667.510, as appropriate.
    (3) A final determination issued by a Grant Officer under this 
process may be appealed to the DOL Office of Administrative Law Judges 
under the procedures at Sec.667.800.
    (c) Resolution of nondiscrimination findings. Findings arising from 
investigations or reviews conducted under nondiscrimination laws will be 
resolved in accordance with WIA section 188 and the Department of Labor 
nondiscrimination regulations implementing WIA section 188, codified at 
29 CFR part 37.



Sec.667.505  How do we resolve investigative and monitoring findings?

    (a) As a result of an investigation, on-site visit or other 
monitoring, we notify the recipient of the findings of the investigation 
and gives the recipient a period of time (not more than 60 days) to 
comment and to take appropriate corrective actions.
    (b) The Grant Officer reviews the complete file of the investigation 
or monitoring report and the recipient's actions under paragraph (a) of 
this section. The Grant Officer's review takes into account the sanction 
provisions of WIA section 184(b) and (c). If the Grant Officer agrees 
with the recipient's handling of the situation, the Grant Officer so 
notifies the recipient. This notification constitutes final agency 
action.
    (c) If the Grant Officer disagrees with the recipient's handling of 
the matter, the Grant Officer proceeds under Sec.667.510.



Sec.667.510  What is the Grant Officer resolution process?

    (a) General. When the Grant Officer is dissatisfied with the State's 
disposition of an audit or other resolution of violations (including 
those arising out of incident reports or compliance reviews), or with 
the recipient's response to findings resulting from investigations or 
monitoring report, the initial and final determination process, set 
forth in this section, is used to resolve the matter.
    (b) Initial determination. The Grant Officer makes an initial 
determination on the findings for both those matters where there is 
agreement and those where there is disagreement with the recipient's 
resolution, including the allowability of questioned costs or 
activities. This initial determination is based upon the requirements of 
the Act and regulations, and the terms and conditions of the grants, 
contracts, or other agreements under the Act.
    (c) Informal resolution. Except in an emergency situation, when the 
Secretary invokes the authority described in WIA section 184(e), the 
Grant Officer may not revoke a recipient's grant in whole or in part, 
nor institute corrective actions or sanctions, without first providing 
the recipient with an opportunity to present documentation or arguments 
to resolve informally those matters in controversy contained in the 
initial determination. The initial determination must provide for an 
informal resolution period of at least 60 days from issuance of the 
initial determination. If the matters are resolved informally, the Grant 
Officer must

[[Page 110]]

issue a final determination under paragraph (d) of this section which 
notifies the parties in writing of the nature of the resolution and may 
close the file.
    (d) Grant Officer's final determination. (1) If the matter is not 
fully resolved informally, the Grant Officer provides each party with a 
written final determination by certified mail, return receipt requested. 
For audits of recipient-level entities and other recipients which 
receive WIA funds directly from DOL, ordinarily, the final determination 
is issued not later than 180 days from the date that the Office of 
Inspector General (OIG) issues the final approved audit report to the 
Employment and Training Administration. For audits of subrecipients 
conducted by the OIG, ordinarily the final determination is issued not 
later than 360 days from the date the OIG issues the final approved 
audit report to ETA.
    (2) A final determination under this paragraph (d) must:
    (i) Indicate whether efforts to informally resolve matters contained 
in the initial determination have been unsuccessful;
    (ii) List those matters upon which the parties continue to disagree;
    (iii) List any modifications to the factual findings and conclusions 
set forth in the initial determination and the rationale for such 
modifications;
    (iv) Establish a debt, if appropriate;
    (v) Require corrective action, when needed;
    (vi) Determine liability, method of restitution of funds and 
sanctions; and
    (vii) Offer an opportunity for a hearing in accordance with Sec.
667.800 of this part.
    (3) Unless a hearing is requested, a final determination under this 
paragraph (d) is final agency action and is not subject to further 
review.
    (e) Nothing in this subpart precludes the Grant Officer from issuing 
an initial determination and/or final determination directly to a 
subrecipient, in accordance with section 184(d)(3) of the Act. In such a 
case, the Grant Officer will inform the recipient of this action.



 Subpart F_Grievance Procedures, Complaints, and State Appeals Processes



Sec.667.600  What local area, State and direct recipient grievance procedures 

must be established?

    (a) Each local area, State and direct recipient of funds under title 
I of WIA, except for Job Corps, must establish and maintain a procedure 
for grievances and complaints according to the requirements of this 
section. The grievance procedure requirements applicable to Job Corps 
are set forth at 20 CFR 670.990.
    (b) Each local area, State, and direct recipient must:
    (1) Provide information about the content of the grievance and 
complaint procedures required by this section to participants and other 
interested parties affected by the local Workforce Investment System, 
including One-Stop partners and service providers;
    (2) Require that every entity to which it awards Title I funds must 
provide the information referred to in paragraph (b)(1) of this section 
to participants receiving Title I-funded services from such entities; 
and
    (3) Must make reasonable efforts to assure that the information 
referred to in paragraph (b)(1) of this section will be understood by 
affected participants and other individuals, including youth and those 
who are limited-English speaking individuals. Such efforts must comply 
with the language requirements of 29 CFR 37.35 regarding the provision 
of services and information in languages other than English.
    (c) Local area procedures must provide:
    (1) A process for dealing with grievances and complaints from 
participants and other interested parties affected by the local 
Workforce Investment System, including One-Stop partners and service 
providers;
    (2) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint;
    (3) A process which allows an individual alleging a labor standards 
violation to submit the grievance to a binding arbitration procedure, if 
a collective bargaining agreement covering the

[[Page 111]]

parties to the grievance so provides; and
    (4) An opportunity for a local level appeal to a State entity when:
    (i) No decision is reached within 60 days; or
    (ii) Either party is dissatisfied with the local hearing decision.
    (d) State procedures must provide:
    (1) A process for dealing with grievances and complaints from 
participants and other interested parties affected by the Statewide 
Workforce Investment programs;
    (2) A process for resolving appeals made under paragraph (c)(4) of 
this section;
    (3) A process for remanding grievances and complaints related to the 
local Workforce Investment Act programs to the local area grievance 
process; and
    (4) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint.
    (e) Procedures of direct recipients must provide:
    (1) A process for dealing with grievance and complaints from 
participants and other interested parties affected by the recipient's 
Workforce Investment Act programs; and
    (2) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint.
    (f) The remedies that may be imposed under local, State and direct 
recipient grievance procedures are enumerated at WIA section 181(c)(3).
    (g)(1) The provisions of this section on grievance procedures do not 
apply to discrimination complaints brought under WIA section 188 and/or 
29 CFR part 37. Such complaints must be handled in accordance with the 
procedures set forth in that regulatory part.
    (2) Questions about or complaints alleging a violation of the 
nondiscrimination provisions of WIA section 188 may be directed or 
mailed to the Director, Civil Rights Center, U.S. Department of Labor, 
Room N4123, 200 Constitution Avenue, NW, Washington, D.C. 20210, for 
processing.
    (h) Nothing in this subpart precludes a grievant or complainant from 
pursuing a remedy authorized under another Federal, State or local law.



Sec.667.610  What processes do we use to review State and local grievances and 

complaints?

    (a) We investigate allegations arising through the grievance 
procedures described in Sec.667.600 when:
    (1) A decision on a grievance or complaint under Sec.667.600(d) 
has not been reached within 60 days of receipt of the grievance or 
complaint or within 60 days of receipt of the request for appeal of a 
local level grievance and either party appeals to the Secretary; or
    (2) A decision on a grievance or complaint under Sec.667.600(d) 
has been reached and the party to which such decision is adverse appeals 
to the Secretary.
    (b) We must make a final decision on an appeal under paragraph (a) 
of this section no later than 120 days after receiving the appeal.
    (c) Appeals made under paragraph (a)(2) of this section must be 
filed within 60 days of the receipt of the decision being appealed. 
Appeals made under paragraph (a)(1) of this section must be filed within 
120 days of the filing of the grievance with the State, or the filing of 
the appeal of a local grievance with the State. All appeals must be 
submitted by certified mail, return receipt requested, to the Secretary, 
U.S. Department of Labor, Washington, DC 20210, Attention: ASET. A copy 
of the appeal must be simultaneously provided to the appropriate ETA 
Regional Administrator and the opposing party.
    (d) Except for complaints arising under WIA section 184(f) or 
section 188, grievances or complaints made directly to the Secretary 
will be referred to the appropriate State or local area for resolution 
in accordance with this section, unless we notify the parties that the 
Department of Labor will investigate the grievance under the procedures 
at Sec.667.505. Discrimination complaints brought under WIA section 
188 or 29 CFR part 37 will be referred to the Director of the Civil 
Rights Center.

[[Page 112]]



Sec.667.630  How are complaints and reports of criminal fraud and abuse 

addressed under WIA?

    Information and complaints involving criminal fraud, waste, abuse or 
other criminal activity must be reported immediately through the 
Department's Incident Reporting System to the DOL Office of Inspector 
General, Office of Investigations, Room S5514, 200 Constitution Avenue 
NW., Washington, D.C. 20210, or to the corresponding Regional Inspector 
General for Investigations, with a copy simultaneously provided to the 
Employment and Training Administration. The Hotline number is 1-800-347-
3756. Complaints of a non-criminal nature are handled under the 
procedures set forth in Sec.667.505 or through the Department's 
Incident Reporting System.



Sec.667.640  What additional appeal processes or systems must a State have for 

the WIA program?

    (a) Non-designation of local areas: (1) The State must establish, 
and include in its State Plan, due process procedures which provide 
expeditious appeal to the State Board for a unit or combination of units 
of general local government or a rural concentrated employment program 
grant recipient (as described at WIA section 116(a)(2)(B)) that 
requests, but is not granted, automatic or temporary and subsequent 
designation as a local workforce investment area under WIA section 
116(a)(2) or 116(a)(3).
    (2) These procedures must provide an opportunity for a hearing and 
prescribe appropriate time limits to ensure prompt resolution of the 
appeal.
    (3) If the appeal to the State Board does not result in designation, 
the appellant may request review by the Secretary under Sec.667.645.
    (4) If the Secretary determines that the appellant was not accorded 
procedural rights under the appeal process established in paragraph 
(a)(1) of this section, or that the area meets the requirements for 
designation at WIA section 116(a)(2) or 116(a)(3), the Secretary may 
require that the area be designated as a workforce investment area.
    (b) Denial or termination of eligibility as a training provider. (1) 
A State must establish procedures which allow providers of training 
services the opportunity to appeal:
    (i) Denial of eligibility by a Local Board or the designated State 
agency under WIA section 122 (b), (c) or (e);
    (ii) Termination of eligibility or other action by a Local Board or 
State agency under WIA section 122(f); or
    (iii) Denial of eligibility as a provider of on-the-job training 
(OJT) or customized training by a One-Stop operator under WIA section 
122(h).
    (2) Such procedures must provide an opportunity for a hearing and 
prescribe appropriate time limits to ensure prompt resolution of the 
appeal.
    (3) A decision under this State appeal process may not be appealed 
to the Secretary.
    (c) Testing and sanctioning for use of controlled substances. (1) A 
State must establish due process procedures which provide expeditious 
appeal for:
    (i) WIA participants subject to testing for use of controlled 
substances, imposed under a State policy established under WIA section 
181(f); and
    (ii) WIA participants who are sanctioned after testing positive for 
the use of controlled substances, under the policy described in 
paragraph (c)(1)(i) of this section.
    (2) A decision under this State appeal process may not be appealed 
to the Secretary.



Sec.667.645  What procedures apply to the appeals of non-designation of local 

areas?

    (a) A unit or combination of units of general local government or 
rural concentrated employment program grant recipient (as described in 
WIA section 116(a)(2)(B)) whose appeal of the denial of a request for 
automatic or temporary and subsequent designation as a local workforce 
investment area to the State Board has not resulted in designation may 
appeal the denial of local area designation to the Secretary.
    (b) Appeals made under paragraph (a) of this section must be filed 
no later than 30 days after receipt of written notification of the 
denial from the State Board, and must be submitted by certified mail, 
return receipt requested, to the Secretary, U.S. Department of Labor, 
Washington, DC 20210,

[[Page 113]]

Attention: ASET. A copy of the appeal must be simultaneously provided to 
the State Board.
    (c) The appellant must establish that it was not accorded procedural 
rights under the appeal process set forth in the State Plan, or 
establish that it meets the requirements for designation in WIA section 
116(a)(2) or (a)(3). The Secretary may consider any comments submitted 
in response by the State Board.
    (d) If the Secretary determines that the appellant has met its 
burden of establishing that it was not accorded procedural rights under 
the appeal process set forth in the State Plan, or that it meets the 
requirements for designation in WIA section 116(a)(2) or (a)(3), the 
Secretary may require that the area be designated as a local workforce 
investment area.
    (e) The Secretary must issue a written decision to the Governor and 
the appellant.



Sec.667.650  What procedures apply to the appeals of the Governor's imposition 

of sanctions for substantial violations or performance failures by a local 

area?

    (a) A local area which has been found in substantial violation of 
WIA title I, and has received notice from the Governor that either all 
or part of the local plan will be revoked or that a reorganization will 
occur, may appeal such sanctions to the Secretary under WIA section 
184(b). The sanctions do not become effective until:
    (1) The time for appeal has expired; or
    (2) The Secretary has issued a decision.
    (b) A local area which has failed to meet local performance measures 
for two consecutive years, and has received the Governor's notice of 
intent to impose a reorganization plan, may appeal such sanctions to the 
Secretary under WIA section 136(h)(1)(B).
    (c) Appeals made under paragraph (a) or (b) of this section must be 
filed no later than 30 days after receipt of written notification of the 
revoked plan or imposed reorganization, and must be submitted by 
certified mail, return receipt requested, to the Secretary, U.S. 
Department of Labor, Washington, DC 20210, Attention: ASET. A copy of 
the appeal must be simultaneously provided to the Governor.
    (d) The Secretary may consider any comments submitted in response by 
the Governor.
    (e) The Secretary will notify the Governor and the appellant in 
writing of the Secretary's decision under paragraph (a) of this section 
within 45 days after receipt of the appeal. The Secretary will notify 
the Governor and the appellant in writing of the Secretary's decision 
under paragraph (b) of this section within 30 days after receipt of the 
appeal.



    Subpart G_Sanctions, Corrective Actions, and Waiver of Liability



Sec.667.700  What procedure do we use to impose sanctions and corrective 

actions on recipients and subrecipients of WIA grant funds?

    (a)(1) Except for actions under WIA section 188(a) or 29 CFR part 37 
(relating to nondiscrimination requirements), the Grant Officer uses the 
initial and final determination procedures outlined in Sec.667.510 to 
impose a sanction or corrective action.
    (2) To impose a sanction or corrective action for a violation of WIA 
section 188(a) or 29 CFR part 37, the Department will use the procedures 
set forth in that regulatory part.
    (b) To impose a sanction or corrective action for noncompliance with 
the uniform administrative requirements set forth at section 184(a)(3) 
of WIA, and Sec.667.200(a), when the Grant Officer determines that the 
Governor has not taken corrective action to remedy the violation as 
required by WIA section 184(a)(5), the Grant Officer, under the 
authority of WIA section 184(a)(7) and Sec.667.710(c), must require 
the Governor to impose any of the corrective actions set forth at WIA 
section 184(b)(1). If the Governor fails to impose the corrective 
actions required by the Grant Officer, the Secretary may immediately 
suspend or terminate financial assistance in accordance with WIA section 
184(e).
    (c) For substantial violations of WIA statutory and regulatory 
requirements, if the Governor fails to promptly take the actions 
specified in WIA section 184(b)(1), the Grant Officer may impose

[[Page 114]]

such actions directly against the local area.
    (d) The Grant Officer may also impose a sanction directly against a 
subrecipient, as authorized in section 184(d)(3) of the Act. In such a 
case, the Grant Officer will inform the recipient of the action.



Sec.667.705  Who is responsible for funds provided under title I of WIA?

    (a) The recipient is responsible for all funds under its grant(s).
    (b) The political jurisdiction(s) of the chief elected official(s) 
in a local workforce investment area is liable for any misuse of the WIA 
grant funds allocated to the local area under WIA sections 128 and 133, 
unless the chief elected official(s) reaches an agreement with the 
Governor to bear such liability.
    (c) When a local workforce area is composed of more than one unit of 
general local government, the liability of the individual jurisdictions 
must be specified in a written agreement between the chief elected 
officials.



Sec.667.710  What actions are required to address the failure of a local area 

to comply with the applicable uniform administrative provisions?

    (a) If, as part of the annual on-site monitoring of local areas, the 
Governor determines that a local area is not in compliance with the 
uniform administrative requirements found at 29 CFR part 95 or part 97, 
as appropriate, the Governor must:
    (1) Require corrective action to secure prompt compliance; and
    (2) Impose the sanctions provided for at section 184(b) if the 
Governor finds that the local area has failed to take timely corrective 
action.
    (b) An action by the recipient to impose a sanction against a local 
area, in accordance with this section, may be appealed to the Secretary 
in accordance with Sec.667.650, and will not become effective until:
    (1) The time for appeal has expired; or
    (2) The Secretary has issued a decision.
    (c)(1) If the Secretary finds that the Governor has failed to 
monitor and certify compliance of local areas with the administrative 
requirements, under WIA section 184(a), or that the Governor has failed 
to promptly take the actions required upon a determination under 
paragraph (a) of this section that a local area is not in compliance 
with the uniform administrative requirements, the Secretary will require 
the Governor to take corrective actions against the State recipient or 
the local area, as appropriate to ensure prompt compliance.
    (2) If the Governor fails to take the corrective actions required by 
the Secretary under paragraph (c)(1) of this section, the Secretary may 
immediately suspend or terminate financial assistance under WIA section 
184(e).



Sec.667.720  How do we handle a recipient's request for waiver of liability 

under WIA section 184(d)(2)?

    (a) A recipient may request a waiver of liability, as described in 
WIA section 184(d)(2), and a Grant Officer may approve such a waiver 
under WIA section 184(d)(3).
    (b)(1) When the debt for which a waiver of liability is desired was 
established in a non-Federal resolution proceeding, the resolution 
report must accompany the waiver request.
    (2) When the waiver request is made during the ETA Grant Officer 
resolution process, the request must be made during the informal 
resolution period described in Sec.667.510(c).
    (c) A waiver of the recipient's liability shall be considered by the 
Grant Officer only when:
    (1) The misexpenditure of WIA funds occurred at a subrecipient's 
level;
    (2) The misexpenditure was not due to willful disregard of the 
requirements of title I of the Act, gross negligence, failure to observe 
accepted standards of administration, or did not constitute fraud;
    (3) If fraud did exist, it was perpetrated against the recipient/
subrecipients; and
    (i) The recipient/subrecipients discovered, investigated, reported, 
and cooperated in any prosecution of the perpetrator of the fraud; and
    (ii) After aggressive debt collection action, it has been documented 
that further attempts at debt collection from the perpetrator of the 
fraud would be inappropriate or futile;

[[Page 115]]

    (4) The recipient has issued a final determination which disallows 
the misexpenditure, the recipient's appeal process has been exhausted, 
and a debt has been established; and
    (5) The recipient requests such a waiver and provides documentation 
to demonstrate that it has substantially complied with the requirements 
of section 184(d)(2) of the Act, and this section.
    (d) The recipient will not be released from liability for misspent 
funds under the determination required by section 184(d) of the Act 
unless the Grant Officer determines that further collection action, 
either by the recipient or subrecipients, would be inappropriate or 
would prove futile.



Sec.667.730  What is the procedure to handle a recipient's request for advance 

approval of contemplated corrective actions?

    (a) The recipient may request advance approval from the Grant 
Officer for contemplated corrective actions, including debt collection 
actions, which the recipient plans to initiate or to forego. The 
recipient's request must include a description and an assessment of all 
actions taken by the subrecipients to collect the misspent funds.
    (b) Based on the recipient's request, the Grant Officer may 
determine that the recipient may forego certain collection actions 
against a subrecipient when:
    (1) The subrecipient meets the criteria set forth in section 
184(d)(2) of the Act;
    (2) The misexpenditure of funds:
    (i) Was not made by that subrecipient but by an entity that received 
WIA funds from that subrecipient;
    (ii) Was not a violation of section 184(d)(1) of the Act, and did 
not constitute fraud; or
    (iii) If fraud did exist,
    (A) It was perpetrated against the subrecipient; and:
    (B) The subrecipient discovered, investigated, reported, and 
cooperated in any prosecution of the perpetrator of the fraud; and
    (C) After aggressive debt collection action, it has been documented 
that further attempts at debt collection from the perpetrator of the 
fraud would be inappropriate or futile;
    (3) A final determination which disallows the misexpenditure and 
establishes a debt has been issued at the appropriate level;
    (4) Final action within the recipient's appeal system has been 
completed; and
    (5) Further debt collection action by that subrecipient or the 
recipient would be either inappropriate or futile.



Sec.667.740  What procedure must be used for administering the 

offset/deduction provisions at section 184(c) of the Act?

    (a)(1) For recipient level misexpenditures, we may determine that a 
debt, or a portion thereof, may be offset against amounts that are 
allotted to the recipient. Recipients must submit a written request for 
an offset to the Grant Officer. Generally, we will apply the offset 
against amounts that are available at the recipient level for 
administrative costs.
    (2) The Grant Officer may approve an offset request, under paragraph 
(a)(1) of this section, if the misexpenditures were not due to willful 
disregard of the requirements of the Act and regulations, gross 
negligence, failure to observe accepted standards of administration or a 
pattern of misexpenditure.
    (b) For subrecipient level misexpenditures that were not due to 
willful disregard of the requirements of the Act and regulations, gross 
negligence, failure to observe accepted standards of administration or a 
pattern of misexpenditure, if we have required the State to repay such 
amount the State may deduct an amount equal to the misexpenditure from 
its subsequent year's allocations to the local area from funds available 
for the administrative costs of the local programs involved.
    (c) If offset is granted, the debt will not be fully satisfied until 
the Grant Officer reduces amounts allotted to the State by the amount of 
the misexpenditure.
    (d) A State may not make a deduction under paragraph (b) of this 
section until the State has taken appropriate corrective action to 
ensure full compliance within the local area with regard

[[Page 116]]

to appropriate expenditure of WIA funds.



        Subpart H_Administrative Adjudication and Judicial Review



Sec.667.800  What actions of the Department may be appealed to the Office of 

Administrative Law Judges?

    (a) An applicant for financial assistance under title I of WIA which 
is dissatisfied because we have issued a determination not to award 
financial assistance, in whole or in part, to such applicant; or a 
recipient, subrecipient, or a vendor against which the Grant Officer has 
directly imposed a sanction or corrective action, including a sanction 
against a State under 20 CFR part 666, may appeal to the U.S. Department 
of Labor, Office of Administrative Law Judges (OALJ) within 21 days of 
receipt of the final determination.
    (b) Failure to request a hearing within 21 days of receipt of the 
final determination constitutes a waiver of the right to a hearing.
    (c) A request for a hearing under this subpart must state 
specifically those issues in the final determination upon which review 
is requested. Those provisions of the final determination not specified 
for review, or the entire final determination when no hearing has been 
requested within the 21 days, are considered resolved and not subject to 
further review. Only alleged violations of the Act, its regulations, 
grant or other agreement under the Act fairly raised in the 
determination, and the request for hearing are subject to review.
    (d) A request for a hearing must be transmitted by certified mail, 
return receipt requested, to the Chief Administrative Law Judge, U.S. 
Department of Labor, Suite 400, 800 K Street, NW., Washington, DC 20001, 
with one copy to the Departmental official who issued the determination.
    (e) The procedures in this subpart apply in the case of a 
complainant who has not had a dispute adjudicated under the alternative 
dispute resolution process set forth in Sec.667.840 within the 60 
days, except that the request for hearing before the OALJ must be filed 
within 15 days of the conclusion of the 60-day period provided in Sec.
667.840. In addition to including the final determination upon which 
review is requested, the complainant must include a copy of any 
Stipulation of Facts and a brief summary of proceedings.



Sec.667.810  What rules of procedure apply to hearings conducted under this 

subpart?

    (a) Rules of practice and procedure. The rules of practice and 
procedure promulgated by the OALJ at subpart A of 29 CFR part 18, govern 
the conduct of hearings under this subpart. However, a request for 
hearing under this subpart is not considered a complaint to which the 
filing of an answer by DOL or a DOL agency or official is required. 
Technical rules of evidence will not apply to hearings conducted 
pursuant to this part. However, rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to cross-examination will apply.
    (b) Prehearing procedures. In all cases, the Administrative Law 
Judge (ALJ) should encourage the use of prehearing procedures to 
simplify and clarify facts and issues.
    (c) Subpoenas. Subpoenas necessary to secure the attendance of 
witnesses and the production of documents or other items at hearings 
must be obtained from the ALJ and must be issued under the authority 
contained in section 183(c) of the Act, incorporating 15 U.S.C. 49.
    (d) Timely submission of evidence. The ALJ must not permit the 
introduction at the hearing of any documentation if it has not been made 
available for review by the other parties to the proceeding either at 
the time ordered for any prehearing conference, or, in the absence of 
such an order, at least 3 weeks prior to the hearing date.
    (e) Burden of production. The Grant Officer has the burden of 
production to support her or his decision. To this end, the Grant 
Officer prepares and files an administrative file in support of the 
decision which must be made part of the record. Thereafter, the party or 
parties seeking to overturn the Grant Officer's decision has the burden 
of persuasion.

[[Page 117]]



Sec.667.820  What authority does the Administrative Law Judge have in ordering 

relief as an outcome of an administrative hearing?

    In ordering relief, the ALJ has the full authority of the Secretary 
under the Act.



Sec.667.825  What special rules apply to reviews of NFJP and WIA INA grant 

selections?

    (a) An applicant whose application for funding as a WIA INA grantee 
under 20 CFR part 668 or as an NFJP grantee under 20 CFR part 669 is 
denied in whole or in part may request an administrative review under 
Sec.667.800(a) with to determine whether there is a basis in the 
record to support the decision. This appeal will not in any way 
interfere with the designation and funding of another organization to 
serve the area in question during the appeal period. The available 
remedy in such an appeal is the right to be designated in the future as 
the WIA INA or NFJP grantee for the remainder of the current grant 
cycle. Neither retroactive nor immediately effective selection status 
may be awarded as relief in a non-selection appeal under this section.
    (b) If the ALJ rules that the organization should have been selected 
and the organization continues to meet the requirements of 20 CFR part 
668 or part 669, we will select and fund the organization within 90 days 
of the ALJ's decision unless the end of the 90-day period is within six 
(6) months of the end of the funding period. An applicant so selected is 
not entitled to the full grant amount, but will only receive the funds 
remaining in the grant that have not been expended by the current 
grantee through its operation of the grant and its subsequent closeout.
    (c) Any organization selected and/or funded as a WIA INA or NFJP 
grantee is subject to being removed as grantee in the event an ALJ 
decision so orders. The Grant Officer provides instructions on 
transition and close-out to a grantee which is removed. All parties must 
agree to the provisions of this paragraph as a condition for WIA INA or 
NFJP funding.
    (d) A successful appellant which has not been awarded relief because 
of the application of paragraph (b) of this section is eligible to 
compete for funds in the immediately subsequent two-year grant cycle. In 
such a situation, we will not issue a waiver of competition and for the 
area and will select a grantee through the normal competitive process.



Sec.667.830  When will the Administrative Law Judge issue a decision?

    (a) The ALJ should render a written decision not later than 90 days 
after the closing of the record.
    (b) The decision of the ALJ constitutes final agency action unless, 
within 20 days of the decision, a party dissatisfied with the ALJ's 
decision has filed a petition for review with the Administrative Review 
Board (ARB) (established under Secretary's Order No. 2-96), specifically 
identifying the procedure, fact, law or policy to which exception is 
taken. Any exception not specifically urged is deemed to have been 
waived. A copy of the petition for review must be sent to the opposing 
party at that time. Thereafter, the decision of the ALJ constitutes 
final agency action unless the ARB, within 30 days of the filing of the 
petition for review, notifies the parties that the case has been 
accepted for review. Any case accepted by the ARB must be decided within 
180 days of acceptance. If not so decided, the decision of the ALJ 
constitutes final agency action.



Sec.667.840  Is there an alternative dispute resolution process that may be 

used in place of an OALJ hearing?

    (a) Parties to a complaint which has been filed according to the 
requirements of Sec.667.800 may choose to waive their rights to an 
administrative hearing before the OALJ. Instead, they may choose to 
transfer the settlement of their dispute to an individual acceptable to 
all parties who will conduct an informal review of the stipulated facts 
and render a decision in accordance with applicable law. A written 
decision must be issued within 60 days after submission of the matter 
for informal review.
    (b) The waiver of the right to request a hearing before the OALJ 
will automatically be revoked if a settlement has not been reached or a 
decision has

[[Page 118]]

not been issued within the 60 days provided in paragraph (a) of this 
section.
    (c) The decision rendered under this informal review process will be 
treated as a final decision of an Administrative Law Judge under section 
186(b) of the Act.



Sec.667.850  Is there judicial review of a final order of the Secretary issued 

under section 186 of the Act?

    (a) Any party to a proceeding which resulted in a Secretary's final 
order under section 186 of the Act may obtain a review in the United 
States Court of Appeals having jurisdiction over the applicant or 
recipient of funds involved, by filing a review petition within 30 days 
of the issuance of the Secretary's final order.
    (b) The court has jurisdiction to make and enter a decree affirming, 
modifying, or setting aside the order of the Secretary, in whole or in 
part.
    (c) No objection to the Secretary's order may be considered by the 
court unless the objection was specifically urged, in a timely manner, 
before the Secretary. The review is limited to questions of law, and the 
findings of fact of the Secretary are conclusive if supported by 
substantial evidence.
    (d) The judgment of the court is final, subject to certiorari review 
by the United States Supreme Court.



Sec.667.860  Are there other remedies available outside of the Act?

    Nothing contained in this subpart prejudices the separate exercise 
of other legal rights in pursuit of remedies and sanctions available 
outside the Act.



PART 668_INDIAN AND NATIVE AMERICAN PROGRAMS UNDER TITLE I OF THE WORKFORCE 

INVESTMENT ACT--Table of Contents



                     Subpart A_Purposes and Policies

Sec.
668.100 What is the purpose of the programs established to serve Native 
          American peoples (INA programs) under section166 of the 
          Workforce Investment Act?
668.120 How must INA programs be administered?
668.130 What obligation do we have to consult with the INA grantee 
          community in developing rules, regulations, and standards of 
          accountability for INA programs?
668.140 What WIA regulations apply to the INA program?
668.150 What definitions apply to terms used in the regulations in this 
          part?

  Subpart B_Service Delivery Systems Applicable to Section 166 Programs

668.200 What are the requirements for designation as an ``Indian or 
          Native American (INA) grantee''?
668.210 What priority for designation is given to eligible 
          organizations?
668.220 What is meant by the ``ability to administer funds'' for 
          designation purposes?
668.230 How will we determine an entity's ``ability to administer 
          funds''?
668.240 What is the process for applying for designation as an INA 
          grantee?
668.250 What happens if two or more entities apply for the same area?
668.260 How are INA grantees designated?
668.270 What appeal rights are available to entities that are denied 
          designation?
668.280 Are there any other ways in which an entity may be designated as 
          an INA grantee?
668.290 Can an INA grantee's designation be terminated?
668.292 How does a designated entity become an INA grantee?
668.294 Do we have to designate an INA grantee for every part of the 
          country?
668.296 How are WIA funds allocated to INA grantees?

                     Subpart C_Services to Customers

668.300 Who is eligible to receive services under the INA program?
668.340 What are INA grantee allowable activities?
668.350 Are there any restrictions on allowable activities?
668.360 What is the role of INA grantees in the One-Stop system?
668.370 What policies govern payments to participants, including wages, 
          training allowances or stipends, or direct payments for 
          supportive services?
668.380 What will we do to strengthen the capacity of INA grantees to 
          deliver effective services?

                  Subpart D_Supplemental Youth Services

668.400 What is the purpose of the supplemental youth services program?
668.410 What entities are eligible to receive supplemental youth 
          services funding?
668.420 What are the planning requirements for receiving supplemental 
          youth services funding?
668.430 What individuals are eligible to receive supplemental youth 
          services?

[[Page 119]]

668.440 How is funding for supplemental youth services determined?
668.450 How will supplemental youth services be provided?
668.460 Are there performance measures and standards applicable to the 
          supplemental youth services program?

                    Subpart E_Services to Communities

668.500 What services may INA grantees provide to or for employers under 
          section 166?
668.510 What services may INA grantees provide to the community at large 
          under section 166?
668.520 Must INA grantees give preference to Indian/Native American 
          entities in the selection of contractors or service providers?
668.530 What rules govern the issuance of contracts and/or subgrants?

         Subpart F_Accountability for Services and Expenditures

668.600 To whom is the INA grantee accountable for the provision of 
          services and the expenditure of INA funds?
668.610 How is this accountability documented and fulfilled?
668.620 What performance measures are in place for the INA program?
668.630 What are the requirements for preventing fraud and abuse under 
          section 166?
668.640 What grievance systems must a section 166 program provide?
668.650 Can INA grantees exclude segments of the eligible population?

             Subpart G_Section 166 Planning/Funding Process

668.700 What process must an INA grantee use to plan its employment and 
          training services?
668.710 What planning documents must an INA grantee submit?
668.720 What information must these planning documents contain?
668.730 When must these plans be submitted?
668.740 How will we review and approve such plans?
668.750 Under what circumstances can we or the INA grantee modify the 
          terms of the grantee's plan(s)?

                  Subpart H_Administrative Requirements

668.800 What systems must an INA grantee have in place to administer an 
          INA program?
668.810 What types of costs are allowable expenditures under the INA 
          program?
668.820 What rules apply to administrative costs under the INA program?
668.825 Does the WIA administrative cost limit for States and local 
          areas apply to section 166 grants?
668.830 How should INA program grantees classify costs?
668.840 What cost principles apply to INA funds?
668.850 What audit requirements apply to INA grants?
668.860 What cash management procedures apply to INA grant funds?
668.870 What is ``program income'' and how is it regulated in the INA 
          program?

               Subpart I_Miscellaneous Program Provisions

668.900 Does WIA provide regulatory and/or statutory waiver authority?
668.910 What information is required to document a requested waiver?
668.920 What provisions of law or regulations may not be waived?
668.930 May INA grantees combine or consolidate their employment and 
          training funds?
668.940 What is the role of the Native American Employment and Training 
          Council?

    Authority: Secs. 506(c) and 166(h)(2), Pub. L. 105-220; 20 U.S.C. 
9276(c); 29 U.S.C. 2911(h)(2).

    Source: 65 FR 49435, Aug. 11, 2000, unless otherwise noted.



                     Subpart A_Purposes and Policies



Sec.668.100  What is the purpose of the programs established to serve Native 

American peoples (INA programs) under section 166 of the Workforce Investment 

Act?

    (a) The purpose of WIA INA programs is to support comprehensive 
employment and training activities for Indian, Alaska Native and Native 
Hawaiian individuals in order to:
    (1) Develop more fully their academic, occupational, and literacy 
skills;
    (2) Make them more competitive in the workforce;
    (3) Promote the economic and social development of Indian, Alaska 
Native, and Native Hawaiian communities according to the goals and 
values of such communities; and
    (4) Help them achieve personal and economic self-sufficiency.
    (b) The principal means of accomplishing these purposes is to enable

[[Page 120]]

tribes and Native American organizations to provide employment and 
training services to Native American peoples and their communities. 
Services should be provided in a culturally appropriate manner, 
consistent with the principles of Indian self-determination. (WIA sec. 
166(a)(1).)



Sec.668.120  How must INA programs be administered?

    (a) We will administer INA programs to maximize the Federal 
commitment to support the growth and development of Native American 
people and communities as determined by representatives of such 
communities.
    (b) In administering these programs, we will observe the 
Congressional declaration of policy set forth in the Indian Self-
Determination and Education Assistance Act, at 25 U.S.C. section 450a, 
as well as the Department of Labor's ``American Indian and Alaska Native 
Policy,'' dated July 29, 1998.
    (c) The regulations in this part are not intended to abrogate the 
trust responsibilities of the Federal Government to Native American 
bands, tribes, or groups in any way.
    (d) We will administer INA programs through a single organizational 
unit and consistent with the requirements in section 166(h) of the Act. 
We have designated the Division of Indian and Native American Programs 
(DINAP) within the Employment and Training Administration (ETA) as this 
single organizational unit required by WIA section 166(h)(1).
    (e) We will establish and maintain administrative procedures for the 
selection, administration, monitoring, and evaluation of Native American 
employment and training programs authorized under this Act. We will 
utilize staff who have a particular competence in this field to 
administer these programs. (WIA sec. 166(h).)



Sec.668.130  What obligation do we have to consult with the INA grantee 

community in developing rules, regulations, and standards of accountability 

for INA programs?

    We will consult with the Native American grantee community as a full 
partner in developing policies for the INA programs. We will actively 
seek and consider the views of all INA grantees, and will discuss 
options with the grantee community prior to establishing policies and 
program regulations. The primary consultation vehicle is the Native 
American Employment and Training Council. (WIA sec. 166(h)(2).)



Sec.668.140  What WIA regulations apply to the INA program?

    (a) The regulations found in this subpart.
    (b) The general administrative requirements found in 20 CFR part 
667, including the regulations concerning Complaints, Investigations and 
Hearings found at 20 CFR part 667, subpart E through subpart H.
    (c) The Department's regulations codifying the common rules 
implementing Office of Management and Budget (OMB) Circulars which 
generally apply to Federal programs carried out by Indian tribal 
governments and nonprofit organizations, at 29 CFR parts 95, 96, 97, and 
99 as applicable.
    (d) The Department's regulations at 29 CFR part 37, which implement 
the nondiscrimination provisions of WIA section 188, apply to recipients 
of financial assistance under WIA section 166.



Sec.668.150  What definitions apply to terms used in the regulations in this 

part?

    In addition to the definitions found in WIA sections 101 and 166 and 
20 CFR 660.300, the following definitions apply:
    DINAP means the Division of Indian and Native American Programs 
within the Employment and Training Administration of the Department.
    Governing body means a body of representatives who are duly elected, 
appointed by duly elected officials, or selected according to 
traditional tribal means. A governing body must have the authority to 
provide services to and to enter into grants on behalf of the 
organization that selected or designated it.
    Grant Officer means a Department of Labor official authorized to 
obligate Federal funds. Indian or Native American (INA) Grantee means an 
entity which is formally designated under subpart B of this part to 
operate an

[[Page 121]]

INA program and which has a grant agreement under Sec.668.292.
    NEW means the Native Employment Works Program, the tribal work 
program authorized under section 412(a)(2) of the Social Security Act, 
as amended by the Personal Responsibility and Work Opportunity 
Reconciliation Act (Public Law 104-193).
    Underemployed means an individual who is working part time but 
desires full time employment, or who is working in employment not 
commensurate with the individual's demonstrated level of educational 
and/or skill achievement.



  Subpart B_Service Delivery Systems Applicable to Section 166 Programs



Sec.668.200  What are the requirements for designation as an ``Indian or 

Native American (INA) grantee''?

    (a) To be designated as an INA grantee, an entity must have:
    (1) A legal status as a government or as an agency of a government, 
private non-profit corporation, or a consortium which contains at least 
one of these entities;
    (2) The ability to administer INA program funds, as defined at Sec.
668.220; and
    (3) A new (non-incumbent) entity must have a population within the 
designated geographic service area which would provide funding under the 
funding formula found at Sec.668.296(b) in the amount of at least 
$100,000, including any amounts received for supplemental youth services 
under the funding formula at Sec.668.440(a). Incumbent grantees which 
do not meet this dollar threshold for Program Year (PY) 2000 and beyond 
will be grandfathered in. We will make an exception for grantees wishing 
to participate in the demonstration program under Public Law 102-477 if 
all resources to be consolidated under the Public Law 102-477 plan total 
at least $100,000, with at least $20,000 derived from section 166 funds 
as determined by the most recent Census data. Exceptions to this $20,000 
limit may be made for those entities which are close to the limit and 
which have demonstrated the capacity to administer Federal funds and 
operate a successful employment and training program.
    (b) To be designated as a Native American grantee, a consortium or 
its members must meet the requirements of paragraph (a) of this section 
and must:
    (1) Be in close proximity to one another, but they may operate in 
more than one State;
    (2) Have an administrative unit legally authorized to run the 
program and to commit the other members to contracts, grants, and other 
legally-binding agreements; and
    (3) Be jointly and individually responsible for the actions and 
obligations of the consortium, including debts.
    (c) Entities potentially eligible for designation under paragraph 
(a)(1) or (b)(1) of this section are:
    (1) Federally-recognized Indian tribes;
    (2) Tribal organizations, as defined in 25 U.S.C. 450b;
    (3) Alaska Native-controlled organizations representing regional or 
village areas, as defined in the Alaska Native Claims Settlement Act;
    (4) Native Hawaiian-controlled entities;
    (5) Native American-controlled organizations serving Indians; and
    (6) Consortia of eligible entities which individually meets the 
legal requirements for a consortium described in paragraph (c) of this 
section.
    (d) Under WIA section 166(d)(2)(B), individuals who were eligible to 
participate under section 401 of JTPA on August 6, 1998, remain eligible 
to participate under section 166 of WIA. State-recognized tribal 
organizations serving such individuals are considered to be ``Native 
American controlled'' for WIA section 166 purposes.



Sec.668.210  What priority for designation is given to eligible organizations?

    (a) Federally-recognized Indian tribes, Alaska Native entities, or 
consortia that include a tribe or entity will have the highest priority 
for designation. To be designated, the organizations must meet the 
requirements in this subpart. These organizations will be designated for 
those geographic areas and/or populations over which

[[Page 122]]

they have legal jurisdiction. (WIA sec. 166(c)(1).)
    (b) If we decide not to designate Indian tribes or Alaska Native 
entities to serve their service areas, we will enter into arrangements 
to provide services with entities which the tribes or Alaska Native 
entities involved approve.
    (c) In geographic areas not served by Indian tribes or Alaska Native 
entities, entities with a Native American-controlled governing body and 
which are representative of the Native American community or communities 
involved will have priority for designation.



Sec.668.220  What is meant by the ``ability to administer funds'' for 

designation purposes?

    An organization has the ``ability to administer funds'' if it:
    (a) Is in compliance with Departmental debt management procedures, 
if applicable;
    (b) Has not been found guilty of fraud or criminal activity which 
would affect the entity's ability to safeguard Federal funds or deliver 
program services;
    (c) Can demonstrate that it has or can acquire the necessary program 
and financial management personnel to safeguard Federal funds and 
effectively deliver program services; and
    (d) Can demonstrate that it has successfully carried out, or has the 
capacity to successfully carry out activities that will strengthen the 
ability of the individuals served to obtain or retain unsubsidized 
employment.



Sec.668.230  How will we determine an entity's ``ability to administer 

funds''?

    (a) Before determining which entity to designate for a particular 
service area, we will conduct a review of the entity's ability to 
administer funds.
    (b) The review for an entity that has served as a grantee in either 
of the two designation periods before the one under consideration, also 
will consider the extent of compliance with the WIA regulations. 
Evidence of the ability to administer funds may be established by a 
satisfactory Federal audit record. It may also be established by a 
recent record showing substantial compliance with Federal record 
keeping, reporting, program performance standards, or similar standards 
imposed on grantees by this or other public sector supported programs.
    (c) For other entities, the review includes the experience of the 
entity's management in administering funds for services to Native 
American people. This review also includes an assessment of the 
relationship between the entity and the Native American community or 
communities to be served.

[65 FR 49435, Aug. 11, 2000, as amended at 71 FR 35524, June 21, 2006]



Sec.668.240  What is the process for applying for designation as an INA 

grantee?

    (a) Every entity seeking designation must submit a Notice of Intent 
(NOI) which complies with the requirements of the Solicitation for Grant 
Application (SGA). An SGA will be issued every two years, covering all 
areas except for those for which competition is waived for the incumbent 
grantee under WIA section 166(c)(2).
    (b) NOI's must be submitted to the Chief of DINAP, bearing a U.S. 
Postal Service postmark indicating its submission no later than October 
1st of the year which precedes the first year of a new designation cycle 
(unless the SGA provides a later date). For NOI's received after October 
1, only a timely official U.S. Postal Service postmark is acceptable as 
proof of timely submission. Dates indicating submission by private 
express delivery services or metered mail are unacceptable as proof of 
the timely submission of designation documents.
    (c) NOI's must include the following:
    (1) Documentation of the legal status of the entity, as described in 
Sec.668.200(a)(1);
    (2) A Standard Form (SF) 424b;
    (3) The assurances required by 29 CFR 37.20;
    (4) A specific description, by State, county, reservation or similar 
area, or service population, of the geographic area for which the entity 
requests designation;
    (5) A brief summary of the employment and training or human resource 
development programs serving Native Americans that the entity currently 
operates or has operated within the previous two-year period;

[[Page 123]]

    (6) A description of the planning process used by the entity, 
including the involvement of the governing body and local employers;
    (7) Evidence to establish an entity's ability to administer funds 
under Sec. Sec.668.220 through 668.230.



Sec.668.250  What happens if two or more entities apply for the same area?

    (a) Every two years, unless there has been a waiver of competition 
for the area, we issue a Solicitation for Grant Application (SGA) 
seeking applicants for INA program grants.
    (b) If two or more entities apply for grants for the same service 
area, or for overlapping service areas, and a waiver of competition 
under WIA section 166(c)(2) is not granted to the incumbent grantee, the 
following additional procedures apply:
    (1) The Grant Officer will follow the regulations for priority 
designation at Sec.668.210.
    (2) If no applicant is entitled to priority designation, DINAP will 
inform each entity which submitted a NOI, including the incumbent 
grantee, in writing, of all the competing Notices of Intent no later 
than November 15 of the year the NOI's are received.
    (3) Each entity will have an opportunity to describe its service 
plan, and may submit additional information addressing the requirements 
of Sec.668.240(c) or such other information as the applicant 
determines is appropriate. Revised Notices must be received or contain 
an official U.S. Postal Service postmark, no later than January 5th 
(unless a later date is provided in DINAP's information notice).
    (4) The Grant Officer selects the entity that demonstrates the 
ability to produce the best outcomes for its customers.



Sec.668.260  How are INA grantees designated?

    (a) On March 1 of each designation year, we designate or 
conditionally designate Native American grantees for the coming two 
program years. The Grant Officer informs, in writing, each entity which 
submitted a Notice of Intent that the entity has been:
    (1) Designated;
    (2) Conditionally designated;
    (3) Designated for only a portion of its requested area or 
population; or
    (4) Denied designation.
    (b) Designated Native American entities must ensure and provide 
evidence to DOL that a system is in place to afford all members of the 
eligible population within their service area an equitable opportunity 
to receive employment and training activities and services.



Sec.668.270  What appeal rights are available to entities that are denied 

designation?

    Any entity that is denied designation in whole or in part for the 
area or population that it requested may appeal the denial to the Office 
of the Administrative Law Judges using the procedures at 20 CFR 667.800 
or the alternative dispute resolution procedures at 20 CFR 667.840. The 
Grant Officer will provide an entity whose request for designation was 
denied, in whole or in part, with a copy of the appeal procedures.



Sec.668.280  Are there any other ways in which an entity may be designated as 

an INA grantee?

    Yes, for an area which would otherwise go unserved. The Grant 
Officer may designate an entity, which has not submitted an NOI, but 
which meets the qualifications for designation, to serve the particular 
geographic area. Under such circumstances, DINAP will seek the views of 
Native American leaders in the area involved about the decision to 
designate the entity to serve that community. DINAP will inform the 
Grant Officer of their views. The Grant Officer will accommodate their 
views to the extent possible.



Sec.668.290  Can an INA grantee's designation be terminated?

    (a) Yes, the Grant Officer can terminate a grantee's designation for 
cause, or the Secretary or another DOL official confirmed by the Senate 
can terminate a grantee's designation in emergency circumstances where 
termination is necessary to protect the integrity of Federal funds or 
ensure the proper operation of the program. (WIA sec. 184(e).)

[[Page 124]]

    (b) The Grant Officer may terminate a grantee's designation for 
cause only if there is a substantial or persistent violation of the 
requirements in the Act or the WIA regulations. The grantee must be 
provided with written notice 60 days before termination, stating the 
specific reasons why termination is proposed. The appeal procedures at 
20 CFR 667.800 apply.
    (c) The Secretary must give a grantee terminated in emergency 
circumstances prompt notice of the termination and an opportunity for a 
hearing within 30 days of the termination.



Sec.668.292  How does a designated entity become an INA grantee?

    A designated entity becomes a grantee on the effective date of an 
executed grant agreement, signed by the authorized official of the 
grantee organization and the Grant Officer. The grant agreement includes 
a set of certifications and assurances that the grantee will comply with 
the terms of the Act, the WIA regulations, and other appropriate 
requirements. Funds are released to the grantee upon approval of the 
required planning documents, as described in Sec. Sec.668.710 through 
668.740.



Sec.668.294  Do we have to designate an INA grantee for every part of the 

country?

    No, beginning with the PY 2000 grant awards, if there are no 
entities meeting the requirements for designation in a particular area, 
or willing to serve that area, we will not allocate funds for that 
service area. The funds allocated to that area will be distributed to 
the remaining INA grantees, or used for other program purposes such as 
technical assistance and training (TAT). Unawarded funds used for 
technical assistance and training are in addition to, and not subject to 
the limitations on, amounts reserved under Sec.668.296(e). Areas which 
are unserved by the INA program may be restored during a subsequent 
designation cycle, when and if a current grantee or other eligible 
entity applies for and is designated to serve that area.



Sec.668.296  How are WIA funds allocated to INA grantees?

    (a) Except for reserved funds described in paragraph (e) of this 
section and funds used for program purposes under Sec.668.294, all 
funds available for WIA section 166(d)(2)(A)(i) comprehensive workforce 
investment services program at the beginning of a Program Year will be 
allocated to Native American grantees for their designated geographic 
service areas.
    (b) Each INA grantee will receive the sum of the funds calculated 
under the following formula:
    (1) One-quarter of the funds available will be allocated on the 
basis of the number of unemployed Native American persons in the 
grantee's designated INA service area(s) compared to all such persons in 
all such areas in the United States.
    (2) Three-quarters of the funds available will be allocated on the 
basis of the number of Native American persons in poverty in the 
grantee's designated INA service area(s) as compared to all such persons 
in all such areas in the United States.
    (3) The data and definitions used to implement these formulas is 
provided by the U.S. Bureau of the Census.
    (c) In years immediately following the use of new data in the 
formula described in paragraph (b) of this section, based upon criteria 
to be described in the SGA, we may utilize a hold harmless factor to 
reduce the disruption in grantee services which would otherwise result 
from changes in funding levels. This factor will be determined in 
consultation with the grantee community and the Native American 
Employment and Training Council.
    (d) We may reallocate funds from one INA grantee to another if a 
grantee is unable to serve its area for any reason, such as audit or 
debt problems, criminal activity, internal (political) strife, or lack 
of ability or interest. Funds may also be reallocated if a grantee has 
carry-in excess of 20 percent of the total funds available to it. Carry-
in amounts greater than 20 percent but less than 25 percent of total 
funds available may be allowed under an approved waiver issued by DINAP.
    (e) We may reserve up to one percent (1 percent) of the funds 
appropriated

[[Page 125]]

under WIA section 166(d)(2)(A)(i) for any Program Year for TAT purposes. 
Technical assistance will be provided in consultation with the Native 
American Employment and Training Council.



                     Subpart C_Services to Customers



Sec.668.300  Who is eligible to receive services under the INA program?

    (a) A person is eligible to receive services under the INA program 
if that person is:
    (1) An Indian, as determined by a policy of the Native American 
grantee. The grantee's definition must at least include anyone who is a 
member of a Federally-recognized tribe; or
    (2) An Alaska Native, as defined in section 3(b) of the Alaska 
Native Claims Settlement Act (ANCSA), 43 U.S.C. 1602(b); or
    (3) A Native Hawaiian, as defined in WIA section 166(b)(3).
    (b) The person must also be any one of the following:
    (1) Unemployed; or
    (2) Underemployed, as defined in Sec.668.150; or
    (3) A low-income individual, as defined in WIA section 101(25); or
    (4) The recipient of a bona fide lay-off notice which has taken 
effect in the last six months or will take effect in the following six 
month period, who is unlikely to return to a previous industry or 
occupation, and who is in need of retraining for either employment with 
another employer or for job retention with the current employer; or
    (5) An individual who is employed, but is determined by the grantee 
to be in need of employment and training services to obtain or retain 
employment that allows for self-sufficiency.
    (c) If applicable, male applicants must also register or be 
registered for the Selective Service.
    (d) For purposes of determining whether a person is a low-income 
individual under paragraph (b)(3) of this section, we will issue 
guidance for the determination of family income. (WIA sec. 189(h).)



Sec.668.340  What are INA grantee allowable activities?

    (a) The INA grantee may provide any services consistent with the 
purposes of this section that are necessary to meet the needs of Native 
Americans preparing to enter, reenter, or retain unsubsidized 
employment. (WIA sec. 166(d)(1)(B).) Comprehensive workforce investment 
activities authorized under WIA section 166(d)(2) include:
    (b) Core services, which must be delivered in partnership with the 
One-Stop delivery system, include:
    (1) Outreach;
    (2) Intake;
    (3) Orientation to services available;
    (4) Initial assessment of skill levels, aptitudes, abilities and 
supportive service needs;
    (5) Eligibility certification;
    (6) Job Search and placement assistance;
    (7) Career counseling;
    (8) Provision of employment statistics information and local, 
regional, and national Labor Market Information;
    (9) Provision of information about filing of Unemployment Insurance 
claims;
    (10) Assistance in establishing eligibility for Welfare-to-Work 
programs;
    (11) Assistance in establishing eligibility for financial assistance 
for training;
    (12) Provision of information about supportive services;
    (13) Provision of performance and cost information relating to 
training providers and training services; and
    (14) Follow-up services.
    (c) Allowable intensive services which include:
    (1) Comprehensive and specialized testing and assessment;
    (2) Development of an individual employment plan;
    (3) Group counseling;
    (4) Individual counseling and career planning;
    (5) Case Management for seeking training services;
    (6) Short term pre-vocational services;
    (7) Work experience in the public or private sector;
    (8) Tryout employment;
    (9) Dropout prevention activities;

[[Page 126]]

    (10) Supportive services; and
    (11) Other services identified in the approved Two Year Plan.
    (d) Allowable training services which include:
    (1) Occupational skill training;
    (2) On-the-job training;
    (3) Programs that combine workplace training with related 
instruction, which may include cooperative education programs;
    (4) Training programs operated by the private sector;
    (5) Skill upgrading and retraining;
    (6) Entrepreneurial and small business development technical 
assistance and training;
    (7) Job readiness training;
    (8) Adult basic education, GED attainment, literacy training, and 
English language training, provided alone or in combination with 
training or intensive services described paragraphs (c)(1) through (11) 
and (d)(1) through (10) of this section;
    (9) Customized training conducted with a commitment by an employer 
or group of employers to employ an individual upon successful completion 
of training; and
    (10) Educational and tuition assistance.
    (e) Allowable activities specifically designed for youth are 
identified in section 129 of the Act and include:
    (1) Improving educational and skill competencies;
    (2) Adult mentoring;
    (3) Training opportunities;
    (4) Supportive services, as defined in WIA section 101(46);
    (5) Incentive programs for recognition and achievement;
    (6) Opportunities for leadership development, decision-making, 
citizenship and community service;
    (7) Preparation for postsecondary education, academic and 
occupational learning, unsubsidized employment opportunities, and other 
effective connections to intermediaries with strong links to the job 
market and local and regional employers;
    (8) Tutoring, study skills training, and other drop-out prevention 
strategies;
    (9) Alternative secondary school services;
    (10) Summer employment opportunities that are directly linked to 
academic and occupational learning;
    (11) Paid and unpaid work experiences, including internships and job 
shadowing;
    (12) Occupational skill training;
    (13) Leadership development opportunities, as defined in 20 CFR 
664.420;
    (14) Follow-up services, as defined in 20 CFR 664.450;
    (15) Comprehensive guidance and counseling, which may include drug 
and alcohol abuse counseling and referral; and
    (16) Information and referral.
    (f) In addition, allowable activities include job development and 
employment outreach, including:
    (1) Support of the Tribal Employment Rights Office (TERO) program;
    (2) Negotiation with employers to encourage them to train and hire 
participants;
    (3) Establishment of linkages with other service providers to aid 
program participants;
    (4) Establishment of management training programs to support tribal 
administration or enterprises; and
    (5) Establishment of linkages with remedial education, such as Adult 
Basic Education (ABE), basic literacy training, and English-as-a-second-
language (ESL) training programs, as necessary.
    (g) Participants may be enrolled in more than one activity at a time 
and may be sequentially enrolled in multiple activities.
    (h) INA grantees may provide any services which may be carried out 
by fund recipients under any provisions of the Act. (WIA sec. 166(d).)
    (i) In addition, INA grantees must develop programs which contribute 
to occupational development, upward mobility, development of new 
careers, and opportunities for nontraditional employment. (WIA sec. 
195(1).)



Sec.668.350  Are there any restrictions on allowable activities?

    (a) All occupational training must be for occupations for which 
there are employment opportunities in the local area or another area to 
which the participant is willing to relocate. (WIA sec. 
134(d)(4)(A)(iii).)

[[Page 127]]

    (b) INA grantees must provide OJT services consistent with the 
definition provided in WIA section 101(31) and other limitations in the 
Act. Individuals in OJT must:
    (1) Be compensated at the same rates, including periodic increases, 
as trainees or employees who are similarly situated in similar 
occupations by the same employer and who have similar training, 
experience, and skills (WIA sec. 181(a)(1)); and
    (2) Be provided benefits and working conditions at the same level 
and to the same extent as other trainees or employees working a similar 
length of time and doing the same type of work. (WIA sec. 181(b)(5).)
    (c) In addition, OJT contracts under this title must not be entered 
into with employers who have:
    (1) Received payments under previous contracts and have exhibited a 
pattern of failing to provide OJT participants with continued, long-term 
employment as regular employees with wages and employment benefits and 
working conditions at the same level and to the same extent as other 
employees working a similar length of time and doing the same work; or
    (2) Who have violated paragraphs (b)(1) and/or (2) of this section. 
(WIA sec. 195(4).)
    (d) INA grantees are prohibited from using funds to encourage the 
relocation of a business, as described in WIA section 181(d) and 20 CFR 
667.268.
    (e) INA grantees must only use WIA funds for activities which are in 
addition to those that would otherwise be available to the Native 
American population in the area in the absence of such funds. (WIA sec. 
195(2).)
    (f) INA grantees must not spend funds on activities that displace 
currently employed individuals, impair existing contracts for services, 
or in any way affect union organizing.
    (g) Under 20 CFR 667.266, sectarian activities involving WIA 
financial assistance or participants are limited in accordance with the 
provisions of 29 CFR 37.6(f). (WIA sec. 181(b).)



Sec.668.360  What is the role of INA grantees in the One-Stop system?

    (a) In those local workforce investment areas where an INA grantee 
conducts field operations or provides substantial services, the INA 
grantee is a required partner in the local One-Stop delivery system and 
is subject to the provisions relating to such partners described in 20 
CFR part 662. Consistent with those provisions, a Memorandum of 
Understanding (MOU) between the INA grantee and the Local Board over the 
operation of the One-Stop Center(s) in the Local Board's workforce 
investment area also must be executed. Where the Local Board is an 
alternative entity under 20 CFR 661.330, the INA grantee must negotiate 
with the alternative entity on the terms of its MOU and the scope of its 
on-going role in the local workforce investment system, as specified in 
20 CFR 661.310(b)(2). In local areas with a large concentration of 
potentially eligible INA participants, which are in an INA grantee's 
service area but in which the grantee does not conduct operations or 
provide substantial services, the INA grantee should encourage such 
individuals to participate in the One-Stop system in that area in order 
to receive WIA services.
    (b) At a minimum, the MOU must contain provisions related to:
    (1) The services to be provided through the One-Stop Service System;
    (2) The methods for referral of individuals between the One-Stop 
operator and the INA grantee which take into account the services 
provided by the INA grantee and the other One-Stop partners;
    (3) The exchange of information on the services available and 
accessible through the One-Stop system and the INA program;
    (4) As necessary to provide referrals and case management services, 
the exchange of information on Native American participants in the One-
Stop system and the INA program;
    (5) Arrangements for the funding of services provided by the One-
Stop(s), consistent with the requirements at 20 CFR 662.280 that no 
expenditures may be made with INA program funds for individuals who are 
not eligible or for services not authorized under this part.
    (c) The INA grantee's Two Year Plan must describe the efforts the 
grantee

[[Page 128]]

has made to negotiate MOU's consistent with paragraph (b) of this 
section, for each planning cycle during which Local Boards are operating 
under the terms of WIA.



Sec.668.370  What policies govern payments to participants, including wages, 

training allowances or stipends, or direct payments for supportive services?

    (a) INA grantees may pay training allowances or stipends to 
participants for their successful participation in and completion of 
education or training services (except such allowance may not be 
provided to participants in OJT). Allowances or stipends may not exceed 
the Federal or State minimum wage, whichever is higher.
    (b) INA grantees may not pay a participant in a training activity 
when the person fails to participate without good cause.
    (c) If a participant in a WIA-funded activity, including 
participants in OJT, is involved in an employer-employee relationship, 
that participant must be paid wages and fringe benefits at the same 
rates as trainees or employees who have similar training, experience and 
skills and which are not less than the higher of the applicable Federal, 
State or local minimum wage. (WIA sec. 181(a)(1).)
    (d) In accordance with the policy described in the two-year plan, 
INA grantees may pay incentive bonuses to participants who meet or 
exceed individual employability or training goals established in writing 
in the individual employment plan.
    (e) INA grantees must comply with other restrictions listed in WIA 
sections 181 through 199, which apply to all programs funded under title 
I of WIA.
    (f) INA grantees must comply with the provisions on labor standards 
in WIA section 181(b).



Sec.668.380  What will we do to strengthen the capacity of INA grantees to 

deliver effective services?

    We will provide appropriate TAT, as necessary, to INA grantees. This 
TAT will assist INA grantees to improve program performance and enhance 
services to the target population(s), as resources permit. (WIA sec. 
166(h)(5).)



                  Subpart D_Supplemental Youth Services



Sec.668.400  What is the purpose of the supplemental youth services program?

    The purpose of this program is to provide supplemental employment 
and training and related services to Native American youth on or near 
Indian reservations, or in Oklahoma, Alaska, and Hawaii. (WIA sec. 
166(d)(2)(A)(ii).)



Sec.668.410  What entities are eligible to receive supplemental youth services 

funding?

    Eligible recipients for supplemental youth services funding are 
limited to those tribal, Alaska Native, Native Hawaiian and Oklahoma 
tribal grantees funded under WIA section 166(d)(2)(A)(i), or other 
grantees serving those areas and/or populations specified in Sec.
668.400, that received funding under title II-B of the Job Training 
Partnership Act, or that are designated to serve an eligible area as 
specified in WIA section 166(d)(2)(A)(ii).



Sec.668.420  What are the planning requirements for receiving supplemental 

youth services funding?

    Beginning with PY 2000, eligible INA grantees must describe the 
supplemental youth services which they intend to provide in their Two 
Year Plan (described more fully in Sec. Sec.668.710 and 668.720). This 
Plan includes the target population the grantee intends to serve, for 
example, drop-outs, juvenile offenders, and/or college students. It also 
includes the performance measures/standards to be utilized to measure 
program progress.



Sec.668.430  What individuals are eligible to receive supplemental youth 

services?

    (a) Participants in supplemental youth services activities must be 
Native Americans, as determined by the INA grantee according to Sec.
668.300(a), and must meet the definition of Eligible Youth, as defined 
in WIA section 101(13).
    (b)Youth participants must be low-income individuals, except that 
not more than five percent (5%) who do not meet the minimum income 
criteria,

[[Page 129]]

may be considered eligible youth if they meet one or more of the 
following categories:
    (1) School dropouts;
    (2) Basic skills deficient as defined in WIA section 101(4);
    (3) Have educational attainment that is one or more grade levels 
below the grade level appropriate to their age group;
    (4) Pregnant or parenting;
    (5) Have disabilities, including learning disabilities;
    (6) Homeless or runaway youth;
    (7) Offenders; or
    (8) Other eligible youth who face serious barriers to employment as 
identified by the grantee in its Plan. (WIA sec. 129(c)(5).)



Sec.668.440  How is funding for supplemental youth services determined?

    (a) Beginning with PY 2000, supplemental youth funding will be 
allocated to eligible INA grantees on the basis of the relative number 
of Native American youth between the ages of 14 and 21, inclusive, in 
the grantee's designated INA service area as compared to the number of 
Native American youth in other eligible INA service areas. We reserve 
the right to redetermine this youth funding stream in future program 
years, in consultation with the Native American Employment and Training 
Council, as program experience warrants and as appropriate data become 
available.
    (b) The data used to implement this formula is provided by the U.S. 
Bureau of the Census.
    (c) The hold harmless factor described in Sec.668.296(c) also 
applies to supplemental youth services funding. This factor also will be 
determined in consultation with the grantee community and the Native 
American Employment and Training Council.
    (d) The reallocation provisions of Sec.668.296(d) also apply to 
supplemental youth services funding.
    (e) Any supplemental youth services funds not allotted to a grantee 
or refused by a grantee may be used for the purposes outlined in Sec.
668.296(e), as described in Sec.668.294. Any such funds are in 
addition to, and not subject to the limitations on, amounts reserved 
under Sec.668.296(e).



Sec.668.450  How will supplemental youth services be provided?

    (a) INA grantees may offer supplemental services to youth throughout 
the school year, during the summer vacation, and/or during other breaks 
during the school year at their discretion;
    (b) We encourage INA grantees to work with Local Educational 
Agencies to provide academic credit for youth activities whenever 
possible;
    (c) INA grantees may provide participating youth with the activities 
listed in 20 CFR 668.340(e).



Sec.668.460  Are there performance measures and standards applicable to the 

supplemental youth services program?

    Yes, WIA section 166(e)(5) requires that the program plan contain a 
description of the performance measures to be used to assess the 
performance of grantees in carrying out the activities assisted under 
this section. We will develop specific indicators of performance and 
levels of performance for supplemental youth services activities in 
partnership with the Native American Employment and Training Council, 
and will transmit them to INA grantees as an administrative issuance.



                    Subpart E_Services to Communities



Sec.668.500  What services may INA grantees provide to or for employers under 

section 166?

    (a) INA grantees may provide a variety of services to employers in 
their areas. These services may include:
    (1) Workforce planning which involves the recruitment of current or 
potential program participants, including job restructuring services;
    (2) Recruitment and assessment of potential employees, with priority 
given to potential employees who are or who might become eligible for 
program services;
    (3) Pre-employment training;
    (4) Customized training;
    (5) On-the-Job training (OJT);
    (6) Post-employment services, including training and support 
services to encourage job retention and upgrading;
    (7) Work experience for public or private sector work sites;

[[Page 130]]

    (8) Other innovative forms of worksite training.
    (b) In addition to the services listed in paragraph (a) of this 
section, other grantee-determined services (as described in the 
grantee's Two Year Plan) which are intended to assist eligible 
participants to obtain or retain employment may also be provided to or 
for employers.



Sec.668.510  What services may INA grantees provide to the community at large 

under section 166?

    (a) INA grantees may provide services to the Native American 
communities in their designated service areas by engaging in program 
development and service delivery activities which:
    (1) Strengthen the capacity of Native American-controlled 
institutions to provide education and work-based learning services to 
Native American youth and adults, whether directly or through other 
Native American institutions such as tribal colleges;
    (2) Increase the community's capacity to deliver supportive 
services, such as child care, transportation, housing, health, and 
similar services needed by clients to obtain and retain employment;
    (3) Use program participants engaged in education, training, work 
experience, or similar activities to further the economic and social 
development of Native American communities in accordance with the goals 
and values of those communities; and
    (4) Engage in other community-building activities described in the 
INA grantee's Two Year Plan.
    (b) INA grantees should develop their Two Year Plan in conjunction 
with, and in support of, strategic tribal planning and community 
development goals.



Sec.668.520  Must INA grantees give preference to Indian/Native American 

entities in the selection of contractors or service providers?

    Yes, INA grantees must give as much preference as possible to Indian 
organizations and to Indian-owned economic enterprises, as defined in 
section 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452), when 
awarding any contract or subgrant.



Sec.668.530  What rules govern the issuance of contracts and/or subgrants?

    In general, INA grantees must follow the rules of OMB Circulars A-
102 (for tribes) or A-110 (for private non-profits) when awarding 
contracts and/or subgrants under WIA section 166. The common rules 
implementing those circulars are codified for DOL-funded programs at 29 
CFR part 97 (A-102) or 29 CFR part 95 (A-110), and covered in the WIA 
regulations at 20 CFR 667.200. These rules do not apply to OJT contract 
awards.



         Subpart F_Accountability for Services and Expenditures



Sec.668.600  To whom is the INA grantee accountable for the provision of 

services and the expenditure of INA funds?

    (a) The INA grantee is responsible to the Native American community 
to be served by INA funds.
    (b) The INA grantee is also responsible to the Department of Labor, 
which is charged by law with ensuring that all WIA funds are expended:
    (1) According to applicable laws and regulations;
    (2) For the benefit of the identified Native American client group; 
and
    (3) For the purposes approved in the grantee's plan and signed grant 
document.



Sec.668.610  How is this accountability documented and fulfilled?

    (a) Each INA grantee must establish its own internal policies and 
procedures to ensure accountability to the INA grantee's governing body, 
as the representative of the Native American community(ies) served by 
the INA program. At a minimum, these policies and procedures must 
provide a system for governing body review and oversight of program 
plans and measures and standards for program performance.
    (b) Accountability to the Department is accomplished in part through 
on-site program reviews (monitoring), which strengthen the INA grantee's 
capability to deliver effective services and protect the integrity of 
Federal funds.

[[Page 131]]

    (c) In addition to audit information, as described at Sec.668.850 
and program reviews, accountability to the Department is documented and 
fulfilled by the submission of reports. For the purposes of report 
submission, a postmark or date indicating receipt by a private express 
delivery service is acceptable proof of timely submission. These report 
requirements are as follows:
    (1) Each INA grantee must submit an annual report on program 
participants and activities. This report must be received no later than 
90 days after the end of the Program Year, and may be combined with the 
report on program expenditures. The reporting format is developed by 
DINAP, in consultation with the Native American Advisory Council, and 
published in the Federal Register.
    (2) Each INA grantee must submit an annual report on program 
expenditures. This report must be received no later than 90 days after 
the end of the Program Year, and may be combined with the report on 
program participants and activities.
    (3) INA grantees are encouraged, but not required, to submit a 
descriptive narrative with their annual reports describing the barriers 
to successful plan implementation they have encountered. This narrative 
should also discuss program successes and other notable occurrences that 
effected the INA grantee's overall performance that year.
    (4) Each INA grantee may be required to submit interim reports on 
program participants and activities and/or program expenditures during 
the Program Year. Interim reports must be received no later than 45 days 
after the end of the reporting period.



Sec.668.620  What performance measures are in place for the INA program?

    Indicators of performance measures and levels of performance in use 
for INA program will be those indicators and standards proposed in 
individual grantee plans and approved by us, in accordance with 
guidelines we will develop in consultation with INA grantees under WIA 
section 166(h)(2)(A).



Sec.668.630  What are the requirements for preventing fraud and abuse under 

section 166?

    (a) Each INA grantee must implement program and financial management 
procedures to prevent fraud and abuse. Such procedures must include a 
process which enables the grantee to take action against contractors or 
subgrantees to prevent any misuse of funds. (WIA sec. 184.)
    (b) Each INA grantee must have rules to prevent conflict of interest 
by its governing body. These conflict of interest rules must include a 
rule prohibiting any member of any governing body or council associated 
with the INA grantee from voting on any matter which would provide a 
direct financial benefit to that member, or to a member of his or her 
immediate family, in accordance with 20 CFR 667.200(a)(4) and 29 CFR 
97.36(b) or 29 CFR 95.42.
    (c) Officers or agents of the INA grantee must not solicit or 
personally accept gratuities, favors, or anything of monetary value from 
any actual or potential contractor, subgrantee, vendor or participant. 
This rule must also apply to officers or agents of the grantee's 
contractors and/or subgrantees. This prohibition does not apply to:
    (1) Any rebate, discount or similar incentive provided by a vendor 
to its customers as a regular feature of its business;
    (2) Items of nominal monetary value distributed consistent with the 
cultural practices of the Native American community served by the 
grantee.
    (d) No person who selects program participants or authorizes the 
services provided to them may select or authorize services to any 
participant who is such a person's husband, wife, father, mother, 
brother, sister, son, or daughter unless:
    (1)(i) The participant involved is a low income individual; or
    (ii) The community in which the participant resides has a population 
of less than 1,000 Native American people; and
    (2) The INA grantee has adopted and implemented the policy described 
in the Two Year Plan to prevent favoritism on behalf of such relatives.
    (e) INA grantees are subject to the provisions of 41 U.S.C. 53 
relating to kickbacks.

[[Page 132]]

    (f) No assistance provided under this Act may involve political 
activities. (WIA sec. 195(6).)
    (g) INA grantees may not use funds under this Act for lobbying, as 
provided in 29 CFR part 93.
    (h) The provisions of 18 U.S.C. 665 and 666 prohibiting embezzlement 
apply to programs under WIA.
    (i) Recipients of financial assistance under WIA section 168 are 
prohibited from discriminatory practices as outlined at WIA section 188, 
and the regulations implementing WIA section 188, at 29 CFR part 37. 
However, this does not affect the legal requirement that all INA 
participants be Native American. Also, INA grantees are not obligated to 
serve populations other than those for which they were designated.



Sec.668.640  What grievance systems must a section 166 program provide?

    INA grantees must establish grievance procedures consistent with the 
requirements of WIA section 181(c) and 20 CFR 667.600.



Sec.668.650  Can INA grantees exclude segments of the eligible population?

    (a) No, INA grantees cannot exclude segments of the eligible 
population. INA grantees must document in their Two Year Plan that a 
system is in place to afford all members of the eligible population 
within the service area for which the grantee was designated an 
equitable opportunity to receive WIA services and activities.
    (b) Nothing in this section restricts the ability of INA grantees to 
target subgroups of the eligible population (for example, the disabled, 
substance abusers, TANF recipients, or similar categories), as outlined 
in an approved Two Year Plan. However, it is unlawful to target services 
to subgroups on grounds prohibited by WIA section 188 and 29 CFR part 
37, including tribal affilitation (which is considered national origin). 
Outreach efforts, on the other hand, may be targeted to any subgroups.



             Subpart G_Section 166 Planning/Funding Process



Sec.668.700  What process must an INA grantee use to plan its employment and 

training services?

    (a) An INA grantee may utilize the planning procedures it uses to 
plan other activities and services.
    (b) However, in the process of preparing its Two Year Plan for 
Native American WIA services, the INA grantee must consult with:
    (1) Customers or prospective customers of such services;
    (2) Prospective employers of program participants or their 
representatives;
    (3) Service providers, including local educational agencies, which 
can provide services which support or are complementary to the grantee's 
own services; and
    (4) Tribal or other community officials responsible for the 
development and administration of strategic community development 
efforts.



Sec.668.710  What planning documents must an INA grantee submit?

    Each grantee receiving funds under WIA section 166 must submit to 
DINAP a comprehensive services plan and a projection of participant 
services and expenditures covering the two-year planning cycle. We will, 
in consultation with the Native American Advisory Council, issue budget 
and planning instructions which grantees must use when preparing their 
plan.



Sec.668.720  What information must these planning documents contain?

    (a) The comprehensive services plan must cover the two Program Years 
included within a designation cycle. According to planning instructions 
issued by the Department, the comprehensive services plan must describe 
in narrative form:
    (1) The specific goals of the INA grantee's program for the two 
Program Years involved;
    (2) The method the INA grantee will use to target its services to 
specific segments of its service population;
    (3) The array of services which the INA grantee intends to make 
available;
    (4) The system the INA grantee will use to be accountable for the 
results of

[[Page 133]]

its program services. Such results must be judged in terms of the 
outcomes for individual participants and/or the benefits the program 
provides to the Native American community(ies) which the INA grantee 
serves. Plans must include the performance information required by Sec.
668.620;
    (5) The ways in which the INA grantee will seek to integrate or 
coordinate and ensure nonduplication of its employment and training 
services with:
    (i) The One-Stop delivery system in its local workforce investment 
area, including a description of any MOU's which affect the grantee's 
participation;
    (ii) Other services provided by Local Workforce Investment Boards;
    (iii) Other program operators;
    (iv) Other services available within the grantee organization; and
    (v) Other services which are available to Native Americans in the 
community, including planned participation in the One-Stop system.
    (b) Eligible INA grantees must include in their plan narratives a 
description of activities planned under the supplemental youth program, 
including items described in paragraphs (a)(1) through (5) of this 
section.
    (c) INA grantees must be prepared to justify the amount of proposed 
Administrative Costs, utilizing the definition at 20 CFR 667.220.
    (d) INA grantees' plans must contain a projection of participant 
services and expenditures for each Program Year, consistent with 
guidance issued by the Department.



Sec.668.730  When must these plans be submitted?

    (a) The two-year plans are due at a date specified by DINAP in the 
year in which the two-year designation cycle begins. We will announce 
exact submission dates in the biennial planning instructions.
    (b) Plans from INA grantees who are eligible for supplemental youth 
services funds must include their supplemental youth plans as part of 
their regular Two Year Plan.
    (c) INA grantees must submit modifications for the second year 
reflecting exact funding amounts, after the individual allotments have 
been determined. We will announce the time for their submission, which 
will be no later than June 1 prior to the beginning of the second year 
of the designation cycle.



Sec.668.740  How will we review and approve such plans?

    (a) We will approve a grantee's planning documents before the date 
on which funds for the program become available unless:
    (1) The planning documents do not contain the information specified 
in the regulations in this part and Departmental planning guidance; or
    (2) The services which the INA grantee proposes are not permitted 
under WIA or applicable regulations.
    (b) We may approve a portion of the plan, and disapprove other 
portions. The grantee also has the right to appeal the decision to the 
Office of the Administrative Law Judges under the procedures at 20 CFR 
667.800 or 667.840. While the INA grantee exercises its right to appeal, 
the grantee must implement the approved portions of the plan.
    (c) If we disapprove all or part of an INA grantee's plan, and that 
disapproval is sustained in the appeal process, the INA grantee will be 
given the opportunity to amend its plan so that it can be approved.
    (d) If an INA grantee's plan is amended but is still disapproved, 
the grantee will have the right to appeal the decision to the Offices of 
the Administrative Law Judges under the procedures at 20 CFR 667.800 or 
667.840.



Sec.668.750  Under what circumstances can we or the INA grantee modify the 

terms of the grantee's plan(s)?

    (a) We may unilaterally modify the INA grantee's plan to add funds 
or, if required by Congressional action, to reduce the amount of funds 
available for expenditure.
    (b) The INA grantee may request approval to modify its plan to add, 
expand, delete, or diminish any service allowable under the regulations 
in this part. The INA grantee may modify its plan without our approval, 
unless the modification reduces the total number of participants to be 
served annually

[[Page 134]]

under the grantee's program by a number which exceeds 25 percent of the 
participants previously proposed to be served, or by 25 participants, 
whichever is larger.
    (c) We will act upon any modification within thirty (30) calendar 
days of receipt of the proposed modification. In the event that further 
clarification or modification is required, we may extend the thirty (30) 
day time frame to conclude appropriate negotiations.



                  Subpart H_Administrative Requirements



Sec.668.800  What systems must an INA grantee have in place to administer an 

INA program?

    (a) Each INA grantee must have a written system describing the 
procedures the grantee uses for:
    (1) The hiring and management of personnel paid with program funds;
    (2) The acquisition and management of property purchased with 
program funds;
    (3) Financial management practices;
    (4) A participant grievance system which meets the requirements in 
section 181(c) of WIA and 20 CFR 667.600; and
    (5) A participant records system.
    (b) Participant records systems must include:
    (1) A written or computerized record containing all the information 
used to determine the person's eligibility to receive program services;
    (2) The participant's signature certifying that all the eligibility 
information he or she provided is true to the best of his/her knowledge; 
and
    (3) The information necessary to comply with all program reporting 
requirements.



Sec.668.810  What types of costs are allowable expenditures under the INA 

program?

    Rules relating to allowable costs under WIA are covered in 20 CFR 
667.200 through 667.220.



Sec.668.820  What rules apply to administrative costs under the INA program?

    The definition and treatment of administrative costs are covered in 
20 CFR 667.210(b) and 667.220.



Sec.668.825  Does the WIA administrative cost limit for States and local areas 

apply to section 166 grants?

    No, under 20 CFR 667.210(b), limits on administrative costs for 
section 166 grants will be negotiated with the grantee and identified in 
the grant award document.



Sec.668.830  How should INA program grantees classify costs?

    Cost classification is covered in the WIA regulations at 20 CFR 
667.200 through 667.220. For purposes of the INA program, program costs 
also include costs associated with other activities such as Tribal 
Employment Rights Office (TERO), and supportive services, as defined in 
WIA section 101(46).



Sec.668.840  What cost principles apply to INA funds?

    The cost principles described in OMB Circulars A-87 (for tribal 
governments), A-122 (for private non-profits), and A-21 (for educational 
institutions), and the regulations at 20 CFR 667.200(c), apply to INA 
grantees, depending on the nature of the grantee organization.



Sec.668.850  What audit requirements apply to INA grants?

    The audit requirements established under the Department's 
regulations at 29 CFR part 99, which implement OMB Circular A-133, apply 
to all Native American WIA grants. These regulations, for all of WIA 
title I, are cited at 20 CFR 667.200(b). Audit resolution procedures are 
covered at 20 CFR 667.500 and 667.510.



Sec.668.860  What cash management procedures apply to INA grant funds?

    INA grantees must draw down funds only as they actually need them. 
The U.S. Department of Treasury regulations which implement the Cash 
Management Improvement Act, found at 31 CFR part 205, apply by law to 
most recipients of Federal funds. Special rules

[[Page 135]]

may apply to those grantees required to keep their funds in interest-
bearing accounts, and to grantees participating in the demonstration 
under Public Law 102-477.



Sec.668.870  What is ``program income'' and how is it regulated in the INA 

program?

    (a) Program income is defined and regulated by WIA section 195(7), 
20 CFR 667.200(a)(5) and the applicable rules in 29 CFR parts 95 and 97.
    (b) For grants made under this part, program income does not include 
income generated by the work of a work experience participant in an 
enterprise, including an enterprise owned by an Indian tribe or Alaska 
Native entity, whether in the public or private sector.
    (c) Program income does not include income generated by the work of 
an OJT participant in an establishment under paragraph (b) of this 
section.



               Subpart I_Miscellaneous Program Provisions



Sec.668.900  Does WIA provide regulatory and/or statutory waiver authority?

    Yes, WIA section 166(h)(3) permits waivers of any statutory or 
regulatory requirement imposed upon INA grantees (except for the areas 
cited in Sec.668.920). Such waivers may include those necessary to 
facilitate WIA support of long term community development goals.



Sec.668.910  What information is required to document a requested waiver?

    To request a waiver, an INA grantee must submit a plan indicating 
how the waiver will improve the grantee's WIA program activities. We 
will provide further guidance on the waiver process, consistent with the 
provisions of WIA section 166(h)(3).



Sec.668.920  What provisions of law or regulations may not be waived?

    Requirements relating to:
    (a) Wage and labor standards;
    (b) Worker rights;
    (c) Participation and protection of workers and participants;
    (d) Grievance procedures;
    (e) Judicial review; and
    (f) Non-discrimination may not be waived. (WIA sec. 166(h)(3)(A).)



Sec.668.930  May INA grantees combine or consolidate their employment and 

training funds?

    Yes, INA grantees may consolidate their employment and training 
funds under WIA with assistance received from related programs in 
accordance with the provisions of the Indian Employment, Training and 
Related Services Demonstration Act of 1992 (Public Law 102-477) (25 
U.S.C. 3401 et seq.). Also, Federally-recognized tribes that administer 
INA funds and funds provided by more than one State under other sections 
of WIA title I may enter into an agreement with the Governors to 
transfer the State funds to the INA program. (WIA sec. 166(f) and 
(h)(6).)



Sec.668.940  What is the role of the Native American Employment and Training 

Council?

    The Native American Employment and Training Council is a body 
composed of representatives of the grantee community which advises the 
Secretary on all aspects of Native American employment and training 
program implementation. WIA section 166(h)(4) continues the Council 
essentially as it is currently constituted, with the exception that all 
the Council members no longer have to be Native American. However, the 
nature of the consultative process remains essentially unchanged. We 
continue to support the Council.



PART 669_NATIONAL FARMWORKER JOBS PROGRAM UNDER TITLE I OF THE WORKFORCE 

INVESTMENT ACT--Table of Contents



                    Subpart A_Purpose and Definitions

Sec.
669.100 What is the purpose of the National Farmworker Jobs Program 
          (NFJP) and the other services and activities established under 
          WIA section 167?
669.110 What definitions apply to this program?
669.120 How do we administer the NFJP program?
669.130 What unit within the Department administers the National 
          Farmworker Jobs Program funded under WIA section 167?

[[Page 136]]

669.140 How does the Division of Seasonal and Farmworker Programs (DSFP) 
          assist the MSFW grantee organizations to serve farmworker 
          customers?
669.150 How are regulations established for this program?
669.160 How do we consult with NFJP organizations in developing rules, 
          regulations and standards of accountability, and other policy 
          guidance for the NFJP?
669.170 What WIA regulations apply to the programs funded under WIA 
          section 167?

 Subpart B_The Service Delivery System for the National Farmworker Jobs 
                                 Program

669.200 Who is eligible to receive an NFJP grant?
669.210 How does an eligible entity become an NFJP grantee?
669.220 What is the role of the NFJP grantee in the One-Stop delivery 
          system?
669.230 Can an NFJP grantee's designation be terminated?
669.240 How will we use funds appropriated under WIA section 167 for the 
          NFJP?

 Subpart C_The National Farmworker Jobs Program Customers and Available 
                            Program Services

669.300 What are the general responsibilities of the NFJP grantees?
669.310 What are the basic components of an NFJP service delivery 
          strategy?
669.320 Who is eligible to receive services under the NFJP?
669.330 How are services delivered to the customer?
669.340 What core services are available to eligible MSFW's?
669.350 How are core services delivered to MSFW's?
669.360 May grantees provide emergency assistance to MSFW's?
669.370 What intensive services may be provided to eligible MSFW's?
669.380 What is the objective assessment that is authorized as an 
          intensive service?
669.400 What are the elements of the Individual Employment Plan that is 
          authorized as an intensive service?
669.410 What training services may be provided to eligible MSFW's?
669.420 What must be included in an on-the-job training contract?
669.430 What Related Assistance services may be provided to eligible 
          farmworkers?
669.440 When may farmworkers receive related assistance?

   Subpart D_Performance Accountability, Planning and Waiver Provision

669.500 What performance measures and standards apply to the NFJP?
669.510 What planning documents must an NFJP grantee submit?
669.520 What information is required in the NFJP grant plans?
669.530 What are the submission dates for these plans?
669.540 Under what circumstances are the terms of the grantee's plan 
          modified by the grantee or the Department?
669.550 How are costs classified under the NFJP?
669.555 Do the WIA administrative cost limits for States and local areas 
          apply to NFJP grants?
669.560 Are there regulatory and/or statutory waiver provisions that 
          apply to WIA section 167?
669.570 What information is required to document a requested waiver?

                    Subpart E_The MSFW Youth Program

669.600 What is the purpose of the WIA section 167 MSFW Youth Program?
669.610 What is the relationship between the MSFW youth program and the 
          NFJP authorized at WIA section 167?
669.620 How do the MSFW youth program regulations apply to the NFJP 
          programs authorized under WIA section 167?
669.630 What are the requirements for designation as an ``MSFW youth 
          program grantee''?
669.640 What is the process for applying for designation as an MSFW 
          youth program grantee?
669.650 How are MSFW youth funds allocated to section 167 youth 
          grantees?
669.660 What planning documents and information are required in the 
          application for MSFW youth grants and when must they be filed?
669.670 Who is eligible to receive services under the section 167 MSFW 
          youth program?
669.680 What activities and services may be provided under the MSFW 
          youth program?

    Authority: Section 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49445, Aug. 11, 2000, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec.669.100  What is the purpose of the National Farmworker Jobs Program 

(NFJP) and the other services and activities established under WIA section 

167?

    The purpose of the NFJP, and the other services and activities 
established under WIA section 167, is to

[[Page 137]]

strengthen the ability of eligible migrant and seasonal farmworkers and 
their families to achieve economic self-sufficiency. This part provides 
the regulatory requirements applicable to the expenditure of WIA section 
167 funds for such programs, services and activities.



Sec.669.110  What definitions apply to this program?

    In addition to the definitions found in WIA sections 101 and 167 and 
in 20 CFR 660.300, the following definitions apply to programs under 
this part:
    Allowances means direct payments, which must not exceed the higher 
of the State or Federal minimum wage, made to NFJP participants during 
their enrollment to enable them to participate in intensive or training 
services.
    Capacity enhancement means the technical assistance we provide to 
grantees and grantee staff by the Department to improve the quality of 
the program and the delivery of program services to NFJP participants.
    Dependent means an individual who:
    (1) Was claimed as a dependent on the qualifying farmworker's 
federal income tax return for the previous year; or
    (2) Is the spouse of the qualifying farmworker; or
    (3) If not claimed as a dependent for federal income tax purposes, 
is able to establish:
    (i) A relationship as the farmworker's
    (A) Child, grandchild, great grandchild, including legally adopted 
children;
    (B) Stepchild;
    (C) Brother, sister, half brother, half sister, stepbrother, or 
stepsister;
    (D) Parent, grandparent, or other direct ancestor but not foster 
parent;
    (E) Foster child;
    (F) Stepfather or stepmother;
    (G) Uncle or aunt;
    (H) Niece or nephew;
    (I) Father-in-law, mother-in-law, son-in-law; or
    (J) Daughter-in-law, brother-in-law, or sister-in-law; and
    (ii) The receipt of over half of his/her total support from the 
eligible farmworker's family during the eligibility determination 
period.
    Disadvantaged means a farmworker whose income, for any 12 
consecutive months out of the 24 months immediately before the 
farmworker applies for the program, does not exceed the higher of either 
the poverty line or 70 percent of the lower living standard income 
level, adjusted for the farmworker's family size and including the 
income of all wage earners, except when its inclusion would be unjust 
due to unstable conditions of the family unit.
    DSFP means the Division of Seasonal Farmworker Programs within the 
Employment and Training Administration of the Department, or a successor 
organizational unit.
    Eligibility determination period means any consecutive 12-month 
period within the 24-month period immediately preceding the date of 
application for the NFJP by the applicant farmworker.
    Emergency assistance means assistance that addresses immediate needs 
of farmworkers and their families, provided by NFJP grantees. Except for 
evidence to support legal working status in the United States and 
Selective Service registration, where applicable, the applicant's self-
attestation is accepted as eligibility for emergency assistance.
    Farmwork means those occupations and industries within agricultural 
production and agricultural services that we identify for the National 
Farmworker Jobs Program.
    Housing development assistance within the NFJP, is a type of related 
assistance consisting of an organized program of education and on-site 
demonstrations about the basic elements of family housing and may 
include financing, site selection, permits and construction skills, 
leading towards home ownership.
    MOU means Memorandum of Understanding.
    MSFW means a Migrant or Seasonal Farmworker under WIA section 167.
    MSFW program grantee means an entity to which we directly award a 
WIA grant to carry out the MSFW program in one or more designated States 
or substate areas.
    National Farmworker Jobs Program (NFJP) is the nationally 
administered

[[Page 138]]

workforce investment program for farmworkers established by WIA section 
167 as a required partner of the One-Stop system.
    Related assistance means short-term forms of direct assistance 
designed to assist farmworkers and their families to retain or stabilize 
their agricultural employment or enrollment in the NFJP.
    Self-certification means a farmworker's signed attestation that the 
information he/she submits to demonstrate eligibility for the NFJP is 
true and accurate.
    Service area means the geographical jurisdiction in which a WIA 
section 167 grantee is designated to operate.
    Work experience means a planned, structured learning experience that 
takes place in a workplace for a limited period of time. Work experience 
may be paid or unpaid, as appropriate.



Sec.669.120  How do we administer the NFJP program?

    This program is centrally administered by the Department of Labor in 
a manner consistent with the requirements of WIA section 167. As 
described in Sec.669.210, we designate grantees using procedures 
consistent with standard Federal government competitive procedures. We 
award other grants and contracts using similar competitive procedures.



Sec.669.130  What unit within the Department administers the National 

Farmworker Jobs Program funded under WIA section 167?

    We have designated the Division of Seasonal Farmworker Programs 
(DSFP), or its successor organization, within the Employment and 
Training Administration, as the organizational unit that administers the 
NFJP and other MSFW programs at the Federal level.



Sec.669.140  How does the Division of Seasonal Farmworker Programs (DSFP) 

assist the MSFW grantee organizations to serve farmworker customers?

    We provide technical assistance and training to MSFW grantees for 
the purposes of program implementation and program performance 
management leading to enhancement of services to and continuous 
improvement in the employment outcomes of farmworkers.



Sec.669.150  How are regulations established for this program?

    In developing regulations for WIA section 167, we consult with the 
Migrant and Seasonal Farmworker Employment and Training Advisory 
Committee. The regulations and program guidance consider the economic 
circumstances and demographics of eligible migrant and seasonal 
farmworkers.



Sec.669.160  How do we consult with NFJP organizations in developing rules, 

regulations and standards of accountability, and other policy guidance for the 

NFJP?

    (a) We consider the NFJP grantee community as a full partner in the 
development of policies for the NFJPs under the Act.
    (b) We have established and continue to support the Federal MSFW 
Employment and Training Advisory Committee. Through the Advisory 
Committee, we actively seek and consider the views of the grantee 
community before establishing policies and/or program regulations, 
according to the requirements of WIA section 167.



Sec.669.170  What WIA regulations apply to the programs funded under WIA 

section 167?

    (a) The regulations found in this part;
    (b) The general administrative requirements found in 20 CFR part 
667, including the regulations concerning Complaints, Investigations and 
Hearings found at 20 CFR part 667, subpart E through subpart H, which 
cover programs under WIA section 167;
    (c) The Department's regulations codifying the common rules 
implementing Office of Management and Budget (OMB) Circulars, which 
generally apply to Federal programs carried out by State and local 
governments and nonprofit organizations at 29 CFR parts 95, 96, 97, and 
99, as applicable.
    (d) The regulations on partnership responsibilities contained in 20 
CFR parts 661 (Statewide and Local Governance) and 662 (the One-Stop 
System).
    (e) The Department's regulations at 29 CFR part 37, which implement 
the

[[Page 139]]

nondiscrimination provisions of WIA section 188, apply to recipients of 
financial assistance under WIA section 167.



 Subpart B_The Service Delivery System for the National Farmworker Jobs 

                                 Program



Sec.669.200  Who is eligible to receive a NFJP grant?

    (a) To be eligible to receive a grant under this section, an entity 
must have:
    (1) An understanding of the problems of eligible migrant and 
seasonal farmworkers and their dependents;
    (2) A familiarity with the agricultural industry and the labor 
market needs of the geographic area to be served;
    (3) The capacity to effectively administer a diversified program of 
workforce investment activities and related assistance for eligible 
migrant and seasonal farmworkers (including farmworker youth) as 
described in paragraph (b) of this section;
    (4) The capacity to work effectively as a One-Stop partner.
    (b) For purposes of paragraph (a)(3) of this section, an entity's 
``capacity to effectively administer'' a program may be demonstrated by:
    (1) Organizational experience; or
    (2) Significant experience of its key staff in administering similar 
programs.
    (c) For purposes of paragraph (a)(4) of this section, an applicant 
may demonstrate its capacity to work effectively as a One-Stop partner 
through its existing relationships with Local Workforce Investment 
Boards and other One-Stop partners, as evidenced through One-Stop system 
participation and successful MOU negotiations.
    (d) As part of the evaluation of the applicant's capacity to work 
effectively as a One-Stop partner under paragraph (a)(4) of this 
section:
    (1) The Grant Officer must determine whether the policies or actions 
of any Local Board established under the authorty of the alternative 
entity provision of WIA section 117(i) and 20 CFR 661.330:
    (i) Preclude One-Stop system participation by the applicant or 
existing NFJP grantee; or
    (ii) For the prior program year, contributed to a failure to reach 
agreement on the terms of the MOU required under Sec.669.220; and
    (2) If the Grant Officer's determinations under paragraph (d)(1) of 
this section are affirmative, then the Grant Officer may consider this 
fact when weighing the capacity of the competitors.



Sec.669.210  How does an eligible entity become an NFJP grantee?

    To become an NFJP grantee and receive a grant under this subpart, an 
applicant must respond to a Solicitation for Grant Applications (SGA). 
The SGA may contain additional requirements for the grant application or 
the grantee's two-year plan. Under the SGA, grantees will be selected 
using standard Federal Government competitive procedures. The entity's 
proposal must describe a two-year strategy for meeting the needs of 
eligible migrant and seasonal farmworkers in the geographic area the 
entity seeks to serve.



Sec.669.220  What is the role of the NFJP grantee in the One-Stop delivery 

system?

    (a) In those local workforce investment areas where the grantee 
operates its NFJP, the grantee is a required partner of the local One-
Stop delivery system and is subject to the provisions relating to such 
partners described in 20 CFR part 662. Consistent with those provisions, 
the grantee and the Local Board must negotiate an MOU which meets the 
requirements of 20 CFR 662.300 and sets forth their respective 
responsibilities for making the full range of services available through 
the One-Stop system available to farmworkers. Where the Local Board is 
an alternative entity under 20 CFR 661.330, the NFJP grantee must 
negotiate with the Board on the terms of its MOU and the scope of its 
on-going role in the local workforce investment system, as specified in 
20 CFR 661.310(b)(2). In local areas where the grantee does not operate 
its NFJP and there is a large concentration of MSFW's, the grantee

[[Page 140]]

may consider the availability of electronic connections and other means 
to participate in the One-stop system in that area, in order to serve 
those individuals.
    (b) The MOU must provide for appropriate and equitable services to 
MSFW's, and may include costs of services to MSFW's incurred by the One-
Stop that extend beyond Wagner-Peyser funded services and activities.



Sec.669.230  Can an NFJP grantee's designation be terminated?

    Yes, a grantee's designation may be terminated for cause:
    (a) By the Secretary, in emergency circumstances when such action is 
necessary to protect the integrity of Federal funds or ensure the proper 
operation of the program. Any grantee so terminated will be provided 
with written notice and an opportunity for a hearing within 30 days 
after the termination (WIA sec. 184(e)); or
    (b) By the Grant Officer, if there is a substantial or persistent 
violation of the requirements in the Act or the WIA regulations. In such 
a case, the Grant Officer must provide the grantee with 60 days prior 
written notice, stating the reasons why termination is proposed, and the 
applicable appeal procedures.



Sec.669.240  How do we use funds appropriated under WIA section 167 for the 

NFJP?

    (a) At least 94 percent of the funds appropriated each year for WIA 
section 167 activities must be allocated to State service areas, based 
on the distribution of the eligible MSFW population determined under a 
formula which has been published in the Federal Register. Grants are 
awarded under a competitive process for the provision of services to 
eligible farmworkers within each service area.
    (b) The balance, up to 6 percent of the appropriated funds, will be 
used for discretionary purposes, for such activities as grantee 
technical assistance and support of farmworker housing activities.



 Subpart C_The National Farmworker Jobs Program Customers and Available 

                            Program Services



Sec.669.300  What are the general responsibilities of the NFJP grantees?

    Each grantee is responsible for providing needed services in 
accordance with a service delivery strategy described in its approved 
grant plan. These services must reflect the needs of the MSFW population 
in the service area and include the services and training activities 
that are necessary to achieve each participant's employment goals.



Sec.669.310  What are the basic components of an NFJP service delivery 

strategy?

    The NFJP service delivery strategy must include:
    (a) A customer-centered case management approach;
    (b) The provision of workforce investment activities, which include 
core services, intensive services, and training services, as described 
in WIA section 134, as appropriate;
    (c) The arrangements under the MOU's with the applicable Local 
Workforce Investment Boards for the delivery of the services available 
through the One-Stop system to MSFW's; and
    (d) Related assistance services.



Sec.669.320  Who is eligible to receive services under the NFJP?

    Disadvantaged migrant and seasonal farmworkers, as defined in Sec.
669.110, and their dependents are eligible for services funded by the 
NFJP.



Sec.669.330  How are services delivered to the customer?

    To ensure that all services are focused on the customer's needs, 
services are provided through a case-management approach and may 
include: Core, intensive and training services; and related assistance, 
which includes emergency assistance and supportive services. The basic 
services and delivery of case-management activities are further 
described at Sec. Sec.669.340 through 669.410. Consistent with 20 CFR 
part 663, before receiving intensive services, a participant must 
receive at least one core

[[Page 141]]

service, and, prior to receiving training services, a participant must 
receive at least one intensive service.



Sec.669.340  What core services are available to eligible MSFW's?

    The core services identified in WIA section 134(d)(2) are available 
to eligible MSFW's.



Sec.669.350  How are core services delivered to MSFW's?

    (a) The full range of core services are available to MSFW's, as well 
as other individuals, at One-Stop Centers, as described in 20 CFR part 
662.
    (b) Core services must be made available through the One-Stop 
delivery system. The delivery of core services to MSFW's, by the NFJP 
grantee and through the One-Stop system, must be discussed in the 
required MOU between the Local Board and the NFJP grantee.



Sec.669.360  May grantees provide emergency assistance to MSFW's?

    (a) Yes, Emergency Assistance (as defined in Sec.669.110) is a 
form of the related assistance that is authorized under WIA section 
167(d) and may be provided by a grantee as described in the grant plan.
    (b) In providing emergency assistance, the NFJP grantee may use an 
abbreviated eligibility determination process that accepts the 
applicant's self-attestation as final evidence of eligibility, except 
that self-attestation may not be used to establish the requirements of 
legal working status in the United States, and Selective Service 
registration, where applicable.



Sec.669.370  What intensive services may be provided to eligible MSFW's?

    (a) Intensive services available to farmworkers include those 
described in WIA section 134(d)(3)(C).
    (b) Intensive services may also include:
    (1) Dropout prevention activities;
    (2) Allowance payments;
    (3) Work experience, which:
    (i) Is designed to promote the development of good work habits and 
basic work skills at the work-site (work experience may be conducted 
with the public and private non-profit sectors and with the private for-
profit sector when the design for this service is described in the 
approved grant plan); and which:
    (ii)(A) May be paid. Paid work experience must compensate 
participants at no less than the higher of the applicable State or 
Federal minimum wage; or
    (B) May be unpaid. Unpaid work experience must provide tangible 
benefits, in lieu of wages, to those who participate in unpaid work 
experience and the strategy for ensuring that tangible benefits are 
received must be described in the approved grant plan. The benefits to 
the participant must be commensurate with the participant's contribution 
to the hosting organization;
    (4) Literacy and English-as-a-Second language; and
    (5) Other services identified in the approved grant plan.



Sec.669.380  What is the objective assessment that is authorized as an 

intensive service?

    (a) An objective assessment is a procedure designed to 
comprehensively assess the skills, abilities, and interests of each 
employment and training participant through the use of diagnostic 
testing and other assessment tools. The methods used by the grantee in 
conducting the objective assessment may include:
    (1) Structured in-depth interviews;
    (2) Skills and aptitude assessments;
    (3) Performance assessments (for example, skills or work samples, 
including those that measure interest and capability to train in 
nontraditional employment);
    (4) Interest or attitude inventories;
    (5) Career guidance instruments;
    (6) Aptitude tests; and
    (7) Basic skills tests.
    (b) The objective assessment is an ongoing process that requires the 
grantee staff to remain in close consultation with each participant to 
continuously obtain current information about the participant's progress 
that may be relevant to his/her Individual Employment Plan (IEP).



Sec.669.400  What are the elements of the Individual Employment Plan that is 

authorized as an intensive service?

    The elements of the Individual Employment Plan (IEP) are:

[[Page 142]]

    (a) Joint development: The grantee develops the IEP in partnership 
with the participant;
    (b) Customer focus: The combination of services chosen with the 
participant must be consistent with the results of any objective 
assessment, responsive to the expressed goals of the participant, and 
must include periodic evaluation of planned goals and a record of 
accomplishments in consultation with the participant;
    (c) Length/type of service: The type and duration of intensive or 
training services must be based upon:
    (1) The employment/career goal;
    (2) Referrals to other programs for specified activities; and
    (3) The delivery agents and schedules for intensive services, 
training and training-related supportive services; and
    (d) Privacy: As a customer-centered case management tool, an IEP is 
a personal record and must receive confidential treatment.



Sec.669.410  What training services may be provided to eligible MSFW's?

    (a) Training services include those described in WIA sections 
134(d)(4)(D) and 167(d), and may be described in the IEP and may 
include:
    (1) On-the-job training activities under a contract between the 
participating employer and the grantee;
    (2) Training-related supportive services; and
    (b) Other training activities identified in the approved grant plan 
such as training in self-employment skills and micro-enterprise 
development.



Sec.669.420  What must be included in an on-the-job training contract?

    At a minimum, an on-the-job training contract must comply with the 
requirements of WIA sections 195(4) and 101(31) and must include:
    (a) The occupation(s) for which training is to be provided;
    (b) The duration of training;
    (c) The wage rate to be paid to the trainee;
    (d) The rate of reimbursement;
    (e) The maximum amount of reimbursement;
    (f) A training outline that reflects the work skills required for 
the position;
    (g) An outline of any other separate classroom training that may be 
provided by the employer; and
    (h) The employer's agreement to maintain and make available time and 
attendance, payroll and other records to support amounts claimed by the 
employer for reimbursement under the OJT contract.



Sec.669.430  What Related Assistance services may be provided to eligible 

farmworkers?

    Related Assistance may include such services and activities as:
    (a) Emergency Assistance;
    (b) Workplace safety and farmworker pesticide safety instruction;
    (c) Housing development assistance;
    (d) Other supportive services described in the grant plan; and
    (e) English language classes and basic education classes for 
participants not enrolled in intensive or training services.



Sec.669.440  When may farmworkers receive related assistance?

    Farmworkers may receive related assistance services when the need 
for the related assistance is documented for any eligible farmworker or 
dependent in a determination made by the grantee or in a statement by 
the farmworker.



   Subpart D_Performance Accountability, Planning and Waiver Provision



Sec.669.500  What performance measures and standards apply to the NFJP?

    (a) The NFJP will use the core indicators of performance common to 
the adult and youth programs, described in 20 CFR part 666. The levels 
of performance for the farmworker indicators will be established in a 
negotiation between the Department and the grantee. The levels must take 
into account the characteristics of the population to be served and the 
economic conditions in the service area. Proposed levels of performance 
must be included in the grantee plan submission, and the

[[Page 143]]

agreed-upon levels must be included in the approved plan.
    (b) We may develop additional performance indicators with 
appropriate levels of performance for evaluating programs that serve 
farmworkers and which reflect the State service area economy and local 
demographics of eligible MSFW's. The levels of performance for these 
additional indicators must be negotiated with the grantee and included 
in the approved plan.



Sec.669.510  What planning documents must an NFJP grantee submit?

    Each grantee receiving WIA section 167 program funds must submit to 
DSFP a comprehensive service delivery plan and a projection of 
participant services and expenditures covering the two-year designation 
cycle.



Sec.669.520  What information is required in the NFJP grant plans?

    An NFJP grantee's biennial plan must describe:
    (a) The employment and education needs of the farmworker population 
to be served;
    (b) The manner in which proposed services to farmworkers and their 
families will strengthen their ability to obtain or retain employment or 
stabilize their agricultural employment;
    (c) The related assistance and supportive services to be provided 
and the manner in which such assistance and services are to be 
coordinated with other available services;
    (d) The performance indicators and proposed levels of performance 
used to assess the performance of such entity, including the specific 
goals of the grantee's program for the two Program Years involved;
    (e) The method the grantee will use to target its services on 
specific segments of the eligible population, as appropriate;
    (f) The array of services which the grantee intends to make 
available, with costs specified on forms we prescribe. These forms will 
indicate how many participants the grantee expects to serve, by 
activity, the results expected under the grantee's plan, and the 
anticipated expenditures by cost category; and
    (g) Its response to any other requirements set forth in the SGA 
issued under Sec.669.210.



Sec.669.530  What are the submission dates for these plans?

    We will announce plan submission dates in the SGA issued under Sec.
669.220.



Sec.669.540  Under what circumstances are the terms of the grantee's plan 

modified by the grantee or the Department?

    (a) Plans must be modified to reflect the funding level for the 
second year of the designation cycle. We will provide instructions for 
when to submit modifications for second year funding, which will 
generally be no later than June 1 prior to the beginning of the second 
year of the designation cycle.
    (b) We may unilaterally modify the grantee's plan to add funds or, 
if the total amount of funds available for allotment is reduced by 
Congress, to reduce each grantee's grant amount.
    (c) The grantee may modify its plan to add, delete, expand, or 
reduce any part of the program plan or allowable activities. Such 
modifications may be made by the grantee without our approval except 
where the modification reduces the total number of participants to be 
served annually under intensive and/or training services by 15 percent 
or more, in which case the plan may only be modified with Grant Officer 
approval.
    (d) If the grantee is approved for a regulatory waiver under 
Sec. Sec.669.560 and 669.570, the grantee must submit a modification 
of its service delivery plan to reflect the effect of the waiver.



Sec.669.550  How are costs classified under the NFJP?

    (a) Costs are classified as follows:
    (1) Administrative costs, as defined in 20 CFR 667.220; and
    (2) Program costs, which are all other costs not defined as 
administrative.
    (b) Program costs must be classified and reported in the following 
categories:
    (1) Related assistance, including emergency assistance and 
supportive services, including allocated staff costs; and
    (2) All other program services, including allocated staff costs.

[[Page 144]]



Sec.669.555  Do the WIA administrative cost limits for States and local areas 

apply to NFJP grants?

    No, under 20 CFR 667.210(b), limits on administrative costs for NFJP 
grants will be negotiated with the grantee and identified in the grant 
award document.



Sec.669.560  Are there regulatory and/or statutory waiver provisions that 

apply to WIA section 167?

    (a) The statutory waiver provision at WIA section 189(i) does not 
apply to WIA section 167.
    (b) NFJP grantees may request waiver of any regulatory provisions 
only when such regulatory provisions are:
    (1) Not required by WIA;
    (2) Not related to wage and labor standards, nondisplacement 
protection, worker rights, participation and protection of workers and 
participants, and eligibility of participants, grievance procedures, 
judicial review, nondiscrimination, allocation of funds, procedures for 
review and approval of plans; and
    (3) Not related to the key reform principles embodied in WIA, 
described in 20 CFR 661.400.



Sec.669.570  What information is required to document a requested waiver?

    To request a waiver, a grantee must submit a waiver plan that:
    (a) Describes the goals of the waiver, the expected programmatic 
outcomes, and how the waiver will improve the provision of WIA 
activities;
    (b) Is consistent with guidelines we establish and the waiver 
provisions at 20 CFR 661.400 through 661.420; and
    (c) Includes a modified service delivery plan reflecting the effect 
of requested waiver.



                    Subpart E_The MSFW Youth Program



Sec.669.600  What is the purpose of the WIA section 167 MSFW Youth Program?

    The purpose of the MSFW youth program is to provide an effective and 
comprehensive array of educational opportunities, employment skills, and 
life enhancement activities to at-risk and out-of-school MSFW youth that 
lead to success in school, economic stability and development into 
productive members of society.



Sec.669.610  What is the relationship between the MSFW youth program and the 

NFJP authorized at WIA section 167?

    The MSFW youth program is funded under WIA section 127(b)(1)(A)(iii) 
to provide farmworker youth activities under the auspices of WIA section 
167. These funds are specifically earmarked for MSFW youth. Funds 
provided for the section 167 program may also be used for youth, but are 
not limited to this age group.



Sec.669.620  How do the MSFW youth program regulations apply to the NFJP 

program authorized under WIA section 167?

    (a) This subpart applies only to the administration of grants for 
MSFW youth programs funded under WIA section 127(b)(1)(A)(iii).
    (b) The regulations for the NFJP in this part apply to the 
administration of the MSFW youth program, except as modified in this 
subpart.



Sec.669.630  What are the requirements for designation as an ``MSFW youth 

program grantee''?

    Any entity that meets the requirements described in the SGA may 
apply for designation as an ``MSFW youth program grantee'' consistent 
with requirements described in the SGA. The Department gives special 
consideration to an entity in any service area for which the entity has 
been designated as a WIA section 167 NFJP program grantee.



Sec.669.640  What is the process for applying for designation as an MSFW youth 

program grantee?

    (a) To apply for designation as an MSFW youth program grantee, 
entities must respond to an SGA by submitting a plan that meets the 
requirements of WIA section 167(c)(2) and describes a two-year strategy 
for meeting the needs of eligible MSFW youth in the service area the 
entity seeks to serve.
    (b) The designation process is conducted competitively (subject to 
Sec.669.210) through a selection process

[[Page 145]]

distinct from the one used to select WIA section 167 NFJP grantees.



Sec.669.650  How are MSFW youth funds allocated to section 167 youth grantees?

    The allocation of funds among entities designated as WIA section 167 
MSFW Youth Program grantees is based on the comparative merits of the 
applications, in accordance with criteria set forth in the SGA. However, 
we may include criteria in the SGA that promote a geographical 
distribution of funds and that encourages both large- and small-scale 
programs.



Sec.669.660  What planning documents and information are required in the 

application for MSFW youth grants and when must they be filed?

    The required planning documents and other required information and 
the submission dates for filing are described in the SGA.



Sec.669.670  Who is eligible to receive services under the section 167 MSFW 

youth program?

    Disadvantaged youth, ages 14 through 21, who are individually 
eligible or are members of eligible families under the WIA section 167 
NFJP may receive these services.



Sec.669.680  What activities and services may be provided under the MSFW youth 

program?

    (a) Based on an evaluation and assessment of the needs of MSFW youth 
participants, grantees may provide activities and services to MSFW youth 
that include:
    (1) Intensive services and training services, as described in 
Sec. Sec.669.400 and 669.410;
    (2) Life skills activities which may include self and interpersonal 
skills development;
    (3) Community service projects;
    (4) Small business development technical assistance and training in 
conjunction with entrepreneurial training;
    (5) Supportive services including the related assistance services, 
described in Sec.669.430; and
    (b) Other activities and services that conform to the use of funds 
for youth activities described in 20 CFR part 664.



PART 670_THE JOB CORPS UNDER TITLE I OF THE WORKFORCE INVESTMENT ACT--Table of 

Contents



                       Subpart A_Scope and Purpose

Sec.
670.100 What is the scope of this part?
670.110 What is the Job Corps program?
670.120 What definitions apply to this part?
670.130 What is the role of the Job Corps Director?

  Subpart B_Site Selection and Protection and Maintenance of Facilities

670.200 Who decides where Job Corps centers will be located?
670.210 How are center facility improvements and new construction 
          handled?
670.220 Are we responsible for the protection and maintenance of center 
          facilities?

          Subpart C_Funding and Selection of Service Providers

670.300 What entities are eligible to receive funds to operate centers 
          and provide training and operational support services?
670.310 How are entities selected to receive funding?
670.320 What are the requirements for award of contracts and payments to 
          Federal agencies?

Subpart D_Recruitment, Eligibility, Screening, Selection and Assignment, 
                             and Enrollment

670.400 Who is eligible to participate in the Job Corps program?
670.410 Are there additional factors which are considered in selecting 
          an eligible applicant for enrollment?
670.420 Are there any special requirements for enrollment related to the 
          Military Selective Service Act?
670.430 What entities conduct outreach and admissions activities for the 
          Job Corps program?
670.440 What are the responsibilities of outreach and admissions 
          agencies?
670.450 How are applicants who meet eligibility and selection criteria 
          assigned to centers?
670.460 What restrictions are there on the assignment of eligible 
          applicants for nonresidential enrollment in Job Corps?
670.470 May a person who is determined to be ineligible or an individual 
          who is denied enrollment appeal that decision?
670.480 At what point is an applicant considered to be enrolled in Job 
          Corps?
670.490 How long may a student be enrolled in Job Corps?

[[Page 146]]

           Subpart E_Program Activities and Center Operations

670.500 What services must Job Corps centers provide?
670.505 What types of training must Job Corps centers provide?
670.510 Are Job Corps center operators responsible for providing all 
          vocational training?
670.515 What responsibilities do the center operators have in managing 
          work-based learning?
670.520 Are students permitted to hold jobs other than work-based 
          learning opportunities?
670.525 What residential support services must Job Corps center 
          operators provide?
670.530 Are Job Corps centers required to maintain a student 
          accountability system?
670.535 Are Job Corps centers required to establish behavior management 
          systems?
670.540 What is Job Corps' zero tolerance policy?
670.545 How does Job Corps ensure that students receive due process in 
          disciplinary actions?
670.550 What responsibilities do Job Corps centers have in assisting 
          students with child care needs?
670.555 What are the center's responsibilities in ensuring that 
          students' religious rights are respected?
670.560 Is Job Corps authorized to conduct pilot and demonstration 
          projects?

                        Subpart F_Student Support

670.600 Is government-paid transportation provided to Job Corps 
          students?
670.610 When are students authorized to take leaves of absence from 
          their Job Corps centers?
670.620 Are Job Corps students eligible to receive cash allowances and 
          performance bonuses?
670.630 Are student allowances subject to Federal Payroll Taxes?
670.640 Are students provided with clothing?

               Subpart G_Placement and Continued Services

670.700 What are Job Corps centers' responsibilities in preparing 
          students for placement services?
670.710 What placement services are provided for Job Corps students?
670.720 Who provides placement services?
670.730 What are the responsibilities of placement agencies?
670.740 Must continued services be provided for graduates?
670.750 Who may provide continued services for graduates?
670.760 How will Job Corps coordinate with other agencies?

                     Subpart H_Community Connections

670.800 How do Job Corps centers and service providers become involved 
          in their local communities?

           Subpart I_Administrative and Management Provisions

670.900 Are damages caused by the acts or omissions of students eligible 
          for payment under the Federal Tort Claims Act?
670.905 Are loss and damages that occur to persons or personal property 
          of students at Job Corps centers eligible for reimbursement?
670.910 If a student is injured in the performance of duty as a Job 
          Corps Student, what benefits may they receive?
670.915 When is a Job Corps student considered to be in the performance 
          of duty?
670.935 How are students protected from unsafe or unhealthy situations?
670.940 What are the requirements for criminal law enforcement 
          jurisdiction on center property?
670.945 Are Job Corps operators and service providers authorized to pay 
          State or local taxes on gross receipts?
670.950 What are the financial management responsibilities of Job Corps 
          center operators and other service providers?
670.955 Are center operators and service providers subject to Federal 
          audits?
670.960 What are the procedures for management of student records?
670.965 What procedures apply to disclosure of information about Job 
          Corps students and program activities?
670.970 What are the reporting requirements for center operators and 
          operational support service providers?
670.975 How is the performance of the Job Corps program assessed?
670.980 What are the indicators of performance for Job Corps?
670.985 What happens if a center operator, screening and admissions 
          contractor or other service provider fails to meet the 
          expected levels of performance?
670.990 What procedures are available to resolve complaints and 
          disputes?
670.991 How does Job Corps ensure that complaints or disputes are 
          resolved in a timely fashion?
670.992 How does Job Corps ensure that centers or other service 
          providers comply with the Act and the WIA regulations?
670.993 How does Job Corps ensure that contract disputes will be 
          resolved?
670.994 How does Job Corps resolve disputes between DOL and other 
          Federal Agencies?

[[Page 147]]

670.995 What DOL equal opportunity and nondiscrimination regulations 
          apply to Job Corps?

    Authority: Subtitle C of title I, sec. 506(c), Pub. L. 105-220, 112 
Stat. 936 (20 U.S.C. 2881 et seq. and 9276(c)); 5 U.S.C. 301; Executive 
Order 13198, 66 FR 8497, 3 CFR 2001 Comp., p. 750; Executive Order 
13279, 67 FR 77141, 3 CFR 2002 Comp., p. 258.

    Source: 65 FR 49450, Aug. 11, 2000, unless otherwise noted.



                       Subpart A_Scope and Purpose



Sec.670.100  What is the scope of this part?

    The regulations in this part are an outline of the requirements that 
apply to the Job Corps program. More detailed policies and procedures 
are contained in a Policy and Requirements Handbook issued by the 
Secretary. Throughout this part, phrases like ``according to 
instructions (procedures) issued by the Secretary'' refer to the Policy 
and Requirements Handbook and other Job Corps directives.



Sec.670.110  What is the Job Corps program?

    Job Corps is a national program that operates in partnership with 
States and communities, local Workforce Investment Boards, youth 
councils, One-Stop Centers and partners, and other youth programs to 
provide education and training, primarily in a residential setting, for 
low income young people. The objective of Job Corps is to provide young 
people with the skills they need to obtain and hold a job, enter the 
Armed Forces, or enroll in advanced training or further education.



Sec.670.120  What definitions apply to this part?

    The following definitions apply to this part:
    Absent Without Official Leave (AWOL) means an adverse enrollment 
status to which a student is assigned based on extended, unapproved 
absence from his/her assigned center or off-center place of duty. 
Students do not earn Job Corps allowances while in AWOL status.
    Applicable local board means a local Workforce Investment Board 
that:
    (1) Works with a Job Corps center and provides information on local 
demand occupations, employment opportunities, and the job skills needed 
to obtain the opportunities, and
    (2) Serves communities in which the graduates of the Job Corps seek 
employment when they leave the program.
    Capital improvement means any modification, addition, restoration or 
other improvement:
    (1) Which increases the usefulness, productivity, or serviceable 
life of an existing site, facility, building, structure, or major item 
of equipment;
    (2) Which is classified for accounting purposes as a ``fixed 
asset;'' and
    (3) The cost of which increases the recorded value of the existing 
building, site, facility, structure, or major item of equipment and is 
subject to depreciation.
    Center means a facility and an organizational entity, including all 
of its parts, providing Job Corps training and designated as a Job Corps 
center.
    Center operator means a Federal, State or local agency, or a 
contractor that runs a center under an agreement or contract with DOL.
    Civilian conservation center (CCC) means a center operated on public 
land under an agreement between DOL and another Federal agency, which 
provides, in addition to other training and assistance, programs of 
work-based learning to conserve, develop, or manage public natural 
resources or public recreational areas or to develop community projects 
in the public interest.
    Contract center means a Job Corps center operated under a contract 
with DOL.
    Contracting officer means the Regional Director or other official 
authorized to enter into contracts or agreements on behalf of DOL.
    Enrollee means an individual who has voluntarily applied for, been 
selected for, and enrolled in the Job Corps program, and remains with 
the program, but has not yet become a graduate. Enrollees are also 
referred to as ``students'' in this part.
    Enrollment means the process by which individual formally becomes a 
student in the Job Corps program.
    Graduate means an enrollee who has:

[[Page 148]]

    (1) Completed the requirements of a vocational training program, or 
received a secondary school diploma or its equivalent as a result of 
participating in the Job Corps program; and
    (2) Achieved job readiness and employment skills as a result of 
participating in the Job Corps program.
    Individual with a disability means an individual with a disability 
as defined in section 3 of the Americans with Disabilities Act of 1990 
(42 U.S.C. 12102).
    Interagency agreement means a formal agreement between DOL and 
another Federal agency administering and operating centers. The 
agreement establishes procedures for the funding, administration, 
operation, and review of those centers as well as the resolution of any 
disputes.
    Job Corps means the agency of the Department established by section 
143 of the Workforce Investment Act of 1998 (WIA) (20 U.S.C. 9201 et 
seq.) to perform those functions of the Secretary of Labor set forth in 
subtitle C of WIA Title I.
    Job Corps Director means the chief official of the Job Corps or a 
person authorized to act for the Job Corps Director.
    Low income individual means an individual who meets the definition 
in WIA section 101(25).
    National Office means the national office of Job Corps.
    National training contractor means a labor union, union-affiliated 
organization, business organization, association or a combination of 
such organizations, which has a contract with the national office to 
provide vocational training, placement, or other services.
    Operational support services means activities or services required 
to support the operation of Job Corps, including:
    (1) Outreach and admissions services;
    (2) Contracted vocational training and off-center training;
    (3) Placement services;
    (4) Continued services for graduates;
    (5) Certain health services; and
    (6) Miscellaneous logistical and technical support.
    Outreach and admissions agency means an organization that performs 
outreach, and screens and enrolls youth under a contract or other 
agreement with Job Corps.
    Placement means student employment, entry into the Armed Forces, or 
enrollment in other training or education programs following separation 
from Job Corps.
    Placement agency means an organization acting under a contract or 
other agreement with Job Corps to provide placement services for 
graduates and, to the extent possible, for former students.
    Regional appeal board means the board designated by the Regional 
Director to consider student appeals of disciplinary discharges.
    Regional Director means the chief Job Corps official of a regional 
office or a person authorized to act for the Regional Director.
    Regional Office means a regional office of Job Corps.
    Regional Solicitor means the chief official of a regional office of 
the DOL Office of the Solicitor, or a person authorized to act for the 
Regional Solicitor.
    Separation means the action by which an individual ceases to be a 
student in the Job Corps program, either voluntarily or involuntarily.
    Student means an individual enrolled in the Job Corps.
    Unauthorized goods means:
    (1) Firearms and ammunition;
    (2) Explosives and incendiaries;
    (3) Knives with blades longer than 2 inches;
    (4) Homemade weapons;
    (5) All other weapons and instruments used primarily to inflict 
personal injury;
    (6) Stolen property;
    (7) Drugs, including alcohol, marijuana, depressants, stimulants, 
hallucinogens, tranquilizers, and drug paraphernalia except for drugs 
and/or paraphernalia that are prescribed for medical reasons; and
    (8) Any other goods prohibited by the center operator in a student 
handbook.



Sec.670.130  What is the role of the Job Corps Director?

    The Job Corps Director has been delegated the authority to carry out 
the responsibilities of the Secretary under Subtitle I-C of the Act. 
Where the term ``Secretary'' is used in this part 670 to refer to 
establishment or issuance of

[[Page 149]]

guidelines and standards directly relating to the operation of the Job 
Corps program, the Job Corps Director has that responsibility.



  Subpart B_Site Selection and Protection and Maintenance of Facilities



Sec.670.200  Who decides where Job Corps centers will be located?

    (a) The Secretary must approve the location and size of all Job 
Corps centers.
    (b) The Secretary establishes procedures for making decisions 
concerning the establishment, relocation, expansion, or closing of 
contract centers.



Sec.670.210  How are center facility improvements and new construction 

handled?

    The Secretary issues procedures for requesting, approving, and 
initiating capital improvements and new construction on Job Corps 
centers.



Sec.670.220  Are we responsible for the protection and maintenance of center 

facilities?

    (a) Yes, the Secretary establishes procedures for the protection and 
maintenance of contract center facilities owned or leased by the 
Department of Labor, that are consistent with Federal Property 
Management Regulations at 41 CFR Chapter 101.
    (b) Federal agencies operating civilian conservation centers (CCC's) 
on public land are responsible for protection and maintenance of CCC 
facilities.
    (c) The Secretary issues procedures for conducting periodic facility 
surveys of centers to determine their condition and to identify needs 
such as correction of safety and health deficiencies, rehabilitation, 
and/or new construction.



          Subpart C_Funding and Selection of Service Providers



Sec.670.300  What entities are eligible to receive funds to operate centers 

and provide training and operational support services?

    (a) Entities eligible to receive funds under this subpart to operate 
centers include:
    (1) Federal, State, and local agencies;
    (2) Private for-profit and non-profit corporations;
    (3) Indian tribes and organizations; and
    (4) Area vocational education or residential vocational schools. 
(WIA sec. 147(a)(1)(A) and (d)).
    (b) Entities eligible to receive funds to provide outreach and 
admissions, placement and other operational support services include:
    (1) One-Stop Centers and partners;
    (2) Community action agencies;
    (3) Business organizations;
    (4) Labor organizations;
    (5) Private for-profit and non-profit corporations; and
    (6) Other agencies, and individuals that have experience and contact 
with youth. (WIA sec. 145(a)(3)).



Sec.670.310  How are entities selected to receive funding?

    (a) The Secretary selects eligible entities to operate contract 
centers and operational support service providers on a competitive basis 
in accordance with the Federal Property and Administrative Services Act 
of 1949 unless section 303 (c) and (d) of that Act apply. In selecting 
an entity, Job Corps issues requests for proposals (RFP) for the 
operation of all contract centers and for provision of operational 
support services according to Federal Acquisition Regulation (48 CFR 
Chapter 1) and DOL Acquisition Regulation (48 CFR Chapter 29). Job Corps 
develops RFP's for center operators in consultation with the Governor, 
the center industry council (if established), and the Local Board for 
the workforce investment area in which the center is located.
    (b) The RFP for each contract center and each operational support 
service contract describes uniform specifications and standards, as well 
as specifications and requirements that are unique to the operation of 
the specific center or to the specific required operational support 
services.
    (c) The Contracting Officer selects and funds Job Corps contract 
center operators on the basis of an evaluation of the proposals received 
using criteria established by the Secretary, and set

[[Page 150]]

forth in the RFP. The criteria include the following:
    (1) The offeror's ability to coordinate the activities carried out 
through the Job Corps center with activities carried out under the 
appropriate State and local workforce investment plans;
    (2) The degree to which the offeror proposes vocational training 
that reflects employment opportunities in the local areas in which most 
of the students intend to seek employment;
    (3) The degree to which the offeror is familiar with the surrounding 
community, including the applicable One-Stop Centers, and the State and 
region in which the center is located; and
    (4) The offeror's past performance.
    (d) The Contracting Officer selects and funds operational support 
service contractors on the basis of an evaluation of the proposals 
received using criteria established by the Secretary and set forth in 
the RFP.
    (e) The Secretary enters into interagency agreements with Federal 
agencies for the funding, establishment, and operation of CCC's which 
include provisions to ensure that the Federal agencies comply with the 
regulations under this part.



Sec.670.320  What are the requirements for award of contracts and payments to 

Federal agencies?

    (a) The requirements of the Federal Property and Administrative 
Services Act of 1949, as amended; the Federal Grant and Cooperative 
Agreement Act of 1977; the Federal Acquisition Regulation (48 CFR 
Chapter 1); and the DOL Acquisition Regulation (48 CFR Chapter 29) apply 
to the award of contracts and to payments to Federal agencies.
    (b) Job Corps funding of Federal agencies that operate CCC's are 
made by a transfer of obligational authority from DOL to the respective 
operating agency.



Subpart D_Recruitment, Eligibility, Screening, Selection and Assignment, 

                             and Enrollment



Sec.670.400  Who is eligible to participate in the Job Corps program?

    To be eligible to participate in the Job Corps, an individual must 
be:
    (a) At least 16 and not more than 24 years of age at the time of 
enrollment, except
    (1) There is no upper age limit for an otherwise eligible individual 
with a disability; and
    (2) Not more than 20% of individuals enrolled nationwide may be 
individuals who are aged 22 to 24 years old;
    (b) A low-income individual;
    (c) An individual who is facing one or more of the following 
barriers to education and employment:
    (1) Is basic skills deficient, as defined in WIA sec. 101(4); or
    (2) Is a school dropout; or
    (3) Is homeless, or a runaway, or a foster child; or
    (4) Is a parent; or
    (5) Requires additional education, vocational training, or intensive 
counseling and related assistance in order to participate successfully 
in regular schoolwork or to secure and hold meaningful employment; and
    (d) Meets the requirements of Sec.670.420, if applicable.



Sec.670.410  Are there additional factors which are considered in selecting an 

eligible applicant for enrollment?

    Yes, in accordance with procedures issued by the Secretary, an 
eligible applicant may be selected for enrollment, only if:
    (a) A determination is made, based on information relating to the 
background, needs and interests of the applicant, that the applicant's 
educational and vocational needs can best be met through the Job Corps 
program;
    (b) A determination is made that there is a reasonable expectation 
the applicant can participate successfully in group situations and 
activities, and is not likely to engage in actions that would 
potentially:
    (1) Prevent other students from receiving the benefit of the 
program;
    (2) Be incompatible with the maintenance of sound discipline; or
    (3) Impede satisfactory relationships between the center to which 
the student is assigned and surrounding local communities;
    (c) The applicant is made aware of the center's rules and what the 
consequences are for failure to observe the

[[Page 151]]

rules, as described in procedures issued by the Secretary;
    (d) The applicant passes a background check conducted according to 
procedures established by the Secretary. The background check must find 
that the applicant is not on probation, parole, under a suspended 
sentence or under the supervision of any agency as a result of court 
action or institutionalization, unless the court or appropriate agency 
certifies in writing that it will approve of the applicant's release 
from its supervision and that the applicant's release does not violate 
applicable laws and regulations. No one will be denied enrollment in Job 
Corps solely on the basis of contact with the criminal justice system. 
(WIA secs. 145(b)(1)(C) and 145(b)(2));
    (e) Suitable arrangements are made for the care of any dependent 
children for the proposed period of enrollment.



Sec.670.420  Are there any special requirements for enrollment related to the 

Military Selective Service Act?

    (a) Yes, each male applicant 18 years of age or older must present 
evidence that he has complied with section 3 of the Military Selective 
Service Act (50 U.S.C. App. 451 et seq.) if required; and
    (b) When a male student turns 18 years of age, he must submit 
evidence to the center that he has complied with the requirements of the 
Military Selective Service Act (50 U.S.C. App. 451 et seq).



Sec.670.430  What entities conduct outreach and admissions activities for the 

Job Corps program?

    The Regional Director makes arrangements with outreach and 
admissions agencies to perform Job Corps recruitment, screening and 
admissions functions according to standards and procedures issued by the 
Secretary. One-Stop Centers or partners, community action organizations, 
private for-profit and non-profit businesses, labor organizations, or 
other entities that have contact with youth over substantial periods of 
time and are able to offer reliable information about the needs of 
youth, conduct outreach and admissions activities. The Regional Director 
awards contracts for provision of outreach and screening services on a 
competitive basis in accordance with the requirements in Sec.670.310.



Sec.670.440  What are the responsibilities of outreach and admissions 

agencies?

    (a) Outreach and admissions agencies are responsible for:
    (1) Developing outreach and referral sources;
    (2) Actively seeking out potential applicants;
    (3) Conducting personal interviews with all applicants to identify 
their needs and eligibility status; and
    (4) Identifying youth who are interested and likely Job Corps 
participants.
    (b) Outreach and admissions agencies are responsible for completing 
all Job Corps application forms and determining whether applicants meet 
the eligibility and selection criteria for participation in Job Corps as 
provided in Sec. Sec.670.400 and 670.410.
    (c) The Secretary may decide that determinations with regard to one 
or more of the eligibility criteria will be made by the Regional 
Director.



Sec.670.450  How are applicants who meet eligibility and selection criteria 

assigned to centers?

    (a) Each applicant who meets the application and selection 
requirements of Sec. Sec.670.400 and 670.410 is assigned to a center 
based on an assignment plan developed by the Secretary. The assignment 
plan identifies a target for the maximum percentage of students at each 
center who come from the State or region nearest the center, and the 
regions surrounding the center. The assignment plan is based on an 
analysis of:
    (1) The number of eligible individuals in the State and region where 
the center is located and the regions surrounding where the center is 
located;
    (2) The demand for enrollment in Job Corps in the State and region 
where the center is located and in surrounding regions; and
    (3) The size and enrollment level of the center.
    (b) Eligible applicants are assigned to centers closest to their 
homes, unless it is determined, based on the special needs of 
applicants, including vocational interests and English literacy

[[Page 152]]

needs, the unavailability of openings in the closest center, or parent 
or guardian concerns, that another center is more appropriate.
    (c) A student who is under the age of 18 must not be assigned to a 
center other than the center closest to home if a parent or guardian 
objects to the assignment.



Sec.670.460  What restrictions are there on the assignment of eligible 

applicants for nonresidential enrollment in Job Corps?

    (a) No more than 20 percent of students enrolled in Job Corps 
nationwide may be nonresidential students.
    (b) In enrolling individuals who are to be nonresidential students, 
priority is given to those eligible individuals who are single parents 
with dependent children. (WIA sec 147(b).)



Sec.670.470  May a person who is determined to be ineligible or an individual 

who is denied enrollment appeal that decision?

    (a) A person who is determined to be ineligible to participate in 
Job Corps under Sec.670.400 or a person who is not selected for 
enrollment under Sec.670.410 may appeal the determination to the 
outreach and admissions agency or to the center within 60 days of the 
determination. The appeal will be resolved according to the procedures 
in Sec. Sec.670.990 and 670.991. If the appeal is denied by the 
outreach/admissions contractor or the center, the person may appeal the 
decision in writing to the Regional Director within 60 days the date of 
the denial. The Regional Director will decide within 60 days whether to 
reverse or approve the appealed decision. The decision by the Regional 
Director is the Department's final decision.
    (b) If an applicant believes that he or she has been determined 
ineligible or not selected for enrollment based upon a factor prohibited 
by WIA section 188, the individual may proceed under the applicable DOL 
nondiscrimination regulations implementing WIA section 188. These 
regulations may be found at 29 CFR part 37.
    (c) An applicant who is determined to be ineligible or a person who 
is denied enrollment must be referred to the appropriate One-Stop Center 
or other local service provider.



Sec.670.480  At what point is an applicant considered to be enrolled in Job 

Corps?

    (a) To become enrolled as a Job Corps student, an applicant selected 
for enrollment must physically arrive at the assigned Job Corps center 
on the appointed date. However, applicants selected for enrollment who 
arrive at their assigned centers by government furnished transportation 
are considered to be enrolled on their dates of departure by such 
transportation.
    (b) Center operators must document the enrollment of new students 
according to procedures issued by the Secretary.



Sec.670.490  How long may a student be enrolled in Job Corps?

    (a) Except as provided in paragraph (b) of this section, a student 
may remain enrolled in Job Corps for no more than two years.
    (b)(1) An extension of a student's enrollment may be authorized in 
special cases according to procedures issued by the Secretary; and
    (2) A student's enrollment in an advanced career training program 
may be extended in order to complete the program for a period not to 
exceed one year.



           Subpart E_Program Activities and Center Operations



Sec.670.500  What services must Job Corps centers provide?

    (a) Job Corps centers must provide:
    (1) Academic, vocational, employability and social skills training;
    (2) Work-based learning; and
    (3) Recreation, counseling and other residential support services.
    (b) In addition, centers must provide students with access to the 
core services described in WIA section 134(d)(2) and the intensive 
services described in WIA section 134(d)(3).



Sec.670.505  What types of training must Job Corps centers provide?

    (a) Job Corps centers must provide basic education, vocational and 
social skills training. The Secretary provides curriculum standards and 
guidelines.

[[Page 153]]

    (b) Each center must provide students with competency-based or 
individualized training in an occupational area that will best 
contribute to the students' opportunities for permanent long-term 
employment.
    (1) Specific vocational training programs offered by individual 
centers must be approved by the Regional Director according to policies 
issued by the Secretary.
    (2) Center industry councils described in Sec.670.800 must review 
appropriate labor market information, identify employment opportunities 
in local areas where students will look for employment, determine the 
skills and education necessary for those jobs, and as appropriate, 
recommend changes in the center's vocational training program to the 
Secretary.
    (c) Each center must implement a system to evaluate and track the 
progress and achievements of each student at regular intervals.
    (d) Each center must develop a training plan that must be available 
for review and approval by the appropriate Regional Director.



Sec.670.510  Are Job Corps center operators responsible for providing all 

vocational training?

    No, in order to facilitate students' entry into the workforce, the 
Secretary may contract with national business, union, or union-
affiliated organizations for vocational training programs at specific 
centers. Contractors providing such vocational training will be selected 
in accordance with the requirements of Sec.670.310.



Sec.670.515  What responsibilities do the center operators have in managing 

work-based learning?

    (a) The center operator must emphasize and implement work-based 
learning programs for students through center program activities, 
including vocational skills training, and through arrangements with 
employers. Work-based learning must be under actual working conditions 
and must be designed to enhance the employability, responsibility, and 
confidence of the students. Work-based learning usually occurs in tandem 
with students' vocational training.
    (b) The center operator must ensure that students are assigned only 
to workplaces that meet the safety standards described in Sec.670.935.



Sec.670.520  Are students permitted to hold jobs other than work-based 

learning opportunities?

    Yes, a center operator may authorize a student to participate in 
gainful leisure time employment, as long as the employment does not 
interfere with required scheduled activities.



Sec.670.525  What residential support services must Job Corps center operators 

provide?

    Job Corps center operators must provide the following services 
according to procedures issued by the Secretary:
    (a) A quality living and learning environment that supports the 
overall training program and includes a safe, secure, clean and 
attractive physical and social environment, seven days a week, 24 hours 
a day;
    (b) An ongoing, structured counseling program for students;
    (c) Food service, which includes provision of nutritious meals for 
students;
    (d) Medical services, through provision or coordination of a 
wellness program which includes access to basic medical, dental and 
mental health services, as described in the Policy and Requirements 
Handbook, for all students from the date of enrollment until separation 
from the Job Corps program;
    (e) A recreation/avocational program;
    (f) A student leadership program and an elected student government; 
and
    (g) A student welfare association for the benefit of all students 
that is funded by non-appropriated funds which come from sources such as 
snack bars, vending machines, disciplinary fines, and donations, and is 
run by an elected student government, with the help of a staff advisor.



Sec.670.530  Are Job Corps centers required to maintain a student 

accountability system?

    Yes, each Job Corps center must establish and operate an effective 
system to account for and document the whereabouts, participation, and 
status

[[Page 154]]

of students during their Job Corps enrollment. The system must enable 
center staff to detect and respond to instances of unauthorized or 
unexplained student absence. Each center must operate its student 
accountability system according to requirements and procedures issued by 
the Secretary.



Sec.670.535  Are Job Corps centers required to establish behavior management 

systems?

    (a) Yes, each Job Corps center must establish and maintain its own 
student incentives system to encourage and reward students' 
accomplishments.
    (b) The Job Corps center must establish and maintain a behavior 
management system, according to procedures established by the Secretary. 
The behavior management system must include a zero tolerance policy for 
violence and drugs policy as described in Sec.670.540.



Sec.670.540  What is Job Corps' zero tolerance policy?

    (a) Each Job Corps center must have a zero tolerance policy for:
    (1) An act of violence, as defined in procedures issued by the 
Secretary;
    (2) Use, sale, or possession of a controlled substance, as defined 
at 21 U.S.C. 802;
    (3) Abuse of alcohol;
    (4) Possession of unauthorized goods; or
    (5) Other illegal or disruptive activity.
    (b) As part of this policy, all students must be tested for drugs as 
a condition of enrollment. (WIA sec. 145(a)(1) and 152(b)(2).)
    (c) According to procedures issued by the Secretary, the policy must 
specify the offenses that result in the automatic separation of a 
student from the Job Corps. The center director is responsible for 
determining when there is a violation of a specified offense.



Sec.670.545  How does Job Corps ensure that students receive due process in 

disciplinary actions?

    The center operator must ensure that all students receive due 
process in disciplinary proceedings according to procedures developed by 
the Secretary. These procedures must include, at a minimum, center fact-
finding and behavior review boards, a code of sanctions under which the 
penalty of separation from Job Corps might be imposed, and procedures 
for students to appeal a center's decision to discharge them 
involuntarily from Job Corps to a regional appeal board.



Sec.670.550  What responsibilities do Job Corps centers have in assisting 

students with child care needs?

    (a) Job Corps centers are responsible for coordinating with outreach 
and admissions agencies to assist students with making arrangements for 
child care for their dependent children.
    (b) Job Corps centers may operate on center child development 
programs with the approval of the Secretary.



Sec.670.555  What are the center's responsibilities in ensuring that students' 

religious rights are respected?

    (a) Centers must ensure that a student has the right to worship or 
not worship as he or she chooses.
    (b) Students who believe their religious rights have been violated 
may file complaints under the procedures set forth in 29 CFR part 37.
    (c) Requirements related to equal treatment of religious 
organizations in Department of Labor programs, and to protection of 
religious liberty of Department of Labor social service providers and 
beneficiaries, are found at subpart D of 29 CFR part 2. See also 
Sec. Sec.667.266 and 667.275 of 20 CFR; 29 CFR part 37.

[65 FR 49450, Aug. 11, 2000, as amended at 69 FR 41891, July 12, 2004]



Sec.670.560  Is Job Corps authorized to conduct pilot and demonstration 

projects?

    (a) Yes, the Secretary may undertake experimental, research and 
demonstration projects related to the Job Corps program according to WIA 
section 156.
    (b) The Secretary establishes policies and procedures for conducting 
such projects.
    (c) All studies and evaluations produced or developed with Federal 
funds become the property of the United States.

[[Page 155]]



                        Subpart F_Student Support



Sec.670.600  Is government-paid transportation provided to Job Corps students?

    Yes, Job Corps provides for the transportation of students between 
their homes and centers as described in policies and procedures issued 
by the Secretary.



Sec.670.610  When are students authorized to take leaves of absence from their 

Job Corps centers?

    Job Corps students are eligible for annual leaves, emergency leaves 
and other types of leaves of absence from their assigned centers 
according to criteria and requirements issued by the Secretary. Center 
operators and other service providers must account for student leave 
according to procedures issued by the Secretary.



Sec.670.620  Are Job Corps students eligible to receive cash allowances and 

performance bonuses?

    (a) Yes, according to criteria and rates established by the 
Secretary, Job Corps students receive cash living allowances, 
performance bonuses, and allotments for care of dependents, and 
graduates receive post-separation readjustment allowances and placement 
bonuses. The Secretary may provide former students with post-separation 
allowances.
    (b) In the event of a student's death, any amount due under this 
section is paid according to the provisions of 5 U.S.C. 5582 governing 
issues such as designation of beneficiary, order of precedence and 
related matters.



Sec.670.630  Are student allowances subject to Federal Payroll Taxes?

    Yes, Job Corps student allowances are subject to Federal payroll tax 
withholding and social security taxes. Job Corps students are considered 
to be Federal employees for purposes of Federal payroll taxes. (WIA sec. 
157(a)(2).)



Sec.670.640  Are students provided with clothing?

    Yes, Job Corps students are provided cash clothing allowances and/or 
articles of clothing, including safety clothing, when needed for their 
participation in Job Corps and their successful entry into the work 
force. Center operators and other service providers must issue clothing 
and clothing assistance to students according to rates, criteria, and 
procedures issued by the Secretary.



               Subpart G_Placement and Continued Services



Sec.670.700  What are Job Corps centers' responsibilities in preparing 

students for placement services?

    Job Corps centers must test and counsel students to assess their 
competencies and capabilities and determine their readiness for 
placement.



Sec.670.710  What placement services are provided for Job Corps students?

    (a) Job Corps placement services focus on placing program graduates 
in:
    (1) Full-time jobs that are related to their vocational training and 
that pay wages that allow for self-sufficiency;
    (2) Higher education; or
    (3) Advanced training programs, including apprenticeship programs.
    (b) Placement service levels for students may vary, depending on 
whether the student is a graduate or a former student.
    (c) Procedures relating to placement service levels are issued by 
the Secretary.



Sec.670.720  Who provides placement services?

    The One-Stop system must be used to the fullest extent possible in 
placing graduates and former students in jobs. Job Corps placement 
agencies provide placement services under a contract or other agreement 
with the Department of Labor.



Sec.670.730  What are the responsibilities of placement agencies?

    (a) Placement agencies are responsible for:
    (1) Contacting graduates;
    (2) Assisting them in improving skills in resume preparation, 
interviewing techniques and job search strategies;
    (3) Identifying job leads or educational and training opportunities

[[Page 156]]

through coordination with local Workforce Investment Boards, One-Stop 
operators and partners, employers, unions and industry organizations; 
and
    (4) Placing graduates in jobs, apprenticeship, the Armed Forces, or 
higher education or training, or referring former students for 
additional services in their local communities as appropriate. Placement 
services may be provided for former students according to procedures 
issued by the Secretary.
    (b) Placement agencies must record and submit all Job Corps 
placement information according to procedures established by the 
Secretary.



Sec.670.740  Must continued services be provided for graduates?

    Yes, according to procedures issued by the Secretary, continued 
services, including transition support and workplace counseling, must be 
provided to program graduates for 12 months after graduation.



Sec.670.750  Who may provide continued services for graduates?

    Placement agencies, centers or other agencies, including One-Stop 
partners, may provide post-program services under a contract or other 
agreement with the Regional Director. In selecting a provider for 
continued services, priority is given to One-Stop partners. (WIA sec. 
148(d)).



Sec.670.760  How will Job Corps coordinate with other agencies?

    (a) The Secretary issues guidelines for the National Office, 
Regional Offices, Job Corps centers and operational support providers to 
use in developing and maintaining cooperative relationships with other 
agencies and institutions, including law enforcement, educational 
institutions, communities, and other employment and training programs 
and agencies.
    (b) The Secretary develops polices and requirements to ensure 
linkages with the One-Stop delivery system to the greatest extent 
practicable, as well as with other Federal, State, and local programs, 
and youth programs funded under this title. These linkages enhance 
services to youth who face multiple barriers to employment and must 
include, where appropriate:
    (1) Referrals of applicants and students;
    (2) Participant assessment;
    (3) Pre-employment and work maturity skills training;
    (4) Work-based learning;
    (5) Job search, occupational, and basic skills training; and
    (6) Provision of continued services for graduates.



                     Subpart H_Community Connections



Sec.670.800  How do Job Corps centers and service providers become involved in 

their local communities?

    (a) Job Corps representatives serve on Youth Councils operating 
under applicable Local Boards wherever geographically feasible.
    (b) Each Job Corps center must have a Business and Community Liaison 
designated by the director of the center to establish relationships with 
local and distant employers, applicable One-Stop centers and local 
boards, and members of the community according to procedures established 
by the Secretary. (WIA sec. 153(a).)
    (c) Each Job Corps center must implement an active community 
relations program.
    (d) Each Job Corps center must establish an industry advisory 
council, according to procedures established by the Secretary. The 
industry advisory council must include:
    (1) Distant and local employers;
    (2) Representatives of labor organizations (where present) and 
employees; and
    (3) Job Corps students and graduates.
    (e) A majority of the council members must be local and distant 
business owners, chief executives or chief operating officers of 
nongovernmental employers or other private sector employers, who have 
substantial management, hiring or policy responsibility and who 
represent businesses with employment opportunities in the local area and 
the areas to which students will return.
    (f) The council must work with Local Boards and must review labor 
market information to provide recommendations to the Secretary regarding 
the center's vocational training offerings, including identification of 
emerging

[[Page 157]]

occupations suitable for training. (WIA sec.154(b)(1).)
    (g) Job Corps is identified as a required One-Stop partner. Wherever 
practicable, Job Corps centers and operational support contractors must 
establish cooperative relationships and partnerships with One-Stop 
centers and other One-Stop partners, Local Boards, and other programs 
for youth.



           Subpart I_Administrative and Management Provisions



Sec.670.900  Are damages caused by the acts or omissions of students eligible 

for payment under the Federal Tort Claims Act?

    Yes, students are considered Federal employees for purposes of the 
FTCA (28 U.S.C. 2671 et seq.). Claims for such damage should be filed 
pursuant to the procedures found in 29 CFR part 15, subpart D.

[77 FR 22207, Apr. 13, 2012]



Sec.670.905  Are loss and damages that occur to persons or personal property 

of students at Job Corps centers eligible for reimbursement?

    Yes, the Job Corps may pay students for valid claims under the 
procedures found in 29 CFR part 15, subpart D.

[77 FR 22207, Apr. 13, 2012]



Sec.670.910  If a student is injured in the performance of duty as a Job Corps 

Student, what benefits may they receive?

    (a) Job Corps students are considered Federal employees for purposes 
of the Federal Employees' Compensation Act (FECA) as specified in 29 
U.S.C. 2897.
    (b) Job Corps students may be entitled to benefits under FECA as 
provided by 5 U.S.C. 8143 for injuries occurring in the performance of 
duty.
    (c) Job Corps students must meet the same eligibility tests for FECA 
benefits that apply to all other Federal employees. The requirements for 
FECA benefits may be found at 5 U.S.C. 8101, et seq. and part 10 of this 
title. The Department of Labor's Office of Workers' Compensation 
Programs (OWCP) administers the FECA program; all FECA determinations 
are within the exclusive authority of the OWCP, subject to appeal to the 
Employees' Compensation Appeals Board.
    (d) Whenever a student is injured, develops an occupationally 
related illness, or dies while in the performance of duty, the 
procedures of the OWCP, at part 10 of this title, must be followed. To 
assist OWCP in determining FECA eligibility, a thorough investigation of 
the circumstances and a medical evaluation must be completed and 
required forms must be timely filed by the center operator with the 
DOL's OWCP. Additional information regarding Job Corps FECA claims may 
be found in OWCP's regulations and procedures available on DOL's Web 
site located at www.dol.gov.

[77 FR 22207, Apr. 13, 2012]



Sec.670.915  When is a Job Corps student considered to be in the performance 

of duty?

    (a) Performance of duty is a determination that must be made by the 
OWCP under FECA, and is based on the individual circumstances in each 
claim.
    (b) In general, residential students may be considered to be in the 
``performance of duty'' when:
    (1) They are on center under the supervision and control of Job 
Corps officials;
    (2) They are engaged in any authorized Job Corps activity;
    (3) They are in authorized travel status; or
    (4) They are engaged in any authorized offsite activity.
    (c) Non-resident students are generally considered to be ``in 
performance of duty'' as Federal employees when they are engaged in any 
authorized Job Corps activity, from the time they arrive at any 
scheduled center activity until they leave the activity. The standard 
rules governing coverage of Federal employees during travel to and from 
work apply. These rules are described in guidance issued by the 
Secretary.
    (d) Students are generally considered to be not in the performance 
of duty when:
    (1) They are Absent Without Leave (AWOL);
    (2) They are at home, whether on pass or on leave;

[[Page 158]]

    (3) They are engaged in an unauthorized offsite activity; or
    (4) They are injured or ill due to their own willful misconduct, 
intent to cause injury or death to oneself or another or through 
intoxication or illegal use of drugs.

[77 FR 22207, Apr. 13, 2012]



Sec.670.935  How are students protected from unsafe or unhealthy situations?

    (a) The Secretary establishes procedures to ensure that students are 
not required or permitted to work, be trained, reside in, or receive 
services in buildings or surroundings or under conditions that are 
unsanitary or hazardous. Whenever students are employed or in training 
for jobs, they must be assigned only to jobs or training which observe 
applicable Federal, State and local health and safety standards.
    (b) The Secretary develops procedures to ensure compliance with 
applicable DOL Occupational Safety and Health Administration 
regulations.



Sec.670.940  What are the requirements for criminal law enforcement 

jurisdiction on center property?

    (a) All Job Corps property which would otherwise be under exclusive 
Federal legislative jurisdiction is considered under concurrent 
jurisdiction with the appropriate State and locality with respect to 
criminal law enforcement. Concurrent jurisdiction extends to all 
portions of the property, including housing and recreational facilities, 
in addition to the portions of the property used for education and 
training activities.
    (b) Centers located on property under concurrent Federal-State 
jurisdiction must establish agreements with Federal, State and local law 
enforcement agencies to enforce criminal laws.
    (c) The Secretary develops procedures to ensure that any searches of 
a student's person, personal area or belongings for unauthorized goods 
follow applicable right-to-privacy laws.



Sec.670.945  Are Job Corps operators and service providers authorized to pay 

State or local taxes on gross receipts?

    (a) A private for-profit or a nonprofit Job Corps service provider 
is not liable, directly or indirectly, to any State or subdivision for 
any gross receipts taxes, business privilege taxes measured by gross 
receipts, or any similar taxes in connection with any payments made to 
or by such service provider for operating a center or other Job Corps 
program or activity. The service provider is not liable to any State or 
subdivision to collect or pay any sales, excise, use, or similar tax 
imposed upon the sale to or use by such deliverer of any property, 
service, or other item in connection with the operation of a center or 
other Job Corps program or activity. (WIA sec. 158(d).)
    (b) If a State or local authority compels a center operator or other 
service provider to pay such taxes, the center operator or service 
provider may pay the taxes with Federal funds, but must document and 
report the State or local requirement according to procedures issued by 
the Secretary.



Sec.670.950  What are the financial management responsibilities of Job Corps 

center operators and other service providers?

    (a) Center operators and other service providers must manage Job 
Corps funds using financial management information systems that meet the 
specifications and requirements of the Secretary.
    (b) These financial management systems must:
    (1) Provide accurate, complete, and current disclosures of the costs 
of their Job Corps activities;
    (2) Ensure that expenditures of funds are necessary, reasonable, 
allocable and allowable in accordance with applicable cost principles;
    (3) Use account structures specified by the Secretary;
    (4) Ensure the ability to comply with cost reporting requirements 
and procedures issued by the Secretary; and
    (5) Maintain sufficient cost data for effective planning, 
monitoring, and evaluation of program activities and

[[Page 159]]

for determining the allowability of reported costs.



Sec.670.955  Are center operators and service providers subject to Federal 

audits?

    (a) Yes, Center operators and service providers are subject to 
Federal audits.
    (b) The Secretary arranges for the survey, audit, or evaluation of 
each Job Corps center and service provider at least once every three 
years, by Federal auditors or independent public accountants. The 
Secretary may arrange for more frequent audits. (WIA sec. 159(b)(2).)
    (c) Center operators and other service providers are responsible for 
giving full cooperation and access to books, documents, papers and 
records to duly appointed Federal auditors and evaluators. (WIA sec. 
159(b)(1).)



Sec.670.960  What are the procedures for management of student records?

    The Secretary issues guidelines for a system for maintaining records 
for each student during enrollment and for disposition of such records 
after separation.



Sec.670.965  What procedures apply to disclosure of information about Job 

Corps students and program activities?

    (a) The Secretary develops procedures to respond to requests for 
information or records or other necessary disclosures pertaining to 
students.
    (b) DOL disclosure of Job Corps information must be handled 
according to the Freedom of Information Act and according to DOL 
regulations at 29 CFR part 70.
    (c) Job Corps contractors are not ``agencies'' for Freedom of 
Information Act purposes. Therefore, their records are not subject to 
disclosure under the Freedom of Information Act or 29 CFR part 70.
    (d) The regulations at 29 CFR part 71 apply to a system of records 
covered by the Privacy Act of 1974 maintained by DOL or to a similar 
system maintained by a contractor, such as a screening agency, contract 
center operator, or placement agency on behalf of the Job Corps.



Sec.670.970  What are the reporting requirements for center operators and 

operational support service providers?

    The Secretary establishes procedures to ensure the timely and 
complete reporting of necessary financial and program information to 
maintain accountability. Center operators and operational support 
service providers are responsible for the accuracy and integrity of all 
reports and data they provide.



Sec.670.975  How is the performance of the Job Corps program assessed?

    The performance of the Job Corps program as a whole, and the 
performance of individual program components, is assessed on an ongoing 
basis, in accordance with the regulations in this part and procedures 
and standards, including a national performance measurement system, 
issued by the Secretary. Annual performance assessments are done for 
each center operator and other service providers, including screening 
and admissions and placement agencies.



Sec.670.980  What are the indicators of performance for Job Corps?

    (a) At a minimum, the performance assessment system established 
under Sec.670.975 will include expected levels of performance 
established for each of the indicators of performance contained in WIA 
section 159(c). These are:
    (1) The number of graduates and rate of graduation, analyzed by the 
type of vocational training received and the training provider;
    (2) The job placement rate of graduates into unsubsidized 
employment, analyzed by the vocational training received, whether or not 
the job placement is related to the training received, the vocational 
training provider, and whether the placement is made by a local or 
national service provider;
    (3) The average placement wage of graduates in training-related and 
non-training related unsubsidized jobs;
    (4) The average wage of graduates on the first day of employment and 
at 6 and 12 months following placement, analyzed by the type of 
vocational training received;

[[Page 160]]

    (5) The number of and retention rate of graduates in unsubsidized 
employment after 6 and 12 months;
    (6) The number of graduates who entered unsubsidized employment for 
32 hours per week or more, for 20 to 32 hours per week, and for less 
than 20 hours per week.
    (7) The number of graduates placed in higher education or advanced 
training; and
    (8) The number of graduates who attained job readiness and 
employment skills.
    (b) The Secretary issues the expected levels of performance for each 
indicator. To the extent practicable, the levels of performance will be 
continuous and consistent from year to year.



Sec.670.985  What happens if a center operator, screening and admissions 

contractor or other service provider fails to meet the expected levels of 

performance?

    (a) The Secretary takes appropriate action to address performance 
issues through a specific performance plan.
    (b) The plan may include the following actions:
    (1) Providing technical assistance to a Job Corps center operator or 
support service provider, including a screening and admissions 
contractor;
    (2) Changing the management staff of a center;
    (3) Changing the vocational training offered at a center;
    (4) Contracting out or recompeting the contract for a center or 
operational support service provider;
    (5) Reducing the capacity of a Job Corps center;
    (6) Relocating a Job Corps center; or
    (7) Closing a Job Corps center. (WIA sec. 159 (f).)



Sec.670.990  What procedures are available to resolve complaints and disputes?

    (a) Each Job Corps center operator and service provider must 
establish and maintain a grievance procedure for filing complaints and 
resolving disputes from applicants, students and/or other interested 
parties about its programs and activities. A hearing on each complaint 
or dispute must be conducted within 30 days of the filing of the 
complaint or dispute. A decision on the complaint must be made by the 
center operator or service provider, as appropriate, within 60 days 
after the filing of the complaint, and a copy of the decision must be 
immediately served, by first-class mail, on the complainant and any 
other party to the complaint. Except for complaints under Sec.670.470 
or complaints alleging fraud or other criminal activity, complaints may 
be filed within one year of the occurrence that led to the complaint.
    (b) The procedure established under paragraph (a) of this section 
must include procedures to process complaints alleging violations of WIA 
section 188, consistent with DOL nondiscrimination regulations 
implementing WIA section 188 at 29 CFR part 37 and Sec.670.995.



Sec.670.991  How does Job Corps ensure that complaints or disputes are 

resolved in a timely fashion?

    (a) If a complaint is not resolved by the center operator or service 
provider in the time frames described in Sec.670.990, the person 
making the complaint may request that the Regional Director determine 
whether reasonable cause exists to believe that the Act or regulations 
for this part of the Act have been violated. The request must be filed 
with the Regional Director within 60 days from the date that the center 
operator or service provider should have issued the decision.
    (b) Following the receipt of a request for review under paragraph 
(a) of this section, the Regional Director must determine within 60 days 
whether there has been a violation of the Act or the WIA regulations. If 
the Regional Director determines that there has been a violation of the 
Act or Regulations, (s)he may direct the operator or service provider to 
remedy the violation or direct the service provider to issue a decision 
to resolve the dispute according to the service provider's grievance 
procedures. If the service provider does not comply with the Regional 
Director's decision within 30 days, the Regional Director may impose a 
sanction on the center operator or service provider for violating the 
Act or regulations, and/or for failing to issue a decision. Decisions 
imposing sanctions

[[Page 161]]

upon a center operator or service provider may be appealed to the DOL 
Office of Administrative Law Judges under 20 CFR 667.800 or 667.840.



Sec.670.992  How does Job Corps ensure that centers or other service providers 

comply with the Act and the WIA regulations?

    (a) If DOL receives a complaint or has reason to believe that a 
center or other service provider is failing to comply with the 
requirements of the Act or regulations, the Regional Director must 
investigate the allegation and determine within 90 days after receiving 
the complaint or otherwise learning of the alleged violation, whether 
such allegation or complaint is true.
    (b) As a result of such a determination, the Regional Director may:
    (1) Direct the center operator or service provider to handle a 
complaint through the grievance procedures established under Sec.
670.990; or
    (2) Investigate and determine whether the center operator or service 
provider is in compliance with the Act and regulations. If the Regional 
Director determines that the center or service provider is not in 
compliance with the Act or regulations, the Regional Director may take 
action to resolve the complaint under Sec.670.991(b), or will report 
the incident to the DOL Office of the Inspector General, as described in 
20 CFR 667.630.



Sec.670.993  How does Job Corps ensure that contract disputes will be 

resolved?

    A dispute between DOL and a Job Corps contractor will be handled 
according to the Contract Disputes Act and applicable regulations.



Sec.670.994  How does Job Corps resolve disputes between DOL and other Federal 

Agencies?

    Disputes between DOL and a Federal Agency operating a center will be 
handled according to the interagency agreement with the agency which is 
operating the center.



Sec.670.995  What DOL equal opportunity and nondiscrimination regulations 

apply to Job Corps?

    Nondiscrimination requirements, procedures, complaint processing, 
and compliance reviews are governed by, as applicable, provisions of the 
following Department of Labor regulations:
    (a) Regulations implementing WIA section 188 for programs receiving 
Federal financial assistance under WIA found at 29 CFR part 37.
    (b) 29 CFR part 33 for programs conducted by the Department of 
Labor; and
    (c) 41 CFR Chapter 60 for entities that have a Federal government 
contract.



PART 671_NATIONAL EMERGENCY GRANTS FOR DISLOCATED WORKERS--Table of Contents



Sec.
671.100 What is the purpose of national emergency grants under WIA 
          section 173?
671.105 What funds are available for national emergency grants?
671.110 What are major economic dislocations or other events which may 
          qualify for a national emergency grant?
671.120 Who is eligible to apply for national emergency grants?
671.125 What are the requirements for submitting applications for 
          national emergency grants?
671.130 When should applications for national emergency grants be 
          submitted to the Department?
671.140 What are the allowable activities and what dislocated workers 
          may be served under national emergency grants?
671.150 How do statutory and workflex waivers apply to national 
          emergency grants?
671.160 What rapid response activities are required before a national 
          emergency grant application is submitted?
671.170 What are the program and administrative requirements that apply 
          to national emergency grants?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49460, Aug. 11, 2000, unless otherwise noted.



Sec.671.100  What is the purpose of national emergency grants under WIA 

section 173?

    The purpose of national emergency grants is to provide supplemental 
dislocated worker funds to States, Local Boards and other eligible 
entities in order to respond to the needs of dislocated workers and 
communities affected by major economic dislocations and other worker 
dislocation events

[[Page 162]]

which cannot be met with formula allotments.



Sec.671.105  What funds are available for national emergency grants?

    We use funds reserved under WIA section 132(a)(2)(A) to provide 
financial assistance to eligible applicant for grants under WIA section 
173.



Sec.671.110  What are major economic dislocations or other events which may 

qualify for a national emergency grant?

    These include:
    (a) Plant closures;
    (b) Mass layoffs affecting 50 or more workers at a single site of 
employment;
    (c) Closures and realignments of military installations;
    (d) Multiple layoffs in a single local community that have 
significantly increased the total number of unemployed individuals in a 
community;
    (e) Emergencies or natural disasters, as defined in paragraphs (1) 
and (2) respectively, of section 102 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5122(1) and (2)) which 
have been declared eligible for public assistance by the Federal 
Emergency Management Agency (FEMA); and
    (f) Other events, as determined by the Secretary.



Sec.671.120  Who is eligible to apply for national emergency grants?

    (a) For projects within a State. A State, a Local Board or another 
entity determined to be appropriate by the Governor of the State in 
which the project is located may apply for a national emergency grant. 
Also, Indian tribes, tribal organizations, Alaska Native entities, 
Indian-controlled organizations serving Indians, or Native Hawaiian 
organizations which are recipients of funds under section 166 of the Act 
(Indian and Native American Programs) may apply for a national emergency 
grant.
    (b) For inter-State projects. Consortia of States and/or Local 
Boards may apply. Other private entities which can demonstrate, in the 
application for assistance, that they possess unique capabilities to 
effectively respond to the circumstances of the major economic 
dislocation(s) covered in the application may apply.
    (c) Other entities. The Secretary may consider applications from 
other entities, to ensure that appropriate assistance is provided in 
response to major economic dislocations.



Sec.671.125  What are the requirements for submitting applications for 

national emergency grants?

    We publish instructions for submitting applications for National 
Emergency Grants in the Federal Register. The instructions specify 
application procedures, selection criteria and the approval process.



Sec.671.130  When should applications for national emergency grants be 

submitted to the Department?

    (a) Applications for national emergency grants to respond to mass 
layoffs and plant closures may be submitted to the Department as soon 
as:
    (1) The State receives a notification of a mass layoff or a closure 
as a result of a WARN notice, a general announcement or some other means 
determined by the Governor to be sufficient to respond;
    (2) Rapid response assistance has been initiated; and
    (3) A determination has been made, in collaboration with the 
applicable Local Board(s) and chief elected official(s), that State and 
local formula dislocated worker funds are inadequate to provide the 
level of services needed by the workers being laid off.
    (b) An eligible entity may apply for a national emergency grant at 
any time during the year.
    (c) Applications for national emergency grants to respond to a 
declared emergency or natural disaster as described in Sec.671.110(e), 
cannot be considered until FEMA has declared that the affected area is 
eligible for disaster-related public assistance.



Sec.671.140  What are the allowable activities and what dislocated workers may 

be served under national emergency grants?

    (a) National emergency grants may provide adjustment assistance for 
eligible dislocated workers, described at WIA section 173(c)(2) or 
(d)(2).

[[Page 163]]

    (b) Adjustment assistance includes the core, intensive, and training 
services authorized at WIA sections 134(d) and 173. The scope of 
services to be provided in a particular project are negotiated between 
the Department and the grantee, taking into account the needs of the 
target population covered by the grant. The scope of services may be 
changed through grant modifications, if necessary.
    (c) National emergency grants may provide for supportive services to 
help workers who require such assistance to participate in activities 
provided for in the grant. Needs-related payments, in support of other 
employment and training assistance, may be available for the purpose of 
enabling dislocated workers who are eligible for such payments to 
participate in programs of training services. Generally, the terms of a 
grant must be consistent with Local Board policies governing such 
financial assistance with formula funds (including the payment levels 
and duration of payments). However, the terms of the grant agreement may 
diverge from established Local Board policies, in the following 
instances:
    (1) If unemployed dislocated workers served by the project are not 
able to meet the 13 or 8 weeks enrollment in training requirement at WIA 
section 134(e)(3)(B) because of the lack of formula or emergency grant 
funds in the State or local area at the time of dislocation, such 
individuals may be eligible for needs-related payments if they are 
enrolled in training by the end of the 6th week following the date of 
the emergency grant award;
    (2) Trade-impacted workers who are not eligible for trade 
readjustment assistance under NAFTA-TAA may be eligible for needs-
related payments under a national emergency grant if the worker is 
enrolled in training by the end of the 16th week following layoff; and
    (3) Under other circumstances as specified in the national emergency 
grant application guidelines.
    (d) A national emergency grant to respond to a declared emergency or 
natural disaster, as defined at Sec.671.110(e), may provide short-term 
disaster relief employment for:
    (1) Individuals who are temporarily or permanently laid off as a 
consequence of the disaster;
    (2) Dislocated workers; and
    (3) Long-term unemployed individuals.
    (e) Temporary employment assistance is authorized on disaster 
projects that provide food, clothing, shelter and other humanitarian 
assistance for disaster victims; and on projects that perform 
demolition, cleaning, repair, renovation and reconstruction of damaged 
and destroyed structures, facilities and lands located within the 
disaster area. For such temporary jobs, each eligible worker is limited 
to no more than six months of employment for each single disaster. The 
amounts, duration and other limitations on wages will be negotiated for 
each grant.
    (f) Additional requirements that apply to national emergency grants, 
including natural disaster grants, are contained in the application 
instructions.



Sec.671.150  How do statutory and workflex waivers apply to national emergency 

grants?

    (a) State and Local Board grantees may request and we may approve 
the application of existing general statutory or regulatory waivers and 
workflex waivers to a National Emergency Grant award. The application 
for grant funds must describe any statutory waivers which the applicant 
wishes to apply to the project that the State and/or Local Board, as 
applicable, have been granted under its waiver plan, or that the State 
has approved for implementation in the applicable local area under 
workflex waivers. We will consider such requests as part of the overall 
application review and decision process.
    (b) If, during the operation of the project, the grantee wishes to 
apply a waiver not identified in the application, the grantee must 
request a modification which includes the provision to be waived, the 
operational barrier to be removed and the effect upon the outcome of the 
project.

[[Page 164]]



Sec.671.160  What rapid response activities are required before a national 

emergency grant application is submitted?

    (a) Rapid response is a required Statewide activity under WIA 
section 134(a)(2)(A), to be carried out by the State or its designee in 
collaboration with the Local Board(s) and chief elected official(s). 
Under 20 CFR 665.310, rapid response encompasses, among other 
activities, an assessment of the general needs of the affected workers 
and the resources available to them.
    (b) In accordance with national emergency grant application 
guidelines published by the Department, each applicant must demonstrate 
that:
    (1) The rapid response activities described in 20 CFR 665.310 have 
been initiated and carried out, or are in the process of being carried 
out;
    (2) State and local funds, including those made available under 
section 132(b)(2)(B) of the Act, have been used to initiate appropriate 
services to the eligible workers;
    (3) There is a need for additional funds to effectively respond to 
the assistance needs of the workers and, in the case of declared 
emergencies and natural disasters, the community; and
    (4) The application has been developed by or in conjunction with the 
Local Board(s) and chief elected official(s) of the local area(s) in 
which the proposed project is to operate.



Sec.671.170  What are the program and administrative requirements that apply 

to national emergency grants?

    (a) In general, the program requirements and administrative 
standards set forth at 20 CFR parts 663 and 667 will apply.
    (b) Exceptions include:
    (1) Funds provided in response to a natural disaster may be used for 
temporary job creation in areas declared eligible for public assistance 
by FEMA, subject to the limitations of WIA section 173(d), this part and 
the application guidelines issued by the Department;
    (2) National emergency grant funds may be used to pay an appropriate 
level of administrative costs based on the design and complexity of the 
project. We will negotiate administration costs with the applicant as 
part of the application review and grant award and modification 
processes;
    (3) The period of availability for expenditure of funds under a 
national emergency grant is specified in the grant agreement.
    (4) We may establish supplemental reporting, monitoring and 
oversight requirements for national emergency grants. The requirements 
will be identified in the grant application instructions or the grant 
document.
    (5) We may negotiate and fund projects under terms other than those 
specified in this part where it can be clearly demonstrated that such 
adjustments will achieve a greater positive benefit for the workers and/
or communities being assisted.



PART 672_PROVISIONS GOVERNING THE YOUTHBUILD PROGRAM--Table of Contents



                    Subpart A_Purpose and Definitions

Sec.
672.100 What is YouthBuild?
672.105 What are the purposes of the YouthBuild program?
672.110 What definitions apply to this part?

                Subpart B_Funding and Grant Applications

672.200 How are YouthBuild grants funded and administered?
672.205 How does an eligible entity apply for grant funds to operate a 
          YouthBuild program?
672.210 How are eligible entities selected to receive grant funds?
672.215 How are eligible entities notified of approval for grant funds?

                     Subpart C_Program Requirements

672.300 Who is an eligible participant?
672.305 Are there special rules that apply to veterans?
672.310 What eligible activities may be funded under the YouthBuild 
          program?
672.315 What timeframes apply to participation?
672.320 What timeframes must be devoted to education and workforce 
          investment or other activities?
672.325 What timeframes apply for follow-up services?

[[Page 165]]

                    Subpart D_Performance Indicators

672.400 What are the performance indicators for YouthBuild grants?
672.405 What are the required levels of performance for the performance 
          indicators?
672.410 What are the reporting requirements for YouthBuild grantees?
672.415 What are the due dates for quarterly reporting?

         Subpart E_Administrative Rules, Costs, and Limitations

672.500 What administrative regulations apply to the YouthBuild program?
672.505 How may grantees provide services under the YouthBuild program?
672.510 What cost limits apply to the use of YouthBuild program funds?
672.515 What are the cost-sharing or matching requirements of the 
          YouthBuild program?
672.520 What are considered to be leveraged funds?
672.525 How are the costs associated with real property treated in the 
          YouthBuild program?
672.530 What participant costs are allowable under the YouthBuild 
          program?
672.535 What effect do payments to YouthBuild participants have on 
          eligibility for other Federal need-based benefits?
672.540 What program income requirements apply under the YouthBuild 
          program?
672.545 Are YouthBuild programs subject to the Davis-Bacon Act labor 
          standards?
672.550 What are the recordkeeping requirements for YouthBuild programs?

                    Subpart F_Additional Requirements

672.600 What are the safety requirements for the YouthBuild Program?
672.605 What are the reporting requirements for youth safety?
672.610 What environmental protection laws apply to the YouthBuild 
          Program?
672.615 What requirements apply to YouthBuild housing?

    Authority: 29 U.S.C. 2918a.

    Source: 77 FR 9129, Feb. 15, 2012, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec.672.100  What is YouthBuild?

    (a) YouthBuild is a workforce development program that provides 
employment, education, leadership development, and training 
opportunities to disadvantaged and low-income youth between the ages of 
16 and 24, most of whom are secondary school drop outs and are either a 
member of a low-income family, a foster care youth, a youth offender, a 
youth with a disability, a child of an incarcerated parent, or a migrant 
youth.
    (b) Program participants receive education services that may lead to 
either a high school diploma or General Educational Development (GED). 
Further, they receive occupational skills training and are encouraged to 
pursue a post- secondary education or additional training, including 
registered apprenticeship programs. The program is designed to create a 
skilled workforce either in the construction industry, through the 
rehabilitation and construction of housing for homeless individuals and 
families and low- income families, as well as public facilities, or in 
other high wage, high-demand jobs. The program also benefits the larger 
community because it provides more new and rehabilitated affordable 
housing.



Sec.672.105  What are the purposes of the YouthBuild program?

    (a) The overarching goal of the YouthBuild program is to provide 
disadvantaged and low-income youth the opportunity to obtain education 
and employment skills in local in-demand and high-demand jobs to achieve 
economic self-sufficiency. Additionally, the YouthBuild program has as 
goals:
    (1) To promote leadership skills development and community service 
activities. YouthBuild programs will foster the development of 
leadership skills and a commitment to community improvement among youth 
in low-income communities.
    (2) To enable youth to further their education and training. 
YouthBuild programs will provide counseling and assistance in obtaining 
post-secondary education and/or employment and training placements that 
allow youth to further their education and training.
    (3) To expand the supply of permanent affordable housing and reduce 
the rate of homelessness in communities with YouthBuild programs. The 
program seeks to increase the number of affordable housing units 
available and

[[Page 166]]

to decrease the number of homeless individuals and families in their 
communities.
    (b) Through these educational and occupational opportunities, to 
enable youth participants to provide a valuable contribution to their 
communities. The YouthBuild program will add skilled workers to the 
workforce by educating and training youth who might have otherwise 
succumbed to the negative influences within their environments.



Sec.672.110  What definitions apply to this part?

    Alternative school. The term ``alternative school'' means a school 
or program that is set up by a State, school district, or other 
community-based entity to serve young people who are not succeeding in a 
traditional public school environment. In order for an ``alternative 
school'' to qualify as of part of a ``sequential service strategy'' it 
must be recognized by the authorizing entity designated by the State, 
award a high school diploma or both a high school diploma and a GED and, 
must be affiliated with a YouthBuild program.
    Community or other public facility. The term ``community or other 
public facility'' means those facilities which are either privately 
owned by non-profit organizations, including faith-based and community-
based organizations, and publicly used for the benefit of the community, 
or publicly owned and publicly used for the benefit of the community.
    Core construction. The term ``core construction'' means activities 
that are directly related to the construction or rehabilitation of 
residential, community, or other public facilities. These activities 
include, but are not limited to, job skills that can be found under the 
Standard Occupational Classification System (SOC) major group 47, 
Construction and Extraction Occupations, in codes 47-1011 through 47-
4099. These activities may also include, but are not limited to, 
construction skills that may be required by green building and 
weatherization industries but are not yet standardized. A full list of 
the SOC's can be found at the Bureau of Labor Statistics (BLS) Web site, 
http://www.bls.gov/soc.
    Eligible entity. The term ``eligible entity'' means a public or 
private nonprofit agency or organization (including a consortium of such 
agencies or organizations), including--
    (1) A community-based organization;
    (2) A faith-based organization;
    (3) An entity carrying out activities under this Title, such as a 
local school board;
    (4) A community action agency;
    (5) A State or local housing development agency;
    (6) An Indian tribe or other agency primarily serving Indians;
    (7) A community development corporation;
    (8) A State or local youth service or conservation corps; and
    (9) Any other entity eligible to provide education or employment 
training under a Federal program (other than the program carried out 
under this part).
    Homeless individual. For purposes of YouthBuild, the definition of 
``homeless individual'' at Section 103 of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11302) applies.
    Housing development agency. The term ``housing development agency'' 
means any agency of a Federal, State or local government, or any private 
nonprofit organization, that is engaged in providing housing for 
homeless individuals or low-income families.
    Income. As defined in 42 U.S.C. 1437a(b), ``income'' is: Income from 
all sources of each member of the household, as determined in accordance 
with the criteria prescribed by the Secretary of Labor, in consultation 
with the Secretary of Agriculture, except that any amounts not actually 
received by the family and any amounts which would be eligible for 
exclusion under sec. 1382b(a)(7) of the United States Housing Act of 
1937, may not be considered as income under this paragraph.
    Indian; Indian tribe. As defined in 25 U.S.C. 450b of sec. 4 of the 
Indian Self- Determination and Education Assistance Act, the term 
``Indian'' is a person who is a member of an Indian tribe;

[[Page 167]]

and the term ``Indian tribe'' is any Indian tribe, band, nation, or 
other organized group or community, including any Alaska Native village 
or regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688) (43 U.S.C. 
1601 et seq.), which is recognized as eligible for the special programs 
and services provided by the United States to Indians because of their 
status as Indians.
    Individual of limited English proficiency. As defined in 20 U.S.C. 
9202(10), an ``individual of limited English proficiency'' is: An adult 
or out- of-school youth who has limited ability in speaking, reading, 
writing, or understanding the English language, and:
    (1) Whose native language is a language other than English; or
    (2) Who lives in a family or community environment where a language 
other than English is the dominant language.
    Low-income family. As defined in 42 U.S.C. 1437a(b)(2), a ``low-
income family'' is: A family whose income does not exceed 80 percent of 
the median income for the area, as determined by the Secretary of Labor 
with adjustments for smaller and larger families, except that the 
Secretary of Labor may establish income ceilings higher or lower than 80 
percent of the median for the area if the Secretary finds that such 
variations are necessary because of prevailing levels of construction 
costs or unusually high or low family incomes. Further, as defined by 42 
U.S.C. 1437a(b)(2)(3), the term families includes families consisting of 
one person.
    Migrant youth. The term ``migrant youth'' means a youth, or a youth 
who is the dependent of someone who, during the previous 12 months has:
    (1) Worked at least 25 days in agricultural labor that is 
characterized by chronic unemployment or underemployment;
    (2) Made at least $800 from agricultural labor that is characterized 
by chronic unemployment or underemployment, if at least 50 percent of 
his or her income came from such agricultural labor;
    (3) Was employed at least 50 percent of his or her total employment 
in agricultural labor that is characterized by chronic unemployment or 
underemployment; or
    (4) Was employed in agricultural labor that requires travel to a 
jobsite such that the farmworker is unable to return to a permanent 
place of residence within the same day.
    Needs-based stipend. The term ``Needs-based stipends'' means 
additional payments (beyond regular stipends for program participation) 
that are based on defined needs that enable youth to participate in the 
program. To provide needs-based stipends the grantee must have a written 
policy in place, which defines: Eligibility; the amounts; and the 
required documentation and criteria for payments. This policy must be 
applied consistently to all program participants.
    Occupational skills training. The term ``Occupational skills 
training'' means an organized program of study that provides specific 
vocational skills that lead to proficiency in performing the actual 
tasks and technical functions required by certain occupational fields at 
entry, intermediate, or advanced levels. The occupational skills 
training offered in YouthBuild programs must begin upon program 
enrollment and be tied to the award of an industry-recognized 
credential.
    Partnership. The term ``partnership'' means an agreement that 
involves a Memorandum of Understanding (MOU) or letter of commitment 
submitted by each organization and applicant, as defined in the 
YouthBuild Transfer Act, that plan on working together as partners in a 
YouthBuild program. Each partner must have a clearly defined role. These 
roles must be verified through a letter of commitment, not just a letter 
of support, or an MOU submitted by each partner. The letter of 
commitment or MOU must detail the role the partner will play in the 
YouthBuild Program, including the partner's specific responsibilities 
and resources committed, if appropriate. These letters or MOUs must 
clearly indicate the partnering organization's unique contribution and 
commitment to the YouthBuild Program.
    Public housing agency. As defined in 42 U.S.C. 1437a(b), a ``public 
housing

[[Page 168]]

agency'' is: Any State, county, municipality or other government entity 
or public body, or agency or instrumentality of these entities, that is 
authorized to engage or assist in the development or operation of low- 
income housing.
    Registered apprenticeship program. The term ``registered 
apprenticeship program'' means:
    (1) Registered under the Act of August 16, 1937 (commonly known as 
the ``National Apprenticeship Act''; 50 Stat. 664, chapter 663; 20 
U.S.C. 50 et seq.); and
    (2) A program with a plan containing all terms and conditions for 
the qualification, recruitment, selection, employment and training of 
apprentices, as required under 29 CFR parts 29 and 30, including such 
matters as the requirement for a written apprenticeship agreement.
    Sequential service strategy. The term ``sequential service 
strategy'' means the educational and occupational skills training plan 
developed for individuals who have dropped out of high school and want 
to enroll in a YouthBuild program. The plan is designed so that the 
individual sequentially enrolls in an alternative school, and after 
receiving a year or more of educational services, enrolls in the 
YouthBuild program.
    Transitional housing. The term ``transitional housing'' means 
housing provided for the purpose of facilitating the movement of 
homeless individuals to independent living within a reasonable amount of 
time. The term includes housing primarily designed to serve 
deinstitutionalized homeless individuals and other homeless individuals 
who are individuals with disabilities or are members of families with 
children.
    Youth in foster care. The term ``youth in foster care'' means youth 
currently in foster care or youth who have ever been in foster care.
    Youth who is an individual with a disability. The term youth who is 
an individual with a disability means a youth with any disability (as 
defined in section 3 of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12102)) or a student receiving special education and related 
services under the Individuals with Disabilities Education Act (IDEA).



                Subpart B_Funding and Grant Applications



Sec.672.200  How are YouthBuild grants funded and administered?

    The Secretary uses funds authorized for appropriation under sec. 
173A of the Workforce Investment Act (WIA) to administer YouthBuild as a 
national program under Title I, Subtitle D of the Act. YouthBuild grants 
are awarded to eligible entities, as defined in Sec.672.110, through a 
competitive selection process described in Sec.672.205.



Sec.672.205  How does an eligible entity apply for grant funds to operate a 

YouthBuild program?

    The Secretary announces the availability of grant funds through a 
Solicitation for Grant Applications (SGA). The SGA contains instructions 
for what is required in the grant application, describes eligibility 
requirements, the rating criteria that will be used in reviewing grant 
applications, and special reporting requirements to operate a YouthBuild 
project.



Sec.672.210  How are eligible entities selected to receive grant funds?

    In order to receive funds under the YouthBuild program, an eligible 
entity applying for funds (applicant) must meet selection criteria 
established by the Secretary which include:
    (a) The qualifications or potential capabilities of an applicant;
    (b) An applicant's potential to develop a successful YouthBuild 
program;
    (c) The need for an applicant's proposed program, as determined by 
the degree of economic distress of the community from which participants 
would be recruited (measured by indicators such as poverty, youth 
unemployment, and the number of individuals who have dropped out of 
secondary school) and of the community in which the housing and public 
facilities proposed to be rehabilitated or constructed are located 
(measured by indicators such as incidence of homelessness, shortage of 
affordable housing, and poverty);
    (d) The commitment of an applicant to provide skills training, 
leadership

[[Page 169]]

development, counseling and case management, and education to 
participants;
    (e) The focus of a proposed program on preparing youth for 
postsecondary education and training opportunities or local in-demand 
occupations;
    (f) The extent of an applicant's coordination of activities to be 
carried out through the proposed program with:
    (1) Local boards, One-Stop Career Center operators, and One-Stop 
partners participating in the operation of the One-Stop delivery system 
involved, or the extent of the applicant's good faith efforts, as 
determined by the Secretary, in achieving such coordination;
    (2) Public education, criminal justice, housing and community 
development, national service, or postsecondary education or other 
systems that relate to the goals of the proposed program; and
    (3) Employers in the local area.
    (g) The extent to which a proposed program provides for inclusion of 
tenants who were previously homeless individuals or families in the 
rental of housing provided through the program;
    (h) The commitment of additional resources to the proposed program 
(in addition to the funds made available through the grant) by:
    (1) An applicant;
    (2) Recipients of other Federal, State, or local housing and 
community development assistance who will sponsor any part of the 
rehabilitation, construction, operation and maintenance, or other 
housing and community development activities undertaken as part of the 
proposed program; or
    (3) Entities carrying out other Federal, State, or local activities 
or activities conducted by Indian tribes, including vocational education 
programs, adult and language instruction educational programs, and job 
training using funds provided under WIA,
    (i) An applicant's ability to enter partnerships with:
    (1) Education and training providers including:
    (i) The kindergarten through twelfth grade educational system;
    (ii) Adult education programs;
    (iii) Community and technical colleges;
    (iv) Four-year colleges and universities;
    (v) Registered apprenticeship programs; and
    (vi) Other training entities.
    (2) Employers, including professional organizations and 
associations. An applicant will be evaluated on the extent to which 
employers participate in:
    (i) Defining the program strategy and goals;
    (ii) Identifying needed skills and competencies;
    (iii) Designing training approaches and curricula;
    (iv) Contributing financial support; and
    (v) Hiring qualified YouthBuild graduates.
    (3) The workforce investment system which may include:
    (i) State and local workforce investment boards;
    (ii) State workforce agencies; and
    (iii) One-Stop Career Centers and their cooperating partners.
    (4) The juvenile and adult justice systems, and the extent to which 
they provide:
    (i) Support and guidance for YouthBuild participants with court 
involvement;
    (ii) Assistance in the reporting of recidivism rates among 
YouthBuild participants; and
    (iii) Referrals of eligible participants through diversion or re-
entry from incarceration.
    (5) Faith-based and community organizations, and the extent to which 
they provide a variety of grant services such as:
    (i) Case management;
    (ii) Mentoring;
    (iii) English as a Second Language courses; and
    (iv) Other comprehensive supportive services, when appropriate.
    (j) The applicant's potential to serve different regions, including 
rural areas and States that may not have previously received grants for 
YouthBuild programs; and
    (k) Such other factors as the Secretary determines to be appropriate 
for purposes of evaluating an applicant's potential to carry out the 
proposed program in an effective and efficient manner.

[[Page 170]]

    (l) The weight to be given to these factors will be described in the 
SGA issued under Sec.672.205.



Sec.672.215  How are eligible entities notified of approval for grant funds?

    The Secretary will, to the extent practicable, notify each eligible 
entity applying for funds no later than 5 months from the date the 
application is received, whether the application is approved or 
disapproved. In the event additional funds become available, ETA 
reserves the right to use such funds to select additional grantees from 
applications submitted in response to an SGA.



                     Subpart C_Program Requirements



Sec.672.300  Who is an eligible participant?

    (a) Eligibility criteria. Except as provided in paragraph (b) of 
this section, an individual is eligible to participate in a YouthBuild 
program if the individual is:
    (1) Not less than age 16 and not more than age 24 on the date of 
enrollment; and
    (2) A school dropout or an individual who has dropped out of school 
and reenrolled in an alternative school, if that reenrollment is part of 
a sequential service strategy; and
    (3) Is one or more of the following:
    (i) A member of a low-income family as defined in Sec.672.110;
    (ii) A youth in foster care;
    (iii) A youth offender;
    (iv) A youth who is an individual with a disability;
    (v) The child of a current or formerly incarcerated parent; or
    (vi) A migrant youth as defined in Sec.672.110.
    (b) Exceptions. Not more than 25 percent of the participants in a 
program, under this section, may be individuals who do not meet the 
requirements of paragraph (a)(2) or (3) of this section, if such 
individuals:
    (1) Are basic skills deficient as defined in section 101(4) of WIA, 
even if they have their high school diploma, GED credential, or other 
State-recognized equivalent; or
    (2) Have been referred by a local secondary school for participation 
in a YouthBuild program leading to the attainment of a secondary school 
diploma.



Sec.672.305  Are there special rules that apply to veterans?

    Special rules for determining income for veterans are found in 20 
CFR 667.255 and for the priority of service provisions for qualified 
persons are found in 20 CFR part 1010. Those special rules apply to 
covered persons who are eligible to participate in the YouthBuild 
program.



Sec.672.310  What eligible activities may be funded under the YouthBuild 

program?

    Grantees may provide one or more of the following education and 
workforce investment and other activities to YouthBuild participants--
    (a) Eligible education activities include:
    (1) Services and activities designed to meet the educational needs 
of participants, including:
    (i) Basic skills instruction and remedial education;
    (ii) Language instruction educational programs for individuals with 
limited English proficiency;
    (iii) Secondary education services and activities, including 
tutoring, study skills training, and dropout prevention activities, 
designed to lead to the attainment of a secondary school diploma, GED 
credential, or other State- recognized equivalent (including recognized 
alternative standards for individuals with disabilities);
    (iv) Counseling and assistance in obtaining post-secondary education 
and required financial aid; and
    (v) Alternative secondary school services;
    (2) Counseling services and related activities, such as 
comprehensive guidance and counseling on drug and alcohol abuse and 
referral to appropriate treatment;
    (3) Activities designed to develop employment and leadership skills, 
which may include community service and peer-centered activities 
encouraging responsibility and other positive social behaviors, and 
activities related to

[[Page 171]]

youth policy committees that participate in decisionmaking related to 
the program; and
    (4) Supportive services, as defined under Title I of WIA Section 
101(46), and provision of need-based stipends, as defined in Sec.
672.110.
    (b) Eligible workforce investment activities include:
    (1) Work experience and skills training (coordinated, to the maximum 
extent feasible, with registered apprenticeship programs) in housing 
rehabilitation and construction activities described in paragraphs 
(c)(1) and (2) of this section;
    (2) Occupational skills training;
    (3) Other paid and unpaid work experiences, including internships 
and job shadowing; and
    (4) Job search assistance.
    (c) Other eligible activities include:
    (1) Supervision and training for participants in the rehabilitation 
or construction of housing, including residential housing for homeless 
individuals and families or low-income families, or transitional housing 
for homeless individuals and families;
    (2) Supervision and training for participants in the rehabilitation 
or construction of community or other public facilities, except that, as 
provided in Sec.672.505(b), not more than 10 percent of the funds 
awarded for each grant may be used for such supervision and training;
    (3) Ongoing training and technical assistance for staff of grant 
recipients that is related to developing and carrying out the YouthBuild 
program;
    (4) Payment of a portion of the administrative costs of the program 
as provided in Sec.672.505(a);
    (5) Adult mentoring;
    (6) Provision of wages, stipends, or additional benefits to 
participants in the program as provided in Sec.672.530; and
    (7) Follow-up services as provided in Sec.672.325.



Sec.672.315  What timeframes apply to participation?

    An eligible individual selected for participation in the program 
must be offered full-time participation in the program for not less than 
6 months and not more than 24 months.



Sec.672.320  What timeframes must be devoted to education and workforce 

investment or other activities?

    YouthBuild grantees must structure programs so that participants in 
the program are offered:
    (a) Eligible education activities, as specified in Sec.672.310(a), 
during at least 50 percent of the time during which they participate in 
the program; and
    (b) Eligible workforce investment activities, as specified in Sec.
672.310(b), during at least 40 percent of the time during which they 
participate in the program. Grantees must provide the eligible workforce 
investment activities described in Sec.672.310(b)(1) as part of their 
program of eligible workforce investment activities.
    (c) The remaining 10 percent of the time of participation can be 
used for the activities described in paragraphs (a) and (b) of this 
section and/or for leadership development and community service 
activities.



Sec.672.325  What timeframes apply for follow-up services?

    Follow-up services must be provided to all YouthBuild participants 
for a period of not less than 9 months but no more than 12 months after 
participants exit a YouthBuild program. These are services that assist 
participants in obtaining or retaining employment, or applying for and 
transitioning to post-secondary education or training.



                    Subpart D_Performance Indicators



Sec.672.400  What are the performance indicators for YouthBuild grants?

    (a) The performance indicators for YouthBuild grants are:
    (1) Placement in employment or education;
    (2) Attainment of a degree or certificate;
    (3) Literacy and numeracy gains; and
    (4) Such other indicators of performance as may be required by the 
Secretary.
    (b) We will provide the details of the performance indicators in 
administrative guidance.

[[Page 172]]



Sec.672.405  What are the required levels of performance for the performance 

indicators?

    (a) Expected levels of performance for each of the common 
performance indicators are national standards that are provided in 
separately issued guidance. Short-term or other performance indicators 
will be provided in separately issued guidance or as part of the SGA or 
grant agreement. Performance level expectations are based on available 
YouthBuild data and data from similar WIA Youth programs and may change 
between grant competitions. The expected national levels of performance 
will take into account the extent to which the levels promote continuous 
improvement in performance.
    (b) The levels of performance established will, at a minimum:
    (1) Be expressed in an objective, quantifiable, and measurable form; 
and
    (2) Indicate continuous improvement in performance.



Sec.672.410  What are the reporting requirements for YouthBuild grantees?

    Each grantee must provide such reports as are required by the 
Secretary in separately issued guidance, including:
    (a) The Quarterly Performance Report;
    (b) The quarterly narrative progress report;
    (c) The financial report; and
    (d) Such other reports as may be required by the grant agreement.



Sec.672.415  What are the due dates for quarterly reporting?

    (a) Quarterly reports are due no later than 45 days after the end of 
the reporting quarter, unless otherwise specified in the reporting 
guidance issued under Sec.672.410; and
    (b) A final financial report is required 90 days after the 
expiration of a funding period or the termination of grant support.



         Subpart E_Administrative Rules, Costs, and Limitations



Sec.672.500  What administrative regulations apply to the YouthBuild program?

    Each YouthBuild grantee must comply with the following:
    (a) The regulations found in this part.
    (b) The general administrative requirements found in 20 CFR part 
667, except those that apply only to the WIA Title I-B program and those 
that have been modified by this section.
    (c) The Department's regulations on government-wide requirements, 
which include:
    (1) The regulations codifying the Office of Management and Budget's 
government-wide grants requirements: Circular A-110 (codified at 2 CFR 
part 215), and Circular A-102 at 29 CFR parts 95 and 97, as applicable;
    (2) The Department's regulations at 29 CFR part 37, which implement 
the nondiscrimination provisions of WIA section 188;
    (3) The Department's regulations at 29 CFR parts 93, 94, and 98 
relating to restrictions on lobbying, drug free workplace, and debarment 
and suspension; and
    (4) The audit requirements of OMB Circular A-133 stated at 29 CFR 
part 99, as required by 29 CFR 96.11, 95.26, and 97.26, as applicable.



Sec.672.505  How may grantees provide services under the YouthBuild program?

    Each recipient of a grant under the YouthBuild program may provide 
the services and activities described in these regulations either 
directly or through subgrants, contracts, or other arrangements with 
local educational agencies, postsecondary educational institutions, 
State or local housing development agencies, other public agencies, 
including agencies of Indian tribes, or private organizations.



Sec.672.510  What cost limits apply to the use of YouthBuild program funds?

    (a) Administrative costs for programs operated under YouthBuild are 
limited to no more than 15 percent of the grant

[[Page 173]]

award. The definition of administrative costs can be found in 20 CFR 
667.220.
    (b) The cost of supervision and training for participants involved 
in the rehabilitation or construction of community and other public 
facilities is limited to no more than 10 percent of the grant award.



Sec.672.515  What are the cost-sharing or matching requirements of the 

YouthBuild program?

    (a) The cost-sharing or matching requirements applicable to a 
YouthBuild grant will be addressed in the grant agreement.
    (b) The value of construction materials used in the YouthBuild 
program is an allowable cost for the purposes of the required non-
Federal share or match.
    (c) The value of land acquired for the YouthBuild program is not an 
allowable cost-sharing or match.
    (d) Federal funds may not be used as cost-sharing or match resources 
except as provided by Federal law.
    (e) The value of buildings acquired for the YouthBuild program is an 
allowable match, provided that the following conditions apply:
    (1) The purchase cost of buildings used solely for training purposes 
is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase price related to direct training activities.
    (f) Grantees must follow the requirements of 29 CFR 95.23 or 29 CFR 
97.24 in the accounting, valuation, and reporting of the required non-
Federal share.



Sec.672.520  What are considered to be leveraged funds?

    (a) Leveraged funds may be used to support allowable YouthBuild 
program activities and consist of payments made for allowable costs 
funded by both non-YouthBuild Federal, and non-Federal, resources which 
include:
    (1) Costs which meet the criteria for cost-sharing or match in Sec.
672.515 and are in excess of the amount of cost-sharing or match 
resources required;
    (2) Costs which would meet the criteria in Sec.672.515 except that 
they are paid for with other Federal resources; and
    (3) Costs which benefit the grant program and are otherwise 
allowable under the cost principles but are not allowable under the 
grant because of some statutory, regulatory, or grant provision, whether 
paid for with Federal or non-Federal resources.
    (b) The use of leveraged funds must be reported in accordance with 
Departmental instructions.



Sec.672.525  How are the costs associated with real property treated in the 

YouthBuild program?

    (a) As provided in paragraphs (b) and (c) of this section, the costs 
of the following activities associated with real property are allowable 
solely for the purpose of training YouthBuild participants:
    (1) Rehabilitation of existing structures for use by homeless 
individuals and families or low-income families or for use as 
transitional housing.
    (2) Construction of buildings for use by homeless individuals and 
families or low-income families or for use as transitional housing.
    (3) Construction or rehabilitation of community or other public 
facilities, except, as provided in Sec.672.510(b), only 10 percent of 
the grant award is allowable for such construction and rehabilitation.
    (b) The costs for acquisition of buildings that are used for 
activities described in paragraph (a) of this section are allowable with 
prior grant officer approval and only under the following conditions:
    (1) The purchase cost of buildings used solely for training purposes 
is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase cost related to direct training.
    (c) The following costs are allowable to the extent allocable to 
training YouthBuild participants in the construction and rehabilitation 
activities specified in paragraph (a) of this section:
    (1) Trainees' tools and clothing including personal protective 
equipment (PPE);

[[Page 174]]

    (2) On-site trainee supervisors;
    (3) Construction management;
    (4) Relocation of buildings; and
    (5) Clearance and demolition.
    (d) Architectural fees, or a proportionate share thereof, are 
allowable when such fees can be related to items such as architectural 
plans or blueprints on which participants will be trained.
    (e) The following costs are unallowable:
    (1) The costs of acquisition of land.
    (2) Brokerage fees.



Sec.672.530  What participant costs are allowable under the YouthBuild 

program?

    Allowable participant costs include:
    (a) The costs of payments to participants engaged in eligible work-
related YouthBuild activities.
    (b) The costs of payments provided to participants engaged in non-
work- related YouthBuild activities.
    (c) The costs of needs-based stipends.
    (d) The costs of supportive services.
    (e) The costs of providing additional benefits to participants or 
individuals who have exited the program and are receiving follow-up 
services, which may include:
    (1) Tuition assistance for obtaining college education credits;
    (2) Scholarships to an Apprenticeship, Technical, or Secondary 
Education program; and
    (3) Sponsored health programs.



Sec.672.535  What effect do payments to YouthBuild participants have on 

eligibility for other Federal need-based benefits?

    Under 20 CFR 667.272(c), allowances, earnings, and payments to 
individuals participating in programs under Title I of WIA are not 
considered as income for purposes of determining eligibility for and the 
amount of income transfer and in-kind aid furnished under any Federal or 
Federally-assisted program based on need other than as provided under 
the Social Security Act (42 U.S.C. 301).



Sec.672.540  What program income requirements apply under the YouthBuild 

program?

    (a) Except as provided in paragraph (b) of this section, program 
income requirements, as specified in the applicable Uniform 
Administrative Requirements at 29 CFR 95.24 and 97.25, apply to 
YouthBuild grants.
    (b) Revenue from the sale of buildings rehabilitated or constructed 
under the YouthBuild program to homeless individuals and families and 
low-income families is not considered program income. Grantees are 
encouraged to use that revenue for the long-term sustainability of the 
YouthBuild program.



Sec.672.545  Are YouthBuild programs subject to the Davis-Bacon Act labor 

standards?

    (a) YouthBuild programs and grantees are subject to Davis-Bacon 
labor standards requirements under the circumstances set forth in 
paragraph (b) of this section. In those instances where a grantee is 
subject to Davis-Bacon requirements, the grantee must follow applicable 
requirements in the Department's regulations at 29 CFR parts 1, 3, and 
5, including the requirements contained in the Davis-Bacon contract 
provisions set forth in 29 CFR 5.5.
    (b) YouthBuild participants are subject to Davis-Bacon Act labor 
standards when they perform Davis-Bacon-covered laborer or mechanic 
work, defined at 29 CFR 5.2, on Federal or Federally-assisted projects 
that are subject to the Davis-Bacon Act labor standards. The Davis-Bacon 
prevailing wage requirements apply to hours worked on the site of the 
work.
    (c) YouthBuild participants who are not registered and participating 
in a training program approved by the Employment and Training 
Administration must be paid not less than the applicable wage rate on 
the wage determination for the classification of work actually 
performed.



Sec.672.550  What are the recordkeeping requirements for YouthBuild programs?

    (a) Grantees must follow the recordkeeping requirements specified in 
the Uniform Administrative Requirements, at 29 CFR 95.53 and 29 CFR 
97.42, as appropriate.
    (b) Grantees must maintain such additional records related to the 
use of

[[Page 175]]

buildings constructed or rehabilitated with YouthBuild funds as 
specified in the grant agreement or in the Department's guidance.



                    Subpart F_Additional Requirements



Sec.672.600  What are the safety requirements for the YouthBuild program?

    (a) YouthBuild Grantees must comply with 20 CFR 667.274, which 
applies Federal and State health and safety standards to the working 
conditions under WIA-funded projects and programs. These health and 
safety standards include ``hazardous orders'' governing child labor 
under 29 CFR part 570 prohibiting youth ages 16 and 17 from working in 
identified hazardous occupations.
    (b) YouthBuild grantees are required to:
    (1) Provide comprehensive safety training for youth working on 
YouthBuild construction projects;
    (2) Have written, jobsite-specific, safety plans overseen by an on-
site supervisor with authority to enforce safety procedures;
    (3) Provide necessary personal protective equipment to youth working 
on YouthBuild projects; and
    (4) Submit required injury incident reports.



Sec.672.605  What are the reporting requirements for youth safety?

    YouthBuild grantees must ensure that YouthBuild program sites comply 
with the Occupational Safety and Health Administration's (OSHA) 
reporting requirements in 29 CFR part 1904. A YouthBuild grantee is 
responsible for sending a copy of OSHA's injury incident report form, to 
U.S. Department of Labor, Employment and Training Administration within 
7 days of any reportable injury suffered by a YouthBuild participant. 
The injury incident report form is available from OSHA and can be 
downloaded at http://www.osha.gov/recordkeeping/RKforms.html. Reportable 
injuries include those that result in death, days away from work, 
restricted work or transfer to another job, medical treatment beyond 
first aid, or loss of consciousness.



Sec.672.610  What environmental protection laws apply to the YouthBuild 

program?

    YouthBuild Program grantees are required, where applicable, to 
comply with all environmental protection statutes and regulations.



Sec.672.615  What requirements apply to YouthBuild housing?

    (a) YouthBuild grantees must ensure that all residential housing 
units which are constructed or rehabilitated using YouthBuild funds must 
be available solely for:
    (1) Sale to homeless individuals and families or low-income 
families;
    (2) Rental by homeless individuals and families or low-income 
families;
    (3) Use as transitional or permanent housing for the purpose of 
assisting in the movement of homeless individuals and families to 
independent living; or
    (4) Rehabilitation of homes for low-income homeowners.
    (b) For rentals of residential units located on the property which 
are constructed or rehabilitated using YouthBuild funds:
    (1) The property must maintain at least a 90 percent level of 
occupancy for low-income families. The income test will be conducted 
only at the time of entry for each available unit or rehabilitation of 
occupant-owned home. If the grantee cannot find a qualifying tenant to 
lease the unit, the unit may be leased to a family whose income is above 
the income threshold to qualify as a low-income family but below the 
median income for the area. Leases for tenants with higher incomes will 
be limited to not more than two years. The leases provided to tenants 
with higher incomes are not subject to the termination clause that is 
described in paragraph (b)(2) of this section.
    (2) The property owner must not terminate the tenancy or refuse to 
renew the lease of a tenant occupying a residential rental housing unit 
constructed or rehabilitated using YouthBuild funds except for serious 
or repeated violations of the terms and conditions of the lease, for 
violation of applicable Federal, State or local laws, or for good cause. 
Any termination or refusal to renew the lease must be preceded by not 
less than a 30-day written notice to

[[Page 176]]

the tenant specifying the grounds for the action. The property owner may 
waive the written notice requirement for termination in dangerous or 
egregious situations involving the tenant.
    (c) All transitional or permanent housing for homeless individuals 
or families or low-income families must be safe and sanitary. The 
housing must meet all applicable State and local housing codes and 
licensing requirements in the jurisdiction in which the housing is 
located.
    (d) For sales or rentals of residential housing units constructed or 
rehabilitated using YouthBuild funds, YouthBuild grantees must ensure 
that owners of the property record a restrictive covenant at the time 
that an occupancy permit is issued against such property which includes 
the use restrictions set forth in paragraphs (a), (b), and (c) of this 
section and incorporates the following definitions at Sec.672.110: 
Homeless Individual; Low- Income Housing; and Transitional Housing. The 
term of the restrictive covenant must be at least 10 years from the time 
of the issuance of the occupancy permit, unless a time period of more 
than 10 years has been established by the grantee. Any additional 
stipulations imposed by a grantee or property owner should be clearly 
stated in the covenant.
    (e) Any conveyance document prepared in the 10-year period of the 
restrictive covenant must inform the buyer of the property that all 
residential housing units constructed or rehabilitated using YouthBuild 
funds are subject to the restrictions set forth in paragraphs (a), (b), 
(c), and (d) of this section.

                        PARTS 673-699 [RESERVED]

[[Page 177]]



  CHAPTER VI--OFFICE OF WORKERS' COMPENSATION PROGRAMS, DEPARTMENT OF 

                                  LABOR




  --------------------------------------------------------------------

 SUBCHAPTER A--LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT AND 
                            RELATED STATUTES
Part                                                                Page
700

[Reserved]

701             General; administering agency; definitions 
                    and use of terms........................         179
702             Administration and procedure................         184
703             Insurance regulations.......................         231
704             Special provisions for LHWCA extensions.....         246
   SUBCHAPTER B--FEDERAL COAL MINE HEALTH AND SAFETY ACT OF 1969, AS 
                                 AMENDED
718             Standards for determining coal miners' total 
                    disability or death due to 
                    pneumoconiosis..........................         250
722             Criteria for determining whether State 
                    workers' compensation laws provide 
                    adequate coverage for pneumoconiosis and 
                    listing of approved State laws..........         276
725             Claims for benefits under Part C of Title IV 
                    of the Federal Mine Safety and Health 
                    Act, as amended.........................         277
726             Black lung benefits; requirements for coal 
                    mine operator's insurance...............         353
727-799         [Reserved]

[[Page 179]]



  SUBCHAPTER A_LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT AND 

                            RELATED STATUTES



                           PART 700 [RESERVED]



PART 701_GENERAL; ADMINISTERING AGENCY; DEFINITIONS AND USE OF TERMS--Table of 

Contents



                        Rules in this Subchapter

Sec.
701.101 Scope of this subchapter and subchapter B.
701.102 Organization of this subchapter.

                Office of Workmen's Compensation Programs

701.201 Office of Workers' Compensation Programs.
701.202-702.203 [Reserved]

                      Definitions and Use of Terms

701.301 What do certain terms in this subchapter mean?
701.302 Who is an employee?

               Coverage Under State Compensation Programs

701.401 Coverage under State compensation programs.

Special Rules for the Recreational Vessel Exclusion From the Definition 
                             of ``Employee''

701.501 What is a recreational vessel?
701.502 What types of work may exclude a recreational-vessel worker from 
          the definition of ``employee''?
701.503 Did the American Recovery and Reinvestment Act of 2009 amend the 
          recreational vessel exclusion?
701.504 When does the recreational vessel exclusion in the American 
          Recovery and Reinvestment Act of 2009 apply?
701.505 May an employer stop paying benefits awarded before February 17, 
          2009 if the employee would now fall within the exclusion?

    Authority: 5 U.S.C. 301, 8171 et seq.; 33 U.S.C. 939; 36 D.C. Code 
501 et seq.; 42 U.S.C. 1651 et seq.; 43 U.S.C. 1333; Reorganization Plan 
No. 6 of 1950, 15 FR 3174, 3 CFR, 1949-1953 Comp., p. 1004, 64 Stat. 
1263; Secretary's Order 10-2009, 74 FR 58834.

    Source: 38 FR 26860, Sept. 26, 1973, unless otherwise noted.

                        Rules in This Subchapter



Sec.701.101  Scope of this subchapter and subchapter B.

    (a) This subchapter contains the regulations governing the 
administration of the Longshore and Harbor Workers' Compensation Act, as 
amended (LHWCA), 33 U.S.C. 901 et seq., except activities, pursuant to 
33 U.S.C. 941, assigned to the Assistant Secretary of Labor for 
Occupational Safety and Health. It also contains the regulations 
governing the administration of the direct extensions of the LHWCA: the 
Defense Base Act (DBA), 42 U.S.C. 1651 et seq.; the Outer Continental 
Shelf Lands Act (OCSLA), 43 U.S.C. 1331; and the Nonappropriated Fund 
Instrumentalities Act (NFIA), 5 U.S.C. 8171 et seq.
    (b) The regulations in this subchapter also apply to claims filed 
under the District of Columbia Workmen's Compensation Act (DCCA), 36 
D.C. Code 501 et seq. That law applies to all claims for injuries or 
deaths based on employment events that occurred prior to July 26, 1982, 
the effective date of the District of Columbia Workers' Compensation 
Act, as amended (D.C. Code 32-1501 et seq.).
    (c) The regulations governing the administration of the Black Lung 
Benefits Program are in subchapter B of this chapter.

[70 FR 43232, July 26, 2005]



Sec.701.102  Organization of this subchapter.

    Part 701 provides a general description of the regulations in this 
subchapter; sets forth information regarding the persons and agencies 
within the Department of Labor authorized by the Secretary of Labor to 
administer the Longshore and Harbor Workers' Compensation Act, its 
extensions and the regulations in this subchapter; and defines and 
clarifies use of specific terms in the several parts of this subchapter. 
Part 702 of this subchapter contains the general administrative 
regulations governing claims filed under the LHWCA. Part 703 of this 
subchapter

[[Page 180]]

contains the regulations governing insurance carrier authorizations, 
insurance carrier security deposits, self-insurer authorizations, and 
certificates of compliance with the insurance regulations, as required 
by sections 32 and 37 of the LHWCA (33 U.S.C. 932, 937). Because the 
extensions of the LHWCA (see Sec.701.101) incorporate by reference 
nearly all the provisions of the LHWCA, the regulations in parts 701, 
702 and 703 also apply to the administration of the extensions (DBA, 
DCCA, OCSLA, and NFIA), unless otherwise noted. Part 704 of this 
subchapter contains the exceptions to the general applicability of parts 
702 and 703 for the DBA, the DCCA, the OCSLA, and the NFIA.

[70 FR 43232, July 26, 2005]

                Office of Workers' Compensation Programs



Sec.701.201  Office of Workers' Compensation Programs.

    The Office of Workers' Compensation Programs is responsible for 
administering the LHWCA and its extensions.

[75 FR 63380, Oct. 15, 2010]



Sec. Sec.701.202-701.203  [Reserved]

                      Definitions and Use of Terms



Sec.701.301  What do certain terms in this subchapter mean?

    (a) As used in this subchapter, except where the context clearly 
indicates otherwise:
    (1) Act or LHWCA means the Longshore and Harbor Workers' 
Compensation Act, as amended (33 U.S.C. 901 et seq.), and includes the 
provisions of any statutory extension of such Act (see Sec.701.101(a) 
and (b)) pursuant to which compensation on account of an injury is 
sought.
    (2) Secretary means the Secretary of Labor, United States Department 
of Labor, or his authorized representative.
    (3)-(4) [Reserved]
    (5) Office of Workers' Compensation Programs or OWCP or the Office 
means the Office of Workers' Compensation Programs, referred to in Sec.
701.201. The term Office of Workmen's Compensation Programs shall have 
the same meaning as Office of Workers' Compensation Programs (see 20 CFR 
1.6(b)).
    (6) Director means the Director of OWCP, or his or her authorized 
representative.
    (7) District Director means a person appointed as provided in 
sections 39 and 40 of the LHWCA or his or her designee, authorized to 
perform functions with respect to the processing and determination of 
claims for compensation under the LHWCA and its extensions as provided 
therein and under this subchapter. The term District Director is 
substituted for the term Deputy Commissioner used in the statute. This 
substitution is for administrative purposes only and in no way affects 
the power or authority of the position as established in the statute.
    (8) Administrative Law Judge means a person appointed as provided in 
5 U.S.C. 3105 and subpart B of 5 CFR part 930, who is qualified to 
preside at hearings under 5 U.S.C. 557 and is empowered by the Secretary 
to conduct formal hearings whenever necessary in respect of any claim 
for compensation arising under the LHWCA and its extensions.
    (9) Chief Administrative Law Judge means the Chief Judge of the 
Office of Administrative Law Judges, United States Department of Labor, 
whose office is at the location set forth in 29 CFR 18.3(a).
    (10) Board or Benefits Review Board means the Benefits Review Board 
established by section 21 of the LHWCA (33 U.S.C. 921) as amended and 
constituted and functioning pursuant to the provisions of chapter VII of 
this title and Secretary of Labor's Order No. 38-72 (38 FR 90), whose 
office is at the location set forth in 20 CFR 802.204.
    (11) Department means the United States Department of Labor.
    (12) Employer includes any employer who may be obligated as an 
employer under the provisions of the LHWCA as amended or any of its 
extensions to pay and secure compensation as provided therein.
    (13) Carrier means an insurance carrier or self-insurer meeting the 
requirements of section 32 of the LHWCA as amended and of this 
subchapter with respect to authorization to provide insurance fulfilling 
the obligation of an

[[Page 181]]

employer to secure the payment of compensation due his employees under 
the LHWCA as amended or a statutory extension thereof.
    (14) The terms wages, national average weekly wage, injury, 
disability, death, and compensation shall have the meanings set forth in 
section 2 of the LHWCA.
    (15) Claimant includes any person claiming compensation or benefits 
under the provisions of the LHWCA as amended or a statutory extension 
thereof on account of the injury or death of an employee.
    (b) The definitions contained in paragraph (a) of this section shall 
not be considered to derogate from any definitions or delimitations of 
terms in the LHWCA as amended or any of its statutory extensions in any 
case where such statutory definitions or delimitations would be 
applicable.
    (c) As used in this subchapter, the singular includes plural and the 
masculine includes the feminine.

[38 FR 26860, Sept. 26, 1973, as amended at 42 FR 3848, Jan. 21, 1977; 
50 FR 391, Jan. 3, 1985; 51 FR 4281, Feb. 3, 1986; 55 FR 28606, July 12, 
1990; 70 FR 43233, July 26, 2005; 76 FR 82127, Dec. 30, 2011; 77 FR 
37286, June 21, 2012]



Sec.701.302  Who is an employee?

    (a) Employee means any person engaged in maritime employment, 
including:
    (1) Any longshore worker or other person engaged in longshoring 
operations;
    (2) Any harbor worker, including a ship repairer, shipbuilder and 
shipbreaker; and
    (3) Any other individual to whom an injury may be the basis for a 
compensation claim under the LHWCA as amended, or any of its extensions;
    (b) The term does not include:
    (1) A master or member of a crew of any vessel; or
    (2) Any person engaged by a master to load or unload or repair any 
small vessel under eighteen tons net.
    (c) Nor does this term include the following individuals (whether or 
not the injury occurs over the navigable waters of the United States) 
where it is first determined that they are covered by a state workers' 
compensation act:
    (1) Individuals employed exclusively to perform office clerical, 
secretarial, security, or data processing work (but not longshore cargo 
checkers and cargo clerks);
    (2) Individuals employed by a club (meaning a social or fraternal 
organization whether profit or nonprofit), camp, recreational operation 
(meaning any recreational activity, including but not limited to scuba 
diving, commercial rafting, canoeing or boating activities operated for 
pleasure of owners, members of a club or organization, or renting, 
leasing or chartering equipment to another for the latter's pleasure), 
restaurant, museum or retail outlet;
    (3) Individuals employed by a marina, provided they are not engaged 
in its construction, replacement or expansion, except for routine 
maintenance such as cleaning, painting, trash removal, housekeeping and 
small repairs;
    (4) Employees of suppliers, vendors and transporters temporarily 
doing business on the premises of a covered employer, provided they are 
not performing work normally performed by employees of the covered 
employer;
    (5) Aquaculture workers, meaning those employed by commercial 
enterprises involved in the controlled cultivation and harvest of 
aquatic plants and animals, including the cleaning, processing or 
canning of fish and fish products, the cultivation and harvesting of 
shellfish, and the controlled growing and harvesting of other aquatic 
species; or
    (6) Individuals employed to build any recreational vessel under 
sixty-five feet in length, or individuals employed to repair any 
recreational vessel, or to dismantle any part of a recreational vessel 
in connection with the repair of such vessel. For purposes of this 
paragraph, the special rules set forth at Sec. Sec.701.501 through 
701.505 apply.

[76 FR 82127, Dec. 30, 2011]

               Coverage Under State Compensation Programs



Sec.701.401  Coverage under state compensation programs.

    (a) Exclusions from the definition of ``employee'' under Sec.
701.301(a)(12), and the employees of small vessel facilities

[[Page 182]]

otherwise covered which are exempted from coverage under Sec.702.171, 
are dependent upon coverage under a state workers' compensation program. 
For these purposes, a worker or dependent must first claim compensation 
under the appropriate state program and receive a final decision on the 
merits of the claim, denying coverage, before any claim may be filed 
under this Act.
    (b) The intent of the Act is that state law will apply to those 
categories of employees if it otherwise would. Accordingly, not 
withstanding any contrary state law, claims by any of the categories of 
workers excluded under Sec.701.301 or 702.171 must be made to and 
processed by the state and a merit decision denying coverage on 
jurisdictional grounds must be made before coverage or benefits under 
the Act may be sought.
    (c) The time for filing notice and claim under the Act (see subpart 
B of part 702) does not begin to run for purposes of claims by those 
workers or dependents described in Sec.701.301(a)(12) and Sec.
702.171, until a final adverse decision denying coverage under a state 
compensation act is received.

[50 FR 392, Jan. 3, 1985]

Special Rules for the Recreational Vessel Exclusion From the Definition 
                             of ``Employee''



Sec.701.501  What is a recreational vessel?

    (a) Recreational vessel means a vessel--
    (1) Being manufactured or operated primarily for pleasure; or
    (2) Leased, rented, or chartered to another for the latter's 
pleasure.
    (b) In applying the definition in paragraph (a) of this section, the 
following rules apply:
    (1) A vessel being manufactured or built, or being repaired under 
warranty by its manufacturer or builder, is a recreational vessel if the 
vessel appears intended, based on its design and construction, to be for 
ultimate recreational uses. The manufacturer or builder bears the burden 
of establishing that a vessel is recreational under this standard.
    (2) A vessel being repaired, dismantled for repair, or dismantled at 
the end of its life is not a recreational vessel if the vessel had been 
operating, around the time of its repair or dismantling, in one or more 
of the following categories on more than an infrequent basis--
    (A) ``Passenger vessel'' as defined by 46 U.S.C. 2101(22);
    (B) ``Small passenger vessel'' as defined by 46 U.S.C. 2101(35);
    (C) ``Uninspected passenger vessel'' as defined by 46 U.S.C. 
2101(42);
    (D) Vessel routinely engaged in ``commercial service'' as defined by 
46 U.S.C. 2101(5); or
    (E) Vessel that routinely carries ``passengers for hire'' as defined 
by 46 U.S.C. 2101(21a).
    (3) Notwithstanding paragraph (b)(2) of this section, a vessel will 
be deemed recreational if it is a public vessel, i.e., a vessel owned or 
bareboat-chartered and operated by the United States, or by a State or 
political subdivision thereof, at the time of repair, dismantling for 
repair, or dismantling, provided that such vessel shares elements of 
design and construction with traditional recreational vessels and is not 
normally engaged in a military, commercial or traditionally commercial 
undertaking.
    (c) All subsequent amendments to the statutes referenced in 
paragraph (b)(2) of this section and the regulations implementing those 
provisions in Title 46 of the Code of Federal Regulations will apply 
when determining whether a vessel is recreational.

[76 FR 82128, Dec. 30, 2011]



Sec.701.502  What types of work may exclude a recreational-vessel worker from 

the definition of ``employee''?

    (a) An individual who works on recreational vessels may be excluded 
from the definition of ``employee'' when:
    (1) The individual's date of injury is before February 17, 2009, the 
injury is covered under a State workers' compensation law, and the 
individual is employed to:
    (i) Build any recreational vessel under sixty-five feet in length; 
or
    (ii) Repair any recreational vessel under sixty-five feet in length; 
or
    (iii) Dismantle any recreational vessel under sixty-five feet in 
length.
    (2) The individual's date of injury is on or after February 17, 
2009, the injury

[[Page 183]]

is covered under a State workers' compensation law, and the individual 
is employed to:
    (i) Build any recreational vessel under sixty-five feet in length; 
or
    (ii) Repair any recreational vessel; or
    (iii) Dismantle any recreational vessel to repair it.
    (b) In applying paragraph (a) of this section, the following 
principles apply:
    (1) ``Length'' means a straight line measurement of the overall 
length from the foremost part of the vessel to the aftmost part of the 
vessel, measured parallel to the center line. The measurement must be 
from end to end over the deck, excluding sheer. Bow sprits, bumpkins, 
rudders, outboard motor brackets, handles, and other similar fittings, 
attachments, and extensions are not included in the measurement.
    (2) ``Repair'' means any repair of a vessel including installations, 
painting and maintenance work. Repair does not include alterations or 
conversions that render the vessel a non-recreational vessel under Sec.
701.501. For example, a worker who installs equipment on a private yacht 
to convert it to a passenger-carrying whale-watching vessel is not 
employed to ``repair'' a recreational vessel. Repair also does not 
include alterations or conversions that render a non-recreational vessel 
recreational under Sec.701.501.
    (3) ``Dismantle'' means dismantling any part of a vessel to complete 
a repair but does not include dismantling any part of a vessel to 
complete alterations or conversions that render the vessel a non-
recreational vessel under Sec.701.501, or render the vessel 
recreational under Sec.701.501, or, if the date of injury is on or 
after February 17, 2009, to scrap or dispose of the vessel at the end of 
the vessel's life.

[76 FR 82128, Dec. 30, 2011]



Sec.701.503  Did the American Recovery and Reinvestment Act of 2009 amend the 

recreational vessel exclusion?

    Yes. The amended exclusion was effective February 17, 2009, the 
effective date of the American Recovery and Reinvestment Act of 2009.

[76 FR 82128, Dec. 30, 2011]



Sec.701.504  When does the recreational vessel exclusion in the American 

Recovery and Reinvestment Act of 2009 apply?

    (a) Date of injury. Whether the amended version applies depends on 
the date of the injury for which compensation is claimed. The following 
rules apply to determining the date of injury:
    (1) Traumatic injury. If the individual claims compensation for a 
traumatic injury, the date of injury is the date the employee suffered 
harm. For example, if the individual injures an arm or leg in the course 
of his or her employment, the date of injury is the date on which the 
individual was hurt.
    (2) Occupational disease or infection. Occupational illnesses and 
infections generally involve delayed onset of symptoms following 
exposure to a harmful workplace substance or condition. If the 
individual claims compensation for an occupational illness or infection, 
the date of injury is the date the individual was exposed to the 
substance or condition.
    (3) Hearing loss. If the individual claims compensation for hearing 
loss, the date of injury is the date the individual was exposed to 
harmful workplace noise or other stimulus that is capable of causing 
hearing loss.
    (4) Death-benefit claims. If the individual claims compensation for 
an employee's death, the date of injury is the date of the workplace 
event or incident that caused, hastened, or contributed to the death.
    (5) Cumulative trauma. If the individual claims compensation for 
cumulative trauma, in which multiple traumas contribute to an overall 
medical condition, such as a neck condition resulting from repetitive 
motion, the date of injury is any date on which a workplace trauma 
worsened the individual's condition. A workplace event will not be 
deemed a contributing trauma if a corresponding worsening of the 
condition is due solely to its natural progression, rather than the 
workplace event.
    (b) If the date of injury is before February 17, 2009, the 
individual's entitlement is governed by section 2(3)(F) as it existed 
prior to the 2009 amendment.

[[Page 184]]

    (c) If the date of injury is on or after February 17, 2009, the 
individual's entitlement is governed by the 2009 amendment to section 
2(3)(F).

[76 FR 82128, Dec. 30, 2011]



Sec.701.505  May an employer stop paying benefits awarded before February 17, 

2009 if the employee would now fall within the exclusion?

    No. If an individual was awarded compensation for an injury 
occurring before February 17, 2009, the employer must still pay all 
benefits awarded, including disability compensation and medical 
benefits, even if the employee would be excluded from coverage under the 
amended exclusion.

[76 FR 82129, Dec. 30, 2011]



PART 702_ADMINISTRATION AND PROCEDURE--Table of Contents



                      Subpart A_General Provisions

                             Administration

Sec.
702.101 [Reserved]
702.102 Establishment and modification of compensation districts, 
          establishment of suboffices and jurisdictional areas.
702.103 Effect of establishment of suboffices and jurisdictional areas.
702.104 Transfer of individual case file.
702.105 Use of the title District Director in place of Deputy 
          Commissioner.

                                 Records

702.111 Employer's records.
702.112 Records of the OWCP.
702.113 Inspection of records of the OWCP.
702.114 Copying of records of OWCP.

                                  Forms

702.121 Forms.

                             Representation

702.131 Representation of parties in interest.
702.132 Fees for services.
702.133 Unapproved fees; solicitation of claimants; penalties.
702.134 Payment of claimant's attorney's fees in disputed claims.
702.135 Payment of claimant's witness fees and mileage in disputed 
          claims.

                Information and Assistance for Claimants

702.136 Requests for information and assistance.

                Commutation of Payments and Special Fund

702.142 Commutation of payments; aliens not residents or about to become 
          nonresidents.
702.143 Establishment of special fund.
702.144 Purpose of the special fund.
702.145 Use of the special fund.
702.146 Source of the special fund.
702.147 Enforcement of special fund provisions.
702.148 Insurance carriers' and self-insured employers' responsibility.

                          Liens on Compensation

702.161 Liens against assets of insurance carriers and employers.
702.162 Liens on compensation authorized under special circumstances.

                       Certification of Exemption

702.171 Certification of exemption, general.
702.172 Certification; definitions.
702.173 Exemptions; requirements, limitations.
702.174 Exemptions; necessary information.
702.175 Effect of work on excluded vessels; reinstatement of 
          certification.

                       Subpart B_Claims Procedures

                           Employer's Reports

702.201 Reports from employers of employee's injury or death.
702.202 Employer's report; form and contents.
702.203 Employer's report; how given.
702.204 Employer's report; penalty for failure to furnish and or 
          falsifying.
702.205 Employer's report; effect of failure to report upon time 
          limitations.

                                 Notice

702.211 Notice of employee's injury or death; designation of responsible 
          official.
702.212 Notice; when given; when given for certain occupational 
          diseases.
702.213 Notice; by whom given.
702.214 Notice; form and content.
702.215 Notice; how given.
702.216 Effect of failure to give notice.
702.217 Penalty for false statement, misrepresentation.

                                 Claims

702.221 Claims for compensation; time limitations.
702.222 Claims; exceptions to time limitations.
702.223 Claims; time limitations; time to object.
702.224 Claims, notification of employer of filing by employee.
702.225 Withdrawal of a claim.

[[Page 185]]

                         Noncontroverted Claims

702.231 Noncontroverted claims; payment of compensation without an 
          award.
702.232 Payments without an award; when; how paid.
702.233 Penalty for failure to pay without an award.
702.234 Report by employer of commencement and suspension of payments.
702.235 Report by employer of final payment of compensation.
702.236 Penalty for failure to report termination of payments.

                           Agreed Settlements

702.241 Definitions and supplementary information.
702.242 Information necessary for a complete settlement application.
702.243 Settlement application; how submitted, how approved, how 
          disapproved, criteria.

                           Controverted Claims

702.251 Employer's controversion of the right to compensation.
702.252 Action by district director upon receipt of notice of 
          controversion.

                            Contested Claims

702.261 Claimant's contest of actions taken by employer or carrier with 
          respect to the claim.
702.262 Action by district director upon receipt of notice of contest.

                             Discrimination

702.271 Discrimination; against employees who bring proceedings, 
          prohibition and penalty.
702.272 Informal recommendation by district director.
702.273 Adjudication by Office of the Chief Administrative Law Judge.
702.274 Employer's refusal to pay penalty.

                               Third Party

702.281 Third party action.

                           Report of Earnings

702.285 Report of earnings.
702.286 Report of earnings; forfeiture of compensation.

                    Subpart C_Adjudication Procedures

                                 General

702.301 Scope of this subpart.

                      Action By District Directors

702.311 Handling of claims matters by district directors; informal 
          conferences.
702.312 Informal conferences; called by and held before whom.
702.313 Informal conferences; how called; when called.
702.314 Informal conferences; how conducted; where held.
702.315 Conclusion of conference agreement on all matters with respect 
          to the claim.
702.316 Conclusion of conference; no agreement on all matters with 
          respect to the claim.
702.317 Preparation and transfer of the case for hearing.
702.318 The record; what constitutes; nontransferability of the 
          administrative file.
702.319 Obtaining documents from the administrative file for 
          reintroduction at formal hearings.

                              Special Fund

702.321 Procedures for determining applicability of section 8(f) of the 
          Act.

                             Formal Hearings

702.331 Formal hearings; procedure initiating.
702.332 Formal hearings; how conducted.
702.333 Formal hearings; parties.
702.334 Formal hearings; representatives of parties.
702.335 Formal hearings; notice.
702.336 Formal hearings; new issues.
702.337 Formal hearings; change of time or place for hearings; 
          postponements.
702.338 Formal hearings; general procedures.
702.339 Formal hearings; evidence.
702.340 Formal hearings; witnesses.
702.341 Formal hearings; depositions; interrogatories.
702.342 Formal hearings; witness fees.
702.343 Formal hearings; oral argument and written allegations.
702.344 Formal hearings; record of hearing.
702.345 Formal hearings; consolidated issues; consolidated cases.
702.346 Formal hearings; waiver of right to appear.
702.347 Formal hearings; termination.
702.348 Formal hearings; preparation of final decision and order; 
          content.
702.349 Formal hearings; filing and mailing of compensation orders; 
          disposition of transcripts.
702.350 Finality of compensation orders.
702.351 Withdrawal of controversion of issues set for formal hearing; 
          effect.

     Interlocutory Matters, Supplementary Orders, and Modifications

702.371 Interlocutory matters.
702.372 Supplementary compensation orders.
702.373 Modification of awards.

                                 Appeals

702.391 Appeals; where.
702.392 Appeals; what may be appealed.

[[Page 186]]

702.393 Appeals; time limitations.
702.394 Appeals; procedure.

                 Subpart D_Medical Care and Supervision

702.401 Medical care defined.
702.402 Employer's duty to furnish; duration.
702.403 Employee's right to choose physician; limitations.
702.404 Physician defined.
702.405 Selection of physician; emergencies.
702.406 Change of physicians; non-emergencies.
702.407 Supervision of medical care.
702.408 Evaluation of medical questions; impartial specialists.
702.409 Evaluation of medical questions; results disputed.
702.410 Duties of employees with respect to special examinations.
702.411 Special examinations; nature of impartially of specialists.
702.412 Special examinations; costs chargeable to employer or carrier.
702.413 Fees for medical services; prevailing community charges.
702.414 Fees for medical services; unresolved disputes on prevailing 
          charges.
702.415 Fees for medical services; unresolved disputes on charges; 
          procedure.
702.416 Fees for medical services; disputes; hearings; necessary 
          parties.
702.417 Fees for medical services; disputes; effect of adverse decision.

                           Medical Procedures

702.418 Procedure for requesting medical care; employee's duty to notify 
          employer.
702.419 Action by employer upon acquiring knowledge or being given 
          notice of injury.
702.420 Issuance of authorization; binding effect upon insurance 
          carrier.
702.421 Effect of failure to obtain initial authorization.
702.422 Effect of failure to report on medical care after initial 
          authorization.

  Debarment of Physicians and Other Providers of Medical Services and 
                  Suppliers and Claims Representatives

702.431 Grounds for debarment.
702.432 Debarment process.
702.433 Requests for hearing.
702.434 Judicial review.
702.435 Effects of debarment.
702.436 Reinstatement.

                           Hearing Loss Claims

702.441 Claims for loss of hearing.

                   Subpart E_Vocational Rehabilitation

702.501 Vocational rehabilitation; objective.
702.502 Vocational rehabilitation; action by district directors.
702.503 Vocational rehabilitation; action by adviser.
702.504 Vocational rehabilitation; referrals to State Employment 
          Agencies.
702.505 Vocational rehabilitation; referrals to other public and private 
          agencies.
702.506 Vocational rehabilitation; training.
702.507 Vocational rehabilitation; maintenance allowance.
702.508 Vocational rehabilitation; confidentiality of information.

  Subpart F_Occupational Disease Which Does Not Immediately Result in 
                           Death or Disability

702.601 Definitions.
702.602 Notice and claims.
702.603 Determining the payrate for compensating occupational disease 
          claims which become manifest after retirement.
702.604 Determining the amount of compensation for occupational disease 
          claims which become manifest after retirement.

    Authority: 5 U.S.C. 301, 8171 et seq.; 33 U.S.C. 939; 36 D.C. Code 
501 et seq.; 42 U.S.C. 1651 et seq.; 43 U.S.C. 1333; Reorganization Plan 
No. 6 of 1950, 15 FR 3174, 3 CFR 1949-1953, Comp., p. 1004, 64 Stat. 
1263; Secretary's Order 10-2009, 74 FR 58834.

    Source: 38 FR 26861, Sept. 26, 1973, unless otherwise noted.



                      Subpart A_General Provisions

                             Administration



Sec.702.101  [Reserved]



Sec.702.102  Establishment and modification of compensation districts, establishment of suboffices and jurisdictional areas.

    (a) The Director has, pursuant to section 39(b) of the Longshore and 
Harbor Workers' Compensation Act, 33 U.S.C. 939(b), established 
compensation districts as required for improved administration or as 
otherwise determined by the Director (see 51 FR 4282, Feb. 3, 1986). The 
boundaries of the compensation districts may be modified at any time, 
and the Director shall notify all interested parties directly by mail of 
the modifications.
    (b) As administrative exigencies from time to time may require, the 
Director may, by administrative order, establish special areas outside 
the continental United States, Alaska, and Hawaii, or

[[Page 187]]

change or modify any areas so established, notwithstanding their 
inclusion within an established compensation district. Such areas shall 
be designated ``jurisdictional areas.'' The Director shall also 
designate which of his district directors shall be in charge thereof.
    (c) To further aid in the efficient administration of the OWCP, the 
Director may from time to time establish suboffices within compensation 
districts or jurisdictional areas, and shall designate a person to be in 
charge thereof.

[38 FR 26861, Sept. 26, 1973, as amended at 60 FR 51348, Oct. 2, 1995]



Sec.702.103  Effect of establishment of suboffices and jurisdictional areas.

    Whenever the Director establishes a suboffice or jurisdictional 
area, those reports, records, or other documents with respect to 
processing of claims that are required to be filed with the district 
director of the compensation district in which the injury or death 
occurred, may instead be required to be filed at the suboffice, or 
office established for the jurisdictional area.



Sec.702.104  Transfer of individual case file.

    (a) At any time after a claim is filed, the district director having 
jurisdiction thereof may, with the prior or subsequent approval of the 
Director, transfer such case to the district director in another 
compensation district for the purpose of making an investigation, 
ordering medical examinations, or taking such other action as may be 
necessary or appropriate to further develop the claim. If, after filing 
a claim, the claimant moves to another compensation district, the 
district director may, upon request by the claimant or the employer and 
with the approval of the Director, transfer the case to such other 
compensation district.
    (b) The district director making the transfer may by letter or 
memorandum to the district director to whom the case is transferred give 
advice, comments, suggestions, or directions if appropriate to the 
particular case. The transfer of cases shall be by registered or 
certified mail. All interested parties shall be advised of the transfer.

[42 FR 45301, Sept. 9, 1977]



Sec.702.105  Use of the title District Director in place of Deputy 

Commissioner.

    Wherever the statute refers to Deputy Commissioner, these 
regulations have substituted the term District Director. The 
substitution is purely an administrative one, and in no way effects the 
authority of or the powers granted and responsibilities imposed by the 
statute on that position.

[55 FR 28606, July 12, 1990]

                                 Records



Sec.702.111  Employer's records.

    Every employer shall maintain adequate records of injury sustained 
by employees while in his employ, and which shall also contain 
information of disease, other impairments or disabilities, or death 
relating to said injury. Such records shall be available for inspection 
by the OWCP or by any State authority. Records required by this section 
shall be retained by the employer for three years following the date of 
injury; this applies to records for lost-time and no-lost-time injuries.

(Approved by the Office of Management and Budget under control number 
1215-0160)

(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[38 FR 26861, Sept. 26, 1973, as amended at 47 FR 145, Jan. 5, 1982; 50 
FR 393, Jan. 3, 1985]



Sec.702.112  Records of the OWCP.

    All reports, records, or other documents filed with the OWCP with 
respect to claims are the records of the OWCP. The Director shall be the 
official custodian of those records maintained by the OWCP at its 
national office, and the district director shall be the official 
custodian of those records maintained at the headquarters office in each 
compensation district.



Sec.702.113  Inspection of records of the OWCP.

    Any party in interest may be permitted to examine the record of the 
case in which he is interested. The official custodian of the record 
sought to

[[Page 188]]

be inspected shall permit or deny inspection in accordance with the 
Department of Labor's regulations pertaining thereto (see 29 CFR part 
70). The original record in any such case shall not be removed from the 
office of the custodian for such inspection. The custodian may, in his 
discretion, deny inspection of any record or part thereof which is of a 
character specified in 5 U.S.C. 552(b) if in his opinion such inspection 
may result in damage, harm, or harassment to the beneficiary or to any 
other person. For special provisions concerning release of information 
regarding injured employees undergoing vocational rehabilitation, see 
Sec.702.508.



Sec.702.114  Copying of records of OWCP.

    Any party in interest may request copies of records he has been 
permitted to inspect. Such requests shall be addressed to the official 
custodian of the records sought to be copied. The official custodian 
shall provide the requested copies under the terms and conditions 
specified in the Department of Labor's regulations relating thereto (see 
29 CFR part 70).

                                  Forms



Sec.702.121  Forms.

    The Director may from time to time prescribe, and require the use 
of, forms for the reporting of any information required to be reported 
by the regulations in this subchapter, or by the Act or any of its 
extensions.

                             Representation



Sec.702.131  Representation of parties in interest.

    (a) Claimants, employers and insurance carriers may be represented 
in any proceeding under the Act by an attorney or other person 
previously authorized in writing by such claimant, employer or carrier 
to so act.
    (b) The Secretary shall annually publish a list of individuals who 
are disqualified from representing claimants under the Act. Individuals 
on this list are not authorized to represent claimants under the Act 
subject to the provision of section 31(b)(2)(C) of the Act, 33 U.S.C. 
931(b)(2)(C), and they shall not have their representation fee approved 
as provided in section 28(e), 33 U.S.C. 928(e).
    (c) Individuals shall be included on the list mentioned in (b) if 
the Secretary determines, after proceedings under Sec. Sec.702.432(b) 
through 702.434, that such individual:
    (1) Has been convicted (without regard to pending appeal) of any 
crime in connection with the representation of a claimant under this Act 
or any workers' compensation statute;
    (2) Has engaged in fraud in connection with the presentation of a 
claim under this or any workers' compensation statute, including, but 
not limited to, knowingly making false representations, concealing or 
attempting to conceal material facts with respect to a claim, or 
soliciting or otherwise procuring false testimony;
    (3) Has been prohibited from representing claimants before any other 
workers' compensation agency for reasons of professional misconduct 
which are similar in nature to those which would be grounds for 
disqualification under this section; or
    (4) Has accepted fees for representing claimants under the Act which 
were not approved, or which were in excess of the amount approved 
pursuant to section 28 of the Act, 33 U.S.C. 928.

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 394, Jan. 3, 1985]



Sec.702.132  Fees for services.

    (a) Any person seeking a fee for services performed on behalf of a 
claimant with respect to claims filed under the Act shall make 
application therefor to the district director, administrative law judge, 
Board, or court, as the case may be, before whom the services were 
performed (See 33 U.S.C. 928(c)). The application shall be filed and 
serviced upon the other parties within the time limits specified by such 
district director, administrative law judge, Board, or court. The 
application shall be supported by a complete statement of the extent and 
character of the necessary work done, described with particularity as to 
the professional status (e.g., attorney, paralegal, law clerk, or other 
person assisting an attorney) of each person performing such work, the

[[Page 189]]

normal billing rate for each such person, and the hours devoted by each 
such person to each category of work. Any fee approved shall be 
reasonably commensurate with the necessary work done and shall take into 
account the quality of the representation, the complexity of the legal 
issues involved, and the amount of benefits awarded, and when the fee is 
to be assessed against the claimant, shall also take into account the 
financial circumstances of the claimant. No contract pertaining to the 
amount of a fee shall be recognized.
    (b) No fee shall be approved for a representative whose name appears 
on the Secretary's list of disqualified representatives under Sec.
702.131(b).
    (c) Where fees are included in a settlement agreement submitted 
under Sec.702.241, et seq. approval of that agreement shall be deemed 
approval of attorney fees for purposes of this subsection for work 
performed before the Administrative Law Judge or district director 
approving the settlement.

[50 FR 394, Jan. 3, 1985]



Sec.702.133  Unapproved fees; solicitation of claimants; penalties.

    Under the provisions of section 28(e) of the Act, 33 U.S.C. 928(e), 
any person who receives any fees, other consideration, or any gratuity 
on account of services rendered as a representative of a claimant, 
unless such consideration or gratuity is approved under Sec.702.132, 
or who makes it a business to solicit employment for an attorney, or for 
himself in respect of any claim under the Act, shall upon conviction 
thereof, for each offense be punished by a fine of not more than $1,000 
or by imprisonment for not more than 1 year, or by both fine and 
imprisonment.



Sec.702.134  Payment of claimant's attorney's fees in disputed claims.

    (a) If the employer or carrier declines to pay any compensation on 
or before the 30th day after receiving written notice from the district 
director of a claim for compensation having been filed, on the ground 
that there is no liability for compensation within the provisions of 
this Act, and the person seeking benefits shall thereafter have utilized 
the services of an attorney at law in the successful prosecution of his 
claim, there shall be awarded, in addition to the award of compensation, 
in a compensation order, a reasonable attorney's fee against the 
employer or carrier in an amount approved by the person, administrative 
body or court before whom the service was performed, which shall be paid 
directly by the employer or carrier to the attorney for the claimant in 
a lump sum after the compensation order becomes final (Act, section 
28(a)).
    (b) If the employer or carrier pays or tenders payment of 
compensation without an award pursuant to Sec.702.231 and section 14 
(a) and (b) of this Act, and thereafter a controversy develops over the 
amount of additional compensation, if any, to which the employee may be 
entitled, the district director, administrative law judge, or Board 
shall set the matter for an informal conference and following such 
conference the district director, administrative law judge, or Board 
shall recommend in writing a disposition of the controversy. If the 
employer or carrier refuses to accept such written recommendation, 
within 14 days after its receipt by them, they shall pay or tender to 
the employee in writing the additional compensation, if any, to which 
they believe the employee is entitled. If the employee refuses to accept 
such payment or tender of compensation, and thereafter utilizes the 
services of an attorney at law, and if the compensation thereafter 
awarded is greater than the amount paid or tendered by the employer or 
carrier, a reasonable attorney's fee based solely upon the difference 
between the amount awarded and the amount tendered or paid shall be 
awarded in addition to the amount of compensation. The foregoing 
sentence shall not apply if the controversy relates to degree or length 
of disability, and if the employer or carrier offers to submit the case 
for evaluation by physicians employed or selected by the district 
director, as authorized by section 7(e) of the Act and Sec.702.408, 
and offers to tender an amount of compensation based upon the degree or 
length of disability found by the independent medical report at such 
time as an evaluation of disability can be made. If the claimant is 
successful in

[[Page 190]]

review proceedings before the Board or court in any such case an award 
may be made in favor of the claimant and against the employer or carrier 
for a reasonable attorney's fee for claimant's counsel in accord with 
the above provisions. In all other cases any claim for legal services 
shall not be assessed against the employer or carrier (see Act, section 
28(b)).



Sec.702.135  Payment of claimant's witness fees and mileage in disputed 

claims.

    In cases where an attorney's fee is awarded against an employer or 
carrier there may be further assessed against such employer or carrier 
as costs, fees and mileage for necessary witnesses attending the hearing 
at the instance of claimant. Both the necessity for the witness and the 
reasonableness of the fees of expert witnesses must be approved by the 
hearing officer, the Board, or the court, as the case may be. The 
amounts awarded against an employer or carrier as attorney's fees, 
costs, fees and mileage for witnesses shall not in any respect affect or 
diminish the compensation payable under this Act (see Act, section 28 
(d)).

                Information and Assistance for Claimants



Sec.702.136  Requests for information and assistance.

    (a) General assistance. The Director shall, upon request, provide 
persons covered by the Act with information and assistance relating to 
the Act's coverage and compensation and the procedures for obtaining 
such compensation including assistance in processing a claim.
    (b) Legal assistance to claimants. The Secretary may, upon request, 
provide a claimant with legal assistance in processing a claim under the 
Act. Such assistance may be made available to a claimant in the 
discretion of the Solicitor of Labor or his designee at any time prior 
to or during which the claim is being processed and shall be furnished 
without charge to the claimant. Legal representation of the claimant in 
adjudicatory proceedings may be furnished in cases in which the 
Secretary's interest in the case is not adverse to that of the claimant.
    (c) Other assistance. The district directors and their staff, as 
designees of the Director, shall promptly and fully comply with the 
request of a claimant receiving compensation for information about, and 
assistance in obtaining, medical, manpower, and vocational 
rehabilitation services (see also subparts D and E of this part).

                Commutation of Payments and Special Fund



Sec.702.142  Commutation of payments; aliens not residents or about to become 

nonresidents.

    (a) Pursuant to section 9(g) of the Act, 33 U.S.C. 909(g), 
compensation paid to aliens not residents, or about to become 
nonresidents, of the United States or Canada shall be in the same amount 
as provided for residents except that dependents in any foreign country 
shall be limited to surviving spouse and child or children, or if there 
be no surviving spouse or child or children, to surviving father or 
mother whom the employee has supported, either wholly or in part, for 
the period of 1 year prior to the date of injury, and except that the 
Director, OWCP, may, at his option, or upon the application of the 
insurance carrier he shall, commute all future installments of 
compensation to be paid to such aliens by paying or causing to be paid 
to them one-half of the commuted amount of such future installments of 
compensation as determined by the Director.
    (b) Applications for commutation under this section shall be made in 
writing to the district director having jurisdiction, and forwarded by 
the district director to the Director, for final action.
    (c) Applications for commutations shall be made effective, if 
approved by the Director, on the date received by the district director, 
or on a later date if shown to be appropriate on the application.
    (d) Commutations shall not be made with respect to a person 
journeying abroad for a visit who has previously declared an intention 
to return and has stated a time for returning, nor shall any commutation 
be made except upon

[[Page 191]]

the basis of a compensation order fixing the right of the beneficiary to 
compensation.

[50 FR 394, Jan. 3, 1985]



Sec.702.143  Establishment of special fund.

    Congress, by section 44 of the Act, 33 U.S.C. 944, established in 
the U.S. Treasury a special fund, to be administered by the Secretary. 
The Treasurer of the United States is the custodian of such fund, and 
all monies and securities in such fund shall be held in trust by the 
Treasurer and shall not be money or property of the United States. The 
Treasurer shall make disbursements from such funds only upon the order 
of the Director, OWCP, as delegatee of the Secretary. The Act requires 
that the Treasurer give bond, in an amount to be fixed and with 
securities to be approved by the Secretary of the Treasury and the 
Comptroller General of the United States, conditioned upon the faithful 
performance of his duty as custodian of such fund.



Sec.702.144  Purpose of the special fund.

    This special fund was established to give effect to a congressional 
policy determination that, under certain circumstances, the employer of 
a particular employee should not be required to bear the entire burden 
of paying for the compensation benefits due that employee under the Act. 
Instead, a substantial portion of such burden should be borne by the 
industry generally. Section 702.145 describes this special circumstance 
under which the particular employer is relieved of some of his burden. 
Section 702.146 describes the manner and circumstances of the input into 
the fund.



Sec.702.145  Use of the special fund.

    (a) Under section 10 of the Act. This section provides for initial 
and subsequent annual adjustments in compensation and continuing 
payments to beneficiaries in cases of permanent total disability or 
death which commenced or occurred prior to enactment of the 1972 
Amendments to this Act (Pub. L. 92-576, approved Oct. 27, 1972). At the 
discretion of the Director, such payments may be paid directly by him to 
eligible beneficiaries as the obligation accrues, one-half from the 
special fund and one-half from appropriations, or he may require 
insurance carriers or self-insured employers already making payments to 
such beneficiaries to pay such additional compensation as the amended 
Act requires. In the latter case such carriers and self-insurers shall 
be reimbursed by the Director for such additional amounts paid, in the 
proportion of one-half the amount from the special fund and one-half the 
amount from appropriations. To obtain reimbursement, the carriers and 
self-insurers shall submit claims for payments made by them during 
previous periods at intervals of not less than 6 months. A form has been 
prescribed for such purpose and shall be used. No administrative claims 
service expense incurred by the carrier or self-insurer shall be 
included in the claim and no such expense shall be allowed. The amounts 
reimbursed to such carrier or self-insurer shall be limited to amounts 
actually due and previously paid to beneficiaries.
    (b) Under section 8(f) of the Act (Second Injuries). In any case in 
which an employee having an existing permanent partial disability 
suffers injury, the employer shall provide compensation for such 
disability as is found to be attributable to that injury based upon the 
average weekly wages of the employee at the time of injury. If, 
following an injury falling within the provisions of section 8(c)(1)-
(20), the employee with the pre-existing permanent partial disability 
becomes permanently and totally disabled after the second injury, but 
such total disability is found not to be due solely to his second 
injury, the employer (or carrier) shall be liable for compensation as 
provided by the provisions of section 8(c)(1)-(20) of the Act, 33 U.S.C. 
908(c)(1)-(20) or for 104 weeks, whichever is greater. However, if the 
injury is a loss of hearing covered by section 8(c)(13), 33 U.S.C. 
908(c)(13), the liability shall be the lesser of these periods. In all 
other cases of a second injury causing permanent total disability (or 
death), wherein it is found that such disability (or death) is not due 
solely to the second injury, and wherein the employee had a pre-existing 
permanent partial disability, the employer (or carrier) shall first pay

[[Page 192]]

compensation under section 8(b) or (e) of the Act, 33 U.S.C. 908(b) or 
(e), if any is payable thereunder, and shall then pay 104 weeks 
compensation for such total disability or death, and none otherwise. If 
the second injury results in permanent partial disability, and if such 
disability is compensable under section 8(c)(1)-(20) of the Act, 33 
U.S.C. 908(c)(1)-(20), but the disability so compensable did not result 
solely from such second injury, and the disability so compensable is 
materially and substantially greater than that which would have resulted 
from the second injury alone, then the employer (or carrier) shall only 
be liable for the amount of compensation provided for in section 
8(c)(1)-(20) that is attributable to such second injury, or for 104 
weeks, whichever is greater. However, if the injury is a loss of hearing 
covered by section 8(c)(13), 33 U.S.C. 908(c)(13), the liability shall 
be the lesser of these periods. In all other cases wherein the employee 
is permanently and partially disabled following a second injury, and 
wherein such disability is not attributable solely to that second 
injury, and wherein such disability is materially and substantially 
greater than that which would have resulted from the second injury 
alone, and wherein such disability following the second injury is not 
compensable under section 8(c)(1)-(20) of the Act, then the employer (or 
carrier) shall be liable for such compensation as may be appropriate 
under section 8(b) or (e) of the Act, 33 U.S.C. 908(b) or (e), if any, 
to be followed by a payment of compensation for 104 weeks, and none 
other. The term ``compensation'' herein means money benefits only, and 
does not include medical benefits. The procedure for determining the 
extent of the employer's (or carrier's) liability under this paragraph 
shall be as provided for in the adjudication of claims in subpart C of 
this part 702. Thereafter, upon cessation of payments which the employer 
is required to make under this paragraph, if any additional compensation 
is payable in the case, the district director shall forward such case to 
the Director for consideration of an award to the person or persons 
entitled thereto out of the special fund. Any such award from the 
special fund shall be by order of the Director or Acting Director.
    (c) Under sections 8(g) and 39(c)(2) of the Act. These sections, 33 
U.S.C. 908(g) and 939(c)(2), respectively, provide for vocational 
rehabilitation of disabled employees, and authorize, under appropriate 
circumstances, a maintenance allowance for the employee (not to exceed 
$25 a week) in additional to other compensation benefits otherwise 
payable for his injury-related disability. Awards under these sections 
are made from the special fund upon order of the Director or his 
designee. The district directors may be required to make investigations 
with respect to any case and forward to the Director their 
recommendations as to the propriety and need for such maintenance.
    (d) Under section 39(c)(2) of the Act. In addition to the 
maintenance allowance for the employee discussed in paragraph (c) of 
this section, the Director is further authorized to use the fund in such 
amounts as may be necessary to procure the vocational training services.
    (e) Under section 7(e) of the Act. This provision, 33 U.S.C. 907(e), 
authorizes payment by the Director from the special fund for special 
medical examinations, i.e., those obtained from impartial specialists to 
resolve disputes, when such special examinations are deemed necessary 
under that statutory provision. The Director has the discretionary 
power, however, to charge the cost of such examination to the insurance 
carrier or self-insured employer.
    (f) Under section 18(b) of the Act. This section, 33 U.S.C. 918(b), 
provides a source for payment of compensation benefits in cases where 
the employer is insolvent, or other circumstances preclude the payment 
of benefits due in any case. In such situations, the district director 
shall forward the case to the Director for consideration of an award 
from the special fund, together with evidence with respect to the 
employer's insolvency or other reasons for nonpayment of benefits due. 
Benefits, as herein used, means medical care or supplies within the 
meaning of section 7 of the Act, 33 U.S.C. 907, and subpart D of this 
part 702, as well as monetary benefits. Upon receipt of the case, the 
Director shall promptly determine

[[Page 193]]

whether an award from the special fund is appropriate and advisable in 
the case, having due regard for all other current commitments from the 
special fund. If such an award is made, the employer shall be liable for 
the repayment into the fund of the amounts paid therefrom, as provided 
in 33 U.S.C. 918(b).

(The information collection requirements contained in paragraph (a) were 
approved by the Office of Management and Budget under control number 
1215-0065. The information collection requirements contained in 
paragraph (b) were approved by the Office of Management and Budget under 
control number 1215-0073)

(Pub. L. No. 96-511)

[38 FR 26861, Sept. 26, 1973, as amended at 49 FR 18294, Apr. 30, 1984; 
51 FR 4282, Feb. 3, 1986]



Sec.702.146  Source of the special fund.

    (a) All amounts collected as fines and penalties under the several 
provisions of the Act shall be paid into the special fund (33 U.S.C. 
44(c)(3)).
    (b) Whenever an employee dies under circumstances creating a 
liability on an employer to pay death benefits to the employee's 
beneficiaries, and whenever there are no such beneficiaries entitled to 
such payments, the employer shall pay $5,000 into the special fund (Act, 
section 44(c)(1)). In such cases, the compensation order entered in the 
case shall specifically find that there is such liability and that there 
are no beneficiaries entitled to death benefits, and shall order payment 
by the employer into the fund. Compensation orders shall be made and 
filed in accordance with the regulations in subpart C of this part 702, 
except that for this purpose the district director settling the case 
under Sec.702.315 shall formalize the memorandum of conference in a 
compensation order, and shall file such order as provided for in Sec.
702.349.
    (c) The Director annually shall assess an amount against insurance 
carriers and self-insured employers authorized under the Act and part 
703 of this subchapter to replenish the fund. That total amount to be 
charged all carriers and self-insurers to be assessed shall be based 
upon an estimate of the probable expenses of the fund during the 
calendar year. The assessment against each carrier and self-insurer 
shall be based upon (1) the ratio of the amount each paid during the 
prior calendar year for compensation in relation to the amount all such 
carriers of self-insurers paid during that period for compensation, and 
(2) the ratio of the amount of payments made by the special fund for all 
cases being paid under section 8(f) of the Act, 33 U.S.C. 908(f), during 
the preceding calendar year which are attributable to the carrier or 
self-insurer in relation to the total of such payments during such year 
attributable to all carriers and self-insurers. The resulting sum of the 
percentages from paragraphs (c) (1) and (2) of this section will be 
divided by two, and the resulting percentage multiplied by the probable 
expenses of the fund. The Director may, in his or her discretion, 
condition continuance or renewal of authorization under part 703 upon 
prompt payment of the assessment. However, no action suspending or 
revoking such authorization shall be taken without affording such 
carrier or self-insurer a hearing before the Director or his/her 
designee.

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 395, Jan. 3, 1985; 51 
FR 4282, Feb. 3, 1986]



Sec.702.147  Enforcement of special fund provisions.

    (a) As provided in section 44(d)(1) of the Act, 33 U.S.C. 944(d)(1), 
for the purpose of making rules, regulations, and determinations under 
the special fund provisions in section 44 and for providing enforcement 
thereof, the Director may investigate and gather appropriate data from 
each carrier and self-insured employer, and may enter and inspect such 
places and records (and make such transcriptions of records), question 
such employees, and investigate such facts, conditions, practices, or 
other matters as he may deem necessary or appropriate. The Director may 
require the employer to have audits performed of claims activity 
relating to this Act. The Director may also require detailed reports of 
payments made under the Act, and of estimated future liabilities under 
the Act, from any or all carriers of self-insurers. The Director may 
require that such reports be certified and verified in whatever manner 
is considered appropriate.

[[Page 194]]

    (b) Pursuant to section 44(d)(3) of the Act, 33 U.S.C. 944(d)(3), 
for the purpose of any hearing or investigation related to 
determinations or the enforcement of the provisions of section 44 with 
respect to the special fund, the provisions of 15 U.S.C. 49 and 50 as 
amended (the Federal Trade Commission Act provisions relating to 
attendance of witnesses and the production of books, papers, and 
documents) are made applicable to the jurisdiction, powers, and duties 
of the Director, OWCP, as the Secretary's delegatee.
    (c) Civil penalties and unpaid assessments shall be collected by 
civil suits brought by and in the name of the Secretary.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 395, Jan. 3, 1985]



Sec.702.148  Insurance carriers' and self-insured employers' responsibilities.

    (a) Each carrier and self-insured employer shall make, keep, and 
preserve such records, and make such reports and provide such additional 
information as the Director prescribes or orders, which he considers 
necessary or appropriate to effectively carry out his responsibilities.
    (b) Consistent with their greater direct liability stemming from the 
amended assessment formula, employers and insurance carriers are given 
the authority to monitor their claims in the special fund as outlined in 
paragraph (c) of this section. For purposes of monitoring these claims, 
employers and insurance carriers remain parties in interest to the claim 
and are allowed access to all records relating to the claim. Similarly, 
employers and insurance carriers can initiate proceeding to modify an 
award of compensation after the special fund has assumed the liability 
to pay benefits. It is intended that employers and insurance carriers 
have neither a greater nor a lesser responsibility in this new role that 
they not have with regard to cases that remain their sole liability. 
(See Sec.702.373(d).)
    (c) An employer or insurance carrier may conduct any reasonable 
investigation regarding cases placed into the special fund by the 
employer or insurance carrier. Such investigation may include, but shall 
not be limited to, a semi-annual request for earnings information 
pursuant to section 8(j) of the Act, 33 U.S.C. 908(j) (See Sec.
702.285) periodic medical examinations, vocational rehabilitation 
evaluations, and requests for any additional information needed to 
effectively monitor such a case.

(Approved by the Office of Management and Budget under control number 
1215-0118)

(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[38 FR 26861, Sept. 26, 1973, as amended at 47 FR 145, Jan. 5, 1982; 50 
FR 395, Jan. 3, 1985]

                          Liens on Compensation



Sec.702.161  Liens against assets of insurance carriers and employers.

    Where payments have been made from the special fund pursuant to 
section 18(b) of the Act, 33 U.S.C. 918(b) and Sec.704.145(f) the 
Secretary of Labor shall, for the benefit of the fund, be subrogated to 
all the rights of the person receiving such payments. The Secretary may 
institute proceedings under either section 18 or 21(d) of the Act, 33 
U.S.C. 918 or 921(d), or both, to recover the amount expended by the 
fund or so much as in the judgement of the Secretary is possible, or the 
Secretary may settle or compromise any such claim.

[50 FR 395, Jan. 3, 1985]



Sec.702.162  Liens on compensation authorized under special circumstances.

    (a) Pursuant to section 17 of the Act, 33 U.S.C. 917, when a trust 
fund which complies with section 302(c) of the Labor-Management 
Relations Act of 1947, 29 U.S.C. 186(c) [LMRA], established pursuant to 
a collective bargaining agreement in effect between an employer and an 
employee entitled to compensation under this Act, has paid disability 
benefits to an employee which the employee is legally obligated to repay 
by reason of his entitlement to compensation under this Act, a lien 
shall be authorized on such compensation in favor of the trust fund for 
the amount of such payments.
    (b)(1) An application for such a lien shall be filed on behalf of 
the trust

[[Page 195]]

fund with the district director for the compensation district where the 
claim for compensation has been filed, 20 CFR 702.101. Such application 
shall include a certified statement by an authorized official of the 
trust fund that:
    (i) The trust fund is entitled to a lien in its favor by reason of 
its payment of disability payments to a claimant-employee (including his 
name therein);
    (ii) The trust fund was created pursuant to a collective bargaining 
agreement covering the claimant-employee;
    (iii) The trust fund complies with section 302(c) of the Labor-
Management Relations Act of 1947, 29 U.S.C. 186(c);
    (iv) The trust agreement contains a subrogation provision entitling 
the fund to reimbursement for disability benefits paid to the claimant-
employee who is entitled to compensation under the Longshoremen's Act;
    (2) The statement shall also state the amount paid to the named 
claimant-employee and whether such disability benefit payments are 
continuing to be paid.
    (3) If the claimant has signed a statement acknowledging receipt of 
disability benefits from the trust fund and/or a statement recognizing 
the trust fund's entitlement to a lien against compensation payments 
which may be received under the Longshoremen's and Harbor Worker's 
Compensation Act as a result of his present claim and for which the fund 
is providing disability payments, such statement(s) shall also be 
included with or attached to the application.
    (c) Upon receipt of this application, the district director shall, 
within a reasonable time, notify the claimant, the employer and/or its 
compensation insurance carrier that the request for a lien has been 
filed and each shall be provided with a copy of the application. If the 
claimant disputes the right of the trust fund to the lien or the amount 
stated, if any, he shall, within 30 days after receipt of the 
application or such other longer period as the district director may 
set, notify the district director and he shall be given an opportunity 
to challenge the right of the trust fund to, or the amount of, the 
asserted lien; notice to either the employer or its compensation 
insurance carrier shall constitute notice to both of them.
    (d) If the claim for compensation benefits is resolved without a 
formal hearing and if there is no dispute over the amount of the lien or 
the right of the trust fund to the lien, the district director may order 
and impose the lien and he shall notify all parties of the amount of the 
lien and manner in which it is to be paid.
    (e) If the claimant's claim for compensation cannot be resolved 
informally, the district director shall transfer the case to the Office 
of the Chief Administrative Law Judge for a formal hearing, pursuant to 
section 19(d) of the Act, 33 U.S.C. 919(d), and 20 CFR 702.317. The 
district director shall also submit therewith the application for the 
lien and all documents relating thereto.
    (f) If the administrative law judge issues a compensation order in 
favor of the claimant, such order shall establish a lien in favor of the 
trust fund if it is determined that the trust fund has satisfied all of 
the requirements of the Act and regulations.
    (g) If the claim for compensation is not in dispute, but there is a 
dispute as to the right of the trust fund to a lien, or the amount of 
the lien, the district director shall transfer the matter together with 
all documents relating thereto to the Office of the Chief Administrative 
Law Judge for a formal hearing pursuant to section 19(d) of the Act, 33 
U.S.C. 919(d), and 20 CFR 702.317.
    (h) In the event that either the district director or the 
administrative law judge is not satisfied that the trust fund qualifies 
for a lien under section 17, the district director or administrative law 
judge may require further evidence including but not limited to the 
production of the collective bargaining agreement, trust agreement or 
portions thereof.
    (i) Before any such lien is approved, if the trust fund has provided 
continued disability payments after the application for a lien has been 
filed, the trust fund shall submit a further certified statement showing 
the total amount paid to the claimant as disability payments. The 
claimant shall likewise be given an opportunity to

[[Page 196]]

contest the amount alleged in this subsequent statement.
    (j) In approving a lien on compensation, the district director or 
administrative law judge shall not order an initial payment to the trust 
fund in excess of the amount of the past due compensation. The remaining 
amount to which the trust fund is entitled shall thereafter be deducted 
from the affected employee's subsequent compensation payments and paid 
to the trust fund, but any such payment to the trust fund shall not 
exceed 10 percent of the claimant-employee's bi-weekly compensation 
payments.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[42 FR 45301, Sept. 9, 1977, as amended at 50 FR 395, Jan. 3, 1985; 51 
FR 4282, Feb. 3, 1986]

                       Certification of Exemption



Sec.702.171  Certification of exemption, general.

    An employer may apply to the Director or his/her designee to certify 
a particular facility as one engaged in the building, repairing or 
dismantling of exclusively small vessels, as defined. Once certified, 
injuries sustained at that facility would not be covered under the Act 
except for injuries which occur over the navigable waters of the United 
States including any adjoining pier, wharf, dock, facility over land for 
launching vessels or for hauling, lifting or drydocking vessels. A 
facility otherwise covered under the Act remains covered until 
certification of exemption is issued; a certification will be granted 
only upon submission of a complete application (described in Sec.
702.174), and only for as long as a facility meets the requirements 
detailed in section 3(d) of the Act, 33 U.S.C. 903(d). This exemption 
from coverage is not intended to be used by employers whose facilities 
from time to time may temporarily meet the criteria for qualification 
but only for facilities which work on exclusively small vessels, as 
defined.

[50 FR 396, Jan. 3, 1985]



Sec.702.172  Certification; definitions.

    For purposes of Sec. Sec.702.171 through 702.175 dealing with 
certification of small vessel facilities, the following definitions are 
applicable.
    (a)(1) ``Small vessel'' means only those vessels described in 
section 3(d)(3) of the Act, 33 U.S.C. 903(d)(3), that is:
    (i) A commercial barge which is under 900 lightship displacement 
tons (long); or
    (ii) A commercial tugboat, towboat, crewboat, supply boat, fishing 
vessel or other work vessel which is under 1,600 tons gross.
    (2) For these purposes: (i) One gross ton equals 100 cubic feet, as 
measured by the current formula contained in the Act of May 6, 1894 as 
amended through 1974 (46 U.S.C. 77); (ii) one long ton equals 2,240 lbs; 
and (iii) ``Commercial'' as it applies to ``vessel'' means any vessel 
engaged in commerce but does not include military vessels or Coast Guard 
vessels.
    (b) ``Federal Maritime Subsidy'' means the construction differential 
subsidy (CDS) or operating differential subsidy under the Merchant 
Marine Act of 1936 (46 U.S.C. 1101 et seq.).
    (c) facility means an operation of an employer at a particular 
contiguous geographic location.

[51 FR 4283, Feb. 3, 1986]



Sec.702.173  Exemptions; requirements, limitations.

    (a) Injuries at a facility otherwise covered by the Act are exempted 
only upon certification that the facility is: (1) Engaged in the 
building, repairing or dismantling of exclusively small commercial 
vessels; and (2) does not receive a Federal maritime subsidy.
    (b) The exemption does not apply to: (1) Injuries at any facility 
which occur over the navigable waters of the United States or upon any 
adjoining pier, wharf, dock, facility over land for launching vessels or 
for hauling, lifting or drydocking vessels; or (2) where the employee at 
such facility is not subject to a State workers' compensation law.

[50 FR 396, Jan. 3, 1985]



Sec.702.174  Exemptions; necessary information.

    (a) Application. Before any facility is exempt from coverage under 
the Act, the facility must apply for and receive

[[Page 197]]

a certificate of exemption from the Director or his/her designee. The 
application must be made by the owner of the facility; where the owner 
is a partnership it shall be made by a partner and where a corporation 
by an officer of the corporation or the manager in charge of the 
facility for which an exemption is sought. The information submitted 
shall include the following:
    (1) Name, location, physical description and a site plan or aerial 
photograph of the facility for which an exemption is sought.
    (2) Description of the nature of the business.
    (3) An affidavit (signed by a partner if the facility is owned by a 
partnership or an officer if owned by a corporation) vertifying and/or 
acknowledging that:
    (i) the facility is, as of the date of the application, engaged in 
the business of building, repairing or dismantling exclusively small 
commercial vessels and that it does not then nor foreseeably will it 
engage in the building, repairing or dismantling of other than small 
vessels.
    (ii) The facility does not receive any Federal maritime subsidy.
    (iii) The signator has the duty to immediately inform the district 
director of any change in these or other conditions likely to result in 
a termination of an exemption.
    (iv) the employer has secured appropriate compensation liability 
under a State workers' compensation law.
    (v) Any false, relevant statements relating to the application or 
the failure to notify the district director of any changes in 
circumstances likely to result in termination of the exemption will be 
grounds for revocation of the exemption certificate and will subject the 
employer to all provisions of the Act, including all duties, 
responsibilities and penalties, retroactive to the date of application 
or date of change in circumstances, as appropriate.
    (b) Action by the Director. The Director or his/her designee shall 
review the application within thirty (30) days of its receipt.
    (1) Where the application is complete and shows that all 
requirements under Sec.702.173 are met, the Director shall promptly 
notify the employer by certified mail, return receipt requested, that 
certification has been approved and will be effective on the date 
specified. The employer is required to post notice of the exemption at a 
conspicuous location.
    (2) Where the application is incomplete or does not substantiate 
that all requirements of section 3(d) of the Act, 33 U.S.C. 903(d), have 
been met, or evidence shows the facility is not eligible for exemption, 
the Director shall issue a letter which details the reasons for the 
deficiency or the rejection. The employer/applicant may reapply for 
certification, correcting deficiencies and/or responding to the reasons 
for the Director's denial. The Director or his/her designee shall issue 
a new decision within a reasonable time of reapplication following 
denial. Such action will be the final administrative review and is not 
appealable to the Administrative Law Judge or the Benefits Review Board.
    (c) The Director or another designated individual at any time has 
the right to enter on and inspect any facility seeking exemption for 
purposes of verifying information provided on the application form.
    (d) Action by the employer. Immediately upon receipt of the 
certificate of exemption from coverage under the Act the employer shall 
post:
    (1) A general notice in a conspicuous place that the Act does not 
cover injuries sustained at the facility in question, the basis of the 
exemption, the effective date of the exemption and grounds for 
termination of the exemption.
    (2) A notice, where applicable, at the entrances to all areas to 
which the exemption does not apply.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 396, Jan. 3, 1985, as amended at 51 FR 4283, Feb. 3, 1986]



Sec.702.175  Effect of work on excluded vessels; reinstatement of 

certification.

    (a) When a vessel other than a small commercial vessel, as defined 
in Sec.702.172, enters a facility which has been certified as exempt 
from coverage, the exemption shall automatically terminate as of the 
date such a

[[Page 198]]

vessel enters the facility. The exemption shall also terminate on the 
date a contract for a Federal maritime subsidy is entered into, and, in 
the situation where the facility undertakes to build a vessel other than 
a small vessel, when the construction first takes on the characteristics 
of a vessel, i.e., when the keel is laid. All duties, obligations and 
requirements imposed by the Act, including the duty to secure 
compensation liability as required by sections 4 and 32 of the Act, 33 
U.S.C. 904 and 932, and to keep records and forward reports, are 
effective immediately. The employer shall notify the Director or his/her 
designee immediately where this occurs.
    (b) Where an exemption certification is terminated because of 
circumstances described in (a), the employer may apply for reinstatement 
of the exemption once the event resulting in termination of the 
exemption ends. The reapplication shall consist of a reaffirmation of 
the nature of the business, an explanation of the circumstances leading 
to the termination of exemption, and an affidavit by the appropriate 
person affirming that the circumstances prompting the termination no 
longer exists nor will they reoccur in the forseeable future and that 
the facility is engaged in building, repairing or dismantling 
exclusively small vessels. The Director or the Director's designee shall 
respond to the complete reapplication within ten working days of 
receipt.

[50 FR 397, Jan. 3, 1985, as amended at 51 FR 4283, Feb. 3, 1986]



                       Subpart B_Claims Procedures

                           Employer's Reports



Sec.702.201  Reports from employers of employee's injury or death.

    (a) Within 10 days from the date of an employee's injury or death, 
or 10 days from the date an employer has knowledge of an employee's 
injury or death, including any disease or death proximately caused by 
the employment, the employer shall furnish a report thereof to the 
district director for the compensation district in which the injury or 
death occurred, and shall thereafter furnish such additional or 
supplemental reports as the district director may request.
    (b) No report shall be filed unless the injury causes the employee 
to lose one or more shifts from work. However, the employer shall keep a 
record containing the information specified in Sec.702.202. Compliance 
with the current OSHA injury record keeping requirements at 29 CFR part 
1904 will satisfy the record keeping requirements of this section for no 
lost time injuries.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 397, Jan. 3, 1985; 51 
FR 4283, Feb. 3, 1986]



Sec.702.202  Employer's report; form and contents.

    The employer's report of an employee's injury or death shall be in 
writing and on a form prescribed by the Director for this purpose, and 
shall contain:
    (a) The name, address and business of the employer;
    (b) The name, address, occupation and Social Security Number (SSN) 
of the employee;
    (c) The cause, nature, and other relevant circumstances of the 
injury or death;
    (d) The year, month, day, and hour when, and the particular locality 
where, the injury or death occurred;
    (e) Such other information as the Director may require.

(Approved by the Office of Management and Budget under control numbers 
1215-0031 and 1215-0063)

[58 FR 68032, Dec. 23, 1993]



Sec.702.203  Employer's report; how given.

    The employer's report, an original and one copy, may be furnished by 
delivering it to the appropriate office of the district director, or by 
mailing it to said office.



Sec.702.204  Employer's report; penalty for failure to furnish and or 

falsifying.

    Any employer, insurance carrier, or self-insured employer who 
knowingly and willfully fails or refuses to send any report required by 
Sec.702.201, or who knowingly or willfully makes a false statement or 
misrepresentation in any

[[Page 199]]

report, shall be subject to a civil penalty not to exceed $10,000.00 for 
each such failure, refusal, false statement, or misrepresentation. 
Provided, however, that for any violations occurring on or after 
November 17, 1997 the maximum civil penalty may not exceed $11,000.00. 
The district director has the authority and responsibility for assessing 
a civil penalty under this section.

[62 FR 53956, Oct. 17, 1997]



Sec.702.205  Employer's report; effect of failure to report upon time 

limitations.

    Where the employer, or agent in charge of the business, or carrier 
has been given notice or has knowledge of an employee's injury or death, 
and fails, neglects, or refuses to file a report thereof as required by 
Sec.702.201, the time limitations provisions with respect to the 
filing of claims for compensation for disability or death (33 U.S.C. 
913(a), and see Sec.702.221) shall not begin to run until such report 
shall have been furnished as required herein.

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 397, Jan. 3, 1985]

                                 Notice



Sec.702.211  Notice of employee's injury or death; designation of responsible 

official.

    (a) In order to claim compensation under the Act, an employee or 
claimant must first give notice of the fact of an injury or death to the 
employer and also may give notice to the district director for the 
compensation district in which the injury or death occurred. Notice to 
the employer must be given to that individual whom the employer has 
designated to receive such notices. If no individual has been so 
designated notice may be given to: (1) The first line supervisor 
(including foreman, hatchboss or timekeeper), local plant manager or 
personnel office official; (2) to any partner if the employer is a 
partnership; or (3) if the employer is a corporation, to any authorized 
agent, to an officer or to the person in charge of the business at the 
place where the injury occurred. In the case of a retired employee, the 
employee/claimant may submit the notice to any of the above persons, 
whether or not the employer has designated an official to receive such 
notice.
    (b) In order to facilitate the filing of notices, each employer 
shall designate at least one individual responsible for receiving 
notices of injury or death; this requirement applies to all employers. 
The designation shall be by position and the employer shall provide the 
name and/or position, exact location and telephone number of the 
individual to all employees by the appropriate method described below.
    (1) Type of individual. Designees must be a first line supervisor 
(including a foreman, hatchboss or timekeeper), local plant manager, 
personnel office official, company nurse or other individual 
traditionally entrusted with this duty, who is located full-time on the 
premises of the covered facility. The employer must designate at least 
one individual at each place of employment or one individual for each 
work crew where there is no fixed place of employment (in that case, the 
designation should always be the same position for all work crews).
    (2) How designated. The name and/or title, the location and 
telephone number of the individual who is selected by the employer to 
receive all notices shall be given to the district director for the 
compensation district in which the facility is located; posting on the 
worksite in a conspicuous place shall fulfill this requirement. A 
redesignation shall be effected by a change in posting.
    (3) Publication. Every employer shall post the name and/or position, 
the exact location and telephone number of the designated official. The 
posting shall be part of the general posting requirement, done on a form 
prescribed by the Director, and placed in a conspicuous location. 
Posting must be done at each worksite.
    (4) Effect of failure to designate. Where an employer fails to 
properly designate and to properly publish the name and/or position of 
the individual authorized to receive notices of injury or death, such 
failure shall constitute satisfactory reasons for excusing the employee/

[[Page 200]]

claimant's failure to give notice as authorized by section 12(d)(3)(ii) 
of the Act, 33 U.S.C. 912(d)(3)(ii).

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 397, Jan. 3, 1985, as amended at 51 FR 4283, Feb. 3, 1986]



Sec.702.212  Notice; when given; when given for certain occupational diseases.

    (a) For other than occupational diseases described in (b), the 
employee must give notice within thirty (30) days of the date of the 
injury or death. For this purpose the date of injury or death is:
    (1) The day on which a traumatic injury occurs;
    (2) The date on which the employee or claimant is or by the exercise 
of reasonable diligence or by reason of medical advice, should have been 
aware of a relationship between the injury or death and the employment; 
or
    (3) In the case of claims for loss of hearing, the date the employee 
receives an audiogram, with the accompanying report which indicates the 
employee has suffered a loss of hearing that is related to his or her 
employment. (See Sec.702.441).
    (b) In the case of an occupational disease which does not 
immediately result in disability or death, notice must be given within 
one year after the employee or claimant becomes aware, or in the 
exercise of reasonable diligence or by reason of medical advice, should 
have been aware, of the relationship between the employment, the disease 
and the death or disability. For purposes of these occupational 
diseases, therefore, the notice period does not begin to run until the 
employee is disabled, or in the case of a retired employee, until a 
permanent impairment exists.
    (c) For purposes of workers whose coverage under this Act is 
dependent on denial of coverage under a State compensation program, as 
described in Sec.701.401, the time limitations set forth above do not 
begin to run until a final decision denying State coverage is issued 
under the State compensation act.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 397, Jan. 3, 1985, as amended at 51 FR 4283, Feb. 3, 1986]



Sec.702.213  Notice; by whom given.

    Notice shall be given by the injured employee or someone on his 
behalf, or in the case of death, by the deceased employee's beneficiary 
or someone on his behalf.

[38 FR 26861, Sept. 26, 1973. Redesignated at 50 FR 397, Jan. 3, 1985]



Sec.702.214  Notice; form and content.

    Notice shall be in writing on a form prescribed by the Director for 
this purpose; such form shall be made available to the employee or 
beneficiary by the employer. The notice shall be signed by the person 
authorized to give notice, and shall contain the name, address and 
Social Security Number (SSN) of the employee and, in death cases, also 
the SSN of the person seeking survivor benefits, and a statement of the 
time, place, nature and cause of the injury or death.

[58 FR 68032, Dec. 23, 1993]



Sec.702.215  Notice; how given.

    Notice shall be effected by delivering it--by hand or by mail at the 
address posted by the employer--to the individual designated to receive 
such notices. Notice when given to the district director, may be by hand 
or by mail on a form supplied by the Secretary, or orally in person or 
by telephone.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 398, Jan. 3, 1985]



Sec.702.216  Effect of failure to give notice.

    Failure to give timely notice to the employer's designated official 
shall not bar any claim for compensation if: (a) The employer, carrier, 
or designated official had actual knowledge of the injury or death; or 
(b) the district director or ALJ determines the employer or carrier has 
not been prejudiced: or (c) the district director excuses failure to

[[Page 201]]

file notice. For purposes of this subsection, actual knowledge shall be 
deemed to exist if the employee's immediate supervisor was aware of the 
injury and/or in the case of a hearing loss, where the employer has 
furnished to the employee an audiogram and report which indicates a loss 
of hearing. Failure to give notice shall be excused by the district 
director if: a) Notice, while not given to the designated official, was 
given to an official of the employer or carrier, and no prejudice 
resulted; or b) for some other satisfactory reason, notice could not be 
given. Failure to properly designate and post the individual so 
designated shall be considered a satisfactory reason. In any event, such 
defense to a claim must be raised by the employer/carrier at the first 
hearing on the claim.

[51 FR 4283, Feb. 3, 1986]



Sec.702.217  Penalty for false statement, misrepresentation.

    (a) Any claimant or representative of a claimant who knowingly and 
willfully makes a false statement or representation for the purpose of 
obtaining a benefit or payment under this Act shall be guilty of a 
felony, and on conviction thereof shall be punished by a fine not to 
exceed $10,000, by imprisonment not to exceed five years, or by both.
    (b) Any person including, but not limited to, an employer, its duly 
authorized agent or an employee of an insurance carrier, who knowingly 
and willingly makes a false statement or representation for the purpose 
of reducing, denying or terminating benefits to an injured employee, or 
his dependents pursuant to section 9, 33 U.S.C. 909, if the injury 
results in death, shall be punished by a fine not to exceed $10,000, by 
imprisonment not to exceed five years, or both.

[50 FR 398, Jan. 3, 1985]

                                 Claims



Sec.702.221  Claims for compensation; time limitations.

    (a) Claims for compensation for disability or death shall be in 
writing and filed with the district director for the compensation 
district in which the injury or death occurred. The Social Security 
Number (SSN) of the injured employee and, in cases of death, the SSN of 
the person seeking survivor benefits shall also be set forth on each 
claim. Claims may be filed anytime after the seventh day of disability 
or anytime following the death of the employee. Except as provided 
below, the right to compensation is barred unless a claim is filed 
within one year of the injury or death, or (where payment is made 
without an award) within one year of the date on which the last 
compensation payment was made.
    (b) In the case of a hearing loss claim, the time for filing a claim 
does not begin to run until the employee receives an audiogram with the 
accompanying report which indicates the employee has sustained a hearing 
loss that is related to his or her employment. (See Sec.702.441).

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 398, Jan. 3, 1985, as amended at 51 FR 4284, Feb. 3, 1986; 58 FR 
68032, Dec. 23, 1993]



Sec.702.222  Claims; exceptions to time limitations.

    (a) Where a person entitled to compensation under the Act is 
mentally incompetent or a minor, the time limitation provision of Sec.
702.221 shall not apply to a mentally incompetent person so long as such 
person has no guardian or other authorized representative, but Sec.
702.221 shall be applicable from the date of appointment of such 
guardian or other representative. In the case of minor who has no 
guardian before he or she becomes of age, time begins to run from the 
date he or she becomes of age.
    (b) Where a person brings a suit at law or in admiralty to recover 
damages in respect of an injury or death, or files a claim under a State 
workers' compensation act because such person is excluded from this 
Act's coverage by reason of section 2(3) or 3(d) of the Act (33 U.S.C. 
902(3) or 903(d)), and recovery is denied because the person was an 
employee and defendant was an employer within the meaning of the Act, 
and such employer had secured compensation to such employee under the 
Act, the time limitation in Sec.702.221 shall not begin to run until 
the date of termination of such suit or proceeding.

[[Page 202]]

    (c) Notwithstanding the provisions in paragraph (a) of this section, 
where the claim is one based on disability or death due to an 
occupational disease which does not immediately result in death or 
disability, it must be filed within two years after the employee or 
claimant becomes aware, or in the exercise of reasonable diligence or by 
reason of medical advice, should have been aware of the relationship 
between the employment, the disease and the death or disability, or 
within one year of the date of last payment of compensation, whichever 
is later. For purposes of occupational disease, therefore, the time 
limitation for filing a claim does not begin to run until the employee 
is disabled, or in the case of a retired employee, where a permanent 
impairment exists.
    (d) The time limitations set forth above do not apply to claims 
filed under section 49 of the Act, 33 U.S.C. 949.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 398, Jan. 3, 1985]



Sec.702.223  Claims; time limitations; time to object.

    Notwithstanding the requirements of Sec.702.221, failure to file a 
claim within the period prescribed in such section shall not be a bar to 
such right unless objection to such failure is made at the first hearing 
of such claim in which all parties in interest are given reasonable 
notice and opportunity to be heard.

[38 FR 26861, Sept. 26, 1973. Redesignated and amended at 50 FR 397, 
Jan. 3, 1985]



Sec.702.224  Claims; notification of employer of filing by employee.

    Within 10 days after the filing of a claim for compensation for 
injury or death under the Act, the district director shall give written 
notice thereof to the employer or carrier, served personally or by mail.

[38 FR 26861, Sept. 26, 1973. Redesignated at 50 FR 397, Jan. 3, 1985, 
as amended at 60 FR 51348, Oct. 2, 1995]



Sec.702.225  Withdrawal of a claim.

    (a) Before adjudication of claim. A claimant (or an individual who 
is authorized to execute a claim on his behalf) may withdraw his 
previously filed claim: Provided, That:
    (1) He files with the district director with whom the claim was 
filed a written request stating the reasons for withdrawal;
    (2) The claimant is alive at the time his request for withdrawal is 
filed;
    (3) The district director approves the request for withdrawal as 
being for a proper purpose and in the claimant's best interest; and
    (4) The request for withdrawal is filed, on or before the date the 
OWCP makes a determination on the claim.
    (b) After adjudication of claim. A claim for benefits may be 
withdrawn by a written request filed after the date the OWCP makes a 
determination on the claim: Provided, That:
    (1) The conditions enumerated in paragraphs (a) (1) through (3) of 
this section are met; and
    (2) There is repayment of the amount of benefits previously paid 
because of the claim that is being withdrawn or it can be established to 
the satisfaction of the Office that repayment of any such amount is 
assured.
    (c) Effect of withdrawal of claim. Where a request for withdrawal of 
a claim is filed and such request for withdrawal is approved, such 
withdrawal shall be without prejudice to the filing of another claim, 
subject to the time limitation provisions of section 13 of the Act and 
of the regulations in this part.

[38 FR 26861, Sept. 26, 1973. Redesignated at 50 FR 397, Jan. 3, 1985]

                         Noncontroverted Claims



Sec.702.231  Noncontroverted claims; payment of compensation without an award.

    Unless the employer controverts its liability to pay compensation 
under this Act, the employer or insurance carrier shall pay 
periodically, promptly and directly to the person entitled thereto 
benefits prescribed by the Act. For this purpose, where the employer 
furnishes to an employee a copy of an audiogram with a report thereon, 
which indicates the employee has sustained a hearing loss causally 
related to factors of that employment, the employer or insurance carrier 
shall pay

[[Page 203]]

appropriate compensation or at that time controvert the liability to pay 
compensation under this Act.

[50 FR 399, Jan. 3, 1985]



Sec.702.232  Payments without an award; when; how paid.

    The first installment of compensation shall become due by the 
fourteenth (14th) day after the employer has been notified, through the 
designated official or by any other means described in Sec.702.211 et 
seq., or has actual knowledge of the injury or death. All compensation 
due on that fourteenth (14th) day shall be paid then and appropriate 
compensation due thereafter must be paid in semi-monthly installments, 
unless the district director determines otherwise.

[50 FR 399, Jan. 3, 1985]



Sec.702.233  Penalty for failure to pay without an award.

    If any installment of compensation payable without an award is not 
paid within 14 days after it becomes due, there shall be added to such 
unpaid installment an amount equal to 10 per centum thereof which shall 
be paid at the same time as, but in addition to, such installment unless 
the employer files notice of controversion in accordance with Sec.
702.261, or unless such nonpayment is excused by the district director 
after a showing by the employer that owing to conditions over which he 
had no control such installment could not be paid within the period 
prescribed for the payment.



Sec.702.234  Report by employer of commencement and suspension of payments.

    Immediately upon making the first payment of compensation, and upon 
the suspension of payments once begun, the employer shall notify the 
district director having jurisdiction over the place where the injury or 
death occurred of the commencement or suspension of payments, as the 
case may be.



Sec.702.235  Report by employer of final payment of compensation.

    (a) Within 16 days after the final payment of compensation has been 
made, the employer, the insurance carrier, or where the employer is 
self-insured, the employer shall notify the district director on a form 
prescribed by the Secretary, stating that such final payment has been 
made, the total amount of compensation paid, the name and address of the 
person(s) to whom payments were made, the date of the injury or death 
and the name of the injured or deceased employee, and the inclusive 
dates during which compensation was paid.
    (b) A ``final payment of compensation'' for the purpose of applying 
the penalty provision of Sec.702.236 shall be deemed any one of the 
following:
    (1) The last payment of compensation made in accordance with a 
compensation order awarding disability or death benefits, issued by 
either a district director or an administrative law judge;
    (2) The payment of an agreed settlement approved under section 8(i) 
(A) or (B), of the Act, 33 U.S.C. 908(i);
    (3) The last payment made pursuant to an agreement reached by the 
parties through informal proceedings;
    (4) Any other payment of compensation which anticipates no further 
payments under the Act.

(Approved by the Office of Management and Budget under control number 
1215-0024)

(Pub. L. No. 96-511)

[42 FR 45302, Sept. 9, 1977, as amended at 49 FR 18294, Apr. 30, 1984; 
50 FR 399, Jan. 3, 1985]



Sec.702.236  Penalty for failure to report termination of payments.

    Any employer failing to notify the district director that the final 
payment of compensation has been made as required by Sec.702.235 shall 
be assessed a civil penalty in the amount of $100.00. Provided, however, 
that for any violation occurring on or after November 17, 1997 the civil 
penalty will be $110.00. The district director has the authority and 
responsibility for assessing a civil penalty under this section.

[62 FR 53956, Oct. 17, 1997]

[[Page 204]]

                           Agreed Settlements



Sec.702.241  Definitions and supplementary information.

    (a) As used hereinafter, the term adjudicator shall mean district 
director or administrative law judge (ALJ).
    (b) If a settlement application is submitted to an adjudicator and 
the case is pending at the Office of Administrative Law Judges, the 
Benefits Review Board, or any Federal circuit court of appeals, the 
parties may request that the case be remanded to the adjudicator for 
consideration of the application. The thirty day period as described in 
paragraph (f) of this section begins when the remanded case is received 
by the adjudicator.
    (c) If a settlement application is first submitted to an ALJ, the 
thirty day period mentioned in paragraph (f) of this section does not 
begin until five days before the date the formal hearing is set. This 
rule does not preclude the parties from submitting the application at 
any other time such as (1) after the case is referred for hearing, (2) 
at the hearing, or (3) after the hearing but before the ALJ issues a 
decision and order. Where a case is pending before the ALJ but not set 
for a hearing, the parties may request the case be remanded to the 
district director for consideration of the settlement.
    (d) A settlement agreement between parties represented by counsel, 
which is deemed approved when not disapproved within thirty days, as 
described in paragraph (f) of this section, shall be considered to have 
been filed in the office of the district director on the thirtieth day 
for purposes of sections 14 and 21 of the Act, 33 U.S.C. 914 and 921.
    (e) A fee for representation which is included in an agreement that 
is approved in the manner described in paragraph (d) of this section, 
shall also be considered approved within the meaning of section 28(e) of 
the Act, 33 U.S.C. 928(e).
    (f) The thirty day period for consideration of a settlement 
agreement shall be calculated from the day after receipt unless the 
parties are advised otherwise by the adjudicator. (See Sec.
702.243(b)). If the last day of this period is a holiday or occurs 
during a weekend, the next business day shall be considered the 
thirtieth day.
    (g) An agreement among the parties to settle a claim is limited to 
the rights of the parties and to claims then in existence; settlement of 
disability compensation or medical benefits shall not be a settlement of 
survivor benefits nor shall the settlement affect, in any way, the right 
of survivors to file a claim for survivor's benefits.
    (h) For purposes of this section and Sec.702.243 the term counsel 
means any attorney admitted to the bar of any State, territory or the 
District of Columbia.

[50 FR 399, Jan. 3, 1985, as amended at 51 FR 4284, Feb. 3, 1986]



Sec.702.242  Information necessary for a complete settlement application.

    (a) The settlement application shall be a self-sufficient document 
which can be evaluated without further reference to the administrative 
file. The application shall be in the form of a stipulation signed by 
all parties and shall contain a brief summary of the facts of the case 
to include: a description of the incident, a description of the nature 
of the injury to include the degree of impairment and/or disability, a 
description of the medical care rendered to date of settlement, and a 
summary of compensation paid and the compensation rate or, where 
benefits have not been paid, the claimant's average weekly wage.
    (b) The settlement application shall contain the following:
    (1) A full description of the terms of the settlement which clearly 
indicates, where appropriate, the amounts to be paid for compensation, 
medical benefits, survivor benefits and representative's fees which 
shall be itemized as required by Sec.702.132.
    (2) The reason for the settlement, and the issues which are in 
dispute, if any.
    (3) The claimant's date of birth and, in death claims, the names and 
birth dates of all dependents.
    (4) Information on whether or not the claimant is working or is 
capable of working. This should include, but not be limited to, a 
description of the claimant's educational background and work history, 
as well as other factors

[[Page 205]]

which could impact, either favorably or unfavorably, on future 
employability.
    (5) A current medical report which fully describes any injury 
related impairment as well as any unrelated conditions. This report 
shall indicate whether maximum medical improvement has been reached and 
whether further disability or medical treatment is anticipated. If the 
claimant has already reached maximum medical improvement, a medical 
report prepared at the time the employee's condition stabilized will 
satisfy the requirement for a current medical report. A medical report 
need not be submitted with agreements to settle survivor benefits unless 
the circumstances warrant it.
    (6) A statement explaining how the settlement amount is considered 
adequate.
    (7) If the settlement application covers medical benefits an 
itemization of the amount paid for medical expenses by year for the 
three years prior to the date of the application. An estimate of the 
claimant's need for future medical treatment as well as an estimate of 
the cost of such medical treatment shall also be submitted which 
indicates the inflation factor and/or the discount rate used, if any. 
The adjudicator may waive these requirements for good cause.
    (8) Information on any collateral source available for the payment 
of medical expenses.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 399, Jan. 3, 1985, as amended at 51 FR 4284, Feb. 3, 1986]



Sec.702.243  Settlement application; how submitted, how approved, how 

disapproved, criteria.

    (a) When the parties to a claim for compensation, including survivor 
benefits and medical benefits, agree to a settlement they shall submit a 
complete application to the adjudicator. The application shall contain 
all the information outlined in Sec.702.242 and shall be sent by 
certified mail, return receipt requested or submitted in person, or by 
any other delivery service with proof of delivery to the adjudicator. 
Failure to submit a complete application shall toll the thirty day 
period mentioned in section 8(i) of the Act, 33 U.S.C. 908(i), until a 
complete application is received.
    (b) The adjudicator shall consider the settlement application within 
thirty days and either approve or disapprove the application. The 
liability of an employer/insurance carrier is not discharged until the 
settlement is specifically approved by a compensation order issued by 
the adjudicator. However, if the parties are represented by counsel, the 
settlement shall be deemed approved unless specifically disapproved 
within thirty days after receipt of a complete application. This thirty 
day period does not begin until all the information described in Sec.
702.242 has been submitted. The adjudicator shall examine the settlement 
application within thirty days and shall immediately serve on all 
parties notice of any deficiency. This notice shall also indicate that 
the thirty day period will not commence until the deficiency is 
corrected.
    (c) If the adjudicator disapproves a settlement application, the 
adjudicator shall serve on all parties a written statement or order 
containing the reasons for disapproval. This statement shall be served 
by certified mail within thirty days of receipt of a complete 
application (as described in Sec.702.242.) if the parties are 
represented by counsel. If the disapproval was made by a district 
director, any party to the settlement may request a hearing before an 
ALJ as provided in sections 8 and 19 of the Act, 33 U.S.C. 908 and 919, 
or an amended application may be submitted to the district director. If, 
following the hearing, the ALJ disapproves the settlement, the parties 
may: (1) Submit a new application, (2) file an appeal with the Benefits 
Review Board as provided in section 21 of the Act, 33 U.S.C. 921, or (3) 
proceed with a hearing on the merits of the claim. If the application is 
initially disapproved by an ALJ, the parties may (1) submit a new 
application or (2) proceed with a hearing on the merits of the claim.
    (d) The parties may submit a settlement application solely for 
compensation, or solely for medical benefits or for compensation and 
medical benefits combined.

[[Page 206]]

    (e) If either portion of a combined compensation and medical 
benefits settlement application is disapproved the entire application is 
disapproved unless the parties indicate on the face of the application 
that they agree to settle either portion independently.
    (f) When presented with a settlement, the adjudicator shall review 
the application and determine whether, considering all of the 
circumstances, including, where appropriate, the probability of success 
if the case were formally litigated, the amount is adequate. The 
criteria for determining the adequacy of the settlement application 
shall include, but not be limited to:
    (1) The claimant's age, education and work history;
    (2) The degree of the claimant's disability or impairment;
    (3) The availability of the type of work the claimant can do;
    (4) The cost and necessity of future medical treatment (where the 
settlement includes medical benefits).
    (g) In cases being paid pursuant to a final compensation order, 
where no substantive issues are in dispute, a settlement amount which 
does not equal the present value of future compensation payments 
commuted, computed at the discount rate specified below, shall be 
considered inadequate unless the parties to the settlement show that the 
amount is adequate. The probability of the death of the beneficiary 
before the expiration of the period during which he or she is entitled 
to compensation shall be determined according to the most current United 
States Life Table, as developed by the United States Department of 
Health and Human Services, which shall be updated from time to time. The 
discount rate shall be equal to the coupon issue yield equivalent (as 
determined by the Secretary of the Treasury) of the average accepted 
auction price for the last auction of 52 weeks U.S. Treasury Bills 
settled immediately prior to the date of the submission of the 
settlement application.

[50 FR 399, Jan. 3, 1985, as amended at 51 FR 4284, Feb. 3, 1986; 60 FR 
51348, Oct. 2, 1995]

                           Controverted Claims



Sec.702.251  Employer's controversion of the right to compensation.

    Where the employer controverts the right to compensation after 
notice or knowledge of the injury or death, or after receipt of a 
written claim, he shall give notice thereof, stating the reasons for 
controverting the right to compensation, using the form prescribed by 
the Director. Such notice, or answer to the claim, shall be filed with 
the district director within 14 days from the date the employer receives 
notice or has knowledge of the injury or death. The original notice 
shall be sent to the district director having jurisdiction, and a copy 
thereof shall be given or mailed to the claimant.

(Approved by the Office of Management and Budget under control number 
1215-0023)

(Pub. L. No. 96-511)

[38 FR 26861, Sept. 26, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec.702.252  Action by district director upon receipt of notice of 

controversion.

    Upon receiving the employer's notice of controversion, the district 
director shall forthwith commence proceedings for the adjudication of 
the claim in accordance with the procedures set forth in subpart C of 
this part.

                            Contested Claims



Sec.702.261  Claimant's contest of actions taken by employer or carrier with 

respect to the claim.

    Where the claimant contests an action by the employer or carrier 
reducing, suspending, or terminating benefits, including medical care, 
he should immediately notify the office of the district director having 
jurisdiction, in person or in writing, and set forth the facts pertinent 
to his complaint.



Sec.702.262  Action by district director upon receipt of notice of contest.

    Upon receipt of the claimant's notice of contest, the district 
director shall forthwith commence proceedings for adjudication of the 
claim in accordance with the procedures set forth in subpart C of this 
part.

[[Page 207]]

                             Discrimination



Sec.702.271  Discrimination; against employees who bring proceedings, 

prohibition and penalty.

    (a)(1) No employer or its duly authorized agent may discharge or in 
any manner discriminate against an employee as to his/her employment 
because that employee: (i) Has claimed or attempted to claim 
compensation under this Act; or (ii) has testified or is about to 
testify in a proceeding under this Act. To discharge or refuse to employ 
a person who has been adjudicated to have filed a fraudulent claim for 
compensation or otherwise made a false statement or misrepresentation 
under section 31(a)(1) of the Act, 33 U.S.C. 931(a)(1), is not a 
violation of this section.
    (2) Any employer who violates this section shall be liable to a 
penalty of not less that $1,000.00 or more than $5,000.00 to be paid (by 
the employer alone, and not by a carrier) to the district director for 
deposit in the special fund described in section 44 of the Act, 33 
U.S.C. 944; and shall restore the employee to his or her employment 
along with all wages lost due to the discrimination unless the employee 
has ceased to be qualified to perform the duties of employment. Provided 
however, that for any violation occurring on or after November 17, 1997 
the employer shall be liable to a penalty of not less than $1,100.00 or 
more than $5,500.00.
    (b) When a district director receives a complaint from an employee 
alleging discrimination as defined under section 49, he or she shall 
notify the employer, and within five working days, initiate specific 
inquiry to determine all the facts and circumstances pertaining thereto. 
This may be accomplished by interviewing the employee, employer 
representatives and other parties who may have information about the 
matter. Interviews may be conducted by written correspondence, telephone 
or personal interview.
    (c) If circumstances warrant, the district director may also conduct 
an informal conference on the issue as described in Sec. Sec.702.312 
through 702.314.
    (d) Any employee discriminated against is entitled to be restored to 
his employment and to be compensated by the employer for any loss of 
wages arising out of such discrimination provided that the employee is 
qualified to perform the duties of the employment. If it is determined 
that the employee has been discriminated against, the district director 
shall also determine whether the employee is qualified to perform the 
duties of the employment. The district director may use medical evidence 
submitted by the parties or he may arrange to have the employee examined 
by a physician selected by the district director. The cost of the 
medical examination arranged for by the district director may be charged 
to the special fund established by section 44, 33 U.S.C. 944.

[42 FR 45302, Sept. 9, 1977, as amended at 50 FR 400, Jan. 3, 1985; 62 
FR 53956, Oct. 17, 1997]



Sec.702.272  Informal recommendation by district director.

    (a) If the district director determines that the employee has been 
discharged or suffered discrimination and is able to resume his or her 
duties, the district director will recommend that the employer reinstate 
the employee and/or make such restitution as is indicated by the 
circumstances of the case, including compensation for any wage loss 
suffered as the result of the discharge or discrimination. The district 
director may also assess the employer an appropriate penalty, as 
determined under authority vested in the district director by the Act. 
If the district director determines that no violation occurred he shall 
notify the partries of his findings and the reasons for recommending 
that the complaint be denied. If the employer and employee accept the 
district director's recommendation, it will be incorporated in an order 
and mailed to each party within 10 days.
    (b) If the parties do not agree to the recommendation, the district 
director shall, within 10 days after receipt of the rejection, prepare a 
memorandum summarizing the disagreement, mail a copy to all interested 
parties, and shall within 14 days thereafter refer the case to the 
Office of the Chief Administrative Law Judge for hearing pursuant to 
Sec.702.317.

[42 FR 45302, Sept. 9, 1977]

[[Page 208]]



Sec.702.273  Adjudication by Office of the Chief Administrative Law Judge.

    The Office of Administrative Law Judges is responsible for final 
determinations of all disputed issues connected with the discrimination 
complaint, including the amount of penalty to be assessed, and shall 
proceed with a formal hearing as described in Sec. Sec.702.331 to 
702.394.

[42 FR 45302, Sept. 9, 1977]



Sec.702.274  Employer's refusal to pay penalty.

    In the event the employer refuses to pay the penalty assessed, the 
district director shall refer the complete administrative file to the 
Associate Director, Division of Longshore and Harbor Workers' 
Compensation, for subsequent transmittal to the Associate Solicitor for 
Employee Benefits, with the request that appropriate legal action be 
taken to recover the penalty.

[42 FR 45302, Sept. 9, 1977]

                               Third Party



Sec.702.281  Third party action.

    (a) Every person claiming benefits under this Act (or the 
representative) shall promptly notify the employer and the district 
director when:
    (1) A claim is made that someone other than the employer or person 
or persons in its employ, is liable in damages to the claimant because 
of the injury or death and identify such party by name and address.
    (2) Legal action is instituted by the claimant or the representative 
against some person or party other than the employer or a person or 
persons in his employ, on the ground that such other person is liable in 
damages to the claimant on account of the compensable injury and/or 
death; specify the amount of damages claimed and identify the person or 
party by name and address.
    (3) Any settlement, compromise or any adjudication of such claim has 
been effected and report the terms, conditions and amounts of such 
resolution of claim.
    (b) Where the claim or legal action instituted against a third party 
results in a settlement agreement which is for an amount less than the 
compensation to which a person would be entitled under this Act, the 
person (or the person's representative) must obtain the prior, written 
approval of the settlement from the employer and the employer's carrier 
before the settlement is executed. Failure to do so relieves the 
employer and/or carrier of liability for compensation described in 
section 33(f) of Act, 33 U.S.C. 933(f) and for medical benefits 
otherwise due under section 7 of the Act, 33 U.S.C. 907, regardless of 
whether the employer or carrier has made payments of acknowledged 
entitlement to benefits under the Act. The approval shall be on a form 
provided by the Director and filed, within thirty days after the 
settlement is entered into, with the district director who has 
jurisdiction in the district where the injury occurred.

[42 FR 45303, Sept. 9, 1977, as amended at 50 FR 400, Jan. 3, 1985; 51 
FR 4284, Feb. 3, 1986]

                           Report of Earnings



Sec.702.285  Report of earnings.

    (a) An employer, carrier or the Director (for those cases being paid 
from the Special Fund) may require an employee to whom it is paying 
compensation to submit a report on earnings from employment or self-
employment. This report may not be required any more frequently than 
semi-annually. The report shall be made on a form prescribed by the 
Director and shall include all earnings from employment and self-
employment and the periods for which the earnings apply. The employee 
must return the complete report on earnings even where he or she has no 
earnings to report.
    (b) For these purposes the term ``earnings'' is defined as all 
monies received from any employment and includes but is not limited to 
wages, salaries, tips, sales commissions, fees for services provided, 
piecework and all revenue received from self-employment even if the 
business or enterprise operated at a loss of if the profits were 
reinvested.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 400, Jan. 3, 1985]

[[Page 209]]



Sec.702.286  Report of earnings; forfeiture of compensation.

    (a) Any employee who fails to submit the report on earnings from 
employment or self-employment under Sec.702.285 or, who knowingly and 
willingly omits or understates any part of such earnings, shall upon a 
determination by the district director forfeit all right to compensation 
with respect to any period during which the employee was required to 
file such a report. The employee must return the completed report on 
earnings (even where he or she reports no earnings) within thirty (30) 
days of the date of receipt; this period may be extended for good cause, 
by the district director, in determining whether a violation of this 
requirement has occurred.
    (b) Any employer or carrier who believes that a violation of 
paragraph (a) of this section has occurred may file a charge with the 
district director. The allegation shall be accompanied by evidence which 
includes a copy of the report, with proof of service requesting the 
information from the employee and clearly stating the dates for which 
the employee was required to report income. Where the employer/carrier 
is alleging an omission or understatement of earnings, it shall, in 
addition, present evidence of earnings by the employee during that 
period, including copies of checks, affidavits from employers who paid 
the employee earnings, receipts of income from self-employment or any 
other evidence showing earnings not reported or underreported for the 
period in question. Where the district director finds the evidence 
sufficient to support the charge he or she shall convene an informal 
conference as described in subpart C and shall issue a compensation 
order affiming or denying the charge and setting forth the amount of 
compensation for the specified period. If there is a conflict over any 
issue relating to this matter any party may request a formal hearing 
before an Administrative Law Judge as described in subpart C.
    (c) Compensation forfeited under paragraph (b) of this section, if 
already paid, shall be recovered by a deduction from the compensation 
payable to the employee if any, on such schedule as determined by the 
district director. The district director's discretion in such cases 
extends only to rescheduling repayment by crediting future compensation 
and not to whether and in what amounts compensation is forfeited. For 
this purpose, the district director shall consider the employee's 
essential expenses for living, income from whatever source, and assets, 
including cash, savings and checking accounts, stocks, bonds, and other 
securities.

[50 FR 400, Jan. 3, 1985]



                    Subpart C_Adjudication Procedures

                                 General



Sec.702.301  Scope of this subpart.

    The regulations in this subpart govern the adjudication of claims in 
which the employer has filed a notice of controversion under Sec.
702.251, or the employee has filed notice of contest under Sec.
702.261. In the vast majority of cases, the problem giving rise to the 
controversy results from misunderstandings, clerical or mechanical 
errors, or mistakes of fact or law. Such problems seldom require 
resolution through formal hearings, with the attendant production of 
expert witnesses. Accordingly, by Sec.702.311 et seq., the district 
directors are empowered to amicably and promptly resolve such problems 
by informal procedures. Where there is a genuine dispute of fact or law 
which cannot be so disposed of informally, resort must be had to the 
formal hearing procedures as set forth beginning at Sec.702.331. 
Supplementary compensation orders, modifications, and interlocutory 
matters are governed by regulations beginning with Sec.702.371. 
Thereafter, appeals from compensation orders are discussed beginning 
with Sec.702.391 (the regulations of the Benefits Review Board are set 
forth in full in part 802 of this title).

                      Action by District Directors



Sec.702.311  Handling of claims matters by district directors; informal 

conferences.

    The district director is empowered to resolve disputes with respect 
to claims in a manner designed to protect the

[[Page 210]]

rights of the parties and also to resolve such disputes at the earliest 
practicable date. This will generally be accomplished by informal 
discussions by telephone or by conferences at the district director's 
office. Some cases will be handled by written correspondence. The 
regulations governing informal conferences at the district director's 
office with all parties present are set forth below. When handling 
claims by telephone, or at the office with only one of the parties, the 
district director and his staff shall make certain that a full written 
record be made of the matters discussed and that such record be placed 
in the administrative file. When claims are handled by correspondence, 
copies of all communications shall constitute the administrative file.



Sec.702.312  Informal conferences; called by and held before whom.

    Informal conferences shall be called by the district director or his 
designee assigned or reassigned the case and held before that same 
person, unless such person is absent or unavailable. When so assigned, 
the designee shall perform the duties set forth below assigned to the 
district director, except that a compenstion order following an 
agreement shall be issued only by a person so designated by the Director 
to perform such duty.

[42 FR 45303, Sept. 9, 1977]



Sec.702.313  Informal conferences; how called; when called.

    Informal conferences may be called upon not less than 10 days' 
notice to the parties, unless the parties agree to meet at an earlier 
date. The notice may be given by telephone, but shall be confirmed by 
use of a written notice on a form prescribed by the Director. The notice 
shall indicate the date, time and place of the conference, and shall 
also specify the matters to be discussed. For good cause shown 
conferences may be rescheduled. A copy of such notice shall be placed in 
the administrative file.



Sec.702.314  Informal conferences; how conducted; where held.

    (a) No stenographic report shall be taken at informal conferences 
and no witnesses shall be called. The district director shall guide the 
discussion toward the achievement of the purpose of such conference, 
recommending courses of action where there are disputed issues, and 
giving the parties the benefit of his experience and specialized 
knowledge in the field of workmen's compensation.
    (b) Conferences generally shall be held at the district director's 
office. However, such conferences may be held at any place which, in the 
opinion of the district director, will be of greater convenience to the 
parties or to their representatives.



Sec.702.315  Conclusion of conference; agreement on all matters with respect 

to the claim.

    (a) Following an informal conference at which agreement is reached 
on all issues, the district director shall (within 10 days after 
conclusion of the conference), embody the agreement in a memorandum or 
within 30 days issue a formal compensation order, to be filed and mailed 
in accordance with Sec.702.349. If either party requests that a formal 
compensation order be issued the district director shall, within 30 days 
of such request, prepare, file, and serve such order in accordance with 
Sec.702.349. Where the problem was of such nature that it was resolved 
by telephone discussion or by exchange of written correspondence, the 
parties shall be notified by the same means that agreement was reached 
and the district director shall prepare a memorandum or order setting 
forth the terms agreed upon. In either instance, when the employer or 
carrier has agreed to pay, reinstate or increase monetary compensation 
benefits, or to restore or appropriately change medical care benefits, 
such action shall be commenced immediately upon becoming aware of the 
agreement, and without awaiting receipt of the memorandum or the formal 
compensation order.
    (b) Where there are several conferences or discussions, the 
provisions of paragraph (a) of this section do not apply until the last 
conference. The district director shall, however, prepare and place in 
his administrative file a short, succinct memorandum of

[[Page 211]]

each preceding conference or discussion.

[38 FR 26861, Sept. 26, 1973, as amended at 42 FR 45303, Sept. 9, 1977]



Sec.702.316  Conclusion of conference; no agreement on all matters with 

respect to the claim.

    When it becomes apparent during the course of the informal 
conference that agreement on all issues cannot be reached, the district 
director shall bring the conference to a close, shall evaluate all 
evidence available to him or her, and after such evaluation shall 
prepare a memorandum of conference setting forth all outstanding issues, 
such facts or allegations as appear material and his or her 
recommendations and rationale for resolution of such issues. Copies of 
this memorandum shall then be sent to each of the parties or their 
representatives, who shall then have 14 days within which to signify in 
writing to the district director whether they agree or disagree with his 
or her recommendations. If they agree, the district director shall 
proceed as in Sec.702.315(a). If they disagree (Caution: See Sec.
702.134), then the district director may schedule such further 
conference or conferences as, in his or her opinion, may bring about 
agreement; if he or she is satisfied that any further conference would 
be unproductive, or if any party has requested a hearing, the district 
director shall prepare the case for transfer to the Office of the Chief 
Administrative Law Judge (See Sec.702.317, Sec. Sec.702.331-
702.351).

[42 FR 42551, Aug. 23, 1977, as amended at 60 FR 51348, Oct. 2, 1995]



Sec.702.317  Preparation and transfer of the case for hearing.

    A case is prepared for transfer in the following manner:
    (a) The district director shall furnish each of the parties or their 
representatives with a copy of a prehearing statement form.
    (b) Each party shall, within 21 days after receipt of such form, 
complete it and return it to the district director and serve copies on 
all other parties. Extensions of time for good cause may be granted by 
the district director.
    (c) Upon receipt of the completed forms, the district director, 
after checking them for completeness and after any further conferences 
that, in his or her opinion, are warranted, shall transmit them to the 
Office of the Chief Administrative Law Judge by letter of transmittal 
together with all available evidence which the parties intend to submit 
at the hearing (exclusive of X-rays, slides and other materials not 
suitable for mailing which may be offered into evidence at the time of 
hearing); the materials transmitted shall not include any 
recommendations expressed or memoranda prepared by the district director 
pursuant to Sec.702.316.
    (d) If the completed pre-hearing statement forms raise new or 
additional issues not previously considered by the district director or 
indicate that material evidence will be submitted that could reasonably 
have been made available to the district director before he or she 
prepared the last memorandum of conference, the district director shall 
transfer the case to the Office of the Chief Administrative Law Judge 
only after having considered such issues or evaluated such evidence or 
both and having issued an additional memorandum of conference in 
conformance with Sec.702.316.
    (e) If a party fails to complete or return his or her pre-hearing 
statement form within the time allowed, the district director may, at 
his or her discretion, transmit the case without that party's form. 
However, such transmittal shall include a statement from the district 
director setting forth the circumstanes causing the failure to include 
the form, and such party's failure to submit a pre-hearing statement 
form may, subject to rebuttal at the formal hearing, be considered by 
the administrative law judge, to the extent intransigence is relevant, 
in subsequent rulings on motions which may be made in the course of the 
formal hearing.

(Approved by the Office of Management and Budget under control number 
1215-0085)

(Pub. L. No. 96-511)

[42 FR 42551, Aug. 23, 1977, as amended at 49 FR 18295, Apr. 30, 1984]

[[Page 212]]



Sec.702.318  The record; what constitutes; nontransferability of the 

administrative file.

    For the purpose of any further proceedings under the Act, the formal 
record of proceedings shall consist of the hearing record made before 
the administrative law judge (see Sec.702.344). When transferring the 
case for hearing pursuant to Sec.702.317, the district director shall 
not transfer the administrative file under any circumstances.



Sec.702.319  Obtaining documents from the administrative file for 

reintroduction at formal hearings.

    Whenever any party considers any document in the administrative file 
essential to any further proceedings under the Act, it is the 
responsibility of such party to obtain such document from the district 
director and reintroduce it for the record before the administrative law 
judge. The type of document that may be obtained shall be limited to 
documents previously submitted to the district director, including 
documents or forms with respect to notices, claims, controversions, 
contests, progress reports, medical services or supplies, etc. The work 
products of the district director or his staff shall not be subject to 
retrieval. The procedure for obtaining documents shall be for the 
requesting party to inform the district director in writing of the 
documents he wishes to obtain, specifying them with particularity. Upon 
receipt, the district director shall cause copies of the requested 
documents to be made and then:
    (a) Place the copies in the file together with the letter of 
request, and (b) promptly forward the originals to the requesting party. 
The handling of multiple requests for the same document shall be within 
the discretion of the district director and with the cooperation of the 
requesting parties.

                              Special Fund



Sec.702.321  Procedures for determining applicability of section 8(f) of the 

Act.

    (a) Application: filing, service, contents. (1) An employer or 
insurance carrier which seeks to invoke the provisions of section 8(f) 
of the Act must request limitation of its liability and file, in 
duplicate, with the district director a fully documented application. A 
fully documented application shall contain the following information: 
(i) A specific description of the pre-existing condition relied upon as 
constituting an existing permanent partial disability; (ii) the reasons 
for believing that the claimant's permanent disability after the injury 
would be less were it not for the pre-existing permanent partial 
disability or that the death would not have ensued but for that 
disability. These reasons must be supported by medical evidence as 
specified in paragraph (a)(1)(iv) of this section; (iii) the basis for 
the assertion that the pre-existing condition relied upon was manifest 
in the employer; and (iv) documentary medical evidence relied upon in 
support of the request for section 8(f) relief. This medical evidence 
shall include, but not be limited to, a current medical report 
establishing the extent of all impairments and the date of maximum 
medical improvement. If the claimant has already reached maximum medical 
improvement, a report prepared at that time will satisfy the requirement 
for a current medical report. If the current disability is total, the 
medical report must explain why the disability is not due solely to the 
second injury. If the current disability is partial, the medical report 
must explain why the disability is not due solely to the second injury 
and why the resulting disability is materially and substantially greater 
than that which would have resulted from the subsequent injury alone. If 
the injury is loss of hearing, the pre-existing hearing loss must be 
documented by an audiogram which complies with the requirements of Sec.
702.441. If the claim is for survivor's benefits, the medical report 
must establish that the death was not due solely to the second injury. 
Any other evidence considered necessary for consideration of the request 
for section 8(f) relief must be submitted when requested by the district 
director or Director.
    (2) If claim is being paid by the special fund and the claimant 
dies, an employer need not reapply for section 8(f) relief. However, 
survivor benefits will

[[Page 213]]

not be paid until it has been established that the death was due to the 
accepted injury and the eligible survivors have been identified. The 
district director will issue a compensation order after a claim has been 
filed and entitlement of the survivors has been verified. Since the 
employer remains a party in interest to the claim, a compensation order 
will not be issued without the agreement of the employer.
    (b) Application: Time for filing. (1) A request for section 8(f) 
relief should be made as soon as the permanency of the claimant's 
condition becomes known or is an issue in dispute. This could be when 
benefits are first paid for permanent disability, or at an informal 
conference held to discuss the permanency of the claimant's condition. 
Where the claim is for death benefits, the request should be made as 
soon as possible after the date of death. Along with the request for 
section 8(f) relief, the applicant must also submit all the supporting 
documentation required by this section, described in paragraph (a), of 
this section. Where possible, this documentation should accompany the 
request, but may be submitted separately, in which case the district 
director shall, at the time of the request, fix a date for submission of 
the fully documented application. The date shall be fixed as follows:
    (i) Where notice is given to all parties that permanency shall be an 
issue at an informal conference, the fully documented application must 
be submitted at or before the conference. For these purposes, notice 
shall mean when the issues of permanency is noted on the form LS-141, 
Notice of Informal Conference. All parties are required to list issue 
reasonably anticipated to be discussed at the conference when the 
initial request for a conference is made and to notify all parties of 
additional issues which arise during the period before the conference is 
actually held.
    (ii) Where the issue of permanency is first raised at the informal 
conference and could not have reasonably been anticipated by the parties 
prior to the conference, the district director shall adjourn the 
conference and establish the date by which the fully documented 
application must be submitted and so notify the employer/carrier. The 
date shall be set by the district director after reviewing the 
circumstances of the case.
    (2) At the request of the employer or insurance carrier, and for 
good cause, the district director, at his/her discretion, may grant an 
extension of the date for submission of the fully documented 
application. In fixing the date for submission of the application under 
circumstances other than described above or in considering any request 
for an extension of the date for submitting the application, the 
district director shall consider all the circumstances of the case, 
including but not limited to: Whether the claimant is being paid 
compensation and the hardship to the claimant of delaying referral of 
the case to the Office of Administrative Law Judges (OALJ); the 
complexity of the issues and the availability of medical and other 
evidence to the employer; the length of time the employer was or should 
have been aware that permanency is an issue; and, the reasons listed in 
support of the request. If the employer/carrier requested a specific 
date, the reasons for selection of that date will also be considered. 
Neither the date selected for submission of the fully documented 
application nor any extension therefrom can go beyond the date the case 
is referred to the OALJ for formal hearing.
    (3) Where the claimant's condition has not reached maximum medical 
improvement and no claim for permanency is raised by the date the case 
is referred to the OALJ, an application need not be submitted to the 
district director to preserve the employer's right to later seek relief 
under section 8(f) of the Act. In all other cases, failure to submit a 
fully documented application by the date established by the district 
director shall be an absolute defense to the liability of the special 
fund. This defense is an affirmative defense which must be raised and 
pleaded by the Director. The absolute defense will not be raised where 
permanency was not an issue before the district director. In all other 
cases, where permanency has been raised, the failure of an employer to 
submit a timely and fully documented application for section 8(f)

[[Page 214]]

relief shall not prevent the district director, at his/her discretion, 
from considering the claim for compensation and transmitting the case 
for formal hearing. The failure of an employer to present a timely and 
fully documented application for section 8(f) relief may be excused only 
where the employer could not have reasonably anticipated the liability 
of the special fund prior to the consideration of the claim by the 
district director. Relief under section 8(f) is not available to an 
employer who fails to comply with section 32(a) of the Act, 33 U.S.C. 
932(a).
    (c) Application: Approval, disapproval. If all the evidence required 
by paragraph (a) was submitted with the application for section 8(f) 
relief and the facts warrant relief under this section, the district 
director shall award such relief after concurrence by the Associate 
Director, DLHWC, or his or her designee. If the district director or the 
Associate Director or his or her designee finds that the facts do not 
warrant relief under section 8(f) the district director shall advise the 
employer of the grounds for the denial. The application for section 8(f) 
relief may then be considered by an administrative law judge. When a 
case is transmitted to the Office of Administrative Law Judges the 
district director shall also attach a copy of the application for 
section 8(f) relief submitted by the employer, and notwithstanding Sec.
702.317(c), the district director's denial of the application.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[51 FR 4285, Feb. 3, 1986]

                             Formal Hearings



Sec.702.331  Formal hearings; procedure initiating.

    Formal hearings are initiated by transmitting to the Office of the 
Chief Administrative Law Judge the pre-hearing statement forms, the 
available evidence which the parties intend to submit at the formal 
hearing, and the letter of transmittal from the district director as 
provided in Sec.702.316 and Sec.702.317.

[42 FR 42552, Aug. 23, 1977]



Sec.702.332  Formal hearings; how conducted.

    Formal hearings shall be conducted by the administrative law judge 
assigned the case by the Office of the Chief Administrative Law Judge in 
accordance with the provisions of the Administrative Procedure Act, 5 
U.S.C. 554 et seq. All hearings shall be transcribed.



Sec.702.333  Formal hearings; parties.

    (a) The necessary parties for a formal hearing are the claimant and 
the employer or insurance carrier, and the administrative law judge 
assigned the case.
    (b) The Solicitor of Labor or his designee may appear and 
participate in any formal hearing held pursuant to these regulations on 
behalf of the Director as an interested party.



Sec.702.334  Formal hearings; representatives of parties.

    The claimant and the employer or carrier may be represented by 
persons of their choice.



Sec.702.335  Formal hearings; notice.

    On a form prescribed for this purpose, the Office of the Chief 
Administrative Law Judge shall notify the parties (See Sec.702.333) of 
the place and time of the formal hearing not less than 30 days in 
advance thereof.

[42 FR 42552, Aug. 23, 1977]



Sec.702.336  Formal hearings; new issues.

    (a) If, during the course of the formal hearing, the evidence 
presented warrants consideration of an issue or issues not previously 
considered, the hearing may be expanded to include the new issue. If in 
the opinion of the administrative law judge the new issue requires 
additional time for preparation, the parties shall be given a reasonable 
time within which to prepare for it. If the new issue arises from 
evidence that has not been considered by the district director, and such 
evidence is likely to resolve the case without the need for a formal 
hearing, the administrative law judge may remand the case to the 
district director for his or her evaluation and recommendation pursuant 
to, Sec.702.316.

[[Page 215]]

    (b) At any time prior to the filing of the compensation order in the 
case, the administrative law judge may in his discretion, upon the 
application of a party or upon his own motion, give notice that he will 
consider any new issue. The parties shall be given not less than 10 
days' notice of the hearing on such new issue. The parties may stipulate 
that the issue may be heard at an earlier time and shall proceed to a 
hearing on the new issue in the same manner as on an issue initially 
considered.

[38 FR 26861, Sept. 26, 1973, as amended at 42 FR 42552, Aug. 23, 1977]



Sec.702.337  Formal hearings; change of time or place for hearings; 

postponements.

    (a) Except for good cause shown, hearings shall be held at 
convenient locations not more than 75 miles from the claimant's 
residence.
    (b) Once a formal hearing has been scheduled, continuances shall not 
be granted except in cases of extreme hardship or where attendance of a 
party or his or her representative is mandated at a previously scheduled 
judicial proceeding. Unless the ground for the request arises 
thereafter, requests for continuances must be received by the Chief 
Administrative Law Judge at least 10 days before the scheduled hearing 
date, must be served upon the other parties and must specify the extreme 
hardship or previously scheduled judicial proceeding claimed.
    (c) The Chief Administrative Law Judge or the administrative law 
judge assigned to the case may change the time and place of the hearing, 
or temporarily adjourn a hearing, on his own motion or for good cause 
shown by a party. The parties shall be given not less than 10 days' 
notice of the new time and place of the hearing, unless they agree to 
such change without notice.

[42 FR 42552, Aug. 23, 1977]



Sec.702.338  Formal hearings; general procedures.

    All hearings shall be attended by the parties or their 
representatives and such other persons as the administrative law judge 
deems necessary and proper. The administrative law judge shall inquire 
fully into the matters at issue and shall receive in evidence the 
testimony of witnesses and any documents which are relevant and material 
to such matters. If the administrative law judge believes that there is 
relevant and material evidence available which has not been presented at 
the hearing, he may adjourn the hearing or, at any time, prior to the 
filing of the compensation order, reopen the hearing for the receipt of 
such evidence. The order in which evidence and allegations shall be 
presented and the procedures at the hearings generally, except as these 
regulations otherwise expressly provide, shall be in the discretion of 
the administrative law judge and of such nature as to afford the parties 
a reasonable opportunity for a fair hearing.



Sec.702.339  Formal hearings; evidence.

    In making an investigation or inquiry or conducting a hearing, the 
administrative law judge shall not be bound by common law or statutory 
rules of evidence or by technical or formal rules of procedure, except 
as provided by 5 U.S.C. 554 and these regulations; but may make such 
investigation or inquiry or conduct such hearing in such a manner as to 
best ascertain the rights of the parties.



Sec.702.340  Formal hearings; witnesses.

    (a) Witnesses at the hearing shall testify under oath or 
affirmation. The administrative law judge may examine the witnesses and 
shall allow the parties or their representatives to do so.
    (b) No person shall be required to attend as a witness in any 
proceeding before an administrative law judge at a place more than 100 
miles from his place of residence, unless his lawful mileage and fees 
for one day's attendance shall be paid or tendered to him in advance of 
the hearing date.



Sec.702.341  Formal hearings; depositions; interrogatories.

    The testimony of any witness, including any party represented by 
counsel, may be taken by deposition or interrogatory according to the 
Federal Rules of Civil Procedure as supplemented by local rules of 
practice for

[[Page 216]]

the Federal district court for the judicial district in which the case 
is pending. However, such depositions or interrogatories must be 
completed within reasonable times to be fixed by the Chief 
Administrative Law Judge or the administrative law judge assigned to the 
case.

[42 FR 42552, Aug. 23, 1977]



Sec.702.342  Formal hearings; witness fees.

    Witnesses summoned in a formal hearing before an administrative law 
judge or whose depositions are taken shall receive the same fees and 
mileage as witnesses in courts of the United States (33 U.S.C. 925).



Sec.702.343  Formal hearings; oral argument and written allegations.

    Any party upon request shall be allowed a reasonable time for 
presentation of oral argument and shall be permitted to file a pre-
hearing brief or other written statement of fact or law. A copy of any 
such pre-hearing brief or other written statement shall be filed with 
the Chief Administrative Law Judge or the administrative law judge 
assigned to the case before or during the proceeding at which evidence 
is submitted to the administrative law judge and shall be served upon 
each other party. Post-hearing briefs will not be permitted except at 
the request of the administrative law judge or upon averment on the 
record of a party that the case presents a specific novel or difficult 
legal or factual issue (or issues) that cannot be adequately addressed 
in oral summation. When permitted, any such brief shall be limited to 
the issue or issues specified by the administrative law judge or by the 
party in his or her averment and shall be due from any party desiring to 
address such issue or issues within 15 days of the conclusion of the 
proceeding at which evidence is submitted to the administrative law 
judge. Enlargement of the time for filing such briefs shall be granted 
only if the administrative law judge is persuaded that the brief will be 
helpful to him or her and that the enlargement granted will not delay 
decision of the case.

[42 FR 42552, Aug. 23, 1977]



Sec.702.344  Formal hearings; record of hearing.

    All formal hearings shall be open to the public and shall be 
stenographically reported. All evidence upon which the administrative 
law judge relies for his final decision shall be contained in the 
transcript of testimony either directly or by appropriate reference. All 
medical reports, exhibits, and any other pertinent document or record, 
in whole or in material part, shall be incorporated into the record 
either by reference or as an appendix.



Sec.702.345  Formal hearings; consolidated issues; consolidated cases.

    (a) When one or more additional issues are raised by the 
administrative law judge pursuant to Sec.702.336, such issues may, in 
the discretion of the administrative law judge, be consolidated for 
hearing and decision with other issues pending before him.
    (b) When two or more cases are transferred for formal hearings and 
have common questions of law or which arose out of a common accident, 
the Chief Administrative Law Judge may consolidate such cases for 
hearing.



Sec.702.346  Formal hearings; waiver of right to appear.

    If all parties waive their right to appear before the administrative 
law judge or to present evidence or argument personally or by 
representative, it shall not be necessary for the administrative law 
judge to give notice of and conduct an oral hearing. A waiver of the 
right to appear and present evidence and allegations as to facts and law 
shall be made in writing and filed with the Chief Administrative Law 
Judge or the administrative law judge. Where such a waiver has been 
filed by all parties, and they do not appear before the administrative 
law judge personally or by representative, the administrative law judge 
shall make a record of the relevant written evidence submitted by the 
parties, together with any pleadings they may submit with respect to the 
issues in the case. Such documents shall be considered as all of the 
evidence in the case and the decision shall be based on them.

[[Page 217]]



Sec.702.347  Formal hearings; termination.

    (a) Formal hearings are normally terminated upon the conclusion of 
the proceeding at which evidence is submitted to the administrative law 
judge.
    (b) In exceptional cases the Chief Administrative Law Judge or the 
administrative law judge assigned to the case may, in his or her 
discretion, extend the time for official termination of the hearing.

[42 FR 42552, Aug. 23, 1977]



Sec.702.348  Formal hearings; preparation of final decision and order; 

content.

    Within 20 days after the official termination of the hearing as 
defined by Sec.702.347, the administrative law judge shall have 
prepared a final decision and order, in the form of a compensation 
order, with respect to the claim, making an award to the claimant or 
rejecting the claim. The compensation order shall contain appropriate 
findings of facts and conclusions of law with respect thereto, and shall 
be concluded with one or more paragraphs containing the order of the 
administrative law judge, his signature, and the date of issuance.



Sec.702.349  Formal hearings; filing and mailing of compensation orders; 

disposition of transcripts.

    The administrative law judge shall, within 20 days after the 
official termination of the hearing, deliver by mail, or otherwise, to 
the office of the district director having original jurisdiction, the 
transcript of the hearing, other documents or pleadings filed with him 
with respect to the claim, together with his signed compensation order. 
Upon receipt thereof, the district director, being the official 
custodian of all records with respect to such claims within his 
jurisdiction, shall formally date and file the transcript, pleadings, 
and compensation order (original) in his office. Such filing shall be 
accomplished by the close of business on the next succeeding working 
day, and the district director shall, on the same day as the filing was 
accomplished, send by certified mail a copy of the compensation order to 
the parties and to representatives of the parties, if any. Appended to 
each such copy shall be a paragraph entitled ``proof of service'' 
containing the certification of the district director that the copies 
were mailed on the date stated, to each of the parties and their 
representatives, as shown in such paragraph.



Sec.702.350  Finality of compensation orders.

    Compensation orders shall become effective when filed in the office 
of the district director, and unless proceedings for suspension or 
setting aside of such orders are instituted within 30 days of such 
filing, shall become final at the expiration of the 30th day after such 
filing, as provided in section 21 of the Act 33 U.S.C. 921. If any 
compensation payable under the terms of such order is not paid within 10 
days after it becomes due, section 14(f) of the Act requires that there 
be added to such unpaid compensation an amount equal to 20 percent 
thereof which shall be paid at the same time as, but in addition to, 
such compensation unless review of the compensation order is had as 
provided in such section 21 and an order staying payment has been issued 
by the Benefits Review Board or the reviewing court.



Sec.702.351  Withdrawal of controversion of issues set for formal hearing; 

effect.

    Whenever a party withdraws his controversion of the issues set for a 
formal hearing, the administrative law judge shall halt the proceedings 
upon receipt from said party of a signed statement to that effect and 
forthwith notify the district director who shall then proceed to dispose 
of the case as provided for in Sec.702.315.

     Interlocutory Matters, Supplementary Orders, and Modifications



Sec.702.371  Interlocutory matters.

    Compensation orders shall not be made or filed with respect to 
interlocutory matters of a procedural nature arising during the pendency 
of a compensation case.

[[Page 218]]



Sec.702.372  Supplementary compensation orders.

    (a) In any case in which the employer or insurance carrier is in 
default in the payment of compensation due under any award of 
compensation, for a period of 30 days after the compensation is due and 
payable, the person to whom such compensation is payable may, within 1 
year after such default, apply in writing to the district director for a 
supplementary compensation order declaring the amount of the default. 
Upon receipt of such application, the district director shall institute 
proceedings with respect to such application as if such application were 
an original claim for compensation, and the matter shall be disposed of 
as provided for in Sec.702.315, or if agreement on the issue is not 
reached, then as in Sec.702.316 et seq.
    (b) If, after disposition of the application as provided for in 
paragraph (a) of this section, a supplementary compensation order is 
entered declaring the amount of the default, which amount may be the 
whole of the award notwithstanding that only one or more installments is 
in default, a copy of such supplementary order shall be forthwith sent 
by certified mail to each of the parties and their representatives. 
Thereafter, the applicant may obtain and file with the clerk of the 
Federal district court for the judicial district where the injury 
occurred or the district in which the employed has his principal place 
of business or maintains an office, a certified copy of said order and 
may seek enforcement thereof as provided for by section 18 of the Act, 
33 U.S.C. 918.



Sec.702.373  Modification of awards.

    (a) Upon his/her own initiative, or upon application of any party in 
interest (including an employer or carrier which has been granted relief 
under section 8(f) of the Act, 33 U.S.C. 908(f)), the district director 
may review any compensation case (including a case under which payments 
are made pursuant to section 44(i) of the Act, 33 U.S.C. 944(i)) in 
accordance with the procedure in subpart C of this part, and after such 
review of the case under Sec.702.315, or review at formal hearings 
under the regulations governing formal hearings in subpart C of this 
part, file a new compensation order terminating, continuing, 
reinstating, increasing or decreasing such compensation, or awarding 
compensation. Such new order shall not affect any compensation 
previously paid, except that an award increasing the compensation rate 
may be made retroactive from the date of injury, and if any part of the 
compensation due or to become due is unpaid, an award decreasing the 
compensation rate may be made effective from the date of the injury, and 
any payment made prior thereto in excess of such decreased rate shall be 
deducted from any unpaid compensation, in such manner and by such method 
as may be determined by the district director or the administrative law 
judge. Settlements cannot be modified.
    (b) Review of a compensation case under this section may be made at 
any time prior to 1 year after the date of the last payment of 
compensation, whether or not a compensation order has been issued, or at 
any time prior to 1 year after the rejection of a claim.
    (c) Review of a compensation case may be had only for the reason 
that there is a change in conditions or that there was a mistake in the 
determination of facts.
    (d) If the investigation, described in Sec.702.148(c), discloses a 
change in conditions and the employer or insurance carrier intends to 
pursue modification of the award of compensation the district director 
and claimant shall be notified through an informal conference. At the 
conclusion of the informal conference the district director shall issue 
a recommendation either for or against the modification. This 
recommendation shall also be sent to the Associate Director, Division of 
Longshoremen's and Harbor Workers' Compensation (DLHWC) for a 
determination on whether or not to participate in the modification 
proceeding on behalf of the special fund. Lack of concurrence of the 
Associate Director, DLHWC or lack of participation by a representative 
of the special fund shall not be a bar to the modification proceeding.

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 401, Jan. 3, 1985]

[[Page 219]]

                                 Appeals



Sec.702.391  Appeals; where.

    Appeals may be taken to the Benefits Review Board, U.S. Department 
of Labor, Washington, D.C. 20210, by filing a notice of appeals with the 
office of the district director for the compensation district in which 
the decision or order appealed from was filed and by submitting to the 
Board a petition for review of such decision or order, in accordance 
with the provisions of part 802 of this title 20.



Sec.702.392  Appeals; what may be appealed.

    An appeal raising a substantial question of law or fact may be taken 
from a decision with respect to a claim under the Act. Such appeals may 
be taken from compensation orders when they have been filed as provided 
for in Sec.702.349.



Sec.702.393  Appeals; time limitations.

    The notice of appeal (see Sec.702.391) shall be filed with the 
district director within 30 days of the filing of the decision or order 
complained of, as defined and described in Sec. Sec.802.205 and 
802.206 of this title. A petition for review of the decision or order is 
required to be filed within 30 days after receipt of the Board's 
acknowledgment of the notice of appeal, as provided in Sec.802.210 of 
this title.



Sec.702.394  Appeals; procedure.

    The procedure for appeals to the Benefits Review Board shall be as 
provided by the Board in its Rules of Practice and Procedure, set forth 
in part 802 of this title.



                 Subpart D_Medical Care and Supervision



Sec.702.401  Medical care defined.

    (a) Medical care shall include medical, surgical, and other 
attendance or treatment, nursing and hospital services, laboratory, X-
ray and other technical services, medicines, crutches, or other 
apparatus and prosthetic devices, and any other medical service or 
supply, including the reasonable and necessary cost of travel incident 
thereto, which is recognized as appropriate by the medical profession 
for the care and treatment of the injury or disease.
    (b) An employee may rely on treatment by prayer or spiritual means 
alone, in accordance with the tenets and practice of a recognized church 
or religious denomination, by an accredited practitioner of such 
recognized church or religious denomination, and nursing services 
rendered in accordance with such tenets and practice without loss or 
diminution of compensation or benefits under the Act. For purposes of 
this section, a recognized church or religious denomination shall be any 
religious organization: (1) That is recognized by the Social Security 
Administration for purposes of reimbursements for treatment under 
Medicare and Medicaid or (2) that is recognized by the Internal Revenue 
Service for purposes of tax exempt status.

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 402, Jan. 3, 1985]



Sec.702.402  Employer's duty to furnish; duration.

    It is the duty of the employer to furnish appropriate medical care 
(as defined in Sec.702.401(a)) for the employee's injury, and for such 
period as the nature of the injury or the process of recovery may 
require.

[50 FR 402, Jan. 3, 1985]



Sec.702.403  Employee's right to choose physician; limitations.

    The employee shall have the right to choose his/her attending 
physician from among those authorized by the Director, OWCP, to furnish 
such care and treatment, except those physicians included on the 
Secretary's list of debarred physicians. In determining the choice of a 
physician, consideration must be given to availability, the employee's 
condition and the method and means of transportation. Generally 25 miles 
from the place of injury, or the employee's home is a reasonable 
distance to travel, but other pertinent factors must also be taken into 
consideration.

[50 FR 402, Jan. 3, 1985]

[[Page 220]]



Sec.702.404  Physician defined.

    The term physician includes doctors of medicine (MD), surgeons, 
podiatrists, dentists, clinical psychologists, optometrists, 
chiropractors, and osteopathic practitioners within the scope of their 
practice as defined by State law. The term includes chiropractors only 
to the extent that their reimbursable services are limited to treatment 
consisting of manual manipulation of the spine to correct a subluxation 
shown by X-ray or clinical findings. Physicians defined in this part may 
interpret their own X-rays. All physicians in these categories are 
authorized by the Director to render medical care under the Act. 
Naturopaths, faith healers, and other practitioners of the healing arts 
which are not listed herein are not included within the term 
``physician'' as used in this part.

[42 FR 45303, Sept. 9, 1977]



Sec.702.405  Selection of physician; emergencies.

    Whenever the nature of the injury is such that immediate medical 
care is required and the injured employee is unable to select a 
physician, the employer shall select a physician. Thereafter the 
employee may change physicians when he is able to make a selection. Such 
changes shall be made upon obtaining written authorization from the 
employer or, if consent is withheld, from the district director. The 
Director will direct reimbursement of medical claims for services 
rendered by physicians or health care providers who are on the list of 
those excluded from providing care under the Act, if such services were 
rendered in an emergency. (See Sec. Sec.702.417 and 702.435(b)).

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 402, Jan. 3, 1985]



Sec.702.406  Change of physicians; non-emergencies.

    (a) Whenever the employee has made his initial, free choice of an 
attending physician, he may not thereafter change physicians without the 
prior written consent of the employer (or carrier) or the district 
director. Such consent shall be given in cases where an employee's 
initial choice was not of a specialist whose services are necessary for, 
and appropriate to, the proper care and treatment of the compensable 
injury or disease. In all other cases, consent may be given upon a 
showing of good cause for change.
    (b) The district director for the appropriate compensation district 
may order a change of physicians or hospitals when such a change is 
found to be necessary or desirable or where the fees charged exceed 
those prevailing within the community for the same or similar services 
or exceed the provider's customary charges.

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 402, Jan. 3, 1985]



Sec.702.407  Supervision of medical care.

    The Director, OWCP, through the district directors and their 
designees, shall actively supervise the medical care of an injured 
employee covered by the Act. Such supervision shall include:
    (a) The requirement that periodic reports on the medical care being 
rendered be filed in the office of the district director, the frequency 
thereof being determined by order of the district director or sound 
judgment of the attending physician as the nature of the injury may 
dictate;
    (b) The determination of the necessity, character and sufficiency of 
any medical care furnished or to be furnished the employee, including 
whether the charges made by any medical care provider exceed those 
permitted under the Act;
    (c) The determination of whether a change of physicians, hospitals 
or other persons or locales providing treatment should be made or is 
necessary;
    (d) The further evaluation of medical questions arising in any case 
under the Act, with respect to the nature and extent of the covered 
injury, and the medical care required therefor.

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 402, Jan. 3, 1985]



Sec.702.408  Evaluation of medical questions; impartial specialists.

    In any case in which medical questions arise with respect to the 
appropriate diagnosis, extent, effect of, appropriate treatment, and the 
duration

[[Page 221]]

of any such care or treatment, for an injury covered by the Act, the 
Director, OWCP, through the district directors having jurisdiction, 
shall have the power to evaluate such questions by appointing one or 
more especially qualified physicians to examine the employee, or in the 
case of death to make such inquiry as may be appropriate to the facts 
and circumstances of the case. The physician or physicians, including 
appropriate consultants, should report their findings with respect to 
the questions raised as expeditiously as possible. Upon receipt of such 
report, action appropriate therewith shall be taken.



Sec.702.409  Evaluation of medical questions; results disputed.

    Any party who is dissatisfied with such report may request a review 
or reexamination of the employee by one or more different physicians 
employed by or selected by the Director, and such review or 
reexamination shall be granted unless it is found that it is clearly 
unwarranted. Such review shall be completed within 2 weeks from the date 
ordered unless it is impossible to complete the review and render a 
report thereon within such time period. Upon receipt of the report of 
this additional review and reexamination, such action as may be 
appropriate shall forthwith be taken.



Sec.702.410  Duties of employees with respect to special examinations.

    (a) For any special examination required of an employee by 
Sec. Sec.702.408 and 702.409, the employee shall submit to such 
examination at such place as is designated in the order to report, but 
the place so selected shall be reasonably convenient for the employee.
    (b) Where an employee fails to submit to an examination required by 
Sec. Sec.702.408 and 702.409, the district director or administrative 
law judge may order that no compensation otherwise payable shall be paid 
for any period during which the employee refuses to submit to such 
examination unless circumstances justified the refusal.
    (c) Where an employee unreasonably refuses to submit to medical or 
surgical treatment, or to an examination by a physician selected by the 
employer, the district director or administrative law judge may by order 
suspend the payment of further compensation during such time as the 
refusal continues. Except that refusal to submit to medical treatment 
because of adherence to the tenets of a recognized church or religious 
denomination as described in Sec.702.401(b) shall not cause the 
suspension of compensation.

[42 FR 45303, Sept. 9, 1977, as amended at 50 FR 402, Jan. 3, 1985; 51 
FR 4286, Feb. 3, 1986]



Sec.702.411  Special examinations; nature of impartiality of specialists.

    (a) The special examinations required by Sec.702.408 shall be 
accomplished in a manner designed to preclude prejudgment by the 
impartial examiner. No physician previously connected with the case 
shall be present, nor may any other physician selected by the employer, 
carrier, or employee be present. The impartial examiner may be made 
aware, by any party or by the OWCP, of the opinions, reports, or 
conclusions of any prior examining physician with respect to the nature 
and extent of the impairment, its cause, or its effect upon the wage-
earning capacity of the injured employee, if the district director 
determines that, for good cause, such opinions, reports, or conclusions 
shall be made available. Upon request, any party shall be given a copy 
of all materials made available to the impartial examiner.
    (b) The impartiality of the specialists shall not be considered to 
have been compromised if the district director deems it advisable to, 
and does, apprise the specialist by memorandum of those undisputed facts 
pertaining to the nature of the employee's employment, of the nature of 
the injury, of the post-injury employment activity, if any, and of any 
other facts which are not disputed and are deemed pertinent to the type 
of injury and/or the type of examination being conducted.
    (c) No physician selected to perform impartial examinations shall 
be, or shall have been for a period of 2 years prior to the examination, 
an employee of an insurance carrier or self-insured employer, or who has 
accepted or participated in any fee from an insurance

[[Page 222]]

carrier or self-insured employer, unless the parties in interest agree 
thereto.

[38 FR 26861, Sept. 26, 1973, as amended at 42 FR 45303, Sept. 9, 1977]



Sec.702.412  Special examinations; costs chargeable to employer or carrier.

    (a) The Director or his designee ordering the special examination 
shall have the power, in the exercise of his discretion, to charge the 
cost of the examination or review to the employer, to the insurance 
carrier, or to the special fund established by section 44 of the Act, 33 
U.S.C. 944.
    (b) The Director or his designee may also order the employer or the 
insurance carrier to provide the employee with the services of an 
attendant, where the district director considers such services 
necessary, because the employee is totally blind, has lost the use of 
both hands, or both feet or is paralyzed and unable to walk, or because 
of other disability making the employee so helpless as to require 
constant attendance in the discretion of the district director. Fees 
payable for such services shall be in accord with the provisions of 
Sec.702.413.

[42 FR 45303, Sept. 9, 1977]



Sec.702.413  Fees for medical services; prevailing community charges.

    All fees charged by medical care providers for persons covered by 
this Act shall be limited to such charges for the same or similar care 
(including supplies) as prevails in the community in which the medical 
care provider is located and shall not exceed the customary charges of 
the medical care provider for the same or similar services. Where a 
dispute arises concerning the amount of a medical bill, the Director 
shall determine the prevailing community rate using the OWCP Medical Fee 
Schedule (as described in 20 CFR 10.805 through 10.810) to the extent 
appropriate, and where not appropriate, may use other state or federal 
fee schedules. The opinion of the Director that a charge by a medical 
care provider disputed under the provisions of section 702.414 exceeds 
the charge which prevails in the community in which said medical care 
provider is located shall constitute sufficient evidence to warrant 
further proceedings pursuant to section 702.414 and to permit the 
Director to direct the claimant to select another medical provider for 
care to the claimant.

[60 FR 51348, Oct. 2, 1995, as amended at 77 FR 37286, June 21, 2012]



Sec.702.414  Fees for medical services; unresolved disputes on prevailing 

charges.

    (a) The Director may, upon written complaint of an interested party, 
or upon the Director's own initiative, investigate any medical care 
provider or any fee for medical treatment, services, or supplies that 
appears to exceed prevailing community charges for similar treatment, 
services or supplies or the provider's customary charges. The OWCP 
medical fee schedule (see section 702.413) shall be used by the 
Director, where appropriate, to determine the prevailing community 
charges for a medical procedure by a physician or hospital (to the 
extent such procedure is covered by the OWCP fee schedule). The 
Director's investigation may initially be conducted informally through 
contact of the medical care provider by the district director. If this 
informal investigation is unsuccessful further proceedings may be 
undertaken. These proceedings may include, but not be limited to: an 
informal conference involving all interested parties; agency 
interrogatories to the pertinent medical care provider; and issuance of 
subpoenas duces tecum for documents having a bearing on the dispute.
    (1) A claim by the provider that the OWCP fee schedule does not 
represent the prevailing community rate will be considered only where 
the following circumstances are presented:
    (i) where the actual procedure performed was incorrectly identified 
by medical procedure code;
    (ii) that the presence of a severe or concomitant medical condition 
made treatment especially difficult;
    (iii) the provider possessed unusual qualifications (board 
certification in a specialty is not sufficient evidence in itself of 
unusual qualifications); or
    (iv) the provider or service is not one covered by the OWCP fee 
schedule as described by 20 CFR 10.805 through 10.810.

[[Page 223]]

    (2) The circumstances listed in paragraph (a)(1) of this section are 
the only ones which will justify reevaluation of the amount calculated 
under the OWCP fee schedule.
    (b) The failure of any medical care provider to present any evidence 
required by the Director pursuant to this section without good cause 
shall not prevent the Director from making findings of fact.
    (c) After any proceeding under this section the Director shall make 
specific findings on whether the fee exceeded the prevailing community 
charges (as established by the OWCP fee schedule, where appropriate) or 
the provider's customary charges and provide notice of these findings to 
the affected parties.
    (d) The Director may suspend any such proceedings if after receipt 
of the written complaint the affected parties agree to withdraw the 
controversy from agency consideration on the basis that such controversy 
has been resolved by the affected parties. Such suspension, however, 
shall be at the discretion of the Director.

[51 FR 4286, Feb. 3, 1986, as amended at 60 FR 51348, Oct. 2, 1995; 77 
FR 37286, June 21, 2012]



Sec.702.415  Fees for medical services; unresolved disputes on charges; 

procedure.

    After issuance of specific findings of fact and proposed action by 
the Director as provided in Sec.702.414 any affected provider employer 
or other interested party has the right to seek a hearing pursuant to 
section 556 of title 5, United States Code. Upon written request for 
such a hearing, the matter shall be referred by the District Director to 
the OALJ for formal hearing in accordance with the procedures in subpart 
C of this part. If no such request for a hearing is filed with the 
district director within thirty (30) days the findings issued pursuant 
to Sec.702.414 shall be final.

[51 FR 4286, Feb. 3, 1986]



Sec.702.416  Fees for medical services; disputes; hearings; necessary parties.

    At formal hearings held pursuant to Sec.702.415, the necessary 
parties shall be the person whose fee or cost charge is in question and 
the Director, or their representatives. The employer or carrier may also 
be represented, and other parties, or associations having an interest in 
the proceedings, may be heard, in the discretion of the administrative 
law judge.



Sec.702.417  Fees for medical services; disputes; effect of adverse decision.

    If the final decision and order upholds the finding of the Director 
that the fee or charge in dispute was not in accordance with prevailing 
community charges or the provider's customary charges, the person 
claiming such fee or cost charge shall be given thirty (30) days after 
filing of such decision and order to make the necessary adjustment. If 
such person still refuses to make the required readjustment, such person 
shall not be authorized to conduct any further treatments or 
examinations (if a physician) or to provide any other services or 
supplies (if by other than a physician). Any fee or cost charge 
subsequently incurred for services performed or supplies furnished shall 
not be a reimbursable medical expense under this subpart. This 
prohibition shall apply notwithstanding the fact that the services 
performed or supplies furnished were in all other respects necessary and 
appropriate within the provision of these regulations. However, the 
Director may direct reimbursement of medical claims for services 
rendered if such services were rendered in an emergency (see Sec.
702.435(b)). At the termination of the proceedings provided for in this 
section the district director shall determine whether further 
proceedings under Sec.702.432 should be initiated.

[50 FR 403, Jan. 3, 1985]

                           Medical Procedures



Sec.702.418  Procedure for requesting medical care; employee's duty to notify 

employer.

    (a) As soon as practicable, but within 30 days after occurrence of 
an injury covered by the Act, or within 30 days after an employee 
becomes aware, or in the exercise of reasonable diligence should be 
aware, of the relationship between an injury or disease and his 
employment, the injured employee or

[[Page 224]]

someone on his behalf shall give written notice thereof to the district 
director having jurisdiction over the place where the injury occurred 
and to the employer. If a form has been prescribed for such purpose it 
shall be used, if available and practicable under the circumstances. 
Notices filed under subpart B of this part, if on the form prescribed by 
the Director for such purpose, satisfy the written notice requirements 
of this subpart.
    (b) In the case of an occupational disease which does not 
immediately result in a disability or death, such notice shall be given 
within one year after the employee becomes aware, or in the exercise of 
reasonable diligence or by reason of medical advice should have been 
aware, of the relationship between the employment, the disease, and the 
death or disability. Notice shall be given: (1) To the district director 
in the compensation district in which the injury or death occurred, and 
(2) to the employer.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 403, Jan. 3, 1985]



Sec.702.419  Action by employer upon acquiring knowledge or being given notice 

of injury.

    Whenever an employer acquires knowledge of an employee's injury, 
through receipt of a written notice or otherwise, said employer shall 
forthwith authorize, in writing, appropriate medical care. If a form is 
prescribed for this purpose it shall be used whenever practicable. 
Authorization shall also be given in cases where an employee's initial 
choice was not of a specialist whose services are necessary for and 
appropriate to the proper care and treatment of the compensable injury 
or disease. In all other cases, consent may be given upon a showing of 
good cause for change.

[50 FR 403, Jan. 3, 1985]



Sec.702.420  Issuance of authorization; binding effect upon insurance carrier.

    The issuance of an authorization for treatment by the employer shall 
bind his insurance carrier to furnish and pay for such care and 
services.



Sec.702.421  Effect of failure to obtain initial authorization.

    An employee shall not be entitled to recover for medical services 
and supplies unless:
    (a) The employer shall have refused or neglected a request to 
furnish such services and the employee has complied with sections 7 (b) 
and (c) of the Act, 33 U.S.C. 907 (b) and (c) and these regulations; or
    (b) The nature of the injury required such treatment and services 
and the employer or his superintendent or foreman having knowledge of 
such injury shall have neglected to provide or authorize same.

[50 FR 403, Jan. 3, 1985]



Sec.702.422  Effect of failure to report on medical care after initial 

authorization.

    (a) Notwithstanding that medical care is properly obtained in 
accordance with these regulations, a finding by the Director that a 
medical care provider has failed to comply with the reporting 
requirements of the Act shall operate as a mandatory revocation of 
authorization of such medical care provider. The effect of a final 
finding to this effect operates to release the employer/carrier from 
liability of the expenses of such care. In addition to this, when such a 
finding is made by the Director, the claimant receiving treatment will 
be directed by the district director to seek authorization for medical 
care from another source.
    (b) For good cause shown, the Director may excuse the failure to 
comply with the reporting requirements of the Act and further, may make 
an award for the reasonable value of such medical care.

[50 FR 403, Jan. 3, 1985]

  Debarment of Physicians and Other Providers of Medical Services and 
                  Suppliers and Claims Representatives



Sec.702.431  Grounds for debarment.

    A physician or health care provider shall be debarred if it is 
found, after appropriate investigation as described in Sec.702.414 and 
proceedings under

[[Page 225]]

Sec. Sec.702.432 and 702.433, that such physician or health care 
provider has:
    (a) Knowingly and willfully made, or caused to be made, any false 
statement or misrepresentation of a material fact for use in a claim for 
compensation or claim for reimbursement of medical expenses under this 
Act;
    (b) Knowingly and willfully submitted, or caused to be submitted, a 
bill or request for payment under this Act containing a charge which the 
Director finds to be substantially in excess of the charge for the 
service, appliance, or supply prevailing within the community or in 
excess of the provider's customary charges, unless the Director finds 
there is good cause for the bill or request containing the charge;
    (c) Knowingly and willfully furnished a service, appliance, or 
supply which is determined by the Director to be substantially in excess 
of the need of the recipient thereof or to be of a quality which 
substantially fails to meet professionally recognized standards;
    (d) Been convicted under any criminal statute, without regard to 
pending appeal thereof, for fraudulent activities in connection with 
federal or state program for which payments are made to physicians or 
providers of similar services, appliances, or supplies; or has otherwise 
been excluded from participation in such program.
    (e) The fact that a physician or health care provider has been 
convicted of a crime previously described in (d), or excluded or 
suspended, or has resigned in lieu of exclusion or suspension, from 
participation in any program as described in (d), shall be a prima facie 
finding of fact for purposes of section 7(j)(2) of the Act, 33 U.S.C. 
907(j)(2).

[50 FR 404, Jan. 3, 1985]



Sec.702.432  Debarment process.

    (a) Pertaining to health care providers. Upon receipt of information 
indicating that a physician or health care provider has engaged in 
activities enumerated in subparagraphs (a) through (c) of Sec.702.431, 
the Director, through the Director's designees, may evaluate the 
information (as described in Sec.702.414) to ascertain whether 
proceedings should be initiated against the physician or health care 
provider to remove authorization to render medical care or service under 
the Longshore and Harbor Workers' Compensation Act.
    (b) Pertaining to health care providers and claims representatives. 
If after appropriate investigation the Director determines that 
proceedings should be initiated, written notice thereof sent certified 
mail, return receipt requested, shall be provided to the physician, 
health care provider or claims representative containing the following:
    (1) A concise statement of the grounds upon which debarment will be 
based;
    (2) A summary of the information upon which the director has relied 
in reaching an initial decision that debarment proceedings should be 
initiated;
    (3) An invitation to the physician, health care provider or claims 
representative to: (i) Resign voluntarily from participation in the 
program without admitting or denying the allegations presented in the 
written notice; or (ii) request a decision on debarment to be based upon 
the existing agency record and any other information the physician, 
health care provider or claims representative may wish to provide;
    (4) A notice of the physician's, health care provider's or claims 
representative's right, in the event of an adverse ruling by the 
Director, to request a formal hearing before an administrative law 
judge;
    (5) A notice that should the physician, health care provider or 
claims representative fail to provide written answer to the written 
notice described in this section within thirty (30) days of receipt, the 
Director may deem the allegations made therein to be true and may order 
exclusion of the physician, health care provider or claims 
representative without conducting any further proceedings; and
    (6) The name and address of the district director who shall be 
responsible for receiving the answer from the physician, health care 
provider or claims representative.
    (c) Should the physician, health care provider or claims 
representative fail to file a written answer to the notice described in 
this section within thirty

[[Page 226]]

(30) days of receipt thereof, the Director may deem the allegations made 
therein to be true and may order debarment of the physician, health care 
provider or claims representative.
    (d) The physician, health care provider or claims representative may 
inspect or request copies of information in the agency records at any 
time prior to the Director's decision.
    (e) The Director shall issue a decision in writing, and shall send a 
copy of the decision to the physician, health care provider or claims 
representative by certified mail, return receipt requested. The decision 
shall advise the physician, health care provider or claims 
representative of the right to request, within thirty (30) days of the 
date of an adverse decision, a formal hearing before an administrative 
law judge under the procedures set forth herein. The filing of such a 
request for hearing within the time specified shall operate to stay the 
effectiveness of the decision to debar.

[50 FR 404, Jan. 3, 1985]



Sec.702.433  Requests for hearing.

    (a) A request for hearing shall be sent to the district director and 
contain a concise notice of the issues on which the physician, health 
care provider or claims representative desires to give evidence at the 
hearing with identification of witnesses and documents to be submitted 
at the hearing.
    (b) If a request for hearing is timely received by the district 
director, the matter shall be referred to the Chief Administrative Law 
Judge who shall assign it for hearing with the assigned administrative 
law judge issuing a notice of hearing for the conduct of the hearing. A 
copy of the hearing notice shall be served on the physician, health care 
provider or claims representative by certified mail, return receipt 
requested.
    (c) If a request for hearing contains identification of witnesses or 
documents not previously considered by the Director, the Director may 
make application to the assigned administrative law judge for an offer 
of proof from the physician, health care provider or claims 
representative for the purpose of discovery prior to hearing. If the 
offer of proof indicates injection of new issues or new material 
evidence not previously considered by the Director, the Director may 
request a remand order for purposes of reconsideration of the decision 
made pursuant to Sec.702.432 of these regulations.
    (d) The parties may make application for the issuance of subpoenas 
upon a showing of good cause therefore to the administrative law judge.
    (e) The administrative law judge shall issue a recommended decision 
after the termination of the hearing. The recommended decision shall 
contain appropriate findings, conclusions and a recommended order and be 
forwarded, together with the record of the hearing, to the 
Administrative Review Board for a final decision. The recommended 
decision shall be served upon all parties to the proceeding.
    (f) Based upon a review of the record and the recommended decision 
of the administrative law judge, the Administrative Review Board shall 
issue a final decision.

[50 FR 404, Jan. 3, 1985, as amended at 55 FR 28606, July 12, 1990; 61 
FR 19984, May 3, 1996]



Sec.702.434  Judicial review.

    (a) Any physician, health care provider or claims representative, 
after any final decision of the Administrative Review Board made after a 
hearing to which such person was a party, irrespective of the amount of 
controversy, may obtain a review of such decision by a civil action 
commenced within sixty (60) days after the mailing to him or her of 
notice of such decision, but the pendency of such review shall not 
operate as a stay upon the effect of such decision. Such action shall be 
brought in the Court of Appeals of the United States for the judicial 
circuit in which the plaintiff resides or has his or her principal place 
of business, or the Court of Appeals for the District of Columbia 
pursuant to section 7(j)(4) of the Act, 33 U.S.C. 907(j)(4).
    (b) As part of the Administrative Review Board answer, he or she 
shall file a certified copy of the transcript of the record of the 
hearing, including all evidence submitted in connection therewith.

[[Page 227]]

    (c) The findings of fact of the Administrative Review Board, if 
based on substantial evidence in the record as a whole, shall be 
conclusive.

[50 FR 405, Jan. 3, 1985, as amended at 55 FR 28606, July 12, 1990; 61 
FR 19984, May 3, 1996]



Sec.702.435  Effects of debarment.

    (a) The Director shall give notice of the debarment of a physician, 
hospital, or provider of medical support services or supplies to:
    (1) All OWCP district offices;
    (2) The Health Care Financing Administration;
    (3) The State or Local authority responsible for licensing or 
certifying the debarred party;
    (4) The employers and authorized insurers under the Act by means of 
an annual bulletin sent to them by the Director; and
    (5) The general public by posting in the district office in the 
jurisdiction where the debarred party maintains a place of business.

If a claims representative is debarred, the Director shall give notice 
to those groups listed in paragraphs (a) (1), (3), (4), and (5) of this 
section.
    (b) Notwithstanding any debarment under this subpart, the Director 
shall not refuse a claimant reimbursement for any otherwise reimbursable 
medical expense if the treatment, service or supply was rendered by 
debarred provider in an emergency situation. However, such claimant will 
be directed by the Director to select a duly qualified provider upon the 
earliest opportunity.

[50 FR 405, Jan. 3, 1985]



Sec.702.436  Reinstatement.

    (a) If a physician or health care provider has been debarred or 
pursuant to Sec.702.431(d) or if a claims representative has been 
debarred pursuant to Sec.702.131(c) (1) or (3) the person debarred 
will be automatically reinstated upon notice to the Director that the 
conviction or exclusion has been reversed or withdrawn. However, such 
reinstatement will not preclude the Director from instituting debarment 
proceedings based upon the subject matter involved.
    (b) A physician, health care provider or claims representative 
otherwise debarred by the Director may apply for reinstatement to 
participate in the program by application to the Director after three 
years from the date of entry of the order of exclusion. Such application 
for reinstatement shall be addressed to the Associate Director for the 
Longshore program, and shall contain a statement of the basis of the 
application along with any supporting documentation.
    (c) The Director may further investigate the merits of the 
reinstatement application by requiring special reporting procedures from 
the applicant for a probationary period not to exceed six months to be 
monitored by the district office where the provider maintains a place of 
business.
    (d) At the end of aforesaid probationary period, the Director may 
order full reinstatement of the physician, health care provider or 
claims representative if such reinstatement is clearly consistent with 
the program goal to protect itself against fraud and abuse and, further, 
if the physician, health care provider or claims representative has 
given reasonable assurances that the basis for the debarment will not be 
repeated.

[50 FR 405, Jan. 3, 1985]

                           Hearing Loss Claims



Sec.702.441  Claims for loss of hearing.

    (a) Claims for hearing loss pending on or filed after September 28, 
1984 (the date of enactment of Pub. L. 98-426) shall be adjudicated with 
respect to the determination of the degree of hearing impairment in 
accordance with these regulations.
    (b) An audiogram shall be presumptive evidence of the amount of 
hearing loss on the date administered if the following requirements are 
met:
    (1) The audiogram was administered by a licensed or certified 
audiologist, by a physician certified by the American Board of 
Otolaryngology, or by a technician, under an audiologist's or 
physician's supervision, certified by the Council of Accreditation on 
Occupational Hearing Conservation, or by any other person considered 
qualified

[[Page 228]]

by a hearing conservation program authorized pursuant to 29 CFR 
1910.95(g)(3) promulgated under the Occupational Safety and Health Act 
of 1970 (29 U.S.C. 667). Thus, either a professional or trained 
technician may conduct audiometric testing. However, to be acceptable 
under this subsection, a licensed or certified audiologist or 
otolaryngologist, as defined, must ultimately interpret and certify the 
results of the audiogram. The accompanying report must set forth the 
testing standards used and describe the method of evaluating the hearing 
loss as well as providing an evaluation of the reliability of the test 
results.
    (2) The employee was provided the audiogram and a report thereon at 
the time it was administered or within thirty (30) days thereafter.
    (3) No one produces a contrary audiogram of equal probative value 
(meaning one performed using the standards described herein) made at the 
same time. ``Same time'' means within thirty (30) days thereof where 
noise exposure continues or within six (6) months where exposure to 
excessive noise levels does not continue. Audiometric tests performed 
prior to the enactment of Public Law 98-426 will be considered 
presumptively valid if the employer complied with the procedures in this 
section for administering audiograms.
    (c) In determining the amount of pre-employment hearing loss, an 
audiogram must be submitted which was performed prior to employment or 
within thirty (30) days of the date of the first employment-related 
noise exposure. Audiograms performed after December 27, 1984 must comply 
with the standards described in paragraph (d) of this section.
    (d) In determining the loss of hearing under the Act, the evaluators 
shall use the criteria for measuring and calculating hearing impairment 
as published and modified from time-to-time by the American Medical 
Association in the Guides to the Evaluation of Permanent Impairment, 
using the most currently revised edition of this publication. In 
addition, the audiometer used for testing the individual's threshold of 
hearing must be calibrated according to current American National 
Standard Specifications for Audiometers. Audiometer testing procedures 
required by hearing conservation programs pursuant to the Occupational 
Safety and Health Act of 1970 should be followed (as described at 29 CFR 
1910.95 and appendices).

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 405, Jan. 3, 1985]



                   Subpart E_Vocational Rehabilitation



Sec.702.501  Vocational rehabilitation; objective.

    The objective of vocational rehabilitation is the return of 
permanently disabled persons to gainful employment commensurate with 
their physical or mental impairments, or both, through a program of 
reevaluation or redirection of their abilities, or retraining in another 
occupation, or selective job placement assistance.



Sec.702.502  Vocational rehabilitation; action by district directors.

    All injury cases which are likely to result in, or have resulted in, 
permanent disability, and which are of a character likely to require 
review by a vocational rehabilitation adviser on the staff of the 
Director, shall promptly be referred to such adviser by the district 
director or his designee having charge of the case. A form has been 
prescribed for such purpose and shall be used. Medical data and other 
pertinent information shall accompany the referral.

(Approved by the Office of Management and Budget under control number 
1215-0051)

(Pub. L. No. 96-511)

[38 FR 26861, Sept. 26, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec.702.503  Vocational rehabilitation; action by adviser.

    The vocational rehabilitation adviser, upon receipt of the referral, 
shall promptly consider the feasibility of a vocational referral or 
request for cooperative services from available resources or facilities, 
to include counseling, vocational survey, selective job placement 
assistance, and retraining.

[[Page 229]]

Public or private agencies may be utilized in arranging necessary 
vocational rehabilitation services under the Federal Vocational 
Rehabilitation Act, 29 U.S.C. 31 et seq.



Sec.702.504  Vocational rehabilitation; referrals to State Employment 

Agencies.

    Vocational rehabilitation advisers will arrange referral procedures 
with State Employment Service units within their assigned geographical 
districts for the purpose of securing employment counseling, job 
classification, and selective placement assistance. Referrals shall be 
made to State Employment Offices based upon the following:
    (a) Vocational rehabilitation advisers will screen cases so as to 
refer only those disabled employees who are considered to have 
employment potential;
    (b) Only employees will be referred who have permanent, compensable 
disabilities resulting in a significant vocational handicap and loss of 
wage earning capacity;
    (c) Disabled employees, whose initial referral to former private 
employers did not result in a job reassignment or in a job retention, 
shall be referred for employment counseling and/or selective placement 
unless retraining services consideration is requested;
    (d) The vocational rehabilitation advisers shall arrange for 
employees' referrals if it is ascertained that they may benefit from 
registering with the State Employment Service;
    (e) Referrals will be made to appropriate State Employment Offices 
by letter, including all necessary information and a request for a 
report on the services provided the employee when he registers;
    (f) The injured employee shall be advised of available job 
counseling services and informed that he is being referred for 
employment and selective placement;
    (g) A followup shall be made within 60 days on all referrals to 
assure uniform reporting by State agencies on cases referred for a 
vocational survey.



Sec.702.505  Vocational rehabilitation; referrals to other public and private 

agencies.

    Referrals to such other public and private agencies providing 
assistance to disabled persons such as public welfare agencies, Public 
Health Services facilities, social services units of the Veterans 
Administration, the Social Security Administration, and other such 
agencies, shall be made by the vocational rehabilitation adviser, where 
appropriate, on an individual basis when requested by disabled 
employees. Such referrals do not provide for a service cost 
reimbursement by the Department of Labor.



Sec.702.506  Vocational rehabilitation; training.

    Vocational rehabilitation training shall be planned in anticipation 
of a short, realistic, attainable vocational objective terminating in 
remunerable employment, and in restoring wage-earning capacity or 
increasing it materially. The following procedures shall apply in 
arranging for or providing training:
    (a) The vocational rehabilitation adviser shall arrange for and 
develop all vocational training programs.
    (b) Training programs shall be developed to meet the varying needs 
of eligible beneficiaries, and may include courses at colleges, 
technical schools, training at rehabilitation centers, on-the-job 
training, or tutorial courses. The courses shall be pertinent to the 
occupation for which the employee is being trained.
    (c) Training may be terminated if the injured employee fails to 
cooperate with the Department of Labor or with the agency supervising 
his course of training. The employee shall be counseled before training 
is terminated.
    (d) Reports shall be required at periodic intervals on all persons 
in approved training programs.



Sec.702.507  Vocational rehabilitation; maintenance allowance.

    (a) An injured employee who, as a result of injury, is or may be 
expected to be totally or partially incapacitated for a remunerative 
occupation and who, under the direction of the Director is being 
rendered fit to engage in a

[[Page 230]]

remunerative occupation, shall be paid additional compensation necessary 
for this maintenance, not exceeding $25 a week. The expense shall be 
paid out of the special fund established in section 44 of the Act, 33 
U.S.C. 944. The maximum maintenance allowance shall not be provided on 
an automatic basis, but shall be based on the recommendation of a State 
agency that a claimant is unable to meet additional costs by reason of 
being in training.
    (b) When required by reason of personal illness or hardship, limited 
periods of absence from training may be allowed without terminating the 
maintenance allowance. A maintenance allowance shall be terminated when 
it is shown to the satisfaction of the Director that a trainee is not 
complying reasonably with the terms of the training plan or is absenting 
himself without good cause from training so as to materially interfere 
with the accomplishment of the training objective.



Sec.702.508  Vocational rehabilitation; confidentiality of information.

    The following safeguards will be observed to protect the 
confidential character of information released regarding an individual 
undergoing rehabilitation:
    (a) Information will be released to other agencies from which an 
injured employee has requested services only if such agencies have 
established regulations assuring that such information will be 
considered confidential and will be used only for the purpose for which 
it is provided;
    (b) Interested persons and agencies have been advised that any 
information concerning rehabilitation program employees is to be held 
confidential;
    (c) A rehabilitation employee's written consent is secured for 
release of information regarding disability to a person, agency, or 
establishment seeking the information for purposes other than the 
approved rehabilitation planning with such employee.



  Subpart F_Occupational Disease Which Does Not Immediately Result in 

                           Death or Disability

    Source: 50 FR 406, Jan. 3, 1985, unless otherwise noted.



Sec.702.601  Definitions.

    (a) Time of injury. For purposes of this subpart and with respect to 
an occupational disease which does not immediately result in death or 
disability, the time of injury shall be deemed to be the date on which 
the employee or claimant becomes aware, or in the exercise of reasonable 
diligence or by reason of medical advice should have been aware, of the 
relationship between the employment, the disease, and the death or 
disability.
    (b) Disability. With regard to an occupational disease for which the 
time of injury, as defined in Sec.702.601(a), occurs after the 
employee was retired, disability shall mean permanent impairment as 
determined according to the Guides to the Evaluation of Permanent 
Impairment which is prepared and modified from time-to-time by the 
American Medical Association, using the most currently revised edition 
of this publication. If this guide does not evaluate the impairment, 
other professionally recognized standards may be utilized. The 
disability described in this paragraph shall be limited to permanent 
partial disability. For that reason they are not subject to adjustments 
under section 10(f) of the Act, 33 U.S.C. 910(f).
    (c) Retirement. For purposes of this subpart, retirement shall mean 
that the claimant, or decedent in cases involving survivor's benefits, 
has voluntarily withdrawn from the workforce and that there is no 
realistic expectation that such person will return to the workforce.

[50 FR 406, Jan. 3, 1985, as amended at 51 FR 4286, Feb. 3, 1986]



Sec.702.602  Notice and claims.

    (a) Time for giving notice of injury or death. Refer to Sec.
702.207.
    (b) Time for filing of claims. Refer to Sec.702.212.



Sec.702.603  Determining the payrate for compensating occupational disease 

claims which become manifest after retirement.

    (a) If the time of injury occurs within the first year after the 
employee has retired, the payrate for compensation purposes shall be one 
fifty-second part

[[Page 231]]

of the employee's average annual earnings during the fifty-two week 
period preceding retirement.
    (b) If the time of injury occurs more than one year after the 
employee has retired the payrate for compensation purposes shall be the 
national average weekly wage, determined according to section 6(b)(3) of 
the Act, 33 U.S.C. 906(b)(3), at the time of injury.



Sec.702.604  Determining the amount of compensation for occupational disease 

claims which become manifest after retirement.

    (a) If the claim is for disability benefits and the time of injury 
occurs after the employee has retired, compensation shall be 66\2/3\ 
percent of the payrate, as determined under Sec.702.603, times the 
disability, as determined according to Sec.702.601(b).
    (b) If the claim is for death benefits and the time of injury occurs 
after the decedent has retired, compensation shall be the percent 
specified in section 9 of the Act, 33 U.S.C. 909, times the payrate 
determined according to Sec.702.603. Total weekly death benefits shall 
not exceed one fifty-second part of the decedent's average annual 
earnings during the fifty-two week period preceding retirement, such 
benefits shall be subject to the limitation provided for in section 
6(b)(1) of the Act, 33 U.S.C. 906(b)(1).

[50 FR 406, Jan. 3, 1985, as amended at 51 FR 4286, Feb. 3, 1986]



PART 703_INSURANCE REGULATIONS--Table of Contents



                            Subpart A_General

Sec.
703.1 Scope of part.
703.2 Forms.
703.3 Failure to secure coverage; penalties.

              Subpart B_Authorization of Insurance Carriers

703.101 Types of companies which may be authorized by the OWCP.
703.102 Applications for authority to write insurance; how filed; 
          evidence to be submitted; other requirements.
703.103 Stock companies holding Treasury certificates of authority.
703.104 Applicants currently authorized to write insurance under the 
          extensions of the LHWCA.
703.105 Copies of forms of policies to be submitted with application.
703.106 Certificate of authority to write insurance.
703.108 Period of authority to write insurance.
703.109 Longshoremen's endorsement; see succeeding parts for 
          endorsements for extensions.
703.110 Other forms of endorsements and policies.
703.111 Submission of new forms of policies for approval; other 
          endorsements.
703.112 Terms of policies.
703.113 Marine insurance contracts.
703.114 Notice of cancellation.
703.115 Discharge by the carrier of obligations and duties of employer.
703.116 Report by carrier of issuance of policy or endorsement.
703.117 Report; by whom sent.
703.118 Agreement to be bound by report.
703.119 Report by employer operating temporarily in another compensation 
          district.
703.120 Name of one employer only shall be given in each report.

        Subpart C_Insurance Carrier Security Deposit Requirements

703.201 Deposits of security by insurance carriers.
703.202 Identification of significant gaps in State guaranty fund 
          coverage for LHWCA obligations.
703.203 Application for security deposit determination; information to 
          be submitted; other requirements.
703.204 Decision on insurance carrier's application; minimum amount of 
          deposit.
703.205 Filing of Agreement and Undertaking; deposit of security.
703.206 [Reserved]
703.207 Kinds of negotiable securities that may be deposited; conditions 
          of deposit; acceptance of deposits.
703.208 Deposits of negotiable securities with Federal Reserve banks or 
          the Treasurer of the United States; interest thereon.
703.209 Substitution and withdrawal of indemnity bond, letters of credit 
          or negotiable securities.
703.210 Increase or reduction in security deposit amount.
703.211 Authority to seize security deposit; use and/or return of 
          proceeds.
703.212 Required reports; examination of insurance carrier accounts.
703.213 Failure to comply.

[[Page 232]]

                Subpart D_Authorization of Self-Insurers

703.301 Employers who may be authorized as self-insurers.
703.302 Application for authority to become a self-insurer; how filed; 
          information to be submitted; other requirements.
703.303 Decision on employer's application.
703.304 Filing of Agreement and Undertaking; deposit of security.
703.305 [Reserved]
703.306 Kinds of negotiable securities that may be deposited; conditions 
          of deposit; acceptance of deposits.
703.307 Deposits of negotiable securities with Federal Reserve banks or 
          the Treasurer of the United States; interest thereon.
703.308 Substitution and withdrawal of indemnity bond, letters of credit 
          or negotiable securities.
703.309 Increase or reduction in the amount of indemnity bond, letters 
          of credit or negotiable securities.
703.310 Authority to seize security deposit; use and/or return of 
          proceeds.
703.311 Required reports; examination of self-insurer accounts.
703.312 Period of authorization as self-insurer.
703.313 Revocation of authorization to self-insure.

            Subpart E_Issuance of Certificates of Compliance

703.501 Issuance of certificates of compliance.
703.502 Same; employer operating temporarily in another compensation 
          district.
703.503 Return of certificates of compliance.

    Authority: 5 U.S.C. 301, 8171 et seq.; 31 U.S.C. 9701; 33 U.S.C. 
939; 36 D.C. Code 501 et seq.; 42 U.S.C. 1651 et seq.; 43 U.S.C. 1333; 
Reorganization Plan No. 6 of 1950, 15 FR 3174; 3 CFR, 1949-1953 Comp., 
p. 1004, 64 Stat. 1263; Secretary's Order 10-2009, 74 FR 58834.

    Source: 38 FR 26873, Sept. 26, 1973, unless otherwise noted.



                            Subpart A_General

    Source: 70 FR 43233, July 26, 2005, unless otherwise noted.



Sec.703.1  Scope of part.

    Part 703 governs insurance carrier authorizations, insurance carrier 
security deposits, self-insurer authorizations, and certificates of 
compliance with the insurance regulations. These provisions are required 
by the LHWCA and apply to the extensions of the LHWCA except as 
otherwise provided in part 704 of this subchapter.



Sec.703.2  Forms.

    (a) Any information required by the regulations in this part to be 
submitted to OWCP must be submitted on forms the Director authorizes 
from time to time for such purpose. Persons submitting forms may not 
modify the forms or use substitute forms without OWCP's approval.

------------------------------------------------------------------------
              Form No.                               Title
------------------------------------------------------------------------
(1) LS-271..........................  Application for Self-Insurance.
(2) LS-274..........................  Report of Injury Experience.
(3) LS-275 SI.......................  Self-Insurer's Agreement and
                                       Undertaking.
(4) LS-275 IC.......................  Insurance Carrier's Agreement and
                                       Undertaking.
(5) LS-276..........................  Application for Security Deposit
                                       Determination.
(6) LS-405..........................  Indemnity Bond.
(7) LS-570..........................  Card Report of Insurance.
------------------------------------------------------------------------

    (b) Copies of the forms listed in this section are available for 
public inspection at the Office of Workers' Compensation Programs, U.S. 
Department of Labor, Washington, DC 20210. They may also be obtained 
from OWCP district offices and on the Internet at http://www.dol.gov/
owcp/dlhwc.

[70 FR 43233, July 26, 2005, as amended at 77 FR 37286, June 21, 2012]



Sec.703.3  Failure to secure coverage; penalties.

    (a) Each employer must secure the payment of compensation under the 
Act either through an authorized insurance carrier or by becoming an 
authorized self-insurer under section 32(a)(1) or (2) of the Act (33 
U.S.C. 932(a)(1) or (2)). An employer who fails to comply with these 
provisions is subject, upon conviction, to a fine of not more than 
$10,000, or by imprisonment for not more than one year, or both. Where 
the employer is a corporation, the president, secretary and treasurer 
each will also be subject to this fine and/or imprisonment, in addition 
to the fine against the corporation, and each is severally personally 
liable, jointly with the corporation, for all compensation or other 
benefits payable under the Act while the corporation fails to secure the 
payment of compensation.

[[Page 233]]

    (b) Any employer who willingly and knowingly transfers, sells, 
encumbers, assigns or in any manner disposes of, conceals, secretes, or 
destroys any property belonging to the employer after an employee 
sustains an injury covered by the Act, with the intent to avoid payment 
of compensation under the Act to that employee or his/her dependents, 
shall be guilty of a misdemeanor and punished, upon conviction, by a 
fine of not more than $10,000 and/or imprisonment for one year. Where 
the employer is a corporation, the president, secretary and treasurer 
are also severally liable to imprisonment and, along with the 
corporation, jointly liable for the fine.



              Subpart B_Authorization of Insurance Carriers



Sec.703.101  Types of companies which may be authorized by the OWCP.

    The OWCP will consider for the granting of authority to write 
insurance under the Longshoremen's and Harbor Workers' Compensation Act 
and its extensions the application of any stock company, mutual company 
or association, or any other person or fund, while authorized under the 
laws of the United States or for any State to insure workmen's 
compensation. The term ``carrier'' as used in this part means any person 
or fund duly authorized to insure workmen's compensation benefits under 
said Act, or its extensions.



Sec.703.102  Applications for authority to write insurance; how filed; 

evidence to be submitted; other requirements.

    An application for authority to write insurance under this Act shall 
be made in writing, signed by an officer of the applicant duly 
authorized to make such application, and transmitted to the Office of 
Workmen's Compensation Programs, U.S. Department of Labor, Washington, 
DC 20210. Such application shall be accompanied by full and complete 
information regarding the history and experience of such applicant in 
the writing of workmen's compensation insurance, together with evidence 
that it has authority in its charter or form of organization to write 
such insurance, and evidence that the applicant is currently authorized 
to insure workmen's compensation liability under the laws of the United 
States or of any State. The statements of fact in each application and 
in the supporting evidence shall be verified by the oath of the officer 
of the applicant who signs such application. Each applicant shall state 
in its application the area or areas, in which it intends to do 
business. In connection with any such application the following shall be 
submitted, the Office reserving the right to call for such additional 
information as it may deem necessary in any particular case:
    (a) A copy of the last annual report made by the applicant to the 
insurance department or other authority of the State in which it is 
incorporated, or the State in which its principal business is done.
    (b) A certified copy from the proper State authorities of the paper 
purporting to show the action taken upon such report, or such other 
evidence as the applicant desires to submit in respect of such report, 
which may obviate delay caused by an inquiry of the OWCP of the State 
authorities relative to the standing and responsibility of the 
applicant.
    (c) A full and complete statement of its financial condition, if not 
otherwise shown, and, if a stock company, shall show specifically its 
capital stock and surplus.
    (d) A copy of its charter or other formal outline of its 
organization, its rules, its bylaws, and other documents, writings, or 
agreements by and under which it does business, and such other evidence 
as it may deem proper to make a full exposition of its affairs and 
financial condition.

[38 FR 26873, Sept. 26, 1973; 50 FR 406, Jan. 3, 1985]



Sec.703.103  Stock companies holding Treasury certificates of authority.

    A stock company furnishing evidence that it is authorized to write 
workmen's compensation insurance under the laws of the United States or 
of any State, which holds a certificate of authority from the Secretary 
of the Treasury as an acceptable surety on Federal bonds, unless 
requested to do so, need not transmit to the Office with

[[Page 234]]

its application copies of such financial reports as are on file in the 
Department of the Treasury. The acceptance by that Department of such a 
company will be considered by the Office in conjunction with the 
application of such company, provided there has been compliance with the 
other requirements of the regulations in this part.



Sec.703.104  Applicants currently authorized to write insurance under the 

extensions of the LHWCA.

    Any applicant currently authorized by the Office to write insurance 
under any extension of the LHWCA need not support its application under 
the LHWCA or any other LHWCA extension with the evidence required by the 
regulations in this part, except the form of policy and endorsement 
which it proposes to use, unless specifically requested by the Office, 
but instead its application may refer to the fact that it has been so 
authorized.



Sec.703.105  Copies of forms of policies to be submitted with application.

    With each application for authority to write insurance there shall 
be submitted for the approval of the Office copies of the forms of 
policies which the applicant proposes to issue in writing insurance 
under the LHWCA, or its extensions, to which shall be attached the 
appropriate endorsement to be used in connection therewith.



Sec.703.106  Certificate of authority to write insurance.

    No corporation, company, association, person, or fund shall write 
insurance under this Act without first having received from the OWCP a 
certificate of authority to write such insurance. Any such certificate 
issued by the Office, after application therefor in accordance with 
these regulations, may authorize the applicant to write such insurance 
in a limited territory as determined by the Office. Any such certificate 
may be suspended or revoked by the Office prior to its expiration for 
good cause shown, but no suspension or revocation shall affect the 
liability of any carrier already incurred. Good cause shall include, 
without limitation, the failure to maintain in such limited territory a 
regular business office with full authority to act on all matters 
falling within the Act, and the failure to promptly and properly perform 
the carrier's responsibilities under the Act and these regulations, with 
special emphasis upon lack of promptness in making payments when due, 
upon failure to furnish appropriate medical care, and upon attempts to 
offer to, or urge upon, claimants inequitable settlements. A hearing may 
be requested by the aggrieved party and shall be held before the 
Director or his representative prior to the taking of any adverse action 
under this section.



Sec.703.108  Period of authority to write insurance.

    Effective with the end of the authorization period July 1, 1983, 
through June 30, 1984, annual reauthorization of authority to write 
insurance coverage under the Act is no longer necessary. Beginning July 
1, 1984, and thereafter, newly issued Certificates of Authority will 
show no expiration date. Certificates of Authority will remain in force 
for so long as the carrier complies with the requirements of the OWCP.

[50 FR 406, Jan. 3, 1985]



Sec.703.109  Longshoremen's endorsement; see succeeding parts for endorsements 

for extensions.

    (a) The following form of endorsement application to the standard 
workmen's compensation and employer's liability policy, shall be used, 
if required by the OWCP, with the form of policy approved by the Office 
for use by an authorized carrier:

    For attachment to Policy No. ------,
    The obligations of the policy include the Longshoremen's and Harbor 
Workers' Compensation Act, 33 U.S.C. 901 et seq., and all laws 
amendatory thereof or supplementary thereto which may be or become 
effective while this policy is in force.
    The company will be subject to the provisions of 33 U.S.C. 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The company agrees to abide by all the provisions of this Act, and 
all lawful rules, regulations, orders, and decisions of the Office of 
Workmen's Compensation Programs, U.S. Department of Labor, unless and 
until

[[Page 235]]

set aside, modified, or reversed by appropriate appellate authority as 
provided for by said Act.
    This endorsement shall not be cancelled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
and to this employer.
    All terms, conditions, requirements, and obligations, expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.



Sec.703.110  Other forms of endorsements and policies.

    Where the form of endorsement prescribed by Sec.703.109 is not 
appropriate when used in conjunction with a form of policy approved for 
use by the Office no modification thereof shall be used unless 
specifically approved by the Office. Where the form of policy is 
designed to include therein the obligations of the insurer under said 
Act without the use of the appropriate endorsements, the policy shall 
contain the provisions required to be included in any of the 
endorsements. Such a policy, however, shall not be used until expressly 
approved by the Office.



Sec.703.111  Submission of new forms of policies for approval; other 

endorsements.

    No new forms of policies or modification of existing forms of 
policies shall be used by an insurer authorized by the Office under the 
regulations in this part to write insurance under said Act except after 
submission to and approval by the Office. No endorsement altering any 
provisions of a policy approved by the Office shall be used except after 
submission to and approval by the Office.



Sec.703.112  Terms of policies.

    A policy or contract of insurance shall be issued for the term of 
not less than 1 year from the date that it becomes effective, but if 
such insurance be not needed except for a particular contract or 
operation, the term of the policy may be limited to the period of such 
contract or operation.



Sec.703.113  Marine insurance contracts.

    A longshoremen's policy, or the longshoremen's endorsement provided 
for by Sec.703.109 for attachment to a marine policy, may specify the 
particular vessel or vessels in respect of which the policy applies and 
the address of the employer at the home port thereof. The report of the 
issuance of a policy or endorsement required by Sec.703.116 to be made 
by the carrier shall be made to the district director for the 
compensation district in which the home port of such vessel or vessels 
is located, and such report shall show the name and address of the owner 
as well as the name or names of such vessel or vessels.



Sec.703.114  Notice of cancellation.

    Cancellation of a contract or policy of insurance issued under 
authority of said Act shall not become effective otherwise than as 
provided by 33 U.S.C. 936(b); and notice of a proposed cancellation 
shall be given to the district director and to the employer in 
accordance with the provisions of 33 U.S.C. 912(c), 30 days before such 
cancellation is intended to be effective.



Sec.703.115  Discharge by the carrier of obligations and duties of employer.

    Every obligation and duty in respect of payment of compensation, the 
providing of medical and other treatment and care, the payment or 
furnishing of any other benefit required by said Act and in respect of 
the carrying out of the administrative procedure required or imposed by 
said Act or the regulations in this part upon an employer shall be 
discharged and carried out by the carrier except that the prescribed 
report of injury or death shall be sent by the employer to the district 
director and to the insurance carrier as required by 33 U.S.C. 930. Such 
carrier shall be jointly responsible with the employer for the 
submission of all reports, notices, forms, and other administrative 
papers required by the district director or the Office in the 
administration of said Act to be submitted by the employer, but any form 
or paper so submitted where required therein shall contain in addition 
to the name and address of the carrier, the full name and address of the 
employer

[[Page 236]]

on whose behalf it is submitted. Notice to or knowledge of an employer 
of the occurrence of the injury or death shall be notice to or knowledge 
of such carrier. Jurisdiction of the employer by a district director, 
the Office, or appropriate appellate authority under said Act shall be 
jurisdiction of such carrier. Any requirement under any compensation 
order, finding, or decision shall be binding upon such carrier in the 
same manner and to the same extent as upon the employer.



Sec.703.116  Report by carrier of issuance of policy or endorsement.

    Each carrier shall report to the district director assigned to a 
compensation district each policy and endorsement issued by it to an 
employer who carries on operations in such compensation district. The 
report shall be made in such manner and on such form as the district or 
the Office may require.



Sec.703.117  Report; by whom sent.

    The report of issuance of a policy and endorsement provided for in 
Sec.703.116 shall be sent by the home office of the carrier, except 
that any carrier may authorize its agency or agencies in any 
compensation district to make such reports to the district director, 
provided the carrier shall notify the district director in such district 
of the agencies so duly authorized.



Sec.703.118  Agreement to be bound by report.

    Every applicant for authority to write insurance under the 
provisions of this Act, shall be deemed to have included in its 
application an agreement that the acceptance by the district director of 
a report of the issuance of a policy of insurance, as provided for by 
Sec.703.116, shall bind the carrier to full liability for the 
obligations under this Act of the employer named in said report, and 
every certificate of authority to write insurance under this Act shall 
be deemed to have been issued by the Office upon consideration of the 
carrier's agreement to become so bound. It shall be no defense to this 
agreement that the carrier failed or delayed to issue the policy to the 
employer covered by this report.

[50 FR 406, Jan. 3, 1985]



Sec.703.119  Report by employer operating temporarily in another compensation 

district.

    Where an employer having operations in one compensation district 
contemplates engaging in work subject to the Act in another compensation 
district, his carrier may submit to the district director of such latter 
district a report pursuant to Sec.703.116 containing the address of 
the employer in the first mentioned district with the additional 
notation ``No present address in -------- compensation district. 
Certificate requested when address given.''



Sec.703.120  Name of one employer only shall be given in each report.

    A separate report of the issuance of a policy and endorsement, 
provided for by Sec.703.116, shall be made for each employer covered 
by a policy. If a policy is issued insuring more than one employer, a 
separate report for each employer so covered shall be sent to the 
district director concerned, with the name of only one employer on each 
such report.



        Subpart C_Insurance Carrier Security Deposit Requirements

    Source: 70 FR 43234, July 26, 2005, unless otherwise noted.



Sec.703.201  Deposits of security by insurance carriers.

    The regulations in this subpart require certain insurance carriers 
to deposit security in the form of indemnity bonds, letters of credit or 
negotiable securities (chosen at the option of the carrier) of a kind 
and in an amount determined by the Office, and prescribe the conditions 
under which deposits must be made. Security deposits secure the payment 
of compensation and medical benefits when an insurance carrier defaults 
on any of its obligations under the LHWCA, regardless of the date such 
obligations arose. They also secure the payment of compensation and

[[Page 237]]

medical benefits when a carrier becomes insolvent and such obligations 
are not otherwise fully secured by a State guaranty fund. Any gap in 
State guaranty fund coverage will have a direct effect on the amount of 
security the Office will require a carrier to post. As used in this 
subpart, the terms ``obligations under the Act'' and ``LHWCA 
obligations'' mean a carrier's liability for compensation payments and 
medical benefits arising under the Longshore and Harbor Workers' 
Compensation Act and any of its extensions.



Sec.703.202  Identification of significant gaps in State guaranty fund 

coverage for LHWCA obligations.

    (a) In determining the amount of a carrier's required security 
deposit, the Office will consider the extent to which a State guaranty 
fund secures the insurance carrier's LHWCA obligations in that State. 
When evaluating State guaranty funds, the Office may consider a number 
of factors including, but not limited to--
    (1) Limits on weekly benefit amounts;
    (2) Limits on aggregate maximum benefit amounts;
    (3) Time limits on coverage;
    (4) Ocean marine exclusions;
    (5) Employer size and viability provisions; and
    (6) Financial strength of the State guaranty fund itself.
    (b) OWCP will identify States without guaranty funds and States with 
guaranty funds that do not fully and immediately secure LHWCA 
obligations and will post its findings on the Internet at http://
www.dol.gov/owcp/dlhwc. These findings will indicate the extent of any 
partial or total gap in coverage provided by a State guaranty fund, and 
they will be open for inspection and comment by all interested parties. 
If the extent of coverage a particular State guaranty fund provides 
either cannot be determined or is ambiguous, OWCP will deem one third 
(33\1/3\ percent) of a carrier's LHWCA obligations in that State to be 
unsecured. OWCP will revise its findings from time to time, in response 
to substantiated public comments it receives or for any other reasons it 
considers relevant.

[70 FR 43234, July 26, 2005, as amended at 77 FR 37286, June 21, 2012]



Sec.703.203  Application for security deposit determination; information to be 

submitted; other requirements.

    (a) Each insurance carrier authorized by OWCP to write insurance 
under the LHWCA or any of its extensions, and each insurance carrier 
seeking initial authorization to write such insurance, must apply 
annually, on a schedule set by OWCP, for a determination of the extent 
of its unsecured obligations and the security deposit required. The 
application must be addressed to the Branch of Financial Management and 
Insurance (Branch) within OWCP's Division of Longshore and Harbor 
Workers' Compensation, and be made on a form provided by OWCP. The 
application must contain the following:
    (1) Any carrier seeking an exemption from the security deposit 
requirements based on its financial standing (see Sec.703.204(c)(1)) 
must submit documentation establishing the carrier's current rating and 
its rating for the immediately preceding year from each insurance rating 
service designated by the Branch and posted on the Internet at http://
www.dol.gov/owcp/dlhwc.
    (2) All other carriers, and any carrier whose exemption request 
under paragraph (a)(1) of this section has been denied, must provide--
    (i) A statement of the carrier's outstanding liabilities under the 
LHWCA or any of its extensions for its LHWCA obligations for each State 
in which the obligations arise; and
    (ii) Any other information the Branch requests to enable it to give 
the application adequate consideration including, but not limited to, 
the reports set forth at Sec.703.212.
    (b) If the carrier disagrees with any of OWCP's findings regarding 
State guaranty funds made under Sec.703.202(b) as they exist when it 
submits its application, the carrier may submit a statement of its 
unsecured obligations based on a different conclusion regarding the 
extent of coverage afforded by one or more State guaranty funds. The 
carrier must submit evidence and/or argument

[[Page 238]]

with its application sufficient to establish that such conclusion is 
correct.
    (c) The carrier must sign and swear to the application. If the 
carrier is not an individual, the carrier's duly authorized officer must 
sign and swear to the application and list his or her official 
designation. If the carrier is a corporation, the officer must also 
affix the corporate seal.
    (d) At any time after filing an application, the carrier must inform 
the Branch immediately of any material changes that may have rendered 
its application incomplete, inaccurate or misleading.
    (e) By filing an application, the carrier consents to be bound by 
and to comply with the regulations and requirements in this part.

[70 FR 43234, July 26, 2005, as amended at 77 FR 37286, June 21, 2012]



Sec.703.204  Decision on insurance carrier's application; minimum amount of 

deposit.

    (a) The Branch will issue a decision on the application determining 
the extent of an insurance carrier's unsecured LHWCA obligations and 
fixing the amount of security the carrier must deposit to fully secure 
payment of its unsecured obligations. The Branch will transmit its 
decision to the applicant in a way it considers appropriate.
    (b) The Branch may consider a number of factors in setting the 
security deposit amount including, but not limited to, the--
    (1) Financial strength of the carrier as determined by private 
insurance rating organizations;
    (2) Financial strength of the carrier's insureds in the Longshore 
industry;
    (3) Extent to which State guaranty funds secure the carrier's LHWCA 
obligations in the event the carrier defaults on its obligations or 
becomes insolvent;
    (4) Carrier's longevity in writing LHWCA or other workers' 
compensation coverage;
    (5) Extent of carrier's exposure for LHWCA coverage; and
    (6) Carrier's payment history in satisfying its LHWCA obligations.
    (c) In setting the security deposit amount, the Branch will follow 
these criteria:
    (1) Carriers who hold the highest rating awarded by each of the 
three insurance rating services designated by the Branch and posted on 
the Internet at http://www.dol.gov/owcp/dlhwc for both the current 
rating year and the immediately preceding year will not be required to 
deposit security.
    (2) Carriers whose LHWCA obligations are fully secured by one or 
more State guaranty funds, as evaluated by OWCP under Sec.703.202 of 
this subpart, will not be required to deposit security.
    (3) The Branch will require all carriers not meeting the 
requirements of paragraphs (c)(1) or (2) of this section to deposit 
security for their LHWCA obligations not secured by a State guaranty 
fund, as evaluated by OWCP under Sec.703.202 of this subpart. For 
carriers that write only an insignificant or incidental amount of LHWCA 
insurance, the Branch will require a deposit in an amount determined by 
the Branch from time to time. For all other carriers, the Branch will 
require a minimum deposit of one third (33\1/3\ percent) of a carrier s 
outstanding LHWCA obligations not secured by a State guaranty fund, but 
may require a deposit up to an amount equal to the carrier's total 
outstanding LHWCA obligations (100 percent) not secured by a State 
guaranty fund.
    (d) If a carrier believes that a lesser deposit would fully secure 
its LHWCA obligations, the carrier may request a hearing before the 
Director of the Division of Longshore and Harbor Workers' Compensation 
(Longshore Director) or the Longshore Director's representative. 
Requests for hearing must be in writing and sent to the Branch within 10 
days of the date of the Branch's decision. The carrier may submit new 
evidence and/or argument in support of its challenge to the Branch's 
decision and must provide any additional documentation OWCP requests. 
The Longshore Director or his representative will notify the carrier of 
the hearing date within 10 days of receiving the request. The Longshore 
Director or his representative will issue the final agency decision on 
the application within 60 days of the hearing date, or,

[[Page 239]]

where evidence is submitted after the hearing, within 60 days of the 
receipt of such evidence, but no later than 180 days after receiving the 
carrier's request for a hearing.

[70 FR 43234, July 26, 2005, as amended at 77 FR 37286, June 21, 2012]



Sec.703.205  Filing of Agreement and Undertaking; deposit of security.

    Within 45 days of the date on which the insurance carrier receives 
the Branch's decision (or, if the carrier requests a hearing, a period 
set by the Longshore Director or the Longshore Director's 
representative) determining the extent of its unsecured LHWCA 
obligations and fixing the required security deposit amount (see Sec.
703.204), the carrier must:
    (a) Execute and file with the Branch an Agreement and Undertaking, 
in a form prescribed and provided by OWCP, in which the carrier shall 
agree to--
    (1) Deposit with the Branch indemnity bonds or letters of credit in 
the amount fixed by the Office, or deposit negotiable securities under 
Sec. Sec.703.207 and 703.208 in that amount;
    (2) Authorize the Branch, at its discretion, to bring suit under any 
deposited indemnity bond or to draw upon any deposited letters of 
credit, as appropriate under the terms of the security instrument, or to 
collect the interest and principal as they become due on any deposited 
negotiable securities and to sell or otherwise liquidate such negotiable 
securities or any part thereof when--
    (i) The carrier defaults on any of its LHWCA obligations;
    (ii) The carrier fails to renew any deposited letter of credit or 
substitute a new letter of credit, indemnity bond or acceptable 
negotiable securities in its place;
    (iii) The carrier fails to renew any deposited negotiable securities 
at maturity or substitute a letter of credit, indemnity bond or 
acceptable negotiable securities in their place;
    (iv) State insolvency proceedings are initiated against the carrier; 
or
    (v) The carrier fails to comply with any of the terms of the 
Agreement and Undertaking; and
    (3) Authorize the Branch, at its discretion, to pay such ongoing 
claims of the carrier as it may find to be due and payable from the 
proceeds of the deposited security;
    (b) Give security in the amount fixed in the Office's decision:
    (1) In the form of an indemnity bond with sureties satisfactory to 
the Branch and in such form, and containing such provisions, as the 
Branch may prescribe: Provided, That only surety companies approved by 
the United States Treasury Department under the laws of the United 
States and the rules and regulations governing bonding companies may act 
as sureties on such indemnity bonds (see Department of Treasury's 
Circular-570), and that a surety company that is a corporate subsidiary 
of an insurance carrier may not act as surety on such carrier's 
indemnity bond;
    (2) In the form of letters of credit issued by a financial 
institution satisfactory to the Branch and upon which the Branch may 
draw; or
    (3) By a deposit of negotiable securities with a Federal Reserve 
Bank or the Treasurer of the United States in compliance with Sec. Sec.
703.207 and 703.208.



Sec.703.206  [Reserved]



Sec.703.207  Kinds of negotiable securities that may be deposited; conditions 

of deposit; acceptance of deposits.

    An insurance carrier electing to deposit negotiable securities to 
secure its obligations under the Act in the amount fixed by the Office 
under the regulations in this part shall deposit any negotiable 
securities acceptable as security for the deposit of public monies of 
the United States under regulations issued by the Secretary of the 
Treasury. (See 31 CFR part 225.) The approval, valuation, acceptance, 
and custody of such securities is hereby committed to the several 
Federal Reserve Banks and the Treasurer of the United States.



Sec.703.208  Deposits of negotiable securities with Federal Reserve banks or 

the Treasurer of the United States; interest thereon.

    Deposits of negotiable securities provided for by the regulations in 
this part must be made with any Federal Reserve bank or any branch of a 
Federal Reserve bank designated by the

[[Page 240]]

Branch, or the Treasurer of the United States, and must be held subject 
to the order of the Branch. The Branch will authorize the insurance 
carrier to collect interest on the securities it deposits unless any of 
the conditions set forth at Sec.703.211(a) occur.



Sec.703.209  Substitution and withdrawal of indemnity bond, letters of credit 

or negotiable securities.

    (a) A carrier may not substitute other security for any indemnity 
bond or letters of credit deposited under the regulations in this part 
except when authorized by the Branch. A carrier may, however, substitute 
negotiable securities acceptable under the regulations in this part for 
previously-deposited negotiable securities without the Branch's prior 
approval.
    (b) A carrier that has ceased to write insurance under the Act may 
apply to the Branch for withdrawal of its security deposit. The carrier 
must file with its application a sworn statement setting forth--
    (1) A list of all cases in each State in which the carrier is paying 
compensation, together with the names of the employees and other 
beneficiaries, a description of causes of injury or death, and a 
statement of the amount of compensation paid;
    (2) A similar list of all pending cases in which the carrier has not 
yet paid compensation; and
    (3) A similar list of all cases in which injury or death has 
occurred within one year before such application or in which the last 
payment of compensation was made within one year before such 
application.
    (c) The Branch may authorize withdrawal of previously-deposited 
indemnity bonds, letters of credit and negotiable securities that, in 
the opinion of the Branch, are not necessary to provide adequate 
security for the payment of the carrier's outstanding and potential 
LHWCA liabilities. No withdrawals will be authorized unless there has 
been no claim activity involving the carrier for a minimum of five 
years, and the Branch is reasonably certain that no further claims will 
arise.



Sec.703.210  Increase or reduction in security deposit amount.

    (a) Whenever the Office considers the security deposited by an 
insurance carrier insufficient to fully secure the carrier's LHWCA 
obligations, the carrier must, upon demand by the Branch, deposit 
additional security in accordance with the regulations in this part in 
an amount fixed by the Branch. The Branch will issue its decision 
requiring additional security in accordance with Sec.703.204, and the 
procedures set forth at Sec. Sec.703.204(d) and 703.205 for requesting 
a hearing and complying with the Office's decision will apply as 
appropriate.
    (b) The Branch may reduce the required security at any time on its 
own initiative, or upon application of a carrier, when in the Branch's 
opinion the facts warrant a reduction. A carrier seeking a reduction 
must furnish any information the Office requests regarding its 
outstanding LHWCA obligations for any State in which it does business, 
its obligations not secured by a State guaranty fund in each of these 
States, and any other evidence as the Branch considers necessary.



Sec.703.211  Authority to seize security deposit; use and/or return of 

proceeds.

    (a) The Office may take any of the actions set forth in paragraph 
(b) of this section when an insurance carrier--
    (1) Defaults on any of its LHWCA obligations;
    (2) Fails to renew any deposited letter of credit or substitute a 
new letter of credit, indemnity bond or acceptable negotiable securities 
in its place;
    (3) Fails to renew any deposited negotiable securities at maturity 
or substitute a letter of credit, indemnity bond or acceptable 
negotiable securities in their place;
    (4) Has State insolvency proceedings initiated against it; or
    (5) Fails to comply with any of the terms of the Agreement and 
Undertaking.
    (b) When any of the conditions set forth in paragraph (a) of this 
section occur, the Office may, within its discretion and as appropriate 
to the security instrument--

[[Page 241]]

    (1) Bring suit under any indemnity bond;
    (2) Draw upon any letters of credit;
    (3) Seize any negotiable securities, collect the interest and 
principal as they may become due, and sell or otherwise liquidate the 
negotiable securities or any part thereof.
    (c) When the Office, within its discretion, determines that it no 
longer needs to collect the interest and principal of any negotiable 
securities seized pursuant to paragraphs (a) and (b) of this section, or 
to retain the proceeds of their sale, it must return any of the 
carrier's negotiable securities still in its possession and any 
remaining proceeds of their sale.



Sec.703.212  Required reports; examination of insurance carrier accounts.

    (a) Upon the Office's request, each insurance carrier must submit 
the following reports:
    (1) A certified financial statement of the carrier's assets and 
liabilities, or a balance sheet.
    (2) A sworn statement showing the extent of the carrier's unsecured 
LHWCA obligations for each State in which it is authorized to write 
insurance under the LHWCA or any of its extensions.
    (3) A sworn statement reporting the carrier's open cases as of the 
date of such report, listing by State all death and injury cases, 
together with a report of the status of all outstanding claims.
    (b) Whenever it considers necessary, the Office may inspect or 
examine a carrier's books of account, records, and other papers to 
verify any financial statement or other information the carrier 
furnished to the Office in any statement or report required by this 
section, or any other section of the regulations in this part. The 
carrier must permit the Office or its duly authorized representative to 
make the inspection or examination. Alternatively, the Office may accept 
an adequate independent audit by a certified public accountant.



Sec.703.213  Failure to comply.

    The Office may suspend or revoke a carrier's certificate of 
authority to write LHWCA insurance under Sec.703.106 when the carrier 
fails to comply with any of the requirements of this part.



                Subpart D_Authorization of Self-Insurers

    Source: 70 FR 43234, July 26, 2005, unless otherwise noted.



Sec.703.301  Employers who may be authorized as self-insurers.

    The regulations in this subpart set forth procedures for authorizing 
employers to self-insure the payment of compensation under the Longshore 
and Harbor Workers' Compensation Act, or its extensions. The Office may 
authorize any employer to self-insure who, pursuant to the regulations 
in this part, furnishes to the Office satisfactory proof of its ability 
to pay compensation directly, and who agrees to immediately cancel any 
existing insurance policy covering its Longshore obligations (except for 
excess or catastrophic workers' compensation insurance, see Sec. Sec.
703.302(a)(6), 703.304(a)(6)) when OWCP approves the employer's 
application to be self-insured. The regulations require self-insurers to 
deposit security in the form of an indemnity bond, letters of credit or 
negotiable securities (at the option of the employer) of a kind and in 
an amount determined by the Office, and prescribe the conditions under 
which such deposits shall be made. The term ``self-insurer'' as used in 
these regulations means any employer securing the payment of 
compensation under the LHWCA or its extensions in accordance with the 
provisions of 33 U.S.C. 932(a)(2) and these regulations.



Sec.703.302  Application for authority to become a self-insurer; how filed; 

information to be submitted; other requirements.

    (a) Any employer may apply to become an authorized self-insurer. The 
application must be addressed to the Branch of Financial Management and 
Insurance (Branch) within OWCP's Division of Longshore and Harbor 
Workers' Compensation, and be made on a form provided by OWCP. The 
application must contain--

[[Page 242]]

    (1) A statement of the employer's total payroll for the 12 months 
before the application date;
    (2) A statement of the average number of employees engaged in 
employment within the purview of the LHWCA or any of its extensions for 
the 12 months before the application date;
    (3) A statement of the number of injuries to such employees 
resulting in disability of more than 7 days' duration, or in death, 
during each of the 5 years before the application date;
    (4) A certified financial report for each of the three years before 
the application date;
    (5) A description of the facilities maintained or the arrangements 
made for the medical and hospital care of injured employees;
    (6) A statement describing the provisions and maximum amount of any 
excess or catastrophic insurance; and
    (7) Any other information the Branch requests to enable it to give 
the application adequate consideration including, but not limited to, 
the reports set forth at Sec.703.310.
    (b) The employer must sign and swear to the application. If the 
employer is not an individual, the employer's duly authorized officer 
must sign and swear to the application and list his or her official 
designation. If the employer is a corporation, the officer must also 
affix the corporate seal.
    (c) At any time after filing an application, the employer must 
inform the Branch immediately of any material changes that may have 
rendered its application incomplete, inaccurate or misleading.
    (d) By filing an application, the employer consents to be bound by 
and to comply with the regulations and requirements in this part.



Sec.703.303  Decision on employer's application.

    (a) The Branch will issue a decision granting or denying the 
employer's application to be an authorized self-insurer. If the Branch 
grants the application, the decision will fix the amount of security the 
employer must deposit. The Branch will transmit its decision to the 
employer in a way it considers appropriate.
    (b) The employer is authorized to self-insure beginning with the 
date of the Branch's decision. Each grant of authority to self-insure is 
conditioned, however, upon the employer's execution and filing of an 
Agreement and Undertaking and deposit of the security fixed in the 
decision in the form and within the time limits required by Sec.
703.304. In the event the employer fails to comply with the requirements 
set forth in Sec.703.304, its authorization to self-insure will be 
considered never to have been effective, and the employer will be 
subject to appropriate penalties for failure to secure its LHWCA 
obligations.
    (c) The Branch will require security in the amount it considers 
necessary to fully secure the employer's LHWCA obligations. When fixing 
the amount of security, the Branch may consider a number of factors 
including, but not limited to, the--
    (1) Employer's overall financial standing;
    (2) Nature of the employer's work;
    (3) Hazard of the work in which the employees are employed;
    (4) Employer's payroll amount for employees engaged in employment 
within the purview of the Act; and
    (5) Employer's accident record as shown in the application and the 
Office's records.
    (d) If an employer believes that the Branch incorrectly denied its 
application to self-insure, or that a lesser security deposit would 
fully secure its LHWCA obligations, the employer may request a hearing 
before the Director of the Division of Longshore and Harbor Workers' 
Compensation (Longshore Director) or the Longshore Director's 
representative. Requests for hearing must be in writing and sent to the 
Branch within ten days of the date of the Branch's decision. The 
employer may submit new evidence and/or argument in support of its 
challenge to the Branch's decision and must provide any additional 
documentation OWCP requests. The Longshore Director or his 
representative will notify the employer of the hearing date within 10 
days of receiving the request. The Longshore Director or his 
representative will issue the final agency decision on the application 
within 60 days of the

[[Page 243]]

hearing date, or, where evidence is submitted after the hearing, within 
60 days of the receipt of such evidence, but no later than 180 days 
after receiving the employer's request for a hearing.



Sec.703.304  Filing of Agreement and Undertaking; deposit of security.

    Within 45 days of the date on which the employer receives the 
Branch's decision (or, if the employer requests a hearing, a period set 
by the Longshore Director or the Longshore Director's representative) 
granting its application to self-insure and fixing the required security 
deposit amount (see Sec.703.303), the employer must:
    (a) Execute and file with the Branch an Agreement and Undertaking, 
in a form prescribed and provided by OWCP, in which the employer shall 
agree to:
    (1) Pay when due, as required by the provisions of the Act, all 
compensation payable on account of injury or death of any of its 
employees injured within the purview of the Act;
    (2) Furnish medical, surgical, hospital, and other attendance, 
treatment and care as required by the Act;
    (3) Deposit with the Branch indemnity bonds or letters of credit in 
the amount fixed by the Office, or deposit negotiable securities under 
Sec. Sec.703.306 and 703.307 in that amount;
    (4) Authorize the Branch, at its discretion, to bring suit under any 
deposited indemnity bond or to draw upon any deposited letters of 
credit, as appropriate under the terms of the security instrument, or to 
collect the interest and principal as they become due on any deposited 
negotiable securities and to seize and sell or otherwise liquidate such 
negotiable securities or any part thereof when the employer:
    (i) Defaults on any of its LHWCA obligations;
    (ii) Fails to renew any deposited letter of credit or substitute a 
new letter of credit, indemnity bond or acceptable negotiable securities 
in its place;
    (iii) Fails to renew any deposited negotiable securities at maturity 
or substitute a letter of credit, indemnity bond or acceptable 
negotiable securities in their place; or
    (iv) Fails to comply with any of the terms of the Agreement and 
Undertaking;
    (5) Authorize the Branch, at its discretion, to pay such 
compensation, medical, and other expenses and any accrued penalties 
imposed by law as it may find to be due and payable from the proceeds of 
the deposited security; and
    (6) Obtain and maintain, if required by the Office, excess or 
catastrophic insurance in amounts to be determined by the Office.
    (b) Give security in the amount fixed in the Office's decision:
    (1) In the form of an indemnity bond with sureties satisfactory to 
the Office, and in such form and containing such provisions as the 
Office may prescribe: Provided, That only surety companies approved by 
the United States Treasury Department under the laws of the United 
States and the rules and regulations governing bonding companies may act 
as sureties on such indemnity bonds (see Department of Treasury's 
Circular-570);
    (2) In the form of letters of credit issued by a financial 
institution satisfactory to the Branch and upon which the Branch may 
draw; or,
    (3) By a deposit of negotiable securities with a Federal Reserve 
Bank or the Treasurer of the United States in compliance with Sec. Sec.
703.306 and 703.307.



Sec.703.305  [Reserved]



Sec.703.306  Kinds of negotiable securities that may be deposited; conditions 

of deposit; acceptance of deposits.

    A self-insurer or a self-insurer applicant electing to deposit 
negotiable securities to secure its obligations under the Act in the 
amount fixed by the Office under the regulations in this part shall 
deposit any negotiable securities acceptable as security for the deposit 
of public monies of the United States under regulations issued by the 
Secretary of the Treasury. (See 31 CFR part 225.) The approval, 
valuation, acceptance, and custody of such securities is hereby 
committed to the several Federal Reserve Banks and the Treasurer of the 
United States.

[[Page 244]]



Sec.703.307  Deposits of negotiable securities with Federal Reserve banks or 

the Treasurer of the United States; interest thereon.

    Deposits of negotiable securities provided for by the regulations in 
this part shall be made with any Federal Reserve bank or any branch of a 
Federal Reserve bank designated by the Office, or the Treasurer of the 
United States, and shall be held subject to the order of the Office. The 
Office will authorize the self-insurer to collect interest on the 
securities deposited by it unless any of the conditions set forth at 
Sec.703.304(a)(4) occur.



Sec.703.308  Substitution and withdrawal of indemnity bond, letters of credit 

or negotiable securities.

    (a) A self-insurer may not substitute other security for any 
indemnity bond or letters of credit deposited under the regulations in 
this part except when authorized by the Office. A self-insurer may, 
however, substitute negotiable securities acceptable under the 
regulations in this part for previously-deposited negotiable securities 
without the Office's prior approval.
    (b) A self-insurer discontinuing business, discontinuing operations 
within the purview of the Act, or securing the payment of compensation 
by commercial insurance under the provisions of the Act may apply to the 
Office for the withdrawal of the security it provided under the 
regulations in this part. The self-insurer must file with its 
application a sworn statement setting forth--
    (1) A list of all cases in each compensation district in which the 
self-insurer is paying compensation, together with the names of the 
employees and other beneficiaries, a description of causes of injury or 
death, and a statement of the amount of compensation paid;
    (2) A similar list of all pending cases in which the self-insurer 
has not yet paid compensation; and
    (3) A similar list of all cases in which injury or death has 
occurred within one year before such application or in which the last 
payment of compensation was made within one year before such 
application.
    (c) The Office may authorize withdrawal of previously-deposited 
indemnity bonds, letters of credit and negotiable securities that, in 
the opinion of the Office, are not necessary to provide adequate 
security for the payment of the self-insurer's outstanding and potential 
LHWCA obligations. No withdrawals will be authorized unless there has 
been no claim activity involving the self-insurer for a minimum of five 
years, and the Office is reasonably certain no further claims will 
arise.



Sec.703.309  Increase or reduction in the amount of indemnity bond, letters of 

credit or negotiable securities.

    (a) Whenever the Office considers the principal sum of the indemnity 
bond or letters of credit filed or the amount of the negotiable 
securities deposited by a self-insurer insufficient to fully secure the 
self-insurer's LHWCA obligations, the self-insurer must, upon demand by 
the Office, deposit additional security in accordance with the 
regulations in this part in an amount fixed by the Branch. The Branch 
will issue its decision requiring additional security in accordance with 
Sec.703.303, and the procedures set forth at Sec. Sec.703.303(d) and 
703.304 for requesting a hearing and complying with the Office's 
decision will apply as appropriate.
    (b) The Office may reduce the required security at any time on its 
own initiative, or upon application of a self-insurer, when in the 
Office's opinion the facts warrant a reduction. A self-insurer seeking a 
reduction must furnish any information the Office requests regarding its 
current affairs, the nature and hazard of the work of its employees, the 
amount of its payroll for employees engaged in maritime employment 
within the purview of the Act, its financial condition, its accident 
experience, a record of compensation payments it has made, and any other 
evidence the Branch considers necessary.



Sec.703.310  Authority to seize security deposit; use and/or return of 

proceeds.

    (a) The Office may take any of the actions set forth in paragraph 
(b) of this section when a self-insurer--
    (1) Defaults on any of its LHWCA obligations;

[[Page 245]]

    (2) Fails to renew any deposited letter of credit or substitute a 
new letter of credit, indemnity bond or acceptable negotiable securities 
in its place;
    (3) Fails to renew any deposited negotiable securities at maturity 
or substitute a letter of credit, indemnity bond or acceptable 
negotiable securities in their place; or
    (4) Fails to comply with any of the terms of the Agreement and 
Undertaking.
    (b) When any of the conditions set forth in paragraph (a) of this 
section occur, the Office may, within its discretion and as appropriate 
to the security instrument--
    (1) Bring suit under any indemnity bond;
    (2) Draw upon any letters of credit;
    (3) Seize any negotiable securities, collect the interest and 
principal as they may become due, and sell or otherwise liquidate the 
negotiable securities or any part thereof.
    (c) When the Office, within its discretion, determines that it no 
longer needs to collect the interest and principal of any negotiable 
securities seized pursuant to paragraphs (a) and (b) of this section, or 
to retain the proceeds of their sale, it must return any of the 
employer's negotiable securities still in its possession and any 
remaining proceeds of their sale.



Sec.703.311  Required reports; examination of self-insurer accounts.

    (a) Upon the Office's request, each self-insurer must submit the 
following reports:
    (1) A certified financial statement of the self-insurer's assets and 
liabilities, or a balance sheet.
    (2) A sworn statement showing by classifications the payroll of 
employees of the self-insurer who are engaged in employment within the 
purview of the LHWCA or any of its extensions.
    (3) A sworn statement covering the six-month period preceding the 
date of such report, listing by compensation districts all death and 
injury cases which have occurred during such period, together with a 
report of the status of all outstanding claims showing the particulars 
of each case.
    (b) Whenever it considers necessary, the Office may inspect or 
examine a self-insurer's books of account, records, and other papers to 
verify any financial statement or other information the self-insurer 
furnished to the Office in any report required by this section, or any 
other section of the regulations in this part. The self-insurer must 
permit the Office or its duly authorized representative to make the 
inspection or examination. Alternatively, the Office may accept an 
adequate report of a certified public accountant.



Sec.703.312  Period of authorization as self-insurer.

    (a) Self-insurance authorizations will remain in effect for so long 
as the self-insurer complies with the requirements of the Act, the 
regulations in this part, and OWCP.
    (b) A self-insurer who has secured its liability by depositing an 
indemnity bond with the Office will, on or about May 10 of each year, 
receive from the Office a form for executing a bond that will continue 
its self-insurance authorization. The submission of such bond, duly 
executed in the amount indicated by the Office, will be deemed a 
condition of the continuing authorization.



Sec.703.313  Revocation of authorization to self-insure.

    The Office may for good cause shown suspend or revoke the 
authorization of any self-insurer. Failure by a self-insurer to comply 
with any provision or requirement of law or of the regulations in this 
part, or with any lawful order or communication of the Office, or the 
failure or insolvency of the surety on its indemnity bond, or impairment 
of financial responsibility of such self-insurer, shall be deemed good 
cause for suspension or revocation.



            Subpart E_Issuance of Certificates of Compliance



Sec.703.501  Issuance of certificates of compliance.

    Every employer who has secured the payment of compensation as 
required by 33 U.S.C. 932 and by the regulations in this part may 
request a certificate from the district director in the compensation 
district in which he has operations, and for which a certificate is 
required by 33 U.S.C. 937, showing that

[[Page 246]]

such employer has secured the payment of compensation. Only one such 
certificate will be issued to an employer in a compensation district, 
and it will be valid only during the period for which such employer has 
secured such payment. An employer so desiring may have photocopies of 
such a certificate made for use in different places within the 
compensation district. Two forms of such certificates have been provided 
by the Office, one form for use where the employer has obtained 
insurance generally under these regulations, and one for use where the 
employer has been authorized as a self-insurer.



Sec.703.502  Same; employer operating temporarily in another compensation 

district.

    A district director receiving a report of the issuance of a policy 
of insurance with the notation authorized by Sec.703.119, will file 
such report until he receives from the insured employer named therein a 
request for certificate of compliance, giving the address of the 
employer within the compensation district of such district director. 
Upon receipt of such a request the district director will send the 
proper certificate of compliance to such employer at such address.



Sec.703.503  Return of certificates of compliance.

    Upon the termination by expiration, cancellation or otherwise, of a 
policy of insurance issued under the provisions of law and these 
regulations, or the revocation or termination of the privilege of self-
insurance granted by the Office, all certificates of compliance issued 
on the basis of such insurance or self-insurance shall be void and shall 
be returned by the employer to the district director issuing them with a 
statement of the reason for such return. An employer holding certificate 
of compliance under an insurance policy which has expired, pending 
renewal of such insurance need not return such certificate of compliance 
if such expired insurance is promptly replaced. An employer who has 
secured renewal of insurance upon the expiration of policy under said 
Act or whose self-insurance thereunder is reauthorized without a break 
in the continuity thereof need not return an expired certificate of 
compliance.



PART 704_SPECIAL PROVISIONS FOR LHWCA EXTENSIONS--Table of Contents



Sec.
704.001 Extensions covered by this part.
704.002 Scope of part.

                            Defense Base Act

704.101 Administration; compensation districts.
704.102 Commutation of payments to aliens and nonresidents.
704.103 Removal of certain minimums when computing or paying 
          compensation.
704.151 DBA endorsement.

             District of Columbia Workmen's Compensation Act

704.201 Administration; compensation districts.
704.251 DCCA endorsement.

                    Outer Continental Shelf Lands Act

704.301 Administration; compensation districts.
704.351 OCSLA endorsement.

               Nonappropriated Fund Instrumentalities Act

704.401 Administration; compensation districts.
704.451 NFIA endorsement.

    Authority: 5 U.S.C. 301; Reorg. Plan No. 6 of 1950, 15 FR 3174, 64 
Stat. 1263; 33 U.S.C. 939; 36 D.C. Code 501 et seq.; 42 U.S.C. 1651 et 
seq.; 43 U.S.C. 1331; 5 U.S.C. 6171 et seq.; Secretary's Order 1-89; 
Employment Standards Order No. 90-02.

    Source: 38 FR 26877, Sept. 26, 1973, unless otherwise noted.



Sec.704.001  Extensions covered by this part.

    (a) Defense Base Act (DBA).
    (b) District of Columbia Workmen's Compensation Act (DCCA).
    (c) Outer Continental Shelf Lands Act (OCSLA).
    (d) Nonappropriated Fund Instrumentalities Act (NFIA).



Sec.704.002  Scope of part.

    The regulations governing the administration of the LHWCA as set 
forth in parts 702 and 703 of this subchapter govern the administration 
of the LHWCA extensions (see Sec.704.001) in

[[Page 247]]

nearly every respect, and are not repeated in this part 704. Such 
special provisions as are necessary to the proper administration of each 
of the extensions are set forth in this part. To the extent of any 
inconsistency between regulations in parts 702 and 703 of this 
subchapter and those in this part, the latter supersedes those in parts 
702 and 703 of this subchapter.

                            Defense Base Act



Sec.704.101  Administration; compensation districts.

    For the purpose of administration of this Act areas assigned to the 
compensation districts established for administration of the 
Longshoremen's and Harbor Workers' Compensation Act as set forth in part 
702 of this subchapter shall be extended in the following manner to 
include:
    (a) Canada, east of the 75th degree west longitude, Newfoundland, 
and Greenland are assigned to District No. 1.
    (b) Canada, west of the 75th degree and east of the 110th degree 
west longitude, is assigned to District No. 10.
    (c) Canada, west of the 110th degree west longitude, and all areas 
in the Pacific Ocean north of the 45th degree north latitude are 
assigned to District No. 14.
    (d) All areas west of the continents of North and South America 
(except coastal islands) to the 60th degree east longitude, except for 
Iran, are assigned to District No. 15.
    (e) Mexico, Central and South America (including coastal islands); 
areas east of the continents of North and South America to the 60th 
degree east longitude, including Iran, and any other areas or locations 
not covered under any other district office, are assigned to District 
No. 2.



Sec.704.102  Commutation of payments to aliens and nonresidents.

    Authority to commute payments to aliens and nonnationals who are not 
residents of the United States and Canada, section 2(b) of the Defense 
Base Act, 42 U.S.C. 1652(b), though separately stated in this Act, is 
identical in language to section 9(g) of the Longshoremen's Act. Thus, 
except for the different statutory citation, the LHWCA regulation at 
Sec.702.142 of this subchapter shall apply.



Sec.704.103  Removal of certain minimums when computing or paying 

compensation.

    The minimum limitation on weekly compensation for disability 
established by section 6 of the LHWCA, 33 U.S.C. 906, and the minimum 
limit on the average weekly wages on which death benefits are to be 
computed under section 9 of the LHWCA, 33 U.S.C. 909, shall not apply in 
computing compensation and death benefits under this Act; section 2(a), 
42 U.S.C. 1652(a).



Sec.704.151  DBA endorsement.

    The following form of endorsement applicable to the standard 
workmen's compensation and employers' liability policy shall be used, if 
required by the OWCP, with the form of policy approved by the Office for 
use by an authorized carrier:

    For attachment to Policy No. ----,
    The obligations of the policy include the Longshoremen's and Harbor 
Workers' Compensation Act, as extended by the provisions of the Defense 
Base Act, and all laws amendatory thereof or supplementary thereto which 
may be or become effective while this policy is in force.
    The Company will be subject to the provisions of 33 U.S.C. 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the Company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The Company agrees to abide by all the provisions of said Acts and 
all lawful rules, regulations, orders, and decisions of the Office of 
Workmen's Compensation Programs, Department of Labor, unless and until 
set aside, modified, or reversed by appropriate appellate authority as 
provided for by said Acts.
    This endorsement shall not be canceled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
and to this employer.
    All terms, conditions, requirements, and obligations expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.

[[Page 248]]

             District of Columbia Workmen's Compensation Act



Sec.704.201  Administration; compensation districts.

    For the purpose of administration of this Act, the District of 
Columbia shall be the compensation district and is designated as 
District No. 40.



Sec.704.251  DCCA endorsement.

    The following form of endorsement applicable to the standard 
workmen's compensation and employer's liability policy shall be used, if 
required by the OWCP, with the form of policy approved by the Office for 
use by an authorized carrier:

    For attachment to Policy No. ----,
    The obligations of the policy include the District of Columbia 
Workmen's Compensation Act, and the applicable provisions of the 
Longshoremen's and Harbor Workers' Compensation Act, and all laws 
amendatory of either of said Acts or supplementary thereto which may be 
or become effective while this policy is in force.
    The company will be subject to the provisions of 33 U.S.C. 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The company agrees to abide by all the provisions of said District 
of Columbia Workmen's Compensation Act and all lawful rules, 
regulations, orders, and decisions of the Office of Workmen's 
Compensation Programs, Department of Labor, unless and until set aside, 
modified, or reversed by appropriate appellate authority as provided for 
by said Act.
    This endorsement shall not be canceled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
for the District of Columbia and to this employer.
    All terms, conditions, requirements, and obligations expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.

                    Outer Continental Shelf Lands Act



Sec.704.301  Administration; compensation districts.

    For the purpose of administration of this Act, the compensation 
districts established under the Longshoremen's and Harbor Workers' 
Compensation Act as set forth in part 702 of this subchapter shall 
administer this Act, and their jurisdiction for this purpose is 
extended, where appropriate, to include those parts of the Outer 
Continental Shelf adjacent to the State or States in such districts 
having adjacent shelf areas.



Sec.704.351  OCSLA endorsement.

    The following form of endorsement applicable to the standard 
workmen's compensation and employer's liability policy shall be used, if 
required by the OWCP, with the form of policy approved by the Office for 
use by an authorized carrier:

    For attachment to Policy No. ----,
    The obligations of the policy include the Longshoremen's and Harbor 
Workers' Compensation Act, as extended by the Outer Continental Shelf 
Lands Act, and all the laws amendatory thereof or supplementary thereto 
which may be or become effective while this policy is in force.
    The company will be subject to the provisions of 33 U.S.C. 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The company agrees to abide by all the provisions of said laws and 
all the lawful rules, regulations, orders and decisions of the Office of 
Workmen's Compensation Programs, Department of Labor, until set aside, 
modified, or reversed by appropriate appellate authority as provided for 
by said Acts.
    This endorsement shall not be canceled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
and to his employer.
    All terms, conditions, requirements, and obligations expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.

               Nonappropriated Fund Instrumentalities Act



Sec.704.401  Administration; compensation districts.

    For the purpose of administration of this Act within the continental 
United

[[Page 249]]

States, Hawaii, and Alaska, the compensation districts established for 
administration of the Longshoremen's and Harbor Workers' Compensation 
Act as set forth in part 702 of this subchapter are established as the 
administrative districts under this Act. For the purpose of 
administration of this Act outside the continental United States, 
Alaska, and Hawaii, the compensation districts established for such 
overseas administration of the Defense Base Act as set forth in Sec.
704.101 are established as the administrative districts under this Act.



Sec.704.451  NFIA endorsement.

    The following form of endorsement applicable to the standard 
workmen's compensation and employer's liability policy shall be used, if 
required by the OWCP, with the form of policy approved by the Office for 
use by an authorized carrier:

    For attachment to Policy No. ----,
    The obligations of the policy include the Longshoremen's and Harbor 
Workers' Compensation Act, as extended by the Nonappropriated Fund 
Instrumentalities Act, and all of the laws amendatory thereof or 
supplementary thereto which may be or become effective while this policy 
is in force.
    The company will be subject to the provisions of 33 U.S.C 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The company agrees to abide by all the provisions of said Acts and 
all the lawful rules, regulations, orders, and decisions of the Office 
of Workmen's Compensation Programs, Department of Labor, unless and 
until set aside, modified, or reversed by appropriate appellate 
authority as provided for by said Acts.
    This endorsement shall not be canceled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
and to the within named employer.
    All terms, conditions, requirements, and obligations expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.

[[Page 250]]



SUBCHAPTER B_FEDERAL COAL MINE HEALTH AND SAFETY ACT OF 1969, AS AMENDED



PART 718_STANDARDS FOR DETERMINING COAL MINERS' TOTAL DISABILITY OR DEATH DUE 

TO PNEUMOCONIOSIS--Table of Contents



                            Subpart A_General

Sec.
718.1 Statutory provisions.
718.2 Applicability of this part.
718.3 Scope and intent of this part.
718.4 Definitions and use of terms.

       Subpart B_Criteria for the Development of Medical Evidence

718.101 General.
718.102 Chest radiographs (X-rays).
718.103 Pulmonary function tests.
718.104 Report of physical examinations.
718.105 Arterial blood-gas studies.
718.106 Autopsy; biopsy.
718.107 Other medical evidence.

              Subpart C_Determining Entitlement to Benefits

718.201 Definition of pneumoconiosis.
718.202 Determining the existence of pneumoconiosis.
718.203 Establishing relationship of pneumoconiosis to coal mine 
          employment.
718.204 Total disability and disability causation defined; criteria for 
          determining total disability and total disability due to 
          pneumoconiosis.
718.205 Death due to pneumoconiosis.
718.206 Effect of findings by persons or agencies.

     Subpart D_Presumptions Applicable to Eligibility Determinations

718.301 Establishing length of employment as a miner.
718.302 Relationship of pneumoconiosis to coal mine employment.
718.303 [Reserved]
718.304 Irrebuttable presumption of total disability or death due to 
          pneumoconiosis.
718.305 Presumption of pneumoconiosis.
718.306 [Reserved]

Appendix A to Part 718--Standards for Administration and Interpretation 
          of Chest Radiographs (X-rays)
Appendix B to Part 718--Standards for Administration and Interpretation 
          of Pulmonary Function Tests. Tables B1, B2, B3, B4, B5, B6
Appendix C to Part 718--Blood-Gas Tables

    Authority: 5 U.S.C. 301; Reorganization Plan No. 6 of 1950, 15 FR 
3174; 30 U.S.C. 901 et seq., 902(f), 934, 936, 945; 33 U.S.C. 901 et 
seq.; 42 U.S.C. 405; Secretary's Order 7-87, 52 FR 48466, Employment 
Standards Order No. 90-02.

    Source: 45 FR 13678, Feb. 29, 1980, unless otherwise noted.



                            Subpart A_General

    Source: 65 FR 80045, Dec. 20, 2000, unless otherwise noted.



Sec.718.1  Statutory provisions.

    Section 402(f) of the Act authorizes the Secretary of Labor to 
establish criteria for determining total disability or death due to 
pneumoconiosis to be applied in the processing and adjudication of 
claims filed under Part C of the Act. Section 402(f) further authorizes 
the Secretary of Labor, in consultation with the National Institute for 
Occupational Safety and Health, to establish criteria for all 
appropriate medical tests administered in connection with a claim for 
benefits. Section 413(b) of the Act authorizes the Secretary of Labor to 
establish criteria for the techniques used to take chest roentgenograms 
(x-rays) in connection with a claim for benefits under the Act.

[78 FR 59114, Sept. 25, 2013]



Sec.718.2  Applicability of this part.

    (a) With the exception of the second sentence of Sec.718.204(a), 
this part is applicable to the adjudication of all claims filed on or 
after June 30, 1982 under Part C of the Act. It provides standards for 
establishing entitlement to benefits under the Act and describes the 
criteria for the development of medical evidence used in establishing 
such entitlement. The second sentence of Sec.718.204(a) is applicable 
to the adjudication of all claims filed after January 19, 2001.
    (b) Publication of certain provisions or parts of certain provisions 
that apply only to claims filed prior to June 30, 1982, or to claims 
subject to Section 435 of the Act, has been discontinued

[[Page 251]]

because those provisions affect an increasingly smaller number of 
claims. The version of Part 718 set forth in 20 CFR, parts 500 to end, 
edition revised as of April 1, 2010, applies to the adjudication of all 
claims filed prior to June 30, 1982, as appropriate.
    (c) The provisions of this part must, to the extent appropriate, be 
construed together in the adjudication of claims.

[78 FR 59114, Sept. 25, 2013]



Sec.718.3  Scope and intent of this part.

    (a) This part sets forth the standards to be applied in determining 
whether a coal miner is or was totally disabled due to pneumoconiosis or 
died due to pneumoconiosis. It also specifies the procedures and 
requirements to be followed in conducting medical examinations and in 
administering various tests relevant to such determinations.
    (b) This part is designed to interpret the presumptions contained in 
section 411(c) of the Act, evidentiary standards and criteria contained 
in section 413(b) of the Act and definitional requirements and standards 
contained in section 402(f) of the Act within a coherent framework for 
the adjudication of claims. It is intended that these enumerated 
provisions of the Act be construed as provided in this part.

[65 FR 80045, Dec. 20, 2000, as amended at 78 FR 59114, Sept. 25, 2013]



Sec.718.4  Definitions and use of terms.

    Except as is otherwise provided by this part, the definitions and 
usages of terms contained in Sec.725.101 of subpart A of part 725 of 
this title shall be applicable to this part.



       Subpart B_Criteria for the Development of Medical Evidence

    Source: 65 FR 80045, Dec. 20, 2000, unless otherwise noted.



Sec.718.101  General.

    (a) The Office of Workers' Compensation Programs (hereinafter OWCP 
or the Office) shall develop the medical evidence necessary for a 
determination with respect to each claimant's entitlement to benefits. 
Each miner who files a claim for benefits under the Act shall be 
provided an opportunity to substantiate his or her claim by means of a 
complete pulmonary evaluation including, but not limited to, a chest 
roentgenogram (X-ray), physical examination, pulmonary function tests 
and a blood-gas study.
    (b) The standards for the administration of clinical tests and 
examinations contained in this subpart shall apply to all evidence 
developed by any party after January 19, 2001 in connection with a claim 
governed by this part (see Sec. Sec.725.406(b), 725.414(a), 
725.456(d)). These standards shall also apply to claims governed by part 
727 (see 20 CFR 725.4(d)), but only for clinical tests or examinations 
conducted after January 19, 2001. Any clinical test or examination 
subject to these standards shall be in substantial compliance with the 
applicable standard in order to constitute evidence of the fact for 
which it is proffered. Unless otherwise provided, any evidence which is 
not in substantial compliance with the applicable standard is 
insufficient to establish the fact for which it is proffered.



Sec.718.102  Chest roentgenograms (X-rays).

    (a) A chest roentgenogram (X-ray) shall be of suitable quality for 
proper classification of pneumoconiosis and shall conform to the 
standards for administration and interpretation of chest X-rays as 
described in Appendix A.
    (b) A chest X-ray to establish the existence of pneumoconiosis shall 
be classified as Category 1, 2, 3, A, B, or C, according to the 
International Labour Organization Union Internationale Contra Cancer/
Cincinnati (1971) International Classification of Radiographs of the 
Pneumoconioses (ILO-U/C 1971), or subsequent revisions thereof. This 
document is available from the Division of Coal Mine Workers' 
Compensation in the U.S. Department of Labor, Washington, D.C., 
telephone (202) 693-0046, and from the National Institute for 
Occupational Safety and Health (NIOSH), located in Cincinnati, Ohio, 
telephone (513) 841-4428) and Morgantown, West Virginia, telephone (304) 
285-5749. A chest X-ray classified as Category Z under the ILO 
Classification (1958) or Short Form (1968) shall be reclassified as 
Category 0 or Category 1

[[Page 252]]

as appropriate, and only the latter accepted as evidence of 
pneumoconiosis. A chest X-ray classified under any of the foregoing 
classifications as Category 0, including sub-categories 0--, 0/0, or 0/1 
under the UICC/Cincinnati (1968) Classification or the ILO-U/C 1971 
Classification does not constitute evidence of pneumoconiosis.
    (c) A description and interpretation of the findings in terms of the 
classifications described in paragraph (b) of this section shall be 
submitted by the examining physician along with the film. The report 
shall specify the name and qualifications of the person who took the 
film and the name and qualifications of the physician interpreting the 
film. If the physician interpreting the film is a Board-certified or 
Board-eligible radiologist or a certified ``B'' reader (see Sec.
718.202), he or she shall so indicate. The report shall further specify 
that the film was interpreted in compliance with this paragraph.
    (d) The original film on which the X-ray report is based shall be 
supplied to the Office, unless prohibited by law, in which event the 
report shall be considered as evidence only if the original film is 
otherwise available to the Office and other parties. Where the chest X-
ray of a deceased miner has been lost, destroyed or is otherwise 
unavailable, a report of a chest X-ray submitted by any party shall be 
considered in connection with the claim.
    (e) Except as provided in this paragraph, no chest X-ray shall 
constitute evidence of the presence or absence of pneumoconiosis unless 
it is conducted and reported in accordance with the requirements of this 
section and Appendix A. In the absence of evidence to the contrary, 
compliance with the requirements of Appendix A shall be presumed. In the 
case of a deceased miner where the only available X-ray does not 
substantially comply with paragraphs (a) through (d), such X-ray may 
form the basis for a finding of the presence or absence of 
pneumoconiosis if it is of sufficient quality for determining the 
presence or absence of pneumoconiosis and such X-ray was interpreted by 
a Board-certified or Board-eligible radiologist or a certified ``B'' 
reader (see Sec.718.202).



Sec.718.103  Pulmonary function tests.

    (a) Any report of pulmonary function tests submitted in connection 
with a claim for benefits shall record the results of flow versus volume 
(flow-volume loop). The instrument shall simultaneously provide records 
of volume versus time (spirometric tracing). The report shall provide 
the results of the forced expiratory volume in one second (FEV1) and the 
forced vital capacity (FVC). The report shall also provide the FEV1/FVC 
ratio, expressed as a percentage. If the maximum voluntary ventilation 
(MVV) is reported, the results of such test shall be obtained 
independently rather than calculated from the results of the FEV1.
    (b) All pulmonary function test results submitted in connection with 
a claim for benefits shall be accompanied by three tracings of the flow 
versus volume and the electronically derived volume versus time 
tracings. If the MVV is reported, two tracings of the MVV whose values 
are within 10% of each other shall be sufficient. Pulmonary function 
test results developed in connection with a claim for benefits shall 
also include a statement signed by the physician or technician 
conducting the test setting forth the following:
    (1) Date and time of test;
    (2) Name, DOL claim number, age, height, and weight of claimant at 
the time of the test;
    (3) Name of technician;
    (4) Name and signature of physician supervising the test;
    (5) Claimant's ability to understand the instructions, ability to 
follow directions and degree of cooperation in performing the tests. If 
the claimant is unable to complete the test, the person executing the 
report shall set forth the reasons for such failure;
    (6) Paper speed of the instrument used;
    (7) Name of the instrument used;
    (8) Whether a bronchodilator was administered. If a bronchodilator 
is administered, the physician's report must detail values obtained both 
before and after administration of the bronchodilator and explain the 
significance of the results obtained; and

[[Page 253]]

    (9) That the requirements of paragraphs (b) and (c) of this section 
have been complied with.
    (c) Except as provided in this paragraph, no results of a pulmonary 
function study shall constitute evidence of the presence or absence of a 
respiratory or pulmonary impairment unless it is conducted and reported 
in accordance with the requirements of this section and Appendix B to 
this part. In the absence of evidence to the contrary, compliance with 
the requirements of Appendix B shall be presumed. In the case of a 
deceased miner, where no pulmonary function tests are in substantial 
compliance with paragraphs (a) and (b) and Appendix B, noncomplying 
tests may form the basis for a finding if, in the opinion of the 
adjudication officer, the tests demonstrate technically valid results 
obtained with good cooperation of the miner.



Sec.718.104  Report of physical examinations.

    (a) A report of any physical examination conducted in connection 
with a claim shall be prepared on a medical report form supplied by the 
Office or in a manner containing substantially the same information. Any 
such report shall include the following information and test results:
    (1) The miner's medical and employment history;
    (2) All manifestations of chronic respiratory disease;
    (3) Any pertinent findings not specifically listed on the form;
    (4) If heart disease secondary to lung disease is found, all 
symptoms and significant findings;
    (5) The results of a chest X-ray conducted and interpreted as 
required by Sec.718.102; and
    (6) The results of a pulmonary function test conducted and reported 
as required by Sec.718.103. If the miner is physically unable to 
perform a pulmonary function test or if the test is medically 
contraindicated, in the absence of evidence establishing total 
disability pursuant to Sec.718.304, the report must be based on other 
medically acceptable clinical and laboratory diagnostic techniques, such 
as a blood gas study.
    (b) In addition to the requirements of paragraph (a), a report of 
physical examination may be based on any other procedures such as 
electrocardiogram, blood-gas studies conducted and reported as required 
by Sec.718.105, and other blood analyses which, in the physician's 
opinion, aid in his or her evaluation of the miner.
    (c) In the case of a deceased miner, where no report is in 
substantial compliance with paragraphs (a) and (b), a report prepared by 
a physician who is unavailable may nevertheless form the basis for a 
finding if, in the opinion of the adjudication officer, it is 
accompanied by sufficient indicia of reliability in light of all 
relevant evidence.
    (d) Treating physician. In weighing the medical evidence of record 
relevant to whether the miner suffers, or suffered, from pneumoconiosis, 
whether the pneumoconiosis arose out of coal mine employment, and 
whether the miner is, or was, totally disabled by pneumoconiosis or died 
due to pneumoconiosis, the adjudication officer must give consideration 
to the relationship between the miner and any treating physician whose 
report is admitted into the record. Specifically, the adjudication 
officer shall take into consideration the following factors in weighing 
the opinion of the miner's treating physician:
    (1) Nature of relationship. The opinion of a physician who has 
treated the miner for respiratory or pulmonary conditions is entitled to 
more weight than a physician who has treated the miner for non-
respiratory conditions;
    (2) Duration of relationship. The length of the treatment 
relationship demonstrates whether the physician has observed the miner 
long enough to obtain a superior understanding of his or her condition;
    (3) Frequency of treatment. The frequency of physician-patient 
visits demonstrates whether the physician has observed the miner often 
enough to obtain a superior understanding of his or her condition; and
    (4) Extent of treatment. The types of testing and examinations 
conducted during the treatment relationship demonstrate whether the 
physician has obtained superior and relevant information concerning the 
miner's condition.

[[Page 254]]

    (5) In the absence of contrary probative evidence, the adjudication 
officer shall accept the statement of a physician with regard to the 
factors listed in paragraphs (d)(1) through (4) of this section. In 
appropriate cases, the relationship between the miner and his treating 
physician may constitute substantial evidence in support of the 
adjudication officer's decision to give that physician's opinion 
controlling weight, provided that the weight given to the opinion of a 
miner's treating physician shall also be based on the credibility of the 
physician's opinion in light of its reasoning and documentation, other 
relevant evidence and the record as a whole.



Sec.718.105  Arterial blood-gas studies.

    (a) Blood-gas studies are performed to detect an impairment in the 
process of alveolar gas exchange. This defect will manifest itself 
primarily as a fall in arterial oxygen tension either at rest or during 
exercise. No blood-gas study shall be performed if medically 
contraindicated.
    (b) A blood-gas study shall initially be administered at rest and in 
a sitting position. If the results of the blood-gas test at rest do not 
satisfy the requirements of Appendix C to this part, an exercise blood-
gas test shall be offered to the miner unless medically contraindicated. 
If an exercise blood-gas test is administered, blood shall be drawn 
during exercise.
    (c) Any report of a blood-gas study submitted in connection with a 
claim shall specify:
    (1) Date and time of test;
    (2) Altitude and barometric pressure at which the test was 
conducted;
    (3) Name and DOL claim number of the claimant;
    (4) Name of technician;
    (5) Name and signature of physician supervising the study;
    (6) The recorded values for PC02, P02, and PH, which have been 
collected simultaneously (specify values at rest and, if performed, 
during exercise);
    (7) Duration and type of exercise;
    (8) Pulse rate at the time the blood sample was drawn;
    (9) Time between drawing of sample and analysis of sample; and
    (10) Whether equipment was calibrated before and after each test.
    (d) If one or more blood-gas studies producing results which meet 
the appropriate table in Appendix C is administered during a 
hospitalization which ends in the miner's death, then any such study 
must be accompanied by a physician's report establishing that the test 
results were produced by a chronic respiratory or pulmonary condition. 
Failure to produce such a report will prevent reliance on the blood-gas 
study as evidence that the miner was totally disabled at death. (e) In 
the case of a deceased miner, where no blood gas tests are in 
substantial compliance with paragraphs (a), (b), and (c), noncomplying 
tests may form the basis for a finding if, in the opinion of the 
adjudication officer, the only available tests demonstrate technically 
valid results. This provision shall not excuse compliance with the 
requirements in paragraph (d) for any blood gas study administered 
during a hospitalization which ends in the miner's death.



Sec.718.106  Autopsy; biopsy.

    (a) A report of an autopsy or biopsy submitted in connection with a 
claim shall include a detailed gross macroscopic and microscopic 
description of the lungs or visualized portion of a lung. If a surgical 
procedure has been performed to obtain a portion of a lung, the evidence 
shall include a copy of the surgical note and the pathology report of 
the gross and microscopic examination of the surgical specimen. If an 
autopsy has been performed, a complete copy of the autopsy report shall 
be submitted to the Office.
    (b) In the case of a miner who died prior to March 31, 1980, an 
autopsy or biopsy report shall be considered even when the report does 
not substantially comply with the requirements of this section. A 
noncomplying report concerning a miner who died prior to March 31, 1980, 
shall be accorded the appropriate weight in light of all relevant 
evidence.
    (c) A negative biopsy is not conclusive evidence that the miner does 
not have pneumoconiosis. However, where

[[Page 255]]

positive findings are obtained on biopsy, the results will constitute 
evidence of the presence of pneumoconiosis.



Sec.718.107  Other medical evidence.

    (a) The results of any medically acceptable test or procedure 
reported by a physician and not addressed in this subpart, which tends 
to demonstrate the presence or absence of pneumoconiosis, the sequelae 
of pneumoconiosis or a respiratory or pulmonary impairment, may be 
submitted in connection with a claim and shall be given appropriate 
consideration.
    (b) The party submitting the test or procedure pursuant to this 
section bears the burden to demonstrate that the test or procedure is 
medically acceptable and relevant to establishing or refuting a 
claimant's entitlement to benefits.



              Subpart C_Determining Entitlement to Benefits

    Source: 65 FR 80045, Dec. 20, 2000, unless otherwise noted.



Sec.718.201  Definition of pneumoconiosis.

    (a) For the purpose of the Act, ``pneumoconiosis'' means a chronic 
dust disease of the lung and its sequelae, including respiratory and 
pulmonary impairments, arising out of coal mine employment. This 
definition includes both medical, or ``clinical'', pneumoconiosis and 
statutory, or ``legal'', pneumoconiosis.
    (1) Clinical Pneumoconiosis. ``Clinical pneumoconiosis'' consists of 
those diseases recognized by the medical community as pneumoconioses, 
i.e., the conditions characterized by permanent deposition of 
substantial amounts of particulate matter in the lungs and the fibrotic 
reaction of the lung tissue to that deposition caused by dust exposure 
in coal mine employment. This definition includes, but is not limited 
to, coal workers' pneumoconiosis, anthracosilicosis, anthracosis, 
anthrosilicosis, massive pulmonary fibrosis, silicosis or 
silicotuberculosis, arising out of coal mine employment.
    (2) Legal Pneumoconiosis. ``Legal pneumoconiosis'' includes any 
chronic lung disease or impairment and its sequelae arising out of coal 
mine employment. This definition includes, but is not limited to, any 
chronic restrictive or obstructive pulmonary disease arising out of coal 
mine employment.
    (b) For purposes of this section, a disease ``arising out of coal 
mine employment'' includes any chronic pulmonary disease or respiratory 
or pulmonary impairment significantly related to, or substantially 
aggravated by, dust exposure in coal mine employment.
    (c) For purposes of this definition, ``pneumoconiosis'' is 
recognized as a latent and progressive disease which may first become 
detectable only after the cessation of coal mine dust exposure.



Sec.718.202  Determining the existence of pneumoconiosis.

    (a) A finding of the existence of pneumoconiosis may be made as 
follows:
    (1) A chest X-ray conducted and classified in accordance with Sec.
718.102 may form the basis for a finding of the existence of 
pneumoconiosis. Except as otherwise provided in this section, where two 
or more X-ray reports are in conflict, in evaluating such X-ray reports 
consideration shall be given to the radiological qualifications of the 
physicians interpreting such X-rays.
    (i) In all claims filed before January 1, 1982, where there is other 
evidence of pulmonary or respiratory impairment, a Board-certified or 
Board-eligible radiologist's interpretation of a chest X-ray shall be 
accepted by the Office if the X-ray is in compliance with the 
requirements of Sec.718.102 and if such X-ray has been taken by a 
radiologist or qualified radiologic technologist or technician and there 
is no evidence that the claim has been fraudulently represented. 
However, these limitations shall not apply to any claim filed on or 
after January 1, 1982.
    (ii) The following definitions shall apply when making a finding in 
accordance with this paragraph.
    (A) The term other evidence means medical tests such as blood-gas 
studies, pulmonary function studies or physical examinations or medical 
histories which establish the presence of a chronic pulmonary, 
respiratory or cardio-pulmonary condition, and in the

[[Page 256]]

case of a deceased miner, in the absence of medical evidence to the 
contrary, affidavits of persons with knowledge of the miner's physical 
condition.
    (B) Pulmonary or respiratory impairment means inability of the human 
respiratory apparatus to perform in a normal manner one or more of the 
three components of respiration, namely, ventilation, perfusion and 
diffusion.
    (C) Board-certified means certification in radiology or diagnostic 
roentgenology by the American Board of Radiology, Inc. or the American 
Osteopathic Association.
    (D) Board-eligible means the successful completion of a formal 
accredited residency program in radiology or diagnostic roentgenology.
    (E) Certified `B' reader or `B' reader means a physician who has 
demonstrated proficiency in evaluating chest roentgenograms for 
roentgenographic quality and in the use of the ILO-U/C classification 
for interpreting chest roentgenograms for pneumoconiosis and other 
diseases by taking and passing a specially designed proficiency 
examination given on behalf of or by the Appalachian Laboratory for 
Occupational Safety and Health. See 42 CFR 37.51(b)(2).
    (F) Qualified radiologic technologist or technician means an 
individual who is either certified as a registered technologist by the 
American Registry of Radiologic Technologists or licensed as a 
radiologic technologist by a state licensing board.
    (2) A biopsy or autopsy conducted and reported in compliance with 
Sec.718.106 may be the basis for a finding of the existence of 
pneumoconiosis. A finding in an autopsy or biopsy of anthracotic 
pigmentation, however, shall not be sufficient, by itself, to establish 
the existence of pneumoconiosis. A report of autopsy shall be accepted 
unless there is evidence that the report is not accurate or that the 
claim has been fraudulently represented.
    (3) If the presumptions described in Sec.718.304 or Sec.718.305 
are applicable, it must be presumed that the miner is or was suffering 
from pneumoconiosis.
    (4) A determination of the existence of pneumoconiosis may also be 
made if a physician, exercising sound medical judgment, notwithstanding 
a negative X-ray, finds that the miner suffers or suffered from 
pneumoconiosis as defined in Sec.718.201. Any such finding shall be 
based on objective medical evidence such as blood-gas studies, 
electrocardiograms, pulmonary function studies, physical performance 
tests, physical examination, and medical and work histories. Such a 
finding shall be supported by a reasoned medical opinion.
    (b) No claim for benefits shall be denied solely on the basis of a 
negative chest X-ray.
    (c) A determination of the existence of pneumoconiosis shall not be 
made solely on the basis of a living miner's statements or testimony. 
Nor shall such a determination be made upon a claim involving a deceased 
miner filed on or after January 1, 1982, solely based upon the 
affidavit(s) (or equivalent sworn testimony) of the claimant and/or his 
or her dependents who would be eligible for augmentation of the 
claimant's benefits if the claim were approved.

[65 FR 80045, Dec. 20, 2000, as amended at 79 FR 59114, Sept. 25, 2014]



Sec.718.203  Establishing relationship of pneumoconiosis to coal mine 

employment.

    (a) In order for a claimant to be found eligible for benefits under 
the Act, it must be determined that the miner's pneumoconiosis arose at 
least in part out of coal mine employment. The provisions in this 
section set forth the criteria to be applied in making such a 
determination.
    (b) If a miner who is suffering or suffered from pneumoconiosis was 
employed for ten years or more in one or more coal mines, there shall be 
a rebuttable presumption that the pneumoconiosis arose out of such 
employment.
    (c) If a miner who is suffering or suffered from pneumoconiosis was 
employed less than ten years in the nation's coal mines, it shall be 
determined that such pneumoconiosis arose out of that employment only if 
competent evidence establishes such a relationship.

[[Page 257]]



Sec.718.204  Total disability and disability causation defined; criteria for 

determining total disability and total disability due to pneumoconiosis.

    (a) General. Benefits are provided under the Act for or on behalf of 
miners who are totally disabled due to pneumoconiosis, or who were 
totally disabled due to pneumoconiosis at the time of death. For 
purposes of this section, any nonpulmonary or nonrespiratory condition 
or disease, which causes an independent disability unrelated to the 
miner's pulmonary or respiratory disability, shall not be considered in 
determining whether a miner is totally disabled due to pneumoconiosis. 
If, however, a nonpulmonary or nonrespiratory condition or disease 
causes a chronic respiratory or pulmonary impairment, that condition or 
disease shall be considered in determining whether the miner is or was 
totally disabled due to pneumoconiosis.
    (b)(1) Total disability defined. A miner shall be considered totally 
disabled if the irrebuttable presumption described in Sec.718.304 
applies. If that presumption does not apply, a miner shall be considered 
totally disabled if the miner has a pulmonary or respiratory impairment 
which, standing alone, prevents or prevented the miner:
    (i) From performing his or her usual coal mine work; and
    (ii) From engaging in gainful employment in the immediate area of 
his or her residence requiring the skills or abilities comparable to 
those of any employment in a mine or mines in which he or she previously 
engaged with some regularity over a substantial period of time.
    (2) Medical criteria. In the absence of contrary probative evidence, 
evidence which meets the standards of either paragraphs (b)(2)(i), (ii), 
(iii), or (iv) of this section shall establish a miner's total 
disability:
    (i) Pulmonary function tests showing values equal to or less than 
those listed in Table B1 (Males) or Table B2 (Females) in Appendix B to 
this part for an individual of the miner's age, sex, and height for the 
FEV1 test; if, in addition, such tests also reveal the values specified 
in either paragraph (b)(2)(i)(A) or (B) or (C) of this section:
    (A) Values equal to or less than those listed in Table B3 (Males) or 
Table B4 (Females) in Appendix B of this part, for an individual of the 
miner's age, sex, and height for the FVC test, or
    (B) Values equal to or less than those listed in Table B5 (Males) or 
Table B6 (Females) in Appendix B to this part, for an individual of the 
miner's age, sex, and height for the MVV test, or
    (C) A percentage of 55 or less when the results of the FEV1 test are 
divided by the results of the FVC test (FEV1/FVC equal to or less than 
55%), or
    (ii) Arterial blood-gas tests show the values listed in Appendix C 
to this part, or
    (iii) The miner has pneumoconiosis and has been shown by the medical 
evidence to be suffering from cor pulmonale with right-sided congestive 
heart failure, or
    (iv) Where total disability cannot be shown under paragraphs 
(b)(2)(i), (ii), or (iii) of this section, or where pulmonary function 
tests and/or blood gas studies are medically contraindicated, total 
disability may nevertheless be found if a physician exercising reasoned 
medical judgment, based on medically acceptable clinical and laboratory 
diagnostic techniques, concludes that a miner's respiratory or pulmonary 
condition prevents or prevented the miner from engaging in employment as 
described in paragraph (b)(1) of this section.
    (c)(1) Total disability due to pneumoconiosis defined. A miner shall 
be considered totally disabled due to pneumoconiosis if pneumoconiosis, 
as defined in Sec.718.201, is a substantially contributing cause of 
the miner's totally disabling respiratory or pulmonary impairment. 
Pneumoconiosis is a ``substantially contributing cause'' of the miner's 
disability if it:
    (i) Has a material adverse effect on the miner's respiratory or 
pulmonary condition; or
    (ii) Materially worsens a totally disabling respiratory or pulmonary 
impairment which is caused by a disease or exposure unrelated to coal 
mine employment.
    (2) Except as provided in Sec.718.305 and paragraph (b)(2)(iii) of 
this section, proof that the miner suffers or suffered from a totally 
disabling respiratory or

[[Page 258]]

pulmonary impairment as defined in paragraphs (b)(2)(i), (b)(2)(ii), 
(b)(2)(iv) and (d) of this section shall not, by itself, be sufficient 
to establish that the miner's impairment is or was due to 
pneumoconiosis. Except as provided in paragraph (d), the cause or causes 
of a miner's total disability shall be established by means of a 
physician's documented and reasoned medical report.
    (d) Lay evidence. In establishing total disability, lay evidence may 
be used in the following cases:
    (1) In a case involving a deceased miner in which the claim was 
filed prior to January 1, 1982, affidavits (or equivalent sworn 
testimony) from persons knowledgeable of the miner's physical condition 
shall be sufficient to establish total (or under Sec.718.306 partial) 
disability due to pneumoconiosis if no medical or other relevant 
evidence exists which addresses the miner's pulmonary or respiratory 
condition.
    (2) In a case involving a survivor's claim filed on or after January 
1, 1982, but prior to June 30, 1982, which is subject to Sec.718.306, 
affidavits (or equivalent sworn testimony) from persons knowledgeable of 
the miner's physical condition shall be sufficient to establish total or 
partial disability due to pneumoconiosis if no medical or other relevant 
evidence exists which addresses the miner's pulmonary or respiratory 
condition; however, such a determination shall not be based solely upon 
the affidavits or testimony of the claimant and/or his or her dependents 
who would be eligible for augmentation of the claimant's benefits if the 
claim were approved.
    (3) In a case involving a deceased miner whose claim was filed on or 
after January 1, 1982, affidavits (or equivalent sworn testimony) from 
persons knowledgeable of the miner's physical condition shall be 
sufficient to establish total disability due to pneumoconiosis if no 
medical or other relevant evidence exists which addresses the miner's 
pulmonary or respiratory condition; however, such a determination shall 
not be based solely upon the affidavits or testimony of any person who 
would be eligible for benefits (including augmented benefits) if the 
claim were approved.
    (4) Statements made before death by a deceased miner about his or 
her physical condition are relevant and shall be considered in making a 
determination as to whether the miner was totally disabled at the time 
of death.
    (5) In the case of a living miner's claim, a finding of total 
disability due to pneumoconiosis shall not be made solely on the miner's 
statements or testimony.
    (e) In determining total disability to perform usual coal mine work, 
the following shall apply in evaluating the miner's employment 
activities:
    (1) In the case of a deceased miner, employment in a mine at the 
time of death shall not be conclusive evidence that the miner was not 
totally disabled. To disprove total disability, it must be shown that at 
the time the miner died, there were no changed circumstances of 
employment indicative of his or her reduced ability to perform his or 
her usual coal mine work.
    (2) In the case of a living miner, proof of current employment in a 
coal mine shall not be conclusive evidence that the miner is not totally 
disabled unless it can be shown that there are no changed circumstances 
of employment indicative of his or her reduced ability to perform his or 
her usual coal mine work.
    (3) Changed circumstances of employment indicative of a miner's 
reduced ability to perform his or her usual coal mine work may include 
but are not limited to:
    (i) The miner's reduced ability to perform his or her customary 
duties without help; or
    (ii) The miner's reduced ability to perform his or her customary 
duties at his or her usual levels of rapidity, continuity or efficiency; 
or
    (iii) The miner's transfer by request or assignment to less vigorous 
duties or to duties in a less dusty part of the mine.



Sec.718.205  Death due to pneumoconiosis.

    (a) Benefits are provided to eligible survivors of a miner whose 
death was due to pneumoconiosis. In order to receive benefits based on a 
showing of

[[Page 259]]

death due to pneumoconiosis, a claimant must prove that:
    (1) The miner had pneumoconiosis (see Sec.718.202);
    (2) The miner's pneumoconiosis arose out of coal mine employment 
(see Sec.718.203); and
    (3) The miner's death was due to pneumoconiosis as provided by this 
section.
    (b) Death will be considered to be due to pneumoconiosis if any of 
the following criteria is met:
    (1) Where competent medical evidence establishes that pneumoconiosis 
was the cause of the miner's death, or
    (2) Where pneumoconiosis was a substantially contributing cause or 
factor leading to the miner's death or where the death was caused by 
complications of pneumoconiosis, or
    (3) Where the presumption set forth at Sec.718.304 is applicable, 
or
    (4) For survivors' claims filed after January 1, 2005, and pending 
on or after March 23, 2010, where the presumption at Sec.718.305 is 
invoked and not rebutted.
    (5) However, except where the Sec.718.304 presumption is invoked, 
survivors are not eligible for benefits where the miner's death was 
caused by a traumatic injury (including suicide) or the principal cause 
of death was a medical condition not related to pneumoconiosis, unless 
the claimant establishes (by proof or presumption) that pneumoconiosis 
was a substantially contributing cause of death.
    (6) Pneumoconiosis is a ``substantially contributing cause'' of a 
miner's death if it hastens the miner's death.

[78 FR 59114, Sept. 25, 2013]



Sec.718.206  Effect of findings by persons or agencies.

    Decisions, statements, reports, opinions, or the like, of agencies, 
organizations, physicians or other individuals, about the existence, 
cause, and extent of a miner's disability, or the cause of a miner's 
death, are admissible. If properly submitted, such evidence shall be 
considered and given the weight to which it is entitled as evidence 
under all the facts before the adjudication officer in the claim.



     Subpart D_Presumptions Applicable to Eligibility Determinations

    Source: 65 FR 80045, Dec. 20, 2000, unless otherwise noted.



Sec.718.301  Establishing length of employment as a miner.

    The presumptions set forth in Sec. Sec.718.302 and 718.305 apply 
only if a miner worked in one or more coal mines for the number of years 
required to invoke the presumption. The length of the miner's coal mine 
work history must be computed as provided by 20 CFR 725.101(a)(32).

[78 FR 59114, Sept. 25, 2013]



Sec.718.302  Relationship of pneumoconiosis to coal mine employment.

    If a miner who is suffering or suffered from pneumoconiosis was 
employed for ten years or more in one or more coal mines, there shall be 
a rebuttable presumption that the pneumoconiosis arose out of such 
employment. (See Sec.718.203.)



Sec.718.303  [Reserved]



Sec.718.304  Irrebuttable presumption of total disability or death due to 

pneumoconiosis.

    There is an irrebuttable presumption that a miner is totally 
disabled due to pneumoconiosis, that a miner's death was due to 
pneumoconiosis or that a miner was totally disabled due to 
pneumoconiosis at the time of death, if such miner is suffering or 
suffered from a chronic dust disease of the lung which:
    (a) When diagnosed by chest X-ray (see Sec.718.202 concerning the 
standards for X-rays and the effect of interpretations of X-rays by 
physicians) yields one or more large opacities (greater than 1 
centimeter in diameter) and would be classified in Category A, B, or C 
in:
    (1) The ILO-U/C International Classification of Radiographs of the 
Pneumoconioses, 1971, or subsequent revisions thereto; or
    (2) The International Classification of the Radiographs of the 
Pneumoconioses of the International Labour Office, Extended 
Classification

[[Page 260]]

(1968) (which may be referred to as the ``ILO Classification (1968)''); 
or
    (3) The Classification of the Pneumoconioses of the Union 
Internationale Contra Cancer/Cincinnati (1968) (which may be referred to 
as the ``UICC/Cincinnati (1968) Classification''); or
    (b) When diagnosed by biopsy or autopsy, yields massive lesions in 
the lung; or
    (c) When diagnosed by means other than those specified in paragraphs 
(a) and (b) of this section, would be a condition which could reasonably 
be expected to yield the results described in paragraph (a) or (b) of 
this section had diagnosis been made as therein described: Provided, 
however, That any diagnosis made under this paragraph shall accord with 
acceptable medical procedures.



Sec.718.305  Presumption of pneumoconiosis.

    (a) Applicability. This section applies to all claims filed after 
January 1, 2005, and pending on or after March 23, 2010.
    (b) Invocation. (1) The claimant may invoke the presumption by 
establishing that--
    (i) The miner engaged in coal-mine employment for fifteen years, 
either in one or more underground coal mines, or in coal mines other 
than underground mines in conditions substantially similar to those in 
underground mines, or in any combination thereof; and
    (ii) The miner or survivor cannot establish entitlement under Sec.
718.304 by means of chest x-ray evidence; and
    (iii) The miner has, or had at the time of his death, a totally 
disabling respiratory or pulmonary impairment established pursuant to 
Sec.718.204, except that Sec.718.204(d) does not apply.
    (2) The conditions in a mine other than an underground mine will be 
considered ``substantially similar'' to those in an underground mine if 
the claimant demonstrates that the miner was regularly exposed to coal-
mine dust while working there.
    (3) In a claim involving a living miner, a miner's affidavit or 
testimony, or a spouse's affidavit or testimony, may not be used by 
itself to establish the existence of a totally disabling respiratory or 
pulmonary impairment.
    (4) In the case of a deceased miner, affidavits (or equivalent sworn 
testimony) from persons knowledgeable of the miner's physical condition 
must be considered sufficient to establish total disability due to a 
respiratory or pulmonary impairment if no medical or other relevant 
evidence exists which addresses the miner's pulmonary or respiratory 
condition; however, such a determination must not be based solely upon 
the affidavits or testimony of any person who would be eligible for 
benefits (including augmented benefits) if the claim were approved.
    (c) Facts presumed. Once invoked, there will be rebuttable 
presumption--
    (1) In a miner's claim, that the miner is totally disabled due to 
pneumoconiosis, or was totally disabled due to pneumoconiosis at the 
time of death; or
    (2) In a survivor's claim, that the miner's death was due to 
pneumoconiosis.
    (d) Rebuttal--(1) Miner's claim. In a claim filed by a miner, the 
party opposing entitlement may rebut the presumption by--
    (i) Establishing both that the miner does not, or did not, have:
    (A) Legal pneumoconiosis as defined in Sec.718.201(a)(2); and
    (B) Clinical pneumoconiosis as defined in Sec.718.201(a)(1), 
arising out of coal mine employment (see Sec.718.203); or
    (ii) Establishing that no part of the miner's respiratory or 
pulmonary total disability was caused by pneumoconiosis as defined in 
Sec.718.201.
    (2) Survivor's claim. In a claim filed by a survivor, the party 
opposing entitlement may rebut the presumption by--
    (i) Establishing both that the miner did not have:
    (A) Legal pneumoconiosis as defined in Sec.718.201(a)(2); and
    (B) Clinical pneumoconiosis as defined in Sec.718.201(a)(1), 
arising out of coal mine employment (see Sec.718.203); or
    (ii) Establishing that no part of the miner's death was caused by 
pneumoconiosis as defined in Sec.718.201.
    (3) The presumption must not be considered rebutted on the basis of 
evidence demonstrating the existence of a

[[Page 261]]

totally disabling obstructive respiratory or pulmonary disease of 
unknown origin.

[78 FR 59114, Sept. 25, 2013]



Sec.718.306    [Reserved]



     Sec. Appendix A to Part 718--Standards for Administration and 

             Interpretation of Chest Roentgenograms (X-Rays)

    The following standards are established in accordance with sections 
402(f)(1)(D) and 413(b) of the Act. They were developed in consultation 
with the National Institute for Occupational Safety and Health. These 
standards are promulgated for the guidance of physicians and medical 
technicians to insure that uniform procedures are used in administering 
and interpreting X-rays and that the best available medical evidence 
will be submitted in connection with a claim for black lung benefits. If 
it is established that one or more standards have not been met, the 
claims adjudicator may consider such fact in determining the evidentiary 
weight to be assigned to the physician's report of an X-ray.
    (1) Every chest roentgenogram shall be a single postero-anterior 
projection at full inspiration on a 14 by 17 inch film. Additional chest 
films or views shall be obtained if they are necessary for clarification 
and classification. The film and cassette shall be capable of being 
positioned both vertically and horizontally so that the chest 
roentgenogram will include both apices and costophrenic angles. If a 
miner is too large to permit the above requirements, then a projection 
with minimum loss of costophrenic angle shall be made.
    (2) Miners shall be disrobed from the waist up at the time the 
roentgenogram is given. The facility shall provide a dressing area and, 
for those miners who wish to use one, the facility shall provide a clean 
gown. Facilities shall be heated to a comfortable temperature.
    (3) Roentgenograms shall be made only with a diagnostic X-ray 
machine having a rotating anode tube with a maximum of a 2 mm source 
(focal spot).
    (4) Except as provided in paragraph (5), roentgenograms shall be 
made with units having generators which comply with the following: (a) 
the generators of existing roentgenographic units acquired by the 
examining facility prior to July 27, 1973, shall have a minimum rating 
of 200 mA at 100 kVp; (b) generators of units acquired subsequent to 
that date shall have a minimum rating of 300 mA at 125 kVp.
    Note: A generator with a rating of 150 kVp is recommended.
    (5) Roentgenograms made with battery-powered mobile or portable 
equipment shall be made with units having a minimum rating of 100 mA at 
110 kVp at 500 Hz, or 200 mA at 110 kVp at 60 Hz.
    (6) Capacitor discharge, and field emission units may be used.
    (7) Roentgenograms shall be given only with equipment having a beam-
limiting device which does not cause large unexposed boundaries. The use 
of such a device shall be discernible from an examination of the 
roentgenogram.
    (8) To insure high quality chest roentgenograms:
    (i) The maximum exposure time shall not exceed \1/20\ of a second 
except that with single phase units with a rating less than 300 mA at 
125 kVp and subjects with chest over 28 cm postero-anterior, the 
exposure may be increased to not more than \1/10\ of a second;
    (ii) The source or focal spot to film distance shall be at least 6 
feet;
    (iii) Only medium-speed film and medium-speed intensifying screens 
shall be used;
    (iv) Film-screen contact shall be maintained and verified at 6-month 
or shorter intervals;
    (v) Intensifying screens shall be inspected at least once a month 
and cleaned when necessary by the method recommended by the 
manufacturer;
    (vi) All intensifying screens in a cassette shall be of the same 
type and made by the same manufacturer;
    (vii) When using over 90 kV, a suitable grid or other means of 
reducing scattered radiation shall be used;
    (viii) The geometry of the radiographic system shall insure that the 
central axis (ray) of the primary beam is perpendicular to the plane of 
the film surface and impinges on the center of the film.
    (9) Radiographic processing:
    (i) Either automatic or manual film processing is acceptable. A 
constant time-temperature technique shall be meticulously employed for 
manual processing.
    (ii) If mineral or other impurities in the processing water 
introduce difficulty in obtaining a high-quality roentgenogram, a 
suitable filter or purification system shall be used.
    (10) Before the miner is advised that the examination is concluded, 
the roentgenogram shall be processed and inspected and accepted for 
quality by the physician, or if the physician is not available, 
acceptance may be made by the radiologic technologist. In a case of a 
substandard roentgenogram, another shall be made immediately.
    (11) An electric power supply shall be used which complies with the 
voltage, current, and regulation specified by the manufacturer of the 
machine.

[[Page 262]]

    (12) A densitometric test object may be required on each 
roentgenogram for an objective evaluation of film quality at the 
discretion of the Department of Labor.
    (13) Each roentgenogram made under this Appendix shall be 
permanently and legibly marked with the name and address of the facility 
at which it is made, the miner's DOL claim number, the date of the 
roentgenogram, and left and right side of film. No other identifying 
markings shall be recorded on the roentgenogram.



     Sec. Appendix B to Part 718--Standards for Administration and 

 Interpretation of Pulmonary Function Tests. Tables B1, B2, B3, B4, B5, 

                                   B6.

    The following standards are established in accordance with section 
402(f)(1)(D) of the Act. They were developed in consultation with the 
National Institute for Occupational Safety and Health (NIOSH). These 
standards are promulgated for the guidance of physicians and medical 
technicians to insure that uniform procedures are used in administering 
and interpreting ventilatory function tests and that the best available 
medical evidence will be submitted in support of a claim for black lung 
benefits. If it is established that one or more standards have not been 
met, the claims adjudicator may consider such fact in determining the 
evidentiary weight to be given to the results of the ventilatory 
function tests.
    (1) Instruments to be used for the administration of pulmonary 
function tests shall be approved by NIOSH and shall conform to the 
following criteria:
    (i) The instrument shall be accurate within 50 
ml or within 3 percent of reading, whichever is 
greater.
    (ii) The instrument shall be capable of measuring vital capacity 
from 0 to 7 liters BTPS.
    (iii) The instrument shall have a low inertia and offer low 
resistance to airflow such that the resistance to airflow at 12 liters 
per second must be less than 1.5 cm H20/liter/sec.
    (iv) The instrument or user of the instrument must have a means of 
correcting volumes to body temperature saturated with water vapor (BTPS) 
under conditions of varying ambient spirometer temperatures and 
barometric pressures.
    (v) The instrument used shall provide a tracing of flow versus 
volume (flow-volume loop) which displays the entire maximum inspiration 
and the entire maximum forced expiration. The instrument shall, in 
addition, provide tracings of the volume versus time tracing (spirogram) 
derived electronically from the flow-volume loop. Tracings are necessary 
to determine whether maximum inspiratory and expiratory efforts have 
been obtained during the FVC maneuver. If maximum voluntary ventilation 
is measured, the tracing shall record the individual breaths volumes 
versus time.
    (vi) The instrument shall be capable of accumulating volume for a 
minimum of 10 seconds after the onset of exhalation.
    (vii) The instrument must be capable of being calibrated in the 
field with respect to the FEV1. The volume calibration shall be 
accomplished with a 3 L calibrating syringe and should agree to within 1 
percent of a 3 L calibrating volume. The linearity of the instrument 
must be documented by a record of volume calibrations at three different 
flow rates of approximately 3 L/6 sec, 3 L/3 sec, and 3 L/sec.
    (viii) For measuring maximum voluntary ventilation (MVV) the 
instrument shall have a response which is flat within 10 percent up to 4 Hz at flow rates up to 12 liters per 
second over the volume range.
    (ix) The spirogram shall be recorded at a speed of at least 20 mm/
sec and a volume excursion of at least 10mm/L. Calculation of the FEVl 
from the flow-volume loop is not acceptable. Original tracings shall be 
submitted.
    (2) The administration of pulmonary function tests shall conform to 
the following criteria:
    (i) Tests shall not be performed during or soon after an acute 
respiratory illness.
    (ii) For the FEV1 and FVC, use of a nose clip is required. The 
procedures shall be explained in simple terms to the patient who shall 
be instructed to loosen any tight clothing and stand in front of the 
apparatus. The subject may sit, or stand, but care should be taken on 
repeat testing that the same position be used. Particular attention 
shall be given to insure that the chin is slightly elevated with the 
neck slightly extended. The subject shall be instructed to expire 
completely, momentarily hold his breath, place the mouthpiece in his 
mouth and close the mouth firmly about the mouthpiece to ensure no air 
leak. The subject will than make a maximum inspiration from the 
instrument and when maximum inspiration has been attained, without 
interruption, blow as hard, fast and completely as possible for at least 
7 seconds or until a plateau has been attained in the volume-time curve 
with no detectable change in the expired volume during the last 2 
seconds of maximal expiratory effort. A minimum of three flow-volume 
loops and derived spirometric tracings shall be carried out. The patient 
shall be observed throughout the study for compliance with instructions. 
Inspiration and expiration shall be checked visually for 
reproducibility. The effort shall be judged unacceptable when the 
patient:
    (A) Has not reached full inspiration preceding the forced 
expiration; or
    (B) Has not used maximal effort during the entire forced expiration; 
or

[[Page 263]]

    (C) Has not continued the expiration for least 7 sec. or until an 
obvious plateau for at least 2 sec. in the volume-time curve has 
occurred; or
    (D) Has coughed or closed his glottis; or
    (E) Has an obstructed mouthpiece or a leak around the mouthpiece 
(obstruction due to tongue being placed in front of mouthpiece, false 
teeth falling in front of mouthpiece, etc.); or
    (F) Has an unsatisfactory start of expiration, one characterized by 
excessive hesitation (or false starts). Peak flow should be attained at 
the start of expiration and the volume-time tracing (spirogram) should 
have a smooth contour revealing gradually decreasing flow throughout 
expiration; or
    (G) Has an excessive variability between the three acceptable 
curves. The variation between the two largest FEV1's of the three 
acceptable tracings should not exceed 5 percent of the largest FEV1 or 
100 ml, whichever is greater. As individuals with obstructive disease or 
rapid decline in lung function will be less likely to achieve this 
degree of reproducibility, tests not meeting this criterion may still be 
submitted for consideration in support of a claim for black lung 
benefits. Failure to meet this standard should be clearly noted in the 
test report by the physician conducting or reviewing the test.
    (iii) For the MVV, the subject shall be instructed before beginning 
the test that he or she will be asked to breathe as deeply and as 
rapidly as possible for approximately 15 seconds. The test shall be 
performed with the subject in the standing position, if possible. Care 
shall be taken on repeat testing that the same position be used. The 
subject shall breathe normally into the mouthpiece of the apparatus for 
10 to 15 seconds to become accustomed to the system. The subject shall 
then be instructed to breathe as deeply and as rapidly as possible, and 
shall be continually encouraged during the remainder of the maneuver. 
Subject shall continue the maneuver for 15 seconds. At least 5 minutes 
of rest shall be allowed between maneuvers. At least three MVV's shall 
be carried out. (But see Sec.718.103(b).) During the maneuvers the 
patient shall be observed for compliance with instructions. The effort 
shall be judged unacceptable when the patient:
    (A) Has not maintained consistent effort for at least 12 to 15 
seconds; or
    (B) Has coughed or closed his glottis; or
    (C) Has an obstructed mouthpiece or a leak around the mouthpiece 
(obstruction due to tongue being placed in front of mouthpiece, false 
teeth falling in front of mouthpiece, etc.); or
    (D) Has an excessive variability between the three acceptable 
curves. The variation between the two largest MVVs of the three 
satisfactory tracings shall not exceed 10 percent.
    (iv) A calibration check shall be performed on the instrument each 
day before use, using a volume source of at least three liters, accurate 
to within 1 percent of full scale. The volume 
calibration shall be performed in accordance with the method described 
in paragraph (1)(vii) of this Appendix. Accuracy of the time measurement 
used in determining the FEV1 shall be checked using the manufacturer's 
stated procedure and shall be within 3 percent of 
actual. The procedure described in the Appendix shall be performed as 
well as any other procedures suggested by the manufacturer of the 
spirometer being used.
    (v)(A) The first step in evaluating a spirogram for the FVC and FEV1 
shall be to determine whether or not the patient has performed the test 
properly or as described in (2)(ii) of this Appendix. The largest 
recorded FVC and FEV1, corrected to BTPS, shall be used in the analysis.
    (B) Only MVV maneuvers which demonstrate consistent effort for at 
least 12 seconds shall be considered acceptable. The largest accumulated 
volume for a 12 second period corrected to BTPS and multiplied by five 
or the largest accumulated volume for a 15 second period corrected to 
BTPS and multiplied by four is to be reported as the MVV.

[[Page 264]]

[GRAPHIC] [TIFF OMITTED] TC05OC91.000


[[Page 265]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.001


[[Page 266]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.002


[[Page 267]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.003


[[Page 268]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.004


[[Page 269]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.005


[[Page 270]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.006


[[Page 271]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.007


[[Page 272]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.008


[[Page 273]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.009


[[Page 274]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.010


[[Page 275]]


[GRAPHIC] [TIFF OMITTED] TC05OC91.011



              Sec. Appendix C to Part 718--Blood-Gas Tables

    The following tables set forth the values to be applied in 
determining whether total disability may be established in accordance 
with Sec.718.204(b)(2)(ii). The values contained in the tables are 
indicative of impairment only. They do not establish a degree of 
disability except as provided in Sec.718.204(b)(2)(ii) of this 
subchapter, nor do they establish standards for determining normal 
alveolar gas exchange values for any particular individual. Tests must 
not be performed during or soon after an acute respiratory or cardiac 
illness. A miner who meets the following medical specifications must be 
found to be totally disabled, in the absence of rebutting evidence, if 
the values specified in one of the following tables are met:

[[Page 276]]

    (1) For arterial blood-gas studies performed at test sites up to 
2,999 feet above sea level:

------------------------------------------------------------------------
                                                           Arterial PO2
                                                            equal to or
                  Arterial PCO2 (mm Hg)                    less than (mm
                                                                Hg)
------------------------------------------------------------------------
25 or below.............................................              75
26......................................................              74
27......................................................              73
28......................................................              72
29......................................................              71
30......................................................              70
31......................................................              69
32......................................................              68
33......................................................              67
34......................................................              66
35......................................................              65
36......................................................              64
37......................................................              63
38......................................................              62
39......................................................              61
40-49...................................................              60
Above 50................................................          (\1\)
------------------------------------------------------------------------
\1\ Any value.

    (2) For arterial blood-gas studies performed at test sites 3,000 to 
5,999 feet above sea level:

------------------------------------------------------------------------
                                                           Arterial PO2
                                                            equal to or
                  Arterial PCO2 (mm Hg)                    less than (mm
                                                                Hg)
------------------------------------------------------------------------
25 or below.............................................              70
26......................................................              69
27......................................................              68
28......................................................              67
29......................................................              66
30......................................................              65
31......................................................              64
32......................................................              63
33......................................................              62
34......................................................              61
35......................................................              60
36......................................................              59
37......................................................              58
38......................................................              57
39......................................................              56
40-49...................................................              55
Above 50................................................          (\2\)
------------------------------------------------------------------------
\2\ Any value.

    (3) For arterial blood-gas studies performed at test sites 6,000 
feet or more above sea level:

------------------------------------------------------------------------
                                                           Arterial PO2
                                                            equal to or
                  Arterial PCO2 (mm Hg)                    less than (mm
                                                                Hg)
------------------------------------------------------------------------
25 or below.............................................              65
26......................................................              64
27......................................................              63
28......................................................              62
29......................................................              61
30......................................................              60
31......................................................              59
32......................................................              58
33......................................................              57
34......................................................              56
35......................................................              55
36......................................................              54
37......................................................              53
38......................................................              52
39......................................................              51
40-49...................................................              50
Above 50................................................          (\3\)
------------------------------------------------------------------------
\3\ Any value.


[65 FR 80045, Dec. 20, 2000, as amended at 78 FR 59115, Sept. 25, 2013]



PART 722_CRITERIA FOR DETERMINING WHETHER STATE WORKERS' COMPENSATION LAWS 

PROVIDE ADEQUATE COVERAGE FOR PNEUMOCONIOSIS AND LISTING OF APPROVED STATE 

LAWS--Table of Contents



Sec.
722.1 Purpose.
722.2 Definitions.
722.3 General criteria; inclusion in and removal from the Secretary's 
          list.
722.4 The Secretary's list.

    Authority: 5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 
3174, 30 U.S.C. 901 et seq., 921, 932, 936; 33 U.S.C. 901 et seq., 
Secretary's Order 7-87, 52 FR 48466, Employment Standards Order No. 90-
02.

    Source: 65 FR 80053, Dec. 20, 2000, unless otherwise noted.



Sec.722.1  Purpose.

    Section 421 of the Black Lung Benefits Act provides that a claim for 
benefits based on the total disability or death of a coal miner due to 
pneumoconiosis must be filed under a State workers' compensation law 
where such law provides adequate coverage for pneumoconiosis. A State 
workers' compensation law may be deemed to provide adequate coverage 
only when it is included on a list of such laws maintained by the 
Secretary. The purpose of this part is to set forth the procedures and 
criteria for inclusion on that list, and to provide that list.



Sec.722.2  Definitions.

    (a) The definitions and use of terms contained in subpart A of part 
725 of this title shall be applicable to this part.
    (b) For purposes of this part, the following definitions apply:

[[Page 277]]

    (1) State agency means, with respect to any State, the agency, 
department or officer designated by the workers' compensation law of the 
State to administer such law. In any case in which more than one agency 
participates in the administration of a State workers' compensation law, 
the Governor of the State may designate which of the agencies shall be 
the State agency for purposes of this part.
    (2) The Secretary's list means the list published by the Secretary 
of Labor in the Federal Register (see Sec.722.4) containing the names 
of those States which have in effect a workers' compensation law which 
provides adequate coverage for death or total disability due to 
pneumoconiosis.



Sec.722.3  General criteria; inclusion in and removal from the Secretary's 

list.

    (a) The Governor of any State or any duly authorized State agency 
may, at any time, request that the Secretary include such State's 
workers' compensation law on his list of those State workers' 
compensation laws providing adequate coverage for total disability or 
death due to pneumoconiosis. Each such request shall include a copy of 
the State workers' compensation law and any other pertinent State laws; 
a copy of any regulations, either proposed or promulgated, implementing 
such laws; and a copy of any relevant administrative or court decision 
interpreting such laws or regulations, or, if such decisions are 
published in a readily available report, a citation to such decision.
    (b) Upon receipt of a request that a State be included on the 
Secretary's list, the Secretary shall include the State on the list if 
he finds that the State's workers' compensation law guarantees the 
payment of monthly and medical benefits to all persons who would be 
entitled to such benefits under the Black Lung Benefits Act at the time 
of the request, at a rate no less than that provided by the Black Lung 
Benefits Act. The criteria used by the Secretary in making such 
determination shall include, but shall not be limited to, the criteria 
set forth in section 421(b)(2) of the Act.
    (c) The Secretary may require each State included on the list to 
submit reports detailing the extent to which the State's workers' 
compensation laws, as reflected by statute, regulation, or 
administrative or court decision, continues to meet the requirements of 
paragraph (b) of this section. If the Secretary concludes that the 
State's workers' compensation law does not provide adequate coverage at 
any time, either because of changes to the State workers' compensation 
law or the Black Lung Benefits Act, he shall remove the State from the 
Secretary's list after providing the State with notice of such removal 
and an opportunity to be heard.



Sec.722.4  The Secretary's list.

    (a) The Secretary has determined that publication of the Secretary's 
list in the Code of Federal Regulations is appropriate. Accordingly, in 
addition to its publication in the Federal Register as required by 
section 421 of the Black Lung Benefits Act, the list shall also appear 
in paragraph (b) of this section.
    (b) Upon review of all requests filed with the Secretary under 
section 421 of the Black Lung Benefits Act and this part, and 
examination of the workers' compensation laws of the States making such 
requests, the Secretary has determined that the workers' compensation 
law of each of the following listed States, for the period from the date 
shown in the list until such date as the Secretary may make a contrary 
determination, provides adequate coverage for pneumoconiosis.

------------------------------------------------------------------------
                                                                Period
                            State                             commencing
------------------------------------------------------------------------
None........................................................  ..........
------------------------------------------------------------------------



PART 725_CLAIMS FOR BENEFITS UNDER PART C OF TITLE IV OF THE FEDERAL MINE 

SAFETY AND HEALTH ACT, AS AMENDED--Table of Contents



                            Subpart A_General

Sec.
725.1 Statutory provisions.
725.2 Purpose and applicability of this part.
725.3 Contents of this part.
725.4 Applicability of other parts in this title.
725.101 Definitions and use of terms.

[[Page 278]]

725.102 Disclosure of program information.
725.103 Burden of proof.

  Subpart B_Persons Entitled to Benefits, Conditions, and Duration of 
                               Entitlement

725.201 Who is entitled to benefits; contents of this subpart.

              Conditions and Duration of Entitlement: Miner

725.202 Miner defined; conditions of entitlement, miner.
725.203 Duration and cessation of entitlement, miner.

 Conditions and Duration of Entitlement: Miner's Dependents (Augmented 
                                Benefits)

725.204 Determination of relationship; spouse.
725.205 Determination of dependency; spouse.
725.206 Determination of relationship; divorced spouse.
725.207 Determination of dependency; divorced spouse.
725.208 Determination of relationship; child.
725.209 Determination of dependency; child.
725.210 Duration of augmented benefits.
725.211 Time of determination of relationship and dependency of spouse 
          or child for purposes of augmentation of benefits.

        Conditions and Duration of Entitlement: Miner's Survivors

725.212 Conditions of entitlement; surviving spouse or surviving 
          divorced spouse.
725.213 Duration of entitlement; surviving spouse or surviving divorced 
          spouse.
725.214 Determination of relationship; surviving spouse.
725.215 Determination of dependency; surviving spouse.
725.216 Determination of relationship; surviving divorced spouse.
725.217 Determination of dependency; surviving divorced spouse.
725.218 Conditions of entitlement; child.
725.219 Duration of entitlement; child.
725.220 Determination of relationship; child.
725.221 Determination of dependency; child.
725.222 Conditions of entitlement; parent, brother or sister.
725.223 Duration of entitlement; parent, brother or sister.
725.224 Determination of relationship; parent, brother or sister.
725.225 Determination of dependency; parent, brother or sister.
725.226 ``Good cause'' for delayed filing of proof of support.
725.227 Time of determination of relationship and dependency of 
          survivors.
725.228 Effect of conviction of felonious and intentional homicide on 
          entitlement to benefits.

                       Terms Used in this Subpart

725.229 Intestate personal property.
725.230 Legal impediment.
725.231 Domicile.
725.232 Member of the same household--''living with,'' ``living in the 
          same household,'' and ``living in the miner's household,'' 
          defined.
725.233 Support and contributions.

                       Subpart C_Filing of Claims

725.301 Who may file a claim.
725.302 Evidence of authority to file a claim on behalf of another.
725.303 Date and place of filing of claims.
725.304 Forms and initial processing.
725.305 When a written statement is considered a claim.
725.306 Withdrawal of a claim.
725.307 Cancellation of a request for withdrawal.
725.308 Time limits for filing claims.
725.309 Additional claims; effect of a prior denial of benefits.
725.310 Modification of awards and denials.
725.311 Communications with respect to claims; time computations.

      Subpart D_Adjudication Officers; Parties and Representatives

725.350 Who are the adjudication officers?
725.351 Powers of adjudication officers.
725.352 Disqualification of adjudication officer.
725.360 Parties to proceedings
725.361 Party amicus curiae.
725.362 Representation of parties.
725.363 Qualification of representative.
725.364 Authority of representative.
725.365 Approval of representative's fees; lien against benefits.
725.366 Fees for representatives.
725.367 Payment of a claimant's attorney's fee by responsible operator 
          or fund.

        Subpart E_Adjudication of Claims by the District Director

725.401 Claims development--general.
725.402 Approved State workers' compensation law.
725.403 [Reserved]
725.404 Development of evidence--general
725.405 Development of medical evidence; scheduling of medical 
          examinations and tests.
725.406 Medical examinations and tests.
725.407 Identification and notification of responsible operator.
725.408 Operator's response to notification.
725.409 Denial of a claim by reason of abandonment.
725.410 Submission of additional evidence.
725.411 Initial adjudication in Trust Fund cases.

[[Page 279]]

725.412 Operator's response.
725.413 [Reserved]
725.414 Development of evidence.
725.415 Action by the district director after development of evidence.
725.416 Conferences.
725.417 Action at the conclusion of conference.
725.418 Proposed decision and order.
725.419 Response to proposed decision and order.
725.420 Initial determinations.
725.421 Referral of a claim to the Office of Administrative Law Judges.
725.422 Legal assistance.
725.423 Extensions of time.

                           Subpart F_Hearings

725.450 Right to a hearing.
725.451 Request for hearing.
725.452 Type of hearing; parties.
725.453 Notice of hearing.
725.454 Time and place of hearing; transfer of cases.
725.455 Hearing procedures; generally.
725.456 Introduction of documentary evidence.
725.457 Witnesses.
725.458 Depositions; interrogatories.
725.459 Witness fees.
725.460 Consolidated hearings.
725.461 Waiver of right to appear and present evidence.
725.462 Withdrawal of controversion of issues set for formal hearing; 
          effect.
725.463 Issues to be resolved at hearing; new issues.
725.464 Record of hearing.
725.465 Dismissals for cause.
725.466 Order of dismissal.
725.475 Termination of hearings.
725.476 Issuance of decision and order.
725.477 Form and contents of decision and order.
725.478 Filing and service of decision and order.
725.479 Finality of decisions and orders.
725.480 Modification of decisions and orders.
725.481 Right to appeal to the Benefits Review Board.
725.482 Judicial review.
725.483 Costs in proceedings brought without reasonable grounds.

                Subpart G_Responsible Coal Mine Operators

725.490 Statutory provisions and scope.
725.491 Operator defined.
725.492 Successor operator defined.
725.493 Employment relationship defined.
725.494 Potentially liable operators.
725.495 Criteria for determining a responsible operator.
725.496 Special claims transferred to the fund.
725.497 Procedures in special claims transferred to the fund.

                      Subpart H_Payment of Benefits

                           General Provisions

725.501 Payment provisions generally.
725.502 When benefit payments are due; manner of payment.
725.503 Date from which benefits are payable.
725.504 Payments to a claimant employed as a miner.
725.505 Payees.
725.506 Payment on behalf of another; ``legal guardian'' defined.
725.507 Guardian for minor or incompetent.
725.510 Representative payee.
725.511 Use and benefit defined.
725.512 Support of legally dependent spouse, child, or parent.
725.513 Accountability; transfer.
725.514 Certification to dependent of augmentation portion of benefit.
725.515 Assignment and exemption from claims of creditors.

                              Benefit Rates

725.520 Computation of benefits.
725.521 Commutation of payments; lump sum awards.
725.522 Payments prior to final adjudication.

                Special Provisions for Operator Payments

725.530 Operator payments; generally.
725.531 Receipt for payment.
725.532 Suspension, reduction, or termination of payments.

                  Increases and Reductions of Benefits

725.533 Modification of benefit amounts; general.
725.534 Reduction of State benefits.
725.535 Reductions; receipt of State or Federal benefit.
725.536 Reductions; excess earnings.
725.537 Reductions; retroactive effect of an additional claim for 
          benefits.
725.538 Reductions; effect of augmentation of benefits based on 
          subsequent qualification of individual.
725.539 More than one reduction event.

                       Overpayments; Underpayments

725.540 Overpayments.
725.541 Notice of waiver of adjustment or recovery of overpayment.
725.542 When waiver of adjustment or recovery may be applied.
725.543 Standards for waiver of adjustment or recovery.
725.544 Collection and compromise of claims for overpayment.
725.545 Underpayments.

[[Page 280]]

725.546 Relation to provisions for reductions or increases.
725.547 Applicability of overpayment and underpayment provisions to 
          operator or carrier.
725.548 Procedures applicable to overpayments and underpayments

               Subpart I_Enforcement of Liability; Reports

725.601 Enforcement generally.
725.602 Reimbursement of the fund.
725.603 Payments by the fund on behalf of an operator; liens.
725.604 Enforcement of final awards.
725.605 Defaults.
725.606 Security for the payment of benefits.
725.607 Payments in addition to compensation.
725.608 Interest.
725.609 Enforcement against other persons.
725.620 Failure to secure benefits; other penalties.
725.621 Reports.

        Subpart J_Medical Benefits and Vocational Rehabilitation

725.701 Availability of medical benefits.
725.702 Claims for medical benefits only under section 11 of the Reform 
          Act.
725.703 Physician defined.
725.704 Notification of right to medical benefits; authorization of 
          treatment.
725.705 Arrangements for medical care.
725.706 Authorization to provide medical services.
725.707 Reports of physicians and supervision of medical care.
725.708 Disputes concerning medical benefits.
725.710 Objective of vocational rehabilitation.
725.711 Requests for referral to vocational rehabilitation assistance.

    Authority: 5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 
3174, 30 U.S.C. 901 et seq., 921, 932, 936; 33 U.S.C. 901 et seq., 42 
U.S.C. 405, Secretary's Order 7-87, 52 FR 48466, Employment Standards 
Order No. 90-02.

    Source: 65 FR 80054, Dec. 20, 2000, unless otherwise noted.



                            Subpart A_General



Sec.725.1  Statutory provisions.

    (a) General. Subchapter IV of the Federal Coal Mine Health and 
Safety Act of 1969, as amended by the Black Lung Benefits Act of 1972, 
the Federal Mine Safety and Health Amendments Act of 1977, the Black 
Lung Benefits Reform Act of 1977, the Black Lung Benefits Revenue Act of 
1977, the Black Lung Benefits Amendments of 1981, the Black Lung 
Benefits Revenue Act of 1981, the Black Lung Consolidation of 
Responsibility Act of 2002, and the Patient Protection and Affordable 
Care Act of 2010 (together comprising the Black Lung Benefits Act (see 
Sec.725.101(a)(1)) provides for the payment of benefits to certain 
disabled coal miners and their survivors. See Sec.725.201.
    (b) Part B. Part B of subchapter IV of the Act provided that claims 
filed before July 1, 1973 were to be filed with, and adjudicated and 
administered by, the Social Security Administration (SSA). If awarded, 
these claims were paid by SSA out of appropriated funds. The Black Lung 
Consolidation of Administrative Responsibility Act (see paragraph (h) of 
this section) transferred all responsibility for continued 
administration of these claims to the Department of Labor.
    (c) Part C. Claims filed by a miner or survivor on or after January 
1, 1974, are filed, adjudicated, and paid under the provisions of part C 
of subchapter IV of the Act. Part C requires that a claim filed on or 
after January 1, 1974, shall be filed under an applicable approved State 
workers' compensation law, or if no such law has been approved by the 
Secretary of Labor, the claim may be filed with the Secretary of Labor 
under Section 422 of the Act. Claims filed with the Secretary of Labor 
under part C are processed and adjudicated by the Secretary. Individual 
coal mine operators are primarily liable for benefits; however, if the 
miner's last coal mine employment terminated before January 1, 1970, or 
if no responsible operator can be identified, benefits are paid by the 
Black Lung Disability Trust Fund. Claims adjudicated under part C are 
subject to certain incorporated provisions of the Longshore and Harbor 
Workers' Compensation Act.
    (d) Changes made by the Black Lung Benefits Reform Act of 1977. The 
Black Lung Benefits Reform Act of 1977 contains a number of significant 
amendments to the Act's standards for determining eligibility for 
benefits. Among these are:
    (1) A provision which clarifies the definition of ``pneumoconiosis'' 
to include any ``chronic dust disease of the

[[Page 281]]

lung and its sequelae, including respiratory and pulmonary impairments, 
arising out of coal mine employment'';
    (2) A provision which defines ``miner'' to include any person who 
works or has worked in or around a coal mine or coal preparation 
facility, and in coal mine construction or coal transportation under 
certain circumstances;
    (3) A provision that continued employment in a coal mine is not 
conclusive proof that a miner is not or was not totally disabled;
    (4) A provision which authorizes the Secretary of Labor to establish 
standards and develop criteria for determining total disability or death 
due to pneumoconiosis with respect to a part C claim;
    (5) Provisions relating to the treatment to be accorded a survivor's 
affidavit, certain X-ray interpretations, and certain autopsy reports in 
the development of a claim; and
    (6) Other clarifying, procedural, and technical amendments.
    (e) Changes made by the Black Lung Benefits Revenue Act of 1977. The 
Black Lung Benefits Revenue Act of 1977 established the Black Lung 
Disability Trust Fund which is financed by a specified tax imposed upon 
each ton of coal (except lignite) produced and sold or used in the 
United States after March 31, 1978. The Secretary of the Treasury is the 
managing trustee of the fund and benefits are paid from the fund upon 
the direction of the Secretary of Labor. The fund was made liable for 
the payment of all claims approved under part C of the Act for all 
periods of eligibility occurring on or after January 1, 1974, with 
respect to claims where the miner's last coal mine employment terminated 
before January 1, 1970, or where individual liability can not be 
assessed against a coal mine operator due to bankruptcy, insolvency, or 
the like. The fund was also authorized to pay certain claims which a 
responsible operator has refused to pay within a reasonable time, and to 
seek reimbursement from such operator. The purpose of the fund and the 
Black Lung Benefits Revenue Act of 1977 was to insure that coal mine 
operators, or the coal industry, will fully bear the cost of black lung 
disease for the present time and in the future. The Black Lung Benefits 
Revenue Act of 1977 also contained other provisions relating to the fund 
and authorized a coal mine operator to establish its own trust fund for 
the payment of certain claims.
    (f) Changes made by the Black Lung Benefits Amendments of 1981. The 
Black Lung Benefits Amendments of 1981 made a number of significant 
changes in the Act's standards for determining eligibility for benefits 
and concerning the payment of such benefits, and applied the changes to 
claims filed on or after January 1, 1982. Among these are:
    (1) The Secretary of Labor may re-read any X-ray submitted in 
support of a claim and may rely upon a second opinion concerning such an 
X-ray as a means of auditing the validity of the claim;
    (2) The rebuttable presumption that the total disability of a miner 
with fifteen or more years employment in the coal mines, who has 
demonstrated a totally disabling respiratory or pulmonary impairment, is 
due to pneumoconiosis is no longer applicable (but the presumption was 
reinstated for claims filed after January 1, 2005, and pending on or 
after March 23, 2010, by the Patient Protection and Affordable Care Act 
of 2010 (see paragraph (i) of this section));
    (3) In the case of deceased miners, where no medical or other 
relevant evidence is available, only affidavits from persons not 
eligible to receive benefits as a result of the adjudication of the 
claim will be considered sufficient to establish entitlement to 
benefits;
    (4) Unless the miner was found entitled to benefits as a result of a 
claim filed prior to January 1, 1982, benefits are payable on survivors' 
claims filed on and after January 1, 1982, only when the miner's death 
was due to pneumoconiosis (but for survivors' claims filed after January 
1, 2005, and pending on or after March 23, 2010, an award of a miner's 
claim may form the basis for a survivor's entitlement under the Patient 
Protection and Affordable Care Act of 2010 (see paragraph (i) of this 
section));
    (5) Benefits payable under this part are subject to an offset on 
account of excess earnings by the miner; and
    (6) Other technical amendments.

[[Page 282]]

    (g) Changes made by the Black Lung Benefits Revenue Act of 1981. The 
Black Lung Benefits Revenue Act of 1981 temporarily doubles the amount 
of the tax upon coal until the fund has repaid all advances received 
from the United States Treasury and the interest on all such advances. 
With respect to claims filed on or after January 1, 1982, the fund's 
authorization for the payment of interim benefits is limited to the 
payment of prospective benefits only. These changes also define the 
rates of interest to be paid to and by the fund.
    (h) Changes made by the Black Lung Consolidation of Administrative 
Responsibility Act. The Black Lung Consolidation of Administrative 
Responsibility Act of 2002 transferred administrative responsibility for 
all claims previously filed with or administered by the Social Security 
Administration to the Department of Labor, effective January 31, 2003. 
As a result, certain obsolete provisions in the BLBA (30 U.S.C. 904, 
924a, and 945) were repealed. Various technical changes were made to 
other statutory provisions.
    (i) Changes made by the Patient Protection and Affordable Care Act 
of 2010. The Patient Protection and Affordable Care Act of 2010 (the 
ACA) changed the entitlement criteria for miners' and survivors' claims 
filed after January 1, 2005, and pending on or after March 23, 2010, by 
reinstating two provisions made inapplicable by the Black Lung Benefits 
Amendments of 1981.
    (1) For miners' claims meeting these date requirements, the ACA 
reinstated the rebuttable presumption that the miner is (or was) totally 
disabled due to pneumoconiosis if the miner has (or had) 15 or more 
years of qualifying coal mine employment and a totally disabling 
respiratory or pulmonary impairment.
    (2) For survivors' claims meeting these date requirements, the ACA 
made two changes. First, it reinstated the rebuttable presumption that 
the miner's death was due to pneumoconiosis if the miner had 15 years or 
more of qualifying coal mine employment and was totally disabled by a 
respiratory or pulmonary impairment at the time of death. Second, it 
reinstituted derivative survivors' entitlement. As a result, an eligible 
survivor will be entitled to benefits if the miner is or was found 
entitled to benefits on his or her lifetime claim based on total 
disability due to pneumoconiosis arising out of coal-mine employment.
    (j) Longshore Act provisions. The adjudication of claims filed under 
part C of the Act (i.e., claims filed on or after January 1, 1974) is 
governed by various procedural and other provisions contained in the 
Longshore and Harbor Workers' Compensation Act (LHWCA), as amended from 
time to time, which are incorporated within the Act by section 422. The 
incorporated LHWCA provisions are applicable under the Act except as is 
otherwise provided by the Act or as provided by regulations of the 
Secretary. Although occupational disease benefits are also payable under 
the LHWCA, the primary focus of the procedures set forth in that Act is 
upon a time-definite-traumatic injury or death. Because of this and 
other significant differences between a black lung and longshore claim, 
it is determined, in accordance with the authority set forth in Section 
422 of the Act, that certain of the incorporated procedures prescribed 
by the LHWCA must be altered to fit the circumstances ordinarily 
confronted in the adjudication of a black lung claim. The changes made 
are based upon the Department's experience in processing black lung 
claims since July 1, 1973, and all such changes are specified in this 
part. No other departure from the incorporated provisions of the LHWCA 
is intended.
    (k) Social Security Act provisions. Section 402 of Part A of the Act 
incorporates certain definitional provisions from the Social Security 
Act, 42 U.S.C. 301 et seq. Section 430 provides that the 1972, 1977 and 
1981 amendments to part B of the Act shall also apply to part C ``to the 
extent appropriate.'' Sections 412 and 413 incorporate various 
provisions of the Social Security Act into part B of the Act. To the 
extent appropriate, therefore, these provisions also apply to part C. In 
certain cases, the Department has varied the terms of the Social 
Security Act provisions to accommodate the unique needs of the black 
lung benefits program. Parts of the Longshore and Harbor Workers'

[[Page 283]]

Compensation Act are also incorporated into part C. Where the 
incorporated provisions of the two acts are inconsistent, the Department 
has exercised its broad regulatory powers to choose the extent to which 
each incorporation is appropriate. Finally, Section 422(g), contained in 
part C of the Act, incorporates 42 U.S.C. 403(b)-(l).

[78 FR 59115, Sept. 25, 2013]



Sec.725.2  Purpose and applicability of this part.

    (a) This part sets forth the procedures to be followed and standards 
to be applied in filing, processing, adjudicating, and paying claims 
filed under part C of subchapter IV of the Act.
    (b) This part applies to all claims filed under part C of subchapter 
IV of the Act on or after June 30, 1982. Publication of certain 
provisions or parts of certain provisions that apply only to claims 
filed prior to June 30, 1982, or to claims subject to Section 435 of the 
Act, has been discontinued because those provisions affect an 
increasingly smaller number of claims. The version of Part 725 set forth 
in 20 CFR, parts 500 to end, edition revised as of April 1, 2010, 
applies to the adjudication of all claims filed prior to June 30, 1982, 
as appropriate.
    (c) The provisions of this part reflect revisions that became 
effective on January 19, 2001. This part applies to all claims filed 
after January 19, 2001 and all benefits payments made on such claims. 
With the exception of the following sections, this part also applies to 
the adjudication of claims that were pending on January 19, 2001 and all 
benefits payments made on such claims: Sec. Sec.725.101(a)(31), 
725.204, 725.212(b), 725.213(c), 725.214(d), 725.219(d), 725.309, 
725.310, 725.351, 725.360, 725.367, 725.406, 725.407, 725.408, 725.409, 
725.410, 725.411, 725.412, 725.414, 725.415, 725.416, 725.417, 725.418, 
725.421(b), 725.423, 725.454, 725.456, 725.457, 725.458, 725.459, 
725.465, 725.491, 725.492, 725.493, 725.494, 725.495, 725.547, 
725.701(e). The version of those sections set forth in 20 CFR, parts 500 
to end, edition revised as of April 1, 1999, apply to the adjudications 
of claims that were pending on January 19, 2001. For purposes of 
construing the provisions of this section, a claim will be considered 
pending on January 19, 2001 if it was not finally denied more than one 
year prior to that date.

[78 FR 59117, Sept. 25, 2013]



Sec.725.3  Contents of this part.

    (a) This subpart describes the statutory provisions which relate to 
claims considered under this part, the purpose and scope of this part, 
definitions and usages of terms applicable to this part, and matters 
relating to the availability of information collected by the Department 
of Labor in connection with the processing of claims.
    (b) Subpart B contains criteria for determining who may be found 
entitled to benefits under this part and other provisions relating to 
the conditions and duration of eligibility of a particular individual.
    (c) Subpart C describes the procedures to be followed and action to 
be taken in connection with the filing of a claim under this part.
    (d) Subpart D sets forth the duties and powers of the persons 
designated by the Secretary of Labor to adjudicate claims and provisions 
relating to the rights of parties and representatives of parties.
    (e) Subpart E contains the procedures for developing evidence and 
adjudicating entitlement and liability issues by the district director.
    (f) Subpart F describes the procedures to be followed if a hearing 
before the Office of Administrative Law Judges is required.
    (g) Subpart G contains provisions governing the identification of a 
coal mine operator which may be liable for the payment of a claim.
    (h) Subpart H contains provisions governing the payment of benefits 
with respect to an approved claim.
    (i) Subpart I describes the statutory mechanisms provided for the 
enforcement of a coal mine operator's liability, sets forth the 
penalties which may be applied in the case of a defaulting coal mine 
operator, and describes the obligation of coal operators and their 
insurance carriers to file certain reports.
    (j) Subpart J describes the right of certain beneficiaries to 
receive medical treatment benefits and vocational rehabilitation under 
the Act.

[[Page 284]]



Sec.725.4  Applicability of other parts in this title.

    (a) Part 718. Part 718 of this subchapter, which contains the 
criteria and standards to be applied in determining whether a miner is 
or was totally disabled due to pneumoconiosis, or whether a miner died 
due to pneumoconiosis, shall be applicable to the determination of 
claims under this part. Claims filed after March 31, 1980, are subject 
to part 718 as promulgated by the Secretary in accordance with section 
402(f)(1) of the Act on February 29, 1980 (see Sec.725.2(c)). The 
criteria contained in subpart C of part 727 of this subchapter are 
applicable in determining claims filed prior to April 1, 1980, under 
this part, and such criteria shall be applicable at all times with 
respect to claims filed under this part and under section 11 of the 
Black Lung Benefits Reform Act of 1977.
    (b) Parts 715, 717, and 720. Pertinent and significant provisions of 
Parts 715, 717, and 720 of this subchapter (formerly contained in 20 
CFR, parts 500 to end, edition revised as of April 1, 1978), which 
established the procedures for the filing, processing, and payment of 
claims filed under section 415 of the Act, are included within this part 
as appropriate.
    (c) Part 726. Part 726 of this subchapter, which sets forth the 
obligations imposed upon a coal operator to insure or self-insure its 
liability for the payment of benefits to certain eligible claimants, is 
applicable to this part as appropriate.
    (d) Part 727. Part 727 of this subchapter, which governs the review, 
adjudication and payment of pending and denied claims under section 435 
of the Act, is applicable with respect to such claims. The criteria 
contained in subpart C of part 727 for determining a claimant's 
eligibility for benefits are applicable under this part with respect to 
all claims filed before April 1, 1980, and to all claims filed under 
this part and under section 11 of the Black Lung Benefits Reform Act of 
1977. Because the part 727 regulations affect an increasingly smaller 
number of claims, however, the Department has discontinued publication 
of the criteria in the Code of Federal Regulations. The part 727 
criteria may be found at 43 FR 36818, Aug. 18, 1978 or 20 CFR, parts 500 
to end, edition revised as of April 1, 1999.
    (e) Part 410. Part 410 of this title, which sets forth provisions 
relating to a claim for black lung benefits under part B of title IV of 
the Act, is inapplicable to this part except as is provided in this 
part, or in part 718 of this subchapter.



Sec.725.101  Definition and use of terms.

    (a) Definitions. For purposes of this subchapter, except where the 
content clearly indicates otherwise, the following definitions apply:
    (1) The Act means the Black Lung Benefits Act, 30 U.S.C. 901-44, as 
amended.
    (2) The Longshore Act or LHWCA means the Longshore and Harbor 
Workers' Compensation Act, 33 U.S.C. 901-950, as amended from time to 
time.
    (3) The Social Security Act means the Social Security Act, Act of 
August 14, 1935, c. 531, 49 Stat. 620, 42 U.S.C. 301-431, as amended 
from time to time.
    (4) Administrative law judge means a person qualified under 5 U.S.C. 
3105 to conduct hearings and adjudicate claims for benefits filed 
pursuant to section 415 and part C of the Act. Until March 1, 1979, it 
also means an individual appointed to conduct such hearings and 
adjudicate such claims under Public Law 94-504.
    (5) Beneficiary means a miner or any surviving spouse, divorced 
spouse, child, parent, brother or sister, who is entitled to benefits 
under either section 415 or part C of title IV of the Act.
    (6) Benefits means all money or other benefits paid or payable under 
section 415 or part C of title IV of the Act on account of disability or 
death due to pneumoconiosis, including augmented benefits (see Sec.
725.520(c)). The term also includes any expenses related to the medical 
examination and testing authorized by the district director pursuant to 
Sec.725.406.
    (7) Benefits Review Board or Board means the Benefits Review Board, 
U.S. Department of Labor, an appellate tribunal appointed by the 
Secretary of Labor pursuant to the provisions of section 21(b)(1) of the 
LHWCA. See parts 801 and 802 of this title.

[[Page 285]]

    (8) Black Lung Disability Trust Fund or the fund means the Black 
Lung Disability Trust Fund established by the Black Lung Benefits 
Revenue Act of 1977, as amended by the Black Lung Benefits Revenue Act 
of 1981, for the payment of certain claims adjudicated under this part 
(see subpart G of this part).
    (9) Chief Administrative Law Judge means the Chief Administrative 
Law Judge of the Office of Administrative Law Judges, U.S. Department of 
Labor, 800 K Street, NW., suite 400, Washington, DC 20001-8002.
    (10) Claim means a written assertion of entitlement to benefits 
under section 415 or part C of title IV of the Act, submitted in a form 
and manner authorized by the provisions of this subchapter.
    (11) Claimant means an individual who files a claim for benefits 
under this part.
    (12) Coal mine means an area of land and all structures, facilities, 
machinery, tools, equipment, shafts, slopes, tunnels, excavations and 
other property, real or personal, placed upon, under or above the 
surface of such land by any person, used in, or to be used in, or 
resulting from, the work of extracting in such area bituminous coal, 
lignite or anthracite from its natural deposits in the earth by any 
means or method, and in the work of preparing the coal so extracted, and 
includes custom coal preparation facilities.
    (13) Coal preparation means the breaking, crushing, sizing, 
cleaning, washing, drying, mixing, storing and loading of bituminous 
coal, lignite or anthracite, and such other work of preparing coal as is 
usually done by the operator of a coal mine.
    (14) Department means the United States Department of Labor.
    (15) Director means the Director, OWCP, or his or her designee.
    (16) District Director means a person appointed as provided in 
sections 39 and 40 of the LHWCA, or his or her designee, who is 
authorized to develop and adjudicate claims as provided in this 
subchapter (see Sec.725.350). The term District Director is 
substituted for the term Deputy Commissioner wherever that term appears 
in the regulations. This substitution is for administrative purposes 
only and in no way affects the power or authority of the position as 
established in the statute. Any action taken by a person under the 
authority of a district director will be considered the action of a 
deputy commissioner.
    (17) Division or DCMWC means the Division of Coal Mine Workers' 
Compensation in the OWCP, United States Department of Labor.
    (18) Insurer or carrier means any private company, corporation, 
mutual association, reciprocal or interinsurance exchange, or any other 
person or fund, including any State fund, authorized under the laws of a 
State to insure employers' liability under workers' compensation laws. 
The term also includes the Secretary of Labor in the exercise of his or 
her authority under section 433 of the Act.
    (19) Miner or coal miner means any individual who works or has 
worked in or around a coal mine or coal preparation facility in the 
extraction or preparation of coal. The term also includes an individual 
who works or has worked in coal mine construction or transportation in 
or around a coal mine, to the extent such individual was exposed to coal 
mine dust as a result of such employment (see Sec.725.202). For 
purposes of this definition, the term does not include coke oven 
workers.
    (20) The Nation's coal mines means all coal mines located in any 
State.
    (21) Office or OWCP means the Office of Workers' Compensation 
Programs, United States Department of Labor.
    (22) Office of Administrative Law Judges means the Office of 
Administrative Law Judges, U.S. Department of Labor.
    (23) Operator means any owner, lessee, or other person who operates, 
controls or supervises a coal mine, including a prior or successor 
operator as defined in section 422 of the Act and certain transportation 
and construction employers (see subpart G of this part).
    (24) Person means an individual, partnership, association, 
corporation, firm, subsidiary or parent of a corporation, or other 
organization or business entity.
    (25) Pneumoconiosis means a chronic dust disease of the lung and its 
sequelae, including respiratory and pulmonary impairments, arising out 
of

[[Page 286]]

coal mine employment (see part 718 of this subchapter).
    (26) Responsible operator means an operator which has been 
determined to be liable for the payment of benefits to a claimant for 
periods of eligibility after December 31, 1973, with respect to a claim 
filed under section 415 or part C of title IV of the Act or reviewed 
under section 435 of the Act.
    (27) Secretary means the Secretary of Labor, United States 
Department of Labor, or a person, authorized by him or her to perform 
his or her functions under title IV of the Act.
    (28) State includes any state of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American 
Samoa, Guam, the Trust Territory of the Pacific Islands, and prior to 
January 3, 1959, and August 21, 1959, respectively, the territories of 
Alaska and Hawaii.
    (29) Total disability and partial disability, for purposes of this 
part, have the meaning given them as provided in part 718 of this 
subchapter.
    (30) Underground coal mine means a coal mine in which the earth and 
other materials which lie above and around the natural deposit of coal 
(i.e., overburden) are not removed in mining; including all land, 
structures, facilities, machinery, tools, equipment, shafts, slopes, 
tunnels, excavations and other property, real or personal, appurtenant 
thereto.
    (31) A workers' compensation law means a law providing for payment 
of benefits to employees, and their dependents and survivors, for 
disability on account of injury, including occupational disease, or 
death, suffered in connection with their employment. A payment funded 
wholly out of general revenues shall not be considered a payment under a 
workers' compensation law.
    (32) Year means a period of one calendar year (365 days, or 366 days 
if one of the days is February 29), or partial periods totaling one 
year, during which the miner worked in or around a coal mine or mines 
for at least 125 ``working days.'' A ``working day'' means any day or 
part of a day for which a miner received pay for work as a miner, but 
shall not include any day for which the miner received pay while on an 
approved absence, such as vacation or sick leave. In determining whether 
a miner worked for one year, any day for which the miner received pay 
while on an approved absence, such as vacation or sick leave, may be 
counted as part of the calendar year and as partial periods totaling one 
year.
    (i) If the evidence establishes that the miner worked in or around 
coal mines at least 125 working days during a calendar year or partial 
periods totaling one year, then the miner has worked one year in coal 
mine employment for all purposes under the Act. If a miner worked fewer 
than 125 working days in a year, he or she has worked a fractional year 
based on the ratio of the actual number of days worked to 125. Proof 
that the miner worked more than 125 working days in a calendar year or 
partial periods totaling a year, does not establish more than one year.
    (ii) To the extent the evidence permits, the beginning and ending 
dates of all periods of coal mine employment must be ascertained. The 
dates and length of employment may be established by any credible 
evidence including (but not limited to) company records, pension 
records, earnings statements, coworker affidavits, and sworn testimony. 
If the evidence establishes that the miner's employment lasted for a 
calendar year or partial periods totaling a 365-day period amounting to 
one year, it must be presumed, in the absence of evidence to the 
contrary, that the miner spent at least 125 working days in such 
employment.
    (iii) If the evidence is insufficient to establish the beginning and 
ending dates of the miner's coal mine employment, or the miner's 
employment lasted less than a calendar year, then the adjudication 
officer may use the following formula: divide the miner's yearly income 
from work as a miner by the coal mine industry's average daily earnings 
for that year, as reported by the Bureau of Labor Statistics (BLS). A 
copy of the BLS table must be made a part of the record if the 
adjudication officer uses this method to establish the length of the 
miner's work history.
    (iv) Periods of coal mine employment occurring outside the United 
States must not be considered in computing the miner's work history.

[[Page 287]]

    (b) Statutory terms. The definitions contained in this section must 
not be construed in derogation of terms of the Act.
    (c) Dependents and survivors. Dependents and survivors are those 
persons described in subpart B of this part.

[65 FR 80054, Dec. 20, 2000, as amended at 77 FR 37286, June 21, 2012; 
78 FR 59117, Sept. 25, 2013]



Sec.725.102  Disclosure of program information.

    (a) All reports, records, or other documents filed with the OWCP 
with respect to claims are the records of the OWCP. The Director or his 
or her designee shall be the official custodian of those records 
maintained by the OWCP at its national office. The District Director 
shall be the official custodian of those records maintained at a 
district office.
    (b) The official custodian of any record sought to be inspected 
shall permit or deny inspection in accordance with the Department of 
Labor's regulations pertaining thereto (see 29 CFR Part 70). The 
original record in any such case shall not be removed from the Office of 
the custodian for such inspection. The custodian may, in his or her 
discretion, deny inspection of any record or part thereof which is of a 
character specified in 5 U.S.C. 552(b) if in his or her opinion such 
inspection may result in damage, harm, or harassment to the beneficiary 
or to any other person. For special provisions concerning release of 
information regarding injured employees undergoing vocational 
rehabilitation, see Sec.702.508 of this chapter.
    (c) Any person may request copies of records he or she has been 
permitted to inspect. Such requests shall be addressed to the official 
custodian of the records sought to be copied. The official custodian 
shall provide the requested copies under the terms and conditions 
specified in the Department of Labor's regulations relating thereto (see 
29 CFR Part 70).
    (d) Any party to a claim (Sec.725.360) or his or her duly 
authorized representative shall be permitted upon request to inspect the 
file which has been compiled in connection with such claim. Any party to 
a claim or representative of such party shall upon request be provided 
with a copy of any or all material contained in such claim file. A 
request for information by a party or representative made under this 
paragraph shall be answered within a reasonable time after receipt by 
the Office. Internal documents prepared by the district director which 
do not constitute evidence of a fact which must be established in 
connection with a claim shall not be routinely provided or presented for 
inspection in accordance with a request made under this paragraph.



Sec.725.103  Burden of proof.

    Except as otherwise provided in this part and part 718, the burden 
of proving a fact alleged in connection with any provision shall rest 
with the party making such allegation.



  Subpart B_Persons Entitled to Benefits, Conditions, and Duration of 

                               Entitlement



Sec.725.201  Who is entitled to benefits; contents of this subpart.

    (a) Part C of the Act provides for the payment of periodic benefits 
in accordance with this part to:
    (1) A miner who meets the conditions of entitlement set forth in 
Sec.725.202(d); or
    (2) The surviving spouse or surviving divorced spouse of a deceased 
miner who meets the conditions of entitlement set forth in Sec.
725.212; or,
    (3) Where neither exists, the child of a deceased miner who meets 
the conditions of entitlement set forth in Sec.725.218; or
    (4) The surviving dependent parents, where there is no surviving 
spouse or child, or the surviving dependent brothers or sisters, where 
there is no surviving spouse, child, or parent, of a miner, who meet the 
conditions of entitlement set forth in Sec.725.222; or
    (5) The child of a miner's surviving spouse who was receiving 
benefits under Part C of the Act at the time of such spouse's death.
    (b) The provisions contained in this subpart describe the conditions 
of entitlement to benefits applicable to a miner, or a surviving spouse, 
child, parent, brother, or sister, and the

[[Page 288]]

events which establish or terminate entitlement to benefits.
    (c) In order for an entitled miner or surviving spouse to qualify 
for augmented benefits because of one or more dependents, such 
dependents must meet relationship and dependency requirements with 
respect to such beneficiary prescribed by or pursuant to the Act. Such 
requirements are also set forth in this subpart.

[65 FR 80054, Dec. 20, 2000, as amended at 78 FR 59117, Sept. 25, 2013]

              Conditions and Duration of Entitlement: Miner



Sec.725.202  Miner defined; condition of entitlement, miner.

    (a) Miner defined. A ``miner'' for the purposes of this part is any 
person who works or has worked in or around a coal mine or coal 
preparation facility in the extraction, preparation, or transportation 
of coal, and any person who works or has worked in coal mine 
construction or maintenance in or around a coal mine or coal preparation 
facility. There shall be a rebuttable presumption that any person 
working in or around a coal mine or coal preparation facility is a 
miner. This presumption may be rebutted by proof that:
    (1) The person was not engaged in the extraction, preparation or 
transportation of coal while working at the mine site, or in maintenance 
or construction of the mine site; or
    (2) The individual was not regularly employed in or around a coal 
mine or coal preparation facility.
    (b) Coal mine construction and transportation workers; special 
provisions. A coal mine construction or transportation worker shall be 
considered a miner to the extent such individual is or was exposed to 
coal mine dust as a result of employment in or around a coal mine or 
coal preparation facility. A transportation worker shall be considered a 
miner to the extent that his or her work is integral to the extraction 
or preparation of coal. A construction worker shall be considered a 
miner to the extent that his or her work is integral to the building of 
a coal or underground mine (see Sec.725.101(a)(12), (30)).
    (1) There shall be a rebuttable presumption that such individual was 
exposed to coal mine dust during all periods of such employment 
occurring in or around a coal mine or coal preparation facility for 
purposes of:
    (i) Determining whether such individual is or was a miner;
    (ii) Establishing the applicability of any of the presumptions 
described in section 411(c) of the Act and part 718 of this subchapter; 
and
    (iii) Determining the identity of a coal mine operator liable for 
the payment of benefits in accordance with Sec.725.495.
    (2) The presumption may be rebutted by evidence which demonstrates 
that:
    (i) The individual was not regularly exposed to coal mine dust 
during his or her work in or around a coal mine or coal preparation 
facility; or
    (ii) The individual did not work regularly in or around a coal mine 
or coal preparation facility.
    (c) A person who is or was a self-employed miner or independent 
contractor, and who otherwise meets the requirements of this paragraph, 
shall be considered a miner for the purposes of this part.
    (d) Conditions of entitlement; miner. An individual is eligible for 
benefits under this subchapter if the individual:
    (1) Is a miner as defined in this section; and
    (2) Has met the requirements for entitlement to benefits by 
establishing that he or she:
    (i) Has pneumoconiosis (see Sec.718.202), and
    (ii) The pneumoconiosis arose out of coal mine employment (see Sec.
718.203), and
    (iii) Is totally disabled (see Sec.718.204(c)), and
    (iv) The pneumoconiosis contributes to the total disability (see 
Sec.718.204(c)); and
    (3) Has filed a claim for benefits in accordance with the provisions 
of this part.



Sec.725.203  Duration and cessation of entitlement; miner.

    (a) An individual is entitled to benefits as a miner for each month 
beginning with the first month on or after January 1, 1974, in which the 
miner is

[[Page 289]]

totally disabled due to pneumoconiosis arising out of coal mine 
employment.
    (b) The last month for which such individual is entitled to benefits 
is the month before the month during which either of the following 
events first occurs:
    (1) The miner dies; or
    (2) The miner's total disability ceases (see Sec.725.504).
    (c) An individual who has been finally adjudged to be totally 
disabled due to pneumoconiosis and is receiving benefits under the Act 
shall promptly notify the Office and the responsible coal mine operator, 
if any, if he or she engages in his or her usual coal mine work or 
comparable and gainful work.
    (d) Upon reasonable notice, an individual who has been finally 
adjudged entitled to benefits shall submit to any additional tests or 
examinations the Office deems appropriate, and shall submit medical 
reports and other relevant evidence the Office deems necessary, if an 
issue arises pertaining to the validity of the original award.

 Conditions and Duration of Entitlement: Miner's Dependents (Augmented 
                                Benefits)



Sec.725.204  Determination of relationship; spouse.

    (a) For the purpose of augmenting benefits, an individual will be 
considered to be the spouse of a miner if:
    (1) The courts of the State in which the miner is domiciled would 
find that such individual and the miner validly married; or
    (2) The courts of the State in which the miner is domiciled would 
find, under the law they would apply in determining the devolution of 
the miner's intestate personal property, that the individual is the 
miner's spouse; or
    (3) Under State law, such individual would have the right of a 
spouse to share in the miner's intestate personal property; or
    (4) Such individual went through a marriage ceremony with the miner 
resulting in a purported marriage between them and which, but for a 
legal impediment, would have been a valid marriage, unless the 
individual entered into the purported marriage with knowledge that it 
was not a valid marriage, or if such individual and the miner were not 
living in the same household in the month in which a request is filed 
that the miner's benefits be augmented because such individual qualifies 
as the miner's spouse.
    (b) The qualification of an individual for augmentation purposes 
under this section shall end with the month before the month in which:
    (1) The individual dies, or
    (2) The individual who previously qualified as a spouse for purposes 
of Sec.725.520(c), entered into a valid marriage without regard to 
this section, with a person other than the miner.



Sec.725.205  Determination of dependency; spouse.

    For the purposes of augmenting benefits, an individual who is the 
miner's spouse (see Sec.725.204) will be determined to be dependent 
upon the miner if:
    (a) The individual is a member of the same household as the miner 
(see Sec.725.232); or
    (b) The individual is receiving regular contributions from the miner 
for support (see Sec.725.233(c)); or
    (c) The miner has been ordered by a court to contribute to such 
individual's support (see Sec.725.233(e)); or
    (d) The individual is the natural parent of the son or daughter of 
the miner; or
    (e) The individual was married to the miner (see Sec.725.204) for 
a period of not less than 1 year.



Sec.725.206  Determination of relationship; divorced spouse.

    For the purposes of augmenting benefits with respect to any claim 
considered or reviewed under this part or part 727 of this subchapter 
(see Sec.725.4(d)), an individual will be considered to be the 
divorced spouse of a miner if the individual's marriage to the miner has 
been terminated by a final divorce on or after the 10th anniversary of 
the marriage unless, if such individual was married to and divorced from 
the miner more than once, such individual was married to the miner in 
each calendar year of the period beginning 10 years immediately before 
the date on which any divorce became final.

[[Page 290]]



Sec.725.207  Determination of dependency; divorced spouse.

    For the purpose of augmenting benefits, an individual who is the 
miner's divorced spouse (Sec.725.206) will be determined to be 
dependent upon the miner if:
    (a) The individual is receiving at least one-half of his or her 
support from the miner (see Sec.725.233(g)); or
    (b) The individual is receiving substantial contributions from the 
miner pursuant to a written agreement (see Sec.725.233(c) and (f)); or
    (c) A court order requires the miner to furnish substantial 
contributions to the individual's support (see Sec.725.233(c) and 
(e)).



Sec.725.208  Determination of relationship; child.

    As used in this section, the term ``beneficiary'' means only a 
surviving spouse entitled to benefits at the time of death (see Sec.
725.212), or a miner. An individual will be considered to be the child 
of a beneficiary if:
    (a) The courts of the State in which the beneficiary is domiciled 
(see Sec.725.231) would find, under the law they would apply, that the 
individual is the beneficiary's child; or
    (b) The individual is the legally adopted child of such beneficiary; 
or
    (c) The individual is the stepchild of such beneficiary by reason of 
a valid marriage of the individual's parent or adopting parent to such 
beneficiary; or
    (d) The individual does not bear the relationship of child to such 
beneficiary under paragraph (a), (b), or (c) of this section, but would, 
under State law, have the same right as a child to share in the 
beneficiary's intestate personal property; or
    (e) The individual is the natural son or daughter of a beneficiary 
but is not a child under paragraph (a), (b), or (c) of this section, and 
is not considered to be the child of the beneficiary under paragraph (d) 
of this section if the beneficiary and the mother or the father, as the 
case may be, of the individual went through a marriage ceremony 
resulting in a purported marriage between them which but for a legal 
impediment (see Sec.725.230) would have been a valid marriage; or
    (f) The individual is the natural son or daughter of a beneficiary 
but is not a child under paragraph (a), (b), or (c) of this section, and 
is not considered to be the child of the beneficiary under paragraph (d) 
or (e) of this section, such individual shall nevertheless be considered 
to be the child of the beneficiary if:
    (1) The beneficiary, prior to his or her entitlement to benefits, 
has acknowledged in writing that the individual is his or her son or 
daughter, or has been decreed by a court to be the parent of the 
individual, or has been ordered by a court to contribute to the support 
of the individual (see Sec.725.233(e)) because the individual is his 
or her son or daughter; or
    (2) Such beneficiary is shown by satisfactory evidence to be the 
father or mother of the individual and was living with or contributing 
to the support of the individual at the time the beneficiary became 
entitled to benefits.



Sec.725.209  Determination of dependency; child.

    (a) For purposes of augmenting the benefits of a miner or surviving 
spouse, the term ``beneficiary'' as used in this section means only a 
miner or surviving spouse entitled to benefits (see Sec.725.202 and 
Sec.725.212). An individual who is the beneficiary's child (Sec.
725.208) will be determined to be, or to have been, dependent on the 
beneficiary, if the child:
    (1) Is unmarried; and
    (2)(i) Is under 18 years of age; or
    (ii) Is under a disability as defined in section 223(d) of the 
Social Security Act, 42 U.S.C. 423(d); or
    (iii) Is 18 years of age or older and is a student.
    (b)(1) The term ``student'' means a ``full-time student'' as defined 
in section 202(d)(7) of the Social Security Act, 42 U.S.C. 402(d)(7) 
(see Sec. Sec.404.367-404.369 of this title), or an individual under 
23 years of age who has not completed 4 years of education beyond the 
high school level and who is regularly pursuing a full-time course of 
study or training at an institution which is:
    (i) A school, college, or university operated or directly supported 
by the United States, or by a State or local

[[Page 291]]

government or political subdivision thereof; or
    (ii) A school, college, or university which has been accredited by a 
State or by a State-recognized or nationally-recognized accrediting 
agency or body; or
    (iii) A school, college, or university not so accredited but whose 
credits are accepted, on transfer, by at least three institutions which 
are so accredited; or
    (iv) A technical, trade, vocational, business, or professional 
school accredited or licensed by the Federal or a State government or 
any political subdivision thereof, providing courses of not less than 3 
months' duration that prepare the student for a livelihood in a trade, 
industry, vocation, or profession.
    (2) A student will be considered to be ``pursuing a full-time course 
of study or training at an institution'' if the student is enrolled in a 
noncorrespondence course of at least 13 weeks duration and is carrying a 
subject load which is considered full-time for day students under the 
institution's standards and practices. A student beginning or ending a 
full-time course of study or training in part of any month will be 
considered to be pursuing such course for the entire month.
    (3) A child is considered not to have ceased to be a student:
    (i) During any interim between school years, if the interim does not 
exceed 4 months and the child shows to the satisfaction of the Office 
that he or she has a bona fide intention of continuing to pursue a full-
time course of study or training; or
    (ii) During periods of reasonable duration in which, in the judgment 
of the Office, the child is prevented by factors beyond the child's 
control from pursuing his or her education.
    (4) A student whose 23rd birthday occurs during a semester or the 
enrollment period in which such student is pursuing a full-time course 
of study or training shall continue to be considered a student until the 
end of such period, unless eligibility is otherwise terminated.



Sec.725.210  Duration of augmented benefits.

    Augmented benefits payable on behalf of a spouse or divorced spouse, 
or a child, shall begin with the first month in which the dependent 
satisfies the conditions of relationship and dependency set forth in 
this subpart. Augmentation of benefits on account of a dependent 
continues through the month before the month in which the dependent 
ceases to satisfy these conditions, except in the case of a child who 
qualifies as a dependent because such child is a student. In the latter 
case, benefits continue to be augmented through the month before the 
first month during no part of which such child qualifies as a student.



Sec.725.211  Time of determination of relationship and dependency of spouse or 

child for purposes of augmentation of benefits.

    With respect to the spouse or child of a miner entitled to benefits, 
and with respect to the child of a surviving spouse entitled to 
benefits, the determination as to whether an individual purporting to be 
a spouse or child is related to or dependent upon such miner or 
surviving spouse shall be based on the facts and circumstances present 
in each case, at the appropriate time.

        Conditions and Duration of Entitlement: Miner's Survivors



Sec.725.212  Conditions of entitlement; surviving spouse or surviving divorced 

spouse.

    (a) An individual who is the surviving spouse or surviving divorced 
spouse of a miner is eligible for benefits if such individual:
    (1) Is not married;
    (2) Was dependent on the miner at the pertinent time; and
    (3) The deceased miner either:
    (i) Is determined to have died due to pneumoconiosis; or
    (ii) Filed a claim for benefits on or after January 1, 1982, which 
results or resulted in a final award of benefits, and the surviving 
spouse or surviving divorced spouse filed a claim for benefits after 
January 1, 2005 which was pending on or after March 23, 2010.

[[Page 292]]

    (b) If more than one spouse meets the conditions of entitlement 
prescribed in paragraph (a), then each spouse will be considered a 
beneficiary for purposes of section 412(a)(2) of the Act without regard 
to the existence of any other entitled spouse or spouses.

[65 FR 80054, Dec. 20, 2000, as amended at 78 FR 59117, Sept. 25, 2013]



Sec.725.213  Duration of entitlement; surviving spouse or surviving divorced 

spouse.

    (a) An individual is entitled to benefits as a surviving spouse, or 
as a surviving divorced spouse, for each month beginning with the first 
month in which all of the conditions of entitlement prescribed in Sec.
725.212 are satisfied.
    (b) The last month for which such individual is entitled to such 
benefits is the month before the month in which either of the following 
events first occurs:
    (1) The surviving spouse or surviving divorced spouse marries; or
    (2) The surviving spouse or surviving divorced spouse dies.
    (c) A surviving spouse or surviving divorced spouse whose 
entitlement to benefits has been terminated pursuant to Sec.
725.213(b)(1) may thereafter again become entitled to such benefits upon 
filing application for such reentitlement, beginning with the first 
month after the marriage ends and such individual meets the requirements 
of Sec.725.212. The individual shall not be required to reestablish 
the miner's entitlement to benefits (Sec.725.212(a)(3)(i)) or the 
miner's death due to pneumoconiosis (Sec.725.212(a)(3)(ii)).



Sec.725.214  Determination of relationship; surviving spouse.

    An individual shall be considered to be the surviving spouse of a 
miner if:
    (a) The courts of the State in which the miner was domiciled (see 
Sec.725.231) at the time of his or her death would find that the 
individual and the miner were validly married; or
    (b) The courts of the State in which the miner was domiciled (see 
Sec.725.231) at the time of the miner's death would find that the 
individual was the miner's surviving spouse; or
    (c) Under State law, such individual would have the right of the 
spouse to share in the miner's intestate personal property; or
    (d) Such individual went through a marriage ceremony with the miner, 
resulting in a purported marriage between them which, but for a legal 
impediment (see Sec.725.230), would have been a valid marriage, unless 
such individual entered into the purported marriage with knowledge that 
it was not a valid marriage, or if such individual and the miner were 
not living in the same household at the time of the miner's death.



Sec.725.215  Determination of dependency; surviving spouse.

    An individual who is the miner's surviving spouse (see Sec.
725.214) shall be determined to have been dependent on the miner if, at 
the time of the miner's death:
    (a) The individual was living with the miner (see Sec.725.232); or
    (b) The individual was dependent upon the miner for support or the 
miner has been ordered by a court to contribute to such individual's 
support (see Sec.725.233); or
    (c) The individual was living apart from the miner because of the 
miner's desertion or other reasonable cause; or
    (d) The individual is the natural parent of the miner's son or 
daughter; or
    (e) The individual had legally adopted the miner's son or daughter 
while the individual was married to the miner and while such son or 
daughter was under the age of 18; or
    (f) The individual was married to the miner at the time both of them 
legally adopted a child under the age of 18; or
    (g)(1) The individual was married to the miner for a period of not 
less than 9 months immediately before the day on which the miner died, 
unless the miner's death:
    (i) Is accidental (as defined in paragraph (g)(2) of this section), 
or
    (ii) Occurs in line of duty while the miner is a member of a 
uniformed service serving on active duty (as defined in Sec.404.1019 
of this title), and the surviving spouse was married to the miner for a 
period of not less than 3 months immediately prior to the day on which 
such miner died.

[[Page 293]]

    (2) For purposes of paragraph (g)(1)(i) of this section, the death 
of a miner is accidental if such individual received bodily injuries 
solely through violent, external, and accidental means, and as a direct 
result of the bodily injuries and independently of all other causes, 
dies not later than 3 months after the day on which such miner receives 
such bodily injuries. The term ``accident'' means an event that was 
unpremeditated and unforeseen from the standpoint of the deceased 
individual. To determine whether the death of an individual did, in 
fact, result from an accident the adjudication officer will consider all 
the circumstances surrounding the casualty. An intentional and voluntary 
suicide will not be considered to be death by accident; however, suicide 
by an individual who is so incompetent as to be incapable of acting 
intentionally and voluntarily will be considered to be a death by 
accident. In no event will the death of an individual resulting from 
violent and external causes be considered a suicide unless there is 
direct proof that the fatal injury was self-inflicted.
    (3) The provisions of paragraph (g) shall not apply if the 
adjudication officer determines that at the time of the marriage 
involved, the miner would not reasonably have been expected to live for 
9 months.



Sec.725.216  Determination of relationship; surviving divorced spouse.

    An individual will be considered to be the surviving divorced spouse 
of a deceased miner in a claim considered under this part or reviewed 
under part 727 of this subchapter (see Sec.725.4(d)), if such 
individual's marriage to the miner had been terminated by a final 
divorce on or after the 10th anniversary of the marriage unless, if such 
individual was married to and divorced from the miner more than once, 
such individual was married to such miner in each calendar year of the 
period beginning 10 years immediately before the date on which any 
divorce became final and ending with the year in which the divorce 
became final.



Sec.725.217  Determination of dependency; surviving divorced spouse.

    An individual who is the miner's surviving divorced spouse (see 
Sec.725.216) shall be determined to have been dependent on the miner 
if, for the month before the month in which the miner died:
    (a) The individual was receiving at least one-half of his or her 
support from the miner (see Sec.725.233(g)); or
    (b) The individual was receiving substantial contributions from the 
miner pursuant to a written agreement (see Sec.725.233(c) and (f)); or
    (c) A court order required the miner to furnish substantial 
contributions to the individual's support (see Sec.725.233(c) and 
(e)).



Sec.725.218  Conditions of entitlement; child.

    (a) An individual is entitled to benefits where he or she meets the 
required standards of relationship and dependency under this subpart 
(see Sec.725.220 and Sec.725.221) and is the child of a deceased 
miner who:
    (1) Is determined to have died due to pneumoconiosis; or
    (2) Filed a claim for benefits on or after January 1, 1982, which 
results or resulted in a final award of benefits, and the surviving 
child filed a claim for benefits after January 1, 2005 which was pending 
on or after March 23, 2010.
    (b) A child is not entitled to benefits for any month for which a 
miner, or the surviving spouse or surviving divorced spouse of a miner, 
establishes entitlement to benefits.

[65 FR 80054, Dec. 20, 2000, as amended at 78 FR 59117, Sept. 25, 2013]



Sec.725.219  Duration of entitlement; child.

    (a) An individual is entitled to benefits as a child for each month 
beginning with the first month in which all of the conditions of 
entitlement prescribed in Sec.725.218 are satisfied.
    (b) The last month for which such individual is entitled to such 
benefits is the month before the month in which any one of the following 
events first occurs:
    (1) The child dies;
    (2) The child marries;
    (3) The child attains age 18; and

[[Page 294]]

    (i) Is not a student (as defined in Sec.725.209(b)) during any 
part of the month in which the child attains age 18; and
    (ii) Is not under a disability (as defined in Sec.
725.209(a)(2)(ii)) at that time;
    (4) If the child's entitlement beyond age 18 is based on his or her 
status as a student, the earlier of:
    (i) The first month during no part of which the child is a student; 
or
    (ii) The month in which the child attains age 23 and is not under a 
disability (as defined in Sec.725.209(a)(2)(ii)) at that time;
    (5) If the child's entitlement beyond age 18 is based on disability, 
the first month in no part of which such individual is under a 
disability.
    (c) A child whose entitlement to benefits terminated with the month 
before the month in which the child attained age 18, or later, may 
thereafter (provided such individual is not married) again become 
entitled to such benefits upon filing application for such 
reentitlement, beginning with the first month after termination of 
benefits in which such individual is a student and has not attained the 
age of 23.
    (d) A child whose entitlement to benefits has been terminated 
pursuant to Sec.725.219(b)(2) may thereafter again become entitled to 
such benefits upon filing application for such reentitlement, beginning 
with the first month after the marriage ends and such individual meets 
the requirements of Sec.725.218. The individual shall not be required 
to reestablish the miner's entitlement to benefits (Sec.725.218(a)(1)) 
or the miner's death due to pneumoconiosis (Sec.725.212(a)(2)).



Sec.725.220  Determination of relationship; child.

    For purposes of determining whether an individual may qualify for 
benefits as the child of a deceased miner, the provisions of Sec.
725.208 shall be applicable. As used in this section, the term 
``beneficiary'' means only a surviving spouse entitled to benefits at 
the time of such surviving spouse's death (see Sec.725.212), or a 
miner. For purposes of a survivor's claim, an individual will be 
considered to be a child of a beneficiary if:
    (a) The courts of the State in which such beneficiary is domiciled 
(see Sec.725.231) would find, under the law they would apply in 
determining the devolution of the beneficiary's intestate personal 
property, that the individual is the beneficiary's child; or
    (b) Such individual is the legally adopted child of such 
beneficiary; or
    (c) Such individual is the stepchild of such beneficiary by reason 
of a valid marriage of such individual's parent or adopting parent to 
such beneficiary; or
    (d) Such individual does not bear the relationship of child to such 
beneficiary under paragraph (a), (b), or (c) of this section, but would, 
under State law, have the same right as a child to share in the 
beneficiary's intestate personal property; or
    (e) Such individual is the natural son or daughter of a beneficiary 
but does not bear the relationship of child to such beneficiary under 
paragraph (a), (b), or (c) of this section, and is not considered to be 
the child of the beneficiary under paragraph (d) of this section, such 
individual shall nevertheless be considered to be the child of such 
beneficiary if the beneficiary and the mother or father, as the case may 
be, of such individual went through a marriage ceremony resulting in a 
purported marriage between them which but for a legal impediment (see 
Sec.725.230) would have been a valid marriage; or
    (f) Such individual is the natural son or daughter of a beneficiary 
but does not have the relationship of child to such beneficiary under 
paragraph (a), (b), or (c) of this section, and is not considered to be 
the child of the beneficiary under paragraph (d) or (e) of this section, 
such individual shall nevertheless be considered to be the child of such 
beneficiary if:
    (1) Such beneficiary, prior to his or her entitlement to benefits, 
has acknowledged in writing that the individual is his or her son or 
daughter, or has been decreed by a court to be the father or mother of 
the individual, or has been ordered by a court to contribute to the 
support of the individual (see Sec.725.233(a)) because the individual 
is a son or daughter; or
    (2) Such beneficiary is shown by satisfactory evidence to be the 
father or

[[Page 295]]

mother of the individual and was living with or contributing to the 
support of the individual at the time such beneficiary became entitled 
to benefits.



Sec.725.221  Determination of dependency; child.

    For the purposes of determining whether a child was dependent upon a 
deceased miner, the provisions of Sec.725.209 shall be applicable, 
except that for purposes of determining the eligibility of a child who 
is under a disability as defined in section 223(d) of the Social 
Security Act, such disability must have begun before the child attained 
age 22, or in the case of a student, before the child ceased to be a 
student.



Sec.725.222  Conditions of entitlement; parent, brother, or sister.

    (a) An individual is eligible for benefits as a surviving parent, 
brother or sister if all of the following requirements are met:
    (1) The individual is the parent, brother, or sister of a deceased 
miner;
    (2) The individual was dependent on the miner at the pertinent time;
    (3) Proof of support is filed within 2 years after the miner's 
death, unless the time is extended for good cause (Sec.725.226);
    (4) In the case of a brother or sister, such individual also:
    (i) Is under 18 years of age; or
    (ii) Is under a disability as defined in section 223(d) of the 
Social Security Act, 42 U.S.C. 423(d), which began before such 
individual attained age 22, or in the case of a student, before the 
student ceased to be a student; or
    (iii) Is a student (see Sec.725.209(b)); or
    (iv) Is under a disability as defined in section 223(d) of the 
Social Security Act, 42 U.S.C. 423(d), at the time of the miner's death;
    (5) The deceased miner:
    (i) Is determined to have died due to pneumoconiosis; or
    (ii) Filed a claim for benefits on or after January 1, 1982, which 
results or resulted in a final award of benefits, and the surviving 
parent, brother or sister filed a claim for benefits after January 1, 
2005 which was pending on or after March 23, 2010.
    (b)(1) A parent is not entitled to benefits if the deceased miner 
was survived by a spouse or child at the time of such miner's death.
    (2) A brother or sister is not entitled to benefits if the deceased 
miner was survived by a spouse, child, or parent at the time of such 
miner's death.

[65 FR 80054, Dec. 20, 2000, as amended at 78 FR 59117, Sept. 25, 2013]



Sec.725.223  Duration of entitlement; parent, brother, or sister.

    (a) A parent, sister, or brother is entitled to benefits beginning 
with the month all the conditions of entitlement described in Sec.
725.222 are met.
    (b) The last month for which such parent is entitled to benefits is 
the month in which the parent dies.
    (c) The last month for which such brother or sister is entitled to 
benefits is the month before the month in which any of the following 
events first occurs:
    (1) The individual dies;
    (2)(i) The individual marries or remarries; or
    (ii) If already married, the individual received support in any 
amount from his or her spouse;
    (3) The individual attains age 18; and
    (i) Is not a student (as defined in Sec.725.209(b)) during any 
part of the month in which the individual attains age 18; and
    (ii) Is not under a disability (as defined in Sec.
725.209(a)(2)(ii)) at that time;
    (4) If the individual's entitlement beyond age 18 is based on his or 
her status as a student, the earlier of:
    (i) The first month during no part of which the individual is a 
student; or
    (ii) The month in which the individual attains age 23 and is not 
under a disability (as defined in Sec.725.209(a)(2)(ii)) at that time;
    (5) If the individual's entitlement beyond age 18 is based on 
disability, the first month in no part of which such individual is under 
a disability.



Sec.725.224  Determination of relationship; parent, brother, or sister.

    (a) An individual will be considered to be the parent, brother, or 
sister of a miner if the courts of the State in which the miner was 
domiciled (see Sec.225.231) at the time of death would

[[Page 296]]

find, under the law they would apply, that the individual is the miner's 
parent, brother, or sister.
    (b) Where, under State law, the individual is not the miner's 
parent, brother, or sister, but would, under State law, have the same 
status (i.e., right to share in the miner's intestate personal property) 
as a parent, brother, or sister, the individual will be considered to be 
the parent, brother, or sister as appropriate.



Sec.725.225  Determination of dependency; parent, brother, or sister.

    An individual who is the miner's parent, brother, or sister will be 
determined to have been dependent on the miner if, during the 1-year 
period immediately prior to the miner's death:
    (a) The individual and the miner were living in the same household 
(see Sec.725.232); and
    (b) The individual was totally dependent on the miner for support 
(see Sec.725.233(h)).



Sec.725.226  ``Good cause'' for delayed filing of proof of support.

    (a) What constitutes ``good cause.'' ``Good cause'' may be found for 
failure to file timely proof of support where the parent, brother, or 
sister establishes to the satisfaction of the Office that such failure 
to file was due to:
    (1) Circumstances beyond the individual's control, such as extended 
illness, mental, or physical incapacity, or communication difficulties; 
or
    (2) Incorrect or incomplete information furnished the individual by 
the Office; or
    (3) Efforts by the individual to secure supporting evidence without 
a realization that such evidence could be submitted after filing proof 
of support.
    (b) What does not constitute ``good cause.'' ``Good cause'' for 
failure to file timely proof of support (see Sec.725.222(a)(3)) does 
not exist when there is evidence of record in the Office that the 
individual was informed that he or she should file within the prescribed 
period and he or she failed to do so deliberately or through negligence.



Sec.725.227  Time of determination of relationship and dependency of 

survivors.

    The determination as to whether an individual purporting to be an 
entitled survivor of a miner or beneficiary was related to, or dependent 
upon, the miner is made after such individual files a claim for benefits 
as a survivor. Such determination is based on the facts and 
circumstances with respect to a reasonable period of time ending with 
the miner's death. A prior determination that such individual was, or 
was not, a dependent for the purposes of augmenting the miner's benefits 
for a certain period, is not determinative of the issue of whether the 
individual is a dependent survivor of such miner.



Sec.725.228  Effect of conviction of felonious and intentional homicide on 

entitlement to benefits.

    An individual who has been convicted of the felonious and 
intentional homicide of a miner or other beneficiary shall not be 
entitled to receive any benefits payable because of the death of such 
miner or other beneficiary, and such person shall be considered 
nonexistent in determining the entitlement to benefits of other 
individuals.

                       Terms Used in This Subpart



Sec.725.229  Intestate personal property.

    References in this subpart to the ``same right to share in the 
intestate personal property'' of a deceased miner (or surviving spouse) 
refer to the right of an individual to share in such distribution in the 
individual's own right and not the right of representation.



Sec.725.230  Legal impediment.

    For purposes of this subpart, ``legal impediment'' means an 
impediment resulting from the lack of dissolution of a previous marriage 
or otherwise arising out of such previous marriage or its dissolution or 
resulting from a defect in the procedure followed in connection with the 
purported marriage ceremony--for example, the solemnization of a 
marriage only through a religious ceremony in a country which requires a 
civil ceremony for a valid marriage.

[[Page 297]]



Sec.725.231  Domicile.

    (a) For purposes of this subpart, the term ``domicile'' means the 
place of an individual's true, fixed, and permanent home.
    (b) The domicile of a deceased miner or surviving spouse is 
determined as of the time of death.
    (c) If an individual was not domiciled in any State at the pertinent 
time, the law of the District of Columbia is applied.



Sec.725.232  Member of the same household--``living with,'' ``living in the 

same household,'' and ``living in the miner's household,'' defined.

    (a) Defined. (1) The term ``member of the same household'' as used 
in section 402(a)(2) of the Act (with respect to a spouse); the term 
``living with'' as used in section 402(e) of the Act (with respect to a 
surviving spouse); and the term ``living in the same household'' as used 
in this subpart, means that a husband and wife were customarily living 
together as husband and wife in the same place.
    (2) The term ``living in the miner's household'' as used in section 
412(a)(5) of the Act (with respect to a parent, brother, or sister) 
means that the miner and such parent, brother, or sister were sharing 
the same residence.
    (b) Temporary absence. The temporary absence from the same residence 
of either the miner, or the miner's spouse, parent, brother, or sister 
(as the case may be), does not preclude a finding that one was ``living 
with'' the other, or that they were ``members of the same household.'' 
The absence of one such individual from the residence in which both had 
customarily lived shall, in the absence of evidence to the contrary, be 
considered temporary:
    (1) If such absence was due to service in the Armed Forces of the 
United States; or
    (2) If the period of absence from his or her residence did not 
exceed 6 months and the absence was due to business or employment 
reasons, or because of confinement in a penal institution or in a 
hospital, nursing home, or other curative institution; or
    (3) In any other case, if the evidence establishes that despite such 
absence they nevertheless reasonably expected to resume physically 
living together.
    (c) Relevant period of time. (1) The determination as to whether a 
surviving spouse had been ``living with'' the miner shall be based upon 
the facts and circumstances as of the time of the death of the miner.
    (2) The determination as to whether a spouse is a ``member of the 
same household'' as the miner shall be based upon the facts and 
circumstances with respect to the period or periods of time as to which 
the issue of membership in the same household is material.
    (3) The determination as to whether a parent, brother, or sister was 
``living in the miner's household'' shall take account of the 1-year 
period immediately prior to the miner's death.



Sec.725.233  Support and contributions.

    (a) Support defined. The term ``support'' includes food, shelter, 
clothing, ordinary medical expenses, and other ordinary and customary 
items for the maintenance of the person supported.
    (b) Contributions defined. The term ``contributions'' refers to 
contributions actually provided by the contributor from such 
individual's property, or the use thereof, or by the use of such 
individual's own credit.
    (c) Regular contributions and substantial contributions defined. The 
terms ``regular contributions'' and ``substantial contributions'' mean 
contributions that are customary and sufficient to constitute a material 
factor in the cost of the individual's support.
    (d) Contributions and community property. When a spouse receives and 
uses for his or her support income from services or property, and such 
income, under applicable State law, is the community property of the 
wife and her husband, no part of such income is a ``contribution'' by 
one spouse to the other's support regardless of the legal interest of 
the donor. However, when a spouse receives and uses for support, income 
from the services and the property of the other spouse and, under 
applicable State law, such income is community property, all of such 
income is considered to be a contribution by the donor to the spouse's 
support.
    (e) Court order for support defined. References to a support order 
in this

[[Page 298]]

subpart means any court order, judgment, or decree of a court of 
competent jurisdiction which requires regular contributions that are a 
material factor in the cost of the individual's support and which is in 
effect at the applicable time. If such contributions are required by a 
court order, this condition is met whether or not the contributions were 
actually made.
    (f) Written agreement defined. The term ``written agreement'' in the 
phrase ``substantial contributions pursuant to a written agreement'', as 
used in this subpart means an agreement signed by the miner providing 
for substantial contributions by the miner for the individual's support. 
It must be in effect at the applicable time but it need not be legally 
enforceable.
    (g) One-half support defined. The term ``one-half support'' means 
that the miner made regular contributions, in cash or in kind, to the 
support of a divorced spouse at the specified time or for the specified 
period, and that the amount of such contributions equalled or exceeded 
one-half the total cost of such individual's support at such time or 
during such period.
    (h) Totally dependent for support defined. The term ``totally 
dependent for support'' as used in Sec.725.225(b) means that the miner 
made regular contributions to the support of the miner's parents, 
brother, or sister, as the case may be, and that the amount of such 
contributions at least equalled the total cost of such individual's 
support.



                       Subpart C_Filing of Claims



Sec.725.301  Who may file a claim.

    (a) Any person who believes he or she may be entitled to benefits 
under the Act may file a claim in accordance with this subpart.
    (b) A claimant who has attained the age of 18, is mentally competent 
and physically able, may file a claim on his or her own behalf.
    (c) If a claimant is unable to file a claim on his or her behalf 
because of a legal or physical impairment, the following rules shall 
apply:
    (1) A claimant between the ages of 16 and 18 years who is mentally 
competent and not under the legal custody or care of another person, or 
a committee or institution, may upon filing a statement to the effect, 
file a claim on his or her own behalf. In any other case where the 
claimant is under 18 years of age, only a person, or the manager or 
principal officer of an institution having legal custody or care of the 
claimant may file a claim on his or her behalf.
    (2) If a claimant over 18 years of age has a legally appointed 
guardian or committee, only the guardian or committee may file a claim 
on his or her behalf.
    (3) If a claimant over 18 years of age is mentally incompetent or 
physically unable to file a claim and is under the care of another 
person, or an institution, only the person, or the manager or principal 
officer of the institution responsible for the care of the claimant, may 
file a claim on his or her behalf.
    (4) For good cause shown, the Office may accept a claim executed by 
a person other than one described in paragraphs (c)(2) or (3) of this 
section.
    (d) Except as provided in Sec.725.305, in order for a claim to be 
considered, the claimant must be alive at the time the claim is filed.



Sec.725.302  Evidence of authority to file a claim on behalf of another.

    A person filing a claim on behalf of a claimant shall submit 
evidence of his or her authority to so act at the time of filing or at a 
reasonable time thereafter in accordance with the following:
    (a) A legally appointed guardian or committee shall provide the 
Office with certification of appointment by a proper official of the 
court.
    (b) Any other person shall provide a statement describing his or her 
relationship to the claimant, the extent to which he or she has care of 
the claimant, or his or her position as an officer of the institution of 
which the claimant is an inmate. The Office may, at any time, require 
additional evidence to establish the authority of any such person.



Sec.725.303  Date and place of filing of claims.

    (a)(1) Claims for benefits shall be delivered, mailed to, or 
presented at, any

[[Page 299]]

of the various district offices of the Social Security Administration, 
or any of the various offices of the Department of Labor authorized to 
accept claims, or, in the case of a claim filed by or on behalf of a 
claimant residing outside the United States, mailed or presented to any 
office maintained by the Foreign Service of the United States. A claim 
shall be considered filed on the day it is received by the office in 
which it is first filed.
    (2) A claim submitted to a Foreign Service Office or any other 
agency or subdivision of the U.S. Government shall be forwarded to the 
Office and considered filed as of the date it was received at the 
Foreign Service Office or other governmental agency or unit.
    (b) A claim submitted by mail shall be considered filed as of the 
date of delivery unless a loss or impairment of benefit rights would 
result, in which case a claim shall be considered filed as of the date 
of its postmark. In the absence of a legible postmark, other evidence 
may be used to establish the mailing date.



Sec.725.304  Forms and initial processing.

    (a) Claims shall be filed on forms prescribed and approved by the 
Office. The district office at which the claim is filed will assist 
claimants in completing their forms.
    (b) If the place at which a claim is filed is an office of the 
Social Security Administration, such office shall forward the completed 
claim form to an office of the DCMWC, which is authorized to process the 
claim.



Sec.725.305  When a written statement is considered a claim.

    (a) The filing of a statement signed by an individual indicating an 
intention to claim benefits shall be considered to be the filing of a 
claim for the purposes of this part under the following circumstances:
    (1) The claimant or a proper person on his or her behalf (see Sec.
725.301) executes and files a prescribed claim form with the Office 
during the claimant's lifetime within the period specified in paragraph 
(b) of this section.
    (2) Where the claimant dies within the period specified in paragraph 
(b) of this section without filing a prescribed claim form, and a person 
acting on behalf of the deceased claimant's estate executes and files a 
prescribed claim form within the period specified in paragraph (c) of 
this section.
    (b) Upon receipt of a written statement indicating an intention to 
claim benefits, the Office shall notify the signer in writing that to be 
considered the claim must be executed by the claimant or a proper party 
on his or her behalf on the prescribed form and filed with the Office 
within six months from the date of mailing of the notice.
    (c) If before the notice specified in paragraph (b) of this section 
is sent, or within six months after such notice is sent, the claimant 
dies without having executed and filed a prescribed form, or without 
having had one executed and filed in his or her behalf, the Office shall 
upon receipt of notice of the claimant's death advise his or her estate, 
or those living at his or her last known address, in writing that for 
the claim to be considered, a prescribed claim form must be executed and 
filed by a person authorized to do so on behalf of the claimant's estate 
within six months of the date of the later notice.
    (d) Claims based upon written statements indicating an intention to 
claim benefits not perfected in accordance with this section shall not 
be processed.



Sec.725.306  Withdrawal of a claim.

    (a) A claimant or an individual authorized to execute a claim on a 
claimant's behalf or on behalf of claimant's estate under Sec.725.305, 
may withdraw a previously filed claim provided that:
    (1) He or she files a written request with the appropriate 
adjudication officer indicating the reasons for seeking withdrawal of 
the claim;
    (2) The appropriate adjudication officer approves the request for 
withdrawal on the grounds that it is in the best interests of the 
claimant or his or her estate, and;
    (3) Any payments made to the claimant in accordance with Sec.
725.522 are reimbursed.
    (b) When a claim has been withdrawn under paragraph (a) of this 
section, the claim will be considered not to have been filed.

[[Page 300]]



Sec.725.307  Cancellation of a request for withdrawal.

    At any time prior to approval, a request for withdrawal may be 
canceled by a written request of the claimant or a person authorized to 
act on the claimant's behalf or on behalf of the claimant's estate.



Sec.725.308  Time limits for filing claims.

    (a) A claim for benefits filed under this part by, or on behalf of, 
a miner shall be filed within three years after a medical determination 
of total disability due to pneumoconiosis which has been communicated to 
the miner or a person responsible for the care of the miner, or within 
three years after the date of enactment of the Black Lung Benefits 
Reform Act of 1977, whichever is later. There is no time limit on the 
filing of a claim by the survivor of a miner.
    (b) A miner who is receiving benefits under part B of title IV of 
the Act and who is notified by HEW of the right to seek medical benefits 
may file a claim for medical benefits under part C of title IV of the 
Act and this part. The Secretary of Health, Education, and Welfare is 
required to notify each miner receiving benefits under part B of this 
right. Notwithstanding the provisions of paragraph (a) of this section, 
a miner notified of his or her rights under this paragraph may file a 
claim under this part on or before December 31, 1980. Any claim filed 
after that date shall be untimely unless the time for filing has been 
enlarged for good cause shown.
    (c) There shall be a rebuttable presumption that every claim for 
benefits is timely filed. However, except as provided in paragraph (b) 
of this section, the time limits in this section are mandatory and may 
not be waived or tolled except upon a showing of extraordinary 
circumstances.



Sec.725.309  Additional claims; effect of prior denial of benefits.

    (a) If a claimant files a claim under this part while another claim 
filed by the claimant under this part is still pending, the later claim 
must be merged with the earlier claim for all purposes. For purposes of 
this section, a claim must be considered pending if it has not yet been 
finally denied.
    (b) If a claimant files a claim under this part within one year 
after the effective date of a final order denying a claim previously 
filed by the claimant under this part (see Sec.725.502(a)(2)), the 
later claim must be considered a request for modification of the prior 
denial and will be processed and adjudicated under Sec.725.310.
    (c) If a claimant files a claim under this part more than one year 
after the effective date of a final order denying a claim previously 
filed by the claimant under this part (see Sec.725.502(a)(2)), the 
later claim must be considered a subsequent claim for benefits. A 
subsequent claim will be processed and adjudicated in accordance with 
the provisions of subparts E and F of this part. Except as provided in 
paragraph (1) below, a subsequent claim must be denied unless the 
claimant demonstrates that one of the applicable conditions of 
entitlement (see Sec. Sec.725.202(d) (miner), 725.212 (spouse), 
725.218 (child), and 725.222 (parent, brother, or sister)) has changed 
since the date upon which the order denying the prior claim became 
final. The applicability of this paragraph may be waived by the operator 
or fund, as appropriate. The following additional rules apply to the 
adjudication of a subsequent claim:
    (1) The requirement to establish a change in an applicable condition 
of entitlement does not apply to a survivor's claim if the requirements 
of Sec. Sec.725.212(a)(3)(ii), 725.218(a)(2), or 725.222(a)(5)(ii) are 
met, and the survivor's prior claim was filed--
    (i) On or before January 1, 2005, or
    (ii) After January 1, 2005 and was finally denied prior to March 23, 
2010.
    (2) Any evidence submitted in connection with any prior claim must 
be made a part of the record in the subsequent claim, provided that it 
was not excluded in the adjudication of the prior claim.
    (3) For purposes of this section, the applicable conditions of 
entitlement are limited to those conditions upon which the prior denial 
was based. For example, if the claim was denied solely on the basis that 
the individual was not a miner, the subsequent claim must be denied 
unless the individual

[[Page 301]]

worked as a miner following the prior denial. Similarly, if the claim 
was denied because the miner did not meet one or more of the eligibility 
criteria contained in part 718 of this subchapter, the subsequent claim 
must be denied unless the miner meets at least one of the criteria that 
he or she did not meet previously.
    (4) If the applicable condition(s) of entitlement relate to the 
miner's physical condition, the subsequent claim may be approved only if 
new evidence submitted in connection with the subsequent claim 
establishes at least one applicable condition of entitlement. A 
subsequent claim filed by a surviving spouse, child, parent, brother, or 
sister must be denied unless the applicable conditions of entitlement in 
such claim include at least one condition unrelated to the miner's 
physical condition at the time of his death.
    (5) If the claimant demonstrates a change in one of the applicable 
conditions of entitlement, no findings made in connection with the prior 
claim, except those based on a party's failure to contest an issue (see 
Sec.725.463), will be binding on any party in the adjudication of the 
subsequent claim. However, any stipulation made by any party in 
connection with the prior claim will be binding on that party in the 
adjudication of the subsequent claim.
    (6) In any case in which a subsequent claim is awarded, no benefits 
may be paid for any period prior to the date upon which the order 
denying the prior claim became final.
    (d) In any case involving more than one claim filed by the same 
claimant, under no circumstances are duplicate benefits payable for 
concurrent periods of eligibility. Any duplicate benefits paid will be 
subject to collection or offset under subpart H of this part.

[78 FR 59118, Sept. 25, 2013]



Sec.725.310  Modification of awards and denials.

    (a) Upon his or her own initiative, or upon the request of any party 
on grounds of a change in conditions or because of a mistake in a 
determination of fact, the district director may, at any time before one 
year from the date of the last payment of benefits, or at any time 
before one year after the denial of a claim, reconsider the terms of an 
award or denial of benefits.
    (b) Modification proceedings shall be conducted in accordance with 
the provisions of this part as appropriate, except that the claimant and 
the operator, or group of operators or the fund, as appropriate, shall 
each be entitled to submit no more than one additional chest X-ray 
interpretation, one additional pulmonary function test, one additional 
arterial blood gas study, and one additional medical report in support 
of its affirmative case along with such rebuttal evidence and additional 
statements as are authorized by paragraphs (a)(2)(ii) and (a)(3)(ii) of 
Sec.725.414. Modification proceedings shall not be initiated before an 
administrative law judge or the Benefits Review Board.
    (c) At the conclusion of modification proceedings before the 
district director, the district director may issue a proposed decision 
and order (Sec.725.418) or, if appropriate, deny the claim by reason 
of abandonment (Sec.725.409). In any case in which the district 
director has initiated modification proceedings on his own initiative to 
alter the terms of an award or denial of benefits issued by an 
administrative law judge, the district director shall, at the conclusion 
of modification proceedings, forward the claim for a hearing (Sec.
725.421). In any case forwarded for a hearing, the administrative law 
judge assigned to hear such case shall consider whether any additional 
evidence submitted by the parties demonstrates a change in condition 
and, regardless of whether the parties have submitted new evidence, 
whether the evidence of record demonstrates a mistake in a determination 
of fact.
    (d) An order issued following the conclusion of modification 
proceedings may terminate, continue, reinstate, increase or decrease 
benefit payments or award benefits. Such order shall not affect any 
benefits previously paid, except that an order increasing the amount of 
benefits payable based on a finding of a mistake in a determination of 
fact may be made effective on the date from which benefits were 
determined payable by the terms of an earlier award. In the case of an 
award which is decreased, no payment made in excess of the decreased 
rate prior to

[[Page 302]]

the date upon which the party requested reconsideration under paragraph 
(a) of this section shall be subject to collection or offset under 
subpart H of this part, provided the claimant is without fault as 
defined by Sec.725.543. In the case of an award which is decreased 
following the initiation of modification by the district director, no 
payment made in excess of the decreased rate prior to the date upon 
which the district director initiated modification proceedings under 
paragraph (a) shall be subject to collection or offset under subpart H 
of this part, provided the claimant is without fault as defined by Sec.
725.543. In the case of an award which has become final and is 
thereafter terminated, no payment made prior to the date upon which the 
party requested reconsideration under paragraph (a) shall be subject to 
collection or offset under subpart H of this part. In the case of an 
award which has become final and is thereafter terminated following the 
initiation of modification by the district director, no payment made 
prior to the date upon which the district director initiated 
modification proceedings under paragraph (a) shall be subject to 
collection or offset under subpart H of this part.



Sec.725.311  Communications with respect to claims; time computations.

    (a) Unless otherwise specified by this part, all requests, 
responses, notices, decisions, orders, or other communications required 
or permitted by this part shall be in writing.
    (b) If required by this part, any document, brief, or other 
statement submitted in connection with the adjudication of a claim under 
this part shall be sent to each party to the claim by the submitting 
party. If proof of service is required with respect to any 
communication, such proof of service shall be submitted to the 
appropriate adjudication officer and filed as part of the claim record.
    (c) In computing any period of time described in this part, by any 
applicable statute, or by the order of any adjudication officer, the day 
of the act or event from which the designated period of time begins to 
run shall not be included. The last day of the period shall be included 
unless it is a Saturday, Sunday, or legal holiday, in which event the 
period extends until the next day which is not a Saturday, Sunday, or 
legal holiday. ``Legal holiday'' includes New Year's Day, Birthday of 
Martin Luther King, Jr., Washington's Birthday, Memorial Day, 
Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving 
Day, Christmas Day and any other day appointed as a holiday by the 
President or the Congress of the United States.
    (d) In computing any period of time described in this part in which 
the period within which to file a response commences upon receipt of a 
document, it shall be presumed, in the absence of evidence to the 
contrary, that the document was received on the seventh day after it was 
mailed. In any case in which a provision of this part requires a 
document to be sent to a person or party by certified mail, and the 
document is not sent by certified mail, but the person or party actually 
received the document, the document shall be deemed to have been sent in 
compliance with the provisions of this part. In such a case, any time 
period which commences upon the service of the document shall commence 
on the date the document was received.



      Subpart D_Adjudication Officers; Parties and Representatives



Sec.725.350  Who are the adjudication officers?

    (a) General. The persons authorized by the Secretary of Labor to 
accept evidence and decide claims on the basis of such evidence are 
called ``adjudication officers.'' This section describes the status of 
black lung claims adjudication officers.
    (b) District Director. The district director is that official of the 
DCMWC or his designee who is authorized to perform functions with 
respect to the development, processing, and adjudication of claims in 
accordance with this part.
    (c) Administrative law judge. An administrative law judge is that 
official appointed pursuant to 5 U.S.C. 3105 (or Public Law 94-504) who 
is qualified to preside at hearings under 5 U.S.C. 557 and is empowered 
by the Secretary to conduct formal hearings with respect

[[Page 303]]

to, and adjudicate, claims in accordance with this part. A person 
appointed under Public Law 94-504 shall not be considered an 
administrative law judge for purposes of this part for any period after 
March 1, 1979.



Sec.725.351  Powers of adjudication officers.

    (a) District Director. The district director is authorized to:
    (1) Make determinations with respect to claims as is provided in 
this part;
    (2) Conduct conferences and informal discovery proceedings as 
provided in this part;
    (3) Compel the production of documents by the issuance of a 
subpoena;
    (4) Prepare documents for the signature of parties;
    (5) Issue appropriate orders as provided in this part; and
    (6) Do all other things necessary to enable him or her to discharge 
the duties of the office.
    (b) Administrative Law Judge. An administrative law judge is 
authorized to:
    (1) Conduct formal hearings in accordance with the provisions of 
this part;
    (2) Administer oaths and examine witnesses;
    (3) Compel the production of documents and appearance of witnesses 
by the issuance of subpoenas;
    (4) Issue decisions and orders with respect to claims as provided in 
this part; and
    (5) Do all other things necessary to enable him or her to discharge 
the duties of the office.
    (c) If any person in proceedings before an adjudication officer 
disobeys or resists any lawful order or process, or misbehaves during a 
hearing or so near the place thereof as to obstruct the same, or 
neglects to produce, after having been ordered to do so, any pertinent 
book, paper or document, or refuses to appear after having been 
subpoenaed, or upon appearing refuses to take the oath as a witness, or 
after having taken the oath refuses to be examined according to law, the 
district director, or the administrative law judge responsible for the 
adjudication of the claim, shall certify the facts to the Federal 
district court having jurisdiction in the place in which he or she is 
sitting (or to the U.S. District Court for the District of Columbia if 
he or she is sitting in the District) which shall thereupon in a summary 
manner hear the evidence as to the acts complained of, and, if the 
evidence so warrants, punish such person in the same manner and to the 
same extent as for a contempt committed before the court, or commit such 
person upon the same condition as if the doing of the forbidden act had 
occurred with reference to the process or in the presence of the court.



Sec.725.352  Disqualification of adjudication officer.

    (a) No adjudication officer shall conduct any proceedings in a claim 
in which he or she is prejudiced or partial, or where he or she has any 
interest in the matter pending for decision. A decision to withdraw from 
the consideration of a claim shall be within the discretion of the 
adjudication officer. If that adjudication officer withdraws, another 
officer shall be designated by the Director or the Chief Administrative 
Law Judge, as the case may be, to complete the adjudication of the 
claim.
    (b) No adjudication officer shall be permitted to appear or act as a 
representative of a party under this part while such individual is 
employed as an adjudication officer. No adjudication officer shall be 
permitted at any time to appear or act as a representative in connection 
with any case or claim in which he or she was personally involved. No 
fee or reimbursement shall be awarded under this part to an individual 
who acts in violation of this paragraph.
    (c) No adjudication officer shall act in any claim involving a party 
which employed such adjudication officer within one year before the 
adjudication of such claim.
    (d) Notwithstanding paragraph (a) of this section, no adjudication 
officer shall be permitted to act in any claim involving a party who is 
related to the adjudication officer by consanguinity or affinity within 
the third degree as determined by the law of the place where such party 
is domiciled. Any action taken by an adjudication officer in knowing 
violation of this paragraph shall be void.

[[Page 304]]



Sec.725.360  Parties to proceedings.

    (a) Except as provided in Sec.725.361, no person other than the 
Secretary of Labor and authorized personnel of the Department of Labor 
shall participate at any stage in the adjudication of a claim for 
benefits under this part, unless such person is determined by the 
appropriate adjudication officer to qualify under the provisions of this 
section as a party to the claim. The following persons shall be parties:
    (1) The claimant;
    (2) A person other than a claimant, authorized to execute a claim on 
such claimant's behalf under Sec.725.301;
    (3) Any coal mine operator notified under Sec.725.407 of its 
possible liability for the claim;
    (4) Any insurance carrier of such operator; and
    (5) The Director in all proceedings relating to a claim for benefits 
under this part.
    (b) A widow, child, parent, brother, or sister, or the 
representative of a decedent's estate, who makes a showing in writing 
that his or her rights with respect to benefits may be prejudiced by a 
decision of an adjudication officer, may be made a party.
    (c) Any coal mine operator or prior operator or insurance carrier 
which has not been notified under Sec.725.407 and which makes a 
showing in writing that its rights may be prejudiced by a decision of an 
adjudication officer may be made a party.
    (d) Any other individual may be made a party if that individual's 
rights with respect to benefits may be prejudiced by a decision to be 
made.



Sec.725.361  Party amicus curiae.

    At the discretion of the Chief Administrative Law Judge or the 
administrative law judge assigned to the case, a person or entity which 
is not a party may be allowed to participate amicus curiae in a formal 
hearing only as to an issue of law. A person may participate amicus 
curiae in a formal hearing upon written request submitted with 
supporting arguments prior to the hearing. If the request is granted, 
the administrative law judge hearing the case will inform the party of 
the extent to which participation will be permitted. The request may, 
however, be denied summarily and without explanation.



Sec.725.362  Representation of parties.

    (a) Except for the Secretary of Labor, whose interests shall be 
represented by the Solicitor of Labor or his or her designee, each of 
the parties may appoint an individual to represent his or her interest 
in any proceeding for determination of a claim under this part. Such 
appointment shall be made in writing or on the record at the hearing. An 
attorney qualified in accordance with Sec.725.363(a) shall file a 
written declaration that he or she is authorized to represent a party, 
or declare his or her representation on the record at a formal hearing. 
Any other person (see Sec.725.363(b)) shall file a written notice of 
appointment signed by the party or his or her legal guardian, or enter 
his or her appearance on the record at a formal hearing if the party he 
or she seeks to represent is present and consents to the representation. 
Any written declaration or notice required by this section shall include 
the OWCP number assigned by the Office and shall be sent to the Office 
or, for representation at a formal hearing, to the Chief Administrative 
Law Judge. In any case, such representative must be qualified under 
Sec.725.363. No authorization for representation or agreement between 
a claimant and representative as to the amount of a fee, filed with the 
Social Security Administration in connection with a claim under part B 
of title IV of the Act, shall be valid under this part. A claimant who 
has previously authorized a person to represent him or her in connection 
with a claim originally filed under part B of title IV may renew such 
authorization by filing a statement to such effect with the Office or 
appropriate adjudication officer.
    (b) Any party may waive his or her right to be represented in the 
adjudication of a claim. If an adjudication officer determines, after an 
appropriate inquiry has been made, that a claimant who has been informed 
of his or her right to representation does not wish to obtain the 
services of a representative, such adjudication officer shall

[[Page 305]]

proceed to consider the claim in accordance with this part, unless it is 
apparent that the claimant is, for any reason, unable to continue 
without the help of a representative. However, it shall not be necessary 
for an adjudication officer to inquire as to the ability of a claimant 
to proceed without representation in any adjudication taking place 
without a hearing. The failure of a claimant to obtain representation in 
an adjudication taking place without a hearing shall be considered a 
waiver of the claimant's right to representation. However, at any time 
during the processing or adjudication of a claim, any claimant may 
revoke such waiver and obtain a representative.



Sec.725.363  Qualification of representative.

    (a) Attorney. Any attorney in good standing who is admitted to 
practice before a court of a State, territory, district, or insular 
possession, or before the Supreme Court of the United States or other 
Federal court and is not, pursuant to any provision of law, prohibited 
from acting as a representative, may be appointed as a representative.
    (b) Other person. With the approval of the adjudication officer, any 
other person may be appointed as a representative so long as that person 
is not, pursuant to any provision of law, prohibited from acting as a 
representative.



Sec.725.364  Authority of representative.

    A representative, appointed and qualified as provided in Sec. Sec.
725.362 and 725.363, may make or give on behalf of the party he or she 
represents, any request or notice relative to any proceeding before an 
adjudication officer, including formal hearing and review, except that 
such representative may not execute a claim for benefits, unless he or 
she is a person designated in Sec.725.301 as authorized to execute a 
claim. A representative shall be entitled to present or elicit evidence 
and make allegations as to facts and law in any proceeding affecting the 
party represented and to obtain information with respect to the claim of 
such party to the same extent as such party. Notice given to any party 
of any administrative action, determination, or decision, or request to 
any party for the production of evidence shall be sent to the 
representative of such party and such notice or request shall have the 
same force and effect as if it had been sent to the party represented.



Sec.725.365  Approval of representative's fees; lien against benefits.

    No fee charged for representation services rendered to a claimant 
with respect to any claim under this part shall be valid unless approved 
under this subpart. No contract or prior agreement for a fee shall be 
valid. In cases where the obligation to pay the attorney's fee is upon 
the claimant, the amount of the fee awarded may be made a lien upon the 
benefits due under an award and the adjudication officer shall fix, in 
the award approving the fee, such lien and the manner of payment of the 
fee. Any representative who is not an attorney may be awarded a fee for 
services under this subpart, except that no lien may be imposed with 
respect to such representative's fee.



Sec.725.366  Fees for representatives.

    (a) A representative seeking a fee for services performed on behalf 
of a claimant shall make application therefor to the district director, 
administrative law judge, or appropriate appellate tribunal, as the case 
may be, before whom the services were performed. The application shall 
be filed and served upon the claimant and all other parties within the 
time limits allowed by the district director, administrative law judge, 
or appropriate appellate tribunal. The application shall be supported by 
a complete statement of the extent and character of the necessary work 
done, and shall indicate the professional status (e.g., attorney, 
paralegal, law clerk, lay representative or clerical) of the person 
performing such work, and the customary billing rate for each such 
person. The application shall also include a listing of reasonable 
unreimbursed expenses, including those for travel, incurred by the 
representative or an employee of a representative in establishing the 
claimant's case. Any fee requested under this paragraph shall also 
contain a description of any fee requested, charged,

[[Page 306]]

or received for services rendered to the claimant before any State or 
Federal court or agency in connection with a related matter.
    (b) Any fee approved under paragraph (a) of this section shall be 
reasonably commensurate with the necessary work done and shall take into 
account the quality of the representation, the qualifications of the 
representative, the complexity of the legal issues involved, the level 
of proceedings to which the claim was raised, the level at which the 
representative entered the proceedings, and any other information which 
may be relevant to the amount of fee requested. No fee approved shall 
include payment for time spent in preparation of a fee application. No 
fee shall be approved for work done on claims filed between December 30, 
1969, and June 30, 1973, under part B of title IV of the Act, except for 
services rendered on behalf of the claimant in regard to the review of 
the claim under section 435 of the Act and part 727 of this subchapter 
(see Sec.725.4(d)).
    (c) In awarding a fee, the appropriate adjudication officer shall 
consider, and shall add to the fee, the amount of reasonable and 
unreimbursed expenses incurred in establishing the claimant's case. 
Reimbursement for travel expenses incurred by an attorney shall be 
determined in accordance with the provisions of Sec.725.459(a). No 
reimbursement shall be permitted for expenses incurred in obtaining 
medical or other evidence which has previously been submitted to the 
Office in connection with the claim.
    (d) Upon receipt of a request for approval of a fee, such request 
shall be reviewed and evaluated by the appropriate adjudication officer 
and a fee award issued. Any party may request reconsideration of a fee 
awarded by the adjudication officer. A revised or modified fee award may 
then be issued, if appropriate.
    (e) Each request for reconsideration or review of a fee award shall 
be in writing and shall contain supporting statements or information 
pertinent to any increase or decrease requested. If a fee awarded by a 
district director is disputed, such award shall be appealable directly 
to the Benefits Review Board. In such a fee dispute case, the record 
before the Board shall consist of the order of the district director 
awarding or denying the fee, the application for a fee, any written 
statement in opposition to the fee and the documentary evidence 
contained in the file which verifies or refutes any item claimed in the 
fee application.



Sec.725.367  Payment of a claimant's attorney's fee by responsible operator or 

fund.

    (a) An attorney who represents a claimant in the successful 
prosecution of a claim for benefits may be entitled to collect a 
reasonable attorney's fee from the responsible operator that is 
ultimately found liable for the payment of benefits, or, in a case in 
which there is no operator who is liable for the payment of benefits, 
from the fund. Generally, the operator or fund liable for the payment of 
benefits shall be liable for the payment of the claimant's attorney's 
fees where the operator or fund, as appropriate, took action, or 
acquiesced in action, that created an adversarial relationship between 
itself and the claimant. The fees payable under this section shall 
include reasonable fees for necessary services performed prior to the 
creation of the adversarial relationship. Circumstances in which a 
successful attorney's fees shall be payable by the responsible operator 
or the fund include, but are not limited to, the following:
    (1) The responsible operator designated by the district director 
(see Sec.725.410(a)(3)) fails to accept the claimant's entitlement to 
benefits within the 30-day period provided by Sec.725.412(b) and is 
ultimately determined to be liable for benefits. The operator shall be 
liable for an attorney's fee with respect to all necessary services 
performed by the claimant's attorney;
    (2) There is no operator that may be held liable for the payment of 
benefits, and the district director issues a schedule for the submission 
of additional evidence under Sec.725.410. The fund shall be liable for 
an attorney's fee with respect to all necessary services performed by 
the claimant's attorney;
    (3) The claimant submits a bill for medical treatment, and the party 
liable for the payment of benefits declines

[[Page 307]]

to pay the bill on the grounds that the treatment is unreasonable, or is 
for a condition that is not compensable. The responsible operator or 
fund, as appropriate, shall be liable for an attorney's fee with respect 
to all necessary services performed by the claimant's attorney;
    (4) A beneficiary seeks an increase in the amount of benefits 
payable, and the responsible operator or fund contests the claimant's 
right to that increase. If the beneficiary is successful in securing an 
increase in the amount of benefits payable, the operator or fund shall 
be liable for an attorney's fee with respect to all necessary services 
performed by the beneficiary's attorney;
    (5) The responsible operator or fund seeks a decrease in the amount 
of benefits payable. If the beneficiary is successful in resisting the 
request for a decrease in the amount of benefits payable, the operator 
or fund shall be liable for an attorney's fee with respect to all 
necessary services performed by the beneficiary's attorney. A request 
for information clarifying the amount of benefits payable shall not be 
considered a request to decrease that amount.
    (b) Any fee awarded under this section shall be in addition to the 
award of benefits, and shall be awarded, in an order, by the district 
director, administrative law judge, Board or court, before whom the work 
was performed. The operator or fund shall pay such fee promptly and 
directly to the claimant's attorney in a lump sum after the award of 
benefits becomes final.
    (c) Section 205(a) of the Black Lung Benefits Amendments of 1981, 
Public Law 97-119, amended section 422 of the Act and relieved operators 
and carriers from liability for the payment of benefits on certain 
claims. Payment of benefits on those claims was made the responsibility 
of the fund. The claims subject to this transfer of liability are 
described in Sec.725.496. On claims subject to the transfer of 
liability described in this paragraph the fund will pay all fees and 
costs which have been or will be awarded to claimant's attorneys which 
were or would have become the liability of an operator or carrier but 
for the enactment of the 1981 Amendments and which have not already been 
paid by such operator or carrier. Section 9501(d)(7) of the Internal 
Revenue Code (26 U.S.C.), which was also enacted as a part of the 1981 
Amendments to the Act, expressly prohibits the fund from reimbursing an 
operator or carrier for any attorney fees or costs which it has paid on 
cases subject to the transfer of liability provisions.



        Subpart E_Adjudication of Claims by the District Director



Sec.725.401  Claims development--general.

    After a claim has been received by the district director, the 
district director shall take such action as is necessary to develop, 
process, and make determinations with respect to the claim as provided 
in this subpart.



Sec.725.402  Approved State workers' compensation law.

    If a district director determines that any claim filed under this 
part is one subject to adjudication under a workers' compensation law 
approved under part 722 of this subchapter, he or she shall advise the 
claimant of this determination and of the Act's requirement that the 
claim must be filed under the applicable State workers' compensation 
law. The district director shall then prepare a proposed decision and 
order dismissing the claim for lack of jurisdiction pursuant to Sec.
725.418 and proceed as appropriate.



Sec.725.403  [Reserved]



Sec.725.404  Development of evidence--general.

    (a) Employment history. Each claimant shall furnish the district 
director with a complete and detailed history of the coal miner's 
employment and, upon request, supporting documentation.
    (b) Matters of record. Where it is necessary to obtain proof of age, 
marriage or termination of marriage, death, family relationship, 
dependency (see subpart B of this part), or any other fact which may be 
proven as a matter of public record, the claimant shall furnish such 
proof to the district director upon request.

[[Page 308]]

    (c) Documentary evidence. If a claimant is required to submit 
documents to the district director, the claimant shall submit either the 
original, a certified copy or a clear readable copy thereof. The 
district director or administrative law judge may require the submission 
of an original document or certified copy thereof, if necessary.
    (d) Submission of insufficient evidence. In the event a claimant 
submits insufficient evidence regarding any matter, the district 
director shall inform the claimant of what further evidence is necessary 
and request that such evidence be submitted within a specified 
reasonable time which may, upon request, be extended for good cause.



Sec.725.405  Development of medical evidence; scheduling of medical 

examinations and tests.

    (a) Upon receipt of a claim, the district director shall ascertain 
whether the claim was filed by or on account of a miner as defined in 
Sec.725.202, and in the case of a claim filed on account of a deceased 
miner, whether the claim was filed by an eligible survivor of such miner 
as defined in subpart B of this part.
    (b) In the case of a claim filed by or on behalf of a miner, the 
district director shall, where necessary, schedule the miner for a 
medical examination and testing under Sec.725.406.
    (c) In the case of a claim filed by or on behalf of a survivor of a 
miner, the district director shall obtain whatever medical evidence is 
necessary and available for the development and evaluation of the claim.
    (d) The district director shall, where appropriate, collect other 
evidence necessary to establish:
    (1) The nature and duration of the miner's employment; and
    (2) All other matters relevant to the determination of the claim.
    (e) If at any time during the processing of the claim by the 
district director, the evidence establishes that the claimant is not 
entitled to benefits under the Act, the district director may terminate 
evidentiary development of the claim and proceed as appropriate.



Sec.725.406  Medical examinations and tests.

    (a) The Act requires the Department to provide each miner who 
applies for benefits with the opportunity to undergo a complete 
pulmonary evaluation at no expense to the miner. A complete pulmonary 
evaluation includes a report of physical examination, a pulmonary 
function study, a chest roentgenogram and, unless medically 
contraindicated, a blood gas study.
    (b) As soon as possible after a miner files an application for 
benefits, the district director will provide the miner with a list of 
medical facilities and physicians in the state of the miner's residence 
and states contiguous to the state of the miner's residence that the 
Office has authorized to perform complete pulmonary evaluations. The 
miner shall select one of the facilities or physicians on the list, 
provided that the miner may not select any physician to whom the miner 
or the miner's spouse is related to the fourth degree of consanguinity, 
and the miner may not select any physician who has examined or provided 
medical treatment to the miner within the twelve months preceding the 
date of the miner's application. The district director will make 
arrangements for the miner to be given a complete pulmonary evaluation 
by that facility or physician. The results of the complete pulmonary 
evaluation shall not be counted as evidence submitted by the miner under 
Sec.725.414.
    (c) If any medical examination or test conducted under paragraph (a) 
of this section is not administered or reported in substantial 
compliance with the provisions of part 718 of this subchapter, or does 
not provide sufficient information to allow the district director to 
decide whether the miner is eligible for benefits, the district director 
shall schedule the miner for further examination and testing. Where the 
deficiencies in the report are the result of a lack of effort on the 
part of the miner, the miner will be afforded one additional opportunity 
to produce a satisfactory result. In order to determine whether any 
medical examination or test was administered and reported in substantial 
compliance with the provisions of part 718 of this subchapter, the 
district director may have

[[Page 309]]

any component of such examination or test reviewed by a physician 
selected by the district director.
    (d) After the physician completes the report authorized by paragraph 
(a), the district director will inform the miner that he may elect to 
have the results of the objective testing sent to his treating physician 
for use in preparing a medical opinion. The district director will also 
inform the claimant that any medical opinion submitted by his treating 
physician will count as one of the two medical opinions that the miner 
may submit under Sec.725.414 of this part.
    (e) The cost of any medical examination or test authorized under 
this section, including the cost of travel to and from the examination, 
shall be paid by the fund. No reimbursement for overnight accommodations 
shall be authorized unless the district director determines that an 
adequate testing facility is unavailable within one day's round trip 
travel by automobile from the miner's residence. The fund shall be 
reimbursed for such payments by an operator, if any, found liable for 
the payment of benefits to the claimant. If an operator fails to repay 
such expenses, with interest, upon request of the Office, the entire 
amount may be collected in an action brought under section 424 of the 
Act and Sec.725.603 of this part.

[65 FR 80054, Dec. 20, 2000]



Sec.725.407  Identification and notification of responsible operator.

    (a) Upon receipt of the miner's employment history, the district 
director shall investigate whether any operator may be held liable for 
the payment of benefits as a responsible operator in accordance with the 
criteria contained in Subpart G of this part.
    (b) The district director may identify one or more operators 
potentially liable for the payment of benefits in accordance with the 
criteria set forth in Sec.725.495 of this part. The district director 
shall notify each such operator of the existence of the claim. Where the 
records maintained by the Office pursuant to part 726 of this subchapter 
indicate that the operator had obtained a policy of insurance, and the 
claim falls within such policy, the notice provided pursuant to this 
section shall also be sent to the operator's carrier. Any operator or 
carrier notified of the claim shall thereafter be considered a party to 
the claim in accordance with Sec.725.360 of this part unless it is 
dismissed by an adjudication officer and is not thereafter notified 
again of its potential liability.
    (c) The notification issued pursuant to this section shall include a 
copy of the claimant's application and a copy of all evidence obtained 
by the district director relating to the miner's employment. The 
district director may request the operator to answer specific questions, 
including, but not limited to, questions related to the nature of its 
operations, its relationship with the miner, its financial status, 
including any insurance obtained to secure its obligations under the 
Act, and its relationship with other potentially liable operators. A 
copy of any notification issued pursuant to this section shall be sent 
to the claimant by regular mail.
    (d) If at any time before a case is referred to the Office of 
Administrative Law Judges, the district director determines that an 
operator which may be liable for the payment of benefits has not been 
notified under this section or has been incorrectly dismissed pursuant 
to Sec.725.410(a)(3), the district director shall give such operator 
notice of its potential liability in accordance with this section. The 
adjudication officer shall then take such further action on the claim as 
may be appropriate. There shall be no time limit applicable to a later 
identification of an operator under this paragraph if the operator 
fraudulently concealed its identity as an employer of the miner. The 
district director may not notify additional operators of their potential 
liability after a case has been referred to the Office of Administrative 
Law Judges, unless the case was referred for a hearing to determine 
whether the claim was properly denied as abandoned pursuant to Sec.
725.409.



Sec.725.408  Operator's response to notification.

    (a)(1) An operator which receives notification under Sec.725.407 
shall, within 30 days of receipt, file a response indicating its intent 
to accept or contest

[[Page 310]]

its identification as a potentially liable operator. The operator's 
response shall also be sent to the claimant by regular mail.
    (2) If the operator contests its identification, it shall, on a form 
supplied by the district director, state the precise nature of its 
disagreement by admitting or denying each of the following assertions. 
In answering these assertions, the term ``operator'' shall include any 
operator for which the identified operator may be considered a successor 
operator pursuant to Sec.725.492.
    (i) That the named operator was an operator for any period after 
June 30, 1973;
    (ii) That the operator employed the miner as a miner for a 
cumulative period of not less than one year;
    (iii) That the miner was exposed to coal mine dust while working for 
the operator;
    (iv) That the miner's employment with the operator included at least 
one working day after December 31, 1969; and
    (v) That the operator is capable of assuming liability for the 
payment of benefits.
    (3) An operator which receives notification under Sec.725.407, and 
which fails to file a response within the time limit provided by this 
section, shall not be allowed to contest its liability for the payment 
of benefits on any of the grounds set forth in paragraph (a)(2).
    (b)(1) Within 90 days of the date on which it receives notification 
under Sec.725.407, an operator may submit documentary evidence in 
support of its position.
    (2) No documentary evidence relevant to the grounds set forth in 
paragraph (a)(2) may be admitted in any further proceedings unless it is 
submitted within the time limits set forth in this section.



Sec.725.409  Denial of a claim by reason of abandonment.

    (a) A claim may be denied at any time by the district director by 
reason of abandonment where the claimant fails:
    (1) To undergo a required medical examination without good cause; 
or,
    (2) To submit evidence sufficient to make a determination of the 
claim; or,
    (3) To pursue the claim with reasonable diligence; or,
    (4) To attend an informal conference without good cause.
    (b)(1) If the district director determines that a denial by reason 
of abandonment under paragraphs (a)(1) through (3) of this section is 
appropriate, he or she shall notify the claimant of the reasons for such 
denial and of the action which must be taken to avoid a denial by reason 
of abandonment. If the claimant completes the action requested within 
the time allowed, the claim shall be developed, processed and 
adjudicated as specified in this part. If the claimant does not fully 
comply with the action requested by the district director, the district 
director shall notify the claimant that the claim has been denied by 
reason of abandonment. Such notification shall be served on the claimant 
and all other parties to the claim by certified mail.
    (2) In any case in which a claimant has failed to attend an informal 
conference and has not provided the district director with his reasons 
for failing to attend, the district director shall ask the claimant to 
explain his absence. In considering whether the claimant had good cause 
for his failure to attend the conference, the district director shall 
consider all relevant circumstances, including the age, education, and 
health of the claimant, as well as the distance between the claimant's 
residence and the location of the conference. If the district director 
concludes that the claimant had good cause for failing to attend the 
conference, he may continue processing the claim, including, where 
appropriate under Sec.725.416, the scheduling of an informal 
conference. If the claimant does not supply the district director with 
his reasons for failing to attend the conference within 30 days of the 
date of the district director's request, or the district director 
concludes that the reasons supplied by the claimant do not establish 
good cause, the district director shall notify the claimant that the 
claim has been denied by reason of abandonment. Such notification shall 
be served on the claimant and all other parties to the claim by 
certified mail.
    (c) The denial of a claim by reason of abandonment shall become 
effective

[[Page 311]]

and final unless, within 30 days after the denial is issued, the 
claimant requests a hearing. Following the expiration of the 30-day 
period, a new claim may be filed at any time pursuant to Sec.725.309. 
For purposes of Sec.725.309, a denial by reason of abandonment shall 
be deemed a finding that the claimant has not established any applicable 
condition of entitlement. If the claimant timely requests a hearing, the 
district director shall refer the case to the Office of Administrative 
Law Judges in accordance with Sec.725.421. Except upon the motion or 
written agreement of the Director, the hearing will be limited to the 
issue of whether the claim was properly denied by reason of abandonment. 
If the hearing is limited to the issue of abandonment and the 
administrative law judge determines that the claim was not properly 
denied by reason of abandonment, he shall remand the claim to the 
district director for the completion of administrative processing.



Sec.725.410  Submission of additional evidence.

    (a) After the district director completes the development of medical 
evidence under Sec.725.405 of this part, including the complete 
pulmonary evaluation authorized by Sec.725.406, and receives the 
responses and evidence submitted pursuant to Sec.725.408, he shall 
issue a schedule for the submission of additional evidence. The schedule 
shall contain the following information:
    (1) If the claim was filed by, or on behalf of, a miner, the 
schedule shall contain a summary of the complete pulmonary evaluation 
administered pursuant to Sec.725.406. If the claim was filed by, or on 
behalf of, a survivor, the schedule shall contain a summary of any 
medical evidence developed by the district director pursuant to Sec.
725.405(c).
    (2) The schedule shall contain the district director's preliminary 
analysis of the medical evidence. If the district director believes that 
the evidence fails to establish any necessary element of entitlement, he 
shall inform the claimant of the element of entitlement not established 
and the reasons for his conclusions and advise the claimant that, unless 
he submits additional evidence, the district director will issue a 
proposed decision and order denying the claim.
    (3) The schedule shall contain the district director's designation 
of a responsible operator liable for the payment of benefits. In the 
event that the district director has designated as the responsible 
operator an employer other than the employer who last employed the 
claimant as a miner, the district director shall include, with the 
schedule, a copy of the statements required by Sec.725.495(d) of this 
part. The district director may, in his discretion, dismiss as parties 
any of the operators notified of their potential liability pursuant to 
Sec.725.407. If the district director thereafter determines that the 
participation of a party dismissed pursuant to this section is required, 
he may once again notify the operator in accordance with Sec.
725.407(d).
    (4) The schedule shall notify the claimant and the designated 
responsible operator that they have the right to obtain further 
adjudication of the claim in accordance with this subpart, and that they 
have the right to submit additional evidence in accordance with this 
subpart. The schedule shall also notify the claimant that he has the 
right to obtain representation, under the terms set forth in subpart D, 
in order to assist him. In a case in which the district director has 
designated a responsible operator pursuant to paragraph (a)(3), the 
schedule shall further notify the claimant that if the operator fails to 
accept the claimant's entitlement to benefits within the time limit 
provided by Sec.725.412, the cost of obtaining additional medical and 
other necessary evidence, along with a reasonable attorney's fee, shall 
be reimbursed by the responsible operator in the event that the claimant 
establishes his entitlement to benefits payable by that operator. In a 
case in which there is no operator liable for the payment of benefits, 
the schedule shall notify the claimant that the cost of obtaining 
additional medical and other necessary evidence, along with a reasonable 
attorney's fee, shall be reimbursed by the fund.
    (b) The schedule shall allow all parties not less than 60 days 
within which

[[Page 312]]

to submit additional evidence, including evidence relevant to the 
claimant's eligibility for benefits and evidence relevant to the 
liability of the designated responsible operator, and shall provide not 
less than an additional 30 days within which the parties may respond to 
evidence submitted by other parties. Any such evidence must meet the 
requirements set forth in Sec.725.414 in order to be admitted into the 
record.
    (c) The district director shall serve a copy of the schedule, 
together with a copy of all of the evidence developed, on the claimant, 
the designated responsible operator, and all other operators which 
received notification pursuant to Sec.725.407. The schedule shall be 
served on each party by certified mail.



Sec.725.411  Initial adjudication in Trust Fund cases.

    Notwithstanding the requirements of Sec.725.410 of this part, if 
the district director concludes that the results of the complete 
pulmonary evaluation support a finding of eligibility, and that there is 
no operator responsible for the payment of benefits, the district 
director shall issue a proposed decision and order in accordance with 
Sec.725.418 of this part.



Sec.725.412  Operator's response.

    (a)(1) Within 30 days after the district director issues a schedule 
pursuant to Sec.725.410 of this part containing a designation of the 
responsible operator liable for the payment of benefits, that operator 
shall file a response with regard to its liability. The response shall 
specifically indicate whether the operator agrees or disagrees with the 
district director's designation.
    (2) If the responsible operator designated by the district director 
does not file a timely response, it shall be deemed to have accepted the 
district director's designation with respect to its liability, and to 
have waived its right to contest its liability in any further proceeding 
conducted with respect to the claim.
    (b) The responsible operator designated by the district director may 
also file a statement accepting claimant's entitlement to benefits. If 
that operator fails to file a timely response to the district director's 
designation, the district director shall, upon receipt of such a 
statement, issue a proposed decision and order in accordance with Sec.
725.418 of this part. If the operator fails to file a statement 
accepting the claimant's entitlement to benefits within 30 days after 
the district director issues a schedule pursuant to Sec.725.410 of 
this part, the operator shall be deemed to have contested the claimant's 
entitlement.



Sec.725.413  [Reserved]



Sec.725.414  Development of evidence.

    (a) Medical evidence. (1) For purposes of this section, a medical 
report shall consist of a physician's written assessment of the miner's 
respiratory or pulmonary condition. A medical report may be prepared by 
a physician who examined the miner and/or reviewed the available 
admissible evidence. A physician's written assessment of a single 
objective test, such as a chest X-ray or a pulmonary function test, 
shall not be considered a medical report for purposes of this section.
    (2)(i) The claimant shall be entitled to submit, in support of his 
affirmative case, no more than two chest X-ray interpretations, the 
results of no more than two pulmonary function tests, the results of no 
more than two arterial blood gas studies, no more than one report of an 
autopsy, no more than one report of each biopsy, and no more than two 
medical reports. Any chest X-ray interpretations, pulmonary function 
test results, blood gas studies, autopsy report, biopsy report, and 
physicians' opinions that appear in a medical report must each be 
admissible under this paragraph or paragraph (a)(4) of this section.
    (ii) The claimant shall be entitled to submit, in rebuttal of the 
case presented by the party opposing entitlement, no more than one 
physician's interpretation of each chest X-ray, pulmonary function test, 
arterial blood gas study, autopsy or biopsy submitted by the designated 
responsible operator or the fund, as appropriate, under paragraph 
(a)(3)(i) or (a)(3)(iii) of this section and by the Director pursuant to 
Sec.725.406. In any case in which the party opposing entitlement has 
submitted the results of other testing pursuant to

[[Page 313]]

Sec.718.107, the claimant shall be entitled to submit one physician's 
assessment of each piece of such evidence in rebuttal. In addition, 
where the responsible operator or fund has submitted rebuttal evidence 
under paragraph (a)(3)(ii) or (a)(3)(iii) of this section with respect 
to medical testing submitted by the claimant, the claimant shall be 
entitled to submit an additional statement from the physician who 
originally interpreted the chest X-ray or administered the objective 
testing. Where the rebuttal evidence tends to undermine the conclusion 
of a physician who prepared a medical report submitted by the claimant, 
the claimant shall be entitled to submit an additional statement from 
the physician who prepared the medical report explaining his conclusion 
in light of the rebuttal evidence.
    (3)(i) The responsible operator designated pursuant to Sec.725.410 
shall be entitled to obtain and submit, in support of its affirmative 
case, no more than two chest X-ray interpretations, the results of no 
more than two pulmonary function tests, the results of no more than two 
arterial blood gas studies, no more than one report of an autopsy, no 
more than one report of each biopsy, and no more than two medical 
reports. Any chest X-ray interpretations, pulmonary function test 
results, blood gas studies, autopsy report, biopsy report, and 
physicians' opinions that appear in a medical report must each be 
admissible under this paragraph or paragraph (a)(4) of this section. In 
obtaining such evidence, the responsible operator may not require the 
miner to travel more than 100 miles from his or her place of residence, 
or the distance traveled by the miner in obtaining the complete 
pulmonary evaluation provided by Sec.725.406 of this part, whichever 
is greater, unless a trip of greater distance is authorized in writing 
by the district director. If a miner unreasonably refuses--
    (A) To provide the Office or the designated responsible operator 
with a complete statement of his or her medical history and/or to 
authorize access to his or her medical records, or
    (B) To submit to an evaluation or test requested by the district 
director or the designated responsible operator, the miner's claim may 
be denied by reason of abandonment. (See Sec.725.409 of this part).
    (ii) The responsible operator shall be entitled to submit, in 
rebuttal of the case presented by the claimant, no more than one 
physician's interpretation of each chest X-ray, pulmonary function test, 
arterial blood gas study, autopsy or biopsy submitted by the claimant 
under paragraph (a)(2)(i) of this section and by the Director pursuant 
to Sec.725.406. In any case in which the claimant has submitted the 
results of other testing pursuant to Sec.718.107, the responsible 
operator shall be entitled to submit one physician's assessment of each 
piece of such evidence in rebuttal. In addition, where the claimant has 
submitted rebuttal evidence under paragraph (a)(2)(ii) of this section, 
the responsible operator shall be entitled to submit an additional 
statement from the physician who originally interpreted the chest X-ray 
or administered the objective testing. Where the rebuttal evidence tends 
to undermine the conclusion of a physician who prepared a medical report 
submitted by the responsible operator, the responsible operator shall be 
entitled to submit an additional statement from the physician who 
prepared the medical report explaining his conclusion in light of the 
rebuttal evidence.
    (iii) In a case in which the district director has not identified 
any potentially liable operators, or has dismissed all potentially 
liable operators under Sec.725.410(a)(3), the district director shall 
be entitled to exercise the rights of a responsible operator under this 
section, except that the evidence obtained in connection with the 
complete pulmonary evaluation performed pursuant to Sec.725.406 shall 
be considered evidence obtained and submitted by the Director, OWCP, for 
purposes of paragraph (a)(3)(i) of this section. In a case involving a 
dispute concerning medical benefits under Sec.725.708 of this part, 
the district director shall be entitled to develop medical evidence to 
determine whether the medical bill is compensable under the standard set 
forth in Sec.725.701 of this part.
    (4) Notwithstanding the limitations in paragraphs (a)(2) and (a)(3) 
of this

[[Page 314]]

section, any record of a miner's hospitalization for a respiratory or 
pulmonary or related disease, or medical treatment for a respiratory or 
pulmonary or related disease, may be received into evidence.
    (5) A copy of any documentary evidence submitted by a party must be 
served on all other parties to the claim. If the claimant is not 
represented by an attorney, the district director shall mail a copy of 
all documentary evidence submitted by the claimant to all other parties 
to the claim. Following the development and submission of affirmative 
medical evidence, the parties may submit rebuttal evidence in accordance 
with the schedule issued by the district director.
    (b) Evidence pertaining to liability. (1) Except as provided by 
Sec.725.408(b)(2), the designated responsible operator may submit 
evidence to demonstrate that it is not the potentially liable operator 
that most recently employed the claimant.
    (2) Any other party may submit evidence regarding the liability of 
the designated responsible operator or any other operator.
    (3) A copy of any documentary evidence submitted under this 
paragraph must be mailed to all other parties to the claim. Following 
the submission of affirmative evidence, the parties may submit rebuttal 
evidence in accordance with the schedule issued by the district 
director.
    (c) Testimony. A physician who prepared a medical report admitted 
under this section may testify with respect to the claim at any formal 
hearing conducted in accordance with subpart F of this part, or by 
deposition. If a party has submitted fewer than two medical reports as 
part of that party's affirmative case under this section, a physician 
who did not prepare a medical report may testify in lieu of such a 
medical report. The testimony of such a physician shall be considered a 
medical report for purposes of the limitations provided by this section. 
A party may offer the testimony of no more than two physicians under the 
provisions of this section unless the adjudication officer finds good 
cause under paragraph (b)(1) of Sec.725.456 of this part. In 
accordance with the schedule issued by the district director, all 
parties shall notify the district director of the name and current 
address of any potential witness whose testimony pertains to the 
liability of a potentially liable operator or the designated responsible 
operator. Absent such notice, the testimony of a witness relevant to the 
liability of a potentially liable operator or the designated responsible 
operator shall not be admitted in any hearing conducted with respect to 
the claim unless the administrative law judge finds that the lack of 
notice should be excused due to extraordinary circumstances.
    (d) Except to the extent permitted by Sec.725.456 and Sec.
725.310(b), the limitations set forth in this section shall apply to all 
proceedings conducted with respect to a claim, and no documentary 
evidence pertaining to liability shall be admitted in any further 
proceeding conducted with respect to a claim unless it is submitted to 
the district director in accordance with this section.



Sec.725.415  Action by the district director after development of evidence.

    (a) At the end of the period permitted under Sec.725.410(b) for 
the submission of evidence, the district director shall review the claim 
on the basis of all evidence submitted in accordance with Sec.725.414.
    (b) After review of all evidence submitted, the district director 
may issue another schedule for the submission of additional evidence 
pursuant to Sec.725.410, identifying another potentially liable 
operator as the responsible operator liable for the payment of benefits. 
In such a case, the district director shall not permit the development 
or submission of any additional medical evidence until after he has made 
a final determination of the identity of the responsible operator liable 
for the payment of benefits. If the operator who is finally determined 
to be the responsible operator has not had the opportunity to submit 
medical evidence pursuant to Sec.725.410, the district director shall 
allow the designated responsible operator and the claimant not less than 
60 days within which to submit evidence relevant to the claimant's 
eligibility for benefits. The designated responsible operator may elect 
to

[[Page 315]]

adopt any medical evidence previously submitted by another operator as 
its own evidence, subject to the limitations of Sec.725.414. The 
district director may also schedule a conference in accordance with 
Sec.725.416, issue a proposed decision and order in accordance with 
Sec.725.418, or take such other action as the district director 
considers appropriate.



Sec.725.416  Conferences.

    (a) At the conclusion of the period permitted by Sec.725.410(b) of 
this part for the submission of evidence, the district director may 
conduct an informal conference in any claim where it appears that such 
conference will assist in the voluntary resolution of any issue raised 
with respect to the claim. The conference proceedings shall not be 
stenographically reported and sworn testimony shall not be taken. Any 
conference conducted pursuant to this paragraph shall be held no later 
than 90 days after the conclusion of the period permitted by Sec.
725.410(b) of this part for the submission of evidence, unless one of 
the parties requests that the time period be extended for good cause 
shown. If the district director is unable to hold the conference within 
the time period permitted by this paragraph, he shall proceed to issue a 
proposed decision and order under Sec.725.418 of this part.
    (b) The district director shall notify the parties of a definite 
time and place for the conference. The district director shall advise 
the parties that they have a right to representation at the conference, 
by an attorney or a lay representative, and that no conference shall 
take place unless the parties are represented. A coal mine operator 
which is self-insured, or which is covered by a policy of insurance for 
the claim for which a conference is scheduled, shall be deemed to be 
represented. The notification shall set forth the specific reasons why 
the district director believes that a conference will assist in the 
voluntary resolution of any issue raised with respect to the claim. No 
sanction may be imposed under paragraph (c) of this section unless the 
record contains a notification that meets the requirements of this 
section. The district director may in his or her discretion, or on the 
motion of any party, cancel a conference or allow any or all of the 
parties to participate by telephone.
    (c) The unexcused failure of any party to appear at an informal 
conference shall be grounds for the imposition of sanctions. If the 
claimant fails to appear, the district director may take such steps as 
are authorized by Sec.725.409(b)(2) to deny the claim by reason of 
abandonment. If the responsible operator fails to appear, it shall be 
deemed to have waived its right to contest its potential liability for 
an award of benefits and, in the discretion of the district director, 
its right to contest any issue related to the claimant's eligibility.
    (d) Any representative of an operator, of an operator's insurance 
carrier, or of a claimant, authorized to represent such party in 
accordance with paragraph (b), shall be deemed to have sufficient 
authority to stipulate facts or issues or agree to a final disposition 
of the claim.
    (e) Procedures to be followed at a conference shall be within the 
discretion of the district director.



Sec.725.417  Action at the conclusion of conference.

    (a) At the conclusion of a conference, the district director shall 
prepare a stipulation of contested and uncontested issues which shall be 
signed by the parties and the district director. If a hearing is 
conducted with respect to the claim, this stipulation shall be submitted 
to the Office of Administrative Law Judges and placed in the claim 
record.
    (b) In appropriate cases, the district director may permit a 
reasonable time for the submission of additional evidence following a 
conference, provided that such evidence does not exceed the limits set 
forth in Sec.725.414. The district director may also notify additional 
operators of their potential liability pursuant to Sec.725.407, or 
issue another schedule for the submission of additional evidence 
pursuant to Sec.725.410, designating another potentially liable 
operator as the responsible operator liable for the payment of benefits, 
in order to allow that operator an opportunity to submit evidence 
relevant to

[[Page 316]]

its liability for benefits as well as the claimant's eligibility for 
benefits.
    (c) Within 20 days after the termination of all conference 
proceedings, the district director shall prepare and send to the parties 
a proposed decision and order pursuant to Sec.725.418 of this part.



Sec.725.418  Proposed decision and order.

    (a) Within 20 days after the termination of all informal conference 
proceedings, or, if no informal conference is held, at the conclusion of 
the period permitted by Sec.725.410(b) for the submission of evidence, 
the district director will issue a proposed decision and order. A 
proposed decision and order is a document, issued by the district 
director after the evidentiary development of the claim is completed and 
all contested issues, if any, are joined, which purports to resolve a 
claim on the basis of the evidence submitted to or obtained by the 
district director. A proposed decision and order will be considered a 
final adjudication of a claim only as provided in Sec.725.419. A 
proposed decision and order may be issued by the district director at 
any time during the adjudication of any claim if:
    (1) Issuance is authorized or required by this part;
    (2) The district director determines that its issuance will expedite 
the adjudication of the claim; or
    (3) The district director determines that the claimant is a survivor 
who is entitled to benefits under 30 U.S.C. 932(l). In such cases, the 
district director may designate the responsible operator in the proposed 
decision and order regardless of whether the requirements of paragraph 
(d) of this section have been met. Any operator identified as liable for 
benefits under this paragraph may challenge the finding of liability by 
timely requesting revision of the proposed decision and order and 
specifically indicating disagreement with that finding. See 20 CFR 
725.419(a) and (b). In such cases, the district director must allow all 
parties 30 days within which to submit liability evidence. At the end of 
this period, the district director must issue a new proposed decision 
and order.
    (b) A proposed decision and order must contain findings of fact and 
conclusions of law. It must be served on all parties to the claim by 
certified mail.
    (c) The proposed decision and order must contain a notice of the 
right of any interested party to request a formal hearing before the 
Office of Administrative Law Judges. If the proposed decision and order 
is a denial of benefits, and the claimant has previously filed a request 
for a hearing, the proposed decision and order must notify the claimant 
that the case will be referred for a hearing pursuant to the previous 
request unless the claimant notifies the district director that he no 
longer desires a hearing. If the proposed decision and order is an award 
of benefits, and the designated responsible operator has previously 
filed a request for a hearing, the proposed decision and order must 
notify the operator that the case will be referred for a hearing 
pursuant to the previous request unless the operator notifies the 
district director that it no longer desires a hearing.
    (d) The proposed decision and order must reflect the district 
director's final designation of the responsible operator liable for the 
payment of benefits. Except as provided in paragraph (a)(3) of this 
section, no operator may be finally designated as the responsible 
operator unless it has received notification of its potential liability 
pursuant to Sec.725.407, and the opportunity to submit additional 
evidence pursuant to Sec.725.410. The district director must dismiss, 
as parties to the claim, all other potentially liable operators that 
received notification pursuant to Sec.725.407 and that were not 
previously dismissed pursuant to Sec.725.410(a)(3).

[78 FR 59118, Sept. 25, 2013]



Sec.725.419  Response to proposed decision and order.

    (a) Within 30 days after the date of issuance of a proposed decision 
and order, any party may, in writing, request a revision of the proposed 
decision and order or a hearing. If a hearing is requested, the district 
director shall refer the claim to the Office of Administrative Law 
Judges (see Sec.725.421).

[[Page 317]]

    (b) Any response made by a party to a proposed decision and order 
shall specify the findings and conclusions with which the responding 
party disagrees, and shall be served on the district director and all 
other parties to the claim.
    (c) If a timely request for revision of a proposed decision and 
order is made, the district director may amend the proposed decision and 
order, as circumstances require, and serve the revised proposed decision 
and order on all parties or take such other action as is appropriate. If 
a revised proposed decision and order is issued, each party to the claim 
shall have 30 days from the date of issuance of that revised proposed 
decision and order within which to request a hearing.
    (d) If no response to a proposed decision and order is sent to the 
district director within the period described in paragraph (a) of this 
section, or if no response to a revised proposed decision and order is 
sent to the district director within the period described in paragraph 
(c) of this section, the proposed decision and order shall become a 
final decision and order, which is effective upon the expiration of the 
applicable 30-day period. Once a proposed decision and order or revised 
proposed decision and order becomes final and effective, all rights to 
further proceedings with respect to the claim shall be considered 
waived, except as provided in Sec.725.310.



Sec.725.420  Initial determinations.

    (a) Section 9501(d)(1)(A)(1) of the Internal Revenue Code (26 
U.S.C.) provides that the Black Lung Disability Trust Fund shall begin 
the payment of benefits on behalf of an operator in any case in which 
the operator liable for such payments has not commenced payment of such 
benefits within 30 days after the date of an initial determination of 
eligibility by the Secretary. For claims filed on or after January 1, 
1982, the payment of such interim benefits from the fund is limited to 
benefits accruing after the date of such initial determination.
    (b) Except as provided in Sec.725.415, after the district director 
has determined that a claimant is eligible for benefits, on the basis of 
all evidence submitted by a claimant and operator, and has determined 
that a hearing will be necessary to resolve the claim, the district 
director shall in writing so inform the parties and direct the operator 
to begin the payment of benefits to the claimant in accordance with 
Sec.725.522. The date on which this writing is sent to the parties 
shall be considered the date of initial determination of the claim.
    (c) If a notified operator refuses to commence payment of a claim 
within 30 days from the date on which an initial determination is made 
under this section, benefits shall be paid by the fund to the claimant 
in accordance with Sec.725.522, and the operator shall be liable to 
the fund, if such operator is determined liable for the claim, for all 
benefits paid by the fund on behalf of such operator, and, in addition, 
such penalties and interest as are appropriate.



Sec.725.421  Referral of a claim to the Office of Administrative Law Judges.

    (a) In any claim for which a formal hearing is requested or ordered, 
and with respect to which the district director has completed 
evidentiary development and adjudication without having resolved all 
contested issues, the district director shall refer the claim to the 
Office of Administrative Law Judges for a hearing.
    (b) In any case referred to the Office of Administrative Law Judges 
under this section, the district director shall transmit to that office 
the following documents, which shall be placed in the record at the 
hearing subject to the objection of any party:
    (1) Copies of the claim form or forms;
    (2) Any statement, document, or pleading submitted by a party to the 
claim;
    (3) A copy of the notification to an operator of its possible 
liability for the claim, and any schedule for the submission of 
additional evidence issued pursuant to Sec.725.410 designating a 
potentially liable operator as the responsible operator;
    (4) All medical evidence submitted to the district director under 
this part by the claimant and the potentially liable operator designated 
as the responsible operator in the proposed decision and order issued 
pursuant to Sec.725.418, or the

[[Page 318]]

fund, as appropriate, subject to the limitations of Sec.725.414 of 
this part; this evidence shall include the results of any medical 
examination or test conducted pursuant to Sec.725.406, and all 
evidence relevant to the liability of the responsible operator submitted 
to the district director under this part;
    (5) Any written stipulation of law or fact or stipulation of 
contested and uncontested issues entered into by the parties;
    (6) Any pertinent forms submitted to the district director;
    (7) The statement by the district director of contested and 
uncontested issues in the claim; and
    (8) The district director's initial determination of eligibility or 
other documents necessary to establish the right of the fund to 
reimbursement, if appropriate. Copies of the transmittal notice shall 
also be sent to all parties to the claim by regular mail.
    (c) A party may at any time request and obtain from the district 
director copies of documents transmitted to the Office of Administrative 
Law Judges under paragraph (b) of this section. If the party has 
previously been provided with such documents, additional copies may be 
sent to the party upon the payment of a copying fee to be determined by 
the district director.



Sec.725.422  Legal assistance.

    The Secretary or his or her designee may, upon request, provide a 
claimant with legal assistance in processing a claim under the Act. Such 
assistance may be made available to a claimant in the discretion of the 
Solicitor of Labor or his or her designee at any time prior to or during 
the time in which the claim is being adjudicated and shall be furnished 
without charge to the claimant. Representation of a claimant in 
adjudicatory proceedings shall not be provided by the Department of 
Labor unless it is determined by the Solicitor of Labor that such 
representation is in the best interests of the black lung benefits 
program. In no event shall representation be provided to a claimant in a 
claim with respect to which the claimant's interests are adverse to 
those of the Secretary of Labor or the fund.



Sec.725.423  Extensions of time.

    Except for the 30-day time limit set forth in Sec.725.419, any of 
the time periods set forth in this subpart may be extended, for good 
cause shown, by filing a request for an extension with the district 
director prior to the expiration of the time period.



                           Subpart F_Hearings



Sec.725.450  Right to a hearing.

    Any party to a claim (see Sec.725.360) shall have a right to a 
hearing concerning any contested issue of fact or law unresolved by the 
district director. There shall be no right to a hearing until the 
processing and adjudication of the claim by the district director has 
been completed. There shall be no right to a hearing in a claim with 
respect to which a determination of the claim made by the district 
director has become final and effective in accordance with this part.



Sec.725.451  Request for hearing.

    After the completion of proceedings before the district director, or 
as is otherwise indicated in this part, any party may in writing request 
a hearing on any contested issue of fact or law (see Sec.725.419). A 
district director may on his or her own initiative refer a case for 
hearing. If a hearing is requested, or if a district director determines 
that a hearing is necessary to the resolution of any issue, the claim 
shall be referred to the Chief Administrative Law Judge for a hearing 
under Sec.725.421.



Sec.725.452  Type of hearing; parties.

    (a) A hearing held under this part shall be conducted by an 
administrative law judge designated by the Chief Administrative Law 
Judge. Except as otherwise provided by this part, all hearings shall be 
conducted in accordance with the provisions of 5 U.S.C. 554 et seq.
    (b) All parties to a claim shall be permitted to participate fully 
at a hearing held in connection with such claim.
    (c) A full evidentiary hearing need not be conducted if a party 
moves for summary judgment and the administrative law judge determines 
that there is no genuine issue as to any material

[[Page 319]]

fact and that the moving party is entitled to the relief requested as a 
matter of law. All parties shall be entitled to respond to the motion 
for summary judgment prior to decision thereon.
    (d) If the administrative law judge believes that an oral hearing is 
not necessary (for any reason other than on motion for summary 
judgment), the judge shall notify the parties by written order and allow 
at least 30 days for the parties to respond. The administrative law 
judge shall hold the oral hearing if any party makes a timely request in 
response to the order.



Sec.725.453  Notice of hearing.

    All parties shall be given at least 30 days written notice of the 
date and place of a hearing and the issues to be resolved at the 
hearing. Such notice shall be sent to each party or representative by 
certified mail.



Sec.725.454  Time and place of hearing; transfer of cases.

    (a) The Chief Administrative Law Judge shall assign a definite time 
and place for a formal hearing, and shall, where possible, schedule the 
hearing to be held at a place within 75 miles of the claimant's 
residence unless an alternate location is requested by the claimant.
    (b) If the claimant's residence is not in any State, the Chief 
Administrative Law Judge may, in his or her discretion, schedule the 
hearing in the country of the claimant's residence.
    (c) The Chief Administrative Law Judge or the administrative law 
judge assigned the case may in his or her discretion direct that a 
hearing with respect to a claim shall begin at one location and then 
later be reconvened at another date and place.
    (d) The Chief Administrative Law Judge or administrative law judge 
assigned the case may change the time and place for a hearing, either on 
his or her own motion or for good cause shown by a party. The 
administrative law judge may adjourn or postpone the hearing for good 
cause shown, at any time prior to the mailing to the parties of the 
decision in the case. Unless otherwise agreed, at least 10 days notice 
shall be given to the parties of any change in the time or place of 
hearing.
    (e) The Chief Administrative Law Judge may for good cause shown 
transfer a case from one administrative law judge to another.



Sec.725.455  Hearing procedures; generally.

    (a) General. The purpose of any hearing conducted under this subpart 
shall be to resolve contested issues of fact or law. Except as provided 
in Sec.725.421(b)(8), any findings or determinations made with respect 
to a claim by a district director shall not be considered by the 
administrative law judge.
    (b) Evidence. The administrative law judge shall at the hearing 
inquire fully into all matters at issue, and shall not be bound by 
common law or statutory rules of evidence, or by technical or formal 
rules of procedure, except as provided by 5 U.S.C. 554 and this subpart. 
The administrative law judge shall receive into evidence the testimony 
of the witnesses and parties, the evidence submitted to the Office of 
Administrative Law Judges by the district director under Sec.725.421, 
and such additional evidence as may be submitted in accordance with the 
provisions of this subpart. The administrative law judge may entertain 
the objections of any party to the evidence submitted under this 
section.
    (c) Procedure. The conduct of the hearing and the order in which 
allegations and evidence shall be presented shall be within the 
discretion of the administrative law judge and shall afford the parties 
an opportunity for a fair hearing.
    (d) Oral argument and written allegations. The parties, upon 
request, may be allowed a reasonable time for the presentation of oral 
argument at the hearing. Briefs or other written statements or 
allegations as to facts or law may be filed by any party with the 
permission of the administrative law judge. Copies of any brief or other 
written statement shall be filed with the administrative law judge and 
served on all parties by the submitting party.



Sec.725.456  Introduction of documentary evidence.

    (a) All documents transmitted to the Office of Administrative Law 
Judges

[[Page 320]]

under Sec.725.421 shall be placed into evidence by the administrative 
law judge, subject to objection by any party.
    (b)(1) Documentary evidence pertaining to the liability of a 
potentially liable operator and/or the identification of a responsible 
operator which was not submitted to the district director shall not be 
admitted into the hearing record in the absence of extraordinary 
circumstances. Medical evidence in excess of the limitations contained 
in Sec.725.414 shall not be admitted into the hearing record in the 
absence of good cause.
    (2) Subject to the limitations in paragraph (b)(1) of this section, 
any other documentary material, including medical reports, which was not 
submitted to the district director, may be received in evidence subject 
to the objection of any party, if such evidence is sent to all other 
parties at least 20 days before a hearing is held in connection with the 
claim.
    (3) Documentary evidence, which is not exchanged with the parties in 
accordance with this paragraph, may be admitted at the hearing with the 
written consent of the parties or on the record at the hearing, or upon 
a showing of good cause why such evidence was not exchanged in 
accordance with this paragraph. If documentary evidence is not exchanged 
in accordance with paragraph (b)(2) of this section and the parties do 
not waive the 20-day requirement or good cause is not shown, the 
administrative law judge shall either exclude the late evidence from the 
record or remand the claim to the district director for consideration of 
such evidence.
    (4) A medical report which is not made available to the parties in 
accordance with paragraph (b)(2) of this section shall not be admitted 
into evidence in any case unless the hearing record is kept open for at 
least 30 days after the hearing to permit the parties to take such 
action as each considers appropriate in response to such evidence. If, 
in the opinion of the administrative law judge, evidence is withheld 
from the parties for the purpose of delaying the adjudication of the 
claim, the administrative law judge may exclude such evidence from the 
hearing record and close the record at the conclusion of the hearing.
    (c) Subject to paragraph (b) of this section, documentary evidence 
which the district director excludes from the record, and the objections 
to such evidence, may be submitted by the parties to the administrative 
law judge, who shall independently determine whether the evidence shall 
be admitted.
    (1) If the evidence is admitted, the administrative law judge may, 
in his or her discretion, remand the claim to the district director for 
further consideration.
    (2) If the evidence is admitted, the administrative law judge shall 
afford the opposing party or parties the opportunity to develop such 
additional documentary evidence as is necessary to protect the right of 
cross-examination.
    (d) All medical records and reports submitted by any party shall be 
considered by the administrative law judge in accordance with the 
quality standards contained in part 718 of this subchapter.
    (e) If the administrative law judge concludes that the complete 
pulmonary evaluation provided pursuant to Sec.725.406, or any part 
thereof, fails to comply with the applicable quality standards, or fails 
to address the relevant conditions of entitlement (see Sec.
725.202(d)(2)(i) through (iv)) in a manner which permits resolution of 
the claim, the administrative law judge shall, in his or her discretion, 
remand the claim to the district director with instructions to develop 
only such additional evidence as is required, or allow the parties a 
reasonable time to obtain and submit such evidence, before the 
termination of the hearing.



Sec.725.457  Witnesses.

    (a) Witnesses at the hearing shall testify under oath or 
affirmation. The administrative law judge and the parties may question 
witnesses with respect to any matters relevant and material to any 
contested issue. Any party who intends to present the testimony of an 
expert witness at a hearing, including any physician, regardless of 
whether the physician has previously prepared a medical report, shall so 
notify all other

[[Page 321]]

parties to the claim at least 10 days before the hearing. The failure to 
give notice of the appearance of an expert witness in accordance with 
this paragraph, unless notice is waived by all parties, shall preclude 
the presentation of testimony by such expert witness.
    (b) No person shall be required to appear as a witness in any 
proceeding before an administrative law judge at a place more than 100 
miles from his or her place of residence, unless the lawful mileage and 
witness fee for 1 day's attendance is paid in advance of the hearing 
date.
    (c) No person shall be permitted to testify as a witness at the 
hearing, or pursuant to deposition or interrogatory under Sec.725.458, 
unless that person meets the requirements of Sec.725.414(c).
    (1) In the case of a witness offering testimony relevant to the 
liability of the responsible operator, in the absence of extraordinary 
circumstances, the witness must have been identified as a potential 
hearing witness while the claim was pending before the district 
director.
    (2) In the case of a physician offering testimony relevant to the 
physical condition of the miner, such physician must have prepared a 
medical report. Alternatively, in the absence of a showing of good cause 
under Sec.725.456(b)(1) of this part, a physician may offer testimony 
relevant to the physical condition of the miner only to the extent that 
the party offering the physician's testimony has submitted fewer medical 
reports than permitted by Sec.725.414. Such physician's opinion shall 
be considered a medical report subject to the limitations of Sec.
725.414.
    (d) A physician whose testimony is permitted under this section may 
testify as to any other medical evidence of record, but shall not be 
permitted to testify as to any medical evidence relevant to the miner's 
condition that is not admissible.



Sec.725.458  Depositions; interrogatories.

    The testimony of any witness or party may be taken by deposition or 
interrogatory according to the rules of practice of the Federal district 
court for the judicial district in which the case is pending (or of the 
U.S. District Court for the District of Columbia if the case is pending 
in the District or outside the United States), except that at least 30 
days prior notice of any deposition shall be given to all parties unless 
such notice is waived. No post-hearing deposition or interrogatory shall 
be permitted unless authorized by the administrative law judge upon the 
motion of a party to the claim. The testimony of any physician which is 
taken by deposition shall be subject to the limitations on the scope of 
the testimony contained in Sec.725.457(d).



Sec.725.459  Witness fees.

    (a) A witness testifying at a hearing before an administrative law 
judge, or whose deposition is taken, shall receive the same fees and 
mileage as witnesses in courts of the United States. If the witness is 
an expert, he or she shall be entitled to an expert witness fee. Except 
as provided in paragraphs (b) and (c) of this section, such fees shall 
be paid by the proponent of the witness.
    (b) If the witness' proponent does not intend to call the witness to 
appear at a hearing or deposition, any other party may subpoena the 
witness for cross-examination. The administrative law judge (ALJ) shall 
authorize the least intrusive and expensive means of cross-examination 
as the ALJ deems appropriate and necessary to the full and true 
disclosure of the facts. If such witness is required to attend the 
hearing, give a deposition or respond to interrogatories for cross-
examination purposes, the proponent of the witness shall pay the 
witness' fee. The fund shall remain liable for any costs associated with 
the cross-examination of the physician who performed the complete 
pulmonary evaluation pursuant to Sec.725.406.
    (c) If a claimant is determined entitled to benefits, there may be 
assessed as costs against a responsible operator, if any, or the fund, 
fees and mileage for necessary witnesses attending the hearing at the 
request of the claimant. Both the necessity for the witness and the 
reasonableness of the fees of any expert witness shall be approved by 
the administrative law judge. The amounts awarded against a responsible 
operator or the fund as attorney's fees, or costs, fees and mileage for 
witnesses, shall

[[Page 322]]

not in any respect affect or diminish benefits payable under the Act.

[65 FR 80054, Dec. 20, 2000, as amended at 68 FR 69935, Dec. 15, 2003]



Sec.725.460  Consolidated hearings.

    When two or more hearings are to be held, and the same or 
substantially similar evidence is relevant and material to the matters 
at issue at each such hearing, the Chief Administrative Law Judge may, 
upon motion by any party or on his or her own motion, order that a 
consolidated hearing be conducted. Where consolidated hearings are held, 
a single record of the proceedings shall be made and the evidence 
introduced in one claim may be considered as introduced in the others, 
and a separate or joint decision shall be made, as appropriate.



Sec.725.461  Waiver of right to appear and present evidence.

    (a) If all parties waive their right to appear before the 
administrative law judge, it shall not be necessary for the 
administrative law judge to give notice of, or conduct, an oral hearing. 
A waiver of the right to appear shall be made in writing and filed with 
the Chief Administrative Law Judge or the administrative law judge 
assigned to hear the case. Such waiver may be withdrawn by a party for 
good cause shown at any time prior to the mailing of the decision in the 
claim. Even though all of the parties have filed a waiver of the right 
to appear, the administrative law judge may, nevertheless, after giving 
notice of the time and place, conduct a hearing if he or she believes 
that the personal appearance and testimony of the party or parties would 
assist in ascertaining the facts in issue in the claim. Where a waiver 
has been filed by all parties, and they do not appear before the 
administrative law judge personally or by representative, the 
administrative law judge shall make a record of the relevant documentary 
evidence submitted in accordance with this part and any further written 
stipulations of the parties. Such documents and stipulations shall be 
considered the evidence of record in the case and the decision shall be 
based upon such evidence.
    (b) Except as provided in Sec.725.456(a), the unexcused failure of 
any party to attend a hearing shall constitute a waiver of such party's 
right to present evidence at the hearing, and may result in a dismissal 
of the claim (see Sec.725.465).



Sec.725.462  Withdrawal of controversion of issues set for formal hearing; 

effect.

    A party may, on the record, withdraw his or her controversion of any 
or all issues set for hearing. If a party withdraws his or her 
controversion of all issues, the administrative law judge shall remand 
the case to the district director for the issuance of an appropriate 
order.



Sec.725.463  Issues to be resolved at hearing; new issues.

    (a) Except as otherwise provided in this section, the hearing shall 
be confined to those contested issues which have been identified by the 
district director (see Sec.725.421) or any other issue raised in 
writing before the district director.
    (b) An administrative law judge may consider a new issue only if 
such issue was not reasonably ascertainable by the parties at the time 
the claim was before the district director. Such new issue may be raised 
upon application of any party, or upon an administrative law judge's own 
motion, with notice to all parties, at any time after a claim has been 
transmitted by the district director to the Office of Administrative Law 
Judges and prior to decision by an administrative law judge. If a new 
issue is raised, the administrative law judge may, in his or her 
discretion, either remand the case to the district director with 
instructions for further proceedings, hear and resolve the new issue, or 
refuse to consider such new issue.
    (c) If a new issue is to be considered by the administrative law 
judge, a party may, upon request, be granted an appropriate continuance.



Sec.725.464  Record of hearing.

    All hearings shall be open to the public and shall be mechanically 
or stenographically reported. All evidence upon

[[Page 323]]

which the administrative law judge relies for decision shall be 
contained in the transcript of testimony, either directly or by 
appropriate reference. All medical reports, exhibits, and any other 
pertinent document or record, either in whole or in material part, 
introduced as evidence, shall be marked for identification and 
incorporated into the record.



Sec.725.465  Dismissals for cause.

    (a) The administrative law judge may, at the request of any party, 
or on his or her own motion, dismiss a claim:
    (1) Upon the failure of the claimant or his or her representative to 
attend a hearing without good cause;
    (2) Upon the failure of the claimant to comply with a lawful order 
of the administrative law judge; or
    (3) Where there has been a prior final adjudication of the claim or 
defense to the claim under the provisions of this subchapter and no new 
evidence is submitted (except as provided in part 727 of this 
subchapter; see Sec.725.4(d)).
    (b) A party who is not a proper party to the claim (see Sec.
725.360) shall be dismissed by the administrative law judge. The 
administrative law judge shall not dismiss the operator designated as 
the responsible operator by the district director, except upon the 
motion or written agreement of the Director.
    (c) In any case where a dismissal of a claim, defense, or party is 
sought, the administrative law judge shall issue an order to show cause 
why the dismissal should not be granted and afford all parties a 
reasonable time to respond to such order. After the time for response 
has expired, the administrative law judge shall take such action as is 
appropriate to rule on the dismissal, which may include an order 
dismissing the claim, defense or party.
    (d) No claim shall be dismissed in a case with respect to which 
payments prior to final adjudication have been made to the claimant in 
accordance with Sec.725.522, except upon the motion or written 
agreement of the Director.



Sec.725.466  Order of dismissal.

    (a) An order dismissing a claim shall be served on the parties in 
accordance with Sec.725.478. The dismissal of a claim shall have the 
same effect as a decision and order disposing of the claim on its 
merits, except as provided in paragraph (b) of this section. Such order 
shall advise the parties of their right to request review by the 
Benefits Review Board.
    (b) Where the Chief Administrative Law Judge or the presiding 
administrative law judge issues a decision and order dismissing the 
claim after a show cause proceeding, the district director shall 
terminate any payments being made to the claimant under Sec.725.522, 
and the order of dismissal shall, if appropriate, order the claimant to 
reimburse the fund for all benefits paid to the claimant.



Sec.725.475  Termination of hearings.

    Hearings are officially terminated when all the evidence has been 
received, witnesses heard, pleadings and briefs submitted to the 
administrative law judge, and the transcript of the proceedings has been 
printed and delivered to the administrative law judge.



Sec.725.476  Issuance of decision and order.

    Within 20 days after the official termination of the hearing (see 
Sec.725.475), the administrative law judge shall issue a decision and 
order with respect to the claim making an award to the claimant, 
rejecting the claim, or taking such other action as is appropriate.



Sec.725.477  Form and contents of decision and order.

    (a) Orders adjudicating claims for benefits shall be designated by 
the term ``decision and order'' or ``supplemental decision and order'' 
as appropriate, followed by a descriptive phrase designating the 
particular type of order, such as ``award of benefits,'' ``rejection of 
claim,'' ``suspension of benefits,'' ``modification of award.''
    (b) A decision and order shall contain a statement of the basis of 
the order, findings of fact, conclusions of law, and an award, rejection 
or other appropriate paragraph containing the action of the 
administrative law judge, his or her signature and the date of issuance. 
A decision and order shall be based

[[Page 324]]

upon the record made before the administrative law judge.

[65 FR 80054, Dec. 20, 2000, as amended at 72 FR 4205, Jan. 30, 2007]



Sec.725.478  Filing and service of decision and order.

    On the date of issuance of a decision and order under Sec.725.477, 
the administrative law judge shall serve the decision and order on all 
parties to the claim by certified mail. On the same date, the original 
record of the claim shall be sent to the DCMWC in Washington, D.C. Upon 
receipt by the DCMWC, the decision and order shall be considered to be 
filed in the office of the district director, and shall become effective 
on that date.



Sec.725.479  Finality of decisions and orders.

    (a) A decision and order shall become effective when filed in the 
office of the district director (see Sec.725.478), and unless 
proceedings for suspension or setting aside of such order are instituted 
within 30 days of such filing, the order shall become final at the 
expiration of the 30th day after such filing (see Sec.725.481).
    (b) Any party may, within 30 days after the filing of a decision and 
order under Sec.725.478, request a reconsideration of such decision 
and order by the administrative law judge. The procedures to be followed 
in the reconsideration of a decision and order shall be determined by 
the administrative law judge.
    (c) The time for appeal to the Benefits Review Board shall be 
suspended during the consideration of a request for reconsideration. 
After the administrative law judge has issued and filed a denial of the 
request for reconsideration, or a revised decision and order in 
accordance with this part, any dissatisfied party shall have 30 days 
within which to institute proceedings to set aside the decision and 
order on reconsideration.
    (d) Regardless of any defect in service, actual receipt of the 
decision is sufficient to commence the 30-day period for requesting 
reconsideration or appealing the decision.



Sec.725.480  Modification of decisions and orders.

    A party who is dissatisfied with a decision and order which has 
become final in accordance with Sec.725.479 may request a modification 
of the decision and order if the conditions set forth in Sec.725.310 
are met.



Sec.725.481  Right to appeal to the Benefits Review Board.

    Any party dissatisfied with a decision and order issued by an 
administrative law judge may, before the decision and order becomes 
final (see Sec.725.479), appeal the decision and order to the Benefits 
Review Board. A notice of appeal shall be filed with the Board. 
Proceedings before the Board shall be conducted in accordance with part 
802 of this title.



Sec.725.482  Judicial review.

    (a) Any person adversely affected or aggrieved by a final order of 
the Benefits Review Board may obtain a review of that order in the U.S. 
court of appeals for the circuit in which the injury occurred by filing 
in such court within 60 days following the issuance of such Board order 
a written petition praying that the order be modified or set aside. The 
payment of the amounts required by an award shall not be stayed pending 
final decision in any such proceeding unless ordered by the court. No 
stay shall be issued unless the court finds that irreparable injury 
would otherwise ensue to an operator or carrier.
    (b) The Director, Office of Workers' Compensation Program, as 
designee of the Secretary of Labor responsible for the administration 
and enforcement of the Act, shall be considered the proper party to 
appear and present argument on behalf of the Secretary of Labor in all 
review proceedings conducted pursuant to this part and the Act, either 
as petitioner or respondent.



Sec.725.483  Costs in proceedings brought without reasonable grounds.

    If a United States court having jurisdiction of proceedings 
regarding any claim or final decision and order, determines that the 
proceedings have been instituted or continued before such court without 
reasonable ground,

[[Page 325]]

the costs of such proceedings shall be assessed against the party who 
has so instituted or continued such proceedings.



                Subpart G_Responsible Coal Mine Operators



Sec.725.490  Statutory provisions and scope.

    (a) One of the major purposes of the black lung benefits amendments 
of 1977 was to provide a more effective means of transferring the 
responsibility for the payment of benefits from the Federal government 
to the coal industry with respect to claims filed under this part. In 
furtherance of this goal, a Black Lung Disability Trust Fund financed by 
the coal industry was established by the Black Lung Benefits Revenue Act 
of 1977. The primary purpose of the Fund is to pay benefits with respect 
to all claims in which the last coal mine employment of the miner on 
whose account the claim was filed occurred before January 1, 1970. With 
respect to most claims in which the miner's last coal mine employment 
occurred after January 1, 1970, individual coal mine operators will be 
liable for the payment of benefits. The 1981 amendments to the Act 
relieved individual coal mine operators from the liability for payment 
of certain special claims involving coal mine employment on or after 
January 1, 1970, where the claim was previously denied and subsequently 
approved under section 435 of the Act. See Sec.725.496 for a detailed 
description of these special claims. Where no such operator exists or 
the operator determined to be liable is in default in any case, the fund 
shall pay the benefits due and seek reimbursement as is appropriate. See 
also Sec.725.420 for the fund's role in the payment of interim 
benefits in certain contested cases. In addition, the Black Lung 
Benefits Reform Act of 1977 amended certain provisions affecting the 
scope of coverage under the Act and describing the effects of particular 
corporate transactions on the liability of operators.
    (b) The provisions of this subpart define the term ``operator'' and 
prescribe the manner in which the identity of an operator which may be 
liable for the payment of benefits--referred to herein as a 
``responsible operator''--will be determined.



Sec.725.491  Operator defined.

    (a) For purposes of this part, the term ``operator'' shall include:
    (1) Any owner, lessee, or other person who operates, controls, or 
supervises a coal mine, or any independent contractor performing 
services or construction at such mine; or
    (2) Any other person who:
    (i) Employs an individual in the transportation of coal or in coal 
mine construction in or around a coal mine, to the extent such 
individual was exposed to coal mine dust as a result of such employment 
(see Sec.725.202);
    (ii) In accordance with the provisions of Sec.725.492, may be 
considered a successor operator; or
    (iii) Paid wages or a salary, or provided other benefits, to an 
individual in exchange for work as a miner (see Sec.725.202).
    (b) The terms ``owner,'' ``lessee,'' and ``person'' shall include 
any individual, partnership, association, corporation, firm, subsidiary 
of a corporation, or other organization, as appropriate, except that an 
officer of a corporation shall not be considered an ``operator'' for 
purposes of this part. Following the issuance of an order awarding 
benefits against a corporation that has not secured its liability for 
benefits in accordance with section 423 of the Act and Sec.726.4, such 
order may be enforced against the president, secretary, or treasurer of 
the corporation in accordance with subpart I of this part.
    (c) The term ``independent contractor'' shall include any person who 
contracts to perform services. Such contractor's status as an operator 
shall not be contingent upon the amount or percentage of its work or 
business related to activities in or around a mine, nor upon the number 
or percentage of its employees engaged in such activities.
    (d) For the purposes of determining whether a person is or was an 
operator that may be found liable for the payment of benefits under this 
part, there shall be a rebuttable presumption that during the course of 
an individual's employment with such employer, such

[[Page 326]]

individual was regularly and continuously exposed to coal mine dust 
during the course of employment. The presumption may be rebutted by a 
showing that the employee was not exposed to coal mine dust for 
significant periods during such employment.
    (e) The operation, control, or supervision referred to in paragraph 
(a)(1) of this section may be exercised directly or indirectly. Thus, 
for example, where a coal mine is leased, and the lease empowers the 
lessor to make decisions with respect to the terms and conditions under 
which coal is to be extracted or prepared, such as, but not limited to, 
the manner of extraction or preparation or the amount of coal to be 
produced, the lessor may be considered an operator. Similarly, any 
parent entity or other controlling business entity may be considered an 
operator for purposes of this part, regardless of the nature of its 
business activities.
    (f) Neither the United States, nor any State, nor any 
instrumentality or agency of the United States or any State, shall be 
considered an operator.



Sec.725.492  Successor operator defined.

    (a) Any person who, on or after January 1, 1970, acquired a mine or 
mines, or substantially all of the assets thereof, from a prior 
operator, or acquired the coal mining business of such prior operator, 
or substantially all of the assets thereof, shall be considered a 
``successor operator'' with respect to any miners previously employed by 
such prior operator.
    (b) The following transactions shall also be deemed to create 
successor operator liability:
    (1) If an operator ceases to exist by reason of a reorganization 
which involves a change in identity, form, or place of business or 
organization, however effected;
    (2) If an operator ceases to exist by reason of a liquidation into a 
parent or successor corporation; or
    (3) If an operator ceases to exist by reason of a sale of 
substantially all its assets, or as a result of merger, consolidation, 
or division.
    (c) In any case in which a transaction specified in paragraph (b), 
or substantially similar to a transaction specified in paragraph (b), 
took place, the resulting entity shall be considered a ``successor 
operator'' with respect to any miners previously employed by such prior 
operator.
    (d) This section shall not be construed to relieve a prior operator 
of any liability if such prior operator meets the conditions set forth 
in Sec.725.494. If the prior operator does not meet the conditions set 
forth in Sec.725.494, the following provisions shall apply:
    (1) In any case in which a prior operator transferred a mine or 
mines, or substantially all of the assets thereof, to a successor 
operator, or sold its coal mining business or substantially all of the 
assets thereof, to a successor operator, and then ceased to exist within 
the terms of paragraph (b), the successor operator as identified in 
paragraph (a) shall be primarily liable for the payment of benefits to 
any miners previously employed by such prior operator.
    (2) In any case in which a prior operator transferred mines, or 
substantially all of the assets thereof, to more than one successor 
operator, the successor operator that most recently acquired a mine or 
mines or assets from the prior operator shall be primarily liable for 
the payment of benefits to any miners previously employed by such prior 
operator.
    (3) In any case in which a mine or mines, or substantially all the 
assets thereof, have been transferred more than once, the successor 
operator that most recently acquired such mine or mines or assets shall 
be primarily liable for the payment of benefits to any miners previously 
employed by the original prior operator. If the most recent successor 
operator does not meet the criteria for a potentially liable operator 
set forth in Sec.725.494, the next most recent successor operator 
shall be liable.
    (e) An ``acquisition,'' for purposes of this section, shall include 
any transaction by which title to the mine or mines, or substantially 
all of the assets thereof, or the right to extract or prepare coal at 
such mine or mines, becomes vested in a person other than the prior 
operator.

[[Page 327]]



Sec.725.493  Employment relationship defined.

    (a)(1) In determining the identity of a responsible operator under 
this part, the terms ``employ'' and ``employment'' shall be construed as 
broadly as possible, and shall include any relationship under which an 
operator retains the right to direct, control, or supervise the work 
performed by a miner, or any other relationship under which an operator 
derives a benefit from the work performed by a miner. Any individuals 
who participate with one or more persons in the mining of coal, such as 
owners, proprietors, partners, and joint venturers, whether they are 
compensated by wages, salaries, piece rates, shares, profits, or by any 
other means, shall be deemed employees. It is the specific intention of 
this paragraph to disregard any financial arrangement or business entity 
devised by the actual owners or operators of a coal mine or coal mine-
related enterprise to avoid the payment of benefits to miners who, based 
upon the economic reality of their relationship to this enterprise, are, 
in fact, employees of the enterprise.
    (2) The payment of wages or salary shall be prima facie evidence of 
the right to direct, control, or supervise an individual's work. The 
Department intends that where the operator who paid a miner's wages or 
salary meets the criteria for a potentially liable operator set forth in 
Sec.725.494, that operator shall be primarily liable for the payment 
of any benefits due the miner as a result of such employment. The 
absence of such payment, however, will not negate the existence of an 
employment relationship. Thus, the Department also intends that where 
the person who paid a miner's wages may not be considered a potentially 
liable operator, any other operator who retained the right to direct, 
control or supervise the work performed by the miner, or who benefitted 
from such work, may be considered a potentially liable operator.
    (b) This paragraph contains examples of relationships that shall be 
considered employment relationships for purposes of this part. The list 
is not intended to be exclusive.
    (1) In any case in which an operator may be considered a successor 
operator, as determined in accordance with Sec.725.492, any employment 
with a prior operator shall also be deemed to be employment with the 
successor operator. In a case in which the miner was not independently 
employed by the successor operator, the prior operator shall remain 
primarily liable for the payment of any benefits based on the miner's 
employment with the prior operator. In a case in which the miner was 
independently employed by the successor operator after the transaction 
giving rise to successor operator liability, the successor operator 
shall be primarily liable for the payment of any benefits.
    (2) In any case in which the operator which directed, controlled or 
supervised the miner is no longer in business and such operator was a 
subsidiary of a parent company, a member of a joint venture, a partner 
in a partnership, or was substantially owned or controlled by another 
business entity, such parent entity or other member of a joint venture 
or partner or controlling business entity may be considered the employer 
of any employees of such operator.
    (3) In any claim in which the operator which directed, controlled or 
supervised the miner is a lessee, the lessee shall be considered 
primarily liable for the claim. The liability of the lessor may be 
established only after it has been determined that the lessee is unable 
to provide for the payment of benefits to a successful claimant. In any 
case involving the liability of a lessor for a claim arising out of 
employment with a lessee, any determination of lessor liability shall be 
made on the basis of the facts present in the case in accordance with 
the following considerations:
    (i) Where a coal mine is leased, and the lease empowers the lessor 
to make decisions with respect to the terms and conditions under which 
coal is to be extracted or prepared, such as, but not limited to, the 
manner of extraction or preparation or the amount of coal to be 
produced, the lessor shall be considered the employer of any employees 
of the lessee.
    (ii) Where a coal mine is leased to a self-employed operator, the 
lessor shall

[[Page 328]]

be considered the employer of such self-employed operator and its 
employees if the lease or agreement is executed or renewed after August 
18, 1978 and such lease or agreement does not require the lessee to 
guarantee the payment of benefits which may be required under this part 
and part 726 of this subchapter.
    (iii) Where a lessor previously operated a coal mine, it may be 
considered an operator with respect to employees of any lessee of such 
mine, particularly where the leasing arrangement was executed or renewed 
after August 18, 1978 and does not require the lessee to secure benefits 
provided by the Act.
    (4) A self-employed operator, depending upon the facts of the case, 
may be considered an employee of any other operator, person, or business 
entity which substantially controls, supervises, or is financially 
responsible for the activities of the self-employed operator.



Sec.725.494  Potentially liable operators.

    An operator may be considered a ``potentially liable operator'' with 
respect to a claim for benefits under this part if each of the following 
conditions is met:
    (a) The miner's disability or death arose at least in part out of 
employment in or around a mine or other facility during a period when 
the mine or facility was operated by such operator, or by a person with 
respect to which the operator may be considered a successor operator. 
For purposes of this section, there shall be a rebuttable presumption 
that the miner's disability or death arose in whole or in part out of 
his or her employment with such operator. Unless this presumption is 
rebutted, the responsible operator shall be liable to pay benefits to 
the claimant on account of the disability or death of the miner in 
accordance with this part. A miner's pneumoconiosis, or disability or 
death therefrom, shall be considered to have arisen in whole or in part 
out of work in or around a mine if such work caused, contributed to or 
aggravated the progression or advancement of a miner's loss of ability 
to perform his or her regular coal mine employment or comparable 
employment.
    (b) The operator, or any person with respect to which the operator 
may be considered a successor operator, was an operator for any period 
after June 30, 1973.
    (c) The miner was employed by the operator, or any person with 
respect to which the operator may be considered a successor operator, 
for a cumulative period of not less than one year (Sec.
725.101(a)(32)).
    (d) The miner's employment with the operator, or any person with 
respect to which the operator may be considered a successor operator, 
included at least one working day (Sec.725.101(a)(32)) after December 
31, 1969.
    (e) The operator is capable of assuming its liability for the 
payment of continuing benefits under this part. An operator will be 
deemed capable of assuming its liability for a claim if one of the 
following three conditions is met:
    (1) The operator obtained a policy or contract of insurance under 
section 423 of the Act and part 726 of this subchapter that covers the 
claim, except that such policy shall not be considered sufficient to 
establish the operator's capability of assuming liability if the 
insurance company has been declared insolvent and its obligations for 
the claim are not otherwise guaranteed;
    (2) The operator qualified as a self-insurer under section 423 of 
the Act and part 726 of this subchapter during the period in which the 
miner was last employed by the operator, provided that the operator 
still qualifies as a self-insurer or the security given by the operator 
pursuant to Sec.726.104(b) is sufficient to secure the payment of 
benefits in the event the claim is awarded; or
    (3) The operator possesses sufficient assets to secure the payment 
of benefits in the event the claim is awarded in accordance with Sec.
725.606.



Sec.725.495  Criteria for determining a responsible operator.

    (a)(1) The operator responsible for the payment of benefits in a 
claim adjudicated under this part (the ``responsible operator'') shall 
be the potentially liable operator, as determined in accordance with 
Sec.725.494, that most recently employed the miner.

[[Page 329]]

    (2) If more than one potentially liable operator may be deemed to 
have employed the miner most recently, then the liability for any 
benefits payable as a result of such employment shall be assigned as 
follows:
    (i) First, to the potentially liable operator that directed, 
controlled, or supervised the miner;
    (ii) Second, to any potentially liable operator that may be 
considered a successor operator with respect to miners employed by the 
operator identified in paragraph (a)(2)(i) of this section; and
    (iii) Third, to any other potentially liable operator which may be 
deemed to have been the miner's most recent employer pursuant to Sec.
725.493.
    (3) If the operator that most recently employed the miner may not be 
considered a potentially liable operator, as determined in accordance 
with Sec.725.494, the responsible operator shall be the potentially 
liable operator that next most recently employed the miner. Any 
potentially liable operator that employed the miner for at least one day 
after December 31, 1969 may be deemed the responsible operator if no 
more recent employer may be considered a potentially liable operator.
    (4) If the miner's most recent employment by an operator ended while 
the operator was authorized to self-insure its liability under part 726 
of this title, and that operator no longer possesses sufficient assets 
to secure the payment of benefits, the provisions of paragraph (a)(3) 
shall be inapplicable with respect to any operator that employed the 
miner only before he was employed by such self-insured operator. If no 
operator that employed the miner after his employment with the self-
insured operator meets the conditions of Sec.725.494, the claim of the 
miner or his survivor shall be the responsibility of the Black Lung 
Disability Trust Fund.
    (b) Except as provided in this section and Sec.725.408(a)(3), with 
respect to the adjudication of the identity of a responsible operator, 
the Director shall bear the burden of proving that the responsible 
operator initially found liable for the payment of benefits pursuant to 
Sec.725.410 (the ``designated responsible operator'') is a potentially 
liable operator. It shall be presumed, in the absence of evidence to the 
contrary, that the designated responsible operator is capable of 
assuming liability for the payment of benefits in accordance with Sec.
725.494(e).
    (c) The designated responsible operator shall bear the burden of 
proving either:
    (1) That it does not possess sufficient assets to secure the payment 
of benefits in accordance with Sec.725.606; or
    (2) That it is not the potentially liable operator that most 
recently employed the miner. Such proof must include evidence that the 
miner was employed as a miner after he or she stopped working for the 
designated responsible operator and that the person by whom he or she 
was employed is a potentially liable operator within the meaning of 
Sec.725.494. In order to establish that a more recent employer is a 
potentially liable operator, the designated responsible operator must 
demonstrate that the more recent employer possesses sufficient assets to 
secure the payment of benefits in accordance with Sec.725.606. The 
designated responsible operator may satisfy its burden by presenting 
evidence that the owner, if the more recent employer is a sole 
proprietorship; the partners, if the more recent employer is a 
partnership; or the president, secretary, and treasurer, if the more 
recent employer is a corporation that failed to secure the payment of 
benefits pursuant to part 726 of this subchapter, possess assets 
sufficient to secure the payment of benefits, provided such assets may 
be reached in a proceeding brought under subpart I of this part.
    (d) In any case referred to the Office of Administrative Law Judges 
pursuant to Sec.725.421 in which the operator finally designated as 
responsible pursuant to Sec.725.418(d) is not the operator that most 
recently employed the miner, the record shall contain a statement from 
the district director explaining the reasons for such designation. If 
the reasons include the most recent employer's failure to meet the 
conditions of Sec.725.494(e), the record shall also contain a 
statement that the Office has searched the files it maintains pursuant 
to part 726, and that the

[[Page 330]]

Office has no record of insurance coverage for that employer, or of 
authorization to self-insure, that meets the conditions of Sec.
725.494(e)(1) or (e)(2). Such a statement shall be prima facie evidence 
that the most recent employer is not financially capable of assuming its 
liability for a claim. In the absence of such a statement, it shall be 
presumed that the most recent employer is financially capable of 
assuming its liability for a claim.



Sec.725.496  Special claims transferred to the fund.

    (a) The 1981 amendments to the Act amended section 422 of the Act 
and transferred liability for payment of certain special claims from 
operators and carriers to the fund. These provisions apply to claims 
which were denied before March 1, 1978, and which have been or will be 
approved in accordance with section 435 of the Act.
    (b) Section 402(i) of the Act defines three classes of denied claims 
subject to the transfer provisions:
    (1) Claims filed with and denied by the Social Security 
Administration before March 1, 1978;
    (2) Claims filed with the Department of Labor in which the claimant 
was notified by the Department of an administrative or informal denial 
before March 1, 1977, and in which the claimant did not within one year 
of such notification either:
    (i) Request a hearing; or
    (ii) Present additional evidence; or
    (iii) Indicate an intention to present additional evidence; or
    (iv) Request a modification or reconsideration of the denial on the 
ground of a change in conditions or because of a mistake in a 
determination of fact;
    (3) Claims filed with the Department of Labor and denied under the 
law in effect prior to the enactment of the Black Lung Benefits Reform 
Act of 1977, that is, before March 1, 1978, following a formal hearing 
before an administrative law judge or administrative review before the 
Benefits Review Board or review before a United States Court of Appeals.
    (c) Where more than one claim was filed with the Social Security 
Administration and/or the Department of Labor prior to March 1, 1978, by 
or on behalf of a miner or a surviving dependent of a miner, unless such 
claims were required to be merged by the agency's regulations, the 
procedural history of each such claim must be considered separately to 
determine whether the claim is subject to the transfer of liability 
provisions.
    (d) For a claim filed with and denied by the Social Security 
Administration prior to March 1, 1978, to come within the transfer 
provisions, such claim must have been or must be approved under the 
provisions of section 435 of the Act. No claim filed with and denied by 
the Social Security Administration is subject to the transfer of 
liability provisions unless a request was made by or on behalf of the 
claimant for review of such denied claim under section 435. Such review 
must have been requested by the filing of a valid election card or other 
equivalent document with the Social Security Administration in 
accordance with section 435(a) and its implementing regulations at 20 
CFR 410.700 through 410.707.
    (e) Where a claim filed with the Department of Labor prior to March 
1, 1977, was subjected to repeated administrative or informal denials, 
the last such denial issued during the pendency of the claim determines 
whether the claim is subject to the transfer of liability provisions.
    (f) Where a miner's claim comes within the transfer of liability 
provisions of the 1981 amendments the fund is also liable for the 
payment of any benefits to which the miner's dependent survivors are 
entitled after the miner's death. However, if the survivor's entitlement 
was established on a separate claim not subject to the transfer of 
liability provisions prior to approval of the miner's claim under 
section 435, the party responsible for the payment of such survivors' 
benefits shall not be relieved of that responsibility because the 
miner's claim was ultimately approved and found subject to the transfer 
of liability provisions.



Sec.725.497  Procedures in special claims transferred to the fund.

    (a) General. It is the purpose of this section to define procedures 
to expedite the handling and disposition of claims affected by the 
benefit liability

[[Page 331]]

transfer provisions of Section 205 of the Black Lung Benefits Amendments 
of 1981.
    (b) Action by the Department. The OWCP shall, in accordance with the 
criteria contained in Sec.725.496, review each claim which is or may 
be affected by the provisions of Section 205 of the Black Lung Benefits 
Amendments of 1981. Any party to a claim, adjudication officer, or 
adjudicative body may request that such a review be conducted and that 
the record be supplemented with any additional documentation necessary 
for an informed consideration of the transferability of the claim. Where 
the issue of the transferability of the claim can not be resolved by 
agreement of the parties and the evidence of record is not sufficient 
for a resolution of the issue, the hearing record may be reopened or the 
case remanded for the development of the additional evidence concerning 
the procedural history of the claim necessary to such resolution. Such 
determinations shall be made on an expedited basis.
    (c) Dismissal of operators. If it is determined that a coal mine 
operator or insurance carrier which previously participated in the 
consideration or adjudication of any claim, may no longer be found 
liable for the payment of benefits to the claimant by reason of section 
205 of the Black Lung Benefits Amendments of 1981, such operator or 
carrier shall be promptly dismissed as a party to the claim. The 
dismissal of an operator or carrier shall be concluded at the earliest 
possible time and in no event shall an operator or carrier participate 
as a necessary party in any claim for which only the fund may be liable.
    (d) Procedure following dismissal of an operator. After it has been 
determined that an operator or carrier must be dismissed as a party in 
any claim in accordance with this section, the Director shall take such 
action as is authorized by the Act to bring about the proper and 
expeditious resolution of the claim in light of all relevant medical and 
other evidence. Action to be taken in this regard by the Director may 
include, but is not limited to, the assignment of the claim to the Black 
Lung Disability Trust Fund for the payment of benefits, the 
reimbursement of benefits previously paid by an operator or carrier if 
appropriate, the defense of the claim on behalf of the fund, or 
proceedings authorized by Sec.725.310.
    (e) Any claimant whose claim has been subsequently denied in a 
modification proceeding will be entitled to expedited review of the 
modification decision. Where a formal hearing was previously held, the 
claimant may waive his right to a further hearing and ask that a 
decision be made on the record of the prior hearing, as supplemented by 
any additional documentary evidence which the parties wish to introduce 
and briefs of the parties, if desired. In any case in which the claimant 
waives his right to a second hearing, a decision and order must be 
issued within 30 days of the date upon which the parties agree the 
record has been completed.



                      Subpart H_Payment of Benefits

                           General Provisions



Sec.725.501  Payment provisions generally.

    The provisions of this subpart govern the payment of benefits to 
claimants whose claims are approved for payment under section 415 and 
part C of title IV of the Act or approved after review under section 435 
of the Act and part 727 of this subchapter (see Sec.725.4(d)).



Sec.725.502  When benefit payments are due; manner of payment.

    (a)(1) Except with respect to benefits paid by the fund pursuant to 
an initial determination issued in accordance with Sec.725.418 (see 
Sec.725.522), benefits under the Act shall be paid when they become 
due. Benefits shall be considered due after the issuance of an effective 
order requiring the payment of benefits by a district director, 
administrative law judge, Benefits Review Board, or court, 
notwithstanding the pendency of a motion for reconsideration before an 
administrative law judge or an appeal to the Board or court, except that 
benefits shall not be considered due where the payment of such benefits 
has been stayed by the Benefits Review Board or appropriate

[[Page 332]]

court. An effective order shall remain in effect unless it is vacated by 
an administrative law judge on reconsideration, or, upon review under 
section 21 of the LHWCA, by the Benefits Review Board or an appropriate 
court, or is superseded by an effective order issued pursuant to Sec.
725.310.
    (2) A proposed order issued by a district director pursuant to Sec.
725.418 becomes effective at the expiration of the thirtieth day 
thereafter if no party timely requests revision of the proposed decision 
and order or a hearing (see Sec.725.419). An order issued by an 
administrative law judge becomes effective when it is filed in the 
office of the district director (see Sec.725.479). An order issued by 
the Benefits Review Board shall become effective when it is issued. An 
order issued by a court shall become effective in accordance with the 
rules of the court.
    (b)(1) While an effective order requiring the payment of benefits 
remains in effect, monthly benefits, at the rates set forth in Sec.
725.520, shall be due on the fifteenth day of the month following the 
month for which the benefits are payable. For example, benefits payable 
for the month of January shall be due on the fifteenth day of February.
    (2) Within 30 days after the issuance of an effective order 
requiring the payment of benefits, the district director shall compute 
the amount of benefits payable for periods prior to the effective date 
of the order, in addition to any interest payable for such periods (see 
Sec.725.608), and shall so notify the parties. Any computation made by 
the district director under this paragraph shall strictly observe the 
terms of the order. Benefits and interest payable for such periods shall 
be due on the thirtieth day following issuance of the district 
director's computation. A copy of the current table of applicable 
interest rates shall be attached to the computation.
    (c) Benefits are payable for monthly periods and shall be paid 
directly to an eligible claimant or his or her representative payee (see 
Sec.725.510) beginning with the month during which eligibility begins. 
Benefit payments shall terminate with the month before the month during 
which eligibility terminates. If a claimant dies in the first month 
during which all requirements for eligibility are met, benefits shall be 
paid for that month.



Sec.725.503  Date from which benefits are payable.

    (a) In accordance with the provisions of section 6(a) of the 
Longshore Act as incorporated by section 422(a) of the Act, and except 
as provided in Sec.725.504, the provisions of this section shall be 
applicable in determining the date from which benefits are payable to an 
eligible claimant for any claim filed after March 31, 1980. Except as 
provided in paragraph (d) of this section, the date from which benefits 
are payable for any claim approved under part 727 shall be determined in 
accordance with Sec.727.302 (see Sec.725.4(d)).
    (b) Miner's claim. Benefits are payable to a miner who is entitled 
beginning with the month of onset of total disability due to 
pneumoconiosis arising out of coal mine employment. Where the evidence 
does not establish the month of onset, benefits shall be payable to such 
miner beginning with the month during which the claim was filed. In the 
case of a miner who filed a claim before January 1, 1982, benefits shall 
be payable to the miner's eligible survivor (if any) beginning with the 
month in which the miner died.
    (c) Survivor's claim. Benefits are payable to a survivor who is 
entitled beginning with the month of the miner's death, or January 1, 
1974, whichever is later.
    (d) If a claim is awarded pursuant to section 22 of the Longshore 
Act and Sec.725.310, then the date from which benefits are payable 
shall be determined as follows:
    (1) Mistake in fact. The provisions of paragraphs (b) or (c) of this 
section, as applicable, shall govern the determination of the date from 
which benefits are payable.
    (2) Change in conditions. Benefits are payable to a miner beginning 
with the month of onset of total disability due to pneumoconiosis 
arising out of coal mine employment, provided that no benefits shall be 
payable for any month prior to the effective date of the most recent 
denial of the claim by a district director or administrative law judge. 
Where the evidence does not establish

[[Page 333]]

the month of onset, benefits shall be payable to such miner from the 
month in which the claimant requested modification.
    (e) In the case of a claim filed between July 1, 1973, and December 
31, 1973, benefits shall be payable as provided by this section, except 
to the extent prohibited by Sec.727.303 (see Sec.725.4(d)).
    (f) No benefits shall be payable with respect to a claim filed after 
December 31, 1973 (a part C claim), for any period of eligibility 
occurring before January 1, 1974.
    (g) Each decision and order awarding benefits shall indicate the 
month from which benefits are payable to the eligible claimant.



Sec.725.504  Payments to a claimant employed as a miner.

    (a) In the case of a claimant who is employed as a miner (see Sec.
725.202) at the time of a final determination of such miner's 
eligibility for benefits, no benefits shall be payable unless:
    (1) The miner's eligibility is established under section 411(c)(3) 
of the Act; or
    (2) the miner terminates his or her coal mine employment within 1 
year from the date of the final determination of the claim.
    (b) If the eligibility of a working miner is established under 
section 411(c)(3) of the Act, benefits shall be payable as is otherwise 
provided in this part. If eligibility cannot be established under 
section 411(c)(3), and the miner continues to be employed as a miner in 
any capacity for a period of less than 1 year after a final 
determination of the claim, benefits shall be payable beginning with the 
month during which the miner ends his or her coal mine employment. If 
the miner's employment continues for more than 1 year after a final 
determination of eligibility, such determination shall be considered a 
denial of benefits on the basis of the miner's continued employment, and 
the miner may seek benefits only as provided in Sec.725.310, if 
applicable, or by filing a new claim under this part. The provisions of 
Subparts E and F of this part shall be applicable to claims considered 
under this section as is appropriate.
    (c) In any case where the miner returns to coal mine or comparable 
and gainful work, the payments to such miner shall be suspended and no 
benefits shall be payable (except as provided in section 411(c)(3) of 
the Act) for the period during which the miner continues to work. If the 
miner again terminates employment, the district director may require the 
miner to submit to further medical examination before authorizing the 
payment of benefits.



Sec.725.505  Payees.

    Benefits may be paid, as appropriate, to a beneficiary, to a 
qualified dependent, or to a representative authorized under this 
subpart to receive payments on behalf of such beneficiary or dependent.



Sec.725.506  Payment on behalf of another; ``legal guardian'' defined.

    Benefits are paid only to the beneficiary, his or her representative 
payee (see Sec.725.510) or his or her legal guardian. As used in this 
section, ``legal guardian'' means an individual who has been appointed 
by a court of competent jurisdiction or otherwise appointed pursuant to 
law to assume control of and responsibility for the care of the 
beneficiary, the management of his or her estate, or both.



Sec.725.507  Guardian for minor or incompetent.

    An adjudication officer may require that a legal guardian or 
representative be appointed to receive benefit payments payable to any 
person who is mentally incompetent or a minor and to exercise the powers 
granted to, or to perform the duties otherwise required of such person 
under the Act.



Sec.725.510  Representative payee.

    (a) If the district director determines that the best interests of a 
beneficiary are served thereby, the district director may certify the 
payment of such beneficiary's benefits to a representative payee.
    (b) Before any amount shall be certified for payment to any 
representative payee for or on behalf of a beneficiary, such 
representative payee shall submit to the district director such evidence 
as may be required of his or

[[Page 334]]

her relationship to, or his or her responsibility for the care of, the 
beneficiary on whose behalf payment is to be made, or of his or her 
authority to receive such a payment. The district director may, at any 
time thereafter, require evidence of the continued existence of such 
relationship, responsibility, or authority. If a person requesting 
representative payee status fails to submit the required evidence within 
a reasonable period of time after it is requested, no further payments 
shall be certified to him or her on behalf of the beneficiary unless the 
required evidence is thereafter submitted.
    (c) All benefit payments made to a representative payee shall be 
available only for the use and benefit of the beneficiary, as defined in 
Sec.725.511.



Sec.725.511  Use and benefit defined.

    (a) Payments certified to a representative payee shall be considered 
as having been applied for the use and benefit of the beneficiary when 
they are used for the beneficiary's current maintenance--i.e., to 
replace current income lost because of the disability of the 
beneficiary. Where a beneficiary is receiving care in an institution, 
current maintenance shall include the customary charges made by the 
institution and charges made for the current and foreseeable needs of 
the beneficiary which are not met by the institution.
    (b) Payments certified to a representative payee which are not 
needed for the current maintenance of the beneficiary, except as they 
may be used under Sec.725.512, shall be conserved or invested on the 
beneficiary's behalf. Preferred investments are U.S. savings bonds which 
shall be purchased in accordance with applicable regulations of the U.S. 
Treasury Department (31 CFR part 315). Surplus funds may also be 
invested in accordance with the rules applicable to investment of trust 
estates by trustees. For example, surplus funds may be deposited in an 
interest or dividend bearing account in a bank or trust company or in a 
savings and loan association if the account is either federally insured 
or is otherwise insured in accordance with State law requirements. 
Surplus funds deposited in an interest or dividend bearing account in a 
bank or trust company or in a savings and loan association must be in a 
form of account which clearly shows that the representative payee has 
only a fiduciary, and not a personal, interest in the funds. The 
preferred forms of such accounts are as follows:

Name of beneficiary_____________________________________________________

by (Name of representative payee) representative payee,
or (Name of beneficiary)
by (Name of representative payee) trustee,

    U.S. savings bonds purchased with surplus funds by a representative 
payee for an incapacitated adult beneficiary should be registered as 
follows: (Name of beneficiary) (Social Security No.), for whom (Name of 
payee) is representative payee for black lung benefits.



Sec.725.512  Support of legally dependent spouse, child, or parent.

    If current maintenance needs of a beneficiary are being reasonably 
met, a relative or other person to whom payments are certified as 
representative payee on behalf of the beneficiary may use part of the 
payments so certified for the support of the legally dependent spouse, a 
legally dependent child, or a legally dependent parent of the 
beneficiary.



Sec.725.513  Accountability; transfer.

    (a) The district director may require a representative payee to 
submit periodic reports including a full accounting of the use of all 
benefit payments certified to a representative payee. If a requested 
report or accounting is not submitted within the time allowed, the 
district director shall terminate the certification of the 
representative payee and thereafter payments shall be made directly to 
the beneficiary. A certification which is terminated under this section 
may be reinstated for good cause, provided that all required reports are 
supplied to the district director.
    (b) A representative payee who has conserved or invested funds from 
payments under this part shall, upon the direction of the district 
director, transfer any such funds (including interest) to a successor 
payee appointed by the district director or, at the option of the 
district director, shall transfer such

[[Page 335]]

funds to the Office for recertification to a successor payee or the 
beneficiary.



Sec.725.514  Certification to dependent of augmentation portion of benefit.

    (a) If the basic benefit of a miner or of a surviving spouse is 
augmented because of one or more dependents, and it appears to the 
district director that the best interests of such dependent would be 
served thereby, or that the augmented benefit is not being used for the 
use and benefit (as defined in this subpart) of the augmentee, the 
district director may certify payment of the amount of such augmentation 
(to the extent attributable to such dependent) to such dependent 
directly, or to a legal guardian or a representative payee for the use 
and benefit of such dependent.
    (b) Any request to the district director to certify separate payment 
of the amount of an augmentation in accordance with paragraph (a) of 
this section shall be in writing on such form and in accordance with 
such instructions as are prescribed by the Office.
    (c) The district director shall specify the terms and conditions of 
any certification authorized under this section and may terminate any 
such certification where appropriate.
    (d) Any payment made under this section, if otherwise valid under 
the Act, is a complete settlement and satisfaction of all claims, 
rights, and interests in and to such payment, except that such payment 
shall not be construed to abridge the rights of any party to recoup any 
overpayment made.



Sec.725.515  Assignment and exemption from claims of creditors.

    (a) Except as provided by the Act and this part, no assignment, 
release, or commutation of benefits due or payable under this part by a 
responsible operator shall be valid, and all benefits shall be exempt 
from claims of creditors and from levy, execution, and attachment or 
other remedy or recovery or collection of a debt, which exemption may 
not be waived.
    (b) Notwithstanding any other provision of law, benefits due from, 
or payable by, the Black Lung Disability Trust Fund under the Act and 
this part to a claimant shall be subject to legal process brought for 
the enforcement against the claimant of his or her legal obligations to 
provide child support or make alimony payments to the same extent as if 
the fund was a private person.

                              Benefit Rates



Sec.725.520  Computation of benefits.

    (a) Basic rate. The amount of benefits payable to a beneficiary for 
a month is determined, in the first instance, by computing the ``basic 
rate.'' The basic rate is equal to 37\1/2\ percent of the monthly pay 
rate for Federal employees in GS-2, step 1. That rate for a month is 
determined by:
    (1) Ascertaining the lowest annual rate of pay (step 1) for Grade 
GS-2 of the General Schedule applicable to such month (see 5 U.S.C. 
5332);
    (2) Ascertaining the monthly rate thereof by dividing the amount 
determined in paragraph (a)(1) of this section by 12; and
    (3) Ascertaining the basic rate under the Act by multiplying the 
amount determined in paragraph (a)(2) of this section by 0.375 (that is, 
by 37\1/2\ percent).
    (b) Basic benefit. When a miner or surviving spouse is entitled to 
benefits for a month for which he or she has no dependents who qualify 
under this part and when a surviving child of a miner or spouse, or a 
parent, brother, or sister of a miner, is entitled to benefits for a 
month for which he or she is the only beneficiary entitled to benefits, 
the amount of benefits to which such beneficiary is entitled is equal to 
the basic rate as computed in accordance with this section (raised, if 
not a multiple of 10 cents, to the next high multiple of 10 cents). This 
amount is referred to as the ``basic benefit.''
    (c) Augmented benefit. (1) When a miner or surviving spouse is 
entitled to benefits for a month for which he or she has one or more 
dependents who qualify under this part, the amount of benefits to which 
such miner or surviving spouse is entitled is increased. This increase 
is referred to as an ``augmentation.''
    (2) The benefits of a miner or surviving spouse are augmented to 
take

[[Page 336]]

account of a particular dependent beginning with the first month in 
which such dependent satisfies the conditions set forth in this part, 
and continues to be augmented through the month before the month in 
which such dependent ceases to satisfy the conditions set forth in this 
part, except in the case of a child who qualifies as a dependent because 
he or she is a student. In the latter case, such benefits continue to be 
augmented through the month before the first month during no part of 
which he or she qualifies as a student.
    (3) The basic rate is augmented by 50 percent for one such 
dependent, 75 percent for two such dependents, and 100 percent for three 
or more such dependents.
    (d) Survivor benefits. As used in this section, ``survivor'' means a 
surviving child of a miner or surviving spouse, or a surviving parent, 
brother, or sister of a miner, who establishes entitlement to benefits 
under this part.
    (e) Computation and rounding. (1) Any computation prescribed by this 
section is made to the third decimal place.
    (2) Monthly benefits are payable in multiples of 10 cents. 
Therefore, a monthly payment of amounts derived under paragraph (c)(3) 
of this section which is not a multiple of 10 cents is increased to the 
next higher multiple of 10 cents.
    (3) Since a fraction of a cent is not a multiple of 10 cents, such 
an amount which contains a fraction in the third decimal place is raised 
to the next higher multiple of 10 cents.
    (f) Eligibility based on the coal mine employment of more than one 
miner. Where an individual, for any month, is entitled (and/or qualifies 
as a dependent for purposes of augmentation of benefits) based on the 
disability or death due to pneumoconiosis arising out of the coal mine 
employment of more than one miner, the benefit payable to or on behalf 
of such individual shall be at a rate equal to the highest rate of 
benefits for which entitlement is established by reason of eligibility 
as a beneficiary, or by reason of his or her qualification as a 
dependent for augmentation of benefit purposes.



Sec.725.521  Commutation of payments; lump sum awards.

    (a) Whenever the district director determines that it is in the 
interest of justice, the liability for benefits or any part thereof as 
determined by a final adjudication, may, with the approval of the 
Director, be discharged by the payment of a lump sum equal to the 
present value of future benefit payments commuted, computed at 4 percent 
true discount compounded annually.
    (b) Applications for commutation of future payments of benefits 
shall be made to the district director in the manner prescribed by the 
district director. If the district director determines that an award of 
a lump sum payment of such benefits would be in the interest of justice, 
he or she shall refer such application, together with the reasons in 
support of such determination, to the Director for consideration.
    (c) The Director shall, in his or her discretion, grant or deny the 
application for commutation of payments. Such decision may be appealed 
to the Benefits Review Board.
    (d) The computation of all commutations of such benefits shall be 
made by the OWCP. For this purpose the file shall contain the date of 
birth of the person on whose behalf commutation is sought, as well as 
the date upon which such commutation shall be effective.
    (e) For purposes of determining the amount of any lump sum award, 
the probability of the death of the disabled miner and/or other persons 
entitled to benefits before the expiration of the period during which he 
or she is entitled to benefits, shall be determined in accordance with 
the most current United States Life Tables, as developed by the 
Department of Health, Education, and Welfare, and the probability of the 
remarriage of a surviving spouse shall be determined in accordance with 
the remarriage tables of the Dutch Royal Insurance Institution. The 
probability of the happening of any other contingency affecting the 
amount or duration of the compensation shall be disregarded.
    (f) In the event that an operator or carrier is adjudicated liable 
for the

[[Page 337]]

payment of benefits, such operator or carrier shall be notified of and 
given an opportunity to participate in the proceedings to determine 
whether a lump sum award shall be made. Such operator or carrier shall, 
in the event a lump sum award is made, tender full and prompt payment of 
such award to the claimant as though such award were a final payment of 
monthly benefits. Except as provided in paragraph (g) of this section, 
such lump sum award shall forever discharge such operator or carrier 
from its responsibility to make monthly benefit payments under the Act 
to the person who has requested such lump-sum award. In the event that 
an operator or carrier is adjudicated liable for the payment of 
benefits, such operator or carrier shall not be liable for any portion 
of a commuted or lump sum award predicated upon benefits due any 
claimant prior to January 1, 1974.
    (g) In the event a lump-sum award is approved under this section, 
such award shall not operate to discharge an operator carrier, or the 
fund from any responsibility imposed by the Act for the payment of 
medical benefits to an eligible miner.



Sec.725.522  Payments prior to final adjudication.

    (a) If an operator or carrier fails or refuses to commence the 
payment of benefits within 30 days of issuance of an initial 
determination of eligibility by the district director (see Sec.
725.420), or fails or refuses to commence the payment of any benefits 
due pursuant to an effective order by a district director, 
administrative law judge, Benefits Review Board, or court, the fund 
shall commence the payment of such benefits and shall continue such 
payments as appropriate. In the event that the fund undertakes the 
payment of benefits on behalf of an operator or carrier, the provisions 
of Sec. Sec.725.601 through 725.609 shall be applicable to such 
operator or carrier.
    (b) If benefit payments are commenced prior to the final 
adjudication of the claim and it is later determined by an 
administrative law judge, the Board, or court that the claimant was 
ineligible to receive such payments, such payments shall be considered 
overpayments pursuant to Sec.725.540 and may be recovered in 
accordance with the provisions of this subpart.

                Special Provisions for Operator Payments



Sec.725.530  Operator payments; generally.

    (a) Benefits payable by an operator or carrier pursuant to an 
effective order issued by a district director, administrative law judge, 
Benefits Review Board, or court, or by an operator that has agreed that 
it is liable for the payment of benefits to a claimant, shall be paid by 
the operator or carrier immediately when they become due (see Sec.
725.502(b)). An operator that fails to pay any benefits that are due, 
with interest, shall be considered in default with respect to those 
benefits, and the provisions of Sec.725.605 of this part shall be 
applicable. In addition, a claimant who does not receive any benefits 
within 10 days of the date they become due is entitled to additional 
compensation equal to twenty percent of those benefits (see Sec.
725.607). Arrangements for the payment of medical costs shall be made by 
such operator or carrier in accordance with the provisions of subpart J 
of this part.
    (b) Benefit payments made by an operator or carrier shall be made 
directly to the person entitled thereto or a representative payee if 
authorized by the district director. The payment of a claimant's 
attorney's fee, if any is awarded, shall be made directly to such 
attorney. Reimbursement of the fund, including interest, shall be paid 
directly to the Secretary on behalf of the fund.



Sec.725.531  Receipt for payment.

    Any individual receiving benefits under the Act in his or her own 
right, or as a representative payee, or as the duly appointed agent for 
the estate of a deceased beneficiary, shall execute receipts for 
benefits paid by any operator which shall be produced by such operator 
for inspection whenever the district director requires. A canceled check 
shall be considered adequate receipt of payment for purposes of this 
section. No operator or carrier shall be

[[Page 338]]

required to retain receipts for payments made for more than 5 years 
after the date on which such receipt was executed.



Sec.725.532  Suspension, reduction, or termination of payments.

    (a) No suspension, reduction, or termination in the payment of 
benefits is permitted unless authorized by the district director, 
administrative law judge, Board, or court. No suspension, reduction, or 
termination shall be authorized except upon the occurrence of an event 
which terminates a claimant's eligibility for benefits (see subpart B of 
this part) or as is otherwise provided in subpart C of this part, 
Sec. Sec.725.306 and 725.310, or this subpart (see also Sec. Sec.
725.533 through 725.546).
    (b) Any unauthorized suspension in the payment of benefits by an 
operator or carrier shall be treated as provided in subpart I.
    (c) Unless suspension, reduction, or termination of benefits 
payments is required by an administrative law judge, the Benefits Review 
Board or a court, the district director, after receiving notification of 
the occurrence of an event that would require the suspension, reduction, 
or termination of benefits, shall follow the procedures for the 
determination of claims set forth in subparts E and F.

                  Increases and Reductions of Benefits



Sec.725.533  Modification of benefits amounts; general.

    (a) Under certain circumstances, the amount of monthly benefits as 
computed in Sec.725.520 or lump-sum award (Sec.725.521) shall be 
modified to determine the amount actually to be paid to a beneficiary. 
With respect to any benefits payable for all periods of eligibility 
after January 1, 1974, a reduction of the amount of benefits payable 
shall be required on account of:
    (1) Any compensation or benefits received under any State workers' 
compensation law because of death or partial or total disability due to 
pneumoconiosis; or
    (2) Any compensation or benefits received under or pursuant to any 
Federal law including part B of title IV of the Act because of death or 
partial or total disability due to pneumoconiosis; or
    (3) In the case of benefits to a parent, brother, or sister as a 
result of a claim filed at any time or benefits payable on a miner's 
claim which was filed on or after January 1, 1982, the excess earnings 
from wages and from net earnings from self-employment (see Sec.410.530 
of this title) of such parent, brother, sister, or miner, respectively; 
or
    (4) The fact that a claim for benefits from an additional 
beneficiary is filed, or that such claim is effective for a payment 
during the month of filing, or a dependent qualifies under this part for 
an augmentation portion of a benefit of a miner or widow for a period in 
which another dependent has previously qualified for an augmentation.
    (b) An adjustment in a beneficiary's monthly benefit may be required 
because an overpayment or underpayment has been made to such beneficiary 
(see Sec. Sec.725.540-725.546).
    (c) A suspension of a beneficiary's monthly benefits may be required 
when the Office has information indicating that reductions on account of 
excess earnings may reasonably be expected.
    (d) Monthly benefit rates are payable in multiples of 10 cents. Any 
monthly benefit rate which, after the applicable computations, 
augmentations, and reductions is not a multiple of 10 cents, is 
increased to the next higher multiple of 10 cents. Since a fraction of a 
cent is not a multiple of 10 cents, a benefit rate which contains such a 
fraction in the third decimal is raised to the next higher multiple of 
10 cents.
    (e) Any individual entitled to a benefit, who is aware of any 
circumstances which could affect entitlement to benefits, eligibility 
for payment, or the amount of benefits, or result in the termination, 
suspension, or reduction of benefits, shall promptly report these 
circumstances to the Office. The Office may at any time require an 
individual receiving, or claiming entitlement to, benefits, either on 
his or her own behalf or on behalf of another, to submit a written 
statement giving pertinent information bearing upon the issue of whether 
or not an event has occurred which would cause such benefit to be 
terminated, or which would subject

[[Page 339]]

such benefit to reductions or suspension under the provisions of the 
Act. The failure of an individual to submit any such report or 
statement, properly executed, to the Office shall subject such benefit 
to reductions, suspension, or termination as the case may be.



Sec.725.534  Reduction of State benefits.

    No benefits under section 415 of part B of title IV of the Act shall 
be payable to the residents of a State which, after December 31, 1969, 
reduces the benefits payable to persons eligible to receive benefits 
under section 415 of the Act under State laws applicable to its general 
work force with regard to workers' compensation (including compensation 
for occupational disease), unemployment compensation, or disability 
insurance benefits which are funded in whole or in part out of employer 
contributions.



Sec.725.535  Reductions; receipt of State or Federal benefit.

    (a) As used in this section the term ``State or Federal benefit'' 
means a payment to an individual on account of total or partial 
disability or death due to pneumoconiosis only under State or Federal 
laws relating to workers' compensation. With respect to a claim for 
which benefits are payable for any month between July 1 and December 31, 
1973, ``State benefit'' means a payment to a beneficiary made on account 
of disability or death due to pneumoconiosis under State laws relating 
to workers' compensation (including compensation for occupational 
disease), unemployment compensation, or disability insurance.
    (b) Benefit payments to a beneficiary for any month are reduced (but 
not below zero) by an amount equal to any payments of State or Federal 
benefits received by such beneficiary for such month.
    (c) Where a State or Federal benefit is paid periodically but not 
monthly, or in a lump sum as a commutation of or a substitution for 
periodic benefits, the reduction under this section is made at such time 
or times and in such amounts as the Office determines will approximate 
as nearly as practicable the reduction required under paragraph (b) of 
this section. In making such a determination, a weekly State or Federal 
benefit is multiplied by 4\1/3\ and a biweekly benefit is multiplied by 
2\1/6\ to ascertain the monthly equivalent for reduction purposes.
    (d) Amounts paid or incurred or to be incurred by the individual for 
medical, legal, or related expenses in connection with this claim for 
State or Federal benefits (defined in paragraph (a) of this section) are 
excluded in computing the reduction under paragraph (b) of this section, 
to the extent that they are consistent with State or Federal Law. Such 
medical, legal, or related expenses may be evidenced by the State or 
Federal benefit awards, compromise agreement, or court order in the 
State or Federal benefit proceedings, or by such other evidence as the 
Office may require. Such other evidence may consist of:
    (1) A detailed statement by the individual's attorney, physician, or 
the employer's insurance carrier; or
    (2) Bills, receipts, or canceled checks; or
    (3) Other evidence indicating the amount of such expenses; or
    (4) Any combination of the foregoing evidence from which the amount 
of such expenses may be determinable. Such expenses shall not be 
excluded unless established by evidence as required by the Office.



Sec.725.536  Reductions; excess earnings.

    In the case of a surviving parent, brother, or sister, whose claim 
was filed at any time, or of a miner whose claim was filed on or after 
January 1, 1982, benefit payments are reduced as appropriate by an 
amount equal to the deduction which would be made with respect to excess 
earnings under the provisions of sections 203 (b), (f), (g), (h), (j), 
and (l) of the Social Security Act (42 U.S.C. 403 (b), (f), (g), (h), 
(j), and (l)), as if such benefit payments were benefits payable under 
section 202 of the Social Security Act (42 U.S.C. 402) (see Sec. Sec.
404.428 through 404.456 of this title).



Sec.725.537  Reductions; retroactive effect of an additional claim for 

benefits.

    Except as provided in Sec.725.212(b), beginning with the month in 
which a person other than a miner files a claim

[[Page 340]]

and becomes entitled to benefits, the benefits of other persons entitled 
to benefits with respect to the same miner, are adjusted downward, if 
necessary, so that no more than the permissible amount of benefits (the 
maximum amount for the number of beneficiaries involved) will be paid.



Sec.725.538  Reductions; effect of augmentation of benefits based on 

subsequent qualification of individual.

    (a) Ordinarily, a written request that the benefits of a miner or 
surviving spouse be augmented on account of a qualified dependent is 
made as part of the claim for benefits. However, it may also be made 
thereafter.
    (b) In the latter case, beginning with the month in which such a 
request is filed on account of a particular dependent and in which such 
dependent qualifies for augmentation purposes under this part, the 
augmented benefits attributable to other qualified dependents (with 
respect to the same miner or surviving spouse), if any, are adjusted 
downward, if necessary, so that the permissible amount of augmented 
benefits (the maximum amount for the number of dependents involved) will 
not be exceeded.
    (c) Where, based on the entitlement to benefits of a miner or 
surviving spouse, a dependent would have qualified for augmentation 
purposes for a prior month of such miner's or surviving spouse's 
entitlement had such request been filed in such prior month, such 
request is effective for such prior month. For any month before the 
month of filing such request, however, otherwise correct benefits 
previously certified by the Office may not be changed. Rather the amount 
of the augmented benefit attributable to the dependent filing such 
request in the later month is reduced for each month of the retroactive 
period to the extent that may be necessary. This means that for each 
month of the retroactive period, the amount payable to the dependent 
filing the later augmentation request is the difference, if any, 
between:
    (1) The total amount of augmented benefits certified for payment for 
other dependents for that month, and
    (2) The permissible amount of augmented benefits (the maximum amount 
for the number of dependents involved) payable for the month for all 
dependents, including the dependent filing later.



Sec.725.539  More than one reduction event.

    If a reduction for receipt of State or Federal benefits and a 
reduction on account of excess earnings are chargeable to the same 
month, the benefit for such month is first reduced (but not below zero) 
by the amount of the State or Federal benefits, and the remainder of the 
benefit for such month, if any, is then reduced (but not below zero) by 
the amount of excess earnings chargeable to such month.

                       Overpayments; Underpayments



Sec.725.540  Overpayments.

    (a) General. As used in this subpart, the term ``overpayment'' 
includes:
    (1) Payment where no amount is payable under this part;
    (2) Payment in excess of the amount payable under this part;
    (3) A payment under this part which has not been reduced by the 
amounts required by the Act (see Sec.725.533);
    (4) A payment under this part made to a resident of a State whose 
residents are not entitled to benefits (see Sec. Sec.725.402 and 
725.403);
    (5) Payment resulting from failure to terminate benefits to an 
individual no longer entitled thereto;
    (6) Duplicate benefits paid to a claimant on account of concurrent 
eligibility under this part and parts 410 or 727 (see Sec.725.4(d)) of 
this title or as provided in Sec.725.309.
    (b) Overpaid beneficiary is living. If the beneficiary to whom an 
overpayment was made is living at the time of a determination of such 
overpayment, is entitled to benefits at the time of the overpayment, or 
at any time thereafter becomes so entitled, no benefit for any month is 
payable to such individual, except as provided in paragraph (c) of this 
section, until an amount equal to the amount of the overpayment has been 
withheld or refunded.
    (c) Adjustment by withholding part of a monthly benefit. Adjustment 
under

[[Page 341]]

paragraph (b) of this section may be effected by withholding a part of 
the monthly benefit payable to a beneficiary where it is determined 
that:
    (1) Withholding the full amount each month would deprive the 
beneficiary of income required for ordinary and necessary living 
expenses;
    (2) The overpayment was not caused by the beneficiary's 
intentionally false statement or representation, or willful concealment 
of, or deliberate failure to furnish, material information; and
    (3) Recoupment can be effected in an amount of not less than $ 10 a 
month and at a rate which would not unreasonably extend the period of 
adjustment.
    (d) Overpaid beneficiary dies before adjustment. If an overpaid 
beneficiary dies before adjustment is completed under the provisions of 
paragraph (b) of this section, recovery of the overpayment shall be 
effected through repayment by the estate of the deceased overpaid 
beneficiary, or by withholding of amounts due the estate of such 
deceased beneficiary, or both.



Sec.725.541  Notice of waiver of adjustment or recovery of overpayment.

    Whenever a determination is made that more than the correct amount 
of payment has been made, notice of the provisions of section 204(b) of 
the Social Security Act regarding waiver of adjustment or recovery shall 
be sent to the overpaid individual, to any other individual against whom 
adjustment or recovery of the overpayment is to be effected, and to any 
operator or carrier which may be liable to such overpaid individual.



Sec.725.542  When waiver of adjustment or recovery may be applied.

    There shall be no adjustment or recovery of an overpayment in any 
case where an incorrect payment has been made with respect to an 
individual:
    (a) Who is without fault, and where
    (b) Adjustment or recovery would either:
    (1) Defeat the purpose of title IV of the Act, or
    (2) Be against equity and good conscience.



Sec.725.543  Standards for waiver of adjustment or recovery.

    The standards for determining the applicability of the criteria 
listed in Sec.725.542 shall be the same as those applied by the Social 
Security Administration under Sec. Sec.404.506 through 404.512 of this 
title.



Sec.725.544  Collection and compromise of claims for overpayment.

    (a) General effect of 31 U.S.C. 3711. In accordance with 31 U.S.C. 
3711 and applicable regulations, claims by the Office against an 
individual for recovery of an overpayment under this part not exceeding 
the sum of $100,000, exclusive of interest, may be compromised, or 
collection suspended or terminated, where such individual or his or her 
estate does not have the present or prospective ability to pay the full 
amount of the claim within a reasonable time (see paragraph (c) of this 
section), or the cost of collection is likely to exceed the amount of 
recovery (see paragraph (d) of this section), except as provided under 
paragraph (b) of this section.
    (b) When there will be no compromise, suspension, or termination of 
collection of a claim for overpayment. (1) In any case where the 
overpaid individual is alive, a claim for overpayment will not be 
compromised, nor will there be suspension or termination of collection 
of the claim by the Office, if there is an indication of fraud, the 
filing of a false claim, or misrepresentation on the part of such 
individual or on the part of any other party having any interest in the 
claim.
    (2) In any case where the overpaid individual is deceased:
    (i) A claim for overpayment in excess of $ 5,000 will not be 
compromised, nor will there be suspension or termination of collection 
of the claim by the Office if there is an indication of fraud, the 
filing of a false claim, or misrepresentation on the part of such 
deceased individual; and
    (ii) A claim for overpayment, regardless of the amount, will not be 
compromised, nor will there be suspension or termination of collection 
of the claim by the Office if there is an indication that any person 
other than the deceased overpaid individual had a part

[[Page 342]]

in the fraudulent action which resulted in the overpayment.
    (c) Inability to pay claim for recovery of overpayment. In 
determining whether the overpaid individual is unable to pay a claim for 
recovery of an overpayment under this part, the Office shall consider 
the individual's age, health, present and potential income (including 
inheritance prospects), assets (e.g., real property, savings account), 
possible concealment or improper transfer of assets, and assets or 
income of such individual which may be available in enforced collection 
proceedings. The Office will also consider exemptions available to such 
individual under the pertinent State or Federal law in such proceedings. 
In the event the overpaid individual is deceased, the Office shall 
consider the available assets of the estate, taking into account any 
liens or superior claims against the estate.
    (d) Cost of collection or litigative probabilities. Where the 
probable costs of recovering an overpayment under this part would not 
justify enforced collection proceedings for the full amount of the 
claim, or where there is doubt concerning the Office's ability to 
establish its claim as well as the time which it will take to effect 
such collection, a compromise or settlement for less than the full 
amount may be considered.
    (e) Amount of compromise. The amount to be accepted in compromise of 
a claim for overpayment under this part shall bear a reasonable 
relationship to the amount which can be recovered by enforced collection 
proceedings, giving due consideration to the exemption available to the 
overpaid individual under State or Federal law and the time which 
collection will take.
    (f) Payment. Payment of the amount the Office has agreed to accept 
as a compromise in full settlement of a claim for recovery of an 
overpayment under this part shall be made within the time and in the 
manner set by the Office. A claim for the overpayment shall not be 
considered compromised or settled until the full payment of the 
compromised amount has been made within the time and manner set by the 
Office. Failure of the overpaid individual or his or her estate to make 
such payment as provided shall result in reinstatement of the full 
amount of the overpayment less any amounts paid prior to such default.



Sec.725.545  Underpayments.

    (a) General. As used in this subpart, the term ``underpayment'' 
includes a payment in an amount less than the amount of the benefit due 
for such month, and nonpayment where some amount of such benefits is 
payable.
    (b) Underpaid individual is living. If an individual to whom an 
underpayment was made is living, the deficit represented by such 
underpayment shall be paid to such individual either in a single payment 
(if he or she is not entitled to a monthly benefit or if a single 
payment is requested by the claimant in writing) or by increasing one or 
more monthly benefit payments to which such individual becomes entitled.
    (c) Underpaid individual dies before adjustment of underpayment. If 
an individual to whom an underpayment was made dies before receiving 
payment of the deficit or negotiating the check or checks representing 
payment of the deficit, such payment shall be distributed to the living 
person (or persons) in the highest order of priority as follows:
    (1) The deceased individual's surviving spouse who was either:
    (i) Living in the same household with the deceased individual at the 
time of such individual's death; or
    (ii) In the case of a deceased miner, entitled for the month of 
death to black lung benefits as his or her surviving spouse or surviving 
divorced spouse.
    (2) In the case of a deceased miner or spouse his or her child 
entitled to benefits as the surviving child of such miner or surviving 
spouse for the month in which such miner or spouse died (if more than 
one such child, in equal shares to each such child).
    (3) In the case of a deceased miner, his parent entitled to benefits 
as the surviving parent of such miner for the month in which such miner 
died (if more than one such parent, in equal shares to each such 
parent).
    (4) The surviving spouse of the deceased individual who does not 
qualify under paragraph (c)(1) of this section.
    (5) The child or children of the deceased individual who do not 
qualify

[[Page 343]]

under paragraph (c)(2) of this section (if more than one such child, in 
equal shares to each such child).
    (6) The parent or parents of the deceased individual who do not 
qualify under paragraph (c)(3) of this section (if more than one such 
parent, in equal shares to each such parent).
    (7) The legal representative of the estate of the deceased 
individual as defined in paragraph (e) of this section.
    (d) Deceased beneficiary. In the event that a person, who is 
otherwise qualified to receive payments as the result of a deficit 
caused by an underpayment under the provisions of paragraph (c) of this 
section, dies before receiving payment or before negotiating the check 
or checks representing such payment, his or her share of the 
underpayment shall be divided among the remaining living person(s) in 
the same order or priority. In the event that there is (are) no other 
such person(s), the underpayment shall be paid to the living person(s) 
in the next lower order of priority under paragraph (c) of this section.
    (e) Definition of legal representative. The term ``legal 
representative,'' for the purpose of qualifying for receipt of an 
underpayment, generally means the executor or the administrator of the 
estate of the deceased beneficiary. However, it may also include an 
individual, institution or organization acting on behalf of an 
unadministered estate, provided the person can give the Office good 
acquittance (as defined in paragraph (f) of this section). The following 
persons may qualify as legal representative for purposes of this 
section, provided they can give the Office good acquittance:
    (1) A person who qualifies under a State's ``small estate'' statute; 
or
    (2) A person resident in a foreign country who under the laws and 
customs of that country, has the right to receive assets of the estate; 
or
    (3) A public administrator; or
    (4) A person who has the authority under applicable law to collect 
the assets of the estate of the deceased beneficiary.
    (f) Definition of ``good acquittance.'' A person is considered to 
give the Office ``good acquittance'' when payment to that person will 
release the Office from further liability for such payment.



Sec.725.546  Relation to provisions for reductions or increases.

    The amount of an overpayment or an underpayment is the difference 
between the amount to which the beneficiary was actually entitled and 
the amount paid. Overpayment and underpayment simultaneously outstanding 
against the same beneficiary shall first be adjusted against one another 
before adjustment pursuant to the other provisions of this subpart.



Sec.725.547  Applicability of overpayment and underpayment provisions to operator or carrier.

    (a) The provisions of this subpart relating to overpayments and 
underpayments shall be applicable to overpayments and underpayments made 
by responsible operators or their insurance carriers, as appropriate.
    (b) No operator or carrier may recover, or make an adjustment of, an 
overpayment without prior application to, and approval by, the Office 
which shall exercise full supervisory authority over the recovery or 
adjustment of all overpayments.



Sec.725.548  Procedures applicable to overpayments and underpayments.

    (a) In any case involving either overpayments or underpayments, the 
Office may take any necessary action, and district directors may issue 
appropriate orders to protect the rights of the parties.
    (b) Disputes arising out of orders so issued shall be resolved by 
the procedures set out in subpart F of this part.



               Subpart I_Enforcement of Liability; Reports



Sec.725.601  Enforcement generally.

    (a) The Act, together with certain incorporated provisions from the 
Longshoremen's and Harbor Workers' Compensation Act, contains a number 
of provisions which subject an operator or other employer, claimants and 
others to penalties for failure to comply with certain provisions of the 
Act, or failure to commence and continue prompt periodic payments to a 
beneficiary.

[[Page 344]]

    (b) It is the policy and intent of the Department to vigorously 
enforce the provisions of this part through the use of the remedies 
provided by the Act. Accordingly, if an operator refuses to pay benefits 
with respect to a claim for which the operator has been adjudicated 
liable, the Director shall invoke and execute the lien on the property 
of the operator as described in Sec.725.603. Enforcement of this lien 
shall be pursued in an appropriate U.S. district court. If the Director 
determines that the remedy provided by Sec.725.603 may not be 
sufficient to guarantee the continued compliance with the terms of an 
award or awards against the operator, the Director shall in addition 
seek an injunction in the U.S. district court to prohibit future 
noncompliance by the operator and such other relief as the court 
considers appropriate (see Sec.725.604). If an operator unlawfully 
suspends or terminates the payment of benefits to a claimant, the 
district director shall declare the award in default and proceed in 
accordance with Sec.725.605. In all cases payments in addition to 
compensation (see Sec.725.607) and interest (see Sec.725.608) shall 
be sought by the Director or awarded by the district director.
    (c) In certain instances the remedies provided by the Act are 
concurrent; that is, more than one remedy might be appropriate in any 
given case. In such a case, the Director shall select the remedy or 
remedies appropriate for the enforcement action. In making this 
selection, the Director shall consider the best interests of the 
claimant as well as those of the fund.



Sec.725.602  Reimbursement of the fund.

    (a) In any case in which the fund has paid benefits, including 
medical benefits, on behalf of an operator or other employer which is 
determined liable therefore, or liable for a part thereof, such operator 
or other employer shall simultaneously with the first payment of 
benefits made to the beneficiary, reimburse the fund (with interest) for 
the full amount of all benefit payments made by the fund with respect to 
the claim.
    (b) In any case where benefit payments have been made by the fund, 
the fund shall be subrogated to the rights of the beneficiary. The 
Secretary of Labor may, as appropriate, exercise such subrogation 
rights.



Sec.725.603  Payments by the fund on behalf of an operator; liens.

    (a) If an amount is paid out of the fund to an individual entitled 
to benefits under this part or part 727 of this subchapter (see Sec.
725.4(d)) on behalf of an operator or other employer which is or was 
required to pay or secure the payment of all or a portion of such amount 
(see Sec.725.522), the operator or other employer shall be liable to 
the United States for repayment to the fund of the amount of benefits 
properly attributable to such operator or other employer.
    (b) If an operator or other employer liable to the fund refuses to 
pay, after demand, the amount of such liability, there shall be a lien 
in favor of the United States upon all property and rights to property, 
whether real or personal, belonging to such operator or other employer. 
The lien arises on the date on which such liability is finally 
determined, and continues until it is satisfied or becomes unenforceable 
by reason of lapse of time.
    (c)(1) Except as otherwise provided under this section, the priority 
of the lien shall be determined in the same manner as under section 6323 
of the Internal Revenue Code (26 U.S.C.).
    (2) In the case of a bankruptcy or insolvency proceeding, the lien 
imposed under this section shall be treated in the same manner as a lien 
for taxes due and owing to the United States for purposes of the 
Bankruptcy Act or section 3466 of the Revised Statutes (31 U.S.C. 191).
    (3) For purposes of applying section 6323(a) of the Internal Revenue 
Code (26 U.S.C.) to determine the priority between the lien imposed 
under this section and the Federal tax lien, each lien shall be treated 
as a judgment lien arising as of the time notice of such lien is filed.
    (4) For purposes of the section, notice of the lien imposed 
hereunder shall be filed in the same manner as under section 6323(f) 
(disregarding paragraph (4) thereof) and (g) of the Internal Revenue 
Code (26 U.S.C.).

[[Page 345]]

    (5) In any case where there has been a refusal or neglect to pay the 
liability imposed under this section, the Secretary of Labor may bring a 
civil action in a district court of the United States to enforce the 
lien of the United States under this section with respect to such 
liability or to subject any property, of whatever nature, of the 
operator, or in which it has any right, title, or interest, to the 
payment of such liability.
    (6) The liability imposed by this paragraph may be collected at a 
proceeding in court if the proceeding is commenced within 6 years after 
the date upon which the liability was finally determined, or prior to 
the expiration of any period for collection agreed upon in writing by 
the operator and the United States before the expiration of such 6-year 
period. This period of limitation shall be suspended for any period 
during which the assets of the operator are in the custody or control of 
any court of the United States, or of any State, or the District of 
Columbia, and for 6 months thereafter, and for any period during which 
the operator is outside the United States if such period of absence is 
for a continuous period of at least 6 months.



Sec.725.604  Enforcement of final awards.

    Notwithstanding the provisions of Sec.725.603, if an operator or 
other employer or its officers or agents fails to comply with an order 
awarding benefits that has become final, any beneficiary of such award 
or the district director may apply for the enforcement of the order to 
the Federal district court for the judicial district in which the injury 
occurred (or to the U.S. District Court for the District of Columbia if 
the injury occurred in the District). If the court determines that the 
order was made and served in accordance with law, and that such operator 
or other employer or its officers or agents have failed to comply 
therewith, the court shall enforce obedience to the order by writ of 
injunction or by other proper process, mandatory or otherwise, to enjoin 
upon such operator or other employer and its officers or agents 
compliance with the order.



Sec.725.605  Defaults.

    (a) Except as is otherwise provided in this part, no suspension, 
termination or other failure to pay benefits awarded to a claimant is 
permitted. If an employer found liable for the payment of such benefits 
fails to make such payments within 30 days after any date on which such 
benefits are due and payable, the person to whom such benefits are 
payable may, within one year after such default, make application to the 
district director for a supplementary order declaring the amount of the 
default.
    (b) If after investigation, notice and hearing as provided in 
subparts E and F of this part, a default is found, the district director 
or the administrative law judge, if a hearing is requested, shall issue 
a supplementary order declaring the amount of the default, if any. In 
cases where a lump-sum award has been made, if the payment in default is 
an installment, the district director or administrative law judge, may, 
in his or her discretion, declare the whole of the award as the amount 
in default. The applicant may file a certified copy of such 
supplementary order with the clerk of the Federal district court for the 
judicial district in which the operator has its principal place of 
business or maintains an office or for the judicial district in which 
the injury occurred. In case such principal place of business or office 
is in the District of Columbia, a copy of such supplementary order may 
be filed with the clerk of the U.S. District Court for the District of 
Columbia. Such supplementary order shall be final and the court shall, 
upon the filing of the copy, enter judgment for the amount declared in 
default by the supplementary order if such supplementary order is in 
accordance with law. Review of the judgment may be had as in civil suits 
for damages at common law. Final proceedings to execute the judgment may 
be had by writ of execution in the form used by the court in suits at 
common law in actions of assumpsit. No fee shall be required for filing 
the supplementary order nor for entry of judgment thereon, and the 
applicant shall not be liable for costs in a proceeding for review of 
the judgment unless the court shall otherwise direct. The court

[[Page 346]]

shall modify such judgment to conform to any later benefits order upon 
presentation of a certified copy thereof to the court.
    (c) In cases where judgment cannot be satisfied by reason of the 
employer's insolvency or other circumstances precluding payment, the 
district director shall make payment from the fund, and in addition, 
provide any necessary medical, surgical, and other treatment required by 
subpart J of this part. A defaulting employer shall be liable to the 
fund for payment of the amounts paid by the fund under this section; and 
for the purpose of enforcing this liability, the fund shall be 
subrogated to all the rights of the person receiving such payments or 
benefits.



Sec.725.606  Security for the payment of benefits.

    (a) Following the issuance of an effective order by a district 
director (see Sec.725.418), administrative law judge (see Sec.
725.479), Benefits Review Board, or court that requires the payment of 
benefits by an operator that has failed to secure the payment of 
benefits in accordance with section 423 of the Act and Sec.726.4 of 
this subchapter, or by a coal mine construction or transportation 
employer, the Director may request that the operator secure the payment 
of all benefits ultimately payable on the claim. Such operator or other 
employer shall thereafter immediately secure the payment of benefits in 
accordance with the provisions of this section, and provide proof of 
such security to the Director. Such security may take the form of an 
indemnity bond, a deposit of cash or negotiable securities in compliance 
with Sec. Sec.726.106(c) and 726.107 of this subchapter, or any other 
form acceptable to the Director.
    (b) The amount of security initially required by this section shall 
be determined as follows:
    (1) In a case involving an operator subject to section 423 of the 
Act and Sec.726.4 of this subchapter, the amount of the security shall 
not be less than $175,000, and may be a higher amount as determined by 
the Director, taking into account the life expectancies of the claimant 
and any dependents using the most recent life expectancy tables 
published by the Social Security Administration; or
    (2) In a case involving a coal mine construction or transportation 
employer, the amount of the security shall be determined by the 
Director, taking into account the life expectancies of the claimant and 
any dependents using the most recent life expectancy tables published by 
the Social Security Administration.
    (c) If the operator or other employer fails to provide proof of such 
security to the Director within 30 days of its receipt of the Director's 
request to secure the payment of benefits issued under paragraph (a) of 
this section, the appropriate adjudication officer shall issue an order 
requiring the operator or other employer to make a deposit of negotiable 
securities with a Federal Reserve Bank in the amount required by 
paragraph (b). Such securities shall comply with the requirements of 
Sec. Sec.726.106(c) and 726.107 of this subchapter. In a case in which 
the effective order was issued by a district director, the district 
director shall be considered the appropriate adjudication officer. In 
any other case, the administrative law judge who issued the most recent 
decision in the case, or such other administrative law judge as the 
Chief Administrative Law Judge shall designate, shall be considered the 
appropriate adjudication officer, and shall issue an order under this 
paragraph on motion of the Director. The administrative law judge shall 
have jurisdiction to issue an order under this paragraph notwithstanding 
the pendency of an appeal of the award of benefits with the Benefits 
Review Board or court.
    (d) An order issued under this section shall be considered effective 
when issued. Disputes regarding such orders shall be resolved in 
accordance with subpart F of this part.
    (e) Notwithstanding any further review of the order in accordance 
with subpart F of this part, if an operator or other employer subject to 
an order issued under this section fails to comply with such order, the 
appropriate adjudication officer shall certify such non-compliance to 
the appropriate United States district court in accordance with Sec.
725.351(c).

[[Page 347]]

    (f) Security posted in accordance with this section may be used to 
make payment of benefits that become due with respect to the claim in 
accordance with Sec.725.502. In the event that either the order 
awarding compensation or the order issued under this section is vacated 
or reversed, the operator or other employer may apply to the appropriate 
adjudication officer for an order authorizing the return of any amounts 
deposited with a Federal Reserve Bank and not yet disbursed, and such 
application shall be granted. If at any time the Director determines 
that additional security is required beyond that initially required by 
paragraph (b) of this section, he may request the operator or other 
employer to increase the amount. Such request shall be treated as if it 
were issued under paragraph (a) of this section.
    (g) If a coal mine construction or transportation employer fails to 
comply with an order issued under paragraph (c), and such employer is a 
corporation, the provisions of Sec.725.609 shall be applicable to the 
president, secretary, and treasurer of such employer.



Sec.725.607  Payments in addition to compensation.

    (a) If any benefits payable under the terms of an award by a 
district director (Sec.725.419(d)), a decision and order filed and 
served by an administrative law judge (Sec.725.478), or a decision 
filed by the Board or a U.S. court of appeals, are not paid by an 
operator or other employer ordered to make such payments within 10 days 
after such payments become due, there shall be added to such unpaid 
benefits an amount equal to 20 percent thereof, which shall be paid to 
the claimant at the same time as, but in addition to, such benefits, 
unless review of the order making such award is sought as provided in 
section 21 of the LHWCA and an order staying payments has been issued.
    (b) If, on account of an operator's or other employer's failure to 
pay benefits as provided in paragraph (a) of this section, benefit 
payments are made by the fund, the eligible claimant shall nevertheless 
be entitled to receive such additional compensation to which he or she 
may be eligible under paragraph (a) of this section, with respect to all 
amounts paid by the fund on behalf of such operator or other employer.
    (c) The fund shall not be liable for payments in addition to 
compensation under any circumstances.



Sec.725.608  Interest.

    (a)(1) In any case in which an operator fails to pay benefits that 
are due (Sec.725.502), the beneficiary shall also be entitled to 
simple annual interest, computed from the date on which the benefits 
were due. The interest shall be computed through the date on which the 
operator paid the benefits, except that the beneficiary shall not be 
entitled to interest for any period following the date on which the 
beneficiary received payment of any benefits from the fund pursuant to 
Sec.725.522.
    (2) In any case in which an operator is liable for the payment of 
retroactive benefits, the beneficiary shall also be entitled to simple 
annual interest on such benefits, computed from 30 days after the date 
of the first determination that such an award should be made. The first 
determination that such an award should be made may be a district 
director's initial determination of entitlement, an award made by an 
administrative law judge or a decision by the Board or a court, 
whichever is the first such determination of entitlement made upon the 
claim.
    (3) In any case in which an operator is liable for the payment of 
additional compensation (Sec.725.607), the beneficiary shall also be 
entitled to simple annual interest computed from the date upon which the 
beneficiary's right to additional compensation first arose.
    (4) In any case in which an operator is liable for the payment of 
medical benefits, the beneficiary or medical provider to whom such 
benefits are owed shall also be entitled to simple annual interest, 
computed from the date upon which the services were rendered, or from 30 
days after the date of the first determination that the miner is 
generally entitled to medical benefits, whichever is later. The first 
determination that the miner is generally entitled to medical benefits 
may be a district director's initial determination of entitlement, an 
award made by

[[Page 348]]

an administrative law judge or a decision by the Board or a court, 
whichever is the first such determination of general entitlement made 
upon the claim. The interest shall be computed through the date on which 
the operator paid the benefits, except that the beneficiary or medical 
provider shall not be entitled to interest for any period following the 
date on which the beneficiary or medical provider received payment of 
any benefits from the fund pursuant to Sec.725.522 or subpart I of 
this part.
    (b) If an operator or other employer fails or refuses to pay any or 
all benefits due pursuant to an award of benefits or an initial 
determination of eligibility made by the district director and the fund 
undertakes such payments, such operator or other employer shall be 
liable to the fund for simple annual interest on all payments made by 
the fund for which such operator is determined liable, computed from the 
first date on which such benefits are paid by the fund, in addition to 
such operator's liability to the fund, as is otherwise provided in this 
part. Interest payments owed pursuant to this paragraph shall be paid 
directly to the fund.
    (c) In any case in which an operator is liable for the payment of an 
attorney's fee pursuant to Sec.725.367, and the attorney's fee is 
payable because the award of benefits has become final, the attorney 
shall also be entitled to simple annual interest, computed from the date 
on which the attorney's fee was awarded. The interest shall be computed 
through the date on which the operator paid the attorney's fee.
    (d) The rates of interest applicable to paragraphs (a), (b), and (c) 
of this section shall be computed as follows:
    (1) For all amounts outstanding prior to January 1, 1982, the rate 
shall be 6% simple annual interest;
    (2) For all amounts outstanding for any period during calendar year 
1982, the rate shall be 15% simple annual interest; and
    (3) For all amounts outstanding during any period after calendar 
year 1982, the rate shall be simple annual interest at the rate 
established by section 6621 of the Internal Revenue Code (26 U.S.C.) 
which is in effect for such period.
    (e) The fund shall not be liable for the payment of interest under 
any circumstances, other than the payment of interest on advances from 
the United States Treasury as provided by section 9501(c) of the 
Internal Revenue Code (26 U.S.C.).



Sec.725.609  Enforcement against other persons.

    In any case in which an award of benefits creates obligations on the 
part of an operator or insurer that may be enforced under the provisions 
of this subpart, such obligations may also be enforced, in the 
discretion of the Secretary or district director, as follows:
    (a) In a case in which the operator is a sole proprietorship or 
partnership, against any person who owned, or was a partner in, such 
operator during any period commencing on or after the date on which the 
miner was last employed by the operator;
    (b) In a case in which the operator is a corporation that failed to 
secure its liability for benefits in accordance with section 423 of the 
Act and Sec.726.4, and the operator has not secured its liability for 
the claim in accordance with Sec.725.606, against any person who 
served as the president, secretary, or treasurer of such corporation 
during any period commencing on or after the date on which the miner was 
last employed by the operator;
    (c) In a case in which the operator is no longer capable of assuming 
its liability for the payment of benefits (Sec.725.494(e)), against 
any operator which became a successor operator with respect to the 
liable operator (Sec.725.492) after the date on which the claim was 
filed, beginning with the most recent such successor operator;
    (d) In a case in which the operator is no longer capable of assuming 
its liability for the payment of benefits (Sec.725.494(e)), and such 
operator was a subsidiary of a parent company or a product of a joint 
venture, or was substantially owned or controlled by another business 
entity, against such parent entity, any member of such joint venture, or 
such controlling business entity; or

[[Page 349]]

    (e) Against any other person who has assumed or succeeded to the 
obligations of the operator or insurer by operation of any state or 
federal law, or by any other means.



Sec.725.620  Failure to secure benefits; other penalties.

    (a) If an operator fails to discharge its insurance obligations 
under the Act, the provisions of subpart D of part 726 of this 
subchapter shall apply.
    (b) Any employer who knowingly transfers, sells, encumbers, assigns, 
or in any manner disposes of, conceals, secrets, or destroys any 
property belonging to such employer, after one of its employees has been 
injured within the purview of the Act, and with intent to avoid the 
payment of benefits under the Act to such miner or his or her 
dependents, shall be guilty of a misdemeanor and, upon conviction 
thereof, shall be punished by a fine of not more than $1,000, or by 
imprisonment for not more than one year, or by both. In any case where 
such employer is a corporation, the president, secretary, and treasurer 
thereof shall be also severally liable for such penalty or imprisonment 
as well as jointly liable with such corporation for such fine.
    (c) No agreement by a miner to pay any portion of a premium paid to 
a carrier by such miner's employer or to contribute to a benefit fund or 
department maintained by such employer for the purpose of providing 
benefits or medical services and supplies as required by this part shall 
be valid; and any employer who makes a deduction for such purpose from 
the pay of a miner entitled to benefits under the Act shall be guilty of 
a misdemeanor and upon conviction thereof shall be punished by a fine of 
not more than $1,000.
    (d) No agreement by a miner to waive his or her right to benefits 
under the Act and the provisions of this part shall be valid.
    (e) This section shall not affect any other liability of the 
employer under this part.



Sec.725.621  Reports.

    (a) Upon making the first payment of benefits and upon suspension, 
reduction, or increase of payments, the operator or other employer 
responsible for making payments shall immediately notify the district 
director of the action taken, in accordance with a form prescribed by 
the Office.
    (b) Within 16 days after final payment of benefits has been made by 
an employer, such employer shall so notify the district director, in 
accordance with a form prescribed by the Office, stating that such final 
payment, has been made, the total amount of benefits paid, the name of 
the beneficiary, and such other information as the Office deems 
pertinent.
    (c) The Director may from time to time prescribe such additional 
reports to be made by operators, other employers, or carriers as the 
Director may consider necessary for the efficient administration of the 
Act.
    (d) Any employer who fails or refuses to file any report required of 
such employer under this section shall be subject to a civil penalty not 
to exceed $500 for each failure or refusal, which penalty shall be 
determined in accordance with the procedures set forth in subpart D of 
part 726 of this subchapter, as appropriate. The maximum penalty 
applicable to any violation of this paragraph that takes place after 
January 19, 2001 shall be $550.
    (e) No request for information or response to such request shall be 
considered a report for purposes of this section or the Act, unless it 
is so designated by the Director or by this section.



        Subpart J_Medical Benefits and Vocational Rehabilitation



Sec.725.701  Availability of medical benefits.

    (a) A miner who is determined to be eligible for benefits under this 
part or part 727 of this subchapter (see Sec.725.4(d)) is entitled to 
medical benefits as set forth in this subpart as of the date of his or 
her claim, but in no event before January 1, 1974. No medical benefits 
shall be provided to the survivor or dependent of a miner under this 
part.
    (b) A responsible operator, other employer, or where there is 
neither, the fund, shall furnish a miner entitled to

[[Page 350]]

benefits under this part with such medical, surgical, and other 
attendance and treatment, nursing and hospital services, medicine and 
apparatus, and any other medical service or supply, for such periods as 
the nature of the miner's pneumoconiosis and disability requires.
    (c) The medical benefits referred to in paragraphs (a) and (b) of 
this section shall include palliative measures useful only to prevent 
pain or discomfort associated with the miner's pneumoconiosis or 
attendant disability.
    (d) The costs recoverable under this subpart shall include the 
reasonable cost of travel necessary for medical treatment (to be 
determined in accordance with prevailing United States government 
mileage rates) and the reasonable documented cost to the miner or 
medical provider incurred in communicating with the employer, carrier, 
or district director on matters connected with medical benefits.
    (e) If a miner receives a medical service or supply, as described in 
this section, for any pulmonary disorder, there shall be a rebuttable 
presumption that the disorder is caused or aggravated by the miner's 
pneumoconiosis. The party liable for the payment of benefits may rebut 
the presumption by producing credible evidence that the medical service 
or supply provided was for a pulmonary disorder apart from those 
previously associated with the miner's disability, or was beyond that 
necessary to effectively treat a covered disorder, or was not for a 
pulmonary disorder at all.
    (f) Evidence that the miner does not have pneumoconiosis or is not 
totally disabled by pneumoconiosis arising out of coal mine employment 
is insufficient to defeat a request for coverage of any medical service 
or supply under this subpart. In determining whether the treatment is 
compensable, the opinion of the miner's treating physician may be 
entitled to controlling weight pursuant to Sec.718.104(d). A finding 
that a medical service or supply is not covered under this subpart shall 
not otherwise affect the miner's entitlement to benefits.



Sec.725.702  Claims for medical benefits only under section 11 of the Reform 

Act.

    (a) Section 11 of the Reform Act directs the Secretary of Health, 
Education and Welfare to notify each miner receiving benefits under part 
B of title IV of the Act that he or she may file a claim for medical 
treatment benefits described in this subpart. Section 725.308(b) 
provides that a claim for medical treatment benefits shall be filed on 
or before December 31, 1980, unless the period is enlarged for good 
cause shown. This section sets forth the rules governing the processing, 
adjudication, and payment of claims filed under section 11.
    (b)(1) A claim filed pursuant to the notice described in paragraph 
(a) of this section shall be considered a claim for medical benefits 
only, and shall be filed, processed, and adjudicated in accordance with 
the provisions of this part, except as provided in this section. While a 
claim for medical benefits must be treated as any other claim filed 
under part C of title IV of the Act, the Department shall accept the 
Social Security Administration's finding of entitlement as its initial 
determination.
    (2) In the case of a part B beneficiary whose coal mine employment 
terminated before January 1, 1970, the Secretary shall make an immediate 
award of medical benefits. Where the part B beneficiary's coal mine 
employment terminated on or after January 1, 1970, the Secretary shall 
immediately authorize the payment of medical benefits and thereafter 
inform the responsible operator, if any, of the operator's right to 
contest the claimant's entitlement for medical benefits.
    (c) A miner on whose behalf a claim is filed under this section (see 
Sec.725.301) must have been alive on March 1, 1978, in order for the 
claim to be considered.
    (d) The criteria contained in subpart C of part 727 of this 
subchapter (see Sec.725.4(d)) are applicable to claims for medical 
benefits filed under this section.
    (e) No determination made with respect to a claim filed under this 
section shall affect any determination previously made by the Social 
Security Administration. The Social Security

[[Page 351]]

Administration may, however, reopen a previously approved claim if the 
conditions set forth in Sec.410.672(c) of this chapter are present. 
These conditions are generally limited to fraud or concealment.
    (f) If medical benefits are awarded under this section, such 
benefits shall be payable by a responsible coal mine operator (see 
subpart G of this part), if the miner's last employment occurred on or 
after January 1, 1970, and in all other cases by the fund. An operator 
which may be required to provide medical treatment benefits to a miner 
under this section shall have the right to participate in the 
adjudication of the claim as is otherwise provided in this part.
    (g) Any miner whose coal mine employment terminated after January 1, 
1970, may be required to submit to a medical examination requested by an 
identified operator. The unreasonable refusal to submit to such an 
examination shall have the same consequences as are provided under Sec.
725.414.
    (h) If a miner is determined eligible for medical benefits in 
accordance with this section, such benefits shall be provided from the 
date of filing, except that such benefits may also include payments for 
any unreimbursed medical treatment costs incurred personally by such 
miner during the period from January 1, 1974, to the date of filing 
which are attributable to medical care required as a result of the 
miner's total disability due to pneumoconiosis. No reimbursement for 
health insurance premiums, taxes attributable to any public health 
insurance coverage, or other deduction or payments made for the purpose 
of securing third party liability for medical care costs is authorized 
by this section. If a miner seeks reimbursement for medical care costs 
personally incurred before the filing of a claim under this section, the 
district director shall require documented proof of the nature of the 
medical service provided, the identity of the medical provider, the cost 
of the service, and the fact that the cost was paid by the miner, before 
reimbursement for such cost may be awarded.



Sec.725.703  Physician defined.

    The term ``physician'' includes only doctors of medicine (MD) and 
osteopathic practitioners within the scope of their practices as defined 
by State law. No treatment or medical services performed by any other 
practitioner of the healing arts is authorized by this part, unless such 
treatment or service is authorized and supervised both by a physician as 
defined in this section and the district director.



Sec.725.704  Notification of right to medical benefits; authorization of 

treatment.

    (a) Upon notification to a miner of such miner's entitlement to 
benefits, the Office shall provide the miner with a list of authorized 
treating physicians and medical facilities in the area of the miner's 
residence. The miner may select a physician from this list or may select 
another physician with approval of the Office. Where emergency services 
are necessary and appropriate, authorization by the Office shall not be 
required.
    (b) The Office may, on its own initiative, or at the request of a 
responsible operator, order a change of physicians or facilities, but 
only where it has been determined that the change is desirable or 
necessary in the best interest of the miner. The miner may change 
physicians or facilities subject to the approval of the Office.
    (c) If adequate treatment cannot be obtained in the area of the 
claimant's residence, the Office may authorize the use of physicians or 
medical facilities outside such area as well as reimbursement for travel 
expenses and overnight accommodations.



Sec.725.705  Arrangements for medical care.

    (a) Operator liability. If an operator has been determined liable 
for the payment of benefits to a miner, the Office shall notify such 
operator or insurer of the names, addresses, and telephone numbers of 
the authorized providers of medical benefits chosen by an entitled 
miner, and shall require the operator or insurer to:
    (1) Notify the miner and the providers chosen that such operator 
will be responsible for the cost of medical

[[Page 352]]

services provided to the miner on account of the miner's total 
disability due to pneumoconiosis;
    (2) Designate a person or persons with decisionmaking authority with 
whom the Office, the miner and authorized providers may communicate on 
matters involving medical benefits provided under this subpart and 
notify the Office, miner and providers of such designation;
    (3) Make arrangements for the direct reimbursement of providers for 
their services.
    (b) Fund liability. If there is no operator found liable for the 
payment of benefits, the Office shall make necessary arrangements to 
provide medical care to the miner, notify the miner and medical care 
facility selected of the liability of the fund, designate a person or 
persons with whom the miner or provider may communicate on matters 
relating to medical care, and make arrangements for the direct 
reimbursement of the medical provider.



Sec.725.706  Authorization to provide medical services.

    (a) Except as provided in paragraph (b) of this section, medical 
services from an authorized provider which are payable under Sec.
725.701 shall not require prior approval of the Office or the 
responsible operator.
    (b) Except where emergency treatment is required, prior approval of 
the Office or the responsible operator shall be obtained before any 
hospitalization or surgery, or before ordering an apparatus for 
treatment where the purchase price exceeds $300. A request for approval 
of non-emergency hospitalization or surgery shall be acted upon 
expeditiously, and approval or disapproval will be given by telephone if 
a written response cannot be given within 7 days following the request. 
No employee of the Department of Labor, other than a district director 
or the Chief, Branch of Medical Analysis and Services, DCMWC, is 
authorized to approve a request for hospitalization or surgery by 
telephone.
    (c) Payment for medical services, treatment, or an apparatus shall 
be made at no more than the rate prevailing in the community in which 
the providing physician, medical facility or supplier is located.



Sec.725.707  Reports of physicians and supervision of medical care.

    (a) Within 30 days following the first medical or surgical treatment 
provided under Sec.725.701, the treating physician or facility shall 
furnish to the Office and the responsible operator, if any, a report of 
such treatment.
    (b) In order to permit continuing supervision of the medical care 
provided to the miner with respect to the necessity, character and 
sufficiency of any medical care furnished or to be furnished, the 
treating physician, facility, employer or carrier shall provide such 
reports in addition to those required by paragraph (a) of this section 
as the Office may from time to time require. Within the discretion of 
the district director, payment may be refused to any medical provider 
who fails to submit any report required by this section.



Sec.725.708  Disputes concerning medical benefits.

    (a) Whenever a dispute develops concerning medical services under 
this part, the district director shall attempt to informally resolve 
such dispute. In this regard the district director may, on his or her 
own initiative or at the request of the responsible operator order the 
claimant to submit to an examination by a physician selected by the 
district director.
    (b) If no informal resolution is accomplished, the district director 
shall refer the case to the Office of Administrative Law Judges for 
hearing in accordance with this part. Any such hearing shall be 
scheduled at the earliest possible time and shall take precedence over 
all other requests for hearing except for prior requests for hearing 
arising under this section and as provided by Sec.727.405 of this 
subchapter (see Sec.725.4(d)). During the pendency of such 
adjudication, the Director may order the payment of medical benefits 
prior to final adjudication under the same conditions applicable to 
benefits awarded under Sec.725.522.
    (c) In the development or adjudication of a dispute over medical 
benefits, the adjudication officer is authorized

[[Page 353]]

to take whatever action may be necessary to protect the health of a 
totally disabled miner.
    (d) Any interested medical provider may, if appropriate, be made a 
party to a dispute over medical benefits.



Sec.725.710  Objective of vocational rehabilitation.

    The objective of vocational rehabilitation is the return of a miner 
who is totally disabled for work in or around a coal mine and who is 
unable to utilize those skills which were employed in the miner's coal 
mine employment to gainful employment commensurate with such miner's 
physical impairment. This objective may be achieved through a program of 
re-evaluation and redirection of the miner's abilities, or retraining in 
another occupation, and selective job placement assistance.



Sec.725.711  Requests for referral to vocational rehabilitation assistance.

    Each miner who has been determined entitled to receive benefits 
under part C of title IV of the Act shall be informed by the OWCP of the 
availability and advisability of vocational rehabilitation services. If 
such miner chooses to avail himself or herself of vocational 
rehabilitation, his or her request shall be processed and referred by 
OWCP vocational rehabilitation advisors pursuant to the provisions of 
Sec. Sec.702.501 through 702.508 of this chapter as is appropriate.



PART 726_BLACK LUNG BENEFITS; REQUIREMENTS FOR COAL MINE OPERATOR'S 

INSURANCE--Table of Contents



                            Subpart A_General

Sec.
726.1 Statutory insurance requirements for coal mine operators.
726.2 Purpose and scope of this part.
726.3 Relationship of this part to other parts in this subchapter.
726.4 Who must obtain insurance coverage.
726.5 Effective date of insurance coverage.
726.6 The Office of Workers' Compensation Programs.
726.7 Forms, submission of information.
726.8 Definitions.

                Subpart B_Authorization of Self-Insurers

726.101 Who may be authorized to self-insure.
726.102 Application for authority to become a self-insurer; how filed; 
          information to be submitted.
726.103 Application for authority to self-insure; effect of regulations 
          contained in this part.
726.104 Action by the Office upon application of operator.
726.105 Fixing the amount of security.
726.106 Type of security.
726.107 Deposits of negotiable securities with Federal Reserve banks or 
          the Treasurer of the United States; authority to sell such 
          securities; interest thereon.
726.108 Withdrawal of negotiable securities.
726.109 Increase or reduction in the amount of security.
726.110 Filing of agreement and undertaking.
726.111 Notice of authorization to self-insure.
726.112 Reports required of self-insurer; examination of accounts of 
          self-insurer.
726.113 Disclosure of confidential information.
726.114 Period of authorization as self-insurer; reauthorization.
726.115 Revocation of authorization to self-insure.

                      Subpart C_Insurance Contracts

726.201 Insurance contracts--generally.
726.202 Who may underwrite an operator's liability.
726.203 Federal Coal Mine Health and Safety Act endorsement.
726.204 Statutory policy provisions.
726.205 Other forms of endorsement and policies.
726.206 Terms of policies.
726.207 Discharge by the carrier of obligations and duties of operator.

                           Reports by Carrier

726.208 Report by carrier of issuance of policy or endorsement.
726.209 Report; by whom sent.
726.210 Agreement to be bound by report.
726.211 Name of one employer only shall be given in each report.
726.212 Notice of cancellation.
726.213 Reports by carriers concerning the payment of benefits.

                     Subpart D_Civil Money Penalties

726.300 Purpose and scope.
726.301 Definitions.
726.302 Determination of penalty.
726.303 Notification; investigation.
726.304 Notice of initial assessment.
726.305 Contents of notice.

[[Page 354]]

726.306 Finality of administrative assessment.
726.307 Form of notice of contest and request for hearing.
726.308 Service and computation of time.
726.309 Referral to the Office of Administrative Law Judges.
726.310 Appointment of Administrative Law Judge and notification of 
          hearing date.
726.311 Evidence.
726.312 Burdens of proof.
726.313 Decision and Order of Administrative Law Judge.
726.314 Review by the Secretary.
726.315 Contents.
726.316 Filing and service.
726.317 Discretionary review.
726.318 Final decision of the Secretary.
726.319 Retention of official record.
726.320 Collection and recovery of penalty.

    Authority: 5 U.S.C. 301; 30 U.S.C. 901 et seq., 902(f), 925, 932, 
933, 934, 936; 33 U.S.C. 901 et seq.; Reorganization Plan No. 6 of 1950, 
15 FR 3174; Secretary's Order 10-2009, 74 FR 58834.

    Source: 65 FR 80097, Dec. 20, 2000, unless otherwise noted.



                            Subpart A_General



Sec.726.1  Statutory insurance requirements for coal mine operators.

    Section 423 of title IV of the Federal Coal Mine Health and Safety 
Act as amended (hereinafter the Act) requires each coal mine operator 
who is operating or has operated a coal mine in a State which is not 
included in the list published by the Secretary (see part 722 of this 
subchapter) to secure the payment of benefits for which he may be found 
liable under section 422 of the Act and the provisions of this 
subchapter by either:
    (a) Qualifying as a self-insurer, or
    (b) By subscribing to and maintaining in force a commercial 
insurance contract (including a policy or contract procured from a State 
agency).



Sec.726.2  Purpose and scope of this part.

    (a) This part provides rules directing and controlling the 
circumstances under which a coal mine operator shall fulfill his 
insurance obligations under the Act.
    (b) This Subpart A sets forth the scope and purpose of this part and 
generally describes the statutory framework within which this part is 
operative.
    (c) Subpart B of this part sets forth the criteria a coal mine 
operator must meet in order to qualify as a self-insurer.
    (d) Subpart C of this part sets forth the rules and regulations of 
the Secretary governing contracts of insurance entered into by coal mine 
operators and commercial insurance sources for the payment of black lung 
benefits under part C of the Act.
    (e) Subpart D of this part sets forth the rules governing the 
imposition of civil money penalties on coal mine operators that fail to 
secure their liability under the Act.



Sec.726.3  Relationship of this part to other parts in this subchapter.

    (a) This part 726 implements and effectuates responsibilities for 
the payment of black lung benefits placed upon coal mine operators by 
sections 415 and 422 of the Act and the regulations of the Secretary in 
this subchapter, particularly those set forth in part 725 of this 
subchapter. All definitions, usages, procedures, and other rules 
affecting the responsibilities of coal mine operators prescribed in part 
725 of this subchapter are hereby made applicable, as appropriate, to 
this part 726.
    (b) If the provisions of this part appear to conflict with any 
provision of any other part in this subchapter, the apparently 
conflicting provisions should be read harmoniously to the fullest extent 
possible. If a harmonious interpretation is not possible, the provisions 
of this part should be applied to govern the responsibilities and 
obligations of coal mine operators to secure the payment of black lung 
benefits as prescribed by the Act. The provisions of this part do not 
apply to matters falling outside the scope of this part.



Sec.726.4  Who must obtain insurance coverage.

    (a) Section 423 of part C of title IV of the Act requires each 
operator of a coal mine or former operator in any State which does meet 
the requirements prescribed by the Secretary pursuant to section 411 of 
part C of title IV of the Act to self-insure or obtain a policy or 
contract of insurance to guarantee the

[[Page 355]]

payment of benefits for which such operator may be adjudicated liable 
under section 422 of the Act. In enacting sections 422 and 423 of the 
Act Congress has unambiguously expressed its intent that coal mine 
operators bear the cost of providing the benefits established by part C 
of title IV of the Act. Section 3 of the Act defines an ``operator'' as 
any owner, lessee, or other person who operates, controls, or supervises 
a coal mine.
    (b) Section 422(i) of the Act clearly recognizes that any individual 
or business entity who is or was a coal mine operator may be found 
liable for the payment of pneumoconiosis benefits after December 31, 
1973. Within this framework it is clear that the Secretary has wide 
latitude for determining which operator shall be liable for the payment 
of part C benefits. Comprehensive standards have been promulgated in 
subpart G of part 725 of this subchapter for the purpose of guiding the 
Secretary in making such determination. It must be noted that pursuant 
to these standards any parent or subsidiary corporation, any individual 
or corporate partner, or partnership, any lessee or lessor of a coal 
mine, any joint venture or participant in a joint venture, any 
transferee or transferor of a corporation or other business entity, any 
former, current, or future operator or any other form of business entity 
which has had or will have a substantial and reasonably direct interest 
in the operation of a coal mine may be determined liable for the payment 
of pneumoconiosis benefits after December 31, 1973. The failure of any 
such business entity to self-insure or obtain a policy or contract of 
insurance shall in no way relieve such business entity of its obligation 
to pay pneumoconiosis benefits in respect of any case in which such 
business entity's responsibility for such payments has been properly 
adjudicated. Any business entity described in this section shall take 
appropriate steps to insure that any liability imposed by part C of the 
Act on such business entity shall be dischargeable.



Sec.726.5  Effective date of insurance coverage.

    Pursuant to section 422(c) of part C of title IV of the Act, no coal 
mine operator shall be responsible for the payment of any benefits 
whatsoever for any period prior to January 1, 1974. However, coal mine 
operators shall be liable as of January 1, 1974, for the payment of 
benefits in respect of claims which were filed under section 415 of part 
B of title IV of the Act after July 1, 1973. Section 415(a)(3) requires 
the Secretary to notify any operator who may be liable for the payment 
of benefits under part C of title IV beginning on January 1, 1974, of 
the pendency of a section 415 claim. Section 415(a)(5) declares that any 
operator who has been notified of the pendency of a section 415 claim 
shall be bound by the determination of the Secretary as to such 
operator's liability and as to the claimant's entitlement to benefits as 
if the claim were filed under part C of title IV of the Act and section 
422 thereof had been applicable to such operator. Therefore, even though 
no benefit payments shall be required of an operator prior to January 1, 
1974, the liability for these payments may be finally adjudicated at any 
time after July 1, 1973. Neither the failure of an operator to exercise 
his right to participate in the adjudication of such a claim nor the 
failure of an operator to obtain insurance coverage in respect of claims 
filed after June 30, 1973, but before January 1, 1974, shall excuse such 
operator from his liability for the payment of benefits to such 
claimants under part C of title IV of the Act.



Sec.726.6  The Office of Workers' Compensation Programs.

    The Office of Workers' Compensation Programs (hereinafter the Office 
or OWCP) is that division of the U.S. Department of Labor which has been 
empowered by the Secretary of Labor to carry out his or her functions 
under section 415 and part C of title IV of the Act. As noted throughout 
this part 726 the Office shall perform a number of functions with 
respect to the regulation of both the self-insurance and commercial 
insurance programs. All correspondence with or submissions to the Office 
should be addressed as follows: Division of Coal Mine Workers'

[[Page 356]]

Compensation, Office of Workers' Compensation Programs, U.S. Department 
of Labor, Washington, DC 20210.

[77 FR 37286, June 21, 2012]



Sec.726.7  Forms, submission of information.

    Any information required by this part 726 to be submitted to the 
Office of Workmen's Compensation Programs or any other office or 
official of the Department of Labor, shall be submitted on such forms or 
in such manner as the Secretary deems appropriate and has authorized 
from time to time for such purposes.



Sec.726.8  Definitions.

    In addition to the definitions provided in part 725 of this 
subchapter, the following definitions apply to this part:
    (a) Director means the Director, Office of Workers' Compensation 
Programs, and includes any official of the Office of Workers' 
Compensation Programs authorized by the Director to perform any of the 
functions of the Director under this part and part 725 of this 
subchapter.
    (b) Person includes any individual, partnership, corporation, 
association, business trust, legal representative, or organized group of 
persons.
    (c) Secretary means the Secretary of Labor or such other official as 
the Secretary shall designate to carry out any responsibility under this 
part.
    (d) The terms employ and employment shall be construed as broadly as 
possible, and shall include any relationship under which an operator 
retains the right to direct, control, or supervise the work performed by 
a miner, or any other relationship under which an operator derives a 
benefit from the work performed by a miner. Any individuals who 
participate with one or more persons in the mining of coal, such as 
owners, proprietors, partners, and joint venturers, whether they are 
compensated by wages, salaries, piece rates, shares, profits, or by any 
other means, shall be deemed employees. It is the specific intention of 
this paragraph to disregard any financial arrangement or business entity 
devised by the actual owners or operators of a coal mine or coal mine-
related enterprise to avoid the payment of benefits to miners who, based 
upon the economic reality of their relationship to this enterprise, are, 
in fact, employees of the enterprise.



                Subpart B_Authorization of Self-Insurers



Sec.726.101  Who may be authorized to self-insure.

    (a) Pursuant to section 423 of part C of title IV of the Act, 
authorization to self-insure against liability incurred by coal mine 
operators on account of the total disability or death of miners due to 
pneumoconiosis may be granted or denied in the discretion of the 
Secretary. The provisions of this subpart describe the minimum 
requirements established by the Secretary for determining whether any 
particular coal mine operator shall be authorized as a self-insurer.
    (b) The minimum requirements which must be met by any operator 
seeking authorization to self-insure are as follows:
    (1) The operator must, at the time of application, have been in the 
business of mining coal for at least the 3 consecutive years prior to 
such application; and,
    (2) The operator must demonstrate the administrative capacity to 
fully service such claims as may be filed against him; and,
    (3) The operator's average current assets over the preceding 3 years 
(in computing average current assets such operator shall not include the 
amount of any negotiable securities which he may be required to deposit 
to secure his obligations under the Act) must exceed current liabilities 
by the sum of--
    (i) The estimated aggregate amount of black lung benefits (including 
medical benefits) which such operator may expect to be required to pay 
during the ensuing year; and,
    (ii) The annual premium cost for any indemnity bond purchased; and
    (4) Such operator must obtain security, in a form approved by the 
Office (see Sec.726.104) and in an amount to be determined by the 
Office (see Sec.726.105); and
    (5) No operator with fewer than 5 full-time employee-miners shall be 
permitted to self-insure.

[[Page 357]]

    (c) No operator who is unable to meet the requirements of this 
section should apply for authorization to self-insure and no application 
for self-insurance shall be approved by the Office until such time as 
the amount prescribed by the Office has been secured in accordance with 
this subpart.



Sec.726.102  Application for authority to become a self-insurer; how filed; 

information to be submitted.

    (a) How filed. Application for authority to become a self-insurer 
shall be addressed to the Office and be made on a form provided by the 
Office. Such application shall be signed by the applicant over his 
typewritten name and if the applicant is not an individual, by the 
principal officer of the applicant duly authorized to make such 
application over his typewritten name and official designation and shall 
be sworn to by him. If the applicant is a corporation, the corporate 
seal shall be affixed. The application shall be filed with the Office in 
Washington, D.C.
    (b) Information to be submitted. Each application for authority to 
self-insure shall contain:
    (1) A statement of the employer's payroll report for each of the 
preceding 3 years;
    (2) A statement of the average number of employees engaged in 
employment within the purview of the Act for each of the preceding 3 
years;
    (3) A list of the mine or mines to be covered by any particular 
self-insurance agreement. Each such mine or mines listed shall be 
described by name and reference shall be made to the Federal 
Identification Number assigned such mine by the Bureau of Mines, U.S. 
Department of the Interior;
    (4) A certified itemized statement of the gross and net assets and 
liabilities of the operator for each of the 3 preceding years in such 
manner as prescribed by the Office;
    (5) A statement demonstrating the applicant's administrative 
capacity to provide or procure adequate servicing for a claim including 
both medical and dollar claims; and
    (6) In addition to the aforementioned, the Office may in its 
discretion, require the applicant to submit such further information or 
such evidence as the Office may deem necessary to have in order to 
enable it to give adequate consideration to such application.
    (c) Who may file. An application for authorization to self-insure 
may be filed by any parent or subsidiary corporation, partner or 
partnership, party to a joint venture or joint venture, individual, or 
other business entity which may be determined liable for the payment of 
black lung benefits under part C of title IV of the Act, regardless of 
whether such applicant is directly engaged in the business of mining 
coal. However, in each case for which authorization to self-insure is 
granted, the agreement and undertaking filed pursuant to Sec.726.110 
and the security deposit shall be respectively filed by and deposited in 
the name of the applicant only.



Sec.726.103  Application for authority to self-insure; effect of regulations 

contained in this part.

    As appropriate, each of the regulations, interpretations and 
requirements contained in this part 726 including those described in 
subpart C of this part shall be binding upon each applicant under this 
subpart, and the applicant's consent to be bound by all requirements of 
the said regulations shall be deemed to be included in and a part of the 
application, as fully as though written therein.



Sec.726.104  Action by the Office upon application of operator.

    (a) Upon receipt of a completed application for authorization to 
self-insure, the Office shall, after examination of the information 
contained in the application, either deny the request or determine the 
amount of security which must be given by the applicant to guarantee the 
payment of benefits and the discharge of all other obligations which may 
be required of such applicant under the Act.
    (b) The applicant shall thereafter be notified that he may give 
security in the amount fixed by the Office (see Sec.726.105):
    (1) In the form of an indemnity bond with sureties satisfactory to 
the Office;
    (2) By a deposit of negotiable securities with a Federal Reserve 
Bank in

[[Page 358]]

compliance with Sec. Sec.726.106(c) and 726.107;
    (3) In the form of a letter of credit issued by a financial 
institution satisfactory to the Office (except that a letter of credit 
shall not be sufficient by itself to satisfy a self-insurer's 
obligations under this part); or
    (4) By funding a trust pursuant to section 501(c)(21) of the 
Internal Revenue Code (26 U.S.C.).
    (c) Any applicant who cannot meet the security deposit requirements 
imposed by the Office should proceed to obtain a commercial policy or 
contract of insurance. Any applicant for authorization to self-insure 
whose application has been rejected or who believes that the security 
deposit requirements imposed by the Office are excessive may, in 
writing, request that the Office review its determination. A request for 
review should contain such information as may be necessary to support 
the request that the amount of security required be reduced.
    (d) Upon receipt of any such request, the Office shall review its 
previous determination in light of any new or additional information 
submitted and inform the applicant whether or not a reduction in the 
amount of security initially required is warranted.



Sec.726.105  Fixing the amount of security.

    The Office shall require the amount of security which it deems 
necessary and sufficient to secure the performance by the applicant of 
all obligations imposed upon him as an operator by the Act. In 
determining the amount of security required, the factors that the Office 
will consider include, but are not limited to, the operator's net worth, 
the existence of a guarantee by a parent corporation, and the operator's 
existing liability for benefits. The Office shall also consider such 
other factors as it considers relevant to any particular case. The 
amount of security which shall be required may be increased or decreased 
when experience or changed conditions so warrant.



Sec.726.106  Type of security.

    (a) The Office shall determine the type or types of security which 
an applicant shall or may procure. (See Sec.726.104(b).)
    (b) In the event the indemnity bond option is selected, the bond 
shall be in such form and contain such provisions as the Office may 
prescribe: Provided, That only corporations may act as sureties on such 
indemnity bonds. In each case in which the surety on any such bond is a 
surety company, such company must be one approved by the U.S. Treasury 
Department under the laws of the United States and the applicable rules 
and regulations governing bonding companies (see Department of 
Treasury's Circular--570).
    (c) An applicant for authorization to self-insure based on a deposit 
of negotiable securities, in the amount fixed by the Office, shall 
deposit any negotiable securities acceptable as security for the deposit 
of public moneys of the United States under regulations issued by the 
Secretary of the Treasury. (See 31 CFR part 225.) The approval, 
valuation, acceptance, and custody of such securities is hereby 
committed to the several Federal Reserve Banks and the Treasurer of the 
United States.



Sec.726.107  Deposits of negotiable securities with Federal Reserve banks or 

the Treasurer of the United States; authority to sell such securities; 

interest thereon.

    Deposits of securities provided for by the regulations in this part 
shall be made with any Federal Reserve bank or any branch of a Federal 
Reserve bank designated by the Office, or the Treasurer of the United 
States, and shall be held subject to the order of the Office with power 
in the Office, in its discretion in the event of default by the said 
self-insurer, to collect the interest as it may become due, to sell the 
securities or any of them as may be required to discharge the 
obligations of the self-insurer under the Act and to apply the proceeds 
to the payment of any benefits or medical expenses for which the self-
insurer may be liable. The Office may, however, whenever it deems it 
unnecessary to resort to such securities for the payment of benefits, 
authorize the self-insurer to collect interest on the securities 
deposited by him.

[[Page 359]]



Sec.726.108  Withdrawal of negotiable securities.

    No withdrawal of negotiable securities deposited by a self-insurer, 
shall be made except upon authorization by the Office. A self-insurer 
discontinuing business, or discontinuing operations within the purview 
of the Act, or providing security for the payment of benefits by 
commercial insurance under the provisions of the Act may apply to the 
Office for the withdrawal of securities deposited under the regulations 
in this part. With such application shall be filed a sworn statement 
setting forth:
    (a) A list of all outstanding cases in which benefits are being 
paid, with the names of the miners and other beneficiaries, giving a 
statement of the amounts of benefits paid and the periods for which such 
benefits have been paid; and
    (b) A similar list of all pending cases in which no benefits have as 
yet been paid. In such cases withdrawals may be authorized by the Office 
of such securities as in the opinion of the Office may not be necessary 
to provide adequate security for the payment of outstanding and 
potential liabilities of such self-insurer under the Act.



Sec.726.109  Increase or reduction in the amount of security.

    Whenever in the opinion of the Office the amount of security given 
by the self-insurer is insufficient to afford adequate security for the 
payment of benefits and medical expenses under the Act, the self-insurer 
shall, upon demand by the Office, file such additional security as the 
Office may require. The Office may reduce the amount of security at any 
time on its own initiative, or upon the application of a self-insurer, 
when it believes the facts warrant a reduction. A self-insurer seeking a 
reduction shall furnish such information as the Office may request 
relative to his current affairs, the nature and hazard of the work of 
his employees, the amount of the payroll of his employees engaged in 
coal mine employment within the purview of the Act, his financial 
condition, and such other evidence as may be deemed material, including 
a record of benefit payments he has made.



Sec.726.110  Filing of agreement and undertaking.

    (a) In addition to the requirement that adequate security be 
procured as set forth in this subpart, the applicant for the 
authorization to self-insure shall, as a condition precedent to 
receiving such authorization, execute and file with the Office an 
agreement and undertaking in a form prescribed and provided by the 
Office in which the applicant shall agree:
    (1) To pay when due, as required by the Act, all benefits payable on 
account of total disability or death of any of its employee-miners;
    (2) To furnish medical, surgical, hospital, and other attendance, 
treatment, and care as required by the Act;
    (3) To provide security in a form approved by the Office (see Sec.
726.104) and in an amount established by the Office (see Sec.726.105), 
as elected in the application;
    (4) To authorize the Office to sell any negotiable securities so 
deposited or any part thereof, and to pay from the proceeds thereof such 
benefits, medical, and other expenses and any accrued penalties imposed 
by law as the Office may find to be due and payable.
    (b) When an applicant has provided the requisite security, he shall 
send to the Office in Washington, D.C. a completed agreement and 
undertaking, together with satisfactory proof that his obligations and 
liabilities under the Act have been secured.



Sec.726.111  Notice of authorization to self-insure.

    Upon receipt of a completed agreement and undertaking and 
satisfactory proof that adequate security has been provided, an 
applicant for authorization to self-insure shall be notified by the 
Office in writing that he is authorized to self-insure to meet the 
obligations imposed upon him by section 415 and part C of title IV of 
the Act.



Sec.726.112  Reports required of self-insurer; examination of accounts of 

self-insurer.

    (a) Each operator who has been authorized to self-insure under this 
part shall submit to the Office reports containing such information as 
the Office

[[Page 360]]

may from time to time require or prescribe.
    (b) Whenever it deems it to be necessary, the Office may inspect or 
examine the books of account, records, and other papers of a self-
insurer for the purpose of verifying any financial statement submitted 
to the Office by the self-insurer or verifying any information furnished 
to the Office in any report required by this section, or any other 
section of the regulations in this part, and such self-insurer shall 
permit the Office or its duly authorized representative to make such an 
inspection or examination as the Office shall require. In lieu of this 
requirement the Office may in its discretion accept an adequate report 
of a certified public accountant.
    (c) Failure to submit or make available any report or information 
requested by the Office from an authorized self-insurer pursuant to this 
section may, in appropriate circumstances result in a revocation of the 
authorization to self-insure.



Sec.726.113  Disclosure of confidential information.

    Any financial information or records, or other information relating 
to the business of an authorized self-insurer or applicant for the 
authorization of self-insurance obtained by the Office shall be exempt 
from public disclosure to the extent provided in 5 U.S.C. 552(b) and the 
applicable regulations of the Department of Labor promulgated 
thereunder. (See 29 CFR part 70.)



Sec.726.114  Period of authorization as self-insurer; reauthorization.

    (a) No initial authorization to self-insure shall be granted for a 
period in excess of 18 months. A self-insurer who has made an adequate 
deposit of negotiable securities in compliance with Sec. Sec.
726.106(c) and 726.107 will be reauthorized for the ensuing fiscal year 
without additional security if the Office finds that his experience as a 
self-insurer warrants such action. If the Office determines that such 
self-insurer's experience indicates a need for the deposit of additional 
security, no reauthorization shall be issued for the ensuing fiscal year 
until the Office receives satisfactory proof that the requisite amount 
of additional securities has been deposited. A self-insurer who 
currently has on file an indemnity bond will receive from the Office 
each year a bond form for execution in contemplation of reauthorization, 
and the submission of such bond duly executed in the amount indicated by 
the Office will be deemed and treated as such self-insurer's application 
for reauthorization for the ensuing fiscal year.
    (b) In each case for which there is an approved change in the amount 
of security provided, a new agreement and undertaking shall be executed.
    (c) Each operator authorized to self-insure under this part shall 
apply for reauthorization for any period during which it engages in the 
operation of a coal mine and for additional periods after it ceases 
operating a coal mine. Upon application by the operator, accompanied by 
proof that the security it has posted is sufficient to secure all 
benefits potentially payable to miners formerly employed by the 
operator, the Office shall issue a certification that the operator is 
exempt from the requirements of this part based on its prior operation 
of a coal mine. The provisions of subpart D of this part shall be 
applicable to any operator that fails to apply for reauthorization in 
accordance with the provisions of this section.



Sec.726.115  Revocation of authorization to self-insure.

    The Office may for good cause shown suspend or revoke the 
authorization of any self-insurer. Failure by a self-insurer to comply 
with any provision or requirement of law or of the regulations in this 
part, or with any lawful order or communication of the Office, or the 
failure or insolvency of the surety on his indemnity bond, or impairment 
of financial responsibility of such self-insurer, may be deemed good 
cause for such suspension or revocation.



                      Subpart C_Insurance Contracts



Sec.726.201  Insurance contracts--generally.

    Each operator of a coal mine who has not obtained authorization as a 
self-insurer shall purchase a policy or enter

[[Page 361]]

into a contract with a commercial insurance carrier or State agency. 
Pursuant to authority contained in sections 422(a) and 423(b) and (c) of 
part C of title IV of the Act, this subpart describes a number of 
provisions which are required to be incorporated in a policy or contract 
of insurance obtained by a coal mine operator for the purpose of meeting 
the responsibility imposed upon such operator by the Act in respect of 
the total disability or death of miners due to pneumoconiosis.



Sec.726.202  Who may underwrite an operator's liability.

    Each coal mine operator who is not authorized to self-insure shall 
insure and keep insured the payment of benefits as required by the Act 
with any stock company or mutual company or association, or with any 
other person, or fund, including any State fund while such company, 
association, person, or fund is authorized under the law of any State to 
insure workmen's compensation.



Sec.726.203  Federal Coal Mine Health and Safety Act endorsement.

    (a) The following form of endorsement shall be attached and 
applicable to the standard workmen's compensation and employer's 
liability policy prepared by the National Council on Compensation 
Insurance affording coverage under the Federal Coal Mine Health and 
Safety Act of 1969, as amended:

    It is agreed that: (1) With respect to operations in a State 
designated in item 3 of the declarations, the unqualified term 
``workmen's compensation law'' includes part C of title IV of the 
Federal Coal Mine Health and Safety Act of 1969, 30 U.S.C. section 931-
936, and any laws amendatory thereto, or supplementary thereto, which 
may be or become effective while this policy is in force, and definition 
(a) of Insuring Agreement III is amended accordingly; (2) with respect 
to such insurance as is afforded by this endorsement, (a) the States, if 
any, named below, shall be deemed to be designated in item 3 of the 
declaration; (b) Insuring Agreement IV(2) is amended to read ``by 
disease caused or aggravated by exposure of which the last day of the 
last exposure, in the employment of the insured, to conditions causing 
the disease occurs during the policy period, or occurred prior to 
(effective date) and claim based on such disease is first filed against 
the insured during the policy period.''

    (b) The term ``effective date'' as used in paragraph (a) of this 
section shall be construed to mean the effective date of the first 
policy or contract of insurance procured by an operator for purposes of 
meeting the obligations imposed on such operator by section 423 of part 
C of title IV of the Act.
    (c) The Act contains a number of provisions and imposes a number of 
requirements on operators which differ in varying degrees from 
traditional workmen's compensation concepts. To avoid unnecessary 
administrative delays and expense which might be occasioned by the 
drafting of an entirely new standard workmen's compensation policy 
specially tailored to the Act, the Office has determined that the 
existing standard workmen's compensation policy subject to the 
endorsement provisions contained in paragraph (a) of this section shall 
be acceptable for purposes of writing commercial insurance coverage 
under the Act. However, to avoid undue disputes over the meaning of 
certain policy provisions and in accordance with the authority contained 
in section 423(b)(3) of the Act, the Office has determined that the 
following requirements shall be applicable to all commercial insurance 
policies obtained by an operator for the purpose of insuring any 
liability incurred pursuant to the Act:
    (1) Operator liability. (i) Section 415 and part C of title IV of 
the Act provide coverage for total disability or death due to 
pneumoconiosis to all claimants who meet the eligibility requirements 
imposed by the Act. Section 422 of the Act and the regulations duly 
promulgated thereunder (part 725 of this subchapter) set forth the 
conditions under which a coal mine operator may be adjudicated liable 
for the payment of benefits to an eligible claimant for any period 
subsequent to December 31, 1973.
    (ii) Section 422(c) of the Act prescribes that except as provided in 
422(i) (see paragraph (c)(2) of this section) an operator may be 
adjudicated liable for the payment of benefits in any case if the total 
disability or death due to pneumoconiosis upon which the claim is 
predicated arose at least in part out

[[Page 362]]

of employment in a mine in any period during which it was operated by 
such operator. The Act does not require that such employment which 
contributed to or caused the total disability or death due to 
pneumoconiosis occur subsequent to any particular date in time. The 
Secretary in establishing a formula for determining the operator liable 
for the payment of benefits (see subpart D of part 725 of this 
subchapter) in respect of any particular claim, must therefore, within 
the framework and intent of title IV of the Act find in appropriate 
cases that an operator is liable for the payment of benefits for some 
period after December 31, 1973, even though the employment upon which an 
operator's liability is based occurred prior to July 1, 1973, or prior 
to the effective date of the Act or the effective date of any amendments 
thereto, or prior to the effective date of any policy or contract of 
insurance obtained by such operator. The endorsement provisions 
contained in paragraph (a) of this section shall be construed to 
incorporate these requirements in any policy or contract of insurance 
obtained by an operator to meet the obligations imposed on such operator 
by section 423 of the Act.
    (2) Successor liability. Section 422(i) of part C of title IV of the 
Act requires that a coal mine operator who after December 30, 1969, 
acquired his mine or substantially all of the assets thereof from a 
person who was an operator of such mine on or after December 30, 1969, 
shall be liable for and shall secure the payment of benefits which would 
have been payable by the prior operator with respect to miners 
previously employed in such mine if the acquisition had not occurred and 
the prior operator had continued to operate such mine. In the case of an 
operator who is determined liable for the payment of benefits under 
section 422(i) of the Act and part 725 of this subchapter, such 
liability shall accrue to such operator regardless of the fact that the 
miner on whose total disability or death the claim is predicated was 
never employed by such operator in any capacity. The endorsement 
provisions contained in paragraph (a) of this section shall be construed 
to incorporate this requirement in any policy or contract of insurance 
obtained by an operator to meet the obligations imposed on such operator 
by section 423 of the Act.
    (3) Medical eligibility. Pursuant to section 422(h) of part C of 
title IV of the Act and the regulations described therein (see subpart D 
of part 410 of this title) benefits shall be paid to eligible claimants 
on account of total disability or death due to pneumoconiosis and in 
cases where the miner on whose death a claim is predicated was totally 
disabled by pneumoconiosis at the time of his death regardless of the 
cause of such death. The endorsement provisions contained in paragraph 
(a) of this section shall be construed to incorporate these requirements 
in any policy or contract of insurance obtained by an operator to meet 
the obligations imposed on such operator by section 423 of the Act.
    (4) Payment of benefits, rates. Section 422(c) of the Act by 
incorporating section 412(a) of the Act requires the payment of benefits 
at a rate equal to 50 per centum of the minimum monthly payment to which 
a Federal employee in grade GS-2, who is totally disabled is entitled at 
the time of payment under Chapter 81 of title 5, United States Code. 
These benefits are augmented on account of eligible dependents as 
appropriate (see section 412(a) of part B of title IV of the Act). Since 
the dollar amount of benefits payable to any beneficiary is required to 
be computed at the time of payment such amounts may be expected to 
increase from time to time as changes in the GS-2 grade are enacted into 
law. The endorsement provisions contained in paragraph (a) of this 
section shall be construed to incorporate in any policy or contract of 
insurance obtained by an operator to meet the obligations imposed on 
such operator by section 423 of the Act, the requirement that the 
payment of benefits to eligible beneficiaries shall be made in such 
dollar amounts as are prescribed by section 412(a) of the Act computed 
at the time of payment.
    (5) Compromise and waiver of benefits. Section 422(a) of part C of 
title IV of the Act by incorporating sections 15(b) and 16 of the 
Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 915(b) 
and 916) prohibits the

[[Page 363]]

compromise and/or waiver of claims for benefits filed or benefits 
payable under section 415 and part C of title IV of the Act. The 
endorsement provisions contained in paragraph (a) of this section shall 
be construed to incorporate these prohibitions in any policy or contract 
of insurance obtained by an operator to meet the obligations imposed on 
such operator by section 423 of the Act.
    (6) Additional requirements. In addition to the requirements 
described in paragraph (c)(1) through (5) of this section, the 
endorsement provisions contained in paragraph (a) of this section shall, 
to the fullest extent possible, be construed to bring any policy or 
contract of insurance entered into by an operator for the purpose of 
insuring such operator's liability under part C of title IV of the Act 
into conformity with the legal requirements placed upon such operator by 
section 415 and part C of title IV of the Act and parts 720 and 725 of 
this subchapter.
    (d) Nothing in this section shall relieve any operator or carrier of 
the duty to comply with any State workmen's compensation law, except 
insofar as such State law is in conflict with the provisions of this 
section.



Sec.726.204  Statutory policy provisions.

    Pursuant to section 423(b) of part C of title IV of the Act each 
policy or contract of insurance obtained to comply with the requirements 
of section 423(a) of the Act must contain or shall be construed to 
contain--
    (a) A provision to pay benefits required under section 422 of the 
Act, notwithstanding the provisions of the State workmen's compensation 
law which may provide for lesser payments; and,
    (b) A provision that insolvency or bankruptcy of the operator or 
discharge therein (or both) shall not relieve the carrier from liability 
for such payments.



Sec.726.205  Other forms of endorsement and policies.

    Forms of endorsement or policies other than that described in Sec.
726.203 may be entered into by operators to insure their liability under 
the Act. However, any form of endorsement or policy which materially 
alters or attempts to materially alter an operator's liability for the 
payment of any benefits under the Act shall be deemed insufficient to 
discharge such operator's duties and responsibilities as prescribed in 
part C of title IV of the Act. In any event, the failure of an operator 
to obtain an adequate policy or contract of insurance shall not affect 
such operator's liability for the payment of any benefits for which he 
is determined liable.



Sec.726.206  Terms of policies.

    A policy or contract of insurance shall be issued for the term of 1 
year from the date that it becomes effective, but if such insurance be 
not needed except for a particular contract or operation, the term of 
the policy may be limited to the period of such contract or operation.



Sec.726.207  Discharge by the carrier of obligations and duties of operator.

    Every obligation and duty in respect of payment of benefits, the 
providing of medical and other treatment and care, the payment or 
furnishing of any other benefit required by the Act and in respect of 
the carrying out of the administrative procedure required or imposed by 
the Act or the regulations in this part or part 725 of this subchapter 
upon an operator shall be discharged and carried out by the carrier as 
appropriate. Notice to or knowledge of an operator of the occurrence of 
total disability or death due to pneumoconiosis shall be notice to or 
knowledge of such carrier. Jurisdiction of the operator by a district 
director, administrative law judge, the Office, or appropriate appellate 
authority under the Act shall be jurisdiction of such carrier. Any 
requirement under any benefits order, finding, or decision shall be 
binding upon such carrier in the same manner and to the same extent as 
upon the operator.

                           Reports by Carrier



Sec.726.208  Report by carrier of issuance of policy or endorsement.

    Each carrier shall report to the Office each policy and endorsement 
issued, canceled, or renewed by it to an operator. The report shall be 
made in

[[Page 364]]

such manner and on such form as the Office may require.



Sec.726.209  Report; by whom sent.

    The report of issuance, cancellation, or renewal of a policy and 
endorsement provided for in Sec.726.208 shall be sent by the home 
office of the carrier, except that any carrier may authorize its agency 
or agencies to make such reports to the Office.



Sec.726.210  Agreement to be bound by report.

    Every carrier seeking to write insurance under the provisions of the 
Act shall be deemed to have agreed that the acceptance by the Office of 
a report of the issuance or renewal of a policy of insurance, as 
provided for by Sec.726.208 shall bind the carrier to full liability 
for the obligations under the Act of the operator named in said report. 
It shall be no defense to this agreement that the carrier failed or 
delayed to issue, cancel, or renew the policy to the operator covered by 
this report.



Sec.726.211  Name of one employer only shall be given in each report.

    A separate report of the issuance or renewal of a policy and 
endorsement, provided for by Sec.726.208, shall be made for each 
operator covered by a policy. If a policy is issued or renewed insuring 
more than one operator, a separate report for each operator so covered 
shall be sent to the Office with the name of only one operator on each 
such report.



Sec.726.212  Notice of cancellation.

    Cancellation of a contract or policy of insurance issued under 
authority of the Act shall not become effective otherwise than as 
provided by 33 U.S.C. 936(b); and notice of a proposed cancellation 
shall be given to the Office and to the operator in accordance with the 
provisions of 33 U.S.C. 912(c), 30 days before such cancellation is 
intended to be effective (see section 422(a) of part C of title IV of 
the Act).



Sec.726.213  Reports by carriers concerning the payment of benefits.

    Pursuant to 33 U.S.C. 914(c) as incorporated by section 422(a) of 
part C of title IV of the Act and Sec.726.207 each carrier issuing a 
policy or contract of insurance under the Act shall upon making the 
first payment of benefits and upon the suspension of any payment in any 
case, immediately notify the Office in accordance with a form prescribed 
by the Office that payment of benefit has begun or has been suspended as 
the case may be. In addition, each such carrier shall at the request of 
the Office submit to the Office such additional information concerning 
policies or contracts of insurance issued to guarantee the payment of 
benefits under the Act and any benefits paid thereunder, as the Office 
may from time to time require to carry out its responsibilities under 
the Act.



                     Subpart D_Civil Money Penalties



Sec.726.300  Purpose and scope.

    Any operator which is required to secure the payment of benefits 
under section 423 of the Act and Sec.726.4 and which fails to secure 
such benefits, shall be subject to a civil penalty of not more than 
$1,000 for each day during which such failure occurs. If the operator is 
a corporation, the president, secretary, and treasurer of the operator 
shall also be severally liable for the penalty based on the operator's 
failure to secure the payment of benefits. This subpart defines those 
terms necessary for administration of the civil money penalty 
provisions, describes the criteria for determining the amount of penalty 
to be assessed, and sets forth applicable procedures for the assessment 
and contest of penalties.



Sec.726.301  Definitions.

    In addition to the definitions provided in part 725 of this 
subchapter and Sec.726.8, the following definitions apply to this 
subpart:
    (a) Division Director means the Director, Division of Coal Mine 
Workers' Compensation, Office of Workers' Compensation Programs, or such 
other official authorized by the Division Director to perform any of the 
functions of the Division Director under this subpart.
    (b) President, secretary, or treasurer means the officers of a 
corporation as designated pursuant to the laws and regulations of the 
state in which the corporation is incorporated or, if that

[[Page 365]]

state does not require the designation of such officers, the employees 
of a company who are performing the work usually performed by such 
officers in the state in which the corporation's principal place of 
business is located.
    (c) Principal means any person who has an ownership interest in an 
operator that is not a corporation, and shall include, but is not 
limited to, partners, sole proprietors, and any other person who 
exercises control over the operation of a coal mine.

[65 FR 80097, Dec. 20, 2000, as amended at 77 FR 37287, June 21, 2012]



Sec.726.302  Determination of penalty.

    (a) The following method shall be used for determining the amount of 
any penalty assessed under this subpart.
    (b) The penalty shall be determined by multiplying the daily base 
penalty amount or amounts, determined in accordance with the formula set 
forth in this section, by the number of days in the period during which 
the operator is subject to the security requirements of section 423 of 
the Act and Sec.726.4, and fails to secure its obligations under the 
Act. The period during which an operator is subject to liability for a 
penalty for failure to secure its obligations shall be deemed to 
commence on the first day on which the operator met the definition of 
the term ``operator'' as set forth in Sec.725.101 of this subchapter. 
The period shall be deemed to continue even where the operator has 
ceased coal mining and any related activity, unless the operator secured 
its liability for all previous periods through a policy or policies of 
insurance obtained in accordance with subpart C of this part or has 
obtained a certification of exemption in accordance with the provisions 
of Sec.726.114.
    (c)(1) A daily base penalty amount shall be determined for all 
periods up to and including the 10th day after the operator's receipt of 
the notification sent by the Director pursuant to Sec.726.303, during 
which the operator failed to secure its obligations under section 423 of 
the Act and Sec.726.4.
    (2)(i) The daily base penalty amount shall be determined based on 
the number of persons employed in coal mine employment by the operator, 
or engaged in coal mine employment on behalf of the operator, on each 
day of the period defined by this section, and shall be computed as 
follows:

------------------------------------------------------------------------
                                                               Penalty
                         Employees                            (per day)
------------------------------------------------------------------------
Less than 25...............................................         $100
25-50......................................................          200
51-100.....................................................          300
More than 100..............................................          400
------------------------------------------------------------------------

    (ii) For any period after the operator has ceased coal mining and 
any related activity, the daily penalty amount shall be computed based 
on the largest number of persons employed in coal mine employment by the 
operator, or engaged in coal mine employment on behalf of the operator, 
on any day while the operator was engaged in coal mining or any related 
activity. For purposes of this section, it shall be presumed, in the 
absence of evidence to the contrary, that any person employed by an 
operator is employed in coal mine employment.
    (3) In any case in which the operator had prior notice of the 
applicability of the Black Lung Benefits Act to its operations, the 
daily base penalty amounts set forth in paragraph (c)(2)(i) of this 
section shall be doubled. Prior notice may be inferred where the 
operator, or an entity in which the operator or any of its principals 
had an ownership interest, or an entity in which the operator's 
president, secretary, or treasurer were employed:
    (i) Previously complied with section 423 of the Act and Sec.726.4;
    (ii) Was notified of its obligation to comply with section 423 of 
the Act and Sec.726.4; or
    (iii) Was notified of its potential liability for a claim filed 
under the Black Lung Benefits Act pursuant to Sec.725.407 of this 
subchapter.
    (4) Commencing with the 11th day after the operator's receipt of the 
notification sent by the Director pursuant to Sec.726.303, the daily 
base penalty amounts set forth in paragraph (c)(2)(i) shall be increased 
by $100.
    (5) In any case in which the operator, or any of its principals, or 
an entity in which the operator's president, secretary, or treasurer 
were employed, has been the subject of a previous penalty assessment 
under this part, the daily

[[Page 366]]

base penalty amounts shall be increased by $300, up to a maximum daily 
base penalty amount of $1,000. The maximum daily base penalty amount 
applicable to any violation of Sec.726.4 that takes place after 
January 19, 2001 shall be $1,100.
    (d) The penalty shall be subject to reduction for any period during 
which the operator had a reasonable belief that it was not required to 
comply with section 423 of the Act and Sec.726.4 or a reasonable 
belief that it had obtained insurance coverage to comply with section 
423 of the Act and Sec.726.4. A notice of contest filed in accordance 
with Sec.726.307 shall not be sufficient to establish a reasonable 
belief that the operator was not required to comply with the Act and 
regulations.



Sec.726.303  Notification; investigation.

    (a) If the Director determines that an operator has violated the 
provisions of section 423 of the Act and Sec.726.4, he or she shall 
notify the operator of its violation and request that the operator 
immediately secure the payment of benefits. Such notice shall be sent by 
certified mail.
    (b) The Director shall also direct the operator to supply 
information relevant to the assessment of a penalty. Such information, 
which shall be supplied within 30 days of the Director's request, may 
include:
    (1) The date on which the operator commenced its operation of a coal 
mine;
    (2) The number of persons employed by the operator since it began 
operating a coal mine and the dates of their employment; and
    (3) The identity and last known address:
    (i) In the case of a corporation, of all persons who served as 
president, secretary, and treasurer of the operator since it began 
operating a coal mine; or
    (ii) In the case of an operator which is not incorporated, of all 
persons who were principals of the operator since it began operating a 
coal mine;
    (c) In conducting any investigation of an operator under this 
subpart, the Division Director shall have all of the powers of a 
district director, as set forth at Sec.725.351(a) of this subchapter. 
For purposes of Sec.725.351(c), the Division Director shall be 
considered to sit in the District of Columbia.



Sec.726.304  Notice of initial assessment.

    (a) After an operator receives notification under Sec.726.303 and 
fails to secure its obligations for the period defined in Sec.
726.302(b), and following the completion of any investigation, the 
Director may issue a notice of initial penalty assessment in accordance 
with the criteria set forth in Sec.726.302.
    (b)(1) A copy of such notice shall be sent by certified mail to the 
operator. If the operator is a corporation, a copy shall also be sent by 
certified mail to each of the persons who served as president, 
secretary, or treasurer of the operator during any period in which the 
operator was in violation of section 423 of the Act and Sec.726.4.
    (2) Where service by certified mail is not accepted by any person, 
the notice shall be deemed received by that person on the date of 
attempted delivery. Where service is not accepted, the Director may 
exercise discretion to serve the notice by regular mail.



Sec.726.305  Contents of notice.

    The notice required by Sec.726.304 shall:
    (a) Identify the operator against whom the penalty is assessed, as 
well as the name of any other person severally liable for such penalty;
    (b) Set forth the determination of the Director as to the amount of 
the penalty and the reason or reasons therefor;
    (c) Set forth the right of each person identified in paragraph (a) 
of this section to contest the notice and request a hearing before the 
Office of Administrative Law Judges;
    (d) Set forth the method for each person identified in paragraph (a) 
to contest the notice and request a hearing before the Office of 
Administrative Law Judges; and
    (e) Inform any affected person that in the absence of a timely 
contest and request for hearing received within 30 days of the date of 
receipt of the notice, the Director's assessment will become final and 
unappealable as to that person.

[[Page 367]]



Sec.726.306  Finality of administrative assessment.

    Except as provided in Sec.726.307(c), if any person identified as 
potentially liable for the assessment does not, within 30 days after 
receipt of notice, contest the assessment, the Director's assessment 
shall be deemed final as to that person, and collection and recovery of 
the penalty may be instituted pursuant to Sec.726.320.



Sec.726.307  Form of notice of contest and request for hearing.

    (a) Any person desiring to contest the Director's notice of initial 
assessment shall request an administrative hearing pursuant to this 
part. The notice of contest shall be made in writing to the Director, 
Division of Coal Mine Workers' Compensation, Office of Workers' 
Compensation Programs, United States Department of Labor. The notice of 
contest must be received no later than 30 days after the date of receipt 
of the notice issued under Sec.726.304. No additional time shall be 
added where service of the notice is made by mail.
    (b) The notice of contest shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) State the specific issues to be contested. In particular, the 
person must indicate his agreement or disagreement with:
    (i) The Director's determination that the person against whom the 
penalty is assessed is an operator subject to the requirements of 
section 423 of the Act and Sec.726.4, or is the president, secretary, 
or treasurer of an operator, if the operator is a corporation.
    (ii) The Director's determination that the operator violated section 
423 of the Act and Sec.726.4 for the time period in question; and
    (iii) The Director's determination of the amount of penalty owed;
    (4) Be signed by the person making the request or an authorized 
representative of such person; and
    (5) Include the address at which such person or authorized 
representative desires to receive further communications relating 
thereto.
    (c) A notice of contest filed by the operator shall be deemed a 
notice of contest on behalf of all other persons to the Director's 
determinations that the operator is subject to section 423 of the Act 
and Sec.726.4 and that the operator violated those provisions for the 
time period in question, and to the Director's determination of the 
amount of penalty owed. An operator may not contest the Director's 
determination that a person against whom the penalty is assessed is the 
president, secretary, or treasurer of the operator.
    (d) Failure to specifically identify an issue as contested pursuant 
to paragraph (b)(3) of this section shall be deemed a waiver of the 
right to contest that issue.

[65 FR 80097, Dec. 20, 2000, as amended at 77 FR 37287, June 21, 2012]



Sec.726.308  Service and computation of time.

    (a) Service of documents under this part shall be made by delivery 
to the person, an officer of a corporation, or attorney of record, or by 
mailing the document to the last known address of the person, officer, 
or attorney. If service is made by mail, it shall be considered complete 
upon mailing. Unless otherwise provided in this subpart, service need 
not be made by certified mail. If service is made by delivery, it shall 
be considered complete upon actual receipt by the person, officer, or 
attorney; upon leaving it at the person's, officer's or attorney's 
office with a clerk or person in charge; upon leaving it at a 
conspicuous place in the office if no one is in charge; or by leaving it 
at the person's or attorney's residence.
    (b) If a complaint has been filed pursuant to Sec.726.309, two 
copies of all documents filed in any administrative proceeding under 
this subpart shall be served on the attorneys for the Department of 
Labor. One copy shall be served on the Associate Solicitor, Black Lung 
Benefits Division, Room N-2117, Office of the Solicitor, U.S. Department 
of Labor, 200 Constitution Ave., NW., Washington, DC 20210, and one copy 
on the attorney representing the Department in the proceeding.
    (c) The time allowed a party to file any response under this subpart 
shall be computed beginning with the day following the action requiring 
a response, and shall include the last day

[[Page 368]]

of the period, unless it is a Saturday, Sunday, or federally-observed 
holiday, see Sec.725.311 of Part 725 of this subchapter, in which case 
the time period shall include the next business day.



Sec.726.309  Referral to the Office of Administrative Law Judges.

    (a) Upon receipt of a timely notice of contest filed in accordance 
with Sec.726.307, the Director, by the Associate Solicitor for Black 
Lung Benefits or the Regional Solicitor for the Region in which the 
violation occurred, may file a complaint with the Office of 
Administrative Law Judges. The Director may, in the complaint, reduce 
the total penalty amount requested. A copy of the notice of initial 
assessment issued by the Director and all notices of contest filed in 
accordance with Sec.726.307 shall be attached. A notice of contest 
shall be given the effect of an answer to the complaint for purposes of 
the administrative proceeding, subject to any amendment that may be 
permitted under this subpart and 29 CFR part 18.
    (b) A copy of the complaint and attachments thereto shall be served 
by counsel for the Director on the person who filed the notice of 
contest.
    (c) The Director, by counsel, may withdraw a complaint filed under 
this section at any time prior to the date upon which the decision of 
the Department becomes final by filing a motion with the Office of 
Administrative Law Judges or the Secretary, as appropriate. If the 
Director makes such a motion prior to the date on which an 
administrative law judge renders a decision in accordance Sec.726.313, 
the dismissal shall be without prejudice to further assessment against 
the operator for the period in question.



Sec.726.310  Appointment of Administrative Law Judge and notification of 

hearing date.

    Upon receipt from the Director of a complaint filed pursuant to 
Sec.726.309, the Chief Administrative Law Judge shall appoint an 
Administrative Law Judge to hear the case. The Administrative Law Judge 
shall notify all interested parties of the time and place of the 
hearing.



Sec.726.311  Evidence.

    (a) Except as specifically provided in this subpart, and to the 
extent they do not conflict with the provisions of this subpart, the 
Rules of Practice and Procedure for Administrative Hearings Before the 
Office of Administrative Law Judges established by the Secretary at 29 
CFR part 18 shall apply to administrative proceedings under this 
subpart.
    (b) Notwithstanding 29 CFR 18.1101(b)(2), subpart B of the Rules of 
Practice and Procedure for Administrative Hearings Before the Office of 
Administrative Law Judges shall apply to administrative proceedings 
under this part, except that documents contained in Department of Labor 
files and offered on behalf of the Director shall be admissible in 
proceedings under this subpart without regard to their compliance with 
the Rules of Practice and Procedure.



Sec.726.312  Burdens of proof.

    (a) The Director shall bear the burden of proving the existence of a 
violation, and the time period for which the violation occurred. To 
prove a violation, the Director must establish:
    (1) That the person against whom the penalty is assessed is an 
operator, or is the president, secretary, or treasurer of an operator, 
if such operator is a corporation.
    (2) That the operator violated section 423 of the Act and Sec.
726.4. The filing of a complaint shall be considered prima facie 
evidence that the Director has searched the records maintained by OWCP 
and has determined that the operator was not authorized to self-insure 
its liability under the Act for the time period in question, and that no 
insurance carrier reported coverage of the operator for the time period 
in question.
    (b) The Director need not produce further evidence in support of his 
burden of proof with respect to the issues set forth in paragraph (a) if 
no party contested them pursuant to Sec.726.307(b)(3).
    (c) The Director shall bear the burden of proving the size of the 
operator as required by Sec.726.302, except that if the Director has 
requested the operator to supply information with respect to its size 
under Sec.726.303 and the operator

[[Page 369]]

has not fully complied with that request, it shall be presumed that the 
operator has more than 100 employees engaged in coal mine employment. 
The person or persons liable for the assessment shall thereafter bear 
the burden of proving the actual number of employees engaged in coal 
mine employment.
    (d) The Director shall bear the burden of proving the operator's 
receipt of the notification required by Sec.726.303, the operator's 
prior notice of the applicability of the Black Lung Benefits Act to its 
operations, and the existence of any previous assessment against the 
operator, the operator's principals, or the operator's officers.
    (e) The person or persons liable for an assessment shall bear the 
burden of proving the applicability of the mitigating factors listed in 
Sec.726.302(d).



Sec.726.313  Decision and order of Administrative Law Judge.

    (a) The Administrative Law Judge shall render a decision on the 
issues referred by the Director.
    (b) The decision of the Administrative Law Judge shall be limited to 
determining, where such issues are properly before him or her:
    (1) Whether the operator has violated section 423 of the Act and 
Sec.726.4;
    (2) Whether other persons identified by the Director as potentially 
severally liable for the penalty were the president, treasurer, or 
secretary of the corporation during the time period in question; and
    (3) The appropriateness of the penalty assessed by the Director in 
light of the factors set forth in Sec.726.302. The Administrative Law 
Judge shall not render determinations on the legality of a regulatory 
provision or the constitutionality of a statutory provision.
    (c) The decision of the Administrative Law Judge shall include a 
statement of findings and conclusions, with reasons and bases therefor, 
upon each material issue presented on the record. The decision shall 
also include an appropriate order which may affirm, reverse, or modify, 
in whole or in part, the determination of the Director.
    (d) The Administrative Law Judge shall serve copies of the decision 
on each of the parties by certified mail.
    (e) The decision of the Administrative Law Judge shall be deemed to 
have been issued on the date that it is rendered, and shall constitute 
the final order of the Secretary unless there is a request for 
reconsideration by the Administrative Law Judge pursuant to paragraph 
(f) of this section or a petition for review filed pursuant to Sec.
726.314.
    (f) Any party may request that the Administrative Law Judge 
reconsider his or her decision by filing a motion within 30 days of the 
date upon which the decision of the Administrative Law Judge is issued. 
A timely motion for reconsideration shall suspend the running of the 
time for any party to file a petition for review pursuant to Sec.
726.314.
    (g) Following issuance of the decision and order, the Chief 
Administrative Law Judge shall promptly forward the complete hearing 
record to the Director.



Sec.726.314  Review by the Secretary.

    (a) The Director or any party aggrieved by a decision of the 
Administrative Law Judge may petition the Secretary for review of the 
decision by filing a petition within 30 days of the date on which the 
decision was issued. Any other party may file a cross-petition for 
review within 15 days of its receipt of a petition for review or within 
30 days of the date on which the decision was issued, whichever is 
later. Copies of any petition or cross-petition shall be served on all 
parties and on the Chief Administrative Law Judge.
    (b) A petition filed by one party shall not affect the finality of 
the decision with respect to other parties.
    (c) If any party files a timely motion for reconsideration, any 
petition for review, whether filed prior to or subsequent to the filing 
of the timely motion for reconsideration, shall be dismissed without 
prejudice as premature. The 30-day time limit for filing a petition for 
review by any party shall commence upon issuance of a decision on 
reconsideration.



Sec.726.315  Contents.

    Any petition or cross-petition for review shall:
    (a) Be dated;

[[Page 370]]

    (b) Be typewritten or legibly written;
    (c) State the specific reason or reasons why the party petitioning 
for review believes the Administrative Law Judge's decision is in error;
    (d) Be signed by the party filing the petition or an authorized 
representative of such party; and
    (e) Attach copies of the Administrative Law Judge's decision and any 
other documents admitted into the record by the Administrative Law Judge 
which would assist the Secretary in determining whether review is 
warranted.



Sec.726.316  Filing and service.

    (a) Filing. All documents submitted to the Secretary shall be filed 
with the Secretary of Labor, U.S. Department of Labor, 200 Constitution 
Ave., N.W., Washington, DC 20210.
    (b) Number of copies. An original and four copies of all documents 
shall be filed.
    (c) Computation of time for delivery by mail. Documents are not 
deemed filed with the Secretary until actually received by the Secretary 
either on or before the due date. No additional time shall be added 
where service of a document requiring action within a prescribed time 
was made by mail.
    (d) Manner and proof of service. A copy of each document filed with 
the Secretary shall be served upon all other parties involved in the 
proceeding. Service under this section shall be by personal delivery or 
by mail. Service by mail is deemed effected at the time of mailing to 
the last known address.



Sec.726.317  Discretionary review.

    (a) Following receipt of a timely petition for review, the Secretary 
shall determine whether the decision warrants review, and shall send a 
notice of such determination to the parties and the Chief Administrative 
Law Judge. If the Secretary declines to review the decision, the 
Administrative Law Judge's decision shall be considered the final 
decision of the agency. The Secretary's determination to review a 
decision by an Administrative Law Judge under this subpart is solely 
within the discretion of the Secretary.
    (b) The Secretary's notice shall specify:
    (1) The issue or issues to be reviewed; and
    (2) The schedule for submitting arguments, in the form of briefs or 
such other pleadings as the Secretary deems appropriate.
    (c) Upon receipt of the Secretary's notice, the Director shall 
forward the record to the Secretary.



Sec.726.318  Final decision of the Secretary.

    The Secretary's review shall be based upon the hearing record. The 
findings of fact in the decision under review shall be conclusive if 
supported by substantial evidence in the record as a whole. The 
Secretary's review of conclusions of law shall be de novo. Upon review 
of the decision, the Secretary may affirm, reverse, modify, or vacate 
the decision, and may remand the case to the Office of Administrative 
Law Judges for further proceedings. The Secretary's final decision shall 
be served upon all parties and the Chief Administrative Law Judge, in 
person or by mail to the last known address.



Sec.726.319  Retention of official record.

    The official record of every completed administrative hearing held 
pursuant to this part shall be maintained and filed under the custody 
and control of the Director.



Sec.726.320  Collection and recovery of penalty.

    (a) When the determination of the amount of any civil money penalty 
provided for in this part becomes final, in accordance with the 
administrative assessment thereof, or pursuant to the decision and order 
of an Administrative Law Judge, or following the decision of the 
Secretary, the amount of the penalty as thus determined is immediately 
due and payable to the U.S. Department of Labor on behalf of the Black 
Lung Disability Trust Fund. The person against whom such penalty has 
been assessed or imposed shall promptly remit the amount thereof, as 
finally determined, to the Secretary by certified check or by money 
order, made payable to the order of U.S. Department of Labor, Black Lung 
Program. Such remittance shall be delivered or mailed to the Director.

[[Page 371]]

    (b) If such remittance is not received within 30 days after it 
becomes due and payable, it may be recovered in a civil action brought 
by the Secretary in any court of competent jurisdiction, in which 
litigation the Secretary shall be represented by the Solicitor of Labor.

                        PARTS 727-799 [RESERVED]

[[Page 373]]



         CHAPTER VII--BENEFITS REVIEW BOARD, DEPARTMENT OF LABOR




  --------------------------------------------------------------------
Part                                                                Page
800

[Reserved]

801             Establishment and operation of the Board....         375
802             Rules of practice and procedure.............         378
803-899         [Reserved]

[[Page 375]]

                           PART 800 [RESERVED]



PART 801_ESTABLISHMENT AND OPERATION OF THE BOARD--Table of Contents



                              Introductory

Sec.
801.1 Purpose and scope of this part.
801.2 Definitions and use of terms.
801.3 Applicability of this part to 20 CFR part 802.

                Establishment and Authority of the Board

801.101 Establishment.
801.102 Review authority.
801.103 Organizational placement.
801.104 Operational rules.

                          Members of the Board

801.201 Composition of the Board.
801.202 Interim appointments.
801.203 Disqualification of Board members.

                           Action by the Board

801.301 Quorum and votes of the permanent Board; panels within the 
          Board.
801.302 Procedural rules.
801.303 Location of Board's proceedings.
801.304 Business hours.

                             Representation

801.401 Representation before the Board.
801.402 Representation of Board in court proceedings.

    Authority: 5 U.S.C. 301; 30 U.S.C. 901 et seq.; 33 U.S.C. 901 et 
seq.; Reorganization Plan No. 6 of 1950, 15 FR 3174; Secretary of 
Labor's Order 38-72, 38 FR 90, January 3, 1973.

    Source: 52 FR 27290, July 20, 1987, unless otherwise noted.

                              Introductory



Sec.801.1  Purpose and scope of this part.

    This part 801 describes the establishment and the organizational 
structure of the Benefits Review Board of the Department of Labor, sets 
forth the general rules applicable to operation of the Board, and 
defines terms used in this chapter.



Sec.801.2  Definitions and use of terms.

    (a) For purposes of this chapter, except where the content clearly 
indicates otherwise, the following definitions apply:
    (1) Acts means the several Acts listed in Sec. Sec.801.102 and 
802.101 of this chapter, as amended and extended, unless otherwise 
specified.
    (2) Board means the Benefits Review Board established by section 21 
of the LHWCA (33 U.S.C. 921) as described in Sec.801.101, and as 
provided in this part and Secretary of Labor's Order No. 38-72 (38 FR 
90). Mention in these regulations of the ``permanent Board'' refers to 
the five permanent Board members only.
    (3) Chairman or Chairman of the Board means Chairman of the Benefits 
Review Board. The Chairman of the Board is officially entitled Chief 
Administrative Appeals Judge.
    (4) Secretary means the Secretary of Labor.
    (5) Department means the Department of Labor.
    (6) Judge means an administrative law judge appointed as provided in 
5 U.S.C. 3105 and subpart B of 5 CFR part 930, who is qualified to 
preside at hearings under 5 U.S.C. 557 and is empowered by the Secretary 
to conduct formal hearings whenever necessary in respect of any claim 
for benefits or compensation arising under the Acts.
    (7) Chief Administrative Law Judge means the Chief Administrative 
Law Judge of the Department of Labor.
    (8) Director means the Director of the Office of Workers' 
Compensation Programs of the Department of Labor (hereinafter OWCP).
    (9) Deputy commissioner means a person appointed as provided in 
sections 39 and 40 of the LHWCA or his designee, authorized by the 
Director to make decisions and orders in respect to claims arising under 
the Acts.
    (10) Party or Party in Interest means the Secretary or his designee 
and any person or business entity directly affected by the decision or 
order from which an appeal to the Board is taken.
    (11) Day means calendar day.
    (12) Member means a member of the Benefits Review Board. Unless 
specifically stated otherwise, the word ``member'' shall apply to 
permanent, temporary and interim members. Permanent Board members are 
officially entitled Administrative Appeals Judges. Temporary and interim 
Board members are designated as Acting Administrative Appeals Judges.

[[Page 376]]

    (b) The definitions contained in this part shall not be considered 
to derogate from the definitions of terms in the respective Acts.
    (c) The definitions pertaining to the Acts contained in the several 
parts of chapter VI of this title 20 shall be applicable to this chapter 
as is appropriate.

[52 FR 27290, July 20, 1987, as amended at 52 FR 28640, July 31, 1987]



Sec.801.3  Applicability of this part to 20 CFR part 802.

    Part 802 of title 20, Code of Federal Regulations, contains the 
rules of practice and procedure of the Board. This part 801, including 
the definitions and usages contained in Sec.801.2, is applicable to 
part 802 of this chapter as appropriate.

                Establishment and Authority of the Board



Sec.801.101  Establishment.

    By Pub. L. 92-576, 82 Stat. 1251, in an amendment made to section 21 
of the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 921), 
there was established effective November 26, 1972, a Benefits Review 
Board, which is composed of members appointed by the Secretary of Labor.



Sec.801.102  Review authority.

    (a) The Board is authorized, as provided in 33 U.S.C. 921(b), as 
amended, to hear and determine appeals raising a substantial question of 
law or fact taken by any party in interest from decisions or orders with 
respect to claims for compensation or benefits arising under the 
following Acts, as amended and extended:
    (1) The Longshore and Harbor Workers' Compensation Act (LHWCA), 33 
U.S.C. 901 et seq.;
    (2) The Defense Base Act (DBA), 42 U.S.C. 1651 et seq.;
    (3) The District of Columbia Workmen's Compensation Act (DCWCA), 36 
D.C. Code 501 et seq. (1973);
    (4) The Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331 et 
seq.;
    (5) The Nonappropriated Fund Instrumentalities Act (NFIA), 5 U.S.C. 
8171 et seq.;
    (6) Title IV, section 415 and part C of the Federal Mine Safety and 
Health Act of 1977, Public Law 95-164, 91 Stat. 1290 (formerly the 
Federal Coal Mine Health and Safety Act, hereinafter, FCMHSA, of 1969) 
as amended by the Black Lung Benefits Reform Act of 1977, Public Law 92-
239, 92 Stat. 95, the Black Lung Benefits Revenue Act of 1977, Public 
Law 95-227, 92 Stat. 11, and the Black Lung Benefits Amendments of 1981, 
Public Law 97-119, 95 Stat. 1643 (30 U.S.C. 901 et seq.).



Sec.801.103  Organizational placement.

    As prescribed by the statute, the functions of the Benefits Review 
Board are quasi-judicial in nature and involve review of decisions made 
in the course of the administration of the above statutes by the 
Employment Standards Administration in the Department of Labor. It is 
accordingly found appropriate for organizational purposes to place the 
Board in the Office of the Deputy Secretary and it is hereby established 
in that Office, which shall be responsible for providing necessary 
funds, personnel, supplies, equipment, and records services for the 
Board.



Sec.801.104  Operational rules.

    The Deputy Secretary of Labor may promulgate such rules and 
regulations as may be necessary or appropriate for effective operation 
of the Benefits Review Board as an independent quasi-judicial body in 
accordance with the provisions of the statute.

                          Members of the Board



Sec.801.201  Composition of the Board.

    (a) The Board shall be composed of five permanent members appointed 
by the Secretary from among individuals who are especially qualified to 
serve thereon. Each permanent member shall serve an indefinite term 
subject to the discretion of the Secretary.
    (b) The member designated by the Secretary as Chairman of the Board 
shall serve as chief administrative officer of the Board and shall have 
the authority, as delegated by the Secretary, to exercise all 
administrative functions necessary to operate the Board.
    (c) The four remaining members shall be the associate members of the 
Board.

[[Page 377]]

    (d) Upon application of the Chairman of the Board, the Secretary may 
designate up to four Department of Labor administrative law judges to 
serve as temporary Board members in addition to the five permanent Board 
members. Up to four such temporary members may serve at any one time. 
The term of any temporary Board member shall not exceed 1 year from date 
of appointment.



Sec.801.202  Interim appointments.

    (a) Acting Chairman. In the event that the Chairman of the Board is 
temporarily disabled or unavailable to perform his or her duties as 
prescribed in this chapter VII, he or she shall designate a permanent 
member to serve as Acting Chairman until such time as the Secretary 
designates an Acting Chairman. In the event that the Chairman is 
physically unable to make such designation, the next senior permanent 
member shall serve as Acting Chairman until such time as the Secretary 
of Labor designates an Acting Chairman.
    (b) Interim members. In the event that a permanent member of the 
Board is temporarily unable to carry out his or her responsibilities 
because of disqualification, illness, or for any other reason, the 
Secretary of Labor may, in his or her discretion, appoint a qualified 
individual to serve in the place of such permanent member for the 
duration of that permanent member's inability to serve.



Sec.801.203  Disqualification of Board Members.

    (a) During the period in which the Chairman or the other members 
serve on the Board, they shall be subject to the Department's 
regulations governing ethics and conduct set forth at 20 CFR part 0.
    (b) Notice of any objection which a party may have to any Board 
member who will participate in the proceeding shall be made by such 
party at the earliest opportunity. The Board member shall consider such 
objection and shall, in his or her discretion, either proceed with the 
case or withdraw.

                           Action by the Board



Sec.801.301  Quorum and votes of the permanent Board; panels within the Board.

    (a) For the purpose of carrying out its functions under the Acts, 
whenever action is taken by the entire permanent Board sitting en banc, 
three permanent members of the Board shall constitute a quorum, and 
official action of the permanent Board can be taken only on the 
concurring vote of at least three permanent members.
    (b) The Board may delegate any or all of its powers except en banc 
review to panels of three members. Each panel shall consist of at least 
two permanent members. Two members of the panel shall constitute a 
quorum and official panel action can be taken only on the concurring 
vote of two members of the panel.
    (c) A panel decision shall stand unless vacated or modified by the 
concurring vote of at least three permanent members sitting en banc.
    (d) En banc action is not available in cases arising under the 
District of Columbia Workmen's Compensation Act.



Sec.801.302  Procedural rules.

    Procedural rules for performance by the Board of its review 
functions and for insuring an adequate record for any judicial review of 
its orders, and such amendments to the rules as may be necessary from 
time to time, shall be promulgated by the Deputy Secretary. Such rules 
shall incorporate and implement the procedural requirements of section 
21(b) of the Longshore and Harbor Workers' Compensation Act.



Sec.801.303  Location of Board's proceedings.

    The Board shall hold its proceedings at 200 Constitution Avenue, 
NW., Room N-5101, Washington, DC 20210, unless for good cause the Board 
orders that proceedings in a particular matter be held in another 
location.

[62 FR 10666, Mar. 7, 1997]



Sec.801.304  Business hours.

    The office of the Clerk of the Board at Washington, DC shall be open 
from 8:30 a.m.-5:00 p.m. on all days, except

[[Page 378]]

Saturdays, Sundays, and legal holidays, for the purpose of receiving 
notices of appeal, petitions for review, other pleadings, motions, and 
other papers.

                             Representation



Sec.801.401  Representation before the Board.

    On any issues requiring representation of the Secretary, the 
Director, Office of Workers' Compensation Programs, a deputy 
commissioner, or an administrative law judge before the Board, such 
representation shall be provided by attorneys designated by the 
Solicitor of Labor. Representation of all other persons before the Board 
shall be as provided by the rules of practice and procedure promulgated 
under Sec.801.302 (see part 802 of this chapter).



Sec.801.402  Representation of Board in court proceedings.

    Except in proceedings in the Supreme Court of the United States, any 
representation of the Benefits Review Board in court proceedings shall 
be by attorneys designated by the Solicitor of Labor.



PART 802_RULES OF PRACTICE AND PROCEDURE--Table of Contents



                      Subpart A_General Provisions

                              Introductory

Sec.
802.101 Purpose and scope of this part.
802.102 Applicability of part 801 of this chapter.
802.103 Powers of the Board.
802.104 Consolidation; severance.
802.105 Stay of payment pending appeal.

                     Subpart B_Prereview Procedures

                       Commencing Appeal: Parties

802.201 Who may file an appeal.
802.202 Appearances by attorneys and other authorized persons; denial or 
          authority to appear.
802.203 Fees for services.

                            Notice of Appeal

802.204 Place for filing notice of appeal.
802.205 Time for filing.
802.206 Effect of motion for reconsideration on time for appeal.
802.207 When a notice of appeal is considered to have been filed in the 
          office of the Clerk of the Board.
802.208 Contents of notice of appeal.
802.209 Transmittal of record to the Board.

                           Initial Processing

802.210 Acknowledgment of notice of appeal.
802.211 Petition for review.
802.212 Response to petition for review.
802.213 Reply briefs.
802.214 Intervention.
802.215 Additional briefs.
802.216 Service and form of papers.
802.217 Waiver of time limitations for filing.
802.218 Failure to file papers; order to show cause.
802.219 Motions to the Board; orders.
802.220 Party not represented by an attorney; informal procedure.
802.221 Computation of time.

                     Subpart C_Procedure for Review

                           Action by the Board

802.301 Scope of review.
802.302 Docketing of appeals.

                     Oral Argument Before the Board

802.303 Decision; no oral argument.
802.304 Purpose of oral argument.
802.305 Request for oral argument.
802.306 Action on request for oral argument.
802.307 Notice of oral argument.
802.308 Conduct of oral argument.
802.309 Absence of parties.

                  Subpart D_Completion of Board Review

                               Dismissals

802.401 Dismissal by application of party.
802.402 Dismissal by abandonment.

                          Decision of the Board

802.403 Issuance of decisions; service.
802.404 Scope and content of Board decisions.
802.405 Remand.
802.406 Finality of Board decisions.

                             Reconsideration

802.407 Reconsideration of Board decisions.
802.408 Notice of request for reconsideration.
802.409 Grant or denial of request.

                             Judicial Review

802.410 Judicial review of Board decisions.
802.411 Certification of record for judicial review.

    Authority: 5 U.S.C. 301; 30 U.S.C. 901 et seq.; 33 U.S.C. 901 et 
seq.; Reorganization Plan No. 6 of 1950, 15 FR 3174; Secretary of 
Labor's Order 38-72, 38 FR 90, January 3, 1973.

[[Page 379]]


    Source: 52 FR 27292, July 20, 1987, unless otherwise noted.



                      Subpart A_General Provisions

                              Introductory



Sec.802.101  Purpose and scope of this part.

    (a) The purpose of part 802 is to establish the rules of practice 
and procedure governing the operation of the Benefits Review Board.
    (b) Except as otherwise provided, the rules promulgated in this part 
apply to all appeals taken by any party from decisions or orders with 
respect to claims for compensation or benefits under the following Acts:
    (1) The Longshore and Harbor Workers' Compensation Act (LHWCA), 33 
U.S.C. 901 et seq.;
    (2) The Defense Base Act (DBA), 42 U.S.C. 1651 et seq.;
    (3) The District of Columbia Workmen's Compensation Act (DCWCA), 36 
D.C. Code 501 et seq. (1973);
    (4) The Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331 et 
seq.;
    (5) The Nonappropriated Fund Instrumentalities Act (NFIA), 5 U.S.C. 
8171 et seq.;
    (6) Title IV, section 415 and part C of the Federal Mine Safety and 
Health Act of 1977, Public Law 95-164, 91 Stat. 1290 (formerly the 
FCMHSA of 1969), as amended by the Black Lung Benefits Reform Act of 
1977, Public Law 95-239, 92 Stat. 95, the Black Lung Benefits Revenue 
Act of 1977, Public Law 95-229, 92 Stat. 11, and the Black Lung Benefits 
Amendments of 1981, Public Law 97-119, 95 Stat. 1643 (30 U.S.C. 901 et 
seq.).



Sec.802.102  Applicability of part 801 of this chapter.

    Part 801 of this chapter VII sets forth rules of general 
applicability covering the composition, authority, and operation of the 
Benefits Review Board and definitions applicable to this chapter. The 
provisions of part 801 of this chapter are fully applicable to this part 
802.



Sec.802.103  Powers of the Board.

    (a) Conduct of proceedings. Pursuant to section 27(a) of the LHWCA, 
the Board shall have power to preserve and enforce order during any 
proceedings for determination or adjudication of entitlement to 
compensation or benefits or for liability for payment thereof, and to do 
all things in accordance with law which may be necessary to enable the 
Board to effectively discharge its duties.
    (b) Contumacy. Pursuant to section 27(b) of the LHWCA, if any person 
in proceedings before the Board disobeys or resists any lawful order or 
process, or misbehaves during a hearing or so near the place thereof as 
to obstruct the same, the Board shall certify the facts to the Federal 
district court having jurisdiction in the place in which it is sitting 
(or to the U.S. District Court for the District of Columbia if it is 
sitting in the District) which shall thereupon in a summary manner hear 
the evidence as to the acts complained of, and if the evidence so 
warrants, punish such person in the same manner and to the same extent 
as for a contempt committed before the court, or commit such person upon 
the same conditions as if the doing of the forbidden act had occurred 
with reference to the process or in the presence of the court.



Sec.802.104  Consolidation; severance.

    (a) Cases may, in the sole discretion of the Board, be consolidated 
for purposes of an appeal upon the motion of any party or upon the 
Board's own motion where there exist common parties, common questions of 
law or fact or both, or in such other circumstances as justice and the 
administration of the Acts require.
    (b) Upon its own motion, or upon motion of any party, the Board may, 
for good cause, order any proceeding severed with respect to some or all 
issues or parties.



Sec.802.105  Stay of payment pending appeal.

    (a) As provided in section 14(f) of the LHWCA and sections 415 and 
422 of the Black Lung Benefits Act, the payment of the amounts required 
by an award of compensation or benefits shall not be stayed or in any 
way delayed beyond ten days after it becomes due pending final decision 
in any proceeding before the Board unless so ordered by the

[[Page 380]]

Board. No stay shall be issued unless irreparable injury would otherwise 
ensue to the employer, coal mine operator or insurance carrier. Any 
order of the Board permitting any stay shall contain a specific finding, 
based upon evidence submitted to the Board and identified by reference 
thereto, that irreparable injury would result to such employer, operator 
or insurance carrier, and specify the nature and extent of the injury.
    (b) When circumstances require, the Board, in its discretion, may 
issue a temporary order not to exceed 30 days granting a motion for stay 
of payment prior to the expiration of the ten-day period allowed for 
filing responses to motions pursuant to Sec.802.219(e). Following 
receipt of a response to the motion or expiration of the response time 
provided in Sec.802.219(e), the Board will issue a subsequent order 
ruling on the motion for stay of payment.

[52 FR 27292, July 20, 1987, as amended at 53 FR 16519, May 9, 1988]



                     Subpart B_Prereview Procedures

                       Commencing Appeal: Parties



Sec.802.201  Who may file an appeal.

    (a) A party. (1) Any party or party-in-interest adversely affected 
or aggrieved by a decision or order issued pursuant to one of the Acts 
over which the Board has appellate jurisdiction may appeal a decision or 
order of an administrative law judge or deputy commissioner to the Board 
by filing a notice of appeal pursuant to this subpart. (See Sec.
802.205(b) and (c) for exceptions to this general rule.) A party who 
files a notice of appeal shall be deemed the petitioner. The Director, 
OWCP, when acting as a representative of the Special Fund established 
under the Longshore and Harbor Workers' Compensation Act or the Black 
Lung Disability Trust Fund established by the Black Lung Benefits Act, 
or, when appealing a decision or order which affects the administration 
of one of the Acts, shall be considered a party adversely affected.
    (2) When a decision or order is favorable to a party (i.e., the 
prevailing party), the prevailing party may file a cross-appeal pursuant 
to Sec.802.205(b) to challenge any adverse findings of fact or 
conclusions of law in the same proceeding.
    (b) Representative parties. In the event that a party has not 
attained the age of 18, is not mentally competent, or is physically 
unable to file and pursue or defend an appeal, the Board may permit any 
legally appointed guardian, committee, or other appropriate 
representative to file and pursue or defend the appeal, or it may in its 
discretion appoint such representative for purposes of the appeal. The 
Board may require any legally appointed representative to submit 
evidence of that person's authority.



Sec.802.202  Appearances by attorneys and other authorized persons; denial or 

authority to appear.

    (a) Appearances. Any party or intervenor or any representative duly 
authorized pursuant to Sec.802.201(b) may appear before and/or submit 
written argument to the Board by attorney or any other person, including 
any representative of an employee organization, duly authorized pursuant 
to paragraph (d)(2) of this section.
    (b) Any individual petitioner or respondent or his duly authorized 
representative pursuant to Sec.802.201(b) or an officer of any 
corporate party or a member of any partnership or joint venture which is 
a party may participate in the appeal on his or her own behalf, or on 
behalf of such business entity.
    (c) For each instance in which appearance before the Board is made 
by an attorney or duly authorized person other than the party or his 
legal guardian, committee, or representative, there shall be filed with 
the Board a notice of appearance. Any attorney or other duly authorized 
person of record who intends to withdraw from representation shall file 
prior written notice of intent to withdraw from representation of a 
party or of substitution of counsel or other representative.
    (d) Qualifications--(1) Attorneys. An attorney at law who is 
admitted to practice before the Federal courts or before the highest 
court of any State, the District of Columbia, or any territory or 
commonwealth of the United States, may practice before the Board

[[Page 381]]

unless he or she has been disqualified from representing claimants under 
the Act pursuant to 33 U.S.C. 931(b)(2)(C), or unless authority to 
appear has been denied pursuant to Sec.802.202(e)(1) and (3). An 
attorney's own representation that he or she is in good standing before 
any of such courts shall be sufficient proof thereof, unless otherwise 
ordered by the Board.
    (2) Persons not attorneys. Any person who is not an attorney at law 
may be admitted to appear in a representative capacity unless he or she 
has been disqualified from representing claimants under the Act pursuant 
to 33 U.S.C. 931(b)(2)(C). An application by a person not an attorney at 
law for admission to appear in a proceeding shall be submitted in 
writing to the Board at the time such person's appearance is entered. 
The application shall state such person's name, address, telephone 
number, general education, any special training or experience in claims 
representation, and such person's relationship, if any, to the party 
being represented. The Board may, at any time, make further inquiry as 
to the qualification or ability of such person to render assistance. In 
the event of a failure to make application for admission to appear, the 
Board shall issue an order to show cause why admission to appear should 
not be denied. Admission to appear in a particular case shall not be 
deemed a blanket authorization to appear in other cases.
    (e) Denial of authority to appear--(1) Attorneys. The Board may deny 
the privilege of appearing to any attorney, within applicable statutory 
constraints, e.g., 5 U.S.C. 555, who has been disbarred or suspended 
from the practice of law; who has surrendered his or her license while 
under investigation or under threat of disciplinary action; or who, 
after notice of an opportunity for hearing in the matter is found by the 
Board to have engaged in any conduct which would result in the loss of 
his or her license. No provision hereof shall apply to any attorney who 
appears on his or her own behalf.
    (2) Persons not attorneys. The Board may deny the privilege of 
appearing to any person who, in the Board's judgment, lacks sufficient 
qualification or ability to render assistance. No provision hereof shall 
apply to any person who appears on his or her own behalf.
    (3) Denial of authority to appear may be considered, after notice of 
and opportunity for a hearing, by the panel (constituted pursuant to 
Sec.801.301) which is assigned to decide the appeal in which the 
attorney or other person has entered an appearance. If such proceeding 
reveals facts suggesting that one of the circumstances described in 33 
U.S.C. 931(b)(2)(C) exists, the Board shall refer that information to 
the Director, OWCP, for further proceedings pursuant to 33 U.S.C. 
931(b)(2)(C) and 907(j). An attorney or other person may appeal a 
panel's decision to deny authority to appear to the entire permanent 
Board sitting en banc.

[52 FR 27292, July 20, 1987, as amended at 53 FR 16519, May 9, 1988]



Sec.802.203  Fees for services.

    (a) No fee for services rendered on behalf of a claimant in the 
successful pursuit or successful defense of an appeal shall be valid 
unless approved pursuant to 33 U.S.C. 928, as amended.
    (b) All fees for services rendered in the successful pursuit or 
successful defense of an appeal on behalf of a claimant shall be subject 
to the provisions and prohibitions contained in 33 U.S.C. 928, as 
amended.
    (c) Within 60 days of the issuance of a decision or non-
interlocutory order by the Board, counsel or, where appropriate, 
representative for any claimant who has prevailed on appeal before the 
Board may file an application with the Board for a fee. Where the Board 
remands the case and the administrative law judge on remand issues an 
award, a fee petition may be filed within 60 days of the decision on 
remand. In the event that a claimant who was unsuccessful before the 
Board prevails on appeal to the court of appeals, his or her 
representative may within 60 days of issuance of the court's judgment 
file a fee application with the Board for services performed before the 
Board.
    (d) A fee application shall include only time spent on services 
performed while the appeal was pending before the Board and shall be 
complete in all respects, containing all of the following specific 
information:

[[Page 382]]

    (1) A complete statement of the extent and character of the 
necessary work done;
    (2) The professional status of each person for whom a fee is claimed 
who performed services on behalf of the claimant (if such professional 
status is other than attorney, a definition of the professional status 
of such individual must be included in the fee petition, including a 
statment of that individual's professional training, education and 
experience) and a statement that the attorney was a member in good 
standing of a state bar at the time the services were performed;
    (3) The number of hours, in \1/4\ hour increments, devoted by each 
person who performed services on behalf of the claimant and the dates on 
which such services were performed in each category of work;
    (4) The normal billing rate for each person who performed services 
on behalf of the claimant. The rate awarded by the Board shall be based 
on what is reasonable and customary in the area where the services were 
rendered for a person of that particular professional status.
    (e) Any fee approved shall be reasonably commensurate with the 
necessary work done and shall take into account the quality of the 
representation, the complexity of the legal issues involved, the amount 
of benefits awarded, and, when the fee is to be assessed against the 
claimant, shall also take into account the financial circumstances of 
the claimant. A fee shall not necessarily be computed by multiplying 
time devoted to work by an hourly rate.
    (f) No contract pertaining to the amount of a fee shall be 
recognized.
    (g) A fee application shall be served on all other parties and 
accompanied by a certificate of service. The Board will not take action 
on the fee application until such service is effected. Any party may 
respond to the application within 10 days of receipt of the application. 
The response shall be filed with the Board and served on all other 
parties.

                            Notice of Appeal



Sec.802.204  Place for filing notice of appeal.

    Any notice of appeal shall be sent by mail to the U.S. Department of 
Labor, Benefits Review Board, P.O. Box 37601, Washington, DC 20013-7601, 
or otherwise presented to the Clerk of the Board at 200 Constitution 
Avenue, NW., Room S-5220, Washington, DC 20210. A copy shall be served 
on the deputy commissioner who filed the decision or order being 
appealed and on all other parties by the party who files a notice of 
appeal. Proof of service of the notice of appeal on the deputy 
commissioner and other parties shall be included with the notice of 
appeal.

[52 FR 27292, July 20, 1987, as amended at 56 FR 54538, Oct. 22, 1991; 
62 FR 10666, Mar. 7, 1997]



Sec.802.205  Time for filing.

    (a) A notice of appeal, other than a cross-appeal, must be filed 
within 30 days from the date upon which a decision or order has been 
filed in the Office of the Deputy Commissioner pursuant to section 19(e) 
of the LHWCA or in such other office as may be established in the future 
(see Sec. Sec.702.349 and 725.478 of this title).
    (b) If a timely notice of appeal is filed by a party, any other 
party may initiate a cross-appeal by filing a notice of appeal within 14 
days of the date on which the first notice of appeal was filed, or 
within the time prescribed by paragraph (a) of this section, whichever 
period last expires. In the event that such other party was not properly 
served with the first notice of appeal, such party may initiate a cross-
appeal by filing a notice of appeal within 14 days of the date that 
service is effected.
    (c) Failure to file within the period specified in paragraph (a) or 
(b) of this section (whichever is applicable) shall foreclose all rights 
to review by the Board with respect to the case or matter in question. 
Any untimely appeal will be summarily dismissed by the Board for lack of 
jurisdiction.

[[Page 383]]



Sec.802.206  Effect of motion for reconsideration on time for appeal.

    (a) A timely motion for reconsideration of a decision or order of an 
administrative law judge or deputy commissioner shall suspend the 
running of the time for filing a notice of appeal.
    (b)(1) In a case involving a claim filed under the Longshore and 
Harbor Workers' Compensation Act or its extensions (see Sec.
802.101(b)(1)-(5)), a timely motion for reconsideration for purposes of 
paragraph (a) of this section is one which is filed not later than 10 
days from the date the decision or order was filed in the Office of the 
Deputy Commissioner.
    (2) In a case involving a claim filed under title IV of the Federal 
Mine Safety and Health Act, as amended (see Sec.802.101(b)(6)), a 
timely motion for reconsideration for purposes of paragraph (a) of this 
section is one which is filed not later than 30 days from the date the 
decision or order was served on all parties by the administrative law 
judge and considered filed in the Office of the Deputy Commissioner (see 
Sec. Sec.725.478 and 725.479(b), (c) of this title).
    (c) If the motion for reconsideration is sent by mail and the fixing 
of the date of delivery as the date of filing would result in a loss or 
impairment of reconsideration rights, it will be considered to have been 
filed as of the date of mailing. The date appearing on the U.S. Postal 
Service postmark (when available and legible) shall be prima facie 
evidence of the date of mailing. If there is no such postmark or it is 
not legible, other evidence such as, but not limited to, certified mail 
receipts, certificates of service and affidavits may also be used to 
establish the mailing date.
    (d) If a motion for reconsideration is granted, the full time for 
filing an appeal commences on the date the subsequent decision or order 
on reconsideration is filed as provided in Sec.802.205.
    (e) If a motion for reconsideration is denied, the full time for 
filing an appeal commences on the date the order denying reconsideration 
is filed as provided in Sec.802.205.
    (f) If a timely motion for reconsideration of a decision or order of 
an administrative law judge or deputy commissioner is filed, any appeal 
to the Board, whether filed prior to or subsequent to the filing of the 
timely motion for reconsideration, shall be dismissed without prejudice 
as premature. Following decision by the administrative law judge or 
deputy commissioner pursuant to either paragraph (d) or (e) of this 
section, a new notice of appeal shall be filed with the Clerk of the 
Board by any party who wishes to appeal. During the pendency of an 
appeal to the Board, any party having knowledge that a motion for 
reconsideration of a decision or order of an administrative law judge or 
deputy commissioner has been filed shall notify the Board of such 
filing.



Sec.802.207  When a notice of appeal is considered to have been filed in the 

office of the Clerk of the Board.

    (a) Date of receipt. (1) Except as otherwise provided in this 
section, a notice of appeal is considered to have been filed only as of 
the date it is received in the office of the Clerk of the Board.
    (2) Notices of appeal submitted to any other agency or subdivision 
of the Department of Labor or of the U.S. Government or any State 
government shall be promptly forwarded to the office of the Clerk of the 
Board. The notice shall be considered filed with the Clerk of the Board 
as of the date it was received by the other governmental unit if the 
Board finds that it is in the interest of justice to do so.
    (b) Date of mailing. If the notice of appeal is sent by mail and the 
fixing of the date of delivery as the date of filing would result in a 
loss or impairment of appeal rights, it will be considered to have been 
filed as of the date of mailing. The date appearing on the U.S. Postal 
Service postmark (when available and legible) shall be prima facie 
evidence of the date of mailing. If there is no such postmark or it is 
not legible, other evidence, such as, but not limited to, certified mail 
receipts, certificate of service and affidavits, may be used to 
establish the mailing date.



Sec.802.208  Contents of notice of appeal.

    (a) A notice of appeal shall contain the following information:
    (1) The full name and address of the pettioner;

[[Page 384]]

    (2) The full name of the injured, disabled, or deceased employee;
    (3) The full names and addresses of all other parties, including, 
among others, beneficiaries, employers, coal mine operators, and 
insurance carriers where appropriate;
    (4) The case file number which appears on the decision or order of 
the administrative law judge;
    (5) The claimant's OWCP file number;
    (6) The date of filing of the decision or order being appealed;
    (7) Whether a motion for reconsideration of the decision or order of 
the administrative law judge has been filed by any party, the date such 
motion was filed, and whether the administrative law judge has acted on 
such motion for reconsideration (see Sec.802.206);
    (8) The name and address of the attorney or other person, if any, 
who is representing the petitioner.
    (b) Paragraph (a) of this section notwithstanding, any written 
communication which reasonably permits identification of the decision 
from which an appeal is sought and the parties affected or aggrieved 
thereby, shall be sufficient notice for purposes of Sec.802.205.
    (c) In the event that identification of the case is not possible 
from the information submitted, the Clerk of the Board shall so notify 
the petitioner and shall give the petitioner a reasonable time to 
produce sufficient information to permit identification of the case. For 
purposes of Sec.802.205, the notice shall be deemed to have been filed 
as of the date the insufficient information was received.



Sec.802.209  Transmittal of record to the Board.

    Upon receipt of a copy of the notice of appeal or upon request of 
the Board, the deputy commissioner or other office having custody of 
such record shall immediately forward to the Clerk of the Board the 
official record of the case, which record includes the transcript or 
transcripts of all formal proceedings with exhibits, all decisions and 
orders rendered in the case.

                           Initial Processing



Sec.802.210  Acknowledgment of notice of appeal.

    Upon receipt by the Board of a notice of appeal, the Clerk of the 
Board shall as expeditiously as possible notify the petitioner and all 
other parties and the Solicitor of Labor, in writing, that a notice of 
appeal has been filed.



Sec.802.211  Petition for review.

    (a) Within 30 days after the receipt of an acknowledgment of a 
notice of appeal issued pursuant to Sec.802.210, the petitioner shall 
submit a petition for review to the Board which petition lists the 
specific issues to be considered on appeal.
    (b) Each petition for review shall be accompanied by a supporting 
brief, memorandum of law or other statement which: Specifically states 
the issues to be considered by the Board; presents, with appropriate 
headings, an argument with respect to each issue presented with 
references to transcripts, pieces of evidence and other parts of the 
record to which the petitioner wishes the Board to refer; a short 
conclusion stating the precise result the petitioner seeks on each issue 
and any authorities upon which the petition relies to support such 
proposed result. The Longshore Desk Book and Black Lung Desk Book are 
not intended as final legal authorities and should not be cited or 
relied upon as such.
    (c) Copies of the petition for review and accompanying documents 
must be served upon all parties and the Solicitor of Labor.
    (d) Failure to submit a petition for review and brief within the 30-
day period or to comply with any part of this section may, in the 
discretion of the Board, cause the appeal to be deemed abandoned (see 
Sec.802.402).
    (e) When a party appears pro se the Board may, in its discretion, 
waive formal compliance with the requirements of this section and may, 
depending upon the particular circumstances, prescribe an alternate 
method of furnishing such information as may be necessary for the Board 
to decide the merits of any such appeal.

[[Page 385]]



Sec.802.212  Response to petition for review.

    (a) Within 30 days after the receipt of a petition for review, each 
party upon whom it was served may submit to the Board a brief, 
memorandum, or other statement in response to it.
    (b) Arguments in response briefs shall be limited to those which 
respond to arguments raised in petitioner's brief and to those in 
support of the decision below. Other arguments will not be considered by 
the Board (see Sec.802.205(b)).



Sec.802.213  Reply briefs.

    (a) Within 20 days after the receipt of a brief, memorandum, or 
statement submitted in response to the petition for review pursuant to 
Sec.802.212, any party upon whom it was served may file a brief, 
memorandum, or other statement in reply to it.
    (b) Arguments in reply briefs shall be limited to those which reply 
to arguments made in the response brief. Any other arguments in a reply 
brief will not be considered by the Board.



Sec.802.214  Intervention.

    (a) If a person or legal entity shows in a written petition to 
intervene that his, her, or its rights are affected by any proceeding 
before the Board, the Board may permit that person or legal entity to 
intervene in the proceeding and to participate within limits prescribed 
by the Board.
    (b) The petition to intervene shall state precisely:
    (1) The rights affected, and
    (2) The nature of any argument the person or legal entity intends to 
make.



Sec.802.215  Additional briefs.

    Additional briefs may be filed or ordered in the discretion of the 
Board and shall be submitted within time limits specified by the Board.



Sec.802.216  Service and form of papers.

    (a) All papers filed with the Board, including notices of appeal, 
petitions for review, briefs and motions, shall be secured at the top 
and shall have a caption, title, signature of the party (or his attorney 
or other representative), date of signature, and certificate of service.
    (b) For each paper filed with the Board, the original and two 
legible copies shall be submitted.
    (c) A copy of any paper filed with the Board shall be served on each 
party and the Solicitor of Labor, by the party submitting the paper.
    (d) Any paper required to be given or served to or by the Board or 
any party shall be served by mail or otherwise presented. All such 
papers served shall be accompanied by a certificate of service.
    (e) All papers (exclusive of documentary evidence) submitted to the 
Benefits Review Board shall conform to standard letter dimensions (8.5 x 
11 inches).



Sec.802.217  Waiver of time limitations for filing.

    (a) The time periods specified for submitting papers described in 
this part, except that for submitting a notice of appeal, may be 
enlarged for a reasonable period when in the judgment of the Board an 
enlargement is warranted.
    (b) Any request for an enlargement of time pursuant to this section 
shall be directed to the Clerk of the Board and must be received by the 
Clerk on or prior to the date on which the paper is due.
    (c) Any request for an enlargement of time pursuant to this section 
shall be submitted in writing in the form of a motion, shall specify the 
reasons for the request, and shall specify the date to which an 
enlargement of time is requested.
    (d) Absent exceptional circumstances, no more than one enlargement 
of time shall be granted to each party.
    (e) Absent a timely request for an enlargement of time pursuant to 
this section and the Board's granting that request, any paper submitted 
to the Board outside the applicable time period specified in this part 
shall be accompanied by a separate motion stating the reasons therefor 
and requesting that the Board accept the paper although filed out of 
time.

[[Page 386]]

    (f) When a paper filed out of time is accepted by the Board, the 
time for filing a response shall begin to run from the date of a party's 
receipt of the Board's order disposing of the motion referred to in 
paragraph (e) of this section.



Sec.802.218  Failure to file papers; order to show cause.

    (a) Failure to file any paper when due pursuant to this part, may, 
in the discretion of the Board, constitute a waiver of the right to 
further participation in the proceedings.
    (b) When a petition for review and brief has not been submitted to 
the Board within the time limitation prescribed by Sec.802.211, or 
within an enlarged time limitation granted pursuant to Sec.802.217, 
the petitioner shall be ordered to show cause to the Board why his or 
her appeal should not be dismissed pursuant to Sec.802.402.



Sec.802.219  Motions to the Board; orders.

    (a) An application to the Board for an order shall be by motion in 
writing. A motion shall state with particularity the grounds therefor 
and shall set forth the relief or order sought.
    (b) A motion shall be a separate document and shall not be 
incorporated in the text of any other paper filed with the Board, except 
for a statement in support of the motion. If this paragraph is not 
complied with, the Board will not consider and dispose of the motion.
    (c) If there is no objection to a motion in whole or in part by 
another party to the case, the absence of an objection shall be stated 
on the motion.
    (d) The rules applicable to service and form of papers, Sec.
802.216, shall apply to all motions.
    (e) Within 10 days of the receipt of a copy of a motion, a party may 
file a written response with the Board.
    (f) As expeditiously as possible following receipt of a response to 
a motion or expiration of the response time provided in paragraph (e) of 
this section, the Board shall issue a dispositive order.
    (g) Orders granted by Clerk. The Clerk of the Board may enter orders 
on behalf of the Board in procedural matters, including but not limited 
to:
    (1) First motions for extensions of time for filing briefs and any 
papers other than notices of appeal or cross-appeal;
    (2) Motions for voluntary dismissals of appeals;
    (3) Orders to show cause why appeals should not be dismissed for 
failure to timely file a petition for review and brief (see Sec.
802.218(b)); and
    (4) Unopposed motions which are ordinarily granted as of course, 
except that the Clerk may, in his or her discretion, refer such motions 
for disposition to a motions panel as provided by paragraph (h) of this 
section.
    (h) All other motions. All other motions will be referred for 
disposition to a panel of three members constituted pursuant to Sec.
801.301. Any member may request that any motion be considered by the 
entire permanent Board en banc except as provided in Sec.801.301(d).
    (i) Reconsideration of orders. Any party adversely effected by any 
interlocutory order issued under paragraph (g) or (h) may file a motion 
to reconsider, vacate or modify the order within 10 days from its 
filing, stating the grounds for such request. Any motion for 
reconsideration, vacation or modification of an interlocutory order 
shall be referred to a three-member panel that may include any member 
who previously acted on the matter. Suggestions for en banc 
reconsideration of interlocutory orders shall not be accepted. 
Reconsideration of all other orders will be treated under Sec.802.407 
of this part.



Sec.802.220  Party not represented by an attorney; informal procedure.

    A party to an appeal who is not represented by an attorney shall 
comply with the procedural requirements contained in this part, except 
as otherwise specifically provided in Sec.802.211(e). In its 
discretion, the Board may prescribe additional informal procedures to be 
followed by such party.



Sec.802.221  Computation of time.

    (a) In computing any period of time prescribed or allowed by these 
rules, by direction of the Board, or by any applicable statute which 
does not provide otherwise, the day from which the designated period of 
time begins to run

[[Page 387]]

shall not be included. The last day of the period so computed shall be 
included, unless it is a Saturday, Sunday, or legal holiday, in which 
event the period runs until the end of the next day which is not a 
Saturday, Sunday, or legal holiday.
    (b) Whenever a paper is served on the Board or on any party by mail, 
paragraph (a) of this section will be deemed complied with if the 
envelope containing the paper is postmarked by the U.S. Postal Service 
within the time period allowed, computed as in paragraph (a) of this 
section. If there is no such postmark, or it is not legible, other 
evidence, such as, but not limited to, certified mail receipts, 
certificate of service and affidavits, may be used to establish the 
mailing date.
    (c) A waiver of the time limitations for filing a paper, other than 
a notice of appeal, may be requested by proper motion filed in 
accordance with Sec. Sec.802.217 and 802.219.



                     Subpart C_Procedure for Review

                           Action by the Board



Sec.802.301  Scope of review.

    (a) The Benefits Review Board is not empowered to engage in a de 
novo proceeding or unrestricted review of a case brought before it. The 
Board is authorized to review the findings of fact and conclusions of 
law on which the decision or order appealed from was based. Such 
findings of fact and conclusions of law may be set aside only if they 
are not, in the judgment of the Board, supported by substantial evidence 
in the record considered as a whole or in accordance with law.
    (b) Parties shall not submit new evidence to the Board. Any evidence 
submitted by a party which is not part of the record developed at the 
hearing before the administrative law judge will be returned without 
being considered by the Board.
    (c) Any party who considers new evidence necessary to the 
adjudication of the claim may apply for modification pursuant to section 
22 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 922. 
A party who files a petition for modification shall promptly notify the 
Board of such filing. Upon receipt of such notification, the Board shall 
dismiss the case without prejudice. Should the petition for modification 
be declined, the petitioner may file a request for reinstatement of his 
or her appeal with the Board within 30 days of the date the petition is 
declined. Should the petition for modification be accepted, any party 
adversely affected by the decision or order granting or denying 
modification may file a new appeal with the Board within 30 days of the 
date the decision or order on modification is filed.

[52 FR 27292, July 20, 1987, as amended at 53 FR 16519, May 9, 1988]



Sec.802.302  Docketing of appeals.

    (a) Maintenance of dockets. A docket of all proceedings shall be 
maintained by the Board. Each proceeding shall be assigned a number in 
chronological order upon the date on which a notice of appeal is 
received. Correspondence or further applications in connection with any 
pending case shall refer to the docket number of that case.
    (b) Inspection of docket; publication of decision. The docket of the 
Board shall be open to public inspection. The Board shall publish its 
decisions in a form which is readily available for inspection, and shall 
allow the public to inspect its decisions at the permanent location of 
the Board.

                     Oral Argument Before the Board



Sec.802.303  Decision; no oral argument.

    (a) In the event that no oral argument is ordered pursuant to Sec.
802.306, the Board shall proceed to review the record of the case as 
expeditiously as possible after all briefs, supporting statements, and 
other pertinent documents have been received.
    (b) Each case shall be considered in the order in which it becomes 
ready for decision, regardless of docket number, although for good cause 
shown, upon the filing of a motion to expedite by a party, the Board may 
advance the order in which a particular case is to be considered.
    (c) The Board may advance an appeal on the docket on its own motion 
if the interests of justice would be served by so doing.

[[Page 388]]



Sec.802.304  Purpose of oral argument.

    Oral argument may be held by the Board in any case:
    (a) When there is a novel issue not previously considered by the 
Board; or
    (b) When in the interests of justice oral argument will serve to 
assist the Board in carrying out the intent of any of the Acts; or
    (c) To resolve conflicting decisions by administrative law judges on 
a substantial question of law.



Sec.802.305  Request for oral argument.

    (a) During the pendency of an appeal, but not later than the 
expiration of 20 days from the date of receipt of the response brief 
provided by Sec.802.212, any party may request oral argument. The 
Board on its own motion may order oral argument at any time.
    (b) A request for oral argument shall be submitted in the form of a 
motion, specifying the issues to be argued and justifying the need for 
oral argument (see Sec.802.219).
    (c) The party requesting oral argument shall set forth in the motion 
suggested dates and alternate cities convenient to the parties when and 
where they would be available for oral argument.



Sec.802.306  Action on request for oral argument.

    As expeditiously as possible after the date upon which a request for 
oral argument is received, the Board shall determine whether the request 
shall be granted or denied.



Sec.802.307  Notice of oral argument.

    (a) In cases where a request for oral argument has been approved or 
where oral argument has been ordered, the Board shall give all parties a 
minimum of 30 days' notice, in writing, by mail, of the scope of 
argument and of the time when, and place where, oral argument will be 
held.
    (b) Once oral argument has been scheduled by the Board, continuances 
shall not be granted except for good cause shown by a party, such as in 
cases of extreme hardship or where attendance of a party or his or her 
representative is mandated at a previously scheduled judicial 
proceeding. Unless the ground for the request arises thereafter, 
requests for continuances must be received by the Board at least 15 days 
before the scheduled date of oral argument, must be served upon the 
other parties and must specify good cause why the requesting party 
cannot be available for oral argument.
    (c) The Board may cancel or reschedule oral argument on its own 
motion at any time.



Sec.802.308  Conduct of oral argument.

    (a) Oral argument shall be held in Washington, DC, unless the Board 
orders otherwise, and shall be conducted at a time reasonably convenient 
to the parties. For good cause shown, the presiding judge of the panel 
may, in his or her discretion, postpone an oral argument to a more 
convenient time.
    (b) The proceedings shall be conducted under the supervision of the 
Chairman or, if the Chairman is not on the panel, the senior judge, who 
shall regulate all procedural matters arising during the course of the 
argument.
    (c) Within the discretion of the Board, oral argument shall be open 
to the public and may be presented by any party, representative, or duly 
authorized attorney. Presentation of oral argument may be denied by the 
Board to a party who has not significantly participated in the appeal 
prior to oral argument.
    (d) The Board shall determine the scope of any oral argument 
presented and shall so inform the parties in its notice scheduling oral 
argument pursuant to Sec.802.307.
    (e) The Board in its discretion shall determine the amount of time 
allotted to each party for argument and rebuttal.



Sec.802.309  Absence of parties.

    The unexcused absence of a party or his or her authorized 
representative at the time and place set for argument shall not be the 
occasion for delay of the proceeding. In such event, argument on behalf 
of other parties may be heard and the case shall be regarded as 
submitted on the record by the absent party. The presiding judge may, 
with the consent of the parties present, cancel the oral argument and 
treat the appeal as submitted on the written record.

[[Page 389]]



                  Subpart D_Completion of Board Review

                               Dismissals



Sec.802.401  Dismissal by application of party.

    (a) At any time prior to the issuance of a decision by the Board, 
the petitioner may move that the appeal be dismissed. If granted, such 
motion for dismissal shall be granted with prejudice to the petitioner.
    (b) At any time prior to the issuance of a decision by the Board, 
any party or representative may move that the appeal be dismissed.



Sec.802.402  Dismissal by abandonment.

    (a) Upon motion by any party or representative or upon the Board's 
own motion, an appeal may be dismissed upon its abandonment by the party 
or parties who filed the appeal. Within the discretion of the Board, a 
party may be deemed to have abandoned an appeal if neither the party nor 
his representative participates significantly in the review proceedings.
    (b) An appeal may be dismissed on the death of a party only if the 
record affirmatively shows that there is no person who wishes to 
continue the action and whose rights may be prejudiced by dismissal.

                          Decision of the Board



Sec.802.403  Issuance of decisions; service.

    (a) The Board shall issue written decisions as expeditiously as 
possible after the completion of review proceedings before the Board. 
The transmittal of the decision of the Board shall indicate the 
availability of judicial review of the decision under section 21(c) of 
the LHWCA when appropriate.
    (b) The original of the decision shall be filed with the Clerk of 
the Board. A copy of the Board's decision shall be sent by certified 
mail or otherwise presented to all parties to the appeal and the 
Director. The record on appeal, together with a transcript of any oral 
proceedings, any briefs or other papers filed with the Board, and a copy 
of the decision shall be returned to the appropriate deputy commissioner 
for filing.
    (c) Proof of service of Board decisions shall be certified by the 
Clerk of the Board or by another employee in the office of the Clerk of 
the Board who is authorized to certify proof of service.



Sec.802.404  Scope and content of Board decisions.

    (a) In its decision the Board shall affirm, modify, vacate or 
reverse the decision or order appealed from, and may remand the case for 
action or proceedings consistent with the decision of the Board. The 
consent of the parties shall not be a prerequisite to a remand ordered 
by the Board.
    (b) In appropriate cases, such as where the issues raised on appeal 
have been thoroughly discussed and disposed of in prior cases by the 
Board or the courts, or where the findings of fact and conclusions of 
law are both correct and adequately discussed, the Board in its 
discretion may issue a brief, summary decision in writing, disposing of 
the appeal.
    (c) In cases which cannot be disposed of as in paragraph (b) of this 
section, a full, written decision discussing the issues and applicable 
law shall be issued.



Sec.802.405  Remand.

    (a) By the Board. Where a case is remanded, such additional 
proceedings shall be initiated and such other action shall be taken as 
is directed by the Board.
    (b) By a court. Where a case has been remanded by a court, the Board 
may proceed in accordance with the court's mandate to issue a decision 
or it may in turn remand the case to an administrative law judge or 
deputy commissioner with instructions to take such action as is ordered 
by the court and any additional necessary action.



Sec.802.406  Finality of Board decisions.

    A decision rendered by the Board pursuant to this subpart shall 
become final 60 days after the issuance of such decision unless a 
written petition for review praying that the order be modified or set 
aside, pursuant to section 21(c) of the LHWCA, is filed in the 
appropriate U.S. court of appeals prior to

[[Page 390]]

the expiration of the 60-day period herein described, or unless a timely 
request for reconsideration by the Board has been filed as provided in 
Sec.802.407. If a timely request for reconsideration has been filed, 
the 60-day period for filing such petition for review will run from the 
issuance of the Board's decision on reconsideration.

                             Reconsideration



Sec.802.407  Reconsideration of Board decisions.

    (a) Any party-in-interest may, within 30 days from the filing of a 
decision or non-interlocutory order by a panel or the Board pursuant to 
Sec.802.403(b), request reconsideration of such decision by those 
members who rendered the decision. The panel of members who heard and 
decided the appeal will rule on the motion for reconsideration. If any 
member of the original panel is unavailable, the Chariman shall 
designate a new panel member.
    (b) Except as provided in Sec.801.301(d), a party may, within 30 
days from the filing of a decision or non-interlocutory order by a panel 
of the Board pursuant to Sec.802.403(b), suggest the appropriateness 
of reconsideration by the permanent members sitting en banc. Such 
suggestion, however, must accompany a motion for reconsideration 
directed to the panel which rendered the decision. The suggestion for 
reconsideration en banc must be clearly marked as such.
    (c) Except as provided in Sec.801.301(d), even where no party has 
suggested reconsideration en banc, any permanent member may petition the 
permanent Board for reconsideration en banc of a panel decision.
    (d) Reconsideration en banc shall be granted upon the affirmative 
vote of the majority of permanent members of the Board. A panel decision 
shall stand unless vacated or modified by the concurring vote of at 
least three permanent members.



Sec.802.408  Notice of request for reconsideration.

    (a) In the event that a party requests reconsideration of a decision 
or order, he or she shall do so in writing, in the form of a motion, 
stating the supporting rationale for the request, and include any 
material pertinent to the request.
    (b) The request shall be sent by mail, or otherwise presented, to 
the Clerk of the Board. Copies shall be served on all other parties.



Sec.802.409  Grant or denial of request.

    All requests for reconsideration shall be reviewed by the Board and 
shall be granted or denied in the discretion of the Board.

                             Judicial Review



Sec.802.410  Judicial review of Board decisions.

    (a) Within 60 days after a decision by the Board has been filed 
pursuant to Sec.802.403(b), any party adversely affected or aggrieved 
by such decision may file a petition for review with the appropriate 
U.S. Court of Appeals pursuant to section 21(c) of the LHWCA.
    (b) The Director, OWCP, as designee of the Secretary of Labor 
responsible for the administration and enforcement of the statutes 
listed in Sec.802.101, shall be deemed to be the proper party on 
behalf of the Secretary of Labor in all review proceedings conducted 
pursuant to section 21(c) of the LHWCA.



Sec.802.411  Certification of record for judicial review.

    The record of a case including the record of proceedings before the 
Board shall be transmitted to the appropriate court pursuant to the 
rules of such court.

                        PARTS 803-899 [RESERVED]

[[Page 391]]



        CHAPTER VIII--JOINT BOARD FOR THE ENROLLMENT OF ACTUARIES




  --------------------------------------------------------------------
Part                                                                Page
900             Statement of organization...................         393
901             Regulations governing the performance of 
                    actuarial services under the Employee 
                    Retirement Income Security Act of 1974..         393
902             Rules regarding availability of information.         416
903             Access to records...........................         417
904-999         [Reserved]

[[Page 393]]



PART 900_STATEMENT OF ORGANIZATION--Table of Contents



Sec.
900.1 Basis.
900.2 Establishment.
900.3 Composition.
900.4 Meetings.
900.5 Staff.
900.6 Offices.
900.7 Delegations of authority.

    Authority: Sec. 3041-2, Pub. L. 93-406, 88 Stat. 829, 1002 (29 
U.S.C. 1241-2).

    Source: 40 FR 18776, Apr. 30, 1975, unless otherwise noted.



Sec.900.1  Basis.

    This statement is issued by the Joint Board for the Enrollment of 
Actuaries (the Joint Board) pursuant to the requirement of section 552 
of title 5 of the United States Code that every agency shall publish in 
the Federal Register a description of its central and field 
organization.



Sec.900.2  Establishment.

    The Joint Board has been established by the Secretary of Labor and 
the Secretary of the Treasury pursuant to section 3041 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1241). Bylaws of the 
Board have been issued by the two Secretaries. \1\
---------------------------------------------------------------------------

    \1\ Copy filed with the Office of the Federal Register. Copies may 
also be obtained from the Executive Director of the Board.
---------------------------------------------------------------------------



Sec.900.3  Composition.

    Pursuant to the Bylaws, the Joint Board consists of three members 
appointed by the Secretary of the Treasury and two appointed by the 
Secretary of Labor. The Board elects a Chairman from among the Treasury 
Representatives and a Secretary from among the Department of Labor 
Representatives. The Pension Benefit Guaranty Corporation may designate 
a non-voting representative to sit with, and participate in, the 
discussions of the Board. All decisions of the Board are made by simple 
majority vote.



Sec.900.4  Meetings.

    The Joint Board meets on the call of the Chairman at such times as 
are necessary in order to consider matters requiring action. Minutes are 
kept of each meeting by the Secretary.



Sec.900.5  Staff.

    (a) The Executive Director advises and assists the Joint Board 
directly in carrying out its responsibilities under the Act and performs 
such other functions as the Board may delegate to him.
    (b) Members of the staffs of the Departments of the Treasury and of 
Labor, by arrangement with the Joint Board, perform such services as may 
be appropriate in assisting the Board in the discharge of its 
responsibilities.



Sec.900.6  Offices.

    The Joint Board does not maintain offices separate from those of the 
Departments of the Treasury and Labor. Its post office address is Joint 
Board for the Enrollment of Actuaries, c/o Department of the Treasury, 
Washington, D.C. 20220.



Sec.900.7  Delegations of authority.

    As occasion warrants, the Joint Board may delegate functions to the 
Chairman or the Executive Director, including the authority to receive 
applications and to give notice of actions. Any such delegation of 
authority is conferred by resolution of the Board.



PART 901_REGULATIONS GOVERNING THE PERFORMANCE OF ACTUARIAL SERVICES UNDER THE 

EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974--Table of Contents



Sec.
901.0 Scope.

   Subpart A_Definitions and Eligibility To Perform Actuarial Services

901.1 Definitions.
901.2 Eligibility to perform actuarial services.

                    Subpart B_Enrollment of Actuaries

901.10 Application for enrollment.
901.11 Enrollment procedures.
901.12 Eligibility for enrollment.

[[Page 394]]

        Subpart C_Standards of Performance for Enrolled Actuaries

901.20 Standards of performance of actuarial services.

            Subpart D_Suspension or Termination of Enrollment

901.30 Authority to suspend or terminate enrollment.
901.31 Grounds for suspension or termination of enrollment.
901.32 Receipt of information concerning enrolled actuaries.
901.33 Initiation of proceeding.
901.34 Conferences.
901.35 Contents of complaint.
901.36 Service of complaint and other papers.
901.37 Answer.
901.38 Supplemental charges.
901.39 Reply to answer.
901.40 Proof; variance; amendment of pleadings.
901.41 Motions and requests.
901.42 Representation.
901.43 Administrative Law Judge.
901.44 Hearings.
901.45 Evidence.
901.46 Depositions.
901.47 Transcript.
901.48 Proposed findings and conclusions.
901.49 Decision of the Administrative Law Judge.
901.50 Appeal to the Joint Board.
901.51 Decision of the Joint Board.
901.52 Effect of suspension, termination or resignation of enrollment; 
          surrender of enrollment certificate.
901.53 Notice of suspension, termination or resignation of enrollment.
901.54 Petition for reinstatement.

                      Subpart E_General Provisions

901.70 Records.
901.71 Special orders.
901.72 Additional rules.

    Authority: Sec. 3042, subtitle C, title 3, Employee Retirement 
Income Security Act of 1974. (88 Stat. 1002, 29 U.S.C. 1241, 1242), 
unless otherwise noted.

    Source: 42 FR 39200, Aug. 3, 1977, unless otherwise noted.



Sec.901.0  Scope.

    This part contains rules governing the performance of actuarial 
services under the Employee Retirement Income Security Act of 1974, 
hereinafter also referred to as ERISA. Subpart A of this part sets forth 
definitions and eligibility to perform actuarial services; subpart B of 
this part sets forth rules governing the enrollment of actuaries; 
subpart C of this part sets forth standards of performance to which 
enrolled actuaries must adhere; subpart D sets forth rules applicable to 
suspension and termination of enrollment; and subpart E of this part 
sets forth general provisions.

[42 FR 39200, Aug. 3, 1977, as amended at 76 FR 17769, Mar. 31, 2011]



   Subpart A_Definitions and Eligibility To Perform Actuarial Services



Sec.901.1  Definitions.

    As used in this part, the term:
    (a) Actuarial experience means the performance of, or the direct 
supervision of, services involving the application of principles of 
probability and compound interest to determine the present value of 
payments to be made upon the fulfillment of certain specified conditions 
or the occurrence of certain specified events.
    (b) Responsible actuarial experience means actuarial experience:
    (1) Involving participation in making determinations that the 
methods and assumptions adopted in the procedures followed in actuarial 
services are appropriate in the light of all pertinent circumstances, 
and
    (2) Demonstrating a thorough understanding of the principles and 
alternatives involved in such actuarial services.
    (c) Month of responsible actuarial experience means a month during 
which the actuary spent a substantial amount of time in responsible 
actuarial experience.
    (d) Responsible pension actuarial experience means responsible 
actuarial experience involving valuations of the liabilities of pension 
plans, wherein the performance of such valuations requires the 
application of principles of life contingencies and compound interest in 
the determination, under one or more standard actuarial cost methods, of 
such of the following as may be appropriate in the particular case:
    (1) Normal cost.
    (2) Accrued liability.

[[Page 395]]

    (3) Payment required to amortize a liability or other amount over a 
period of time.
    (4) Actuarial gain or loss.
    (e) Month of responsible pension actuarial experience means a month 
during which the actuary spent a substantial amount of time in 
responsible pension actuarial experience.
    (f) Applicant means an individual who has filed an application to 
become an enrolled actuary.
    (g) Enrolled actuary means an individual who has satisfied the 
standards and qualifications as set forth in this part and who has been 
approved by the Joint Board for the Enrollment of Actuaries (the Joint 
Board), or its designee, to perform actuarial services required under 
ERISA or regulations thereunder.
    (h) Actuarial services means performance of actuarial valuations and 
preparation of any actuarial reports.
    (i) Certified responsible actuarial experience means responsible 
actuarial experience of an individual that has been certified in writing 
by the individual's supervisor.
    (j) Certified responsible pension actuarial experience means 
responsible pension actuarial experience of an individual that has been 
certified in writing by the individual's supervisor if the supervisor is 
an enrolled actuary. If the individual's supervisor is not an enrolled 
actuary, the pension actuarial experience must be certified in writing 
by both the supervisor and an enrolled actuary with knowledge of the 
individual's pension actuarial experience.
    (k) Enrollment cycle means the three-year period from January 1, 
2011, to December 31, 2013, and every three-year period thereafter.

[42 FR 39200, Aug. 3, 1977, as amended at 76 FR 17769, Mar. 31, 2011]



Sec.901.2  Eligibility to perform actuarial services.

    (a) Enrolled actuary. Subject to the standards of performance set 
forth in subpart C of this part, any individual who is an enrolled 
actuary as defined in Sec.901.1(g) may perform actuarial services 
required under ERISA or regulations thereunder. Where a corporation, 
partnership, or other entity is engaged to provide actuarial services, 
such services may be provided on its behalf only by an enrolled actuary 
who is an employee, partner or consultant.
    (b) Government officers and employees. No officer or employee of the 
United States in the executive, legislative, or judicial branch of the 
Government, or in any agency of the United States, including the 
District of Columbia, may perform actuarial services required under 
ERISA or regulations thereunder if such services would be in violation 
of 18 U.S.C. 205. No Member of Congress or Resident Commissioner (elect 
or serving) may perform such actuarial services if such services would 
be in violation of 18 U.S.C. 203 or 205.
    (c) Former government officers and employees--(1) Personal and 
substantial participation in the performance of actuarial services. No 
former officer or employee of the executive branch of the United States 
Government, of any independent agency of the United States, or of the 
District of Columbia, shall perform actuarial services required under 
ERISA or regulations thereunder or aid or assist in the performance of 
such actuarial services, in regard to particular matters, involving a 
specific party or parties, in which the individual participated 
personally and substantially as such officer or employee.
    (2) Official responsibility. No former officer or employee of the 
executive branch of the United States Government, of any independent 
agency of the United States, or of the District of Columbia, shall, 
within 1 year after his employment has ceased, perform actuarial 
services required under ERISA or regulations thereunder in regard to any 
particular matter involving a specific party or parties which was under 
the individual's official responsibility as an officer or employee of 
the Government at any time within a period of 1 year prior to the 
termination of such responsibility.



                    Subpart B_Enrollment of Actuaries



Sec.901.10  Application for enrollment.

    (a) Form. As a requirement for enrollment, an applicant shall file 
with the Executive Director of the Joint Board a properly executed 
application on a form or forms specified by the Joint

[[Page 396]]

Board, and shall agree to comply with these regulations and any other 
guidance as required by the Joint Board. A reasonable non-refundable fee 
may be charged for each application for enrollment filed.
    (b) Additional information. The Joint Board or Executive Director, 
as a condition to consideration of an application for enrollment, may 
require the applicant to file additional information and to submit to 
written or oral examination under oath or otherwise.
    (c) Denial of application. If the Joint Board proposes to deny an 
application for enrollment, the Executive Director shall notify the 
applicant in writing of the proposed denial and the reasons therefor, of 
his rights to request reconsideration, of the address to which such 
request should be made and the date by which such request must be made. 
The applicant may, within 30 days from the date of the written proposed 
denial, file a written request for reconsideration therefrom, together 
with his reasons in support thereof, to the Joint Board. The Joint Board 
may afford an applicant the opportunity to make a personal appearance 
before the Joint Board. A decision on the request for reconsideration 
shall be rendered by the Joint Board as soon as practicable. In the 
absence of a request for reconsideration within the aforesaid 30 days, 
the proposed denial shall, without further proceeding, constitute a 
final decision of denial by the Joint Board.

[42 FR 39200, Aug. 3, 1977, as amended at 76 FR 17769, Mar. 31, 2011]



Sec.901.11  Enrollment procedures.

    (a) Enrollment. The Joint Board shall enroll each applicant it 
determines has met the requirements of these regulations, and any other 
guidance as required by the Joint Board, and shall so notify the 
applicant. Subject to the provisions of subpart D of this part, an 
individual must renew his or her enrollment in the manner described in 
paragraph (d) of this section.
    (b) Enrollment certificate. The Joint Board (or its designee) shall 
issue a certificate of enrollment to each actuary who is duly enrolled 
under this part.
    (c) Rosters--(1) Maintenance of rosters. The Executive Director 
shall maintain rosters of--
    (i) All actuaries who are duly enrolled under this part;
    (ii) All individuals whose enrollment has been suspended or 
terminated; and
    (iii) All individuals who are in inactive status.
    (2) Publication of rosters. The Executive Director may publish any 
or all of the rosters, including display on the Joint Board's Web site, 
to the extent permitted by law.
    (d) Renewal of enrollment. To maintain active enrollment to perform 
actuarial services under ERISA, each enrolled actuary is required to 
have his/her enrollment renewed as set forth herein.
    (1) Each enrolled actuary must file an application for renewal of 
enrollment on the prescribed form no earlier than October 1, 2010, and 
no later than March 1, 2011, and no earlier than October 1 and no later 
than March 1 of every third year thereafter. If March 1 is a Saturday, 
Sunday, or holiday, the due date shall be the next day that is not a 
Saturday, Sunday, or holiday.
    (2) The effective date of renewal of enrollment for an individual 
who files a complete renewal application within the time period 
described in paragraph (d)(1) of this section is the April 1 immediately 
following the date of application. The effective date of renewal of 
enrollment for an individual who files a complete renewal application 
after the due date described in paragraph (d)(1) of this section is the 
later of the April 1 immediately following the due date of application 
and the date of the notice of renewal.
    (3) Forms required for renewal may be obtained from the Executive 
Director.
    (4) A reasonable non-refundable fee may be charged for each 
application for renewal of enrollment filed.
    (e) Condition for renewal: Continuing professional education. To 
qualify for renewal of enrollment, an enrolled actuary must certify, on 
the form prescribed by the Executive Director, that he/she has completed 
the applicable minimum number of hours of continuing professional 
education credit

[[Page 397]]

required by this paragraph (e) and satisfied the recordkeeping 
requirements of paragraph (j) of this section.
    (1) Transition rule for renewal of enrollment effective April 1, 
2011. (i) A minimum of 36 hours of continuing professional education 
credit must be completed between January 1, 2008 and December 31, 2010. 
Of the 36 hours, at least 18 must consist of core subject matter; the 
remainder may be non-core subject matter.
    (ii) An individual who received initial enrollment in 2008 must 
complete 24 hours of continuing professional education by December 31, 
2010. An individual who received initial enrollment in 2009 must 
complete 12 hours of continuing professional education by December 31, 
2010. In either case, at least one-half of the applicable hours must 
consist of core subject matter; the remainder may consist of non-core 
subject matter. For purposes of this paragraph (e)(1)(ii), credit will 
be awarded for continuing professional education completed after January 
1 of the year in which initial enrollment was received.
    (iii) An individual who receives initial enrollment during 2010 is 
exempt from the continuing professional education requirements during 
2010, but must file a timely application for renewal during the time 
period described in paragraph (d)(1) of this section.
    (2) For renewal of enrollment effective April 1, 2014, and every 
third year thereafter. (i) A minimum of 36 hours of continuing 
professional education credit must be completed between January 1, 2011 
and December 31, 2013, and between January 1 and December 31 for each 
three-year period subsequent thereto.
    (ii) An individual who receives initial enrollment during the first 
or second year of an enrollment cycle must satisfy the following 
requirements by the end of the enrollment cycle: Those enrolled during 
the first year of an enrollment cycle must complete 24 hours of 
continuing education; those enrolled during the second year of an 
enrollment cycle must complete 12 hours of continuing education. At 
least one-half of the applicable hours must be comprised of core subject 
matter; the remainder may be comprised of non-core subject matter. For 
purposes of this paragraph (e)(2)(ii), credit will be awarded for 
continuing professional education completed after January 1 of the year 
in which initial enrollment was received.
    (iii) An individual who receives initial enrollment during the third 
year of an enrollment cycle is exempt from the continuing education 
requirements until the next enrollment cycle, but must file a timely 
application for renewal.
    (iv) For an individual who was initially enrolled before January 1, 
2008 (and who has therefore completed at least one full enrollment cycle 
as of January 1, 2011), at least 12 hours of the 36 hours of continuing 
professional education required for each enrollment cycle must consist 
of core subject matter; the remainder may consist of non-core subject 
matter.
    (v) For an individual who was initially enrolled on or after January 
1, 2008, at least 18 hours of his or her 36 hours of continuing 
professional education required for the first full enrollment cycle must 
consist of core subject matter. Thereafter, for such individuals, for 
each subsequent enrollment cycle at least 12 hours of the 36 hours must 
consist of core subject matter. In each instance, the remainder may 
consist of non-core subject matter.
    (vi) When core subject matter hours are required (including when an 
individual seeks to return to active status from inactive status), an 
individual must complete a minimum of two hours of continuing 
professional education credit relating to ethical standards, regardless 
of the total number of core hours required.
    (f) Qualifying continuing professional education--(1) In general. To 
qualify for continuing professional education credit an enrolled actuary 
must complete his/her hours of continuing professional education credit 
under a qualifying program, within the meaning of paragraph (f)(2) of 
this section, consisting of core and/or non-core subject matter. In 
addition, a portion of the continuing professional education credit may 
be earned under the provisions of paragraph (g) of this section. In any 
event, no less than \1/3\ of the total hours of continuing professional 
education credit required for an enrollment cycle

[[Page 398]]

must be obtained by participation in a formal program or programs, 
within the meaning of paragraph (f)(2)(ii)(A) of this section.
    (i) Core subject matter is program content and knowledge that is 
integral and necessary to the satisfactory performance of pension 
actuarial services and actuarial certifications under ERISA and the 
Internal Revenue Code. Such core subject matter includes the 
characteristics of actuarial cost methods under ERISA, actuarial 
assumptions, minimum funding standards, titles I, II, and IV of ERISA, 
requirements with respect to the valuation of plan assets, requirements 
for qualification of pension plans, maximum deductible contributions, 
tax treatment of distributions from qualified pension plans, excise 
taxes related to the funding of qualified pension plans and standards of 
performance (including ethical standards) for actuarial services. Core 
subject matter includes all materials included on the syllabi of any of 
the pension actuarial examinations offered by the Joint Board during the 
current enrollment cycle and the enrollment cycle immediately preceding 
the current enrollment cycle.
    (ii) Non-core subject matter is program content designed to enhance 
the knowledge of an enrolled actuary in matters related to the 
performance of pension actuarial services. Examples include economics, 
computer programming, pension accounting, investment and finance, risk 
theory, communication skills, and business and general tax law.
    (iii) The Joint Board may publish other topics or approve other 
topics which may be included in a qualifying program as core or non-core 
subject matter.
    (iv) The same course of study cannot be used more than once within a 
given 36-month period to satisfy the continuing professional education 
requirements of these regulations. A program or session bearing the same 
or a similar title to a previous one may be used to satisfy the 
requirements of these regulations if the major content of the program or 
session differs substantively from the previous one.
    (2) Qualifying program--(i) In general. A qualifying program is a 
course of learning that--
    (A) Is conducted by a qualifying sponsor, within the meaning of 
paragraph (f)(3) of this section, who identifies the program as a 
qualifying program;
    (B) Is developed by individual(s) qualified in the subject matter;
    (C) Covers current subject matter;
    (D) Includes written outlines or textbooks;
    (E) Is taught by instructors, discussion leaders, and speakers 
qualified with respect to the course content;
    (F) Includes means for evaluation by the Joint Board of technical 
content and presentation;
    (G) Provides a certificate of completion, within the meaning of 
paragraph (f)(3)(iv) of this section, to each person who successfully 
completed the program; and
    (H) Provides a certificate of instruction, within the meaning of 
paragraph (f)(3)(v) of this section, to each person who served an 
instructor, discussion leader, or speaker.
    (ii) Formal programs--(A) Participants. Formal programs are programs 
that meet all of the requirements of this paragraph (f)(2)(ii) and 
paragraph (f)(2)(i) of this section. Whether a program qualifies as a 
formal program is determined on a participant-by-participant basis. A 
qualifying program qualifies as a formal program with respect to a 
participant if the participant simultaneously participates in the 
program in the same physical location with at least two other 
participants engaged in substantive pension service, and the 
participants have the opportunity to interact with another individual 
qualified with respect to the course content who serves as an 
instructor, whether or not the instructor is in the same physical 
location. Groups of three or more participants who are in the same 
physical location may participate in a formal program in person or via 
the Internet, videoconferencing, or teleconferencing. If the qualifying 
program is pre-recorded, to qualify as a formal program, there must be a 
qualified individual who serves as the instructor and is

[[Page 399]]

available to answer questions immediately following the pre-recorded 
program.
    (B) Instructor. A qualifying program is a formal program with 
respect to the instructor only if the program is a formal program under 
paragraph (f)(2)(ii)(A) of this section with respect to at least three 
participants and the instructor is in the physical presence of at least 
three other individuals engaged in substantive pension service.
    (3) Qualifying sponsors--(i) In general. Qualifying sponsors are 
organizations recognized by the Executive Director whose programs offer 
opportunities for continuing professional education in subject matter 
within the scope of this section.
    (ii) Recognition by the Executive Director. An organization 
requesting qualifying sponsor status shall file a sponsor agreement 
request with the Executive Director and furnish information in support 
of such request as deemed necessary for approval by the Executive 
Director. Such information shall include sufficient information to 
establish that all programs designated as qualifying programs offered by 
the qualifying sponsor will satisfy the requirements of paragraph (f)(2) 
of this section. Recognition as a qualifying sponsor by the Executive 
Director shall be effective when approved, unless the Executive Director 
provides that it shall be effective on a different date, and shall 
terminate at the end of the sponsor enrollment cycle. The Executive 
Director may publish the names of such sponsors on a periodic basis.
    (iii) Sponsor enrollment cycle--(A) Transition sponsor enrollment 
cycle. The transition sponsor enrollment cycle is the period beginning 
on January 1, 2008 and ending December 31, 2011.
    (B) Subsequent sponsor enrollment cycles. After the transition 
sponsor enrollment cycle, the sponsor enrollment cycle means the three-
year period from January 1, 2012, to December 31, 2014, and every three-
year period thereafter.
    (iv) Certificates of completion. Upon verification of successful 
completion of a qualifying program, the program's qualifying sponsor 
shall furnish each individual who successfully completed the qualifying 
program with a certificate listing the following information:
    (A) The name of the participant.
    (B) The name of the qualifying sponsor.
    (C) The title, location, and speaker(s) of each session attended.
    (D) The dates of the program.
    (E) The total credit hours earned, the total core and non-core 
credit hours earned, and how many of those hours relate to ethics.
    (F) Whether or not the program is a formal program with respect to 
the participant.
    (v) Certificates of instruction. The program's qualifying sponsor 
shall furnish to each instructor, discussion leader, or speaker, a 
certificate listing the following information:
    (A) The name of the instructor, discussion leader, or speaker.
    (B) The name of the qualifying sponsor.
    (C) The title and location of the program.
    (D) The dates of the program.
    (E) The total credit hours earned and the total core and non-core 
credit hours earned for the program, and how many of those hours relate 
to ethics.
    (F) Whether or not the program is a formal program with respect to 
the instructor.
    (g) Alternative means for completion of credit hours--(1) In 
general. In addition to credit hours completed under paragraph (f) of 
this section, an enrolled actuary may be awarded continuing professional 
education credit under the provisions of this paragraph (g).
    (2) Serving as an instructor, discussion leader or speaker. (i) Four 
credit hours (that is, 200 minutes) of continuing professional education 
credit will be awarded for each 50 minutes completed as an instructor, 
discussion leader, or speaker at a qualifying program which meets the 
continuing professional education requirements of paragraph (f) of this 
section. If the qualifying program is a formal program with respect to 
the instructor, only the time spent during the actual program is counted 
toward satisfaction of the formal program requirement.
    (ii) The credit for instruction and preparation may not exceed 50 
percent of the continuing professional education requirement for an 
enrollment cycle.

[[Page 400]]

    (iii) Presentation of the same material as an instructor, discussion 
leader, or speaker more than one time in any 36-month period will not 
qualify for continuing professional education credit. A program will not 
be considered to consist of the same material if a substantial portion 
of the content has been revised to reflect changes in the law or 
practices relative to the performance of pension actuarial service.
    (iv) Credit as an instructor, discussion leader, or speaker will not 
be awarded to panelists, moderators, or others who are not required to 
prepare substantive subject matter for their portion of the program. 
However, such individuals may be awarded credit for attendance, provided 
the other provisions of this section are met.
    (v) The nature of the subject matter will determine if credit will 
be of a core or non-core nature.
    (3) Credit for publications. (i) Continuing professional education 
credit will be awarded for the creation of peer-reviewed materials for 
publication or distribution with respect to matters directly related to 
the continuing professional education requirements of this section. 
Credit will be awarded to the author, co-author, or a person listed as a 
major contributor.
    (ii) One hour of credit will be allowed for each hour of preparation 
time of the material. It will be the responsibility of the person 
claiming the credit to maintain records to verify preparation time.
    (iii) Publication or distribution may utilize any available 
technology for the dissemination of written, visual or auditory 
materials.
    (iv) The materials must be available on reasonable terms for 
acquisition and use by all enrolled actuaries.
    (v) The credit for the creation of materials may not exceed 25 
percent of the continuing professional education requirement of any 
enrollment cycle.
    (vi) The nature of the subject matter will determine if credit will 
be of a core or non-core nature.
    (vii) Publication of the same material more than one time will not 
qualify for continuing professional education credit. A publication will 
not be considered to consist of the same material if a substantial 
portion has been revised to reflect changes in the law or practices 
relative to the performance of pension actuarial service.
    (4) Service on Joint Board advisory committee(s). Continuing 
professional education credit may be awarded by the Joint Board for 
service on (any of) its advisory committee(s), to the extent that the 
Joint Board considers warranted by the service rendered.
    (5) Preparation of Joint Board examinations. Continuing professional 
education credit may be awarded by the Joint Board for participation in 
drafting questions for use on Joint Board examinations or in pretesting 
its examinations, to the extent the Joint Board determines suitable. 
Such credit may not exceed 50 percent of the continuing professional 
education requirement for the applicable enrollment cycle.
    (6) Examinations sponsored by professional organizations or 
societies. Individuals may earn continuing professional education credit 
for achieving a passing grade on proctored examinations sponsored by a 
professional organization or society recognized by the Joint Board. Such 
credit is limited to the number of hours scheduled for each examination 
and may be applied only as non-core credit provided the content of the 
examination is core or non-core. No credit may be earned for hours 
attributable to any content that is neither core nor non-core.
    (7) Joint Board pension examination. Individuals may establish 
eligibility for renewal of enrollment for any enrollment cycle by--
    (i) Achieving a passing score on the Joint Board pension 
examination, as described in Sec.901.12(d)(1)(i), administered under 
this part during the applicable enrollment cycle; and
    (ii) Completing a minimum of 12 hours of qualifying continuing 
professional education by attending formal program(s) during the same 
applicable enrollment cycle. This option of satisfying the continuing 
professional education requirements is not available to those who 
receive initial enrollment during the enrollment cycle.
    (h) Measurement of continuing education course work. (1) All 
continuing education programs will be measured in terms of credit hours. 
The shortest

[[Page 401]]

recognized program will be one credit hour.
    (2) A credit hour is 50 minutes of continuous participation in a 
program. Each session in a program must be at least one full credit 
hour, i.e., 50 minutes. For example, a single-session program lasting 
100 minutes will count as two credit hours, and a program comprised of 
three 75 minute sessions (225 minutes) constitutes four credit hours. 
However, at the end of an enrollment cycle, an individual may total the 
number of minutes of sessions of at least one credit hour in duration 
attended during the cycle and divide by fifty. For example, attending 
three 75 minute segments at two separate programs will accord an 
individual nine credit hours (450 minutes divided by 50) toward 
fulfilling the minimum number of continuing professional education 
hours. It will not be permissible to merge non-core hours with core 
hours.
    (i) [Reserved]
    (j) Recordkeeping requirements--(1) Qualifying sponsors. A 
qualifying sponsor must maintain records to verify that each program it 
sponsors is a qualifying program within the meaning of paragraph (f)(2) 
of this section, including the certificates of completion, certificates 
of instruction, and outlines and course material. In the case of 
programs of more than one session, records must be maintained to verify 
each session of the program that is completed by each participant. 
Records required to be maintained under this paragraph must be retained 
by the qualifying sponsor for a period of six years following the end of 
the sponsor enrollment cycle in which the program is held.
    (2) Enrolled actuaries--(i) Qualifying program credits as a 
participant. To receive continuing professional education credit for 
completion of hours of continuing professional education under paragraph 
(f) of this section, an enrolled actuary must retain all certificates of 
completion evidencing completion of such hours for the three-year period 
following the end of the enrollment cycle in which the credits are 
earned.
    (ii) Qualifying program credits as an instructor, discussion leader, 
or speaker. To receive continuing professional education credit for 
completion of hours earned under paragraph (g)(2) of this section, an 
enrolled actuary must retain all certificates of instruction evidencing 
completion of such hours for the three-year period following the end of 
the enrollment cycle in which the credits are earned.
    (iii) Credit for publications. To receive continuing professional 
education credit for a publication under paragraph (g)(3) of this 
section, the following information must be maintained by the enrolled 
actuary for the three-year period following the end of the enrollment 
cycle in which the credits are earned:
    (A) The name of the publisher.
    (B) The title and author of the publication.
    (C) A copy of the publication.
    (D) The date of the publication.
    (E) The total credit hours earned, and the total core and non-core 
credit hours earned, and how many of those hours relate to ethics.
    (iv) Other credits. To receive continuing professional education 
credit for hours earned under paragraphs (g)(4) through (g)(7) of this 
section, an enrolled actuary must retain sufficient documentation to 
establish completion of such hours for the three-year period following 
the end of the enrollment cycle in which the credits are earned.
    (k) Waivers. (1) Waiver from the continuing professional education 
requirements for a given period may be granted by the Executive Director 
only under extraordinary circumstances, and upon submission of 
sufficient evidence that every effort was made throughout the enrollment 
cycle to participate in one or more qualifying programs that would have 
satisfied the continuing professional education requirements.
    (2) A request for waiver must be accompanied by appropriate 
documentation. The individual will be required to furnish any additional 
documentation or explanation deemed necessary by the Executive Director.
    (3) The individual will be notified by the Executive Director of the 
disposition of the request for waiver. If the waiver is not approved, 
and the individual does not otherwise satisfy the

[[Page 402]]

continuing professional education requirements within the allotted time, 
the individual will be placed on the roster of inactive enrolled 
individuals.
    (4) Individuals seeking to rely on a waiver of the continuing 
professional education requirements must receive the waiver from the 
Executive Director before filing an application for renewal of 
enrollment.
    (l) Failure to comply. (1) Compliance by an individual with the 
requirements of this part shall be determined by the Executive Director. 
An individual who applies for renewal of enrollment but who fails to 
meet the requirements of eligibility for renewal will be notified by the 
Executive Director at his/her last known address by first class mail. 
The notice will state the basis for the non-compliance and will provide 
the individual an opportunity to furnish in writing, within 60 days of 
the date of the notice, information relating to the matter. Such 
information will be considered by the Executive Director in making a 
final determination as to eligibility for renewal of enrollment.
    (2) The Executive Director may require any individual, by first 
class mail sent to his/her mailing address of record with the Joint 
Board, to provide copies of any records required to be maintained under 
this section. The Executive Director may disallow any continuing 
professional education hours claimed if the individual concerned fails 
to comply with such requirements.
    (3) An individual whose application for renewal is not approved may 
seek review of the matter by the Joint Board. A request for review and 
the reasons in support of the request must be filed with the Joint Board 
within 30 days of the date of the notice of failure to comply.
    (4) Inactive status--(i) Automatic placement on the inactive roster. 
To remain on the roster of active enrolled actuaries, an enrolled 
actuary must submit a timely application for renewal showing 
satisfaction of the requirements for reenrollment, including completion 
of the required continuing professional education hours, within the 
appropriate time frame. The Executive Director will move an enrolled 
actuary who does not submit such an application for reenrollment from 
the roster of enrolled actuaries to the roster of inactive enrolled 
actuaries as of April 1 following the March 1 due date for the 
application. However, if an enrolled actuary completes the required 
number of continuing professional education hours after the close of the 
enrollment cycle, submits an application for reenrollment, and is 
informed by the Executive Director before April 1st that the enrollment 
has been renewed, then the Executive Director will not move such 
individual to the roster of inactive enrolled actuaries at that time.
    (ii) Placement on the inactive roster after notice and right to 
respond. The Executive Director will move an enrolled actuary who does 
not submit a timely application of renewal that shows timely completion 
of the required continuing professional education to the inactive roster 
only after giving the enrolled actuary 60 days to respond as described 
in paragraph (l)(1) of this section.
    (iii) Length on time on inactive roster. An individual may remain on 
the roster of inactive enrolled actuaries for a period up to three 
enrollment cycles from the date renewal would have been effective.
    (iv) Consequence of being on the inactive roster. An individual in 
inactive status will be ineligible to perform pension actuarial services 
as an enrolled actuary under ERISA and the Internal Revenue Code. During 
such time in inactive status or at any other time an individual is 
ineligible to perform pension actuarial services as an enrolled actuary, 
the individual shall not in any manner, directly or indirectly, indicate 
he or she is so enrolled, or use the term ``enrolled actuary,'' the 
designation ``E.A.,'' or other form of reference to eligibility to 
perform pension actuarial services as an enrolled actuary.
    (v) Returning to active status. An individual placed in inactive 
status may return to active status by filing an application for renewal 
of enrollment (with the appropriate fee) and providing evidence of the 
completion of all required continuing professional education hours and 
of satisfaction of any applicable requirements for qualifying experience 
under paragraph (l)(7) of

[[Page 403]]

this section. If an application for return to active status is approved, 
the individual will be eligible to perform services as an enrolled 
actuary effective with the date the notice of approval is mailed to that 
individual by the Executive Director.
    (5) Time for return to active enrollment. (i) An individual placed 
in inactive status must file an application for return to active 
enrollment, and satisfy the requirements for return to active enrollment 
as set forth in this section, within three enrollment cycles of being 
placed in inactive status. Otherwise, the name of such individual will 
be removed from the inactive enrollment roster and his/her enrollment 
will terminate.
    (ii) For purposes of paragraph (l)(5)(i) of this section, an 
individual who is in inactive or retired status as of April 1, 2010, 
will be deemed to have been placed in inactive status on April 1, 2010.
    (6) An individual in inactive status may satisfy the requirements 
for return to active enrollment at any time during his/her period of 
inactive enrollment. If only completion of the continuing professional 
education requirement is necessary, the application for return to active 
enrollment may be filed immediately upon such completion. If qualifying 
experience is also required, the application for return to active 
enrollment may not be filed until the completion of both the continuing 
professional education and qualifying experience requirements set forth 
in this subsection. Continuing professional education credits applied to 
meet the requirements for reenrollment under this paragraph (l)(6) may 
not be used to satisfy the requirements of the enrollment cycle in which 
the individual has been placed back on the active roster.
    (7) Continuing professional education requirements for return to 
active enrollment from inactive status. (i) During the first inactive 
enrollment cycle; 36 hours of qualifying continuing professional 
education as set forth in paragraph (e)(2) of this section, without 
regard to paragraph (e)(2)(ii) or (e)(2)(iii) of this section, must be 
completed. Any hours of continuing professional education credit earned 
during the immediately prior enrollment cycle may be applied in 
satisfying this requirement.
    (ii) During the second inactive enrollment cycle; four-thirds of the 
qualifying continuing professional education requirements as set forth 
in paragraph (e)(2) of this section (that is, 48 hours), without regard 
to paragraph (e)(2)(ii) or (e)(2)(iii) of this section, plus eighteen 
months of certified responsible pension actuarial experience, must be 
completed since the start of the first inactive enrollment cycle. Any 
hours of continuing professional education credit earned during the 
first inactive enrollment cycle may be applied in satisfying this 
requirement.
    (iii) During the third inactive enrollment cycle: Five-thirds of the 
qualifying continuing professional education requirements as set forth 
in paragraph (e)(2) of this section, (that is, 60 hours), without regard 
to paragraph (e)(2)(ii) or (e)(2)(iii) of this section plus eighteen 
months of certified responsible pension actuarial experience, must be 
completed since the start of the second inactive enrollment cycle. Any 
hours of continuing professional education credit earned during the 
second inactive enrollment cycle may be applied in satisfying this 
requirement. No hours earned during the first inactive enrollment cycle 
may be applied in satisfying this requirement.
    (8) An individual in inactive status remains subject to the 
jurisdiction of the Joint Board and/or the Department of the Treasury 
with respect to disciplinary matters.
    (9) An individual who has certified in good faith that he/she has 
satisfied the continuing professional education requirements of this 
section will not be considered to be in non-compliance with such 
requirements on the basis of a program he/she has attended later being 
found inadequate or not in compliance with the requirements for 
continuing professional education. Such individual will be granted 
renewal, but the Executive Director may require such individual to 
remedy the resulting shortfall by earning replacement credit during the 
cycle in which renewal was granted or within a reasonable time period as 
determined by the Executive Director. For example, if six of the credit 
hours claimed were disallowed,

[[Page 404]]

the individual may be required to present 42 credit hours instead of the 
minimum 36 credit hours to qualify for renewal related to the next 
cycle.
    (m) Renewal while under suspension or disbarment. An individual who 
is ineligible to perform actuarial services and/or to practice before 
the Internal Revenue Service by virtue of disciplinary action is 
required to meet the requirements for renewal of enrollment during the 
period of such ineligibility.
    (n) Verification. The Executive Director or his/her designee may 
request and review the continuing professional education records of an 
enrolled actuary, including programs attended, in a manner deemed 
appropriate to determine compliance with the requirements and standards 
for the renewal of enrollment as provided in this section. The Executive 
Director may also request and review the records of any qualifying 
sponsor in a manner deemed appropriate to determine compliance with the 
requirements of paragraphs (f)(3) and (j)(1) of this section.
    (o) Examples. The following examples illustrate the application of 
the rules of paragraph (l)(7) of this section and the effective date of 
an enrolled actuary's renewal:

    Example 1. Individual E, who was initially enrolled before January 
1, 2008, completes 12 hours of core continuing professional education 
credit and 24 hours of non-core continuing professional education credit 
between January 1, 2011, and December 31, 2013. E files a complete 
application for reenrollment on February 28, 2014. E's reenrollment is 
effective as of April 1, 2014.
    Example 2. Individual F, who was initially enrolled before January 
1, 2008, also completes 12 hours of core continuing professional 
education credit and 24 hours of non-core continuing professional 
education credit between January 1, 2011, and December 31, 2013. 
However, F does not file an application for reenrollment until March 20, 
2014. The Joint Board notifies F that it has granted F's application on 
June 25, 2014. Accordingly, effective April 1, 2014, F is placed on the 
roster of inactive enrolled actuaries. F returns to active status as of 
June 25, 2014. F is ineligible to perform pension actuarial services as 
an enrolled actuary under ERISA and the Internal Revenue Code from April 
1 through June 24, 2014.
    Example 3. Individual G, who was initially enrolled before January 
1, 2008, completes only 8 hours of core continuing professional 
education credit and 24 hours of non-core continuing professional 
education credit between January 1, 2011, and December 31, 2013. G 
completes another 6 hours of core continuing professional education on 
January 15, 2014, and files an application for return to active status 
on January 20, 2014. G's application shows the timely completion of 32 
hours of continuing professional education plus the additional 4 hours 
of continuing professional education earned after the end of the 
enrollment cycle. The Joint Board notifies G that it has granted the 
application on April 20, 2014. Accordingly, effective April 1, 2014, G 
is placed on the roster of inactive enrolled actuaries. G returns to 
active status as of April 20, 2014. G is ineligible to perform pension 
actuarial services as an enrolled actuary under ERISA and the Internal 
Revenue Code from April 1 through April 19, 2014. Of the 6 hours of 
continuing professional education earned by G on January 15, 2014, only 
2 hours may be applied to the enrollment cycle that ends December 31, 
2016.
    Example 4. (i) Individual H, who was initially enrolled before 
January 1, 2008, completes 5 hours of core continuing professional 
education credit and 10 hours of non-core continuing professional 
education credit between January 1, 2011, and December 31, 2013. 
Accordingly, effective April 1, 2014, H is placed on the roster of 
inactive enrolled actuaries and is ineligible to perform pension 
actuarial services as an enrolled actuary under ERISA and the Internal 
Revenue Code.
    (ii) H completes 7 hours of core continuing professional education 
credit and 14 hours of noncore continuing professional education credit 
between January 1, 2014, and May 24, 2016. Because H has completed 12 
hours of core continuing professional education and 24 hours of non-core 
continuing professional education during the last active enrollment 
period and the initial period when on inactive status, H has satisfied 
the requirements for reenrollment during the first inactive cycle. 
Accordingly, H may file an application for return to active enrollment 
on May 24, 2016. If this application is approved, H will be eligible to 
perform pension actuarial services as an enrolled actuary under ERISA 
and the Internal Revenue Code, effective with the date of such approval.
    (iii) Because H used the 21 hours of continuing professional 
education credit earned after January 1, 2014, for return from inactive 
status, H may not apply any of these 21 hours of core and non-core 
continuing professional education credits towards the requirements for 
renewed enrollment effective April 1, 2017. Accordingly, H must complete 
an additional 36 hours of continuing professional education (12 core and 
24 non-core) prior to December 31, 2016, to be eligible for renewed 
enrollment effective April 1, 2017.
    Example 5. (i) The facts are the same as in Example 4 except H 
completes 2 hours of core continuing professional education credit and

[[Page 405]]

8 hours of non-core continuing professional education credit between 
January 1, 2014, and December 31, 2016. Thus, because H did not fulfill 
the requirements for return to active status during his first inactive 
cycle, H must satisfy the requirements of paragraph (l)(7)(ii) of this 
section in order to return to active status.
    (ii) Accordingly, in order to be eligible to file an application for 
return to active status on or before December 31, 2019, H must complete 
an additional 38 hours of continuing professional education credit (of 
which at least 14 hours must consist of core subject matter) between 
January 1, 2017, and December 31, 2019, and have 18 months of certified 
responsible pension actuarial experience during the period beginning on 
January 1, 2014.
    (iii) Note that the 5 hours of core continuing professional 
education credit and the 10 hours of non-core continuing professional 
education credit that H completes between January 1, 2011, and December 
31, 2013, are not counted toward H's return to active status and are 
also not taken into account toward the additional hours of continuing 
professional education credit that H must complete between January 1, 
2017, and December 31, 2019, in order to apply for renewal of enrollment 
effective April 1, 2020.
    Example 6. (i) The facts are the same as in Example 4 except H 
completes 2 hours of core continuing professional education credit and 8 
hours of non-core continuing professional education credit between 
January 1, 2014, and December 31, 2016, and 12 hours of core continuing 
professional education credit and 24 hours of non-core continuing 
professional education credit between January 1, 2017, and December 31, 
2019. Thus, because H did not fulfill the requirements for return to 
active status during his first or second inactive cycles, H must satisfy 
the requirements of paragraph (l)(7)(iii) of this section in order to 
return to active status.
    (ii) Accordingly, in order to be eligible to file an application for 
return to active status on or before December 31, 2022, H must complete 
an additional 24 hours of continuing professional education credit (of 
which, at least 8 hours must consist of core subject matter) between 
January 1, 2020 and December 31, 2022, and have at least 18 months of 
certified responsible pension actuarial experience during the period 
beginning on January 1, 2017.
    (iii) Note that the total of 15 hours of continuing professional 
education credit that H completes between January 1, 2011, and December 
31, 2013, as well as the 10 hours of continuing professional education 
credit between January 1, 2014, and December 31, 2016, are not counted 
toward H's return to active status and are not taken into account toward 
the additional hours of continuing professional education credit that H 
must complete between January 1, 2020, and December 31, 2022, in order 
to be eligible to file an application for renewal of enrollment active 
status effective April 1, 2023.
    Example 7. (i) Individual J, who was initially enrolled July 1, 
2012, completes 1 hour of core continuing professional education credit 
and 2 hours of non-core continuing professional education credit between 
January 1, 2012, and December 31, 2013. Accordingly, effective April 1, 
2014, J is placed on the roster of inactive enrolled actuaries and is 
ineligible to perform pension actuarial services as an enrolled actuary 
under ERISA and the Internal Revenue Code.
    (ii) J completes 5 hours of core continuing professional education 
credit and 4 hours of non-core continuing professional education credit 
between January 1, 2014, and October 6, 2014. Because J did not complete 
the required 12 hours of continuing professional education (of which at 
least 6 hours must consist of core subject matter) during J's initial 
enrollment cycle, J is not eligible to file an application for a return 
to active enrollment on October 6, 2014, notwithstanding the fact that 
had J completed such hours between January 1, 2012, and December 31, 
2013, J would have satisfied the requirements for renewed enrollment 
effective April 1, 2014.
    (iii) Accordingly, J must complete an additional 24 hours of 
continuing professional education (of which at least 12 hours must 
consist of core subject matter) during his/her first inactive enrollment 
cycle before applying for renewal of enrollment.
    Example 8. The facts are the same as in Example 7 except that J 
completes 17 hours of core continuing professional education credit and 
16 hours of non-core continuing professional education credit between 
January 1, 2014, and February 12, 2015. Accordingly, because as of 
February 12, 2015, J satisfied the continuing professional education 
requirements as set forth in paragraph (e)(2) of this section without 
regard to paragraph (e)(2)(ii) thereof, J may file an application for 
return to active enrollment status on February 12, 2015.

    (p) With the exception of paragraphs (e)(1) and (f)(3)(iii) of this 
section, this section applies to the enrollment cycle beginning January 
1, 2011, and all subsequent enrollment cycles.

[42 FR 39200, Aug. 3, 1977, as amended at 53 FR 34484, Sept. 7, 1988; 76 
FR 17769, Mar. 31, 2011; 76 FR 81363, Dec. 28, 2011]



Sec.901.12  Eligibility for enrollment.

    (a) In general. An individual applying to be an enrolled actuary 
must fulfill

[[Page 406]]

the experience requirement of paragraph (b) of this section, the basic 
actuarial knowledge requirement of paragraph (c) of this section, and 
the pension actuarial knowledge requirement of paragraph (d) of this 
section.
    (b) Qualifying experience. Within the 10-year period immediately 
preceding the date of application, the applicant shall have completed 
either--
    (1) A minimum of 36 months of certified responsible pension 
actuarial experience; or
    (2) A minimum of 60 months of certified responsible actuarial 
experience, including at least 18 months of certified responsible 
pension actuarial experience.
    (c) Basic actuarial knowledge. The applicant shall demonstrate 
knowledge of basic actuarial mathematics and methodology by one of the 
following:
    (1) Joint Board basic examination. Successful completion, to a score 
satisfactory to the Joint Board, of an examination, prescribed by the 
Joint Board, in basic actuarial mathematics and methodology including 
compound interest, principles of life contingencies, commutation 
functions, multiple-decrement functions, and joint life annuities.
    (2) Organization basic examinations. Successful completion, to a 
score satisfactory to the Joint Board, of one or more proctored 
examinations which are given by an actuarial organization and which the 
Joint Board has determined cover substantially the same subject areas, 
have at least a comparable level of difficulty, and require at least the 
same competence as the Joint Board basic examination referred to in 
paragraph (c)(1) of this section.
    (3) Qualifying formal education. Receipt of a bachelor's or higher 
degree from an accredited college or university after the satisfactory 
completion of a course of study:
    (i) In which the major area of concentration was actuarial 
mathematics, or
    (ii) Which included at least as many semester hours or quarter hours 
each in mathematics, statistics, actuarial mathematics and other 
subjects as the Board determines represent equivalence to paragraph 
(c)(3)(i) of this section.
    (d) Pension actuarial knowledge. (1) The applicant shall demonstrate 
pension actuarial knowledge by one of the following:
    (i) Joint Board pension examination. Successful completion, within 
the 10-year period immediately preceding the date of the application, to 
a score satisfactory to the Joint Board, of an examination prescribed by 
the Joint Board in actuarial mathematics and methodology relating to 
pension plans, including the provisions of ERISA relating to the minimum 
funding requirements and allocation of assets on plan termination.
    (ii) Organization pension examinations. Successful completion, 
within the 10-year period immediately preceding the date of the 
application, to a score satisfactory to the Joint Board, of one or more 
proctored examinations which are given by an actuarial organization and 
which the Joint Board has determined cover substantially the same 
subject areas, have at least a comparable level of difficulty, and 
require at least the same competence as the Joint Board pension 
examination referred to in paragraph (d)(1)(i) of this section.
    (2) For purposes of this section, the date of successful completion 
of an examination is generally the date a candidate sits for the 
examination, provided that the candidate receives a passing grade on 
that examination. However, an applicant who sat for an examination prior 
to the effective date of these regulations will be deemed to have sat 
for such examination on the effective date.
    (e) Form; fee. An applicant who wishes to take an examination 
administered by the Joint Board under paragraph (c)(1) or (d)(1) of this 
section shall file an application on a form prescribed by the Joint 
Board. Such application shall be accompanied by payment in the amount 
set forth on the application form. The amount represents a fee charged 
to each applicant for examination and is designed to cover the costs for 
the administration of the examination. The fee shall be retained whether 
or not the applicant successfully completes the examination or is 
enrolled.

[[Page 407]]

    (f) Denial of enrollment. An applicant may be denied enrollment if:
    (1) The Joint Board finds that the applicant, during the 15-year 
period immediately preceding the date of application and on or after the 
applicant's eighteenth birthday has engaged in disreputable conduct. The 
term disreputable conduct includes, but is not limited to:
    (i) An adjudication, decision, or determination by a court of law, a 
duly constituted licensing or accreditation authority (other than the 
Joint Board), or by any federal or state agency, board, commission, 
hearing examiner, administrative law judge, or other official 
administrative authority, that the applicant has engaged in conduct 
evidencing fraud, dishonesty or breach of trust.
    (ii) Giving false or misleading information, or participating in any 
way in the giving of false or misleading information, to the Department 
of the Treasury or the Department of Labor or the Pension Benefit 
Guaranty Corporation or any officer or employee thereof in connection 
with any matter pending or likely to be pending before them, knowing 
such information to be false or misleading.
    (iii) Willfully failing to make a Federal tax return in violation of 
the revenue laws of the United States, or evading, attempting to evade, 
or participating in any way in evading or attempting to evade any 
federal tax or payment thereof, knowingly counseling or suggesting to a 
client or prospective client an illegal plan to evade federal taxes or 
payment thereof, or concealing assets of himself or another to evade 
federal taxes or payment thereof.
    (iv) Directly or indirectly attempting to influence, or offering or 
agreeing to attempt to influence, the official action of any officer or 
employee of the Department of the Treasury or the Department of Labor or 
the Pension Benefit Guaranty Corporation by the use of threats, false 
accusations, duress or coercion, by the offer of any special inducement 
or promise of advantage or by the bestowing of any gift, favor, or thing 
of value.
    (v) Disbarment or suspension from practice as an actuary, attorney, 
certified public accountant, public accountant, or an enrolled agent by 
any duly constituted authority of any state, possession, territory, 
Commonwealth, the District of Columbia, by any Federal Court of record, 
or by the Department of the Treasury.
    (vi) Contemptuous conduct in connection with matters before the 
Department of the Treasury, or the Department of Labor, or the Pension 
Benefit Guaranty Corporation including the use of abusive language, 
making false accusations and statements knowing them to be false, or 
circulating or publishing malicious or libelous matter.
    (2) The applicant has been convicted of any of the offenses referred 
to in section 411 of ERISA.
    (3) The applicant has submitted false or misleading information on 
an application for enrollment to perform actuarial services or in any 
oral or written information submitted in connection therewith or in any 
report presenting actuarial information to any person, knowing the same 
to be false or misleading.

(Sec. 3042, subtitle C, title 3, Employee Retirement Income Security Act 
of 1974 (88 Stat. 1002, 29 U.S.C. 1241, 1242), and the Act of August 31, 
1951, ch. 376, title V, section 501, 65 Stat. 290, 31 U.S.C. 483a)

[44 FR 11751, Mar. 2, 1979, as amended at 44 FR 68458, Nov. 29, 1979. 
Redesignated and amended at 76 FR 17774, Mar. 31, 2011]



        Subpart C_Standards of Performance for Enrolled Actuaries



Sec.901.20  Standards of performance of actuarial services.

    In the discharge of duties required by ERISA of enrolled actuaries 
with respect to any plan to which the Act applies:
    (a) In general. An enrolled actuary shall undertake an actuarial 
assignment only when qualified to do so.
    (b) Professional duty. (1) An enrolled actuary shall perform 
actuarial services only in a manner that is fully in accordance with all 
of the duties and requirements for such persons under applicable law and 
consistent with relevant generally accepted standards for professional 
responsibility and ethics.
    (2) An enrolled actuary shall not perform actuarial services for any 
person

[[Page 408]]

or organization which he/she believes, or has reasonable grounds to 
believe, may utilize his/her services in a fraudulent manner or in a 
manner inconsistent with law.
    (c) Advice or explanations. An enrolled actuary shall provide to the 
plan administrator upon appropriate request, supplemental advice or 
explanation relative to any report signed or certified by such enrolled 
actuary.
    (d) Conflicts of interest. (1) Except as provided in paragraph 
(d)(2) of this section, an enrolled actuary shall not perform actuarial 
services for a client if the representation involves a conflict of 
interest. A conflict of interest exists if--
    (i) The representation of one client will be directly adverse to 
another client; or
    (ii) There is a significant risk that the representation of one or 
more clients will be materially limited by the enrolled actuary's 
responsibilities to another client, a former client, or by a personal 
interest of the enrolled actuary.
    (2) Notwithstanding the existence of a conflict of interest under 
paragraph (d)(1) of this section, the enrolled actuary may represent a 
client if--
    (i) The enrolled actuary reasonably believes that he or she will be 
able to provide competent and diligent representation to each affected 
client;
    (ii) The representation is not prohibited by law; and
    (iii) Each affected client waives the conflict of interest and gives 
informed consent at the time the existence of the conflict of interest 
is known by the enrolled actuary.
    (e) Assumptions, calculations and recommendations. (1) The enrolled 
actuary shall exercise due care, skill, prudence and diligence when 
performing actuarial services under ERISA and the Internal Revenue Code. 
In particular, in the course of preparing a report or certificate 
stating actuarial costs or liabilities, the enrolled actuary shall 
ensure that--
    (i) Except as mandated by law, the actuarial assumptions are 
reasonable individually and in combination, and the actuarial cost 
method and the actuarial method of valuation of assets are appropriate;
    (ii) The calculations are accurately carried out and properly 
documented; and
    (iii) The report, any recommendations, and any supplemental advice 
or explanation relative to the report reflect the results of the 
calculations.
    (2) An enrolled actuary shall include in any report or certificate 
stating actuarial costs or liabilities, a statement or reference 
describing or clearly identifying the data, any material inadequacies 
therein and the implications thereof, and the actuarial methods and 
assumptions employed.
    (f) Due diligence. (1) An enrolled actuary must exercise due 
diligence--
    (i) In preparing or assisting in the preparation of, approving, and 
filing tax returns, documents, affidavits, and other papers relating to 
the Department of the Treasury, the Department of Labor, the Pension 
Benefit Guaranty Corporation, or any other applicable Federal or State 
entity;
    (ii) In determining the correctness of oral or written 
representations made by the enrolled actuary to the Department of the 
Treasury, the Department of Labor, the Pension Benefit Guaranty 
Corporation, or any other applicable Federal or State entity; and
    (iii) In determining the correctness of oral or written 
representations made by the enrolled actuary to clients.
    (2) An enrolled actuary advising a client to take a position on any 
document to be filed with the Department of the Treasury, the Department 
of Labor, the Pension Benefit Guaranty Corporation, or any other 
applicable Federal or State entity (or preparing or signing such a 
return or document) generally may rely in good faith without 
verification upon information furnished by the client. The enrolled 
actuary may not, however, ignore the implications of information 
furnished to, or actually known by, the enrolled actuary, and must make 
reasonable inquiries if the information as furnished appears to be 
incorrect, inconsistent with an important fact or another factual 
assumption, or incomplete.
    (g) Solicitations regarding actuarial services. An enrolled actuary 
may not in any way use or participate in the use of any form of public 
communication or private solicitation related to

[[Page 409]]

the performance of actuarial services containing a false, fraudulent, or 
coercive statement or claim, or a misleading or deceptive statement or 
claim. An enrolled actuary may not make, directly or indirectly, an 
uninvited written or oral solicitation of employment related to 
actuarial services if the solicitation violates Federal or State law, 
nor may such person employ, accept employment in partnership form, 
corporate form, or any other form, or share fees with, any individual or 
entity who so solicits. Any lawful solicitation related to the 
performance of actuarial services made by or on behalf of an enrolled 
actuary must clearly identify the solicitation as such and, if 
applicable, identify the source of the information used in choosing the 
recipient.
    (h) Prompt disposition of pending matters. An enrolled actuary may 
not unreasonably delay the prompt disposition of any matter before the 
Internal Revenue Service, the Department of Labor, the Pension Benefit 
Guaranty Corporation, or any other applicable Federal or State entity.
    (i) [Reserved]
    (j) Return of client's records. (1) In general, an enrolled actuary 
must, at the request of a client, promptly return any and all records of 
the client that are necessary for the client to comply with his or her 
legal obligations. The enrolled actuary may retain copies of the records 
returned to a client. The existence of a dispute over fees generally 
does not relieve the enrolled actuary of his or her responsibility under 
this section. Nevertheless, if applicable State law allows or permits 
the retention of a client's records by an enrolled actuary in the case 
of a dispute over fees for services rendered, the enrolled actuary need 
only return those records that must be attached to the client's required 
forms under ERISA and the Internal Revenue Code. The enrolled actuary, 
however, must provide the client with reasonable access to review and 
copy any additional records of the client retained by the enrolled 
actuary under State law that are necessary for the client to comply with 
his or her obligations under ERISA and the Internal Revenue Code.
    (2) For purposes of this section, records of the client include all 
documents or written or electronic materials provided to the enrolled 
actuary, or obtained by the enrolled actuary in the course of the 
enrolled actuary's representation of the client, that preexisted the 
retention of the enrolled actuary by the client. The term ``records of 
the client'' also includes materials that were prepared by the client or 
a third party (not including an employee or agent of the enrolled 
actuary) at any time and provided to the enrolled actuary with respect 
to the subject matter of the representation. The term ``records of the 
client'' also includes any return, claim for refund, schedule, 
affidavit, appraisal or any other document prepared by the enrolled 
actuary, or his or her employee or agent, that was presented to the 
client with respect to a prior representation if such document is 
necessary for the taxpayer to comply with his or her current obligations 
under ERISA and the Internal Revenue Code. The term ``records of the 
client'' does not include any return, claim for refund, schedule, 
affidavit, appraisal or any other document prepared by the enrolled 
actuary or the enrolled actuary's firm, employees or agents if the 
enrolled actuary is withholding such document pending the client's 
performance of its contractual obligation to pay fees with respect to 
such document.
    (k) Notification. An enrolled actuary shall provide written 
notification of the non-filing of any actuarial document he/she has 
signed upon discovery of the non-filing. Such notification shall be made 
to the office of the Internal Revenue Service, the Department of Labor, 
or the Pension Benefit Guaranty Corporation where such document should 
have been filed.
    (l) The rules of this section apply to all actuarial services and 
related acts performed on or after May 2, 2011.

[40 FR 18776, Apr. 30, 1975, as amended at 43 FR 39757, Sept. 7, 1978; 
76 FR 17775, Mar. 31, 2011]

[[Page 410]]



            Subpart D_Suspension or Termination of Enrollment

    Authority: Sec. 3042(b), ERISA, 29 U.S.C. 1242(b).

    Source: 43 FR 39757, Sept. 7, 1978, unless otherwise noted.



Sec.901.30  Authority to suspend or terminate enrollment.

    Under section 3042(b) of ERISA the Joint Board may, after notice and 
opportunity for a hearing, suspend or terminate the enrollment of an 
enrolled actuary if the Joint Board finds that such enrolled actuary
    (a) Has failed to discharge his/her duties under ERISA, or
    (b) Does not satisfy the requirements for enrollment in effect at 
the time of his/her enrollment.



Sec.901.31  Grounds for suspension or termination of enrollment.

    (a) Failure to satisfy requirements for enrollment. The enrollment 
of an actuary may be terminated if it is found that the actuary did not 
satisfy the eligibility requirements set forth in Sec.901.11 or Sec.
901.12.
    (b) Failure to discharge duties. The enrollment of an actuary may be 
suspended or terminated if it is found that the actuary, following 
enrollment, failed to discharge his/her duties under ERISA. Such duties 
include those set forth in Sec.901.20.
    (c) Disreputable conduct. The enrollment of an actuary may be 
suspended or terminated if it is found that the actuary has, at any time 
after he/she applied for enrollment, engaged in any conduct set forth in 
Sec.901.12(f) or other conduct evidencing fraud, dishonesty, or breach 
of trust. Such other conduct includes, but is not limited to, the 
following:
    (1) Conviction of any criminal offense under the laws of the United 
States (including section 411 of ERISA, 29 U.S.C. 1111), any State 
thereof, the District of Columbia, or any territory or possession of the 
United States, which evidences fraud, dishonesty, or breach of trust.
    (2) Knowingly filing false or altered documents, affidavits, 
financial statements or other papers on matters relating to employee 
benefit plans or actuarial services.
    (3) Knowingly making false or misleading representations, either 
orally or in writing, on matters relating to employee benefit plans or 
actuarial services, or knowingly failing to disclose information 
relative to such matters.
    (4) The use of false or misleading representations with intent to 
deceive a client or prospective client, or of intimations that the 
actuary is able to obtain special consideration or action from an 
officer or employee of any agency or court authorized to determine the 
validity of pension plans under ERISA.
    (5) Willful violation of any of the regulations contained in this 
part.

[43 FR 39757, Sept. 7, 1978, as amended at 76 FR 17776, Mar. 31, 2011]



Sec.901.32  Receipt of information concerning enrolled actuaries.

    If an officer or employee of the Department of the Treasury, the 
Department of Labor, the Pension Benefit Guaranty Corporation, or a 
member of the Joint Board has reason to believe that an enrolled actuary 
has violated any provision of this part, or if any such officer, 
employee or member receives information to that effect, he/she may make 
a written report thereof, which report or a copy thereof shall be 
forwarded to the Executive Director. If any other person has information 
of any such violation, he/she may make a report thereof to the Executive 
Director.

[43 FR 39757, Sept. 7, 1978, as amended at 76 FR 17776, Mar. 31, 2011]



Sec.901.33  Initiation of proceeding.

    Whenever the Executive Director has reason to believe that an 
enrolled actuary has violated any provision of the laws or regulations 
governing enrollment, such individual may be reprimanded or a proceeding 
may be initiated for the suspension or termination of such individual's 
enrollment. A reprimand as used in this paragraph is a

[[Page 411]]

statement informing the enrolled actuary that, in the opinion of the 
Executive Director, his/her conduct is in violation of the regulations 
and admonishing the enrolled actuary that repetition of the conduct 
occasioning the reprimand may result in the institution of a proceeding 
for the suspension or termination of the actuary's enrollment. A 
proceeding for suspension or termination of enrollment shall be 
initiated by a complaint naming the respondent actuary, signed by the 
Executive Director and filed in the Executive Director's office. Except 
in cases where the nature of the proceeding or the public interest does 
not permit, a proceeding will not be initiated under this section until 
the facts which may warrant such a proceeding have been called to the 
attention of the actuary in writing and he/she has been given an 
opportunity to respond to the allegations of misconduct.



Sec.901.34  Conferences.

    (a) In general. The Executive Director may confer with an enrolled 
actuary concerning allegations of his/her misconduct whether or not a 
proceeding for suspension or termination has been initiated against him/
her. If the conference results in agreement as to certain facts or other 
matters in connection with such a proceeding, such agreement may be 
entered in the record at the request of the actuary or the Executive 
Director.
    (b) Voluntary suspension or termination of enrollment. An enrolled 
actuary, in order to avoid the initiation or conclusion of a suspension 
or termination proceeding, may offer his/her consent to suspension or 
termination of enrollment or may offer his/her resignation. The 
Executive Director may accept the offered resignation or may suspend or 
terminate enrollment in accordance with the consent offered.



Sec.901.35  Contents of complaint.

    (a) Charges. A complaint initiating a suspension or termination 
proceeding shall describe the allegations which are the basis for the 
proceeding, and fairly inform the respondent of the charges against him/
her.
    (b) Answer. In the complaint, or in a separate paper attached to the 
complaint, notice shall be given of the place at, and time within which 
the respondent shall file an answer, which time shall not be less than 
15 days from the date of service of the complaint. Notice shall be given 
that a decision by default may be rendered against the respondent if an 
answer is not filed as required.



Sec.901.36  Service of complaint and other papers.

    (a) Complaint. The complaint or a copy thereof may be served upon 
the respondent by certified mail, or first-class mail as hereinafter 
provided, by delivering it to the respondent, or the respondent's 
attorney or agent of record either in person or by leaving it at the 
office or place of business of the respondent, the attorney or agent, or 
in any other manner which may have been agreed to in writing by the 
respondent. Where the service is by certified mail, the return post 
office receipt signed by or on behalf of the respondent shall be proof 
of service. If the certified matter is not claimed or accepted by the 
respondent and is returned undelivered, complete service may be made 
upon the respondent by mailing the complaint to him/her by first-class 
mail, addressed to the respondent at the last address known to the 
Executive Director. If service is made upon the respondent or his/her 
attorney or agent in person or by leaving the complaint at the office or 
place of business of the respondent, attorney, or agent, the verified 
return by the person making service, setting forth the manner of 
service, shall be proof of such service.
    (b) Service of papers other than complaint. Any paper other than the 
complaint may be served upon the respondent as provided in paragraph (a) 
of this section or by mailing the paper by first-class mail to the 
respondent at the last address known to the Executive Director or by 
mailing the paper by first-class mail to the respondent's attorney or 
agent. Such mailing shall constitute complete service. Notices may also 
be served upon the respond- ent or his/her attorney or agent by 
telegraph.
    (c) Filing of papers. Whenever the filing of a paper is required or 
permitted

[[Page 412]]

in connection with a suspension or termination proceeding, and the place 
of filing is not specified by this subpart or by rule or order of the 
Administrative Law Judge, the paper shall be filed with the Executive 
Director of the Joint Board for the Enrollment of Actuaries, Treasury 
Department, Washington, D.C. 20220. All papers shall be filed in 
duplicate.



Sec.901.37  Answer.

    (a) Filing. The respondent's answer shall be filed in writing within 
the time specified in the complaint or notice of initiation of the 
proceeding, unless, on application, the time is extended by the 
Executive Director or the Administrative Law Judge. The answer shall be 
filed in duplicate with the Executive Director.
    (b) Contents. The answer shall contain a statement of facts which 
constitute the grounds of defense and it shall specifically admit or 
deny each allegation set forth in the complaint, except that the 
respondent shall not deny a material allegation in the complaint which 
he/she knows to be true, or state that he/she is without sufficient 
information to form a belief when in fact the respondent possesses such 
information. The respondent may also state affirmatively special matters 
of defense.
    (c) Failure to deny or answer allegations in the complaint. Every 
allegation in the complaint which is not denied in the answer shall be 
deemed to be admitted and may be considered as proven, and no further 
evidence in respect of such allegation need be adduced at a hearing. 
Failure to file an answer within the time prescribed in the notice to 
the respondent, except as the time for answer is extended by the 
Executive Director or the Administrative Law Judge, shall constitute an 
admission of the allegations of the complaint and a waiver of hearing, 
and the Administrative Law Judge may make a decision by default, without 
a hearing or further procedure.



Sec.901.38  Supplemental charges.

    If it appears to the Executive Director that the respondent in his/
her answer falsely and in bad faith denies a material allegation of fact 
in the complaint or states that the respondent has no knowledge 
sufficient to form a belief when he/she in fact possesses such 
knowledge, or if it appears that the respondent has knowingly introduced 
false testimony during proceedings for suspension or termination of his/
her enrollment, the Executive Director may file supplemental charges 
against the respondent. Such supplemental charges may be tried with 
other charges in the case, provided the respondent is given due notice 
thereof and is afforded an opportunity to prepare a defense thereto.



Sec.901.39  Reply to answer.

    No reply to the respondent's answer shall be required, but the 
Executive Director may file a reply at his/her discretion or at the 
request of the Administrative Law Judge.



Sec.901.40  Proof; variance; amendment of pleadings.

    In the case of a variance between the allegations in a pleading and 
the evidence adduced in support of the pleading, the Administrative Law 
Judge may order or authorize amendment of the pleading to conform to the 
evidence, provided that the party who would otherwise be prejudiced by 
the amendment is given reasonable opportunity to meet the allegations of 
the pleading as amended. The Administrative Law Judge shall make 
findings on any issue presented by the pleadings as so amended.



Sec.901.41  Motions and requests.

    Motions and requests may be filed with the Executive Director or 
with the Administrative Law Judge.



Sec.901.42  Representation.

    A respondent or proposed respondent may appear at conference or 
hearing in person or may be represented by counsel or other 
representative. The Executive Director may be represented by an attorney 
or other employee of the Treasury Department.



Sec.901.43  Administrative Law Judge.

    (a) Appointment. An administrative law judge, appointed as provided 
by section 11 of the Administrative Procedure Act, 60 Stat. 244 (5 
U.S.C. 3105),

[[Page 413]]

shall conduct proceedings upon complaints for the suspension or 
termination of enrolled actuaries.
    (b) Powers of Administrative Law Judge. Among other powers, the 
Administrative Law Judge shall have authority, in connection with any 
suspension or termination proceeding of an enrolled actuary, to do the 
following:
    (1) Administer oaths and affirmations;
    (2) Make rulings upon motions and requests, which may not be 
appealed before the close of a hearing except at the discretion of the 
Administrative Law Judge;
    (3) Determine the time and place of hearing and regulate its course 
of conduct;
    (4) Adopt rules of procedure and modify the same as required for the 
orderly disposition of proceedings;
    (5) Rule upon offers of proof, receive relevant evidence, and 
examine witnesses;
    (6) Take or authorize the taking of depositions;
    (7) Receive and consider oral or written argument on facts or law;
    (8) Hold or provide for the holding of conferences for the 
settlement or simplification of the issues by consent of the parties;
    (9) Perform such acts and take such measures as are necessary or 
appropriate to the efficient conduct of any proceeding; and
    (10) Make initial decisions.



Sec.901.44  Hearings.

    (a) In general. The Administrative Law Judge shall preside at the 
hearing on a complaint for the suspension or termination of an enrolled 
actuary. Hearings shall be stenographically recorded and transcribed and 
the testimony of witnesses shall be taken under oath or affirmation. 
Hearings will be conducted pursuant to section 7 of the Administrative 
Procedure Act, 60 Stat. 241 (5 U.S.C. 556).
    (b) Failure to appear. If either party to the proceeding fails to 
appear at the hearing, after due notice thereof has been sent to the 
parties, the Administrative Law Judge may make a decision against the 
absent party by default.



Sec.901.45  Evidence.

    (a) In general. The rules of evidence prevailing in courts of law 
and equity are not controlling in hearings on complaints for the 
suspension or the termination of the enrollment of enrolled actuaries. 
However, the Administrative Law Judge shall exclude evidence which is 
irrelevant, immaterial, or unduly repetitious.
    (b) Depositions. The deposition of any witness taken pursuant to 
Sec.901.46 may be admitted.
    (c) Proof of documents. Official documents, records, and papers of 
the Department of the Treasury, the Department of Labor, the Pension 
Benefit Guaranty Corporation, the Joint Board for the Enrollment of 
Actuaries or the Office of the Executive Director of the Joint Board for 
the Enrollment of Actuaries shall be admissible into evidence without 
the production of an officer or employee to authenticate them. Any such 
documents, records, and papers may be evidenced by a copy attested to or 
identified by an officer or employee of the Department of the Treasury, 
the Department of Labor, the Pension Benefit Guaranty Corporation, the 
Joint Board for the Enrollment of Actuaries, or the Office of the 
Executive Director of the Joint Board for the Enrollment of Actuaries, 
as the case may be.
    (d) Exhibits. If any document, record, or other paper is introduced 
into evidence as an exhibit, the Administrative Law Judge may authorize 
the withdrawal of the exhibit subject to any conditions which he/she 
deems proper.
    (e) Objections. Objections to evidence shall state the grounds 
relied upon, and the record shall not include argument thereon, except 
as ordered by the Administrative Law Judge. Rulings on such objections 
shall be part of the record. No exception to the ruling is necessary to 
preserve the rights of the parties.



Sec.901.46  Depositions.

    Depositions for use at a hearing may, with the written approval of 
the Administrative Law Judge, be taken by either the Executive Director 
or the respondent or their duly authorized representatives. Depositions 
may be taken upon oral or written interrogatories,

[[Page 414]]

upon not less than 10 days written notice to the other party, before any 
officer duly authorized to administer an oath for general purposes or 
before an officer or employee of the Department of the Treasury, the 
Department of Labor, the Pension Benefit Guaranty Corporation, or the 
Joint Board who is authorized to administer an oath. Such notice shall 
state the names of the witnesses and the time and place where the 
depositions are to be taken. The requirement of 10 days notice may be 
waived by the parties in writing, and depositions may then be taken from 
the persons and at the times and places mutually agreed upon by the 
parties. When a deposition is taken upon written interrogatories, any 
cross-examination shall be upon written interrogatories. Copies of such 
written interrogatories shall be served upon the other party with the 
notice, and the copies of any written cross-interrogatories shall be 
mailed or delivered to the opposing party at least five days before the 
date of taking the depositions, unless the parties mutually agree 
otherwise. A party upon whose behalf a deposition is taken must file it 
with the Administrative Law Judge and serve one copy upon the opposing 
party. Expenses in the reporting of depositions shall be borne by the 
party at whose instance the deposition is taken.



Sec.901.47  Transcript.

    In cases where the hearing is stenographically reported by a 
Government contract reporter, copies of the transcript may be obtained 
from the reporter at rates not to exceed the maximum rates fixed by 
contract between the Government and the reporter. Where the hearing is 
stenographically reported by a regular employee of the Department of the 
Treasury, the Department of Labor, the Pension Benefit Guaranty 
Corporation, or the Joint Board, a copy thereof will be supplied to the 
respondent either without charge or upon the payment of a reasonable 
fee. Copies of exhibits introduced at the hearing or at the taking of 
depositions will be supplied to parties upon the payment of a reasonable 
fee (31 U.S.C. 9701).

[43 FR 39757, Sept. 7, 1978, as amended at 76 FR 17776, Mar. 31, 2011]



Sec.901.48  Proposed findings and conclusions.

    Except in cases where the respondent has failed to answer the 
complaint or where a party has failed to appear at the hearing, the 
Administrative Law Judge, before making his/her decision, shall give the 
parties a reasonable opportunity to submit proposed findings and 
conclusions and supporting reasons therefor.



Sec.901.49  Decision of the Administrative Law Judge.

    As soon as practicable after the conclusion of a hearing and the 
receipt of any proposed findings and conclusions timely submitted by the 
parties, the Administrative Law Judge shall make the initial decision in 
the case. The decision should be based solely upon the pleading, the 
testimony and exhibits received in evidence at the hearing or 
specifically authorized to be subsequently submitted under the 
applicable laws and regulations. The decision shall include (a) a 
statement of findings and conclusions, as well as the reasons or basis 
therefor, upon all the material issues of fact or law presented on the 
record, and (b) an order of suspension, termination or reprimand or an 
order of dismissal of the complaint. The Administrative Law Judge shall 
file the decision with the Executive Director and shall transmit a copy 
thereof to the respondent or his/her attorney or agent of record. In the 
absence of an appeal to the Joint Board or review of the decision upon 
motion of the Joint Board, the decision of the Administrative Law Judge 
shall without further proceedings become the decision of the Joint Board 
30 days from the date of the Administrative Law Judge's decision.



Sec.901.50  Appeal to the Joint Board.

    Within 30 days from the date of the Administrative Law Judge's 
decision, either party may appeal to the Joint Board for the Enrollment 
of Actuaries. The appeal shall be filed with the Executive Director in 
duplicate and shall

[[Page 415]]

include exceptions to the decision of the Administrative Law Judge and 
supporting reasons for such exceptions. If an appeal is filed by the 
Executive Director, a copy thereof shall be transmitted to the 
respondent. Within 30 days after receipt of an appeal or copy thereof, 
the other party may file a reply brief in duplicate with the Executive 
Director. If the reply brief is filed by the Executive Director, a copy 
of it shall be transmitted to the respondent. Upon the filing of an 
appeal and a reply brief, if any, the Executive Director shall transmit 
the entire record to the joint board.



Sec.901.51  Decision of the Joint Board.

    On appeal from or review of the initial decision of the 
Administrative Law Judge, the Joint Board for the Enrollment of 
Actuaries will make the final decision. In making its decision the Joint 
Board will review the record of such portions thereof as may be cited by 
the parties to permit limiting of the issues. A copy of the Joint 
Board's decision shall be transmitted to the respondent by the Executive 
Director.



Sec.901.52  Effect of suspension, termination or resignation of enrollment; 

surrender of enrollment certificate.

    If the respondent's enrollment is suspended, the respondent shall 
not thereafter be permitted to perform actuarial services under ERISA 
during the period of suspension. If the respondent's enrollment is 
terminated, the respondent shall not thereafter be permitted to perform 
actuarial serv- ices under ERISA unless and until authorized to do so by 
the Executive Director pursuant to Sec.901.54. The respondent shall 
surrender his/her enrollment certificate to the Executive Director for 
cancellation in the case of a termination or resignation of enrollment 
or for retention during a period of suspension.



Sec.901.53  Notice of suspension, termination or resignation of enrollment.

    Upon the resignation or the issuance of a final order suspending or 
terminating the enrollment of an actuary, the Executive Director shall 
give notice thereof to appropriate officers and employees of the 
Department of the Treasury, the Department of Labor, the Pension Benefit 
Guaranty Corporation, and to other interested departments and agencies 
of the Federal Government.



Sec.901.54  Petition for reinstatement.

    Any individual whose enrollment has been terminated may petition the 
Executive Director for reinstatement after the expiration of five years 
following such termination. Reinstatement may not be granted unless the 
Executive Director, with the approval of the Joint Board, is satisfied 
that the petitioner is not likely to conduct himself/herself thereafter 
contrary to the regulations in this part, and that granting such 
reinstatement would not be contrary to the public interest.



                      Subpart E_General Provisions

    Authority: Sec. 3042(b), ERISA, 29 U.S.C. 1242(b).

    Source: 43 FR 39761, Sept. 7, 1978, unless otherwise noted.



Sec.901.70  Records.

    (a) Availability. There are made available for public inspection at 
the Office of the Executive Director of the Joint Board for the 
Enrollment of Actuaries a roster of all persons enrolled to perform 
actuarial services under ERISA and a roster of all persons whose 
enrollments to perform such services have been suspended or terminated. 
Other records may be disclosed upon specific request, in accordance with 
the applicable disclosure and privacy statutes.
    (b) Disciplinary procedures. A request by an enrolled actuary that a 
hearing in a disciplinary proceeding concerning him/her be public, and 
that the record thereof be made available for inspection by interested 
persons may be granted if written agreement is reached in advance to 
protect from disclosure tax information which is confidential, in 
accordance with applicable statutes and regulations.



Sec.901.71  Special orders.

    The Joint Board reserves the power to issue such special orders as 
it may deem proper in any case within the purview of this part.

[[Page 416]]



Sec.901.72  Additional rules.

    The Joint Board may, in notice or other guidance of general 
applicability, provide additional rules regarding the enrollment of 
actuaries.

[76 FR 17776, Mar. 31, 2011]



PART 902_RULES REGARDING AVAILABILITY OF INFORMATION--Table of Contents



Sec.
902.1 Scope.
902.2 Definitions.
902.3 Published information.
902.4 Access to records.
902.5 Appeal.

    Authority: Sec. 3042, subtitle C, title 3, Employee Retirement 
Income Security Act of 1974 (88 Stat. 1002, 29 U.S.C. 1241, 1242).

    Source: 42 FR 39204, Aug. 3, 1977, unless otherwise noted.



Sec.902.1  Scope.

    This part is issued by the Joint Board for the Enrollment of 
Actuaries (the ``Joint Board'') pursuant to the requirements of section 
552 of title 5 of the United States Code, including the requirements 
that every Federal agency shall publish in the Federal Register, for the 
guidance of the public, descriptions of the established places at which, 
the officers from whom, and the methods whereby, the public may obtain 
information, make submittals or requests, or obtain decisions.



Sec.902.2  Definitions.

    (a) Records of the Joint Board. For purposes of this part, the term 
``records of the Joint Board'' means rules, statements, opinions, 
orders, memoranda, letters, reports, accounts, and other papers 
containing information in the possession of the Joint Board that 
constitute part of the Joint Board's official files.
    (b) Unusual Circumstances. For purposes of this part, ``unusual 
circumstances'' means, but only to the extent reasonably necessary for 
the proper processing of the particular request:
    (1) The need to search for and collect the requested records from 
other establishments that are separate from the Joint Board's office 
processing the request;
    (2) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records which are demanded in 
a single request; or
    (3) The need for consultation, which shall be conducted with all 
practicable speed, with another agency having a substantial interest in 
the determination of the request.



Sec.902.3  Published information.

    (a) Federal Register. Pursuant to sections 552 and 553 of title 5 of 
the United States Code, and subject to the provisions of Sec.902.5, 
the Joint Board publishes in the Federal Register for the guidance of 
the public, in addition to this part, descriptions of its organization 
and procedures, substantive rules of general applicability, and, as may 
from time to time be appropriate, statements of general policy, and 
interpretations of general applicability.
    (b) Other published information. From time to time, the Joint Board 
issues statements to the press relating to its operations.
    (c) Obtaining printed information. If not available through the 
Government Printing Office, printed information released by the Joint 
Board may be obtained without cost from the Executive Director of the 
Joint Board (``Executive Director'').



Sec.902.4  Access to records.

    (a) General rule. All records of the Joint Board, including 
information set forth in section 552(a)(2) of title 5 of the United 
States Code, are made available to any person, upon request, for 
inspection and copying in accordance with the provisions of this section 
and subject to the limitations stated in section 552(b) of title 5 of 
the United States Code. Records falling within such limitations may 
nevertheless be made available in accordance with this section to the 
extent consistent, in the judgment of the Chairman of the Joint Board 
(``Chairman''), with the effective performance of the Joint Board's 
statutory responsibilities and with the avoidance of injury to a public 
or private interest intended to be protected by such limitations.
    (b) Obtaining access to records. Records of the Joint Board subject 
to

[[Page 417]]

this section are available by appointment for public inspection or 
copying during regular business hours on regular business days at the 
office of the Executive Director. Every request for access to such 
records, other than published records described in Sec.902.3, shall be 
signed and submitted in writing to the Executive Director, Joint Board 
for the Enrollment of Actuaries, c/o Department of the Treasury, 
Washington, DC 20220, shall state the name and address of the person 
requesting such access, and shall describe such records in a manner 
reasonably sufficient to permit their identification without undue 
difficulty.
    (c) Fees. A fee at the rate of $5.00 per hour or fraction thereof or 
the time required to locate such records, plus ten cents per standard 
page for any copying thereof, shall be paid by any person requesting 
records other than published records described in Sec.902.3. In 
addition, the cost of postage and any packaging and special handling 
shall be paid by the requester. Documents shall be provided without 
charge or at a reduced charge where the Chairman determines that waiver 
or reduction of the fee is in the public interest because furnishing the 
information can be considered as primarily benefiting the general 
public.
    (d) Actions on requests. The Executive Director shall, within ten 
days (excepting Saturdays, Sundays and legal public holidays) from 
receipt of request, determine whether to comply with such request for 
records and shall immediately notify in writing the person making such 
request of such determination and the reason therefor, and of the right 
of such person to appeal any adverse determination, as provided in Sec.
902.5. In unusual circumstances, the time limit for the determination 
may be extended by written notice to the person making such request 
setting forth the reasons for such extension and the date on which the 
determination is expected to be dispatched. No such notice shall specify 
a date that will result in an extension of more than ten working days.



Sec.902.5  Appeal.

    (a) Any person denied access to records requested under Sec.902.4, 
may within thirty days after notification of such denial, file a signed 
written appeal to the Joint Board. The appeal shall provide the name and 
address of the appellant, the identification of the records denied, and 
the dates of the original request and its denial.
    (b) The Joint Board shall act upon any such appeal within twenty 
days (excepting Saturdays, Sundays and legal public holidays) of its 
receipt, unless for unusual circumstances the time for such action is 
deferred, subject to Sec.902.4(b), for not more than ten days. If 
action upon any such appeal is so deferred, the Joint Board shall notify 
the requester of the reasons for such deferral and the date on which the 
final reply is expected to be dispatched. If it is determined that the 
appeal from the initial denial shall be denied (in whole or in part), 
the requester shall be notified in writing of the denial, of the reasons 
therefor, of the fact the Joint Board is responsible for the denial, and 
of the provisions of section 552(a)(4) of title 5 of the United States 
Code for judicial review of the determination.
    (c) Any extension or extensions of time under Sec. Sec.902.4(d) 
and 902.5(b) shall not cumulatively total more than ten days (excepting 
Saturdays, Sundays and legal public holidays). If an extension is 
invoked in connection with an initial determination under Sec.
902.4(d), any unused days of such extension may be invoked in connection 
with the determination on appeal under Sec.902.5(a), by written notice 
from the Joint Board.



PART 903_ACCESS TO RECORDS--Table of Contents



               Subpart A_Records Pertaining to Individuals

Sec.
903.1 Purpose and scope of regulations.
903.2 Definitions.
903.3 Procedures for notification with respect to records regarding 
          individuals.
903.4 Procedures for access to records and accountings of disclosures 
          from records, regarding individuals.
903.5 Procedures for amendment of records regarding individual--format, 
          agency review and appeal from initial adverse agency 
          determination.
903.6 Fees.
903.7 Guardianship.
903.8 Exemptions.


[[Page 418]]


    Authority: 5 U.S.C. 552a.

    Source: 41 FR 1493, Jan. 8, 1976, unless otherwise noted.



               Subpart A_Records Pertaining to Individuals



Sec.903.1  Purpose and scope of regulations.

    The regulations in this subpart are issued to implement the 
provisions of the Privacy Act of 1974 (5 U.S.C. 552a). The regulations 
relate to all records maintained by the Joint Board for the Enrollment 
of Actuaries (Joint Board) which are identifiable by individual name or 
identifier and all systems of such records which are retrievable by name 
or other identifier. They do not relate to personnel records of 
Government employees, which are under the jurisdiction of the Civil 
Service Commission, and, thus, subject to regulations issued by such 
Commission. The regulations set forth the procedures by which 
individuals may request notification of whether the Joint Board 
maintains or has disclosed a record pertaining to them or may seek 
access to such records maintained in any non-exempt system of records, 
request amendment of such records, and appeal any initial adverse 
determination with respect to any such request.



Sec.903.2  Definitions.

    (a) The term agency includes any executive department, military 
department, Government corporation, Government controlled corporation, 
or other establishment in the executive branch of the Government 
(including the Executive Office of the President), or any independent 
regulatory agency (see 5 U.S.C. 552(e));
    (b) The term individual means a citizen of the United States or an 
alien lawfully admitted for permanent residence;
    (c) The term maintain includes maintain, use, collect or 
disseminate;
    (d) The term record means any item, collection, or grouping of 
information about an individual that is maintained by the Joint Board, 
including, but not limited to, his education, financial transactions, 
medical history, and criminal or employment history and that contains 
his name, or the identifying number, symbol, or other identifying 
particular assigned to the individual such as a finger or voice print or 
a photograph;
    (e) The term system of records means a group of any records under 
the control of the Joint Board from which information is retrieved by 
the name of the individual or by some identifying number, symbol, or 
other identifying particular assigned to the individual;
    (f) The term routine use means, with respect to the disclosure of a 
record, the use of such record for a purpose which is compatible with 
the purpose for which it was collected.



Sec.903.3  Procedures for notification with respect to records regarding 

individuals.

    (a) Procedures for notification. The systems of records maintained 
by the Joint Board are listed annually as required by the Privacy Act of 
1974. Any individual, who wishes to know whether a system of records 
contains a record regarding him, may write to the Executive Director, 
Joint Board for the Enrollment of Actuaries, c/o U.S. Department of the 
Treasury, Washington, DC 20220. Requests may also be delivered 
personally to the Executive Director, Joint Board for the Enrollment of 
Actuaries, 2401 E Street, NW., suite 1537, Washington, D.C. between the 
hours of 9 a.m. and 5 p.m. on workdays. Any such inquiry will be 
acknowledged in writing within 10 days (excluding Saturdays, Sundays and 
legal public holidays) of receipt of the request.
    (b) Requests. A request for notification of whether a record exists 
shall:
    (1) Be made in writing and signed by the person making the request, 
who must be the individual about whom the record is maintained, or his 
duly authorized representative (see Sec.903.7);
    (2) State that it is made pursuant to the Privacy Act, 5 U.S.C. 
552a, or the regulations contained in this part;
    (3) Furnish the name of the system of records with respect to which 
notification is sought, as specified in the systems notices published in 
the Federal Register, Volume 40, No. 167;
    (4) Mark ``Privacy Act Request'' on the request and on the envelope 
in which the request is contained;

[[Page 419]]

    (5) Be addressed as specified in paragraph (a) of this section, 
unless personally delivered; and
    (6) Meet the requirements set forth in paragraph (c) of this 
section.
    (c) Verification of identity. Notification of the existence of 
records in certain systems maintained by the Joint Board will not be 
made unless the individual requester's identity is verified. Where 
applicable, requirements for verification of identity are specified in 
the notices of systems published in the Federal Register, Volume 40, No. 
167.
    (d) Date of receipt of request. A request for notification with 
respect to records shall be considered to have been received on the date 
on which the requirements of paragraphs (a), (b) and (c) of this section 
have been satisfied. Requests for notification shall be stamped with the 
date of receipt by the Office of the Executive Director.
    (e) Exemptions. The procedures prescribed under paragraphs (a), (b) 
and (c) of this section shall not apply to: (1) Systems of records 
exempted pursuant to 5 U.S.C. 552a(k); (2) information compiled in 
reasonable anticipation of a civil action or proceeding (see 5 U.S.C. 
552a(d) (5); or (3) information regarding an individual which is 
contained in, and inseparable from, another individual's record.
    (f) Notification of determination--(1) In general. The Executive 
Director shall, except as otherwise provided in this paragraph, notify 
an individual requester as to whether or not a system of records 
contains a record regarding such individual. Such notification shall be 
made within 30 days (excluding Saturdays, Sundays and legal public 
holidays) after the date of receipt of the request, as determined in 
accordance with paragraph (d) of this section. If it is not possible to 
respond within 30 days, the Executive Director will inform the 
requester, stating the reasons for the delay (e.g., volume of records 
involved, need to consult other agencies, or the difficulty of the legal 
issues involved) and when a response will be dispatched.
    (2) Denial of request. When it is determined that a request for 
notification with respect to records will be denied (whether in whole or 
in part or subject to conditions or exceptions), the person making the 
request shall be so notified by mail in accordance with paragraph (f)(1) 
of this section. The letter of notification shall set forth the name and 
title or position of the responsible official.
    (3) Records exempt in whole or in part. (i) When an individual 
requests notification with respect to records concerning himself which 
have been compiled in reasonable anticipation of a civil action or 
proceeding either in a court or before an administrative tribunal, the 
Executive Director will neither confirm nor deny the existence of the 
record but shall advise the individual only that no record with respect 
to the existence of which he is entitled to be notified pursuant to the 
Privacy Act of 1974 has been identified.
    (ii) Requests for records which have been exempted from the 
requirement of notification pursuant to 5 U.S.C. 552a(k)(2) shall be 
responded to in the manner provided in paragraph (f)(3)(i) of this 
section.



Sec.903.4  Procedures for access to records and accountings of disclosures 

from records, regarding individuals.

    (a) Access. The Executive Director of the Joint Board shall, upon 
request by any individual to gain access to a record regarding him which 
is contained in a system of records maintained by the Joint Board, or to 
an accounting of a disclosure from such record made pursuant to 5 U.S.C. 
552a(c)(1), permit that individual, and, upon his/her request, a person 
he/she chooses to accompany him/her, to review the record or any such 
accounting and have a copy made of all or any portion thereof in a form 
comprehensible to the individual, except that the Executive Director may 
require the individual to furnish a written statement authorizing 
discussion of that individual's record in the accompanying person's 
presence. Such request may be addressed to the Executive Director, Joint 
Board for the Enrollment of Actuaries, c/o U.S. Department of the 
Treasury, Washington, DC 20220. Requests may also be delivered 
personally to the Executive Director, Joint Board for the Enrollment of 
Actuaries, 2401 E Street, NW., suite 1537, Washington,

[[Page 420]]

DC, between the hours of 9 a.m. and 5 p.m. on workdays. Any such inquiry 
will be acknowledged in writing within 10 days (excluding Saturdays, 
Sundays and legal public holidays) of receipt of the request (see 
paragraph (e) of this section).
    (b) Requests. A request for access to records or accountings of 
disclosure from records, shall:
    (1) Be signed in writing by the person making the request, who must 
be the individual about whom the record is maintained, or his duly 
authorized representative (see Sec.903.7);
    (2) State that it is made pursuant to the Privacy Act, 5 U.S.C. 
552a, or the regulations contained in this part;
    (3) Furnish the name of the system of records to which access is 
sought, or the name of the system for a disclosure from which an 
accounting is sought, as specified in the systems notices published in 
the Federal Register, Volume 40, No. 167;
    (4) Mark ``Privacy Act Request'' on the request and on the envelope 
in which the request is contained;
    (5) Be addressed as specified in paragraph (a) of this section, 
unless personally delivered;
    (6) State whether the requester wishes to inspect the records and/or 
accountings of disclosures therefrom, or desires to have a copy made and 
furnished without inspecting them;
    (7) State, if the requester desires to have a copy made, the 
requester's agreement to pay the fees for duplication as ultimately 
determined in accordance with Sec.903.6; and
    (8) Meet the requirements set forth in paragraph (c) of this 
section.
    (c) Verification of identity. Access to records contained in certain 
systems maintained by the Joint Board and/or accountings of disclosures 
from such records, will not be granted unless the individual requester's 
identity is verified. Where applicable, requirements for verification of 
identity are specified in the notices of systems published in the 
Federal Register, Volume 40, No. 167.
    (d) Exemptions. The procedures specified in paragraphs (a), (b) and 
(c) of this section shall not apply to: (1) Systems of records exempted 
pursuant to 5 U.S.C. 552a(k); (2) information compiled in reasonable 
anticipation of a civil action or proceeding (see 5 U.S.C. 552a(d)(5)); 
or (3) information regarding an individual which is contained in, and 
inseparable from, another individual's record.
    (e) Date of receipt of request. A request for access to records and/
or accountings shall be considered to have been received on the date on 
which the requirements of paragraphs (a), (b) and (c) of this section 
have been satisfied. Requests for access, and any separate agreement to 
pay, shall be stamped with the date of receipt by the Office of the 
Executive Director. The latest of such stamped dates will be deemed to 
be the date of receipt of the request.
    (f) Notification of determination--(1) In general. Notification of 
determinations as to whether to grant access to records and/or 
accountings requested will be made by the Executive Director of the 
Joint Board. The notification of the determination shall be made within 
30 days (excluding Saturdays, Sundays and legal public holidays) after 
the date of receipt of the request, as determined in accordance with 
paragraph (g) of this section. If it is not possible to respond within 
30 days, the Executive Director will inform the requester, stating the 
reason(s) for the delay (e.g., volume of records requested, need to 
consult other agencies, or the difficulty of the legal issues involved) 
and when a response will be dispatched (See 5 U.S.C. 552a (d) and (f)).
    (2) Granting of access. (i) When it has been determined that the 
request for access will be granted--(A) and a copy requested; such copy 
in a form comprehensible to him shall be furnished promptly, together 
with a statement of the applicable fees for duplication as set forth 
elsewhere in these regulations (See Sec.903.6); and (B) and the right 
to inspect has been requested, the requester shall be promptly notified 
in writing of the determination, and when and where the requested 
records and/or accountings may be inspected.
    (ii) An individual seeking to inspect records concerning himself 
and/or accountings of disclosure from such records may be accompanied by 
another individual of his own choosing. The individual seeking access 
shall be

[[Page 421]]

required to sign the required form indicating that the Joint Board is 
authorized to discuss the contents of the subject record in the 
accompanying person's presence. If, after making the inspection, the 
individual making the request desires a copy of all or portion of the 
requested records, such copy in a form comprehensible to him shall be 
furnished upon payment of the applicable fees for duplication as 
prescribed by Sec.903.6. Fees shall not be charged where they would 
amount, in the aggregate, to less than $53.00. (See 5 U.S.C. 552a (d) 
and (f):
    (3) Denial of request. (i) When it is determined that the request 
for access to records will be denied (whether in whole or in part or 
subject to conditions or exceptions), the person making the request 
shall be so notified by mail in accordance with paragraph (f)(1) of this 
section. The letter of notification shall contain a statement of the 
reasons for not granting the request as made, set forth the name and 
title or position of the responsible official and advise the individual 
making the request of the right to file suit in accordance with 5 U.S.C. 
552a(g)(1)(B).
    (ii) When it is determined that a request for access to accountings 
will be denied, the person making the request shall be so notified by 
mail in accordance with paragraph (f)(1)(4)(iii) of this section.
    (4) Records exempt in whole or in part. (i) When an individual 
requests records concerning himself which have been compiled in 
reasonable anticipation of a civil action or proceeding either in a 
court or before an administrative tribunal, the Executive Director will 
neither confirm nor deny the existence of the record but shall advise 
the individual only that no record available to him pursuant to the 
Privacy Act of 1974 has been identified.
    (ii) Requests for records which have been exempted from disclosure 
pursuant to 5 U.S.C. 552a(k)(2) shall be responded to in the manner 
provided in paragraph (f)(4)(i) of this section unless a review of the 
information indicates that the information has been used or is being 
used to deny the individual any right, privilege or benefit for which he 
is eligible or to which he would otherwise be entitled under Federal 
law. In that event, the individual shall be advised of the existence of 
the information but such information as would identify a confidential 
source shall be extracted or summarized in a manner which protects the 
source to the maximum degree possible and the summary extract shall be 
provided to the requesting individual.
    (iii) When an individual requests access to accountings of 
disclosure from records concerning himself which have been compiled in 
reasonable anticipation of a civil action or proceeding, either in a 
court or before an administrative tribunal, or which have been exempted 
from disclosure pursuant to 5 U.S.C. 552a(k)(2), the Executive Director 
will neither confirm nor deny the existence of the record or accountings 
of disclosure therefrom, but shall advise the individual that no 
accounting available to him pursuant to the Privacy Act of 1974 has been 
identified.



Sec.903.5  Procedures for amendment of records regarding individual--format, 

agency review and appeal from initial adverse agency determination.

    (a) In general. Subject to the application of exemptions promulgated 
by the Joint Board, in accordance with 5 U.S.C. 552a(k), the Executive 
Director shall, in conformance with 5 U.S.C. 552a(d)(2), permit an 
individual to request amendment of a record pertaining to him. Any such 
request shall be addressed to the Executive Director, Joint Board for 
the Enrollment of Actuaries, U.S. Department of the Treasury, 
Washington, DC 20220 or delivered personally to the Executive Director, 
Joint Board for the Enrollment of Actuaries, 2401 E Street, NW., suite 
1537, Washington, DC. Any request for amendment of records or any appeal 
from the initial denial of a request which does not fully comply with 
the requirements of this section will not be deemed subject to the time 
constraints of paragraph (e) of this section, unless and until amended 
so as to comply. However, the Executive Director shall forthwith advise 
the requester in what respect the request or appeal is deficient so that 
it may be resubmitted or amended. (See 5 U.S.C. 552a (d) and (f)).
    (b) Form of request to amend records. In order to be subject to the 
provisions of

[[Page 422]]

this section, a request to amend records shall:
    (1) Be made in writing and signed by the person making the request, 
who must be the individual about whom the record is maintained, or his 
duly authorized representative. (See Sec.903.7);
    (2) State that it is made pursuant to the Privacy Act, 5 U.S.C. 552a 
or these regulations;
    (3) Mark ``Privacy Act Amendment Request'' on the request and on the 
envelope; and
    (4) Reasonably describe the records which the individual desires to 
have amended, including, to the best of the requester's knowledge, dates 
of letters requesting access to such records previously and dates of 
letters in which notification concerning access was made, if any, and 
the individual's documentation justifying the correction. (See 5 U.S.C. 
552a (d) and (f)).
    (c) Date of receipt of request. A request for amendment of records 
pertaining to an individual shall be deemed to have been received for 
purposes of this subpart when the requirements of paragraphs (a) and (b) 
of this section have been satisfied. The Office of the Executive 
Director shall stamp the date of receipt of the request thereon. (See 5 
U.S.C. 552a (d) and (f)).
    (d) Review of requests to amend records. The Executive Director 
shall:
    (1) Not later than 10 days (excluding Saturdays, Sundays, and legal 
public holidays) after the date of receipt of such request, acknowledge 
in writing such receipt; and
    (2) Promptly, either--(i) make any correction of any portion of a 
record which the individual believes and the Executive Director agrees 
is not accurate, relevant, timely, or complete; or (ii) inform the 
individual of the refusal to amend the record in accordance with his 
request, the reason for the refusal, and that he may request that the 
Joint Board review such refusal. (See 5 U.S.C. 552a (d) and (f)).
    (e) Administrative appeal--(1) Ingeneral. The Joint Board shall 
permit individuals to request a review of initial decisions made under 
paragraph (d) of this section when an individual disagrees with a 
refusal to amend his record. (See 5 U.S.C. 552a(d), and (g)(1)).
    (2) Form of request for administrative review of refusal to amend 
record. At any time within 35 days after the date of the notification of 
the initial decision described in paragraph (d)(2)(ii) of this section, 
the requester may submit a request for review of such refusal to the 
official specified in the notification of the initial decision. The 
appeal shall:
    (i) Be made in writing stating any arguments in support thereof and 
be signed by the person to whom the record pertains, or his duly 
authorized representative (See Sec.903.7);
    (ii) Within 35 days of the date of the initial decision: (A) Be 
addressed and mailed to the Joint Board for the Enrollment of Actuaries, 
c/o U.S. Department of the Treasury, Washington, DC 20220; or (B) be 
personally delivered to the Executive Director, Joint Board for the 
Enrollment of Actuaries, 2401 E Street NW., suite 1537, Washington, DC 
on workdays between the hours of 9 a.m. and 5 p.m.;
    (iii) Have clearly marked on the appeal and on the envelope, 
``Privacy Act Amendment Appeal'';
    (iv) Reasonably describe the records requested to be amended; and
    (v) Specify the date of the initial request to amend records, and 
the date of the letter giving notification that the request was denied. 
(See 5 U.S.C. 552a (d) and (f)).
    (3) Date of Receipt. Appeals shall be promptly stamped with the date 
of their receipt by the Office of the Executive Director and such 
stamped date will be deemed to be the date of receipt for all purposes 
of this section. The receipt of the appeal shall be acknowledged within 
10 days from the date of receipt (unless the determination on appeal is 
dispatched in 10 days, in which case, no acknowledgment is required) by 
the Joint Board and the requester is advised of the date of receipt 
established by the foregoing and when a response is due in accordance 
with this paragraph. (See 5 U.S.C. 552a (d) and (f)).
    (4) Review of administrative appeals from denial of requests to 
amend records. The Joint Board shall complete the review and notify the 
requester of the final agency decision within 30 days (exclusive of 
Saturdays, Sundays and legal public holidays) after the date of

[[Page 423]]

receipt of such appeal, unless it extends the time for good cause shown. 
If such final agency decision is to refuse to amend the record, in whole 
or in part, the requester shall also be advised of his right; (i) to 
file a concise ``Statement of Disagreement'' setting forth the reasons 
for his disagreement with the decision which shall be filed within 35 
days of the date of the notification of the final agency decision and 
(ii) to seek judicial review of the final agency decision under 5 U.S.C. 
552a(g)(1)(A). (See 5 U.S.C. 552a (d), (f) and (g)(1)).
    (5) Notation on record and distribution of statements of 
disagreement. (i) The Executive Director is responsible, in any 
disclosure containing information about which an individual has filed a 
``Statement of Disagreement,'' occurring after the filing of the 
statement under paragraph (e)(4) of this section, for clearly noting any 
portion of the record which is disputed and providing copies of the 
statement and, if deemed appropriate, a concise statement of the Joint 
Board's reasons for not making the amendments requested, to persons or 
other agencies to whom the disputed record has been disclosed. (See 5 
U.S.C. 552a(d)(4)).
    (ii) In addition, when a ``Statement of Disagreement'' is filed 
regarding information previously disclosed to a person or other agency 
and when, for such disclosure, an accounting was made pursuant to 5 
U.S.C. 552(c)(1). then the Executive Director shall provide such person 
or other agency with the following:
    (A) Copy of the ``Statement of Disagreement'';
    (B) Copy of the portion of the previously disclosed in dispute 
clearly noted as disputed and;
    (C) If deemed approprirate, a concise statement of the Joint Board's 
reasons for not making requested amendments.
    (f) Records not subject to correction. The following records are not 
subject to correction or amendment by individuals:
    (1) Transcripts or written statements made under oath;
    (2) Transcripts of Grand Jury proceedings, judicial or quasi-
judicial proceedings which form the official record of those 
proceedings;
    (3) Pre-sentence reports comprising the property of the courts but 
maintained in agency files;
    (4) Records pertaining to the determination, the collection and the 
payment of federal taxes; and
    (5) Records duly exempted from correction by notice published in the 
Federal Register.

[41 FR 1493, Jan. 8, 1976, as amended at 45 FR 84994, Dec. 24, 1980]



Sec.903.6  Fees.

    Charges for copies of records made pursuant to part 903 of this 
chapter will be at the rate of $0.10 per copy. For records not 
susceptible to photocopying, e.g., over-size materials, photographs, 
etc., the amount charged will be the actual cost of copying. Only one 
copy of each record requested will be provided. No charge will be made 
unless the charge as computed above would exceed $3 for each request or 
related series of requests. If a fee in excess of $25 is required, the 
requester will be notified that the fee must be tendered before the 
records will be copied.



Sec.903.7  Guardianship.

    The guardian of a person judicially determined to be incompetent 
shall, in addition to establishing the identity of the person he 
represents, establish his own guardianship by furnishing a copy of a 
court order establishing the guardianship and may thereafter act on 
behalf of such individual. (See 5 U.S.C. 552a(h)).



Sec.903.8  Exemptions.

    (a) Names of systems: JBEA-2, Enrolled Actuary Disciplinary Records; 
and JBEA-4, Enrolled Actuary Enrollment Records.
    (b) Provisions from which exempted: These systems contain records 
described in section (k)(2) of the Privacy Act of 1974, 5 U.S.C. 
552a(k)(2). Exemptions are claimed for such records only where 
appropriate from the following provisions: sections (c)(3); (d); (e)(1); 
(e)(4)(G), (e)(4)(H), and (e)(4)(I); and (f) of 5 U.S.C. 552a.
    (c) Reasons for claimed exemptions: (1) The Privacy Act of 1974 
creates several methods by which individuals may learn of and obtain 
records containing

[[Page 424]]

information on such individuals and consisting of investigatory material 
compiled for law enforcement purposes. These methods are as follows: 
Subsection (c)(3) allows individuals to discover if other agencies are 
investigating such individuals; subsections (d)(1), (e)(4)(H) and 
(f)(2), (3) and (5) establish the ability of individuals to gain access 
to investigatory material compiled on such individuals; subsections 
(d)(2), (3) and (4), (e)(4)(H) and (f)(4) presuppose access and enable 
individuals to contest the contents of investigatory material compiled 
on these individuals; and subsections (e)(4)(G) and (f)(1) allow 
individuals to determine whether or not they are under investigation. 
Because these subsections are variations upon the individual's ability 
to ascertain whether his civil or criminal misconduct has been 
discovered, these subsections have been grouped together for purposes of 
this notice.
    (2)(i) The Joint Board believes that imposition of the requirements 
of subsection (c)(3), which requires that accountings of disclosures be 
made available to individuals, would impair the ability of the Joint 
Board and other investigative entities to conduct investigations of 
alleged or suspected violations of the regulations governing the 
performance of actuarial services with respect to plans to which the 
Employee Retirement Income Security Act (ERISA) applies, and of civil or 
criminal laws. Making the accountings of disclosures available to 
individuals enables such individuals to identify entities investigating 
them and thereby to determine the nature of the violations of which they 
are suspected. With such knowledge, individuals would be able to alter 
their illegal activities, destroy or alter evidence of such activities 
and seriously impair the successful completion of investigations. For 
these reasons, the Joint Board claims exemption from the requirements of 
subsection (c)(3) of the Act.
    (ii) With respect to subsections (d)(1), (e)(4)(H), and (f)(2), (3) 
and (5), the Joint Board believes that access to investigatory material 
would prevent the successful completion of investigations. Individuals 
who gain access to investigatory material involving them discover the 
nature and extent of the violations of regulations, and of civil and 
criminal laws, of which they are suspected. By gaining access, such 
individuals also learn the facts developed during investigations. 
Knowledge of these matters enables these individuals to destroy or alter 
evidence which would otherwise have been used against them. In addition, 
knowledge of the facts and suspected violations gives individuals, who 
are committing ongoing violations, or who are about to commit violations 
of regulations, or of civil or criminal laws, the opportunity to 
temporarily postpone the commission of the violations or to effectively 
disguise the commission of these violations. Material compiled on 
investigated individuals reveals investigative techniques and 
procedures, disclosure of which enables such individuals to structure 
their illegal activities so as to escape detection. Further, such 
material may contain, or by its very nature reveal, the identity of 
confidential sources. When the identities of confidential sources are 
revealed, they may be subjected to various forms of reprisal. If 
confidential sources of information are subjected to actual reprisals or 
fear thereof, they may become reluctant to provide information necessary 
to identify or prove the guilt of persons who violate regulations, or 
civil or criminal laws. Further, the protections afforded by the above-
referenced subsections are unnecessary because the Joint Board may not 
deny enrollment or suspend or terminate the enrollment of an individual 
to perform actuarial services until it has provided such individual with 
due process safeguards. For these reasons, the Joint Board claims 
exemptions from the requirements of subsections (d)(1), (e)(4)(H), and 
(f)(2), (3), and (5) of the Act.
    (iii) With respect to subsections (d) (2), (3) and (4), (e)(4)(H), 
and (f)(4), the Joint Board believes that the imposition of these 
requirements, which presuppose access and provide for amending records, 
would impair the ability to conduct investigations and would be 
unnecessary for the same reasons stated in the preceding subsection 
(2)(ii). These reasons herein are incorporated by reference. Therefore, 
the Joint

[[Page 425]]

Board claims exemptions from the requirements of subsections (d)(2), 
(3), and (4), (e)(4)(H), and (f)(4).
    (iv) With respect to subsections (e)(4)(G) and (f)(1), the Joint 
Board believes that informing individuals that they are the subjects of 
a particular system or systems of records would impair the ability of 
the Joint Board and its agents to successfully complete investigations 
of suspected or alleged violators of the regulations governing the 
performance of actuarial services with respect to plans to which ERISA 
applies. Individuals who learn that they are suspected of violating said 
regulations are given the opportunity to destroy or alter evidence 
needed to prove the alleged violations. Such individuals may also be 
able to impair investigations by temporarily suspending or restructuring 
the activities which place them in violation of said regulations. 
Further, as noted in the preceding subsection (2)(ii) and incorporated 
by reference herein, the procedural requirements imposed on the Joint 
Board by ERISA make the protections afforded by subsections (e)(4)(G) 
and (f)(1) unnecessary. For these reasons, the Joint Board claims 
exemptions from the requirements of subsections (e)(4)(G) and (f)(1).
    (v) Subsection (e)(1) of the Privacy Act of 1974 requires that the 
Joint Board maintain in its records only information that is relevant 
and necessary to accomplish a purpose of the Office required to be 
accomplished by statute or by executive order of the President. The 
Joint Board believes that imposition of said requirement would seriously 
impair its ability, and the abilities of its agents and other 
investigative entities to effectively investigate suspected or alleged 
violations of regulations and of civil or criminal laws. The Joint Board 
does not initiate inquires into individuals' conduct unless it receives 
information evidencing violation by such individuals of the regulations 
governing performance of actuarial services with respect to plans to 
which ERISA applies. Sources of such information may be unfamiliar with 
the Joint Board's interpretations of said regulations and, therefore, 
may not always provide only relevant and necessary information. 
Therefore, it may often be impossible to determine whether or not 
information is relevant and necessary. For these reasons, the Joint 
Board claims exemption from the requirements of subsection (e)(1).
    (vi) Subsection (e)(4)(I) of the Privacy Act of 1974 requires the 
publication of the categories of sources of records in each system of 
records. The Joint Board believes that imposition of said requirement 
would seriously impair its ability to obtain information from such 
sources for the following reasons. Revealing such categories of sources 
could disclose investigative techniques and procedures and could cause 
sources to decline to provide information because of fear of reprisal, 
or fear of breaches of promises of confidentiality. For these reasons, 
the Joint Board claims exemption from the requirements of subsection 
(e)(4)(I).

[41 FR 1493, Jan. 8, 1976, as amended at 75 FR 81455, Dec. 28, 2010]

                        PARTS 904-999 [RESERVED]

[[Page 427]]



 CHAPTER IX--OFFICE OF THE ASSISTANT SECRETARY FOR VETERANS' EMPLOYMENT 

                AND TRAINING SERVICE, DEPARTMENT OF LABOR




  --------------------------------------------------------------------
Part                                                                Page
1000

[Reserved]

1001            Services for veterans.......................         429
1002            Regulations under the Uniformed Services 
                    Employment and Reemployment Rights Act 
                    of 1994.................................         438
1010            Application of priority of service for 
                    covered persons.........................         475
1011-1099       [Reserved]

[[Page 429]]

                          PART 1000 [RESERVED]



PART 1001_SERVICES FOR VETERANS--Table of Contents



                    Subpart A_Purpose and Definitions

Sec.
1001.100 Purpose and scope of subpart.
1001.101 Definitions of terms used in subpart.

                   Subpart B_Federal Responsibilities

1001.110 Role of the Assistant Secretary for Veterans' Employment and 
          Training (ASVET).

 Subpart C_Standards of Performance Governing State Agency Services to 
                      Veterans and Eligible Persons

1001.120 Standards of performance governing State agency services.
1001.121 Performance standard on facilities and support for Veterans' 
          Employment and Training Service (VETS) staff.
1001.122 Reporting and budget requirements.
1001.123 Performance standards governing the assignment and role of 
          Local Veterans' Employment Representatives (LVERs).
1001.124 Standards of performance governing State agency cooperation and 
          coordination with other agencies and organizations.
1001.125 Standards of performance governing complaints of veterans and 
          eligible persons.

          Subpart D_State Employment Service Agency Compliance

1001.130 Determination of compliance.
1001.131 Secretary's annual report to Congress.

   Subpart E_Standards of Performance Governing the Disabled Veterans 
                         Outreach Program (DVOP)

1001.140 Administration of DVOP.
1001.141 Functions of DVOP staff.
1001.142 Stationing of DVOP staff.

  Subpart F_Formula for the Allocation of Grant Funds to State Agencies

1001.150 Method of calculating State basic grant awards.
1001.151 Other funding criteria.
1001.152 Hold-harmless criteria and minimum funding level.

                    Subpart G_Purpose and Definitions

1001.160 What is the purpose and scope of this part?
1001.161 What definitions apply to this part?
1001.162 How does the Department define veteran for purposes of this 
          subpart?
1001.163 What is the national entered employment rate (EER) and what is 
          a State's program year EER for purposes of this part?
1001.164 What is the uniform national threshold EER, and how will it be 
          calculated?
1001.165 When will the uniform national threshold EER be published?
1001.166 How will the uniform national threshold EER be used to evaluate 
          whether a State will be required to submit a Corrective Action 
          Plan (CAP)?
1001.167 In addition to the procedures specified in this part, will the 
          Department be conducting any other monitoring of compliance 
          regarding services to veterans?

    Authority: 29 U.S.C. 49k; 38 U.S.C. chapters 41 and 42.



                    Subpart A_Purpose and Definitions



Sec.1001.100  Purpose and scope of subpart.

    (a) This subpart contains the Department of Labor's regulations for 
implementing 38 U.S.C. 2001-2012, chapters 41 and 42, which require the 
Secretary of Labor to provide eligible veterans and eligible persons the 
maximum of employment and training opportunities, with priority given to 
the needs of disabled veterans and veterans of the Vietnam era, through 
the public employment service system established pursuant to the Wagner-
Peyser Act, as amended.
    (b) This subpart describes the roles and responsibilities of the 
Assistant Secretary for Veterans' Employment and Training (ASVET) and 
the staff of the Veterans' Employment and Training Service (VETS).
    (c) This subpart describes the performance standards for determining 
compliance of State agencies in carrying out the provisions of 38 
U.S.C., chapters 41 and 42 with respect to:
    (1) Providing services to eligible veterans and eligible persons to 
enhance their employment prospects,
    (2) Priority referral of special disabled veterans and veterans of 
the Vietnam era to job openings listed by

[[Page 430]]

Federal contractors pursuant to 38 U.S.C. 2012(a), and
    (3) Reporting of services provided to eligible veterans and eligible 
persons pursuant to 38 U.S.C. 2007(c) and 2012(c).
    (d) Performance standards are contained in this part at Sec. Sec.
1001.140-1001.142 on the conduct of the Disabled Veterans Outreach 
Program (DVOP) in accordance with 38 U.S.C. 2003A.

[49 FR 12919, Mar. 30, 1984. Redesignated and amended at 54 FR 39353, 
Sept. 26, 1989]



Sec.1001.101  Definitions of terms used in subpart.

    Assistant Secretary for Veterans' Employment and Training (ASVET) 
shall mean the official of the Department of Labor as described in Sec.
1001.110 of this part.
    Assistant State Director for Veterans' Employment and Training 
Service (ASDVETS) shall mean a Federal employee who is designated as an 
assistant to a State Director for Veterans' Employment and Training 
Service (SDVETS).
    Disabled Veteran shall mean a veteran who is entitled to 
compensation (or who but for the receipt of military retired pay would 
be entitled to compensation) under laws administered by the Veterans 
Administration and whos not classified as a Special Disabled Veteran.
    Eligible person shall mean:
    (1) The spouse of any person who died of a service-connected 
disability; or
    (2) The spouse of any member of the armed forces serving on active 
duty who at the time of application for assistance under this subpart, 
is listed, pursuant to 37 U.S.C. 556 and the regulations issued 
thereunder, by the Secretary concerned, in one or more of the following 
categories and has been so listed for a total of more than 90 days: (i) 
Missing in action, (ii) captured in line of duty by a hostile force, or 
(iii) forcibly detained or interned in line of duty by a foreign 
government or power; or
    (3) The spouse of any person who has a total disability permanent in 
nature resulting from a service-connected disability or the spouse of a 
veteran who died while a disability so evaluated was in existence.
    Eligible veteran shall mean a person who (1) served on active duty 
for a period of more than 180 days and was discharged or released 
therefrom with other than a dishonorable discharge, or (2) was 
discharged or released from active duty because of a service-connected 
disability.
    Local Veterans' Employment Representative (LVER) shall mean a member 
of the State agency staff designated and assigned by the State agency 
administrator to serve veterans and eligible persons pursuant to this 
subpart.
    Regional Director for Veterans' Employment and Training Service 
(RDVETS) is the representative of the ASVET on the staff of the 
Veterans' Employment and Training Service (VETS) at the regional level; 
supervises all other VETS staff within the region to which assigned; and 
shall report to, be responsible to, and be under the administrative 
direction of the ASVET.
    Service Delivery Point (SDP) shall mean a designated local 
employment service office which serves an area that may also contain 
extended service locations.
    Special disabled veteran shall mean (1) a veteran who is entitled to 
compensation (or who but for the receipt of military retired pay would 
be entitled to compensation) under laws administered by the Veterans 
Administration for a disability rated at 30 percent or more, or (2) a 
person who was discharged or released from active duty because of a 
service-connected disability.
    State agency means the State governmental unit designated pursuant 
to section 4 of the Wagner-Peyser Act, as amended, to cooperate with the 
United States Employment Service in the operation of the public 
employment service system.
    State Director for Veterans' Employment and Training Service 
(SDVETS) is the representative of ASVET on the staff of the Veterans' 
Employment and Training Service (VETS) at the State level.
    United States Employment Service (USES) shall mean the component of 
the Employment and Training Administration of the Department of Labor, 
established under the Wagner-Peyser

[[Page 431]]

Act, as amended, to maintain and coordinate a national system of public 
employment service agencies.
    Veteran of the Vietnam era shall mean an eligible veteran who (1) 
served on active duty for a period of more than 180 days, any part of 
which occurred during the Vietnam era (August 5, 1964, through May 7, 
1975) and was discharged or released therefrom with other than a 
dishonorable discharge; or (2) was discharged or released from active 
duty for a service-connected disability if any part of such active duty 
was performed during the Vietnam era.
    Veterans' Employment and Training Service (VETS) shall mean the 
organizational component of the Department of Labor administered by the 
Assistant Secretary of Labor for Veterans' Employment and Training 
established to promulgate and administer policies and regulations to 
provide eligible veterans and eligible persons the maximum of employment 
and training opportunities according to 38 U.S.C. 2002.

[49 FR 12919, Mar. 30, 1984. Redesignated and amended at 54 FR 39353, 
Sept. 26, 1989]



                   Subpart B_Federal Responsibilities



Sec.1001.110  Role of the Assistant Secretary for Veterans' Employment and 

Training (ASVET).

    (a) As the principal veterans' advisor to the Secretary of Labor, 
the ASVET shall formulate, promulgate, and administer policies, 
regulations, grant procedures, grant agreements and administrative 
guidelines and administer them through the Veterans' Employment and 
Training Service (VETS) so as to provide eligible veterans and eligible 
persons the maximum of employment and training opportunities, with 
priority given to the needs of disabled veterans and veterans of the 
Vietnam era, through existing programs, coordination, and merger of 
programs and implementation of new programs.
    (b) ASVET shall oversee activities carried out by State agencies 
pursuant to 38 U.S.C., chapters 41 and 42.
    (c) ASVET shall ensure that appropriate records and reports are 
maintained by State agencies within their management information systems 
to fulfill their obligations under this subpart.

[49 FR 12919, Mar. 30, 1984. Redesignated at 54 FR 39353, Sept. 26, 
1989]



 Subpart C_Standards of Performance Governing State Agency Services to 

                      Veterans and Eligible Persons

    Source: 49 FR 12919, Mar. 30, 1984, unless otherwise noted. 
Redesignated at 54 FR 39353, Sept. 26, 1989.



Sec.1001.120  Standards of performance governing State agency services.

    (a) To the extent required by 38 U.S.C. 2002 and other applicable 
law, each State agency shall assure that all of its SDPs, using LVERs 
and other staff, shall provide maximum employment and training 
opportunities to eligible veterans and eligible persons with priority 
given to disabled veterans and veterans of the Vietnam-era, by giving 
them preference over non-veterans in the provision of employment and 
training services available at the SDP involved. Services are those 
activities or efforts including but not limited to registration, 
counseling, referral to supportive services, job development, etc., 
which are directed to help applicants find jobs or training. When making 
referrals from the group of applicants meeting the specific eligibility 
criteria for a particular program, State agencies shall observe the 
priority order to referral in paragraph (b).
    (b) In making referrals of qualified applicants to job openings and 
training opportunities, to provide maximum employment and training 
opportunities under 38 U.S.C., SDPs shall observe the following order of 
priority:
    (1) Special disabled veterans;
    (2) Veterans of the Vietnam era;
    (3) Disabled veterans other than special disabled veterans;
    (4) All other veterans and eligible persons; and
    (5) Nonveterans.

[[Page 432]]



Sec.1001.121  Performance standard on facilities and support for Veterans' 

Employment and Training Service (VETS) staff.

    Each State agency shall provide adequate and appropriate facilities 
and administrative support such as office space, furniture, telephone, 
equipment, and supplies to VETS staff.



Sec.1001.122  Reporting and budget requirements.

    (a) State agencies shall provide RDVETS, SDVETS, and ASDVETS with 
access to regular and special internal State agency reports which relate 
in whole or in part with services to veterans and/or eligible persons.
    (b) Each State agency shall make reports and prepare budgets 
pursuant to instructions issued by the ASVET and in such format as the 
ASVET shall prescribe.



Sec.1001.123  Performance standards governing the assignment and role of Local 

Veterans' Employment Representatives (LVERs).

    (a) To carry out the requirements of 38 U.S.C. 2004, at least one 
member of each State agency staff, preferably an eligible veteran, shall 
be designated and assigned by each State agency administrator as a full-
time or part-time LVER in each SDP in accordance with terms/requirements 
of a grant agreement approved by the ASVET. The ASVET intends to use the 
following criteria in establishing the terms and requirements of grant 
agreements:
    (1) At least one full-time LVER shall be assigned in each SDP which 
has had 1,000 new or renewed applications from veterans and eligible 
persons during the most recent twelve-month report period unless a 
waiver based on demonstrated lack of need is granted by the ASVET, and
    (2) At least one part-time LVER whose time shall be devoted to 
veterans' services in proportion to the full-time criteria shall be 
assigned to each SDP not meeting the criteria for full-time LVERs in 
paragraph (a)(1) of this section.
    (b) Additional full-time or part-time LVERs may be assigned based on 
a determination of need by the State agency administrator and in 
accordance with terms/requirements of a grant agreement approved by the 
ASVET.
    (c) Each LVER shall perform, at the SDP level, the duties prescribed 
at 38 U.S.C. 2003(c) required by 38 U.S.C. 2004.

[49 FR 12919, Mar. 30, 1984. Redesignated and amended at 54 FR 39353, 
Sept. 26, 1989]



Sec.1001.124  Standards of performance governing State agency cooperation and 

coordination with other agencies and organizations.

    (a) Each State agency shall establish cooperative working 
relationships through written agreements with the Veterans 
Administration (VA) offices serving the State to maximize the use of VA 
employment and training programs for veterans and eligible persons.
    (b) All programs and activities governed by this subpart will be 
coordinated to the maximum extent feasible with other programs and 
activities under 38 U.S.C., the Wagner-Peyser Act, the Job Training 
Partnership Act, and other employment and training programs at the State 
and local level.
    (c) Such relationships or agreements may be described in the 
Governor's Coordination and Special Services Plan prepared according to 
section 121(b) of the Job Training Partnership Act (Pub. L. 97-300).



Sec.1001.125  Standards of performance governing complaints of veterans and 

eligible persons.

    Each SDP shall display information on the various complaint systems 
to advise veterans and eligible persons about procedures for filing 
employment service, Federal contractor, equal opportunity, and other 
complaints.



          Subpart D_State Employment Service Agency Compliance



Sec.1001.130  Determination of compliance.

    (a) The ASVET shall have authority for applying the requirements and 
remedial actions necessary to implement 20 CFR part 658, subpart H. In 
the event of such application, references in 20 CFR part 658, subpart H, 
to ``ETA'' shall read instead ``OASVET''; references to ``Regional 
Administrator''

[[Page 433]]

shall read instead ``RDVETS''; and references to ``JS regulations'' 
shall include this part.
    (b) The ASVET shall establish appropriate program and management 
measurement and appraisal mechanisms to ensure that the standards of 
performance set forth in Sec. Sec.1001.120-1001.125 of this part are 
met. Specific performance standards designed to measure State agency 
services provided to veterans and eligible persons required by Sec.
1001.120(a) of this part will be developed administratively through 
negotiations between State agency administrators and SDVETS and 
numerical values of the standards will be published as public notices in 
the Federal Register. A full report of those State agencies in 
noncompliance with the standards of performance and their corrective 
action plans shall be incorporated into the Secretary's annual report to 
the Congress cited at Sec.1001.131 of this part.
    (c) Every effort should be made by the State agency administrator 
and the SDVETS to resolve all issues informally before proceeding with 
the formal process.
    (d) If it is determined by the ASVET that certain State agencies are 
not complying with the performance standards at Sec. Sec.1001.120-
1001.125 of this part, such State agencies shall be required to provide 
documentary evidence to the ASVET that their failure is based on good 
cause. If good cause is not shown, the ASVET, pursuant to subpart H of 
20 CFR part 658, shall formally designate the State agency as out of 
compliance, shall require it to submit a corrective action plan for the 
following program year, and may take other action against the State 
agency pursuant to subpart H of 20 CFR part 658.

[49 FR 12919, Mar. 30, 1984. Redesignated and amended at 54 FR 39353, 
Sept. 26, 1989]



Sec.1001.131  Secretary's annual report to Congress.

    The Secretary shall report, after the end of each program year, on 
the success of the Department and State agencies in carrying out the 
provisions of this part.

[49 FR 12919, Mar. 30, 1984. Redesignated at 54 FR 39353, Sept. 26, 
1989, and amended at 54 FR 39354, Sept. 26, 1989]



   Subpart E_Standards of Performance Governing the Disabled Veterans 

                         Outreach Program (DVOP)

    Source: 49 FR 12919, Mar. 30, 1984, unless otherwise noted. 
Redesignated at 54 FR 39353, Sept. 26, 1989.



Sec.1001.140  Administration of DVOP.

    (a) The ASVET shall negotiate and enter into grant agreements within 
each State to carry out the requirements of 38 U.S.C. 2003A for support 
of a Disabled Veterans Outreach Program (DVOP) to meet the employment 
needs of veterans, especially disabled veterans of the Vietnam era.
    (b) The ASVET shall be responsible forthe supervision and monitoring 
of the DVOP program, including monitoring of the appointment of DVOP 
specialists.
    (c) DVOP specialists shall be in addition to and shall not supplant 
local veterans' employment representatives assigned under Sec.1001.123 
of this part.

[49 FR 12919, Mar. 30, 1984. Redesignated at 54 FR 39353, Sept. 26, 
1989, and amended at 54 FR 39354, Sept. 26, 1989]



Sec.1001.141  Functions of DVOP staff.

    Each DVOP specialist shall carry out the duties and functions for 
providing services to eligible veterans according to provisions of 38 
U.S.C. 2003A (b) and (c).



Sec.1001.142  Stationing of DVOP staff.

    DVOP specialists shall be stationed at various locations in 
accordance with 38 U.S.C. 2003A(b)(2).



  Subpart F_Formula for the Allocation of Grant Funds to State Agencies

    Source: 70 FR 28406, May 17, 2005, unless otherwise noted.

[[Page 434]]



Sec.1001.150  Method of calculating State basic grant awards.

    (a) In determining the amount of funds available to each State, the 
ratio of the number of veterans seeking employment in the State to the 
number of veterans seeking employment in all States will be used.
    (b) The number of veterans seeking employment will be determined 
based on the number of veterans in the civilian labor force and the 
number of unemployed persons. The civilian labor force data will be 
obtained from the Current Population Survey (CPS) and the unemployment 
data will be obtained from the Local Area Unemployment Statistics 
(LAUS), both of which are compiled by the Department of Labor's Bureau 
of Labor Statistics.
    (c) Each State's basic grant allocation will be determined by 
dividing the number of unemployed persons in each State by the number of 
unemployed persons across all States (LAUS for the individual States / 
LAUS for all States) and by dividing the number of veterans in the 
civilian labor force in each State by the number of veterans in the 
civilian labor force across all States (CPS for the individual States / 
CPS for all States). The result of these two ratios will be averaged and 
converted to a percentage of veterans seeking employment in the State 
compared to the percentage of veterans seeking employment in all States. 
Three-year averages of the CPS and LAUS data will be used in calculating 
the funding formula to stabilize the effect of annual fluctuations in 
the data in order to avoid undue fluctuations in the annual basic grant 
amounts allocated to States.
    (d) State Plans are prepared in response to estimated basic grant 
allocation amounts prepared by the Department of Labor, based upon a 
projection of the appropriation. Variations from Department of Labor 
projections will be treated as follows:
    (1) If the actual appropriation varies from the projection, the 
Secretary will make every reasonable effort to avoid recalculating the 
estimated basic grant allocation amounts, in order to maintain the 
delivery of services to veterans and to minimize the administrative 
workload required to recalculate grant allocations and to revise State 
Plans. Therefore upon enactment and allotment of an appropriated amount, 
it is the Department's intent to proceed by awarding the estimated basic 
grant allocation amounts to State agencies, unless the difference 
between the projection and the appropriation creates a compelling reason 
to do otherwise.
    (2) If the actual appropriation exceeds the projection, the 
Secretary will determine whether the appropriation and the projection is 
large enough to warrant recalculating the State basic grant amounts. In 
such case, state basic grant amounts will be recalculated in accordance 
with paragraphs (a) through (c) of this section. If it is determined 
that no compelling reason to recalculate exists, the increased amount 
available for basic grants will be retained as undistributed funds. 
These undistributed basic grant funds will be retained separately from 
the funds retained for TAP workload and other exigencies, as established 
by Sec.1001.151(a). The intent will be to award these undistributed 
basic grant funds to States as basic grant supplements, in response to 
circumstances arising during the applicable fiscal year.
    (3) If the actual appropriation falls below the projection, the 
Secretary will determine whether the lower appropriation creates a 
compelling reason to recalculate the State basic grant amounts. If it is 
determined that not recalculating the State basic grant amounts would 
jeopardize the availability of sufficient funding for TAP workload and 
other exigencies, a compelling reason to recalculate would exist. In 
that case, the State basic grant amounts will be recalculated under 
paragraphs (a) through (c) of this section in response to the reduced 
appropriation, to the extent required to assure that sufficient funding 
is available for TAP workload and other exigencies.



Sec.1001.151  Other funding criteria.

    (a) Up to four percent of the total amount available for allocation 
will be available for distribution based on Transition Assistance 
Program (TAP) workload and other exigencies.
    (b) Funding for TAP workshops will be allocated on a per workshop 
basis.

[[Page 435]]

Funding to the States will be provided pursuant to the approved State 
Plan.
    (c) Funds for exigent circumstances, such as unusually high levels 
of unemployment, surges in the demand for transitioning services, 
including the need for TAP workshops, will be allocated based on need.



Sec.1001.152  Hold-harmless criteria and minimum funding level.

    (a) A hold-harmless rate of 90 percent of the prior year's funding 
level will be applied after the funding formula phase-in period is 
completed (beginning fiscal year 2006 and subsequent years).
    (b) A hold-harmless rate of 80 percent of the prior year's funding 
level will be applied for fiscal year 2005.
    (c) A minimum funding level is established to ensure that in any 
year, no State will receive less than 0.28 percent (.0028) of the 
previous year's total funding for all States.
    (d) If the appropriation for a given fiscal year does not provide 
sufficient funds to comply with the hold-harmless provision, the 
Department will:
    (1) Update, as appropriate, the States' estimates of TAP workload 
and reserve sufficient funds for that purpose from the total amount 
available for allocation to the States. Beyond TAP workload, no funds 
will be reserved for exigent circumstances because the shortfall in the 
appropriation will be the primary exigent circumstance to be addressed.
    (2) Apply proportionally the remaining balance available for basic 
grant allocations to the States for that fiscal year. The proportion 
will be calculated by dividing the remaining balance available for 
allocation by the total estimated State basic grant allocations for that 
fiscal year. The proportion resulting from that calculation will be 
applied to each State's estimated basic grant allocation to calculate 
the amount to be awarded.



                    Subpart G_Purpose and Definitions

    Source: 78 FR 15290, Mar. 11, 2013, unless otherwise noted.



Sec.1001.160  What is the purpose and scope of this part?

    (a) The purpose of this part is to fulfill the requirement of 38 
U.S.C. 4102A(c)(3)(B) to establish a uniform national threshold entered 
employment rate (UNTEER) achieved for veterans and eligible persons by 
the State employment service delivery systems. We will use the UNTEER as 
part of the review process for determining whether a State's program 
year EER is deficient and a Corrective Action Plan (CAP) is required of 
that State employment service delivery system.
    (b) This part is applicable to all State agencies that are 
recipients of Wagner-Peyser State Grants, and/or Jobs for Veterans State 
Grants.



Sec.1001.161  What definitions apply to this part?

    Department means the United States Department of Labor, including 
its agencies and organizational units and their representatives.
    Eligible person, as defined at 38 U.S.C. 4101(5), means:
    (1) The spouse of any person who died of a service-connected 
disability;
    (2) The spouse of any member of the Armed Forces serving on active 
duty who, at the time of application for assistance under this chapter, 
is listed, pursuant to 37 U.S.C. 556 and regulations issued thereunder 
by the Secretary concerned, in one or more of the following categories 
and has been so listed for a total of more than ninety days:
    (i) Missing in action,
    (ii) Captured in line of duty by a hostile force, or
    (iii) Forcibly detained or interned in line of duty by a foreign 
government or power; or
    (3) The spouse of any person who has a total disability permanent in 
nature resulting from a service-connected disability or the spouse of a 
veteran who died while a disability so evaluated was in existence.
    Employment service delivery system, as defined at 38 U.S.C. 4101(7), 
means a service delivery system at which or through which labor exchange 
services, including employment, training, and placement services, are 
offered in accordance with the Wagner-Peyser Act.

[[Page 436]]

    Jobs for Veterans Act (JVA) means Public Law 107-288, 116 Stat. 2033 
(2002), codified at 38 U.S.C. chapters 41 and 42.
    Jobs for Veterans State Grant (JVSG) means an award of Federal 
financial assistance by the Department to a State for the purposes of 
the Disabled Veterans' Outreach Program or the Local Veterans' 
Employment Representative Program.
    Program year is the period from July 1 of a year through June 30 of 
the following year and is numbered according to the calendar year in 
which it begins.



Sec.1001.162  How does the Department define veteran for purposes of this 

subpart?

    The Department applies two definitions of veteran for the purposes 
of this subpart and has established two stages for the implementation of 
these definitions.
    (a) The first stage of implementation begins with application of 
this subpart G to the first program year following May 10, 2013. As of 
that date, veteran is defined as it is in 38 U.S.C. 4211(4), as a person 
who:
    (1) Served on active duty for a period of more than 180 days and was 
discharged or released therefrom with other than a dishonorable 
discharge;
    (2) Was discharged or released from active duty because of a 
service-connected disability;
    (3) As a member of a reserve component under an order to active duty 
pursuant to 10 U.S.C. 12301(a), (d), or (g), 12302, or 12304, served on 
active duty during a period of war or in a campaign or expedition for 
which a campaign badge is authorized and was discharged or released from 
such duty with other than a dishonorable discharge; or
    (4) Was discharged or released from active duty by reason of a sole 
survivorship discharge (as that term is defined in 10 U.S.C.1174(i)).
    (b) The second stage of implementation begins with the first day of 
the program year that begins two years after the first day of the 
program year that State grantees begin collecting and maintaining data 
as required by 20 CFR 1010.330(c). As of that date, veteran will be 
defined as it is in 20 CFR 1010.110:
    (1) A person who served in the active military, naval, or air 
service, and who was discharged or released there from under conditions 
other than dishonorable, as specified in 38 U.S.C. 101(2).
    (2) Active service includes full-time Federal service in the 
National Guard or a Reserve component, other than full-time duty for 
training purposes.
    (c) During the second stage of implementation, any veteran who meets 
the definition specified in paragraph (a) of this section will be 
considered to meet the definition specified in paragraph (b) of this 
section.
    (d) We will notify State grantees when they are required to begin 
implementing 20 CFR 1010.330(c).



Sec.1001.163  What is the national entered employment rate (EER) and what is a 

State's program year EER for purposes of this part?

    (a) For purposes of this part, we use the EER for veterans and 
eligible persons. This is the EER as applied to veterans (as defined in 
Sec.1001.162) and eligible persons (as defined in Sec.1001.161) who 
are participants in State employment service delivery systems.
    (b) The EER for veterans and eligible persons measures the number of 
the participants described in paragraph (a) of this section who are 
employed after exiting an employment service delivery system compared to 
the total number of those participants who exited. We will issue policy 
guidance to establish the method of calculating the EER.
    (c) The national EER for veterans and eligible persons is the EER 
achieved by the national State employment service delivery system for 
those veterans and eligible persons who are participants in all of the 
State employment service delivery systems for the program year under 
review. The national EER resulting from this calculation is expressed as 
a percentage that is rounded to the nearest tenth of a percent.
    (d) A State's program year EER is the EER for veterans and eligible 
persons (as calculated in paragraph (b) of this section) achieved by a 
single State's employment service delivery system for those veterans and 
eligible persons who are included in the EER measure for that State's 
employment

[[Page 437]]

service delivery system for the program year under review. The program 
year EER resulting from this calculation is expressed as a percentage 
that is rounded to the nearest tenth of a percent.



Sec.1001.164  What is the uniform national threshold EER, and how will it be 

calculated?

    (a) The uniform national threshold EER for a program year is equal 
to 90 percent of the national EER for veterans and eligible persons (as 
defined in Sec.1001.163(c)).
    (b) The uniform national threshold EER resulting from this 
calculation is expressed as a percentage that is rounded to the nearest 
tenth of a percent.



Sec.1001.165  When will the uniform national threshold EER be published?

    When practicable, the Veterans' Employment and Training Service 
(VETS) will publish the uniform national threshold EER for a given 
program year by the end of December of the calendar year in which that 
program year ends.



Sec.1001.166  How will the uniform national threshold EER be used to evaluate 

whether a State will be required to submit a Corrective Action Plan (CAP)?

    (a) Comparison. Each State's program year EER will be compared to 
the uniform national threshold EER for that program year. State agencies 
that do not achieve a program year EER that equals or exceeds the 
uniform national threshold EER (90 percent of the national EER) for the 
year under review will be subject to a review by VETS, with input from 
the Employment and Training Administration (ETA), to determine whether 
the program year EER is deficient.
    (b) Review. For each State whose program year EER is subject to 
review to determine deficiency, the review will consider the degree of 
difference between the State's program year EER and the uniform national 
threshold EER for that program year, as well as the annual unemployment 
data for the State as compiled by the Bureau of Labor Statistics.
    (1) The review also may consider other relevant measures of 
prevailing economic conditions and regional economic conditions, as well 
as other measures of the performance of workforce programs and/or any 
information the State may submit.
    (2) The review will include consultation with VETS and ETA field 
staff about findings from their on-site reviews and desk audits of State 
agency implementation of policies and procedures for services to 
veterans and also may include consultation with staff affiliated with 
other agencies of the Department, as appropriate.
    (c) Requirement of a CAP. After review, a State whose program year 
EER is determined not to be deficient will be notified that a CAP will 
not be required; a State whose program year EER is determined to be 
deficient will be required to submit a CAP to improve the State's 
performance in assisting veterans to meet their employment needs as a 
condition of receiving its next-due JVSG.
    (1) Any State whose program year EER has been determined to be 
deficient will be notified by March 31 of the year following the 
calendar year in which the program year under review ended.
    (2) For any State that is required to submit a CAP, VETS will 
provide technical assistance (TA), with input from ETA, on the 
development of the CAP. The CAP must be submitted to the Grant Officer's 
Technical Representative by June 30 of the year following the calendar 
year in which the program year under review ended.
    (3) We will review the CAP submitted by the State and determine, 
with input from ETA, whether to approve it or to provide additional TA 
to the State.
    (i) If we approve the CAP, the State must expeditiously implement 
it.
    (ii) If we do not approve the CAP, we will take such steps as are 
necessary to implement corrective actions to improve the State's EER for 
veterans and eligible persons.
    (4) If a State fails to take the actions we impose under paragraph 
(c)(3)(ii) of this section, the Assistant Secretary for Veterans' 
Employment and Training may take any actions available to remedy non-
compliance under 20 CFR

[[Page 438]]

1001.130(a) (referring to the compliance measures discussed in 20 CFR 
part 658, subpart H).



Sec.1001.167  In addition to the procedures specified in this part, will the 

Department be conducting any other monitoring of compliance regarding services 

to veterans?

    Yes. We will continue to monitor compliance with the regulations on 
veterans' priority of service at 20 CFR 1010.240(b) jointly with the 
ETA. If a State's program year EER is determined to be deficient for a 
given program year, that deficiency would constitute information to be 
considered in monitoring priority of service, since failure to fully 
implement priority of service could be one of the contributors to a 
deficient program year EER.



PART 1002_REGULATIONS UNDER THE UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT 

RIGHTS ACT OF 1994--Table of Contents



 Subpart A_Introduction to the Regulations Under the Uniformed Services 
             Employment and Reemployment Rights Act of 1994

                           General Provisions

Sec.
1002.1 What is the purpose of this part?
1002.2 Is USERRA a new law?
1002.3 When did USERRA become effective?
1002.4 What is the role of the Secretary of Labor under USERRA?
1002.5 What definitions apply to USERRA?
1002.6 What types of service in the uniformed services are covered by 
          USERRA?
1002.7 How does USERRA relate to other laws, public and private 
          contracts, and employer practices?

           Subpart B_Anti-Discrimination and Anti-Retaliation

         Protection From Employer Discrimination and Retaliation

1002.18 What status or activity is protected from employer 
          discrimination by USERRA?
1002.19 What activity is protected from employer retaliation by USERRA?
1002.20 Does USERRA protect an individual who does not actually perform 
          service in the uniformed services?
1002.21 Do the Act's prohibitions against discrimination and retaliation 
          apply to all employment positions?
1002.22 Who has the burden of proving discrimination or retaliation in 
          violation of USERRA?
1002.23 What must the individual show to carry the burden of proving 
          that the employer discriminated or retaliated against him or 
          her?

                 Subpart C_Eligibility for Reemployment

            General Eligibility Requirements for Reemployment

1002.32 What criteria must the employee meet to be eligible under USERRA 
          for reemployment after service in the uniformed services?
1002.33 Does the employee have to prove that the employer discriminated 
          against him or her in order to be eligible for reemployment?

                   Coverage of Employers and Positions

1002.34 Which employers are covered by USERRA?
1002.35 Is a successor in interest an employer covered by USERRA?
1002.36 Can an employer be liable as a successor in interest if it was 
          unaware that an employee may claim reemployment rights when 
          the employer acquired the business?
1002.37 Can one employee be employed in one job by more than one 
          employer?
1002.38 Can a hiring hall be an employer?
1002.39 Are States (and their political subdivisions), the District of 
          Columbia, the Commonwealth of Puerto Rico, and United States 
          territories, considered employers?
1002.40 Does USERRA protect against discrimination in initial hiring 
          decisions?
1002.41 Does an employee have rights under USERRA even though he or she 
          holds a temporary, part-time, probationary, or seasonal 
          employment position?
1002.42 What rights does an employee have under USERRA if he or she is 
          on layoff, on strike, or on a leave of absence?
1002.43 Does an individual have rights under USERRA even if he or she is 
          an executive, managerial, or professional employee?
1002.44 Does USERRA cover an independent contractor?

              Coverage of Service in the Uniformed Services

1002.54 Are all military fitness examinations considered ``service in 
          the uniformed services?''
1002.55 Is all funeral honors duty considered ``service in the uniformed 
          services?''
1002.56 What types of service in the National Disaster Medical System 
          are considered ``service in the uniformed services?''

[[Page 439]]

1002.57 Is all service as a member of the National Guard considered 
          ``service in the uniformed services?''
1002.58 Is service in the commissioned corps of the Public Health 
          Service considered ``service in the uniformed services?''
1002.59 Are there any circumstances in which special categories of 
          persons are considered to perform ``service in the uniformed 
          services?''
1002.60 Does USERRA cover an individual attending a military service 
          academy?
1002.61 Does USERRA cover a member of the Reserve Officers Training 
          Corps?
1002.62 Does USERRA cover a member of the Commissioned Corps of the 
          National Oceanic and Atmospheric Administration, the Civil Air 
          Patrol, or the Coast Guard Auxiliary?

Absence From a Position of Employment Necessitated by Reason of Service 
                        in the Uniformed Services

1002.73 Does service in the uniformed services have to be an employee's 
          sole reason for leaving an employment position in order to 
          have USERRA reemployment rights?
1002.74 Must the employee begin service in the uniformed services 
          immediately after leaving his or her employment position in 
          order to have USERRA reemployment rights?

                          Requirement of Notice

1002.85 Must the employee give advance notice to the employer of his or 
          her service in the uniformed services?
1002.86 When is the employee excused from giving advance notice of 
          service in the uniformed services?
1002.87 Is the employee required to get permission from his or her 
          employer before leaving to perform service in the uniformed 
          services?
1002.88 Is the employee required to tell his or her civilian employer 
          that he or she intends to seek reemployment after completing 
          uniformed service before the employee leaves to perform 
          service in the uniformed services?

                            Period of Service

1002.99 Is there a limit on the total amount of service in the uniformed 
          services that an employee may perform and still retain 
          reemployment rights with the employer?
1002.100 Does the five-year service limit include all absences from an 
          employment position that are related to service in the 
          uniformed services?
1002.101 Does the five-year service limit include periods of service 
          that the employee performed when he or she worked for a 
          previous employer?
1002.102 Does the five-year service limit include periods of service 
          that the employee performed before USERRA was enacted?
1002.103 Are there any types of service in the uniformed services that 
          an employee can perform that do not count against USERRA's 
          five-year service limit?
1002.104 Is the employee required to accommodate his or her employer's 
          needs as to the timing, frequency or duration of service?

                      Application for Reemployment

1002.115 Is the employee required to report to or submit a timely 
          application for reemployment to his or her pre-service 
          employer upon completing the period of service in the 
          uniformed services?
1002.116 Is the time period for reporting back to an employer extended 
          if the employee is hospitalized for, or convalescing from, an 
          illness or injury incurred in, or aggravated during, the 
          performance of service?
1002.117 Are there any consequences if the employee fails to report for 
          or submit a timely application for reemployment?
1002.118 Is an application for reemployment required to be in any 
          particular form?
1002.119 To whom must the employee submit the application for 
          reemployment?
1002.120 If the employee seeks or obtains employment with an employer 
          other than the pre-service employer before the end of the 
          period within which a reemployment application must be filed, 
          will that jeopardize reemployment rights with the pre-service 
          employer?
1002.121 Is the employee required to submit documentation to the 
          employer in connection with the application for reemployment?
1002.122 Is the employer required to reemploy the employee if 
          documentation establishing the employee's eligibility does not 
          exist or is not readily available?
1002.123 What documents satisfy the requirement that the employee 
          establish eligibility for reemployment after a period of 
          service of more than thirty days?

                          Character of Service

1002.134 What type of discharge or separation from service is required 
          for an employee to be entitled to reemployment under USERRA?
1002.135 What types of discharge or separation from uniformed service 
          will make the employee ineligible for reemployment under 
          USERRA?
1002.136 Who determines the characterization of service?

[[Page 440]]

1002.137 If the employee receives a disqualifying discharge or release 
          from uniformed service and it is later upgraded, will 
          reemployment rights be restored?
1002.138 If the employee receives a retroactive upgrade in the 
          characterization of service, will that entitle him or her to 
          claim back wages and benefits lost as of the date of 
          separation from service?

                       Employer Statutory Defenses

1002.139 Are there any circumstances in which the pre-service employer 
          is excused from its obligation to reemploy the employee 
          following a period of uniformed service? What statutory 
          defenses are available to the employer in an action or 
          proceeding for reemployment benefits?

   Subpart D_Rights, Benefits, and Obligations of Persons Absent from 
           Employment Due to Service in the Uniformed Services

                      Furlough and Leave of Absence

1002.149 What is the employee's status with his or her civilian employer 
          while performing service in the uniformed services?
1002.150 Which non-seniority rights and benefits is the employee 
          entitled to during a period of service?
1002.151 If the employer provides full or partial pay to the employee 
          while he or she is on military leave, is the employer required 
          to also provide the non-seniority rights and benefits 
          ordinarily granted to similarly situated employees on furlough 
          or leave of absence?
1002.152 If employment is interrupted by a period of service in the 
          uniformed services, are there any circumstances under which 
          the employee is not entitled to the non-seniority rights and 
          benefits ordinarily granted to similarly situated employees on 
          furlough or leave of absence?
1002.153 If employment is interrupted by a period of service in the 
          uniformed services, is the employee permitted upon request to 
          use accrued vacation, annual or similar leave with pay during 
          the service? Can the employer require the employee to use 
          accrued leave during a period of service?

                          Health Plan Coverage

1002.163 What types of health plans are covered by USERRA?
1002.164 What health plan coverage must the employer provide for the 
          employee under USERRA?
1002.165 How does the employee elect continuing health plan coverage?
1002.166 How much must the employee pay in order to continue health plan 
          coverage?
1002.167 What actions may a plan administrator take if the employee does 
          not elect or pay for continuing coverage in a timely manner?
1002.168 If the employee's coverage was terminated at the beginning of 
          or during service, does his or her coverage have to be 
          reinstated upon reemployment?
1002.169 Can the employee elect to delay reinstatement of health plan 
          coverage until a date after the date he or she is reemployed?
1002.170 In a multiemployer health plan, how is liability allocated for 
          employer contributions and benefits arising under USERRA's 
          health plan provisions?
1002.171 How does the continuation of health plan benefits apply to a 
          multiemployer plan that provides health plan coverage through 
          a health benefits account system?

               Subpart E_Reemployment Rights and Benefits

                           Prompt Reemployment

1002.180 When is an employee entitled to be reemployed by his or her 
          civilian employer?
1002.181 How is ``prompt reemployment'' defined?

                          Reemployment Position

1002.191 What position is the employee entitled to upon reemployment?
1002.192 How is the specific reemployment position determined?
1002.193 Does the reemployment position include elements such as 
          seniority, status, and rate of pay?
1002.194 Can the application of the escalator principle result in 
          adverse consequences when the employee is reemployed?
1002.195 What other factors can determine the reemployment position?
1002.196 What is the employee's reemployment position if the period of 
          service was less than 91 days?
1002.197 What is the reemployment position if the employee's period of 
          service in the uniformed services was more than 90 days?
1002.198 What efforts must the employer make to help the employee become 
          qualified for the reemployment position?
1002.199 What priority must the employer follow if two or more returning 
          employees are entitled to reemployment in the same position?

                      Seniority Rights and Benefits

1002.210 What seniority rights does an employee have when reemployed 
          following a period of uniformed service?
1002.211 Does USERRA require the employer to use a seniority system?

[[Page 441]]

1002.212 How does a person know whether a particular right or benefit is 
          a seniority-based right or benefit?
1002.213 How can the employee demonstrate a reasonable certainty that he 
          or she would have received the seniority right or benefit if 
          he or she had remained continuously employed during the period 
          of service?

                           Disabled Employees

1002.225 Is the employee entitled to any specific reemployment benefits 
          if he or she has a disability that was incurred in, or 
          aggravated during, the period of service?
1002.226 If the employee has a disability that was incurred in, or 
          aggravated during, the period of service, what efforts must 
          the employer make to help him or her become qualified for the 
          reemployment position?

                               Rate of Pay

1002.236 How is the employee's rate of pay determined when he or she 
          returns from a period of service?

                      Protection Against Discharge

1002.247 Does USERRA provide the employee with protection against 
          discharge?
1002.248 What constitutes cause for discharge under USERRA?

                          Pension Plan Benefits

1002.259 How does USERRA protect an employee's pension benefits?
1002.260 What pension benefit plans are covered under USERRA?
1002.261 Who is responsible for funding any plan obligation to provide 
          the employee with pension benefits?
1002.262 When is the employer required to make the plan contribution 
          that is attributable to the employee's period of uniformed 
          service?
1002.263 Does the employee pay interest when he or she makes up missed 
          contributions or elective deferrals?
1002.264 Is the employee allowed to repay a previous distribution from a 
          pension benefits plan upon being reemployed?
1002.265 If the employee is reemployed with his or her pre-service 
          employer, is the employee's pension benefit the same as if he 
          or she had remained continuously employed?
1002.266 What are the obligations of a multiemployer pension benefit 
          plan under USERRA?
1002.267 How is compensation during the period of service calculated in 
          order to determine the employee's pension benefits, if 
          benefits are based on compensation?

        Subpart F_Compliance Assistance, Enforcement and Remedies

                          Compliance Assistance

1002.277 What assistance does the Department of Labor provide to 
          employees and employers concerning employment, reemployment, 
          or other rights and benefits under USERRA?

                       Investigation and Referral

1002.288 How does an individual file a USERRA complaint?
1002.289 How will VETS investigate a USERRA complaint?
1002.290 Does VETS have the authority to order compliance with USERRA?
1002.291 What actions may an individual take if the complaint is not 
          resolved by VETS?
1002.292 What can the Attorney General do about the complaint?

 Enforcement of Rights and Benefits Against a State or Private Employer

1002.303 Is an individual required to file his or her complaint with 
          VETS?
1002.304 If an individual files a complaint with VETS and VETS' efforts 
          do not resolve the complaint, can the individual pursue the 
          claim on his or her own?
1002.305 What court has jurisdiction in an action against a State or 
          private employer?
1002.306 Is a National Guard civilian technician considered a State or 
          Federal employee for purposes of USERRA?
1002.307 What is the proper venue in an action against a State or 
          private employer?
1002.308 Who has legal standing to bring an action under USERRA?
1002.309 Who is a necessary party in an action under USERRA?
1002.310 How are fees and court costs charged or taxed in an action 
          under USERRA?
1002.311 Is there a statute of limitations in an action under USERRA?
1002.312 What remedies may be awarded for a violation of USERRA?
1002.313 Are there special damages provisions that apply to actions 
          initiated in the name of the United States?
1002.314 May a court use its equity powers in an action or proceeding 
          under the Act?

Appendix to Part 1002--Notice of Your Rights Under USERRA

    Authority: Section 4331(a) of the Uniformed Services Employment and 
Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. 4331(a) (Pub. L. 
103-353, 108 Stat. 3150).

    Source: 70 FR 75292, Dec. 19, 2005, unless otherwise noted.

[[Page 442]]



 Subpart A_Introduction to the Regulations Under the Uniformed Services 

             Employment and Reemployment Rights Act of 1994

                           General Provisions



Sec.1002.1  What is the purpose of this part?

    This part implements the Uniformed Services Employment and 
Reemployment Rights Act of 1994 (``USERRA'' or ``the Act''). 38 U.S.C. 
4301-4334. USERRA is a law that establishes certain rights and benefits 
for employees, and duties for employers. USERRA affects employment, 
reemployment, and retention in employment, when employees serve or have 
served in the uniformed services. There are five subparts to these 
regulations. Subpart A gives an introduction to the USERRA regulations. 
Subpart B describes USERRA's anti-discrimination and anti-retaliation 
provisions. Subpart C explains the steps that must be taken by a 
uniformed service member who wants to return to his or her previous 
civilian employment. Subpart D describes the rights, benefits, and 
obligations of persons absent from employment due to service in the 
uniformed services, including rights and obligations related to health 
plan coverage. Subpart E describes the rights, benefits, and obligations 
of the returning veteran or service member. Subpart F explains the role 
of the Department of Labor in enforcing and giving assistance under 
USERRA. These regulations implement USERRA as it applies to States, 
local governments, and private employers. Separate regulations published 
by the Federal Office of Personnel Management implement USERRA for 
Federal executive agency employers and employees.



Sec.1002.2  Is USERRA a new law?

    USERRA is the latest in a series of laws protecting veterans' 
employment and reemployment rights going back to the Selective Training 
and Service Act of 1940. USERRA's immediate predecessor was commonly 
referred to as the Veterans' Reemployment Rights Act (VRRA), which was 
enacted as section 404 of the Vietnam Era Veterans' Readjustment 
Assistance Act of 1974. In enacting USERRA, Congress emphasized USERRA's 
continuity with the VRRA and its intention to clarify and strengthen 
that law. Congress also emphasized that Federal laws protecting 
veterans' employment and reemployment rights for the past fifty years 
had been successful and that the large body of case law that had 
developed under those statutes remained in full force and effect, to the 
extent it is consistent with USERRA. USERRA authorized the Department of 
Labor to publish regulations implementing the Act for State, local 
government, and private employers. USERRA also authorized the Office of 
Personnel Management to issue regulations implementing the Act for 
Federal executive agencies (other than some Federal intelligence 
agencies). USERRA established a separate program for employees of some 
Federal intelligence agencies.



Sec.1002.3  When did USERRA become effective?

    USERRA became law on October 13, 1994. USERRA's reemployment 
provisions apply to members of the uniformed services seeking civilian 
reemployment on or after December 12, 1994. USERRA's anti-discrimination 
and anti-retaliation provisions became effective on October 13, 1994.



Sec.1002.4  What is the role of the Secretary of Labor under USERRA?

    (a) USERRA charges the Secretary of Labor (through the Veterans' 
Employment and Training Service) with providing assistance to any person 
with respect to the employment and reemployment rights and benefits to 
which such person is entitled under the Act. More information about the 
Secretary's role in providing this assistance is contained in Subpart F.
    (b) USERRA also authorizes the Secretary of Labor to issue 
regulations implementing the Act with respect to States, local 
governments, and private employers. These regulations are issued under 
this authority.
    (c) The Secretary of Labor delegated authority to the Assistant 
Secretary

[[Page 443]]

for Veterans' Employment and Training for administering the veterans' 
reemployment rights program by Secretary's Order 1-83 (February 3, 1983) 
and for carrying out the functions and authority vested in the Secretary 
pursuant to USERRA by memorandum of April 22, 2002 (67 FR 31827).



Sec.1002.5  What definitions apply to USERRA?

    (a) Attorney General means the Attorney General of the United States 
or any person designated by the Attorney General to carry out a 
responsibility of the Attorney General under USERRA.
    (b) Benefit, benefit of employment, or rights and benefits means any 
advantage, profit, privilege, gain, status, account, or interest (other 
than wages or salary for work performed) that accrues to the employee 
because of an employment contract, employment agreement, or employer 
policy, plan, or practice. The term includes rights and benefits under a 
pension plan, health plan, or employee stock ownership plan, insurance 
coverage and awards, bonuses, severance pay, supplemental unemployment 
benefits, vacations, and the opportunity to select work hours or the 
location of employment.
    (c) Employee means any person employed by an employer. The term also 
includes any person who is a citizen, national or permanent resident 
alien of the United States who is employed in a workplace in a foreign 
country by an employer that is an entity incorporated or organized in 
the United States, or that is controlled by an entity organized in the 
United States. ``Employee'' includes the former employees of an 
employer.
    (d)(1) Employer, except as provided in paragraphs (d)(2) and (3) of 
this section, means any person, institution, organization, or other 
entity that pays salary or wages for work performed, or that has control 
over employment opportunities, including--
    (i) A person, institution, organization, or other entity to whom the 
employer has delegated the performance of employment-related 
responsibilities, except in the case that such entity has been delegated 
functions that are purely ministerial in nature, such as maintenance of 
personnel files or the preparation of forms for submission to a 
government agency;
    (ii) The Federal Government;
    (iii) A State;
    (iv) Any successor in interest to a person, institution, 
organization, or other entity referred to in this definition; and,
    (v) A person, institution, organization, or other entity that has 
denied initial employment in violation of 38 U.S.C. 4311, USERRA's anti-
discrimination and anti-retaliation provisions.
    (2) In the case of a National Guard technician employed under 32 
U.S.C. 709, the term ``employer'' means the adjutant general of the 
State in which the technician is employed.
    (3) An employee pension benefit plan as described in section 3(2) of 
the Employee Retirement Income Security Act of 1974 (ERISA)(29 U.S.C. 
1002(2)) is considered an employer for an individual that it does not 
actually employ only with respect to the obligation to provide pension 
benefits.
    (e) Health plan means an insurance policy, insurance contract, 
medical or hospital service agreement, membership or subscription 
contract, or other arrangement under which health services for 
individuals are provided or the expenses of such services are paid.
    (f) National Disaster Medical System (NDMS) is an agency within the 
Federal Emergency Management Agency, Department of Homeland Security, 
established by the Public Health Security and Bioterrorism Preparedness 
and Response Act of 2002, Public Law 107-188. The NDMS provides medical-
related assistance to respond to the needs of victims of public health 
emergencies. Participants in the NDMS are volunteers who serve as 
intermittent Federal employees when activated. For purposes of USERRA 
coverage only, these persons are treated as members of the uniformed 
services when they are activated to provide assistance in response to a 
public health emergency or to be present for a short period of time when 
there is a risk of a public health emergency, or when they are 
participating in authorized training. See 42 U.S.C. 300hh-11(e).

[[Page 444]]

    (g) Notice, when the employee is required to give advance notice of 
service, means any written or verbal notification of an obligation or 
intention to perform service in the uniformed services provided to an 
employer by the employee who will perform such service, or by the 
uniformed service in which the service is to be performed.
    (h) Qualified, with respect to an employment position, means having 
the ability to perform the essential tasks of the position.
    (i) Reasonable efforts, in the case of actions required of an 
employer, means actions, including training provided by an employer that 
do not place an undue hardship on the employer.
    (j) Secretary means the Secretary of Labor or any person designated 
by the Secretary of Labor to carry out an activity under USERRA and 
these regulations, unless a different office is expressly indicated in 
the regulation.
    (k) Seniority means longevity in employment together with any 
benefits of employment that accrue with, or are determined by, longevity 
in employment.
    (l) Service in the uniformed services means the performance of duty 
on a voluntary or involuntary basis in a uniformed service under 
competent authority. Service in the uniformed services includes active 
duty, active and inactive duty for training, National Guard duty under 
Federal statute, and a period for which a person is absent from a 
position of employment for an examination to determine the fitness of 
the person to perform such duty. The term also includes a period for 
which a person is absent from employment to perform funeral honors duty 
as authorized by law (10 U.S.C. 12503 or 32 U.S.C. 115). The Public 
Health Security and Bioterrorism Preparedness and Response Act of 2002, 
Pub. L. 107-188, provides that service as an intermittent disaster-
response appointee upon activation of the National Disaster Medical 
System (NDMS) or as a participant in an authorized training program is 
deemed ``service in the uniformed services.'' 42 U.S.C. 300hh-11(e)(3).
    (m) State means each of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin 
Islands, and other territories of the United States (including the 
agencies and political subdivisions thereof); however, for purposes of 
enforcement of rights under 38 U.S.C. 4323, a political subdivision of a 
State is a private employer.
    (n) Undue hardship, in the case of actions taken by an employer, 
means an action requiring significant difficulty or expense, when 
considered in light of--
    (1) The nature and cost of the action needed under USERRA and these 
regulations;
    (2) The overall financial resources of the facility or facilities 
involved in the provision of the action; the number of persons employed 
at such facility; the effect on expenses and resources, or the impact 
otherwise of such action upon the operation of the facility;
    (3) The overall financial resources of the employer; the overall 
size of the business of an employer with respect to the number of its 
employees; the number, type, and location of its facilities; and,
    (4) The type of operation or operations of the employer, including 
the composition, structure, and functions of the work force of such 
employer; the geographic separateness, administrative, or fiscal 
relationship of the facility or facilities in question to the employer.
    (o) Uniformed services means the Armed Forces; the Army National 
Guard and the Air National Guard when engaged in active duty for 
training, inactive duty training, or full-time National Guard duty; the 
commissioned corps of the Public Health Service; and any other category 
of persons designated by the President in time of war or national 
emergency. For purposes of USERRA coverage only, service as an 
intermittent disaster response appointee of the NDMS when federally 
activated or attending authorized training in support of their Federal 
mission is deemed ``service in the uniformed services,'' although such 
appointee is not a member of the ``uniformed services'' as defined by 
USERRA.

[[Page 445]]



Sec.1002.6  What types of service in the uniformed services are covered by 

USERRA?

    USERRA's definition of ``service in the uniformed services'' covers 
all categories of military training and service, including duty 
performed on a voluntary or involuntary basis, in time of peace or war. 
Although most often understood as applying to National Guard and reserve 
military personnel, USERRA also applies to persons serving in the active 
components of the Armed Forces. Certain types of service specified in 42 
U.S.C. 300hh-11 by members of the National Disaster Medical System are 
covered by USERRA.



Sec.1002.7  How does USERRA relate to other laws, public and private 

contracts, and employer practices?

    (a) USERRA establishes a floor, not a ceiling, for the employment 
and reemployment rights and benefits of those it protects. In other 
words, an employer may provide greater rights and benefits than USERRA 
requires, but no employer can refuse to provide any right or benefit 
guaranteed by USERRA.
    (b) USERRA supersedes any State law (including any local law or 
ordinance), contract, agreement, policy, plan, practice, or other matter 
that reduces, limits, or eliminates in any manner any right or benefit 
provided by USERRA, including the establishment of additional 
prerequisites to the exercise of any USERRA right or the receipt of any 
USERRA benefit. For example, an employment contract that determines 
seniority based only on actual days of work in the place of employment 
would be superseded by USERRA, which requires that seniority credit be 
given for periods of absence from work due to service in the uniformed 
services.
    (c) USERRA does not supersede, nullify or diminish any Federal or 
State law (including any local law or ordinance), contract, agreement, 
policy, plan, practice, or other matter that establishes an employment 
right or benefit that is more beneficial than, or is in addition to, a 
right or benefit provided under the Act. For example, although USERRA 
does not require an employer to pay an employee for time away from work 
performing service, an employer policy, plan, or practice that provides 
such a benefit is permissible under USERRA.
    (d) If an employer provides a benefit that exceeds USERRA's 
requirements in one area, it cannot reduce or limit other rights or 
benefits provided by USERRA. For example, even though USERRA does not 
require it, an employer may provide a fixed number of days of paid 
military leave per year to employees who are members of the National 
Guard or Reserve. The fact that it provides such a benefit, however, 
does not permit an employer to refuse to provide an unpaid leave of 
absence to an employee to perform service in the uniformed services in 
excess of the number of days of paid military leave.



           Subpart B_Anti-Discrimination and Anti-Retaliation

         Protection From Employer Discrimination and Retaliation



Sec.1002.18  What status or activity is protected from employer discrimination 

by USERRA?

    An employer must not deny initial employment, reemployment, 
retention in employment, promotion, or any benefit of employment to an 
individual on the basis of his or her membership, application for 
membership, performance of service, application for service, or 
obligation for service in the uniformed services.



Sec.1002.19  What activity is protected from employer retaliation by USERRA?

    An employer must not retaliate against an individual by taking any 
adverse employment action against him or her because the individual has 
taken an action to enforce a protection afforded any person under 
USERRA; testified or otherwise made a statement in or in connection with 
a proceeding under USERRA; assisted or participated in a USERRA 
investigation: or, exercised a right provided for by USERRA.

[[Page 446]]



Sec.1002.20  Does USERRA protect an individual who does not actually perform 

service in the uniformed services?

    Yes. Employers are prohibited from taking actions against an 
individual for any of the activities protected by the Act, whether or 
not he or she has performed service in the uniformed services.



Sec.1002.21  Do the Act's prohibitions against discrimination and retaliation 

apply to all employment positions?

    The prohibitions against discrimination and retaliation apply to all 
covered employers (including hiring halls and potential employers, see 
sections 1002.36 and .38) and employment positions, including those that 
are for a brief, nonrecurrent period, and for which there is no 
reasonable expectation that the employment position will continue 
indefinitely or for a significant period. However, USERRA's reemployment 
rights and benefits do not apply to such brief, nonrecurrent positions 
of employment.



Sec.1002.22  Who has the burden of proving discrimination or retaliation in 

violation of USERRA?

    The individual has the burden of proving that a status or activity 
protected by USERRA was one of the reasons that the employer took action 
against him or her, in order to establish that the action was 
discrimination or retaliation in violation of USERRA. If the individual 
succeeds in proving that the status or activity protected by USERRA was 
one of the reasons the employer took action against him or her, the 
employer has the burden to prove the affirmative defense that it would 
have taken the action anyway.



Sec.1002.23  What must the individual show to carry the burden of proving that 

the employer discriminated or retaliated against him or her?

    (a) In order to prove that the employer discriminated or retaliated 
against the individual, he or she must first show that the employer's 
action was motivated by one or more of the following:
    (1) Membership or application for membership in a uniformed service;
    (2) Performance of service, application for service, or obligation 
for service in a uniformed service;
    (3) Action taken to enforce a protection afforded any person under 
USERRA;
    (4) Testimony or statement made in or in connection with a USERRA 
proceeding;
    (5) Assistance or participation in a USERRA investigation; or,
    (6) Exercise of a right provided for by USERRA.
    (b) If the individual proves that the employer's action was based on 
one of the prohibited motives listed in paragraph (a) of this section, 
the employer has the burden to prove the affirmative defense that the 
action would have been taken anyway absent the USERRA-protected status 
or activity.



                 Subpart C_Eligibility For Reemployment

            General Eligibility Requirements for Reemployment



Sec.1002.32  What criteria must the employee meet to be eligible under USERRA 

for reemployment after service in the uniformed services?

    (a) In general, if the employee has been absent from a position of 
civilian employment by reason of service in the uniformed services, he 
or she will be eligible for reemployment under USERRA by meeting the 
following criteria:
    (1) The employer had advance notice of the employee's service;
    (2) The employee has five years or less of cumulative service in the 
uniformed services in his or her employment relationship with a 
particular employer;
    (3) The employee timely returns to work or applies for reemployment; 
and,
    (4) The employee has not been separated from service with a 
disqualifying discharge or under other than honorable conditions.
    (b) These general eligibility requirements have important 
qualifications and exceptions, which are described in detail in 
Sec. Sec.1002.73 through 1002.138. If the employee meets these 
eligibility criteria, then he or she is eligible for

[[Page 447]]

reemployment unless the employer establishes one of the defenses 
described in Sec.1002.139. The employment position to which the 
employee is entitled is described in Sec. Sec.1002.191 through 
1002.199.



Sec.1002.33  Does the employee have to prove that the employer discriminated 

against him or her in order to be eligible for reemployment?

    No. The employee is not required to prove that the employer 
discriminated against him or her because of the employee's uniformed 
service in order to be eligible for reemployment.

                   Coverage of Employers and Positions



Sec.1002.34  Which employers are covered by USERRA?

    (a) USERRA applies to all public and private employers in the United 
States, regardless of size. For example, an employer with only one 
employee is covered for purposes of the Act.
    (b) USERRA applies to foreign employers doing business in the United 
States. A foreign employer that has a physical location or branch in the 
United States (including U.S. territories and possessions) must comply 
with USERRA for any of its employees who are employed in the United 
States.
    (c) An American company operating either directly or through an 
entity under its control in a foreign country must also comply with 
USERRA for all its foreign operations, unless compliance would violate 
the law of the foreign country in which the workplace is located.



Sec.1002.35  Is a successor in interest an employer covered by USERRA?

    USERRA's definition of ``employer'' includes a successor in 
interest. In general, an employer is a successor in interest where there 
is a substantial continuity in operations, facilities, and workforce 
from the former employer. The determination whether an employer is a 
successor in interest must be made on a case-by-case basis using a 
multi-factor test that considers the following:
    (a) Whether there has been a substantial continuity of business 
operations from the former to the current employer;
    (b) Whether the current employer uses the same or similar 
facilities, machinery, equipment, and methods of production;
    (c) Whether there has been a substantial continuity of employees;
    (d) Whether there is a similarity of jobs and working conditions;
    (e) Whether there is a similarity of supervisors or managers; and,
    (f) Whether there is a similarity of products or services.



Sec.1002.36  Can an employer be liable as a successor in interest if it was 

unaware that an employee may claim reemployment rights when the employer 

acquired the business?

    Yes. In order to be a successor in interest, it is not necessary for 
an employer to have notice of a potential reemployment claim at the time 
of merger, acquisition, or other form of succession.



Sec.1002.37  Can one employee be employed in one job by more than one 

employer?

    Yes. Under USERRA, an employer includes not only the person or 
entity that pays an employee's salary or wages, but also includes a 
person or entity that has control over his or her employment 
opportunities, including a person or entity to whom an employer has 
delegated the performance of employment-related responsibilities. For 
example, if the employee is a security guard hired by a security company 
and he or she is assigned to a work site, the employee may report both 
to the security company and to the site owner. In such an instance, both 
employers share responsibility for compliance with USERRA. If the 
security company declines to assign the employee to a job because of a 
uniformed service obligation (for example, National Guard duties), then 
the security company could be in violation of the reemployment 
requirements and the anti-discrimination provisions of USERRA. 
Similarly, if the employer at the work site causes the employee's 
removal from the job position because of his or her uniformed service 
obligations, then the work site employer could be in violation of the 
reemployment requirements and the anti-discrimination provisions of 
USERRA.

[[Page 448]]



Sec.1002.38  Can a hiring hall be an employer?

    Yes. In certain occupations (for example, longshoreman, stagehand, 
construction worker), the employee may frequently work for many 
different employers. A hiring hall operated by a union or an employer 
association typically assigns the employee to the jobs. In these 
industries, it may not be unusual for the employee to work his or her 
entire career in a series of short-term job assignments. The definition 
of ``employer'' includes a person, institution, organization, or other 
entity to which the employer has delegated the performance of 
employment-related responsibilities. A hiring hall therefore is 
considered the employee's employer if the hiring and job assignment 
functions have been delegated by an employer to the hiring hall. As the 
employer, a hiring hall has reemployment responsibilities to its 
employees. USERRA's anti-discrimination and anti-retaliation provisions 
also apply to the hiring hall.



Sec.1002.39  Are States (and their political subdivisions), the District of 

Columbia, the Commonwealth of Puerto Rico, and United States territories, 

considered employers?

    Yes. States and their political subdivisions, such as counties, 
parishes, cities, towns, villages, and school districts, are considered 
employers under USERRA. The District of Columbia, the Commonwealth of 
Puerto Rico, Guam, the Virgin Islands, and territories of the United 
States, are also considered employers under the Act.



Sec.1002.40  Does USERRA protect against discrimination in initial hiring 

decisions?

    Yes. The Act's definition of employer includes a person, 
institution, organization, or other entity that has denied initial 
employment to an individual in violation of USERRA's anti-discrimination 
provisions. An employer need not actually employ an individual to be his 
or her ``employer'' under the Act, if it has denied initial employment 
on the basis of the individual's membership, application for membership, 
performance of service, application for service, or obligation for 
service in the uniformed services. Similarly, the employer would be 
liable if it denied initial employment on the basis of the individual's 
action taken to enforce a protection afforded to any person under 
USERRA, his or her testimony or statement in connection with any USERRA 
proceeding, assistance or other participation in a USERRA investigation, 
or the exercise of any other right provided by the Act. For example, if 
the individual has been denied initial employment because of his or her 
obligations as a member of the National Guard or Reserves, the company 
or entity denying employment is an employer for purposes of USERRA. 
Similarly, if an entity withdraws an offer of employment because the 
individual is called upon to fulfill an obligation in the uniformed 
services, the entity withdrawing the employment offer is an employer for 
purposes of USERRA.



Sec.1002.41  Does an employee have rights under USERRA even though he or she 

holds a temporary, part-time, probationary, or seasonal employment position?

    USERRA rights are not diminished because an employee holds a 
temporary, part-time, probationary, or seasonal employment position. 
However, an employer is not required to reemploy an employee if the 
employment he or she left to serve in the uniformed services was for a 
brief, nonrecurrent period and there is no reasonable expectation that 
the employment would have continued indefinitely or for a significant 
period. The employer bears the burden of proving this affirmative 
defense.



Sec.1002.42  What rights does an employee have under USERRA if he or she is on 

layoff, on strike, or on a leave of absence?

    (a) If an employee is laid off with recall rights, on strike, or on 
a leave of absence, he or she is an employee for purposes of USERRA. If 
the employee is on layoff and begins service in the uniformed services, 
or is laid off while performing service, he or she may be entitled to 
reemployment on return if the employer would have recalled the employee 
to employment during the period of service. Similar principles

[[Page 449]]

apply if the employee is on strike or on a leave of absence from work 
when he or she begins a period of service in the uniformed services.
    (b) If the employee is sent a recall notice during a period of 
service in the uniformed services and cannot resume the position of 
employment because of the service, he or she still remains an employee 
for purposes of the Act. Therefore, if the employee is otherwise 
eligible, he or she is entitled to reemployment following the conclusion 
of the period of service even if he or she did not respond to the recall 
notice.
    (c) If the employee is laid off before or during service in the 
uniformed services, and the employer would not have recalled him or her 
during that period of service, the employee is not entitled to 
reemployment following the period of service simply because he or she is 
a covered employee. Reemployment rights under USERRA cannot put the 
employee in a better position than if he or she had remained in the 
civilian employment position.



Sec.1002.43  Does an individual have rights under USERRA even if he or she is 

an executive, managerial, or professional employee?

    Yes. USERRA applies to all employees. There is no exclusion for 
executive, managerial, or professional employees.



Sec.1002.44  Does USERRA cover an independent contractor?

    (a) No. USERRA does not provide protections for an independent 
contractor.
    (b) In deciding whether an individual is an independent contractor, 
the following factors need to be considered:
    (1) The extent of the employer's right to control the manner in 
which the individual's work is to be performed;
    (2) The opportunity for profit or loss that depends upon the 
individual's managerial skill;
    (3) Any investment in equipment or materials required for the 
individual's tasks, or his or her employment of helpers;
    (4) Whether the service the individual performs requires a special 
skill;
    (5) The degree of permanence of the individual's working 
relationship; and,
    (6) Whether the service the individual performs is an integral part 
of the employer's business.
    (c) No single one of these factors is controlling, but all are 
relevant to determining whether an individual is an employee or an 
independent contractor.

              Coverage of Service in the Uniformed Services



Sec.1002.54  Are all military fitness examinations considered ``service in the 

uniformed services?''

    Yes. USERRA's definition of ``service in the uniformed services'' 
includes a period for which an employee is absent from a position of 
employment for the purpose of an examination to determine his or her 
fitness to perform duty in the uniformed services. Military fitness 
examinations can address more than physical or medical fitness, and 
include evaluations for mental, educational, and other types of fitness. 
Any examination to determine an employee's fitness for service is 
covered, whether it is an initial or recurring examination. For example, 
a periodic medical examination required of a Reserve component member to 
determine fitness for continued service is covered.



Sec.1002.55  Is all funeral honors duty considered ``service in the uniformed 

services?''

    (a) USERRA's definition of ``service in the uniformed services'' 
includes a period for which an employee is absent from employment for 
the purpose of performing authorized funeral honors duty under 10 U.S.C. 
12503 (members of Reserve ordered to perform funeral honors duty) or 32 
U.S.C. 115 (Member of Air or Army National Guard ordered to perform 
funeral honors duty).
    (b) Funeral honors duty performed by persons who are not members of 
the uniformed services, such as members of veterans' service 
organizations, is not ``service in the uniformed services.''



Sec.1002.56  What types of service in the National Disaster Medical System are 

considered ``service in the uniformed services?''

    Under a provision of the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002, 42

[[Page 450]]

U.S.C. 300hh 11(e)(3), ``service in the uniformed services'' includes 
service performed as an intermittent disaster-response appointee upon 
activation of the National Disaster Medical System or participation in 
an authorized training program, even if the individual is not a member 
of the uniformed services.



Sec.1002.57  Is all service as a member of the National Guard considered 

``service in the uniformed services?''

    The National Guard has a dual status. It is a Reserve component of 
the Army, or, in the case of the Air National Guard, of the Air Force. 
Simultaneously, it is a State military force subject to call-up by the 
State Governor for duty not subject to Federal control, such as 
emergency duty in cases of floods or riots. National Guard members may 
perform service under either Federal or State authority, but only 
Federal National Guard service is covered by USERRA.
    (a) National Guard service under Federal authority is protected by 
USERRA. Service under Federal authority includes active duty performed 
under Title 10 of the United States Code. Service under Federal 
authority also includes duty under Title 32 of the United States Code, 
such as active duty for training, inactive duty training, or full-time 
National Guard duty.
    (b) National Guard service under authority of State law is not 
protected by USERRA. However, many States have laws protecting the 
civilian job rights of National Guard members who serve under State 
orders. Enforcement of those State laws is not covered by USERRA or 
these regulations.



Sec.1002.58  Is service in the commissioned corps of the Public Health Service 

considered ``service in the uniformed services?''

    Yes. Service in the commissioned corps of the Public Health Service 
(PHS) is ``service in the uniformed services'' under USERRA.



Sec.1002.59  Are there any circumstances in which special categories of 

persons are considered to perform ``service in the uniformed services?''

    Yes. In time of war or national emergency the President has 
authority to designate any category of persons as a ``uniformed 
service'' for purposes of USERRA. If the President exercises this 
authority, service as a member of that category of persons would be 
``service in the uniformed services'' under USERRA.



Sec.1002.60  Does USERRA cover an individual attending a military service 

academy?

    Yes. Attending a military service academy is considered uniformed 
service for purposes of USERRA. There are four service academies: The 
United States Military Academy (West Point, New York), the United States 
Naval Academy (Annapolis, Maryland), the United States Air Force Academy 
(Colorado Springs, Colorado), and the United States Coast Guard Academy 
(New London, Connecticut).



Sec.1002.61  Does USERRA cover a member of the Reserve Officers Training 

Corps?

    Yes, under certain conditions.
    (a) Membership in the Reserve Officers Training Corps (ROTC) or the 
Junior ROTC is not ``service in the uniformed services.'' However, some 
Reserve and National Guard enlisted members use a college ROTC program 
as a means of qualifying for commissioned officer status. National Guard 
and Reserve members in an ROTC program may at times, while participating 
in that program, be receiving active duty and inactive duty training 
service credit with their unit. In these cases, participating in ROTC 
training sessions is considered ``service in the uniformed services,'' 
and qualifies a person for protection under USERRA's reemployment and 
anti-discrimination provisions.
    (b) Typically, an individual in a College ROTC program enters into 
an agreement with a particular military service that obligates such 
individual to either complete the ROTC program and accept a commission 
or, in case he or she does not successfully complete the ROTC program, 
to serve as an enlisted member. Although an individual does not qualify 
for reemployment protection, except as specified in (a) above, he or she 
is protected under

[[Page 451]]

USERRA's anti-discrimination provisions because, as a result of the 
agreement, he or she has applied to become a member of the uniformed 
services and has incurred an obligation to perform future service.



Sec.1002.62  Does USERRA cover a member of the Commissioned Corps of the 

National Oceanic and Atmospheric Administration, the Civil Air Patrol, or the 

Coast Guard Auxiliary?

    No. Although the Commissioned Corps of the National Oceanic and 
Atmospheric Administration (NOAA) is a ``uniformed service'' for some 
purposes, it is not included in USERRA's definition of this term. 
Service in the Civil Air Patrol and the Coast Guard Auxiliary similarly 
is not considered ``service in the uniformed services'' for purposes of 
USERRA. Consequently, service performed in the Commissioned Corps of the 
National Oceanic and Atmospheric Administration (NOAA), the Civil Air 
Patrol, and the Coast Guard Auxiliary is not protected by USERRA.

Absence From a Position of Employment Necessitated by Reason of Service 
                        in the Uniformed Services



Sec.1002.73  Does service in the uniformed services have to be an employee's 

sole reason for leaving an employment position in order to have USERRA 

reemployment rights?

    No. If absence from a position of employment is necessitated by 
service in the uniformed services, and the employee otherwise meets the 
Act's eligibility requirements, he or she has reemployment rights under 
USERRA, even if the employee uses the absence for other purposes as 
well. An employee is not required to leave the employment position for 
the sole purpose of performing service in the uniformed services. For 
example, if the employee is required to report to an out of State 
location for military training and he or she spends off-duty time during 
that assignment moonlighting as a security guard or visiting relatives 
who live in that State, the employee will not lose reemployment rights 
simply because he or she used some of the time away from the job to do 
something other than attend the military training. Also, if an employee 
receives advance notification of a mobilization order, and leaves his or 
her employment position in order to prepare for duty, but the 
mobilization is cancelled, the employee will not lose any reemployment 
rights.



Sec.1002.74  Must the employee begin service in the uniformed services 

immediately after leaving his or her employment position in order to have 

USERRA reemployment rights?

    No. At a minimum, an employee must have enough time after leaving 
the employment position to travel safely to the uniformed service site 
and arrive fit to perform the service. Depending on the specific 
circumstances, including the duration of service, the amount of notice 
received, and the location of the service, additional time to rest, or 
to arrange affairs and report to duty, may be necessitated by reason of 
service in the uniformed services. The following examples help to 
explain the issue of the period of time between leaving civilian 
employment and beginning of service in the uniformed services:
    (a) If the employee performs a full overnight shift for the civilian 
employer and travels directly from the work site to perform a full day 
of uniformed service, the employee would not be considered fit to 
perform the uniformed service. An absence from that work shift is 
necessitated so that the employee can report for uniformed service fit 
for duty.
    (b) If the employee is ordered to perform an extended period of 
service in the uniformed services, he or she may require a reasonable 
period of time off from the civilian job to put his or her personal 
affairs in order, before beginning the service. Taking such time off is 
also necessitated by the uniformed service.
    (c) If the employee leaves a position of employment in order to 
enlist or otherwise perform service in the uniformed services and, 
through no fault of his or her own, the beginning date of the service is 
delayed, this delay does not terminate any reemployment rights.

[[Page 452]]

                          Requirement of Notice



Sec.1002.85  Must the employee give advance notice to the employer of his or 

her service in the uniformed services?

    (a) Yes. The employee, or an appropriate officer of the uniformed 
service in which his or her service is to be performed, must notify the 
employer that the employee intends to leave the employment position to 
perform service in the uniformed services, with certain exceptions 
described below. In cases in which an employee is employed by more than 
one employer, the employee, or an appropriate office of the uniformed 
service in which his or her service is to be performed, must notify each 
employer that the employee intends to leave the employment position to 
perform service in the uniformed services, with certain exceptions 
described below.
    (b) The Department of Defense USERRA regulations at 32 CFR 104.3 
provide that an ``appropriate officer'' can give notice on the 
employee's behalf. An ``appropriate officer'' is a commissioned, 
warrant, or non-commissioned officer authorized to give such notice by 
the military service concerned.
    (c) The employee's notice to the employer may be either verbal or 
written. The notice may be informal and does not need to follow any 
particular format.
    (d) Although USERRA does not specify how far in advance notice must 
be given to the employer, an employee should provide notice as far in 
advance as is reasonable under the circumstances. In regulations 
promulgated by the Department of Defense under USERRA, 32 CFR 
104.6(a)(2)(i)(B), the Defense Department ``strongly recommends that 
advance notice to civilian employers be provided at least 30 days prior 
to departure for uniformed service when it is feasible to do so.''



Sec.1002.86  When is the employee excused from giving advance notice of 

service in the uniformed services?

    The employee is required to give advance notice of pending service 
unless giving such notice is prevented by military necessity, or is 
otherwise impossible or unreasonable under all the circumstances.
    (a) Only a designated authority can make a determination of 
``military necessity,'' and such a determination is not subject to 
judicial review. Guidelines for defining ``military necessity'' appear 
in regulations issued by the Department of Defense at 32 CFR 104.3. In 
general, these regulations cover situations where a mission, operation, 
exercise or requirement is classified, or could be compromised or 
otherwise adversely affected by public knowledge. In certain cases, the 
Secretary of Homeland Security, in consultation with the Secretary of 
Defense, can make a determination that giving of notice by intermittent 
disaster-response appointees of the National Disaster Medical System is 
precluded by ``military necessity.'' See 42 U.S.C. 300hh-11(e)(3)(B).
    (b) It may be impossible or unreasonable to give advance notice 
under certain circumstances. Such circumstances may include the 
unavailability of the employee's employer or the employer's 
representative, or a requirement that the employee report for uniformed 
service in an extremely short period of time.



Sec.1002.87  Is the employee required to get permission from his or her 

employer before leaving to perform service in the uniformed services?

    No. The employee is not required to ask for or get his or her 
employer's permission to leave to perform service in the uniformed 
services. The employee is only required to give the employer notice of 
pending service.



Sec.1002.88  Is the employee required to tell his or her civilian employer 

that he or she intends to seek reemployment after completing uniformed service 

before the employee leaves to perform service in the uniformed services?

    No. When the employee leaves the employment position to begin a 
period of service, he or she is not required to tell the civilian 
employer that he or she intends to seek reemployment after completing 
uniformed service. Even if the employee tells the employer before 
entering or completing uniformed service that he or she does not intend 
to

[[Page 453]]

seek reemployment after completing the uniformed service, the employee 
does not forfeit the right to reemployment after completing service. The 
employee is not required to decide in advance of leaving the civilian 
employment position whether he or she will seek reemployment after 
completing uniformed service.

                            Period of Service



Sec.1002.99  Is there a limit on the total amount of service in the uniformed 

services that an employee may perform and still retain reemployment rights 

with the employer?

    Yes. In general, the employee may perform service in the uniformed 
services for a cumulative period of up to five (5) years and retain 
reemployment rights with the employer. The exceptions to this rule are 
described below.



Sec.1002.100  Does the five-year service limit include all absences from an 

employment position that are related to service in the uniformed services?

    No. The five-year period includes only the time the employee spends 
actually performing service in the uniformed services. A period of 
absence from employment before or after performing service in the 
uniformed services does not count against the five-year limit. For 
example, after the employee completes a period of service in the 
uniformed services, he or she is provided a certain amount of time, 
depending upon the length of service, to report back to work or submit 
an application for reemployment. The period between completing the 
uniformed service and reporting back to work or seeking reemployment 
does not count against the five-year limit.



Sec.1002.101  Does the five-year service limit include periods of service that 

the employee performed when he or she worked for a previous employer?

    No. An employee is entitled to a leave of absence for uniformed 
service for up to five years with each employer for whom he or she 
works. When the employee takes a position with a new employer, the five-
year period begins again regardless of how much service he or she 
performed while working in any previous employment relationship. If an 
employee is employed by more than one employer, a separate five-year 
period runs as to each employer independently, even if those employers 
share or co-determine the employee's terms and conditions of employment.



Sec.1002.102  Does the five-year service limit include periods of service that 

the employee performed before USERRA was enacted?

    It depends. USERRA provides reemployment rights to which an employee 
may become entitled beginning on or after December 12, 1994, but any 
uniformed service performed before December 12, 1994, that was counted 
against the service limitations of the previous law (the Veterans 
Reemployment Rights Act), also counts against USERRA's five-year limit.



Sec.1002.103  Are there any types of service in the uniformed services that an 

employee can perform that do not count against USERRA's five-year service 

limit?

    (a) USERRA creates the following exceptions to the five-year limit 
on service in the uniformed services:
    (1) Service that is required beyond five years to complete an 
initial period of obligated service. Some military specialties require 
an individual to serve more than five years because of the amount of 
time or expense involved in training. If the employee works in one of 
those specialties, he or she has reemployment rights when the initial 
period of obligated service is completed;
    (2) If the employee was unable to obtain orders releasing him or her 
from service in the uniformed services before the expiration of the 
five-year period, and the inability was not the employee's fault;
    (3)(i) Service performed to fulfill periodic National Guard and 
Reserve training requirements as prescribed by 10 U.S.C. 10147 and 32 
U.S.C. 502(a) and 503; and,
    (ii) Service performed to fulfill additional training requirements 
determined and certified by a proper military authority as necessary for 
the employee's professional development, or

[[Page 454]]

to complete skill training or retraining;
    (4) Service performed in a uniformed service if he or she was 
ordered to or retained on active duty under:
    (i) 10 U.S.C. 688 (involuntary active duty by a military retiree);
    (ii) 10 U.S.C. 12301(a) (involuntary active duty in wartime);
    (iii) 10 U.S.C. 12301(g) (retention on active duty while in captive 
status);
    (iv) 10 U.S.C. 12302 (involuntary active duty during a national 
emergency for up to 24 months);
    (v) 10 U.S.C. 12304 (involuntary active duty for an operational 
mission for up to 270 days);
    (vi) 10 U.S.C. 12305 (involuntary retention on active duty of a 
critical person during time of crisis or other specific conditions);
    (vii) 14 U.S.C. 331 (involuntary active duty by retired Coast Guard 
officer);
    (viii) 14 U.S.C. 332 (voluntary active duty by retired Coast Guard 
officer);
    (ix) 14 U.S.C. 359 (involuntary active duty by retired Coast Guard 
enlisted member);
    (x) 14 U.S.C. 360 (voluntary active duty by retired Coast Guard 
enlisted member);
    (xi) 14 U.S.C. 367 (involuntary retention of Coast Guard enlisted 
member on active duty); and
    (xii) 14 U.S.C. 712 (involuntary active duty by Coast Guard Reserve 
member for natural or man-made disasters).
    (5) Service performed in a uniformed service if the employee was 
ordered to or retained on active duty (other than for training) under 
any provision of law because of a war or national emergency declared by 
the President or the Congress, as determined by the Secretary concerned;
    (6) Service performed in a uniformed service if the employee was 
ordered to active duty (other than for training) in support of an 
operational mission for which personnel have been ordered to active duty 
under 10 U.S.C. 12304, as determined by a proper military authority;
    (7) Service performed in a uniformed service if the employee was 
ordered to active duty in support of a critical mission or requirement 
of the uniformed services as determined by the Secretary concerned; and,
    (8) Service performed as a member of the National Guard if the 
employee was called to respond to an invasion, danger of invasion, 
rebellion, danger of rebellion, insurrection, or the inability of the 
President with regular forces to execute the laws of the United States.
    (b) Service performed to mitigate economic harm where the employee's 
employer is in violation of its employment or reemployment obligations 
to him or her.



Sec.1002.104  Is the employee required to accommodate his or her employer's 

needs as to the timing, frequency or duration of service?

    No. The employee is not required to accommodate his or her 
employer's interests or concerns regarding the timing, frequency, or 
duration of uniformed service. The employer cannot refuse to reemploy 
the employee because it believes that the timing, frequency or duration 
of the service is unreasonable. However, the employer is permitted to 
bring its concerns over the timing, frequency, or duration of the 
employee's service to the attention of the appropriate military 
authority. Regulations issued by the Department of Defense at 32 CFR 
104.4 direct military authorities to provide assistance to an employer 
in addressing these types of employment issues. The military authorities 
are required to consider requests from employers of National Guard and 
Reserve members to adjust scheduled absences from civilian employment to 
perform service.

                      Application for Reemployment



Sec.1002.115  Is the employee required to report to or submit a timely 

application for reemployment to his or her pre-service employer upon 

completing the period of service in the uniformed services?

    Yes. Upon completing service in the uniformed services, the employee 
must notify the pre-service employer of his or her intent to return to 
the employment position by either reporting to work or submitting a 
timely application for reemployment. Whether the employee is required to 
report to work or submit a timely application for reemployment depends 
upon the length of service, as follows:

[[Page 455]]

    (a) Period of service less than 31 days or for a period of any 
length for the purpose of a fitness examination. If the period of 
service in the uniformed services was less than 31 days, or the employee 
was absent from a position of employment for a period of any length for 
the purpose of an examination to determine his or her fitness to perform 
service, the employee must report back to the employer not later than 
the beginning of the first full regularly-scheduled work period on the 
first full calendar day following the completion of the period of 
service, and the expiration of eight hours after a period allowing for 
safe transportation from the place of that service to the employee's 
residence. For example, if the employee completes a period of service 
and travel home, arriving at ten o'clock in the evening, he or she 
cannot be required to report to the employer until the beginning of the 
next full regularly-scheduled work period that begins at least eight 
hours after arriving home, i.e., no earlier than six o'clock the next 
morning. If it is impossible or unreasonable for the employee to report 
within such time period through no fault of his or her own, he or she 
must report to the employer as soon as possible after the expiration of 
the eight-hour period.
    (b) Period of service more than 30 days but less than 181 days. If 
the employee's period of service in the uniformed services was for more 
than 30 days but less than 181 days, he or she must submit an 
application for reemployment (written or verbal) with the employer not 
later than 14 days after completing service. If it is impossible or 
unreasonable for the employee to apply within 14 days through no fault 
of his or her own, he or she must submit the application not later than 
the next full calendar day after it becomes possible to do so.
    (c) Period of service more than 180 days. If the employee's period 
of service in the uniformed services was for more than 180 days, he or 
she must submit an application for reemployment (written or verbal) not 
later than 90 days after completing service.



Sec.1002.116  Is the time period for reporting back to an employer extended if 

the employee is hospitalized for, or convalescing from, an illness or injury 

incurred in, or aggravated during, the performance of service?

    Yes. If the employee is hospitalized for, or convalescing from, an 
illness or injury incurred in, or aggravated during, the performance of 
service, he or she must report to or submit an application for 
reemployment to the employer at the end of the period necessary for 
recovering from the illness or injury. This period may not exceed two 
years from the date of the completion of service, except that it must be 
extended by the minimum time necessary to accommodate circumstances 
beyond the employee's control that make reporting within the period 
impossible or unreasonable. This period for recuperation and recovery 
extends the time period for reporting to or submitting an application 
for reemployment to the employer, and is not applicable following 
reemployment.



Sec.1002.117  Are there any consequences if the employee fails to report for 

or submit a timely application for reemployment?

    (a) If the employee fails to timely report for or apply for 
reemployment, he or she does not automatically forfeit entitlement to 
USERRA's reemployment and other rights and benefits. Rather, the 
employee becomes subject to the conduct rules, established policy, and 
general practices of the employer pertaining to an absence from 
scheduled work.
    (b) If reporting or submitting an employment application to the 
employer is impossible or unreasonable through no fault of the employee, 
he or she may report to the employer as soon as possible (in the case of 
a period of service less than 31 days) or submit an application for 
reemployment to the employer by the next full calendar day after it 
becomes possible to do so (in the case of a period of service from 31 to 
180 days), and the employee will be considered to have timely reported 
or applied for reemployment.

[[Page 456]]



Sec.1002.118  Is an application for reemployment required to be in any 

particular form?

    An application for reemployment need not follow any particular 
format. The employee may apply orally or in writing. The application 
should indicate that the employee is a former employee returning from 
service in the uniformed services and that he or she seeks reemployment 
with the pre-service employer. The employee is permitted but not 
required to identify a particular reemployment position in which he or 
she is interested.



Sec.1002.119  To whom must the employee submit the application for 

reemployment?

    The application must be submitted to the pre-service employer or to 
an agent or representative of the employer who has apparent 
responsibility for receiving employment applications. Depending upon the 
circumstances, such a person could be a personnel or human resources 
officer, or a first-line supervisor. If there has been a change in 
ownership of the employer, the application should be submitted to the 
employer's successor-in-interest.



Sec.1002.120  If the employee seeks or obtains employment with an employer 

other than the pre-service employer before the end of the period within which 

a reemployment application must be filed, will that jeopardize reemployment 

rights with the pre-service employer?

    No. The employee has reemployment rights with the pre-service 
employer provided that he or she makes a timely reemployment application 
to that employer. The employee may seek or obtain employment with an 
employer other than the pre-service employer during the period of time 
within which a reemployment application must be made, without giving up 
reemployment rights with the pre-service employer. However, such 
alternative employment during the application period should not be of a 
type that would constitute cause for the employer to discipline or 
terminate the employee following reemployment. For instance, if the 
employer forbids employees from working concurrently for a direct 
competitor during employment, violation of such a policy may constitute 
cause for discipline or even termination.



Sec.1002.121  Is the employee required to submit documentation to the employer 

in connection with the application for reemployment?

    Yes, if the period of service exceeded 30 days and if requested by 
the employer to do so. If the employee submits an application for 
reemployment after a period of service of more than 30 days, he or she 
must, upon the request of the employer, provide documentation to 
establish that:
    (a) The reemployment application is timely;
    (b) The employee has not exceeded the five-year limit on the 
duration of service (subject to the exceptions listed at Sec.
1002.103); and,
    (c) The employee's separation or dismissal from service was not 
disqualifying.



Sec.1002.122  Is the employer required to reemploy the employee if 

documentation establishing the employee's eligibility does not exist or is not 

readily available?

    Yes. The employer is not permitted to delay or deny reemployment by 
demanding documentation that does not exist or is not readily available. 
The employee is not liable for administrative delays in the issuance of 
military documentation. If the employee is reemployed after an absence 
from employment for more than 90 days, the employer may require that he 
or she submit the documentation establishing entitlement to reemployment 
before treating the employee as not having had a break in service for 
pension purposes. If the documentation is received after reemployment 
and it shows that the employee is not entitled to reemployment, the 
employer may terminate employment and any rights or benefits that the 
employee may have been granted.



Sec.1002.123  What documents satisfy the requirement that the employee 

establish eligibility for reemployment after a period of service of more than 

thirty days?

    (a) Documents that satisfy the requirements of USERRA include the 
following:

[[Page 457]]

    (1) DD (Department of Defense) 214 Certificate of Release or 
Discharge from Active Duty;
    (2) Copy of duty orders prepared by the facility where the orders 
were fulfilled carrying an endorsement indicating completion of the 
described service;
    (3) Letter from the commanding officer of a Personnel Support 
Activity or someone of comparable authority;
    (4) Certificate of completion from military training school;
    (5) Discharge certificate showing character of service; and,
    (6) Copy of extracts from payroll documents showing periods of 
service;
    (7) Letter from National Disaster Medical System (NDMS) Team Leader 
or Administrative Officer verifying dates and times of NDMS training or 
Federal activation.
    (b) The types of documents that are necessary to establish 
eligibility for reemployment will vary from case to case. Not all of 
these documents are available or necessary in every instance to 
establish reemployment eligibility.

                          Character of Service



Sec.1002.134  What type of discharge or separation from service is required 

for an employee to be entitled to reemployment under USERRA?

    USERRA does not require any particular form of discharge or 
separation from service. However, even if the employee is otherwise 
eligible for reemployment, he or she will be disqualified if the 
characterization of service falls within one of four categories. USERRA 
requires that the employee not have received one of these types of 
discharge.



Sec.1002.135  What types of discharge or separation from uniformed service 

will make the employee ineligible for reemployment under USERRA?

    Reemployment rights are terminated if the employee is:
    (a) Separated from uniformed service with a dishonorable or bad 
conduct discharge;
    (b) Separated from uniformed service under other than honorable 
conditions, as characterized by regulations of the uniformed service;
    (c) A commissioned officer dismissed as permitted under 10 U.S.C. 
1161(a) by sentence of a general court-martial; in commutation of a 
sentence of a general court-martial; or, in time of war, by order of the 
President; or,
    (d) A commissioned officer dropped from the rolls under 10 U.S.C. 
1161(b) due to absence without authority for at least three months; 
separation by reason of a sentence to confinement adjudged by a court-
martial; or, a sentence to confinement in a Federal or State 
penitentiary or correctional institution.



Sec.1002.136  Who determines the characterization of service?

    The branch of service in which the employee performs the tour of 
duty determines the characterization of service.



Sec.1002.137  If the employee receives a disqualifying discharge or release 

from uniformed service and it is later upgraded, will reemployment rights be 

restored?

    Yes. A military review board has the authority to prospectively or 
retroactively upgrade a disqualifying discharge or release. A 
retroactive upgrade would restore reemployment rights providing the 
employee otherwise meets the Act's eligibility criteria.



Sec.1002.138  If the employee receives a retroactive upgrade in the 

characterization of service, will that entitle him or her to claim back wages 

and benefits lost as of the date of separation from service?

    No. A retroactive upgrade allows the employee to obtain 
reinstatement with the former employer, provided the employee otherwise 
meets the Act's eligibility criteria. Back pay and other benefits such 
as pension plan credits attributable to the time period between 
discharge and the retroactive upgrade are not required to be restored by 
the employer in this situation.

[[Page 458]]

                       Employer Statutory Defenses



Sec.1002.139  Are there any circumstances in which the pre-service employer is 

excused from its obligation to reemploy the employee following a period of 

uniformed service? What statutory defenses are available to the employer in 

an action or proceeding for reemployment benefits?

    (a) Even if the employee is otherwise eligible for reemployment 
benefits, the employer is not required to reemploy him or her if the 
employer establishes that its circumstances have so changed as to make 
reemployment impossible or unreasonable. For example, an employer may be 
excused from reemploying the employee where there has been an 
intervening reduction in force that would have included that employee. 
The employer may not, however, refuse to reemploy the employee on the 
basis that another employee was hired to fill the reemployment position 
during the employee's absence, even if reemployment might require the 
termination of that replacement employee;
    (b) Even if the employee is otherwise eligible for reemployment 
benefits, the employer is not required to reemploy him or her if it 
establishes that assisting the employee in becoming qualified for 
reemployment would impose an undue hardship, as defined in Sec.
1002.5(n) and discussed in Sec.1002.198, on the employer; or,
    (c) Even if the employee is otherwise eligible for reemployment 
benefits, the employer is not required to reemploy him or her if it 
establishes that the employment position vacated by the employee in 
order to perform service in the uniformed services was for a brief, 
nonrecurrent period and there was no reasonable expectation that the 
employment would continue indefinitely or for a significant period.
    (d) The employer defenses included in this section are affirmative 
ones, and the employer carries the burden to prove by a preponderance of 
the evidence that any one or more of these defenses is applicable.



   Subpart D_Rights, Benefits, and Obligations of Persons Absent from 

           Employment Due to Service in the Uniformed Services

                      Furlough and Leave of Absence



Sec.1002.149  What is the employee's status with his or her civilian employer 

while performing service in the uniformed services?

    During a period of service in the uniformed services, the employee 
is deemed to be on furlough or leave of absence from the civilian 
employer. In this status, the employee is entitled to the non-seniority 
rights and benefits generally provided by the employer to other 
employees with similar seniority, status, and pay that are on furlough 
or leave of absence. Entitlement to these non-seniority rights and 
benefits is not dependent on how the employer characterizes the 
employee's status during a period of service. For example, if the 
employer characterizes the employee as ``terminated'' during the period 
of uniformed service, this characterization cannot be used to avoid 
USERRA's requirement that the employee be deemed on furlough or leave of 
absence, and therefore entitled to the non-seniority rights and benefits 
generally provided to employees on furlough or leave of absence.



Sec.1002.150  Which non-seniority rights and benefits is the employee entitled 

to during a period of service?

    (a) The non-seniority rights and benefits to which an employee is 
entitled during a period of service are those that the employer provides 
to similarly situated employees by an employment contract, agreement, 
policy, practice, or plan in effect at the employee's workplace. These 
rights and benefits include those in effect at the beginning of the 
employee's employment and those established after employment began. They 
also include those rights and benefits that become effective during the 
employee's period of service and that are provided to similarly situated 
employees on furlough or leave of absence.
    (b) If the non-seniority benefits to which employees on furlough or 
leave

[[Page 459]]

of absence are entitled vary according to the type of leave, the 
employee must be given the most favorable treatment accorded to any 
comparable form of leave when he or she performs service in the 
uniformed services. In order to determine whether any two types of leave 
are comparable, the duration of the leave may be the most significant 
factor to compare. For instance, a two-day funeral leave will not be 
``comparable'' to an extended leave for service in the uniformed 
service. In addition to comparing the duration of the absences, other 
factors such as the purpose of the leave and the ability of the employee 
to choose when to take the leave should also be considered.
    (c) As a general matter, accrual of vacation leave is considered to 
be a non-seniority benefit that must be provided by an employer to an 
employee on a military leave of absence only if the employer provides 
that benefit to similarly situated employees on comparable leaves of 
absence.



Sec.1002.151  If the employer provides full or partial pay to the employee 

while he or she is on military leave, is the employer required to also provide 

the non-seniority rights and benefits ordinarily granted to similarly 

situated employees on furlough or leave of absence?

    Yes. If the employer provides additional benefits such as full or 
partial pay when the employee performs service, the employer is not 
excused from providing other rights and benefits to which the employee 
is entitled under the Act.



Sec.1002.152  If employment is interrupted by a period of service in the 

uniformed services, are there any circumstances under which the employee is 

not entitled to the non-seniority rights and benefits ordinarily granted to 

similarly situated employees on furlough or leave of absence?

    If employment is interrupted by a period of service in the uniformed 
services and the employee knowingly provides written notice of intent 
not to return to the position of employment after service in the 
uniformed services, he or she is not entitled to those non-seniority 
rights and benefits. The employee's written notice does not waive 
entitlement to any other rights to which he or she is entitled under the 
Act, including the right to reemployment after service.



Sec.1002.153  If employment is interrupted by a period of service in the 

uniformed services, is the employee permitted upon request to use accrued 

vacation, annual or similar leave with pay during the service? Can the 

employer require the employee to use accrued leave during a period of 

service?

    (a) If employment is interrupted by a period of service, the 
employee must be permitted upon request to use any accrued vacation, 
annual, or similar leave with pay during the period of service, in order 
to continue his or her civilian pay. However, the employee is not 
entitled to use sick leave that accrued with the civilian employer 
during a period of service in the uniformed services, unless the 
employer allows employees to use sick leave for any reason, or allows 
other similarly situated employees on comparable furlough or leave of 
absence to use accrued paid sick leave. Sick leave is usually not 
comparable to annual or vacation leave; it is generally intended to 
provide income when the employee or a family member is ill and the 
employee is unable to work.
    (b) The employer may not require the employee to use accrued 
vacation, annual, or similar leave during a period of service in the 
uniformed services.

                          Health Plan Coverage



Sec.1002.163  What types of health plans are covered by USERRA?

    (a) USERRA defines a health plan to include an insurance policy or 
contract, medical or hospital service agreement, membership or 
subscription contract, or arrangement under which the employee's health 
services are provided or the expenses of those services are paid.
    (b) USERRA covers group health plans as defined in the Employee 
Retirement Income Security Act of 1974 (ERISA) at 29 U.S.C. 1191b(a). 
USERRA applies to group health plans that are subject to ERISA, and 
plans that are not subject to ERISA, such as those

[[Page 460]]

sponsored by State or local governments or religious organizations for 
their employees.
    (c) USERRA covers multiemployer plans maintained pursuant to one or 
more collective bargaining agreements between employers and employee 
organizations. USERRA applies to multiemployer plans as they are defined 
in ERISA at 29 U.S.C. 1002(37). USERRA contains provisions that apply 
specifically to multiemployer plans in certain situations.



Sec.1002.164  What health plan coverage must the employer provide for the 

employee under USERRA?

    If the employee has coverage under a health plan in connection with 
his or her employment, the plan must permit the employee to elect to 
continue the coverage for a certain period of time as described below:
    (a) When the employee is performing service in the uniformed 
services, he or she is entitled to continuing coverage for himself or 
herself (and dependents if the plan offers dependent coverage) under a 
health plan provided in connection with the employment. The plan must 
allow the employee to elect to continue coverage for a period of time 
that is the lesser of:
    (1) The 24-month period beginning on the date on which the 
employee's absence for the purpose of performing service begins; or,
    (2) The period beginning on the date on which the employee's absence 
for the purpose of performing service begins, and ending on the date on 
which he or she fails to return from service or apply for a position of 
employment as provided under sections 1002.115-123 of these regulations.
    (b) USERRA does not require the employer to establish a health plan 
if there is no health plan coverage in connection with the employment, 
or, where there is a plan, to provide any particular type of coverage.
    (c) USERRA does not require the employer to permit the employee to 
initiate new health plan coverage at the beginning of a period of 
service if he or she did not previously have such coverage.



Sec.1002.165  How does the employee elect continuing health plan coverage?

    USERRA does not specify requirements for electing continuing 
coverage. Health plan administrators may develop reasonable requirements 
addressing how continuing coverage may be elected, consistent with the 
terms of the plan and the Act's exceptions to the requirement that the 
employee give advance notice of service in the uniformed services. For 
example, the employee cannot be precluded from electing continuing 
health plan coverage under circumstances where it is impossible or 
unreasonable for him or her to make a timely election of coverage.



Sec.1002.166  How much must the employee pay in order to continue health plan 

coverage?

    (a) If the employee performs service in the uniformed service for 
fewer than 31 days, he or she cannot be required to pay more than the 
regular employee share, if any, for health plan coverage.
    (b) If the employee performs service in the uniformed service for 31 
or more days, he or she may be required to pay no more than 102% of the 
full premium under the plan, which represents the employer's share plus 
the employee's share, plus 2% for administrative costs.
    (c) USERRA does not specify requirements for methods of paying for 
continuing coverage. Health plan administrators may develop reasonable 
procedures for payment, consistent with the terms of the plan.



Sec.1002.167  What actions may a plan administrator take if the employee does 

not elect or pay for continuing coverage in a timely manner?

    The actions a plan administrator may take regarding the provision or 
cancellation of an employee's continuing coverage depend on whether the 
employee is excused from the requirement to give advance notice, whether 
the plan has established reasonable rules for election of continuation 
coverage, and whether the plan has established reasonable rules for the 
payment for continuation coverage.
    (a) No notice of service and no election of continuation coverage: 
If an employer

[[Page 461]]

provides employment-based health coverage to an employee who leaves 
employment for uniformed service without giving advance notice of 
service, the plan administrator may cancel the employee's health plan 
coverage upon the employee's departure from employment for uniformed 
service. However, in cases in which an employee's failure to give 
advance notice of service was excused under the statute because it was 
impossible, unreasonable, or precluded by military necessity, the plan 
administrator must reinstate the employee's health coverage 
retroactively upon his or her election to continue coverage and payment 
of all unpaid amounts due, and the employee must incur no administrative 
reinstatement costs. In order to qualify for an exception to the 
requirement of timely election of continuing health care, an employee 
must first be excused from giving notice of service under the statute.
    (b) Notice of service but no election of continuing coverage: Plan 
administrators may develop reasonable requirements addressing how 
continuing coverage may be elected. Where health plans are also covered 
under the Consolidated Omnibus Budget Reconciliation Act of 1985, 26 
U.S.C. 4980B (COBRA), it may be reasonable for a health plan 
administrator to adopt COBRA-compliant rules regarding election of 
continuing coverage, as long as those rules do not conflict with any 
provision of USERRA or this rule. If an employer provides employment-
based health coverage to an employee who leaves employment for uniformed 
service for a period of service in excess of 30 days after having given 
advance notice of service but without making an election regarding 
continuing coverage, the plan administrator may cancel the employee's 
health plan coverage upon the employee's departure from employment for 
uniformed service, but must reinstate coverage without the imposition of 
administrative reinstatement costs under the following conditions:
    (1) Plan administrators who have developed reasonable rules 
regarding the period within which an employee may elect continuing 
coverage must permit retroactive reinstatement of uninterrupted coverage 
to the date of departure if the employee elects continuing coverage and 
pays all unpaid amounts due within the periods established by the plan;
    (2) In cases in which plan administrators have not developed rules 
regarding the period within which an employee may elect continuing 
coverage, the plan must permit retroactive reinstatement of 
uninterrupted coverage to the date of departure upon the employee's 
election and payment of all unpaid amounts at any time during the period 
established in section 1002.164(a).
    (c) Election of continuation coverage without timely payment: Health 
plan administrators may adopt reasonable rules allowing cancellation of 
coverage if timely payment is not made. Where health plans are covered 
under COBRA, it may be reasonable for a health plan administrator to 
adopt COBRA-compliant rules regarding payment for continuing coverage, 
as long as those rules do not conflict with any provision of USERRA or 
this rule.



Sec.1002.168  If the employee's coverage was terminated at the beginning of or 

during service, does his or her coverage have to be reinstated upon 

reemployment?

    (a) If health plan coverage for the employee or a dependent was 
terminated by reason of service in the uniformed services, that coverage 
must be reinstated upon reemployment. An exclusion or waiting period may 
not be imposed in connection with the reinstatement of coverage upon 
reemployment, if an exclusion or waiting period would not have been 
imposed had coverage not been terminated by reason of such service.
    (b) USERRA permits a health plan to impose an exclusion or waiting 
period as to illnesses or injuries determined by the Secretary of 
Veterans Affairs to have been incurred in, or aggravated during, 
performance of service in the uniformed services. The determination that 
the employee's illness or injury was incurred in, or aggravated during, 
the performance of service may only be made by the Secretary of Veterans 
Affairs or his or her representative. Other coverage, for injuries or 
illnesses that

[[Page 462]]

are not service-related (or for the employee's dependents, if he or she 
has dependent coverage), must be reinstated subject to paragraph (a) of 
this section.



Sec.1002.169  Can the employee elect to delay reinstatement of health plan 

coverage until a date after the date he or she is reemployed?

    USERRA requires the employer to reinstate health plan coverage upon 
request at reemployment. USERRA permits but does not require the 
employer to allow the employee to delay reinstatement of health plan 
coverage until a date that is later than the date of reemployment.



Sec.1002.170  In a multiemployer health plan, how is liability allocated for 

employer contributions and benefits arising under USERRA's health plan 

provisions?

    Liability under a multiemployer plan for employer contributions and 
benefits in connection with USERRA's health plan provisions must be 
allocated either as the plan sponsor provides, or, if the sponsor does 
not provide, to the employee's last employer before his or her service. 
If the last employer is no longer functional, liability for continuing 
coverage is allocated to the health plan.



Sec.1002.171  How does the continuation of health plan benefits apply to a 

multiemployer plan that provides health plan coverage through a health 

benefits account system?

    (a) Some employees receive health plan benefits provided pursuant to 
a multiemployer plan that utilizes a health benefits account system in 
which an employee accumulates prospective health benefit eligibility, 
also commonly referred to as ``dollar bank,'' ``credit bank,'' and 
``hour bank'' plans. In such cases, where an employee with a positive 
health benefits account balance elects to continue the coverage, the 
employee may further elect either option below:
    (1) The employee may expend his or her health account balance during 
an absence from employment due to service in the uniformed services in 
lieu of paying for the continuation of coverage as set out in Sec.
1002.166. If an employee's health account balance becomes depleted 
during the applicable period provided for in Sec.1002.164(a), the 
employee must be permitted, at his or her option, to continue coverage 
pursuant to Sec.1002.166. Upon reemployment, the plan must provide for 
immediate reinstatement of the employee as required by Sec.1002.168, 
but may require the employee to pay the cost of the coverage until the 
employee earns the credits necessary to sustain continued coverage in 
the plan.
    (2) The employee may pay for continuation coverage as set out in 
Sec.1002.166, in order to maintain intact his or her account balance 
as of the beginning date of the absence from employment due to service 
in the uniformed services. This option permits the employee to resume 
usage of the account balance upon reemployment.
    (b) Employers or plan administrators providing such plans should 
counsel employees of their options set out in this subsection.



               Subpart E_Reemployment Rights and Benefits

                           Prompt Reemployment



Sec.1002.180  When is an employee entitled to be reemployed by his or her 

civilian employer?

    The employer must promptly reemploy the employee when he or she 
returns from a period of service if the employee meets the Act's 
eligibility criteria as described in Subpart C of these regulations.



Sec.1002.181  How is ``prompt reemployment'' defined?

    ``Prompt reemployment'' means as soon as practicable under the 
circumstances of each case. Absent unusual circumstances, reemployment 
must occur within two weeks of the employee's application for 
reemployment. For example, prompt reinstatement after a weekend National 
Guard duty generally means the next regularly scheduled working day. On 
the other hand, prompt reinstatement following several years of active 
duty may require more time, because the employer may have to reassign or 
give notice to another employee who occupied the returning employee's 
position.

[[Page 463]]

                          Reemployment Position



Sec.1002.191  What position is the employee entitled to upon reemployment?

    As a general rule, the employee is entitled to reemployment in the 
job position that he or she would have attained with reasonable 
certainty if not for the absence due to uniformed service. This position 
is known as the escalator position. The principle behind the escalator 
position is that, if not for the period of uniformed service, the 
employee could have been promoted (or, alternatively, demoted, 
transferred, or laid off) due to intervening events. The escalator 
principle requires that the employee be reemployed in a position that 
reflects with reasonable certainty the pay, benefits, seniority, and 
other job perquisites, that he or she would have attained if not for the 
period of service. Depending upon the specific circumstances, the 
employer may have the option, or be required, to reemploy the employee 
in a position other than the escalator position.



Sec.1002.192  How is the specific reemployment position determined?

    In all cases, the starting point for determining the proper 
reemployment position is the escalator position, which is the job 
position that the employee would have attained if his or her continuous 
employment had not been interrupted due to uniformed service. Once this 
position is determined, the employer may have to consider several 
factors before determining the appropriate reemployment position in any 
particular case. Such factors may include the employee's length of 
service, qualifications, and disability, if any. The reemployment 
position may be either the escalator position; the pre-service position; 
a position comparable to the escalator or pre-service position; or, the 
nearest approximation to one of these positions.



Sec.1002.193  Does the reemployment position include elements such as 

seniority, status, and rate of pay?

    (a) Yes. The reemployment position includes the seniority, status, 
and rate of pay that an employee would ordinarily have attained in that 
position given his or her job history, including prospects for future 
earnings and advancement. The employer must determine the seniority 
rights, status, and rate of pay as though the employee had been 
continuously employed during the period of service. The seniority 
rights, status, and pay of an employment position include those 
established (or changed) by a collective bargaining agreement, employer 
policy, or employment practice. The sources of seniority rights, status, 
and pay include agreements, policies, and practices in effect at the 
beginning of the employee's service, and any changes that may have 
occurred during the period of service. In particular, the employee's 
status in the reemployment position could include opportunities for 
advancement, general working conditions, job location, shift assignment, 
rank, responsibility, and geographical location.
    (b) If an opportunity for promotion, or eligibility for promotion, 
that the employee missed during service is based on a skills test or 
examination, then the employer should give him or her a reasonable 
amount of time to adjust to the employment position and then give a 
skills test or examination. No fixed amount of time for permitting 
adjustment to reemployment will be deemed reasonable in all cases. 
However, in determining a reasonable amount of time to permit an 
employee to adjust to reemployment before scheduling a makeup test or 
examination, an employer may take into account a variety of factors, 
including but not limited to the length of time the returning employee 
was absent from work, the level of difficulty of the test itself, the 
typical time necessary to prepare or study for the test, the duties and 
responsibilities of the reemployment position and the promotional 
position, and the nature and responsibilities of the service member 
while serving in the uniformed service. If the employee is successful on 
the makeup exam and, based on the results of that exam, there is a 
reasonable certainty that he or she would have been promoted, or made 
eligible for promotion, during the time that the employee served in the 
uniformed service, then

[[Page 464]]

the promotion or eligibility for promotion must be made effective as of 
the date it would have occurred had employment not been interrupted by 
uniformed service.



Sec.1002.194  Can the application of the escalator principle result in adverse 

consequences when the employee is reemployed?

    Yes. The Act does not prohibit lawful adverse job consequences that 
result from the employee's restoration on the seniority ladder. 
Depending on the circumstances, the escalator principle may cause an 
employee to be reemployed in a higher or lower position, laid off, or 
even terminated. For example, if an employee's seniority or job 
classification would have resulted in the employee being laid off during 
the period of service, and the layoff continued after the date of 
reemployment, reemployment would reinstate the employee to layoff 
status. Similarly, the status of the reemployment position requires the 
employer to assess what would have happened to such factors as the 
employee's opportunities for advancement, working conditions, job 
location, shift assignment, rank, responsibility, and geographical 
location, if he or she had remained continuously employed. The 
reemployment position may involve transfer to another shift or location, 
more or less strenuous working conditions, or changed opportunities for 
advancement, depending upon the application of the escalator principle.



Sec.1002.195  What other factors can determine the reemployment position?

    Once the employee's escalator position is determined, other factors 
may allow, or require, the employer to reemploy the employee in a 
position other than the escalator position. These factors, which are 
explained in Sec. Sec.1002.196 through 1002.199, are:
    (a) The length of the employee's most recent period of uniformed 
service;
    (b) The employee's qualifications; and,
    (c) Whether the employee has a disability incurred or aggravated 
during uniformed service.



Sec.1002.196  What is the employee's reemployment position if the period of 

service was less than 91 days?

    Following a period of service in the uniformed services of less than 
91 days, the employee must be reemployed according to the following 
priority:
    (a) The employee must be reemployed in the escalator position. He or 
she must be qualified to perform the duties of this position. The 
employer must make reasonable efforts to help the employee become 
qualified to perform the duties of this position.
    (b) If the employee is not qualified to perform the duties of the 
escalator position after reasonable efforts by the employer, the 
employee must be reemployed in the position in which he or she was 
employed on the date that the period of service began. The employee must 
be qualified to perform the duties of this position. The employer must 
make reasonable efforts to help the employee become qualified to perform 
the duties of this position.
    (c) If the employee is not qualified to perform the duties of the 
escalator position or the pre-service position, after reasonable efforts 
by the employer, he or she must be reemployed in any other position that 
is the nearest approximation first to the escalator position and then to 
the pre-service position. The employee must be qualified to perform the 
duties of this position. The employer must make reasonable efforts to 
help the employee become qualified to perform the duties of this 
position.



Sec.1002.197  What is the reemployment position if the employee's period of 

service in the uniformed services was more than 90 days?

    Following a period of service of more than 90 days, the employee 
must be reemployed according to the following priority:
    (a) The employee must be reemployed in the escalator position or a 
position of like seniority, status, and pay. He or she must be qualified 
to perform the duties of this position. The employer must make 
reasonable efforts to help the employee become qualified to perform the 
duties of this position.

[[Page 465]]

    (b) If the employee is not qualified to perform the duties of the 
escalator position or a like position after reasonable efforts by the 
employer, the employee must be reemployed in the position in which he or 
she was employed on the date that the period of service began or in a 
position of like seniority, status, and pay. The employee must be 
qualified to perform the duties of this position. The employer must make 
reasonable efforts to help the employee become qualified to perform the 
duties of this position.
    (c) If the employee is not qualified to perform the duties of the 
escalator position, the pre-service position, or a like position, after 
reasonable efforts by the employer, he or she must be reemployed in any 
other position that is the nearest approximation first to the escalator 
position and then to the pre-service position. The employee must be 
qualified to perform the duties of this position. The employer must make 
reasonable efforts to help the employee become qualified to perform the 
duties of this position.



Sec.1002.198  What efforts must the employer make to help the employee become 

qualified for the reemployment position?

    The employee must be qualified for the reemployment position. The 
employer must make reasonable efforts to help the employee become 
qualified to perform the duties of this position. The employer is not 
required to reemploy the employee on his or her return from service if 
he or she cannot, after reasonable efforts by the employer, qualify for 
the appropriate reemployment position.
    (a)(1) ``Qualified'' means that the employee has the ability to 
perform the essential tasks of the position. The employee's inability to 
perform one or more non-essential tasks of a position does not make him 
or her unqualified.
    (2) Whether a task is essential depends on several factors, and 
these factors include but are not limited to:
    (i) The employer's judgment as to which functions are essential;
    (ii) Written job descriptions developed before the hiring process 
begins;
    (iii) The amount of time on the job spent performing the function;
    (iv) The consequences of not requiring the individual to perform the 
function;
    (v) The terms of a collective bargaining agreement;
    (vi) The work experience of past incumbents in the job; and/or
    (vii) The current work experience of incumbents in similar jobs.
    (b) Only after the employer makes reasonable efforts, as defined in 
Sec.1002.5(i), may it determine that the employee is not qualified for 
the reemployment position. These reasonable efforts must be made at no 
cost to the employee.



Sec.1002.199  What priority must the employer follow if two or more returning 

employees are entitled to reemployment in the same position?

    If two or more employees are entitled to reemployment in the same 
position and more than one employee has reported or applied for 
employment in that position, the employee who first left the position 
for uniformed service has the first priority on reemployment in that 
position. The remaining employee (or employees) is entitled to be 
reemployed in a position similar to that in which the employee would 
have been reemployed according to the rules that normally determine a 
reemployment position, as set out in Sec. Sec.1002.196 and 1002.197.

                      Seniority Rights and Benefits



Sec.1002.210  What seniority rights does an employee have when reemployed 

following a period of uniformed service?

    The employee is entitled to the seniority and seniority-based rights 
and benefits that he or she had on the date the uniformed service began, 
plus any seniority and seniority-based rights and benefits that the 
employee would have attained if he or she had remained continuously 
employed. In determining entitlement to seniority and seniority-based 
rights and benefits, the period of absence from employment due to or 
necessitated by uniformed service is not considered a break in 
employment. The rights and benefits protected by USERRA upon 
reemployment include those provided by the employer and those required 
by statute. For example,

[[Page 466]]

under USERRA, a reemployed service member would be eligible for leave 
under the Family and Medical Leave Act of 1993, 29 U.S.C. 2601-2654 
(FMLA), if the number of months and the number of hours of work for 
which the service member was employed by the civilian employer, together 
with the number of months and the number of hours of work for which the 
service member would have been employed by the civilian employer during 
the period of uniformed service, meet FMLA's eligibility requirements. 
In the event that a service member is denied FMLA leave for failing to 
satisfy the FMLA's hours of work requirement due to absence from 
employment necessitated by uniformed service, the service member may 
have a cause of action under USERRA but not under the FMLA.



Sec.1002.211  Does USERRA require the employer to use a seniority system?

    No. USERRA does not require the employer to adopt a formal seniority 
system. USERRA defines seniority as longevity in employment together 
with any employment benefits that accrue with, or are determined by, 
longevity in employment. In the absence of a formal seniority system, 
such as one established through collective bargaining, USERRA looks to 
the custom and practice in the place of employment to determine the 
employee's entitlement to any employment benefits that accrue with, or 
are determined by, longevity in employment.



Sec.1002.212  How does a person know whether a particular right or benefit is 

a seniority-based right or benefit?

    A seniority-based right or benefit is one that accrues with, or is 
determined by, longevity in employment. Generally, whether a right or 
benefit is seniority-based depends on three factors:
    (a) Whether the right or benefit is a reward for length of service 
rather than a form of short-term compensation for work performed;
    (b) Whether it is reasonably certain that the employee would have 
received the right or benefit if he or she had remained continuously 
employed during the period of service; and,
    (c) Whether it is the employer's actual custom or practice to 
provide or withhold the right or benefit as a reward for length of 
service. Provisions of an employment contract or policies in the 
employee handbook are not controlling if the employer's actual custom or 
practice is different from what is written in the contract or handbook.



Sec.1002.213  How can the employee demonstrate a reasonable certainty that he 

or she would have received the seniority right or benefit if he or she had 

remained continuously employed during the period of service?

    A reasonable certainty is a high probability that the employee would 
have received the seniority or seniority-based right or benefit if he or 
she had been continuously employed. The employee does not have to 
establish that he or she would have received the benefit as an absolute 
certainty. The employee can demonstrate a reasonable certainty that he 
or she would have received the seniority right or benefit by showing 
that other employees with seniority similar to that which the employee 
would have had if he or she had remained continuously employed received 
the right or benefit. The employer cannot withhold the right or benefit 
based on an assumption that a series of unlikely events could have 
prevented the employee from gaining the right or benefit.

                           Disabled Employees



Sec.1002.225  Is the employee entitled to any specific reemployment benefits 

if he or she has a disability that was incurred in, or aggravated during, the 

period of service?

    Yes. A disabled service member is entitled, to the same extent as 
any other individual, to the escalator position he or she would have 
attained but for uniformed service. If the employee has a disability 
incurred in, or aggravated during, the period of service in the 
uniformed services, the employer must make reasonable efforts to 
accommodate that disability and to help the employee become qualified to 
perform the duties of his or her reemployment position. If the employee 
is not qualified

[[Page 467]]

for reemployment in the escalator position because of a disability after 
reasonable efforts by the employer to accommodate the disability and to 
help the employee to become qualified, the employee must be reemployed 
in a position according to the following priority. The employer must 
make reasonable efforts to accommodate the employee's disability and to 
help him or her to become qualified to perform the duties of one of 
these positions:
    (a) A position that is equivalent in seniority, status, and pay to 
the escalator position; or,
    (b) A position that is the nearest approximation to the equivalent 
position, consistent with the circumstances of the employee's case, in 
terms of seniority, status, and pay. A position that is the nearest 
approximation to the equivalent position may be a higher or lower 
position, depending on the circumstances.



Sec.1002.226  If the employee has a disability that was incurred in, or 

aggravated during, the period of service, what efforts must the employer make 

to help him or her become qualified for the reemployment position?

    (a) USERRA requires that the employee be qualified for the 
reemployment position regardless of any disability. The employer must 
make reasonable efforts to help the employee to become qualified to 
perform the duties of this position. The employer is not required to 
reemploy the employee on his or her return from service if he or she 
cannot, after reasonable efforts by the employer, qualify for the 
appropriate reemployment position.
    (b) ``Qualified'' has the same meaning here as in Sec.1002.198.

                               Rate of Pay



Sec.1002.236  How is the employee's rate of pay determined when he or she 

returns from a period of service?

    The employee's rate of pay is determined by applying the same 
escalator principles that are used to determine the reemployment 
position, as follows:
    (a) If the employee is reemployed in the escalator position, the 
employer must compensate him or her at the rate of pay associated with 
the escalator position. The rate of pay must be determined by taking 
into account any pay increases, differentials, step increases, merit 
increases, or periodic increases that the employee would have attained 
with reasonable certainty had he or she remained continuously employed 
during the period of service. In addition, when considering whether 
merit or performance increases would have been attained with reasonable 
certainty, an employer may examine the returning employee's own work 
history, his or her history of merit increases, and the work and pay 
history of employees in the same or similar position. For example, if 
the employee missed a merit pay increase while performing service, but 
qualified for previous merit pay increases, then the rate of pay should 
include the merit pay increase that was missed. If the merit pay 
increase that the employee missed during service is based on a skills 
test or examination, then the employer should give the employee a 
reasonable amount of time to adjust to the reemployment position and 
then give him or her the skills test or examination. No fixed amount of 
time for permitting adjustment to reemployment will be deemed reasonable 
in all cases. However, in determining a reasonable amount of time to 
permit an employee to adjust to reemployment before scheduling a makeup 
test or examination, an employer may take into account a variety of 
factors, including but not limited to the length of time the returning 
employee was absent from work, the level of difficulty of the test 
itself, the typical time necessary to prepare or study for the test, the 
duties and responsibilities of the reemployment position and the 
promotional position, and the nature and responsibilities of the service 
member while serving in the uniformed service. The escalator principle 
also applies in the event a pay reduction occurred in the reemployment 
position during the period of service. Any pay adjustment must be made 
effective as of the date it would have occurred had the employee's 
employment not been interrupted by uniformed service.
    (b) If the employee is reemployed in the pre-service position or 
another position, the employer must compensate

[[Page 468]]

him or her at the rate of pay associated with the position in which he 
or she is reemployed. As with the escalator position, the rate of pay 
must be determined by taking into account any pay increases, 
differentials, step increases, merit increases, or periodic increases 
that the employee would have attained with reasonable certainty had he 
or she remained continuously employed during the period of service.

                      Protection Against Discharge



Sec.1002.247  Does USERRA provide the employee with protection against 

discharge?

    Yes. If the employee's most recent period of service in the 
uniformed services was more than 30 days, he or she must not be 
discharged except for cause--
    (a) For 180 days after the employee's date of reemployment if his or 
her most recent period of uniformed service was more than 30 days but 
less than 181 days; or,
    (b) For one year after the date of reemployment if the employee's 
most recent period of uniformed service was more than 180 days.



Sec.1002.248  What constitutes cause for discharge under USERRA?

    The employee may be discharged for cause based either on conduct or, 
in some circumstances, because of the application of other legitimate 
nondiscriminatory reasons.
    (a) In a discharge action based on conduct, the employer bears the 
burden of proving that it is reasonable to discharge the employee for 
the conduct in question, and that he or she had notice, which was 
express or can be fairly implied, that the conduct would constitute 
cause for discharge.
    (b) If, based on the application of other legitimate 
nondiscriminatory reasons, the employee's job position is eliminated, or 
the employee is placed on layoff status, either of these situations 
would constitute cause for purposes of USERRA. The employer bears the 
burden of proving that the employee's job would have been eliminated or 
that he or she would have been laid off.

                          Pension Plan Benefits



Sec.1002.259  How does USERRA protect an employee's pension benefits?

    On reemployment, the employee is treated as not having a break in 
service with the employer or employers maintaining a pension plan, for 
purposes of participation, vesting and accrual of benefits, by reason of 
the period of absence from employment due to or necessitated by service 
in the uniformed services.
    (a) Depending on the length of the employee's period of service, he 
or she is entitled to take from one to ninety days following service 
before reporting back to work or applying for reemployment (See Sec.
1002.115). This period of time must be treated as continuous service 
with the employer for purposes of determining participation, vesting and 
accrual of pension benefits under the plan.
    (b) If the employee is hospitalized for, or convalescing from, an 
illness or injury incurred in, or aggravated during, service, he or she 
is entitled to report to or submit an application for reemployment at 
the end of the time period necessary for him or her to recover from the 
illness or injury. This period, which may not exceed two years from the 
date the employee completed service, except in circumstances beyond his 
or her control, must be treated as continuous service with the employer 
for purposes of determining the participation, vesting and accrual of 
pension benefits under the plan.



Sec.1002.260  What pension benefit plans are covered under USERRA?

    (a) The Employee Retirement Income Security Act of 1974 (ERISA) 
defines an employee pension benefit plan as a plan that provides 
retirement income to employees, or defers employee income to a period 
extending to or beyond the termination of employment. Any such plan 
maintained by the employer or employers is covered under USERRA. USERRA 
also covers certain pension plans not covered by ERISA, such as those 
sponsored by a State, government entity, or church for its employees.

[[Page 469]]

    (b) USERRA does not cover pension benefits under the Federal Thrift 
Savings Plan; those benefits are covered under 5 U.S.C. 8432b.



Sec.1002.261  Who is responsible for funding any plan obligation to provide 

the employee with pension benefits?

    With the exception of multiemployer plans, which have separate rules 
discussed below, the employer is liable to the pension benefit plan to 
fund any obligation of the plan to provide benefits that are 
attributable to the employee's period of service. In the case of a 
defined contribution plan, once the employee is reemployed, the employer 
must allocate the amount of its make-up contribution for the employee, 
if any; his or her make-up employee contributions, if any; and his or 
her elective deferrals, if any; in the same manner and to the same 
extent that it allocates the amounts for other employees during the 
period of service. In the case of a defined benefit plan, the employee's 
accrued benefit will be increased for the period of service once he or 
she is reemployed and, if applicable, has repaid any amounts previously 
paid to him or her from the plan and made any employee contributions 
that may be required to be made under the plan.



Sec.1002.262  When is the employer required to make the plan contribution that 

is attributable to the employee's period of uniformed service?

    (a) The employer is not required to make its contribution until the 
employee is reemployed. For employer contributions to a plan in which 
the employee is not required or permitted to contribute, the employer 
must make the contribution attributable to the employee's period of 
service no later than ninety days after the date of reemployment, or 
when plan contributions are normally due for the year in which the 
service in the uniformed services was performed, whichever is later. If 
it is impossible or unreasonable for the employer to make the 
contribution within this time period, the employer must make the 
contribution as soon as practicable.
    (b) If the employee is enrolled in a contributory plan he or she is 
allowed (but not required) to make up his or her missed contributions or 
elective deferrals. These makeup contributions or elective deferrals 
must be made during a time period starting with the date of reemployment 
and continuing for up to three times the length of the employee's 
immediate past period of uniformed service, with the repayment period 
not to exceed five years. Makeup contributions or elective deferrals may 
only be made during this period and while the employee is employed with 
the post-service employer.
    (c) If the employee's plan is contributory and he or she does not 
make up his or her contributions or elective deferrals, he or she will 
not receive the employer match or the accrued benefit attributable to 
his or her contribution because the employer is required to make 
contributions that are contingent on or attributable to the employee's 
contributions or elective deferrals only to the extent that the employee 
makes up his or her payments to the plan. Any employer contributions 
that are contingent on or attributable to the employee's make-up 
contributions or elective deferrals must be made according to the plan's 
requirements for employer matching contributions.
    (d) The employee is not required to make up the full amount of 
employee contributions or elective deferrals that he or she missed 
making during the period of service. If the employee does not make up 
all of the missed contributions or elective deferrals, his or her 
pension may be less than if he or she had done so.
    (e) Any vested accrued benefit in the pension plan that the employee 
was entitled to prior to the period of uniformed service remains intact 
whether or not he or she chooses to be reemployed under the Act after 
leaving the uniformed service.
    (f) An adjustment will be made to the amount of employee 
contributions or elective deferrals the employee will be able to make to 
the pension plan for any employee contributions or elective deferrals he 
or she actually made to the plan during the period of service.

[[Page 470]]



Sec.1002.263  Does the employee pay interest when he or she makes up missed 

contributions or elective deferrals?

    No. The employee is not required or permitted to make up a missed 
contribution in an amount that exceeds the amount he or she would have 
been permitted or required to contribute had he or she remained 
continuously employed during the period of service.



Sec.1002.264  Is the employee allowed to repay a previous distribution from a 

pension benefits plan upon being reemployed?

    Yes, provided the plan is a defined benefit plan. If the employee 
received a distribution of all or part of the accrued benefit from a 
defined benefit plan in connection with his or her service in the 
uniformed services before he or she became reemployed, he or she must be 
allowed to repay the withdrawn amounts when he or she is reemployed. The 
amount the employee must repay includes any interest that would have 
accrued had the monies not been withdrawn. The employee must be allowed 
to repay these amounts during a time period starting with the date of 
reemployment and continuing for up to three times the length of the 
employee's immediate past period of uniformed service, with the 
repayment period not to exceed five years (or such longer time as may be 
agreed to between the employer and the employee), provided the employee 
is employed with the post-service employer during this period.



Sec.1002.265  If the employee is reemployed with his or her pre-service 

employer, is the employee's pension benefit the same as if he or she had 

remained continuously employed?

    The amount of the employee's pension benefit depends on the type of 
pension plan.
    (a) In a non-contributory defined benefit plan, where the amount of 
the pension benefit is determined according to a specific formula, the 
employee's benefit will be the same as though he or she had remained 
continuously employed during the period of service.
    (b) In a contributory defined benefit plan, the employee will need 
to make up contributions in order to have the same benefit as if he or 
she had remained continuously employed during the period of service.
    (c) In a defined contribution plan, the benefit may not be the same 
as if the employee had remained continuously employed, even though the 
employee and the employer make up any contributions or elective 
deferrals attributable to the period of service, because the employee is 
not entitled to forfeitures and earnings or required to experience 
losses that accrued during the period or periods of service.



Sec.1002.266  What are the obligations of a multiemployer pension benefit plan 

under USERRA?

    A multiemployer pension benefit plan is one to which more than one 
employer is required to contribute, and which is maintained pursuant to 
one or more collective bargaining agreements between one or more 
employee organizations and more than one employer. The Act uses ERISA's 
definition of a multiemployer plan. In addition to the provisions of 
USERRA that apply to all pension benefit plans, there are provisions 
that apply specifically to multiemployer plans, as follows:
    (a) The last employer that employed the employee before the period 
of service is responsible for making the employer contribution to the 
multiemployer plan, if the plan sponsor does not provide otherwise. If 
the last employer is no longer functional, the plan must nevertheless 
provide coverage to the employee.
    (b) An employer that contributes to a multiemployer plan and that 
reemploys the employee pursuant to USERRA must provide written notice of 
reemployment to the plan administrator within 30 days after the date of 
reemployment. The returning service member should notify the reemploying 
employer that he or she has been reemployed pursuant to USERRA. The 30-
day period within which the reemploying employer must provide written 
notice to the multiemployer plan pursuant to this subsection does not 
begin until the employer has knowledge that the employee was reemployed 
pursuant to USERRA.
    (c) The employee is entitled to the same employer contribution 
whether

[[Page 471]]

he or she is reemployed by the pre-service employer or by a different 
employer contributing to the same multiemployer plan, provided that the 
pre-service employer and the post-service employer share a common means 
or practice of hiring the employee, such as common participation in a 
union hiring hall.



Sec.1002.267  How is compensation during the period of service calculated in 

order to determine the employee's pension benefits, if benefits are based on 

compensation?

    In many pension benefit plans, the employee's compensation 
determines the amount of his or her contribution or the retirement 
benefit to which he or she is entitled.
    (a) Where the employee's rate of compensation must be calculated to 
determine pension entitlement, the calculation must be made using the 
rate of pay that the employee would have received but for the period of 
uniformed service.
    (b)(1) Where the rate of pay the employee would have received is not 
reasonably certain, such as where compensation is based on commissions 
earned, the average rate of compensation during the 12-month period 
prior to the period of uniformed service must be used.
    (2) Where the rate of pay the employee would have received is not 
reasonably certain and he or she was employed for less than 12 months 
prior to the period of uniformed service, the average rate of 
compensation must be derived from this shorter period of employment that 
preceded service.



        Subpart F_Compliance Assistance, Enforcement and Remedies

                          Compliance Assistance



Sec.1002.277  What assistance does the Department of Labor provide to 

employees and employers concerning employment, reemployment, or other rights 

and benefits under USERRA?

    The Secretary, through the Veterans' Employment and Training Service 
(VETS), provides assistance to any person or entity with respect to 
employment and reemployment rights and benefits under USERRA. This 
assistance includes a wide range of compliance assistance outreach 
activities, such as responding to inquiries; conducting USERRA briefings 
and Webcasts; issuing news releases; and, maintaining the elaws USERRA 
Advisor (located at http://www.dol.gov/elaws/userra.htm), the e-VETS 
Resource Advisor and other web-based materials (located at http://
www.dol.gov/vets), which are designed to increase awareness of the Act 
among affected persons, the media, and the general public. In providing 
such assistance, VETS may request the assistance of other Federal and 
State agencies, and utilize the assistance of volunteers.

                       Investigation and Referral



Sec.1002.288  How does an individual file a USERRA complaint?

    If an individual is claiming entitlement to employment rights or 
benefits or reemployment rights or benefits and alleges that an employer 
has failed or refused, or is about to fail or refuse, to comply with the 
Act, the individual may file a complaint with VETS or initiate a private 
legal action in a court of law (see Sec.1002.303). A complaint may be 
filed with VETS either in writing, using VETS Form 1010, or 
electronically, using VETS Form e1010 (instructions and the forms can be 
accessed at http://www.dol.gov/elaws/vets/userra/1010.asp). A complaint 
must include the name and address of the employer, a summary of the 
basis for the complaint, and a request for relief.



Sec.1002.289  How will VETS investigate a USERRA complaint?

    (a) In carrying out any investigation, VETS has, at all reasonable 
times, reasonable access to and the right to interview persons with 
information relevant to the investigation. VETS also has reasonable 
access to, for purposes of examination, the right to copy and receive 
any documents of any person or employer that VETS considers relevant to 
the investigation.

[[Page 472]]

    (b) VETS may require by subpoena the attendance and testimony of 
witnesses and the production of documents relating to any matter under 
investigation. In case of disobedience of or resistance to the subpoena, 
the Attorney General may, at VETS' request, apply to any district court 
of the United States in whose jurisdiction such disobedience or 
resistance occurs for an order enforcing the subpoena. The district 
courts of the United States have jurisdiction to order compliance with 
the subpoena, and to punish failure to obey a subpoena as a contempt of 
court. This paragraph does not authorize VETS to seek issuance of a 
subpoena to the legislative or judicial branches of the United States.



Sec.1002.290  Does VETS have the authority to order compliance with USERRA?

    No. If VETS determines as a result of an investigation that the 
complaint is meritorious, VETS attempts to resolve the complaint by 
making reasonable efforts to ensure that any persons or entities named 
in the complaint comply with the Act.
    If VETS' efforts do not resolve the complaint, VETS notifies the 
person who submitted the complaint of:
    (a) The results of the investigation; and,
    (b) The person's right to proceed under the enforcement of rights 
provisions in 38 U.S.C. 4323 (against a State or private employer), or 
38 U.S.C. 4324 (against a Federal executive agency or the Office of 
Personnel Management (OPM)).



Sec.1002.291  What actions may an individual take if the complaint is not 

resolved by VETS?

    If an individual receives a notification from VETS of an 
unsuccessful effort to resolve his or her complaint relating to a State 
or private employer, the individual may request that VETS refer the 
complaint to the Attorney General.



Sec.1002.292  What can the Attorney General do about the complaint?

    (a) If the Attorney General is reasonably satisfied that an 
individual's complaint is meritorious, meaning that he or she is 
entitled to the rights or benefits sought, the Attorney General may 
appear on his or her behalf and act as the individual's attorney, and 
initiate a legal action to obtain appropriate relief.
    (b) If the Attorney General determines that the individual's 
complaint does not have merit, the Attorney General may decline to 
represent him or her.

 Enforcement of Rights and Benefits Against a State or Private Employer



Sec.1002.303  Is an individual required to file his or her complaint with 

VETS?

    No. The individual may initiate a private action for relief against 
a State or private employer if he or she decides not to apply to VETS 
for assistance.



Sec.1002.304  If an individual files a complaint with VETS and VETS' efforts 

do not resolve the complaint, can the individual pursue the claim on his or 

her own?

    Yes. If VETS notifies an individual that it is unable to resolve the 
complaint, the individual may pursue the claim on his or her own. The 
individual may choose to be represented by private counsel whether or 
not the Attorney General decides to represent him or her as to the 
complaint.



Sec.1002.305  What court has jurisdiction in an action against a State or 

private employer?

    (a) If an action is brought against a State or private employer by 
the Attorney General, the district courts of the United States have 
jurisdiction over the action. If the action is brought against a State 
by the Attorney General, it must be brought in the name of the United 
States as the plaintiff in the action.
    (b) If an action is brought against a State by a person, the action 
may be brought in a State court of competent jurisdiction according to 
the laws of the State.
    (c) If an action is brought against a private employer or a 
political subdivision of a State by a person, the district courts of the 
United States have jurisdiction over the action.

[[Page 473]]

    (d) An action brought against a State Adjutant General, as an 
employer of a civilian National Guard technician, is considered an 
action against a State for purposes of determining which court has 
jurisdiction.



Sec.1002.306  Is a National Guard civilian technician considered a State or 

Federal employee for purposes of USERRA?

    A National Guard civilian technician is considered a State employee 
for USERRA purposes, although he or she is considered a Federal employee 
for most other purposes.



Sec.1002.307  What is the proper venue in an action against a State or private 

employer?

    (a) If an action is brought by the Attorney General against a State, 
the action may proceed in the United States district court for any 
district in which the State exercises any authority or carries out any 
function.
    (b) If an action is brought against a private employer, or a 
political subdivision of a State, the action may proceed in the United 
States district court for any district in which the employer maintains a 
place of business.



Sec.1002.308  Who has legal standing to bring an action under USERRA?

    An action may be brought only by the United States or by the person, 
or representative of a person, claiming rights or benefits under the 
Act. An employer, prospective employer or other similar entity may not 
bring an action under the Act.



Sec.1002.309  Who is a necessary party in an action under USERRA?

    In an action under USERRA only an employer or a potential employer, 
as the case may be, is a necessary party respondent. In some 
circumstances, such as where terms in a collective bargaining agreement 
need to be interpreted, the court may allow an interested party to 
intervene in the action.



Sec.1002.310  How are fees and court costs charged or taxed in an action under 

USERRA?

    No fees or court costs may be charged or taxed against an individual 
if he or she is claiming rights under the Act. If the individual obtains 
private counsel for any action or proceeding to enforce a provision of 
the Act, and prevails, the court may award reasonable attorney fees, 
expert witness fees, and other litigation expenses.



Sec.1002.311  Is there a statute of limitations in an action under USERRA?

    USERRA does not have a statute of limitations, and it expressly 
precludes the application of any State statute of limitations. At least 
one court, however, has held that the four-year general Federal statute 
of limitations, 28 U.S.C. 1658, applies to actions under USERRA. Rogers 
v. City of San Antonio, 2003 WL 1566502 (W.D. Texas), reversed on other 
grounds, 392 F.3d 758 (5th Cir. 2004). But see Akhdary v. City of 
Chattanooga, 2002 WL 32060140 (E.D. Tenn.). In addition, if an 
individual unreasonably delays asserting his or her rights, and that 
unreasonable delay causes prejudice to the employer, the courts have 
recognized the availability of the equitable doctrine of laches to bar a 
claim under USERRA. Accordingly, individuals asserting rights under 
USERRA should determine whether the issue of the applicability of the 
Federal statute of limitations has been resolved and, in any event, act 
promptly to preserve their rights under USERRA.



Sec.1002.312  What remedies may be awarded for a violation of USERRA?

    In any action or proceeding the court may award relief as follows:
    (a) The court may require the employer to comply with the provisions 
of the Act;
    (b) The court may require the employer to compensate the individual 
for any loss of wages or benefits suffered by reason of the employer's 
failure to comply with the Act;
    (c) The court may require the employer to pay the individual an 
amount equal to the amount of lost wages and benefits as liquidated 
damages, if the court determines that the employer's failure to comply 
with the Act was willful. A violation shall be considered to be willful 
if the employer either knew or showed reckless disregard for

[[Page 474]]

whether its conduct was prohibited by the Act.
    (d) Any wages, benefits, or liquidated damages awarded under 
paragraphs (b) and (c) of this section are in addition to, and must not 
diminish, any of the other rights and benefits provided by USERRA (such 
as, for example, the right to be employed or reemployed by the 
employer).



Sec.1002.313  Are there special damages provisions that apply to actions 

initiated in the name of the United States?

    Yes. In an action brought in the name of the United States, for 
which the relief includes compensation for lost wages, benefits, or 
liquidated damages, the compensation must be held in a special deposit 
account and must be paid, on order of the Attorney General, directly to 
the person. If the compensation is not paid to the individual because of 
the Federal Government's inability to do so within a period of three 
years, the compensation must be converted into the Treasury of the 
United States as miscellaneous receipts.



Sec.1002.314  May a court use its equity powers in an action or proceeding 

under the Act?

    Yes. A court may use its full equity powers, including the issuance 
of temporary or permanent injunctions, temporary restraining orders, and 
contempt orders, to vindicate the rights or benefits guaranteed under 
the Act.



     Sec. Appendix to Part 1002--Notice of Your Rights Under USERRA

    Pursuant to 38 U.S.C. 4334(a), each employer shall provide to 
persons entitled to rights and benefits under USERRA a notice of the 
rights, benefits, and obligations of such persons and such employers 
under USERRA. The requirement for the provision of notice under this 
section may be met by posting the following notice where employers 
customarily place notices for employees. Posting one of the original 
notices published in 70 FR 75316 (Dec. 19, 2005) will also satisfy this 
requirement. The following text is provided by the Secretary of Labor to 
employers pursuant to 38 U.S.C. 4334(b).

                      Text for Use by All Employers

                        Your Rights Under USERRA

    A. The Uniformed Services Employment and Reemployment Rights Act

    USERRA protects the job rights of individuals who voluntarily or 
involuntarily leave employment positions to undertake military service 
or certain types of service in the National Disaster Medical System. 
USERRA also prohibits employers from discriminating against past and 
present members of the uniformed services, and applicants to the 
uniformed services.

                         B. Reemployment Rights

    You have the right to be reemployed in your civilian job if you 
leave that job to perform service in the uniformed service and:
     You ensure that your employer receives advance 
written or verbal notice of your service;
     You have five years or less of cumulative service 
in the uniformed services while with that particular employer;
     You return to work or apply for reemployment in a 
timely manner after conclusion of service; and
     You have not been separated from service with a 
disqualifying discharge or under other than honorable conditions.
    If you are eligible to be reemployed, you must be restored to the 
job and benefits you would have attained if you had not been absent due 
to military service or, in some cases, a comparable job.

         C. Right To Be Free From Discrimination and Retaliation

    If you:
     Are a past or present member of the uniformed 
service;
     Have applied for membership in the uniformed 
service; or
     Are obligated to serve in the uniformed service; 
then an employer may not deny you

     Initial employment;
     Reemployment;
     Retention in employment;
     Promotion; or
     Any benefit of employment

because of this status.
    In addition, an employer may not retaliate against anyone assisting 
in the enforcement of USERRA rights, including testifying or making a 
statement in connection with a proceeding under USERRA, even if that 
person has no service connection.

                     D. Health Insurance Protection

     If you leave your job to perform military 
service, you have the right to elect to continue your existing employer-
based health plan coverage for you and your dependents for up to 24 
months while in the military.

[[Page 475]]

     Even if you do not elect to continue coverage 
during your military service, you have the right to be reinstated in 
your employer's health plan when you are reemployed, generally without 
any waiting periods or exclusions (e.g., pre-existing condition 
exclusions) except for service-connected illnesses or injuries.

                             E. Enforcement

     The U.S. Department of Labor, Veterans' 
Employment and Training Service (VETS) is authorized to investigate and 
resolve complaints of USERRA violations.
    For assistance in filing a complaint, or for any other information 
on USERRA, contact VETS at 1-866-4-USA-DOL or visit its Web site at 
http://www.dol.gov/vets. An interactive online USERRA Advisor can be 
viewed at http://www.dol.gov/elaws/userra.htm.
     If you file a complaint with VETS and VETS is 
unable to resolve it, you may request that your case be referred to the 
Department of Justice or the Office of Special Counsel, as applicable, 
for representation.
     You may also bypass the VETS process and bring a 
civil action against an employer for violations of USERRA.
    The rights listed here may vary depending on the circumstances. The 
text of this notice was prepared by VETS, and may be viewed on the 
Internet at this address: http://www.dol.gov/vets/programs/userra/
poster.htm. Federal law requires employers to notify employees of their 
rights under USERRA, and employers may meet this requirement by 
displaying the text of this notice where they customarily place notices 
for employees. U.S. Department of Labor, Veterans' Employment and 
Training Service, 1-866-487-2365.

[73 FR 63632, Oct. 27, 2008]



PART 1010_APPLICATION OF PRIORITY OF SERVICE FOR COVERED PERSONS--Table of 

Contents



                    Subpart A_Purpose and Definitions

Sec.
1010.100 What is the purpose and scope of this part?
1010.110 What definitions apply to this part?

               Subpart B_Understanding Priority of Service

1010.200 What is priority of service?
1010.210 In which Department job training programs do covered persons 
          receive priority of service?
1010.220 How are recipients required to implement priority of service?
1010.230 In addition to the responsibilities of all recipients, do 
          States and political subdivisions of States have any 
          particular responsibilities in implementing priority of 
          service?
1010.240 Will the Department be monitoring for compliance with priority 
          of service?
1010.250 Can priority of service be waived?

                 Subpart C_Applying Priority of Service

1010.300 What processes are to be implemented to identify covered 
          persons?
1010.310 How will priority of service be applied?
1010.320 Will recipients be required to collect information and report 
          on priority of service?
1010.330 What are the responsibilities of recipients to collect and 
          maintain data on covered and non-covered persons?

    Authority: Pub. L. 109-461 (Dec. 22, 2006), section 605 [38 U.S.C. 
4215 Note]; 38 U.S.C. 4215.

    Source: 73 FR 78142, Dec. 19, 2008, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec.1010.100  What is the purpose and scope of this part?

    (a) Part 1010 contains the Department regulations implementing 
priority of service for covered persons. Priority of service for covered 
persons is authorized by section 2(a)(1) of JVA (38 U.S.C. 4215). These 
regulations fulfill section 605 of the Veterans Benefits, Health Care, 
and Information Technology Act of 2006, Pub. L. 109-461 (Dec. 22, 2006), 
which requires the Department to implement priority of service via 
regulation.
    (b) As provided in Sec.1010.210, this part applies to all 
qualified job training programs.



Sec.1010.110  What definitions apply to this part?

    The following definitions apply to this part:
    Covered person as defined in section 2(a) of the JVA (38 U.S.C. 
4215(a)) means a veteran or eligible spouse.
    Department or DOL means the United States Department of Labor, 
including its agencies and organizational units and their 
representatives.
    Eligible spouse as defined in section 2(a) of the JVA (38 U.S.C. 
4215(a)) means the spouse of any of the following:

[[Page 476]]

    (1) Any veteran who died of a service-connected disability;
    (2) Any member of the Armed Forces serving on active duty who, at 
the time of application for the priority, is listed in one or more of 
the following categories and has been so listed for a total of more than 
90 days:
    (i) Missing in action;
    (ii) Captured in line of duty by a hostile force; or
    (iii) Forcibly detained or interned in line of duty by a foreign 
government or power;
    (3) Any veteran who has a total disability resulting from a service-
connected disability, as evaluated by the Department of Veterans 
Affairs;
    (4) Any veteran who died while a disability, as indicated in 
paragraph (3) of this section, was in existence.
    Grant means an award of Federal financial assistance by the 
Department of Labor to an eligible recipient.
    Jobs for Veterans Act (JVA) means Public Law 107-288 (2002). Section 
2(a) of the JVA, codified at 38 U.S.C. 4215(a), provides priority of 
service for covered persons.
    Non-covered person means any individual who meets neither the 
definition of ``veteran,'' as defined in this section, nor the 
definition of ``eligible spouse'' as defined in this section.
    Qualified job training program means any program or service for 
workforce preparation, development, or delivery that is directly funded, 
in whole or in part, by the Department of Labor.
    Recipient means an entity to which federal financial assistance, in 
whole or in part, is awarded directly from the Department or through a 
sub-award for any qualified job training program.
    Secretary means the Secretary of the Department of Labor.
    Veteran means a person who served in the active military, naval, or 
air service, and who was discharged or released therefrom under 
conditions other than dishonorable, as specified in 38 U.S.C. 101(2). 
Active service includes full-time duty in the National Guard or a 
Reserve component, other than full-time duty for training purposes.



               Subpart B_Understanding Priority of Service



Sec.1010.200  What is priority of service?

    (a) As defined in section 2(a) of the JVA (38 U.S.C. 4215(a)) 
``priority of service'' means, with respect to any qualified job 
training program, that a covered person shall be given priority over a 
non-covered person for the receipt of employment, training, and 
placement services provided under that program, notwithstanding any 
other provision of the law.
    (b) Priority in the context of providing priority of service to 
veterans and other covered persons in qualified job training programs 
covered by this regulation means the right to take precedence over non-
covered persons in obtaining services. Depending on the type of service 
or resource being provided, taking precedence may mean:
    (1) The covered person receives access to the service or resource 
earlier in time than the non-covered person; or
    (2) If the service or resource is limited, the covered person 
receives access to the service or resource instead of or before the non-
covered person.



Sec.1010.210  In which Department job training programs do covered persons 

receive priority of service?

    (a) Priority of service applies to every qualified job training 
program funded, in whole or in part, by the Department, including:
    (1) Any such program or service that uses technology to assist 
individuals to access workforce development programs (such as job and 
training opportunities, labor market information, career assessment 
tools, and related support services); and
    (2) Any such program or service under the public employment service 
system, One-Stop Career Centers, the Workforce Investment Act of 1998, a 
demonstration or other temporary program; any workforce development 
program targeted to specific groups; and those programs implemented by 
States or local service providers based on Federal block grants 
administered by the Department.
    (b) The implementation of priority of service does not change the 
intended

[[Page 477]]

function of a program or service. Covered persons must meet all 
statutory eligibility and program requirements for participation in 
order to receive priority for a program or service.



Sec.1010.220  How are recipients required to implement priority of service?

    (a) An agreement to implement priority of service, as described in 
these regulations and in any departmental guidance, is a condition for 
receipt of all Department job training program funds.
    (b) All recipients are required to ensure that priority of service 
is applied by all sub-recipients of Department funds. All program 
activities, including those obtained through requests for proposals, 
solicitations for grant awards, sub-grants, contracts, sub-contracts, 
and (where feasible) memoranda of understanding or other service 
provision agreements, issued or executed by qualified job training 
program operators, must be administered in compliance with priority of 
service.



Sec.1010.230  In addition to the responsibilities of all recipients, do States 

and political subdivisions of States have any particular responsibilities in 

implementing priority of service?

    (a) Pursuant to their responsibility under the Workforce Investment 
Act of 1998, States are required to address priority of service in their 
comprehensive strategic plan for the State's workforce investment 
system. Specifically, States must develop policies for the delivery of 
priority of service by the State Workforce Agency or Agencies, Local 
Workforce Investment Boards, and One-Stop Career Centers for all 
qualified job training programs delivered through the State's workforce 
system. The policy or policies must require that processes are in place 
to ensure that covered persons are identified at the point of entry and 
given an opportunity to take full advantage of priority of service. 
These processes shall be undertaken to ensure that covered persons are 
aware of:
    (1) Their entitlement to priority of service;
    (2) The full array of employment, training, and placement services 
available under priority of service; and
    (3) Any applicable eligibility requirements for those programs and/
or services.
    (b) The State's policy or policies must require Local Workforce 
Investment Boards to develop and include in their strategic local plan, 
policies implementing priority of service for the local One-Stop Career 
Centers and for service delivery by local workforce preparation and 
training providers. These policies must establish processes to ensure 
that covered persons are identified at the point of entry so that 
covered persons are able to take full advantage of priority of service. 
These processes shall ensure that covered persons are aware of:
    (1) Their entitlement to priority of service;
    (2) The full array of employment, training, and placement services 
available under priority of service; and
    (3) Any applicable eligibility requirements for those programs and/
or services.



Sec.1010.240  Will the Department be monitoring for compliance with priority 

of service?

    (a) The Department will monitor recipients of funds for qualified 
job training programs to ensure that covered persons are made aware of 
and afforded priority of service.
    (b) Monitoring priority of service will be performed jointly between 
the Veterans' Employment and Training Service (VETS) and the DOL agency 
responsible for the program's administration and oversight.
    (c) A recipient's failure to provide priority of service to covered 
persons will be handled in accordance with the program's established 
compliance review processes. In addition to the remedies available under 
the program's compliance review processes, a recipient may be required 
to submit a corrective action plan to correct such failure.



Sec.1010.250  Can priority of service be waived?

    No, priority of service cannot be waived.

[[Page 478]]



                 Subpart C_Applying Priority of Service



Sec.1010.300  What processes are to be implemented to identify covered 

persons?

    (a) Recipients of funds for qualified job training programs must 
implement processes to identify covered persons who physically access 
service delivery points or who access virtual service delivery programs 
or Web sites in order to provide covered persons with timely and useful 
information on priority of service at the point of entry. Point of entry 
may include reception through a One-Stop Career Center established 
pursuant to the Workforce Investment Act of 1998, as part of an 
application process for a specific program, or through any other method 
by which covered persons express an interest in receiving services, 
either in-person or virtually.
    (b)(1) The processes for identifying covered persons at the point of 
entry must be designed to:
    (i) Permit the individual to make known his or her covered person 
status; and
    (ii) Permit those qualified job training programs specified in Sec.
1010.330(a)(2) to initiate data collection for covered entrants.
    (2) The processes for identifying covered persons are not required 
to verify the status of an individual as a veteran or eligible spouse at 
the point of entry unless they immediately undergo eligibility 
determination and enrollment in a program.
    (c) The processes for identifying covered persons must ensure that:
    (1) Covered persons are identified at the point of entry to allow 
covered persons to take full advantage of priority of service; and
    (2) Covered persons are to be made aware of:
    (i) Their entitlement to priority of service;
    (ii) The full array of employment, training, and placement services 
available under priority of service; and
    (iii) Any applicable eligibility requirements for those programs 
and/or services.



Sec.1010.310  How will priority of service be applied?

    (a) Recipients of funds for qualified job training programs must 
implement processes in accordance with Sec.1010.300 to identify 
covered persons at the point of entry, whether in person or virtual, so 
the covered person can be notified of their eligibility for priority of 
service. Since qualified job training programs may offer various types 
of services including staff-assisted services as well as self-services 
or informational activities, recipients also must ensure that priority 
of service is implemented throughout the full array of services provided 
to covered persons by the qualified job training program.
    (b) Three categories of qualified job training programs affect the 
application of priority of service: universal access, discretionary 
targeting and statutory targeting. To obtain priority, a covered person 
must meet the statutory eligibility requirement(s) applicable to the 
specific program from which services are sought. For those programs that 
also have discretionary or statutory priorities or preferences pursuant 
to a Federal statute or regulation, recipients must coordinate providing 
priority of service with applying those other priorities, as prescribed 
in paragraphs (b)(2) and (b)(3) of this section.
    (1) Universal access programs operate or deliver services to the 
public as a whole; they do not target specific groups. These programs 
are required to provide priority of service to covered persons.
    (2) Discretionary targeting programs focus on a particular group, or 
make efforts to provide a certain level of service to such a group, but 
do not specifically mandate that the favored group be served before 
other eligible individuals. Whether these provisions are found in a 
Federal statute or regulation, priority of service will apply. Covered 
persons must receive the highest priority for the program or service, 
and non-covered persons within the discretionary targeting will receive 
priority over non-covered persons outside the discretionary targeting.
    (3) Statutory targeting programs are programs derived from a Federal 
statutory mandate that requires a priority

[[Page 479]]

or preference for a particular group of individuals or requires spending 
a certain portion of program funds on a particular group of persons 
receiving services. These are mandatory priorities. Recipients must 
determine each individual's covered person status and apply priority of 
service as described below:
    (i) Covered persons who meet the mandatory priorities or spending 
requirement or limitation must receive the highest priority for the 
program or service;
    (ii) Non-covered persons within the program's mandatory priority or 
spending requirement or limitation, must receive priority for the 
program or service over covered persons outside the program-specific 
mandatory priority or spending requirement or limitation; and,
    (iii) Covered persons outside the program-specific mandatory 
priority or spending requirement or limitation must receive priority for 
the program or service over non-covered persons outside the program-
specific mandatory priority or spending requirement or limitation.



Sec.1010.320  Will recipients be required to collect information and report on 

priority of service?

    Yes. Every recipient of funds for qualified job training programs 
must collect such information, maintain such records, and submit reports 
containing such information and in such formats as the Secretary may 
require related to the provision of priority of service.



Sec.1010.330  What are the responsibilities of recipients to collect and 

maintain data on covered and non-covered persons?

    (a) General requirements. Recipients must collect information in 
accordance with instructions issued by the Department.
    (1) Recipients must collect two broad categories of information:
    (i) For the qualified job training programs specified in paragraph 
(a)(2) of this section, information must be collected on covered persons 
from the point of entry, as defined in Sec.1010.300(a), and as 
provided in paragraph (b) of this section; and,
    (ii) For all qualified job training programs, including the programs 
specified in paragraph (a)(2) of this section, information must be 
collected on covered and non-covered persons who receive services, as 
prescribed by the respective qualified job training programs, as 
provided in paragraph (c) of this section.
    (2) For purposes of paragraph (a)(1) of this section, qualified job 
training programs that served, at the national level, 1,000 or more 
veterans per year for the three most recent years of program operations 
(currently the Wagner-Peyser, WIA Adult, WIA Dislocated Worker, WIA 
National Emergency Grant, and Senior Community Service Employment 
Programs) must collect information and report on covered entrants. The 
Trade Adjustment Assistance Program must collect information and report 
on covered entrants on the effective date of the next information 
collection requirement applicable to that program, whether that is for a 
renewal of an existing approved information collection or for approval 
of a new information collection.
    (3) For purposes of this section, covered persons at the point of 
entry are referred to as ``covered entrants.'' This group includes two 
further subgroups: veterans and eligible spouses as defined in Sec.
1010.110.
    (b) Collection and maintenance of data on covered entrants. In 
accordance with instructions issued by the Department, recipients of 
assistance for the programs specified in paragraph (a)(2) of this 
section must collect and report individual record data for all covered 
entrants from the point of entry.
    (c) Collection and maintenance of data on covered and non-covered 
persons who receive services. In accordance with instructions issued for 
individual qualified job training programs, all recipients must collect 
and maintain data on covered and non-covered persons who receive 
services, including individual record data for those programs that 
require establishment and submission of individual records for persons 
receiving services.
    (1) The information to be collected shall include, but is not 
limited to:

[[Page 480]]

    (i) The covered and non-covered person status of all persons 
receiving services;
    (ii) The types of services provided to covered and non-covered 
persons;
    (iii) The dates that services were received by covered and non-
covered persons; and;
    (iv) The employment outcomes experienced by covered and non-covered 
persons receiving services.
    (2)(i) Except as provided in paragraph (c)(2)(ii) of this section, 
for persons receiving services, recipients must apply the definitions 
set forth in Sec.1010.110 to distinguish covered from non-covered 
persons receiving services and, within covered persons, to distinguish 
veterans from eligible spouses.
    (ii) Until qualified job training programs adopt the definitions for 
covered and non-covered persons set forth at Sec.1010.110 through the 
publication of requirements pursuant to the Paperwork Reduction Act, 
recipients must collect data on the services provided to and the 
outcomes experienced by veterans (however defined) and non-veterans 
receiving services in accord with regulations, policies and currently 
approved information collections.
    (d) All information must be stored and managed in a manner that 
ensures confidentiality.

                       PARTS 1011-1099 [RESERVED]


[[Page 481]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 483]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2014)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Guidance (Parts 200--
                299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300-- 
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)

[[Page 484]]

       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)
        II  Recovery Accountability and Transparency Board (Parts 
                200--299)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600-- 3699)
    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)

[[Page 485]]

    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
   LXXXIII  Special Inspector General for Afghanistan 
                Reconstruction (Parts 9300--9399)

[[Page 486]]

    LXXXIV  Bureau of Consumer Financial Protection (Parts 9400--
                9499)
    LXXXVI  National Credit Union Administration (Parts 9600--
                9699)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
     XCVII  Council of the Inspectors General on Integrity and 
                Efficiency (Parts 9800--9899)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--99)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)

[[Page 487]]

      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)

[[Page 488]]

        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

[[Page 489]]

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

[[Page 490]]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

[[Page 491]]

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)

[[Page 492]]

        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)

[[Page 493]]

        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)

[[Page 494]]

      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)

[[Page 495]]

         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799)[Reserved]
            Subtitle C--Regulations Relating to Education
        XI  National Institute for Literacy (Parts 1100--1199)
       XII  National Council on Disability (Parts 1200--1299)

[[Page 496]]

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  U.S. Copyright Office, Library of Congress (Parts 
                200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)

[[Page 497]]

       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--599)

[[Page 498]]

         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)

[[Page 499]]

       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Health and Human Services (Parts 300--399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)

[[Page 500]]

        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399) 
                [Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)

[[Page 501]]

         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499) 
                [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

[[Page 503]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2014)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
Afghanistan Reconstruction, Special Inspector     22, LXXXIII
     General for
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII, L
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV, L
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII, L
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII

[[Page 504]]

Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Bureau of Ocean Energy Management, Regulation,    30, II
     and Enforcement
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazardous Investigation       40, VI
     Board
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              5, LXXXIV; 12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, I

[[Page 505]]

Defense Contract Audit Agency                     32, I
Defense Department                                2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99

[[Page 506]]

  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV

[[Page 507]]

Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A,
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 6, I; 8, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V

[[Page 508]]

Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department                               2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Bureau of Ocean Energy Management, Regulation,  30, II
       and Enforcement
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI

[[Page 509]]

  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Office of Workers' Compensation Programs        20, VII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Royalty Board                         37, III
  U.S. Copyright Office                           37, II
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII

[[Page 510]]

National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Offices of Independent Counsel                    28, VI
Office of Workers' Compensation Programs          20, VII
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Privacy and Civil Liberties Oversight Board       6, X
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Recovery Accountability and Transparency Board    4, II
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII, L
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV, L
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII, L
Saint Lawrence Seaway Development Corporation     33, IV

[[Page 511]]

Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
U.S. Copyright Office                             37, II

[[Page 512]]

Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 513]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations (CFR) that 
were made by documents published in the Federal Register since January 
1, 2009 are enumerated in the following list. Entries indicate the 
nature of the changes effected. Page numbers refer to Federal Register 
pages. The user should consult the entries for chapters, parts and 
subparts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult the 
annual edition of the monthly List of CFR Sections Affected (LSA). The 
LSA is available at www.fdsys.gov. For changes to this volume of the CFR 
prior to 2001, see the ``List of CFR Sections Affected, 1949-1963, 1964-
1972, 1973-1985, and 1986-2000'' published in 11 separate volumes. The 
``List of CFR Sections Affected 1986-2000'' is available at 
www.fdsys.gov.

                                  2009

                       (No regulations published)

                                  2010

20 CFR
                                                                   75 FR
                                                                    Page
Chapter VI
Chapter VI Heading revised.........................................63380
701 Authority citation revised.....................................63380
701.201 Revised....................................................63380
Chapter VIII
903.8 (a) and (b) revised; (c)(2)(i) through (vi) amended..........81455

                                  2011

20 CFR
                                                                   76 FR
                                                                    Page
Chapter VI
701 Authority citation revised.....................................82127
701.301 Undesignated center heading and section heading revised; 
        (a)(12) removed; (a)(13) through (16) redesignated as new 
        (a)(12) through (15).......................................82127
701.302 Added......................................................82127
701.501 Undesignated center heading and section added..............82128
701.502 Added......................................................82128
701.503 Added......................................................82128
701.504 Added......................................................82128
701.505 Added......................................................82129
Chapter VIII
901 Technical correction...........................................81362
901.0 Amended; eff. 5-2-11.........................................17769
901.1 (g) amended; (i), (j) and (k) added; eff. 5-2-11.............17769
901.10 (a) amended; eff. 5-2-11....................................17769
901.11 (e)(3) and (l) removed; (i), (j) and (k) redesignated as 
        (j), (k) and (l); (a), (e)(2)(ii), (f)(1)(ii), (h)(2), new 
        (l)(1), (2), (3) and (9) amended; (c), (d), (e) 
        introductory text, (1), (2)(i), (f)(1), (i), (iv), (2), 
        (g), new (j), new (k), new (l)(4) through (7) and (n) 
        revised; (e)(2)(iv), (v), (vi), (f)(3), (o) and (p) added; 
        eff. 5-2-11................................................17769
    (f)(1)(i) and (o) Examples 4 and 6 amended; (l)(4)(ii) revised
                                                                   81363
901.12 Removed; new 901.12 redesignated from 901.13; heading, (a), 
        (b), (d) and (e) revised; eff. 5-2-11......................17774
901.13 Redesignated as new 901.12; eff. 5-2-11.....................17774
901.20 (b) and (d) through (g) revised; (h) redesignated as (k); 
        new (h), (j) and (l) added; eff. 5-2-11....................17775
901.31 (a) and (c) revised; eff. 5-2-11............................17776
901.32 Amended; eff. 5-2-11........................................17776
901.47 Amended; eff. 5-2-11........................................17776
901.72 Added; eff. 5-2-11..........................................17776

[[Page 514]]

                                  2012

20 CFR
                                                                   77 FR
                                                                    Page
Chapter V
670.900 Revised....................................................22207
670.905 Revised....................................................22207
670.910 Revised....................................................22207
670.915 Revised....................................................22207
670.920 Removed....................................................22207
670.925 Removed....................................................22207
670.930 Removed....................................................22207
672 Added; eff. 4-16-12.............................................9129
Chapter VI
701 Authority citation revised.....................................37286
701.301 (a)(3) removed; (a)(5) amended.............................37286
702 Authority citation revised.....................................37286
702.413 Amended....................................................37286
702.414 (a)(1)(iv) revised.........................................37286
703 Authority citation revised.....................................37286
703.2 (b) revised..................................................37286
703.202 (b) amended................................................37286
703.203 (a)(1) revised.............................................37286
703.204 (c)(1) revised.............................................37286
725 Authority citation revised.....................................37286
725.101 (a)(17) revised............................................37286
726 Authority citation revised.....................................37286
726.6 Revised......................................................37286
726.301 (a) revised................................................37287
726.307 (a) amended................................................37287

                                  2013

20 CFR
                                                                   78 FR
                                                                    Page
Chapter VI
718 Authority citation revised.....................................59114
    Technical correction...........................................60686
718.1 Revised......................................................59114
718.2 Revised......................................................59114
718.3 (a) revised..................................................59114
718.5 Added........................................................35554
    Regulation at 78 FR 35554 withdrawn............................53645
718.101 (a) revised................................................35555
    Regulation at 78 FR 35555 withdrawn............................53645
718.102 Revised....................................................35555
    Regulation at 78 FR 35555 withdrawn............................53645
718.202 Revised....................................................35556
    Regulation at 78 FR 35556 withdrawn............................53645
    (a)(3) revised.................................................59114
718.205 Revised....................................................59114
718.301 Revised....................................................59114
718.303 Removed....................................................59114
718.304 Revised....................................................35556
    Regulation at 78 FR 35556 withdrawn............................53645
718.305 Revised....................................................59114
718.306 Removed....................................................59115
718 Appendix A.....................................................35556
    Regulation at 78 FR 35556 withdrawn............................53645
    Appendix C introductory text revised...........................59115
725 Authority citation revised.....................................35558
    Regulation at 78 FR 35558 withdrawn............................53645
    Technical correction...........................................60686
725.1 Revised......................................................59115
725.2 Revised......................................................59117
725.101 (a)(1), (2), (4), (32)(i) through (iv) and (b) amended.....59117
725.201 (a) revised; (b) removed; (c) and (d) redesignated as (b) 
        and (c)....................................................59117
725.212 (a)(3) introductory text republished; (a)(3)(i) and (ii) 
        revised....................................................59117
725.218 (a) introductory text republished; (a)(1) and (2) revised 
                                                                   59117
725.222 (a)(5) introductory text republished; (a)(5)(i) and (ii) 
        revised....................................................59118
725.309 Revised....................................................59118
725.406 (a), (b), (c) and (e) revised..............................35558
    Regulation at 78 FR 35558 withdrawn............................53645
725.418 Revised....................................................59118
Chapter IX
1001.160--1001.167 (Subpart G) Added; eff. 5-10-13.................15290

                                  2014

 (No regulations published for January 1, 2014, through April 1 , 2014)


                                  [all]