[Federal Register Volume 73, Number 210 (Wednesday, October 29, 2008)]
[Rules and Regulations]
[Pages 64402-64434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24917]



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Part II





Department of Labor





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Employment and Training Administration



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29 CFR Part 29



Apprenticeship Programs, Labor Standards for Registration, Amendment of 
Regulations; Final Rule

  Federal Register / Vol. 73, No. 210 / Wednesday, October 29, 2008 / 
Rules and Regulations  

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DEPARTMENT OF LABOR

Employment and Training Administration

29 CFR Part 29

RIN 1205-AB50


Apprenticeship Programs, Labor Standards for Registration, 
Amendment of Regulations

AGENCY: Employment and Training Administration, Labor.

ACTION: Final rule.

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SUMMARY: The Department of Labor (DOL or Department) is issuing this 
final rule to update regulations that implement the National 
Apprenticeship Act of 1937. 29 U.S.C. 50. DOL issued a notice of 
proposed rulemaking (NPRM) on December 13, 2007, outlining proposed 
updates to labor standards, policies and procedures for the 
registration, cancellation and deregistration of apprenticeship 
programs, apprenticeship agreements, and administration of the National 
Apprenticeship System. 72 FR 71020, Dec. 13, 2007.

DATES: Effective date: The final rule will become effective December 
29, 2008.

FOR FURTHER INFORMATION CONTACT: John Ladd, Administrator, Office of 
Apprenticeship, 200 Constitution Avenue, NW., Room N5311, Washington, 
DC 20210, e-mail [email protected]; Telephone (202) 693-2796 (this is 
not a toll-free number) or (877) 889-5627 (TTY/TDD).

SUPPLEMENTARY INFORMATION: This preamble is divided into three 
sections. Section I provides general background information on the 
development of the final rule. Section II discusses the comments and 
regulatory changes in the final rule. Section III covers the 
administrative requirements for this final rule as mandated by statute 
and executive order.

I. Background

    On December 13, 2007, the Department published an NPRM (72 FR 
71020, Dec. 13, 2007) proposing to revise the regulations that 
implement the National Apprenticeship Act of 1937. We initially invited 
comments for a 60-day period through February 12, 2008. Several 
commenters submitted requests for an extension of the comment period. 
In response, we published a notice (73 FR 7693, Feb. 11, 2008) 
extending the comment period by 30 days. The comment period closed on 
March 12, 2008.
    Unique, individual comments received during the comment period 
following publication of the NPRM have been posted on 
www.regulations.gov. Although we considered all comments, duplicate 
copies of comments were not posted.
    The National Apprenticeship Act of 1937 authorized DOL to formulate 
and promote the furtherance of labor standards necessary to safeguard 
the welfare of apprentices, to extend the application of such standards 
by encouraging their inclusion in contracts of apprenticeship, to bring 
together employers and labor for the formulation of programs of 
apprenticeship, and to cooperate with State agencies engaged in the 
formulation and promotion of standards of apprenticeship.
    The Department promulgated regulations for implementing the 
National Apprenticeship Act in 1977. The regulations govern the 
National Apprenticeship System in which the Department, State agencies, 
industry leaders, employers, employer associations, labor-management 
organizations (primarily consisting of labor organizations and 
employers), and educational institutions collaborate, develop, operate, 
and oversee apprenticeship programs that draw on the skills and 
knowledge that business and industry needs from its employees, to 
ensure that apprentices develop up-to-date and relevant skills. In the 
30 years since, the Department and its partners in the National 
Apprenticeship System have recognized that technological advances, 
demographic changes, and globalization have significantly altered the 
context in which apprenticeship programs operate. The Department and 
its partners recognize that for registered apprenticeship to keep pace 
with these changes, and to continue apprenticeship's vital role in 
developing a skilled, competitive workforce, the regulatory framework 
for registration of apprenticeship programs and administration of the 
National Apprenticeship System must be updated. For example, many 
program sponsors have requested more flexibility in the requirements 
for provision of related technical instruction. Other program sponsors, 
particularly in industries that have not traditionally used registered 
apprenticeship, have sought flexibility in the requirements for length 
of time in the on-the-job learning component so that apprentices could 
progress toward program completion based on demonstration of 
competencies. The Government Accountability Office's August 2005 
report, ``Registered Apprenticeship Programs: Labor Can Better Use Data 
to Target Oversight,'' and the Office of Management and Budget's 
Program Assessment Rating Tool (PART) review of Registered 
Apprenticeship, have emphasized the need to improve program quality and 
accountability in the National Apprenticeship System.
    The December 13, 2007 NPRM proposed to revise 29 CFR part 29 based 
on these developments and in consultation with the Advisory Committee 
on Apprenticeship (ACA), the National Association of State and 
Territorial Apprenticeship Directors (NASTAD), and State Apprenticeship 
Agencies. This final rule implements changes to 29 CFR part 29 that 
will increase flexibility, enhance program quality and accountability, 
and promote apprenticeship opportunity in the 21st century, while 
continuing to safeguard the welfare of apprentices. In addition to the 
specific changes discussed below, we have made minor editorial changes 
throughout the final rule.
    The final rule takes effect on December 29, 2008. However, States 
will have up to a 2-year period in which to make the changes to State 
law, regulation and/or policy needed to come into compliance with this 
final rule before having to apply for continued recognition under Sec.  
29.13(c). The Department will work with States to make as seamless as 
possible the transition from State laws recognized under current 
regulations to State laws recognized under the final rule.

II. Discussion of the Comments and Regulatory Changes

Summary of Comments

    The Department received 2,660 submissions commenting on the NPRM by 
the close of the comment period. All comments were carefully reviewed. 
We found 2,437 to be cover letters, form letters or duplicates, a 
preponderance of which were from members of a single employer 
association supporting the proposed regulatory changes. Of the 223 non-
duplicative comments, the majority were from labor organizations and 
employer associations that sponsor registered apprenticeship programs, 
and state government entities. All relevant comments are discussed 
below. In response to these comments we made several substantive 
changes which are discussed below.
    Twenty-five commenters expressed general support for the NPRM and 
agreed that the proposed changes will update, improve, and advance the 
mission of the National Apprenticeship System to meet the needs of 
today's industry and economy. Other commenters generally commended the 
Department for improving and

[[Page 64403]]

promoting registered apprenticeship and the National Apprenticeship 
System.
    Twenty-five commenters generally preferred the current regulatory 
framework for registered apprenticeship over the proposed changes, 
stating that the current regulations work well and that the proposed 
changes are unnecessary. We also received comments indicating 
disapproval of the proposed changes due to concerns over the potential 
impact on State agencies. Additional commenters suggested that the 
proposed changes may impact certain apprenticeship programs more than 
others. A few commenters disapproved of the proposed changes due to the 
potential implications for apprentices.

Discussion of Comments

Purpose and Scope (Sec.  29.1)
    A few commenters agreed with the addition to the Purpose and Scope 
of the phrase ``promote apprenticeship opportunity.'' They noted that 
this addition is a fundamental objective of the National Apprenticeship 
Act and should be expressly included in DOL regulations.
    Response: After review of the comments we will promulgate the rule 
as proposed.
Definitions (Sec.  29.2)
    Section 29.2 clarifies and redesignates existing definitions and 
establishes new definitions for certain terms used in the registration 
of apprenticeship programs and in the ongoing operations of the 
National Apprenticeship System. We proposed to carry forward the 
following existing definitions for terms defined in the original 
regulations: ``administrator,'' ``apprentice,'' ``apprenticeship 
program,'' ``cancellation,'' ``Department,'' ``employer,'' ``Federal 
purposes,'' ``registration of an apprenticeship agreement,'' 
``registration of an apprenticeship program,'' ``sponsor,'' and 
``State.'' Accordingly, we did not invite comments on these terms. 
Similarly, the final rule carries forward the definitions for these 
terms, as contained in the existing regulations. Of the proposed new 
and amended definitions, we did not receive comments on the definitions 
for ``Office of Apprenticeship,'' ``Registration Agency,'' ``technical 
assistance,'' and ``State office.'' We made no changes to the proposed 
definitions of these terms.
    We received one comment about the definitions in general. The 
commenter argued that the definitions in Sec.  29.2 would require State 
Apprenticeship Agencies to control and direct State Apprenticeship 
Councils, thus reversing traditional authority without any clear 
explanation of why the Department wants to change the council-agency 
relationship. The commenter also asserted that the definitions are an 
unauthorized intrusion on a State's legislative rights and priorities.
    Response: We have determined that State Apprenticeship Agencies are 
the appropriate entities to receive the Department's grant of authority 
to register apprenticeship programs and apprentices for Federal 
purposes. For reasons enumerated below, we require the State 
Apprenticeship Agency to determine the role of the State Apprenticeship 
Council. Under the existing regulatory scheme, the Department's 
oversight of the National Apprenticeship System has been complicated by 
the fact that States in which the Registration Agencies are State 
Apprenticeship Councils vary considerably in their policies and 
procedures for the administration of registered apprenticeship for 
Federal purposes. For example, we have found it difficult to hold State 
Apprenticeship Councils accountable for conformity with the 
requirements of part 29 because the Councils are sometimes comprised of 
independent, appointed individuals, who may not be answerable to the 
State government agency that actually operates the daily functions of 
registered apprenticeship for Federal purposes in the State. In another 
case, the State Apprenticeship Council's limited involvement in the 
full time operations of the State's registered apprenticeship 
operations has impeded the Department's working relationship with the 
State Apprenticeship Council. In other instances, State Apprenticeship 
Councils have not made determinations about approval of apprenticeship 
program standards in a timely manner. In order to achieve consistency 
within the National Apprenticeship System for the promotion of 
registered apprenticeship opportunities and for the registration of 
apprenticeship standards that meet the requirements of this part, we 
have determined that the relationship between the Federal government 
and the entities that act on our behalf must be between two government 
agencies: DOL and the cabinet-level government agency in each State's 
government that operates and manages the functions of registered 
apprenticeship in that State. At the same time, we recognize the 
considerable value that State Apprenticeship Councils provide for the 
promotion and establishment of apprenticeship programs. State 
Apprenticeship Council members are often closely associated with 
apprenticeship program sponsors and can directly facilitate linkages 
between apprentices and program sponsors. As explained below in the 
discussion of Sec.  29.13(a)(2), States seeking recognition from the 
Department are still required to establish State Apprenticeship 
Councils for advisory and or regulatory purposes. Under the revised 
regulatory framework, where a State has been ``recognized,'' the State 
Apprenticeship Council must operate at the direction of the State 
Apprenticeship Agency. Having given full consideration to the general 
comment about the impact of the proposed definitions on the 
relationship between State Apprenticeship Councils and State 
Apprenticeship Agencies, we are promulgating the definitions for State 
Apprenticeship Agency and State Apprenticeship Council as proposed.
``Apprenticeship Committee (Committee)''
    Five commenters addressed the proposed definition of 
``apprenticeship committee,'' which clarified that an apprenticeship 
agreement is between an apprentice and either the apprentice's program 
sponsor, or an apprenticeship committee acting as an agent for the 
program sponsor. One commenter supported the definition as proposed. 
Other commenters noted that use of the term ``worker'' may be confusing 
in the parenthetical notation in paragraph (b), which defines a non-
joint committee as ``a unilateral or group non-joint (may include 
workers) committee [which] has employer representatives but does not 
have a bona fide collective bargaining agent as a participant.'' The 
commenter suggested that for consistency, the term ``employee'' should 
replace the term ``worker.'' Another commenter suggested that the 
incumbent workforce of a program sponsor is a stakeholder that should 
be included in the definition of ``apprenticeship committee,'' 
regardless of the status of a collective bargaining agreement in a 
program sponsor's workplace. Another commenter recommended removing the 
terms ``non-joint,'' in paragraph (b), and ``joint'' in paragraph (a), 
which specifies that ``a joint committee is composed of equal number of 
representatives of the employer(s) and of the employees represented by 
a bona fide collective bargaining agent.'' The commenter suggested the 
phrase, ``unilateral or group, which shall include equal numbers from 
employer(s) and employees.'' Another commenter suggested that the 
proposed change in which an apprenticeship committee acts

[[Page 64404]]

as an agent of the apprenticeship program sponsor, is not the 
apprenticeship program sponsor, and is to be subordinate to the 
apprenticeship program sponsor, appears to be inconsistent with the 
core concepts of the Employee Retirement Income Security Act of 1974 
(ERISA).
    Response: We agree with the suggestion that the use of the term 
``workers,'' in place of ``employees,'' may cause confusion, and so we 
have changed the definition by replacing ``workers'' with ``employees'' 
in paragraph (2). We do not agree with the suggestion to delete the 
terms ``joint and non-joint.'' The commenters suggested replacement 
wording does not adequately provide the flexibility needed to address 
the variety of circumstances faced by apprenticeship committees across 
the nation. Nor are we convinced that the terms ``joint and non-joint'' 
are problematic. These terms are well-recognized and used throughout 
the National Apprenticeship System. Accordingly, we have kept the terms 
``joint and non-joint.'' We also do not agree with the suggestion that 
a program sponsor's incumbent workforce should be required members of 
an apprenticeship committee. The determination to include employees on 
an apprenticeship committee is most appropriately addressed by the 
program sponsor, not DOL. As mentioned, one comment noted that the 
definition of ``apprenticeship committee'' may be inconsistent with 
ERISA because it might be read as requiring the apprenticeship 
committee to always act in the sponsor's interest, rather than in the 
interest of the participants when the committee is carrying out 
fiduciary responsibilities. Although we do not agree with this reading 
of the definition, we have modified the definition to avoid confusion 
on this point.
``Certification or Certificate''
    Three commenters expressed concern over the potential effect of 
paragraph (a) of the proposed definition of ``certification or 
certificate'' on individual programs that are currently using State-
approved industry standards. Paragraph (a) provides that in order to 
receive certification from the Office of Apprenticeship, national 
guidelines for apprenticeship standards which are developed by a 
national committee or organization for policy or guideline use by local 
affiliates must conform to the standards of apprenticeship set forth in 
Sec.  29.5. Commenters stated that standards approved by State 
Apprenticeship Agencies are more trade-specific and protective of 
apprentices' safety than any proposed national guidelines for 
apprenticeship standards. They also stated that it would be problematic 
to allow an outside ``national committee or organization'' to dictate 
the direction of individual programs and concluded that national 
guidelines for apprenticeship standards will ``erode apprenticeship 
standards by trade, and blend multiple trades into one standard.'' In 
addition, a few commenters questioned who would set the standards used 
in national guidelines for apprenticeship standards.
    Response: These comments appear to reflect a misunderstanding of 
the current definitions of ``certification or certificate.'' The 
purpose of national guidelines for apprenticeship standards, as 
established by the definition of ``certification'' in the existing 
regulations, is to provide policy and guidance to local affiliates of 
national organizations in developing standards for approval and 
registration. National Guideline Standards are developed by national 
committees or organizations, joint or unilateral, and are certified by 
DOL's Office of Apprenticeship as substantially conforming to the 
requirements of 29 CFR parts 29 and 30. When local affiliates develop 
local standards for registration, even though the local standards may 
be based upon the organizations' National Guideline Standards, they 
must meet all the requirements of and be approved by the Registration 
Agency in that State. Thus, the approval of national guidelines for 
apprenticeship standards in no way precludes a State Apprenticeship 
Agency or a local sponsor from developing apprenticeship standards that 
are more trade-specific or protective. This flexibility does not, 
however, authorize a State Apprenticeship Agency to develop or approve 
standards that improperly restrict registered apprenticeship 
opportunities. Therefore, we are promulgating the definition of 
``certification or certificate'' as proposed.
``Competency''
    Sixteen commenters weighed in on the proposed definition of 
``competency,'' which means ``the attainment of manual or technical 
skills and knowledge, as specified by an occupational standard.'' Many 
expressed apprehension over the implications of the definition, 
suggesting that it does not clearly articulate how competency will be 
measured (e.g., on a set of validated industry and trade-specific 
standards). Others noted that the definition does not mandate specific 
types of training (e.g., on-the-job, classroom) that are often critical 
to meet industry accepted guidelines for journey-level status. Finally, 
others raised concerns that with this definition, journeyworker status 
will be determined in a subjective manner, without strict standards for 
objective program administration.
    Response: We agree that the definition needs to address the 
measurement of competency with greater specificity. Therefore, we have 
revised the proposed definition to provide for the ``attainment of 
manual, mechanical or technical skills and knowledge, as specified by 
an occupational standard and demonstrated by an appropriate written and 
hands-on measurement of proficiency.'' To align with the criteria for 
apprenticeable occupations established under Sec.  29.4(c), the final 
rule adds the term ``mechanical'' as a descriptor of the skills and 
knowledge that are attained.
    Regarding concerns that the definition does not require specific 
types of training and that journeyworker status will be determined in a 
subjective manner, we have concluded that apprenticeship programs need 
flexibility when setting the requirements for training and the 
attainment of journeyworker status, so that the program standards can 
take into account the circumstances of particular occupations and 
programs. Additionally, we note that the requirement for an 
apprenticeable occupation to include on-the-job learning as specified 
in Sec.  29.4(c), and the requirements for apprenticeship program 
standards to include on-the-job learning as specified in Sec.  
29.5(b)(2) and related instruction specified in Sec.  29.5(b)(4), 
address concerns regarding specific training. Therefore, we do not 
adopt the comments that favor a more prescriptive approach to those 
matters in the definition of ``competency.''
``Completion Rate''
    Several commenters requested a formal definition of the term 
``completion rate,'' stating that further guidance was necessary for 
evaluating program performance based on a completion rate.
    Response: We agree that a definition of ``completion rate'' is 
necessary to facilitate compliance with the requirement in Sec.  29.6 
to evaluate the performance of apprenticeship programs, which is a 
critical component of strengthening accountability for program 
outcomes. The final rule adds a definition for the term ``completion 
rate'' to mean ``the percentage of an apprenticeship cohort who receive 
a certificate of apprenticeship completion within 1 year of the 
projected

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completion date. An apprenticeship cohort is the group of individual 
apprentices registered to a specific program during a 1 year time 
frame.'' This definition is consistent with the methodology used by 
other Federal employment and training programs, which measure program 
outcomes by calculating rates of program participants who successfully 
achieve a specific outcome such as entering employment or retaining 
employment. Consistency in methodology will minimize the implementation 
burden on Registration Agencies and will further align registered 
apprenticeship with other workforce investment programs.
``Electronic Media''
    Although commenters did not provide any comments specific to the 
proposed definition for ``electronic media,'' many raised concerns that 
the use of electronic media in the proposed revision to related 
instruction could supplant, reduce, or eliminate an apprentice's 
interface with an instructor in a lab or classroom setting. They 
emphasized the importance of classroom and hands-on learning for the 
successful acquisition of skills and knowledge necessary for completion 
of an apprenticeship program.
    Response: We recognize the validity of this concern, as addressed 
further in the discussion of Sec.  29.5(b)(4). However, we have 
determined that the inclusion of electronic media in the definition of 
``related instruction'' is necessary to align the National 
Apprenticeship System with technological advances in the delivery of 
related instruction. We have made no change to the proposed definition 
of ``electronic media.''
``Interim Credential''
    Some commenters suggested that the proposed definition for 
``interim credential,'' which is ``a credential issued by the 
Registration Agency, upon the request of the sponsor, as certification 
of competency attainment by an apprentice,'' does not sufficiently 
include requirements for the recipient to meet an objective, external 
standard associated with the subject matter for which an interim 
credential is issued. Others asserted that the definition of ``interim 
credential'' could diminish the meaning and significance of the status 
of ``journeyworker'', and that the use of interim credentials in the 
National Apprenticeship System may serve as a disincentive to 
completing an apprenticeship program.
    Response: We recognize these concerns and address them below in our 
discussion of the requirements for program standards in Sec.  29.5(b). 
We have made no change to the proposed definition of ``interim 
credential.''
    Issuance of interim credentials will be determined by the program 
sponsor's choice of approach for an apprentice's progression through an 
apprenticeship program: Competency-based, time-based, or hybrid. 
Program sponsors must identify and define all interim credentials in 
the program standards that are registered with the Registration Agency. 
Interim credentials may be issued only for industry-recognized 
components of an apprenticeable occupation. Therefore, if an 
apprenticeship program's standards do not include provisions for 
issuance of interim credentials for specific components of an 
apprenticeable occupation, the Registration Agency with which the 
program is registered may not issue interim credentials to apprentices 
registered with that program.
    We reiterate that interim credentials are issued by the 
Registration Agency, upon request of the appropriate sponsor, as 
certification of an apprentice's attainment of competency. Further, the 
regulations do not require program sponsors to include interim 
credentials in their program standards, nor do they require sponsors to 
request that a Registration Agency issue interim credentials to 
apprentices registered in their apprenticeship programs. The Department 
also recognizes that some Registration Agencies may find the issuance 
of interim credentials to be unduly burdensome and beyond their 
capabilities. Therefore, Registration Agencies, other than the Office 
of Apprenticeship, may opt not to offer this additional service.
    We have concluded that the revised regulatory framework does not 
detract from the overall goal of the National Apprenticeship System to 
support and enable apprentices to complete an apprenticeship program. 
Through the authorization of interim credentials, the National 
Apprenticeship System recognizes that some industries and occupations 
are more amenable to an incremental recognition of an apprentice's 
increasing skills, knowledge, and abilities. In such industries the use 
of interim credentials can, thereby, afford multiple opportunities for 
apprentices to grow and expand their knowledge and their capacity to 
meet current, new, and emerging industry advances. Use of interim 
credentials also recognizes the fact that not all apprentices will 
complete their apprenticeship programs and offers opportunities for 
recognition of what these individuals have learned. Therefore, interim 
credentials will also enable apprentices to obtain portable credentials 
commensurate with the skills and competencies acquired and demonstrated 
throughout an apprenticeship. Notwithstanding the value of interim 
credentials, the issuance of a certificate of completion of 
apprenticeship, and the associated ``journeyworker'' status, remains 
the ultimate goal for the National Apprenticeship System.
``Journeyworker''
    Ten comments were submitted on the proposed definition of 
``journeyworker.'' One commenter requested inserting the word 
``abilities'' to the definition to read ``a worker who has attained a 
level of skills, abilities, and competencies recognized within an 
industry,'' asserting that use of the term ``abilities'' provided a 
more thorough recognition of a journeyworker's qualifications. Multiple 
commenters recommended using industry standard definitions for 
``journeyworker,'' asserting that permitting employers to recognize 
other definitions would leave the National Apprenticeship System open 
to abuse. Others asserted that by expanding the term to refer to a 
mentor, technician, specialist or other skilled worker gives the 
employer the authority to determine journeyworker status. One commenter 
argued for retention of the term ``journeyman,'' because in the 
traditional sense it is not and has not been gender-specific, and that 
it refers to rank or status in a skilled trade.
    Response: We agree with the suggestion to expand the definition to 
include ``abilities,'' and have revised the definition accordingly. We 
disagree with the assertion that by granting individual employers the 
authority to designate journeyworker status, the term ``journeyworker'' 
will be subject to abuse in the National Apprenticeship System. 
Currently, program sponsors designate an individual as a journeyworker 
when that individual has sufficient skills, abilities, and competencies 
to be recognized by the employer as a journeyworker. The revised 
regulatory framework carries forward this approach currently used in 
the National Apprenticeship System. With regard to the use of the term 
``journeyworker,'' the Department of Labor is committed to avoiding the 
use of terms that are or may appear to be gender-specific, even if the 
historic usage of the term has not been so. We disagree with the 
assertion that the term journeyman is not gender-specific. Accordingly, 
the final rule retains the term ``journeyworker.''

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``Provisional Registration''
    Several comments on proposed revisions to Sec.  29.3(g) and Sec.  
29.3(h) regarding provisional registration indicate that the proposed 
definition of ``provisional registration'' did not adequately specify 
the process by which a provisionally registered program would receive 
permanent registration, continuance of provisional registration, or 
rescission of registration.
    Response: We agree with these comments and have clarified the 
requirements by expanding the definition of ``provisional 
registration'' to refer to the relevant criteria in Sec.  29.3(g) and 
Sec.  29.3(h), which provide for provisional registration and review of 
provisionally registered programs. These additions will avoid any 
ambiguity between the proposed definition of provisional registration 
in Sec.  29.2, and the subsequent opportunity for additional review 
and/or removal of the provisional status after the first full training 
cycle. Accordingly, in the final rule ``provisional registration'' is 
defined to mean, ``the 1-year initial approval of newly registered 
programs that meet the required standards for program registration, 
after which program approval may be made permanent, continued as 
provisional, or rescinded following a review by the Registration 
Agency, as provided for in the criteria described in Sec.  29.3(g) and 
Sec.  29.3(h).''
``Quality Assurance Assessment''
    In their discussion of program performance standards in proposed 
Sec.  29.6, some commenters recommended establishing a clear definition 
of ``quality assurance assessment.''
    Response: We agree that Sec.  29.6 will be improved by adding a 
formal definition for ``quality assurance assessment,'' so that 
programs are assessed consistently and fairly across the National 
Apprenticeship System. Accordingly, in the final rule ``quality 
assurance assessment'' means, ``a comprehensive review conducted by a 
Registration Agency regarding all aspects of an apprenticeship 
program's performance, including but not limited to determining if 
apprentices are receiving: On-the-job training in all phases of the 
apprenticeable occupation; scheduled wage increases consistent with the 
registered standards; related instruction through appropriate 
curriculum and delivery systems; and that the Registration Agency is 
receiving notification of all new registrations, cancellations, and 
completions as required in this part.'' This definition codifies the 
Office of Apprenticeship's existing practice of reviewing programs for 
quality based on the factors described above.
``Registration Agency''
    A commenter asserted that by expanding the definition of 
``Registration Agency'' to include registration of apprentices and 
programs, providing technical assistance, and conducting reviews for 
compliance with parts 29 and 30, and quality assurance assessments, the 
Department is attempting to retain the services of a State 
Apprenticeship Agency without Federal funding or State legislative 
approval.
    Response: We disagree with these assertions. The definition of 
``Registration Agency'' codifies existing practice in the National 
Apprenticeship System in which a Registration Agency, whether it is the 
Office of Apprenticeship or a recognized State Apprenticeship Agency, 
provides guidance and assistance to help program sponsors comply with 
this part; reviews registered programs; and registers apprentices and 
programs. We view these functions as necessary to properly administer 
the National Apprenticeship System. Further, the definition is intended 
to emphasize consistency across the National Apprenticeship System 
regarding the types of support and assistance that registered 
apprenticeship program sponsors should receive from a Registration 
Agency, regardless of their geographic location. It should also be 
noted that State Apprenticeship Agency recognition as a Registration 
Agency, for Federal purposes, is voluntary. We have made no change to 
the proposed definition of ``Registration Agency.''
``Related Instruction''
    Several commenters noted that the proposed separation of 
apprenticeship's theoretical instruction into two terms, ``related 
technical instruction'' and ``supplemental instruction,'' creates undue 
complications. On the other hand, a commenter praised the addition of 
``supplemental instruction,'' stating that such instruction will 
increase opportunities for learning, as well as provide additional 
opportunities to create and ensure equitable classroom and worksite 
environments. Other commenters asserted that ``related instruction'' 
should not be limited to ``core'' requirements. Further, the commenters 
noted that safety processes like CPR/first-aid training may be part of 
a related training for many apprenticeable occupations and expressed 
concern that valuable training would be marginalized.
    Response: We agree that the commenters have raised valid concerns 
and we have therefore deleted the proposed definition of ``supplemental 
instruction.'' Our intent in separating the two terms was to clarify 
that instruction specific to a particular occupation is ``related 
instruction,'' and instruction that is relevant but not necessarily 
occupationally-specific is ``supplemental instruction.'' However, we 
recognize that the proposed elements of supplemental instruction, such 
as job site management, leadership, communications, first-aid/CPR, 
field trips, and new technologies/processes, and in particular those 
pertaining to health and safety, have been long-standing facets of the 
term ``related instruction.'' The final rule retains the existing term 
``related instruction'' and thus carries forward existing practice in 
the National Apprenticeship System which incorporates the components of 
the proposed definition of ``supplemental instruction.'' We have also 
deleted the term ``core'' from the definition of ``related 
instruction,'' to indicate that all components of related instruction 
that are related to the occupation are important to an apprenticeship 
program, whether or not they are occupation-specific. We have also 
added a comma after the phrase ``such instruction may be given in a 
classroom,'' to make the definition consistent with the substantive 
provisions in Sec.  29.5(b)(4). Therefore, in the final rule, ``related 
instruction'' means, ``an organized and systematic form of instruction 
designed to provide the apprentice with the knowledge of the 
theoretical and technical subjects related to the apprentice's 
occupation. Such instruction may be given in a classroom, through 
occupational or industrial courses, or by correspondence courses of 
equivalent value, electronic media, or other forms of self-study 
approved by the Registration Agency.''
``State Apprenticeship Agency''
    We received two comments on the definition of ``State 
Apprenticeship Agency.'' One commenter stated that the proposed 
definition of ``State Apprenticeship Agency'' would allow for the State 
Apprenticeship Agency to assume the powers of the State Apprenticeship 
Council. The other commenter sought clarification on the proposed 
definition.
    Response: The proposed definition of ``State Apprenticeship 
Agency'' as ``an agency of a State government that has responsibility 
and accountability for apprenticeship within the State,'' reflects the 
Department's determination

[[Page 64407]]

that only State government entities should be recognized as 
Registration Agencies, in order to ensure accountability for oversight 
and management of a State's apprenticeship system for Federal purposes. 
As discussed above, where a State Apprenticeship Agency has been 
``recognized,'' the State Apprenticeship Agency must establish and 
maintain a State Apprenticeship Council. Additionally, as explained in 
the discussion of Sec.  29.13(a)(2), we have clarified that the Council 
operates at the direction of the State Apprenticeship Agency. 
Therefore, we have made no changes to the proposed definition of 
``State Apprenticeship Agency'' nor to the State Apprenticeship 
Agency's role as the only entity authorized to register and oversee 
apprenticeship programs and agreements for Federal purposes.
``State Apprenticeship Council''
    Two commenters questioned if the definition of ``State 
Apprenticeship Council'' would mean that the Council would only serve 
an advisory role rather than a regulatory role.
    Response: Our intent in the proposed rule was to provide that the 
State Apprenticeship Council could serve in either an advisory role or 
regulatory role. As explained further in the discussion of Sec.  
29.13(a)(2), we have clarified that a State Apprenticeship Council 
operates at the direction of the State Apprenticeship Agency. Depending 
on how this direction is exercised, a State Apprenticeship Council 
could serve either a regulatory or an advisory role. The requirements 
for operation of a State Apprenticeship Council are set forth in 
Sec. Sec.  29.13(a)(2) and (b)(3). We have made no change to the 
proposed definition of ``State Apprenticeship Council.''
``Transfer''
    Several commenters noted that the proposed revisions regarding 
apprentice transfers in Sec.  29.5(b) and the proposed new definition 
of ``transfer'' in Sec.  29.2 raise questions about approval and 
consent for transfer and the potential impact on apprenticeship program 
sponsors. Several commenters questioned the need for apprentices to 
initiate requests for transfers, asserting that such latitude could 
enable apprentices to transfer registration without regard to negative 
impact on program sponsors. Other commenters suggested that program 
sponsors could use the provisions of this definition to transfer an 
apprentice to another program or to another employer without the 
apprentice's consent, thereby potentially negatively impacting the 
safety and welfare of the apprentice.
    Response: We do not foresee that the transfer of apprenticeship 
registration from one program to another or from one employer to 
another would occur frequently or on a regular basis. The intent of 
this provision is to provide flexibility for an apprentice to continue 
his or her apprenticeship in changing circumstances, such as the need 
for geographic relocation for personal reasons. However, we agree that 
all parties to the transfer must be in agreement in order to avoid 
potential negative impacts. Accordingly, we have revised the definition 
to clarify that in order for a transfer to occur, the affected parties 
(i.e., the apprentice and each apprenticeship committee or program 
sponsor) must reach agreement regarding the shift of the apprentice's 
registration from one program to another or from one employer within a 
program to another employer within that same program.
Eligibility and Procedure for Registration of an Apprenticeship Program 
(Sec.  29.3)
    This section addresses the criteria and process used by a 
Registration Agency to register apprenticeship programs. In general, 
the comments we received supported the proposed changes which were 
designed to ensure high quality for registered apprenticeship programs, 
assist program sponsors through early intervention and technical 
assistance, and foster closer working relationships between the 
apprenticeship sponsors and Registration Agencies.
Resources
    Several commenters raised concerns about the adequacy of the 
resources available to the DOL and the Office of Apprenticeship for 
follow through requirements pertaining to provisional registration. Two 
commenters asked who would pay for technical assistance provided to new 
programs.
    Response: As under current regulations, the resources necessary to 
carry out the requirements of Sec.  29.3 would be the responsibility of 
the Registration Agency, including provision of technical assistance. 
States seeking registration authority for Federal purposes must be 
prepared to provide resources necessary for these responsibilities.
Provisional Registration
    Proposed Sec.  29.3(g) is a new provision which establishes 
provisional approval for 1 year of new programs that the Registration 
Agency preliminarily determines comply with part 29. Most commenters 
supported the concept of provisional registration for new programs, but 
expressed concern that DOL currently appears to be understaffed and 
would not have adequate resources to perform the reviews required at 
the end of a program's first year to determine if the program should 
receive full recognition. Some commenters asserted that the 
determination to grant provisional program approval, regardless of 
length, belongs to State Apprenticeship Agencies.
    Response: As discussed in the NPRM, the ``provisional 
registration'' concept was added to enhance monitoring of the 
performance of apprenticeship programs registered for Federal purposes 
by the Office of Apprenticeship and recognized State Apprenticeship 
Agencies (i.e., the Registration Agencies). As we have repeatedly 
emphasized, the States derive any authority they exercise, for Federal 
purposes, from the recognition accorded by the Department. Therefore, 
provisional program approval does not impinge on State authority.
    We recognize that adequate resources are required to successfully 
address the additional workload associated with provisional 
registration procedures. Accordingly, we are realigning resources to 
provide these services in States where the Office of Apprenticeship 
serves as the Registration Agency. As discussed below under Sec.  
29.13, Recognition of State Apprenticeship Agencies, States seeking 
registration authority for Federal purposes must provide sufficient 
resources to perform all the functions of a Registration Agency. We 
have revised Sec.  29.3(g) to clarify that the Registration Agency is 
responsible for reviewing programs for quality and conformity with the 
requirements of this part at the end of the first year after 
registration. A program that conforms to the requirements of part 29 
may be permanently approved, or the provisional approval may be 
extended through the end of the first training cycle. A program not in 
operation or not conforming to the regulations during the provisional 
approval period must be recommended for deregistration procedures.
Program Reviews
    Proposed Sec.  29.3(h) provides that a satisfactory review at the 
end of the first full training cycle will result in removal of 
provisional approval, and provides that subsequent reviews will be 
conducted no less frequently than on a five-year cycle. A few 
commenters questioned how this five-year cycle of program reviews, 
which generally

[[Page 64408]]

corresponds to the completion of the first full training cycle, aligns 
with competency-based or hybrid programs that may have training cycles 
of different lengths. Other commenters questioned if the five-year 
cycle provided in Sec.  29.3(h) would conflict with a State 
Apprenticeship Agency's program review cycle that might occur more 
frequently.
    Response: Competency-based and hybrid programs also have 
requirements for on-the-job work experience associated with program 
completion, but the cycles of each may vary in length from traditional 
apprenticeship programs. To address this, Sec.  29.3(h) of the final 
rule clarifies that subsequent reviews will be completed after a 
satisfactory review at the end of the first full training cycle, and 
must be conducted no less frequently than every 5 years. Section 
29.3(h) does not preclude a State Apprenticeship Agency from conducting 
reviews more frequently than prescribed. If a review demonstrates that 
a provisionally registered program has satisfactorily met the 
requirements of this part in a timeframe shorter than the typical 5 
years, provisional registration may be transformed to permanent 
registration.
Timeframe for Approval of Proposals and Modifications
    A few commenters questioned the requirement in Sec.  29.3(i) for a 
Registration Agency to make a determination on whether to approve 
sponsor proposals or applications for modifications to registered 
programs within 45 days from the date of receipt. Existing regulations 
simply provide for ``prompt'' submission of requests for modification 
and set no timeframe for a Registration Agency and provide no guidance 
on what the Registration Agency must do to process the application or 
modification. Commenters asserted that 45 days does not provide 
sufficient time for review and comment. In particular, this proposed 
requirement would not align with schedules for State Apprenticeship 
Councils that only meet quarterly or every 90 days, to review proposals 
and modifications for registered apprenticeship programs. Other 
commenters did support the proposed 45-day timeframe for the 
Registration Agency to make a determination whether to approve such 
submissions.
    Response: In light of the quarterly meeting schedule used by many 
State Apprenticeship Councils and State Apprenticeship Agencies for 
review of proposals and modifications, a 90-day timeframe is more 
appropriate for the Registration Agency to make determinations whether 
to approve such submissions. We have also clarified that if approved, 
the Registration Agency will record and acknowledge the modifications 
within 90 days of approval. Final Sec.  29.3(i) also clarifies that if 
the modifications are not approved, the Registration Agency will notify 
the sponsor of the disapproval, and provide reasons therefore. Final 
Sec.  29.3(i) has been changed accordingly.
Criteria for Apprenticeable Occupations (Sec.  29.4)
    Section 29.4 revises the criteria for determining when an 
occupation qualifies as apprenticeable. The revisions proposed in the 
NPRM align Sec.  29.4 with changes to ways to progress through an 
apprenticeship program, as discussed further in the discussion of Sec.  
29.5(b)(2). Some commenters raised questions and concerns about 
deletion of the term ``skilled trade'' and inconsistency between an 
apprenticeable occupation's requirement for hours of on-the-job 
learning and the competency-based approach for completion of an 
apprenticeship program, provided by final Sec.  29.5(b)(2).
Deletion of ``Skilled Trade''
    A few commenters raised concerns about the deletion of the term 
``skilled trade'' in describing an apprenticeable occupation, asserting 
that the term is recognized nationally in the construction industry, 
and is commonly used.
    Response: We acknowledge that the term ``skilled trade'' is a 
nationally recognized term in the construction industry, and emphasize 
that deletion of this term in the regulations for the National 
Apprenticeship System is not meant to discourage continued use of this 
term. However, as apprenticeship expands into new industries, we have 
determined that more generic approach better reflects the terminology 
used by a variety of industries. Accordingly, we have not added 
``skilled trade'' to the final rule.
Hours of On-The-Job Learning
    Some commenters suggested that requiring at least 2,000 hours of 
on-the-job work experience in Sec.  29.4(c) conflicts with the 
competency-based approach outlined in Sec.  29.5(b)(2).
    Response: The 2000 hour standard in Sec.  29.4(c) is solely for the 
purpose of helping to define an apprenticeable occupation. In order for 
an occupation to be considered apprenticeable it must be an occupation 
which, if learning were conducted in the traditional on-the-job manner, 
would require at least 2,000 hours of on-the-job learning. As is 
discussed more fully in the next section on standards of 
apprenticeship, only ``time-based'' apprenticeship programs will be 
required to provide for at least 2000 hours of actual on-the-job 
learning. ``Competency-based'' and ``hybrid'' programs also will be 
required to provide for on-the-job learning, but the required hours 
will vary by program.
    The comments on this section have brought to light an inconsistent 
and interchangeable use of the terms ``on-the-job training'' and ``work 
experience'' throughout the proposed rule to refer to the on-the-job 
learning component of registered apprenticeship, as required in Sec.  
29.4(c) and Sec.  29.5(b)(2). We have replaced the terms ``on-the-job 
training'' and ``on-the-job work experience'' with the term ``on-the-
job learning'' throughout the final rule.
Standards of Apprenticeship (Sec.  29.5)
    Proposed changes to Sec.  29.5 regarding standards of 
apprenticeship received many comments; over 132 comments pertained to 
the use of a competency-based approach to progression through an 
apprenticeship. Other significant areas of interest centered on related 
instruction, apprentice instructor certification, advanced standing or 
credit, transfers, interim credentials, and cancellation rate.
Three Approaches to Completion of Apprenticeship
    Section 29.5(b)(2), which is based on the existing requirement that 
on-the-job learning must be consistent with industry practice, presents 
three methods by which an individual apprentice may progress toward the 
industry standard for work experience. These methods are: (i) A time-
based approach involving completion of at least 2,000 of hours of on-
the-job work experience; (ii) a competency-based approach involving 
successful demonstration of acquired skills and knowledge by an 
apprentice, as verified by the program sponsor, plus an on-the-job 
learning component; and (iii) a hybrid approach involving completion of 
a specified minimum number of hours plus the successful demonstration 
of competency.
    Many commenters raised questions and asked for clarification about 
the proposed three approaches. Many commenters questioned whether the 
competency-based model would require on-the-job learning. Most 
commenters expressed concern that the proposed terms were not 
adequately defined, that industries should be equipped to monitor 
validity and achieve standardization, and that existing

[[Page 64409]]

minimum standards would be compromised. A community-based organization 
praised the proposed three approaches, citing studies that indicate 
that nontraditional apprentices, such as women, are more likely to 
complete programs if such requisites as pre-apprenticeship training 
programs were recognized in a competency-based or hybrid approach. 
Several commenters expressed concern that the competency-based and the 
hybrid methods for completion of an apprenticeship would allow 
apprentices to circumvent on-the-job learning and related technical 
instruction with a demonstration of acquired skills and knowledge. 
Other commenters expressed apprehension over the potential for safety 
compromise, particularly in the construction industry, and the need to 
``safeguard the welfare of apprentices.'' One commenter asserted that a 
competency-based apprenticeship program would not require an apprentice 
to demonstrate competency in a ``real time, distracting, sometimes 
noisy, sometimes dirty, and often unpredictable environment.'' Many 
commenters interpreted proposed Sec.  29.5(b)(2) to mean that all 
program sponsors would have to adopt all three approaches for 
completion of apprenticeship.
    Response: This rule carries forward the traditional model because 
it has worked well in many occupations that have used a time-based 
approach for registered apprenticeship; we expect that most program 
sponsors in those occupations will continue using this approach. 
However, as part of the Department's strategic emphasis on meeting the 
training needs of business and workers, and our policy of expanding 
apprenticeship, it has become clear that the traditional time-based 
approach to training does not fit the norms of all industries or 
occupations seeking to use the registered apprenticeship model. The 
final rule acknowledges the needs of industries that prefer to continue 
to use a time-based approach for registered apprenticeship, as well as 
those industries that require more flexibility in how an apprentice can 
attain the journeyworker level of proficiency.
    We agree that clarifying language is required for all three 
approaches to ensure that on-the-job learning is a required component 
of all apprenticeship programs. Paragraph (ii) of Sec.  29.5(b)(2) has 
been revised to include additional language specifying that programs 
using the competency-based approach must still require an apprentice to 
complete the on-the-job learning component of registered 
apprenticeship. We emphasize that on-the-job learning remains the 
primary method by which apprentices gain the competencies necessary for 
successful completion of a competency-based or hybrid apprenticeship 
program. An apprenticeship program's use of a competency-based or 
hybrid approach does not exempt apprentices from participating in the 
fundamental elements of registered apprenticeship: on-the-job learning 
and related instruction.
    The Office of Apprenticeship guidance on competency-based and 
hybrid apprenticeship in Circular 2005-03 describes how program 
sponsors and apprentices can comply with the requirements for minimum 
on-the-job learning for each major work process using the competency-
based or hybrid approach outlined in Sec.  29.5(b)(2). Additionally, 
materials available on the CareerOneStop Web site (http://www.careeronestop.org/competencymodel) provide examples of recently 
approved competency-based apprenticeship programs in the advanced 
manufacturing and health care industries. These examples showcase the 
depth and breadth of the information required to define a 
``competency,'' establish a proficiency level for that competency, and 
develop a test and evaluation for said competency. This guidance 
reinforces that the competency-based model does not negate requirements 
for on-the-job learning and related instruction. Such requirements will 
ensure that all apprentices are exposed to workplace conditions and 
properly trained in the safety requirements essential to the industry.
    Neither the proposed nor the final rule requires program sponsors 
or Registration Agencies to adopt all three approaches. A new paragraph 
(iv) has been added to Sec.  29.5(b)(2) to clarify that the 
determination of the appropriate approach for the program standards is 
made by the program sponsor, subject to approval by the Registration 
Agency of the determination as appropriate to the apprenticeable 
occupation for which the program standards are registered.
    We seek to provide a variety of industries with greater flexibility 
and options for approaches to addressing their talent-development needs 
through apprenticeship. As discussed in the NPRM, business, industry, 
and labor have requested a more flexible and accountable National 
Apprenticeship System that meets their workforce development needs. 
Through pilot programs in which sponsors measured apprentices' 
attainment of certain skills and competencies rather than using the 
traditional, time-based approach, many new business, labor, and 
industry partners in National Apprenticeship System have found that 
competency-based apprenticeship provides the flexibility and 
accountability necessary to use registered apprenticeship in their 
respective industries and occupations. Final Sec.  29.5(b)(2) provides 
greater flexibility for registered apprenticeship programs to address 
career development plans of registered apprentices. As we emphasized in 
the NPRM, the three approaches reflect the experience of the 
traditional building and construction trades and industrial sectors' 
use of time-based apprenticeship, while addressing the needs of new and 
emerging industries seeking to participate in the National 
Apprenticeship System. Therefore, we anticipate that program sponsors 
will use the approach that best meets the needs of their particular 
industry. We do not intend to discourage the use of the time-based 
approach in those occupations in which it has proven successful nor for 
any new occupations that lend themselves to that approach.
Related Instruction
    The majority of comments on provisions for related and supplemental 
instruction stated that training through the use of electronic media as 
proposed in Sec.  29.5(b)(4) should not supplant or replace an 
apprentice's ongoing, face-to-face interaction and classroom time with 
an instructor. Some commenters suggested that the Department clarify 
that electronic media can be used to supplement classroom instruction, 
but that it is not a substitute for instructor/apprentice interaction. 
Many suggested that electronic media should not be allowed as the sole 
method for related technical instruction, as it would be open to 
widespread misuse and mismanagement. Others suggested that the 
regulations require that a majority of, or a significant portion of 
related instruction should be provided through in-person instruction. 
Other commenters supported the use of electronic media in related 
instruction, because it enhances flexibility in registered 
apprenticeship and recognizes new training methods and technologies.
    Response: The inclusion of electronic media for related instruction 
is critical to aligning the National Apprenticeship System with 
technological advances and appropriate industry application of such 
advances. Section 29.5(b)(4) does not require that all industries and 
apprenticeship programs must use electronic media; rather, it permits 
use of electronic media as a tool to support

[[Page 64410]]

industry learning styles. Section 29.5(b)(4) retains other methods of 
related instruction such as classroom, occupation, or industry courses, 
or other instruction approved by the Registration Agency. The extent to 
which an apprenticeship program incorporates electronic media into the 
provision of related instruction depends on the learning objectives for 
the particular occupation associated with that program. Therefore, the 
regulatory framework for apprenticeship should not specify how related 
technical instruction will be delivered. Such decisions are most 
appropriately determined by program sponsors, subject to approval by 
the Registration Agency. Through the provisional registration process 
and the review of modifications to registered programs established in 
Sec.  29.3(g), (h), and (i), Registration Agencies will coordinate with 
program sponsors to identify the appropriate method(s) of providing 
related technical instruction. The Registration Agency's evaluation of 
program performance in the quality assurance assessment process, as 
established in Sec.  29.6(b), will identify and assess any changes in 
related technical instruction and its effect on the overall operation 
and quality of the program. To further address concerns regarding 
inappropriate, ineffective use of electronic media in the provision of 
related technical instruction, the Office of Apprenticeship will 
consult with State Apprenticeship Agencies to develop and issue further 
guidance illustrating the appropriate use of electronic media.
Apprenticeship Instructor Qualifications
    Proposed requirements for an apprenticeship instructor would be 
similar to States' requirements such as meeting the State Department of 
Education's requirements for a vocational-technical instructor, and/or 
being recognized as a subject matter expert, and would require that 
instructors have training in teaching techniques and adult learning 
styles. A few commenters generally supported the proposed 
qualifications for apprenticeship instructors in Sec.  29.5(b)(4) 
because they would raise the quality of apprenticeship instruction. 
Some commenters stated the proposed changes did not adequately define 
``subject matter expert'' or provide guidance on how an apprenticeship 
program or Registration Agency should make a determination of who may 
be considered a ``subject matter expert.'' Others agreed with the 
concept of improving the quality of apprenticeship instructors, but 
stated the proposed changes would be overly restrictive by requiring 
all instructors to be certified as having met the state vocational 
education instructor requirements. Other commenters questioned whether 
journeyworkers would have to be certified by the State vocational 
education entity in order to teach the related instruction component of 
registered apprenticeship. Some commenters asserted that the proposed 
text would eliminate the use of journeyworkers as subject matter 
experts or technical experts. Some commenters supported the proposed 
requirement in Sec.  29.5(b)(4) that apprenticeship instructors have 
training in teaching techniques and adult learning styles. Others 
requested clarification on this requirement.
    Response: We agree that the proposed rule did not provide adequate 
guidance and flexibility for instruction qualifications. Accordingly, 
we have revised Sec.  29.5(b)(4) to clarify that an apprenticeship 
instructor must either meet the State Department of Education's 
requirements for a vocational-technical instructor or be a subject 
matter expert. The rule also clarifies that subject matter experts are 
individuals who are recognized within an industry as having expertise 
in a specific occupation. Journeyworkers can be considered subject 
matter experts, and therefore may be appropriate instructors of related 
technical instruction. Provisions in Sec.  29.5(b)(4) requiring 
instructors to have training in teaching techniques and adult learning 
styles will further ensure quality of instruction in the National 
Apprenticeship System. Training in and an understanding of teaching 
techniques and adult learning styles will enhance instructors' 
effectiveness, thereby improving the learning experiences of individual 
apprentices and the overall National Apprenticeship System. Such 
training may be provided by the apprenticeship program, or through an 
accredited institution of higher learning, and may occur before or 
after the apprenticeship instructor has started to provide the related 
technical instruction.
Probationary Period
    Seventeen commenters expressed concern that the length of the 
probationary period was not defined in proposed Sec.  29.5(b)(19), 
which provided simply that cancellations during an apprentice's 
probationary period will not adversely impact the sponsor's completion 
rate. The completion rate is a new factor for evaluation of program 
performance proposed in Sec. Sec.  29.6(b) and (c). Several commenters 
suggested defining a specific ``not to exceed'' time for probationary 
periods, such as 15 percent or 20 percent of a program's length. Many 
commenters were concerned that without a time limit on the probationary 
period, the proposed regulations could permit an apprenticeship program 
to leave apprentices in probationary status for an extended period of 
time in an effort to improve the program's performance ratings or 
conceal the program's deficiencies.
    Response: We agree that without a limit to the probationary period, 
the regulation could allow the information used in calculating 
completion rates to be skewed, thereby impacting the evaluation of 
program performance. In recognition of the concerns of the commenters, 
we have added language to Sec.  29.5(b)(8) limiting the length of the 
probationary period. Historically, national guidelines for 
apprenticeship standards recognized by the Office of Apprenticeship 
have used 25 percent of the length of the program as the benchmark. 
Accordingly, the final rule provides that the probationary period 
cannot exceed 25 percent of the length of the program, or one year, 
whichever is shorter.
Advanced Standing or Credit
    Two commenters discussed Sec.  29.5(b)(12), which provides for 
granting an apprentice advanced standing or credit to take into account 
demonstrated competencies. One commenter asserted that the proposed 
rule could reduce on-the-job learning, possibly compromising safety and 
health. The other commenter expressed concerns about how sponsors would 
evaluate competencies.
    Response: The provisions for granting an apprentice advanced 
standing or credit would not negatively impact safety and health 
because, as discussed above, apprentices are still required to have on-
the-job learning and related instruction that enable the apprentices to 
recognize and protect themselves from safety and health hazards. With 
regard to evaluating competency, sponsors would use the definition of 
``competency'' in Sec.  29.2, which provides that sponsors use an 
appropriate written or hands-on proficiency measurement. Provisions of 
final Sec.  29.5(b)(12) are necessary to support the flexible approach 
to progression through apprenticeship identified in Sec.  29.5(b)(2). 
Accordingly, no changes have been made to the provisions for granting 
advanced standing or credit.

[[Page 64411]]

Transfer
    Twenty-seven commenters raised questions about the proposed changes 
to Sec.  29.5(b)(13) which require program sponsors or committees to: 
Provide the transferring apprentice with a transcript of related 
training and on-the-job learning completed; permit transfers to either 
the same or a related occupation; allow an apprentice, the employer or 
the program sponsor to initiate the transfer; and stipulate that a 
transfer must occur without adverse impact on the apprentice, the 
employer, or the program.
    Many commenters raised concerns about how a transfer would be 
initiated and the process for executing the transaction. Commenters 
questioned whether the proposed provisions would permit an apprentice 
to unilaterally transfer from one program to another without the 
consent of program sponsors. Two commenters suggested that transfers 
should be amicable for all sides and that transferring apprentices 
should be tested to ensure proper placement in the new apprenticeship 
program. Other commenters asserted that an involuntary transfer could 
adversely impact the affected apprentice and the affected 
apprenticeship program sponsors or committees. Another commenter 
questioned whether the proposed rule requires acceptance of transfers. 
Three commenters stated that modifying this section of the rule should 
be solely a State and sponsor responsibility.
    Response: We agree that the commenters have valid concerns about 
unilateral decisions for apprentices to transfer and the potential for 
an adverse impact on one of the affected parties. Accordingly, we have 
revised Sec.  29.5(b)(13) to provide that a transfer must be based on 
agreement between the apprentice and the affected apprenticeship 
committees or program sponsors. An apprentice cannot unilaterally 
transfer from one program to another or from one employer to another 
employer in the same program, without the consent of the affected 
apprenticeship committees or program sponsors.
    We disagree that modifications to Sec.  29.5(b)(13) should be 
solely a State and sponsor responsibility. The regulatory framework for 
the National Apprenticeship System, established by this part, must 
address the issue of transfer to ensure that all apprentices regardless 
of geographic location and program sponsor have equal and uniform 
access to the same provisions for transfer. However, procedural and 
administrative issues associated with the transfer of apprentices, such 
as testing and determination of appropriate placement of the apprentice 
and the means of reaching agreement among affected parties, are more 
appropriately addressed in policy guidance to be issued by the Office 
of Apprenticeship, rather than in the regulatory framework for the 
National Apprenticeship System. Accordingly, the Office of 
Apprenticeship will consult with apprenticeship program sponsors and 
State Apprenticeship Agencies to develop and issue guidance that 
effectively addresses these concerns.
    Several commenters said provisions in proposed Sec.  
29.5(b)(13)(ii) which would permit transfer to a related occupation or 
within the same occupation would not benefit apprentices, especially if 
a program sponsor or employer were to shift apprentices between jobs 
and tasks without ensuring proper skills and knowledge development. 
Three commenters suggested that transfers must be within the same 
occupation or trade. One commenter noted that many apprenticeship 
programs in the building and construction industries have provisions in 
their standards for transfer of apprentices to other programs within 
their occupations.
    Response: The proposed revisions to the requirements for transfers 
were intended to benefit the apprentice by providing greater 
flexibility should he or she demonstrate that transferring to another 
apprenticeship program was necessary to accommodate variations in his 
or her career development plans. The proposed changes were not intended 
to provide program sponsors with unlimited latitude to move apprentices 
among different occupations to accommodate the sponsors' workforce 
needs. We have been persuaded by commenters' assertions that an 
apprentice does not become a journeyworker in a skilled trade by 
transferring from skilled trade to skilled trade; such as an operating 
engineer working as a carpenter, electrician or painter. Also, there is 
some validity to the concern that reference to a ``related occupation'' 
could be ambiguous and overly broad and could result in transfers to 
different trades or occupations for which the apprentice has no 
training under the guise of being ``related.'' Further it would be 
unreasonable to expect an employer to pay a transferring apprentice 
commensurate period wages without appropriate occupational experience. 
Therefore, the final rule carries forward existing provisions which 
limit transfer to the same occupation.
    Other commenters suggested that provisions in proposed Sec.  
29.5(b)(13)(i) requiring that the committee or program provide a 
transferring apprentice a transcript of related instruction and on-the-
job learning would encourage recruitment between apprenticeship 
programs instead of focusing on greater outreach.
    Response: We have not changed the requirement that the transferring 
apprentice must be provided a transcript. The requirement for a program 
sponsor or committee to provide a transferring apprentice a transcript 
of related instruction and on-the-job learning is necessary to further 
align the National Apprenticeship System with post-secondary training 
and education systems, and credentialing systems. Those systems provide 
participants with documentation of what they have learned through a 
particular course, series of instructions, or training program. 
Additionally, the provisions in the final rule requiring agreement 
among the apprentice and the affected apprenticeship committees or 
program sponsors for a transfer will mitigate the potential for program 
sponsors to focus on recruitment between programs. As discussed above, 
the program with which the apprentice is originally registered must 
agree to the transfer.
    In addition, the final rule continues to serve the purpose of 
existing Sec.  29.5(b)(13), which allows an employer to transfer its 
training obligation to another employer, with the consent of the 
apprentice and the apprenticeship committee or program sponsor. As 
discussed above, the Department does not foresee that transfers of 
apprenticeship registration from one program to another or from one 
employer to another would occur frequently or with regularity. The 
intent of this provision is to provide flexibility for an apprentice to 
continue his or her apprenticeship in changing circumstances.
Interim Credentials
    Changes to proposed Sec.  29.5(b)(15) would add a provision for 
issuance of an interim credential in recognition that an apprentices 
has attained skills or satisfied certain requirements as he or she 
progresses through a competency-based or hybrid apprenticeship program. 
The proposed revision also carries forward the existing requirement for 
issuance of a certificate of completion in recognition of successful 
completion of an apprenticeship program. We received 93 comments on 
proposed Sec.  29.5(b)(15). Some commenters expressed support for

[[Page 64412]]

interim credentials. Several commenters questioned the need for 
provisions on interim credentials, while others noted that program 
sponsors, employers, and others, already issue such credentials.
    Response: Section 29.5(b)(15) continues to provide, as does the 
existing rule, for a certificate that documents the successful 
completion of an apprenticeship program. However, the commenters have 
raised some valid concerns as to the proposed requirements for interim 
credentials. To address these issues and to further clarify the 
requirement for interim credentials, the final rule separates 
requirements for interim credentials into a new, discrete paragraph, 
Sec.  29.5(b)(16), and renumbers all subsequent paragraphs in Sec.  
29.5(b) as final Sec.  29.5(b)(17) through final Sec.  29.5(b)(23).
    The proposed provisions for interim credentials were not intended 
to require all program sponsors to issue interim credentials, nor even 
to require that all sponsors choosing to use the competency-based 
approach or hybrid approach issue interim credentials. Final Sec.  
29.5(b)(16) clarifies that program standards for apprenticeship program 
sponsors that choose to use the competency-based or the hybrid approach 
for completion of an apprenticeship and that choose to issue interim 
credentials must clearly identify the interim credentials, demonstrate 
how these credentials link to the components of the apprenticeable 
occupations, and establish the process for assessing an individual 
apprentice's demonstration of competency associated with the particular 
interim credential. Further, interim credentials must only be issued 
for recognized components of an apprenticeable occupation, thereby 
linking interim credentials specifically to the knowledge, skills, and 
abilities associated with those components of the apprenticeable 
occupation.
    Commenters expressed concern that the use of interim credentials 
would redefine what journeyworker status means. Over twenty commenters 
asserted that provisions for interim credentials would diminish the 
value of or deter trainees from obtaining journeyworker status. Other 
commenters misinterpreted the provisions for interim credentials as 
permitting program sponsors to reduce requirements for on-the-job 
learning necessary to achieve particular skills and abilities, thereby 
producing inadequately trained journeyworkers. Some commenters stated 
that these provisions could weaken the workforce by producing workers 
with specialized, rather than comprehensive, training for parts of an 
occupation. Other commenters asserted that ultimately, issuance of 
interim credentials could lead to a segment of the workforce working 
for lower wages, with less job security.
    Response: We disagree with the assertions that interim credentials 
may potentially negatively impact the workforce and the value of 
journeyworker status. As discussed above, in some industries program 
sponsors in pilots of competency-based apprenticeship programs already 
are using interim credentials, having determined that some 
apprenticeable occupations are capable of being segregated into 
discrete competencies or levels of skill attainment which can serve as 
discrete milestones on the path to journeyworker status. Providing an 
interim credential to show that an apprentice has reached those 
milestones merely acknowledges that fact. Therefore, interim 
credentials are not intended to narrow the breadth and depth of the 
training component of registered apprenticeship. Rather, they provide 
opportunities for apprentices to obtain portable credentials 
commensurate with the skills and competencies acquired and demonstrated 
throughout an apprenticeship. Therefore, attainment of an interim 
credential may provide the apprentice who must leave the program with 
the means to obtain a better job than he or she could without the 
credential.
    As discussed above in the discussion of the definition of interim 
credentials, the issuance of a certificate of completion of 
apprenticeship, and the associated ``journeyworker'' level status, 
remain the ultimate goal for the National Apprenticeship System. 
Interim credentials do not indicate that the apprentice has met all of 
the requirements of the apprenticeship, nor that he or she has 
successfully mastered the full range of skills and competencies 
required for an occupation. The certificate of completion is the only 
credential that properly conveys that the apprentice has successfully 
met the requirements of the apprenticeship program. Therefore, 
designation of ``journeyworker'' and the associated status will not be 
affected by use of interim credentials. However, in recognition of 
stakeholders concerns over the impact of interim credentials, the 
Department will establish a process to assess implementation of interim 
credentials. Initially, Registration Agencies and program sponsors will 
use the quality assurance assessment process to identify and assess any 
impact of interim credentials on program operations and outcomes. 
Following consultation with stakeholders of the National Apprenticeship 
System, the Office of Apprenticeship intends to issue policy guidance 
on the review of interim credentials.
    Thirty commenters expressed concern about potential negative 
impacts for the National Apprenticeship System if interim credentials 
are based on sponsor standards instead of industry standards. These 
commenters asserted that national standards are necessary so that the 
credential can be portable and meaningful to employers across different 
regions.
    Response: In the National Apprenticeship System, a sponsor can only 
register standards for apprenticeship programs that train and employ an 
apprentice in occupations that have been determined ``apprenticeable.'' 
The Office of Apprenticeship has established criteria and procedures 
for recognizing an apprenticeable occupation that require industry 
verification and validation of the skills and knowledge necessary for 
the occupation. This process intentionally incorporates industry 
participation so that the credentials associated with progression 
through an apprenticeship program for an apprenticeable occupation will 
be portable and have meaning to employers nationwide. As discussed 
above, new Sec.  29.5(b)(16) clarifies that interim credentials must 
only be issued for recognized components of an apprenticeship 
occupation. Therefore, the interim credentials associated with the 
specific skills and knowledge for an apprenticeable occupation are 
verified and validated by industry through the process of approving the 
apprenticeable occupation.
    Numerous commenters suggested that provisions on interim 
credentials would place additional resource (e.g., time and 
documentation) burdens on Registration Agencies with no apparent 
provisions for verification of the credential's validity. Some 
commenters recommended that the use of interim credentials should not 
be mandated or should be left to the discretion of States to mandate.
    Response: While we consider interim credentials to be a valuable 
tool for furthering apprenticeship, we emphasize that program sponsors 
are not required to develop and register standards of apprenticeship 
that include interim credentials, nor are recognized State 
Apprenticeship Agencies required to issue interim credentials. We 
anticipate that such credentials will be used most frequently by 
programs that

[[Page 64413]]

take the competency-based or hybrid approach to progression through 
apprenticeship. Further, in the Department's pilots with competency-
based apprenticeship programs, Registration Agencies have provided 
technical assistance to sponsors to help identify the appropriate 
procedures and criteria for determining if and when an apprentice 
merits receiving an interim credential. The Department anticipates that 
Registration Agencies will continue to provide such technical 
assistance in the development of competency-based and hybrid 
apprenticeship programs, and issuance of interim credentials associated 
with these programs. As with certificates of completion, Registration 
Agencies are the entities responsible for issuing interim credentials, 
at the request of a program sponsor.
    The Department acknowledges that instituting a process for the 
issuance of interim credentials would constitute an additional burden 
for those State Apprenticeship Agencies that currently do not issue 
such certifications. Based on comments expressing concern about 
potential time and documentation burdens, we agree that State 
Apprenticeship Agencies should not be required to issue interim 
credentials as a pre-condition for recognition. Accordingly, while 
recognized State Apprenticeship Agencies may choose to issue interim 
credentials using their own procedures in compliance with this part, 
the final rule does not require them to do so. However, in order to 
maintain uniformity across the National Apprenticeship System and 
further apprentices' progression through apprenticeship, the Department 
has determined that opportunities must be available nationwide for 
program sponsors to register program standards that use a competency-
based or hybrid approach for completion of apprenticeship and that 
issue interim credentials. Therefore, the Office of Apprenticeship will 
offer to issue interim credentials, nationwide, where the prerequisites 
are met. If a recognized State Apprenticeship Agency registers program 
standards that use a competency-based or hybrid approach, but does not 
issue interim credentials, the program sponsor may request that the 
Office of Apprenticeship issue interim credentials to apprentices who 
have successfully met the requirements of an interim credential 
established in the program standards for their respective 
apprenticeship programs. If a recognized State Apprenticeship Agency 
does not register program standards that use a competency-based or 
hybrid approach, then a program sponsor can petition to register the 
apprenticeship standards with the Office of Apprenticeship for Federal 
purposes, and the Office of Apprenticeship will issue interim 
credentials, when prerequisites are met.
    Two commenters maintained that mandating the use of interim 
credentials would cause apprenticeship programs to incur the enormous 
costs of developing testing to determine whether apprentices are 
entitled to interim credentials.
    Response: As discussed above, the final rule does not mandate use 
of interim credentials. Program sponsors that chose to register 
standards for competency-based or hybrid programs that provide for the 
issuance of interim credentials would bear the costs associated with 
developing and operating these apprenticeship programs. All registered 
apprenticeship program sponsors voluntarily operate apprentice programs 
and choose to incur the costs associated with the programs
Cancellation Rate
    Seventeen commenters expressed concern that the length of the 
probationary period was not defined in proposed Sec.  29.5(b)(19), 
which provided simply that cancellations during an apprentice's 
probationary period will not adversely impact the sponsor's completion 
rate. The completion rate is a new factor for evaluation of program 
performance proposed in Sec. Sec.  29.6(b) and (c). Several commenters 
suggested defining a specific ``not to exceed'' time for probationary 
periods, such as 15 percent or 20 percent of a program's length. Many 
commenters were concerned that without a time limit on the probationary 
period, the proposed regulations could permit an apprenticeship program 
to leave apprentices in probationary status for an extended period of 
time in an effort to improve the program's performance ratings or 
conceal the program's deficiencies.
    Twelve commenters believed that not counting cancellations during 
the probationary period, or allowing programs to adjust the length of 
the probationary period, could artificially improve completion rates. 
Others felt that cancellation rates during the probationary period, if 
properly categorized, can be used to evaluate program performance. Some 
commenters stated that it would be important to monitor programs that 
have a high rate of attrition during probationary period to check for 
abuses. Others advocated that only cancellations that were due to 
failure to provide training in accordance with the sponsor's approved 
standards should be counted in completion rates, asserting that the 
proposed rule's inclusion of cancellation rates after the probationary 
period in calculation of completion rates did not distinguish between 
those cancellations that were the fault of the program and those over 
which the program has little if any control.
    Response: We agree that it is important to monitor programs with a 
high cancellation rate during probationary periods. For many years the 
Office of Apprenticeship has included cancellation rates as a factor 
for consideration when staff members conduct quality assurance 
assessments, and if appropriate, has used this information in the 
provision of technical assistance to program sponsors. Although the 
final rule does not provide for inclusion of cancellations that occur 
during probationary periods in the calculation of completion rates, 
this important information is reviewed, evaluated, and addressed 
through the quality assurance assessment process.
    We also agree that without a limit to the probationary period, the 
regulation could allow the information used in calculating completion 
rates to be skewed, thereby impacting the evaluation of program 
performance. In recognition of the concerns of the commenters, we have 
added language to Sec.  29.5(b)(8) limiting the length of the 
probationary period. Historically, National Guideline for 
Apprenticeship Standards recognized by the Office of Apprenticeship 
have used 25 percent of the length of the program as the benchmark. 
Accordingly, the final rule provides that the probationary period 
cannot exceed 25 percent of the length of the program, or one year, 
whichever is shorter.
    We disagree that only cancellations due to the failure to provide 
training in accordance with the sponsor's approved standards should be 
counted in completion rates. Program sponsors' policies and 
administrative procedures such as not providing steady work experience 
reduce the apprentices' opportunities to earn wages, and thereby can 
impact an apprentice's ability to remain registered in a program. 
Therefore, analysis of a program's cancellations rates can provide 
important indications of the need to further evaluate a program's 
operations, policies, and procedures, and if needed provide technical 
assistance. As discussed further in the discussion of program 
performance standards, we emphasize that a Registration Agency's 
evaluation of

[[Page 64414]]

completion rates will include analysis of mitigating factors. No 
substantive changes have been made to proposed Sec.  29.5(b)(19); which 
will be promulgated as Sec.  29.5(b)(20).
Program Performance Sandards (Sec.  29.6)
    Section 29.6 is a new section that focuses on the quality and 
performance of registered apprenticeship programs. A few commenters 
generally supported the proposed changes to this section, but 
questioned the Office of Apprenticeship's ability to successfully 
evaluate all of the registered programs, given current budget and 
staffing levels.
    Response: The Department agrees that a Registration Agency requires 
adequate resources to successfully evaluate all registered programs 
under the provisions of this section. The Office of Apprenticeship 
staff has been conducting quality assurance assessments and Equal 
Employment Opportunity Compliance Reviews as part of their normal 
responsibilities for helping to ensure that program sponsors comply 
with the requirements of these regulations and part 30. The processes 
for conducting these reviews currently include assessing a program's 
performance against key indicators including completion and 
cancellations rates. Therefore, the functions of calculating completion 
rates, conducting quality assurance assessments and Employment 
Opportunity Compliance Reviews, and providing technical assistance, as 
required by final Sec.  29.6 have effectively been a part of the Office 
of Apprenticeship's current practices for evaluating and monitoring 
programs. To the extent that the Office of Apprenticeship's current 
resources may become constrained by requirements of this section, we 
may realign resources internally to effectively and efficiently conduct 
these activities.
At Least One Registered Apprentice
    Section 29.6(a) provides that every program must have at least one 
registered apprentice in order to be designated and retain designation 
as a registered apprenticeship program for Federal purposes. Commenters 
observed concern that there may be times when a program is between 
training cycles and has no apprentices for a short period of time. 
Other commenters asserted that this provision does not adequately 
address apprenticeship programs with one or a few apprentices who never 
graduate. Some commenters suggested establishing time frames for 
determining if programs have an active apprentice or apprentices.
    Response: We agree that there may be times when a sponsor may have 
a lag between training cycles and be without a registered apprentice 
for a short period of time. However, when a program lies dormant for a 
substantial period of time, it is appropriate to consider the program 
as no longer viable. Therefore, we agree with the suggestion to 
establish time frames for determining if a program has an active 
apprentice to account for the short lag times mentioned in the comment 
and other reasonable periods of inactivity that may occur in otherwise 
active programs. We consider a period of up to 1 year to be a 
reasonable period of inactivity. We have determined that the time frame 
for a program to not have an apprentice registered with a Registration 
Agency should not exceed 1 year. We have revised Sec.  29.6(a) 
accordingly.
    With regard to commenters assertion that this provision does not 
adequately address programs that never graduate an apprentice, the 
requirements set forth in 29.6(b) will hold those programs accountable.
Evaluation of Program Performance
    Twenty-eight comments addressed Sec.  29.6(b), which provides a 
non-exclusive list of tools and factors that must be considered in 
evaluating the performance of a registered apprenticeship program. Nine 
commenters expressed concern that there is no proposed definition of 
``quality assurance assessment,'' one of the tools and factors to be 
considered in evaluating performance. Many requested a definition of 
``completion rate.'' Other commenters requested that the Department 
clarify the intended purpose of each of the performance tools and 
factors and how they are to be used. One commenter suggested adding a 
requirement that the ``tools and factors'' be consistent with Federal 
standards and goals so that States could not add factors that 
conflicted with this part, 29 CFR part 30, or the National 
Apprenticeship Act.
    Response: We agree that definitions for the terms ``completion 
rate'' and ``quality assurance assessment'' would provide greater 
clarity to the proposed performance accountability framework 
established by the final rule. Accordingly, as discussed above, we have 
added definitions for the terms ``completion rate'' and ``quality 
assurance assessment'' to Sec.  29.2.
    The three performance factors specifically required are quality 
assurance assessments, Equal Employment Opportunity Compliance Reviews, 
and completion rates. As discussed above in the discussion of the 
definitions in Sec.  29.2, quality assurance assessments are 
comprehensive reviews conducted by a Registration Agency to determine 
if an apprenticeship program is addressing its program standards and 
meeting the requirements of this part. Equal Employment Opportunity 
Compliance Reviews are required under part 30. Data on a program's 
completion rates are intended to provide Registration Agencies with 
information useful to support technical assistance efforts to improve 
program performance. We emphasize that any additional tools and factors 
used by Registration Agencies in evaluating program performance must 
adhere to the goals and policies of the Department articulated in this 
part and in guidance issued by the Office of Apprenticeship.
Completion Rate
    A Registration Agency's use of completion rates in evaluating 
program performance, provided by proposed Sec. Sec.  29.6(b) and (c), 
received mixed reviews. One commenter asserted that the proposed rule 
will likely result in an annual effect on the economy of $100 million 
or more, and therefore the proposed rule qualifies as a major rule 
under Executive Order 12866 and the Small Business Regulatory 
Enforcement Act (SBREFA). The commenter asserted that State and local 
governments are including bid provisions that require contractors to 
have apprentices who have successfully completed an apprenticeship 
program approved by the Department or a recognized State Apprenticeship 
Agency as a condition of bidding and participating on a project. The 
commenter asserted that such bid requirements will likely foreclose 
unilateral apprenticeship program sponsors from being able to bid on, 
and be awarded State and local construction projects, which will likely 
have an annual adverse impact on the economy exceeding $100 million. 
Although the comment did not mention a particular section of the rule, 
we have determined that the commenter's estimate of anticipated impact 
was primarily based on the expected costs of compliance with Sec. Sec.  
29.6 (b) and (c). The commenter recommended that the Department 
withdraw the proposed provisions for completion rates, so that the 
Office of Apprenticeship can conduct further study and discussion with 
interested stakeholders.
    Many commenters noted that evaluating apprenticeship programs on 
the basis of completion rates would align the National Apprenticeship 
System with other Federal education programs that make eligibility for 
receipt of Federal funding dependent, in

[[Page 64415]]

part, on the program's achievement of minimal graduation rates. Others 
stated that the evaluation would improve program accountability, ensure 
high-quality training, or reflect the effectiveness of programs. 
However, another commenter asserted that reference to completion rates 
could unfairly penalize programs that make an affirmative effort to 
recruit apprentices from non-traditional pools, as the drop-out rate 
for those recruited from riskier groups may be higher than normal. 
Other commenters stated that use of completion rates could also 
penalize small programs, whose completion rates could be affected 
dramatically by the cancellation of only one or two apprenticeship 
agreements.
    Some commenters opposed provisions of proposed Sec.  29.6(c) that 
provide for evaluation of completion rates of programs located in the 
same geographical areas, and as necessary, further review and provision 
of technical assistance to maintain and improve program performance. 
One commenter asserted that it was onerous and short-sighted to compare 
programs, rather than individually evaluate programs based on their 
merits. Another commenter characterized this particular proposed 
provision as highly subjective and ambiguous, suggesting that the 
standard should set a minimum completion rate above which a program's 
completion rate will not be deemed a negative factor. Another remarked 
on the absence of firm standards in this proposed regulation. Others 
asserted that this proposed requirement would favor union-operated 
programs and do nothing to improve apprenticeship programs.
    Response: The Department does not agree that evaluating completion 
rates as an indicator of program quality would unfairly penalize 
programs that recruit from non-traditional applicant pools, nor do we 
agree that completion rates would penalize small programs whose 
completion rates could be affected dramatically by cancellation of one 
or two apprenticeship agreements. The primary purpose of the completion 
rate evaluation is not to penalize programs. As described below, our 
goal is to establish an assessment mechanism to identify programs that 
will benefit from technical assistance to become high performing 
programs. Only when programs demonstrate a persistent and significant 
failure to perform successfully will poor completion rates factor into 
potential deregistration proceedings.
    We agree that comparing like programs, particularly when there may 
only be one comparable program in a geographical are, may not be a 
feasible, effective approach for the evaluation of completion rates. We 
also agree with the suggestion to establish a minimum completion rate 
above which a program's completion rate will not be deemed a negative 
factor. We have determined that the national average for apprenticeship 
completions would be a reasonable benchmark to use in evaluating the 
performance of registered apprenticeship programs for purposes of 
identifying programs in need of technical assistance. Accordingly, we 
have revised Sec.  29.6(c) to require that a Registration Agency review 
a program's completion rates in comparison to the national average for 
completion rates. Programs with completion rates lower than the 
national average will receive technical assistance from a Registration 
Agency. As stated in the NPRM, the use of completion rates in program 
reviews is not intended to limit or terminate existing apprenticeship 
programs that are receiving technical assistance from a Registration 
Agency and demonstrating improved program performance, or to impede 
prospective apprenticeship program sponsors. Rather, the use of 
completion rates is intended to strengthen the program outcomes and 
quality in the National Apprenticeship System by setting a benchmark 
that identifies programs that could benefit from technical assistance.
    In order to reflect the focus on technical assistance for programs 
with completion rates below that national average, we have dropped the 
reference that appeared in proposed Sec.  29.6(c) for the Registration 
Agency to ``take other appropriate action'' against such programs. 
Deletion of this phrase is meant to clarify that simply falling below 
that national average for completion rates does not lead to 
deregistration procedures. Completion rates may potentially factor into 
deregistration procedures only when they demonstrate an ongoing pattern 
of very low completion rates over a period of several years (see 
discussion of ``persistent and significant failure to perform'' below).
    Rather than specifying the details for implementation of program 
performance standards in registered apprenticeship, we believe the best 
use of Sec.  29.6 is to establish a regulatory framework that provides 
the basis for the Office of Apprenticeship to issue more detailed 
guidance. The Office of Apprenticeship will consult with apprenticeship 
program sponsors and recognized State Apprenticeship Agencies to 
develop and issue guidance regarding program performance standards and 
accountability in the National Apprenticeship System. This consultation 
process would also be responsive to a commenter's recommendation to 
further discuss provisions for completion rates with interested 
stakeholders. This approach is similar to the Department's regulatory 
framework and performance management system established for the 
programs under the Workforce Investment Act.
    The Department disagrees with assertions that there is a 
relationship between bid requirements for State and local construction 
projects and provisions for completion rates in Sec. Sec.  29.6(b) and 
(c) which will likely have an annual impact on the economy exceeding 
$100 million. None of the provisions in final Sec.  29.6 nor any other 
provision in the final rule provide for or relate to the establishment 
bid requirements for State and local construction projects.
Cancellation of Apprenticeship Agreements During Probationary Period
    Many commenters opposed provisions of Sec.  29.6(d) which provided 
that the cancellation of apprenticeship agreements during the 
probationary period would not have an adverse impact on a sponsor's 
completion rate. One commenter stated that all cancellations should be 
considered in program reviews, particularly to deter program sponsors 
who register programs primarily to meet contract requirements for 
Federal works projects under the Davis-Bacon Act.
    Response: Existing regulations provide for a probationary period, 
in recognition that both the apprenticeship sponsor and the apprentice 
should have sufficient time to determine if the apprenticeship 
agreement is beneficial. During the probationary period, apprentices 
may have many reasons for cancelling their agreements, which may have 
nothing to do with the program. Including apprenticeship agreement 
cancellations during the probationary period in the calculation of 
completion rates may inadvertently cause program sponsors to adopt more 
stringent selection requirements, in an effort to minimize being 
penalized. More stringent selection requirements could reduce or limit 
apprenticeship opportunities that would otherwise have been available. 
We seek to avoid a regulatory framework that would unintentionally 
reduce apprenticeship opportunities. However, Registration Agencies do 
include cancellation rates as important information in their oversight 
of registered apprenticeship programs. Cancellation rates, including 
those that occur during the probationary

[[Page 64416]]

period, are reviewed in conjunction with the Equal Employment 
Opportunity compliance reviews. If appropriate, Registration Agencies 
use this information for the provision of technical assistance. 
Therefore, we have determined that the proposal for the cancellation of 
an apprenticeship agreement not to have an adverse impact on a 
sponsor's completion rate if the cancellation occurs during the 
apprentice's probationary period is an appropriate balance between the 
need to hold program sponsors accountable and the need to promote 
apprenticeship opportunities. We have made no changes to Sec.  29.6(d).
Apprenticeship Agreement (Sec.  29.7)
    We received three comments on proposed Sec.  29.7, regarding 
requirements for apprenticeship agreements, none of which advocated for 
major changes to the proposed provisions. The proposed changes update 
terminology, align the apprenticeship agreement with the three 
approaches to apprenticeship progression (time-based, competency-based, 
or hybrid), and add space on the agreement in which apprentices would 
voluntarily provide their Social Security Number. The Registration 
Agency will use apprentices' Social Security Numbers for performance 
management and Davis-Bacon Act purposes; in particular, for use in 
calculating employment outcomes of the National Apprenticeship System 
as defined in the Department's common measures for Federal job training 
programs. The Department has an approved information collection request 
for the use of Social Security Number information on an apprenticeship 
agreement (OMB Control Number 1205-0223). One commenter suggested that 
the proposed changes will result in an undue time and financial burden 
for State Apprenticeship Agencies. Two commenters suggested additional 
requirements for collection of equal employment opportunity 
information, which are beyond the scope of revisions to part 29.
    Response: While revising forms will require the expenditure of 
resources, the changes and resulting revisions to the form will be 
minimal. Moreover, the changes are necessary for the National 
Apprenticeship System to continue to align with changes in approaches 
to on-the-job learning, as well as the broader environment in which 
apprenticeship programs operate.
    We note that the non-discrimination provisions in Sec.  29.7 are 
limited to the prohibitions that are applicable under part 30, 
regulations for Equal Employment Opportunity in Apprenticeship and 
Training, and do not describe the full range of Equal Employment 
Opportunity protections that may be applicable to registered 
apprenticeship programs. Registered apprenticeship programs are subject 
to other Federal, State and local laws and regulations regarding Equal 
Employment Opportunity in employment and training, such as the 
Americans with Disabilities Act, the Age Discrimination in Employment 
Act, and Title VII of the Civil Rights Act of 1964.
    Upon further review, we have determined that there are three minor 
changes necessary to align this section with revisions to the 
definitions and standards of apprenticeship discussed above. With the 
deletion of the definition for ``supplemental instruction,'' as 
discussed above in the discussion of definitions, this term is no 
longer appropriate for requirements in Sec.  29.7(e)(2) regarding 
number of hours in related instruction. We have revised Sec.  
29.7(e)(2) accordingly. For consistency with final Sec.  
29.5(b)(2)(ii), which specifies that competency-based programs must 
still require an apprentice to complete the on-the-job learning 
component of registered apprenticeship, we have revised the requirement 
in Sec.  29.7(e) for competency-based programs to include statements 
about on-the-job learning. We have also replaced the term ``school 
time'' in 29.7(g) with a more appropriate term, ``related 
instruction,'' to describe whether or not the apprentice is compensated 
during the related instruction component of registered apprenticeship.
Deregistration of a Registered Program (Sec.  29.8)
    Section 29.8 clarifies the provisions for deregistration of 
registered apprenticeship programs. We have corrected a mistake in 
proposed Sec.  29.8(b)(1) by replacing ``and'' with ``or'' to clarify 
that the Registration Agency may undertake deregistration proceedings 
when a program is not conducted, operated or administered in accordance 
with the program's registered provisions or with the requirements of 29 
CFR part 29.
    Five commenters addressed proposed changes in Sec.  29.8, which 
clarifies existing Sec.  29.7 provisions for deregistration of 
registered apprenticeship programs. One commenter requested 
clarification as to whether a program would automatically enter the 
deregistration process if it is without an apprentice for 15 or more 
days. Two comments expressed concern about the Department's ability to 
sufficiently address the burdens associated with deregistration 
procedures, emphasizing that deregistration should be conducted at the 
local level rather than the Federal level. Three commenters asserted 
that the proposed rule would usurp power from State Apprenticeship 
Agencies.
    Response: A program that is without an apprentice for 15 days is 
not subject to deregistration. As discussed with regard to Program 
Performance Standards above, revised Sec.  29.6(a) allows for a time 
lag of up to 1 year between training cycles, during which a program 
could be without a registered apprentice. To address ambiguity 
regarding a relationship between failure to meet the new program 
performance standards established in Sec.  29.6 and requirements for 
deregistration of a registered program established in Sec.  29.8, we 
have also revised in the final rule Sec.  29.8(b)(1) to clarify the 
circumstances in which deregistration proceedings may be undertaken for 
failure to conduct, operate or administer the program in accordance 
with the requirements of part 29. These circumstances include: the 
failure to meet longstanding standards of the National Apprenticeship 
System, such as failure to provide on-the-job learning, failure to 
provide related instruction, and failure to pay the apprentice a 
progressively increasing schedule of wages consistent with the 
apprentice's skills. In addition, the persistent and significant 
failure to perform successfully under the new performance standards 
established in section 29.6 may also lead to deregistration. However, a 
persistent and significant failure to perform successfully does not 
occur simply when a program's completion rate falls below the national 
average. Deregistration proceedings apply to programs with severe 
performance problems. A persistent and significant failure to perform 
successfully occurs when a program sponsor consistently fails to 
register at least one apprentice, shows a pattern of poor quality 
assessment results over a period of several years, demonstrates an 
ongoing pattern of very low completion rates over a period of several 
years, or shows no indication of improvement in the areas identified by 
the Registration Agency during a review process as requiring corrective 
action.
    With regard to concerns about burdens associated with 
deregistration procedures and usurping power from the State 
Apprenticeship Agency, Sec.  29.8 deletes the term ``Bureau (Office of 
Apprenticeship) registered programs'' and uses the term ``Registration 
Agency'' to clarify that program

[[Page 64417]]

deregistration procedures outlined in Sec. Sec.  29.8(a) and (b) are 
conducted at the State level, by the Registration Agency. In States 
where the State Apprenticeship Agency is the Registration Agency, 
deregistration proceedings will be conducted by the State 
Apprenticeship Agency. Any such proceeding would be required to comply 
with Sec.  29.8.
    We emphasize that final Sec.  29.8 carries forward existing 
practice that has evolved under current regulations, in which the 
Department has deferred to recognized State Apprenticeship Agency 
authority in matters of program deregistration. Therefore, the 
Department anticipates having sufficient resources to address any 
burdens associated with deregistration procedures, as these matters 
will primarily pertain to deregistration proceedings in States where 
the Department is the Registration Agency.
    Final Sec.  29.8(b)(7) clarifies that if a sponsor requests a 
hearing, the Administrator refers the matter to an Administrative Law 
Judge, who will convene a hearing and issue a decision in accordance 
with Sec.  29.10(c). This clarification aligns the final rule with 
Secretary's Order 1-2002, 67 FR 64272, Oct. 17, 2002, which provides 
that an Administrative Law Judge's decision in a program deregistration 
is only subject to discretionary review by the Administrative Review 
Board.
Reinstatement of Program Registration (Sec.  29.9)
    The Department received one comment on this section. The commenter 
agreed with the proposed text on reinstatement of program registration.
    Response: We are promulgating final Sec.  29.9 as proposed.
Hearings for Deregistration (Sec.  29.10)
    Four commenters addressed proposed changes to Sec.  29.10, which 
sets the requirements for deregistration hearings. One commenter agreed 
with the proposed changes. Another commenter opposed the provisions in 
this section on the basis that hearings for deregistration should be 
kept at the State level. A third commenter asked if this section 
applies to programs registered with State Apprenticeship Agencies. 
Another commenter indicated that the public had not been allowed 
sufficient time to review the Office of Administrative Law Judges 
hearing rules at 29 CFR part 18, which will apply to deregistration 
hearings. This commenter also suggested that the proposed changes to 
the method of appeal in existing Sec.  29.9 would reduce access to due 
process of law. The commenter suggested that a hearing before an 
Administrative Law Judge, as established in Sec.  29.10, differs 
considerably from proceedings before a hearing officer or a trial by 
jury.
    Response: We disagree with the commenter's assertions that the 
Administrative Law Judge procedures would reduce access to due process 
and that the public has not been allowed sufficient time to review the 
Office of Administrative Law Judges hearing rules at 29 CFR part 18. 
The applicable rules of procedure at 29 CFR part 18 provide uniform 
rules for the conduct of hearings for a wide range of Department of 
Labor programs. These rules are consistent with the Administrative 
Procedure Act's requirements for the conduct of agency adjudications. 
However, upon review further, we have determined that it is more 
appropriate for the notice from the Administrative Law Judge to refer 
to the request as a request for a hearing, rather than a request for a 
review, as proposed in the NPRM. We have revised 29.10(b) accordingly.
    We disagree with the commenter's assertion that hearings for 
reinstatement of program registration should be kept at the State 
level. Under existing Sec.  29.9 such hearings are conducted at the 
Federal level. Final Sec.  29.10 merely changes the Federal official 
conducting the hearing.
    We note that the requirements for hearings for deregistration apply 
to all programs that have been registered for Federal purposes, 
regardless of whether the program is registered with the Office of 
Apprenticeship or for Federal purposes with a recognized State 
Apprenticeship Agency.
    Except as noted, we will promulgate final Sec.  29.10 as proposed.
Limitations (Sec.  29.11) and Complaints (Sec.  29.12)
    One comment was received on each of these two proposed provisions, 
both expressing support.
    The Department will promulgate Sec.  29.11 and Sec.  29.12 as 
proposed.
Recognition of State Apprenticeship Agencies (Sec.  29.13)
    Proposed Sec.  29.13 revises the provisions in existing Sec.  29.12 
that address the recognition of State Apprenticeship Agencies for 
Federal purposes and clarifies how the Office of Apprenticeship 
oversees the National Apprenticeship System. We received 125 comments 
on this section overall, 110 of which addressed specific provisions, 
including limiting recognition to the State Apprenticeship Agency; role 
of the State Apprenticeship Council; linkages with economic development 
and workforce investment systems; location of a State Apprenticeship 
Agency; requirements for resources to carry out the functions of a 
Registration Agency; reciprocal approval of programs and standards in 
the building and construction industries; Departmental review and 
approval of State apprenticeship legislation, regulations, policies, 
and operational procedures; application for recognition; and renewal 
and maintenance of recognition. Several commenters strongly opposed the 
revisions, asserting that the proposed changes were overly prescriptive 
and would significantly limit a State's authority to oversee registered 
apprenticeship functions within its jurisdiction. It is our 
responsibility to ensure that States recognized as having such 
authority continue to conform to the Federal requirements on which the 
recognition is based. As described below, the Department's recognition 
of a State Apprenticeship Agency pertains to granting Federal-State 
partnership in which the Department grants the State authority to act 
on our behalf as a Registration Agency. The provisions of parts 29 and 
30 set the conditions for a State to obtain and maintain that 
authority; these provisions are not meant to impact State authority to 
regulate apprenticeship for State purposes.
Roles of State Apprenticeship Agencies
    Twelve comments focused on proposed Sec.  29.13(a), which provides 
for ``recognition'' only of a State Apprenticeship Agency, and not a 
State Apprenticeship Council, and provides that the Department's 
recognition of the State Apprenticeship Agency confers ``non-exclusive 
authority'' to determine whether an apprenticeship program meets 
published standards and is eligible for those Federal purposes which 
require such a determination. Some commenters asserted that these 
changes conflict with their States' current law, whereby a State 
Apprenticeship Council oversees the State's apprenticeship system or 
promulgates regulations that oversee a State Apprenticeship Agency's 
work. Thus, the proposed changes would require revisions to State 
apprenticeship law and regulation. Another suggested that the 
Department should not dictate to the States the nature and structure of 
their government.
    Response: Our experience has shown that a government-to-government 
relationship with a State Apprenticeship Agency facilitates the

[[Page 64418]]

smooth functioning of the National Apprenticeship System, thus best 
protecting apprentices' interests. Although the members of a State 
Apprenticeship Council represent diverse employer, labor, and public 
interests and have knowledge and experience that enables them to be 
strong advocates for apprenticeship, many of them are not State 
officials. Therefore, members of the State Apprenticeship Council are 
not, ultimately, accountable to the State or to the Department for 
their actions. Such accountability is essential to the functioning of 
the National Apprenticeship System, especially where it comes to 
safeguarding the welfare of apprentices and promoting apprenticeship 
opportunity. State officials represent the interests of the entire 
State and are accountable for their actions. Accordingly, our proposal 
to extend recognition only to State Apprenticeship Agencies is 
necessary to ensure that the entity that is held accountable for 
conformity with part 29 is clearly identified. This proposal does not 
dictate the nature and structure of State government; it merely 
identifies the State government entity to which the Department will 
grant authority to act on our behalf as a Registration Agency. The 
existing regulations do not specify that a recognized Registration 
Agency must be a government cabinet-level agency. Changes to Sec.  
29.13(a) clarify this requirement and further align the proposed 
regulations for the National Apprenticeship System with the National 
Apprenticeship Act, which states that the Department is to ``cooperate 
with State agencies engaged in the formulation and promotion of 
standards of apprenticeship.'' Therefore, we have made no changes to 
Sec.  29.13(a)(1).
Role of State Apprenticeship Councils
    We received twenty (20) comments regarding proposed Sec.  
29.13(a)(2), which consolidates the provisions on State Apprenticeship 
Councils. Several commenters asserted that the current roles and 
responsibilities of State Apprenticeship Councils and State 
Apprenticeship Agencies work well, and questioned the need to adjust 
this system. Many expressed concern that we are eliminating State 
Apprenticeship Councils. One commenter suggested that removing a State 
Apprenticeship Council's decision-making role would significantly 
reduce the level of participation from key stakeholders, potentially 
creating far-reaching negative effects for apprenticeship programs. 
Another commenter questioned why the proposed regulations do not 
identify acceptable State Apprenticeship Council membership, as 
provided in existing part 29.
    Response: As described above, we have determined that the effective 
functioning of the Federal-State partnership in the registered 
apprenticeship system requires a direct relationship between Federal 
and State agencies. However, while we no longer recognize State 
Apprenticeship Councils for registration purposes, we are not 
eliminating the requirement to establish a State Apprenticeship Council 
for regulatory or advisory purposes. Members of State Apprenticeship 
Councils will continue to be critical stakeholders, whose active 
participation is essential for the successful operation of registered 
apprenticeship programs in their States. Based on the new 
organizational system, we are limiting our direct regulation to 
requirements applicable to recognized State Apprenticeship Agencies. 
Given that the final rule makes recognized State Apprenticeship 
Agencies responsible for registered apprenticeship for Federal purposes 
in their States, we have determined that it is appropriate for such 
Registration Agencies to direct the operations of the corresponding 
State Apprenticeship Councils. Accordingly, we have revised Sec.  
29.13(a)(2) to clarify that a State Apprenticeship Council operates 
under the direction of the State Apprenticeship Agency. We reiterate 
that Sec. Sec.  29.13(a)(2)(i) and (ii) carry forward provisions from 
the existing regulations pertaining to State Apprenticeship Council 
membership criteria. Except as noted, we are promulgating Sec.  
29.13(a)(2) as proposed.
Linkages With Economic Development and Workforce Investment
    Two commenters asserted that the Department lacked statutory 
authority to require or mandate that the State Apprenticeship Agency 
integrate with the State's economic development strategies and public 
workforce investment system, as provided in Sec.  29.13(a)(6). Another 
commenter expressed support for this provision, and suggested that the 
Department also should encourage registered apprenticeship programs to 
develop agreements with community colleges.
    Response: The National Apprenticeship Act's broad mandate to 
safeguard the welfare of apprentices fully authorizes the proposed 
requirement for integration of registered apprenticeship into economic 
and workforce development efforts. This requirement is part of a 
broader trend among Federal and State workforce development programs to 
increase coordination across programs in an effort to more effectively 
meet the needs of businesses, workers, and regional areas. As part of 
the workforce investment system, registered apprenticeship programs 
should align closely with regionally coordinated talent development 
strategies aimed at providing workers with the 21st century skills that 
businesses and industries demand. However, upon review, we have 
concluded that the terms of proposed Sec.  29.13(a)(6) regarding 
linkages and coordination with economic development and the workforce 
investment system fit within proposed Sec.  29.13(a)(4), which pertains 
to basic standards, criteria, and requirements for program registration 
and/or approval. Therefore, proposed Sec.  29.13(a)(6) has been 
consolidated into Sec.  29.13(a)(4). Further, we have revised 
terminology that refers to the workforce system so it includes the 
phrase ``publicly-funded workforce investment system,'' to clarify that 
public funding can support these linkages and coordination across State 
Apprenticeship Agencies and the States' workforce investment and 
economic development strategies. This revision aligns with efforts to 
expand apprenticeship into high-growth, high-demand occupations.
Location of State Apprenticeship Agency
    We received ten comments opposing the proposed deletion of existing 
Sec.  29.12(b)(1), which sets requirements for the location of the 
State Apprenticeship Agency in the State Department of Labor or in the 
agency of State government having jurisdiction of laws and regulations 
governing wages, hours, and working conditions. Eight commenters 
suggested that relocating a State Apprenticeship Agency would likely 
diminish the safety, health, and welfare of apprentices in the 
workplace. One commenter stated that as a result of the rule change, 
the apprenticeship program could be placed within a department or 
division of State government that is not familiar with or qualified to 
address issues pertaining to registered apprenticeship. Another 
commenter stated that the rule change is counter to the integration of 
apprenticeship into the public workforce development system and would 
interfere with seamless integration of worker protection 
considerations. One commenter stated that as a result of the rule 
change, the apprenticeship program could be placed within a department 
or division of State

[[Page 64419]]

government that is not familiar with or qualified to address issues 
pertaining to registered apprenticeship.
    Response: We disagree that the proposed deletion of regulatory 
provisions specifying the location of a State Apprenticeship Agency 
will negatively impact the welfare of apprentices, and that it counters 
efforts to integrate registered apprenticeship with the public 
workforce development system. Historically, registered apprenticeship 
functions have resided in the area of State government that oversees 
wage and hour functions, and this approach has functioned very well for 
most States. However, many State governments have reorganized, and the 
various State governments function differently. In light of these 
organizational changes, the final rule affords the flexibility 
necessary for States to determine the most appropriate location for 
registered apprenticeship, based on their organizational configuration. 
Regardless of that location, a recognized State Apprenticeship Agency 
still must meet the requirements of this part, including provisions in 
Sec.  29.5 that safeguard the welfare of the apprentice, and provisions 
in Sec.  29.13(a)(4) requiring demonstration of linkages with the 
State's economic development strategies and public workforce system. 
Further, the effective functioning of the Federal-State partnership for 
registered apprenticeship does not require specificity for the 
organizational location of the State government agency.
Resources
    Proposed Sec.  29.13(b)(2), which required that State 
Apprenticeship Agencies provide sufficient budget and staff to carry 
out the functions of a Registration Agency, also generated considerable 
opposition. Four commenters stated that the proposed requirements in 
Sec.  29.13(b)(2) are worthwhile guidelines for Registration Agencies, 
but asserted that the Department does not allocate sufficient staff and 
budget to carry out its responsibilities in the twenty-five States 
where the Office of Apprenticeship is the Registration Agency. Four 
commenters indicated that the Department does not have the authority to 
dictate budget mandates to the States.
    Response: The Department is currently the Registration Agency in 25 
States, and provides dedicated staff and resources sufficient to 
fulfill its responsibilities for registered apprenticeship for Federal 
purposes in those States. In the other 25 States, where we have 
conferred recognition to States to register apprentices and 
apprenticeship programs for Federal purposes under the current 
regulations, it is our responsibility to ensure that we provide 
recognition to States that have dedicated the necessary resources for 
such functions. The proposed rule's provisions for sufficient resources 
do not dictate budget mandates; the responsibility for establishing 
budget mandates remains with State governments. However, we have been 
persuaded by comments that it is more appropriate to use language that 
is less prescriptive than ``allocate sufficient budget and staff'' to 
describe how a Registration Agency will address these functions. 
Therefore, we have revised final rule Sec.  29.13(b)(2) to require 
simply that the State provide ``sufficient resources'' to carry out the 
functions of a Registration Agency. In the final rule, provisions 
establishing that the functions of a Registration Agency, which include 
outreach and education, registration of programs and apprentices, 
provision of technical assistance, and monitoring, as required to 
fulfill the requirements of this part are unchanged.
Reciprocal Approval
    We received thirty-eight comments about proposed Sec.  29.13(b)(7), 
which would expand current provisions for reciprocal approval by 
eliminating the exception for programs and standards in the building 
and construction industries. The majority of comments opposed the 
proposal, and many requested that DOL reinstate the exception for 
building and construction industries. Two commenters asked DOL to 
clarify why the exemption was originally granted, why the proposed 
revisions would eliminate the exemption, and how this action will 
impact other related regulations, such as those pertaining to Federal 
works projects subject to the Davis-Bacon Act.
    More than a dozen commenters raised issues associated with 
variations among State Apprenticeship Agency requirements for program 
registration. One set of commenters addressed variations in wage rates, 
asserting that it is unfair and economically disruptive to allow trades 
from one State to use the pay scale from their own State to bid on work 
in other States, particularly for apprentices employed on projects 
subject to the Davis-Bacon Act. Other commenters asserted that States 
have different quality (e.g., training hours) and licensing standards, 
which the proposed rule fails to recognize. A commenter stated that the 
proposed rule lacks language that would require a visiting sponsor 
registered in another State to meet or exceed existing local 
requirements for apprenticeship registration. A State asked DOL to 
clarify whether the host State's laws or the home State's laws would 
apply to the apprentice.
    Response: The exemption for reciprocal approval for apprenticeship 
programs in the construction industry in the current regulations was 
based on the view that the seasonality of construction work could 
potentially interrupt an apprentice's on-the-job learning, require that 
an apprentice be supervised by several employers, and require provision 
of related instruction in several places, rather than one location, 
thereby negatively impacting the quality of apprenticeship programs in 
the construction industry. With advances in technology to assist in the 
provision of related instruction and supervision of apprentices, the 
Department believes that these arguments for exempting construction 
industry programs from reciprocal approval are no longer valid. In 
particular, the use of electronic media in related instruction, as 
permitted by final Sec.  29.2, will provide construction apprenticeship 
programs with the ability to ensure consistency in related technical 
instruction across the country, regardless of geographic location. High 
quality standards for apprenticeship programs can be attained in the 
construction industry, regardless of the seasonal nature of 
construction work. Therefore, the extension of reciprocal approval to 
construction industry programs, as well as to non-construction 
programs, will enable the National Apprenticeship System to further 
address the apprenticeship needs of businesses and labor.
    We acknowledge that commenters have raised important concerns about 
differences between the home States' and the host States' requirements. 
Revisions to Sec.  29.13(b)(7) were intended to provide program 
sponsors registered for Federal purposes in one State with fairness in 
contractor bidding on Federal public works projects in another State 
that are subject to the Davis-Bacon Act, while still safeguarding the 
welfare of registered apprentices. We agree that the application of a 
home State's wage and hour and apprentice ratios in a host State could 
confer an unfair advantage to an out-of-state contractor bidding on a 
Federal public works project. Such an outcome would be unacceptable. 
That is why, in all instances where we have negotiated memoranda of 
understanding with recognized States to arrange for reciprocal approval 
of apprenticeship programs in the building and construction trades, we 
have consistently required that the wage and hour and apprenticeship 
ratio

[[Page 64420]]

requirements of the host State apply. As stated in the Federalism 
section of the Administrative Requirements discussion in the NPRM, the 
extension of reciprocal approval to the construction industry programs 
allows a State Registration Agency to retain authority to enforce its 
State labor law, such as provisions covering apprentice wage rates and 
ratios. For further explanation, we have added language to the final 
rule to clarify that the program sponsor seeking reciprocal approval 
must comply with the host State's wage and hour and apprentice ratio 
standards. With this clarification, final Sec.  29.13(b)(7) prohibits 
an out-of-state program sponsor seeking reciprocal approval from a host 
State from gaining a competitive advantage in registering and operating 
apprenticeship programs for Federal purposes. Extension of reciprocal 
approval in final Sec.  29.13(b)(7) will not impact a State's 
implementation of regulations pertaining to Federal works projects 
subject to the Davis Bacon Act. We further emphasize that final Sec.  
29.13(b)(7) does not address other aspects of a host State's 
legislative, regulatory, or procedural requirements for registered 
apprenticeship for State or local purposes because part 29 pertains to 
registered apprenticeship for Federal purposes. Issues such as 
licensure requirements and contributions to a State apprenticeship 
training fund are State matters and are not covered by the requirements 
for reciprocal approval for Federal purposes in final Sec.  
29.13(b)(7).
State Apprenticeship Legislation, Regulations, Policies, and 
Operational Procedures
    Twenty-seven commenters expressed concerns about proposed Sec.  
29.13(b)(9), which explicitly requires State Apprenticeship Agencies to 
submit proposed modifications in the State's apprenticeship 
legislation, regulations, policies, and/or operational procedures for 
Departmental review and approval, prior to implementation, for 
conformity with the National Apprenticeship Act and the implementing 
regulations in 29 CFR parts 29 and 30.
    Many comments expressed concern that proposed Sec.  29.13(b)(9) 
ignores a State's authority to set policy and establish law to meet the 
unique needs of its industry and citizens. One commenter asserted that 
this change usurps States' authority and exceeds the authority granted 
by the National Apprenticeship Act. Other commenters asserted that the 
Office of Apprenticeship's required review will inhibit the State 
regulatory process and decrease State government's responsiveness to 
the public.
    Response: Given the National Apprenticeship Act's broad mandate for 
the Department to safeguard the welfare of apprentices, the proposed 
requirement for Departmental review, prior to implementation, of a 
State's revision to an approved apprenticeship law is within our 
authority under the Act.
    Further, the requirement is necessary for the Department's 
management of the National Apprenticeship System. Before it is 
permitted to register apprentices and apprenticeship programs, for 
Federal purposes, a State wishing to participate in the National 
Apprenticeship System must submit its apprenticeship law and other 
information (Sec. Sec.  29.13(a) and (b)) to the Department for a 
determination that they conform to the requirements of Federal 
apprenticeship law. But, the State Apprenticeship Agency's 
responsibility to follow Federal law does not end there. Rather, a 
recognized State Apprenticeship Agency must continue to conform with 
the requirements of Federal law, particularly when the Agency wants to 
make changes to is own laws or regulations. Recent experience with 
reviews of recognized State Apprenticeship Agencies has underscored the 
need for the Department to monitor States' efforts to modify their 
apprenticeship laws, as they pertain to registered apprenticeship for 
Federal purposes. The Office of Apprenticeship's reviews have 
repeatedly identified provisions of State laws and regulations that 
were not consistent with Federal apprenticeship law; this has led to 
our requiring State Apprenticeship Agencies to take the corrective 
action necessary for them to attain conformity with parts 29 and 30 and 
with the National Apprenticeship Act.
    Notice to the Office of Apprenticeship and an opportunity to review 
proposed changes to a State's apprenticeship law, regulation, and 
policies are necessary for Departmental oversight. However, the effect 
of purpose of proposed Sec.  29.13(b)(9) will be to facilitate the 
Department's management of the National Apprenticeship System, not to 
usurp State authority to establish State law and policy. Accordingly, 
and in recognition of the concerns raised by commenters, we have 
revised Sec.  29.13(b)(9) to provide that a State must submit all 
proposed modifications in apprenticeship legislation, regulations, 
policies and/or operational procedures for Office of Apprenticeship 
review and concurrence, rather than approval. The Office of 
Apprenticeship's ``concurrence'' will simply reflect a finding that the 
proposed modification conforms to part 29 and that implementation of 
the proposal will not affect the State's recognition status. If the 
Office of Apprenticeship finds that a proposed modification does not 
conform to part 29, it will notify the State of its concerns and work 
with the State to resolve them, providing technical assistance as 
appropriate. This will provide the State and Office of Apprenticeship 
with an opportunity to identify and work out issues that potentially 
affect a State's recognition status before the proposals take effect 
and must be undone to preserve recognition. The State will be notified 
of the Office of Apprenticeship's findings as to conformity within 45 
days from the date that the Office of Apprenticeship receives the 
proposed modification, as provided by Sec.  29.13(e)(4).
    Although the process for Office of Apprenticeship review and 
concurrence of a State's apprenticeship legislation, regulations, 
policies, and/or operational procedures may extend the time necessary 
for modifications, the potential imposition of additional time is 
justified by the need to ensure that revisions to State apprentice law, 
regulations, policies, and procedures conform to parts 29 and 30 and 
the National Apprenticeship Act.
    Registration Agencies can help to maximize the efficiency of the 
process by notifying the Department of any modifications under 
consideration at the earliest opportunity. Further, States that proceed 
with revisions prior to completion of the Department's review and 
concurrence process can minimize the disruption that would result from 
subsequent Departmental non-concurrence through the inclusion of a 
saving clause. Such a clause could, for example, revive the text which 
was superseded by a modification to which the Department did not 
concur, or place the reader on notice that the revision would take 
effect only if or when the Department concurred with the change.
Application for Recognition
    Three commenters raised concerns about proposed Sec.  29.13(c), 
which establishes requirements for State Apprenticeship Agencies to 
apply for recognition from the Department. One commenter suggested that 
State Apprenticeship Agencies recognized by the Department under the 
current regulations should only be required to renew their status, not 
reapply for recognition. Another commenter asserted that requiring 
State

[[Page 64421]]

Apprenticeship Agencies to reapply for recognition diverts resources 
from program implementation and would interfere with funding and budget 
planning. Another stated that DOL currently has the authority to 
withdraw its recognition of State Apprenticeship Agencies for failure 
to conform to this part, and there is no need to place further 
reporting and oversight requirements on State Apprenticeship Agencies 
to reapply for recognition within 1 year of the effective date of the 
rule.
    Response: This rulemaking significantly revises the substantive 
provisions of part 29. Although the reapplication process for 
recognition will require use of resources to prepare and submit 
materials specified in Sec.  29.13(c), we have determined that it is 
absolutely essential to ensure that State Apprenticeship Agencies 
comprehensively conform to the new requirements of part 29, as a pre-
condition for recognition. However, we acknowledge that an adequate and 
reasonable response to these new requirements will likely require more 
than the 1 year provided by the NPRM. Therefore, final Sec.  29.13(c) 
establishes a 2-year time frame from the effective date of the final 
rule for currently recognized States seeking continued recognition to 
submit required documentation to the Office of Apprenticeship. This 
means that States seeking continued recognition will have 2 years from 
the effective date of this final rule to make any changes necessary for 
compliance with this part. We also recognize that circumstances may 
arise which provide good cause for extension of this 2 year time frame. 
Final Sec.  29.13(c) carries forward a proposed provision that allows 
States to submit written requests for extension of time within which to 
comply with the requirements of this part. Except as noted, final Sec.  
29.13(c) is promulgated as proposed.
Renewal and Maintenance of Recognition
    Five commenters addressed proposed Sec.  29.13(d), which 
establishes a 5 year period for recognition of a State Apprenticeship 
Agency by the Department and provides a process for renewal and 
maintenance of recognition. Four commenters stated that DOL currently 
has the authority to withdraw recognition of a State Apprenticeship 
Agency for failure to conform to part 29 so there is no need to place 
further requirements on State Apprenticeship Agencies to renew their 
recognition every 5 years. One commenter asserted that requiring State 
Apprenticeship Agencies to renew their recognition diverts resources 
from program implementation and would interfere with funding and budget 
planning.
    Response: Existing regulations confer open-ended recognition on 
State Apprenticeship Agencies for Federal purposes and do not clearly 
specify that a State Apprenticeship Agency must continue to meet 
regulatory requirements for continued recognition. When the Department 
confers recognition on a State Apprenticeship Agency to register 
apprenticeship programs for Federal purposes, it is our responsibility 
to ensure that the basis for recognition, State apprenticeship law, 
regulation, policies, plans, and procedures, continues to conform to 
Federal requirements. We anticipate periodic change, as State 
Apprenticeship Agencies respond to the changing workforce needs of 
business, industry, and labor. Section 29.13(d) establishes 
requirements for renewal and maintenance of recognition to ensure that 
the Department has the opportunity to review and determine if the State 
apprenticeship laws, regulations, policies, plans, and procedures 
continue to conform to Federal requirements.
    In the Department's view, a 5 year period provides a reasonable 
level of continuity for State Apprenticeship Agencies, while providing 
an efficient way to ensure that State Apprenticeship Agencies remain in 
conformity with Federal requirements. As discussed in the NPRM, the 
monitoring and reviews outlined in Sec.  29.13(e) will form the basis 
for the Office of Apprenticeship's decision whether to continue 
recognition every 5 years. Therefore, the burden on State 
Apprenticeship Agencies for this 5 year renewal and maintenance of 
recognition will be minimal. We have revised final Sec.  29.13(d) to 
clarify that the notification to States regarding conformity with this 
part will be based on the Office of Apprenticeship's monitoring of a 
State Registration Agency's compliance, as provided by Sec.  29.13(e). 
We have revised Sec.  29.13(d) accordingly.
Compliance
    No comments were received on proposed Sec.  29.13(e), which is a 
new provision that provides for on-site review, self-assessment, and 
monitoring of the State's apprenticeship law and procedures, and is 
based on the Department's existing procedures for determining if State 
Apprenticeship Agencies are complying with part 29. However, upon 
further review we noted two non-substantive changes were necessary to 
correct grammatical errors, and we have revised final Sec.  29.13(e) 
accordingly.
Accountability/Remedies for Non-conformity
    One comment was received on proposed Sec.  29.13(f), a new 
provision which provides for the steps to be taken if a State 
Apprenticeship Agency is found to be out of compliance with part 29. 
Those steps, which are based on the Department's current practice of 
compliance assistance, include the provision of technical assistance, 
and, where problems are found, conferral of ``Conditional Recognition'' 
for 45 days during which the State Apprenticeship Agency must submit a 
corrective action plan to remedy the conforming activity for failure to 
maintain compliance. The commenter suggested extending the period of 
``Conditional Recognition'' to 90 days, asserting that additional time 
might be necessary to change State law that was found to be out of 
conformity with 29 CFR part 29.
    Response: We disagree with the recommendation to extend the period 
of Conditional Recognition to 90 days. The period of Conditional 
Recognition established by 29.13(f)(ii) pertains to the time frame 
during which the State Apprenticeship Agency must submit its corrective 
action plan. Paragraph (f)(ii) does not establish the time frame in 
which a State must actually remedy the non-conforming activity. The 45 
day period is consistent with current practice, and provides sufficient 
time to submit a corrective action plan. However, upon further review 
we have noted that the requirements for submission of a corrective 
action plan did not specify where the corrective action plan should be 
submitted. Therefore, we have revised Sec.  29.13(f) to clarify that a 
State Apprenticeship Agency that was placed on Conditional Recognition 
must submit a corrective action plan to the Office of Apprenticeship.
Denial of State Apprenticeship Agency Recognition
    No comments were received on proposed Sec.  29.13(g), which is 
based on existing Sec.  29.12(d) and simplifies and clarifies the 
process for determining whether to deny a State Apprenticeship Agency 
recognition and provides the procedures for appeal of that decision. 
However, upon further review we have determined that further 
clarification was needed with regard to informing a State 
Apprenticeship Agency about a request for administrative review of a 
denial of recognition. We have revised Sec.  29.13(g) to clarify that 
the written notice to a State Apprenticeship Agency denying

[[Page 64422]]

recognition must also specify that a request for administrative review 
of a denial of recognition may be made within 30 calendar days of 
receipt of a notice of denial from the Department. We have also added 
provisions to paragraph (4) to clarify that the Administrative Review 
Board must decide any case it accepts for review within 180 days of the 
close of the record and that, if not so decided, the Administrative Law 
Judge's decision constitutes final agency action. This clarification 
aligns final Sec.  29.13(g) with provisions for administrative review 
in final Sec.  29.10(c).
State Apprenticeship Programs
    No comments were received on proposed Sec.  29.13(h), which carried 
forward provisions for registration with the Office of Apprenticeship 
in the event that a State Apprenticeship Agency is not recognized by 
the Office of Apprenticeship for Federal purposes, that such 
recognition has been withdrawn, or that no State Apprenticeship Agency 
exists. Section 29.14(e) also establishes requirements for registration 
with the Office of Apprenticeship for program sponsors affected by 
derecognition of a State Apprenticeship Agency. To avoid duplication in 
the final rule, we have deleted proposed Sec.  29.13(h)(2) and revised 
final Sec.  29.14(e) to incorporate provisions from proposed Sec.  
29.13(h)(2) that provide opportunities for a program sponsor to request 
registration with the Office of Apprenticeship where a State 
Apprenticeship Agency does not exist or a State Apprenticeship Agency 
is not recognized by the Office of Apprenticeship for Federal purposes.
    No comments were received on proposed Sec.  29.13(i) and Sec.  
29.13(j). Therefore, we are promulgating 29.13(i) and 29.13(j) as 
proposed.
Derecognition of State Agencies (Sec.  29.14)
    The Department received one comment on proposed revisions to the 
rules on derecognition of State Apprenticeship Agencies (existing Sec.  
29.13, proposed Sec.  29.14). The commenter generally supported the 
Department's proposed changes to Sec.  29.14, but suggested new 
penalties such as clarification that Federal funds will be withheld 
from State Apprenticeship Agencies that unfairly restrict 
apprenticeship opportunities in a manner inconsistent with parts 29 and 
30 and the National Apprenticeship Act.
    Response: The commenter did not provide sufficient justification 
for the establishment of an additional penalty beyond derecognition. 
Further, since the Department provides no funds to State Apprenticeship 
Agencies, the Department does not have the statutory authority to 
withhold Federal funds from State Apprenticeship Agencies.
    Upon further review, we have also added provisions to Sec.  
29.14(c)(3)(i) to clarify that the Administrative Review Board must 
decide any case it accepts for review within 180 days of the close of 
the record and that, if not so decided, the Administrative Law Judge's 
decision constitutes final agency action. This clarification aligns 
final Sec.  29.14(c) with provisions for administrative review in final 
Sec.  29.10(c).
    Also, as discussed above Sec.  29.14(e) has been revised to 
incorporate provisions for a program sponsor to request registration 
with the Office of Apprenticeship where a State Apprenticeship Agency 
does not exist or a State Apprenticeship Agency is not recognized by 
the Office of Apprenticeship for Federal purposes.

III. Administrative Requirements for the Rule

Executive Order (E.O.) 12866

    This final rule to revise 29 CFR part 29 is a significant 
regulatory action under Sec.  3(f) of Executive Order 12866 because it 
raises ``novel legal or policy issues arising out of legal mandates, 
the President's priorities, or the principles'' set forth in the E.O. 
Accordingly, pursuant to the Executive Order, it was reviewed by OMB. 
Revisions to 29 CFR part 29 pertain to the terms and conditions for an 
apprenticeship program sponsor to register program standards and 
apprentices for Federal purposes, and for the Department to grant 
authority to a State Registration Agency to act on behalf of the 
Department to register apprenticeship programs and standards for 
Federal purposes. The benefits of recognition of an apprenticeship 
program and apprentices for Federal purposes are to meet requirements 
of a Federal contract, grant, agreement or arrangement dealing with 
apprenticeship; and requirements for any Federal financial or other 
assistance, benefit, privilege, contribution, allowance, exemption, 
preference or right pertaining to apprenticeship. Since this final rule 
is the first revision to regulations for the National Apprenticeship 
System since the Department first promulgated the rule in 1977, it 
raises novel policy issues. However, the Department has determined that 
the costs to program sponsors and State Registration Agencies 
associated with registering apprenticeship programs and apprentices 
under these revised terms and conditions are only minimally different 
from those pertaining to the current requirements of the current 29 CFR 
part 29. These revisions will not have an annual effect on the economy 
of $100 million or more nor will they adversely affect the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities in any material way. Therefore, we conclude 
that this final rule is not economically significant and it is not 
subject to Sec.  6(a)(3)(C) of the Executive Order.

Paperwork Reduction Act

    This final rule requires Registered Apprenticeship Program Sponsors 
and apprentices to submit Apprenticeship Agreement forms to DOL or to 
the appropriate State Registration Agency. These requirements were 
previously reviewed and approved for use by OMB under 29 U.S.C. 50 and 
29 CFR 29.1, and assigned OMB control number 1205-0223 under the 
provisions of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 
(PRA). Additionally, OMB previously approved the Department's 
information collection request for the Apprenticeship Agreement in 
Sec.  29.7, including collection of the apprentice's Social Security 
Number (OMB Control Number 1205-0223, expiration date of October 31, 
2008. The Department is in the process of obtaining an extension of 
this form for three additional years). The Department has determined 
that this final rule contains no new information collection 
requirements, nor that any of these requirements are substantively or 
materially modified by the changes contained herein.

Executive Order 13132: Federalism

    The Department has reviewed the final rule in accordance with E.O. 
13132 and has determined that it has Federalism implications because it 
has substantial direct effects on States and the relationship between 
the National government and the States. As noted in the NPRM, the 
Department developed the proposed rule based upon advice from the 
Advisory Committee on Apprenticeship (ACA), and in consultation with 
State Apprenticeship Agencies and the National Association of State and 
Territorial Apprenticeship Directors (NASTAD), the organization 
representing apprenticeship officials from the District of Columbia, 27 
States, and three Territories. The ACA, which contains representatives 
of two associations of State labor and apprenticeship officials 
(including NASTAD), offered specific suggestions on matters relating to 
apprenticeship

[[Page 64423]]

program standards, and registration and deregistration of 
apprenticeship programs. The proposed rule incorporated the ACA's 
recommendations, and as discussed above in the comments and regulatory 
changes, the final rule carries forward these recommendations.
    Although NASTAD and State Apprenticeship Agencies did not have 
direct input into the development of sections in the proposed and final 
rule that directly affect States and the relationship between the 
National government and the States, the Department gave thorough 
consideration to NASTAD's recommendations on existing regulations 
submitted in a letter from the President of NASTAD in December 2006, in 
response to a request from the Office of Apprenticeship. NASTAD's 
recommendations for the proposed rule pertained to the roles of State 
Apprenticeship Councils and State Apprenticeship Agencies, composition 
of State Apprenticeship Councils, requirements for reciprocal approval 
for programs registered in one State seeking recognition in another 
State, the final rule's effect on recognition status for currently 
recognized States Registration Agencies, and the name of the DOL entity 
responsible for oversight of the National Apprenticeship System.
    As stated in the NPRM and discussed further below, we considered 
this input and adopted most of NASTAD's recommendations in developing 
the proposed and final rule. Additionally, in our review of comments 
submitted by NASTAD and States on the proposed rule, we have identified 
six areas of concern for States, some of which are consistent with 
NASTAD's recommendations for revisions. The areas are: increased 
administrative burdens on States; impact on a State's internal 
organizational structure; requirements for linkages with the workforce 
investment system; expansion of reciprocal approval for programs and 
standards in the building and construction industries; Departmental 
review of State apprenticeship laws, regulations, policies and 
procedures; and recognition status of currently recognized States 
Registration Agencies.
    Where appropriate and feasible for the effective functioning of the 
Federal-State partnership over registered apprenticeship for Federal 
purposes, we have revised the final rule to ease the administrative 
burdens on States. For other issues pertaining to this Federal-State 
partnership, we have determined that proposed requirements in the final 
rule are necessary to ensure conformity with Federal law, and 
consistency across the National Apprenticeship System.
    As noted in the NPRM and in discussions above, the final rule 
affects internal State organizational structures with regard to State 
Apprenticeship Agencies and State Apprenticeship Councils. Although no 
changes have been made to the final rule regarding limiting recognition 
to State Apprenticeship Agencies, we have set forth further explanation 
for this requirement. We have determined that because a direct 
relationship between Federal and State agencies is necessary for the 
smooth functioning of the National Apprenticeships System, the 
Department will only grant recognition to a State Apprenticeship Agency 
to act as a Registration Agency for registered apprenticeship for 
Federal purposes. The final rule requires recognized States to 
establish and continue to use a State Apprenticeship Council, which may 
serve either an advisory or a regulatory role. Accordingly, compliance 
with the final rule may require a State seeking recognition as a 
Registration Agency to modify its internal organizational structures 
pertaining to its State Apprenticeship Agency and its State 
Apprenticeship Council.
    We recognize that the National Apprenticeship Act and the Workforce 
Investment Act do not authorize the Department to mandate that a 
State's workforce investment system and economic development strategies 
include registered apprenticeship. Although the Department encourages 
integration, and a State Apprenticeship Agency may seek such 
integration, the authority for internal State organizational issues 
remains with the State. Therefore, the final rule simply requires a 
State Apprenticeship Agency seeking recognition to demonstrate how it 
is pursuing linkages and coordination with the State's publicly funded 
workforce investment system and economic development strategies. As 
discussed in the NPRM, through increased coordination, State 
Apprenticeship Agencies can promote registered apprenticeship to a 
broader audience and further expand apprenticeship into high growth, 
high demand occupations.
    The NPRM also noted that the proposed extension of requirements for 
reciprocal approval of programs in building and construction industries 
registered in other States may also raise questions regarding which 
States' registration requirements would apply. As discussed above, the 
final rule clarifies that program sponsors seeking reciprocal approval 
from a ``host'' State must meet the host State's wage and hour 
provisions and apprenticeship ratio standards. Therefore, State 
Registration Agencies retain the authority to enforce wage and hour 
provisions and apprenticeship ratio standards in their respective 
State's labor law.
    Commenters asserted that the requirement for Office of 
Apprenticeship review and approval of proposed modifications to State 
apprenticeship legislation, regulation, policies and procedures prior 
to implementation usurps State authority. The final rule clarifies that 
the National Apprenticeship Act's broad mandate for the Department to 
safeguard the welfare of apprentices provides the Department with 
authority to ensure that a recognized State Apprenticeship Agency 
remains accountable for its conformity with Federal law. However, we 
recognize that a State has sovereign power and authority to establish 
State law and policy. To balance the interests of these two authorities 
(State authority to promulgate State law and policy, with the 
Department's authority to ensure that a recognized State remains 
accountable for conformity with Federal law), the final rule provides 
for the Office of Apprenticeship's concurrence on proposed 
modifications to State apprenticeship legislation, regulation, policies 
and procedures for Federal purposes. Provisions for review and 
concurrence are intended to provide a reasonable opportunity for the 
Department to inform recognized States of areas of nonconformity; the 
provisions are not intended to diminish or restrict a State's authority 
to establish State law and policy. A State's decision to establish 
State law or policy that does not conform to requirements of Federal 
apprenticeship law or regulations has consequences, which may include 
the derecognition of the State Apprenticeship Agency as the 
Registration Agency authorized to register apprenticeship programs and 
standards for Federal purposes. However, such recognition does not 
affect the State's authority to register apprenticeship programs and 
standards for State purposes.
    We have also extended the time frame for States seeking new or 
continued recognition as a Registration Agency to submit documentation 
specified in Sec.  29.13(a). The NPRM provided 1 year from the 
effective date of the final rule; the final rule provides 2 years from 
the effective date of the final rule in recognition of the burdens 
associated with transition period.
    Finally, we reiterate that the final rule pertains to registered 
apprenticeship for

[[Page 64424]]

Federal purposes. As with existing regulations, the final rule remains 
silent on matters pertaining to a State's registration and oversight of 
apprenticeship programs and apprentices for State or local purposes. 
The distinction between registered apprenticeship for Federal purposes 
and registered apprenticeship for State and local purposes serves to 
limit the scope of the Federal government's role in State government 
functions.

Unfunded Mandates Reform Act of 1995

    This regulatory action has been reviewed in accordance with the 
Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531, and E.O. 12875. 
The Department has determined that this rule does not include any 
Federal mandate that may result in increased expenditures by State, 
local or tribal governments, in the aggregate, or by the private 
sector, of $100 million or more in any one year, adjusted by the rate 
of inflation between 1995 and 2008 ($130 million). Accordingly, the 
Department has not included a budgetary impact estimate.

Assessment of Federal Regulations and Policies on Families

    The Department certifies that this final rule has been assessed 
according to Sec.  654 of Public Law 105-277, 112 Stat. 2681, for its 
effect on family well-being. The Department concludes that the rule 
will not adversely affect the well-being of the Nation's families. 
Rather, it should have a positive effect by safeguarding the welfare of 
registered apprentices.

Regulatory Flexibility Act (RFA)/ Small Business Regulatory Enforcement 
Fairness Act of 1996 (SBREFA)

    The Department has notified the Chief Counsel for Advocacy, Small 
Business Administration, and made the certification pursuant to the RFA 
at 5 U.S.C. 605(b), that this final rule will not have a significant 
economic impact on a substantial number of small entities. Under the 
RFA, no regulatory flexibility analysis is required where the rule will 
not have a significant economic impact on a substantial number of small 
entities. A small entity is defined as a small business, small not-for-
profit organization, or small governmental jurisdiction. 5 U.S.C. 
601(3)-(5). The definition of the term ``small entity'' does not 
include States or individuals. This rule revises and updates procedures 
for labor standards for registered apprenticeship programs administered 
by the States and the Department, and not by small governmental 
jurisdictions. There are approximately 250,000 separate employers who 
participate in roughly 29,000 registered apprenticeship programs. There 
are an estimated 468,000 apprentices in the National Apprenticeship 
System.
    Although there may be a substantial number of small businesses 
impacted by this rulemaking (at the most 250,000 employers), the 
Department does not believe that there will be a significant economic 
impact to these entities. Small businesses will not incur additional 
incremental costs from this rulemaking because the aspect of the rule 
most likely to impact small entities, program oversight, primarily 
applies to the responsibilities of Registration Agencies to monitor 
registered apprenticeship programs rather than imposing requirements on 
the registered apprenticeship programs. For example, final Sec.  29.5 
carries forward current program oversight requirements for program 
sponsors to comply with 29 CFR part 30, Equal Employment Opportunity 
regulations, which includes compliance reviews conducted by 
Registration Agencies. Final Sec.  29.6 imposes on Registration 
Agencies a new regulatory requirement to perform quality assurance 
assessments on registered apprenticeship programs as part of the 
Agencies' performance accountability responsibilities. While this is a 
new provision in part 29, the requirement to perform quality assurance 
assessments is long-standing. Pursuant to Circular 92-02, the Office of 
Apprenticeship guidance on quality assurance assessments issued in 
1991, Registration Agencies have assessed apprenticeship program 
performance to identify areas of strength and opportunities for 
improvement. The final rule's provisions for Equal Employment 
Opportunity Compliance Reviews and quality assurance assessments impose 
no assessment responsibilities on small programs or other programs. 
Compliance costs to program sponsors associated with program oversight 
will be the same as under current regulations.
    However, through comments on the NPRM, it has come to our attention 
that the program performance provisions in Sec.  29.6 may place an 
unintended burden on small apprenticeship program sponsors such as 
small businesses by potentially increasing the cost of maintaining 
conformity with this part or by potentially leading to deregistration 
of small apprenticeship programs. In particular, we are aware of 
concerns that the requirement in Sec.  29.6(c) that Registration 
Agencies evaluate program performance by comparing completion rates of 
programs in like industries, occupations, and geographic areas could 
possibly unfairly penalize programs operated by small businesses. We 
are also aware of concerns that the proposed Sec.  29.6(a) requirement 
that every program must have at least one registered apprentice could 
unfairly impact small apprenticeship programs that may experience short 
periods of time without any apprentices. To avoid such unintended 
consequences, the Department has made changes to these provisions in 
the final rule discussed below.
    As discussed above in the definitions in Sec.  29.2, program 
performance standards in Sec.  29.6, and program deregistration in 
Sec.  29.8, the Department has clarified the relevant provisions in the 
final rule to address concerns about compliance costs and burdens on 
small entities potentially associated with a Registration Agency's 
evaluation of programs' performance. In Sec.  29.6(a), the NPRM 
provided that every program must have at least one registered 
apprentice in order to be designated and retain designation as a 
registered apprenticeship program for Federal purposes. We are 
persuaded that there may be times when a sponsor may have a lag between 
training cycles and be without a registered apprentice for a short 
period of time and we recognize that small programs with fewer 
apprentices may encounter such situations more frequently than larger 
programs. Therefore, the final rule establishes a 1 year time frame 
during which a program sponsor may be without a registered apprentice 
so that normal program cycles will not lead to deregistration of small 
apprenticeship programs. By providing a period of up to one year so 
that the rule will not affect small programs that are without 
apprentices during the periods between training cycles, the revised 
Sec.  29.6(a) reduces administrative costs and burdens associated with 
small program sponsors potentially having to re-register their 
program(s) that could have otherwise been cancelled for nonconformity 
with proposed Sec.  29.6(a).
    We have revised Sec.  29.6(c) to address potential concerns that 
the requirement that Registration Agencies evaluate program performance 
by comparing completion rates of programs in like industries, 
occupations, and geographic areas could negatively impact small 
apprenticeship programs if Registration Agencies used these comparisons 
of completion rates to unfairly penalize programs operated by small 
businesses. To address these concerns and to minimize any potential 
unfair impact from the performance accountability provisions on small 
apprenticeship

[[Page 64425]]

programs, final Sec.  29.6(c) removes comparisons of completion rates 
across geographic areas, industries, and occupations; drops the 
reference that appeared in proposed Sec.  29.6(c) for the Registration 
Agency to ``take other appropriate action'' against such programs; and 
provides for evaluation of performance of registered apprenticeship 
programs based on comparison to the national average for completion 
rates. The preamble discussion of these provisions clearly explains 
that completion rate information is intended for a Registration 
Agency's use in identifying programs that may benefit from technical 
assistance and will not automatically lead to program deregistration. 
The final rule clarifies that completion rates may potentially factor 
into deregistration procedures only when the program demonstrates an 
ongoing pattern of very low completion rates over several years. The 
function of calculating completion rates and the provision of technical 
assistance by discussing ways to improve a program's completion rates 
has effectively been a part of a Registration Agency's oversight 
operations. These requirements will not create new compliance costs to 
program sponsors and the changes made to the final rule minimize 
burdens on programs sponsored by small entities by eliminating the risk 
of unnecessary program deregistration proceedings that may have been 
possible under proposed Sec.  29.6(c).
    With the addition of definitions for quality assurance assessment 
and completion rate in the definitions in final Sec.  29.2; and 
clarifications and revisions to program performance in final Sec.  29.6 
and program deregistration in final Sec.  29.8, the final rule 
minimizes compliance costs and reduces any potential burdens on small 
entities that may have resulted from the NPRM. Therefore, the 
Department certifies that this proposed rule will not have a 
significant impact on a substantial number of small entities, and as a 
result no regulatory flexibility analysis is required.
    As discussed above with regard to program performance standards in 
final Sec.  29.6, one commenter asserted the impact of the provisions 
for evaluation of apprenticeship programs qualifies the rule as a major 
rule under E.O. 12866 and SBREFA. The Department disagrees. As noted 
above, provisions for evaluation of program performance are necessary 
to ensure program quality and accountability in the National 
Apprenticeship System, and do not pertain to the establishment bid 
requirements for State and local construction projects. Therefore, the 
Department certifies that this final rule is not a major rule as 
defined by Sec.  804 of the SBREFA. 5 U.S.C. 804.

Executive Order 13175: Consultation and Coordination With Indian Tribal 
Governments

    The Department has reviewed this final rule in accordance with E.O. 
13175 and has determined that it does not have ``tribal implications.'' 
The proposed rule does not ``have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal government 
and Indian tribes, or on the distribution of power and responsibilities 
between the Federal government and Indian tribes.''

Executive Order 12988: Civil Justice

    This final rule has been drafted and reviewed in accordance with 
E.O. 12988, Civil Justice Reform, and will not unduly burden the 
Federal court system. The rule has been written so as to minimize 
litigation and provide a clear legal standard for affected conduct, and 
has been reviewed carefully to eliminate drafting errors and 
ambiguities.

Plain Language

    The Department drafted this Final Rule in plain language.

Catalogue of Federal Domestic Assistance Number

    This program is listed in the Catalog of Federal Domestic 
Assistance at Number 17.201.

List of Subjects in 29 CFR Part 29

    Apprentice agreement and complaints, Apprenticeability criteria, 
Program standards, registration and deregistration, Sponsor 
eligibility, State Apprenticeship Agency recognition and derecognition.

    Signed at Washington, DC, on October 15, 2008.
Brent R. Orrell,
Deputy Assistant Secretary, Employment and Training Administration.

0
For reasons stated in the preamble, the Department of Labor revises 29 
CFR part 29 to read as follows:

PART 29--LABOR STANDARDS FOR THE REGISTRATION OF APPRENTICESHIP 
PROGRAMS

Sec.
29.1 Purpose and scope.
29.2 Definitions.
29.3 Eligibility and procedure for registration of an apprenticeship 
program.
29.4 Criteria for apprenticeable occupations.
29.5 Standards of apprenticeship.
29.6 Program performance standards.
29.7 Apprenticeship agreement.
29.8 Deregistration of a registered program.
29.9 Reinstatement of program registration.
29.10 Hearings for deregistration.
29.11 Limitations.
29.12 Complaints.
29.13 Recognition of State apprenticeship agencies.
29.14 Derecognition of State apprenticeship agencies.

    Authority: Section 1, 50 Stat. 664, as amended (29 U.S.C. 50; 40 
U.S.C. 276c; 5 U.S.C. 301) Reorganization Plan No. 14 of 1950, 64 
Stat. 1267 (5 U.S.C. App. P. 534).


Sec.  29.1  Purpose and scope.

    (a) The National Apprenticeship Act of 1937, section 1 (29 U.S.C. 
50), authorizes and directs the Secretary of Labor ``to formulate and 
promote the furtherance of labor standards necessary to safeguard the 
welfare of apprentices, to extend the application of such standards by 
encouraging the inclusion thereof in contracts of apprenticeship, to 
bring together employers and labor for the formulation of programs of 
apprenticeship, to cooperate with State agencies engaged in the 
formulation and promotion of standards of apprenticeship, and to 
cooperate with the Office of Education under the Department of Health, 
Education, and Welfare * * *.'' Section 2 of the Act authorizes the 
Secretary of Labor to ``publish information relating to existing and 
proposed labor standards of apprenticeship,'' and to ``appoint national 
advisory committees * * *.'' (29 U.S.C. 50a).
    (b) The purpose of this part is to set forth labor standards to 
safeguard the welfare of apprentices, promote apprenticeship 
opportunity, and to extend the application of such standards by 
prescribing policies and procedures concerning the registration, for 
certain Federal purposes, of acceptable apprenticeship programs with 
the U.S. Department of Labor, Employment and Training Administration, 
Office of Apprenticeship. These labor standards, policies and 
procedures cover the registration, cancellation and deregistration of 
apprenticeship programs and of apprenticeship agreements; the 
recognition of a State agency as an authorized agency for registering 
apprenticeship programs for certain Federal purposes; and matters 
relating thereto.


Sec.  29.2  Definitions.

    Administrator means the Administrator of the Office of 
Apprenticeship, or any person specifically designated by the 
Administrator.

[[Page 64426]]

    Apprentice means a worker at least 16 years of age, except where a 
higher minimum age standard is otherwise fixed by law, who is employed 
to learn an apprenticeable occupation as provided in Sec.  29.4 under 
standards of apprenticeship fulfilling the requirements of Sec.  29.5.
    Apprenticeship Agreement means a written agreement, complying with 
Sec.  29.7, between an apprentice and either the apprentice's program 
sponsor, or an apprenticeship committee acting as agent for the program 
sponsor(s), which contains the terms and conditions of the employment 
and training of the apprentice.
    Apprenticeship Committee (Committee) means those persons designated 
by the sponsor to administer the program. A committee may be either 
joint or non-joint, as follows:
    (1) A joint committee is composed of an equal number of 
representatives of the employer(s) and of the employees represented by 
a bona fide collective bargaining agent(s).
    (2) A non-joint committee, which may also be known as a unilateral 
or group non-joint (which may include employees) committee, has 
employer representatives but does not have a bona fide collective 
bargaining agent as a participant.
    Apprenticeship Program means 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.
    Cancellation means the termination of the registration or approval 
status of a program at the request of the sponsor, or termination of an 
Apprenticeship Agreement at the request of the apprentice.
    Certification or Certificate means documentary evidence that:
    (1) The Office of Apprenticeship has approved a set of National 
Guidelines for Apprenticeship Standards developed by a national 
committee or organization, joint or unilateral, for policy or guideline 
use by local affiliates, as conforming to the standards of 
apprenticeship set forth in Sec.  29.5;
    (2) A Registration Agency has established that an individual is 
eligible for probationary employment as an apprentice under a 
registered apprenticeship program;
    (3) A Registration Agency has registered an apprenticeship program 
as evidenced by a Certificate of Registration or other written indicia;
    (4) A Registration Agency has determined that an apprentice has 
successfully met the requirements to receive an interim credential; or
    (5) A Registration Agency has determined that an individual has 
successfully completed apprenticeship.
    Competency means the attainment of manual, mechanical or technical 
skills and knowledge, as specified by an occupational standard and 
demonstrated by an appropriate written and hands-on proficiency 
measurement.
    Completion rate means the percentage of an apprenticeship cohort 
who receive a certificate of apprenticeship completion within 1 year of 
the projected completion date. An apprenticeship cohort is the group of 
individual apprentices registered to a specific program during a 1 year 
time frame, except that a cohort does not include the apprentices whose 
apprenticeship agreement has been cancelled during the probationary 
period.
    Department means the U.S. Department of Labor.
    Electronic media means media that utilize electronics or 
electromechanical energy for the end user (audience) to access the 
content; and includes, but is not limited to, electronic storage media, 
transmission media, the Internet, extranet, lease lines, dial-up lines, 
private networks, and the physical movement of removable/transportable 
electronic media and/or interactive distance learning.
    Employer means any person or organization employing an apprentice 
whether or not such person or organization is a party to an 
Apprenticeship Agreement with the apprentice.
    Federal Purposes includes any Federal contract, grant, agreement or 
arrangement dealing with apprenticeship; and any Federal financial or 
other assistance, benefit, privilege, contribution, allowance, 
exemption, preference or right pertaining to apprenticeship.
    Interim credential means a credential issued by the Registration 
Agency, upon request of the appropriate sponsor, as certification of 
competency attainment by an apprentice.
    Journeyworker means a worker who has attained a level of skill, 
abilities and competencies recognized within an industry as having 
mastered the skills and competencies required for the occupation. (Use 
of the term may also refer to a mentor, technician, specialist or other 
skilled worker who has documented sufficient skills and knowledge of an 
occupation, either through formal apprenticeship or through practical 
on-the-job experience and formal training.)
    Office of Apprenticeship means the office designated by the 
Employment and Training Administration to administer the National 
Apprenticeship System or its successor organization.
    Provisional registration means the 1-year initial provisional 
approval of newly registered programs that meet the required standards 
for program registration, after which program approval may be made 
permanent, continued as provisional, or rescinded following a review by 
the Registration Agency, as provided for in the criteria described in 
Sec.  29.3(g) and (h).
    Quality Assurance Assessment means a comprehensive review conducted 
by a Registration Agency regarding all aspects of an apprenticeship 
program's performance, including but not limited to, determining if 
apprentices are receiving: on-the-job training in all phases of the 
apprenticeable occupation; scheduled wage increases consistent with the 
registered standards; related instruction through appropriate 
curriculum and delivery systems; and that the registration agency is 
receiving notification of all new registrations, cancellations, and 
completions as required in this part.
    Registration Agency means the Office of Apprenticeship or a 
recognized State Apprenticeship Agency that has responsibility for 
registering apprenticeship programs and apprentices; providing 
technical assistance; conducting reviews for compliance with 29 CFR 
parts 29 and 30 and quality assurance assessments.
    Registration of an apprenticeship agreement means the acceptance 
and recording of an apprenticeship agreement by the Office of 
Apprenticeship or a recognized State Apprenticeship Agency as evidence 
of the apprentice's participation in a particular registered 
apprenticeship program.
    Registration of an apprenticeship program means the acceptance and 
recording of such program by the Office of Apprenticeship, or 
registration and/or approval by a recognized State Apprenticeship 
Agency, as meeting the basic standards and requirements of the 
Department for approval of such program for Federal purposes. Approval 
is evidenced by a Certificate of Registration or other written indicia.
    Related instruction means an organized and systematic form of 
instruction designed to provide the apprentice with the knowledge of 
the theoretical and technical subjects related to the apprentice's 
occupation. Such instruction may be given in a classroom, through 
occupational or industrial courses, or by correspondence

[[Page 64427]]

courses of equivalent value, electronic media, or other forms of self-
study approved by the Registration Agency.
    Secretary means the Secretary of Labor or any person designated by 
the Secretary.
    Sponsor means any person, association, committee, or organization 
operating an apprenticeship program and in whose name the program is 
(or is to be) registered or approved.
    State means any of the 50 States of the United States, District of 
Columbia, or any Territory or possession of the United States.
    State Apprenticeship Agency means an agency of a State government 
that has responsibility and accountability for apprenticeship within 
the State. Only a State Apprenticeship Agency may seek recognition by 
the Office of Apprenticeship as an agency which has been properly 
constituted under an acceptable law or Executive Order, and authorized 
by the Office of Apprenticeship to register and oversee apprenticeship 
programs and agreements for Federal purposes.
    State Apprenticeship Council is an entity established to assist the 
State Apprenticeship Agency. A State Apprenticeship Council is 
ineligible for recognition as the State's Registration Agency. A 
regulatory State Apprenticeship Council may promulgate apprenticeship 
law at the direction of the State Apprenticeship Agency. An advisory 
State Apprenticeship Council provides advice and guidance to the State 
Apprenticeship Agency on the operation of the State's apprenticeship 
system.
    State office means that individual office or division of State 
government designated as the point of contact for the State 
Apprenticeship Agency.
    Technical assistance means guidance provided by Registration Agency 
staff in the development, revision, amendment, or processing of a 
potential or current program sponsor's Standards of Apprenticeship, 
Apprenticeship Agreements, or advice or consultation with a program 
sponsor to further compliance with this part or guidance from the 
Office of Apprenticeship to a State Apprenticeship Agency on how to 
remedy nonconformity with this part.
    Transfer means a shift of apprenticeship registration from one 
program to another or from one employer within a program to another 
employer within that same program, where there is agreement between the 
apprentice and the affected apprenticeship committees or program 
sponsors.


Sec.  29.3  Eligibility and procedure for registration of an 
apprenticeship program.

    (a) Eligibility for registration of an apprenticeship program for 
various Federal purposes is conditioned upon a program's conformity 
with the apprenticeship program standards published in this part. For a 
program to be determined by the Secretary as being in conformity with 
these published standards, the program must apply for registration and 
be registered with the Office of Apprenticeship or with a State 
Apprenticeship Agency recognized by the Office of Apprenticeship. The 
determination by the Secretary that the program meets the 
apprenticeship program standards is effectuated only through such 
registration.
    (b) Only an apprenticeship program or agreement that meets the 
following criteria is eligible for Office of Apprenticeship or State 
Apprenticeship Agency registration:
    (1) It is in conformity with the requirements of this part and the 
training is in an apprenticeable occupation having the characteristics 
set forth in Sec.  29.4 of this part; and
    (2) It is in conformity with the requirements of the Department's 
regulation on Equal Employment Opportunity in Apprenticeship and 
Training in 29 CFR part 30, as amended.
    (c) Except as provided under paragraph (d) of this section, 
apprentices must be individually registered under a registered program. 
Such individual registration may be affected:
    (1) By filing copies of each individual apprenticeship agreement 
with the Registration Agency; or
    (2) Subject to prior Office of Apprenticeship or recognized State 
Apprenticeship Agency approval, by filing a master copy of such 
agreement followed by a listing of the name, and other required data, 
of each individual when apprenticed.
    (d) The names of persons in probationary employment as an 
apprentice under an apprenticeship program registered by the Office of 
Apprenticeship or a recognized State Apprenticeship Agency, if not 
individually registered under such program, must be submitted within 45 
days of employment to the Office of Apprenticeship or State 
Apprenticeship Agency for certification to establish the apprentice as 
eligible for such probationary employment.
    (e) The appropriate Registration Agency must be notified within 45 
days of persons who have successfully completed apprenticeship 
programs; and of transfers, suspensions, and cancellations of 
apprenticeship agreements and a statement of the reasons therefore.
    (f) Operating apprenticeship programs, when approved by the Office 
of Apprenticeship, are accorded registration evidenced by a Certificate 
of Registration. Programs approved by recognized State Apprenticeship 
Agencies must be accorded registration and/or approval evidenced by a 
similar certificate or other written indicia. When approved by the 
Office of Apprenticeship, National Apprenticeship Guideline Standards 
for policy or guidance will be accorded a certificate.
    (g) Applications for new programs that the Registration Agency 
determines meet the required standards for program registration must be 
given provisional approval for a period of 1 year. The Registration 
Agency must review all new programs for quality and for conformity with 
the requirements of this part at the end of the first year after 
registration. At that time:
    (1) a program that conforms with the requirements of this part:
    (i) may be made permanent; or
    (ii) may continue to be provisionally approved through the first 
full training cycle.
    (2) a program not in operation or not conforming to the regulations 
during the provisional approval period must be recommended for 
deregistration procedures.
    (h) The Registration Agency must review all programs for quality 
and for conformity with the requirements of this part at the end of the 
first full training cycle. A satisfactory review of a provisionally 
approved program will result in conversion of provisional approval to 
permanent registration. Subsequent reviews must be conducted no less 
frequently than every five years. Programs not in operation or not 
conforming to the regulations must be recommended for deregistration 
procedures.
    (i) Any sponsor proposals or applications for modification(s) or 
change(s) to registered programs or certified National Guidelines for 
Apprenticeship Standards must be submitted to the Registration Agency. 
The Registration Agency must make a determination on whether to approve 
such submissions within 90 days from the date of receipt. If approved, 
the modification(s) or change(s) will be recorded and acknowledged 
within 90 days of approval as an amendment to such program. If not 
approved, the sponsor must be notified of the disapproval and the 
reasons therefore and provided the appropriate technical assistance.

[[Page 64428]]

    (j) Under a program proposed for registration by an employer or 
employers' association, where the standards, collective bargaining 
agreement or other instrument provides for participation by a union in 
any manner in the operation of the substantive matters of the 
apprenticeship program, and such participation is exercised, written 
acknowledgement of union agreement or no objection to the registration 
is required. Where no such participation is evidenced and practiced, 
the employer or employers' association must simultaneously furnish to 
an existing union, which is the collective bargaining agent of the 
employees to be trained, a copy of its application for registration and 
of the apprenticeship program. The Registration Agency must provide for 
receipt of union comments, if any, within 45 days before final action 
on the application for registration and/or approval.
    (k) Where the employees to be trained have no collective bargaining 
agreement, an apprenticeship program may be proposed for registration 
by an employer or group of employers, or an employer association.


Sec.  29.4  Criteria for apprenticeable occupations.

    An apprenticeable occupation is one which is specified by industry 
and which must:
    (a) Involve skills that are customarily learned in a practical way 
through a structured, systematic program of on-the-job supervised 
learning;
    (b) Be clearly identified and commonly recognized throughout an 
industry;
    (c) Involve the progressive attainment of manual, mechanical or 
technical skills and knowledge which, in accordance with the industry 
standard for the occupation, would require the completion of at least 
2,000 hours of on-the-job learning to attain; and
    (d) Require related instruction to supplement the on-the-job 
learning.


Sec.  29.5  Standards of apprenticeship.

    An apprenticeship program, to be eligible for approval and 
registration by a Registration Agency, must conform to the following 
standards:
    (a) The program must have an organized, written plan (program 
standards) embodying the terms and conditions of employment, training, 
and supervision of one or more apprentices in an apprenticeable 
occupation, as defined in this part, and subscribed to by a sponsor who 
has undertaken to carry out the apprentice training program.
    (b) The program standards must contain provisions that address:
    (1) The employment and training of the apprentice in a skilled 
occupation.
    (2) The term of apprenticeship, which for an individual apprentice 
may be measured either through the completion of the industry standard 
for on-the-job learning (at least 2,000 hours) (time-based approach), 
the attainment of competency (competency-based approach), or a blend of 
the time-based and competency-based approaches (hybrid approach).
    (i) The time-based approach measures skill acquisition through the 
individual apprentice's completion of at least 2,000 hours of on-the-
job learning as described in a work process schedule.
    (ii) The competency-based approach measures skill acquisition 
through the individual apprentice's successful demonstration of 
acquired skills and knowledge, as verified by the program sponsor. 
Programs utilizing this approach must still require apprentices to 
complete an on-the-job learning component of Registered Apprenticeship. 
The program standards must address how on-the-job learning will be 
integrated into the program, describe competencies, and identify an 
appropriate means of testing and evaluation for such competencies.
    (iii) The hybrid approach measures the individual apprentice's 
skill acquisition through a combination of specified minimum number of 
hours of on-the-job learning and the successful demonstration of 
competency as described in a work process schedule.
    (iv) The determination of the appropriate approach for the program 
standards is made by the program sponsor, subject to approval by the 
Registration Agency of the determination as appropriate to the 
apprenticeable occupation for which the program standards are 
registered.
    (3) An outline of the work processes in which the apprentice will 
receive supervised work experience and training on the job, and the 
allocation of the approximate amount of time to be spent in each major 
process.
    (4) Provision for organized, related instruction in technical 
subjects related to the occupation. A minimum of 144 hours for each 
year of apprenticeship is recommended. This instruction in technical 
subjects may be accomplished through media such as classroom, 
occupational or industry courses, electronic media, or other 
instruction approved by the Registration Agency. Every apprenticeship 
instructor must:
    (i) Meet the State Department of Education's requirements for a 
vocational-technical instructor in the State of registration, or be a 
subject matter expert, which is an individual, such as a journeyworker, 
who is recognized within an industry as having expertise in a specific 
occupation; and
    (ii) Have training in teaching techniques and adult learning 
styles, which may occur before or after the apprenticeship instructor 
has started to provide the related technical instruction.
    (5) A progressively increasing schedule of wages to be paid to the 
apprentice consistent with the skill acquired. The entry wage must not 
be less than the minimum wage prescribed by the Fair Labor Standards 
Act, where applicable, unless a higher wage is required by other 
applicable Federal law, State law, respective regulations, or by 
collective bargaining agreement.
    (6) Periodic review and evaluation of the apprentice's performance 
on the job and in related instruction; and the maintenance of 
appropriate progress records.
    (7) A numeric ratio of apprentices to journeyworkers consistent 
with proper supervision, training, safety, and continuity of 
employment, and applicable provisions in collective bargaining 
agreements, except where such ratios are expressly prohibited by the 
collective bargaining agreements. The ratio language must be specific 
and clearly described as to its application to the job site, workforce, 
department or plant.
    (8) A probationary period reasonable in relation to the full 
apprenticeship term, with full credit given for such period toward 
completion of apprenticeship. The probationary period cannot exceed 25 
percent of the length of the program, or 1 year, whichever is shorter.
    (9) Adequate and safe equipment and facilities for training and 
supervision, and safety training for apprentices on the job and in 
related instruction.
    (10) The minimum qualifications required by a sponsor for persons 
entering the apprenticeship program, with an eligible starting age not 
less than 16 years.
    (11) The placement of an apprentice under a written Apprenticeship 
Agreement that meets the requirements of Sec.  29.7 or the State 
apprenticeship law of a recognized Registration Agency. The agreement 
must directly, or by reference, incorporate the standards of the 
program as part of the agreement.
    (12) The granting of advanced standing or credit for demonstrated 
competency, acquired experience, training, or skills for all applicants 
equally, with commensurate wages for any progression step so granted.

[[Page 64429]]

    (13) The transfer of an apprentice between apprenticeship programs 
and within an apprenticeship program must be based on agreement between 
the apprentice and the affected apprenticeship committees or program 
sponsors, and must comply with the following requirements:
    (i) The transferring apprentice must be provided a transcript of 
related instruction and on-the-job learning by the committee or program 
sponsor;
    (ii) Transfer must be to the same occupation; and
    (iii) A new apprenticeship agreement must be executed when the 
transfer occurs between program sponsors.
    (14) Assurance of qualified training personnel and adequate 
supervision on the job.
    (15) Recognition for successful completion of apprenticeship 
evidenced by an appropriate certificate issued by the Registration 
Agency.
    (16) Program standards that utilize the competency-based or hybrid 
approach for progression through an apprenticeship and that choose to 
issue interim credentials must clearly identify the interim 
credentials, demonstrate how these credentials link to the components 
of the apprenticeable occupation, and establish the process for 
assessing an individual apprentice's demonstration of competency 
associated with the particular interim credential. Further, interim 
credentials must only be issued for recognized components of an 
apprenticeable occupation, thereby linking interim credentials 
specifically to the knowledge, skills, and abilities associated with 
those components of the apprenticeable occupation.
    (17) Identification of the Registration Agency.
    (18) Provision for the registration, cancellation and 
deregistration of the program; and for the prompt submission of any 
program standard modification or amendment to the Registration Agency 
for approval.
    (19) Provision for registration of apprenticeship agreements, 
modifications, and amendments; notice to the Registration Agency of 
persons who have successfully completed apprenticeship programs; and 
notice of transfers, suspensions, and cancellations of apprenticeship 
agreements and a statement of the reasons therefore.
    (20) Authority for the cancellation of an apprenticeship agreement 
during the probationary period by either party without stated cause; 
cancellation during the probationary period will not have an adverse 
impact on the sponsor's completion rate.
    (21) Compliance with 29 CFR part 30, including the equal 
opportunity pledge prescribed in 29 CFR 30.3(b); an affirmative action 
plan complying with 29 CFR 30.4; and a method for the selection of 
apprentices authorized by 29 CFR 30.5, or compliance with parallel 
requirements contained in a State plan for equal opportunity in 
apprenticeship adopted under 29 CFR part 30 and approved by the 
Department. The apprenticeship standards must also include a statement 
that the program will be conducted, operated and administered in 
conformity with applicable provisions of 29 CFR part 30, as amended, 
or, if applicable, an approved State plan for equal opportunity in 
apprenticeship.
    (22) Contact information (name, address, telephone number, and e-
mail address if appropriate) for the appropriate individual with 
authority under the program to receive, process and make disposition of 
complaints.
    (23) Recording and maintenance of all records concerning 
apprenticeship as may be required by the Office of Apprenticeship or 
recognized State Apprenticeship Agency and other applicable law.


Sec.  29.6  Program performance standards.

    (a) Every registered apprenticeship program must have at least one 
registered apprentice, except for the following specified periods of 
time, which may not exceed 1 year:
    (1) Between the date when a program is registered and the date of 
registration for its first apprentice(s); or
    (2) Between the date that a program graduates an apprentice and the 
date of registration for the next apprentice(s) in the program.
    (b) Registration Agencies must evaluate performance of registered 
apprenticeship programs.
    (1) The tools and factors to be used must include, but are not 
limited to:
    (i) Quality assurance assessments;
    (ii) Equal Employment Opportunity (EEO) Compliance Reviews; and
    (iii) Completion rates.
    (2) Any additional tools and factors used by the Registration 
Agency in evaluating program performance must adhere to the goals and 
policies of the Department articulated in this part and in guidance 
issued by the Office of Apprenticeship.
    (c) In order to evaluate completion rates, the Registration Agency 
must review a program's completion rates in comparison to the national 
average for completion rates. Based on the review, the Registration 
Agency must provide technical assistance to programs with completion 
rates lower than the national average.
    (d) Cancellation of apprenticeship agreements during the 
probationary period will not have an adverse impact on a sponsor's 
completion rate.


Sec.  29.7  Apprenticeship agreement.

    The apprenticeship agreement must contain, explicitly or by 
reference:
    (a) Names and signatures of the contracting parties (apprentice, 
and the program sponsor or employer), and the signature of a parent or 
guardian if the apprentice is a minor.
    (b) The date of birth and, on a voluntary basis, Social Security 
number of the apprentice.
    (c) Contact information of the Program Sponsor and Registration 
Agency.
    (d) A statement of the occupation in which the apprentice is to be 
trained, and the beginning date and term (duration) of apprenticeship.
    (e) A statement showing:
    (1) The number of hours to be spent by the apprentice in work on 
the job in a time-based program; or a description of the skill sets to 
be attained by completion of a competency-based program, including the 
on-the-job learning component; or the minimum number of hours to be 
spent by the apprentice and a description of the skill sets to be 
attained by completion of hybrid program; and
    (2) The number of hours to be spent in related instruction in 
technical subjects related to the occupation, which is recommended to 
be not less than 144 hours per year.
    (f) A statement setting forth a schedule of the work processes in 
the occupation or industry divisions in which the apprentice is to be 
trained and the approximate time to be spent at each process.
    (g) A statement of the graduated scale of wages to be paid to the 
apprentice and whether or not the required related instruction is 
compensated.
    (h) Statements providing:
    (1) For a specific period of probation during which the 
apprenticeship agreement may be cancelled by either party to the 
agreement upon written notice to the registration agency, without 
adverse impact on the sponsor.
    (2) That, after the probationary period, the agreement may be:
    (i) Cancelled at the request of the apprentice, or
    (ii) Suspended or cancelled by the sponsor, for good cause, with 
due notice to the apprentice and a reasonable opportunity for 
corrective action, and with written notice to the apprentice and to the 
Registration Agency of the final action taken.

[[Page 64430]]

    (i) A reference incorporating as part of the agreement the 
standards of the apprenticeship program as they exist on the date of 
the agreement and as they may be amended during the period of the 
agreement.
    (j) A statement that the apprentice will be accorded equal 
opportunity in all phases of apprenticeship employment and training, 
without discrimination because of race, color, religion, national 
origin, or sex.
    (k) Contact information (name, address, phone, and e-mail if 
appropriate) of the appropriate authority designated under the program 
to receive, process and make disposition of controversies or 
differences arising out of the apprenticeship agreement when the 
controversies or differences cannot be adjusted locally or resolved in 
accordance with the established procedure or applicable collective 
bargaining provisions.


Sec.  29.8  Deregistration of a registered program.

    Deregistration of a program may be effected upon the voluntary 
action of the sponsor by submitting a request for cancellation of the 
registration in accordance with paragraph (a) of this section, or upon 
reasonable cause, by the Registration Agency instituting formal 
deregistration proceedings in accordance with paragraph (b) of this 
section.
    (a) Deregistration at the request of the sponsor. The Registration 
Agency may cancel the registration of an apprenticeship program by 
written acknowledgment of such request stating the following:
    (1) The registration is cancelled at the sponsor's request, and the 
effective date thereof;
    (2) That, within 15 days of the date of the acknowledgment, the 
sponsor will notify all apprentices of such cancellation and the 
effective date; that such cancellation automatically deprives the 
apprentice of individual registration; that the deregistration of the 
program removes the apprentice from coverage for Federal purposes which 
require the Secretary of Labor's approval of an apprenticeship program, 
and that all apprentices are referred to the Registration Agency for 
information about potential transfer to other registered apprenticeship 
programs.
    (b) Deregistration by the Registration Agency upon reasonable 
cause.
    (1)(i) Deregistration proceedings may be undertaken when the 
apprenticeship program is not conducted, operated, or administered in 
accordance with the program's registered provisions or with the 
requirements of this part, including not but limited to: failure to 
provide on-the-job learning; failure to provide related instruction; 
failure to pay the apprentice a progressively increasing schedule of 
wages consistent with the apprentices skills acquired; or persistent 
and significant failure to perform successfully. Deregistration 
proceedings for violation of equal opportunity requirements must be 
processed in accordance with the provisions under 29 CFR part 30.
    (ii) For purposes of this section, persistent and significant 
failure to perform successfully occurs when a program sponsor 
consistently fails to register at least one apprentice, shows a pattern 
of poor quality assessment results over a period of several years, 
demonstrates an ongoing pattern of very low completion rates over a 
period of several years, or shows no indication of improvement in the 
areas identified by the Registration Agency during a review process as 
requiring corrective action.
    (2) Where it appears the program is not being operated in 
accordance with the registered standards or with requirements of this 
part, the Registration Agency must notify the program sponsor in 
writing.
    (3) The notice sent to the program sponsor's contact person must:
    (i) Be sent by registered or certified mail, with return receipt 
requested;
    (ii) State the shortcoming(s) and the remedy required; and
    (iii) State that a determination of reasonable cause for 
deregistration will be made unless corrective action is effected within 
30 days.
    (4) Upon request by the sponsor for good cause, the 30-day term may 
be extended for another 30 days. During the period for corrective 
action, the Registration Agency must assist the sponsor in every 
reasonable way to achieve conformity.
    (5) If the required correction is not effected within the allotted 
time, the Registration Agency must send a notice to the sponsor, by 
registered or certified mail, return receipt requested, stating the 
following:
    (i) The notice is sent under this paragraph;
    (ii) Certain deficiencies were called to the sponsor's attention 
(enumerating them and the remedial measures requested, with the dates 
of such occasions and letters), and that the sponsor has failed or 
refused to effect correction;
    (iii) Based upon the stated deficiencies and failure to remedy 
them, a determination has been made that there is reasonable cause to 
deregister the program and the program may be deregistered unless, 
within 15 days of the receipt of this notice, the sponsor requests a 
hearing with the applicable Registration Agency; and
    (iv) If the sponsor does not request a hearing, the entire matter 
will be submitted to the Administrator, Office of Apprenticeship, for a 
decision on the record with respect to deregistration.
    (6) If the sponsor does not request a hearing, the Registration 
Agency will transmit to the Administrator a report containing all 
pertinent facts and circumstances concerning the nonconformity, 
including the findings and recommendation for deregistration, and 
copies of all relevant documents and records. Statements concerning 
interviews, meetings and conferences will include the time, date, 
place, and persons present. The Administrator will make a final order 
on the basis of the record presented.
    (7) If the sponsor requests a hearing, the Registration Agency will 
transmit to the Administrator a report containing all the data listed 
in paragraph (b)(6) of this section, and the Administrator will refer 
the matter to the Office of Administrative Law Judges. An 
Administrative Law Judge will convene a hearing in accordance with 
Sec.  29.10, and issue a decision as required in Sec.  29.10(c).
    (8) Every order of deregistration must contain a provision that the 
sponsor must, within 15 days of the effective date of the order, notify 
all registered apprentices of the deregistration of the program; the 
effective date thereof; that such cancellation automatically deprives 
the apprentice of individual registration; that the deregistration 
removes the apprentice from coverage for Federal purposes which require 
the Secretary of Labor's approval of an apprenticeship program; and 
that all apprentices are referred to the Registration Agency for 
information about potential transfer to other registered apprenticeship 
programs.


Sec.  29.9  Reinstatement of program registration.

    Any apprenticeship program deregistered under Sec.  29.8 may be 
reinstated upon presentation of adequate evidence that the 
apprenticeship program is operating in accordance with this part. Such 
evidence must be presented to the Registration Agency.


Sec.  29.10  Hearings for deregistration.

    (a) Within 10 days of receipt of a request for a hearing, the 
Administrator of the Office of Apprenticeship must contact the 
Department's Office of Administrative Law Judges to request the 
designation of an Administrative

[[Page 64431]]

Law Judge to preside over the hearing. The Administrative Law Judge 
shall give reasonable notice of such hearing by registered mail, return 
receipt requested, to the appropriate sponsor. Such notice will 
include:
    (1) A reasonable time and place of hearing;
    (2) A statement of the provisions of this part pursuant to which 
the hearing is to be held; and
    (3) A concise statement of the matters pursuant to which the action 
forming the basis of the hearing is proposed to be taken.
    (b) The procedures contained in 29 CFR part 18 will apply to the 
disposition of the request for hearing except that:
    (1) The Administrative Law Judge will receive, and make part of the 
record, documentary evidence offered by any party and accepted at the 
hearing. Copies thereof will be made available by the party submitting 
the documentary evidence to any party to the hearing upon request.
    (2) Technical rules of evidence will 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 will 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.
    (c) The Administrative Law Judge should issue a written decision 
within 90 days of the close of the hearing record. The Administrative 
Law Judge's decision constitutes final agency action unless, within 15 
days from receipt of the decision, a party dissatisfied with the 
decision files a petition for review with the Administrative Review 
Board, 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 the same time. Thereafter, the decision 
of the Administrative Law Judge remains final agency action unless the 
Administrative Review Board, within 30 days of the filing of the 
petition for review, notifies the parties that it has accepted the case 
for review. The Administrative Review Board may set a briefing schedule 
or decide the matter on the record. The Administrative Review Board 
must decide any case it accepts for review within 180 days of the close 
of the record. If not so decided, the Administrative Law Judge's 
decision constitutes final agency action.


Sec.  29.11  Limitations.

    Nothing in this part or in any apprenticeship agreement will 
operate to invalidate:
    (a) Any apprenticeship provision in any collective bargaining 
agreement between employers and employees establishing higher 
apprenticeship standards; or
    (b) Any special provision for veterans, minority persons, or women 
in the standards, apprentice qualifications or operation of the 
program, or in the apprenticeship agreement, which is not otherwise 
prohibited by law, Executive Order, or authorized regulation.


Sec.  29.12  Complaints.

    (a) This section is not applicable to any complaint concerning 
discrimination or other equal opportunity matters; all such complaints 
must be submitted, processed and resolved in accordance with applicable 
provisions in 29 CFR part 30, or applicable provisions of a State Plan 
for Equal Employment Opportunity in Apprenticeship adopted pursuant to 
29 CFR part 30 and approved by the Department.
    (b) Except for matters described in paragraph (a) of this section, 
any controversy or difference arising under an apprenticeship agreement 
which cannot be adjusted locally and which is not covered by a 
collective bargaining agreement, may be submitted by an apprentice, or 
the apprentice's authorized representative, to the appropriate 
Registration Authority, either Federal or State, which has registered 
and/or approved the program in which the apprentice is enrolled, for 
review. Matters covered by a collective bargaining agreement are not 
subject to such review.
    (c) The complaint must be in writing and signed by the complainant, 
or authorized representative, and must be submitted within 60 days of 
the final local decision. It must set forth the specific matter(s) 
complained of, together with relevant facts and circumstances. Copies 
of pertinent documents and correspondence must accompany the complaint.
    (d) The Office of Apprenticeship or recognized State Apprenticeship 
Agency, as appropriate, will render an opinion within 90 days after 
receipt of the complaint, based upon such investigation of the matters 
submitted as may be found necessary, and the record before it. During 
the 90-day period, the Office of Apprenticeship or recognized State 
Apprenticeship Agency will make reasonable efforts to effect a 
satisfactory resolution between the parties involved. If so resolved, 
the parties will be notified that the case is closed. Where an opinion 
is rendered, copies will be sent to all interested parties.
    (e) Nothing in this section precludes an apprentice from pursuing 
any other remedy authorized under another Federal, State, or local law.
    (f) A State Apprenticeship Agency may adopt a complaint review 
procedure differing in detail from that given in this section provided 
it is submitted for review and approval by the Office of 
Apprenticeship.


Sec.  29.13  Recognition of State apprenticeship agencies.

    (a) Recognition. The Department may exercise its authority to grant 
recognition to a State Apprenticeship Agency. Recognition confers non-
exclusive authority to determine whether an apprenticeship program 
conforms to the published standards and whether the program is, 
therefore, eligible for those Federal purposes which require such a 
determination by the Department. Such recognition shall be accorded 
upon the State's submission of, the Department's approval of, and the 
State's compliance with the following:
    (1) The State Apprenticeship Agency must submit a State 
apprenticeship law, whether instituted through statute, Executive 
Order, regulation, or other means, that conforms to the requirements of 
29 CFR parts 29 and 30;
    (2) The State Apprenticeship Agency must establish and continue to 
use a State Apprenticeship Council, which operates under the direction 
of the State Apprenticeship Agency. The State Apprenticeship Council 
may be either regulatory or advisory and must meet the following 
requirements:
    (i) It must be composed of persons familiar with apprenticeable 
occupations, and
    (ii) It must include an equal number of representatives of employer 
and of employee organizations and include public members who shall not 
number in excess of the number named to represent either employer or 
employee organizations;
    (3) The State Apprenticeship Agency must submit a State Plan for 
Equal Employment Opportunity in Apprenticeship that conforms to the 
requirements published in 29 CFR part 30;
    (4) The State Apprenticeship Agency's submission must include a 
description of the basic standards, criteria, and requirements for 
program registration and/or approval, and

[[Page 64432]]

demonstrate linkages and coordination with the State's economic 
development strategies and publicly-funded workforce investment system; 
and
    (5) The State Apprenticeship Agency's submission must include a 
description of policies and operating procedures which depart from or 
impose requirements in addition to those prescribed in this part.
    (b) Basic requirements. In order to obtain and maintain recognition 
as provided under paragraph (a) of this section, the State 
Apprenticeship Agency must conform to the requirements of this part. To 
accomplish this, the State must:
    (1) Establish and maintain an administrative entity (the State 
Apprenticeship Agency) that is capable of performing the functions of a 
Registration Agency under 29 CFR part 29;
    (2) Provide sufficient resources to carry out the functions of a 
Registration Agency, including: Outreach and education; registration of 
programs and apprentices; provision of technical assistance, and 
monitoring as required to fulfill the requirements of this part;
    (3) Clearly delineate the respective powers and duties of the State 
office, the State Apprenticeship Agency, and the State Apprenticeship 
Council;
    (4) Establish policies and procedures to promote equality of 
opportunity in apprenticeship programs pursuant to a State Plan for 
Equal Employment Opportunity in Apprenticeship which adopts and 
implements the requirements of 29 CFR part 30, and to require 
apprenticeship programs to operate in conformity with such State Plan 
and 29 CFR part 30;
    (5) Prescribe the contents of apprenticeship agreements, in 
conformity with Sec.  29.7;
    (6) Ensure that the registration of apprenticeship programs occurs 
only in apprenticeable occupations, as provided in Sec.  29.4, 
including occupations in high growth and high demand industries;
    (7) Accord reciprocal approval for Federal purposes to apprentices, 
apprenticeship programs and standards that are registered in other 
States by the Office of Apprenticeship or a Registration Agency if such 
reciprocity is requested by the apprenticeship program sponsor. Program 
sponsors seeking reciprocal approval must meet the wage and hour 
provisions and apprentice ratio standards of the reciprocal State;
    (8) Provide for the cancellation and/or deregistration of programs, 
and for temporary suspension, cancellation, and/or deregistration of 
apprenticeship agreements; and
    (9) Submit all proposed modifications in legislation, regulations, 
policies and/or operational procedures planned or anticipated by a 
State Apprenticeship Agency, either at the time of application for 
recognition or subsequently, to the Office of Apprenticeship for review 
and obtain the Office of Apprenticeship's concurrence prior to 
implementation.
    (c) Application for recognition. A State Apprenticeship Agency 
desiring new or continued recognition as a Registration Agency must 
submit to the Administrator of the Office of Apprenticeship the 
documentation specified in paragraph (a) of this section. A currently 
recognized State desiring continued recognition by the Office of 
Apprenticeship must submit to the Administrator of the Office of 
Apprenticeship the documentation specified in paragraph (a) of this 
section within 2 years of the effective date of the final rule. The 
recognition of a currently recognized State shall continue for up to 2 
years from the effective date of this regulation and during any 
extension period granted by the Administrator. An extension of time 
within which to comply with the requirements of this part may be 
granted by the Administrator for good cause upon written request by the 
State, but the Administrator shall not extend the time for submission 
of the documentation required by paragraph (a) of this section. Upon 
approval of the State Apprenticeship Agency's application for 
recognition and any subsequent modifications to this application as 
required under paragraph (b)(9) of this section, the Administrator 
shall so notify the State Apprenticeship Agency in writing.
    (d) Duration of recognition. The recognition of a State 
Apprenticeship Agency shall last for 5 years from the date recognition 
is granted under paragraph (c) of this section. The Administrator shall 
notify each State Registration Agency at least 180 days prior to the 
expiration of the 5-year period whether the Registration Agency is in 
conformity with this part, based on reviews conducted by the Office of 
Apprenticeship, as required by paragraph (e) of this section. If the 
notification states that the State Apprenticeship Agency is in 
conformity, recognition will be renewed for an additional 5-year 
period. If the notification states that the State Apprenticeship Agency 
is not in conformity, the notification shall specify the areas of non-
conformity, require corrective action, and offer technical assistance. 
After the Administrator determines that a State Apprenticeship Agency 
has corrected the identified non-conformities, recognition will be 
renewed for an additional 5-year period.
    (e) Compliance. The Office of Apprenticeship will monitor a State 
Registration Agency for compliance with the recognition requirements of 
this part through:
    (1) On-site reviews conducted by Office of Apprenticeship staff.
    (2) Self-assessment reports, as required by the Office of 
Apprenticeship.
    (3) Review of State Apprenticeship Agency legislation, regulations, 
policies, and/or operating procedures required to be submitted under 
paragraphs (a)(1), (a)(5) and (b)(9) of this section for review and 
approval as required under Sec.  29.13(a).
    (4) Determination whether, based on the review performed under 
paragraphs (e)(1), (2), and (3) of this section, the State Registration 
Agency is in compliance with part 29. Notice to the State Registration 
Agency of the determination will be given within 45 days of receipt of 
proposed modifications to legislation, regulations, policies, and/or 
operational procedures required to be submitted under paragraphs 
(a)(1), (a)(5) and (b)(9) of this section.
    (f) Accountability/Remedies for non-conformity. (1) State 
Registration Agencies that fail to maintain compliance with the 
requirements of this part, as provided under paragraph (e) of this 
section, will:
    (i) Receive technical assistance from the Office of Apprenticeship 
in an effort to remedy the non-conforming activity; and
    (ii) Be placed on ``Conditional Recognition'' for a period of 45 
days during which the State Apprenticeship Agency must submit a 
corrective action plan to remedy the non-conforming activity to the 
Office of Apprenticeship. Upon request from the State Apprenticeship 
Agency, for good cause, the 45-day period may be extended.
    (2) Failure to comply with these requirements will result in 
rescission of recognition, for Federal Purposes as provided under Sec.  
29.14.
    (g) Denial of State Apprenticeship Agency Recognition. A denial by 
the Office of Apprenticeship of a State Apprenticeship Agency's 
application for new or continued recognition must be in writing and 
must set forth the reasons for denial. The notice must be sent by 
certified mail, return receipt requested. In addition to the reasons 
stated for the denial, the notice must specify the remedies which must 
be undertaken prior to consideration of a resubmitted request, and must 
state that a request for

[[Page 64433]]

administrative review of a denial of recognition may be made within 30 
calendar days of receipt of the notice of denial from the Department. 
Such request must be made by mail and addressed to the Chief 
Administrative Law Judge for the Department. The mailing address is 
Office of Administrative Law Judges, U.S. Department of Labor, Suite 
400 North, 800 K Street, NW., Washington, DC 20001-8002. Within 30 
calendar days of the filing of the request for review, the 
Administrator must prepare an administrative record for submission to 
the Administrative Law Judge designated by the Chief Administrative Law 
Judge.
    (1) The procedures contained in 29 CFR part 18 will apply to the 
disposition of the request for review except that:
    (i) The Administrative Law Judge will receive, and make part of the 
record, documentary evidence offered by any party and accepted at the 
hearing. Copies thereof will be made available by the party submitting 
the documentary evidence to any party to the hearing upon request.
    (ii) Technical rules of evidence will not apply to hearings 
conducted under 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 will 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.
    (2) The Administrative Law Judge should submit proposed findings, a 
recommended decision, and a certified record of the proceedings to the 
Administrative Review Board within 90 calendar days after the close of 
the record.
    (3) Within 20 days of the receipt of the recommended decision, any 
party may file exceptions. Any party may file a response to the 
exceptions filed by another party within 10 days of receipt of the 
exceptions. All exceptions and responses must be filed with the 
Administrative Review Board with copies served on all parties and amici 
curiae.
    (4) After the close of the period for filing exceptions and 
responses, the Administrative Review Board may issue a briefing 
schedule or may decide the matter on the record before it. The 
Administrative Review Board must decide any case it accepts for review 
within 180 days of the close of the record. If not so decided, the 
Administrative Law Judge's decision constitutes final agency action. 
The decision of the Administrative Review Board constitutes final 
action by the Department.
    (h) Withdrawal from recognition. Where a State Apprenticeship 
Agency voluntarily relinquishes its recognition for Federal purposes, 
the State must:
    (1) Send a formal notice of intent to the Administrator of the 
Office of Apprenticeship;
    (2) Provide all apprenticeship program standards, apprenticeship 
agreements, completion records, cancellation and suspension records, 
Equal Employment Opportunity Compliance Review files and any other 
documents relating to the State's apprenticeship programs, to the 
Department; and
    (3) Cooperate fully during a transition period.
    (i) Retention of authority. Notwithstanding any grant of 
recognition to a State Apprenticeship Agency under this section, the 
Office of Apprenticeship retains the full authority to register 
apprenticeship programs and apprentices in all States and Territories 
where the Office of Apprenticeship determines that such action is 
necessary to further the interests of the National Apprenticeship 
System.
    (j) State apprenticeship programs. (1) An apprenticeship program 
submitted to a State Registration Agency for registration must, for 
Federal purposes, be in conformity with the State apprenticeship law, 
regulations, and with the State Plan for Equal Employment Opportunity 
in Apprenticeship as submitted to and approved by the Office of 
Apprenticeship pursuant to 29 CFR part 30.
    (2) In the event that a State Apprenticeship Agency is not 
recognized by the Office of Apprenticeship for Federal purposes or that 
such recognition has been withdrawn, or if no State Apprenticeship 
Agency exists, registration with the Office of Apprenticeship may be 
requested. Such registration must be granted if the program is 
conducted, administered and operated in accordance with the 
requirements of this part and the equal opportunity regulation in 29 
CFR part 30, as amended.


Sec.  29.14  Derecognition of State Apprenticeship Agencies.

    The recognition for Federal purposes of a State Apprenticeship 
Agency may be withdrawn for the failure to fulfill, or operate in 
conformity with, the requirements of parts 29 and 30. Derecognition 
proceedings for reasonable cause will be instituted in accordance with 
the following:
    (a) Derecognition proceedings for failure to adopt or properly 
enforce a State Plan for Equal Employment Opportunity in Apprenticeship 
must be processed in accordance with the procedures prescribed in 29 
CFR part 30.
    (b) For causes other than those under paragraph (a) of this 
section, the Office of Apprenticeship must notify the respondent and 
appropriate State sponsors in writing, by certified mail, with return 
receipt requested. The notice must set forth the following:
    (1) That reasonable cause exists to believe that the respondent has 
failed to fulfill or operate in conformity with the requirements of 
this part;
    (2) The specific areas of nonconformity;
    (3) The needed remedial measures; and
    (4) That the Office of Apprenticeship proposes to withdraw 
recognition for Federal purposes unless corrective action is taken, or 
a hearing request mailed, within 30 days of the receipt of the notice.
    (c) If, within the 30-day period, the State Apprenticeship Agency:
    (1) Acknowledges that the State is out of conformity, specifies its 
proposed remedial action and commits itself to remedying the identified 
deficiencies, the Office of Apprenticeship will suspend the 
derecognition process to allow a reasonable period of time for the 
State Apprenticeship Agency to implement its corrective action plan.
    (i) If the Office of Apprenticeship determines that the State's 
corrective action has addressed the identified concerns, the Office of 
Apprenticeship must so notify the State and the derecognition 
proceedings shall be terminated.
    (ii) If the Office of Apprenticeship determines that the State has 
not addressed or failed to remedy the identified concerns, the 
Administrator must notify the State, in writing, of its failure, 
specifying the reasons therefore, and offer the State an opportunity to 
request a hearing within 30 days.
    (2) Fails to comply or to request a hearing, the Office of 
Apprenticeship shall decide whether recognition should be withdrawn. If 
the decision is in the affirmative, the Administrator must begin the 
process of transferring registrations in paragraph (d).
    (3) Requests a hearing. The Administrator shall refer the matter to 
the Office of Administrative Law Judges. An Administrative Law Judge 
will convene a hearing in accordance with

[[Page 64434]]

Sec.  29.13(g) and submit proposed findings and a recommended decision 
to the Administrative Review Board for final agency action. The 
Administrative Review Board must decide any case it accepts for review 
within 180 days of the close of the record. If not so decided, the 
Administrative Law Judge's decision constitutes final agency action.
    (d) If the Administrative Review Board determines to withdraw 
recognition for Federal purposes or if the Office of Apprenticeship has 
decided that recognition should be withdrawn under paragraph (c)(2) of 
this section, the Administrator must:
    (1) Notify the registration agency and the State sponsors of such 
withdrawal and effect public notice of such withdrawal.
    (2) Notify the sponsors that, 30 days after the date of the order 
withdrawing recognition of the State's registration agency, the 
Department shall cease to recognize, for Federal purposes, each 
apprenticeship program registered with the State Apprenticeship Agency, 
unless within that time, the sponsor requests registration with the 
Office of Apprenticeship.
    (e) In the event that a State Apprenticeship Agency is not 
recognized by the Office of Apprenticeship for Federal purposes or that 
such recognition has been withdrawn, or if no State Apprenticeship 
Agency exists, apprenticeship program sponsors may request registration 
with the Office of Apprenticeship in accordance with the following:
    (1) The Office of Apprenticeship may grant the request for 
registration on an interim basis. Continued recognition will be 
contingent upon its finding that the State apprenticeship program is 
operating in accordance with the requirements of this part and of 29 
CFR part 30.
    (2) The Office of Apprenticeship must make a finding on this issue 
within 30 days of receipt of the request.
    (3) If the finding is in the negative, the State sponsor must be 
notified in writing that the interim registration with the Office of 
Apprenticeship has been revoked and that the program will be 
deregistered unless the sponsor requests a hearing within 15 days of 
the receipt of the notice. If a hearing is requested, the matter will 
be forwarded to the Office of Administrative Law Judges for a hearing 
in accordance with Sec.  29.10.
    (4) If the finding is in the affirmative, the State sponsor must be 
notified in writing that the interim registration with the Office of 
Apprenticeship has been made permanent based upon compliance with the 
requirements of this part.
    (f) If the sponsor fails to request registration with the Office of 
Apprenticeship, the written notice to such State sponsor must further 
advise the recipient that any actions or benefits applicable to 
recognition for Federal purposes are no longer available to the 
participants in its apprenticeship program as of the date 30 days after 
the date of the order withdrawing recognition.
    (g) Such notice must also direct the State sponsor to notify, 
within 15 days, all its registered apprentices of the withdrawal of 
recognition for Federal purposes; the effective date thereof; and that 
such withdrawal removes the apprentice from coverage under any Federal 
provision applicable to their individual registration under a program 
recognized or registered by the Secretary of Labor for Federal 
purposes. Such notice must direct that all apprentices are referred to 
the Office of Apprenticeship for information about potential transfer 
to other registered apprenticeship programs.
    (h) Where a State Apprenticeship Agency's recognition for Federal 
purposes has been withdrawn; the State must:
    (1) Provide all apprenticeship program standards, apprenticeship 
agreements, completion records, cancellation and suspension records, 
Equal Employment Opportunity Compliance Review files and any other 
documents relating to the State's apprenticeship programs, to the 
Department; and
    (2) Cooperate fully during a transition period.
    (i) A State Apprenticeship Agency whose recognition has been 
withdrawn under this part may have its recognition reinstated upon 
presentation of adequate evidence that it has fulfilled the 
requirements established in Sec.  29.13(i) and Sec.  29.14(g) and (h) 
and is operating in conformity with the requirements of this part.

[FR Doc. E8-24917 Filed 10-28-08; 8:45 am]
BILLING CODE 4510-FR-P