[Federal Register Volume 73, Number 245 (Friday, December 19, 2008)]
[Rules and Regulations]
[Pages 78132-78144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30166]



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Part VIII





Department of Labor





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Veterans' Employment and Training Service



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20 CFR Part 1010



Priority of Service for Covered Persons; Final Rule

  Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / 
Rules and Regulations  

[[Page 78132]]


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DEPARTMENT OF LABOR

Veterans' Employment and Training Service

20 CFR Part 1010

RIN 1293-AA15


Priority of Service for Covered Persons

AGENCY: Veterans' Employment and Training Service, Labor

ACTION: Final rule.

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SUMMARY: The Veterans' Employment and Training Service (VETS) of the 
Department of Labor (Department or DOL) is issuing this final rule to 
implement priority of service in qualified job training programs 
prescribed in section 2(a)(1) of the Jobs for Veterans Act (JVA). DOL 
issued a notice of proposed rulemaking (NPRM) on August 15, 2008 
outlining proposed provisions implementing priority of service for 
covered persons in qualified DOL job training programs.

DATES: Effective Date: The final rule will become effective on January 
19, 2009.

FOR FURTHER INFORMATION CONTACT: Pamela Langley, Chief, Division of 
Grant Programs, Veterans' Employment and Training Service, U.S. 
Department of Labor, 200 Constitution Avenue, NW., Room S-1312, 
Washington, DC 20210, [email protected], (202) 693-4708 (this is 
not a toll-free number) or (202) 693-4760 (TTY/TDD).

SUPPLEMENTARY INFORMATION: This preamble contains three sections. 
Section I provides general background information on the development of 
the final rule. Section II discusses the comments received on the NPRM 
and the related regulatory provisions included in the final rule. 
Section III addresses the administrative requirements for the final 
rule, as mandated by statute and executive order.

I. Background

    On August 15, 2008, the Department published an NPRM (73 FR 48086) 
proposing regulations to implement priority of service in qualified job 
training programs prescribed in section 2(a)(1) of the JVA. We invited 
comments for a 60-day period, which closed on October 14, 2008. All 
comments received during the comment period have been posted on 
www.regulations.gov.
    On November 7, 2002, President Bush signed the Jobs for Veterans 
Act, Public Law (Pub. L.) 107-288 (Nov. 7, 2002). One provision of the 
JVA, codified at 38 United States Code (U.S.C.) Section 4215, creates a 
priority of service requirement for covered persons in qualified DOL 
job training programs. Since the passage of the Act, the Department has 
provided policy guidance to the workforce investment system regarding 
the implementation of priority of service, including the Department's 
Employment and Training Administration (ETA) issuance of Training and 
Employment Guidance Letter (TEGL) No. 05-03 in September 2003. TEGL No. 
05-03 applies to a majority of the job training programs impacted by 
priority of service. On December 22, 2006, President Bush signed the 
Veterans' Benefits, Health Care, and Information Technology Act of 2006 
(Pub. L. 109-461). Section 605 of that statute requires the Department 
to implement priority of service via regulation. The final rule 
implements priority of service in response to that requirement.
    The JVA provides that veterans and eligible spouses of veterans (as 
defined in Sec.  1010.110) are identified as covered persons and are 
entitled to priority over non-covered persons for the receipt of 
employment, training, and placement services provided under new or 
existing qualified job training programs, notwithstanding any other 
provision of law. The JVA defines qualified job training programs as 
``any workforce preparation, development or delivery program or service 
that is directly funded, in whole or in part, by the Department.'' 38 
U.S.C. 4215(a)(2). Currently, such programs are offered by many 
agencies within the Department, including, but not limited to, ETA, 
VETS, the Women's Bureau, and the Office of Disability Employment 
Policy (ODEP).
    The JVA, and the priority of service it requires, is an important 
acknowledgment of the sacrifices of the men and women who have served 
in the U.S. armed forces. The Department's strategic vision for 
priority of service to covered persons honors veterans and eligible 
spouses of veterans as our ``heroes at home'' and envisions that DOL-
funded employment and training programs, including the publicly-funded 
workforce investment system, will identify, inform and deliver 
comprehensive services to covered persons as part of strategic 
workforce development activities across the country. Veterans and 
eligible spouses possess unique attributes and contribute greatly in 
the workplace. They are an important source of highly skilled and 
experienced talent and play an important role in regional workforce 
development strategies. They are highly sought after by employers and 
they make excellent employees. Implementation of priority of service is 
designed to provide covered persons with clear entry points into high-
growth, high wage civilian jobs and easily accessible post-secondary 
education and training to support their advancement along career 
pathways which will benefit regional economies.
    One-Stop Career Centers are the delivery point for a significant 
percentage of qualified job training programs and services covered by 
the JVA and are required to implement priority of service. All One-Stop 
Career Centers should have clear strategies for providing veterans and 
eligible spouses of veterans with the highest quality of service at 
every phase of services offered. This can range from basic functions of 
the One-Stop System, such as assistance with job search and 
identification of needed skills, to more customized initiatives such as 
creating career pathways, with corresponding competency assessments and 
training opportunities, or other strategies which allow covered persons 
to advance their careers in high growth sectors of the economy. The 
Department expects that the One-Stop System will draw on all available 
resources to support the reemployment needs of covered persons.
    Veterans and their eligible spouses have specific needs and 
concerns that can be addressed by DOL-funded employment and training 
program providers developing strategies for serving covered persons. 
When military service has ended, a major concern for many veterans is 
getting a good job. Some veterans may experience particular difficulty, 
both in finding employment and in readjusting to civilian work 
environments. DOL-funded employment and training programs should work 
with employers to ensure that the value a veteran brings to the table 
is understood and to address any concerns that employers may have about 
hiring veterans.
    Those veterans who have sustained injuries or illnesses as a result 
of their military service may require additional support in developing 
skills to secure employment. Similarly, those spouses of recently 
separated veterans who are eligible for priority also may need 
employability development assistance. DOL, the Department of Defense 
and the Department of Veterans Affairs are collaborating in closely 
monitoring the rehabilitation of wounded and injured veterans assessing 
their job readiness and assisting their preparations for civilian 
employment. In those instances in which civilian employment does not 
appear to be a realistic objective for the

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veteran, employability development activities should, if appropriate, 
focus upon the spouse who is eligible for priority. These ``heroes at 
home'' should be immediately provided the full array of employment and 
training services to ensure that they make a successful transition into 
employment that supports their economic independence.
    In addition to assisting recently separated veterans and eligible 
spouses to meet the challenges of their specific situation, priority of 
service also is intended to assist those veterans and eligible spouses 
for whom military service concluded some time ago. These veterans and 
eligible spouses are likely to have significant civilian labor market 
experience. However, they may experience dislocation or find that they 
are underemployed relative to their skills and experience. Priority of 
service is intended to assist all veterans and eligible spouses to 
improve their civilian sector employment and earnings.
    Priority of service does not change a program's intended functions; 
covered persons still need to meet all statutory eligibility and 
program requirements for participation. Some DOL-funded employment and 
training programs have only general program eligibility requirements 
and do not statutorily target specific groups. These programs require 
only a straightforward implementation of priority of service. However, 
some DOL-funded employment and training programs do carry existing 
statutory targeting provisions that must be taken into account when 
applying priority of service. The purpose of this final rule is to 
articulate how priority of service is to be applied across all existing 
and new qualified DOL job training programs.

II. Discussion of the Comments and Regulatory Provisions

Summary of Comments

    The Department received 28 submissions commenting on the NPRM by 
the close of the comment period. All comments were carefully reviewed. 
Of the 28 comments, 17 were from organizations with an interest in 
veterans' employment services. Of the 17 comments from organizations, 
13 were from State Workforce Agencies, one was from a State veterans' 
commission, one was from a local Workforce Investment Board (WIB), one 
was from a private non-profit service provider and one was from a 
national association of State Workforce Agencies. Of the 11 comments 
from individuals, three identified themselves as employees of State 
Workforce Agencies.
    A number of comments supported the proposed rule for implementing 
priority of service to veterans and eligible spouses of veterans in all 
employment and training programs funded in whole or in part by DOL. We 
discuss these comments here, but otherwise have no formal response to 
them. One commenter suggested that many veterans experience extreme 
hardships financially and physically due to their service to our 
country. This commenter suggested that veterans deserve to receive 
priority assistance to reintegrate back into civilian life. A second 
commenter was supportive of informing veterans of their entitlement to 
priority of service at the point of entry. A third commenter pointed 
out that priorities for veterans already exist in DOL programs. Two 
other commenters fully supported DOL efforts to ensure that veterans 
and their eligible spouses receive priority access to employment, 
training, and placement services. Another commenter agreed with DOL's 
efforts to ensure covered persons receive priority to employment, 
training, and placement services. This commenter indicated that his 
State already has a process for veterans to identify themselves upon 
check-in, with the help of front-line staff.
    In addition to the comments that supported the proposed rule, 
nearly all the comments offered suggestions to facilitate the provision 
of priority of service to veterans and other eligible persons. All 
relevant comments are discussed below.

Discussion of Comments on Subpart A--Purpose and Definitions

    This subpart addresses the purpose and scope of these regulations 
(Sec.  1010.100) and the definitions that apply for the purpose of 
these regulations (Sec.  1010.110). We received no comments in 
reference to Sec.  1010.100 but we did receive some comments regarding 
Sec.  1010.110. Those comments and our responses follow.
    Defining Key Terms (Sec.  1010.110)
Veteran
    Comment: Seven comments suggested that program administration by 
the States would be facilitated if the definition of veteran that 
appears at 38 U.S.C. 4211(4) were substituted in place of the 
definition that appears at 38 U.S.C. 101(2) and is specified in Sec.  
1010.110 of these regulations. One commenter stated that in his opinion 
expanding the definition to give priority of service to non-disabled 
veterans who served less than 180 days would dilute the concept of 
priority of service and result in the diversion of priority away from 
those veterans who truly deserve priority in an environment of limited 
resources.
    Response: We have not changed the definition of ``veteran'' for 
purposes of providing priority to DOL-funded employment and training 
programs because we are bound by law to use the definition proposed. In 
our view, Congress clearly intended that priority be made available to 
a broad category of former service members. The statute is quite clear 
at 38 U.S.C. 4215(a)(1)(A) that ``covered person'' for purposes of 
priority includes a ``veteran'' rather than the more narrow definition 
of ``eligible veteran'' that is applied, for example, to statutory 
reporting requirements for Wagner-Peyser State Grants and to program 
eligibility requirements for Jobs for Veterans State Grants. Since 
section 4215 does not specifically define the term ``veteran'' for 
purposes of applying the priority, we are required to look to title 
38's general definition of that term in section 101. See, Florida Dept. 
of Banking and Finance v. Board of Governors of the Federal Reserve 
System, 800 F. 2d 1534, 1536 (11th Cir 1986) (``It is an elementary 
precept of statutory construction that the definition of a term in the 
definitional section of a statute controls the construction of that 
term wherever it appears throughout the statute.''). The definition we 
proposed in Sec.  1010.110, comes from 38 U.S.C. 101(2) which provides 
the broad definition of ``veteran'' that is required to be used for 
purposes of title 38.
    We recognize that the definition of veteran to be applied for the 
purposes of the priority differs from and is broader than the 
definition of eligible veteran, which is applied for program 
eligibility for Jobs for Veterans State Grants, but we also note that 
section 4215 and these regulations do not change eligibility for such 
services nor for any other program. Section 1010.210(b) of this rule 
clearly provides that covered persons still must meet the statutory 
eligibility requirements applicable to qualified job training programs. 
Similarly, the definition of veteran to be applied for the purposes of 
the priority does not alter the statutory reporting requirements for 
Wagner-Peyser State Grants, which require application of the more 
narrowly defined definition of eligible veteran.
    While we are unable to change the definition of veteran for 
purposes of the priority, we acknowledge the concerns of several 
commenters that the broad definition used in Sec.  1010.110 fails to 
take into account such factors as length of service, nature of 
separation, combat

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experience, etc. We have determined that it would impose undue burdens 
on the workforce system and on covered persons to establish further 
priorities among covered persons at this time (see discussion of Sec.  
1010.310 below). Therefore, we intend to focus on implementing the 
regulations as proposed, while anticipating that these types of factors 
will inform our consideration of additional priorities among covered 
persons in the future.
    Comment: Four comments pointed out that program administration by 
the States would be facilitated by using one definition common to all, 
rather than the several different definitions of ``veteran'' in use for 
various DOL and other federally funded programs.
    Response: A benefit of using a definition of veteran that 
replicates the definition in 38 U.S.C. 101(2) is that it is the one 
that is most compatible with the affected DOL programs' respective 
other eligibility criteria. In effect, adoption of this definition of 
veteran is expected to result in the maximum feasible amount of the 
commonality or standardization that is recommended by these comments.
    With respect to the different definitions of veteran established by 
statute for eligibility for certain workforce programs, such as the 
broad definition established for eligibility under the Workforce 
Investment Act (WIA) and the narrow definition established for 
eligibility under the Jobs for Veterans State Grants, the Department 
does not have the authority to revise these definitions through these 
regulations. The Department is aware that Government Accounting Office 
(GAO) recently recommended (GAO-07-594) that the Congress consider 
standardizing the veteran definition applicable for eligibility in all 
workforce programs.
    Comment: Three comments cited the need to clarify the veteran 
definition in the regulations to assure that it is understood that an 
individual must serve a period of ``active duty'' to be considered a 
``veteran,'' and that National Guard members and Reservists may be 
considered ``veterans'' if they served on active duty.
    Response: We agree with the commenters that the rule will be 
improved by clarifying the eligibility for priority of National Guard 
members and Reservists who served on active duty. As described above, 
we look to 38 U.S.C. 101 for the definition of the term ``veteran'' 
because it is not specifically defined in sec. 4215. Among the 
requirements to qualify as a veteran under sec. 101(2), an individual 
must have served in ``active military, naval or air service.'' 
Participation in such service is determined by the standards in 
definitions at section 101(21), (22), (23) and (24). Those subsections 
define ``active military, naval or air service'' and the meanings of 
active duty, active duty for training, and inactive duty for training 
relevant to National Guard and Reserve members. These provisions 
establish that full-time National Guard and Reserve duty, other than 
full-time duty for training purposes, qualifies as active duty. 
Accordingly, we are revising the definition of ``veteran'' in Sec.  
1010.110 by adding a new sentence at the end to state: ``Active service 
includes full-time duty in the National Guard or a Reserve component, 
other than full-time duty for training purposes.''
    Comment: Other comments on the definition of ``veteran'' questioned 
whether it matters if National Guard members served domestically or 
overseas or if an individual left the armed forces prior to completion 
of training.
    Response: In both cases, these circumstances are irrelevant to the 
determination of veteran status for purposes of applying priority. 
Under Sec.  1010.110, as amended in the final rule, the location of the 
service of a National Guard member, a member of the Reserve forces, or 
for that matter, by a member of the regular Armed Forces, is irrelevant 
with respect to his or her status as a veteran. The determining factor 
is whether the person has a qualifying period of ``active duty'' as 
provided in Sec.  1010.110. Similarly, it is the nature of the 
discharge (other than dishonorable) not the details of the person's 
service career that is the determining factor in the definition of 
``veteran.''
    Comment: One comment proposed simplifying the definition of 
``veteran'' to, ``any veteran with a DD-214 with a discharge status 
other than dishonorable is a covered person.''
    Response: We have determined that such a change would not be 
beneficial and we have not revised the definition of veteran. It would 
codify in regulations reliance upon a single document, which could be 
replaced or change over time and which may not be the only reliable 
source for verifying veteran status. As discussed below in the response 
to a comment on Sec.  1010.300, DOL intends to identify supplementary 
documents that provide equivalent verification of veteran status and to 
establish in policy guidance their acceptability for this purpose. That 
guidance is expected to be revised over time as the agencies 
responsible for maintaining the supplementary documentation modify 
their procedures. Codification of the DD-214 in these regulations as 
the sole criterion for veteran status would preclude this flexibility 
and impose practical burdens, both upon the persons intended to be the 
beneficiaries of this statute and the agencies that administer the 
affected programs.
Eligible Spouse
    Five comments suggested that, in the final rule, the Department 
should add to the list of ``covered persons'' defined in section 
1010.110 the spouses of persons who died while on active military duty.
    Response: DOL is sympathetic to that proposal but finds no evidence 
that Congress intended the definition of ``eligible spouse'' enacted in 
the Jobs for Veterans Act to be interpreted to include the spouses of 
those who died while on active duty. The law clearly delineates the 
circumstances in which a spouse may qualify as a covered person:
    (1) Any veteran who died of a service-connected disability;
    (2) Any member of the Armed Forces serving on active duty who, at 
the time of application for the priority, is listed in one or more of 
the following categories and has been so listed for a total of more 
than 90 days:
    (i) Missing in action;
    (ii) Captured in line of duty by a hostile force; or
    (iii) Forcibly detained or interned in line of duty by a foreign 
government or power;
    (3) Any veteran who has a total disability resulting from a 
service-connected disability, as evaluated by the Department of 
Veterans Affairs;
    (4) Any veteran who died while a disability, as indicated in 
paragraph (3) of this section, was in existence.
    From this list, we can only infer that had the statute intended to 
cover the spouses of service members who died while on active duty, it 
would have done so explicitly.
    Comment: One comment requested further clarification as to what 
defines a ``spouse'' by asking whether State law, Federal law, or 
military law is the statutory authority, and also asked the corollary 
question about documentation that would be required to prove the spouse 
status.
    Response: Existing Departmental policy guidance to the States 
regarding programs affected by the priority of service regulation gives 
the States the authority to determine marital status issues in 
accordance with State law, unless the relevant Federal law governing a 
program is prescriptive in those respects, and also, therefore, to 
determine the appropriate form(s) of

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documentation required as proof of eligibility for services or benefits 
that are based on marital status. We think it unnecessary to embed such 
guidance in these regulations.
    Comment: One comment stated that only a spouse with U.S. 
citizenship married to the veteran at the time of discharge or 
retirement should be eligible for assistance.
    Response: The JVA does not exclude from eligibility spouses who 
were not citizens at the time that the veteran was discharged or 
retired, nor does it stipulate that a spouse had to be married to the 
veteran at the time of his or her discharge or retirement. Therefore, 
the Department sees no compelling reason to deny assistance to any 
spouse on either basis. However, covered persons are required to meet 
all program eligibility requirements, which may include legal 
authorization to engage in employment.
    Comment: One comment inquired about any time limits that apply to 
the ``eligible spouse'' status, and also about the impact of re-
marriage following death of the veteran on the eligibility of the 
widow(er) to be considered a covered person.
    Response: Although we are not revising the rule in response this 
comment, we appreciate the comment, recognize the need to clarify 
through policy guidance the distinctions identified below and we intend 
to do so. Criteria (1) and (4) of the eligible spouse definition 
(spouse of a veteran who died of a service-connected disability or 
while a service-connected total disability was in existence) clearly 
imply that the spouse becomes eligible under those two criteria upon 
the death of the veteran. The JVA does not include a disqualification 
clause pertaining to re-marriage following the death of the veteran and 
we see no reason to assume that one was intended. Similarly, if a 
widow(er) who qualifies under either of those criteria does not lose 
eligibility through remarriage, we cannot envision any other type of 
time limit that might apply.
    In contrast, criteria (2) and (3) of the eligible spouse definition 
(spouse of a service member who is missing in action, etc., or of a 
veteran who has a total disability resulting from a service-connected 
disability) clearly imply that the eligibility of the spouse is based 
upon the status of a service member or veteran who is still living. In 
the case of criterion (2), which is based upon the status of an active 
duty service member, the statutory wording makes it clear that the 
spouse is eligible only during the time that the service member remains 
in that status. Similarly, in the case of criterion (3), which is based 
upon the disability status of a living veteran, it is clear that the 
statute intends to confer eligibility on the spouse based on a marriage 
that is currently in effect. Therefore, if a spouse who is eligible 
under criterion (3) becomes divorced from the disabled veteran, the 
spouse would lose the eligibility to priority at that point. Similarly, 
if a spouse is eligible on the basis of a total disability, as defined 
by criterion (3), and the veteran were to lose the total service-
connected disability rating, the spouse would lose the eligibility to 
priority at that point.

Discussion of Comments on Subpart B--Understanding Priority of Service

    This subpart addresses what priority of service is (Sec.  
1010.200), the programs affected by priority of service (Sec.  
1010.210), the implementation of priority of service by recipients 
(Sec.  1010.220), the responsibilities of States and their subdivisions 
(Sec.  1010.230), the monitoring of priority of service (Sec.  
1010.240), and the possibility of waiving priority of service (Sec.  
1010.250). We received no comments on Sec.  1010.230 or Sec.  1010.250; 
but we did receive comments on the other four sections of this subpart. 
Those comments and our responses follow.
Identifying Qualified Job Training Programs (Sec.  1010.210)
    Comment: Two of the comments raised questions regarding the 
application of priority of service to non-DOL program partners in One-
Stop Career Centers. One commenter requested a clarification of how 
priority of service applies to any non-DOL program partner and a second 
commenter suggested the inclusion of Vocational Rehabilitation programs 
among the programs required to provide priority of service.
    Response: The Department will not modify this section in response 
to these comments because the priority only applies to qualified job 
training programs funded in whole or in part by the Department of 
Labor, as defined in sec. 4215(a)(2). The Department does not have the 
authority to impose priority of service on programs funded by non-DOL 
sources. However, the Department, through policy guidance and technical 
assistance, will encourage all partners in One-Stop Career Centers to 
focus on providing services to veterans as a standard operating 
procedure within their respective service delivery strategies.
    Comment: One comment questioned why Unemployment Insurance (UI) was 
not included in the regulations as a program impacted by priority of 
service, apparently referring to the fact that UI recipients who are 
considered likely to exhaust their eligibility for UI benefits are 
referred to employment services through a process known as worker 
profiling.
    Response: The Department did not include UI because it is an income 
benefit program and not a qualified job training program, as defined in 
sec. 4215(a)(2) of the JVA. With respect to worker profiling, the 
Department issued guidance following the passage of the JVA (Training 
and Employment Guidance Letter No. 5-03, as well as program-specific 
guidance and technical assistance) explaining that priority of service 
requires that veterans, whose likelihood of benefit exhaustion 
qualifies them for referral to employment services, must be referred to 
employment services prior to or in conjunction with the referral of 
non-veterans. That policy remains in effect and is not affected by 
these regulations.
Implementing Priority of Service (Sec.  1010.220)
Funding Constraints
    Comment: Two comments expressed concerns about providing priority 
of service in a limited funding environment, particularly if large 
numbers of additional veterans choose to access the services of the 
One-Stop Career system. One commenter asserted that more resources for 
all DOL core workforce programs will be required to ensure that 
veterans and other workers receive the help they need. A second 
commenter expressed particular concern about the current resource 
capacity for their Management Information System.
    Response: The Department acknowledges that the publicly-funded 
workforce investment system is operating under a tight Federal budget, 
which means that Federal resources must be used strategically to meet a 
variety of competing local, regional, and State priorities. Given that 
priority of service has been in effect since 2003 and transitioning 
veterans have been provided information on accessing One-Stop Career 
Centers through the Transition Assistance Program for many years, DOL 
does not anticipate a significant increase in veteran customers. With 
regard to new reporting requirements associated with this rule and the 
companion Information Collection Request (ICR) package (ICR Reference 
Number 200805-1205-001), DOL acknowledges that the new data to be 
collected will require some changes. However, DOL has attempted to

[[Page 78136]]

minimize the changes required by utilizing, to the maximum extent 
possible, existing data collection processes to collect the new data.
Service Delivery Processes
    Comment: A number of comments addressed the provision of priority 
of service at the point of entry to the workforce system. Three 
commenters indicated a need to assist front-line staff in applying 
regulations and policies at the point of entry and called for a more 
detailed explanation of the regulations and their impact on One-Stop 
operations. Other commenters requested guidance on how to handle 
priority of service affirmation during self-registration, whether at 
program operators' sites or from remote locations. One commenter 
pointed out that modifications to electronic technologies may be 
required to ensure the same point of entry data being collected in 
physical locations is also collected for those accessing services 
remotely.
    Response: DOL intends to provide extensive guidance and technical 
assistance on implementing priority of service under this rule. This 
may include policy guidance, webinars, question and answer documents, 
and highlights of best practices, and will address issues such as self-
registration.
    Comment: Several comments identified service delivery procedures 
that may be impacted by the regulations. One commenter stated that 
implementing priority of service for covered persons would be 
unmanageable for certain services that are usually provided through 
personal appointments with service provider staff and also may create 
bad feelings or ill-will among non-covered customers. A second 
commenter asked for guidance regarding the processes that State 
agencies could use if they have to ``bump'' a non-veteran in order to 
give priority to a covered person. Another commenter objected to 
implementing priority of service as a ``cut in line'' policy.
    Response: It is important to note that priority of service under 
the JVA has been in effect since 2003 and recipients should already 
have policies and procedures in place to ensure priority of service to 
veterans. As part of implementation of this rule, recipients will need 
to reexamine their policies and procedures and change them if necessary 
to ensure priority of service is provided to covered persons. For 
example, program operators might consider adjusting policies to leave 
appointment slots open for covered persons, or designating staff to see 
covered persons on a walk-in basis on certain days. Regarding the 
creation of bad feelings or ill-will toward covered persons, customers 
of DOL-funded services need to be made aware which populations receive 
priority. Clearly posting this information is likely to decrease ill-
will. DOL will provide extensive guidance and technical assistance in 
how to implement priority of service under this rule.
Interference With the Intent of Priority of Service
    Comment: One comment asked what is to prevent Workforce Investment 
Boards from developing a plan that minimizes the participation of 
covered persons by placing the majority of program funds into training 
that might be of minimal interest to veterans, such as basic computer 
training and nurse's aide training.
    Response: DOL believes this scenario is extremely unlikely to 
occur. First, whichever occupations are targeted by local workforce 
areas, covered persons would still receive priority of service. Second, 
local workforce areas are governed by Workforce Investment Boards 
(WIBs) and the majority of WIB members are representatives of business. 
Based on local labor market conditions, WIBs determine the industries 
and occupations that will be a focus for training programs. Third, 
since local workforce areas must meet performance targets under the 
Workforce Investment Act for entered employment, employment retention 
and average earnings, it is unlikely that they would choose occupations 
not in demand, as this could result in not meeting their performance 
goals. Finally, if selected recipients do interfere with the intent of 
priority of service by emphasizing occupational areas unattractive to 
veterans, it is likely that the unusually low rates of participation by 
veterans in those programs or services will be documented through 
reporting and remedied through monitoring and any follow-up activities 
determined to be warranted.
Monitoring Priority of Service (Sec.  1010.240)
    Comment: One comment noted that, although the preamble of the NPRM 
refers to the measure mentioned in the JVA about covered persons being 
represented in affected programs in proportion to their incidence in 
the labor market, the proposed rule does not include specific 
performance standards related to that comparison. This commenter 
suggested that serving covered persons in proportion to their incidence 
in the labor market should be specified as a minimum achievement level 
for priority of service.
    Response: The Department has concluded that it would be premature 
at this point to attempt to establish performance targets for priority 
of service in these regulations. With respect to the labor market 
criterion that is specified in the JVA and noted in the comment, we 
interpret that criterion to be primarily applicable to the overall 
performance of the Department in implementing priority of service at 
the national level. While this criterion also could be applied to the 
specific performance of the recipients of DOL funds, its application at 
lower levels is limited by the fact that the estimates of the incidence 
of veterans in sub-national labor markets are less statistically 
precise. This issue is discussed further in our response to a comment 
received about Sec.  1010.320.
    In light of these considerations, the Department has determined 
that enhanced data collection and reporting, coupled with joint 
monitoring, offer the most appropriate avenues currently available to 
ensure compliance with priority of service. Specifically, for those 
programs serving over 1,000 covered persons annually, data collection 
systems will be modified to accommodate new priority of service data 
elements and analysis of that information will be a key component of 
monitoring.
    Comment: One comment suggested that the VETS State Directors 
monitor the implementation of priority of service in partnership with 
the State agency officials who coordinate or supervise the operations 
of the Jobs for Veterans State Grants program.
    Response: While the Department is generally supportive of the type 
of cooperative Federal-State relations between grantor and grantees 
that is conceptualized in this comment, we do not believe that it is 
appropriate to include a requirement of this type in regulations. These 
regulations have established, in Sec.  1010.240(b), that federal 
monitoring will be conducted jointly by a representative of the 
administering federal agency and a representative of VETS. We believe 
that the combined perspectives of these designated officials are fully 
adequate for federal monitoring purposes. Since states also will have 
their own monitoring responsibilities, we would have no objection if 
states exercised their option to apply the suggested approach for state 
monitoring purposes.
    Comment: One comment noted that the preamble language in the NPRM 
stated that submission of a corrective

[[Page 78137]]

action plan ``will'' be required if a recipient is found not to be in 
compliance with the priority of service requirement, but the regulatory 
text itself states that a corrective action plan ``may'' be required. 
The commenter suggested that we change the regulatory text to require a 
corrective action plan.
    Response: The Department will not change the regulation. The 
regulatory language is correct and it provides DOL with the authority 
to require a corrective action plan, when appropriate. There may be 
circumstances where minimal technical assistance will result in 
correction of a priority of service issue. Where any substantial 
changes to a program operator's policies or business practices are 
required, a formal corrective action plan will be required.
    Comment: One comment included a number of questions related to the 
Department's monitoring of the implementation of and compliance with 
the priority of service rule. The questions include whether the joint 
responsibility for oversight by ETA and VETS extends to the review of 
the State and local plans and any impact on State grant funds if a 
State ignores the requirements of the rule.
    Response: The Department believes that these concerns are 
adequately addressed by existing provisions of these regulations. 
Therefore, we do not intend to modify the rule in response to these 
comments. With respect to State and local planning, Sec.  1010.230(a) 
requires the inclusion of priorities and procedures addressing priority 
of service in State plans, while Sec.  1010.230(b) requires States to 
impose similar requirements for local plans. In addition, review of 
these plans by DOL staff as a monitoring activity is authorized by 
Sec.  1010.240(a). With respect to the potential impact of non-
compliance with priority of service on State grant funds, a grantee's 
non-compliance will be handled in accordance with the respective 
program's established compliance review processes, as required by Sec.  
1010.240(c).

Discussion of Comments on Subpart C--Applying Priority of Service

    This subpart addresses identifying covered persons (Sec.  
1010.300), applying priority of service to programs with differing 
eligibility requirements (Sec.  1010.310), reporting on priority of 
service (Sec.  320), and collecting and maintaining data on priority of 
service (Sec.  1010.330). We received comments on all four sections of 
this subpart. Those comments and our responses follow.
Identifying Covered Persons (Sec.  1010.300)
    We received a number of comments about the inter-related subjects 
of Identifying Covered Persons (Sec.  1010.300) and Collecting and 
Maintaining Data (Sec.  1010.330). For ease of organization, the 
responses to comments are treated under those two topic areas. However, 
these two sections should be read in conjunction with one another. In 
Sec.  1010.300, we primarily discuss when and how a covered person is 
identified. In Sec.  1010.330, we provide detailed information on 
collection processes that occur simultaneously with that 
identification.
    Comment: One comment stated that, due to a variety of factors, 
affected programs will not be able to enroll covered persons in numbers 
sufficient to attain the proportion of such persons in the labor 
market, unless all program operators subject to the priority of service 
regulations are mandated to conduct outreach efforts to recruit covered 
persons.
    Response: The commenter did not provide, and the Department does 
not have from other sources, evidence to support the contention that 
affected program operators will not attract covered persons as 
applicants for services in the numbers equal to or in excess of their 
incidence in the local labor markets. In addition, the JVA does not 
include provisions about outreach. Therefore, other than requiring (in 
Sec. Sec.  1010.230 and 1010.300) that program operators identify 
covered persons and inform them about the priority, the Department will 
not compel program operators through regulations to commence or enhance 
outreach efforts, as suggested by the commenter. However, the 
Department encourages all program operators to assess the adequacy of 
their sources of candidates for services and, if that assessment 
indicates that implementing outreach to covered persons would be 
beneficial, the Department encourages them to do so.
    Comment: One comment suggested that State agencies should be 
authorized to verify covered persons' status through means other than 
obtaining an official copy of a DD-214 document. The commenter 
suggested several other available sources.
    Response: As indicated in our prior response to a comment on Sec.  
1010.110, the Department does not oppose allowing DOL-supported program 
agencies to use alternative sources, such as databases maintained by 
State veterans affairs divisions or commissions, to verify an 
individual's claim of veteran's status, as long as those other sources 
can certify the veracity of their records and have effective procedures 
for matching the covered person with those records. However, addressing 
the specifics of such verification sources is more appropriate for 
policy guidance than for regulations; we intend to address that topic 
in detail in future guidance.
    Comment: One comment claimed that, in order to prove his or her 
right to ``priority of service'' at the initial point of entry into the 
State Workforce Agency's network of program services, a covered person 
would have to provide personal information not required of non-covered 
persons. The commenter stated that such requirements could cause some 
customer satisfaction issues.
    Response: It is the Department's intent that individuals identified 
as covered persons will not be required to verify their status as 
veterans or eligible persons at the point of entry unless they 
immediately undergo eligibility determination and formal enrollment in 
a program. To clarify that the requirement to identify covered persons 
at the point of entry does not imply that verification of covered 
person status is required at that point, a new paragraph (b) has been 
added to Sec.  1010.300 of the final rule. Even in those instances in 
which eligibility determination and enrollment take place at the point 
of entry, the Department believes that the covered person should be 
enrolled and given immediate priority and then be permitted to follow-
up subsequently with any required verification of his/her status as a 
covered person.
    In the more common instances in which eligibility determination and 
enrollment do not take place at the point of entry, the only procedures 
applicable to covered persons at that point (i.e., assignment of a 
unique identifier and deciding whether or not to respond voluntarily to 
the questions required to be asked for EEO purposes) are minimally 
burdensome. In addition, those procedures are equally applicable to 
non-covered persons at the point of participation.
    Comment: Two comments inquired how covered persons will be 
identified in a self-registration system.
    Response: Recipients will be required to have processes by which 
individuals who reach the point of entry to universal access programs 
through electronic technologies will be provided the opportunity to 
indicate their covered person status. However, DOL will not require 
documents that verify their status (e.g., DD-214 discharge form) at 
this stage. However, proof of status will be required during formal

[[Page 78138]]

determination for program eligibility. The DD-214 discharge form is 
considered the ``gold standard'' document for verification purposes. 
However, DOL will be developing a list of acceptable alternatives that 
correspond to WIA definition of covered person. This will be especially 
important for any new documentation needed for covered spouses. Covered 
spouses whose eligibility is based on the disability of the veteran 
should receive the relevant documentation from the Department of 
Veterans Affairs. Covered spouses whose eligibility is based on one of 
the three specific statuses of an active duty service member should 
receive the relevant documentation from the Department of Defense.
Applying Priority of Service (Sec.  1010.310)
    Comment: Several comments suggested or implied that a tiered system 
of sub-priorities should be established within the overall priority. 
For example, one comment included a detailed treatment of the nature of 
military discharges, e.g., honorable, other than honorable, 
dishonorable, bad conduct, etc., and proposed, within the universe of 
covered persons, institution of a tiered priority system that would 
reward those who are honorably discharged above all others. Another 
comment included a recommendation that priority of service be given 
first to veterans who actually served in combat zones and who were 
assigned to military occupational specialties directly oriented toward 
combat, such as infantry. A third comment expressed support for 
priority for service-connected disabled veterans, but pointed out that 
for many years, women in the military were kept out of combat zones, so 
giving priority to combat zone veterans would discriminate against 
veterans who were not allowed to earn that benefit and, in effect, 
perpetuate discrimination against women. This commenter expressed her 
belief that priority should be given on the basis of need, rather than 
disability.
    Response: Section 4215(b)(2) of the JVA states that ``The Secretary 
of Labor may establish priorities among covered persons * * *'' 
However, we do not intend to revise the rule at this time to specify 
sub-priorities within the overall priority. The principal factor 
underlying that decision is the Department's determination that 
specifying further sub-priorities within the overall priority at this 
time is very likely to be unduly burdensome, both to the system 
responsible for serving covered persons and to those covered persons 
intended to benefit from a sub-priority. Although the requirement to 
provide priority is not new, six major workforce programs will be 
required to implement new data collection procedures for covered 
persons at the point of entry under new reporting requirements that 
accompany these regulations. In addition, these regulations are 
expected to take effect at a time that is characterized by an 
expectation of increased demand for services over the near term in 
response to deteriorating economic conditions. In that context, the 
Department believes that implementing tiered sub-priorities at this 
time would impose an unreasonable burden by requiring: (a) Workforce 
professionals (or electronic systems) to make distinctions at the point 
of entry among sub-priorities within the overall priority; and, (b) 
covered persons to affirm their eligibility for differing levels of 
priority at the point of entry, based on distinctions of considerable 
complexity and subtlety. In summary, the Department believes that 
imposition of those burdens at this time would be very likely to 
generate results that are directly contrary to the intent of the 
statute and these regulations.
    The Department also recognizes that the intent of these regulations 
and the accompanying data collection requirements are likely to be 
assimilated by the workforce system over time. Therefore, the 
Department acknowledges that, at a future time and under more favorable 
conditions, it may be appropriate to undertake a revision of these 
regulations to further specify certain sub-priorities within the 
overall priority.
    Comment: One comment requested information on how income would be 
considered in determining eligibility for priority of service.
    Response: Income is not a relevant factor for a priority 
determination. For purposes of eligibility for the underlying programs, 
all income eligibility determinations should be based on the 
requirements of the program in which services are being sought. For 
example, in the Workforce Investment Act programs, the regulation at 20 
CFR 667.255 states that, ``any amounts received as military pay or 
allowances by any person who served on active duty, and certain other 
specified benefits must be disregarded. This applies when determining 
if a person is a `low-income individual' for eligibility purposes.''
Reporting on Priority of Service (Sec.  1010.320)
    Comment: A comment stated that in order to measure whether or not 
covered persons are being represented in affected programs in 
proportion to their incidence in the labor market, the Department needs 
to clarify exactly what is meant by ``the labor market.''
    Response: This comment refers to section 4215(d) of the JVA, which 
requires the Secretary to report to Congress annually on priority of 
service. The referenced section of the statute includes language 
requiring the Secretary to evaluate, ``whether the representation of 
veterans in such programs is in proportion to the incidence of 
representation of veterans in the labor market * * *'' The requirements 
included in Sec. Sec.  1010.320, 1010.330 and the accompanying ICR are 
expected to enhance the Secretary's capacity to fulfill that 
Congressional reporting responsibility. Since enactment of the JVA, the 
Department has fulfilled this requirement by comparing the rate of 
veteran participation in workforce programs nationally with the 
incidence of veteran representation in the labor market at the national 
level. The rate or incidence of veterans in the labor market has been 
determined each year based upon data provided by the Bureau of Labor 
Statistics and derived from the Current Population Survey.
    When the comparison described above is made at the national level, 
it represents a measure of the performance of the Department rather 
than a measure of the performance of the recipients of DOL funding. If 
a similar comparison were to be made below the national level (e.g., 
for a State workforce system), the Department would first need to 
identify the source of valid and reliable data on the rate of incidence 
of veterans within the labor market, at the level at which the 
comparison is to be made.
Collecting and Maintaining Data (Sec.  1010.330)
    Subsections (a) and (b) of Sec.  1010.330 and the ICR associated 
with this regulation establish new reporting requirements for those 
programs that serve over 1,000 covered persons per year nationally, 
including: WIA Adult, WIA Dislocated Worker, Wagner-Peyser Employment 
Service/Jobs for Veterans State Grants, National Emergency Grants 
(NEGs), Trade Adjustment Assistance (TAA), and the Senior Community 
Service Employment Program (SCSEP). All other qualified job training 
programs are exempt from this information collection but will be 
required to adopt the covered, non-covered, veteran and eligible spouse 
definitions as outlined in the JVA the next time their reporting 
requirements are renewed.
    The new reporting requirements for those job training programs that 
serve

[[Page 78139]]

over 1,000 persons annually are described more fully in the associated 
ICR (ICR Reference Number 200805-1205-001) but primarily involve: (1) 
Identifying covered persons at the point of entry, which is the 
earliest point that a covered person contacts the system in either a 
physical location (e.g., One-Stop Career Center or affiliate site) or 
remotely through electronic technologies); and (2) the collection of 
individual entrant records for all covered persons. Note: These new 
reporting requirements exempt the collection of information for non-
covered persons.
    In order to fully appreciate the context, it is helpful to review 
the discussion that follows in conjunction with the responses treated 
previously under the subheading Identifying Covered Persons (Sec.  
1010.300), since the new collection is based largely on identifying 
covered persons at the point of entry. The specific comments on (Sec.  
1010.300) and our responses follow.
    Comment: Four comments raised questions around self-registration of 
covered persons. Of these, one commenter specifically asked about what 
type of client inquiry would trigger the collection of data.
    Response: Paragraphs (a) and (b) of Sec.  1010.330 require that 
programs that serve over 1,000 covered persons nationally per year must 
identify and capture data on covered persons at the initial point of 
entry. This is the earliest point that a covered person first makes 
contact with the workforce investment system and is triggered by entry 
at either a physical location (e.g., One-Stop Career Center or 
affiliate site) or remotely through electronic technologies. DOL 
acknowledges that program operators will need to adjust manual and 
electronic intake processes to accommodate the new reporting 
requirements.
    Comment: Three comments addressed the covered person entry date. Of 
those, two commenters expressed the need for clarification in the 
definition and one commenter asked whether this information should be 
tracked retroactively for persons who entered the system years ago.
    Response: Although these comments were submitted in response to the 
NPRM, they treat topics that are not specifically addressed in Sec.  
1010.330 of the rule, but are addressed in the ICR associated with 
these regulations. Therefore, the Department will address these issues 
through the ICR clearance process and through the issuance of guidance 
on the implementation of the new data collection procedures, if 
necessary.
    Comment: Several comments raised concerns about the difficulty in 
making programming changes to the current MIS systems to capture the 
individual entrant record data elements. One commenter also expressed 
concerns over the logistics, including the short timeframe to implement 
the new reporting requirements, stating it will place an undue hardship 
on the State.
    Response: DOL acknowledges that information technology adjustments 
will need to be made to accommodate the new data fields and is aware 
that such adjustment can be a challenge, given resource constraints. 
Consequently, the Department has kept the data elements to a minimum in 
order to reduce the number of required modifications and to keep costs 
in check. DOL is examining the feasibility of coordinating the 
application of the new priority of service reporting requirements with 
the implementation of the new Workforce Investment Standardized 
Performance Reporting (WISPR) system. The Department will be issuing 
additional guidance on the implementation timeframes for these two new 
and related sets of reporting requirements.
    Comment: We received ten comments that focused on the perceived 
burdens that would be placed on the States by the new data collection 
requirements. Eight commenters specifically alluded to cost burdens. 
One commenter noted that the introduction of new client classifications 
will require changes to the current ETA 9002 and VETS 200 performance 
reports. Another commenter recommended that the implementation of 
priority of service reporting occur simultaneously with implementation 
of the WISPR requirement to avoid the cost of making multiple changes 
to reporting systems. Another commenter recommended that changes be 
compatible with the existing Workforce Investment Act Standardized 
Record Data (WIASRD).
    Response: As indicated above, DOL agrees that it would be 
advantageous if WISPR and the proposed priority of service reporting 
requirements were to take effect on the same date, and DOL is 
considering the feasibility of implementing the priority of service 
requirements in conjunction with the implementation of WISPR. If the 
implementation of the new priority of service reporting is coordinated 
with the implementation of WISPR, challenges with the ETA 9002 and VETS 
200 reports will be eliminated. That is because those two sets of 
reports will be replaced by other reports under WISPR. Similarly, 
changes to existing reporting systems will be avoided if the new 
priority of service reporting is implemented in conjunction with WISPR, 
because the priority of service requirements will be included in WISPR 
from the outset (i.e. there would be no ``retrofitting'' of existing 
reporting systems to accommodate the priority of service reporting).
    In the absence of coordinated implementation of priority of service 
reporting and WISPR, reporting entities will be required to amend 
existing reporting systems. Guidance will be forthcoming on the 
implementation processes and timeframes applicable to these two related 
reporting requirements, along with significant technical assistance in 
support of their implementation.
    Comment: Two comments raised questions about the adequacy of this 
data collection. One of the commenters recommended that the data 
collection be expanded to include non-covered persons so a comparison 
could be made with the covered person information. Another commenter 
suggested that there is no mechanism for determining whether, on the 
whole, covered persons received priority in obtaining employment 
enhancing services or, conversely, the frequency with which non-
veterans did.
    Response: DOL considered including non-covered persons and realizes 
the advantages in helping to draw comparisons between the two 
populations, but determined that the benefits did not outweigh the 
potential costs and burden. The workforce system currently serves about 
15 million individuals and about ten percent of those served are 
covered persons. Tracking the estimated 1.5 million covered entrants 
gives a narrower lens for analysis but provides the additional data 
point to illustrate the numbers of veterans accessing the workforce 
system. This data point, combined with normal participant data, will 
help the Department to better determine which of our covered person 
customers go on to receive services (or conversely, do not receive 
services). In addition, DOL intends to supplement this data by 
sponsoring random surveys of covered and non-covered persons accessing 
the workforce system to assist in comparing the delivery of services to 
the two groups. DOL agrees that the covered entrant data alone will not 
tell the complete story of priority of service but it will add crucial 
information that has been missing from the discussion. Based on this 
information, the Department will be able to determine the number of 
veterans who enter the system compared to the number who receive 
services. This indicator will help us to

[[Page 78140]]

determine if the system is, in fact, serving those who come to our 
system and are entitled to priority. To complete the assessment, DOL 
will apply information gathered through the priority of service 
evaluation, random surveys of covered and non-covered persons, and 
additional monitoring to help ensure that covered persons are receiving 
priority for publicly-funded workforce services.

III. Administrative Information

Regulatory Flexibility Analysis, Executive Order 13272, and Small 
Business Regulatory Enforcement Fairness Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. Chapter 6, requires 
the Department to evaluate the economic impact of this final rule with 
regard to small entities. The RFA defines small entities to include 
small businesses, small organizations including not-for-profit 
organizations, and small governmental jurisdictions. The Department 
must determine whether the rule imposes a significant economic impact 
on a substantial number of such small entities.
    The Department has determined that there is no significant economic 
impact resulting from this final rule. The JVA mandates that veterans 
receive priority of service in all qualified job training programs. The 
purpose of this rule is to implement the JVA's priority of service 
requirement. It defines the program and reporting requirements for 
ongoing programs funded by the Department (and any new programs created 
in the future) and administered by funding recipients. The priority of 
service provisions in the JVA do not create any new job training 
programs; rather, the programs affected by the priority of service are 
ongoing. The final rule requires that these programs give priority to 
veterans for the services provided by the programs. The rule requires 
funding recipients to do certain things, such as implement processes to 
identify covered persons at the point of entry and report on priority 
of service. However, the Department funds these programs and the funds 
are meant to include such activities as administration and reporting. 
Although certain funding recipients that operate qualified job training 
programs may be small entities, the Department certifies that this 
final rule does not have a significant economic impact on a substantial 
number of small entities under the provisions of the RFA and also under 
the provisions of Executive Order 13272.
    Finally, the Department has also determined that this final rule is 
not a ``major rule'' for purposes of The Small Business Regulatory 
Enforcement Fairness Act (SBREFA), 5 U.S.C. Chapter 8, which requires 
agencies to take certain actions when a ``major rule'' is promulgated. 
SBREFA defines a ``major rule'' as one that has or is likely to result 
in an annual effect on the economy of $100,000,000 or more; a major 
increase in costs or prices for, among other things, State or local 
government agencies; or in significant and adverse effects on the U.S. 
business climate. For the reasons already discussed, this final rule 
will not have any significant financial impact. Accordingly, none of 
the definitions of ``major rule'' apply in this instance.

Executive Order 12866

    Executive Order 12866 requires that for each ``significant 
regulatory action'' proposed by the Department, the Department conduct 
an assessment of the proposed regulatory action and provide the Office 
of Management and Budget (OMB) with the proposed regulation and the 
requisite assessment prior to publishing the regulation. A significant 
regulatory action is defined to include an action that will have an 
annual effect on the economy of $100 million or more, as well as an 
action that raises a novel legal or policy issue.
    The priority of service implemented by this final rule will not 
have an annual effect on the economy of $100 million or more, for the 
reasons outlined above. While much of the rule is consistent with 
current DOL policy, certain portions may raise novel policy issues. 
Accordingly, OMB has reviewed this final rule.

Paperwork Reduction Act

    The final rule for 20 CFR part 1010 titled Priority of Service for 
Covered Persons contains information collection (paperwork) 
requirements that are subject to review by the Office of Management and 
Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA-95), 44 
U.S.C. 3501 et seq., and OMB's regulations at 5 CFR part 1320. PRA-95 
defines ``collection of information'' as ``the obtaining, causing to be 
obtained, soliciting, or requiring the disclosure to third parties or 
the public of facts or opinions by or for an agency regardless of form 
or format * * *'' (44 U.S.C. 3502(3)(A)). The information collection 
requirements contained in the proposed rule for 20 CFR Part 1010 were 
submitted to OMB on August 15, 2008. On September 19, 2008, OMB 
instructed the Department to consider comments submitted in response to 
the Notice of Proposed Rulemaking and to resubmit the Information 
Collection Request (ICR) to OMB at the Final Rule stage.
    Pursuant to OMB's instructions and in accordance with the 
requirements of the PRA, the Department submitted an ICR to OMB 
requesting approval for the information collection requirements 
contained in this Final Rule. OMB approved the ICR on December 17, 
2008, under OMB Control Number 1205-0468 which will expire on July 31, 
2011.
    The Department notes that a Federal agency cannot conduct or 
sponsor a collection of information unless it is approved by OMB under 
the PRA, and displays a currently valid OMB control number, and the 
public is not required to respond to a collection of information unless 
it displays a currently valid OMB control number. Also, notwithstanding 
any other provision of law, no person shall be subject to penalty for 
failing to comply with a collection of information if the collection of 
information does not display a currently valid OMB control number.
    In response to the publication of the ICR, four comments were 
submitted to OMB and transmitted to DOL. Three of these comments also 
had been submitted to DOL in response to the NPRM and duplicates of 
those comments were separately submitted to OMB. The fourth comment was 
submitted only to OMB and specifically addressed the ICR. Based on that 
comment, one data item was added to the Quarterly Aggregate Report and 
the burden estimate has been revised to reflect that addition.
    The Department has summarized and responded to those comments that 
addressed the general data collection and reporting provisions included 
in section 1010.330 of the rule in Section II of this preamble, as part 
of the summary and responses to comments on that section of the rule. 
Similarly, the Department has summarized and responded to those 
comments that addressed the specific data collection and reporting 
provisions of the ICR in conjunction with Item A.8 of the revised 
Supporting Statement.
    The final ICR estimates the number of respondents and burden hours 
as follows:

[[Page 78141]]



----------------------------------------------------------------------------------------------------------------
                                                   Number of
                  Respondents                     respondents     Units of time per respondent     Burden hours
----------------------------------------------------------------------------------------------------------------
Covered Entrants..............................       1,586,815  3.15 minutes....................          83,308
New Covered Participants......................         151,530  22.4 minutes....................          56,571
Grantees......................................             237  82.49 hours.....................          19,550
                                               -----------------------------------------------------------------
    Total.....................................  ..............  ................................         159,429
----------------------------------------------------------------------------------------------------------------

    Total Estimated Burden Hours: 159,429
    Total Estimated Cost Burden: $0

Executive Order 13132

    The Department has reviewed this final rule in accordance with 
Executive Order 13132 regarding federalism and has determined that it 
does not have ``federalism implications.'' The rule does not ``have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.'' This 
rule implements the priority of services for qualified job training 
programs. Although States are recipients of funds for many qualified 
job training programs, this rule does not have a substantial direct 
effect on the States; it merely establishes certain conditions on the 
receipt of program funds. This rule does nothing to alter either the 
relationship between the national government and the States, or the 
distribution of power and responsibilities among the various levels of 
government. Accordingly, this final rule does not have ``federalism 
implications.''

Unfunded Mandates Reform Act of 1995

    For purposes of the Unfunded Mandates Reform Act (UMRA) of 1995, 
this final rule does not include any Federal mandate that may result in 
increased expenditures by State, local and tribal governments, or by 
the private sector. This rule merely establishes that recipients of 
qualified job training funds must provide priority of service to 
veterans served with such funds. As this final rule does not impose any 
unfunded Federal mandate, the UMRA is not implicated.

Executive Order 13045

    Executive Order 13045 concerns the protection of children from 
environmental health risks and safety risks. This rule implements the 
priority of service provisions for qualified job training programs 
funded by the Department. This final rule has no impact on safety or 
health risks to children.

Executive Order 13175

    Executive Order 13175 addresses the unique relationship between the 
Federal Government and Indian tribal governments. The order requires 
Federal agencies to take certain actions when regulations have ``tribal 
implications.'' Required actions include consulting with Tribal 
Governments prior to promulgating a regulation with tribal implications 
and preparing a tribal impact statement. The order defines regulations 
as having ``tribal implications'' when they 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.
    The Department has reviewed this final rule and concludes that it 
does not have tribal implications. Although tribal governments are 
recipients of some qualified job training program funds, this rule 
merely establishes certain conditions on the receipt of program funds. 
Indian tribes will not even be required to perform the new reporting 
duties described in this rule because the programs they administer do 
not serve an average of 1000 covered persons per year. The rule does 
nothing to affect either the relationship or the distribution of power 
and responsibilities between the Federal Government and Indian tribes. 
Therefore, this final rule does not have tribal implications for 
purposes of Executive Order 13175.

Environmental Impact Assessment

    The Department has reviewed this final rule in accordance with the 
requirements of the National Environmental Policy Act (NEPA) of 1969 
(42 U.S.C. 4321 et seq.), the regulations of the Council on 
Environmental Quality (40 CFR part 1500), and the Department's NEPA 
procedures (29 CFR part 11). The final rule will not have a significant 
impact on the quality of the human environment, and thus the Department 
has not prepared an environmental assessment or an environmental impact 
statement.

Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act, enacted as part of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 
2681), requires the Department to assess the impact of this rule on 
family well-being. A rule that is determined to have a negative affect 
on families must be supported with an adequate rationale. The 
Department has assessed this final rule and has determined that it will 
not have a negative effect on families.

Privacy Act

    The Privacy Act of 1974 (5 U.S.C. 552a) provides safeguards to 
individuals concerning their personal information which the Government 
collects. The Act requires certain actions by an agency that collects 
information on individuals when that information contains personally 
identifying information such as Social Security Numbers or names. 
Because this final rule does not require a new collection of 
personally-identifiable information, the Privacy Act does not apply in 
this instance.

Executive Order 12630

    This final rule is not subject to Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights, because it does not involve implementation of a policy 
with takings implications.

Executive Order 12988

    This final rule has been drafted and reviewed in accordance with 
Executive Order 12988, Civil Justice Reform, and will not unduly burden 
the Federal court system. The regulation 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.

Executive Order 13211

    This final rule is not subject to Executive Order 13211, because it 
will not have a significant adverse effect on the supply, distribution, 
or use of energy.

[[Page 78142]]

Plain Language

    The Department drafted this final rule in plain language.

Catalogue of Federal Domestic Assistance Number

    This final rule is not program-specific; rather it applies across a 
broad spectrum of qualified job training programs. Therefore, 
designation of a listing in the Catalog of Federal Domestic Assistance 
would not be appropriate.

List of Subjects in 20 CFR Part 1010

    Employment, Grant programs--Labor, Veterans.

0
For reasons stated in the preamble, 20 CFR Ch. IX is amended by adding 
part 1010 to read as follows:

PART 1010--APPLICATION OF PRIORITY OF SERVICE FOR COVERED PERSONS

Subpart A--Purpose and Definitions
Sec.
1010.100 What is the purpose and scope of this part?
1010.110 What definitions apply to this part?
Subpart B--Understanding Priority of Service
1010.200 What is priority of service?
1010.210 In which Department job training programs do covered 
persons receive priority of service?
1010.220 How are recipients required to implement priority of 
service?
1010.230 In addition to the responsibilities of all recipients, do 
States and political subdivisions of States have any particular 
responsibilities in implementing priority of service?
1010.240 Will the Department be monitoring for compliance with 
priority of service?
1010.250 Can priority of service be waived?
Subpart C--Applying Priority of Service
1010.300 What processes are to be implemented to identify covered 
persons?
1010.310 How will priority of service be applied?
1010.320 Will recipients be required to collect information and 
report on priority of service?
1010.330 What are the responsibilities of recipients to collect and 
maintain data on covered and non-covered persons?

    Authority: Pub. L. 109-461 (Dec. 22, 2006), section 605 [38 
U.S.C. 4215 Note]; 38 U.S.C. 4215.

Subpart A--Purpose and Definitions


Sec.  1010.100  What is the purpose and scope of this part?

    (a) Part 1010 contains the Department regulations implementing 
priority of service for covered persons. Priority of service for 
covered persons is authorized by section 2(a)(1) of JVA (38 U.S.C. 
4215). These regulations fulfill section 605 of the Veterans Benefits, 
Health Care, and Information Technology Act of 2006, Pub. L. 109-461 
(Dec. 22, 2006), which requires the Department to implement priority of 
service via regulation.
    (b) As provided in Sec.  1010.210, this part applies to all 
qualified job training programs.


Sec.  1010.110  What definitions apply to this part?

    The following definitions apply to this part:
    Covered person as defined in section 2(a) of the JVA (38 U.S.C. 
4215(a)) means a veteran or eligible spouse.
    Department or DOL means the United States Department of Labor, 
including its agencies and organizational units and their 
representatives.
    Eligible Spouse as defined in section 2(a) of the JVA (38 U.S.C. 
4215(a)) means the spouse of any of the following:
    (1) Any veteran who died of a service-connected disability;
    (2) Any member of the Armed Forces serving on active duty who, at 
the time of application for the priority, is listed in one or more of 
the following categories and has been so listed for a total of more 
than 90 days:
    (i) Missing in action;
    (ii) Captured in line of duty by a hostile force; or
    (iii) Forcibly detained or interned in line of duty by a foreign 
government or power;
    (3) Any veteran who has a total disability resulting from a 
service-connected disability, as evaluated by the Department of 
Veterans Affairs;
    (4) Any veteran who died while a disability, as indicated in 
paragraph (3) of this section, was in existence.
    Grant means an award of Federal financial assistance by the 
Department of Labor to an eligible recipient.
    Jobs for Veterans Act (JVA) means Public Law 107-288 (2002). 
Section 2(a) of the JVA, codified at 38 U.S.C. 4215(a), provides 
priority of service for covered persons.
    Non-covered person means any individual who meets neither the 
definition of ``veteran,'' as defined in this section, nor the 
definition of ``eligible spouse'' as defined in this section.
    Qualified job training program means any program or service for 
workforce preparation, development, or delivery that is directly 
funded, in whole or in part, by the Department of Labor.
    Recipient means an entity to which federal financial assistance, in 
whole or in part, is awarded directly from the Department or through a 
sub-award for any qualified job training program.
    Secretary means the Secretary of the Department of Labor.
    Veteran means a person who served in the active military, naval, or 
air service, and who was discharged or released therefrom under 
conditions other than dishonorable, as specified in 38 U.S.C. 101(2). 
Active service includes full-time duty in the National Guard or a 
Reserve component, other than full-time duty for training purposes.

Subpart B--Understanding Priority of Service


Sec.  1010.200  What is priority of service?

    (a) As defined in section 2(a) of the JVA (38 U.S.C. 4215(a)) 
``priority of service'' means, with respect to any qualified job 
training program, that a covered person shall be given priority over a 
non-covered person for the receipt of employment, training, and 
placement services provided under that program, notwithstanding any 
other provision of the law.
    (b) Priority in the context of providing priority of service to 
veterans and other covered persons in qualified job training programs 
covered by this regulation means the right to take precedence over non-
covered persons in obtaining services. Depending on the type of service 
or resource being provided, taking precedence may mean:
    (1) The covered person receives access to the service or resource 
earlier in time than the non-covered person; or
    (2) If the service or resource is limited, the covered person 
receives access to the service or resource instead of or before the 
non-covered person.


Sec.  1010.210  In which Department job training programs do covered 
persons receive priority of service?

    (a) Priority of service applies to every qualified job training 
program funded, in whole or in part, by the Department, including:
    (1) Any such program or service that uses technology to assist 
individuals to access workforce development programs (such as job and 
training opportunities, labor market information, career assessment 
tools, and related support services); and
    (2) Any such program or service under the public employment service 
system, One-Stop Career Centers, the Workforce Investment Act of 1998, 
a demonstration or other temporary program; any workforce development 
program targeted to specific groups; and those programs implemented by 
States

[[Page 78143]]

or local service providers based on Federal block grants administered 
by the Department.
    (b) The implementation of priority of service does not change the 
intended function of a program or service. Covered persons must meet 
all statutory eligibility and program requirements for participation in 
order to receive priority for a program or service.


Sec.  1010.220  How are recipients required to implement priority of 
service?

    (a) An agreement to implement priority of service, as described in 
these regulations and in any departmental guidance, is a condition for 
receipt of all Department job training program funds.
    (b) All recipients are required to ensure that priority of service 
is applied by all sub-recipients of Department funds. All program 
activities, including those obtained through requests for proposals, 
solicitations for grant awards, sub-grants, contracts, sub-contracts, 
and (where feasible) memoranda of understanding or other service 
provision agreements, issued or executed by qualified job training 
program operators, must be administered in compliance with priority of 
service.


Sec.  1010.230  In addition to the responsibilities of all recipients, 
do States and political subdivisions of States have any particular 
responsibilities in implementing priority of service?

    (a) Pursuant to their responsibility under the Workforce Investment 
Act of 1998, States are required to address priority of service in 
their comprehensive strategic plan for the State's workforce investment 
system. Specifically, States must develop policies for the delivery of 
priority of service by the State Workforce Agency or Agencies, Local 
Workforce Investment Boards, and One-Stop Career Centers for all 
qualified job training programs delivered through the State's workforce 
system. The policy or policies must require that processes are in place 
to ensure that covered persons are identified at the point of entry and 
given an opportunity to take full advantage of priority of service. 
These processes shall be undertaken to ensure that covered persons are 
aware of:
    (1) Their entitlement to priority of service;
    (2) The full array of employment, training, and placement services 
available under priority of service; and
    (3) Any applicable eligibility requirements for those programs and/
or services.
    (b) The State's policy or policies must require Local Workforce 
Investment Boards to develop and include in their strategic local plan, 
policies implementing priority of service for the local One-Stop Career 
Centers and for service delivery by local workforce preparation and 
training providers. These policies must establish processes to ensure 
that covered persons are identified at the point of entry so that 
covered persons are able to take full advantage of priority of service. 
These processes shall ensure that covered persons are aware of:
    (1) Their entitlement to priority of service;
    (2) The full array of employment, training, and placement services 
available under priority of service; and
    (3) Any applicable eligibility requirements for those programs and/
or services.


Sec.  1010.240  Will the Department be monitoring for compliance with 
priority of service?

    (a) The Department will monitor recipients of funds for qualified 
job training programs to ensure that covered persons are made aware of 
and afforded priority of service.
    (b) Monitoring priority of service will be performed jointly 
between the Veterans' Employment and Training Service (VETS) and the 
DOL agency responsible for the program's administration and oversight.
    (c) A recipient's failure to provide priority of service to covered 
persons will be handled in accordance with the program's established 
compliance review processes. In addition to the remedies available 
under the program's compliance review processes, a recipient may be 
required to submit a corrective action plan to correct such failure.


Sec.  1010.250  Can priority of service be waived?

    No, priority of service cannot be waived.

Subpart C--Applying Priority of Service


Sec.  1010.300  What processes are to be implemented to identify 
covered persons?

    (a) Recipients of funds for qualified job training programs must 
implement processes to identify covered persons who physically access 
service delivery points or who access virtual service delivery programs 
or Web sites in order to provide covered persons with timely and useful 
information on priority of service at the point of entry. Point of 
entry may include reception through a One-Stop Career Center 
established pursuant to the Workforce Investment Act of 1998, as part 
of an application process for a specific program, or through any other 
method by which covered persons express an interest in receiving 
services, either in-person or virtually.
    (b)(1) The processes for identifying covered persons at the point 
of entry must be designed to:
    (i) Permit the individual to make known his or her covered person 
status; and
    (ii) Permit those qualified job training programs specified in 
Sec.  1010.330(a)(2) to initiate data collection for covered entrants.
    (2) The processes for identifying covered persons are not required 
to verify the status of an individual as a veteran or eligible spouse 
at the point of entry unless they immediately undergo eligibility 
determination and enrollment in a program.
    (c) The processes for identifying covered persons must ensure that:
    (1) Covered persons are identified at the point of entry to allow 
covered persons to take full advantage of priority of service; and
    (2) Covered persons are to be made aware of:
    (i) Their entitlement to priority of service;
    (ii) The full array of employment, training, and placement services 
available under priority of service; and
    (iii) Any applicable eligibility requirements for those programs 
and/or services.


Sec.  1010.310  How will priority of service be applied?

    (a) Recipients of funds for qualified job training programs must 
implement processes in accordance with Sec.  1010.300 to identify 
covered persons at the point of entry, whether in person or virtual, so 
the covered person can be notified of their eligibility for priority of 
service. Since qualified job training programs may offer various types 
of services including staff-assisted services as well as self-services 
or informational activities, recipients also must ensure that priority 
of service is implemented throughout the full array of services 
provided to covered persons by the qualified job training program.
    (b) Three categories of qualified job training programs affect the 
application of priority of service: universal access, discretionary 
targeting and statutory targeting. To obtain priority, a covered person 
must meet the statutory eligibility requirement(s) applicable to the 
specific program from which services are sought. For those programs 
that also have discretionary or statutory priorities or preferences 
pursuant to a Federal statute or regulation, recipients must coordinate 
providing priority of

[[Page 78144]]

service with applying those other priorities, as prescribed in 
paragraphs (b)(2) and (b)(3) of this section.
    (1) Universal access programs operate or deliver services to the 
public as a whole; they do not target specific groups. These programs 
are required to provide priority of service to covered persons.
    (2) Discretionary targeting programs focus on a particular group, 
or make efforts to provide a certain level of service to such a group, 
but do not specifically mandate that the favored group be served before 
other eligible individuals. Whether these provisions are found in a 
Federal statute or regulation, priority of service will apply. Covered 
persons must receive the highest priority for the program or service, 
and non-covered persons within the discretionary targeting will receive 
priority over non-covered persons outside the discretionary targeting.
    (3) Statutory targeting programs are programs derived from a 
Federal statutory mandate that requires a priority or preference for a 
particular group of individuals or requires spending a certain portion 
of program funds on a particular group of persons receiving services. 
These are mandatory priorities. Recipients must determine each 
individual's covered person status and apply priority of service as 
described below:
    (i) Covered persons who meet the mandatory priorities or spending 
requirement or limitation must receive the highest priority for the 
program or service;
    (ii) Non-covered persons within the program's mandatory priority or 
spending requirement or limitation, must receive priority for the 
program or service over covered persons outside the program-specific 
mandatory priority or spending requirement or limitation; and,
    (iii) Covered persons outside the program-specific mandatory 
priority or spending requirement or limitation must receive priority 
for the program or service over non-covered persons outside the 
program-specific mandatory priority or spending requirement or 
limitation.


Sec.  1010.320  Will recipients be required to collect information and 
report on priority of service?

    Yes. Every recipient of funds for qualified job training programs 
must collect such information, maintain such records, and submit 
reports containing such information and in such formats as the 
Secretary may require related to the provision of priority of service.


Sec.  1010.330  What are the responsibilities of recipients to collect 
and maintain data on covered and non-covered persons?

    (a) General Requirements. Recipients must collect information in 
accordance with instructions issued by the Department.
    (1) Recipients must collect two broad categories of information:
    (i) For the qualified job training programs specified in paragraph 
(a)(2) of this section, information must be collected on covered 
persons from the point of entry, as defined in Sec.  1010.300(a), and 
as provided in paragraph (b) of this section; and,
    (ii) For all qualified job training programs, including the 
programs specified in paragraph (a)(2) of this section, information 
must be collected on covered and non-covered persons who receive 
services, as prescribed by the respective qualified job training 
programs, as provided in paragraph (c) of this section.
    (2) For purposes of paragraph (a)(1) of this section, qualified job 
training programs that served, at the national level, 1,000 or more 
veterans per year for the three most recent years of program operations 
(currently the Wagner-Peyser, WIA Adult, WIA Dislocated Worker, WIA 
National Emergency Grant, and Senior Community Service Employment 
Programs) must collect information and report on covered entrants. The 
Trade Adjustment Assistance Program must collect information and report 
on covered entrants on the effective date of the next information 
collection requirement applicable to that program, whether that is for 
a renewal of an existing approved information collection or for 
approval of a new information collection.
    (3) For purposes of this section, covered persons at the point of 
entry are referred to as ``covered entrants.'' This group includes two 
further subgroups: veterans and eligible spouses as defined in Sec.  
1010.110.
    (b) Collection and Maintenance of Data on Covered Entrants. In 
accordance with instructions issued by the Department, recipients of 
assistance for the programs specified in paragraph (a)(2) of this 
section must collect and report individual record data for all covered 
entrants from the point of entry.
    (c) Collection and Maintenance of Data on Covered and Non-Covered 
Persons Who Receive Services. In accordance with instructions issued 
for individual qualified job training programs, all recipients must 
collect and maintain data on covered and non-covered persons who 
receive services, including individual record data for those programs 
that require establishment and submission of individual records for 
persons receiving services.
    (1) The information to be collected shall include, but is not 
limited to:
    (i) The covered and non-covered person status of all persons 
receiving services;
    (ii) The types of services provided to covered and non-covered 
persons;
    (iii) The dates that services were received by covered and non-
covered persons; and;
    (iv) The employment outcomes experienced by covered and non-covered 
persons receiving services.
    (2)(i) Except as provided in paragraph (c)(2)(ii) of this section, 
for persons receiving services, recipients must apply the definitions 
set forth in Sec.  1010.110 to distinguish covered from non-covered 
persons receiving services and, within covered persons, to distinguish 
veterans from eligible spouses.
    (ii) Until qualified job training programs adopt the definitions 
for covered and non-covered persons set forth at Sec.  1010.110 through 
the publication of requirements pursuant to the Paperwork Reduction 
Act, recipients must collect data on the services provided to and the 
outcomes experienced by veterans (however defined) and non-veterans 
receiving services in accord with regulations, policies and currently 
approved information collections.
    (d) All information must be stored and managed in a manner that 
ensures confidentiality.

    Signed at Washington, DC, this 15th day of December 2008.
Charles S. Ciccolella,
Assistant Secretary, Veterans Employment and Training Service.
 [FR Doc. E8-30166 Filed 12-18-08; 8:45 am]
BILLING CODE 4510-79-P