[Federal Register Volume 75, Number 166 (Friday, August 27, 2010)]
[Proposed Rules]
[Pages 52671-52689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21097]


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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 672

RIN 1205-AB49


YouthBuild Program

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice of proposed rulemaking with request for comments.

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SUMMARY: The Employment and Training Administration (ETA) of the U.S. 
Department of Labor (Department) is issuing this Notice of Proposed 
Rulemaking (NPRM) to implement the YouthBuild Transfer Act of 2006 
(Transfer Act), which establishes the YouthBuild program in the 
Department under subtitle D of Title I of the Workforce Investment Act 
of 1998 (WIA) as amended. The proposed rule clarifies the requirements 
of the Transfer Act for YouthBuild program providers and participants. 
The proposed rule would set standards under which YouthBuild program 
providers would carry out the goals of the program, which are to assist 
at-risk youth in obtaining a High School diploma or GED and acquiring 
occupational skills training that leads to employment through the 
construction/rehabilitation of housing for low-income or homeless 
individuals and families in the community.

DATES: Interested persons are invited to submit comments on this 
proposed rule. To ensure consideration, comments must be received on or 
before October 26, 2010.

ADDRESSES: You may submit comments, identified by Regulatory 
Information Number (RIN) 1205-AB49, by any one of the following 
methods:
    Federal e-Rulemaking Portal: http://www.regulations.gov. Follow the 
Web site instructions for submitting comments.
    Mail and hand delivery/courier: Written comments, disk, and CD-ROM 
submissions may be mailed to Thomas M. Dowd, Administrator, Office of 
Policy Development and Research, U.S. Department of Labor, 200 
Constitution Avenue, NW., Room N-5641, Washington, DC 20210.
    The Department will not accept e-mailed or faxed comments.
    Instructions: Label all submissions with RIN 1205-AB49.
    Please submit your comment by only one method. Please be advised 
that the Department will post all comments received on http://www.regulations.gov without making any change to the comments, or 
redacting any information. The http://www.regulations.gov Web site is 
the Federal e-rulemaking portal and all comments posted there are 
available and accessible to the public. Therefore, the Department 
recommends that commenters safeguard any personal information such as 
Social Security Numbers, personal addresses, telephone numbers, and e-
mail addresses included in their comments as such information may 
become easily available to the public via the http://www.regulations.gov Web site. It is the responsibility of the commenter 
to safeguard any such personal information.
    Also, please note that due to security concerns, postal mail 
delivery in Washington, DC may be delayed. Therefore, the Department 
encourages the public to submit comments on http://www.regulations.gov.
    Docket: All comments on this proposed rule will be available on the 
http://www.regulations.gov Web site and can be found using RIN 1205-
AB49. The Department also will make all the comments it receives 
available for public inspection by appointment during normal business 
hours at the above address. If you need assistance to review the 
comments, the Department will provide you with appropriate aids such as 
readers or print magnifiers. The Department will make copies of the 
rule available, upon request, in large print, Braille and electronic 
file on computer disk. The Department will consider providing the rule 
in other formats upon request. To schedule an appointment to review the 
comments and/or obtain the rule in an alternative format, contact the 
Office of Policy Development and Research at (202) 693-3700 (this is 
not a toll-free number). You may also contact this office at the 
address listed.

FOR FURTHER INFORMATION CONTACT: Thomas M. Dowd, Administrator, Office 
of Policy Development and Research, U.S. Department of Labor, 200 
Constitution Avenue, NW., Room N-5641, Washington, DC 20210; telephone 
(202) 693-3700 (this is not a toll-free number).
    Individuals with hearing or speech impairments may access the 
telephone number above via TTY by calling the toll-free Federal 
Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:
    The Preamble of this proposed rule is organized as follows:

I. Background--provides a brief description of the development of 
the proposed rule
II. Section-by-Section Review of the Proposed Rule--summarizes and 
discusses the structure and requirements of the YouthBuild Program
III. Administrative Section--sets forth the applicable regulatory 
requirements

I. Background

    On September 22, 2006, the YouthBuild Transfer Act, Public Law 109-
281 (Transfer Act) was signed into law. The Transfer Act authorizes 
grants for job training and educational activities for at-risk youth 
who, as part of their training, help construct or rehabilitate housing 
for homeless individuals and families and low-income families in their 
respective communities. Participants receive a combination of classroom 
training, job skills development, and on-site training in the 
construction trades.
    The White House Task Force for Disadvantaged Youth recommended 
transferring the administration of the YouthBuild program, also known 
as ``Hope for Youth'', from the U.S. Department of Housing and Urban 
Development (HUD) to the Department. The White House Task Force for 
Disadvantaged Youth Final Report. Pg. 4, October 2003.
    The transfer allows for greater coordination of the YouthBuild 
program with Job Corps, WIA Youth Programs, the workforce investment 
system, including local workforce investment boards (WIBs), One-Stop 
Career Centers, and their partner programs (for example, Federal, 
State, and local education agencies), while at the same time retaining 
many of the same affordable housing goals as under the HUD program. The 
Transfer Act transfers the authority for the YouthBuild program from 
the Cranston-Gonzalez National Affordable Housing Act (49 U.S.C. 12899 
et seq.) (Cranston-Gonzales Act) to subtitle D of Title I of WIA and it 
makes modifications and changes to the programs that focus on 
increasing the skilled workforce available for the construction trades.
    In addition to transferring the administration of the program from 
HUD to the Department, the Transfer Act expands the activities 
authorized under the YouthBuild program to include many activities 
authorized under the WIA Title I youth formula program. The transfer 
maintains all the goals of the YouthBuild program as

[[Page 52672]]

originally developed under HUD, but shifts the emphasis to education 
and skills training for at-risk youth participants. The Department will 
continue to support the development of affordable housing which was a 
goal of the HUD program. The Transfer Act incorporates technical 
modifications to the YouthBuild program to make it consistent with 
WIA's job training, education, and employment goals. Moreover, the 
Transfer Act authorizes education and workforce investment activities 
such as occupational skills training, internships, and job shadowing, 
as well as community service and peer-centered activities. In addition, 
the Transfer Act authorizes the Department to use performance 
indicators developed for Federal youth employment and training programs 
to enhance the accountability of YouthBuild programs.
    Although the construction and rehabilitation of affordable housing 
continues to be a major component of the YouthBuild training program, 
the Department's main focus is to prepare at-risk youth for employment. 
Therefore, the Department has increased the emphasis on the education 
and occupational skill training provided by YouthBuild programs. 
Specifically, the occupational skill training offered in YouthBuild 
programs must begin upon program enrollment and be tied to the award of 
an industry recognized credential; i.e., what someone receives after 
successful completion of the National Center for Construction Education 
and Research' program, the Home Builder's Institute's (HBI) HPACT 
curriculum, or the Building Trades Multi-Craft Core curriculum.
    The Transfer Act also places emphasis on coordinating training with 
registered apprenticeship programs, which will allow participants to 
enter such programs upon exiting YouthBuild. Additionally, the Transfer 
Act permits the use of some YouthBuild funds to pay for supervision and 
training costs to allow participants to develop skills and obtain work 
experience in the rehabilitation or construction of community buildings 
and other public facilities. The Transfer Act authorizes these and 
other new activities to better assist at-risk youth in preparing for 
employment.
    The Department has administered the YouthBuild program, including 
making grants, for more than three years since the passage of the 
Transfer Act. In drafting these regulations, the Department relies on 
the knowledge gained from administering these grants, along with its 
experience gained in developing the WIA Youth Program.
    The Transfer Act retains the out-of-school and age requirements 
that were in the Cranston-Gonzalez Act for YouthBuild, targeting 
eligible youth who are school dropouts and are between the ages of 16 
and 24 years old. The Transfer Act further provides that at least 75 
percent of participants must be school drop-outs who are members of 
low-income families, youth in foster care, youth offenders, youths with 
a disability, children of an incarcerated parent, or migrant youths. In 
addition, to ensure that other at-risk youths have access to the 
program, the Transfer Act includes a 25 percent eligibility exception. 
This exception permits secondary schools to refer students to a 
YouthBuild program that offers a secondary school diploma if the 
program is determined to be a better fit for the youth. The exception 
also allows youth who have a diploma or General Education Development 
(GED) degree but test as basic skills deficient to participate in a 
YouthBuild program.

II. Section-by-Section Review of the Proposed Rule

Subpart A--Purpose and Definitions

What is YouthBuild? (Sec.  672.100)
    This section describes the YouthBuild program. YouthBuild is a 
workforce development program that provides employment, education, 
leadership development, and training opportunities to disadvantaged 
youth. The program also benefits the larger community because it 
provides new and rehabilitated affordable housing.
    The program recruits youth between the ages of 16 and 24. The youth 
are school dropouts and are either: A member of a low-income family, a 
youth in foster care, a youth offender, a youth who is an individual 
with a disability, a child of an incarcerated parent, or a migrant 
youth. In addition, to ensure that other at-risk youths have access to 
the program, the Transfer Act includes a 25 percent eligibility 
exception. Program participants are given the chance to earn their high 
school diploma or pass their GED tests, to participate in the 
occupational skills training, and are provided with the opportunity to 
pursue post-secondary education and training, including registered 
apprenticeship programs.
    The program creates a sense of self-worth for its participants by 
providing skills training in the construction industry and highlighting 
the important role that each individual can have on community 
development and engagement. In addition, youth can witness their 
success and contributions through the rehabilitation and construction 
of affordable housing for homeless individuals and families and low-
income families.
What are the purposes of the YouthBuild program? (Sec.  672.105)
    This section describes the purposes of the YouthBuild program. The 
overarching goal of the YouthBuild program is to offer disadvantaged 
youth the opportunity to obtain education and useful employment skills 
to enter the labor market. Construction encompasses this goal, and 
serves as a platform to provide skills training and education to 
YouthBuild participants.
    In addition to the goal listed above, another essential element of 
the YouthBuild program is the provision of counseling and assistance in 
obtaining post-secondary education and/or employment and training 
placements that allow youth to further their education and training. 
Further, youth also have the ability to participate in leadership 
development and community service activities. The program seeks to 
increase the number of affordable housing units available to alleviate 
the rate of homelessness in communities with YouthBuild programs. 
Another goal of YouthBuild is to foster the development of leadership 
skills and a commitment to community improvement among youth in low-
income communities. Through these opportunities, youth can contribute 
to their communities both through workforce participation and housing 
development.
What definitions apply to this part? (Sec.  672.110)
    The definitions that are listed in this section are specific to the 
YouthBuild program. As an amendment to the Workforce Investment Act, 
other definitions that apply to the YouthBuild Program are defined 
under sec. 101 of WIA, 29 U.S.C. 2801 and at 20 CFR part 660.
    Alternative School: To determine the educational status and 
therefore eligibility of a youth to participate in YouthBuild, the term 
``alternative school'' means a school or program that is set up by a 
State, school district, or other community-based entity to serve young 
people who are not succeeding in a traditional public school 
environment. An ``alternative school'' must be recognized by the 
authorizing entity designated by the State. The school must award a 
high school diploma. ``Alternative schools'' must be affiliated with 
YouthBuild programs in order to qualify as part of a ``sequential 
service strategy.''

[[Page 52673]]

    Community or Other Public Facility: The term ``community or other 
public facility'' means those facilities which are publicly owned and 
publicly used for the benefit of the community. Examples include public 
use buildings such as recreation centers, libraries, public park 
shelters, or public schools. This term may also encompass facilities 
used by the program but only if the facility is available for public 
entry and use.
    Core Construction: The term ``core construction'' means activities 
that are directly related to the construction or rehabilitation of 
residential, community, or other public facilities. These activities 
include, but are not limited to, job skills that can be found under the 
Standard Occupational Classification System (SOC) major group 47, 
Construction and Extraction Occupations, in codes 47-1011 through 47-
4099. These activities may also include, but are not limited to 
construction skills that may be required by green building and 
weatherization industries but are not yet standardized. A full list of 
the SOC's can be found at the Department Bureau of Labor Statistics 
(BLS) Web site, http://www.bls.gov/soc.
    Eligible Entity: The term ``eligible entity'' describes the types 
of organizations that are permitted to apply for a YouthBuild grant. 
The definition of ``eligible entity'' was provided in the YouthBuild 
Transfer Act.
    Homeless Individual: The definition of ``homeless individual'' 
comes from the McKinney-Vento Homeless Assistance Act. 42 U.S.C. 11302. 
This term is defined in the YouthBuild Transfer Act.
    Housing Development Agency: The term ``housing development agency'' 
is defined in the YouthBuild Transfer Act.
    Income: The definition of ``income'' comes from the United States 
Housing Act of 1937. 42 U.S.C. 1437a(b). Under Sec.  3(b) of the 
YouthBuild Transfer Act (29 U.S.C. 2918(a)), the determination of 
income is made in accordance with guidance provided by the Secretary of 
Labor (Secretary), in consultation with the Secretary of Agriculture.
    Indian; Indian Tribe: The definitions of ``Indian'' and ``Indian 
tribe'' are taken from the Indian Self-Determination and Education 
Assistance Act. 25 U.S.C. 450b. These terms are defined in the 
YouthBuild Transfer Act.
    Individual of Limited English Proficiency: The definition of an 
``individual of limited English proficiency'' means an eligible 
participant who meets the criteria derived from the Adult Education and 
Family Literacy Act. 20 U.S.C. 9202(10). This term is defined in the 
YouthBuild Transfer Act.
    Low-Income Family: The definition of the term ``low-income family'' 
is taken from the United States Housing Act of 1937. 42 U.S.C. 
1437a(b)(2). As defined, a ``low-income family'' is: A family whose 
income does not exceed 80 percent of the median income for the area 
unless the Secretary determines that a higher or lower ceiling is 
warranted. This term is defined in the YouthBuild Transfer Act. Under 
HUD's YouthBuild program, one of the eligibility criteria for 
participants was that the individual must be a very low-income 
individual or a member of a ``very low-income family.'' However, the 
YouthBuild Transfer Act requires only that an individual be a member of 
a ``low-income family'' or fall into one of the new categories 
prescribed by the Transfer Act. The definition of ``low-income family'' 
in the proposed rule subsumes the definition of ``very low-income 
family'' in HUD's YouthBuild regulations and broadens the pool of 
eligible participants. This definition applies not only to the 
eligibility of participants but also to the requirement that any 
residential units constructed or rehabilitated using YouthBuild funds 
must be used to house homeless individuals and families or low-income 
families. Further, as defined by 42 U.S.C. 1437a(b)(2)(3), the term 
families includes families consisting of one person.
    Migrant Youth: The term ``migrant youth'' means a youth who, or a 
youth who is the dependent of someone who, during the previous 12 
months has:
    (a) Worked at least 25 days in agricultural labor that is 
characterized by chronic unemployment or underemployment;
    (b) Made at least $800 from agricultural labor that is 
characterized by chronic unemployment or underemployment, if at least 
50 percent of his or her income came from such agricultural labor;
    (c) Was employed at least 50 percent of his or her total employment 
in agricultural labor that is characterized by chronic unemployment or 
underemployment; or
    (d) Was employed in agricultural labor that requires travel to a 
jobsite such that the worker is unable to return to a permanent place 
of residence within the same day.
    This definition is adapted from guidance for determining 
eligibility of migrant and seasonal farmworkers for the National 
Farmworker Jobs Program in Department of Labor, Farmworker Bulletin 00-
02, NFJP Eligibility Policy Guidance (2000).
    Needs-Based Stipend: ``needs-based stipends'' are additional 
payments (beyond regular stipends for program participation) that are 
based on defined needs that enable a youth to participate in the 
program. To provide ``needs-based stipends'', the grantee must have a 
written policy in place, which defines: (a) Eligibility; (b) the 
amounts; and (c) the required documentation and criteria for payments. 
This policy must be applied consistently to all program participants.
    Occupational Skills Training: ``Occupational skills training'' 
means an organized program of study that provides specific vocational 
skills that lead to proficiency in performing actual tasks and 
technical functions required by certain occupational fields at entry, 
intermediate, or advanced levels. The occupational skills training 
offered in YouthBuild programs must begin upon program enrollment and 
tied to the award of an industry-recognized credential.
    Partnership: The term ``partnership'' means an agreement that 
involves a Memorandum of Understanding (MOU) or letter of commitment 
submitted by each organization and applicant, as defined in the 
YouthBuild Transfer Act, that plan on working together as partners in a 
YouthBuild program. Each partner must have a clearly defined role. 
These roles must be verified through a letter of commitment, not just a 
letter of support, or MOU submitted by each partner. The letter of 
commitment or MOU must detail the role the partner will play in the 
YouthBuild Program, including specific responsibilities and resources 
committed, if appropriate. These letters or MOU's must clearly indicate 
the partnering organization's unique contribution and commitment to the 
YouthBuild Program. This term is not in the YouthBuild Transfer Act but 
was added to the regulations. An applicant's ability to enter into 
partnerships with education and training providers, employers, the 
workforce investment system, the juvenile justice system and faith-
based and community organizations will be a criteria in selecting 
grantees.
    Registered Apprenticeship Program: The term ``registered 
apprenticeship program'' is defined in the YouthBuild Transfer Act and 
means a plan containing all terms and conditions for the qualification, 
recruitment, selection, employment and training of apprentices, as 
required under 29 CFR parts 29 and 30, including such matters as the 
requirement for a written apprenticeship agreement. To the extent that 
29 CFR part 30 is amended, such amendments shall apply to the

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determination of what is a ``registered apprenticeship program''.
    Sequential Service Strategy: The term ``sequential service 
strategy'' defines the educational and occupational skills training 
plan developed for individuals who have dropped out of high school and 
want to enroll in a YouthBuild program. The plan is designed so that 
the individual first enrolls in an alternative school, and, after 
receiving a year or more of educational services, enrolls in a 
YouthBuild program. A youth will only be eligible for the YouthBuild 
program under the sequential service strategy if the alternative school 
is affiliated with a YouthBuild program.
    The Office of Inspector General suggested that a definition be 
provided for ``sequential service strategy'' either through guidance or 
in the regulations after its Audit of the YouthBuild Recovery grants. 
The reason for their suggestion was that grantees should be provided 
guidance on the meaning of provisions in both the American Recovery and 
Reinvestment Act, Public Law 111-5 (2009) and the 2009 Omnibus 
Appropriations Act, Public Law 111-8 (2009) that broaden the WIA 
YouthBuild school dropout provision for Program Years 2008 and 2009. We 
agree and, therefore, have added definitions to clarify the terms 
``alternative school'' and ``sequential service strategy'' as used in 
those statutory provisions.
    Transitional Housing: The term ``transitional housing'' is defined 
in the YouthBuild Transfer Act.
    Youth in Foster Care: The term ``youth in foster care'' means youth 
currently in foster care or youth who have ever been in foster care. 
The YouthBuild Transfer Act uses the term ``youth in foster care 
(including youth aging out of foster care).'' The U.S. Department of 
Health and Human Services (HHS) has recommended that the term be 
changed to youth who have ever been in foster care. We accept this new 
definition as we believe it is consistent with the statutory definition 
and is clearer and explains how the program uses the term.
    Youth Who is an Individual with a Disability: The term Youth who is 
an Individual with a Disability means an individual between the ages 
16-24 who is an individual with a disability as defined by Section 101 
of the Workforce Investment Act or a student receiving special 
education and related services under the Individuals with Disabilities 
Education Act (IDEA).

Subpart B--Funding and Grant Applications

How are YouthBuild grants funded and administered? (Sec.  672.200)
    This section describes how YouthBuild grants are funded and 
administered. The YouthBuild program is funded through appropriations 
authorized under 29 U.S.C. 2918a(h). YouthBuild will be administered as 
a national program with grants awarded through a competitive selection 
process, similar to the YouthBuild ``implementation grants'' formerly 
administered by HUD. It is noteworthy that the authority to issue 
``planning grants,'' which was formerly authorized under the Cranston-
Gonzalez Act, was not retained in the Transfer Act as Congress 
considered planning grants no longer necessary to administer the 
current program.
How does an eligible entity apply for grant funds to operate a 
YouthBuild program? (Sec.  672.205)
    This section describes in general terms the process the Department 
will use to select grantees. We propose to select grantees through a 
competitive process. The directions for applying for grants will be 
issued in a Solicitation for Grant Applications (SGA) which will 
describe the eligibility requirements and rating criteria for the 
competition.
    Essentially, all of the grant application requirements to operate a 
YouthBuild program have been retained, but several new requirements are 
now added by the Transfer Act and these regulations. Among the new 
requirements, an applicant is required to provide labor market 
information for the local market area where the grant will be used and 
to provide projections on career opportunities in local industries, 
such as the construction industry. In addition, an applicant's 
statement of qualifications must describe its relationships with the 
workforce investment system and with employers. HUD required a 
description of the manner in which eligible youth will be recruited and 
selected as YouthBuild participants, including arrangements with 
required partners. Newly added to the list as a requirement, is a 
description of the arrangements that will be made with the local 
workforce board, One-Stop operators, and faith-based organizations to 
recruit YouthBuild participants. HUD only required such a description 
for community-based organizations. Other new requirements are that 
applicants describe how they will meet common performance measures for 
youth programs, identify the role of employers in the program, and 
describe their ability to grant industry-recognized skills-based 
certifications. All of these requirements will be described in the SGA 
through which grantees are selected.
How are eligible entities selected to receive grant funds? (Sec.  
672.210)
    This section describes the selection criteria for selecting 
grantees. The selection criteria that the Secretary may use to make 
grant determinations have been expanded from HUD's selection criteria. 
The new factors, which are specified in the Transfer Act and are in 
addition to existing criteria, include the applicant's focus on 
preparing youth for postsecondary education or careers in demand 
occupations; the extent to which the applicant will coordinate with the 
workforce investment system, employers, and educational institutions in 
conducting their YouthBuild activities; the applicant's ability to 
serve different regions, including rural areas and States without prior 
YouthBuild programs. The weights given to these criteria will be 
specified in the SGA. Additionally, in the event additional funds 
become available, ETA reserves the right to use such funds to select 
additional grantees from applications submitted in response to a SGA.
    The Department has added to the selection criteria one factor not 
listed in the Transfer Act. Applicants will be evaluated on their 
ability to attract partners. Examples of partners are educational and 
training providers, employers, the workforce investment system, the 
juvenile justice system, disability service providers, and faith-based 
organizations as partners. While the selection criteria already 
emphasize the applicants' ability to coordinate with these groups, a 
partnership is a more formal commitment in which the applicant and its 
partner agree to work together, signified by a memorandum of 
understanding or letter of commitment indicating the partnering 
organization's unique contribution and commitment to the YouthBuild 
Program. The complexity of the YouthBuild program requires that 
entities engage in meaningful partnerships throughout their community 
to ensure the success of the participants as they transition from the 
program into post-secondary employment or education as well as ensure 
the successful construction or rehabilitation of affordable housing.
How are eligible entities notified of approval for grant funds? (Sec.  
672.215)
    The Secretary, to the extent practicable, must notify each 
applicant of the approval or disapproval of its

[[Page 52675]]

grant application not later than 5 months after the date of the receipt 
of the application. This is a change from the 4-month notification 
timeframe under the HUD program and reflects differences in the grant 
award process at the Department.
    Grants will be awarded for a 3-year period of performance. This 
includes 2 years of core program operations (education, workforce 
investment skills training, and other activities such as youth 
leadership development) plus at least 9 months of follow-up support 
services and tracking of participant outcomes. In the event additional 
funds become available, ETA reserves the right to use such funds to 
select additional grantees from applications submitted in response to 
the SGA.

Subpart C--Program Requirements

Who is an eligible participant? (Sec.  672.300)
    This section sets out the participant eligibility requirements. The 
requirements that at least 75 percent of participants must be between 
the ages of 16 and 24 years on the date of enrollment and must be 
school dropouts are continued under the YouthBuild Transfer Act. Later 
statutes provided that a YouthBuild program may serve an individual who 
has dropped out of school and reenrolled in an alternative school, if 
that reenrollment is part of a sequential service strategy.
    Previously, under the HUD regulations, an eligible participant was 
also required to be a very low-income individual or a member of a very 
low-income family using the definition of income, adjusted for certain 
exclusions as determined by the United States Housing Act of 1937. The 
Department proposes to revise the previous requirement by now requiring 
that a participant be a member of a low-income family using the 
definition of income, adjusted for certain exclusions as determined by 
the United States Housing Act of 1937. As specified in the Transfer 
Act, an eligible participant may also be a youth in foster care, a 
youth offender (including any youth between the ages of 16 and 24 who 
has been convicted through either a juvenile or adult criminal justice 
system), a youth who is an individual with a disability, a child of an 
incarcerated parent, or a migrant youth.
    Also continuing under the YouthBuild Transfer Act is the exception 
provision that no more than 25 percent of the participants may be 
individuals who do not meet the general income or educational needs 
requirement, providing that they are academically deficient in one of 
two areas. The first area is that high school graduates or those who 
already have a GED but who are ``basic skills deficient'' may 
participate in the program under this exception. The term basic skills 
deficient has the same definition as it does in section 101 of WIA. It 
is ``an individual that has English reading, writing, or computing 
skills at or below the 8th grade level on a generally accepted 
standardized test or a comparable score on a criterion-referenced 
test.'' The second area of the exception refers to youth who are still 
enrolled in a secondary school and are referred by that school to 
participate in a YouthBuild program that leads to the attainment of a 
secondary school diploma.
Are there special rules that apply to veterans? (Sec.  672.305)
    The priority of service provisions for qualified persons under 
Department of Labor regulations at 20 CFR part 1010 apply to the 
YouthBuild program as a Department of Labor job training program. 
Accordingly, youth who are eligible participants for the YouthBuild 
programs, and are also covered persons under 20 CFR part 1010, must 
receive priority of service. The special rule for determining low-
income status for veterans which is found at 20 CFR 667.225 also 
applies.
What eligible activities may be funded under the YouthBuild program? 
(Sec.  672.310)
    The HUD regulations included provisions for education and job 
training activities, including work experience and skills training, as 
eligible activities under YouthBuild grants. The Transfer Act outlines 
new education and workforce investment activities permitted under the 
YouthBuild program such as postsecondary education services and 
activities, including tutoring, study skills training and dropout 
prevention activities; other paid and unpaid work experiences, 
including internships and job shadowing; and alternative secondary 
school services, occupational skills training, and counseling services 
and related activities, such as comprehensive guidance and counseling 
on drug and alcohol abuse and referral. Grantees have discretion on 
which of these activities to offer and may also offer additional 
activities. However, as explained in Sec.  672.320, the Department 
requires that every grantee offer as part of its program the activities 
listed in Sec.  672.310(b)(1): Work experience and skills training in 
housing rehabilitation and construction.
    With the transfer of the YouthBuild program to the Department, 
there is wider access to workforce-related programs administered by the 
Department. Therefore, the Department proposes to place an emphasis on 
coordinating training with registered apprenticeship programs, which 
will allow participants to enter such programs after exiting 
YouthBuild. YouthBuild programs are permitted to use some funds to pay 
for supervision and training costs to allow participants to develop 
skills and obtain work experience through the rehabilitation or 
construction of community or other public facilities. As a result, by 
expanding the use of funds for participant services related to the 
rehabilitation or construction of community or public facilities, job 
training and career opportunities for YouthBuild participants will be 
enhanced.
What timeframes apply to participation? (Sec.  672.315)
    The participation parameters for individuals participating in a 
YouthBuild program are unchanged under the Transfer Act. Participants 
must be offered full-time participation for a period of at least 6 
months and not more than 24 months.
What timeframes must be devoted to education and workforce investment 
or other activities? (Sec.  672.320)
    The Department proposes to require YouthBuild grantees to structure 
programs so that participants in the program are offered specific 
educational and related services and activities during at least 50 
percent of their participation time and workforce investment activities 
during at least 40 percent of the remaining time. The latter is a new 
requirement under the Transfer Act. Only the requirement that 50 
percent of participant time be for educational activities had existed 
under the HUD program.
    The remaining 10 percent can be used for educational, construction-
related occupational skills training, and/or leadership development as 
well as community service activities. Grantees should establish a 
program structure that is used consistently throughout the program 
cycle.
    Within these timeframes, YouthBuild grantees can generally 
determine which educational, workforce or other activities to offer 
participants. However, the Department has determined that the work 
experience and skills training in rehabilitation and construction set 
out in Sec.  672.310(b)(1) are an essential part of the YouthBuild 
program and that every

[[Page 52676]]

YouthBuild grantee must include such activities as part of its 
workforce activities. YouthBuild was designed as a program that 
provides disadvantaged youth with both education and skills in 
occupations in demand while fostering a commitment to community 
development and expanding the supply of affordable housing to homeless 
individuals or families or low-income families. The White House Task 
Force for Disadvantaged Youth Final Report emphasized that, at its 
core, YouthBuild is an employment and training program and, as the 
Report recommended, the Transfer Act transferred authority for 
YouthBuild to the Department of Labor to provide greater coordination 
with existing workforce programs.
    To fully achieve the intent of the Transfer Act, the Department has 
interpreted the Act to require that work experience and skills training 
in housing construction and rehabilitation be part of every YouthBuild 
program. However, this may present a challenge for YouthBuild programs 
in placing participants in the construction industry when demand for 
construction workers in a local area is low, as it is in the current 
economic landscape. In addition, many youth can benefit from the 
YouthBuild program, but are not interested ultimately in entering 
construction careers. Many current grantees have expressed an interest 
in expanding their program training beyond construction for these 
reasons. Therefore, we are seeking comments on whether YouthBuild 
should continue to focus on construction skills training or if the 
skills training should be expanded to other industry areas.
What timeframes apply for follow-up services? (Sec.  672.325)
    The Department proposes to require YouthBuild grantees to provide 
follow-up services for a period of not less than 3 quarters after exit 
(nine months) and not to exceed 12 months after exit. Follow-up 
services are services that help YouthBuild participants transition 
successfully from the program into education and/or employment. This 
specificity is added to the regulations because of the recognition that 
youth exiting the program may require additional services in order to 
maintain the positive gains they achieved while enrolled. Follow-up 
services include supportive services and may also include, but are not 
limited, activities such as counseling services, job search assistance, 
and checking-in on participants after they have left the program. 
Additionally, programs are required to report on participants who have 
exited the program for 3 quarters after exit to ensure their successful 
transition into employment or education and to collect data on the 
performance indicators required by the Department. In accordance with 
the Department's instructions, individual YouthBuild programs determine 
participant exit dates based on participant completion of the program 
requirements for educational and workforce investment activities or 
other activities.

Subpart D--Performance Indicators

What are the performance indicators for YouthBuild grants? (Sec.  
672.400)
    All YouthBuild grantees must report on the three youth common 
performance indicators currently used to assess performance in the WIA 
Formula Youth Program. These indicators as described in Departmental 
guidance (TEGL No. 17-05) are placement in employment or education, 
attainment of a degree or certificate, and literacy and numeracy gains. 
These performance indicators will help the Department to identify early 
potential for successful outcomes from grantees and sets forth one set 
of indicators to be used for both reporting purposes and WIA section 
136 performance accountability purposes. They will also allow grantees 
to better serve the eligible populations under this program.
    The Secretary may require grantees to track other performance 
indicators, including short-term performance indicators such as 
enrollment rate, number of initial job placements, number obtained 
High-School Diploma or GED, and provide this data to the Department in 
quarterly performance reports required under Sec.  672.410. The 
Department will provide the details of the performance indicators in 
administrative guidance.
What are the required levels of performance for the performance 
indicators? (Sec.  672.405)
    Each YouthBuild grantee must meet certain levels of performance 
established by the Department for each of the common performance 
measures described in Sec.  672.400. In determining annual performance 
levels for the YouthBuild program, the Department reviews previous 
year's performance and also compares performance levels with similar 
WIA youth workforce development programs.
    The levels of performance established must, at a minimum:
    (a) Be expressed in an objective, quantifiable, and measurable 
form; and
    (b) Lead to continuous improvement in performance.
    Expected national levels of performance for each of the common 
performance indicators, and any other performance indicators, will be 
established at a later date and provided in separately issued guidance. 
Generally, these other performance indicators are established, short-
term indicators specified in the SGA or individual grant agreement and 
comprised of individual YouthBuild program data used by the Department 
to gauge individual program progress toward performance outcomes. 
Performance level expectations are based on available YouthBuild data 
and data from similar WIA Youth programs. The expected national levels 
of performance will take into account the extent to which the levels 
promote continuous improvement in performance.
What are the reporting requirements for YouthBuild grantees? (Sec.  
672.410)
    The Department proposes to require that each grantee receiving 
funds under this program must provide three quarterly reports to the 
Department:
    (a) The Quarterly Performance Report (QPR);
    (b) The quarterly narrative progress report; and
    (c) The financial report.
    Also, the Department may require a grantee to provide additional 
reports, as part of a grant agreement. These additional reports will 
assist the Department in the effective administration of YouthBuild.
    The QPR will be generated by a Web-based system programmed 
exclusively for YouthBuild grantees to use. This Web-based system is a 
tool used to capture agency-specific processes and data that occur 
throughout the grant's lifecycle and helps the Department and the 
grantee with the various reporting requirements specified in Sec.  
672.410. This system will be the main system of data entry for all 
grantees, including all case management information, which the grantee 
will use to produce the QPR for submission to the Department. The QPR 
and narrative reports must be submitted electronically each quarter via 
this Web-based system. The financial report also will be submitted 
electronically via the Web-based system in accordance with reporting 
instructions issued by ETA. Grantees will be trained in all necessary 
reporting systems during the initial award phase.
What are the due dates for quarterly reporting? (Sec.  672.415)
    The QPR and narrative reports are due no later than 45 days after 
the end of each quarter unless otherwise specified in reporting 
instructions. A final financial report is required 90 days after

[[Page 52677]]

the expiration of a funding period or the termination of grant support.

Subpart E--Administrative Rules, Costs and Limitations

What administrative regulations apply to the YouthBuild program? (Sec.  
672.500)
    This proposed section incorporates the administrative requirements 
of WIA that are applicable to YouthBuild grants, which include 
requirements relating to fiscal and administrative rules, audit, 
allowable costs/cost principles, debarment and suspension, a drug-free 
workplace, restrictions on lobbying, treatment of individuals with 
disabilities, and nondiscrimination.
    The nondiscrimination regulations incorporated by this section, 29 
CFR part 37, broadly prohibit all forms of discrimination for WIA Title 
I programs, which include YouthBuild. 29 CFR 37.5 states that ``[n]o 
individual in the United States may, on the grounds of race, color, 
religion, sex, national origin, age, disability, political affiliation 
or belief, and for beneficiaries only, citizenship or participation in 
any WIA Title I-financially assisted program or activity, be excluded 
from participation in, denied the benefits of, subjected to 
discrimination under, or denied employment in the administration of or 
in connection with any WIA Title I-funded program or activity.'' The 
regulations also require that grantees provide reasonable 
accommodations to youth who are individuals with disabilities. 29 CFR 
37.8. For grantees unsure of how to best accommodate youth who are 
individuals with disabilities in their program, the Department 
recommends that the grantees consult with the Job Accommodation 
Network, a free service of the Department's Office of Disability 
Employment Policy that provides employers with technical assistance on 
accommodating different disabilities.
    In addition to prohibiting discrimination, YouthBuild grantees have 
positive requirements to ensure equal opportunity and prevent 
discrimination in their programs. YouthBuild grantees are required by 
29 CFR 37.29 through 37.32 to disseminate an equal opportunity policy. 
YouthBuild grantees must also ensure that they provide universal access 
to their programs, including advertising the program in a manner that 
targets various populations, sending notices about openings in programs 
to community service groups that serve various populations, and 
consulting with community service groups on ways to improve outreach 
and service to various populations. 29 CFR 39.42.
    YouthBuild grantees are also required to comply with all generally 
applicable laws and implementing regulations that apply to the grantees 
or their participants, including, for example, for participants who are 
Youth Who are Individuals with Disabilities and participate in 
secondary education programs, the administrative provisions of the 
Individuals with Disabilities Improvement Act, 34 CFR 300.320 through 
34 CFR 300.324, which require that grantees provide Youth Who are 
Individuals with Disabilities who enter the program with an appropriate 
transition plan corresponding to their individual needs.
How may grantees provide services under the YouthBuild program? (Sec.  
672.505)
    This proposed section restates the provisions of the Transfer Act 
which authorize grantees to provide services directly or to enter into 
sub-grants, contracts, or other arrangements with various public and 
private entities to provide services under the YouthBuild program.
What cost limits apply to the use of YouthBuild program funds? (Sec.  
672.510)
    This proposed section restates the provisions of the YouthBuild 
Transfer Act which set the administrative cost limit at 15 percent of 
the grant award and the cost of supervision and training for 
participants in the rehabilitation or construction of community and 
other public facilities to no more than 10 percent of the grant award. 
29 U.S.C. 2918a(c)(2)(C) and (D).
What are the cost-sharing or matching requirements of the YouthBuild 
program? (Sec.  672.515)
    The YouthBuild Transfer Act authorizes the Department to require 
the grantee to make available to the program additional resources from 
its own resources or from other sources such as businesses, non-profit 
organizations, or non-Federal public entities that can provide funds or 
in-kind services. Cost-sharing or match requirements will be addressed 
in the grant agreement, and described in the SGA. However, a few match 
requirements are addressed in particular in this section.
    Construction materials may be counted toward meeting the required 
non-Federal match share under the YouthBuild program. The value of 
buildings acquired for the YouthBuild is an allowable cost-share or 
match cost to the extent that the building is used for training. The 
value of land acquired for the YouthBuild program is not an allowable 
cost-sharing or match cost.
    This proposed section also incorporates the cost-sharing and 
matching provisions set forth in the Uniform Administrative 
Requirements, which define composition, use, and valuation of required 
match contributions. Although it is addressed in the Uniform 
Administrative requirements, because it is such a common question, the 
regulations restate the prohibition at 29 CFR 95.23(a)(5) and 97.24(b), 
against Federal funds being used as part of the cost-sharing or match 
amount proposed by a prospective applicant.
What are considered to be leveraged funds? (Sec.  672.520)
    This proposed section addresses the use of additional monies, known 
as leveraged funds, to support grant activities. Leveraged funds 
include costs that could be an allowable match but are in excess of the 
match requirement or costs that do not meet the cost-sharing and match 
requirements set forth in the Uniform Administrative Requirements. To 
be considered leveraged funds, they must be otherwise allowable costs 
under the cost principles which have been used by the grantee to 
support grant activity. For example, another Federal grant used by the 
grantee or sub-grantee to support otherwise allowable activities under 
the YouthBuild program could not be counted toward the match 
requirement but would be considered a leveraged fund.
    The amount, commitment, nature and quality of the leveraged funds 
described in the grant application will be a factor in evaluating 
grants in the SGA. Grantees will also be required to report the use of 
such funds through their financial report and quarterly narrative 
report.
How are the costs associated with real property treated in the 
YouthBuild program? (Sec.  672.525)
    This proposed section specifies which costs associated with real 
property are allowable and unallowable under the YouthBuild program. 
The costs associated with the acquisition of buildings to be 
rehabilitated for training purposes are allowable under the same 
proportionate share conditions that apply under the match provision at 
Sec.  672.515, but only with prior grant officer approval. The costs 
related to construction and/or rehabilitation associated with the 
training of participants are allowable. The costs associated with the 
acquisition of land are not allowable.

[[Page 52678]]

What participant costs are allowable under the YouthBuild program? 
(Sec.  672.530)
    Payments to participants for work-related and non-work-related 
YouthBuild Activities, supportive services, needs-based stipends, and 
additional benefits are allowable participant costs. A needs-based 
stipend is not a regular stipend, which is paid to participants in lieu 
of wages while they are in training. Needs-based stipends are 
additional payments (beyond regular stipends for program participation) 
that are based on defined needs to enable youth to participate in the 
YouthBuild program. To provide ``needs-based stipends'', the grantee 
must have a written policy in place, which defines: (a) Eligibility; 
(b) the amounts; and (c) the required documentation and criteria for 
payments. This policy must be applied consistently to all program 
participants.
What effect do payments to YouthBuild participants have on eligibility 
for other Federal needs-based benefits? (Sec.  672.535)
    Under WIA regulations at 20 CFR 667.272(c), allowances, earnings, 
and payments to individuals participating in programs under Title I of 
WIA are not considered as income for purposes of determining 
eligibility for and the amount of income transfer and in-kind aid 
furnished under any Federal or Federally-assisted program based on need 
other than as provided under the Social Security Act (42 U.S.C. 301). 
The Department wants to assure grantees and participants that their 
participation in the YouthBuild program should not disqualify them from 
participating in other Federally-sponsored needs-based programs that 
are available to them.
What program income requirements apply to the YouthBuild program? 
(Sec.  672.540)
    This proposed section provides that the program income provisions 
of the Uniform Administrative Requirements apply to the YouthBuild 
program. In addition, this proposed section specifies that the revenue 
from the sale or rental of buildings rehabilitated or constructed under 
the YouthBuild program to homeless individuals and families or low-
income families, as specified in section 672.615, is not considered 
program income. Grantees are encouraged to use such revenue for the 
long-term sustainability of the YouthBuild effort.
Are YouthBuild programs subject to the Davis-Bacon Act labor standards? 
(Sec.  672.545)
    Davis-Bacon labor standards apply to Federal construction contracts 
and many Federally-assisted construction projects under the provisions 
of the Davis-Bacon Act and numerous related Acts that authorize Federal 
assistance for construction. YouthBuild programs and grantees are 
subject to Davis-Bacon labor standards in certain circumstances. The 
Department has determined that YouthBuild participants are subject to 
Davis-Bacon labor standards when they perform Davis-Bacon-covered 
laborer or mechanic work on Federal or Federally-assisted projects that 
are subject to Davis-Bacon labor standards. When a YouthBuild 
participant works on a project subject to Davis-Bacon labor standards, 
the Davis-Bacon labor standards, including prevailing wage 
requirements, apply to the hours worked on the site of the work.
    This may present a challenge to YouthBuild programs that view these 
types of construction projects as valuable training sites for their 
youth since many contractors may be reluctant to pay prevailing wage 
rates for youth trainees who are in the process of learning and 
developing their skill set. The regulations implementing the Davis-
Bacon Act contain a provision that allows for Department-certified 
training programs to pay less than the applicable prevailing wage rate 
to trainees. As stipulated by 29 CFR 5.5(a)(4)(ii), ``trainees'' are 
not permitted to be paid less than the predetermined rate for the work 
performed unless they are employed under and individually registered in 
a program which has received prior approval, evidenced by a formal 
certification by the U.S. Department of Labor, Employment and Training 
Administration.
What are the recordkeeping requirements for YouthBuild programs? (Sec.  
672.550)
    This proposed section sets forth the requirements for maintaining 
records under the YouthBuild program, including requirements for 
records related to the use of buildings constructed or rehabilitated 
with YouthBuild funds which will be specified in the grant agreement. 
Grantees must follow the recordkeeping requirements in the Uniform 
Administrative Regulations, codified at 29 CFR 95.53 and 29 CFR 97.42, 
as appropriate.
    Grantees must maintain such additional records as specified in the 
grant agreement related to the use of buildings constructed or 
rehabilitated with YouthBuild funds. Recordkeeping requirements vary 
for different classes of records.

Subpart F--Additional Agency Requirements

What are the safety requirements for the YouthBuild program? (Sec.  
672.600)
    On November 14, 2006, the Department published, at 71 FR 66349, a 
Federal Register notice requesting public comments and announcing 
public meetings on the design of YouthBuild grants. The notice sought 
public input and observations on the optimum number of years and amount 
of grant awards, ways to ensure grantees meet educational and 
employment outcomes, how capacity building grants can be strengthened, 
and ways to improve any other aspect of the program. The Department 
received four comments relating to safety issues in response to the 
Federal Register notice, including comments from the National Institute 
for Occupational Safety and Health (NIOSH), the Department's 
Occupational Safety and Health Administration (OSHA), the University of 
California at Berkeley Labor Occupational Health Program, and the 
University of North Carolina Injury Prevention Research Center. The 
NIOSH comments emphasized the dangers of youth working in construction 
and noted that youth fatalities in construction are related to 
noncompliance with child labor laws and occupational safety and health 
regulations. The NIOSH comments referenced a review of OSHA 
investigations of fatally injured teenage construction workers between 
1984 and 1998 which found that approximately half of the 76 
investigations of deaths to youth under 18 involved apparent violations 
of child labor laws.\1\ The NIOSH comments also referenced a survey in 
North Carolina of youth ages 16 and 17 working in construction that 
found that 84 percent of the youth had performed at least one task 
clearly prohibited by child labor laws, while 47 percent had performed 
three or more tasks prohibited by child labor laws.\2\
---------------------------------------------------------------------------

    \1\ Sarua A, Philips P, Lillquist D, Sesek R, ``Fatal Injuries 
to Construction Workers in the U.S.,'' American Journal of 
Industrial Medicine, 2003.
    \2\ Runyon CW, Dal Santo J, Schulman M, Lipscomb HJ, Harris TA, 
``Work Hazards and Workplace Safety Violations Experienced by 
Adolescent Construction Workers,'' Archives of Pediatric and 
Adolescent Medicine, 2006.
---------------------------------------------------------------------------

    NIOSH recommended that the Department comprehensively integrate 
worker safety and associated training into the YouthBuild program by

[[Page 52679]]

incorporating the following requirements in the program:
    (a) Comprehensive, documented training on construction safety for 
youth working on YouthBuild projects, including requirements for youth 
to demonstrate knowledge and proficiency in hazard identification, 
abatement, and safe work practices;
    (b) Compliance with Federal and State child labor laws and 
occupational safety and health regulations;
    (c) Written, jobsite specific, safety plans overseen by an on-site 
supervisor with the knowledge, skills, and authority to correct safety 
and health hazards and enforce the site-specific safety plan;
    (d) Provision of necessary personal protective equipment to youth 
working on YouthBuild projects; and
    (e) Reporting of all injuries and illnesses to youth working on 
YouthBuild projects, along with documentation on remedial measures to 
prevent future similar injuries and help ensure that YouthBuild is a 
model program that takes active steps for participant safety and 
health.
    The comments from OSHA similarly stressed the importance of safety 
training and identification of worksite hazards. OSHA's comments 
recommended that YouthBuild grantees should demonstrate an effective, 
comprehensive occupational safety and health management system that 
includes four basic elements:
    (a) Management leads the way in emphasizing safety;
    (b) The worksite is continuously analyzed to identify existing and 
potential hazards;
    (c) Methods to prevent or control existing hazards are put in 
place; and
    (d) Managers, supervisors, and participants are trained in safety 
practices, including new-hire training and ongoing weekly or daily 
safety training.
    The comments from the University of California and the University 
of North Carolina both strongly recommended that YouthBuild grantees be 
subject to the hazardous orders in the child labor regulations.
    Based upon the concerns raised by these commenters, the Department 
is proposing to require that YouthBuild grantees not only comply with 
Federal and State health and safety standards, including the hazardous 
orders in the child labor regulations, but also provide: comprehensive 
safety training for youth working on YouthBuild construction projects; 
have written, jobsite specific, safety plans overseen by an on-site 
supervisor with authority to enforce safety procedure; provide 
necessary personal protective equipment to youth working on YouthBuild 
projects; and submit injury incident reports to the Department. The 
intent of these proposed regulations is to protect the health and 
safety of YouthBuild participants on YouthBuild work sites, and to 
ensure that YouthBuild grantees comply with child labor laws.
    YouthBuild grantees must adhere to all safety guidelines, laws and 
regulations required by all Federal, State and local laws which include 
the Department's OSHA regulations, as well as the Department's Wage and 
Hour Division's (WHD) child labor regulations. Among other things, 
these provisions prohibit youth ages 16 and 17 from working in 
identified hazardous occupations. Occupations prohibited for 16 and 17 
year-olds under these ``hazardous orders'' relating to construction 
include, but are not limited to, operating circular saws, working on or 
about roofs, performing demolition work, excavating and trenching, 
operating a fork lift or a hoist, and driving a motor vehicle on the 
job.
What are the reporting requirements for youth safety? (Sec.  672.605)
    The Department places high priority on the safety of YouthBuild 
participants. The comments by NIOSH about the design of the YouthBuild 
program specifically recommend that the Department require the 
``reporting of all injuries and illnesses to youth working on 
YouthBuild projects, along with documentation on remedial measures to 
prevent future similar injuries and help ensure that YouthBuild is a 
model program that takes active steps for participant safety and 
health.''
    By requiring grantees to complete and file injury incident reports 
for accidents incurred by youth while working on YouthBuild projects, 
the Department will be able to determine whether youth are being 
properly trained under safe conditions while participating in the 
YouthBuild program.
    The working conditions of YouthBuild participants are subject to 
Federal and State health and safety standards under 20 CFR 667.274. 
Such standards include requirements under 29 CFR part 1904 that 
employers in the construction industry and other non-exempt industries 
record occupational injuries and illnesses and keep these reports on 
file for 5 years. These reports include individual incident reports, a 
log of injuries, and an annual summary of incidents. In addition, 
YouthBuild grantees must send a copy of the incident reports to the 
Department within 7 days of the incident. Requiring YouthBuild grantees 
to submit incident reports of occupational injuries and illnesses to 
the Department will serve to emphasize to grantees and their staff the 
importance of safety. The Department will be able to use the incident 
reports to respond in a timely manner to require corrective actions at 
particular sites. Corrective actions may include any of the following: 
requiring grantees to modify or improve safety training; alert all 
YouthBuild sites of hazards identified in incident reports; and, in 
some cases, to sanction or close sites in which a flagrant safety 
violation or pattern of violations has resulted in a serious accident.
What environmental protection laws apply to the YouthBuild program? 
(Sec.  672.610)
    All YouthBuild worksites are expected to be in compliance with all 
applicable Federal, State, and local environmental protection laws, as 
YouthBuild participants spend a large portion of their training time on 
YouthBuild worksites.
    It should be noted that the regulations implementing HUD's 
YouthBuild program contained environmental procedures which governed 
HUD's determination of whether any environmental thresholds in the 
agency's National Environmental Policy Act (NEPA) regulations would be 
exceeded as a result of funding the ``lease, acquisition, 
rehabilitation, or new construction of real property that is proposed 
for housing project development.'' 24 CFR 585.307(a). However, HUD's 
environmental procedures expressly did not apply to ``HUD's approval of 
grants where the applicant proposes to use YouthBuild funds solely to 
cover any costs for classroom and/or on-the-job construction training 
and supportive services.'' Id.
    The Department considers the construction and rehabilitation-
related activities authorized under the Transfer Act to be on-the-job 
training, rather than construction or rehabilitation, which is 
consistent with HUD's previous administration of the program. As a 
result, the Department has chosen not to include specific environmental 
procedures for the YouthBuild program in this proposed regulation. 
However, the absence of environmental procedures does not affect the 
Department's on-going obligation to comply with NEPA and the 
Department's NEPA regulations at 29 CFR part 11. Therefore, grantees 
are expected to be familiar and comply with NEPA, State, and local 
environmental regulations.

[[Page 52680]]

What requirements apply to YouthBuild housing? (Sec.  672.615)
    One of the priorities of the YouthBuild program is to provide 
transitional and affordable housing to homeless individuals and 
families. The Transfer Act made the changes to the housing requirements 
that would allow the Department to focus on the workforce aspect of the 
YouthBuild program and at the same time maintain the integrity of the 
housing initiative. The Transfer Act maintains some basic rental and 
homeownership restrictions, which are similar to the major restrictions 
specified in the Cranston-Gonzalez Act (42 U.S.C. 12899d); however, 
many of the more extensive restrictions were eliminated. The Transfer 
Act does stipulate that YouthBuild residential properties must be 
available solely for rental by, or sale to, homeless individuals and 
families or low-income families, and/or for use as transitional or 
permanent housing for homeless individuals and families transitioning 
to independent living. The Department has interpreted this stipulation 
to require that YouthBuild residential properties be inhabited by 
homeless individuals and families or low-income families. Therefore, in 
addition to constructing or rehabilitating housing to sell or rent to 
new low-income family tenants, YouthBuild grantees may rehabilitate 
residences already occupied by low-income families.
    As administrator of the YouthBuild program, it is the Department's 
responsibility to ensure that YouthBuild funds are only used for the 
housing purposes stipulated in the Transfer Act. Additionally, we are 
concerned with minimizing the enforcement burden on grantees in order 
to emphasize the training and employment purposes of the programs. In 
order to accomplish these goals, a new requirement is being proposed in 
order to create a self-enforcing mechanism to ensure compliance with 
the YouthBuild housing limitations. The HUD regulations required the 
restrictions be in place for 10 years and that if the property was sold 
before the termination of the time period, any conveyance document 
require that the new owner abide by the restrictions. The Department's 
new requirement is that grantees ensure that a restrictive covenant be 
recorded with the appropriate local office or agency against the 
property limiting the use of residential units constructed or 
rehabilitated using YouthBuild funds to housing for homeless 
individuals and families and low-income families.
    The restrictive covenant must also include the additional 
conditions that apply to housing in Sec.  672.615(b)-(c). It should be 
noted that a grantee and/or property owner may choose to include 
additional stipulations to the restrictive covenant, depending on their 
standard business practices.
    This restrictive covenant must be recorded at the time of the 
issuance of the occupancy permit. The duration of the covenant is a 
minimum of 10 years from the issuance of the occupancy permit, unless a 
longer time period has been established by the grantee. In the event 
that the covenant has not expired before any later sale of the 
property, any conveyance document must contain the covenant for the 
time remaining. Grantees will be required to provide verification to 
the Department that a restrictive covenant has been recorded, through 
the submission of a copy of the deed with the restrictive covenant 
before the end of the grant period.
    The covenant requirement applies to all newly constructed or 
rehabilitated residential units funded with YouthBuild funds when they 
are for sale or rent. When a grantee rehabilitates the home of a low-
income homeowner, there is no sale or rental and therefore the 
homeowner is not required to record a restrictive covenant.
    All grantees or property owner must make a good faith effort to 
rent the property to homeless individuals and families or low-income 
families. Grantees or property owners must not terminate the tenancy or 
refuse to renew the lease of a tenant occupying a residential rental 
housing unit constructed or rehabilitated using YouthBuild funds except 
for serious or repeated violations of the terms and conditions of the 
lease, for violation of applicable Federal, State or local laws, or for 
good cause. Except for dangerous or egregious situations involving the 
tenant, any termination or refusal to renew the lease must be preceded 
by not less than a 30-day written notice to the tenant specifying the 
grounds for the action.
    Grantees and/or property owners who are rehabilitating or 
constructing houses for the purposes of transitional or permanent 
housing for homeless individuals and families and low-income families 
under the YouthBuild program will be required to ensure that the 
housing is safe and sanitary. The housing must also meet any applicable 
State and local housing codes and licensing requirements in the 
jurisdiction in which the housing is located. Transitional housing is a 
necessary factor in community improvement and development. The 
Department believes that this provision of transitional housing will 
not only help individuals establish ties to the community but also 
encourage their participation in the local labor market.
    The YouthBuild program is designed to provide workforce training 
and education through the rehabilitation and construction of low-income 
housing for the community. This section balances the Department's duty 
to focus on training and education in order to prepare a skilled 
workforce with its duty to ensure that the housing provided by each 
grantee will remain available for the purposes of low-income occupancy 
for a specified length of time.

III. Administrative Information

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

    The Regulatory Flexibility Act (RFA) at 5 U.S.C. 603(a) requires 
agencies to prepare and make available for public comment an initial 
regulatory flexibility analysis which will describe the impact of the 
proposed rule on small entities. Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities. Furthermore, under 
the Small Business Regulatory Enforcement Fairness Act of 1996, 5 
U.S.C. 801 (SBREFA), an agency is required to produce compliance 
guidance for small entities if the rule has a significant economic 
impact on a substantial number of small entities. The RFA defines small 
entities as small business concerns, small not-for-profit enterprises, 
or small governmental jurisdictions. The proposed rule directly affects 
all YouthBuild grantees, of which there are currently 226. About half 
of these are small entities (generally non-profit, community-based 
organizations). The Department does not believe that the proposed rule 
will have a significant economic impact on a substantial number of 
these small entities. The Department has certified this to the Chief 
Counsel for Advocacy, Small Business Administration, pursuant to the 
Regulatory Flexibility Act. Primary issues affected by the proposed 
rule are discussed below.
    The YouthBuild program has existed since 1978. YouthBuild began as 
a Federal grant program in 1994 and was administered by HUD until 2006 
when it was transferred to the Department. YouthBuild operates as a 
voluntary grant program. While there are matching and leverage 
requirements,

[[Page 52681]]

organizations apply for Federal grant funds. The costs that might be 
thought to be increased by the proposed rule are participant safety, 
worksite environmental standards, and a required follow-up time period 
for YouthBuild enrollees, all of which may be paid for with grant 
funds.
    The proposed rule would require that all applicable National 
Institute for Occupational Safety and Health (NIOSH) and Occupational 
Safety and Heath Administration (OSHA) regulations be followed for 
youth who are on YouthBuild participant construction sites. The NIOSH 
safety measures are standard requirements for all Federally-funded 
construction worksites across the United States. The requirements 
should not add demonstrably to the cost of any YouthBuild program 
because safety equipment required by NIOSH standards can be purchased 
using YouthBuild grant funds provided by the Department. Further, the 
cost of the other requirements--supervisor training, development of 
safety plans, safety reporting, etc.--can be paid for with grant funds 
as well.
    In addition, the Department is requiring that all Federal 
environmental standards, including National Environmental Policy Act of 
1969 (NEPA), be followed. This is a standard for all Federally-funded 
construction worksites across the United States and is already 
established procedure at many YouthBuild work sites. YouthBuild grant 
funds may be used to ensure compliance with the required environmental 
standards.
    The proposed rule also requires a minimum 9-month follow-up period 
for enrollees who exit the YouthBuild program. While this is a new 
requirement in the proposed rule, one of the mandatory program 
reporting requirements already in place for YouthBuild requires a 
minimum 9-month follow-up period for participants. As a result, the 9-
month follow-up period requirement should already be followed by all 
YouthBuild programs and will not add to the existing program costs.
    Finally, the YouthBuild program will have a beneficial economic 
impact on small entity program participants. While there are match and 
leverage requirements under YouthBuild, the grantees are applying to 
receive additional resources to carry out their purposes for the 
benefit of participants.
    Accordingly, the Department certifies that this proposed rule will 
not have a significant economic impact on a substantial number of small 
entities. The Department explicitly invites comments from members of 
the public who believe there will be a significant economic impact on 
small entities.

Paperwork Reduction Act

    One of the purposes of the Paperwork Reduction Act of 1995 (PRA), 
44 U.S.C. 3501 et seq., is to minimize the paperwork burden on affected 
entities. The PRA requires certain actions before an agency can adopt 
or revise the collection of information, including publishing a summary 
of the collection of information and a brief description of the need 
for and proposed use of the information.
    The collection of data described in this proposed rule contains 
requirements to implement reporting and recordkeeping requirements for 
the YouthBuild program. This reporting structure features standardized 
data collection for program participants, and quarterly narrative and 
Management Information System (MIS) performance report formats. All 
data collection and reporting will be done by YouthBuild grantees.
    These requirements were previously reviewed and approved for use by 
the Office of Management and Budget (OMB) under 44 U.S.C. 3507 and 5 
CFR part 1320, and assigned OMB control number 1205-0464 under the 
provisions of the PRA. YouthBuild grantees will collect and report 
selected standardized information on customers in YouthBuild programs 
for the purposes of general program oversight, evaluation, and 
performance assessment. ETA will provide all grantees with a YouthBuild 
management information system (MIS) to use for collecting participant 
data and for preparing and submitting the required quarterly reports. 
The Department has determined that this proposed rule contains no new 
information collection requirements.
    The Department estimates that the public reporting burden for this 
collection of information will amount to 16,280 hours. This total 
includes all paperwork in regard to this proposed rule over the course 
of one program year for all grantees nationwide.

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 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 regulatory requirements defined and implemented by this 
proposed rule for this grant program will not have an annual effect on 
the economy of $100 million or more but do raise novel policy issues. 
With the transfer of the program from HUD to the Department, there have 
been changes from what was required under the ``Hope for Youth'', the 
original YouthBuild program located in the Cranston-Gonzalez National 
Affordable Housing Act of 1992. Primarily, the transfer allowed for a 
change of focus from a purely housing initiative to one more focused on 
job and skills training and low-income housing creation. Therefore this 
proposed rule has been submitted to OMB for review.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531) directs agencies to assess the effects of Federal regulatory 
actions on State, local, and tribal governments, and the private 
sector. This NPRM has no ``Federal mandate,'' which is defined in 2 
U.S.C. 658(6) to include either a ``Federal intergovernmental mandate'' 
or a ``Federal private sector mandate.'' A Federal mandate is any 
provision in a regulation that imposes an enforceable duty upon State, 
local, or tribal governments, or imposes a duty upon the private sector 
which is not voluntary. The YouthBuild program is a grant program. 
Grantee participation in YouthBuild is voluntary. Furthermore, this 
proposed rule does not include any Federal mandate that may result in 
increased expenditure by State, local, and tribal governments in the 
aggregate of more than $100 million, or increased expenditures by the 
private sector of more than $100 million.

Executive Order--12630 Government Actions and Interference with 
Constitutionally Protected Property Rights

    The YouthBuild Transfer Act requires that housing rehabilitated or 
constructed with YouthBuild grant funds be for the purposes of housing 
homeless individuals and families or low-income families. In order for 
the Department to ensure that the YouthBuild program is administered in 
compliance with the legislation, each grantee must ensure that the 
owner of the property where YouthBuild funds are spent to construct or 
rehabilitate residential units records a restrictive covenant on the 
property, limiting the use of the units to housing for homeless 
individuals and families and low-

[[Page 52682]]

income families. Such a restrictive covenant will not result in a 
taking without just compensation. This is a contractually-based 
restriction and therefore property owners are compensated for any 
limitations on the use of their land. Property owners enter into these 
contracts creating the restriction voluntarily and they receive 
consideration in the form of services from the YouthBuild program to 
build or rehabilitate their housing for the burden on their property. 
Subsequent purchasers will have notice of the covenant and will be able 
to determine purchase price with knowledge of the limitations on the 
use of the property. Furthermore, the restrictive covenant will expire 
10 years from the date of issuance of occupancy permit, giving 
flexibility to the grantee and/or property owner within a reasonable 
time period. The Department is committed to upholding the integrity of 
the YouthBuild program in all its aspects and believes that a 
restrictive covenant is the best way to meet the purpose of the 
legislation with regard to housing for homeless individuals and 
families and low-income families.

Executive Order 12988--Civil Justice

    This proposed regulation has been drafted and reviewed in 
accordance with Executive Order 12988, Civil Justice Reform, and will 
not unduly burden the Federal court system. The proposed 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 13045

    Executive Order 13045 concerns the protection of children from 
environmental health risks and safety risks. This proposed rule has no 
impact on the environmental health or safety of 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.
    This proposed rule addresses a voluntary grant program, YouthBuild, 
which is administered by the Department. We conclude that this proposed 
rule does not directly affect one or more Indian Tribes, the 
relationship between the Federal Government and Indian Tribes, or the 
distribution of power and responsibilities between the Federal 
Government and Indian Tribes.

Environmental Impact Assessment

    The Department has reviewed this proposed 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 proposed 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 proposed 
rule on family well-being. A rule that is determined to have a negative 
effect on families must be supported with an adequate rationale.
    The Department has assessed this proposed rule and determines that 
it will not have a negative effect on families. Indeed, we maintain 
that this proposed rule will strengthen families by providing low-
income housing and occupational training for low-income families and 
others.

Executive Order 13211

    This proposed 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.

Privacy Act of 1974

    The Privacy Act of 1974 is implicated when a regulation: (1) 
Requires either collection of information that the agency will retrieve 
by an individual's name or other personal identifier or would create a 
program where the agency's program records will be retrieved by an 
individual's name or personal identifier; and (2) involves computerized 
matching of records from a Privacy Act System of Records with any other 
records.
    This regulation is not affected by the Privacy Act of 1974 as it 
does not require the collection of information by the Department of an 
individual's name or other personal identifier or involves computerized 
matching of records from a Privacy Act System of Records with any other 
records.

Plain Language

    The Department drafted this proposed rule in plain language.

List of Subjects in 20 CFR Part 672

    Apprenticeship, Construction, Education, High growth, Homeless, 
Housing, Labor, Low-income, Safety, Training, Transitional housing, and 
Youth.

    For the reasons discussed in the preamble, the Department proposes 
to add 20 CFR part 672 to read as follows:

PART 672--PROVISIONS GOVERNING THE YOUTHBUILD PROGRAM

Subpart A--Purpose and Definitions
Sec.
672.100 What is YouthBuild?
672.105 What are the purposes of the YouthBuild program?
672.110 What definitions apply to this part?
Subpart B--Funding and Grant Applications
672.200 How are YouthBuild grants funded and administered?
672.205 How does an eligible entity apply for grant funds to operate 
a YouthBuild program?
672.210 How are eligible entities selected to receive grant funds?
672.215 How are eligible entities notified of approval for grant 
funds?
Subpart C--Program Requirements
672.300 Who is an eligible participant?
672.305 Are there special rules that apply to veterans?
672.310 What eligible activities may be funded under the YouthBuild 
program?
672.315 What timeframes apply to participation?
672.320 What timeframes must be devoted to education and workforce 
investment or other activities?
672.325 What timeframes apply for follow-up services?
Subpart D--Performance Indicators
672.400 What are the performance indicators for YouthBuild grants?
672.405 What are the required levels of performance for the 
performance indicators?
672.410 What are the reporting requirements for YouthBuild grantees?
672.415 What are the due dates for quarterly reporting?

[[Page 52683]]

Subpart E--Administrative Rules, Costs and Limitations
672.500 What administrative regulations apply to the YouthBuild 
program?
672.505 How may grantees provide services under the YouthBuild 
program?
672.510 What cost limits apply to the use of YouthBuild program 
funds?
672.515 What are the cost-sharing or matching requirements of the 
YouthBuild program?
672.520 What are considered to be leveraged funds?
672.525 How are the costs associated with real property treated in 
the YouthBuild program?
672.530 What participant costs are allowable under the YouthBuild 
program?
672.535 What effect do payments to YouthBuild participants have on 
eligibility for other Federal need-based benefits?
672.540 What program income requirements apply under the YouthBuild 
program?
672.545 Are YouthBuild programs subject to the Davis-Bacon Act labor 
standards?
672.550 What are the recordkeeping requirements for YouthBuild 
programs?
Subpart F--Additional Requirements
672.600 What are the safety requirements for the YouthBuild Program?
672.605 What are the reporting requirements for youth safety?
672.610 What environmental protection laws apply to the YouthBuild 
Program?
672.615 What requirements apply to YouthBuild Housing?

    Authority: 29 U.S.C. 2918a.

Subpart A--Purpose and Definitions


Sec.  672.100  What is YouthBuild?

    YouthBuild is a workforce development program that provides 
employment, education, leadership development, and training 
opportunities to disadvantaged and low-income youth between the ages of 
16 and 24, who are secondary school drop outs and are either a member 
of a low-income family, a foster care youth, a youth offender, a youth 
with a disability, a child of an incarcerated parent, or a migrant 
youth. Program participants receive education services that may lead to 
either a high school diploma or General Education Development (GED). 
Further, they receive occupational skills training and are encouraged 
to pursue a post-secondary education or additional training, including 
registered apprenticeship programs. The program is designed to create a 
skilled workforce either in the construction industry, through the 
rehabilitation and construction of housing for homeless individuals and 
families and low-income families, as well as public facilities, or in 
other high wage, high-demand jobs. The program also benefits the larger 
community because it provides more new and rehabilitated affordable 
housing.


Sec.  672.105  What are the purposes of the YouthBuild program?

    (a) The overarching goal of the YouthBuild program is to enable 
disadvantaged and low-income youth the opportunity to obtain education 
and employment skills necessary to achieve economic self-sufficiency. 
Additionally, the YouthBuild program has as goals:
    (1) Promote leadership skills development and community service 
activities. YouthBuild programs will foster the development of 
leadership skills and a commitment to community improvement among youth 
in low-income communities.
    (2) Enable youth to further their education and training. 
YouthBuild programs will provide counseling and assistance in obtaining 
post-secondary education and/or employment and training placements that 
allow youth to further their education and training.
    (3) Reduce the rate of homelessness in communities with YouthBuild 
programs. The program seeks to increase the number of affordable 
housing units available to decrease the number of homeless individuals 
and families in their communities.
    (b) Through these newfound educational and occupational 
opportunities, youth participants will provide a valuable contribution 
to their communities. The YouthBuild program will add skilled workers 
to the workforce by educating and training youth who might have 
otherwise succumbed to the negative influences within their 
environments.


Sec.  672.110  What definitions apply to this part?

    Alternative school: The term ``alternative school'' means a school 
or program that is set up by a State, school district, or other 
community-based entity to serve young people who are not succeeding in 
a traditional public school environment. An ``alternative school'' must 
be recognized by the authorizing entity designated by the State, must 
award a high school diploma and, must be affiliated with YouthBuild 
programs in order to qualify as part of a ``sequential service 
strategy.''
    Community or other public facility: The term ``community or other 
public facility'' means those facilities which are publicly owned and 
publicly used for the benefit of the community. This term may also 
encompass facilities used by the program but only if the facility is 
available for public entry and use.
    Core construction: The term ``core construction'' means activities 
that are directly related to the construction or rehabilitation of 
residential, community, or other public facilities. These activities 
include, but are not limited to, job skills that can be found under the 
Standard Occupational Classification System (SOC) major group 47, 
Construction and Extraction Occupations, in codes 47-1011 through 47-
4099. These activities may also include, but are not limited to 
construction skills that may be required by green building and 
weatherization industries but are not yet standardized. A full list of 
the SOC's can be found at the Bureau of Labor Statistics (BLS) Web 
site, http://www.bls.gov/soc.
    Eligible entity: The term ``eligible entity'' means a public or 
private nonprofit agency or organization (including a consortium of 
such agencies or organizations), including--
    (1) A community-based organization;
    (2) A faith-based organization;
    (3) An entity carrying out activities under this Title, such as a 
local school board;
    (4) A community action agency;
    (5) A State or local housing development agency;
    (6) An Indian tribe or other agency primarily serving Indians;
    (7) A community development corporation;
    (8) A State or local youth service or conservation corps; and
    (9) Any other entity eligible to provide education or employment 
training under a Federal program (other than the program carried out 
under this part).
    Homeless individual: As defined in 42 U.S.C. 11302 of the McKinney-
Vento Homeless Assistance Act, a ``homeless individual'' is:
    (1) An individual who lacks a fixed, regular, and adequate night 
time residence; and
    (2) An individual who has a primary night time residence that is--
    (i) A supervised publicly or privately operated shelter designed to 
provide temporary living accommodations (including welfare hotels, 
congregate shelters, and transitional housing for the mentally ill);
    (ii) An institution that provides a temporary residence for 
individuals intended to be institutionalized; or
    (iii) A public or private place not designed for, or ordinarily 
used as, a regular sleeping accommodation for human beings.
    Housing development agency: The term ``housing development agency'' 
means any agency of a Federal, State or local government, or any 
private nonprofit organization, that is engaged in providing housing 
for homeless individuals or low-income families.

[[Page 52684]]

    Income: As defined in 42 U.S.C. 1437a(b), ``income'' is: Income 
from all sources of each member of the household, as determined in 
accordance with the criteria prescribed by the Secretary of Labor, in 
consultation with the Secretary of Agriculture, except that any amounts 
not actually received by the family and any amounts which would be 
eligible for exclusion under sec. 1382b(a)(7) of the United States 
Housing Act of 1937, may not be considered as income under this 
paragraph.
    Indian; Indian tribe: As defined in 25 U.S.C. 450b of sec. 4 of the 
Indian Self-Determination and Education Assistance Act, the term 
``Indian'' is a person who is a member of an Indian tribe; and the term 
``Indian tribe'' is any Indian tribe, band, nation, or other organized 
group or community, including any Alaska Native village or regional or 
village corporation as defined in or established pursuant to the Alaska 
Native Claims Settlement Act (85 Stat. 688) (43 U.S.C. 1601 et seq.), 
which is recognized as eligible for the special programs and services 
provided by the United States to Indians because of their status as 
Indians.
    Individual of limited english proficiency: As defined in 20 U.S.C. 
9202(10), an ``individual of limited English proficiency'' is: An adult 
or out-of-school youth who has limited ability in speaking, reading, 
writing, or understanding the English language, and:
    (1) Whose native language is a language other than English; or
    (2) Who lives in a family or community environment where a language 
other than English is the dominant language.
    Low-Income Family: As defined in 42 U.S.C. 1437a(b)(2), a ``low-
income family'' is: A family whose income does not exceed 80 percent of 
the median income for the area, as determined by the Secretary of Labor 
with adjustments for smaller and larger families, except that the 
Secretary of Labor may establish income ceilings higher or lower than 
80 per centum of the median for the area if the Secretary of Labor 
finds that such variations are necessary because of prevailing levels 
of construction costs or unusually high or low family incomes. Further, 
as defined by 42 U.S.C. 1437a(b)(2)(3), the term families includes 
families consisting of one person.
    Migrant youth: The term ``migrant youth'' means a youth, or a youth 
who is the dependent of someone who, during the previous 12 months has:
    (1) Worked at least 25 days in agricultural labor that is 
characterized by chronic unemployment or underemployment;
    (2) Made at least $800 from agricultural labor that is 
characterized by chronic unemployment or underemployment, if at least 
50 percent of his or her income came from such agricultural labor;
    (3) Was employed at least 50 percent of his or her total employment 
in agricultural labor that is characterized by chronic unemployment or 
underemployment; or
    (4) Was employed in agricultural labor that requires travel to a 
jobsite such that the farmworker is unable to return to a permanent 
place of residence within the same day.
    Needs-based stipend: The term ``Needs-based stipends'' means 
additional payments (beyond regular stipends for program participation) 
that are based on defined needs that enable youth to participate in the 
program. To provide need-based stipends the grantee must have a written 
policy in place, which defines: Eligibility; the amounts; and the 
required documentation and criteria for payments. This policy must be 
applied consistently to all program participants.
    Occupational skills training: The term ``Occupational skills 
training'' means an organized program of study that provides specific 
vocational skills that lead to proficiency in performing actual tasks 
and technical functions required by certain occupational fields at 
entry, intermediate, or advanced levels. The occupational skills 
training offered in YouthBuild programs must begin upon program 
enrollment and be tied to the award of an industry recognized 
credential.
    Partnership: The term ``partnership'' means an agreement that 
involves a Memorandum of Understanding (MOU) or letter of commitment 
submitted by each organization and applicant, as defined in the 
YouthBuild Transfer Act, that plan on working together as partners in a 
YouthBuild program. Each partner must have a clearly defined role. 
These roles must be verified through a letter of commitment, not just a 
letter of support, or MOU submitted by each partner. The letter of 
commitment or MOU must detail the role the partner will play in the 
YouthBuild Program, including specific responsibilities and resources 
committed, if appropriate. These letters or MOU's must clearly indicate 
the partnering organization's unique contribution and commitment to the 
YouthBuild Program.
    Public housing agency: As defined in 42 U.S.C. 1437a(b), a ``public 
housing agency'' is: Any State, county, municipality or other 
government entity or public body, or agency or instrumentality of these 
entities, that is authorized to engage or assist in the development or 
operation of low-income housing.
    Registered apprenticeship program: The term ``registered 
apprenticeship program'' means:
    (1) Registered under the Act of August 16, 1937 (commonly known as 
the ``National Apprenticeship Act''; 50 Stat. 664, chapter 663; 20 
U.S.C. 50 et seq.); and
    (2) A program with a plan containing all terms and conditions for 
the qualification, recruitment, selection, employment and training of 
apprentices, as required under 29 CFR parts 29 and 30, including such 
matters as the requirement for a written apprenticeship agreement.
    (3) To the extent that 29 CFR part 30 is amended, such amendments 
apply to the ``registered apprenticeship program'' for Youthbuild.
    Sequential service strategy: The term ``sequential service 
strategy'' means the educational and occupational skills training plan 
developed for individuals who have dropped out of high school and want 
to enroll in a YouthBuild program. The plan is designed so that the 
individual sequentially enrolls in an alternative school, and after 
receiving a year or more of educational services, enrolls in the 
YouthBuild program.
    Transitional housing: The term ``transitional housing'' means 
housing provided for the purpose of facilitating the movement of 
homeless individuals to independent living within a reasonable amount 
of time. The term includes housing primarily designed to serve 
deinstitutionalized homeless individuals and other homeless individuals 
who are individuals with disabilities or are members of families with 
children.
    Youth in foster care: The term ``youth in foster care'' means youth 
currently in foster care or youth who have ever been in foster care.
    Youth who is an individual with a disability: The term youth who is 
an individual with a disability means a youth with any disability (as 
defined in section 3 of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12102)) or a student receiving special education and related 
services under the Individuals with Disabilities Education Act (IDEA).

Subpart B--Funding and Grant Applications


Sec.  672.200  How are YouthBuild grants funded and administered?

    The Secretary uses funds authorized for appropriation under sec. 
173A of the

[[Page 52685]]

Workforce Investment Act (WIA) to administer YouthBuild as a national 
program under Title I, Subtitle D of the Act. YouthBuild grants are 
awarded to eligible entities, as defined in Sec.  672.110, through a 
competitive selection process described in Sec.  672.205.


Sec.  672.205  How does an eligible entity apply for grant funds to 
operate a YouthBuild program?

    The Secretary announces the availability of grant funds through a 
Solicitation for Grant Applications (SGA). The SGA contains 
instructions for what is required in the grant application, describes 
eligibility requirements, the rating criteria that will be used in 
reviewing grant applications, and special reporting requirements to 
operate a YouthBuild project.


Sec.  672.210  How are eligible entities selected to receive grant 
funds?

    In order to receive funds under the YouthBuild program, an eligible 
entity applying for funds (applicant) must meet selection criteria 
established by the Secretary which include:
    (a) The qualifications or potential capabilities of an applicant;
    (b) An applicant's potential to develop a successful YouthBuild 
program;
    (c) The need for an applicant's proposed program, as determined by 
the degree of economic distress of the community from which 
participants would be recruited (measured by indicators such as 
poverty, youth unemployment, and the number of individuals who have 
dropped out of secondary school) and of the community in which the 
housing and public facilities proposed to be rehabilitated or 
constructed are located (measured by indicators such as incidence of 
homelessness, shortage of affordable housing, and poverty);
    (d) The commitment of an applicant to provide skills training, 
leadership development, and education to participants;
    (e) The focus of a proposed program on preparing youth for 
postsecondary education and training opportunities or in-demand 
occupations in the construction industry;
    (f) The extent of an applicant's coordination of activities to be 
carried out through the proposed program with:
    (1) Local boards, One-Stop Career Center operators, and One-Stop 
partners participating in the operation of the One-Stop delivery system 
involved, or the extent of the applicant's good faith efforts, as 
determined by the Secretary, in achieving such coordination;
    (2) Public education, criminal justice, housing and community 
development, national service, or postsecondary education or other 
systems that relate to the goals of the proposed program; and
    (3) Employers in the local area.
    (g) The extent to which a proposed program provides for inclusion 
of tenants who were previously homeless individuals or families in the 
rental of housing provided through the program;
    (h) The commitment of additional resources to the proposed program 
(in addition to the funds made available through the grant) by:
    (1) An applicant;
    (2) Recipients of other Federal, State, or local housing and 
community development assistance who will sponsor any part of the 
rehabilitation, construction, operation and maintenance, or other 
housing and community development activities undertaken as part of the 
proposed program; or
    (3) Entities carrying out other Federal, State, or local activities 
or activities conducted by Indian tribes, including vocational 
education programs, adult and language instruction educational 
programs, and job training using funds provided under WIA,
    (i) An applicant's ability to enter partnerships with:
    (1) Education and training providers including:
    (i) The kindergarten through twelfth grade educational system;
    (ii) Adult education programs;
    (iii) Community and technical colleges;
    (iv) Four-year colleges and universities;
    (v) Registered apprenticeship programs; and
    (vi) Other training entities.
    (2) Employers, including professional organizations and 
associations. An applicant will be evaluated on the extent to which 
employers participate in:
    (i) Defining the program strategy and goals;
    (ii) Identifying needed skills and competencies;
    (iii) Designing training approaches and curricula;
    (iv) Contributing financial support; and
    (v) Hiring qualified YouthBuild graduates.
    (3) The workforce investment system which may include:
    (i) State and local workforce investment boards;
    (ii) State workforce agencies; and
    (iii) One-Stop Career Centers and their cooperating partners.
    (4) The juvenile justice system, and the extent to which it 
provides:
    (i) Support and guidance for YouthBuild participants with court 
involvement; and
    (ii) Assists in the reporting of recidivism rates among YouthBuild 
participants.
    (5) Faith-based and community organizations, and the extent to 
which they provide a variety of grant services such as:
    (i) Case management;
    (ii) Mentoring;
    (iii) English as a Second Language courses; and
    (iv) Other comprehensive supportive services, when appropriate.
    (j) The applicant's potential to serve different regions, including 
rural areas and States that may not have previously received grants for 
YouthBuild programs; and
    (k) Such other factors as the Secretary determines to be 
appropriate for purposes of evaluating an applicant's potential to 
carry out the proposed program in an effective and efficient manner.
    (l) The weight to be given to these factors will be described in 
the SGA issued under Sec.  672.205.


Sec.  672.215  How are eligible entities notified of approval for grant 
funds?

    The Secretary will, to the extent practicable, notify each eligible 
entity applying for funds no later than 5 months from the date the 
application is received, whether the application is approved or 
disapproved. In the event additional funds become available, ETA 
reserves the right to use such funds to select additional grantees from 
applications submitted in response to an SGA.

Subpart C--Program Requirements


Sec.  672.300  Who is an eligible participant?

    (a) Except as provided in paragraph (b) of this section, an 
individual is eligible to participate in a YouthBuild program if such 
individual is:
    (1) Not less than age 16 and not more than age 24 on the date of 
enrollment; and
    (2) A school dropout or an individual who has dropped out of school 
and reenrolled in an alternative school, if that reenrollment is part 
of a sequential service strategy; and
    (3) Is one or more of the following:
    (i) A member of a low-income family as defined in Sec.  672.110;
    (ii) A youth in foster care;
    (iii) A youth offender;
    (iv) A youth who is an individual with a disability;
    (v) The child of a current or formerly incarcerated parent; or

[[Page 52686]]

    (vi) A migrant youth as defined in Sec.  672.110.
    (b) Exceptions. Not more than 25 percent of the participants in a 
program, under this section, may be individuals who do not meet the 
requirements of paragraph (a)(2) or (a)(3) of this section, if such 
individuals:
    (1) Are basic skills deficient as defined in section 101(4) of WIA, 
even if they have their high school diploma, GED credential, or other 
State recognized equivalent; or
    (2) Have been referred by a local secondary school for 
participation in a YouthBuild program leading to the attainment of a 
secondary school diploma. Referrals from secondary schools to 
YouthBuild programs that provide only a GED degree are not allowed.


Sec.  672.305  Are there special rules that apply to veterans?

    Special rules for determining income for veterans are found in 20 
CFR 667.255 and for the priority of service provisions for qualified 
persons are found in 20 CFR part 1010. Those special rules apply to 
covered persons who are eligible to participate in the YouthBuild 
program.


Sec.  672.310  What eligible activities may be funded under the 
YouthBuild program?

    Grantees may provide one or more of the following education and 
workforce investment and other activities to YouthBuild participants--
    (a) Eligible education activities include:
    (1) Services and activities designed to meet the educational needs 
of participants, including:
    (i) Basic skills instruction and remedial education;
    (ii) Language instruction educational programs for individuals with 
limited English proficiency;
    (iii) Secondary education services and activities, including 
tutoring, study skills training, and dropout prevention activities, 
designed to lead to the attainment of a secondary school diploma, GED 
credential, or other State-recognized equivalent (including recognized 
alternative standards for individuals with disabilities);
    (iv) Counseling and assistance in obtaining post-secondary 
education and required financial aid; and
    (v) Alternative secondary school services.
    (2) Counseling services and related activities, such as 
comprehensive guidance and counseling on drug and alcohol abuse and 
referral to appropriate treatment;
    (3) Activities designed to develop employment and leadership 
skills, which may include community service and peer-centered 
activities encouraging responsibility and other positive social 
behaviors, and activities related to youth policy committees that 
participate in decision-making related to the program; and
    (4) Supportive services, as defined under Title I of WIA Section 
101(46), and provision of need-based stipends, as defined in Sec.  
672.110.
    (b) Eligible workforce investment activities include:
    (1) Work experience and skills training (coordinated, to the 
maximum extent feasible, with registered apprenticeship programs) in 
housing rehabilitation and construction activities described in 
paragraphs (c)(1) and (c)(2) of this section;
    (2) Occupational skills training;
    (3) Other paid and unpaid work experiences, including internships 
and job shadowing; and
    (4) Job search assistance.
    (c) Other eligible activities include:
    (1) Supervision and training for participants in the rehabilitation 
or construction of housing, including residential housing for homeless 
individuals and families or low-income families, or transitional 
housing for homeless individuals and families.
    (2) Supervision and training for participants in the rehabilitation 
or construction of community or other public facilities, except that, 
as provided in Sec.  672.505(b), not more than 10 percent of the funds 
awarded for each grant may be used for such supervision and training;
    (3) Ongoing training and technical assistance for staff of grant 
recipients that is related to developing and carrying out the 
YouthBuild program;
    (4) Payment of a portion of the administrative costs of the program 
as provided in Sec.  672.505(a);
    (5) Adult mentoring;
    (6) Provision of wages, stipends, or additional benefits to 
participants in the program as provided in Sec.  672.530; and
    (7) Follow-up services as provided in Sec.  672.325.


Sec.  672.315  What timeframes apply to participation?

    An eligible individual selected for participation in the program 
must be offered full-time participation in the program for not less 
than 6 months and not more than 24 months.


Sec.  672.320  What timeframes must be devoted to education and 
workforce investment or other activities?

    YouthBuild grantees must structure programs so that participants in 
the program are offered:
    (a) Eligible education activities, as specified in Sec.  
672.310(a), during at least 50 percent of the time during which they 
participate in the program; and
    (b) Eligible workforce investment activities such as those 
specified in Sec.  672.310(b) during at least 40 percent of the time 
during which they participate in the program. Grantees must provide the 
eligible workforce investment activities described in Sec.  
672.310(b)(1) as part of their program of eligible workforce investment 
activities.
    (c) The remaining 10 percent of the time of participation can be 
used for the activities described in paragraphs (a) and (b) of this 
section and/or for leadership development and community service 
activities.


Sec.  672.325  What timeframes apply for follow-up services?

    Follow-up services must be provided to YouthBuild participants for 
a period of not less than 9 months but no more than 12 months after 
participants exit a YouthBuild program. These are services that assist 
participants in obtaining or retaining employment, or applying for and 
transitioning to post-secondary education or training.

Subpart D--Performance Indicators


Sec.  672.400  What are the performance indicators for YouthBuild 
grants?

    (a) The performance indicators for YouthBuild grants are:
    (1) Placement in employment or education;
    (2) Attainment of a degree or certificate;
    (3) Literacy and numeracy gains; and
    (4) Such other indicators of performance as may be required by the 
Secretary.
    (b) The Department will provide the details of the performance 
indicators in administrative guidance.


Sec.  672.405  What are the required levels of performance for the 
performance indicators?

    (a) Expected levels of performance for each of the common 
performance indicators are national standards that will be established 
at a later date and will be provided in separately issued guidance. 
Short-term or other performance indicators will be established at a 
later date and will be provided in separately issued guidance or as 
part of the SGA or grant agreement. Performance level expectations are 
based on available YouthBuild data and data from similar WIA Youth 
programs and may change between grant competitions. The expected 
national levels of performance will take into account the extent to 
which the levels

[[Page 52687]]

promote continuous improvement in performance.
    (b) The levels of performance established must, at a minimum:
    (1) Be expressed in an objective, quantifiable, and measurable 
form; and
    (2) Indicate continuous improvement in performance.


Sec.  672.410  What are the reporting requirements for YouthBuild 
grantees?

    Each grantee must provide such reports as are required by the 
Secretary in separately issued guidance, including:
    (a) The Quarterly Performance Report;
    (b) The quarterly narrative progress report;
    (c) The financial report; and
    (d) Such other reports as may be required by the grant agreement.


Sec.  672.415  What are the due dates for quarterly reporting?

    Each grantee must provide quarterly reports such that:
    (a) Quarterly reports are due no later than 45 days after the end 
of the reporting quarter, unless otherwise specified in the reporting 
guidance issued under Sec.  672.410; and
    (b) A final financial report is required 90 days after the 
expiration of a funding period or the termination of grant support.

Subpart E--Administrative Rules, Costs and Limitations


Sec.  672.500  What administrative regulations apply to the YouthBuild 
program?

    (a) The regulations found in this part.
    (b) The general administrative requirements found in 20 CFR part 
667, except those which apply only to the WIA Title I-B program and 
those which have been modified by this section.
    (c) The Department's regulations on government-wide requirements, 
which include:
    (1) The regulations codifying the Office of Management and Budget's 
Government wide grants requirements: Circular A-110 (relocated to 2 CFR 
part 215) and Circular A-102 at 29 CFR parts 95 and 97, as applicable;
    (2) The Department's regulations at 29 CFR part 37, which implement 
the nondiscrimination provisions of WIA section 188;
    (3) The Department's regulations at 29 CFR parts 93, 94 and 98 
relating to, and restrictions on lobbying, drug free workplace, and 
debarment and suspension;
    (4) The audit requirements of the OMB Circular A-133 stated at 29 
CFR part 99, as required by 29 CFR 96.11, 95.26 and 97.26, as 
applicable.


Sec.  672.505  How may grantees provide services under the YouthBuild 
program?

    Each recipient of a grant under the YouthBuild program may provide 
the services and activities described in these regulations either 
directly or through subgrants, contracts, or other arrangements with 
local educational agencies, postsecondary educational institutions, 
State or local housing development agencies, other public agencies, 
including agencies of Indian tribes, or private organizations.


Sec.  672.510  What cost limits apply to the use of YouthBuild program 
funds?

    (a) Administrative costs for programs operated under YouthBuild are 
limited to no more than 15 percent of the grant award. The definition 
of administrative costs can be found in 20 CFR 667.220.
    (b) The cost of supervision and training for participants involved 
in the rehabilitation or construction of community and other public 
facilities is limited to no more than 10 percent of the grant award.


Sec.  672.515  What are the cost-sharing or matching requirements of 
the YouthBuild program?

    (a) The cost-sharing or matching requirements applicable to a 
YouthBuild grant will be addressed in the grant agreement.
    (b) The value of construction materials used in the YouthBuild 
program is an allowable cost for the purposes of the required non-
Federal share or match.
    (c) The value of land acquired for the YouthBuild program is not an 
allowable cost-sharing or match.
    (d) Federal funds may not be used as cost-sharing or match 
resources except as provided by Federal law.
    (e) The value of buildings acquired for the YouthBuild program is 
an allowable match, provided that the following conditions apply:
    (1) The purchase cost of buildings used solely for training 
purposes is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase price related to direct training activities.
    (f) Grantees must follow the requirements of 29 CFR 95.23 or 29 CFR 
97.24 in the accounting, valuation, and reporting of the required non-
Federal share.


Sec.  672.520  What are considered to be leveraged funds?

    (a) Leveraged funds used to support allowable YouthBuild program 
activities consist of payments made for allowable costs funded by both 
non-YouthBuild Federal, and non-Federal, resources which include:
    (1) Costs which meet the criteria for cost-sharing or match in 
Sec.  672.515 and are in excess of the amount of cost-sharing or match 
resources required;
    (2) Costs which would meet the criteria in Sec.  672.515 except 
that they are paid for with other Federal resources; and
    (3) Costs which benefit the grant program and are otherwise 
allowable under the cost principles but are not allowable under the 
grant because of some statutory, regulatory, or grant provision, 
whether paid for with Federal or non-Federal resources.
    (b) The use of leveraged funds must be reported in accordance with 
Departmental instructions.


Sec.  672.525  How are the costs associated with real property treated 
in the YouthBuild program?

    (a) As provided in paragraphs (b) and (c) of this section, the 
costs of the following activities associated with real property are 
allowable solely for the purpose of training YouthBuild participants:
    (1) Rehabilitation of existing structures for use by homeless 
individuals and families or low-income families or for use as 
transitional housing.
    (2) Construction of buildings for use by homeless individuals and 
families or low-income families or for use as transitional housing.
    (3) Construction or rehabilitation of community or other public 
facilities, except, as provided in Sec.  672.510(b), only 10% of the 
grant award is allowable for such construction and rehabilitation.
    (b) The costs for acquisition of buildings that are used for 
activities described in paragraph (a) of this section are allowable 
with prior grant officer approval and only under the following 
conditions:
    (1) Purchase cost of buildings used solely for training purposes is 
allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase cost related to direct training.
    (c) The following costs are allowable to the extent allocable to 
training YouthBuild participants in the construction and rehabilitation 
activities specified in paragraph (a) of this section:
    (1) Trainees' tools and clothing;
    (2) On-site trainee supervisors;
    (3) Construction management;
    (4) Relocation of buildings; and
    (5) Clearance and demolition.

[[Page 52688]]

    (d) Architectural fees, or a proportionate share thereof, are 
allowable when such fees can be related to items such as architectural 
plans or blueprints on which participants will be trained.
    (e) The following costs are unallowable:
    (1) The costs of acquisition for land.
    (2) Brokerage fees.


Sec.  672.530  What participant costs are allowable under the 
YouthBuild program?

    Allowable participant costs include:
    (a) The costs of payments to participants engaged in eligible work-
related YouthBuild activities.
    (b) The costs of payments provided to participants engaged in non-
work-related YouthBuild activities.
    (c) The costs of Needs-based stipends
    (d) The costs of supportive services.
    (e) The costs of providing additional benefits to participants, 
which may include:
    (1) Tuition assistance for obtaining college education credits
    (2) Scholarships to an Apprenticeship, Technical, or Secondary 
Education program; and
    (3) Sponsored health programs.


Sec.  672.535  What effect do payments to YouthBuild participants have 
on eligibility for other Federal need-based benefits?

    Under 20 CFR 667.272(c), allowances, earnings, and payments to 
individuals participating in programs under Title I of WIA are not 
considered as income for purposes of determining eligibility for and 
the amount of income transfer and in-kind aid furnished under any 
Federal or Federally-assisted program based on need other than as 
provided under the Social Security Act (42 U.S.C. 301).


Sec.  672.540  What program income requirements apply under the 
YouthBuild program?

    (a) Except as provided in paragraph (b) of this section, program 
income requirements, as specified in the applicable Uniform 
Administrative Requirements at 29 CFR 95.24 and 97.25, apply to 
YouthBuild grants.
    (b) Revenue from the sale or rental of buildings rehabilitated or 
constructed under the YouthBuild program to homeless individuals and 
families and low-income families is not considered program income. 
Grantees are encouraged to use such revenue for the long-term 
sustainability of the YouthBuild effort.


Sec.  672.545  Are YouthBuild programs subject to the Davis-Bacon Act 
labor standards?

    (a) YouthBuild programs and grantees are subject to Davis-Bacon 
labor standards requirements in certain circumstances. In those 
instances where a grantee is subject to Davis-Bacon requirements, the 
grantee must follow applicable requirements in the Department's 
regulations at 29 CFR parts 1, 3, and 5, including the requirements 
contained in the Davis-Bacon contract provisions set forth in 29 CFR 
5.5.
    (b) YouthBuild participants are subject to Davis-Bacon Act labor 
standards when they perform Davis-Bacon-covered laborer or mechanic 
work on Federal or Federally-assisted projects that are subject to the 
Davis-Bacon Act labor standards. The Davis-Bacon prevailing wage 
requirements apply to hours worked on the site of the work.
    (1) YouthBuild participants may be classified as ``trainees'' on 
Davis-Bacon contracts only when they are employed in and are 
individually registered in a program which has received prior approval, 
evidenced by formal certification by the U.S. Department of Labor, 
Employment and Training Administration. The Davis-Bacon contract 
clauses set forth in 29 CFR 5.5(a)(4)(ii) provide further rules and 
requirements regarding the use of trainees on Davis-Bacon covered 
contracts.
    (2) YouthBuild participants who are not registered and 
participating in a training program approved by the Employment and 
Training Administration must be paid not less than the applicable wage 
rate on the wage determination for the classification of work actually 
performed.


Sec.  672.550  What are the recordkeeping requirements for YouthBuild 
programs?

    (a) Grantees must follow the recordkeeping requirements specified 
in the Uniform Administrative Regulations, at 29 CFR 95.53 and 29 CFR 
97.42, as appropriate.
    (b) Grantees must maintain such additional records related to the 
use of buildings constructed or rehabilitated with YouthBuild funds as 
specified in the grant agreement or in the Department's guidance.

Subpart F--Additional Requirements


Sec.  672.600  What are the safety requirements for the YouthBuild 
program?

    (a) The working conditions of YouthBuild participants are subject 
to health and safety standards under 20 CFR 667.274. Such health and 
safety standards include ``hazardous orders'' governing child labor 
under 29 CFR part 570 prohibiting youth ages 16 and 17 from working in 
identified hazardous occupations.
    (b) YouthBuild grantees are required to:
    (1) Provide comprehensive safety training for youth working on 
YouthBuild construction projects;
    (2) Have written, jobsite specific, safety plans overseen by an on-
site supervisor with authority to enforce safety procedures;
    (3) Provide necessary personal protective equipment to youth 
working on YouthBuild projects; and
    (4) Submit required injury incident reports.


Sec.  672.605  What are the reporting requirements for youth safety?

    YouthBuild grantees must ensure that YouthBuild program sites 
comply with the Occupational Safety and Health Administration's (OSHA) 
reporting requirements in 29 CFR part 1904. The YouthBuild grantee is 
responsible for sending a copy of OSHA's injury incident report form, 
to U.S. Department of Labor, Employment and Training Administration 
within 7 days of any reportable injury suffered by a YouthBuild 
participant. The injury incident report form is available from OSHA and 
can be downloaded at  http://www.osha.gov/recordkeeping/RKforms.html. 
Reportable injuries include those that result in death, days away from 
work, restricted work or transfer to another job, medical treatment 
beyond first aid, or loss of consciousness.


Sec.  672.610  What environmental protection laws apply to the 
YouthBuild program?

    YouthBuild Program grantees are required, where applicable, to 
comply with all environmental protection statutes and regulations.


Sec.  672.615  What requirements apply to YouthBuild housing?

    (a) YouthBuild grantees must ensure that all residential housing 
units located on the property which are constructed or rehabilitated 
using YouthBuild funds must be available solely for:
    (1) Sale to homeless individuals and families or low-income 
families;
    (2) Rental by homeless individuals and families or low-income 
families;
    (3) Use as transitional or permanent housing for the purpose of 
assisting in the movement of homeless individuals and families to 
independent living; or
    (4) Rehabilitation of homes for low-income homeowners.
    (b) For rentals of residential units located on the property which 
are constructed or rehabilitated using YouthBuild funds:

[[Page 52689]]

    (1) The property must maintain at least a 90 percent level of 
occupancy for low-income families. The income test will be conducted 
only at the time of entry for each available unit or rehabilitation of 
occupant-owned home. If the grantee cannot find a qualifying tenant to 
lease the unit, the unit may be leased to a family whose income is 
above the income threshold to qualify as a low-income family but below 
the median income for the area. Leases for tenants with higher incomes 
will be limited to one or two years. The leases provided to tenants 
with higher incomes will not be subject to the termination clause that 
is described in paragraph (b)(2) of this section.
    (2) The property owner must not terminate the tenancy or refuse to 
renew the lease of a tenant occupying a residential rental housing unit 
constructed or rehabilitated using YouthBuild funds except for serious 
or repeated violations of the terms and conditions of the lease, for 
violation of applicable Federal, State or local laws, or for good 
cause. Any termination or refusal to renew the lease must be preceded 
by not less than a 30-day written notice to the tenant specifying the 
grounds for the action. The property owner may waive the written notice 
requirement for termination in dangerous or egregious situations 
involving the tenant.
    (c) All transitional or permanent housing for homeless individuals 
or families or low-income families must be safe and sanitary. The 
housing must meet all applicable State and local housing codes and 
licensing requirements in the jurisdiction in which the housing is 
located.
    (d) For sales or rentals of residential housing units constructed 
or rehabilitated using YouthBuild funds, YouthBuild grantees must 
ensure that owners of the property record a restrictive covenant at the 
time that an occupancy permit is issued against such property which 
includes the use restrictions set forth in paragraphs (a), (b) and (c) 
of this section and incorporates the following definitions at Sec.  
672.110: Homeless Individual; Low-Income Housing; and Transitional 
Housing. The term of the restrictive covenant must be at least 10 years 
from the time of the issuance of the occupancy permit, unless a time 
period of more than 10 years has been established by the grantee. Any 
additional stipulations imposed by a grantee or property owner should 
be clearly stated in the covenant.
    (e) Any conveyance document prepared in the 10-year period of the 
restrictive covenant must inform the buyer of the property that all 
residential housing units constructed or rehabilitated using YouthBuild 
funds are subject to the restrictions set forth in paragraphs (a), (b), 
(c), and (d) of this section.

    Signed at Washington, DC, this 19th day of August 2010.
Jane Oates,
Assistant Secretary, Employment and Training Administration.
[FR Doc. 2010-21097 Filed 8-26-10; 8:45 am]
BILLING CODE 4510-FT-P