[Federal Register Volume 78, Number 47 (Monday, March 11, 2013)]
[Rules and Regulations]
[Pages 15283-15292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05345]


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DEPARTMENT OF LABOR

Veterans' Employment and Training Service

20 CFR Part 1001

RIN 1293-AA18


Uniform National Threshold Entered Employment Rate for Veterans

AGENCY: Veterans' Employment and Training Service, Labor.

ACTION: Final rule.

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SUMMARY: The purpose of this Final Rule is to establish the uniform 
national threshold entered employment rate (UNTEER) for veterans, as 
required of the Secretary in 38 U.S.C. 4102A(c)(3)(B), for use in 
evaluating States' performance in assisting veterans to meet their 
employment needs. The Final Rule also explains how the threshold will 
be used in the process of identifying those States to be reviewed by 
comparing the actual entered employment rate (EER) achieved for 
veterans with the threshold EER, and it identifies certain factors, in 
addition to the threshold, that will be included in the Department's 
review to determine whether an EER below the threshold reflects a 
deficiency in the State's performance, or is attributable to other 
factors beyond the State's control. Finally, in those cases in which a 
State's EER is determined to reflect a deficiency in a State's 
performance, this Final Rule identifies the procedure for the 
submission and review of a corrective action plan (CAP), the delivery 
of technical assistance (TA), and the initiation of the necessary steps 
to implement corrective actions to improve the State's performance in 
assisting veterans to meet their employment needs.

DATES: Effective Date: The Final Rule will become effective on May 10, 
2013.

FOR FURTHER INFORMATION CONTACT: Ruth Samardick, Director, Office of

[[Page 15284]]

National Programs, Veterans' Employment and Training Service, U.S. 
Department of Labor, 200 Constitution Avenue NW., Room S-1325, 
Washington, DC 20210, [email protected], (202) 693-4700 (this is 
not a toll-free number) or (202) 693-4760 (TTY/TDD).

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

I. Background

    On February 18, 2011, the Department published a Notice of Proposed 
Rulemaking (NPRM, 76 FR 9517) proposing a Rule to implement a uniform 
national threshold entered employment rate for veterans applicable to 
State employment service delivery systems. We undertook this Rulemaking 
in accordance with 38 U.S.C. 4102A(c)(3)(B) (as enacted by the Jobs for 
Veterans Act) which requires the Department to establish that threshold 
rate by regulation. All comments received during the comment period 
were posted on www.regulations.gov.
    The Jobs for Veterans Act (JVA), Public Law 107-288, was signed 
into law November 7, 2002. Section 4(a)(1) of the JVA amended 38 U.S.C. 
4102A to require that the Secretary of Labor ''establish, and update as 
appropriate, a comprehensive performance accountability system (as 
described in subsection (f)) and carry out annual performance reviews 
of veterans employment, training, and placement services provided 
through employment service delivery systems, including through Disabled 
Veterans' Outreach Program specialists and through Local Veterans' 
Employment Representatives in States receiving grants, contracts, or 
awards under this chapter.'' 38 U.S.C. 4102A(b)(7).
    Section 4102A(f) requires the establishment of performance 
standards and outcome measures to measure the performance of State 
employment service delivery systems.
    Section 4101(7) of the statute defines ''employment service 
delivery system'' to include ''labor exchange services * * * offered in 
accordance with the Wagner-Peyser Act.'' We interpret this definition 
to include the services delivered through the Wagner-Peyser State 
Grants, funded by the Employment and Training Administration (ETA), as 
well as the services delivered through the Jobs for Veterans State 
Grants (JVSG), funded by the Veterans' Employment and Training Service 
(VETS). In addition, we interpret this definition to exclude the 
services funded through the Workforce Investment Act of 1998 (WIA) 
(Pub. L. 105-220).
    Under section 4102A(f), the standards and measures used to assess 
performance of veterans' programs must be consistent with State 
performance measures applicable under section 136(b) of the WIA. 38 
U.S.C. 4102A(f)(2)(A); see also WIA section 136(b) (codified at 29 
U.S.C. 2871(b)). The basic standards and measures applied by the 
Department to measure performance under WIA are referred to in the 
State employment service delivery systems as ``common measures.'' The 
current methods of calculating the common measures are specified in 
Training and Employment Guidance Letter (TEGL) No.17-05, issued on 
February 17, 2006. This TEGL can be accessed at http://wdr.doleta.gov/directives/attach/TEGL17-05.pdf. The common measures for adult 
workforce programs include a measure of the rate at which enrollees of 
State employment service delivery systems enter employment. This is 
referred to as the ``entered employment rate'' or EER. Under the common 
measures, there is a comparable EER specifically applicable to veterans 
and eligible persons. Application of that measure to all State 
employment service delivery systems is implemented each year through 
issuance of a Veterans' Program Letter (VPL), most recently VPL 03-11, 
issued on June 14, 2011, which established the reporting and 
performance measurement requirements for PY 2011. This VPL can be 
accessed at: http://www.dol.gov/vets/VPLS/VPLDirectory.html.
    In the NPRM it was explained that this regulation establishes a 
uniform national threshold only for the EER for veterans and eligible 
persons. If we revise the calculation of the standards and measures 
applied by the Department to measure performance under WIA or under a 
successor program to WIA through issuance of policy guidance, the Final 
Rule provides that the revised method of calculating the EER for 
veterans and eligible persons will be used in calculating the uniform 
national threshold EER. The method of calculating the uniform national 
threshold EER for veterans and eligible persons will be specified to 
State employment service delivery systems in the annual VPL, as 
mentioned above, and in a companion annual Training and Employment 
Guidance Letter issued by ETA, such as TEGL No.29-10, ``Negotiating 
Performance Goals for the Workforce Investment Act Title 1B Programs 
and Wagner-Peyser Act Funded Activities for Program Year (PY) 2011'' 
issued on June 1, 2011.
    As explained in the NPRM, in developing this regulation we also 
anticipated that there would be changes to the existing State workforce 
agency performance reporting system to accommodate reporting on the 
definition of ``veteran'' that applies to the priority of service 
provisions of the JVA. The priority of service definition includes any 
person who served in the military and was discharged under conditions 
other than dishonorable. Section 1001.162 of this Final Rule outlines 
how this definition will be phased into operation.
    For Sec.  1001.162 in this Rule, we adopted the language proposed 
in the NPRM. The language explains that for purposes of this Rule, the 
definition of ``veteran'' will be implemented in two stages. Under 
Sec.  1001.162(a), starting with the first Program Year that begins 
after May 10, 2013, we will implement this Rule using the definition of 
``veteran'' that is consistent with the definition of ``eligible 
veteran'' that applies to VETS' services provided under 38 U.S.C. 
chapter 41. An ``eligible veteran'' is defined as a person who served 
on active duty in the military for a period of more than 180 days and 
was discharged under conditions other than dishonorable. (The 
definition also includes some other smaller group of veterans, for 
example, those who were released from active duty because of a service-
connected disability.) Because of the requirement of more than 180 days 
of service, the NPRM referred to this definition as the ``more 
restrictive'' definition of ``veteran.''
    Then, as stated in Sec.  1001.162(b), we will begin to use the less 
restrictive priority of service definition of ``veteran'' starting two 
Program Years after States are required to begin collecting data under 
the Priority of Service regulations. DOL will require States to begin 
collecting this data in PY 2012. Therefore, we will begin using the 
less restrictive definition of ``veteran'' for purposes of this Rule 
beginning PY 2014.
    As explained in the NPRM, even when we begin using the less 
restrictive definition of ``veteran'' when implementing this Rule, 
States will be required to continue collecting data under the more 
restrictive definition in addition to collecting data under the

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Priority of Service regulations. This is because the Secretary is 
required by 38 U.S.C. 4107(c) to report annually to the Senate and 
House Veterans' Affairs Committees on the employment and training 
services provided under 38 U.S.C. chapter 41, which are the services 
provided to ``eligible veterans'' as defined by the more restrictive 
definition.
    Section 4102A(c)(3) of Title 38 states that ``(A)(i) As a condition 
of a grant or contract under this section for a program year, in the 
case of a State that the Secretary determines has an entered employment 
rate for veterans that is deficient for the preceding program year, the 
State shall develop a Corrective Action Plan (CAP) to improve that rate 
for veterans in the State. (ii) The State shall submit the Corrective 
Action Plan to the Secretary for approval, and if approved, shall 
expeditiously implement the plan. (iii) If the Secretary does not 
approve a Corrective Action Plan submitted by the State under clause 
(i), the Secretary shall take such steps as may be necessary to 
implement corrective actions in the State to improve the entered 
employment rate for veterans in that State. (B) To carry out 
subparagraph (A), the Secretary shall establish in regulations a 
uniform national threshold entered employment rate for veterans for a 
program year by which determinations of deficiency may be made under 
subparagraph (A). (C) In making a determination with respect to a 
deficiency under subparagraph (A), the Secretary shall take into 
account the applicable annual unemployment data for the State and 
consider other factors, such as prevailing economic conditions, that 
affect performance of individuals providing employment, training, and 
placement services in the State.''
    Section 1001.164 of this Final Rule states that the uniform 
national threshold EER for a program year is equal to 90 percent of the 
national EER for veterans and eligible persons, which is defined in 20 
CFR 1001.163(c).
    In the process of establishing the uniform national threshold EER, 
before the issuance of the NPRM, we considered a variety of 
methodologies and used actual EER results from Program Years 2005 
through 2009 in order to test the validity of the methodologies. Our 
goal was to establish a uniform national threshold that would meet five 
criteria: the threshold should produce reasonable results under varying 
economic conditions; the threshold should relate directly to the 
national EER because the national EER is the overall program 
performance measure related to entered employment rates; the threshold 
should identify State agencies whose EERs are demonstrably low; the 
threshold methodology should be easily explained and readily grasped; 
and the annual threshold-setting process should not conflict with or 
introduce confusion into the annual performance goal-setting process 
conducted between VETS and each State agency.
    We first tried methodologies that essentially compared a State's 
current year veterans' EER results with prior years' results, using 
straightforward comparisons in one method and comparisons to prior year 
averages in another. Those methods involved relatively complex 
calculations, and empirical tests with State performance data from 
Program Years 2008 and 2009 demonstrated that those methodologies did 
not produce reasonable results under the conditions created by the 
economic recession experienced during that period.
    We then looked at simpler designs for calculating and applying the 
uniform national threshold EER. One methodology used the national EER 
for the program year before the subject program year as the basis for 
calculating the threshold EER. The process would have involved simply 
setting the threshold at a particular percentage of the national EER 
from the prior year and comparing the State agencies' actual 
achievements in the subject program year to that threshold percentage. 
However, testing at several different percentage levels indicated that 
using the prior year's national EER as the basis for a threshold also 
produces unreasonable results in years when there are relatively 
unusual declines or upturns in economic conditions.
    We then tested and selected a similar one-step methodology using 
the national EER for the subject program year as the basis for 
calculating the threshold EER. We chose to propose a 90 percent (of the 
national EER) level as the threshold for identifying each year those 
State agencies to be subject to a review triggered by the UNTEER 
because testing of that threshold level most completely satisfies the 
five criteria stated above. Testing of higher and lower threshold 
levels (e.g., 80 to 95 percent of the national EER) produced results 
that in one or more ways failed to satisfy those five criteria stated 
above. Setting the threshold at the 80 or 85 percent (of the national 
EER) levels apparently would exempt virtually all of the subject State 
agencies from the review, year in and year out, despite their 
relatively low performance levels. That clearly is not an outcome 
compatible with the legislative intent. At the 95 percent level, more 
State agencies would be in the cohort subject to the review. But at 
that level, moreso than at the 90 percent level, it also is more likely 
that the number of State agencies whose statistical under-performance 
was attributable primarily to economic factors in the subject program 
year, and thus not subject to corrective action planning, would be 
increased.

II. Discussion of the Comments and Regulatory Provisions

Summary of Comments

    We received eight comments on the NPRM by the close of the comment 
period. All comments were carefully reviewed. Of the eight comments, 
seven were from organizations with an interest in veterans' employment 
services. Of the seven comments from organizations, six were from State 
Workforce Agencies, and one was from a State veterans' commission that 
is the Jobs for Veterans State grantee in that state. One of the eight 
comments was submitted by an individual in his personal capacity; that 
person also submitted a comment as an employee of a State Workforce 
Agency.

Discussion of Comments

    1. Three comments raised objections to the fact that the proposed 
uniform national threshold entered employment rate (UNTEER) would not 
include the performance data of all Workforce Investment Act-funded 
programs for veterans and other eligible persons. They said that WIA 
program services, especially WIA-funded training programs, are integral 
to the workforce services provided to veterans in the States. The 
comments maintained that by excluding WIA performance data, the 
threshold will not accurately reflect a State's performance in serving 
veterans through its workforce system. Furthermore, one of the comments 
stated that the exclusion of WIA would cause the threshold to be less 
effective in improving a State's services to veterans. Another comment 
stated that in excluding WIA programs from the UNTEER, VETS would miss 
the opportunity to improve WIA program performance for veterans. Two of 
the comments also stated that not applying the threshold measure as a 
performance standard to the overall performance of the workforce 
services programs in a State would undermine the priority for veterans 
and other covered persons that is supposed to be given by all DOL-
funded employment and training programs.
    Response: As was proposed in the NPRM, the UNTEER in the Final Rule

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does not include WIA-funded services. Section 4102A(f)(1) of 38 U.S.C. 
requires that VETS establish performance standards to carry out 
performance reviews of veterans services provided though State 
employment service delivery systems, including services provided 
through JVSG staff. Section 4101 defines ``employment service delivery 
system'' to mean ``a service delivery system at which or through which 
labor exchange services * * * are offered in accordance with the 
Wagner-Peyser Act.'' We have interpreted this definition to exclude 
WIA-funded services. Section 4102A(f)(2) states that these performance 
standards must be consistent with other performance standards and 
outcome measures related to services to veterans that are commonly 
applied to State Workforce agencies. The Department's common measures 
of State agency performance on behalf of veterans (including annual 
entered employment rates for each State) apply to the outcomes of 
services provided by the veterans' specialists funded by Jobs for 
Veterans State Grants and the State agency staff who are supported by 
grants authorized by the Wagner-Peyser Act. Therefore it is appropriate 
that the UNTEER be calculated from a database that covers the 
performance of the JVSG and Wagner-Peyser grant-supported staff only.
    Regarding the comments that questioned this Rule's effect on 
States' implementation of the priority of service requirements of 38 
U.S.C. 4215, we believe that these comments have raised the broader 
issue of the need for performance standards for all DOL-funded programs 
subject to the priority of service for covered persons requirement. 
That issue is separate from the establishment of the uniform national 
threshold entered employment rate that is relevant exclusively to 
measuring the effectiveness of the services of State agencies that are 
recipients of Wagner-Peyser State Grants, and/or Jobs for Veterans 
State Grants. Furthermore, the Department currently is working to 
implement the requirement in Public Law 112-56, enacted in November 
2011, to establish appropriate performance measures related to the 
priority of service advantage for veterans and other covered persons.
    2. One commenter pointed out that because the proposed UNTEER can 
only be calculated at the end of a performance period, the number would 
not be known during the annual goal-setting negotiations that take 
place between VETS and the State JVSG recipients. The commenter stated 
that therefore the annual goal-setting process will be undermined, 
because the States would not know the appropriate performance target to 
set.
    Response: We acknowledge the circumstances cited by the commenter, 
but do not believe that the annual goal-setting negotiations will be 
undermined by the existence of the UNTEER as it was proposed. The 
UNTEER is not intended to be a performance target; rather, it is a 
floor-level benchmark, meant to be used in the annual process of 
assessing the results of the services that were provided during the 
program year. We believe that States and the two DOL agencies involved, 
VETS and ETA, will continue to be able to use historical data, 
including the national EER and individual State EER data, to formulate 
and negotiate reasonable annual performance targets in the future. 
Furthermore, because the UNTEER is derived from the aggregate 
performance of all of the State employment service agencies, DOL 
expects it to be relatively consistent from year to year.
    3. Two commenters said that VETS needs to clarify how the proposed 
UNTEER would correlate to other annual negotiated performance measures 
and numerical targets and the processes for putting those annual 
targets in place.
    Response: We agree that VETS and ETA will need to provide some 
clarifying guidance to the States about how the UNTEER does or does not 
affect the annual goal-setting processes for the entered employment 
rate common measures required of all JVSG and Wagner-Peyser grantees. 
This guidance will be disseminated via administrative directives (such 
as Veterans Program Letters by VETS and Training and Employment 
Guidance Letters by ETA) and published by those agencies each year.
    4. Two commenters stated that due to the data reporting system's 
lag time, under the NPRM, there would be no less than a two-year hiatus 
between the performance year after which a State may be required to 
have a Corrective Action Plan (CAP) and the completion of the CAP 
itself, and that the lack of immediacy of the CAP remedy could be 
problematic. One of those commenters suggested that any State found 
deficient and subject to a CAP should therefore be exempt from the 
annual review for EER deficiency during the hiatus, until the CAP is 
completed. The other commenter questioned how the two-year time lag 
would impact the annual performance negotiations if a State was under a 
CAP.
    Response: We have not made any changes to the Rule in response to 
these comments. While there will be lag time between the program year 
that gives rise to a CAP and the completion of the CAP, we believe that 
any challenges inherent in the proposed cycle of reviews, CAP 
development and imposition, and later determinations of the success of 
subject agencies in resolving their deficiencies can and will be 
overcome by good faith efforts of the grantor agencies and the State 
agencies in behalf of veterans. The review that follows a determination 
that a State failed to meet the UNTEER essentially will focus on 
whether or not the statistical performance was due to internal policy 
or operational flaws that may be correctable, or instead was due to 
economic and other external variables beyond a State's control. In the 
latter case, no CAP would be called for. The Department's view is that 
every situation that requires a Corrective Action Plan is unique, and 
therefore every CAP will be unique. Although unique in content, each 
CAP would include a diagnosis section that outlines the unique, 
specific State agency internal policy and/or operational flaws that 
existed in the subject performance year, and a plan section that 
outlines the specific corrective actions, with timetables, to remedy 
those flaws. It is likely that some corrective actions in each CAP may 
take place during the period while the CAP is being developed, or at 
various times during the period while the approved CAP is in place, and 
thus the lag time between diagnosis and remedy would be reduced from 
the two-year time frame cited by the commenter for discrete parts of 
the corrective actions.
    As for the proposed exemption from the annual reviews to determine 
whether or not a CAP should be required, we do not intend to exempt any 
State from the reviews. However, should a State agency that is already 
under a CAP fail again to attain the UNTEER our review will take into 
consideration the relevant facts including progress toward the goals in 
the CAP, and we will react appropriately. Later actions could include 
continuation of all portions of the original CAP, or modification of 
the existing CAP, or creation of an entirely new CAP. Each case would 
be unique.
    5. One commenter proposed that the first year of application of the 
proposed UNTEER and subsequent deficiency reviews be a ``hold 
harmless'' year, in which the results would be computed but no remedial 
action would be required of any State agency, in order to establish a 
baseline for the UNTEER.
    Response: We see no need for a ``hold harmless'' period. The 
databases in

[[Page 15287]]

which the individual States' entered employment rates reside and from 
which the UNTEER is calculated are mature, and the data sets are 
considered valid and reliable. In formulating the proposed UNTEER, we 
used these databases to predict the results of applying the UNTEER 
measure and found that applying the UNTEER as proposed will not lead to 
any extreme results. While it is true that the incorporation of the new 
definition of veteran into the system will have some impact on the 
veterans data, the change is expected to have only a minor impact, not 
significant enough to de-stabilize or invalidate the databases.
    6. Another commenter stated that the NPRM's allowance of a two-year 
delay for developing a data system to capture data on the less 
restrictive definition of ``veteran'' (as it is defined for purposes of 
priority of service) will likely cause confusion for program staff 
since certain veterans will count as veterans for one purpose 
(preference in job referrals), but not for the Federal entered 
employment performance measure until two years from now.
    Response: We have made no changes to the Final Rule in response to 
this comment. We realize that at the service delivery level, there may 
be some program linkage problems due to the fact that Federal laws do 
not provide a uniform definition of the persons who are considered to 
be ``veterans'' for all employment and training related programs. Even 
when the less restrictive definition of ``veteran'' begins to apply for 
purposes of this Rule and for the Priority of Service requirements, 
States must continue to also collect data using the more restrictive 
definition of ``eligible veteran'' to fulfill the reporting 
requirements under 38 U.S.C. chapter 41. That issue can only be 
resolved by legislative changes. The reason for the two year time frame 
for the changeover to using the data collected under the new definition 
is to ensure that those data are accurate and reliable before applying 
them in the annual review process.
    7. Two commenters addressed the status of the ETA/VETS data 
collection and data reporting systems, both encouraging ETA and VETS to 
collaborate to make changes necessary to incorporate the new definition 
of veteran into the data collection and reporting systems. One of the 
two commenters also asked if the Department would provide funding 
support to the States for the changes that have to be made.
    Response: VETS and ETA are collaborating on the data systems 
changes. States will be able to use Federal grant funds to pay for 
their costs of implementing the data systems changes.
    8. One commenter stated that the potential impact of the proposed 
UNTEER would be greater on States with larger veteran populations. To 
mitigate this disparate impact, the commenter proposed that the numbers 
of certain categories of hard-to-serve veterans (e.g., incarcerated and 
homeless veterans) not be included in the entered employment rate 
calculations that will be done following implementation of the UNTEER 
and related deficiency review processes outlined in this Rule.
    Response: We reject removal of any category of veterans or covered 
persons from the EER calculations performed under this Rule. There is 
no support in VETS' governing statutes for such exclusion, and no 
precedent for doing so. The Final Rule retains the single UNTEER to be 
applicable to evaluating the performance of States' provision of 
services to all veterans and covered persons in the State. However, we 
will evaluate State-specific factors during a review for deficiency 
under Sec.  1001.166(b)(1) of this Rule.
    9. One commenter proposed that the threshold be lowered from the 
proposed 90 percent of the national EER to 80 percent of the national 
EER, in order ``to standardize reporting'' with the Wagner-Peyser and 
WIA programs.
    Response: The Uniform National Threshold Entered Employment Rate is 
not intended to be viewed or used as the annual ``goal'' or ``target'' 
entered employment rate for any individual State. The UNTEER does not 
serve the same purpose as the ETA and the VETS agencies' EER goal-
setting processes conducted annually with the State agencies, so there 
is no reason to make the percentages equal. We expect that State 
agencies in the future will continue to participate with VETS and ETA 
in negotiating performance goals based primarily on each State agency's 
history of performance and economic forecasts for the target year(s), 
and additionally, for veterans, the assumption that delivering priority 
of service will result in better outcomes for veterans.
    10. Three commenters disagreed with the proposal to use the 
national EER for veterans as a benchmark embedded into the UNTEER 
formula, and suggested instead to use some methodology that would be 
more specific to the circumstances of each State, such as comparing 
performance to aggregated data derived from certain groupings (e.g., by 
size or by other attributes) of State agencies rather than to the 
national EER. The comments state that any process for determining 
whether or not a State agency's performance is deficient needs to take 
into consideration the specific circumstances of state and local 
economies and customers' needs.
    Response: We agree that we must take into consideration pertinent 
information regarding unique circumstances related to any State 
agency's performance before making a determination that the State 
agency is deficient and must take corrective action on behalf of 
veterans. However, we disagree that the method of calculating the 
UNTEER must attempt to incorporate the multitude of factors that make 
each State agency unique. There are far too many unique factors among 
the State agencies affected by this regulation to quantify and 
integrate into a viable threshold formula. The Final Rule takes into 
account the unique factors related to a State agency's performance 
during the review process that will take place for every State that 
fails to attain the simple uniform national threshold, as described at 
Sec.  1001.166(b).
    We formulated and tested many methodologies for the UNTEER that 
attempted to create a UNTEER along the lines suggested by these 
commenters. All were found to be seriously flawed in some way or 
another. For example, one commenter proposed revising the threshold 
calculation and subsequent deficiency determination process by dividing 
the States into three groups, Small, Medium, and Large (decided by the 
number of veteran participants in the State), then calculating at the 
end of each program year the EER collectively achieved by each of those 
three groups of State agencies. The resultant three group EERs would 
serve as the ``uniform national EER for veterans'' to identify the 
agencies within each group that would be reviewed.
    However, we determined that the concept of lumping States together 
by that criterion, or by any other single criterion or group of 
criteria (e.g., geographic size, geographic region, number of 
independent Workforce Investment Boards, etc) and then creating several 
aggregate numerical benchmarks to serve as the threshold is as subject 
to criticism about the comparability or non-comparability of the 
subject agencies as is the more simple national UNTEER that is being 
adopted in this Final Rule. Also, 38 U.S.C. 4102A(c)(3)(B) calls for a 
uniform national threshold, so a methodology that effectively creates 
multiple different numerical thresholds in any given year is 
problematic in that respect.

[[Page 15288]]

    We tested other methods of calculating unique ``threshold'' EERs 
for each State agency, including comparisons of year-to-year 
performance. One method divided the State agencies into two groups 
based on comparing each State's EER to the national EER. The method 
then compared the State agencies' year-to-year performance, further 
dividing State agencies into two groups based on comparing the State's 
subject year performance to the average of the State's previous three 
years' EERs. Another method compared each agency's performance 
percentage of change from the previous year to the national percentage 
of change from the previous year. However, there are serious flaws in 
each of those relatively complicated methodologies. The empirical 
results of testing of each formula with the available, complete State 
agency data, i.e., from program years 2005 through 2009, showed that 
those formulae failed to produce reasonable results during periods of 
sharp economic change such as was experienced in 2008 and 2009.
    We have chosen to implement 38 U.S.C. 4102A(c)(3)(B) by 
establishing a floor-level EER for veterans below which a State 
agency's performance will be subject to a Departmental review to 
determine whether that State should be required to take corrective 
action to improve its operations on behalf of veterans. We believe that 
a simple UNTEER methodology directly related to the aggregate national 
workforce services delivery system's actual achievement level is a 
reasonable and understandable measure that satisfies the legislation's 
requirement for a single measure intended to identify State agencies 
potentially in need of corrective action on behalf of veterans.
    We also favor the relatively simple to understand UNTEER in this 
Final Rule because its simplicity lowers the potential for confusion 
and conflict with the annual program goal-setting processes carried on 
by both VETS and ETA with the States.
    11. The same commenter who recommended creating the three group 
threshold approach discussed above also recommended changing the Final 
Rule to attach JVSG funding triggers to the results of the comparisons 
of the States' EERs to the threshold EER. The commenter proposed that 
any State agency that failed to attain the threshold number would 
automatically lose 1-3 percent of its JVSG funding, and those States 
that exceeded the number would automatically gain an additional 1-3 
percent of JVSG funding. The commenter argued that this Rule should not 
only focus on corrective action for under-performing State agencies, it 
should also provide tangible recognition and rewards for higher 
performing State agencies.
    Response: We think that this suggestion goes far beyond what the 
JVA law intended or authorizes. Section 4102A(c)(3) requires that after 
a determination that takes into consideration internal and external 
factors that affect performance, State agencies found to be deficient 
for the preceding program year must engage in corrective action in 
order to receive the next-due JVS grant. The statute does not require 
or authorize the Department to adjust grant funding levels simply on 
the basis of attainment or non-attainment of the threshold number.
    12. Two commenters said that more explanation needs to be given 
regarding the reviews that would be done by VETS following a finding 
that a State agency's EER is deficient in relation to the UNTEER. One 
asked specifically if there is, or will be, a model for analyzing the 
economic data during the review to determine whether or not a 
Corrective Action Plan is required. One asked if the impact of the new, 
broader definition of veteran will be considered. One asked if 
distinctions would be made between the EER for veterans and the 
disabled veterans' EER, and how VETS would consider veterans who 
require intensive services. One also asked if additional reporting 
burdens will be imposed by the review process.
    Response: We agree that we should provide to the State agencies 
more information regarding the review content and process, but not in 
federal regulations. We think that the details of the review process 
and content is best left to VETS, the DOL agency that will make the 
final determination, after consultation with ETA, whether or not a CAP 
should be imposed. Administrative details will be provided through the 
issuance of program guidance letters. The Rule gives wide latitude for 
any State that is subject to the review to provide information about 
its policies, operations, and performance level, but does not prescribe 
any additional reporting requirements.

Changes From the NPRM

    For this Final Rule, we have mainly adopted the text as proposed in 
the NPRM. We made minor editorial changes to the text of section 
1001.160, and the regulatory text now uses the acronym UNTEER to 
reference the Uniform National Threshold EER. We also made minor 
additions to the text of section 1001.166 to acknowledge that we will 
consult with ETA during the evaluation described in that section. 
Because section 1001.166 involves evaluating a State's employment 
service delivery system, which includes the Wagner-Peyser program that 
is administered by ETA, it is appropriate that VETS consider ETA's 
input during the review process.

III. Administrative Information

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

    The Regulatory Flexibility Act (RFA), 5 U.S.C. Chapter 6, requires 
the Department to evaluate the economic impact of this Rule with regard 
to small entities. The RFA defines small entities to include small 
businesses, small organizations including not-for-profit organizations, 
and small governmental jurisdictions. We have determined, and have 
certified to the Chief Counsel for Advocacy, Small Business 
Administration, that this Rule does not impose a significant economic 
impact on a substantial number of such small entities, because this 
Rule would directly impact only States and the definition of small 
entities does not include States.

Executive Orders 12866 and 13563

    Executive Orders (E.O.) 13563 and 12866 direct agencies to assess 
all costs and benefits of a rule and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity).
    Executive Order 12866 requires that for each regulatory action we 
propose, we must conduct an assessment of the proposed regulatory 
action to determine whether the action is ``significant'' before 
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, and/or an action that raises a novel 
legal or policy issue. This Rule will not have an annual effect on the 
economy of $100 million or more, and it does not raise novel legal or 
policy issues. Therefore, the Office of Management and Budget has 
designated this Final Rule as ``not significant'' under E.O. 12866.
    E.O. 13563, issued after publication of the NPRM, directs agencies 
to identify, to the extent possible, the necessity of the regulation as 
well as the costs and benefits of the regulation.
    Through the Jobs for Veterans State Grants program, VETS provides 
funding

[[Page 15289]]

to States to support Disabled Veterans Outreach Program specialists and 
Local Veterans Employment Representatives in each State. These 
individuals provide employment services to veterans and eligible 
military spouses. Under 38 U.S.C. 4102A(c)(3)(A)(i), for a State to 
receive JVSG funding for a program year, if VETS determines that the 
State's entered-employment rate (EER) for veterans is deficient for the 
preceding program year, the State must develop a corrective action plan 
(CAP) to improve the EER for veterans in the State. Section 
4102A(c)(3)(B) of title 38 requires VETS to ``establish in regulations 
a uniform national threshold entered-employment rate for veterans for a 
program year by which [these] determinations of deficiency may be 
made.'' This Final Rule establishes a uniform national threshold, and 
explains how VETS will use the uniform national threshold in its review 
of States to determine whether an EER below the threshold reflects a 
deficiency in the State's performance. The Rule also explains the 
procedure for the submission and review of a CAP. This regulation is 
necessary for VETS to fulfill its statutory obligations to establish 
the uniform national threshold and to conduct reviews for deficiency 
under the JVSG program.
    The costs of this Rule are minimal. VETS will calculate the uniform 
national threshold and will determine how a State's EER for veterans 
compares to the threshold using the data that VETS already routinely 
collects from States as part of the JVSG program. The Rule does not 
impose any new data collection requirements. If a State is determined 
deficient and required to submit a CAP, VETS estimates that the costs 
specifically attributable to submitting and implementing the CAP would 
be about one percent of the State's annual JVS grant amount. If a 
State's JVSG funding is not adequate to cover the cost of developing 
and implementing a CAP, additional funds will be provided through VETS' 
routine reallocation procedure, which requires no additional 
appropriation and thus would have no net cost.
    The benefits of this Rule far outweigh its minimal costs. By 
fulfilling VETS' statutory obligations to establish the uniform 
national threshold and conduct reviews for deficiency, the Rule will 
add another measure of accountability to the JVSG program. This will 
help ensure that veterans and eligible spouses are provided a maximum 
of employment and training opportunities, consistent with the purpose 
of VETS as stated in 38 U.S.C. 4102. Furthermore, this Rule provides 
States the necessary guidance on the procedure that VETS will follow 
when reviewing the States for deficiency, and the procedure that States 
must follow in submitting and implementing a CAP. The Rule also 
outlines how VETS will provide technical assistance to States that must 
develop and implement a CAP. These procedures will have the benefit of 
facilitating and improving States' employment services to veterans and 
eligible spouses under the JVSG program.

Paperwork Reduction Act

    The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 
U.S.C. 3501 et seq., include minimizing 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. This Rule will not 
require new or additional information collections, as defined in the 
Act, from the affected entities. We have determined that a State's 
obligation to develop and submit a CAP for approval does not qualify as 
a collection of information, as defined by 5 CFR 1320.3(c), because 
after receiving a determination of deficiency from VETS that excludes 
the systemic factors beyond the State's control, the State is required 
to develop and submit a CAP based on a self-diagnosis and prescription 
that addresses the unique set of deficiencies embodied in that State's 
policies and procedures. Therefore, a CAP does not qualify as a 
''collection of information'' under 5 CFR 1320.3(c), because it does 
not result from identical questions nor is the content across multiple 
CAPs in any way identical. In addition, a CAP does not qualify as 
''information'' under 5 CFR 1320.3(h) because the individuality of the 
information provided in each State's CAP is consistent with a response 
to a ''request for facts or opinions addressed to a single person,'' 
which is excluded under 5 CFR 1320.3(h)(6).
    Current reporting systems and requirements are not changed by this 
Rule. Therefore, this Rule does not impose on the State employment 
service delivery systems any new information collection that would 
require approval under the PRA.

Executive Order 13132

    The Department reviewed this Rule in accordance with Executive 
Order 13132 regarding federalism and determined that it does not have 
''federalism implications.'' This Rule does not ''have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' This Rule 
implements the uniform national threshold EER for veterans and eligible 
persons applicable to State employment service delivery systems. This 
Rule does nothing to alter either the relationship between the national 
government and the States, or the distribution of power and 
responsibilities among the various levels of government. Accordingly, 
this Rule does not have ''federalism implications.''

Unfunded Mandates Reform Act of 1995

    For purposes of the Unfunded Mandates Reform Act (UMRA) of 1995, 
this Rule does not include any Federal mandate that may result in 
increased expenditures by State, local and Tribal governments, or by 
the private sector. As this Rule does not impose any unfunded Federal 
mandate, the UMRA is not implicated. As explained above, current 
reporting requirements on the States are not changed by this Rule. The 
Labor Exchange Reporting System (LERS) produces program year EER 
results for 52 of the 54 reporting employment service delivery systems 
and calculates the first step toward a national EER, based on inclusion 
of those 52 reporting units. For each program year, VETS will 
supplement the results available from the LERS by: (a) Incorporating 
the program year EER results for the two States that are piloting a 
separate reporting system; and, (b) calculating the uniform national 
threshold EER based on inclusion of the results for all 54 reporting 
units. Therefore, this Rule does not impose any new reporting or 
calculation requirement upon the State employment service delivery 
systems. Some States may be required to institute corrective action 
plans under this Rule. However, such CAPs are required by statute. 
Moreover, the Department provides grant funds for the administration of 
the JVSG program which may be used for any costs associated with the 
imposition of a CAP.

Executive Order 13045

    Executive Order 13045 concerns the protection of children from 
environmental health risks and safety risks. This Rule implements the 
uniform national threshold EER for veterans and eligible persons 
applicable to State employment service delivery systems funded by the 
Department. This Rule

[[Page 15290]]

has no impact on safety or health risks to children.

Executive Order 13175

    Executive Order 13175 addresses the unique relationship between the 
Federal Government and Indian Tribal governments. The order requires 
Federal agencies to take certain actions when regulations have ``Tribal 
implications.'' 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. We have reviewed this 
Rule and concluded that it does not have Tribal implications for 
purposes of Executive Order 13175, as it does nothing to affect either 
the relationship or the distribution of power and responsibilities 
between the Federal Government and Indian Tribes.

Environmental Impact Assessment

    We have reviewed this 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 
Rule will not have a significant impact on the quality of the human 
environment, and thus we have not prepared an environmental assessment 
or an environmental impact statement.

Assessment of Federal Regulations and Policies on Families

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

Privacy Act

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

Executive Order 12630

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

Executive Order 12988

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

Executive Order 13211

    This 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.

Plain Language

    We drafted this Rule in plain language.

Catalog of Federal Domestic Assistance Number

    State employment service delivery systems consist of three formula 
grant programs, operating within an integrated service delivery 
infrastructure. Each of these three programs has been assigned a 
Catalog of Federal Domestic Assistance (CFDA) Number. The three 
programs are the Employment Service/Wagner-Peyser Funded Activities 
(CFDA 17.207), the Disabled Veterans' Outreach Program (CFDA 17.801), 
and the Local Veterans' Employment Representative Program (CFDA 
17.804).

List of Subjects in 20 CFR Part 1001

    Employment, Grant programs--Labor, Veterans.

    For reasons stated in the preamble, 20 CFR Chapter IX is amended as 
follows:

PART 1001--SERVICES FOR VETERANS

0
1. The authority citation for part 1001 continues to read as follows:

    Authority:  29 U.S.C. 49k; 38 U.S.C. chapters 41 and 42.


0
2. Add subpart G, consisting of Sec. Sec.  1001.160 through 1001.167, 
to read as follows:
Subpart G--Purpose and Definitions
Sec.
1001.160 What is the purpose and scope of this part?
1001.161 What definitions apply to this part?
1001.162 How does the Department define veteran for purposes of this 
subpart?
1001.163 What is the national entered employment rate (EER) and what 
is a State's program year EER for purposes of this part?
1001.164 What is the uniform national threshold EER, and how will it 
be calculated?
1001.165 When will the uniform national threshold EER be published?
1001.166 How will the uniform national threshold EER be used to 
evaluate whether a State will be required to submit a Corrective 
Action Plan (CAP)?
1001.167 In addition to the procedures specified in this part, will 
the Department be conducting any other monitoring of compliance 
regarding services to veterans?

Subpart G--Purpose and Definitions


Sec.  1001.160  What is the purpose and scope of this part?

    (a) The purpose of this part is to fulfill the requirement of 38 
U.S.C. 4102A(c)(3)(B) to establish a uniform national threshold entered 
employment rate (UNTEER) achieved for veterans and eligible persons by 
the State employment service delivery systems. We will use the UNTEER 
as part of the review process for determining whether a State's program 
year EER is deficient and a Corrective Action Plan (CAP) is required of 
that State employment service delivery system.
    (b) This part is applicable to all State agencies that are 
recipients of Wagner-Peyser State Grants, and/or Jobs for Veterans 
State Grants.


Sec.  1001.161  What definitions apply to this part?

    Department means the United States Department of Labor, including 
its agencies and organizational units and their representatives.
    Eligible person, as defined at 38 U.S.C. 4101(5), means:
    (1) The spouse of any person who died of a service-connected 
disability;
    (2) The spouse of any member of the Armed Forces serving on active 
duty who, at the time of application for assistance under this chapter, 
is listed, pursuant to 37 U.S.C. 556 and regulations issued thereunder 
by the Secretary concerned, in one or more of the following categories 
and has been so listed for a total of more than ninety days:
    (i) Missing in action,
    (ii) Captured in line of duty by a hostile force, or

[[Page 15291]]

    (iii) Forcibly detained or interned in line of duty by a foreign 
government or power; or
    (3) The spouse of any person who has a total disability permanent 
in nature resulting from a service-connected disability or the spouse 
of a veteran who died while a disability so evaluated was in existence.
    Employment service delivery system, as defined at 38 U.S.C. 
4101(7), means a service delivery system at which or through which 
labor exchange services, including employment, training, and placement 
services, are offered in accordance with the Wagner-Peyser Act.
    Jobs for Veterans Act (JVA) means Public Law 107-288, 116 Stat. 
2033 (2002), codified at 38 U.S.C. chapters 41 and 42.
    Jobs for Veterans State Grant (JVSG) means an award of Federal 
financial assistance by the Department to a State for the purposes of 
the Disabled Veterans' Outreach Program or the Local Veterans' 
Employment Representative Program.
    Program year is the period from July 1 of a year through June 30 of 
the following year and is numbered according to the calendar year in 
which it begins.


Sec.  1001.162  How does the Department define veteran for purposes of 
this subpart?

    The Department applies two definitions of veteran for the purposes 
of this subpart and has established two stages for the implementation 
of these definitions.
    (a) The first stage of implementation begins with application of 
this subpart G to the first program year following May 10, 2013. As of 
that date, veteran is defined as it is in 38 U.S.C. 4211(4), as a 
person who:
    (1) Served on active duty for a period of more than 180 days and 
was discharged or released therefrom with other than a dishonorable 
discharge;
    (2) Was discharged or released from active duty because of a 
service-connected disability;
    (3) As a member of a reserve component under an order to active 
duty pursuant to 10 U.S.C. 12301(a), (d), or (g), 12302, or 12304, 
served on active duty during a period of war or in a campaign or 
expedition for which a campaign badge is authorized and was discharged 
or released from such duty with other than a dishonorable discharge; or
    (4) Was discharged or released from active duty by reason of a sole 
survivorship discharge (as that term is defined in 10 U.S.C.1174(i)).
    (b) The second stage of implementation begins with the first day of 
the program year that begins two years after the first day of the 
program year that State grantees begin collecting and maintaining data 
as required by 20 CFR 1010.330(c). As of that date, veteran will be 
defined as it is in 20 CFR 1010.110:
    (1) A person who served in the active military, naval, or air 
service, and who was discharged or released there from under conditions 
other than dishonorable, as specified in 38 U.S.C. 101(2).
    (2) Active service includes full-time Federal service in the 
National Guard or a Reserve component, other than full-time duty for 
training purposes.
    (c) During the second stage of implementation, any veteran who 
meets the definition specified in paragraph (a) of this section will be 
considered to meet the definition specified in paragraph (b) of this 
section.
    (d) We will notify State grantees when they are required to begin 
implementing 20 CFR 1010.330(c).


Sec.  1001.163  What is the national entered employment rate (EER) and 
what is a State's program year EER for purposes of this part?

    (a) For purposes of this part, we use the EER for veterans and 
eligible persons. This is the EER as applied to veterans (as defined in 
Sec.  1001.162) and eligible persons (as defined in Sec.  1001.161) who 
are participants in State employment service delivery systems.
    (b) The EER for veterans and eligible persons measures the number 
of the participants described in paragraph (a) of this section who are 
employed after exiting an employment service delivery system compared 
to the total number of those participants who exited. We will issue 
policy guidance to establish the method of calculating the EER.
    (c) The national EER for veterans and eligible persons is the EER 
achieved by the national State employment service delivery system for 
those veterans and eligible persons who are participants in all of the 
State employment service delivery systems for the program year under 
review. The national EER resulting from this calculation is expressed 
as a percentage that is rounded to the nearest tenth of a percent.
    (d) A State's program year EER is the EER for veterans and eligible 
persons (as calculated in paragraph (b) of this section) achieved by a 
single State's employment service delivery system for those veterans 
and eligible persons who are included in the EER measure for that 
State's employment service delivery system for the program year under 
review. The program year EER resulting from this calculation is 
expressed as a percentage that is rounded to the nearest tenth of a 
percent.


Sec.  1001.164  What is the uniform national threshold EER, and how 
will it be calculated?

    (a) The uniform national threshold EER for a program year is equal 
to 90 percent of the national EER for veterans and eligible persons (as 
defined in Sec.  1001.163(c)).
    (b) The uniform national threshold EER resulting from this 
calculation is expressed as a percentage that is rounded to the nearest 
tenth of a percent.


Sec.  1001.165  When will the uniform national threshold EER be 
published?

    When practicable, the Veterans' Employment and Training Service 
(VETS) will publish the uniform national threshold EER for a given 
program year by the end of December of the calendar year in which that 
program year ends.


Sec.  1001.166  How will the uniform national threshold EER be used to 
evaluate whether a State will be required to submit a Corrective Action 
Plan (CAP)?

    (a) Comparison. Each State's program year EER will be compared to 
the uniform national threshold EER for that program year. State 
agencies that do not achieve a program year EER that equals or exceeds 
the uniform national threshold EER (90 percent of the national EER) for 
the year under review will be subject to a review by VETS, with input 
from the Employment and Training Administration (ETA), to determine 
whether the program year EER is deficient.
    (b) Review. For each State whose program year EER is subject to 
review to determine deficiency, the review will consider the degree of 
difference between the State's program year EER and the uniform 
national threshold EER for that program year, as well as the annual 
unemployment data for the State as compiled by the Bureau of Labor 
Statistics.
    (1) The review also may consider other relevant measures of 
prevailing economic conditions and regional economic conditions, as 
well as other measures of the performance of workforce programs and/or 
any information the State may submit.
    (2) The review will include consultation with VETS and ETA field 
staff about findings from their on-site reviews and desk audits of 
State agency implementation of policies and procedures for services to 
veterans and also may include consultation with staff

[[Page 15292]]

affiliated with other agencies of the Department, as appropriate.
    (c) Requirement of a CAP. After review, a State whose program year 
EER is determined not to be deficient will be notified that a CAP will 
not be required; a State whose program year EER is determined to be 
deficient will be required to submit a CAP to improve the State's 
performance in assisting veterans to meet their employment needs as a 
condition of receiving its next-due JVSG.
    (1) Any State whose program year EER has been determined to be 
deficient will be notified by March 31 of the year following the 
calendar year in which the program year under review ended.
    (2) For any State that is required to submit a CAP, VETS will 
provide technical assistance (TA), with input from ETA, on the 
development of the CAP. The CAP must be submitted to the Grant 
Officer's Technical Representative by June 30 of the year following the 
calendar year in which the program year under review ended.
    (3) We will review the CAP submitted by the State and determine, 
with input from ETA, whether to approve it or to provide additional TA 
to the State.
    (i) If we approve the CAP, the State must expeditiously implement 
it.
    (ii) If we do not approve the CAP, we will take such steps as are 
necessary to implement corrective actions to improve the State's EER 
for veterans and eligible persons.
    (4) If a State fails to take the actions we impose under paragraph 
(c)(3)(ii) of this section, the Assistant Secretary for Veterans' 
Employment and Training may take any actions available to remedy non-
compliance under 20 CFR 1001.130(a) (referring to the compliance 
measures discussed in 20 CFR part 658, subpart H).


Sec.  1001.167  In addition to the procedures specified in this part, 
will the Department be conducting any other monitoring of compliance 
regarding services to veterans?

    Yes. We will continue to monitor compliance with the regulations on 
veterans' priority of service at 20 CFR 1010.240(b) jointly with the 
ETA. If a State's program year EER is determined to be deficient for a 
given program year, that deficiency would constitute information to be 
considered in monitoring priority of service, since failure to fully 
implement priority of service could be one of the contributors to a 
deficient program year EER.

Keith Kelly,
Assistant Secretary, Veterans' Employment and Training.
[FR Doc. 2013-05345 Filed 3-8-13; 8:45 am]
BILLING CODE 4510-79-P