[Federal Register Volume 80, Number 73 (Thursday, April 16, 2015)]
[Proposed Rules]
[Pages 20690-20966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-05530]



[[Page 20689]]

Vol. 80

Thursday,

No. 73

April 16, 2015

Part III





 Department of Labor





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Employment and Training Administration





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20 CFR Parts 601, 651, 652 et al.





 Workforce Innovation and Opportunity Act; Notice of Proposed 
Rulemaking; Proposed Rules

Federal Register / Vol. 80 , No. 73 / Thursday, April 16, 2015 / 
Proposed Rules

[[Page 20690]]


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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Parts 603, 651, 652, 653, 654, 658, 675, 679, 680, 681, 682, 
683, 684, 685, 686, 687, and 688

[Docket No. ETA-2015-0001]
RIN 1205-AB73


Workforce Innovation and Opportunity Act; Notice of Proposed 
Rulemaking

AGENCY: Employment and Training Administration (ETA), Labor.

ACTION: Notice of Proposed Rulemaking (NPRM).

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SUMMARY: The Department of Labor (DOL) is proposing, through 
rulemaking, to implement titles I and III of the Workforce Innovation 
and Opportunity Act of 2014 (WIOA). Through these regulations, the 
Department proposes to implement job training system reform and 
strengthen the workforce investment system of the nation to put 
Americans, particularly those individuals with barriers to employment, 
back to work and make the United States more competitive in the 21st 
Century. This proposed rule intends to provide guidance for statewide 
and local workforce investment systems that increase the employment, 
retention and earnings of participants, and increase occupational skill 
attainment by participants, and as a result, improve the quality of the 
workforce, reduce welfare dependency, and enhance the productivity and 
competitiveness of the nation.

DATES: To be ensured consideration, comments must be submitted in 
writing on or before June 15, 2015.

ADDRESSES: You may submit comments, identified by docket number ETA-
2015-0001, for Regulatory Information Number (RIN) 1205-AB73, by 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 Adele Gagliardi, Administrator, Office of 
Policy Development and Research, U.S. Department of Labor, 200 
Constitution Avenue NW., Room N-5641, Washington, DC 20210.
    Instructions: Label all submissions with ``RIN 1205-AB73.''
    Please submit your comments by only one method. Please be advised 
that the Department will post all comments received that related to 
this NPRM 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 remove personal 
information such as Social Security Numbers (SSNs), personal addresses, 
telephone numbers, and email 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 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-
AB73. 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 appropriate aids such as readers 
or print magnifiers. The Department will make copies of this proposed 
rule available, upon request, in large print and electronic file on 
computer disk. To schedule an appointment to review the comments and/or 
obtain the proposed rule in an alternative format, contact the Office 
of Policy Development and Research (OPDR) at (202) 693-3700 (this is 
not a toll-free number). You may also contact this office at the 
address listed below.
    Comments under the Paperwork Reduction Act (PRA): In addition to 
filing comments with ETA, persons wishing to comment on the information 
collection (IC) aspects of this rule may send comments to: Office of 
Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-ETA, 
Office of Management and Budget, Room 10235, 725 17th Street NW., 
Washington, DC 20503, Fax: 202-395-6881 (this is not a toll-free 
number), email: [email protected].

FOR FURTHER INFORMATION CONTACT: Adele Gagliardi, Administrator, Office 
of Policy Development and Research (OPDR), U.S. Department of Labor, 
Employment and Training Administration, 200 Constitution Avenue NW., 
Room N-5641, Washington, DC 20210, Telephone: (202) 693-3700 (voice) 
(this is not a toll-free number) or 1-800-326-2577 (TDD).

SUPPLEMENTARY INFORMATION: 

Preamble Table of Contents

I. Executive Summary
II. Acronyms and Abbreviations
III. Background
    A. Workforce Innovation and Opportunity Act Principles
    B. Major Changes From Current Workforce Investment Act of 1998
    C. Rule Format
    D. Legal Basis
IV. Section-by-Section Discussion of Proposal
    A. Part 603--Federal-State Unemployment Compensation Program
    B. Part 675--Introduction to the Regulations for the Workforce 
Innovation and Opportunity Systems Under Title I of the Workforce 
Innovation and Act
    C. Part 679--Statewide and Local Governance of the Workforce 
Innovation and Opportunity System Under Title I of the Workforce 
Innovation and Opportunity Act
    D. Part 680--Adult and Dislocated Worker Activities Under Title 
I of the Workforce Innovation and Opportunity Act
    E. Part 681--Youth Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    F. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    G. Part 683--Administrative Provisions Under Title I of the 
Workforce Innovation and Opportunity Act
    H. Part 684--Indian and Native American Programs Under Title I 
of the Workforce Innovation and Opportunity Act
    I. Part 685--National Farmworker Jobs Program Under Title I of 
the Workforce Innovation and Opportunity Act
    J. Part 686--The Job Corps Under Title I of the Workforce 
Innovation and Opportunity Act
    K. Part 687--National Dislocated Worker Grants
    L. Part 688--Provisions Governing the YouthBuild Program
    M. Part 651--General Provisions Governing the Federal-State 
Employment Service System
    N. Part 652--Establishment and Functioning of State Employment 
Services
    O. Part 653--Services of the Employment Service System
    P. Part 654--Special Responsibilities of the Employment Service 
System
    Q. Part 658--Administrative Provisions Governing the Employment 
Service System
V. Rulemaking Analyses and Notices
    A. Executive Orders 12866 and 13563: Regulatory Planning and 
Review
    B. Paperwork Reduction Act
    C. Executive Order 13132 (Federalism)
    D. Unfunded Mandates Reform Act of 1995
    E. Plain Language
    F. Assessment of Federal Regulations and Policies on Families
    G. Regulatory Flexibility Act

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    H. Small Business Regulatory Enforcement Fairness Act of 1996
    I. Executive Order 13175 (Indian Tribal Governments)
    J. Executive Order 12630 (Government Actions and Interference 
With Constitutionally Protected Property Rights)
    K. Executive Order 12988 (Civil Justice Reform)
    L. Executive Order 13211 (Energy Supply)

I. Executive Summary

    On July 22, 2014, President Obama signed the Workforce Innovation 
and Opportunity Act (WIOA) (Pub. L. 113-128), comprehensive legislation 
that reforms and modernizes the public workforce system. It reaffirms 
the role of the public workforce system, and brings together and 
enhances several key employment, education, and training programs. WIOA 
provides resources, services, and leadership tools for the workforce 
system to help individuals find good jobs and stay employed and 
improves employer prospects for success in the global marketplace. It 
ensures that the workforce system operates as a comprehensive, 
integrated and streamlined system to provide pathways to prosperity for 
those it serves and continuously improves the quality and performance 
of its services.
    The Department of Labor is publishing this NPRM to implement those 
provisions of WIOA that affect the core programs under titles I and 
III, and the Job Corps and national programs authorized under title I 
which will administered by the Department. In addition to this NPRM, 
the Departments of Education (ED) and Labor (DOL) are jointly 
publishing an NPRM to implement those provisions of WIOA that affect 
all of the WIOA core programs (titles I-IV) and which will have to be 
jointly overseen and administered by both Departments. Readers should 
note that there are a number of cross-references to the Joint NPRM 
published by ED and DOL, with particular focus on those provisions in 
the Joint NPRM that have to do with performance reporting among all the 
core programs. Finally, this NPRM has been structured so that the 
proposed Code of Federal Regulations (CFR) parts will align with the 
Joint NPRM CFR parts in once all of the proposed rules of have been 
finalized.
    WIOA seeks to deliver a broad array of integrated services to 
individuals seeking jobs and skills training, as well as employers 
seeking skilled workers by improving the workforce system, more closely 
aligning it with regional economies and strengthening the network of 
about 2,500 one-stop centers. Customers must have access to a seamless 
system of high-quality services through coordination of programs, 
services and governance structures. The Act builds closer ties among 
key workforce partners--business leaders, workforce boards, labor 
unions, community colleges, non-profit organizations, youth-serving 
organizations, and State and local officials--in striving for a more 
job-driven approach to training and skills development.
    WIOA will help job seekers and workers access employment, 
education, training, and support services to succeed in the labor 
market and match employers with the skilled workers they need to 
compete in the global economy. The purposes of WIOA described in the 
Act include:
     Increasing access to and opportunities for the employment, 
education, training, and support services that individuals need, 
particularly those with barriers to employment.
     Supporting the alignment of workforce investment, 
education, and economic development systems, in support of a 
comprehensive, accessible, and high-quality workforce development 
system.
     Improving the quality and labor market relevance of 
workforce investment, education, and economic development efforts.
     Promoting improvement in the structure and delivery of 
services.
     Increasing the prosperity of workers and employers.
     Providing workforce development activities that increase 
employment, retention, and earnings of participants and that increase 
post-secondary credential attainment and as a result, improve the 
quality of the workforce, reduce welfare dependency, increase economic 
self-sufficiency, meet skill requirements of employers, and enhance 
productivity, and competitiveness of the nation.
    WIOA is complemented by the groundwork laid by the Administration-
wide review of employment, education, and training programs to ensure 
Federal agencies do everything possible to prepare ready-to-work-
Americans with ready-to-be-filled jobs. The review identified seven 
priorities for these Federal programs:
     Work up-front with employers to determine local or 
regional hiring needs and design training programs that are responsive 
to those needs;
     Offer work-based learning opportunities with employers--
including on-the-job training, internships, and pre-apprenticeships and 
registered apprenticeships--as training paths to employment;
     Make better use of data to drive accountability, inform 
what programs are offered and what is taught, and offer user-friendly 
information for job seekers to choose what programs and pathways work 
for them and are likely to result in a job;
     Measure and evaluate employment and earnings outcomes;
     Promote a seamless progression from one educational 
stepping stone to another, and across work-based training and 
education, so individuals' efforts result in progress;
     Break down barriers to accessing job-driven training and 
hiring for any American who is willing to work, including access to 
supportive services and relevant guidance; and
     Create regional collaborations among American Job Centers, 
education institutions, labor, and nonprofits.
    As WIOA implementation progresses, success in accomplishing the 
purposes of WIOA at the State, local, and regional levels, will be 
assessed by whether:
     One-stop centers are recognized as a valuable community 
resource and are known for high quality, comprehensive services for 
customers.
     The core programs and one-stop partners provide seamless, 
integrated customer service.
     Program performance, labor market and related data drive 
policy and strategic decisions and inform customer choice.
     Youth programs reconnect out-of-school youth (OSY) to 
education and jobs.
     Job seekers access quality career services either online 
or in a one-stop career center through a ``common front door'' that 
connects them to the right services.
     One-stop centers facilitate access to high quality, 
innovative education and training.
     Services to businesses are robust and effective, meeting 
businesses' workforce needs across the business lifecycle.

II. Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act
ALJ Administrative Law Judge
ANVSA Alaska Native Village Service Area
AOP Agricultural Outreach Plan
ARS Agricultural Recruitment System
AWOL Absent Without Official Leave
BLS Bureau of Labor Statistics
CBO Community-based organization
CCC Civilian Conservation Center
CEO Chief elected official
CFR Code of Federal Regulations
Complaint System Employment Service and Employment-Related Law 
Complaint System

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COSO Committee of Sponsoring Organizations of the Treadway 
Commission
CTT Career Technical Training
DINAP Division of Indian and Native American Programs
DOL Department of Labor
ED Department of Education
E.O. Executive Order
EO Equal opportunity
ES Employment Service
ESA Employment Standards Administration
ESARS Employment Security Automated Reporting System
ETA Employment and Training Administration
ETP Eligible training provider
ETPL Eligible training provider list
FECA Federal Employees Compensation Act
FEIN Federal employer identification number
FEMA Federal Emergency Management Agency
FERPA Family Educational Rights and Privacy Act
FLSA Fair Labor Standards Act
FOA Funding Opportunity Announcement
FR Federal Register
GED General Educational Development
GIS Geographic information system
GPRA Government Performance and Results Act
HEARTH Homeless Emergency Assistance and Rapid Transition to Housing 
Act of 2009
HHS Department of Health and Human Services
HSD High School Diploma
HUD U.S. Department of Housing and Urban Development
IC Information collection
IEVS Income and Eligibility Verification System
INA Indian and Native American
ISDEAA Indian Self-Determination and Education Assistance Act
ISY In-school youth
ITA Individual Training Account
JIS Job Information Service
JS Job Service
JTPA Job Training Partnership Act
JVSG Jobs for Veterans State Grants
LEHD Longitudinal Employer-Household Dynamics
LEP Limited English proficiency
MOU Memorandum of Understanding
MSFW Migrant and Seasonal Farmworker
NAACP National Association for the Advancement of Colored People
NAFTA North American Free Trade Agreement
NAICS North American Industry Classification System
NDWG National Dislocated Worker Grant
NEG National Emergency Grant
NFJP National Farmworker Jobs Program
NICRA Negotiated Indirect Cost Rate Agreement
NPRM Notice of Proposed Rulemaking
OALJ Office of Administrative Law Judges
OBS On-board strength
OFLC Office of Foreign Labor Certification
OJT On-the-job training
OMB Office of Management and Budget
OMS Outcome Measurement System
OPDR Office of Policy Development and Research
OSHA Occupational Safety and Health Administration
OSY Out-of-school youth
OTSA Oklahoma Tribal Service Area
OWI Office of Workforce Investment
PART Program Assessment and Rating Tool
PBP Program Budget Plan
PRA Paperwork Reduction Act of 1995
PRH Policy and Requirements Handbook
Pub. L. Public Law
PY Program year
RFA Regulatory Flexibility Act
RFP Requests for proposals
Richey Order Judge Richey Court Order
RIN Regulatory Information Number
SBA Small Business Administration
SBREFA Small Business Regulatory Enforcement Fairness Act of 1996
SDA Service delivery area
sec. Section of a Public Law or the United States Code
SESA State Employee Security Act
SMA State Monitor Advocate
SOC Standard Occupational Classification
SNAP Supplemental Nutrition Assistance Program
SSA Social Security Act
SSN Social Security Number
State Board State Workforce Development Board
STAWRS Simplified Tax and Wage Reporting System
SWA State Workforce Agency
TAA Trade Adjustment Assistance
TANF Temporary Assistance for Needy Families
TEGL Training and Employment Guidance Letter
TEN Training and Employment Notice
UC Unemployment Compensation
UCX Unemployment Compensation for Ex-service members
UI Unemployment insurance
U.S.C. United States Code
VA Department of Veterans Affairs
VETS Veterans' Employments and Training Service
VR Vocational rehabilitation
Wagner-Peyser Wagner-Peyser Act of 1933
WARN Worker Adjustment and Retraining Notification
WDB Workforce Development Board
WHD Wage and Hour Division
WIA Workforce Investment Act of 1998
WIAC Workforce Information Advisory Council
WIC Workforce Information Council
WIOA Workforce Innovation and Opportunity Act of 2014
WLMI Workforce and Labor Market Information
WLMIS Workforce and Labor Market Information System
WRIS Wage Record Interchange System

III. Background

A. Workforce Innovation and Opportunity Act Principles

    On July 22, 2014, President Obama signed the WIOA, the first 
legislative reform of the public workforce system in more than 15 
years, which passed Congress by a wide bipartisan majority. WIOA 
supersedes the Workforce Investment Act of 1998 (WIA) and amends the 
Adult Education and Family Literacy Act (AEFLA), the Wagner-Peyser Act, 
and the Rehabilitation Act of 1973. WIOA presents an extraordinary 
opportunity for the workforce system to accelerate its transformational 
efforts and demonstrate its ability to improve job and career options 
for our citizens through an integrated, job-driven public workforce 
system that links diverse talent to our nation's businesses. It 
supports the development of strong, vibrant regional economies where 
businesses thrive and people want to live and work.
    WIOA reaffirms the role of the customer-focused one-stop delivery 
system, a cornerstone of the public workforce investment system, and 
enhances and increases coordination among several key employment, 
education, and training programs. Most provisions in WIOA take effect 
on July 1, 2015, the first full program year (PY) after enactment, 
although the new State plans and performance accountability system take 
effect July 1, 2016. Title IV, however, took effect upon enactment.
    WIOA presents an extraordinary opportunity for the workforce system 
to accelerate its transformational efforts and demonstrate its ability 
to improve job and career options for our citizens through an 
integrated, job-driven public workforce system that links diverse 
talent to our nation's businesses. It supports the development of 
strong, vibrant regional economies where businesses thrive and people 
want to live and work.
    WIOA is designed to help job seekers access employment, education, 
training, and support services to succeed in the labor market and to 
match employers with the skilled workers they need to compete in the 
global economy. WIOA has six main purposes: (1) Increasing access to 
and opportunities for the employment, education, training, and support 
services for individuals, particularly those with barriers to 
employment; (2) supporting the alignment of workforce investment, 
education, and economic development systems in support of a 
comprehensive, accessible, and high-quality workforce development 
system; (3) improving the quality and labor market relevance of 
workforce investment, education, and economic development efforts; (4) 
promoting improvement in the structure and delivery of services; (5) 
increasing the prosperity of workers and employers; and (6) providing 
workforce development activities that increase

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employment, retention, and earnings of participants and that increase 
post-secondary credential attainment and as a result, improve the 
quality of the workforce, reduce welfare dependency, increase economic 
self-sufficiency, meet skill requirements of employers, and enhance 
productivity and competitiveness of the nation.
    Beyond achieving the requirements of the new law, WIOA offers an 
opportunity to continue to modernize the workforce system, and achieve 
key hallmarks of a customer centered workforce system, where the needs 
of business and workers drive workforce solutions, where one-stop 
career centers and partners provide excellent customer service to job 
seekers and businesses, where the workforce system pursues continuous 
improvement through evaluation and data-driven policy, and where the 
workforce system supports strong regional economies.
    Regulations and guidance implementing titles I and III are issued 
by DOL, with the exception of joint regulations that will be issued by 
DOL and ED on the provisions in title I relating to unified and 
combined planning, performance, and the one-stop delivery system. 
Regulations and guidance on implementing titles II and IV will be 
issued by ED.
    WIOA retains much of the structure of WIA, but with critical 
changes to advance greater coordination and alignment. Under title I-A, 
each State will be required to develop a single, unified strategic plan 
that is applicable to four core workforce development programs. The 
core programs consist of (1) the adult, dislocated worker, and youth 
formula programs administered by the Department under title I of WIOA; 
(2) the Adult Education and Family Literacy program administered by ED 
under title II of WIOA; (3) the Wagner-Peyser Act employment services 
(ES) program administered by the Department, as amended by title III of 
WIOA; and (4) the vocational rehabilitation (VR) programs under title I 
of the Rehabilitation Act administered by ED, as amended by title IV of 
WIOA. In addition to core programs, WIOA provides States the 
opportunity to include other key one-stop partner programs such as the 
Supplemental Nutrition Assistance Program (SNAP), Unemployment 
Insurance (UI), Temporary Assistance for Needy Families (TANF), and 
Perkins Career Technical Education in a Combined State Plan. The law 
also includes a common performance accountability system applicable to 
all of the core programs.
    The remainder of WIOA title I authorizes the adult, dislocated 
worker, and youth formula programs; the State and local workforce 
development (formerly investment) boards; the designation of regions 
and local areas; local plans; the one-stop system; national programs, 
including Job Corps, YouthBuild, Indian and Native American programs, 
and Migrant and Seasonal Farmworker (MSFW) programs; technical 
assistance and evaluations; and general administrative provisions 
currently authorized under title I of WIA. Title II retains and amends 
the Adult Education and Family Literacy Program currently authorized 
under title II of WIA. Title III contains amendments to the Wagner-
Peyser Act relating to the ES and Workforce and Labor Market 
Information System (WLMIS), and requires the Secretary to establish a 
Workforce Information Advisory Council (WIAC). Title IV contains 
amendments to the Rehabilitation Act of 1973, which were also included 
under title IV of WIA; it also requires the Secretary of Labor to 
establish an Advisory Committee on Increasing Competitive Integrated 
Employment for Individuals with Disabilities. Finally, title V contains 
general provisions similar to the provisions applicable under title V 
of WIA as well as the effective dates and transition provisions.
    Since the enactment of WIOA, the Department has used a variety of 
means to coordinate with other Federal agencies that have roles and 
responsibilities under the Act. The Department works closely with staff 
at ED and the Department of Health and Human Services (HHS) on all 
shared policy and implementation matters. Key areas of collaboration 
include the Unified State Plan, performance reporting, one-stop service 
delivery, and services to disconnected youth and to individuals with 
disabilities. WIOA created an opportunity to enhance coordination and 
collaboration across other Federal programs through the Combined State 
Plan and the Department meets with the other Federal agencies regarding 
those plans.
    Before publishing the NPRM, the Department solicited broad input 
through a variety of mechanisms including:
     Issued Training and Employment Notice (TEN) No. 05-14 to 
notify the public workforce system that WIOA was enacted, accompanied 
by a statutory implementation timeline, a fact sheet that identified 
key reforms to the public workforce system, and a list of frequently 
asked questions.
     Issued TEN No. 06-14 to announce a series of webinars to 
engage WIOA stakeholders in implementation of WIOA.
     Issued TEN No. 12-14 to provide guidance to States and 
other recipients of funds under title I of WIA on the use and reporting 
of PY 2014 funds for planning and implementation activities associated 
with the transition to WIOA.
     Established a WIOA Resource Page (www.doleta.gov/WIOA) to 
provide updated information related to WIOA implementation to the 
public workforce system and stakeholders;
     Established a dedicated email address for the public 
workforce system and stakeholders to ask questions and offer ideas 
related to WIOA ([email protected]);
     Conducted, in conjunction with ED and HHS outreach calls, 
webinars, and stakeholder and in-person town halls in each ETA region. 
The Department and its Federal partners hosted 10 town halls across the 
country, reaching over 2,000 system leaders and staff representing core 
programs and one-stop partners, employers, and performance staff. This 
included a town hall with Indian and Native American leaders and 
membership organizations serving Indians and Native Americans, 
Hawaiians, and Alaskan Natives as well as a formal consultation with 
members of the Native American Employment and Training Advisory Council 
to the Secretary of Labor.
     Conducted readiness assessments to implement WIOA in all 
States and 70 local workforce areas to inform technical assistance.

B. Major Changes From Current Workforce Investment Act of 1998

    This section contains a summary of the major changes from the 
current WIA. As indicated above, WIOA retains much of the structure of 
WIA.
    Major changes in WIOA are:
     Aligns Federal investments to support job seekers and 
employers. The Act provides for States to prepare a single Unified 
State Plan that identifies a 4-year strategy for achieving the 
strategic vision and goals of the State for preparing an educated and 
skilled workforce and for meeting the skilled workforce needs of 
employers. States govern the core programs as one system assessing 
strategic needs and aligning them with service strategies to ensure the 
workforce system meets employment and skill needs of all workers and 
employers.
     Streamlines the governing bodies that establish State, 
regional and local workforce investment priorities. WIOA makes State 
and Local Workforce

[[Page 20694]]

Development Boards more agile and well positioned to meet local and 
regional employers' workforce needs by reducing the size of the boards 
and assigning them additional responsibilities to assist in the 
achievement of the State and local strategic workforce vision and 
goals. The State Workforce Development Boards (State Boards) continue 
to have a majority of business representation and a business chair that 
work for all workers and jobseekers, including low-skilled adults, 
youth, and individuals with disabilities, while they foster innovation, 
and ensure streamlined operations and service delivery excellence.
     Creates a common performance accountability system and 
information for job seekers and the public. WIOA ensures that Federal 
investments in employment, education, and training programs are 
evidence-based and data-driven, and accountable to participants and the 
public. It establishes a performance accountability system that applies 
across the core programs, by generally applying six primary indicators 
of performance: entry into unsubsidized employment at two points in 
time, median earnings, attainment of post-secondary credentials, 
measurable skill gains, and effectiveness in serving employers.
     Fosters regional collaboration to meet the needs of 
regional economies. WIOA promotes alignment of workforce development 
programs with regional economic development strategies to meet the 
needs of local and regional employers.
     Enhances access to high quality services through the 
network of one-stop system. WIOA helps jobseekers and employers acquire 
the services they need in centers and online, clarifies the roles and 
responsibilities of the one-stop partner programs, adds the TANF 
program as a required one-stop partner unless the Governor objects, 
requires competitive selection of one-stop operators, and requires the 
use by the one-stop system of a common one-stop delivery identifier or 
brand that is to be developed by the Secretary of Labor.
     Improves services to individuals with disabilities. WIOA 
stresses physical and programmatic accessibility, including the use of 
accessible technology to increase individuals with disabilities' access 
to high quality workforce services.
     Makes key investments for disconnected youth. WIOA 
emphasizes services to disconnected youth to prepare them for 
successful employment by requiring that a minimum of 75 percent of 
youth formula program funds be used to help OSY, in contrast to the 30 
percent required under WIA. WIOA increases OSYs' access to WIOA 
services, including pre-apprenticeship opportunities that result in 
registered apprenticeship. It adds a requirement that at least 20 
percent of formula funds at the local level be used on work-based 
training activities such as summer jobs, on-the-job training (OJT), and 
apprenticeship.
     Helps Employers Find Workers with the Necessary Skills. 
WIOA contributes to economic growth and business expansion by ensuring 
the workforce system is job-driven--matching employers with skilled 
individuals. WIOA requires Local Boards to promote the use of industry 
and sector partnerships that include key stakeholders in an industry 
cluster or sector that work with public entities to identify and 
address the workforce needs of multiple employers.
    Additionally, successful implementation of many of the approaches 
called for within WIOA, such as career pathways and sector strategies, 
require robust relationships across programs and with businesses, 
economic development, education and training institutions, including 
community colleges and career and technical education, local entities, 
and supportive services agencies.

C. Rule Format

    The NPRM format reflects the Department's commitment to writing 
regulations that are reader-friendly. The Department has attempted to 
make this NPRM clear and easy to understand. To this end, the 
regulatory text is presented in a ``question and answer'' format and 
organized consistent with the Act. While the Department has provided 
cross-references to the statute(s), the Department also has included 
the Act's provisions in the answers for completeness.
    While the Department has anticipated many issues that may arise and 
provided appropriate directions, there are many other areas where the 
Department continues to weigh options. Thus, the Department raises 
questions throughout the preamble where the Department seeks additional 
information or where the Department is weighing options and seek 
comments.

D. Legal Basis

    On July 22, 2014, the President signed the Workforce Innovation 
Opportunity Act (WIOA) (Pub. L. 113-128) into law. WIOA repeals WIA (29 
U.S.C. 2801 et seq.). As a result, the WIA regulations no longer 
reflect current law. Section 503(f) of WIOA requires that the 
Department issue an NPRM and then a final rule that implements the 
changes WIOA makes to the public workforce system in regulations. 
Therefore, DOL seeks to develop and issue a NPRM that proposes to 
implement WIOA. The Department of Labor will issue regulations 
regarding the Section 188 Nondiscrimination provisions through separate 
rulemaking.

IV. Section-by-Section Discussion of Proposal

A. Part 603--Federal-State Unemployment Compensation Program Disclosure 
of Confidential Unemployment Compensation Information Under WIOA Sec. 
116

Relationship Between 20 CFR Part 603 and WIOA
    The Department is amending its regulations at 20 CFR part 603 to 
help States comply with the WIOA. WIOA requires that States use 
``quarterly wage records'' in assessing the performance of certain 
Federally-funded employment and training programs.
    States must make available performance reports for local areas and 
for eligible training providers (ETPs) under title I of the WIOA. WIOA 
also requires that States cooperate in evaluations, by the Departments 
of Labor and Education, of State programs overseen by those Federal 
agencies.
    To help States comply with these requirements, the Department has 
determined that it would be useful to more clearly and specifically, 
describe in unemployment compensation (UC) confidentiality regulations, 
the standards for disclosure between the State UC, workforce, and 
education systems. This proposal amends current regulations to clarify, 
in a limited fashion, those State government officials with whom the 
State may share certain confidential information in order to carry out 
requirements under the law. The regulations enumerate certain 
additional public officials who may access confidential State wage 
records that are the basis for the State's performance reporting. 
Ensuring such access to these State records would allow State agencies 
to better manage the information for the purpose of making Federally-
required reports on certain program outcomes, and to cooperate more 
effectively and be more informative with respect to Federal program 
evaluations.
    WIOA section (sec.) 116(i)(2) and proposed regulation Sec.  677.175 
(a) require State workforce, training, and education programs to use 
quarterly wage records to measure the progress of

[[Page 20695]]

the State on State and local performance accountability measures. Under 
WIA, the Department interpreted the reference to ``quarterly wage 
records'' in sec. 136(f)(2) to require States to use the confidential 
UC information in the employer-provided wage reports collected under 
sec. 1137 of the Social Security Act (SSA), 42 U.S.C. 1320b-7. (See 20 
CFR 677.175.) These are the reports that the State UC agency obtains 
from employers for determining UC tax liability, monetary eligibility, 
or for cross-matching against State UC agencies' files to determine if 
improper payments have been made. The Department adheres to this 
interpretation in implementing WIOA sec. 116(i)(2).
    The ``wage information'' defined in Sec.  603.2(k)--which the 
regulations allow State agencies to disclose under limited 
circumstances--includes the three data categories or elements (wages, 
SSN(s), employer information) that States must use as their data source 
for State and local performance reporting under WIOA. The proposed WIOA 
implementing regulation at 20 CFR 677.175 (b) defines ``quarterly wage 
record information'' to include three data elements or categories of 
data elements: (1) A program participant's SSN(s); (2) information 
about the wages program participants earn after exiting from the 
program; and (3) the name, address, State and (when known) the Federal 
Employer Identification Number (FEIN) of the employer paying those 
wages. The disclosure of such wage record data is governed by UC part 
603 regulations, which establish requirements for maintaining the 
confidentiality of UC information along with standards for mandatory 
and permissive disclosure of such information.
    Part 603 permits State agencies to disclose confidential UC 
information--including ``wage information''--to ``public officials'' 
(defined at Sec.  603.2(d)) under limited circumstances (defined under 
Sec.  603.5), and authorizes such ``public officials,'' in turn, to use 
the information to develop Federally-required performance reports.
    As explained in greater detail below, the Department proposes 
changes to Sec.  603.2 (definition of ``public official'') and Sec.  
603.5 (governing disclosures to public officials), to help States 
comply with WIOA's performance requirements, including the performance 
reports of the States, local areas, and ETPs. In addition, the 
Department proposes to amend Sec.  603.6 to add a provision requiring 
disclosure to implement the new statutory requirement on State 
cooperation with certain DOL and ED evaluations. These changes would 
facilitate States' obligations to report on performance through the use 
of quarterly wage records, and to cooperate in DOL and ED evaluations.
    The amendments the Department is proposing to part 603 relate only 
to State agency disclosures necessary to comply with certain provisions 
of WIOA. The Department is not proposing to redefine or expand the 
confidential State information--the confidential wage records or wage 
information--that is currently the basis for State performance 
reporting, and is not proposing to reduce in any way the significant 
privacy protections and confidentiality requirements that currently 
govern that information. The Department is not proposing to change any 
requirements relating to the permissible or mandatory disclosure of 
confidential UC information for any other purpose, or addressing any 
general UC issues. We note, in particular, that nothing in these 
proposed regulations exempts disclosures made under these regulations 
from the safeguards and security requirements in Sec.  603.9, the 
requirements in Sec.  603.10 governing agreements, or the requirements 
for payment of costs under Sec.  603.8(a).
    The Department invites comments on our proposed additions to part 
603, but will not consider or address comments on part 603 or other UC 
matters that are outside the scope of this NPRM.
Section 603.2(d)(2)-(5)
    Proposed Sec. Sec.  603.2(d)(2)-(5) expand the definition of who 
and what entities are considered ``public officials'' for purposes of 
complying with WIOA's requirements. Currently, Sec.  603.2(d) defines 
``public official'' as ``an official, agency, or public entity'' in the 
executive branch of government with ``responsibility for administering 
or enforcing a law,'' or ``an elected official in the Federal, State or 
local government.'' Proposed Sec.  603.5(e) allows disclosure to public 
officials who need the information to carry out their official duties. 
This exception allows State agencies that collect ``wage information'' 
(including the data required for performance reporting under WIOA sec. 
677.175) to provide that information to the State agencies responsible 
for administering and reporting on the WIOA core programs and mandatory 
one-stop partner programs. For example, State UC agencies, which are 
governed by part 603, may disclose confidential UC information to the 
State adult basic education agency for purposes of performing their 
official duties, as used in Sec.  603.5(e).
    The proposed amendments to Sec.  603.2(d) would clearly enumerate 
that ``public official'' includes officials from public post-secondary 
educational organizations, State performance accountability and 
customer information agencies, the chief elected officials (CEOs) of 
local Workforce Development Areas (as that term is used in WIOA sec. 
106), and a public State educational authority, agency, or institution. 
Proposed Sec.  603.2(d)(2) would permit disclosure to public post-
secondary educational institutions, regardless of how those 
institutions are structured or organized under State law. The 
regulation, as proposed, specifically mentions three categories of 
institutions. Proposed Sec.  603.2(d)(2)(i) would permit disclosure to 
public post-secondary educational institutions that are part of a 
State's executive branch, i.e., derive their authority either directly 
from the Governor or from an entity (State Board, commission, etc.) 
somewhere in that line of authority. Proposed Sec.  603.2(d)(2)(ii) 
would permit disclosure to public post-secondary educational 
institutions that are independent of the State's executive branch, 
which means those institutions whose directors derive their authority 
either directly from an elected official in the State other than the 
Governor or from an entity (again, a State Board, commission, or other 
entity) in that line of authority. Proposed Sec.  603.2(d)(2)(ii) 
covers any public post-secondary educational institution established 
and governed under State law, for example, a State Board of Regents. 
Proposed Sec.  603.2(d)(2)(iii) would allow disclosure specifically to 
State technical colleges and community colleges. (Those institutions 
may also be covered under (i) or (ii))
    Proposed Sec.  603.2(d)(5) permits disclosure to a public State 
educational authority, agency or institution'' as the terms are used in 
the Family Educational Rights and Privacy Act (FERPA) to clarify that 
the Department considers the heads of public institutions that derive 
their authority from a State educational authority or agency to be 
``public officials'' for purposes of part 603.
    The Department proposes these changes to help States comply with 
WIOA's requirement to use wage records to measure performance (WIOA 
sec. 116(i)(2)) and to facilitate the performance reporting required 
for ETPs under secs. 116(d) and 122 of WIOA. WIOA mandates the use of 
wage records to measure State and local performance. As long as the 
recipients of the data adhere to all of the requirements in 20 CFR part 
603, this proposed section

[[Page 20696]]

would permit States to make these disclosures to comply with WIOA 
requirements for Federal, State, or local government reporting on 
program outcomes and for other specified purposes.
    Non-public educational institutions, including non-profit or for-
profit educational institutions or other ETPs which are not subject to 
the authority of the executive branch or another State elected official 
would not be permitted to obtain confidential UC information, including 
wage information, under this authority because they are not public 
entities. Any disclosures of confidential UC information to those 
entities for purposes of complying with WIOA would have to be 
authorized under the provisions of Sec.  603.5 other than Sec.  
603.5(e). However, it is permissible and encouraged to develop 
processes or systems, such as the Wage Record Interchange System, to 
enable a State agency or State educational authority (including a State 
Education Agency) that collects wage records to match program 
participant data with wage records, and to provide aggregate 
participant outcome data to non-governmental educational entities, 
including ETPs under title I of WIOA.
Section 603.5(e)
    Proposed Sec.  603.5(e), as amended, would assist State workforce 
and State education programs in complying with WIOA, and in particular 
with WIOA's sec. 116 performance accountability responsibilities, by 
explicitly stating that confidential UC information may be disclosed to 
a ``public official'' as defined in Sec.  603.2(d)(2) for limited, 
specified WIOA purposes.
    Proposed Sec.  603.5(e), as amended, in conjunction with the 
revised definition of ``public official'' under 603.2(d)(2), would 
enable State UC agencies to disclose confidential UC information to 
State and local agencies and other public officials authorized to carry 
out their responsibilities under WIOA for performance accountability, 
including audits and evaluations of the programs and other required 
reporting of outcomes, as described in proposed Sec.  603.2(d)(2). To 
enable States to comply with WIOA, State UI agencies, or other State 
agencies responsible for collection of wage record information, must 
collaborate with the entities under WIOA that are required to use wage 
record data for performance to make the data available pursuant to part 
603.
    The Department notes that the proposed amendment to Sec.  603.5(e) 
would permit disclosure to a public official for purposes of 
performance accountability of the entities on the State's eligible 
training provider list (ETPL). In addition, disclosure of confidential 
UC information for other programs' performance accountability purposes 
(e.g., TANF or SNAP) may be accomplished under existing Sec.  603.5, as 
these entities are public officials and are performing their public 
duty, as defined in this section.
    A new clause (iii) under proposed Sec.  603.5(e) would permit 
disclosures ``as otherwise required for education or workforce training 
program performance accountability and reporting under Federal or State 
law.'' The Department intends that this provision apply only in the 
limited instance where a Federal or State law requires performance 
reporting for which data covered by part 603 is needed in a way that is 
not covered by the other WIOA-specific provisions. In those instances, 
this provision would permit a State agency to disclose confidential UC 
information to a ``public official'' seeking the information to comply 
with that statute.
Section 603.6(8)
    Proposed Sec.  603.6(8) makes the disclosure of confidential UC 
information for certain Federal evaluations mandatory when the 
disclosure would not interfere with the efficient administration of 
State UC law. The Department proposes this change to Sec.  603.6 to 
implement the requirement, under WIOA sec. 116(e)(4), that States 
cooperate, ``to the extent practicable,'' in the conduct of evaluations 
by either the Secretary of Labor or the Secretary of Education. WIOA 
sec. 116(e)(4) defines cooperation to include ``the provision of data 
(in accordance with appropriate privacy protections established by the 
Secretary of Labor)''; this includes 20 CFR part 603 and any other 
privacy protections the Secretary may establish. The proposed new 
regulation at Sec.  603.6(8) would implement these requirements for 
purposes of providing confidential UC information regulated by part 
603. The new regulation would require disclosure of confidential UC 
information to Federal officials, or their agents or contractors, 
requesting such information in the course of an evaluation covered by 
WIOA Sec.  116(e)(4) and 116(e)(1), to the extent that such disclosure 
is ``practicable.''
    In these cases, the Department interprets ``to the extent 
practicable'' to mean that the disclosure would not interfere with the 
efficient administration of State UC law. This standard is consistent 
with the standard the regulation applies to disclosures under Sec.  
603.5, in situations where the disclosure is permitted but a State must 
determine, first, that the disclosure would not interfere with the 
efficient administration of State UC law. In effect, the proposed 
provision would require that State UC agencies make disclosures to 
Federal education and labor agencies carrying out evaluations when it 
would not interfere with the efficient administration of the State UC 
law. The Department anticipates this cooperation and related 
disclosures would include responding to surveys and allowing site 
visits, as well as disclosure of confidential UC information needed for 
the evaluation.

B. Part 675--Introduction to the Regulations for the Workforce 
Innovation and Opportunity Systems Under Title I of the Workforce 
Innovation and Opportunity Act

    Proposed part 675 discusses the purpose of title I of the WIOA, 
explains the format of the regulations governing title I, and provides 
additional definitions which are not found and defined in the Act.
    Proposed Sec.  675.100 describes the purposes of title I of WIOA.
    Proposed Sec.  675.200 outlines the structure of the proposed WIOA 
regulations.
    Proposed Sec.  675.300 provides a list of proposed definitions that 
are applicable across the WIOA regulations.
    In addition to the definitions in the WIOA regulations and at secs. 
3, 142, 166(b), 167(i), 170(a), 171(b), 203, 302, and 404 of WIOA, 
proposed Sec.  675.300 provides additional definitions that apply to 
the programs and activities authorized and funded under title I of 
WIOA.
    Included in this list of definitions, the Department proposes to 
adopt the following relevant definitions from the Office of Management 
and Budget's (OMB) ``Uniform Administrative Requirements, Cost 
Principles and Audit Requirements for Federal Awards'' found at 2 CFR 
part 200: Contract, Contractor, Cooperative Agreement, Federal Award, 
Federal Financial Assistance, Grant Agreement, Non-Federal Entity, 
Obligations, Pass-Through Entity, Recipient, Subaward, Subrecipient, 
Unliquidated Obligations, and Unobligated Balance. All other 
definitions at 2 CFR part 200 apply to these regulations where 
relevant, but have not been included in this section.
    Contract: The proposed definition for ``contract'' incorporates the 
definition established by OMB at 2 CFR 200.22. Specifically, the 
proposed term ``contract'' refers to the legal document that a non-
Federal entity uses to purchase property or services used to carry out 
its duties under a grant authorized under WIOA. If the

[[Page 20697]]

Department determines that a particular transaction entered into by the 
entity is a Federal award or subaward it will not be considered a 
contract.
    Contractor: The proposed definition of ``contractor'' incorporates 
the definition contained in OMB's Uniform Guidance at 2 CFR 200.23. The 
Uniform Guidance has replaced the term ``vendor'' with the term 
``contractor.'' As used in these regulations, the term ``contractor'' 
includes entities that the Act refers to as ``vendors.'' Additionally, 
it is important to note that contractors are not subrecipients. 
Additional guidance on distinguishing between a contractor and a 
subrecipient can be found at 2 CFR 200.330.
    Cooperative Agreement: The proposed definition of ``cooperative 
agreement'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.24.
    Department or DOL: This proposed term refers to the United States 
DOL, its agencies, and organizational units.
    Employment and Training Activity: As used in these regulations, the 
proposed term ``employment and training activity'' refers to any 
workforce investment activities carried out for an adult or dislocated 
worker under sec. 134 of WIOA and 20 CFR part 678.
    Equal Opportunity (EO) Data: This proposed term refers to the data 
required by the Department's regulations at 29 CFR part 37 implementing 
sec. 188 of WIOA.
    ETA: This proposed term refers to the ETA, an agency of DOL, or its 
successor organization.
    Federal Award: This proposed definition incorporates the definition 
in the Uniform Guidance at 2 CFR 200.38.
    Federal Financial Assistance: The proposed definition of ``Federal 
financial assistance'' incorporates the definition contained in the 
Uniform Guidance at 2 CFR 200.40.
    Grant or Grant Agreement: The proposed definition of ``grant 
agreement'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.51. Because both WIOA and these regulations use 
``grant'' and ``grant agreement'' interchangabily, the inclusion of 
both terms here clarifies that the terms are synonymous.
    Grantee: The proposed definition of ``grantee'' refers to a 
recipient of funds under a grant or grant agreement. Grantees are also 
referred to as recipients in these regulations.
    Individual with a Disability: This proposed definition adopts the 
definition from sec. 3 of the Americans with Disabilities Act, as 
amended, and is further defined at 29 CFR 37.4.
    Labor Federation: This proposed definition remains unchanged from 
the definition used in the regulations under WIA at 20 CFR 660.300.
    Literacy: The proposed definition for ``literacy'' as used in these 
regulations is a measure of an individual's ability to participate and 
successfully function both in the workplace and in society.
    Local Board: This proposed definition clarifies that the term 
``Local Board'' as used in these regulations refers to the Local 
Workforce Development Boards established under sec. 107 of WIOA.
    Non-Federal Entity: The proposed definition of ``non-Federal 
entity'' incorporates the definition contained in the Department's 
Exceptions to the Uniform Guidance at 2 CFR 2900.2.
    Obligations: The definition of ``obligations'' incorporates the 
definition contained in the Uniform Guidance at 2 CFR 200.71.
    Outlying Area: The proposed term ``outlying area'' refers to those 
Territories of the United States which are not within the definition of 
``State,'' including the U.S. Virgin Islands, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands, and, in certain 
circumstances, the Republic of Palau.
    Pass-through entity: The proposed definition of pass-through entity 
incorporates the definition in the Uniform Guidance at 2 CFR 200.74.
    Recipient: The proposed definition of ``recipient,'' which is 
different than the current definition of recipient under WIA at 20 CFR 
660.300, incorporates the definition in the Uniform Guidance at 2 CFR 
200.86.
    Register: The proposed definition of ``register'' means the point 
at which an individual seeks more than minimal assistance from staff in 
taking the next step towards self-sufficient employment. This is also 
when information that is used in performance information begins to be 
collected. At a minimum, individuals must provide identifying 
information to be registered.
    Secretary: This proposed term refers to the Secretary of the U.S. 
DOL, or their officially delegated designees.
    Secretaries: This proposed term refers to the Secretaries of the 
U.S. DOL and the U.S. ED, or their officially designated designees.
    Self-Certification: The proposed term ``self-certification'' refers 
to the certification made by an individual that they are eligible to 
receive services under title I of WIOA.
    State: The proposed term ``State'' refers to each of the several 
States of the United States, the District of Columbia, and the 
Commonwealth of Puerto Rico.
    State Board: This proposed definition clarifies that the term 
``State Board'' as used in these regulations refers to the State Boards 
established under sec. 101 of WIOA
    Subgrant or Subaward: This proposed term incorporates the 
definition of ``subaward'' in the Uniform Guidance at 2 CFR 200.92. 
This term replaces the term ``subgrant'' found in WIA at 20 CFR 
660.300. Because both WIOA and these regulations use ``subgrant'' and 
``subaward'' interchangeably, the inclusion of both terms here 
clarifies that the terms are synonymous.
    Subrecipient: The proposed definition of ``subrecipient'' 
incorporates the definition in the Uniform Guidance at 2 CFR 200.93. 
This term is synonymous with the term ``subgrantee.''
    Unliquidated Obligations: The proposed definition of ``unliquidated 
obligations'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.97.
    Unobligated Balance: The proposed definition of ``unobligated 
balance'' incorporates the definition in the Uniform Guidance at 2 CFR 
200.98.
    Wagner-Peyser Act: As used in these regulations, the proposed term 
``Wagner-Peyser Act'' refers to the Wagner-Peyser Act passed on June 6, 
1933, and codified at 29 U.S.C. 49, et seq.
    WIA Regulations: The proposed term ``WIA Regulations'' as used in 
this regulation or subsequently by the Department refers to the 
regulations 20 CFR parts 660-672. This definition is necessary because, 
as described in the introduction to these regulations, the Department 
has chosen to retain the WIA regulations at parts 660-672 of title 20 
of the CFR.
    WIOA Regulations: This proposed term, as used in this regulation or 
generally by the Department means those regulations in 20 CFR parts 675 
through 687, the Wagner-Peyser Act regulations in 20 CFR part 652, 
subpart C, and the regulations implementing WIOA sec. 188 in 29 CFR 
part 37.
    Workforce Investment Activities: The proposed term ``workforce 
investment activities'' is a general term that describes the broad 
array of activities and services provided to eligible adults, 
dislocated workers, and youth under secs. 129 and 134 of title I of 
WIOA.
    Youth Workforce Investment Activity: The proposed term ``youth 
workforce investment activity'' refers to those activities carried out 
for eligible youth that fall within the broad definition of ``workforce 
investment activity.''

[[Page 20698]]

C. Part 679--Statewide and Local Governance of the Workforce Innovation 
and Opportunity System Under Title I of the Workforce Innovation and 
Opportunity Act

1. Subpart A--State Workforce Development Board
    This subpart A sets forth the conditions under which the Governor 
must establish the State Board.
    Proposed Sec. Sec.  679.100(a)-(e) explain the purpose of the State 
Board. The State Board represents a wide variety of individuals, 
businesses, and organizations throughout the State. WIOA is designed to 
help job seekers and workers access employment, education, training, 
and support services needed to succeed in the labor market, and match 
employers with the skilled workers needed to compete in the global 
economy. Further, the Department envisions a State Board that takes 
leadership to ensure that the one-stop system in each State is customer 
driven. The State Board can help lead this effort by aligning Federal 
investments in job training, integrating service delivery across 
programs, and ensuring that the workforce system is job-driven and 
matches employers with skilled individuals.
    The Department envisions that the State Board will serve as a 
convener of State, regional, and local workforce system partners to 
enhance the capacity and performance of the workforce development 
system; align and improve employment, training, and education programs, 
and through these efforts, promote economic growth.
    The State Board must be a strategic convener that promotes 
partnerships and engages key stakeholders. This role can only be 
accomplished if each State Board member is an active participant in the 
business of the board. State Board members must establish a platform in 
which all members actively participate and collaborate closely with the 
required partners of the workforce development system, including public 
and private organizations. This engagement is crucial in the State 
Board's role to help integrate and align a more effective job-driven 
workforce investment system that invests in the connection between 
education and career preparation.
Section 679.100 What is the vision and purpose of the State Board?
    A key goal of Federally-funded training programs is to get more 
Americans ready to work with marketable skills and support businesses 
to find workers with the skills that are needed. The role of the State 
Board in achieving this goal includes engaging employers, education 
providers, economic development, and other stakeholders to help the 
workforce development system achieve the purpose of WIOA and the 
State's strategic and operational vision and goals outlined in the 
State Plan. The Department encourages the State Board to develop a 
comprehensive and high-quality workforce development system by working 
with its workforce, education, business, and other partners to improve 
and align employment, training, and education programs under WIOA.
    The Department encourages the State to take a broad and strategic 
view when considering representatives of the State Board, and also in 
establishing processes which it will use to include necessary 
perspectives in carrying out State Board functions. For example, 
alignment of required one-stop partner investments is essential to 
achieving strategic and programmatic alignment at the State, regional, 
and local level. Further, States are encouraged to examine factors like 
the natural bounds of regional economies, commuting patterns, and how 
economic sectors impact the State, which may benefit from inputs either 
from formal members of the board, or through other engagement. Further, 
a broad geographic representation as well as a reflection of diversity 
of populations within the State is critical.
Section 679.110 What is the State Workforce Development Board?
    Proposed Sec.  679.110 describes the membership requirements of the 
State Board. WIOA sec. 101(b) uses the terms ``representative'' and 
``representatives'' in several places. In this section the Department 
interprets ``representatives'' to mean two or more individuals and 
``representative'' as one individual.
    Proposed Sec.  679.110(a) explains that States must establish State 
Boards in accordance to the requirements of WIOA sec. 101 and these 
regulations. This proposed section retains the same requirements found 
at 20 CFR 661.200(a).
    Proposed Sec.  679.110(b) generally requires, in accordance with 
sec. 101(b)(2) of WIOA, that the State Board membership represent the 
diverse geographic areas of the State. Employers' and workers' 
challenges and needs differ among the urban, rural, and suburban areas 
of the States due to demographics, labor market information and 
conditions, and business and worker needs and access to the workforce 
development system. Accordingly, the Department strongly encourages 
that each category of membership on the Board--the members of the State 
legislature, business representative, workforce and labor 
representatives, and State and local officials--represent the diverse 
geographic areas of the State to ensure that the workforce development 
system meets the education, employment, and skill needs of workers, 
jobseekers, and businesses, no matter their location in the State.
    Proposed Sec.  679.110(b)(1) and (2) implement secs. 101(1)(A) and 
(B) of WIOA by requiring that the board include the Governor of the 
State and one member of each chamber of the State legislature.
    Proposed Sec.  679.110(b)(3)(i)(A) through (C), implementing sec. 
101(b)(1)(C)(i) of WIOA, require the majority of State Board 
representatives to be from businesses or organizations in the State. 
These representatives must either be the owner or chief executive of 
the business or be an executive with optimum policy-making or hiring 
authority as defined in proposed Sec.  679.120. These representatives 
must also come from businesses or organizations that represent 
businesses which provide employment and training opportunities that 
include high-quality, work-relevant training, and development 
opportunities in in-demand industry sectors or occupations. Work-
relevant and development opportunities may include customized training, 
registered apprenticeship, or OJT. Finally, the Governor must appoint 
these members based on nominations from business organizations and 
trade associations in the State. The Department envisions that these 
members will be individuals that will be able to drive the board to 
align the workforce investment, education, and economic development 
systems in support of a comprehensive, accessible, and high-quality 
workforce development system.
    Proposed Sec.  679.110(b)(3)(i)(D) requires, at a minimum, that one 
member of the State Board represent small business as defined by the 
U.S. Small Business Administration. Small businesses are a critical 
component of and major contributor to the strength of local economies 
and present new employment opportunities. The Department proposes to 
require a small business representative because the presence of at 
least one small business representative on the State Board will allow 
the board as a whole to more readily receive the unique perspectives, 
experiences, and needs of small businesses.
    Proposed Sec.  679.110(b)(3)(ii)(A) through (D) require that not 
less than 20

[[Page 20699]]

percent of the members of the State Board be representatives of the 
workforce. Such representatives must include representatives from labor 
organizations and registered apprenticeship programs within the State, 
in accordance with sec. 101(b)(1)(ii). This provision maintains WIA's 
emphasis and requirement that State Board representatives include 
members of the workforce and labor organizations. The Department 
anticipates that the inclusion of workforce and labor representatives 
will foster cooperation between labor and management, strengthening the 
operation and effectiveness of the State workforce development system. 
This proposed section also encourages representation from CBOs that 
have demonstrated experience and expertise, as defined in proposed 
Sec.  679.120, in addressing the employment, training, or education 
needs of individuals with barriers to employment across the State 
including organizations that serve veterans or that provide or support 
competitive, integrated employment for individuals with disabilities, 
and organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of eligible 
youth, including organizations that serve OSY.
    Proposed Sec.  679.110(b)(3)(iii)(A)(1) and (2), implementing WIOA 
sec. 101(b)(1)(iii)(I), require the Governor to appoint to the State 
Board representatives of government that include the lead State 
officials with primary responsibility for each of the core programs and 
two or more CEOs that represent both cities and counties, where 
appropriate. The inclusion of State officials with primary 
responsibility for each of the core programs and CEOs on the State 
Board is important so that they can support and improve the service 
delivery of each core program through their experience in workforce 
investment activities and positions as public leaders. This provision 
also requires that where the State official with primary responsibility 
for a core program represents more than one core program, that official 
must ensure adequate representation on the State Board of the needs of 
all the core programs under their jurisdiction. Additionally, the CEOs 
must be able to represent their geographic area such as their 
surrounding cities and counties in the area.
    Proposed Sec.  679.110(b)(3)(iii)(B), in accordance with WIOA sec. 
101(b)(1)(C)(iii)(II), allows the Governor to designate other 
representatives and officials to the Board, including but not limited 
to, representatives and officials such as State agency officials from 
agencies that are responsible for one-stop partners, State agency 
officials responsible for economic development or juvenile justice 
programs, individuals who represent an Indian tribe or tribal 
organizations, and State agency officials responsible for education 
programs.
    Proposed Sec.  679.110(c), implementing sec. 101(c) of WIOA, 
requires the Governor to select a chairperson for the State Board from 
the business representatives on the board. This proposed section 
retains the same requirements found at 20 CFR 661.200(g).
    Proposed Sec.  679.110(d) requires the Governor to establish by-
laws that help improve operations of the State Board. Proposed Sec.  
679.110(d)(1) through (7) require that at a minimum the by-laws address 
the nomination process used by the Governor to select the State Board 
chair and members, term limitations and how the term appointments will 
be staggered to ensure only a portion of memberships expire in a given 
year, the process to notify the Governor of a board member vacancy to 
ensure a prompt nominee, the proxy and alternative designee process 
that will be used when a board member is unable to attend a meeting and 
assigns a designee, brokers relationships with stakeholders, and any 
other conditions governing appointment or membership on the State Board 
as deemed appropriate by the Governor. In addition to these required 
elements, the Governor must include any additional requirements in the 
board's by-laws that he or she believes is necessary to ensure the 
orderly administration and functioning of the board. An effective State 
Board establishes clear roles, responsibilities, procedures, and 
expectations through its by-laws, and that these requirements will help 
State Boards to be more agile and proactive in reacting to board 
turnover, increase board participation when board members are not able 
to physically attend board meetings, improve board functionality, and 
help ensure that the public is informed about the operation of the 
board.
    Proposed Sec.  679.110(e) requires, as a general condition of State 
Board membership, that members who represent the non-business 
organizations, agencies, or other entities described in proposed Sec.  
679.110(b)(3)(ii) and (iii) have optimum policy-making authority. 
Because WIOA sec. 101(d) adds State Board functions, such as 
identifying and disseminating information on best practices and 
developing and reviewing statewide policies affecting the coordinated 
provision of services through the State's one-stop delivery system, all 
members, not just those representing the business community, should 
have optimum policy-making authority to accomplish the purposes of WIOA 
and conduct the State Board required functions.
    Proposed Sec.  679.110(f) implements the multiple-entity 
representation limitations for State Board members at WIOA sec. 
101(b)(3). Robust representation in each of the categories is essential 
to ensure that the State Board benefits from the diversity and 
experience of board members.
    Proposed Sec.  679.110(f)(1) explains that a State Board member may 
not represent more than one of the three membership categories: 
Business representatives, workforce representatives, or government 
representatives. For example, one member could not serve as a business 
representative and a joint labor-management apprenticeship program even 
if the member would otherwise satisfy the criteria for both categories.
    Proposed Sec.  679.110(f)(2) explains that a State Board member may 
not serve as a representative of more than one subcategory under 
(b)(3)(ii). Under this provision, a single board member could not serve 
as a representative of an organized labor organization and an 
apprenticeship program (or the optional subcategories) even if the 
member would otherwise satisfy the criteria for either category.
    Proposed Sec.  679.110(f)(3) prohibits a government representative 
from serving as a representative of more than one subcategory under 
(b)(3)(iii). However, where a single government agency is responsible 
for multiple required programs, the head of the agency may represent 
each of the required programs. In some instances, it would be 
appropriate and beneficial for one representative to represent multiple 
programs on the State Board. For example, the head of a State Workforce 
Agency might represent both the WIOA title I and Wagner-Peyser 
programs. This arrangement could serve to improve integration of these 
two programs and/or help the State Board better achieve the colocation 
requirements at WIOA sec. 123(c)(3). In other instances, such an 
arrangement would be less beneficial. For example, where vocational 
rehabilitation services fall under the State Workforce Agency, 
appointing a single representative to satisfy the membership 
requirements of WIOA title I, Wagner-Peyser, and vocational 
rehabilitation services may limit the voice and influence of a core 
program partner. The Department encourages Governors to use discretion

[[Page 20700]]

when appointing board members to represent multiple subcategories under 
(b)(3)(iii).
    Proposed Sec.  679.110(g) requires that all required board members 
have voting privileges and allows the option for the Governor to convey 
voting privileges to non-required members. All required board members 
must have a voice in the State Board's decisions to ensure that the 
interests of all members of the community represented by the required 
members are taken into account by the board. Requiring voting rights 
allows the required board members to have an effect on the State 
Board's key decisions and initiatives and enables the required board 
members to effectively represent the individuals and organizations of 
their communities. This proposed section also permits the Governor to 
grant voting privileges to the non-required members of the board, and 
the Department encourages the Governor to do so if doing so, in their 
opinion, would further the mission and goals of the board.
Section 679.120 What is meant by the terms ``optimum-policy-making 
authority'' and ``demonstrated experience and expertise''?
    Proposed Sec.  679.120(a) defines the term ``optimum policy-making 
authority'' as an individual who can reasonably be expected to speak 
affirmatively on behalf of the entity he or she represents and to 
commit that entity to a chosen course of action. This proposed section 
retains the same requirements found at 20 CFR 661.203(a).
    Proposed Sec.  679.120(b) defines the term ``demonstrated 
experience and expertise'' as an individual who has documented 
leadership in developing or implementing workforce development, human 
resources, training and development, or a core program function. WIOA 
sec. 101(d) adds new State Board functions, such as the development of 
strategies for aligning technology and data systems across one-stop 
partner programs to enhance service delivery and improve efficiencies 
in reporting on performance accountability measures. This provision 
will ensure that the State Board will include members that will assist 
the board in fulfilling these functions. The Department seeks public 
comment on how to further define ``demonstrated experience and 
expertise'' and examples of the types of qualifications that would meet 
such a definition.
Section 679.130 What are the functions of the State Board?
    Proposed Sec.  679.130 implements sec. 101(d) of WIOA and describes 
the role and functions of the State Board. Proposed Sec.  679.130(a), 
(d) through (e), and (g) through (k) reiterate the relevant statutory 
requirements at secs. 101(d)(1), (4)-(5), and (7)-(11). These functions 
are the primary functions of the State Board.
    Proposed Sec.  679.130 is consistent with WIOA's statutory 
requirement that the State Board must assist the Governor in the 
development, implementation, and modification of the 4-year State Plan.
    Proposed Sec.  679.130(b) is consistent with WIOA sec. 101(d)(2) 
and reiterates the statutory requirements. The proposed regulation 
states the review of statewide policies, programs, and recommendations 
on actions that must be taken by the State to align workforce 
development programs to support a comprehensive and streamlined 
workforce development system. Such review of policies, programs, and 
recommendations must include a review and provision of comments on the 
State plans, if any, for programs and activities of one-stop partners 
that are not core programs.
    Proposed Sec.  679.130(c)(1) through (7) are consistent with WIOA 
secs. 101(d)(3)(A) through (G) and reiterate WIOA's requirements that 
the State Board assist the Governor in development and continuous 
improvement of the State's workforce development system, including 
removing barriers to aligning programs and activities, developing 
career pathways to support individuals to retain and enter employment, 
developing customer outreach strategies, identifying regions and 
designating local workforce areas, developing and continuously 
improving the one-stop system, and developing strategies to train and 
inform staff.
    Proposed Sec.  679.130(d) and (e) reiterate statutory language 
requiring State Boards to assist in the development of State 
performance and accountability measures and to identify and disseminate 
best practices.
    Proposed Sec.  679.130(f)(1) through (3) are consistent with WIOA 
secs. 101(d)(6)(A) through (C) to assist in the development and review 
of statewide policies on coordinated service provisions, which includes 
criteria for Local Boards to assess one-stop centers, allocation of 
one-stop center infrastructure funds, and the roles and contributions 
of one-stop partners within the one-stop delivery system. In addition, 
it is important for the State Board to consult with CEOs and Local 
Boards when establishing objective criteria and procedures for Local 
Boards to use when certifying one-stop centers. Where Local Boards 
serve as the one-stop operator, the State Board must use such criteria 
to assess and certify the one-stop center to avoid inherent conflicts 
of interest in a Local Board assessing itself.
    Proposed Sec.  679.130(g) through (k) reiterate statutory language 
requiring State Boards to assist in the development of strategies for 
technological improvements to improve access and quality of service, 
align technology and data systems across one-stop partner programs to 
improve service delivery and effectiveness in reporting on performance 
accountability, develop allocation formulas for distribution of adult 
and youth programs, and in accordance with WIOA and these regulations, 
prepare the annual report and develope the statewide WLMIS.
    Proposed Sec.  679.130(l) is consistent with WIOA sec. 101(d)(12). 
This proposed regulation requires the State Board to assist the 
Governor in the development of other policies that promote statewide 
objectives and enhance the performance of the workforce development 
system in the State.
Section 679.140 How does the State Board meet its requirement to 
conduct business in an open manner under ``sunshine provision'' of the 
Workforce Innovation and Opportunity Act sec. 101(g)?
    Proposed Sec.  679.140 implements sec. 101(g) of WIOA, requires 
that the State Board conduct its business in an open and transparent 
manner, and describes several pieces of information that the board is 
required to provide to ensure transparency.
    Proposed Sec.  679.140(b)(1) through (4) requires the State Board 
to make certain information available on a regular basis to ensure that 
it is conducting its business in an open manner. Transparency promotes 
accountability and provides valuable information to citizens on the 
Federal, State, and local government's activities. Therefore, the State 
Board must make available to the public on a regular basis, through 
electronic means and open meetings, information about State Board 
activities such as the State Plan, modifications to the State Plan, 
board membership, the board's by-laws, the minutes of meetings. This 
information must be easily accessed by interested parties. Ensuring 
that this information is widely available promotes transparency and

[[Page 20701]]

provides access to the public on how the State Board works to align, 
integrate, and continuously improve the workforce development system.
Section 679.150 Under what circumstances may the Governor select an 
alternative entity in place of the State Workforce Development Board?
    Proposed Sec.  679.150(a) and (b) implement the requirements of 
WIOA sec. 101(e)(1) and describe the circumstances by which the 
Governor may select an alternate entity in place of a State Board. 
Paragraph (b) lists the conditions that must be met if a State uses an 
alternative entity in place of the State Board and requires that the 
entity meets the requirements of Sec.  679.110.
    Proposed Sec.  679.150 (c)(1) through (3) stipulate that if the 
alternative entity does not provide representatives for each of the 
categories required under WIOA sec. 101(b), the State Plan must explain 
the manner in which the State will ensure an ongoing role for any 
unrepresented membership group in the workforce development system. The 
proposed section further requires that the State Board ensure that the 
alternative entity maintain a meaningful, ongoing role for 
unrepresented membership groups, including entities carrying out the 
core programs, and to inform the Board's actions.
    Proposed Sec.  679.150(d) stipulates if the membership structure of 
the alternative entity had a significant change after August 7, 1998, 
the entity will no longer be eligible to perform the functions of the 
State Board. In such a case, the Governor must establish a new State 
Board which meets all of the criteria of WIOA sec. 101(b).
    Proposed Sec.  679.150 (e)(1) and (2) define a significant change 
in the membership structure which includes a change in the organization 
of the alternative entity or in the categories of entities represented 
on the alternative entity which requires a change to the alternative 
entity's charter or a similar document that defines the formal 
organization of the alternative entity, regardless of whether the 
required change to the document has or has not been made. This proposed 
section retains the same requirements found at 20 CFR 661.210(e).
    Proposed Sec.  679.150(f) stipulates all State Board references in 
20 CFR parts 675 through 687 also apply to an alternative entity used 
by a State. This proposed section implements sec. 101(e)(2) of WIOA.
Section 679.160 Under what circumstances may the State Board hire 
staff?
    Proposed Sec.  679.160 implements sec. 101(h) and describes the 
board's authority to hire staff. Per proposed Sec.  679.160(c), the pay 
provided to the director and staff hired by the board is subject to the 
limitations on the payment of salary and bonuses described in WIOA sec. 
194(15).
2. Subpart B--Workforce Innovation and Opportunity Act Local Governance 
(Workforce Development Areas)
    The WIOA envisions a workforce development system that is customer-
focused on both the job seeker and business, and is able to anticipate 
and respond to the needs of regional economies. It requires Workforce 
Development Boards and CEOs to design and govern the system regionally, 
aligning workforce policies and services with regional economies and 
supporting service delivery strategies tailored to these needs. To 
support this regional approach, WIOA requires States to identify 
intrastate and interstate regions which may be comprised of more than 
one local area, and requires local areas to plan regionally. WIOA 
envisions a regional system where not only do local areas plan 
regionally, but workforce system leaders partner and provide leadership 
as part of comprehensive, regional workforce and economic strategies. 
This subpart provides the requirements for designation of regions and 
local areas under WIOA.
Section 679.200 What is the purpose of a region?
    Proposed Sec.  679.200 describes the purpose of requiring States to 
identify regions: to align workforce development resources to regional 
economies to ensure coordinated and efficient services to both job 
seekers and employers. WIOA requires States to establish regions in 
order to ensure that training and ES support economic growth and 
related employment opportunities and are meeting the skill competency 
requirements of the regions. The development of comprehensive regional 
partnerships facilitates alignment of workforce development activities 
with regional economic development activities, and better supports the 
execution and implementation of sector strategies and career pathways. 
Regional cooperation may also lower costs and increase the 
effectiveness of service delivery to businesses that span more than one 
local workforce development area within a region and to job seekers 
through coordination of shared services, processes, and operations. The 
Department encourages States to use these processes to identify any 
performance, fiscal, or planning challenges and to ensure that local 
and regional planning areas are aligned to support improved service 
delivery, improved training and employment outcomes, better meet 
employer needs, and greater effectiveness and efficiency in achieving 
these outcomes.
Section 679.210 What are the requirements for identifying a region?
    Proposed Sec.  679.210 outlines the requirements for identifying a 
region.
    Proposed Sec.  679.210(a) requires that the Governor assign local 
areas to a region prior to the submission of the State Unified or 
Combined Plan.
    Proposed Sec.  679.210(b) explains that the Governor must develop a 
policy for designation of a region prior to submission of the State 
Unified or Combined Plan, in order to receive WIOA title I-B adult, 
dislocated worker, and youth allotments. The regional assignment is 
important because regional economic development areas do not 
necessarily correspond to State, county, or local workforce development 
areas, or municipal boundaries.
    Proposed Sec.  679.210(b) clarifies the required factors that a 
Governor must consider when identifying a region and the parties the 
Governor must consult, implementing WIOA sec. 106(a)(1). The 
considerations for identifying a planning region are consistent with 
those for local area designation outlined in proposed Sec.  679.240(a).
    Proposed Sec.  679.210(c) provides additional criteria the Governor 
may consider when identifying regions. These additional criteria, which 
provide a more comprehensive picture of regional economies and labor 
markets, provide additional data points to inform the Governor's 
decision to assign local areas to regions. However, the Department 
seeks comment on the appropriateness of these factors and requests 
suggestions of additional data points for defining a regional economy 
and labor market.
    The Department has included ``population centers'' in proposed 
Sec.  679.210(c)(1) because they and their contiguous areas of growth 
are a basic factor distinguishing economic development areas and 
planning regions.
    Proposed Sec.  679.210(c)(2) allows the consideration of 
``commuting patterns'' because commuting pattern data can show the 
movement of workers from their residence to their workplace. A

[[Page 20702]]

strong flow of commuters from one local area, municipality, or county 
into another is an indication of the economic interdependence of the 
two areas.
    ``Land ownership'' is included in proposed Sec.  679.210(c)(3) 
because land ownership can significantly affect the economic 
development potential of an area.
    ``Industrial composition'' has been proposed as a factor in Sec.  
679.210(c)(4) because it is primarily based upon industry employment 
patterns. The factors used in determining regions could be jobs by 
industry and share of total employment by industry.
    Proposed Sec.  679.210(c)(5) permits the Governor to consider 
``location quotients,'' which are ratios that could be computed by 
dividing a local area's percentage of employment in a particular 
industry by the State's percentage of employment in a particular 
industry. The economic base of a local area includes those industries 
in which the local area has a higher proportion of employment than the 
State as a whole, or a higher location quotient. Adjacent local areas 
with similar economic bases are strong candidates for placement in the 
same region.
    ``Labor force conditions'' is proposed as a factor in Sec.  
679.210(c)(6). Local area labor force employment and unemployment data 
could provide a measure of labor availability throughout the State. 
Adjacent local areas with similar labor force characteristics, such as 
unemployment rates, might have similar workforce/economic development 
needs, thus joining those areas into a region may be beneficial.
    Proposed Sec.  679.210(c)(7) suggests that the Governor consider 
``geographic boundaries'' when setting regions because they may serve 
to facilitate or hinder the movement of people and commerce between 
areas, thereby naturally delineating regional boundaries.
    Finally, proposed Sec.  679.210(c)(8) indicates that the Secretary 
may suggest additional factors in future guidance.
    Proposed Sec.  679.210(d), implementing sec. 106(a)(2) of WIOA, 
outlines the types of regions and how local areas may be assigned to 
regions. A region may consist of a single local area, two or more 
contiguous local areas with a State, or two or more contiguous local 
areas in two or more States. When the Governor(s) assigns two or more 
local areas to a region, the region, per WIOA sec. 3(48), is considered 
a planning region, which is required to coordinate regional service 
strategies, regional sector initiatives, the collection and analysis of 
regional labor market data, administrative costs, transportation, 
partnership with economic develop agencies, and the negotiation of 
local performance consistent with the regional planning requirements at 
Sec.  679.510. A single local area may not be split across two planning 
regions. Local areas must be contiguous in order to be a planning 
region and effectively align economic and workforce development 
activities and resources. The Department anticipates providing 
additional guidance regarding the creation and management of interstate 
planning regions.
Section 679.220 What is the purpose of the local workforce development 
area?
    Distinct from the regional designation, WIOA also provides for 
local workforce development areas. As described above, these local 
areas may be identified individually or in combination, as regions. 
Proposed Sec.  679.220 describes the purpose of the local workforce 
development area (local area). The Governor must designate local areas 
in order to receive WIOA title I adult, dislocated worker, and youth 
allotments, as required by WIOA sec. 106. Local areas serve as a 
jurisdiction for the administration of workforce development activities 
and execution of adult, dislocated worker, and youth funds allocated by 
the State. States allocate workforce investment funds based on various 
population characteristics of the local area. Local areas may 
correspond to regions identified in WIOA sec. 106(a)(1) or may be 
smaller geographic areas within a planning region, each with its own 
Local Workforce Development Board.
Section 679.230 What are the general procedural requirements for 
designation of local workforce development areas?
    Proposed Sec.  679.230 describes the procedural requirements that 
the Governor must use for the designation or redesignation of a local 
workforce development area. Proposed Sec.  679.220 (a) through (c), 
implementing WIOA sec. 106(b)(1)(A), requires the Governor to consult 
with the State Board and CEO, and consider public comments from a wide 
range of stakeholders consistent with provisions at WIOA sec. 
102(b)(2)(e)(iii)(II) as part of the process of identifying the local 
area. The Governor has the discretion to establish the process and 
procedures to solicit comments that it determines appropriate; however 
a wide-reaching, inclusive process allows sufficient time for 
stakeholders to provide substantive comments that will enable the 
Governor to receive meaningful feedback from all interested 
stakeholders, ensuring that the Governor is able to consider all 
relevant information, data, and opinions before making a decision to 
designate or redesignate a local area.
Section 679.240 What are the substantive requirements for designation 
of local workforce development areas that were not designated as local 
areas under the Workforce Investment Act of 1998?
    Proposed Sec.  679.240 provides the substantive requirements that 
Governor must use for the designation or redesignation of local 
workforce development areas.
    Proposed Sec.  679.240(a) explains that the Governor must develop a 
policy for designation or redesignation of local workforce development 
areas, including the factors that the Governor must consider. The 
statute requires that the Governor designate local areas that ``are 
consistent'' with labor market and regional economic development areas: 
The Department interprets this to mean that within a local area, there 
must be common labor markets and economic development areas. Better 
integration between the workforce and economic development systems 
serves to best connect the employment needs of workers with the skilled 
workforce needs of employers. This section implements sec. 106(b)(1)(B) 
of WIOA.
    Proposed Sec.  679.240(b) permits the Governor to approve a local 
area designation request from any unit of local government, including a 
combination of multiple units. This provision implements sec. 106(b)(4) 
of WIOA and retains the same requirements found at 20 CFR 661.250(c). 
Proposed paragraph (c) permits the Governor to redesignate a local area 
that has been designated or redesignated under Sec.  679.240(a) or has 
been designated under Sec.  679.250(a) or (c) if the local area 
requests, and the Governor approves, the redesignation.
Section 679.250 What are the requirements for initial and subsequent 
designation of workforce development areas that had been designated as 
local areas under the Workforce Investment Act of 1998?
    Proposed Sec.  679.250 describes the requirements for initial and 
subsequent designation of local areas that had been designated as local 
areas under WIA.
    Proposed Sec.  679.250(a) implements sec. 106(b)(2) of WIOA that 
requires, during the first 2 full PYs following the enactment of WIOA, 
a Governor is to approve a request for initial designation from any 
local area designated as a local area under WIA as long as the entity

[[Page 20703]]

was designated a local area under WIA, performed successfully, and 
maintained sustained fiscal integrity for 2 years prior to the 
enactment of WIOA. This provision requires the Governor to continue the 
designation of local areas that performed well and maintained sound 
fiscal practices under WIA. If a local area that was designated under 
WIA requests initial designation under WIOA but does not meet all of 
the requirements of Sec.  679.250(a), the Governor has the discretion 
to approve the initial designation under WIOA or to redesignate the 
local area pursuant to the procedures described in Sec.  679.240.
    Proposed Sec.  679.250(b) clarifies that initial designation 
applies to PYs 2015 and 2016, as per WIOA sec. 106.
    Proposed Sec.  679.250(c), in accordance with sec. 106(b)(3) of 
WIOA, describes the requirements for the subsequent designation of 
local workforce development areas that were initially designated under 
Sec.  679.250(a). Specifically, the Governor must approve requests for 
subsequent designation as long as the local area performed 
successfully, sustained fiscal integrity, and in the case of a local 
area in a planning region, met the planning region requirements during 
the 2-year period of initial designation. Local areas that are able to 
demonstrate successful performance and fiscal integrity must be 
permitted to continue to operate and may not be redesignated without 
the consent of the Local Board and CEO in the local area.
    Proposed Sec.  679.250(d) describes the role of the Governor in 
reviewing a local area's subsequent designation. Paragraph (d)(1) 
permits the Governor to evaluate a local area at any time to ensure the 
local area continues to meet the requirements for subsequent 
eligibility at paragraph (c). Paragraph (d)(2) requires the Governor to 
review local areas to ensure they continue to satisfy the requirements 
at paragraph (2) as part of each 4-year State planning cycle. Sections 
116(g)(2)(A) and 184(b)(1) of WIOA describe the required actions that 
the Governor must take in the event that a local workforce area fails 
to meet its negotiated levels of performance or does not comply with 
administrative requirements, respectively. Under these provisions the 
Governor retains the authority to take corrective action in light of 
failure of performance or fiscal management short of redesignation, and 
is not required to redesignate a local area that has failed to maintain 
the requirements of paragraph (c). Furthermore, the Governor may 
redesignate local areas at any time with the cooperation of the CEO and 
Local Board in a given local area.
    Proposed Sec.  679.250(e) presumes that local areas will be 
considered to have requested continued designation unless the CEO and 
the Local Board directly notify the Governor that they no longer wish 
operate as a local area. This newly proposed paragraph reduces the 
administrative burden of maintaining local area status, while still 
holding local areas accountable to the requirements of paragraph (c).
    Proposed Sec.  679.250(f) specifies that the requirements for 
subsequent designation do not apply to local areas that are designated 
or redesignated under Sec.  679.240 or are single-area States 
designated under Sec.  679.270.
    Proposed Sec.  679.250(g) clarifies that rural concentrated 
employment programs are not eligible to apply for initial designation 
as a local area. WIOA allows any unit of local government (or 
combination of units of local government) to request designation as a 
local area; however, unlike under WIA, this provision does not extend 
to rural concentrated employment programs.
Section 679.260 What do the terms ``performed successfully'' and 
``sustained fiscal integrity'' mean for purposes of designating local 
areas?
    Proposed Sec.  679.260 defines the terms ``performed successfully'' 
and ``sustained fiscal integrity'' used in Sec.  679.250. This section 
implements sec. 106(e) of WIOA.
    Proposed Sec.  679.260(a) defines the term ``performed 
successfully'' for the purpose of initial designation to mean that the 
local area met or exceeded all performance levels the Governor 
negotiated with Local Board and CEO under WIA sec. 136(c) for the last 
2 full PYs before the enactment of WIOA. It also requires that the 
local area not fail any individual measure for the last 2 consecutive 
PYs before the enactment of WIOA. Proposed Sec.  679.260(a)(1) requires 
the Governor, in order to determine if a local area has performed 
successfully, to have defined the terms ``met or exceeded'' and 
``failure'' at the time the performance levels were negotiated. 
Proposed Sec.  679.260(a)(2) clarifies that the Governor may not 
retroactively apply any higher WIOA threshold to performance negotiated 
and achieved under WIA for the purposes of local area designation.
    Proposed Sec.  679.260(b) defines the term ``performed 
successfully'' for the purpose of subsequent designation to mean that 
the local area met or exceeded the levels of performance the Governor 
negotiated with Local Board and CEO for core indicators of performance 
described at WIOA sec. 116(b)(2)(A). It also requires the Governor to 
have defined the terms ``met or exceeded'' and ``failure'' in the State 
Plan.
    Proposed Sec.  679.260(a) and (b) expand on the definition at WIOA 
sec. 106(e)(1) to ensure that the initial and subsequent designation of 
local areas is conducted in a fair and transparent manner by ensuring 
that the local area's performance is judged on the contemporaneous 
standards agreed to between the State and local area at the time rather 
than under subsequently imposed performance standards.
    Proposed Sec.  679.260(c) defines the term ``sustained fiscal 
integrity'' for the purpose of determining initial and subsequent local 
area designation to mean that the Secretary has not made a formal 
determination that either the grant recipient or any other entity 
charged with expending local area funds misexpended such funds due to 
willful disregard of the requirements of the provision involved, gross 
negligence, or failure to comply with accepted standards of 
administration for the 2-year period preceding the determination.
    Proposed Sec. Sec.  679.250 and 679.260 allow for an orderly 
transition from WIA to WIOA and protects the designation status of 
local areas that meet or exceed performance targets negotiated in good 
faith under the relevant authorizing legislation while allowing the 
Governor both to oversee properly the performance of the local areas 
and take action necessary to improve the area's performance in a timely 
fashion.
Section 679.270 What are the special designation provisions for single-
area States?
    Proposed Sec.  679.270 outlines the special designation provisions 
for single-area States. Under WIOA sec. 106(d), the Governor of any 
single-area State under WIA may choose to continue to designate the 
State as a single-State area. However, proposed Sec.  679.270(b) 
clarifies that the Governor must identify the single-area status of the 
State in its Unified or Combined State Plan and proposed Sec.  
679.270(c) further clarifies that the State Board in a single-area 
State must continue to carry out the functions of the State and Local 
Boards. This section is intended to clarify single-area States' 
responsibilities and functions: Key local functions, such as 
monitoring; entering into a memorandum of understanding (MOU) with one-
stop partners; selecting one-stop operators; selecting eligible 
providers of youth activities, career services and training services; 
and

[[Page 20704]]

certifying one-stop centers, are essential to the proper functioning of 
the public workforce system and remain so within single-area States.
Section 679.280 How does the State fulfill the requirement to provide 
assistance to local areas within a planning region that wish to 
redesignate into a single local area?
    Proposed Sec.  679.280 describes how the State fulfills the 
requirement to provide assistance to local areas within a planning 
region that wish to redesignate into a single local area.
    Proposed Sec.  679.280(a) asserts that the State must authorize 
statewide funds for transition activities when all local areas in a 
planning region petition the Governor for redesignation as a single 
local area as required by WIOA sec. 106(b)(6). WIOA introduces 
redesignation assistance as a required statewide activity. This 
provision will help local areas consolidate where appropriate for the 
purposes of cost savings and streamlined service delivery.
    Proposed Sec.  679.280(b) clarifies that when statewide funds are 
exhausted in a given PY, the State may fulfill the requirement to 
provide redesignation assistance in the following PY. This section 
provides States with the flexibility to balance priorities while 
ensuring local areas receive redesignation assistance.
    Proposed Sec.  679.280(c) provides examples of the activities that 
local areas may elect to pursue with the redesignation assistance 
received from the State. However, the State may establish policy on 
what other activities local areas may use funds received for the 
purposes of redesignation or leave such determination to the local 
areas.
Section 679.290 What right does an entity have to appeal the Governor's 
decision rejecting a request for designation as a workforce development 
area?
    Proposed Sec.  679.290 outlines the appeals process for an entity 
that submits a request for initial or subsequent designation as a local 
workforce development area that is rejected by the Governor. This 
section implements sec. 106(b)(5) of WIOA.
    Proposed Sec.  679.290(a) establishes that entities that are not 
approved as local areas may follow the process established at 20 CFR 
683.640. This section is essentially unchanged from WIA. However, while 
provisions at WIOA sec. 106(b) permit any unit of local government or 
combination of units to apply for designation as a local area, the law 
does not specify that rural concentrated employment programs may apply 
for designation as a local area. The intent of this section was to 
prohibit such an arrangement under WIOA and that this prohibition 
logically applies to the appeals process.
    Proposed Sec.  679.290(b) establishes that an entity making an 
unsuccessful appeal to the State Board may request a review of the 
appeal by the Secretary of Labor if the State does not respond to the 
appeal in a timely manner or if the appeal for designation is denied by 
the State. The Department defines a `timely manner' to be 60 days after 
the submission of the appeal. This provides adequate time for the State 
to review and make a ruling on the appeal while not being so long as to 
delay unreasonably the appeal and designation processes.
    Proposed Sec.  679.290(c) summarizes the circumstances under which 
the Secretary of Labor may require an entity to be designated as a 
local area. Specifically, the Secretary may require designation upon a 
finding of either a denial of procedural rights or a finding that the 
area meets the requirements for designation. This section was updated 
from WIA to reflect that neither the `automatic' nor `temporary and 
subsequent' designation statuses exist under WIOA.
3. Subpart C--Local Boards
Section 679.300 What is the vision and purpose of the Local Workforce 
Development Board?
    Proposed Sec.  679.300 explains the purpose of the Local Board. The 
Local Board represents a wide variety of individuals, businesses, and 
organizations throughout the local area. The Local Board serves as a 
strategic convener to promote and broker effective relationships 
between the CEOs and economic, education, and workforce partners.
    The Local Board must develop a strategy to continuously improve and 
strengthen the workforce development system through innovation in, and 
alignment and improvement of, employment, training, and education 
programs to promote economic growth. Local Board members must establish 
a platform in which all members actively participate and collaborate 
closely with the required and other partners of the workforce 
development system, including public and private organizations. This is 
crucial to the Local Board's role to integrate and align a more 
effective, job-driven workforce investment system.
    Proposed Sec.  679.300(b)(1) and (2) outlines the purposes of the 
Local Board. A key goal of Federally-funded training programs is to 
prepare job seekers ready to work with marketable skills. This includes 
providing strategic and operational oversight in collaboration with 
required and other partners to help the workforce development system 
achieve the purposes outlined in WIOA sec. 2, and assist in the 
achievement of the State's strategic and operational vision and goals 
outlined in the State Plan. The Local Board must work to develop a 
comprehensive and high-quality workforce development system by 
collaborating with its workforce and education partners to improve and 
align employment, training, and education programs under WIOA.
Section 679.310 What is the Local Workforce Development Board?
    Proposed Sec.  679.310 defines the Local Workforce Development 
Board. Proposed Sec.  679.310(a) explains that the CEO in each local 
area appoints the Local Board in accordance with WIOA sec. 107(b) and 
that the Governor must certify the Local Board on a biannual basis. 
This proposed section retains the same requirements found at 20 CFR 
661.300(a).
    Proposed Sec.  679.310(b) describes that the Local Board sets 
policy within the local area in partnership with the CEO, consistent 
with State policy. This proposed section retains the same requirements 
found at 20 CFR 661.300(b).
    Proposed Sec.  679.310(c), asserts that the CEO may enter into an 
agreement with the Local Board that describes the respective roles and 
responsibilities of the parties. However, the CEO remains liable for 
funds received under title I of WIOA unless they reach an agreement for 
the Governor to act as the local grant recipient and bear such 
liability. This proposed section retains the same requirements found at 
20 CFR 661.300(c).
    Proposed Sec.  679.310(d) describes that the Local Board, in 
partnership with the CEO, are responsible for the development of the 
local plan. This proposed section retains the same requirements found 
at 20 CFR 661.120(d).
    Proposed Sec.  679.310(e) affirms that in local areas with more 
than one unit of general local government, the CEOs of the respective 
units may execute an agreement to describe their responsibilities for 
carrying out their roles and responsibilities. If the various parties 
cannot come to an agreement, the Governor may appoint the Local Board. 
This proposed section retains the

[[Page 20705]]

same requirements found at 20 CFR 661.300(3).
    Proposed Sec.  679.310(f) indicates that in single-State areas, the 
State Board must fulfill the functions of the Local Board, which the 
Department also required under the WIA regulation at 20 CFR 661.300(f). 
As required by WIOA sec. 107(c)(4)(B)(iii), the proposed section 
clarifies that the State is not required to establish or report on 
local performance measures. This clarification presents a logical 
approach to local performance because the local area performance will 
be reflected in the State performance reports.
    Proposed paragraph (g) requires the CEO to establish by-laws, 
consistent with State policy, that help improve operations of the Local 
Board. Proposed Sec.  679.310(g)(1) through (7) require that at a 
minimum the by-laws address the nomination process used by the CEO to 
elect the Local Board chair and members, term limitations and how the 
term appointments will be staggered to ensure only a portion of 
memberships expire in a given year, the process to notify the CEO of a 
board member vacancy to ensure a prompt nominee, the proxy and 
alternative designee process that will be used when a board member is 
unable to attend a meeting and assigns a designee, the use of 
technology to improve board functions, brokers relationships with 
stakeholders, and any other conditions governing appointment or 
membership on the Local Board as deemed appropriate by the CEO. In 
addition to these required elements, the CEO must include any 
additional requirements in the board's by-laws that it believes is 
necessary to ensure the orderly administration and functioning of the 
board. An effective Local Board establishes clear roles, 
responsibilities, procedures, and expectations through its by-laws, and 
that these requirements will help Local Boards to be more agile and 
proactive in reacting to board turnover, increase board participation 
when board members are not able to physically attend board meetings, 
improve board functionality, and help ensure that the public is 
informed about the operation of the board.
Section 679.320 Who are the required members of the Local Workforce 
Development Board?
    Proposed Sec.  679.320 explains that the CEO in a local area must 
appoint a Local Workforce Development Board and provides guidelines on 
requirements and options for the CEO to follow in appointing members to 
the Local Board.
    Proposed Sec.  679.320(b) requires that a majority of the Local 
Board members must represent businesses as per WIOA sec. 107(b)(2)(A). 
Business representatives include owners, chief executive or operating 
officers, and other business executives, including small businesses, 
and business organizations. As reflected in proposed paragraph (b)(2), 
WIOA requires that business representatives on the Local Board must 
represent business that provide employment opportunities in in-demand 
industry sectors or occupations as defined in WIOA sec. 3(25). 
Employers with employment opportunities in high-growth sectors are 
uniquely suited to communicate the emerging workforce needs of 
employers in these high-growth, in-demand sectors to the Local Board.
    Proposed Sec.  679.320(c) explains the required and optional member 
categories that must make up at least 20 percent of the Local Board 
membership representing labor organizations, or where they do not 
exist, employee representatives. Proposed paragraphs (c)(1) and (2) 
require that the Local Board must include two or more representatives 
of labor organizations (or other employee representatives if there are 
no labor organizations operating in the local area) and one or more 
representatives of a joint-labor management registered apprenticeship 
program (or other registered apprenticeship program if there is no 
joint labor-management program in the local area). The use of the word 
`representatives' with respect to labor organization membership 
indicates a requirement for two or more members. In areas with joint 
apprenticeship programs, the apprenticeship representative must be a 
member of a labor organization or a training director.
    In addition to these required members, proposed paragraphs (c)(3) 
and (4) explain that the CEO may appoint one or more representatives of 
CBOs with experience in addressing the employment needs of individual 
barriers to employment including organizations that serve veterans or 
that provide or support competitive integrated employment for 
individuals with disabilities, and one or more representative of 
organizations with experience addressing the employment needs of WIOA-
eligible youth, including serving OSY. While not mandatory, the two 
representative categories in proposed paragraphs (c)(3) and (4) count 
towards reaching the 20 percent threshold. Proposed Sec.  679.320(c) 
underscores both the importance of registered apprenticeship, a proven 
training strategy that effectively meets the needs of both employers 
and workers,\1\ and the role of organized labor in workforce 
development, particularly in developing registered apprenticeship 
programs.
---------------------------------------------------------------------------

    \1\ Ibid; and Kleinman, Liu, Mastri, Reed, Reed, Sattar, & 
Ziegler (2012). An Effectiveness Assessment and Cost-Benefit 
Analysis of Registered Apprenticeship in 10 States. Mathematica 
Policy Research. Prepared for the U.S. Department of Labor, 
Employment and Training Administration.
---------------------------------------------------------------------------

    Proposed Sec.  679.320(d)(1) and (2) describe the entities required 
to be on the board to provide an adult education perspective and 
representation. These sections require that Local Boards include a 
minimum of one member with experience providing adult education and 
literacy activities under title II of WIOA and at least one member from 
a higher education institution, which may include community colleges, 
that provides workforce training.
    Proposed paragraph (d)(3) sets forth the statutory requirement that 
a minimum of one Local Board member must be included from each of the 
following organizations: Economic or community development 
organizations, the State ES Office under Wagner-Peyser serving the 
local area, and programs carried out under title I of the 
Rehabilitation Act of 1973 (29 U.S.C. 720, et seq.) other than sec. 112 
or part C of that title.
    Proposed Sec.  679.320(e) provides examples of other appropriate 
optional members of the board. In addition to the entities described in 
(e)(1) through (3), proposed paragraph (e)(4) explains that the CEO may 
appoint other individuals to the board at his or her discretion. This 
provides the CEO the flexibility to assemble a Local Board that 
connects all key resources and stakeholders.
    Proposed Sec.  679.320(f) requires that Local Board members possess 
optimum policy-making authority in the organizations they represent. 
This proposed section retains the same requirements found at 20 CFR 
661.315(c).
    Proposed Sec.  679.320(g) explains the nomination criteria for 
business and labor representatives, as well as representatives of adult 
education and literacy activities under title II when there are 
multiple institutions providing these services in a local area. These 
nomination requirements are unchanged from the requirements at 20 CFR 
661.315(e), however, a formal policy ensures that business and labor 
organizations are provided the opportunity to provide input on board 
member selection. When there is more than one local area provider of 
adult education and literacy activities under title II, or multiple 
institutions of higher education providing workforce

[[Page 20706]]

investment activities as described in WIOA 107(b)(2)(C)(i) or (ii), the 
CEO must solicit nominations from those particular entities. This 
requirement provides for a representative selection process for these 
membership categories.
    Proposed Sec.  679.320(h) explains that an individual may be 
appointed as a representative of more than one entity if the individual 
meets all the criteria for representation, including the criteria 
described in paragraphs (c) through (g) of this section, for each 
entity. While such ``multiple entity'' representation may not be 
appropriate in all cases, the Department proposes to allow an 
individual to represent more than one entity, because there may be 
instances when such representation may be an effective tool for 
reducing board size while still ensuring that all entities entitled to 
representation receive effective representation.
    Proposed Sec.  679.320(i) explains that all required board members 
must have voting privileges and that the CEO may give voting privileges 
to non-required members. Voting rights allow the required board members 
to have an effect on the Local Board's key decisions and initiatives. 
This will enable the required board members to effectively represent 
the individuals and organizations of their communities.
Section 679.330 Who must chair a Local Board?
    Proposed Sec.  679.330 affirms that the Local Board must elect a 
chairperson from the business representatives on the Local Board. This 
proposed section retains the same requirements found at 20 CFR 661.320.
Section 679.340 What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?
    Proposed Sec.  679.120 explains what is meant by ``optimum policy-
making authority'' and ``demonstrated experience and expertise'' for 
members of the Local Board under sec. 107(b)(5) of WIOA. Proposed 
paragraph (a) defines an individual with ``optimum policy-making 
authority'' as someone who can reasonably be expected to speak 
affirmatively on behalf of the entity he or she represents and to 
commit that entity to a chosen course of action. In order for the 
decisions of the board to have the greatest possible impact, all board 
members must be able to speak authoritatively when committing their 
organization to a decided course of action.
    Proposed paragraphs (b)(1) through (3) define the qualifications 
that satisfy the ``experience and expertise'' requirement for Local 
Board members. The CEO has a duty to appoint only those board members 
that have the skills and practical knowledge to contribute fully to the 
strategic vision of the local area's workforce system.
Section 679.350 What criteria will be used to establish the membership 
of the Local Board?
    Proposed Sec.  679.350 affirms that the CEO appoints the Local 
Board in accordance with the criteria in WIOA sec. 107(b) and 
applicable State criteria. This proposed section retains the same 
requirements found at 20 CFR 661.325.
Section 679.360 What is a standing committee, and what is its 
relationship to the Local Board?
    Proposed Sec.  679.360 establishes the roles and responsibilities 
of standing committees within the Local Board structure. Such 
committees were not legislated in the past, are optional under WIOA, 
and may be used to assist the Local Board in carrying out its 
responsibilities as outlined in WIOA sec. 107. The Department 
encourages the use of standing committees to expand opportunities for 
stakeholders to participate in board decision-making, particularly for 
representatives of organizations that may no longer sit on the Local 
Board but continue to have a stake in the success of board decisions. 
Such committees also expand the capacity of the board in meeting 
required functions.
    Proposed paragraph (a) expressly authorizes Local Boards to 
establish standing committees that include individuals who are not 
formal members of the board, but who have expertise to advise on issues 
that support the board's ability to attain the goals of the State, 
local and regional plans, and the objective of providing customer-
focused services to individuals and businesses. The subpart provides 
examples of areas where standing committees may be particularly 
beneficial, including serving targeted groups of customers such as 
individuals with disabilities and youth, and addressing one-stop system 
issues.
    Proposed paragraph (b) provides for Local Board discretion in terms 
of what kinds of standing committees, in any, the Local Board creates.
    Proposed paragraph (c) allows Local Boards to designate an entity 
in existence on the date that WIOA was enacted, such as an effective 
youth council, to fulfill the requirements of a standing committee as 
long as the entity meets the requirements outlined in paragraph (a).
Section 679.370 What are the functions of the Local Board?
    Proposed Sec.  679.370 provides the functions of the Local Boards 
as enumerated in statute. Under WIOA, the Local Board, in partnership 
with the CEO, must perform a variety of functions to support the local 
workforce system. Many of these functions have been expanded and 
enhanced under WIOA. Proposed Sec.  661.305(a), (c), (d), (g), (h), 
(j), (o), and (p) reiterate the relevant statutory requirements at WIOA 
secs. 107(d)(1) through (3), (6), (7), (9), (12), and (13); no further 
discussion of these provisions is provided below.
    Proposed paragraph (b) discusses a new role for Local Boards that 
are part of a planning region that includes multiple local areas. This 
regulation repeats the new statutory requirement that Local Boards that 
are part of a planning region must develop and submit a regional plan 
in collaboration with the other Local Boards in the region. Under WIOA, 
the local plan is incorporated into the regional plan, where required, 
in accordance with Sec.  679.540.
    Proposed paragraph (e) explains the role of the Local Boards in 
engaging employers, promoting business representation on the board, and 
developing and implementing proven or promising strategies for meeting 
the needs of employers and workers (like industry or sector 
partnerships) and providing linkages and coordination among employers 
and the workforce system. It enhances the Local Board's role in 
engaging employers beyond what was required by WIA by requiring the 
board to develop and implement promising strategies for meeting the 
employment skill needs of workers and employers. Engaging employers 
presents an opportunity to meet the local area's labor market and 
workforce development needs and connect customers seeking jobs or 
career advancement to greater employment prospects.
    Proposed paragraph (f) requires the Local Board to connect with 
representatives of secondary and post-secondary education programs in 
the local area in order to develop and implement career pathways. This 
regulation supports the statute's focus on career pathways.
    Proposed paragraph (i) enhances the oversight role of the Local 
Board beyond what was required in WIA. It requires the Local Board to 
conduct oversight, in partnership with the CEO, of the use and 
management of funds, including

[[Page 20707]]

ensuring the appropriate management and investment of funds to maximize 
performance outcomes under WIOA sec. 116.
    Proposed paragraph (k) requires that the Local Board must negotiate 
with CLEO and required partners on the methods for funding the 
infrastructure costs of one-stop centers in the local area in 
accordance with Sec.  678.715. This provision ensures each partner in 
the one-stop system is provided resources equitably.
    Proposed paragraph (l) also expands and enhances the Local Board's 
role in the selection of eligible service providers in the local area 
which must be conducted consistent with 2 CFR part 200. The regulation 
maintains the board's role in the identification of eligible providers 
of youth workforce investment activities, but now requires, consistent 
with WIOA sec. 107(d)(10)(B), that this identification be accomplished 
through the award of grants or contracts on a competitive basis. It 
also adds that the recommendations of the youth standing committee, if 
one is established, must be taken into account. It also indicates that 
the Local Board must identify eligible providers of career services 
through the award of contracts, if the one-stop operator does not 
provide such services. This provision does not impact those services 
provided by State merit staff. The final proposed expansion in this 
subpart is the requirement that Local Boards select one-stop operators 
through the competitive process described in Sec. Sec.  678.600 through 
678.635.
    Proposed paragraph (m) describes the requirement that the Local 
Board work with the State to ensure that there are sufficient numbers 
and types of providers of career and training services in the local 
area so that consumer choice and opportunities for employment for 
individuals with disabilities are maximized.
    Proposed paragraph (n) reflects a number of new functions for the 
Local Board related to coordination with adult education and literacy 
providers in the local area. The regulation requires the Local Board to 
review applications to provide adult education and literacy activities 
under title II to determine whether such applications are consistent 
with the local plan. It also requires the board to make recommendations 
to the eligible agency to promote alignment with the local plan. 
Further information regarding Local Board coordination with adult 
education and literacy providers is provided at 34 CFR 463 which 
requires the eligible agency to establish in its competition, a 
processes by which applicants must submit an application to the Local 
Board for review prior to its submission to the eligible agency. This 
subpart also includes a role for the board in replicating and 
implementing cooperative agreements in accordance with subparagraph (B) 
of sec. 101(a)(11) of the Rehabilitation Act of 1973 (29 U.S.C. 
721(a)(11)), and implementing cooperative agreements in accordance with 
that section with the local agencies administering plans under title I 
of that Act (29 U.S.C. 720 et seq.) (other than sec. 112 or part C of 
that title (29 U.S.C. 732, 741) to enhance the provision of services to 
individuals with disabilities and other individuals.
    Proposed paragraph (q) requires the Local Board to certify one-stop 
centers in accordance with Sec.  662.600.
Section 679.380 How does the Local Board satisfy the consumer choice 
requirements for career services and training services?
    Proposed Sec.  679.380 describes how the Local Board satisfies the 
consumer choice requirements for career services and training services. 
While WIA required the Local Board to maximize consumer choice for 
training services, consumer choice for career services is a new 
requirement under WIOA. Clarification of the board's role will minimize 
confusion for one-stop managers and frontline staff.
    Proposed paragraphs (a)(1) through (3) describe the process of how 
the Local Board assists the State Board in identifying providers, 
ensures a sufficient number of providers, and provides performance and 
cost information through the one-stop system.
    Proposed paragraphs (b)(2)(i) and (ii) describe how the Local Board 
satisfies the requirement to provide consumer choice for career 
services. In general, the Local Board must decide which services are 
best provided by the one-stop operator and which services may require a 
contracted provider. Furthermore, these paragraphs require the board to 
identify a wide range of services based on the needs in the local area 
with special attention to services for individuals with disabilities 
and literacy services. Requiring the board to identify a wide array of 
potential career service providers, while still allowing the board to 
ultimately determine the career service providers, balances board 
flexibility and customer choice. There is no requirement to provide 
customers with a choice of providers for a given career service.
Section 679.390 How does the Local Board meet its requirement to 
conduct business in an open manner under the ``sunshine provision'' of 
the Workforce Innovation and Opportunity Act?
    Proposed Sec.  679.390 maintains the Local Board's requirement to 
conduct business in an open manner, but expands on the scope of what 
the public must be made aware of and requires that information be 
shared by electronic means as well as through open meetings as provided 
for in WIOA sec. 107(e). These new requirements facilitate the 
transparent functioning of the board and contribute to smoother board 
operations. This can only be accomplished by each Local Board member 
actively participating during Local Board meetings, and by developing 
effective by-laws that outline the nomination process, which includes 
steps for a prompt nominee during a vacancy, term limitations, and 
encourage the use of technology and active participation.
Section 679.400 Who are the staff to the Local Board and what is their 
role?
    Proposed Sec.  679.400 describes the Local Board's authority to 
hire staff and the appropriate roles for board staff. This proposal 
clarifies and differentiates the staff's role and requires the Local 
Board to hire only qualified staff.
    Proposed paragraph (a) authorizes the board to hire a director and 
other staff. The volunteer board may not have the capacity to fulfill 
the required board functions at WIOA sec. 107(d). Board support ensures 
these functions are achieved.
    Proposed paragraph (b) requires the board to apply objective 
qualifications to the board director. It is in the best interest of the 
public workforce system to ensure the director of the board is 
competent and experienced with workforce programs and service delivery.
    Proposed paragraph (c) limits the board staff's role to assisting 
the board fulfill the functions at WIOA sec. 107(d) unless the entity 
selected to staff the board enters into a written agreement with the 
board and CEO as noted in paragraph (e) and described more fully in 
Sec.  679.430 of this part. The reasons that the Department proposes to 
require a written agreement if the staff provide functions outside of 
those in WIOA sec. 107(d) are discussed in the preamble to Sec.  
679.430 of this part.
    Proposed paragraph (d) requires Local Boards that elect to hire a 
director to establish objective qualifications to ensure that the 
selected candidate possesses the knowledge and skills to

[[Page 20708]]

assist the board in carrying out its functions.
    Proposed paragraph (e) limits the payment of the Local Board 
director and board staff to the basic pay rate for level II of the 
Executive Schedule under sec. 5313 of title 5, U.S.C. This requirement 
ensures that board staff are compensated at a reasonable level.
Section 679.410 Under what conditions may a Local Board directly be a 
provider of career services, or training services, or act as a one-stop 
operator?
    Proposed Sec.  679.410 explains the situations in which the Local 
Board may directly act as a one-stop operator, a provider of career 
services or training services. Proposed Sec.  679.410(a)(1)(i) and (ii) 
establishes that a Local Board may act as a one-stop operator where a 
Local Board successfully participates in a competition or if the board 
meets the criteria for sole source procurement. Under both 
circumstances, as required by proposed Sec.  679.410(a)(2), 
implementing WIOA sec. 107(g)(2), the Governor and CEO must agree to 
such selection. This clarifies the interaction between sec. 
122(d)(2)(A) of WIOA, which requires that Local Boards select a one-
stop operator through a competitive process, and WIOA sec. 107(g)(2), 
which states that a Local Board can be designated as a one-stop 
operator only with the agreement of the Governor and CEO in the local 
area. One interpretation of sec. 107(g)(2) is that Local Boards, with 
approval of the Governor and CEO, could be selected as one-stop 
operators without undergoing a competitive process. However, such a 
non-competitive selection is only appropriate after a competitive 
process has been conducted as required by WIOA sec. 122(d)(2)(A). The 
Department welcomes comments regarding this interpretation.
    Proposed Sec.  679.410(a)(3) also requires that where a Local Board 
acts as a one-stop operator, the State must ensure certification of 
one-stop centers. Local Boards are required to certify one-stop 
centers; however, States must fulfill that role when a Local Board acts 
as a one-stop operator to avoid conflicts of interest with a Local 
Board certifying its own performance.
    Proposed Sec.  679.410(b) provides that a Local Board may act as a 
provider of career services only with the agreement of the CEO in the 
local area and the Governor. The Department interprets WIOA sec. 
107(g)(2) to operate as a general exception from the requirement that 
the Local Board award contracts to providers of career services 
consistent with 2 CFR part 200. A Local Board acting as a direct 
provider of services is not optimal, as the Local Board is designed to 
oversee the one-stop system and its services, not provide them. 
However, unlike the selection of one-stop operators, which are 
statutorily required to be competitively selected, there is no 
similarly clear statutory requirement for providers of career services. 
Therefore, the Department does not propose to require that a 
competition fail before the Local Board may provide career services.
    Proposed 679.410(c) specifies that a Local Board is prohibited from 
providing training services unless the Governor grants a waiver in 
accordance with WIOA sec. 107(g)(1). Proposed Sec.  679.410(c)(1) 
requires the State to develop a procedure to review waiver requests 
received from Local Boards and the limitations of the waiver that 
incorporates the criteria listed at WIOA sec. 107(g)(1)(B)(i). While 
WIA contained provisions for a similar waiver, it did not include any 
such criteria. The intent of this waiver is to provide the option for 
Local Boards to provide training services in extenuating circumstances 
only, such as rural areas with limited training providers. A formal 
procedure facilitates transparency and clarity regarding the criteria 
for the training waiver and ensures that any Local Board that applies 
is subject to the same criteria. Furthermore, the new criteria 
underscore that the waiver is not appropriate for local areas that have 
a robust network of training providers.
    Proposed Sec.  679.410(c) indicates that the local area must make 
the request to be designated as a training provider available through 
public comment for a period of 30 days or more and include those 
comments in the local area's final request to the State. The proposed 
section also outlines the timeline for approval and Governor's 
authority to revoke a waiver if the Governor determines it is no longer 
needed or the Local Board demonstrates a pattern of inappropriate 
referrals. This proposed section helps ensure that the local area is 
acting in good faith when asserting that there are insufficient 
providers in the local area and protects against a conflict of 
interest.
    Proposed Sec.  679.410(d) affirms that the general prohibitions 
that apply to Local Boards directly providing career services or 
training services also apply to board staff.
Section 679.420 What are the functions of the local fiscal agent?
    Proposed Sec.  679.420 describes the role of the local fiscal agent 
when the CEO in a local area elects to designate a fiscal agent. While 
the term `fiscal agent' was widely used under WIA, the term was never 
defined, which led to inconsistent understanding of their role and 
function throughout the workforce system. This section clarifies the 
role of a fiscal agent to create a common understanding of that role.
    Proposed paragraph (a) describes that the CEO or the Governor, 
where the Governor serves as the local grant recipient for a local 
area, may designate an entity to serve as a local fiscal agent.
    Proposed paragraph (b) provides a list of the key functions of a 
fiscal agent. The appropriate role of fiscal agent is limited to 
accounting and funds management functions rather than policy or service 
delivery. Proposed fiscal agent functions include those listed in 
paragraphs (b)(1) through (6) and (c) provide additional potential 
functions for single State areas. The Department requests comment from 
State and local stakeholders regarding appropriate functions for a 
fiscal agent.
Section 679.430 How do entities performing multiple functions in a 
local area demonstrate internal controls and prevent conflict of 
interest?
    Proposed Sec.  679.430 clarifies how entities performing multiple 
functions in a local area demonstrate internal controls and prevent 
conflict of interest. This proposed provision requires a written 
agreement with the Local Board and CEO when a single entity operates in 
more than one of the following roles: Local fiscal agent, Local Board 
staff, one-stop operator, or direct provider of career services or 
training services. The proposed paragraph clarifies how the 
organization will carry out its responsibilities while demonstrating 
compliance with WIOA and corresponding regulations, relevant OMB 
circulars, and the State's conflict of interest policy. While it may be 
appropriate in some instances for a single organization to fulfill 
multiple roles, a written agreement between the Local Board, CEO, and 
the organization fulfilling multiple roles is the best method to limit 
conflict of interest or the appearance of conflict of interest, 
minimize fiscal risk, and develop appropriate firewalls within a single 
entity performing multiple functions.
4. Subpart D--Regional and Local Plan
    WIOA provides designated regions and local workforce areas the 
responsibility and opportunity to develop employment and training 
systems tailored specifically to regional economies. These systems must 
meet the needs of the full range of learners and workers, including 
those with

[[Page 20709]]

barriers to employment. The system must also address the specific needs 
of regional employers and the skills they require. WIOA requires the 
Local Board, in partnership with the CEO, to submit a local plan to the 
Governor. If the local area is part of a planning region, the Local 
Board will submit its local plan as part of the regional plan and will 
not submit a separate local plan. The local or regional plan provides 
the framework for local areas to define how their workforce development 
systems will achieve the purposes of WIOA. The regional or local plans 
serve as 4-year action plans to develop, align, and integrate the 
region and local area's job-driven workforce development systems, and 
provides the platform to achieve the local area's visions and strategic 
and operational goals. Since the local plan is only as effective as the 
partnerships that operationalize it, it must represent a collaborative 
process among local elected officials, boards, and required and other 
partners (including economic development, education, and private sector 
partners) to create a shared understanding of the local area's 
workforce investment needs, a shared vision of how the workforce 
investment system can be designed to meet those needs, and agreement on 
the key strategies to realize this vision.
Section 679.500 What is the purpose of the regional and local plan?
    Proposed Sec.  679.500 describes the purpose of the regional and 
local plans. Proposed Sec.  679.500(a)(1) through (4) explain that the 
local plan is the primary vehicle for communicating the Local Board's 
vision for the local workforce system and aligning and integrating 
local service delivery across Federal programs in a region to foster 
better alignment of Federal investments in job training, integrate 
service delivery across programs, and ensure that the workforce system 
is job-driven and matches employers with skilled individuals. Proposed 
Sec.  679.500(b) clarifies that when a State-designated region 
encompasses two or more local areas, the regional plan must meet the 
purposes of the local plan and coordinate resources across the region 
and across local areas. This approach is intended to align resources 
between multiple Local Boards.
Section 679.510 What are the requirements for regional planning?
    Proposed Sec. Sec.  679.510, 679.520, and 679.530 describe the 
required contents of the regional plan, the approval process, and when 
the regional plan must be modified. While sec. 106(c) of WIOA clearly 
describes the required contents of the regional plan, it provides less 
detail about the approval and modification process, saying only that 
officials in the planning region must ``prepare, submit, and obtain 
approval'' of the plan. Because the local plan is a component of the 
regional plan, the Department has decided to apply the approval and 
modification requirements, including the requirement to seek public 
comment and sunshine provision, to the regional plan.
    Proposed Sec.  679.510 implements sec. 106(c) of WIOA and describes 
the State and local requirements for regional planning. Proposed Sec.  
679.510(a)(1) requires Local Boards and CEOs to participate in a 
regional planning process. In some instances, where a single local 
workforce development area comprises a region, the local area will 
carry out its planning in this context.
    Proposed Sec.  679.510(a)(2) describes the regional plan contents 
and submission process. The Local Boards and CEOs must submit a 
regional plan to the Governor for approval that includes the activities 
listed at proposed Sec.  679.510(a)(1) and incorporates the local plans 
developed for each local area. Local areas are not required to submit 
an additional local plan outside of the regional planning process. The 
coordination required for regional planning is an effective method for 
local areas to identify areas of efficiency, coordinate effective 
practices, and streamline service delivery. While the regional plan 
requires coordination of local performance negotiations with the State, 
each CEO, as required by Sec.  677.210(b) and (c) will negotiate 
performance goals with the State and will remain ultimately responsible 
for ensuring that the local area meets or exceeds those goals.
    Proposed Sec.  679.510(b) requires Local Boards to make the 
regional plan available for comment before submitting the plan to the 
Governor and describes the steps necessary to ensure adequate public 
comment. This requirement provides all affected entities and the public 
an opportunity to provide input to inform plan development.
    Proposed Sec.  679.510(b)(5) specifically requires the public 
comment process to be consistent with the `sunshine provisions' at WIOA 
sec. 107(e), which requires that the Local Boards must make the plan 
available through electronic means and open meetings. This requirement 
ensures greater transparency in the planning process, and encourage 
regions to consider efforts to maximize the transparency and 
inclusiveness of the process.
    Proposed Sec.  679.510(c) requires the State to provide technical 
assistance and labor market data to facilitate regional planning. 
Because States possess a broader understanding of labor market 
information across jurisdictions and tools for analysis that individual 
local areas may not possess, States have a responsibility to provide 
and instruct local areas on the effective use of regional labor market 
information.
Section 679.520 What are the requirements for approval of a regional 
plan?
    Proposed Sec.  679.520 describes the approval of the comprehensive 
4-year regional plan. This section requires that the Governor review 
completed plans and stipulates that unless the Governor determines that 
any of the conditions described in proposed paragraphs (a) through (c) 
are met the plan will be considered approved 90 days after submission 
of the plan to the Governor.
Section 679.530 When must the regional plan be modified?
    Proposed Sec.  679.530 describes when a regional plan must be 
modified. Proposed Sec.  679.530(a) requires the Governor to establish 
procedures governing regional plan modification, which will help ensure 
that the biannual modification of regional plans is conducted 
consistently throughout the State.
    Proposed Sec.  679.530(b) explains that the Local Boards and 
appropriate CEOs in the planning region must review the regional plan 
every 2 years and submit a modification based on significant changes in 
labor market and economic conditions and other factors including 
changes to local economic conditions, and any changes in the financing 
available to support WIOA title I and partner-provided WIOA services. 
This proposed requirement helps ensure that planning regions use their 
plans to drive economic development, sector, career pathway, and 
customer-focused service delivery strategies.
Section 679.540 How are local planning requirements reflected in a 
regional plan?
    Proposed Sec.  679.540 outlines how local planning requirements are 
reflected in a regional plan. WIOA is silent on the coordination of the 
regional and local plan, noting only that the regional plan must 
``incorporate local plans for each of the local areas in the planning 
region.'' The Department has determined that the most appropriate and 
least burdensome approach to implementing this provision is to 
incorporate the local plans within the regional plan. In this 
arrangement, the regional plan is completed in

[[Page 20710]]

cooperation with the Local Boards and CEOs in a planning region, per 
Sec.  679.510(a). Each individual Local Board and CEO will respond to 
the local planning requirements at Sec.  679.560(b) through (e) 
individually. The Local Boards and CEOs in a planning region must 
cooperate to develop a common response to the local planning 
requirements that discuss regional labor market information, as 
required by Sec.  679.540(a), and any other appropriate requirements 
permitted by the Governor per Sec.  679.540(b). When these activities 
are completed, the planning region submits one regional plan to the 
Governor that includes the common discussion of regional labor market 
information and other requirements as required by the Governor, as well 
as each local plan in a single document.
    Proposed Sec.  679.540(a) requires regional plans to include the 
items identified in Sec. Sec.  679.510 and 679.560, which implement 
secs. 106(c)(1) and 108(b) of WIOA.
    Proposed Sec.  679.540(b) specifies the Governor may issue regional 
planning guidance that allows local areas to provide a common response 
to any local requirements it deems as a shared regional responsibility, 
which may include regional economic analysis. The Department recognizes 
there are many planning requirements and encourages Governors to 
minimize the individual local area burden by reducing duplication and 
encouraging a coordinated service delivery strategy.
Section 679.550 What are the requirements for the development of the 
local plan?
    Proposed Sec.  679.550 explains the requirements for the 
development of the local plan. This section emphasizes the importance 
of collaboration and transparency in the development and submission of 
the local plan and subsequent modifications.
    Proposed Sec.  679.550(a) implements sec. 108(a) of WIOA and 
describes the general requirements for the preparation and content of 
the local plan.
    Proposed Sec.  679.550(b) requires Local Boards to make the local 
plan available for comment before submitting the plan to the Governor 
and describes the steps necessary to ensure adequate public comment. 
This requirement provides all affected entities and the public an 
opportunity to provide input to inform plan development. This section 
implements sec. 108(d) of WIOA.
    Proposed Sec.  679.550(b)(5) requires the public comment process to 
be consistent with the `sunshine provisions' at WIOA sec. 107(e) and 
proposed Sec.  679.390 and that the Local Board must make the plan 
available through electronic means and in open meetings. This 
requirement ensures transparency to the public. This provision 
implements sec. 107(e) of WIOA.
Section 679.560 What are the contents of the local plan?
    Proposed Sec.  679.560, consistent with sec. 108(b) of WIOA, 
explains what information must be included in the local plan. These 
requirements set the foundation for WIOA principles, by fostering 
strategic alignment, improving service integration, and ensuring that 
the workforce system is industry-relevant, responding to the economic 
needs of the local workforce development area and matching employers 
with skilled workers. In addressing these planning requirements, boards 
engage strategic partners to develop and implement regionally aligned 
workforce development priorities and streamlined service delivery. 
Local and regional planning also is expected to lead to greater 
efficiencies by reducing duplication and maximizing financial and human 
resources. WIOA significantly expands the content requirements for the 
local plan.
    Proposed Sec.  679.560(a)(1) specifies that the local plan must 
meet the requirements of WIOA sec. 108(b)(1). Of relevance to this 
section, the use of economic and labor market information ensures that 
the local strategies are based on a thorough understanding of the 
economic opportunities and workforce needs of the region, and inform 
the alignment of strategies to the best interests of job seekers and 
employers with the economic future of the State. Similarly, the 
contents of the plan must include an analysis of the workforce 
development activities in the region, including an analysis of the 
strengths and weaknesses of such services to address the identified 
education and skill needs of the workforce and employment needs in the 
region. A thorough assessment of the best available information or 
evidence of effectiveness and performance information for specific 
service models in the region, as well as a plan to improve the 
effectiveness of such programs by adopting proven or promising 
practices, is an important part of this assessment and strategic 
vision. In addition, the regional analyses described in this proposed 
section may be conducted in cooperation with the other local areas in a 
local planning region as part of the regional planning requirements 
described at Sec.  661.290 and must not be conducted by each local 
area.
    Proposed Sec.  679.560(a)(1)(iii), consistent with sec. 108(c) of 
WIOA permits local areas to use an existing analysis to meet the 
requirements in Sec.  679.560(a).
    Proposed Sec.  679.560(b) outlines the required contents of the 
local plan that are required by secs. 108(b)(2)-(21) of WIOA to ensure 
that a local plan presents a comprehensive, customer-focused, and 
actionable service delivery strategy. This section emphasizes alignment 
and coordination to a greater extent than that required by WIA. Except 
where noted, the requirements outlined in Sec.  679.560(b)(2) through 
(21) simply reiterate the statutory requirements without additional 
explanation.
    Proposed Sec.  679.560(b)(2) requires elaboration on the strategies 
for alignment by requiring that the Local Board describe how such 
alignment will improve access to services and to activities that lead 
to a recognized post-secondary credential. Proposed Sec.  
679.560(b)(2)(ii) explains that the Local Board must describe how they 
will work with entities carrying out core programs to facilitate the 
development of career pathways and co-enrollment, as appropriate, in 
core programs. Co-enrollment allows partners to leverage resources, 
while providing a more comprehensive service delivery strategy that 
meets the needs of customers with several barriers to employment. 
Additionally, coordination of services in a customer-focused manner 
minimizes the possibility of subsequent reentry into the public 
workforce system in cases where needed services were not provided or 
possible barriers not addressed.
    Proposed Sec.  679.560(b)(4) explains that the Local Board must 
describe how they will coordinate local workforce investment activities 
with regional economic development activities that are carried out in 
the local area and how the Local Board will promote entrepreneurial 
skills training and microenterprise services. Alignment between the 
public workforce system and local economic development activities is 
critical in order to identify and fulfill industry talent needs by 
training customers for emerging and in-demand job skills. Furthermore, 
microenterprise services refers to training for the purposes of self-
employment. This training strategy may be appropriate for individuals 
or participants with multiple barriers to employment, including persons 
with disabilities.
    Proposed Sec.  679.560(b)(5) focuses on the delivery of services 
through the one-stop delivery system in the local area

[[Page 20711]]

and requires descriptions regarding how the Local Board will ensure the 
continuous improvement of eligible providers of services, including 
through the promotion of proven and promising approaches and 
evaluation; how the Local Board will facilitate access to services, 
including in remote areas, through the use of technology and other 
means; how entities within the one-stop delivery system, including one-
stop operators and the one-stop partners, will comply with WIOA sec. 
188, if applicable, and applicable provisions of the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) regarding physical 
and programmatic accessibility; and the roles and resource 
contributions of the one-stop partners. WIOA, and the corresponding 
regulations at Sec.  678.420, establishes the roles of one-stop 
partners. These include providing access to the partner's programs 
through the one-stop system; making program funds available to maintain 
the one-stop delivery system, including infrastructure costs; providing 
applicable career services; entering into a MOU with the Local Board 
regarding one-stop operation; ongoing participation in the one-stop 
system; and providing representation on State and Local Workforce 
development boards as required and Board committees as needed. 
Additionally, one-stop partners are responsible for sharing 
infrastructure and career services costs. Documenting how one-stop 
partners will manage their shared roles and contribute to the funding 
of the one-stop in the local plan increases accountability and 
transparency.
    Proposed Sec.  679.560(b)(6) through (11) focus on coordination 
activities for improving services and avoiding duplication. Proposed 
Sec.  679.560(b)(11) reflects a new statutory requirement not contained 
in WIA that the local plan include plans, assurances and strategies for 
maximizing coordination with Wagner-Peyser Act services and other 
services provided through the one-stop system.
    Proposed Sec.  679.560(b)(12) and (13) are also new requirements 
under WIOA. Proposed Sec.  679.560(b)(12) speaks to coordination with 
adult education and literacy activities under title II of WIOA and 
requires a description of how the Local Board will carry out the review 
of local applications submitted under title II. Proposed Sec.  
679.560(b)(13) is intended to enhance the provision of services to 
individuals with disabilities through cooperative agreements, as 
defined in WIOA sec. 107(d)(11), and other collaborative efforts 
between the Local Board and the local VR entity. All such collaborative 
efforts must be described in the local plan.
    Proposed Sec.  679.560(b)(16) requires the Local Board to include 
local levels of performance that the board has negotiated with the 
Governor in the local plan. Additionally, this section proposes that 
the local plan must include the standards, process, or performance 
measures that the Local Board will use to evaluate the performance of 
the local fiscal agent where the CEO has designated such an entity. 
These proposed requirements increase transparency and public 
accountability, while helping ensure the Local Board has the 
information it needs to ensure sustained fiscal integrity of public 
funds.
    Proposed Sec.  679.560(b)(19) maintains the requirement that the 
local plan include a description of the process used by the Local Board 
to provide for public input into the development of the plan and for 
public comment on the completed plan prior to its submission. Unlike 
WIA, this regulation identifies the 30-day timeframe for public comment 
prior to submission of the plan.
    Proposed Sec.  679.560(b)(20), new to WIOA, requires a description 
of how the one-stop centers are implementing and transitioning to an 
integrated, technology-enabled intake and case management information 
system for programs carried out under WIOA and by one-stop partners.
    Proposed Sec.  679.560(b)(21) requires that the plan include the 
process by which priority of service must be applied by the one-stop 
operator, but also clarifies that such priority is for adult career and 
training services and must be given to recipients of public assistance, 
other low-income individuals, and individuals who are basic skills 
deficient. The Department is proposing to include this requirement 
under the authority to require additional reporting, recordkeeping, and 
investigations. Including the priority service policy in the local plan 
will help ensure a more uniform application of the policy throughout 
the local area.
    As permitted by sec. 108(b)(22) of WIOA, proposed Sec.  679.560(c) 
requires that the plan include any additional information required by 
the Governor.
    Proposed Sec.  679.560(d) recommends that the local plan identify 
the portions of the local plan that the Governor has designated as 
appropriate for common response among all local areas in a planning 
region, as per the regulations at 20 CFR 679.540.
    Proposed Sec.  679.560(e) reflects the requirement in WIOA sec. 
108(e) that any comments submitted during the public comment period 
that represent disagreement with the plan must be submitted with the 
local plan.
Section 679.580 When must the local plan be modified?
    Proposed Sec.  679.580(a) requires the Governor to establish 
procedures governing local plan review and modification to ensure that 
the biannual review and modification of local plans is conducted 
consistently throughout the State.
    Proposed Sec.  679.580(b) explains that the Local Board and 
appropriate CEOs must review the local plan every 2 years and submit a 
modification as needed, based on significant changes in labor market 
and economic conditions and other factors including changes to local 
economic conditions, changes in the financing available to support WIOA 
title I and partner-provided WIOA services, changes to the Local Board 
structure, or a need to revise strategies to meet performance goals. 
This requirement is consistent with WIOA sec. 108(a). This proposed 
requirement helps ensure that local areas use their plans to drive 
service delivery strategies and the activities the local area is 
performing remains consistent with the plan.
Section 679.570 What are the requirements for approval of a local plan?
    Proposed Sec.  679.570 describes the approval of the comprehensive 
4-year local plan. Proposed Sec.  679.570(a) requires that the Governor 
review completed plans and stipulates that unless the Governor 
determines that the conditions described in paragraphs (a)(1) through 
(3) are met the plan will be considered approved 90 days after 
submission of the plan to the Governor. This section implements sec. 
108(e) of WIOA.
    Proposed Sec.  679.570(b) outlines the processes, roles, and 
responsibilities for situations in which the State is a single local 
area. Proposed Sec.  679.570(b)(1) clarifies the State must incorporate 
the local plan in the State's Unified or Combined State Plan submitted 
to DOL. Proposed Sec.  679.570(b)(2) states that the Secretary of Labor 
will perform the roles assigned to the Governor as they relate to local 
planning activities. Proposed Sec.  679.570(b)(3) indicates the 
Secretary of Labor will issue planning guidance for single area States. 
This section implements sec. 106(d) of WIOA.
    The Department recognizes that the development of the local plan is 
dependent on several other essential State and local WIOA 
implementation activities and that local areas may not be

[[Page 20712]]

able to respond fully to each of the required elements of the local 
plan in the timeframe provided. The Department seeks comment on the 
scope of the challenges local areas may face regarding regional and 
local planning, and potential actions that the Department can take to 
help local areas address these challenges.
5. Subpart E--Waivers/WorkFlex (Workforce Flexibility Plan)
    This subpart describes the statutory and regulatory waiver 
authority provided by WIOA sec. 189(i), and the requirements for 
submitting a Workforce Flexibility Plan under WIOA sec. 190. WIOA 
provides States the flexibility to request a waiver of program 
requirements in order to implement new strategic goals for the 
improvement of the statewide workforce development system and to 
provide better customer service in exchange for accountability for 
expected programmatic outcomes. A Workforce Flexibility plan provides 
additional flexibility to the State. In general, a State with an 
approved Workforce Flexibility plan is given the authority to identify 
local level provisions to waive without further approval from the 
Secretary of Labor to achieve outcomes specified in the plan.
    A description of what provisions of WIOA and Wagner-Peyser may and 
may not be waived is included, along with an explanation of the 
procedures for requesting a waiver. The subpart also describes what may 
and may not be waived under a Workforce Flexibility Plan, and the 
procedures for obtaining approval of a plan. The WIOA requirements for 
obtaining approval for a waiver or Workforce Flexibility Plan are 
similar to those in WIA secs. 189(i) and 192, respectively; therefore, 
many of the proposed regulations are the same as the regulations 
implementing WIA.
Section 679.600 What is the purpose of the General Statutory and 
Regulatory Waiver Authority in the Workforce Innovation and Opportunity 
Act?
    Proposed Sec.  679.600(a) explains that the purpose of the general 
statutory and regulatory waiver authority, provided under WIOA sec. 
189(i)(3), is to provide flexibility to States and local areas to 
enhance their ability to improve the statewide workforce investment 
system to carry out WIOA's goals and purposes.
    Proposed Sec.  679.600(b) explains that a waiver may be requested 
to address impediments to a strategic plan that is consistent with the 
purposes of title I of WIOA, which are identified at Sec.  675.100(a) 
through (h).
Section 679.610 What provisions of the Workforce Innovation and 
Opportunity Act and the Wagner-Peyser Act may be waived, and what 
provisions may not be waived?
    Proposed Sec.  679.610(a) implements WIOA sec. 189(i)(3)(A)(i), and 
explains that the Secretary may waive for a State or local area any of 
the statutory or regulatory requirements of WIOA title I, subtitles A, 
B, and E, except for the requirements listed in paragraphs (a)(1) 
through (12). As noted in this section, the purposes of title I of WIOA 
are described at 20 CFR 675.100(a) through (h). The Department will 
provide examples of requirements that it will not waive in subsequently 
issued guidance.
    Proposed Sec.  679.610(b) follows WIOA sec. 189(i)(3)(A)(ii), and 
explains that the Secretary may waive the statutory or regulatory 
requirements of Wagner-Peyser secs. 8 through 10, except for the 
requirements listed in paragraphs (b)(1) and (2).
Section 679.620 Under what conditions may a Governor request, and the 
Secretary approve, a general waiver of statutory or regulatory 
requirements under the Workforce Innovation and Opportunity Act?
    Proposed Sec.  679.620(a) through (f) implements WIOA sec. 
189(i)(3) and describes the conditions under which a Governor may 
request, and the Secretary may approve a waiver of statutory or 
regulatory requirements.
    Proposed Sec.  679.620(a) explains that the Secretary will issue 
guidelines on waiving WIOA and Wagner-Peyser requirements. States will 
be required to follow the Secretary's guidelines, which supplement the 
requirements listed in 20 CFR 679.600 through 679.620. The guidelines 
will be issued contemporaneously with State planning guidance. This 
proposed section retains the same requirements found at 20 CFR 
661.420(f).
    Proposed Sec.  679.620(b) explains that the Governor may request a 
general waiver in consultation with the appropriate CEOs by submitting 
a waiver plan which accompanies the State's WIOA 4-year Unified or 
Combined State Plan, 2-year modification, or by directly submitting a 
waiver plan at any time after a State's WIOA Plan is approved. This 
approach is consistent with WIOA secs. 102 and 103, which require the 
State to submit either a 4-year Unified or Combined State Plan.
    Proposed Sec.  679.620(c) explains that a Governor's waiver request 
may seek waivers for the entire State or for one or more local areas 
within the State. This proposed section retains the same requirements 
found at 20 CFR 661.420(b).
    Proposed Sec.  679.620(d) lists the required components of a waiver 
plan for the improvement of the statewide workforce development system 
and includes the requirements of WIOA sec. 189(i)(3)(B). Specifically, 
the plan must identify the statutory or regulatory requirements that 
are requested to be waived, and the goals that the State or local area 
intend to achieve as a result of the waiver. The plan must also 
describe the actions that the State or local area has taken to remove 
State or local statutory or regulatory barriers; the goals of the 
waiver and the expected programmatic outcomes if the waiver is granted; 
the individuals affected by the waiver; and the processes used to 
monitor the progress in implementing the waiver, provide notice to any 
Local Board affected by the waiver, and provide any Local Board 
affected by the waiver an opportunity to comment on the request.
    Proposed Sec.  679.620(d)(1) requires that the waiver plan explain 
how the goals of the waiver relate to the Unified or Combined State 
Plan. Waivers must support State strategies as enumerated in the State 
Plan. Waivers are not separate or detached from the Unified or Combined 
State Plan: An approved waiver constitutes a modification of the State 
Plan.
    Additionally, as required by Sec.  679.620(d)(4), the waiver plan 
must describe how the waiver will align with the Department's 
priorities, such as supporting employer engagement, connecting 
education and training strategies, supporting work-based learning, and 
improving job and career results. The Department's priorities may 
change and evolve to reflect major changes in the economy, changes in 
the needs of the workforce, and new developments in service strategy 
approaches. This new requirement ensures that the Department is issuing 
waivers that align with and help achieve the priorities of the 
Department. As noted in Sec.  679.620(d)(4)(v), a more complete list of 
current priorities will be articulated in future guidance.
    Proposed Sec.  679.620(d)(5) requires the waiver plan to generally 
describe the individuals affected by the proposed waiver. This section 
specifically requires that the plan describe how the waiver will impact 
services for disadvantaged populations and individuals with multiple 
barriers to employment. One of the primary purposes of WIOA is to 
increase and enhance education, employment, and

[[Page 20713]]

training opportunities for individuals with barriers to employment, 
including low-income individuals, individuals with disabilities, the 
Native American population, and the other groups identified in sec. 
3(24) of the Act. The Department has added this specific requirement to 
ensure that the State, as part of its waiver request, considers the 
employment and training needs of these groups and how the proposed 
waiver would affect these populations.
    An additional requirement at proposed Sec.  679.620(d)(6)(iv) is 
that the plan must describe the processes used to ensure meaningful 
public comment, including comment by business and organized labor. This 
requirement was included to ensure as transparent a process as 
possible, to make sure that the public is given an opportunity to voice 
their concerns or support of potential changes in the public workforce 
system, while the Governor is afforded an opportunity to reflect on the 
opinions of the public before proceeding with a waiver request. This 
proposed section retains the same requirements found at 20 CFR 
661.420(c)(5)(iv).
    The Governor must also describe, per Sec.  679.620(d)(6)(v), the 
process used to collect and report information about the goals and 
outcomes achieved under the waiver plan in the State's WIOA Annual 
Report. The Department approves waivers in order to assist States and 
local areas in achieving goals and outcomes that will improve the 
statewide workforce development system. This collection and reporting 
requirement holds States accountable for the goals and outcomes to be 
achieved with the approved waivers and provides a regular and public 
assessment of the effectiveness of States and local areas in doing so.
    Finally, proposed Sec.  679.620(d)(7) explains that if a waiver is 
up for renewal, the Secretary may require that States provide the most 
recent data available about the outcomes achieved under the existing 
waiver. This requirement will ensure that the Department has the most 
recent, relevant information before deciding whether to renew a waiver. 
As part of its decision the Department may take other factors into 
account when deciding to renew or deny a waiver.
    Proposed Sec.  679.620(e) specifies that the Secretary will issue a 
decision on a waiver request within 90 days of the receipt of the 
waiver, consistent with WIOA sec. 189(i)(3)(C).
    Proposed Sec.  679.620(f) implements the requirements of WIOA secs. 
189(i)(C)(i) and (ii), and explains that the Secretary will approve a 
waiver request only to the extent that the Secretary determines that 
the requirements for which a waiver is requested impede the ability of 
either the State or local area to implement the State's plan to improve 
the statewide workforce investment system, and the State has executed a 
MOU with the Secretary requiring the State to meet, or ensure that the 
local area meets, agreed-upon outcomes and to implement other 
appropriate measures to ensure accountability. This section also makes 
approval of the waiver contingent on the Secretary's determining that 
the waiver plan meets all of the requirements of WIOA sec. 189(i)(3) 
and Sec. Sec.  679.600 through 679.620. This proposed section retains 
the same requirements found at 20 CFR 661.420(e), except that the 
statutory reference has changed from sec. 189(i)(4) to sec. 189(i)(3).
    Consistent with current practice, proposed Sec.  679.620(g) 
authorizes the Secretary to approve a waiver for as long as the 
Secretary determines is appropriate; however, the duration of the 
waiver may not exceed the duration of a State's current Unified or 
Combined State Plan. For example, a waiver granted during the third 
year of the Plan would have to be reconsidered as part of the 
subsequent plan submission and approval cycle, at the latest. By 
limiting the duration of the waiver, the Department will be able to 
ensure that the waiver is consistent with the goals of the State's plan 
and remains consistent with the priorities of the Department.
    Proposed Sec.  679.620(h) gives the Secretary the authority to 
revoke a State's waiver under certain circumstances. The Secretary has 
an obligation to oversee the implementation and performance of States 
under their State plan, including any waivers granted by the 
Department. As part of this responsibility, the Department proposes to 
allow the Secretary to revoke a waiver granted under this section if 
the State fails to meet the agreed upon outcomes and measures, the 
State fails to comply with the terms and conditions of the MOU or other 
document that includes the terms and conditions of the waiver, and if 
the Secretary determines that the waiver no longer meets any of the 
requirements of Sec. Sec.  679.600 through 679.620. Limiting the 
Secretary's authority to revoke to these circumstances balances the 
State's need for flexibility with the Secretary's duty to oversee the 
implementation of the waiver.
Section 679.630 Under what conditions may the Governor submit a 
Workforce Flexibility Plan?
    Proposed Sec.  679.630 describes the conditions under which the 
Governor may submit a workforce flexibility (work-flex) plan.
    Proposed Sec.  679.630(a) includes the requirements of WIOA sec. 
190(a), and explains that a State may submit a workforce flexibility 
plan for approval by the Secretary, under which three categories of 
statutory or regulatory requirements can be waived.
    Proposed Sec.  679.630(a)(1), implementing WIOA sec. 190(a)(1), 
permits a State to waive any of the statutory or regulatory 
requirements that are applicable to local areas under WIOA title I (if 
the local area requests the waiver), except for the requirements listed 
in proposed paragraphs (a)(1)(i) through (iv). In addition to the 
statutory exceptions, this proposed section adds the requirement that 
any of the statutory provisions essential to WIOA's title I purposes 
cannot be waived.
    The second category, described in proposed Sec.  679.630(a)(2), and 
implementing WIOA sec. 190(a)(2), explains that any of the statutory or 
regulatory requirements applicable to the State under Wagner-Peyser Act 
secs. 8 through 10 may be waived, except for requirements listed at 
Sec.  679.630(a)(2)(i) and (ii). This proposed section retains the same 
requirements found at 20 CFR 661.430(a)(2).
    Proposed Sec.  679.630(a)(3), implementing WIOA sec. 190(a)(3), 
permits waiver of the statutory or regulatory requirements applicable 
under the Older Americans Act of 1965 to State agencies on aging with 
respect to activities carried out using funds allotted under sec. 
506(b) of the Older Americans Act, except the for requirements 
identified at Sec.  679.630(a)(3)(i) through (iv).
    Proposed Sec.  679.630(b) explains what States are required to 
include in their workforce flexibility plan.
    Proposed Sec.  679.630(b)(1) and (3) implement the requirements at 
WIOA sec. 190(b)(1), and specify that a State workforce flexibility 
plan must include a description of the process by which local areas in 
the State may submit and obtain State approval of applications for 
waivers, and the requirements of title I of WIOA that are likely to be 
waived by the State under the plan.
    Proposed Sec.  679.630(b)(2) adds the requirement that the plan 
include a description of the criteria that the State will use to 
approve local area waiver requests and how such requests support 
implementation of the goals identified

[[Page 20714]]

in the State plan. These criteria must be addressed in the waiver 
review process discussed at Sec.  679.630(b)(1). This requirement 
ensures that all local waiver requests are evaluated consistently by 
the State.
    Proposed Sec.  679.630(b)(4) implements the requirements of WIOA 
sec. 190(b)(2) and requires a description of the Wagner-Peyser Act 
secs. 8 through 10 that are proposed for waiver, if any. This proposed 
section retains the same requirements found at 20 CFR 661.430(c)(3).
    Proposed Sec.  679.630(b)(5) implements the requirements of WIOA 
sec. 190(b)(3) and requires a description of the requirements of the 
Older Americans Act that are proposed for waiver, if any. This proposed 
section retains the same requirements found at 20 CFR 661.430(c)(4).
    Proposed Sec.  679.630(b)(6) implements the requirements of sec. 
190(b)(4) of WIOA by requiring that the plan describe the outcomes to 
be achieved by the waivers. The section explains that ``outcomes'' 
include, when appropriate, revisions to adjusted levels of performance 
included in the State or local plan under WIOA title I, and a 
description of the data or other information the State will use to 
track and assess outcomes. This provision allows the Department to 
measure more effectively the impact of waivers. For some waivers, it 
may be difficult to make a direct connection between the waiver and a 
direct impact on performance; in those instances the State must discuss 
the impact of a waiver on performance to the extent that the State has 
available data.
    Proposed Sec.  679.630(b)(7) implements WIOA sec. 190(b)(5) and 
requires that the plan include the measures to be taken to ensure 
appropriate accountability for Federal funds in connection with the 
waivers. This proposed section retains the same requirements found at 
20 CFR 661.430(b)(6).
    Proposed Sec.  679.630(c) explains that a State's workforce 
flexibility plan may accompany the State's Unified or Combined State 
Plan, the required 2-year modification of the State's Unified or 
Combined State Plan, or may be submitted separately as a plan 
modification. This requirement emphasizes that the State may submit a 
workforce-flexibility plan at any time.
    Proposed Sec.  679.630(d) explains that the Secretary may approve a 
workforce flexibility plan consistent with a period of approval of the 
State's Unified or Combined State Plan, and not more than 5 years. For 
example, if a workflex plan is approved in the third year of a 4-year 
Unified Plan, the approval would be for the remainder of the period 
covered by the plan and then would need to be reconsidered as part of 
the subsequent Unified Plan or Combined Plan. Approving a workforce 
flexibility plan for the life of a currently approved Unified or 
Combined State Plan ensures that the waivers granted under the plan are 
consistent with the strategies outlined in the State Plan. The period 
of up to 5 years is consistent with sec. 190(c) of WIOA.
    Proposed Sec.  679.630(e) implements WIOA sec. 190(d) and requires 
the State to provide notice and opportunity for comment on the proposed 
waiver request to all interested parties and the general public before 
submitting the workforce flexibility plan to the Secretary. This 
proposed section retains the same requirements found at 20 CFR 
661.430(e).
    Proposed Sec.  679.630(f) explains that the Secretary will issue 
guidelines under which States may request designation as a workflex 
State. This proposed section retains the same requirements found at 20 
CFR 661.430(f) and notes that the Secretary's guidelines may include 
requirements for a State to implement an evaluation of the impact of 
work-flex in that State.
Section 679.640 What limitations apply to the State's Workforce 
Flexibility Plan authority under the Workforce Innovation and 
Opportunity Act?
    Proposed Sec.  679.640 explains the limitations that apply to the 
State's Workforce Flexibility Plan authority under WIOA.
    Proposed Sec.  679.640(a)(1) specifies that under work-flex waiver 
authority, a State must not waive WIOA, Wagner-Peyser Act, or Older 
Americans Act requirements which are excepted from the work-flex waiver 
authority and described in Sec.  679.630(a). This proposed section 
retains the same requirements found at 20 CFR 661.440(a)(1).
    Proposed Sec.  679.640(a)(2) explains that requests to waive title 
I of WIOA requirements that are applicable at the State level may not 
be granted under work-flex waiver authority granted to a State. These 
requests may only be granted by the Secretary under the general waiver 
authority which is described at Sec. Sec.  679.610 through 679.620. The 
Department included this provision to emphasize that work-flex waivers 
are issued under separate authority than general waivers, and that 
States may not use work-flex waiver authority as a substitute for the 
general State-level waivers available under sec. 189(i)(3). This 
proposed section retains the same requirements found at 20 CFR 
661.440(a)(2).
    Proposed Sec.  679.640(b) expands on Sec.  679.630(b)(6) by 
explaining that once approved the Secretary may terminate a work-flex 
designation if the State fails to meet agreed-upon outcomes or the 
terms and conditions contained in its workforce flexibility plan. The 
Department included this provision to emphasize that the Department 
reserves the authority to terminate a workflex plan if a State is not 
meeting the terms and conditions agreed to between the Department and 
the State, including the relevant performance outcomes.

D. Part 680--Adult and Dislocated Worker Activities Under Title I of 
the Workforce Innovation and Opportunity Act

1. Introduction
    In this part of the proposed rule, the Department describes 
requirements relating to the services that are available for adults and 
dislocated workers under WIOA. Adult services are provided to job 
seekers who are at least 18 years old; the statute and the proposed 
rule, in providing for such services, establish a priority for serving 
low-income individuals, participants on public assistance, and 
individuals lacking basic work skills. Dislocated worker services are 
targeted for workers who are unemployed and have lost a job, through no 
fault of their own, sometimes through mass layoffs that happen during 
the business cycle. The goal of these services is to provide for the 
return of these individuals to quality employment. Dislocated workers 
generally include an individual who:
     Has been terminated or laid off, or has received a notice 
of termination or layoff from employment;
     Is eligible for or has exhausted entitlement to UC or has 
been employed for a duration sufficient to demonstrate attachment to 
the workforce but is not eligible for UC due to insufficient earnings 
or works for an employer not covered under State UC law; and
     Is unlikely to return to a previous industry or 
occupation.
    Under WIOA, adults and dislocated workers may access career 
services and training services. WIOA provides for a workforce system 
that is universally accessible, customer centered, and training that is 
job-driven. WIOA will provide for career and training services at the 
nation's nearly 2,500 one-stop centers. Training is supported through a 
robust ETPL, comprised of entities with a proven capability of securing 
participants with quality employment. WIOA also provides enhanced 
access

[[Page 20715]]

and flexibility for work-based training options, such as OJT, 
customized training, and incumbent worker training. In this part, the 
Department also discusses supportive services and needs-related 
payments that can be provided, based on customer needs, to enable them 
to participate in WIOA career and training services.
2. Subpart A--Delivery of Adult and Dislocated Worker Activities Under 
Title I of the Workforce Innovation and Opportunity Act
Introduction
    This subpart discusses the role of WIOA adult and dislocated worker 
services through the one-stop delivery system. The one-stop delivery 
system is the foundation of the workforce system. The system provides 
universal access to career services to meet the diverse needs of adults 
and dislocated workers. The grant recipient(s) for the adult and 
dislocated worker program is a required partner in the one-stop 
delivery system and is subject to the required partner responsibilities 
set forth in Sec.  678.415.
    Career and training services, tailored to the individual needs of 
jobseekers, form the backbone of the one-stop delivery system. While 
some jobseekers may only need self-service or other basic career 
services like job listings, labor market information, labor exchange 
services or information about other services, some jobseekers will need 
services that are more comprehensive and tailored to their individual 
career needs. These services may include comprehensive skills 
assessments, career planning, and development of an individual 
employment plan that outlines the needs and goal of successful 
employment. Under WIA, career services were identified as core and 
intensive services and generally participants would go through each 
level of service in order to eventually receive training. WIOA 
clarifies that individuals receiving services in the one-stop centers 
must receive the service that is needed to assist the individual to 
meet his or her job search goals, and does not need to follow a fixed 
sequence of services that may not be necessary to effectively serve the 
individual.
    Under WIOA, the Department proposes to classify career services 
into two categories: Basic and individualized career services. This 
grouping is not designed to create barriers to training, but rather 
identifies the importance that these two types of career services can 
have in helping individuals obtain employment. Basic career services 
must be made available to all job seekers and include services such as 
labor exchange services, labor market information, job listings, and 
information on partner programs. Individualized career services 
identified in WIOA and described in these proposed regulations are to 
be provided by local areas as appropriate to help individuals to obtain 
or retain employment.
    Under WIA, participants often were required to undergo a sequence 
of core and intensive services in order to receive training. WIOA 
clarifies that there is no sequence of service requirement in order to 
receive training. Training is made available to individuals after an 
interview, assessment or evaluation determines that the individual 
requires training to obtain employment or remain employed. Supportive 
services, including needs-related payments, can be essential to enable 
individuals to participate in career and training services.
Section 680.100 What is the role of the adult and dislocated worker 
programs in the one-stop delivery system?
    Proposed Sec.  680.100 directs that the one-stop system is the 
foundational system through which adult and dislocated worker program 
services are provided to eligible individuals. WIOA merges the 
categories of core services and intensive services under WIA into the 
category of career services.
Section 680.110 When must adults and dislocated workers be registered 
and considered a participant?
    Proposed Sec.  680.110 addresses the important distinction between 
registration and participation--two separate actions in the process by 
which adults and dislocated workers seek direct, one-on-one staff 
assistance from the one-stop system. The distinction is important for 
recordkeeping and program evaluation purposes. Individuals who are 
primarily seeking information are not treated as participants and their 
self-service or informational search requires no registration. When an 
individual seeks more than minimal assistance from staff in taking the 
next step towards self-sufficient employment, the person must be 
registered and eligibility must be determined. To register, as defined 
in Sec.  675.300, is the point at which information that is used in 
performance information begins to be collected. Participation is the 
point at which the individual has been determined eligible for program 
services and has received or is receiving a WIOA service, such as 
career services, other than self-service or informational service and 
is the point at which an individual is to be included in performance 
calculations for the primary indicators in 20 CFR part 681.
    Proposed Sec.  680.110(a) describes the registration process for 
collecting information to support a determination of eligibility for 
the WIOA adult and dislocated worker programs. This section explains 
that registration can be done electronically, through interviews, or 
through an application. This section proposes to distinguish the term 
``participation'' from registration by providing that participation 
occurs after IC and eligibility determination, when an individual 
receives a WIOA service, other than self-service or informational 
activities.
    Proposed Sec.  680.110(b) requires that adults and dislocated 
workers who receive services other than self-service and informational 
activities must be registered and considered a participant for WIOA 
title I services.
    Proposed Sec.  680.110(c) maintains the requirement in WIA 
regulation Sec.  663.105(c) that EO data be collected on every 
individual who is interested in being considered for WIOA title I 
financially assisted aid, benefits, services, or training, and who has 
signified that interest by submitting personal information in response 
to a request from the service provider.
Section 680.120 What are the eligibility criteria for career services 
for adults in the adult and dislocated worker programs?
    An individual must be 18 years of age or older to receive career 
services in the adult program. Priority for individualized career 
services and training services funded with title I adult funds must be 
given to low-income adults and public assistance recipients and 
individuals who are basic skills deficient, in accordance with WIOA 
sec. 134(c)(3)(E) and proposed Sec.  680.600.
Section 680.130 What are the eligibility criteria for career services 
for dislocated workers in the adult and dislocated worker programs?
    Proposed Sec.  680.130(a) states that an individual must meet the 
definition of ``dislocated worker'' in WIOA sec. 3(15) to receive 
career services in the dislocated worker program.
    Proposed Sec.  680.130(b) provides that Governors and Local Boards 
may develop policies and procedures for one-stop operators to use in 
determining a dislocated worker's eligibility for career services 
consistent with the definitions provided in the statute,

[[Page 20716]]

regulations and any guidance issued by the Secretary.
    Proposed Sec.  680.130(b)(1) and (2) allows for Governors and Local 
Boards to develop policies and procedures for what constitutes a 
``general announcement'' of a plant closing. These policies and 
procedures could include policies and procedures for what constitutes a 
``general announcement'' of a plant closing or for what constitutes 
``unemployed as a result of general economic conditions in the 
community in which the individual resides or because of natural 
disasters'' for individuals who are self-employed, including family 
members and ranch hands.
Section 680.140 What Workforce Innovation and Opportunity Act title I 
adult and dislocated worker services are Local Boards required and 
permitted to provide?
    Proposed Sec.  680.140 describes generally the availability of 
funds for use in providing services for adult and dislocated workers 
under title I of WIOA. Local areas have significant flexibility when 
providing services with adult and dislocated worker funds. In addition 
to the required career and training services, local areas may use these 
funds to provide additional job seeker services, business services, as 
well as facilitate enhanced coordination between other partner programs 
and entities at the State and local level. Local areas can use these 
funds to develop new types of technical assistance, develop new intake 
procedures, test new procurement methods which may lead to better 
outcomes for jobseekers, and ensure robust services to businesses 
throughout the workforce system.
    Paragraph (a) provides that WIOA title I adult and dislocated 
worker funds to local areas must be used to provide career and training 
services through the one-stop delivery system. Local areas have 
discretion in the appropriate mix of services, but both career and 
training services must be made available through the one-stop system 
for provision to eligible individuals served through the system.
    Paragraph (b) describes the services that may be provided with WIOA 
title I adult and dislocated worker funds in local areas.
    Subparagraph (b)(1) identifies ``Job Seeker Services.'' These 
services include customer support activities to help individuals with 
barriers to employment, training programs for displaced homemakers and 
individuals training for nontraditional occupations, work support 
activities for low-wage workers, supportive services and needs-related 
payments, and providing transitional jobs to individuals with barriers 
to employment who are chronically unemployed or have an inconsistent 
work history.
    Paragraph (b)(2) identifies ``Employer Services.'' These services 
include customized screening and referral of qualified participants in 
training to employers, customized employment-related services to 
employers, and business services.
    Paragraph (b)(3) identifies ``Coordination Activities.'' 
Coordination is required among training and employment activities under 
WIOA, child support agencies and services, Department of Agriculture 
extension programs, facilitating remote access by using technology and 
the one-stop delivery system, economic development agencies, linkages 
between the public workforce system and employers and those between the 
one-stop delivery system and unemployment insurance programs, and 
organizations that provide services to individuals with disabilities.
    Paragraph (b)(4) authorizes local areas to enter into pay-for-
performance contracts as part of a training strategy. Local areas may 
use up to 10 percent of their total adult and dislocated worker funds 
under this procurement method.
    Paragraph (b)(5) provides for technical assistance for one-stop 
operators, partners, and ETPs regarding the provision of services to 
individuals with disabilities.
    Paragraph (b)(6) provides for local areas to adjust the economic 
self-sufficiency standards for local areas. Levels of self-sufficiency 
may vary by local area and the local economy; this flexibility allows 
local areas to tailor their services in a way that works in their local 
economy.
    Paragraph (b)(7) provides for the implementation of promising 
services to workers and employers. Local areas can build upon promising 
practices to improve service delivery to both job seekers and 
employers.
    Paragraph (b)(8) provides for the use of funds for incumbent worker 
training. Local areas can use up to 20 percent of their combined adult 
and dislocated worker funds to do incumbent worker training consistent 
with subpart F of this part.
Section 680.150 What career services must be provided to adults and 
dislocated workers?
    At a minimum, all of the basic career services described in WIOA 
sec. 134(c)(2)(A)(i)-(xi) and Sec.  678.430(a) must be provided in each 
local area through the one-stop delivery system. These services include 
referrals to partner programs, initial assessments, and labor exchange 
services.
    In addition, services described in WIOA sec. 134(c)(2)(A)(xii) and 
Sec.  678.430(b), such as career counseling and the development of an 
individual employment plan, must be made available if appropriate for 
an individual to obtain or retain employment. These services are 
categorized as ``Individualized Career Services'' in Sec.  678.430(b). 
An individual employment plan is discussed in connection with proposed 
Sec.  680.180.
    Appropriate follow-up services must be made available to a 
participant placed in unsubsidized employment for a minimum of 12 
months following the participant's first date of employment. Follow-up 
services can be useful for participants in order to maintain 
employment. One-stop staff can provide workplace information and tips 
for success in a workplace environment. Additionally, follow-up 
services provide a continuing link between the participant and 
workforce system; these services allow the one-stop to assist with 
other services the participant may need once he or she obtains 
employment. Examples may include assistance with employer benefits, 
health insurance, and financial literacy and budgeting assistance.
Section 680.160 How are career services delivered?
    Proposed Sec.  680.160 explains that career services must be 
provided through the one-stop delivery system. Career services may be 
provided by the one-stop operator or through contracts with service 
providers approved by the Local Board. A Local Board may not be the 
provider of career services unless it receives a waiver from the 
Governor and meets other statutory and regulatory conditions.
Section 680.170 What is an internship or work experience for adults and 
dislocated workers?
    Proposed Sec.  683.170 defines an internship or work experience as 
a planned, structured, time-limited learning experience that takes 
places in a workplace. An internship or work experience may be paid or 
unpaid, as appropriate. An internship or work experience may be 
provided in the private for-profit, non-profit, or public sectors. 
Labor standards apply to any internship or work experience in which an 
employee/employer relationship exists under applicable law. The 
Department recognizes the role work experiences and internships play in

[[Page 20717]]

helping individuals obtain the skills they need to succeed in the 
workplace. An internship or work experience for a participant in WIOA 
is classified as an Individualized Career Service as described in Sec.  
678.430(b). Internships and work experiences provide a helpful means 
for an individual to gain experience that leads to unsubsidized 
employment.
Section 680.180 What is the individual employment plan?
    Proposed Sec.  680.180 explains that an individual employment plan 
is an individualized career service, as described in Sec.  678.430(b), 
jointly developed by the participant and career planner, that may be 
appropriate for an individual. The plan includes an ongoing strategy to 
identify employment goals, achievement objectives, and an appropriate 
combination of services for the participant to obtain these goals and 
objectives. Individual employment plans are one of the most effective 
ways to serve individuals with barriers to employment, and to 
coordinate the various services including training services they may 
need to overcome these barriers.
3. Subpart B--Training Services
Introduction
    Training services are discussed at proposed Sec. Sec.  680.200 
through 680.230. WIOA is designed to increase participant access to 
training services. Training services are provided to equip individuals 
to enter the workforce and retain employment. Training services may 
include, for example, occupational skills training, OJT, registered 
apprenticeship which incorporates both OJT and classroom training, 
incumbent worker training, pre-apprenticeship training, workplace 
training with related instruction, training programs operated by the 
private sector, skill upgrading and retraining, entrepreneurial 
training, and transitional jobs. Training services are available for 
individuals who, after interview, evaluation or assessment, and case 
management are determined to be unlikely or unable to obtain or retain 
employment that leads to self-sufficiency or higher wages from previous 
employment through career services alone. The participant must be 
determined to be in need of training services and to possess the skills 
and qualifications to successfully participate in the selected program. 
The Department explains that some participants may need additional 
services to assist their vocational training, such as job readiness 
training, literacy activities including English language training, and 
customized training.
Section 680.200 What are training services for adults and dislocated 
workers?
    Proposed Sec.  680.200 directs the reader to WIOA sec. 134(c)(3)(D) 
for a description of available training services. The proposal provides 
a series of examples that is not all-inclusive.
Section 680.210 Who may receive training services?
    Proposed Sec.  680.210(a) discusses the process used to determine 
when and what training services must be made available to an 
individual. Under WIOA, an individual may receive training services 
after an interview, evaluation, or assessment, and career planning if 
the one-stop operator or partner determines the individual is unlikely 
or unable, by only receiving career services, to retain employment that 
leads to economic self-sufficiency or wages comparable to or higher 
than wages from previous employment. Additionally, the one-stop 
operator or partner must also determine that the training the 
individual receives would result in employment leading to economic 
self-sufficiency or wages comparable to or higher than wages from 
previous employment. The one-stop operator or partner must also 
determine that the individual has the skills and qualifications to 
successfully participate in and complete the training. Upon a 
determination that career services are unlikely to obtain these 
employment outcomes, the individual may be enrolled in training 
services. The individual should have the skills and qualifications 
needed to successfully participate in and complete the training 
services.
    Proposed Sec.  680.210(b) requires that individuals, for whom 
training has been deemed appropriate, select a training program linked 
to employment opportunities in the local area or in an area to which 
the individual is willing to commute or relocate. The selection of this 
training program should be fully informed by the performance of 
relevant training providers, and individuals must be provided with the 
performance reports for all training providers who provide a relevant 
program.
    Proposed Sec.  680.210(c) explains that WIOA training services must 
be provided when other sources of grant assistance are unavailable to 
the individual.
    Proposed Sec.  680.210(d) requires that training services provided 
under the WIOA adult funding stream must be provided in accordance with 
the State or Local Board's priority system.
Section 680.220 Are there particular career services an individual must 
receive before receiving training services under Workforce Innovation 
and Opportunity Act?
    WIOA removed the requirement under WIA that an individual had to 
receive an intensive service before receiving training services. The 
proposal explains that, other than an interview, evaluation, or 
assessment and career planning there is no requirement that additional 
career services must be provided before an individual enrolls in 
training. Where an assessment is provided, a previous assessment may be 
adequate for this purpose. There is no requirement for a sequencing of 
services under WIOA. If individuals are determined to be in need of 
training consistent with WIOA sec. 134(c)(3) then they may be placed in 
training services. The Department encourages the use of individualized 
career services under Sec.  678.420(b) when appropriate for an 
individual; an individual employment plan or career counseling informed 
by local labor market information and training provider performance 
reports often will be appropriate before an individual receives 
training services.
    Proposed Sec.  680.220(b) requires that the case files for 
individuals must document the participant eligibility for training 
services and explain how this determination was made--by interview, 
evaluation or assessment, career planning, or other career service, 
such as an individual employment plan. It is important that the one-
stop gather enough information, by whatever means, be they through an 
interview or through career services, to justify the need for training 
services.
Section 680.230 What are the requirements for coordination of Workforce 
Innovation and Opportunity Act training funds and other grant 
assistance?
    Proposed Sec.  680.230 restates the requirements for coordination 
with other forms of assistance that apply under WIA. The Department has 
also added a sentence to Sec.  680.230(a)(2) to reflect the new 
provision in WIOA sec. 134(c)(3)(B)(iii) that one-stop operators and 
one-stop partners may take into account the full cost of the training, 
including the cost of supportive services. The Department encourages 
program operators to do so.
    Proposed Sec.  680.230(a) states that when coordinating other grant 
assistance the one-stop operator or

[[Page 20718]]

partner may take into account the full cost of participating in 
training services, including the cost of dependent care and 
transportation and other appropriate costs. Additionally, the one-stop 
operator or partner must coordinate training funds available and make 
funding arrangements with one-stop partners and other entities.
    Proposed Sec.  680.230(b) states that WIOA participants may enroll 
in WIOA-funded training while the participant has a Pell Grant 
application pending as long as the one-stop operator has made 
arrangements with the training provider and the WIOA participant 
regarding the award of the Pell Grant. The training provider must 
reimburse the one-stop operator or partner the amount of the WIOA funds 
used to pay for the training costs covered by the Pell Grant in the 
event that one is approved after WIOA-funded training has begun. 
Reimbursement from the participant for education-related expenses is 
not required.
4. Subpart C--Individual Training Accounts
Introduction
    Individual Training Accounts (ITAs) are key tools used in the 
delivery of many training services. The Department seeks to provide 
maximum flexibility to State and local program operators in managing 
ITAs. These proposed regulations do not establish the procedures for 
making payments, restrictions on the duration or amounts of the ITA, or 
policies regarding exceptions to the limits. The authority to make 
those decisions resides with the State or Local Boards. The authority 
that States or Local Boards may use to restrict the duration of ITAs or 
restrict funding amounts must not be used to establish limits that 
arbitrarily exclude eligible providers.
    Through the one-stop center, individuals will be provided with 
quality and performance information on providers of training and, with 
effective career services, case management, and career planning with 
the ITA as the payment mechanism. ITAs allow participants the 
opportunity to choose the training provider that best meets their 
needs. Under WIOA, ITAs can more easily support placing participants 
into registered apprenticeship programs than under WIA.
Section 680.300 How are training services provided?
    Proposed Sec.  680.300 explains that in most circumstances an 
individual will receive training services through an ITA. An ITA is 
established on behalf of the participant, where services are purchased 
from eligible providers selected in consultation with a career planner. 
Payments may be made through electronic transfers of funds, vouchers, 
or other appropriate methods. Payments may be made at the beginning of 
the training program or on an incremental basis; the payment processes 
must be decided at the local level. As explained in proposed Sec.  
680.300, an ITA is used by an individual to access training services 
from an entity on the State's ETPL. In some circumstances involving 
work-based training, such as OJT, customized training, registered 
apprenticeship, incumbent worker training and transitional jobs, the 
Local Board may contract out the training services. The section allows 
for a Local Board itself to provide the training services if it 
receives a waiver from the Governor. Local Boards must coordinate 
funding for ITAs with funding from other Federal, State, local, or 
private job training programs or sources to assist individuals in 
obtaining training services.
Section 680.310 Can the duration and amount of Individual Training 
Accounts be limited?
    Proposed Sec.  680.310 maintains the State and local flexibility to 
impose limits on ITAs that exists under WIA.
Section 680.320 Under what circumstances may mechanisms other than 
Individual Training Accounts be used to provide training services?
    Proposed Sec.  680.320(a) discusses the exceptions to the otherwise 
required use of an ITA for training. In situations covered by these 
exceptions, a contract for services may be used to provide for 
training. The exceptions include:
    1. OJT, which could include placing participants in a registered 
apprenticeship, customized training, incumbent worker training, or 
transitional jobs.
    2. Where a Local Board determines there are an insufficient number 
of eligible providers in the local area to accomplish the purpose of an 
ITA. The local plan must describe how this determination was made and 
the process used for contracting for services. This exception maintains 
the same language as WIA.
    3. If the Local Board determines a CBO or other private 
organization provides effective training services to individuals with 
barriers to employment. The Local Board must develop criteria to show 
that the program is effective.
    4. Training for multiple individuals in in-demand industry sectors 
or occupations, as long as the contract does not limit the individual's 
consumer choice.
    5. Circumstances in which a pay-for-performance contract is 
appropriate, consistent with Sec.  683.510.
    Proposed Sec.  680.320(b) includes the term ``individuals with 
barriers to employment'' in place of the term ``special participant,'' 
as used under WIA. ``Individuals with barriers to employment'' is 
broader than ``special participants.'' ``Individuals with barriers to 
employment'' includes: Displaced homemakers (see Sec.  680.630); low-
income individuals; Indians, Alaska Natives, and Native Hawaiians; 
individuals with disabilities; older individuals; ex-offenders; 
homeless individuals; youth who are in or have aged out of the foster 
care system; individuals who are English learners, have low literacy 
levels, or face substantial cultural barriers; eligible MSFWs; 
individuals within 2 years of exhausting lifetime eligibility under 
TANF; single parents (including pregnant women); long-term unemployed 
individuals; and members of other groups identified by the Governor.
Section 680.330 How can Individual Training Accounts, supportive 
services, and needs-related payments be used to support placing 
participating adults and dislocated workers into a registered 
apprenticeship program and support participants once they are in a 
registered apprenticeship program?
    This regulation is designed to ensure States and local areas have 
the flexibility to serve individuals in both being placed into a 
registered apprenticeship as well as to assist currently registered 
apprentices. WIOA provides a new opportunity for registered 
apprenticeship programs to automatically qualify to be placed on the 
State's ETPL, allowing ITAs to support participants in registered 
apprenticeship programs, and more directly connecting apprenticeship 
programs to job seekers in one-stop centers. Some apprenticeship 
programs are with a single employer, whereas others may operate through 
a joint labor-management organization where participants are selected 
for the apprenticeship but not immediately hired by a specific 
employer. The Department is seeking comment on how registered 
apprenticeship programs and individuals enrolled or seeking to be 
enrolled in such programs may be best served within the one-stop 
delivery system.

[[Page 20719]]

    Proposed Sec.  680.330(a) states that participants may use an ITA 
to receive training at a pre-apprenticeship program that is on the 
State's ETPL. Pre-apprenticeship programs provide training to increase 
math, literacy, and other vocational skills needed to gain entry to a 
registered apprenticeship program. A pre-apprenticeship program funded 
with an ITA must have at least one registered apprenticeship partner; 
such pre-apprenticeship programs must possess or develop a strong 
record of enrolling their pre-apprenticeship graduates into a 
registered apprenticeship program. The Department is also open to 
comment on how pre-apprenticeship programs and individuals enrolled or 
seeking to be enrolled in such programs may be best served within the 
one-stop delivery system.
    Proposed Sec.  680.330(b) explains that the cost of tuition may be 
paid through an ITA to the training provider involved in a registered 
apprenticeship program. In such instances, the training provider may be 
an employer, a joint labor-management entity, a labor organization, or 
an outside training provider.
    Proposed Sec.  680.330(c) states that supportive services may be 
provided to support the placement of a participant into a registered 
apprenticeship program, consistent with the rules governing supportive 
services in subpart H.
    Proposed Sec.  680.330(d) explains that needs-related payments may 
be provided to support the placement of a participant into a registered 
apprenticeship program, consistent with the rules governing needs-
related payments in subpart H.
    Proposed Sec.  680.330(e) provides a citation to the regulations on 
using OJT funds with registered apprenticeships.
Section 680.340 What are the requirements for consumer choice?
    Proposed Sec.  680.340 largely restates the consumer choice 
requirements established under WIA. The term ``career planner,'' used 
in WIOA, replaces the term ``case manager,'' used in WIA. Proposed 
Sec.  680.340(e) provides that one-stop operators may coordinate 
funding for ITAs with other funding sources in order to assist the 
individual in obtaining training services. Proposed Sec.  680.340(f) 
requires that priority consideration be given to programs that are 
aligned with in-demand industry sectors or occupations in the local 
area.
5. Subpart D--Eligible Training Providers
    This part describes the methods by which organizations qualify as 
eligible providers of training services under WIOA. It also describes 
the roles and responsibilities of the State and Local Boards in 
managing this process and disseminating ETPLs. The State ETPL and the 
related eligibility procedures ensure the accountability, quality, and 
labor-market relevance of programs of training services that receive 
funds through WIOA title I-B. The regulations emphasize that the list 
and accompanying information must be easily understood and disseminated 
widely, in order to maximize informed consumer choice and serve all 
significant population groups.
    The State plays a leadership role in ensuring the success of the 
eligible provider system in partnership with Local Boards, the one-stop 
system, and its partners. The Governor must establish eligibility 
criteria and procedures for initial determination and renewals of 
eligibility for training providers and training programs to receive 
funds under WIOA title I-B. In doing so, the Governor may establish 
minimum performance levels for eligibility and the Department 
encourages Governors to do so. In establishing minimum performance 
levels for eligibility, the Govenor should take into consideration the 
need to serve targeted populations. The Local Board may establish 
additional performance levels for program eligibility within a local 
area.
    The proposed regulations implement WIOA sec. 122 and refer to WIOA 
secs. 107, 116, and 134 where those sections affect provider 
eligibility, the ETPL, the use of ITAs, and the inclusion of registered 
apprenticeship programs on the ETPL. In Sec.  680.410, the regulations 
clarify that all training providers, including those operating under 
the ITA exceptions, must qualify as eligible providers, except for 
those engaged in OJT and customized training (for which the Governor 
must establish qualifying procedures as discussed in Sec.  680.530). 
The proposed regulations also explain how registered apprenticeship 
programs, which WIOA treats differently than other providers in some 
respects, are to be included in the list. Finally, the regulations 
describe how the State ETPL must be disseminated with accompanying 
performance and cost information. The performance information must be 
presented in a way that is easily understood, in order to maximize 
informed consumer choice and serve all significant population groups. 
Separately, ETP performance reports, which require providers to supply 
performance information for all individuals enrolled in a program are 
addressed in Sec.  677.230.
    In response to concerns expressed by stakeholders that some 
providers of training would face difficulties in participating in this 
WIOA-revised system, the Department has clarified the interrelated 
eligibility requirements and explained that while WIOA places an 
emphasis on quality training as measured by performance criteria, State 
and Local Boards and training providers must work together in attaining 
this goal. The proposed regulations emphasize the Governor's discretion 
in offering financial or technical support to training providers where 
the information requirements of this section result in undue cost or 
burden. Making a wide variety of high-quality training programs 
available to participants will increase customer choice and that 
training providers may find performance information useful to improve 
their programs of study, which in turn will provide a direct benefit to 
participants. The Department also encourages the Governor to work with 
ETPs to return aggregate performance information to the provider in 
ways that will help the training providers improve their program 
performance. Given that training providers may have many programs of 
study within their institution, the department is seeking comment on 
ways that States can help streamline performance reporting for training 
providers and minimize the burden associated with reporting on multiple 
programs of study. The State and Local Boards must work together to 
ensure sufficient numbers and types of training providers and programs 
in order to maximize customer choice while maintaining the quality and 
integrity of training services. In addition, the proposed regulations 
explain that CBOs have the opportunity to deliver training funded under 
WIOA through contracts for services rather than ITAs, provided the 
local area determines this is necessary to meet local customer needs 
and also that the provider meets training performance requirements. 
Because of WIOA's emphasis on ensuring the provision of quality 
training, and the importance of using performance criteria to obtain 
such quality, the Department does not intend to waive any of the 
requirements of this section. The Department is seeking comment on 
possible adaptations of ETP eligibility and reporting requirements to 
ensure small CBOs, especially those serving hard to

[[Page 20720]]

serve participant populations, have the capacity to qualify as ETPs.
Section 680.400 What is the purpose of this subpart?
    The workforce development system established under WIOA emphasizes 
informed consumer choice, job-driven training, provider performance, 
and continuous improvement. The quality and selection of providers and 
programs of training services is vital to achieving these core 
principles. As required by WIOA sec. 122, proposed Sec.  680.400 
explains that States, in partnership with Local Boards, must identify 
providers of training services that are qualified to receive WIOA funds 
to train adults and dislocated workers. Therefore, WIOA requires that 
each State must maintain a list of ETPs. The list must be accompanied 
by relevant performance and cost information and must be made widely 
available, including in electronic formats, and presented in a way that 
is easily understood, in order to maximize informed consumer choice and 
serve all significant population groups.
Section 680.410 What entities are eligible providers of training 
services?
    Proposed Sec.  680.410 defines the types of entities that may be 
considered eligible to provide training services and the specific funds 
to be used for this purpose. This proposed section explains that 
training providers, including those operating under the ITA exceptions, 
must qualify as eligible providers, except for those engaged in OJT and 
customized training (for which the Governor must establish qualifying 
procedures as discussed in Sec.  680.530). The proposed regulations 
identify registered apprenticeship programs as included in the list as 
long as the program remains registered. This is further explained in 
proposed Sec.  680.470.
    Proposed paragraph (a) explains that only providers that the State 
determines to be eligible, as required in WIOA sec. 122, may receive 
training funds under WIOA title I-B. This refers to funds used to 
provide training for adult and dislocated worker participants who 
enroll in a program of training services. Proposed paragraph (a) states 
that the Governor will establish the criteria and procedures for 
determining eligibility. These criteria must take into account, at a 
minimum the items in WIOA sec. 122(b)(1)(A). Under the requirements of 
WIOA sec. 122, the procedures for determining eligibility of providers 
are established at the State level and include application and renewal 
procedures, eligibility criteria, and information requirements.
    Proposed paragraphs (a)(1) through (4) list the categories of 
potentially eligible training entities. This list is largely unchanged 
from WIA. Potentially eligible entities include post-secondary 
education institutions, registered apprenticeship programs, other 
public or private providers of training, Local Boards that meet certain 
conditions, and CBOs or private organizations providing training under 
contract with the Local Board.
    Proposed paragraphs (b)(1) and (2) specify that these eligibility 
requirements apply to adult and dislocated worker funds. The 
requirements apply to both participants who seek training using ITAs 
and those who seek training through the exceptions described in 
proposed Sec. Sec.  680.320 and 680.530. Under WIOA sec. 134(c)(3)(G), 
limited exceptions allow local areas to provide training through a 
contract for services rather than ITAs in order to maintain consumer 
choice. These exceptions include: OJT training, customized training, 
incumbent worker training, or transitional employment; instances where 
the Local Board determines there are insufficient numbers of eligible 
providers of training services in the local area; where the Local Board 
determines an exception is necessary to meet the needs of individuals 
with barriers to employment (including assisting individuals with 
disabilities or adults in need of adult education and literacy 
services); where the Local Board determines that it would be most 
appropriate to award a contract to an institution of higher education 
or other eligible provider to facilitate the training of multiple 
individuals in in-demand industry sectors or occupations (where the 
contract does not limit customer choice); and, for pay-for-performance 
contracts.
    Proposed paragraph (b)(2) explains that the requirements to become 
an eligible provider of training services apply to all organizations 
providing training to adults and dislocated workers, with the specific 
exception for registered apprenticeship programs. WIOA makes a change 
from WIA in that registered apprenticeship programs must be included 
and maintained on the list for as long as the program remains 
registered. Registered apprenticeship programs are not subject to the 
same application and performance information requirements as other 
ETPs. However, because it is possible that particular registered 
apprenticeship programs may prefer not to be included on the list, the 
proposed regulation requires registered apprenticeship programs to 
indicate their interest in being on the State list, according to a 
mechanism established by the Governor. The pertinent requirements for 
registered apprenticeship programs are explained in proposed Sec.  
680.470.
Section 680.420 What is a ``program of training services''?
    Proposed Sec.  680.420 defines the term ``program of training 
services,'' which is used throughout this part. The Department explains 
that a program of training services includes a structured regimen that 
leads to specific outcomes. Our definition reinforces a key principle 
of WIOA to improve accountability and performance. Proposed paragraphs 
(a) through (c) align the outcomes for a program of training services 
with the performance requirements described in WIOA sec. 116(b)(2)(A). 
These potential outcomes include post-secondary credentials, industry-
recognized credentials, employment, and measurable skill gains toward 
credentials or employment.
Section 680.430 Who is responsible for managing the eligible provider 
process?
    Proposed Sec.  680.430 explains the roles of the Governor and Local 
Boards in administering the eligible provider process. Throughout this 
subpart, the Department emphasizes the Governor's discretion, in 
consultation with stakeholders, to establish eligibility procedures. 
The eligible provider process under WIOA sec. 122 requires the Governor 
to establish eligibility procedures and to clarify State and Local 
Board roles and responsibilities. In various sections, WIOA assigns 
responsibilities to Local Boards concerning ETPs and identifies 
additional optional activities that may be undertaken by Local Boards. 
For the convenience of stakeholders and the public, the Department has 
listed in proposed Sec.  680.430 these required and potential 
activities.
    Proposed paragraph (a) explains the Governor's responsibilities for 
managing the process for determining eligibility, developing and 
maintaining the State's list of ETPs, and disseminating the list to 
Local Boards, as required by WIOA sec. 122. In keeping with WIOA secs. 
122(a)(1) and (c)(1), proposed paragraph (a) further requires that 
Governors consult with the State Board when establishing these 
procedures. Proposed paragraph (b) authorizes the Governor to designate 
a State agency to carry out the requirements of this section. While 
WIOA sec. 122 does not address this point, the Department anticipates 
that most States will work through a designated State agency (or 
appropriate State entity) to administer the

[[Page 20721]]

requirements of this section. The Department proposes paragraph (b) to 
make this option explicit.
    Proposed paragraphs (b)(1) through (5) describe the State's 
responsibilities for developing and maintaining the State list of 
providers. The State may establish minimum performance levels. The 
State is responsible for determining if such performance targets are 
met. It is also the State's responsibility to determine whether 
accurate information has been submitted, take enforcement actions as 
needed, and disseminate the list to the Local Boards, the one-stop 
system, its partner programs, and the public. This includes 
dissemination through Web sites and searchable databases and any other 
means the State uses to disseminate information to consumers. Under 
WIA, similar responsibilities were primarily assigned to the Local 
Workforce Boards. In establishing greater accountability and 
flexibility at the State level, WIOA sec. 122 specifically requires the 
State to manage the ETP process. Proposed paragraph (b) describes these 
responsibilities and notes the Governor's primary role in exercising 
these responsibilities, including the assignment of duties to be 
undertaken by Local Boards.
    Paragraph (c) identifies the required responsibilities of Local 
Boards, which are found in WIOA secs. 107 and 134. These include 
responsibilities assigned to Local Boards statutorily as well as 
responsibilities that may be assigned by the Governor. Proposed 
paragraph (c)(1) makes clear that the Local Board must carry out 
procedures assigned to it by the State, as provided for under WIOA 
sec.122(c)(1). The Department provides examples of the responsibilities 
that the Governor may choose to assign to Local Boards, including 
duties similar to those undertaken by Local Boards under WIA.
    Proposed paragraph (c)(2) explains the Local Boards' responsibility 
to work with the State to ensure that there are sufficient number and 
variety of programs to provide participants, as consumers, adequate 
choice among providers, as described in WIOA sec. 107. Local Boards are 
charged with working with the State to ensure that there are sufficient 
numbers and types of providers to meet the skill development needs of 
adults and dislocated workers, including those who are disabled and/or 
require adult literacy assistance. This proposed paragraph emphasizes 
that Local Boards and the State must work together to ensure adequate 
consumer choice.
    Proposed paragraph (c)(3) explains, as required by WIOA sec. 
134(a)(2)(B), that Local Boards must also ensure that the State' 
eligible training provider list is disseminated publicly through the 
local one-stop system, and its partner programs. The list is a tool to 
assist one-stop customers in evaluating training programs and provider 
options. The dissemination of the list is also discussed under proposed 
Sec.  680.500.
    Proposed paragraph (d) explains the roles that a Local Board may 
choose to exercise in the eligible provider process. The Governor's 
procedure may not prevent Local Boards from exercising these options.
    Proposed paragraph (d)(1) emphasizes the potential for Local Board 
input into the Governor's development of the eligible provider 
procedure. WIOA sec. 122(e) requires the Governor to provide an 
opportunity for interested members of the public to make 
recommendations and submit comments regarding the eligibility 
procedure. Although not explicitly addressed in the WIOA sec. 122, the 
Department interprets its language to encompass Local Boards and thus 
have included this requirement in the proposed paragraph.
    Proposed paragraphs (d)(2) and (3) include the provisions at WIOA 
sec. 122(b)(3), which allow Local Boards to set additional eligibility 
criteria, information requirements, and minimum performance levels for 
local providers beyond what is required by the Governor's procedure. 
Stakeholders and the public must note that any additional requirements 
imposed by a Local Board will only affect a program's eligibility and 
performance requirements within the local area.
Section 680.440 What are the transition procedures for Workforce 
Investment Act-eligible providers to become eligible under the 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  680.440 explains the procedure established by WIOA 
sec. 122(c) for training providers that were eligible as of the date 
WIOA was enacted, July 21, 2014, to continue their eligibility under 
WIOA. The Department anticipates the majority of providers previously 
eligible under WIA will be affected by this transition.
    Proposed paragraph (a) explains that the Governor may establish a 
transition period and states that providers that were eligible on July 
21, 2014 will remain eligible under WIOA until December 31, 2015, or 
such earlier date as the Governor may set. Proposed paragraph (b) 
explains that in order to retain eligibility after the transition 
period, these providers will be subject to the application procedure 
established by the Governor for providers that have previously been 
found eligible, as further explained in proposed Sec.  680.460. 
Proposed paragraph (c) explains that providers that have previously 
been found eligible are not subject to the initial eligibility 
procedures, as described in proposed Sec.  680.450. As discussed in 
Sec.  680.450, the initial eligibility procedures apply only to 
providers that were not previously eligible under WIA or WIOA.
Section 680.450 What is the initial eligibility procedure for new 
providers?
    Proposed Sec.  680.450 describes the process for adding ``new''' 
providers to the ETPL (i.e., those that have not previously been found 
eligible under sec. 122 of either WIA or WIOA). Such providers must 
first apply for initial eligibility according to procedures set by the 
Governor. In accordance with WIOA sec. 122(b)(4), this proposed section 
describes the factors the Governor must take into consideration in 
developing this procedure and take into account in setting criteria for 
initial eligibility. Eligibility is determined on a program-by-program 
basis for each provider. Proposed Sec.  680.450 distinguishes between 
registered apprenticeship programs seeking inclusion on the list and 
other providers. Registered apprenticeship programs, consistent with 
WIOA sec. 122(a)(3), are not subject to the initial eligibility 
application procedure. However, registered apprenticeship programs are 
required to indicate their interest to be included in the ETPL, 
according to a mechanism established by the Governor, as discussed in 
Sec.  680.470.
    Proposed paragraph (a) explains that the Governor's procedure must 
require that providers of training seeking initial eligibility submit 
required information in order to receive initial eligibility.
    Proposed paragraph (b) explains the exception for providers who are 
carrying out registered apprenticeship programs under the National 
Apprenticeship Act. Such programs are included and maintained on the 
list of eligible providers of training for as long as the program 
remains registered. Therefore, registered apprenticeship programs are 
not subject to a period of initial eligibility or to initial-
eligibility procedures. Rather, the Department proposes paragraph (b) 
to require the Governor to establish a procedure whereby registered 
apprenticeship programs may indicate their interest to be included and 
maintained on the list. This requirement is further discussed in Sec.  
680.470.
    Proposed paragraph (c) explains the requirement that the Governor 
must consult with Local Boards and solicit

[[Page 20722]]

public comment in determining the initial eligibility procedure. While 
the Governor is responsible for developing the initial eligibility 
procedure, input by the Local Board and public comment remain important 
for shaping a public workforce system that is responsive to local 
needs. The Local Board is responsible for working with the State to 
ensure that there are sufficient numbers and types of providers of 
career and training services, as required by WIOA sec. 107(d)(10)(E) 
and described in proposed Sec.  679.370(m). Therefore, the Department 
is requiring that the Governor consult with Local Boards about the 
initial eligibility procedure in order to maximize consumer choice at 
the local level. This is also in keeping with WIOA sec. 122(e) on the 
requirements for public comment. In addition, although WIOA does not 
address this point, the Department proposes requiring the Governor to 
describe the procedure, eligibility criteria, and information 
requirements for initial eligibility in the State Plan. Although States 
will need a separate mechanism for public comment during the first year 
of implementation, in subsequent years the State Plan process will 
afford the opportunity to solicit comments and recommendations from key 
stakeholders. In addition, the State Plan submission and review process 
allows the Department to ensure compliance with statutory and 
regulatory requirements and identify promising practices and technical 
assistance needs.
    Proposed paragraph (d) explains that the Governor must establish 
criteria and State requirements for non-exempt providers seeking 
initial eligibility. These initial requirements apply to providers that 
were not previously eligible under this section (or sec. 122 of WIA, as 
in effect on the day before the enactment of WIOA).
    Proposed paragraph (e) describes the factors that the Governor must 
take into account in establishing the criteria for determining initial 
eligibility. For those institutions that are not exempt from complying 
with the ETP application process, the State must establish consistent 
and uniform criteria for providers seeking initial eligibility. The 
information that must be submitted to the State for review will be 
defined by the Governor, but must, at a minimum, address factors 
related to program elements included in both WIOA secs. 122(b)(4)(D) 
and 116(b)(2)(A)(i)(I)-(IV). The Department has listed these required 
elements in proposed paragraphs (e)(2) through (5). The elements taken 
from WIOA sec. 122 include information addressing factors related to 
program performance indicators, any partnership a program has with a 
business, attributes indicating high quality training services and 
credentialing, and the alignment of the program's services with in-
demand industry sectors. WIOA requires that providers provide 
``verifiable program-specific performance information.'' The Department 
is interested in comments about the types of verifiable program 
specific-information this would include. The Department is particularly 
interested in the methods of providing verifiable information that are 
the least costly to the training provider and the easiest to verify to 
reduce the cost to the State or local area. The Department has added a 
requirement that the applicant provide a description of the program. 
The Department thinks this information is not burdensome and is 
essential to enable customers to understand whether the program meets 
their training needs.
    Proposed paragraph (f) describes the Governor's discretion to 
establish minimum performance standards. As with the application 
procedures described in Sec.  680.460, the Governor may establish 
minimum performance levels in the initial eligibility procedures, and 
the Department encourages them to do so.
    Proposed Sec.  680.450(g) emphasizes the time limit for initial 
eligibility, which is 1 fiscal year for a particular program, per WIOA 
sec. 122(b)(4)(B).
    Proposed paragraph (h) clarifies that after the period of initial 
eligibility, these training providers are subject to the Governor's 
application procedure, described at proposed Sec.  680.460 in order to 
remain eligible.
Section 680.460 What is the application procedure for continued 
eligibility?
    Proposed Sec.  680.460 explains the detailed application process 
for previously WIA-eligible providers to remain eligible under WIOA. 
Eligibility is determined on a program-by-program basis for each 
provider.
    Proposed paragraphs (a)(1) and (2) list the two groups of providers 
that are subject to the requirements of proposed Sec.  680.460. These 
include new training providers that were previously eligible under WIA 
(following the Governor's transition period, which ends December 31, 
2015 or such earlier date established by the Governor) as well as new 
training providers whose initial eligibility expires after 1 fiscal 
year.
    Proposed paragraphs (b)(1) and (2) explain that the Governor is 
required to gather and consider input from Local Boards, providers, and 
the public, including representatives of business and labor 
organizations. The Local Board is responsible for working with the 
State to ensure that there are sufficient numbers and types of 
providers of career and training services, as required by WIOA sec. 
107(d)(10)(E) and described in proposed Sec.  679.370(m). Therefore, 
the Department is requiring that the Governor consult with Local Boards 
regarding training provider eligibility procedures in order to maximize 
consumer choice among quality training providers at the local level. 
This is also in keeping with WIOA sec. 122(e) regarding the 
requirements for public comment. While WIOA does not specify a 
timeframe within which the consultation and determination must be 
completed, proposed paragraph (b)(3) requires the Governor to establish 
a timeframe for that purpose while leaving the amount of time to the 
Governor's discretion. The same requirements for Local Board 
consultation and a public comment period are described above in 
connection with proposed Sec.  680.450(c) for the Governor's 
development of initial eligibility procedures.
    Proposed paragraph (c) clarifies that registered apprenticeship 
programs are exempted from these application procedures. Under WIOA 
sec. 122(a)(3), registered apprenticeship programs must be included and 
maintained on the State list for as long as the program remains 
registered. While registered apprenticeships are considered eligible, 
not all registered apprenticeship sponsors may wish to be included. As 
described in Sec.  680.470, the Department proposes that the Governor's 
procedure must include a means for registered apprenticeship program to 
indicate interest in being included on the list.
    Proposed paragraph (d) explains that the Governor's procedure must 
describe the roles of the State and local areas in the application and 
eligibility process. WIOA gives the Governor discretion to assign some 
of the responsibility for receiving, reviewing, and making eligibility 
determinations to local areas. WIOA emphasizes the Governor's 
discretion in establishing eligibility procedures.
    Proposed paragraph (e) requires the Governor's procedure to be 
described in the State Plan. Although WIOA does not address this point, 
the Department proposes requiring the Governor to describe the 
procedure, eligibility criteria, and information requirements for 
initial eligibility in the State Plan. Although States will need a 
separate mechanism for public comment during the first year of 
implementation, in subsequent years the State Plan process will afford 
the opportunity to solicit

[[Page 20723]]

comments and recommendations from key stakeholders. In addition, the 
State Plan submission and review process allows the Department to 
ensure compliance with statutory and regulatory requirements and 
identify promising practices and technical assistance needs.
    Proposed paragraph (f) explains the factors that the Governor must 
take into account in developing the eligibility criteria. These include 
nine required factors and any additional factors that Governor 
considers appropriate. The proposed language closely tracks the 
language from WIOA sec. 122(b), providing a comprehensive description 
of the requirements for the application process. WIOA sec. 122(b) 
includes multiple cross-references to WIOA sec. 116 which identifies 
required performance accountability measures. Proposed paragraph (f)(1) 
generally describes the kinds of performance information which training 
providers must submit as part of their application, which pertain to 
participants receiving training under WIOA title I-B. The Department 
recommends the Governor's procedure emphasize these performance 
indicators as a way of establishing minimum standards and a means for 
comparison among training providers offering similar training in 
similar areas. The Department recommends States use these measures to 
ensure performance accountability, continuous improvement, training 
provider quality, and informed consumer choice. The Department 
anticipates that complete performance data as required under (f)(1) may 
not be available until PY 2018, given the lag time inherent in the 
performance indicators. Proposed pargraph (f)(1) allows the Govenor to 
take into account alternate factors for any performance information 
that is not yet available until such performance data are available. 
The Department seeks comment on alternate factors related to 
performance that may be used to establish eligibility during this time.
    Proposed paragraphs (f)(2) through (10) list the other factors that 
the Governor's criteria must take into account. These include the need 
to ensure access to training services in rural areas, information 
regarding Federal and State training programs other than within WIOA 
title I-B, alignment with in-demand industry sectors, State licensure 
requirements, encouraging industry-recognized credentials, provision of 
post-secondary credentials, the quality of program and training 
services, and meeting the needs of individuals with barriers to 
employment.
    Proposed paragraph (f)(10) requires the Governor's criteria to take 
into account whether the providers timely and accurately submitted 
eligible training provider performance reports, as required under WIOA 
sec. 116(d)(4). This requirement is consistent with the requirement 
under WIOA sec. 122(b)(1)(A)(ii) that the criteria to be taken into 
account include the outcomes of the training programs for students in 
general with respect to employment and earnings under the indicators of 
performance described in WIOA sec. 116(d)(2). The ETP reports provide 
information on these employment and earnings outcomes for all 
individuals in a program of study, and the failure to submit such 
reports on a timely and accurate basis would undermine the ability of 
the Governor to take such outcomes into account. The Department seeks 
comment on how best to apply the timely and accurate submission of 
these ETP performance reports as a factor for eligibility.
    Proposed paragraph (f)(11) explains the Governor's discretion to 
take into account other factors. This paragraph echoes the key 
principles of the ETPL and WIOA to ensure performance accountability, 
to meet the needs of local employers and participants, and to ensure 
informed customer choice.
    Proposed paragraph (g) lists the information that training 
providers are required to provide as part of their application. As 
discussed in paragraph (k), the Governor has broad discretion to 
prescribe additional types of information.
    Proposed paragraph (h) establishes two additional requirements 
concerning performance, cost, and information collection. Proposed 
paragraph (h)(1) states that eligible providers must submit performance 
and cost information required by paragraph (g) and the Governor's 
procedure to the State (WIOA secs. 122(b)(1) and (2)). In accordance 
with the State accountability and flexibility intended by WIOA, the 
timeframe and manner for submitting this information is to be 
determined by the State but at least every 2 years. Proposed paragraph 
(h)(2) states that the collection of information required to 
demonstrate compliance with the criteria cannot be unduly burdensome or 
costly to providers, citing to WIOA sec. 122(b)(1)(J)(iv).
    Proposed paragraph (i) explains that the Governor's eligibility 
procedure must provide for the State to biennially review training 
provider eligibility information and assess the renewal of training 
provider eligibility, per WIOA sec. 122(c)(2). In keeping with WIOA's 
emphasis on providing discretion to the Governor, the Department has 
not prescribed in paragraph (i) the timeline and manner in which this 
biennial review takes place. These particulars are to be established by 
State procedure. The Governor or State agency is not required to 
establish minimum levels of performance, although the Department 
encourages them to do so. If minimum levels are established, the 
Governor's procedure must state these requirements and the State may 
require eligible providers to meet them in order to remain eligible.
    Proposed paragraph (j) requires the Governor's procedure to verify 
the status of registered apprenticeship programs as a part of the 
biennial review of the State list. Although registered apprenticeship 
programs are not subject to the same review procedures as other 
providers, the State must verify the status of the registered 
apprenticeship programs in order to remove from the list any 
apprenticeship programs that are no longer registered.
    Proposed paragraph (k) establishes that, as was the case under WIA, 
Local Boards may set additional criteria for eligibility to provide 
services in a local area. WIOA includes this provision at sec. 
122(b)(3).
    Proposed paragraph (l) explains that the Governor may establish 
procedures for providing technical assistance in order to assist 
eligible providers in meeting these requirements. This is in addition 
to financial assistance the Governor may provide, as described in 
proposed Sec.  680.490.
Section 680.470 What is the procedure for registered apprenticeship 
programs that seek to be included on the State's eligible training 
provider list?
    WIOA encourages registered apprenticeship programs to be active 
partners in the public workforce system. These programs are proven job-
driven strategies that provide workers with career pathways and 
opportunities to earn while they learn. Under WIOA sec. 122(a)(3), a 
registered apprenticeship program is included on the list of ETPs so 
long as the program remains registered. This allows a participant 
enrolled in a registered apprenticeship who is eligible to use WIOA 
title I-B funds to use those funds toward apprentice training, 
consistent with their availability and limitations as prescribed by 
proposed Sec.  680.300. The use of ITAs and other WIOA title I-B funds 
toward apprenticeship training is further described in proposed Sec.  
680.330. Registered apprenticeship programs differ from other training 
providers in some respects, notably that a participant's enrollment 
occurs only

[[Page 20724]]

through an agreement among the participant, the registered 
apprenticeship program sponsor, and an employer.
    Proposed Sec.  680.470 explains how registered apprenticeship 
programs are included and maintained on the ETPL. Registered 
apprenticeship programs are not subject to the application procedures 
and information requirements of other training providers to be included 
on the ETPL, in light of the detailed application and vetting 
procedures under which apprenticeship programs become registered.
    Proposed paragraph (a) requires registered apprenticeship programs 
to indicate interest in being on the State list of ETPs. While 
registered apprenticeship programs are automatically eligible, not all 
registered apprenticeship sponsors may wish to be included on the list. 
The Department proposes that the Governor's procedure include a 
mechanism for registered apprenticeship programs to indicate their 
interest.
    Proposed paragraph (b) explains that a registered apprenticeship 
program will remain on the list until it loses its registration or 
notifies the State that it no longer wishes to be included on the list.
    Proposed paragraph (c) explains that when a registered 
apprenticeship program is included on the State ETPL, this allows an 
individual who eligible to use WIOA title I-B funds to use those funds 
toward apprentice training, consistent with their availability and 
limitations as prescribed by proposed Sec.  680.300.
    Proposed paragraph (d) addresses performance reporting requirements 
for apprenticeship programs. Registered apprenticeship programs are not 
subject to the same information reporting requirements as other 
training programs. However, in light of WIOA's emphasis on performance 
accountability and informed customer choice, the Department encourages 
Governors to consult with the State and Local Boards, the Department's 
Office of Apprenticeship, recognized State apprenticeship agencies 
(where they exist in the Governor's State), or other State agencies, to 
establish voluntary reporting of performance information.
Section 680.480 May an eligible training provider lose its eligibility?
    Proposed Sec.  680.480 describes enforcement provisions that are 
largely unchanged from WIA. The Governor has the ability to remove 
training providers or programs of training services from the State list 
according to the Governor's eligibility and review procedures. Under 
WIOA sec. 122(f), States must remove from the eligibility list any 
providers that willfully supply false performance information or that 
substantially violate requirements of WIOA. Under WIOA, a provider may 
also be removed from the list following the Governor's biennial review 
of the provider's program. These provisions support key principles of 
WIOA by reinforcing performance accountability and ensuring the high 
quality of training programs made available.
    Proposed paragraph (a) affirms that a provider must deliver 
positive results and provide accurate information in order to maintain 
eligibility.
    Proposed paragraph (b) explains that if a provider intentionally 
provides inaccurate information or substantially violates any provision 
of WIOA or its regulations the provider must be removed from the State 
list for a period of not less than 2 years and is liable to repay all 
adult and dislocated worker funds it received during the period of non-
compliance. The Governor must specify in the procedures which 
individual or entity is responsible for making these determinations and 
the process by which the determination will be made, which must include 
an opportunity for a hearing.
    Proposed paragraph (c) allows the Governor to remove a program or 
programs from the list for failing to meet State-established criteria 
or performance levels. The Department seeks comment on how to 
strengthen enforcement with non-compliant providers over time.
    Proposed paragraph (d) explains that the Governor must establish an 
appeal procedure for providers to appeal a denial of eligibility under 
this section. An appeals process is required by WIOA sec. 122 (c)(1). 
Proposed Sec.  683.630(b) explains the appeal process for the denial or 
termination of a training provider's eligibility.
    Proposed paragraph (e) provides that a local area may remove a 
program or programs from the list for failing to meet higher local 
standards. The local area must also provide the program with an appeal 
process.
Section 680.490 What kind of performance and cost information must 
eligible training providers provide for each program of training?
    Proposed Sec.  680.490 describes the performance information that 
providers are required to submit to the State in order to establish or 
renew eligibility, as described in WIOA sec. 122(b)(2).
    Proposed paragraph (a) requires ETPs to submit performance 
information at least every 2 years, according to procedures established 
by the Governor. While the Governor may require reporting at more 
frequent intervals, the Department interprets WIOA sec. 122 to require 
that provider performance information for eligibility purposes must be 
submitted to the State at least biennially.
    Proposed paragraphs (b)(1) through (4) list the program-specific 
performance information, described in WIOA sec. 122, that must be 
submitted by training providers. Proposed paragraph (b)(1) includes a 
cross-reference to the performance elements described at WIOA secs. 
116(b)(2)(A)(i)(I)-(IV). These elements are further discussed in 
proposed Sec.  680.460(g)(i) through (iv). Proposed paragraphs (b)(2) 
through (4) list additional information that must be supplied by 
providers; this includes information on post-secondary credentials 
offered, program costs, and the completion rate for WIOA participants 
in the program.
    Proposed paragraph (c) explains that the Governor may require any 
additional performance information that he or she considers appropriate 
for determining or renewing eligibility. Separate reporting 
requirements for the State's ETP performance reports under WIOA sec. 
116(d)(4) are addressed in Sec.  677.230.
    Proposed paragraph (d) emphasizes the collaborative relationship 
between a State and its training providers and explains that the 
Governor must assist providers in supplying the information required of 
them under WIOA and the proposed regulations. Proposed paragraph (d)(1) 
states the statutory requirement, at WIOA sec. 122(b)(1)(J)(iv), that 
the Governor must provide access to cost-effective methods for the 
collection of information. Proposed paragraphs (d)(2) and (3) explain 
that the Governor may provide technical and other assistance to 
providers in helping them to meet the performance requirements and that 
funds reserved for statewide activities under WIOA sec. 134 (a)(2)(B) 
may be used for this purpose. While WIOA emphasizes performance 
accountability, it is also important to assist ETPs in maintaining 
their eligibility, especially as training providers adjust to the more 
demanding reporting requirements of WIOA.
Section 680.500 How is the State list of eligible training providers 
disseminated?
    The public's ability to access and easily understand the State ETPL 
and its accompanying information are cornerstones of informed customer 
choice and transparency. In keeping

[[Page 20725]]

with WIOA's intent for program alignment and service integration, the 
Department proposes strengthening the distribution of the list to 
emphasize dissemination to the public through one- stop partner 
programs in addition to the one-stop system. The ETP performance 
reports at WIOA sec. 116(d)(4) are addressed separately in Sec.  
677.230, which requires the coordinated dissemination of the 
performance reports with the ETPL and the information required to 
accompany the list.
    Proposed Sec.  680.500 explains the requirements for distributing 
the list and accompanying information about the programs and providers 
on the list. These requirements recognize the central importance of the 
list as the means to provide participants, as consumers of employment 
and training activities, effective choices among programs and providers 
of these services. As discussed previously, informed consumer choice is 
a key principle under WIOA.
    Proposed paragraph (a) requires the State to disseminate the list 
with accompanying performance and cost information to Local Boards in 
the State and to members of the public online including Web sites and 
searchable databases, through whatever means the State uses to 
disseminate information to consumers, including the one-stop delivery 
system and its program partners. Local Boards must disseminate the list 
through the one-stop system as well, as described in proposed Sec.  
680.430(c)(3). Proposed paragraph (b) requires the list to be updated 
regularly, while provider eligibility is reviewed biennially. The 
Department is making a distinction between the eligibility of 
individual providers and updates to the actual list because the 
Department anticipates the list may be updated on an on-going basis, 
even though the review of a particular provider's eligibility status 
may occur biennially.
    Proposed paragraph (c) requires the State list and accompanying 
information to be easily available to all one-stop customers through 
the one-stop system and its partner programs. The State list is a key 
piece of the State one-stop system. As such, it must be made available 
to individuals seeking information on training programs as well as 
participants receiving career services funded under WIOA and other 
programs. Proposed paragraph (c) further explains that the list must be 
available to individuals who are eligible for training under WIOA as 
well as to individuals whose training is supported by other one-stop 
partners.
    Proposed paragraph (d) describes the information that must 
accompany the list to help participants in making informed choices 
regarding training programs and providers. Proposed paragraphs (d)(1) 
through (4) describe the information that must accompany the list, 
including recognized post-secondary credentials offered, other 
information as may be required by the Governor's eligibility criteria, 
and performance and cost information. The information available for 
programs in the initial eligibility stage will be different from, and 
less extensive than, the information available from programs in the 
continuing eligibility stage.
    Proposed paragraph (d)(3) includes the requirement that the State 
must disseminate the provider list with ``other appropriate 
information.'' The Department interprets this language to include the 
performance and cost information described at Sec.  680.490.
    Proposed paragraph (d)(4) states that the Governor may include any 
additional information to accompany the list as he or she considers 
appropriate. The Department encourages States to include any 
information that, consistent with WIOA's goal of promoting consumer 
choice, will assist participants in choosing training activities and 
providers.
    Proposed paragraph (e) requires, as described in WIOA sec. 
122(d)(3), that the accompanying information must not reveal personally 
identifiable information about an individual participant. In addition, 
disclosure of personally identifiable information from an education 
record must be carried out in accordance with the FERPA, including the 
circumstances relating to prior written consent.
    The Department is interested in comments on specific ways to 
structure the accompanying information so that it provides a complete 
and easily understandable picture of provider performance but is not so 
detailed or complex that it discourages users from consulting it or 
limits its utility to the lay person. Should, for example, there be a 
summary sheet that is easy and quick to read and, if so, what 
information must be on the summary sheet?
Section 680.510 In what ways can a Local Board supplement the 
information available from the State list?
    Proposed Sec.  680.510 explains that Local Boards may choose to 
supplement the criteria and information requirements established by the 
Governor's procedure in order to facilitate informed consumer choice in 
a local area.
    Proposed paragraph (a) states that a Local Board may require that 
providers of training services furnish additional criteria and 
information as allowed under WIOA sec. 122(b)(3). These requirements 
impact the provision of services in the local area involved.
    Proposed paragraphs (b)(1) through (4) explain the type of 
additional information that the Local Board may require providers to 
supply in their application to become eligible. These provisions are 
largely unchanged from the WIA regulations. The Local Board may request 
that the provider of training services explain how the training program 
specifically links to occupations that are in demand within the local 
area. The Local Board may also request specific program performance and 
cost information particular to a local area where programs are offered 
at multiple sites. The Department further explains that Local Boards 
may request information from training providers that indicates how 
programs are responsive to these local requirements, as provided for in 
WIOA sec. 122(b)(3).
Section 680.520 May individuals choose training providers located 
outside of the local area?
    Proposed Sec.  680.520 explains that an individual may choose a 
training provider located outside the local area, and, in some 
instances, in other States. States may enter into reciprocity 
agreements with other States under which providers of training services 
are allowed to accept ITAs provided by another State. Providers of 
training services that are located outside the local area may not be 
subject to State eligibility procedures if the provider has been 
determined eligible by another State with such an agreement. The option 
to enter into reciprocity agreements diminishes the burden on States 
and providers of training services to be subject to duplicative 
procedures and is allowable under WIOA sec. 122(g). This provision also 
expands the array of training options available for individuals seeking 
training.
Section 680.530 What requirements apply to providers of on-the-job 
training, customized training, incumbent worker training, and other 
training exceptions?
    In proposed Sec.  680.530, the Department explains that providers 
of OJT, customized training, incumbent worker training, internships, 
paid or unpaid work experience, or transitional employment are not 
subject to the eligibility requirements under WIOA

[[Page 20726]]

secs. 122(a)-(f), but are required to provide performance information 
established by the Governor. The Department further explains that the 
local one-stop operator is required to collect and disseminate 
information that identifies these providers as meeting the Governor's 
performance criteria. Although these providers are not included on the 
State ETPL they are considered to be eligible providers of training 
services.
6. Subpart E--Priority and Special Populations
Introduction
    The services provided with adult funds can be a pathway to the 
middle class for low-income adults, public assistance recipients, and 
individuals who are basic skills deficient. The proposed regulations 
implement the statutorily-required priority for the use of adult funds. 
This subpart contains proposed regulations about how participants from 
certain populations are able to access adult and dislocated worker 
services and establish priority access to these services. WIOA sec. 
134(c)(3)(E) provides that priority must be given to recipients of 
public assistance, other low-income individuals, and individuals who 
are basic skills deficient. Under WIA, this priority applies only when 
adult funds are limited. Under WIOA, however, priority access to 
services by members of this group applies automatically. Nonetheless, 
WIOA allows one-stop operators to provide individualized career 
services to individuals who are not members of these groups, if 
determined appropriate by the one-stop operator.
    The Department strongly encourages close cooperation between WIOA-
funded programs and other Federal and State sources of assistance for 
job seekers. Coordination between WIOA-funded programs and the TANF 
program is a crucial element in serving individuals who are on public 
assistance. TANF is a required partner in the one-stop delivery system. 
Through close cooperation, each program's participants will have access 
to a much broader range of services to promote employment retention and 
self-sufficiency than if they relied only on the services available 
under a single program.
    In this subpart, the Department explains how displaced homemakers 
may be served with both adult and dislocated worker funds. Under WIOA, 
a displaced homemaker qualifies as an ``individual with a barrier to 
employment'' (see proposed Sec.  680.320(b) and its discussion above). 
WIOA provides a focus on serving ``individuals with a barrier to 
employment'' to ensure they have opportunities to enter meaningful 
employment; this term is defined in WIOA sec. 3(24). Additionally, 
displaced homemakers meet the definition of a ``dislocated worker,'' as 
defined in WIOA sec. 3(15)(D). The proposed regulations implement 
WIOA's requirements and effectuate its purpose to aid displaced 
homemakers, whose work, albeit without a formal connection to the 
workforce, is recognized for its value, but who may need WIOA services 
to develop further work skills. WIOA also expands the definition of 
displaced homemakers to include dependent spouses of the Armed Forces 
on active duty to ensure they have access to WIOA title I services.
    This subpart ensures that veterans and certain service members have 
access to adult and dislocated worker programs. Under WIOA, as was the 
case under WIA, veterans receive priority of service in all Department-
funded employment and training programs. The proposed regulations 
describe what is meant by ``priority of service.'' The Department has 
proposed a regulation consistent with guidance it issued in Training 
and Employment Guidance Letter (TEGL) 22-04 that separating service 
members meet the eligibility requirements for dislocated worker 
activities. This proposed regulation will ensure that service members 
will have access to the full array of services available through the 
one-stop delivery system.
Section 680.600 What priority must be given to low-income adults and 
public assistance recipients and individuals who are basic skills 
deficient served with adult funds under title I?
    Proposed Sec.  680.600 provides priority access to career services 
and training services funded under WIOA sec. 134(c)(2)(A)(xii) and 
adult title I. In Sec.  678.430(b), the Department proposes to 
categorize these services as individualized career services. WIOA 
builds on the priority given under WIA to providing training services 
to low-income individuals and individuals receiving public assistance. 
Under WIOA, the priority also extends to individuals who are basic 
skills deficient.
    Proposed Sec.  680.600(a) explains that individualized career 
services and training services must be given on a priority basis to 
low-income adults, public assistance recipients, and individuals who 
are basic skills deficient in the local area under the WIOA adult 
program. For adults, the term ``basic skills deficient'' is defined in 
WIOA sec. 3(5)(B) and applies when an individual is unable to compute 
or solve problems, or read, write, or speak English, at a level 
necessary to function on the job, in the individual's family, or in 
society. Priority must be given regardless of funding levels.
    Proposed Sec.  680.600(b) requires States and local areas to 
establish criteria for providing priority to individualized career 
services and training services with WIOA adult funds under title I. The 
criteria may include other resources and funds for providing career and 
training-related services in the local area, as well as the needs of 
specific groups in the local area, as well as other factors the local 
areas determines appropriate.
    Proposed Sec.  680.600(c) clarifies that while priority must be 
given under WIOA adult funds to low-income individuals, public 
assistance recipients, or individuals who are basic skills deficient 
for individualized career services and training services, the Local 
Board and Governor may establish a process that also gives priority to 
other individuals.
Section 680.610 Does the statutory priority for use of adult funds also 
apply to dislocated worker funds?
    Proposed Sec.  680.610 clarifies that the statutory priority for 
low-income individuals, public assistance recipients, and individuals 
who are basic skills deficient only applies to the WIOA adult program 
and not the WIOA dislocated worker program.
Section 680.620 How does the Temporary Assistance for Needy Families 
program relate to the one-stop delivery system?
    Proposed Sec.  680.620 explains how the TANF program relates to the 
one-stop delivery system. Cooperation among required partner programs 
is vital to build pathways to the middle class for individuals on 
public assistance and low-income individuals. Partners, working 
together, can ensure the best mix of services for each individual 
seeking to enhance their lives and employment.
    Under WIOA, TANF is a required partner in the one-stop system, 
unless the Governor opts out. TANF provides assistance to needy 
families and by coordinating closely with WIOA local areas can ensure 
programs and services include the needs of individuals on public 
assistance. This section encourages cooperation among the WIOA and TANF 
programs to maximize

[[Page 20727]]

services available to participants eligible under both programs.
Section 680.630 How does a displaced homemaker qualify for services 
under title I?
    Proposed Sec.  680.630 explains displaced homemakers' eligibility 
for dislocated worker activities. A displaced homemaker can qualify for 
either adult or dislocated worker funds. First, if an individual meets 
the definition of a displaced homemaker under WIOA sec. 3(16), the 
individual is eligible for dislocated worker career and training 
services. Second, the displaced homemaker may be served with title I 
adult funds if the individual meets the eligibility requirements for 
this program; generally priority in the adult program is given to low-
income individuals, individuals on public assistance, or if they lack 
basic work skills. A State may also use reserve funds that target 
displaced homemakers in which they would be eligible.
    Under WIOA, the definition of a displaced homemaker is expanded to 
explicitly include dependent spouses of a member of the Armed Forces on 
active duty (as defined in sec. 101(d)(1) of title 10, United States 
Code) and whose family income is significantly reduced because of a 
deployment, a call or order to active duty, a permanent change in 
station, or the service-connected death or disability of the service 
member.
Section 680.640 May an individual with a disability whose family does 
not meet income eligibility criteria under the Act be eligible for 
priority as a low-income adult?
    Proposed Sec.  680.640 explains that under WIOA an individual with 
a disability whose family does not meet income eligibility criteria 
will still qualify for priority as a low-income adult if the individual 
meets the low-income criteria in WIOA sec. 3(36). Additionally, the 
Department proposes that if an individual with a disability meets the 
income eligibility criteria for payments under any Federal, State, or 
local public assistance program that individual will also be eligible 
for priority as a low-income adult consistent with WIOA sec. 
3(36)(A)(i). This includes recipients of SNAP, TANF, and recipients of 
the Supplemental Security Income program.
Section 680.650 Do veterans receive priority of service under the 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  680.650 builds on the Department's efforts to ensure 
veterans are entitled to priority of service in all Department-funded 
training programs under 38 U.S.C. 4215 and 20 CFR 1010. The proposal 
states that veterans must receive priority of service in programs for 
which they are eligible. In programs that require income-based 
eligibility to receive services, amounts paid while on active duty or 
paid by the Department of Veterans Affairs (VA) for VR, disability, or 
other related VA programs are not considered as income when determining 
low-income status. Generally, this means many separating service 
members may qualify for the WIOA adult program because it provides 
priority for low-income individuals and military earnings are not to be 
considered income for this purpose.
Section 680.660 Are separating service members eligible for dislocated 
worker activities under the Workforce Innovation and Opportunity Act?
    Proposed Sec.  680.660 explains, consistent with the Department's 
long-standing policy, that service members exiting the military qualify 
as dislocated workers. Dislocated worker funds under title I can help 
separating service members enter or reenter the civilian labor force.
    Proposed Sec.  680.660(a) clarifies that a notice of separation, a 
DD-214 from the Department of Defense, or other appropriate 
documentation that shows a separation or imminent separation from the 
Armed Forces qualifies as a notice of termination or layoff required 
for the dislocated worker definition.
    Proposed Sec.  680.660(b) clarifies that a separating service 
member meets the dislocated worker requirements concerning UC.
    Proposed Sec.  680.660(c) clarifies that a separating service 
member meets the dislocated worker requirement that an individual is 
unlikely to return to his or her previous industry or occupation.
7. Subpart F--Work-Based Training
Introduction
    Proposed Sec. Sec.  680.700 through 680.850 are proposed 
regulations for work-based training under WIOA. The proposed 
regulations apply to (OJT) training, customized training, incumbent 
worker training, and transitional jobs. The proposed regulations 
include specific information about general, contract, and employer 
payment requirements. Work-based training is employer-driven with the 
goal of unsubsidized employment after participation. Generally, work-
based training involves a commitment by an employer or employers to 
fully employ successful participants after they have completed the 
program. Registered apprenticeship training is a type of work-based 
training that can be funded in the adult and dislocated worker 
programs; additionally pre-apprenticeships may be used to provide work 
experiences that can help participants obtain the skills needed to be 
placed into a registered apprenticeship.
    Work-based training can be an effective training strategy that can 
provide additional opportunities for participants and employers in both 
finding high quality work and in developing a high quality workforce. 
Each of these work-based models can be effectively used to target 
different job seeker and employer needs. OJT is primarily designed to 
provide a participant with the knowledge and skills necessary for the 
full performance of the job. Incumbent worker training is designed to 
ensure that employees of a company are able to gain the skills 
necessary to retain employment and advance within the company or to 
provide the skills necessary to avert a layoff. Customized training is 
designed to provide local areas with flexibility to ensure that 
training meets the unique needs of the job seekers and employers or 
groups of employers.
    Both training providers and OJT providers must be providing the 
highest quality training to participants. OJT contracts must be 
continually monitored so that WIOA funds provided through OJT contracts 
are providing participants with successful employment. It is important 
that OJTs have a strong ability to provide participants with in-demand 
skills with opportunities for career advancement and employers with a 
skilled workforce.
    Under WIA, States could apply for a waiver to increase 
reimbursement amounts of the OJT wage rate. Under WIOA, the statute 
enables a Governor or Local Board to increase this rate to 75 percent 
without a waiver. This change is designed to give States and Local 
Boards additional flexibility in developing OJT opportunities that work 
best with the participating employers and in the local economy.
    WIOA also explicitly allows for incumbent worker training at the 
local level. WIOA introduces incumbent worker training as an allowable 
type of training for a local area to provide. Under WIA, States could 
use their statewide activities funds to conduct incumbent worker 
training, and local areas could conduct incumbent worker training with 
an approved waiver. Incumbent worker training is designed to either 
assist workers in obtaining the skills necessary to retain employment 
or to avert layoffs and must increase both a participant's and a 
company's

[[Page 20728]]

competitiveness. Local areas may use up to 20 percent of their local 
adult and dislocated worker funds for incumbent worker training. In 
this proposed regulation, the Department seeks to ensure that incumbent 
worker training is targeted to improving the skills and competitiveness 
of the participant and increasing the competitiveness of the employer. 
The training should, wherever possible, allow the participant to gain 
industry-recognized training experience, and ultimately should lead to 
an increase in wages. To receive incumbent worker funding under WIOA, 
an incumbent worker must have an employer-employee relationship, and an 
established employment history, with the employer. Incumbent workers 
are employed at the time of their participation, and the contract funds 
are paid to the employer for training provided to the incumbent worker 
either to avert a lay-off or otherwise retain employment. An ideal 
incumbent worker training would be one where a participant acquires new 
skills allowing him or her to move into a higher skilled and higher 
paid job within the company, thus allowing the company to hire a job 
seeker to backfill the incumbent worker's position. The Departments are 
seeking comment on the best way to structure these arrangements to 
maximize the likelihood that this ideal outcome occurs.
    WIOA also discusses transitional jobs as a way for adults and 
dislocated workers with barriers to employment who are experiencing 
chronic unemployment or have an inconsistent work history to develop a 
work history and basic work skills essential to keeping a job. 
Transitional jobs are time-limited, subsidized employment in the 
private, non-profit, or public sectors.
Section 680.700 What are the requirements for on-the-job training?
    OJT is a type of training that is provided by an employer to a 
participant. During the training, the participant is engaged in 
productive work in a job for which he or she is paid, and the training 
provides the knowledge or skills essential to the full and adequate 
performance of the job. Studies over the past 3 decades have found that 
in the United States formal OJT programs have positive employment and 
earnings outcomes.\2\ OJT is a critical tool that can help jobseekers 
enter into successful employment.
---------------------------------------------------------------------------

    \2\ Kleinman, Liu, Mastri, Reed, Reed, Sattar, Ziegler, An 
Effectiveness Assessment and Cost-Benefit Analysis of Registered 
Apprenticeship in 10 States, Mathematica Policy Research, July 2012, 
Prepared for the U.S. Department of Labor, Employment and Training 
Administration.
---------------------------------------------------------------------------

    Proposed Sec.  680.700(a) explains that OJT may be provided under 
contract with an employer in the public, private non-profit, or private 
sectors. Under WIOA, the reimbursement level may be raised up to 75 
percent of the wage rate, in contrast to 50 percent of the wage rate 
under WIA. Typically, the OJT contract provides reimbursement to the 
employer for a portion of the wage rate of the participant for the 
extraordinary costs of providing training and supervision related to 
the training.
    Proposed Sec.  680.700(b) states that contracts must not be entered 
into with an employer that received payments under previous contracts 
under WIOA or WIA if the employer has exhibited a pattern of failing to 
provide OJT participants with continued long-term employment as regular 
employees with wages, employment benefits, or working conditions at the 
same level as other employees performing the same type of work for the 
same length of time.
    Proposed Sec.  680.700(c) continues the requirement under WIA that 
OJT contracts must be limited in duration to the time necessary for a 
participant to become proficient in the occupation for which they are 
receiving the OJT training. When determining the length of the 
contract, the Governor or Local Boards must take into account the skill 
requirements of the occupation, the academic and occupational skill 
level of the participant, prior work experience, and the participant's 
individual employment plan.
Section 680.710 What are the requirements for on-the-job training 
contracts for employed workers?
    Proposed Sec.  680.710 is unchanged from the WIA regulations. The 
proposal identifies the requirements for OJT contracts used to train 
employed workers.
Section 680.720 What conditions govern on-the-job training payments to 
employers?
    Proposed Sec.  680.720 identifies the conditions that govern OJT 
payment to employers. OJT payments are to be compensation to the 
employer for the extraordinary costs associated with training 
participants. The Department does not seek to define through this 
regulation what ``extraordinary costs'' are, and is seeking public 
comment on this issue. The Department generally believes extraordinary 
costs are those costs the employer has in training participants who may 
not yet have the knowledge or skills to obtain the job through an 
employer's normal recruitment process.
Section 680.730 Under what conditions may a Governor or Local Board 
raise the on-the-job training reimbursement rate up to 75 percent of 
the wage rate?
    Proposed Sec.  680.730(a) identifies the factors that a Governor or 
Local Board must consider and document in determining whether to raise 
the reimbursement rate for OJT contracts up to 75 percent of the wage 
rate.
    Proposed Sec.  680.730(1) allows for the wage rate to be up to 75 
percent after taking into consideration, among other factors, the 
characteristics of the participants (WIOA sec. 134(c)(3)(H)(ii)(I)), 
including whether the OJT contract is leading to employment for 
individuals with barriers to employment. Proposed Sec.  680.730(2) 
states that the size of the employer is a factor that must be 
considered; proposed Sec.  680.730(3) states that the quality of 
employer-provided training and advancement opportunities is a factor 
that must be considered. Proposed Sec.  680.730(4) states that the 
Governor or Local Board may consider other factors in determining 
whether it is appropriate to raise the reimbursement rate. Such other 
factors may include the number of employees participating, wage and 
benefit levels of employees both before and after OJT completion, and 
relation of training to the competitiveness of the participant. 
Proposed Sec.  680.730(b) requires that the Governor or Local Board 
must document the factors that they considered when deciding to 
increase the wage reimbursement levels above 50 percent up to 75 
percent. The Department is seeking comments from the public on how the 
relation of training to the competitiveness of the participant must be 
analyzed when implementing this provision.
Section 680.740 How can on-the-job training funds be used to support 
placing participants into a registered apprenticeship program?
    Proposed Sec.  680.740(a) clarifies that an OJT contract may be 
made with a registered apprenticeship program for training 
participants. OJT contracts are made with the employer, and registered 
apprenticeships generally involve both classroom and on-the-job 
instruction. The OJT contract may be made to support the OJT portion of 
the registered apprenticeship program. The Department also notes that 
registered apprenticeship programs vary in length, so the OJT may 
support the entire duration of training while other means

[[Page 20729]]

may support the beginning of the registered apprenticeship training. 
The Department is seeking comments on what an appropriate maximum 
amount of time would be for OJT funds to be used to support 
participants in registered apprenticeships.
    Proposed paragraph (b) clarifies that in some instances a 
registered apprenticeship is operated by the employer and in others it 
is operated by a training provider with a direct connection to an 
employer or group of employers. If a participant is in a registered 
apprenticeship and employed as part of that arrangement, then the OJT 
must be treated as other OJTs provided for employed workers as 
described in Sec.  680.710. If a participant is in a registered 
apprenticeship but is unemployed, the OJT funds may be provided in same 
manner as other OJTs as described in Sec.  680.700.
Section 680.750 Can Individual Training Account and on-the-job training 
funds be combined to support placing participants into a registered 
apprenticeship program?
    Local areas may use an ITA to support classroom portions of a 
registered apprenticeship program and OJT funds may be used to support 
the on-the-job portions of the registered apprenticeship program. This 
is to ensure local areas have maximum flexibility in serving 
participants and supporting their placement into registered 
apprenticeship programs.
Section 680.760 What is customized training?
    Proposed Sec.  680.760 explains that customized training is to be 
used to meet the special requirements of an employer or group of 
employers, conducted with a commitment by the employer to employ all 
individuals upon successful completion of training. The employer must 
pay for a significant share of the cost of the training.
    Proposed Sec.  680.760(a) and (b) are unchanged from WIA. In 
paragraph (c) under WIA employers were required to pay for not less 
than 50 percent of the cost of the training, WIOA removes the precise 
figure and says that the employer must pay for a ``significant cost of 
the training.''
Section 680.770 What are the requirements for customized training for 
employed workers?
    Proposed Sec.  680.770 identifies the eligibility requirements for 
employed workers to receive customized training. There may be instances 
where a worker is employed but then receives customized training under 
contract between the local area and the employer. In order for the 
employed worker to qualify, the employee must not be earning a self-
sufficient wage as determined by Local Board policy, the requirements 
of customized training in proposed Sec.  680.760 must be met, and the 
training must incorporate new technologies, processes, or procedures; 
skills upgrades; workplace literacy; or other appropriate purposes, as 
identified by the Local Board. Proposed Sec.  680.770 is unchanged from 
WIA. The Department is interested in comments that discuss how to 
distinguish customized training from OJT. Should they focus on 
different service populations, different training strategies, or 
different types of jobs?
Section 680.780 Who is an ``incumbent worker'' for purposes of 
statewide and local employment and training activities?
    Proposed Sec.  680.780 is designed to update the definition of an 
incumbent worker from WIA. An incumbent worker is employed with the 
company when the incumbent worker training starts. The Department is 
seeking comment on the appropriate amount of time an employee must have 
worked for the employer before being eligible for incumbent worker 
training. The Department is proposing a minimum of 6 months, but is 
seeking substantive comments on this proposal. The Department is also 
seeking comments on how incumbent worker training should increase the 
competitiveness of the employee or employer for the purposes of 
identifying high-quality incumbent worker opportunities.
Section 680.790 What is incumbent worker training?
    Proposed Sec.  680.790 discusses the purposes served by and the 
conditions relating to incumbent worker training as prescribed by WIOA 
sec. 134(d)(4)(B).
    Incumbent worker training is designed to meet the special 
requirements of an employer (including a group of employers) to retain 
a skilled workforce or avert the need to lay off employees by assisting 
the workers in obtaining the skills necessary to retain employment. The 
employer or group of employers must pay for a portion of the cost of 
providing the training to incumbent workers.
Section 680.800 What funds may be used for incumbent worker training?
    Proposed Sec.  680.800 provides that under WIOA, local areas may 
use up to 20 percent of their combined total of adult and dislocated 
worker allotments for incumbent worker training. States may use their 
statewide activities funds and Rapid Response funds for statewide 
incumbent worker training activities.
Section 680.810 What criteria must be taken into account for an 
employer to be eligible to receive local incumbent worker funds?
    Proposed Sec.  680.810 provides the criteria a Local Board must use 
when deciding on using funds for incumbent worker training with an 
employer. Paragraphs (a) through (c) address participant 
characteristics, the relationship of the training to the 
competitiveness of the participant and employer, and other factors that 
the Local Board determines appropriate. These factors may include the 
number of employees in training, wages and benefits (including post-
training increases), and the existence of other training opportunities 
provided by the employer.
Section 680.820 Are there cost sharing requirements for local area 
incumbent worker training?
    Proposed Sec.  680.820 clarifies that there are cost sharing 
requirements for employers participating in incumbent worker training 
to pay for the non-Federal share of the cost of providing training to 
incumbent workers of the employers.
Section 680.830 What is a transitional job?
    Proposed Sec.  680.830 explains that transitional jobs are time-
limited work experiences that are subsidized for individuals with 
barriers to employment who are chronically unemployed or have an 
inconsistent work history. These jobs may be in the public, private, or 
non-profit sectors. Transitional jobs can be effective solutions for 
individuals to gain necessary work experience that they would otherwise 
not be able to get through training or an OJT contract. The goal is to 
establish a work history for the individual, demonstrate work success, 
and develop skills that lead to entry into unsubsidized employment. The 
difference between a transitional job and an OJT contract is that in a 
transitional job there is no expectation that the individual will 
continue his or her hire with the employer after the work experience is 
complete.
Section 680.840 What funds may be used for transitional jobs?
    Proposed Sec.  680.840 states that local areas may reserve up to 10 
percent of their combined total of adult and dislocated worker 
allotments for transitional jobs and must be provided

[[Page 20730]]

along with comprehensive career services and supportive services.
Section 680.850 May funds provided to employers for work-based training 
be used to assist, promote, or deter union organizing?
    Proposed Sec.  680.850 clarifies that there is an explicit 
prohibition on the use of work-based training funds which includes OJT, 
customized training, incumbent worker training, transitional jobs or 
registered apprenticeship for assisting, promoting, or deterring union 
organizing activities.
8. Subpart G--Supportive Services
Introduction
    This section defines the scope and purpose of supportive services 
and the requirements governing their disbursement. A key principle in 
WIOA is to provide local areas with the authority to make policy and 
administrative decisions and the flexibility to tailor the workforce 
system to the needs of the local community. To ensure maximum 
flexibility, the regulations provide local areas the discretion to 
provide the supportive services they deem appropriate subject to the 
limited conditions prescribed by WIOA. Local Boards must develop 
policies and procedures to ensure coordination with other entities to 
ensure non-duplication of resources and services and to establish 
limits on the amount and duration of such services. Local Boards are 
encouraged to develop policies and procedures that ensure that 
supportive services are WIOA-funded only when these services are not 
available through other agencies and that the services are necessary 
for the individual to participate in title I activities. Supportive 
services may be made available to anyone participating in title I 
activities.
    Needs-related payments are designed to provide a participant with 
resources for the purpose of enabling them to participate in training 
services. The Department recognizes that many individuals in need of 
training services may not have the resources available to participate 
in the training. Needs-related payments can help individuals meet their 
non-training expenses and help them to complete training successfully. 
A participant must be enrolled in a training program in order to 
receive needs-related payments.
Section 680.900 What are supportive services for adults and dislocated 
workers?
    Proposed Sec.  680.900 explains that supportive services are 
services, such as transportation, child care, dependent care, housing, 
and needs-related payments, that are necessary to enable an individual 
to participate in career and training services. Referrals to supportive 
services are one of the career services that must be made available to 
adults and dislocated workers through the one-stop delivery system. The 
proposed section also provides that Local Boards, in consultation with 
the one-stop partners and other community service providers, must 
develop a policy on supportive services that ensures resource and 
service coordination in the local area. The policy must address 
procedures for referral to such services, including how such services 
will be funded when they are not otherwise available from other 
sources. When developing this policy, the Department encourages Local 
Boards to consider incorporating local legal aid services. Legal aid is 
able to reduce barriers to employment and establish employment 
eligibility such as by helping secure a driver's license, expunging 
criminal records, and addressing debts or credit reporting issues.
    In the context of a coordinated one-stop delivery system envisioned 
by WIOA, the one-stop needs to take into consideration all of the 
available supportive service resources so that participants may receive 
the best supportive services available and to ensure that funds are 
spent to maximize participants' opportunity to participate in career 
and training services.
Section 680.910 When may supportive services be provided to 
participants?
    Proposed Sec.  680.910 states that supportive services may only be 
provided to participants who are in career or training services, unable 
to obtain supportive services through other programs providing 
supportive services, and that they must be provided in a manner 
necessary to enable individuals to participate in career or training 
services. The proposed rule removes references to ``core'' and 
``intensive'' services, terms now characterized as ``career services'' 
under WIOA.
Section 680.920 Are there limits on the amounts or duration of funds 
for supportive services?
    Proposed Sec.  680.920 provides that Local Boards may establish 
limits on providing supportive services or allow the one-stop operator 
to establish limits, including caps on the amount of funding and length 
of time for supportive services to be made available. The rule text 
makes no changes from WIA.
Section 680.930 What are needs-related payments?
    Proposed Sec.  680.930 defines needs-related payments as financial 
assistance to a participant for the purpose of enabling the individual 
to participate in training. Needs-related payments are a type of 
supportive service that provides direct financial payments to a 
participant, and unlike other supportive services, the participant must 
be enrolled in training to receive needs-related payments. The rule 
text makes no substantive changes from WIA; it provides updated 
citations to WIOA.
Section 680.940 What are the eligibility requirements for adults to 
receive needs-related payments?
    Proposed Sec.  680.940 clarifies that for an adult to receive a 
needs-related payment he or she must be unemployed, not qualify for or 
have ceased to qualify for UC, and be enrolled in a training program.
Section 680.950 What are the eligibility requirements for dislocated 
workers to receive needs-related payments?
    Proposed Sec.  680.950 provides that dislocated workers may receive 
needs-related payments if they are unemployed, ceased to qualify for UC 
or trade readjustment allowance under Trade Adjustment Assistance 
(TAA), and be enrolled in training by certain deadlines. It makes one 
clarification from WIA in that it provides that the dislocated worker 
must be enrolled in training.
Section 680.960 May needs-related payments be paid while a participant 
is waiting to start training classes?
    Proposed Sec.  680.960 states that payments may be provided if the 
participant has been accepted into a program that will begin within 30 
calendar days.
Section 680.970 How is the level of needs-related payments determined?
    Proposed Sec.  680.970(a) explains that the needs-related payment 
level for adults must be established by the Local Board. The Department 
recognizes the costs of different labor markets and believes that 
payment levels are best set locally to ensure the needs-related 
payments meet their purpose of enabling participants to receive 
training services.
    Proposed Sec.  680.970(b) explains how needs-related payments for 
dislocated workers are calculated. If the participant is a dislocated 
worker and has established eligibility for UC, the needs-related 
payment must not exceed the

[[Page 20731]]

higher of the weekly level of UC the participant receives or an amount 
equal to the poverty level for an equivalent time period. If the 
participant qualifies for dislocated worker services, but not for UC as 
a result of the qualifying layoff, the needs-related payment must not 
exceed the higher of the weekly level of UC the participant would 
receive if she or he had qualified, if the weekly benefit amount that 
the participant would have received can be determined, or an amount 
equal to the poverty level for an equivalent time period. Local Boards 
must adopt policies to adjust the weekly payment level if there are 
changes in total family income.

E. Part 681--Youth Activities Under Title I of the Workforce Innovation 
and Opportunity Act

1. Introduction
    Under WIOA, Federal, State, and local partnerships that put the 
youths' interests first will help the nation's disconnected youth to 
succeed. The common performance measures across WIOA core programs, 
adult and youth programs under WIOA title I, and Adult Education and 
Vocational Rehabilitation programs under WIOA titles II and IV provide 
a mechanism to support youth service alignment. WIOA envisions the 
Department's youth programs, including Job Corps, YouthBuild, and the 
youth formula-funded program, coordinating to support systems alignment 
and service delivery for youth. Local and State plans will articulate 
this vision of youth workforce investment activities and help ensure a 
long-term supply of skilled workers and leaders in local communities.
    WIOA affirms the Department's commitment to providing high quality 
services for youth and young adults beginning with career exploration 
and guidance, continued support for educational attainment, 
opportunities for skills training in in-demand industries and 
occupations, and culminating with a good job along a career pathway or 
enrollment in post-secondary education. All of the Department's youth-
serving programs continue to promote evidence-based strategies that 
also meet the highest levels of performance, accountability, and 
quality in preparing young people for the workforce. The Department's 
focus on performance and accountability is emphasized through the 
implementation of the new primary indicators of performance for 
eligible youth across programs and through their use of the primary 
indicators for program management and decision-making.
    WIOA maintains WIA's focus on OSY in Job Corps and YouthBuild, 
while greatly increasing the focus on OSY in the WIOA youth formula-
funded program. The shift in policy to focus on those youth most in 
need is based on the current state of youth employment. With an 
estimated 6 million 16-24 year olds in our country not employed or in 
school, WIOA youth programs provide a continuum of services to help 
these young people navigate between the educational and workforce 
systems. The Department, working with its Education and Health and 
Human Services partners, plans to provide intensive technical 
assistance around meeting the needs of this population.
    WIOA calls for customer-focused services based on the needs of the 
individual participant. This includes the creation of career pathways 
for youth in all title I youth programs, including a connection to 
career pathways as part of a youth's individual service strategy in the 
youth formula-funded program. In addition, many services under title I 
youth programs are based on the individual needs of participants. WIOA 
also calls for this population to be intimately involved in the design 
and implementation of services so the youth voice is represented and 
their needs are being met.
    This integrated vision also applies to the workforce system's other 
shared customer-employers. By repositioning youth as an asset to 
employers with a need for skilled workers, the value of employers 
engaging the youth workforce system and programs is enhanced. Employers 
are critical partners that provide meaningful growth opportunities for 
young people through work experiences that give them the opportunity to 
learn and apply skills in real-world setting and ultimately jobs that 
young people are ready to fill given the opportunity.
    The Department recognizes that much of this alignment and 
integration is already happening in local areas and regions across the 
country. WIOA aims to build upon these existing efforts through an 
emphasis on system alignment, an increased focus on serving OSY and 
those most in need, an emphasis on the needs of individual 
participants, and the prioritization of connections with employers, 
especially through work experience opportunities. The Department 
recognizes that WIOA also includes major shifts in approach and is 
committed to working with the youth workforce investment system to 
partner in the implementation of these changes through guidance and 
technical assistance.
    WIOA supersedes the youth formula-funded program under title I, 
subtitle B, chapter 2 Youth Workforce Investment Activities. It further 
aligns the WIOA youth program with the other ETA youth training 
programs, including YouthBuild and Job Corps, as well as with titles II 
and IV of WIOA by requiring common performance measures across all core 
programs.
    WIOA includes a number of significant changes for the youth 
formula-funded program. The biggest change under WIOA is the shift to 
focus resources primarily on OSY. WIOA increases the minimum percentage 
of funds required to be spent on OSY from 30 percent to 75 percent. 
This intentional shift refocuses the program to serve OSY during a time 
when large numbers of youth and young adults are out of school and not 
connected to the labor force. While the Department recognizes this 
transition to serve more OSY will take time to implement, it is 
critical that States and local areas begin to incorporate strategies 
for recruiting and serving more OSY.
    These strategies must incorporate strong framework services which 
must include intake, objective assessments, and the development of 
individual service strategy, case management, supportive services, and 
follow-up services. They must also consider how to ensure that American 
Job Center staff have the requisite knowledge and sensitivity to the 
needs of OSY to effectively serve them. The Department plans to release 
subsequent guidance on these matters but also welcomes comments at this 
time on preferred approaches.
    In addition, WIOA includes a major focus on providing youth with 
work experience opportunities. WIOA prioritizes work experiences with 
the requirement that local areas must spend a minimum of 20 percent of 
local area funds on work experience. Under WIOA, work experience 
becomes the most important of the program elements. WIOA also 
introduces five new program elements: Financial literacy; 
entrepreneurial skills training; services that provide labor market and 
employment information about in-demand industry sectors or occupations 
available in the local areas; activities that help youth prepare for 
and transition to post-secondary education and training; and education 
offered concurrently with and in the same context as workforce 
preparation activities and training for a specific occupation or 
occupational cluster.

[[Page 20732]]

    WIOA enhances the youth program design through an increased 
emphasis on individual participant needs by adding new components to 
the objective assessment and individual service strategy. WIOA 
incorporates career pathways as part of both the objective assessment 
and development of the individual service strategy. In addition, the 
individual service strategy must directly link to one or more of the 
performance indicators. The program design under WIOA also includes 
effective connections to employers, including small employers, in in-
demand industry sectors and occupations.
2. Subpart A--Standing Youth Committees
Section 681.100 What is a standing youth committee?
    This proposed section describes a standing youth committee. WIOA 
eliminates the requirement for Local Boards to establish a youth 
council; however, the Local Board may choose to establish, ``a standing 
committee to provide information and to assist with planning, 
operational, and other issues relating to the provision of services to 
youth, which must include CBOs with a demonstrated record of success in 
serving eligible youth'' (WIOA sec. 107(b)(4)(A)(ii)). The Department 
recognizes the difficulty under WIA in some local areas in maintaining 
the required youth council partnerships. The Department encourages 
Local Boards to consider establishing standing youth committees, taking 
advantage of the flexibility under WIOA to design standing youth 
committee membership to meet the local area's needs. Additionally, the 
law further clarifies that an existing youth council may be designated 
as the youth standing committee if they are fulfilling the requirements 
of a standing committee which means that they have members of the Local 
Board who have the appropriate experience and expertise in youth 
educational and workforce development (WIOA sec. 107(b)(4)(C)). The 
Department encourages Local Boards to designate high performing youth 
councils as standing youth committees if appropriate. Local Boards are 
responsible for the oversight of youth programs. Under WIA, youth 
councils were mandated to fulfill this function for the Board. Local 
Boards now may choose to fulfill the oversight responsibility, or have 
the discretion to delegate this function to a standing youth committee. 
If Local Boards choose not to delegate this function to a standing 
youth committee, they are responsible for conducting oversight of youth 
workforce investment activities under WIOA sec. 129(c).
Section 681.110 Who is included on a standing youth committee?
    This proposed section describes the members of a standing youth 
committee if the Local Board chooses to establish such a committee 
based on WIOA secs. 107(b)(4)(A)(ii) and 129(c)(3)(C). The members must 
include a member of the Local Board, who must chair the committee, 
members of CBOs with a demonstrated record of success in serving 
eligible youth and other individuals with appropriate expertise and 
experience who are not members of the Local Board. The committee may 
also include parents, participants, and youth. A Local Board may 
designate an existing entity such as an effective youth council as the 
standing youth committee if its membership meets the WIOA membership 
requirements.
Section 681.120 What does a standing youth committee do?
    This proposed section describes the duties of a standing youth 
committee if the Local Board chooses to establish such a committee 
based on WIOA secs.107(b)(4)(A)(ii) and 129(c)(3)(C). The standing 
committee's main function is to inform and assist the Local Board in 
developing and overseeing a comprehensive youth program. The details of 
its responsibilities are assigned by the Local Board.
3. Subpart B--Eligibility for Youth Services
Section 681.200 Who is eligible for youth services?
    This proposed section based on WIOA sec. 3(18) describes 
eligibility for the WIOA title I youth formula-funded program which 
includes two groups: In-school youth (ISY) and OSY and establishes 
specific criteria for each group. The eligible WIOA title I youth 
population represents youth who face challenges and barriers to success 
in the labor market.
Section 681.210 Who is an ``out-of-school youth''?
    This proposed section describes how one meets the eligibility for 
an OSY for purposes of the title I WIOA youth program. OSY youth must 
not attend any school, be between the ages of 16 and 24 at time of 
enrollment, and meet one or more of a list of eight criteria. With one 
exception, the WIOA criteria are generally the same as those under WIA. 
The section clarifies that age is based on time of enrollment and as 
long as the individual meets the age eligibility at time of enrollment 
they can continue to receive WIOA youth services beyond the age of 24. 
Unlike under WIA or under the definition of an ISY, low income is not a 
requirement to meet eligibility for most categories of OSY under WIOA. 
However, low income is now a part of the criteria for youth who need 
additional assistance to enter or complete an educational program or to 
secure or hold employment. Also, WIOA has made youth with a disability 
a separate eligibility criterion.
    In addition, WIOA includes a new criterion: A youth who is within 
the age of compulsory school attendance, but has not attended school 
for at least the most recent school year calendar quarter. Because 
school districts differ in what they use for school year quarters, the 
time period of a school year quarter is based on how a local school 
district defines its school year quarters. WIOA lists this criterion as 
the second on the list of eight that satisfy the third of the three 
primary requirements.
Section 681.220 Who is an ``in-school youth''?
    This proposed section describes how one meets the eligibility for 
an ISY for purposes of the WIOA title I youth program. ISY youth must 
be attending school, including secondary or post-secondary school, be 
between the ages of 14 and 21 at time of enrollment, be low-income, and 
meet one or more of a list of seven criteria. These are essentially the 
same criteria as under WIA but the disability criterion has been 
separated from the ``needs additional assistance'' criterion. The 
section clarifies that age is based on time of enrollment and as long 
as the individual meets the age eligibility at time of enrollment they 
can continue to receive WIOA youth services beyond the age of 21. WIOA 
includes a youth as low-income if he or she receives or is eligible to 
receive a free or reduced price lunch under the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1751 et seq.).
Section 681.230 What does ``school'' refer to in the ``not attending or 
attending any school'' in the out-of-school and in-school definitions?
    The term school refers to both secondary and post-secondary school 
as defined by the applicable State law for secondary and post-secondary 
institutions. This proposed section provides that for purposes of title 
I of WIOA, the Department does not consider providers of adult 
education under title II of WIOA, YouthBuild

[[Page 20733]]

programs, or Job Corps programs as schools. Therefore, if the only 
``school'' the youth attends is adult education provided under title II 
of WIOA, YouthBuild, or Job Corps, the Department will consider the 
individual an OSY youth for purposes of title I of WIOA youth program 
eligibility.
    WIOA emphasizes the importance of coordination among Federally-
funded employment and training programs, including those authorized 
under titles I and II. Many disconnected youth age 16 to 24 meet 
eligibility requirements for both WIOA title I youth activities and 
WIOA title II adult education. Co-enrollment between these two programs 
can be very beneficial to disconnected youth as they can receive work 
experience and occupational skills through title I funding and literacy 
skills through title II funding. Because the eligibility for title II 
is similar to that for an OSY under title I, an individual who is not 
enrolled or required to be enrolled in secondary school under State 
law, it is consistent to consider such youth already enrolled in title 
II as an OSY for purposes of title I WIOA youth eligibility.
Section 681.240 When do local youth programs verify dropout status, 
particularly for youth attending alternative schools?
    This proposed section provides that dropout status is determined at 
the time of enrollment for eligibility as an OSY and that once a youth 
is enrolled as an OSY, that status continues, for purposes of the 75 
percent OSY enrollment requirement, for the duration of the youth's 
enrollment, even if the youth later returns to a school. Because WIOA 
does not define the term alternative school, States must develop a 
definition. The Department advises States to define alternative school 
consistent with their State education agency alternative school 
definition. As of September 2014, 43 States and the District of 
Columbia have formal definitions of alternative education. The intent 
of WIOA is to serve more OSY who are disconnected from school and work, 
while continuing to develop strategies and provide services to ISY in 
collaboration with community partners.
Section 681.250 Who does the low-income eligibility requirement apply 
to?
    This proposed section discusses the low-income eligibility criteria 
for OSY and ISY. For OSY, only those youth who are the recipient of a 
secondary school diploma or its recognized equivalent and are either 
basic skills deficient or an English language learner and youth who 
require additional assistance to enter or complete an educational 
program or to secure or hold employment must be low-income. For OSY who 
are subject to the justice system, homeless, pregnant or parenting, or 
have a disability, income eligibility documentation is not required by 
statute. All ISY must be low-income. Under WIOA, there are 
circumstances when local areas will find documenting low income for 
youth formula program eligibility less burdensome than it was under the 
WIA youth program. For example, for ISY a local program can use 
eligibility for free or reduced price lunch as low-income 
documentation. For all youth, those living in a high-poverty area are 
considered low-income. The section also sets out the exception to the 
low-income requirement that up to 5 percent of youth who meet all the 
other eligibility requirements need not be low-income. The 5 percent is 
calculated based on all youth served in the WIOA local youth program in 
a given PY.
Section 681.260 How does the Department define ``high poverty area'' 
for the purposes of the special rule for low-income youth in Workforce 
Innovation and Opportunity Act?
    WIOA contains a new provision that allows for youth living in a 
high-poverty area to automatically meet the low-income criterion that 
is one of the eligibility criteria for ISY and for some OSY. In order 
to maintain consistency across the country, the Department proposes 
that a high-poverty area be defined as a Census tract; a set of 
contiguous Census tracts; Indian Reservation, tribal land, or Native 
Alaskan Village; or a county that has a poverty rate of at least 30 
percent as set every 5 years using American Community Survey 5-Year 
data. While there is no standard definition for the term ``high-poverty 
area'' in Federal programs, the Census Bureau uses two similar 
concepts. One is ``poverty area,'' that is an area with a poverty rate 
of at least 20 percent and the other is ``area with concentrated 
poverty,'' that is an area with a poverty rate of at least 40 percent. 
The term high-poverty area implies an area that has more poverty than a 
``poverty area'' but not as much poverty as an ``area with concentrated 
poverty.'' In addition, current Department competitive grant programs 
for ex-offenders define high poverty areas as communities with poverty 
rates of at least 30 percent. The Department is seeking comments on 
whether the poverty thresholds the Department is proposing are the most 
appropriate levels for youth living in a high poverty area.
Section 681.270 May a local program use eligibility for free or reduced 
price lunches under the National School Lunch Program as a substitute 
for the income eligibility criteria under title I of the Workforce 
Innovation and Opportunity Act?
    This proposed section describes a change from WIA in which a local 
program can use eligibility for free or reduced price lunch under the 
Richard B. Russell National School Lunch Act as one of the factors to 
determine whether a participant meets the low-income criteria for 
eligibility for the WIOA youth program.
Section 681.280 Is a youth with a disability eligible for youth 
services under the Act if their family income exceeds the income 
eligibility criteria?
    This proposed section reiterates the WIOA provision that, for an 
individual with a disability, income level for eligibility purposes is 
based on his/her own income rather than his/her family's income.
Section 681.290 How does the Department define the ``basic skills 
deficient'' criterion in this part?
    This proposed section reiterates the basic skills deficient 
criterion that is part of the eligibility criteria for both OSY and 
ISY, for purposes of title I of WIOA. For the second part of the 
definition, which reads ``a youth who is unable to compute or solve 
problems, or read, write, or speak English at a level necessary to 
function on the job, in the individual's family, or in society,'' the 
State and/or Local Board must further define how the State or Local 
Board will determine if a youth is unable to demonstrate these skills 
well enough to function on the job, in their family, or in society as 
part of its respective State or local plan. The section also provides 
that local programs must use valid and reliable assessment instruments 
and provide reasonable accommodations to youth with disabilities in the 
assessment process in making this determination.
Section 681.300 How does the Department define the ``requires 
additional assistance to complete an educational program, or to secure 
and hold employment'' criterion in this part?
    This proposed section allows States and/or local areas to define 
the ``requires additional assistance . . .'' criterion that is part of 
the OSY and ISY eligibility. It clarifies that if this criterion is not 
defined at the State level and a local area uses this criterion in 
their OSY or ISY eligibility, the local

[[Page 20734]]

area must define this criterion in their local plan.
Section 681.310 Must youth participants enroll to participate in the 
youth program?
    This proposed section clarifies that there is no self-service 
concept for the WIOA youth program and every individual receiving 
services under WIOA youth must meet ISY or OSY eligibility criteria and 
formally enroll in the program. It defines enrollment as the collection 
of information to support an eligibility determination and 
participation in any one of the 14 program elements. Under WIA the 
Department received many questions about the point in time that a youth 
became enrolled in the program. The Department hopes the proposed 
addition of connecting enrollment to receipt of a program element 
clarifies the moment at which enrollment occurs. The reference to EO 
data in the corresponding section under WIA was dropped because all 
rules related to data collection are covered in Sec.  677 on 
performance management.
4. Subpart C--Youth Program Design, Elements, and Parameters
Section 681.400 What is the process used to select eligible youth 
providers?
    WIA regulations did not address the process for identifying and 
selecting eligible youth providers required in WIA sec. 123. The 
Department has received numerous inquiries asking for clarification on 
the competitive selection of youth providers and which services must be 
provided by entities identified in accordance with WIA sec. 123. This 
proposed regulation clarifies which youth activities may be conducted 
by the local grant recipient and which services must be provided by 
entities identified in accordance with WIOA sec. 123. Consistent with 
Sec.  664.405(a)(4), the competitive selection requirement in WIOA sec. 
123 does not apply to framework services if the grant recipient/fiscal 
agent provides these services. The Department allows this because in 
some cases the grant recipient/fiscal agent may be best positioned to 
provide such services. For example, the grant recipient/fiscal agent 
that provides framework services can ensure continuity of WIOA youth 
programming as youth service providers change.
Section 681.410 Does the requirement that a State and local area expend 
at least 75 percent of youth funds to provide services to out-of-school 
youth apply to all youth funds?
    This proposed section describes the new minimum expenditure 
requirement under WIOA that States and local areas must expend a 
minimum of 75 percent of youth funds on OSY. Under WIA, local areas 
were required to spend at least 30 percent of funds to assist eligible 
OSY. This represents a significant shift in the focus of the WIOA youth 
program and the Department recognizes such a shift will require 
additional technical assistance and guidance, including assistance to 
other youth-serving programs. This section also describes that the 
minimum 75 percent OSY expenditure applies to both local area funds and 
statewide youth activities funds reserved by the Governor. However, 
only those statewide funds spent on direct services to youth are 
subject to the OSY expenditure requirement. Funds spent on statewide 
youth activities that do not provide direct services to youth, such as 
most of the required statewide youth activities listed in WIOA sec. 
129(b)(1), are not subject to the OSY expenditure requirement. In 
addition, local area administrative costs are not subject to the 75 
percent OSY minimum expenditure. The OSY expenditure rate is calculated 
for statewide funds after subtracting out funds that are not spent on 
direct services to youth. The OSY expenditure rate is calculated for 
local area funds after subtracting the funds spent on administrative 
costs. For example, if a local area receives $1 million and spends 
$100,000 on administrative costs, the remaining $900,000 is subject to 
the OSY expenditure rate. In this example, the local area would be 
required to spend at least $675,000 (75 percent) of the $900,000 on 
OSY.
    This section also clarifies the guidelines by which a State that 
receives a minimum allotment under WIOA sec. 127(b)(1) or under WIOA 
sec. 132(b)(1) may request an exception to decrease the expenditure 
percentage to not less than 50 percent. The OSY exception language at 
WIOA sec. 129(a)(4)(B) references sec. 127(b)(1)(C)(iv) and sec. 
132(b)(1)(B)(iv), which includes States that receive 90 percent of the 
allotment percentage for the preceding year under the youth or adult 
formula programs (WIOA secs. 127(b)(1)(C)(iv)(I) and 
132(b)(1)(B)(iv)(I)) and States that receive the small State minimum 
allotment under either program (WIOA secs. 127(b)(1)(C)(iv)(II) and 
132(b)(1)(B)(iv)(II)). Under WIA this exception was only available to 
States receiving the small State minimum allotment, and no State 
submitted a request for the exception. The Department proposes to limit 
the approval of requests described in WIOA sec. 129(a)(4)(B) to only 
those States that receive the small State minimum allotment under WIOA 
secs. 127(b)(1)(C)(iv)(II) and 132(b)(1)(B)(iv)(II). Thus, requests to 
decrease the percentage of funds to be used to provide activities to 
OSY will not be granted to States based on their having received 90 
percent of the allotment percentage for the preceding year. When the 
Secretary receives such a request from a State based on having received 
90 percent of the allotment percentage for the preceding year, the 
request will be denied without the Secretary exercising further 
discretion.
    While the list of States receiving the small State minimum 
allotment is generally consistent, there is an almost complete yearly 
turnover of the States receiving the 90 percent minimum allotment. 
Given this continuous turnover, approving a request from these States 
for an exception to the 75 percent expenditure requirement would cause 
significant disruption in the operation of local youth programs. In 
particular, States and local areas would be unable to develop and 
implement long-term service delivery strategies and plans and would be 
unable to establish the appropriate infrastructure necessary to meet 
the 75 percent expenditure requirement. These disruptions would 
adversely affect the quality of services that could be delivered to 
youth program participants, particularly OSY, thereby undermining one 
of the most significant changes in priorities from WIA to WIOA. Given 
the disruption and harm that would result from approving requests from 
States receiving the 90 percent minimum allotment for an exception to 
the 75 percent expenditure requirement, the Department proposes to 
limit the approval of this exception to States receiving the small 
State minimum allotment.
    Even in those States receiving a small State minimum allotment, it 
will be very difficult for a State to make an affirmative determination 
that, after analysis of the local area's youth population, the local 
area ``will not be able'' to use 75 percent of its funds for OSY, which 
is a required element of any request.

[[Page 20735]]

Section 681.420 How must Local Boards design Workforce Innovation and 
Opportunity Act youth programs?
    This proposed section describes the framework for the WIOA youth 
program design. The framework includes an objective assessment; an 
individual service strategy, which programs must update as needed to 
ensure progression through the program; and general case management; 
and follow-up services that lead toward successful outcomes for WIOA 
youth program participants. WIOA makes two significant changes to WIA's 
requirements for service strategies. One is that the service strategy 
must be linked to one or more of the indicators of performance in WIOA 
sec. 116(b)(2)(A)(ii). The other is that the service strategy must 
identify career pathways that include appropriate education and 
employment goals. For both objective assessment and individual service 
strategy, programs may use recently completed assessments or service 
strategies conducted by another education or training program rather 
than create new assessments or service strategies if they determine it 
is appropriate to do so.
    This proposed section also describes the requirement that Local 
Boards must link to youth-serving agencies and adds local human 
services agencies to the list that WIA required. It provides that Local 
Boards must provide eligible youth with information about the full 
array of applicable or appropriate services available through the Local 
Board or other eligible providers, or one-stop partners. It also 
provides that Local Boards must refer eligible youth to appropriate 
services that have the capacity to serve them on a concurrent or 
sequential basis. The proposed section also provides that eligible 
providers must refer youth who either do not meet the enrollment 
requirements for that program or cannot be served by that program for 
further assessment, if necessary, or to appropriate programs to meet 
the skills and training needs of the participant. Local Boards must 
also involve specific members of the community, including parents and 
youth participants, in designing and implementing the WIOA youth 
program.
    A new provision in WIOA allows the Local Board to use up to 10 
percent of their funds to implement pay-for-performance contracts for 
the program elements described in Sec.  681.460. Pay-for-performance 
contracts are further described in Sec.  683.500.
Section 681.430 May youth participate in both the Workforce Innovation 
and Opportunity Act youth and adult programs concurrently, and how do 
local program operators track concurrent enrollment in the Workforce 
Innovation and Opportunity Act youth and adult programs?
    This proposed section provides that youth may participate in both 
the WIOA youth program and the adult program at the same time if they 
are eligible for both and it is appropriate. If such concurrent 
enrollment occurs, local programs must track expenditures separately by 
program. This section eliminated the reference, included in the WIA 
regulations, to concurrent enrollment in the dislocated worker program 
because any youth meeting eligibility for the dislocated worker program 
would have already successfully attained a job and would most likely be 
more appropriately served under the dislocated worker program. The 
section also provides that youth who are eligible under both programs 
may enroll concurrently in WIOA title I and II programs.
Section 681.440 How does a local youth program determine if an 18 to 24 
year old is enrolled in the Workforce Innovation and Opportunity Act 
youth program or Workforce Innovation and Opportunity Act adult 
program?
    Individuals aged 18 to 24 are eligible for the WIOA adult and youth 
programs and local areas must determine whether to serve such 
individuals in the youth program, adult program, or both. This proposed 
section provides that a local youth program must determine whether to 
enroll an 18 to 24 year old in the youth program or adult program based 
on the individual's career readiness as determined through an objective 
assessment.
Section 681.450 For how long must a local Workforce Innovation and 
Opportunity Act youth program serve a participant?
    The Department proposes this new section because the Department's 
monitoring of local areas commonly found WIA youth were exited before 
successfully completing the program due to artificial time constraints 
or the ending of youth service provider contracts. In order to ensure 
that youth are not prematurely exited from the WIOA youth program, the 
Department proposes that youth programs serve participants for the 
amount of time necessary to ensure they are successfully prepared to 
enter post-secondary education and/or unsubsidized employment. While 
there is no minimum or maximum time a youth can participate in the WIOA 
youth program, programs must link program participation to a 
participant's individual service strategy and not the timing of youth 
service provider contracts or PYs.
Section 681.460 What services must local programs offer to youth 
participants?
    This proposed section lists the 14 program elements, including 5 
new youth program elements in WIOA sec. 129(c)(2) that were not 
included under WIA. These new elements are (1) education offered 
concurrently with and in the same context as workforce preparation 
activities and training for a specific occupation or occupational 
cluster; (2) financial literacy education; (3) entrepreneurial skills 
training; (4) services that provide labor market and employment 
information about in-demand industry sectors or occupations available 
in the local area, such as career awareness, career counseling, and 
career exploration services; and (5) activities that help youth prepare 
for and transition to post-secondary education and training. In 
addition, WIOA has revised some of the WIA program elements. For 
example, the element on tutoring, study skills training, instruction 
leading to the completion of secondary school, including dropout 
prevention strategies, has been revised to provide that the dropout 
prevention (and recovery) strategies must be evidence-based and to make 
clear that the completion of secondary school can be accomplished by 
attainment of a secondary school diploma or its recognized equivalent, 
including a certificate of attendance or similar document for 
individuals with disabilities. This change is consistent with WIOA's 
emphasis on evidence-based programs. WIOA also combines the two WIA 
elements of summer youth employment programs and work experiences so 
that summer youth employment programs become one item in a list of work 
experiences and adds pre-apprenticeship programs to the list of work 
experiences. Finally, WIOA expands the description of the occupational 
skill training element to provide for priority consideration for 
training programs that lead to recognized post-secondary credentials 
that are aligned with in-demand industry sectors or occupations if the 
programs meet WIOA's quality criteria. This change is consistent with 
WIOA's increased emphasis on credential attainment. The section 
clarifies that while local WIOA youth programs must

[[Page 20736]]

make all 14 program elements available to WIOA youth participants, 
local programs have the discretion to determine which elements to 
provide to a participant based on the participant's assessment and 
individual service strategy.
Section 681.470 Does the Department require local programs to use 
Workforce Innovation and Opportunity Act funds for each of the 14 
program elements?
    This proposed section clarifies that local WIOA youth programs must 
make all 14 program elements available to youth participants, but not 
all services must be funded with WIOA youth funds. Local programs may 
leverage partner resources to provide program elements that are 
available in the local area. If a local program does not fund an 
activity with WIOA title I youth funds, the local area must have an 
agreement in place with the partner to offer the program element and 
ensure that the activity is closely connected and coordinated with the 
WIOA youth program if enrolled youth participate in the program 
element. By closely connected and coordinated, the Department means 
that case managers must contact and monitor the provider of the non-
WIOA-funded activity to ensure the activity is of high quality and 
beneficial to the youth participant.
Section 681.480 What is a pre-apprenticeship program?
    This proposed section defines a pre-apprenticeship program, which 
is one of the types of work experiences listed under WIOA sec. 
129(c)(2)(C). The reference to pre-apprenticeship programs is new in 
WIOA. The definition is based on TEN No. 13-12 that defined a quality 
pre-apprenticeship program. Local youth programs must coordinate pre-
apprenticeship programs to the maximum extent feasible with registered 
apprenticeship programs, which are defined in WIOA sec. 171(b)(10), and 
require at least one documented partnership with a registered 
apprenticeship program. Quality pre-apprenticeship programs play a 
valuable role in preparing entrants for registered apprenticeship and 
contribute to the development of a diverse and skilled workforce. Pre-
apprenticeship programs can be adapted to meet the needs of 
participants, the various employers and sponsors they serve, and the 
specific employment opportunities available in a local labor market. 
Pre-apprenticeship training programs have successfully demonstrated 
that obstacles such as low math skills, poor work habits, lack of 
access to transportation, and lack of knowledge of sector opportunities 
can be overcome when coordinated training and support is provided to 
workers.
Section 681.490 What is adult mentoring?
    This proposed section describes the adult mentoring program 
element. It provides that mentoring must last at least 12 months and 
defines the mentoring relationship. It clarifies that mentoring must be 
provided by an adult other than the WIOA youth participant's assigned 
case manager since mentoring is above and beyond typical case 
management services. Mentoring may take many forms, but at a minimum 
must include a youth participant matched with an individual adult 
mentor other than the participant's case manager. Mentoring services 
may include group mentoring, mentoring via electronic means, and other 
forms as long as it also includes individual mentoring from an assigned 
mentor. Local programs should use evidence-based models of mentoring to 
design their programs. The Department recommends that programs provide 
rigorous screening, training, and match support for mentors, and 
frequent contact with youth and parents as the match progresses.
Section 681.500 What is financial literacy education?
    This proposed section describes the financial literacy program 
element, new under WIOA. Financial literacy is described in the 
allowable statewide youth activities in WIOA sec. 129(b)(2)(D) and the 
proposed section reiterates what was stated in the allowable statewide 
activities section of supporting financial literacy. The Department has 
added an element on informing participants about identity theft to the 
list in WIOA sec. 129(b)(2)(D). The Department recognizes the 
importance of equipping workers with the knowledge and skills they need 
to achieve long-term financial stability and solicits comments on how 
best to achieve this goal.
Section 681.510 What is comprehensive guidance and counseling?
    This proposed section describes the types of guidance and 
counseling services that fall under the program element comprehensive 
guidance and counseling, which includes referral to services provided 
by partner programs, as appropriate. When referring participants to 
necessary counseling that cannot be provided by the local youth program 
or its service providers, the local youth program must coordinate with 
the organization it refers to in order to ensure continuity of service.
Section 681.520 What are leadership development opportunities?
    This proposed section includes all of the examples of leadership 
development opportunities included in WIA regulations and adds two new 
examples of appropriate leadership development opportunities that a 
local area may consider when providing leadership development 
opportunities. One new example is civic engagement activities; the 
other is activities which put the youth in a leadership role.
Section 681.530 What are positive social and civic behaviors?
    While WIA included positive social behaviors as part of the 
description of leadership development opportunities, WIOA adds ``civic 
behaviors'' to the description of the leadership development program 
element. This proposed section expands the examples of positive social 
behaviors to include keeping informed of community affairs and current 
events.
Section 681.540 What is occupational skills training?
    This proposed section provides a definition for the occupational 
skills training program element. It was not previously defined under 
WIA. WIOA sec. 129(c)(2)(D) further sharpens the focus on occupational 
skills training by requiring local areas to give priority consideration 
for training programs that lead to recognized post-secondary 
credentials that align with in-demand industries or occupations in the 
local area. The Department interprets this requirement to mean that 
when seeking occupational skills training for a participant, local 
areas must first seek training programs that lead to recognized post-
secondary credentials in in-demand industries or occupations and only 
if none are available should they refer a participant to a training 
program that does not lead to a recognized post-secondary credential. 
The Department has further defined this priority by requiring that such 
training be outcome oriented and focused on an occupational goal in a 
participant's individual service strategy and that it be of sufficient 
duration to impart the skills needed to meet that occupational goal. In 
all cases, local areas must ensure that the training program meets the 
quality standards in WIOA sec. 123.

[[Page 20737]]

Section 681.550 Are Individual Training Accounts permitted for youth 
participants?
    Prior WIA regulations provide that ITAs are not an authorized use 
of youth funds. However, more than 30 States received waivers under WIA 
to use ITAs for older and OSY to: (1) Expand training options; (2) 
increase program flexibility; (3) enhance customer choice; and (4) 
reduce tracking, reporting and paperwork that comes with dual 
enrollment. ITAs have therefore become a critical component in WIA to 
provide training services to older and OSY. WIOA is silent on the use 
of ITAs for youth participants.
    This proposed section allows ITAs for older OSY aged 18 to 24. This 
change will enhance individual participant choice in their education 
and training plans and provide flexibility to service providers. ITAs 
also reduce the burden for local areas by eliminating duplicative 
paperwork needed for enrolling older youth in both youth and adult 
formula programs. ITAs will benefit disconnected youth and reinforce 
WIOA's emphasis on increasing access to and opportunities for workforce 
investment services for this population. To the extent possible, local 
programs must ensure that youth participants are involved in the 
selection of their educational and training activities. The Department 
welcomes comments on the proposed allowance of ITAs for older OSY.
Section 681.560 What is entrepreneurial skills training and how is it 
taught?
    This proposed section defines entrepreneurial skills training, a 
new program element under WIOA. While entrepreneurial skills training 
was previously listed as an example of a work experience in WIA, under 
WIOA it is a separate program element. The Department has also provided 
a list of possible methods of teaching youth entrepreneurial skills 
training. The Department is specifically seeking comments from 
stakeholders around developmentally appropriate types and methods of 
teaching entrepreneurial skills.
Section 681.570 What are supportive services for youth?
    This proposed section lists examples of supportive services for 
youth and includes two additional examples which were not listed in WIA 
youth regulations. Needs-related payments were listed as an example of 
an adult supportive service under WIA and also can be critical to youth 
living on their own who participate in a youth program. WIOA lists 
needs-related payments as a supportive service at sec. 3(59). In 
addition, the Department lists assistance with educational testing and 
accommodations as examples because they are prime example of services 
that can be necessary to enable an individual to participate in 
activities authorized by WIOA. For example, assistance with educational 
testing can provide OSY with the opportunity to take high school 
equivalency tests, as well as other exams for occupational 
certifications and credentials, while accommodations may be necessary 
for youth with disabilities to participate in certain assessments and 
to have equal access and opportunity to participate in a variety of 
work-based learning activities.
Section 681.580 What are follow-up services for youth?
    This proposed section discusses the importance of follow-up 
services and lists examples of follow-up services for youth, which WIOA 
requires be provided for a minimum of 12 months. It clarifies that 
follow-up services may be different for each individual based on his or 
her individual needs. It also clarifies that follow-up services are 
more than a contact attempted or made to gather information for 
reporting purposes because follow-up services provide the necessary 
support to ensure the success of youth post-program. Therefore, to meet 
follow-up requirements, programs must do more than just make an attempt 
to contact to gather reporting information. The Department seeks 
comments on whether this section includes reasonable requirements for 
follow-up services.
Section 681.590 What is the work experience priority?
    The proposed section discusses the 20 percent minimum expenditure 
requirement on the work experience program element in WIOA sec. 
129(c)(4). Work experience is a critical WIOA youth program element, 
arguably the most important program element as signaled by the minimum 
expenditure requirement. Work experience helps youth understand proper 
workplace behavior and what is necessary in order to attain and retain 
employment. Work experience can serve as a stepping stone to 
unsubsidized employment and is an important step in the process of 
developing a career pathway for youth. Research shows work experience 
is correlated with higher high school graduation rates and success in 
the labor market. This is particularly important for youth with 
disabilities.
Section 681.600 What are work experiences?
    The proposed section defines the work experience program element 
using language similar to the corresponding WIA regulation and includes 
the four work experience categories listed in WIOA sec. 129(c)(2)(C). 
In addition, the section eliminates the language under the 
corresponding WIA rule that OJT is not an appropriate work experience 
activity for youth. WIOA sec. 129(c)(2)(C)(4) explicitly enumerates OJT 
opportunities as one type of work experience.
    Work experiences are designed to enable youth to gain exposure to 
the working world and its requirements. Work experiences should help 
youth acquire the personal attributes, knowledge, and skills needed to 
obtain a job and advance in employment.
Section 681.610 How will local Workforce Innovation and Opportunity Act 
youth programs track the work experience priority?
    This proposed section discusses the new requirement under WIOA that 
a local youth program must use not less than 20 percent of the funds 
allocated to the local area to provide youth participants, both ISY and 
OSY, with paid and unpaid work experiences. In order to ensure that 
local WIOA youth programs meet this requirement, the Department 
proposes that local WIOA youth programs track program funds spent on 
paid and unpaid work experiences and report such expenditures as part 
of the local WIOA youth financial reporting. Program expenditures on 
the work experience program element include wages as well as staffing 
costs for the development and management of work experiences. Like the 
75 percent OSY expenditure requirement, local area administrative costs 
are not subject to the 20 percent minimum work experience expenditure 
requirement. The work experience expenditure rate is calculated for 
local area funds after subtracting out funds spent on administrative 
costs and is calculated based on remaining total local area youth funds 
rather than calculated separately for in-school and OSY.
Section 681.620 Does the Workforce Innovation and Opportunity Act 
require Local Boards to offer summer employment opportunities in the 
local youth program?
    Under WIOA sec. 129(c)(2)(C), summer employment opportunities are 
one of four suggested components of the paid and unpaid work 
experiences

[[Page 20738]]

program element. While local WIOA youth programs must provide paid and 
unpaid work experiences, they may take the form of a number of 
activities including: summer employment opportunities and employment 
opportunities available throughout the year, pre-apprenticeship 
programs, internships and job shadowing, and OJT. While summer 
employment opportunities are an allowable activity and a type of work 
experience that counts toward the work experience priority (which 
requires a minimum of 20 percent of funds allocated to a local area are 
spent on work experience) they are not a required program element as 
they previously were under WIA.
Section 681.630 How are summer employment opportunities administered?
    Local areas must adhere to the provisions outlined in WIOA sec. 123 
for selecting service providers when administering summer employment 
opportunities. This proposed section discusses that WIOA requires local 
areas to identify youth providers of youth workforce investment 
activities, including work experiences such as summer employment 
opportunities, by awarding grants or contracts on a competitive basis. 
As provided in WIOA sec. 123, if there is an insufficient number of 
eligible providers of youth workforce investment activities, Local 
Boards may award grants or contracts on a sole source basis. This 
section also clarifies that the summer employment administrator does 
not need to select the employers who are providing the employment 
opportunities through a competitive process.
Section 681.640 What does education offered concurrently with and in 
the same context as workforce preparation activities and training for a 
specific occupation or occupational cluster mean?
    This proposed section describes the new program element at WIOA 
sec. 129(c)(2)(E): ``education offered concurrently and in the same 
context as workforce preparation activities and training for a specific 
occupation or occupational cluster.'' The new program element requires 
integrated education and training to occur concurrently and 
contextually with workforce preparation activities and workforce 
training for a specific occupation or occupational cluster for the 
purpose of educational and career advancement. Youth participants will 
not be required to master basic academic skills before moving on to 
learning career-specific technical skills. This approach aligns with 
recent research which found students using an integrated education and 
training model had better rates of program completion and persistence 
than a comparison group (Jenkins 2009).
Section 681.650 Does the Department allow incentive payments for youth 
participants?
    This proposed section clarifies that incentives under the WIOA 
youth program are permitted. The Department has included the reference 
to 2 CFR 200 to emphasize that while incentive payments are allowable 
under WIOA, the incentives must be in compliance with the requirements 
in 2 CFR part 200. This is not a change; under WIA, incentives must 
have followed the Uniform Administrative Requirements at 29 CFR parts 
95 and 97 and the cost principles at 2 CFR parts 220, 225, and 230. The 
Uniform Administrative Requirements were recently consolidated into 2 
CFR part 200. For example, under 2 CFR part 200, Federal funds may not 
be spent on entertainment costs. Therefore, incentives may not include 
entertainment, such as movie or sporting event tickets or gift cards to 
movie theaters or other venues whose sole purpose is entertainment. 
Additionally, under 2 CFR part 200, there are requirements related to 
internal controls to safeguard cash which also apply to safeguarding of 
gift cards, which are essentially cash.
Section 681.660 How can parents, youth, and other members of the 
community get involved in the design and implementation of local youth 
programs?
    This proposed section discusses the requirement in WIOA sec. 
129(c)(3)(C) for the involvement of parents, participants, and 
community members in the design and implementation of the WIOA youth 
program and provides examples of the type of involvement that would be 
beneficial. The Department has also included in this proposed section 
the requirement in WIOA sec. 129(c)(8) that Local Boards must also make 
opportunities available to successful participants to volunteer to help 
participants as mentors, tutors, or in other activities.
5. Subpart D--One-Stop Services to Youth
Section 681.700 What is the connection between the youth program and 
the one-stop service delivery system?
    This proposed section reiterates the connections between the youth 
program and the one-stop system that were provided in the WIA 
regulations and includes additional examples of such connections 
including collocating WIOA youth program staff at one-stop centers and/
or equipping one-stop centers and staff with the information necessary 
to advise youth on programming to best fit their needs. The intent 
behind this section is to encourage staff working with youth under 
titles I, II, and IV of WIOA to coordinate better services for youth. 
This could include youth-focused one-stop centers in locations where 
youth tend to gather and making one-stops more accessible to youth.
Section 681.710 Do Local Boards have the flexibility to offer services 
to area youth who are not eligible under the youth program through the 
one-stop centers?
    Consistent with WIA, this proposed section clarifies that Local 
Boards may provide services to youth through one-stop career centers 
even if the youth are not eligible for the WIOA youth program.
F. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act
1. Introduction
    WIOA provides a reservation of funds for employment and training 
activities to be undertaken on a statewide basis. These activities are 
undertaken by the States, rather than by Local Boards. WIOA requires 
States to undertake certain statewide activities, but authorizes States 
to undertake a much wider range of activities. These required and 
allowable activities are addressed by this part of the proposed 
regulations. WIOA designates the percentage of funds that may be 
devoted to these activities from annual allotments to the States--up to 
15 percent must be reserved from youth, adult, and dislocated worker 
funding streams, and up to an additional 25 percent of dislocated 
worker funds must be reserved for statewide rapid response activities.
    The up to 15 percent funds from the three funding streams may be 
expended on employment and training activities without regard to the 
source of the funding. For example, funds reserved from the adult 
funding stream may be used to carry out statewide youth activities and 
vice versa. These funds must be used for certain specified activities, 
such as for State evaluations and for provision of data for Federal 
evaluations and research. If funds permit, States have authority to 
provide a variety of other activities. State set-

[[Page 20739]]

aside funds allow States to continually improve their comprehensive 
workforce programs, ensure a national system that meets the needs of 
job seekers, workers and employers, and contribute to building a body 
of evidence to improve the effectiveness of services under WIOA.
2. Subpart A--General Description
    This subpart describes what is encompassed by the term ``statewide 
employment and training activities.'' It explains that States have both 
required and allowable activities to be undertaken on a statewide basis 
for adults, dislocated workers and youth. States have significant 
flexibility in the development of policies and strategies for the use 
of their statewide funds.
Section 682.100 What are the statewide employment and training 
activities under title I of the Workforce Innovation and Opportunity 
Act?
    Proposed Sec.  682.100 provides that there are both required and 
allowable statewide employment and training activities. States may use 
up to 15 percent of adult, youth and dislocated worker funds for 
statewide activities relating to youth, adult, dislocated workers. The 
States are encouraged to develop policies and strategies for utilizing 
these funds, and must include descriptions of these activities in their 
State Plan.
Section 682.110 How are statewide employment and training activities 
funded?
    Proposed Sec.  682.110 does not change how statewide employment and 
training activities from how such activities were funded under WIA. The 
Governor has authority to use up to 15 percent of the adult, dislocated 
worker, and youth funds allocated to the State for statewide 
activities. The regulation provides that the adult, dislocated worker 
and youth 15 percent funds may be combined for use on required or 
allowed statewide activities regardless of the funding source.
3. Subpart B--Required and Allowable Statewide Employment and Training 
Activities
    This subpart first discusses required statewide activities. WIOA 
continues the activities that were required under WIA, but adds several 
additional required activities, such as assistance to State entities 
and agencies described in the State Plan, alignment of data systems, 
regional planning, implementation of industry or sector partnerships, 
and cooperation in providing data for Federal evaluation and research 
projects. Required statewide activities under WIA and continued under 
WIOA include: Outreach to businesses, dissemination of information on 
the performance and cost of attendance for programs offered by ETPs, 
and conducting evaluations.
    This subpart also discusses allowable statewide activities. The 
Department provides States with a significant amount of flexibility in 
how these funds may be used for statewide activities. States can test 
and develop promising strategies. This regulation is not designed to be 
an exhaustive list, but more illustrative of the types of allowable 
statewide activities that may be provided with these funds.
Section 682.200 What are required statewide employment and training 
activities?
    Proposed Sec.  682.200(a) explains that rapid response activities 
are a required statewide employment and training activity, as described 
in Sec.  682.310.
    Proposed Sec.  682.200(b) explains the different types of 
information States are required to disseminate to the workforce system, 
including ETPLs, providers of work-based training providers, business 
partnership and outreach information, promising service delivery 
strategies, performance information about training providers, eligible 
providers of youth activities, and information about physical and 
programmatic accessibility for individuals with disabilities.
    Proposed Sec.  682.200(c) states that the information listed in 
Sec.  682.200(b) be made widely available. It explains that this may be 
achieved by various means, including posting information on State Web 
sites, physical and electronic handouts for dissemination to one-stop 
centers, and other appropriate means of sharing information.
    Proposed Sec.  682.200(d) explains that under WIOA sec. 
134(a)(2)(B)(vi), States are required to use the 15 percent set aside 
to conduct evaluations in accordance with WIOA sec. 116(e) whose 
requirements are implemented in Sec.  682.220.
    Proposed Sec.  682.200(e) requires States to provide technical 
assistance to local areas in carrying out activities described in the 
State Plan.
    Proposed Sec.  682.200(f) requires States to assist local areas, 
one-stop operators, and eligibile providers in providing opportunities 
for individuals with barriers to employment to enter in-demend industry 
sectors, and developing exemplary program activities.
    Proposed Sec.  682.200(g) and (h) require States to assit local 
areas carry out the regional planning and service delivery efforts, and 
provide local areas information on and support for the effective 
development, convening, and implementation of industry and sector 
partnerships.
    Proposed Sec.  682.200(i) requires the States to provide technical 
assistance to local areas that fail to meet their performance goals.
    Proposed Sec.  682.200(j) requires the State to carry out 
monitoring and oversight activities of the programs providing services 
to youth, adults and dislocated workers in WIOA. Under this authority, 
States may conduct reviews that compare services provided to male and 
female youth.
    Proposed Sec.  682.200(k) clarifies that States may provide 
additional assistance to local areas that have high concentrations of 
eligible youth to ensure a transition to education or unsubsidized 
employment.
    Proposed Sec.  682.200(l) requires States to operate a fiscal and 
management accountability system. This system is vital to ensure high 
levels in integrity of managing Federal funds and conveying important 
information on the services being provided to job seekers and 
employers. As required by WIOA, the Department will consult with a wide 
range of stakeholders to establish guidelines for this system (see WIOA 
sec. 116(i)(1)).
Section 682.210 What are allowable statewide employment and training 
activities?
    In addition to the required statewide activities, States are 
provided with significant flexibility to innovate within the workforce 
system with various allowable statewide employment and training 
activities. These allowable activities are vital to ensuring a high 
quality workforce system, and can be used to ensure continuous 
improvement throughout the system. This regulation is not designed to 
be an exhaustive list, but more illustrative of the types of allowable 
statewide activities that may be provided with these funds.
    Proposed Sec.  682.210(a) provides that State administration of the 
adult, dislocated worker, and youth employment and training activities 
is an allowable statewide employment and training activity. This 
proposed section maintains the same 5 percent administrative cost limit 
that existed under WIA and clarifies that the 5 percent is calculated 
based on the total allotment received by the State and counts towards 
the amount reserved for statewide activities.
    Proposed Sec.  682.210(b) permits States to use WIOA funds to 
develop and implement innovative programs and

[[Page 20740]]

strategies designed to meet employer needs, including small business 
needs. The workforce system provides services to dual customers--the 
job seeker and the employer. The Department values ways in which States 
can engage businesses with all levels of the workforce system. Under 
this section, States have authority to carry out a variety of programs 
identified in WIOA sec. 134(a)(3)(A)(i), such as sectoral and industry 
cluster strategies, microenterprise and entrepreneurial training, and 
utilization of business intermediaries.
    Proposed Sec.  682.210(c) permits States to develop and implement 
strategies for serving individuals with barriers to employment and 
encourages States to partner with other agencies to coordinate services 
among all the one-stop partners.
    Proposed Sec.  682.210(d) and (e) allow the development and 
identification of education and training programs that respond to real-
time labor market analysis, that allow for use of direct or prior 
assessments, and that provide credit for prior learning, or which have 
other characteristics identified in WIOA sec. 134(a)(3)(A)(iii). States 
can also use these funds to increase training for individuals placed in 
non-traditional employment.
    Proposed Sec.  682.210(f) permits States to undertake research and 
demonstrations related to meeting the education and employment needs of 
youth, adults and dislocated workers, as stated in WIOA secs. 
129(b)(2)(A)(i) and (ii) and sec. 134(a)(3)(A)(ix).
    Proposed Sec.  682.210(g) provides that States may utilize 
statewide funds to support the development of alternative, evidence-
based programs, and other activities which increase the choices 
available to eligible youth and encourage them to reenter and complete 
secondary education, enroll in post-secondary education and advanced 
training, progress through a career pathway, and/or enter unsubsidized 
employment that leads to economic self-sufficiency.
    Proposed Sec.  682.210(h) provides that States may utilize 
statewide funds to support the provision of career services throughout 
the one-stop delivery system in the State.
    Proposed Sec.  682.210(i) provides that States may incorporate a 
variety of financial literacy identified in WIOA sec. 129(b)(23)(D) 
activities into the service delivery strategy within the one-stop 
delivery system. Financial literacy activities are important services 
for job seekers to receive as part of their career services. The 
Department encourages States to develop and implement strategies for 
local areas to utilize to coordinate financial literacy services to 
participants under this authority and to provide financial literacy 
activities to youth under Sec.  682.210(i).
    Proposed Sec.  682.210(j) allows for States to provide incentive 
grants to local areas for reaching performance goals. Incentive grants 
can be an effective way to develop and maintain a culture of continuous 
improvement throughout the workforce system.
    Proposed Sec.  682.210(k) allows for States to provide technical 
assistance to local areas, CEOs, one-stop operators, one-stop partners, 
and eligible providers in local areas for the development of exemplary 
program activities and the provision of technology to facilitate remote 
access to services provided through the one-stop delivery system in the 
State (WIOA sec. 129(b)(2)(E));
    Proposed Sec.  682.210(l) allows States to provide technical 
assistance to local areas using pay-for-performance contract 
strategies. Under WIOA, pay-for-performance is an allowable use of 
funds that could potentially be an effective mechanism to improve 
participant outcomes. Technical assistance will be of vital importance 
to ensure these strategies are being implemented effectively. Under 
this authority, such technical assistance may include providing 
assistance with data collections, meeting data entry requirements, 
identifying levels of performance, and conducting evaluations of pay-
for-performance strategies.
    Proposed Sec.  682.210(m) allows for States to utilize technology 
to allow for remote access to training services provided through the 
one-stop delivery system. The Department recognizes that there are many 
different means by which individuals may get training and that the use 
of technology may be particularly helpful to participants in rural 
areas. The Department encourages States to develop and build upon 
strategies that enable job seekers to connect with the workforce system 
remotely.
    Proposed Sec.  682.210(n) allows States to conduct activities that 
increase coordination between workforce investment activities and 
economic development approaches. This proposed regulation also allows 
States to undertake activities that provide coordination with services 
provided by other agencies, such as child support services and 
assistance (provided by State and local agencies carrying out part D of 
title IV of the SSA (42 U.S.C. 651 et seq.)), cooperative extension 
programs (carried out by the Department of Agriculture), programs in 
the local areas for individuals with disabilities (including the 
programs identified in WIOA sec. 134(a)(3)(A)(viii)(II)(cc)), adult 
education and literacy activities including those carried out by public 
libraries, and activities in the corrections system to connect ex-
offenders reentering the workforce. The Department strongly encourages 
States to engage in these coordination activities. States are also 
encouraged to use funds to develop and disseminate workforce and labor 
market information (WLMI).
    Proposed Sec.  682.210(o) allows States to implement promising 
practices for workers and businesses as described in WIOA sec. 
134(a)(3)(A).
    Proposed Sec.  682.210(p) allows States to develop economic self-
sufficiency standards that specify the income needs of families, 
including the number and ages of children. The Department recognizes 
that different regions in a State may have different levels of self-
sufficiency; therefore the proposed regulation allows for States to 
take geographical considerations into account in developing self-
sufficiency standards.
    Proposed Sec.  682.210(q) allows States to develop and disseminate 
common intake procedures across core and partner programs, including 
common registration procedures. The Department strongly encourages 
States to utilize this approach in a customer-focused way. By 
developing common procedures one-stop staff can reduce duplication and 
enhance the job seeker experience in the workforce system.
    Proposed Sec.  682.210(r) encourages coordinating activities with 
the child welfare system to facilitate provision of services to 
children and youth who are eligible for assistance.
Section 682.220 What are States' responsibilities in regard to 
evaluations and research?
    The Department proposes to add rules on new State responsibilities 
and opportunities in regard to evaluation and research under WIOA sec. 
116(e). State and Federal evaluations and research are intended to 
improve the quality and effectiveness of programs under WIOA, and 
contribute to an expanding body of knowledge on customers, their needs, 
existing services, and innovative approaches. Examples of the 
strategies that might be explored in evaluation and research include, 
but are not limited to, interventions envisioned in WIOA itself, such 
as integrated systems, coordinated services, career pathways, and 
multiple forms of engagement with businesses.

[[Page 20741]]

    WIOA continues the long-standing support of evaluation and research 
found in prior law, but strengthens it in several ways, including 
permitting States to evaluate activities under all of the title I-IV 
core programs, including adult education and vocational education, and 
permitting the use of funds from any of these programs for evaluations. 
WIOA expands coordination and the consultative process regarding 
evaluations and research beyond the workforce system to State agencies 
for the other core programs. Further, WIOA now also requires States to 
coordinate their own studies with evaluations and research projects 
undertaken by the Departments of Labor and Education, as well as to 
cooperate in provision of data and information for such Federal 
evaluations.
    Provisions on the Department's role in evaluation and research, now 
found under WIOA sec. 169 (corresponding to secs. 171 and 172 in WIA), 
authorize a wide array of studies. Evaluation and research projects, 
permissible under WIOA sec. 169 include process and outcome studies, 
pilot and demonstration projects, analyses of programmatic and economic 
data, impact and benefit-cost analyses, and use of rigorous designs to 
test the efficacy of various interventions, such as random assignment. 
WIOA also implies that State evaluations are synonymous with multiple 
forms of research to test various interventions and to examine program 
services and outcomes in greater depth and over a longer time frame 
than is typically done for performance accountability purposes for 
State and local programs.
    Section 169 also includes numerous examples of studies to be 
conducted in collaboration with other Federal Departments. WIOA sec. 
169 also requires several research projects (evaluations of title I 
programs, a study of career pathways in health and child care, and 
research on equivalent pay), suggests seven research projects (relating 
to disconnected youth, business needs, nontraditional occupations, 
performance indicators, public housing assistance recipients, older 
workers, and credentials for prior learning), and permits studies of 
Federally-funded employment-related programs and activities under 
``other provisions of law.'' An evaluation of Job Corp is also required 
under WIOA sec. 161.
    WIOA recognizes in sec. 116(e) the vital role of States in 
providing various forms of quantitative and qualitative data and 
information for Federal evaluations and research. Data, survey 
responses, and site visit information, from both the State and local 
levels are essential in Federal research designed to understand and 
evaluate various existing systems and services as well as new 
interventions. All of these forms of data and information are needed to 
understand key participant characteristics, labor market outcomes, the 
role of decision-makers, how faithfully interventions are implemented, 
and the quality of the customer experience. Further, there are multiple 
potential data sources which could include, for example, UI 
administrative data and wage records, data from other workforce 
programs, various documents, and individual or focus group interviews 
with State officials, local program staff and customers.
    To assure that data are consistently available from all States, the 
rules emphasize the need for States to cooperate, to the extent 
practicable, in data collection activities for evaluations conducted by 
the Departments of Labor and Education, as related to services under 
WIOA and to other employment-related programs and activities. The rules 
also clarify the need for States to provide data from sub-State level 
and from State and local workforce boards and, further, to encourage 
provision of data by other partner programs. A method for informing the 
Department about possible problems in providing the various forms of 
data and for resolving such problems is also proposed below.
    Specifically, the rules include the following:
    Proposed Sec.  682.220(a)(1) explains that under WIOA secs. 116(e), 
129(b)(1)(A) and 134(a)(2)(B)(vi), States are required to use funds 
reserved by the Governor for statewide activities (the State set-aside) 
to conduct evaluations of activities of the core programs. Paragraph 
(b)(1) requires States to coordinate such evaluations with Federal 
evaluation and research activities under WIOA secs. 169 and 
242(c)(2)(D) (regarding adult education), under the Rehabilitation Act 
of 1973 and under the Wagner-Peyser Act [29 U.S.C. 49i(b)]. Paragraph 
(a) delineates the role of evaluations and research in promoting 
continuous improvement and high performance in existing programs and 
identifies an additional purpose of evaluation activities: Testing 
innovative services and strategies.
    Proposed Sec.  682.220(a)(2) clarifies that the States may use set-
aside funds to conduct other research and demonstration projects that 
relate to the education and employment needs for youth, adults and 
dislocated workers. Proposed Sec.  682.220(a)(3) clarifies that States 
may use funds from other WIOA title II-IV core programs but only as 
determined through the consultative processes required with State and 
Local Boards and agencies responsible for the core programs as 
referenced in paragraph (b)(1). Paragraph 682.220(e) highlights the 
opportunity for States to use and combine funds from other sources 
(consistent with Federal and State law, regulation, and guidance). The 
sources might include other Federal and State grants and contracts, as 
well as private philanthropic or other sources.
    Proposed Sec.  682.220(b) promotes State efforts to conduct 
evaluations and research, assure they relate to State goals and 
strategies, and are coordinated and designed in conjunction with State 
and Local Boards and other agencies responsible for the core programs. 
The proposed rule also lists some key features that States can include 
their evaluations and research projects when appropriate and feasible, 
not as a ``one-size-fits-all'' checklist of requirements for every 
evaluation and research project. As such, paragraphs (b)(2) through (4) 
implement WIOA sec. 116(e), but qualifies the requirements for States 
to include an analysis of customer feedback and of outcome and process 
measures when appropriate, to coordinate with Federal evaluations to 
the extent feasible, and to use the most rigorous analytical and 
statistical methods that are reasonably feasible.
    Proposed Sec.  682.220(c) implements sec. 116(e)(3) of WIOA, which 
requires States to share their evaluations with the public, including 
through electronic means, such as posting the results of all types of 
research and evaluations that States conduct on the relevant State Web 
site.
    Proposed Sec.  682.220(d)(1) implements sec. 116(e)(4) of WIOA, 
which requires States to cooperate, to the extent practicable, in 
providing data, responding to surveys, and allowing site visits in a 
timely manner for Federal evaluation, research, and investigation 
activities conducted by the Secretaries of Labor and Education or their 
agents under WIOA secs. 169 and 242, the Rehabilitation Act of 1973, 
and the Wagner-Peyser Act, as listed in Sec.  682.200(d) and above. 
(The provision of UI data for Federal evaluations and research is 
subject to regulations found in 20 CFR part 603.) The Department of 
Labor intends to work with States and the United States Census Bureau 
(Census) to explore the potential to meet the requirement that States 
provide UI wage record data for Federal evaluations and research using 
the wage record data

[[Page 20742]]

States currently provide to Census for the Longitudinal Employer-
Household Dynamics (LEHD) program. This approach to provision of UI 
data may reduce burden on State UI infrastructure, while also making 
the LEHD data set more useful to a broad array of researchers. Since 
data and survey responses from local subgrantees and State and local 
workforce boards are often critical in Federal evaluation and research 
projects, the rule also requires that States provide timely data and 
survey responses from these entities and that States assure that 
subgrantees and boards allow timely site visits for Federal 
evaluations. States are proposed to assume these responsibilities 
because of their relationship with and support of the boards as well as 
their role in overseeing the operation of subgrantees. Since States do 
not set the requirements for other one-stop partners, proposed Sec.  
682.220(d)(2) requires States to encourage these partners to cooperate 
in data provision for the relevant Federal evaluations and research.
    Proposed Sec.  682.220(d)(3) requires a Governor to inform the 
Secretary in writing if a State finds that it is not practicable to 
participate in timely provision of data, survey responses and site 
visits for Department of Labor or Department of Education evaluations 
and research, and, further, to explain why it is not practicable for 
the State to provide the requested information. This explanation will 
help the Department to work more effectively with the State to 
accommodate its concerns and mitigate or overcome any problems 
preventing the State from providing the information needed for Federal 
evaluations or research conducted under the various authorities cited 
in Sec.  682.200(d).
    Proposed Sec.  665.220(e) provides that States may use or combine 
funds, consistent with Federal and State law, regulation, and guidance, 
from other public or private sources, to conduct evaluations, research, 
and demonstration projects relating to activities under the WIOA title 
I-IV core programs. The Department will provide information, technical 
assistance, and guidance to support States in conducting their own 
evaluations and research, at the highest levels of quality and 
integrity, consistent with State goals and priorities, and using 
methodologies appropriate to the research objectives and the funds 
available. The technical assistance and guidance will also address how 
States can coordinate with studies conducted by the Departments of 
Labor and Education under WIOA and cooperate in providing data and 
other information for such Federal research.
4. Subpart C--Rapid Response Activities
Introduction
    This subpart discusses the important role that rapid response plays 
in providing customer-focused services both to dislocated workers and 
employers, thereby ensuring immediate access to affected workers to 
help them quickly reenter the workforce. The proposed regulations 
reflect the Department's experience in managing the PYs and lessons 
learned from the innovations and best practices of various rapid 
response programs around the country in planning for and meeting the 
challenges posed by events precipitating substantial increases in the 
number of unemployed individuals in States, regions and local areas. 
The proposed regulations provide a comprehensive framework for 
operating successful rapid response programs in a way that promotes 
innovation and maintains flexibility to enable States to successfully 
manage economic transitions.
    Section 134(a)(2) of WIOA authorizes the use of reserved funds for 
statewide activities to plan for and respond to events that precipitate 
substantial increases in the number of unemployed individuals. Except 
for a new provision, at sec. 134(a)(2)(A)(ii), that addresses the use 
of unobligated funds for rapid response activities, WIOA largely 
replicates the language in sec. 134 of WIA. The proposed regulations 
provide additional, detailed direction regarding required and optional 
rapid response activities. The WIA regulations concerning the rapid 
response program provided substantial flexibility in program design and 
implementation. This flexibility allowed for customized planning and 
responses based upon specific factors in a given situation--an 
important component to delivering effective services. However, some 
States and local operators did not understand the full range of 
activities allowable under the program. In crafting the proposed 
regulations, the Department has worked to maintain the same flexibility 
that the current regulation allows, while providing more detailed 
information about appropriate activities, such as layoff aversion, 
engaging business, and illustrating how these funds can be used.
    Our proposed approach is based on the premise that successful rapid 
response programs are flexible, agile, and focused on promptly 
delivering comprehensive solutions to businesses and workers in 
transition. Rapid response, when operated successfully, delivers on the 
promises that the workforce system makes to businesses, workers, and 
communities--to provide economically valuable solutions to businesses 
and critically important services to workers at the time when they are 
most needed. These proposed regulations are designed to ensure that 
rapid response programs in all States are capable of meeting those 
promises, that service levels are consistent in quality yet customized 
to specific events, and activities are driven always by the goal of 
preventing or minimizing unemployment. The proposed regulations also 
focus specifically on anticipating needs and planning for them, rather 
than only responding to layoff events.
Section 682.300 What is rapid response, and what is its purpose?
    Proposed Sec.  682.300 describes the purpose of rapid response--to 
promote economic development and vitality--and identifies the 
activities and responsibilities to meet this purpose. Proposed Sec.  
682.300(a) identifies as key components of rapid response the 
strategies and activities necessary to plan for and respond to layoffs 
or other dislocation events, including natural or other disasters. 
While many States will provide rapid response services for layoffs of 
all sizes, some States have restricted rapid response services to 
layoffs of 50 or more workers, or for which they received a Worker 
Adjustment and Retraining Notification (WARN) Act notice. While rapid 
response is required for closures and mass layoffs, the Department's 
intention is that effective services are provided to as many workers 
and companies as possible. Most employers have fewer than 50 workers, 
and thus, a substantial percentage of layoffs do not qualify for WARN 
coverage; therefore, using either of these criteria as the only 
triggers for the provision of rapid response assistance means that most 
companies and workers affected by dislocations will not be provided 
rapid response services. Establishing a strict threshold is counter to 
the purpose of rapid response, and prevents many workers and companies 
from receiving valuable services at a time when they are needed.
    Therefore, the proposed regulations do not define any threshold for 
the size of a layoff for which rapid response services are provided. 
The regulation does not specifically address plant closures because the 
Department considers the layoffs associated with closures to be covered 
under the general principles applicable to layoffs. Based on the fact 
that most companies employ fewer than 50 workers and the rapid response 
services provide significant

[[Page 20743]]

value to both affected workers and businesses, the Department expects 
that States and local areas will provide rapid response services to 
layoffs and closures of all sizes, as practicable. However, for any 
plant closure or layoff of 50 or more, rapid response services must be 
provided per the statutory reference to mass layoffs. Additionally, 
rapid response must be provided for any layoff which receives a WARN 
notice. State and local area rapid response providers must establish 
policies and procedures that allow them to serve the most companies and 
affected workers or to determine the specific scenarios which meet this 
criterion and for which they will provide rapid response services.
    Proposed Sec.  682.300(a) identifies the need to expeditiously 
deliver services in order to enable dislocated workers to transition 
quickly to new employment. The two critical phrases in this section--
``plan for and respond'' and ``as quickly as possible''--demonstrate 
that rapid response must include strategic planning and other 
activities that will ensure that dislocated workers can be reemployed 
as soon as possible.
    Proposed Sec.  682.300(b) explains that the purpose of rapid 
response is a proactive, strategic set of actions, not simply a 
response to layoffs. The proposal establishes rapid response as a 
critical tool in managing economic transition and supporting economic 
growth in communities. As stated in the proposal, rapid response 
includes a wide array of strategies and activities of which layoff 
aversion is a key component. Proposed paragraph (b)(1) describes the 
direct and informational services rapid response must provide to 
workers affected by layoffs.
    Proposed paragraph (b)(2) describes the services that rapid 
response must provide to businesses. Building and maintaining 
relationships with the business community, throughout the growth and 
decline that characterizes the business cycle, is a critical aspect of 
rapid response; establishing and maintaining these relationships allows 
for early knowledge of potential layoffs. This information not only 
provides time for undertaking actions that may prevent the layoffs from 
occurring but may also allow affected workers to connect, in a timely 
manner, with businesses that can use their skills, thereby avoiding 
unemployment or minimizing its duration.
    Engaging with businesses and delivering effective solutions to 
their needs is critical--to allow rapid response teams to meet and work 
with individuals affected by layoff, preferably before layoff and on 
company time, but also to identify companies that are growing and may 
hire dislocated workers or to deliver services that may prevent workers 
at those companies from being laid off in the future.
    Proposed paragraph (b)(3) describes the role that rapid response 
must play in developing strong, comprehensive networks of partners and 
service providers to ensure that all needed services are provided to 
businesses, workers, and communities.
    Proposed paragraph (b)(4) covers the need for rapid response to 
undertake strategic planning and data gathering to ensure readiness to 
act appropriately whenever the need arises.
Section 682.310 Who is responsible for carrying out rapid response 
activities?
    Proposed Sec.  682.310 is a new section that was split from Sec.  
665.300 under the current regulations. Its text follows the current 
regulation, Sec.  665.300(b), without substantive change, but it 
changes the verb used to describe the delivery of rapid response from 
``provide'' to ``carry out'' to track the language used in WIOA sec. 
134(a)(2).
Section 682.320 What is layoff aversion, and what are appropriate 
layoff aversion strategies and activities?
    Proposed Sec.  682.315 significantly enhances the required 
activities from those set forth in the current regulation. Rapid 
response experience under WIA has shown the importance of layoff 
aversion as a critical component of a successful rapid response 
program, to be used by States and Local Boards to prevent or minimize 
layoffs. This section describes strategies and activities which are 
designed to prevent or minimize the duration of unemployment.
    Layoff aversion is a comprehensive approach requiring the 
integration of data, relationships, partnerships, and policies and 
procedures to allow an assessment of the economic situation that exists 
within a given area. This approach enables the development of a plan 
that may be applied, at any time, to intervene and manage transition 
that occurs within that area. Layoff aversion strategies and activities 
are customized to specific needs, quickly deployable, informed by 
economic data, and designed and coordinated with partners as necessary. 
This proposed section describes examples of these strategies and 
activities.
    Proposed Sec.  682.315 provides a definition for layoff aversion, 
which has been adapted from TEGL 30-09, and describes a number of 
potential layoff aversion strategies and activities that rapid response 
programs must include, many of which were first described in (TEN) 9-
12.
Section 682.330 What rapid response activities are required?
    Proposed Sec.  682.330 describes rapid response activities that are 
required to be carried out with rapid response funds. The elements 
include activities that have been previously discussed in guidance and 
through technical assistance; elements that are required by the current 
regulation; and elements that were previously allowable, but which are 
now required. In particular, the regulation now specifically identifies 
layoff aversion activities and the provision of additional assistance 
to local areas experiencing increased dislocation events as required 
rapid response activity (paragraphs (a) and (i)) and adds new 
responsibilities in paragraphs (g) through (k). The Department's 
experience under WIA has shown that such activities are critical for a 
successful rapid response program. To meet the needs of affected 
workers and businesses, a rapid response program must be proactive, 
data-driven, engaged with businesses, and focused on preventing layoffs 
or minimizing their negative impacts. Substantially increasing the 
level of required activities under rapid response is designed to drive 
those outcomes. By undertaking these activities, the State and local 
areas will be able to effectively manage, review and evaluate rapid 
response and layoff aversion efforts.
    Proposed Sec.  682.330(a) describes layoff aversion as a required 
rapid response activity. Layoff aversion strategies and activities are 
described in proposed Sec.  682.315. The proposal requires that States 
and local areas have the capability to conduct layoff aversion; 
however, it is left to the discretion of the operators of rapid 
response programs to determine which strategies and activities are 
applicable in a given situation, based upon specific needs, policies, 
and procedures within the State and operating areas. The current 
regulation requires rapid response operators to assess the potential 
for averting layoffs; this proposal expands on this requirement by 
listing a number of specific strategies and activities that are 
critical to maintaining readiness and ensuring the ability to 
capitalize on opportunities that will prevent, or minimize the duration 
of, unemployment.
    Proposed Sec.  682.330(b) through (e) are consistent with the 
current regulations; these activities are retained as required under 
the proposed WIOA regulations.
    This proposed regulation does not define the term ``emergency 
services'' as

[[Page 20744]]

used in proposed Sec.  682.330(f); however, in the past States and 
local areas have used rapid response teams and resources for a wide 
array of activities in response to disaster situations. Such activities 
have included outreach, support, and assistance for impacted 
individuals with accessing UI or disaster unemployment assistance; 
acquisition of and support for mobile one-stop units; demographic 
information gathering for potential emergency grant applications; and 
coordination with Federal Emergency Management Agency (FEMA) or other 
disaster-response organizations. State and local area rapid response 
providers must work closely with other State and local agencies and 
other critical partners through strategic planning processes to ensure 
effective and immediate responses can be undertaken when the need 
arises.
    Proposed Sec.  682.330(g) discusses the requirement that State or 
local rapid response programs collect and utilize data as a core 
component of their work. Proposed Sec.  682.330(g)(1) requires States 
and/or local areas to identify sources of information that will provide 
early warning of potential layoffs, and to gather this data in a manner 
that best suits their needs. Proposed Sec.  682.330(g)(2) requires the 
processing and analysis of a range of economic data and information to 
ensure the best possible services are delivered to businesses and 
workers at the appropriate time. Proposed Sec.  682.330(g)(3) requires 
that States and/or local areas track data and other information related 
to the activities and outcomes of the rapid response program, so as to 
provide an adequate basis for effective program management, review, and 
evaluation of rapid response and layoff aversion efforts.
    Proposed Sec.  682.330(h) highlights the need for strategic and 
operational partnerships. Rapid response operators must develop and 
maintain partnerships with a wide range of partners to ensure the 
capability to deliver needed services and resources to businesses, 
workers, and communities whenever the need arises. The proposal 
provides some examples of organizations with which to partner, but 
States and local areas should establish partnerships with those 
organizations that are necessary to ensure the successful functioning 
of their rapid response program. Proposed Sec.  682.330(h)(1) discusses 
the use of these partnerships to conduct strategic planning and to 
ensure that assistance provided to companies, workers, and communities 
is comprehensive. Proposed Sec.  682.330(h)(2) requires that the 
partnerships developed to support rapid response programs actively 
share information on resources available on a regular basis to ensure 
that the needs of businesses, workers, and communities will be met at 
the time they are needed.
    Proposed Sec.  682.330(i) requires rapid response services to be 
provided to workers upon the filing of a petition for TAA. If the 
Department no longer processes TAA petitions due to an expiration or 
termination of the program, there will be no explicit requirement 
pertaining to TAA participants. However, such individuals, as 
dislocated workers, will continue to receive rapid response services 
upon notification of layoff consistent with State or local area 
procedure.
    Proposed Sec.  682.330(j) requires States to provide additional 
assistance to local areas that experience an event that causes 
significant layoffs that exceed the capacity of the local area to 
respond to with existing formula resources. This requirement is found 
in the current regulation at Sec.  665.300(b); the Department has made 
slight wording changes and moved it to this part. The additional 
assistance is required by WIOA sec. 134(a)(2)(A)(II). Proposed Sec.  
682.330(j) establishes the requirement that such assistance be 
provided; proposed Sec.  682.350 defines and describes what additional 
assistance entails.
    Proposed Sec.  682.330(k) describes the role of rapid response in 
organizing or supporting labor management committees. This proposed 
paragraph uses the language from the current regulation that addresses 
this point, 20 CFR 655.310(c)(1) and (2). This support is required by 
WIOA sec. 3(51), as it was under WIA sec. 101(38), where labor and 
management voluntarily agree that the establishment of such a committee 
is appropriate. It has been the Department's experience that in some 
circumstances such committees have proven ineffective; therefore, their 
establishment is not a required rapid response activity. However, where 
labor and management desire to establish such a committee, guidance and 
financial support must be provided by rapid response.
    The proposal does not include the requirement, now in 20 CFR 
655.310(c)(3), that a neutral chairperson be appointed for such a 
committee. Based on feedback received regarding the difficulties 
involved in obtaining a neutral chairperson who is familiar with the 
immediate problem, the leadership of such a committee is better left to 
the discretion of the parties involved.
    The proposal does not include the language in the current 
regulation referring to ``workforce transition committees''--the 
Department now refers to these as groups as ``community transition 
teams.'' Their role is explained in proposed Sec.  682.340.
Section 682.340 May other activities be undertaken as part of rapid 
response?
    Proposed Sec.  682.340 identifies additional activities that may be 
undertaken as part of the rapid response program. Proposed Sec.  
682.340(a) is designed to allow for innovative approaches and to ensure 
additional flexibility to prepare for and respond to layoffs, and to 
react to unusual or unforeseeable situations. Although the proposal 
leaves considerable discretion, any allowable activities must be 
designed to prevent or minimize the duration of unemployment, or to 
develop strategies or activities that will lead to better programmatic 
outcomes.
    Proposed Sec.  682.340(b) provides for the creation and operation 
of community transition teams. Community transition teams are designed 
to expand the ability of the public workforce system to enlist 
partners, community organizations, and others to provide services and 
resources in communities or areas in response to major layoffs or other 
events that have caused significant impact that are beyond the capacity 
of the public workforce system to address. Rapid response funds may be 
used to organize or sustain community transition teams that are 
organized to provide relief to impacted communities.
Section 682.350 What is meant by ``provision of additional assistance'' 
in Workforce Innovation and Opportunity Act?
    Section 665.330 of the current regulations is not maintained in the 
proposed regulations. The North American Free Trade Agreement (NAFTA) 
program to which it refers has ended. Proposed Sec.  682.350, which 
describes the provision of ``additional assistance'' to local areas, 
has been largely maintained from the existing WIA regulations. The 
Department has made a slight change to the language in the existing 
regulations for clarity, but the concept has not changed. While the 
provision of additional assistance is required, as described in 
proposed Sec.  682.330(i), the mechanisms by which such assistance may 
be provided are left to the discretion of the States.

[[Page 20745]]

Section 682.360 What rapid response, layoff aversion, or other 
information will States be required to report to the Employment and 
Training Administration?
    Proposed Sec.  682.360 does not appear in the current regulations; 
it requires that States report information about the receipt of rapid 
response services by individuals enrolled as dislocated workers. This 
information is currently required under WIA reporting guidelines. The 
Department also reserves authority to issue further guidance on the 
reporting of rapid response activities. Should such reporting become 
required, the Department will work with States and local areas to 
ensure that reporting burdens are minimized while still meeting program 
reporting goals.
Section 682.370 What are ``allowable statewide activities'' for which 
rapid response funds remaining unspent at the end of the year of 
obligation may be recaptured by the State?
    Proposed Sec.  682.370 addresses the WIOA provision at sec. 
134(a)(2)(B) that allows a State to ``recapture'' any funds reserved 
for rapid response that remain unspent at the end of the PY of 
obligation and utilize them for State set-aside activities. The 
Department has provided further definition around required and 
allowable activities under the rapid response provisions of the WIOA, 
which may support States to more fully utilize rapid response funds 
while better serving businesses and workers.

G. Part 683--Administrative Provisions Under Title I of the Workforce 
Innovation and Opportunity Act

1. Introduction
    This proposed part establishes the administrative provisions that 
apply to formula and discretionary grants and cooperative agreements 
authorized under title I of WIOA. Some administrative provisions are 
also applicable to grants provided under the Wagner-Peyser Act, as 
indicated in specific sections of this part. The remaining Wagner-
Peyser Act administrative rules are still located in 20 CFR part 658. 
Wagner-Peyser grants are included in this part to ensure consistent 
application of the common administrative provisions that apply to all 
grants awarded under title I of WIOA and the Wagner-Peyser Act. For 
instance, the audit requirements for discretionary and formula grantees 
for title I and Wagner-Peyser Act funds can be found in one section. 
The internal control requirements for both programs can be found in 
this part as well. However, contracts, rather than grants or 
cooperative agreements, are used to award most funds authorized for Job 
Corps. As such, the administrative provisions for Job Corps (subtitle C 
of title I of WIOA) will be addressed separately in 20 CFR part 686.
    Many of the proposed requirements in this part 683 are impacted by 
the Department's new rule ``Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards Final Rule,'' at 
2 CFR part 2900 published on December 19, 2014, and OMB's Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards Final Rule, dated December 26, 2013 found at 2 CFR 
part 200 (``Uniform Guidance'' or ``2 CFR part 200''). The Uniform 
Guidance, which can be found at http://www.gpo.gov/fdsys/pkg/FR-2013-12-26/pdf/2013-30465.pdf, streamlines and consolidates OMB Circulars A-
21 (2 CFR part 220), A-50, A-87 (2 CFR part 225), A-89, A-102 (29 CFR 
part 97), A-110 (29 CFR part 95), A-122 (2 CFR part 230), and A-133 (29 
CFR part 96) into a single document. The Uniform Guidance standardizes 
the administrative, cost, and audit provisions for nearly all grants 
across the Federal government including those awarded by the 
Department's WIOA Federal partners, including ED, HHS, and the 
Department of Agriculture. Federal agencies were allowed to submit 
exceptions, as defined at 2 CFR 200.102, that deviate from the Uniform 
Guidance. The list of the Department's exceptions to the Uniform 
Guidance is available at 2 CFR part 2900. Requirements of this Uniform 
Guidance, including the Department's exceptions, apply to all grants 
and cooperative agreements provided under this part.
    In this proposed part, the Department hopes to strengthen its 
administration of grants and enhance program results by providing 
consistent and uniform guidance that increases accountability and 
transparency, promotes fiscal integrity, and reduces duplication.
2. Subpart A--Funding and Closeout
    This subpart addresses the grant life cycle from fund availability 
to closeout for formula grants awarded to States under WIOA title I, 
subtitle B, and the Wagner-Peyser Act, and the grant life cycle for 
discretionary or competitive WIOA grants, awarded under subtitle D of 
title I. This subpart identifies the three financial assistance 
instruments that will be used to award funds under title I of WIOA and 
Wagner-Peyser: Contracts, grant agreements, and cooperative agreements. 
One shift from WIA to WIOA is that the Secretary will no longer use the 
Governor/Secretary agreements used under WIA. In compliance with the 
Uniform Guidance, the Department will use Notices of Award as the 
funding instrument for all grants, both formula and discretionary. 
Another shift to promote full expenditure of funds is to require that 
recipients expend the funds with the shortest period of performance 
before expending other funds. This proposed subpart also implements the 
WIOA statute's flexibility in allowing a Local Board to transfer up to 
100 percent of a PY allocation between the adult and dislocated workers 
funding streams subject to the Governor's approval. Additionally, the 
subpart proposes processes on the handling of unobligated rapid 
response funds and ETA's role in the annual reallotment process that 
takes place between the States and the Department after each PY. The 
proposed responsibility review provisions are also different from those 
under WIA to reflect the new requirements in the Uniform Guidance. 
Lastly, this subpart outlines the closeout procedures for title I of 
WIOA and Wagner-Peyser awards.
Section 683.100 When do Workforce Innovation and Opportunity Act grant 
funds become available for obligation?
    This proposed section describes the statutory requirements for the 
Department's release of formula funds under title I of WIOA and the 
Wagner-Peyser Act. WIOA youth funds may be released earlier than other 
formula funds, as early as April, to assist States and locals in 
planning youth activities. Adult and dislocated worker funds will be 
awarded on a PY basis in two payments: In July after the beginning of 
the PY and a second release of funds in October of each PY. Wagner-
Peyser funds will also be released on a PY basis, in July of each 
fiscal year. The availability of funds awarded on a competitive or 
discretionary basis will be dependent on the annual appropriation and 
on the grant or cooperative agreement.
Section 683.105 What award document authorizes the expenditure of funds 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?
    This section recognizes the use of the three funding instruments 
that conform with the Uniform Guidance: Grant agreements, cooperative 
agreements, and contracts. The Department will no longer use the 
Governor/Secretary agreement, used under WIA, as a

[[Page 20746]]

funding instrument because it is not consistent with the Uniform 
Guidance. Proposed paragraphs (b) through (e) of this section specify 
the type of funding instruments that will be used for different WIOA 
programs. Proposed paragraph (e)(3) implements WIOA sec. 169(b)(6)(B), 
which states that the Department may not award a contract or grant for 
research, studies, or multi-State projects ``to the same organization 
for more than 3 consecutive years unless such grant or contract is 
competitively reevaluated within such period.'' The Department 
interprets the central purpose of this provision to promote 
competition--it prohibits the Department from awarding lengthy 
contracts or grants on a non-competitive basis to the same 
organization. However, as long as the contract or grant is awarded on a 
competitive basis, the project (and therefore the award) may span over 
a period of more than 3 years. This is consistent with the Department's 
need to conduct lengthy research and other projects and with the new 
flexibility to incrementally fund evaluations, research, and other 
projects, provided in sec. 189(g)(2)(B)(ii) of WIOA. Finally, proposed 
paragraph (f) of Sec.  683.105 makes clear that all three funding 
instruments are subject to the closeout procedures in the Uniform 
Guidance.
Section 683.110 What is the period of performance of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser Act funds?
    This proposed section describes the period of performance for 
different types of WIOA title I and Wagner-Peyser Act grant awards. 
Proposed paragraph (a) provides a general explanation about expenditure 
periods. Specifically, the period of performance for grants is the 
statutory period of availability for expenditure, unless otherwise 
provided in the grant agreement. Funds must be spent in a timely 
manner; if they are not expended by the end of the performance period, 
they risk losing their availability. Grantees must expend funds with 
the shortest period of availability first, unless otherwise authorized 
in the agreement or in a subsequent modification. The proposed 
paragraph includes a sentence encouraging grantees to follow this rule, 
so that they use funds expeditiously and effectively. This approach 
should help reduce unexpended funds at the end of a grant's period of 
performance
    Proposed Sec.  683.110(b) through (h) restate the applicable 
periods of performance for WIOA and the Wagner-Peyser Act grants. WIOA 
did not change these periods for formula funds--adult/dislocated worker 
and youth formula funds allotted during any PY are available for 
expenditure by the State only during that PY and the 2 succeeding PYs; 
funds allocated by the State to a local area for any PY are available 
for expenditure only during that PY and the succeeding PY (WIOA sec. 
189(g)(2)). Proposed paragraph (c)(2) also requires that funds 
unexpended by a local area in the 2 year period be returned to the 
State and be used for specific purposes. This is unchanged from the WIA 
regulation at 20 CFR 667.107. However, proposed paragraph (c)(1)(ii) 
notes an exception to the 2-year performance period for local areas in 
the case of WIOA Pay-for-Performance contracting strategies, a new 
option added by secs. 129(c)(1)(D) and 134(d)(1)(iii) of WIOA and more 
fully discussed in proposed subpart E. Under this paragraph, and in 
accordance with sec. 189(g)(2)(D) of WIOA, funds used by local areas to 
carry out WIOA Pay-for-Performance contract strategies remain available 
until expended. Additional information on this provision is explained 
below in the discussion of proposed Sec.  683.530. Proposed paragraph 
(h) also implements sec. 5(c) of the Wagner-Peyser Act, and explains 
that funds allotted to States for grants under secs. 3 and 15 of the 
Wagner-Peyser Act for any PY are available for expenditure by the State 
receiving the funds only during that PY and the 2 succeeding PYs.
    Proposed paragraphs (d) and (e) provide the expenditure period for 
the Native American programs and MSFW programs under secs. 166(c) and 
167(a) of WIOA, respectively. In both programs, WIOA requires the 
Secretary to enter into grants or contracts with eligible entities 
every 4 years. Accordingly, the proposed paragraphs explain that funds 
awarded by the Department under these programs are available for 
expenditure during the period identified in the award document, which 
will not exceed 4 years.
    For grants awarded for research or evaluations under WIOA sec. 169, 
funds remain available until expended, in accordance with sec. 
189(g)(2)(B)(i) of WIOA, or for the period of performance specified in 
the terms and conditions of the award. The Secretary has the authority 
to limit the period of expenditure of these funds in the terms and 
conditions of the grant award.
    Finally, proposed paragraph (f) explains that funds allotted for 
other programs under title I of WIOA, including secs. 170 (National 
Dislocated Worker Grants (NDWGs) and 171 (Youthbuild program), are 
available for expenditure for the period of performance identified in 
the grant or contract.
Section 683.115 What planning information must a State submit in order 
to receive a formula grant?
    This proposed section implements the statutory requirement that an 
approved Unified State Plan or Combined State Plan be submitted before 
formula funds under title I, subtitle B, of WIOA and Wagner-Peyser can 
be issued. As discussed in the preamble discussion of part 676, WIOA is 
apparently inconsistent as to whether outlying areas must submit a 
Unified or Combined State Plan to receive funding under title I. The 
preamble discussion of part 676 details the apparent inconsistency and 
identifies potential options to resolve the inconsistency.
Section 683.120 How are Workforce Innovation and Opportunity Act title 
I formula funds allocated to local areas?
    This proposed section describes the timeframe and formula factors a 
Governor must employ when allocating funds to local areas under secs. 
128 and 133. It also specifies the steps a Governor must take when 
issuing allocations, including consulting with Local Boards and elected 
officials prior to issuing the allocation. The Governors must issue the 
funds to the local areas in a timely manner to allow for an adequate 
planning process.
    This section also adopts the provision in sec. 134(2)(A)(ii) of 
WIOA that allows States to use unobligated rapid response funds, after 
the completion of the PY, for statewide activities.
Section 683.125 What minimum funding provisions apply to Workforce 
Innovation and Opportunity Act adult, dislocated worker, and youth 
allocations?
    This proposed section addresses the minimum funding thresholds for 
States funded under subtitle B of title I of WIOA. Minimum funding 
thresholds are established to offset the impact of fluctuations in the 
formula factors that result from shifts in the economy that may be 
compounded by additional downturns in a particular industry or market 
in a particular State. Sections 128(b)(2)(A) and 133(b)(2)(A) of WIOA 
contain these minimum funding requirements to avoid significant swings 
in the amount of funding a State receives from 1 year to the next and 
to avoid any disruption of services or planning.

[[Page 20747]]

Section 683.130 Does a Local Board have the authority to transfer funds 
between the adult employment and training activities allocation and the 
dislocated worker employment and training activities allocation?
    This proposed section provides flexibility to local areas to 
provide services in the areas of greatest need by allowing fund 
transfers of up to 100 percent of a PY allocation between the local 
adult and local dislocated worker allocations. Proposed Sec.  
683.130(b) requires a Local Board to obtain written approval of the 
Governor before making such a transfer. This flexibility to transfer 
funds is contained in sec. 133(b)(4) of WIOA.
Section 683.135 What reallotment procedures does the Secretary use?
    This proposed section implements secs. 127(c) and 132(c) of WIOA, 
and explains the Department's process for recapture and reallotment of 
formula funds awarded to the States under title I. The proposed rule 
requires the Secretary to make the determination about whether the 
State has obligated 80 percent of the funds during the second quarter 
of each PY, rather than the first quarter. The procedures are the same 
as those in the WIA regulation at 20 CFR 667.150, with a few 
exceptions. The Department proposes to make the determination during 
the second quarter because State financial reports for the end of the 
PY period are not locked for modification until the next quarter's 
reports are submitted, which is during the second quarter of the PY. 
The Department also uses the term ``each'' to make it clear that the 
Department performs the reallotment procedures every PY with respect to 
the prior PY. Further, the section clarifies that the amount subject to 
recapture is based on the unobligated balance of the prior ``program'' 
year, in accordance with secs. 127(c)(2) and 132(c)(2) of the statute. 
Finally, the proposed section clarifies the language that the recapture 
amount, if any, is determined separately for each funding stream.
    Proposed Sec.  683.135(c) defines the term ``obligation'' in 
accordance with the new OMB Administrative Requirements at 2 CFR 200.71 
(``[w]hen used in connection with a non-Federal entity's utilization of 
funds under a Federal award, obligations means orders placed for 
property and services, contracts, and subawards made, and similar 
transactions during a given period that require payment by the non-
Federal entity during the same or a future period.''). The Department 
is using this definition to be consistent in our application of 2 CFR 
part 200, which is applicable to all funds awarded as grants or 
cooperative agreements. The proposed rule includes the same additions 
to the definition of ``obligation'' that are in the WIA regulation at 
20 CFR 667.150(d)(1) and (2). The Department will continue to recognize 
the monies allocated to the local areas through the formula process 
under subtitle B of title I as obligated by the States for the purposes 
of this section, and the Department has clarified this by adding the 
words ``to the local area'' in proposed paragraph (c)(1). Because of 
this, local transfers between the adult and dislocated worker funding 
streams do not impact the Department's recapture calculation for 
reallotment among the States. Similarly, the fact that up to 10 percent 
of local funds may be reserved for administrative costs does not affect 
the calculation. Recapture and reallotment of funds among States will 
occur during PY 2015 based on obligations in PY 2014, because the 
procedures for realloting funds did not change from WIA to WIOA.
    New in WIOA, sec. 134(a)(2)(A)(ii) permits the Governor to use 
rapid response funds that remain unobligated after the first PY for 
which they were allotted to carry out statewide employment and training 
activities. The rapid response funds will be included in the 
calculation of unobligated funding to determine if a State is subject 
to reallotment. Sections 127(c) and 132(c) of WIOA do not except rapid 
response funds from recapture--a tool which provides a strong incentive 
for States to expeditiously expend funds.
    Excepting rapid response funds from the reallotment calculation 
would effectively remove the reallotment provision out of the statute. 
The Department generally is able to recapture and reallot only 
dislocated worker funds, because States immediately obligate 85 percent 
of their adult and youth program funds by allocating them to the local 
areas through the formula process. Because sec. 133(a)(2) of WIOA 
allows the Governor to reserve up to 25 percent of dislocated worker 
funds for rapid response activities, there may never be a situation 
where 80 percent of the remaining dislocated worker funds have not been 
obligated. Therefore, the Department includes rapid response funds in 
the calculation of a State's unobligated funding to determine if the 
State is subject to recapture and reallotment.
    However, even if a State is subject to reallotment, the Governor 
may use the unobligated rapid response funds described in WIOA sec. 
134(a)(2)(A)(ii) that remain available after reallotment to carry out 
statewide employment and training activities (in addition to rapid 
response activities). This preserves the additional flexibility 
provided to the Governors in WIOA sec. 134, by permitting Governors to 
use rapid response funds for statewide employment and training 
activities if not expended in the first year of availability. The 
Department welcomes comments on the proposed reallotment approach and 
potential impact on States, including the transfer flexibility.
Sec.  683.140 What reallocation procedures must the Governors use?
    This proposed section describes the procedures for reallocating 
youth, adult, and dislocated worker funds among local areas in the 
State, in accordance with secs. 128(c) and 133(c) of WIOA, and is 
unchanged from the WIA regulation at 20 CFR 667.160 except that 
proposed paragraph (a) requires the Governor to consult with the State 
Board before reallocating, as required by secs. 128(c)(1) and 133(c)(1) 
of WIOA. Proposed paragraph (b) clarifies that the amount to be 
recaptured, if any, must be separately determined for each funding 
stream, and the calculations of unobligated balances in each stream 
must be adjusted to account for any funds that are transferred between 
funding streams under proposed Sec.  683.130. The Department also notes 
that States and local areas are required to adhere to the definition of 
``obligations'' in 2 CFR 200.71.
Section 683.145 What merit review and risk assessment does the 
Department conduct for Federal financial assistance awards made under 
Workforce Innovation and Opportunity Act title I, subtitle D?
    This proposed section includes new requirements mandated by the 
Uniform Guidance. First, there is a requirement for the use of merit 
review as a means to ensure that discretionary or competitive grants 
and cooperative agreements are awarded through a competitive, merit-
based process. Second, this section incorporates the Uniform Guidance 
requirement, found at 2 CFR 200.205, that an agency must have ``a 
framework for evaluating the risks posed by applicants before they 
receive Federal Awards.'' The factors the Grant Officer will consider 
are listed in this section and drawn from 2 CFR 200.205. Additional 
guidance will be issued to further specify how the Grant Officer will 
evaluate these factors in determining whether the applicant

[[Page 20748]]

should be precluded from receipt of Federal financial assistance.
Section 683.150 What closeout requirements apply to grants funded with 
Workforce Innovation and Opportunity Act title I and Wagner-Peyser Act 
funds?
    This proposed section is new; there is not one like it in the WIA 
regulations. It addresses closeout, which is an important component to 
complete the grant life cycle. This section paraphrases the Uniform 
Administrative requirement sections on closeout and post-closeout 
adjustments (2 CFR 200.343-344). Specifically, when the period of 
performance ends, the Department will close out the Federal award after 
determining that all administrative actions and required work have been 
completed by the grant recipient. The grant recipient must submit all 
required reports and liquidate all obligations and/or accrued 
expenditures within 90 days of the end of the performance period. The 
Department will promptly reimburse the grant recipient for allowable 
reimbursable costs under the Federal award being closed out. The non-
Federal entity must promptly refund any balanced of unobligated cash 
that is owed to the Department. The Department will settle for any 
upward or downward adjustments to the Federal share of costs after 
closeout reports are received. The grant recipient must account for any 
real and personal property acquired with Federal funds or received from 
the Federal government. The Department must complete all closeout 
actions no later than 1 year after receiving and accepting all required 
final reports; however, closeout does not affect the Department's right 
to disallow costs and recover funds, or obligations of the grantee, 
including audit, property management, and records retention 
requirements. After award closeout, a relationship created under the 
award may be modified or ended. Grant recipients that award funds to 
subrecipients must institute a timely closeout process after the end of 
performance to ensure a timely closeout in accordance with this 
section.
3. Subpart B--Administrative Rules, Costs and Limitations
    Financial and Administrative Rules. These proposed regulations 
provide the rules applicable to WIOA grants in the areas of fiscal and 
administrative requirements, audit requirements, and allowable cost/
cost principles, and includes changes as the result of the Uniform 
Guidance at 2 CFR part 200 and any exceptions to 2 CFR part 200 that 
have been released by the Department under 2 CFR part 2900. To support 
the fiscal integrity of the grant process, proposed Sec.  683.220 
requires recipients and subprecipients of WIOA or Wagner-Peyser Act 
funds to have an internal control structure in place that provides 
safeguards to protect personally identifiable information and other 
sensitive information. This section is new to WIOA; there is no 
corresponding section in the WIA regulations. Another new section 
provides rules for using real property with Federal equity. Under this 
provision, Federal equity acquired in real property through grants to 
States awarded under title III of the SSA or the Wagner-Peyser Act is 
transferred to the States that used the grant to acquire the equity; 
the portion of the equity transferred must be used to carryout 
activities authorized under these programs and/or WIOA. The new section 
also provides instructions on using properties funded with Reed Act 
equity or the Job Training Partnership Act (JTPA).
    Costs and Limitations. This proposed regulation in Sec.  683.205 
delineates activities and functions associated with the cost of 
administration as well as cost limitations (discussed in proposed Sec.  
683.205). The intent continues to be that the function and intended 
purpose of an activity should be used to determine whether the costs 
are administrative or programmatic. There is a new section on salary 
and bonus limitations, which prescribes limits on salaries and bonuses 
in both WIOA and Wagner-Peyser programs. The proposed subpart also 
describes activities that are prohibited under WIOA, such as employment 
generating activities and activities that encourage business 
relocation.
    Responsibilities toward participants and employees. These proposed 
regulations provide rules on employee displacement, wage and labor 
standards, health and safety standards, and non-discrimination.
    Other rules. There is a new section addressing the allowability of 
earning under WIOA grants.
Section 683.200 What general fiscal and administrative rules apply to 
the use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser funds?
    This proposed section describes the application of the Uniform 
Guidance and the corresponding exceptions authorized by the Department 
at 2 CFR part 2900 for all grant recipients and subrecipients, 
including for-profit organizations and foreign entities. It references 
the cost principles, discusses when prior approval for certain 
expenditures is required, and highlights a number of specific 
requirements in the Uniform Guidance and the WIOA statute. For example, 
this section addresses the requirement that interest income be disposed 
of using the addition method and requires an entity to provide 
additional program services with those funds. This section also 
addresses times when income is earned and how it is recognized, 
reported, and applied to the program. It outlines the code of conduct 
and conflict of interest requirements that must be implemented under 2 
CFR part 200, as well as certain restrictions imposed on grant 
recipients and subrecipients when using WIOA and Wagner-Peyser funds, 
including the Buy-American provision in sec. 502 of WIOA. Likewise, 
this section requires adherence to the mandatory disclosure 
requirements found in 2 CFR part 200 on all violations of Federal 
criminal law involving fraud, bribery, or gratuity violations 
potentially affecting the Federal award. Additional disclosures on 
lobbying, drug-free workplace, debarment, and suspension continue to be 
required as well. Such disclosures must be timely and in writing. 
Failure to make the required disclosures can result in any of the 
remedies described in Sec.  200.338, remedies for noncompliance, 
including suspension or debarment.
Section 683.205 What administrative cost limitations apply to Workforce 
Innovation and Opportunity Act title I grants?
    This proposed section specifies the statutory administrative cost 
limitations on title I grant funds. States receiving formula WIOA funds 
are limited to spending no more than 5 percent of their annual 
allotment on administrative costs. Local areas are limited to spending 
no more than 10 percent of their annual allocation on administrative 
costs. Flexibility is provided to States and local areas in the statute 
by allowing administrative funds from the three formula funding streams 
awarded under subtitle B to be pooled and used together for 
administrative costs for any of the three programs, at the State and 
locals' discretion. For other WIOA title I and Wagner-Peyser funding, 
the administrative cost limits can be found in the grant agreement and 
are subject to the Uniform Guidance.

[[Page 20749]]

Section 683.210 What audit requirements apply to the use of Workforce 
Innovation and Opportunity Act title I and title III funds?
    This proposed section specifies the audit requirements for all 
grant recipients and subrecipients of WIOA funds that expend more than 
$750,000 in Federal funds during the fiscal year, including for-profit 
entities that are grant recipients or subrecipients of WIOA title I or 
Wagner-Peyser funds. As this proposed section notes, the audit 
requirements do not normally pass through to contractors, but will in 
some situations, such as where the payments are found to constitute a 
Federal award rather than a payment for goods and services. This 
section seeks to implement the requirements of the Uniform Guidance.
Section 683.215 What Workforce Innovation and Opportunity Act title I 
functions and activities constitute the costs of administration subject 
to the administrative cost limitation?
    The proposed section defines the functions and activities that 
constitute administration in accordance with sec. 3(1) of WIOA, and 
therefore are subject to the administrative cost limitations discussed 
in proposed Sec.  683.205. The Department notes that this proposed 
section applies to activities performed under all grants awarded under 
title I of WIOA. It does not apply to activities funded through 
contracts, such as operation of Job Corps centers. The proposed rule is 
the same as the WIA regulation at 20 CFR 667.220 with a few exceptions. 
For clarification, fiscal agent responsibilities are now included in 
the list of enumerated administrative costs. Regions are also included 
in the list of entities that can incur administrative costs, consistent 
with sec. 106 of WIOA. The Department made these enhancements because 
services can be integrated and streamlined through regions that may 
cross geographical boundaries or local economic areas. Additionally, 
the section refers to ``contractors'' instead of ``vendors'' to be 
consistent with the Uniform Guidance, which replaces vendor with 
contractor and defines ``contractor'' at 2 CFR 200.23.
    Proposed Sec.  683.215(c) describes some activities that can be 
administrative, programmatic, or both, depending on whether the 
underlying functions which they support are classified as programmatic 
or administrative. These include costs of activities such as 
information systems development and operation, travel, and continuous 
improvement. For example, the costs of developing an information 
system, which serves both administrative functions, and the tracking 
and monitoring of participants, would be allocated between program 
costs and administrative costs in proportion to the use of the system 
for each intended purpose.
    On the other hand, preparing program-level budgets and program 
plans are classified as program costs. The negotiation of MOUs and one-
stop infrastructure agreements, and certifications of one-stop centers 
are also program costs, because they build or support the one-stop 
delivery system and services to participants.
    The Department welcomes comments regarding whether it is more 
advantageous to issue the proposed list of administrative costs in 
Sec.  683.215(b) as a regulation, or to provide a general description 
of administrative costs similar to the definition in sec. 3(1) of WIOA 
and provide a rationale for why such an approach is advantageous. The 
Department also seeks comment on whether this list will need to be 
flexible, and subject to review and change periodically, or whether it 
is anticipated to be stable. Additionally, the Department seeks comment 
as to whether indirect costs should be included as programmatic or 
administrative.
    Finally, proposed Sec.  683.215(d) requires entities to make 
efforts to streamline administrative services and reduce administrative 
costs by minimizing duplication and effectively using information 
technology to improve services. The Department expects that 
streamlining the administration of the program will minimize 
duplication of multiple systems at different levels of grant 
administration so that more funds will be available for program 
activities.
Section 683.220 What are the internal control requirements for 
recipients and subrecipients of Workforce Innovation and Opportunity 
Act title I and Wagner-Peyser Act funds?
    This proposed new section describes the internal controls that 
recipients and subrecipients must install and have in place when 
expending WIOA and Wagner-Peyser Act funds, and is based on 2 CFR 
200.303. The controls include having a structure and policies in place 
to protect personally identifiable and sensitive information, including 
information that the Department considers to be sensitive, and 
providing reasonable assurances that the recipient or subrecipient is 
managing the award in compliance with Federal law and the terms of the 
award, complying with Federal law and the conditions of the award, 
evaluating and monitoring the recipient's or subrecipient's compliance 
with Federal law and award terms, and taking prompt action when 
noncompliance is identified. The internal controls must meet the 
Committee of Sponsoring Organizations of the Treadway Commission (COSO) 
framework. The framework established has been used in the private 
sector for numerous years and provides standards to achieve reasonable 
assurance in the achievement of the following: Effectiveness and 
efficiency of operations; reliability of financial reporting; 
compliance with applicable laws and regulations; and safeguarding of 
assets. Complying with the internal control requirements will increase 
accountability and transparency in the use of WIOA and Wagner-Peyser 
Act funds. Through past monitoring and oversight, the Department 
discovered that some grantees did not have the tools or access to 
resources to build a strong internal control structure. The Department 
will work with States and discretionary grantees to provide tools and 
assistance to achieve better results through its internal control 
structure. Direct grant recipients must assist their subrecipients in 
achieving an internal control structure framework consistent with 2 CFR 
part 200 and COSO.
Section 683.225 What requirements relate to the enforcement of the 
Military Selective Service Act?
    This proposed section specifies the requirements of the Military 
Selective Service Act for programs and activities authorized under 
title I of WIOA and found in sec. 189(h) of WIOA. This proposed section 
is substantively the same as the WIA regulation at 20 CFR 667.250.
Section 683.230 Are there special rules that apply to veterans when 
income is a factor in eligibility determinations?
    This proposed section addresses the laws governing the 
determination of eligibility for veterans and their spouses for WIOA 
funded services with income qualification requirements. The parameters 
for the exclusion of certain income from the eligibility determination 
process are outlined in this section. This section also states that the 
same method of excluding certain income of veterans must also be used 
when a local area imposes a priority of service threshold when funding 
for program services is limited.

[[Page 20750]]

Section 683.235 May Workforce Innovation and Opportunity Act title I 
funds be spent for construction?
    This proposed section is different from the WIA regulations at 20 
CFR 667.260. It is based on the requirements in the Uniform Guidance at 
2 CFR 200.439(b)(3). The proposed text states that WIOA title I funds 
must not be spent on construction, purchase of facilities or buildings, 
or other capital expenditures for improvements to land or buildings 
except with prior approval of the Secretary. Under the statute, WIOA 
title I funds can be used for construction only in limited situations, 
including meeting obligations to provide physical and programmatic 
accessibility and reasonable accommodations, certain repairs, 
renovations, alterations, and capital improvements of property, and for 
disaster relief projects under WIOA sec. 170(d), YouthBuild programs 
under WIOA sec. 171(c)(2)(A)(i), and for other projects that the 
Secretary determines necessary to carry out WIOA, as described by under 
sec. 189(c) of WIOA. The proposed regulatory text is meant to include 
all these situations, but not offer an exclusive list to ensure that 
the Secretary is able to use the funds for construction in any 
situation where it might be necessary.
Section 683.240 What are the instructions for using real property with 
Federal Equity?
    The proposed section provides rules on State Employee Security Act 
(SESA) properties, Reed Act-funded properties, and JTPA-funded 
properties. The proposed section provides guidance on these different 
properties because the use of these properties can play an integral 
part in WIOA's intent to align Federal investments to support jobs 
seekers and employers. Such efforts are not only achieved through 
strategic coordination among one-stop partners, but through physical 
presence at offices in the one-stop delivery system. Many buildings 
that have existing Federal equity currently house Wagner-Peyser 
programs, and it seems logical to use these facilities as American Job 
Centers if they are accessible and available and can support the 
requirements for colocation outlined in proposed Sec. Sec.  678.310 
through 678.320. Properties with Reed Act equity may also play a role 
in the American Job Center System. Lastly, the Department is aware that 
many local workforce development areas that were previously known as 
service delivery areas (SDAs) continue to be used as facilities for WIA 
programs, and they should continue to be used for the one-stop delivery 
service system under WIOA. The Department welcomes feedback on these 
provisions. Making use of these properties for the one-stop delivery 
system in accordance with statutory requirements will maximize the 
investments already made in these buildings and help to achieve the 
goals of WIOA.
    With respect to Federal equity in SESA properties, the proposed 
section restates the requirements of sec. 192 of WIOA, and explains 
that Federal equity acquired in real property through grants to States 
awarded under title III of the SSA or the Wagner-Peyser Act is 
transferred to the States that used the grant to acquire the equity. 
The portion of the real property attributable to the Federal equity 
transferred must be used to carry out activities authorized under WIOA, 
title III of the SSA, or the Wagner-Peyser Act. When the property is no 
longer needed to carry out those activities, the States are directed to 
request disposition instructions from the Grant Officer. Proceeds from 
the disposition must be used to carry out activities authorized under 
WIOA, title III of the SSA, or the Wagner-Peyser Act.
    The statutory limitation in sec. 192(b) of WIOA is provided as 
well. States are not permitted to use funds awarded under WIOA, title 
III of the Social Security, or the Wagner-Peyser Act to amortize the 
costs of the real property that is purchased by any State after 
February 15, 2007.
    The Department has also included the new requirement from sec. 
121(e)(3) of WIOA and sec. 3(d) of the Wagner-Peyser Act that 
properties occupied by Wagner-Peyser ESs be collocated with one-stop 
centers.
    With respect to Reed Act-funded properties, the proposed rule 
states that properties with Reed Act equity may be used for the one-
stop delivery system to the extent that the proportionate share of Reed 
Act equity is less than or equal to the proportionate share of 
occupancy by the Wagner-Peyser and UC programs. However, subject to 
conditions specified in sec. 903(c)(2) of the SSA and any 
appropriations limitations, a State is permitted, at its discretion, to 
use Reed Act funds for ``the administration of its UC law and public 
employment offices.'' When the property is no longer needed for these 
activities, the State must request disposition instructions from the 
Grant Officer prior to sale. Because Reed Act funded properties are 
different than other Federal equity properties, disposition 
instructions will include a requirement to return the funds 
attributable to the Reed Act equity to the State's account in the 
Unemployment Trust fund. See discussion in TEGL 3-07 ``Transfer of 
Federal Equity in State Real Property to the States.'' It is expected 
that additional guidance will be issued to update the guidance 
contained in TEGL 3-07, which will include instructions on the handling 
of such properties when considering colocation of Wagner-Peyser, as 
required in sec. 121(e)(3) of WIOA and sec. 3(d) of the Wagner-Peyser 
Act (as added by the amendments in title III of WIOA).
    For JTPA funded properties, the proposed rule states that real 
property that was purchased with JTPA funds and transferred to WIA, is 
now transferred to the WIOA title I programs and may be used for WIOA 
purposes. It is the Department's position that the Federal equity 
remains with the property while in use. Many properties that were 
purchased with JTPA funds continue to be locations that house and serve 
individuals and staff persons under WIA, and as such, those same 
buildings must continue to be used for the purposes of WIOA. If JTPA 
properties that were being used for WIA activities will not be used for 
WIOA programs, disposal of the property must occur. When the real 
property is no longer needed for the WIOA activities, the recipient 
must seek instructions from the Grant Officer prior to disposition or 
sale. A subrecipient would seek instructions from the State. Such 
instructions must be consistent with 2 CFR part 200. The Department 
welcomes any feedback from the workforce development system that 
promotes the use of these properties and streamlines the disposition 
process.
Section 683.245 Are employment generating activities, or similar 
activities, allowable under title I of the Workforce Innovation and 
Opportunity Act?
    This proposed section implements sec. 181(e) of WIOA, which 
restricts the use of WIOA funds for employment generating activities 
except where the activities are directly related to training for 
eligible individuals. The proposed section states that employer 
outreach and job development activities are considered to be directly 
related to training for eligible individuals, and it lists a number of 
examples of acceptable activities. The section also describes the 
conditions in which WIOA funds can be used for employer outreach.
Section 683.250 What other activities are prohibited under title I of 
the Workforce Innovation and Opportunity Act?
    This proposed section describes other activities that are expressly 
prohibited

[[Page 20751]]

in title I of WIOA, including foreign travel paid for by WIOA formula 
funds (sec. 181(e) of WIOA) payment of wages of incumbent workers 
participating in economic development activities (sec. 181(b) of WIOA), 
contracts with persons falsely labeling products as made in America 
(sec. 502(c) of WIOA), and others.
Section 683.255 What are the limitations related to religious 
activities in title I of the Workforce Innovation and Opportunity Act?
    This proposed section describes the limitations related to using 
WIOA funds to support religious activities, including the preclusion on 
employment of participants for the construction, operation, or 
maintenance of facilities used for sectarian purposes or worship, which 
is contained in sec. 188(a)(3) of WIOA. This section also references 29 
CFR part 2, subpart D, which describes other limitations in detail, 
along with certain exceptions. This proposed section contains similar 
requirements as the WIA regulations at 20 CFR 667.266.
Section 683.260 What prohibitions apply to the use of Workforce 
Innovation and Opportunity Act title I funds to encourage business 
relocation?
    This proposed section describes the prohibitions on the use of WIOA 
title I funds to encourage business relocation, including specific 
timeframes when entities can begin working with such businesses. This 
section also describes the States' obligation to develop procedures to 
implement these rules. These provisions implement the requirements of 
sec 181(d) of WIOA. This proposed section contains the same 
requirements as the WIA regulations at 20 CFR 667.268.
Section 683.265 What procedures and sanctions apply to violations of 
this part?
    This proposed section lists the provisions that provide for 
sanctions resulting from the violation of Sec. Sec.  683.235-260.
Section 683.270 What safeguards are there to ensure that participants 
in Workforce Innovation and Opportunity Act employment and training 
activities do not displace other employees?
    This proposed section outlines conditions and safeguards to ensure 
that any WIOA title I participant does not displace an existing 
employee by participating in a WIOA title I program or activity. It 
also states that an employee can file a complaint alleging 
displacement. Section 181(b)(2) of WIOA did not change the WIA 
displacement requirements at sec. 181(b)(2) of WIA. Accordingly, this 
regulation is unchanged from the WIA regulation at 20 CFR 667. 270.
Section 683.275 What wage and labor standards apply to participants in 
activities under title I of the Workforce Innovation and Opportunity 
Act?
    This proposed section describes the wage and labor standards that 
apply to WIOA title I participants, including the requirements under 
the Federal Fair Labor Standards Act (FLSA) and State and local minimum 
wage laws. The regulation is unchanged from the WIA regulations at 20 
CFR 667.272, except that it includes two additional provisions from 
sec. 181 of WIOA. The first is that the reference to the FLSA minimum 
wage requirement does not apply to territorial jurisdictions in which 
the minimum wage requirement does not apply (WIOA sec. 181(a)(1)(B)), 
and the second is that WIOA title I funds must not be used to pay the 
wages of incumbent employees during their participation in economic 
development activities provided through a statewide workforce delivery 
system (WIOA sec. 181(b)(1)). This requirement is also found in 
proposed Sec.  683.250(a)(1), but it is included here as well to give a 
complete list of the wage standards that apply to WIOA participants.
Section 683.280 What health and safety standards apply to the working 
conditions of participants in activities under title I of the Workforce 
Innovation and Opportunity Act?
    The proposed section explains what health and safety standards and 
workers compensation laws apply to WIOA title I participants. The 
standards in WIOA are the same as those in WIA, so the regulation is 
unchanged from the WIA regulation at 20 CFR 667.274.
Section 683.285 What are a recipient's obligations to ensure 
nondiscrimination and equal opportunity, and what are a recipient's 
obligations with respect to religious activities?
    This proposed section describes the nondiscrimination, equal 
opportunity, and religious activities requirements that recipients, as 
defined in WIOA sec. 188 and at 29 CFR part 37, must adhere to when 
using WIOA title I funds. WIOA did not change these requirements, so 
the proposed section contains the same requirements as the WIA 
regulation at 20 CFR 667.275, with a few exceptions. Accordingly, 
paragraph (a)(1) of the proposed rule refers to ``Job Corps 
contractors,'' instead of ``vendors,'' to conform with 29 CFR part 37. 
Additionally, proposed Sec.  683.285(a)(4) implements sec. 188(a)(4) of 
WIOA, which prohibits discriminating against an individual because of 
that person's status as a WIOA title I participant. Proposed Sec.  
683.285(a)(5) also implements the requirement at sec. 188(a)(5) of WIOA 
that participation in WIOA title I programs and activities be available 
to citizens and nationals of the United States, lawfully admitted 
permanent resident aliens, refugees, asylees, and parolees, and other 
immigrants authorized by the Attorney General to work in the United 
States. Finally, the proposed section includes the Wagner- Peyser 
program as an example of a Department program that is covered by 29 CFR 
part 2, subpart D.
Section 683.290 Are there salary and bonus restrictions in place for 
the use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser Act funds?
    This proposed section implements the requirements of sec. 194(15) 
of WIOA related to salary and bonus restrictions that apply to 
recipients or subrecipients. Although the statute applies the 
restrictions to WIOA title I funding, the Department expanded 
application to Wagner-Peyser Act recipients and subrecipients. The 
appropriations acts for the last 9 years (Pub. L. 109-234 June 15, 
2006) have applied the limitation to all ETA-funded programs; thus, 
interpreting the provision as applying to Wagner-Peyser funded 
activities is appropriate. Additionally, it is the Department's policy 
to ensure that funding is directed to substantive workforce employment 
and training activities to the greatest extent possible, rather than to 
administrative costs.
    The proposed section restates the WIOA statutory provisions. 
Specifically, it prohibits recipients and subrecipients from paying the 
salary and bonuses of an individual, either as direct or indirect 
costs, at a rate in excess of the annual rate of basic pay prescribed 
for level II of the Executive Schedule under 5 U.S.C. 5313. 
Additionally, the limitation does not apply to contractors providing 
goods and services as defined in OMB's Uniform Administrative 
requirements (which supersedes OMB Circular A-133 cited in the 
statute). The Department has used the term ``contractors'' instead of 
the statutory term ``vendor'' to be consistent with the term used in 
the Uniform Guidance. The proposed rule also explains the provision at 
WIOA sec. 194(15)(B) that a State may establish a lower limit for 
salaries and bonuses.
    Finally, the Department has provided direction for scenarios in 
which an employee may be funded by various

[[Page 20752]]

programs or work for multiple offices. If funds awarded under title I 
of WIOA or the Wagner-Peyser Act pay only a portion of the employee's 
salary or bonus, the WIOA title I or Wagner-Peyer Act funds may only be 
charged for the share of the employee's salary or bonus attributable to 
the work performed on the WIOA title I or Wagner-Peyser Act grant. That 
portion cannot exceed the proportional Executive level II rate. This 
restriction applies to the sum of salary and bonus payments made to an 
individual whether they are charged as direct costs or indirect costs 
under title I of WIOA and Wagner-Peyer. When an individual is working 
for the same recipient or subrecipient in multiple offices that are 
funded by title I of WIOA or the Wagner-Peyser Act, the recipient or 
subrecipient must ensure that the sum of the individual's salary and 
bonus payments does not exceed the prescribed limitation. These 
clarifications will help to ensure that WIOA and Wagner-Peyser Act 
funds are not overcharged for salary and bonus payments and that there 
are no ``loopholes'' in applying the limitation.
Section 683.295 Is earning of profit allowed under the Workforce 
Innovation and Opportunity Act?
    This proposed section addresses earning profit under WIOA. As the 
network of training services and one-stop operators has changed over 
the years, the Department is including the proposed section to address 
working with for-profit entities and the earning of profit by these 
entities. Proposed Sec.  683.295(a)(2) includes a requirement for 
grants and other Federal financial assistance awarded under secs. 
121(d) and 134(b) of WIOA, which states that where a Federal financial 
assistance award authorizes one-stop operators, service providers, or 
ETPs to earn profit, the pass through entity must follow 2 CFR 200.323 
to ensure that the entities' charges are reasonable and fair. The 
requirement in 2 CFR 200.323 that profit be negotiated as a separate 
element of the price will provide greater transparency as to the amount 
of profit earned by for-profit entities whether they are subrecipients 
or subcontractors. This paragraph (a)(2) describes an exception to the 
general rule that for-profit entities acting under a contract are 
allowed to earn profit. When the for-profit entity is a recipient of a 
grant or other Federal financial assistance, the entities will now be 
covered by the Uniform Guidance rather than the Federal Acquisition 
Regulations. The general rule, for when for-profit entities are working 
as contractors, is included in proposed Sec.  683.295(a)(3). The 
paragraph notes that the profit is allowable provided that the 
contractor abides by the requirements of 2 CFR 200.323. Proposed Sec.  
683.295(b) states that for programs authorized by other sections of 
WIOA, profit will be prohibited unless authorized by the terms and 
conditions of the Federal award.
4. Subpart C--Reporting Requirements
    This subpart provides guidance for reporting that will promote 
transparency and accountability at the grant recipient level. With 
today's demand for data in an open and transparent environment, the 
Federal government meets the challenges with initiatives such as the 
Digital Accountability and Transparency Act, requiring the Department 
to open access to data and use common data metrics. Performance and 
financial data, when made available, can lead to innovation. Not only 
does the Secretary seek to employ fresh and innovative approaches in 
serving job seekers and employers, the Department wants to utilize our 
resources and reporting portals to provide to the public visualizations 
rich in data and metrics to assist in better understanding of the 
employment environment. It is the Department's intent to use data 
collected from the financial, performance, and annual reports to 
empower our workforce system while providing transparency and 
accountability to our stakeholders. This subpart seeks to promote the 
government's initiative to manage information as an asset to increase 
operational efficiencies, reduce costs, improve services, support 
mission needs, safeguard personal information, and increase public 
access. One way to promote this initiative is through the collection 
and transmission of data, using machine readable formats whenever 
possible. To safeguard personally identifiable information, recipients 
and subrecipients must limit the collection and transmission of such 
data and use encrypted transmission software. To increase operational 
efficiencies and reduce costs, the Department and its grantees work 
together to find solutions that allow for the streamlining of reporting 
and the reduction of duplication of systems and efforts. The 
Department's existing financial expenditure form (ETA-9130) will be 
modified to reflect new reporting requirements. The Secretary will 
issue additional guidance on this topic.
683.300 What are the reporting requirements for programs funded under 
the Workforce Innovation and Opportunity Act?
    To continue with efforts for accountability and transparency as 
well as to provide data to our stakeholders, the Department requires 
its recipients to submit financial and performance reports, as well as 
an annual performance report. The data contained in these reports must 
be generated and processed in formats that are compatible with other 
commonly used data systems and be in machine readable formats. This 
proposed section specifies the reporting requirements for grant 
recipients and the deadlines for such reports. This section also sets 
forth recipients' responsibility to collect data from subrecipients. 
Pargraphs (b), (d), and (e) separately describe the performance 
reporting requirements for the core programs under sec. 116 of WIOA and 
part 677 and other grant programs authorized under title I of WIOA.
5. Subpart D--Oversight and Resolution of Findings
    This proposed subpart addressees the oversight and resolution 
responsibilities of the Department and grant recipients of WIOA funds. 
Oversight and monitoring is a valuable tool in effectively managing 
grants and this subpart emphasizes the need for careful application of 
these requirements by the Department and by recipients.
    Oversight. These regulations which provide for oversight and 
resolution responsibilities of the Department and its grant recipients 
are an important part of the Department's overall strategy to improve 
grant administration and to promote the vision of WIOA. As in WIA, 
States will review their subrecipients and validate their compliance 
with the Uniform Guidance on an annual basis and certify compliance to 
the Secretary every 2 years. The States and grant recipients must also 
install a monitoring system that meets the requirements of the Uniform 
Guidance and includes the examination of such items as performance, 
program goals, non-discrimination, conflict of interest, and mandatory 
disclosures.
    Resolution. The resolution of findings that arise from audits, 
investigations, monitoring reviews, and the Grant Officer resolution 
process is specified in this proposed subpart. It also provides 
clarification on the effect of the Uniform Guidance on the resolution 
process at the subrecipient level. When action to resolve findings is 
inadequate, the Department will take additional action

[[Page 20753]]

against the State or other direct grant recipient to reach resolution. 
Such action will include the Grant Officer resolution process, 
including the initial and final determination process, as described in 
proposed Sec.  683.440.
Sec.  683.400 What are the Federal and State monitoring and oversight 
responsibilities?
    This proposed section identifies the requirements of the Department 
in performing oversight and monitoring of its grant recipients and of 
the Department's grant recipients' responsibility for subrecipients. 
Proposed Sec.  683.400(c) describes the requirements WIOA has placed on 
the States to create a monitoring system for their subrecipients. 
Proposed paragraph (d) also requires the retention of evidence related 
to monitoring functions and resolution actions. This section also 
covers the new requirements under the Uniform Guidance which requires 
an examination of recipient and subrecipient non-discrimination and 
conflict of interest policies, mandatory disclosures of all violations 
of Federal criminal law involving fraud, bribery, or gratuity 
violations potentially affecting the Federal award.
Section 683.410 What are the oversight roles and responsibilities of 
recipients and subrecipients of Federal financial assistance awarded 
under title I of the Workforce Innovation and Opportunity Act and 
Wagner-Peyser?
    This proposed section defines the roles and areas in which 
oversight must be conducted by the recipients and subrecipients, 
including ensuring compliance with relevant rules and developing a 
monitoring system. Proposed paragraph (b) of the section also discusses 
a number of requirements for the States' monitoring systems and the 
Governor's biannual certification. The Department has always placed 
significant emphasis on monitoring as a tool in providing effective 
grants managements and this emphasis is further supported by the 
inclusion of monitoring in the Uniform Guidance. Monitoring and 
oversight also helps in identifying technical assistance needs, areas 
for improvement, and best practices.
Section 683.420 What procedures apply to the resolution of findings 
arising from audits, investigations, monitoring, and oversight reviews?
    Proposed Sec.  683.420(a) describes the steps and procedures that 
must be taken by grant recipients to resolve findings at the 
subrecipient level. For formula funds, sec. 184(a) of WIOA requires 
States to use the procedures they have in place for other Federal grant 
programs or, in the absence of such procedures, write standards for 
this program. Paragraph (a)(2) states that non-formula grant recipients 
must have written monitoring and resolutions procedures that adhere to 
the Uniform Guidance governing monitoring of subrecipients. All 
recipients must ensure that the rules governing the use of WIOA funds 
are being followed, including adherence to cost categories and cost 
limitations. Proposed Sec.  683.420(b) also describes the processes the 
Department will use to resolve findings of its direct grant recipients, 
and proposed paragraph (c) describes the processes to resolve findings 
regarding the non-discrimination provisions in sec. 188 of WIOA.
Section 683.430 How does the Secretary resolve investigative and 
monitoring findings?
    This proposed section describes the actions the Secretary will take 
to resolve findings. This section also describes the process when the 
Grant Officer agrees that the recipient's actions are sufficient to 
resolve a finding and when they are not satisfactory. This proposed 
section implements the requirements of sec. 184(a)(7) of WIOA. Proposed 
Sec.  683.430(b) states that audits from 2 CFR part 200 will be 
resolved through the Grant Officer resolution process described in 
proposed Sec.  683.440.
Section 683.440 What is the Grant Officer resolution process?
    This proposed section describes the Grant Officer's resolution 
process when dissatisfied with the actions taken by the grant recipient 
to resolve findings. This process involves the issuance of an Initial 
Determination followed by a period for informal resolution which allows 
the recipient to work with the Department to provide the necessary 
documentation or take certain action to reach a resolution. At the end 
of that period, the Grant Officer issues a Final Determination with 
findings listing any unresolved issues, establishing any debts, and 
listing required corrective actions, as well as offering the 
opportunity for a hearing. This process is unchanged from the process 
under WIA.
6. Subpart E--Pay-for-Performance Contract Strategies
Introduction
    WIOA's Pay-for-Performance provisions were designed to provide 
flexibility at the local level in an effort to infuse the system with 
more innovation, improve results for participants, and reward providers 
who deliver outstanding results. This regulatory proposal builds on the 
Department's experience with innovations and evidence-based work funded 
under the Workforce Innovation Fund and other Federally authorized 
activities. Moreover, the statute authorizes States to use non-Federal 
funds to establish incentives for Local Boards to implement WIOA Pay-
for-Performance contract strategies. We encourage States to adopt 
evidence-based approaches and innovate in the way they deliver services 
to participants in order to improve outcomes, and recognize that WIOA 
Pay-for-Performance contracting strategies, while still experimental, 
are one promising method to do so.
    A performance-based contract is a contracting strategy that 
establishes specific benchmarks that must be achieved in order for the 
contractor to receive payment. The WIOA Pay-for-Performance contracts 
are a specific form of contracting that, as authorized by WIOA, have 
six distinct characteristics: (1) They must provide adult training 
services described in sec. 134(c)(3) of WIOA or youth activities 
described in sec. 129(c)(2) of WIOA; (2) they must specify a fixed 
amount that will be paid to the service provider based on the 
achievement of specified levels of performance on the performance 
outcomes in sec. 116(b)(2)(A) of WIOA within a defined timetable; (3) 
the performance outcomes achieved must be independently validated using 
high-quality, reliable, and verified data; (4) outcomes must be 
reported in accordance with sec. 116(d)(2)(K) of WIOA; (5) pursuant to 
sec. 3(47)(A) of WIOA, bonuses may be built into WIOA Pay-for-
Performance contracts so long as such bonuses are used to expand the 
contractor's capacity to provide effective training; and (6) there may 
be an extended period of availability to expend funds under Pay-for-
Performance contract strategies. Additionally, the funds obligated for 
WIOA Pay-for-Performance contract strategies are limited to 10 percent 
of the total of the local adult and dislocated worker allotments 
provided under sec. 133(b) of WIOA, and 10 percent of the local youth 
allotment provided under sec. 128(b) of WIOA.
    The WIOA Pay-for-Performance contract strategy is one of several 
innovative strategies WIOA adopts to place a higher emphasis on 
performance outcomes and provider accountability, drive better results, 
and incorporate rigorous evaluation and evidence-based practice into 
the delivery of workforce

[[Page 20754]]

services. The Department intends to support this contracting approach 
by incorporating WIOA Pay-for-Performance into its WIOA performance 
reporting requirements for States in which local areas are adopting 
such a contracting approach.
    The WIOA Pay-for-Performance contract strategy can benefit local 
areas, job seekers, and business customers when used to support 
interventions that have a high probability of success based on prior 
evidence; have measurable outcomes supported with authoritative data 
and strong evaluation methodologies; and are overseen by experienced 
managers that have flexibility to adjust their approach.
    Given the heavy emphasis that WIOA Pay-For-Performance authorities 
place on outcome-based payment and independent validation, the quality 
of local area data and data systems should be of high enough quality to 
be able to (1) reliably and validly establish appropriate performance 
benchmarks for the target population, and (2) support independent 
validation of actual performance outcomes.
    In particular, in order for these contracting mechanisms to work 
effectively and efficiently, they must incorporate measures to prevent 
or account for potential ``creaming'' by service providers, and strong 
data systems are essential to this function. The use of outcome data 
from comparison groups--substantially similar populations who are not 
receiving services through the provider--is one potential method to 
minimize creaming. Another potential method adopted by WIOA to address 
creaming is the use of a statistical adjustment model for (1) the 
establishment of performance targets, and (2) the adjustment of actual 
performance based on economic conditions and the characteristics of the 
participants. In either case, the use of valid and reliable baseline 
data will help to inform appropriate performance targets and that 
strong data systems are necessary to support this approach.
    Additionally, it is important to engage in a feasibility analysis 
before engaging in a WIOA Pay-for-Performance contract, and that these 
analysis should be built into a WIOA Pay-for-Performance contract 
strategy. Such a feasibility analysis could include items like 
assessing the availability and quality of necessary data, including the 
source and cost of such data; determining the target population to be 
served; determining the availability of competent providers; whether 
any other additional professional services are required to support the 
execution of the contract; and reviewing other operational factors that 
would affect the feasibility of the contract.
    The Department is soliciting comments on the appropriate strategies 
to implement different varieties of Pay for Performance contracts, 
including issues involving what components should be included in a Pay-
for-Performance contracting strategy; what factors should be considered 
in a feasibility analysis; which entities should be eligible to enter 
into these contracts; how different varieties of contracts should be 
structured; how to best establish baseline performance information for 
target populations served; how best to prevent or account for creaming; 
the best methods to account for the relative and absolute risk to 
government, the contractor, and other stakeholders when setting payment 
terms; how best to balance the total cost to government against bonus 
and incentive payments included in the contract and potential outcome 
improvements for participants; how comprehensive services can be 
provided in a Pay-for-Performance contract context; and how to 
facilitate the participation of small service providers.
    Because of the requirements contained in statute, the Department is 
considering how best to incorporate reporting into performance and 
fiscal information collection requests, which will be included in the 
performance and fiscal PRA packages, or whether a separate information 
collection is needed. We welcome comments regarding the burden of 
additional reporting requirements, such as specifics about local areas 
utilizing pay-for-performance contract strategies; the service 
providers, the amount of contracts, duration, and monitoring and 
evaluation findings. The Department expects to put performance and 
implementation requirements in place in the future.
Section 683.500 What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract strategy?
    This proposed section describes the components of a WIOA Pay-for-
Performance contract strategy and describes WIOA Pay-for-Performance 
contract as a specific type of performance-based contract. It draws a 
distinction between the WIOA Pay-for-Performance contract itself and 
the broader goals and strategies surrounding it, which are the 
contracting strategy.
    Local area WIOA Pay-for-Performance contract strategies must 
include: (1) Identification of the problem space and target populations 
for which a local area will pursue a WIOA Pay-for-Performance contract; 
(2) the outcomes the local area would hope to achieve through a Pay-
for-Performance contract relative to baseline performance; (3) the 
acceptable cost associated with implementing such a strategy; (4) a 
feasibility study to determine whether the service delivery strategy to 
be funded is suitable for a WIOA Pay-for-Performance contracting 
strategy; (5) independent validation of the performance outcomes 
achieved under each contract within the strategy prior to payment 
occurring; and (6) a description of how the local area will reallocate 
funds to other activities under the contract strategy in the event a 
service provider does not achieve performance benchmarks under a WIOA 
Pay-for-Performance contract.
    The Department will issue additional guidance to both State and 
local areas on the development of the broader Pay-for-Performance 
contract strategy, including the scope and minimum requirements of the 
required feasibility study.
Section 683.510 What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract?
    This proposed section defines the requirements associated with a 
WIOA Pay-for-Performance contract, which would be awarded under a WIOA 
Pay-for-Performance contract strategy.
    Paragraph (a) identifies a WIOA Pay-for-Performance contract 
strategy as a type of performance-based contract. A performance-based 
contract is a contracting mechanism that establishes specific 
benchmarks that must be achieved in order for the contractor to receive 
payment. Performance-based contracting in general is defined and 
discussed in subpart 37.6 of the Federal Acquisition Regulation.
    Paragraph (b) articulates that WIOA Pay-for-Performance contracts 
can only be used when they are part of a broader WIOA Pay-for-
Performance Contract Strategy described in Sec.  683.500.
    To be consistent with past practice and with the Uniform Guidance 
at 2 CFR part 200, proposed paragraph (c) prohibits the use of cost-
plus percentage contracts in WIOA Pay-for-Performance contracts.
    The specifications in proposed paragraphs (d) through (f) regarding 
eligible service providers, structure of payments, target populations, 
and program elements are derived directly from the statute, at WIOA 
secs. 3(47), 129(c)(1)(D), 129(c)(2), 134(c)(3), and 134(d)(1)(iii). 
Proposed paragraph (e) specifically requires that the performance 
elements that must be included in any WIOA Pay-for-

[[Page 20755]]

Performance contract are the primary indicators of performance 
described in sec. 116(b)(2)(A) of WIOA and further defined in proposed 
Sec.  677.155. These include:
    i. The percentage of program participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    ii. the percentage of program participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    iii. the median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    iv. the percentage of program participants who obtain a recognized 
post-secondary credential, or a secondary school diploma or its 
recognized equivalent (subject to sec. 116(b)(iii) of WIOA), during 
participation in or within 1 year after exit from the program;
    v. the percentage of program participants who, during a program 
year, are in an education or training program that leads to a 
recognized post-secondary credential or employment and who are 
achieving measurable skill gains toward such a credential or 
employment; and
    vi. the indicators of effectiveness in serving employers 
established pursuant to sec. 116(b)(iv) of WIOA.
    Proposed paragraph (h) states that under WIOA Pay-for-Performance 
contracts, bonus payments and/or incentive payments are authorized to 
be paid to the service providers who enter into the WIOA Pay-for-
Performance contracts. Such bonus payments must be used to expand the 
contractor's capacity to provide effective training. These payments are 
authorized by sec. 3(47)(A) of WIOA. Incentive payments must be 
consistent with incentive payments for performance-based contracting as 
described in the Federal Acquisition Regulation. WIOA Pay-For-
Performance contracts may also utilize positive and negative incentives 
to other forms of performance-based contracts. To be consistent with 
performance-based contracting and in alignment with WIOA Pay-for-
Performance contract characteristics, such as recognizing high 
performers and providing boards with flexibility to make adjustments, 
incentive payments should be based on the total and relative amount of 
risk incurred by the service provider or contractor versus that 
incurred by the local area or other stakeholders.
    Because the Department is responsible for reporting on local 
outcomes annually to Congress, as well as providing recommendations for 
improvements in and adjustments to WIOA Pay-for-Performance contract 
strategies, proposed paragraph (i) requires specific reporting by the 
local areas to the State regarding the performance outcomes achieved by 
the service providers that enter into WIOA Pay-for-Performance 
contracts. Additionally, proposed paragraph (j) requires independent 
validation of a contractor's achievement of performance benchmarks 
under a WIOA Pay-for-Performance contract, as required by sec. 3(47)(B) 
of WIOA, and requires that this validation be based on high-quality, 
reliable, and verified data. The Secretary will issue guidance related 
to standards for independent evaluation as part of its Pay-for-
Performance guidance to States and local areas.
    Paragraph (k) indicates that the Secretary may issue additional 
guidance related to use of WIOA Pay-for-Performance contracts.
    Under WIA, many Workforce Development Boards utilized elements of 
performance-based contracts with training providers. These contracts 
incorporated performance outcomes that contractors were required to 
meet to obtain payment. However, these contracts did not contain 
required elements of a WIOA Pay-for-Performance contract articulated in 
this section. The Department encourages local areas to refocus these 
traditional performance-based contracts to place an emphasis on the 
contractor achieving outcomes like participants obtaining and retaining 
good jobs, rather than outputs like the number of people served. Also, 
the provision for the inclusion of bonus payments is limited to WIOA 
Pay-For-Performance contracts. Contracts that are not executed under 
the WIOA Pay-For-Performance contracting authority may continue to 
include performance incentives, either positive or negative or both, in 
compliance with the Federal Acquisition Regulation. Workforce 
Development Boards may continue to use performance-based contracts that 
are not WIOA Pay-for-Performance contracts. The 10 percent limitation 
provisions in secs. 129(c)(1)(D) and 134(d)(1)(A)(iii) of WIOA only 
apply to WIOA Pay-for-Performance contract strategies, including WIOA 
Pay-for-Performance contracts.
Section 683.520 What funds can be used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies?
    This proposed section restates the WIOA requirements that funds 
allocated under secs. 133(b)(2) and (3) of WIOA can be used for WIOA 
Pay-for-Performance contract strategies providing adults and dislocated 
worker training, and funds allocated under sec. 128(b) of WIOA can be 
used for WIOA Pay-for-Performance contract strategies providing youth 
activities. No more than 10 percent of the total local adult and 
dislocated worker allotments can be expended on the implementation of 
WIOA Pay-for-Performance contract strategies for adult training 
services described in sec. 134(c)(3) of WIOA. No more than 10 percent 
of the local youth allotment can be expended on the implementation of 
WIOA Pay-for-Performance contract strategies for youth training 
services and other activities described in secs. 129(c)(1) and (c)(2) 
of WIOA. There is no limit on the use of funds for typical performance-
based contracts, as defined in the Federal Acquisition Regulation. The 
10 percent limits apply only to those performance-based contracts that 
are WIOA Pay-for-Performance contract strategies as defined above.
Section 683.530 How long are funds used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies available?
    Section 189(g)(2)(D) of WIOA specifies that funds used for WIOA 
Pay-for-Performance contract strategies are available until expended. 
This allows local areas to structure contracts that include time-
intensive service delivery strategies and/or that structure payments 
based on outcomes that may take longer to achieve, measure, and 
validate than the typical 2-year funding availability of local area 
funds. Funds that are obligated but not expended due to contractor not 
achieving the levels of performance specified in a WIOA Pay-for-
Performance contract may be reallocated for further activities related 
to WIOA Pay-for-Performance contract strategies only. This also allows 
the local area to realize one of the benefits of performance-based 
contracting strategies--the local area does not pay a financial penalty 
for contracted services that do not achieve the stated outcomes. This 
provision gives the local area the discretion to choose whether to use 
the funds for these strategies, and if the local area so chooses, the 
funds will remain available until expended. This will require new grant 
management practices for local areas that choose to carry out WIOA Pay-
for-Performance strategies. The Department will issue guidance to 
explain these new practices and we welcome comments with suggestions on 
how to maximize the use of these contract strategies and the expanded 
availability of the funds.

[[Page 20756]]

Section 683.540 What is the State's role in assisting local areas in 
using Workforce Innovation and Opportunity Act Pay-for-Performance 
contract strategies?
    This proposed section describes both allowable and required State 
activities related to WIOA Pay-for-Performance contract strategies. The 
section indicates that States may provide technical assistance to local 
areas, including assistance with structuring WIOA Pay-for-Performance 
contracting strategies, performance data collection, meeting 
performance data entry requirements, and identifying levels of 
performance. This technical assistance can help local areas move 
forward in using this contracting strategy. Additionally, the State may 
either conduct evaluations of such strategies and/or provide technical 
assistance to locals regarding the importance of evaluation of Pay-for-
Performance contract strategies. The State and local areas may conduct 
their own evaluations of the WIOA Pay-for-Performance contracts, or 
procure an independent evaluator. The Department welcomes comments 
regarding use of independent evaluators and whether the cost of such 
evaluations is feasible within the amount of funds available to local 
areas for pay-for-performance contracts. The Department also seeks 
comments on how the Department might facilitate local areas' ability to 
conduct evaluations. Further, sec. 116(h) of WIOA authorizes States to 
use non-Federal funds to incentivize use of WIOA Pay-for-Performance 
contract strategies for the delivery of training services or youth 
activities by Local Boards.
    This section also identifies required activities States must 
undertake if a local area implements at WIOA Pay-for-Performance 
contract strategy. Because of the unique reporting requirements in sec. 
116(d)(2)(K) for WIOA Pay-for-Performance contracts, the performance 
section of this proposed rule, as well as the forthcoming Information 
Collection Request package, will clearly articulate the State's 
responsibility to track and report data on the primary indicators of 
performance as well as the State and local evaluations of the design of 
the programs and performance of WIOA Pay-for-Performance contract 
strategies and, where possible, the level of satisfaction with the 
strategies among employers and participants benefitting from the 
strategies.
    The State must also monitor local areas' use of WIOA Pay-for-
Performance contracts to ensure compliance with the following: The 
required elements listed in Sec.  683.500, the contract specifications 
in Sec.  683.510, State procurement policies, the 10 percent 
limitations, and achievement of performance benchmarks.
7. Subpart F--Grievance Procedures, Complaints, and State Appeals 
Processes
    This subpart provides regulations governing the grievance, 
complaint, and appeals procedures that apply at the State and local 
level and to discretionary grantees under WIOA, as well as appeals to 
the Secretary. Providing clear rules for resolving complaints and 
filing appeals promotes transparency and fairness, which are 
fundamental requirements of the workforce investment system grant 
process. Included are rules governing the appeals of local area non-
designation, denial or termination of training provider eligibility, 
and appeals of formula program participants who are tested or 
sanctioned for the use of controlled substances. Appeals of the 
Governor's imposition of sanctions for substantial violations of fiscal 
or other substantive requirements or performance failures under WIOA 
title I are also addressed. Finally, this subpart explains the process 
of reporting information and complaints involving criminal fraud, 
waste, abuse, or other criminal activity under WIOA.
Section 683.600 What local area, State and direct recipient grievance 
procedures must be established?
    This proposed section requires local areas, States, outlying areas, 
and direct grant recipients of WIOA title I funds to establish and 
maintain a procedure for grievances and complaints, including appeals 
as appropriate, and describes what the procedure much include, as 
required by WIOA sec. 181(c)(1). While this section of WIOA does not 
require outlying areas or direct grant recipients to establish such 
procedures, the Department has included them in this section to ensure 
that all participants receiving services under title I of WIOA have the 
same opportunity to report and receive relief from the negative actions 
of the WIOA funded grantees.
    This proposed section also clarifies that allegations of violations 
of the non-discrimination provisions of WIOA are subject to the 
policies and procedures described in 29 CFR part 37, which is 
administered by the Department's Civil Rights Center, and that 
complaint and grievance procedures related to Job Corps are in part 686 
of this title. This section retains the same requirements found at 20 
CFR 667.600.
Section 683.610 What processes does the Secretary use to review 
grievances and complaints of title I recipients?
    This proposed section describes the situations in which the 
Department will review allegations, and the procedures that the 
Secretary will use, that arise through local, State, and other direct 
recipient grievance procedures in accordance with WIOA sec. 184(c)(2). 
This section retains the same requirements found at 20 CFR 667.610.
Section 683.620 How are complaints and reports of criminal fraud and 
abuse addressed under the Workforce Innovation and Opportunity Act?
    This proposed section provides the requirements for reporting 
information and complaints involving non-criminal complaints and 
criminal fraud, waste, abuse or other criminal activity through the 
Department's Incident Reporting System to the Department's Office of 
the Inspector General. This section retains the same requirements found 
at 20 CFR 667.630.
Section 683.630 What additional appeal processes or systems must a 
State have for the Workforce Innovation and Opportunity Act program?
    This proposed section describes the processes and systems that a 
State must establish to hear appeals of: Entities that are denied 
initial or subsequent designation as a local area; training service 
providers that are denied eligibility as providers of training 
services; and WIOA title I subtitle B participants who are subject to 
testing or sanctions for the use of controlled substances. The section 
restates the WIOA appeal requirements in secs. 106(b)(5) (local area 
non-designation), 122 (training provider eligibility denial or 
termination); 181(f) (participant testing and sanctioning for use of 
controlled substances).
Section 683.640 What procedures apply to the appeals of non-designation 
of local areas?
    This proposed section describes the procedures that apply when a 
State Board denies an appeal for initial or subsequent designation of a 
local area made by a unit of local government or grant recipient under 
Sec.  683.630(a). This section restates and implements the appeal 
requirements required by WIOA sec. 106(b)(5).

[[Page 20757]]

Section 683.650 What procedures apply to the appeals of the Governor's 
imposition of sanctions for substantial violations or performance 
failures by a local area?
    This proposed section describes the procedures that apply to 
appeals of the Governor's imposition of sanctions for substantial 
violations of fiscal or other substantive requirements of title I of 
WIOA or of performance failures by local areas.
8. Subpart G--Sanctions, Corrective Actions, and Waiver of Liability
    While technical assistance, oversight, and monitoring are tools to 
ensure compliance with program and funding requirements, sanctions and 
corrective action plans are necessary where those tools fail. This 
subpart addresses sanctions and corrective actions, waiver of 
liability, advance approval of contemplated corrective actions, as well 
as the offset and State deduction provision. Of particular note in this 
subpart are the procedures for allowing a waiver of liability or an 
offset from other funds owed to the recipient. The statutory provisions 
are largely unchanged from those under WIA, though the Uniform Guidance 
has resulted in some changes to this subpart.
Section 683.700 When can the Secretary impose sanctions and corrective 
actions on recipients and subrecipients of title I Workforce Innovation 
and Opportunity Act funds?
    This proposed section describes the procedures and circumstances 
under which the Department will impose sanctions or take corrective 
actions, as described in sec. 184(b) and (e), against States, local 
areas, and grant recipients and subrecipients. For actions other than 
those under WIOA sec. 188(a), the process outlined in Sec.  683.440 
will be used before corrective actions or sanctions are taken against 
direct recipients. This section also gives the Grant Officer the 
authority to take direct action against local areas or other 
subrecipients, which will also be done using the process in Sec.  
683.440. This section also clarifies that the procedures described at 
20 CFR part 677 will be used to impose a sanction or corrective action 
for a violation of sec. 116 of WIOA. This section generally implements 
sec. 184 of WIOA and retains the same requirements found at 20 CFR 
667.700. The Department seeks comments on appropriate sanctions and 
corrective actions in a variety of circumstances.
Section 683.710 Who is responsible for funds provided under title I and 
Wagner-Peyser?
    This proposed section identifies the recipient as the responsible 
party for title I and Wagner-Peyser funds. For local areas receiving 
funds, this section explains how to identify the responsible party. 
Where a planning region includes two separate units of local 
government, the CEO of each unit of local government would be the 
responsible party. The general rule of recipient responsibility arises 
from the Uniform Guidance, while the rules pertaining to local areas 
come from WIOA sec. 184.
Section 683.720 What actions are required to address the failure of a 
local area to comply with the applicable uniform administrative 
provisions?
    This proposed section requires the Governor to take corrective 
action and impose sanctions on a local area if it fails to comply with 
the requirements described in the section. This section also describes 
the local area's appeal rights and actions the Secretary may take if 
the Governor fails to monitor and certify local areas' compliance or 
promptly take corrective action to bring the local area into 
compliance. The requirements in this section are taken from WIOA sec. 
184.
Section 683.730 When can the Secretary waive the imposition of 
sanctions?
    This proposed section permits a recipient to request a waiver of 
liability, and describes the factors the Grant Officer will consider 
when determining whether to grant the request. This provision 
implements sec. 184(d) of WIOA and retains the same requirements found 
at 20 CFR 667.720.
Section 683.740 What is the procedure to handle a recipient of title I 
Workforce Innovation and Opportunity Act funds' request for advance 
approval of contemplated corrective actions?
    This proposed section describes the procedures which a recipient 
must use to request advance approval of corrective action from the 
Department. It describes the factors the Grant Officer will consider 
and when advance approval may be appropriate. This provision implements 
sec. 184(d) of WIOA and retains the same requirements found at 20 CFR 
667.730.
Section 683.750 What procedure must be used for administering the 
offset/deduction provisions of the Workforce Innovation and Opportunity 
Act?
    This proposed section outlines the steps that must be taken in 
order for the Department to consider and allow an offset or deduction 
of a debt, including the offset rules for direct recipients and the 
rule for a State making a deduction from a subrecipient's PY 
allocation. This section implements the requirements of WIOA sec. 
184(c)(2).
9. Subpart H--Administrative Adjudication and Judicial Review
    This subpart specifies those actions which may be appealed to the 
Department's Office of Administrative Law Judges (OALJ), and the rules 
of procedure and timing of decisions for OALJ hearings as well as the 
process for judicial review by a United States Circuit Court of 
Appeals. This subpart is similar to that currently in effect under WIA 
because the WIOA statute itself had only minor changes to the 
requirements in this subpart.
Section 683.800 What actions of the Department may be appealed to the 
Office of Administrative Law Judges?
    This proposed section outlines the actions that can be appealed 
through an Administrative Law Judge (ALJ) under WIOA sec. 186(a), 
including a determination to not award financial assistance or a 
corrective action or sanction against a recipient or subrecipient. This 
section describes the appeal deadlines and the contents that an 
applicant is required to include in its appeal request. Paragraph (e) 
states that these procedures also apply when parties fail to reach 
resolution through the process described in Sec.  683.840.
Sec.  683.810 What rules of procedure apply to hearings conducted under 
this subpart?
    This proposed section adopts the rules of procedure for hearings 
conducted before the OALJ found at 29 CFR part 18, with some 
clarifications. This section also describes the Secretary's subpoena 
authority under WIOA. Finally, this section sets forth the burdens of 
production and persuasion in hearings conducted under this subpart. Per 
paragraph (c), the grant officer has the initial burden of production, 
which is satisfied by the submission of an administrative file. After 
the grant officer submits the administrative file, the party seeking to 
overturn the Grant Officer's determination has the burden of 
persuasion. This section retains the same requirements found at 20 CFR 
667.810.

[[Page 20758]]

Section 683.820 What authority does the Administrative Law Judge have 
in ordering relief as an outcome of an administrative hearing?
    This section, which applies to all discretionary grants issued 
under subpart D of title I of WIOA, specifies the remedies that an ALJ 
may award. Paragraph (a) applies to cases other than grant selection 
cases and is unchanged from the WIA regulation.
    Paragraph (b) specifies the remedies for grant selection cases, and 
is largely drawn from the Senior Community Service Employment Program 
remedies provision found at 20 CFR 641.470. This section gives the 
Grant Officer discretion to ensure that project beneficiaries (i.e., an 
entity awarded financial assistance) will not be unduly negatively 
impacted by the implementation of remedies resulting from a grant 
selection appeal.
    Proposed paragraphs (b)(1) and (2) state that upon receipt of an 
ALJ finding the application review process must be corrected or that an 
appealing entity should have been awarded funding, the Grant Officer 
will be required to take certain steps to determine whether the funding 
must be awarded to that entity. In determining whether the funds will 
be awarded to the appealing entity, the Grant Officer must take into 
account whether such a move would be in the interest of project 
beneficiaries and whether it would cause undue disruption to the 
participants and the program. In the event the Grant Officer determines 
that the appealing entity will not receive the funds, entities without 
an approved Negotiated Indirect Cost Rate Agreement (NICRA) will 
receive reasonable application preparation costs (under 2 CFR 200.460, 
for entities with an approved NICRA, application preparation costs may 
be included in their indirect cost pool and therefore are recouped from 
their indirect costs to other Federal grant awards). In the event that 
the Grant Officer determines that the appealing entity will receive the 
funds, that entity will only receive funds that have not yet been 
obligated by the current grantee.
    Finally, the Grant Officer will provide notification to the current 
grantee within 10 days of its decision, and that the current grantee 
may appeal the Grant Officer's determination using the appeal 
procedures described in 20 CFR 683.800.
Section 683.830 When will the Administrative Law Judge issue a 
decision?
    This section describes the timeframe in which an ALJ must make a 
decision to avoid any unnecessary delays. It also describes the 
parties' appeal rights, as stated in WIOA sec. 186(b).
Section 683.840 Is there an alternative dispute resolution process that 
may be used in place of an Office of Administrative Law Judges hearing?
    This section describes the available alternative an entity may use 
to seek resolution other than a hearing process. The outcome of this 
process is considered the equivalent of the final decision of an ALJ. 
The purpose of this provision is to offer entities a less formal, less 
burdensome, and more interactive appeal process.
Section 683.850 Is there judicial review of a final order of the 
Secretary issued under the Workforce Innovation and Opportunity Act?
    This section outlines the steps a party to a final order must take 
to obtain judicial review in a United States Circuit Court of Appeals 
of any decision made by the Secretary under WIOA sec. 184 or 186, as 
well as the deadlines for seeking review. This provision summarizes the 
requirements of WIOA sec. 187.

H. Part 684--Indian and Native American Programs Under Title I of the 
Workforce Innovation and Opportunity Act

1. Introduction
    Because sec. 166 of WIOA retains many of the requirements of sec. 
166 of WIA, the Department has drawn on the WIA regulations, found at 
20 CFR part 668, in drafting the regulations for sec. 166 of WIOA. 
Consequently, many of the sections in this part retain the requirements 
found in their parallel sections of the WIA regulations. This preamble 
details the Department's reasons for changing any of the previous 
requirements under the WIA regulations on a paragraph by paragraph 
basis. However, some changes to the requirements under the WIA 
regulations affect so many paragraphs that they are noted in the 
introduction to the preamble instead of noting them every time that 
they occur.
    First, proposed part 684 seeks to streamline the competitive 
process for awarding the Indian and Native American (INA) program 
grants. Section 166 of WIOA is unusual in that it requires both that 
grants be awarded through a competitive process and that grantees 
submit a 4-year plan (WIOA secs. 166(c) and 166(e)). Under the WIA 
regulations, the competition was separate from the plan. These WIOA 
regulations propose to streamline the grant award process to ease the 
administrative redundancy inherent in the WIA regulations. The 
Department will no longer designate grantees or require a notice of 
intent. Moreover, the proposed WIOA regulations have incorporated the 
4-year plan into the competitive grant award process. The Department 
anticipates that these changes will help streamline the process for 
awarding grants. These proposed changes should result in less of an 
administrative burden on both applicants and the Department.
    Additionally, although WIA had a 2-year grant cycle for grantees 
under sec. 166, WIOA has established a 4-year grant cycle (WIOA secs. 
166(c) and 166(e)). Consequently, all references to the grant cycle or 
plan in the proposed WIOA regulations refer to a 4-year cycle or 4-year 
plan.
    Finally, to ensure that the terms used to discuss the populations 
and entities that will be served, as described in sec. 166(d) of WIOA, 
are consistent throughout the proposed regulation, the Department 
proposes to define the term ``INA'' to mean American Indian, Native 
American, Alaska Native, and Native Hawaiian in proposed Sec.  684.130. 
This term provides an efficient way to ensure inclusivity and 
consistency in this part.
2. Subpart A--Purposes and Policies
Section 684.100 What is the purpose of the programs established to 
serve Indians and Native Americans under the Workforce Innovation and 
Opportunity Act?
    Proposed Sec.  684.100 describes the purpose of WIOA for the INA 
programs authorized by WIOA sec. 166.
    Proposed Sec.  684.100(a) retains the same requirements found in 
the WIA regulations at 20 CFR 684.100(a) except that Sec.  
684.100(a)(2) includes entrepreneurial skills as part of the purpose of 
the program in order to implement and carry out the entrepreneurial 
skills requirement in sec. 166(a)(1)(B) of WIOA.
    Proposed Sec.  684.100(b) describes the principle means of 
accomplishing the purpose described in Sec.  684.100. Because the 
Department has determined that no substantial changes were necessary to 
implement WIOA, the proposed regulation retains the same requirements 
found in the WIA regulations at 20 CFR 668.100(b) with the exception 
that it references the principles of the Indian Self-Determination and 
Education Assistance Act (ISDEAA). This reference to the principles of 
the ISDEAA directly aligns with sec. 166(a)(2) of WIOA.

[[Page 20759]]

Section 684.110 How must Indian and Native American programs be 
administered?
    Proposed Sec.  684.110(a) describes how the Department will 
administer the INA program. Because no changes were necessary to this 
section to implement WIOA, this proposed section retains the same 
requirements as the WIA regulations at 20 CFR 668.120.
    Proposed Sec.  684.110(b) states that the Department will follow 
the Congressional declaration of policy set forth in the Indian Self-
Determination and Education Assistance Act (ISDEAA), at 25 U.S.C. 450a, 
as well as the Department of Labor's American Indian and Alaska Native 
policies in administering these programs. These policies include DOL's 
``American Indian and Alaska Native Policy,'' dated July 29, 1998 and 
the ``Tribal Consultation Policy'' published in the Federal Register on 
December 4, 2012 (77 FR 71833). This is consistent with WIOA because 
WIOA sec. 166(a)(2) incorporates the principles of the ISDEAA and the 
other two policies are important works of guidance on consultation and 
coordination with INA parties.
    Proposed Sec.  684.110(c) and (d) describe the trust 
responsibilities of the Federal government and the designation of the 
Division of Indian and Native American Programs (DINAP) within ETA. 
Because the Department has determined that no changes were necessary to 
these regulations to implement WIOA, these proposed regulations retain 
the same requirements at 20 CFR 668.120(c) and (d).
    Proposed Sec.  668.120(e) describes the establishment of 
administrative procedures of the INA programs. 20 CFR 668.120(e) 
required that the Department utilize staff with a particular competence 
in this field for administration of the program. Although the 
Department is still committed to the utilization of competent staff, 
the proposed regulation does not retain this requirement as this 
language was not included in WIOA. The rest of the proposed regulation 
retains the same requirements at 20 CFR 668.120(e) because the 
Department has determined that no changes were necessary to implement 
WIOA.
Section 684.120 What obligation does the Department have to consult 
with the Indian and Native American grantee community in developing 
rules, regulations, and standards of accountability for Indian and 
Native American programs?
    Proposed Sec.  684.120 describes the obligation the Department has 
in consulting with the INA grantee community in developing rules, 
regulations, and standards of accountability for INA programs. This 
proposed section retains the same requirements found in the WIA 
regulations at 20 CFR 668.130, except that it adds new language 
referencing the Department's tribal consultation policy, which was 
published in the Federal Register on December 4, 2012, and Executive 
Order (E.O.) 13175 of November 6, 2000, which requires Federal agencies 
to engage in regular and meaningful consultation and collaboration with 
tribal officials in the development of Federal policies that have 
tribal implications and are responsible for strengthening the 
government-to-government relationship between the United States and 
Indian tribes. Section 166(i)(2) of WIOA states that the Secretary must 
consult with Indian tribes, tribal organizations, Alaska Native 
entities, Indian-controlled organizations serving Indians, and Native 
Hawaiian organizations in establishing regulations to carry out WIOA 
sec. 166 and develop a funding distribution plan for the INA program. 
In addition, sec. 166(i)(4)(A) of WIOA states that the Secretary must 
establish a Native American Employment and Training Council to 
facilitate consultation and provide advice on the operation and 
administration of the WIOA INA programs, including the selection of the 
individual appointed as the head of DINAP. While it is not specified in 
WIOA, by referencing the tribal consultation policy in this proposed 
section, the Department proposes that the consultation requirements 
referenced in WIOA must be coordinated with the Department's tribal 
consultation policy published in the Federal Register on December 4, 
2012 and E.O. 13175 of November 6, 2000. However, the Department notes 
that although these consultation policies must be coordinated, they are 
also separate. The Native American Employment and Training Council 
represents all of the INA grantee community but it does not necessarily 
serve as the primary vehicle through which the Federal government 
fulfills its obligation to consult with tribes.
Section 684.130 What definitions apply to terms used in the regulations 
in this part?
    Proposed Sec.  684.130 provides definitions to terms used in 
proposed part 684 that have not been defined in secs. 3 or 166 of WIOA 
or Sec.  675.300 of these proposed regulations. Because the Department 
has determined that no changes were necessary to the definitions used 
in 20 CFR 668.150, we have retained those definitions as included in 
the WIA regulations without change. These include the definitions for 
the terms ``DINAP,'' ``Governing body,'' ``Grant Officer,'' and 
``Underemployed.'' The Department has not retained the term ``NEW'' 
because it is not used in this proposed subpart. However, to provide 
additional clarity in these proposed regulations, the Department has 
included definitions for nine additional terms.
    Alaska Native-Controlled Organization--This definition clarifies 
that an entity applying for WIOA sec. 166 funds as an Alaska Native-
Controlled Organization must have a governing board in which 51 percent 
of the members are Alaska Natives, to ensure that entities that receive 
WIOA sec. 166 funds as an Alaska Native-Controlled Organization are 
comprised of representatives from the communities they serve.
    Carry-In--The Department is providing a definition of carry-in to 
clarify our process at Sec.  684.254(d) for reallocating funds unspent 
at the end of a PY. This definition is consistent with current practice 
and the process for reallocating funds is explained in more detail in 
the preamble for Sec.  684.270(d).
    High-Poverty Area--A definition of ``high-poverty area'' has been 
included to reflect the inclusion of the phrase in WIOA. Section 
129(a)(2) of WIOA provides a special rule for the youth program that 
includes the term ``high-poverty area'' but does not define that term. 
This proposed part references sec. 129 of WIOA in implementing the 
youth INA program. Therefore the Department proposes to provide a 
definition for high-poverty area in these regulations. The Department 
has chosen to employ the American Community Survey 5-Year Data because 
it is the only source data that uniformly collects the income level of 
individuals across all geographic service areas in the United States.
    Incumbent Grantee--This term is used in several places in the 
regulations including the regulations that define which entities are 
eligible to apply for a WIOA sec. 166 grant. Therefore the Department 
is providing a definition to

[[Page 20760]]

make clear which entities are considered incumbent grantees as referred 
to in the regulations.
    INA--Throughout proposed part 684, the Department refers to 
American Indians, Native Americans, Alaska Natives, and Native 
Hawaiians. To ensure consistency and inclusiveness the Department 
decided to use a single term, INA, when referencing all four groups.
    Indian-Controlled Organization--This definition clarifies the 
qualifications for an organization to be an Indian-Controlled 
Organization and is intended to ensure that entities that receive WIOA 
sec. 166 funds as Indian-controlled entities are comprised of 
representatives from the communities they serve.
    Native Hawaiian-Controlled Organization--This definition clarifies 
that an entity applying for WIOA sec. 166 funds as a Native Hawaiian-
controlled organization must have a governing board in which 51 percent 
of the members are Native Hawaiians. The purpose is to ensure that 
entities that receive WIOA sec. 166 funds as a Native Hawaiian entity 
are comprised of representatives from the communities they serve.
    Total Funds Available--This term is used in the definition of 
carry-in. The Department is providing a definition to clarify what is 
meant by total funds available as it affects the amount of carry-in a 
grantee may have and whether such carry-in is considered excessive. 
Available funds do not include carry-in funds. This definition is 
consistent with current practice and the process for reallocating funds 
is explained in more detail in the preamble for Sec.  684.270(d).
3. Subpart B--Service Delivery Systems Applicable to Section 166 
Programs
Section 684.200 What are the requirements to apply for a Workforce 
Innovation and Opportunity Act grant?
    Proposed Sec.  684.200(a)(1) establishes the eligibility 
requirements to apply for a WIOA sec. 166 grant. Because the Department 
has determined that no changes were necessary to this section to 
implement WIOA, this proposed section retains the same requirements 
found at the WIA regulations at 20 CFR 668.200(a)(1), except that we 
have required that all members of a consortium must be one of the 
listed entities to insure the input, authority, and autonomy of the INA 
entities listed in sec. 166(c) of WIOA. To be eligible, entities must 
also meet the requirements of Sec.  684.200(c); Sec.  684.200(a) just 
provides further detail about the legal shape eligible entities might 
take. For example, the application for a tribe might be submitted by 
the tribal government. Additionally, a non-profit might be an Indian-
controlled organization.
    Proposed Sec.  684.200(a)(2) describes a $100,000 minimum funding 
award amount that is required in order to receive a WIOA sec. 166 
grant. There is an exception for INA grantees participating in the 
demonstration program under Public Law 102-477; under this exception, 
if all resources to be consolidated under Public Law 102-477 total 
$100,000, only $20,000 must be derived from sec. 166 funds. Under 
proposed Sec.  684.200(a)(2), there is no exception to the requirement 
that at least $20,000 of all resources to be consolidated under Public 
Law 102-477 must be derived from WIOA sec. 166 funds. Awards for less 
than $20,000 do not provide sufficient funds to effectively operate an 
employment and training grant. Therefore, under WIOA, all sec. 166 
funding awards must be equal to or greater than $20,000 in order to 
apply for a grant under Public Law 102-477 except for incumbent Public 
Law 102-477 grantees that are receiving WIA funding as of the date of 
implementation of WIOA. These grantees will be grandfathered into the 
program because the advantage of requiring these grantees to meet the 
$20,000 minimum does not outweigh the advantages of allowing these 
grantees to continue with programs that have already been approved.
    Proposed Sec.  668.200(b) describes the types of entities that may 
make up a consortium. The proposed section requires that each member of 
a consortium meets the requirements. To ensure that all INA grantees 
sufficiently represent the interests of the INA community, the 
Department has decided to require that every member of a consortium 
must meet the requirements at proposed Sec.  668.200(a).
    Proposed Sec.  684.200(b)(1) through (3) describe the requirements 
for entities to apply for WIOA sec. 166 funds as a consortium. Because 
the Department has determined that no changes were necessary to this 
section to implement WIOA, this proposed section retains the same 
requirements found at 20 CFR 668.200(b)(1) through (3).
    Proposed Sec.  684.200(c) describes the entities that are 
potentially eligible to receive WIOA sec. 166 funds. Because the 
Department has determined that no changes were necessary to this 
section to implement WIOA, this proposed section retains the same 
requirements found at 20 CFR 668.200(c).
    Proposed Sec.  684.200(d) explains that State-recognized tribal 
organizations will be considered to be ``Indian-controlled'' 
organizations for WIOA sec. 166 purposes, assuming they meet the 
definition of an Indian-controlled organization as defined at Sec.  
684.130. The proposed section also states that State-recognized tribes 
that do not meet this definition but are grantees under WIA will be 
grandfathered into WIOA as Indian-controlled organizations. State-
recognized tribal organizations that meet the definition of an Indian-
controlled organization can apply for a WIOA sec. 166 grant because 
they otherwise meet the eligibility requirements for an Indian-
controlled organization, which ensures that they are comprised of 
representatives of the community they serve. State-recognized tribes 
that are grantees under WIA may be grandfathered in because allowing 
grantees that have successfully provided services to continue providing 
those services is consistent with the objectives of WIOA sec. 166.
Section 684.210 What priority for awarding grants is given to eligible 
organizations?
    Proposed Sec.  684.210(a) states that Federally-recognized Indian 
tribes, Alaska Native entities, or a consortium of such entities will 
have the highest priority to receive grants for those geographic 
service areas in which the Indian Tribe, Alaska Native entity, or a 
consortium of such entities has legal jurisdiction, such as an Indian 
reservation, Oklahoma Tribal Service Area (OTSA) or Alaska Native 
Village Service Area (ANVSA). The Department recognizes that Federally-
recognized tribes are sovereign governments that often have reservation 
areas over which they have legal jurisdiction. Accordingly, consistent 
with current practice, it is the Department's position that when a 
tribe has legal jurisdiction over a geographic service area such as an 
Indian reservation or OTSA, the Department will award sec. 166 grants 
to serve such areas to that tribe if it meets the requirements for 
receiving a grant.
    Proposed Sec.  684.210(b) states that if the Department decides not 
to make an award to an Indian tribe or Alaska Native entity that has 
legal jurisdiction over a service area--for example if a Federally-
recognized tribe is not eligible to apply for a WIOA grant or does not 
have the ability to administer Federal funds--the Department will 
consult with that tribe or Alaska Native entity before selecting an 
entity to serve the tribe's legal jurisdictional area. As described in 
the preamble to Sec.  684.120,

[[Page 20761]]

consultation with tribes and Alaska Native entities about the service 
areas over which they have legal jurisdiction is integral to the 
principles of Indian self-determination. However, to ensure that the 
INA individuals residing in this service area receive services, Sec.  
684.210(b) does not require prior approval of the entity with legal 
jurisdiction.
    Proposed Sec.  684.210(c) clarifies that the priority described in 
paragraphs (a) and (b) does not apply to service areas outside the 
legal jurisdiction of an Indian tribe or Alaska Native entity. The 
Department does not believe that the same priority is warranted outside 
the legal jurisdiction of Indian tribes and Alaska Native entities.
Section 684.220 What is the process for applying for a Workforce 
Innovation and Opportunity Act grant?
    Proposed Sec.  684.220(a) describes when the competitive grant 
application process takes place. The process described aligns this 
proposed section with the requirements at secs. 166(c) and (e) of WIOA 
and with the streamlining of the application process, which is 
discussed in further detail in the introduction to this proposed part.
    Proposed Sec.  684.220(b) provides clarification on which 
applicants are required to submit a 4-year plan, as described at 
proposed Sec.  684.710. The Department has decided to exclude entities 
that have been granted approval to transfer their WIOA funds pursuant 
to Public Law 102-477 from this requirement because the intent of 
Public Law 102-477 is to allow Federally-recognized tribes and Alaska 
Native entities to combine formula-funded Federal grant funds, which 
are employment and training-related, into a single plan with a single 
budget and a single reporting system.
Section 684.230 What appeal rights are available to entities that are 
denied a grant award?
    Proposed Sec.  684.230 describes the appeal rights for entities 
that are denied a grant award in whole or in part. There is no appeal 
process specifically for sec. 166 grants; however, the Department 
proposes to follow the appeal process described at proposed Sec. Sec.  
683.800 and 683.840, which allow entities that are denied a grant award 
an opportunity to appeal the denial to the Office of the Administrative 
Law Judges. Because the Department has determined that no changes were 
necessary to this section to implement WIOA, this proposed section 
retains the same requirements found at 20 CFR 668.270.
Section 684.240 Are there any other ways in which an entity may be 
awarded a Workforce Innovation and Opportunity Act grant?
    Proposed Sec.  684.240 describes other ways in which an entity may 
be granted an award under this proposed subpart if areas would 
otherwise go unserved.
Section 684.250 Can an Indian and Native American grantee's grant award 
be terminated?
    Proposed Sec.  684.250(a) states that a grant award can be 
terminated for cause, or due to emergency circumstances under the 
Secretary's authority at sec. 184(e) of WIOA. This proposed section 
retains substantively the same requirements found in the WIA 
regulations at 20 CFR 668.290(a). The Department notes that if a grant 
is terminated under sec. 184(e) of WIOA, the grantee must be given 
prompt notice and opportunity for a hearing within 30 days after the 
termination.
    Proposed Sec.  684.250(b) describes the circumstances under which 
an award may be terminated for cause. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements found at 20 
CFR 668.290(b).
Section 684.260 Does the Department have to award a grant for every 
part of the country?
    Proposed Sec.  684.260 states that the Department is not required 
to provide grant funds to every part of the country. This proposed 
section retains similar requirements in the WIA regulations at 20 CFR 
668.294, with the exception that the Department clarified that funds 
not allocated to a service area will be distributed to existing INA 
grantees consistent with current practice.
Section 684.270 How are Workforce Innovation and Opportunity Act funds 
allocated to Indian and Native American program grantees?
    Proposed Sec.  684. 270(a) through (c) describe how funds will be 
allocated to INA grantees. Because the Department has determined that 
no substantial changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements found at 20 
CFR 668.296.
    Proposed Sec.  684. 270(d) states that the Department may 
reallocate funds under certain circumstances. This language clarifies 
that excess carry-in will result in the funding formula being adjusted 
in future years to reflect the excess. Additionally, there is no 
exception for carry-in amounts in excess of 20 percent because these 
funds must be fully expended.
    Proposed Sec.  684.270(e) describes the funding resources the 
Department may draw on for TAT purposes. The proposed paragraph 
clarifies that the 1 percent of funding reserved under this section is 
not the only source funding for providing TAT for the INA program 
grantees. This language is consistent with current practice and is 
intended to make clear that INA program grantees may also access 
resources available to other Department programs as needed.
4. Subpart C--Services to Customers
Section 684.300 Who is eligible to receive services under the Indian 
and Native American program?
    Proposed Sec.  684.300(a) describes who is eligible to receive 
services under an INA program. Because the Department has determined 
that no changes were necessary to this section to implement WIOA, this 
proposed section retains the same requirements found at 20 CFR 
668.300(a), with the exception that the language in Sec.  684.300(a)(2) 
references the definition of Alaska Native in sec. 166(b)(1) of WIOA.
    Proposed paragraph (a)(1) leaves the definition of ``Indian'' to 
the tribes and local American Indian organizations that receive grant 
funds to determine, since WIOA does not define who is eligible to 
receive services under sec. 166, and there are different opinions on 
who is considered an Indian when determining eligibility for employment 
and training services. For instance some grantees consider members of 
State-recognized tribes as eligible individuals while other grantees do 
not. Therefore, the Department has left the decision of defining who is 
an Indian to tribes and organizations at the local level. However, the 
Department requires that a grantee's definition must at least include 
anyone who is a member of a Federally-recognized tribe.
    Proposed Sec.  684.300(b) and (c) describe additional eligibility 
requirements for participants to receive services from the INA program. 
Because the Department has determined that no changes were necessary to 
these sections to implement WIOA, these proposed sections retain the 
same requirements in the WIA regulations found at 20 CFR 668.300(b).
Section 684.310 What are Indian and Native American program grantee 
allowable activities?
    Proposed Sec.  684.310(a) describes what types of opportunities INA 
program grantees must attempt to develop and provide. This section 
incorporates the

[[Page 20762]]

broad objectives referenced in sec. 194(1) of WIOA.
    Proposed Sec.  684.310(b) further defines the employment and 
training services that are allowable under sec. 166 of WIOA. Because 
the Department has determined that no changes were necessary to this 
section to implement WIOA, this proposed section retains the same 
requirements found at 20 CFR 668.340(a).
    Proposed Sec.  684.310(c) references a non-exhaustive list of 
career services listed in WIOA. This language reflects WIOA's unified 
approach to the provision of services.
    Proposed Sec.  684.310(d) defines follow-up services. The 
Department chose to define follow-up services as including counseling 
and supportive services for up to 12 months after the date of exit for 
consistency with current practice. Unlike the follow-up services 
available under sec. 134 of WIOA, the follow-up services available 
under Sec.  684.310 are available for up to 12 months because of the 
limited employment opportunities available to participants in the sec. 
166 program.
    Proposed Sec.  684.310(e) references the non-exhaustive list of 
training services available at WIOA sec. 134(c)(3). The Department has 
referenced sec. 134(c)(3) because this section includes good examples 
of services that are allowable activities for INA program grantees.
    Proposed Sec.  684.310(f) lists examples of allowable activities 
specifically designed for youth. The Department references the program 
requirements for the WIOA youth program because these activities serve 
as good examples of allowable activities for INA programs targeting INA 
youth.
    Proposed Sec.  684.310(g) provides examples of allowable activities 
for job development and employment outreach. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements found in the 
WIA regulations at 20 CFR 668.340(f).
    Proposed Sec.  684.310(h) describes whether services can be 
overlapping and/or sequential. Because the Department has determined 
that no changes were necessary to this section to implement WIOA, this 
proposed section retains the same requirements found at 20 CFR 
668.340(g).
    Proposed Sec.  684.310(i) states that services may be provided to a 
participant in any sequence based on the particular needs of the 
participant. This clarification is consistent with the description of 
career services in proposed Sec.  678.425(b), which states that 
services are provided to individuals based on individual needs, 
including the seamless delivery of multiple services to individual 
customers. There is no required sequence of services. Section 
134(c)(3)(A)(iii) of WIOA similarly clarifies that an individual is not 
required to receive career services prior to receiving training 
services.
Section 684.320 Are there any restrictions on allowable activities?
    Proposed Sec.  684.320(a) and (b) describe geographical 
restrictions on training activities and restrictions on OJT services. 
Because the Department has determined that no changes were necessary to 
these sections to implement WIOA, these proposed sections retain the 
same requirements found at 20 CFR 668.350(a) and (b).
    Proposed Sec.  684.320(c) prohibits OJT where an employer has 
exhibited a pattern of certain conduct. Because the Department has 
determined that no substantial changes were necessary to these section 
to implement WIOA, this proposed section retains the same requirements 
found at 20 CFR 668.350(c). However, to align Sec.  684.320(c) with the 
language found at sec. 194(4) of WIOA, the phrase ``including health 
benefits'' has been included in Sec.  684.320(c)(1), and Sec.  
684.320(c)(2) targets patterns of violation instead of single 
violations.
    Proposed Sec.  684.320(d) through (g) describe restrictions on the 
use of INA grant funds. Because the Department has determined that no 
changes were necessary to these sections to implement WIOA, these 
proposed sections retain the same requirements found at 20 CFR 
668.350(d) through (g), with citations and references updated to be 
consistent with WIOA.
Section 684.330 What is the role of Indian and Native American grantees 
in the one-stop system?
    Proposed Sec.  684.330(a) describes the required collaboration 
between INA grantees and the one-stop system. The Department recognizes 
that there are areas in the U.S. where the Native American population 
is so sparse that it is not practical for WIOA grantees to be actively 
involved in the local one-stop system. Accordingly, WIOA only requires 
grantees to be involved in those local workforce investment areas where 
an INA grantee conducts field operations or provides substantial 
services. In these areas, the INA grantee must execute an MOU with the 
Local Board or, at a minimum, be able to demonstrate that it has made a 
good faith effort to enter into such agreement. Regardless of how 
sparse the Native American community is in an area, and regardless of 
an executed MOU, it is expected that, at a minimum, both the INA 
grantee and the local one-stop operator are familiar with each other's 
services and that information is available at each other's location, 
and referrals, coordination, and co-enrollment are encouraged. INA 
grantees will be required to provide details of their relationship with 
the local one-stop operators as part of the 4-year plan.
    Proposed Sec.  684.330(b) describes the minimum provisions 
necessary in an MOU between the INA grantee and a local one-stop 
delivery system. Proposed paragraph (b) lists information required 
under WIOA sec. 121(c) and includes additional requirements that 
implement current policy.
    Proposed Sec.  684.330(c) describes when an INA grantee is required 
to describe its efforts to negotiate a MOU. This information is 
necessary for determining why the INA grantee has not been able to 
negotiate an MOU and for alerting the Department about what steps might 
be taken to facilitate the negotiation of an MOU.
    Proposed Sec.  684.330(d) describes the application of the one-stop 
infrastructure in the context of INA programs. Proposed paragraph (d) 
implements the statutory requirements found at WIOA sec. 
121(h)(2)(D)(iv).
Section 684.340 What policies govern payments to participants, 
including wages, training allowances or stipends, or direct payments 
for supportive services?
    Proposed Sec.  684.340(a) through (e) describe the policies that 
govern payments to participants. Because the Department has determined 
that no changes are necessary to these sections to implement WIOA, 
these proposed sections retain the same requirements found at 20 CFR 
668.370.
Section 684.350 What will the Department do to strengthen the capacity 
of Indnian and Native American grantees to deliver effective services?
    Proposed Sec.  684.350 describes what the Department will do to 
strengthen the capacity of INA program grantees to deliver effective 
services. This proposed section retains the same commitment to provide 
necessary technical assistance and training to INA program grantees as 
found in the WIA regulations at 20 CFR 668.380.

[[Page 20763]]

5. Subpart D--Supplemental Youth Services
Section 684.400 What is the purpose of the supplemental youth services 
program?
    Proposed Sec.  684.400 describes the purpose of the supplemental 
youth services program.
    Because the Department has determined that no substantial changes 
were necessary to this section to implement WIOA, this proposed section 
retains the same requirements found at 20 CFR 668.400.
Section 684.410 What entities are eligible to receive supplemental 
youth services funding?
    Proposed Sec.  684.410 describes the entities that are eligible to 
receive supplemental youth services funding. The amount of funding 
reserved for the supplemental program makes it impractical to fund all 
service areas in the United States. Therefore the Department proposes 
to limit funding awards to eligible entities that serve low-income 
youth residing on or near their respective reservations, OTSAs or 
ANVSAs or other legal jurisdictional areas, or to eligible 
organizations that are providing services on behalf of entities with 
legal jurisdiction.
Section 684.420 What are the planning requirements for receiving 
supplemental youth services funding?
    Proposed Sec.  684.420 describes the planning requirements for 
receiving supplemental youth services funding. Because youth funding is 
considered a supplement to the adult funding, the Department envisions 
that the strategy for youth will not be extensive. This proposed 
section also aligns the planning requirements for the youth 
supplemental services with the streamlined application process, which 
is described in more detail in the introduction to this part.
    Finally, the Department also recognizes that awareness of one's 
culture and history is important to having a healthy self-identity and 
self-esteem. Therefore, the Department supports youth activities that 
teach INA to incorporate culture and traditional values since it is not 
fully explored in the public school system and because it plays a role 
in transitioning INA youth to become successful adults.
Section 684.430 What individuals are eligible to receive supplemental 
youth services?
    Proposed Sec.  684.430(a)(1) through (3) provide the eligibility 
requirements for individuals to receive supplemental youth services. 
Individuals must be low-income, except that 5 percent of individuals 
enrolled in a grantee's youth program during a PY need not meet the 
definition of low-income. Individuals included under this 5 percent 
exception do not need to meet any requirements other than those listed 
under proposed Sec.  684.430(a)(1) and (2) because the Department 
recognizes that the funding amounts for the majority of INA program 
grantees are so small (and therefore the number of youth served are 
also so small) that the number of youth served under the 5 percent 
exception is numerically insignificant and that the effort and cost of 
collecting information on the additional barriers is not justified. 
Furthermore, the poverty level on or near Indian reservations (which 
are the areas to be served with youth funds) is so high that the vast 
majority of youth served under WIA met the low-income requirement and 
those that do not are only slightly over the poverty level.
    Additionally, the INA youth program differs significantly from the 
State youth formula program in that it does not distinguish between 
``in-school'' youth and ``out-of-school'' youth and there are no 
percentage requirements for ISY and OSY as required by the State youth 
formula program. The Department recognizes that given the small funding 
amount for the INA youth program, most INA grantees are primarily 
limited to operating summer employment programs for ISY. However, the 
Department encourages the few grantees that receive significant amounts 
of youth funding to provide year-round youth programs and incorporate 
educational and training components in their youth program.
    Proposed Sec.  684.430(b) provides additional information about the 
definition of ``low-income.'' This proposed section helps implement and 
carry out the definition of low-income provided in WIOA sec. 129(a)(2).
Section 684.440 How is funding for supplemental youth services 
determined?
    Proposed Sec.  684.440(a) specifies how funding will be allocated. 
Because the Department has determined that WIOA did not require any 
substantive changes to 20 CFR 668.440(a), we have retained the same 
essential requirements. Although this proposed section specifies that 
the Department will allocate youth funding based on the number of youth 
in poverty, the inclusion of the term ``in poverty'' merely implements 
current practices and does not change our requirements.
    Proposed Sec.  684.440(b) through (e) describe what data the 
Department will use in calculating the youth funding allocation, how 
the hold harmless factor described in Sec.  684.270(c) will apply, how 
the reallocation provisions apply, and how supplemental youth services 
funds not allotted may be used. Because the Department has determined 
that no substantial changes were necessary to these sections to 
implement WIOA, these proposed sections retains the same requirements 
found at 20 CFR 668.350(b) through (e).
Section 684.450 How will supplemental youth services be provided?
    Proposed Sec.  684.450(a) through (c) describe how supplemental 
youth services will be provided. Because the Department has determined 
that no substantial changes were necessary to these sections to 
implement WIOA, these proposed sections retain the same requirements 
found at 20 CFR 668.450(a) through (c).
Section 684.460 What performance measures are applicable to the 
supplemental youth services program?
    Proposed Sec.  684.460(a) describes the performance measures and 
standards applicable to the supplemental youth services program. These 
measures and standards of performance are the same as the primary 
indicators discussed in proposed Sec.  677.155. Though the indicators 
of performance are identified in various places throughout the WIOA 
proposed regulations, the indicators are the same and do not vary 
across the regulations. Section 166(e)(5) of WIOA specifies that 
performance indicators for the Native American program ``shall'' 
include the primary indicators of performance described in WIOA sec. 
116(b)(2)(A). Consequently, the Department has listed the youth 
performance indicators at WIOA sec. 116(b)(2)(A)(ii) to implement and 
carry out statutory requirements.
    The Department acknowledges that some of the performance indicators 
for youth programs are targeted to capture data related to participants 
who are either in their senior year of high school or are no longer a 
high school student (Sec.  684.460(a)(1) and (2)). Because of limited 
funding, many of the INA youth programs are summer employment programs 
serving younger high school students, these performance indicators 
might not accurately capture the success of such programs.
    Proposed Sec.  684.460(b) describes the Secretary's role in the 
creation of additional performance measures to the ones listed in Sec.  
684.460(a). Section

[[Page 20764]]

684.460 implements the statutory language in WIOA sec. 166(h)(2).
6. Subpart E--Services to Communities
Section 684.500 What services may Indian and Native American program 
grantees provide to or for employers?
    Proposed Sec.  684.500(a) and (b) describe other services that INA 
program grantees may provide to or for employers under sec. 166. 
Because the Department has determined that no changes were necessary to 
these sections to implement WIOA, these proposed sections retain the 
same requirements as 20 CFR 668.500.
Section 684.510 What services may Indian and Native American program 
grantees provide to the community at large?
    Proposed Sec.  684.510(a) and (b) describe services that INA 
program grantees may provide to INA communities. Because the Department 
has determined that no changes were necessary to these sections to 
implement WIOA, these proposed sections retain the same requirements at 
20 CFR 668.510(a) and (b).
Section 684.520 Must Indian and Native American program grantees give 
preference to Indian and Native American entities in the selection of 
contractors or service providers?
    Proposed Sec.  684.520 discusses the requirement to give preference 
to Indian/Native American entities in the selection of contractors or 
service providers. Because the Department has determined that no 
changes were necessary to this section to implement WIOA, this proposed 
section retains the same requirements at 20 CFR 668.520.
Section 684.530 What rules govern the issuance of contracts and/or 
subgrants?
    Proposed Sec.  684.530 describes the rules that govern the issuance 
of contracts and/or subgrants. In general, INA program grantees must 
follow the uniform administrative requirements, cost principles, and 
audit requirements for Federal awards at 2 CFR part 200 subpart E 
published in the Federal Register on December 26, 2013, except that 
these rules do not apply to OJT contract awards. This section 
essentially retains the same language as provided under WIA at 20 CFR 
668.530, except that the references to OMB Circulars A-102, A-110 have 
been replaced with references to 2 CFR part 200 subpart E.
7. Subpart F--Accountability for Services and Expenditures
Section 684.600 To whom is the Indian and Native American program 
grantee accountable for the provision of services and the expenditure 
of INA funds?
    Proposed Sec.  684.600(a) and (b) describe who INA program grantees 
are accountable to for the provision of services and the expenditure of 
INA funds. Because the Department has determined that no changes were 
necessary to these sections to implement WIOA, these proposed sections 
retain the same requirements as 20 CFR 668.600.
Section 684.610 How is this accountability documented and fulfilled?
    Proposed Sec.  684.610(a) and (b) require INA program grantees to 
establish internal policies and procedures to ensure accountability to 
its governing body and describe how accountability to the Department is 
accomplished. Because the Department has determined that no changes 
were necessary to these sections to implement WIOA, these proposed 
sections retain the same requirements at 20 CFR 668.610(a) and (b).
    Proposed Sec.  684.610(c) describes how accountability to the 
Department is documented and fulfilled. The Department proposes to 
require compliance with the reporting items listed in Sec.  684.610(c) 
because these are the best ways to ensure accountability and they 
comply with our current practices.
Section 684.620 What performance measures are in place for the Indian 
and Native American program?
    Proposed Sec.  684.620(a) describes the performance measures that 
are required under WIOA for the INA program. These measures of 
performance are the same as the primary indicators discussed in 
proposed Sec.  677.155. Though the indicators of performance are 
identified in various places throughout the WIOA proposed regulations, 
the indicators are the same and do not vary across the regulations. 
Section 166(e)(5) of WIOA specifies that performance indicators for the 
Native American program ``shall'' include the primary indicators of 
performance described in WIOA sec. 116(b)(2)(A). Proposed Sec.  
684.620(a) lists the applicable performance indicators described in 
WIOA sec. 116(b)(2)(A), thus implementing and carrying out the 
statutory requirements of sec. 166(e)(5) of WIOA.
    Proposed Sec.  684.620(b) describes the Secretary's role in the 
creation of additional performance measures to the ones listed in Sec.  
684.620(a). Section 684.620 implements the statutory language in WIOA 
sec. 166(h)(2).
Section 684.630 What are the requirements for preventing fraud and 
abuse?
    Proposed Sec.  684.630(a) requires INA program grantees to 
establish fiscal control and fund accounting procedures. This section 
implements the language in WIOA sec. 184 to the INA program.
    Proposed Sec.  684.630(b) and (c) include requirements related to 
conflicts of interest gifts. Because the Department has determined that 
no changes were necessary to these sections to implement WIOA, these 
proposed sections retain the same requirements at 20 CFR 668.630(b) and 
(c).
    Proposed Sec.  684.630(d) describes certain restrictions on 
selecting family members as participants. Because the Department has 
determined that no substantial changes were necessary to this section 
to implement WIOA, this proposed section retains the same requirements 
at 20 CFR 668.610(d), except that it clarifies our current practice of 
counting all INA individuals in a community to determine if the 
exception is met.
    Proposed Sec.  684.630(e) through (h) describe kickback, political 
activities, lobbying, and embezzlement restrictions that apply to this 
section. Because the Department has determined that no substantial 
changes were necessary to these sections to implement WIOA, these 
proposed sections retain the same requirements at 20 CFR 668.630(e) 
through (h) with changes to update citations.
    Proposed Sec.  684.630(i) prohibits discriminatory practices by 
recipients of WIOA funds. This section clarifies for the benefit of 
potential applicants the effect of WIOA sec. 188 on the INA programs. 
The language in this section also addresses a long-standing 
misconception among INA grantees that individuals outside of a 
grantee's geographic service area cannot be served without the consent 
of the grantee whose service area the individual resides. The 
Department recognizes that INA program grantees receive funding based 
on specified geographic boundaries such as a county, reservation, 
Alaska Native village etc., and therefore we agree that grantees are 
not required to serve individuals outside their geographic areas since 
another grantee is receiving funding to serve such individuals. 
However, this

[[Page 20765]]

does not mean that grantees cannot serve individuals outside their 
specified boundaries if they choose to do so.
Section 684.640 What grievance systems must an Indian and Native 
American program grantee provide?
    Proposed Sec.  684.640 requires INA program grantees establish 
grievance procedure. Because the Department has determined that no 
changes were necessary to this section to implement WIOA, this proposed 
section retains the same requirements at 20 CFR 668.640.
Section 684.650 Can Indian and Native American program grantees exclude 
segments of the eligible population?
    Proposed Sec.  684.650(a) and (b) inform INA program grantees 
whether they can exclude segments of the eligible population. Because 
the Department has determined that no changes were necessary to these 
sections to implement WIOA, this proposed sections retain the same 
requirements at 20 CFR 668.650.
8. Subpart G--Section 166 Planning/Funding Process
Section 684.700 What is the process for submitting a 4-year plan?
    Proposed Sec.  684.700 describes the process for submitting a 4-
year plan, as required by sec. 166(e) of WIOA. Specific requirements 
for the submission of a 4-year plan will be provided in a Funding 
Opportunity Announcement (FOA). This section facilitates the 
streamlining of the application process as is described in detail in 
the introduction of this part.
Section 684.710 What information must be included in the 4-year plans 
as part of the competitive application?
    Proposed Sec.  684.710 describes the information that must be 
included in the 4-year plan. The Department intends to seek economic 
and workforce responsive 4-year plans under WIOA. Under WIOA, the 
Department proposes that a plan contains only the four information 
requirements set out in WIOA sec. 166(e), which will leave the 
Department flexibility to ask for different kinds of information in a 
request for additional information during the FOA process. The 
Department recognizes that the workforce system must be able to change 
and adapt to the changes required by employers who are, in turn, 
changing and adapting to forces in the economy and advancements in 
technology which require different skill sets for American workers. 
This new approach to planning will provide the flexibility necessary to 
address the current workforce needs at the time plans are written.
    Proposed Sec.  684.710(a) describes the information that must be 
included in the 4-year plan, required by WIOA secs. 166(e)(2) through 
(5).
    Proposed Sec.  684.710(b) states that the 4-year plan must include 
a projection of participants to be served and expenditures during a PY 
and any additional information requested in a FOA. Again, this section 
has been added under WIOA to convey that additional information will be 
required in the 4-year plan, as determined by current labor market 
trends and skills requirements, and what information must be in plans 
will be requested in a FOA as part of the competitive process.
    Proposed Sec.  684.710(c) requires INA program grantees receiving 
supplemental youth funds to provide additional information in the 4-
year plan that describes a strategy for serving low-income, INA youth. 
The Department supports youth activities that preserve Native American 
culture and values. Because the Department has determined that no 
changes were necessary to this section to implement WIOA, this proposed 
section retains the same requirements at 20 CFR 668.720(b), with the 
exception that it is framed to reflect the streamlined application 
process described in more detail in the introduction to this part.
Section 684.720 When must the 4-year plan be submitted?
    Proposed Sec.  684.720 describes when the 4-year plan must be 
submitted. The due date for the submission of the 4-year plan will be 
specified in the FOA. This approach implements and carries out the 
requirements of WIOA secs. 166(c) and 166(e) in the context of the 
streamlined application process that is described in more detail in the 
introduction to this part. The Department envisions that the first 4-
year plan will be for PY 2016-2020 which will cover the period from 
July 1, 2016 through June 30, 2020.
Section 684.730 How will the Department review and approve such plans?
    Proposed Sec.  684.730 describes how the Department will review and 
approve 4-year plans. The Department will make every effort to approve 
plans that are fully complete prior to the beginning of the first PY of 
the 4-year plan and funds will be obligated to grantees for that year 
through a grant award. After the first year of a 4 -year plan, funds 
will automatically be added each year for the following 3 years through 
a grant modification, assuming the grantee continues to be in good 
standing with the Department.
    Incomplete plans that do not fully meet the requirements provided 
in the FOA will not be approved. It is possible for entities to be 
selected through the competitive process and also have an incomplete 
plan. Therefore, after competitive grant selections have been made, the 
DINAP office may assist INA program grantees with incomplete plans on 
tasks such as submitting required documents and other unresolved issues 
that render the 4-year plan incomplete. However, the Department may 
delay funding to grantees until all issues with the 4-year plan have 
been resolved.
    While it is unlikely that a grantee will fail to submit an 
acceptable 4-year plan, the Department will reallocate funds from an 
INA program grantee that fails to submit a 4-year plan to other 
incumbent INA program grantees that have an approved 4-year plan. The 
Grant Officer may also delay executing a grant agreement and obligating 
funds to an entity selected through the competitive process until all 
the required documents--including the 4-year plan--are in place.
    Proposed Sec.  684.730(a) states that it is the Department's intent 
to approve a grantee's 4-year strategic plan before the date on which 
funds for the program become available. Because the Department has 
determined that no changes were necessary under WIOA, this section 
retains the same language as provided under WIA at 20 CFR 668.740(a), 
save for the addition of language specifically addressing the 
streamlined, 4-year grant application process as described in more 
detail in the introduction to this part.
    Proposed Sec.  684.730(b) describes the extent to which the DINAP 
office will assist INA program grantees in resolving any outstanding 
issues that may exist with the 4-year plan. Again, while the Department 
expects that it is unlikely that a grantee will fail to submit an 
acceptable 4-year plan, we need a mechanism to reallocate funds when 
such an event occurs in order to ensure that funds are spent providing 
services to eligible program participants.
    Proposed Sec.  684.730(c) notes that the Department may approve 
portions of a plan while disapproving others. Because the Department 
has determined that no changes were necessary to implement WIOA, the 
proposed regulation retains the same requirements found in the WIA 
regulations at 20 CFR 668.740(b).
    Proposed Sec.  684.730(d) references appeal rights in nonselection 
cases or in the case of a decision by the Department to deny or 
reallocate funds based on unresolved issues with the applicant's

[[Page 20766]]

application or 4-year plan. There are no appeal rights in addition to 
the ones listed in the cited regulations because the Department has 
determined that consistency of appeal rights amongst WIOA programs is 
desirable.
Section 684.740 Under what circumstances can the Department or the 
Indian and Native American program grantee modify the terms of the 
grantee's plan(s)?
    Proposed Sec.  684.740(a) describes when the Department may 
unilaterally modify an INA program grantee's plan to add or reduce 
funds to the grant. Because the Department has determined that no 
changes were necessary to implement WIOA, the proposed regulation 
retains the same requirements found in the WIA regulations at 20 CFR 
668.750(a).
    Proposed Sec.  684.740(b) describes when an INA program grantee may 
request approval to modify their plan to add, expand, delete, or 
diminish any service allowable under the regulations in this part. 
Because the Department has determined that no changes were necessary to 
implement WIOA, the proposed regulation retains the same requirements 
found in the WIA regulations at 20 CFR 668.750(b). Generally, it is the 
Department's intent to pursue grant modifications only when there are 
significant increases or decreases in the grantee's funding that 
results in significant changes in the employment and training services 
stated in the 4-year plan or when the grantee wishes to make a 
significant change in its service strategy. As a general rule, a 
significant change is when the number of participants to be served in 
the original plan changes by 25 percent or by 25 actual participants, 
whichever is larger.
9. Subpart H--Administrative Requirements
Section 684.800 What systems must an Indian and Native American program 
grantee have in place to administer an Indian and Native American 
program?
    Proposed Sec.  684.800(a) and (b) describe the systems that must be 
in place in order for INA grantees to administer a WIOA sec. 166 grant 
INA program. Because the Department has determined that no changes were 
necessary to these sections to implement WIOA, these proposed sections 
retain the same requirements at 20 CFR 668.800.
Section 684.810 What types of costs are allowable expenditures under 
the Indian and Native American program?
    Proposed Sec.  684.810 describes where the rules relating to 
allowable costs under WIOA are located. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements at 20 CFR 
668.810.
Section 684.820 What rules apply to administrative costs under the 
Indian and Native American program?
    Proposed Sec.  684.820 describes where the definition and treatment 
of administrative costs can be found. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements at 20 CFR 
668.820.
Section 684.830 Does the Workforce Innovation and Opportunity Act 
administrative cost limit for States and local areas apply to grants?
    Proposed Sec.  684.830 informs INA program grantees about whether 
the WIOA administrative cost limit for States and local areas applies 
to INA grants. Because the Department has determined that no changes 
were necessary to this section to implement WIOA, this proposed section 
retains the same requirements at 20 CFR 668.825.
Section 684.840 How should Indian and Native American program grantees 
classify costs?
    Proposed Sec.  684.840 describes how INA program grantees must 
classify costs. Because the Department has determined that no changes 
were necessary to this section to implement WIOA, this proposed section 
retains the same requirements at 20 CFR 668.830.
Section 684.850 What cost principles apply to Indian and Native 
American funds?
    Proposed Sec.  684.850 requires INA program grantee to follow the 
cost principles at 2 CFR part 200 subpart E of the Uniform 
Administrative Requirements published in the Federal Register on 
December 26, 2013. This section retains the same language as provided 
under WIA at 20 CFR 668.840, except that the references to OMB 
Circulars A-87, A-122, A-21 have been updated with references to 2 CFR 
part 200 subpart E, Cost Principles, & Audit Requirements for Federal 
Awards.
Section 684.860 What audit requirements apply to Indian and Native 
American grants?
    Proposed Sec.  684.860 requires INA program grantee to follow the 
audit requirements at 2 CFR 200 subpart F of the Uniform Administrative 
Requirements, Cost Principles, & Audit Requirements for Federal Awards 
published in the Federal Register on December 26, 2013. This section 
retains the same language as provided under WIA at 20 CFR 668.850, 
except that the references to OMB Circular A-133 and 29 CFR part 99 
have been updated with references to 2 CFR part 200 subpart E, Cost 
Principles, & Audit Requirements for Federal Awards.
    Additionally, Sec.  684.860(b) implements the language at WIOA sec. 
166(j) relating to single audit requirements.
Section 684.870 What is ``program income'' and how is it regulated in 
the Indian and Native American program?
    Proposed Sec.  684.870(a) through (c) provide descriptions of what 
qualifies as program income for work experience participants and OJT 
participants. Because the Department has determined that no changes 
were necessary to these sections to implement WIOA, these proposed 
sections retain the same requirements at 20 CFR 668.870(a) through (c).
10. Subpart I--Miscellaneous Program Provisions
Section 684.900 Does the Workforce Innovation and Opportunity Act 
provide regulatory and/or statutory waiver authority?
    Proposed Sec.  684.900 describes the regulatory and/or statutory 
waiver authority for the INA program. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements at 20 CFR 
668.900, except that we have clarified, in accordance with WIOA sec. 
166(i)(3), that only requirements related to title I of WIOA may be 
waived.
Section 684.910 What information is required in a waiver request?
    Proposed Sec.  684.910(a) describes what information an INA program 
grantee must include when it requests a waiver. This section implements 
the requirements in WIOA sec. 166(i)(3)(B) and saves INA grantees from 
having to reference additional departmental guidance on how to request 
a waiver.
    Proposed Sec.  684.910(b) states that a waiver may be requested at 
the beginning of a 4-year grant award cycle or anytime during a 4-year 
award cycle. However, all waivers expire at the end of the 4-year award 
cycle. The Department envisions that waivers will be requested for 
unique situations that were not expected in the normal course of 
operating an INA grant. Therefore, Department proposes that waivers 
cannot be provided indefinitely and

[[Page 20767]]

must be renewed at the beginning of a new 4-year grant cycle.
Section 684.920 What provisions of law or regulations may not be 
waived?
    Proposed Sec.  684.920 describes the laws and regulations that may 
not be waived. Because the Department has determined that no changes 
were necessary to this section to implement WIOA, this proposed section 
retains the same requirements at 20 CFR 668.920.
Section 684.930 May Indian and Native American grantees combine or 
consolidate their employment and training funds?
    Proposed Sec.  684.930 provides a description of when INA program 
grantees can consolidate their funds under Public Law 102-477 (477). In 
addition to generally allowing the consolidation of funds as required 
under Public Law 102-477, Sec.  684.930 describes the extent to which 
the Department will review 477 plans. The Department will not review 
the renewal of 477 plans after the initial plan has been approved by 
DOL, accepted by the Department of the Interior, and all other 
applicable Departmental programmatic and financial obligations have 
been met prior to transfer. This policy aligns with the requirements of 
Public Law 102-477 which allows Federally-recognized tribes and Alaska 
Native entities to combine formula-funded Federal grant funds, which 
are employment and training-related, into a single plan with a single 
budget and a single reporting system. The Department recognizes that 
when Federal funds from various agencies are combined under one unified 
plan, there must be one lead agency that administers and manages the 
unified plan. According to Public Law 102-477 the lead agency is the 
DOI.
Section 684.940 What is the role of the Native American Employment and 
Training Council?
    Proposed Sec.  684.940 describes the role of the Native American 
Employment and Training Council. The language in proposed Sec.  684.940 
repeats the requirements at WIOA sec. 166(i)(4)(C) and explains that 
WIOA sec. 166(4) has not made any major changes to the council.
Section 684.950 Does the Workforce Innovation and Opportunity Act 
provide any additional assistance to unique populations in Alaska and 
Hawaii?
    Proposed Sec.  684.950 address the additional assistance that WIOA 
provides for unique populations in Alaska and Hawaii. This proposed 
section implements and carries out the requirements in WIOA sec. 
166(k).

I. Part 685--National Farmworker Jobs Program Under Title I of the 
Workforce Innovation and Opportunity Act

1. Introduction
    The purpose of part 685 is to implement WIOA sec. 167, which 
authorizes MSFW programs. In drafting these regulations, the Department 
consulted with States and MSFW groups during stakeholder consultation 
sessions conducted in August and September 2014, as required by WIOA 
sec. 167(f). MSFW programs include career services and training, 
housing assistance, youth services, and related assistance. In drafting 
the proposed regulations for this part the Department seeks to 
encourage strategic alignment across other workforce development 
programs such as Wagner-Peyser and WIOA title I adult, dislocated 
worker, and youth programs; encourage the delivery of training for in-
demand occupations; provide comprehensive youth workforce activities; 
and provide a detailed description of housing services available to 
eligible MSFWs. As required by WIOA sec. 167(e), when making grants and 
entering into contracts under this section, the Department will consult 
with the Governors and Local Boards of the States in which grantees 
will carry out the activities described in WIOA sec. 167(d) during the 
FOA process described in Sec.  685.210.
    The regulations in this section support strategic alignment across 
workforce development programs by: Aligning the definition of 
``farmwork'' found in this section with that used in the Wagner-Peyser 
program; adjusting the upper and lower age ranges of eligible MSFW 
youth to conform to those established in WIOA sec. 129 for OSY and ISY; 
and requiring that grantees coordinate services, particularly outreach 
to MSFWs, with the State Workforce Agency (SWA) in their service area 
and the State's monitor advocate. These changes are intended to support 
coordination between MSFW programs and other workforce programs such as 
the Wagner-Peyser program, and facilitate MSFW youth co-enrollments 
with other WIOA title I programs.
    The Department proposes language in Sec.  685.350 regarding 
training services that reinforces that training must be directly linked 
to an in-demand industry or occupation that leads to economic self-
sufficiency and encourages the attainment of recognized post-secondary 
credentials when appropriate.
    Proposed Sec. Sec.  685.330 and 685.510 establish that grantees 
funded under WIOA sec. 167 can serve eligible MSFW youth participants. 
The Department also has proposed that a percentage of the total funds 
appropriated each year for WIOA sec. 167 activities will be used for 
housing grants, and described specific housing assistance activities in 
Sec.  685.360, to better articulate the types of services that can be 
delivered to eligible MSFWs.
2. Subpart A--Purpose and Definitions
    This subpart describes the general purpose and definitions relevant 
to MSFW programs authorized under WIOA sec. 167, the role of the 
Department in providing technical assistance and training to grantees, 
and the regulations applicable to grantees.
Section 685.100 What is the purpose of the National Farmworker Jobs 
Program and the other services and activities established under 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.100 identifies achieving economic self-
sufficiency as the goal of the services and activities that are 
authorized in WIOA sec. 167 for eligible MSFWs which includes their 
dependents. This section emphasizes the importance of obtaining, 
retaining, and stabilizing the unsubsidized employment of MSFWs, 
including obtaining upgraded agricultural employment, in achieving the 
goal of the program.
Section 685.110 What definitions apply to this program?
    Proposed Sec.  685.110 provides definitions of terms relevant to 
the implementation and operation of workforce investment activities 
authorized for MSFWs and their dependents under WIOA sec. 167.
    A definition of allowances has been provided that means direct 
payments made to participants to support participation specific career 
services and training.
    Dependents of eligible MSFWs may receive services under WIOA secs. 
167(i)(2)(B) and 167(i)(3)(B), and the Department has provided a 
definition of the family member relationships of an eligible MSFW who 
qualify for MSFW program services.
    Eligibility determination period is defined as ``any consecutive 
12-month period within the 24-month period immediately preceding the 
date of application for the MSFW program by the applicant MSFW.'' The 
definition was adopted from the first clause of

[[Page 20768]]

WIOA sec. 167(i)(3)(A)(i), which defines ``eligible seasonal 
farmworker.''
    The definition of eligible migrant farmworker is taken from WIOA 
sec. 167(i)(2).
    The definition of eligible seasonal farmworker is taken from WIOA 
sec. 167(i)(3).
    A definition of eligible migrant and seasonal farmworker has been 
provided, meaning an eligible migrant farmworker or an eligible 
seasonal farmworker as defined in WIOA sec. 167(i).
    A definition of eligible MSFW youth has been provided, and it is 
defined as eligible MSFWs aged 14-24 who are individually eligible or 
are dependents of eligible MSFWs. The upper age range (age 24) and 
lower age range (age 14) for eligible MSFW youth have been put in 
alignment with the upper and lower age ranges provided in WIOA secs. 
129 ((a)(1)(B) and (a)(1)(C). Eligible MSFW youth is a subset of 
eligible MSFWs as defined in this section. This alignment will 
facilitate co-enrollment with other WIOA youth programs that serve 14-
24 year old youth participants, where appropriate.
    A definition of emergency assistance had been provided that 
establishes that emergency assistance is a form of related assistance, 
and means assistance that addresses immediate needs of eligible MSFWs 
and their dependents, provided by grantees. To facilitate the delivery 
of emergency services in a timely manner the applicant's self-
certification is accepted as sufficient documentation of eligibility 
for emergency assistance.
    A definition of family, is provided that means an eligible MSFW and 
all the individuals identified under the definition of dependent in 
this section who are living together in one physical residence. The 
definition has been proposed for the purpose of reporting housing 
assistance grantee indicators of performance as described in Sec.  
685.400.
    A definition of farmwork is provided that means work while employed 
in the occupations described in 20 CFR 651.10. The specific occupations 
and industries within agricultural production and agricultural services 
will be provided through Departmental guidance, and will be updated 
when government-wide standard industry and occupation codes undergo 
periodic review and revision. Providing a definition of farmwork that 
is aligned with the Wagner-Peyser ES system will facilitate the 
provision of services to MSFWs under both programs.
    A definition of grantee has been provided, meaning an entity to 
which the Department directly awards a WIOA grant to carry out programs 
to serve eligible MSFWs in a service area, with funds made available 
under WIOA sec. 167 or 127(a)(1).
    A definition of housing assistance is provided and means housing-
related services provided to eligible MSFWs. Examples of specific 
authorized housing activities are provided in proposed Sec.  685.360.
    The definition of lower living standard income level from WIOA sec. 
3(36)(B) has been referenced without change.
    The definition of low-income individual from WIOA sec. 3(36)(A) has 
been referenced without change.
    A definition of MOU has been provided, meaning ``Memorandum of 
Understanding.''
    A definition of National Farmworker Jobs Program (NFJP) has been 
provided and is the Department-administered workforce investment 
program for MSFWs established by WIOA sec. 167 as a required partner of 
the one-stop system and includes career services, training grants, and 
housing grants. The term NFJP was initially developed in 1999 by the 
Secretary's MSFW Advisory Committee to distinguish the NFJP from the 
other workforce investment grants and activities funded under WIA sec. 
167, such as the farmworker housing assistance grants; however, since 
that time the NFJP has come to be the accepted term for both employment 
and training grants and housing grants, and this definition reflects 
that understanding.
    The definition of recognized post-secondary credential from WIOA 
sec. 3(52) has been referenced without change.
    A definition of related assistance, which is authorized under WIOA 
sec. 167(d), has been provided meaning short-term forms of direct 
assistance designed to assist eligible MSFWs retain or stabilize their 
agricultural employment.
    A definition of self-certification has been provided meaning an 
eligible MSFW's signed attestation that the information he/she submits 
to demonstrate eligibility for the NFJP is true and accurate.
    A definition of service area has been provided meaning the 
geographical jurisdiction, which may be comprised of one or more 
designated States or sub-State areas, in which a WIOA sec. 167 grantee 
is designated to operate.
    A definition of technical assistance has been provided meaning the 
guidance provided to grantees and grantee staff by the Department to 
improve the quality of the program and the delivery of program services 
to eligible MSFWs. This definition was adapted from and replaces the 20 
CFR part 685 definition of capacity enhancement under WIA to reflect 
the term more commonly used by the Department.
Section 685.120 How does the Department administer the National 
Farmworker Jobs Program?
    Proposed Sec.  685.120 clarifies that the Department's ETA 
administers NFJP activities authorized under WIOA sec. 167 for eligible 
MSFWs, and as described in Sec.  685.210, the Department designates 
grantees in a manner consistent with standard Federal government 
competitive procedures.
Section 685.130 How does the Department assist grantees to serve 
eligible migrant and seasonal farmworkers?
    Proposed Sec.  685.130 establishes that the Department will provide 
guidance, administrative support, technical assistance, and training to 
support MSFW programs and promote employment outcomes for eligible 
MSFWs.
Section 685.140 What regulations apply to the programs authorized under 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.140 specifies the regulations that are 
applicable to MSFW programs authorized under WIOA sec. 167, including 
proposed part 685. Applicable regulations include the general 
administrative requirements found in 20 CFR part 683, including the 
regulations regarding the Complaints, Investigations and Hearings found 
at 20 CFR part 683, subpart D through subpart H; Uniform Guidance at 2 
CFR part 200 and the Department's exceptions at 2 CFR part 2900 
pursuant to the effective dates in 2 CFR part 200 and 2 CFR part 2900; 
the regulations on partnership responsibilities contained in 20 CFR 
parts 679 (Statewide and Local Governance) and 678 (the one-stop 
system); the Department's regulations at 29 CFR part 37, which 
implement the nondiscrimination provisions of WIOA sec. 188.
3. Subpart B--The Service Delivery System for the National Farmworker 
Program
    This subpart describes the service delivery system for the MSFW 
programs authorized by WIOA sec. 167 including who is eligible to 
receive grants and the role of the NFJP in the one-stop delivery 
system. Termination of grantee designation is explained. This subpart 
also discusses the appropriation of WIOA sec. 167 funds and establishes

[[Page 20769]]

that a percentage of the total funds appropriated each year for WIOA 
sec. 167 activities will be used for housing assistance grants.
Section 685.200 Who is eligible to receive a National Farmworker Jobs 
Program grant?
    Proposed Sec.  685.200 describes the entities that are eligible to 
receive NFJP grants. The entity must have an understanding of the 
problems of eligible MSFWs, a familiarity with the agricultural 
industries and the labor market needs of the proposed service area, and 
the ability to demonstrate a capacity to administer and deliver 
effectively a diversified program of workforce investment activities, 
including youth workforce investment activities, and related assistance 
for eligible MSFWs.
Section 685.210 How does an eligible entity become a grantee?
    Proposed Sec.  685.210 establishes that grantees will be selected 
through a FOA using standard Federal government competitive procedures. 
The entity's proposal must describe a 4-year strategy for meeting the 
needs of eligible MSFWs in the proposed service area and a description 
of the entity's experience working with the broader workforce delivery 
system. This is in alignment with the requirement in WIOA sec. 167(a) 
that the Department make grants or enter into contracts on a 
competitive basis every 4 years. Unless specified otherwise in the FOA, 
grantees may serve eligible MSFWs, including eligible MSFW youth, under 
the grant. An applicant whose application for funding as a grantee 
under part 685 is denied in whole or in part may request an 
administrative review under 20 CFR 683.800.
Section 685.220 What is the role of the grantee in the one-stop 
delivery system?
    Proposed Sec.  685.220 describes that in those local workforce 
development areas where the grantee operates its NFJP, as described in 
its grant agreement, the grantee is a required one-stop partner, and is 
subject to the provisions relating to such partners described in 20 CFR 
part 678. Consistent with those provisions, the grantee and Local 
Workforce Development Board must develop and enter into an MOU which 
meets the requirements of 20 CFR 678.500 and sets forth their 
respective responsibilities for providing access to the full range of 
NFJP services through the one-stop system to eligible MSFWs.
Section 685.230 Can a grantee's designation be terminated?
    Proposed Sec.  685.230 explains the circumstance in which a grantee 
may be terminated by the Department for cause, including emergency 
circumstances when such action is necessary to protect the integrity of 
Federal funds or ensure the proper operation of the program, or by the 
Department's Grant Officer, if the recipient materially fails to comply 
with the terms and conditions of the award. The Department has changed 
the standard for Grant Officer termination from ``substantial or 
persistent violation'' as used in the WIA regulations in order to be 
consistent with the standards used for all other Department WIOA grants 
under the common administrative requirements for grants.
Section 685.240 How does the Department use funds appropriated under 
Workforce Innovation and Opportunity Act for the National Farmworker 
Jobs Program?
    Proposed Sec.  685.240 establishes that in accordance with WIOA 
sec. 167(h), at least 99 percent of the funds appropriated each year 
for WIOA sec. 167 activities must be allocated to service areas, based 
on the distribution of the eligible MSFW population determined under a 
formula which has been published in the Federal Register. The grants 
will be awarded under Sec.  685.210. The Department has added language 
that clarifies that of this amount, a percentage of funds will be set 
aside for housing grants and will be specified in an FOA issued by the 
Department. The balance, up to 1 percent of the appropriated funds, 
will be used for discretionary purposes, such as providing technical 
assistance to eligible entities, and other activities prescribed by the 
Secretary to eligible entities. This differs from the up to 4 percent 
reserved in the prior regulations so as to comply with the funding 
requirements of WIOA sec. 167(h).
4. Subpart C--The National Farmworker Jobs Program Customers and 
Available Program Services
    This subpart describes the responsibilities of grantees, and 
workforce investment activities available to eligible MSFWs, including 
career services and training, housing assistance, youth services, and 
related assistance.
Section 685.300 What are the general responsibilities of grantees?
    Proposed Sec.  685.300 establishes the general responsibilities of 
grantees, including that: eligible entities receive grants through the 
FOA process described in Sec.  685.210; career services and training 
grantees are responsible for providing appropriate career services, 
training, and related assistance to eligible MSFWs and eligible MSFW 
youth; and housing grantees are responsible for providing housing 
assistance to eligible MSFWs. Grantees will provide these services in 
accordance with the service delivery strategy described in the approved 
program plan described in Sec.  685.420. These services must reflect 
the needs of the MSFW population in the service area and include the 
services that are necessary to achieve each participant's employment 
goals or housing needs. Grantees also are responsible for coordinating 
services, particularly outreach to MSFWs, with the SWA, as defined in 
20 CFR part 651, and the State's monitor advocate and fulfilling the 
responsibilities of one-stop partners described in proposed Sec.  
678.420.
Section 685.310 What are the basic components of an National Farmworker 
Jobs Program service delivery strategy?
    Proposed Sec.  685.310 describes the basic components of the NFJP 
delivery strategy that must include: A customer-focused case management 
approach; the provision of workforce investment activities, which 
include career services and training, as described in WIOA secs. 167(d) 
and 134 and 20 CFR part 680, and youth workforce investment activities 
described in WIOA sec. 129 and 20 CFR part 681; the arrangements under 
the MOU's with the applicable Local Workforce Development Boards for 
the delivery of the services available through the one-stop system to 
MSFWs; and related assistance services.
Section 685.320 Who is eligible to receive services under the National 
Farmworker Jobs Program?
    Proposed Sec.  685.320 establishes that MSFWs as defined in Sec.  
685.110 are eligible for services funded by the NFJP. As provided in 
WIOA sec. 167(d)(1), NFJP grants are used to provide adult and youth 
services, thus the NFJP may use funds available to serve youth even 
when the service area is not being served with supplemental youth funds 
authorized in WIOA sec. 127(a)(1). In addition, NFJP services can be 
provided to eligible MSFW youth who demonstrate a need for and ability 
to benefit from career services. For example, some older youth may 
benefit more from the array of career services available under NFJP 
than from the youth services offered under subpart E.

[[Page 20770]]

Section 685.330 How are services delivered to eligible migrant and 
seasonal farmworkers?
    Proposed Sec.  685.330 emphasizes that services to eligible MSFWs 
will be focused on the customer's needs and provided through a case-
management approach emphasizing customer choice, and may include 
appropriate career services and training, and related assistance, which 
includes emergency assistance; and supportive services, which includes 
allowance payments. The basic services and delivery of case-management 
activities are further described in Sec. Sec.  685.340 through 685.390.
Section 685.340 What career services must grantees provide to eligible 
migrant and seasonal farmworkers?
    Proposed Sec.  685.340 establishes that eligible MSFWs must be 
provided the career services described in WIOA secs. 167(d) and 
134(c)(2), and 20 CFR part 680. Other career services may be provided 
as identified in the grantee's approved program plan. The Department 
also has included language to clarify that while career services must 
be made available through the one-stop delivery system, grantees also 
may provide these types of services through other sources outside the 
one-stop system. Examples include non-profit organizations or 
educational institutions. The delivery of career services to eligible 
MSFWs by the grantee and through the one-stop system must be discussed 
in the required MOU between the Local Workforce Development Board and 
the grantee.
Section 685.350 What training services must grantees provide to 
eligible migrant and seasonal farmworkers?
    Proposed Sec.  685.350 establishes that the training activities in 
WIOA secs. 167(d) and 134(c)(3)(D), and 20 CFR part 680, must be 
provided to eligible MSFWs. These activities include, but are not 
limited to, occupational-skills training and OJT. The Department also 
emphasizes that eligible MSFWs are not required to receive career 
services prior to receiving training services, as described in WIOA 
sec. 134(c)(3)(iii). This section also reinforces the intent of WIOA 
that training services be directly linked to an in-demand industry 
sector or occupation in the service area, or in another area to which 
an eligible MSFW receiving such services is willing to relocate, 
consistent with WIOA sec. 134(c)(3)(G)(iii). The Department also 
establishes that training activities must encourage the attainment of 
recognized post-secondary credentials as defined in Sec.  685.110 
(which refers to WIOA sec. 3(52)), when appropriate for an eligible 
MSFW. This requirement is in alignment with WIOA secs. 
116(b)(2)(A)(i)(IV) and 116(b)(2)(A)(ii)(III), which include ``the 
percentage of program participants who obtain a recognized post-
secondary credential, or a secondary school diploma,'' as a primary 
indicator of performance for both the adult and youth programs.
Section 685.360 What housing services must grantees provide to eligible 
migrant and seasonal farmworkers?
    Proposed Sec.  685.360 requires that housing grantees must provide 
housing services to eligible MSFWs and that career services and 
training grantees may provide housing services to eligible MSFWs as 
described in their program plan. The proposed section establishes the 
definitions of permanent housing and temporary housing services that 
are available to eligible MSFWs. The Department establishes that 
permanent housing is owner-occupied, or occupied on a permanent, year-
round basis (notwithstanding ownership) as the MSFW's primary residence 
to which he/she typically returns at the end of the work or training 
day and temporary housing is non-owner-occupied housing used by MSFWs 
whose employment requires occasional travel outside their normal 
commuting area. Permanent housing may include rental units, single 
family, duplexes, and other multi-family structures, dormitory, group 
homes, and other housing types that provide short-term, seasonal, or 
year-round housing opportunities in permanent structures. Modular 
structures, manufactured housing, or mobile units placed on permanent 
foundations and supplied with appropriate utilities and other 
infrastructure are also considered permanent housing. Temporary housing 
may include: Units intended for temporary occupancy located in 
permanent structures, such as rental units in an apartment complex or 
in mobile structures, tents, and yurts that provide short-term, 
seasonal housing opportunities; temporary structures that may be moved 
from site to site, dismantled and re-erected when needed for farmworker 
occupancy; and off-farm housing operated independently of employer 
interest in, or control of, the housing, or on-farm housing operated by 
a nonprofit, including faith-based or community non-profit 
organizations, but located on property owned by an agricultural 
employer. Specific examples of permanent housing services and 
activities associated with the provision of permanent housing services, 
and specific examples of temporary housing activities associated with 
the provision of temporary housing services, including emergency 
assistance such as emergency housing payments, vouchers, and cash 
payments for rent/lease and utilities are provided. The Department 
establishes that housing services are intended to meet the needs of 
eligible MSFWs to occupy a unit of housing for reasons related to 
seeking employment, retaining employment, or engaging in training. The 
definitions of permanent housing and temporary housing assistance and 
the specific examples of permanent and temporary housing services 
described in the proposed Sec.  685.360 are adapted from the 2011 
Department Notice of Availability of Funds and Solicitation for Grant 
Applications for the National Farmworker Jobs Program (NFJP) Housing 
Assistance Program (Funding Opportunity Number: SGA-DFA-PY-10-08) which 
provided specific requirements and guidelines for housing grant 
applicants.
Section 685.370 What services may grantees provide to eligible migrant 
and seasonal farmworker youth participants aged 14-24?
    Proposed Sec.  685.370 describes the services that grantees may 
provide to eligible MSFW youth participants aged 14-24 based on an 
evaluation and assessment of their needs. These services include the 
career and training services described in Sec. Sec.  685.340 through 
685.350; youth workforce investment activities described in WIOA sec. 
129; life skills activities that encourage development of self and 
interpersonal skills development; community service projects; and other 
activities that conform to the use of funds for youth activities 
described in 20 CFR part 681. Grantees may provide these services to 
any eligible MSFW youth, regardless of the participant's eligibility 
for WIOA title I youth activities as described in WIOA sec. 129(a).
Section 685.380 What related assistance services may be provided to 
eligible migrant and seasonal farmworkers?
    Proposed Sec.  685.380 describes the types of services that may be 
provided to eligible MSFWs as ``related assistance,'' and establishes 
that these services are short-term, direct services. Examples include 
emergency assistance, as defined in Sec.  685.110, and those activities 
identified in WIOA sec. 167(d), such as English language and literacy 
instruction, pesticide and worker safety training, housing (including 
permanent housing), as

[[Page 20771]]

described in Sec.  685.360, and school dropout prevention and recovery 
activities. Related assistance is distinct from ``supportive services'' 
as defined in WIOA sec. 3, which ``means services such as 
transportation, child care, dependent care, housing, and needs-related 
payments, that are necessary to enable an individual to participate in 
activities authorized under this Act,'' because related assistance may 
be provided to eligible MSFWs who are not otherwise participating in 
activities authorized under this Act such as career services, youth 
services, or training services.
Section 685.390 When may eligible migrant and seasonal farmworkers 
receive related assistance?
    Proposed Sec.  685.390 establishes that eligible MSFWs may receive 
related assistance services when the need for the related assistance is 
identified and documented by the grantee. A statement by the eligible 
MSFW may be included as documentation.
5. Subpart D--Performance Accountability, Planning, and Waiver 
Provisions
    This subpart describes indicators of performance for grantees, 
required planning documents, and the information required in program 
plans required under WIOA sec. 167. The subpart also explains waiver 
provisions and clarifies how grant costs are classified under WIOA sec. 
167.
Section 685.400 What are the indicators of performance that apply to 
the National Farmworker Jobs Program?
    Proposed Sec.  685.400 describes the indicators of performance that 
apply to grantees. Grantees providing career services and training will 
use the indicators of performance common to the adult and youth 
programs, described in WIOA sec. 116(b)(2)(A), as required by WIOA sec. 
167(c)(2)(C). These measures of performance are the same as the primary 
indicators discussed in proposed Sec.  677.155. Though the indicators 
of performance are identified in various places throughout the WIOA 
proposed regulations, the indicators are the same and do not vary 
across the regulations.
    For grantees providing career services and training, the Department 
will reach agreement on the levels of performance for each of the 
primary indicators of performance described in WIOA sec. 116(b)(2)(A), 
taking into account economic conditions, characteristics of the 
individuals served, and other appropriate factors, and using, to the 
extent practicable, the statistical adjustment model under WIOA sec. 
116(b)(3)(A)(viii). The levels agreed to will be the adjusted levels of 
performance and will be incorporated in the program plan, as required 
in WIOA sec. 167(c)(3). For grantees providing housing services only, 
grantees will use the total number of eligible MSFWs served and the 
total number of eligible MSFW families served as indicators of 
performance. Performance indicators for NFJP housing grantees are not 
specified in WIA or WIOA statute, and the measures proposed here are 
adapted from the Department's TEGL, Number 15-13, Program Year 2014 
Planning Guidance for National Farmworker Jobs Program Housing 
Grantees, released March 25, 2014. As described in proposed Sec.  
685.400(d), the Department may develop additional performance 
indicators with appropriate levels of performance for evaluating 
programs that serve eligible MSFWs and which reflect the State service 
area economy, local demographics of eligible MSFWs, and other 
appropriate factors. In accordance with Sec.  685.400(d), the 
Department may develop additional indicators of performance for housing 
grantees in addition to the indicators specified in proposed Sec.  
685.400(c). If additional performance indicators are developed, the 
levels of performance for these additional indicators must be 
negotiated with the grantee and included in the approved program plan. 
Grantees also may develop additional performance indicators and include 
them in the program plan or in periodic performance reports.
Section 685.410 What planning documents must a grantee submit?
    Proposed Sec.  685.410 describes the planning documents that a 
grantee must submit, including a comprehensive program plan, further 
described in proposed Sec.  685.420, and a projection of participant 
services and expenditures covering the 4-year grant cycle.
Section 685.420 What information is required in the grantee program 
plan?
    Proposed Sec.  685.420 describes the information required for 
inclusion in program plans. Paragraph (a) asks for a description of the 
service area that the applicant proposes to serve, in accordance with 
WIOA sec. 167(c). Paragraphs (b) through (g) incorporate the elements 
described in WIOA sec. 167(c)(2). Paragraphs (h) and (i) specify 
additional information required in program plans which include: The 
methods the grantee will use to target its services on specific 
segments of the eligible population, as appropriate, and the response 
to any other requirements set forth in the FOA issued under Sec.  
685.210.
Section 685.430 Under what circumstances are the terms of the grantee's 
program plan modified by the grantee or the Department?
    Proposed Sec.  685.430 describes the circumstances when the terms 
of the grantee's program plan can be modified by the grantee or the 
Department. Program plans must be modified to reflect the funding level 
for each year of the grant, and the Department will provide 
instructions annually on when to submit modifications for each year of 
funding, which will generally be no later than June 1, prior to the 
start of the subsequent year of the grant cycle. Grantees must submit a 
request to the Department for any proposed modifications to the plan to 
add, delete, expand, or reduce any part of the program plan or 
allowable activities, and the Department will consider the cost 
principles, uniform administrative requirements, and terms and 
conditions of award when reviewing modifications to program plans. The 
purpose of this requirement is to ensure that the Department has 
reviewed and approved any proposed programmatic changes as part of a 
grant award to ensure the changes are allowable, programmatically and 
fiscally sound, and do not negatively affect performance outcomes. If 
the grantee is approved for a regulatory waiver under proposed Sec.  
685.560 and Sec.  685.570, it must submit a modification of the grant 
plan to reflect the effect of the waiver.
Section 685.440 How are costs classified under the National Farmworker 
Jobs Program?
    Proposed Sec.  685.440 describes how costs are classified under the 
NFJP. Costs are classified as administrative costs, as defined in 20 
CFR 683.215, and program costs are all other costs not defined as 
administrative. The Department further specifies that program costs 
must be classified and reported in the categories of related assistance 
(including emergency assistance), supportive services, and all other 
program services.
Section 685.450 What is the Workforce Innovation and Opportunity Act 
administrative cost limit for National Farmworker Jobs Program grants?
    Proposed Sec.  685.450 describes the administrative cost limit for 
NFJP grants which, under 20 CFR 683.205(b), will be identified in the 
grant or contract award document, and will not exceed 15 percent of 
total grantee funding. The administrative cost limit established in

[[Page 20772]]

this section is consistent with the administrative cost limit under 
which the program is currently operating.
Section 685.460 Are there regulatory and/or statutory waiver provisions 
that apply to the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.460 describes the regulatory and/or statutory 
waiver provisions that apply to WIOA sec. 167. The statutory waiver 
provision at WIOA sec. 189(i) and discussed in 20 CFR 679.600 does not 
apply to WIOA sec. 167. Paragraph (b) establishes that grantees may 
request a waiver of any regulatory provisions only when such regulatory 
provisions are (1) not required by WIOA; (2) not related to wage and 
labor standards, non-displacement protection, worker rights, 
participation and protection of workers and participants, and 
eligibility of participants, grievance procedures, judicial review, 
nondiscrimination, allocation of funds, procedures for review and 
approval of plans; and (3) not related to the basic purposes of WIOA, 
described in 20 CFR 675.100.
Section 685.470 How can grantees request a waiver?
    Proposed Sec.  685.570 describes the information that grantees must 
submit to the Department in a waiver plan to document a requested 
waiver. The waiver request must include: A description of the goals of 
the waiver; the expected programmatic outcomes and how the waiver will 
improve the provision of program activities; how the waiver is 
consistent with guidelines the Department establishes; the data that 
will be collected to track the impact of the waiver; and the modified 
program plan reflecting the effect of the requested waiver.

6. Subpart E--Supplemental Youth Workforce Investment Activity Funding 
Under Workforce Innovation and Opportunity Act Sec. 127(a)(1)

    This subpart describes the purpose of supplemental youth workforce 
investment activity funding that may become available under WIOA sec. 
127(a)(1). Included is a description of how the funds may become 
available, and what requirements apply to grants funded by WIOA sec. 
127(a)(1). Significantly, these funds may be used only for workforce 
investment activities for eligible MSFW youth, as defined in Sec.  
685.110. The Department will issue a separate FOA for grants funded by 
WIOA sec. 127(a)(1), and the selection will be made in accordance with 
the procedures described in Sec.  685.210, giving priority to 
applicants that are WIOA sec. 167 grantees. Planning documents required 
for grants funded by WIOA sec. 127(a)(1) will be described in the FOA; 
and allocation of WIOA sec. 127(a)(1) funds will be based on the 
comparative merits of the applications in accordance with criteria set 
forth in the FOA.
Section 685.500 What is supplemental youth workforce investment 
activity funding?
    Proposed Sec.  685.500 describes that if Congress appropriates more 
than $925 million for WIOA youth workforce investment activities in a 
fiscal year, 4 percent of the excess amount must be used to provide 
workforce investment activities for eligible MSFW youth under WIOA sec. 
167.
Section 685.510 What requirements apply to grants funded by the 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.510 specifies that the requirements in subparts 
A through D of Sec.  685 apply to grants funded by WIOA sec. 127(a)(1), 
except that grants described in this subpart must be used only for 
workforce investment activities for eligible MSFW youth, as described 
in Sec.  685.370 and WIOA sec. 167(d) (including related assistance and 
supportive services).
Section 685.520 What is the application process for obtaining a grant 
funded by the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.520 specifies that the Department will issue a 
separate FOA for grants funded by WIOA sec. 127(a)(1). The selection 
will be made in accordance with the procedures described in Sec.  
685.210, except that the Department reserves the right to provide 
priority to applicants that are WIOA sec. 167 grantees.
Section 685.530 What planning documents are required for grants funded 
by the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.530 specifies that planning documents required 
for grants funded by WIOA sec. 127(a)(1) will be described in the FOA.
Section 685.540 How are funds allocated to grants funded by the 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.540 describes that the allocation of WIOA sec. 
127(a)(1) funds will be based on the comparative merits of the 
applications, in accordance with criteria set forth in the FOA.
Section 685.550 Who is eligible to receive services through grants 
funded by the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.550 describes that eligible MSFW youth as 
defined in Sec.  685.110 may receive services through grants funded by 
WIOA sec. 127(a)(1).
J. Part 686--The Job Corps Under Title I of the Workforce Innovation 
and Opportunity Act
1. Introduction
    This part provides proposed regulations for the Job Corps program, 
authorized in title I, subtitle C of WIOA. The regulations address the 
scope and purpose of the Job Corps program and provide requirements 
relating to site selection, protection, and maintenance of Job Corps 
facilities; funding and selection of center operators and service 
providers; recruitment, eligibility, screening, selection and 
assignment, and enrollment of Job Corps students; Job Corps program 
activities and center operations; student support; career transition 
services and graduate services; community connections; and 
administrative and management requirements. The Department's intent in 
the regulations is to incorporate the requirements of title I, subtitle 
C of the Act and to describe how the Job Corps program is operated in 
order to deliver relevant academic and career technical training (CTT) 
that leads to meaningful employment or post-secondary education. The 
regulations also serve to explain clearly the requirements necessitated 
by the unique residential environment of a Job Corps center. The major 
changes from the existing regulations reflect WIOA's effort to enhance 
the Job Corps program, provide access to high quality training and 
education, create incentives for strong contractor performance, and 
promote accountability and transparency.
2. Subpart A--Scope and Purpose
    This proposed subpart contains regulatory provisions that describe 
the Job Corps program, its purpose, the role of its Director, and 
applicable definitions. In describing the role of the Job Corps 
Director, this subpart provides that the Secretary has delegated the 
authority to carry out his or her responsibilities under this part to 
the National Director of Job Corps; therefore, all references to the 
Secretary issuing guidelines, procedures or standards means that they 
will be issued by the National Job Corps Director. This subpart also 
describes the Policy and Requirements Handbook (PRH), which provides 
the operating policies and

[[Page 20773]]

procedures governing day-to-day activities of the Job Corps program. 
The subpart describes the scope and purpose of the program, along with 
the responsibilities of its National Director. It promotes 
accountability and transparency by making readers aware of exactly what 
the Job Corps program plans to achieve and the procedures for doing so, 
as well as the role its leadership plays in its operation.
Section 686.100 What is the scope of this part?
    Proposed Sec.  686.100 contains the regulatory provisions governing 
the Job Corps program. It explains that procedures guiding day-to-day 
operations are proposed to be provided in the PRH and clarifies that 
throughout this part, phrases that refer to instructions or procedures 
issued by the Secretary refer to the PRH and other Job Corps 
Directives. Because this section of WIOA is so similar to the 
corresponding section in WIA, this proposed section retains the same 
requirements found at 20 CFR 686.100.
Section 686.110 What is the Job Corps program?
    Proposed Sec.  686.110 describes the Job Corps program. Job Corps 
is a national program that operates in partnership with States, 
communities, local Workforce Development Boards, youth councils, one-
stop centers and partners, and other youth programs to provide social, 
academic, career and technical education, and service-learning 
opportunities, primarily in a residential setting, for low-income young 
people. Proposed Sec.  686.110 reflects the increased focus in sec. 141 
of WIOA on connecting young people to the labor force by providing them 
with intensive social, academic, career and technical education in 
order to obtain secondary school diplomas or recognized credentials 
leading to successful careers in in-demand industries or occupations, 
the Armed Forces, or enrollment in post-secondary education. The 
program's goals for students are economic self-sufficiency, 
opportunities for advancement, and responsible citizenship.
Section 686.120 What definitions apply to this part?
    The definitions that are listed in this section are specific to 
this proposed part, which governs the Job Corps program. Other 
definitions that apply to the Job Corps program are defined under secs. 
3 and 142 of WIOA. Proposed Sec.  686.120 describes definitions in four 
categories.
    The first category is made up of proposed definitions that are the 
same as those included in the regulations at 20 CFR 686.120 that 
governed the Job Corps program under WIA. These are ``Absent Without 
Official Leave (AWOL),'' ``Capital improvement,'' ``Contract center,'' 
``Enrollee,'' ``Enrollment,'' ``Individual with a disability,'' 
``Interagency agreement,'' ``Job Corps Director,'' ``National Office,'' 
``Placement,'' ``Regional appeal board,'' ``Regional Director,'' 
``Regional Office,'' ``Regional Solicitor,'' ``Separation,'' 
``Student,'' and ``Unauthorized goods.'' Because these definitions are 
the same as those in the WIA regulations, the Department has not 
included further explanation of them below.
    The second category is made up of proposed definitions that are 
similar to definitions included in the WIA regulations at 20 CFR 
670.120, but they have been modified slightly due to differences in the 
definitions contained in WIOA. These are ``Applicable Local Board,'' 
``Civilian Conservation Center (CCC), ``Contracting Officer,'' 
``Graduate,'' ``Job Corps,'' ``Job Corps center,'' ``Low-income 
individual,'' ``National training contractor,'' ``Operational support 
services,'' ``Operator,'' and ``Outreach and admissions provider.''
    The third category is made up of proposed definitions that were not 
included in the WIA regulations, but they are defined in sec. 142 of 
WIOA. These are ``Applicable one-stop center,'' ``Former Enrollee,'' 
and ``Service Provider.''
    The fourth category is made up of proposed definitions that apply 
to the Job Corps program and are commonly used in these regulations, 
but do not appear in the WIA regulations or in WIOA. These are ``Career 
Technical Training,'' ``Career Transition Service Provider,'' and 
``Participant.''
    Aside from the terms in the first category, the definitions are 
explained as the terms appear in this proposed section in alphabetical 
order, as follows:
    Applicable Local Board--The proposed definition of this term 
implements the definition of ``applicable Local Board'' contained in 
sec. 142 of WIOA. It is similar to the definition of ``Workforce 
Investment Board'' in the WIA regulations.
    Applicable one-stop center--The proposed definition of this term 
implements the definition contained in sec. 142 of WIOA.
    Career Technical Training--The proposed definition of this term 
means career and technical education and training, which is the term 
most often used by WIOA rather than ``vocational training,'' as used in 
WIA.
    Career Transition Service Provider--The proposed definition of this 
term means an organization acting under a contract or other agreement 
with Job Corps to provide career transition services for graduates and, 
to the extent possible, for former students. WIOA uses both the term 
``Career Transition Service Provider'' and ``Placement Provider'' 
interchangeably. Career transition services are further explained in 
subpart G of the proposed rule.
    Contracting officer--The proposed definition of this term is 
similar to the definition of ``contracting officer'' in the WIA 
regulations, but it does not include ``Regional Director,'' because 
contracting officers are most often not Regional Directors.
    Former Enrollee--The proposed definition of this term implements 
the definition contained in sec. 142 of WIOA.
    Graduate--The proposed definition of this term implements the 
definition contained in sec. 142 of WIOA.
    Job Corps--The proposed definition of this term is similar to the 
definition of ``Job Corps'' in the WIA regulations, but it clarifies 
that the Job Corps is established within the Department and cites the 
applicable section of WIOA.
    Job Corps center--The proposed definition of this term is the same 
as the definition in the WIA regulations, except that this definition 
cites the applicable section of WIOA.
    Low-income individual--The proposed definition of this term is the 
same as the definition in the WIA regulations, except that this 
definition cites the applicable section of WIOA.
    National training contractor--The proposed definition of this term 
is slightly different from the definition in the WIA regulations, 
because the term ``career and technical training'' is used rather than 
``vocational training.'' However, the meaning remains unchanged.
    Operational support services--The proposed definition of this term 
is slightly different from the definition in the WIA regulations, 
because the term ``career and technical training'' is used instead of 
``vocational training.'' However, the meaning remains unchanged.
    Operator--The proposed definition of this term implements the 
definition of ``operator'' contained in sec. 142 of WIOA. It is similar 
to the definition of ``center operator'' in the WIA regulations.
    Outreach and admissions provider - The proposed definition of this 
term is similar to the definition of ``outreach

[[Page 20774]]

and admissions agency'' in the WIA regulations, but it clarifies that 
the entity performs recruitment in addition to outreach and enrollment 
activities, consistent with the definition in sec. 142 of WIOA.
    Participant--The proposed definition of this term clarifies which 
individuals are considered participants for performance reporting 
purposes under proposed Sec.  686.1010. The definition of participant 
includes graduates and those enrollees and former enrollees who have 
completed the career preparation period. It also includes enrollees and 
former enrollees who have remained in the program for 60 days or more, 
regardless of whether they have completed their career preparation 
period. During the career preparation period, the student learns, 
demonstrates, and practices personal responsibility and skills required 
in the workplace; learns, demonstrates, and practices job search 
skills; visits and learns about one-stop centers; and creates a 
personal career development plan with the help of staff. In most cases, 
the career preparation period culminates with the commitment to the 
Personal Career Development Plan. The Department proposes this 
limitation because students are not assigned to trades and are not 
generally receiving the services described subpart E of this part until 
the career preparation period is completed. The career preparation 
period is described in Job Corps' Policy and Requirements Handbook.
    Service Provider--The proposed definition of this term implements 
the definition contained in sec. 142 of WIOA.
Section 686.130 What is the role of the Job Corps Director?
    Proposed Sec.  686.130 describes the role of the Job Corps 
Director, noting that he/she has been delegated authority to carry out 
the responsibility of the Secretary under title I, subtitle C of WIOA 
related to the operation of the Job Corps program. Proposed Sec.  
686.130 also clarifies that references in this part referring to 
``guidelines'' or ``procedures issued by the Secretary'' mean that the 
Job Corps Director issues such guidelines. This proposed section 
retains the same requirements as those found at 20 CFR 686.130.
3. Subpart B--Site Selection and Protection and Maintenance of 
Facilities
    This proposed subpart describes how sites for Job Corps centers are 
selected, the handling of capital improvements and new construction on 
Job Corps centers, and responsibilities for facility protection and 
maintenance. The requirements in this subpart are not significantly 
different from the corresponding requirements in the WIA Job Corps 
regulations at 20 CFR part 686 subpart B. The Secretary, through 
delegation of authority to the National Director of Job Corps, must 
approve the location and size of all Job Corps centers, and establish 
procedures for requesting, approving, and initiating capital 
improvement and new construction on Job Corps centers, which serves to 
strengthen and enhance the program as a whole.
Section 686.200 How are Job Corps center locations and sizes 
determined?
    Proposed Sec.  686.200 explains that the Secretary must approve the 
location and size of all Job Corps centers, including both contract 
centers and CCCs. The Secretary also establishes procedures for making 
decisions concerning the establishment, relocation, expansion, or 
closing of contract centers.
Section 686.210 How are center facilities improvements and new 
construction handled?
    Proposed Sec.  686.210 states that the Secretary establishes 
procedures for requesting, approving, and initiating capital 
improvements and new construction on Job Corps centers.
Section 686.220 Who is responsible for the protection and maintenance 
of center facilities?
    Proposed Sec.  686.220 states that the Secretary establishes 
procedures for the protection and maintenance of contract center 
facilities owned or leased by the Department. The proposed section also 
states that when the Department of Agriculture operates CCCs on public 
land, it will be responsible for the protection and maintenance of CCC 
facilities. The Secretary issues procedures for conducting periodic 
facility surveys of centers to determine their condition and to 
identify additional physical needs. This proposed section retains the 
same requirements found at 20 CFR 670.220.
4. Subpart C--Funding and Selection of Center Operators and Service 
Providers
    In this proposed subpart the Department implements new requirements 
of WIOA with regard to the operators of high-performing centers, the 
length of contractual agreements to operate Job Corps centers, and how 
entities are selected to receive funding to operate Job Corps centers 
and to provide outreach, admissions, and career transition support 
services. In addition to adding to the list of considerations currently 
used in selecting Job Corps center operators and service providers, 
WIOA emphasizes competition to increase the performance and quality of 
the Job Corps program. WIOA also provides that an entity, in its role 
as incumbent operator of a center deemed to be high performing, may 
compete in any competitive selection process carried out for an award 
to operate that center, even in cases where the selection of the 
operator is set aside for small businesses as required by the Federal 
Acquisition Regulation. This serves to ensure continued access to high 
quality training and education for Job Corps students, since a high 
performing incumbent operator has an established and proven record of 
providing it. WIOA also provides that a center operations contracts 
cannot exceed 2 years, with three 1-year options to renew. This 
codifies current Job Corps practice. Furthermore, WIOA precludes the 
Secretary from exercising an option to renew a center operations 
contract for an additional 1-year period if certain criteria are not 
met, with limited exceptions. All of these new and expanded provisions 
follow WIOA's theme of enhancing the Job Corps program and providing 
access to high quality training and education by ensuring Job Corps 
centers are staffed with high quality service providers.
Section 686.300 What entities are eligible to receive funds to operate 
centers and provide training and operational support services?
    Proposed Sec.  686.300 implements secs. 147(a)(1), 147(e), and 
145(a)(3) of WIOA, establishing the entities eligible to receive funds 
to operate Job Corps centers, and to provide outreach and admissions, 
career transition, and other operational support services.
    Proposed paragraphs (a)(1), (a)(2), and (a)(4) reflect the entities 
eligible to operate Job Corps centers listed in WIOA sec. 147(a)(1)(A). 
Proposed paragraph (a)(3) includes ``Indian tribes and organizations'' 
as eligible center operators, consistent with sec. 147(e) of WIOA. For 
purposes of this section, the Department interprets ``Indian tribes and 
organizations'' consistent with sec. 147(e)(2) of WIOA, which provides 
that the terms ``Indian'' and ``Indian tribe'' have the meanings given 
them in sec. 4 of the ISDEAA (codified at 25 U.S.C. 450b(d) and (e)), 
which says that ``Indian tribe'' means 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 (codified at 43 
U.S.C. 1601 et seq.), which is recognized as

[[Page 20775]]

eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians.
    Proposed paragraph (b) lists the entities eligible to receive funds 
to provide necessary services to Job Corps centers, including outreach 
and admissions, career transition, and other operational support 
services. Generally, as provided in WIOA sec. 147(a)(1)(B), local or 
other entities with the necessary capacity to provide activities 
described in this part are considered eligible entities. Paragraphs 
(b)(1), (b)(2), and (b)(3) reflect the entities listed in sec. 
145(a)(3) of WIOA. Currently Job Corps also allows private for-profit 
and non-profit corporations to act as eligible service providers; 
paragraph (b)(2) clarifies that private for-profit and non-profit 
corporations continue to be included as business organizations eligible 
to receive funds as service providers.
Section 686.310 How are entities selected to receive funding to operate 
centers?
    Proposed Sec.  686.310 implements secs. 147(a)(2) and (a)(3) of 
WIOA, which contain new provisions to strengthen the Job Corps 
contracting process by requiring specific criteria that emphasize 
quality, performance, and accountability to be addressed as part of the 
selection process for center operators. The proposed section adopts 
these criteria to improve the effectiveness of the program in helping 
young people become responsible citizens by providing them with the 
skills they need for successful careers in in-demand industry sectors, 
occupations, or the Armed Forces, or for enrollment in post-secondary 
education. The Department welcomes comments on how best to embed a 
focus on quality, performance, and accountability into the procurement 
process.
    Proposed Sec.  686.310(a) implements sec. 147(a)(2)(A) of WIOA, 
stating that the Secretary selects eligible entities to operate 
contract centers on a competitive basis in accordance with applicable 
statutes and regulations. This paragraph also explains that in 
selecting an entity, ETA issues requests for proposals (RFPs) for the 
operation of all contact centers according to the Federal Acquisition 
Regulation (48 chapter 1) and the Department's Acquisition Regulation 
(48 chapter 29). ETA develops RFPs for center operators in consultation 
with the Governor, the center workforce council (if established), and 
the Local Board for the workforce development area in which the center 
is located.
    Proposed paragraph (b) requires that the RFPs for each contract 
center describe uniform specifications and standards, as well as 
specifications and requirements that are unique to the operation of the 
specific center.
    Proposed paragraph (c) implements the factors for selection of an 
entity to operate a Job Corps center established in sec. 
147(a)(2)(B)(i) of WIOA, by specifying that the selection criteria will 
be established by the Secretary and set forth in the RFP. Proposed 
paragraphs (c)(1) through (5) set forth the specific criteria that must 
be included in the RFP, as listed in sec. 147(a)(2)(B)(i) of WIOA. 
Paragraph (c)(1) retains the language found in the WIA regulations at 
20 CFR 670.310(c)(1), requiring that the offeror demonstrate its 
ability to coordinate the activities carried out through the Job Corps 
center with activities carried out under the appropriate State and 
local workforce investment plans. This supports the overall goal of 
better connecting and aligning Job Corps with the workforce system.
    Proposed paragraphs (c)(2) through (4) implement the criteria at 
WIOA secs. 147(a)(2)(B)(i)(II) through 147(a)(2)(B)(i)(IV). These 
provisions support the goal of better alignment with the workforce 
system and the increased focus on past performance and student outcomes 
against the primary indicators of performance for eligible youth and 
the Job Corps program.
    Proposed paragraph (c)(5) is a new element in the selection process 
established in sec. 147(a)(2)(B)(i)(V) of WIOA, requiring that the 
criteria include the offeror's ability to demonstrate a record of 
successfully assisting at-risk youth to connect to the workforce, 
including providing them with intensive academics and career and 
technical training. This aligns with the increased focus on student 
outcomes and emphasizes the purpose of the program, which is to provide 
students with the skills they need for successful careers in in-demand 
industries, occupations, or the Armed Forces, or to continue on to 
post-secondary education. The Department welcomes comments on how to 
assess potential offerors' past records in assisting at-risk youth to 
connect to the workforce.
    Proposed paragraph (d) implements the additional factors for 
selection of an entity to operate a Job Corps center that are specified 
in sec. 147(a)(3) of WIOA. These provisions support the goals of better 
alignment with the workforce system and increased focus on past 
performance and student outcomes against the primary indicators of 
performance for eligible youth and the Job Corps program. In addition, 
paragraph (d) specifies that the information described in paragraphs 
(d)(1) through (11) must be submitted at such time in the procurement 
process, and in such form, as the Secretary determines is appropriate.
Section 686.320 What if a current center operator is deemed to be an 
operator of a high-performing center?
    Proposed Sec.  686.320(a) implements sec. 147(b)(1) of WIOA, 
allowing an entity that, in its role as the incumbent operator of a 
center, meets the requirements of this section to be considered an 
operator of a high-performing center. If the entity is considered an 
operator of a high-performing center, the entity must be allowed to 
compete in any competitive selection process carried out for an award 
to operate that center. This means that in cases where the selection of 
the operator of a particular center is set aside for small businesses 
as required by the Federal Acquisition Regulation, the incumbent 
operator may participate in the subsequent competition for the center 
operations contract even if the operator would be otherwise ineligible 
to compete as a result of the set-aside.
    Proposed paragraph (b) implements sec. 147(b)(2) of WIOA, which 
provides the criteria an operator must meet to be considered an 
operator of a high-performing center for the purposes of paragraph (a). 
First, under paragraph (b)(1), the center must be ranked among the top 
20 percent of Job Corps centers for the most recent preceding PY 
according to the ranking described in proposed Sec.  686.1070. Second, 
under paragraph (b)(2), the center must meet the expected levels of 
performance established with respect to each of the primary indicators 
of performance for eligible youth found in proposed Sec.  686.1000. A 
center will be determined to have met the expected measures of 
performance if, per proposed Sec.  686.320(b)(2)(i) and (ii), it 
achieved an average of at least 100 percent of the expected level of 
performance for the indicator over the most recent preceding 3 PYs, 
and, for the most recent preceding PY for which information is 
available at the time the determination is made, the center achieved at 
least 100 percent of the expected level of performance established for 
the indicator. This provision emphasizes the importance of meeting the 
expected levels of performance related to the primary indicators, by 
providing an opportunity for the most successful incumbent contractors 
to compete to operate a high-performing center even if

[[Page 20776]]

the competition for that center is a small business set-aside and the 
incumbent would not normally meet the criteria to compete in a small 
business set-aside competition. The Department anticipates going 
through the market research phase of the competition before determining 
whether the competition will be set aside for small businesses; a 
determination as to whether the incumbent contractor meets the criteria 
in proposed paragraph (b) will likely be made after the market research 
phase is completed and before the issuance of the solicitation.
    Proposed paragraph (c) implements the transition procedures in sec. 
147(b)(3) of WIOA, and describes the criteria that must be met for an 
operator to be considered to be an operator of a high-performing center 
if any of the PYs described in paragraph (b) precede the implementation 
of the establishment of the expected levels of performance and the 
application of the primary indicators of performance for eligible 
youth.
Section 686.330 What is the length of an agreement entered into by the 
Secretary for operation of a Job Corps center and what are the 
conditions for renewal of such an agreement?
    Proposed Sec.  686.330 implements secs. 147(f)-(g) of WIOA, which 
contain new provisions to strengthen the Job Corps contracting process 
by enacting new requirements for the length of center operations 
contracts and the conditions under which they may be renewed. These 
provisions emphasize quality and integrity in center operators and 
direct the Secretary not to exercise option years for contracts where 
minimum standards of performance related to the primary indicators of 
performance for eligible youth are not met. These provisions further 
support the overall vision of improved performance and accountability 
for the Job Corps program.
    Proposed Sec.  686.330(a) implements sec. 147(f) of WIOA, which 
provides that contracts to operate a Job Corps center cannot exceed 2 
years, but that the Secretary can exercise any contractual option to 
renew the agreement in 1-year increments for not more than 3 additional 
years. This proposed paragraph reflects current Job Corps contracting 
practice.
    Proposed paragraph (b) explains that the Secretary will establish 
procedures for evaluating the option to renew an agreement that include 
an assessment of the factors described in proposed paragraph (c), a 
review of contract performance and financial reporting compliance, a 
review of the program management and performance data described in 
proposed Sec. Sec.  686.975 and 686.980, and an evaluation of the 
factors described in proposed paragraph (d).
    Proposed paragraph (c) implements sec. 147(g)(4) of WIOA, which 
establishes conditions that must be met for the Secretary to exercise a 
contractual option to renew an agreement for an entity to operate a Job 
Corps center.
    Proposed paragraph (d) implements sec. 147(g)(1) of WIOA, which 
prohibits the Secretary from renewing an agreement for an entity to 
operate a Job Corps center for any 1-year additional period if, for 
both of the 2 most recent preceding PYs for which information is 
available at the time the determination to exercise an option is made, 
the center both has been ranked in the lowest 10 percent of Job Corps 
centers according to the ranking described in proposed Sec.  686.1070 
and has failed to achieve an average of 50 percent or higher of the 
expected level of performance with respect to each of the primary 
indicators of performance for eligible youth (as described in proposed 
Sec.  686.1000). If a second year of program data is unavailable at the 
time the determination regarding the contractual option is made, 
proposed paragraph (d) requires the use of data from the preceding year 
from which performance information is available. This provision 
emphasizes the center operator's accountability for meeting the 
expected levels of performance related to the primary indicators by 
establishing minimum performance standards that must be met for the 
Secretary to exercise an option year.
    Proposed paragraph (e) addresses the availability of information 
and data necessary to make the determination required by proposed 
paragraph (d). The availability of sufficient information to make this 
determination is a particular concern in situations where there is a 
change of operators at the beginning of an agreement, and there is a 
period of time during which student outcome data, and thus the primary 
indicators of performance, reflect the performance of the previous 
operator rather than the operator upon whose contract the determination 
is being made.
    In order to prevent an entity from being penalized for the poor 
performance of the previous operator, proposed paragraph (e)(1) states 
that information will only be considered to be available for a PY for 
purposes of paragraph (d) if for each of the primary indicators of 
performance, all of the students included in the cohort being measured 
either began their participation under the current center operator or, 
if they began their participation under the previous center operator, 
were on center for at least 6 months under the current operator. Six 
months represents a sufficient length of time for the efforts of the 
current operator to influence the outcomes achieved by a student. 
Proposed paragraph (e)(2) further provides that if complete information 
for any of the indicators of performance described in paragraph (d)(2) 
is not available for either of the 2 PYs described in paragraph (d), 
the Secretary will review partial PY data from the most recent PY for 
those indicators, if at least 2 quarters of data are available, when 
making the determination required under paragraph (d)(2). The 
Department recognizes that data for some of the primary indicators of 
performance do not become mature for an extended period of time. For 
example, employment in the fourth quarter after exit and credential 
attainment are measured more than a year after the student exits the 
program and then are reported in a subsequent quarter. Because the 
Secretary's decision on whether to exercise the first option year is 
normally made about 18 months after the contract begins, in many cases 
complete information on employment in the fourth quarter after exit and 
credential attainment will not be available at the time the first 
option year decision is made. The Department invites comments on the 
issue of information availability, including the threshold for the 
point at which the performance of the center reflects the performance 
of the current operator.
    Proposed paragraph (f) provides a transition provision for 
establishing the criteria that must be met for an operator to meet the 
requirements of proposed paragraph (d). The transition provisions apply 
if any of the PYs described in paragraph (d) precede the implementation 
of the primary indicators of performance for eligible youth and 
establishment of the expected levels of performance. While the WIOA 
statute does not include a transition provision, it is necessary to add 
such a provision because although the WIOA contracting provisions, 
including this section, go into effect on July 1, 2015, the WIOA 
performance reporting requirements do not go into effect until July 1, 
2016. In addition, there will be a gap in time during which initial 
data on the primary indicators of performance is being collected and 
baselines are being established when the expected levels of performance 
will not have been established and therefore, the data described in 
paragraph (d)(2) will not yet be available. ETA has modeled the 
transition language in proposed

[[Page 20777]]

paragraph (f) on the transition provision in WIOA sec. 147(b)(3), which 
is used to determine whether a center is a high performing center, and 
based on criteria similar to the criteria in proposed paragraph (d). 
The transition bases the determination on similar data points using the 
performance of the Job Corps center regarding the national goals or 
targets established by the Office of the Job Corps under the previous 
performance accountability system, which is the available data that 
most closely aligns with the requirement in paragraph (d). Therefore, 
the Department chose this as the best proxy data available. The 
Department invites comments on the approach to transitioning from the 
WIA to WIOA performance management systems.
    Proposed paragraph (g), implements sec. 147(g)(2) of WIOA, which 
provides an exception to the prohibition against exercising an option 
year for an operator of a low-performing center as determined under 
proposed paragraph (d).
    As required in sec. 147(g)(3) of WIOA, if the Secretary exercises a 
contractual option by applying the exception described in proposed 
paragraph (g), proposed paragraph (h) requires the Secretary to provide 
a detailed explanation of the rationale for exercising the option to 
the Committee on Education and the Workforce of the House of 
Representatives and the Committee on Health, Education, Labor, and 
Pensions of the Senate.
Section 686.340 How are entities selected to receive funding to provide 
outreach and admission, career transition and other operational support 
services?
    Proposed Sec.  686.340(a) implements sec. 147(a)(2)(A) of WIOA, 
generally describing the process by which eligible entities are 
selected to provide outreach and admissions, career transition, and 
other operational support services to the Job Corps program.
    Proposed paragraph (b) requires that the RFP for each support 
service contract describes uniform specifications and standards, as 
well as specifications and requirements that are unique to the 
operation of the specific center.
    Proposed paragraph (c) implements the factors for selection of an 
entity to provide operational support services, as established in sec. 
147(a)(2)(B)(i) of WIOA, by specifying that the selection criteria will 
be established by the Secretary and set forth in the RFP. The criteria 
listed in proposed paragraphs (c)(1) through (5) are the same as those 
in proposed Sec.  686.310(c)(1) through (5). Proposed paragraph (c)(6) 
provides that the Secretary may require additional information or 
selection factors in the RFP.
Section 686.350 What conditions apply to the operation of a Civilian 
Conservation Center?
    Proposed Sec.  686.350 is a new section that implements sec. 147(d) 
of WIOA. Proposed paragraph (a) implements sec. 147(d)(1) of WIOA, 
establishing that the Secretary of Labor may enter into an agreement 
with the Secretary of Agriculture to operate Job Corps centers called 
CCCs. Paragraph (a) also contains the description of the 
characteristics of CCCs.
    Proposed paragraph (b) retains the language in the WIA regulations 
at 20 CFR 670.310(e) that when the Secretary of Labor enters into an 
agreement with the Secretary of Agriculture for the funding, 
establishment, and operation of CCCs, provisions are included to ensure 
that the Department of Agriculture complies with the regulations under 
this part.
    Proposed paragraph (c), implementing sec. 147(d)(2) of WIOA, 
permits enrollees in CCCs to provide assistance in addressing national, 
State, and local disasters, consistent with relevant child labor laws. 
This proposed paragraph further requires that the Secretary of 
Agriculture ensure that enrollees are properly trained, equipped, 
supervised, and dispatched consistent with the standards for the 
conservation and rehabilitation of wildlife established under the Fish 
and Wildlife Coordination Act (16 U.S.C. 661 et seq.).
    Proposed paragraph (d) requires the Secretary of Agriculture to 
designate a Job Corps National Liaison to support the agreement between 
the Departments of Labor and Agriculture to operate CCCs, as required 
by sec. 147(d)(3) of WIOA.
    Proposed paragraph (e) permits the Secretary, in consultation with 
the Secretary of Agriculture, to select a private entity to operate a 
CCC using the process and requirements described at Sec.  686.310.
    Proposed paragraph (f) permits the Secretary to close a CCC as part 
of the Department's administration of the Job Corps program if it 
determines that such action would be appropriate.
Section 686.360 What are the requirements for award of contracts and 
payments to Federal agencies?
    Proposed Sec.  686.360 states the requirements and authorities that 
apply to the award of contracts and payments to Federal agencies. This 
section retains the same requirements as those in the WIA regulations 
at 20 CFR 670.320.
5. Subpart D--Recruitment, Eligibility, Screening, Selection and 
Assignment, Enrollment
    This proposed subpart describes who is eligible for Job Corps under 
WIOA and provides additional factors that are considered in selecting 
eligible applicants for enrollment. Also described is how applicants 
who meet eligibility and selection requirements are assigned to 
centers, which implements WIOA's new requirements that the assignment 
plan consider the size and enrollment level of a center, including the 
education, training, and supportive services provided, and the 
performance of the Job Corps center related to the newly established 
expected levels of performance. WIOA also amends the assignment plan to 
provide for assignments at the center closest to home that offers the 
type of career and technical training selected by the individual rather 
than just the center closest to home, which improves access to high 
quality training for Job Corps students. These proposed regulations 
serve to enhance the Job Corps program overall by ensuring that the 
individual training and education needs of applicants and enrollees are 
met in accordance with the requirements of WIOA. They also ensure that 
applicants and enrollees are provided accurate information about the 
standards and expectations of the Job Corps program and are fully 
prepared to be successful.
Section 686.400 Who is eligible to participate in the Job Corps 
program?
    Proposed paragraph (a) implements the eligibility requirements in 
sec. 144(a) of WIOA. According to WIOA, to be eligible to participate 
in the Job Corps, an individual must be at least 16 and not more than 
24 years old at the time of enrollment, except that: Under proposed 
paragraph (a)(1)(i), the Job Corps Director may waive the maximum age 
limitation described in paragraph (a)(1) and the requirement in 
paragraph (a)(1)(ii) for an individual with a disability who is 
otherwise eligible according to the requirements listed in Sec. Sec.  
686.400 and 686.410. Proposed paragraph (a)(1)(ii) states that not more 
than 20 percent of individuals enrolled nationwide can be aged 22 to 24 
at the time of enrollment. The regulatory language in paragraph 
(a)(1)(i) differs from the language in the WIA regulations at 20 CFR 
670.400(a)(1). The proposed language is intended to enable the Job 
Corps Director to admit individuals with disabilities even if they 
exceed the age limitations in paragraph

[[Page 20778]]

(a) as long as the Director determines that the individual meets all 
the other eligibility requirements listed in proposed Sec.  686.410.
    In addition to satisfying the age requirements above, proposed 
Sec.  686.410 lists the additional requirements for a person to be 
eligible to participate in Job Corps. An individual must also be a low-
income individual and be facing one or more of the following barriers 
to education and employment: Be basic skills deficient, as defined in 
WIOA sec. 144(a)(3)(A); be a high school dropout; be homeless, as 
defined in sec. 41043(6) of the Violence Against Women Act of 1994 (42 
U.S.C. 14043e-2(6)); be a homeless child or youth, as defined in sec. 
725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
1143a(2)); a runaway, an individual in foster care, or an individual 
who was in foster care and has aged out of the system; be a parent; or 
require additional education, career, and technical training, or 
workforce preparation skills in order to obtain and retain employment 
that leads to economic self-sufficiency.
    Proposed paragraph (b) implements the special eligibility rule for 
veterans in sec. 144(b) of WIOA. That rule states that an otherwise 
eligible veteran may still enroll in Job Corps if they do not meet the 
income requirement at Sec.  686.400(a)(2) as a result of military 
income earned within the 6-month period prior to the individual's 
application for Job Corps, per 38 U.S.C. 4213.
Section 686.410 Are there additional factors which are considered in 
selecting an eligible applicant for enrollment?
    In addition to the basic eligibility requirements identified above, 
proposed Sec.  686.410 lists several additional criteria that must be 
met before an otherwise eligible applicant may be enrolled in Job 
Corps.
    Proposed paragraph (a) provides, pursuant to sec. 145(a)(2)(C) of 
WIOA, that an otherwise eligible applicant can be selected for 
enrollment in Job Corps only if a determination is made, based on 
information relating to the background, needs and interests of the 
applicant, that the applicant's education and career and technical 
needs can best be met through the Job Corps program.
    An additional determination, as described in proposed paragraph 
(b), implementing sec. 145(b)(1)(A) of WIOA, must also be made that 
there is a reasonable expectation that the applicant can participate 
successfully in group situations and activities, and is not likely to: 
Engage in actions that would potentially prevent other students from 
receiving the benefit of the program; be incompatible with the 
maintenance of sound discipline; or impede satisfactory relationships 
between the center to which the student is assigned and the surrounding 
local communities. These requirements support the vision of Job Corps 
centers as safe environments with a culture that is conducive to 
student learning and achievement of the academic, technical, and social 
skills needed to obtain employment or enter post-secondary education.
    Proposed paragraph (c) requires that an applicant must also be made 
aware of and understand the center's rules, the consequences for 
failing to observe the rules, and agree to comply with the rules.
    Proposed paragraph (d) provides that no one will be denied 
enrollment in Job Corps solely on the basis of contact with the 
criminal justice system, except if the individual has been convicted of 
a felony consisting of murder, child abuse, or a crime involving rape 
or sexual assault, in accordance with secs. 145(b)(2) and (3) of WIOA. 
All applicants must also submit to a background check conducted 
according to procedures established by the Secretary and with 
applicable State and local laws. If the background check finds that the 
applicant is on probation, parole, under a suspended sentence, or under 
the supervision of any agency as a result of court action or 
institutionalization, the court or appropriate supervising agency may 
certify in writing that it will approve of the applicant's 
participation in Job Corps, and provide full release from its 
supervision, and that the applicant's participation and release does 
not violate applicable laws and regulations. However, the Department 
notes that although these individuals are eligible, the final admission 
decision remains with the Job Corps.
    Finally, proposed paragraph (e) requires that suitable arrangements 
be made for the care of any dependent children for the proposed period 
of enrollment.
Section 686.420 Are there any special requirements for enrollment 
related to the Military Selective Service Act?
    As required by WIOA sec. 146(a), this proposed section requires 
each male applicant 18 years of age or older, or a male student who 
turns 18 years of age, to present evidence that he has complied with 
sec. 3 of the Military Selective Service Act (50 U.S.C. App. 451 et 
seq.). These requirements are the same as those found at 20 CFR 
670.420.
Section 686.430 What entities conduct outreach and admissions 
activities for the Job Corps program?
    Proposed Sec.  686.430 states that the Secretary makes arrangements 
with outreach and admission agencies to perform Job Corps recruitment, 
screening and admissions functions according to standards and 
procedures issued by the Secretary. Entities eligible to receive funds 
to provide outreach and admissions service are identified in Sec.  
686.300(b).
Section 686.440 What are the responsibilities of outreach and 
admissions providers?
    Proposed paragraphs (a) and (b) of this section require outreach 
and admission providers to perform a number of tasks to recruit and 
enroll students, including completing all Job Corps application forms 
and determining whether the applicants meet the eligibility and 
selection criteria outlined for participation in the program as 
provided in proposed Sec. Sec.  686.400 and 686.410.
    Proposed paragraph (c) clarifies that the Secretary may require 
that the National Director or his or her designee make determinations 
with regard to one or more of the eligibility criteria.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.450.
Section 686.450 How are applicants who meet eligibility and selection 
criteria assigned to centers?
    In accordance with WIOA secs. 145(c) and (d), proposed Sec.  
686.450 describes the process for assigning applicants to Job Corps 
centers.
    Applicants who meet the eligibility and selection requirements of 
proposed Sec. Sec.  686.400 and 686.410 are assigned to a center based 
on an assignment plan developed by the Secretary based on an analysis 
of the factors described in proposed paragraph (a). These factors are 
specified in secs. 145(c) and (d) of WIOA. They are similar to the 
factors for the assignment plan required to be developed under WIA, 
except that sec. 145(c)(2)(D) of WIOA also requires the Secretary to 
consider the performance of the center, as described in proposed Sec.  
686.450(a).
    Proposed paragraph (b) describes the general rules for assignment 
of individual enrollees, consistent with sec. 145(d) of WIOA.
    In accordance with sec. 145(d)(2) of WIOA, and similar to the same 
requirement in WIA, proposed paragraph (c) mandates that if a parent or 
guardian objects to the assignment of

[[Page 20779]]

a student under the age of 18 to a center other than the center closest 
to home that offers the desired career and technical training, the 
Secretary must not make such an assignment.
Section 686.460 What restrictions are there on the assignment of 
eligible applicants for nonresidential enrollment in Job Corps?
    In accordance with WIOA sec. 147(c), this proposed section requires 
that no more than 20 percent of students enrolled in Job Corps 
nationwide may be nonresidential students.
Section 686.470 May an individual who is determined to be ineligible or 
an individual who is denied enrollment appeal that decision?
    Proposed Sec.  686.470(a) describes the process for an applicant to 
appeal a denial of their application.
    Proposed paragraph (b) states that if an applicant believes that he 
or she has been determined ineligible or not selected for enrollment in 
violation of the nondiscrimination and equal opportunity provisions 
contained in sec. 188 of WIOA and at 29 CFR part 37, the individual may 
file a complaint as described by the nondiscrimination regulations at 
29 CFR part 37. Finally, proposed paragraph (c) requires that an 
applicant denied enrollment be referred to the appropriate one-stop 
center or other service provider as appropriate.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.470.
Section 686.480 At what point is an applicant considered to be enrolled 
in Job Corps?
    Proposed Sec.  686.480 delineates when an applicant is considered 
to be enrolled in Job Corps and requires that, based on procedures 
issued by the Secretary, center operators must document the enrollment 
of new students.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.480.
Section 686.490 How long may a student be enrolled in Job Corps?
    This proposed section implements the requirements in sec. 146(b) of 
WIOA. Proposed paragraph (a) states the general rule that a student may 
remain enrolled in Job Corps for no more than 2 years.
    However, proposed paragraph (b) implements four exceptions to this 
rule, consistent with sec. 146(b) of WIOA, which permit the 2 years to 
be extended in specific cases. Paragraph (b)(1) permits the Secretary 
to extend the 2 year enrollment period in special cases, according to 
procedures issued by the Secretary. Paragraph (b)(2) permits up to a 1 
year extension of a student's enrollment in an advanced career training 
program in order to complete the program. Paragraph (b)(3) permits an 
extension for a student with a disability who would reasonably be 
expected to meet the standards for a Job Corps graduate if allowed to 
participate in the Job Corps for up to an additional year. Finally, 
proposed paragraph (b)(4) permits a student who participates in 
national service authorized by a CCC to have his or her enrollment 
extended for the amount of time equal to the period of national 
service. This paragraph (b)(4) implements sec. 146(a)(3) of WIOA. WIOA 
also states that students enrolled in CCCs may provide assistance in 
addressing national, State, and local disasters (sec. 147(d)(2) of 
WIOA; see proposed Sec.  686.610(a)). Both of these provisions are new 
in WIOA. Taken together, these provisions show WIOA's added attention 
to ensuring that Job Corps students in CCCs have the flexibility to 
provide assistance, such as fire-fighting, for example, when needed in 
a disaster. The Department notes that similar to the provision in 
proposed Sec.  686.490(b)(4) that addresses national service, the 
Secretary is authorized to extend the enrollment period for students 
who perform service to address State and local disasters or other needs 
under proposed Sec.  686.490(b)(1).
6. Subpart E--Program Activities and Center Operations
    This proposed subpart describes the services and training that a 
Job Corps center must provide. Job Corps distinguishes itself from 
other training programs by providing students with residential services 
in combination with hands-on training and experience aligned with 
industry standards. While education, training, and job placement are 
core components of what the program offers, this section of the 
regulations describes how Job Corps provides a comprehensive service 
model that also includes life skills, emotional development, personal 
management, and responsibility. New regulations addressing advanced 
career training programs are included; such programs provide broader 
opportunities for higher wages and career advancement.
    This proposed subpart also establishes the requirements for a 
student accountability system and behavior management system. Job 
Corps' policy for violence, drugs, and unauthorized goods is described. 
Requirements to ensure students are provided due process in 
disciplinary actions, to include center fact-finding and review board 
and appeal procedures are outlined. These systems and requirements 
serve to enhance the Job Corps program by ensuring that Job Corps 
centers are safe and secure environments that promote the education and 
training of students. Approved experimental, research and demonstration 
projects related to the Job Corps program are authorized in this 
proposed subpart, which also serves to enhance the program.
Section 686.500 What services must Job Corps centers provide?
    Proposed paragraph (a) specifies that Job Corps centers must 
provide an intensive, well-organized and fully supervised program, 
including training activities, work-based learning and experience, 
residential support services, and other services as required by the 
Secretary.
    Proposed paragraph (a)(1) describes training activities to include 
career and technical training, academic education, and employability 
and independent learning and living skills development. Job Corps is 
first and foremost a career training program, and an essential part of 
preparing enrollees for success upon exit necessitates providing 
employability, social, and independent-living skills.
    Proposed paragraph (b) provides that students must be provided with 
access to career services as described in WIOA secs. 134(c)(2)(A)(i) 
through (xi).
Section 686.505 What types of training must Job Corps centers provide?
    In order to provide enrollees with the intensive program of 
activities required by WIOA, several types of training must be provided 
by Job Corps centers.
    Proposed paragraph (a) requires that centers provide students with 
a CTT program that is aligned with industry-recognized standards and 
credentials. Ensuring that training programs are aligned with industry 
standards and credentials better prepares students to attain in-demand, 
long-term employment; further career enhancement along a career 
pathway; or advanced education, including apprenticeships.
    Proposed paragraph (b) requires that centers provide an education 
program, including English language acquisition programs, as required 
by sec. 148(a)(1) of WIOA, as well as high school diploma (HSD) or high 
school equivalency certification programs, and academic skills 
training. These skills are necessary for students to master

[[Page 20780]]

technical skills in their chosen CTT programs.
    Proposed paragraph (c) states that centers must provide programs 
for students to learn and practice employability and independent 
learning and living skills. These skills include: Job search and career 
development, interpersonal relations, driver's education (as required 
by sec. 148(a)(1) of WIOA), study and critical thinking skills, 
financial literacy and other skills specified in program guidance 
issued by the Secretary. Learning these skills will enable long-term 
labor market attachment and are critical to the continuing success of 
enrollees after leaving the Job Corps program.
    Proposed paragraph (d) requires all Job Corps training programs to 
be based on industry and academic skills standards leading to 
recognized industry and academic credentials, applying evidence-based 
instructional approaches, with the goal of placing students in 
unsubsidized employment in in-demand jobs with career advancement 
opportunities; enrollment in advanced education and training programs 
or apprenticeships; or enlistment in the Armed Forces. Responsiveness 
to employers' and industries' needs for employees who are prepared with 
the academic, technical, and employability skills necessary for career 
success is required in order to effectively place students and to 
sustain Job Corps' relationships with employers.
    Proposed paragraph (e) requires that specific career and technical 
training programs offered by individual centers must be approved by the 
Regional Director. Approval is necessary to ensure that the training 
provided by Job Corps meets industry workforce needs.
    Proposed paragraph (f) states the responsibilities of the center 
workforce council in shaping a center's career and technical training 
program, as described in Sec.  686.800.
    Proposed paragraph (g) retains the same requirements as those in 
the WIA regulations at 20 CFR 670.505(c), requiring that each center 
must implement a system to evaluate and track the progress and 
achievement of each student at regular intervals.
    Proposed paragraph (h) states that each center must develop a 
training plan that must be available for review and approval by the 
appropriate Regional Director. It retains the same requirements as 
those in 20 CFR 670.505(d).
Section 686.510 Are entities other than Job Corps center operators 
permitted to provide academic and career and technical training?
    Proposed paragraph (a) implements sec. 148(b) of WIOA, which lists 
the entities that the Secretary may use to provide career technical and 
academic education of Job Corps students, as long as the entity can 
provide education and training substantially equivalent in cost and 
quality to that which the Secretary could provide through other means.
    Proposed paragraph (b) states that these entities will be selected 
in accordance with the requirements of Sec.  686.310.
Section 686.515 What are advanced career training programs?
    Advanced career training provides students an opportunity to 
receive advanced education or training while still receiving the 
benefits and services provided by Job Corps. In order to be eligible, 
students must have a HSD or its equivalent and have completed a Job 
Corps CTT program. Proposed paragraphs (a) and (b) restate the 
requirements for advanced career training programs in secs. 148(c)(1)-
(2) of WIOA.
    Advanced career training programs are authorized by the Secretary 
based on the relationship between on board strength and training slot 
availability. Proposed paragraph (c), which restates the requirements 
found in WIOA sec. 148(c)(3), permits a center operator to enroll more 
students than otherwise authorized by the Secretary in an advanced 
career training program if, in accordance with standards developed by 
the Secretary, the operator demonstrates that participants in the 
program have achieved a satisfactory rate of training and placement in 
training-related jobs, and for the most recently preceding 2 PYs, the 
operator has, on average, met or exceeded the primary indicators for 
eligible youth described in Sec.  686.980.
Section 686.520 What responsibilities do the center operators have in 
managing work-based learning?
    This section retains the same requirements as those in the WIA 
regulations at 20 CFR 670.515. Proposed Sec.  686.520(a) requires that 
center operators emphasize and implement work-based learning programs 
for students through center program activities, including career and 
technical skills training, and through arrangements with employers. 
This paragraph further requires that work-based learning must be under 
actual working conditions and be designed to enhance the employability, 
responsibility, and confidence of the students. Work-based learning 
usually occurs in tandem with students' career and technical training, 
and is intended to develop a further understanding of career 
opportunities, employer expectations, and the impact of post-secondary 
education in the workplace. Work-based learning can include structured, 
hands-on experiences, as well as workplace tours, employer 
presentations, and job shadowing to help students refine their career 
objectives.
    Proposed paragraph (b), in accordance with sec. 159(g)(2) of WIOA, 
states that the center operator must ensure that the students are 
assigned only to workplaces that meet the safety standards described in 
Sec.  686.920.
Section 686.525 Are students permitted to hold jobs other than work-
based learning opportunities?
    Proposed Sec.  686.525 states that a center operator may authorize 
a student to participate in gainful leisure time employment, as long as 
the employment does not interfere with required scheduled academic and 
CTT activities. This section retains the same requirements as those in 
the WIA regulations at 20 CFR 670.520.
Section 686.530 What residential support services must Job Corps center 
operators provide?
    Proposed Sec.  686.530 states that Job Corps center operators must 
provide residential support services according to procedures issued by 
the Secretary. Residential support services are critical for the 
success of the Job Corps programs because they are central to creating 
and maintaining environments that allow enrollees to learn, practice 
independent and community living skills, promote personal 
responsibility, and reinforce social and employability skills, such as 
a positive attitude, dependability, and teamwork. This proposed section 
retains largely the same requirements as those contained in the WIA 
regulations at 20 CFR 670.525.
    The Department notes that one of the requirements is that a student 
leadership program and an elected student government is supported by 
the center operator. The goals of student leadership programs are to 
provide opportunities for interested students to develop leadership 
skills through participation in student governance, representing Job 
Corps in the community at large, planning and leading Job Corps events, 
and providing input and feedback for center

[[Page 20781]]

management decisions that impact student services and/or residential 
living.
Section 686.535 Are Job Corps centers required to maintain a student 
accountability system?
    Job Corps centers are required to maintain a student accountability 
system, as described at proposed Sec.  686.535. This proposed section 
retains the same requirements as those contained in the WIA regulations 
at 20 CFR 670.530. An accountability system is important to ensure the 
safety and security of Job Corps students and to track participation in 
various activities in order to evaluate program delivery.
Section 686.540 Are Job Corps centers required to establish behavior 
management systems?
    Proposed Sec.  686.540 states that each Job Corps center must 
establish and maintain a behavior management system, based on a 
behavior management plan, consistent with the standards of conduct and 
procedures established by the Secretary. The behavior management plan 
must be approved by the Job Corps regional office and reviewed 
annually. The system must include Job Corps' zero tolerance policy for 
violence and drugs as described in Sec.  686.545.
Section 686.545 What is Job Corps' zero tolerance policy?
    Proposed Sec.  686.545(a) requires all center operators to comply 
with Job Corps' zero tolerance policy as established by the Secretary. 
Infractions addressed in the zero tolerance policy must include, but 
are not limited to: Actions of violence, as defined by the Secretary; 
use, sale, or possession of a controlled substance, as defined at 21 
U.S.C. 802; abuse of alcohol; possession of unauthorized goods; or 
other illegal or disruptive activity.
    Proposed paragraph (b) implements secs. 145(a)(2)(A) and 152(b)(2) 
of WIOA, providing that all students must be tested for drugs as a 
condition of enrollment.
    Proposed paragraph (c) provides that the zero tolerance policy 
established by the Secretary specifies the offenses that will result in 
the separation of students from the Job Corps. This paragraph further 
provides that the center director is expressly responsible for 
determining when such an offense has occurred.
Section 686.550 How does Job Corps ensure that students receive due 
process in disciplinary actions?
    Proposed Sec.  686.550 provides that a center operator must ensure 
that all students receive due process in disciplinary proceedings 
according to procedures developed by the Secretary. This proposed 
section retains the same requirements as those contained in the WIA 
regulations at 20 CFR 670.545.
Section 686.555 What responsibilities do Job Corps centers have in 
assisting students with child care needs?
    Proposed Sec.  686.555 implements the requirement in sec. 148(e) of 
WIOA that the Secretary provide for child care to the extent 
practicable. Proposed paragraph (a) encourages Job Corps centers to 
coordinate with outreach and admissions agencies to assist applicants, 
whenever feasible, with making arrangements for child care. This 
paragraph also requires that, prior to enrollment, a program applicant 
with dependent children who provides primary or custodial care must 
certify that suitable arrangements for child care have been established 
for the proposed period of enrollment. This is necessary to ensure full 
program participation once a student is enrolled.
    Proposed paragraph (b) states that a child development program may 
be located at a Job Corps center with the approval of the Secretary.
Section 686.560 What are the center's responsibilities in ensuring that 
students' religious rights are respected?
    Proposed Sec.  686.560 retains the same requirements found in the 
WIA regulations at 20 CFR 670.555.
Section 686.565 Is Job Corps authorized to conduct pilot and 
demonstration projects?
    Proposed Sec.  686.565(a) establishes that the Secretary may 
undertake experimental, research and demonstration projects related to 
the Job Corps program as long as the projects are developed, approved, 
and conducted in accordance with the policies and procedures developed 
by the Secretary, in accordance with sec. 156(a) of WIOA.
7. Subpart F--Student Support
    Proposed subpart F discusses the support services provided to Job 
Corps enrollees, including transportation to and from Job Corps 
centers, authorized student leave, allowances and performance bonuses, 
and student clothing. In addition to being eligible to receive 
transportation to and from Job Corps centers, students are eligible for 
other benefits, including basic living allowances to cover personal 
expenses, in accordance with guidance issued by the Secretary. Students 
are also provided with a modest clothing allowance to enable them to 
purchase clothes that are appropriate for the classroom and the 
workplace. These proposed regulations again work to strengthen the Job 
Corps program and provide access to high quality training by ensuring 
that Job Corps students are placed in the best possible position to 
prepare them for learning, and that they are rewarded for their success 
in the program.
Section 686.600 Are students provided with government-paid 
transportation to and from Job Corps centers?
    Proposed Sec.  686.600 states that Job Corps provides students with 
transportation to and from Job Corps centers, according to policies and 
procedures established by the Secretary. This section retains the same 
requirements as those in the WIA regulations at 20 CFR 670.600.
Section 686.610 When are students authorized to take leaves of absence 
from their Job Corps centers?
    Proposed Sec.  686.610 provides that Job Corps students are 
eligible for annual leave, emergency leave, and other types of leaves 
of absence from their assigned centers. Procedures for requesting, 
approving, and recording student leave will be based on criteria and 
requirements issued by the Secretary. This section retains the same 
requirements found in the WIA regulations at 20 CFR 670.610. 
Additionally, proposed Sec.  686.600(a) states that in accordance with 
sec. 147(d)(2) of WIOA, enrollees in CCCs may take leave to provide 
assistance in addressing national, State, and local disasters.
Section 686.620 Are Job Corps students eligible to receive cash 
allowances and performance bonuses?
    Proposed Sec.  686.620(a) allows, based on criteria and rates 
established by the Secretary, Job Corps students to receive cash living 
allowances, performance bonuses, and allotments for care of dependents. 
Also, graduates receive post-separation transition allowances according 
to proposed Sec.  686.750. This paragraph largely retains the same 
requirements in the WIA regulations at 20 CFR 670.620(a), but revises 
the description of the payments to align with sec. 150(b) of WIOA.
    Under proposed paragraph (b), in the case of a student's death, any 
amount due is to be paid according to 5 U.S.C. 5582, governing issues 
including designation of a beneficiary, order of precedent, and related 
matters. This paragraph retains the same requirements as those found at 
20 CFR 670.620(b).

[[Page 20782]]

Section 686.630 Are student allowances subject to Federal payroll 
taxes?
    As required by sec. 157(a)(2) of WIOA, proposed Sec.  686.630 
requires that Job Corps student allowances be subject to Federal 
payroll tax withholding and Social Security taxes. For purposes of the 
Internal Revenue Code of 1986 and title II of the SSA (42 U.S.C. 401 et 
seq.), enrollees are deemed to be employees of the United States.
Section 686.640 Are students provided with clothing?
    Proposed Sec.  686.640 provides that, according to rates, criteria, 
and procedures issued by the Secretary, center operators and other 
service providers must provide Job Corps students with a clothing 
allowance and/or articles of clothing as needed to facilitate their 
participation in Job Corps and successful entry into the workforce. 
This proposed section retains the same requirements as those in the WIA 
regulations at 20 CFR 670.640.
8. Subpart G--Career Transition and Graduate Services
    This proposed subpart discusses career transition and graduate 
services for Job Corps enrollees. Job Corps focuses on placing program 
graduates in full time jobs, post-secondary education, advanced 
training programs, including apprenticeship programs, or the Armed 
Forces. In an effort to further integrate the Job Corps program with 
the greater workforce system and align it with the core programs, 
proposed Sec.  686.820 specifically focuses on how Job Corps will 
coordinate with other agencies, where emphasis is placed on utilizing 
the one-stop delivery system to the maximum extent practicable. This 
proposed subpart also outlines a center's responsibilities in preparing 
students for career transition services; the career transition services 
that are provided for enrollees; who m6ay provide career transition and 
graduate services, in addition to one-stop centers; and services 
provided for graduates and former enrollees.
Section 686.700 What are a Job Corps center's responsibilities in 
preparing students for career transition services?
    Proposed Sec.  686.700 implements sec. 149(a) of WIOA, providing 
that Job Corps centers assess and counsel enrollees to determine their 
competencies and capabilities and readiness for career transition 
services prior to their scheduled graduation. The purpose of counseling 
and assessment is to determine students' capabilities to allow them to 
either be placed into employment leading to self-sufficiency based on 
their training, or to assist the student in participating in further 
activities leading to the capabilities necessary for placement.
Section 686.710 What career transition services are provided for Job 
Corps enrollees?
    Proposed Sec.  686.710 implements sec. 149(b) of WIOA, requiring 
that career transition services focus on placing program graduates in 
full time jobs that are related to their career and technical training 
and that lead to economic self-sufficiency; higher education; advanced 
training programs, including apprenticeship programs; or the Armed 
Forces.
Section 686.720 Who provides career transition services?
    As required by sec. 149(b) of WIOA, proposed Sec.  686.720 states 
that the one-stop delivery system must be used to the maximum extent 
practicable in placing graduates and former enrollees in jobs. Multiple 
other resources can also provide post-program services, including, but 
not limited to, Job Corps career transition service providers and State 
VR agencies for individuals with disabilities.
Section 686.730 What are the responsibilities of career transition 
service providers?
    Proposed Sec.  686.730 contains the responsibilities of career 
transition service providers. The section largely retains the same 
requirements found in the WIA regulations at 20 CFR 670.730.
Section 686.740 What services are provided for program graduates?
    As required by sec. 148(d) of WIOA, proposed Sec.  686.740 states 
that career transition and support services must be provided to program 
graduates for up to 12 months after graduation, according to procedures 
issued by the Secretary.
Section 686.750 Are graduates provided with transition allowances?
    Proposed Sec.  686.750 states that Job Corps graduates receive 
post-separation transition allowances. As required by sec. 150(b) of 
WIOA, the transition allowance must be incentive-based to reflect a 
graduate's completion of academic, career, and technical education or 
training, and attainment of recognized post-secondary credentials.
Section 686.760 What services are provided to former enrollees?
    Proposed Sec.  686.760(a) implements sec. 150(c) of WIOA, allowing 
for the provision of 3 months of ESs to former enrollees.
    Proposed paragraph (b) states that Job Corps centers may provide 
other assessment, counseling, or career transition services to help 
former enrollees find and retain employment, if determined appropriate, 
according to procedures issued by the Secretary.
9. Subpart H--Community Connections
    This proposed subpart highlights WIOA's focus on community 
relationships and further integration with the workforce system. In 
both the new contracting provisions in proposed subpart C and in this 
subpart, there is more emphasis on connections with one-stops, Local 
Boards, and State and local plans. While WIA's requirement for a 
Business and Community Liaison has been eliminated, the responsibility 
for establishing beneficial business and community relationships and 
networks now lies with the director of each Job Corps center. Moreover, 
WIOA contains a new requirement that in a single-State local area, a 
representative of the State Board must be included on the workforce 
council. Proposed Sec.  686.810 also states, consistent with sec. 
154(b)(2) of WIOA, that the workforce council may include employers 
from outside the local area that are likely to hire center graduates. 
The new requirements for the workforce council seek to provide greater 
access to high quality training for Job Corps students, in part by 
ensuring that Job Corps is providing training in in-demand industry 
sectors and occupations.
Section 686.800 How do Job Corps centers and service providers become 
involved in their local communities?
    While WIA's requirement for a Business and Community Liaison 
designated by the director of each center has been eliminated, the 
director of each Job Corps center must still ensure that mutually 
beneficial business and community relationships and networks are 
established and developed. As required by sec. 153 of WIOA, proposed 
Sec.  686.800(a) states that each Job Corps center director must 
establish relationships with local and distant employers; applicable 
one-stop centers and Local Boards; entities carrying out relevant 
apprenticeship programs and youth programs; labor-management 
organizations and local labor organizations; employers and contractors 
that support national training programs and initiatives; and CBOs, non-
profit organizations, and intermediaries providing workforce 
development and support services. Through these relationships, Job 
Corps

[[Page 20783]]

hopes to improve the quality of the training programs that it offers 
and create meaningful associations with other entities with which it 
interacts and shares similar goals.
    Under proposed paragraph (b), each Job Corps center must also 
establish and develop relationships with members of the community in 
which it is located. This paragraph further proposes that members of 
the community be informed of projects of the center and changes in the 
rules, procedures, or activities of the center that may affect the 
community. Through these efforts, Job Corps aims to garner the support 
and endorsement of the local community.
Section 686.810 What is the makeup of a workforce council and what are 
its responsibilities?
    Section 154 of WIOA requires each center to establish a workforce 
council according to procedures established by the Secretary. Proposed 
Sec.  686.810 implements this provision. It specifies that the council 
must include: non-governmental and private sector employers; 
representatives of labor organizations and employees; Job Corps 
enrollees and graduates; and, in the case of a single State local area, 
a representative of the State Board.
    Proposed paragraph (b) describes the composition of the workforce 
council, consistent with the requirements of sec. 154(b) of WIOA.
    Proposed paragraph (c) states that the workforce council may also 
include, or otherwise provide for consultation with, employers from 
outside the local area who are likely to hire a significant number of 
enrollees from the Job Corps center.
    Proposed paragraph (d)(1) implements sec. 154(c)(1) of WIOA by 
identifying that the first responsibility of the workforce council is 
to work with all applicable Local Boards and review labor market 
information to determine and provide recommendations to the Secretary 
regarding the center's career and technical training offerings, 
including identifying the emerging occupations suitable for training. 
In doing so, Job Corps hopes to remain current in its CTT offerings, 
adjusting and supplementing its training offerings based on the needs 
of industry in the surrounding communities.
    Proposed Sec.  686.810(d)(2) and (3) state the remaining duties of 
the workforce council, in accordance with secs. 154(c)(2)-(3) of WIOA.
Section 686.820 How will Job Corps coordinate with other agencies?
    Proposed Sec.  686.820 describes how Job Corps coordinates with 
other agencies. This section retains the same requirements found in the 
WIA regulations at 20 CFR 670.760 and 20 CFR 670.800(g). Paragraph (b) 
of this section describes the linkages required between Job Corps and 
the one-stop service system and paragraph (c) indicates that Job Corps 
is identified as a required one-stop partner. The Department notes that 
in addition to these linkages, similar to the requirement in WIA, 
proposed Sec.  678.400 identifies Job Corps as a required one-stop 
partner, as required by sec. 121(b)(1)(B)(i) of WIOA. Additionally, 
similar to the WIA regulations at 20 CFR 670.800(g), proposed Sec.  
678.415 specifies that the Job Corps center is the Job Corps ``entity'' 
that is required to serve as the one-stop partner in any local area 
where a center exists. Job Corps centers are encouraged to review the 
requirements of one-stop partners described in subpart B of part 678 of 
these proposed regulations.
10. Subpart I--Administrative and Management Provisions
    The proposed subpart provides requirements relating to tort claims, 
Federal Employees Compensation Act (FECA) benefits for students, safety 
and health, and law enforcement jurisdiction on Job Corps center 
property. It also addresses whether Job Corp operators and service 
providers are authorized to pay State or local taxes on gross receipts, 
and details the financial management responsibilities of center 
operators and other service providers. The management of student 
records, as well as procedures applicable to the disclosure of 
information about Job Corps students and program activities are 
outlined. Finally, procedures available to resolve complaints and 
disputes, and how Job Corps ensures that complaints or disputes are 
resolved in a timely fashion, are addressed. The entirety of this 
proposed subpart addressing administrative and management principles 
that apply to the operation of the Job Corps program serves to promote 
its accountability and transparency.
Section 686.900 Are damages caused by the acts or omissions of students 
eligible for payment under the Federal Tort Claims Act?
    In accordance with sec. 157(a)(4) of WIOA, proposed Sec.  686.900 
states that students are considered Federal employees for purposes of 
the FTCA (28 U.S.C. 2671 et seq.) and that claims for such damage must 
be filed pursuant to the procedures found in 29 CFR part 15, subpart D. 
This proposed section retains the same requirements as those found in 
the WIA regulations at 20 CFR 670.900.
Section 686.905 Are loss and damages that occur to persons or personal 
property of students at Job Corps centers eligible for reimbursement?
    Proposed Sec.  686.905 states that the Job Corps program may pay 
students for valid claims under the procedures found in 29 CFR part 15, 
subpart D. This proposed section retains the same requirements found at 
20 CFR 670.905.
Section 686.910 If a student is injured in the performance of duty as a 
Job Corps student, what benefits may the student receive?
    Proposed Sec.  686.910 implements sec. 157(a)(3) of WIOA. Paragraph 
(a) states that Job Corps students are considered Federal employees for 
purposes of the FECA, as specified in sec. 157(a)(3) of WIOA (29 U.S.C. 
2897). Proposed paragraphs (b) through (d) outline the requirements for 
Job Corps students' eligibility for FECA benefits and the procedures by 
which the benefits are paid. These paragraphs contain the same 
requirements as those in Sec.  670.910 of the WIA regulations.
Section 686.915 When is a Job Corps student considered to be in the 
performance of duty?
    Proposed Sec.  686.915 outlines when a Job Corps student is 
considered to be in the performance of duty. This proposed section 
retains the same requirements as those found at 20 CFR 670.915.
Section 686.920 How are students protected from unsafe or unhealthy 
situations?
    Proposed Sec.  686.920(a) states that the Secretary will establish 
procedures to ensure that students are not required or permitted to 
work, be trained, reside in, or receive services in buildings or 
surroundings or under conditions that are unsanitary or hazardous. This 
section further states, consistent with sec. 159(g)(2) of WIOA, that 
whenever students are employed or in training for jobs, they must be 
assigned only to jobs or training which observe applicable Federal, 
State, and local health and safety standards. This proposed paragraph 
retains the same requirements found at 20 CFR 670.935.
    Proposed paragraph (b) states that the Secretary will develop 
procedures to ensure compliance with applicable DOL Occupational Safety 
and Health Administration (OSHA) regulations and Wage and Hour Division 
(WHD) regulations.

[[Page 20784]]

Section 686.925 What are the requirements for criminal law enforcement 
jurisdiction on center property?
    Proposed Sec.  686.925 provides information about criminal law 
enforcement jurisdiction on Job Corps center property. This proposed 
section retains the same requirements found in the WIA regulations at 
20 CFR 670.940.
Section 686.930 Are Job Corps operators and service providers 
authorized to pay State or local taxes on gross receipts?
    Consistent with sec. 158(d) of WIOA, proposed Sec.  686.930 
explains some of the tax liabilities that apply to Job Corps center 
operators.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.945.
Section 686.935 What are the financial management responsibilities of 
Job Corps center operators and other service providers?
    As required by WIOA sec. 159(a), proposed Sec.  686.935 states the 
financial management responsibilities that apply to Job Corps center 
operators and other service providers.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.950.
Section 686.940 Are center operators and service providers subject to 
Federal audits?
    As required by WIOA sec. 159(b), proposed Sec.  686.940 explains 
how Job Corps center operators and other service providers are subject 
to Federal audits.
    This proposed section retains the same requirements found in the 
WIA regulations at 20 CFR 670.955.
Section 686.945 What are the procedures for management of student 
records?
    Proposed Sec.  686.945 states that the Secretary will issue 
guidelines for a system for maintaining records for each student during 
enrollment and for disposition of records after separation. This 
proposed section retains the same requirements as those found at 20 CFR 
670.960.
Section 686.950 What procedures apply to disclosure of information 
about Job Corps students and program activities?
    Proposed Sec.  686.950 discusses the procedures that apply to 
disclosure of information about Job Corps students and program 
activities.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.965.
Section 686.955 What are the reporting requirements for center 
operators and operational support service providers?
    Proposed Sec.  686.955 states that the Secretary will establish 
procedures to ensure the timely and complete reporting of necessary 
financial and program information to maintain accountability. Under 
this section, center operators and operational support service 
providers are responsible for the accuracy and integrity of all reports 
and data they provide. This proposed section retains the same 
requirements as those found at 20 CFR 670.970.
Section 686.960 What procedures are available to resolve complaints and 
disputes?
    In support of the Department's commitment to ensuring that students 
are entitled to a fair process, proposed Sec.  686.960 outlines the 
procedures that are available to resolve student complaints and 
disputes. This section retains the same requirements found in the WIA 
regulations at 20 CFR 670.991.
Section 686.965 How does Job Corps ensure that complaints or disputes 
are resolved in a timely fashion?
    Proposed Sec.  686.965 outlines the procedures that are available 
to ensure timely resolution of a complaint or dispute. This section 
retains the same requirements as those found at 20 CFR 670.991.
Section 686.970 How does Job Corps ensure that centers or other service 
providers comply with the Act and the Workforce Innovation and 
Opportunity Act regulations?
    Proposed Sec.  686.970 explains the procedures Job Corps will use 
to ensure Job Corps center operators and other service providers comply 
with WIOA and this part. This proposed section retains the same 
requirements found in the WIA regulations at 20 CFR 670.992.
Section 686.975 How does Job Corps ensure that contract disputes will 
be resolved?
    Proposed Sec.  686.975 states that a dispute between the Department 
and a Job Corps contractor will be handled according to the Contract 
Disputes Act and applicable regulations. This proposed section retains 
the same requirements as those found at 20 CFR 670.993.
Section 686.980 How does Job Corps resolve disputes between the U.S. 
Department of Labor and the U.S. Department of Agriculture regarding 
the operation of Civilian Conservation Centers?
    Proposed Sec.  686.980 states that disputes between the Department 
and the U.S. Department of Agriculture regarding operating a center 
will be handled according to the interagency agreement between the two 
agencies. This proposed section retains the same requirements as those 
found at 20 CFR 670.994.
Section 686.985 What Department of Labor equal opportunity and 
nondiscrimination regulations apply to Job Corps?
    Proposed Sec.  686.985 states that nondiscrimination requirements, 
procedures, complaint processing, and compliance reviews would be 
governed by provisions of the Department's regulations, as applicable. 
This proposed section retains the same requirements found in the WIA 
regulations at 20 CFR 670.995.
11. Subpart J--Performance
    Proposed subpart J incorporates WIOA-specific requirements related 
to performance assessment and accountability, as well as requirements 
for performance improvement plans for Job Corps center operators who 
fail to meet expected levels of performance. The Job Corps program is 
now required to report on the performance indicators common to all WIOA 
programs that provide key employment information on how many students 
entered and retained employment, their median wages, whether they 
attained credentials, their measurable skills gains, and effectiveness 
of services to employers. The entirety of this proposed subpart serves 
to promote the accountability, performance, and transparency of the Job 
Corps program.
Section 686.1000 How is the performance of the Job Corps program 
assessed?
    Proposed Sec.  686.1000 describes the performance management system 
the Secretary will establish to meet the requirements for management 
information in sec. 159 of WIOA.
    Proposed paragraph (a) indicates that the performance of the Job 
Corps program as a whole, and the performance of individual centers, 
outreach and admission providers, and career transition service 
providers, will be assessed in accordance with required procedures and 
standards issued by the Secretary, through a national

[[Page 20785]]

performance management system described in proposed paragraph (b) that 
includes the Outcome Measurement System (OMS). The Department proposes 
to continue its use of a national performance management system that 
includes the OMS because such a system is needed to track and report 
all of the management information required in sec. 159 of WIOA. The 
management information requirements include establishing expected 
levels of performance and collecting and reporting data on each 
center's performance relating to the primary indicators of performance 
for eligible youth, the performance indicators for outreach and 
admission providers, and the performance indicators for career 
transition service providers required under WIOA sec. 159(c); 
collecting and reporting data on each center's performance relating to 
the additional information required to be submitted in the annual 
report to Congress under sec. 159(d) of WIOA; collecting and reporting 
information regarding the state of Job Corps buildings and facilities 
under sec. 159(h) of WIOA; and collecting and reporting information 
regarding national and community service activities of enrollees under 
sec. 159(i) of WIOA.
    Consistent with current practice, proposed paragraph (b) states 
that the performance management system will include measures that 
reflect not only the primary indicators of performance described in 
proposed Sec.  686.1010, but also the information needed to complete 
the Annual Report described in proposed Sec.  686.1040, as well as any 
other information the Secretary determines is necessary to manage and 
evaluate the effectiveness of the Job Corps program.
    Job Corps' performance management system, which includes the OMS, 
is a well-established measurement system within the Job Corps community 
that has been used to track performance of centers and service 
providers for many years. It will be updated to reflect the new 
requirements of WIOA, including the new primary indicators of 
performance. The performance management system is designed to provide 
the Secretary with the information necessary to manage and evaluate the 
effectiveness of the Job Corps program. It currently includes data on 
the WIA common measures, each center's success in filling student slots 
or on-board strength (OBS), information on the results of Regional 
Office Center Assessments, and the OMS.
    The OMS currently includes the following 15 measures: HSD or 
General Educational Development (GED) Attainment Rate, CTT Completion 
Rate, Combination HSD or GED, and CTT Attainment Rate, Average Literacy 
Gain, Average Numeracy Gain, CTT Industry-Recognized Credential 
Attainment Rate, CTT Completer Job-Training Match/Post-secondary Credit 
Placement Rate, Former Enrollee Initial Placement Rate, Graduate 
Initial Placement Rate, Graduate Average Hourly Wage at Placement, 
Graduate Full-Time Job Placement Rate, Graduate 6-Month Follow-up 
Placement Rate, Graduate 6-Month Average Weekly Earnings, Graduate 12-
Month Follow-up Placement Rate, and Graduate 12-Month Follow-up Weekly 
Earnings. These measures are based on the current performance 
requirements under WIA, and in some cases break down an overarching 
measure to provide a more detailed look at elements that make up the 
overarching measures. For example, one of the WIA common measures is 
the percent of students who achieve literacy or numeracy gains. In the 
OMS, literacy gains and numeracy gains are broken into two separate 
measures that provide program managers with an additional level of 
detail. A center may be achieving a high level of literacy gains but 
lagging in numeracy gains. In the combined measure that distinction 
would be hidden, but with the broken out measure, program managers can 
more specifically identify where to target interventions to support 
achievement of the overall common measure. Similarly, the OMS will be 
updated to reflect the primary indicators, but may also include 
breakouts of data that will help program managers target interventions 
in order to achieve the primary indicators.
    Four of the new primary indicators of performance under WIOA are 
long-term measures, meaning that the point of measurement is as much as 
a year after a student exits the Job Corps program. These measures are 
valuable in assessing the performance of the program, but additional 
shorter-term measures are needed to supplement the primary indicators 
and provide program managers with information on a quicker cycle that 
can be used to make adjustments in the program on a faster timeframe. 
This includes measures such as the CTT completion rate, which provides 
useful information about the quality of the training programs at a 
center without waiting for the student outcome data to become fully 
available. When updating the OMS, the Department will begin to 
incorporate the primary indicators and other measures that will drive 
the system towards attainment of the WIOA primary indicators, while 
still maintaining other shorter-term measures that will provide 
additional information that the Secretary believes is necessary to 
manage and evaluate the effectiveness of the Job Corps program. The 
Department welcomes comments on this approach, and specifically on 
which short-term measures should be maintained in the new OMS system.
    Over the years as program reporting requirements have changed from 
the Government Performance and Results Act (GPRA), the Program 
Assessment and Rating Tool (PART), and Common Measures, the OMS has 
proven to be flexible and through its mix of measures, goals, and 
weights, and successful in driving the system towards meeting changing 
priorities. For example, when additional emphasis was placed on longer 
term attachment to the workforce, Job Corps added 12-month placement 
and 12-month earnings to the existing line-up of measures included on 
the OMS as a clear indication to program operators of the new priority. 
Similarly, beginning in PY 2016, the OMS will be updated to reflect the 
new primary indicators of performance under WIOA.
    Proposed paragraph (b) also indicates that the Secretary will issue 
annual guidance describing the performance management system and OMS. 
This guidance will describe any changes or updates to the overall 
performance management system or the OMS and also communicate the 
expected levels of performance for each indicator for each center, 
outreach and admission provider, and career transition service provider 
described in Sec.  686.1030 to the system.
    Proposed Sec.  686.1000(c), implementing sec. 159(f)(1) of WIOA, 
indicates that annual performance assessments based on the measures 
referenced in proposed paragraph (b) will be done for each center 
operator and other service providers, including outreach and admission 
providers and career transition providers. These annual assessments 
will include a review of the data in the OMS, a calculation of the 
annual performance ranking as described in proposed Sec.  686.1070, and 
an analysis of the operator or service provider's success at meeting 
the expected levels of performance, including consideration of any 
factors influencing the performance outcomes such as disruption in the 
operations of the center, economic conditions, or other factors.

[[Page 20786]]

Section 686.1010 What are the primary indicators of performance for Job 
Corps centers and the Job Corps program?
    Proposed Sec.  686.1010 implements WIOA sec. 159(c)(1), which 
requires the use of the primary indicators of performance for eligible 
youth as described in sec. 116(b)(2)(A)(ii) of WIOA for the Job Corps 
program and each center. Proposed paragraphs (a) through (f) are the 
primary indicators of performance for eligible youth as described in 
sec. 116(b)(2)(A)(ii) of WIOA. These measures of performance are the 
same as the primary indicators discussed in proposed Sec.  677.155. 
Though the indicators of performance are identified in various places 
throughout the WIOA proposed regulations, the indicators are the same 
and do not vary across the regulations.
Section 686.1020 What are the indicators of performance for Job Corps 
outreach and admissions providers?
    Proposed Sec.  686.1020 implements sec. 159(c)(2) of WIOA, which 
requires that the Secretary establish performance indicators and 
expected levels of performance on those indicators for recruitment 
service providers serving the Job Corps program. The performance 
management system and OMS will be updated to reflect the new 
performance measures for Job Corps outreach and admissions providers. 
Proposed paragraphs (a) through (d) are the indicators of performance 
as provided in sec. 159(c)(2) of WIOA.
Section 686.1030 What are the indicators of performance for Job Corps 
career transition service providers?
    Proposed Sec.  686.1030 implements sec. 159(c)(3) of WIOA, which 
requires that the Secretary establish performance indicators and 
expected levels of performance on those indicators for career 
transition service providers serving the Job Corps program. The 
performance management system and OMS will be updated to reflect the 
new performance measures for Job Corps Career Transition Service 
providers. Proposed paragraphs (a) through (g) are the indicators of 
performance as provided in sec. 159(c)(3) of WIOA.
Section 686.1040 What information will be collected for use in the 
Annual Report?
    Proposed Sec.  686.1040 implements sec. 159(c)(4) of WIOA, which 
requires the Secretary to collect information and submit an Annual 
Report on the performance of each Job Corps center and the Job Corps 
program. The Department is including this proposed section so that the 
Job Corps community is made aware of the information that will be 
collected. Proposed paragraphs (a) through (p) specify the information 
required to be included by secs. 159(c)(4)(A)-(B) and 159(d)(1)(A)-(N) 
of WIOA. Proposed paragraph (q) reflects the information required to be 
included by sec. 159(h) of WIOA, and proposed paragraph (r) reflects 
the information required by sec. 159(i) of WIOA.
    Proposed paragraph (s) states that the Secretary may collect and 
include additional information in the Annual Report that the Secretary 
determines is necessary. Any such information would be collected as 
part of the performance management system and identified in the annual 
guidance described in Sec.  686.1000.
Section 686.1050 How are the expected levels of performance for Job 
Corps centers, outreach and admission providers and career transition 
service providers established?
    Proposed Sec.  686.1050(a) implements secs. 159(c)(1)-(3) of WIOA, 
which require that the Secretary establish expected levels of 
performance for Job Corps centers, outreach and admission providers, 
and career transition service providers, and the Job Corps program 
relating to each of the primary indicators of performance described in 
Sec. Sec.  686.1010, 686.1020 and 686.1030. In order to develop 
expected levels of performance for the primary indicators, the 
Department will first examine past performance specific to the new 
measures. Since several of the employment-related indicators are 
intended to utilize State wage records, this will involve a process of 
developing quarterly earnings specifications as well as developing an 
infrastructure to align WRIS data with Job Corps survey data at the 
center level. Expected levels of performance can more readily be 
developed for the credential attainment and skill gains indicators 
using past performance aligned to the timeframes required by WIOA. Job 
Corps will also continue to use a regression model to statistically 
adjust for local economic conditions and participant characteristics at 
the center level similar to regression models used for other programs 
under WIOA. The Department anticipates that after implementation of the 
new primary indicators, there will be a period of at least 1 PY where 
baseline data are collected on each of the primary indicators and there 
is no expected level of performance in place. Once baseline data has 
been collected, the Department will begin to establish expected levels 
of performance.
    Proposed paragraph (b) states that as provided in Sec.  686.1000, 
the Secretary will issue annual guidance describing the national 
performance management system. This guidance will also communicate the 
expected levels of performance for each center and each indicator of 
performance for each outreach and admissions provider and each career 
transition service provider. This guidance will also describe how the 
expected levels of performance were calculated.
Section 686.1070 How are center rankings established?
    Proposed Sec.  686.1070(a) states that the Secretary will calculate 
the annual rankings of center performance based on the performance 
management system described in proposed Sec.  686.1000. As described 
above in the explanation of proposed Sec.  686.1000, Job Corps' OMS is 
a well-established measurement system within the Job Corps community 
that has been used to track performance of centers and service 
providers for many years, and it will be updated to reflect the new 
requirements of WIOA, including the new primary indicators of 
performance. It is designed to drive the system to meet programmatic 
goals, which under WIOA will be established through the primary 
indicators of performance. As described above, the OMS will be updated 
to reflect the primary indicators of performance and may also include 
other measures that will drive the system towards attainment of the 
primary indicators or that provide more detailed information about 
elements that make up the primary indictors that the Secretary believes 
are necessary to manage and evaluate the effectiveness of the Job Corps 
program.
    Proposed Sec.  686.1070(b) states that the Secretary will issue 
annual guidance that communicates the methodology for calculating the 
performance rankings for the year. This guidance will include any 
changes in the weighting of individual measures in the calculation. The 
Department expects to weigh measures reflecting the attainment of the 
primary indicators most heavily. However, the Department anticipates 
that there could be changes in weighting from year to year to address 
areas of concentration in the program. For example, if the Department's 
analysis of past years' data regarding the system's results on the 
primary indicator related to measurable skills gains indicates that 
students are achieving high levels of literacy gains but lagging on 
numeracy gains, the Department may increase the weighting of the OMS 
measure on numeracy gains to signal to operators that they need to put 
more emphasis on improving numeracy. The expected result would

[[Page 20787]]

be that the increased focus on numeracy would lead to improved numeracy 
gains and a commensurate increase in the primary indicator related to 
measurable skills gains. The center rankings will reflect these efforts 
to push the system to continuous improvement of outcomes.
Section 686.1070 How and when will the Secretary use Performance 
Improvement Plans?
    Proposed Sec.  686.1070 implements sec. 159(f)(2) of WIOA, which 
sets out requirements for the circumstances under which the Secretary 
will use Performance Improvement Plans.
    Proposed paragraph (a) provides that the Secretary will establish 
standards and procedures for developing and implementing performance 
improvement plans. Paragraph (a)(1) implements the requirement in sec. 
159(f)(2) of WIOA, that when a center fails to meet expected levels of 
performance, the Secretary must develop and implement a performance 
improvement plan designed to help the center improve its performance 
outcomes. Paragraph (a)(1)(i) establishes standards for when the 
Secretary will consider a center to have failed to meet the expected 
levels of performance on the primary indicators. The proposed paragraph 
states that a center will have failed to meet the expected levels of 
performance if the center is ranked among the lowest 10 percent of Job 
Corps centers and the center fails to achieve an average of 90 percent 
of the expected level of performance for all of the primary indicators. 
This is consistent with the methodology used to determine whether 
States have failed to meet the expected levels of performance on other 
programs under WIOA. Proposed paragraph (a)(1)(ii) establishes 
standards for when the Secretary will consider a center to have failed 
to meet the expected levels of performance on the primary indicators 
for PYs that occur prior to the implementation of the expected levels 
of performance on the primary indicators. The paragraph states that a 
center will have failed to meet the expected levels of performance if 
it is ranked among the lowest 10 percent of Job Corps centers and the 
center's composite OMS score for the PY is 88 percent or less of the 
year's OMS national average. This proposal is consistent with the Job 
Corps Performance Improvement Plan system planned for implementation in 
early 2015.
    Proposed paragraph (a)(2) implements sec. 159(f)(3) of WIOA, which 
states that the Secretary may also develop and implement additional 
performance improvement plans that will require improvements for a Job 
Corps center that fails to meet criteria established by the Secretary 
other than the expected levels of performance. The Department expects 
to outline requirements for any such plans through subsequent guidance.
    Proposed paragraph (b) implements the requirement in sec. 159(f)(2) 
of WIOA that the performance improvement plan require that action under 
the plan must be taken within 1 year of its implementation to address 
the issues that led to the center's failure to meet its expected levels 
of performance. The paragraph states that the plan will identify 
criteria that must be met for the center to complete the performance 
improvement plan. In addition, paragraph (b)(1) provides that the 
center operator must implement the actions outlined in the performance 
improvement plan. Proposed paragraph (b)(2) provides that if the center 
fails to take the steps outlined in the performance improvement plan or 
fails to meet the criteria established to complete the performance 
improvement plan after 1 year, the center will be considered to have 
failed to improve performance under a performance improvement plan 
detailed in paragraph (a). In that case, the center will remain on a 
performance improvement plan and the Secretary will take action as 
described in proposed paragraph (c). Paragraph (b)(2)(ii) implements 
sec. 159(f)(4) of WIOA, which provides that if a CCC fails to meet 
expected levels of performance relating to the primary indicators of 
performance specified in proposed Sec.  686.1010, or fails to improve 
performance under a performance improvement plan detailed in paragraph 
(a) after 3 PYs, the Secretary, in consultation with the Secretary of 
Agriculture, must select an entity to operate the CCC on a competitive 
basis. Such competition will be held in accordance with the 
requirements at proposed Sec.  686.310.
    Proposed paragraph (c) implements secs. 159(f)(2)(A) through 
159(f)(2)(G) of WIOA, which permit the Secretary to take specific 
actions to improve the performance of a center, as necessary. These 
requirements are taken directly from the statute and this proposed 
paragraph retains the same requirements as those in the WIA regulations 
at 20 CFR 670.985. The Department notes that nothing in the statute or 
in these proposed regulations requires that the performance improvement 
actions be taken in any particular order or on a progressive basis. The 
Secretary will take any of the measures listed in sec. 159(f)(2) of 
WIOA that will lead to improving performance of a center. Among these 
measures, the Secretary also reserves the right to close low-performing 
centers, pursuant to WIOA sec. 159(f)(2)(G).

K. Part 687--National Dislocated Worker Grants

    Proposed part 687 implements provisions in sec. 170 of WIOA that 
authorize the Secretary to award discretionary funds to serve 
dislocated workers and other eligible individuals affected by major 
economic dislocations, emergencies, or disasters. The proposed 
regulations set forth the key elements and requirements for the 
statute's NDWGs. Additional guidance on NDWGs and the application 
requirements for these grants will be published separately.
    The proposed regulations establish a framework that will enable 
eligible applicants to apply quickly for grants to relieve the impact 
of layoffs, emergencies, and disasters on employment in the impacted 
area and to meet the training and reemployment needs of affected 
workers and to enable them to obtain new jobs as quickly as possible. 
The proposed regulations call for early assessment of the needs and 
interests of the affected workers, through either rapid response 
activities, or other means, as well as an indication of the other 
resources available to meet these needs, to aid in the creation of a 
customer-centered service proposal. The early collection of information 
about affected workers will allow applicants to have an understanding 
of the needs and interests of the impacted workers to enable a prompt 
application for the appropriate level of NDWG funds. Early collection 
of information also will facilitate the receipt of NDWG funds when the 
Secretary determines that there are insufficient State and local 
formula funds available. Early intervention to assist workers being 
dislocated is critical to enable them to access work-based learning 
opportunities and other types of training that lead to industry-
recognized credentials, as appropriate, to help them find new 
employment in in-demand industries and occupations as soon as possible 
after their dislocation occurs.
Section 687.100 What are the types and purposes of national disclosed 
worker grants the Workforce Innovation and Opportunity Act?
    Proposed Sec.  687.100 describes the purpose of NDWGs, expanding 
upon the description provided in the WIA regulations at 20 CFR 671.100. 
Regular NDWGs provide career services for dislocated workers and other 
eligible

[[Page 20788]]

populations where demand is unable to be met with formula funds or 
other sources. Disaster NDWGs, which were originally authorized under 
WIA to conduct clean-up and humanitarian assistance, are still 
authorized under WIOA; however, WIOA expands their availability by 
adding new qualifying events for Disaster NDWGs, such as serving 
workers who have relocated from an area in which a disaster has been 
declared, as discussed in Sec. Sec.  687.110(b) and 687.180(b).
Section 687.110 What are major economic dislocations or other events 
which may qualify for a national dislocated worker grant?
    Proposed Sec.  687.110 describes the events that qualify for NDWG 
funding. Proposed Sec.  687.110(a)(1) through (3) include substantially 
similar provisions to those that were contained in the WIA regulations; 
however, the terms ``single site of employment'' and ``in a single 
local community,'' which had been used to qualify the types of eligible 
layoff events, are not included in the proposed section. Experience 
under WIA has shown that a company's total number of layoffs affects 
the local and regional economy in the same way without regard to 
whether the layoffs occur at a single facility or at multiple 
locations. Proposed Sec.  687.110(a)(4) describes a qualifying event 
added by sec. 170(b)(1)(D)(i) of WIOA, permitting the award of a NDWG 
when a higher than average demand for employment and training 
activities for dislocated members of the Armed Forces, dislocated 
spouses of members of the Armed Forces on active duty (as defined in 10 
U.S.C. 101(d)(1)), or members of the Armed Forces described in proposed 
Sec.  687.170(a)(1)(iii), exceeds State and local resources. Section 
170(b)(1)(D)(i) of WIOA specifically limits the military spouses 
included in this analysis to ``spouses described in sec. 3(15)(E) [of 
WIOA].'' Under sec. 3(15)(E) of WIOA, these are spouses of members of 
the Armed Forces on active duty who are dislocated specifically because 
they have experienced a loss of employment as a direct result of 
relocation to accommodate a permanent change in duty station of the 
member of the military, or are unemployed or underemployed and 
experiencing difficulty in obtaining or upgrading employment. 
Implementing this exactly as stated in the statute would require 
applicants for these NDWGs to determine whether a specific subset of 
dislocated military spouses is driving the higher than average demand 
for services in an area. This would cause an unnecessary burden on the 
NDWG applicants, and instead proposed Sec.  687.110(a)(4) would only 
require applicants for these NDWGs to assess whether military spouses 
who are dislocated under any of the factors in sec. 3(15) of WIOA are 
contributing to the higher than average demand for services. The 
proposed provision also specifies that these spouses must be spouses of 
members of the Armed Forces on active duty, which implements the intent 
of this provision of WIOA while avoiding the unnecessary administrative 
hardship. The Department intends to provide additional guidance about 
how higher than average demand will be defined for purposes of this 
section. The Department is exploring definitions that may include 
veterans' unemployment in excess of the State's unemployment rate, 
Unemployment Compensation for Ex-service members (UCX) data, and other 
similar administrative data sources. The Department invites comments 
about the usefulness of relying on these and other data sources in 
determining how higher than average demand should be defined. Proposed 
Sec.  687.110(a)(5) maintains the prerogative of the Secretary of Labor 
to provide NDWG funding for other events.
    Proposed Sec.  687.110(b) describes qualifying events for Disaster 
NDWGs. Proposed Sec.  687.110(b)(1) provides, similar to the WIA 
regulation at 20 CFR 671.110(e), that disasters declared eligible for 
public assistance under the Stafford Act are qualifying events for 
Disaster NDWGs. The proposed paragraph also makes clear that outlying 
areas and tribal areas that receive a public assistance declaration 
also are eligible to apply for a Disaster NDWG. This is consistent with 
the intent and purpose of sec. 170 of WIOA, because these entities are 
both eligible for dislocated worker grants under WIOA and are eligible 
for public assistance under the Stafford Act. Therefore, it is logical 
that they would be eligible for Disaster NDWGs.
    Proposed Sec.  687.110(b)(2) and (3) describe the new events that 
WIOA establishes are qualifying events for Disaster NDWGs. As stated in 
sec. 170(a)(1)(B) of WIOA, eligible events for Disaster NDWGs now 
include an emergency or disaster situation of national significance 
that could result in a potentially large loss of employment, as 
recognized by the chief official of a Federal agency that has authority 
or jurisdiction over the Federal response for the emergency or disaster 
situation. Although such an event might not meet the requirements to 
receive a public assistance declaration from the FEMA, it still may be 
an event where NDWG funding may be needed. NDWGs may be provided in 
this instance for activities that are determined to be appropriate by 
the Secretary. Proposed paragraph (b)(3) addresses situations where a 
substantial number of workers from a State, tribal area, or outlying 
area in which an emergency or disaster has occurred relocate to another 
State, tribal area, or outlying area. This would also be a qualifying 
event for a Disaster NDWG, according to secs. 170(b)(1)(B)(ii) and 
(d)(4) of WIOA. The addition of this type of event was informed by the 
mass evacuations that took place as a result of Hurricane Katrina, 
which caused massive flooding and damage along the Gulf Coast in 2005, 
resulting in evacuees settling in high concentrations in some other 
communities.
Section 687.120 Who is eligible to apply for national dislocated worker 
grants?
    Proposed Sec.  687.120 identifies which entities are eligible to 
apply for NDWGs. Proposed Sec.  687.120(a) and (b) retain essentially 
the same requirements as in Sec.  671.120 of the WIA regulations, but 
these proposed regulations clearly identify which entities may apply 
for Regular NDWGs and which may apply for Disaster NDWGs. Unlike Sec.  
671.120(b), proposed Sec.  687.120 does not include a statement 
concerning the ability of private entities to apply for NDWGs for 
interstate projects, because sec. 170(c)(1)(B) of WIOA and proposed 
Sec.  687.120(a)(5) provide for such applications. The proposed 
language, in contrast to its WIA counterpart, does not distinguish 
between interstate and intrastate projects, because from the 
Department's perspective the grantee/grantor relationship is between 
the Department and a single entity. In proposed Sec.  687.120(a), the 
Department has specified that outlying areas, in addition to States, 
may apply for Regular NDWGs. In proposed Sec.  687.120(b), the 
Department has specified that outlying areas and Indian tribal 
governments as defined by the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, in addition to States, may apply for Disaster 
NDWGs.
Section 687.130 When should applications for national dislocated worker 
grants be submitted to the Department?
    Proposed Sec.  687.130 describes when applications for NDWGs may be 
submitted and retains many of the requirements found in the WIA 
regulations at 20 CFR 671.130. However, there are some key differences 
in the proposed regulations. Proposed Sec.  687.130(a) identifies the 
conditions

[[Page 20789]]

applicable to Regular NDWGs and underscores the importance that 
applications for Regular NDWGs must be submitted as soon as possible 
after the eligibility criteria are met and the necessary information to 
apply is available to the applicant. Timely submissions that comply 
with the requirements will help ensure that the needed resources are 
provided expediently.
    Proposed Sec.  687.130(b) identifies the conditions applicable to 
Disaster NDWGs and underscores the importance that applications for 
Disaster NDWGs must be submitted as soon as possible. Proposed Sec.  
687.130(b)(1) through (3) identify the events that trigger applications 
for Disaster NDWGs, and also emphasize the importance of submitting 
applications as soon as possible after the appropriate declarations or 
determinations have been made.
Section 687.140 What activities are applicants expected to conduct 
before a national dislocated worker grant application is submitted?
    Proposed Sec.  687.140 describes the activities to be conducted 
before an application for a NDWG is submitted. Proposed Sec.  
687.140(a) expands on the requirements found in the WIA regulations at 
20 CFR 671.160. The proposed language, based in part on the 
Department's experience under WIA, requires applicants to identify the 
needs of the affected workers, and their interest in receiving 
services, either through Rapid Response activities or other means. 
Under WIA, the Department learned that some individuals who could have 
benefited from receiving ESs under a National Emergency Grant (NEG) 
ended up not being interested in receiving them. For example, some 
individuals chose to opt out of receiving services because they 
believed their previous employer was going to call them back to work, 
while others chose to forgo receiving employment and training services 
in order to find new employment on their own. The Department has found 
that the lack of information on needs and interest of affected workers 
have significantly impacted participant enrollment rates in the past, 
and in some cases, resulted in the return of funds outside the 
timeframe allowed for the funds to be obligated for other grants. 
Further, the proposed language expands the allowable data gathering 
methods that may be used, so that applicants are no longer limited to 
using only data obtained via Rapid Response interventions. This change 
allows for greater flexibility in obtaining this critical data.
    Proposed Sec.  687.140(b)(1) makes it clear that applicants for 
Disaster NDWGs must conduct a preliminary assessment of the clean-up 
and humanitarian needs in the affected areas. Proposed Sec.  
687.140(b)(2) requires applicants to have a mechanism in place to 
ascertain reasonably that there is a sufficient population of eligible 
individuals in the area and, if needed, eligible individuals outside 
the area to conduct the planned clean-up and humanitarian work. Under 
WIA, there were a few instances where after NEGs were issued, a State 
was unable to conduct the work it had planned because it was unable to 
find eligible individuals to do the work. The Department recognizes 
that in the immediate aftermath of a disaster it is difficult to 
conduct a thorough assessment of the number of individuals that could 
be eligible to conduct the planned work. While the Department's 
proposed approach allows flexibility, it also ensures there is a 
process in place so that reasonable estimates of potential participant 
availability are made prior to submitting the application, so that the 
proper amount of funding may be provided.
Section 687.150 What are the requirements for submitting applications 
for national dislocated worker grants?
    Proposed Sec.  687.150 explains that the Department will publish 
additional guidance on the requirements for submitting NDWG 
applications. A similar approach was taken in the WIA regulations. 
Unlike the WIA regulations, however, the proposed section requires that 
a project implementation plan, which is currently required for all 
NEGs, be submitted post NDWG award. Under WIA, this requirement is 
included only in guidance. The project implementation plan includes 
more detailed information about project operations than is required for 
the initial application. This information allows the Department to 
provide grantees with targeted technical assistance, and to exercise 
appropriate oversight and monitoring over the NDWG award. Additional 
information on what must be included in the project implementation 
plan, and the process for submitting it, will be included in future 
guidance.
Section 687.160 What is the timeframe for the Department to issue 
decisions on national dislocated worker grant applications?
    Proposed Sec.  687.160 implements sec. 170(b)(2) of WIOA, which 
establishes a 45-day timeframe for issuing determinations on NDWG 
applications. The proposed paragraph makes it clear that final 
decisions on NDWG applications will be issued within 45 calendar days 
of receiving an application that meets the requirements. Applicants are 
encouraged to engage the appropriate Regional Office so that timely 
technical assistance can be provided when developing NDWG applications 
to help ensure that the information provided in the application is 
sufficient.


Sec.  687.170  Who is eligible to be served under national dislocated 
worker grants?

    Proposed Sec.  687.170 provides information on participant 
eligibility for NDWGs, distinguishing between individuals who may be 
served under Regular NDWGs and those who may be served under Disaster 
NDWGs. In the WIA regulations at Sec.  671.140, participant eligibility 
and allowable activities were included in the same section; these two 
topics are being addressed separately in proposed Sec. Sec.  687.170 
and 687.180 for clarity. Proposed Sec.  687.170(a) lists the specific 
populations that are eligible to be served under Regular NDWGs. This 
paragraph retains the provision from the WIA regulations at 20 CFR 
671.140(a) that dislocated workers may be served. However, as discussed 
below, the definition of a dislocated worker was expanded under WIOA, 
thereby expanding the population that can be served with NDWGs.
    Section 3(15)(E)(i)-(ii) of WIOA includes certain spouses of 
members of the Armed Forces on active duty in the definition of 
``dislocated worker.'' These spouses are considered dislocated workers, 
and therefore eligible for services under NDWGs, if they: (1) Have 
experienced a loss of employment as a direct result of relocation to 
accommodate a permanent change in duty station of the member of the 
Armed Forces; or, (2) are unemployed or underemployed and experiencing 
difficulty obtaining or upgrading employment.
    WIOA also expanded upon the definition of a ``displaced 
homemaker,'' recognized under both WIA and WIOA as a type of dislocated 
worker. Under sec. 3(16)(A)(ii) of WIOA, the definition of a displaced 
homemaker now explicitly includes a person who is a dependent spouse of 
a member of the

[[Page 20790]]

Armed Forces on active duty whose family income is significantly 
reduced because of a deployment, a call or order to active duty, a 
permanent change of station, or the service-connected death or 
disability of the member, and who is unemployed or underemployed and is 
experiencing difficulty in obtaining or upgrading employment. In 
addition to the expanded dislocated worker definition covering 
additional military spouses, dislocated members of the Armed Forces and 
other dislocated military spouses continue to be included in the 
definition of ``dislocated workers'' and therefore continue to be 
eligible for services under NDWGs, just as they were under WIA NEGs. 
Finally, sec. 170(c)(2)(A)(iv) of WIOA retains the eligibility 
provision found at sec. 173(c)(2)(iv) of WIA that members of the Armed 
Forces who were on active duty or full-time National Guard duty who 
meet other specific requirements are an eligible population. These 
members of the Armed Forces and the requirements are specifically 
described in proposed Sec.  687.170(a)(1)(iii).
    As discussed earlier in this preamble, WIOA states that dislocated 
members of the Armed Forces, members of the Armed Forces described in 
proposed Sec.  687.170(a)(1)(iii), and dislocated spouses of members of 
the Armed Forces on active duty may be served with NDWGs when there is 
a higher than average demand for employment and training activities 
from this population that exceeds State and local resources to provide 
them.
    Proposed Sec.  687.170(b)(1) retains many of the participant 
eligibility requirements for Disaster NEGs found in the WIA regulations 
at Sec.  671.140(d), and also includes a new population authorized 
under sec. 170(d)(2)(D) of WIOA--individuals who were self-employed, 
but become unemployed or significantly underemployed as a result of the 
emergency or disaster. Proposed Sec.  687.170(b)(2) implements sec. 
170(b)(1)(B)(ii) of WIOA, discussed in proposed Sec.  687.110(b)(3), 
which authorizes NDWG assistance for individuals who have relocated to 
another State, tribal area, or outlying area as a result of the 
disaster. This paragraph lists the relocated individuals who are 
eligible for assistance under these type of NDWGs, and also notes that 
in rare instances, humanitarian-related temporary employment will be 
available in the relocation areas. This is further discussed in 
proposed Sec.  687.180(b)(2) and the corresponding preamble language. 
In those cases, the relocated individuals listed in proposed Sec.  
687.170(b)(2) would be eligible for that work.
Section 687.180 What are the allowable activities under national 
dislocated worker grants?
    Proposed Sec.  687.180 provides information on allowable 
activities; first, those allowable under Regular NDWGs; second, those 
allowable under Disaster NDWGs. Proposed Sec.  687.180(a) lists the 
allowable activities for Regular NDWGs. These activities are 
essentially the same as those reflected in the WIA regulations at 20 
CFR 671.140; however, consistent with WIOA, references to core, 
intensive, and training services have been changed to refer to career 
services. Additionally, the reference to trade-impacted workers under 
the NAFTA-TAA program contained in 20 CFR 671.140(c)(2) is not included 
in the proposed paragraph, since the NAFTA-TAA program no longer 
exists.
    Proposed Sec.  687.180(b) lists the allowable activities for 
Disaster NDWGs. Proposed Sec.  687.180(b)(1) uses the same language as 
in the WIA regulations at 20 CFR 671.140(e), which authorizes temporary 
employment for humanitarian assistance and clean-up and repair of 
facilities and lands within the disaster area for which a Disaster NDWG 
is issued. This proposed paragraph also implements sec. 170(d)(1)(A) of 
WIOA, which requires coordination with FEMA and permits these 
activities to be performed in offshore areas related to the emergency 
or disaster. The addition of the language on offshore areas was 
informed by the Deepwater Horizon Oil Spill; the proposed paragraph 
allows clean-up and humanitarian assistance activities to take place 
beyond the land surface of the disaster area.
    Proposed Sec.  687.180(b)(1) implements sec. 170(d)(3) of WIOA; 
this paragraph allows employment of up to 12 months in the temporary 
jobs created under Disaster NDWGs, with the potential for an additional 
12 months with Secretarial approval. Under sec. 173(d)(3) of WIA, only 
6 months of disaster relief employment was allowed. Proposed Sec.  
687.180(b)(1) identifies employment and training activities as 
allowable under Disaster NDWGs. While the WIA regulations contained a 
comparable provision, individuals were only allowed to participate in 
employment and training services after they had completed the disaster 
relief employment component of the project. The proposed paragraph 
allows individuals enrolled in disaster relief employment under 
Disaster NDWGs to receive concurrent career and training services, as 
well as upon completion. Feedback received from grantees over the years 
demonstrates that individuals involved in clean-up and humanitarian 
assistance benefit from the opportunity to receive employment and 
training services. These services will help to improve the skills of 
these individuals and enhance their chances of obtaining employment 
once the temporary disaster relief employment is completed. However, 
because the primary purpose of Disaster NDWGs is to perform clean-up 
and humanitarian assistance, the Department will issue further guidance 
about the specific requirements regarding concurrent participation in 
career services.
    Proposed Sec.  687.180(b)(2) implements sec. 170(b)(1)(B)(ii) of 
WIOA, discussed in proposed Sec.  687.110(b)(3), which makes 
individuals who have relocated to another State, tribal area, or 
outlying area as a result of a disaster eligible to receive services. 
Proposed Sec.  687.180(b)(2) recognizes that although these individuals 
are eligible for temporary disaster relief employment, their 
employment, by virtue of their relocation, will most likely be limited 
to humanitarian work (if those services are warranted). If individuals 
relocate outside of the disaster area, they will most likely not be in 
the impacted geographic area to conduct clean-up work. It is the 
Department's expectation that, except in rare circumstances, the 
services provided to relocated individuals will be limited to career 
services.
    Proposed Sec.  687.180(b)(3), consistent with secs. 170(a)(1)(A)-
(B) of WIOA, authorizes career services and/or disaster relief 
employment both where recognized by FEMA, or by another Federal agency. 
Under sec. 173(a)(2) of WIA and the WIA regulations at 20 CFR 
671.110(e) and 671.130(c), NEGs were only available where FEMA declared 
an area eligible for disaster-related public assistance.
    Proposed Sec.  687.180(b)(4) implements sec. 170(d)(1)(B) of WIOA, 
which states that disaster NDWG funds may be expended through public 
and private agencies and organizations that are engaged in disaster 
relief and humanitarian assistance projects.
Section 687.190 How do statutory and regulatory waivers apply to 
national dislocated worker grants?
    Proposed Sec.  687.190 describes how statutory and regulatory 
waivers apply to NDWGs. To improve a grantee's ability to serve 
participants, or increase the effectiveness of NDWG projects, the 
Department may grant waivers to many statutory and regulatory 
requirements. See WIOA sec. 189(i)(3)(A), which identifies some 
limitations on the Secretary's waiver authority. Proposed

[[Page 20791]]

Sec.  687.190(a) and (b) retain essentially the same requirements found 
in the WIA regulations at 20 CFR 671.150. A grantee requesting a waiver 
of the statutory or regulatory requirements in connection with an NDWG 
must submit its request either in the initial application for an NDWG, 
or in a subsequent modification request. A waiver issued under other 
WIOA provisions does not supplant this requirement.
Section 687.200 What are the program and administrative requirements 
that apply to national dislocated worker grants?
    Proposed Sec.  687.200 describes program and administrative 
requirements for NDWGs. It retains essentially the same language 
included in the WIA regulations at 20 CFR 671.170. Proposed Sec.  
687.200(b) authorizes the use of funds for temporary job creation in 
areas declared eligible for public assistance by FEMA or in areas 
impacted by a situation of national significance as designated by a 
Federal agency other than FEMA, subject to the limitations of sec. 
170(d) of WIOA, and any additional guidance issued by the Department. 
Proposed Sec.  687.200(b)(2) authorizes any remaining Disaster NDWG 
funds awarded under this part to be used by a grantee in the same PY 
the funds were awarded, in limited instances as determined by the 
Secretary or the Secretary's designee, for additional disasters or 
situations of national significance subject to the limitations of sec. 
170(d) of WIOA. This flexibility will allow States, tribal areas, and 
outlying areas that experience a quick succession of disasters (such as 
those experienced by several Gulf States in 2005 that were devastated 
by the effects of Hurricane Katrina, and approximately 1 month later, 
were devastated by Hurricane Rita) to be able to modify their existing 
grant and quickly access existing funding.

L. Part 688--Provisions Governing the YouthBuild Program

1. Introduction
    The Department wants to emphasize the connections across all of our 
youth-serving programs under WIOA including the WIOA youth formula 
program including boards and youth committees, connections to pre-
apprenticeship and registered apprenticeship programs, and Job Corps 
centers across the country. WIOA is an opportunity to align and 
coordinate service strategies for these ETA youth training programs as 
well as align with our Federal partners that serve these same 
customers. WIOA also ensures that these programs are using common 
performance measures and standard definitions, which includes aligning 
the definitions for homeless youth, basic skills deficient, 
occupational skills training and supportive services. Additionally, the 
YouthBuild regulation aligns six new performance measures with the WIOA 
youth formula program.
    WIOA affirms the Department's commitment to providing high quality 
education, training, and ESs for youth and young adults through 
YouthBuild grants by expanding the occupational skills training offered 
at local YouthBuild programs. YouthBuild programs can offer 
occupational skills training in in-demand occupations, such as health 
care, advanced manufacturing, and IT, as approved by the Secretary and 
based on local labor market information.
    In addition to the changes to the program required by WIOA, the 
Department proposes several additional changes to the program, 
including proposed revisions to the duration of the restrictive 
covenant clause (as detailed in the preamble at Sec.  688.730), 
clarifying eligibility criteria for participation, and describing 
qualifying work sites and minimum criteria for successful exit from the 
YouthBuild program. Beyond these regulations, the Department will 
develop guidance and technical assistance to help grantees and the 
workforce development community operate highly effective YouthBuild 
programs.
2. Subpart A--Purpose and Definitions
Section 688.100 What is YouthBuild?
    This proposed 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 by providing new 
and rehabilitated affordable housing, thereby decreasing the incidence 
of homelessness in those communities. The program recruits youth 
between the ages of 16 and 24 who are school dropouts and are either: A 
member of a low-income family, a youth in foster care, a youth who is 
homeless, a youth offender, a youth who is an individual with a 
disability, a child of an incarcerated parent, or a migrant youth.
Section 688.110 What are the purposes of the YouthBuild program?
    This proposed 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 successfully. Construction 
training provides skills training and hands-on application of those 
skills. Youth also receive educational services that lead to a HSD or 
its State-recognized equivalent.
    In addition to describing the Department's vision for the 
YouthBuild program, this proposed section describes the purposes of the 
YouthBuild program as found at WIOA sec. 171(a).
Section 688.120 What definitions apply to this part?
    This proposed section provides definitions that are specific to the 
YouthBuild program in sec. 171(b) of WIOA. Other definitions that apply 
to the YouthBuild program are defined under sec. 3 of WIOA and Sec.  
675.300. Where appropriate and applicable the Department has aligned 
our definitions with the definitions within the regulations of WIOA 
youth, Job Corps, and WIOA adult and dislocated workers programs.
    These proposed definitions fall into several categories, which are 
described below: (1) Definitions that remain unchanged from the WIA 
regulation at 20 CFR 672.110; (2) terms that were included in the WIA 
regulation but which have been amended; and (3) new definitions added 
to implement WIOA.
    Definitions included in 20 CFR 672.110 which have been carried over 
to this part unchanged are: ``Community or Other Public Facility,'' 
``Core Construction,'' ``Eligible Entity,'' ``Housing Development 
Agency,'' ``Income,'' ``Indian; Indian Tribe,'' ``Low-Income Family,'' 
``Migrant Youth,'' and ``Youth in Foster Care.''
    Definitions published in the WIA regulations at Sec.  672.110 that 
the Department proposes changing include existing definitions for: 
``Homeless Individual'' to include individuals considered homeless as 
defined in sec. 41403(6) of the Violence Against Women Act of 1994 and 
the inclusion of ``Homeless Child or Youth'' as defined under the 
McKinney-Vento Homeless Assistance Act; ``Needs-Based Stipends'' to 
``Needs-Based Payments'' in order to be consistent with the term as 
used in Sec.  688.320 below and to differentiate the term from the 
allowable program stipends described in Sec.  688.320; ``Occupational 
Skills Traning'' to align with in-demand industries and an emphasis on 
post-secondary credentials; ``Registered Apprenticeship'' to align with 
the WIOA definition; and ``Transitional

[[Page 20792]]

Housing'' to reflect the amended definition under the McKinney-Vento 
Homeless Assistance Act as amended by S. 896 The Homeless Emergency 
Assistance and Rapid Transition to Housing (HEARTH) Act of 2009.
    Proposed changes to this section also include the addition of new 
definitions that were not in WIA but are included in either sec. 3 or 
sec. 171(b) of WIOA. These are ``Adjusted Income,'' ``Applicant,'' 
``Basic Skills Deficient,'' ``In-Demand Industry Sector or 
Occupation,'' ``Individual with a Disability,'' ``Offender,'' 
``Qualified National Nonprofit Agency,'' ``Recognized Post-secondary 
Credential,'' ``School Dropout,'' ``Secondary School,'' ``Supportive 
Services,'' and ``YouthBuild Program.''
    Finally, the Department proposes to include several new definitions 
not defined under WIA YouthBuild regulations Sec.  673.110: 
``Construction Plus,'' ``Exit,'' ``Follow-Up Services,'' 
``Participant,'' and ``Pre-apprenticeship.''
    In addition, the Department has removed several definitions that 
were included in the WIA regulations: ``Alternative School,'' 
``Individuals of Limited English Proficiency (LEP),'' ``Partnership,'' 
``Public Housing Agency,'' and ``Youth who is an Individual with a 
Disability.''
    The Department proposes to include the following definitions at 
Sec.  688.120:
    Adjusted Income: The Department proposes that the term ``adjusted 
income'' means that with respect to a family, the amount of the income 
of the members of the family residing in a dwelling unit or the persons 
on a lease, after any allowable income exclusions. Per WIOA sec. 
171(b)(1), this definition comes from sec. 3(b) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(b).
    Applicant: The Department proposes defining this as an entity 
applying for YouthBuild funding as described at WIOA sec. 171(b)(2).
    Basic Skills Deficient: This proposed definition comes from WIOA 
sec. 3(5) and the Department is adding it for ease of use. In assessing 
basic skills, YouthBuild programs must use assessment instruments that 
are valid and appropriate for the target population, and must provide 
reasonable accommodation in the assessment process, if necessary, for 
participants with disabilities.
    Construction Plus: The Department proposes defining this as the 
inclusion of occupational skills training for YouthBuild participants 
in in-demand occupations other than construction. This definition is 
from TEGL 7-14 Guidance for Implementing the ``Construction Plus'' 
Component of the YouthBuild Program. The Department is adding this 
definition to the regulations to stress the importance of correctly 
implementing a high quality Construction Plus program and to refer 
grantees to TEGL 7-14.
    Community Or Other Public Facility: The Department proposes 
defining this as those facilities which are either privately owned by 
non-profit organizations or publicly owned and publicly used for the 
benefit of the community. For publically owned buildings, examples 
include public use buildings such as recreation centers, libraries, 
public park shelters, or public schools.
    Core Construction: The Department proposes defining this term to 
mean those 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, and Construction and Extraction Occupations, in codes 
47-1011 through 47-4099. 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: This proposed term describes the entities eligible 
to apply for funding under this part. This definition comes from WIOA 
sec. 171(b)(3).
    English Language Learner: The Department proposes defining this 
term as a participant who has limited ability in reading, writing, 
speaking, or comprehending the English language, and whose native 
language is one other than English; or who lives in a family or 
community environment where a language other than English is the 
dominant language. This definition comes from WIOA sec. 3(21), which 
adopts the definition found at WIOA sec. 203(7).
    Exit: For purposes of measuring performance under the performance 
measures described in Sec.  688.400, the Department proposes to adopt 
the general definition of exit that is used in Sec.  677.150 in order 
to align with the core programs generally and the youth formula program 
specifically. For purposes of this definition, an exit from a 
YouthBuild program is either a successful exit under Sec.  688.370 or 
an unsuccessful exit, which occurs when a participant leaves the 
program before completing the program. However, a participant is not 
considered to have unsuccessfully exited if they leave the program 
because of a documented death, health or medical reason, family care, 
being called to active duty in the military, or any other circumstance 
described by the Secretary.
    Follow-Up Services: This proposed term describes the services 
provided to youth participants after program exit to ensure success in 
established outcomes, such as placement into post-secondary education 
and training or employment. The definition is based on the Department's 
experience in administering the YouthBuild program, and aligns with the 
WIOA youth formula program definition. By adding this definition, the 
Department intends to strengthen the emphasis on career pathways for 
YouthBuild participants. Follow-up services are critical services 
provided following a youth's exit from the program that help ensure the 
youth is successful in employment and/or post-secondary education and 
training as they progress along their career pathway. The Department 
will issue guidance and provide technical assistance regarding the 
services necessary to ensure the success of youth participants.
    Homeless Individual: This proposed term comes from WIOA sec. 
171(b)(4), which adopted the definition from sec. 41403(6) of the 
Violence Against Women Act of 1994 (42 U.S.C. 14043e-2(6)).
    Homeless Child or Youth: This proposed term comes from WIOA sec. 
171(b)(4) of WIOA and comes from sec. 725(2) of the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 1134a(2)).
    Housing Development Agency: The Department proposes adopting the 
statutory definition of this term at WIOA sec. 171(b)(5).
    Income: This proposed definition has been adopted from WIOA sec. 
171(b)(6), which adopted the definition from the United States Housing 
Act of 1937 (42 U.S.C. 1437a(b)(2)).
    In-Demand Industry Sector or Occupation: The Department proposes to 
define this term as described at WIOA sec. 3(23).
    Indian; Indian Tribe: These proposed terms are found in WIOA sec. 
171(b)(7), which incorporated the definitions from sec. 4 of the 
ISDEAA.
    Individual With a Disability: This proposed definition was taken 
from sec. 3(25) of WIOA, which adopted the definition from sec. 3 of 
the Americans with Disabilities Act of 1990 (42 U.S.C. 12102).
    Low-Income Family: This proposed definition implements the 
definition at WIOA sec. 171(b)(8), which adopted the definition of 
``low-income family'' from sec. 3(b)(2) of the Housing Act of 1937. 
This definition applies not only to the eligibility of participants but 
also to the

[[Page 20793]]

requirement that any residential units constructed or rehabilitated 
using YouthBuild funds must house homeless individuals and families or 
low-income families.
    Migrant Youth: The Department proposes using the definition we used 
under the WIA YouthBuild regulation. The definition was adapted from 
Farmworker Bulletin 00-02, which relates to eligibility in the Migrant 
Seasonal Farmworker Youth program, and expands on the definition of 
``migrant seasonal farmworker'' found in WIA.
    Needs-Based Payments: This proposed term describes additional 
payments to participants beyond stipends which are necessary for an 
eligible youth to participate in the program.
    Occupational Skills Training: The Department proposes to define 
this term as a course of study that provides specific vocational 
skills.
    Offender: The Department proposes to define this term based on the 
definition found at WIOA sec. 3(38) and it includes both youth and 
adults who have been subject to any stage of the criminal justice 
process. The Department is proposing this definition in order to align 
YouthBuild's definition of offender with WIOA's formula for adult and 
youth programs.
    Participant: The Department is proposing to define this term as an 
individual who, after an affirmative eligibility determination has been 
made, enrolls and actively participates in the program. Participants 
must be reported in the performance outcome measures. The term 
``participant'' is necessary to define because Sec.  688.400 requires 
grantees to report on the performance of participants in the program. 
This definition is designed to be consistent with the definition of 
participant in Sec.  677.150, and it captures the same type of 
individuals that are considered participants in the core programs.
    Pre-Apprenticeship: This proposed term describes a program or set 
of strategies designed to prepare individuals to enter and succeed in a 
registered apprenticeship program. This definition is adopted from TEN 
13-12 (http://wdr.doleta.gov/directives/attach/TEN/TEN_13-12_Acc.pdf), 
and is being used to ensure consistency with the definition used by the 
Department's Office of Apprenticeship. Per TEN 13-12, YouthBuild 
programs that receive funding from DOL are considered pre-
apprenticeship programs.
    Recognized Post-secondary Credential: This proposed definition 
explains that a recognized post-secondary credential includes an 
industry-recognized certificate or completion of an apprenticeship 
program, a license recognized by the State involved or Federal 
government, or an associate or baccalaureate degree. This definition 
has been adopted from WIOA sec. 3(52). the Department is using this to 
term to align with WIOA's formula adult and youth programs.
    Registered Apprenticeship Program: The Department proposes to adopt 
the definition found at WIOA sec. 171(b)(10).
    School Dropout: This proposed definition, adopted from WIOA sec. 
3(54), describes a school dropout as an individual who is no longer 
attending any school and who has not received a secondary school 
diploma or its recognized equivalent.
    Secondary School: The Department proposes to define this term as a 
nonprofit institutional day or residential school, including a public 
secondary charter school, that provides secondary education, as 
determined under State law, except that the term does not include any 
education beyond grade 12. This proposed definition adopts the 
definition at WIOA sec. 3(55), which cites to sec. 9101 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).
    Section 3: The Department proposes to define this term as Section 3 
of the Housing and Urban Development Act of 1968, as amended by the 
Housing and Community Development Act of 1992. The Department proposes 
adding this definition because YouthBuild is specifically identified in 
the U.S. Department of Housing and Urban Development (HUD's) Section 3 
regulations. In Section 3, contractors are encouraged to work with 
YouthBuild programs and participants when working on Federally-funded 
HUD projects. Contractors and registered apprenticeship sponsors that 
hire YouthBuild graduates will increase the competitiveness of their 
proposals when bidding on HUD-funding construction projects.
    Supportive Services: This proposed definition adopts the definition 
from WIOA sec. 3(59). In this definition, linkages to community 
services include but are not limited to services such as linkages to 
free legal aid to help with the expungement of criminal records, 
securing government identification, and linkages to organizations that 
provide youth the opportunity to develop their leadership skills 
through service to their respective community. This proposed definition 
identifies additional services that are necessary for youth to 
participant in this program. Guidance regarding the provision of 
supportive services will be issued by the Department.
    Transitional Housing: The Department proposes to define this term 
as housing provided to ease the movement of individuals and families 
experiencing homelessness to permanent housing within 24 months. This 
definition, per WIOA sec. 171(b)(11), is adopted from sec. 401(29) of 
the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11360(29)).
    Youth in Foster Care: This term means ``youth currently in foster 
care or youth who have ever been in foster care.'' The Department is 
including it here as it was in WIA YouthBuild regulations.
    Youthbuild Program: The Department proposes to define this term as 
any program that receives assistance under this section and provides 
disadvantaged youth with opportunities for employment, education, 
leadership development, and training through the rehabilitation (which 
for purposes of this section, must include energy efficiency 
enhancements) or construction of housing for homeless individuals and 
low-income families, and public facilities. This proposed term adopts 
the definition from WIOA sec. 171(b)(12).
3. Subpart B--Funding and Grant Applications
Section 688.200 How are YouthBuild grants funded and administered?
    This proposed section describes how the Secretary uses funds 
authorized for appropriation under WIOA sec. 171(i) to administer 
YouthBuild as a national program under title I, subtitle D of WIOA. 
This section also notes that grants to operate YouthBuild programs are 
awarded to eligible entities through a competitive selection process, 
as required by WIOA sec. 171(c)(3). This proposed section retains the 
same requirements found at 20 CFR 672.200.
Section 688.210 How does an eligible entity apply for grant funds to 
operate a YouthBuild program?
    This proposed section, implementing WIOA sec. 171(c)(1), generally 
describes the application process for the YouthBuild program.
Section 688.220 How are eligible entities selected to receive grant 
funds?
    This proposed section, which implements WIOA sec. 171(c)(4), 
describes the selection criteria that will be considered by the 
Secretary when reviewing an application for funding. In addition to the 
criteria described in the law, the Department has added additional 
criteria in paragraphs (d), (e),

[[Page 20794]]

and (g) and added a new criteria in paragraph (i).
    In paragraph (d), the Department has added ``counseling and case 
management'' to the criteria described in sec. 171(c)(4)(D) because 
these are essential to the success of YouthBuild participants.
    In paragraph (e), in addition to the criteria at WIOA sec. 
171(c)(4)(E), the Department has clarified that applicants should train 
participants in sectors or occupations that are in demand locally to 
help them achieve a positive employment outcome after their exit from 
the program. Paragraph (g) adds to the criteria at WIOA sec. 
171(c)(4)(I) by clarifying that the Department will also consider the 
extent to which the proposal provides for previously homeless families 
as well as individuals.
    The Department has added a new criterion at paragraph (i) which 
looks at the applicant's ability to enter into partnerships with a 
variety of organizations and providers. Inclusion of this criterion is 
beneficial to the grantee and the participant. No single grantee is 
able to provide all of the services that a participant will need to 
succeed along her or his chosen career pathway. However, programs that 
enter into various types of partnerships are able to provide 
participants with needed supportive services, increasing the likelihood 
that they will succeed both during and after their participation in the 
program.
    Finally, paragraph (l) clarifies that the Department will apply 
varying weights to these factors as described in the FOA.
Section 688.230 What are the minimum requirements and elements to apply 
for YouthBuild funds?
    This proposed section implements WIOA section 171(c)(3)(B) and 
describes the minimum requirements and elements that must be included 
in an application for YouthBuild funds.
    In addition to the requirement at sec. 171(c)(3)(B)(iii), proposed 
Sec.  688.230(c) requires applicants to describe their experience 
operating a program under Section 3 of the Housing and Urban 
Development Act of 1968. This requirement was added because the 
Department wants grantees to be aware that YouthBuild is specifically 
identified in HUD's Section 3 regulations. In Section 3, contractors 
are encouraged to work with YouthBuild programs and participants when 
working on Federally-funded HUD projects. The criteria described in 
this proposed section will be included in the FOA.
    The criteria described in this section emphasize strong connections 
to registered apprenticeship programs as a key component of the 
YouthBuild model, as well as connections to the one-stop system as a 
support for employer engagement, connecting with the Local Workforce 
Development Board youth services, and connecting to the network of 
standing youth committees at the local level. These connections will 
not only strengthen YouthBuild programs, but better enable them to 
provide a comprehensive spectrum of employment and training services to 
their participants.
    Additionally, Sec.  688.230(l) proposes, consistent with current 
practice, that the Department will consider an applicant's past 
performance under an award made by the Secretary of Labor to operate a 
YouthBuild program. This consideration will be based on the applicant's 
past Quarterly Performance Reports (ETA-9136) and Quarterly Financial 
Reports (ETA-9130). Our past experience in administering the YouthBuild 
program has demonstrated that evaluating past performance allows the 
Department to conduct comprehensive analysis of the program's ability 
to meet the complicated requirements of YouthBuild. Additional details 
about this requirement will be included in the FOA.
    Finally, proposed paragraph (v) authorizes the Secretary to include 
additional requirements in the FOA. This provision has been included to 
ensure that the requirements upon which the Secretary is making its 
determination are based on adequately and accurately judging the 
ability of the applicant in order to ensure the effective, efficient 
use of Federal funds and maximum benefit to program participants and 
the communities in which the proposed program will operate.
Section 688.240 How are eligible entities notified of approval for 
grant funds?
    Consistent with sec. 171(c)(5) of WIOA, this proposed section 
describes how eligible entities are notified of the status of their 
respective grant application submitted for funding and the time frame 
for notification. This proposed section retains the same requirements 
found at 20 CFR 672.215.
4. Subpart C--Program Requirements
Section 688.300 Who is an eligible participant?
    This proposed section sets out the participant eligibility 
requirements for enrollment in the YouthBuild program. It covers the 
required ages, education, income level, and other factors as well as 
exceptions. This proposed section implements the statutory eligibility 
requirement at WIOA sec. 171(e)(1).
    While the language ``its recognized State equivalent'' in Sec.  
688.300(b)(1) is commonly understood to mean a GED, States can choose 
from several different equivalency tests that result in the attainment 
of a credential similar to the GED. Accordingly, the phrase 
``recognized State equivalent'' as used in this section refers to the 
credential attained by passing any of the recognized equivalency tests.
    While WIOA sec. 171(e)(1)(A)(ii) includes ``a youth offender'' as 
an eligible participant, proposed Sec.  688.300(a)(3)(iii) permits both 
adult and youth offenders to participate in the YouthBuild program. The 
reason for the inclusion of adult offenders is twofold. First, some 
States categorize anyone who was convicted of a crime over the age of 
16 an adult. Because individuals between the ages of 16 and 24 are 
eligible to participate in YouthBuild programs, not including adult 
offenders as eligible participants would exclude those 16 and 17 year 
olds who have been convicted of a crime from participating in the 
program. Including adult offenders in this list of eligible 
participants ensures that these youth with a substantial barrier to 
employment will be able to participate in and benefit from the 
YouthBuild program.
Section 688.310 Are there special rules that apply to veterans?
    This section identifies the relevant rules for determining income 
for veterans and priority of service for qualified veterans. These 
rules can be found in 20 CFR 683.230 and 20 CFR part 1010, 
respectively. This proposed section retains the same requirements found 
at 20 CFR 672.305.
Section 688.320 What eligible activities may be funded under the 
YouthBuild program?
    This proposed section, which implements WIOA sec. 171(c)(2), 
outlines the activities that YouthBuild programs funded under this 
section may provide to program participants, including the allowable 
education and workforce training activities. Of note, sec. 
171(c)(2)(a)(i) of WIOA codified the Department's decision to allow 
training in in-demand industries with the approval of the Secretary.
    In addition to the activities allowed by the statute, the 
Department, in Sec.  688.320, proposes to allow grantees to provide 
referrals to mental health

[[Page 20795]]

services and victim services, such as referrals to domestic violence 
services or services to victims of gang violence. The Department has 
decided to add this because it is not uncommon for our participants to 
enroll in our programs while at the same time dealing with the adverse 
effects of violence.
    Finally, Sec.  688.320(a)(7)(ii) specifies that in order to provide 
needs-based payments, a grantee must have a written policy which 
includes the information described to sure that such payments are 
proper and fairly distributed.
Section 688.330 What level of training qualifies a construction project 
as a qualifying work site under the YouthBuild program?
    This proposed section provides requirements for YouthBuild grant 
programs on what is considered a qualifying work site for purposes of 
allowable construction activities under the YouthBuild program.
    While the YouthBuild program model requires hands-on construction 
training that supports the outcome of increasing the supply of 
affordable housing within the communities that YouthBuild serves, some 
grant programs struggle to secure work sites that will offer the youth 
the hands-on construction skills training obtained from either building 
housing from scratch or through extensive rehabilitation of existing 
housing stock.
    Determining whether a work site meets the criteria for providing 
substantial hands-on experience is complex. As referenced in TEGL 35-
12, ``Definition and Guidance on Allowable Construction Credentials for 
YouthBuild Programs,'' participants must study and pass testing in a 
number of modules, or skill areas, before one of the industry-
recognized construction certification programs will accredit them. 
These modules include, for example, brick masonry, carpentry, painting, 
plumbing, and weatherization.
    Per paragraphs (a) through (e) of this section, several criteria 
must be met in order for a work site to qualify as appropriate for 
construction skills training for YouthBuild participants. The first is 
whether the worksite will provide the opportunity for hands-on training 
in at least two modules in a construction skills training program 
offering an industry-recognized credential. The second is whether the 
completed work site will be used by a family or individual that meets 
the low-income threshold, as defined by the United States Housing Act 
of 1937 (42 U.S.C. 1437a(b)(2)). The third is whether the site provides 
substantial hands-on experience for youth. This means that the work 
site must include from-the-ground-up building experience (e.g., 
foundation, framing, roofing, dry wall installation, finishing, etc.) 
or a substantial level of rehabilitation (i.e., ``a gut job''). Fourth, 
per Sec.  688.730, all YouthBuild work sites must be built or renovated 
for low-income individuals or families and are required to have a 
restrictive covenant in place that only allows for rental or resale to 
low-income participants for a particular period of time. Last, all work 
sites must adhere to the allowable construction and other capital asset 
costs, as defined in TEGL 05-10, ``Match and Allowable Construction and 
Other Capital Asset Costs for the YouthBuild Program,'' or subsequent 
or similar guidance issued by the Department related to allowable 
costs.
    All grantees must use the required Work Site Description form (ETA-
9143) in submitting proposed work sites for review and approval to and 
by the Department at the time of applying for grant funds. If after 
approval the grantee can no longer work at the approved construction 
site, the grantee must submit another ETA-9143 for the proposed new 
work site. The Work Site Description form requests specific information 
on the property for building or rehabilitation, the participants' 
construction activities, the funding source for the construction, and 
demonstration of ownership or access to the site.
    By tying approved work sites with hands on training, the Department 
can ensure youth have the necessary hands-on training and experience in 
two or more of these modules or skill areas in order to qualify for 
industry-recognized credentials. The Department will issue guidance on 
the types of work sites that are acceptable for construction training 
for YouthBuild participants, and describe the minimum construction 
activities that define work site training.
Section 688.340 What timeframes apply to participation?
    This proposed section, implementing WIOA sec. 171(e)(2), provides 
that the period of participation for YouthBuild participants while 
enrolled in the program is not less than 6 months and not more than 24 
months. This proposed section retains the same requirements found at 20 
CFR 672.315.
Section 688.350 What timeframes must be devoted to education and 
workforce investment or other activities?
    Implementing WIOA sec. 171(e)(3), this proposed section outlines 
the requirements for the minimum amount of time that participants must 
engage in workforce and educational training activities. This section 
also permits program participants to spend up to 10 percent of their 
time engaged in leadership development and community service 
activities, such as youth serving as crew leaders, participating on 
policy councils, organizing community clean-up projects, leading youth 
voter registration drives and organizing and hosting community anti-
violence conferences.
Section 688.360 What timeframes apply to follow-up services?
    This proposed section requires YouthBuild grantees to provide 
follow-up services for a period of 12 months after exit. These services 
are provided to program participants that have successfully exited the 
program to help them transition successfully into a post-secondary 
education program or employment.
    The Department proposes to require 12 months of follow-up services 
to align the length of services with the youth formula program and the 
new performance measure requiring grantees to measure outcomes up to 
four quarters after exit. The types of services provided and the 
duration of services must be determined based on the needs of the 
individual and therefore, the type and intensity of follow-up services 
may differ for each participant.
    Consistent with the youth formula program, a participant that is 
receiving follow-up services is considered to have exited the program, 
and therefore would be counted as having exited the program for the 
purpose of the performance measures described in Sec.  688.400.
Section 688.370 What are the requirements for exit from the YouthBuild 
program?
    This proposed section outlines the minimum criteria for successful 
exit from the YouthBuild program. One purpose of the YouthBuild program 
is for participants to receive practical skills and training that will 
allow them to successfully transition to employment or further 
education. As used in this section, a successful exit occurs when a 
participant has completed his/her training and is ready to transition 
out of the program.
    Proposed paragraph (a) requires hands-on training because, based on 
our experience, participants that do not receive this training are less 
likely to transition out of the program successfully, thereby 
undermining one of the primary purposes of the program.
    Proposed paragraph (b) requires each YouthBuild program to create 
exit

[[Page 20796]]

policies that establish any additional minimum requirements that youth 
must meet in order to be considered to have successfully completed the 
program.
    In the past, grantees have deemed participants to have exited the 
program, simultaneously upon graduation, before all program services 
have been completed or delivered. This can result in lower performance 
outcome measures for the grantee and a lower post program success rate 
for participants. Participants do not have to exit at the moment of 
graduation. Exits can and should be based on the individual ongoing 
needs of the participant. Transition services can be provided until the 
participant is ready for exit and may include college experience, 
subsidized summer jobs, internships, or other activities that will help 
the youth focus on post-program goals (for further details, please see 
Sec.  688.320). It may also be best to have the youth already connected 
to a post-program placement before exit to ensure successful outcomes 
for the youth and successful performance outcome measures for the 
program. In addition, because follow-up services are only available to 
participants that have successfully completed the program, adding this 
section clarifies which participants are eligible to receive follow-up 
services
Section 688.380 What is the role of the YouthBuild grantee in the one-
stop system?
    WIOA sec. 121(b)(1)(B)(i) includes all of the programs authorized 
under title I of WIOA as a required partner in the local one-stop 
system. This proposed section implements that provision by requiring 
YouthBuild grantees to take all actions required of required partners 
described in sec. 121 of WIOA and 20 CFR part 678. The Department 
encourages its YouthBuild grantees to actively participate as a partner 
with the one-stop system. Because of the positive role that a local 
one-stop center can have on the operation of a local YouthBuild program 
and on the outcomes for YouthBuild participants, the local YouthBuild 
grantee should serve as the required partner of the one-stop system as 
required by sec. 121 of WIOA.
5. Subpart D--Performance Indicators
Section 688.400 What are the performance indicators for YouthBuild 
grants?
    This proposed section describes performance indicators for the 
YouthBuild program, as required by WIOA sec. 171(f). Proposed Sec.  
688.400(a) through (f) are the six primary indicators as required by 
sec. 116 (b)(2)(A)(ii) of WIOA. These measures of performance are the 
same as the primary indicators discussed in proposed Sec.  677.155. 
Though the indicators of performance are identified in various places 
throughout the WIOA proposed regulations, the indicators are the same 
and do not vary across the regulations. In addition to the six primary 
indicators, the Secretary may require YouthBuild programs to collect 
additional information on performance. If additional performance 
information becomes a requirement for YouthBuild grantees, they will be 
informed through a formal memorandum from the Department.
    In calculating a program's performance, grantees must consider all 
of the participants that have exited the program, as that term is 
defined in Sec.  688.120, not just those that have successfully exited 
the program under the policy described in Sec.  688.370.
Section 688.410 What are the required levels of performance for the 
performance indicators?
    This proposed section, implementing sec. 171(f) of the statute, 
provides a description of how levels of performance are developed for 
YouthBuild programs.
Section 688.420 What are the reporting requirements for YouthBuild 
grantees?
    This section outlines the performance, narrative, and financial 
reporting requirements for YouthBuild grantees and explains that any 
additional information on the reporting requirements will be included 
in guidance issued by the Secretary. This proposed section retains the 
same requirements found at 20 CFR 672.410.
Section 688.430 What are the due dates for quarterly reporting?
    This section provides due dates for quarterly performance reporting 
under the YouthBuild program. This proposed section retains the same 
requirements found at 20 CFR 672.415.
6. Subpart E--Administrative Rules, Costs, and Limitations
Section 688.500 What administrative regulations apply to the YouthBuild 
program?
    This proposed section applies the relevant administrative 
requirements and regulations applicable to all WIOA ETA programs to the 
YouthBuild program. This section requires each YouthBuild grantee to 
comply with the general administrative requirements found in 20 CFR 
part 683, except those that apply only to the WIOA title I-B program, 
the Uniform Administrative Requirements at 2 CFR parts 200 and 2900, 29 
CFR parts 93, 94, and 98, and the nondiscrimination regulations at 29 
CFR part 37.
    The nondiscrimination regulations incorporated by this section at 
Sec.  688.500(c)(2), 29 CFR part 37, broadly prohibit all forms of 
discrimination for WIOA title I programs, which include YouthBuild. In 
particular, 29 CFR 37.5 states that ``[n]o individual in the United 
States may, on the ground of race, color, religion, sex, national 
origin, age, disability, political affiliation or belief, and for 
beneficiaries only, citizenship or participation in any WIOA 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 WIOA title I-funded program or activity.''
    The regulations also require that grantees provide reasonable 
accommodations to youth who are individuals with disabilities, as found 
in 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 
[https://askjan.org/] or call (800) 526-7234 (Voice) (877) 781-9403 
(TTY], 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 also must 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, as required by 29 CFR 39.42.
    YouthBuild grantees also are required to comply with all generally 
applicable laws and implementing regulations that apply to the grantees 
or their participants. For example, for participants who are youth with 
disabilities and participate in secondary

[[Page 20797]]

education programs, grantees must adhere to the administrative 
provisions of the Individuals with Disabilities Improvement Act at 34 
CFR 300.320 through 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.
    Finally, proposed Sec.  688.500(d), implementing sec. 171(e)(5) of 
WIOA, requires YouthBuild grantees to comply with relevant State and 
local education standards for their programs and activities that award 
academic credit or certify educational attainment.
Section 688.510 How may grantees provide services under the YouthBuild 
program?
    This proposed section, implementing WIOA sec. 171(h), authorizes 
grantees to provide services directly or to enter into subgrants, 
contracts, or other arrangements with various public and private 
entities. This proposed section retains the same requirements found at 
20 CFR 672.505.
Section 688.520 What cost limits apply to the use of YouthBuild program 
funds?
    This proposed section implements WIOA secs. 171(c)(2)(C)(i) and 
(c)(2)(D), describing the limitations on the percentage of grant funds 
that a YouthBuild grantee can spend on administrative costs and the 
rehabilitation or construction of a community or public facility. The 
definition of administrative costs can be found in 20 CFR 683.215.
Section 688.530 What are the cost-sharing or matching requirements of 
the YouthBuild program?
    This proposed section provides that the cost-sharing or matching 
requirements applicable to a YouthBuild grant generally will be 
addressed in the grant agreement, and also describes the requirements 
for several specific costs.
    Regarding the use of Federal funds, this section explains that 
grantees must follow the requirements of 2 CFR parts 200 and 2900 in 
the accounting, valuation, and reporting of the required non-Federal 
share. Additionally, because inquiries about the allowability of using 
Federal funds as part of the cost-sharing or match amount is frequently 
asked by applicants, the regulations restate the prohibition on the use 
of such funds.
    This proposed section retains the same requirements found at 20 CFR 
672.515.
Section 688.540 What are considered to be leveraged funds?
    This proposed section addresses the use of additional money, known 
as leveraged funds, to support grant activities. It explains that 
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, the Department would 
not allow a grantee to count toward the match requirement another 
Federal grant used by the grantee or subgrantee to support otherwise 
allowable activities under the YouthBuild program. However, the 
Department would consider such a grant a leveraged fund.
    The amount, commitment, nature and quality of the leveraged funds 
described in the grant application will be considered as factors in 
evaluating grants in the FOA. The Department also will require grantees 
to report the use of such funds through their financial report and 
quarterly narrative report.
    This proposed section retains the same requirements found at 20 CFR 
672.520.
Section 688.550 How are the costs associated with real property treated 
in the YouthBuild program?
    This proposed section specifies which costs associated with real 
property are allowable and unallowable under the YouthBuild program. It 
explains that 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.  688.530, but only with prior grant officer approval. Costs 
related to construction and/or rehabilitation associated with the 
training of participants are allowed; however, costs associated with 
the acquisition of land are not.
Section 688.560 What participant costs are allowable under the 
YouthBuild program?
    This proposed section permits payments to participants for work-
related and non-work-related YouthBuild activities, supportive 
services, needs-based payments, and additional benefits as allowable 
participant costs.
Section 688.570 Does the Department allow incentive payments in the 
YouthBuild program?
    This proposed section allows incentive payments to youth 
participants for recognition and achievement directly tied to training 
activities and work experiences. Grantees must outline in writing how 
they will use incentive payments. Proposed paragraphs (a) and (b) 
require that incentive payments be provided in accordance with the 
organization's general policies governing incentives and be related to 
the goals of the specific YouthBuild program. All incentive payments 
must be provided in accordance with the requirements in 2 CFR 200.
Section 688.580 What effect do payments to YouthBuild participants have 
on eligibility for other Federal needs-based benefits?
    This proposed section explains the effect that payments to 
YouthBuild participants have on eligibility for other Federal needs 
based benefits. Under WIOA regulations at 20 CFR 683.275(c), 
allowances, earnings, and payments to individuals participating in 
programs under title I of WIOA 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 SSA (42 
U.S.C. 301).
    This proposed section retains the same requirements found at 20 CFR 
672.535.
Section 688.590 What program income requirements apply to the 
YouthBuild program?
    This proposed section provides that the program income provisions 
of the Uniform Administrative Requirements at 2 CFR parts 200 and 2900 
apply to the YouthBuild program. This 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 Sec.  688.730, is not 
considered program income. The Department encourages grantees to use 
such revenue for the long-term sustainability of the YouthBuild effort.
    This proposed section retains the same requirements found at 20 CFR 
672.540.
Section 688.600 Are YouthBuild programs subject to the Davis-Bacon Act 
labor standards?
    This proposed section requires that when a YouthBuild participant 
works

[[Page 20798]]

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.
    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 when work is 
being performed on Federally-funded projects. 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 an individual registered in a program which has received prior 
approval, evidenced by a formal certification by DOL. However, 
YouthBuild program participants are not considered ``trainees'' and 
therefore must be paid the prevailing wage rate when they are 
performing work on Federally-funded projects.
    This proposed section retains the same requirements found at 20 CFR 
672.545.
Section 688.610 What are the recordkeeping requirements for YouthBuild 
programs?
    This section sets forth that grantees must follow the recordkeeping 
requirements specified in the Uniform Administrative Requirements at 2 
CFR parts 200 and 2900, and any additional requirements included in 
subsequently issued guidance or the grantee's grant agreement. This 
proposed section retains the same requirements found at 20 CFR 672.550.
7. Subpart F--Additional Requirements
Section 688.700 What are the safety requirements for the YouthBuild 
program?
    This proposed section requires YouthBuild grantees to comply with 
20 CFR 683.280, which applies Federal and State health and safety 
standards to the working conditions under WIOA-funded projects safety 
requirements for YouthBuild programs, and the relevant child labor laws 
at 29 CFR part 570, governing the employment of children in hazardous 
occupations under the Fair Labor Standards Act. This proposed section 
is meant to protect the health and safety of YouthBuild participants on 
YouthBuild work sites, and to ensure that YouthBuild grantees comply 
with relevant child labor laws.
Section 688.710 What are the reporting requirements for youth safety?
    This proposed section requires YouthBuild grantees to comply with 
the OSHA reporting requirements in 29 CFR part 1904 if a participant 
suffers a reportable injury while participating in the YouthBuild 
program. This proposed section retains the same requirements found at 
20 CFR 672.605.
Section 688.720 What environmental protection laws apply to the 
YouthBuild program?
    This proposed section requires grantees to comply with all 
environmental protection statutes and regulations, if applicable. This 
proposed section retains the same requirements found at 20 CFR 672.610.
Section 688.730 What requirements apply to YouthBuild housing?
    In order to effectively ensure that one of the primary purposes of 
the YouthBuild program--to increase the stock of housing for homeless 
and low-income individuals and families--is met, this proposed section 
provides additional requirements, including a series of restrictions on 
the sale and use of units of housing built or renovated by a YouthBuild 
grantee.
    This proposed section also requires a YouthBuild grantee to ensure 
that the owner of the property records a restrictive covenant on the 
property. The covenant must include the use restrictions in this 
section and must be for a term of 5 years. The Department requires the 
recordation of a restrictive covenant to ensure that YouthBuild funds 
are spent on projects that will benefit the intended beneficiaries of 
the program beyond the life of the grant.
    Under the WIA regulations, grantees were required to ensure that 
the restrictive covenant was for a 10-year term. However, grantees have 
identified the 10-year restrictive covenant as a barrier to recruiting 
and maintaining construction partners. The current requirement of a 10-
year covenant strictly binds partner organizations that may serve low-
income populations but also desire flexibility regarding to whom they 
may sell the property in the future.
    The term of the covenant was shortened in this proposed section in 
order to accommodate the difficulties faced by grantees while also 
ensuring that the purpose of the program continues to be met. Reducing 
the covenant period supports grantees in securing worksites where 
community-based housing partners and private property owners are 
reluctant to agree to a 10-year covenant requirement. At the same time, 
a 5-year term ensures that housing built or renovated using YouthBuild 
funding remains available solely for the use of low-income and/or 
homeless individuals and families for a period beyond the grantee's 3-
year period of performance. The Department specifically requests 
comments on the restrictive covenant requirement and our proposal to 
shorten the length of the covenant.

M. Part 651--General Provisions Governing the Federal-State Employment 
Service System

1. Introduction
    In this proposed rule, the Department proposes to revise the ES 
regulations that implement the Wagner-Peyser Act of 1933. These include 
the provision of ESs to all job seekers with a particular emphasis on 
MSFWs. The proposed rule will update the language and content of the 
regulations to, among other things, implement amendments made by title 
III of WIOA to the Wagner-Peyser Act. In some areas, these regulations 
establish entirely new responsibilities and procedures; in other areas, 
the regulations clarify and update requirements already established. 
The regulations make important changes to the following components of 
the ES system: definitions, data submission, and ETA standards for 
agricultural housing, among others.
2. Background
    The Wagner-Peyser Act (Wagner-Peyser) of 1933 provided the 
Department the authority to establish a national ES system. The ES 
system provides labor exchange services to its participants and has 
undergone numerous changes to align its activities with broader 
national workforce development policies and statutory requirements. 
WIOA expands upon the previous workforce reforms in the WIA and, among 
other provisions, identifies the ES system as a core program in the 
one-stop system, embeds ES State planning requirements into a combined 
planning approach, and increases requirements for the colocation of ES 
offices into the one-stop centers.
    In 1974, the case National Association for the Advancement of 
Colored People (NAACP), Western Region, et al. v. Brennan et al, No. 
2010-72, 1974 WL 229 (D.D.C. Aug. 13, 1974) resulted in a detailed 
court order mandating various Federal and State actions (referred to as 
the Judge Richey Court Order (Richey Order) in the remainder of this 
preamble). The Richey Order required the Department to implement and 
maintain a Federal and State monitoring and advocacy system and set 
forth requirements to ensure the delivery of ES services, benefits, and 
protections to MSFWs on a non-discriminatory basis, and to provide such 
services in a manner that is

[[Page 20799]]

qualitatively equivalent and quantitatively proportionate to those 
provided to non-farmworkers. In 1980, the Department published 
regulations at 20 CFR parts 651, 653, and 658 to implement the 
requirements of the Richey Order. Part 653 sets forth standards and 
procedures for providing services to MSFWs and provides regulations 
governing the Agricultural Recruitment System (ARS), a system for 
interstate and intrastate agricultural job recruitment. Part 658 sets 
forth standards and procedures for the administrative handling of 
complaints alleging violations of ES regulations and of employment-
related laws, the discontinuation of services to employers by the ES 
system, the review and assessment of State agency compliance with ES 
regulations, and the Federal application of remedial action to State 
agencies. Also in 1980, the Department separately published amended 
regulations at 20 CFR part 654 providing agricultural housing standards 
for MSFWs.
    In 1983, the Department published the regulations at 20 CFR part 
652 that set forth standards and procedures regarding the establishment 
and functioning of State ES operations. Part 652 was amended in 1999 
and 2000 to reflect provisions of WIA. The proposed rule aligns part 
652 with the WIOA amendments to the ES program, and with the WIOA 
reforms to the workforce system that affect the ES program.
3. Discussion of Proposed 20 CFR Part 651
    20 CFR part 651 sets forth definitions for 20 CFR parts 652, 653, 
654, and 658. The Department proposes to revise and update the 
definitions by eliminating outdated or obsolete definitions and by 
adding new definitions as needed. Throughout these parts it is 
generally proposed that the term ``State MSFW monitor advocate'' be 
replaced with the term ``State monitor advocate'' (SMA) because MSFW-
related responsibilities are inherent parts of the SMA position and 
``State monitor advocate'' is the commonly used term for the position. 
It also is proposed that the term ``local office'' be replaced with 
``employment service office'' or ``one-stop center'' depending on the 
context. The Department also proposes that the definitions for 
farmwork, farmworker, and agricultural worker be streamlined through 
reference to the same base line definition--farmwork. Also, the 
definition of farmwork is proposed to be revised by drawing language 
from definitions used in other Department regulations and eliminating 
references to the North American Industry Classification System 
(NAICS). Additionally, it is proposed that the definitions found at 20 
CFR 652.1 be moved to 20 CFR 651.10 because it is the intention of part 
651 to include Wagner-Peyser ES program definitions. It is proposed 
that the following definitions be added as they are provided in sec. 2 
of the Wagner-Peyser Act, as amended by sec. 302 of WIOA, and pertain 
to the scope of definitions covered by Sec.  651.10: Local Workforce 
Development Board, one-stop center, one-stop delivery system, one-stop 
partner, training services, and workforce development activity. All of 
these adhere strictly to WIOA and Wagner-Peyser definitions. The 
Department notes that the WIOA amendments to the Wagner-Peyser Act also 
add the definitions of CEO, institutions of higher education, and 
workplace learning advisor, but these definitions are not proposed to 
be added to the regulatory text of Sec.  651.10 because the terms are 
not used in parts 652, 653, 654, or 658. Finally, sec. 134 of WIOA 
merges the categories of core services and intensive services under WIA 
into career services. Since WIOA includes responsibilities for the 
Wagner-Peyser ES in the provision of career services, a definition for 
career services has been proposed to be added.
    The definition of act is proposed to be added to Sec.  651.10, 
moved from 20 CFR 652.1.
    The definition of agricultural worker is proposed to be eliminated 
because the term is synonymous with the definition of farmworker 
described in this section. The proposed regulatory text directs the 
reader to the definition of farmworker.
    The definition of applicant is proposed to be eliminated because 
the Department proposes to replace the term with participant as defined 
in this section. This change is proposed to align with the language in 
WIOA and conform to reporting requirements which include all MSFWs who 
apply for and/or receive Wagner-Peyser Act services.
    The definitions for Applicant Holding Office, Applicant Holding 
State, and Order Holding Office are proposed to be added because the 
terms are used throughout 20 CFR part 658 and adding the definitions 
clarifies the process for stakeholders. The proposed language in each 
definition derives from the purpose and scope defined in Sec.  653.500. 
The inclusion of ``U.S. workers'' in these definitions helps to clarify 
that ARS is intended for the recruitment of U.S.-based workers only.
    The definition of application card is proposed to be deleted as the 
document is generally no longer used as part of Wagner-Peyser Act 
services. ES offices have moved from a paper-based system to an online 
system and participants register for services in a variety of ways 
electronically.
    The definition of career services is proposed to be added, as 
discussed above.
    A definition of clearance order is proposed to be added to 
distinguish it from a job order.
    The definition of clearance is proposed to be revised to clearance 
system and reflect secs. 3 and 7 of the Wagner-Peyser Act, as well as 
20 CFR 652.3, which describes the basic labor exchange system as ``a 
system for clearing labor between States.'' The updated language 
clarifies that this clearance system moves job seekers through an ES 
office or more than one such office, depending on the needs of the 
individual and the available job or jobs.
    A revised definition of complaint is proposed to align with 
language in sec. 2 of the Wagner-Peyser Act, as amended by WIOA sec. 
302, to refer to ``employment service'' offices rather than ``job 
service'' (JS) offices. The revised definition specifies that 
complaints are representations or referrals of alleged violations of ES 
regulations, Federal laws enforced by the Department's WHD or OSHA, or 
State or local employment-related laws. The Department proposes to add 
language in the definition clarifying that the complaints filed are 
alleging a violation occurred, rather than confirming that a complaint 
represents an actual violation--which may be determined after the 
complaint is under investigation pursuant to 658 subpart F.
    The definition of day haul is proposed to be deleted as the term is 
no longer relevant with the proposed deletion of 20 CFR 653.105 and 
653.106.
    A revised definition of Employment and Training Administration 
(ETA) is proposed to conform to the description of ETA that is 
currently used.
    A definition of employment-related laws is proposed to be added to 
conform to the proposed complaint procedures in 20 CFR part 658.
    A definition of the term Employment Service (ES) is proposed to 
replace the definition for the term Job Service (JS) in order to 
conform to the terminology used in the Wagner-Peyser Act as amended by 
WIOA. For this reason, throughout these proposed regulations, the term 
Employment Service (ES) replaces the term JS.
    A definition of Employment Service regulations (ES regulations) is 
proposed to replace the definition of JS regulations. The purpose of 
this change

[[Page 20800]]

is to conform to language in the Wagner-Peyser Act, as amended by WIOA, 
and to include only relevant regulations. The proposed definition now 
includes Federal regulations at 20 CFR parts 651, 652, 653, 654, and 
658 and at 29 CFR part 75, and removes references to 20 CFR parts 620 
and 621 because they are reserved, the reference to 29 CFR part 8 
because Employment Service is not referenced in that part, and 29 CFR 
part 26 because it does not exist.
    The proposed definition of farmwork will eliminate references to 
NAICS codes and include language aligning it with pertinent definitions 
in other Department regulations at 29 CFR 500.20 and 20 CFR 655.103(c). 
Drawing language from those definitions clarifies what is covered by 
the term farmwork and slightly expands the term to include certain 
occupations and activities covered by the Department's Office of 
Foreign Labor Certification (OFLC) and/or WHD. It is also proposed that 
the revised definition of farmwork fold in food ``processing'' work to 
align Sec.  651.10 with OFLC regulations at 20 CFR 655.103(c)(1) which 
include food processing worker in the definition for agricultural labor 
or services. Including food processing work in the revised definition 
expands the scope of those who would be considered farmworkers. It also 
allows the Department to streamline the regulations by eliminating the 
separate definition of migrant food processing worker without reducing 
ES coverage or protections of such workers. The addition of food 
processing work to the revised definition of farmwork also expands the 
capability of Wagner-Peyser staff to provide services to more MSFWs. 
The Department will provide guidance to clarify what is considered food 
``processing.'' Fish farming is added to conform to sec. 167 of WIOA.
    The reference to ``. . . the cultivation and tillage of the soil, 
dairying, the production, cultivation, growing, and harvesting of any 
agricultural or horticultural commodities'' and ``[t]his includes the 
raising of livestock, bees, fur-bearing animals, or poultry, the 
farming of fish, and any practices (including any forestry or lumbering 
operations) performed by a farmer or on a farm as an incident to or in 
conjunction with such farming operations, including preparation for 
market, delivery to storage or to market or to carriers for 
transportation to market'' is adapted from 20 CFR 655.103(c)(2) which 
references 29 U.S.C. 203(f), as amended (sec. 3(f) of the FLSA, as 
codified). The language ``the handling, planting, drying, packing, 
packaging, processing, freezing, or grading prior to delivery for 
storage of any agricultural or horticultural commodity in its 
unmanufactured state,'' is adapted from 20 CFR 655.103 which references 
sec. 3121(g) of the Internal Revenue Code of 1954 (26 U.S.C. 3121(g)). 
The language ``agricultural commodities means all commodities produced 
on a farm including, but not limited to, crude gum (oleoresin) from a 
living tree, and the following products as processed by the original 
producer of the crude gum (oleoresin) from which derived: gum spirits 
of turpentine and gum rosin'' is taken from OFLC 20 CFR 655.103 and 
aligns with WHD 29 CFR 500.20. Under the proposed definition, the 
activities and services currently included by reference to NAICS codes 
111, 112, 115 will still be included whether explicit in the definition 
or through Department guidance, and those activities and services 
currently excluded by reference to NAICS codes 1152 and 1153 will still 
be excluded, excepting the proposed addition of fish farming. The NAICS 
reference to code 1125 will be covered through Department guidance as 
it relates to fish farming.
    The Department anticipates the following impact of expanding the 
definition of farmworker and aligning it with the WHD and OFLC 
definitions: (1) State agency employees will more easily distinguish 
MSFWs for reporting purposes; (2) the proposed definition will also 
align with that of the proposed updated definition under 20 CFR part 
685 for the NFJP; (3) more farmworkers will be served as such under 
Wagner-Peyser because fewer people would be excluded under the expanded 
definition; (4) the Department will maintain consistency with the 
intent of the Richey Order to update data gathering systems to 
accurately reflect services delivered; and (5) the Department's data 
reporting will improve because under the different regulations, the 
Department's agencies will utilize basically the same definition for 
farmworker and therefore will accurately reflect the number of MSFWs 
identified across all programs. At the end of the proposed definition, 
the Department proposes to add a sentence to include any service or 
activity covered under 20 CFR 655.103(c) (definition of agricultural 
labor or services) and/or under 29 CFR 500.20(e) (agricultural 
employment) and/or through official published Department guidance, such 
as a TEGL, to allow for other current or future types of farmwork to be 
included.
    A revised definition of farmworker is proposed to conform to the 
proposed definition of farmwork in this section.
    A definition of field checks is proposed to be added to Sec.  
651.10 because the term is referenced in 20 CFR 653.503 but was 
previously undefined. Adding the definition clarifies the meaning for 
those who conduct or receive field checks.
    A definition of field visits is proposed to be added to Sec.  
651.10 because the term is referenced in 20 CFR 653.108 but was 
previously undefined. Adding the definition clarifies the meaning for 
those who conduct or receive field visits.
    The definition of full application is proposed to be deleted 
because State Workforce Agencies (SWAs) generally do not utilize the 
full or partial application process. Instead, participants submit 
resumes or other information to register in the SWA network.
    The definition of Governor is proposed to be added to Sec.  651.10, 
moved from 20 CFR 652.1. Additionally, the Department proposes to add 
reference to the outlying areas in the definition to be clear that 
their chief executives are included when this part references a 
Governor.
    The definition of identification card is proposed to be deleted as 
the document is no longer utilized as part of Wagner-Peyser services. 
SWAs have moved from paper-based to electronic-based systems and 
participants often log in using whatever information is required for 
that particular system.
    A definition of interstate job order is proposed to be added to 
Sec.  651.10 because it is referenced in the ES regulations but was 
previously undefined. Adding the definition clarifies the difference 
between interstate and intrastate job orders.
    A revised definition of intrastate clearance order is proposed to 
conform to the ``employment service'' terminology used in the Wagner-
Peyser Act as amended by WIOA. Interstate or intrastate clearance order 
means an agricultural job order for temporary employment describing one 
or more hard-to-fill job openings, which an ES office uses to request 
recruitment assistance from other ES offices.
    The definition of job bank is proposed to be deleted because the 
system, as it was previously defined, no longer exists. Now, most job 
openings are posted on internet-based systems.
    The definition of job development is proposed to be slightly 
revised to refer to an ``employment service office'' rather than a 
``local office.''
    The definition of Job Information Service (JIS) is proposed to be 
deleted as resource centers replace JIS areas inside one-stop centers.

[[Page 20801]]

    In the definition of job opening, it is proposed that the term 
applicants be replaced with the term participants to be consistent with 
the replacement term applicant in this section.
    A definition of job order is proposed to be added to clarify the 
difference between a job order and a clearance order. The language for 
this definition is derived from 20 CFR 655.5.
    The definition of job referral is proposed to be revised to include 
``or for a potential job'' because the current definition is limited to 
the availability of a specific job and this revision opens job 
referrals to include situations that are responding to the possibility 
of employment.
    A revised definition of labor market area is proposed to be revised 
to conform to the definition in sec. 3 of WIOA.
    The definition of Local Office Manager is proposed to be revised to 
conform to the ``employment service'' terminology used in the Wagner-
Peyser Act as amended by WIOA.
    The definition of Local Workforce Development Board is proposed to 
be added to conform with sec. 2 of the Wagner-Peyser Act, as amended by 
WIOA.
    The definition of migrant farmworker is proposed to be revised to 
conform to the updated definition of farmworker.
    The definition of migrant food processing worker is proposed to be 
synonymous with the proposed definition of migrant farmworker.
    Within the definition of MSFW it is proposed that ``migrant food 
processing worker'' be deleted to conform to the above proposed 
definition of migrant food processing worker. No reduction in coverage 
is intended by this change.
    The definitions of one-stop center, one-stop delivery system, and 
one-stop partner are proposed to be added to Sec.  651.10 to conform 
with sec. 2 of the Wagner-Peyser Act, as amended by WIOA.
    The definition of O*NET-SOC is proposed to be revised to clarify 
that O*NET SOC codes are based on, but more detailed than, Standard 
Occupation Codes used across Federal statistical agencies.
    The definition of Order Holding Office is proposed to be added for 
reasons explained above.
    The definition of onsite review is proposed to be added because 
these reviews are mandated under the Richey Order and are found 
throughout the regulations at 20 CFR parts 653 and 658. The language 
for the proposed definition is taken from 20 CFR 653.108(g).
    It is proposed that the definition of outreach contact be added to 
Sec.  651.10 for clarification. The language for the definition is 
taken from Sec.  653.107.
    The definition of partial application is proposed to be deleted 
because it is generally no longer used by ES offices or SWAs. Instead, 
participants submit resumes or other information to register in the SWA 
network.
    The definition of participant is proposed to be added to replace 
the definition of applicant, as discussed above. This definition only 
applies to the Wagner-Peyser regulations at parts 651, 652, 653, and 
658. Proposed Sec.  677.150(a) includes a separate, narrower definition 
of ``participant'' for purposes of performance accountability under 
sec. 116 of WIOA and 20 CFR part 677. Therefore, an individual who is 
considered a participant for the purpose of these Wagner-Peryser 
regulations would not necessarily be considered a participant for 
performance accountability purposes.
    The definition of Program Budget Plan (PBP) is proposed to be 
deleted because the PBP is obsolete and the amendment to sec. 8 of 
Wagner-Peyser now calls for States to submit Unified or Combined State 
Plans.
    The definition of RA is proposed to be deleted because the 
definition for Regional Administrator with the appropriate acronym is 
already described in this section.
    The definition for rural area is proposed to be eliminated because 
the term is not used at 20 CFR parts 652, 653, 654, or 658 and is 
therefore not necessary to define in this section.
    The definition of seasonal farmworker is proposed to be revised to 
mean an individual who, over the past 12 months, has been employed in 
farmwork of a seasonal or other temporary nature. This proposed 
definition seeks to simplify and clarify the meaning of seasonal 
farmworker, and conform to the definitions used by the Department's WHD 
for seasonal agricultural workers under 29 CFR part 500, and the OFLC 
under 20 CFR part 655. Additionally, the Department proposes to retain 
the 12-month period originally used in the definition of seasonal 
farmworker at 20 CFR 651.10 to minimize the time period that an 
individual could assert that he/she is a seasonal farmworker. The 
Department anticipates that this updated definition will more 
accurately reflect the total number of seasonal farmworkers that 
participate in the ES system. The Department also anticipates that ES 
staff will more easily be able to identify seasonal farmworkers for 
reporting purposes.
    In the definitions of Significant MSFW Local Offices and 
Significant Bilingual MSFW Local Offices, the references to ``local 
offices'' are proposed to be replaced with ``one-stop centers'' because 
the WIOA amendment to the Wagner-Peyser Act requires colocation of 
Wagner-Peyser ESs in a one-stop center. Additionally, expanding the 
scope of the term will help States determine not only at which one-stop 
centers ESs must be sufficiently staffed to meet the needs of MSFWs, 
but also will identify one-stop centers that need to consider the needs 
of a significant number of MSFWs who do not speak English, in order to 
meet the requirements for making services accessible, as described in 
Sec.  678.800. This also helps the Department conform to the intent of 
the Richey Order to serve MSFWs on a qualitatively equivalent and 
quantitatively proportionate basis. The term bilingual is proposed to 
be replaced with multilingual in the latter title to conform to the 
current trend of MSFWs speaking additional languages other than English 
and/or Spanish. Also, the references to ``applicants'' are proposed to 
be replaced with ``participants,'' to conform to the proposed changes 
in these definitions.
    The definition of Significant MSFW States remains unchanged; 
however, the reference to the Department organizational unit ETA has 
been replaced with the Department to be consistent with other 
references throughout the section.
    The definition of State Administrator is proposed to be revised to 
change ``State Employment Security Agency'' to ``State Workforce 
Agency'' to reflect language used in WIOA title I.
    The definition of State Workforce Agency (SWA) is proposed to be 
revised to conform to sec. 2 of the Wagner-Peyser Act, as amended by 
title III of WIOA. The language ``formerly State Employment Security 
Agency or SESA'' is proposed to be deleted because the SESA terminology 
is outdated and no longer needs reference.
    The definition of State Workforce Development Board (State Board) 
is proposed to be added to Sec.  651.10, moved from 20 CFR 652.1 and 
updated from the former text, which defined State Workforce Investment 
Board.
    The definition of Supply State(s) is proposed to be added to 
clarify its meaning under the ARS.
    The definition of supportive services is proposed to be revised to 
conform to the definition for ``supportive services'' in sec. 3 of WIOA 
and to make clear that supportive services are also available to

[[Page 20802]]

individuals participating in activities funded by the Wagner-Peyser 
Act.
    The definition of tests is proposed to be deleted because the 
Department does not offer tests to ES participants.
    The definition of training services is proposed to replace the 
definition of training, and the proposed definition references the 
services provided under WIOA sec. 134(c)(3).
    The definition of transaction is proposed to be deleted because the 
term is not used in the relevant sections under this chapter.
    A definition of unemployment insurance claimant is proposed to be 
added in this section to conform to the emphasis on serving this 
population in the WIOA amendments to secs. 7(a)(1) and (3) of the 
Wagner-Peyser Act.
    The definition of vocational plan is proposed to be deleted because 
the Wagner-Peyser Act does not require the establishment of such plans 
for job seekers in the ES system.
    The definition of WIOA is proposed to be added to Sec.  651.10, 
moved from 20 CFR 652.1 and updated. Section 652.1 defines WIA.
    The definitions of Workforce and Labor Market Information (WLMI) 
and Workforce Labor Market Information System (WLMIS) are proposed to 
conform to the provisions in sec. 308 of the Wagner-Peyser Act.
    The definition for working days is proposed to be added to 20 CFR 
651 because it is originally located in 20 CFR 653.501 and fits more 
appropriately under part 651.
    A definition of work test is proposed to be added in this section 
to ensure that individuals who are eligible for UI benefits meet 
continued eligibility requirements with respect to work search. The 
Wagner-Peyser Act's requirements for administering the work test are 
further discussed in 20 CFR 652.210.

N. Part 652--Establishment and Functioning of State Employment Services

Section 1. Introduction
    The Wagner-Peyser Act of 1933 established the one Act ES, which is 
a nationwide system of public employment offices amended in 1998 to 
make ES part of the one-stop delivery system established under WIA. ES 
seeks to improve the functioning of the nation's labor markets by 
bringing together individuals seeking employment with employers seeking 
workers.
    The amended Wagner-Peyser Act furthers longstanding goals of closer 
collaboration with other employment and training programs by mandating 
colocation of ES offices with one-stop centers; aligning service 
delivery in the one-stop delivery system; and ensuring alignment of 
State planning and performance measures in the one-stop delivery 
system. Other new provisions are consistent with long-term Departmental 
policies, including increased emphasis on reemployment services for UI 
claimants (sec. 7(a)); promoting robust WLMI; the development of 
national electronic tools for jobseekers and businesses (sec. 3(e)); 
dissemination of information on best practices (sec. 3(c)(2)); and 
professional development for ES staff (secs. 3(c)(4) and 7(b)(3)).
2. Subpart A--Employment Service Operations
    This subpart includes an explanation of the scope and purpose of 
the ES system, the rules governing allotments and grant agreements, 
authorized services, administrative provisions, and rules governing 
labor disputes. The proposed rule makes few changes in subpart A.
Section 652.1 Introduction
    This section introduces the Wagner-Peyser Act regulations, as 
amended by WIOA. Therefore, the Department proposes to delete paragraph 
(b) of Sec.  652.1 and change the title of the section from 
``Introduction and definitions'' to ``Introduction.''
Section 652.2 Scope and Purpose of the Employment Service System
    The Department proposes no changes in this section, which briefly 
describes the public labor exchange system.
Section 652.3 Public Labor Exchange Services System
    This section explains the minimum services that must be offered by 
the public labor exchange system. The Department proposes adding 
paragraph (f) to align the title to the changes in WIOA and cite to 
sec. 134(c)(2)(A)(iv) of WIOA.
    The Department proposes to align the Wagner-Peyser definitions of 
labor exchange services with those described under WIOA. The Department 
is seeking public comments on any issues or challenges in aligning 
labor exchange services described under WIOA with the labor exchange 
services provided by the ES.
    Finally, the Department proposes to add to Sec.  652.3(a) a clause 
to implement the emphasis the Act, as amended, places on national 
electronic tools (WIOA sec. 303(c), amending sec. 3(e) of Wagner-
Peyser). The proposed clause, which would clarify that each State's 
obligation to assist jobseekers includes promoting their familiarity 
with the Department's electronic tools, is designed to improve customer 
access to labor exchange and workforce information.
    The statutory provision recognizes the Department's longstanding 
efforts in this area. Since the 1990s, the Department has greatly 
expanded its national electronic tools to enhance short-term labor 
exchanges and support longer-term career aspirations for multiple 
audiences: Jobseekers; employers; students; employment and training 
staff; educators and guidance counselors; Federal, State and local 
policy-makers and planners; CBOs; librarians; and other individuals and 
entities that assist with the job search and career needs of Americans. 
The Department offers electronic tools through such Web portals as 
CareerOneStop (www.careeronestop.org); O*NET OnLine 
(www.onetonline.org) and O*NET's My Next Move (www.mynextmove.org); and 
the WLMI provided through the BLS (www.bls.gov) and the U.S. ETA's 
Labor Market Information Community of Practice (https://winwin.workforce3one.org/page/home).
Section 652.4 Allotment of Funds and Grant Agreement
    The Department proposes no changes in this section, which ensures 
that allotment information is publicly available with sufficient notice 
to allow public comment and to resolve complaints, and that grant 
agreements with the States meet all applicable statutes and 
regulations.
Section 652.5 Services Authorized
    The Department proposes only minor changes conforming to WIOA in 
this section, State expenditures. Specifically, the proposed 
regulations substitutes ``funds'' with ``sums'' and substitutes ``basic 
labor exchange elements'' with ``minimum labor exchange elements.'' 
Both changes were made to align with the Act as amended.
Section 652.8 Administrative Provisions
    This section covers administrative matters, including financial and 
program management information systems, recordkeeping and retention of 
records, required reports, monitoring and audits, costs, disclosure of 
information, and sanctions. The Department proposes to eliminate 
paragraph (d)(6) of this section which addressed amortization payments 
to

[[Page 20803]]

States which had independent retirement plans in their State ES 
agencies prior to 1980. This paragraph is no longer applicable to any 
State and no State may revert back to a retirement system where these 
provisions apply. The Department is also proposing to change the record 
retention requirements for work applications and job orders from 1 year 
to 3 years in order to align with other Wagner-Peyser record retention 
requirements. Finally, the Department proposes to amend paragraph (f) 
to require that financial audits be conducted under the same 
requirements that apply to audits under WIOA at 20 CFR 683.210.
Section 652.9 Labor Disputes.
    This section is designed to preserve the neutrality of the ES in 
the event of a labor dispute, such as a strike. The Department proposes 
no changes in this section, as WIOA made no amendments to the Wagner-
Peyser Act relevant to this section.
3. Subpart B--Services for Veterans
    This subpart merely refers the reader to the relevant regulatory 
section governing services to veterans.
Section 652.100 Services for Veterans
    The Department proposes to amend this section to clarify that 
veterans receive priority of service for all Department-funded 
employment and training programs, as described in 20 CFR part 1010. The 
proposed amendment also clarifies that the Department's Veterans' 
Employment and Training Service (VETS) administers the Jobs for 
Veterans State Grants (JVSG) program and other activities and training 
programs which provide services to specific populations of eligible 
veterans.
4. Subpart C--Wagner-Peyser Act Services in a One-Stop Delivery System 
Environment
    This subpart discusses State agency roles and responsibilities, 
rules governing ES offices, the relationship between the ES and the 
one-stop system, required and allowable Wagner-Peyser services, 
universal service access requirements, provision of services and work 
test requirements for UI claimants, State planning, and State merit 
staffing requirements.
    WIOA ensures the ES's key role in the one-stop delivery system by 
making it one of the core workforce programs. The ES must be a part of 
the State planning process, collocated with the one-stop delivery 
system, and must align its service delivery and performance measures 
with the rest of the one-stop system. This subpart addresses how the ES 
is to fulfill its mission of providing labor exchange services to job 
seekers and businesses in the one-stop delivery system.
Section 652.200 What is the Purpose of This Subpart?
    The general purpose of this subpart is to provide guidance for 
implementing Wagner-Peyser services within the one-stop delivery 
system.
Section 652.201 What is the role of the State agency in the one-stop 
delivery system?
    This section emphasizes the leadership role played by the State in 
the one-stop system, including the delivery of Wagner-Peyser services. 
The Department proposes changing ``Workforce Investment Board'' to 
``Workforce Development Board,'' to be consistent with WIOA's 
terminology.
Section 652.202 May local Employment Service Offices exist outside of 
the one-stop service delivery system?
    The Department is proposing to delete paragraph (b) of this section 
to align with WIOA's approach to colocation of services and prohibition 
against stand-alone employment service offices. Additionally, the 
Department proposes to change the text of what was paragraph (a) to 
provide a clear statement that ES offices must be collocated in one-
stop centers, as required by WIOA. WIA strongly encouraged the 
colocation of ES and one-stop offices, but allowed some stand-alone ES 
offices under limited circumstances. Section 303(d) of WIOA modified 
sec. 3(d) of Wagner-Peyser to eliminate these exceptions and made 
colocation mandatory. Therefore, stand-alone ES offices are no longer 
permissible, as explained in Sec. Sec.  678.310-678.315.
    Colocation is intended to achieve several purposes: improved 
service delivery and coordination, less duplication of services, and 
greater access to services in underserved areas.
Section 652.203 Who is responsible for funds authorized under the Act 
in the workforce investment system?
    The Department proposes no changes in this regulation, which 
stipulates that the State agency is responsible for all Wagner-Peyser 
funds.
Section 652.204 Must funds authorized under the Act (the Governor's 
reserve) flow through the one-stop delivery system?
    This section clarifies that the Governor's reserve funds may or may 
not be delivered through the one-stop system. The Department proposes 
to identify the services in sec. 7(b) of the Act that these funds must 
be used to provide. WIOA does not change these services; however, it is 
helpful to list the services in this section. As required by sec. 7(b) 
of the Act, the services are: performance incentives, supporting 
exemplary models of service delivery, and services for groups with 
special needs.
Section 652.205 May funds authorized under the Act be used to 
supplement funding for labor exchange programs authorized under 
separate legislation?
    The Department proposes only minor nomenclature changes in this 
section, which explains under what conditions funds under secs. 7(a) or 
7(b) of Wagner-Peyser may be used to provide additional funds to other 
programs.
Section 652.206 May a State use funds authorized under the Act to 
provide applicable ``career services,'' as defined in the Workforce 
Innovation and Opportunity Act?
    The Department is proposing in this section to align Wagner-Peyser 
service delivery with the service delivery changes in WIOA. Under WIA, 
non-training services were generally identified as either ``core'' or 
``intensive'' services. WIOA has removed the terms ``core'' and 
``intensive'' and these services are now called ``career services.'' 
The primary goal of the change to ``career services'' was to eliminate 
any sequencing of service requirements and to ensure participants had a 
broad array of services available to them based on a participant's 
employment needs.
    Proposed Sec.  678.430 organizes the WIOA career services into 
three categories: (1) Career services that must be made available to 
all participants; (2) career services that must be made available if 
deemed appropriate and needed for an individual to obtain or retain 
employment; and (3) follow-up activities. The proposed regulation 
respectively designates these categories as basic career services 
(Sec.  678.430(a)), individualized career services (Sec.  678.430(b)), 
and follow-up services (Sec.  678.430(c)).
    Labor exchange services, which are the primary services provided by 
the ES, fall under the ``basic career services''

[[Page 20804]]

identified in proposed Sec.  678.430(a) and listed in sec. 134(c)(2)(A) 
of WIOA. This section is designed to provide that Wagner-Peyser staff 
must use funds authorized by sec. 7(a) of the Act to provide the basic 
career services.
    Individualized career services are identified in proposed Sec.  
678.430(b) and listed in sec. 134(c)(2)(A)(xii) of WIOA. These services 
involve more dedicated staff time to provide. These services are 
similar to intensive services and they may be provided as appropriate. 
The primary services the ES provides are labor exchange services, which 
are identified by the Department as basic career services. The 
Department proposes that the ES staff may also provide individualized 
career services, paid for from funds authorized under sec. 7(a) of the 
Act, in a manner consistent with the requirements of the Wagner-Peyser 
Act. Additionally, the Department wishes to clarify that the funds can 
be used to provide any of the individualized services defined in 
proposed Sec.  678.430(b) and sec. 134(c)(2)(A)(xii) of WIOA; there is 
no limit that the funds can only be used for particular individualized 
services. However, these Wagner-Peyser funds may not be used to provide 
training services.
    The Department is seeking comments on how services provided by the 
ES can be more aligned with other services in the one-stop delivery 
system and ensure participants can receive seamless services from the 
ES to other programs under WIOA.
Section 652.207 How does a State meet the requirement for universal 
access to services provided under the Act?
    This section provides States discretion in meeting universal access 
to service requirements, and explains the requirements, including how 
those services must be delivered. The section specifies that labor 
exchange services may be provided through self-service, facilitated 
self-help service, and staff-assisted services. The Department is 
proposing to include ``virtual services'' as a type of self-service. 
The Department recognizes the valuable virtual and online services that 
States provide through the ES, and seeks to include these services as 
self-services.
    The Department also proposes changes in this section to tie it to 
the mandatory services described in Sec.  652.206. The revised 
provision would replace the reference to core and intensive services 
with reference to career services made mandatory by an amended Sec.  
652.206.
Section 652.208 How are applicable career services related to the 
methods of service delivery described in this part?
    This section explains how career services may be delivered to meet 
the requirements for access described in proposed Sec.  652.207(b)(2). 
The Department proposes to include ``virtual services'' as a type of 
self-service provided by the ES, recognizing these important services 
provided by States. The Department is also proposing to replace the 
reference to ``core services and intensive services'' with a reference 
to ``career services'' per WIOA.
Section 652.209 What are the requirements under the Act for providing 
reemployment services and other activities to referred unemployment 
insurance claimants?
    The Wagner-Peyser Act authorizes funding for States to deliver a 
wide array of labor exchange services to jobseekers. This regulation 
clarifies the required and allowable Wagner-Peyser services to UI 
claimants, as a subset of the broader ES beneficiary population.
    WIOA added language to sec. 7(a) of the Wagner-Peyser Act 
reemphasizing the use of funds to support reemployment and related 
services to UI claimants. These changes strengthen the connectivity 
between the ES and the UI systems, and broaden opportunities for these 
systems to help UI claimants return to employment as quickly as 
possible. Coordination of labor exchange services and UI claimant 
services is essential to ensure an integrated approach to reemployment 
strategies. Wagner-Peyser funds may also be used to administer the work 
test for the State unemployment system for UI eligibility assessments. 
Additionally, the ES may provide UI claimants with referrals to, and 
application assistance for, education and training resources and 
programs as appropriate. Such resources include those provided through 
the Higher Education Act and State-specific educational assistance 
programs, veterans' educational assistance programs, WIOA education and 
training programs, and VR services.
    The Department proposes two types of changes in Sec.  652.209: one 
to clearly require services to UI claimants, and the other to implement 
new statutory provisions. The proposed text deletes the existing Sec.  
652.209(a) language that services must be provided ``to the extent 
funding is available,'' because it is implied and the Department 
encourages reemployment assistance to UI claimants.
    The proposed text includes in Sec.  652.209(b)(2) a reference to 
``conducting eligibility assessments'' to conform with sec. 7(a)(3)(F) 
of the Wagner-Peyser Act, as amended by WIOA, and includes a 
requirement that where applicable, UI claimants must be registered for 
ESs in accordance with the UC law of the State with which they file 
their claim. The States may use Wagner-Peyser funds to pay for 
eligibility assessments, which is a required activity that must be made 
available when appropriate.
    Additionally, in Sec.  652.209(b)(3) the Department proposes to 
require that States provide referrals and application assistance to UI 
claimants, consistent with the new statutory language in sec. 
7(a)(3)(G) of the Wagner-Peyser Act and includes a reference to the 
Post-9/11 GI Bill which staff may also refer participants to as well as 
other veterans educational assistance.
Section 652.210 What are the Act's requirements for administration of 
the work test, including eligibility assessments, as appropriate, and 
assistance to unemployment insurance claimants?
    This section clarifies the requirement for administration of the 
work test to UI claimants. The proposed changes provide more 
specificity about required services.
    The Department proposes to include a reference to ``conducting 
eligibility assessments'' to conform with sec. 7(a)(3)(F) of the 
Wagner-Peyser Act. The States may use Wagner-Peyser funds to pay for 
eligibility assessments, which are a required reemployment activity 
that must be made available when appropriate. Proposed new language was 
also added to Sec.  652.210(b)(3) to ensure that ES staff provide 
information about UI claimants' ability or availability for work, or 
the suitability of work offered to them, to UI staff. Sharing such 
information with UI staff will help accelerate claimants' return to 
employment.
Section 652.211 What are State planning requirements under the Act?
    The Department is proposing to remove the planning provisions of 
this part of the regulation, including the text in Sec. Sec.  652.211 
through 652.214, because the ES is a core program under WIOA and falls 
under both the unified and combined planning requirements. This section 
has been amended to simply provide a citation to the State planning 
requirements under WIOA.

[[Page 20805]]

Section 652.215 Do any provisions in the Workforce Innovation and 
Opportunity Act change the requirement that State merit staff employees 
must deliver services provided under the Act?
    This section stipulates that only State merit staff may provide 
Wagner-Peyser services. The only change proposed in this section is to 
change ``WIA'' to ``WIOA'' in the section question; the remainder of 
the text has not changed from the existing regulation. The Department 
has followed this policy since the earliest years of the ES, in order 
to ensure minimum standards for the quality of the services provided. A 
1998 U.S. District Court decision, Michigan v. Herman, 81 F. Supp. 2nd 
840 (http://law.justia.com/cases/federal/district-courts/FSupp2/81/840/2420800/) upheld this policy. State merit staff employees are directly 
accountable to State government entities, and the standards for their 
performance and their determinations on the use of public funds require 
that decisions be made in the best interest of the public and of the 
population to be served. State merit staff meet objective professional 
qualifications and provide impartial, transparent information and 
services to all customers while complying with established government 
standards.
Section 652.216 May the one-stop operator provide guidance to State 
merit staff employees in accordance with the Act?
    This section clarifies that ES staff may receive guidance from a 
one-stop operator about the provision of labor exchange services, but 
that all personnel matters remain under the authority of the State 
agency. The only change proposed in this section is to add a reference 
to proposed Sec.  678.500, which provides the requirements for the 
local MOU. The Department seeks comment on whether any other changes 
are needed to allow the one-stop operator to ensure the efficient and 
effective operation of the one-stop center.
5. Subpart D--Workforce and Labor Market Information
    Secretary of Labor's role concerning the Workforce and Labor Market 
Information System (WLMIS). The Wagner-Peyser Act, as amended by and 
integrated with WIOA, envisions a robust WLMIS that is a critical 
underpinning for a wide array of workforce functions, including: (1) 
Supporting State and regional planning of workforce strategies that 
provide a pipeline of workers with in-demand skills and drive economic 
growth and development; (2) delivery of quality labor market and career 
information that enables workforce professionals to provide quality 
career counseling; and (3) enabling the workforce system's customers to 
make informed career and service delivery choices. New provisions in 
Wagner-Peyser provide for a collaborative process, led by the Secretary 
of Labor in partnership with Federal agencies, the newly created 
Workforce Information Advisory Council (WIAC), and States, to develop 
and implement a strategic plan that continuously improves the labor 
market and workforce information available through the workforce 
system. The Act describes certain key components of the WLMIS and 
commits the Secretary of Labor to oversee and ensure the competent 
management of the system.
    Wage records are a critical data source for WLMIS. When combined 
with data from other sources, wage records produce a wide array of 
labor market information used to inform economic development, support 
career counseling, identify training needs, inform industry sector 
workforce strategies, and assist with other facets of a job-driven 
workforce system.
    For example, through agreements with States, wage records are used 
to produce the following aggregate reports and data that support the 
objectives listed above:
     The United States Census Bureau's Longitudinal Employer-
Household Dynamics Program including the:
    [cir] Quarterly Workforce Explorer, that provides worker residence 
and work place location data and critical employment and business 
related data including hiring, worker separations, and turnover rates, 
at State, county, metro and Workforce Development Board areas;
    [cir] OnTheMap, that provides geographic information system (GIS) 
capabilities to map worker origin and destination information on detail 
map overlays in customized geographic areas at a Census block level; 
and
    [cir] OnTheMap for Emergency Management tools, that provides GIS 
capabilities to map natural disasters including fire, flood, and storm 
and the impact on workers and businesses in customized geographic areas 
at the Census block level area.
     The DOL's Bureau of Labor Statistics Quarterly Census of 
Employment and Wages, which provides a complete count of employment and 
wages, classified by industry and based on quarterly reports filed by 
employers for over 9 million establishments subject to unemployment 
insurance laws.
    Continuous improvement, in part through consultation. The Act 
requires the Secretary of Labor to oversee, and the States to pursue 
actively, the ``continuous improvement'' of the WLMIS.\3\ The Act, 
throughout, describes components of the system and ways in which the 
Secretary and the States must act to discharge their duties under the 
Act, including their duties related to ``continuous improvement.'' 
Proposed Sec.  652.300(a) is a general statement implementing this 
requirement. It provides, as does the Act, that the Secretary must 
oversee the development, maintenance, and continuous improvement of the 
WLMIS. The reference to Wagner-Peyser sec. 15 simply signals the 
section where the WLMIS is defined; the provision does not mean to 
state that sec. 15 is the only section where the duty of continuous 
improvement is created.
---------------------------------------------------------------------------

    \3\ Based on internal Department of Labor data. This figure 
includes the 50 States, the District of Columbia, American Samoa, 
Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin 
Islands.
---------------------------------------------------------------------------

    Proposed Sec.  652.300(b) implements the Secretary's more specific 
duties with regard to the WLMIS, as they are described in Wagner-Peyser 
sec. 15(b)(2). The proposed regulation closely tracks the statute with 
respect to duties related to collection, analysis, and dissemination of 
workforce and labor market information. These include, for example, the 
duty to eliminate gaps and duplication in statistical undertakings. The 
Act also identifies certain activities that should be considered to 
improve data sources. For example, sec. 15(b)(2) requires the 
Secretary, to ensure that data collected is consistent with appropriate 
Bureau of Labor Statistics standards and definitions and understandable 
to users of such data; and to develop consistent procedures and 
definitions for use by States in the collection of data. Earlier, in 
sec. 15(a)(1)(E), the Act requires that the WLMIS include ``procedures 
to support standardization and aggregation of data from administrative 
reporting systems.''
    Recognizing the breadth of these and other requirements it imposes 
on the Secretary, the statute--at sec. 15(b)(2)--establishes an 
expectation that the Secretary will discuss and fulfill the 
requirements in active collaboration with the WIAC, Federal agencies, 
and States. Proposed Sec.  652.302(b) incorporates this consultation 
requirement, while reserving our authority to consult with other 
stakeholders. To the extent that the data

[[Page 20806]]

and tools used in the context of the WLMIS are owned by other Federal 
agencies, such as LEHD data which is owned by the Census Bureau subject 
to the authority of title 13 of the U.S. Code, the Secretary of Labor 
will work collaboratively with the owners of such data or data tools to 
coordinate the use of those tools with the WLMIS and to identify 
potential enhancements, but the Secretary of Labor has no direct 
authority with regard to those tools.
    Proposed Sec.  652.300 works in conjunction with certain amendments 
to 20 CFR part 651. In order to clarify the Secretary's jurisdiction 
with respect to the Employment Service and related workforce systems--
in particular, with respect to responsibilities related to ``continuous 
improvement,'' performance assessment, and collection and management of 
information--the Department proposes new regulatory definitions for 
``Workforce and Labor Market Information'' (WLMI) and ``Workforce and 
Labor Market Information System'' (WLMIS). Those proposed definitions 
appear in part 651.
    Definition of ``wage record.'' The proposed definition of WLMI that 
appears in part 651 lists numerous components, including ``wage 
records.'' The Wagner-Peyser Act does not define ``wage records.'' To 
clarify the Secretary's responsibilities with respect to that component 
of WLMI, however, the Department proposes to define ``wage records'' in 
a new section under part 652, Sec.  652.301.
    Proposed Sec.  652.301 defines ``wage records'' for purposes of the 
Wagner-Peyser Act, including amendments to Wagner-Peyser relating to 
the WLMIS. The Department proposes to define ``wage record,'' for these 
purposes, as records that contain ``wage information'' as defined in 
the Department regulations at 20 CFR part 603. Part 603, among other 
things, implements the requirements of the Social Security Act 
governing the now-established Income and Eligibility Verification 
System (IEVS). Federal law requires each State participating in the 
Federal-State unemployment compensation (UC) program to have in place 
an IEVS through which it exchanges information with certain Federal 
agencies to help determine applicants' eligibility and amount of 
benefits for UC and several Federal financial assistance programs. 
(Social Security Act (SSA) secs. 303(f), 1137; 20 CFR 603.20-603.23.)
    As part of its IEVS, every State must collect certain information--
including ``wage information'' as defined in 20 CFR 603.2(k) and 
referred to here as ``wage records''--from applicants for these 
programs, employers in the State, or relevant State or Federal 
agencies. (SSA sec. 1137.) In the context of establishing 
confidentiality requirements for State UC data, the Federal regulation 
at 20 CFR 603.2(k) defines ``wage information'' to mean information in 
the records of a State UC agency, and information reported under 
provisions of State law that meets the requirements of an IEVS, that 
may fall into any one of three categories: (1) ``wages paid to an 
individual''; (2) the individual's SSN(s); and (3) the name, address, 
State, and FEIN of the employer that paid the wages. (20 CFR 603(k)) 
Normally, a State collects this information through the quarterly 
``wage reports'' employers file with the State (referred to in 20 CFR 
603.2(j) and SSA sec. 1137(a)(3)). States may, based on their need, 
require employers to report additional data--beyond these three 
categories--in their wage reports, whether for unemployment insurance 
purposes or for other purposes. It is the combination of these data 
collections that are referred to, broadly, as ``wage records.''
    The new, proposed definition of ``wage records'' in Sec.  652.301 
helps meet the legislative intent for consistency by standardizing, the 
definition of ``wage records'' across regulations governing WIOA 
activities, Wagner-Peyser activities, and disclosure of confidential UC 
information. Part 603--which uses the term ``wage information'' is the 
basis for the definition of ``wage records'' in proposed Sec.  
652.301--in part serves to allow States to disclose specific 
confidential wage information to help meet Federal reporting 
requirements for certain programs and activities funded under WIOA and 
Wagner-Peyser. As proposed, the definition in Sec.  652.301 is also 
consistent with the definition of ``quarterly wage record information'' 
under 20 CFR 677.175,\4\ which requires States to use essentially the 
same data elements in ``wage records'' to formally assess their 
performance for purposes of performance reporting. (For additional 
explanation of the relationship between these three sections, and the 
distinction between the provisions authorizing State use of certain 
wage data and those authorizing States to disclose essentially the data 
for purposes of Federally-required performance reporting, see the 
Department's proposal to amend its regulations at 20 CFR part 603, 
accompanying this proposal to amend the Wagner-Peyser regulations.)
---------------------------------------------------------------------------

    \4\ Ibid.
---------------------------------------------------------------------------

    Secretary of Labor's role concerning wage records under WIOA. 
Proposed Sec.  652.302 explains how the Secretary's responsibilities 
concerning the WLMIS apply to the wage record component of WLMI. That 
is, the proposed regulation reflects how the Department would apply the 
broader Wagner-Peyser expectations for improvement of labor market data 
sources, including those related to consistency and standardization, to 
one specific source--wage records.
    Proposed Sec.  652.302(b) would clarify that pursuant to his/her 
responsibility to oversee the development, maintenance, and continuous 
improvement of the WLMIS, including the numerous duties set forth in 
the Act and restated throughout this preamble, the Secretary will seek 
to develop standardized definitions of the data elements in wage 
records, and improved processes and systems for the collection of and 
reporting of wage records. As proposed, this provision would authorize 
the Secretary to develop common data definitions and standardized 
reporting formats that are consistent across States.
    Proposed Sec.  652.302(a) would work in conjunction with the 
proposed definitions of WLMI and WLMIS in part 651 to clarify that wage 
records are, in fact, included in and source data for WLMI.
    Consistency of wage records. On the matter of wage records, a 
number of areas have, in recent years, required policy discussions 
between the Department and States and other stakeholders. Of these 
discussions, the one on consistency has gained momentum.
    State wage records today, while they are a critical component of 
the WLMIS, suffer from inconsistencies that impede better management of 
WLMI, and of the ES more broadly. Wage records have always been a 
critical data source for administration of the UI program as well as 
other Federal programs, providing information that supports eligibility 
determinations and identification and reduction of improper payments. 
Wage records have increased importance today because States are 
required to use them to evaluate State performance of the workforce 
system and education and training providers. Additionally, wage records 
play a key role in Federal evaluations of the workforce system's 
programs. The expanded use of wage records for such a wide range of 
purposes requires consistency and quality of the data in order to 
maximize its use.
    Regrettably, such consistency is lacking. The wage data employers 
must report on their quarterly wage reports to their State and the 
formats they must use to report it vary, State-by-State. While 
employers filing wage reports described in Federal regulations at 20

[[Page 20807]]

CFR 603.2(j) must, at a minimum, report the three data elements 
described in 20 CFR 603.2(k), State law may require them to report 
additional elements. And because States differ in how they define 
certain data elements--including the three elements listed in Sec.  
603.2(k)--different States may prescribe different reporting formats 
for the same data elements. This means that the same type of data 
(employee SSN, employee name, employee address) may look different, 
from State to State, when placed on the form. For example, some States 
only require the first several numbers of workers' SSN. Such 
differences in State reporting requirements, and the variation they 
generate in the type of data and the format of data collected, set up a 
significant barrier to data quality and data consistency. They make it 
hard for data users to effectively match wage records across the 
States. This interferes with the effective and efficient measure of 
performance, program evaluation, income verification under sec. 1137 
SSA, and detection of improper benefits payments in multiple Federal 
programs.
    Consultations with stakeholders over the years, as well as our own, 
longstanding program experience, lead the Department to believe that 
adoption of standardized definitions of data elements, and processes 
and systems for collecting and reporting wage records across all 
States, could greatly enhance the usability of the wage records and the 
ability to easily merge the data they contain with other data sets. 
Standardized definitions, collection processes, and systems also could 
reduce employer burden, given that multi-State employers and their 
third-party administrators now have to report wages to States in many 
different formats. With such enhancements, State wage records would 
contain data that have the potential to create more comprehensive and 
powerful workforce and labor market information. Such an approach would 
also help implement the statute's requirement for consistency.
    Other Federal statutes support making significant improvements in 
wage records as a data source. A number of Federal statutes now place 
emphasis on wage records and data standardization. WIOA and the Middle 
Class Tax Relief and Job Creation Act of 2014, for example, require the 
Department to make the labor market data it oversees or generates, even 
more consistent and meaningful. WIOA emphasizes the use of wage records 
for performance and evaluations of the workforce system. The Job 
Creation Act focus on data standardization.
    Section 2104 of the Job Creation Act requires the Secretary to 
promote data exchange standardization through regulation in the 
delivery of the UI program, including as it relates to supporting the 
reemployment of unemployed workers. Data exchange standards include use 
of interoperable standards; use of widely accepted, non-proprietary, 
searchable, and computer readable formats; and use of existing non-
proprietary standards, such as the eXtensible Markup Language. A key 
component of data exchange standardization is ensuring that the data 
the States are sharing is consistent. As addressed above, it is 
impossible to accurately exchange and match data that has different 
elements and different requirements for the common elements. The 
Secretary cannot achieve data exchange standardization in the UI 
program if the data elements cannot be accurately exchanged and 
matched. Therefore, the Department interprets the requirement in the 
Job Creation Act to standardize data exchange to include the 
requirement that the Secretary consult with the WIAC and develop a set 
of common data definitions.
    The Wagner-Peyser Act, especially when read in the context of these 
two other statutes and the amendments made to it by WIOA, exhibits the 
same focus and expectation. Proposed Sec. Sec.  652.300 through 652.303 
enable all of this work to proceed through a collaborative approach 
that brings in other Federal agencies, States, and the public through 
the newly constituted WIAC.
    Consultations with the WIC and WIAC to improve wage records and the 
WLMIS. Of course, consistency is not the only concern or area of 
consultation with stakeholders. There is a long history of interest and 
discussions among Federal and State agencies and data users about the 
desirability of making a variety of improvements to wage records that 
would increase their value and usability. Among these was an effort in 
the 1990s referred to as the Simplified Tax and Wage Reporting System 
(STAWRS).
    More recently, a subgroup of the Workforce Information Council \5\ 
established under WIA has been researching and developing reports on 
how to enhance the content of wage records to support improvements in 
labor market and workforce information. The working group is currently 
considering possible enhancements, such as adding data elements to the 
information States collect from employers through the wage reports 
under 20 CFR 603.2(j), and the potential impact of those enhancements, 
on State workforce agencies and businesses. This work will result in 
recommendations to the WIC in the coming year and will provide strong 
foundational information to support the Secretary's work with the WIAC 
when it is established. (See discussion on WIAC elsewhere in this 
proposed rule.)
---------------------------------------------------------------------------

    \5\ Ibid.
---------------------------------------------------------------------------

    As discussed elsewhere, sec. 15(d) of the Wagner-Peyser Act 
requires the WIAC to evaluate the WLMIS System and make recommendations 
to the Secretary on how to improve the WLMIS. Section 15(b) requires 
the Secretary to receive and evaluate the WIAC's recommendations and 
respond to these recommendations in writing. At the appropriate time, 
the WIAC will make recommendations for improving the WLMIS. These 
recommendations could range from technical improvements to the system, 
such as improving the technology States use to gather and report data, 
to more substantive changes to the system, such as standardizing data 
elements to facilitate comparisons and provide job seekers easy to 
understand information about the labor market.
    To the extent that the Secretary's consultations with the WIAC and, 
potentially, other stakeholder groups result in proposals to change, 
enhance, or expand wage record data elements, the Secretary will 
carefully consider the potential benefits and costs of these proposals 
on the workforce system, and work with the Congress, other Federal 
agencies, States, the WIAC, and other stakeholders to explore possible 
ways to implement the recommendations. If appropriate, the Department 
will engage in further rulemaking or seek legislative authority.
    Data elements associated with wage records. Potentially 
establishing new data elements to wage records that employers in all 
States must report could have benefits similar to standardization. For 
example, knowing individuals' occupations, along with the wages they 
earned, would be extremely valuable. Such additional information would 
greatly assist in performance reporting and program evaluation under 
WIOA, in the identification of skill shortages by detailed geographic 
area to inform labor market training programs, and in the analysis of 
the long-term impact of education and training programs on labor market 
outcomes. It is likely that the WIAC will explore the value and 
viability of adding this and, potentially, other data elements. As 
discussed above, the current WIC is researching this issue and 
developing reports that will provide additional

[[Page 20808]]

information that is likely to be passed on to the WIAC for 
consideration.
    On January 31, 2014, the WIC released its ``Phase One Interim 
Report on Current Practices of Unemployment Insurance Wage Record 
Collection and Use.'' This report analyzed the results of a State 
survey on the benefits of and barriers to enhancing labor market 
information by adding data elements to the quarterly wage reports 
employers submit to States as defined in 20 CFR 603.2(j). Among other 
things, the WIC's survey asked States what additional data elements, 
aside from Federally-required wage information, States require 
employers to report. The Phase One Interim Report can be found at: 
http://www.workforceinfocouncil.org/Documents/Wage%20Report%20Final.pdf. While not all States responded, Alaska, 
Iowa, Minnesota, New Jersey, Ohio, Oregon, Pennsylvania, Rhode Island, 
Vermont, the Virgin Islands, Washington, and Wyoming reported already 
collecting additional data elements in the quarterly wage reports. The 
additional elements included the Code, total hours worked in a quarter, 
total number of weeks worked in a quarter, pay type (salary or hourly), 
hourly pay rate, gender, job title, worksite address, zip code, and 
tips. Some of the responding States reported that the additional data 
elements are extremely helpful for estimating hourly earnings, 
understanding career progression from occupation to occupation, 
assessing the effectiveness of workforce training, and making 
occupational projections. One State pointed out that knowing the 
employee worksite information helped with UC claim filing.
    Asking employers to report and States to collect additional data or 
data categories through quarterly wage reports, would expand the data 
collections for many States. The Department is committed to strong 
stakeholder consultation as strategies are developed to improve and 
enhance wage records and to striking the appropriate balance between 
the burden of any new data collection and the value of any additional 
data elements. In the event the WIAC and/or other stakeholder 
consultations generate recommendations for such enhancements, the 
Department will consider additional rulemaking or seek legislative 
authority, if appropriate.
    Request for comment. The Department is interested in receiving 
comments from States that responded to the survey, and any other States 
that require additional data elements in quarterly wage reports, on the 
challenges and benefits of requiring additional data elements in the 
quarterly wage reports. The Department is also interested in receiving 
comments from employers and payroll processors who provide occupational 
data for the quarterly wage records.
    Applying 20 CFR part 603 to wage records. Finally, the regulation 
proposed for new Sec.  652.303 would clarify that wage records are 
subject to and protected by the Department's regulations at 20 CFR part 
603, which govern confidentiality and disclosure for confidential UC 
information, including the ``wage information'' that make up ``wage 
records.'' Nothing in Sec. Sec.  652.300 through 652.302 changes the 
confidentiality requirements of 20 CFR part 603. Information contained 
in ``wage records'' that is confidential under Sec. Sec.  603.2(b) and 
603.4 remains confidential in accordance with those sections of the 
confidentiality and disclosure requirements of subparts A and B of part 
603. The Department proposes this provision to further ensure the 
confidentiality of the information in the State UC system.

O. Part 653--Services of the Employment Service System

    In subparts B and F, the Department proposes to implement the WIOA 
title III amendments to the Wagner-Peyser Act and to streamline and 
update certain sections to eliminate duplicative and obsolete 
provisions. Despite these changes, part 653 will remain consistent with 
the ``Richey Order'', which allows revisions as long as they are 
consistent with the Richey Order. NAACP v. Brennan, 9174 WL 229, at *7.
Section 653.100 Purpose and Scope of Subpart
    Proposed Sec.  653.100 explains that the regulations under part 653 
seek to ensure that all services of the workforce development system be 
available to all job seekers in an equitable fashion. This section 
includes language currently at Sec.  653.101 that explains the purpose 
and scope of part 653. This approach is consistent with the 
Department's current policy and requiring equal access and treatment to 
all services available through the workforce development system is also 
consistent with the purpose and terms of the Richey Order.
Section 653.101 Provision of Services to Migrant and Seasonal 
Farmworkers
    The Department proposes to delete Sec.  653.101 because its 
provisions have been moved to Sec.  653.100 or concern itinerant or 
satellite offices that have been replaced by one-stop centers that 
provide services to both MSFWs and non-MSFWs.
Section 653.102 Job Information
    The Department proposes to make several changes to Sec.  653.102:
    (1) That State agencies make job order information conspicuous and 
available to MSFWs ``. . . by all reasonable means'' rather than ``in 
all local offices'' to reflect the obligation of State agencies to 
contact MSFWs who are not being reached by the normal intake activities 
including at their working, living or gathering areas to explain the 
services available at the local one-stop center;
    (2) That the language in Sec.  653.102 referring to ``computer 
terminal, microfiche, hard copy, or other equally effective means'' be 
replaced with ``internet labor exchange systems and through the one-
stop centers'' to conform to technological advances and current 
techniques of States' internet-based labor exchange systems;
    (3) That the reference to ``each significant MSFW local office'' be 
replaced with ``employment service offices'' to require each ES office 
to provide adequate staff assistance to MSFWs to more fully conform 
with the Richey Order, which requires the Department to ensure that 
MSFWs are serviced in a quantitatively proportionate and qualitatively 
equivalent way to non-MSFWs;
    (4) That offices designated as significant MSFW multilingual ES 
offices must provide services to MSFWs in their native language, 
whenever requested or necessary and to acknowledge that Spanish is not 
the only native language spoken by MSFWs whose first language is not 
English.
Section 653.103 Process for Migrant and Seasonal Farmworkers To 
Participate in Workforce Development Activities
    The Department proposes to revise the heading in Sec.  653.103 to 
``Process for migrant and seasonal farmworkers to participate in 
workforce development activities'' to align it with language used in 
titles I and III of WIOA, which refer to ``workforce development 
activities.''
    Proposed Sec.  653.103(b) includes new language requiring that 
persons with LEP receive, free of charge, the language assistance 
necessary to afford them meaningful access to the programs, services, 
and information offered by one-stop centers. The Department also 
proposes to remove the reference to Sec.  653.105 because we propose to 
eliminate that section.
    In proposed Sec.  653.103(c), the Department proposes to add the 
words ``or in their native language'' to further

[[Page 20809]]

acknowledge that Spanish is not the only native language spoken by 
MSFWs whose first language is not English, and to remove language 
regarding checking the accuracy and quality of applications because 
such actions are part of compliance reviews which are addressed in 
Sec.  653.108.
    The Department also proposes to remove paragraphs (d) through (h) 
from Sec.  653.103, that refer to application cards and an application 
process that are generally no longer used, having been replaced by 
online resources. Instead, it is proposed in paragraph (d) that local 
ES offices ``refer and/or register the MSFW in accordance with the 
established procedures defined in the relevant regulations(s) or 
guidance.''
    The Department proposes to remove Sec.  653.104(a) because MSFWs 
receive equitable ESs regardless of family status. The provision of 
services for all Wagner-Peyser participants is not dependent upon 
whether their family members are participating in the ES system. It is 
also proposed that paragraphs (b) and (c) regarding applications from 
an individual for employment as a farm labor contractor, and 
agricultural job orders submitted by a farm labor contractor or farm 
labor contractor employee, be relocated to Sec.  653.500 because that 
addresses the ARS.
    It is proposed that Sec. Sec.  653.105 and 653.106 be deleted as 
they are generally obsolete and because State agencies no longer make 
referrals to or operate day-haul facilities. Additionally, it is not 
anticipated that State agencies will make referrals to or operate day-
haul facilities in the foreseeable future in part because WIOA title I, 
sec. 121(e)(3) requires the colocation of Wagner-Peyser services. 
Should those activities resume in the future, however, the Department 
will ensure compliance with the requirements of the Richey Order 
concerning any day-haul referrals and day-haul locations operating 
under ES supervision. The Department also proposes to remove paragraph 
(c) of Sec.  653.106 as it is unnecessary because it references 
Sec. Sec.  653.107(j) and 653.108(p) concerning outreach visits to, and 
monitoring of day-haul facilities. Those outreach obligations remain, 
as revised, in proposed Sec.  653.107.
Section 653.107 Outreach and Agricultural Outreach Plan
    The Department proposes to restructure and reorganize Sec.  653.107 
to facilitate a better understanding of State agency responsibilities, 
outreach worker responsibilities, and ES office responsibilities 
relating to outreach and the Agricultural Outreach Plan (AOP). The 
Department anticipates that the reorganization will allow the relevant 
entities to identify their responsibilities under this section.
    Currently, the AOP is submitted annually as a modification to the 
WIA under title I and the Wagner-Peyser Integrated or Unified Workforce 
Plan. As required by sec. 8 of the Wagner-Peyser Act, and as amended by 
sec. 306 of WIOA, States must now submit their Wagner-Peyser plan as 
part of the Unified or Combined State Plan described in WIOA secs. 102 
and 103, respectively. In order to streamline the plan submission 
process for States, the Department proposes to require that States 
include their AOP with their Unified or Combined State Plan. As the 
State Plans are required every 4 years, the Department proposes to 
require that the AOP be submitted every 4 years. The Department notes, 
however, that the Richey Order requires much of the information 
submitted through the AOP to be submitted annually. Therefore, in order 
to balance the goal of streamlining the State planning process with the 
need to comply with the Richey Order, the Department proposes that the 
Annual Summary required at 20 CFR 653.108(s) include outreach data and 
an update on the State's progress toward accomplishing its goals set 
forth in the AOP. In proposed paragraph (d), the Department explains 
the basic requirements of the AOP and the Annual Summaries and explain 
that official guidance will be forthcoming. Additionally, terminology 
in proposed Sec.  653.107 is revised, when appropriate, to better align 
its terms with corresponding terms in WIOA which will be used in the 
Unified State Plan.
    The Department also proposes the following changes to Sec.  
653.107:
    (1) The heading is proposed to be replaced with ``Outreach and 
Agricultural Outreach Plan (AOP)'' to make clear that information 
regarding the AOP can be found in this section;
    (2) The term ``Outreach Program'' used in paragraph (a) is proposed 
to be replaced by ``Outreach'' to broaden the scope of the section to 
accurately reflect the various requirements regarding outreach and that 
the section is not a formulaic program;
    (3) References in paragraph (a) to the Outreach Plan have been 
relocated, in revised form, to paragraph (d) that concerns the 
``Agricultural Outreach Plan (AOP)'' or ``Annual Summaries,'' or 
reserved for use in future official Department guidance (the Department 
will include AOP guidance as part of its Unified State Plan guidance);
    (4) A requirement has been added to paragraph (a) for each State 
agency to employ outreach workers to conduct outreach in their service 
areas (full or part time staff may be hired depending on whether the 
State has a significant MSFW population). This addition is proposed to 
help each State meet its requirement under the current 20 CFR 
653.107(a) to locate and contact MSFWs who are not being reached by the 
normal intake activities conducted by the local ES offices. The Richey 
Order influenced the language for this proposed addition, as it states 
that ``each State agency shall employ an adequate number of staff who 
shall be assigned to ES offices. . . . ;''
    (5) Paragraph (a)(4) has been revised to clarify that the 
Department, through guidance, will identify the 20 States with the 
highest estimated year-round MSFW activity;
    (6) Delete paragraph (b)(2) because all outreach efforts must be 
vigorous. This change does not signal a reduction in the required 
intensity of outreach activities;
    (7) The language in paragraph (h)(3)(i) be relocated to Sec.  
653.107(a)(4) and be revised to require the ``top 20 States,'' that is 
the 20 States with the highest estimated year-round MSFW activity, to 
hire year-round full-time outreach staff to help ensure that more 
farmworkers will be reached on a year-round basis in high activity 
areas than are reached at present. The remaining States must hire part-
time outreach staff year-round and must hire full-time outreach staff 
during periods of peak MSFW activity. These provisions are proposed to 
balance the urgent need for outreach with the reality of limited staff 
resources available to the States. Additionally, it is proposed that 
the option for the Regional Administrator to grant a deviation from the 
requirements in this paragraph be deleted to ensure that States have a 
means to contact MSFWs who are not being reached by the normal intake 
activities conducted by the local ES offices and to encourage them to 
strive for ``the development of strategies for providing effective 
outreach to and improve access for individuals and employers who could 
benefit from services provided through the workforce development 
system,'' as stated at WIOA sec. 101(d)(3)(c);
    (8) The reference to local offices in Sec.  653.107(b)(4)(vi) has 
been updated to ``one-stop center.'' In this section ``one-stop 
centers'' refers to both comprehensive and affiliate one-stop centers;
    (9) The language in current Sec.  653.107(j)(1)(v) be relocated to 
proposed Sec.  653.107(b)(2) and revised by inserting the words 
``employer's property or work area'' and changing the words 
``permission of the employer'' to

[[Page 20810]]

``permission of the employer, owner or farm labor contractor'' because 
the employer may not always be the appropriate person to grant such 
permission;
    (10) The reference to unemployed and employed MSFWs in current 
paragraph (j)(2)(ii) be deleted because all MSFWs contacted through 
outreach activities must receive information on current and future 
employment opportunities;
    (11) A sentence was added to paragraph (b)(6) requiring outreach 
workers to document and refer apparent violations that are non-
employment related; and
    (12) Language was added to paragraph (b)(7) regarding training 
outreach workers on protecting farmworkers against sexual harassment in 
the fields. While such abuse is not often considered when contemplating 
the protection of, and advocacy for, MSFWs, it is increasingly 
prevalent and the addition is intended to further a concerted effort to 
deter such abuse. To that end, the Department wishes to ensure that 
outreach workers are aware of the issue and able to appropriately refer 
MSFWs.
Section 653.108 State Workforce Agency and State Monitor Advocate 
Responsibilities
    The Department proposes the following changes to Sec.  653.108:
    (1) The heading is proposed to be revised to State Workforce Agency 
and State monitor advocate (SMA) responsibilities to better describe 
the contents of this section;
    (2) The requirement in paragraph (c) for SMAs to work in the State 
central office was removed because there are instances where it may be 
more productive and logical for them to work in an office that is more 
centrally located to the State's MSFW population;
    (3) The language in paragraph (d) allowing an Office of Workforce 
Investment (OWI) Administrator to reallocate SMA positions and approve 
the use of less than full-time work be deleted because the OWI 
administrator does not have authority over these determinations. It is 
also proposed that the last sentence in this paragraph be modified to 
clarify that a State agency that deems SMA functions appropriate on a 
part-time basis must demonstrate to the Regional Administrator that 
part-time staffing will be sufficient for carrying out his/her duties;
    (4) Language has been added to paragraph (g)(1) authorizing SMAs to 
request a corrective action plan from the ES office to address any 
deficiencies found in their review and allowing the SMAs to advise the 
State agency on means to improve the delivery of services to MSFWs;
    (5) That the words ``local office MSFW formal monitoring'' be 
deleted from paragraph (g)(2) because the Department has proposed to 
include a definition for onsite reviews in 20 CFR 651.10;
    (6) In paragraph (g)(3) the words ``significant MSFW local office'' 
are proposed to be replaced with ``significant MSFW one-stop center'' 
to conform with the proposed definition in 20 CFR 651.10;
    (7) In paragraph (g)(4) it is proposed that the sentence referring 
to applications be deleted because such information can be more 
effectively provided and updated, as necessary, via Department-
published guidance materials. It is also proposed this paragraph 
include language requiring the SMA to clear the State's AOP to ensure 
that the SMA reviews, provides necessary input, and supports the final 
version of the State's AOP;
    (8) That paragraph (g)(6) be created to require SMAs to write and 
submit Annual Summaries to the State Administrator with a copy to the 
Regional Administrator because it is a duty originally located in Sec.  
653.108(t) but appropriately falls under Sec.  653.108(g) as one of the 
SMA duties;
    (9) In paragraphs (h)(2) and (h)(3) the references to ``reviews'' 
be replaced with ``onsite review(s)'' for clarity, and that the 
reference to ``ETA'' in paragraph (h)(3) be replaced with ``the 
Department;''
    (10) It is proposed that in paragraph (j) the SMAs must ensure that 
local ES office managers submit copies of the MSFW complaint logs to 
the State agency quarterly pursuant to 20 CFR 658 subpart E instead of 
the regional office, as was originally required. This change is 
proposed because the regional office does not need to review each 
complaint log, rather it reviews the information in aggregate, as is 
the current practice. This helps to avoid overburdening the regional 
offices with more detail than is necessary. Additional details 
concerning the submission of complaint logs will be provided and 
updated, as necessary, via Department official guidance;
    (11) Current paragraph (k) has been broken into separate paragraphs 
(proposed paragraphs (j), (k), and (l)), to clarify the intent of the 
respective duties under this subpart. Paragraph (j) will require SMAs 
to serve as advocates to improve services to MSFWs; paragraph (k) will 
strengthen the requirement for SMAs to liaise with WIOA sec. 167 
grantees to encourage increased collaboration between SMAs and grantees 
that provide services to MSFWs; paragraph (l) proposes that SMAs meet 
at least quarterly and establish an MOU with WIOA sec. 167 grantees and 
other organizations serving farmworkers, the Department intends to 
foster a better working relationship between the SMAs, the grantees, 
and the other organizations while harmonizing the delivery of services 
to MSFWs and minimizing the duplication of services;
    (12) Language to include committees other than DOL Regional Farm 
Labor Coordinated Enforcement Committee has been added to paragraph (l) 
to broaden the scope of appropriate regional meetings the SMA must 
attend.
    (13) Paragraph (o) has been deleted because affirmative action 
staffing plans are no longer required. In their place, each State 
agency must provide an assurance that it is complying with its 
affirmative action requirements set forth in 20 CFR 653.111 through the 
AOP. Additionally, the requirement under proposed paragraph (g)(1) for 
SMAs to conduct an ongoing review of and advise the State agency on its 
affirmative action goals will meet the need for SMAs to ensure that 
their respective States are complying with the affirmative action 
staffing requirements outlined in the Richey Order;
    (14) Paragraph (p) concerning day-haul sites has been deleted for 
the same reasons provided for deleting Sec. Sec.  653.105 and 653.106; 
and
    (15) A new paragraph (s) has been added to outline the purpose and 
scope of required Annual Summaries, and a list of what the summaries 
must include. The requirements for the Annual Summary have been 
expanded to include information that would be relevant for the 
Department's review of how the States are providing services to MSFW. 
Many of the added requirements are taken from other sections under this 
chapter. Specifically, the Annual Summary would include assurances or 
summaries of SMA duties taken from current Sec.  653.108(c), (g)(1), 
(h)(2), (j), (k), (q), and (r). This section also requires that the 
Annual Summaries include a summary of the activities conducted over the 
course of the previous year that relate to meeting the goals of the 
AOP. At the end of the AOP, this section would require that the SMA 
provide a synopsis of the State agency's achievements in meetings its 
goals set forth in the AOP. This will help keep each State agency on 
track toward achieving its AOP goals and help the Department track such 
progress.
    In addition, related to proposed Sec.  653.108(g)(4), the 
Department notes that the process by which the SMA will receive, 
review, and approve the AOP

[[Page 20811]]

will be described in the joint planning guidance issued by the 
Departments of Labor and Education.
Section 653.109 Data Collection and Performance Accountability Measures
    For Sec.  653.109, Data collection, the Department proposes to 
include the equity indicators and minimum service level indicators 
currently at Sec.  653.112 as they are data elements that appropriately 
fit under Sec.  653.109, with the exception of the contents of current 
Sec.  653.112(c)(3) that will be deleted because ETA does not publish a 
list of priorities that State agencies can use as a basis for the 
minimum service levels required of significant MSFW States. The 
Department also proposes to add ``and performance accountability 
measures'' to Sec.  653.109 so the part may appropriately include the 
additional measures.
    The Department proposes to make several other changes to Sec.  
653.109:
    (1) Paragraph (a) specifies that State agencies must collect career 
service indicator data for services described in WIOA sec. 
134(c)(2)(A)(xii) because WIOA sec. 134(c)(2)(A)(xii) includes several 
of the existing requirements under Sec.  653.109;
    (2) Paragraph (b) has been revised to specify that data collection 
will include the number of non-MSFWs and MSFWs registered for Wagner-
Peyser services and MSFW average earnings, and will remove the 
requirement to collect data on the number of MSFWs referred to 
training, receiving job development, receiving testing, receiving 
employment counseling, and referred for supportive services or other 
services, as those are already required data elements under WIOA; and
    (3) Paragraph (b) also replaces the terms ``wage rates'' and 
``duration of employment'' with the terms ``entered employment rate'' 
and ``employment retention rate,'' respectively to conform with the 
terminology by the Department's data collection mechanism (currently 
the Labor Exchange Agricultural Reporting System 9002a form).
Section 653.110 Disclosure of Data
    Proposed Sec.  653.110 contains minor changes to clarify the 
provisions and to update terminology.
Section 653.111 State Agency Staffing Requirements
    In Sec.  653.111 it is proposed that the requirement for each State 
agency with significant MSFW offices to submit an affirmative action 
plan be replaced with the requirement that each such State agency 
submit assurances, as part of its Unified State Plan and as part of its 
Annual Summaries, that it is implementing an affirmative action 
staffing program. This change is proposed because it will help each 
State agency with significant MSFW offices to streamline implementation 
of its affirmative action program while ensuring that the Department 
remains in compliance with the relevant requirements under the Richey 
Order. It is proposed that the regulation providing the formula for 
determining the racial and ethnic characteristics of the workforce be 
deleted from the regulation because this will be provided in 
subsequently issued guidance.
    It is proposed that Sec.  653.112 be deleted because PBPs are 
obsolete as each State agency is required to submit a Unified or 
Combined State Plan pursuant to WIOA title I. The text in paragraphs 
(b) and (c) concerning equity indicators and minimum level service 
requirements is proposed to be relocated, with minor revisions, to 
Sec.  653.109.
    It is proposed that Sec.  653.113 be deleted and its contents 
relocated to 20 CFR 658.419 because it relates to the ES and 
Employment-Related Law Complaint System (Complaint System).
    In subpart F, the Department proposes the following changes to 
clarify the requirements of this subpart:
    (1) The paragraphs under the ARS have been reorganized into 
subcategories based on each stakeholder's respective responsibilities 
(the subcategories are ES Office Responsibilities, State Agency 
Responsibilities, and Processing Job Orders). The proposed 
restructuring of this subpart is intended to help stakeholders better 
understand how the system works and more easily identify and comprehend 
their respective responsibilities. The reorganizing is also proposed to 
help clarify the meaning of the regulations;
    (2) The paragraphs have been revised to state requirements in the 
positive and active voice, versus the negative passive voice from which 
they were originally drafted;
    (3) References to information that needs to be provided to MSFWs in 
Spanish be changed to ``native language'' to conform to TEGL 26-02; and
    (4) The heading for subpart F has been revised and supplemented by 
adding the words ``for US Workers'' to clarify that ARS is meant for 
U.S. workers versus foreign workers. It is a common misconception that 
the ARS is for foreign workers who may be hired by U.S. employers 
through visa programs such as the H-2A or H-2B visa programs, and the 
Department intends the proposed change to help eliminate this 
misconception. For the same reason, any references to the temporary 
employment of foreign workers in the United States (that would 
otherwise fall under 20 CFR 655) have been deleted.
Section 653.501 Requirements for Processing Clearance Orders
    The Department proposes the following changes to Sec.  653.501:
    (1) In paragraph (c)(1)(iv)(I), currently paragraph (d)(2)(x), it 
is proposed that the sentence regarding the contingency of payments 
made beyond the period of employment specified in the job order be 
deleted because such terms are already specified in the job order and 
the language is duplicative;
    (2) In paragraph (c)(3)(iv), currently paragraph (d)(2)(xiii), it 
is proposed that the sentence referring to requests for foreign workers 
be deleted because this section should only cover information regarding 
ARS and the requirements for foreign workers are covered under 20 CFR 
655; and
    (3) In paragraph (j), it is proposed that the Regional 
Administrator notify the national monitor advocate instead of the OWI 
Administrator when a potential labor supply State agency rejects a 
clearance order and the Regional Administrator does not concur with the 
reasons for rejection. In this case, the national monitor advocate, in 
consultation with the OWI Administrator, is the appropriate person to 
make the final determination because it is the common practice for the 
national monitor advocate to provide the State agencies with guidance 
regarding ARS.
Section 653.502 Conditional Access to the Agricultural Recruitment 
System
    The Department proposes to delete current Sec.  653.502 concerning 
changes in crop and recruitment situations and fold its contents 
without change into proposed Sec.  653.501.
    The Department proposes to add a new Sec.  653.502 which contains 
the relocated provisions of 20 CFR 654.403. While the housing standards 
at 20 CFR 654 subpart E, including current Sec.  654.403, will expire 1 
year after the publication of the final rule, the Department proposes 
moving current Sec.  654.403 into this new section because those 
requirements remain necessary and relevant, and because that section is 
related to the terms and requirements of this subpart. Accordingly, the 
provisions of 20 CFR 654.403 have been relocated to proposed 20 CFR 
653.502.

[[Page 20812]]

Section 653.503 Field Checks
    Proposed Sec.  653.503(b) has been revised to clarify that State 
agencies must conduct field checks on at least 25 percent of 
agricultural worksites to align with common practice. The Department 
also proposes to add language requiring a State agency with fewer than 
10 ES placements to conduct field checks on all agricultural worksites 
where the placements have been made. This change is proposed to ensure 
that all worksites are checked whenever feasible. In paragraph (e), it 
is proposed that the word ``shall'' be changed to ``may'' because it is 
not a requirement, rather State agencies may choose to enter into an 
agreement with an enforcement agency if they believe it is necessary or 
helpful.

P. Part 654--Special Responsibilities of the Employment Service System

1. Introduction
    The Department proposes to revise the ETA regulations governing 
Housing for Agricultural Workers at 20 CFR 654, subpart E, issued under 
the authority of the 1933 Wagner-Peyser Act by updating outdated 
terminology and by establishing an expiration date for the ETA 
standards in order to transition housing currently governed by the ETA 
standards to the Occupational Safety and Health Administration (OHSA) 
regulations governing temporary labor camps for agricultural workers.
2. Subpart E--Housing for Agricultural Workers
Section 654.401 Applicability
    The Department proposes to amend Sec.  654.401 to require that 
housing covered by the regulations in this subpart be subject to the 
relevant OSHA housing standards for agricultural workers beginning 1 
year after the publication of the final rule.
    In 1951 the U.S. ES Bureau of Employment Security established the 
ETA housing standards for farmworkers. These standards were updated in 
1959 and again in 1968. However, despite the Department's intention to 
``make every effort to ensure that `housing and facilities are hygienic 
and adequate to the climatic conditions of the area of employment''' 
and that such housing ``conformed to applicable State or local housing 
codes, and in the absence of such codes, that the housing would not 
endanger the health or safety of the workers,'' farmworkers continued 
to face inadequate, unsafe, and unsanitary housing. In 1970, Congress 
passed the Occupational Health and Safety Act (OSHA) which was intended 
to assure that every person working in the United States has safe and 
healthful working conditions.'' In this light, OSHA adopted a set of 
national consensus standards for temporary labor camps which was 
published in August 1971. Therefore, since 1971 the Department has had 
in effect two sets of agricultural housing standards for farmworkers: 
Those under the ETA regulations (originally at 20 CFR part 620, later 
at 20 CFR part 654) and those under the OSHA regulations (at 29 CFR 
1910.142). The dual set of standards has long resulted in confusion 
with respect to their applicability and enforcement. In view of these 
problems, the Department held hearings in 1976 with stakeholders, 
developed several proposals to arrive at a single set of standards, 
and, on December 9, 1977, rescinded the ETA regulations and standards.
    While the rescission was effective immediately, employers whose 
housing met the ETA standards on the date of their rescission were 
given until January 1, 1979 to come into compliance with the OSHA 
housing regulations. Later, the Department received numerous complaints 
objecting to the rescission of the ETA housing regulations, including 
those from employers who had constructed housing to conform to the ETA 
standards and complained that the shift from ETA to OSHA standards 
would require costly modifications to housing which the Department had 
previously approved. In response to these comments, the Department 
proposed on September 1, 1978 to revise the December 9, 1977 rescission 
action by adding an indefinite extension of time for employers already 
following the ETA standards to bring their housing into compliance with 
the OSHA standards and a transitional provision for housing built in 
reliance on the ETA regulations.
    On March 4, 1980, the Department issued a final rule providing that 
the OSHA standards and regulations applied to all temporary housing for 
farmworkers except that ``[e]mployers whose housing was constructed in 
accordance with the ETA housing standards may continue to follow the 
full set of ETA standards set forth in this subpart only where prior to 
April 3, 1980 the housing was completed or under construction, or where 
prior to March 4, 1980 a contract for the construction of the specific 
housing was signed.'' 45 FR 14180, 14182 (Mar. 4, 1980).
    The Department proposes that the remaining housing currently 
governed under the standards and provisions at 20 CFR part 654 subpart 
E (Housing for Agricultural Workers) be subject to the OSHA standards 
and provisions beginning 1 year after the publication of the final 
rule, except that mobile range housing for sheepherders and goatherders 
must continue to meet existing Departmental guidelines and/or 
applicable regulations. The proposed expiration date will provide 
sufficient time for affected employers to transition into compliance 
with the OSHA standards.
    Pursuant to the January 19, 1981 agreement between OSHA, the WHD 
(replacing the abolished Employment Standards Administration (ESA)), 
and ETA for Inspections of Migrant Agricultural Worker Housing, the 
Department's WHD will continue to be responsible for enforcing the 
provisions under 29 CFR 1910.142. Beginning 1 year after the 
publication of the final rule, the Department will not apply or enforce 
the standards of this subpart, other than in cases relating to events 
predating that expiration date.
    Requiring all housing to meet the relevant OSHA standards and 
eliminating the ETA standards will reduce administrative and 
enforcement burdens on employers, workers, State agencies, and the 
Department because they will need to reference and rely on only one set 
of applicable standards located in one place. Enforcement agency staff 
and State agency staff that conduct housing inspections will only need 
to understand one set of standards which will ease the learning 
process. Additionally, the change will benefit MSFWs as the regulations 
under 29 CFR 1910.142 conform to more modern housing standards than 
those under 20 CFR part 654 subpart E. The Department acknowledges that 
the change will mean that some employers will need to upgrade their 
farmworker housing to meet the OSHA standards. However, the benefit to 
farmworkers and the administrative benefits to State agencies and the 
Department outweigh the adjustments employers will need to make to 
comply with the OSHA standards. In order to assist employers, the 
Department will provide technical assistance to facilitate the 
transition to the OSHA housing standards.
    Having been in place for 34 years, it is the Department's opinion 
that it is appropriate to complete the transition to the OSHA standards 
begun in 1980 and to phase out in full the ETA standards grandfathered 
for 34 years for farmworker housing completed or under construction 
prior to March 3, 1980, or under contract for construction prior to 
April 3, 1980. As in 1980, the Department continues to believe that the 
OSHA regulations provide for superior standards of safety and 
habitability for

[[Page 20813]]

MSFWs and do not overly burden employers.
    In addition to the change described above, the Department proposes 
to amend the following sections:
Section 654.400 Scope and Purpose
    The Department proposes to amend Sec.  654.400 to update 
terminology and explain that housing covered under the standards and 
provisions of subpart E will be subject to different regulations 
without grandfathering beginning 1 year after the date that this final 
regulation is published.
    In addition to the amendment described above, the Department 
proposes to revise Sec.  654.401 for clarity, to add a new paragraph 
(b), and to shorten the section heading by eliminating unnecessary 
language.
Section 654.402 Variances
    The Department proposes to amend Sec.  654.402 to update 
terminology and remove the term ``permanent'' because, as proposed, 
variances will expire on the given expiration date for the standards 
and provisions of subpart E; therefore, employers will no longer be 
entitled to a permanent variance. The deadline of June 2, 1980 is 
removed because the Department proposes to receive applications for 
temporary variances from the ETA standards until the date on which the 
standards and provisions of subpart E will expire. Additionally, 
paragraph (f) has been added to state that all variances and requests 
for variances will expire 1 year after the publication of the final 
rule requiring this change, and that no applications will be accepted 
as of that date. After this change takes effect, the Department will 
return any pending requests for variances to the appropriate applicant 
noting that all variances and variance requests expired on that date 
and are therefore stale.
Section 654.403 [Reserved]
    Finally, the Department proposes that the provisions of Sec.  
654.403 be deleted and relocated to 20 CFR 653.502 because they more 
directly relate to the governance and operation of the ARS rather than 
the condition of worker housing. Section 654.403 provides for 
conditional access to the clearance order system administered by the 
relevant State workforce agency which is needed to effectively service 
employers whose housing has fallen temporarily out of compliance with 
the applicable housing standards during a period of use in the previous 
year, and where the employer has not had an opportunity to bring the 
housing back into compliance.
    The following sections of part 654 remain unchanged: Sec. Sec.  
654.404, 654.405, 654.406, 654.407, 654.408, 654.409, 654.410, 654.411, 
654.412, 654.413, 654.414, 654.415, 654.416, and 654.417.

Q. Part 658--Administrative Provisions Governing the Employment Service 
System

    20 CFR part 658 sets forth systems and procedures for complaints, 
monitoring for compliance assessment, enforcement and sanctions for 
violations of the ES regulations and employment-related laws, including 
discontinuation of services to employers and decertification of State 
agencies.
    The Department's proposed changes update terminology and 
responsibilities and reorganize various regulations to increase the 
clarity and efficiency of the provisions involved. Additionally, 
headings have been revised, when necessary, to reflect proposed changes 
to the regulations, and language has been added to permit, where 
relevant, the use of electronic mail and electronic signatures. The 
complaint system under 20 CFR part 658 does not apply to complaints 
filed under WIOA title I.
    During the 1980 rulemaking, the Department received numerous 
comments about the proposed complaint system at 20 CFR part 658 subpart 
E (Complaint System) including comments that focused on the limited 
staff resources available to provide all labor exchange services 
including the handling of complaints. The Department took those 
comments into account and limited the complaint system to only take in 
writing those complaints that were ``Job Service (JS) related or those 
non-JS related complaints that [were] filed by MSFWs alleging 
violations of laws enforced by ESA or OSHA.'' (Since the dissolution of 
ESA on Nov. 8, 2009, the WHD has taken on the relevant enforcement 
responsibilities (45 FR 39454, 39456 (June 10, 1980.)) The Department 
now believes it is appropriate and consistent with the Richey Order to 
allow most employment-related law complaints by MSFWs to be recorded, 
referred, and tracked to resolution (except those that relate to WIOA 
title I complaints which follow a different process--see WIOA title I 
sec. 181(c)). Technological advances in the workplace since 1980, such 
as the widespread use of computer software and systems, have made 
performing such work feasible with limited staff resources. 
Additionally, recording, referring, and tracking to resolution the 
additional complaints will help, directly or indirectly, to deter the 
employment-related discrimination and abuses that MSFWs continue to 
suffer throughout the United States.
    The Department proposes to revise the heading for 20 CFR part 658 
subpart E from ``Job Service Complaint System'' to ``Employment Service 
and Employment-Related Law Complaint System (Complaint System)'' to 
accurately reflect what the Complaint System covers. The Department 
proposes to eliminate Sec.  658.401 and fold its revised provisions 
that relate to the purpose and scope of the subpart into Sec.  658.400.
    Regarding provisions concerning the complaint system at the State 
level, the Department proposes to restructure the previous Sec. Sec.  
658.410 through 658.418 by placing them in Sec.  658.411 and breaking 
them down into subsections for complaints alleging violation(s) of 
employment-related laws and subsections on complaints alleging 
violation(s) of the ES regulations. Those subsections are further 
broken down based on whether the complainant is an MSFW or not. 
Proposed new Sec. Sec.  658.410 and 658.411 provide an overview of the 
Complaint System as it pertains to all persons who submit a complaint 
and as it pertains specifically to MSFWs who submit a complaint.
Section 658.410 Establishment of Local and State Complaint Systems
    In Sec.  658.410(c)(2), it is proposed that quarterly complaint 
logs be submitted to the SMA and the State Administrator rather than to 
the Regional Administrator, unless requested. This change is proposed 
to increase the efficiency of the Regional Administrator's position 
that does not require the routine review of the multitude of highly 
detailed logs.
Section 658.411 Action on Complaints
    Section 658.411 is expanded to incorporate the majority of the 
provisions currently in Sec. Sec.  658.412 through 658.417 in the 
interest of streamlining and clarity. The Department proposes to 
eliminate Sec. Sec.  659.412 through 658.417 as separate sections. Not 
included in Sec.  658.411, however, is the reference currently in Sec.  
658.414(a) to 29 CFR part 42 because the proposed revisions to the 
complaint system call for coordination with all relevant enforcement 
agencies concerning MSFW complaints, and provisions at 29 CFR part 42 
discuss such coordination only between WHD, OSHA, and the ETA. This new 
approach ensures that State and local officials will consider 
forwarding employment-related law complaints to a broader group of 
enforcement agencies. Also excluded from proposed Sec.  658.411 is the

[[Page 20814]]

text of current Sec.  658.414(c) that has become redundant because 
proposed Sec.  658.410 also states that all complaints filed by an MSFW 
must be recorded. The Department proposes to add new Sec.  658.419 that 
will incorporate the relocated provisions of 20 CFR 653.113 (Apparent 
Violations) because those provisions set forth the procedures for State 
agency employees to follow when they become aware of an apparent 
violation of employment-related law or of the ES regulations which is 
more appropriately located in 20 CFR part 658 subpart E than in 20 CFR 
part 653 subpart B that concerns services for MSFWs.
    Proposed Sec.  658.411(d)(6) indicates that complaints alleging 
violations of the ES regulations will be handled to resolution if the 
complaint was made within 2 years from the date of occurrence, versus 
the 1 year provided currently at Sec.  658.401. A 2-year limitations 
period would be consistent with the limitations period for non-willful 
violations of the Fair Labor Standards Act, a worker protective statute 
of general application that applies to employment in agriculture and 
from which the definition of farmwork in 20 CFR 651.10 is largely 
drawn. Increasing the limitations period to 2 years will provide 
greater protections to those participating in the ES system by 
accommodating those individuals that do not feel comfortable filing or 
are not able to file complaints within a year from the alleged 
occurrence. Increasing the limitations period by 1 year will not 
increase the burden on State agencies or employers because the Uniform 
Administrative Requirements for the Wagner-Peyser grant already 
requires the retention of all financial and programmatic records, 
supporting documents, and statistical records for 3 years, and those 
records, in many cases, will contain information bearing on complaints 
filed within the 2-year limitations period. Finally, as with complaints 
filed under the FLSA, there is little risk that a complaint will become 
stale if it is filed 2 years after an alleged occurrence. The 2-year 
limitations period would not apply to employment-related law complaints 
as each enforcement agency has its own respective limitations period 
for which it can process complaints.
    It is proposed that Sec. Sec.  658.420 through 658.426 be 
restructured to conform to the restructured regulations for the 
Complaint System at the State level in which the system is broken down 
into employment law-related complaints and complaints relating to the 
ES regulations.
Section 658.422 Handling of Employment-Related Law Complaints by the 
Regional Administrator
    The Department proposes to revise Sec.  658.422 by replacing in 
Sec.  658.422(a) the reference to ``ESA or OSHA'' with ``the 
appropriate enforcement agency'' to allow for complaints to be referred 
to the appropriate agency and not confined to two agencies within the 
Department. Also proposed is the elimination of Sec.  658.422(d) 
because its requirement to log all complaints and related 
correspondence is already set forth in Sec.  658.420(d). The Department 
also proposes to eliminate Sec.  658.423 as a separate section and 
incorporate its provisions in Sec.  658.420 that addresses the handling 
and other treatment of complaints.
Section 658.424 Proceedings Before the Office of Administrative Law 
Judges
    Per Sec.  658.424(b), the Department proposes to clarify that the 
rules governing procedures before the Department's OALJ at subpart A of 
29 CFR part 18 govern proceedings under Sec.  658.424, except where the 
provisions of Sec. Sec.  658.424 and 658.425 conflict with the 
provisions of that subpart. However, the rules of evidence at subpart B 
of 29 CFR part 18 do not apply to this section. This change is proposed 
to ensure consistency with other ETA programs.
Section 658.501 Basis for Discontinuation of Services
    In 20 CFR part 658 subpart F, it is proposed that language be added 
to Sec.  658.501(c) to clarify the procedures a State agency must 
follow when an employer participating in the ES system has allegedly 
not complied with the terms of the temporary labor certification.
    In 20 CFR part 658 subpart G, it is proposed that the references to 
Sec. Sec.  658.620 and 658.621 be deleted from Sec.  658.600 because 
those sections are reserved. It is also proposed that under Sec.  
658.601(a)(1)(ii), ``Employment Security Automated Reporting System 
(ESARS) tables and Cost Accounting Reports'' be replaced with ``the 
Department's ETA 9002A report, or any successor report required by the 
Department'' to conform to what is currently utilized.
    In 20 CFR part 658 subpart H, the Department proposes to replace 
outdated or otherwise incorrect terminology. For example, ETA is 
replaced by the Department, State agency is replaced by State Workforce 
Agency (SWA), and JS is replaced with ES.
    Finally, recognizing that almost all correspondence, formal filings 
and submissions, and other exchanges of documents and information 
between the public and the Department are conducted electronically, 
these regulations clarify that any required filing or submission of 
documents, etc. via mail or hard copy may also be accomplished 
electronically.

V. Rulemaking Analyses and Notices

A. Executive Orders 12866 and 13563: Regulatory Planning and Review

    Executive Order (E.O.) 12866 directs agencies, in deciding whether 
and how to regulate, to assess all costs and benefits of available 
regulatory alternatives, including the alternative of not regulating. 
E.O. 13563 is supplemental to and reaffirms E.O. 12866. It emphasizes 
the importance of quantifying present and future benefits and costs; 
directs that regulations be adopted with public participation; and 
where relevant and feasible, directs that regulatory approaches be 
considered that reduce burdens, harmonize rules across agencies, and 
maintain flexibility and freedom of choice for the public. Costs and 
benefits are to include both quantifiable measures and qualitative 
assessments of possible impacts that are difficult to quantify. If 
regulation is necessary, agencies should select regulatory approaches 
that maximize net benefits. OMB determines whether a regulatory action 
is significant and, therefore, subject to review.
    Section 3(f) of E.O. 12866 defines a ``significant regulatory 
action'' as any action that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising from legal mandates, 
the President's priorities, or the principles set forth in E.O. 12866.
    Summary of the analysis. The Department provides the following 
summary of the regulatory impact analysis:
    (1) The proposed rule is a ``significant regulatory action'' under 
WIOA sec. 3(f)(4) of E.O. 12866; therefore, OMB has reviewed the 
proposed rule.

[[Page 20815]]

    (2) The proposed rule would have no cost impact on small entities.
    (3) The proposed rule would not impose an unfunded mandate on 
Federal, State, local, or tribal governments as defined by the Unfunded 
Mandates Reform Act of 1995.
    In total, the Department estimates that this NPRM would have an 
average annual cost of $38,437,779 and a total 10-year cost of 
$305,556,353 (with 7-percent discounting). The largest contributor to 
the cost is the requirement related to the development and continuous 
improvement of the workforce development system, followed by the career 
pathways development and the colocation of Wagner-Peyser services.
    The Department was unable to quantify several important benefits to 
society due to data limitations or lack of existing data or evaluation 
findings on particular items. Based on a review of empirical studies 
(primarily studies published in peer-reviewed academic publications and 
studies sponsored by the Department), we identified a variety of 
societal benefits: (1) Training services increase job placement rates; 
(2) participants in occupational training experience higher 
reemployment rates; (3) training is associated with higher earnings; 
and (4) State performance accountability measures, in combination with 
the board membership provision requiring employer/business 
representation, can be expected to improve the quality of the training 
and, ultimately, the number and caliber of job placements. We 
identified several channels through which these benefits might be 
achieved: (1) Better information about training providers will enable 
workers to make better informed choices about programs to pursue; (2) 
sanctions to under-performing States will serve as an incentive for 
both States and local entities to monitor performance more effectively 
and to intervene early; and (3) enhanced services for dislocated 
workers, self-employed individuals, and workers with disabilities will 
lead to the benefits discussed above.
    The Department requests comment on the costs and benefits of this 
NPRM with the goal of ensuring a thorough consideration and discussion 
at the Final Rule stage.
1. Need for Regulation
    Public Law 113-128, the Workforce Innovation and Opportunity Act, 
enacted on July 22, 2014, statutorily requires publication of proposed 
implementation regulations not later than 180 days after the date of 
enactment. The Department has determined that implementing regulations 
are necessary in order for the WIOA program to be efficiently and 
effectively operated and that such regulations shall provide Congress 
and others with uniform information necessary to evaluate the outcomes 
of the new workforce law.
2. Alternatives in Light of the Required Publication of Proposed 
Regulations
    OMB Circular A-4, which outlines best practices in regulatory 
analysis, directs agencies to analyze alternatives outside the scope of 
their current legal authority if such alternatives best satisfy the 
philosophy and principles of E.O. 12866. While the WIOA provides little 
regulatory discretion, the Department assessed, to the extent feasible, 
alternatives to the proposed regulations.
    In this NPRM, the Department considered significant alternatives to 
accomplish the stated objectives of the WIOA while also attempting to 
minimize any significant economic impact of the proposed rule on small 
entities. This analysis considered the extent to which WIOA's 
prescriptive language presented any regulatory options which would also 
allow for achieving the Act's articulated program goals. The 
Department, in many instances, has reiterated the Act's language in the 
regulatory text and expansions are offered for clarification and 
guidance to the regulated community. The additional regulatory guidance 
should create more efficient administration of the program by reducing 
ambiguities and subsequent State and local revisions as a result of 
unclear statutory language.
    In addition, the Department considered and, where feasible, 
proposed to issue sub-regulatory guidance in lieu of additional 
regulatory requirements. This policy option has two primary benefits to 
small entities. First, guidance will be issued following publication of 
the rules, thereby allowing States, local areas, and small entities 
additional time to prepare their compliance efforts. Second, this level 
of guidance is more flexible in nature, allowing for faster 
modifications and any subsequent issuances, as necessary.
    The Department considered three possible alternatives:
    (1) To implement the changes prescribed in WIOA, as noted in this 
NPRM, thereby satisfying the statutory mandate; or
    (2) To take no action, that is, to attempt to implement the WIOA 
utilizing existing Workforce Innovation Act (WIA) regulations; or
    (3) To not publish regulation and rescind existing WIA final 
regulations and, thereby ignoring the WIOA statutory requirement to 
publish implementing regulations thus forcing the regulated community 
to follow statutory language for implementation and compliance 
purposes.
    The Department considered these three options in accordance with 
the provisions of E.O. 12866 and chose to publish the WIOA NPRM, that 
is, the first alternative. The Department considered the second 
alternative, that is, retaining existing WIA regulations as the guide 
for WIOA implementation, but believes that the requirements have 
changed substantially enough that new implementing regulations are 
necessary for the workforce system to achieve program compliance. The 
Department considered the third alternative, that is, to not publish an 
implementing regulation and rescind existing WIA final regulations, but 
rejected it because the WIOA legislative language in and of itself does 
not provide sufficient detailed guidance to effectively implement WIOA; 
thus, regulations are necessary to achieve program compliance.
    In addition to the regulatory alternatives noted above, the 
Department also considered whether certain aspects of the WIOA could be 
phased in over a prescribed period of time (different compliance 
dates), thereby allowing States and localities additional time for 
planning and successful implementation. As a policy option, this 
alternative appears appealing in a broad theoretical sense and where 
feasible (e.g., Wagner-Peyser colocation of services), the Department 
has recognized and made allowances for different schedules of 
implementation. However, upon further discussion and in order to begin 
to achieve the intended legislative benefits of the WIOA, additional 
implementation delays beyond those noted in this NPRM may create 
potentially more issues than the benefit of alternative starting dates. 
Specifically, as many critical WIOA elements follow upon the 
implementation of other provisions (e.g., technology and performance 
reporting are intrinsically related), discussions around delaying 
additional aspects became quite complicated such that the 
interrelatedness of the WIOA's requirements suggested that the 
alternative of delaying additional aspects was not operationally 
feasible.
    Furthermore, the data necessary to fully review this option does 
not yet exist, and will not until local workforce development boards 
(WDBs) conduct procurements and announce awards.

[[Page 20816]]

Similarly, performance standards will be negotiated at a future time 
and based upon a variety of factors including State and local economic 
conditions, resources, and priorities. Establishing proposed standards 
in advance of this statutorily-defined process may not be an efficient 
or effective action. The enforcement methods described in the proposed 
rule are a reflection of prescribed WIOA requirements and entity size 
should not in and of itself create alternative methods for compliance 
or different time periods for achieving compliance. Although the 
Department has not determined sufficiently valid reasons for altering 
compliance timeframes in addition to those described in the proposed 
rule for small entities, we seek comment on this issue.
    The Department's initial impact analysis has concluded that by 
virtue of WIOA's prescriptive language, particularly the requirement to 
publish implementing regulations within 180 days, there are no viable 
regulatory alternatives available other than those discussed above.
    The Department requests comment on these or other alternatives, 
including alternatives on the specific provisions contained in this 
NPRM, with the goal of ensuring a thorough consideration and discussion 
at the Final Rule stage.
 3. Analysis Considerations
    The Department derives its estimates by comparing the existing 
program baseline, i.e., the benefits and costs associated with current 
practices, which at a minimum, must comply with the 2000 WIA Final Rule 
(65 FR 49294, Aug. 11, 2000), against the additional benefits and costs 
associated with implementation of provisions contained in this WIOA-
required NPRM.
    For a proper evaluation of the additional benefits and costs of 
this NPRM, the Department explains how the required actions of States, 
WDBs, employers and training entities, government agencies, and other 
related entities are linked to the expected benefits and estimated 
costs. We also considered, where appropriate, the unintended 
consequences of the proposed regulations introduced by this NPRM. The 
Department makes every effort, when feasible, to quantify and monetize 
the benefits and costs of this NPRM. The Department was unable to 
quantify the benefits associated with the proposed rule because of data 
limitations and a lack of operational data or evaluation findings on 
the provisions of the proposed rule or WIOA in general. Therefore, we 
describe the benefits qualitatively. We followed the same approach when 
we were unable to quantify the costs.
    Throughout the benefit-cost analysis, the Department made every 
effort to identify and quantify all potential incremental costs 
associated with the implementation of WIOA as distinct from what 
already exist under WIA, WIOA's predecessor statute. Despite our best 
estimation efforts, however, the Department might be double-counting 
some activities that are already happening under WIA. Thus, the costs 
itemized below represent an upper bound of the potential cost of 
implementing the statute. The Department requests comment on its cost 
estimates, specifically in terms of whether it has accurately captured 
the additional costs associated with the implementation of WIOA.
    In addition to this NPRM, the Departments of Labor and Education 
have proposed a joint NPRM to implement specific requirements of WIOA 
that fall under both Departments' purviews. While we acknowledge that 
these proposed rules and their associated impacts may not be wholly 
independent from one another, we are unaware of any reliable method of 
quantifying the effects of this interdependence. Therefore, our 
analysis does not capture the correlated impacts of the benefits and 
costs of this proposed rule and those associated with the other NPRMs. 
We request comments from the public about the appropriateness of this 
assumption.
    In accordance with the regulatory analysis guidance contained in 
OMB Circular A-4 and consistent with the Department's practices in 
previous rulemakings, this regulatory analysis focuses on the likely 
consequences (benefits and costs that accrue to citizens and residents 
of the United States) of this WIOA-required NPRM. The analysis covers 
10 years (2015 through 2024) to ensure it captures major additional 
benefits and costs that accrue over time. The Department expresses all 
quantifiable impacts in 2013 dollars and use 3-percent and 7-percent 
discounting following OMB Circular A-4.
    Exhibit 1 presents the estimated number of entities expected to 
experience an increase in level of effort (workload) due to the 
proposed requirements contained in this NPRM. These estimates are 
provided by the Department and are used extensively throughout this 
analysis to calculate the estimated cost of each proposed provision.

             Exhibit 1--Number of Affected Entities by Type
------------------------------------------------------------------------
                                                              Number of
                        Entity type                            entities
------------------------------------------------------------------------
States impacted by DOL program requirements................       \6\ 56
States without collocated Wagner-Peyser offices and one-          \7\ 10
 stops.....................................................
States without sector strategies...........................       \2\ 21
States that need to create Unified State Plans.............       \2\ 14
States that must pay their share for proportionate use of         \2\ 54
 one-stop delivery systems.................................
Local areas without collocated Wagner-Peyser offices and         \2\ 100
 one-stops.................................................
Workforce development boards...............................      \2\ 580
Workforce development boards selecting one-stop operators..      \2\ 250
Local Boards performing regional plan modifications........      \2\ 300
------------------------------------------------------------------------

Transfer Payments
---------------------------------------------------------------------------

    \6\ Ibid.
    \7\ Department of Labor estimate.
---------------------------------------------------------------------------

    In addition, the Department provides an assessment of transfer 
payments associated with transitioning the nation's public workforce 
system from the requirements of WIA to new requirements imposed by 
WIOA. In accordance with OMB Circular A-4, we consider transfer 
payments as payments from one group to another that do not affect total 
resources available to society. For example, under WIOA, partners are 
required to pay their share for proportionate use of one-stop delivery 
systems. Partners receive sufficient Federal funding to cover these 
payments, rendering this payment a transfer rather than a new cost. 
Under-performing States will also receive sanctions under WIOA, which 
are similarly classified as transfers as they result in the de-
obligation of funds from the State's set-aside. In accordance with the 
State allotment provisions noted in WIOA sec. 127, the interstate 
funding formula methodology is not significantly different than that 
utilized for the distribution of WIA funds. Final program year grant 
allocations will reflect WIOA requirements and are under development.
    One example of transfer payments is the expectation that available 
U.S. workers trained and hired who were previously unemployed will no 
longer need to seek new or continued unemployment insurance benefits. 
Assuming other factors remain constant, the Department expects State 
unemployment insurance expenditures to decline because of the hiring of 
U.S.

[[Page 20817]]

workers following WIOA implementation. The Department, however, cannot 
quantify these transfer payments due to a lack of adequate data.
    In the subject-by-subject analysis, the Department presents the 
additional labor and other costs associated with the implementation of 
each of the proposed provisions in this NPRM. Exhibit 2 presents the 
compensation rates for the occupational categories expected to 
experience an increase in level of effort (workload) due to the 
proposed rule. We used wage rates from the Bureau of Labor Statistics' 
Mean Hourly Wage Rate for private and State employees.\8\ For 
simplicity, we applied State-level wages to local employees. We also 
used wage rates from the Office of Personnel Management's Salary Table 
for the 2013 General Schedule for Federal employees.\9\ We adjusted the 
wage rates using a loaded wage factor to reflect total compensation, 
which includes health and retirement benefits. For the State and local 
sectors, we used a loaded wage factor of 1.55, which represents the 
ratio of total compensation \10\ to wages.\11\ For Federal employees, 
we used a loaded wage factor of 1.69 based on internal data from DOL. 
We then multiplied the loaded wage factor by each occupational 
category's wage rate to calculate an hourly compensation rate.
---------------------------------------------------------------------------

    \8\ Bureau of Labor Statistics, May 2013, National Occupational 
Employment and Wage Estimates, retrieved from: http://www.bls.gov/oes/current/oes_nat.htm.
    \9\ The wage rate for Federal employees is based on Step 5 of 
the General Schedule (source: OPM, 2013, Salary Table for the 2013 
General Schedule, retrieved from: http://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2013/general-schedule/gs_h.pdf).
    \10\ BLS Employment Cost Index, 2013 Average Series ID 
CMU3010000000000D, CMU3010000000000P (source: Bureau of Labor 
Statistics, 2013 Employer Costs for Employee Compensation, retrieved 
from: http://www.bls.gov/schedule/archives/ecec_nr.htm).
    \11\ The State and local loaded wage factor was applied to all 
non-Federal employees. Discerning the number of State and local-
sector employees and private-sector employees at the local level is 
difficult; therefore, the Department used the State and local-sector 
loaded wage factor (1.55) instead of the private-sector wage factor 
(1.42) for all non-Federal employees to avoid underestimating the 
costs.
---------------------------------------------------------------------------

    The Department invites comments regarding the assumptions used to 
estimate the level of additional effort required for the various 
proposed new activities, as well as data sources for the wages and the 
loaded wage factors that reflect employee benefits used in the 
analysis.
    The Department uses the hourly compensation rates presented in 
Exhibit 2 throughout this analysis to estimate the additional labor 
costs for each proposed provision.
---------------------------------------------------------------------------

    \12\ BLS OES, May 2013, 43-0000 Office and Administrative 
Support Occupations (http://www.bls.gov/oes/current/999201.htm#43-0000).
    \13\ BLS OES, May 2013, 23-10111 Lawyers (http://www.bls.gov/oes/current/999201.htm#23-0000).
    \14\ BLS OES, May 2013, 15-1131 Computer Programmers (http://www.bls.gov/oes/current/oes151131.htm).
    \15\ BLS OES, May 2013, 11-1021 General and Operations Managers 
(http://www.bls.gov/oes/current/999201.htm#11-0000).
    \16\ BLS OES, May 2013, average for the following occupational 
categories weighted by the number of employees in State government: 
15-1131 Computer Programmers; 15-1132 Software Developers, 
Applications; 15-1133 Software Developers, Systems Software; and 15-
1134 Web Developers (http://www.bls.gov/oes/current/999201.htm#15-0000).

                               Exhibit 2--Calculation of Hourly Compensation Rates
----------------------------------------------------------------------------------------------------------------
                                                                                                      Hourly
                    Position                        Grade level   Average hourly    Loaded wage    compensation
                                                                       wage           factor           rate
                                                  ..............               a               b       c = a x b
----------------------------------------------------------------------------------------------------------------
State and Local Employees
Administrative staff \12\.......................             N/A          $17.96            1.55          $27.84
Legal counsel staff \13\........................  ..............           40.68  ..............           63.05
IT reprogramming or database development staff    ..............           38.91  ..............           60.31
 \14\...........................................
Managers \15\...................................  ..............           45.32  ..............           70.25
Technical staff \16\............................  ..............           43.38  ..............           67.24
----------------------------------------------------------------------------------------------------------------

    The section-by-section analysis presents the total incremental cost 
of the proposed rule relative to the baseline, i.e., the current 
practice. At a minimum, all affected entities are currently required to 
comply with the 2000 WIA Final Rule (65 FR 49294, Aug. 11, 2000); 
however, some affected entities may already be in compliance with some 
provisions of the proposed rule. This analysis estimates the 
incremental costs that would be incurred by affected entities which are 
not yet compliant with the proposed rule. The equation below shows the 
method by which the Department calculated the incremental total cost 
for each provision over the 10-year analysis period.
[GRAPHIC] [TIFF OMITTED] TP16AP15.002


Where,

Al Number of affected entities that would incur labor 
costs,
Ni Number of staff of labor type i,
Hi Hours required per staff of labor type i,
Wi Mean hourly wage of staff of labor type i,
Li Loaded wage factor of staff of labor type i,
Aj Number of affected entities incurring non-labor costs 
of type j,
Cj Non-labor cost of type j,
i Staff type,
n Number of staff types,
j Non-labor cost type,
m Number of non-labor cost types,
T Year.

    The total cost of each provision is calculated as the sum of the 
total labor cost and total non-labor cost incurred each year over the 
10-year period (see Exhibit 3 for the 10-year cost of the proposed rule 
by provision). The total labor cost is the sum of the labor costs for 
each labor type i (e.g., administrative

[[Page 20818]]

staff, legal counsel staff, and managers) multiplied by the number of 
affected entities that will incur labor costs, Al. The labor 
cost for each labor type i is calculated by multiplying the number of 
staff required to perform the proposed activity, Ni; the 
hours required per staff member to perform the proposed activity, 
Hi; the mean hourly wage of staff of labor type i, 
Wi; and the loaded wage factor of staff of labor type i, 
Li. The total non-labor cost is the sum of the non-labor 
costs for each non-labor cost type j (e.g., consulting costs) 
multiplied by the number of affected entities that will incur non-labor 
costs, Aj.
4. Subject-by-Subject Analysis
    The Department's analysis below covers the expected impacts of the 
following proposed provisions of the WIOA NPRM against the baseline of 
the current practice under WIA: (a) New State Workforce Development 
Board Membership Requirements; (b) Development and Continuous 
Improvement of the Workforce Development System; (c) Development of 
Statewide Policies Affecting the State's One-stop System; (d) 
Development of Strategies for Technological Improvements; (e) State 
Plan Modification; (f) Identification of Regions; (g) Appoint New Local 
Workforce Development Board and Appropriate Firewalls; (h) Career 
Pathways Development; (i) Development of Proven and Promising 
Practices; (j) Technology; (k) Selection of the One-stop Operator; (l) 
Coordination with Education Providers; (m) Regional Plans; (n) Local 
and Regional Plan Modification; (o) Improved Information about 
Potential Training Program Providers; (p) Sanctions on Under-performing 
States; (q) Colocation of Wagner-Peyser Services; (r) Partners Required 
to Pay their Share for Proportionate Use of One-stop Delivery System; 
(s) Establishing Training Provider Eligibility Procedures, Including 
Adding Registered Apprenticeship; (t) Determining Eligibility of New 
and Previously Eligible Providers; (u) Biennial Review of Eligibility; 
(v) Disseminating the Training Provider List with Accompanying 
Information; and (w) Migrant and Seasonal Farmworker (MSFW) Housing.
    The Department emphasizes that many of the proposed provisions in 
this WIOA-required NPRM are also existing requirements under WIA. For 
example, the requirement that States ``prepare annual reports'' is a 
current requirement under WIA that States routinely undertake. 
Accordingly, our regulatory analysis focuses on ``new'' benefits, 
costs, and transfers that can be attributed exclusively to the 
enactment of WIOA, as addressed in this NPRM. Much of WIA's 
infrastructure and operations are carried forward under WIOA and, 
therefore, are not considered ``new'' cost burdens under this NPRM.
a. New State Workforce Development Board Membership Requirements
    States must establish State WDBs in accordance with the 
requirements of WIOA sec. 101. Under WIOA sec. 101(b)(1)(C)(i), the 
majority of the State WDB representatives must be from businesses or 
organizations in the State. These representatives must be owners or 
chief executives or operating officers of the businesses or executives 
with optimum policy-making or hiring authority. WIOA sec. 
101(b)(1)(C)(iii)(I) requires the Governor to appoint to the State WDB 
representatives of government that include the lead State officials 
with primary responsibility for each core program and two or more Chief 
Elected Officials (CEOs) that represent both cities and counties, where 
appropriate. In accordance with WIOA sec. 101(b)(2), State WDB 
membership must represent the diverse geographic areas of the State.
Costs
    To estimate State WDB costs, the Department multiplied the 
estimated average number of managers per State (1) by the time required 
to adjust the State WDB membership (20 hours) and by the hourly 
compensation rate. We repeated the calculation for the following 
occupational categories: Legal counsel staff (1 staff member for 15 
hours), technical staff (2 staff for 20 hours each), and administrative 
staff (1 staff member for 20 hours). We summed the labor cost for all 
four personnel categories ($5,597) and multiplied the result by the 
number of States (56). This would result in a one-time cost of $313,435 
in the first year of the proposed rule, which amounts to an average 
annual cost of $31,343.
b. Development and Continuous Improvement of the Workforce Development 
System
    WIOA sec. 101(d)(3)(A) through (G) require that the State WDB 
assist the Governor in the development and continuous improvement of 
the State's workforce development system, including identifying 
barriers and means for removing barriers to aligning programs and 
activities; developing or expanding sector-based training and career 
pathways proven to support individuals to seeking to enter and retain 
employment; developing customer outreach strategies; identifying 
regions and designating local workforce development areas; developing 
and continuously improving the one-stop system; and developing 
strategies to train and inform staff.
Costs
    The Department estimated the State WDBs' annual labor costs for 
developing or expanding sector strategies by multiplying the estimated 
average number of managers per State (1) by the time required to review 
the workforce development system (300 hours) and the hourly 
compensation rate. We performed the same calculation for the technical 
staff (2 staff for 1,260 hours each). We summed the labor cost for both 
categories ($190,516) and multiplied the result by the number of States 
that do not have extensive and systematic sector strategies (21). Over 
the 10-year period, this calculation yields an estimated recurring 
annual cost of $4,000,838.
    Similarly, the State WDBs' annual labor cost for expanding career 
pathways strategies was estimated by multiplying the estimated average 
number of managers per State (1) by the time required to review the 
workforce development system (300 hours) and the hourly compensation 
rate. The Department repeated the calculation for the technical staff 
(2 staff for 1,260 hours each). We summed the labor cost for the two 
occupational categories ($190,516) and multiplied the result by the 
number of States that do not have policies for career pathways 
(27).\17\ Over the 10-year period, this calculation yields an estimated 
recurring annual cost of $5,143,934.
---------------------------------------------------------------------------

    \17\ The number of States that have not established career 
pathways is provided in the ``National Dialogue on Career Pathways 
Viewing Party Guide.''
---------------------------------------------------------------------------

    The Department estimated the labor cost that State WDBs would incur 
to identify regions by multiplying the estimated average number of 
managers per State (1) by the time required to review the workforce 
development system (40 hours) and the hourly compensation rate. We 
performed the same calculation for the following occupational 
categories: legal counsel staff (1 staff member for 40 hours), 
technical staff (1 staff member for 80 hours), and administrative staff 
(1 staff member for 20 hours). We summed the labor cost for all four 
personnel categories ($11,268) and multiplied the result by the number 
of States (56) to estimate this one-time cost of $631,001. Over the 10-
year period, this calculation

[[Page 20819]]

yields an average annual cost of $63,100.
    The sum of these costs yields a total one-time cost of $631,001 and 
an annual cost of $9,144,772, which results in a total average annual 
cost of $9,207,872 for individuals from the State level to review the 
workforce development system.
c. Development of Statewide Policies Affecting the State's One-Stop 
System
    Under WIOA sec. 101(d)(6), State WDBs must assist State Governors 
in developing and reviewing statewide policies affecting the 
coordinated provision of services through the State's one-stop delivery 
system, including policies concerning objective criteria for Local 
Boards to assess one-stop centers, guidance for the allocation of one-
stop center infrastructure funds, and policies relating to the roles 
and contributions of one-stop partners within the one-stop delivery 
system.
Costs
    The Department estimated the labor cost that State WDBs would incur 
by multiplying the estimated average number of managers per State (1) 
by the time required to provide objective criteria and procedures (40 
hours) and the hourly compensation rate. We performed the same 
calculation for the legal counsel staff (1 staff member for 40 hours) 
and technical staff (2 staff for 120 hours). We summed the labor cost 
for all three personnel categories ($21,469) and multiplied the result 
by the number of States (56) to estimate this one-time cost at 
$1,202,284, which results in an average annual cost of $120,228.
d. Development of Strategies for Technological Improvements
    Under WIOA sec. 101(d)(7), State WDBs must assist State Governors 
in the development of strategies for technological improvements to 
facilitate access and quality of services and activities provided 
through the one-stop delivery system. These strategies include 
improvements to enhance digital literacy skills, accelerate acquisition 
of skills and recognized post-secondary credentials by participants, 
strengthen professional development of providers and workforce 
professionals, and ensure technology is accessible to individuals with 
disabilities and individuals residing in remote areas.
Costs
    The Department estimated the labor cost that State WDBs would incur 
by multiplying the estimated average number of managers per State (1) 
by the time required to develop strategies (20 hours) and the hourly 
compensation rate. We repeated the calculation for the technical staff 
(1 staff member for 40 hours). We summed the labor cost for both 
categories ($4,094) and multiplied the result by the number of States 
(56) to estimate a recurring annual cost of $229,291.
e. State Plan Modification
    Under WIOA sec. 102(c)(3)(B), a Governor may submit a modification 
of its Unified State Plan at any time during the 4-year period of the 
Plan. Under WIOA sec. 102(c)(3)(A), at a minimum, a State is required 
to submit modifications to its Unified State Plan at the end of the 
first 2-year period of any 4-year plan and also under specific 
circumstances.
    The Department expects that the initial 4-year State Plans would be 
highly speculative. Therefore, we anticipate that some States would 
make substantial modifications to the State Plans based on the 
experiences gained by operating under WIOA for the first two years. 
Based on past experience, we do not expect any subsequent modifications 
to present a substantial burden.
Costs
    The Department estimated the labor cost the State WDBs would incur 
by multiplying the estimated average number of managers per State (1) 
by the time required to review and modify a 4-year State Plan (10 
hours) and the hourly compensation rate. We repeated the calculation 
for the following labor categories: legal counsel staff (1 staff member 
for 4 hours), technical staff (2 staff for 10 hours each), and 
administrative staff (1 staff member for 4 hours). We summed the labor 
cost for all four personnel categories ($2,411) and multiplied the 
result by the number of States (56) to estimate this one-time cost as 
$135,005, which results in an average annual cost of $13,501.
f. Identification of Regions
    Under WIOA sec. 101(d)(3)(E), State WDBs must assist State 
Governors in the identification of regions, including planning regions, 
for the purposes of WIOA sec. 106(a), and the designation of local 
areas under WIOA sec. 106, after consultation with Local Boards and 
CEOs. According to WIOA sec. 106(a)(1), identification of regions is 
part of the process for developing the State Plan, and is necessary to 
receive an allotment under other provisions of the statute.
Costs
    The Department estimated this labor cost for State WDBs by first 
multiplying the estimated average number of managers per State (2) by 
the time required to identify regions in the State (40 hours) and the 
hourly compensation rate. We performed the same calculation for the 
following occupational categories: legal counsel staff (1 staff member 
for 10 hours), technical staff (3 staff for 15 hours each), and 
administrative staff (2 staff for 10 hours each). We summed the labor 
cost for all four personnel categories ($9,833) and multiplied the 
result by the number of States (56) to estimate this cost as $550,633, 
occurring in 2016 and 2020 and resulting in an average annual cost of 
$110,127.
g. Appoint New Local Workforce Development Board and Appropriate 
Firewalls
    The Local WDB is appointed by the CEOs in each local area in 
accordance with State criteria established under WIOA sec. 107(b), and 
is certified by the Governor every two years, in accordance with WIOA 
sec. 107(c)(2). The procedures for sole-source selection of one-stop 
operators include requirements about maintaining written documentation 
and developing appropriate firewalls and conflict-of-interest policies. 
A Local Board can be selected as a one-stop operator through a sole-
source procurement only if the board establishes sufficient firewalls 
and conflict-of-interest policies and procedures that are approved by 
the Governor.
Costs
    The Department estimated the labor costs incurred by WDBs by 
multiplying the estimated average number of managers per WDB (1) by the 
time required to appoint a new Local Board (20 hours) and the hourly 
compensation rate. We performed the same calculation for the following 
occupational categories: legal counsel staff (1 staff member for 15 
hours), technical staff (2 staff for 20 hours each), and administrative 
staff (1 staff member for 20 hours). We summed the labor cost for the 
four occupational categories ($5,597) and multiplied the result by the 
number of WDBs (580) to estimate this one-time cost as $3,246,289, 
which results in an average annual cost of $324,629.
    Additionally, the Department estimated the labor cost for WDBs to 
develop written agreements by multiplying the estimated average number 
of managers per WDB (1) by the time required to develop written

[[Page 20820]]

agreements (8 hours) and the hourly compensation rate. We repeated the 
calculation for the legal counsel staff (1 staff member for 8 hours) 
and technical staff (1 staff member for 20 hours). We summed the labor 
cost for the three occupational categories ($2,411) and multiplied the 
result by the number of WDBs (580) to estimate this one-time cost as 
$1,398,484, which results in an average annual cost of $139,848.
    In total, these calculations yield a one-time cost of $4,644,773 
which results in an average annual cost of $464,477 for individuals 
from the local level to appoint new boards and set administrative 
firewalls that avoid conflicts of interest.
h. Career Pathways Development
    Under WIOA sec. 107(d)(5), Local Boards must, with representatives 
of secondary and post-secondary education programs, lead efforts to 
develop and implement career pathways within the local area by aligning 
the employment, training, education, and supportive services that are 
needed by adults and youth, particularly individuals with barriers to 
employment.
Costs
    The Department estimated the labor cost for WDBs by first 
multiplying the estimated average number of managers per WDB (1) by the 
time required to develop and implement career pathways (80 hours) and 
the hourly compensation rate. We performed the same calculation for the 
following occupational categories: legal counsel staff (1 staff member 
for 10 hours), technical staff (1 staff member for 80 hours), and 
administrative staff (1 staff member for 20 hours). We summed the labor 
cost for all four personnel categories ($12,186) and multiplied the 
result by the number of WDBs (580) to estimate this recurring annual 
cost of $7,067,938.
i. Development of Proven and Promising Practices
    Under WIOA sec. 107(d)(6), Local Boards must lead efforts in the 
local area to identify and promote proven and promising strategies and 
initiatives for meeting the needs of employers, workers, and jobseekers 
(including individuals with barriers to employment), and identify and 
disseminate information on proven and promising practices carried out 
in other local areas for meeting such needs.
Costs
    For State WDBs, the Department estimated this labor cost by first 
multiplying the estimated average number of managers per State (1) by 
the time required to identify and promote proven strategies (20 hours) 
and the hourly compensation rate. We performed the same calculation for 
the following occupational categories: legal counsel staff (1 staff 
member for 10 hours), technical staff (1 staff member for 40 hours), 
and administrative staff (1 staff member for 15 hours). We summed the 
labor cost for all four personnel categories ($5,143) and multiplied 
the result by the number of States (56) to estimate this recurring 
annual cost of $287,985.
j. Technology
    Under WIOA sec. 107(d)(7), Local Boards must develop strategies for 
using technology to maximize the accessibility and effectiveness of the 
local workforce development system for employers, workers, and 
jobseekers by facilitating access to services provided through the one-
stop delivery system, facilitating connections among the intake and 
case-management information systems of the one-stop partner programs, 
identifying strategies for better meeting the needs of individuals with 
barriers to employment, and leveraging resources and capacity within 
the local workforce development system.
Costs
    The Department estimated the cost for Local WDBs by first 
multiplying the estimated average number of managers per WDB (1) by the 
time required to develop technology strategies (20 hours) and the 
hourly compensation rate. We performed the same calculation for the 
technical staff (1 staff member for 40 hours). We summed the labor cost 
for these two categories ($4,094) and multiplied the result by the 
number of WDBs (580) to estimate this recurring annual cost of 
$2,374,798.
k. Selection of One-Stop Operators
    Under WIOA sec. 107(d)(10)(A), consistent with WIOA sec. 121(d), 
and with the agreement of the CEO for the local area, Local Boards must 
designate or certify one-stop operators and may terminate for cause the 
eligibility of such operators. WIOA sec. 121(d)(2)(A) allows for 
selection of a one-stop operator only through a competitive process.
Costs
    The Department estimated the cost for Local WDBs by first 
multiplying the estimated average number of managers per WDB (1) by the 
time required to designate one-stop operators (80 hours) and the hourly 
compensation rate. We performed the same calculation for the following 
occupational categories: legal counsel staff (1 staff member for 40 
hours), technical staff (2 staff for 120 hours each), and 
administrative staff (1 staff member for 40 hours). We summed the labor 
costs for these four personnel categories ($25,393) and multiplied the 
result by the number of WDBs (580) to estimate this quadrennial cost of 
$6,348,180. Over the 10-year period, this calculation yields an average 
annual cost of $1,904,454.
l. Coordination With Education Providers
    Under WIOA sec. 107(d)(11), Local Boards must coordinate activities 
with education and training providers in the local area, including 
providers of workforce investment activities, providers of adult 
education and literacy activities under title II of WIOA, certain 
providers of career and technical education, and local agencies 
administering certain plans under the Rehabilitation Act of 1973.
Costs
    For State WDBs, the Department estimated this labor cost by first 
multiplying the estimated average number of managers per State (1) by 
the time required to coordinate activities with local education and 
training providers (30 hours) and the hourly compensation rate. We 
performed the same calculation for the following occupational 
categories: legal counsel staff (1 staff member for 10 hours), 
technical staff (1 staff member for 40 hours), and administrative staff 
(1 staff member for 10 hours). We summed the labor cost for all four 
personnel categories ($5,706) and multiplied the result by the number 
of States (56) to estimate this recurring annual cost of $319,528.
m. Regional Plans
    WIOA sec. 106(c)(2) requires Local Boards and CEOs within a 
planning region to prepare, submit, and obtain approval of a single 
regional plan that includes a description of the activities described 
in the statute and that incorporates local plans for each of the local 
areas in the planning region.
Costs
    For Local WDBs, the Department estimated this cost by first 
multiplying the estimated average number of managers per WDB (2) by the 
time required to prepare, submit, and obtain approval of a single 
regional plan (20 hours) and the hourly compensation rate. We performed 
the same calculation for the following occupational categories: legal 
counsel staff (1 staff

[[Page 20821]]

member for 8 hours), technical staff (2 staff for 40 hours), and 
administrative staff (1 staff member for 8 hours). We summed the labor 
cost for the four occupational categories ($8,916) and multiplied the 
result by the number of WDBs (580) to estimate this cost as $5,171,336, 
which occurs in 2016 and 2020. This results in an average annual cost 
of $1,034,267.
n. Local and Regional Plan Modification
    Under WIOA sec. 108(a), each Local Board, in partnership with the 
CEO, must review the local plan every 2 years and submit a modification 
as needed, based on significant changes in labor market and economic 
conditions and other factors. These factors include changes to local 
economic conditions, changes in the financing available to support WIOA 
title I and partner-provided WIOA services, changes to the Local Board 
structure, or a need to revise strategies to meet performance goals. If 
the local area is part of a planning region, the Local Board must 
comply with WIOA sec. 106(c) in the preparation and submission of a 
regional plan.
Costs
    For Local WDBs, the Department estimated the local plan 
modification cost by first multiplying the estimated average number of 
managers per WDB (1) by the time required to review and modify the 4-
year plan (10 hours) and the hourly compensation rate. We performed the 
same calculation for the following occupational categories: Legal 
counsel staff (1 staff member for 4 hours), technical staff (2 staff 
for 10 hours), and administrative staff (1 staff member for 4 hours). 
We summed the labor cost for all four personnel categories ($2,411) and 
multiplied the result by the number of WDBs (580) to estimate this one-
time cost of $1,398,269, occurring in 2018. Over the 10-year period, 
this calculation yields an average annual cost of $139,827.
    Similarly, the Department estimated the regional plan modification 
cost for Local WDBs by first multiplying the estimated average number 
of managers per regional board (2) by the time required to review and 
modify the 4-year plan (10 hours) and the hourly compensation rate. We 
performed the same calculation for the following occupational 
categories: legal counsel staff (1 staff member for 4 hours), technical 
staff (2 staff for 20 hours each), and administrative staff (1 staff 
member for 5 hours). We summed the labor cost for all four personnel 
categories ($4,486) and multiplied the result by the number of regional 
boards (580) to estimate a cost of $1,345,766, occurring once every 
four years. Over the 10-year period, this calculation yields an average 
annual cost of $269,153.
    The sum of these costs yields a 10-year cost of $4,089,800, which 
results in an average annual cost of $408,980 for individuals from the 
Local WDBs to review and modify the 4-year plan.
o. Improved Information About Potential Training Program Providers
    WIOA sec. 116 establishes performance accountability measures and 
performance reporting requirements to assess the effectiveness of 
States and local areas in achieving positive outcomes for individuals 
served by the core programs. The performance accountability measures 
will provide workers with better information about potential training 
program providers and enable them to make more informed choices about 
programs to pursue. The information analyzed and published by the 
boards about local labor markets also will assist trainees and 
providers in targeting their efforts and developing reasonable 
expectations about outcomes.
Costs
    At the State level for DOL programs, the Department estimated this 
labor cost by first multiplying the estimated average number of 
managers per State (1) by the time required to provide additional 
information about eligible training program providers (32 hours) and 
the hourly compensation rate. We performed the same calculation for the 
technical staff (2 staff for 40 hours each) and administrative staff (1 
staff member for 80 hours). We summed the labor cost for all three 
personnel categories ($9,854) and multiplied the result by the number 
of States (56) to estimate this recurring annual cost of $551,826.
p. Sanctions on Under-Performing States
    Section 116(f)(1)(B) of WIOA requires the Department to assess a 
sanction if ``a State fails to submit a report under subsection (d) for 
any program year.'' Three reports are required under WIOA sec. 116(d): 
The State annual performance reports, the local area performance 
reports, and the ETP performance reports. Of these, only the State 
annual performance reports must be submitted by the State to the 
Secretary of Labor. Section 116(f)(1) of WIOA requires that sanctions 
for performance failure be based on the primary indicators of 
performance.
    The sanctions will alter Federal transfer payments.\18\ Transfer 
payments, as defined by OMB Circular A-4, are payments from one group 
to another that do not affect total resources available to society. The 
Department requests comment and data that would allow for estimation of 
the transfer that would result from the sanctions provision.
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    \18\ The Department transfers funds to each State through a 
formal grant process. States may set aside a portion of these funds 
for discretionary use under WIOA. If a State were sanctioned, we 
would de-obligate the funds comprising the penalty from the State's 
set-aside, thereby reducing funding without incurring additional 
costs.
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Costs
    At the State level, the Department estimated the costs resulting 
from labor requirements by first multiplying the estimated average 
number of managers per State (1), the time required to evaluate State 
performance (40 hours), and the hourly compensation rate. We performed 
the same calculation for technical staff (1 staff member for 80 hours) 
and administrative staff (1 staff member for 40 hours). We summed the 
labor cost for all three personnel categories ($9,302) and multiplied 
the result by the number of States (56) to estimate a recurring annual 
transfer of $520,939.
    The Department estimates that 56 States will be impacted by this 
annual cost because we have determined that 56 States will calculate, 
annually, the performance levels of each State's core programs. Each 
State will do this on an annual basis in order to determine if the 
State is subject to sanctions, as discussed in proposed Sec.  677.190 
of this part, by comparing those levels against the negotiated levels 
of performance that the State has provided for in the State Plan.
q. Colocation of Wagner-Peyser Services
    WIOA sec. 121(e)(3) requires colocation of Wagner-Peyser Employment 
Service offices and one-stop centers established under title I of WIOA. 
Colocation is intended to improve service delivery, avoid duplication 
of services, and enhance coordination of services, including location 
of staff to ensure access to services in underserved areas.
Costs
    At the State level for DOL programs, the Department estimated this 
labor cost by first multiplying the estimated average number of 
managers per State (10), the time required to collocate Wagner-Peyser 
Services (40 hours), and the hourly compensation rate. We

[[Page 20822]]

performed the same calculation for the following occupational 
categories: legal counsel staff (10 staff for 10 hours each), technical 
staff (20 staff at 25 hours each), and administrative staff (10 staff 
for 5 hours each). We summed the labor cost for all four personnel 
categories ($69,415) and multiplied the result by the number of States 
without collocated Wagner-Peyser Services (10) to estimate a one-time 
cost of $694,152, which results in an annual cost of $69,415.
    At the State level, the Department estimated consultant costs by 
multiplying the estimated consultant costs ($10,000) by the number of 
States without collocated Wagner-Peyser Services (10). This calculation 
yields an estimated one-time cost of $100,000, resulting in an average 
annual cost of $10,000.
    At the local level, the Department estimated labor costs by first 
multiplying the estimated average number of managers for all local 
entities within a State (100), the time required to collocate Wagner-
Peyser Services (40 hours), and the hourly compensation rate. We 
performed the same calculation for the technical staff (200 staff for 
25 hours each) and administrative staff (100 staff for 5 hours each). 
We summed the labor cost for all three personnel categories ($631,098) 
and multiplied the result by the number of local areas without 
collocated Wagner-Peyser offices and one-stops (100) to estimate a one-
time cost of $63,109,800, resulting in an annual cost of $6,310,980.
    The sum of these costs yields a one-time cost of $63,903,952, which 
results in an average annual cost of $6,390,395 for individuals from 
the State and local levels to collocate Wagner-Peyser Services.
r. Partners Required To Pay Their Share for Proportionate Use of One-
stop Delivery System
    An important goal under both the local and State funding mechanisms 
is to ensure that each one-stop partner contributes its proportional 
share to the funding of one-stop infrastructure costs, consistent with 
Federal cost principles. Under WIOA sec. 121(h), in general, State 
Governors must ensure that costs are appropriately shared by one-stop 
partners. Contributions must be based on proportional share of use and 
all funds must be spent solely for allowable purposes in a manner 
consistent with the applicable authorizing statute and all other 
applicable legal requirements, including Federal cost principles.
    This provision will alter Federal transfer payments, and the 
Department requests comment and data that would allow for estimation of 
this rule-induced transfer.\19\
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    \19\ The Department distributes funds through a combination of 
multi-step formula distributions, Title III (Wagner-Peyser) 
distribution, and national grant competitions that award funds 
directly to partners. The Department supplies funding to cover 
payments for partners proportionate to their use of one-stop 
delivery systems, although partners may instead opt to use pay-in-
kind or other leveraged funds.
---------------------------------------------------------------------------

Costs
    At the State level, the Department estimated costs related to this 
provision (e.g., the cost of developing memoranda of understanding) by 
first multiplying the estimated average number of managers per State 
(50), the time required for States to comply with payment requirements 
proportional to use of one-stop delivery systems (40 hours), and the 
hourly compensation rate. We performed the same calculation for the 
following occupational categories: Legal counsel staff (50 staff for 1 
hour each), technical staff (100 staff for 40 hours each), and 
administrative staff (50 staff for 5 hours each). We summed these 
products for all four personnel categories ($419,560) and multiplied 
the result by the number of States that need to pay their proportional 
share (54) to estimate transfer of $22,656,251 occurring once every 
three years, resulting in an average annual transfer of $6,796,875.
s. Establishing Training Provider Eligibility Procedures, Including 
Adding Registered Apprenticeship
    Under WIOA sec. 122, the Governor, after consultation with the 
State WDB, must establish criteria, information requirements, and 
procedures regarding the eligibility of providers of training services 
to receive funds under WIOA for the provision of training services in 
local areas in the State. Training providers, including those operating 
under the individual training account exceptions, must qualify as ETPs, 
except for those engaged in on-the-job and customized training (for 
which the Governor should establish qualifying procedures). Registered 
apprenticeship programs are included in the ETPL, provided the program 
remains eligible. Only providers that the State determines to be 
eligible under WIOA sec. 122 may receive training funds under WIOA 
title I-B.
Costs
    At the State level, the Department estimated this cost by first 
multiplying the estimated average number of managers per State (1), the 
time needed to establish procedures for training provider eligibility 
(40 hours), and the hourly compensation rate. We performed the same 
calculation for the legal counsel staff (1 staff member for 20 hours) 
and technical staff (1 staff member for 80 hours). We summed the labor 
cost for all three personnel categories ($9,450) and multiplied the 
result by the number of States that need to pay their proportional 
share (56) to estimate this one-time cost of $529,202, resulting in an 
annual cost of $52,920.
t. Determining Eligibility of New and Previously Eligible Providers
    Under the requirements of WIOA sec. 122, the procedures for 
determining eligibility of providers are established by the Governor, 
after consultation with the State WDB and include application and 
renewal procedures, eligibility criteria, and information requirements.
Costs
    At the State level for DOL programs, the Department estimated this 
labor cost by first multiplying the estimated average number of 
managers per State (1), the time needed to determine provider 
eligibility (40 hours), and the hourly compensation rate. We performed 
the same calculation for the technical staff (2 staff for 110 hours 
each) and administrative staff (2 staff for 50 hours each). We summed 
the labor cost for all three personnel categories ($20,386) and 
multiplied the result by the number of States (56) to estimate a one-
time cost of $1,141,628, resulting in an annual cost of $114,163.
u. Biennial Review of Eligibility
    Under WIOA sec. 122(c)(2), training provider eligibility criteria 
established under this provision must include procedures for biennial 
review and renewal of eligibility for providers of training services.
Costs
    At the State level, the Department estimated this labor cost by 
first multiplying the estimated average number of managers per State 
(1), the time needed to perform the eligibility review (30 hours), and 
the hourly compensation rate. We performed the same calculation for the 
technical staff (2 staff for 60 hours each) and administrative staff (2 
staff for 30 hours each). We summed the labor cost for all three 
personnel categories ($11,846) and multiplied the result by the number 
of States (56) to estimate cost of $663,395 that occurs four times over 
the 10-year analysis period, that is, an annual cost of $265,358.

[[Page 20823]]

v. Disseminating the Training Provider List With Accompanying 
Information
    Under WIOA sec. 122(d), the Governor must ensure preparation of an 
appropriate list of providers determined to be eligible under this 
section to offer a program in the State (and, as appropriate, in a 
local area), accompanied by information identifying the recognized 
post-secondary credential offered by the provider and other appropriate 
information. The list must be provided to the Local Boards in the 
State, and made available to such participants and to members of the 
public through the one-stop delivery system in the State.
Costs
    At the State level, the Department estimated this labor cost by 
first multiplying the estimated average number of managers per State 
(1), the time needed to disseminate the ETPL with accompanying 
information (30 hours), and the hourly compensation rate. We performed 
the same calculation for the following occupational categories: 
Technical staff (2 staff for 80 hours each), administrative staff (2 
staff for 45 hours), and IT reprogramming (database development) staff 
(2 staff for 125 hours each). We summed the labor cost for all four 
personnel categories ($30,449) and multiplied the result by the number 
of States (56) to estimate a one-time cost of $1,705,125, resulting in 
an annual cost of $170,513.
w. Migrant and Seasonal Farmworker Housing
    While bringing the Department's housing standards at 20 CFR 654 
(ETA Standards) under the Occupational Safety and Health Administration 
(OSHA) provisions set forth in 29 CFR 1910.142 will not completely 
remedy many of the inadequate housing conditions common among 
agricultural housing facilities, the Department anticipates the change 
will: (1) Update the housing standards as the OSHA provisions conform 
to slightly more modern standards; (2) streamline the compliance 
process for employers who will only need to look to one place to comply 
with housing standards; and (3) ease the administrative burden on State 
and Federal employees who conduct housing inspections as they will only 
need to learn and rely upon one set of housing standards.
    In estimating the impact of the proposed changes to 20 CFR 654, the 
Department consulted various agencies within DOL to uncover pertinent 
data. Such data includes the number of H-2A employers approved through 
the Office of Foreign Labor Certification (OFLC). The Department 
believes that reviewing H-2A employer data is useful as it represents a 
subset of population (and, therefore, a minimum) of the total number of 
employers that may be offering housing to agricultural workers and who 
may be affected by the proposed changes. The Department estimates that 
of the approximately 6,400 \20\ employers nationally who hire foreign 
workers under the H-2A program and who provide housing, the majority 
will not be affected by the proposed changes because it estimates that, 
nationally, OSHA housing standards apply more frequently than the ETA 
Standards in the context of housing investigations. Specifically, the 
Department estimates that every region, except the Northeast and 
Pacific Northwest, has agricultural housing that predominantly falls 
under the OSHA standards. However, the situation will vary from State 
to State. For example, Colorado reported that approximately 84 percent 
of the agricultural housing inspected in the State from July 1, 2014 to 
January 29, 2015 falls under the ETA standards. Wyoming reported that 
64 percent of the housing inspections over the course of a year fell 
under ETA standards.
---------------------------------------------------------------------------

    \20\ This number is derived from OFLC data on employers that 
have submitted H-2A applications. The Department extrapolated the 
number of unique employers from the full list of applications to 
avoid duplication and to identify the fewest employers that may be 
impacted by these proposed changes.
---------------------------------------------------------------------------

    However, the housing data currently available to DOL is limited. 
The Department collects agricultural housing information as it pertains 
to employers' compliance with the appropriate standards. The Department 
does not collect or track the number of agricultural housing units 
nationally that fall under the ETA versus the OSHA standards. To better 
understand the impact of the proposed regulations, the Department would 
like to know: (1) The approximate number of agricultural housing units 
in the United States provided by agricultural employers for 
farmworkers; (2) the approximate percentage of the total farmworker 
housing units that currently fall under the ETA Standards set forth in 
20 CFR 654; and (3) the estimated cost of bringing those housing units 
from the ETA Standards into compliance with the OSHA Standards. The 
Department would appreciate public feedback on the aforementioned data 
elements.
    Specifically, it would be helpful for DOL's analysis if: (1) There 
are State Workforce Agencies or States that would share any data on the 
total number of employer-provided agricultural housing units in the 
State and the percentage of those that are subject to the ETA 
Standards; and (2) agricultural employers would furnish estimated costs 
for bringing their farmworker housing units from ETA to OSHA Standards. 
The Department appreciates any such information that could assist in 
the development of the overall impact analysis.
5. Summary of Analysis
    Exhibit 3 summarizes the annual and total costs of the proposed 
rule. It summarizes the total 10-year total costs and the average 
annualized costs for each provision of the proposed rule. The exhibit 
also presents high-level benefits resulting from full WIOA 
implementation for each provision. These qualitative forecasts are 
predicated on program experience and are outcomes for which data will 
only become available after implementation. The Department estimates 
the average annual cost of the proposed rule over the 10-year period of 
analysis at $38.4 million. The largest contributor to this cost is the 
provision related to the development and improvement of the workforce 
development system, which amounts to an estimated $9.2 million per 
year. The next largest cost results from career pathways development at 
$7.1 million per year, followed by the cost of partners required to pay 
their share for proportionate use of one-stop delivery system at an 
estimated $6.8 million per year.

[[Page 20824]]



                               Exhibit 3--Costs of the Proposed Rule by Provision
----------------------------------------------------------------------------------------------------------------
                                        Total 10-year    Average annual
              Provision                     cost              cost          Percent of      Qualitative benefit
                                       (undiscounted)    (undiscounted)     total cost          highlights
----------------------------------------------------------------------------------------------------------------
(a) New State Workforce Development           $313,435           $31,343            0.08  Policy implementation
 Board Membership Requirements.                                                            efficiencies from
                                                                                           reduced size and
                                                                                           maneuverability.
(b) Development and Continuous              92,078,720         9,207,872           23.96  Mission clarification
 Improvement of the Workforce                                                              and ongoing
 Development System.                                                                       commitment should
                                                                                           foster future
                                                                                           envisioned benefits
                                                                                           continuing to accrue.
(c) Development of Statewide                 1,202,284           120,228            0.31  Mission clarification
 Policies Affecting the State's One-                                                       for State WDBs and
 stop System.                                                                              overall system
                                                                                           building capacity.
(d) Development of Strategies for            2,292,909           229,291            0.60  Recognition of the
 Technological Improvements.                                                               efficiencies
                                                                                           generated by
                                                                                           technology and
                                                                                           enhanced management
                                                                                           capabilities
                                                                                           especially utilizing
                                                                                           outcome data.
(e) State Plan Modification.........           135,005            13,501            0.04  More efficient use of
                                                                                           public resources;
                                                                                           enhanced customer
                                                                                           service; improved
                                                                                           program management
                                                                                           based on actual
                                                                                           client data.
(f) Identification of Regions.......         1,101,266           110,127            0.29  Enhanced employer and
                                                                                           employee services as
                                                                                           a result of
                                                                                           recognition of real
                                                                                           labor markets
                                                                                           (without artificial
                                                                                           jurisdictional
                                                                                           boundaries).
(g) Appoint New Local Workforce              4,644,773           464,477            1.21  Efficient use of board
 Development Board and Appropriate                                                         time; avoids
 Firewalls.                                                                                conflicts of interest
                                                                                           and negative
                                                                                           publicity;
                                                                                           administrative
                                                                                           savings.
(h) Career Pathways Development.....        70,679,380         7,067,938           18.39  Improved educational
                                                                                           and employment
                                                                                           outcomes; potential
                                                                                           employees are better
                                                                                           prepared for jobs.
(i) Development of Proven and                2,879,850           287,985            0.75  Improved job
 Promising Practices.                                                                      placements and
                                                                                           customer service.
(j) Technology......................        23,747,984         2,374,798            6.18  Improved customer
                                                                                           service; better
                                                                                           decision-making from
                                                                                           improved service
                                                                                           level data; reduced
                                                                                           paper costs, improved
                                                                                           collaboration across
                                                                                           service partners;
                                                                                           improved customer
                                                                                           service planning;
                                                                                           reduced duplication
                                                                                           of service intakes.
(k) Selection of the One-stop               19,044,540         1,904,454            4.95  Improved public
 Operator.                                                                                 confidence in the
                                                                                           process; avoided
                                                                                           conflicts of
                                                                                           interest.
(l) Coordination with Education              3,195,282           319,528            0.83  Improved preparation
 Providers.                                                                                of workers and youth
                                                                                           for future jobs;
                                                                                           enhanced placements
                                                                                           and outcomes.
(m) Regional Plans..................        10,342,671         1,034,267            2.69  Savings from expanded
                                                                                           collaboration;
                                                                                           increased services to
                                                                                           customers; reduced
                                                                                           administrative
                                                                                           overhead.
(n) Local and Regional Plan                  4,089,800           408,980            1.06  Increased coordination
 Modification.                                                                             of services leading
                                                                                           to resource
                                                                                           efficiencies;
                                                                                           transparency.
(o) Improved Information about               5,518,258           551,826            1.44  Improved customer
 Potential Training Program                                                                decision-making;
 Providers.                                                                                linkage of resources
                                                                                           to outcomes and
                                                                                           accountability for
                                                                                           training and improved
                                                                                           placement outcomes.
(p) Sanctions on Under-performing            5,209,389           520,939            1.36  Improved services;
 States.                                                                                   better use of WIOA
                                                                                           funds; enhanced
                                                                                           recognition of
                                                                                           performance
                                                                                           imperatives by States
                                                                                           and local areas; more
                                                                                           accountability.
(q) Co-location of Wagner-Peyser            63,903,952         6,390,395           16.63  Reduced administrative
 Services.                                                                                 overhead; improved
                                                                                           service delivery and
                                                                                           customer service;
                                                                                           more efficient and
                                                                                           effective public
                                                                                           administration.
(r) Partners Required to Pay their          67,968,752         6,796,875           17.68  Expanded system
 Share for Proportionate Use of One-                                                       cohesion; improved
 stop Delivery System.                                                                     service delivery;
                                                                                           avoidance of
                                                                                           fragmented or
                                                                                           duplication of
                                                                                           services.
(s) Establishing Training Provider             529,202            52,920            0.14  Increased training
 Eligibility Procedures, Including                                                         opportunities,
 Adding Registered Apprenticeship.                                                         especially for youth;
                                                                                           effective
                                                                                           administration
                                                                                           linking to
                                                                                           accountability and
                                                                                           outcomes.
(t) Determining Eligibility of New           1,141,628           114,163            0.30  Increased
 and Previously Eligible Providers.                                                        transparency; uniform
                                                                                           treatment of ETPs;
                                                                                           reduced incidents of
                                                                                           non-meritorious
                                                                                           performance.
(u) Biennial Review of Eligibility..         2,653,580           265,358            0.69  Increased competition
                                                                                           leading to more and
                                                                                           better placements.
(v) Disseminating the Training               1,705,125           170,513            0.44  More informed customer
 Provider List with Accompanying                                                           choice; clearer link
 Information.                                                                              of training resources
                                                                                           to desired outcomes;
                                                                                           more transparency.
                                     ----------------------------------------------------

[[Page 20825]]

 
(w) Migrant and Seasonal Farmworker                     Not quantified.                   More streamlined
 Housing.                                                                                  compliance process
                                                                                           for employers who
                                                                                           will only need to
                                                                                           look to one place to
                                                                                           comply with housing
                                                                                           standards. Eased
                                                                                           administrative burden
                                                                                           on State and Federal
                                                                                           employees who conduct
                                                                                           housing inspections
                                                                                           as they will only
                                                                                           need to learn and
                                                                                           rely on one set of
                                                                                           housing standards.
                                     ----------------------------------------------------
    Total...........................       384,377,787        38,437,778          100.00  ......................
----------------------------------------------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

    Exhibit 4 summarizes the first-year cost of each provision of the 
proposed rule. The Department estimates the total first-year cost of 
the proposed rule at $94.6 million. The largest contributor to the 
first-year cost is the provision related to the colocation of Wagner-
Peyser services $63.9 million. The next largest first-year cost results 
from development and continuous improvement of the workforce 
development system, amounting to $9.8 million, followed by the cost of 
career pathways development at $7.1 million.

      Exhibit 4--First-Year Cost of the Proposed Rule by Provision
------------------------------------------------------------------------
                                     Total first-year   Percent of total
                                           cost         first-year cost
------------------------------------------------------------------------
(a) New State Workforce                      $313,435               0.33
 Development Board Membership
 Requirements.....................
(b) Development and Continuous              9,775,773              10.34
 Improvement of the Workforce
 Development System...............
(c) Development of Statewide                1,202,284               1.27
 Policies Affecting the State's
 One-stop System..................
(d) Development of Strategies for             229,291               0.24
 Technological Improvements.......
(e) State Plan Modification.......                  0               0.00
(f) Identification of Regions.....                  0               0.00
(g) Appoint New Local Workforce             4,644,773               4.91
 Development Board and Appropriate
 Firewalls........................
(h) Career Pathways Development...          7,067,938               7.47
(i) Development of Proven and                 287,985               0.30
 Promising Practices..............
(j) Technology....................          2,374,798               2.51
(k) Selection of the One-stop                       0               0.00
 Operator.........................
(l) Coordination with Education               319,528               0.34
 Providers........................
(m) Regional Plans................                  0               0.00
(n) Local and Regional Plan                         0               0.00
 Modification.....................
(o) Improved Information about                551,826               0.58
 Potential Training Program
 Providers........................
(p) Sanctions on Under-performing             520,939               0.55
 States...........................
(q) Co-location of Wagner-Peyser           63,903,952              67.57
 Services.........................
(r) Partners Required to Pay their                  0               0.00
 Share for Proportionate Use of
 One-stop Delivery System.........
(s) Establishing Training Provider            529,202               0.56
 Eligibility Procedures, Including
 Adding Registered Apprenticeship.
(t) Determining Eligibility of New          1,141,628               1.21
 and Previously Eligible Providers
(u) Biennial Review of Eligibility                  0               0.00
(v) Disseminating the Training              1,705,125               1.80
 Provider List with Accompanying
 Information......................
                                   -------------------------------------
(w) Migrant and Seasonal
 Farmworker (MSFW) Housing........             Not quantified.
                                   -------------------------------------
    Total.........................         94,568,477             100.00
------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

    Exhibit 5 presents the per-year and total estimated costs of the 
proposed rule. The total undiscounted cost of the rule sums to $384.4 
million over the 10-year analysis period, which is an average annual 
cost of $38.4 million per year. In total, the 10-year discounted costs 
of the proposed rule range from $305.6 million to $345.9 million (with 
7- and 3-percent discounting, respectively).
    To contextualize the cost of the proposed rule, the Department of 
Labor's average annual budget for WIA over the past three fiscal years 
was $2.8 billion. Thus, the annual additional cost of implementing the 
proposed rule is between 1.1 percent and 1.2 percent of the average 
annual cost of implementing WIA over the last three fiscal years (with 
3 percent and 7 percent discounting, respectively).

           Exhibit 5--Monetized Costs of the Proposed DOL Rule
                             [2013 dollars]
------------------------------------------------------------------------
                          Year                              Total costs
------------------------------------------------------------------------
2015....................................................     $94,568,478
2016....................................................      32,567,226
2017....................................................      43,153,328
2018....................................................      24,039,512
2019....................................................      20,497,077
2020....................................................      55,886,872
2021....................................................      20,497,077
2022....................................................      22,506,238

[[Page 20826]]

 
2023....................................................      43,153,328
2024....................................................      27,508,652
Undiscounted 10-year Total..............................     384,377,787
10-year Total with 3% Discounting.......................     345,897,084
10-year Total with 7% Discounting.......................     305,556,353
10-year Average.........................................      38,437,778
Annualized with 3% Discounting..........................      40,549,690
Annualized with 7% Discounting..........................      43,504,350
------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

Benefits
    The Department was unable to quantify the benefits associated with 
the proposed rule because of data limitations and a lack of operational 
(WIOA) data or evaluation findings on the provisions of the proposed 
rule. Thus, the Department is unable to provide monetary estimates of 
several important benefits to society, including the increased 
employment opportunities for unemployed or under-employed U.S. workers, 
benefits of colocation of Wagner-Peyser Services, enhanced ETP process, 
regional planning, and evaluation of State programs. In support of a 
State's strategic plan and goals, State-conducted evaluation and 
research of programs would enable each State to test various 
interventions geared toward State conditions and opportunities. Results 
from such evaluation and research, if used by States, could improve 
service quality and effectiveness and, thus, potentially lead to higher 
employment rates and earnings among participants. Implementing various 
innovations that have been tested and found effective could also lead 
to lower unit costs and increased numbers of individuals served within 
a State. Sharing the findings nationally could lead to new service or 
management practices that other States could adopt to improve 
participant results, lower unit costs, or increase the number served.
    The Department invites comments regarding possible data sources or 
methodologies for estimating these benefits. In addition, the 
Department invites comments regarding other benefits that might arise 
from the proposed rule and how these benefits could be estimated.
    The Department provides a qualitative description of the 
anticipated WIOA benefits below. These qualitative forecasts are 
predicated on program experience and are outcomes for which data will 
only become available after implementation. Although these studies are 
largely based on programs and their existing requirements under WIA, we 
believe that they capture the essence of the societal benefits that can 
be expected from this proposed rule.
    Training's impact on placement. A recent study found that flexible 
and innovative training which is closely related to a real and in-
demand occupation is associated with better labor market outcomes for 
training participants. Youth disconnected from work and school can 
benefit from comprehensive and integrated models of training that 
combine education, occupational skills, and support services.\21\ 
However, the study noted that evidence for effective employment and 
training-related programs for youth is less extensive than for adults, 
and that there are fewer positive findings from evaluations.\22\ The 
WIA youth program remains largely untested.\23\ One study found that 
WIA training services increase placement rates by 4.4 percent among 
adults and by 5.9 percent among dislocated workers,\24\ while another 
study concluded that placement rates are 3 to 5 percent higher among 
all training recipients.\25\
---------------------------------------------------------------------------

    \21\ Department of Labor et al. ``What Works In Job Training: A 
Synthesis of the Evidence.'' July 2014.
    \22\ Ibid.
    \23\ Decker, Paul T. and Jillian A. Berk. 2011. ``Ten Years of 
the Workforce Investment Act (WIA): Interpreting the Research on WIA 
and Related Programs.'' Journal of Policy Analysis and Management 30 
(4): 906-926.
    \24\ Hollenbeck, Kevin, Daniel Schroeder, Christopher T. King, 
and Wei-Jang Huang. ``Net Impact Estimates for Services Provided 
through the Workforce Investment Act.'' Washington, DC: U.S. 
Department of Labor, 2005. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id 
=2367&mp=y&start=81&sort=7.
    \25\ Heinrich, Carolyn J., Peter R. Mueser, and Kenneth R. 
Troske. ``Workforce Investment Act Non-Experimental Net Impact 
Evaluation.'' Columbia, MD: IMPAQ International, LLC, 2009.
---------------------------------------------------------------------------

    Participants in occupational training had a ``5 percentage points 
higher reemployment rate than those who received no training, and 
reemployment rates were highest among recipients of on-the-job 
training, a difference of 10 to 11 percentage points.'' \26\ However, 
the study found that training did not correspond to higher employment 
retention or earnings.\27\ A Youth Opportunity Grant Initiative study 
found that Youth Opportunity was successful at improving outcomes for 
high-poverty youth. Youth Opportunity also increased the labor-force 
participation rate overall and for subgroups, including 16- to 19-year-
old adolescents, women, African Americans, and in-school youth.\28\ 
Department-sponsored research found that participants who received core 
services (often funded by Employment Services) and other services in 
American Job Centers were more likely to enter and retain 
employment.\29\
---------------------------------------------------------------------------

    \26\ Park, Jooyoun. ``Does Occupational Training by the Trade 
Adjustment Assistance Program Really Help Reemployment? Success 
Measured as Matching.'' Washington, DC: U.S. Department of Labor, 
Employment and Training Administration, 2011.
    \27\ Park, Jooyoun. ``Does Occupational Training by the Trade 
Adjustment Assistance Program Really Help Reemployment? Success 
Measured as Matching.'' Washington, DC: U.S. Department of Labor, 
Employment and Training Administration, 2011.
    \28\ Jackson, Russell H., Jamie Diamandopoulos, Carol Pistorino, 
Paul Zador, John Lopdell, Juanita Lucas-McLean, and Lee Bruno. 
``Youth Opportunity Grant Initiative (YO).'' Houston, TX: Decision 
Information Resources, Inc., 2008. Available at http://wdr.doleta.gov/research/FullText_Documents/YO%20Impact%20and%20Synthesis%20Report.pdf.
    \29\ Office of Policy Development and Research, U.S. Department 
of Labor. ``Five-Year Research and Evaluation Strategic Plan Program 
Years 2012-2017.'' May 2013. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_resultDetails&pub_id=2516&mp=y.
---------------------------------------------------------------------------

    Training's impact on wages. Before enactment of WIA, Job Training 
Partnership Act services had a modest but statistically significant 
impact on the earnings of adult participants.\30\ WIA training 
increased participants' quarterly earnings by $660; these impacts 
persisted beyond two years and were largest among women.\31\ WIA adult 
program participants who received core services (e.g. skill assessment, 
labor market information) or intensive services (e.g. specialized 
assessments, counseling) earned up to $200 more per quarter than non-
WIA participants. Participants who received training services in 
addition to core and intensive services initially earned less but 
caught up within 10 quarters with the earnings of participants who only 
received core or intensive services; marginal benefits of training 
could exceed $400 per quarter. Earnings progressions were similar for 
WIA adult program participants and users of the

[[Page 20827]]

labor exchange only.\32\ WIA training services also improved 
participants' long-term wage rates, doubling earnings after 10 quarters 
over those not receiving training services.\33\ However, WIA 
participants who did not receive training earned $550 to $700 more in 
the first quarter after placement. The study also noted that 
individuals who did not receive training received effective short-term 
counseling that enabled them to gain an immediate advantage in the 
labor market.\34\
---------------------------------------------------------------------------

    \30\ Barnow, Burt, and Daniel Gubits. ``Review of Recent Pilot, 
Demonstration, Research, and Evaluation Initiatives to Assist in the 
Implementation of Programs under the Workforce Investment Act.'' 
Baltimore, MD: Johns Hopkins University, 2003. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2365&mp=y&start=81
&sort=7.
    \31\ Barnow, Burt, and Daniel Gubits. ``Review of Recent Pilot, 
Demonstration, Research, and Evaluation Initiatives to Assist in the 
Implementation of Programs under the Workforce Investment Act.'' 
Baltimore, MD: Johns Hopkins University, 2003. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp__puListingDetails&pub__id=2365&mp=y&start=81&sort=7.
    \32\ Earnings Progression among Workforce Development 
Participants: Evidence from Washington State.'' Eugene, OR: 
University of Oregon, 2011. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp__puListingDetails&pub__id=2468&mp=y&start=1&sort=7.
    \33\ Heinrich, Carolyn J., Peter R. Mueser, and Kenneth R. 
Troske. ``Workforce Investment Act Non-Experimental Net Impact 
Evaluation.'' Columbia, MD: IMPAQ International, LLC, 2009.
    \34\ Heinrich, Carolyn J., Peter R. Mueser, and Kenneth R. 
Troske. ``Workforce Investment Act Non-Experimental Net Impact 
Evaluation.'' Columbia, MD: IMPAQ International, LLC, 2009. 
Available at http://wdr.doleta.gov/research/FullText_Documents/Workforce%20Investment%20Act%20Non-Experimental%20Net%20Impact%20Evaluation%20-%20Final%20Report.pdf.
---------------------------------------------------------------------------

    Another Department program, the Job Corps program for disadvantaged 
youth and young adults, produced sustained increases in earnings for 
participants in their early twenties. Students who completed Job Corps 
vocational training experienced average earnings increases by the 
fourth follow-up year over the comparison group, whereas those who did 
not complete training experienced no increase.\35\
---------------------------------------------------------------------------

    \35\ Gritz, Mark, and Terry Johnson. ``National Job Corps Study: 
Assessing Program Effects on Earnings for Students Achieving Key 
Program Milestones.'' Seattle, WA: Battelle Memorial Institute, 
2001. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2257&mp=y&start=14
1&sort=7.
---------------------------------------------------------------------------

    Another publication also noted that, on average, adults experienced 
a $743 quarterly post-exit earnings boost.\36\
---------------------------------------------------------------------------

    \36\ Hollenbeck, Kevin, Daniel Schroeder, Christopher T. King, 
and Wei-Jang Huang. ``Net Impact Estimates for Services Provided 
through the Workforce Investment Act.'' Washington, DC: U.S. 
Department of Labor, 2005. Available at http://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
---------------------------------------------------------------------------

    Those who completed training experienced a 15-percent increase in 
employment rates and an increase in hourly wages of $1.21 relative to 
participants without training.\37\ Participation in WIA training also 
had a distinct positive, but smaller, impact on employment and 
earnings, with employment 4.4 percentage points higher and quarterly 
earnings $660 higher than comparison group members.
---------------------------------------------------------------------------

    \37\ Needels, Karen, Jeanne Bellotti, Mina Dadgar, and Walter 
Nicholson. ``Evaluation of the Military Base National Emergency 
Grants: Final Report.'' Princeton, NJ: Mathematica Policy Research, 
2006.
---------------------------------------------------------------------------

    The following are channels through which these benefits might be 
achieved:
    Better information for workers. The accountability measures would 
provide workers with higher-quality information about potential 
training program providers and enable them to make better informed 
choices about which programs to pursue. The information analyzed and 
published by the WDBs about local labor markets also would help 
trainees and providers target their efforts and develop reasonable 
expectations about outcomes.
    Consumers of educational services, including disadvantaged and 
displaced workers, require reliable information on the value of 
different training options to make informed choices. Displaced workers 
tend to be farther removed from schooling and lack information about 
available courses and the fields with the highest financial return.\38\ 
Given these information gaps and financial pressures, it is important 
that displaced workers learn of the returns to various training 
plans.\39\ Still, one study determined that the cost-effectiveness of 
WIA job training for disadvantaged workers is ``modestly positive'' due 
perhaps to the limited sample of States on which the research was 
based.\40\
---------------------------------------------------------------------------

    \38\ Greenstone, Michael, and Adam Looney. ``Building America's 
Job Skills with Effective Workforce Programs: A Training Strategy to 
Raise Wages and Increase Work Opportunities.'' Washington, DC: 
Brookings Institution, 2011.
    \39\ Jacobson, Louis, Robert LaLonde, and Daniel Sullivan. 
``Policies to reduce high-tenured displaced workers' earnings losses 
through retraining.'' Discussion Paper 2011-11, The Hamilton 
Project, Brookings Institution, Washington, DC, 2011.
    \40\ Heinrich, Carolyn J., Peter R. Mueser, Kenneth R. Troske, 
Kyung-Seong Jeon, Daver C. Kahvecioglu. 2009 (November). ``New 
Estimates of Public Employment and Training Program Net Impacts: A 
Nonexperimental Evaluation of the Workforce Investment Act 
Program.'' Discussion Paper 4569, Institute for the Study of Labor 
(IZA), Bonn, Germany.
---------------------------------------------------------------------------

    Sanctions to under-performing States. WIOA requires the Department 
to place sanctions on States that under-perform for two consecutive 
years. The sanction would be five percent of set-aside funding. Having 
a clear and credible sanction will serve as an incentive for States and 
local entities to monitor performance more effectively and to intervene 
early in order to avoid the loss of funding.
    Evaluations of WIA indicate that sanctions have a larger influence 
on programs than incentives. Two-thirds of local workforce investment 
areas have indicated that the possibility of sanctions influenced their 
programs, whereas only slightly more than half indicated that 
incentives had an influence.\41\ Further, several Job Centers consider 
student placement outcomes in staff performance evaluations and pay for 
vocational instructors.\42\ This practice has significantly increased 
staff interest in successful student placement following program 
completion.\43\
---------------------------------------------------------------------------

    \41\ Dunham, Kate, Melissa Mack, Jeff Salzman, and Andrew 
Wiegand. ``Evaluation of the WIA Performance Measurement System: 
Survey Report.'' Oakland, CA: SPR Associates, 2005. Available at 
http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2408&mp=y&start=41
&sort=7.
    \42\ Johnson, Terry, Mark Gritz, Russell Jackson, John 
Burghardt, Carol Boussy, Jan Leonard, and Carlyn Orians. ``National 
Job Corps Study: Report on the Process Analysis.'' Princeton, NJ: 
Mathematica Policy Research, 1999. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2213&mp=y&start=20
1&sort=7.
    \43\ Ibid.
---------------------------------------------------------------------------

    Researchers expressed concerns over current WIA metrics for 
workforce development program performance. For example, in issuing high 
performance bonuses to States in recognition of high performance 
achievements, the metric negotiation process does not appropriately 
adjust for variations in economic and demographic characteristics or 
service mix.\44\ Additionally, the distribution of these bonuses does 
not directly correlate with program performance, with some lower 
performing States receiving larger bonuses than higher performing 
States.\45\
---------------------------------------------------------------------------

    \44\ Heinrich, Carolyn J. 2007. ``False or Fitting Recognition? 
The Use of High Performance Bonuses in Motivating Organizational 
Achievements.'' Journal of Policy Analysis and Management 26(2) 281-
304.
    \45\ Ibid.
---------------------------------------------------------------------------

    It is possible that the proposed rule might result in unintended 
consequences. For example, the efficacy of incentives may be reduced 
with poor measures, as compensation or recognition may not be 
commensurate with effort and subsequent performance, which could dampen 
employee motivation.\46\ Other unintended consequences may include 
distortion involving behavior intended to insure against the loss of 
compensation; also, misrepresentation of outcomes may occur.\47\ 
Researchers have expressed concerns about the current measures used to 
evaluate performance.\48\ High performance incentives may 
unintentionally impact performance negatively if they encourage 
programs to focus on receiving the award rather than improving program 
design, delivery, and outcomes. High performance

[[Page 20828]]

bonuses, therefore, could represent an inefficient use of 
resources.\49\
---------------------------------------------------------------------------

    \46\ Ibid.
    \47\ Ibid.
    \48\ Ibid.
    \49\ Wandner, Stephen, and Michael Wiseman. ``Financial 
performance incentives for United States government programs: 
Lessons learned from the Workforce Investment Act, Temporary 
Assistance to Needy Families, and food stamps.'' What the European 
Social Fund can learn from the WIA experience, Washington, DC 
Retrieved January 16 (2009): 2011.
---------------------------------------------------------------------------

    State performance accountability measures. This requirement would 
include significant data collection for Local Boards to address 
performance measures for the core programs in their jurisdictions. This 
data collection would permit the State WDBs to assess performance 
across each State. Training providers would be required to provide data 
to Local Boards, which would represent a cost in the form of increased 
data collection and processing. Employers and employees also would have 
to provide information to the training providers, which would take 
time. This provision, in combination with the board membership 
provision requiring employer/business representation, is expected to 
improve the quality of local training and, ultimately, the number and 
caliber of job placements.
    Implementation of follow-up measures, rather than termination-based 
measures, might improve long-term labor market outcomes, although some 
could divert resources from training activities.\50\
---------------------------------------------------------------------------

    \50\ Courty, Pascal, and Gerald Marschke. ``Making Government 
Accountable: Lessons from a Federal Job Training Program.'' Public 
Administration Review 67.5 (2007): 904-916.
---------------------------------------------------------------------------

    Before-after earning metrics capture the contribution of training 
to earnings potential and minimize incentives to select only training 
participants with high initial earnings.\51\ The study found that value 
added net of social cost is one objective that is too difficult to 
measure on a regular basis. With the exception of programs in a few 
States, current incentives do not reward enrollment of the least 
advantaged.\52\ In addition, the study noted evidence that the 
performance-standards can be ``gamed'' in an attempt to maximize their 
centers' measured performance.\53\
---------------------------------------------------------------------------

    \51\ Heckman, James J., Carolyn Heinrich, and Jeffrey A. Smith. 
1997. ``Assessing the Performance of Performance Standards in Public 
Bureaucracies.'' American Economic Review 87(2): 389-95.
    \52\ Ibid.
    \53\ Ibid.
---------------------------------------------------------------------------

    Pressure to meet performance levels could lead providers to focus 
on offering services to participants most likely to succeed. For 
example, current accountability measures might create incentives for 
training providers to screen participants for motivation, delay 
participation for those needing significant improvement, or discourage 
participation by those with high existing wages.\54\
---------------------------------------------------------------------------

    \54\ Dunham, Kate, Melissa Mack, Jeff Salzman, and Andrew 
Wiegand. ``Evaluation of the WIA Performance Measurement System: 
Survey Report.'' Oakland, CA: SPR Associates, 2005. Available at 
http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2408&mp=y&start=41
&sort=7.
---------------------------------------------------------------------------

    The following subsections present additional channels by which 
economic benefits may be associated with various aspects of the 
proposed rule.
    Dislocated workers. A study found that for dislocated workers, 
receiving WIA services significantly increased employment rates by 13.5 
percent and boosted post-exit quarterly earnings by $951.\55\ However, 
another study found that training in the WIA dislocated worker program 
had a net benefit close to zero or even negative.\56\
---------------------------------------------------------------------------

    \55\ Hollenbeck, Kevin, Daniel Schroeder, Christopher T. King, 
and Wei-Jang Huang. ``Net Impact Estimates for Services Provided 
through the Workforce Investment Act.'' Washington, DC: U.S. 
Department of Labor, 2005. Available at http://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
    \56\ Heinrich, Carolyn J., Peter R. Mueser, and Kenneth R. 
Troske. ``Workforce Investment Act Non-Experimental Net Impact 
Evaluation.'' Columbia, MD: IMPAQ International, LLC, 2009. 
Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2419&mp=y&start=41
&sort=7.
---------------------------------------------------------------------------

    Self-employed individuals. Job seekers who received self-employment 
services started businesses sooner and had longer lasting businesses 
than nonparticipants. Self-employment assistance participants were 19 
times more likely to be self-employed than nonparticipants and 
expressed high levels of satisfaction with self-employment. A study of 
Maine, New Jersey, and New York programs found that participants were 
four times more likely to obtain employment of any kind than 
nonparticipants.\57\
---------------------------------------------------------------------------

    \57\ Kosanovich, William, Heather Fleck, Berwood Yost, Wendy 
Armon, and Sandra Siliezar. ``Comprehensive Assessment of Self-
Employment Assistance Programs.'' Arlington, VA: DTI Associates, 
2002. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2293&mp=y&start=12
1&sort=7.
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    Workers with disabilities. A study of individuals with disabilities 
enrolled in training for a broad array of occupations (including 
wastewater treatment, auto body repair, meat cutter/wrapper, clerical 
support staff, surgical tools technician, and veterinary assistant) 
found that the mean hourly wage and hours worked per quarter for 
program graduates were higher than for individuals who did not complete 
the program.
    In conclusion, after a review of the quantitative and qualitative 
analysis of the impacts of this NPRM, the Department has determined 
that the societal benefits justify the anticipated costs.

B. 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 a collection of information, including publishing 
for public comment a summary of the collection of information and a 
brief description of the need for and proposed use of the information.
    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department conducts a preclearance consultation program to 
provide the general public and Federal agencies with an opportunity to 
comment on proposed and continuing collections of information in 
accordance with the PRA. See 44 U.S.C. 3506(c)(2)(A). This activity 
helps to ensure that the public understands the Department's collection 
instructions, respondents can provide the requested data in the desired 
format, reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the Department can 
properly assess the impact of collection requirements on respondents. 
Furthermore, the PRA requires all Federal agencies to analyze proposed 
regulations for potential time burdens on the regulated community 
created by provisions in the proposed regulations, which require the 
submission of information. The information collection requirements must 
also be submitted to the OMB for approval.
    The Department notes that a Federal agency may not conduct or 
sponsor a collection of information unless it is approved by the OMB 
under the PRA and displays a currently valid OMB control number. The 
public is also not required to respond to a collection of information 
unless it displays a currently valid OMB control number. In addition, 
notwithstanding any other provisions of law, no person will be subject 
to penalty for failing to comply with a collection of information if 
the collection of information does not display a currently valid OMB 
control number (44 U.S.C. 3512).
    The information collections in this rule are summarized as follows. 
(Detailed information about the information collections identified in 
this summary is available in the section-

[[Page 20829]]

by-section discussion of this NPRM, Section IV.) The table below 
captures the current and proposed burden hours associated with the 
information collections.

                               Current and Proposed Information Collection Burdens
----------------------------------------------------------------------------------------------------------------
                                                                   Burden hours
                        OMB approval No.                             currently     Burden hours       Change
                                                                     approved        proposed
----------------------------------------------------------------------------------------------------------------
1205-0NEW.......................................................               0           8,550           8,550
1205-3NEW.......................................................       * 161,373         161,373               0
1205-0001.......................................................             416             416               0
1205-0039.......................................................           8,521           8,521               0
1205-0219.......................................................          38,610          38,610               0
1205-0426.......................................................          11,440          19,153           7,713
1205-0439.......................................................           1,006           1,066              60
1205-0461.......................................................           3,392           5,088           1,696
                                                                 -----------------------------------------------
    Total.......................................................         224,758         242,777          18,019
----------------------------------------------------------------------------------------------------------------
* OMB 1205-3NEW would not increase burden hours because it would consolidate information collections from three
  currently approved information collections: OMB 1205-0422, OMB 1205-0425, OMB 1205-0464.

    The Department anticipates that the above collections may be phased 
out or modified, as appropriate, as WIOA requirements are fully 
implemented.

    Agency: DOL-ETA.
    Title of Collection: State Training Provider Eligibility 
Collection.
    OMB Control Number: 1205-0NEW.
    Description: Under WIOA sec. 122, the Governor, after consultation 
with the State Board, must establish criteria, information 
requirements, and procedures regarding the eligibility of providers of 
training services to receive funds under WIOA for the provision of 
training services in local areas in the State. The proposed rule 
describes the process for adding ``new''' providers to the ETPL, 
explains the detailed application process for previously WIA-eligible 
providers to remain eligible under WIOA, describes the performance 
information that providers are required to submit to the State in order 
to establish or renew eligibility, and explains the requirements for 
distributing the ETPL and accompanying information about the programs 
and providers on the list.
    Affected Public: State, local, and tribal governments, and private 
sector.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 122).
    Total Estimated Number of Respondents Annually: 11,400 (11,400 
additional respondents resulting from this rulemaking).
    Total Estimated Number of Annual Responses: 11,400 (11,400 
additional responses resulting from this rulemaking).
    Total Estimated Annual Time Burden: 8,550 hours (8,550 additional 
hours resulting from this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  680.450, Sec.  680.460, Sec.  680.490, Sec.  
680.500.
    Title of Collection: WIOA Performance Management and Information 
and Reporting System (YouthBuild, National Farmworkers Jobs Program, 
Indian and Native Americans Program).
    OMB Control Number: 1205-3NEW.
    Description: This new information collection will consolidate the 
existing information collections for YouthBuild, National Farmworkers 
Jobs Program, Indian and Native Americans Program participants. These 
information collections are currently approved under OMB Control 
Numbers 1205-0422, 1205-0425, and 1205-0464. The WIOA Performance 
Management and Information and Reporting System would standardize the 
initial application, quarterly, and annual reporting processes for 
program participants.
    Affected Public: State, local, and tribal governments, and private 
sector.
    Obligation to Respond: Required to obtain or retain benefits (WIOA, 
sections 166, 167, and 171).
    Total Estimated Number of Respondents Annually: 377 (no additional 
respondents resulting from this rulemaking).
    Total Estimated Number of Annual Responses: 29,682 (no additional 
respondents resulting from this rulemaking).
    Total Estimated Annual Time Burden: 161,373 hours (no additional 
respondents resulting from this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  684.420, Sec.  684.610, Sec.  684.700, Sec.  
684.800, Sec.  685.210, Sec.  685.400, Sec.  688.420, Sec.  688.610.

    Title of Collection: Work Application and Job Order Recordkeeping.
    OMB Control Number: 1205-0001.
    Description: The proposed rule would not affect the burden hours 
associated with creating work application and job order records. 
However, the rule would change the record retention requirements for 
work applications and job orders from 1 year to 3 years in order to 
align with other Wagner-Peyser record retention requirements.
    Affected Public: State governments.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 121).
    Total Estimated Number of Respondents Annually: 52 (no change as a 
result of this rulemaking).
    Total Estimated Number of Annual Responses: 52 (no change as a 
result of this rulemaking).
    Total Estimated Annual Time Burden: 416 hours (no change as a 
result of this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  652.8.

    Title of Collection: Migrant and Seasonal Farmworker Monitoring 
Report and One-Stop Career Center Complaint/Referral Record.
    OMB Control Number: 1205-0039.
    Description: WIOA expands the existing complaint system under 20 
CFR

[[Page 20830]]

part 658 subpart E to require most employment-related law complaints by 
MSFWs to be recorded, referred, and tracked to resolution. Under 
existing regulations, employment-related law complaints by MSFWs are 
not recorded, referred, and tracked to resolution.
    Affected Public: State and local governments, and individuals.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 167).
    Total Estimated Number of Respondents Annually: 3,586 (no change as 
a result of this rulemaking).
    Total Estimated Number of Annual Responses: 3,786 (no change as a 
result of this rulemaking).
    Total Estimated Annual Time Burden: 8,521 hours (no change as a 
result of this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  653.107, Sec.  653.108(g)(6), Sec.  
653.108(s), Sec.  653.108(i), Sec.  653.108(m), Sec.  653.410, Sec.  
658.601, Sec.  658.601(a).

    Title of Collection: Standard Job Corps Contractor Gathering 
Information.
    OMB Control Number: 1205-0219.
    Description: The proposed rule would retain the same information 
collection requirements as those currently found at 20 CFR 670.960, but 
would relocate the requirements to 20 CFR 686.945. Consistent with 
existing rules, the proposed rule would require the Department to 
provide guidelines for maintaining records for each student during 
enrollment and for disposition of records after separation. As a 
result, the Department does not anticipate any changes in the 
information collection.
    Affected Public: Private sector.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 147).
    Total Estimated Number of Respondents Annually: 97 (no change as a 
result of this rulemaking).
    Total Estimated Number of Annual Responses: 184,628 (no change as a 
result of this rulemaking).
    Total Estimated Annual Time Burden: 38,610 hours (no change as a 
result of this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  686.945.

    Title of Collection: Placement Verification and Follow-up of Job 
Corps Participants.
    OMB Control Number: 1205-0426.
    Description: Job Corps' performance management system, which 
includes the OMS, is a well-established measurement system the Job 
Corps community has been using to track performance of centers and 
service providers for many years. It will be updated to reflect the new 
requirements of WIOA, including the new primary indicators of 
performance, but may also include breakouts of data that will help 
program managers target interventions in order to achieve the primary 
indicators. As a result, additional information would be collected from 
respondents.
    Affected Public: Individuals or households and private sector.
    Obligation to Respond: Voluntary.
    Total Estimated Number of Respondents Annually: 88,060 (34,737 
additional respondents resulting from this rulemaking).
    Total Estimated Number of Annual Responses: 88,060 (34,737 
additional responses resulting from this rulemaking).
    Total Estimated Annual Time Burden: 19,153 hours (7,713 additional 
hours resulting from this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  686.945, Sec.  686.955, Sec.  686.1000, 
Sec.  686.1010, Sec.  686.1020, Sec.  686.1030, and Sec.  686.1040.

    Title of Collection: National Emergency Grant Assistance--
Application and Reporting Procedures.
    OMB Control Number: 1205-0439.
    Description: Specified activities must