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Proposed Rule

Workforce Innovation and Opportunity Act; Notice of Proposed Rulemaking

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AGENCY:

Employment and Training Administration (ETA), Labor.

ACTION:

Notice of Proposed Rulemaking (NPRM).

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: OIRA_submission@omb.eop.gov.

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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).

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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 ActStart Printed Page 20691

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 SystemStart Printed Page 20692

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 Start Printed Page 20693employment, 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 (DOL.WIOA@dol.gov);
  • 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 Start Printed Page 20694Development 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 s eekers 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 § 677.175 (a) require State workforce, training, and education programs to use quarterly wage records to measure the progress of Start Printed Page 20695the 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 § 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 § 603.2(d)) under limited circumstances (defined under § 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 § 603.2 (definition of “public official”) and § 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 § 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 § 603.9, the requirements in § 603.10 governing agreements, or the requirements for payment of costs under § 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 §§ 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, § 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 § 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 § 603.5(e).

The proposed amendments to § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20696would 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 § 603.5 other than § 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 § 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 § 603.2(d)(2) for limited, specified WIOA purposes.

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 675.100 describes the purposes of title I of WIOA.

Proposed § 675.200 outlines the structure of the proposed WIOA regulations.

Proposed § 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 § 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 Start Printed Page 20697Department 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.”Start Printed 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 §§ 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 679.110(b)(3)(ii)(A) through (D) require that not less than 20 Start Printed Page 20699percent 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 § 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 § 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 § 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 § 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 § 679.110(d) requires the Governor to establish by-laws that help improve operations of the State Board. Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20700when appointing board members to represent multiple subcategories under (b)(3)(iii).

Proposed § 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 § 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 § 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 § 679.130 implements sec. 101(d) of WIOA and describes the role and functions of the State Board. Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20701provides 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 § 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 § 679.110.

Proposed § 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 § 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 § 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 § 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 § 679.160 implements sec. 101(h) and describes the board's authority to hire staff. Per proposed § 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 § 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 § 679.210 outlines the requirements for identifying a region.

Proposed § 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 § 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 § 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 § 679.240(a).

Proposed § 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 § 679.210(c)(1) because they and their contiguous areas of growth are a basic factor distinguishing economic development areas and planning regions.

Proposed § 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 Start Printed Page 20702strong 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 § 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 § 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 § 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 § 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 § 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 § 679.210(c)(8) indicates that the Secretary may suggest additional factors in future guidance.

Proposed § 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 § 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 § 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 § 679.230 describes the procedural requirements that the Governor must use for the designation or redesignation of a local workforce development area. Proposed § 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 § 679.240 provides the substantive requirements that Governor must use for the designation or redesignation of local workforce development areas.

Proposed § 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 § 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 § 679.240(a) or has been designated under § 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 § 679.250 describes the requirements for initial and subsequent designation of local areas that had been designated as local areas under WIA.

Proposed § 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 Start Printed Page 20703was 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 § 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 § 679.240.

Proposed § 679.250(b) clarifies that initial designation applies to PYs 2015 and 2016, as per WIOA sec. 106.

Proposed § 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 § 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 § 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 § 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 § 679.250(f) specifies that the requirements for subsequent designation do not apply to local areas that are designated or redesignated under § 679.240 or are single-area States designated under § 679.270.

Proposed § 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 § 679.260 defines the terms “performed successfully” and “sustained fiscal integrity” used in § 679.250. This section implements sec. 106(e) of WIOA.

Proposed § 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 § 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 § 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 § 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 § 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 § 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 §§ 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 § 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 § 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 § 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 Start Printed Page 20704certifying 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 679.310 defines the Local Workforce Development Board. Proposed § 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 § 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 § 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 § 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 § 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 Start Printed Page 20705same requirements found at 20 CFR 661.300(3).

Proposed § 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 § 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 § 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 § 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 § 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 § 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.

Proposed § 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 § 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 § 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 § 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 Start Printed Page 20706investment 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20707ensuring 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 § 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 §§ 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 § 662.600.

Section 679.380 How does the Local Board satisfy the consumer choice requirements for career services and training services?

Proposed § 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 § 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 § 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 § 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 § 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 Start Printed Page 20708assist 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20709barriers 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 § 679.500 describes the purpose of the regional and local plans. Proposed § 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 § 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 §§ 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 § 679.510 implements sec. 106(c) of WIOA and describes the State and local requirements for regional planning. Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 679.530 describes when a regional plan must be modified. Proposed § 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 § 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 § 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 Start Printed Page 20710cooperation with the Local Boards and CEOs in a planning region, per § 679.510(a). Each individual Local Board and CEO will respond to the local planning requirements at § 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 § 679.540(a), and any other appropriate requirements permitted by the Governor per § 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 § 679.540(a) requires regional plans to include the items identified in §§ 679.510 and 679.560, which implement secs. 106(c)(1) and 108(b) of WIOA.

Proposed § 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 § 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 § 679.550(a) implements sec. 108(a) of WIOA and describes the general requirements for the preparation and content of the local plan.

Proposed § 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 § 679.550(b)(5) requires the public comment process to be consistent with the `sunshine provisions' at WIOA sec. 107(e) and proposed § 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 § 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 § 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 § 661.290 and must not be conducted by each local area.

Proposed § 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 § 679.560(a).

Proposed § 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 § 679.560(b)(2) through (21) simply reiterate the statutory requirements without additional explanation.

Proposed § 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 § 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 § 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 § 679.560(b)(5) focuses on the delivery of services through the one-stop delivery system in the local area Start Printed Page 20711and 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 § 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 § 679.560(b)(6) through (11) focus on coordination activities for improving services and avoiding duplication. Proposed § 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 § 679.560(b)(12) and (13) are also new requirements under WIOA. Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 679.560(c) requires that the plan include any additional information required by the Governor.

Proposed § 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 § 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 § 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 § 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 § 679.570 describes the approval of the comprehensive 4-year local plan. Proposed § 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 § 679.570(b) outlines the processes, roles, and responsibilities for situations in which the State is a single local area. Proposed § 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 § 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 § 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 Start Printed Page 20712able 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 679.620(d)(4)(v), a more complete list of current priorities will be articulated in future guidance.

Proposed § 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 Start Printed Page 20713training 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 § 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 § 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 § 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 § 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 § 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 §§ 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 § 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 § 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 §§ 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 § 679.630 describes the conditions under which the Governor may submit a workforce flexibility (work-flex) plan.

Proposed § 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 § 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 § 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 § 679.630(a)(2)(i) and (ii). This proposed section retains the same requirements found at 20 CFR 661.430(a)(2).

Proposed § 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 § 679.630(a)(3)(i) through (iv).

Proposed § 679.630(b) explains what States are required to include in their workforce flexibility plan.

Proposed § 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 § 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 Start Printed Page 20714in the State plan. These criteria must be addressed in the waiver review process discussed at § 679.630(b)(1). This requirement ensures that all local waiver requests are evaluated consistently by the State.

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 679.640 explains the limitations that apply to the State's Workforce Flexibility Plan authority under WIOA.

Proposed § 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 § 679.630(a). This proposed section retains the same requirements found at 20 CFR 661.440(a)(1).

Proposed § 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 §§ 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 § 679.640(b) expands on § 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 Start Printed Page 20715and 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 § 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 § 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 § 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 § 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 § 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 § 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 § 680.110(c) maintains the requirement in WIA regulation § 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 § 680.600.

Section 680.130 What are the eligibility criteria for career services for dislocated workers in the adult and dislocated worker programs?

Proposed § 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 § 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, Start Printed Page 20716regulations and any guidance issued by the Secretary.

Proposed § 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 § 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 § 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 § 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 § 678.430(b). An individual employment plan is discussed in connection with proposed § 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 § 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 § 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 Start Printed Page 20717helping 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 § 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 § 680.180 explains that an individual employment plan is an individualized career service, as described in § 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 §§ 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 § 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 § 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 § 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 § 680.210(c) explains that WIOA training services must be provided when other sources of grant assistance are unavailable to the individual.

Proposed § 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 § 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 § 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 § 680.230 restates the requirements for coordination with other forms of assistance that apply under WIA. The Department has also added a sentence to § 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 § 680.230(a) states that when coordinating other grant assistance the one-stop operator or Start Printed Page 20718partner 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 § 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 § 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 § 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 § 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 § 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 § 683.510.

Proposed § 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 § 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.Start Printed Page 20719

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20720serve 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 § 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 § 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 § 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 § 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 §§ 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 § 680.470.

Section 680.420 What is a “program of training services”?

Proposed § 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 § 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 § 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 Start Printed Page 20721requirements 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 § 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 § 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 § 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 § 680.450. As discussed in § 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 § 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 § 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 § 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 § 680.470.

Proposed paragraph (c) explains the requirement that the Governor must consult with Local Boards and solicit Start Printed Page 20722public 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 § 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 § 680.460, the Governor may establish minimum performance levels in the initial eligibility procedures, and the Department encourages them to do so.

Proposed § 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 § 680.460 in order to remain eligible.

Section 680.460 What is the application procedure for continued eligibility?

Proposed § 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 § 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 § 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 § 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 § 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 Start Printed Page 20723comments 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 § 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 § 680.300. The use of ITAs and other WIOA title I-B funds toward apprenticeship training is further described in proposed § 680.330. Registered apprenticeship programs differ from other training providers in some respects, notably that a participant's enrollment occurs only Start Printed Page 20724through an agreement among the participant, the registered apprenticeship program sponsor, and an employer.

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20725with 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 § 677.230, which requires the coordinated dissemination of the performance reports with the ETPL and the information required to accompany the list.

Proposed § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20726secs. 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20727services available to participants eligible under both programs.

Section 680.630 How does a displaced homemaker qualify for services under title I?

Proposed § 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 § 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 § 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 § 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 § 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 § 680.660(b) clarifies that a separating service member meets the dislocated worker requirements concerning UC.

Proposed § 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 §§ 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 Start Printed Page 20728competitiveness. 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.

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 680.730(2) states that the size of the employer is a factor that must be considered; proposed § 680.730(3) states that the quality of employer-provided training and advancement opportunities is a factor that must be considered. Proposed § 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 § 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 § 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 Start Printed Page 20729may 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20730along 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20731higher 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.Start Printed 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 Start Printed Page 20733programs, 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 Start Printed Page 20734area 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 § 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 § 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.Start Printed 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 § 681.460. Pay-for-performance contracts are further described in § 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 Start Printed Page 20736make 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.Start Printed 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 Start Printed Page 20738program 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-Start Printed Page 20739aside 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 § 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 § 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 § 682.200(a) explains that rapid response activities are a required statewide employment and training activity, as described in § 682.310.

Proposed § 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 § 682.200(c) states that the information listed in § 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 § 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 § 682.220.

Proposed § 682.200(e) requires States to provide technical assistance to local areas in carrying out activities described in the State Plan.

Proposed § 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 § 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 § 682.200(i) requires the States to provide technical assistance to local areas that fail to meet their performance goals.

Proposed § 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 § 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 § 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 § 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 § 682.210(b) permits States to use WIOA funds to develop and implement innovative programs and Start Printed Page 20740strategies 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 § 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 § 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 § 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 § 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 § 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 § 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 § 682.210(i).

Proposed § 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 § 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 § 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 § 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 § 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 § 682.210(o) allows States to implement promising practices for workers and businesses as described in WIOA sec. 134(a)(3)(A).

Proposed § 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 § 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 § 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.Start Printed 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20742States 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 § 682.220(d)(2) requires States to encourage these partners to cooperate in data provision for the relevant Federal evaluations and research.

Proposed § 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 § 682.200(d).

Proposed § 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 § 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 § 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 Start Printed Page 20743value 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 § 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 § 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 § 682.310 is a new section that was split from § 665.300 under the current regulations. Its text follows the current regulation, § 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 § 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 § 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 § 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 § 682.330(a) describes layoff aversion as a required rapid response activity. Layoff aversion strategies and activities are described in proposed § 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 § 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 Start Printed Page 20744used in proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 682.330(j) establishes the requirement that such assistance be provided; proposed § 682.350 defines and describes what additional assistance entails.

Proposed § 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 § 682.340.

Section 682.340 May other activities be undertaken as part of rapid response?

Proposed § 682.340 identifies additional activities that may be undertaken as part of the rapid response program. Proposed § 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 § 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 § 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 § 682.330(i), the mechanisms by which such assistance may be provided are left to the discretion of the States.Start Printed 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 § 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 § 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 Start Printed Page 20746funding 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 § 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 § 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 § 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.Start Printed 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 § 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 § 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.

§ 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 § 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 Start Printed Page 20748should 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 § 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 § 683.205 delineates activities and functions associated with the cost of administration as well as cost limitations (discussed in proposed § 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 § 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.Start Printed 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 § 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 § 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 § 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 § 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.Start Printed 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 §§ 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 Start Printed Page 20751in 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 §§ 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 § 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 § 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 § 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 Start Printed Page 20752programs 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 § 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 § 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 § 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 Start Printed Page 20753against 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 § 683.440.

§ 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 § 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 § 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 § 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 § 683.430(b) states that audits from 2 CFR part 200 will be resolved through the Grant Officer resolution process described in proposed § 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 Start Printed Page 20754services. 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 § 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-Start Printed Page 20755Performance contract are the primary indicators of performance described in sec. 116(b)(2)(A) of WIOA and further defined in proposed § 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.Start Printed 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 § 683.500, the contract specifications in § 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 § 683.630(a). This section restates and implements the appeal requirements required by WIOA sec. 106(b)(5).Start Printed 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 § 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 § 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 § 683.840.

§ 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.Start Printed 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 § 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 § 684.100 describes the purpose of WIOA for the INA programs authorized by WIOA sec. 166.

Proposed § 684.100(a) retains the same requirements found in the WIA regulations at 20 CFR 684.100(a) except that § 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 § 684.100(b) describes the principle means of accomplishing the purpose described in § 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.Start Printed Page 20759

Section 684.110 How must Indian and Native American programs be administered?

Proposed § 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 § 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 § 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 § 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 § 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 § 684.130 provides definitions to terms used in proposed part 684 that have not been defined in secs. 3 or 166 of WIOA or § 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 § 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 § 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 Start Printed Page 20760make 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 § 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 § 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 § 684.200(c); § 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 § 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 § 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 § 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 § 668.200(a).

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 684.120, Start Printed Page 20761consultation 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, § 684.210(b) does not require prior approval of the entity with legal jurisdiction.

Proposed § 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 § 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 § 684.220(b) provides clarification on which applicants are required to submit a 4-year plan, as described at proposed § 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 § 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 §§ 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 684.310(a) describes what types of opportunities INA program grantees must attempt to develop and provide. This section incorporates the Start Printed Page 20762broad objectives referenced in sec. 194(1) of WIOA.

Proposed § 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 § 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 § 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 § 684.310 are available for up to 12 months because of the limited employment opportunities available to participants in the sec. 166 program.

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 684.320(c) with the language found at sec. 194(4) of WIOA, the phrase “including health benefits” has been included in § 684.320(c)(1), and § 684.320(c)(2) targets patterns of violation instead of single violations.

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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.Start Printed Page 20763

5. Subpart D—Supplemental Youth Services

Section 684.400 What is the purpose of the supplemental youth services program?

Proposed § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 (§ 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 § 684.460(b) describes the Secretary's role in the creation of additional performance measures to the ones listed in § 684.460(a). Section Start Printed Page 20764684.460 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 684.620(b) describes the Secretary's role in the creation of additional performance measures to the ones listed in § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20765does 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20766application 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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, § 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 § 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 § 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 § 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 § 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 Start Printed Page 20767must 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 § 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 § 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, § 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 § 684.940 describes the role of the Native American Employment and Training Council. The language in proposed § 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 § 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 § 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 § 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 §§ 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 § 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 § 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 § 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 Start Printed Page 20768WIOA 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 § 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 § 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 § 685.120 clarifies that the Department's ETA administers NFJP activities authorized under WIOA sec. 167 for eligible MSFWs, and as described in § 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 § 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 § 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 Start Printed Page 20769that 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 § 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 § 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 § 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 § 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 § 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 § 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 § 685.300 establishes the general responsibilities of grantees, including that: eligible entities receive grants through the FOA process described in § 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 § 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 § 678.420.

Section 685.310 What are the basic components of an National Farmworker Jobs Program service delivery strategy?

Proposed § 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 § 685.320 establishes that MSFWs as defined in § 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.Start Printed Page 20770

Section 685.330 How are services delivered to eligible migrant and seasonal farmworkers?

Proposed § 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 §§ 685.340 through 685.390.

Section 685.340 What career services must grantees provide to eligible migrant and seasonal farmworkers?

Proposed § 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 § 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 § 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 § 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 § 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 § 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 §§ 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 § 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 § 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 Start Printed Page 20771described in § 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 § 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 § 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 § 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 § 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 § 685.400(d), the Department may develop additional indicators of performance for housing grantees in addition to the indicators specified in proposed § 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 § 685.410 describes the planning documents that a grantee must submit, including a comprehensive program plan, further described in proposed § 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 § 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 § 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 § 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 § 685.560 and § 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 § 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 § 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 Start Printed Page 20772this 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 § 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 § 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 § 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 § 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 § 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 § 685.510 specifies that the requirements in subparts A through D of § 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 § 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 § 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 § 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 § 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 § 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 § 685.550 describes that eligible MSFW youth as defined in § 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 Start Printed Page 20773procedures 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 § 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 § 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 § 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 § 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 Start Printed Page 20774and 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 Start Printed Page 20775eligible 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 § 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 § 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 § 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 § 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 § 686.1000. A ce