employment and training administration 20 cfr part · pdf filefriday, august 11, 2000 part ii...

Friday,

August 11, 2000

Part II

Department of LaborEmployment and Training Administration

20 CFR Part 652 et al.Workforce Investment Act; Final Rules

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49294 Federal Register / Vol. 65, No. 156 / Friday, August 11, 2000 / Rules and Regulations

DEPARTMENT OF LABOR

Employment and TrainingAdministration

20 CFR Part 652 and Parts 660 through671

RIN 1205–AB20

Workforce Investment Act

AGENCY: Employment and TrainingAdministration (ETA), Labor.ACTION: Final rule.

SUMMARY: The Department of Labor(DOL) is issuing a Final Ruleimplementing provisions of titles I, IIIand V of the Workforce Investment Act.Through these regulations, theDepartment implements major reformsof the nation’s job training system andprovides guidance for statewide andlocal workforce investment systems thatincrease the employment, retention andearnings of participants, and increaseoccupational skill attainment byparticipants, and as a result, improvethe quality of the workforce, reducewelfare dependency, and enhance theproductivity and competitiveness of theNation. Key components of this reforminclude streamlining services through aOne-Stop service delivery system,empowering individuals throughinformation and access to trainingresources through Individual TrainingAccounts, providing universal access tocore services, increasing accountabilityfor results, ensuring a strong role forLocal Boards and the private sector inthe workforce investment system,facilitating State and local flexibility,and improving youth programs.DATES: This Final Rule will becomeeffective on September 11, 2000.ADDRESSES: All comments receivedduring the comment period followingthe publication of the Interim Final Rule(64 FR 18662, et seq., Apr. 15, 1999) areavailable for public inspection andcopying during normal business hoursat the Employment and TrainingAdministration, Office of CareerTransition Assistance, 200 ConstitutionAvenue, NW., Room S–4231,Washington, DC 20210. Copies of theFinal Rule are available in alternateformats of large print and electronic fileon computer disk, which may beobtained at the above-stated address.The Final Rule is also available on theWIA web site at http://usworkforce.org.FOR FURTHER INFORMATION CONTACT: Mr.Eric Johnson, Office of Career TransitionAssistance, U.S. Department of Labor,200 Constitution Avenue, NW., RoomS–4231, Washington, DC 20210,

Telephone: (202) 219–7831 (voice) (thisis not a toll-free number) or 1–800–326–2577 (TDD).SUPPLEMENTARY INFORMATION:

Paperwork Reduction ActThis Final Rule does not add any new

information collection requirements tothose of the Interim Final Rule. Certainsections of this Final Rule, such as§§ 667.300, 667.900, 668.800, and669.570 contain information collectionrequirements. These requirements havenot been changed. Under the PaperworkReduction Act of 1995 (44 U.S.C.3507(d)), the Department of Laborsubmitted a copy of these sections to theOffice of Management and Budget forreview. No comments were receivedabout and no changes have been madeto the information collectionrequirements.

We have prepared documentsproviding guidance on specificinformation collection requirements. Asrequired by the Paperwork ReductionAct of 1995 (44 U.S.C. 3507(d)), wesubmitted these documents to the Officeof Management and Budget (OMB) forits review. Affected parties do not haveto comply with the informationcollection requirements contained inthis document until we publish in theFederal Register the control numbersassigned by the Office of Managementand Budget. Publication of the controlnumbers notifies the public that OMBhas approved this informationcollection requirement under thePaperwork Reduction Act of 1995. Forfurther information contact: Ira Mills,Departmental Clearance Officer,Department of Labor, 200 ConstitutionAvenue, NW., Washington, DC 20210,(202) 219–5095, ext. 143.

I. Background

A. WIA Principles

On August 7, 1998, President Clintonsigned the Workforce Investment Act of1998 (WIA), comprehensive reformlegislation that supersedes the JobTraining Partnership Act (JTPA) andamends the Wagner-Peyser Act. WIAalso contains the Adult Education andFamily Literacy Act (title II) and theRehabilitation Act Amendments of 1998(title IV). Guidance or regulationsimplementing titles II and IV will beissued by the Department of Education.

WIA reforms Federal job trainingprograms and creates a new,comprehensive workforce investmentsystem. The reformed system isintended to be customer-focused, tohelp Americans access the tools theyneed to manage their careers throughinformation and high quality services,

and to help U.S. companies find skilledworkers. This new law embodies sevenkey principles. They are:

• Streamlining services through betterintegration at the street level in the One-Stop delivery system. Programs andproviders will co-locate, coordinate andintegrate activities and information, sothat the system as a whole is coherentand accessible for individuals andbusinesses alike.

• Empowering individuals in severalways. First, eligible adults are givenfinancial power to use IndividualTraining Accounts (ITA’s) at qualifiedinstitutions. These ITA’s supplementfinancial aid already available throughother sources, or, if no other financialaid is available, they may pay for all thecosts of training. Second, individualsare empowered with greater levels ofinformation and guidance, through asystem of consumer reports providingkey information on the performanceoutcomes of training and educationproviders. Third, individuals areempowered through the advice,guidance, and support available throughthe One-Stop system, and the activitiesof One-Stop partners.

• Universal access. Any individualwill have access to the One-Stop systemand to core employment-relatedservices. Information about jobvacancies, career options, studentfinancial aid, relevant employmenttrends, and instruction on how toconduct a job search, write a resume, orinterview with an employer is availableto any job seeker in the U.S., or anyonewho wants to advance his or her career.

• Increased accountability. The goalof the Act is to increase employment,retention, and earnings of participants,and in doing so, improve the quality ofthe workforce to sustain economicgrowth, enhance productivity andcompetitiveness, and reduce welfaredependency. Consistent with this goal,the Act identifies core indicators ofperformance that State and local entitiesmanaging the workforce investmentsystem must meet—or suffer sanctions.However, State and local entitiesexceeding the performance levels canreceive incentive funds. Trainingproviders and their programs also haveto demonstrate successful performanceto remain eligible to receive funds underthe Act. And participants, with theirITA’s, have the opportunity to maketraining choices based on programoutcomes. To survive in the market,training providers must makeaccountability for performance andcustomer satisfaction a top priority.

• Strong role for local workforceinvestment boards and the privatesector, with local, business-led boards


49295Federal Register / Vol. 65, No. 156 / Friday, August 11, 2000 / Rules and Regulations

acting as ‘‘boards of directors,’’ focusingon strategic planning, policydevelopment and oversight of the localworkforce investment system. Businessand labor have an immediate and directstake in the quality of the workforceinvestment system. Their activeinvolvement is critical to the provisionof essential data on what skills are indemand, what jobs are available, whatcareer fields are expanding, and theidentification and development ofprograms that best meet local employerneeds. Highly successful privateindustry councils under JTPA exhibitthese characteristics now. Under WIA,this will become the norm.

• State and local flexibility. Statesand localities have increased flexibility,with significant authority reserved forthe Governor and chief elected officials,to build on existing reforms in order toimplement innovative andcomprehensive workforce investmentsystems tailored to meet the particularneeds of local and regional labormarkets.

• Improved youth programs linkedmore closely to local labor market needsand community youth programs andservices, and with strong connectionsbetween academic and occupationallearning. Youth programs includeactivities that promote youthdevelopment and citizenship, such asleadership development throughvoluntary community serviceopportunities; adult mentoring andfollowup; and targeted opportunities foryouth living in high poverty areas.

Many States and local areas havealready taken great strides inimplementing these principles,supported by grants from theDepartment of Labor (DOL) to buildOne-Stop service delivery systems andschool-to-work transition systems. TheAct builds on these reforms and ensuresthat they will be available throughoutthe country.

We wish to emphasize that DOLconsiders the reforms embodied in theWorkforce Investment Act to be pivotal,and not ‘‘business as usual.’’ Thislegislation provides an unprecedentedopportunity for major reforms that canresult in a reinvigorated, integratedworkforce investment system. Statesand local communities, together withbusiness, labor, community-basedorganizations, educational institutions,and other partners, must seize thishistoric opportunity by thinkingexpansively as they design a customer-focused, comprehensive deliverysystem.

The success of the reformedworkforce investment system isdependent on the development of true

partnerships and honest collaboration atall levels and among all stakeholders.While the Workforce Investment Actand these regulations assign specificroles and responsibilities to specificentities, for the system to realize itspotential necessitates moving beyondcurrent categorical configurations andinstitutional interests. Also, it isimperative that input is received fromall stakeholders and the public at eachstage of the development of State andlocal workforce investment systems.

The cornerstone of the new workforceinvestment system is One-Stop servicedelivery which unifies numeroustraining, education and employmentprograms into a single, customer-friendly system in each community. Theunderlying notion of One-Stop is thecoordination of programs, services andgovernance structures so that thecustomer has access to a seamlesssystem of workforce investmentservices. We envision that a variety ofprograms could use common intake,case management and job developmentsystems in order to take full advantageof the One-Stops’ potential for efficiencyand effectiveness. A wide range ofservices from a variety of training andemployment programs will be availableto meet the needs of employers and jobseekers. The challenge in making One-Stop live up to its potential is to makesure that the State and Local Boards caneffectively coordinate and collaboratewith the network of other serviceagencies, including TANF agencies,transportation agencies and providers,metropolitan planning organizations,child care agencies, nonprofit andcommunity partners, and the broadrange of partners who work with youth.

B. Rule FormatThe format, as well as the substance,

of the Final Rule, reflects theAdministration’s commitment toregulatory reform and to writingregulations that are reader-friendly. Wehave attempted to make theseregulations clear and easy tounderstand, as well as to anticipateissues that may arise and to provideappropriate direction. To this end, theregulatory text is presented in a‘‘question and answer’’ format. We haveorganized the regulations in a way thatwill help those implementing the newsystem to recognize the various stepsthat must be taken to develop theorganization and services that make upthe workforce investment system. Inmany cases, the provisions of WIA arenot repeated in these regulations. Inresponse to comments, however, wedetermined that, in a number ofinstances, the regulations would

provide context and be more reader-friendly if the Act’s provisions wereincluded in an answer rather thanmerely cross-referencing the statute.

C. Prior ActionsSince the passage of the Workforce

Investment Act in August of 1998, wehave used a variety of means to initiateextensive coordination with otherFederal agencies that have roles andresponsibilities under WIA. In addition,the Department of Labor, theDepartment of Education, theDepartment of Health and HumanServices, the Department ofTransportation, and the Department ofHousing and Urban Developmentcontinue to meet on a regular basis toresolve issues surrounding WIAimplementation.

Before publishing the Interim FinalRule, we also requested and receivedinput from a broad range of sourcesabout how to structure guidance on howto comply with a number of WIAstatutory provisions. We solicited broadinput on WIA implementation througha variety of mechanisms: establishing aweb site to encourage input; publishinga Federal Register notice on September15, 1998; conducting regional andnational panel discussions in October1998; publishing a White Paperannouncing goals and principlesgoverning implementation; postingissues on the usworkforce.org web site;sharing a discussion draft of regulatoryissues with stakeholders; holding townhall meetings across the country inDecember 1998; conducting severalworkgroups in December 1998; issuingdraft Planning Guidance in December1998; and conducting a series of WIAImplementation Technical AssistanceConferences across the country inMarch and April of 1999.

On April 15, 1999, the Interim FinalRule was published in the FederalRegister, at 64 FR 18662 through 18764,and a 90-day comment periodcommenced. We continued to provideinformation by posting questions andanswers on the usworkforce.org website; publishing a series of consultationpapers in April, May and August of1999, on defining and measuringperformance, incentives and sanctions,customer satisfaction, and continuousimprovement; conducting a secondround of Town Hall meetings across thecountry in August of 1999; and hosting‘‘Voice of Experience’’ forums inFebruary and March of 2000 wherepractitioners shared insights andsuggestions for successfulimplementation of WIA. An InterimFinal Rule implementing section 188nondiscrimination and equal



opportunity provisions of WIA, codifiedin 29 CFR part 37, was publishedseparately in the Federal Register, at 64FR 61692 through 61738, Nov. 12, 1999.Comments received on those regulationswill be addressed in the preamble tothat Final Rule.

We reviewed every comment receivedduring the comment period followingpublication of the Interim Final Rule, aswell as the experience of earlyimplementing States, and suggestionsreceived from partners and stakeholderswhen considering whether the FinalRule should differ from the InterimFinal Rule. These comments arediscussed in the Summary andExplanation of the individual provisionsof the Final Rule. Section 506(c)(1) ofthe Act required the Secretary of Laborto issue this Final Rule implementingprovisions of the WIA under theDepartment’s purview by December 31,1999. While we were unable to meetthis deadline, we have endeavored toissue this Final Rule as expeditiously aspossible without compromising thequality of the document. UnderSecretary of Labor’s Order No. 4–75, theAssistant Secretary for Employment andTraining has been delegated theresponsibility to carry out WIA policies,programs, and activities for theSecretary of Labor. We have determinedthat this Final Rule, as promulgated,complies with the WIA statutorymandate to issue a Final Rule andprovides effective direction for theimplementation of WIA programs.

II. Summary and ExplanationThis section contains our response to

comments received on the Interim FinalRule during the comment period. Thecomments are discussed at considerablelength in order to make clear ourinterpretation of WIA through thesefinal regulations and of their applicationto some of the challenges that may arisein implementing the Act.

We have set regulations only wherethey are necessary to clarify or toexplain how we intend to interpret theWIA statute, to provide context forinterpretations or to provide a clearstatement of the Act’s requirements. Inseveral instances—for example, theIndian and Native American Programs,and Migrant and Seasonal FarmworkerPrograms—the regulations weredeveloped in consultation with advisorycouncils and are more comprehensive inorder to assist those grantees. Consistentwith the Act, the Final Rule providesthe States and local governments withthe primary responsibility to initiateand develop program implementationprocedures and policy guidanceregarding WIA administration.

There are a limited number of changesin the Final Rule because of ourcommitment to allowing maximumflexibility at the State and local level.Section 661.120 formalizes thisflexibility in the regulations. A numberof comments suggested that we specifycertain groups of providers andparticipants and types of activities innumerous sections of the regulations.Among others, these commentssuggested revising the regulations to:add new definitions, and additionalState and local planning requirements;require States and locals to consult withspecific organizations in order to fulfillthe public comment processrequirements; and identify certain typesof programs, providers or participants,such as service learning opportunities,and nontraditional employment andtraining opportunities for women anddislocated homemakers, in matterswhere States and localities havediscretion to define terms and makeother discretionary decisions. Toprovide policy-making flexibility toStates and local areas and to avoidsuggesting that any one group or activityis more important than those nothighlighted in the regulations, we havegenerally not made those changes.However, we do believe thatconsultation with and inclusion of thesegroups is important to obtaining theoptimal functioning of the cooperativesystem envisioned by WIA. We fullyexpect that States and local areas willconsult broadly before adopting plansand policies; and that their workforceinvestment systems will be structured toinclude all providers and programs thatmay help meet the needs of theirpopulations, and equitably serve allpopulation segments within theirservice areas.

In addition to the changes made basedupon the comments received, in order toclarify policy and interpretation andimprove upon the Rule’s reader-friendlyformat, we have also made technicalchanges to correct typographical errors,such as consistent capitalization,abbreviations, grammatical correctionsand citations, and for consistency withthe regulations implementing thenondiscrimination and equalopportunity provisions of WIA section188, which were first published in theFederal Register on November 12, 1999(64 FR 61692 through 61738, 29 CFRpart 37).

When publishing a Final Rulefollowing a comment period, it iscustomary to publish only changesmade to the rule, however, in order tobe more user-friendly, we are publishingthe entire Rule, including those partsthat have not been changed, for WIA

titles I and V. This means that onedocument which contains all of theregulations and commentary may beconsulted rather than needing tocompare various documents. Similarly,the new Wagner-Peyser regulations atpart 652 subpart C are republished infull.

Description of Regulatory Provisions

Part 660—Introduction to theRegulations for the WorkforceInvestment Systems Under Title I of theWorkforce Investment Act

Part 660 discusses the purpose of titleI of the Workforce Investment Act andexplains the format of the regulationsgoverning title I.

A few commenters suggested we addthe attainment of self-sufficiency to thedescription of the purpose of title I in§ 660.100.

Response: While we agree that theattainment of self-sufficiency is animportant goal of workforce investmentsystems under title I of the Act, we havenot added that phrase to the regulationsince the current language tracks section106 of the Act.

Part 660 also provides definitionswhich are not found in the Act, as wellas some of the statutory definitions wefelt should be added for emphasis orclarification. Sections 101, 142, 166(b),167(h) 301 and 502 of the Act containadditional definitions. We receivedseveral comments on the definitionscontained in § 660.300. One commentersuggested that we add ‘‘youth’’ to thedefinition of ‘‘employment and trainingactivity’’.

Response: The three terms,‘‘workforce investment activity,’’‘‘employment and training activity,’’and ‘‘youth activity,’’ are defined insection 101 of WIA. We have not added‘‘youth’’ to the definition of‘‘employment and training activity’’since employment and trainingactivities are a separate subset ofworkforce investment activities undertitle I, Chapter 5 of the Act. Workforceinvestment activities are the array ofactivities permitted under title I of WIA,which include employment and trainingactivities for adults and dislocatedworkers, and youth activities.

A commenter requested that wedefine the term ‘‘labor federation’’ asused in relation to nominationrequirements for labor representatives tothe State and Local Boards, stating ‘‘[i]tis our understanding that [this term] isintended to include AFL-CIO StateFederations, State Building andConstruction Trades Councils, AFL-CIOCentral Labor Councils, and Local



Building and Construction TradeCouncils.’’

Response: We have added a definitionof the term ‘‘labor federation’’, similar tothat used in JTPA, which will includethese groups within that term.

We received several comments on thedefinition of ‘‘literacy’’. One commentersuggested that the definition of‘‘literacy’’ be expanded to mean theability to read, write and speak inEnglish or an individual’s nativelanguage, if that is not English.

Response: In order to promoteconsistency among Federal Programs,title I, section 101(19) of WIA defines‘‘literacy’’ by stating that it is the samedefinition used in title II, section203(12) of the Act. Section 660.300 ofthe regulations restates this definitionfor the convenience of the reader.Literacy is defined as the ‘‘ability toread, write, and speak in English,compute and solve problems, at thelevels of proficiency necessary tofunction on the job, in the family of theindividual and in society.’’ No changehas been made to this statutorydefinition.

Another commenter suggested thatthe term ‘‘literacy’’ be amended toinclude computer literacy since it is animportant and necessary workplaceskill.

Response: We agree that computerliteracy is a key skill, however, as statedabove, no changes have been made tothe definition of ‘‘literacy’’ since it is astatutory definition found in section203(12) of title II of WIA.

Among the regulatory definitions, wehave defined the term ‘‘register’’ inorder to clarify that programs do notneed to register participants until theyreceive a core service beyond those thatare self-service or informational. Thispoint in time also corresponds to thepoint when the participants are countedfor performance measurement purposes.A few commenters suggested that theterm ‘‘register’’ be redefined to requireall adults and dislocated workers whoreceive services, including those whoonly receive self-service orinformational services, to be registeredin order to track universal participationin the workforce investment system.

Response: The process of registrationis designed to signal when an individualis counted against the core measures ofperformance title I programs. Since theAct exempts informational and self-service activities from the coremeasures, we are not requiringindividuals who only receive thoseservices to be registered. However,States and local areas are authorized tocollect information beyond what isrequired at the Federal level. In March

2000, we issued Training andEmployment Letter (TEGL) 7–99 whichprovides additional guidance on thepoint of registration. This guidance canbe found on the Internet atwww.usworkforce.org. Additionaldiscussion of this issue is contained inpart 663 and part 664 of theseregulations. Part 666 provides newguidelines on when a service isdetermined to be self-service orinformational. Finally, whileparticipants may not need to beregistered until they receive coreservices for performance measurementpurposes, recipients must collect equalopportunity data regarding anyindividual who has submitted personalinformation in response to a request bythe recipient for such information. See29 CFR 37.4 (definitions of ‘‘applicant’’and ‘‘registrant’’), and § 37.37(b)(2).

Another commenter suggested thatthe term ‘‘register’’ be more clearlydefined, and requested a description ofthe differences between registration,enrollment and participation.

Response: While we have not changedthe definition of ‘‘register,’’ additionalguidance on the registration process andits connection to the performanceaccountability system can be found inTEGL 7–99, as well as part 663 and part664 of these regulations. In general,‘‘enrollment’’ is not a term that is beingused in the WIA title I performancesystem. An individual who registers forservices is determined eligible and iscounted against the core indicators ofperformance. This registered individualis considered a participant whilereceiving services (except followupservices) funded under subtitle B ofWIA title I.

This commenter also suggested thatwe clarify that information oncitizenship and selective service statusbe collected at the time of registration.

Response: In addition to any otherstatutory or regulatory requirements,under WIA section 188(a)(5)—‘‘Prohibition on Discrimination AgainstCertain Non-Citizens’’—participation inprograms or activities, or receivingfinancial assistance under WIA title I,must be available to citizens andnationals of the United States, lawfullyadmitted permanent resident aliens,refugees, asylees, and parolees and otherimmigrants authorized to work in theUnited States. Compliance with thenon-discrimination provisions of WIA isaddressed in the Interim FinalRegulations promulgated by theDepartment’s Civil Rights Center at 29CFR part 37 (64 FR 61692, November12, 1999). A discussion of theseprovisions can be found in the preamble

discussion of 29 CFR 37.37(b)(2), at 64FR 61705.

Section 189 of WIA provides that theMilitary Selective Service Act (50 U.S.C.App. 453) must be complied with toreceive any assistance or benefit undertitle I. In order to allow the greatestpossible flexibility in the provision ofservices, we will not dictate specificways to comply with thisstraightforward requirement.

Several commenters suggested addingdefinitions of ‘‘contract’’ and‘‘commercial organization’’ or ‘‘for-profit entity’’ and modifying thedefinitions of ‘‘grant,’’ ‘‘subrecipient,’’and ‘‘vendor’’ to ensure consistencywith the Federal Grant and CooperativeAgreement Act, (31 U.S.C. 6301), and toreduce confusion about what awards aresubject to the uniform procurementrequirements at 29 CFR 95.40 through95.48 and 29 CFR 97.36, and whatawards are not subject to theserequirements.

Response: We have decided not toadd definitions of ‘‘contract,’’‘‘commercial organization’’ or ‘‘for-profit entity’’, because these terms aredefined or discussed in theDepartment’s rules on uniformadministrative requirements at 29 CFRparts 95 and 97 (the ‘‘Common Rules’’),as well as in the Department’s rules onaudit requirements for grantees in 29CFR parts 96 and 99, all of which areincorporated by reference at 20 CFR667.200. We are modifying thedefinitions of ‘‘subrecipient’’ and‘‘vendor’’ to cross-reference thediscussion in the DOL auditrequirements, at 29 CFR 99.210, whichcontrasts the differences betweensubrecipients and vendors. Since thedefinition of ‘‘grant’’ in § 660.300, isalready quite specific as to the types oforganizations which may be awardedgrants, we consider changes to this termto be unnecessary. We also aremodifying the definition of ‘‘recipient’’to indicate that the term refers to theentire legal entity receiving the award,not just the particular componentwithin that entity which is designatedin the award document. Themodification is consistent with thedefinition of ‘‘recipient’’ in the JTPAregulations at 20 CFR 626.5 and thedefinition of ‘‘grantee’’ in the CommonRule at 29 CFR 97.3. Also, we arereiterating the Common Rule’sdefinition of the term ‘‘subgrant’’ for theconvenience of the reader.

Another commenter suggesteddefining the term ‘‘obligation’’ so thatIndividual Training Account (ITA)commitments could be treated asobligations for purposes of thereallotment and reallocation procedures



of 20 CFR §§ 667.150 and 667.160, eventhough they might not meet thestandards of obligation used byparticular State or local governments.

Response: Section 667.150 of theregulations provides for recapture by theSecretary of unobligated balances fromStates with unobligated balances whichexceed 20 percent of the amountallotted in the previous program year,after adjustment for amounts reservedby a State for administration andamounts transferred by the Statebetween youth and adult funds.Reallotment is then made to Stateswhich have obligated at least 80 percentof the amounts allotted in the previousprogram year, after adjustment fortransfers and amounts reserved foradministration. Section 667.160 coversthe recapture and reallocation ofamounts within the State using the samefactors used in the Secretary’sreallotment process.

We have added a definition of‘‘obligation’’ to § 660.300 which, for thepurpose of reallotments under 20 CFR667.150, specifically excludes: (1)Amounts allocated to a single local areaState or to a balance of State local areaadministered by a unit of the Stategovernment; and (2) inter-agencytransfers and other actions treated bythe State as encumbrances againstamounts reserved by the State underWIA sections 128(a) and 133(a) forStatewide workforce investmentactivities. These exclusions were also ineffect under JTPA. The purpose of theseexclusions is to treat similar financialtransactions the same way in all States,even where a State only recognizes afinancial transaction as a legallyenforceable ‘‘obligation’’ if it involvesan arms-length award to another partyor if performance has already occurred.We also are adding the definition of‘‘unobligated balance,’’ which appearsat 29 CFR 97.3, for the convenience ofthe reader.

With respect to the commentregarding defining commitments underITA’s as obligations, we are not awareof any unique characteristics of ITA’swhich necessitate expanding thedefinition of ‘‘obligation’’ provided in§ 660.300 of these regulations.Commitments under ITA’s should betreated the same way as similarcommitments of the recipient’s orsubrecipient’s non-WIA funds, whetheras obligations or otherwise.

Other commenters suggested weinclude a definition of the term‘‘individual with a disability’’ toencourage One-Stop center staff to havea knowledge and sensitivity to the needsof such individuals.

Response: Since the provision ofquality services to individuals withdisabilities is a key facet of the One-Stop service delivery system, we haveadded the WIA title I, section 101(17)definition of the term ‘‘individual witha disability’’ to § 660.300.

One commenter was concerned thatthe definition of ‘‘veteran’’ contained insection 101(49) of the Act was too broadand raised uncertainty as to whichveterans were to be served under title Iof WIA. The commenter suggested thatwe replace the definition in the InterimFinal Regulations with the definition of‘‘veteran’’ contained in title 38 of theU.S. Code since it provides morespecificity and consistency betweenprograms.

Response: Since the definition of‘‘veteran’’ appears in title I of WIA, weare not making any change in the FinalRegulation. We encourage States andlocal areas to take these definitions intoaccount as they undertake theirresponsibility to assure that the deliveryof services under WIA title I programsand activities authorized under thechapter 41 of U.S.C. title 38 partnerprogram are coordinated through theOne-Stop service delivery system.

One commenter suggested that weadd definitions of a sectoralemployment intervention strategy andthe self-sufficiency standard. A sectoralemployment intervention strategy is anapproach to community economicdevelopment that connects members oflow-income communities toemployment opportunities, self-sufficiency wages and/or advancementopportunities by both redirectingtraining resources and education, andfacilitating direct linkages to employersin targeted regional industries. The self-sufficiency standard defines theminimum amount of cash resourcesneeded for a family to meet its basicneeds and be self-sufficient.

Response: While we encourage Stateand Local Boards to develop linkagesbetween their workforce and economicdevelopment systems, we do not thinkit is appropriate to highlight onestrategy for achieving such linkages. Asfor a definition of self-sufficiency, 20CFR 663.230 requires State or LocalBoards to set the criteria for determiningwhether employment leads to self-sufficiency. At a minimum, such criteriamust provide that self-sufficiency meansemployment that pays at least the lowerliving standard income level, defined inWIA section 101(24). No changes arebeing made to the regulations.

Part 661—Statewide and LocalGovernance of the WorkforceInvestment System Under Title I of theWorkforce Investment Act

IntroductionThis part covers the critical

underpinnings of how the WorkforceInvestment system is organized underWIA at the State and Local levels.Specifically, it consists of foursubparts—General GovernanceProvisions, State GovernanceProvisions, Local GovernanceProvisions and Waiver Provisions. TheGeneral Governance subpart broadlydescribes the WIA system and describesthe roles of the governmental partners.The State and Local Governancesubparts cover the State and LocalWorkforce Investment Boards and thedesignation process, includingalternative entities, and the planningrequirements. The waiver subpartdiscusses the processes for obtaininggeneral and work-flex waivers.

Subpart A—General GovernanceProvisions

Subpart A describes the WorkforceInvestment system, and sets forth theroles of the government partners in thesystem: the Federal government, Stategovernments and Local governments.

Section 661.120 provides authority toState and Local governments toestablish their own policies,interpretations, guidelines anddefinitions relating to programoperations under title I, as long as theyare not inconsistent with WIA, theseregulations, and Federal statutes andregulations governing One-Stop partnerprograms. The reference to Federalstatutes and regulations governing One-Stop partner programs has been addedto § 661.120 (a) and (b) as a reminderthat State and local administration ofthe One-Stop system must be consistentwith the requirements of the Federallaw applicable to the partner’s program.In the case of local governments suchpolicies, interpretation, guidelines anddefinitions may not be inconsistent withState policies. This section has alsobeen revised to correct an inconsistencybetween terms used in the question andanswer. The question refers to ‘‘Localand State governmental partners’’ whilethe answer refers to Local and StateBoards. We do not intend to exclude theGovernors and local elective officialsfrom the authority to develop State andlocal policies relating to WIA title I,provided those policies are consistentwith the Act, regulations and, whereappropriate, other State policies.Therefore, paragraphs (a) and (b) arerevised to replace the phrases ‘‘Local



Boards’’ and ‘‘State Boards’’ with ‘‘Localareas’’ and ‘‘States’’ respectively so thatthey will not appear to be inconsistentwith the terms used in the question.

To assist with the State and localinterpretations authorized under§ 661.120, we have issued technicalassistance guidance, with theparticipation of other Federal agencies,as appropriate, to help States andlocalities interpret WIA and theregulations. This guidance is notintended to limit State flexibility, butrather is intended to provide helpfulmodels on which States and Localgovernments can rely to ensure thattheir own interpretations are notinconsistent with the Act andregulations. In our role as Federalpartner we will continue to providetechnical assistance to States andlocalities, in collaboration with otherFederal agencies as appropriate,however we remain committed to theprinciples in the statute which allowand encourage flexibility.

A commenter suggested that thestandard against which State and localpolicies, interpretations, etc. aremeasured under § 661.120 should bewhether they are ‘‘consistent’’ with WIAand the regulations rather than ‘‘notinconsistent.’’ The commenter suggeststhat the current language may send aninappropriate message about the need toconform to statutory and regulatoryrequirements and may lead to differinginterpretations of some provisions.

Response: We don’t agree that thisprovision should be changed. Theworkforce investment system is apartnership between State, local andFederal stakeholders. One of WIA’s keyprinciples is that States and localitieshave increased authority to implementinnovative workforce investmentstrategies to best serve the needs of thelabor market. While we take veryseriously our responsibility to ensurethat State and local policies,interpretations, guidelines anddefinitions do not violate the provisionsof the statute and these regulations,where differing interpretations arelegally possible we believe that Statesand localities should have the flexibilityto implement systems that they feel arebest suited to their particular needs. Thecurrent regulation best serves thisflexibility, because it does not implythat there is only one ‘‘consistent’’interpretation available. Therefore, wehave not changed the regulation.

Several commenters expresseddiffering views regarding the relativeroles of State and local partners in theOne-Stop system. Some commentersrequested that we expressly state thatStates and localities are equal partners

in the One-Stop system, while othersrequested that we clarify that Stateshave clear authority to promulgateinterpretations and other guidance toState and local agencies.

Response: In our view, neither ofthese positions is absolutely correct.The success of the workforce investmentsystem depends on a commitment,particularly among the governmentalentities and the One-Stop partners, tocollaborate and form real partnerships.On many matters, the State has theauthority to set Statewide policiesapplicable to local areas. However, WIAalso gives certain responsibilities andauthority to local areas. Closecoordination among State and localgovernment partners is essential to thesuccess of the system. The flexibility ofthe WIA system offers a uniqueopportunity for leadership from both theState and local level to workcooperatively with one another toaddress the specific workforce needs ofeach community and benefit the State asa whole. We do not think it would beproductive to enumerate where eachentity has authority, but trust that inestablishing the workforce investmentsystem Governors and chief executiveofficers will take their roles andresponsibilities seriously and worktogether to create a system that besthelps their community aid those inneed.

According to one commenter, theremay be confusion resulting from thelanguage in WIA section 117(d)(3)(B)(i)that holds chief elected officials liable,as grant recipient, for misuse of localformula funds (unless the Governoragrees to undertake such liability). Thecommenter reported that some localareas were worried that this liabilitywould be interpreted as the personalliability of the elected official.

Response: While we have not changedthe regulations, we wish to clearly stateour interpretation of this provision. Weinterpret this provision as holding thechief elected officials (and the Governor,when appropriate) liable in their officialcapacity and not holding thempersonally liable for misuse of WIAfunds.

Subpart B—State Governance Provisions1. State Workforce Investment Board:

Sections 661.200–661.210 describe themembership requirements andresponsibilities of the State WorkforceInvestment Board (State Board) andprocedures for designating analternative entity to perform thefunctions of the State Board. Section661.200(a) requires that the State Boardbe established by the Governor. Ofcourse, the Governor must select the

members of the State Board in anondiscriminatory fashion, inaccordance with the requirements of 29CFR part 37. A correction is made toparagraph 661.200(i), to correct a cross-reference to provisions in part 662identifying One-Stop partners.

WIA and these regulations providesignificant flexibility to States and localareas to develop policies,interpretations, guidelines anddefinitions relating to programoperations under WIA title I. Severalcommenters requested that we requirethat State and local boards includesignificant policies and interpretationsin the State and local plans or consultwith specified parties when developingthese policies and interpretations. Wedo not believe we can mandate thesesuggestions, but encourage State andlocal boards to include in the plans anysignificant policies and interpretationsetc., that are not already required to beincluded. Moreover, under §§ 661.200(j)and 661.305(d), the development ofsignificant policies, interpretations,guidelines and definitions, as an activityof the boards must be done in an openmanner. To emphasize this requirement,we have moved these requirements tonew §§ 661.207 and 661.307, and havespecified that the development ofsignificant policies, interpretations,guidelines and definitions must beconducted in an open manner. Weconsider policies and interpretationsetc,. relating to eligibility requirementsand self-sufficiency standards to be thetype of significant policies andinterpretations etc., that must bedeveloped in an open manner.

One commenter recommended thatwe require that any newly establishedState Board review and/or ratify anypolicies implemented by the entityacting as the Board during the State’stransition to WIA.

Response: We find this to be a helpfulsuggestion, but do not believe it isappropriate to impose it as a mandatoryrequirement on States. We believe thatan effective State Board willperiodically review State policies aspart of its oversight role. It seemsnatural that a newly established Boardmight find the need to reconsider someof the policies implemented by itspredecessor. In that case, § 661.230(a)provides the State Board with theauthority to submit a modification to theState plan.

The greatest number of comments onpart 661 related to State and LocalBoard membership requirements. Manyof the comments on State Boards areequally applicable to Local Boards. Wehave consolidated our discussion ofState and Local Board membership



requirements in the followingparagraphs.

We received a large number ofcomments about the requirement, at§§ 661.200(b) and 661.315(a), that atleast two or more members of the Stateand Local Boards be selected torepresent the membership categories setforth at WIA sections 111(b)(1)(C) (iii)–(v) and 117(b)(2)(A) (ii)–(v), and that theLocal Board contain at least one memberrepresenting each One-Stop partner. Thecomments reflect a tension between theneed to provide States and Local areaswith the flexibility needed to keep theseBoards at a manageable size, with theneed for specificity as to what level ofparticipation is guaranteed tostakeholders in the WorkforceInvestment system. Many commentersfelt that the two or more memberrequirement led to large, unwieldy-sizedBoards and requested that thisrequirement be eliminated. Othercommenters sought clarification of thenumber of members of each partner onthe Local Board. Many commentersrequested clarification about whether anindividual seated on the State or LocalBoard could represent more than oneentity or institution, particularly whenmultiple grantees of a One-Stop partnerprogram are located in a local area.

Many commenters requested morespecificity as to which entities areentitled to a seat on the Boards. Forexample, many commenters felt that thelanguage in the preamble to the InterimFinal Rule did not go far enough inrecommending that States considerappointing representatives from boththe designated State unit under section101(a)(2)(B) of the Rehabilitation Actand from the State agency for the blindto represent programs that providevocational rehabilitation services. Thesecommenters recommended that weamend the regulations to change thisrecommendation into a requirement thatStates appoint representatives from bothof these organizations. Others soughtspecific appointment of membersrepresenting community-basedorganizations (CBO’s), mental healthagencies, disabled youth and disabledyouth service providers, disabled adults,literacy providers, non-laborconstruction workers, and other groups.

Response: In our view, no individual(other than the Governor) or group isentitled to a ‘‘seat’’ on a State or LocalWorkforce Investment Board. However,certain specified groups, including One-Stop partner programs, are entitled to a‘‘voice’’ on the Boards through arepresentative.

A partner program may feel that itshould have the right to choose who sitson a State or Local Board as its

representative. The regulations cannotprovide this power to the partners,because WIA gives the authority toselect State or Local Board members tothe Governor or chief elected official(CEO), respectively. However, theGovernor’s and CEO’s discretion toselect individuals to serve asrepresentatives of partner programs andother entities on State and Local Boardsmust be exercised in a manner that isconsistent with the requirements setforth in WIA and these regulations. ForOne-Stop partner programs, theindividual selected as the Local Boardrepresentative may or may not be thespecific individual that each fundedentity would prefer, but that individualmust be an individual with ‘‘optimumpolicy-making authority’’ within anentity that receives funds or carries outactivities under the partner program.

We recognize that the representationissue is a legitimate and seriousconcern. It is exacerbated by equallylegitimate concerns over Board size,especially at the local level. Weencourage as broad a representation aspossible on all WIA Boards, especiallyrepresentation of those entitiesidentified as required partners in theAct. We expect that local workforceinvestment areas will follow theregulations and that States will ensurethat all required partner programs haveappropriate and effective representationon Local Boards. We encourage localparties to resolve issues ofrepresentation to their mutualsatisfaction, in accordance with the Actand regulations. We view this generallyas a matter of local implementation. Webelieve that consultation betweenGovernors or CEO’s and partnerprograms, and other organizationsentitled to representation on the Boards,in the selection of Board representativeswill help to develop positiverelationships leading to more effectivedelivery of services, and we encouragesuch consultations. The finalregulations attempt to facilitate thisprocess by providing Local areas withflexibility for finding the right mix ofrepresentatives on the Local Board,while ensuring that the Board is aneffective policy-making body byprotecting the rights of all participantsin the system and by stressing therequirement that members beindividuals with optimum policy-making authority.

To this end, we have made severalchanges to the interim final rule.However, we did not change therequirement that each Board containtwo or more members representing thegroups specified in WIA sections111(b)(1)(C) (iii)–(v) and 117(b)(2)(A)

(ii)–(v). As indicated in the preamble tothe Interim Final Rule, we areconstrained by statutory language tofollow this requirement. Onecommenter suggested that the provisionat 1 U.S.C. 1 may provide justificationfor a more flexible interpretation of themembership requirement. While thisprovision provides the general rule thatstatutory reference to plurals includesthe singular, we think that, in thisinstance, the context of WIA section 111and 117, indicates that the term‘‘representatives’’ was intended to meantwo or more. The requirement that theLocal Board contain at least one memberrepresenting each local One-Stoppartner program is consistent with thisinterpretation. As is does for the othermembership classes specified at WIAsection 117(b)(2)(A) (ii) through (v), theLocal Board must contain two ormembers representing the class of One-Stop partner programs identified atsection 117(b)(2)(A)(vi). Because eachOne-Stop system will include manypartners, the requirement that the classis represented by two or more memberswill neccesarily be met by one memberrepresenting each partner program.Consequently, we have not changed thisrequirement.

We have made several changes toclarify what is meant by representationon the State and Local WorkforceInvestment Boards. We have madechanges to accommodate the concernsof those commenters who askedwhether an individual seated on theBoard could represent more than oneentity or institution. While such‘‘multiple entity’’ representation maynot be appropriate in all cases, webelieve that there may be instanceswhen such representation may be aneffective tool for reducing Board sizewhile still ensuring that all partiesentitled to representation receiveeffective representation. Therefore, wehave added new paragraphs to§§ 661.200 and 661.315 to permit itwhen appropriate. For example, wherethe same State agency has authority forseveral One-Stop partner programs,such as a State employment securityagency which oversees the employmentservice and unemployment insuranceservice, the head of the agency (or otherofficial with optimum policy-makingauthority) may be appointed to the StateBoard to represent both of theseprograms. On the other hand, such‘‘multiple entity’’ representation willnot be appropriate where the individualso appointed does not have authority tomake policy for all of the programs thats/he purportedly represents. Forexample, appointing a local business



person, who is a member of a veterans’organization, as representative of the 41U.S.C. chapter 38 veterans’ program andof local business and/or the localveterans’ organization, will not satisfythe Local Board membershiprequirements if the individual does notpossess optimum policy-makingauthority within the 41 U.S.C. chapter38 program and within the veterans’organization and within the business.Similarly, if the State vocationalrehabilitation agency (including thevocational rehabilitation agency for theBlind) is primarily concerned with therehabilitation of individuals withdisabilities under section 101(a)(2)(B)(i)of the Rehabilitation Act, then the headof that agency must represent thevocational rehabilitation program on theState Board. An individual from anyother State agency would not be anappropriate representative of thevocational rehabilitation program.

We have added a new § 661.203, inwhich we have defined the terms‘‘optimum policy-making authority’’and ‘‘expertise relating to [a] program,service or activity’’ in order to assistStates and Local areas in determiningwhen such representation isappropriate. A representative with‘‘optimum policy making authority’’ isan individual who can reasonably beexpected to speak affirmatively onbehalf of the entity he or she representsand to commit that entity to a chosencourse of action. In the case of a One-Stop partner program, an individualwho does not have ‘‘optimum policy-making authority’’ within an entity thatreceives funds or carries out activitiesunder the partner program cannot serveas that program’s representative on theLocal Board. A representative with‘‘expertise relating to [a] program,service or activity’’ includes a personwho is an official with a One-Stoppartner program and a person withdocumented expertise relating to theOne-Stop partner program.

Finally, we have added new § 661.317to clarify representation when there areseveral Local grantees or operatingentities of a partner program in a One-Stop system. In such a case, the LocalBoard membership requirements may bemet by the appointment of one memberto represent all of the Local partnerprogram entities. Also, § 661.317permits the chief elected official tosolicit nominations from One-Stoppartner program entities to facilitate theselection of such representatives.Soliciting nominations from partnerprogram entities may be useful to chiefelected officials in identifying theindividual who will be able to representthe program most effectively in the work

of the Local Board. Of course, the chiefelected official can opt to appoint morethan one member to represent thisprogram, if he or she so chooses and theselection criteria permit it.

To implement the policy described inthe joint letter, dated March 24, 2000,from the Assistant Secretary of Labor forEmployment and Training, the AssistantSecretary of Education for SpecialEducation and Rehabilitative Services,and the Commissioner of theRehabilitative Services Administrationregarding Vocational Rehabilitation (VR)representation on State Boards, we haveadded a new paragraph (3) to§ 661.200(i). Under this provision, if thedirector of the designated State unit, asdefined in section 7(8)(B) of theRehabilitation Act, does not representthe State Vocational RehabilitationServices program (VR program) on theState Board, then the State mustdescribe in its State Plan how themembers of the State Board representingthe VR program will effectivelyrepresent the interests, needs, andpriorities of the VR program and howthe employment needs of individualswith disabilities in the State will beaddressed.

Other comments on the State andLocal Board membership requirementsquestioned the different descriptionsrelating to the creation of State andLocal Boards, the different processes forselecting the chairpersons of the Boards,and suggested that we mandate that thebusiness majority requirement apply toany subcommittees of Boards.

Response: Section 661.200(a)describes the State Board as being‘‘established’’ by the Governor, while§ 661.300(a) describes the Local Boardas being ‘‘appointed’’ by the CEO. Thesedescriptions are intended to simplyreflect the terms used in the statute andare not meant to imply an inferior orsuperior relationship. Section661.200(g) provides that the Governormust select a State Board chairpersonfrom the business representatives on theBoard, while § 661.320 provides that theLocal Board members elect achairperson from the businessrepresentatives. Because these differentprocesses are specified in WIA sections111(c) and 117(b)(5), we have notchanged the rule. With regard to thebusiness majority requirement, we agreewith the commenter that a strong rolefor business representatives is anessential ingredient for successfulBoards, but we do not think it isappropriate that the regulations shoulddictate the internal structure and day-to-day workings of the Boards. Within theframework required by the statute andregulations, States and localities have

the flexibility to design Boards that bestserve their needs.

A commenter suggested that we addsanctions provisions to make clear thatthe Governor can refuse to appoint tothe State Board a representative ofpartners which have not cooperated ingood faith with the One-stop system atthe local level.

Response: As the commenter pointedout, § 661.310 addresses this very issueat the local level. Under this section,one of the sanctions for a partner failingto engage in good faith negotiations overthe terms of the local MOU is a loss ofrepresentation on the Local Board. Weexpect that this provision, will besufficient incentive for Local Boards andOne-stop partners to engage in goodfaith negotiation. If experience does notbear this out, we will consider issuingadditional guidance in the future.

A commenter requested that wedefine the term ‘‘labor federation’’ asused in the nomination requirements forlabor representatives to the State andLocal Boards, stating ‘‘[i]t is ourunderstanding that [this term] isintended to include AFL–CIO StateFederations, State Building andConstruction Trades Councils, AFL–CIOCentral Labor Councils, and LocalBuilding and Construction TradeCouncils.’’

Response: We have added to 20 CFR660.300 a definition of the term ‘‘laborfederation’’, similar to that used inJTPA, which will include groups suchas those suggested within that term.

2. Alternative Entities: Because manyof the comments relating to alternativeentities are applicable at both the Stateand local levels, we have consolidatedour discussion of this issue here. Onecommenter expressed the view that therequirement in §§ 661.210(c) and661.330(b)(2), that the State and localplans must describe how the Boardswill ensure an ongoing role for anyrequired membership groups notrepresented on an alternative entity, isnot supported by WIA.

Response: We find that the ongoingrole requirement is a reasonableinterpretation of WIA requirementsrelating to Board membership andresponsibility. It is clear from the statutethat Congress intended that certainspecified groups have a strongleadership role in the State and localworkforce investment systems, asexpressed by the representationrequirements. The regulatoryrequirement that Boards provide anongoing role for any of those statutorilyidentified entities which are notrepresented on the alternative entity isconsistent with this intent. Theregulation does not specify the scope of



a group’s ongoing role, but ratherpermits States and localities todetermine it as part of the publicplanning process. Therefore, we havemaintained this requirement. However,as described below, we have madechanges to this regulation to provideguidance as to how the ongoing rolerequirement may be met.

There were several commentsregarding the provision in §§ 661.210(d)and 661.330(c) about changes in themembership structure of an alternativeentity serving as the State WorkforceInvestment Board or as a LocalWorkforce Investment Board. Twocommenters thought that the rule wasoverly restrictive about permittingchanges to alternative entities andsuggested that we revise the InterimFinal Rule to permit incrementalchanges to these entities so that at leastsome of the representational groupsrequired by the WIA Board membershiprequirements could be added to existingentities, or that we permit incrementalchanges that increase the efficiency andeffectiveness of the workforceinvestment system. A commenter notedthat in single workforce investmentareas states, where the State Board isacting as the Local Board under WIAsection 117(c)(4), the use of an existingstate board under the alternative entityprovisions may exclude even morepartners from participation on the boardat the local level.

Response: We are sympathetic tothese concerns, but believe thatpermitting incremental changes to theboards will, in fact, act as a disincentiveto the creation of Workforce InvestmentBoards that include all requiredrepresentatives, by permitting inclusionof some groups while still excludingother groups. By requiring theestablishment of a new WIA-compliantBoard whenever the membershipstructure of an alternative entity issignificantly changed, other excludedgroups will be able ‘‘to ride thecoattails’’ of the newly added group.Therefore, because we remaincommitted to the goal of encouragingfully compliant Workforce InvestmentBoards in each State and localworkforce investment area, therequirement that a new WIA-compliantBoard must be created when themembership structure of an alternativeentity is significantly changed has notbeen changed. However, we have addedlanguage to clarify the type of situationin which the membership structure ofan alternative entity is considered tohave been significantly changed.Specifically, a significant change in themembership structure is considered tohave occurred when members are added

to represent groups not previouslyrepresented on the entity. A significantchange in the membership structure isnot considered to have occurred whenadditional members are added to anexisting membership category, whennon-voting members (including a YouthCouncil) are added, or when a memberis added to fill a vacancy created in anexisting membership category. A changeto the charter is not itself grounds fordisqualification of an alternative entity.The relevant question is whether theorganization or membership structurehas been changed. However, wecontinue to consider the need for achange to the charter as a good indicatorof a significant change in themembership structure, and haveclarified that this is true regardless ofwhether the required change has beenmade.

Other commenters identified the needfor additional guidance as to whatmeasures an alternative entity must taketo ensure an ongoing role in the State orLocal Workforce Investment system forany of the WIA-specified membershipgroups who are not represented on thealternative entity. As discussed below inrelation to the Migrant and SeasonalFarmworker (MSFW) program,commenters have sometimes found thatit is difficult to ensure full and activeparticipation in a One-Stop systemwhen a partner or other membershipgroup is not represented on analternative entity.

Response: To address this problem,we have added language to § 661.210(c)and have added a new paragraph661.330(b)(3) to identify ways in whichto ensure such an ongoing role. Forexample, the Boards could provide forregularly scheduled consultations, mayprovide an opportunity for input intothe State or local plan or other policydevelopment, or may establish anadvisory committee of unrepresentedgroups. We also require that thealternative entity engage in good-faithnegotiation over the terms of the MOU,with all omitted partner programs. Wehave made a change to more clearlyidentify those groups which arespecified for representation on State andlocal boards under WIA but are notrepresented on the alternative entity as‘‘unrepresented membership groups’’.This replaces the somewhat ambiguousterm ‘‘such groups’’ used in the InterimFinal Rule.

3. State Workforce Investment PlanRequirements: Section 661.220describes the requirements forsubmission of the State WorkforceInvestment Plan and the process forreview and approval of that plan. Acommenter pointed out that the

reference to Wagner-Peyser Act StatePlan modifications in § 661.230(c) wasinaccurate. We have edited§ 661.230(c)(2) to reference 20 CFR652.212. Under her authority to providefor an orderly transition from JTPA toWIA, the Secretary permitted States tosubmit a transition plan during programyear 1999 to allow the provision of WIAservices with funds appropriated forJTPA services. Such a plan would beapproved for program year 1999, butwould not be considered an approvedfive-year Workforce Investment Plan. Toreflect this practice, a new paragraph(e)(3) is added to § 661.220 is added toclarify that a plan that is incomplete ordoes not contain sufficient informationto determine whether it is fullycompliant with the statutory andregulatory requirements of WIA and theWagner-Peyser Act is considered to beinconsistent with these requirements forplan approval purposes.

A commenter requested that theprovision of § 661.230(e)(2) describingthe plan approval process be revised tomore clearly indicate that the portion ofthe plan describing Wagner-Peyser Actactivities, requirements and delivery ofservices is an integral part of the planand not a separate plan.

Response: We agree and have madethe suggested change.

Some commenters remarked that theyfound that the State Plan requirementsfocused on process and compliancerather than on strategic planning issues.

Response: We believe that the StatePlan guidelines seeks the informationneeded to support broad strategicplanning objectives while ensuringcompliance with the statutoryrequirements. We acknowledge that it isdifficult to balance these two goals.Based upon our experience with earlyimplementing States, we hope to amendthe planning guidelines to streamlinethem, but remain committed torequiring that States submit theinformation we need to assess whetherthe plan complies with the statute andregulations.

We received several comments on theneed for specific public commentperiods for State Plans, consistent withLocal Plan requirements. Others felt thatmodifications as well as planningdocuments should be subject a publiccomment period.

Response: We intend that theinformation contained in the State Planbe subject to the broadest possiblestakeholder involvement in policydevelopment and the broadest possiblerange of public comment. The InterimFinal Rule, at § 661.230(d) alreadyrequires that plan modificationsundergo the same public review and



comment as the State plan. TheWorkforce Investment Act Stateplanning guidelines set forth theinformation needed for the Secretary tomake an informed judgment aboutwhether a State Plan is consistent withWIA, and the plan review processrequires evidence of a public commentperiod. We have clearly stated the needfor an open and inclusive planningprocess at both the State and local levelsand we expect the States to establish theappropriate time lines and procedures.Consequently, no change in the rule isbeing made at this time, although wewill carefully review State plans forcompliance with the WIA publiccomment requirements.

Commenters suggested that we change§ 661.220(d) to require that Statessubmit to us all oral and writtencomments made during the publiccomment process, including commentsmade on drafts, and responses to thosecomments, that we review the responsesas part of our plan review process, andthat we specify that failure to activelyconsult with local areas is grounds forplan disapproval. Other commenterssuggested that we mandate a 30-dayreview period as part of the State planpublic comment process.

Response: Based upon our review ofplans submitted by early implementingStates, we have found that requiringsubmission of comments on State plansdoes not significantly help the planreview process. Given the short timeperiod for plan review and approval, weare unable to provide any meaningfulreview to comments submitted with theplan. We do not think it is necessary toimpose a mandatory public commentperiod on the States. We expect thatStates will undertake a good faith effortto develop State plans through ameaningful public process. We believethat our review of the State plan’sdescription of the process will enable usto ensure that the State planning processcomplies with this requirement. Afailure to develop the plan through thepublic comment and consultationprocess described in the regulationscould be grounds for plan disapprovalunder the existing standards. No changehas been made to the regulation.

Section 661.240 contains provisionsrelating to unified plans, submittedunder the authority of WIA section 501.On January 14, 2000, the Department, inpartnership with the Departments ofAgriculture, Education, Health andHuman Services, and Housing andUrban Development, and with theassistance of the Office of Managementand Budget, issued joint unifiedplanning guidance entitled StateUnified Plan, Planning Guidance for

State Unified Plans Submitted UnderSection 501 of the Workforce InvestmentAct of 1998. This document waspublished in the Federal Register at 65FR 2464 (Jan. 14, 2000). We haverevised § 631.240(b) to add a newparagraph (2), that specifically providesthat States may submit unified plansthat contain the information required inthe unified planning guidance in lieu ofthe individual planning guidelines ofthe programs covered by the unifiedplan.

One commenter remarked that theunified planning guidelines were toonarrowly focused to lead to effectiveunified planning. Other comments on§ 661.240 requested that we holdunified plans to the same public reviewand comment requirements as requiredof standalone WIA State plans, that weexplain how to resolve differentplanning timetables for programsincluded in the unified plan, and thatwe provide incentives to encourageStates to submit unified plans.

Response: We believe that the unifiedplanning guidance is an important firststep towards collaborative planning andeffective coordination of federalprograms. Currently, it is the onlyplanning approach that streamlinesexisting non-statutory planningrequirements. We believe thesestreamlined planning requirements offeran incentive encouraging States toundertake unified planning. While itmay not go as far as some would like,we believe that, as the Federal partnerswork with the States to acquire moreexperience with unified planning, wewill be able to develop alternativeapproaches that could offer even greaterflexibility and burden reduction.

With regard to the substantivecomments on § 661.240, WIA section501(c)(1) provides that the portion of theunified plan covering a particularprogram or activity is still subject to theapplicable planning requirements of thestatute that authorizes the program.Therefore, for unified plans containingthe State WIA/Wagner-Peyser Act plan,the WIA plan review and publiccomment requirements, at § 661.220(d)still apply. Similarly, while the WIA/Wagner-Peyser Act portion of theunified plan is submitted on a five-yearplanning cycle, the inclusion of a planon a different planning cycle does notchange the plan for that program to afive-year plan. We believe that the timesaved through joint planning is itself astrong incentive towards engaging inunified planning. Joint planning alsobenefits States by leading to animproved use of State and Federalresources, increased coordination at thelocal level, and burden reduction

through elimination of duplicateplanning processes. These and otherbenefits of unified planning arediscussed in the unified planningguidance at 65 FR 2464, 2468.

4. Local Workforce Investment AreaDesignation Requirements: Sections661.250 through 661.280 discuss therequirements applicable to thedesignation of local workforceinvestment areas (local areas). Section661.250 sets forth the process fordesignating local areas. Commentersnoted that this section did not refer tothe provision, at WIA section 116(b),that permits Governors of States whichwere single service delivery area Statesunder JTPA, as of July 1, 1998, todesignate the State as a single localworkforce investment area.

Response: We interpret section 116(b)as limiting single local area designationsto only those States which weredesignated as a single service deliveryarea State under JTPA, as of July 1,1998. Section 661.250 is revised to byadding a new paragraph (d) tospecifically authorize Governors ofStates which were single servicedelivery area States under JTPA, as ofJuly 1, 1998, to designate the State as asingle local workforce investment area.

A commenter noted that theapplicability of the automatic local areadesignation provisions for units ofgeneral local government of 500,000 ormore may depend upon the populationstatistics used in making designations.An area may or may not be found tomeet this threshold population leveldepending on whether 1990 Census dataor more up-to-date estimates are used.The commenter suggested specifyingcertain data, or specifically delegatingthe authority to determine which data touse to the Governor.

Response: While we do not believe itis appropriate that we specify the sourceof the data to be used in the regulations,we agree with the suggestion to specifythat the Governor has the authority todetermine which population data to usewhen making designationdeterminations. Section 661.260 isamended to make this clear.

A commenter noted that § 661.280(c)provides that, on appeal of a denial ofa request for designation, the Secretarycan require that an area be designatedsolely upon her finding that the areawas not afforded the procedural rightsguaranteed by the statute. Thecommenter suggested that, in thatinstance, a finding that the area meetsthe requirements for designation shouldalso be required before the State can beordered to designate the area.

Response: We think that § 661.280(c)accurately restates the provisions of



WIA section 116(a)(5) that the Secretarymay require designation upon a findingof either a denial of procedural rights ora finding that the area meets therequirements for designation. No changehas been made to the regulation.

Section 661.290 describes the State’sauthority to require regional planningby Local Boards. Paragraph (d) of thissection provides that regional planningmay not substitute for or replace localplanning unless the Governor and allthe affected CEO’s agree to thesubstitution or replacement. Acommenter opined that WIA does notgive the Department the authority toundermine the State’s authority torequire regional planning in this way.

Response: We do not agree that thisregulation impermissibly underminesthe State’s authority. Section 661.290(a)is consistent with WIA section 116 byproviding the State with authority torequire Local Boards to participate in aregional planning process. Theagreement of the local areas is notrequired for this. Requiring local areaagreement before regional planning canreplace local planning may reduce theability of the State to unilaterallyimpose effective regional planning,since the regional planning may overlapor duplicate local planning. However,we believe that this provision fairlybalances the rights of States andlocalities. In our view, the most effectiveregional planning will occur when allparties in the region are committed tocooperating with one another.

Subpart C—Local GovernanceProvisions

This subpart covers the designation ofLocal Workforce Investment areas andthe responsibilities and membershiprequirements of Local Boards. Becausemany issues relating to Local Boardsand alternative entities are equallyapplicable at the State and local level,comments on these issues are discussedabove, under subpart B.

1. Responsibilities of Chief ElectedOfficials: Section 300(a) requires chiefelected officials to appoint the LocalBoard in accordance with State criteriaestablished under WIA section 117(b).Appointments to the Local Board mustbe made in a nondiscriminatory fashion,in accordance with the requirements of29 CFR part 37. A few commentersfound the provision in § 661.300,authorizing the Local Board and thechief elected official(s) in a local area toenter into an agreement that describesthe respective roles and responsibilitiesof the parties to be confusing in light ofthe statement in 20 CFR 667.705regarding liability of funds in local areas

comprised of more than one unit ofgeneral local government.

Response: Under 20 CFR 667.705,when a local area is comprised of morethan one unit of general localgovernment, the liability of theindividual jurisdictions for fundsprovided to the local area must bespecified in a written agreementbetween the chief elected officials. Thisis a mandatory provision. Theagreement authorized in § 661.300(c)regarding a description of general rolesand responsibilities is optional. Chiefelected officials are not required to enterinto such an agreement, but theagreement may be a useful tool forspecifying the division of duties amongthe chief elected officials in the localarea. No change has been made to theregulations.

A few commenters asked forclarification as to what extent a chiefelected official(s) may delegate theirresponsibilities under title I of WIA.

Response: In general, the chief electedofficial(s) is authorized to delegate theirauthority under title I of WIA to otherentities such as the Local Board or alocal governmental agency. In multiplejurisdiction local areas, the chief electedofficials may delegate certain roles aspart of the agreement authorized in§ 661.300(c), as discussed above. Forexample, WIA section 117(d)(3)(B)(i)(II)specifically authorizes the chief electedofficial(s) to designate an entity to serveas a local fiscal agent in order to assistin the administration of grant funds atthe local level. Similarly, the chiefelected official(s) may designate anentity to carry out their otherresponsibilities. Under § 661.300(c), thechief elected official(s) may enter intoan agreement with the Local Board thatdescribes the respective roles andresponsibilities of the parties. However,the chief elected official(s) remainsliable for funds received under title I ofWIA unless they reach an agreementwith the Governor to bear such liability.This is the only situation in which thechief elected official(s) is not liable forfunds.

Some commenters requested aclarification of the role of the chiefelected official as a One-Stop partner.

Response: This issue is addressed inthe preamble to 20 CFR part 662.

2. Local Boards as Service Providers:Section 117(f)(1) of WIA placeslimitations on Local Boards’ directprovision of core services, intensiveservices, or training services. Theselimitations and waivers of the limitationon providing training services are setforth in § 661.310. Commenters notedthat § 661.310(b) permits a waiver of the

prohibition on providing trainingservices to be renewed only once.

Response: This limitation wasinadvertent. We have revised thisparagraph to indicate that a waiver maybe renewed more than once, althoughno waiver may be for more than one-year at a time.

A commenter opined that theprovision in § 661.310(c) that extendedthe service delivery restrictions of theLocal Board to the staff of the Board isnot supported by WIA.

Response: We don’t agree that thisprovision is inconsistent with WIA. Thelimitation on the Local Board’sauthority to be a service provider in§ 661.310(c) is meant to ensure that theLocal Board serves as the ‘‘board ofdirectors’’ for the local area. This freesthe Board from the day-to-dayfunctioning of the local workforcesystem and allows the Local Board tofocus on strategic planning, policydevelopment and oversight of thesystem. To permit the staff of the LocalBoard to provide direct services onbehalf of the Board would underminethis principle.

However, we read the service deliverylimitations in WIA section 117 asapplying to the Local Board as an entityand not to the members of the Board asindividuals. Therefore, members of theLocal Board may not provide services intheir capacity as a member of the Board.However, if an individual member ofthe Board is also an employee of aservice provider, then as an employee ofthat service provider entity s/he mayprovide services on behalf of that entity.Of course, this must be consistent withfederal, state and local conflict ofinterest requirements. The same rulesapply to the staff of the Local Board.Members of the Local Board’s staff mayalso be employees of the entityadministering the local area’s WIAgrant. We acknowledge that many localareas use staff from inter-relatedagencies to provide support to the LocalBoard as well as the administrativeentity for the grant recipient. Whenthese roles are clearly defined, the factthat an individual works for both theLocal Board and the entityadministering the WIA grant does notpreclude the entity from providingservices.

3. Youth Council: Sections 661.330and 661.335 describe the membershiprequirements and responsibilities of theYouth Council. Commenters suggestedthat we amend this section to requirethat representatives of vocationalrehabilitation agencies and memberswith experience in nontraditionaltraining employment for women beselected for the Youth Council.



Response: We have not made thesuggested change, because we do notbelieve it is appropriate to specifycertain groups for Youth Councilmembership beyond those provided bystatute. However, we agree that theviewpoint of these groups could servethe Youth Council well. We encouragechief elected officials to considerappointing such representatives underthe existing Youth Council membershipcategories.

One commenter suggested changes to§ 661.335(b)(4) which lists ‘‘parents ofeligible youth seeking assistance undersubtitle B of title I of WIA’’ as requiredmembers of the youth council. Thecommenter expressed a fear that it willbe difficult to find parents ofparticipants and former participantswho will be likely to make a positivecontribution to the youth council. Thecommenter asked whether a local areawill be penalized if it is unable to findparents and participants to serve on theyouth council and suggests changing§ 661.335(b)(4) to read ‘‘parents, thatmay include those of eligible youthseeking assistance. . . .’’

Response: We recognize thecommenter’s concern, however, theregulation restates the language of WIAsection 117 (h)(iv) and (v). Therefore,these membership categories have beenstatutorily mandated by Congress. Wedo not interpret the statutory standardto limit youth council membership toparents of youth participants. Section117(h)(iv) of the Act requires the youthcouncil to include members who are:‘‘parents of eligible youth seekingassistance under this subtitle.’’ Thisstatutory phrase is somewhat confusing,since it could be read as requiringparents of eligible youth seekingassistance rather than parents ofparticipants who are receivingassistance. We interpret this language tomean that the representatives for thismembership category must come fromfamilies who currently experience thebarriers described in WIA section101(13)(A) and (B), and in §§ 664.200 or664.220, or who have faced thosebarriers in the past. This interpretationallows those families who havesuccessfully overcome their barrers toeducation and employment to have avoice on the youth council. We believethat it is important that youth councilsinclude the views of parents, especiallythe views of parents of youthparticipating in WIA youth programs.We feel it is important that therepresentatives for this membershipcategory possess a first-handunderstanding of the needs and barriersfacing eligible youth and stronglyencourage chief elected officials to seek

out parents of WIA youth participants.Just as the Individual Training Accountsystem in the adult and dislocatedworker programs empowers thecustomer to take an active role in thetraining process, these membershipcategories empower the families mostaffected by youth services to take anactive role in designing and improvingthe system. This interpretation, ofcourse, does not prohibit theappointment of other parents in thecommunity under WIA section117(h)(2)(B), which authorizes theappointment of ‘‘other individuals asthe chairperson of the Local Board, incooperation with the chief electedofficial, determines to be appropriate.’’

Similarly, this commenter alsorequested a change to § 661.335(b)(5),which lists ‘‘Individuals, includingformer participants, and members whorepresent organizations that haveexperience relating to youth activities’’as required members of the youthcouncil. The suggestion would have§ 661.335(b)(5) state ‘‘individuals, thatmay include former participants, andmembers who . . .’’ We have not madethe commenter’s change because theregulation already uses the phrase‘‘individuals, including formerparticipants . . . .’’

4. Local Workforce Investment Plan:Sections 661.345 through 661.355describe requirements relating to thesubmission and modification of localworkforce investment plans.

A commenter disagreed with theprovision, in § 661.345(c), that theSecretary performs the roles of theGovernor in reviewing the local plandeveloped in a single local workforceinvestment area State, particularlyregarding the review of the MOU’s. Thecommenter compared this process withthe process in other States where theGovernor reviews locally developedMOU’s submitted as part of the localplan. The commenter emphasized thatdevelopment and review MOU’s shouldremain as close as possible to the locallevel.

Response: We agree that successfulimplementation of the One-Stop systemin a single local workforce investmentarea State requires strong localinvolvement. MOU’s should bedeveloped at the local level. Section661.350(c)(3) facilitates localinvolvement by ensuring that the localchief elected officials in those Statesretain their roles in the system.However, we believe that anindependent review of local plans isnecessary. In a single workforceinvestment area State, where, inessence, the State itself is the local area,we believe it is appropriate that the

Secretary undertake the role ofproviding independent review of thelocal plan for the State. Since theMOU’s are required to be included inthe local plan, the Secretary’s reviewwill include review of the MOU’s. Nochange has been made to the regulation.

With regard to the required local plancontents of § 661.350, severalcommenters suggested that weencourage States to require additionalitems, such as a comprehensiveassessment of activities in the local area,a description of services available todisplaced homemakers, disadvantagedindividuals and to other groups, adescription of nontraditional trainingand employment activities, a local planfor the provision of supportive services,and to use a ‘‘sectoral approach’’ to linkthe needs of employers with the skillsof workers.

Response: The authority to requireadditional items in local plans, beyondthe requirements specified in § 661.350,lies with the Governor. We encourageGovernors to consider the suggesteditems when establishing thoserequirements.

A commenter requested that we addlanguage to § 661.350(a)(3)(ii) toauthorize the submission with the planof a status report on MOU’s when someMOU’s are still in negotiation. Thecommenter stated that it appears that itwill take some time to negotiate all thenecessary MOU’s and asks that werecognize this and permit the planprocess to move forward.

Response: We recognize that thecommenter may have a valid point. Ourexperience with early implementingStates has shown that the negotiation ofMOU’s can be an involved process.However, because the MOU’s are theprimary means for coordinating theservices of the One-Stop partners, theyare the foundation of the entireworkforce investment system. TheMOU’s address issues with the partnerssuch as which services each partner willprovide through the One-Stop system,how the costs of the system will beallocated among the partners, howcustomers will be referred by the One-Stop operator to the appropriate partner,among others. Because the resolution ofthese issues forms the building blocks ofthe One-Stop system, we are notprepared to change the regulation at thistime. We strongly encourage States andlocalities to take the necessary steps toensure that the negotiation of theseimportant documents will be done in atimely manner. However, in recognitionof the fact that some local areas mayneed additional time to develop a fullyapprovable local plan, we have added anew § 661.350(d), authorizing Governors



to approve local plans on a transitionalbasis during program year 2000.Governors may use this authority to givetransitional approval to local areas thathave not finalized their MOU’s or otherelements of their plan. Such aconditional approval is considered to bea written determination that the localplan is not approved, but will allowimplementation of WIA reforms as theyfinalize the transition from JTPA toWIA. This authority is similar to, andderives from, the Department of Labor’sauthority under WIA sec. 506(d), toapprove incomplete State plans on atransitional basis.

There were a few comments about therequirements for local planmodifications at § 661.355. Onecommenter suggested that we drop, asunnecessary, the requirement in§ 661.355 that the Governor establishprocedures for modification of localplans.

Response: While the commenter maybe correct that Governors already knowtheir responsibilities so this regulationis not needed, we believe that there isvalue in clearly specifying theresponsibility to establish theseprocedures so that it is not inadvertentlyoverlooked.

A commenter suggested that weamend the illustrative list of thecircumstances when a local planmodification may be required by theGovernor, at § 661.355, to includechanges to the membership structure ofthe Local Board among thosecircumstances.

Response: The regulation as writtenalready includes this factor. Theconditions under which a State planmodification is required, in§ 661.230(b), also include changes to themembership structure of the StateBoard.

Another commenter asked, regardingone of the existing circumstances inwhich a local plan modification may berequired—at what point is a ‘‘change inthe financing available to support WIAtitle I and partner-provided WIAservices’’ significant enough to warranta modification?

Response: When developing the localplan modification procedure under§ 661.355, this is one of the questionsthe Governor should consider. Theanswer is likely to be different fordifferent states and possibly for differentareas. We do not think it is appropriateto restrict the Governors’ authority bysetting a federal standard.

Subpart D—General Waivers and Work-Flex Waivers

Subpart D indicates the elements ofWIA and the Wagner-Peyser Act that

may and may not be waived undereither the general waiver authority ofWIA section 189(i) or the work-flexprovision at WIA section 192. Inresponse to comments, we have made atechnical correction in § 661.420,changing paragraph (g) to (f).

We received several comments aboutthe exceptions to the Secretary’s waiverauthority, described at § 661.410, andwork-flex waiver authority, described at§ 661.430. Commenters requested thatthe regulation be amended to specifythat the Secretary will not approvewaivers of title I of the RehabilitationAct, nor of the State merit staffingrequirements of the Wagner-Peyser Act,and deleting the Older Americans Actfrom work-flex waiver authority.

Response: Regarding theRehabilitation Act, the regulations makeclear that the Secretary’s authority toapprove waiver requests is limited torequests for waiver of certain provisionsof WIA and the Wagner-Peyser Act. Wecannot waive provisions of otherstatutes. While we are not making thesuggested change, we wish to makeclear that the Department does notintend, nor do we have authority toentertain or grant waivers of title I of theRehabilitation Act. Similarly, anexception for the Wagner-Peyser ActState merit staffing requirement is notnecessary. Our authority to waiveWagner-Peyser Act provisions is limitedto requirements under sections 8through 10 of that Act. The requirementthat Wagner-Peyser Act services beprovided by State merit staff employeesderives from sections 3 and 5(b)(1) ofthe Wagner-Peyser Act. Accordingly, wedo not intend to, nor do we haveauthority to entertain or grant waivers ofthe Wagner-Peyser Act merit staffingrequirement. Finally, we have retainedthe authority for Governors to approvewaivers of certain provisions of theOlder Americans Act, because WIAsection 192(a)(3) specifically providesthat authority.

Other commenters suggested that wedefine the existing exceptionprohibiting waivers of provisionsrelating to worker rights, participationand protections to prohibit waivers ofprovisions relating to labor nominationsand appointments to State and LocalBoards, opportunities for comment onState and local plans, and thecertification process for eligible trainingproviders. The commenters alsorequested that States be required toestablish a public comment process, thatincludes comment from organized labor,on proposed waivers and a work-flexplan; and asked that we conductperiodic evaluation of the impact ofwaivers and work-flex activities.

Response: We have not added thesuggested definition of the workerrights, participation and protectionexceptions. First, we do not agree thatthe suggested provisions fall within thescope of the worker rights, participationand protection exceptions. Secondly, wedo not think it is appropriate to definethe scope of these provisions byregulation and believe it will be moreeffective to deal with waiver requests asthey occur. On the other hand, webelieve that requests for waivers of theprovisions suggested by the commenterswill likely fall within other exceptionsto waiver authority. Section661.410(a)(9) excludes waivers ofrequirements relating to procedures forreview and approval of plans, whichwould exclude a waiver of the publiccomment requirements for State andlocal plans. Provisions related to theestablishment and function of LocalBoards may not be waived. This willprohibit waivers of the nomination andappointment requirements for LocalBoards. The eligible training providerrequirements seem to fall within the keyprinciples of empowering individualsand increasing accountability identifiedat § 661.400(b)(2) and (4). Provisionsrelating to the key principles may not bewaived under Work-flex authority, andwill only be waived by the Secretary inextremely unusual circumstances whenthe provision can be demonstrated to beimpeding reform.

We agree with the commenters’suggestion regarding the publiccomment process for waiver plans andwork-flex plans. Section 661.430(e)already requires that the State work-flexplan undergo a public comment process,similar to that of the State five-yearplan. While WIA section 189(i) does notspecifically require that a stand-alonewaiver plan go through a similar process(a waiver plan included within the Statefive-year plan would undergo publicreview along with the rest of that plan),the requirement for Local Boardcomment on the waiver plan at WIAsection 189(i)(4)(B)(v) and the sunshineprovisions for State and Local Boardactivities at WIA sections 111(g) and117(e) indicate clear Congressionalintent that major decisions involving theworkforce investment system be madein a public and open manner. In ourview, the decision to request a waiver ofstatutory or regulatory requirements issuch a major decision. Accordingly, wehave revised § 661.420(a)(5), to require adescription of the process used toensure meaningful public comment,including comment by business andorganized labor, on the State waiverplan. Finally, we agree on the need for



evaluation of the waiver process.Although, we have not yet madespecific plans for such a review, weintend to do so in the future.

Part 662—Description of the One-StopSystem Under Title I of the WorkforceInvestment Act

Introduction

The establishment of a One-Stopdelivery system for workforcedevelopment services is a cornerstone ofthe reforms contained in title I of WIA.This delivery system streamlines accessto numerous workforce investment andeducational, and other human resourceservices, activities and programs. TheAct’s requirements build on reformefforts that are well established in allStates through the Department’s One-Stop grant initiative. Rather thanrequiring individuals and employers toseek workforce developmentinformation and services at severaldifferent locations, which is oftencostly, discouraging and confusing, WIArequires States and communities tointegrate multiple workforcedevelopment programs and resourcesfor individuals at the ‘‘street level’’through a user friendly One-Stopdelivery system. This system willsimplify and expand access to servicesfor job seekers and employers.

The Act specifies nineteen requiredOne-Stop partners and an additionalfive optional partners to coordinateactivities and streamline access to arange of employment and trainingservices. WIA requires coordinationamong all Department of Labor fundedprograms as well as other workforceinvestment programs administered bythe Departments of Education, Healthand Human Services, and Housing andUrban Development. WIA alsoencourages participation in the One-Stop delivery system by other relevantprograms, such as those administered bythe Departments of Agriculture, Healthand Human Services, andTransportation, as well as theCorporation for National andCommunity Service. In addition, localareas are authorized to add additionalpartners as local needs may require. Allof the Federal Agencies will continue towork together to ensure effectivecommunication and collaboration at theFederal level in support of One-Stopservice delivery.

Subpart A—One-Stop Delivery System

1. Structure: Subpart A describes thestructure of a One-Stop delivery system.Section 662.100, describes the One-Stopsystem as a seamless system of servicedelivery created through the

collaboration of entities responsible forseparate workforce developmentfunding streams. The One-Stop systemis designed to enhance access toservices and improve outcomes forindividuals seeking assistance. Theregulation specifically defines thesystem as consisting of one or morecomprehensive, physical One-Stopcenters in a local area. Core servicesspecified in WIA section 134(d)(2) mustbe provided at the One-Stop center asmust access to the other activities andprograms provided under WIA and byeach One-Stop partner. In addition tothe statutory list of core services, Statesand locals are encourated to addadditional core services such as theprovision of information relating to theavailability of work supports, including,Food Stamps, Medicaid, Children’sHealth Insurance Program, childsupport, and the Earned Income TaxCredit. In locating each comprehensivecenter, Local Boards should coordinatewith the broader community, includingtransportation agencies and existingpublic and private sector serviceproviders, to ensure that the centers andservices are accessible to theircustomers, including individuals withdisabilities.

In addition to the comprehensivecenters, § 662.100(d) describes threeother arrangements to supplement thecomprehensive center. Thesesupplemental arrangements include: (1)A network of affiliated sites that provideone or more of the programs, servicesand activities of the partners; (2) anetwork of One-Stop partners throughwhich the partners provide serviceslinked to an affiliated site and throughwhich all individuals are providedinformation on the availability of coreservices in the local area; and (3)specialized centers that address specificneeds. In essence, this structure may bedescribed as a ‘‘one right door and nowrong door’’ approach. One-Stoppartners have an obligation to ensurethat core services that are appropriatefor their particular populations aremade available at one comprehensivecenter, and through additional sites, asdescribed in the local plan andconsistent with the local memorandumof understanding (MOU). If anindividual enters the system throughone of the network sites rather than thecomprehensive One-Stop center, theindividual may obtain certain servicesat the network site and must be able toreceive information about how andwhere the other services providedthrough the One-Stop system may beobtained.

Some commenters expressed concernthat the description in § 662.100

emphasizes physical locations ratherthan the development of systems. Thecommenters suggested that theregulations be expanded to provide that,in addition to the comprehensive center,it is expected that local areas will builda One-Stop system by developingaffiliate relationships with existingpublic and private sector providers. Thecommenters further suggested that moreexamples should be offered as to howthe centers and affiliates may mix andmatch services.

Response: The purpose of § 662.100 issimply to describe the general objectivesof the One-Stop system and to identifythe required components of that systemas well as the alternative designsspecified in WIA. While we agree thateffective networks connecting thecenters and affiliates will generally becritical to the success of the One-Stopsystem, WIA allows local areassignificant flexibility in tailoring thedesign of the system to best meet localneeds. Therefore, rather than includeexamples as part the requirements ofthis regulation, we will disseminateinformation and provide technicalassistance about how different localareas have designed effective One-Stopsystems.

Commenters also requestedclarification that physical co-location atthe centers was not required for all ofthe services provided by a partner’sprogram and that each partner was notrequired to be co-located at the centers.

Response: The description of the One-Stop system in § 662.100 and therequirements for the provision ofservices at the centers in § 662.250 makeit clear that WIA requires the provisionof specified core services at the centers.However, § 662.250(b) specificallyprovides that the core services may beprovided at the centers by the partnersin a variety of ways, includingagreements with service providers at thecenters to provide the core services orthe provision of appropriate technology,as alternatives to the co-location ofpersonnel. The extent to which servicesin addition to the specified core servicesare provided at the centers and howservices are to be provided are mattersto be addressed in the local MOU’s, andare not specified by WIA. We believethe current provisions are clear on theseissues and have not made changes to theregulations.

Some commenters also expressedconcern that the description of the One-Stop system did not address access forindividuals with disabilities, andsuggested that we reiterate theapplicability of the Americans withDisabilities Act and Section 504 of the



Rehabilitation Act of 1973 to the One-Stop system.

Response: Section 667.275(a)(3)specifically states that the ADA andSection 504, as well as thenondiscrimination provisions of WIAsection 188, are applicable to the One-Stop system as well as the otheractivities administered under title I ofWIA. We believe that, as with otheruniform requirements, adding thisstatement to every affected section ofthese regulations would be duplicativeand potentially confusing. TheDepartment’s regulations implementingthe nondiscrimination provisions inWIA section 188 (29 CFR part 37)extensively address this issue.

Subpart B—One-Stop Partners1. Responsibilities: Subpart B

identifies the One-Stop partners andtheir responsibilities in the One-Stopdelivery system. The required partnersare entities that carry out the workforcedevelopment programs. They arespecifically identified in section121(b)(1) of WIA and § 662.200. Section662.200(b)(1)(i through vii) separatelyspecifies the programs under title I thatare included as required partners.Section 662.200(b)(2)–(12) alsoidentifies the other required programs,with some clarification of the particularprovisions of certain Acts (for example,the Vocational Rehabilitation Act andthe Carl D. Perkins Act) that authorizethe required partner program. Section662.210 identifies additional partnersthat may be a part of the One-Stopsystem.

One commenter suggested that theGovernor has the authority under WIAto require that additional partners beincluded in all the local One-Stopdelivery systems in the State and asksthat the regulation include suchauthority. The commenter cites section112(b)(8)(A) of WIA, which requires theState to describe in the State planprocedures to assure coordination andavoid duplication among specifiedprograms, and section 117(b)(1) of WIA,which provides that the Governorestablish criteria for the appointment ofmembers of local boards, as the basis forthis authority.

Response: We agree that theprovisions cited by the commenterauthorize the State to require thatadditional partners participate aspartners in all of the One-Stop systemsin the State. This includes the programspecified in WIA section 121(b)(2)(B)(i)through (iv) or any other appropriateprogram under WIA section121(b)(2)(B)(v). We have added a newsection 662.210(c) to clarify that theState does have this authority. The

State’s authority to identify additionalpartners to be included in all One-Stopsystems does not affect the CEO’sauthority to include locally-identifiedhuman resource programs as One-Stoppartners. Under WIA section 121(b)(2),the CEO and Local Board may approveany appropriate Federal, State or localprogram, including programs in theprivate sector, for participation as apartner in the local One-Stop system.

Entities—Section 662.220 provides ageneral definition of the ‘‘entity’’ thatcarries out the specified programs andserves as the partner. In light of theresponsibilities of the partners, whichare described in § 662.230 and whichinclude decisions about the use andadministration of program resources, theregulation defines the ‘‘entity’’ as thegrant recipient or other entity ororganization responsible foradministering the program’s funds inthe local area. The term ‘‘entity’’ doesnot include service providers thatcontract with or are subrecipients of thelocal entity. Section 662.220(a) providesthat for programs that do not have localadministrative entities, the responsibleState agency should be the One-Stoppartner. In addition, § 662.220(b) (1) and(2) specifies the appropriate entities toserve as partner for the Adult Educationand Vocational Rehabilitation programs.Entities that serve as the partner underthe Indian and Native American,Migrant and Seasonal Farmworker, andJob Corps programs are identified in theparts of the regulations applicable tothose programs (parts 668, 669, and 670respectively).

One commenter requested twoclarifications about the partnerrepresenting the Adult Education andLiteracy programs under title II of WIA.First, while the regulation specifies thatthe partner for those programs is theState eligible entity or an eligibleprovider designated by the State entity,the commenter suggested addingauthority for the State entity todesignate a consortium of eligibleproviders as the partner. Second, thecommenter suggested clarifying that theState eligible entity also has theauthority to designate the individualrepresenting the partner on the localboards, not just the entity.

Response: We agree that the Stateeligible entity may designate aconsortium of eligible providers to serveas the local One-Stop partner and havemodified the regulation to clarify thisauthority. However, we assume that anyconsortium so designated would havemechanisms in place so that it speakswith one voice on behalf of AdultEducation and Literacy programs onissues affecting the One-Stop system.

We would not expect that thedesignation of a consortium wouldrequire the Local Board to separatelynegotiate with each member of theconsortium about how theresponsibilities of the partner will becarried out.

The second issue is addressed in thepreamble discussion of 20 CFR part 661.

Another commenter noted that§ 662.220(b)(3) only defines nationalprograms under title I of WIA asrequired partners if such programs arepresent in the local area and suggestedthat the regulation apply the samecondition to the other required partners.

Response: We agree that theresponsibilities of a required partnerapply in those local areas where therequired partner provides services. Wedo not believe WIA was intended torequire programs not serving local areasto begin to provide services in suchareas, but instead to requirecollaboration through the One-Stopsystem in any local area in which suchservices are provided. While we believethat the vast majority of local areas arecurrently served by the required partnerprograms, the regulation is modified toclarify this requirement.

Several commenters also noted thatseveral of the programs identified asrequired partners may be administeredby the same entity in the State or localarea and the regulation should indicatethat one individual from that entity mayrepresent all such programs on the localboard.

Response: This issue is addressed inthe preamble discussion of 20 CFR part661.

Partner Responsibilities—Section662.230 describes and elaborates on thestatutory responsibilities of the partnersand identifies the five provisions of theAct that describe these responsibilities.These responsibilities include: (1)Making available through the One-Stopsystem appropriate core services that areapplicable to the partner’s program; (2)using a portion of funds available to thepartner’s program, to the extent notinconsistent with the Federal lawauthorizing the program, to create andmaintain the One-Stop delivery systemand to provide core services; (3)entering into an MOU regarding theoperation of the One-Stop system; (4)participating in the operation of theOne-Stop system; and (5) providerepresentation on the Local Board.

Several commenters expressedconcerns about the required use of aportion of the partners’ funds to supportthe One-Stop system. Some commenterssuggested that certain authorizing laws,such as the Perkins VocationalEducation Act, would not permit such



use. Other commenters suggested thatsince the WIA statutory languagerequires that partner funds be used to‘‘establish’’ the One-Stop system, theregulatory requirement be limited toinitial start-up of the system and notinclude any responsibility to use fundsto ‘‘maintain’’ the system. In addition,some commenters were concerned aboutwhether we could enforce the use offunds requirement and suggested thatunless the partners contributed realresources, the overall WIA vision wouldnot be achieved.

Response: WIA section 134(d)(1)(B)specifically requires all of the requiredpartners to use a portion of their fundsto support the One-Stop system. Webelieve the language providing that theuse of the partners’ funds not beinconsistent with the authorizing lawmay affect the particular One-Stopactivities the partner may support, butis not intended to nullify thisrequirement. Several of the core services(e.g., outreach) are authorized under allprograms, and each partner shouldcollaborate to ensure that the local One-Stop system is providing workforceinvestment activities that are of benefitto participants in the partner’s program.A portion of the partner’s funds is thenused to support the system in providingthose activities. The details of theparticular portion and use of thosefunds are to be addressed in the MOU.These issues are further addressed inthe subsequent regulatory provisions ofthis subpart.

With respect to the responsibility toassist in maintaining the system, webelieve that the requirement in§ 662.230(a)(2)(i) that a portion of fundsbe used to ‘‘create and maintain’’ theOne-Stop system is the appropriateinterpretation of the statutoryrequirement in WIA section134(d)(1)(B)that a partner use a portion of funds to‘‘establish’’ the One-Stop deliverysystem. There is nothing in WIA or thelegislative history to suggest that‘‘establish’’ refers to a one-time start-upactivity. To the contrary, all of thepartners’ responsibilities apply as longas the One-Stop system is in operationand include participation in theoperation of the One-Stop system (WIAsection121(b)(1)(B)) and carrying out theMOU that includes the details on thefunding of the system (WIA sec. 121(c)).We do not believe that Congressintended that the partners continue toparticipate in the operation of the one-stop system, but that their responsibilityto use funds to support that systemterminate as soon as some undefinedstart-up period is completed. Rather, webelieve the only reasonableinterpretation is that a required

partner’s responsibility to use a portionof funds to support the systemcontinues along with the participationof the partner in the system. Therefore,we have not changed this provision ofthe regulations.

With respect to enforcement of theserequirements, we are working with theother Federal agencies to ensure that allpartner programs are aware of and carryout these requirements. We believe thatfull participation in the One-Stopsystem will be of great benefit to thepartners’ programs and to theirparticipants, and, therefore, theserequirements should be viewed aspromoting a comprehensive andeffective system of service delivery foreach local area.

Section 662.240 addresses the coreservices applicable to a partner’sprogram that are to be provided throughthe One-Stop system. Section 662.400(a)lists the core services that are describedin section 134(d)(2) of WIA, and defines‘‘applicable’’ to mean the services fromthat list that are authorized andprovided under the partner programs.The extent to which core services areapplicable to a partner program, as wellas the manner in which services areprovided, are determined by theprogram’s authorizing statute.

Some commenters suggested wefurther define many of the listed coreservices. For example, one suggestionwas to require career counseling toinclude a discussion of self-sufficiencystandards to assist in setting long-termemployment goals. Another suggestionwas to require additional employmentstatistics information relating to highwage jobs and employment laws. Othersuggestions included adding computerliteracy to the initial assessment, andinformation relating to employmentrights to follow-up services.

Response: We believe many of theproposed elements would enhance theprovision of services. However, webelieve they should be disseminated astechnical assistance rather than asregulatory requirements. The purpose ofthis provision is to identify the list ofcore services contained in the statutethat must be made available through theOne-Stop system. The specific elementsof these services is a matter that may beaddressed in the MOU and should betailored to meet local needs. Therefore,we have not made any changes to thestatutory list of core services under thisregulation.

Availability of Services—Section662.250 describes where and to whatextent the One-Stop partners must makeavailable the applicable core services.Since section 134(c) of WIA requiresthat core services be provided, at a

minimum, at one comprehensivephysical center, the regulation requiresthat the core services applicable to thepartner’s program be made available byeach partner at that comprehensivecenter. To avoid duplication of servicestraditionally provided under theWagner-Peyser Act, this requirement islimited to those applicable core servicesthat are in addition to the basic laborexchange services traditionally providedin the local area under the Wagner-Peyser program. While a partner wouldnot, for example, be required toduplicate an assessment provided underthe Wagner-Peyser Act, the partnerwould be responsible for any neededassessment that includes additionalelements specifically tailored toparticipants under that partner’sprogram. We encourage partners to worktogether at the local level to tailor theinitial assessment so that theinformation taken can provide agateway to the partner program’s morespecific requirements. However, it isimportant to note that the adult anddislocated worker partner programs arerequired to make all of the core servicesavailable at the center (see § 662.250(a)).

Flexibility—Section 662.250(b) alsoprovides significant flexibility abouthow the core services are madeavailable at the One-Stop center byallowing for services to be providedthrough appropriate technology at thecenter, through co-location of personnel,cross-training of staff, or throughcontractual or other arrangementsbetween the partner and the serviceproviders at the center.

Proportionate Responsibility: Section662.250(c) provides that theresponsibility for the provision of andfinancing for applicable core services isto be proportionate to the use of servicesat the center by individuals attributableto the partners’ programs. Section662.250(d) further provides that theindividuals attributable to a partners’program may include individualsreferred through the center and enrolledin the partner’s program after the receiptof core services, individuals enrolledprior to the receipt of core services,individuals who meet the eligibilitycriteria for the partner’s program andwho receive an applicable core service,or individuals who meet an alternativedefinition described in the MOU. This‘‘proportionate responsibility’’ provisionis intended to provide an equitableprinciple for sharing cost and serviceresponsibilities among the partners. Theregulation provides that the specificmethod for determining proportionateresponsibility (for example, surveys)must be described in the MOU.



Additional Sites—Section 662.250(e)provides that, under the MOU, coreservices may be provided at sites inaddition to the comprehensive center.Therefore, it is not required thatpartners provide core servicesexclusively at a One-Stop center. If anindividual seeks core services at theOne-Stop center rather than at thepartner’s site, they should be madeavailable to him or her without referralto another location, but a partner is notrequired to route all of its participantsthrough the comprehensive One-Stopcenter.

There were a number of comments onthese provisions about the availability ofcore services and proportionateresponsibility. Commenters questionedwhether the requirement that partnersprovide core services at the One-Stopcenter went beyond the statute, andwhether proportionate responsibilitywas required by the statute. Severalcommenters expressed concern that theconcepts of proportionate responsibilityand attributable individuals did notprovide clear direction. In addition,some commenters requestedclarification that not all applicants for apartner’s program would be attributableto that program while others suggestedthe regulation should provide that onlyindividuals enrolled in the programshould be attributable. Finally, somecommenters were concerned thatproportionate responsibility wouldrequire undue tracking andrecordkeeping.

Response: We believe these regulatoryprovisions are appropriateinterpretations of WIA and the generalcost principles enunciated in therelevant OMB circulars. We believe that,read together, the requirements of WIAsection 134(c)(1), regarding the actualprovision of core services and theprovision of access to other services,WIA section 134(c)(2), regarding theaccessibility of these services at aphysical center, and WIA section 121,requiring that the partners provide theapplicable core services, support therequirement that each partner providethe applicable core services at thecenter. As noted above, such coreservices may also be provided at othersites in the One-Stop delivery system inaddition to being provided at the center.Section 662.250 does include provisionsto ensure that there is significantflexibility in the manner in which coreservices may be provided at the center,and does not require partners to providethose core services at the center that aretraditionally provided by the Wagner-Peyser program. The Department, inpartnership with other federal agencieswill provide additional technical

assistance to help implement theserequirements. We believe theserequirements are essential to ensure thatbasic information and services relatingto workforce development can truly beobtained at ‘‘One-Stop’’, and that thepartners effectively collaborate toprovide a seamless system of servicedelivery.

The principle of a partner’sresponsibility for the proportionate useof these services by individualsattributable to the program of thepartner is derived from general costprinciples of the OMB circulars, as wellour interpretation of the WIA provisionsrelating to the required provision ofapplicable core services. As notedabove, we believe this is an equitableprinciple that is intended to ensure anappropriate level of participation by thepartners in a manner that is fair to thepartners. We do not want to prescribehow such proportionate use is to becalculated, but simply to identifyoptions that we believe would beacceptable under the circulars forattributing individuals to a program.The regulation does not require that aparticular option be used, only that themethods be described in the MOU.Therefore, whether attribution is basedon enrollment in the program or someother basis is a matter to be determinedlocally among the partners. Trackingand recordkeeping will also be affectedby how the local area chooses todetermine proportionate use and we donot believe such requirements need beunduly burdensome. Consistent withour principle of writing theseregulations to provide maximum Stateand local flexibility, the regulation seeksto balance the need for Federal guidanceto ensure that the objectives of WIA arerealized with the need for flexibility atthe State and local level to tailorspecific approaches to meet local needs.We do not want this flexibility to beused to avoid implementing the changesin service delivery required under WIA,but we also do not want to precludeinnovative approaches to implementingthose changes. Therefore, we intend toretain the regulatory requirements ofthis section and offer technicalassistance to facilitate implementation.

Access to Services—Section 662.260provides that, in addition to theprovision of core services, the One-Stoppartners must use the One-Stop systemto provide access to the partners’ otheractivities and programs. This accessmust be described in the MOU. Thisrequirement is essential to ensuring aseamless, comprehensive workforcedevelopment system that identifies theservice options available to individuals

and takes the critical next step offacilitating access to these services.

Several commenters suggested that wemaintain a flexible interpretation of theterm ‘‘access’’ in § 662.260 whenreferring to the access to activities andservices, other than the core services,that a partner must provide through theOne-Stop system. These commentersexpressed concern that a partner with abroad array of services could notprovide all services at a single One-Stopcenter, and suggested that we encourageflexible delivery models, such asoutstationing of staff or electronicaccess, to meet this requirement.

Response: We have intentionally notdefined what constitutes access to theseother activities and services in theregulation and the regulation simplyrequires each local area to describe howaccess is provided through the One-Stopsystem in the MOU. We believe accessis intended to go beyond the merelisting of a program and location, butinstead that the One-Stop will provideadded value by assisting customers toidentify the services and programs thatmay best meet their particular needsand by arranging to obtain suchservices. Co-location of certain servicesat the center may be the most user-friendly approach to providing access insome areas, while other areas may relymore on electronic and other affiliateconnections to ensure access. That is amatter to be determined among thepartners in the local area through theMOU and this section of the regulationretains that requirement.

2. Cost Sharing: Section 662.270provides that the particulararrangements for funding the servicesprovided through the One-Stop systemand the operating costs of the One-Stopsystem must be described in the MOU.Each partner must contribute a fairshare of the operating costs based on theuse of the One-Stop delivery system byindividuals attributable to the partner’sprogram. This is an equitable principleand there are a number of methods thatmay be used for allocating costs amongpartners that are consistent with thisprinciple and the OMB circulars. Topromote efficiency and optimalperformance, partner contributions forthe costs of the system may be re-evaluated annually through the MOUprocess. This regulation identifies anumber of methodologies, includingcost pooling, indirect cost allocation,and activity based cost allocation plans,that may be used. The Department, inconsultation with other affected Federalagencies, issued guidance. The guidancewas published in the Federal Registeron June 27, 2000.



There were numerous commentsabout this section. Many of thecomments about the requirement thateach partner contribute a fair share tothe operation of the One-Stop systembased on proportionate use of thesystem by individuals attributable to theprogram of the partner were the same asor similar to the comments onproportionate responsibility under§ 662.250. Some commenters suggestedthat the methodology for allocating costsof the One-Stop system be strengthenedand clarified. Some commenterssuggested prescribing particularapproaches, such as requiring costsharing only be based on real costsdirectly attributable to the use of One-Stop center space and utilities when thepartners are co-located, while otherssuggested limiting the methods forattributing individuals to a program toservices received after enrollment in theprogram. Some commenters suggestedthat the regulation provide for poolingof overhead costs and proportionateallocation of service costs. Somecommenters expressed concern that themultiple cost allocation methodologiesidentified in the regulation were at oddswith the proportionate use approach,while others expressed concern that theproportionate use approach requiredextensive recordkeeping and tracking.Some commenters stressed the need fortime to determine baseline percentagesof how many people each partner servesrelative to the total traffic and suggestedthat we provide additional guidance ondeveloping baselines. A commenterexpressed concern that a proportionatecost allocation approach could causediscord and undercut collaboration andco-location, while other commentersexpressed concern about whether thisapproach could be enforced.

In addition, some commenterssuggested clarifying that operating costsinclude both administrative andprogrammatic costs. Other commenterssuggested that the regulations allow thefair share to be contributed ‘‘in-kind’’.Some commenters suggested removingthe multiple methodologies described inthe regulation while others expressedconcern that without more specificrequirements title I programs would endup paying all the costs.

Some commenters expressed concernthat reliance on the OMB circularsbased on benefit to the program wouldbe a barrier to One-Stop delivery andsuggested a new circular that wouldpromote integrated service deliveryshould be developed. A number ofcommenters indicated that it wasimportant that Federal agencies worktogether to present a coherent messagein support of sharing costs and

integrating programs and that technicalassistance be provided to facilitate thedevelopment of acceptable costallocation methodologies.

Response: We believe that the ‘‘fairshare’’ requirement of this regulation isthe appropriate interpretation of theWIA provisions relating to thecontributions of the One-Stop partnersand the applicable OMB circulars. Theregulation is intended to identify eachpartner’s responsibility to contribute tothe operation of the system based onproportionate use, while allowing eachlocal area significant flexibility inproviding how that contribution is to bedetermined. While prescribing a moredetailed methodology may provideclearer direction and facilitate morerapid resolution of the cost allocationissue at the local level, it would alsosignificantly limit the ability of eachlocal area to tailor the arrangements tomeet their particular needs. Therefore,we believe that the ‘‘fair share’’requirement is a reasonable and flexiblestandard that should be retained andsupplemented by technical assistancethat will inform local areas of acceptableapproaches in more detail. The costallocation and resource sharingguidance published in the FederalRegister by the Department, inconsultation with the Federal partneragencies, on June 27, 2000, addressesthis issue in more detail.

The proportionate use standard is notintended to be rigid and we do notbelieve the multiple methodologiesidentified in the regulation areinconsistent with that standard. Thevarious methodologies offer differentapproaches that may be used inimplementing these requirements. Asindicated with respect to § 662.250, wedo not believe that this standardnecessarily requires extensive trackingand recordkeeping. The burdensattendant to the adoption of a particularcost allocation method are a legitimatefactor to be considered in negotiatingMOU’s. We believe that local areas havethe flexibility to refine and modify thecost allocation procedures as moreexperience is gained. For example, thereis the flexibility to refine thedevelopment of baselines onproportionate use over time, and suchadjustments may be facilitated if thefunding arrangements in the MOU arerevised annually.

Contrary to the concern that theproportionate use standard will promotediscord and deter co-location andcollaboration, we believe that standardprovides an equitable framework whichshould assist local areas and partners inreaching agreement and within which amore detailed methodology may be

developed that supports the particulardesign of the One-Stop system in eacharea. With respect to enforcement, weare working with other Federal agenciesto develop models of acceptablemethodologies and to assist in ensuringthat partners are aware of theopportunities of the One-Stop deliverysystem and of their responsibilitiesunder WIA.

On the question of the kinds ofoperating costs of the One-Stop systemfor which the One-Stop partners mustcontribute, we believe those costs arethe common costs of operating the One-Stop system, and could include suchitems as space and occupancy costs,utilities, common supplies andequipment, a common receptionist, andother shared staff. However, thesecommon costs will vary depending onthe design of the One-Stop system andwe intend to address these costs as partof the technical assistance that we aredeveloping in partnership other federalagencies. Therefore, we have notmodified the regulation to further definethese costs.

On the question of whether thecontribution of the partners to theoperating costs of the One-Stop systemmay be ‘‘in-kind,’’ which we understandto mean provided with resources otherthan cash, we understand that the OMBcirculars recognize the provision ofnoncash resources as acceptable inmeeting certain costs. However, thecontributions of partners may alsoconsist of cash resources, or a mixtureof cash and noncash resources. Rather,the determination regarding the forms ofthe contributions is a matter to bedetermined locally through the MOUnegotiation process, taking into accountthe needs of the One-Stop system toensure customer-friendly access toservices and the proportionateresponsibility of and resources availableto the partners. We also intend toaddress this issue in the technicalassistance we will provide with otheragencies and have not modified theregulation.

On the issue of reliance on the OMBcirculars, while the circulars do setparameters that relate the allocation ofcosts to the benefit received by aprogram, we believe they also allowflexibility to develop cost allocationmethodologies that support integratedservice delivery. We do not expect theissuance of a new circular to addressOne-Stop delivery, but, as noted above,we are working with OMB and otheragencies to identify cost allocationmethodologies that will be useful in aOne-Stop environment.

Finally, we agree with the commentabout the importance of Federal



agencies working together in support ofcost sharing and integrating programs.There have been significant joint effortsto assist in implementing WIA,including issuance of the streamlinedunified planning guidance, and otherjoint communications designed to assistthe partners in working together. Thiseffort includes the joint technicalassistance being prepared on costallocation methodologies and additionalongoing activities intended to assist inthe implementation of the otherelements of the One-Stop system.

Allocation Process—Section 662.280clarifies that the requirements of eachpartner’s authorizing legislationcontinue to apply under the One-Stopsystem. Therefore, while the overalleffect of linking One-Stop partners inthe One-Stop system is to createuniversal access to core services and tofacilitate access to partner services, theresources of each partner may only beused to provide services that areauthorized and provided under thepartner’s program to individuals whoare eligible under the program. As notedabove, consistent with this principle,there are a variety of methods forallocating costs among programs. Thisregulation is intended to clarify thatparticipation in the One-Stop deliverysystem is a requirement that is inaddition to, rather than in lieu of, theother requirements applicable to thepartner program under each authorizinglaw.

There were several commentssuggesting that we reiterate in severaldifferent sections of part 662 that therequirements of the laws authorizing theprograms of the partner continue toapply. For example, commenterssuggested that § 662.260, on access toservices and § 662.300, on MOU’s, berevised to specifically provide that therequirements of the laws authorizing theprograms of the partner continue toapply.

Response: We believe that § 662.280effectively describes the continuedapplicability of the requirements of theauthorizing laws and have not repeatedthis language in other sections exceptwhere the underlying statutoryprovision specifically makes referenceto consistency with the authorizinglaws. We have made no change to theregulations.

Subpart C—Memorandum ofUnderstanding (MOU)

Subpart C describes the requirementsrelating to the local Memorandum ofUnderstanding MOU that governs theoperation of the local One-Stop system.Section 662.300 addresses the contentsof the MOU that must be executed

between the Local Board, with theagreement of the local elected official,and the One-Stop partners. The MOUmust describe the services to beprovided through the One-Stop deliverysystem, the funding of the services andthe operating costs of the system, themethods for referring individualsbetween the One-Stop operators and thepartners and the duration of andprocedures for amending the MOU. TheMOU may also include other provisionsabout the operation of the One-Stopsystem that the parties considerappropriate. For example, the partiesmay use the MOU to address thecoordination of equal opportunityresponsibilities such as the handling ofdiscrimination complaints or othergrievances relating to the One-Stopsystem.

Section 662.310 provides that thelocal areas may develop a singleumbrella MOU covering all partners andthe Local Board, or separate MOU’sbetween partners and the Local Board.In many areas, the umbrella approachmay be the preferred means to facilitatea comprehensive and equitableresolution of the operational issuesrelating to the One-Stop, addinginformation specific to each individualpartner organization. The regulationalso emphasizes that it is a legalobligation for the partners and the LocalBoard to engage in good faithnegotiation and reach agreement on theMOU. The partners and the LocalBoards may seek the assistance of theappropriate State agencies, theGovernor, State Board or otherappropriate parties in reachingagreement. The State agencies, the StateBoard and the Governor may alsoconsult with the appropriate Federalagencies to address impasse situations.If an impasse has not been resolved, inaddition to any programmatic remediesthat may be taken, parties that fail toexecute an MOU may not be permittedto serve on the Local Board. In addition,if the Local Board has not executed anMOU with all required parties, the localarea is not eligible for State incentivegrants awarded for local coordination.

Several commenters suggested thatthe regulation provide that onlyrequired partners ‘‘in the area’’ mustenter into the MOU and also requestedclarification as to whether optionalpartners were required to enter intoMOU’s.

Response: We agree that a requiredOne-Stop partner must enter into anMOU only in those local areas in whichthe partner’s program provides services.However, that condition also applies tocarrying out the other responsibilities ofa required partner, and, as described

above, we have modified section662.220(a) to clarify that condition. Wedo not believe it is necessary to repeatthat condition in this section. We alsobelieve the intent of WIA section 121 isthat optional partners must be includedin the MOU, or execute a separate MOUwith the Local Board, to become part ofthe One-Stop system. Since the MOUdescribes the operational details of theOne-Stop system, we believe WIAintends that the MOU also be thevehicle for addressing the specifiedissues of services, costs, and referralswith the optional partners. WIA section121(c) refers to One-Stop partners asparties to the MOU withoutdistinguishing between required andoptional partners. However, we notethat the regulation similarly refers toOne-Stop partners generally and is notlimited to required partners. Wetherefore do not believe it necessary tomodify the regulation.

Some commenters indicated that theinvolvement of the chief elected officialwas critical to the successfuldevelopment and implementation ofMOU’s and expressed concern thatwhile the agreement of the chief electedofficial to the MOU was required under§ 662.300, the chief elected official wasnot identified as a party to the MOU in§ 662.310.

Response: We agree that the chiefelected official has a significant role toplay in facilitating the development,completion and operation of the MOU’s.This role is explicit in WIA section121(c), which provides that the LocalBoard is to develop and enter intoMOU’s with the agreement of the chiefelected official. This role is included in§ 662.300 and we are adding similarlanguage to § 662.310. In addition, thechief elected official will often haveauthority over many of the title I One-Stop partners in the role of grantrecipient/fiscal agent for the adult,dislocated worker and youth programsand may play an important role inensuring that those partners contributeto the effective development andimplementation of MOU’s.

Some commenters stated that strongguidance and support for MOU’s at theState level was essential and that astrategy should be developed to monitorand evaluate MOU’s at the State andlocal levels. Other commenterssuggested that local systems wouldbenefit from MOU’s that offer incentivesor penalties to required partnersdepending on their performance relativeto systemize performance. Thesecommenters also suggested that theregulations should provide incentives toGovernors to make MOU’s andpartnerships strong at the outset so that



regulatory effort need not be spent ondeveloping sanctions and penalties forthose who fail to perform as intended.Several commenters questioned whetherthe sanctions specified in the regulationfor failure to execute an MOU wereconsistent with WIA, arguing that WIArequires that partners be represented onthe Local Board without reference towhether or not they have executed anMOU, while other commenterssuggested that exceptions to thesanctions be allowed by the regulationwhere a party has exhibited good faith.

Response: We agree that the Governorand the State have a critical role to playin facilitating the execution of localMOU’s. That role is reflected in therequirement in WIA section 112(b)(14)that the State plan describe the strategyof the State for assisting local areas inthe development and implementation offully operational One-Stop deliverysystems. The regulation also identifies aState role in assisting local areas toreach agreements on the MOU. We donot believe the regulations need toprovide additional incentives for theState to promote strong MOU’s since thedevelopment of MOU’s will generally becritical to enabling local areas and theState to obtain the performance outcomelevels needed to qualify for Federalincentive payments. The State also hasa significant role since many of theparties to the MOU will be Stateagencies under the direction of theGovernor. We believe it is importantthat the Governor work with thoseagencies and with localities to ensurethat effective MOU’s are executed andimplemented. We agree, however, thatthe suggested inclusion in the MOU ofperformance-based incentives orpenalties, whether based on the relativeperformance of partners or their sharedperformance, may be useful in manylocal areas. We are willing to assist inthe development of performance-basedprovisions that meet relevant legalrequirements while promoting State andlocal objectives. However, we do notbelieve the regulation needs to containincentive or penalty provisions sinceWIA and the regulations alreadyprovide for the addition of provisionsthat the parties deem appropriate.

With respect to the sanctionsidentified in § 662.310(c), we believe itis reasonable to interpret the referenceto representatives of the One-Stoppartners on the Local Board in WIAsection 117(b)(2)(A)(vi) as referring tothose One-Stop partners that meet therequirements for being partners in thelocal One-Stop system, includingexecuting the MOU. Since the MOU isthe vehicle through which the partner’srole in the local system is detailed, the

inability to reach agreement on that rolemeans that an entity has not assumedthe role of a One-Stop partner in thatlocal system for purposes ofrepresentation on the Local Board.

On the question of allowing a ‘‘goodfaith’’ exception that would permit localareas to be eligible for a Statecoordination incentive grant even if thearea has not executed an MOU with allrequired partners, we believe that suchgrants are only intended to be awardedto areas that demonstrate exemplarycoordination activities that are inaddition to meeting the minimumrequirements for coordination underWIA. We believe that incentive grantsare not intended to be awarded to areasthat are unable to meet the minimumrequirement that the local area have anMOU executed with all requiredpartners, even if the Local Board hasacted in good faith in attempting toreach agreement.

We also believe it should be notedthat the sanctions specified in§ 662.310(c) are in addition to ratherthan in lieu of any other remedies thatmay be applicable to the Local Board orto each of the partners for failure tocomply with the Federal statutoryrequirement that they execute an MOUand have clarified this point in theregulation.

Some commenters suggested that theregulation specify that the details of theassessments of individuals seekingservices through the One-Stop system bedescribed in the MOU and that we setparameters that will help the States andlocalities reach agreement onassessment goals, tools and processes.

Response: We agree that the MOU isa vehicle that local areas should use tocoordinate how assessments and otherservices are to be carried out in the One-Stop system. We will work with otherFederal agencies and interested Stateand local partners to provide technicalassistance that promotes agreement onand enhances how assessments andother services are delivered. However,we believe that WIA allows States andlocalities significant flexibility indetermining how, consistent with theFederal authorizing laws, such servicesare carried out and coordinated and,therefore, do not believe it isappropriate to establish parameters forthese services in the regulations.

Some commenters suggested that theregulation be modified to require thatthe MOU’s contain specific informationon staffing arrangements, includingassignment and supervision of staff,staff training and related personnelpolicies. In addition, these commenterssuggested that the regulation requirewritten concurrence from appropriate

labor organizations when sucharrangements affect their members or acollective bargaining agreement. Thesecommenters also suggested that theMOU contain the assurances describedin WIA section 181(b)(7) prohibiting theuse of funds to assist, promote, or deterunion organizing.

Response: We believe the MOU maybe an appropriate vehicle to addresscertain personnel issues in many localareas. Section 652.216 of theseregulations, governing the Wagner-Peyser Act, provides that personnelmatters for the State merit staffedemployees funded under the Wagner-Peyser Act are the responsibility of theState agency, although, as part of theMOU, Wagner-Peyser funded employeesmay receive guidance on the provisionof labor exchange services from the One-Stop operator. However, we do notbelieve it would be appropriate tomandate that additional personnelissues be addressed in the MOU. Thedetermination of the extent to whichsuch issues are addressed in the MOUremains with the parties to the MOUunder this regulation.

WIA section 181(b)(2)(B) providesthat activities carried out with fundsunder title I of WIA must not impaircollective bargaining agreements andthat no activity inconsistent with theterms of a collective bargainingagreement may be undertaken withoutthe written concurrence of the labororganization and employer concerned.Therefore, to the extent an MOUprovides that title I funds be used in amanner inconsistent with a collectivebargaining agreement, writtenconcurrence is required. However, wedo not believe it is necessary to restatethis requirement in this section of theregulation since this requirementapplies to all activities undertaken withtitle I funds.

Similarly, the prohibition on the useof title I funds to assist, promote or deterunion organizing is applicable to the useof all WIA title I funds. However, sincethis prohibition applies to all WIA-funded activities, we do not believe thatWIA requires that an assuranceregarding this prohibition be writteninto each MOU. Local areas may beprudent in doing so, but the regulationhas not been modified to require thatthe MOU contain such a writtenassurance.

Several commenters suggested thatthe final rule require MOU’s to beavailable for public review andcomment before execution, particularlyto training providers.

Response: WIA section 118(b)(2)(B)requires that the MOU’s be part of thelocal plan that is subject to public



review and comment requirements. Webelieve this requirement ensures publicreview and that an additional regulatoryrequirement is unnecessary. However,we do encourage local areas to providesignificant opportunities for publicinput regarding the form and contents ofthe MOU as early in the process as ispossible.

Several commenters suggested that,due to potential shifts in the annualappropriations affecting the programs ofthe partners, the regulation requireannual review of the MOU’s by theparties. Other commenters suggestedthat due to the difficulty in reachingagreement and the need for stability, theregulation clarify that multi-yearagreements are permissible.

Response: Section 662.300(b)provides, as does WIA section121(c)(2)(A)(iv), that the duration of theMOU, and the procedures formodification, must be addressed in theMOU itself and does not prescribe anannual review process. Section662.310(a) indicates that, in light of theannual appropriations process, thefinancial agreements ‘‘may’’ benegotiated annually, but also allows amulti-year agreement. We believe theseprovisions are appropriateinterpretations of WIA and have notmodified the regulations.

Subpart D—One-Stop OperatorThis subpart addresses the role and

selection of One-Stop operators. One-Stop operators are responsible foradministering the One-Stop centers andtheir role may range from simplycoordinating service providers in thecenter to being the primary provider ofservices at the center. The role isdetermined by the chief elected official.In areas where there is more than onecomprehensive One-Stop center, theremay be separate operators for eachcenter or one operator for multiplecenters. The operator may be selected bythe Local Board through a competitiveprocess, or the Local Board maydesignate a consortium that includesthree or more required One-Stoppartners as an operator. The Local Boarditself may serve as a One-Stop operatoronly with the consent of the chiefelected official and the Governor.

This subpart also addresses the‘‘grandfathering’’ of existing One-Stopoperators. Section 662.430 providessome continuity for areas that havealready established One-Stop systemswhile ensuring that fundamentalfeatures of the new One-Stop system areincorporated. A local area does not haveto comply with the One-Stop operatorselection procedures if the One-Stopdelivery system, of which the operator

is a part, existed before August 7, 1998(the date of the WIA’s enactment).However, that One-Stop system must bemodified to meet the WIA requirementsabout the inclusion of the required One-Stop partners and the MOU.

Some commenters suggested that theregulations be modified to allow for asystem operator (rather than separatecenter operators) that may beresponsible for the coordination of theentire local one-stop system, or themaintenance and development of thelinkages and technology betweencenters.

Response: While WIA section 121(d)refers to the operator primarily inconnection with the operation ofcenters, we believe that the law does notpreclude the expansion of that role toinclude additional coordinationresponsibilities relating to the One-Stopsystem. The particular role may varydepending on the design of the localsystem. We have modified section662.410(c) to include the possibility ofbroader One-Stop operator coordinationresponsibilities.

Several commenters suggested thatthe regulations be modified to clarifythat the public must have theopportunity to review and comment ondocuments relating to the selection of aOne-Stop operator if a competitiveselection process is used.

Response: WIA section 117(e)contains a general sunshine provisionthat requires the Local Board to makeavailable on a regular basis informationregarding its activities, includinginformation on the designation andcertification of One-Stop operators. Thisrequirement applies to whateverdesignation process is used by the localarea, whether it be competitive or anagreement with a consortium. Section662.420(b) referred to this requirementonly in connection with the designationof the Local Board as the operator andthe designation of an existing operator.We have removed the reference in§ 662.420(b) and have modified§ 662.410 to clarify that the LocalBoard’s sunshine provision, which isnow described in § 661.307, applies toall designations and certifications ofOne-Stop operators.

Some commenters suggested that theregulation describe the various financialassistance agreements that may be madewith the One-Stop operator followingthe selection process. Specifically, thecommenters suggested that theregulation identify grants, cooperativeagreements, and procurement contractsas the alternative arrangements andidentify the OMB circulars that apply toeach arrangement.

Response: We believe that the fiscaland administrative rules relating to theuse of WIA title I funds, including theuse of such funds to support the One-Stop operator, are appropriatelydescribed in 20 CFR 667.200 and neednot be restated in each section of theregulations to which they areapplicable.

Some commenters suggested that weshould encourage the grandfathering ofOne-Stop operators that were designatedpursuant to a collaborative process.These commenters also suggested that§ 662.430 appears to impose morerequirements on the grandfathering ofexisting One-Stop operators than applyto new designations and that thoserequirements should be uniform.

Response: We believes that WIAprovides options for the designation ofOne-Stop operators and intends for eachlocal area to determine the approachthat best meets local needs. We willdisseminate information relating to theexperience of local areas that have usedeach of the allowable options. We willalso modify this regulation to clarifythat the only difference between One-Stop systems that choose to grandfatherthe One-Stop operator and systems thatdesignate the operator pursuant tocompetition or consortium agreement isthe selection process. The WIArequirements relating to the inclusion ofrequired partners, the provision ofservices, and the execution of theMOU’s apply to all One-Stop systems,including those with operators retainedunder the grandfathering provision.Such systems must be modified, to theextent necessary, to comply with allWIA requirements regarding the One-Stop system. We have modified§ 662.430 to make these distinctionsclearer.

Part 663—Adult and Dislocated WorkerActivities Under Title I of the WorkforceInvestment Act

Introduction

This part of the regulations describesrequirements relating to the servicesthat are available for adults anddislocated workers. The required adultand dislocated worker services,described as core, intensive, andtraining services, form the backbone ofthe One-Stop delivery system forservices to two workforce programcustomers, job seekers and employers.The WIA goal of universal access to coreservices is achieved, among otherstrategies, through close integration ofservices provided by the Wagner-Peyser,WIA adult and dislocated workerpartners and other partners in the One-Stop center and system. Intensive and



training services are available toindividuals who meet the eligibilityrequirements for the funding streamsand who are determined to need theseservices to achieve employment, or inthe case of employed individuals, toobtain or retain self-sufficientemployment. Supportive services, toenable individuals to participate inthese other activities, including needs-related payments for individuals intraining, may also be provided.

These regulations also introduce theIndividual Training Account (ITA),which is a key reform element of theWorkforce Investment Act. Individualswill now be able to take a proactive rolein choosing the training services whichmeet their needs. They will be providedwith quality information on providers oftraining and, armed with effective casemanagement, an ITA as the paymentmechanism. These tools will enablethem to choose the training providerthat best serves their individual needs.

Along with part 664, this partcontains most of the program servicerequirements that apply to WIA title Iformula funds. WIA provides States andlocal areas with significant flexibility todeliver services in ways that best servethe particular needs of each State andlocal communities. These regulationssupport that principle; whereverpossible, program design options andcategories of service are definedbroadly. States and local areas arereminded that they must use thatflexibility in a manner that broadens theopportunities available under the Act toall customers. Recipients of financialassistance under WIA title I must bemindful of their responsibilities underthe nondiscrimination provisions ofsection 188, and must not unfairlyexclude individuals from opportunitiesor otherwise make decisions based uponrace, color, religion, sex, national origin,age, political affiliation or belief,disability status, or citizenship. TheDepartment published comprehensiveregulations implementing section 188 at29 CFR part 37. 20 CFR 667.275 makesclear that all recipients of financialassistance under WIA title I mustcomply with 29 CFR part 37 whenexercising the flexibility provided byWIA and this Final Rule.

Subpart A—One-Stop System1. Role of the Adult and Dislocated

Worker Programs in the One-StopSystem: Section 663.100 provides thatthe One-Stop system is the basicdelivery system for services to adultsand dislocated workers. The concept ofa single system that provides universalaccess to certain services to allindividuals age 18 or older is a key tenet

of the Workforce Investment Act. Theregulation reflects the emphasis in WIAto consolidate and coordinate services.The grant recipient(s) for the adult anddislocated worker program becomes arequired partner of the One Stop system,and is subject to 20 CFR 662.230regarding required partnerresponsibilities, including serving onthe Local Board. Access to servicesthrough the One-Stop system ensuresthat individual needs are identified and,to the extent possible, met. Theconsolidation of and access to serviceswill result in improved services for bothadults and dislocated workers.

One comment on § 663.100 noted thatadult and dislocated worker programsare separate activities with separatefunding streams, and asked whetherthey might each have separaterepresentatives on the Local Board.

Response: We understand that theheading for § 663.100 may bemisleading, in that it may be read toimply that there is a single programserving adults and dislocated workers,which is clearly not the case. Asaccurately noted by the commenter,these are separate programs withseparate funding streams. Accordingly,we have revised the headings andregulatory text in §§ 663.100, 110 and115 to pluralize the word ‘‘Program,’’ tomore accurately reflect the discretenature of the two programs. On thematter of separate representation foreach of these programs on the LocalBoard, we feel the rule alreadysufficiently addresses this issue in theLocal Governance provisions at 20 CFR661.315, and 662.200(a), concerning therequired One-Stop partners. Thesesections make it clear that the LocalBoard must have at least one memberrepresenting each One-Stop partnerprogram—including the Adult andDislocated Worker programs. The CEOmay select one member to represent theAdult program and a different memberto represent the Dislocated Workerprogram. Or, under new paragraph661.315(f), the CEO may select onemember to represent both of thoseprograms, if that member meets all thecriteria for representation for eachprogram. Accordingly, no change hasbeen made to the Rule.

Another commenter observed thatIndividual Training Accounts were theonly method for providing trainingspecifically referenced in § 663.100(b)(3)and suggested that the Final Rule alsolist all training services, includingcontract training, OJT, and customizedtraining.

Response: The purpose of § 663.100 isto highlight the key facets of the Adultand Dislocated Worker programs in the

One-Stop delivery system, one of whichis the establishment of ITAs. Since thepurpose of this provision is to highlightITAs as an important component of thenew workforce investment system,rather than to clarify the types oftraining that may be provided under theadult and dislocated worker programs,no change is being made to theregulations. Section 663.300 clarifiesthat training services are listed in WIAsection 134(d)(4), and that the list is notall-inclusive and additional trainingservices may be provided.

2. Registration and Eligibility:Sections 663.105 through § 663.115address registration and basic eligibilityrequirements. These sections providegeneral guidance in the regulation at§ 663.105 on when adults anddislocated workers must be registered.Sections 663.110 and 663.120 containthe basic eligibility criteria for adultsand dislocated workers, respectively.

Registration is an informationcollection process that documents adetermination of eligibility. It is also thepoint at which performanceaccountability information begins to becollected. Individuals who are seekinginformation and who, therefore, do notrequire a significant degree of staffassistance, do not need to be registered.Accordingly, of the core services listedin the Act, only staff assisted servicessuch as individualized job searchservices, career counseling, and jobdevelopment will automatically requireregistration. Additional core servicesoffered at the discretion of the State andLocal Boards, and not listed in the Act,may or may not require registration,depending on the degree of staffassistance involved, and otherestablished local policies. Participationin any intensive or training service,whether those specifically listed in theAct, or another offered at the State orLocal Board’s discretion, will alwaysrequire registration.

In addition to the responsibility toregister participants, EO data must becollected on every individual who isinterested in being considered for WIAtitle I financially assisted aid, benefits,services, or training by a recipient, andwho has signified that interest bysubmitting personal information inresponse to a request from the recipient.See 29 CFR 37.4 (definition of‘‘applicant’’) and 29 CFR 37.37(b)(2).The point at which such personalinformation should be collected iswithin the recipient’s discretion;however, the recipient’s request for andreceipt of that information with regardto a specific individual triggers theaccompanying responsibility to collectEO data at the same time. The EO data



must be maintained in a manner thatallows the individuals from whom thedata was collected to be identified, andthat ensure confidentiality. Thisresponsibility is separate from, andmight not arise at the same point in theprocess, as the registrationresponsibility. We will issue furtherguidance on this data collectionrequirement. Further, all requirementsof WIA Section 188 and 29 CFR part 37must be followed during the registrationand eligibility determination process toensure non-discrimination in theassessment process.

Additional information needed todetermine eligibility for assistance otherthan Title I of WIA available at the One-Stop site may also be determined at thesame time. Program operators shoulddetermine what information they needfor cost allocation purposes and whenthey can most efficiently collect it.Electronic records systems allowinformation to be collectedincrementally as higher levels ofassistance are provided.

One commenter felt that the rule at§ 663.105(b), which requires registrationfor any service other than self-service orinformational activities, is in conflictwith the goal of universal access.

Response: There has been confusionover the issue of precisely whenparticipants must be registered. For thecore services listed in the Act, onlythose core services that are notinformational and for which theparticipant requires significant staff-assistance, such as follow-up services,individual job development, job clubsand screened referrals, will requireregistration under title I of WIA. Thisinterpretation preserves the goal ofuniversal access and makes the servicesdelivery process as customer-friendly aspossible, consistent with the legislativerequirements of performanceaccountability. All persons will haveaccess to core employment-relatedinformation and self-service toolswithout restrictions or additionaleligibility requirements. No change hasbeen made to the Final Rule. Additionalinformation on the issue of registrationunder title I of WIA is contained inTraining and Employment GuidanceLetter (TEGL) 7–99 which can beaccessed at www.usworkforce.org.

We received many commentsexpressing concern that there is nomechanism in the regulations to ensurethat unregistered individuals receivinginformational and self-help coreservices are benefitting from thoseservices. Two comments suggested thatOne-Stops should either be required totrack these individuals’ outcomes orthat the Department itself engage in

some sort of periodic tracking. Anothercommenter questioned whether a Statecould collect this informationindependent of a regulatory requirementto do so.

Response: While we have chosen notto require registration or collection ofoutcomes information for those usingonly self-service or informationalactivities, this does not preclude Statesand One-Stop operators from collectinga variety of other information aboutservice use, customer outcomesconsistent with rules governingconfidentiality, and/or customersatisfaction if they so choose. Westrongly encourage States and localareas to seek customer feedbackregarding the quality of servicesavailable, in order to further theircontinuous improvement efforts.Finally, local areas may also choose tohave less formal tracking mechanismswhich fall short of official registration,including paper-based or electronic‘‘sign-in’’ when individuals enter thecenter. Realizing that some assessmentof the value of these services isimportant for determining whatresources are devoted to these types ofactivities we will convene a workgroupof Federal, State and localrepresentatives to discuss the issue ofself-service measures in the Fall of 2000.We anticipate that this workgroup willdevelop a menu of optional self-servicemeasures that States and local areas canutilize.

We also received comments whichargued that the existing data collectionrequirements are too burdensome andshould be limited. In addressing thedata collection requirements in theregulations, we have attempted to strikea reasonable balance which satisfies ourreporting needs under WIA withoutover-burdening States and local areas.No change has been made to the FinalRule in response to these comments. Weissued a Federal Register notice on WIAtitle I reporting requirements on April 3,2000. The purpose of the notice was tosolicit comments concerning the newmanagement information and reportingsystem including the WIA StandardizedRecord Data, the Quarterly SummaryReport and the Annual.

One commenter suggested that, inorder to avoid redundancy, individualseligible for TAA, or NAFTA–TAA, orthose referred from the Worker Profilingand Reemployment Services initiative,should automatically be eligible fordislocated worker services and shouldbe specifically included in § 663.115 inthe Final Rule.

Response: We agree that most workerscertified as eligible for the TAA andNAFTA–TAA programs will also meet

the Act’s definition of dislocatedworkers. To determine dislocatedworker eligibility, the One-Stop operatormust have sufficient information fromwhich to make that determination, andin States with common intake systems,no further collection of registrationinformation may be required in order todetermine eligibility. One of the keyreforms of WIA is streamlining customerservices, and we would encourage localareas to examine methods throughwhich they can determine eligibility formultiple programs at one time, throughthe coordination of One Stop Centerpartner activities. We furtherrecommend that TAA and NAFTA–TAAcertified workers who qualify asdislocated workers should also beenrolled under Title I of WIA. By doingthis, those TAA and NAFTA–TAAworkers who are determined to be inneed of intensive, supportive or trainingservices would be able to receive any ofthese services that cannot be providedunder the TAA or NAFTA–TAAprograms under Title I of WIA.Procedures to govern these processesshould be part of the MOU’s developedbetween WIA partners, in accordancewith the dislocated worker eligibilitydetermination procedures described in§ 663.115(b) of these regulations.

Acceptance of profiled and referredUnemployment Insurance (UI)claimants as eligible dislocated workersis a decision to be made by Governorsand Local Boards consistent with thedefinition at WIA Section 101(9). Thepolicies and procedures established byGovernors and Local Boards mayinclude a policy that the UI profilingmethodology and referral process meetsthe criteria in WIA Section 101(9). Insuch instances, no furtherdocumentation would be needed toestablish the ‘‘unlikely to return’’criterion at WIA section 101(9)(A)(iii).Other eligibility criteria could also bedocumented by the unemploymentcompensation system through thisprocess. Since acceptance of TAA,NAFTA–TAA and UI profiling data toprove eligibility are matters for State orlocal decision, no change has been madeto the Final Rule.

One comment suggested that languagebe added to § 663.105 in the Final Rulepermitting the use by One-Stops ofintake application data and otherinformation collected by non-WIAfunded providers for registration andeligibility determination.

Response: We support the goal ofdeveloping common intake systems thatcan be used across a variety of programsand which eliminate redundancy of datacollection and encourage States andlocal areas to develop such systems. We



think that these activities are anessential part of the reforms envisionedby WIA and the creation of the One-Stop system and can lead to improvedefficiency for program operators andbetter customer service. One Stoppartners must work cooperatively todevelop procedures, outlined in theMOU’s, which will facilitate suchstreamlining. At the Federal level we areworking with other Federal agencies todevelop common definitions and dataelements to facilitate this process. Sincethe integration of intake systems iscurrently permissible under theregulations as long as all necessary datais collected, no change has been madein the Final Rule.

Another comment suggested State andLocal Boards should be prohibited fromdeveloping dislocated workerdefinitions that exclude groups ofworkers based on their industry,occupation, or union affiliation.

Response: In considering theprocedures for determining eligibility,we believe that need for services shouldbe based on individual circumstances,and that State and locally developeddefinitions must be consistent with WIAsection 101(9). There is no language inthat Section that we interpret asauthorizing an eligibility definitionbased on industry or union affiliation,thereby allowing any exclusions basedon the same. We strongly agree thatworkers should not be prohibited fromreceiving services based on their unionaffiliation. Blanket exclusions based onindustry or occupation are too general toaccommodate individual needs andunique situations. It should also benoted that the union representative aswell as other members of the LocalBoard have an opportunity to raiseconcerns regarding consideration ofsuch blanket eligibility decisions,through the WIA ‘‘sunshine provisions’’in sections 111 and 117 and describedin new §§ 661.207 and 661.307,governing Board activity, and throughthe required public comment process.

Many comments from the VocationalRehabilitation system suggested thateligibility for Vocational Rehabilitationservices must remain a distinct conceptfrom eligibility determination forservices under Title I of WIA.

Response: While we acknowledgethere are separate eligibility criteria forthe two programs, we see no need foradditional regulatory language on thisissue. 20 CFR 662.280 clearly addressesthis issue and states that the eligibilityrequirements of each One-Stop partner’sprogram continue to apply.Additionally, the resources of eachpartner may only be used to provideservices that are authorized and

provided for under the partner’sprogram, to individuals that are eligibleunder such program. We encouragelocal One-Stops to maximizecoordination arrangements whichpromote convenient and accurateeligibility determination for individualswith disabilities who may needVocational Rehabilitation services,while maintaining the integrity of theOne-Stop Center’s integrated servicestrategy. One benefit of a closelycoordinated One-Stop system isincreased administrative efficiency, aswell as more seamless service to thecustomer, through the use of commonintake systems. Moreover, weemphasize that under 29 CFR 37.7,individuals with disabilities should beserved through the same channels asindividuals without disabilities,receiving reasonable accommodation asappropriate under 29 CFR 37.8.

Several commenters noted that, under§ 663.115, Governors and Local Boardsare allowed to develop policies andprocedures for the interpretation of thedislocated worker eligibility criteria,and asked how disputes between theseparties would be resolved.

Response: While we provide technicalassistance on matters of legislative andregulatory interpretation, we look to theState and Local Boards to develop aprocess to avoid, and if necessaryresolve any disagreements. Under 20CFR 661.120, local policies must beconsistent with established Statepolicies, as well as the Act and theregulations. Thus, while Local Boardsmay develop policies which supplementState policies, they may not adoptpolicies which conflict with Statepolicies. No change has been made tothe Final Rule.

One comment stated that dislocatedworker programs serving unionmembers must consult the union in thedesign and implementation of thoseprograms.

Response: Unions are well-positionedto understand the needs of theirmembers and can be a valuable resourcein the design of effective dislocatedworker programs. WIA requires thatorganized labor participate in thedevelopment and design of availableservices to dislocated workers, throughtheir representation on State and LocalBoards. Additionally, the public,including the organized Laborcommunity, must have an opportunityto review and comment on the proposeddesign of programs serving dislocatedworkers, as part of the plan review andapproval process. State and LocalBoards are encouraged to use input fromall key stakeholders, includingemployees, their representatives, and

employers, and to work collaborativelywith them when designing services. It isup to the governance structure at theLocal level to set procedures to ensurethis input is considered in programplanning. Accordingly, no change hasbeen made to the Final Rule.

One commenter requested that theregulations provide that where the LocalBoard wishes to pursue training servicesnot listed in the Act, that such servicesmust be identified in the Local Plan,and that a review process that includesconsultation with labor organizationswhose members have skills in thespecific training being proposed by theOne-Stop operator, prior to fundingsuch activities.

Response: The Act, at section 118(b),provides, among other things, that theLocal Plan identify the current andprojected employment opportunities inthe local area, and the job skillsnecessary to obtain such employmentopportunities. Although the Act doesnot include ‘‘formal’’ consultation withlabor organizations whose membershave skills like those in which trainingis proposed, such issues may beaddressed as part of the development ofthe Local Plan, and the public planreview and approval process. LocalBoards include representatives of labororganizations who will participate inthe development of the Plan, andtherefore in the design of trainingactivities to be conducted in the localarea. Additionally, the Act, at section118(b)(7), provides that the Local Planinclude a public comment processwhich includes an opportunity forrepresentatives of labor organizations toprovide comments on the Plan, andinput into the development of the LocalPlan, prior to its submission. Inaddition, 20 CFR 667.270 providessafeguards to ensure that participants inWIA training activities do not displaceother employees. No change to the FinalRule is necessary.

Another commenter suggested that weamend the regulations to require One-Stop operators to consult with theappropriate labor organizations whosemembers have skills in the area inwhich the OJT or customized training isproposed in the development of thetraining contract. The comment does notlimit this consultation to circumstanceswhere a collective bargaining agreementis in effect.

Response: WIA section 181(b)(2)(B)requires consultation, and writtenconcurrence of the labor organizationand employer, where the proposedtraining would impair an existingcollective bargaining agreement. It doesnot address consultation in othercircumstances. We believe, however,



that informal consultation withorganized labor on the nature and scopeof proposed OJT or customized trainingcan help to ensure its quality andrelevance. The labor representative(s) onthe Local Board is in an ideal positionto establish policies about theconsultation role of organized labor andto help identify situations whereappropriate labor organizations shouldbe consulted in the development of anOJT contract. Accordingly, no change tothe Final Rule is necessary.

One comment suggested that wedefine the term ‘‘substantial layoff,’’ asfound in WIA Section 101(9)(B)(i) and§ 663.115, to include situations inwhich employers use layoff status toavoid their WARN Act obligations toannounce a plant closing or significantpermanent downsizing.

Response: The purpose of thiscomment is unclear. However, anydefinition of the term ‘‘substantiallayoff’’ for defining an eligibledislocated worker under WIA section101(9)(B)(i) is irrelevant to employerobligations under the WARN Act. WIAprovisions cannot be used to enforceWARN Act employer notificationobligations. We believe that thedefinition of ‘‘substantial layoff’’ forWIA purposes is best left to State andlocal areas to decide in light of theirparticular economic conditions. We donot plan to further define ‘‘substantiallayoff’’ at this time.

The same commenter also suggestedState and Local Boards be encouraged todevelop the broadest possible definitionof a general announcement of a plantclosing, including information that is‘‘public knowledge,’’ despite the failureof the employer to acknowledge theclosing.

Response: Rapid response activitymay be triggered by a variety ofinformation sources such as publicannouncements or press releases by theemployer or representatives of anemployer, and other less formalinformation developed by early warningnetworks, individual phone calls, orother sources. A Rapid Response contactwith an employer may confirm aplanned plant layoff or closing. ‘‘Publicknowledge’’ is, however, a very elusiveconcept and public funds are limited. Itis important to have a creditable sourceof information or confirmation from theemployer or some other clearly credibleevidence of an imminent dislocationevent before triggering rapid responseactivities. No change has been made tothe Final Rule.

3. Displaced Homemaker Eligibility:Section 663.120 clarifies that adisplaced homemaker who has beendependent on the income of another

family member but is no longersupported by that income, isunemployed or underemployed and isexperiencing difficulty in obtaining orupgrading employment, may receiveassistance with funds available to LocalBoards for services to dislocatedworkers.

Several commenters recommendedthat we require State Plans to furtherdiscuss the eligibility of displacedhomemakers and the service strategiesfor meeting this group’s special needs.

Response: States are required todiscuss displaced homemaker servicestrategies as part of their State Plans(WIA Section 112(b)(17)(A)(iv)). Thisrequirement is addressed in the WIAPlanning Guidance for Strategic FiveYear State Plans. This requirement isalso addressed in, Final Unified PlanGuidance for the Workforce InvestmentAct, published in the Federal RegisterVol.65, No. 10 on January 14, 2000,which contains instructions for plannarrative discussions on how specialpopulations, including displacedhomemakers, will be served. Services todisplaced homemakers are alsoaddressed in 20 CFR 665.210(f), whichprovides that, among other things,implementing innovative programs fordisplaced homemakers is an allowableStatewide workforce investmentactivity. No changes have been made tothe Final Rule.

4. Title I Funds: Section 663.145clarifies how title I adult and dislocatedworker funds are used to contribute tothe provision of core services, and toprovide intensive and training servicesthrough the One-Stop delivery system.All three types of services must beprovided, but the Local Boardsdetermine the mix of the three services.

One commenter supported therequirement that all three types ofservices, (core, intensive, and training),must be available through the One-Stopdelivery system, but wanted theregulations to limit the provision of the‘‘discretionary’’ services authorizedunder WIA section 134(e)(1) to thosethat do not reduce the availability oraccessibility of other mandatory servicesto eligible participants under the Act.

Response: While it is not entirelyclear from the comment, we assume thatthe commenter is referring only to thoseemployment and training activitieslabeled ‘‘discretionary’’ under WIAsection 134(e)(1), and not to all‘‘permissible’’ local activities undersection 134(e) of the Act. We agree thatrequired activities for eligibleindividuals take precedence over thepermissible discretionary activitiesdescribed in § 663.145(b), and that core,intensive and training services, as

defined in section 134(d)(2) through (4),must be provided in each local area.However, to impose a hard and fast ruleon when each State or local area mayprovide discretionary activities, reducesthe flexibility of Boards to make morelocalized decisions, which is contrary tothe reforms of WIA. In the past, thesekinds of concerns were addressedthrough mandatory spendingpercentages for various categories ofservices, such as the 50 percent fortraining provision under the JobTraining Partnership Act. Thecustomized screening and referralservices listed in section 134(e)(1)(A)may provide useful and necessaryservices to eligible participants andcould be very valuable in some labormarkets. The customized employerservices listed in section 134(e)(1)(B) areto be provided on a fee-for-service basisand should not result in any diminutionof available WIA funds. In either case,it is up to the States and Local Boardsto develop a mix of activities andservices which will best serve thecustomers of their area. The resources ofall of the One-Stop partner programsshould be taken into account whendetermining the appropriate mix ofactivities and services to be provided.Once a participant has become part ofthe WIA system, she/he should be ableto receive all the services needed toreach an employment goal. We do notthink it is appropriate to attempt to seta rule that constrains the way in whichStates and Local Boards provide thatmix of services as long as mandatoryservices are made available.

5. Sequence of Services: WIA providesfor three levels of services: core,intensive, and training, with service atone level being a prerequisite to movingto the next level. The regulationsestablish the concept of a tieredapproach but allow significantflexibility at the local level. We chosenot to establish a minimum number of‘‘failed’’ job applications or a minimumtime period but, instead, the regulationsallow localities to establish gatewayactivities that lead from participation incore to intensive and training services.Any core service, such as an initialassessment or job search and placementassistance, could be the gatewayactivity. In intensive services, thegateway activity could be thedevelopment of an IndividualEmployment Plan (IEP), individualcounseling and career planning oranother intensive service. Key to thesegateway activities is the determination,made at the local level, that intensive ortraining services are required for theparticipant to achieve the goal of



obtaining employment or, for employedparticipants, obtaining or retaining self-sufficient employment. The three levelsof services are discussed separately inthe regulations.

We received many commentsconcerning our general approach toregulating participant progressionthrough the sequence of services. Thecommenters were uniformly pleasedthat the regulations did not require acertain number of failed job searchattempts or minimum lengths of time inone service tier before an individualcould be found eligible for the next tierof services. Several commenters,however, felt we should do even moreto ensure that the Act is not interpretedas a ‘‘work first’’ program. Somecomments suggested that we shouldpreclude State and Local Boards fromestablishing minimum time periods ofparticipation in core and intensiveservices.

Response: While the regulations donot explicitly preclude State or LocalBoards from establishing minimum timeperiods within each tier of services, weagree that mandatory waiting periodsare not consistent with customization ofservices according to each participant’sunique needs. Consistent with ourintent to write regulations thatmaximize State and local flexibility,however, we continue to support theidea that local level program operatorsare best positioned to determine theappropriate mix, and duration ofservices.

6. Core Services: Sections 663.150 to§ 663.165 discuss the core services. Allof the core services that are listed in theAct must be made available in eachlocal area through the One-Stop system.Follow-up services must be available fora minimum of 12 months afteremployment begins, to registeredparticipants who are placed inunsubsidized employment. We havemade a technical correction to§ 663.150, to conform with the statutoryrequirement that followup services bemade available ‘‘as appropriate’’ to theindividual. This means that theintensity of the followup servicesprovided to individuals may vary,depending upon the needs of theindividual. Among the core servicesavailable is information on targetedassistance available through the One-Stop system for specific groups ofworkers, such as Migrant and SeasonalFarm Workers, and veterans.

Core services also include assistancein establishing eligibility for theWelfare-to-Work program, and programsof financial aid for training andeducation programs. The specific formof this assistance is determined at the

local level based on the participant’sneeds and in coordination with theother partner programs. This assistancemay include: referrals to specificagencies; information relating to, orprovision of, required applications orother forms; or specific on-siteassistance.

Another core service is the provisionof information relating to theavailability of supportive services,including child care and transportationavailable in the local area, and referralto such services as appropriate. LocalBoards are encouraged to establishstrong linkages with a variety ofsupportive service programs and worksupports, including child support, EITC,dependent care, housing, Food Stamps,Medicaid programs, and the Children’sHealth Insurance Program, that maybenefit the customers they are serving atthe One-Stop Center. Such programsprovide key supports for low-incomeworking families and families makingthe transition from welfare to self-sufficiency.

We also encourage Local Boards toestablish strong linkages to childsupport agencies and organizationsserving fathers. WIA services can helpraise the employment and earnings ofnon-custodial fathers and fathers livingwith their children so that they canbetter support their children. Childsupport payments help low incomesingle parents stabilize and raise theirincome. At the same time, it isimportant for One-Stop programs to beaware of the impact that child supportrequirements may have on non-custodial parents who may seekservices.

One commenter recommended thatthe provision of ‘‘brokering services,’’ aspresently performed by CBO’s underJTPA be expressly permitted under Part663. These services include facilitatingand brokering relationships betweenlow-income community residents, localbusinesses, and specialized groups, aswell as referrals to groups to providetraining and placement.

Response: While we agree that thesebrokering services are valuableactivities, decisions about programdesign, including the selection ofoutreach, recruitment and referralactivities, are within the purview of theLocal Board, operating within Statepolicies. We expect that Local Boardswill consider a wide variety of servicesin designing their WIA programs. Weexpect CBO’s, as well as otherstakeholders, will be an integral part ofprogram planning and design decisionsthrough their membership on the LocalBoard, their provision of input throughthe public review process, and in many

cases as customer service providers.Accordingly, no change has been madeto the Final Rule.

Commenting on § 663.150, oneorganization remarked on theimportance of ensuring that individualsseeking assistance through core servicesbe provided with opportunities for self-service, facilitated self-help, and staff-assisted services.

Response: The service deliveryoptions cited by the commenter areactivities specified in the Wagner-PeyserAct regulations at 20 CFR 652.207, toensure universal access to Wagner-Peyser labor exchange services for jobseekers and employers. Althoughtechnically, these three levels of servicedo not apply to core services providedwith funds other than Wagner-Peyserfunds, practically, it makes sense tohave all three service levels available forall core services. Also, in order to bestserve the diverse needs of workforceinvestment customers, both job seekersand employers, multiple servicedelivery formats must be available. Stateand Local Plans are expected to addressWIA service delivery strategies. LocalPlans should ensure that the servicedelivery design reflects the needs of allcustomer groups in the mix of self-service, informational and staff-assistedcore services. Since the issue is coveredin the Wagner-Peyser regulations, nochange has been made to the Final Rule.

One commenter asked that theregulations provide a list of availablefollowup services which could beprovided to all adults and dislocatedworkers. The commenter also requestedthat the regulations ensure thatfollowup services are provided to allparticipants.

Response: The goal of follow-upservices is to ensure job retention, wagegains and career progress forparticipants who have been referred tounsubsidized employment. While we donot think it is necessary to specify ordefine followup services in § 663.150(b),to provide further guidance we discussan illustrative list of possible followupservices below. Followup services mustbe made available for a minimum of 12months following the first day ofemployment. While followup servicesmust be made available, not all of theadults and dislocated workers who areregistered and placed into unsubsidizedemployment will need or want suchservices. Also, as discussed above, theintensity of appropriate followupservices may vary among differentparticipants. Participants who havemultiple employment barriers andlimited work histories may be in needof significant followup services toensure long-term success in the labor



market. Other participants may identifyan area of weakness in the trainingprovided by WIA prior to placementthat will affect their ability to progressfurther in their occupation or to retaintheir employment. Therefore, we havechosen not to change the regulatorylanguage that such services must be‘‘made available’’.

Followup services could include, butare not limited to: additional careerplanning and counseling; contact withthe participant’s employer, includingassistance with work-related problemsthat may arise; peer support groups;information about additionaleducational opportunities, and referralto supportive services available in thecommunity. In determining the need forpost-placement services, there may alsobe a review of the participant’s need forsupportive services to meet theparticipant’s employment goals. Asprovided in § 663.815, financialassistance, such as needs-relatedpayments, for employed participants isnot an allowable follow-up servicesince, under WIA section 134(e)(3)(A),needs-related payments are restricted tounemployed persons who haveexhausted or do not qualify forunemployment compensation and whoneed the payments to participate intraining. We expect that the provision oftraining and supportive services afterentry into unsubsidized employment(‘‘post-placement’’) will be limited, andwill be part of the IEP, clearlydocumented in the participant case file.Such post-placement training andsupportive services may be providedconsistent with policies established bythe State or Local Board, anddetermined to be necessary on anindividual basis by the One Stoppartner.

Several commenters noted there is nouniform understanding of ‘‘assessment’’and that many One-Stop partners havedifferent ideas of what assessmentshould entail. Some comments alsoasked for examples or additionalguidance concerning best practices inthis area.

Response: The purpose of assessmentis to help individuals and program staffmake decisions about appropriateemployment goals and to developeffective service strategies for reachingthose goals. We strongly believe thatmeaningful service planning cannotoccur in the absence of effectiveassessment practices. We also believethere is no single correct approach toconducting assessment—it could beaccomplished through the use of anynumber of formalized instruments,through structured interviews, orthrough a combination of processes

developed at the local level. Further,assessments could be conducted by theOne-Stop operator, by a partner agency,or by an outside organization on acontract basis.

Clarifying language has been added tothe regulations at § 663.160 which statesthat initial assessment ‘‘providespreliminary information regarding theindividual’s skill levels, aptitudes,interests, (re)employability and otherneeds.’’ As a core service, the initialassessment is necessarily a brief,preliminary information gatheringprocess that, among other things, willprovide sufficient information about anindividual’s basic literacy andoccupational skill levels to enable theOne-Stop operator to make appropriatereferrals to services available throughthe One-Stop and partner programs.Comprehensive assessment, which is anintensive service, is a more detailedexamination of these issues and mayexplore any number of things relevant tothe development of a person’s IEP.These might include some combinationor all of the following: educationalattainment; employment history; morein-depth information about basicliteracy and occupational skill levels;interests; aptitudes; family and financialsituation; emotional and physicalhealth, including disabilities; attitudestoward work; motivation; andsupportive service needs. We expectthat all partner agencies in the One-Stop, under any applicable Statepolicies, will work to achieve consensuson the required components of theassessment system for the One-Stopsystem at any local level. In doing so,they should take into account anyspecial assessment needs that may beexperienced by individuals withdisabilities and other populations withmultiple barriers to employment. As weproceed with the implementation ofWIA we will consider gathering ‘‘bestpractices’’ on the delivery of assessmentservices to share with the system.

One commenter suggested addinglanguage to § 663.160 mandating thatassessment and service strategiesidentified in IEPs conducted by a non-WIA program, satisfy the conditions ofWIA, thereby making participantseligible for intensive and trainingservices under the Act.

Response: Because there aredifferences in the legal and programrequirements among the variousprograms that might provideassessments, we do not think we canrequire that all assessments from anysource be accepted as valid for WIA. Wedo, however, support efforts to createcommon intake systems and to sharedata across programs, thereby

eliminating duplication of effort forprogram staff or customers. We alsobelieve that assessments, evaluations,and service strategies developed bypartner agencies for individuals are theproduct of that agency’s uniqueexpertise, and, therefore, should begiven careful consideration. Weencourage Local Boards and partneragencies to develop MOU’s, withrequired and optional partners, thatprovide for procedures to ensure that,where appropriate, partner assessmentswill be accepted as valid for WIA, andWIA assessments will be accepted asvalid for partner programs. Of course, tobe acceptable, an assessment, from anysource, must provide the informationneeded by the One-Stop operator or thepartner program. Local Boards andpartner programs should work togetherto develop assessment tools that willserve all partner interests. If necessaryfor WIA purposes, the One-Stopoperator may choose to supplementassessment information provided fromanother agency. Given the limitedfunding available, it is important toavoid duplication of services. Nochanges have been made to the FinalRule in this section.

Subpart B—Intensive Services1. Intensive Services for Adults and

Dislocated Workers: Section 663.200discusses intensive services. It providesthat intensive services beyond thoselisted in the Act may also be provided.Out-of-area job search expenses,relocation expenses, internships, andwork experience are specificallymentioned to clarify that they are amongthe additional intensive services thatmay be provided. Intensive services areintended to identify obstacles toemployment through a comprehensiveassessment or individual employmentplan in order to determine specificservices needed, such as counseling andcareer planning, referrals to communityservices and, if appropriate, referrals totraining.

Several commenters supported§ 663.250 which provides that there isno minimum amount of time forindividuals to stay in core or intensiveservices, stating that this approachmaximizes local flexibility and ensuresthat each person’s needs are properlyaddressed. In general, the commentsreceived on subpart B related both toexpanding or limiting allowableintensive services, to listing specificpopulations as among those potentiallyeligible for intensive services, and toproposing definitions of ‘‘selfsufficiency.’’

We received several comments on thedefinition of intensive services at



§ 663.200(a). Two comments wantednearly all of the specific statutorylanguage illustrating intensive services,at WIA Section 134(d)(3)(C), reiteratedin this section. They also requested that‘‘orientation and mobility training forpersons with disabilities’’ be added tothe list of allowable intensive services.One commenter recommended addingto the list of intensive services ‘‘Englishas a Second Language (ESL), VocationalEducation integrated with ESL (VESL),Functional Context Education Programsthat integrate literacy or ESL and jobtraining.’’ Another commenter askedthat the Final Rule define literacy toinclude reading and math literacy.

Response: § 663.200(a) refers to theprovisions at WIA Section 134(d)(3)(C)on the types of intensive services. Thelist of services in this section is notintended to be all inclusive and may beexpanded by State Boards and LocalBoards based on, among other things,local conditions and the needs of thevarious populations within the localarea for such additional intensiveservices. Although the types of servicesrecommended by the commenters mayhave merit for certain populations andwould be permissible WIA-fundedintensive services, we believe that thedetermination of the specific types ofintensive services to be provided arematters for local decision-making andshould be an integral part of the Stateand Local Plan process. Clearly, weexpect State and Local Boards toconsider the needs of the localpopulation, including individuals withdisabilities and other special needspopulations, in the design and deliveryof services which respond to thoseneeds. It is also expected that concernedparties will have the opportunity tocontribute to the planning and design oflocal programs and services througheither representation on the State andLocal Workforce Investment Boards orthe open plan review and commentprocess.

On the suggestion of including ESL,VESL and Functional Context EducationPrograms that integrate literacy or ESLand job training as intensive services,we note that WIA section 134(d)(4)(D),which describes ‘‘Training services,’’specifically includes adult educationand literacy activities provided incombination with other job skillstraining. Such adult education andliteracy training activities, whencombined with a job may include ESL,and other needed educational servicesfor participants, including reading andmath literacy, as determined by LocalBoard policies, and the individualassessment. As indicated above, the listof intensive services is not all inclusive.

However, language skills independentof skills training would appear to be oflimited value in leading to(re)employability for individualswithout significant work histories andoccupational skills. We expect that basiclanguage skills will be provided as ashort-term prevocational service whenpart of an Individual Employment Planin which such activities are followed byadditional language skills training as a‘‘training service,’’ in accordance withprocedures established by the State orLocal Board. Such determinations arefor State and local decision-making. Nochange has been made in the Final Rule.

Several commenters expressedconcern about the inclusion, at§ 663.200(a), of internships and workexperiences as intensive services, ratherthan as training services. Somecommenters were concerned thatparticipants could be exploited inunpaid work experience andrecommended that we establish timelimits (e.g., not to exceed 90 days) forsuch activities, and emphasize thatlabor standards apply. One commenterthought that there may be a potentialconflict with Wage and Hour rules ifwork experience is in the private for-profit sector and unpaid. Othercommenters wanted to exclude workexperiences with private for-profitemployers, limiting it to public andprivate non-profit entities, and allowplacement with private for-profitemployers only for on-the-job training(OJT), because of the potential for abuseby employers that the commenterbelieves has occurred in the past.

A few commenters indicated thatsince internships and work experiencesare designed to impart specific skill andbehavioral competencies they should bedefined as ‘‘training’’ rather than‘‘intensive services.’’ One commentsuggested that, consistent with priorJTPA provisions, work experience underWIA should be only for thoseindividuals with no significant workhistory. Another comment asserted that,given the high cost of providing workexperience, participants could be bestserved by job readiness or some otherintensive service.

Two commenters indicated thatinternships and work experience mustbe measured through outcomes,including training-related placements,career ladders, and competencies. Oneof the commenters added that thesemust be paid activities. One commenterrecommended that the Final Rule makeclear that work experience could bewith a public sector employer,including a service or conservationcorps.

Response: We understand thecommenters’ general concerns regardinginternships and work experience,particularly unpaid work experience.We expect that work experience will bepaid in most cases and labor standardswill apply in any situation where anemployer/ employee relationship, asdefined by the Fair Labor Standards Act,exists. We have revised § 663.200(b) toclarify this policy.

We believe that the use of unpaidinternships and work experiencesshould be limited and based on aservice strategy identified in anIndividual Employment Plan, andcombined with other services. Weexpect that such activities will be oflimited duration, based on the needs ofthe individual participant. State andLocal Boards are responsible fordeveloping policies on the use, andduration, of both paid and unpaidinternships and work experiences as aservice strategy. Similarly, we expectthat, along with other activities, Stateand Local Boards will monitor andevaluate the effectiveness of intensiveservices, including internships andwork experience, in responding to theneeds of participants and the results onparticipant outcomes. While notminimizing the commenters’ concerns,there are good examples of localprograms using paid and unpaid workexperience which respond to the needsof participants, for example the School-to-Work Opportunities initiativeprovided many young people theexperience the needed to secure higherpaying, higher skilled employment.

On the issue of defining internshipsand work experience as ‘‘training’’rather than ‘‘intensive services,’’ webelieve that such services may respondto the needs of particular clients which,when combined with core servicesalready received and other intensiveservices, may result in positiveemployment outcomes without the needfor ‘‘training’’ services. For other clients,such experiences may prove beneficialin identifying the need for, and referralto, needed training services consistentwith the Individual Employment Plan.No change has been made in the FinalRule.

On the issue of limiting internshipsand work experience to the public andprivate non-profit sectors, we feel thatsuch a limitation would unnecessarilyrestrict the employment opportunitiesfor clients seeking services and, to adegree, limit customer choice since themajority of employment opportunitiesexist in the private for-profit sector.Nothing in the rule prevents LocalBoards from providing work experiencewith community service or conservation



service corps programs. No change hasbeen made to the Final Rule.

2. Delivery of Intensive Services: Wereceived a few comments on theprovisions in § 663.210 about howintensive services are to be delivered. Afew commenters wanted to revise§ 663.210(a) to address special needspopulations by adding at the end of thefirst sentence ‘‘, including specializedOne-Stop centers as authorized.,’’ and,in the second sentence inserting after‘‘service providers’’ and before ‘‘that’’—‘‘, which may include contracts withpublic, private for-profit, and privatenon-profit service providers, andincluding specialized service providers(i.e., community rehabilitation programsfor persons with disabilities).’’

Response: Section 134(c)(3) of the Actauthorizes specialized centers as part ofthe One-Stop service delivery system.Language has been added to § 663.210(a)in the Final Rule to clarify that intensiveservices may be provided through suchspecialized One-Stop centers. Section134(d)(3)(B)(ii) of the Act provides thatintensive services may be providedthrough contracts with serviceproviders, which may include contractswith public, private for-profit, andprivate non-profit entities approved bythe Local Board, and as noted, languagehas been added in the Final Rule at§ 663.210(a) to reflect the statutoryprovision on delivery of intensiveservices through contracts with serviceproviders, and have clarified that suchservice providers may includespecialized service providers. However,we have not added the parentheticalphrase related to communityrehabilitation programs.

One commenter felt that the FinalRule must make clear that intensiveservices cannot be provided throughindividual training accounts orvouchers.

Response: We believe that thestatutory and regulatory provisions aresufficiently clear on how WIA-fundedservices are delivered to participants.The Individual Training Account is atool for providing WIA title I fundedtraining services under section134(d)(4)(G). The requirements fordelivery of intensive services aredescribed at WIA section 134(d)(3)(B)and § 663.210. Consistent with ourpolicy of providing flexibility to Statesand local areas, we believe the methodof delivery of intensive services is amatter of State and local discretion,provided that the statutory andregulatory requirements are met.Therefore, no change has been made tothe Final Rule.

3. Participation in Intensive Services:Section 663.220 explains that intensive

services are provided to unemployedadults and dislocated workers who areunable to obtain employment throughcore services and require these servicesto obtain or retain employment, andemployed workers who need services toobtain or retain employment that leadsto self-sufficiency. Sections 663.240through § 663.250 specify that anindividual must receive at least oneintensive service, such as thedevelopment of an IndividualEmployment Plan with a case manageror individual counseling and careerplanning, before the individual mayreceive training services and that thereis no Federally required minimum timefor participation in intensive services.Each person in intensive servicesshould have a case management file,either hard copy, electronic or both.Section 663.240 explains that the casefile must contain a determination ofneed for training services, as identifiedthrough the intensive service received.

A number of commenters expressedconcern that § 663.220(a) describeseligibility for unemployed individualsas simply requiring that they are unableto obtain employment through coreservices while § 663.220(b) describesemployed and/or dislocated workers asin need of intensive services to obtainor retain employment that leads to self-sufficiency. Commenters felt thisappeared to set a double standard andconflicted with the provisions of TitlesII and IV of WIA which clearly tie self-sufficiency to employment in all cases.The commenters felt that theseprovisions might be interpreted to meanthat unemployed individuals may beput in jobs that do not lead to self-sufficiency. Commenters recommendedthat the Final Rule provide that Statesand Local Boards may set their ownstandards for employment, e.g., usingthe Self-Sufficiency Standard for all job-seekers.

Response: We agree that the ultimategoal for all employment, whether underWIA or any other program, should beself-sufficiency for the job seeker.However, that is different fromestablishing eligibility for adults anddislocated workers to receive intensiveservices under WIA. The eligibilitycriteria set forth in § 663.220 restates thestatutory definition established in WIAsection 134(d)(3)(A). The reference toemployment leading to self-sufficiencyappears only in WIA section134(d)(3)(A)(ii), governing the eligibilityof employed individuals to receiveintensive services. A determination thatan employed or dislocated worker is inneed of intensive services to obtain orretain employment that allows for self-sufficiency is one of the criteria for the

receipt of such services. Although thestatute establishes slightly differenteligibility criteria for unemployed andemployed adults and dislocated workersto receive intensive services, we do notbelieve that there is a direct conflictwith the provisions of WIA Titles II andIV concerning self-sufficiency as itrelates to Adult Education and LiteracyPrograms and Vocational RehabilitationPrograms, respectively.

While it is true that the difference ineligibility for intensive services forunemployed and employed adults anddislocated workers might be interpretedto mean that unemployed individualscan be put in jobs which do not lead toself-sufficiency, we want to make clearthat the eligibility criterion is a servicerequirement and not an employmentoutcome. Other provisions in WIApertaining to wage and benefitrequirements, which appear at WIAsection 181, labor standards, at WIAsection 181(b), employment in demandand growth occupations, at WIA section134(c)(4)(G)(iii), and employment injobs with upward mobility, at WIAsection 195(1), to cite a few, all enhanceopportunities for employment whichallows for self-sufficiency. Additionally,the performance standard measures, atWIA section 136(b)(2)(A), will also be aspur to placing, and retaining,participants in jobs with good, self-sufficient wages. As the eligibilitycriteria are statutory requirementswhich the Secretary does not haveauthority to change, no change has beenmade to the Final Rule.

We agree with the suggestion the Stateand Local Boards be allowed to set theirown standards for employment, usingthe self-sufficiency standard developedby the State or Local Boards for allemployment. There is nothing in theAct or Interim Final Rule that wouldpreclude such a policy as a goal forparticipant outcomes. Any such policymust meet the minimum requirementsin § 663.230 for defining self-sufficiency. While statutory languageprevents us from mandating such apolicy, we do strongly recommend it.No change has been made to the FinalRule.

One commenter suggested thatleaving it solely to the One-Stopoperator to determine who is in need ofmore intensive or training servicescould be problematic, particularly if theoperator is a for-profit entity whichcould financially benefit from limitingaccess to intensive and training services.

Response: WIA contains provisionswhich address this commenter’sconcerns. Section 121(d) of WIAprovides that the Local Board, with theagreement of the chief elected official



(CEO), is authorized to designate orcertify One-Stop operators and toterminate, for cause, the eligibility ofsuch operators. The eligibilityprovisions for One-Stop operators atWIA section 121(d)(2)(A) provide thatsuch operators must be designated orcertified through a competitive processor through an agreement between theLocal Board and a consortium of entitiesthat, at a minimum, must include threeor more of the One-Stop partnersdescribed at WIA section 121(b)(1). Inaddition, the One-Stop operators aresubject to the provisions of the localMemorandum of Understanding whichmust include, among other things,methods for referral of individualsbetween the One-Stop operator and theOne-Stop partners, for the appropriateservices and activities. Potentialproblem areas may also be identifiedthrough local program monitoring andoversight, requiring that action be takento correct identified deficiencies.Additionally, the regulations, at 20 CFR667.600, provide for the establishmentof local grievance procedures forhandling complaints and grievancesfrom participants and other interestedparties affected by the local workforceinvestment system, including anopportunity for local level appeal to theState. These and other provisions willhelp State and Local Boards ensure theintegrity of the new program.Accordingly, no change has been madeto the Final Rule.

We received a few comments about tothe sequencing of intensive and trainingservices at § 663.240.

One commenter supported therequirement that participants mustreceive at least one intensive servicesuch as development of individualemployment plan or individualcounseling and career planning beforereceiving training services. Anothercommenter wants an IndividualEmployment Plan to be required for anyworker seeking intensive or trainingservices.

Response: We agree that doing anIndividual Employment Plan forparticipants determined eligible forintensive services is a good idea, and werecommend that an IEP be developed forevery individual who uses intensive ortraining services. However, the Actprovides that the development of anIndividual Employment Plan is only oneof the intensive services that may beprovided to individuals determined tobe in need of such services; it is not acondition to receive that service.Accordingly, no change was made to theFinal Rule.

One commenter acknowledged thatthe One-Stop partners, the Local Board,

and the CEO must participate in thedevelopment of policies for eligibilitybeyond core services, but recommendedthat these policies must also beavailable for public review andcomment to assure fairness in theselection process.

Response: We agree with thecomment and believe that, although notspecifically required, such policiesshould be included in the Local Planand available for public review andcomment. While we cannot mandatetheir inclusion, we encourage LocalBoards to include such a policy in theirlocal workforce investment plandevelopment process. If such policiesare not included in the plan, theirdevelopment, as an activity of theBoard, is subject to the sunshineprovision at WIA section 117(e) andnew section 20 CFR 661.307. Thesunshine provision requires that theBoard make information about itsactivities publicly available throughopen meetings and minutes of meetings,on request. These requirements alsoprovide an opportunity for public inputinto Local Board plans and policies. Nochanges have been made to the FinalRule.

A few comments requested that a newsentence be added at the end§ 663.220(b) to read: ‘‘Persons withdisabilities and other special needspopulations may also qualify forintensive services.’’

Response: Eligibility for intensiveservices is open to all unemployedadults and dislocated workers and allemployed adults and dislocated workerswho meet the eligibility criteria and aredetermined to be in need of suchservices. To single out specificpopulations in the regulations wouldimply that there are different criteria forthose populations to receive intensiveservices, which is not the case.Individuals with disabilities and otherspecial needs populations may as easilyqualify for intensive services under theexisting eligibility criteria as any otherperson or group since the eligibilitycriteria are based on need for theservices. In addition, any barrier toemployment an individual may face(which may include a disability) shouldbe taken into account during the processof determining eligibility for intensiveservices. We believe that the existinglanguage adequately addresses thestatutory requirements, and is consistentwith the key principle to providemaximum flexibility to States and localareas, that additional proscriptivelanguage in regulations is not needed.

4. Self-sufficiency: Section 663.230,discusses how ‘‘self-sufficiency’’ shouldbe determined. WIA requires a

determination that employed adults anddislocated workers need intensive ortraining services to obtain or retainemployment that allows for self-sufficiency as a condition for providingthose services. Recognizing that thereare different local conditions thatshould be considered in thisdetermination, the regulation providesmaximum flexibility, requiring only thatself-sufficiency mean employment thatpays at least the lower living standardincome level. State Boards or LocalBoards are empowered to set the criteriafor determining whether employmentleads to self-sufficiency. Such factors asfamily size and local economicconditions may be included in thecriteria. It may often occur thatdislocated workers require a wagehigher than the lower living standardincome level to maintain self-sufficiency. Therefore, the Rule allowsself-sufficiency for a dislocated workerto be defined in relation to a percentageof the lay-off wage.

From our review of the commentsreceived on § 663.230, it appears thatthere is some confusion with respect tothe term ‘‘self-sufficiency’’ and how itapplies under WIA. A number ofcommenters are clearly under themistaken impression that the provisionsof §§ 663.220(b) and 663.230 treat‘‘employment leading to self-sufficiency’’ as a performance outcomemeasure under WIA, which is not thecase. The commenters raised the pointthat the manner in which self-sufficiency is defined could impactperformance outcomes if standards areset low in one area and higher inanother. If such measures will be usedin comparisons across State and locallines, setting higher standards foremployment that leads to self-sufficiency could negatively impact theoutcomes achieved by the local systemwith higher standards.

WIA section 136 establish the WIAperformance accountability system,including State and local performancemeasures intended to assess theeffectiveness of States and local areas inachieving continuous improvement ofWIA Title I–B funded workforceinvestment activities. Although the coreindicators of performance for WIA adultand dislocated worker activities look atoutcomes such as wage gain, jobretention and other factors indetermining successful performance ofthe programs; ‘‘self-sufficiency’’ is notone of the statutory core indicators.Section 663.230 is not intended toimply that this is the case.

Unlike predecessor employment andtraining programs, WIA opens upemployment and training services to



employed adults and dislocatedworkers. In doing so, the Act establishescertain criteria that employed workersmust meet in order to receive servicesbeyond core services. As indicated inour response to the comments receivedon the ‘‘Participation in Services’’sections, the use of the term ‘‘self-sufficiency’in § 663.220(b) only appliesin the context of establishing eligibilityfor employed adults and employeddislocated workers to receive intensiveservices under WIA. A determinationthat an employed adult or dislocatedworker is in need of intensive servicesto obtain or retain employment thatallows for self-sufficiency is one of thecriteria for the receipt of such services.This provision serves as a ‘‘limiter’’ indetermining service eligibility for suchemployed workers, which helps ensurethat intensive services are provided tothose employed adults or dislocatedworkers most-in-need of such services,such as individuals employed in lowskill/low wage jobs and dislocatedworkers who may be working but whohave not achieved the wage replacementrate for self-sufficiency defined by aState or Local Board for dislocatedworkers.

As indicated above, the regulations at§ 663.230 were developed with therecognition that the ‘‘self-sufficiency’’definition would vary from State-to-State, and even from area-to-area withina State. Therefore, the regulationsprovide that, for the purposes ofdetermining the eligibility of employedand dislocated workers for intensiveservices, State and Local Boards areresponsible for establishing the criteriafor determining whether employmentleads to self-sufficiency. Accordingly,the regulation provides maximumflexibility, requiring only that self-sufficiency mean employment that paysat least 100 percent of the lower livingstandard income level (LLSIL).

In general, the majority of thecomments received on § 663.230 dealtwith two areas: (1) recommendations onfactors that should be included indefining ‘‘self-sufficiency,’’ and (2) theneed for a more reliable measure of self-sufficiency than the LLSIL.

A few commenters asked why, sincethe LLSIL takes family size andeconomic conditions into account, therewas a need to require the use of otherfactors in determining self-sufficiency.The commenters also asked forclarification of the purpose of askingState and Local Boards to set additionalcriteria for self-sufficiency, as well asthe benefit to a local system.

Response: Under JTPA, the LLSIL wasused as one of the ceilings to measurewhether a participant was economically

disadvantaged. Service Delivery Areashad little discretion in setting localdefinitions different from the statutorydefinition. Under WIA, in contrast, theLLSIL is a floor to measure whether ajob leads to self-sufficiency and Statesand local areas have broad discretion toset a standard above that floor. ThePreamble to the Interim Final Ruleclearly indicates that factors such asfamily size and local economicconditions may be included in criteriadeveloped by a State or Local Board todefine self-sufficiency. The LLSIL alsoincludes, and is adjusted using, theseand other factors. In acknowledging thatconditions vary from place to place, wehave maintained maximum flexibilityby allowing States and Local Boards todetermine what self-sufficiency meansin their areas, which may include otherfactors not included in determining theLLSIL.

As indicated above, State and LocalBoards are responsible for determiningself-sufficiency and must developcriteria for making that determination.The reason for authorizing the State andLocal Boards to develop criteria formaking these determinations is thatState and Local Boards are best able tojudge such factors as the cost of livingin a local area and the wages availablein jobs in the local area. Thus, they arebest able to set a standard for self-sufficiency that meet the needs of theirlocal economy. The ‘‘benefit’’ to a localsystem is the flexibility provided todevelop such criteria, above theestablished floor of the LLSIL, so thatlocal conditions may be taken intoaccount. Therefore, no change has beenmade to the Final Rule.

A number of commenters stated thatsince the regulations use self-sufficiencyas a means to measure WIA success, itshould be defined in an individualizedway. Further, data collection systemsmust be able to account for higher livingexpenses experienced by persons withdisabilities in any determination of‘‘self-sufficiency’’. One commenteradded that Federal and State workincentives used by people withdisabilities should not be viewed as lackof self-sufficiency. Another commentersaid that self-sufficiency must alsoinclude measures for long-term successin the labor market.

One commenter noted that theregulations say that self-sufficiency foremployed dislocated workers may bedefined relative to a percentage of thelayoff wage, and suggested specifying inthe Final Rule that for displacedhomemakers, self-sufficiency may bedefined as a percentage of householdincome before displacement. Onecommenter indicated that the definition

for self-sufficiency must includediscrete measures for benefits,particularly health benefits. Also, thecommenter suggested that we provideguidance and technical assistance toState and Local Boards to help themdevelop measures of self-sufficiencythat are tied to family wage/benefitlevels needed to live in localcommunities.

Response: The regulations providethat State and Local Boards have theresponsibility for developing the criteriafor determining whether employmentleads to self-sufficiency. With theexception of establishing the minimumLLSIL requirement for such criteria, wehave refrained from establishing furthercriteria in the regulations to providemaximum flexibility to State and LocalBoards in developing such criteria. Thatflexibility includes tailoring definitionsof self sufficiency to meet factorspeculiar to an individual or group. TheState and Local Boards are in the bestposition to develop criteria whichreflect local economic conditions andother factors impacting on the financialneeds of the populations to be served,in defining self-sufficiency fordetermining eligibility for intensiveservices. Although the factors suggestedby the commenters may have merit, andserve as examples that Boards mightconsider, the development of suchcriteria is subject to local decision-making and should be explored at thatlevel. We do, however, expect State andLocal Boards to consider, among otherthings, the needs of individuals withdisabilities, and other special needspopulations with multiple barriers toemployment, in the development ofsuch criteria. We have modified§ 663.230 to reflect this expectation.

One commenter stated that theregulations must require Local Boards toconsult with organized labor andcommunity based organizations in thedevelopment of self-sufficiencymeasures, and wants the process forestablishing and updating self-sufficiency measures included in theplan as well as all plan modifications.

Response: Organized labor andcommunity-based organizations willparticipate in the development of self-sufficiency measures by virtue of theirrepresentation on State and LocalBoards, along with other representativesand local partners on the board. As withother policies and procedures notspecifically addressed in the Local Planrequirements at WIA section 118, webelieve that, although not specificallyrequired, such self-sufficiency policiesshould be included in the Local Planand available for public review andcomment. While we cannot mandate



inclusion, we encourage the LocalBoards to include such a policy in theirplan development process. If suchpolicies are not included in the plan,they are, their development, as anactivity of the Board, is subject to theSunshine Provision at WIA section117(e) and new section 20 CFR 661.307.

One commenter, while appreciativethat self-sufficiency as it relates tointensive services is set at the lowerliving standard income level, added thatresearch has shown that a ‘‘true’’standard for self-sufficiency should beeven higher, at 150 percent of the lowerliving standard. The commentconcluded that this level has a potentialfor setting a high bar for measuringsuccess under WIA—sending a signalthat the system has not succeeded whenindividuals end up in minimum wagejobs. The commenter urged that theregulations require that the Local Plansspell out how the local areas will defineself-sufficiency, so that it may be subjectto public comment and review. Anothercommenter felt that the LLSIL is not areliable measure of self-sufficiency, andrecommended that the Bureau of LaborStatistics (BLS) develop a new LLSILthat reflects the costs of self-sufficiencyfor today’s families, including the costof child care. Until such a measure isdeveloped it was recommend that theself-sufficiency floor be set at 150% ofthe LLSIL.

Response: As indicated earlier, ‘‘self-sufficiency’’ is an eligibility criterion forthe determination of need for intensiveservices for employed workers. Also, theregulations set the floor for self-sufficiency at employment that pay atleast 100 percent of the LLSIL. State andLocal Boards may adjust the levelupward in defining employment thatleads to self-sufficiency, based on,among other things, local conditionsand the needs of the populations to beserved. Our intent in drafting § 663.230was to give State and Local Boardsmaximum flexibility to define ‘‘self-sufficiency’’. As indicated above, weintended to use the LLSIL as a floorbelow which Boards cannot go in theirdefinition. We agree with thecommenters that there are goodarguments that the ‘‘real’’ measure ofself-sufficiency will be above the LLSILin most areas, sometimes significantlyabove it. We think that one of theimportant purposes of the workforceinvestment system is to help customersfind jobs that will support them andtheir families. We expect that State orlocal definitions will reflect this realityand this purpose. We do not, however,wish to constrain State and localdiscretion too far. Neither can wereasonably select a higher floor that we

can be sure will cover all of the varietyof economic conditions that exist in thisdiverse nation. Therefore, no change hasbeen made to the Final Rule.

One commenter wanted to know whataction we will take if the State Boardand the Local Board decide to setdifferent criteria for self-sufficiency andthey do not agree?

Response: It is entirely possible thatself-sufficiency measures developed bya State Board and a Local Board may, insome respects, differ depending uponlocal conditions and other factors thatmay not be present in other areas withinthe State. The regulations providemaximum flexibility to State and LocalBoards to address this issue. It is alsopossible that the State board mightestablish some general guidelines foruse by Local Boards in developing suchmeasures, with latitude for the LocalBoards to tailor the measures to theirlocal needs. However, since LocalBoards must comply with the Statepolicies, State Boards are encouraged toadopt policies that Local Boards canadapt. We do not anticipate that thiswill be a problem area, however, if itdoes become one, we are available toprovide technical assistance uponrequest.

One commenter felt that using theminimum requirement of the LLSIL willresult in various definitions for differentindividuals, depending on the size ofthe family, and suggested it is morereasonable to use a percentage of thearea’s average annual income.

Response: We agree that the LLSIL isbased on family size and will result indifferent income levels for individuals,depending on family size. The LLSIL isadjusted for regional, metropolitan,urban, and rural differences and familysize. The use of a single measure assuggested would be an insufficientmeasure of self-sufficiency because itwould exclude other factors that impacton such a determination, mostimportantly family size. We encourageState and Local Boards to adoptdefinitions which reasonably reflectslocal economic conditions and familyneeds, and made no change to the FinalRule.

One commenter would like thedefinition of low-income to be changedto 100 percent of LLSIL, rather than 70percent.

Response: The term ‘‘low incomeindividual’’ is statutorily defined atWIA section 101(25). We do not haveauthority to change this statutoryprovision. However, § 663.230 providesthat, at a minimum, self-sufficiency is atleast 100 percent of LLSIL fordetermining if employed adults anddislocated workers need intensive

services. No change has been made tothe Final Rule.

We received comments on thedefinition of an Individual EmploymentPlan at § 663.245. One commenterrecommended inserting, ‘‘includingsupport services’’ between the words‘‘appropriate combination of services’’and ‘‘for’’ in order to ensure that thepotential need for supportive services isdiscussed and that appropriateinformation, supportive services andreferrals for services are provided.Another commenter suggested replacingthe word ‘‘strategy’’ with ‘‘process’’ toconvey a more interactive modebetween case manager and client.

Response: Section 663.245, definingthe Individual Employment Plan,provides that these plans will identifythe appropriate combination of servicesfor the participants to achieve theiremployment goals. The ‘‘appropriatecombination of services’’ would, bydefinition, include supportive servicesif determined appropriate, based on theneed of the individual participant. Tosingle out a specific service in theregulations would imply that the serviceis a plan element in all cases, which isnot the necessarily the case. Adetermination on the need for services,and the appropriate service mix torespond to those needs, are made at thelocal level on a case-by-case basis. Onthe suggestion to replace ‘‘strategy’’ with‘‘process,’’ while not wanting to appearto quibble over the choice of words, wefeel that, in this case, the former is themore proactive word and conveys theidea of a well planned approach forindividual employment goals workedout in an interactive way by the casemanager and the participant, asenvisioned under WIA. No changeshave been made to the Final Rule.

One commenter felt that theemployment goals should includeearning a self-sufficiency wage. Statesshould be encouraged to pursueinnovative strategies to meet that goal,as provided for in the Act, includingaccess to training and employment innontraditional fields for women,entrepreneurship training and asset-building instruction and guidance.

Response: As indicated earlier, wethink that self-sufficient employment isan important goal for all employmentwhether under WIA or any otherprogram. The workforce investmentsystem contemplated under WIAencourages State and Local Boards todevelop innovative approaches in thedesign and delivery of services whichrespond to the needs of all job seekers,including those suggested by thecommenter. The Act, however, onlyrequires a determination that



employment leads to self-sufficiencywhen deciding whether an employedadult or dislocated worker is eligible forintensive or training services and we donot think we can require it as aprecondition to all employment.Therefore, no change has been made tothe Final Rule.

Some comments addressed § 663.250,which provides that there is nominimum length of time a participantmust spend in intensive services.

One commenter recommended that,even though § 663.250 places nominimum time limit for participation inintensive services before receivingtraining services, local One-Stopsystems be urged to provide sufficientintensive services to ensure thatindividuals are well prepared fortraining and long term employmentopportunities. Another commenter saidthat States and Local Boards must beprecluded from establishing minimumand maximum time periods forparticipation in intensive services.

Response: Section 663.250 recognizesthat the duration of intensive serviceswill vary among individual participants.State and Local Boards have theflexibility to develop policies on thedelivery of intensive services, whichmay include limits on the duration ofparticular services, depending on thetypes of services provided and the needsof the participant. We expect that thetime spent in intensive services will besufficient for the participant to receiveneeded services, consistent withemployment goals, and have modified§ 663.250 to reflect that expectation. Wehave not made a change in theregulations in response to the commentsuggesting we preclude States or LocalBoards from establishing minimum andmaximum time periods for participationin intensive services, since we want toensure State and local flexibility in thisimportant area.

A commenter recommended thatStates be required to establish measuresfor determining the ongoingeffectiveness of intensive services toassure that participants receive themaximum benefit.

Response: Under WIA sections 111and 117, State and Local Boards arerequired to monitor and evaluate theeffectiveness of the WIA program andwe expect this to include monitoring theeffectiveness of intensive services torespond to the needs of participants andto produce good participant outcomes.Additionally, the State, in accordancewith WIA section 136(e), must conductongoing evaluation studies of Statewidetitle I–B workforce investment activities.Such studies are intended to promote,establish, implement and utilize

methods for continuously improvingsuch activities in order to achieve high-level performance within, and high-level outcomes from, the statewideworkforce investment system. The Stateis required to periodically prepare andsubmit reports of the evaluation studiesto State and Local Boards to promoteefficiency and effectiveness of thestatewide system in improving theemployability for job seekers andcompetitiveness for employers. Wethink that these requirements meet theintent of the commenter’s request. Nochange has been made to the Final Rule.

Subpart C—Training Services1. Training Services: Training services

are discussed in §§ 663.300 and663.320. Training services are designedto equip individuals to enter theworkforce and retain employment.Under JTPA, a dislocated workerparticipating in training under title III ofJTPA is deemed to be in training withthe approval of the State UnemploymentCompensation Agency. With suchapproval, unemployment compensationcannot be denied to the individualsolely on the basis that the individual isnot available for work because he or sheis in training. Although there is nocomparable provision in WIA, this JTPAprovision will remain in effect duringthe transition period under theSecretary’s authority to guide thattransition from JTPA to WIA. We willseek an amendment adding similarlanguage to WIA which would deem alladults participating in training undertitle I of WIA to be in approved trainingfor the purposes of unemploymentcompensation qualification.

One commenter asked that we clarifyin the Final Rule that, under WIA,training may be provided to bothemployed and incumbent workers.

Response: While this statement is trueon its face, we believe there is confusionwithin the workforce developmentcommunity about the distinctionsbetween ‘‘employed’’ and ‘‘incumbent’’workers. The State Board defines theterm incumbent worker sinceincumbent worker training is anallowable statewide activity under WIAsection 134(a)(3)(A)(iv)(I). Funding forincumbent worker training must bedrawn from the State’s combined adult,youth, and dislocated worker ‘‘15-percent funds.’’ As provided at 20 CFR665.320(d)(2), the State may also use aportion of its dislocated worker ‘‘25-percent rapid response funds’’ to deviseand oversee strategies for incumbentworker training. These latter funds,however, may not be used to directlyfund the incumbent worker trainingitself. These individuals do not

necessarily have to meet the eligibilitycriteria for dislocated workers containedat section 101(9) of the Act nor do theyhave to meet the criteria for employedadults and dislocated workers underWIA section 134(d)(4)(A).

‘‘Employed’’ adults and dislocatedworkers may also receive trainingservices through the One-Stop systemunder WIA when certain conditions aremet. These individuals must meet thestatutory definition of an eligible adultor dislocated worker and, to receiveintensive services, and ultimatelytraining, an employed individual mustbe determined by a One-Stop operator tobe in need of such services to obtain orretain employment that leads to self-sufficiency. Funding for these activitiescomes from the ‘‘formula’’ fundsprovided to the Workforce InvestmentArea.

One commenter felt that, in order toprotect participants, any training servicethat a Local Board offers that is inaddition to those listed in the Act mustbe identified in the Local Plan so thatthere can be public review andcomment. Similarly, any additionaltraining services that are offered afterthe approval of the Local Plan must alsobe subject to public review andcomment.

Response: We agree with thecomment and believe that, although notspecifically required, the trainingservices that the Local Board intends tooffer should be included in the LocalPlan and available for public review andcomment. While inclusion is notmandated, we encourage the LocalBoards to include such information intheir plan development process. Thisallows the Local Board to communicateits vision and its proposed priorities inthe delivery of services, and ensuresthat all interested parties have anopportunity to review and comment onthose proposed policies. We also agreewith the comment that the plan shouldcontain policies concerning planmodifications, including a definition of‘‘substantive change,’’ and provide thatwhen such changes occur there shouldbe a similar process allowing for publicreview and comment. As indicated inearlier discussions on Local Planrequirements, if such policies are notincluded in the plan, they are, as anactivity of the Board, subject to thesunshine provision at WIA section117(e) and new § 661.307 and must bedeveloped in an open manner. Nochange has been made to the Final Rule.

Two commenters suggested that theregulations should list non-traditionaljob training, including entrepreneurialtraining, asset building, financialliteracy training, micro enterprise



development, and vocational English asa Second Language training, as well asother kinds of training services notspecifically listed in the Act.

Response: We support the provisionof a wide variety of training services foreligible customers of the workforcedevelopment system, including all thosementioned by the commenter. As notedin the regulations at § 663.300, the listof training services in the Act is not all-inclusive and additional services maybe provided. We believe that thislanguage provides State and LocalBoards the flexibility necessary to offertraining services appropriate to theirparticular needs, without prescribing tothe Local Boards what those servicesshould be. Accordingly, no change hasbeen made in the Final Rule.

2. Determining the Need for Training:Section 663.310 provides, among otherthings, that the One-Stop operator orpartner determines the need for trainingbased on an individual (1) meeting theeligibility requirements for intensiveservices; (2) being unable to obtain orretain employment through suchservices; and (3) being determined afteran interview, evaluation or assessmentto be in need of training. Section663.310 requires that, to receivetraining, an individual must select aprogram of services directly linked tooccupations in demand in the area,based on information provided by theOne-Stop operator or partner. Ifindividuals are willing to relocate, theymay receive training in occupations indemand in another area.

We received numerous commentsabout the impact of training eligibilitycriteria on individuals with disabilities.The commenters were concerned aboutthe requirement that eligible individualsmust be found to have the skills andqualifications to successfully participatein the selected program of trainingservices. Commenters felt that thiscould limit the opportunities availablefor disabled persons.

Response: While we are sensitive tothese concerns, we must point out thatthis criterion is taken directly from theAct at section 134(d)(4)(ii), and is,therefore, a required element for allOne-Stop operators making trainingeligibility decisions. This criterionapplies only to training funded by WIAtitle I and not to training funded byother WIA partners. We believe alltraining eligibility decisions should bemade on the basis of each individual’sskills, abilities, interests, and needs. Itwould, of course, be inappropriate toenroll any individual, whether or notthey are disabled, into training programsfor which they did not have the skillsto be successful. We also recognize that

care must be taken not to stereotypepersons with barriers to employment,including disabilities, when evaluatingtheir skills, abilities, interests, andneeds. Occasionally, some question mayarise as to whether a particularindividual—such as a person withdisabilities—has the capacity to besuccessful in a given training program,taking into consideration the availabilityof reasonable accommodation ormodification under 29 CFR 37.8. Anadvantage of the One-Stop servicedelivery structure is that partneragencies with specialized expertise willbe available, when necessary, to assistwith determinations as to what trainingmay fall within a particular individual’sskills and qualifications. We encourageOne-Stop operators and staff to takeadvantage of the unique expertise ofthese partners when serving individualswith special needs. We also note thatindividuals with a disability, or anyothers, who feel they have beenimproperly assessed by One-Stop staffregarding their skills and qualificationsmay appeal the decision using theappropriate local grievance orcomplaints procedures established inaccordance with WIA section 181(c) and20 CFR 667.700. No change has beenmade to the Final Rule. An individualwho feels that he or she has beendiscriminated against because of his orher disability may file a complaint inaccordance with procedures forprocessing discrimination complaints,as set forth in 29 CFR 37.70 through37.80.

One comment suggested that§ 663.310 was not sufficiently specificin linking training services tooccupations in demand, as required bythe Act.

Response: The language used in therule at § 663.310(c) is essentially thesame as that found in the Act atsection134(d)(4)(A)(iii). Section134(d)(4)(A)(iii), discussing eligibilityfor training uses the phrase ‘‘directlylinked to the employment opportunitiesin the local area or in anotherarea. . . .’’ In contrast, section134(d)(4)(G)(iii), dealing with ITA’s usesa slightly different phrase, ‘‘directlylinked to occupations that are indemand in the local area. . . .’’ Weassume that when Congress usesdifferent language, it means differentthings. In this case, we think that thedifferences in phrasing mean that aperson may be eligible to receivetraining if she/he seeks training in anoccupation in which there are jobsavailable in the local area or in anotherlocal area to which the person is willingto relocate. On the other hand, trainingmay not be financed through an ITA

unless the training sought is in anoccupation in demand in the local areaor in an area to which the participant iswilling to relocate. Thus, if a participantis found eligible for training because he/she seeks training in an occupation inwhich there are employmentopportunities available but which is notclassified by the local area as anoccupation in demand, the training canonly be provided if it can be arrangedthrough one of the three exceptions toITA’s. While it is possible thatindividual may not be able to receiveWIA-funded training because of thisdistinction, we think that there will notbe many cases where this occurs. Since§ 663.310 correctly reflects the statutorylanguage, no change has been made tothe Final rule. We do, however,encourage State and Local Boards toconsider a range of approaches foridentifying ‘‘employment opportunitiesin the local area,’’ including allowingparticipants to demonstrate employer-identified job opportunities.

We received a number of commentsabout the effects of the requirement thattraining programs selected must bedirectly linked to demand occupationsin the local area, or in another area towhich the individual is willing torelocate, on individual with disabilities.Commenters felt that this could restrictpersons with disabilities fromparticipating in the title I program andsuggested granting a waiver of therequirement in appropriate cases.

We think that the commenters’concerns about the occupations indemand requirement are misplaced. Asdiscussed above, the requirement fortraining eligibility is that the trainingmust be linked to an employmentopportunity available in the localcommunity or in a place to which theparticipant is willing to relocate. Thephrase on which the commenters focus,the occupations in demand requirement,is an eligibility condition for receipt ofan ITA. Thus, a participant may beeligible for and receive training in anyoccupation (job) that is available to theparticipant. If the job is not in anoccupation in demand, the participantmay not be able to have the trainingfunded through an ITA, but may stillreceive the training through one of theexceptions to ITA’s, for example,through contracted training provided bya CBO with demonstrated effectivenessin serving populations with specialneeds. No change has been made to theregulations.

There were several other more generalcomments about the criteria governingtraining eligibility. One commenterurged that training services be linkedwith employment opportunities in high



wage/high skill demand occupationsthat provide career and upgradeopportunities.

Response: We agree that this is aworthy goal, and one which promotesemployment opportunities leading toeconomic self-sufficiency. However, inorder to ensure that State and LocalBoards retain maximum flexibility toestablish training policies that best meettheir unique needs and circumstances,we have refrained from includingadditional regulatory requirements. Theregulations do contain other provisionsthat impact on this issue. Theprovisions on performanceaccountability, at 20 CFR 666.100,include measures on, among otherthings, job retention, wage gains andcredentialing which may serve as anincentive to stress training in high wageand high skill demand occupations. Nochange has been made in the Final Rule.

Similarly, another comment suggestedthat § 663.310(c) be modified to clarifythat training should only be foremployment opportunities ‘‘thatprovide a self-sufficiency wage.’’ Weagree, in concept, that the ultimate goalfor all employment, whether under WIAor any other program, should be self-sufficiency for the job seeker. We expectthat State and Local Boards willconsider a wide range of issuesincluding training for jobs that allowparticipants the opportunity to attainself-sufficiency. Section 663.310, aswritten, is essentially a recitation of theAct’s training eligibility provisions. Nochange has been made to the Final Rule.

One comment suggested that the One-Stop partners, the Local Board, and thechief elected official must participate inthe development of training eligibilitypolicies, and that those policies mustalso be made available for public reviewand comment to assure fairness in theselection process.

Response: We agree that the LocalBoard, which must includerepresentatives of the One-Stop partneragencies, is the entity responsible formaking policy at the local level. We alsobelieve that, although not specificallyrequired, such policies should beincluded in the Local Plan and availablefor public review and comment. Weencourage the Local Boards to includesuch a policy in their plan developmentprocess. If such policies are notincluded in the plan, their development,as an activity of the Board, is subject tothe sunshine provision at WIA section117(e) and new section 20 CFR 661.307.No change has been made to the FinalRule.

Another commenter suggested thatTitle I of the Act ‘‘radically’’ and‘‘bureaucratically’’ restricts access to job

skills training, and believed that theregulations require unemployedindividuals to accept any job available,regardless of whether that job enablesthe participant to rise above the povertylevel or not.

Response: We strongly disagree thatthe regulations require the resultsuggested by the commenter. The intentis not to require unemployedindividuals to accept just any job. As wehave stated above, in responding tocomments on eligibility for intensiveservices, the different eligibility criteriafor unemployed adults or dislocatedworkers should in no way be construedto allow participants to be placed in jobsthat do not provide the opportunity forparticipants to attain self-sufficiency.The regulations clearly state there are nofederally imposed minimum waitingperiods before participants can progressto the next tier of services. Neither isthere a federally imposed minimumnumber of failed job searches todemonstrate eligibility for the next tierof services. Rather, the regulationsreflect our position that decisionsregarding which services to provide,and the timing of their delivery, are bestmade on a case-by-case basis at the locallevel. Finally, we again note that neitherthe Act nor the federal regulationsmandate a ‘‘work first’’ system thatforces individuals into the first-availableemployment, regardless of whether ornot that employment leads to self-sufficiency. No change has been made tothe Final Rule.

3. Requirements When Other GrantAssistance is Available to Participants:Section 663.320 implements therequirements of WIA section134(d)(4)(B), which limit the use of WIAfunds for training services to instanceswhen there is no or insufficient grantassistance from other sources availableto pay for those costs. The statutespecifically requires that funds not beused to pay for the costs of trainingwhen Pell Grant funds or grantassistance from other sources areavailable to pay those costs. Section663.320 is intended to give effect to thisWIA requirement and still give effect totitle IV of the Higher Education Act(HEA), as amended (20 U.S.C. 1087uu),which prohibits taking into accounteither a Pell Grant or other Federalstudent financial assistance whendetermining an individual’s eligibilityfor, or the amount of, any other Federalfunding assistance program.

Section 134(d)(4)(B) of WIA requiresthe coordination of training costs withfunds available under other Federalprograms. To avoid duplicate paymentof costs when an individual is eligiblefor both WIA and other assistance,

including a Pell Grant, § 663.320(b)requires that program operators andtraining providers coordinate byentering into arrangements with theentities administering the alternatesources of funds, including eligibleproviders administering Pell Grants.These entities should consider allavailable sources of funds, excludingloans, in determining an individual’soverall need for WIA funds. The exactmix of funds should be determinedbased on the availability of funding foreither training costs or supportiveservices, with the goal of ensuring thatthe costs of the training program theparticipant selects are fully paid andthat necessary supportive services areavailable so that the training can becompleted successfully. Thisdetermination should focus on theneeds of the participant; simplyreducing the amount of WIA funds bythe amount of Pell Grant funds is notpermitted. Participation in a trainingprogram funded under WIA may not beconditioned on applying for or using aloan to help finance training costs.

With such coordination andarrangements, the WIA counselor islikely to know the amount of WIA fundsavailable to the WIA participant whencalculating the amount of financialassistance needed for the participant tocomplete the training programsuccessfully. The WIA counselor needsto work with the WIA participant tocalculate the total funding resourcesavailable as well as to assess the full‘‘education and education related costs’’(training and supportive services costs)incurred if the participant is to completethe chosen program. This also ensuresboth that duplicate payments of trainingcosts are not made and that the amountof WIA funded training is not reducedby the amount of Federal studentfinancial assistance in violation of 20U.S.C. 1087uu.

It is important to note that the PellGrant is not school-based; rather, it is aportable grant for which preliminaryeligibility can, and should, bedetermined before the participantenrolls in a particular school or trainingprogram. The Free Application forStudent Aid (FASA), which is used toestablish Pell Grant eligibility, shouldbe readily available at all One-Stopcenters for assistance in the completionof these ‘‘gateway’’ financial aidapplications.

Section 663.320(c) implements therequirements of WIA section134(d)(4)(B)(ii). This section permits aWIA participant to enroll in a trainingprogram with WIA funds while anapplication for Pell Grant funds ispending, but requires that the local



workforce investment area bereimbursed for the amount of the PellGrant used for training if the applicationis approved. Since Pell Grants areintended to provide for both tuition andother education-related costs, the Rulealso clarifies that only the portionprovided for tuition is subject toreimbursement.

In the limited cases where contractsare used rather than ITA’s, the contractsnegotiated by the One-Stop center mustprohibit training institutions ororganizations from holding the studentliable for outstanding charges.Otherwise, the performance agreementswould be undercut because theincentive for the institution ororganization to perform would beremoved. Also, the practice ofwithholding Pell Grants from students isprohibited by the U.S. Department ofEducation.

We received a few comments on PellGrant issues. One commenter stated thatWIA section 134(d)(4)(B) does notrequire disbursement from that portionof Pell paid to WIA participants foreducation-related expenses. Thecommenter recommended that, althoughthe issue was discussed in the preambleto the Interim Final Rule, the ruleshould be modified to state that thetraining provider must reimburse onlyfor ‘‘tuition portion’’ of the Pell grant.The commenter also raised the issue ofthe need for reimbursementarrangements for WIA funds used to‘‘underwrite the training’’ with trainingprovider while Pell funding is pending.The commenter also requestedclarification on whether tuition costsinclude or exclude specifically requiredfees for lab, supplies and other fees.Another commenter noted that theregulations appear to assign the One-Stop operator the responsibility formaking arrangements with trainingproviders to process reimbursementswhen WIA participants enroll intraining while their application for aPell Grant is pending. This precludesthe other One-Stop partners from havingthis responsibility. The commenterrecommended that we replace allreferences in the regulations that assignspecific responsibilities to the One-Stopoperator with language that allows forflexibility.

Response: We will continue to workwith the U.S. Department of Educationto address the coordination of Pell grantassistance with WIA title I fundedtraining assistance. We will provideadditional guidance to the WIAWorkforce Development System throughadministrative issuance. We are alsopursuing a legislative amendment tomake clear the order of payment for

training costs for individuals eligible forboth WIA activities and Pell Granteducational assistance. In the meantime,we have adopted the changes suggestedby the commenters.

Subpart D—Individual TrainingAccounts

1. Definition of an Individual TrainingAccount: Sections 663.400 through663.430 contain information aboutIndividual Training Accounts (ITA’s). Akey reform tenet of the WorkforceInvestment Act is that adults anddislocated workers who have beendetermined to need training may accesstraining with an Individual TrainingAccount which enables them to chooseamong available training providers, thusbringing market forces into federallyfunded training programs. Section663.410 provides a definition for an ITAthat seeks to provide maximumflexibility to State and local programoperators in managing ITA’s. Theseregulations do not establish theprocedures for making payments,restrictions on the duration or amounts,or policies regarding exceptions to thelimits of the ITA, rather they providethat authority to the State or LocalBoards.

One commenter felt that theaccountability requirements in the Actand regulations deny States and LocalBoards the flexibility needed to ensurethat individuals have enough financialpower over their use of ITA’s, butbelieves that this is a necessary result ofthe accountability requirements of theAct and regulations. The commentersuggested that, to accomplish thedesired flexibility, Congress and theDepartment must lower performanceand accountability expectations.

Response: We believe theperformance and accountabilityexpectations of the Act must bebalanced against the flexibility providedto the State and Local Boards to designtheir ITA programs. The performanceand cost information that trainingproviders must submit to be identifiedas an eligible provider of trainingservices under WIA section 122,combined with the negotiated local areaperformance measures, are essential forensuring high quality individual andprogram-wide outcomes. Within thisstructure, we have attempted to giveState and Local Boards the maximumpossible discretion to develop ITAprograms. No change has been made tothe Final Rule.

Procedures for making payments—State and Local Boards have theauthority to establish procedures formaking payments for ITA’s fundedunder WIA section 134(d)(4)(g) and

§ 663.410. There were a number ofcomments about the nature of paymentsto training providers under ITA’s. Twocommenters suggested that theregulations explicitly state thatpayments to community colleges for atraining program or program segmentmust be made under the same terms thatthe colleges require of other students,rather than incrementally. Othercommenters supported the currentlanguage in § 663.410 that offers theflexibility for incremental payments totraining providers.

Response: We generally agree that thenormal form and manner of tuitionpayments to community colleges shouldnot change as the result of the use ofITA’s. At the same time, we do not wantto prohibit Local Boards from adoptingmethods that tie payments tocontractually agreed upon benchmarksthat can benefit both participants andtraining providers, and support theachievement of performance measures.No change has been made to theregulations.

One commenter, which favoredretention of the regulatory languageauthorizing interim payments, seemedto believe that such a paymentmethodology would also apply to thesupportive services that an ITAparticipant might be receiving.

Response: We do not read theregulations to require that when a Boardchooses to make incremental paymentsfor training, it is under an obligation topay for other associated services in thatsame manner.

Another commenter recommendedthat the regulations require an ITApayment system that incorporatesindependent verification proceduresthat will ensure that the trainingprovider has measured and certified thetraining received. That same commenteralso suggested we establish a paymentsystem that is efficient and easy to usewhile providing the strongest fiscalcontrols to prevent abuse.

Response: We have chosen not toimpose a particular payment proceduresbut we note that the process ofidentifying eligible training providers inand of itself helps to ensure qualitytraining. We also encourage LocalBoards to adopt other practices thatpromote quality training, such asdocumentation by the training providerof the delivery of training or theparticipant’s achievement of agreedupon benchmarks or outcomes, on-siteand desk reviews of the trainingprovider and regular contact with theparticipant. We also agree that paymentsystems should be designed to ensurestrong fiscal accountability and to



prevent fraud and abuse. No change hasbeen made to the Final Rule.

Role of the case manager—WIAsection 134(d)(4)(A)(ii) provides thatone of the eligibility criteria for adultsand dislocated workers to receivetraining services is that, after aninterview, evaluation, or assessment andcase management, the participant hasbeen determined by a One-Stop operatorto be in need of training services and tohave the skills and qualifications tosuccessfully participate in the selectedprogram of training services.Commenters supported the role that isdescribed for case managers in§ 663.410, that is, assisting theparticipant to select the eligibleprovider from which to purchasetraining. One of these commentersfurther suggested that we emphasize theneed for skilled, professional casemanagers while another pointed out thatdemonstration studies on the use ofvouchers have found that skill,professional case management was thekey factor in determining theeffectiveness of vouchers

Response: We acknowledge thecritical role of case managers and urge,where necessary, States and/or localareas to arrange quickly for staff trainingto ensure case managers have theunderstanding and knowledge to carryout this role effectively. We believe,however, that prescribing the role ofcase managers in the regulations isinconsistent with our principle that theregulations should permit State andLocal Boards the maximum possibleflexibility. The regulations have notbeen changed.

National data collection andevaluation of the new ITA system: Therewere also comments urging us to collectinformation on the actual costs oftraining and to conduct evaluations ofthe relationship between training andjob placement, as well as therelationship between the amount andduration of ITA’s and the success ofworkers in securing jobs that provideself-sufficiency. Additionally, thecommenter asked us to establish asystem to collect information onoutcomes for ITA’s including therelationship of training to jobplacement.

Response: We believe that bothevaluations and analyses of JTPA SPIRdata have already demonstrated thestrong relationship between training,including training durations, andoutcomes. The evaluations that will beconducted of current ITAdemonstrations will further examine theissues raised by the commenters. Also,WIA section 136(d)(2)(A) requires Statesto report on entry into unsubsidized

employment that is related to thetraining provided to participants, andsection 136(d)(2)(C) requires States toreport the cost of workforce investmentactivities (which include training)relative to the effect of the activities onthe performance of participants, to theDepartment as part of their annualreport. We encourage State and LocalBoards, as part of their ongoingresponsibility to manage performance,to examine those same issues. Inaddition, we will continue to providetechnical assistance regarding variousprogram design issues and theimplications and potential unintendedconsequences that must be consideredin making ITA policy decisions. Nochange has been made to the Final Rule.

Two other commenters suggested thatthe regulations authorize the use ofITA’s to pay the full cost of customizedtraining programs in which tuition isnot otherwise charged.

Response: The Act specificallyidentifies customized training as anexception to ITA’s. In general,customized training is provided basedon a specific training curriculum‘‘customized’’ to the particular workerskill needs of a specific employer orgroup of employers. While participantsmay choose to participate in suchtraining, there is no provision forcustomer choice among trainingproviders, rather there is a singletraining provider who has been selectedto ‘‘customize’’ the training. Becausethere is no customer choice on the partof the participant, ITA’s are not anappropriate mechanism for customizedtraining. On the separate issue of the useof WIA funds to pay for the full cost ofcustomized training, we are constrainedby section 101(8)(C) of the Act, whichrequires the employer to pay not lessthan 50 percent of the cost of thetraining. No change has been made tothe Final Rule.

2. Limitations on the amount andduration of ITA’s: A number ofcommenters raised concerns about thepolicies that State and Local Boardsmight establish with respect to a dollarand/or duration limitation for ITA’s.Section 663.420 provides guidance forState and Local Boards in their policydecisions to impose amount or durationlimits on ITA’s. In general, although theregulations allow limits, we expect thatthe limits will be realistic and willneither preclude people from getting thetraining that they need nor providersfrom participating in the system. Insetting limits, State and Local Boardsneed to consider the factors describedabove to be sure that the limits are nottoo restrictive.

A commenter recommended that thelimits on ITA’s be as flexible as possibleto allow workers to invest in trainingthat will lead to a living wage and long-term self sufficiency and a second urgedState and Local Boards to consider theneeds of different populations in settinglimits.

Response: Section 663.420(b)(1)allows State and Local Boards toestablish limits based on a participant’sneeds, which should include the needfor a job that leads to self-sufficiency. Inaddition, § 663.420(b)(2) allows State orLocal Boards to set a range of limits, anoption which Boards may choose whenconsidering the varying needs ofdifferent population groups. These twooptions provide considerable flexibilityto the Local Board to support a policythat provides for variations in thefunding of ITA’s. Thus, particularoccupational training that leads to self-sufficiency, or furthers other goals of theworkforce investment, could be set atdifferent dollar limits. Similarly, LocalBoards could seek to ensure a largenumber of providers of entry level skillstraining are available to aid participantsin avoiding transportation costs andlong commutes during training. Whilewe agree with the comment, and do notwant limits of amount of duration topreclude people from getting thetraining they need or training providersfrom participating in the system, inorder to preserve State and localflexibility, no change has been made tothe regulations.

To ensure that State and Local Boardare able to make informed decisionsabout how effectively differentpopulations can be served under an ITAsystem, commenters recommended thatwe encourage State and Local Boards togather data from training providers andother stakeholders on the actual costs ofand time needed for training. Onecommenter focused this concern onlow-income unemployed individuals.The commenter asked that we includeaffirmative examples to States and LocalBoards in regulations or in guidance toensure that such limitations do notimpede the success of intervention.Other commenters suggested that thereis evidence that previously establishedlimits have been too restrictive toeffectively serve low incomepopulations.

Response: We believe that isimportant for the eligible trainingprovider list to include sufficientnumbers of training providers to ensurethat customer choice is a reality. Thismeans that State and Local Boards mustdevelop ITA policies that ensure themarketplace can operate and that anumber of training providers across a



wide variety of occupations will believeit is in their best interests to apply tobecome an eligible provider. If thenumber of training providers seeking tobe included on the eligible provider listis sufficient to ensure healthycompetition, then the need for extensivecost analysis may be eliminated. Nochange has been made to the Final Rule.

We have begun to develop additionalinformation about ITA’s, includinginformation drawn from a new ITAdemonstration that will explore anumber of approaches to theadministration of ITA’s and provide alaboratory for stakeholders and localoperators to visit and observe. We willuse this information to provideguidance to the system throughconference workshops.

Numerous comments concerned§ 663.420, which gives the State or LocalBoard the authority to establish limitson the dollar amount and the durationof an ITA. Several commenters wereconcerned that cost and durationlimitations on ITA’s will limit customerchoice. They were especially concernedthat cost limitations would be set toolow to provide a range of eligibletraining providers from which tochoose. The commenters voiced concernthat the cost limitations could be set atamounts less than the actual cost oftraining services. They requested thatwe provide regulations or guidance toensure that ITA administration does notbecome a limiting factor in serving jobseekers. Similarly, many commentersfelt that limits on the amount andduration of an ITA conflicted with TitleI of the Rehabilitation Act and limitsinformed choice of individuals withdisabilities.

Response: We are also concerned thatthe dollar and duration limitationscould have the potential for limitingcustomer choice. Consequently,§ 663.420(c) provides that theselimitations should be implemented in amanner that maximizes customerchoice. We emphasize that any limitsestablished by a State or Local Boardapply only to training under Title I ofWIA, not to training under Title I of theRehabilitation Act. We also note that,under WIA, access to training or anyother services is not an entitlement.Local Boards must exercise discretion inestablishing ITA’s for eligibleparticipants. The regulations at§ 663.420(b) permit State and LocalBoards to establish ITA limitations in anumber of different ways and providessubstantial discretion to allow for othercircumstances such as the availability ofother funding, the contribution suchtraining would make to the overallworkforce skill needs of the community,

or the needs of the individualparticipant to be taken intoconsideration.

We have added language to§ 663.420(c) to clarify that any ITAlimitations that are established mayprovide for exceptions to the limitationsin individual cases. We believe thatmore effective programs will includethis type of flexible limitation policies,so that individuals are not excludedfrom training solely because of an ITAlimitation. In establishing guidance orlimits on training funding, a number offactors may be taken into consideration,such as the skill shortages identified bylocal employers, the costs of training toaddress these occupations in demand,and the training needs and interests ofthe participants. The availability ofother funding resources should also beconsidered in the development of thetraining portion of the IndividualDevelopment Plan, includingRehabilitation Act funds, TANF, PellGrants, and other Federal and Statefunding. Coordination and cost sharingbetween Local Boards andRehabilitation Act grantees as well asother partners with training funds is amatter for local negotiation andinclusion in the MOU. 20 CFR part 662contains a detailed discussion of MOUs.

DOL’s WIA title I performanceaccountability specifications do notmeasure cost per participant, therefore,the setting of cost limitations for ITA’swill not have an impact on theperformance accountability system. Thedecision to establish cost and durationlimitations should be made after fullyconsidering their benefits to the overallworkforce system and their effects onindividuals and populations in need oftraining. In making such decisions, Stateand Local Boards should consider allpublic costs, not simply available WIAfunds, the value of such training incontributing to the competitiveness oflocal businesses that may be ‘‘at risk’’ ormay be expanding and other economicdevelopment benefits.

One commenter suggested that thelanguage in § 663.420(a) which gives theState or Local Board responsibility forestablishing dollar and duration limitsbe revised to give the Local Board thesole responsibility.

Response: State and Local Boardsboth play an important role in the ITA/eligible training provider systems. LocalBoards have an important familiaritywith the local labor market and localtraining providers, while the State playsan important leadership role in theestablishment of the workforceinvestment system as a whole—including the ITA/eligible training

provider system. As a result, no changehas been made to the Final Rule.

One commenter asked howdisagreements between a State andLocal Board over the establishment oflimits to ITA’s would be resolved.

Response: The State Board’s limitswould prevail in such a case. State orLocal Boards should consider the rangeof costs and types of training in demandby employers throughout the State insetting limits. Policies concerningspending limits on ITA’s should notunduly exclude eligible providers orunduly limit customers’ training optionsin any geographical area of the State.Any cost limits established by State orLocal Boards apply only to WIA funds,and not to the total cost of training.Where the cost of the desired trainingexceeds the established State or LocalBoard limit for ITA’s, an eligibleparticipant should still be able to accessWIA ITA funds, when the WIA trainingfunds will be supplemented with fundsfrom other sources—such as Pell Grants,scholarships, severance pay and othersources. Section § 663.420 has beenchanged by adding a new paragraph (d)to reflect the ability of participants toaccess ITA funds when the ITA fundswill not pay the full cost of training.This approach is supported by§ 663.310(d) which provides thattraining services may be made availableto employed and unemployed adultsand dislocated workers who are unableto obtain sufficient grant assistance fromother sources to pay the cost of trainingand require WIA assistance in additionto other sources of assistance.

Although discussing limits to ITA’s,one commenter suggested that State andLocal Boards be required to establishcriteria and written policies governingaccess to and the distribution of ITA’sand that the process for developingthese policies be required to includeconsultation with appropriate labororganizations. Further, the commentersuggested that such policies be availableto the interested parties, the generalpublic and all individuals servedthrough the One-Stop system.

Response: The State is required, in 20CFR 661.220(d), to provide anopportunity for public comment on andinput into the development of the stateplan prior to its submission. Therequired opportunity for publiccomment requires that representativesof labor organizations, as well asrepresentatives of business and chiefelected officials be afforded theopportunity to comment. Similarly,§ 661.345(b)(2) requires that the LocalBoard provide an opportunity for publiccomment on and input to thedevelopment of the local workforce



investment plan, prior to its submission,be provided to representatives of labororganizations and business. WIA section117(e) also requires the Local Board toprovide information to the public onLocal Board activity.

We believe that access to anddistribution of ITA’s is based broadly onthe Local Board’s policy decision aboutthe amount of funding to be devoted totraining services and, more narrowly, onindividual participants’ need fortraining and their eligibility for it. Westrongly encourage Local Boards toconsult with a variety of organizations,including organized labor, when makingpolicy decisions concerning ITA’s. Nochange has been made to the Final Rule.

A commenter recommended that weshould include a prohibition ondiscrimination on the basis of unionaffiliation in the selection of trainingprograms.

Response: We believe that WIAsection 122 and Subpart E of part 663,which provides further directionregarding eligible training providers,establish sufficiently objectiveprocedures to ensure againstdiscrimination in the selection oftraining offered either by unions or byemployer organizations. No change hasbeen made to the Final Rule.

Another commenter requestedauthority for training providers to rejectstudents with ITA’s where they thinkthe student will not succeed in, orbenefit by, the program.

Response: There is no requirementthat eligible training providers mustaccept any participant who seeks toenroll under the local workforceinvestment area’s ITA program. Further,we are not limiting an eligible trainingprovider’s ability to set entrance criteriaor screening tests to determine that theparticipant is likely to success in theparticular training curriculum. Webelieve that the intensive servicesprovided to a participant, especiallyassessment and career counseling inconsultation with the case manger indeveloping a realistic IndividualEmployment Plan, combined withcustomer-oriented information oneligible training providers that reflectsthe entrance criteria for the desiredtraining curriculum, will be critical tothe participant’s selection of appropriatetraining in which they can achievesuccess and ultimately, job placement.No change has been made to theregulations.

3. Exceptions to ITA’s: The Act, at§ 134(d)(4)(G)(ii), and the regulations at§ 663.430, provide that, under certainlimited circumstances, contracts fortraining rather than ITA’s may be used.Specifically, on-the-job training

contracts with employers andcustomized training contracts areauthorized. Contracts may also be usedwhen there is an insufficient number ofeligible providers in a local area. Thisexception applies primarily to ruralareas. The exceptions to ITA’s are to beused infrequently. The Act reforms thelocal service delivery system byeliminating the current practice ofassigning participants to contractedtraining services and insteadestablishing a system that maximizescustomer choice in the selection oftraining providers. When the LocalBoard determines there are aninsufficient number of eligible providersin the local area to accomplish thepurposes of a system of ITA’s, andintends to use contracts for services,there must be at least a 30 day publiccomment period for interestedproviders.

Contracts for Special Populations—Section 663.430(b) also authorizescontracts for training when the LocalBoard determines that there are specialpopulations that face multiple barriersto employment and that there is atraining services program ofdemonstrated effectiveness offered byan eligible provider. Section663.430(a)(3) explains that an eligibleprovider in this case is a communitybased organization (CBO) or otherprivate organization. We have receivedmany suggestions about this exceptionand the extent to which it may be used.

Response: Generally, it is our positionthat this exception is intended to meetspecial needs and should be usedinfrequently. Those training providersoperating under the ITA exceptions stillmust qualify as eligible providers, asrequired at § 663.505. We believe thateffective eligible training providers,including CBO’s and other trainingproviders, can and will compete forindividual training accounts and thatproviders should view the use of ITA’sas an opportunity to expand theircustomer base.

Numerous comments recommendedthat the list of special participantpopulations be expanded to includeindividuals with disabilities whorequire multiple services over extendedperiods of time. Other commentersrecommended that the list also beexpanded to include older individualsor low income older individuals. Twocommenters disagreed, in part, with therecommendation that individuals withdisabilities be included as a specialparticipant populations. They made thepoint that such individuals should notbe automatically perceived as a specialparticipant population and excludedfrom benefitting from ITA’s.

Response: The Act does notspecifically list any of these populationsin section 134(d)(4)(F)(iv). The Act and§ 663.430(b) do, however, list as one ofthe four special participant populationsdefined in the Act ‘‘Other hard-to-servepopulations as defined by the Governorinvolved.’’ As a result, Governors havethe authority to add additional groups,such as individuals with disabilities, tothe list contained in the statute. Otherprovisions that assure that persons withdisabilities will have full and fair accessto WIA services. For example, section188(a)(2) provides that no individualshall be excluded from or deniedbenefits under any WIA title I programor activity on the basis of disability.Regulations implementing thisprovision are found at 29 CFR part 37.In addition, section 112(b)(17) of the Actrequires the Governor to describe, in theState Plan, how the State will serve theemployment and training needs of‘‘individuals with multiple barrier toemployment (including olderindividuals and individuals withdisabilities).’’ We believe that thisdirection, which is included in the WIAState Planning Guidance, providessufficient direction for consideration ofthese and other population groups notspecifically mentioned in section134(d)(4)(F)(iv) of WIA. Therequirement for public comment on theplan in § 661.220 of the regulationsallows interested parties theopportunity to promote the interests ofthose two groups.

In addition, we would like to clarifythat within the special participantpopulations that are listed in the Actand that are identified by the Governor,there will be individuals for whom anITA is the most appropriate avenue toemployment. We encourage One-Stopoperators and intensive serviceproviders to consider all trainingoptions when working with specialparticipant populations. It is importantthat consumer reports reflect adequateinformation to determine theappropriateness of training provided byan eligible training provider with regardto accessibility, auxiliary aids andservices, etc., to enable customers withspecial needs to make an informedchoice.

One commenter recommended thatthe Governor be required to solicitcomments from key stakeholders,including business, organized labor, andCBO’s, when identifying additionalpopulations.

Response: Section 112(b)(17)(A)(iv) ofthe Act requires the Governor to havethis information in the State plan,which is, of course, subject to comment.



No change has been made to the FinalRule.

Criteria for ‘‘DemonstratedEffectiveness’’: Section 663.430(a)(3),provides that when the exception forspecial populations is used, the LocalBoard must have in place criteria itdeveloped to determine ‘‘demonstratedeffectiveness,’’ particularly as it appliesto the special participant population itproposes to serve. This determination isin addition to meeting the requirementsfor qualifying as an eligible trainingprovider. The criteria listed in theregulation are illustrative and LocalBoards should develop specific criteriaapplicable to their local areas.

One commenter suggested that, inselecting CBO’s as training providersthrough a contract for services to servespecial participant populations, Stateand Local Boards should be able toconsider quality training even if thattraining program is not included on theeligible provider list.

Response: We cannot agree to thatrecommendation since WIA section 122requires that all training providers meetthe requirements for inclusion on theeligible provider list. Section 122(f) liststwo exceptions to the requirement thatdeliverers of training services be eligibletraining providers; on-the-job trainingand customized training. We interpretthese exceptions to be exclusive;providers of all other training servicesmust go through the eligible providerprocess. No change has been made tothe Final Rule.

One commenter felt that one of thecriteria of demonstrated effectivenessestablished in § 663.430(a)(3), ‘‘financialstability,’’ was too restrictive and shouldnot be a factor in considering CBO’swhich have a record of providingcrucial services to disadvantagedgroups.

Response: In order to ensure theproper expenditure of Federal funds, webelieve the financial stability of a CBOor of any private organization is relevantin a Local Board’s determination whenselecting a training provider for specialparticipant populations. While financialstability is not the only factor that aLocal Board may consider, and may notbe the decisive factor, it is reasonablefor a Local Board to consider thefinancial stability of an organization inwhich it may invest scarce trainingfunds. No change has been made in theFinal Rule.

The same commenter alsorecommended that we change§ 663.430(a)(3)(ii) to establish, as analternative to the listed programmeasures, the criterion of ademonstrated ability to do outreach to

and serve populations that face multiplebarriers.

Response: Section 663.430(a)(3) doesnot limit Local Boards to the listedfactors in establishing criteria fordemonstrated effectiveness. The LocalBoard may also consider the CBO’s orprivate organization’s success inreaching out to disadvantagedpopulations. No change has been madeto the Final Rule.

Another commenter suggestedexpanding the criteria for demonstratedperformance to include the attainmentof a self sufficiency wage.

Response: Although we have, in§ 663.230, established a minimumdefinition of self-sufficiency—employment that pays at least the lowerliving standard income level, as definedin WIA section 101(24)—the criteria fordetermining whether employment leadsto self-sufficiency is left to the State andLocal Boards. This means the criteria tobe applied could vary substantially fromarea to area. In addition, theperformance accountability system,established in section 136 of WIA, doesnot refer to attainment of self-sufficiency. While, as we have saidabove, we recognize the importance ofself-sufficiency as a goal for allemployment and training activities andurge State and Local Boards to adoptthat standard, we are not prepared toimpose that standard on the system.However, § 663.430(a)(3) does not limitthe ability of the State or Local Board toadopt additional criteria ofdemonstrated effectiveness by includingattainment of self-sufficiency as ameasure of demonstrated performance.No change has been made to theregulations.

One commenter suggested expandingthe criteria for demonstratedperformance to include thedemonstrated ability to serve ‘‘hard toserve’’ populations.

Response: We have modified§ 663.430(a)(3)(ii) to clarify that thecriteria listed in that section are amongthe ways available to demonstrateeffective delivery of services to hard toserve populations.

4. Requirements for Consumer Choice:WIA section 134(d)(4)(F), and theregulations, at § 663.440, identify theinformation on training providers thatmust be made available to One-Stopcenter customers. They require LocalBoards to make available, through theOne-Stop centers, the eligible trainingprovider list as well as the performanceand cost information associated witheach provider. Section 663.440(c)provides additional guidance on howparticipants may use that information toselect a training provider and have an

ITA established on their behalf. Wereceived a number of comments on thecontents of the information, the mannerin which it would be made available,and the level of authority the LocalBoard and the One-Stop operator willhave in establishing ITA’s.

A commenter expressed concern that,if the same entities that establish ITA’salso offer training, they will have thepotential to steer individuals towardtheir own training services.

Response: The introduction of ITA’swas intended to maximize customerchoice and reduce any forms ofinappropriate referral practices that mayhave existed. The limited circumstancesin which exceptions to ITA’s areauthorized are a further safeguardagainst the recurrence of such practices.The Act, at Section 117(f)(1)(B), alsoestablishes stringent conditions that aLocal Board must meet before aGovernor can consider a waiver of thegeneral prohibition against a LocalBoard’s provision of training. Further,the Act, at section 134(d)(4)(F), requiresLocal Boards to make available throughthe One-Stop centers the eligibletraining provider list and the programand cost information associated witheach eligible provider. The availabilityof that information will allowparticipants to assume more controlover the choice of training provider.Finally, through its monitoring andoversight role, the State may identifyand review any unusual patterns ofeligible provider usage to determine ifcorrective action is necessary. Webelieve these protections are sufficientto avoid the practices the commenterfears. No change has been made to thefinal regulations.

Another commenter asked howcustomer choice requirements apply toincumbent workers.

Response: It is important to recognizethe difference between incumbent andemployed workers. As we haveexplained above, incumbent workers areindividuals who are employed,however, not all incumbent workers arealso eligible for services to employedworker as described in WIA sec.134(d)(3)(A)(ii). Training for incumbentworkers is specifically authorized onlyas a Statewide Workforce InvestmentActivity under WIA section134(a)(3(A)(iv)(I) and § 665.210(d). Thisis an optional activity in which theStates may decide to engage. Generally,incumbent worker training is developedwith an employer or employerassociation to upgrade skills training ofa particular workforce. It usually takesplace in the workplace or after workhours for employees of a specificemployer or employer association.



There is no requirement that allincumbent workers to be trained mustbe determined to be in need of trainingservices to obtain or retain employmentthat allows for self-sufficiency.Frequently, such training is part of aneconomic development or businessretention strategy developed by a State.In such cases, the employer is involvedin the arrangement of the trainingcurricula and usually has a role in theselection of the training provider. Sincethe training is usually arranged by theemployer with a specific trainingprovider, there is no customer choice onthe part of the individual incumbentworker other than whether or not toparticipate in the training. This issue isalso addressed in the preamblediscussion of 20 CFR part 665.

In contrast, when a One-Stop operatordetermines that an employed workermeets the eligibility criteria, establishedunder WIA Sec. 134(d)(3)(A)(ii), fortraining with local (formula) funds, thatworker should is no different from anyother worker found eligible for trainingservices and must enjoy the same degreeof consumer choice as any other personeligible for training. An IndividualEmployment Plan would be developedfor the employed worker as part of theintensive services provided to theparticipant and a training plan, if soindicated, developed in the samemanner as for any other participant.Since the customer choice requirementsdo not apply to incumbent workertraining, no change has been made tothe regulations.

Availability of training funds—Therewere several comments about thelanguage in § 663.440(c) which requiresa One-Stop operator to refer an eligibleindividual to a training program andestablish an ITA ‘‘unless the programhas exhausted funds for the programyear. . . .’’ One commenter suggestedthat, to avoid the early exhaustion ofprogram funds, we should add languagerequiring the use other available Stateand local resources, particularly forincumbent workers, before using WIAfunds for ITA’s. Another commenter feltthat the language infringed upon a LocalBoard’s authority to allocate fundsamong core, intensive and trainingservices, presumably by mandating theexpenditure of funds on training at theexpense of core and intensive services.

Response: It is important toemphasize that, under section134(d)(4)(B), the opportunity for anindividual to enroll in a trainingprogram does not rely exclusively onthe availability of WIA training funds.In all cases, the resources of partners aswell as Federal, State, local andpersonal funding sources should must

also be taken into account in thedevelopment of the IndividualEmployment Plan. Thus, an eligibleindividual may receive intensiveservices and receive assistance inmaking arrangements for trainingregardless of whether the local WIAprogram has exhausted training fundsfor the program year and is unable toprovide an ITA. Since we have alreadydiscussed the requirements to considerand use other funding sources in§ 663.320, we do not think it isnecessary to add an additional mandatethat operators consider other fundingsources before approving training.Section 195(2) of the Act establishes a‘‘maintenance of effort’’ type ofrequirement by mandating that WIAfunds be used for activities that are inaddition to those already available inthe local area, and § 663.310(d) specifiesthat training services may be madeavailable to eligible adults anddislocated workers who are unable toobtain grant assistance from othersources. In an effective One-Stopsystem, the One-Stop operator will haveknowledge of additional resources andwill be able to coordinate WIA serviceswith those of other partner programs,thus increasing the opportunity toprovide increased services to customersof all the partner programs. Finally,incumbent worker training activities arefunded from statewide workforceinvestment funds authorized undersection 134(a)(3)(A)(iv)(I) and ratherthan local training funds.

In response to the second comment,the ‘‘exhausted funds’’ language of§ 663.440(c) is not intended tocontradict, and must be read inconjunction with, the Local Board’sauthority to determine the appropriatemix of core, intensive and trainingservices in the local area, described in§ 663.145(a). In recognition of this, wehave changed § 663.440(c) to clarify thata One-Stop operator must refer anindividual to training and establish anITA except when the Local Boarddetermines that training funds havebeen exhausted.

The commenter also suggested thatthe costs of referral to training be borneby the One-Stop operator.

Response: No change has been madein the regulations since § 663.440(d)already requires that the cost of thatreferral be paid by the applicable TitleI adult or dislocated worker program.

Another commenter suggested that inorder to assure ‘‘true’’ customer choice,the consumer information provided bythe Local Board should include a listingof the types of jobs into which providershave placed people and the wagesearned in those jobs.

Response: WIA section 122(d) doesnot require eligible training providers tosubmit specific information on jobs,although the Governor or the LocalBoard may choose to include such arequirement; that same section does,however, require the submission ofinformation on wages and permitsrequiring the submission of informationon the percentage of individuals whoobtain employment in an occupationrelated to the program (WIAsec.122(d)(1)(A)(i)(II)). We note, though,that the information required by section122(d) must be submitted for eachspecific training program on the list ofeligible training programs, not for theeligible provider’s full range ofprograms. Information on the specifictraining program, along withinformation submitted at the Governor’sor Local Board’s option on training-related placements, may serve as auseful substitute for the specific jobinformation the commenter seeks. Asdiscussed further in subpart E, WIAsection 122(d)(3) sets conditions underwhich additional information may berequested. No change has been made inthe regulations.

Another commenter supported therequirement in § 663.430(a)(2) for apublic comment period of 30 daysbefore a Local Board can determine thatthere is an insufficient number ofeligible training providers in the localarea to accomplish the purposes ofITA’s.

Response: The regulations retain thatrequirement.

Subpart E—Eligible Training ProvidersSubpart E describes the methods by

which organizations qualify as eligibleproviders of training services underWIA. It also describes the roles andresponsibilities of Local Boards and theState in managing this process.Although no single entity has fullresponsibility for the entire process, theState must play a leadership role inensuring the success of the eligibleprovider system. The Governorestablishes minimum performancelevels for initial determination of non-Higher Education Act/registeredapprenticeship providers and for allsubsequent eligibility determinations.The Local Board may establishadditional local performance levels forsubsequent eligibility determinations.The eligible provider process requires acollaborative effort among the State,Local Boards, and other partners. Theregulations attempt to amplify andclarify the intent of the Act, by linkingstatutory language on eligible providersin WIA section 122 with the provisionscovering Individual Training Accounts



(ITA’s) in WIA section 134. In § 663.505,the regulations clarify that all trainingproviders, including those operatingunder the ITA exceptions, must qualifyas eligible providers, except for thoseengaged in on-the-job and customizedtraining (for which the Governor mayestablish qualifying procedures, asdiscussed in § 663.595). Finally, inorder to ensure the strong relationshipbetween the eligible provider processand program performance, § 663.530establishes a maximum eighteen monthperiod for an organization’s initialdetermination as an eligible provider.

Before publication of the InterimFinal Rule, some traditional providers oftraining under previous workforceprograms, such as community-basedorganizations, expressed concern thatthey would face difficulties inparticipating in this system. Theregulations clarify that suchorganizations have the opportunity todeliver training funded under WIA,provided that they deliver services thatcustomers value and meet trainingperformance requirements. It isimportant that States provide access tothese organizations in order tomaximize customer choice. Statesshould provide access to a broad anddiverse range of providers, includingCBO’s, while maintaining the qualityand integrity of training services.

A commenter recommended that theAct and the regulations for subpart E bechanged to permit use of a competitiveprocurement process, such as thatpermitted for youth providers in theAct, since the identification of eligibletraining providers for adult trainingservices was viewed as ‘‘overlycomplicated.’’

Response: We recognize that theeligible training provider requirementsmay present significant implementationchallenges to States and local areas.However, these requirements areessential to the new system envisionedunder WIA, in which consumer choiceand accountability are key principles.Although ITA’s must be used for mosttraining services, contacts for trainingare permissible in certain limitedcircumstances (discussed in § 663.430):for customized or on-the-job training(OJT); when there are a limited numberof providers, or for programs ofdemonstrated effectiveness offered byCBO’s or other private organizations forspecial participant populations facingmultiple barriers to employment. Under20 CFR 661.350(b)(10), Local Boards arerequired to describe in their local planthe competitive process to be used toaward contracts for training serviceswhen exceptions are made to the use of

ITA’s. No change has been made to theFinal rule.

Several commenters suggested thatlanguage should be added in § 663.500and throughout the subpart to clarifythat programs, not providers, are madeeligible, and that eligibility is notautomatically conferred on all of aneligible provider’s programs.

Response: We agree that clarificationis needed. We have added languagethroughout the subpart (in §§ 663.500,663.510, 663.515, 663.535, 663.550,663.565, 663.570, 663.585, and 663.590)to clarify that:

• programs as well as providers mustbe eligible;

• providers are eligible to providetraining services only for the programsdescribed in their applications;

• the Local Board and the Governormay require application information onproviders as institutions, in addition toinformation regarding programs;

• application requirements for allprograms not eligible under the HigherEducation Act nor registered under theNational Apprenticeship Act (regardlessof the type of provider) fall under theGovernor’s initial eligibility procedures;

• providers submit performanceinformation on programs and thoseprograms that don’t meet performancelevels must be removed from local lists;

• providers may continue to beeligible if at least one of their programsis eligible (even if other of theirprograms are determined ineligible andremoved from the local and State lists);and

• State and local lists must includeinformation on eligible trainingprograms as well as providers.

A number of commenters wanted usto add specific language in § 663.500and throughout this subpart on the needto assure that there is diversity in thetypes of programs offered and inentrance requirements, that community-based organizations are included, andthat nontraditional employment forwomen be a suggested focus for newtraining providers.

Response: Under § 663.440(a),training services must be provided in amanner that maximizes consumerchoice. We agree with the commentersthat maximizing consumer choicerequires that Governors and LocalBoards ensure that eligible trainingprovider systems offer a diverse array ofhigh-quality programs that meet thevarying career interests, skill levels, andtraining needs of WIA customers,including low income adults, dislocatedworkers, and other priority groupsunder WIA. Governors and Local Boardsare strongly encouraged to provideoutreach, technical assistance, and

leadership to different types ofproviders, including CBO’s andproviders of non-traditionalemployment and training opportunities,in order to ensure a diverse array ofhigh-quality training options. In fact, 29CFR 37.42 requires recipients (includingGovernors and Local Boards) to conductoutreach efforts to various populations.Community-based organizations,recognized at § 663.590 as being able toapply and be determined eligible, have,in many local areas, proven to be a keysource of quality programs. We do notthink it would be useful to try toprescribe a uniform rule to cover thevariety of State and local selectionprocesses and criteria that will exist. Weencourage Governors and Local Boardsto administer the selection process in amanner that assures that significantnumbers of competent providers,offering a wide variety of programs areavailable to customers, and have addedlanguage indicating this to § 663.500.

A number of commenters wereconcerned that the requirements insection 122 of the Act and all of§§ 663.500 through 663.595 of theregulations would be in conflict with‘‘informed choice’’ requirements in titleI of the Rehabilitation Act of 1973, asamended by title IV of the WorkforceInvestment Act. Commenters noted thatState Vocational Rehabilitation (VR)agencies have their own vendorapproval procedures, maintain theirown vendor lists, and that someorganizations that work with personswith disabilities may not be on a WIAeligible training provider list.

Response: While VR agencies arerequired partners in the One-stopsystem, participants in VR-fundedservices can select vendors, includingtraining providers, approved under theState VR agency’s procedures andpolicies. Only when VR participantsalso use WIA title I funds must trainingservices be from a provider and programeligible under WIA title I.

Both title I of WIA and Section 102(d)of the Rehabilitation Act (title IV ofWIA) contain provisions that we believeare intended to serve the same goal—providing participants with theopportunity and the means to makeinformed choices about the servicesthey receive. Title I of WIA mandatesthat training be delivered in a mannerthat maximizes consumer choice andrequires the use of ITA’s, provision ofdescriptive and performanceinformation on eligible providers andprograms, and delivery of intensiveservices, such as assessment and casemanagement. Similarly, section 102(d)of the Rehabilitation Act requires StateVR agencies to implement policies to



assure that individuals can exerciseinformed choice in decisions related toassessment, selection of employmentoutcome, specific vocationalrehabilitation services, the entity thatwill provide services, the employmentsetting in which services will beprovided, and the methods available forprocuring services.

We encourage State VR agencies andWIA systems to harmonize andcoordinate their respective policies andprocedures on informed consumerchoice and the creation of lists of, andinformation on, eligible or approvedproviders of training services. Bothsystems could explore, for example,common application requirements orapproval criteria for vendors of trainingservices, expediting the application orapproval process to assure timelyinclusion of vendors from the partnersystem, providing outreach to theirrespective providers on how they canbecome eligible or approved under thepartner’s system, and creation of acommon, accessible consumerinformation system on programs andproviders that can be used byparticipants in both WIA title I and VRas they exercise their choice.

As we noted earlier, we encourageGovernors and Local Boards to ensurethat the eligible training providersystem provides access to a broaddiversity of programs that canaccommodate the varying needs, careerinterests and preferences of prioritygroups under WIA. We encourageGovernors and Local Boards to makesure that State and local WIAprocedures, while maintaining thequality and integrity of training services,afford adequate and timelyopportunities for applications fromtraining programs and providers servingindividuals with disabilities. Also,when developing initial and subsequenteligibility procedures, under§§ 663.515(c)(1)(I) and 663.535 (a)(1),Governors must solicit and take intoconsideration the recommendations ofproviders. We encourage Governors toextend this opportunity to providersoffering training services to individualswith disabilities. Since we do not see aconflict between WIA’s customer choiceand VR’s informed choice requirements,no change has been made to the Finalrule.

Section 663.505—What are EligibleProviders—One commenter wanted toensure that § 663.505 permitsapprenticeship programs withapplications pending to be recognizedas eligible training providers.

Response: Apprenticeship programsawaiting State or federal approval canbe recognized as eligible by Local

Boards. However, since such programsare not yet registered under the NationalApprenticeship Act, the provider wouldhave to apply under the Governor’sprocedures for initial eligibility, whichrequires the provision of performanceand cost information. No change hasbeen made to the Final rule.

A commenter suggested that § 663.505(b)(2)(iii), be revised to specificallymention service or conservation corpsas other eligible providers of trainingservices.

Response: Service or conservationcorps programs are among the types ofprograms that could be eligible toprovide adult training services underState and local initial eligibilityprocedures. There are many types oforganizations that could apply andbecome eligible, but we do not think itis appropriate to try to enumerate themall, or to specify certain groups. Nochange has been made to the Final rule.

One commenter wanted us to ensurethat CBO’s, whose eligibility isdiscussed in § 663.505(b)(2)(v), are notleft out as eligible training providerssimply because they are not‘‘automatically’’ eligible under WIAsection 122(b)(1).

Response: Since most CBO’s and theirprograms are not HEA-eligible, they willhave to provide program performanceand cost information in initialapplications and their programs willhave to be determined eligible by theLocal Board. However, we anticipatethat many CBO programs will be able tomeet performance requirements bothinitially and subsequently, and thus willbe included on local and State lists. Asnoted earlier, we strongly encourageStates and Local Boards to provideoutreach and technical assistance toproviders such as CBO’s, to ensure thatthere is a wide array of providers andprograms that can both accommodateWIA participants’ diverse training needsand career interests and meetaccountability requirements.Community-based organizations,recognized at § 663.590 as being able toapply and be determined eligible, haveproven able in many communities tomeet these skill needs and careerinterests while increasing participants’earnings and employment. Weencourage CBO’s to take part in theconsultation process required under§§ 663.515(c) and 663.535(a). Underthese provisions Governors must solicitand take into consideration therecommendations of training serviceproviders and interested members of thepublic on both initial and subsequenteligibility procedures. We believe thatthe regulations adequately protect the

interests of CBO’s, thus, no change hasbeen made to the Final rule.

Section 663.508—Definition of aProgram of Training Services—Anumber of commenters felt that thedefinition of a program of trainingservices in § 663.508 should be clarified.The commenters suggested that a courseor sequence of courses leading to a‘‘competency or skill recognized byemployers’’ and ‘‘a training regimen thatprovides individuals with additionalskills or competencies generallyrecognized by employers’’ were similar,but vague. Commenters wondered if onedefinition applied to services for theunemployed while the other applied tosuch services for the employed, andwhat the word ‘‘generally’’ wasintended to convey. One commenterrecommended that the definitionrequire that competencies and trainingregimen be identified and approvedprior to training, and severalcommenters suggested that thecompetencies approved by labororganizations or labor-managementcommittees should be acceptable.Another commenter suggested that theregulation clarify that the competenciesand skills could include increasedliteracy or increased English languageabilities.

Response: The definition of a programof training services was intended toensure that individuals using ITA’s haveaccess to a broad array of trainingoptions, and that no arbitrary limitswould be established as the length,nature, location or outcomes of thetraining, unless required under otherparts of the Act or regulations (such asrequirements for on-the-job training andcustomized training at §§ 663.700–663.720). We did not intend todifferentiate between training programsfor the employed or unemployed.Section 663.508 has been revised toclarify that a program of trainingservices can consist of one or morecourses or a training regimen, and thateither of these can lead to a formalcredential (such as a degree orcertificate) or to the acquisition of skillsand competencies recognized byemployers for a specific job oroccupation, as well as general skills andcompetencies necessary for a broadrange of occupations, or job readiness.Section 663.508 has also been changedto indicate that the skills andcompetencies should be recognized byemployers and identified in advance.Such competencies may include literacyor English language abilities. Weencourage Local Boards and Governorsto develop application requirementsthat solicit information on the skills andcompetencies to be taught and how



these are ‘‘recognized’’ by employers,labor-management committees, or labororganizations, particularly whenprograms do not offer a formalcredential. We also encourageGovernors and Local Boards to createpolicies and procedures for initial andsubsequent eligibility (and datareporting) to accommodate situations inwhich WIA participants’ training plansdo not require a full ‘‘program,’’ butrather only part of a program or coursesfrom different programs.

Section 663.510—State and LocalRoles in Managing the Eligible ProviderProcess—One commenter asked that§ 663.510 be modified to ensure that thepublic is provided access to theprovider list and performanceinformation, that the lists are providedupon request, and that satellite andaffiliate offices of the One-Stop systemalso receive the list.

Response: Under § 663.555, the Statelist and consumer reports containingperformance information must be madeavailable throughout the One-stopsystem as a core service to the generalpublic, to WIA participants, and toparticipants whose training is supportedby other One-Stop partners. We stronglyencourage States and local One-Stopsystems to assure that the list isavailable in all satellite and affiliateoffices. In addition, under 29 CFR 37.9,the provider list and performanceinformation must be made available inalternate formats to individuals withdisabilities. Since the regulationsalready accommodate the commenter’srequest, no change has been made to theFinal rule.

A number of comments criticized§ 663.510 for failing to address States’and Local Boards’ responsibility toensure that available training optionsinclude nontraditional occupationaltraining for women, small businessdevelopment and other programstargeting particular populations orindustrial sectors for which there maybe high demand. Commenters asked thatthe Final Rule include languagerequiring States and localities to ensurethat the eligibility determinationprocess assures the availability of non-traditional training options for women.One commenter wanted the regulationsto require States and Local Boards toconduct outreach to CBO’s that provideservices to disadvantaged populations tohelp them apply for certification andcontracts.

Response: As noted earlier, in order tosupport informed customer choice byWIA participants with diverse skillneeds and career interests, Local Boardsand Governors should make every effortto ensure there is a broad range of

programs and providers identified onState and local lists. We stronglyencourage States and Local Boards toconduct outreach and technicalassistance to various types of providersin order to enhance the likelihood thatcustomers will have access to a broadrange of programs and providers. Sincethe State and Local Boards areaccountable for their own performance,they must ensure that programs otherthan HEA and NAA programs includedon the initial lists and all programsincluded on subsequent lists have metminimally acceptable levels ofperformance. Although we stronglyencourage States and Local Boards totake affirmative steps to make sure thatprograms offering non-traditionaltraining and programs offered by CBO’sare included on their eligible providerlists, ultimately, the programs mustmeet State and local performancerequirement to be included. We cannotrequire States and Local Boards toinclude programs that do not meet theirlegitimate performance standards. Thus,no change has been made to the Finalrule.

One commenter requested that theregulations clarify that cost andperformance information is required forall providers, as indicated, in thecommenter’s view, by the requirementat § 663.510(c)(3) that the designatedState agency disseminate the State list‘‘accompanied by performance and costinformation related to each provider* * *’’

Response: The commenter is partiallycorrect. For subsequent eligibility,performance and cost information isrequired of all programs. For initialeligibility of non-HEA and non-NAAprograms and providers,§ 663.515(c)(3)(ii) requires Local Boardsto use the Governor’s procedures fordetermining eligibility and thoseprocedures must require thatappropriate portions of cost andperformance information be provided.For initial eligibility of HEA and NAAprograms and providers, § 663.515(b)provides that the application contentsare determined by Local Boards, whichare not required to request performanceand cost information. Local Boards arenot precluded from requesting suchinformation, but the Act does not permitperformance levels to be used indetermining initial eligibility of HEAand NAA programs. No change has beenmade to the Final rule.

One commenter was concerned that,as local lists are combined to form aState list, as discussed in § 663.510,some programs and providers could beincluded for which a Local Board wouldnot want to allow customers to use title

I training funds. The commenter furtherrecommended that the regulations givefinal authority to Local Boards to choosewhat programs and providers to includeon a local list.

Response: We recognize that LocalBoards may have legitimate concernsabout the quality or integrity of aprogram or provider. Such concernsmay arise if a program from anotherarea’s performance is unknown or lowerthan the levels set by the Local Boardfor subsequent eligibility, if there havebeen, or continue to be, problemsknown to the Local Board related totraining program inputs (such ascurriculum, instruction, or equipment)or if the provider has not complied withadministrative or financialrequirements. These problems may existfor programs and providers included byother Local Boards or by the LocalBoard itself. However, the Board mustpermit eligible participants to choosefrom providers on the State list whichmust include: (1) HEA and NAAprograms which submit completeapplications for initial eligibility inaccordance with the Local Board’srequirements, (2) non-HEA, non-NAAprograms which meet the criteria in theGovernor’s procedures, and (3)programs placed on the list by anotherLocal Board and approved by the Stateagency.

The Act, at section 122(e)(4)(b),requires that individuals eligible toreceive training have the opportunity toselect any eligible provider from anylocal area that is included on the Statelist. Local Boards are required to makethis list available to the local One-Stopsystem. We believe that, to maximizecustomer choice, Local Boards mustensure that participants are informedabout the State and local lists,encouraged to use them, and informedof their right to choose any programs onthe list. For individuals determinedeligible for training services, there areonly three conditions a Local Board canimpose on participants using ITA’s: thetraining must be in an occupation forwhich there is demand, the individualmust have the qualifications to succeedin the program, and the selection occursafter consultation with a case manager.Since Local Boards must allow title Ifunds to be used in the programsselected by training participants if thesethree conditions are met, Local Boardsshould ensure that the participantsselect the provider that best suits theirindividual needs especially when theprovider is not located in the local area.Local Boards are encouraged toconsider:

• Enhancing the quality ofinformation on programs and providers.



High quality information can aidcustomers in making informedjudgments and steering clear ofquestionable programs or providers. Weencourage Local Boards to makerecommendations on the types ofinformation to be collected as part of theGovernor’s procedures for initialeligibility for non-HEA, non-NAAprograms and providers and to ensurethat their own applications for HEA andNAA programs and providers solicit theneeded types of information and toobtain appropriate information todetermine subsequent eligibility.Extensive supplementary informationon providers and programs can also beincluded on the local list under§ 663.575 and Local Boards and casemanagers can present additionalinformation during the decision-makingprocess, or encourage WIA customersthemselves to acquire additionalinformation on programs and providersunder consideration. Local Boards canalso coordinate with one another on thetypes of information required in initialapplications and in supplementaryinformation, to assure that there arehigh levels of information on programsin all local areas.

• Providing quality guidance andcontinuing case management.Individuals eligible for training servicesselect a program after consultation witha case manager. States and Local Boardscan take steps to ensure that casemanagers: encourage individuals tofully utilize the information available inthe local or State list and in theconsumer reports; provide additionalinformation beyond the lists andconsumer reports; assist individuals indoing their own research on programs orproviders; and help individuals identifyspecific options and systematicallycompare them. If an individual doeschose a questionable program, casemanagers can monitor the individual’sprogress and the training program’sperformance, in order to identify andtake action to avoid potential problems.

• Creating procedures to assure highperformance. State and Local Boardscan create procedures to holdquestionable providers accountable forperformance. For example, procedurescould permit ITA’s to be paidincrementally upon completion ofspecific milestones.

Because the Act encourages broadcustomer choice, we do not think itappropriate to change the regulations.State and Local Boards have theflexibility to help individuals to makethe best choice for their circumstances.

A commenter wanted § 663.510 toensure that Local Boards have theflexibility to set policy on providers and

programs that reflects local conditionsand that the State cannot add its ownproviders to the State list.

Response: WIA section 122(e)(2)makes it clear that, in compiling theState list, the State has authority toinclude only providers and programssubmitted as part of local lists. The Statehas no authority to include additionalproviders and programs. However, LocalBoards have only limited authority todetermine which programs or providersare included or excluded from the locallist. Rather, the Local Board must, forinitial eligibility, include all HEA andNAA programs and providers for whichcomplete applications are submittedand include non-HEA and non-NAAprograms which meet the Governor’scriteria, which are not required to, butmay, permit adjustments to performancelevels for local conditions. Forsubsequent eligibility, all programsmust meet minimum acceptableperformance levels specified in theGovernor’s procedures and adjustedaccording to the Governor’s proceduresfor local factors and the characteristicsof the population served by theproviders. Local Boards have theflexibility to require higher, but notlower, levels of performance. Weencourage Local Boards to activelyparticipate in the development of theprocedures for determining initial andsubsequent eligibility.

We recognize that, during both initialand subsequent eligibility, there may beprograms which a Local Board believesare valuable in meeting local workforceneeds that do not meet performancelevels (or other criteria) and, therefore,cannot be included on the local list. Toavoid this situation, we encourage localBoards to make their recommendationson the Governor’s initial eligibilityprocedures, an opportunity whichGovernors are required to makeavailable to Local Boards under§ 663.515(c)(1)(I). As discussed earlier,in order to ensure access to a broadarray of programs that can meetcustomer’s diverse skill needs, careerinterests, and preferences, we alsoencourage Local Boards, to provideoutreach and technical assistance toproviders.

We recognize that, in other instances,a Local Board may reluctantly have toinclude programs or providers which itbelieves are questionable on the locallist. To avoid individuals selectingquestionable programs or providers or toprevent any problems if they areselected, we encourage Local Boards toexplore the approaches suggested above,for enhancing the quality ofinformation, providing high quality casemanagement and guidance, and creating

procedures to enhance performance.Since the regulation accurately reflectsthe statutory requirements, no changehas been made to the Final rule.

One commenter was concerned thatthe Preamble and § 663.510(b) wereinconsistent in discussing the need forsetting performance levels for initialeligibility.

Response: It was unclear what thecommenter found inconsistent. TheGovernor determines the initialeligibility procedures, includingappropriate of levels of performance, fornon-HEA and non-NAA programs andsets minimum acceptable levels for allprograms for subsequent eligibility(though such levels can be increased bythe Local Board). These provisions areincluded in §§ 663.515 and 663.535.

Another commenter stated that theprocess for determining eligibleproviders, as described in § 663.510,should be as transparent as possible,and allow qualified providers to becomeeligible while setting sufficientthresholds to limit participation ofunqualified providers.

Response: We believe that the Act andregulations provide States and LocalBoards with the opportunity to set upsystems that will be transparent andachieve the goals suggested by thecommenter. No change has been madeto the Final rule.

Some commenters questionedwhether §§ 663.510(c)(2) and 663.515(d)give too much authority to designatedState agency by authorizing it to verifyperformance information on providers’programs submitted by the Local Board.One commenter felt that the regulationsexceed the language of the Act, whichonly requires that the State determine ifperformance levels are met. Anothercommenter suggested that theregulations should not shift thisresponsibility onto States and that, ifStates have this responsibility, weshould provide support and technicalassistance in carrying out verification.The commenter also suggested that theAct appears to require a duplicativefunction by Local Boards and thedesignated State agency in determiningif performance levels are met.

Response: We agree that the Act, insection 122(e)(2), specifies that the Statedetermines if performance levels aremet for programs submitted on locallists. However, we believe that the roleof the State agency in verifyingperformance information is implicit inthe statutory scheme, based on the Stateagency’s authority to enforce provisionsof section 122(f)(1) on the intentionalsubmission of inaccurate performanceinformation (which can only bedetermined as inaccurate if there is a



way to verify the information submitted)and on the requirement that providerssubmit verifiable program-specificinformation. We have changed thelanguage in § 663.510(c)(2) to clarifythat the State agency must determine ifprograms meet performance levels, and,in so doing, may verify the accuracy theperformance information submitted. Wehave also revised § 663.515(d) to clarifythat the designated State agencydetermines if the performance levels aremet for programs Local Boards submitas part of their local list. In addition,since State agency consultation with theLocal Board is required under section122(f)(1) and verifiable information isrequired to be submitted to the LocalBoard, we believe that the Act alsoprovides implicit authority to LocalBoards to verify performanceinformation and to report suspectedinaccuracies to the State agency. Wehave added language in a newparagraph 663.510(e)(4) to clarify thatLocal Boards may perform verificationof performance information, under theGovernor’s procedures. Technicalassistance on verification and otheraspects of implementing WIA section122 is being planned.

We agree that the roles of the Stateagency and Local Boards may overlap indetermining if programs meetperformance levels and in verifyingperformance information, and weencourage States and Local Boards towork toward eliminating needlessduplication. The Act does not, however,authorize the State to review LocalBoards’ determinations of programs thatdo not meet the performance levels andare, therefore, neither included on locallists nor forwarded to the State. Nochange has been made to this aspect ofthe Final rule.

Section 663.515—Initial EligibilityProcess—One commenter suggested thatinitial eligibility criteria for institutionsoffering degree programs beaccreditation or approval by theappropriate authority and, forinstitutions that offer certificateprograms, appropriate licensing by theState.

Response: In determining initialeligibility, Local Boards have the optionto request information aboutaccreditation and approval from HEA-eligible and NAA-registered programsand providers as part of the applicationand to include such information on thelocal list. However, we do not believethat Act provides authority for anyapproval criteria for HEA and NAAprograms and their providers, as long ascompleted applications are submittedand the program or provider meets theeligibility criteria of WIA section

122(a)(2)(A) and (B). We note that to beeligible under HEA title IV, providersmust be accredited, and, if a publicinstitution, approved by appropriateState authorities. For non-HEA and non-NAA programs and their providers, theGovernor’s procedures could requirethat State licensing, or any otherapplicable criteria, be used for bothapproval or information purposes. Nochange has been made to the Final rule.

We encourage State WIA systems towork with State public education, andlicensing authorities to harmonize,coordinate, or strengthen requirementsfor all types of programs and providers,since the strictness and consistency ofapproval, licensing and accreditation forproviders and programs varies widelybetween—and even within—States.Similarly, requirements for certificateprograms, offered at both HEA-eligibleand non-HEA-eligible providers, varywidely in terms of length, content, andrigor.

Another commenter asked that§§ 663.515 and 663.535 require theGovernor to allow sufficient time forlabor organizations and businesses toprovide comments on initial andsubsequent eligibility procedures andsuggested a minimum of 30 days. Thecommenter also wanted the regulationsto require that State and local laborfederations be part of the consultationprocess.

Response: We view the comment andconsultation provisions in this section,as throughout the Act, as cornerstonesof the new system envisioned in theAct. To assure there is adequate time forcomments, while permitting as muchState flexibility as possible, we haveadded language at §§ 663.515(c)(1)(iii)and 663.535(a)(3) to require Governorsto establish and adhere to a specifictime period for the consultation andcomment process during thedevelopment of procedures for initialand subsequent eligibility. We stronglyencourage Governors to take affirmativesteps to include State and local laborfederations in the comment andconsultation process, but we do notthink additional changes to the Finalrule are warranted. Under the rule aswritten, Governors are required tosolicit and take into consideration therecommendations of providers oftraining services, which may, in someareas, include labor federationsinvolved in providing apprenticeship orother training, and must provide anopportunity for representatives of labororganizations to submit comments onthe procedures.

A commenter suggested thatGovernor’s procedures for initialeligibility require evidence that training

providers have consulted with labororganizations who represent workershaving the skills in which training isproposed.

Response: While such an activity maybe desirable, the Act does not provideauthority to require Governors toinclude such a provision in their initialeligibility procedures. The contents ofapplications for initial and subsequentapproval are left to the Governor’sdiscretion, after appropriateconsultation. We encourage Governorsto consider such consultationrequirements for initial eligibility, inorder to assure that programs are ofhigh-quality and match current skillrequirements. We also encourage bothGovernors and Local Boards to considerincluding information items in initialeligibility procedures and applicationsthat will help consumers identify ifprograms have been subject to reviewand approval by appropriate labor andindustry organizations. No change hasbeen made to the Final rule.

One commenter was concerned thatthe 30 days, permitted in section 122(e)of the Act, for the State agency todetermine if programs submitted byLocal Boards meet the performancecriteria for initial and subsequenteligibility, was insufficient. Thecommenter recommended that Stateagencies be given 90 days.

Response: We recognize that untilState data collection and recordslinkages systems are in place, States willhave difficulty in meeting the timingrequirement for verifying informationand for determining if performancelevels are met. Since the law specifiesthat the State agency has only 30 days,the State may not be able to determineif such levels are met on all programs’performance and the State may have todevelop a prioritizing or samplingsystem. However, we also recognize thatin a number of circumstances, timingproblems will persist even once suchdata systems are in place, since there aretime lags in accessing UI quarterlyrecords for verifying programperformance information. We haveadded language in § 663.530 to providethat, in the limited circumstance wheninsufficient data is available, initialeligibility may be extended for a periodof up to six additional months, if theGovernor’s procedures provide for suchan extension.

A number of commenters expressedsuspicion that initial eligibilityprocedures, by providing completediscretion to Governors and LocalBoards, would result in programs beingdetermined eligible on the basis ofarbitrary performance and costthresholds, and thus lead to ‘‘creaming’’



of programs and participants.Commenters expressed concern that theregulations do not define an‘‘appropriate portion of performanceand cost information’’ and ‘‘appropriatelevels of performance’’ and asked thatwe define these terms and offerexamples of how States and LocalBoards could set up initial eligibilityprocedures to assure a diverse providersystem. Commenters suggested severalother remedies: requiring or allowinguse of adjustment or weighting factorsfor the local area and participantcharacteristics; encouraging use of datafrom outside the JTPA system to ensurea wide array of performanceinformation; requiring Governors to setaside technical assistance funds to helpsmall, nonprofit CBO’s with applicationand data collection activities; requiringinformation on growth occupations andgrowing sectors in the area; andrequiring that CBO’s be listed asexamples of interested members of thepublic to whom opportunities tocomment should be provided.

Response: We believe that the Actprovides broad discretion to Governorsto determine initial and subsequenteligibility procedures. Since we want toprovide as much flexibility to States aspossible, we have not defined whatconstitute ‘‘appropriate portions ofperformance and cost information’’ or‘‘appropriate levels of performance.’’However, we are concerned that allprocedures and practices be fair and notarbitrary, and that they be based onresearch, information from pastexperience, and sound managementapproaches. We are also concernedabout practices that result in‘‘creaming’’ of participants or lead to alack of training options that meet thediverse skill needs and career interestsof WIA participants. We plan to developtechnical assistance on development ofinitial and subsequent eligibilitycriteria.

As noted earlier, we stronglyencourage outreach and technicalassistance by States and Local Boards toproviders in order to assure that WIAparticipants have access to a broadrange of programs. Also, we stronglyencourage CBO’s to take advantage ofthe public comment and consultationrequired to be provided by the Governorin the development of procedures forinitial eligibility for non-HEA, non-NAAprograms and subsequent eligibility forall programs. No change has been madeto the Final rule.

One commenter requestedclarification on how both initial andsubsequent eligibility under WIA fitswith requirements of State and nationalsystems for accreditation, approval, and

performance information. Severalcommenters recommended that the WIAsystem for collecting and disseminatingperformance information be used inother systems.

Response: The Act recognizes thevalue of at least two other nationalrecognition systems, in the requirementsfor HEA and NAA programs for initialeligibility. We encourage all One-Stoppartners at the State and local level toharmonize and coordinate performancerequirements and to enhance systemsfor certification, licensure, andaccreditation. We encourage all partnersto avoid the creation of, or resolve,duplicative or conflicting requirementsregarding programs, institutions, anddata on individuals. We also support thecreation of unified data collectionsystems that can reduce administrativeburden while permitting information tobe generated to meet reportingrequirements under many programs. Webelieve that WIA’s requirements willstrengthen accountability and customerchoice by supplementing existingsystems established through State andfederal higher education requirementsand State licensing agencies.Information disseminated on individualtraining programs’ performance underWIA will be a significant addition to theaccountability systems currently inplace, and will provide the generalpublic, program administrators andfront-line staff access to informationthat, in most parts of the Nation, hasnever before been available. Weencourage Governors and Local Boardsto consider ways to make use ofperformance and cost informationalready available through these othersystems. We do not think, however, thatWIA section 122 gives the authority tomandate this kind of coordination; thus,no change has been made to the Finalrule.

Section 663.530—Time Limit forInitial Eligibility—A number ofcommenters expressed approval of theclear expression of how long initialeligibility may last and supported theswift transition to subsequent eligibilitywhen all providers would be subject tothe performance requirements. Onecommenter, however, was concernedthat the requirement in § 663.530 thatinitial eligibility be only 12 to 18months will create problems forinstitutions eligible under the HigherEducation Act that will not be able tocompile information in time forsubsequent eligibility determination.

Response: We agree that, in certaincircumstances, providers will havedifficulty in collecting all theperformance information required;similarly, the designated State agency

may have difficulty verifying theinformation, particularly because of thelag time in using UI quarterly records.However, because of the criticalimportance of performance informationfor consumer choice and accountability,initial eligibility should be extendedonly in very limited circumstances,such as for new programs for which nodata under the methodology theGovernor selects would be availablewithin 12 to 18 months. In othercircumstances, Governors’ procedurescould permit an extension of initialeligibility of up to six months, wheninsufficient data is available. In suchcases, it may be a good idea to partiallyassess performance by using theinformation that is available even if it isonly partial information (such data onall students that recently left a programeven if no WIA client information is yetavailable) or by using survey-basedinformation until UI records can be usedfor verification. We have addedlanguage to § 663.530 to permitGovernor’s procedures to extend initialeligibility in limited circumstances.

Section 663.535—SubsequentEligibility—One commenter wanted§ 663.535 to be revised to clarify that theState agency can verify information onperformance and cost effectiveness forsubsequent eligibility.

Response: As discussed above, wehave changed § 663.510 to clarify thatthe State, as well as the Local Board,may verify performance information inthe process of determining ifperformance levels at initial andsubsequent eligibility are met. The Actauthorizes the State agency to determineif the performance levels are met forprograms submitted by the LocalBoards. The State does not have a rolein reviewing performance of programsnot approved by the Local Board andnot included on local lists. However,there is nothing to preclude LocalBoards from delegating to the Stateagency the authority to perform allinitial determinations of eligibility ofnon-HEA and non-NAA programs, andsubsequent eligibility determination forall programs, although responsibility forthis process still remains with the LocalBoard. The Act does not explicitlyauthorize the State agency to determine‘‘cost-effectiveness,’’ but rather requiresthat the information on the costs of thetraining services be required inapplications for initial eligibility of non-HEA and non-NAA and for all programsfor subsequent eligibility. AlthoughStates and Local Boards may choose touse the available cost and performanceinformation to determine the cost-effectiveness of training programs, thedecision to do so is a matter of State or



local discretion. We have made noadditional change to the finalregulations.

Several commenters were concernedthat provider requirements at § 663.535will not take into account thecharacteristics of the population servedand the difficulties in serving thesepopulations.

Response: These concerns areaddressed in our response to similarcomments on adjustments toperformance levels in the discussion of§ 663.540.

Section 663.540—Types ofPerformance and Cost InformationRequired and Extraordinary Costs ofCollecting Performance Information—One commenter was concerned thatfederal requirements on confidentialityof student records possibly presents amajor problem for developinginformation on students not fundedwith ITA’s.

Response: We recognize thatregulations and administrative guidancefor the Federal Educational Rights andPrivacy Act (FERPA) under 20 U.S.C.§ 1232g, as issued by the U.S.Department of Education, may need toaddress the issue of how States canassure that performance information onall students in eligible programs can bedeveloped, particularly when UIquarterly records must be used, asrequired under section 122 of WIA. Weare working with the U.S. Department ofEducation to identify how State WIAsystems, State education systems, andeducational institutions can complywith FERPA and also generate theinformation required under WIA andplan to issue joint guidance that willassist States in complying with FERPA.No change has been made to the Finalrule.

One commenter recommended thatthe law and regulations be changed sothat information on all participants in aprogram, which may be difficult toobtain, is not required.

Response: We believe that eliminatingthis information would vitiate one of thekey elements needed for maximizingcustomer choice. As the commenterrecognizes, the Act requiresperformance information on all studentsin a program. State WIA systems areencouraged to work with State publiceducation and licensing authorities toharmonize, coordinate, or strengtheninformation requirements in all systems.No change has been made to the Finalrule.

One commenter recommended thatGovernors be allowed to requireadditional verifiable performanceinformation describing thedemographics of the populations served

in a training program, including age,race, national origin, Englishproficiency, sex, and disability. Thecommenter further recommended thatall such information be included in theconsumer reports system.

Response: 29 CFR 37.37(b)(2) requiresrecipients, including training providers,to ‘‘record the race/ethnicity, sex, age,and where known, disability status, ofevery applicant, registrant, eligibleapplicant/registrant, participant,terminee, applicant for employment,and employee.’’ Governors shouldconsider the merits of including suchinformation in the consumer reportssystem. No change has been made to theFinal rule.

Several commenters wanted theregulations to require Governors andLocal Boards to demonstrate how localarea factors and populationcharacteristics are considered indetermining performance levels forsubsequent eligibility as well asrequiring that Governors and LocalBoards to demonstrate that the mostdisadvantaged are being served.

Response: Under § 663.535(f), theGovernor’s procedures already mustensure that Local Boards takes suchfactors into consideration. As we havesaid above, Governors and Local Boardsshould assure that all WIA participantswho may have multiple barriers toemployment have access to programsthat can effectively serve their needs. Nochange has been made to the Final Rule.

A number of commenters noted that§ 663.540 does not define whatconstitute ‘‘extraordinary costs’’ andthat differences of opinion on thismatter should be an allowable basis toappeal denial or termination ofeligibility. Some commentersrecommended that training providers begiven explicit authority to present totheir Local Board and Governorevidence of extraordinary costs and thata response should be required within areasonable period of time. They furthersuggested that, if additional resources orcost-effective data collection methodswere not provided, the provider wouldbe exempted from submitting theperformance information. Onecommenter recommended thatproviders which, after presentingevidence of extraordinary costs involvedin providing performance information,receive neither additional resources norcost-effective information-collectionmethods, should be exempted fromsubmitting information on theirprograms’ performance and that suchprograms should remain eligible. Bycontrast, one commenter wanted toassure there were limits on the amountof funds Governors must offer to

training providers who need additionalfunds to collect performanceinformation.

Response: The Act requires Governorsto provide additional resources or cost-effective methods of data collectionwhen providers experienceextraordinary costs in providingrequired information, under section122(d)(1)(A)(ii), on program participantswho receive assistance under the adultor dislocated worker programs, or inproviding additional information undersection 122(d)(2). In order to assure thatGovernors provide such assistance,§ 663.540(c) has been revised to requirethat the Governor establish proceduresby which such costs can be determined.While Governors must define themethodology to be used in determiningsuch costs and either provide the fundsor procedures to help defray or lowerthese costs when they are determined tobe extraordinary, we have not mandatedthat the Governor or Local Board isrequired to defray all of the provider’sextraordinary costs. Reasonable partiesmay differ over whether informationcosts are extraordinary and whether theState has undertaken reasonable meansto defray or lower such costs. States andlocal areas will have to devise a systemunder which disputes regardingextraordinary costs can be reasonablyresolved. For example, a Local Boardmay base its initial decision on the basicinformation required, while attemptingto reach agreement on the costs of theadditional information. If a provider isdenied eligibility because it has notprovided the required information,section 663.565(b)(4) provides anopportunity for review of that decision.

Section 663.555—Dissemination ofthe State List—Several commenterswant the state list of eligible trainingproviders to be made available to thepublic and not just individuals.

Response: Section 663.555 alreadyprovides that the list and consumerreports are required to be widelydisseminated and made available as acore service throughout the One-Stopdelivery systems in the State. Webelieve that the One-Stop system is theappropriate way to ensure wide accessof the list, so no change has been madeto the Final rule.

Section 663.565—Loss of Eligibilityand the Appeals Procedures—A numberof commenters recommended there be atime limit required for promptresolution of appeals and suggested 60days as the limit.

Response: States must developprocedures that assure promptresolution of appeals. Unlike otherprovisions in WIA, for example, section181(c), which establish time limits for



the resolution of grievances or appeals,section 122(g) does not establish a timelimit on the appeal; it leaves the detailsof the procedure to the Governor. We donot think we can mandate a time limitwhere Congress has chosen to give theGovernor the discretion to fashion anappeal procedure. We do, however,strongly encourage States to establishand adhere to time limits for suchappeals and to make those time limitsconsistent with the time limits in theirother WIA appeal procedures. Nochange has been made to the Final rule.

One commenter noted that the criteriafor termination of eligibility do notaddress situations in which institutionslose their license to operate, when theyor their programs lose accreditation, orState educational agency approval, andwhen providers violate State or locallaws.

Response: The criteria for initialeligibility for non-HEA and non-NAAprograms are determined in theGovernor’s procedures and may cover anumber of different situations, such aswhen programs are in violation of Stateand local laws or have lost their licenseto operate. WIA section 122 does notmandate the detailed criteria to be usedin determining eligibility for providersand programs, but rather permitsGovernors and Local Boards to setapplication information requirementsand determine that the information iscomplete. For example, information onthe status of a program or provider aseligible under HEA, registered underNAA, and on accreditation orcompliance with various State and locallaws could be required and included onthe State or local list). The only criteriain WIA for termination of subsequenteligibility are limited to: not meetingperformance levels, intentionallysubmitting inaccurate information, andnoncompliance with the Act and itsregulations. If a State or Local Boardasks for information about accreditationstatus or compliance with laws and theprovider submits inaccurateinformation, it may be subject totermination under § 663.565(b)(3).Because WIA is silent about whathappens if a provider’s licenseaccreditation status change during theperiod between initial and subsequenteligibility determinations or betweenannual subsequent eligibilitydeterminations, we want to clarify thatGovernors may set procedures forresubmission of initial applications orother information in cases where thestatus of a provider or its program haschanged.

The same commenter noted that§ 663.565(b)(1) requires that LocalBoards must remove programs that do

not meet performance levels from thelocal list, while, under § 663.565(b)(2),States only may remove such programsfrom the State list, which could resultin incompatible State and local lists andin Local Boards being sued byproviders.

Response: The Local Board has theauthority and the obligation, under WIAsection 122(c)(6)(A) and (e)(1), to denyinitial eligibility and subsequenteligibility if programs and providers failto meet performance levels. Since,under WIA section 122(c)(6)(B), LocalBoards may set higher performancestandards for providers or programs tobe included on their local list, it ispossible that one local area may removea program or provider while anotherplaces them on its local list. In that case,the State Agency must decide whetheror not to remove the program orprovider from the State list. Thepossibility of being sued by providersexists at both the local and the Statelevels, depending on which level isinvolved in denying or terminatingeligibility. No change has been made tothe Final rule.

Sections 663.570 and 663.575—TheConsumer Reports System andAdditional Local Information—Anumber of commenters asked that theregulations require consumer reports toinclude information about wage trendsand projections, occupations thatprovide high wages, in addition toinformation on growth occupations, orthose in growing sectors of theeconomy.

Response: We agree that suchinformation is valuable to individuals indetermining which occupations andtraining to pursue. Section 663.570encourages States and Local Boards tomake program specific information onwage trends and projections available inthe consumer reports. Section 663.575permits Local Boards to supplement theinformation on the State list withinformation on training linked tooccupations in demand in the localareas. This kind of information isreadily available since information onjob vacancies, occupations in demand,and the earnings and skill requirementsof such occupations is required as a coreservice available to the general publicand to all WIA clients under§ 663.240(b)(5). No change has beenmade to the Final rule.

Several commenters asked that‘‘program entrance requirements’’ beadded to the list of information that canbe included in consumer reports in§ 663.570 and further suggested thatinformation be required to be presented‘‘in user-friendly format and language,taking into consideration the literacy

levels, languages and developmentalstages of the communities to be served.’’In addition, a few commenters askedthat the regulations mention thatinformation about nontraditionaloccupational training and placement ofwomen in nontraditional jobs bespecifically identified as appropriateinformation related to the objectives ofthe Act.

Response: We agree that programentrance requirements and the use of auser-friendly format and language arehighly valuable to assist adults ordislocated workers to fully understandthe options available in choosing aprogram of training services. States andLocal Boards should assure that asmuch information as possible isaccessible to anticipated users of ITA’sand key populations who use suchinformation as part of the core servicesavailable in the local One-Stop system.It is up to States and Local Boards todetermine the types of information to berequired; we do not believe it isappropriate to specify requiredinformation in the regulations. Inmaking such determinations, weencourage States and Local Boards toconsider whether to highlightinformation on specific types ofprograms, such as nontraditionaloccupational training for women. Nochange has been made to the Final rule.

Section 663.585—Providers Outsidethe Local Area and ReciprocalAgreements with Other States—Onecommenter asked that we add languageto § 663.585 on portability ofapprenticeship skill credentials, toassure that individuals registered in anapprenticeship program in one Statewould be deemed registered in anaccredited program in other States.

Response: WIA does not addressrecognition of individuals’ registrationstatus by apprenticeship programs indifferent States. Rather, the Act permitsreciprocal agreements among States sothat individuals with ITA’s can useproviders in other States. If such anagreement had been made, the ability ofindividuals to participate in otherStates’ programs would depend onwhether those programs were includedon the State list and the program’s ownpolicies regarding recognition of skillattainments and credentials from otherprograms. Questions of the portability ofcredentials in the apprenticeship systemare the province of the Bureau ofApprenticeship and Training. Nochange has been made to the Final rule.

Section 663.590—Community-BasedOrganizations—One commenterexpressed gratitude that the regulationsclarify that CBO’s can be determined



eligible and they and their programsincluded on the State and local lists.

Section 663.595—Requirements forProviders of OJT and CustomizedTraining—One commenterrecommended that the Governor solicitcomments from business and labororganizations on the development ofperformance information for OJT andcustomized training while anothercommenter suggested that it wasinadvisable to disseminate informationon the performance of employers, sincemany employers would be unwilling toparticipate if their identity was to bemade known to the general public.

Response: There is nothing topreclude Governors from solicitingcomments from business and labor indeveloping these performancerequirements and learning ifdisseminating performance informationwould be a deterrent to other employersand it would be consistent with both theprocess for developing provider andprogram eligibility procedures and thegeneral intent of WIA to promoteopenness and consultation to do so.Governors need to consider the impactof requiring performance information interms of employer participation,particularly since employer-providedtraining has, in the past, been aneffective method for providing training.However, if the Governor determinesthat performance information must becollected and the criteria to be met,One-Stop operators must collect suchinformation, determine if performancecriteria are met, and disseminateinformation on employers that meet thecriteria. We note that information doesnot have to be disseminated onemployers that do not meet Governor’scriteria under the current regulation. Nochange has been made to the Final rule.

One commenter noted that thePreamble to the Interim Final rule, page18673, column three, lines 8–11, shouldhave said that the Governor has theoption to require performanceinformation of providers of OJT andcustomized training.

Response: We agree that the Preamblewas in error. It should have said thatGovernors may require performanceinformation.

Subpart F—Priority and SpecialPopulations

1. Priority Under Limited AdultFunding: This subpart containsrequirements related to the statutorily-required priority for the use of adultfunds, authorized under WIA section133(b)(2)(A) or (3), when funds arelimited. WIA section 134(d)(4)(E) statesthat in the event that funds allocated toa local area for adult employment and

training activities are limited, priorityshall be given to recipients of publicassistance and other low-incomeindividuals for intensive services andtraining services. The appropriate LocalBoard and the Governor must direct theOne-Stop operators in the local areawith regard to making determinationsrelated to such priority. We assume thatadult funding is generally limitedbecause there are not enough adultfunds available to provide services to allof the adults who could benefit fromsuch services. However, we alsorecognize that conditions are differentfrom one area to another and fundsmight not be limited in all areas.Because of this, the regulation requiresthat all Local Boards must consider theavailability of funds in their area. Inmaking this determination, theavailability of other Federal funding,such as TANF and Welfare-to-Workfunds, should be taken intoconsideration. Unless the Local Boarddetermines that funds are not limited inthe local area, the priority requirementwill be in effect. States and Local Boardsmust work together to establish thecriteria that must be used in making thisdetermination. States and Local Boardsalso may administer their priority foradult recipients of public assistance andother low income adults so as not topreclude providing intensive andtraining services to other individuals.

We received a substantial number ofcomments on the priority issue. Manycommenters voiced their support forinterpretation that adult funds willgenerally be limited and for clarifyingthe State’s and local areas’ role inprioritizing the use of these funds forTANF recipients and other low-incomeindividuals. Many other commentersbelieved that we should not write anyregulations at all on this section of thestatute.

Response: We believe that theinterpretation of this requirement is ofsuch importance that there must beregulations. Section 663.600 interpretsthe statutory language that providesStates and Local Boards with theauthority to determine the criteria to beapplied when making the determinationthat there are sufficient funds availableso that the priority is not in effect. Nochange has been made to the Final rule.

Some commenters requested furtherguidance and technical assistanceregarding the process described at§ 663.600(b), (c), and (d) that permits thepriority for services to the recipients ofpublic assistance and low incomeindividuals to be exercised while stillserving other eligible individuals. Anumber of these commenters supportedthe ‘‘cone of service’’ concept that

provides universal service to the largestnumber of individuals and, through aprocess of determining individuals’employment service needs and theireligibility, leads to reduce numbers ofindividuals receiving services as theservices become more staff intensive,longer in duration, and more costly.They asked that priority guidance bebased on this concept.

Response: In general, § 663.600(d)clarifies that the process for determiningwhether to apply the priorityestablished under paragraph (b) doesnot necessarily mean that onlyrecipients on public assistance andother low income individuals mayreceive WIA adult funded intensive andtraining services when funds aredetermined to be limited in a local area.The Local Board and the Governor arespecifically authorized to establish aprocess that gives priority for services torecipients on public assistance andother low income individuals and thatalso serves other individuals meetingeligibility requirements.

We used the ‘‘cone of service’’concept to illustrate an estimateddistribution of service needs by One-Stop customers. It was not intended toconvey a scheme of priority of service.The distribution of service needs in alocal area may vary from the pure‘‘cone’’ in areas with a number of jobseekers with extensive barriers toemployment or in areas of highlyeducated, self-directed job seekers. The‘‘cone’’ illustration is not intended to beapplied as strict percentages of serviceprovision to the pool of eligiblescandidates for services. Rather eachlocal area must assess the needs of itsworkforce and determine the mostappropriate distribution of servicesagainst projected levels of service needs.However, recognizing the important rolethat the adult and dislocated workerfunds play in the One-Stop system,§ 662. 250(a) requires these programs toprovide all of the required core servicesin each of the comprehensive One-Stopcenters. The fact that WIA adult fundsmay be used to provide core services ona universal basis is one of the keyreform elements of the legislation, andaugments the investment traditionallyprovided by the Wagner-Peyser Act. Nochange has been made to the Final Rule.

Commenters expressed concern thatthe priority requirement would beimplemented by establishing anarbitrary minimum standard, such asestablishing a percentage of participantsor funds that must be targeted to TANFand other low-income job seekers,which could become a ‘‘check off’’rather than a thoughtful balancing ofneeds. Commenters also were concerned



that an arbitrary percentage not be usedto satisfy the priority requirement.

Response: While the regulationrequires that States and local areasconsider whether funds are limited, itgives them flexibility to determine thecriteria on which to base thedetermination, because local areas varywidely in the characteristics of theirwork force. We discourage States andlocal areas from setting an arbitrarypercentage of TANF and low-income jobseekers to be served could result insufficiently skewing the distribution ofservices relative to the workforce’sneeds that differences in the severity ofservice needs would not necessarily bereflected in the process. We believe thatthe present language in the regulationspermits the maximum flexibility in thedesign of the priority process andprovides a sufficient framework toimplement priority of service for publicassistance recipients and low incomeindividuals consistent with the Act. Weexpect that States and local areas willtake seriously the responsibility todevelop effective priority criteria, andbelieve that the public input generatedthrough the local planning process willresult in criteria that effectively servethe needs of the local area. No changehas been made to the Final rule.

Other commenters requestedassurance in the regulations that if localentities determine that there is notlimited funding, that we would notreevaluate their determination at a laterdate and find the local area out ofcompliance.

Response: The regulations, at§ 661.350(a)(11), require that the localworkforce investment plan include adescription of the criteria to be used bythe Governor and the Local Board,under § 663.600, to determine whetherfunds allocated to a local area for adultemployment and training activitiesunder WIA §§ 133(b)(2)(A) or (3) arelimited, and the process by which anypriority will be applied by the One-Stopoperator(s). The local plan is subject topublic comment as well as review andapproval by the Governor. Uponapproval by the Governor and localimplementation of its prioritydetermination, it is expected that thelocal workforce staff will continue tomonitor workforce employment andtraining population needs andconditions to ensure that the prioritydetermination continues to beappropriate. Later modifications to theplan would require public comment. Nochange has been made to the Final rule.We recognize that this will be an areaof interest to the Department andnational policymakers and as such,State and local areas can expect that it

will be evaluated during theimplementation studies.

Commenters suggested that we addlanguage to the regulations that wouldrequire the mix of individuals served bythe local One-Stop system to reflect thedemographic characteristics of theeligible population in the communityand that the local plan provide aninterpretation of the priority as appliedto the demographics of the area.

Response: The Department has anobligation, as part of its oversightresponsibilities, to determine whether aparticular function, e.g., servicedelivery, is consistent with the intent ofthe Act and regulations. Non-discrimination and equal opportunityrequirements and procedures, includingcomplaint processing and compliancereviews, are administered and enforcedby our Civil Rights Center. Regulationsimplementing the requirements of WIAsection 188 are published at 29 CFR part37. It should be noted that except whereservice to specific populations isauthorized by statute (such as in WIAsection 166), it is unlawful under WIAsection 188(a)(2) and 29 CFR 37.6(b)(1)–(6) for One-Stop systems to usedemographic characteristics todetermine which individuals willreceive services. However, under 29CFR 37.42, One-Stop systems must dooutreach to various populations, toensure that members of thosepopulations are aware of the programsand services provided by the systems.No change has been made to the FinalRule.

We received a number of commentsabout the definition of ‘‘publicassistance’’ as it relates to individualsserved under the priority provision.Commenters stated the belief that whileapplication of the priority could resultin improved access to persons withdisabilities, the potential for thisincreased access is dependent, to somedegree, on the application of a broaddefinition of public assistance. WIAsection 101(37), defines publicassistance to mean ‘‘Federal, State orlocal government cash payments forwhich eligibility is determined by aneeds or income test.’’ The commentersrequested a definition that specificallyrecognizes other forms of assistancesuch as Medicaid, Medicare, SocialSecurity Disability Income (SSDI) andSupplemental Security Income (SSI) aswell as ‘‘other funding used heavily bypersons with disabilities.’’

Response: A definition of the term‘‘public assistance’’ developed by Statesand local areas that includes theavailability of other Federal, State orlocal government cash payments to anindividual based on a needs or income

test would be consistent with WIArequirements. The statutory definitionof ‘‘public assistance’’ at WIA sec.101(37) contains a two-part test. Theprogram must provide ‘‘cash payments’’and eligibility for the program must bedetermined by a ‘‘needs or income test.’’Under this definition, cash payments,such as SSI, state payments toindividuals with a disability, and localgeneral relief payments to homelessindividuals would meet both parts ofthe statutory definition of publicassistance.

On the other hand, the statute wouldnot permit a state or local definition thatincluded programs providing benefitsthat are not cash payments, or programsthat are not needs or income-based. Forexample, SSDI payments are not incometested, and, therefore, cannot beconsidered public assistance underWIA. However, as a practical matter,SSDI beneficiaries may still qualify forpriority under WIA. For example, SSDIbeneficiaries might be determined to beeligible under the priority for WIAservices as ‘‘other low incomeindividuals’’ based on their income,under 20 CFR 663.640, which providesfor the individual with a disability to beconsidered a low income individualeven if the family income does not meetthe income eligibility criteria when theindividual’s own income meets theincome criteria. Similarly, Medicaid andMedicare benefits are not consideredpublic assistance as defined under WIA.Medicare is a medical insurance forwhich individuals are eligible basedtheir having attained the age of 65 andcontributed to the fund during theiremployment. There is no needs orincome test to determine an individual’sreceipt of Medicare benefits.Furthermore, while Medicaid eligibilityis dependent upon an income test, itfails to meet the second part of the WIAdefinition. Under Medicaid, there is nocash payment provided to theindividual, rather paymentsrepresenting reimbursements of medicalexpenses are paid directly to themedical services provider. However,individuals receiving Medicaid orMedicare payments may still bedetermined appropriate for the WIAservice priority as ‘‘other low incomeindividuals’’ based on their income. Nochange has been made to the Final rule.

2. Welfare-to-Work and TemporaryAssistance to Needy Families as Part ofOne-Stop: At § 663.620, the regulationdiscusses the relationship of theWelfare-to-Work program and theTemporary Assistance to NeedyFamilies (TANF) program to the One-Stop delivery system. Welfare-to-Workis a required partner to which the One-



Stop partner regulations apply. TheTANF agency is specifically suggestedas an additional partner. Both programscan benefit from close cooperation withthe One-Stop delivery system becausetheir respective participants will haveaccess to a much broader range ofservices to promote employmentretention and self-sufficiency.

A commenter suggested that§ 663.620(a), which provides thatWelfare-to-Work participants may bereferred to receive WIA training, shouldinclude a statement that such fundingassistance is not available underWelfare-to-Work or should clarify that§ 663.620 is an exception to§ 663.310(d), if that is the intent.

Response: Section 663.310(d)provides that training services areavailable to adults who ‘‘are unable toobtain grant assistance from othersources to pay the costs of suchtraining’’ and notes as an example ofother grant assistance, Federal PellGrants. It is not intended that thissection limit ‘‘other grant assistance’’ toonly Federal Pell Grants, rather it isexpected that access to other grant fundsthat will maximize the availability ofWIA funds so that the broadest numberof individuals may be served. ‘‘Othergrant assistance’’ funds would beconsidered as additional trainingresources for individuals requiringtraining. Such funds could include notonly Federal Pell Grants, but alsoWelfare-to-Work grant funds (which,under recent amendments may be usedto provide limited occupationaltraining), State education grants anddislocated worker funds where such anapplication is appropriate. The languagein § 663.310(d) has been changed toprovide Welfare-to-Work and otherexamples in addition to the Pell Grantreference as appropriate to the eligibilityof the individual involved for othertraining fund assistance.

Subpart G—On-the-Job Training andCustomized Training

Sections 663.700 through 663.720 arethe regulatory provisions for conductingon-the-job (OJT) and customizedtraining activities. They include specificinformation regarding general, contract,and employer payment requirements.Unlike JTPA, WIA does not limit OJT tosix months. However, as specified inWIA § 101(31)(C), it is limited induration as appropriate for theoccupation being trained for. Section663.705 establishes requirements thatpermit OJT contracts for employedworkers.

One commenter supported the brevityof the regulations related to OJT. Asecond commenter apparently

construed the language in § 663.700(a)that states that, ‘‘A contract may bedeveloped * * *’’ to mean that the useof contracts for the development anddelivery of OJT is optional.

Response: The language in§ 663.700(a) has been changed to clarifythat OJT must be provided through acontractual arrangement as an exceptionto the ITA requirement under WIAsection 134(d)(4)(G)(ii)(I). We believethat written agreements are necessary toensure that the requirements of OJT aremet. The regulations, in § 663.700 (b)and (c), establish minimal requirementsfor OJT contracts. OJT contracts mustensure that participants are provided astructured training opportunity inwhich to gain the knowledge andcompetencies necessary to be successfulin the occupation in which they receivetraining.

That same commenter also suggestedthat the regulations be amended torequire that the OJT contract containdetailed information on the skills andcompetencies to be acquired, the timeframe for acquiring them, and sufficientdocumentation to demonstrate thatworkers received bonafide training andacquired the competencies.

Response: Generally, we believe thatStates and local areas should have theflexibility to determine the informationneeded for inclusion in the required OJTcontracts. Therefore, we have notmandated that the contracts containdocumentation that the competenciesare acquired. However, in order toensure that workers and employers havea common understanding of the goalsand purpose of the OJT assignment, webelieve that certain general terms shouldbe reduced to writing. Accordingly, wehave amended § 663.700(c) to requirethat the OJT contract identify theoccupation, the skills and competenciesto be learned and the length of time thetraining will be provided.

We received comments whichrecommended that the regulationsrequire local programs, in entering intoOJT contracts or undertakingcustomized training, give priority toemployers who: offer wages and benefitsthat lead to family self sufficiency;ensure long term self sufficiency fortheir employees; exhibit a strong patternof union management cooperation; andafter upgrading existing employeesthrough OJT, backfill vacancies withpublic assistance recipients and otherlow income persons.

Response: We have chosen not tolimit local options by specificallyidentifying priorities for the selection ofsuch employers. However, Local Boardsmay consider these and other factors inselecting employers to provide training

opportunities that will assist in theirefforts to provide services that meet orexceed the performance objectivesregarding employment leading to selfsufficiency and job retention. No changehas been made to the Final rule.

Commenters recommended that theregulations be revised to eliminate fromconsideration for an OJT contract or forcustomized training any employerwhich has violated: anti-discriminationstatutes; labor and employment laws;environmental laws; or health andsafety laws.

Response: We concur that Federalgrant funds should not be used toengage employers that have violatedFederal law. Such information shouldbe available under informationrequirements at 29 CFR 37.38(b). Weencourage States and Local Boards torequire a written assurance by apotential employer, that no suchviolations have occurred within somereasonable period of time. It would alsobe appropriate to obtain writtenassurance from the employer that thetraining to be provided will be inaccordance with WIA § 181(a)(1)(A) and§ 667.272 for wage and labor standards,and WIA § 181(a)(2) and § 667.274(a) forhealth and safety standards.

29 CFR 37.20(a)(1) contains anassurance regarding nondiscriminationand equal opportunity. Under 29 CFR37.20(a)(2), this assurance is consideredincorporated by operation of law, andmay be incorporated by reference, indocuments that make WIA Title Ifinancial assistance available, such asOJT contracts.

A commenter recommended that weadd a requirement that employers berequired to retain, or transition to newupgraded jobs with wages and benefitscommensurate with their new skills,those workers who receive customizedretraining.

Response: WIA § 181(b)(2) and 20CFR 667.270 establish safeguards forworkers to ensure that participants inWIA employment and training activitiesdo not displace other employees. Theseprotections may affect immediateopportunities for workers receivingcustomized training to ‘‘transition tonew upgraded jobs.’’ However, LocalBoards may establish policiesconcerning the selection and non-selection of employers for the OJT andcustomized training programs. Weencourage the development of policiesthat maximize the opportunitiespresented by funding upgrade skilltraining on-site, which, uponcompletion of the training, will resultnot only in a more highly skilledworkforce, but also in new entry leveljobs for additional program participants.



We have made no change to theregulations.

A commenter requested that theregulations require that a system be inplace to assure that customized trainingfunds are used to supplement ratherthan supplant an employer’s owntraining.

Response: We do not believe it isnecessary to require such a system. Withthe limited funding available fortraining, issues of maintenance of effortor substitution of public funds fortraining previously funded by theemployer will most likely be consideredan important factor in a local or statepolicy for the selection of employers forcustomized training. We have made nochange to the regulations.

A commenter suggested that theperformance outcomes of employerswho have OJT contracts should beconsidered public documents and madeavailable for review and comment. Atthe same time, the commenter cautionedthat the confidentiality of participantrecords must be preserved.

Response: Performance informationon providers of OJT and customizedtraining is collected and disseminatedunder the eligible provider requirementsof § 663.595.

A commenter recommended that wemodify the regulations to require thatlocal programs conduct retentionservices with individuals placed in OJTto determine whether the OJTrequirements and nondiscriminationand other employment rights aresatisfied.

Response: As discussed above, all OJTcontracts are subject to the workerprotection requirements set forth inWIA sections 181(a)(1) (A) and (B), (b)(2), (3), (4) and (5), and 188. In addition,we believe that monitoring of OJTcontractors must include review ofselection patterns and other areas ofpotential concern regarding trainees’civil and other employment rights(consistent with the requirements of 29CFR 37.54(d)(2)(ii)) to ensure the qualityof the One-Stop operator’s selection oftraining opportunities. No change hasbeen made to the regulations.

A commenter suggested that to assurecompliance with WIA section 181(b)(7),OJT and customized training contractsbe required to include a provisionguarantees that customized trainingfunds or subsidies will not be useddirectly or indirectly to assist, promoteor deter union organizing.

Response: We don’t believe it isappropriate to mandate the inclusion ofa particular provision in these contracts.However, we have specificallyidentified this prohibition in new

§ 663.730 to ensure that this informationis readily available to practitioners.

Several commenters urged that wedrop the requirements in §§ 663.705 and663.720, that in order for employedworkers to be determined eligible forOJT and for customized training theymust not be earning a self-sufficientwage as determined by the Local Board.The commenters observed that there isno specific wage criterion on OJT andcustomized training eligibility in WIA,and that it would limit customizedtraining available for skill upgrading fornew technology and new job skillsnoted in § 663.720(c). The commentersbelieved that such a limitation oncustomized training could also affect thelinkages with employers and economicdevelopment efforts.

Response: The Act, in sections 134(d)(3)(A)(ii) and (d)(4)(A)(i), providesthat one of the eligibility criteria forintensive and training services foremployed individuals is that they needsuch services in order to obtain or retainemployment that allows for self-sufficiency. These criteria enableemployed adults in entry level jobs toreceive those services to initiate thesteps toward a career or to obtain thoseskills necessary to improve their earningcapacity in another job to assist them inattaining self-sufficiency. Therefore, nochange has been made to the Final rule.However, this eligibility requirementdoes not apply to training provided aspart of the Statewide workforceinvestment activities under 20 CFR665.210(d), which provides forestablishing and implementinginnovative incumbent workers trainingprograms.

We received a comment requestingthat we add language to the regulationsto assure that labor organizations whooperate training programs be consideredeligible to operate customized trainingprograms.

Response: The definition ofcustomized training, at § 663.715, doesnot limit providers of customizedtraining to employers, but provides thatit be ‘‘conducted with a commitment bythe employer to employ an individualon successful completion of thetraining, and * * * for which theemployer pays for not less than 50percent of the training.’’ Neither the Actnor regulations preclude any specificorganization which meets the criteriaestablished by local areas from being aprovider of a customized trainingprogram. Because a wide range ofprograms and providers are available,we have decided not to identify anyspecific type of program or provider inthe regulations.

Subpart H—Supportive Services

1. Flexibility in the Provision ofSupportive Services: The regulations insubpart H define the scope and purposeof supportive services and needs relatedpayments and the requirementsgoverning their disbursement.Supportive services includetransportation, child care, dependentcare, housing and needs-relatedpayments that are necessary to enablean individual to participate in activitiesauthorized under WIA title I. We alsostrongly encourage Local Boards toestablish linkages with programs suchas child support, EITC, Food Stamps,Medicaid, and the Children’s HealthInsurance Program, which also serve askey supports for customers making thetransition to self-sufficiency. Afundamental principle of WIA is toprovide local areas with the authority tomake policy and administrativedecisions as well as the flexibility totailor the workforce investment systemto meet the needs of the localcommunity. To ensure this flexibility,the regulations afford local areas thediscretion to provide supportiveservices as they deem appropriate withlimitations only in the areas defined inthe Act. Local Boards are required todevelop policies and proceduresaddressing coordination with otherentities to ensure non-duplication ofresources and services, as well as anylimits on the amount and duration ofsuch services. Attention should be givento developing policies and proceduresthat ensure that the supportive servicesprovided are not available through otheragencies and that they are necessary forthe individual to participate in title Iactivities.

We received a comment suggestingthat States must be encouraged toprovide incentive and performancerewards to those local areas whichprovide substantial supportive services.

Response: States certainly may chooseto spend Statewide reserve funds on thistype of incentive award. However, webelieve that amending the regulations toencourage States to provide incentiveand performance rewards to local areasfor supportive services is not consistentwith the principle of granting discretionto Local Boards to determine theappropriate mix of services, includingprovision of supportive services, fortheir area based on their assessment oflocal needs and resources. No changehas been made to the regulations.

A comment asked that the localsupportive services policy be requiredto address service delivery andprocedures for referrals.



Response: Although Local Boards arerequired to adopt policies that ensurecoordination of any supportive servicesprovided, we have not mandated thatthe policy specifically address thedelivery of such services. The inclusionof such a mandate, or the substitution of‘‘must’’ for ‘‘should’’ with respect toreferral procedures in the context of thisregulation would be inconsistent withthe principle of granting local discretionin the provision of supportive services.No change has been made to the Finalrule.

2. Needs-Related Payments: Sections663.815 through 663.840 addressrequirements relating to needs-relatedpayments. Section 663.825, inparticular, deals with needs-relatedpayments to dislocated workers. Studiesshow that early entry into training fordislocated workers who require it is akey factor in reducing the period ofunemployment during the adjustmentprocess. Early intervention strategiesand policies are best implementedthrough quality rapid responseassistance which includescomprehensive core services, and theprovision of other reemploymentassistance, including intensive andtraining services, as soon as the needcan be identified, preferably beforelayoff. The statute authorizes all levelsof assistance under title I of WIA tomany workers six months (180 days)before layoff, or at least as soon as alayoff notice is received. Providing theseworkers with access to qualityinformation regarding all adjustmentassistance available in the community,including any deadlines that must bemet, is critical for workers to makeintelligent reemployment choices. Thus,any concerns that the enrolled intraining requirement may limit thenumber of dislocated workers who areeligible for needs-related payments canbe resolved through the use of earlyintervention strategies.

A commenter asked that theregulations be changed to require thatLocal Boards must fund supportiveservices, and, particularly, needs-relatedpayments, when other resources are notavailable.

Response: WIA, at Section 134(e) (2)and (3) lists supportive services andneeds-related payments as permissibleemployment and training activities.Although we agree that supportiveservices and needs-related paymentsshould be provided with WIA fundswhen other funds are not available, wealso recognize that WIA recognizes thatLocal Boards or One-Stop operators mayhave to make hard decisions about theuse of limited WIA resources. To enablethem to make these hard decisions, WIA

makes the provision of supportiveservices a discretionary decision. Itwould be inconsistent with the Act andwith our principle of maximizingflexibility to create the requirement thecommenter requests. No change hasbeen made to the regulations. However,as a matter of policy, we will followState and local policy with respect toprovision of needs-related payments todislocated worker program participantsunder national emergency grantsoperating in a local area.

A commenter noted the different timerequirements for training enrollmentsfor TAA and NAFTA–TAA, ascompared to WIA, and asked that therequirements be aligned to permit morecomplete assistance to dislocatedworkers eligible for TAA and NAFTA–TAA.

Response: The eligibilityrequirements for TAA benefits andneeds-related payments are establishedby different authorizing statutes, andmay not be changed by theseregulations. As also noted above, earlyentry into training for dislocatedworkers needing it is a key determinantin reducing an individual’s period ofunemployment.

We received two other commentsabout the eligibility requirements fordislocated workers to receive needs-related payments found in § 663.825.One comment indicated that referencesto TAA seemed to be intended for TRA.A second comment noted a missingreference to training as an eligibilityrequirement for needs-related paymentsby those dislocated workers who areunemployed and who did not qualifyfor unemployment compensation ortrade readjustment allowances.

Response: Section 663.825 has beenrevised to change the incorrect referenceto ‘‘trade readjustment assistance’’ to‘‘trade readjustment allowances.’’However, difference in eligibilitycriteria for individuals who did notqualify for unemployment insurance ortrade readjustment allowances isrequired by WIA section 134(e)(3).

One comment was received in regardto § 663.840 asking that all needs-relatedpayments and support services‘‘packages’’ be required to becomparable to the applicable weeklylevel of the unemploymentcompensation benefit.

Response: WIA sets a maximum levelfor needs-related payments, but does notspecify a minimum level. As notedpreviously, we do not think it isappropriate to limit the flexibilitygranted to States and local areas bystatute.

Part 664—Youth Activities Under TitleI

IntroductionThe regulations for youth activities

reflect the intent of the legislation bymoving away from one-time, short-terminterventions and toward a systematicapproach that offers youth a broad rangeof coordinated services. This includesopportunities for assistance in academicand occupational learning; developmentof leadership skills; and preparation forfurther education, additional training,and eventual employment. Rather thansupporting separate, categoricalprograms, the regulations for youthactivities are written to facilitate theprovision of a menu of varied servicesthat may be provided in combination oralone at different times during a youth’sdevelopment.

The youth council, (the local entityresponsible for recommending andcoordinating youth policies andprograms), a new entity created in WIA,serves as a catalyst for this broadchange. The regulations support thatlegislative intent.

Flexibility for local program operatorsto conduct youth programs is key toWIA and these regulations. Weencourage local decision-making indeveloping policy, youth programdesign within the statutory framework,and determining appropriate programofferings for each individual youth. Weexpect that these programs andactivities will provide needed guidancefor youth that is balanced withappropriate consideration of eachyouth’s involvement in his or hertraining and educational plan. Further,the regulations support strongconnections between youth programactivities and the One-Stop servicedelivery system, so that youth learnearly in their development how toaccess the services of the One-Stopsystem and continue to use thoseservices throughout their working lives.

Subpart A—Youth CouncilsSubpart A explains the purpose of

youth councils which are created atsection 117(h) of the Act and discussedin 20 CFR 661.335 and 661.340 of thelocal governance regulations in part 661.The youth council is a new feature ofthe workforce investment system thathelps develop youth employment andtraining policy, brings a youthdevelopment perspective to theestablishment of that policy, establisheslinkages with other local youth servicesorganizations, and takes into account arange of issues that can have an impacton the success of youth in the labormarket.



There were several comments aboutthe youth councils. One commentersuggested requiring that the youthcouncil include representatives fromorganized labor, particularly fromrecognized apprenticeship programsand teachers’ unions.

Response: As stated in WIA section117(h)(1), members of the youth councilare appointed by the Local Board incooperation with the chief electedofficials(s) (CEO) in the local area.Among other categories of youth councilrepresentatives, paragraph (2) of WIAsection 117(h) states that the youthcouncil must include Local Boardmembers described in paragraph (A) or(B) of section 117(b)(2) with specialinterest or expertise in youth policy.Therefore, union members (includingthose who may be from recognizedapprenticeship programs or teachers’unions) who are members of the LocalBoard and have an interest or expertisein youth issues may be appointed to theyouth council under this provision.Additionally, clause (B) of WIA section117(h)(2) provides that the chairpersonof the Local Board, in cooperation withthe CEO’s, may appoint other‘‘appropriate’’ individuals to the youthcouncil. In short, the Act alreadyprovides avenues through whichrepresentatives of organized labor maybe appointed to the youth council.Because we believe that local areasshould have as much discretion aspossible in selecting members of theyouth council to best serve theircommunities, we do not feel it isappropriate to prescribe requirements inaddition to those in the Act. No changehas been made to the regulation.

Other commenters asked that werequire that youth be included as fullmembers of these councils at all levels.A number of other commentersencouraged us to require that youthwith disabilities are members of theyouth councils

Response: While there is no specificrequirement for the appointment ofyouth, including youth with disabilities,to the youth council, there is also noprohibition to naming them to the youthcouncil. In fact, 20 CFR 661.335(a)requires representation by individualswith experience relating to youthactivities and 20 CFR 661.335(c)authorizes the Local Board Chair andCEO to appoint such other individualsas they determine appropriate. Either ofthese provisions could support theappointment of youth, includingparticipants and youth with disabilities,to the youth council. Furthermore, WIAsection 129(c)(3)(C) and § 664.400(f)provide that Local Boards must ensurethat youth participants are among the

individuals who are involved in boththe design and the implementation of itsyouth program. Youth with disabilitiesmay, of course, be included among theyouth participants who are designatedto be involved in this process. We agreewith the commenters that Local Boardsshould seek to involve a diverse cross-section of its youth population in theplanning and design of activities,however, we feel that adding additionalyouth council requirements beyondthose already in the Act and theregulations, is neither necessary norappropriate. As discussed above, webelieve that local areas should have asmuch discretion as possible, in selectingmembers of the youth council to bestserve their communities. The issue ofyouth council membership is alsodiscussed in 20 CFR 661.335, as well asthe preamble discussion of that section.No change has been made to theregulations.

Section 664.110 discusses oversightresponsibilities for youth programs andactivities. Working with the youthcouncil, the Local Board hasresponsibility for oversight of youthprograms. As required by WIA section117(d)(4), § 664.110(b) requires localprogram oversight to be conducted inconsultation with the CEO. In order tomake § 664.110(c) consistent with§ 664.110(b), a commenterrecommended revising § 664.110(c) toadd that the Local Board should consultwith the CEO about delegating itsresponsibility for oversight of youthprograms to the youth council.

Response: We agree that it may beadvantageous for Local Boards, inconsultation with local area CEO, todelegate the responsibility for oversightof youth programs to youth councilswhich have expertise in youth issues, asis permitted by § 664.110. Section664.110(c) has been revised to reflectthis comment.

A commenter requested that weprovide guidance to youth councils onidentifying and certifying eligible non-traditional training providers to ensurethat youth are able to pursue non-traditional employment. The commenterfeels that more information is needed onnon-traditional training, specificallyguidance on non-traditionalemployment for women.

Response: We support the idea thatlocal youth programs can benefit bymaking non-traditional trainingopportunities available to participants,and encourage States to consider non-traditional service providers among thelists of service providers designated inlocal areas. In addition, should the needarise, we will consider addressing theissue of non-traditional training

providers and eligible providers listthrough subsequent guidance andtechnical assistance. At this time,however, we do not see a need foradditional guidance.

Subpart B—Eligibility for YouthServices

Subpart B provides regulations underwhich youth are determined eligible forWIA youth services. A commenterrequested that we amend the criteria in§ 664.200 so that a low-income youth,regardless of any other barriers mayparticipate in the youth employmentprograms funded through WIA. Thecommenter feels that youth served bytheir agency do not meet the barrier toemployment eligibility criteria to allowthem to participate in WIA youthactivities.

Response: We cannot accommodatethe commenter’s concerns. The Actspecifically requires that, to bedetermined eligible, a low income youthmust have at least one of the barrierslisted in section 101(13)(C) of the Actand § 664.200(c) of the regulations.

We received a comment suggestingthat we make the definition of basicliteracy skills at § 664.205 consistentwith the definition of basic skillsdeficient in section 101(4) the Act, inorder to eliminate confusion.

Response: Section 664.205 is revisedto better align the definition of thesetwo terms by using the same grade levelcriterion for both terms. While we madechanges to better align the definitions,the two terms are not identical. Section101(4) of the Act refers to a definitionof basic skills deficient for use as one ofthe categories of youth not meeting theincome eligibility test who may beserved with up to 5% of youth funds,as well as one of the standards fordetermining ‘‘out-of-school-youth.’’Section 664.205 addresses the criterionfor documenting general eligibilitywhen determining whether youth aredeficient in basic literacy skills. Theregulatory definition of ‘‘deficient inbasic literacy skills’’ is based on thestatutory definition of the term‘‘literacy’’ found in WIA section 203 andcross-referenced in WIA section 101(19).Therefore, the terms and theirdefinitions are not identical. However,§ 664.205(a) provides authority forStates and local areas to define the term‘‘deficient in basic literacy skills,’’ solong as certain minimum criteria aremet. The flexibility provided at§ 664.205(a) as revised, would allowStates and/or local areas which chooseto do so to define the term in a way inwhich an individual who is determinedto be ‘‘deficient in basic literacy skills’’on the basis of the grade level criteria,



will also be considered to be ‘‘basicskills deficient’’ for purposes ofdetermining whether the out-of-schoolyouth or 5% youth standards are met.

Under section 101(13)(C)(vi) of theAct, a low income youth is eligible forservices if he or she requires additionalassistance to complete an educationalprogram, or to secure and holdemployment. We envision that LocalBoards will define this term, however,under § 664.210, if the State sets policyregarding this provision, the policymust be described in the State Plan.

Section 664.215 requires that allyouth participants be registered bycollecting information for supportingeligibility determinations, as well asEqual Opportunity (EO) data. Wereceived a number of comments askingthat we make the policy that all youthmust be registered to participate inyouth programs consistent with theadult policy, allowing the sameexceptions to the registrationrequirement.

Response: While these commentersfeel that the registration policy for youthand adults should be the same, webelieve that the policy for youth shouldnot be changed because the basicapproach for serving youth differs fromadults. The difference in the registrationcriteria for youth and adults arises fromthe way in which an applicant enterseach program. WIA section 129(c)(1)makes it clear that each youthparticipant is to have an assessment anda service strategy, activities whichwould also require registration underthe Adult program. An adult may enterthe One-Stop and receive onlyinformational or self-help services, forwhich registration is not required. Themore individually-focused youthprogram does not envision these kindsof activities as part of entry. (Of course,a youth may avail him/herself ofinformational or self-help servicesthrough the One-Stop.) Therefore, nochange has been made to this section ofthe regulations.

EO data must be collected for everyindividual who is interested in beingconsidered for WIA title I financiallyassisted aid, benefits, services, ortraining by a recipient, and who hassignified that interest by submittingpersonal information in response to arequest by the recipient. See 29 CFR37.4 (definition of ‘‘applicant’’) and 29CFR 37.37. This includes all youthparticipants. We will issue furtherguidance regarding this data collectionrequirement.

Section 129(c)(5) of the Act providesthat up to five percent of youthparticipants served in a local area maybe individuals who do not meet the

income criterion for eligible youth, ifthey meet one or more of the criteriaspecified in section 129(c)(5)(A) through(H) of the Act, restated in theregulations at § 664.220. Local Boardsmay define the term ‘‘serious barriers toemployment’’ and describe it in theLocal Plan. One commenter alsosupported WIA’s requirements thatallow individuals with one or moredisabilities, including learningdisabilities, to be eligible under theexception to permit five percent ofyouth participants to be individualswho do not meet the income criteria.

Section 664.240 explains thateligibility for free school lunches is nota substitute for income eligibility underthe Act. When drafting the Interim FinalRegulations, we received suggestionsthat program operators be allowed touse eligibility for free lunch as asubstitute for determining eligibilityunder the Act, and encouraging us toseek a technical amendment to includesuch a provision in the legislation.Several commenters again maderequests that we pursue a technicalamendment on the free lunch andreduced lunch eligibility issue andsuggested that eligibility for theseprograms be used to determineeligibility for WIA youth services.

Response: We recognize theimportance of this issue, yet lackstatutory authority to change the Act’sincome eligibility requirements. Shouldsuch a change be made to the statute,§ 664.240 would be revised. We supporta technical amendment in this area, andhave discussed the issue withCongressional staff.

Section 664.250 provides that a youthwith a disability whose family incomeexceeds maximum income levels underthe Act may qualify for services if theindividual’s own income meets theincome criteria established in WIAsection 101(25)(F), or the eligibilitycriteria for cash payments under anyFederal, State or Local public assistanceprogram. (WIA section 101(25)(B).) Onecommenter strongly supported WIA’srecognition, in the Act and theregulations, of the need for youth withdisabilities to receive youth services.

Subpart C—Out of School Youth

Sections 664.300, 664.310, and664.320 address issues related to out-of-school youth. Section 101(33) of the Actdefines ‘‘out-of-school youth’’ as:eligible youth who are school dropoutsor who have received a secondaryschool diploma or its equivalent, but arebasic skills deficient, unemployed, orunderemployed. ‘‘School dropout’’ isdefined in WIA section 101(39) and

§ 664.310. Youth enrolled in alternativeschools are not school dropouts.

We received a number of commentsrequesting that we seek a technicalamendment to WIA that would allowyouth attending alternative schools to beincluded in the definition of ‘‘schooldropout.’’ The commenters felt that thiswould permit Local Boards to provideservices to more youth in alternativeeducational environments and to designprograms that take advantage of localresources and best meet the needs oflocal youth.

Response: While we recognize theimportance of local flexibility and ofserving youth in alternative schoolsettings, we lack statutory authority tochange definitions established under theAct. However, we have revised§ 664.310 to clarify that a youth’sdropout status is determined at the timeof registration. Therefore, an individualwho is out-of-school at the time ofregistration and subsequently placed inan alternative school, may beconsidered an out-of-school youth forthe purposes of the 30 percentexpenditure requirement for out-of-school youth.

We also received commentssuggesting that § 664.310 should make itclear that, for the purposes ofdetermining whether a youth in analternative school can be consideredout-of-school, their dropout statusshould be determined at the point ofintake.

Response: We agree. Section 664.310is revised to clarify that dropout statusis determined at the time of registration.

At least thirty percent of the totalyouth allocation (except for local areaexpenditures for administrativepurposes) must be spent on services forout-of-school youth. This 30 percent,like the remaining 70 percent, need notbe spent proportionally betweensummer and year-round activities. TheLocal Board, in consultation with thechief elected official, determines thedistribution of funds. There is noseparate summer program under WIA.Therefore, there is no exemption fromthe 30 percent requirement for fundsspent on summer employmentopportunities. A single allocation ofyouth funds, at least 30 percent ofwhich must be spent on out-of-schoolyouth, is available to local areas foryear-round and summer employmentopportunities.

Subpart D—Youth Program Design,Elements, and Parameters

The features of the youth programdesign are outlined in section 129(c) ofthe Act. While the Act specifies threeprogram design categories and ten



program elements, it permits individualprogram design flexibility indetermining the definition, scope, andcharacteristics of the elements.

A commenter suggested that, to avoidconfusion, we should clarify the numberof youth elements that are required andthe entity responsible for providing theten elements. The commenter alsosuggested replacing the term ‘‘localprogram’’ in § 664.410 with either ‘‘localworkforce investment board’’ or ‘‘localworkforce investment area’’ to identifythe entity responsible for making the tenelements available.

Response: WIA requires that LocalBoards must ensure that all ten elementsare available for youth in their localarea. To provide further guidance toassist Local Boards, we added a new§ 664.400 to define the composition of alocal youth program and to address thedifference between local programs andlocal program operators. This definitionclarifies that a local youth program mustinclude all the youth activities in a localarea, irrespective of the number ofoperators or alternative services. Inaddition, we redesignated § 664.400 ofthe Interim Final Rule as § 664.405 andhave added a provision which wediscuss below.

Redesignated § 664.405 discusses thethree categories required under WIAsection 129(c)(1) which provide theframework for youth program design.They are: (1) An objective assessment ofeach participant; (2) individual servicestrategies; and (3) services that prepareyouth for postsecondary educationalopportunities, link academic andoccupational learning, prepare youth foremployment, and provide connectionsto intermediary organizations linked tothe job market and employers.

A commenter asked us to clarify thatthe requirement, in WIA section 123,that eligible providers of only the tenrequired program elements be identifiedby awarding grants or contracts on acompetitive basis, does not apply to thedesign framework component of theprogram.

Response: Eligible providers of the tenprogram elements must be identified asrequired by WIA section 123; however,we have added a new paragraph (a)(4)to the redesignated § 664.405 to clarifythat this requirement does not apply tothe design framework of local youthprograms when the grant recipient/fiscalagent is the provider of the designframework activity. A similar exceptionin § 664.610 also applies to the grantrecipient/fiscal agent’s provision ofsummer employment activities.

A commenter requested that weclarify that developing a career goal foreach youth could be part of the

individual’s service strategy rather thanan immediate requirement to identify acareer goal because many young people14 years and above do not know whatthey want to do.

Response: We agree that developing acareer goal may be part of an individualservice strategy rather than animmediate requirement for youngeryouth. However, setting goals foryounger youth may reflect a careerinterest. Goals may change as a youthages and interests broaden as a result ofparticipation in workforce developmentactivities. Therefore, we believe localprogram operators should encourageyounger youth to identify careerinterests which may serve as a careergoal. We have added the phrase ‘‘age-appropriate’’ to redesignated§ 664.405(a)(2) to clarify that the careergoals selected should appropriate for theage of the youth participant.

Redesignated § 664.405(c) requiresLocal Boards to establish linkages toentities that will foster the participationof eligible youth. We received severalcomments stating that youth programsshould be designed to address the needsof teen parents (such as child care,flexibility in schedule), to combat theoccupational segregation whichcontributes to low wages of women andthat training should be evaluated foraccess to non-traditional jobs and careerpaths for women and girls. Thecommenters also suggested that we addlanguage to this section to provide forlinking youth programs witheducational institutions, child carefacilities, and other entities to meetwomen-specific needs.

Response: The final regulations, inredesignated § 664.405(a)(3), provide forlinking youth programs with otherentities to assist youth. Examples oflinkages are listed in § 644.405(c), butthe list is not exhaustive. Local Boardsmust ensure that there are appropriatelinks to entities that will foster theparticipation of eligible local area youth.Program operators may link theirprograms to entities such as local highschools, alternative schools, childcareagencies, vocational programs, and two-and four-year postsecondary institutionsthat provide services to address thespecific needs of the targetedpopulation, including teen parents, foreligible youth services. We agree withthe commenters about the importance ofthese linkages in fostering theparticipation of eligible youth, however,we do not want to be overlyprescriptive, decreasing the discretionof local areas in making such decisions.No change has been made in the finalregulations.

Section 129(c)(3) of the Act requiresthat Local Boards ensure that eligibleyouth receive information and referrals,including information on the full arrayof appropriate services available to themand referrals to appropriate training andeducational programs. Youth programproviders must ensure that eligibleapplicants who do not meet theenrollment requirements of theirprogram or who cannot be served bytheir program are referred for additionalassessment and program placement.This language is included inredesignated § 664.405(d) to emphasizethe importance of referrals as a part ofoverall youth program design. Tofurther promote the concept of seamlessOne-Stop service delivery, One-Stopoperators are encouraged to send thoseyouth assessments that are completed atthe One-Stop center to other trainingand educational programs to which theyouth is referred.

Section 129(c)(2) of the Act lists 10program elements that must be generallyavailable to youth through localprograms. A commenter asked forclarification on the number of youthelements required and whether theseelements must be provided to everyyouth participant.

Response: Section 664.410(a) makes itclear that the Local Board must ensurethat all ten elements are available foryouth in their local area. However,§ 664.410(b) provides that a localprogram is not required to provide allten program elements to everyparticipant. Local program operatorsmust determine what program elementswill be provided to each youthparticipant based on the participant’sobjective assessment and servicestrategy. We envision that each youthwill participate in more than one of theten program elements required as part ofany local youth program and all youthmust receive follow-up services. Forexample, even if it is determinedappropriate that a youth participate inonly summer employment activities, heor she would still receive at least 12months of followup services. Followupservice requirements are fully describedin § 664.450. Since the regulationsaddress this issue, no change isnecessary.

Sections 664.420 through 664.470further define and discuss five programelements: leadership development,positive social behaviors, supportiveservices, followup services, and workexperiences.

Under WIA section 129(c)(2)(F) and§ 664.410, youth programs must makeleadership development opportunitiesavailable. The Act gives the followingexamples of leadership activities:



community service and peer-centeredactivities encouraging responsibility andother positive social behaviors duringnon-school hours. Some additionalexamples of leadership developmentactivities are listed in § 664.420 whichelaborates on the definition ofleadership development opportunities.The development of leadership abilitiesmight address team work, decisionmaking, personal responsibility, andcitizenship training, as well as positivesocial behavior training in areas such aspositive attitudinal development, self-esteem building, cultural diversitytraining, and other skills and attributesthat would help youth to leadeffectively, responsibly, and byexample.

One commenter suggested that theexamples of leadership developmentopportunities should include actualopportunities for youth to assumeleadership roles, such as: involvingparticipants in program governance anddecision making, entrepreneurshiptraining and peer leadershipopportunities.

Response: The examples of leadershipdevelopment and positive socialbehaviors in § 664.420 are not intendedto be all inclusive, they are merelyexamples. Other kinds of leadershipdevelopment opportunities may beprovided at the discretion of the LocalBoard. The commenter provides goodexamples of the types of leadershipdevelopment opportunities LocalBoards may want to consider whendesigning their local youth programs.No change has been made in the finalregulations.

A commenter suggested that the rulesdefine ‘‘positive social behaviors’’ andmake it clear that positive socialbehaviors are outcomes of leadershipopportunities. The commenterrecommended a new definition ofpositive social behavior which includessome of the following activities:maintaining healthy lifestyles, includingbeing drug and alcohol free; maintainingpositive relationships with responsibleadults and peers; contributing to thewell-being of one’s community; voting;being committed to learning andacademic success; remaining non-delinquent; and postponed andresponsible parenting.

Response: We have added thesesuggestions to the list of positive socialbehaviors in § 664.430 because we thinkthat the original list of examples was toonarrow to reflect the full range ofpositive social behaviors. As a technicalcorrection, we have removed the phrase‘‘but not limited to’’ from this section.This does not change the meaning ofthis provision. Here, as throughout the

regulations, the term ‘‘include’’ is usedto indicate an illustrative, but notexhaustive list of examples.

Another of the ten required programelements is supportive services. Section101(46) of the Act defines supportiveservices to include services such astransportation, child care, dependentcare, housing, and needs-relatedpayments, that are necessary toparticipate in activities authorizedunder title I of the Act. Section 664.440elaborates on the definition ofsupportive services as it applies toyouth. Such services may include:linkages to community services;referrals to medical services; andassistance with work attire and work-related tool costs, including such itemsas eye glasses and protective eye gear.Child support, EITC, Food Stamps,Medicaid, and the Children’s HealthInsurance Program are among theprograms with which Local Boards areencouraged to coordinate. We havemade a slight modification to thissection which previously referred toassistance with transportation,dependent care and housing ‘‘costs’’.We have removed the reference to‘‘costs’’ for the services since WIA titleI funds may be used to provide servicessuch as on-site child care as well as todirectly provide or reimburse the costsof these services.

Section 664.450 requires thatfollowup services be provided to allyouth participants for not less than 12months after the completion ofparticipation, as appropriate. Theappropriate scope of followup servicesmust be based on the needs of theindividual participant. Followupservices have proved to be effective.Evaluation studies such as AbtAssociates’ Final Report on the NationalJTPA Study, have shown disappointingresults for short-term job trainingprograms for youth. In contrast,programs such as STRIVE and theChildren’s Village have shown muchsuccess with longer-term followupstrategies. A 1993 study by MDRCshowed that the programs of the Centerfor Employment Training, which featureclose ties to the private sector and astrong job placement component withfollowup with employers, increased theearnings of enrollees by $3,000 a yearover a control group during the last twoyears of a four-year evaluation.

Section 664.450(a)(1) provides thatfollowup may include leadershipdevelopment or supportive serviceactivities, as well as other allowableactivities, and provides additionalexamples of permissible followupservices. The list is intended to presentexamples of followup services; other

types of followup services may bedetermined at the local level.

Section 664.450(b) clarifies that allyouth participants must receive someform of followup services. Such servicesmust be for a minimum of 12 months.Followup services for youth whoparticipate in only summer employmentactivities may, however, be lessintensive than for those youth whoparticipate in other types of activities.Program operators are encouraged toconsider the intensity of the servicesprovided and the needs of theindividual youth in determining theappropriate level of followup services.

A commenter suggested revising thesentence referring to less intensivefollowup services for youth who haveonly participated in summeremployment opportunities, to say thatthe scope and intensity of thesefollowup services should be consistentwith each participant’s individualservice strategy.

Response: Section 664.450(b) alreadystates that the types of services providedand the duration of services must bedetermined based on the needs of theindividual. Therefore, we do not feelthat further clarification is required.Local programs will make thedetermination on the intensity offollowup services. However, we willprovide additional guidance on otheraspects of this subject through ourregular system of communication toStates and local areas for States that mayneed technical assistance.

Sections 664.460 and 664.470 addresswork experiences for youth. Workexperiences are planned, structuredlearning experiences that take place ina workplace for a limited period of time.The regulations do not specify aparticular time limit for workexperiences. A commenter requestedthat we place a maximum time limit onwork experiences (no more than 30days), and require that all workexperiences be paid, with priority givento employers who have evidenced acommitment to training for their ownworkers and union managementapproaches to training.

Response: We agree that Local Boardsshould make a point of establishingwork experiences opportunities foryouth with employers who havedemonstrated quality approaches totraining and labor management, but donot think it is necessary to mandate thisapproach. We believe, however, thatestablishing a regulatory time limit,requiring that all work experiences bepaid and giving priority to selectemployers is inconsistent with principleof local flexibility in designing



programs. No change has been made inthe final regulations.

As provided in Section 129(c)(2)(D) ofthe Act, work experiences may be paidor unpaid, as appropriate. A commentersuggested that we clarify that workexperiences are appropriate anddesirable activities for many youththroughout the year.

Response: We agree and have addedthe suggested language to § 664.460(c).

Section 664.460 provides that workexperiences may be in the private for-profit sector, the nonprofit sector, or thepublic sector, and gives examples of thetypes of activities that work experiencesmay include, such as internships andjob shadowing. A few commentersrecommended adding other examples to§ 664.600 to expand the types ofacceptable work experiences. Theysuggested that the definition of workexperiences should make it clear thatpaid or unpaid community serviceprograms, such as youth services orconservation corps, are valid examplesof work experiences, and suggested thatlanguage be added to encourage LocalBoards to maximize the use of paidwork experiences in summerconservation corps programs managedby qualified State, local, non-profit orFederal agencies, as key element orstrategy. In addition, a commenterproposed that the regulations encourageLocal Boards to maximize collaborationwith federal agencies that operatesummer youth conservation corpsprogram.

Response: We agree that paid andunpaid community service programsmay be appropriate types of workexperiences for youth, and haveamended the list of examples in§ 664.460(c) to include them. However,while we agree that youth conservationcorps may be one of the programs inwhich WIA youth participants gainwork experiences, we have refrainedfrom identifying particular types ofprogram providers throughout theregulations. Therefore, consistent withthe principle of maximizing State andlocal discretion, we have not specifiedthis program in the regulations.

A few commenters also endorsed theprinciple that decisions regarding OJTfor youth participants should be left toLocal Boards.

Response: We agree that the decisionabout when to provide OJT to youthunder age 18 should remain a decisionleft to Local Boards. While OJT is not anappropriate activity for most youthunder age 18, local programs maychoose to use this service strategy forsuch youth based on the needsidentified in an individual youth’sobjective assessment. Since § 664.460(d)

provides for local discretion in decidingwhen to use OJT, based on a youth’sservice strategy, no change is made tothe regulations.

Section 664.470 provides that youthfunds may be used to pay the wages ofyouth in work experiences, including inthe private, for-profit sector, underconditions designed to protect youthand incumbent workers when thepurpose of the work experiences is toprovide youth with opportunities forcareer exploration and skilldevelopment and not to benefit theemployer. If an unpaid work experiencecreates an employer/employeerelationship, federal wage standardsmay apply. This relationship isdetermined under the Fair LaborStandards Act.

One commenter asked that we clarifythe statement that the purpose of workexperiences is not to benefit theemployer although the employers may,in fact, benefit from activities performedby the youth, stating that § 664.460 (c)is ambiguous.

Response: The intent of workexperiences is to provide youth withopportunities for career exploration andskill development and to enhance theirwork readiness skills in preparation foremployment. While this is the primaryobjective of work experiences, werecognize that the employer may alsoreceive some benefit in the form of workbeing done or of recruiting a potentialnew employee. We believe that theregulations adequately explain this;therefore, no change has been made tothe regulations.

Subpart E—Concurrent EnrollmentUnder the criteria of section 101(13)

of the Act, an eligible youth is anindividual 14 through 21 years of age.Adults are defined in section 101(1) ofthe Act as individuals age 18 and older.Section 664.500(b) clarifies that eligibleyouth who are 18 through 21 years oldmay participate in youth and adultprograms concurrently, as appropriatefor the individual. Such individualsmust meet the eligibility requirementsunder the applicable youth or adultcriteria for the services received. Localprogram operators must identify andtrack the funding streams for servicesprovided to individuals who participatein youth and adult programsconcurrently, ensuring non-duplicationof services.

A commenter asked that we make itclear that out-of-school youth mayenroll in adult programs under Titles Iand Title II of the Act.

Response: We have revised paragraph(b) of § 664.500 to clarify thatconcurrent enrollment is allowable for

youth served in the adult program,dislocated worker program, adulteducation programs under title II ofWIA, and other programs, in order tobroaden options for serving youth.

A commenter suggested that youth co-enrolled in both youth and adultprograms should also be offered thecomplete services available to youth.

Response: We think the regulationsalready cover this suggestion sinceyouth enrolled in youth programs mustreceive an individual assessment andservice strategy based on their need,regardless of whether they are co-enrolled in an adult program. Theservice strategy should consider all theservice options available under both theyouth and adult programs.

Section 664.510 provides that ITA’sare not an authorized use of youthfunds. One commenter stated that WIAis silent on the use of ITA’s for youthand this should be a State or localdecision. This commenter felt that sinceit is allowable to enroll 18 year oldyouth in both youth and adult programs,the use of ITA’s should be allowed as anactivity for 18–21 year old youthenrolled only in youth funded activities.Another commenter asked that wereverse the rule disallowing ITA’s foryouth participants not eligible fortraining services under the adult anddislocated worker programs.

Response: The ITA is the currency ofa market-based system that enablesadults and dislocated workers to selectthe service providers most suited totheir needs based on information aboutthe past performance of such providers.While the Act does not mention ITA’sin its youth provisions, it does requirethat providers of the ten required youthprogram elements be competitivelyselected. The competitive selectionrequirement effectively precludes theuse of ITA’s since providers are selectedby the Local Board, rather than by theparticipant. Thus, because the supply ofproviders may be limited, we interpretthe Act to preclude ITA’s for youthbelow age 18. Youth aged 18 through 21can access ITA’s under the adult ordislocated worker program, ifappropriate. Accordingly, we have notchanged this section.

Subpart F—Summer EmploymentOpportunities

Subpart F provides clarification aboutsummer employment opportunities foryouth. Commenters expressed concernthat WIA does not have a separatefunding authorization for summer youthemployment and training programs. Acommenter also felt that without aseparate authorization, the summeryouth employment program could find



itself in some peril in the future andsuggested that regulatory language beadded to preclude any diminution inthis highly important activity.

Response: The commenters are correctthat the summer youth employment andtraining program is no longer aseparately funded activity. Rather,summer employment opportunities areintended to be part of a comprehensivearray of services available to youth in alocal area. Although all Local Boardsmust offer summer employmentopportunities for eligible youth as oneof the ten required program elementslisted in WIA section 129(c)(2) and§ 664.420, the proportion of youth fundsused for summer employment isdetermined by the Local Board inconsultation with the chief electedofficial. Section 664.600 elaborates onthe activities that must be included inall summer employment opportunities,including direct linkages to academicand occupational learning, as well asfollowup services for at least 12 months.Accordingly, we believe it would becontrary to the intent of the Act andinconsistent with local flexibility toregulate the level of activity required forany of the ten program elements,including the summer youthemployment opportunities. We will,however, work with States and localareas to assist them with making thetransition to providing summeremployment activities as part of acomprehensive system of youthservices. For example, we issuedTraining and Employment GuidanceLetter (TEGL) 3–99 in January 2000, toprovide guidance to States and localareas on implementing comprehensiveyouth services under title I of WIAduring the summer of 2000. Thisguidance is available on the Internet atwww.usworkforce.org. Therefore, achange in the regulations is notnecessary.

A commenter also asked that a newparagraph (e) be added to § 664.600 torequire each local area to report yearlyon the number of youth participantswho are provided summer employmentopportunities.

Response: Section 183 of the Actauthorizes the Secretary to monitor allrecipients of financial assistance, whichwould include grant recipients thatoperate summer employment activities.We are in the process of developing areporting system to collect informationon WIA participants, youth participantswill be included in the reportingsystem. This reporting system willinclude information on how manyyouth participants participated insummer employment opportunities, aswell as the characteristics of those

participants. Since this issue is beingaddressed in the reporting arena, nochange is made to these regulations. Inaddition, Training and EmploymentGuidance Letter (TEGL) 14–99,transmitting instructions for the WIATransition Summer Report addressesthese issues. The TEGL was issued onJune 12, 2000 and can be found on theInternet at www.usworkforce.org.

We received numerous inquiriesabout whether the Act would allowcities and counties to continue tooperate their summer employmentopportunity activities.

Response: Section 664.610 providesthat this practice is still allowed whenthe local chief elected official is thegrant recipient/fiscal agent. It clarifiesthat if summer employmentopportunities are provided by entitiesother than the grant recipient/fiscalagent, then, under WIA section 123, theproviders must be selected by awardinga grant or contract on a competitivebasis, based on recommendations of theyouth council and on criteria containedin the State Plan. Thus, a city or countymay continue to operate the summeremployment opportunities componentof the youth program, and is notrequired to engage in a competitiveselection process for that component, ifit acts as the grant recipient/fiscal agentfor the Local Area. However, under WIAsection 123, providers must be selectedon a competitive basis if providers otherthan the grant recipient/fiscal agentprovide the summer employmentopportunities component of the localyouth program.

A commenter also suggested that weclarify that local government unitsoperating summer youth employmentopportunities as a consortium mayprovide summer youth opportunitieswithout competitive bidding.

Response: We agree and have revised§ 664.610 to specifically recognizeconsortia of local governments.

One commenter requested that weallow the selection of private sectorunsubsidized employmentopportunities to be excluded from thecompetitive process.

Response: We agree and § 664.610 hasbeen revised accordingly.

Some commenters suggested that thedescription of summer youthemployment should make it clear thatyouth service and conservation corpsconstitute valid summer employmentopportunities. They also recommendedthat we encourage Local Boards tomaximize collaboration with Federalagencies that operate summer youthconservation corps programs.

Response: In our discussion of§ 664.460, we have identified youth

conservation corps and youth servicecorps as available work experiencesopportunities for youth. As such,placement with these programs as partof summer employment opportunitiesmay also be appropriate. However, wedo not believe it is necessary tospecifically identify these programs inthe regulations.

The core indicators specified insection 136 of the Act apply to theyouth program as a whole, including allyouth program activities. This isconsistent with the intent of the Act tomove from a focus on separate,categorical programs to a moresystematic approach to workforceinvestment and serving the needs ofyouth. Summer employmentopportunities, then, are to be viewed asone element among many available toyouth as a part of a menu of activitiesoffered by the Local Board. Section664.620 indicates that participants insummer activities, as part of the overallyouth program, are required to beincluded in the same core indicators ofperformance as the other youthactivities.

A commenter thought thatperformance measures in Title I andTitle II should be the same for youthbecause youth can be simultaneouslyenrolled in both programs.

Response: We agree that performancemeasures for federal education andtraining programs should becoordinated to the extent possible. Wehave held discussions with theDepartment of Education to identifysimilar performance measures whichwould apply to both Title I and Title IIprograms and will continue our jointefforts to harmonize performancemeasures across programs.

Subpart G—One-Stop Services to Youth

Subpart G explains that the chiefelected official (as the local grantrecipient for the youth program), is arequired One-Stop partner, is subject tothe One-Stop provisions related torequired partners, described in 20 CFRpart 662, and is responsible forconnecting the youth program and itsactivities to the One-Stop system. Inaddition to the provisions of 20 CFRpart 662, links between the youthprogram and the One-Stop system mayinclude those that facilitate:

• The coordination of youthactivities;

• Connections to the job market andemployers;

• Access for eligible youth toinformation and services; and

• Other activities designed to achievethe purposes of the youth program.



Under section 134(d)(2) of the Act,adults have access to core services inOne-Stop centers without regard toeligibility. Adults are defined under theAct as persons aged 18 and above.Section 664.710 of the regulationsclarifies that local area youth, includingyouth under age 18 who are not eligibleunder the title I youth program, mayreceive services through the One-Stopcenters; however, services for suchyouth must be funded from sources thatdo not restrict eligibility for services,such as the Wagner-Peyser Act. Webelieve that WIA’s intent is to introduceyouth, particularly out-of-school youth,to the services of the One-Stop systemearly in their development and toencourage the use of the One-Stopsystem as an entry point to obtainingeducation, training, and job searchservices.

Commenters suggested that One-StopCenters should make significant effortsto make their programs and servicesaccessible to youth and work with localschool systems to reach eligible youth.One of the commenters also suggestedamending § 664.700(b)(2) to add thelocal school systems to the linkagerequirement, and to require One-Stopsto provide materials at low literacy anddevelopmentally diverse levels. Tobetter serve participants of all ages, staffshould be trained on the developmentalstages of youth and adulthood. Acommenter also stated that it isimportant that, in all cases, writtenmaterial and/or electronically accessedinformation available at one-stopcenters and throughout the system bewritten at no more than a fifth gradereading level and, where appropriate,also available in languages other thanEnglish spoken by a majority ofpotential customers.

Response: While neither WIA nor itsimplementing regulations require anysort of reading level analysis for EOpurposes, local areas may considerproviding written materials at lowliteracy and developmentally diverselevels. The WIA nondiscriminationregulations, at 29 CFR 37.35, set forththe specific obligations to provideservices and information in languagesother than English. The level thattriggers the obligation to prepare non-English materials and services inadvance is ‘‘a significant number orproportion of the population eligible tobe served or likely affected.’’ Since One-Stop centers must adhere to the 29 CFRpart 37 Civil Rights regulations whenadopting such policies, no changes to§ 664.700 are necessary.

Subpart I —Youth Opportunity GrantPrograms

This subpart explains thatcompetitive procedures for awardingYouth Opportunity Grants will beestablished by the Secretary. It alsorestates statutory language about theeligibility of Local Boards and otherentities in high poverty areas to applyfor Youth Opportunity Grants.Provisions of the Act regardingeligibility for services under YouthOpportunity Grants and the process forestablishing performance measures areclarified in §§ 664.800 to 664.830. Weview these grants as a distinctopportunity to provide a variety ofneeded services to youth in highpoverty areas, building on the currentsuccessful activities and innovationsalready at work in many communities.

Part 665—Statewide Activities UnderTitle I of the Workforce Investment Act

Introduction

This part addresses the funds reservedat the State level for statewideworkforce investment activities underWIA sections 128(a) and 133(a)(2).

Subpart A—General Description

Subpart A provides a generaldescription of Statewide activitiesconducted with the up to 15 percent ofthe funds which the Governor mayreserve from the youth, adult anddislocated worker funding streams (‘‘15percent funds’’), and the up to anadditional 25 percent of dislocatedworker funds which the Governor mayreserve for Statewide activities.

Section 665.110(b) explains that the15 percent reserved funds may bepooled and expended on workforceinvestment activities without regard tothe source of the funding. For example,funds reserved from the adult fundingstream may be used to carry outStatewide youth activities and viceversa. We believe that the use of thesefunds can provide critical leadership inthe development and continuousimprovement of a comprehensiveworkforce investment system for eachState and, as a result, create a nationalsystem to which job seekers andworkers can look to for expertassistance, and employers can look tofor a qualified workforce. This issue isalso addressed in 20 CFR 667.130(b).

We did not receive any comments onthis subpart and no changes have beenmade in the final regulations.

Subpart B—Required and AllowableStatewide Workforce InvestmentActivities

Subpart B discusses required andoptional activities conducted with fundsreserved from the three title I fundingstreams (youth, adults, and dislocatedworkers).

1. Required Activities: Section665.200 identifies the eight activitieseach State is required to carry out withits reserved funds from the threefunding streams. The Governor mustreserve funding for these activities, buthas discretion to determine the amountreserved, up to the maximum 15 percentof each funding stream. One authorizeduse of these funds is administration,subject to the five percentadministrative cost limitation at 20 CFR667.210(a)(1). This paragraph clarifiesthat while there is no specific amountthat must be spent for each of the sevenactivities that are required to be carriedout with the 15 percent funds, it isexpected that the State will expend asufficient amount to ensure effectiveimplementation of those activities.

States are also required to provideadditional assistance to local areas thathave high concentrations of eligibleyouth. This activity is one way Statescan help local areas maximize thenumber of youth served under title I ofWIA. Another required activity, rapidresponse, is discussed in subpart C ofpart 665.

Section 665.200(b) discusses theStates’ responsibility for disseminatinginformation about eligible providers oftraining services for adults, dislocatedworkers and youth, including thestatewide list of eligible providers andinformation on performance andprogram cost. One commenter statedthat, when discussing statewidedissemination strategies, the regulationshould encourage States to disseminateinformation in different languages, fordifferent reading levels, and to use radioand television public serviceannouncements to reach as wide anddiverse an audience as possible.

Response: We agree with thecommenter and encourage States todevelop dissemination strategies usingmultiple means, including thosesuggested by the commenter, to provideinformation in such a way as to reachthe widest population. The InterimFinal Regulation implementing WIA’ssection 188 nondiscriminationprovisions contains requirements for theeffective communication of informationto individuals with disabilities,including dissemination of informationin different languages and to variouspopulation groups. 29 CFR 37.9; 37.35;



37.42, (published at 64 FR 61692) (Nov.12, 1999)). We will work with theDepartment of Labor’s Civil RightsCenter to issue guidance on compliancewith 29 CFR 37.35 to assist providers inmeeting their obligations to providematerials and services in languagesother than English. To permit maximumState and local flexibility, we havechosen not to specify particularmethods by which information oneligible providers must be disseminated.However, we have added a newparagraph (5) to § 665.200(b) whichrequires that States assure that theinformation listed in paragraphs (1)through (4) is widely available.

Section 665.200(c) discussesconducting evaluations (WIA section136(e)) of workforce investmentactivities for adults, dislocated workersand youth as one of the eight requiredStatewide activities. One commentersuggested that ‘‘high wages’’ bespecified as part of ‘‘high-leveloutcomes’’ which result from theimprovements identified in theevaluations.

Response: Section 665.200(c)discusses broad Statewide programgoals leading to high-level performanceand outcomes and is not intended torequire specific measures to be used inachieving them, nor to addressindividual participant outcomes. Webelieve that high wages may be betteraddressed by the core performanceindicators required by WIA section 136and discussed in 20 CFR 666.100,especially by the 6-month postemployment earnings measure, which,by definition, addresses wages. Also, itis expected that the Governors will useadditional indicators of performance ona Statewide and local basis that maymore fully address the commenter’sconcern (see 20 CFR 666.110 and666.300(b)). Finally, ‘‘high wages’’ is arelative term and, as such, is difficult todefine in a useful way, except on anindividual basis because it is a functionof a particular occupation, local labormarket conditions, an individualworker’s skills, experience, educationlevel, and other factors. What are highwages for one person may be low wagesfor another. For these reasons, the finalregulation is unchanged.

Another commenter expressedconcern that, under a universal accesssystem and uniform performancestandards, special populations withsignificant barriers to employment willexperience difficulties in learning about,accessing and receiving appropriateservices. The commenter suggested thatthe final regulations encourageevaluations of the delivery of workforceinvestment activities to economically

disadvantaged and other specialpopulations.

Response: While we agree that theevaluation of activities, includingoutreach, for these populations isimportant and should be encouraged,we do not wish to limit the Governors’flexibility in allocating andadministering the funds reserved forthese required activities. 29 CFR 37.42,in the regulations implementing theWIA nondiscrimination and equalopportunity provisions, contains furtherobligations regarding outreach anduniversal access. Under WIA, theGovernors have been given thediscretion to determine funding levelsfor outreach and evaluation activitiesand whether the activities will betargeted to specific organizations,populations or programs. However, WIAsection 136(e)(2) and § 665.200(c)require Governors to design theevaluations in conjunction with theState and Local Workforce InvestmentBoards and to coordinate with LocalBoards in conducting the evaluationstudies. Community-basedorganizations, advocacy groups, andother stakeholders have a variety ofopportunities for participation in theworkforce investment system decision-making process. They are among thegroups represented on State and LocalBoards. They may attend Local Boardmeetings, provide comments onworkforce investment plans, becomeeligible training providers, anddemonstrate effectiveness in thedelivery of training programs. Webelieve that the commenter’s concernsshould be, and will be, addressedthrough this broad consultation process.However, § 665.200(c) of the finalregulations is revised to include areference to the requirements of WIAsection 136(e)(2), which was notincluded in the Interim Final Rule.

Other commenters suggested that, forthe purposes of awarding incentivegrants, the final regulations shoulddefine the term ‘‘exemplaryperformance,’’ used at § 665.200(d)(3),in a way that will reward local areasthat assist a significant percentage ofindividuals to meet their self-sufficiencystandard (i.e., to earn wages needed tocover costs for various family sizes andtypes, without governmental assistance).

Response: We agree that considerationof the extent to which programs lead toself-sufficiency is an important factor inmeasuring program effectiveness andencourage States to look at this factor indetermining incentive grants. UnderWIA, however, the Governor has thediscretion to develop additionalindicators of performance by furtherdefining exemplary performance beyond

the core performance measuresspecified in the Act and regulations. Asstated in 20 CFR 666.300, WIA section136(c)(1) authorizes the Governor, andnot the Department, to apply additionalindicators of performance, such as self-sufficiency, to local areas and to usethem along with the core performancemeasures as the basis for awardingIncentive Grants for exemplaryperformance. As stated in 20 CFR666.400(b), WIA section 134(a)(2)(B)(iii)further provides that the authority todetermine the criteria for exemplarylocal performance that qualifies forincentive grants, as well as the amountof funds used for these grants, lies withthe Governor. To limit the Governors’discretion in this area by requiringadditional indicators would not be inkeeping with the letter and intent ofWIA to provide increased State andlocal flexibility. Consequently, thisprovision remains unchanged in thefinal regulations and the States retainthe authority to exercise discretion inthese matters.

Section 665.200(e) provides fortechnical assistance to local areas thatfail to meet local performance measures.A commenter indicated that suchtechnical assistance must includecapacity building for Local Boardmembers to help improve services andperformance.

Response: The State has the flexibilityto develop technical assistancestrategies and, therefore, a State maydecide to include capacity buildingactivities as part of its overall technicalassistance strategy. WIA section134(a)(3)(A)(ii) and § 665.210(b) listcapacity building activities as anallowable statewide activity. Consistentwith the WIA principle of maximizingState and local flexibility, we believethat it would not be appropriate to limitflexibility by specifying a particulartype of technical assistance activity thatmust be provided. While we agree thatcapacity building for Board members isoften a useful technical assistancestrategy, we are not prepared to requireit in all cases. This provision remainsunchanged in the final regulation.

2. Optional Activities: Section 665.210identifies activities which each State isallowed to carry out with the 15 percentfunds. For the first time, States have thediscretion to conduct research anddemonstration projects, and incumbentworker projects, including theestablishment and implementation of anemployer loan program. We encourageStates to establish policies anddefinitions to determine which workers,or groups of workers, are eligible forincumbent worker projects. We haveadded the phrase ‘‘or groups of



workers’’ to § 665.220 to clarify thatgroups of workers, in addition toindividual workers, may be determinedeligible for incumbent worker training,and that the eligibility determination forthe ‘‘group’’ does not have to be doneon an individual basis. Section 665.220makes clear that incumbent workersserved under projects funded with thesereserve funds do not necessarily have tomeet the requirement that training leadsto a self-sufficient wage. However,because of different WIA requirements,employed adult or dislocated workersserved with local formula funds mustmeet the self-sufficiency requirement.

Under their capacity-buildingfunction (one of the allowable Statewideworkforce investment activities), statesmay also conduct activities andimplement programs designed topromote access to and coordinationamong supportive services and worksupports administered by other stateagencies. Because supportive serviceand work support programs are vital forlow-income families making thetransition to self-sufficiency, efforts tointegrate and coordinate such programsat the state level will greatly enhancethe capacity of One-Stop providers toserve their participants successfully.

One commenter suggested that Statesconsult and coordinate allowableStatewide workforce investmentactivities with State labor federationsand appropriate labor organizations,especially in the case of incumbentworker training. The same commenteralso suggested that States be required toprovide assurances that capacitybuilding and technical assistance fundsare used to enhance participation of allstakeholders, including organized labor.

Response: We agree that State laborfederations and other appropriate labororganizations at the State and local levelshould be involved in consulting andcoordinating on allowable Statewideworkforce investment activities,including capacity building (which isone of the allowable activities), andtechnical assistance (a required activityfor local areas that fail to meetperformance levels). Representatives oflabor organizations have theopportunity for consultation andcoordination through their membershipon State and Local Boards, theopportunity for public comment duringState and local planning processes, aswell as other opportunities providedunder the sunshine provisions of WIA(WIA sections 111(g) and 117(e), and 20CFR 661.220(d) and 661.305(d)). Webelieve the commenter’s concerns onconsultation and coordination will beaddressed by these broad consultation

processes. This provision remainsunchanged in the final regulations.

One commenter suggested that Statesmust consult on policies governingincumbent worker training withorganized labor representatives,especially those whose members havethe skills in which training is proposed.In addition, the commenter suggestedthat written concurrence on the trainingprograms must be provided by theunions whose members are beingaffected by these programs.

Response: We agree that writtenunion concurrence is required, underWIA section 181(b)(2)(B) and 20 CFR667.270(b), where a training programwould impair or be inconsistent with anexisting collective bargainingagreement. We believe that generalconsultation on incumbent workertraining initiative policies will occurwith organized labor representativesthrough the processes described above.We strongly encourage State and LocalBoards to also consult with the specificorganized labor organizations whosemembers have the skills in whichincumbent worker training programs arebeing planned, as well as withorganized labor organizations whosemembers are affected by such programseven where the is no question ofimpairment of collective bargainingagreements. No changes have been madeto the final regulations.

Several commenters suggested that weadd illustrative language to the list ofoptional Statewide activities specifiedin § 665.210 to identify and encouragethe selection of particular programs ortypes of providers that may be fundedwith the State’s 15 percent reservefunds.

Response: These suggestions arediscussed in more detail below. As amatter of policy, we agree that thecommenters’ suggestions would bepermissible uses of the 15 percentfunds. However, we are not prepared tosingle out any particular type ofprogram or provider, consistent withour overarching policy of providingState and local flexibility in programdesign and implementation.

One commenter asked that thefollowing language be added to§ 665.210(b)(1) regarding staffdevelopment and training: ‘‘particularlyfor non-profit community-basedorganizations that serve disadvantagedpopulations to assist them in beingcertified as eligible providers and tocomply with data collectionrequirements.’’ The commenter alsosuggested that language in § 665.210(e)should specifically mention that thesupport provided to local areas foridentifying eligible training providers

should include outreach efforts tocommunity-based organizations thatserve disadvantaged (minority,immigrant, low-income, disabled)populations.

Response: While we are not preparedto limit State and local flexibility byimposing this requirement, we arecommitted to assisting disadvantagedpopulations, such as low-incomeindividuals or individuals withdisabilities, and agree that community-based organizations are an importantpart of the workforce investment systemwith their focus on serving thesepopulations. Outreach to groups servingdisadvantaged population groups is animportant part of the Local Board’sresponsibility to provide universalaccess to WIA funded activities. See 29CFR 37.42. Therefore, we encourageLocal Boards to engage in outreachactivities to community-basedorganizations. In addition, community-based organizations will be representedon Local Boards, will have theopportunity to attend Local Boardmeetings, and provide comments on theeligible provider process and todemonstrate effectiveness in thedelivery of training programs. Weexpect States to provide trainingactivities for all organizations that havetraditionally been partners of thesystem. No change has been made in theregulations.

Another commenter suggested that§ 665.210(b)(2) should specifically listprograms provided by State and localyouth service and conservation corps asexamples of exemplary programactivities.

Response: We believe that when aState is developing exemplary programactivities, it should include programs,such as those suggested, that haveproven successful in deliveringemployment and training activities foryouth, adults and dislocated workers.However, we also recognize that theGovernor has the authority to determinewhat allowable activities will beconducted and how the 15 percentfunds will be used to conduct thoseactivities. Since we do not believe it isappropriate to prescribe how the Statesshould spend those funds, no changehas been made in the final regulations.

A commenter noted that§§ 665.200(b)(1) and 665.210(f) providefor nontraditional training andemployment in both required andallowable Statewide workforceinvestment activities. The commentersuggested that we should provide morespecific guidance on how States shouldprovide opportunities for training fornon-traditional employment at the Stateand local levels.



Response: We agree that training fornon-traditional employment is animportant component of the workforceinvestment system. While the ruleremains unchanged in the finalregulations, we expect to issue guidanceto States and local areas on theprovision of training for non-traditionalemployment. In addition toimplementing innovative programs fordisplaced homemakers, and programs toincrease the number of individualstrained for and placed in non-traditionalemployments, we also encourage statesto implement programs to promoteincrease employment of low-incomefathers so they can support theirchildren more adequately.

One commenter indicated that§ 665.210(f) should listentrepreneurship and asset-buildinginitiatives as examples of innovativeprograms for displaced homemakers.

Response: We encourage States todevelop innovative programs, whichmay include those specified by thecommenter, when designing innovativeprograms for displaced homemakers.However, we believe that the Statesshould have the flexibility to designprograms which meet their specificneeds. The rule, therefore, remainsunchanged in the final regulations.

The same commenter suggested that§ 665.210(f) should specify that when aState is implementing programs toincrease the number of individualstrained for and placed in non-traditionalemployment, special attention shouldbe given to low-income individuals andrecipients of public assistance.

Response: Although we agree thatStates should take steps to assure thatall training activities are available tolow-income individuals and publicassistance recipients, we believe thatStates must have the flexibility to designprograms which increase theparticipation of all individuals. We donot think it is appropriate to narrowlylimit this flexibility. Therefore, theregulation remains unchanged.

Another commenter suggested thatthe listing of required and allowableStatewide workforce investmentactivities should specify that the needsof older workers can be addressed withthese resources.

Response: We agree that the Governorhas the discretion to fund activities forolder workers and other specific groups.However, as stated above, we believethe States should have the flexibility todesign programs which meet theirneeds. Consequently, we have notspecified this permissive use of funds inthe final regulations.

One commenter suggested addinglanguage to § 665.210(b)(2) that

encourages States to continueexemplary programs funded throughtargeted JTPA funds as they transition toWIA so that individuals currentlyparticipating in such exemplaryprograms may continue to receiveservices and avoid abrupt termination.

Response: While one of the reformscontained in WIA was the eliminationof the mandatory set-asides (such as the5 percent set-aside for older workerprograms) in order to increase Stateflexibility, we expect that programsunder WIA will benefit from theexperience and expertise gained underJTPA. Further, WIA policy guidance (inWIA Questions and Answers datedApril 1999, Section I., Transition Issues,Number 1 at www.usworkforce.org)expresses our intent that individualswho are receiving JTPA servicescontinue to receive services under WIAwhen a local area transitions to WIA sothat they may complete their JTPAservice strategy without interruption.These participant transition provisionshave been added to subpart I of part 667of these regulations.

One commenter suggests that§ 665.210(d) either provide moreinformation on the reference toEmpowerment Zones and EnterpriseCommunities in relation to innovativeincumbent worker initiatives, or deletethe reference entirely, because thisreference could not be located in theWIA legislation.

Response: WIA, at section134(a)(3)(A)(iv)(II), specificallyauthorizes programs targeted toEmpowerment Zones and EnterpriseCommunities. This is separate from theauthority to operate innovativeincumbent worker initiatives. TheEmpowerment Zone and EnterpriseCommunity initiative is a joint effort ofthe U.S. Department of Housing andUrban Development and the U.S.Department of Agriculture. Theinitiative is designed to provide Federaltax incentives and flexible grantassistance to distressed urban and ruralareas, and is framed around four keyprinciples: economic opportunity;sustainable community development;community-based partnerships; and astrategic vision for change. Over 100communities around the country havebeen named Empowerment Zones orEnterprise Communities. Moreinformation on this initiative can befound at www.hud.gov.

In order to clarify the statutoryprovisions in WIA section134(a)(3)(A)(iv)(I) and (II), whichseparates the establishment andimplementation of programs targeted toEmpowerment Zones and EnterpriseCommunities from the implementation

of innovative incumbent worker trainingprograms, we are breaking paragraph (d)of § 665.210 into two paragraphs toclarify that these are two separateallowable activities.

One commenter suggested that§ 665.210(g) should specifyentrepreneurship and asset-buildingtraining as types of employment andtraining activities which the State canuse its reserve funds to provide to adultand dislocated workers.

Response: WIA section 134(d)(4)(D)lists the types of training services thatmay be provided to adult and dislocatedworkers, including entrepreneurshiptraining. (WIA section 134(d)(4)(D)(vi).)However, as 20 CFR 663.300 makesclear, the list is not all-inclusive andother training services may be provided.Therefore, the State, with local input,has the flexibility to determine whattypes of training programs will be madeavailable to adult and dislocatedworkers. We encourage States toconsider various types of trainingprograms, including asset-buildingtraining, as long as it meets the trainingprogram requirements in § 663.508. Wehave structured § 665.210(g) broadly toprovide States with maximumdiscretion about the kinds of trainingactivities they will assist with Statewideactivity funds. This provision remainsunchanged in the final regulations.

Section 665.220 sets standards fordetermining the eligibility of incumbentworkers served with Statewide funds.Commenters pointed out that § 665.220contains no income requirements in thedefinition of incumbent worker forStatewide workforce activities, butimposes a ‘‘self-sufficient’’ wage level incustomized training for an eligibleemployed individual at the local levelunder § 663.720. They suggested thatthe same requirements should hold atthe State and local levels.

Response: Section 665.220 reflectsCongress’ intent that States may chooseto treat incumbent workers served withStatewide reserve funds differently fromemployed workers served with formulafunds at the local level, for whomspecific eligibility requirements areimposed. While WIA section 134(a) setsno eligibility requirements on State-funded incumbent worker training, atthe local level, WIA section134(d)(3)(A)(ii) requires that employedworkers be trained for jobs which willprovide them self-sufficiency. Thus,since the statutory provisions are notthe same, we have not made theregulatory provisions the same,although the State has the option todefine the two terms in the same way.Consequently, this provision remainsunchanged in the final regulations.



Subpart C—Rapid Response Activities

Subpart C addresses the use of fundsthat must be reserved (up to 25 percentof dislocated worker funds allotted toStates under section 132(b)(2)(B) ofWIA) to provide rapid responseassistance.

Section 665.300 describes what rapidresponse activities are and who isresponsible for providing them. Rapidresponse assistance begins at thedislocation site as soon as a State hasreceived a WARN notice, a publicannouncement or other information thata mass dislocation or plant closure isscheduled to take place. We believe thatthis early intervention feature fordislocated workers, if provided in acomprehensive and systematic mannerthrough collaboration between the Stateand Local Boards, One-Stop partnersand other applicable entities, is criticalto enabling workers to minimize theduration of unemployment followinglayoff. We strongly urge States andLocal Boards to implement processesthat allow for core services to be anintegral part of rapid responseassistance, preferably on-site, if the sizeof the dislocation or other factorswarrant it. Further, WIA defines‘‘dislocated worker’’ at section 101(9) ina way that permits funds to be used forintensive and training services forworkers: (1) as soon as they have layoffnotices; or (2) six months (180 days)before layoff if employed at a facilitythat has made a general announcementthat it will close within 180 days.

We believe that this is a criticalperiod for workers, States, Local Boards,One-Stop operators and partners tobegin to make important decisions. Oneimportant decision is whether there areenough formula funds in the State (atthe State or local levels) to adequatelyserve the workers being dislocated, orwhether national emergency grantfunds, authorized under WIA section173 and discussed in 20 CFR part 671,must be requested in a timely manner sothat all services are available to theworkers when they need them.

Section 665.320 provides details onrapid response activities that may beprovided in addition to the requiredactivities described in § 665.310.

One commenter indicated that thecurrent regulations do not includelanguage about the for-profit businesssector participation in planning andimplementing Rapid Responseactivities. The commenter would likethe regulations to emphasize that thereis an important role for private for-profitbusinesses in this effort. A commenterthought the Job Service EmployerCommittee (JSEC) employers can

provide assistance in designing rapidresponse services to help affectedworkers and employers. Anothercommenter suggested that theregulations specify a similar role forlabor organizations. The commenterwent on to state that we should considerproviding a portion of our incentivegrant funds for comprehensive rapidresponse services, including theparticipation of the State laborfederation in Statewide rapid response.

Response: We agree that the Actprovides many opportunities forstakeholders and we encourage States tobe as inclusive as possible in planningand implementing their rapid responseactivities. Just as the Act recognizes theimportant role of business and labor inthe makeup of State and Local Boards,the inclusion of both interests in thedesign and operation of rapid responseactivities is equally important. TheState, however, is responsible, underWIA section 134(a)(2)(A)(i), forproviding rapid response activities andit is up to the State to determine howit will plan for and implement thoseactivities. Consistent with our principleof providing States with maximumdiscretion in the design of theirprograms, this provision remainsunchanged in the Final Rule.

On the issue of using incentive grantfunds to encourage States to includelabor (or business) participation, webelieve that the commenter’s suggestionhas merit. However, we have chosen notto define innovative programs in theregulations so that we can provide theStates the opportunity to experimentwith a wide variety of programs. Wewill develop guidelines (under 20 CFR666.220) for incentive grants. We maydecide to provide examples ofinnovative programs, such as theestablishment of State labor liaisonswith State rapid response activities, inthe application guidelines. Thisprovision remains unchanged in thefinal regulation.

Section 665.300(c) requires a State toestablish a rapid response dislocatedworker unit to carry out Statewide rapidresponse activities. One commentersuggested requiring the State tomaintain an identifiable dislocatedworker unit or a State entity that has theresponsibility for carrying out rapidresponse activities and that suchresponsibilities should not be devolvedto other entities.

Response: States are required toestablish a dislocated worker unit andhave ultimate responsibility forproviding rapid response activitiesunder § 665.300(b). However, WIAsection 134(a)(2)(A)(i) authorizes States,working in conjunction with the Local

Boards and the chief elected officials inthe local areas, to designate an entity toprovide rapid response activities. Theprovision remains unchanged in thefinal regulations.

A commenter wanted on-site contact,which is required by section 101(38)(A)of the Act and § 665.310(a), to requirecontact with the bargaining agent whenan affected employer has a collectivebargaining agreement and that such on-site contact must take place within 48hours of the State receiving the notice/announcement of layoff. The commenteralso asserted that the bargaining agentmust be contacted at the outset andinvolved as a full partner in thedevelopment of programs and servicesthat affect its members.

Response: Section 665.310(a) doesrequire that on-site contact be madewith the employer, representatives ofthe affected workers and representativesof the local community. Whenemployees are represented by a labororganization, this provision requirescontact with the bargaining agent. WIAsection 101(38)(A) also requires that on-site contact be made with employersand employee representatives, andprovides that the contact must be madeimmediately after the State is notified ofa current or projected permanentclosure or layoff, or in the case of adisaster, immediately after the State ismade aware of mass job dislocation asa result of the disaster. We have addedthe phrase ‘‘immediate and’’ toparagraph (a) of § 665.310 to reiteratethis requirement in WIA section101(38)(A). In addition, we believe thatthe purpose of these requirements is toensure the involvement of both theemployer and the workers or theirrepresentatives in planning andimplementing the entire range ofservices to the affected workers. Weencourage the State to coordinate withall interested parties, includingemployee representatives, whendeveloping programs and services forthe affected workers.

This same commenter suggested thatthe dislocated worker unit be requiredto provide information to all workersand companies about the opportunitiesavailable under the Trade AdjustmentAssistance (TAA) and the NAFTA-Transitional Adjustment Assistance(NAFTA–TAA) programs as part ofrapid response (19 U.S.C. § 2271, etseq.).

Response: Section 665.310(b) requiresthat information and access tounemployment compensation benefits,comprehensive One-Stop systemservices, including information on TAAand NAFTA–TAA, be provided toaffected workers. Therefore, because the



regulations already address thecommenter’s concerns, no change hasbeen made.

A commenter noted that§ 665.310(a)(5) provides that requiredrapid response activities include‘‘available resources to meet the shortand long-term assistance needs ofaffected workers.’’ The commenterasked whether this means that rapidresponse funds must be used to provideneeds-related payments and, if so, askedthat the regulations be revised to reflectthis. Another commenter argued thatStates must not be allowed to use rapidresponse funds for core, intensive ortraining services, but should maximizethe integration of these services with itsrapid response activities at the locallevel.

Response: The requirement that§ 665.310(a)(5) imposes on States is toassess available resources as part of theassessment of the other factors specifiedin § 665.310(a). This refers to the reviewof funds and services available in thearea to help the affected workers. Inaddition, WIA sections 101(38) and134(a)(2)(A)(i) describe the uses of thefunds set aside for rapid response,which is amplified in § 665.320. UnderWIA section 134(a)(2)(A)(ii), the Statemay use some of the rapid responsefunds to assist affected workers withdirect services, which could includeintensive services, training, or needs-related payments, if local resourcescannot meet the needs of these workers.These funds can be provided as ‘‘State’’funds or as additional local fundingassistance beyond the initial formulaallocation for the area. In order to clarifythis distinction, a new section,§ 665.340, has been added to the finalregulations. The new § 665.340discusses the use of reserve funds toprovide additional assistance to localareas and makes it clear that a Statemust reserve enough funds from its 25percent funds to adequately fund itsrapid response unit.

A commenter indicated that the itemslisted in § 665.320 are positive and pro-active approaches to rapid response,however, the commenter would like usto add an additional provision to§ 665.320 to require that labororganizations whose members areaffected by a layoff be consulted in thedevelopment and design of all rapidresponse and dislocated workerprograms.

Response: Section 665.320 provides alist of additional rapid responseactivities that a State or designatedentity may provide in addition to therequired rapid response activities in§ 665.310. To the extent that a State ordesignated entity conducts any of the

activities listed in paragraphs (a)(1)through (3) of § 665.320, those activitiesmust be conducted in conjunction withthe groups listed in paragraph (a) of§ 665.320, which includes labororganizations. We encourage States tocontinue working in collaboration withall interested parties when providing allrapid response activities. This provisionremains unchanged in the finalregulations.

Section 665.330 addresses the linkageof rapid response assistance and WIAtitle I assistance to NAFTA–TAA. Thislinkage is a requirement under NAFTA–TAA and is an important feature of theOne-Stop service delivery system. Onecommenter indicated that unions whosemembers have been affected by NAFTAmust be consulted in the design andimplementation of programs to assisttheir members and that this sameprovision must also apply to TAAparticipants as well.

Response: We believe that inproviding rapid response, a State shouldcoordinate such efforts with allinterested parties includingrepresentatives of the affected workers.As discussed above, consistent with ourprinciple of providing States withmaximum discretion in the design oftheir programs, this provision remainsunchanged in the final regulations.

Section 665.330 requires rapidresponse to be available when theGovernor makes a preliminary findingthat NAFTA–TAA certification criteriahave been met. A commenter suggestedthat the final rule clearly state that theSecretary makes the final determinationon NAFTA–TAA eligibility for a groupof workers covered by a petition.

Response: We agree that theclarification is appropriate. In order toclarify the rule, we have revised thisprovision to indicate that therequirement that rapid response bemade available occurs when theGovernor makes a ‘‘preliminary finding’’that the NAFTA–TAA certificationcriteria have been met. (Moreinformation on preliminary findings canbe found at 19 U.S.C. § 2331(b).) It isimportant to restate our policy thatrapid response should occur as soon aspossible after information on an actualor probable layoff has been received. Ifa preliminary affirmative finding occursafter the rapid response, the State maywish to provide additional informationand assistance to the workers. If rapidresponse has not occurred before apreliminary affirmative finding by theGovernor, the Governor must ensurethat rapid response is provided to theworkers at that point.

Part 666—Performance AccountabilityUnder Title I of the WorkforceInvestment Act

Introduction

This part presents the performanceaccountability requirements under title Iof the Act. It largely summarizes thestatutory language in the Act, andestablishes the framework fordefinitions, guidelines and instructionsthat we will issue later to implementand carry out the requirements of theAct. WIA’s purpose is to provideworkforce investment activities thatimprove the quality of the workforce.We are strongly committed to a system-wide continuous improvementapproach, grounded upon provenquality principles and practices.

The development and establishmentof a performance accountability systemthat reflects this commitment requirescollaboration with representatives ofappropriate Federal agencies, andrepresentatives of States and politicalsubdivisions, business and industry,labor organizations, employees, eligibleproviders of employment and trainingactivities, including those serving hardto serve and non-traditionalparticipants, educators, andparticipants, with expertise regardingworkforce investment policies andworkforce investment activities. Duringthe period since the passage of theWorkforce Investment Act, we havepublished a series of consultationpapers to engage the system in adialogue and to seek input into theestablishment of a performanceaccountability system. On March 24,1999, two consultation papers,‘‘Performance AccountabilityMeasurement for the WorkforceInvestment System’’ and ‘‘ReachingAgreement on State Adjusted Levels ofPerformance,’’ were published in theFederal Register Volume 64, No. 56 onMarch 24, 1999. On April 24, 1999, athird consultation paper, ‘‘Incentivesand Sanctions Under WIA,’’ waspublished in the Federal Register,Volume 64, No. 80. And, on August 5,1999, the fourth and fifth consultationpapers, ‘‘Continuous ImprovementUnder Title I of the WorkforceInvestment Act of 1998’’ and ‘‘CustomerSatisfaction Under Title I of theWorkforce Investment Act of 1998,’’were published in the Federal Register,Volume 64, Number 150. In addition,we held Town Hall meetings in 11 citiesacross the country in August of 1999 toinvite and listen to suggestions andconcerns of the partners andstakeholders on a range of issuesincluding performance accountability.



The comments received in response tothe publication of the five consultationpapers, plus the comments received inresponse to the publication of theInterim Final Rule and the input fromthe Town Hall meetings have beeninstrumental in the development anddissemination of guidance to the systemon performance accountability. Thesubstance of comments received inresponse to the publication of theInterim Final Regulations are discussedin this preamble, and reflected in thefinal regulations. We continuediscussions with our other federalpartner agencies to expand agreementon common definitions and measures,and further guidance will be madecontinually available, reflecting on-going consultation with our partnersand stakeholders.

Subpart A—State Measures ofPerformance

1. Indicators: Section 666.100identifies the core indicators ofperformance and the customersatisfaction indicators that States arerequired to address in title I State Plans.The core indicators represent four basicmeasures that will be applied to each ofthe three programs serving adults,dislocated workers and eligible youthage 19 through 21, and three measuresspecifically for younger youth (age 14through 18). There is one customersatisfaction measure for participants andone for employers.

Several comments suggested changesto the core indicators of performance toinclude part time employment, or tofocus on non-traditional employment.Other comments requested the additionof new measures, for example forplacement in non-traditional jobs,provision of services to low incomepeople, and the inclusion of part-timeemployment as a placement measure.There were comments about theaddition of a youth measure relating toplacement in employment that creates acareer path leading to long term self-sufficiency.

Response: The interest in moremeasures, or in measures for specifictarget populations is anticipated in theAct and the regulations, and States maydevelop those measures, as provided forin the Act, at section 136((b)(2)(C), andin the regulations, at § 666.110, and asdescribed in their State Plan. We believethat the Act commits the developmentof additional measures to the Governor’sdiscretion and that we lack the authorityto impose additional performancestandards. Those interested in Stateadoption of additional performancestandards have a variety ofopportunities to have their views heard

through opportunities to comment onthe State Plan and through the Act’ssunshine provisions. Therefore, nochange to the regulations was needed.

Some comments requested greaterspecificity and clarity for the definitionsof the measures.

Response: The language in§ 666.100(a) reflects the language insection 136(b)(2) of the Act. In general,we feel that the statutory languageprovides the basis for on-goingconsultation with partners andstakeholders. Then, as appropriate,additional guidance can be provided,such as the recent guidance on themeasures provided in Training andEmployment Guidance Letters (TEGL),number 7–99 and 8–99.

However, in response to a specificcomment that attainment of basic skillswas too general and not necessarilyrelated to program services, we clarifiedthe measure for younger youth, at§ 666.100(a)(3)(i), to reflect the basicprogram design for youth thatestablishes one or more goals forparticipants each year. Attainment ofbasic skills goals, and, as appropriate,work readiness or occupational skillsgoals, is, therefore, a more accurate wayto describe the measure, but it is limitedto no more than three goals per year.Use of the term ‘‘goals’’ in reference tothese difference skills acknowledgesthat obtaining skills, especially foryounger youth, is an incrementalprocess. This concept is described inmore detail in TEGL 7–99.

A number of comments noted that thecore performance indicators are not alldirectly related to the VocationalRehabilitation program of servicesunder title IV of WIA, taking theposition that Vocational Rehabilitationperformance indicators must remainseparate from title I WIA performanceindicators.

Response: We feel that the language in§ 666.100(a) is sufficiently clear that thecore indicators of performance applyonly to adult, dislocated worker andyouth programs under WIA title Isubtitle B. Nothing in this languagesuggests that these core measurementsreplace or supercede measurementsrequired by other partner programs.

Three comments described the 15core indicators of performance and 2customer satisfaction indicatorsrequired in § 666.100 as excessive andtoo complex.

Response: The Act specificallyidentifies four core measures foremployment and training activities,including activities for youth 19–21,with three additional measures foryounger youth. It is clear that States willbe accountable for measuring

performance for the Adult, Youth andDislocated Worker programs separately,just as there will be separate measuresof performance for the other partnerprograms. Our intention in theregulations is to set out what the Actalready requires, but to do so in a waythat makes clear how the Act’sperformance indicators apply to thedifferent population groups which WIAserves.

The decision to measure customersatisfaction for job seekers and workersseparately from employers was madeafter considerable consultation with thesystem. The two customer satisfactionmeasures are intended to provide moremeaningful feedback to the States andthe workforce investment system as awhole by acknowledging the differentexpectations held by the two verydifferent customer groups. We believethat this is a reasonable and practicalinterpretation of the statutoryrequirement to have customersatisfaction measures for employers andparticipants.

Thus, the regulations were drafted totrack the provisions in the Act byapplying the core measures to thedifferent programs, and to clarify thatthe application of the core measures,along with satisfaction measures foreach of the key customer groups,requires the separate measurementsidentified in § 666.100(a).

2. Additional indicators: Section666.110 provides that Governors maydevelop additional performanceindicators and that these additionalindicators must be included in the StatePlan.

One comment questioned whether therequirement that additional indicators‘‘must’’ be included in the State Planwas consistent with the language in theAct, citing section 136(b)(2)(C) of WIAwhich provides that ‘‘A state mayidentify in the state plan additionalindicators for workforce investmentactivities authorized under thissubtitle.’’

Response: We interpret this provisionof WIA to authorize States to establishadditional indicators, without requiringthat States do so. However, if optionalmeasures are established, they must beidentified in the State Plan. This isconfirmed by the use of similar languagein WIA section 112(b)(3). Therefore, if aState wishes to establish additionalindicators, the State must identify themin the State Plan.

A number of comments suggested thatthere should be a performance indicatorfor the self-service and informationalactivities so important to the system andthe customers.



Response: WIA section 136(b)(2)(A)(i)specifically excludes these activitiesfrom the core measures. States andLocal areas, however, are dedicatingconsiderable and growing resources toself-service and informational activitiesin the One-Stop centers, and more andmore of the customers of the workforceinvestment system are taking advantageof the information they can access ontheir own. Many will be doing so byusing the Internet from home or work orsome other location, without everentering the One-Stop office. Efforts toidentify and track the users of theseservices, even at a modest cost perindividual, can become significantwhen we consider the huge numbers ofcustomers who access these services ontheir own. Further, the cost ofinformation and self-service activitiesfor the individual served is generallyvery low when compared to the cost ofstaff-assisted services. Thus, the cost ofidentifying and tracking these customerscould easily exceed the actual cost ofthe service they received.

However, we realize that someassessment of the value of these servicesis important for determining whatresources are devoted to these types ofactivities. We will convene a workgroupof Federal, State and localrepresentatives to discuss the issue ofself-service measures in the Fall of 2000.We anticipate that this workgroup willdevelop a menu of optional self-servicemeasures that States and local areas canutilize.

3. Negotiations: Section 666.120(b)addresses the requirement that Statesmust submit expected or proposedlevels of performance for the coreindicators and customer satisfactionindicators in their State Plans. Wereceived comments requestingclarification of the process fornegotiating levels of performance,especially with regard to the factors thatmay be considered during thenegotiations. Further commentssuggested the reestablishment of Statebaselines after one year of WIA activity.

Response: The negotiation ofperformance levels for programs undertitle I B will be part of the process ofreviewing and approving State Plans. Tohelp clarify and reflect the goal of theprocess, we have replaced the term‘‘adjusted level’’ with the term‘‘negotiated level’’ throughout theregulations to refer to the outcome of theprocess and the resulting numericallevels of performance for each indicatorthat will be used to determine whethersanctions will be applied or incentivegrant funds will be awarded.

In consultation with the system, andusing the experience of early

implementing States, we developed alist of possible factors that may beconsidered when negotiating levels ofperformance. The list, which waspublished in TEGL 8–99, is notintended to be prescriptive orexhaustive, but to suggest the kinds ofinformation that might be considered.

Thus, ‘‘differences in economicconditions’’ might include:

• the unemployment rate;• the rate of job creation or loss; and/

or• the rate of new business start-ups.The negotiations can take into

account ‘‘differences in participantcharacteristics,’’ which might include:

• indicators of welfare dependency;• indicators of educational level;• indicators of poor work history;• indicators of basic skills deficiency;• indicators of disability;• indicators of age; and/or• creation of a ‘‘hardest-to-serve’’

index.The kinds of factors related to

‘‘proposed service mix and strategies’’might include:

• percentage of WIA Title I B fundsto be used for core, intensive, andtraining services;

• extent of follow-up servicesplanned;

• extent and type of experimental orpilot programs planned; and/or

• extent to which non-WIA Title I Bfunds are available for training or otherservices.

Other factors that might be consideredwhen proposing and negotiatingperformance levels could include:

• community factors such as theavailability of transportation anddaycare;

• policy objectives such asapplication of Malcolm Baldrige criteria,pursuit of new or enhancedpartnerships, or piloting of newprograms or activities.

ETA Regional Offices will work withthe individual States to identify baselinedata, using experience under the JobTraining Partnership Act. Theestablishment of baselines, and theprocess for proposing and negotiatinglevels of performance is addressed inTraining and Employment GuidanceLetter No. 8–99. Those negotiated levelsof performance may be revised, asprovided for in § 666.130.

Some commenters suggested thatincremental increases in negotiatedlevels of performance not be the onlyway to consider and demonstratecontinuous improvement. Othercomments observed that the continuousimprovement requirements were notwell defined and did not encourage theState and local partners and

stakeholders to take a larger role indefining system accountability.

Response: We agree that continuousimprovement is desirable even in areasnot directly measurable by performancemeasures, like increasing administrativeefficiency. We have added language to§ 666.120(g) to more clearly provideStates with the opportunity to defineareas targeted for continuousimprovement that may be in addition tothe indicators of performance requiredunder § 666.100.

4. Participants Included in Measures:Section 666.140 explains that allindividuals, except for those adults anddislocated workers who receive servicesthat are self-service or informational,must be registered and included in thecore indicators of performance. Inaddition, § 666.140(b) implements therequirement that a standardized recordmust be completed for registeredparticipants.

A number of comments tookexception to the provision that all youthmust be registered and included in themeasures of performance, but thatadults and dislocated workers whoparticipate exclusively in self-service orinformational activities are excludedfrom registration and are, therefore, notincluded in the performanceaccountability system.

Response: While these commentersfeel that the registration policy for youthand adults should be the same, webelieve that the policy should not bechanged because of basic approach forserving youth differs from adults. Thedifference in the registration criteria forthe Youth program and the Adult andDislocated Worker programs arises fromthe way in which an applicant enterseach program. WIA section 129(c)(1)makes it clear that each youthparticipant is to have an assessment anda service strategy, activities whichwould also require registration underthe Adult or Dislocated Workerprograms. The Act specifically excludesindividuals who receive only self-service and informational activitiesunder the Adult and Dislocated WorkerPrograms under WIA section 134 fromthe core measures of performance, and,therefore, keeping records on theindividuals taking advantage of theservices is not an issue. The moreindividually-focused youth programdoes not envision these kinds ofactivities as part of the entry. (Of course,a youth may avail him/herself ofinformational or self-help servicesthrough the One-Stop.)

To help clarify the issue ofregistration, we have added a newparagraph (a)(2) to § 666.140 to explainthat ‘‘self-service and informational



activities’’ are core services consisting ofwidely available information that doesnot require significant staff involvementwith the individual in terms ofresources or time. Many customers ofthe workforce investment system do notrequire staff assistance to accessemployment statistics or job listings, forexample, that are increasingly availableon the Internet or in handouts orbrochures designed to be widelydistributed to the general public. Weare, however, aware of the commenters’concerns that the system’s performancein serving these self-service customersalso needs to be measured. As discussedabove, we will work with our partnersto develop optional self-servicemeasures.

Other comments suggested a need toprovide a system-wide measurement forparticipants who received servicesunder programs operated by thepartners, and a need to clarify when tomeasure performance that could beapplied across the system by all States.

Response: The comments about whenan individual’s participation isconsidered to begin for purposes of themeasurement of performance, includingthe measurement for individuals servedby partner programs, were widelydiscussed during the consultations withpartners and stakeholders. WIApromotes the partnership of programsand activities in local One-Stop systems,and the performance accountabilitysystem must be able to reflect that desirefor partnership without interfering withit. The standardized record, referred toin § 666.140(b), can be used todocument services and activitiesprovided by any of the partners in thelocal One-Stop system. Performancewill be measured by looking atoutcomes and results achieved by eachregistered participant following receiptof services under Title I B and any otherservices provided by a partner in thelocal One-Stop system. Thisclarification has been included in a newparagraph (c) to § 666.140. Theperformance measurement system inthese regulations, including thestandardized record, has beendeveloped in consultation with Federalpartners so it can be used (or modifiedfor use) by other system partners. Otherpartner programs, however, are notrequired to use or conform to thisperformance measurement system, andmultiple reports may track and displaythe outcomes achieved by a singleindividual who receives services underseparate programs.

We have provided additionalguidance in the instructions for thestandardized record, including guidanceto clarify when to begin measuring

results achieved for those performanceindicators that are to be measuredfollowing the receipt of service inTraining and Employment GuidanceLetter No. 7–99. This guidance wasrepeated in a document published in theApril 3, 2000, Federal Register, entitled,‘‘Workforce Investment Act (WIA)Standardized Record Data (WIASRD),Quarterly Summary Report, and AnnualReport’’.

5. Wage Record Data: Section136(f)(2) requires States to use quarterlywage records, consistent with State law,to measure progress on the coreindicators of performance, andauthorizes the Secretary to makearrangements to ensure that the wagerecords of any State are available toother States. In order for States to meetthis requirement, § 666.150(a) has beenamended to authorize the collection andother use of social security numbersfrom registered participants and suchother information as is necessary toaccurately track the results of theparticipants through wage records. Theuse of quarterly wage records isessential to achieving full accountabilityunder the WIA performanceaccountability system, by ensuring highquality, comparable data upon which toidentify and reward high performingStates and localities, and, if necessary,to sanction low performing States andlocalities. Matching participant socialsecurity numbers against quarterly wagerecord information is the most effectivemeans by which timely and accuratedata can be made available to thesystem. For this reason, we interpretWIA section 136(f)(2)’s expressrequirements that States use quarterlywage records and that the Secretaryarrange for State to State disclosure ofquarterly wage records for WIAperformance purposes as indicatingCongress’ intent to supersede thelimitation on disclosure of socialsecurity numbers in Social Security Actsection 205(c)(2)(C)(viii)(I). Section666.150(b) clarifies that each State mustdescribe its strategy for using quarterlywage record data, including appropriatesafeguards for disclosure, in the StatePlan.

We received comments that relianceon the UI wage data will be plagued byproblems of uncovered employment,out-of-state employment, incompletereporting, and other issues that maymake comparisons difficult.

Response: The requirement to usewage records is quite clear, but, inconsultation with partners andstakeholders, we have providedguidance on when additionalinformation may be used to supplement

the wage records in Training andEmployment Guidance Letter No. 7–99.

Other comments urged specificregulatory language regarding theconfidentiality of wage records, bothfrom commenters who wished to accessthe data, as well as from commenterswho wanted to ensure protection for theemployers and workers.

Response: UI wage records are ownedand managed by the States, and aresubject to the rules and protectionsestablished by the States, within generalprovisions of Federal law and guidance.We are working with the State Agenciesthat have responsibility for theserecords to ensure that information willbe available as necessary, and thatprotections will be provided inaccordance with State law, withoutattempting to mandate procedures.Therefore, no changes were made tothese regulations.

Subpart B—Incentives and Sanctions forState Performance

1. Incentive Process: Section 666.200restates the eligibility criteria for Statesto apply for an incentive grant. Theprocess for applying for incentive grantsis described in § 666.205, whichexplains the timing of the applications,and § 666.220, which defines what mustbe included in an application. Theprocess for determining the amount ofthe incentive grant awards is discussedin § 666.230. These grants will beprovided to States in recognition ofperformance that exceeds negotiatedlevels, and the incentive grant awardprocess will be administered by theSecretary of Labor in consultation withthe Secretary of Education.

We received several comments aboutthe implementation of the performancerequirements during the first yearfollowing implementation of WIA. Thecomments suggested that incentives andsanctions be delayed for a year.

Response: WIA establishes newrequirements and expectations for theworkforce investment system that wentinto effect on July 1, 2000, but that willnot be the end of the process to reformand improve the system. We arecommitted to working with the systemto effectively implement the WorkforceInvestment Act, including the principleof increased accountability, andcontinue to seek input from the partnersand stakeholders about the best way tomeasure and acknowledge performance.We do not see any programmaticadvantage to delaying implementationof the incentives and sanctions process.The Adult, Youth and DislocatedWorker programs under WIA Title I Bare replacing programs under the JobTraining Partnership Act that have



measured and reported performance forover 15 years. States that are able toachieve good performance and satisfytheir customers should be recognizedand should be able to apply for theincentives and rewards Congress hasauthorized. Conversely, States thatexperience problems in achievingpositive outcomes for their customersdeserve the assistance authorized underthe Act so that they may be able tomodify and improve. Thus, we see noreason to postpone awarding IncentiveGrants. We will provide technicalassistance to the system and to theStates throughout the first year to helpachieve the highest possible levels ofperformance from the very beginning.

Some comments pointed out that theStates are very different, and that theprinciple of State and local flexibilitymeans that not only will performancevary from State to State, but the qualityof the data and the methods forcapturing the data used to measureperformance will vary as well. For thesereasons, the commenters took exceptionto comparing a State’s relativeperformance to other States’performance when determining theamount that would be available underan incentive grant award.

Response: The incentive grant awardswill be made to those States that exceedlevels negotiated specifically for thatState. The incentive grant will not beawarded or denied on the basis ofrelative performance; but the concept ofcomparing the performance of the Statesis firmly and clearly rooted in the Act,which requires the Secretary todisseminate State-by-State comparisonsof the information. Also, as described in§ 666.120(c)(4), one of the requiredfactors in developing the negotiatedlevels of performance for the State is acomparison with other States. However,we believe that relative performance isa legitimate factor to be considered inapportioning a limited pool of incentivefunds. Thus, the regulation explains thatthe Secretary ‘‘may consider’’ a list of 6possible factors, including relativeperformance. We will be working withthe States to make sure that the datacollection process is as consistent aspossible, and will consider this as apossible factor for establishing theamount of awards when it isappropriate. No change has been madein the regulation.

2. Sanctions: Section 666.240explains that States failing to meet forany program adjusted levels ofperformance for core indicators and thecustomer satisfaction indicators for anyprogram, in any year, will receivetechnical assistance, if requested. If aState fails to meet the required

indicators for the same program for asecond consecutive year, the State mayreceive a reduction of as much as fivepercent of the succeeding year’s grantallocation.

We received several commentssuggesting that the limited experience inusing wage records to measureperformance, plus the energy andresources being focused on the creationof new partnerships and theestablishment of new customer-focused,streamlined service designs, may have anegative impact on performance,possibly exposing States to sanctions.The comments proposed delaying theapplication of sanctions until baselinedata could be developed, and Stateswould be better prepared to negotiaterealistic levels of performance againstwhich they would be measured.

Response: We recognize that thechanges being undertaken with theimplementation of WIA shouldultimately lead to higher performanceand a more sophisticated and accurateperformance measurement system.Nonetheless, as a result of consultationwith partners and stakeholders, we haveclarified the process for determiningacceptable and unacceptableperformance by establishing a range sothat a State’s performance will bedeemed to be acceptable if the actualperformance falls within 20 percent ofthe negotiated level. Therefore,sanctions will not be considered unlessactual performance is more than 20percent below the negotiated level. Thisrule has been included as a newprovision at § 666.240(d).

Subpart C—Local Measures ofPerformance

Section 666.300 explains that eachlocal workforce investment area will besubject to the same 15 core performanceindicators and two customer satisfactionindicators that States are required toaddress. Governors may elect to applyadditional performance indicators tolocal areas. Section 666.310 states thatlocal performance levels will be basedon the State adjusted levels ofperformance and negotiated by theLocal Board and chief elected officialand the Governor to account forvariations in local conditions.

Some commenters were concernedthat local programs and partners weregoing to be faced with performancelevels imposed as a result ofnegotiations between the State and theDepartment, and suggested thatestablishment of performance standardsshould be negotiated at the localWorkforce Board level first.

Response: The Governor’s authority toidentify and require additional

measures of performance is clearlyspelled out in WIA section 136(c)(1).The local levels of performance may bean important factor the State takes intoaccount when negotiating or re-negotiating levels of performance withthe Department. While we continue tosupport collaboration and partnershipbetween the State and local partners,how that process occurs within the stateis not a matter on which we can limitthe Governor’s authority by regulation.

Subpart D—Incentives and Sanctions forLocal Performance

Section 666.400(a) restates local areaeligibility for State incentive grants.Under section 666.400(b) the amount offunds available for incentive grants andspecific criteria to be used aredetermined by the Governor. Section666.420 also explains that local areasfailing to meet agreed-upon levels ofperformance will receive technicalassistance for any program year.Governors must take corrective actionsfor local areas failing to meet therequired indicators for two consecutiveyears.

We received one comment onincentive grants being available to onlyStates or local Workforce InvestmentAreas. The commenter requested thatIndian and Native American granteeswho meet or exceed their performancestandards during a program year beeligible to receive incentive grants.

Response: The reasons why we do notprovide incentive grants for the WIAIndian and Native American programare addressed in the Preamblediscussion of comments on part 668,covering Indian and Native Americanprograms under the WorkforceInvestment Act.

Part 667—Administration Provisions

Introduction

This part establishes theadministrative provisions that apply toall WIA title I programs conducted atthe Federal, State and local levels, andto continued service to Job TrainingPartnership Act enrollees.

Subpart A—Funding

Subpart A addresses fund availability.One commenter expressed concernabout the appeals processes associatedwith the selection of grantees under theIndian and Native American (INA) andNational Farmworker Jobs Program(NFJP) (formerly known as the Migrantand Seasonal Farmworker program).

Response: Section 667.105, whichcovers grant instruments and grantaward processes, is being modified inresponse to this comment. The only



remedy which may be provided tosuccessful appellants from designationactions is designation for the remainderof the grant period. However, under§ 667.825(b), this remedy cannot beprovided if less than six monthsremains in the grant period. Due to theaverage length of appeals, fewappellants qualify for relief during thetwo-year grant period. In order toimprove the fairness and effectivenessof the appeals process, we are modifying§ 667.105(c) to permit INA grants to beawarded to a particular grantee withoutcompetition only once during a fouryear period. Similar procedures arealready included in § 667.105(d) for theMSFW program. It is DOL’s positionthat the successful appellant does havethe right to compete for a grant awardfor the second two years of a four yeardesignation period, and we have revisedsection 667.825 to provide that we willnot give a waiver of competition for thesecond two-year grant period in thesesituations.

Several commenters asked forinformation about the treatment ofsummer youth funds for the years 1999and 2000.

Response: JTPA funds for the 1999summer youth employment programwere distributed in the same manner asin previous years and were unaffectedby WIA. Year 2000 WIA youth fundswere available beginning in April 2000to States with approved WIA plans orapproved Youth transition plansaddressing youth activities for PY 2000.Since this issue is addressed in§ 667.100(b), no change has been madeto the regulations.

One commenter thought that WIAYouth funds should be distributed inJuly instead of April because thesummer youth employment program isnot authorized for the Summer of 2000.

Response: It is true that there is nolonger a separate summer youthemployment program, but WIA summeremployment opportunities are animportant component of local areas’comprehensive youth programs. Wewish to enable States and local areasthat want to plan for and offer WIAYouth services on the JTPA timeschedule to do so under the conditionsindicated in Field Memorandum (FM)52–99, dated September 9, 1999, whichis accessible on the Internet atwww.usworkforce.org. FM 52–99permits a State to plan for and operateWIA youth programs before we haveapproved the State’s full five yearstrategic plan, which covers all WIAactivities. However, the State’s WIAYouth Plan must satisfy WIA criteria,which are more extensive than thecriteria were for the JTPA summer youth

employment program. For example,30% of the youth funds in each localarea must be used to serve out-of-schoolyouth.

We received many comments aboutexpected reductions in State allotmentsand within-State allocations due to theapplication of the allotment andallocation factors prescribed by sections128 and 133 of WIA—the relativenumber of unemployed individuals, therelative excess number of unemployedindividuals, and the relative number ofdisadvantaged individuals. Beginningwith the third year of WIA, workforceinvestment areas will be allocated atleast 90 percent of the average of thetwo preceding years’ allocations ofAdult funds and Youth funds as a ‘‘holdharmless’’. (WIA sections128(b)(2)(A)(ii) and 133(b)(2)(A)(ii)).However, many grantees expect toexperience severe funding reductionsand possible service interruptions intheir workforce programs in the first twoyears of WIA.

Response: Consistent with the newhold-harmless policy we announced inOctober 1999, we are addressing thisproblem by adding a new section,§ 667.135, which permits States to applyJob Training Partnership Act holdharmless provisions during the first twoyears of WIA, and sets forth the WIAhold harmless procedures, which takeeffect in subsequent years. We aremaking the JTPA hold harmlessprocedures available for the first twoyears of WIA as a transition measureunder the authority of WIA section 506.States may elect to use JTPA holdharmless procedures in allocating PY2000 and PY 2001 funds to local areas.A State that elects to use JTPA holdharmless procedures for PY 2000 and/orPY 2001 must allocate at least 90% ofthe average allocation to each workforceinvestment area that received anallocation under either JTPA or WIA forthe two preceding fiscal years. (JTPAsections 202(b)(2)(A) and 262(b)(2)(A)).States may use JTPA hold harmlessprocedures even where the geographicalboundaries of some or all JTPA servicedelivery areas are different from those ofthe State’s WIA Workforce InvestmentAreas. This can be done for the PY 2000WIA allotment by (1) taking the amountallocated to WIA local areas, (2)calculating the amount each local areawould have received using the PY 1998and PY 1999 JTPA allocations (JTPAproxy amounts), and (3) calculating 90percent of the average JTPA proxyamounts for each local area. Undereither the permitted JTPA hold harmlessor the WIA hold harmless provision, theamount needed to provide the increasedallocation(s) to the affected local areas is

to be obtained by ratably reducing theallocations to the other local areas.

Section 667.140 describes theauthority of Local Boards to transferfunds between programs. We receivedseveral comments suggesting that theregulation authorize local areas totransfer funds between the Youthfunding stream and either Adult fundsor Dislocated worker funds.

Response: The Act does not authorizetransfers involving Youth programfunds. The regulation has not beenchanged.

Section 667.150, which coversallotments, recapture of unobligatedbalances of allotments, and reallotmentsis being modified to exclude certainamounts from coverage by the recaptureprovision, namely: (1) amountsallocated to a single State local area orto a balance of State local areaadministered by a unit of the Stategovernment; and (2) inter-agencytransfers and other actions treated bythe State as encumbrances againstamounts reserved by the State underWIA sections 128(a) and 133(a) forStatewide workforce investmentactivities. The reasons for thismodification are discussed earlier inthis preamble in the discussion on theaddition of a definition of ‘‘obligation’’to § 660.300.

Section 667.170 sets forth ourauthority to perform a responsibilityreview of potential grant applicants. Wemay review any information that hascome to our attention as part of anassessment of applicant’s responsibilityto administer Federal funds. Theresponsibility tests include the items setforth in paragraphs (a)(1) through(a)(14). In this section, the term‘‘include’’ is used as it is throughout theInterim Final Rule, to indicate anillustrative, but not exhaustive list ofexamples. One commenter requestedclarification of § 667.170(a) about theidentity of the party(ies) subject to theresponsibility review requirements,particularly with regard to the taking of‘‘final agency action.’’

Response: Section 667.170(a) refers tothe organization that is the directrecipient of a grant from theDepartment. The agency referred to inthe phrase ‘‘final agency action’’ in§ 667.170(a)(1) is the awarding agencywhich awarded the funds in question inthe debt recovery action. No change hasbeen made to the regulations.

Subpart B—Administrative Rules, Costsand Limitations

1. Fiscal and Administrative Rules:Subpart B specifies the rules applicableto WIA grants in the areas of fiscal andadministrative requirements, audit



requirements, allowable cost/costprinciples, debarment and suspension, adrug-free workplace, restrictions onlobbying, and nondiscrimination. Thissubpart also addresses State and LocalBoard conflict of interest and programincome requirements, procurementcontracts and fee-for-service use byemployers, nepotism, responsibilityreview for grant applicants, and theGovernor’s prior approval authority insubtitle B programs.

We have updated references to thenondiscrimination regulations at 29 CFRpart 37 in paragraph 667.200(f) andmade three other changes to § 667.200 tocorrect inadvertent errors in the InterimFinal Rule. The first is to includecommercial organizations among thetypes of organizations listed in§ 667.200(a)(2), which specifies thecovered organizations identified at 29CFR 95.1. The second change is to inserta new paragraph (a)(7) in § 667.200, toindicate that interest income earned onfunds received under this title is to betreated as program income, as requiredby WIA section 195(7)(B)(iii) and torenumber the existing paragraph (a)(7)as (a)(8).

The third change is to insert a newparagraph (c)(6) in § 667.200, whichprovides that the costs of claims againstthe Government, including appeals tothe Administrative Law Judges, areunallowable costs. This provisionclarifies our long-standing applicationof the cost principles of OMB CircularsA–87 and A–122, and A–21, which wasinadvertently left out of the InterimFinal Rule. The provision distinguishesthe allowable costs of informallyresolving findings from audits andmonitoring reviews from theunallowable costs of making formalclaims against the Government at a laterpoint in the process.

Several comments suggestedincluding specific requirements in§ 667.200(a) about the use and contentsof particular types of agreementsbetween particular types oforganizations for providing goods andservices for WIA purposes. Section667.200 incorporates the uniformadministrative requirements at 29 CFRParts 95 and 97 into these regulations byreference, including requirementscovering procurement actions bygrantees and subrecipients. Most ofthese comments want us to requiregrantees and subrecipients to increasethe opportunities for potential providersto compete to provide services tograntees, subrecipients, andparticipants, including the operation ofOne-Stop centers. One commenterwanted us to clarify whether theuniform procurement requirements

apply to the selection of one-stopoperators and service providers. Othercommenters wanted us to require DOLdirect grantees to require theirsubgrantees to make all awards to one-stop operators and service providers inaccordance with the Department’suniform procurement procedures.Another commenter wanted us to say aslittle as possible on the subject due tothe complexity of local procurementrules and the inevitable conflicts whichwould result from issuance of additionalFederal requirements.

Response: We have, for many years,aggressively sought to maximizecompetition throughout the JTPAsystem so that JTPA grantees andsubgrantees obtain the best possibleworkforce development and relatedservices (employment and trainingservices) at the lowest possible cost.Under WIA, vigorous competition toprovide workforce services is embeddedin the design of the program through theuse of ITA’s. In addition, use ofgenerally applicable cost principles andadministrative requirements under§ 667.200 should assist grantees andsubrecipients to obtain the goods andservices needed for operation of theprogram with less administrative effortthan was the case under JTPA.Consequently, it is premature to beginregulating the details of how granteesand subrecipients obtain goods andservices for their own WIA activities, aswell as how they conduct theadministrative activities necessary toobtain and pay for training andsupportive services for participants. Wehave, therefore, decided that we will notimpose procedural requirements onawards of WIA-funded procurementcontracts and financial assistance ongrantees and subrecipients, beyondthose generally applicable requirementswhich apply to all Federal and non-Federal activities of the grantee orsubrecipient. This issue is alsodiscussed in the preamble discussion ofpart 660. It should be noted that the Actspecifies a few circumstances in whicha competitive process is not needed,such as the designation or certificationof a One-Stop operator by a consortiumof One-Stop partners under WIA section121(d)(2)(A)(ii). No change has beenmade to the regulations.

We received a number of commentson cost allocation issues particular toWIA and One-Stop organizations. Onecomment suggested that we should seekthe issuance of special cost principlesfor One-Stops using cost allocation basisother than benefits received, or otherwidely used basis.

Response: Our policy on WIA costdetermination is to let the parties

involved negotiate appropriate costallocation methodologies which reflectlocal factors and local needs, and torefrain from imposing program-wideregulations unless a general need exists.However, we are working with the otherWIA federal partner agencies, such asthe Department of Education, to developjoint guidance on this issue.

One commenter thought it wasinconsistent to require in § 667.200(a)(3)that procurement and otherrelationships between governments beconducted on a cost-reimbursementbasis, while also requiring in§ 667.200(a)(6) that any excess ofrevenue over costs earned bygovernmental or non-profitorganizations be treated as programincome.

Response: Both the cost-reimbursement and program incomeprovisions are statutory in origin. Thecost reimbursement provision in WIAsection 184(a)(3)(B) is similar to theUniform Administrative Standardsprovision in 29 CFR 97.22, allowablecosts, which prohibits the use of grantfunds for any fee, or other incrementover cost sought, by governmentalgrantees and subgrantees. The programincome provision in WIA section195(7)(A) ensures that any amountremaining on hand after all receipts andexpenditures have been accounted,regardless of the source of the receipts,will be treated as program income andadded to available program resources,(see change to § 667.200 noted above).Both provisions seek to maximize grantresources by assuring that governmentalgrantees only charge the grant for theiractual costs and return any excess fundsto the program. Thus, there is nonecessary conflict between the twoprovisions.

One commenter proposed that weestablish audit requirements forcontractors which are commercialorganizations. Section 667.200(b)(2)makes commercial organizations whichare subrecipients subject to auditrequirements like those applicable togovernmental and non-profit recipientsand subrecipients.

Response: Under 29 CFR part 96(subpart B), the Department isresponsible for the audit of commercialorganizations which are directrecipients. There is no Federalrequirement for audits of commercialorganizations which are vendors. If agrantee or subgrantee chooses to requireaudits of such vendor organizations,they can do so by contract if the partiesagree that such requirements arenecessary. No change has been made tothe regulations.



2. Administrative Costs: Section667.210 restates the provisions insection 128(b)(4) of the Act which set aState level administrative cost limit offive percent of total funds allotted to theState by the Department and a localadministrative cost limit of 10% offunds allocated by the State to the localarea. It also provides that the costlimitation applicable to awards undersubtitle D will be specified in the grantagreement. We received manycomments on the administrative costlimits. Almost all of the comments saidthat the limits were too low and thatthey would jeopardize the program’sprospects for success. Commentsaddressed how particular groups wouldbe especially burdened by the costlimitations. Many INA and NFJPgrantees, as well as individuals andgroups concerned about INA and NFJPprograms, appeared to believe that theSubtitle B cost limitations also appliedto Subtitle D INA and NFJP grants.

Response: Section 667.210(b)provides that the applicable costlimitations for subtitle D programs willbe identified in the award document.The administrative cost limitation forINA and MSFW grants under subtitle Dof Title I may exceed the 10 percentlimitation applicable to Subtitle Bactivities. However, no such flexibilityis available for Subtitle B activities,since the Subtitle B cost limitations areestablished by law. Accordingly, nochanges were made to paragraphs (a)and (b) of this section.

Paragraph (c), which exceptshardware and software costs ofparticipant tracking and monitoringsystems from the administrative costlimitation, has been removed from thefinal regulation. This provision becameunnecessary after administrative costswere redefined in response to publiccomments and our own re-examinationof how administrative costs weredefined in other DOL-funded programsand the programs of other partneragencies whose programs wererepresented in One-Stop centers.

Definition of Administrative Costs—Section 667.220 provides our definitionof Administrative Costs. To complywith the statutory requirement forconsultation with the Governors indeveloping this definition, we havecontinuously consulted withrepresentatives of the Governors, andState and local stakeholders. In additionto the input received through theconsultation, we received suggestionsabout the definition of administrativecosts in various forums and by directcommunications from a number ofdifferent sources including commentson the Interim Final Rule. The key

theme which emerged from this publicconsultation is that the function andintended purpose of an activity shouldbe used to determine whether the costsassociated with it should be charged tothe program or administrative costcategory. We received a number ofcomments on this subject and on theWIA cost limitations, to which it isclosely related. In addition, we didsome sampling studies of howmodifications of the definition ofadministrative costs would affect WIAprogram administration generally andthe ability of the States and of LocalBoards to comply with the costlimitations.

A common criticism of theadministrative cost definition in theInterim Final Rule was that redefiningadministrative costs and, in particular,treating the cost of first tier supervisionof direct program staff as program costswould have little impact on totaladministrative costs or compliance withthe administrative cost limitation. Thesame criticism was directed at thetreatment of computer hardware/software costs incurred for participanttracking and monitoring as exceptedfrom the administrative cost limitation.One comment recommended saying thatall staff costs associated with thetracking and monitoring of participantsshould be classified as program (non-administrative) costs; anothercommenter suggested that all trackingand monitoring system developmentand utilization costs be charged toprogram costs.

We received numerous suggestions onhow particular categories of costsshould be defined. Many, but not all ofthese suggestions were based on theeffect such changes would have oncompliance with the administrative costlimitation. For example, one commentsuggested either treating all One-Stop orcontractor costs as programmatic, orretaining the 15 percent cost limitationunder JTPA title III; several commentsrecommended treating all costs incurredby One-Stop operators and serviceproviders as program costs regardless ofthe functions they were performing.Several comments were directed toobtaining clarification of the phrase‘‘direct provision of workforceinvestment activities’’ in § 667.220(c)(1),and to associate the term with theactivities of One-Stop operators andservice providers. Several commenterssuggested that the ‘‘intended purpose’’language in § 667.220(c)(5) should beclarified so that administrative costswould not have to be broken out fromcontracts with for-profit organizations.One comment requested that a cleardistinction be made between tracking

and monitoring costs on the one handand program monitoring costs on theother.

Several commenters suggested thatother Federal agencies’ criteria foradministrative costs in grants to otherOne-Stop partners are more liberal thanDOL’s criteria, especially their criteriafor costs incurred by service providersand other contractors. A fewcommenters suggested that no costsincurred by for-profit contractors shouldbe treated as administrative. Onecomment suggested that all continuousimprovement costs be charged totraining (program) based on language in§ 666.120(a) relating improvement toprogram participation rather thansystemic changes. Finally, onecommenter suggested that all reasonableadministrative costs be funded, or thatwe reduce our level of expectations withregard to oversight, procurement, andfiscal requirements.

Response: Section 667.220 has beenextensively revised as a result of thesecomments, and of our own review of theeffect of various administrative costdefinition proposals on efficiency andease of administration, as well ascompliance with the cost limitations. Aspart of the review process, a sample ofsubrecipients’ costs were comparedunder three different formulations of theadministrative costs definition. Therevised definition provides thatadministrative costs are only those costsincurred for overall programmanagement purposes by State andlocal workforce boards, direct WIA grantrecipients, local grant subrecipients,local fiscal agents, and One-Stopoperators. The only One-Stop operators’costs which are to be classified asadministrative costs are those for one ormore of the functions enumerated in§ 667.220(b) and discussed in thefollowing paragraph. All costs ofvendors and subrecipients, other thanlocal grant subrecipients, are programcosts with the single exception ofawards to such vendors andsubrecipients which are solely for thepurpose of performing functionsenumerated in the following paragraph.Thus, incidental administrative costsincurred by a contractor whosecontract’s intended purpose is toprovide identifiable program services donot have to be identified, broken outfrom other costs incurred under thecontract, and tracked against theadministrative cost limitation. Costsincurred under contracts whoseintended purpose is administrative haveto be charged to the administrative costcategory.

The enumerated administrativefunctions performed by the identified



administrative entities are the following:accounting and budgeting; financial andcash management; procurement andpurchasing; property management;payroll and personnel management;general oversight, audit andcoordinating the resolution of findingsfrom audits, reviews, investigations, andincident reports; general legal services;developing and operating systems andprocedures, including informationsystems, required for administrativefunctions; and oversight and monitoringof administrative functions. Only theseenumerated administrative functions areto be charged as administrative costs.The costs of first line supervisors of staffproviding direct services to participantsare program costs. The discussion ofthis cost item has been removed fromthis new definition because it is nolonger needed.

Two types of costs that werespecifically previously classified asadministrative costs, preparing program-level budgets and program plans, andnegotiating MOU’s and other program-level agreements, are now classified asprogram costs, even though they areoften associated with generalorganizational management. Costs ofsuch activities as information systemsdevelopment and operation, travel, andcontinuous improvement are charged toprogram costs or administration,according to whether the underlyingfunctions which they support areclassified as programmatic oradministrative. For example, the costs ofdeveloping an information systemwhich serves both administrativefunctions and the tracking andmonitoring of participants would beallocated between program costs andadministrative costs in proportion to theutilization of the system for eachintended purpose.

We believe that these changes in thedefinition of administrative costs notonly address the varying concerns andperspectives expressed in thecomments, but also take advantage ofthe opportunities for simplifyingprogram administration offered by thechanges in the way program serviceswill be delivered under WIA. UnderWIA, the role of the One-Stop centeroperator is broader than just that ofprovider of programmatic services; it isalso responsible for the operation of theOne-Stop center and the coordination ofall activities within the center. Thedefinition of administrative costs in thisFinal Rule was tested using a sampledrawn from a group of JTPAsubrecipients whose administrativecosts had previously been reviewed totest the Interim Final Rule definition ofadministrative costs. The results

showed a significant reduction in thelevel of administrative costs at all butone of the sampled sites. That site wasone in which all JTPA activities wereprovided by the subrecipient, which isquite unlike the service deliverymethodology envisioned by WIA. Theseresults indicate that local areas shouldbe able to operate within the WIA costlimitations, using the revised definitionof administrative costs at § 667.220.

3. Eligibility Determinations: Ourpartners in the Veterans Employmentand Training Service indicated thatworkforce investment programs may notbe fully aware of special rules applyingto veterans when income is a factor ineligibility determination. Therefore, wehave added a new § 667.255 whichrefers programs to 38 U.S.C. 4213,which exempts military pay and certainother benefits from past income foreligibility purposes.

4. Prohibited Activities: Sections667.260 through 667.270 address anumber of prohibited activities that arelocated in various sections of the Act.We have revised § 667.266 to providethe appropriate cross-reference to thenondiscrimination regulations at 29 CFR37.6(f), which implement the WIAlimitations on the use of financialassistance for sectarian activities.Section 667.269 specifies where theprocedures for resolution of violationsof these prohibitions, as well as thesanctions and remedies, may be found.

Section 667.260 prohibits the use ofWIA funds for the purchase orconstruction of facilities or buildingswith certain exceptions. This is anexception to the generally applicablecost principles, incorporated byreference in § 667.200(c), under whichsuch costs are allowable with priorgrantor approval as direct costs,provided they are not specificallyprohibited, as they are here. Wereceived several comments asking thatwe clarify or expand the exception tothe purchase and construction banunder which the costs of repairs,alterations, and renovations areallowable for grantee-owned buildingsacquired with JTPA, Wagner-Peyser, orUI grant funds to also cover leasedbuildings. Several comments suggestedpermitting the use of WIA funds forcapital costs and current operating costsof leased and ‘‘loaned’’ buildings.

Response: WIA funds may be used forrenovations and other capitalexpenditures on grantee/subrecipient-owned or leased buildings in order toprovide reasonable accommodationunder section 504 of the RehabilitationAct of 1973, the Americans withDisabilities Act, section 188 of WIA, andthe regulations implementing these

statutory provisions. WIA funds mayalso be used for repairs, alterations, andother current operating costs incurredfor this purpose.

In general, repairs and alterations arecurrent operating costs; use of WIAfunds for such costs is not restricted inthe statute or in these regulations.Renovation costs are usually capitalexpenditures. Capital expenditures, thatis expenditures of $5,000 or more whichincrease the value or a useful life ofproperty, are subject to the restrictionsof § 667.260(b), which apply to grantee/subrecipient-owned real property. Inresponse to the comments, thisparagraph has been clarified toexplicitly cover renovations to grantee/subrecipient-owned real propertyacquired with JTPA, Wagner-Peyser, orUI grant funds. Neither the Act nor theregulation restricts the use of WIA fundsfor capital expenditures or currentoperating costs of leased and loanedproperties. Consequently, theseexpenditures are allowable if consistentwith generally applicable grantee/subrecipient policy relating to leasedpremises and lease cost adjustments fortenant expenditures for improvementsto the landlord’s property, and ifconsistent with the other provisions of§ 667.260(b).

One comment suggested that ETAconsider an additional exception to theprohibition of building or buying realproperty in the case of capital leases.

Response: Consistent with the OMBallowable cost circulars, we considercapital leases, for example, rental-purchase agreements and leases with anoption to purchase, to be purchases ofproperty with borrowed funds. They areleases in form only. Consequently, WIAfunds cannot be used for the costs ofsuch an arrangement. Allocabledepreciation and interest costs wouldhowever, be allowable. No change hasbeen made to the regulations.

One comment suggested changing§ 667.262, which covers employmentgenerating activities (EGA), to includecontacts with labor organizations andresource centers, and contacts with jointlabor-management committees underpermissible employer outreach and jobdevelopment activities.

Response: The regulation has beenmodified accordingly. We have notacceded to a related suggestion thatgrantees specifically account for EGAcosts because we think this is notnecessary in view of the fact that thefinancial management standardsincluded in 29 CFR Parts 95 and 97already require recipients to be able toaccount for the source and applicationof grant funds.



One comment suggested making anexception to the prohibition in§ 667.264 against foreign travel in thecase of cross-border official businessconducted by border State staff.

Response: We have not changed theregulation because the statute explicitlyprohibits foreign travel for programsunder Title I, subpart B.

Section 667.268 which prohibits theuse of WIA funds to encourage businessrelocation, provided several commentsasking if there is a national site whereinterested parties can obtaininformation relative to the relocatingestablishment requirements of§ 667.268.

Response: No such site exists atpresent and we have no current plansfor establishing such a site.

A commenter suggested addingconsultation with labor organizationsand councils to the pre-award review ofnew and expanded establishments in§ 667.268.

Response: We have added a newparagraph(b)(2) to § 667.268 to providefor permissive consultation with labororganizations in the affected area.

A comment, which concerned theapplicability of the Davis-Bacon Act totraining activities, is not dealt with herebecause it is a subject which isconsidered in connection with trainingprogram requirements rather thangeneral administrative requirements.

5. Impairment of CollectiveBargaining Agreements: Section 667.270lists the safeguards that ensure thatparticipants in WIA activities do notdisplace other employees. Theseinclude the prohibition on impairmentof existing contracts for services orcollective bargaining agreements that iscontained in WIA section 181(b)(2).When an employment and trainingactivity described in WIA section 134would be inconsistent with a collectivebargaining agreement, the Rule requiresthat the appropriate labor organizationand employer provide writtenconcurrence before the activity begins.

6. Nondiscrimination: Section 188 ofthe Act prohibits discrimination on thebasis of race, color, national origin, sex,age, disability, religion, politicalaffiliation or belief, participant status,and against certain noncitizens. It alsorequires the Secretary to issueregulations ‘‘necessary to implementthis section not later than one year afterthe date on enactment’’ of the Act.Interim Final Regulations implementingthis section were published at 29 CFRpart 37 and are available at 64 FR 61692(Nov. 12, 1999). We have revisedreferences to the section 188 regulationsthroughout this Final Rule tospecifically refer to 29 CFR part 37.

Section 667.275(a) provides thatrecipients must comply with the section188 nondiscrimination and equalopportunity provisions of the Act andits implementing regulations at 29 CFRpart 37. This provision is substantiallysimilar to that found in § 627.210, thecompanion section of the regulationsimplementing the JTPA. Slightmodifications have been made to thelanguage to eliminate any possibleconfusion about who is covered bysection 188 and 29 CFR part 37. In thecontext of those provisions, a recipientis any entity that receives financialassistance, as defined in 29 CFR 37.4,under title I of the Act (except for theultimate beneficiary), whether theassistance comes directly from theDepartment, through the Governor, orthrough another recipient. A variety ofterms not specifically listed in thedefinition at 29 CFR 37.4, such asvendors or subrecipients, may be usedto identify such entities. However, anyentity that receives financial assistanceunder title I of WIA is a recipient andis, therefore, subject to section 188 ofWIA and its implementing regulationsat 29 CFR part 37, and to § 667.275 ofthis part, to the extent that those entitiesparticipate in the One-Stop deliverysystem.

Several comments on §§ 667.270 and667.275 suggested enhancing theprotections afforded incumbent workersagainst displacement, and the non-discrimination and equal opportunityprotections afforded participantsthrough such means as the Departmentnotifying employees about theseprotections or requiring the States to doso, requiring One-Stops to provideinformation on the availability of non-traditional opportunities for women inorder to reduce the incidence of gender-tracking, specifying coverage of OJT orother employer-provider services toindividuals in these provisions, andbanning the use of WIA funds tosubsidize new employees that anemployer would have hired withoutWIA support.

Response: We are not modifying thenon-discrimination provisions herebecause this subject is covered in muchgreater detail in the WIA section 188nondiscrimination regulations at 29 CFRpart 37. We are not modifying theincumbent workers protectionsprovision of § 667.270 because themaintenance of effort requirementwhich the commenter seeks to imposeon employers receiving WIA fundsexceeds the protections authorized byWIA section 181. Several of thecommenters’ requests are discussed inmore detail in other parts of thispreamble.

Subpart C—Reporting Requirements

Section 667.300 indicates that we willissue instructions and formats forfinancial, participant and performancereporting. A request for public commenton the Department’s WIA StandardizedRecord Data, Quarterly SummaryReport, and Annual Report waspublished in the Federal Register onApril 3, 2000. A copy of the notice canbe found on the Internet atwww.usworkforce.org. We anticipatethat DOL reporting will be doneelectronically. We will issue reportingguidance which discusses such specificmatters as the anticipated lag-time inusing UI wage records at follow-up.Section 667.300 also provides that agrantee may impose different reportingrequirements on its subrecipientsincluding different forms, shorter duedates, etc. When a State is the granteeand plans to impose different reportingrequirements, it must describe them inits State Plan. Some commentssuggested that flexibility be provided inimposing additional reportingrequirements on subrecipients.

Response: We have not changed theregulation since it already permitsgrantees to impose differentrequirements on subrecipients, providedthey are consistent with the State WIAplan and produce the informationrequired for grantee reports.

Section 667.300(e), concerning theAnnual Performance Progress Report,specifies the situations under which asanction, including a possible reductionin the subsequent year’s grant amount,may be imposed. Two commentsexpressed concern that unspecifiedverification procedures would be usedfor imposing sanctions and that thereneeded to be flexibility in theimposition of sanctions.

Response: Specifications regardingsanctions have been issued in ETATraining and Employment GuidanceLetter 8–99, Negotiating PerformanceGoals and Incentives and SanctionsProcess under Title I of WIA.

Other comments suggested the duedate for financial reports be extendedpast the 45 days stated in the regulation,but no specific reason for an extendedtime period was given.

Response: We are unaware of anyreason why additional time is requiredfor submitting reports. No change hasbeen made to the regulations.

Subpart D—Oversight and Monitoring

We have modified § 667.410(b) toinclude a reference to 29 CFR part 37relating to the State’s monitoringsystem. Subpart C of 29 CFR part 37contains additional provisions regarding



the Governor’s nondiscrimination-related oversight responsibilities.

Subpart E—Resolution of Findings fromMonitoring and Oversight Reviews

1. Resolution of Findings and GrantOfficer Resolution Process: This subpartaddresses the resolution of findings thatarise from audits, investigations,monitoring reviews, and the GrantOfficer resolution process. Theprocesses are essentially the same asthey were under JTPA. One commentraised the question of what findingsresolution process should be usedwhere more than one process isavailable to, and could be used by, thegrantee to resolve findings relating toWIA activities.

Response: Our position is that suchmatters are State matters; whatprocedures to use is left to the States todetermine. The exception is thatresolution of findings related todiscrimination issues arising undersection 188 of WIA or 29 CFR part 37must be conducted in accordance withthe procedures set forth in that part.

A commenter suggested allowing 90days instead of 60 for commenting onand taking appropriate corrective actionon findings from monitoring andinvestigative reports.

Response: We believe that 60 days issufficient for taking the requiredactions, based on our experience withother work and training programsoperated by governmental grantees.

Subpart F—Grievance Procedures,Complaints, and State AppealsProcesses

Section 667.600 describes thegrievance and complaints proceduresrequired by WIA. We have revised§ 667.600(g)(1) to clarify that complaintsalleging discrimination must be handledin accordance with procedures thatmeet the requirements of 29 CFR part37. Paragraph 667.600(g)(2) gives theaddress of the Department of Labor’sCivil Rights Center, where individualscan send questions or complaintsalleging violation of WIA section 188.The address is: U.S. Department ofLabor, Civil Rights Center, 200Constitution Avenue, NW, Room N4123,Washington, DC 20210. Individuals mayalso contact the Civil Rights Center bytelephone at 202–219–6118 (voice) or 1–800–326–2577 (TTY/TDD).

We received numerous comments ongrievance procedure requirements forStates, local areas, and other directrecipients. Most concerned assuring thatparticipants and other potentialgreivants receive sufficient notice oftheir rights in a format understandableto youth or to persons with limited

English proficiency. Some commentsasked that we impose a requirement ongrantees and subrecipients that theyrequire One-Stops and other providersto notify participants of their appealrights. Other comments urged us toestablish particular requirementsgoverning procedures to be used forassuring procedural due process,conducting investigations, adjudicatingcomplaints, conducting discovery,providing for informal hearings,enforcement, review by United Statescourts, protection against retaliation,and the use of mediators. Somecommenters sought clarification orgreater specificity in particular areas,such as coverage of employers ofparticipants, and particular sanctionsavailable against non-compliantemployers. One comment objected tousing the denial of procedural rights asa ground for appeals of local areadesignations to the Secretary undersection 116(a)(5) of the Act.

Response: We are quite interested inassuring that all persons affected byWIA are aware of their rights under theAct. We also want to assure personswho believe their rights have beennegatively affected by WIA-relatedactions of non-Federal parties, as well asby the Department of Labor and itsFederal partners, have access toappropriate remedies. In response to thecomments on informing participantswho are youth or persons with limitedEnglish proficiency, we are modifyingthe regulation by inserting a newparagraph § 667.600(b) to require Statesand local areas to assure that allparticipants and other interested partiesare notified of their appeal rights inlanguage which can be understood byyouth and persons of limited Englishproficiency. Such efforts must complywith the requirements of 29 CFR 37.35about the provision of services andinformation in languages other thanEnglish. We cannot authorize appeals toUnited States District courts byregulation because it exceeds theauthority Congress has given us. WIAsection 187 specifies that appeals ofAdministrative Law Judge (AJL)decisions be taken to the appropriateUnited States Court of Appeals, (asprovided in § 667.850). With regard tothe other issues raised by commenters,we have not modified the regulation.While we agree that State and localgrievance procedures should containfull due process protections, we havenot modified the regulations to includethe specific protections requested bycommenters in the interest of affordingStates and local areas flexibility todesign effective grievance procedures

that work in their particularcircumstances.

Subpart G—Sanctions, CorrectiveActions, and Waiver of Liability

This subpart addresses sanctions andcorrective actions, waiver of liability,advance approval of contemplatedcorrective actions, as well as the offsetand State deduction provision. We havemodified § 667.700(a) and (b) to clarifythat the processes outlined in 29 CFRpart 37 must be followed in mattersinvolving claims of discrimination. Theonly comments received on this subpartwere on § 667.705(c), which requiresCEO’s of local governments comprisinga WIA local area to specify the jointliability of such local governments in awritten agreement. Two of thecomments took opposing positions onwhether there should be any jointliability at all. The third comment saidthe regulation should ‘‘clarify’’ the localgovernments’ liability for misuse offunds.

Response: Section 117(d)(3)(B)(i) ofWIA designates local CEO’s as grantrecipients and makes them liable formisuse of funds unless they obtain theGovernor’s agreement to serve asrecipient for their area and assume theirliability. The regulation interprets thisprovision to mean that the localjurisdictions are liable for misuse offunds and where multiple jurisdictionsreceive funding under a single grant, theliability assumed by each localgovernment must be clearly stated in awritten agreement between the parties.It is our intention in this provision thatthe liability of the local governments ina multiple jurisdiction local area bedetermined by those governments. Wedid not to imply that governments inmultiple jurisdiction local areas must be‘‘jointly and severally’’ liable, althoughthey may choose to share liability inthat manner. Therefore, we havedropped reference to the phrase ‘‘jointliability’’ in § 667.705(c) and replaced itwith ‘‘liability’’.

Sections 667.700 and 667.710 havebeen revised to more accurately specifythe Grant Officer’s and the Secretary’sauthority to impose corrective actions,including plan revocations andreorganizations, directly against localareas, and to terminate or suspendfinancial assistance. As revised,§ 667.700(d) provides that if theGovernor does not promptly takecorrective actions against a local area forsubstantial violations of WIA and itsregulations, the Grant Officer, underWIA section 184(b)(3), may imposecorrective actions directly against thelocal area. Sections 667.700(c) and667.710(c) provide that if the Governor



has failed to promptly take correctiveactions against a local area for notcomplying with the uniformadministrative requirements, or if theGovernor has not monitored andcertified local area compliance withthose requirements, the Grant Officer,under WIA section 184(a)(7), mayrequire the Governor to take thenecessary actions. If the Governor failsto take the corrective actions requiredby the Grant Officer, the Secretary mayimmediately suspend or terminatefinancial assistance under WIA section184(e).

Subpart H—AdministrativeAdjudication and Judicial Review

This subpart specifies those actionswhich may be appealed to theDepartment’s Office of AdministrativeLaw Judge (OALJ), and the rules ofprocedure and timing of decisions forOALJ hearings. Section 667.825 setsforth special requirements that apply toreviews of NFJP and INA grantselections. A change has been made to§ 667.105 (discussed above, in subpartA), which relates to this provision. Wehave corrected an error in § 667.830(b),to provide that any appeal accepted bythe Administrative Review Board mustbe decided within 180 days ofacceptance, as required by WIA section186(c). Section 667.840 also provides foran alternate dispute resolution process.In addition, § 667.850 describes theauthority for judicial review of a finalorder of the Secretary.

One commenter recommendedincreasing DOL’s burden of productionin OALJ appeals to require presentationof a prima facie case.

Response: We have not changed theseprocedural rules, which have workedwell over the years and have providedappellants procedural due process.

Subpart I—Transition

Section 667.900 indicates that aGovernor may reserve up to two percentof Program Years 1998 and 1999 JTPAformula funds, of which not less than50% must be made available to localentities, for expenditure on WIAtransition planning activities. Itspecifies that the source of funds may beany one or more of JTPA’s titles orsubtitles. It includes a provision thatexpressly excludes funds so reservedfrom any calculation of compliance withJTPA cost limitations. The Governormust decide to make the funds availableto one or more local entities. Thesemight include a local JTPA entity, alocal entity established for the purposeof operating WIA programs, or any otherlocal entity.

One commenter suggested replacingthe references to program years 1998and 1999 with fiscal year references.

Response: We have replaced thereference to program years in § 667.900with fiscal years.

Another comment suggestedclarifying which local entities were toreceive transition funding from theState.

Response: This matter was notaddressed in the statute and we notaware of any reason for reducing Stateflexibility in this area. Accordingly, wewill not prescribe how transition fundsare to be allocated to local entities.

We have received a number ofquestions about how JTPA enrollees areto be transitioned over to WIA. We haveresponded to several situations in aQuestion and Answer format which canbe found through our website at http://usworkforce.org/q&a-transition.htm. Inorder to emphasize the importance ofensuring a smooth transition from JTPAto WIA for participants, we have addeda new § 667.910 clarifying that all JTPAparticipants who are enrolled in JTPAmust be grandfathered into WIA. Theseparticipants can complete the JTPAservices specified in their individualservice strategy, even if that servicestrategy is not allowable under WIA, orif the participant is not eligible toreceive these services under WIA.

Part 668—Indian and Native AmericanPrograms under Title I of the WorkforceInvestment Act

Introduction

This part establishes the operation ofemployment and training programs forIndians and Native Americans under theauthority of section 166 of the Act. Thispart is broken into subparts dealingwith: purposes and policies; servicedelivery systems; customer services;youth services; services to communities;grantee accountability; planning andfunding; administration; andmiscellaneous provisions such aswaivers. In crafting these regulations,we have attempted to organize part 668in a way which is relatively easy tofollow and as comprehensive aspossible without repeating majorsections of the general WIAadministrative regulations contained inpart 667. Cross-references to that partare provided in the body of theseregulations, when appropriate.

During the comment period on theWIA Interim Final Rule, we receivedwritten comments submitted by morethan one hundred current JTPA Indianand Native American grantees. Inaddition, we held several ‘‘town hall’’meetings in ‘‘Indian Country’’ which

produced additional commentssubmitted in writing or presented orallyin the course of discussion of relevantissues. We also received input from theNative American Employment andTraining Council (the Advisory Council)and its regulations work group. We willdiscuss the most frequently raisedissues first and then discuss the othercomments.

We have condensed the remainingcomments into several major areas ofgeneral concern to most commenters.Issues involving administrative costlimitations and representation on Stateand Local Workforce Investment Boardsare primary concerns of some section166 grantees. They are concerned withregulations outside of part 668, and soare covered as part of the generaldiscussion.

Administrative Cost LimitationThe issue which concerned

commenters most was theadministrative cost rate, and itsapplication to section 166 granteesunder WIA. Commenters expressed theconcern that section 166 grantees wouldbe held to a 10% administrative costlimitation. They viewed this limitationas providing inadequate funding for theadministrative work they have to do toadminister their grants. They pointedout that the WIA requirements for activepartnership in local WorkforceInvestment Areas and for negotiatingOne-Stop MOU’s, place newadministrative burdens on section 166grantees. Some commenters suggestedthat the regulations adopt a 20%limitation on administrative costs.

Response: The provision onadministrative cost limitations, at 20CFR 667.210(b), does not specify a givenadministrative cost rate for section 166programs; rather it provides that eachgrantee’s limit on administrative costswill be identified in the grant document.The regulations reflect our intent toprovide section 166 grantees adequateadministrative funding through thegrant negotiation process. Thus,suggestions that we exempt amountsspent on indirect costs from theadministrative costs definition (and thusfrom any cost limits), or that we fundindirect costs from a separate fundingsource which would not be subject toany cost limits are not necessary toaccomplish the commenters’ goals. Weconsider both suggestions to be eithercontrary to Departmental practices orcontrary to the funding formula(s)contained in this Rule. However, toprovide additional clarification, wehave added a new section to part 668(§ 668.825) stating that limits onadministrative costs for section 166



grants will be negotiated with thegrantee and identified in the grantaward document.

General Issues of Representation andWorkforce Investment SystemGovernance

The rules relating to the participationof INA grantees in the state and localworkforce investment system generatedmany comments. Below, we discussissues relating to alternative entities andrepresentation on State Boards, LocalBoards and Youth Councils. Similarissues are discussed in relation to theNational Farmworker Jobs Program inthe preamble to part 669, and for theworkforce investment system in generalin the preamble to part 661.

Alternative EntitiesIndian and Native American grantees

expressed concern over the effects of thedesignation of alternative entities underWIA on their ability to play apartnership role in the local workforceinvestment system. Although alternativeentities are permitted by section 117(i)of WIA, commenters feel that alternativeentities violate WIA section117(b)(2)(A)(vi) which mandates thateach Local Board contain ‘‘arepresentative of each of the one-stoppartners’’. Since section 121(b)(1)(B)(i)of the Act identifies section 166 granteesas mandatory (‘‘required’’) partners inthe One-Stop System, most grantees feelthis requires that they be given a seat ontheir Local Board.

Response: We recognize that lack ofrepresentation on Local Boards is alegitimate and serious concern. WIAsection 117(i) does, however, permit theuse of alternative entities. We certainlyencourage as broad a representation aspossible on all WIA boards or councils,especially representation of thoseentities identified as ‘‘requiredpartners’’ in the Act. The Interim FinalRule, at 20 CFR 661.330(b)(2), addressesthis problem by requiring that, if analternative entity is used, ‘‘the localworkforce investment plan must explainthe manner in which the Local Boardwill ensure an ongoing role for any suchgroup in the local workforce investmentsystem’’ if that entity is not representedon the board of an alternative entity. Toclarify that the required partners mustbe included among ‘‘any such group’’ensured of an ongoing role, we amendedthis provision, by replacing that phrasewith the phrase ‘‘the unrepresentedmembership group,’’ and by insertingthe phrase ‘‘including all the partners’’following ‘‘each of the categories ofrequired Local Board membership underWIA section 117(b).’’ 20 CFR661.330(b)(3) provides that the ongoing

role requirement may be met byproviding for ongoing consultationswith an unrepresented One-stop partnerprogram. It also provides that, as part ofits ‘‘ongoing role’’ responsibility, thealternative entity must undertake goodfaith negotiations with eachunrepresented partner on the terms ofits Memorandum of Understanding(MOU) with the unrepresented partner.

We expect that local workforceinvestment areas will follow theregulations and that the States willensure that all partners have appropriateand effective representation on LocalBoards or alternate entities. Weencourage local parties to resolve issuesof representation to their mutualsatisfaction, in accordance with the Actand regulations.

Representation on State BoardsSeveral grantees expressed a belief

that there is no requirement for NativeAmerican representation on the StateWorkforce Investment Boards. Otherswere concerned that Governors wereappointing individuals to represent INAgrantees who did not have INA programexpertise. Although not specificallyrequired in the statute, our granteeshave expressed the desire that the FinalRule include at least the encouragement(if not the requirement) that all types ofWIA grantees (Indians, farmworkers,etc.) at least be represented on the StateBoard by a member of that class ofservice provider.

Response: While the Act does notrequire that the interests of section 166grantees be represented by arepresentative appointed by the grantee,section 111(b)(1)(C)(vi)(II) of the Actclearly requires that those interests, andthe interests of all One-Stop partnerprograms, be represented on StateBoards by either the lead State agencyofficials with responsibility for theprogram or, if there is no such official,by a representative with expertise in theprogram.

In many cases, there will not be a leadState agency with responsibility forIndian and Native American programs,so the interests of section 166 granteeswill be represented by a person havingexpertise in Indian and NativeAmerican programs. While weencourage Governors to appoint arepresentative nominated by Indian andNative American programs and Migrantand Seasonal Farmworker programs torepresent those programs on StateBoards, we cannot require them to doso. We have, however, revised theregulations in 20 CFR part 661 to clarifythe requirements for representation ofOne-Stop partner programs on the StateBoard. Under new 20 CFR 661.203(b),

the representation of a One-stop partnerprogram may be fulfilled by an officialfrom the program partner, such as thesection 166 grantee, or the Governormay appoint a representative in theState having ‘‘documented expertiserelating to’’ the required partnerprogram in the State. An agency officialor other individual representing a One-stop partner program also must be anofficial with optimum policy-makingauthority in the organization he or sherepresents. As defined in 20 CFR661.203(a), a representative with‘‘optimum policy making authority’’ isan individual who can reasonably beexpected to speak affirmatively onbehalf of the entity he or she representsand to commit that entity to a chosencourse of action. We think that thesenew definitions will provide granteeswith significant assurance ofappropriate and effective representationon the State Boards.

Representation on State and LocalBoards as Employers

Several grantees have expressed thedesire that the regulations be revised tosuggest that, where appropriate, tribalentities be included on State and LocalBoards as employers, which would beespecially appropriate for some tribeswith significant economic developmentactivities which may make them asignificant employer in their portion ofthe State.

Response: While we see the merit inthis approach and encourage Governorsand chief elected officials to consider itas an option, we think the Act givesGovernors and chief elected officialsbroad discretion in selecting businessmembers of State or Local Boards fromamong those nominated. We do notthink we can limit that discretion as thegrantees request. Thus, we have notmade the suggested regulatory change.However, we have revised 20 CFR661.200 and 661.315 to expresslyauthorize multiple representation by anindividual appointed to a State or LocalBoard. Therefore, where the Governor orCEO selects an individual who meetsthe representation requirements for the166 partner program and for businessrepresentation, the regulations authorizethat person to represent both groups.

Grantee Representation on Local BoardsMany grantees have commented that

States and local areas are not clear onthe WIA representation requirementseven where Local Boards are newlycreated and must meet therepresentation requirements of the Act.Questions have arisen about whetherLocal Boards must include all section166 grantees in their area, or just ‘‘a



representative’’ of Native Americangrantees. Commenting Native Americangrantees urged that the regulations at 20CFR 661.315(a) be strengthened tospecify that each individual section 166grantee in a local WIA is entitled to aseat on the local board. Somecommenters have suggested that thegrantee should have the authority toselect the individual who is to representthem on the Board.

Response: While we agree that section166 grantees must be represented on theLocal Board, we also recognize theproblem, raised by a number of othercommenters, of the potentially large sizeof Local Boards. We strongly encouragelocal elected officials to giverepresentation to all partner programswithin their local area, but we do notinterpret WIA as requiring that eachlocal grantee be individuallyrepresented on the Local Board, in caseswhere there is more than one grantee ofa particular One-Stop partner programoperating in a local area. As discussedbelow, the part 661 regulations nowclarify that CEO’s may appoint oneindividual to represent multipleentities, but also clarify that CEO’s maysolicit nominations for appointmentsfrom the grantees.

Nor are we able to change theregulations to permit a One-stop partnerprogram to choose who it wishes torepresent it. While we cannot requirethat the CEO select a representativenominated by the grantee to representit/them on the Local Board, there aresignificant protections in the Act andregulations to assure that grantees areproperly represented. The CEO hasdiscretion in determining who toappoint to a Local Board. Thatdiscretion is, however, constrained bythe requirement in WIA section117(b)(3) and in 20 CFR 661.315 that therepresentative of a partner have‘‘optimum policymaking authoritywithin’’ the partner entity. In caseswhere there is a single section 166grantee in a local area, the CEO’sdiscretion is quite limited. In caseswhere there are more than one granteein the local area, the CEO’s discretion isa little broader since, as provided in 20CFR 661.317, the CEO is only requiredto appoint one representative of thepartner program. In either case,however, the interests of section 166grantees must be represented by anindividual who has optimumpolicymaking authority and, therefore,can knowledgeably and effectivelyrepresent the partners’ interests.

Youth CouncilsCommenters asked for clarification of

the role of the youth councils in the

WIA process, and especially the role ofsection 166 grantees in the youthcouncils. For example, to what degreewill the youth council ‘‘coordinate’’youth activities in a local area? Willsection 166 grantees who sit on the localboard be entitled to sit on the youthcouncil if they provide services toyouth, but don’t get supplemental youthservices funding (such as an urbangrantee)? To what degree will a section166 grantee which receivessupplemental youth services funding berequired to ‘‘coordinate’’ its youthprogram with or through the youthcouncil?

Response: Neither the regulations inpart 668, subpart D, nor the regulationsin 20 CFR part 664 currently addressthese issues. Commenters basicallyasked for further definition of the wholearea of youth services, either inregulations or other administrativeguidance. Unlike the requirements forLocal Board membership in WIA section117(b), section 117(h) contains noentitlement for specific organizationalrepresentation on a local youth council.However, as stated in WIA section117(h)(1), members of the youth councilare appointed by the Local Board incooperation with the chief electedofficial(s) in the local area. Among thecategories of youth councilrepresentatives, paragraph (2) of WIAsection 117(h) provides that the youthcouncil must include Local Boardmembers described in paragraph (A) or(B) of section 117(b)(2) with specialinterest or expertise in youth policy.Therefore, section 166 grantees who aremembers of the Local Board and have aninterest or expertise in youth issues maybe appointed to the youth council underthis provision. Additionally, WIAsection 117(h)(2) requires that youthcouncils contain representatives ofyouth service agencies and provides thatthe chairperson of the Local Board, incooperation with the CEO’s, mayappoint other ‘‘appropriate’’ individualsto the youth council. While weencourage Local Boards and CEO’s tocreate broadly representative youthcouncils, including representatives ofsection 166 grantees which operateyouth programs, we do not read the Actto authorize us to require that specificorganizations be represented on theYouth Council. This is another‘‘representation and implementationissue’’ which involves the operation ofWIA at the local level. We prefer toallow local people to resolve localissues on their own, in a mutuallysatisfactory manner.

Those section 166 grantees whichserve reservation areas will have toinclude a section on the provision of

supplemental youth services in theircomprehensive services plan, asrequired by §§ 668.420, 668.710, and668.720. While the section 166 youthprogram is separate from the WIA titleI youth program, and is not subject toany mandatory authority of the youthcouncil, we encourage section 166grantees to coordinate their provision ofsupplemental youth services with otherproviders of youth services in the localarea.

Following is a discussion of a varietyof other comments on the Interim FinalRule. The comments are organized bythe subparts of the Interim Finalregulations to which they pertain.

Subpart A—Purposes and PoliciesTechnical Corrections: The

regulations work group pointed out thatthe language in the second part of thedefinition of ‘‘underemployed’’ at§ 668.150 would seem to be limited toinstances where the individual isworking below his or her educationlevel, without regard to the attainmentor establishment of other work skills,knowledges, or abilities. We agree withthis observation and have modified thedefinition to include reference to ‘‘skillachievement’’. We have also made agrammatical modification to thequestion in § 668.140, and have addeda new paragraph (d) to § 668.140 toclarify that the Department’s regulationsimplementing the nondiscriminationprovisions in WIA section 188 (29 CFRpart 37) apply to INA programs andactivities.

Subpart B—Service Delivery SystemsApplicable to Section 166 Programs

Clarification of DesignationRequirements for Potential Pub. L. 102–477 Participants: Section 668.200(b)(3)of the Interim Final Rule provided thata new entity applying for a section 166grant must have a service area resultingin formula funding of at least $100,000,including any amounts received forsupplemental youth services, except inthe case where the entity is a tribesubmitting a plan for participationunder Public Law 102–477, the IndianEmployment, Training and RelatedServices Demonstration Act of 1992 (25U.S.C. 3401 et seq.). In those cases, thetotal resources in the ‘‘477 plan’’ mustadd up to at least $100,000 for the entityto be designated under section 166 ofWIA.

When the regulations were drafted,we did not anticipate that any extremelysmall entities (i.e., with servicepopulations under a hundred people)would submit ‘‘477 plans’’ and, as aresult, apply for WIA designation.However, during the first WIA



designation cycle, this possibilityoccurred. We have determined thatdesignating an entity which wouldreceive only a few hundred or a fewthousand dollars in total WIA fundswould not be cost effective, and wouldserve to unduly fragment already scarceprogram resources. In consultation withthe designation work group of theNative American Employment andTraining Council, we have revised thisrequirement by placing a minimumfunding threshold of $20,000 in WIAformula funding on entities applying forsection 166 designation for the purposeof ‘‘going 477’’ (this minimumcorresponds to the allotment of oursmallest current JTPA grantee). Weapplied this limit in the WIA section166 designation cycle for Program Years2000–2001. We have, however,provided for the possibility of anexception for those entities which areclose to the limit and which havedemonstrated the capability to operatean employment and training programsuccessfully under such relatedprograms as Native Employment Worksor the Indian set-aside under theWelfare-to-Work Program.

Accordingly, § 668.200(b)(3) is revisedto provide that the exception will applyto grantees wishing to participate in thedemonstration program if all resourcesto be consolidated total at least$100,000, with at least $20,000 derivedfrom section 166 funds as determinedby the most recent Census data. Therevised regulation also provides thatexceptions to this $20,000 limit may bemade for those entities which are closeto the limit and which havedemonstrated the capacity to administerFederal funds and operate a successfulemployment and training program.

Clarification of Requirements forDesignation

The issue of State-recognized tribes isa point of contention in ‘‘IndianCountry,’’ because of the inconsistentnature of the process of Staterecognition between different States.There are great differences betweenState-recognized tribes which exercisecertain quasi-governmental authorityand provide their members withservices, and those entities designatedas State-recognized for purely politicalor social/cultural purposes. Themajority of commenters favored theelimination of any priority for State-recognized tribes as such, reasoning thatthey could still qualify as Indian-controlled organizations.

Response: Section 166 does notinclude State-recognized tribes in itsdefinition of ‘‘Indian, Indian Tribe andTribal Organization.’’ We decided that

the inclusion of State-recognized tribesas an independent basis for qualifyingfor designation in § 668.200(d)(5) is notsupported by section 166(b) of the Act,which refers to section 4 of the IndianSelf-Determination and EducationAssistance Act (25 U.S.C. 450 et seq.) forthe definitions of Indians and Indiantribes. It also appears to be in conflictwith the underlying principles ofsection 166, as expressed in the IndianSelf-Determination and EducationAssistance Act. However, there is alsothe need to comply with the‘‘grandfathering’’ provision of Section166(d)(2)(B), which addresses thecontinued WIA eligibility of individualswho were eligible under JTPA. Weaddressed the grandfathering issue in aprovision of the recently-issued SGA fordesignation of section 166 grantees forProgram Years 2000–2001, which readsas follows: ‘‘It should be noted that,pursuant to WIA section 166(d)(2)(B),individuals who were eligible toparticipate under section 401 of JTPAon August 6, 1998, shall be eligible toparticipate under WIA. Organizationsserving such individuals shall beconsidered ‘Indian controlled’ for WIAsection 166 purposes.’’ We haverewritten § 668.200 to eliminate themention of State-recognized tribes asspecifically eligible for designationbased solely upon such status, but haveadapted the above-quoted language, asnew paragraph 668.200(e), to permitexisting State-recognized tribal granteesto continue to serve their members.These changes continue the eligibility ofindividuals who were eligible underJTPA as a result of being members ofState-recognized tribes, as well asestablishing the status of those State-recognized tribal grantees as ‘‘Indian-controlled organizations’’.

Clarification of Designation Priority

The regulations work group pointedout that the designation priorities in§ 668.210(a) do not specifically mentionsituations, which occur primarily inOklahoma, where grantees aredesignated to serve only their own tribalmembers in a given county or counties.

Response: We agree and have revisedthat paragraph to indicate that‘‘populations’’ (over which the granteehas jurisdiction) are also included inaddition to geographic areas.

Technical Correction to § 668.240

Section 668.240 describes the processfor applying for designation as an INAgrantee. We have added a newparagraph to this section specifying thatthe assurance contained in the WIAnondiscrimination regulations at 29 CFR

37.20 must be contained in theapplication for financial assistance.

Funding Formula

A comment on the funding formula,found at § 668.296, is discussed belowin subpart G, under the heading Cost ofLiving Factor.

Mandatory Quotas Based on Race andPopulation

In the implementation discussionsheld around the country, severalgrantees recommended that we requirethat States with significant NativeAmerican populations expend apercentage of their total State WIAbudgets on Native American clientswhich would correspond to theirpercentage of State population, and thatLocal Workforce Investment Boards notbe allowed to refer all Native Americanapplicants to the local section 166grantee for services.

Response: While we realize there is ashortage of resources in ‘‘IndianCountry,’’ there is no legal authority inWIA which would allow us to establishand enforce ‘‘service quotas’’ on anyState or Local Area. In addition, asdescribed in WIA section 188(a)(2), it isunlawful for recipients of WIA financialassistance to use race, color or nationalorigin, including tribal affilitation, todetermine which individuals willreceive services. We certainly agree thatthe section 166 program is intended toprovide additional services for NativeAmericans and is not to be used as asubstitute for Local Board services toeligible Native Americans or as anexcuse for not serving that population.The concept of One-Stop and coreservices is based on the provision ofuniversal service, without regard to raceor ethnicity. A fair and effective way toaddress these concerns, while ensuringthat these nondiscrimination provisionsare complied with, may be to describethe provision of other services, inaddition to WIA core services, in theMOU. The regulations at 29 CFR part 37provide specific requirements on theissue of nondiscrimination.

Subpart C—Services to Customers

Clarification of Allowable Activities

The regulations work group suggestedthat the Interim Final Rule, at§ 668.340(d)(8), appears to allow theattainment of a GED only in conjunctionwith other training services, and not asa stand-alone objective.

Response: To eliminate possibleconfusion or misinterpretation, we havemodified § 668.340(d)(8) to indicate thatthe listed services (including GEDattainment) may be provided alone or in



combination with any other training orintensive service(s).

Technical Change to § 668.350(e)We have inserted the term ‘‘WIA’’

before ‘‘funds’’ to more clearly indicatethat the requirement that funds be usedfor activities in addition to thoseotherwise available applies to WIAfunds.

Clarification of Grantees’ Role(s) in theOne-Stop System

The requirements for negotiation ofMOU’s have been a source of confusionto some grantees, especially theprovision in § 668.360 concerning the‘‘field office’’ requirement. Granteeshave asked for further definition of thisterm, and have asked about the status ofgrantees which have no ‘‘field offices’’as such, but whose service area includesall or part of several local workforceinvestment areas. Grantees also raisedquestions about the provision ofservices, the design of the One-Stopsystem, and the nature of the MOUwithin States with only one local area.

Response: We agree that this is anissue requiring clarification, and havechanged the regulatory language in§ 668.360. We have dropped the term‘‘field office’’ and rewritten § 668.360 toindicate that an INA grantee is arequired partner when the grantee‘‘provides substantial services,’’ eitherby having a permanent, year-roundpresence or by being present on aseasonal or part-time basis (e.g., one dayof the week or daily for four months ofthe year). The regulation has beenrevised to refer to 20 CFR 661.330(b)(2),to assure that in the cases where theINA grantee provides substantialservices in a local area that uses analternate entities which does notinclude a representative of the grantee,the INA grantee will have an ongoingrole in the workforce investmentsystem. The revised regulation alsoaddresses the situation in which there isa significant Native American presencein a local area in which the INA granteedoes not provide substantial services,but which is within the INA grantee’sservice area. Language has been addedencouraging the INA grantee toencourage eligible individuals to use theservices of the One-Stop. Issues of MOUnegotiation and/or representation willbe addressed on an individual basis.Here again, we hesitate to dictatespecific representation requirements forany given local area, preferring that allrequired partners reach mutuallysatisfactory arrangements whichimplement the inclusive spirit of theAct. We suggest that grantees, and otherpartners, refer to the discussion of MOU

issues in the preamble to part 662. Thesame MOU requirements apply to singlelocal area States as apply to Statescomposed of multiple local areas.

Status of Community ServiceEmployment

Commenters questioned the reason forelimination of Community ServiceEmployment (CSE) and lamented itsdemise, questioning what wouldbecome of CSE participants when thetransition to WIA occurred.

Response: WIA, at section 195(10),prohibits ‘‘public service employment,’’except as specifically authorized undertitle I of WIA. This differs from JTPAwhich prohibited public serviceemployment only in the adult and youthprograms. Although section 166 statesthat its purpose is to ‘‘promote theeconomic and social development ofIndian, Alaska Native, and NativeHawaiian communities * * *,’’ thisdoes not provide specific authorizationof Community Service Employment.Grantees who are concerned abouttransitioning current CSE participantsshould refer to 20 CFR 667.910 whichprovides that JTPA participants whotransition into WIA programs must beallowed to finish their JTPA activity, inaccordance with the terms of theirIndividual Employment Plan, even if itis not authorized under WIA.

Subpart D—Supplemental YouthServices

Flexibility in the Supplemental YouthServices Funding Formula

Grantees raised questions about thesupplemental youth services fundingformula, specifically about the formula’srelation to participant eligibility forprogram services. The grantees arguedthat, since services are to be limited to‘‘(economically) disadvantaged youth,’’the funding formula should be based onthe number of economicallydisadvantaged youth residing ‘‘on ornear’’ the reservation, rather than on thetotal number of youth, as is currentlythe case.

Response: This suggestion appearslogical, and we are looking into thepossibility of extracting (and the impactof implementing) such information fromthe 1990 Census file we use to calculatethe funding formulas for the section 401program. Section 668.440(a) has beenchanged to reflect the possibility ofaltering the supplemental youth servicesfunding formula at a future date.

Lower Level of Supplemental YouthServices Funding Under WIA

One commenter was concerned thatthe projected funding for the

supplemental youth services programwill be slightly less than what iscurrently available for the JTPA title II–B program, which will make itimpossible to operate a year-roundyouth effort (since the current allotmentis not sufficient to finance the tribe’sSummer Youth Program under JTPA).

Response: While we recognize thatreductions in available funding maylead to reductions in service levels, thematter of allocations is one of budgetand not regulations. Also, there is norequirement in the section 166 programthat grantees operate a year-round youtheffort, or that they continue to operatea summer youth component. Section668.450(a) provides that grantees mayoffer supplemental services to youththroughout the school year, during thesummer vacation, and/or during otherbreaks in the school year at the granteesdiscretion. The parameters of eachsupplemental youth services grantee’syouth program must be described in itsComprehensive Services Plan which isapplicable to each local area.

Expanded Availability of SupplementalYouth Services Funds

Several commenters noted thatsupplemental youth services funding isonly being made available to granteeswho serve reservations, and urged thatwe broaden the definition of ‘‘on ornear’’ to include urban/suburban/ruralareas within a specified distance of areservation, and make non-tribalgrantees serving these areas eligible toreceive supplemental youth servicesfunds and to provide youth services inthose areas.

Response: When this issue was raisedwith the regulations work group of theAdvisory Council, it was the generalconsensus that no changes be made tothe way INA grantees are currentlyprovided youth services funding. Themembers of the work group did not feelthat the ‘‘on or near’’ reference in theAct was intended to divert funds awayfrom reservations or from the tribes/grantees serving those reservations. Weagree with the regulations work group,and have made no change in the finalregulations.

Subpart E—Services to Communities

Technical Corrections

We have made a technical correctionto move a misplaced phrase in§ 668.500(b). In addition, we havemoved § 668.630(i) to § 668.350 as newparagraph (g), where a cross reference to20 CFR 667.266, about limitations onsectarian activities set forth in 29 CFR37.6(f), has been added.



Subpart G—Section 166 Planning/Funding Process

Clarification of Budget JustificationRequirements for Administrative Costs

Members of the Native AmericanEmployment and Training Councilsuggested that § 668.720(c) seems torequire that a detailed administrativebudget must be submitted as part of theComprehensive Services Plan. Thiscould present grantees with an extraplanning burden which had never beenrequired under JTPA and is not inkeeping with other recent planningdecisions which require that the granteejustify the need for administrative costsbased on actual costs.

Response: We agree that theregulation was drafted at an earlier time,when the entire issue of administrativecosts was viewed in a different light byall parties involved. Accordingly, wehave modified § 668.720(c) to removethe requirement that grantees submit adetailed budget of proposedadministrative costs and to indicate thatthe grantees need to be prepared tojustify the amount of proposedadministrative costs.

Cost of Living FactorA commenter recommended that we

build a cost-of-living factor into thefunding formula (which is described at§ 668.296) so that grantees serving areaswhich are more costly could receiveadditional funds to offset the high costof living (primarily in urban areas).

Response: While we sympathize withthose grantees trying to operateprograms in high cost areas, the Censusdata used in the formula and the currentregulatory funding formula(s) for adultand youth programs do not provide forsuch cost-of-living adjustments. We seeno fair way to balance the higher costof goods and services in an urban areaagainst the higher costs fortransportation and other servicesincurred by reservation and/or ruralgrantees serving areas which lack theinfrastructure of cities and suburbanareas. No change has been made in thefinal regulations.

Availability of Incentive Grants toSection 166 Grantees

Commenters questioned why‘‘incentive grants’’ are not being madeavailable to section 166 grantees whoexceed their planned performancelevels.

Response: The statutory language inWIA section 503, which authorizes theDepartment to provide incentive grants,only applies to States which exceedtheir State adjusted levels ofperformance. There are no statutory

provisions authorizing incentive grantsfor section 166 grantees, nor is therespecific authorization to build such afactor into the current fundingformula(s). At this time, we have notdetermined a fair way to account for themyriad of differences between ourgrantees in a way that ensures an equalopportunity for any type of performanceincentive. We note that WIA section166(c)(2)’s waiver of competition is oneform of recognizing successfulperformance.

Mandatory Cost Sharing Among Section166 Grantees

One commenter suggested that costsassociated with enrolled tribal membersbe charged back to their tribes, or thattribes be required to pay employmentand training costs for their tribalmembers participating in programsoperated by urban grantees.

Response: Although we have neveropposed individual grantees workingout funding reciprocity agreements on avoluntary basis, the service area conceptcurrently in place through thedesignation process mandates thatgrantees serve those eligible clientsresiding in their service areas, regardlessof tribal affiliation. While other entitieshave, from time to time suggested thatwe provide funds to tribes to serve theirown members only, regardless of wherethey may reside, we feel that to operatethe section 166 program in this mannerwould be chaotic and ultimatelyunworkable, and would not be in thebest interests of Native Americanemployment and training programsauthorized under the WorkforceInvestment Act. Moreover, as describedin WIA section 188(a)(2), it is unlawfulfor recipients of WIA financialassistance to use race, color or nationalorigin, including tribal affilitation, todetermine which individuals willreceive services.

Information To Be Contained in PlansWe have revised § 668.740(a)(1) to

clarify that plans must includeinformation specified in theseregulations as well as Departmentalplanning guidance.

Technical Correction To RemoveRequirements Applicable Only to PY1999

Finally, we have removed § 668.200(a)which refers to designation criteria forPY 1999. We have also removed from§§ 668.720(e) and 668.730(b) referencesto planning requirements applicableonly to PY 1999.

We received many other comments aspart of this process. However, theyinvolved such topics as reporting

requirements, including frequency andspecific data elements, section 166performance measures and standards,and the closeout of JTPA section 401grants. While important to the overallscope of program transition andimplementation, these issues are notcovered in these regulations. These andother programmatic details will behandled administratively throughDINAP Bulletins or other policyguidance, issued after consultation withthe grantee community.

Part 669—National Farmworker JobsProgram Under Section 167

New Name of the MSFW (WIA Sec. 167& JTPA Sec. 402) Training Program

On August 27, 1999, the Secretary’sMigrant and Seasonal FarmworkerAdvisory Committee voted to name thejob training portion of the workforceinvestment program for farmworkers,‘‘The National Farmworker JobsProgram (NFJP)’’. We have incorporatedthe name in the definitions section,§ 660.300, to establish the NFJP as thefarmworker training and assistanceprogram that is a required One-Stoppartner, and to distinguish the NFJPfrom the other workforce investmentgrants and activities funded under WIAsection 167, such as the farmworkerhousing assistance grants. We haveadopted the NFJP name in the portionsof the 20 CFR Part 669 regulations thatapply exclusively to the NFJP, and theNFJP name is used to identify theprogram in this preamble.

Introduction

The comments we received about theregulations governing the operation ofthe National Farmworker Jobs Programunder WIA section 167 primarily camefrom the current NFJP granteecommunity. The grantees submittedwritten comments during the formalcomment period. Additionally, weconsulted with the migrant and seasonalfarmworker grantee community duringETA’s Seasonal Farmworker ProgramNational Conference and through theSecretary’s Migrant and SeasonalFarmworker Program AdvisoryCommittee. The comments reflect asubstantial level of interest in how theregulations will impact the program asit implements under the WorkforceInvestment Act. The commenters seek tomake the WIA regulations’ impact ontheir ability to serve their farmworkercustomers under WIA as positive for thefarmworkers as possible.

During these consultations, the NFJPgrantees reported on their initialexperiences in seeking partnershipparticipation on Workforce Investment



Boards in a number of states and localareas. The conditions these NFJPgrantees encountered in a significantnumber of locations, as their state andlocal systems prepare for WIAimplementation, are not conducive totheir successful participation in thelocal One-Stop systems. As reported, thespecific approach being taken by therepresentatives from some State andLocal Boards fails to recognize theindependent standing of the NFJPprogram partner as a party with whichthe Local Board must negotiate aMemorandum of Understanding. Arequired objective of the negotiations isto develop the arrangements, includingcosts or cost sharing, for making theservices of the Local One-Stop Centeravailable to the farmworker communitythe grantee serves. We expect the termsfor participating in a local One-Stopservice delivery system to developrationally from the negotiations whenthe task is approached in good faith byboth parties.

The grantees reported that they mostoften encountered an adversenegotiating climate in those States andlocal workforce investment areas wherethe States have exercised their authorityunder the alternative entity provisionsof WIA sections 111(e) and 117(i) (20CFR 661.210 and 661.330, respectively)by approving existing boards to serve asthe State and/or Local WorkforceInvestment Boards under WIA. Thegrantees reported that some States andBoards exercise the alternative entityoption in a manner that seriouslyimpairs the NFJP grantee’s ability toparticipate as a One-Stop partner byfailing to provide an opportunity forgood faith negotiation over the terms ofthe MOU. Consequently, the necessaryarrangements for making the services ofthe local One-Stop Centers available tothe farmworker customers served by theNFJP program grantee may beinadequately developed.

Through a motion unanimouslypassed by the Migrant and SeasonalFarmworker Employment and TrainingAdvisory Committee, MSFW granteescommunicated their concerns in a letterto Secretary Alexis Herman, datedSeptember 27, 1999. In their letter, thegrantees made specificrecommendations for changes to theInterim Final Rule that may besummarized as follows: (1) To clarifythat the composition of State WorkforceInvestment Boards must includerepresentation from the requiredpartner; (2) where the State Board isestablished under the alternative entityauthority of WIA section 111(e), theStates be advised through policyguidance that representation of

farmworker and other subtitle Doperators is the ‘‘preferred response tothe spirit of the Act’’; and (3) that wherea Local Workforce Board is an approvedalternative entity, there must be a wayto ensure that an ongoing role is actuallyprovided to the required partners thatare not members of the alternativeentity, or provision for regulatory relieffrom the required partner obligationsshould be available for the nationalgrantees. These issues and othercomments are discussed below.

The NFJP and Workforce InvestmentSystem Governance

As discussed above, the rules relatingto the participation of NFJP grantees inthe state and local workforce investmentsystem generated many comments fromthe NFJP community. Below, we discussissues relating to alternative entities andrepresentation on State Boards andLocal Boards. Similar issues arediscussed in relation to the WIA section168 Indian and Native AmericanProgram in the preamble to part 668,and for the workforce investmentsystem in general in the preamble topart 661.

General Representational QuestionRegarding the NFJP and Appointmentsto State and Local Workforce InvestmentBoards

The answer to the representationalissue raised by the FarmworkerAdvisory Committee is found within thedesign of the One-Stop system and inthe requirement that it be operatedthrough the collaboration of therequired partners. In order for apartner’s participation to be viable, theregulations provide that the partnermust have representation in the One-Stop system, either through Local Boardrepresentation or, when the partner isnot represented on an alternative entity,through an on-going role in theworkforce investment system.

We are not able to change theregulations to permit One-stop partnerprograms to choose whom they wish torepresent them. Under WIA, theauthority to select State and local boardmembers lies with the Governor andlocal chief elected official, respectively.However, there are objective standardsto ensure that all parties have a voice inthe workforce investment systemthrough bona fide representation. Weexpect that Local Workforce InvestmentAreas will follow the regulations andthat States will ensure that all requiredpartners have appropriate and effectiverepresentation on Local Boards. Thefinal regulations attempt to facilitatethis process by providing local areaswith flexibility to find the right mix of

representatives on the Local Board,while ensuring that the Board is aneffective policy-making body byprotecting the rights of all participantsin the system and by stressing therequirement that members beindividuals with optimum policy-making authority. We believe that theparty who may most authoritativelyspeak for any partner program is anofficial of the partner in the State orlocal area or a representative acceptableto the partner. Consequently, foreffective governance, officialrepresentation of the partner program onthe State and Local WorkforceInvestment Boards will usually be bysuch a person.

As discussed in the preamble to 20CFR part 661, above, changes have beenmade to the regulations governing boardmembership to clarify the role of One-stop partner representatives. Forexample, when there is more than onepartner program grantee in a local area,20 CFR 661.317 permits theappointment of one member torepresent the group of grantees. Thissection also authorizes the chief electedofficial to solicit nominations from One-Stop partner program entities tofacilitate the selection of suchrepresentatives. Of course, the chiefelected official can opt to appoint morethan one member to represent thisprogram, if he or she so chooses and theselection criteria permit it. Also, asdiscussed below, we have added newregulations defining the terms ‘‘optimalpolicy-making authority’’ and ‘‘expertiserelating to [a] program, service oractivity.’’

State Board Representation for RequiredNational Program Partners

The Farmworker Advisory Committeecommenters indicated that the InterimFinal Rule is unclear as to whetherrepresentation on the State Boards ismandatory for all required partners suchas the national program partners. As aresult, the commenters reported thatmany States are claiming to representthe NFJP on the State’s WorkforceInvestment Board through a non-partnersurrogate, possibly a State agencyrepresentative having familiarity withfarmworker or related agriculturalissues, such as the State MonitorAdvocate or a representative from theState’s Farm Bureau.

Response: WIA section111(b)(1)(C)(vi)(II) requiresrepresentation of the Title I partner onthe State Board by its provision for ‘‘thelead State agency officials withresponsibility for the programs’’ or ‘‘arepresentative in the State withexpertise relating to such [section



121(b)] program.’’ WIA section 111(b)(2)requires that Board members whorepresent organizations, agencies orother entities be individuals with‘‘optimum policy-making authority’’within the program they represent. Webelieve WIA section 111(b)(1)(C)(vi)(II)is clear that a State agency official mayonly be appointed to represent thoseOne-stop partner programs over whichthe official has ‘‘responsibility.’’ Wherethere is no such state agency official, anindividual with expertise relating to theOne-stop partner program must beappointed to represent the program. Wehave revised the regulations in part 661to clarify this. Under new 20 CFR661.203(b), the representation of a One-Stop partner program may be fulfilledby an official from the program partner,such as the NFJP grantee, or theGovernor may appoint a representativein the State having ‘‘documentedexpertise relating to’’ the requiredpartner program in the State. Forpurposes of the NFJP, we believe thatdocumented expertise in the NFJP isshown by a minimum of two yearscombined managerial level experiencein the operation of the NFJP or with anNFJP grantee association, and suggestthat Governors adopt this standardwhen selecting representatives for theNFJP program.

Without the clarification thatrepresentation must be specific to therequired partner program, appointmentsmade to represent the interests of arequired partner could include a personwho may have no vested interest torepresent the partner. This condition,which leaves the required nationalpartners vulnerable to the consequencesof unqualified representation, is whatthe NFJP grantees reported has beenoccurring initially in some States. Anagency official or other individualrepresenting a One-stop partner programmust be an official with optimumpolicy-making authority in theorganization he or she represents. Asdefined in 20 CFR 661.205(a), arepresentative with ‘‘optimum policymaking authority’’ is an individual whocan reasonably be expected to speakaffirmatively on behalf of the entity heor she represents and to commit thatentity to a chosen course of action.

Local Boards Authorized by GovernorsUnder the Alternative Entity Provisions

Commenters reported that thenational programs, possibly withoutexception, are not included on a LocalWorkforce Investment Board where theLocal Board is an alternative entityapproved by the Governor under WIAsection 117(i) (and under 20 CFR661.330). This is to be expected because

the composition of Local Boardsapproved under the alternative entityprovision is derived from arrangementsdeveloped under JTPA, and the JTPAdid not provide for the participation ofthe national programs in local workforcesystems as now required by WIA.However, where the membership of theapproved alternative entity does notprovide for the representation requiredby WIA section 117(b), the Interim FinalRule at § 661.330(b)(2) required LocalBoards to ‘‘ensure an ongoing role forany such group in the local workforceinvestment system’’ which is notrepresented on the alternative entityLocal Board.

The commenters found that the use ofthe word ‘‘group’’ in the Interim FinalRule, to be too generalized to make aclear requirement that the localworkforce investment plan mustprovide an ongoing role for eachunrepresented partner categorywhenever the membership requirementof WIA section 117(b)(2) is not matchedby the incumbent membership of thealternative entity Local Board. At theNational Conference, the commentersdescribed instances of alternative entityboards refusing to negotiate MOU’s withtheir NFJP program representatives.They pointed out that in the instance ofa required partner, a Local Board cannothave established a working relationshipor demonstrated that it has provided foran ongoing role for the unrepresentedpartner until it has attempted good faithnegotiations of an MOU with thatpartner.

Response: To clarify that the requiredpartners must be included among ‘‘anysuch group,’’ we have amended thelocal governance provision at 20 CFR661.330(b)(2), by replacing that phrasewith the phrase ‘‘the unrepresentedmembership group,’’ and by insertingthe phrase ‘‘including all the partners’’following ‘‘each of the categories ofrequired Local Board membership underWIA sec. 117(b).’’ We have added a newparagraph (b)(3) to 20 CFR 661.330which provides that the ongoing rolerequirement may be met by providingfor ongoing consultations with anunrepresented One-stop partnerprogram, such as the NFJP granteeoperating in the State of local area. Italso provides that, as part of its‘‘ongoing role’’ responsibility, thealternative entity must undertake goodfaith negotiations with eachunrepresented partner on the terms ofits Memorandum of Understanding withthe unrepresented partner. We haveadded a corollary requirement to theNFJP regulations by adding a new thirdsentence to § 669.220(a) requiring theNFJP grantee to negotiate with the Local

Board on the terms of its ongoing rolein the workforce investment system.

Ensuring Fair Treatment WhenNegotiations Between a Partner and anAlternative Entity Board Fail

In connection with the reports fromNFJP grantees of the instances wherethey had been approached by State andLocal Boards with non-negotiable termsor they were not offered an ongoing role,the grantee commenters expressed theirconcern over how such practices mightinfluence the outcome of the next NFJPcompetition in the State. Thecommenters explained that where theState does not foster an environmentsupporting good faith negotiationsbetween its State and Local Boards andthe non-governmental NFJP grantee, theconsequent nonparticipation by theNFJP grantee in the State’s localworkforce investment systems could beviewed unfavorably. The commenterswere concerned that such a conditioncould result in an unfair rating of theincumbent non-State agency grantee.

Response: To promote competitionsthat are perceived as fair and merit-based in their treatment of all theeligible applicants, we have revised§ 669.200 by adding to the eligibleapplicant criteria in paragraph (a), thecapacity to work effectively as a One-Stop system partner. The manner bywhich applicants may demonstrate thiscapacity is explained in a newparagraph (c). Where an incumbentgrantee cannot demonstrate its capacityto work as a One-Stop partner, it will befound to lack the capacity to work as aOne-Stop partner under § 669.200(a)(4)unless the policies or actions of a LocalBoard that is established under thealternative entity provisions of WIAsection 117(i) precluded suchparticipation or contributed to thefailure to reach agreement on an MOU.Wherever a Local Board is an alternativeentity and fails to agree on terms for itsMOU with the incumbent NFJP grantee,despite good faith negotiations on thepart of the grantee, new paragraph (d)requires the Grant Officer to considerthe impact of the policies and actions ofthe alternative entity board on theincumbent grantee’s ability toparticipate in the One-Stop system anddetermine whether the policies oractions contributed to the failedparticipation of the incumbent NFJPgrantee. Where the Grant Officer findsthe local policy actions of an alternativeentity Board precluded or failed topromote the participation of theincumbent NFJP grantee through anMOU, and the eligible applicant is aState-controlled entity, or is an entityrepresented on the alternative entity



Board within the State, the Grant Officermust consider this fact when weighingthe capacity of the competitors. Underthis provision, the Grant Officer has thediscretion to determine that theincumbent has the capacity to workeffectively as a One-Stop partner. (Theprovisions of § 669.200 (d)(1) apply onlywhen the incumbent grantee does nothave voting status in the alternativeentity Local Board.)

The Judge Richey Court Order and theNFJP

Several non-NFJP commenters raiseda question about the relationshipbetween the Judge Richey Court Orderand the NFJP for serving migrant andseasonal farmworkers under WIAsection 167. The comments basicallyinquire whether the NFJP is the programfor farmworkers under WIA, and, assuch, whether it brings to an end thesystem of monitor advocates created bythe Order.

Response: These commenters seem tobe unaware of the fact that the NFJP hasbeen authorized continuously since itscreation under the EconomicOpportunity Act of 1964, and mostrecently under section 402 of JTPA. TheNFJP supplements the workforceinvestment activities of the States withservices that respond to the uniqueneeds of farmworkers and their families.The NFJP is not a substitute for theother WIA services that must be madeavailable to the farmworker job seekersin the State.

The States are required to make theservices of the One-Stop systems in theState available to all job seekers in anequitable fashion. The services availablefrom the Adult and Dislocated Workersprogram, from the Job Service, and fromall other DOL-funded WorkforceInvestment System partners in the State,must be available to farmworkers in anequitable fashion, appropriate to theirneeds as job seekers as well as to theirneeds as farmworkers. Judge Richey’sdecision in the case brought against theEmployment Service required the entiresystem to serve farmworkers equitably.That requirement has not changedunder WIA.

Subpart A—Purpose, Definitions, andFederal Administration

Technical Corrections to Definitions

The commenters noted severaltypographical errors and suggestedclarifications in the definitions for thefarmworker program in § 669.110 of theInterim Final Rule.

Response: The word ‘‘be’’ is missingfrom the definition of ‘‘workexperience’’ in the Interim Final Rule

and is added in the Final Rule. Thedefinition of ‘‘farmwork’’ is corrected byremoving the reference to the allocationformula. To correct for an omission, thedefinition of ‘‘allowances’’ is amendedto permit receipt of allowance paymentsto participants enrolled in intensiveservices as well as in training services.

Add Definition of ‘‘Related Assistance’’Questions about the characterization

of emergency assistance as a form ofrelated assistance in § 669.360 led somecommenters to ask about the nature ofrelated assistance and what otherservices it includes.

Response: We have added a definitionof ‘‘related assistance’’ in § 669.110. Wediscuss related assistance further in thediscussion below of ‘‘Classification ofEmergency Assistance and Other NamedActivities as Related Assistance.’’

EligibilityThere were a variety of comments

asking that we define certain termsrelated to participant eligibility, inparticular that we specify whichdependents of a farmworker are eligiblefor NFJP assistance and that we add anadjustment for family-size to thedefinition of ‘‘disadvantaged’’ foreligibility purposes. Other commentsraised a variety of issues that include:clarification of the floating 12 montheligibility determination period;allowing for exceptions to the eligibilityperiod for formerly institutionalized andhospitalized applicants; identifying thequalifying farmwork occupations anddefining the farmwork thresholds—expressed in terms of income fromfarmwork and time employed infarmwork—that must be met by anapplicant to qualify as a farmworkerwho is eligible for NFJP services.

Response: While most requests forclarification of eligibility provisions willbe addressed in the policy guidance onparticipant eligibility to be provided bythe Division of Seasonal FarmworkerPrograms (DSFP), we have revised thedefinitions section in response to thesecomments. We have added a definitionof ‘‘dependent’’ to the Final Rule tospecify the family member relationshipswithin the family of an eligiblefarmworker who qualify for receipt ofassistance from the NFJP. Because ofcomments suggesting that the definitionof ‘‘disadvantaged’’ needed to beclarified to consider family size whenmaking eligibility determinations, wehave revised the definition of‘‘disadvantaged’’ by adding ‘‘adjustedfor family size’’ to be clear that therequirement to be economicallydisadvantaged, as determined under thepoverty line or the Lower Living

Standard Income Level, must takefamily size into account.

The comments about the clarificationof the floating 12 month eligibilitydetermination period, formerlyinstitutionalized and hospitalizedapplicants, identifying the qualifyingfarmwork occupations and defining thefarmwork thresholds topics will beaddressed in policy guidance onparticipant eligibility. Grantees shouldrefer to WIA nondiscriminationregulations, at 29 CFR 37.8, for guidanceon whether an extension of theeligibility period for formerlyinstitutionalized and hospitalizedparticipants may be a form of reasonableaccomodation.

The commenters raised a relatedconcern that allowance be made forsituations where a farmworker may bedisqualified by the income of an abusivespouse and the family unit maytechnically remain in place. Thecommenters prefer that there be theflexibility available to accommodatesuch situations where appropriate.

Response: We have revised thedefinition of ‘‘disadvantaged’’ torecognize this concern by permittingconsideration of circumstances where,due to known instability of the familyunit, the inclusion of income fromcertain members would beinappropriate or unjust. We will providepolicy guidance in consultation with thegrantee partners to provide clarificationfor determining what is appropriate.

Additional Technical Corrections

We have removed the definition of‘‘Department’’ from § 669.110 since itappears in 20 CFR 660.300. In addition,we have added a new paragraph (e) to§ 669.170 clarifying that theDepartment’s regulations implementingthe nondiscrimination provisions inWIA section 188 (29 CFR part 37) applyto NFJP grants.

Subpart B—MSFW Program’s ServiceDelivery System

Clarification of the Areas of a StateWhere the NFJP Program Operates

Commenters reported that there wasconfusion between the NFJP granteesand the States and Local Boards over theareas within the States where the NFJPgrantee is a mandatory partner in thelocal One-Stop system. The granteesasked that the regulations be amendedto clarify that the NFJP is a One-Stoppartner in those local workforceinvestment areas where the NFJPoperates by serving NFJP customers, notnecessarily where there is ‘‘field office’’presence, as provided in § 669.220(a) ofthe Interim Final Rule.



Response: We have modified§ 669.220(a) to clarify that the NFJPgrantee is a required One-Stop partnerfor the local workforce investment areaswhere it operates its NFJP program.

Subpart C—The National FarmworkerJobs Program Customers and AvailableProgram Services

Classification of Emergency Assistanceand Other Named Activities as RelatedAssistance

Commenters questioned theconsistency of classifying emergencyassistance as a form of related assistanceand of classifying certain non-occupational training activities astraining services. Specifically, thecommenters questioned theclassification of ‘‘workplace safety’’training and ‘‘farmworker pesticidetraining’’ as training services in§ 669.410(a)(2) of the Interim Final Rule.The commenters suggested that thedesignation of emergency assistance asa form of related assistance, withoutfurther clarifying the nature of relatedassistance, also contributed to theconfusing organization of the serviceclassifications.

Response: Pesticide safety instructionfor farmworkers means educationalinstruction on health and safetyinformation about agriculturalpesticides. To protect their health,farmworkers need to have a generalunderstanding of this information and afull appreciation of the seriousness ofthese hazzards when approvedprocedures are compromised ordisregarded. The instruction typicallyincludes information on the hazzardsassociated with pesticide exposure, thephysical symptoms of toxic exposures,use of protective equipment and theimportance of adhering to themanufacturer’s instructions on whenfields may be entered followingapplication. These activities areconsidered supportive services underJTPA and are often provided underJTPA in a ‘‘non-training related’’ contextthat advance the farmworker’s welfareas a farmworker. These types offarmworker ‘‘training’’ activities arevery short term instructional services.They are not occupational skillstraining. Although they may beprovided to participants enrolled inintensive services or training services,these activities are principally designedto assist farmworkers who arecontinuing to be employed in farmwork.We agree with the commenters that theclassification of these non-skills-trainingactivities as training services and theclassification of emergency assistance as

the only form of ‘‘related assistance’’ isconfusing.

To resolve the confusingclassifications, we have decided tocombine the short-term, non-occupational skills training activitieswith supportive services such asemergency assistance. This will form aclassification of congruous services thathistorically have been provided toMSFW’s and that are uniquely requiredby them. To accomplish this, we haveamended § 669.310 to create a fourthbasic service component of the NFJPservice delivery strategy, called ‘‘relatedassistance services.’’ Related assistanceconsists of short-term forms of directassistance to eligible farmworkers andtheir family members. The relatedassistance services are ones thatstabilize farmworkers’ agriculturalemployment. The activities includesuch services as emergency assistance,English language instruction, shortduration basic education, workplacesafety training, farmworker pesticidesafety instruction, and farmworkerhousing development assistance. Theservices under related assistanceencompass all the activities formerlyclassified under JTPA as ‘‘services-only.’’ Related assistance activities alsoinclude the non training-related‘‘enhancement-only’’ services that wererecognized under JTPA. These forms ofassistance predominantly assistfarmworkers to maintain their currentlifestyle within the agriculturalcommunity by supporting them in theirendeavors to remain employed infarmwork, thereby contributingcollaterally to the economicstabilization of the agriculturalcommunity. Related assistance servicesalso may be used to supportfarmworkers who have enrolled ineither intensive or training services.

To establish the ‘‘related assistanceservices’’ category, we made a numberof changes. We added a definition of‘‘related assistance,’’ as described above,in § 669.110. Related assistance servicesare identified in § 669.310 as one of thefour basic components of the NFJPservice delivery strategy. A new§ 669.430 is added to classify theactivities that are included in relatedassistance services as described above.The description of training services in§ 669.410 has been revised to reflect thattraining services are activities focusingon occupational training, includingbasic education activity. A new§ 669.440 provides that relatedassistance services may be provided atany time there is a need identified forany eligible farmworker or familymember. This includes farmworkeryouth enrolled in the MSFW Youth

program. Accordingly, we added aclause to § 669.680 clarifying that therelated assistance services availableunder § 669.430 are authorized underthe MSFW Youth program. The need forrelated assistance may be documentedby the grantee or in a statement by thefarmworker that is acceptable to thegrantee.

We also added a definition for‘‘farmworker housing developmentassistance’’ as requested by commentsmade at the National Conference.Finally, a technical correction is madeby adding the word ‘‘grantee’’ to§ 669.360(b) where it was omitted fromthe Interim Final Rule.

Work Experience Classification

We received a number of commentsabout the treatment of work experiencein the Interim Final Rule. Thecomments addressed two issues. Oneissue is the authorization under§ 669.370(b)(3)(i) to developarrangements with private for-profitbusinesses to host work experienceactivities. The commenters wereconcerned that this will lead to abuse ofprogram resources by providing favoredbusinesses with free, albeit unskilled,WIA-funded laborers. Commenters werealso concerned that the authorization forunpaid work experience contained inthe definition could lead to abuses.

Response: Unlike ETA’s relationshipwith the States, the NFJP grantees arethe program operators in most instances.After considering the commenters’concerns, we agree that a closer federal-level oversight of work experience isappropriate to ensure the farmworkerprogram participants are adequatelyprotected where the activity will beunpaid or will be hosted by for-profitentities.

We have changed § 669.370(b)(3)(i) toauthorize NFJP work experience in thefor-profit sector only when there is asystem described in the approved grantplan for the use of for-profit businessesto host the structured learningexperience for NFJP participants.Similarly, to reconcile the authorizationfor unpaid work experience to therequirement in § 669.370(b)(3)(ii), whichestablishes a minimum compensationrate for paid work experience, we haverevised § 669.370(b)(3)(ii) to require thatthe grantee’s unpaid work experienceactivity be described in the approvedgrant plan. To be acceptable, the planmust show how the work experienceparticipation at a for-profit host or in anunpaid activity will provide tangiblebenefits to the work experienceparticipant. The plan must show thatsuch benefits will be commensurate



with the participant’s contributions tothe hosting agency.

We also received comments about theclassification of work experience as anintensive service under § 669.370. Anumber of commenters urged that workexperience be considered a trainingservice. Some commenters explainedthat work experience is effectively usedto ‘‘train’’ farmworker participants onthe different working conditions of non-agricultural work environments, sincethe participants have developed thebasic workplace-values from theirfarmwork experiences.

Response: In our view, workexperience primarily functions as aworkplace-values activity, whiletraining activities are about theacquisition of specific occupational orjob skills. Work experience provides anopportunity for new entrants in theworkforce to acquire, through closesupervision, an appreciation ofworkplace norms that may include self-discipline, relating to others, attendanceand accountability, understandingcompensation and learning toappreciate and meet employers’reasonable expectations. The concept ofintensive services in WIA is more thansufficiently broad to encompass the fullrange of activities traditionallyundertaken as work experience. Theclassification of work experience as aWIA intensive service does not changethe nature of work experience as it wasauthorized and operated under thepredecessor laws: the Job TrainingPartnership Act, the ComprehensiveEmployment and Training Act and theEconomic Opportunity Act. As apractical matter, the grantees retain thesame degree of flexibility in designingservice strategies for meeting the needsof their customers, regardless ofperceived differences caused by theclassification nomenclature used underWIA. The adult program under§ 663.200(b) also classifies workexperience as an intensive service.

WIA section 134(d)(4)(D) doesrecognize ‘‘job readiness training’’ as atraining service. Job readiness trainingprovides, through classroom lecture androle play, the development of the sameset of skills and understanding to beacquired through work experience. It isgenerally offered as pre-vocationalworld-of-work skills that may includeshowing up on time, work placeattitudes and behaviors, and the like.Job readiness training usually does notinclude an associated work component,but it may.

For these reasons, we have made nochange to the Final Rule about theclassification of work experience as anintensive service.

Subpart D—PerformanceAccountability, Planning and WaiverProvision

Administrative Costs Limitation

The issue on which we received thelargest number of comments during theformal comment period is theadministrative costs limitation. TheInterim Final Rule, at 20 CFR667.210(b), provides that theadministrative costs for the NFJP ‘‘willbe identified in the grant or contractaward document.’’ In the guidance(Farmworker Bulletin No. 99–04) tograntees for preparation of their 1999Program Year plans, we established anadministrative cost limitation policy forthose grantees implementing WIA forthe 1999 Program Year. The policylimited the amount budgeted foradministration to 20 percent, with costsover 15 percent requiring justificationsatisfactory to the Grant Officer. It wasanticipated that, after WIA transition,the rates could be expected to fall. Thegrantees have traditionally operatedwithin a 20 percent limitation foradministrative costs, without having tojustify the administrative cost rates tothe Department.

The grantees’ comments onadministrative costs limitations werebased on the historical context of thisstated policy. They expressed concernthat a 10–15% administrative costslimitation was unjust because of thestate-wide scope of most NFJPoperations and the continuing need toparticipate in the business of the StateBoard and to serve on and negotiateMOU’s with numerous Local Boards.

Response: In order to provideclarification on this issue, we are addinga new section, § 669.555 to the FinalRule stating that limits onadministrative costs for NFJP grants willbe negotiated with the grantee andidentified in the grant award document.In addition, 20 CFR 667.210 (b), whichprovides that the administrative costslimitation for Subtitle D programs (INAand NFJP) will be identified in the grantaward document, is unchanged.

Part 670—Job Corps

Introduction

This part provides regulations for theJob Corps program, authorized in title I,subtitle C of WIA. The regulationsaddress the scope and purpose of theJob Corps program and providerequirements relating to selection ofsites for Job Corps centers; selection andfunding of service providers; screening,selection and assignment of eligibleyouth to Job Corps centers; operation ofJob Corps centers; and required services

for Job Corps students. This part alsoprovides regulations covering new WIArequirements such as the establishmentof a business and community liaison,and an industry council for each JobCorps center, and the focus onaccountability, including specificperformance measures for Job Corpscenters and service providers. Ourintent in these regulations is toincorporate the requirements of title I,subtitle C of the Act, and to describe theprograms and services which must beavailable for Job Corps students, as wellas the requirements dictated by theunique residential environment of a JobCorps center (such as provision ofmeals, transportation, recreationalactivities and related services).

Subpart A—Scope and Purpose

Purpose

Subpart A describes the purpose ofthe program and provides definitions.Section 670.100 explains that referencesin this part referring to guidelines orprocedures issued by the Secretarymean that the Job Corps Director willissue such guidelines. Section 670.130specifies that the Job Corps Director hasbeen delegated authority to carry out theSecretary’s responsibilities under title I,subtitle C of the Act for the operation ofthe Job Corps program. As section670.100 explains, procedures guidingday-to-day operations are provided in aPolicy and Requirements Handbook(PRH). The PRH includes minimumprogram requirements and expectedoutcomes for specific programcomponents, such as education andtraining, student support, andadministration. In addition, generalguidance and best practices areprovided in a number of program areasin Job Corps Technical AssistanceGuides issued by the Job Corps Director.

Partnership

The regulatory provision on programpurpose (§ 670.110) incorporates theAct’s intent that Job Corps will operateas a national, residential program inpartnership with States and localcommunities. This partneringrelationship is carried throughoutvarious sections of part 670, such as inrequirements for Job Corps centers andservice providers to serve on local youthcouncils, to operate as a One-Stoppartner, and to work with employers.

During the development of theInterim Final Rule, several parties notedthat the regulations in this subpartprovide that Job Corps is a nationalprogram which operates in partnershipwith States, communities, Local Boards,youth councils, One-Stop centers and



partners, and other youth programs.They argued that the language relatingto partnership with One-Stops was notstrong enough in other regulatoryprovisions governing services (such asoutreach/admissions and placement).They believed that the regulationsshould clearly state that services wouldbe provided by One-Stop centers orpartners to the extent practicable. Ourintent in using language such as ‘‘to theextent practicable’’ or ‘‘to the fullestextent possible’’ is not to limit ordiscourage the development of linkagesbetween Job Corps and One-Stops, butto recognize (1) the language in section145(a)(3) of the Act which requires theSecretary to conduct outreach andscreening activities ‘‘to the extentpracticable’’ through arrangements withapplicable One-Stop centers,community action agencies, businessorganizations, labor organizations, andentities that have contact with youth; (2)the requirements in section 147 of theAct for selection of Job Corps centeroperators and other service providers(such as outreach/admissions,placement, and provision of continuedservices ) on a competitive basis inaccordance with Federal procurementlaw and regulations; and (3) thelanguage in sections 148(d) and 149(b)of the Act which requires the Secretaryto give priority to ‘‘One-Stop partners’’in selecting a provider for continuedservices for graduates and to ‘‘utilizeOne-Stop delivery systems to the fullestextent possible’’ for the placement ofgraduates into jobs. The use of thesephrases should not be interpreted as alimitation, but as a statement of intentto enter into partnerships in allsituations where it is feasible to do so.

Subpart B—Site Selection andProtection and Maintenance of Facilities

Subpart B describes how sites for JobCorps centers are selected, the handlingof capital improvements and newconstruction on Job Corps centers, andresponsibilities for facility protectionand maintenance. The requirements inthis subpart are not significantlydifferent from the correspondingrequirements in the JTPA Job Corpsregulations.

Subpart C—Funding and Selection ofService Providers

Subpart C describes entities which areeligible to receive funds to operate JobCorps centers and to provideoperational support services. It alsodescribes how contract center operatorsand operational support servicecontractors are selected, emphasizingthe requirements for competitivecontract awards. Section 670.300

specifically describes the kinds ofentities that are eligible to receive fundsto operate centers and provide trainingand operational support services asspecified in sections 147(a) and (d),145(a)(3) and 149(b) of the Act.

One commenter suggested that§ 670.300 be revised to expand the listof entities eligible to receive funds tooperate centers and provide training andoperational support services by adding‘‘including service or conservationcorps’’ to paragraphs (a)(1) and (a)(2) ofthat section.

Response: We have not revised thissection because these entities were notspecifically listed in the Act and theexisting regulatory language does notpreclude service or conservation corpsfrom responding to requests forproposals (RFP’s) for operation of JobCorps centers or provision of trainingand support services.

New requirements, includingconsultation with the appropriateGovernor, center industry council, andLocal Board in development of requestsfor proposals for center operators, areincluded in § 670.310(a). In addition,§ 670.310(c), restates the criteria,specified in WIA section 147(a)(2)(B),that must be included in center requestsfor proposals. These criteria include anassessment of providers’ pastperformance, their ability to coordinateJob Corps center activities with Stateand local activities (including One-Stopcenters), and their ability to providevocational training that reflectsemployment opportunities in areaswhere students will seek jobs. Severalcommenters recommended adding afifth criterion category to § 670.310(c)that would require that criteria forselection of center operators include thedegree to which the entity wouldprovide access to non-traditional jobsand career paths for women and girls.

Response: Each Job Corps center mustoffer training in occupational areaswhich will enable all students—maleand female—to get jobs in their homecommunities after completing theprogram. In selecting their occupationaltraining, students go through anoccupational exploration programwhich provides exposure to all types oftraining offered by the center as well asinformation on training requirements,qualifications for job entry and averagewages for each occupational area.Existing regulatory language andpolicies regarding student servicesrequire that young women be providedaccess to occupational training,including training in non-traditionaloccupations. Accordingly, we have notrevised § 670.310.

Subpart D—Recruitment, Eligibility,Screening, Selection and Assignment,and Enrollment

Subpart D describes who is eligiblefor Job Corps under WIA and providesadditional factors which must beconsidered in selecting an eligibleapplicant for enrollment. This subpartalso discusses who will conductoutreach and admissions activities forthe Job Corps, and the responsibilities ofthose organizations. Section 670.450(a)describes the new requirements ofsection 145(c) of WIA for an assignmentplan for Job Corps centers. Assignmentplans will be developed and used toestablish a target for each Job Corpscenter for the percentage of studentsenrolled who will come from the Stateor Department of Labor region in whichthe center is located, and the regionssurrounding the center. In addition,§ 670.450(b) and (c) addresses therequirement of section 145(d) of the Actwhich requires that students be assignedto the center closest to their homes, withconsideration given to the special needsof applicants or their parents orguardians, as listed in the regulation,when making assignments. Section670.490 provides authorization forextensions of enrollment of students forup to one year in special cases, such aswhen additional time is required for astudent to complete an advancedprogram or to reasonably accommodatea student’s disability.

Several commenters supported theregulatory exclusion in § 670.400 of anupper age limit for an otherwise JobCorps eligible individual with adisability. Several other commentersnoted that parenting and child careresponsibility in the Job Corps programare mentioned in §§ 670.400 (eligibility),670.410(c) (factors for selection ofapplicants for enrollment), 670.460(nonresidential enrollment), and670.550 (center responsibility to assiststudents with child care needs), andsuggested that the regulations beclarified to require contractors toprovide on-site or nearby child care forstudents.

Response: WIA section 148(e) requiresthat ‘‘The Secretary shall, to the extentpracticable, provide child care at or nearJob Corps centers, for individuals whorequire child care for their children inorder to participate in Job Corps.’’ Inresponse to Congressional reportsaccompanying recent appropriations,some Job Corps centers now have on-site child care programs operated byother Federally-funded initiatives suchas Head Start. However, provision ofchild care at or near all Job Corpscenters is not always feasible due to



space, center size and other factors suchas their remote or rural location. WhereJob Corps centers do not have on-sitechild care, Job Corps admissionscounselors and center staff must workwith students to assist them in makingoff-center arrangements to make suretheir children are properly cared forduring the time they are enrolled in theprogram. Accordingly, these sectionshave not been revised.

Subpart E—Program Activities andCenter Operations

Program Activities

Subpart E describes the services andtypes of training each Job Corps centermust provide, as well as centerresponsibilities in the administration ofwork-based learning. This subpart alsodescribes the residential supportservices Job Corps centers must provide,and centers’ responsibility for studentaccountability. Under § 670.520,required residential support servicesinclude providing a safe, secureenvironment, an ongoing counselingprogram, food service, access to medicalcare, recreation, leadership programs forstudents and a student welfareassociation. In addition, centers mustaccount for the whereabouts,participation, and status of studentswhile they are enrolled in Job Corps.

Section 670.555 discusses religiousrights of students. Based on commentsreceived, § 670.555 has been revised toclarify that students may file acomplaint under the procedures setforth in 29 CFR part 37 if they believetheir religious rights have been violated.

Behavior Management and ZeroTolerance for Violence and Drugs

Subpart E establishes requirements forJob Corps centers to have studentbehavior management systems. Section670.540 describes Job Corps’ zerotolerance policy for violence, drugs, andunauthorized goods. The regulatorylanguage in this section continuescurrent requirements for automaticdismissal of students who commitspecific offenses (the one strike andyou’re out policy) specified in thePolicy and Requirements Handbook(PRH) in Job Corps’ zero tolerancepolicy. The Secretary will issueprocedures which continue thispractice. Section 670.540(b) alsoaddresses the requirements of section145(a)(2) of the Act for drug testing ofall students. Section 670.545 of thissubpart also contains requirements toensure that students are provided dueprocess in disciplinary actions. Thisprocess includes center fact-finding andbehavior review boards, notification of

potential penalties and appealprocedures, including going to aregional appeal board.

Experimental, Research, andDemonstration Projects

Subpart E section 670.560 alsoaddresses the authorization, provided insection 156 of the Act, for experimental,research and demonstration projectsrelated to the Job Corps program.

Subpart F—Student Support

Subpart F includes authorization ofleave for students from center activities,and provisions of cash allowances,bonuses and clothing for students. Inaddition to being eligible to receivetransportation, students are eligible forother benefits, including basic livingallowances to cover personal expenses,such as toiletries, snacks, etc., inaccordance with guidance issued by theSecretary. The allowance and bonussystem is structured to provideincentives for specific accomplishmentsof students, such as vocationalcompletion. Students are also providedwith a modest clothing allowance toenable them to obtain clothes that areappropriate for class and for theworkplace.

Subpart G—Placement and ContinuedServices

Placement Services

Subpart G discusses placementservices for graduates of the Job Corpsprogram in accordance with section 149of the Act. The regulations focus ongraduates, which is a significant changefrom previous Job Corps policy andpractice, since placement services havetraditionally been provided for allstudents who leave Job Corps, no matterhow long they were enrolled or howmuch of the program they completed.The regulatory language in subpart G issubstantially different from the languagein the JTPA Job Corps regulations inorder to reflect this new emphasis onproviders of services to graduates. Thissubpart also discusses who providesplacement services, and theresponsibilities of Job Corps placementagencies in placing graduates in jobs.

The authority provided in section149(d) of the Act, to allow for placementof former students (non-graduates), isreflected in §§ 670.710 and 670.720;however, placement services are notrequired for anyone other thangraduates. Implementation of newrequirements for provision of 12 monthsof continued services for graduates andfor 6 and 12 month follow-up trackingof graduates placed in jobs (§ 670.980(a)(4) and (a)(5)) will require a

realignment of existing financialresources to support these newinitiatives. The ability to provideplacement services for former studentsin addition to the required placementservices for graduates will be contingenton having the funding resources to doso. We anticipate that some funds usedin the past to provide placementservices for all former enrollees willhave to be realigned to support the newrequired services for graduates,therefore, it is likely that the level ofplacement services for graduates and forformer enrollees will differ.

Continued Services for GraduatesSubpart G discusses section 148(d) of

the Act, which requires provision of 12months of continued service forgraduates. Sections 670.740 and 670.750discuss this requirement and who mayprovide those services. Provision of 12months of continued services is a newrequirement, which requires a new levelof effort for Job Corps service providers.As discussed above, this will likelydivert some funding resources whichhave been used in the past for provisionof placement services for all students.As we implement the new requirementfor 12 months of continued services forgraduates, we will use variousapproaches in order to learn what theseservices should consist of and how bestto procure and provide them. Weanticipate that provision of continuedservices for graduates may be handledby placement and support contractors,by Job Corps centers, and/or by One-Stops.

Subpart H—Community ConnectionsSubpart H describes new

requirements for Job Corpsrepresentatives to serve on local youthcouncils, as provided for in section117(h) of the Act, as well as for centerbusiness and community liaisons, andfor center industry councils, as providedfor in WIA sections 153 and 154,respectively. Section 670.800(f)describes the role and responsibilities ofcenter industry councils, as prescribedin section 154(c) of the Act, to analyzelabor market information and identifyjob opportunities in areas wherestudents will seek employment and theskills needed for those jobs, and torecommend changes in centervocational training offerings asappropriate. The intent of this subpart isto provide regulatory language to tie JobCorps centers more closely to their localcommunities and local employers toensure that the vocational and othertraining students receive will enablethem to obtain meaningful jobs in theirhome communities upon graduation.



Subpart I—Administrative andManagement Provisions

Student Benefits and Protections

Subpart I provides requirementsrelating to Tort Claims (§§ 670.900 and.905), Federal Employees CompensationAct (FECA) benefits for students(§§ 670.910 through 930), safety andhealth (§ 670.935), and law enforcementjurisdiction on Job Corps centerproperty (§ 670.940).

Financial and Audit Responsibilities

Subpart I also discusses financialmanagement responsibilities of JobCorps center operators and other JobCorps service providers, as well asFederal audit requirements.

Program Accountability andPerformance Indicators

Subpart I also incorporates specificrequirements relating to performanceassessment and accountabilitycontained in section 159(c) of the Act,as well as requirements for performanceimprovement plans, as provided for inWIA section 159(f)(2), for Job Corpscenter operators or other serviceproviders who fail to meet expectedlevels of performance. Sections 670.975and 670.980 describe how performanceof the Job Corps program will beassessed and the required indicators ofperformance. Indicators of performanceinclude: placement rates of graduates injobs, including jobs related to vocationaltraining received; average wage atplacement at six months and twelvemonths after job entry; retention inemployment six and twelve monthsafter job entry; the number of graduateswho achieved job readiness andemployment skills; and the number whoentered postsecondary or advancedtraining programs.

Disclosure of Information andResolution of Complaints

Subpart I includes requirementsrelating to student records anddisclosure of information about JobCorps students. It also contains theprocedures that center operators andservice providers must follow whenresolving complaints and disputes ofstudents and other parties.

Part 671—National Emergency Grantsfor Dislocated Workers

Introduction

Section 170 of WIA provides fortechnical assistance, and section 171provides for demonstration, pilot,multiservice, research and multistateprojects. Although we have notregulated on these sections, it is again

important to note these activities for thegeneral workforce investment system.

Section 170(a) provides that theSecretary will provide, coordinate andsupport the development of training,technical assistance, staff developmentand other activities to States andlocalities, and in particular, assist Statesin making transitions from carrying outJTPA to carrying out activities undertitle I of WIA.

Section 170(b) provides that a portionof the funds reserved by the Secretaryunder WIA section 132(a)(2) be used to:(1) Assist States that do not meet theState performance measures fordislocated workers; (2) assist otherStates, local areas and other entitiesinvolved in providing assistance fordislocated workers and promotecontinuous improvement to dislocatedworkers under title I of WIA; or (3)assist staff who provide rapid responseservices, including training of those staffin proven methods of promoting,establishing and assisting labor-management or transition committees toplan for effective adjustment assistancefor workers impacted by dislocationevents.

Section 171(a), (b) and (c) of WIAdescribe employment and trainingprojects which may be funded, as wellas the processes for such funding.Section 171(d) provides for dislocatedworker demonstration projects and pilotprojects, multiservice and multistateprojects. The purpose of dislocatedworker demonstration projects is to testinnovative approaches that addresspriorities established by the Secretary,are consistent with the goals describedin WIA, and subsequently may provebeneficial in providing adjustmentassistance to larger dislocated workerpopulations. Generally, projects will befunded as a result of competitivesolicitations published in the FederalRegister, however, the Secretary maynegotiate and fund projects other thanthrough such solicitations.

Part 671 describes the availability ofa portion of the funds reserved by theSecretary under WIA section132(a)(2)(A) for assistance to dislocatedworkers.

National Emergency GrantsPart 671 contains limited regulations

about dislocated worker funds reservedfor national emergency grants. Section173 of WIA authorizes the Secretary toaward discretionary funds to servedislocated workers in certain situations.These regulations describecircumstances under which funds maybe available, including to provideemployment and training assistance toworkers affected by major economic

dislocations (such as plant closures,mass layoffs, closures or realignments ofmilitary installations, dislocations dueto federal policies, etc.); and to provideassistance to Governors of States whenFEMA has determined that a majordisaster, as defined in the Robert T.Stafford Disaster Relief and EmergencyAssistance Act (42 U.S.C. 5122 (1) and(2)), has occurred in the area.

These regulations emphasize theimportance of rapid response assistancefor the development of requests fornational emergency funds. We set a highpriority on the early collection ofinformation about workers being laidoff, so that requests for funds will bemade promptly when it is determinedthat there are insufficient State and localformula funds available to meet theneeds of workers being laid off. Thisprocess ensures that there are fundsavailable in the local area when theworkers first need the assistance. Earlyintervention to assist workers beingdislocated is critical to enable them tofind or qualify for new jobs as soon aspossible after the dislocation occurs.While these regulations highlight someof the key elements and requirementsfor applying for national emergencyfunds, guidelines to apply for nationalemergency funds will be publishedseparately in the Federal Register.

We received several comments on§ 671.120, including requests that weadd language to allow labororganizations the opportunity tocomment on and grieve decisionsregarding eligible applications to theDepartment, and that we add languagethat cites labor organizations as anexample of an organization with uniquecapabilities to respond to a dislocation.

Response: WIA provides for labororganization membership on both Stateand Local Boards. In addition, labororganizations are represented on labor-management committees, where suchcommittees are formed. These boardsand committees would be involved inthe development and review of NationalEmergency Grant requests and,therefore, labor organizations, as well asother interested parties, should havesufficient opportunity to comment onapplications through those roles. Whilewe agree that labor organizations areoften valuable partners in, or operatorsof, dislocated worker programs, we havenot granted the request to specificallyname them in the regulations.Employers and other organizations mayalso be excellent partners or operators.To list one group to the exclusion ofothers could be considered unfair.Section 671.120(b) and (c), identifying‘‘other private entities’’ and ‘‘otherentities,’’ respectively, as potential



eligible applicants for NationalEmergency Grants are sufficientlyinclusive of a wide variety oforganizations, including labororganizations.

Section 671.140(c)(1) describes thedeadline for a National EmergencyGrant participant to be enrolled intraining to be eligible for needs-relatedpayments under the grant. The currentdeadline is by the end of the 6th weekfollowing the date of grant award.Comments focused on extending thisdeadline. The commenters viewed thetime frame as overly restrictive, giventhe new requirements under WIA, suchas receipt of core and intensive servicesand the use of ITA’s.

Response: This provision is based onprior years’ JTPA appropriationslanguage, and is included to give Statesadditional flexibility, beyond the 13/8week enrollment in trainingrequirement at WIA section 134(e)(3)(B),in the event that there is a lack offormula or emergency grant funds in theState or local area at the time of thedislocation. We have not granted therequest to extend the deadline, as thisdeadline is only to prevent a participantfrom losing their eligibility for needs-related payments because funds are notavailable in the State or local area toenroll the participant in training by the13/8 week deadline. We have, however,revised the regulations to include otherexceptions ‘‘as described in the NationalEmergency Grant applicationguidelines’’. Early intervention iscritical in getting workers back to workquickly, potential grant participantsshould be receiving core and intensiveservices while a National EmergencyGrant application is being developedand reviewed, then enrolled in trainingonce the grant funds become available.While 20 CFR 663.160 and 663.240require that an individual receive atleast one core and one intensive service,respectively; 20 CFR 663.165 and663.250 provide that there is nominimum time period in which anindividual must participate in coreservices before receiving intensiveservices, nor in intensive services beforemoving to training services, that wouldhinder a grant participants from meetingthe six week time frame.

Part 652—Establishment andFunctioning of State EmploymentServices

Introduction

In amending the Wagner-Peyser Actin title III of the Workforce InvestmentAct (WIA) of 1998, Congress intended toencourage coordination in the planningand delivery of Wagner-Peyser Act and

WIA title I services, while retainingState agency administration of aseparate Wagner-Peyser Act programand funding stream for the delivery ofservices in a One-Stop environment.The amendments to the Wagner-PeyserAct require the State agency to providelabor exchange services delivered byState merit-staff employees as part of aOne-Stop delivery system, and to ensurethat the delivery of services fundedunder the Wagner-Peyser Act iscoordinated with other One-Stoppartner programs in accordance with afive-year strategic plan.

Subpart A—Employment ServiceOperations

The rules governing the operation ofthe basic labor exchange program havebeen located in 20 CFR part 652, subpartA for many years and are well knownto State agencies administering theWagner-Peyser Act. The rules governingWagner-Peyser Act services in a One-Stop delivery system environment, asrequired by WIA, are contained insubpart C of 20 CFR part 652.

The final regulations at part 652subpart A contain revisions that updatedefinitions and update references inadministrative provisions.

Under the authority of the Wagner-Peyser Act, the Governor is required todesignate a State agency to administerfunds authorized under the Wagner-Peyser Act and to provide laborexchange services to employers and jobseekers, including unemploymentinsurance (UI) claimants, veterans,migrant and seasonal farmworkers, andpersons with disabilities.

We received no written commentsabout the Interim Final Rule’s changesto subpart A. However, we have madesome technical changes to conform theregulations to WIA requirements. Thewords ‘‘Planning and’’ are removedfrom the heading of subpart A to reflectthe previous removal of §§ 652.6 and652.7 that discussed planning.Regulations for State plans are nowlocated in subpart C at §§ 652.211through 652.214. The definition of StateJob Training Coordinating Council(SJTCC), at § 652.1, is removed. Citationerrors are corrected in the revision to§ 652.5.

Technical changes to § 652.8,Administrative Provisions, consist ofrevised references to specified federalregulations and OMB Circular A–87(Revised). We have made a technicalchange to § 652.8(j)(1), to clarify thatWagner-Peyser Act grantees are requiredto comply with all applicable Federalnondiscrimination laws, including lawsprohibiting discrimination on the basisof the factors specified in the regulation.

As it is used in the WIA regulations, theterm ‘‘including’’ in this provision isused to indicate an illustrative, but notexhaustive list of examples.Additionally, the term ‘‘handicap’’ hasbeen changed to ‘‘disability’’ tocorrespond to the phrase normally usedin laws prohibiting discrimination onthe basis of handicap or disability.

Subpart C—Wagner-Peyser Act Servicesin a One-Stop Delivery SystemEnvironment

Part 652, subpart C, describesrequirements for the establishment andfunctioning of State Wagner-Peyser Actservices in a One-Stop delivery systemenvironment. Governors must designatea State agency responsible foradministering Wagner-Peyser Act fundsas a distinct funding source. The rulerequires that the State agency retainresponsibility for, and oversight of, allWagner-Peyser Act labor exchangeservices provided through the One-Stopdelivery system.

Employment Services in the One-StopDelivery System

Funds allocated to States undersection 7(a) of the Wagner-Peyser Actmust be used by the State agency toprovide the three methods of laborexchange services (self-service,facilitated self-help service, and staff-assisted service) in at least onecomprehensive physical center in eachlocal workforce investment area duringnormal and customary hours ofoperation, and in accordance with alocal Memorandum of Understanding(MOU). Within the local area, there alsomay be affiliated sites, as described in§ 652.202(b), that provide the laborexchange services described at section7(a) of the Wagner-Peyser Act. Inaccordance with the local MOU, and,consistent with State and Local Plans,these affiliated sites should be animportant part of the State’s network oflocal sites that provide job seekers andemployers multiple access points toOne-Stop partners’ services through theOne-Stop delivery system. We haverevised §§ 652.202 and 652.207 to addthe word ‘‘comprehensive’’ which wasomitted in error in the Interim FinalRule. To ensure coordination of servicedelivery with title I of WIA, we haverevised § 652.202(b)(1) to reference§ 652.207(b). For the same reason, wehave revised § 652.202(b)(2) to reference20 CFR 662.100. Finally, we emphasizethat Wagner-Peyser Act funded servicesmust be available to and accessible byindividuals with disabilities.



Wagner-Peyser Act Funds

We received comments about fundsauthorized under section 7 of theWagner-Peyser Act. One commenterexpressed concern that § 652.205 hadgiven State legislatures the authority todistribute funds under section 7(c) ofthe Wagner-Peyser Act.

Response: Under section 4 of theWagner-Peyser Act, the Governor isrequired to designate or authorize thecreation of a State agency responsiblefor cooperating with the Secretary underthe Wagner-Peyser Act. The Stateagency, under the direction of theGovernor, is responsible for thedistribution and oversight of allauthorized funds under section 7 of theWagner-Peyser Act, as described in§ 652.203. Section 7(c) of the Wagner-Peyser Act does not authorize Statelegislatures to distribute Wagner-PeyserAct funds. Thus, no change needs to bemade to § 652.205. While the Statelegislature may not distribute the funds,it may have the authority to setpriorities for the uses of Wagner-Peyserfunds.

Another commenter suggested that§ 652.206 clearly indicate thelimitations on the use of funds undersection 7(b) of the Wagner-Peyser Act.

Response: Since § 652.204 referencesthe specific activities authorized forfunds reserved by the Governor undersection 7(b), no change has been madeto § 652.206.

Wagner-Peyser Act Services

Wagner-Peyser Act funds must beused to provide core services and maybe used to provide applicable intensiveservices, as defined in title I of WIA.One commenter asked that core andintensive services be defined in theregulations and asked how it would bedetermined whether to provideintensive services.

Response: Section 652.206 containscross-references to the definitions ofcore and intensive services, which arefound on 20 CFR 663.150 and 663.200.The regulations allow the State agencydiscretion in providing required coreand applicable intensive Wagner-PeyserAct services under section 7(a) of theWagner-Peyser Act. Applicableintensive services include services suchas individual and group counseling, jobsearch and placement assistance, staff-assisted referrals to jobs, and staff-assisted employer services. Theseservices must be provided consistentwith the needs of job seekers andemployers, in accordance with a localMOU. State agencies must ensure theavailability of an appropriate mix ofservices, ranging from electronic self-

services to staff-assisted services, intheir One-Stop delivery systems. Nochange has been made to § 652.206.

Two commenters suggested thatWagner-Peyser Act resources should beused solely, or to the greatest extentpossible, to provide the core servicesdelivered through the One-Stop deliverysystem.

Response: The rule, at 20 CFR662.250, discusses the requirements toprovide core services funded underother One-Stop partner programs.However, both the Wagner-Peyser Actand § 652.206 permit the expenditure ofWagner-Peyser Act funds on applicableintensive services as well. Funding ofcore services authorized andtraditionally provided by the Wagner-Peyser program and other One-Stoppartner programs should be determinedby the local MOU. No change has beenmade to the regulations.

Services to UI ClaimantsOne commenter suggested that the

term ‘‘other activities’’ referred to atsection 3(c)(3) of the Wagner-Peyser Act,be specified in the regulations.

Response: We agree with thecommenter and have revised § 652.209to specify what are considered ‘‘otheractivities.’’ These ‘‘other activities’’ are:(1) coordination of labor exchangeservices with the provision of UIeligibility services as required bysection 5(b)(2) of the Wagner-PeyserAct; and (2) administration of the worktest and provision of job finding andplacement services as required bysection 7(a)(3)(F) of the Wagner-PeyserAct.

The commenter also expressedconcern about the availability ofWagner-Peyser Act funds to providereemployment services to UI claimantswho are required to participate inreemployment services as a conditionfor receipt of benefits.

Response: Section 652.209 requiresthe provision of Wagner-Peyser Actreemployment services to those UIclaimants required by Federal or Statelaw to participate in reemploymentservices as a condition for receipt of UIbenefits, to the extent that funds areavailable. An individual’s requirementto participate in reemployment servicesalso may be met through the provisionof services funded through sources otherthan the Wagner-Peyser Act. States havediscretion in determining the sources offunding for services to these claimants.Moreover, UI claimants who are notrequired to participate in reemploymentservices as a condition for receipt of UIbenefits, also may requestreemployment services provided under§ 652.210.

State Planning Requirements

One commenter identified the need tomake clear that the detailed Wagner-Peyser Act plan is part of the StrategicFive-Year Plan for Title I of theWorkforce Investment Act and theWagner-Peyser Act submitted by theGovernor in accordance with WIAregulations at 20 CFR 661.220.

Response: We have made a technicalchange to § 652.211 to indicate that theState agency must prepare that portionof the Strategic Five-Year Plan for TitleI of the Workforce Investment Act andWagner-Peyser Act describing thedelivery of services provided under theWagner-Peyser Act. Further, to correctan editorial error in § 652.214, therequirement on modifications to theState Plan to adjust service strategies ifperformance goals are not met has beenmoved to the list of requirements in§ 652.212(b).

Delivery of Wagner-Peyser Act Servicesby State Merit-Staff Employees

We received several comments aboutthe Secretary’s authority under sections3(a) and 5(b) of the Wagner-Peyser Actto require the delivery of labor exchangeservices by merit-staff employees.Section 652.215 of the final regulationsreflects the Department’s authorityunder the Wagner-Peyser Act, affirmedin State of Michigan v. Alexis M.Herman, 81 F.Supp. 2d 840 (W.D. Mich.1998), to require that job finding,placement, and reemployment servicesfunded under the Wagner-Peyser Act,including services to veterans, bedelivered by State merit-staffemployees.

Two commenters suggested that§ 652.215 be clarified to stipulate thatWagner-Peyser Act services must bedelivered by merit-staff employees of aState agency. Three commenterssuggested that the interpretation of themerit-staffing requirement be broadenedspecifically to include units of generallocal government.

Response: After carefully examiningand considering all of the commentsreceived, we have revised § 652.215 tomake clear that Wagner-Peyser Actservices must be delivered by merit-staffemployees of a State agency. Since thebeginning of the Federal-State Wagner-Peyser Act program, we have requiredthat annual State Wagner-Peyser Actservice plans include a merit system ofpersonnel administration. To ensureconsistency in the application of meritpersonnel systems and to promotegreater statewide administrativeefficiency, merit-staff employees of theState agency must deliver Wagner-Peyser Act services, as a condition for



receipt of grants. We have determinedthat State agency merit-staffingpreserves and maintains competence,impartiality, and nonpartisanship in theadministration of Wagner-Peyser Actservices to job seekers and employers aspart of the One-Stop delivery system.

Under section 3(a) of the Wagner-Peyser Act, prior to issuance of theInterim Final Rule, the Departmentauthorized demonstrations of theeffective delivery of Wagner-Peyser Actservices utilizing non-State agencyemployees in the States of Colorado,Massachusetts, and Michigan. Thesethree demonstrations were permitted asexceptions to the long-standing policydescribed above in order to assess theeffectiveness of alternative deliverysystems. We have determined that thesethree demonstrations reflect a sufficientrange of delivery options utilizing non-State agency employees to determinewhether using such employees is aneffective and efficient way to deliverWagner-Peyser services. Therefore, theDepartment is not authorizing otherStates to demonstrate Wagner-PeyserAct service delivery using non-Stateagency employees. Failure to complywith the State merit staffingrequirements of § 652.215 may result inrevocation of authority to draw downWagner-Peyser Act funds, disallowanceof costs, and/or decertification of a Stateto receive Wagner-Peyser Act funds.

One commenter suggested that theDepartment develop federal proceduresto ensure compliance with State merit-staffing requirements.

Response: We believe that State merit-staffing compliance is ensured throughthe final regulations at 20 CFR part 652and the federal review guidelinescontained in the Wagner-Peyser ActReview Guide for Basic Labor ExchangeServices (ETA Field Memorandum No.14–99, January 12, 1999). Thus, at thistime, we do not believe there is a needto issue further guidance.

Guidance by the One-Stop OperatorOne commenter suggested that the

provision in § 652.216 which limits theability of a One-Stop operator, otherthan the State agency, to provide onlyguidance to State agency merit-staffemployees is contrary to the concept ofservice integration by preventing theoperator from providing supervision toall employees in the One-Stop center.Other commenters recommended thatthe regulations remain silent on theissue of guidance. Another suggestionwas that labor unions, whose membersand/or bargaining agreements areaffected by the terms of a local MOUthat defines ‘‘guidance,’’ must providewritten concurrence.

Response: The focus of thesecomments was on whether the word‘‘guidance’’ in § 652.216 gives the One-Stop operator too little or too muchcontrol over State agency employees.After careful consideration of thecomments, we are retaining the term‘‘guidance’’ to describe the level ofsupervision of State merit-staffemployees by the One-Stop operator.This term best reflects the appropriaterelationship that should exist between anon-State agency One-Stop operator andState merit-staff employees fundedunder the Wagner-Peyser Act in the day-to-day operation of the One-Stop center.To ensure consistency with collectivebargaining agreements, we have revised§ 652.216 to allow the One-Stopoperator to provide guidance to merit-staff employees of the State agencyconsistent with the provisions of theWagner-Peyser Act, the local MOU, andapplicable collective bargainingagreements.

Finally, a commenter indicated thatthe wording regarding delegation to‘‘any other public agency’’ contained inthe parenthetical phrase in § 652.216 ofthe Interim Final Rule may appear to becontradictory.

Response: We agree that theparenthetical phrase is unnecessarysince the State agency is solelyresponsible for personnel matterspertaining to merit-staff employees ofthe State agency funded by the Act.Thus, the parenthetical phrase isremoved.

Additional Comments

We received a number of commentsthat did not pertain directly to 20 CFRpart 652 subpart A or C, but which didrefer to the Wagner-Peyser Act. One wasa question of whether priority of serviceto veterans under the Wagner-PeyserAct has been maintained.

Response: The rule, at 20 CFR 652,Subpart B—Services to Veterans isretained. Subpart B refers to 20 CFR part1001 which contains criteria for priorityof service to veterans under the Wagner-Peyser Act.

Another commenter asked whetherthe current migrant and seasonalfarmworkers’ regulations for theEmployment Service remain in effect.

Response: The requirements forservices to migrant and seasonalfarmworkers and other requirementspertaining to the administration ofWagner-Peyser Act services at 20 CFRparts 653 and 658 remain in effect.

A commenter expressed concernabout the lack of a limit onadministrative costs for Wagner-PeyserAct services as well as the lack of a

requirement to track the income of jobseekers.

Response: The WIA amendments tothe Wagner-Peyser Act did not includea limitation on administrative costs or arequirement to track the income of jobseekers. The Employment Servicesystem created by the Wagner-PeyserAct has always been universallyavailable to all job seekers regardless ofincome. Nothing in WIA has changedthis requirement. Thus, we can see noneed to track job seekers’ income. Weintend, however, to develop a system ofperformance measures for Wagner-Peyser funded labor exchange servicesand will soon publish for comment aproposal describing such measures.

III. Regulatory Flexibility andRegulatory Impact Analysis

The Regulatory Flexibility Act of1980, as amended in 1996 (5 U.S.C.chapter 6), requires the Federalgovernment to anticipate and minimizethe impact of rules and paperworkrequirements on small entities. ‘‘Smallentities’’ are defined as small businesses(those with fewer than 500 employees,except where otherwise provided),small non-profit organizations (thosewith fewer than 500 employees, exceptwhere otherwise provided) and smallgovernmental entities (those in areaswith fewer than 50,000 residents). Wehave assessed the potential impact ofthis Final Rule by consulting with awide range of small entities, in order toidentify and address any areas ofconcern. Based on that assessment, wecertify that the Final Rule, aspromulgated, will not have a significantimpact on a substantial number of smallentities. We are transmitting a copy ourcertification to the Chief Counsel forAdvocacy of the Small BusinessAdministration.

The WIA Final Rule implementsmajor reforms to the nation’s jobtraining system. The WIA will provideresources to States, localities, and otherentities, including small entities, toassist youth, adults, and dislocatedworkers in preparing for, obtaining andretaining employment. This Rule setsforth the rights, responsibilities andconditions under which State and localgovernments may receive grants tooperate programs in local workforceinvestment areas with these funds.Governments in local workforceinvestment areas are not smallgovernmental entities. These areasgenerally have a population of at least500,000 and are intended to replaceexisting service areas under the JobTraining Partnership Act (JTPA) whichgenerally have a population of at least200,000. Consequently, we do not



foresee an adverse impact on smallgovernmental entities. Nevertheless, wehave consulted extensively with Stateand local officials and theirrepresentatives to insure that anypotential effect would be minimal.These consultations included two week-long conferences in which State andlocal governmental participants workedin groups divided by specialized area ofinterest, and the participation of Stateand local governmental officials underthe Intergovernmental Personnel Act.

As during the development of theInterim Final Rule, we also provided anumber of opportunities, through avariety of media, for the input of smallbusinesses, non-profits and any otherinterested parties. These opportunitiesincluded town hall meetings spanningthe nation in eleven locations, and aninteractive web site providing ETApolicy and responses to questions fromthe public. Additionally, in order tosolicit comments from the widestpossible audience, we broadlydisseminated our developing policiesthrough the publication of consultationdocuments which were available on theInternet, published in the FederalRegister and distributed throughout theemployment and training community.These documents were published beforeall the issues had been fully resolved sothat stakeholders could truly have avoice in the policy making process. Inaddition to the Interim Final Rule,which was posted on our web site inaddition to being published in theFederal Register, we also used theInternet to publish guidance aboutpolicy issues and to engage the systemin discussions around those issues.

The Final Rule provides significantflexibility to States and localgovernments to design programs and todetermine policy and spendingpriorities for the use of WIA grant funds.This policy-making flexibility isembodied in 20 CFR 661.120. The Ruleprovides States and local governmentswith additional flexibility to designsystems that meet the specific needs ofeach State and local area through thegeneral and work-flex waiver provisionsat 20 CFR 661.410 and 661.430. Wehave taken steps to further ameliorateany potential burdens through 20 CFR667.210 of the Final Rule, whichprovides that States and localities mayuse a portion of their grant funds (up tofive percent at the State level and up toten percent at the local level) formanagement and administration of thegrant, rather than for the directprovision of services to participants.Because the WIA statutory limit onadministrative costs is lower than theexisting JTPA limit, we extensively

consulted with States and localitiesabout the regulatory definition of theseadministrative costs to ensure that thiscost category is defined as flexibly aspossible. We also initiated a pilot studyof ten JTPA service delivery areas(SDA’s), to assess the Interim FinalRule’s definition of administrative costs.As a result of those consultations andour study, we made significantadjustments to the definition ofadministrative costs in the Final Rule inorder to take account of the practicalrealities of implementing andmaintaining this new system.

A portion of WIA funds is available tocertain communities in direct grantsfrom the Department. We haveconsulted with representatives of themigrant and seasonal farm workercommunity, and Indian and NativeAmerican tribal governments tominimize any burdens that provisions ofthe Rule would have on thosecommunities. The Rule also provideslimited authority to these grantees toreceive waivers of certain provisions ofthe Rule, to lessen any burden on thesecommunities.

To further ameliorate any burden onWIA direct grantees, the Rule permitsdirect grantees to use a portion of WIAfunds for administrative costsexpenditure. Unlike formula funds, theadministrative cost limit for directgrantees is not specified in the Rule butwill be negotiated in the grantagreement to take into accountindividual circumstances. Due to someconfusion, new regulatory provisionshave been added to expressly state this.Similarly, the period of availability forexpenditure of grant funds isestablished in the grant agreementrather than set by Rule to take intoaccount individual circumstances.Based on provisions such as these, wehave concluded that the Rule will notplace undue burdens on small entities.In addition, under the Small BusinessRegulatory Fairness Act (SBREFA) (5U.S.C. Chapter 8), we have determinedthat this Final Rule is not a ‘‘majorrule,’’ as defined in 5 U.S.C. 804(2). Wecertify that this Final Rule has beenassessed in accordance with Pub. L.105–227, 112 Stat. 2681, for its effect onfamily well-being.

IV. Executive Order 12866Under Executive Order 12866, we

have evaluated this Final Rule and havedetermined its provisions are consistentwith the statement of regulatoryphilosophy and principles promulgatedby the Executive Order. The Departmentof Labor is required by statute toprescribe regulations for the WIAprogram. We have made every

reasonable effort to obtain input in apurposeful manner from a variety ofinterested parties (State and localgovernment officials, community-basedorganizations, IntergovernmentalOrganizations, other stakeholders, andthe general public). The WIA grantsincrease the resources available to thepublic and private organizations thatpromote long-term employment andself-sufficiency. We have determinedthe Final Rule will not have an adverseeffect in a material way on the nation’seconomy.

We have developed the Final Rule inclose consultation with the Departmentof Education, and with other interestedFederal agencies. Based on thoseconsultations, we have determined thatthis Final Rule will not create a seriousinconsistency or otherwise interferewith any action taken or planned byanother Federal Agency.

This Final Rule implements theWorkforce Investment Act, which is thefirst major reform of the nation’s jobtraining and employment system in over15 years. Consequently, this Final Ruleraises novel policy issues. Therefore,this is a significant regulatory actionwhich has been reviewed by the Officeof Management and Budget for thepurposes of Executive Order 12866.

V. Unfunded MandatesThe Final Rule has been reviewed in

accordance with the UnfundedMandates Reform Act of 1995 (UMRA)(2 U.S.C. 1501 et seq.) and ExecutiveOrder 12875. Section 202 of UMRArequires that a covered agency preparea budgetary impact statement beforepromulgating a rule that includes anyFederal mandate that may result in theexpenditure by State, local and Tribalgovernments, in the aggregate, or by theprivate sector, of $100 million or morein any one year.

If a covered agency must prepare abudgetary impact statement, section 205of UMRA further requires that it selectthe most cost-effective and leastburdensome alternative that achievesthe objectives of the rule and isconsistent with the statutoryrequirements. In addition, section 203 ofUMRA requires a plan for informing andadvising any small government that maybe significantly or uniquely impacted.

We have determined that the WIAFinal Rule will not mandate theexpenditure by the State, local, andTribal governments, in the aggregate, orby the private sector, of more than $100million in any one year. Accordingly,we have not prepared a budgetaryimpact statement, specifically addressedthe regulatory alternatives considered,or prepared a plan for informing and



advising any significant or uniquelyimpacted small government.

VI. Executive Order 12988

This regulation has been drafted andreviewed in accordance with ExecutiveOrder 12988, Civil Justice Reform, andwill not unduly burden the Federalcourt system. The regulation has beenwritten so as to minimize litigation andprovide a clear legal standard foraffected conduct, and has been reviewedcarefully to eliminate drafting errors andambiguities.

VII. Executive Order 13132

Federalism Impact Statement

There are some federalismimplications in this rule, for example,the regulations implementing sections3(a) and 5(b) of the Wagner-Peyser Actmay have a direct effect on the States’personnel management policies.Specifically, 20 CFR 652.215 and652.216, reiterate, in regulation, thelong-standing policy of requiring thatthe delivery of Wagner-Peyser Act laborexchange services be provided by Statemerit staff employees in the context ofthe One-Stop delivery system. Since theimplementation of the Wagner-PeyserAct of 1933, there has been anuninterrupted application of thisrequirement as a condition imposedupon States for receipt of grants for theadministration of Wagner-Peyser Actservices. The requirement that jobfinding, placement, and reemploymentservices funded under the Wagner-Peyser Act, including services toveterans, be delivered by merit-staffemployees was affirmed by the FederalDistrict Court in Michigan v. Alexis M.Herman, 81 F.Supp. 2d 840 (W.D. Mich.1998).

Throughout the development of theInterim Final Rule and the Final Rule,we participated in numerousconsultations with State and localofficials, including organizationsrepresenting elected officials, aboutthese particular provisions as well asthe regulations in general. Theseconsultations began with thedevelopment of the Interim Final Rulebefore the issuance of Executive Order13132 and continued throughout therulemaking process. The groupsconsulted included the NationalGovernors Association, the U.S.Conference of Mayors, the NationalAssociation of State Legislators, theInterstate Conference of EmploymentSecurity Agencies, the NationalAssociation of Counties, the NationalLeague of Cities, and the U.S.Conference of Black Mayors. Perhapsbecause 20 CFR 652.215 and 652.216

merely reiterate the long-standing policyof the Department, State and localgovernment officials and representativesdid not raise any concerns with this on-going policy. During these consultationswe did receive questions regarding thescope and duration of the threedemonstrations authorized by theSecretary, to which we promptlyresponded. Although not from State andlocal government officials, we didreceive some written comments on theseprovisions. These are discussed andresponded to in detail in the preamblesection on part 652.

After consulting with the groupsspecified above, and carefullyexamining and considering all of theconcerns raised, we have revised 20CFR 652.215 to more clearly state ourlong-standing policy position thatWagner-Peyser Act services must bedelivered by merit-staff employees of aState agency. Since the beginning of theFederal-State Wagner-Peyser Actprogram, we have required that annualState Wagner-Peyser Act service plansinclude a merit system of personneladministration. To ensure consistencyin the application of merit personnelsystems and to promote greaterstatewide administrative efficiency,merit-staff employees of the Stateagency must deliver Wagner-Peyser Actservices, as a condition for receipt ofgrants. Under 20 CFR 652.216 non-meritstaff employees are not prohibited fromproviding guidance to merit staffemployees. We have determined thatState merit-staffing preserves andmaintains competence, impartiality, andnonpartisanship in the administration ofWagner-Peyser Act services to jobseekers and employers as part of theOne-Stop delivery system.

Under section 3(a) of the Wagner-Peyser Act, before issuance of theInterim Final Rule, the Departmentauthorized demonstrations of theeffective delivery of Wagner-Peyser Actservices using non-State agencyemployees in the States of Colorado,Massachusetts, and Michigan. Thesethree demonstrations were permitted asexceptions to the long-standing policydescribed above in order to assess theeffectiveness of alternative deliverysystems. We have determined that thesethree demonstrations reflect a sufficientrange of delivery options using non-State agency employees to determinewhether using such employees is aneffective and efficient way to deliverWagner-Peyser services. No additionaldemonstrations will be authorized.

We, therefore, have promulgated theseregulations only after extensiveconsultations as well as initiating actualdemonstrations in three States.

VIII. Effective Date

WIA became effective upon the dateof enactment, August 7, 1998. Wedetermined, in accordance with 5 U.S.C.553(b)(3)(B), that the statutory mandateto promulgate regulations within 180days of the enactment of the statuteconstituted good cause for waivingnotice and comment proceeding inorder for the timely issuance ofregulations to assist States in operatingunder WIA as early as possible.Congress also recognized this urgency insection 506(c) of the Act, by specificallyauthorizing the issuance of an InterimFinal Rule. The Interim Final Rule seta comment period to elicit any concernsraised by the rule for consideration inthe development of this Final Rule. Weprovided a comment period of 90 daysto provide a significant period for publicinput into any revisions to part 652, andparts 660 through 671 for the Final Rule.We fully reviewed all commentsreceived, and considered the inputprovided by our State, local and Federalpartners through our manyconsultations. This Final Rule willbecome effective on September 11,2000.

IX. Catalog of Federal DomesticAssistance Number

The program is listed in the Catalogof Federal Domestic Assistance at No.17.255.

List of Subjects in 20 CFR Parts 652 and660 through 671

Employment, Grant programs, Jobtraining programs, Labor.

Signed at Washington, DC, this 24th day ofJuly, 2000.Alexis M. Herman,Secretary of Labor.

For the reasons stated in thepreamble, 20 CFR Chapter V is amendedas follows:

1. Parts 660 through 671 are revisedto read as follows:

PART 660—INTRODUCTION TO THEREGULATIONS FOR WORKFORCEINVESTMENT SYSTEMS UNDER TITLEI OF THE WORKFORCE INVESTMENTACT

Sec.660.100 What is the purpose of title I of the

Workforce Investment Act of 1998?660.200 What do the regulations for

workforce investment systems under titleI of the Workforce Investment Act cover?

660.300 What definitions apply to theregulations for workforce investmentsystems under title I of WIA?

Authority: Sec. 506(c), Pub. L. 105–220; 20U.S.C. 9276(c).



§ 660.100 What is the purpose of title I ofthe Workforce Investment Act of 1998?

The purpose of title I of the WorkforceInvestment Act of 1998 (WIA) is toprovide workforce investment activitiesthat increase the employment, retentionand earnings of participants, andincrease occupational skill attainmentby participants, which will improve thequality of the workforce, reduce welfaredependency, and enhance theproductivity and competitiveness of theNation’s economy. These goals areachieved through the workforceinvestment system. (WIA sec. 106.)

§ 660.200 What do the regulations forworkforce investment systems under title Iof the Workforce Investment Act cover?

The regulations found in 20 CFR parts660 through 671 set forth the regulatoryrequirements that are applicable toprograms operated with funds providedunder title I of WIA. This part 660describes the purpose of that Act,explains the format of these regulationsand sets forth definitions for terms thatapply to each part. Part 661 containsregulations relating to Statewide andlocal governance of the workforceinvestment system. Part 662 describesthe One-Stop system and the roles ofOne-Stop partners. Part 663 sets forthrequirements applicable to WIA title Iprograms serving adults and dislocatedworkers. Part 664 sets forthrequirements applicable to WIA title Iprograms serving youth. Part 665contains regulations relating toStatewide activities. Part 666 describesthe WIA title I performanceaccountability system. Part 667 setsforth the administrative requirementsapplicable to programs funded underWIA title I. Parts 668 and 669 containthe particular requirements applicableto programs serving Indians and NativeAmericans and Migrant and SeasonalFarmworkers, respectively. Parts 670and 671 describe the particularrequirements applicable to the Job Corpsand other national programs,respectively. In addition, part 652describes the establishment andfunctioning of State EmploymentServices under the Wagner-Peyser Act,and 29 CFR part 37 contains theDepartment’s nondiscriminationregulations implementing WIA section188.

§ 660.300 What definitions apply to theregulations for workforce investmentsystems under title I of WIA?

In addition to the definitions set forthat WIA section 101, the followingdefinitions apply to the regulations in20 CFR parts 660 through 671:

Department or DOL means the U.S.Department of Labor, including itsagencies and organizational units.

Designated region means acombination of local areas that arepartly or completely in a single labormarket area, economic developmentregion, or other appropriate contiguoussubarea of a State, that is designated bythe State under WIA section 116(c), ora similar interstate region that isdesignated by two or more States underWIA section 116(c)(4).

Employment and training activitymeans a workforce investment activitythat is carried out for an adult ordislocated worker.

EO data means data on race andethnicity, age, sex, and disabilityrequired by 29 CFR part 37 of the DOLregulations implementing section 188 ofWIA, governing nondiscrimination.

ETA means the Employment andTraining Administration of the U.S.Department of Labor.

Grant means an award of WIAfinancial assistance by the U.S.Department of Labor to an eligible WIArecipient.

Grantee means the direct recipient ofgrant funds from the Department ofLabor. A grantee may also be referred toas a recipient.

Individual with a disability means anindividual with any disability (asdefined in section 3 of the Americanswith Disabilities Act of 1990 (42 U.S.C.12102)). For purposes of WIA section188, this term is defined at 29 CFR 37.4.

Labor Federation means an alliance oftwo or more organized labor unions forthe purpose of mutual support andaction.

Literacy means an individual’s abilityto read, write, and speak in English, andto compute, and solve problems, atlevels of proficiency necessary tofunction on the job, in the family of theindividual, and in society.

Local Board means a Local WorkforceInvestment Board established underWIA section 117, to set policy for thelocal workforce investment system.

Obligations means the amounts oforders placed, contracts and subgrantsawarded, goods and services received,and similar transactions during afunding period that will requirepayment by the recipient orsubrecipient during the same or a futureperiod. For purposes of the reallotmentprocess described at 20 CFR 667.150,the Secretary also treats as Stateobligations any amounts allocated bythe State under WIA sections 128(b) and133(b) to a single area State or to abalance of State local area administeredby a unit of the State government, andinter-agency transfers and other actions

treated by the State as encumbrancesagainst amounts reserved by the Stateunder WIA sections 128(a) and 133(a)for Statewide workforce investmentactivities.

Outlying area means the United StatesVirgin Islands, Guam, American Samoa,the Commonwealth of the NorthernMariana Islands, the Republic of theMarshall Islands, the Federated States ofMicronesia, and the Republic of Palau.

Participant means an individual whohas registered under 20 CFR 663.105 or664.215 and has been determined to beeligible to participate in and who isreceiving services (except for follow upservices) under a program authorized byWIA title I. Participation commences onthe first day, following determination ofeligibility, on which the individualbegins receiving core, intensive, trainingor other services provided under WIAtitle I.

Recipient means an entity to which aWIA grant is awarded directly from theDepartment of Labor to carry out aprogram under title I of WIA. The Stateis the recipient of funds awarded underWIA sections 127(b)(1)(C)(I)(II),132(b)(1)(B) and 132(b)(2)(B). Therecipient is the entire legal entity thatreceived the award and is legallyresponsible for carrying out the WIAprogram, even if only a particularcomponent of the entity is designated inthe grant award document.

Register means the process forcollecting information to determine anindividual’s eligibility for servicesunder WIA title I. Individuals may beregistered in a variety ways, asdescribed in 20 CFR 663.105 and 20CFR 664.215.

Secretary means the Secretary of theU.S. Department of Labor.

Self certification means anindividual’s signed attestation that theinformation he/she submits todemonstrate eligibility for a programunder title I of WIA is true and accurate.

State means each of the several Statesof the United States, the District ofColumbia and the Commonwealth ofPuerto Rico. The term ‘‘State’’ does notinclude outlying areas.

State Board means a State WorkforceInvestment Board established underWIA section 111.

Subgrant means an award of financialassistance in the form of money, orproperty in lieu of money made undera grant by a grantee to an eligiblesubrecipient. The term includesfinancial assistance when provided bycontractual legal agreement, but doesnot include procurement purchases, nordoes it include any form of assistancewhich is excluded from the definition ofGrant in this part.



Subrecipient means an entity towhich a subgrant is awarded and whichis accountable to the recipient (or highertier subrecipient) for the use of thefunds provided. DOL’s auditrequirements for States, localgovernments, and non-profitorganizations provides guidance ondistinguishing between a subrecipientand a vendor at 29 CFR 99.210.

Unobligated balance means theportion of funds authorized by theFederal agency that has not beenobligated by the grantee and isdetermined by deducting thecumulative obligations from thecumulative funds authorized.

Vendor means an entity responsiblefor providing generally required goodsor services to be used in the WIAprogram. These goods or services maybe for the recipient’s or subrecipient’sown use or for the use of participants inthe program. DOL’s audit requirementsfor States, local governments, and non-profit organizations provides guidanceon distinguishing between asubrecipient and a vendor at 29 CFR99.210.

Wagner-Peyser Act means the Act ofJune 6, 1933, as amended, codified at 29U.S.C. 49 et seq.

WIA regulations mean the regulationsin 20 CFR parts 660 through 671, theWagner-Peyser Act regulations in 20CFR part 652, subpart C, and theregulations implementing WIA section188 in 29 CFR part 37.

Workforce investment activities meanthe array of activities permitted undertitle I of WIA, which includeemployment and training activities foradults and dislocated workers, asdescribed in WIA section 134, andyouth activities, as described in WIAsection 129.

Youth activity means a workforceinvestment activity that is carried outfor youth.

PART 661—STATEWIDE AND LOCALGOVERNANCE OF THE WORKFORCEINVESTMENT SYSTEM UNDER TITLE IOF THE WORKFORCE INVESTMENTACT

Subpart A —General GovernanceProvisions

Sec.661.100 What is the workforce investment

system?661.110 What is the role of the Department

of Labor as the Federal governmentalpartner in the governance of theworkforce investment system?

661.120 What are the roles of the local andState governmental partner in thegovernance of the workforce investmentsystem?

Subpart B—State Governance Provisions

661.200 What is the State WorkforceInvestment Board?

661.203 What is meant by the terms‘‘optimum policy making authority’’ and‘‘expertise relating to [a] program, serviceor activity’’?

661.205 What is the role of the State Board?661.207 How does the State Board meet its

requirement to conduct business in anopen manner under the ‘‘sunshineprovision’’ of WIA section 111(g)?

661.210 Under what circumstances may theGovernor select an alternative entity inplace of the State Workforce InvestmentBoard?

661.220 What are the requirements for thesubmission of the State WorkforceInvestment Plan?

661.230 What are the requirements formodification of the State WorkforceInvestment Plan?

661.240 How do the unified planningrequirements apply to the five-yearstrategic WIA and Wagner-Peyser planand to other Department of Labor plans?

661.250 What are the requirements fordesignation of local workforceinvestment areas?

661.260 What are the requirements forautomatic designation of workforceinvestment areas relating to units of localgovernment with a population of 500,000or more?

661.270 What are the requirements fortemporary and subsequent designation ofworkforce investment areas relating toareas that had been designated as servicedelivery areas under JTPA?

661.280 What right does an entity have toappeal the Governor’s decision rejectinga request for designation as a workforceinvestment area?

661.290 Under what circumstances mayStates require Local Boards to take partin regional planning activities?

Subpart C—Local Governance Provisions

661.300 What is the Local WorkforceInvestment Board?

661.305 What is the role of the LocalWorkforce Investment Board?

661.307 How does the Local Board meet itsrequirement to conduct business in anopen manner under the ‘‘sunshineprovision’’ of WIA section 117(e)?

661.310 Under what conditions may a LocalBoard directly be a provider of coreservices, intensive services, or trainingservices, or act as a One-Stop Operator?

661.315 Who are the required members ofthe Local Workforce Investment Boards?

661.317 Who may be selected to representa particular One-Stop partner programon the Local Board when there is morethan one partner program entity in thelocal area?

661.320 Who must chair a Local Board?661.325 What criteria will be used to

establish the membership of the LocalBoard?

661.330 Under what circumstances may theState use an alternative entity as theLocal Workforce Investment Board?

661.335 What is a youth council, and whatis its relationship to the Local Board?

661.340 What are the responsibilities of theyouth council?

661.345 What are the requirements for thesubmission of the local workforceinvestment plan?

661.350 What are the contents of the localworkforce investment plan?

661.355 When must a local plan bemodified?

Subpart D—Waivers and Work-Flex

661.400 What is the purpose of the GeneralStatutory and Regulatory WaiverAuthority provided at section 189(i)(4) ofthe Workforce Investment Act?

661.410 What provisions of WIA and theWagner-Peyser Act may be waived, andwhat provisions may not be waived?

661.420 Under what conditions may aGovernor request, and the Secretaryapprove, a general waiver of statutory orregulatory requirements under WIAsection189(i)(4)?

661.430 Under what conditions may theGovernor submit a Workforce FlexibilityPlan?

661.440 What limitations apply to theState’s Workforce Flexibility Planauthority under WIA?


Subpart A—General GovernanceProvisions

§ 661.100 What is the workforceinvestment system?

Under title I of WIA, the workforceinvestment system provides theframework for delivery of workforceinvestment activities at the State andlocal levels to individuals who needthose services, including job seekers,dislocated workers, youth, incumbentworkers, new entrants to the workforce,veterans, persons with disabilities, andemployers. Each State’s Governor isrequired, in accordance with therequirements of this part, to establish aState Board; to designate localworkforce investment areas; and tooversee the creation of Local Boards andOne-Stop service delivery systems inthe State.

§ 661.110 What is the role of theDepartment of Labor as the Federalgovernmental partner in the governance ofthe workforce investment system?

(a) Successful governance of theworkforce investment system will beachieved through cooperation andcoordination of Federal, State and localgovernments.

(b) The Department of Labor sees asone of its primary roles providingleadership and guidance to support asystem that meets the objectives of titleI of WIA, and in which State and localpartners have flexibility to designsystems and deliver services in amanner designed to best achieve the



goals of WIA based on their particularneeds. The WIA regulations provide theframework in which State and localofficials can exercise such flexibilitywithin the confines of the statutoryrequirements. Wherever possible,system features such as design optionsand categories of services are broadlydefined, and are subject to State andlocal interpretation.

(c) The Secretary, in consultation withother Federal Agencies, as appropriate,may publish guidance on interpretationsof statutory and regulatory provisions.State and local policies, interpretations,guidelines and definitions that areconsistent with interpretationscontained in such guidance will beconsidered to be consistent with the Actfor purposes of § 661.120.

§ 661.120 What are the roles of the localand State governmental partner in thegovernance of the workforce investmentsystem?

(a) Local areas should establishpolicies, interpretations, guidelines anddefinitions to implement provisions oftitle I of WIA to the extent that suchpolicies, interpretations, guidelines anddefinitions are not inconsistent with theAct and the regulations issued under theAct, Federal statutes and regulationsgoverning One-Stop partner programs,and with State policies.

(b) States should establish policies,interpretations, guidelines anddefinitions to implement provisions oftitle I of WIA to the extent that suchpolicies, interpretations, guidelines anddefinitions are not inconsistent with theAct and the regulations issued under theAct, as well as Federal statutes andregulations governing One-Stop partnerprograms.

Subpart B—State GovernanceProvisions

§ 661.200 What is the State WorkforceInvestment Board?

(a) The State Board is a boardestablished by the Governor inaccordance with the requirements ofWIA section 111 and this section.

(b) The membership of the StateBoard must meet the requirements ofWIA section 111(b). The State Boardmust contain two or more membersrepresenting the categories described inWIA section 111(b)(1)(C)(iii)–(v), andspecial consideration must be given tochief executive officers of communitycolleges and community basedorganizations in the selection ofmembers representing the entitiesidentified in WIA section111(b)(1)(C)(v).

(c) The Governor may appoint anyother representatives or agency officials,

such as agency officials responsible foreconomic development, child supportand juvenile justice programs in theState.

(d) Members who representorganizations, agencies or other entitiesmust be individuals with optimumpolicy making authority within theentities they represent.

(e) A majority of members of the StateBoard must be representatives ofbusiness. Members who representbusiness must be individuals who areowners, chief executive officers, chiefoperating officers, or other individualswith optimum policy making or hiringauthority, including members of LocalBoards.

(f) The Governor must appoint thebusiness representatives from amongindividuals who are nominated by Statebusiness organizations and businesstrade associations. The Governor mustappoint the labor representatives fromamong individuals who are nominatedby State labor federations.

(g) The Governor must select achairperson of the State Board from thebusiness representatives on the board.

(h) The Governor may establish termsof appointment or other conditionsgoverning appointment or membershipon the State Board.

(i) For the programs and activitiescarried out by One-Stop partners, asdescribed in WIA section 121(b) and 20CFR 662.200 and 662.210, the StateBoard must include:

(1) The lead State agency officialswith responsibility for such program, or

(2) In any case in which no lead Stateagency official has responsibility forsuch a program service, a representativein the State with expertise relating tosuch program, service or activity.

(3) If the director of the designatedState unit, as defined in section 7(8)(B)of the Rehabilitation Act, does notrepresent the State VocationalRehabilitation Services program (VRprogram) on the State Board, then theState must describe in its State planhow the member of the State Boardrepresenting the VR program willeffectively represent the interests,needs, and priorities of the VR programand how the employment needs ofindividuals with disabilities in the Statewill be addressed.

(j) An individual may be appointed asa representative of more than one entityif the individual meets all the criteriafor representation, including the criteriadescribed in paragraphs (d) through (f)of this section, for each entity. (WIA sec.111)

§ 661.203 What is meant by the terms‘‘optimum policy making authority’’ and‘‘expertise relating to [a] program, serviceor activity’’?

For purposes of selectingrepresentatives to State and localworkforce investment boards:

(a) A representative with ‘‘optimumpolicy making authority’’ is anindividual who can reasonably beexpected to speak affirmatively onbehalf of the entity he or she representsand to commit that entity to a chosencourse of action.

(b) A representative with ‘‘expertiserelating to [a] program, service oractivity’’ includes a person who is anofficial with a One-stop partner programand a person with documentedexpertise relating to the One-stoppartner program.

§ 661.205 What is the role of the StateBoard?

The State Board must assist theGovernor in the:

(a) Development of the State Plan;(b) Development and continuous

improvement of a Statewide system ofactivities that are funded under subtitleB of title I of WIA, or carried outthrough the One-Stop delivery system,including—

(1) Development of linkages in orderto assure coordination andnonduplication among the programsand activities carried out by One-Stoppartners, including, as necessary,addressing any impasse situations in thedevelopment of the local Memorandumof Understanding; and

(2) Review of local plans;(c) Commenting at least once annually

on the measures taken under section113(b)(14) of the Carl D. PerkinsVocational and Technical EducationAct;

(d) Designation of local workforceinvestment areas,

(e) Development of allocationformulas for the distribution of funds foradult employment and trainingactivities and youth activities to localareas, as permitted under WIA sections128(b)(3)(B) and 133(b)(3)(B);

(f) Development and continuousimprovement of comprehensive Stateperformance measures, including Stateadjusted levels of performance, to assessthe effectiveness of the workforceinvestment activities in the State, asrequired under WIA section 136(b);

(g) Preparation of the annual report tothe Secretary described in WIA section136(d);

(h) Development of the Statewideemployment statistics system describedin section 15(e) of the Wagner-PeyserAct; and



(i) Development of an application foran incentive grant under WIA section503. (WIA sec. 111(d).)

§ 661.207 How does the State Board meetits requirement to conduct business in anopen manner under the ‘‘sunshineprovision’’ of WIA section 111(g)?

The State Board must conduct itsbusiness in an open manner as requiredby WIA section 111(g), by makingavailable to the public, on a regularbasis through open meetings,information about the activities of theState Board. This includes informationabout the State Plan prior to submissionof the plan; information aboutmembership; the development ofsignificant policies, interpretations,guidelines and definitions; and, onrequest, minutes of formal meetings ofthe State Board.

§ 661.210 Under what circumstances maythe Governor select an alternative entity inplace of the State Workforce InvestmentBoard?

(a) The State may use any State entitythat meets the requirements of WIAsection 111(e) to perform the functionsof the State Board.

(b) If the State uses an alternativeentity, the State workforce investmentplan must demonstrate that thealternative entity meets all three of therequirements of WIA section 111(e).Section 111(e) requires that such entity:

(1) Was in existence on December 31,1997;

(2)(i) Was established under section122 (relating to State Job TrainingCoordinating Councils) or title VII(relating to State Human ResourceInvestment Councils) of the Job TrainingPartnership Act (29 U.S.C.1501 et seq.),as in effect on December 31, 1997, or

(ii) Is substantially similar to the StateBoard described in WIA section 111(a),(b), and (c) and § 661.200; and

(3) Includes, at a minimum, two ormore representatives of business in theState and two or more representatives oflabor organizations in the State.

(c) If the alternative entity does notprovide for representative membershipof each of the categories of requiredState Board membership under WIAsection 111(b), the State Plan mustexplain the manner in which the Statewill ensure an ongoing role for anyunrepresented membership group in theworkforce investment system. The StateBoard may maintain an ongoing role foran unrepresented membership group,including entities carrying out One-stoppartner programs, by means such asregularly scheduled consultations withentities within the unrepresentedmembership groups, by providing anopportunity for input into the State Plan

or other policy development byunrepresented membership groups, orby establishing an advisory committeeof unrepresented membership groups.

(d) If the membership structure of thealternative entity is significantlychanged after December 31, 1997, theentity will no longer be eligible toperform the functions of the StateBoard. In such case, the Governor mustestablish a new State Board whichmeets all of the criteria of WIA section111(b).

(e) A significant change in themembership structure includes anysignificant change in the organization ofthe alternative entity or in the categoriesof entities represented on the alternativeentity which requires a change to thealternative entity’s charter or a similardocument that defines the formalorganization of the alternative entity,regardless of whether the requiredchange to the document has or has notbeen made. A significant change in themembership structure is considered tohave occurred when members are addedto represent groups not previouslyrepresented on the entity. A significantchange in the membership structure isnot considered to have occurred whenadditional members are added to anexisting membership category, whennon-voting members are added, or whena member is added to fill a vacancycreated in an existing membershipcategory.

(f) In 20 CFR parts 660 through 671,all references to the State Board alsoapply to an alternative entity used by aState.

§ 661.220 What are the requirements forthe submission of the State WorkforceInvestment Plan?

(a) The Governor of each State mustsubmit a State Workforce InvestmentPlan (State Plan) in order to be eligibleto receive funding under title I of WIAand the Wagner-Peyser Act. The StatePlan must outline the State’s five yearstrategy for the workforce investmentsystem.

(b) The State Plan must be submittedin accordance with planning guidelinesissued by the Secretary of Labor. Theplanning guidelines set forth theinformation necessary to document theState’s vision, goals, strategies, policiesand measures for the workforceinvestment system (that were arrived atthrough the collaboration of theGovernor, chief elected officials,business and other parties), as well asthe information required to demonstratecompliance with WIA, and theinformation detailed by WIA and theWIA regulations, including 29 CFR part37, and the Wagner-Peyser Act and the

Wagner-Peyser regulations at 20 CFRpart 652:

(c) The State Plan must contain adescription of the State’s performanceaccountability system, and the Stateperformance measures in accordancewith the requirements of WIA section136 and 20 CFR part 666.

(d) The State must provide anopportunity for public comment on andinput into the development of the StatePlan prior to its submission. Theopportunity for public comment mustinclude an opportunity for comment byrepresentatives of business,representatives of labor organizations,and chief elected official(s) and must beconsistent with the requirement, at WIAsection 111(g), that the State Boardmakes information regarding the StatePlan and other State Board activitiesavailable to the public through regularopen meetings. The State Plan mustdescribe the State’s process and timelinefor ensuring a meaningful opportunityfor public comment.

(e) The Secretary reviews completedplans and must approve all plans withinninety days of their submission, unlessthe Secretary determines in writing that:

(1) The plan is inconsistent with theprovisions of title I of WIA or the WIAregulations, including 29 CFR part 37.For example, a finding of inconsistencywould be made if the Secretary and theGovernor have not reached agreementon the adjusted levels of performanceunder WIA section 136(b)(3)(A), or thereis not an effective strategy in place toensure development of a fullyoperational One-Stop delivery system inthe State; or

(2) The portion of the plan describingthe detailed Wagner-Peyser plan doesnot satisfy the criteria for approval ofsuch plans as provided in section 8(d)of the Wagner-Peyser Act or the Wagner-Peyser regulations at 20 CFR part 652.

(3) A plan which is incomplete, orwhich does not contain sufficientinformation to determine whether it isconsistent with the statutory orregulatory requirements of title I of WIAor of section 8(d) of the Wagner-PeyserAct, will be considered to beinconsistent with those requirements.

§ 661.230 What are the requirements formodification of the State WorkforceInvestment Plan?

(a) The State may submit amodification of its workforceinvestment plan at any time during thefive-year life of the plan.

(b) Modifications are required when:(1) Changes in Federal or State law or

policy substantially change theassumptions upon which the plan isbased.



(2) There are changes in the Statewidevision, strategies, policies, performanceindicators, the methodology used todetermine local allocation of funds,reorganizations which change theworking relationship with systememployees, changes in organizationalresponsibilities, changes to themembership structure of the State Boardor alternative entity and similarsubstantial changes to the State’sworkforce investment system.

(3) The State has failed to meetperformance goals, and must adjustservice strategies.

(c) Modifications are required inaccordance with the Wagner-Peyserprovisions at 20 CFR 652.212.

(d) Modifications to the State Plan aresubject to the same public review andcomment requirements that apply to thedevelopment of the original State Plan.

(e) State Plan modifications will beapproved by the Secretary based on theapproval standard applicable to theoriginal State Plan under § 661.220(e).

§ 661.240 How do the unified planningrequirements apply to the five-yearstrategic WIA and Wagner-Peyser plan andto other Department of Labor plans?

(a) A State may submit to theSecretary a unified plan for any of theprograms or activities described in WIAsection 501(b)(2). This includes thefollowing DOL programs and activities:

(1) The five-year strategic WIA andWagner-Peyser plan;

(2) Trade adjustment assistanceactivities and NAFTA–TAA;

(3) Veterans’ programs under 38U.S.C. Chapter 41;

(4) Programs authorized under Stateunemployment compensation laws;

(5) Welfare-to-Work (WtW) programs;and

(6) Senior Community ServiceEmployment Programs under title V ofthe Older Americans Act.

(b) For purposes of paragraph (a) ofthis section:

(1) A State may submit, as part of theunified plan, any plan, application formor any other similar document, that isrequired as a condition for the approvalof Federal funding under the applicableprogram. These plans include suchthings as the WIA plan, or the WtWplan. They do not include jointlyexecuted funding instruments, such asgrant agreements, or Governor/SecretaryAgreements or items such as correctiveactions plans.

(2) A state may submit a unified planmeeting the requirements of theInteragency guidance entitled StateUnified Plan, Planning Guidance forState Unified Plans Under Section 501of the Workforce Investment Act of 1998,

in lieu of completing the individualState planning guidelines of theprograms covered by the unified plan.

(c) A State which submits a unifiedplan covering an activity or programdescribed in subsection 501(b) of WIAthat is approved under subsection501(d) of the Act will not be required tosubmit any other plan or application inorder to receive Federal funds to carryout the activity or program.

(d) Each portion of a unified plansubmitted under paragraph (a) of thissection is subject to the particularrequirements of Federal law authorizingthe program. All grantees are stillsubject to such things as reporting andrecord-keeping requirements, correctiveaction plan requirements and othergenerally applicable requirements.

(e) A unified plan must contain theinformation required by WIA section501(c) and will be approved inaccordance with the requirements ofWIA section 501(d).

§ 661.250 What are the requirements fordesignation of local workforce investmentareas?

(a) The Governor must designate localworkforce investment areas in order forthe State to receive funding under titleI of WIA.

(b) The Governor must take intoconsideration the factors described inWIA section 116(a)(1)(B) in makingdesignations of local areas. Suchdesignation must be made inconsultation with the State Board, andafter consultation with chief electedofficials. The Governor must alsoconsider comments received throughthe public comment process describedin the State workforce investment planunder § 661.220(d).

(c) The Governor may approve arequest for designation as a workforceinvestment area from any unit of generallocal government, including acombination of such units, if the StateBoard determines that the area meetsthe requirements of WIA section116(a)(1)(B) and recommendsdesignation.

(d) The Governor of any State that wasa single service delivery area Stateunder the Job Training Partnership Actas of July 1, 1998, and only those States,may designate the State as a single localworkforce investment area State. (WIAsec.116.)

§ 661.260 What are the requirements forautomatic designation of workforceinvestment areas relating to units of localgovernment with a population of 500,000 ormore?

The requirements for automaticdesignation relating to units of localgovernment with a population of

500,000 or more and to ruralconcentrated employment programs arecontained in WIA section 116(a)(2). TheGovernor has authority to determine thesource of population data to use inmaking these designations.

§ 661.270 What are the requirements fortemporary and subsequent designation ofworkforce investment areas relating toareas that had been designated as servicedelivery areas under JTPA?

The requirements for temporary andsubsequent designation relating to areasthat had been designated as servicedelivery areas under JTPA are containedin WIA section 116(a)(3).

§ 661.280 What right does an entity haveto appeal the Governor’s decision rejectinga request for designation as a workforceinvestment area?

(a) A unit of local government (orcombination of units) or a ruralconcentrated employment programgrant recipient (as described at WIAsection 116(a)(2)(B), which hasrequested but has been denied itsrequest for designation as a workforceinvestment area under §§ 661.260through 661.270, may appeal thedecision to the State Board, inaccordance with appeal proceduresestablished in the State Plan.

(b) If a decision on the appeal is notrendered in a timely manner or if theappeal to the State Board does not resultin designation, the entity may requestreview by the Secretary of Labor, underthe procedures set forth at 20 CFR667.640(a).

(c) The Secretary may require that thearea be designated as a workforceinvestment area, if the Secretarydetermines that:

(1) The entity was not accordedprocedural rights under the Stateappeals process; or

(2) The area meets the automaticdesignation requirements at WIAsection 116(a)(2) or the temporary andsubsequent designation requirements atWIA section 116(a)(3), as appropriate.

§ 661.290 Under what circumstances mayStates require Local Boards to take part inregional planning activities?

(a) The State may require LocalBoards within a designated region (asdefined at 20 CFR 660.300) to:

(1) Participate in a regional planningprocess that results in regionalperformance measures for workforceinvestment activities under title I ofWIA. Regions that meet or exceed theregional performance measures mayreceive regional incentive grants;

(2) Share, where feasible, employmentand other types of information that willassist in improving the performance of



all local areas in the designated regionon local performance measures; and

(3) Coordinate the provision of WIAtitle I services, including supportiveservices such as transportation, acrossthe boundaries of local areas within thedesignated region.

(b) Two or more States may designatea labor market area, economicdevelopment region, or otherappropriate contiguous subarea of theStates as an interstate region. In suchcases, the States may jointly exercise theState’s functions described in thissection.

(c) Designation of intrastate regionsand interstate regions and theircorresponding performance measuresmust be described in the respectiveState Plan(s). For interstate regions, theroles of the respective Governors, StateBoards and Local Boards must bedescribed in the respective State Plans.

(d) Unless agreed to by all affectedchief elected officials and the Governor,these regional planning activities maynot substitute for or replace therequirements applicable to each localarea under other provisions of the WIA.(WIA sec. 116(a).)

Subpart C—Local GovernanceProvisions

§ 661.300 What is the Local WorkforceInvestment Board?

(a) The Local Workforce InvestmentBoard (Local Board) is appointed by thechief elected official in each local areain accordance with State criteriaestablished under WIA section 117(b),and is certified by the Governor everytwo years, in accordance with WIAsection 117(c)(2).

(b) In partnership with the chiefelected official(s), the Local Board setspolicy for the portion of the Statewideworkforce investment system within thelocal area.

(c) The Local Board and the chiefelected official(s) may enter into anagreement that describes the respectiveroles and responsibilities of the parties.

(d) The Local Board, in partnershipwith the chief elected official, developsthe local workforce investment plan andperforms the functions described inWIA section 117(d). (WIA sec.117 (d).)

(e) If a local area includes more thanone unit of general local government inaccordance with WIA section 117(c)(1)(B), the chief elected officials ofsuch units may execute an agreement todescribe their responsibilities forcarrying out the roles andresponsibilities. If, after a reasonableeffort, the chief elected officials areunable to reach agreement, the Governormay appoint the members of the local

board from individuals nominated orrecommended as specified in WIAsection 117(b).

(f) If the State Plan indicates that theState will be treated as a local areaunder WIA title I, the Governor maydesignate the State Board to carry outany of the roles of the Local Board.

§ 661.305 What is the role of the LocalWorkforce Investment Board?

(a) WIA section 117(d) specifies thatthe Local Board is responsible for:

(1) Developing the five-year localworkforce investment plan (Local Plan)and conducting oversight of the One-Stop system, youth activities andemployment and training activitiesunder title I of WIA, in partnership withthe chief elected official;

(2) Selecting One-Stop operators withthe agreement of the chief electedofficial;

(3) Selecting eligible youth serviceproviders based on therecommendations of the youth council,and identifying eligible providers ofadult and dislocated worker intensiveservices and training services, andmaintaining a list of eligible providerswith performance and cost information,as required in 20 CFR part 663, subpartE;

(4) Developing a budget for thepurpose of carrying out the duties of theLocal Board, subject to the approval ofthe chief elected official;

(5) Negotiating and reachingagreement on local performancemeasures with the chief elected officialand the Governor;

(6) Assisting the Governor indeveloping the Statewide employmentstatistics system under the Wagner-Peyser Act;

(7) Coordinating workforceinvestment activities with economicdevelopment strategies and developingemployer linkages; and

(8) Promoting private sectorinvolvement in the Statewide workforceinvestment system through effectiveconnecting, brokering, and coachingactivities through intermediaries such asthe One-Stop operator in the local areaor through other organizations, to assistemployers in meeting hiring needs.

(b) The Local Board, in cooperationwith the chief elected official, appointsa youth council as a subgroup of theLocal Board and coordinates workforceand youth plans and activities with theyouth council, in accordance with WIAsection 117(h) and § 661.335.

(c) Local Boards which are part of aState designated region for regionalplanning must carry out the regionalplanning responsibilities required bythe State in accordance with WIA

section 116(c) and § 661.290. (WIA sec.117.)

§ 661.307 How does the Local Board meetits requirement to conduct business in anopen manner under the ‘‘sunshineprovision’’ of WIA section 117(e)?

The Local Board must conduct itsbusiness in an open manner as requiredby WIA section 117(e), by makingavailable to the public, on a regularbasis through open meetings,information about the activities of theLocal Board. This includes informationabout the Local Plan prior to submissionof the plan; information aboutmembership; the development ofsignificant policies, interpretations,guidelines and definitions; and, onrequest, minutes of formal meetings ofthe Local Board.

§ 661.310 Under what limited conditionsmay a Local Board directly be a provider ofcore services, intensive services, ortraining services, or act as a One-StopOperator?

(a) A Local Board may not directlyprovide core services, or intensiveservices, or be designated or certified asa One-Stop operator, unless agreed to bythe chief elected official and theGovernor.

(b) A Local Board is prohibited fromproviding training services, unless theGovernor grants a waiver in accordancewith the provisions in WIA section117(f)(1). The waiver shall apply for notmore than one year. The waiver may berenewed for additional periods, but fornot more than one additional year at atime.

(c) The restrictions on the provision ofcore, intensive, and training services bythe Local Board, and designation orcertification as One-Stop operator, alsoapply to staff of the Local Board. (WIAsec. 117(f)(1) and (f)(2).)

§ 661.315 Who are the required membersof the Local Workforce Investment Boards?

(a) The membership of Local Boardmust be selected in accordance withcriteria established under WIA section117(b)(1) and must meet therequirements of WIA section 117(b)(2).The Local Board must contain two ormore members representing thecategories described in WIA section117(b)(2)(A)(ii)—(v), and specialconsideration must be given to theentities identified in WIA section117(b)(2)(A)(ii), (iv) and (v) in theselection of members representing thosecategories. The Local Board mustcontain at least one memberrepresenting each One-Stop partner.

(b) The membership of Local Boardsmay include individuals orrepresentatives of other appropriate



entities, including entities representingindividuals with multiple barriers toemployment and other specialpopulations, as determined by the chiefelected official.

(c) Members who representorganizations, agencies or other entitiesmust be individuals with optimumpolicy making authority within theentities they represent.

(d) A majority of the members of theLocal Board must be representatives ofbusiness in the local area. Membersrepresenting business must beindividuals who are owners, chiefexecutive officers, chief operatingofficers, or other individuals withoptimum policymaking or hiringauthority. Business representativesserving on Local Boards may also serveon the State Board.

(e) Chief elected officials mustappoint the business representativesfrom among individuals who arenominated by local businessorganizations and business tradeassociations. Chief elected officials mustappoint the labor representatives fromamong individuals who are nominatedby local labor federations (or, for a localarea in which no employees arerepresented by such organizations, otherrepresentatives of employees). (WIA sec.117(b).)

(f) An individual may be appointed asa representative of more than one entityif the individual meets all the criteriafor representation, including the criteriadescribed in paragraphs (c) through (e)of this section, for each entity.

§ 661.317 Who may be selected torepresent a particular One-Stop partnerprogram on the Local Board when there ismore than one partner program entity in thelocal area?

When there is more than one grantrecipient, administrative entity ororganization responsible foradministration of funds of a particularOne-stop partner program in the localarea, the chief elected official mayappoint one or more members torepresent all of those particular partnerprogram entities. In making suchappointments, the local elected officialmay solicit nominations from thepartner program entities.

§ 661.320 Who must chair a Local Board?The Local Board must elect a

chairperson from among the businessrepresentatives on the board. (WIA sec.117(b)(5).)

§ 661.325 What criteria will be used toestablish the membership of the LocalBoard?

The Local Board is appointed by thechief elected official(s) in the local area

in accordance with State criteriaestablished under WIA section 117(b),and is certified by the Governor everytwo years, in accordance with WIAsection 117(c)(2). The criteria forcertification must be described in theState Plan. (WIA sec. 117(c).)

§ 661.330 Under what circumstances maythe State use an alternative entity as theLocal Workforce Investment Board?

(a) The State may use any local entitythat meets the requirements of WIAsection 117(i) to perform the functionsof the Local Board. WIA section 117(i)requires that such entity:

(1) Was established to serve the localarea (or the service delivery area thatmost closely corresponds to the localarea);

(2) Was in existence on December 31,1997;

(3)(i) Is a Private Industry Councilestablished under section 102 of the JobTraining Partnership Act, as in effect onDecember 31, 1997; or

(ii) Is substantially similar to theLocal Board described in WIA section117 (a), (b), and (c) and (h)(1) and (2);and,

(4) Includes, at a minimum, two ormore representatives of business in thelocal area and two or morerepresentatives of labor organizationsnominated by local labor federations oremployees in the local area.

(b)(1) If the Governor certifies analternative entity to perform thefunctions of the Local Board; the Stateworkforce investment plan mustdemonstrate that the alternative entitymeets the requirements of WIA section117(i), set forth in paragraph (a) of thissection.

(2) If the alternative entity does notprovide for representative membershipof each of the categories of requiredLocal Board membership under WIAsection 117(b), including all of the One-stop partner programs, the localworkforce investment plan must explainthe manner in which the Local Boardwill ensure an ongoing role for theunrepresented membership group in thelocal workforce investment system.

(3) The Local Board may provide anongoing role for an unrepresentedmembership group, including entitiescarrying out One-stop partner programs,by means such as regularly scheduledconsultations with entities within theunrepresented membership groups, byproviding an opportunity for input intothe local plan or other policydevelopment by unrepresentedmembership groups, or by establishingan advisory committee of unrepresentedmembership groups. The Local Boardmust enter into good faith negotiations

over the terms of the MOU with allentities carrying out One-stop partnerprograms, including programs notrepresented on the alternative entity.

(c) If the membership structure of analternative entity is significantlychanged after December 31, 1997, theentity will no longer be eligible toperform the functions of the LocalBoard. In such case, the chief electedofficial(s) must establish a new LocalBoard which meets all of the criteria ofWIA section 117(a), (b), and (c) and(h)(1) and (2).

(d) A significant change in themembership structure includes anysignificant change in the organization ofthe alternative entity or in the categoriesof entities represented on the alternativeentity which requires a change to thealternative entity’s charter or a similardocument that defines the formalorganization of the alternative entity,regardless of whether the requiredchange to the document has or has notbeen made. A significant change in themembership structure is considered tohave occurred when members are addedto represent groups not previouslyrepresented on the entity. A significantchange in the membership structure isnot considered to have occurred whenadditional members are added to anexisting membership category, whennon-voting members (including a YouthCouncil) are added, or when a memberis added to fill a vacancy created in anexisting membership category.

(e) In 20 CFR parts 660 through 671,all references to the Local Board must bedeemed to also apply to an alternativeentity used by a local area. (WIA sec.117(i).)

§ 661.335 What is a youth council, andwhat is its relationship to the Local Board?

(a) A youth council must beestablished as a subgroup within eachLocal Board.

(b) The membership of each youthcouncil must include:

(1) Members of the Local Board, suchas educators, which may include specialeducation personnel, employers, andrepresentatives of human serviceagencies, who have special interest orexpertise in youth policy;

(2) Members who represent serviceagencies, such as juvenile justice andlocal law enforcement agencies;

(3) Members who represent localpublic housing authorities;

(4) Parents of eligible youth seekingassistance under subtitle B of title I ofWIA;

(5) Individuals, including formerparticipants, and members whorepresent organizations, that have



experience relating to youth activities;and

(6) Members who represent the JobCorps, if a Job Corps Center is locatedin the local area represented by thecouncil.

(c) Youth councils may include otherindividuals, who the chair of the LocalBoard, in cooperation with the chiefelected official, determines to beappropriate.

(d) Members of the youth council whoare not members of the Local Boardmust be voting members of the youthcouncil and nonvoting members of theLocal Board.

§ 661.340 What are the responsibilities ofthe youth council?

The youth council is responsible for:(a) Coordinating youth activities in a

local area;(b) Developing portions of the local

plan related to eligible youth, asdetermined by the chairperson of theLocal Board;

(c) Recommending eligible youthservice providers in accordance withWIA section 123, subject to the approvalof the Local Board;

(d) Conducting oversight with respectto eligible providers of youth activitiesin the local area, subject to the approvalof the Local Board; and

(e) Carrying out other duties, asauthorized by the chairperson of theLocal Board, such as establishinglinkages with educational agencies andother youth entities.

§ 661.345 What are the requirements forthe submission of the local workforceinvestment plan?

(a) WIA section 118 requires that eachLocal Board, in partnership with theappropriate chief elected officials,develops and submits a comprehensivefive-year plan to the Governor whichidentifies and describes certain policies,procedures and local activities that arecarried out in the local area, and that isconsistent with the State Plan.

(b) The Local Board must provide anopportunity for public comment on andinput into the development of the localworkforce investment plan prior to itssubmission, and the opportunity forpublic comment on the local plan must:

(1) Make copies of the proposed localplan available to the public (throughsuch means as public hearings and localnews media);

(2) Include an opportunity forcomment by members of the LocalBoard and members of the public,including representatives of businessand labor organizations;

(3) Provide at least a thirty (30) dayperiod for comment, beginning on the

date on which the proposed plan ismade available, prior to its submissionto the Governor; and

(4) Be consistent with therequirement, in WIA section 117(e), thatthe Local Board make information aboutthe plan available to the public on aregular basis through open meetings.

(c) The Local Board must submit anycomments that express disagreementwith the plan to the Governor alongwith the plan.

§ 661.350 What are the contents of thelocal workforce investment plan?

(a) The local workforce investmentplan must meet the requirements ofWIA section 118(b). The plan mustinclude:

(1) An identification of the workforceinvestment needs of businesses, job-seekers, and workers in the local area;

(2) An identification of current andprojected employment opportunitiesand job skills necessary to obtain suchopportunities;

(3) A description of the One-Stopdelivery system to be established ordesignated in the local area, including:

(i) How the Local Board will ensurecontinuous improvement of eligibleproviders of services and ensure thatsuch providers meet the employmentneeds of local employers andparticipants; and

(ii) A copy of the localMemorandum(s) of Understandingbetween the Local Board and each of theOne-Stop partners concerning theoperation of the local One-Stop deliverysystem;

(4) A description of the local levels ofperformance negotiated with theGovernor and the chief electedofficial(s) to be used by the Local Boardfor measuring the performance of thelocal fiscal agent (where appropriate),eligible providers, and the local One-Stop delivery system;

(5) A description and assessment ofthe type and availability of adult anddislocated worker employment andtraining activities in the local area,including a description of the local ITAsystem and the procedures for ensuringthat exceptions to the use of ITA’s, ifany, are justified under WIA section134(d)(4)(G)(ii) and 20 CFR 663.430;

(6) A description of how the LocalBoard will coordinate local activitieswith Statewide rapid responseactivities;

(7) A description and assessment ofthe type and availability of youthactivities in the local area, including anidentification of successful providers ofsuch activities;

(8) A description of the process usedby the Local Board to provide

opportunity for public comment,including comment by representativesof business and labor organizations, andinput into the development of the localplan, prior to the submission of theplan;

(9) An identification of the fiscalagent, or entity responsible for thedisbursal of grant funds;

(10) A description of the competitiveprocess to be used to award grants andcontracts for activities carried out underthis subtitle I of WIA, including theprocess to be used to procure trainingservices that are made as exceptions tothe Individual Training Account process(WIA section 134(d)(4)(G)),

(11) A description of the criteria to beused by the Governor and the LocalBoard, under 20 CFR 663.600, todetermine whether funds allocated to alocal area for adult employment andtraining activities under WIA sections133(b)(2)(A) or (3) are limited, and theprocess by which any priority will beapplied by the One-Stop operator;

(12) In cases where an alternate entityfunctions as the Local Board, theinformation required at § 661.330(b),and

(13) Such other information as theGovernor may require.

(b) The Governor must reviewcompleted plans and must approve allsuch plans within ninety days of theirsubmission, unless the Governordetermines in writing that:

(1) There are deficiencies identified inlocal workforce investment activitiescarried out under this subtitle that havenot been sufficiently addressed; or

(2) The plan does not comply withtitle I of WIA and the WIA regulations,including the required consultations,the public comment provisions, and thenondiscrimination requirements of 29CFR part 37.

(c) In cases where the State is a singlelocal area:

(1) The Secretary performs the rolesassigned to the Governor as they relateto local planning activities.

(2) The Secretary issues planningguidance for such States.

(3) The requirements found in WIAand in the WIA regulations forconsultation with chief elected officialsapply to the development of State andlocal plans and to the development andoperation of the One-Stop deliverysystem.

(d) During program year 2000, if alocal plan does not contain all of theelements described in paragraph (a) ofthis section, the Governor may approvea local plan on a transitional basis. Atransitional approval under thisparagraph is considered to be a writtendetermination that the local plan is not



approved under paragraph (b) of thissection.

§ 661.355 When must a local plan bemodified?

The Governor must establishprocedures governing the modificationof local plans. Situations in whichmodifications may be required by theGovernor include significant changes inlocal economic conditions, changes inthe financing available to support WIAtitle I and partner-provided WIAservices, changes to the Local Boardstructure, or a need to revise strategiesto meet performance goals.

Subpart D—Waivers and Work-FlexWaivers

§ 661.400 What is the purpose of theGeneral Statutory and Regulatory WaiverAuthority provided at section 189(i)(4) of theWorkforce Investment Act?

(a) The purpose of the generalstatutory and regulatory waiverauthority is to provide flexibility toStates and local areas and enhance theirability to improve the statewideworkforce investment system.

(b) A waiver may be requested toaddress impediments to theimplementation of a strategic plan,including the continuous improvementstrategy, consistent with the key reformprinciples of WIA. These key reformprinciples include:

(1) Streamlining services andinformation to participants through aOne-Stop delivery system;

(2) Empowering individuals to obtainneeded services and information toenhance their employmentopportunities;

(3) Ensuring universal access to coreemployment-related services;

(4) Increasing accountability of States,localities and training providers forperformance outcomes;

(5) Establishing a stronger role forLocal Boards and the private sector;

(6) Providing increased State andlocal flexibility to implement innovativeand comprehensive workforceinvestment systems; and

(7) Improving youth programs throughservices which emphasize academic andoccupational learning.

§ 661.410 What provisions of WIA and theWagner-Peyser Act may be waived, andwhat provisions may not be waived?

(a) The Secretary may waive any ofthe statutory or regulatory requirementsof subtitles B and E of title I of WIA,except for requirements relating to:

(1) Wage and labor standards;(2) Non-displacement protections;(3) Worker rights;(4) Participation and protection of

workers and participants;

(5) Grievance procedures and judicialreview;

(6) Nondiscrimination;(7) Allocation of funds to local areas;(8) Eligibility of providers or

participants;(9) The establishment and functions

of local areas and local boards;(10) Procedures for review and

approval of State and Local plans; and(b) The Secretary may waive any of

the statutory or regulatory requirementsof sections 8 through 10 of the Wagner-Peyser Act (29 U.S.C. 49g–49i) exceptfor requirements relating to:

(1) The provision of services tounemployment insurance claimants andveterans; and

(2) Universal access to the basic laborexchange services without cost to jobseekers.

(c) The Secretary does not intend towaive any of the statutory or regulatoryprovisions essential to the key reformprinciples embodied in the WorkforceInvestment Act, described in § 661.400,except in extremely unusualcircumstances where the provision canbe demonstrated as impeding reform.(WIA sec. 189(i).)

§ 661.420 Under what conditions may aGovernor request, and the Secretaryapprove, a general waiver of statutory orregulatory requirements under WIA section189(i)(4)?

(a) A Governor may request a generalwaiver in consultation with appropriatechief elected officials:

(1) By submitting a waiver plan whichmay accompany the State’s WIA 5-yearstrategic Plan; or

(2) After a State’s WIA Plan isapproved, by directly submitting awaiver plan.

(b) A Governor’s waiver request mayseek waivers for the entire State or forone or more local areas.

(c) A Governor requesting a generalwaiver must submit to the Secretary aplan to improve the Statewideworkforce investment system that:

(1) Identifies the statutory orregulatory requirements for which awaiver is requested and the goals thatthe State or local area, as appropriate,intends to achieve as a result of thewaiver and how those goals relate to theStrategic Plan goals;

(2) Describes the actions that the Stateor local area, as appropriate, hasundertaken to remove State or localstatutory or regulatory barriers;

(3) Describes the goals of the waiverand the expected programmaticoutcomes if the request is granted;

(4) Describes the individuals affectedby the waiver; and

(5) Describes the processes used to:

(i) Monitor the progress inimplementing the waiver;

(ii) Provide notice to any Local Boardaffected by the waiver;

(iii) Provide any Local Board affectedby the waiver an opportunity tocomment on the request; and

(iv) Ensure meaningful publiccomment, including comment bybusiness and organized labor, on thewaiver.

(d) The Secretary issues a decision ona waiver request within 90 days after thereceipt of the original waiver request.

(e) The Secretary will approve awaiver request if and only to the extentthat:

(1) The Secretary determines that therequirements for which a waiver isrequested impede the ability of eitherthe State or local area to implement theState’s plan to improve the Statewideworkforce investment system;

(2) The Secretary determines that thewaiver plan meets all of therequirements of WIA section 189(i)(4)and §§ 661.400 through 661.420; and

(3) The State has executed aMemorandum of Understanding withthe Secretary requiring the State tomeet, or ensure that the local areameets, agreed-upon outcomes and toimplement other appropriate measuresto ensure accountability.

(f) The Secretary will issue guidelinesunder which the States may requestgeneral waivers of WIA and Wagner-Peyser requirements. (WIA sec. 189(i).)

§ 661.430 Under what conditions may theGovernor submit a Workforce FlexibilityPlan?

(a) A State may submit to theSecretary, and the Secretary mayapprove, a workforce flexibility (work-flex) plan under which the State isauthorized to waive, in accordance withthe plan:

(1) Any of the statutory or regulatoryrequirements under title I of WIAapplicable to local areas, if the local arearequests the waiver in a waiverapplication, except for:

(i) Requirements relating to the basicpurposes of title I of WIA;

(ii) Wage and labor standards;(iii) Grievance procedures and

judicial review;(iv) Nondiscrimination;(v) Eligibility of participants;(vi) Allocation of funds to local areas;(vii) Establishment and functions of

local areas and local boards;(viii) Review and approval of local

plans;(ix) Worker rights, participation, and

protection; and(x) Any of the statutory provisions

essential to the key reform principles



embodied in the Workforce InvestmentAct, described in § 661.400.

(2) Any of the statutory or regulatoryrequirements applicable to the Stateunder section 8 through 10 of theWagner-Peyser Act (29 U.S.C. 49g–49i),except for requirements relating to:

(i) The provision of services tounemployment insurance claimants andveterans; and

(ii) Universal access to basic laborexchange services without cost to jobseekers; and

(3) Any of the statutory or regulatoryrequirements under the OlderAmericans Act of 1965 (OAA) (42 U.S.C.3001 et seq.), applicable to Stateagencies on aging with respect toactivities carried out using fundsallotted under OAA section 506(a)(3)(42 U.S.C. 3056d(a)(3)), except forrequirements relating to:

(i) The basic purposes of OAA;(ii) Wage and labor standards;(iii) Eligibility of participants in the

activities; and(iv) Standards for agreements.(b) A State’s workforce flexibility plan

may accompany the State’s five-yearStrategic Plan or may be submittedseparately. If it is submitted separately,the workforce flexibility plan mustidentify related provisions in the State’sfive-year Strategic Plan.

(c) A workforce flexibility plansubmitted under paragraph (a) of thissection must include descriptions of:

(1) The process by which local areasin the State may submit and obtain Stateapproval of applications for waivers;

(2) The statutory and regulatoryrequirements of title I of WIA that arelikely to be waived by the State underthe workforce flexibility plan;

(3) The statutory and regulatoryrequirements of sections 8 through 10 ofthe Wagner-Peyser Act that areproposed for waiver, if any;

(4) The statutory and regulatoryrequirements of the Older AmericansAct of 1965 that are proposed forwaiver, if any;

(5) The outcomes to be achieved bythe waivers described in paragraphs(c)(1) to (4) of this section including,where appropriate, revisions to adjustedlevels of performance included in theState or local plan under title I of WIA;and

(6) The measures to be taken to ensureappropriate accountability for Federalfunds in connection with the waivers.

(d) The Secretary may approve aworkforce flexibility plan for a period ofup to five years.

(e) Before submitting a workforceflexibility plan to the Secretary forapproval, the State must provideadequate notice and a reasonable

opportunity for comment on theproposed waiver requests under theworkforce flexibility plan to allinterested parties and to the generalpublic.

(f) The Secretary will issue guidelinesunder which States may requestdesignation as a work-flex State.

§ 661.440 What limitations apply to theState’s Workforce Flexibility Plan authorityunder WIA?

(a)(1) Under work-flex waiverauthority a State must not waive theWIA, Wagner-Peyser or OlderAmericans Act requirements which areexcepted from the work-flex waiverauthority and described in § 661.430(a).

(2) Requests to waive statutory andregulatory requirements of title I of WIAapplicable at the State level may not begranted under work-flex waiverauthority granted to a State. Suchrequests may only be granted by theSecretary under the general waiverauthority described at §§ 661.410through 661.420.

(b) As required in § 661.430(c)(5),States must address the outcomes toresult from work-flex waivers as part ofits workforce flexibility plan. Onceapproved, a State’s work-flexdesignation is conditioned on the Statedemonstrating it has met the agreed-upon outcomes contained in itsworkforce flexibility plan.

PART 662—DESCRIPTION OF THEONE-STOP SYSTEM UNDER TITLE IOF THE WORKFORCE INVESTMENTACT

Subpart A—General Description of the One-Stop Delivery System

Sec.662.100 What is the One-Stop delivery

system?

Subpart B—One-Stop Partners and theResponsibilities of Partners

662.200 Who are the required One-Stoppartners?

662.210 What other entities may serve asOne-Stop partners?

662.220 What entity serves as the One-Stoppartner for a particular program in thelocal area?

662.230 What are the responsibilities of therequired One-Stop partners?

662.240 What are a program’s applicablecore services?

662.250 Where and to what extent mustrequired One-Stop partners make coreservices available?

662.260 What services, in addition to theapplicable core services, are to beprovided by One-Stop partners throughthe One-Stop delivery system?

662.270 How are the costs of providingservices through the One-Stop deliverysystem and the operating costs of thesystem to be funded?

662.280 Does title I require One-Stoppartners to use their funds forindividuals who are not eligible for thepartner’s program or for services that arenot authorized under the partner’sprogram?

Subpart C—Memorandum of Understandingfor the One-Stop Delivery System

662.300 What is the Memorandum ofUnderstanding (MOU)?

662.310 Is there a single MOU for the localarea or are there to be separate MOU’sbetween the Local Board and eachpartner?

Subpart D—One-Stop Operators

662.400 Who is the One-Stop operator?662.410 How is the One-Stop operator

selected?662.420 Under what conditions may the

Local Board be designated or certified asthe One-Stop operator?

662.430 Under what conditions may One-Stop operators designated to operate ina One-Stop delivery system establishedprior to the enactment of WIA bedesignated to continue to act as a One-Stop operator under WIA withoutmeeting the requirements of§ 662.410(b)?

Authority: Section 506(c), Pub. L. 105–220;20 U.S.C. 9276(c).

Subpart A—General Description of theOne-Stop Delivery System

§ 662.100 What is the One-Stop deliverysystem?

(a) In general, the One-Stop deliverysystem is a system under which entitiesresponsible for administering separateworkforce investment, educational, andother human resource programs andfunding streams (referred to as One-Stoppartners) collaborate to create aseamless system of service delivery thatwill enhance access to the programs’services and improve long-termemployment outcomes for individualsreceiving assistance.

(b) Title I of WIA assignsresponsibilities at the local, State andFederal level to ensure the creation andmaintenance of a One-Stop deliverysystem that enhances the range andquality of workforce developmentservices that are accessible toindividuals seeking assistance.

(c) The system must include at leastone comprehensive physical center ineach local area that must provide thecore services specified in WIA section134(d)(2), and must provide access toother programs and activities carried outby the One-Stop partners.

(d) While each local area must haveat least one comprehensive center (andmay have additional comprehensivecenters), WIA section 134(c) allows forarrangements to supplement the center.These arrangements may include:



(1) A network of affiliated sites thatcan provide one or more partners’programs, services and activities at eachsite;

(2) A network of One-Stop partnersthrough which each partner providesservices that are linked, physically ortechnologically, to an affiliated site thatassures individuals are providedinformation on the availability of coreservices in the local area; and

(3) Specialized centers that addressspecific needs, such as those ofdislocated workers.

(e) The design of the local area’s One-Stop delivery system, including thenumber of comprehensive centers andthe supplementary arrangements, mustbe described in the local plan and beconsistent with the Memorandum ofUnderstanding executed with the One-Stop partners.

Subpart B—One-Stop Partners and theResponsibilities of Partners

§ 662.200 Who are the required One-Stoppartners?

(a) WIA section 121(b)(1) identifiesthe entities that are required partners inthe local One-Stop systems.

(b) The required partners are theentities that are responsible foradministering the following programsand activities in the local area:

(1) Programs authorized under title Iof WIA, serving:

(i) Adults;(ii) Dislocated workers;(iii) Youth;(iv) Job Corps;(v) Native American programs;(vi) Migrant and seasonal farmworker

programs; and(vii) Veterans’ workforce programs;

(WIA sec. 121(b)(1)(B)(i));(2) Programs authorized under the

Wagner-Peyser Act (29 U.S.C. 49 etseq.); (WIA sec. 121(b)(1)(B)(ii));

(3) Adult education and literacyactivities authorized under title II ofWIA; (WIA sec. 121(b)(1)(B)(iii));

(4) Programs authorized under parts Aand B of title I of the Rehabilitation Act(29 U.S.C. 720 et seq.); (WIA sec.121(b)(1)(B)(iv));

(5) Welfare-to-work programsauthorized under sec. 403(a)(5) of theSocial Security Act (42 U.S.C. 603(a)(5)et seq.); (WIA sec. 121(b)(1)(B)(v));

(6) Senior community serviceemployment activities authorized undertitle V of the Older Americans Act of1965 (42 U.S.C. 3056 et seq.); (WIA sec.121(b)(1)(B)(vi));

(7) Postsecondary vocationaleducation activities under the Carl D.Perkins Vocational and AppliedTechnology Education Act (20 U.S.C.

2301 et seq.); (WIA sec.121(b)(1)(B)(vii));

(8) Trade Adjustment Assistance andNAFTA Transitional AdjustmentAssistance activities authorized underchapter 2 of title II of the Trade Act of1974 (19 U.S.C. 2271 et seq.); (WIA sec.121(b)(1)(B)(viii));

(9) Activities authorized underchapter 41 of title 38, U.S.C. (localveterans’ employment representativesand disabled veterans outreachprograms); (WIA sec. 121(b)(1)(B)(ix));

(10) Employment and trainingactivities carried out under theCommunity Services Block Grant (42U.S.C. 9901 et seq.); (WIA sec.121(b)(1)(B)(x));

(11) Employment and trainingactivities carried out by the Departmentof Housing and Urban Development;(WIA sec. 121(b)(1)(B)(xi)); and

(12) Programs authorized under Stateunemployment compensation laws (inaccordance with applicable Federallaw); (WIA sec. 121(b)(1)(B)(xii).)

§ 662.210 What other entities may serve asOne-Stop partners?

(a) WIA provides that other entitiesthat carry out a human resourceprogram, including Federal, State, orlocal programs and programs in theprivate sector may serve as additionalpartners in the One-Stop system if theLocal Board and chief elected official(s)approve the entity’s participation.

(b) Additional partners may include:(1) TANF programs authorized under

part A of title IV of the Social SecurityAct (42 U.S.C. 601 et seq.);

(2) Employment and trainingprograms authorized under section6(d)(4) of the Food Stamp Act of 1977(7 U.S.C. 2015(d)(4));

(3) Work programs authorized undersection 6(o) of the Food Stamp Act of1977 (7 U.S.C. 2015(o));

(4) Programs authorized under theNational and Community Service Act of1990 (42 U.S.C. 12501 et seq.); and

(5) Other appropriate Federal, State orlocal programs, including programsrelated to transportation and housingand programs in the private sector.(WIA sec. 121(b)(2).)

(c) The State may require that one ormore of the programs identified inparagraph (b) of this section be includedas a partner in all of the local One-Stopdelivery systems in the State.

§ 662.220 What entity serves as the One-Stop partner for a particular program in thelocal area?

(a) The ‘‘entity’’ that carries out theprogram and activities listed in§§ 662.200 and 662.210 and, therefore,serves as the One-Stop partner is the

grant recipient, administrative entity ororganization responsible foradministering the funds of the specifiedprogram in the local area. The term‘‘entity’’ does not include the serviceproviders that contract with or aresubrecipients of the local administrativeentity. For programs that do not includelocal administrative entities, theresponsible State Agency should be thepartner. Specific entities for particularprograms are identified in paragraph (b)of this section. If a program or activitylisted in § 662.200 is not carried out ina local area, the requirements relating toa required One-Stop partner are notapplicable to such program or activity inthat local One-Stop system.

(b)(1) For title II of WIA, the entitythat carries out the program for thepurposes of paragraph (a) is the Stateeligible entity. The State eligible entitymay designate an eligible provider, or aconsortium of eligible providers, as the‘‘entity’’ for this purpose;

(2) For title I, Part A, of theRehabilitation Act, the entity thatcarries out the program for the purposesof paragraph (a) of this section is thedesignated State agency or designatedunit specified under section 101(a)(2)that is primarily concerned withvocational rehabilitation, or vocationaland other rehabilitation, of individualswith disabilities; and

(3) Under WIA, the national programs,including Job Corps, the WIA Indianand Native American program, theMigrant and Seasonal Farmworkersprogram, and the Veterans’ WorkforceInvestment program, are required One-Stop partners. Local Boards mustinclude them in the One-Stop deliverysystem where they are present in theirlocal area. In local areas where thenational programs are not present,States and Local Boards should takesteps to ensure that customer groupsserved by these programs have access toservices through the One-Stop deliverysystem.

§ 662.230 What are the responsibilities ofthe required One-Stop partners?

All required partners must:(a) Make available to participants

through the One-Stop delivery systemthe core services that are applicable tothe partner’s programs; (WIA sec.121(b)(1)(A).)

(b) Use a portion of funds madeavailable to the partner’s program, to theextent not inconsistent with the Federallaw authorizing the partner’s program,to:

(1) Create and maintain the One-Stopdelivery system; and

(2) Provide core services; (WIA sec.134(d)(1)(B).)



(c) Enter into a memorandum ofunderstanding (MOU) with the LocalBoard relating to the operation of theOne-Stop system that meets therequirements of § 662.300, including adescription of services, how the cost ofthe identified services and operatingcosts of the system will be funded, andmethods for referrals (WIA sec. 121(c));

(d) Participate in the operation of theOne-Stop system consistent with theterms of the MOU and requirements ofauthorizing laws; (WIA sec.121(b)(1)(B).) and

(e) Provide representation on theLocal Workforce Investment Board.(WIA sec. 117(b)(2)(A)(vi).)

§ 662.240 What are a program’s applicablecore services?

(a) The core services applicable to anyOne-Stop partner program are thoseservices described in paragraph (b) ofthis section, that are authorized andprovided under the partner’s program.

(b) The core services identified insection 134(d)(2) of the WIA are:

(1) Determinations of whether theindividuals are eligible to receiveassistance under subtitle B of title I ofWIA;

(2) Outreach, intake (which mayinclude worker profiling), andorientation to the information and otherservices available through the One-Stopdelivery system;

(3) Initial assessment of skill levels,aptitudes, abilities, and supportiveservice needs;

(4) Job search and placementassistance, and where appropriate,career counseling;

(5) Provision of employment statisticsinformation, including the provision ofaccurate information relating to local,regional, and national labor marketareas, including—

(i) Job vacancy listings in such labormarket areas;

(ii) Information on job skills necessaryto obtain the listed jobs; and

(iii) Information relating to localoccupations in demand and the earningsand skill requirements for suchoccupations;

(6) Provision of program performanceinformation and program costinformation on:

(i) Eligible providers of trainingservices described in WIA section 122;

(ii) Eligible providers of youthactivities described in WIA section 123;

(iii) Providers of adult educationdescribed in title II;

(iv) Providers of postsecondaryvocational education activities andvocational education activities availableto school dropouts under the Carl D.Perkins Vocational and Applied

Technology Education Act (20 U.S.C.2301 et seq.); and

(v) Providers of vocationalrehabilitation program activitiesdescribed in title I of the RehabilitationAct of 1973 (29 U.S.C. 720 et seq.);

(7) Provision of information on howthe local area is performing on the localperformance measures and anyadditional performance informationwith respect to the One-Stop deliverysystem in the local area;

(8) Provision of accurate informationrelating to the availability of supportiveservices, including, at a minimum, childcare and transportation, available in thelocal area, and referral to such services,as appropriate;

(9) Provision of information regardingfiling claims for unemploymentcompensation;

(10) Assistance in establishingeligibility for—

(i) Welfare-to-work activitiesauthorized under section 403(a)(5) ofthe Social Security Act (42 U.S.C.603(a)(5)) available in the local area; and

(ii) Programs of financial aidassistance for training and educationprograms that are not funded under thisAct and are available in the local area;and

(11) Followup services, includingcounseling regarding the workplace, forparticipants in workforce investmentactivities authorized under subtitle (B)of title I of WIA who are placed inunsubsidized employment, for not lessthan 12 months after the first day of theemployment, as appropriate.

§ 662.250 Where and to what extent mustrequired One-Stop partners make coreservices available?

(a) At a minimum, the core servicesthat are applicable to the program of thepartner under § 662.220, and that are inaddition to the basic labor exchangeservices traditionally provided in thelocal area under the Wagner-Peyserprogram, must be made available at thecomprehensive One-Stop center. Theseservices must be made available toindividuals attributable to the partner’sprogram who seek assistance at thecenter. The adult and dislocated workerprogram partners are required to makeall of the core services listed in§ 662.240 available at the center inaccordance with 20 CFR 663.100(b)(1).

(b) The applicable core services maybe made available by the provision ofappropriate technology at thecomprehensive One-Stop center, by co-locating personnel at the center, cross-training of staff, or through a costreimbursement or other agreementbetween service providers at the

comprehensive One-Stop center and thepartner, as described in the MOU.

(c) The responsibility of the partnerfor the provision of core services mustbe proportionate to the use of theservices at the comprehensive One-Stopcenter by the individuals attributable tothe partner’s program. The specificmethod of determining each partner’sproportionate responsibility must bedescribed in the MOU.

(d) For purposes of this part,individuals attributable to the partner’sprogram may include individuals whoare referred through the comprehensiveOne-Stop center and enrolled in thepartner’s program after the receipt ofcore services, who have been enrolled inthe partner’s program prior to receipt ofthe applicable core services at thecenter, who meet the eligibility criteriafor the partner’s program and whoreceive an applicable core service, orwho meet an alternative definitiondescribed in the MOU.

(e) Under the MOU, the provision ofapplicable core services at the center bythe One-Stop partner may besupplemented by the provision of suchservices through the networks ofaffiliated sites and networks of One-Stop partners described in WIA section134(c)(2).

§ 662.260 What services, in addition to theapplicable core services, are to be providedby One-Stop partners through the One-Stopdelivery system?

In addition to the provision of coreservices, One-Stop partners mustprovide access to the other activitiesand programs carried out under thepartner’s authorizing laws. The access tothese services must be described in thelocal MOU. 20 CFR part 663 describesthe specific requirements relating to theprovision of core, intensive, andtraining services through the One-Stopsystem that apply to the adult and thedislocated worker programs authorizedunder title I of WIA. Additionalrequirements apply to the provision ofall labor exchange services under theWagner-Peyser Act. (WIA sec.134(c)(1)(D).)

§ 662.270 How are the costs of providingservices through the One-Stop deliverysystem and the operating costs of thesystem to be funded?

The MOU must describe theparticular funding arrangements forservices and operating costs of the One-Stop delivery system. Each partner mustcontribute a fair share of the operatingcosts of the One-Stop delivery systemproportionate to the use of the systemby individuals attributable to thepartner’s program. There are a numberof methods, consistent with the



requirements of the relevant OMBcirculars, that may be used for allocatingcosts among the partners. Some of thesemethodologies include allocations basedon direct charges, cost pooling, indirectcost rates and activity-based costallocation plans. Additional guidancerelating to cost allocation methods maybe issued by the Department inconsultation with the other appropriateFederal agencies.

§ 662.280 Does title I require One-Stoppartners to use their funds for individualswho are not eligible for the partner’sprogram or for services that are notauthorized under the partner’s program?

No, the requirements of the partner’sprogram continue to apply. The Actintends to create a seamless servicedelivery system for individuals seekingworkforce development services bylinking the One-Stop partners in theOne-Stop delivery system. While theoverall effect is to provide universalaccess to core services, the resources ofeach partner may only be used toprovide services that are authorized andprovided under the partner’s program toindividuals who are eligible under suchprogram. (WIA sec. 121(b)(1).)

Subpart C—Memorandum ofUnderstanding for the One-StopDelivery System

§ 662.300 What is the Memorandum ofUnderstanding (MOU)?

(a) The Memorandum ofUnderstanding (MOU) is an agreementdeveloped and executed between theLocal Board, with the agreement of thechief elected official, and the One-Stoppartners relating to the operation of theOne-Stop delivery system in the localarea.

(b) The MOU must contain theprovisions required by WIA section121(c)(2). These provisions coverservices to be provided through theOne-Stop delivery system; the fundingof the services and operating costs of thesystem; and methods for referringindividuals between the One-Stopoperators and partners. The MOU’sprovisions also must determine theduration and procedures for amendingthe MOU, and may contain any otherprovisions that are consistent with WIAtitle I and the WIA regulations agreed toby the parties. (WIA sec. 121(c).)

§ 662.310 Is there a single MOU for thelocal area or are there to be separate MOU’sbetween the Local Board and each partner?

(a) A single ‘‘umbrella’’ MOU may bedeveloped that addresses the issuesrelating to the local One-Stop deliverysystem for the Local Board, chief electedofficial and all partners, or the Local

Board, chief elected official and thepartners may decide to enter intoseparate agreements between the LocalBoard (with the agreement of the chiefelected official) and one or morepartners. Under either approach, therequirements described in this subpartapply. Since funds are generallyappropriated annually, financialagreements may be negotiated with eachpartner annually to clarify funding ofservices and operating costs of thesystem under the MOU.

(b) WIA emphasizes full and effectivepartnerships between Local Boards,chief elected officials and One-Stoppartners. Local Boards and partnersmust enter into good-faith negotiations.Local Boards, chief elected officials andpartners may request assistance from aState agency responsible foradministering the partner program, theGovernor, State Board, or otherappropriate parties. The State agencies,the State Board, and the Governor mayalso consult with the appropriateFederal agencies to address impassesituations after exhausting otheralternatives. The Local Board andpartners must document thenegotiations and efforts that have takenplace. Any failure to execute an MOUbetween a Local Board and a requiredpartner must be reported by the LocalBoard and the required partner to theGovernor or State Board, and the Stateagency responsible for administering thepartner’s program, and by the Governoror the State Board and the responsibleState agency to the Secretary of Laborand to the head of any other Federalagency with responsibility for oversightof a partner’s program. (WIA sec.121(c).)

(c) If an impasse has not beenresolved through the alternativesavailable under this section any partnerthat fails to execute an MOU may not bepermitted to serve on the Local Board.In addition, any local area in which aLocal Board has failed to execute anMOU with all of the required partnersis not eligible for State incentive grantsawarded on the basis of localcoordination of activities under 20 CFR665.200(d)(2). These sanctions are inaddition to, not in lieu of, any otherremedies that may be applicable to theLocal Board or to each partner forfailure to comply with the statutoryrequirement.

Subpart D—One-Stop Operators

§ 662.400 Who is the One-Stop operator?

(a) The One-Stop operator is the entitythat performs the role described inparagraph (c) of this section. The types

of entities that may be selected to be theOne-Stop operator include:

(1) A postsecondary educationalinstitution;

(2) An Employment Service agencyestablished under the Wagner-PeyserAct on behalf of the local office of theagency;

(3) A private, nonprofit organization(including a community-basedorganization);

(4) A private for-profit entity;(5) A government agency; and(6) Another interested organization or

entity.(b) One-Stop operators may be a

single entity or a consortium of entitiesand may operate one or more One-Stopcenters. In addition, there may be morethan one One-Stop operator in a localarea.

(c) The agreement between the LocalBoard and the One-Stop operator shallspecify the operator’s role. That rolemay range between simply coordinatingservice providers within the center, tobeing the primary provider of serviceswithin the center, to coordinatingactivities throughout the One-Stopsystem. (WIA sec. 121(d).)

§ 662.410 How is the One-Stop Operatorselected?

(a) The Local Board, with theagreement of the chief elected official,must designate and certify One-Stopoperators in each local area.

(b) The One-Stop operator isdesignated or certified:

(1) Through a competitive process,(2) Under an agreement between the

Local Board and a consortium of entitiesthat includes at least three or more ofthe required One-Stoppartners.identified at § 662.200, or

(3) Under the conditions described in§§ 662.420 or 662.430. (WIA sec.121(d),121(e) and 117(f)(2))

(c) The designation or certification ofthe One-Stop operator must be carriedout in accordance with the ‘‘sunshineprovision’’ at 20 CFR 661.307.

§ 662.420 Under what limited conditionsmay the Local Board be designated orcertified as the One-Stop operator?

(a) The Local Board may bedesignated or certified as the One-Stopoperator only with the agreement of thechief elected official and the Governor.

(b) The designation or certificationmust be reviewed whenever the biennialcertification of the Local Board is madeunder 20 CFR 663.300(a). (WIA sec.117(f)(2).)



§ 662.430 Under what conditions may One-Stop operators designated to operate in aOne-Stop delivery system established priorto the enactment of WIA be designated tocontinue as a One-Stop operator under WIAwithout meeting the requirements of§ 662.410(b)?

Under WIA section 121(e), the LocalBoard, the chief elected official and theGovernor may agree to certify an entitythat has been serving as a One-Stopoperator in a One-Stop delivery systemestablished prior to the enactment ofWIA (August 7,1998) to continue toserve as a One-Stop operator withoutmeeting the requirements fordesignation under § 662.410(b) if thelocal One-Stop delivery system ismodified, as necessary, to meet theother requirements of this part,including the requirements relating tothe inclusion of One-Stop partners, theexecution of the MOU, and theprovision of services.(WIA sec. 121(e).)

PART 663—ADULT AND DISLOCATEDWORKER ACTIVITIES UNDER TITLE IOF THE WORKFORCE INVESTMENTACT

Subpart A— Delivery of Adult andDislocated Worker Services through theOne-Stop Delivery SystemSec.663.100 What is the role of the adult and

dislocated worker programs in the One-Stop delivery system?

663.105 When must adults and dislocatedworkers be registered?

663.110 What are the eligibility criteria forcore services for adults in the adult anddislocated worker programs?

663.115 What are the eligibility criteria forcore services for dislocated workers inthe adult and dislocated workerprograms?

663.120 Are displaced homemakers eligiblefor dislocated worker activities underWIA?

663.145 What services are WIA title I adultand dislocated workers formula fundsused to provide?

663.150 What core services must beprovided to adults and dislocatedworkers?

663.155 How are core services delivered?663.160 Are there particular core services

an individual must receive beforereceiving intensive services under WIAsection 134(d)(3)?

663.165 How long must an individual be incore services in order to be eligible forintensive services?

Subpart B—Intensive Services663.200 What are intensive services for

adults and dislocated workers?663.210 How are intensive services

delivered?663.220 Who may receive intensive

services?663.230 What criteria must be used to

determine whether an employed workerneeds intensive services to obtain or

retain employment leading to ‘‘self-sufficiency’’?

663.240 Are there particular intensiveservices an individual must receivebefore receiving training services underWIA section 134(d)(4)(A)(i)?

663.245 What is the individual employmentplan?

663.250 How long must an individualparticipant be in intensive services to beeligible for training services?

Subpart C—Training Services

663.300 What are training services foradults and dislocated workers?

663.310 Who may receive training services?663.320 What are the requirements for

coordination of WIA training funds andother grant assistance?

Subpart D—Individual Training Accounts

663.400 How are training servicesprovided?

663.410 What is an Individual TrainingAccount (ITA)?

663.420 Can the duration and amount ofITA’s be limited?

663.430 Under what circumstances maymechanisms other than ITA’s be used toprovide training services?

663.440 What are the requirements forconsumer choice?

Subpart E—Eligible Training Providers663.500 What is the purpose of this

subpart?663.505 What are eligible providers of

training services?663.508 What is a ‘‘program of training

services’’?663.510 Who is responsible for managing

the eligible provider process?663.515 What is the process for initial

determination of provider eligibility?663.530 Is there a time limit on the period

of initial eligibility for trainingproviders?

663.535 What is the process for determiningthe subsequent eligibility of a provider?

663.540 What kind of performance and costinformation is required fordeterminations of subsequent eligibility?

663.550 How is eligible providerinformation developed and maintained?

663.555 How is the State list disseminated?663.565 May an eligible training provider

lose its eligibility?663.570 What is the consumer reports

system?663.575 In what ways can a Local Board

supplement the information availablefrom the State list?

663.585 May individuals choose trainingproviders located outside of the localarea?

663.590 May a community-basedorganization (CBO) be included on aneligible provider list?

663.595 What requirements apply toproviders of OJT and customizedtraining?

Subpart F—Priority and Special Populations663.600 What priority must be given to low-

income adults and public assistancerecipients served with adult funds undertitle I?

663.610 Does the statutory priority for useof adult funds also apply to dislocatedworker funds?

663.620 How do the Welfare-to-Workprogram and the TANF program relate tothe One-Stop delivery system?

663.630 How does a displaced homemakerqualify for services under title I?

663.640 May an individual with a disabilitywhose family does not meet incomeeligibility criteria under the Act beeligible for priority as a low-incomeadult?

Subpart G—On-the-Job Training (OJT) andCustomized Training

663.700 What are the requirements for on-the-job training (OJT)?

663.705 What are the requirements for OJTcontracts for employed workers?

663.710 What conditions govern OJTpayments to employers?

663.715 What is customized training?663.720 What are the requirements for

customized training for employedworkers?

663.730 May funds provided to employersfor OJT of customized training be usedto assist, promote, or deter unionorganizing?


663.800 What are supportive services foradults and dislocated workers?

663.805 When may supportive services beprovided to participants?

663.810 Are there limits on the amounts orduration of funds for supportiveservices?

663.815 What are needs-related payments?663.820 What are the eligibility

requirements for adults to receive needs-related payments?

663.825 What are the eligibilityrequirements for dislocated workers toreceive needs-related payments?

663.830 May needs-related payments bepaid while a participant is waiting tostart training classes?

663.840 How is the level of needs-relatedpayments determined?


Subpart A—Delivery of Adult andDislocated Worker Services throughthe One-Stop Delivery System

§ 663.100 What is the role of the adult anddislocated worker programs in the One-Stop delivery system?

(a) The One-Stop system is the basicdelivery system for adult and dislocatedworker services. Through this system,adults and dislocated workers canaccess a continuum of services. Theservices are organized into three levels:core, intensive, and training.

(b) The chief elected official or his/herdesignee(s), as the local grantrecipient(s) for the adult and dislocatedworker programs, is a required One-Stoppartner and is subject to the provisionsrelating to such partners described in 20



CFR part 662. Consistent with thoseprovisions:

(1) Core services for adults anddislocated workers must be madeavailable in at least one comprehensiveOne-Stop center in each local workforceinvestment area. Services may also beavailable elsewhere, either at affiliatedsites or at specialized centers. Forexample, specialized centers may beestablished to serve workers beingdislocated from a particular employer orindustry, or to serve residents of publichousing.

(2) The One-Stop centers also makeintensive services available to adultsand dislocated workers, as needed,either by the One-Stop operator directlyor through contracts with serviceproviders that are approved by the LocalBoard.

(3) Through the One-Stop system,adults and dislocated workers needingtraining are provided IndividualTraining Accounts (ITA’s) and access tolists of eligible providers and programsof training. These lists contain qualityconsumer information, including costand performance information for each ofthe providers’ programs, so thatparticipants can make informed choiceson where to use their ITA’s. (ITA’s aremore fully discussed in subpart D of thispart.)

§ 663.105 When must adults anddislocated workers be registered?

(a) Registration is the process forcollecting information to support adetermination of eligibility. Thisinformation may be collected throughmethods that include electronic datatransfer, personal interview, or anindividual’s application.

(b) Adults and dislocated workerswho receive services funded under titleI other than self-service or informationalactivities must be registered anddetermined eligible.

(c) EO data must be collected on everyindividual who is interested in beingconsidered for WIA title I financiallyassisted aid, benefits, services, ortraining by a recipient, and who hassignified that interest by submittingpersonal information in response to arequest from the recipient.

§ 663.110 What are the eligibility criteriafor core services for adults in the adult anddislocated worker program?

To be eligible to receive core servicesas an adult in the adult and dislocatedworker programs, an individual must be18 years of age or older. To be eligiblefor the dislocated worker programs, aneligible adult must meet the criteria of§ 663.115. Eligibility criteria forintensive and training services arefound at §§ 663.220 and 663.310.

663.115 What are the eligibility criteria forcore services for dislocated workers in theadult and dislocated worker programs?

(a) To be eligible to receive coreservices as a dislocated worker in theadult and dislocated worker programs,an individual must meet the definitionof ‘‘dislocated worker’’ at WIA section101(9). Eligibility criteria for intensiveand training services are found at§§ 663.220 and 663.310.

(b) Governors and Local Boards mayestablish policies and procedures forOne-Stop operators to use indetermining an individual’s eligibilityas a dislocated worker, consistent withthe definition at WIA section 101(9).These policies and procedures mayaddress such conditions as:

(1) What constitutes a ‘‘generalannouncement’’ of plant closing underWIA section 101(9)(B)(ii) or (iii); and

(2) What constitutes ‘‘unemployed asa result of general economic conditionsin the community in which theindividual resides or because of naturaldisasters’’ for determining the eligibilityof self-employed individuals, includingfamily members and farm or ranchhands, under WIA section 101(9)(C).

§ 663.120 Are displaced homemakerseligible for dislocated worker activitiesunder WIA?

(a) Yes, there are two significantdifferences from the eligibilityrequirements under the Job TrainingPartnership Act.

(b) Under the dislocated workerprogram in JTPA, displacedhomemakers are defined as ‘‘additionaldislocated workers’’ and are onlyeligible to receive services if theGovernor determines that providingsuch services would not adversely affectthe delivery of services to the othereligible dislocated workers. Under WIAsection 101(9), displaced homemakerswho meet the definition at WIA section101(10) are eligible dislocated workerswithout any additional determination.

(c) The definition of displacedhomemaker under JTPA includedindividuals who had been dependentupon public assistance under Aid forFamilies with Dependent Children(AFDC) as well as those who had beendependent on the income of anotherfamily member. The definition in WIAsection 101(10) includes only thoseindividuals who were dependent on afamily member’s income. Thoseindividuals who have been dependenton public assistance may be served inthe adult program.

§ 663.145 What services are WIA title Iadult and dislocated workers formula fundsused to provide?

(a) WIA title I formula funds allocatedto local areas for adults and dislocatedworkers must be used to provide core,intensive and training services throughthe One-Stop delivery system. LocalBoards determine the most appropriatemix of these services, but all three typesmust be available for both adults anddislocated workers. There are differenteligibility criteria for each of these typesof services, which are described at§§ 663.110, 663.115, 663.220 and663.310.

(b) WIA title I funds may also be usedto provide the other services describedin WIA section 134(e):

(1) Discretionary One-Stop deliveryactivities, including:

(i) Customized screening and referralof qualified participants in trainingservices to employment; and

(ii) Customized employment-relatedservices to employers on a fee-for-service basis that are in addition to laborexchange services available toemployers under the Wagner-PeyserAct.

(2) Supportive services, includingneeds-related payments, as described insubpart H of this part.

§ 663.150 What core services must beprovided to adults and dislocated workers?

(a) At a minimum, all of the coreservices described in WIA section134(d)(2) and 20 CFR 662.240 must beprovided in each local area through theOne-Stop delivery system.

(b) Followup services must be madeavailable, as appropriate, for a minimumof 12 months following the first day ofemployment, to registered participantswho are placed in unsubsidizedemployment.

§ 663.155 How are core servicesdelivered?

Core services must be providedthrough the One-Stop delivery system.Core services may be provided directlyby the One-Stop operator or throughcontracts with service providers that areapproved by the Local Board. The LocalBoard may only be a provider of coreservices when approved by the chiefelected official and the Governor inaccordance with the requirements ofWIA section 117(f)(2) and 20 CFR661.310.

§ 663.160 Are there particular coreservices an individual must receive beforereceiving intensive services under WIAsection 134(d)(3)?

(a) Yes, at a minimum, an individualmust receive at least one core service,such as an initial assessment or job



search and placement assistance, beforereceiving intensive services. The initialassessment provides preliminaryinformation about the individual’s skilllevels, aptitudes, interests, andsupportive services needs. The jobsearch and placement assistance helpsthe individual determine whether he orshe is unable to obtain employment, andthus requires more intensive services toobtain employment. The decision onwhich core services to provide, and thetiming of their delivery, may be madeon a case-by-case basis at the local leveldepending upon the needs of theparticipant.

(b) A determination of the need forintensive services under § 663.220, asestablished by the initial assessment orthe individual’s inability to obtainemployment through the core servicesprovided, must be contained in theparticipant’s case file.

§ 663.165 How long must an individual bein core services in order to be eligible forintensive services?

There is no Federally-requiredminimum time period for participationin core services before receivingintensive services. (WIA sec. 134(d)(3).)

Subpart B—Intensive Services

§ 663.200 What are intensive services foradults and dislocated workers?

(a) Intensive services are listed inWIA section 134(d)(3)(C). The list in theAct is not all-inclusive and otherintensive services, such as out-of-areajob search assistance, literacy activitiesrelated to basic workforce readiness,relocation assistance, internships, andwork experience may be provided,based on an assessment or individualemployment plan.

(b) For the purposes of paragraph (a)of this section, work experience is aplanned, structured learning experiencethat takes place in a workplace for alimited period of time. Work experiencemay be paid or unpaid, as appropriate.A work experience workplace may be inthe private for profit sector, the non-profit sector, or the public sector. Laborstandards apply in any work experiencewhere an employee/employerrelationship, as defined by the FairLabor Standards Act, exists.

§ 663.210 How are intensive servicesdelivered?

(a) Intensive services must beprovided through the One-Stop deliverysystem, including specialized One-Stopcenters. Intensive services may beprovided directly by the One-Stopoperator or through contracts withservice providers, which may includecontracts with public, private for-profit,

and private non-profit service providers(including specialized serviceproviders), that are approved by theLocal Board. (WIA secs. 117(d)(2)(D)and 134(d)(3)(B).)

(b) The Local Board may only be aprovider of intensive services whenapproved by the chief elected officialand the Governor in accordance withWIA section 117(f)(2) and 20 CFR661.310.

§ 663.220 Who may receive intensiveservices?

There are two categories of adults anddislocated workers who may receiveintensive services:

(a) Adults and dislocated workerswho are unemployed, have received atleast one core service and are unable toobtain employment through coreservices, and are determined by a One-Stop operator to be in need of moreintensive services to obtainemployment; and

(b) Adults and dislocated workerswho are employed, have received atleast one core service, and aredetermined by a One-Stop operator to bein need of intensive services to obtainor retain employment that leads to self-sufficiency, as described in § 663.230.

§ 663.230 What criteria must be used todetermine whether an employed workerneeds intensive services to obtain or retainemployment leading to ‘‘self-sufficiency’’?

State Boards or Local Boards must setthe criteria for determining whetheremployment leads to self-sufficiency. Ata minimum, such criteria must providethat self-sufficiency means employmentthat pays at least the lower livingstandard income level, as defined inWIA section 101(24). Self-sufficiency fora dislocated worker may be defined inrelation to a percentage of the layoffwage. The special needs of individualswith disabilities or other barriers toemployment should be taken intoaccount when setting criteria todetermine self-sufficiency.

§ 663.240 Are there particular intensiveservices an individual must receive beforereceiving training services under WIAsection 134(d)(4)(A)(i)?

(a) Yes, at a minimum, an individualmust receive at least one intensiveservice, such as development of anindividual employment plan with a casemanager or individual counseling andcareer planning, before the individualmay receive training services.

(b) The case file must contain adetermination of need for trainingservices under § 663.310, as identifiedin the individual employment plan,comprehensive assessment, or throughany other intensive service received.

§ 663.245 What is the individualemployment plan?

The individual employment plan isan ongoing strategy jointly developed bythe participant and the case managerthat identifies the participant’semployment goals, the appropriateachievement objectives, and theappropriate combination of services forthe participant to achieve theemployment goals.

§ 663.250 How long must an individualparticipant be in intensive services to beeligible for training services?

There is no Federally-requiredminimum time period for participationin intensive services before receivingtraining services. The period of time anindividual spends in intensive servicesshould be sufficient to prepare theindividual for training or employment.(WIA sec. 134(d)(4)(A)(i).)

Subpart C—Training Services

§ 663.300 What are training services foradults and dislocated workers?

Training services are listed in WIAsection 134(d)(4)(D). The list in the Actis not all-inclusive and additionaltraining services may be provided.

§ 663.310 Who may receive trainingservices?

Training services may be madeavailable to employed and unemployedadults and dislocated workers who:

(a) Have met the eligibilityrequirements for intensive services,have received at least one intensiveservice under § 663.240, and have beendetermined to be unable to obtain orretain employment through suchservices;

(b) After an interview, evaluation, orassessment, and case management, havebeen determined by a One-Stop operatoror One-Stop partner, to be in need oftraining services and to have the skillsand qualifications to successfullycomplete the selected training program;

(c) Select a program of trainingservices that is directly linked to theemployment opportunities either in thelocal area or in another area to whichthe individual is willing to relocate;

(d) Are unable to obtain grantassistance from other sources to pay thecosts of such training, including suchsources as Welfare-to-Work, State-funded training funds, TradeAdjustment Assistance and Federal PellGrants established under title IV of theHigher Education Act of 1965, or requireWIA assistance in addition to othersources of grant assistance, includingFederal Pell Grants (provisions relatingto fund coordination are found at



§ 663.320 and WIA section 134(d)(4)(B));and

(e) For individuals whose services areprovided through the adult fundingstream, are determined eligible inaccordance with the State and localpriority system, if any, in effect foradults under WIA section 134(d)(4)(E)and § 663.600. (WIA sec. 134(d)(4)(A).)

§ 663.320 What are the requirements forcoordination of WIA training funds andother grant assistance?

(a) WIA funding for training is limitedto participants who:

(1) Are unable to obtain grantassistance from other sources to pay thecosts of their training; or

(2) Require assistance beyond thatavailable under grant assistance fromother sources to pay the costs of suchtraining. Program operators and trainingproviders must coordinate fundsavailable to pay for training as describedin paragraphs (b) and (c) of this section.

(b) Program operators must coordinatetraining funds available and makefunding arrangements with One-Stoppartners and other entities to apply theprovisions of paragraph (a) of thissection. Training providers mustconsider the availability of other sourcesof grants to pay for training costs suchas Welfare-to-Work, State-fundedtraining funds, and Federal Pell Grants,so that WIA funds supplement othersources of training grants.

(c) A WIA participant may enroll inWIA-funded training while his/herapplication for a Pell Grant is pendingas long as the One-Stop operator hasmade arrangements with the trainingprovider and the WIA participantregarding allocation of the Pell Grant, ifit is subsequently awarded. In that case,the training provider must reimbursethe One-Stop operator the WIA fundsused to underwrite the training for theamount the Pell Grant covers.Reimbursement is not required from theportion of Pell Grant assistancedisbursed to the WIA participant foreducation-related expenses. (WIA sec.134(d)(4)(B).)

Subpart D—Individual TrainingAccounts

§ 663.400 How are training servicesprovided?

Except under the three conditionsdescribed in WIA section134(d)(4)(G)(ii) and § 663.430(a), theIndividual Training Account (ITA) isestablished for eligible individuals tofinance training services. Local Boardsmay only provide training servicesunder § 663.430 if they receive a waiverfrom the Governor and meet therequirements of 20 CFR 661.310 and

WIA section 117(f)(1). (WIA sec.134(d)(4)(G).)

§ 663.410 What is an Individual TrainingAccount (ITA)?

The ITA is established on behalf of aparticipant. WIA title I adult anddislocated workers purchase trainingservices from eligible providers theyselect in consultation with the casemanager. Payments from ITA’s may bemade in a variety of ways, including theelectronic transfer of funds throughfinancial institutions, vouchers, or otherappropriate methods. Payments mayalso be made incrementally; throughpayment of a portion of the costs atdifferent points in the training course.(WIA sec. 134(d)(4)(G).)

§ 663.420 Can the duration and amount ofITA’s be limited?

(a) Yes, the State or Local Board mayimpose limits on ITA’s, such aslimitations on the dollar amount and/orduration.

(b) Limits to ITA’s may be establishedin different ways:

(1) There may be a limit for anindividual participant that is based onthe needs identified in the individualemployment plan; or

(2) There may be a policy decision bythe State Board or Local Board toestablish a range of amounts and/or amaximum amount applicable to allITA’s.

(c) Limitations established by State orLocal Board policies must be describedin the State or Local Plan, respectively,but should not be implemented in amanner that undermines the Act’srequirement that training services areprovided in a manner that maximizescustomer choice in the selection of aneligible training provider. ITAlimitations may provide for exceptionsto the limitations in individual cases.

(d) An individual may select trainingthat costs more than the maximumamount available for ITAs under a Stateor local policy when other sources offunds are available to supplement theITA. These other sources may include:Pell Grants; scholarships; severance pay;and other sources.

§ 663.430 Under what circumstances maymechanisms other than ITA’s be used toprovide training services?

(a) Contracts for services may be usedinstead of ITA’s only when one of thefollowing three exceptions applies:

(1) When the services provided areon-the-job training (OJT) or customizedtraining;

(2) When the Local Board determinesthat there are an insufficient number ofeligible providers in the local area toaccomplish the purpose of a system of

ITA’s. The Local Plan must describe theprocess to be used in selecting theproviders under a contract for services.This process must include a publiccomment period for interested providersof at least 30 days;

(3) When the Local Board determinesthat there is a training services programof demonstrated effectiveness offered inthe area by a community-basedorganization (CBO) or another privateorganization to serve special participantpopulations that face multiple barriersto employment, as described inparagraph (b) in this section. The LocalBoard must develop criteria to be usedin determining demonstratedeffectiveness, particularly as it appliesto the special participant population tobe served. The criteria may include:

(i) Financial stability of theorganization;

(ii) Demonstrated performance in thedelivery of services to hard to serveparticipant populations through suchmeans as program completion rate;attainment of the skills, certificates ordegrees the program is designed toprovide; placement after training inunsubsidized employment; andretention in employment; and

(iii) How the specific program relatesto the workforce investment needsidentified in the local plan.

(b) Under paragraph (a)(3) of thissection, special participant populationsthat face multiple barriers toemployment are populations of low-income individuals that are included inone or more of the following categories:

(1) Individuals with substantiallanguage or cultural barriers;

(2) Offenders;(3) Homeless individuals; and(4) Other hard-to-serve populations as

defined by the Governor.

§ 663.440 What are the requirements forconsumer choice?

(a) Training services, whether underITA’s or under contract, must beprovided in a manner that maximizesinformed consumer choice in selectingan eligible provider.

(b) Each Local Board, through theOne-Stop center, must make available tocustomers the State list of eligibleproviders required in WIA section122(e). The list includes a description ofthe programs through which theproviders may offer the trainingservices, the information identifyingeligible providers of on-the-job trainingand customized training required underWIA section 122(h) (where applicable),and the performance and costinformation about eligible providers oftraining services described in WIAsections 122 (e) and (h).



(c) An individual who has beendetermined eligible for training servicesunder § 663.310 may select a providerdescribed in paragraph (b) of thissection after consultation with a casemanager. Unless the program hasexhausted training funds for theprogram year, the operator must referthe individual to the selected provider,and establish an ITA for the individualto pay for training. For purposes of thisparagraph, a referral may be carried outby providing a voucher or certificate tothe individual to obtain the training.

(d) The cost of referral of anindividual with an ITA to a trainingprovider is paid by the applicable adultor dislocated worker program under titleI of WIA.

Subpart E—Eligible Training Providers

§ 663.500 What is the purpose of thissubpart?

The workforce investment systemestablished under WIA emphasizesinformed customer choice, systemperformance, and continuousimprovement. The eligible providerprocess is part of the strategy forachieving these goals. Local Boards, inpartnership with the State, identifytraining providers and programs whoseperformance qualifies them to receiveWIA funds to train adults anddislocated workers. In order tomaximize customer choice and assurethat all significant population groupsare served, States and local areas shouldadminister the eligible provider processin a manner to assure that significantnumbers of competent providers,offering a wide variety of trainingprograms and occupational choices, areavailable to customers. After receivingcore and intensive services and inconsultation with case managers,eligible participants who need traininguse the list of these eligible providers tomake an informed choice. The ability ofproviders to successfully perform, theprocedures State and Local Boards useto establish eligibility, and the degree towhich information, includingperformance information, on thoseproviders is made available tocustomers eligible for training services,are key factors affecting the successfulimplementation of the Statewideworkforce investment system. Thissubpart describes the process fordetermining eligible training providers.

§ 663.505 What are eligible providers oftraining services?

(a) Eligible providers of trainingservices are described in WIA section122. They are those entities eligible toreceive WIA title I–B funds to provide

training services to eligible adult anddislocated worker customers.

(b) In order to provide trainingservices under WIA title I–B, a providermust meet the requirements of thissubpart and WIA section 122.

(1) These requirements apply to theuse of WIA title I adult and dislocatedworker funds to provide training:

(i) To individuals using ITA’s toaccess training through the eligibleprovider list; and

(ii) To individuals for trainingprovided through the exceptions toITA’s described at § 663.430 (a)(2) and(a)(3).

(2) These requirements apply to allorganizations providing training to adultand dislocated workers, including:

(i) Postsecondary educationalinstitutions providing a programdescribed in WIA section122(a)(2)(A)(ii);

(ii) Entities that carry out programsunder the National Apprenticeship Act(29 U.S.C. 50 et seq.);

(iii) Other public or private providersof a program of training servicesdescribed in WIA section 122(a)(2)(C);

(iv) Local Boards, if they meet theconditions of WIA section 117(f)(1); and

(v) Community-based organizationsand other private organizationsproviding training under § 663.430.

(c) Provider eligibility proceduresmust be established by the Governor, asrequired by this subpart. Differentprocedures are described in WIA fordeterminations of ‘‘initial’’ and‘‘subsequent’’ eligibility. Because theprocesses are different, they arediscussed separately.

§ 663.508 What is a ‘‘program of trainingservices’’?

A program of training services is oneor more courses or classes, or astructured regimen, that uponsuccessful completion, leads to:

(a) A certificate, an associate degree,baccalaureate degree, or

(b) The skills or competencies neededfor a specific job or jobs, an occupation,occupational group, or generally, formany types of jobs or occupations, asrecognized by employers anddetermined prior to training.

§ 663.510 Who is responsible formanaging the eligible provider process?

(a) The State and the Local Boardseach have responsibilities for managingthe eligible provider process.

(b) The Governor must establisheligibility criteria for certain providersto become initially eligible and must setminimum levels of performance for allproviders to remain subsequentlyeligible.

(c) The Governor must designate aState agency (called the ‘‘designatedState agency’’) to assist in carrying outWIA section 122. The designated Stateagency is responsible for:

(1) Developing and maintaining theState list of eligible providers andprograms, which is comprised of listssubmitted by Local Boards;

(2) Determining if programs meetperformance levels, including verifyingthe accuracy of the information on theState list in consultation with the LocalBoards, removing programs that do notmeet program performance levels, andtaking appropriate enforcement actions,against providers in the case of theintentional provision of inaccurateinformation, as described in WIAsection 122(f)(1), and in the case of asubstantial violation of the requirementsof WIA, as described in WIA section122(f)(2);

(3) Disseminating the State list,accompanied by performance and costinformation relating to each provider, toOne-Stop operators throughout theState.

(d) The Local Board must:(1) Accept applications for initial

eligibility from certain postsecondaryinstitutions and entities providingapprenticeship training;

(2) Carry out procedures prescribed bythe Governor to assist in determiningthe initial eligibility of other providers;

(3) Carry out procedures prescribed bythe Governor to assist in determiningthe subsequent eligibility of allproviders;

(4) Compile a local list of eligibleproviders, collect the performance andcost information and any other requiredinformation relating to providers;

(5) Submit the local list andinformation to the designated Stateagency;

(6) Ensure the dissemination andappropriate use of the State list throughthe local One-Stop system;

(7) Consult with the designated Stateagency in cases where termination of aneligible provider is contemplatedbecause inaccurate information has beenprovided; and

(8) Work with the designated Stateagency in cases where the terminationof an eligible provider is contemplatedbecause of violations of the Act.

(e) The Local Board may:(1) Make recommendations to the

Governor on the procedures to be usedin determining initial eligibility ofcertain providers;

(2) Increase the levels of performancerequired by the State for local providersto maintain subsequent eligibility;

(3) Require additional verifiableprogram-specific information from local



providers to maintain subsequenteligibility.

§ 663.515 What is the process for initialdetermination of provider eligibility?

(a) To be eligible to receive adult ordislocated worker training funds undertitle I of WIA, all providers must submitapplications to the Local Boards in theareas in which they wish to provideservices. The application must describeeach program of training services to beoffered.

(b) For programs eligible under titleIV of the Higher Education Act andapprenticeship programs registeredunder the National Apprenticeship Act(NAA), and the providers or suchprograms, Local Boards determine theprocedures to use in making anapplication. The procedures establishedby the Local Board must specify thetiming, manner, and contents of therequired application.

(c) For programs not eligible undertitle IV of the HEA or registered underthe NAA, and for providers not eligibleunder title IV of the HEA or carrying outapprenticeship programs under NAA:

(1) The Governor must develop aprocedure for use by Local Boards fordetermining the eligibility of otherproviders, after

(i) Soliciting and taking intoconsideration recommendations fromLocal Boards and providers of trainingservices within the State;

(ii) Providing an opportunity forinterested members of the public,including representatives of businessand labor organizations, to submitcomments on the procedure; and

(iii) Designating a specific time periodfor soliciting and considering therecommendations of Local Boards andprovider, and for providing anopportunity for public comment.

(2) The procedure must be describedin the State Plan.

(3)(i) The procedure must require thatthe provider must submit an applicationto the Local Board at such time and insuch manner as may be required, whichcontains a description of the program oftraining services;

(ii) If the provider provides a programof training services on the date ofapplication, the procedure must requirethat the application include anappropriate portion of the performanceinformation and program costinformation described in § 663.540, andthat the program meet appropriate levelsof performance;

(iii) If the provider does not providea program of training services on thatdate, the procedure must require thatthe provider meet appropriate

requirements specified in the procedure.(WIA sec. 122(b)(2)(D).)

(d) The Local Board must includeproviders that meet the requirements ofparagraphs (b) and (c) of this section ona local list and submit the list to thedesignated State agency. The Stateagency has 30 days to determine that theprovider or its programs do not meet therequirements relating to the providersunder paragraph (c) of this section. Afterthe agency determines that the providerand its programs meet(s) the criteria forinitial eligibility, or 30 days haveelapsed, whichever occurs first, theprovider and its programs are initiallyeligible. The programs and providerssubmitted under paragraph (b) of thissection are initially eligible withoutState agency review. (WIA sec. 122(e).)

§ 663.530 Is there a time limit on the periodof initial eligibility for training providers?

Yes, under WIA section 122(c)(5), theGovernor must require trainingproviders to submit performanceinformation and meet performancelevels annually in order to remaineligible providers. States may requirethat these performance requirements bemet one year from the date that initialeligibility was determined, or mayrequire all eligible providers to submitperformance information by the samedate each year. If the latter approach isadopted, the Governor may exempteligible providers whose determinationof initial eligibility occurs within sixmonths of the date of submissions. Theeffect of this requirement is that notraining provider may have a period ofinitial eligibility that exceeds eighteenmonths. In the limited circumstancewhen insufficient data is available,initial eligibility may be extended for aperiod of up to six additional months,if the Governor’s procedures provide forsuch an extension.

§ 663.535 What is the process fordetermining of the subsequent eligibility ofa provider?

(a) The Governor must develop aprocedure for the Local Board to use indetermining the subsequent eligibility ofall eligible training providersdetermined initially eligible under§ 663.515 (b) and (c), after:

(1) Soliciting and taking intoconsideration recommendations fromLocal Boards and providers of trainingservices within the State;

(2) Providing an opportunity forinterested members of the public,including representatives of businessand labor organizations, to submitcomments on such procedure; and

(3) Designating a specific time periodfor soliciting and considering the

recommendations of Local Boards andproviders, and for providing anopportunity for public comment.

(b) The procedure must be describedin the State Plan.

(c) The procedure must require that:(1) Providers annually submit

performance and cost information asdescribed at WIA section 122(d)(1) and(2), for each program of training servicesfor which the provider has beendetermined to be eligible, in a time andmanner determined by the Local Board;

(2) Providers and programs annuallymeet minimum performance levelsdescribed at WIA section 122(c)(6), asdemonstrated utilizing UI quarterlywage records where appropriate.

(d) The program’s performanceinformation must meet the minimumacceptable levels established underparagraph (c)(2) of this section to remaineligible;

(e) Local Boards may require higherlevels of performance for local programsthan the levels specified in theprocedures established by the Governor.(WIA sec.122(c)(5) and (c)(6).)

(f) The State procedure must requireLocal Boards to take into consideration:

(1) The specific economic, geographicand demographic factors in the localareas in which providers seekingeligibility are located, and

(2) The characteristics of thepopulations served by programs seekingeligibility, including the demonstrateddifficulties in serving these populations,where applicable.

(g) The Local Board retains thoseprograms on the local list that meet therequired performance levels and otherelements of the State procedures andsubmits the list, accompanied by theperformance and cost information, andany additional required information, tothe designated State agency. If thedesignated State agency determineswithin 30 days from the receipt of theinformation that the program does notmeet the performance levels establishedunder paragraph (c)(2) of this section,the program may be removed from thelist. A program retained on the local listand not removed by the designated Stateagency is considered an eligibleprogram of training services.

§ 663.540 What kind of performance andcost information is required fordeterminations of subsequent eligibility?

(a) Eligible providers of trainingservices must submit, at least annually,under procedures established by theGovernor under § 663.535(c):

(1) Verifiable program-specificperformance information, including:

(i) The information described in WIAsection 122(d)(1)(A)(i) for all



individuals participating in theprograms of training services, includingindividuals who are not receivingassistance under WIA section 134 andindividuals who are receiving suchassistance; and

(ii) The information described in WIAsection 122(d)(1)(A)(ii) relating only toindividuals receiving assistance underthe WIA adult and dislocated workerprogram who are participating in theapplicable program of training services;and

(2) Information on program costs(such as tuition and fees) for WIAparticipants in the program.

(b) Governors may require anyadditional verifiable performanceinformation (such as the informationdescribed at WIA section 122(d)(2)) thatthe Governor determines to beappropriate to obtain subsequenteligibility, including informationregarding all participating individualsas well as individuals receivingassistance under the WIA adult anddislocated worker program.

(c) Governors must establishprocedures by which providers candemonstrate if the additionalinformation required under paragraph(b) of this section imposes extraordinarycosts on providers, or if providersexperience extraordinary costs in thecollection of information. If, throughthese procedures, providers demonstratethat they experience such extraordinarycosts:

(1) The Governor or Local Board mustprovide access to cost-effective methodsfor the collection of the information; or

(2) The Governor must provideadditional resources to assist providersin the collection of the information fromfunds for Statewide workforceinvestment activities reserved underWIA sections 128(a) and 133(a)(1).

(d) The Local Board and thedesignated State agency may acceptprogram-specific performanceinformation consistent with therequirements for eligibility under titleIV of the Higher Education Act of 1965from a provider for purposes of enablingthe provider to fulfill the applicablerequirements of this section, if theinformation is substantially similar tothe information otherwise requiredunder this section.

§ 663.550 How is eligible providerinformation developed and maintained?

(a) The designated State agency mustmaintain a list of all eligible trainingprograms and providers in the State (the‘‘State list’’).

(b) The State list is a compilation ofthe eligible programs and providersidentified or retained by local areas and

that have not been removed under§§ 663.535(g) and 663.565.

(c) The State list must beaccompanied by the performance andcost information contained in the locallists as required by § 663.535(e). (WIAsec. 122(e)(4)(A).)

§ 663.555 How is the State listdisseminated?

(a) The designated State agency mustdisseminate the State list andaccompanying performance and costinformation to the One-Stop deliverysystems within the State.

(b) The State list and informationmust be updated at least annually.

(c) The State list and accompanyinginformation form the primary basis ofthe One-Stop consumer reports systemthat provides for informed customerchoice. The list and information must bewidely available, through the One-Stopdelivery system, to customers seekinginformation on training outcomes, aswell as participants in employment andtraining activities funded under WIAand other programs.

(1) The State list must be madeavailable to individuals who have beendetermined eligible for training servicesunder § 663.310.

(2) The State list must also be madeavailable to customers whose training issupported by other One-Stop partners.

§ 663.565 May an eligible training providerlose its eligibility?

(a) Yes. A training provider mustdeliver results and provide accurateinformation in order to retain its statusas an eligible training provider.

(b) If the provider’s programs do notmeet the established performance levels,the programs will be removed from theeligible provider list.

(1) A Local Board must determine,during the subsequent eligibilitydetermination process, whether aprovider’s programs meet performancelevels. If the program fails to meet suchlevels, the program must be removedfrom the local list. If all of the provider’sprograms fail to meet such levels, theprovider must be removed from thelocal list.

(2) The designated State agency uponreceipt of the performance informationaccompanying the local list, mayremove programs from the State list ifthe agency determines the programfailed to meet the levels of performanceprescribed under § 663.535(c). If all ofthe provider’s programs are determinedto have failed to meet the levels, thedesignated State agency may remove theprovider from the State list.

(3) Providers determined to haveintentionally supplied inaccurate

information or to have subsequentlyviolated any provision of title I of WIAor the WIA regulations, including 29CFR part 37, may be removed from thelist in accordance with the enforcementprovisions of WIA section 122(f). Aprovider whose eligibility is terminatedunder these conditions is liable to repayall adult and dislocated worker trainingfunds it received during the period ofnoncompliance.

(4) The Governor must establishappeal procedures for providers oftraining to appeal a denial of eligibilityunder this subpart according to therequirements of 20 CFR 667.640(b).

§ 663.570 What is the consumer reportssystem?

The consumer reports system, referredto in WIA as performance information,is the vehicle for informing thecustomers of the One-Stop deliverysystem about the performance oftraining providers and programs in thelocal area. It is built upon the State listof eligible providers and programsdeveloped through the proceduresdescribed in WIA section 122 and thissubpart. The consumer reports systemmust contain the information necessaryfor an adult or dislocated workercustomer to fully understand theoptions available to him or her inchoosing a program of training services.Such program-specific factors mayinclude overall performance,performance for significant customergroups (including wage replacementrates for dislocated workers),performance of specific provider sites,current information on employment andwage trends and projections, andduration of training programs.

§ 663.575 In what ways can a Local Boardsupplement the information available fromthe State list?

(a) Local Boards may supplement theinformation available from the State listby providing customers with additionalinformation to assist in supportinginformed customer choice and theachievement of local performancemeasures (as described in WIA section136).

(b) This additional information mayinclude:

(1) Information on programs oftraining services that are linked tooccupations in demand in the local area;

(2) Performance and cost information,including program-specific performanceand cost information, for the localoutlet(s) of multi-site eligible providers;and

(3) Other appropriate informationrelated to the objectives of WIA, whichmay include the information describedin § 663.570.



§ 663.585 May individuals choose trainingproviders located outside of the local area?

Yes, individuals may choose any ofthe eligible providers and programs onthe State list. A State may also establisha reciprocal agreement with anotherState(s) to permit providers of eligibletraining programs in each State toaccept individual training accountsprovided by the other State. (WIA secs.122(e)(4) and (e)(5).)

§ 663.590 May a community-basedorganization (CBO) be included on aneligible provider list?

Yes, CBO’s may apply and they andtheir programs may be determinedeligible providers of training services,under WIA section 122 and this subpart.As eligible providers, CBO’s providetraining through ITA’s and may alsoreceive contracts for training specialparticipant populations when therequirements of § 663.430 are met.

§ 663.595 What requirements apply toproviders of OJT and customized training?

For OJT and customized trainingproviders, One-Stop operators in a localarea must collect such performanceinformation as the Governor mayrequire, determine whether theproviders meet such performancecriteria as the Governor may require,and disseminate a list of providers thathave met such criteria, along with therelevant performance information aboutthem, through the One-Stop deliverysystem. Providers determined to meetthe criteria are considered to beidentified as eligible providers oftraining services. These providers arenot subject to the other requirements ofWIA section 122 or this subpart.

Subpart F—Priority and SpecialPopulations

§ 663.600 What priority must be given tolow-income adults and public assistancerecipients served with adult funds undertitle I?

(a) WIA states, in section 134(d)(4)(E),that in the event that funds allocated toa local area for adult employment andtraining activities are limited, priorityfor intensive and training servicesfunded with title I adult funds must begiven to recipients of public assistanceand other low-income individuals in thelocal area.

(b) Since funding is generally limited,States and local areas must establishcriteria by which local areas candetermine the availability of funds andthe process by which any priority willbe applied under WIA section134(d)(2)(E). Such criteria may includethe availability of other funds forproviding employment and training-

related services in the local area, theneeds of the specific groups within thelocal area, and other appropriate factors.

(c) States and local areas must givepriority for adult intensive and trainingservices to recipients of publicassistance and other low-incomeindividuals, unless the local area hasdetermined that funds are not limitedunder the criteria established underparagraph (b) of this section.

(d) The process for determiningwhether to apply the priorityestablished under paragraph (b) of thissection does not necessarily mean thatonly the recipients of public assistanceand other low income individuals mayreceive WIA adult funded intensive andtraining services when funds aredetermined to be limited in a local area.The Local Board and the Governor mayestablish a process that gives priority forservices to the recipients of publicassistance and other low incomeindividuals and that also serves otherindividuals meeting eligibilityrequirements.

§ 663.610 Does the statutory priority foruse of adult funds also apply to dislocatedworker funds?

No, the statutory priority applies toadult funds for intensive and trainingservices only. Funds allocated fordislocated workers are not subject tothis requirement.

§ 663.620 How do the Welfare-to-Workprogram and the TANF program relate tothe One-Stop delivery system?

(a) The local Welfare-to-Work (WtW)program operator is a required partnerin the One-Stop delivery system. 20 CFRpart 662 describes the roles of suchpartners in the One-Stop deliverysystem and applies to the Welfare-to-Work program operator. WtW programsserve individuals who may also beserved by the WIA programs and,through appropriate linkages andreferrals, these customers will haveaccess to a broader range of servicesthrough the cooperation of the WtWprogram in the One-Stop system. WtWparticipants, who are determined to beWIA eligible, and who needoccupational skills training may bereferred through the One-Stop system toreceive WIA training, when WtW grantand other grant funds are not availablein accordance with § 663.320(a). WIAparticipants who are also determinedWtW eligible, may be referred to theWtW operator for job placement andother WtW assistance.

(b) The local TANF agency isspecifically suggested under WIA as anadditional partner in the One-Stopsystem. TANF recipients will have

access to more information aboutemployment opportunities and serviceswhen the TANF agency participates inthe One-Stop delivery system. TheGovernor and Local Board shouldencourage the TANF agency to becomea One-Stop partner to improve thequality of services to the WtW andTANF-eligible populations. In addition,becoming a One-Stop partner willensure that the TANF agency isrepresented on the Local Board andparticipates in developing workforceinvestment strategies that help cashassistance recipients secure lastingemployment.

§ 663.630 How does a displacedhomemaker qualify for services under titleI?

Displaced homemakers may beeligible to receive assistance under titleI in a variety of ways, including:

(a) Core services provided by the One-Stop partners through the One-Stopdelivery system;

(b) Intensive or training services forwhich an individual qualifies as adislocated worker/displacedhomemaker if the requirements of thispart are met;

(c) Intensive or training services forwhich an individual is eligible if therequirements of this part are met;

(d) Statewide employment andtraining projects conducted with reservefunds for innovative programs fordisplaced homemakers, as described in20 CFR 665.210(f).

§ 663.640 May an individual with adisability whose family does not meetincome eligibility criteria under the Act beeligible for priority as a low-income adult?

Yes, even if the family of anindividual with a disability does notmeet the income eligibility criteria, theindividual with a disability is to beconsidered a low-income individual ifthe individual’s own income:

(a) Meets the income criteriaestablished in WIA section 101(25)(B);or

(b) Meets the income eligibilitycriteria for cash payments under anyFederal, State or local public assistanceprogram. (WIA sec. 101(25)(F).)

Subpart G—On-the-Job Training (OJT)and Customized Training

§ 663.700 What are the requirements foron-the-job training (OJT)?

(a) On-the-job training (OJT) isdefined at WIA section 101(31). OJT isprovided under a contract with anemployer in the public, private non-profit, or private sector. Through theOJT contract, occupational training isprovided for the WIA participant in



exchange for the reimbursement of up to50 percent of the wage rate tocompensate for the employer’sextraordinary costs. (WIA sec.101(31)(B).)

(b) The local program must notcontract with an employer who haspreviously exhibited a pattern of failingto provide OJT participants withcontinued long-term employment withwages, benefits, and working conditionsthat are equal to those provided toregular employees who have worked asimilar length of time and are doing thesame type of work. (WIA sec. 195(4).)

(c) An OJT contract must be limitedto the period of time required for aparticipant to become proficient in theoccupation for which the training isbeing provided. In determining theappropriate length of the contract,consideration should be given to theskill requirements of the occupation, theacademic and occupational skill level ofthe participant, prior work experience,and the participant’s individualemployment plan. (WIA sec.101(31)(C).)

§ 663.705 What are the requirements forOJT contracts for employed workers?

OJT contracts may be written foreligible employed workers when:

(a) The employee is not earning a self-sufficient wage as determined by LocalBoard policy;

(b) The requirements in § 663.700 aremet; and

(c) The OJT relates to the introductionof new technologies, introduction tonew production or service procedures,upgrading to new jobs that requireadditional skills, workplace literacy, orother appropriate purposes identified bythe Local Board.

§ 663.710 What conditions govern OJTpayments to employers?

(a) On-the-job training payments toemployers are deemed to becompensation for the extraordinarycosts associated with trainingparticipants and the costs associatedwith the lower productivity of theparticipants.

(b) Employers may be reimbursed upto 50 percent of the wage rate of an OJTparticipant for the extraordinary costs ofproviding the training and additionalsupervision related to the OJT. (WIAsec. 101(31)(B).)

(c) Employers are not required todocument such extraordinary costs.

§ 663.715 What is customized training?

Customized training is training:(a) That is designed to meet the

special requirements of an employer(including a group of employers);

(b) That is conducted with acommitment by the employer toemploy, or in the case of incumbentworkers, continue to employ, anindividual on successful completion ofthe training; and

(c) For which the employer pays fornot less than 50 percent of the cost ofthe training. (WIA sec. 101(8).)

§ 663.720 What are the requirements forcustomized training for employed workers?

Customized training of an eligibleemployed individual may be providedfor an employer or a group of employerswhen:

(a) The employee is not earning a self-sufficient wage as determined by LocalBoard policy;

(b) The requirements in § 663.715 aremet; and

(c) The customized training relates tothe purposes described in § 663.705(c)or other appropriate purposes identifiedby the Local Board.

§ 663.730 May funds provided toemployers for OJT of customized trainingbe used to assist, promote, or deter unionorganizing?

No, funds provided to employers forOJT or customized training must not beused to directly or indirectly assist,promote or deter union organizing.


§ 663.800 What are supportive services foradults and dislocated workers?

Supportive services for adults anddislocated workers are defined at WIAsections 101(46) and 134(e)(2) and (3).They include services such astransportation, child care, dependentcare, housing, and needs-relatedpayments, that are necessary to enablean individual to participate in activitiesauthorized under WIA title I. LocalBoards, in consultation with the One-Stop partners and other communityservice providers, must develop a policyon supportive services that ensuresresource and service coordination in thelocal area. Such policy should addressprocedures for referral to such services,including how such services will befunded when they are not otherwiseavailable from other sources. Theprovision of accurate information aboutthe availability of supportive services inthe local area, as well as referral to suchactivities, is one of the core services thatmust be available to adults anddislocated workers through the One-Stop delivery system. (WIA sec.134(d)(2)(H).)

§ 663.805 When may supportive servicesbe provided to participants?

(a) Supportive services may only beprovided to individuals who are:

(1) Participating in core, intensive ortraining services; and

(2) Unable to obtain supportiveservices through other programsproviding such services. (WIA sec.134(e)(2)(A) and (B).)

(b) Supportive services may only beprovided when they are necessary toenable individuals to participate in titleI activities. (WIA sec. 101(46).)

§ 663.810 Are there limits on the amountsor duration of funds for supportiveservices?

(a) Local Boards may establish limitson the provision of supportive servicesor provide the One-Stop operator withthe authority to establish such limits,including a maximum amount offunding and maximum length of timefor supportive services to be available toparticipants.

(b) Procedures may also beestablished to allow One-Stop operatorsto grant exceptions to the limitsestablished under paragraph (a) of thissection.

§ 663.815 What are needs-relatedpayments?

Needs-related payments providefinancial assistance to participants forthe purpose of enabling individuals toparticipate in training and are one of thesupportive services authorized by WIAsection 134(e)(3).

§ 663.820 What are the eligibilityrequirements for adults to receive needs-related payments?

Adults must:(a) Be unemployed,(b) Not qualify for, or have ceased

qualifying for, unemploymentcompensation; and

(c) Be enrolled in a program oftraining services under WIA section134(d)(4).

§ 663.825 What are the eligibilityrequirements for dislocated workers toreceive needs-related payments?

To receive needs related payments, adislocated worker must:

(a) Be unemployed, and:(1) Have ceased to qualify for

unemployment compensation or tradereadjustment allowance under TAA orNAFTA–TAA; and

(2) Be enrolled in a program oftraining services under WIA section134(d)(4) by the end of the 13th weekafter the most recent layoff that resultedin a determination of the worker’seligibility as a dislocated worker, or, iflater, by the end of the 8th week afterthe worker is informed that a short-termlayoff will exceed 6 months; or

(b) Be unemployed and did notqualify for unemployment



compensation or trade readjustmentassistance under TAA or NAFTA–TAA.

§ 663.830 May needs-related payments bepaid while a participant is waiting to starttraining classes?

Yes, payments may be provided if theparticipant has been accepted in atraining program that will begin within30 calender days. The Governor mayauthorize local areas to extend the 30day period to address appropriatecircumstances.

§ 663.840 How is the level of needs-relatedpayments determined?

(a) The payment level for adults mustbe established by the Local Board.

(b) For dislocated workers, paymentsmust not exceed the greater of either ofthe following levels:

(1) For participants who were eligiblefor unemployment compensation as aresult of the qualifying dislocation, thepayment may not exceed the applicableweekly level of the unemploymentcompensation benefit; or

(2) For participants who did notqualify for unemploymentcompensation as a result of thequalifying layoff, the weekly paymentmay not exceed the poverty level for anequivalent period. The weekly paymentlevel must be adjusted to reflect changesin total family income as determined byLocal Board policies. (WIA sec.134(e)(3)(C).)

PART 664—YOUTH ACTIVITIESUNDER TITLE I OF THE WORKFORCEINVESTMENT ACT

Subpart A—Youth Councils

Sec.664.100 What is the youth council?664.110 Who is responsible for oversight of

youth programs in the local area?

Subpart B—Eligibility for Youth Services

664.200 Who is eligible for youth services?664.205 How is the ‘‘deficient in basic

literacy skills’’ criterion in§ 664.200(c)(1) defined and documented?

664.210 How is the ‘‘requires additionalassistance to complete an educationalprogram, or to secure and holdemployment’’ criterion in § 664.200(c)(6)defined and documented?

664.215 Must youth participants beregistered to participate in the youthprogram?

664.220 Is there an exception to permityouth who are not low-incomeindividuals to receive youth services?

664.230 Are the eligibility barriers foreligible youth the same as the eligibilitybarriers for the five percent of youthparticipants who do not have to meetincome eligibility requirements?

664.240 May a local program use eligibilityfor free lunches under the NationalSchool Lunch Program as a substitute for

the income eligibility criteria under titleI of WIA?

664.250 May a disabled youth whose familydoes not meet income eligibility criteriaunder the Act be eligible for youthservices?

Subpart C—Out-of-School Youth

664.300 Who is an ‘‘out-of-school youth’’?664.310 When is dropout status

determined, particularly for youthattending alternative schools?

664.320 Does the requirement that at least30 percent of youth funds be used toprovide activities to out-of-school youthapply to all youth funds?


664.400 What is a local youth program?664.405 How must local youth programs be

designed?664.410 Must local programs include each

of the ten program elements listed inWIA section 129(c)(2) as optionsavailable to youth participants?

664.420 What are leadership developmentopportunities?

664.430 What are positive social behaviors?664.440 What are supportive services for

youth?664.450 What are follow-up services for

youth?664.460 What are work experiences for

youth?664.470 Are paid work experiences

allowable activities?

Subpart E—Concurrent Enrollment

664.500 May youth participate in bothyouth and adult/dislocated workerprograms concurrently?

664.510 Are Individual Training Accountsallowed for youth participants?


664.600 Are Local Boards required to offersummer employment opportunities inthe local youth program?

664.610 How is the summer employmentopportunities element administered?

664.620 Do the core indicators described in20 CFR 666.100(a)(3) apply toparticipation in summer employmentactivities?

Subpart G—One-Stop Services to Youth

664.700 What is the connection betweenthe youth program and the One-Stopservice delivery system?

664.710 Do Local Boards have theflexibility to offer services to area youthwho are not eligible under the youthprogram through the One-Stop centers?

Subpart H—Youth Opportunity Grants

664.800 How are the recipients of YouthOpportunity Grants selected?

664.810 How does a Local Board or otherentity become eligible to receive a YouthOpportunity Grant?

664.820 Who is eligible to receive servicesunder Youth Opportunity Grants?

664.830 How are performance measures forYouth Opportunity Grants determined?


Subpart A—Youth Councils

§ 664.100 What is the youth council?(a) The duties and membership

requirements of the youth council aredescribed in WIA section 117(h) and 20CFR 661.335 and 661.340.

(b) The purpose of the youth councilis to provide expertise in youth policyand to assist the Local Board in:

(1) Developing and recommendinglocal youth employment and trainingpolicy and practice;

(2) Broadening the youth employmentand training focus in the community toincorporate a youth developmentperspective;

(3) Establishing linkages with otherorganizations serving youth in the localarea; and

(4) Taking into account a range ofissues that can have an impact on thesuccess of youth in the labor market.(WIA sec. 117(h).)

§ 664.110 Who is responsible for oversightof youth programs in the local area?

(a) The Local Board, working with theyouth council, is responsible forconducting oversight of local youthprograms operated under the Act, toensure both fiscal and programmaticaccountability.

(b) Local program oversight isconducted in consultation with the localarea’s chief elected official.

(c) The Local Board may, afterconsultation with the CEO, delegate itsresponsibility for oversight of eligibleyouth providers, as well as other youthprogram oversight responsibilities, tothe youth council, recognizing theadvantage of delegating suchresponsibilities to the youth councilwhose members have expertise in youthissues. (WIA sec. 117(d); 117(h)(4).)

Subpart B—Eligibility for YouthServices

§ 664.200 Who is eligible for youthservices?

An eligible youth is defined, underWIA sec. 101(13), as an individual who:

(a) Is age 14 through 21;(b) Is a low income individual, as

defined in the WIA section 101(25); and(c) Is within one or more of the

following categories:(1) Deficient in basic literacy skills;(2) School dropout;(3) Homeless, runaway, or foster

child;(4) Pregnant or parenting;(5) Offender; or(6) Is an individual (including a youth

with a disability) who requires



additional assistance to complete aneducational program, or to secure andhold employment. (WIA sec. 101(13).)

§ 664.205 How is the ‘‘deficient in basicliteracy skills’’ criterion in § 664.200(c)(1)defined and documented?

(a) Definitions and eligibilitydocumentation requirements regardingthe ‘‘deficient in basic literacy skills’’criterion in § 664.200(c)(1) may beestablished at the State or local level.These definitions may establish suchcriteria as are needed to address State orlocal concerns, and must include adetermination that an individual:

(1) Computes or solves problems,reads, writes, or speaks English at orbelow the 8th grade level on a generallyaccepted standardized test or acomparable score on a criterion-referenced test; or

(2) Is unable to compute or solveproblems, read, write, or speak Englishat a level necessary to function on thejob, in the individual’s family or insociety. (WIA secs. 101(19), 203(12).)

(b) In cases where the State Boardestablishes State policy on this criterion,the policy must be included in the Stateplan. (WIA secs. 101(13)(C)(i), 101(19).)

§ 664.210 How is the ‘‘requires additionalassistance to complete an educationalprogram, or to secure and holdemployment’’ criterion in § 664.200(c)(6)defined and documented?

Definitions and eligibilitydocumentation requirements regardingthe ‘‘requires additional assistance tocomplete an educational program, or tosecure and hold employment’’ criterionof § 664.200(c)(6) may be established atthe State or local level. In cases wherethe State Board establishes State policyon this criterion, the policy must beincluded in the State Plan. (WIA sec.101(13)(C)(iv).)

§ 664.215 Must youth participants beregistered to participate in the youthprogram?

(a) Yes, all youth participants must beregistered.

(b) Registration is the process ofcollecting information to support adetermination of eligibility.

(c) Equal opportunity data must becollected during the registration processon any individual who has submittedpersonal information in response to arequest by the recipient for suchinformation.

§ 664.220 Is there an exception to permityouth who are not low-income individualsto receive youth services?

Yes, up to five percent of youthparticipants served by youth programsin a local area may be individuals who

do not meet the income criterion foreligible youth, provided that they arewithin one or more of the followingcategories:

(a) School dropout;(b) Basic skills deficient, as defined in

WIA section 101(4);(c) Are one or more grade levels below

the grade level appropriate to theindividual’s age;

(d) Pregnant or parenting;(e) Possess one or more disabilities,

including learning disabilities;(f) Homeless or runaway;(g) Offender; or(h) Face serious barriers to

employment as identified by the LocalBoard. (WIA sec. 129(c)(5).)

§ 664.230 Are the eligibility barriers foreligible youth the same as the eligibilitybarriers for the five percent of youthparticipants who do not have to meetincome eligibility requirements?

No, the barriers listed in §§ 664.200and 664.220 are not the same. Both listsof eligibility barriers include schooldropout, homeless or runaway, pregnantor parenting, and offender, but each listcontains barriers not included on theother list.

§ 664.240 May a local program useeligibility for free lunches under theNational School Lunch Program as asubstitute for the income eligibility criteriaunder title I of WIA?

No, the criteria for income eligibilityunder the National School LunchProgram are not the same as the Act’sincome eligibility criteria. Therefore, theschool lunch list may not be used as asubstitute for income eligibility todetermine who is eligible for servicesunder the Act.

§ 664.250 May a disabled youth whosefamily does not meet income eligibilitycriteria under the Act be eligible for youthservices?

Yes, even if the family of a disabledyouth does not meet the incomeeligibility criteria, the disabled youthmay be considered a low-incomeindividual if the youth’s own income:

(a) Meets the income criteriaestablished in WIA section 101(25)(B);or

(b) Meets the income eligibilitycriteria for cash payments under anyFederal, State or local public assistanceprogram. (WIA sec. 101(25)(F).)

Subpart C—Out-of-School Youth

§ 664.300 Who is an ‘‘out-of-schoolyouth’’?

An out-of-school youth is anindividual who:

(a) Is an eligible youth who is a schooldropout; or

(b) Is an eligible youth who has eithergraduated from high school or holds aGED, but is basic skills deficient,unemployed, or underemployed. (WIAsec. 101(33).)

§ 664.310 When is dropout statusdetermined, particularly for youth attendingalternative schools?

A school dropout is defined as anindividual who is no longer attendingany school and who has not received asecondary school diploma or itsrecognized equivalent. A youth’sdropout status is determined at the timeof registration. A youth attending analternative school at the time ofregistration is not a dropout. Anindividual who is out-of school at thetime of registration and subsequentlyplaced in an alternative school, may beconsidered an out-of-school youth forthe purposes of the 30 percentexpenditure requirement for out-of-school youth. (WIA sec. 101(39).)

§ 664.320 Does the requirement that atleast 30 percent of youth funds be used toprovide activities to out-of-school youthapply to all youth funds?

(a) Yes, the 30 percent requirementapplies to the total amount of all fundsallocated to a local area under WIAsection 128(b)(2)(A) or (b)(3), except forlocal area expenditures foradministrative purposes under 20 CFR667.210(a)(2).

(b) Although it is not necessary toensure that 30 percent of such fundsspent on summer employmentopportunities (or any other particularelement of the youth program) are spenton out-of-school youth, the funds spenton these activities are included in thetotal to which the 30 percentrequirement applies.

(c) There is a limited exception, atWIA section 129(c)(4)(B), under whichcertain small States may apply to theSecretary to reduce the minimumamount that must be spent on out-of-school youth. (WIA sec. 129(c)(4).)


§ 664.400 What is a local youth program?A local youth program is defined as

those youth activities offered by a LocalWorkforce Investment Board for adesignated local workforce investmentarea, as specified in 20 CFR part 661.

§ 664.405 How must local youth programsbe designed?

(a) The design framework of localyouth programs must:

(1) Provide an objective assessment ofeach youth participant, that meets therequirements of WIA section



129(c)(1)(A), and includes a review ofthe academic and occupational skilllevels, as well as the service needs, ofeach youth;

(2) Develop an individual servicestrategy for each youth participant thatmeets the requirements of WIA section129(c)(1)(B), including identifying anage-appropriate career goal andconsideration of the assessment resultsfor each youth; and

(3) Provide preparation forpostsecondary educationalopportunities, provide linkages betweenacademic and occupational learning,provide preparation for employment,and provide effective connections tointermediary organizations that providestrong links to the job market andemployers.

(4) The requirement in WIA section123 that eligible providers of youthservices be selected by awarding a grantor contract on a competitive basis doesnot apply to the design frameworkcomponent, such as services for intake,objective assessment and thedevelopment of individual servicestrategy, when these services areprovided by the grant recipient/fiscalagent.

(b) The local plan must describe thedesign framework for youth programdesign in the local area, and how the tenprogram elements required in § 664.410are provided within that framework.

(c) Local Boards must ensureappropriate links to entities that willfoster the participation of eligible localarea youth. Such links may includeconnections to:

(1) Local area justice and lawenforcement officials;

(2) Local public housing authorities;(3) Local education agencies;(4) Job Corps representatives; and(5) Representatives of other area youth

initiatives, including those that servehomeless youth and other public andprivate youth initiatives.

(d) Local Boards must ensure that thereferral requirements in WIA section129(c)(3) for youth who meet theincome eligibility criteria are met,including:

(1) Providing these youth withinformation regarding the full array ofapplicable or appropriate servicesavailable through the Local Board orother eligible providers, or One-Stoppartners; and

(2) Referring these youth toappropriate training and educationalprograms that have the capacity to servethem either on a sequential orconcurrent basis.

(e) In order to meet the basic skillsand training needs of eligible applicantswho do not meet the enrollment

requirements of a particular program orwho cannot be served by the program,each eligible youth provider mustensure that these youth are referred:

(1) For further assessment, asnecessary, and

(2) To appropriate programs, inaccordance with paragraph (d)(2) of thissection.

(f) Local Boards must ensure thatparents, youth participants, and othermembers of the community withexperience relating to youth programsare involved in both the design andimplementation of its youth programs.

(g) The objective assessment requiredunder paragraph (a)(1) of this section orthe individual service strategy requiredunder paragraph (a)(2) of this section isnot required if the program providerdetermines that it is appropriate to usea recent objective assessment orindividual service strategy that wasdeveloped under another education ortraining program. (WIA section129(c)(1).)

§ 664.410 Must local programs includeeach of the ten program elements listed inWIA section 129(c)(2) as options availableto youth participants?

(a) Yes, local programs must make thefollowing services available to youthparticipants:

(1) Tutoring, study skills training, andinstruction leading to secondary schoolcompletion, including dropoutprevention strategies;

(2) Alternative secondary schoolofferings;

(3) Summer employmentopportunities directly linked toacademic and occupational learning;

(4) Paid and unpaid workexperiences, including internships andjob shadowing, as provided in§§ 664.460 and 664.470;

(5) Occupational skill training;(6) Leadership development

opportunities, which includecommunity service and peer-centeredactivities encouraging responsibility andother positive social behaviors;

(7) Supportive services, which mayinclude the services listed in § 664.440;

(8) Adult mentoring for a duration ofat least twelve (12) months, that mayoccur both during and after programparticipation;

(9) Followup services, as provided in§ 664.450; and

(10) Comprehensive guidance andcounseling, including drug and alcoholabuse counseling, as well as referrals tocounseling, as appropriate to the needsof the individual youth.

(b) Local programs have the discretionto determine what specific programservices will be provided to a youth

participant, based on each participant’sobjective assessment and individualservice strategy. (WIA sec. 129(c)(2).)

§ 664.420 What are leadershipdevelopment opportunities?

Leadership developmentopportunities are opportunities thatencourage responsibility, employability,and other positive social behaviors suchas:

(a) Exposure to postsecondaryeducational opportunities;

(b) Community and service learningprojects;

(c) Peer-centered activities, includingpeer mentoring and tutoring;

(d) Organizational and team worktraining, including team leadershiptraining;

(e) Training in decision-making,including determining priorities; and

(f) Citizenship training, including lifeskills training such as parenting, workbehavior training, and budgeting ofresources. (WIA sec. 129(c)(2)(F).)

§ 664.430 What are positive socialbehaviors?

Positive social behaviors are outcomesof leadership opportunities, oftenreferred to as soft skills, which areincorporated by many local programs aspart of their menu of services. Positivesocial behaviors focus on areas that mayinclude the following:

(a) Positive attitudinal development;(b) Self esteem building;(c) Openness to working with

individuals from diverse racial andethnic backgrounds;

(d) Maintaining healthy lifestyles,including being alcohol and drug free;

(e) Maintaining positive relationshipswith responsible adults and peers, andcontributing to the well being of one’scommunity, including voting;

(f) Maintaining a commitment tolearning and academic success;

(g) Avoiding delinquency;(h) Postponed and responsible

parenting; and(i) Positive job attitudes and work

skills. (WIA sec. 129(c)(2)(F).)

§ 664.440 What are supportive services foryouth?

Supportive services for youth, asdefined in WIA section 101(46), mayinclude the following:

(a) Linkages to community services;(b) Assistance with transportation;(c) Assistance with child care and

dependent care;(d) Assistance with housing;(e) Referrals to medical services; and(f) Assistance with uniforms or other

appropriate work attire and work-related tools, including such items aseye glasses and protective eye gear.(WIA sec. 129(c)(2)(G).)



§ 664.450 What are follow-up services foryouth?

(a) Follow-up services for youth mayinclude:

(1) The leadership development andsupportive service activities listed in§§ 664.420 and 664.440;

(2) Regular contact with a youthparticipant’s employer, includingassistance in addressing work-relatedproblems that arise;

(3) Assistance in securing betterpaying jobs, career development andfurther education;

(4) Work-related peer support groups;(5) Adult mentoring; and(6) Tracking the progress of youth in

employment after training.(b) All youth participants must

receive some form of follow-up servicesfor a minimum duration of 12 months.Follow-up services may be providedbeyond twelve (12) months at the Stateor Local Board’s discretion. The types ofservices provided and the duration ofservices must be determined based onthe needs of the individual. The scopeof these follow-up services may be lessintensive for youth who have onlyparticipated in summer youthemployment opportunities. (WIA sec.129(c)(2)(I).)

§ 664.460 What are work experiences foryouth?

(a) Work experiences are planned,structured learning experiences thattake place in a workplace for a limitedperiod of time. As provided in WIAsection 129(c)(2)(D) and § 664.470, workexperiences may be paid or unpaid.

(b) Work experience workplaces maybe in the private, for-profit sector; thenon-profit sector; or the public sector.

(c) Work experiences are designed toenable youth to gain exposure to theworking world and its requirements.Work experiences are appropriate anddesirable activities for many youththroughout the year. Work experiencesshould help youth acquire the personalattributes, knowledge, and skills neededto obtain a job and advance inemployment. The purpose is to providethe youth participant with theopportunities for career exploration andskill development and is not to benefitthe employer, although the employermay, in fact, benefit from the activitiesperformed by the youth. Workexperiences may be subsidized orunsubsidized and may include thefollowing elements:

(1) Instruction in employability skillsor generic workplace skills such asthose identified by the Secretary’sCommission on Achieving NecessarySkills (SCANS);

(2) Exposure to various aspects of anindustry;

(3) Progressively more complex tasks;(4) Internships and job shadowing;(5) The integration of basic academic

skills into work activities;(6) Supported work, work adjustment,

and other transition activities;(7) Entrepreneurship;(8) Service learning;(9) Paid and unpaid community

service; and(10) Other elements designed to

achieve the goals of work experiences.(d) In most cases, on-the-job training

is not an appropriate work experiencesactivity for youth participants under age18. Local program operators maychoose, however, to use this servicestrategy for eligible youth when it isappropriate based on the needsidentified by the objective assessment ofan individual youth participant. (WIAsec. 129(c)(2)(D).)

§ 664.470 Are paid work experiencesallowable activities?

Funds under the Act may be used topay wages and related benefits for workexperiences in the public; private, for-profit or non-profit sectors where theobjective assessment and individualservice strategy indicate that workexperiences are appropriate. (WIA sec.129(c)(2)(D).)

Subpart E—Concurrent Enrollment

§ 664.500 May youth participate in bothyouth and adult/dislocated workerprograms concurrently?

(a) Yes, under the Act, eligible youthare 14 through 21 years of age. Adultsare defined in the Act as individuals age18 and older. Thus, individuals ages 18through 21 may be eligible for bothadult and youth programs. There is nospecified age for the dislocated workerprogram.

(b) Individuals who meet therespective eligibility requirements mayparticipate in adult and youth programsconcurrently. Concurrent enrollment isallowable for youth served in programsunder WIA titles I or II. Suchindividuals must be eligible under theyouth or adult/dislocated workereligibility criteria applicable to theservices received. Local programoperators may determine, forindividuals in this age group, theappropriate level and balance ofservices under the youth, adult,dislocated worker, or other services.

(c) Local program operators mustidentify and track the funding streamswhich pay the costs of services providedto individuals who are participating inyouth and adult/dislocated workerprograms concurrently, and ensure thatservices are not duplicated.

§ 664.510 Are Individual Training Accountsallowed for youth participants?

No, however, individuals age 18 andabove, who are eligible for trainingservices under the adult and dislocatedworker programs, may receiveIndividual Training Accounts throughthose programs. Requirements forconcurrent participation requirementsare set forth in § 664.500. To the extentpossible, in order to enhance youthparticipant choice, youth participantsshould be involved in the selection ofeducational and training activities.


§ 664.600 Are Local Boards required tooffer summer employment opportunities inthe local youth program?

(a) Yes, Local Boards are required tooffer summer youth employmentopportunities that link academic andoccupational learning as part of themenu of services required in§ 664.410(a).

(b) Summer youth employment mustprovide direct linkages to academic andoccupational learning, and may provideother elements and strategies asappropriate to serve the needs and goalsof the participants.

(c) Local Boards may determine howmuch of available youth funds will beused for summer and for year-roundyouth activities.

(d) The summer youth employmentopportunities element is not intended tobe a stand-alone program. Localprograms should integrate a youth’sparticipation in that element into acomprehensive strategy for addressingthe youth’s employment and trainingneeds. Youths who participate insummer employment opportunitiesmust be provided with a minimum oftwelve months of followup services, asrequired in § 664.450. (WIA sec.129(c)(2)(C).)

§ 664.610 How is the summer employmentopportunities element administered?

Chief elected officials and LocalBoards are responsible for ensuring thatthe local youth program providessummer employment opportunities toyouth. The chief elected officials (whichmay include local government unitsoperating as a consortium) are the grantrecipients for local youth funds, unlessanother entity is chosen to be grantrecipient or fiscal agent under WIAsection 117(d)(3)(B). If, in theadministration of the summeremployment opportunities element ofthe local youth program, providers otherthan the grant recipient/fiscal agent, areused to provide summer youthemployment opportunities, these



providers must be selected by awardinga grant or contract on a competitivebasis, based on the recommendation ofthe youth council and on criteriacontained in the State Plan. However,the selection of employers who areproviding unsubsidized employmentopportunities may be excluded from thecompetitive process. (WIA sec.129(c)(2)(C).)

§ 664.620 Do the core indicators describedin 20 CFR 666.100(a)(3) apply toparticipation in summer employmentactivities?

Yes, the summer employmentopportunities element is one of anumber of activities authorized by theWIA youth program. WIA section136(b)(2) (A)(ii) and(B) provides specificcore indicators of performance foryouth, and requires that all participatingyouth be included in the determinationof whether the local levels ofperformance are met. Program operatorscan help ensure positive outcomes foryouth participants by providing themwith continuity of services.

Subpart G—One-Stop Services toYouth

§ 664.700 What is the connection betweenthe youth program and the One-Stopservice delivery system?

(a) The chief elected official (ordesignee, under WIA section117(d)(3)(B)), as the local grant recipientfor the youth program is a required One-Stop partner and is subject to therequirements that apply to suchpartners, described in 20 CFR part 662.

(b) In addition to the provisions of 20CFR part 662, connections between theyouth program and the One-Stop systemmay include those that facilitate:

(1) The coordination and provision ofyouth activities;

(2) Linkages to the job market andemployers;

(3) Access for eligible youth to theinformation and services required in§§ 664.400 and 664.410; and

(4) Other activities designed toachieve the purposes of the youthprogram and youth activities asdescribed in WIA section 129(a). (WIAsecs. 121(b)(1)(B)(i); 129.)

§ 664.710 Do Local Boards have theflexibility to offer services to area youthwho are not eligible under the youthprogram through the One-Stop centers?

Yes, however, One-Stop services fornon-eligible youth must be funded byprograms that are authorized to provideservices to such youth. For example,basic labor exchange services under theWagner-Peyser Act may be provided toany youth.

Subpart H—Youth Opportunity Grants

§ 664.800 How are the recipients of YouthOpportunity Grants selected?

(a) Youth Opportunity Grants areawarded through a competitiveselection process. The Secretaryestablishes appropriate applicationprocedures, selection criteria, and anapproval process for awarding YouthOpportunity Grants to applicants whichcan accomplish the purpose of the Actand use available funds in an effectivemanner in the Solicitation for GrantApplications announcing thecompetition.

(b) The Secretary distributes grantsequitably among urban and rural areasby taking into consideration such factorsas the following:

(1) The poverty rate in urban andrural communities;

(2) The number of people in povertyin urban and rural communities; and

(3) The quality of proposals received.(WIA sec.169(a) and (e).)

§ 664.810 How does a Local Board or otherentity become eligible to receive a YouthOpportunity Grant?

(a) A Local Board is eligible to receivea Youth Opportunity Grant if it servesa community that:

(1) Has been designated as anempowerment zone (EZ) or enterprisecommunity (EC) under section 1391 ofthe Internal Revenue Code of 1986;

(2) Is located in a State that does nothave an EZ or an EC and that has beendesignated by its Governor as a highpoverty area; or

(3) Is one of two areas in a State thathas been designated by the Governor asan area for which a local board mayapply for a Youth Opportunity Grant,and that meets the poverty rate criteriain section 1392 (a)(4), (b), and (d) of theInternal Revenue Code of 1986.

(b) An entity other than a Local Boardis eligible to receive a grant if thatentity:

(1) Is a WIA Indian and NativeAmerican grant recipient under WIAsection 166; and

(2) Serves a community that:(i) Meets the poverty rate criteria in

section 1392(a)(4), (b), and (d) of theInternal Revenue Code of 1986; and

(ii) Is located on an Indian reservationor serves Oklahoma Indians or AlaskaNative villages or Native groups, asprovided in WIA section 169 (d)(2)(B).(WIA sec. 169(c) and (d).)

§ 664.820 Who is eligible to receiveservices under Youth Opportunity Grants?

All individuals ages 14 through 21who reside in the community identifiedin the grant are eligible to receive

services under the grant. (WIA sec.169(a).)

§ 664.830 How are performance measuresfor Youth Opportunity Grants determined?

(a) The Secretary negotiatesperformance measures, includingappropriate performance levels for eachindicator, with each selected grantee,based on information contained in theapplication.

(b) Performance indicators for themeasures negotiated under YouthOpportunity Grants are the indicators ofperformance provided in WIA sections136(b)(2)(A) and (B). (WIA sec. 169(f).).

PART 665—STATEWIDE WORKFORCEINVESTMENT ACTIVITIES UNDERTITLE I OF THE WORKFORCEINVESTMENT ACT

Subpart A—General DescriptionSec.665.100 What are the Statewide workforce

investment activities under title I ofWIA?

665.110 How are Statewide workforceinvestment activities funded?

Subpart B—Required and AllowableStatewide Workforce Investment Activities665.200 What are required Statewide

workforce investment activities?665.210 What are allowable Statewide

workforce investment activities?665.220 Who is an ‘‘incumbent worker’’ for

purposes of Statewide workforceinvestment activities?

Subpart C—Rapid Response Activities665.300 What are rapid response activities

and who is responsible for providingthem?

665.310 What rapid response activities arerequired?

665.320 May other activities be undertakenas part of rapid response?

665.330 Are the NAFTA–TAA programrequirements for rapid response alsorequired activities?

665.340 What is meant by ‘‘provision ofadditional assistance’’ in WIA section134(a)(2)(A)(ii)?


Subpart A—General Description

§ 665.100 What are the Statewideworkforce investment activities under title Iof WIA?

Statewide workforce investmentactivities include Statewideemployment and training activities foradults and dislocated workers, asdescribed in WIA section 134(a), andStatewide youth activities, as describedin WIA section 129(b). They includeboth required and allowable activities.In accordance with the requirements ofthis subpart, the State may developpolicies and strategies for use of



Statewide workforce investment funds.Descriptions of these policies andstrategies must be included in the StatePlan. (WIA secs. 129(b), 134(a).)

§ 665.110 How are Statewide workforceinvestment activities funded?

(a) Except for the Statewide rapidresponse activities described inparagraph (c) of this section, Statewideworkforce investment activities aresupported by funds reserved by theGovernor under WIA section 128(a).

(b) Funds reserved by the Governorfor Statewide workforce investmentactivities may be combined and used forany of the activities authorized in WIAsections 129(b), 134(a)(2)(B) or134(a)(3)(A) (which are described in§§ 665.200 and 665.210), regardless ofwhether the funds were allotted throughthe youth, adult, or dislocated workerfunding streams.

(c) Funds for Statewide rapidresponse activities are reserved underWIA section 133(a)(2) and may be usedto provide the activities authorized atsection 134(a)(2)(A) (which aredescribed in §§ 665.310 through665.330). (WIA secs. 129(b), 133(a)(2),134(a)(2)(B), and 134(a)(3)(A).)

Subpart B—Required and AllowableStatewide Workforce InvestmentActivities

§ 665.200 What are required Statewideworkforce investment activities?

Required Statewide workforceinvestment activities are:

(a) Required rapid response activities,as described in § 665.310;

(b) Disseminating:(1) The State list of eligible providers

of training services (including thoseproviding non-traditional trainingservices), for adults and dislocatedworkers;

(2) Information identifying eligibleproviders of on-the-job training (OJT)and customized training;

(3) Performance and program costinformation about these providers, asdescribed in 20 CFR 663.540; and

(4) A list of eligible providers of youthactivities as described in WIA section123;

(c) States must assure that theinformation listed in paragraphs (b)(1)through (4) of this section is widelyavailable.

(d) Conducting evaluations, underWIA section 136(e), of workforceinvestment activities for adults,dislocated workers and youth, in orderto establish and promote methods forcontinuously improving such activitiesto achieve high-level performancewithin, and high-level outcomes from,

the Statewide workforce investmentsystem. Such evaluations must bedesigned and conducted in conjunctionwith the State and Local Boards, andmust include analysis of customerfeedback, outcome and processmeasures in the workforce investmentsystem. To the maximum extentpracticable, these evaluations should beconducted in coordination with Federalevaluations carried out under WIAsection 172.

(e) Providing incentive grants:(1) To local areas for regional

cooperation among Local Boards(including Local Boards for a designatedregion, as described in 20 CFR 661.290);

(2) For local coordination of activitiescarried out under WIA; and

(3) For exemplary performance bylocal areas on the performancemeasures.

(f) Providing technical assistance tolocal areas that fail to meet localperformance measures.

(g) Assisting in the establishment andoperation of One-Stop delivery systems,in accordance with the strategydescribed in the State workforceinvestment plan. (WIA sec. 112(b)(14).)

(h) Providing additional assistance tolocal areas that have highconcentrations of eligible youth.

(i) Operating a fiscal and managementaccountability information system,based on guidelines established by theSecretary after consultation with theGovernors, chief elected officials, andOne-Stop partners, as required by WIAsection 136(f). (WIA secs. 129(b)(2),134(a)(2), and 136(e)(2).)

§ 665.210 What are allowable Statewideworkforce investment activities?

Allowable Statewide workforceinvestment activities include:

(a) State administration of the adult,dislocated worker and youth workforceinvestment activities, consistent withthe five percent administrative costlimitation at 20 CFR 667.210(a)(1).

(b) Providing capacity building andtechnical assistance to local areas,including Local Boards, One-Stopoperators, One-Stop partners, andeligible providers, which may include:

(1) Staff development and training;and

(2) The development of exemplaryprogram activities.

(c) Conducting research anddemonstrations.

(d) Establishing and implementing:(1) Innovative incumbent worker

training programs, which may includean employer loan program to assist inskills upgrading; and

(2) Programs targeted toEmpowerment Zones and EnterpriseCommunities.

(e) Providing support to local areas forthe identification of eligible trainingproviders.

(f) Implementing innovative programsfor displaced homemakers, andprograms to increase the number ofindividuals trained for and placed innon-traditional employment.

(g) Carrying out such adult anddislocated worker employment andtraining activities as the Statedetermines are necessary to assist localareas in carrying out local employmentand training activities.

(h) Carrying out youth activitiesStatewide.

(i) Preparation and submission to theSecretary of the annual performanceprogress report as described in 20 CFR667.300(e). (WIA secs. 129(b)(3) and134(a)(3).)

§ 665.220 Who is an ‘‘incumbent worker’’for purposes of Statewide workforceinvestment activities?

States may establish policies anddefinitions to determine which workers,or groups of workers, are eligible forincumbent worker services under thissubpart. An incumbent worker is anindividual who is employed, but anincumbent worker does not necessarilyhave to meet the eligibility requirementsfor intensive and training services foremployed adults and dislocated workersat 20 CFR 663.220(b) and 663.310. (WIAsec. 134(a)(3)(A)(iv)(I).)

Subpart C—Rapid Response Activities

§ 665.300 What are rapid responseactivities and who is responsible forproviding them?

(a) Rapid response activities aredescribed in §§ 665.310 through665.330. They encompass the activitiesnecessary to plan and deliver services toenable dislocated workers to transitionto new employment as quickly aspossible, following either a permanentclosure or mass layoff, or a natural orother disaster resulting in a mass jobdislocation.

(b) The State is responsible forproviding rapid response activities.Rapid response is a required activitycarried out in local areas by the State,or an entity designated by the State, inconjunction with the Local Board andchief elected officials. The State mustestablish methods by which to provideadditional assistance to local areas thatexperience disasters, mass layoffs, plantclosings, or other dislocation eventswhen such events substantially increasethe number of unemployed individuals.

(c) States must establish a rapidresponse dislocated worker unit to carryout Statewide rapid response activities.



(WIA secs. 101(38), 112(b)(17)(A)(ii) and134(a)(2)(A).)

§ 665.310 What rapid response activitiesare required?

Rapid response activities mustinclude:

(a) Immediate and on-site contactwith the employer, representatives ofthe affected workers, and the localcommunity, which may include anassessment of the:

(1) Layoff plans and schedule of theemployer;

(2) Potential for averting the layoff(s)in consultation with State or localeconomic development agencies,including private sector economicdevelopment entities;

(3) Background and probableassistance needs of the affected workers;

(4) Reemployment prospects forworkers in the local community; and

(5) Available resources to meet theshort and long-term assistance needs ofthe affected workers.

(b) The provision of information andaccess to unemployment compensationbenefits, comprehensive One-Stopsystem services, and employment andtraining activities, includinginformation on the Trade AdjustmentAssistance (TAA) program and theNAFTA–TAA program (19 U.S.C. 2271et seq.);

(c) The provision of guidance and/orfinancial assistance in establishing alabor-management committeevoluntarily agreed to by labor andmanagement, or a workforce transitioncommittee comprised of representativesof the employer, the affected workersand the local community. Thecommittee may devise and oversee animplementation strategy that respondsto the reemployment needs of theworkers. The assistance to thiscommittee may include:

(1) The provision of training andtechnical assistance to members of thecommittee;

(2) Funding the operating costs of acommittee to enable it to provide adviceand assistance in carrying out rapidresponse activities and in the designand delivery of WIA-authorized servicesto affected workers. Typically, suchsupport will last no longer than sixmonths; and

(3) Providing a list of potentialcandidates to serve as a neutralchairperson of the committee.

(d) The provision of emergencyassistance adapted to the particularclosing, layoff or disaster.

(e) The provision of assistance to thelocal board and chief elected official(s)to develop a coordinated response to thedislocation event and, as needed, obtain

access to State economic developmentassistance. Such coordinated responsemay include the development of anapplication for National EmergencyGrant under 20 CFR part 671. (WIA secs.101(38) and 134(a)(2)(A).)

§ 665.320 May other activities beundertaken as part of rapid response?

Yes, a State or designated entity mayprovide rapid response activities inaddition to the activities required to beprovided under § 665.310. In order toprovide effective rapid response uponnotification of a permanent closure ormass layoff, or a natural or otherdisaster resulting in a mass jobdislocation, the State or designatedentity may:

(a) In conjunction, with otherappropriate Federal, State and Localagencies and officials, employerassociations, technical councils or otherindustry business councils, and labororganizations:

(1) Develop prospective strategies foraddressing dislocation events, thatensure rapid access to the broad rangeof allowable assistance;

(2) Identify strategies for the aversionof layoffs; and

(3) Develop and maintain mechanismsfor the regular exchange of informationrelating to potential dislocations,available adjustment assistance, and theeffectiveness of rapid responsestrategies.

(b) In collaboration with theappropriate State agency(ies), collectand analyze information related toeconomic dislocations, includingpotential closings and layoffs, and allavailable resources in the State fordislocated workers in order to providean adequate basis for effective programmanagement, review and evaluation ofrapid response and layoff aversionefforts in the State.

(c) Participate in capacity buildingactivities, including providinginformation about innovative andsuccessful strategies for servingdislocated workers, with local areasserving smaller layoffs.

(d) Assist in devising and overseeingstrategies for:

(1) Layoff aversion, such asprefeasibility studies of avoiding a plantclosure through an option for acompany or group, including theworkers, to purchase the plant orcompany and continue it in operation;

(2) Incumbent worker training,including employer loan programs foremployee skill upgrading; and

(3) Linkages with economicdevelopment activities at the Federal,State and local levels, including FederalDepartment of Commerce programs and

available State and local businessretention and recruitment activities.

§ 665.330 Are the NAFTA–TAA programrequirements for rapid response alsorequired activities?

The Governor must ensure that rapidresponse activities under WIA are madeavailable to workers who, under theNAFTA Implementation Act (PublicLaw 103–182), are members of a groupof workers (including those in anyagricultural firm or subdivision of anagricultural firm) for which theGovernor has made a preliminaryfinding that:

(a) A significant number or proportionof the workers in such firm or anappropriate subdivision of the firm havebecome totally or partially separated, orare threatened to become totally orpartially separated; and

(b) Either: (1) The sales or production,or both, of such firm or subdivisionhave decreased absolutely; and

(2) Imports from Mexico or Canada ofarticles like or directly competitive withthose produced by such firm orsubdivision have increased; or

(c) There has been a shift inproduction by such workers’ firm orsubdivision to Mexico or Canada ofarticles which are produced by the firmor subdivision.

§ 665.340 What is meant by ‘‘provision ofadditional assistance’’ in WIA section134(a)(2)(A)(ii)?

Up to 25 percent of dislocated workerfunds may be reserved for rapidresponse activities. Once the State hasreserved adequate funds for rapidresponse activities, such as thosedescribed in § 665.310 and 665.320, theremainder of the funds may be used bythe State to provide funds to local areas,that experience increased numbers ofunemployed individuals due to naturaldisasters, plant closings, mass layoffs orother events, for provision of directservices to participants (such asintensive, training, and other services) ifthere are not adequate local fundsavailable to assist the dislocatedworkers.

PART 666—PERFORMANCEACCOUNTABILITY UNDER TITLE I OFTHE WORKFORCE INVESTMENT ACT

Subpart A—State Measures of Performance

Sec.666.100 What performance indicators must

be included in a State’s plan?666.110 May a Governor require additional

indicators of performance?666.120 What are the procedures for

negotiating annual levels ofperformance?



666.130 Under what conditions may a Stateor DOL request revisions to the Statenegotiated levels of performance?

666.140 Which individuals receivingservices are included in the coreindicators of performance?

666.150 What responsibility do States haveto use quarterly wage record informationfor performance accountability?

Subpart B—Incentives and Sanctions forState Performance

666.200 Under what circumstances is aState eligible for an Incentive Grant?

666.205 What are the time frames underwhich States submit performanceprogress reports and apply for incentivegrants?

666.210 How may Incentive Grant funds beused?

666.220 What information must beincluded in a State Board’s applicationfor an Incentive Grant?

666.230 How does the Departmentdetermine the amounts for IncentiveGrant awards?

666.240 Under what circumstances may asanction be applied to a State that failsto achieve negotiated levels ofperformance for title I?

Subpart C—Local Measures of Performance

666.300 What performance indicators applyto local areas?

666.310 What levels of performance applyto the indicators of performance in localareas?

Subpart D—Incentives and Sanctions forLocal Performance

666.400 Under what circumstances arelocal areas eligible for State IncentiveGrants?

666.410 How may local incentive awards beused?

666.420 Under what circumstances may asanction be applied to local areas forpoor performance?


Subpart A—State Measures ofPerformance

§ 666.100 What performance indicatorsmust be included in a State’s plan?

(a) All States submitting a State Planunder WIA title I, subtitle B mustpropose expected levels of performancefor each of the core indicators ofperformance for the adult, dislocatedworker and youth programs,respectively and the two customersatisfaction indicators.

(1) For the Adult program, theseindicators are:

(i) Entry into unsubsidizedemployment;

(ii) Retention in unsubsidizedemployment six months after entry intothe employment;

(iii) Earnings received inunsubsidized employment six monthsafter entry into the employment; and

(iv) Attainment of a recognizedcredential related to achievement ofeducational skills (such as a secondaryschool diploma or its recognizedequivalent), or occupational skills, byparticipants who enter unsubsidizedemployment.

(2) For the Dislocated Workerprogram, these indicators are:

(i) Entry into unsubsidizedemployment;

(ii) Retention in unsubsidizedemployment six months after entry intothe employment;

(iii) Earnings received inunsubsidized employment six monthsafter entry into the employment; and

(iv) Attainment of a recognizedcredential related to achievement ofeducational skills (such as a secondaryschool diploma or its recognizedequivalent), or occupational skills, byparticipants who enter unsubsidizedemployment.

(3) For the Youth program, theseindicators are:

(i) For eligible youth aged 14 through18:

(A) Attainment of basic skills goals,and, as appropriate, work readiness oroccupational skills goals, up to amaximum of three goals per year;

(B) Attainment of secondary schooldiplomas and their recognizedequivalents; and

(C) Placement and retention inpostsecondary education, advancedtraining, military service, employment,or qualified apprenticeships.

(ii) For eligible youth aged 19 through21:

(A) Entry into unsubsidizedemployment;

(B) Retention in unsubsidizedemployment six months after entry intothe employment;

(C) Earnings received in unsubsidizedemployment six months after entry intothe employment; and

(D) Attainment of a recognizedcredential related to achievement ofeducational skills (such as a secondaryschool diploma or its recognizedequivalent), or occupational skills, byparticipants who enter post-secondaryeducation, advanced training, orunsubsidized employment.

(4) A single customer satisfactionmeasure for employers and a singlecustomer satisfaction indicator forparticipants must be used for the WIAtitle I, subtitle B programs for adults,dislocated workers and youth. (WIA sec.136(b)(2).)

(b) After consultation with therepresentatives identified in WIAsections 136(i) and 502(b), theDepartments of Labor and Educationwill issue definitions for the

performance indicators establishedunder title I and title II of WIA. (WIAsec. 136 (b), (f) and (i).)

§ 666.110 May a Governor requireadditional indicators of performance?

Yes, Governors may developadditional indicators of performance foradults, youth and dislocated workeractivities. These indicators must beincluded in the State Plan. (WIA sec.136(b)(2)(C).)

§ 666.120 What are the procedures fornegotiating annual levels of performance?

(a) We issue instructions on thespecific information that mustaccompany the State Plan and that isused to review the State’s expectedlevels of performance. The instructionsmay require that levels of performancefor years two and three be expressed asa percentage improvement over theimmediately preceding year’sperformance, consistent with theobjective of continuous improvement.

(b) States must submit expected levelsof performance for the requiredindicators for each of the first threeprogram years covered by the Plan.

(c) The Secretary and the Governormust reach agreement on levels ofperformance for each core indicator andthe customer satisfaction indicators. Innegotiating these levels, the followingmust be taken into account:

(1) The expected levels ofperformance identified in the State Plan;

(2) The extent to which the levels ofperformance for each core indicatorassist in achieving high customersatisfaction;

(3) The extent to which the levels ofperformance promote continuousimprovement and ensure optimal returnon the investment of Federal funds; and

(4) How the levels compare with thoseof other States, taking into accountfactors including differences ineconomic conditions, participantcharacteristics, and the proposed servicemix and strategies.

(d) The levels of performance agreedto under paragraph (c) of this sectionwill be the State’s negotiated levels ofperformance for the first three years ofthe State Plan. These levels will be usedto determine whether sanctions will beapplied or incentive grant funds will beawarded.

(e) Before the fourth year of the StatePlan, the Secretary and the Governormust reach agreement on levels ofperformance for each core indicator andthe customer satisfaction indicators forthe fourth and fifth years covered by theplan. In negotiating these levels, thefactors listed in paragraph (c) of thissection must be taken into account.



(f) The levels of performance agreed tounder paragraph (e) of this section willbe the State negotiated levels ofperformance for the fourth and fifthyears of the plan and must beincorporated into the State Plan.

(g) Levels of performance for theadditional indicators developed by theGovernor, including additionalindicators to demonstrate and measurecontinuous improvement toward goalsidentified by the State, are not part ofthe negotiations described in paragraphs(c) and (e) of this section. (WIA sec.136(b)(3).)

(h) State negotiated levels ofperformance may be revised inaccordance with § 666.130.

§ 666.130 Under what conditions may aState or DOL request revisions to the Statenegotiated levels of performance?

(a) The DOL guidelines describe whenand under what circumstances aGovernor may request revisions tonegotiated levels. These circumstancesinclude significant changes in economicconditions, in the characteristics ofparticipants entering the program, or inthe services to be provided from whenthe initial plan was submitted andapproved. (WIA sec. 136(b)(3)(A)(vi).)

(b) The guidelines will establish thecircumstances under which a State willbe required to submit revisions underspecified circumstances.

§ 666.140 Which individuals receivingservices are included in the core indicatorsof performance?

(a)(1) The core indicators ofperformance apply to all individualswho are registered under 20 CFR663.105 and 664.215 for the adult,dislocated worker and youth programs,except for those adults and dislocatedworkers who participate exclusively inself-service or informational activities.(WIA sec. 136(b)(2)(A).)

(2) Self-service and informationalactivities are those core services that aremade available and accessible to thegeneral public, that are designed toinform and educate individuals aboutthe labor market and their employmentstrengths, weaknesses, and the range ofservices appropriate to their situation,and that do not require significant staffinvolvement with the individual interms of resources or time.

(b) For registered participants, astandardized record that includesappropriate performance informationmust be maintained in accordance withWIA section 185(a)(3).

(c) Performance will be measured onthe basis of results achieved byregistered participants, and will reflectservices provided under WIA title I,

subtitle B programs for adults,dislocated workers and youth.Performance may also take into accountservices provided to participants byother One-Stop partner programs andactivities, to the extent that the localMOU provides for the sharing ofparticipant information.

§ 666.150 What responsibility do Stateshave to use quarterly wage recordinformation for performanceaccountability?

(a) States must, consistent with Statelaws, use quarterly wage recordinformation in measuring the progresson State and local performancemeasures. In order to meet thisrequirement the use of social securitynumbers from registered participantsand such other information as isnecessary to measure the progress ofthose participants through quarterlywage record information is authorized.

(b) The State must include in the StatePlan a description of the State’sperformance accountability system, anda description of the State’s strategy forusing quarterly wage record informationto measure the progress on State andlocal performance measures. Thedescription must identify the entitiesthat may have access to quarterly wagerecord information for this purpose.

(c) ‘‘Quarterly wage recordinformation’’ means informationregarding wages paid to an individual,the social security account number (ornumbers, if more than one) of theindividual and the name, address, State,and (when known) the Federalemployer identification number of theemployer paying the wages to theindividual. (WIA sec. 136(f)(2).)

Subpart B—Incentives and Sanctionsfor State Performance

§ 666.200 Under what circumstances is aState eligible for an Incentive Grant?

A State is eligible to apply for anIncentive Grant if its performance forthe immediately preceding yearexceeds:

(a) The State’s negotiated levels ofperformance for the required coreindicators for the adult, dislocatedworker and youth programs under titleI of WIA as well as the customersatisfaction indicators for WIA title Iprograms;

(b) The adjusted levels of performancefor title II Adult Education and FamilyLiteracy programs; and

(c) The adjusted levels of performanceunder section 113 of the Carl D. PerkinsVocational and Technical Education Act(20 U.S.C. 2301 et seq.). (WIA sec. 503.)

§ 666.205 What are the time frames underwhich States submit performance progressreports and apply for incentive grants?

(a) State performance progress reportsmust be filed by the due dateestablished in reporting instructionsissued by the Department.

(b) Based upon the reports filed underparagraph (a) of this section, we willdetermine the amount of fundsavailable, under WIA title I, to eacheligible State for incentive grants, inaccordance with the criteria of§ 666.230. We will publish the awardamounts for each eligible State, afterconsultation with the Secretary ofEducation, within ninety (90) days afterthe due date for performance progressreports established under paragraph (a)of this section.

(c) Within forty-five (45) days of thepublication of award amounts underparagraph (b) of this section, States mayapply for incentive grants in accordancewith the requirements of § 666.220.

§ 666.210 How may Incentive Grant fundsbe used?

Incentive grant funds are awarded toStates to carry out any one or moreinnovative programs under titles I or IIof WIA or the Carl D. Perkins Vocationaland Technical Education Act, regardlessof which Act is the source of theincentive funds. (WIA sec. 503(a).)

§ 666.220 What information must beincluded in a State Board’s application foran Incentive Grant?

(a) After consultation with theSecretary of Education, we will issueinstructions annually which willinclude the amount of funds available tobe awarded for each State and provideinstructions for submitting applicationsfor an Incentive Grant.

(b) Each State desiring an incentivegrant must submit to the Secretary anapplication, developed by the StateBoard, containing the followingassurances:

(1) The State legislature wasconsulted regarding the development ofthe application.

(2) The application was approved bythe Governor, the eligible agency (asdefined in WIA section 203), and theState agency responsible for vocationaland technical programs under the CarlD. Perkins Vocational and TechnicalEducation Act.

(3) The State exceeded the Statenegotiated levels of performance for titleI, the levels of performance under titleII and the levels for vocational andtechnical programs under the Carl D.Perkins Vocational and TechnicalEducation Act. (WIA sec. 503(b).)



§ 666.230 How does the Departmentdetermine the amounts for Incentive Grantawards?

(a) We determine the total amount tobe allocated from funds available underWIA section 174(b) for Incentive Grantstaking into consideration such factorsas:

(1) The availability of funds undersection 174(b) for technical assistance,demonstration and pilot projects,evaluations, and Incentive Grants andthe needs for these activities;

(2) The number of States that areeligible for Incentive Grants and theirrelative program formula allocationsunder title I;

(3) The availability of funds underWIA section 136(g)(2) resulting fromfunds withheld for poor performance byStates; and

(4) The range of awards established inWIA section 503(c).

(b) We will publish the award amountfor eligible States, after consultationwith the Secretary of Education, within90 days after the due date, establishedunder § 666.205(a), for the latest Stateperformance progress report providingthe annual information needed todetermine State eligibility.

(c) In determining the amountavailable to an eligible State, theSecretary, with the Secretary ofEducation, may consider such factors as:

(1) The relative allocations of theeligible State compared to other States;

(2) The extent to which the negotiatedlevels of performance were exceeded;

(3) Performance improvement relativeto previous years;

(4) Changes in economic conditions,participant characteristics and proposedservice design since the negotiatedlevels of performance were agreed to;

(5) The eligible State’s relativeperformance for each of the indicatorscompared to other States; and

(6) The performance on thoseindicators considered most important interms of accomplishing national goalsestablished by each of the respectiveSecretaries.

§ 666.240 Under what circumstances maya sanction be applied to a State that failsto achieve negotiated levels of performancefor title I?

(a) If a State fails to meet thenegotiated levels of performance agreedto under § 666.120 for core indicators ofperformance or customer satisfactionindicators for the adult, dislocatedworker or youth programs under title Iof WIA, the Secretary must, uponrequest, provide technical assistance, asauthorized under WIA sections 136(g)and 170.

(b) If a State fails to meet thenegotiated levels of performance for

core indicators of performance orcustomer satisfaction indicators for thesame program in two successive years,the amount of the succeeding year’sallocation for the applicable programmay be reduced by up to five percent.

(c) The exact amount of any allocationreduction will be based upon the degreeof failure to meet the negotiated levelsof performance for core indicators. Inmaking a determination of the amount,if any, of such a sanction, we mayconsider factors such as:

(1) The State’s performance relative toother States;

(2) Improvement efforts underway;(3) Incremental improvement on the

performance measures;(4) Technical assistance previously

provided;(5) Changes in economic conditions

and program design;(6) The characteristics of participants

served compared to the participantcharacteristics described in the StatePlan; and

(7) Performance on other coreindicators of performance and customersatisfaction indicators for that program.(WIA sec. 136(g).)

(d) Only performance that is less than80 percent of the negotiated levels willbe deemed to be a failure to achievenegotiated levels of performance.

(e) In accordance with 20 CFR667.300(e), a State grant may be reducedfor failure to submit an annualperformance progress report.

(f) A State may request review of asanction we impose in accordance withthe provisions of 20 CFR 667.800.

Subpart C—Local Measures ofPerformance

§ 666.300 What performance indicatorsapply to local areas?

(a) Each local workforce investmentarea in a State is subject to the samecore indicators of performance and thecustomer satisfaction indicators thatapply to the State under § 666.100(a).

(b) In addition to the indicatorsdescribed in paragraph (a) of thissection, under § 666.110, the Governormay apply additional indicators ofperformance to local areas in the State.(WIA sec. 136(c)(1).)

§ 666.310 What levels of performanceapply to the indicators of performance inlocal areas?

(a) The Local Board and the chiefelected official must negotiate with theGovernor and reach agreement on thelocal levels of performance for eachindicator identified under § 666.300.The levels must be based on the Statenegotiated levels of performanceestablished under § 666.120 and take

into account the factors described inparagraph (b) of this section.

(b) In determining the appropriatelocal levels of performance, theGovernor, Local Board and chief electedofficial must take into account specificeconomic, demographic and othercharacteristics of the populations to beserved in the local area.

(c) The performance levels agreed tounder paragraph (a) of this section mustbe incorporated in the local plan. (WIAsecs. 118(b)(3) and 136(c).)

Subpart D—Incentives and Sanctionsfor Local Performance

§ 666.400 Under what circumstances arelocal areas eligible for State IncentiveGrants?

(a) States must use a portion of thefunds reserved for Statewide workforceinvestment activities under WIAsections 128(a) and 133(a)(1) to provideIncentive Grants to local areas forregional cooperation among local boards(including local boards for a designatedregion, as described in WIA section116(c)), for local coordination ofactivities carried out under this Act, andfor exemplary performance on the localperformance measures establishedunder subpart C of this part.

(b) The amount of funds used forIncentive Grants under paragraph (a) ofthis section and the criteria used fordetermining exemplary localperformance levels to qualify for theincentive grants are determined by theGovernor. (WIA sec. 134(a)(2)(B)(iii).)

§ 666.410 How may local incentive awardsbe used?

The local incentive grant funds maybe used for any activities allowed underWIA title I–B.

§ 666.420 Under what circumstances maya sanction be applied to local areas for poorperformance?

(a) If a local area fails to meet thelevels of performance agreed to under§ 666.310 for the core indicators ofperformance or customer satisfactionindicators for a program in any programyear, technical assistance must beprovided. The technical assistance mustbe provided by the Governor with fundsreserved for Statewide workforceinvestment activities under WIAsections 128(a) and 133(a)(1), or, uponthe Governor’s request, by the Secretary.The technical assistance may includethe development of a performanceimprovement plan, a modified localplan, or other actions designed to assistthe local area in improvingperformance.

(b) If a local area fails to meet thelevels of performance agreed to under



§ 666.310 for the core indicators ofperformance or customer satisfactionindicators for a program for twoconsecutive program years, theGovernor must take corrective actions.The corrective actions may include thedevelopment of a reorganization planunder which the Governor:

(1) Requires the appointment andcertification of a new Local Board;

(2) Prohibits the use of particularservice providers or One-Stop partnersthat have been identified as achievingpoor levels of performance; or

(3) Requires other appropriatemeasures designed to improve theperformance of the local area.

(c) A local area may appeal to theGovernor to rescind or revise areorganization plan imposed underparagraph (b) of this section not laterthan thirty (30) days after receivingnotice of the plan. The Governor mustmake a final decision within 30 daysafter receipt of the appeal. TheGovernor’s final decision may beappealed by the Local Board to theSecretary under 20 CFR 667.650(b) notlater than thirty (30) days after the localarea receives the decision. The decisionby the Governor to impose areorganization plan becomes effective atthe time it is issued, and remainseffective unless the Secretary rescindsor revises the reorganization plan. Uponreceipt of the appeal from the local area,the Secretary must make a final decisionwithin thirty (30) days. (WIA sec.136(h).)

PART 667—ADMINISTRATIVEPROVISIONS UNDER TITLE I OF THEWORKFORCE INVESTMENT ACT

Subpart A—Funding

Sec.667.100 When do Workforce Investment

Act grant funds become available?667.105 What award document authorizes

the expenditure of Workforce InvestmentAct funds under title I of the Act?

667.107 What is the period of availabilityfor expenditure of WIA funds?

667.110 What is the Governor/SecretaryAgreement?

667.120 What planning information must aState submit in order to receive aformula grant?

667.130 How are WIA title I formula fundsallocated to local workforce investmentareas?

667.135 What ‘‘hold harmless’’ provisionsapply to WIA adult and youthallocations?

667.140 Does a Local Board have theauthority to transfer funds betweenprograms?

667.150 What reallotment procedures doesthe Secretary use?

667.160 What reallocation procedures mustthe Governors use?

667.170 What responsibility review doesthe Department conduct for awards madeunder WIA title I, subtitle D?

Subpart B—Administrative Rules, Costsand Limitations

667.200 What general fiscal andadministrative rules apply to the use ofWIA title I funds?

667.210 What administrative cost limitsapply to Workforce Investment Act titleI grants?

667.220 What Workforce Investment Acttitle I functions and activities constitutethe costs of administration subject to theadministrative cost limit?

667.250 What requirements relate to theenforcement of the Military SelectiveService Act?

667.255 Are there special rules that applyto veterans when income is a factor ineligibility determinations?

667.260 May WIA title I funds be spent forconstruction?

667.262 Are employment generatingactivities, or similar activities, allowableunder WIA title I?

667.264 What other activities are prohibitedunder title I of WIA?

667.266 What are the limitations related tosectarian activities?

667.268 What prohibitions apply to the useof WIA title I funds to encouragebusiness relocation?

667.269 What procedures and sanctionsapply to violations of §§ 667.260 through667.268?

667.270 What safeguards are there to ensurethat participants in WorkforceInvestment Act employment and trainingactivities do not displace otheremployees?

667.272 What wage and labor standardsapply to participants in activities undertitle I of WIA?

667.274 What health and safety standardsapply to the working conditions ofparticipants in activities under title I ofWIA?

667.275 What are a recipient’s obligationsto ensure nondiscrimination and equalopportunity, as well as nonparticipationin sectarian activities?


667.300 What are the reportingrequirements for Workforce InvestmentAct programs?


667.400 Who is responsible for oversightand monitoring of WIA title I grants?

667.410 What are the oversight roles andresponsibilities of recipients andsubrecipients?

Subpart E—Resolution of Findings FromMonitoring and Oversight Reviews

667.500 What procedures apply to theresolution of findings arising fromaudits, investigations, monitoring andoversight reviews?

667.505 How do we resolve investigativeand monitoring findings?

667.510 What is the Grant Officerresolution process?

Subpart F—Grievance Procedures,Complaints, and State Appeals Processes

667.600 What local area, State and directrecipient grievance procedures must beestablished?

667.610 What processes do we use toreview State and local grievances andcomplaints?

667.630 How are complaints and reports ofcriminal fraud and abuse addressedunder WIA?

667.640 What additional appeal processesor systems must a State have for the WIAprogram?

667.645 What procedures apply to theappeals of non-designation of localareas?

667.650 What procedures apply to theappeals of the Governor’s imposition ofsanctions for substantial violations orperformance failures by a local area?

Subpart G—Sanctions, Corrective Actions,and Waiver of Liability

667.700 What procedure do we use toimpose sanctions and corrective actionson recipients and subrecipients of WIAgrant funds?

667.705 Who is responsible for fundsprovided under title I of WIA?

667.710 What actions are required toaddress the failure of a local area tocomply with the applicable uniformadministrative provisions?

667.720 How do we handle a recipient’srequest for waiver of liability under WIAsection 184(d)(2)?

667.730 What is the procedure to handle arecipient’s request for advance approvalof contemplated corrective actions?

667.740 What procedure must be used foradministering the offset/deductionprovisions at section 184(c) of the Act?

Subpart H—Administrative Adjudicationand Judicial Review

667.800 What actions of the Departmentmay be appealed to the Office ofAdministrative Law Judges?

667.810 What rules of procedure apply tohearings conducted under this subpart?

667.820 What authority does theAdministrative Law Judge have inordering relief as an outcome of anadministrative hearing?

667.825 What special rules apply to reviewsof NFJP and WIAINA grant selections?

667.830 When will the Administrative LawJudge issue a decision?

667.840 Is there an alternative disputeresolution process that may be used inplace of an OALJ hearing?

667.850 Is there judicial review of a finalorder of the Secretary issued undersection 186 of the Act?

667.860 Are there other remedies availableoutside of the Act?

Subpart I—Transition Planning

667.900 What special rules apply duringthe JTPA/WIA transition?

667.910 Are JTPA participants to begrandfathered into WIA?




Subpart A—Funding

§ 667.100 When do Workforce InvestmentAct grant funds become available?

(a) Program year. Except as providedin paragraph (b) of this section, fiscalyear appropriations for programs andactivities carried out under title I ofWIA are available for obligation on thebasis of a program year. A program yearbegins on July 1 in the fiscal year forwhich the appropriation is made andends on June 30 of the following year.

(b) Youth fund availability. Fiscalyear appropriations for a program year’syouth activities, authorized underchapter 4, subtitle B, title I of WIA, maybe made available for obligationbeginning on April 1 of the fiscal yearfor which the appropriation is made.

§ 667.105 What award documentauthorizes the expenditure of WorkforceInvestment Act funds under title I of theAct?

(a) Agreement. All WIA title I fundsthat are awarded by grant, contract orcooperative agreement are issued underan agreement between the Grant Officer/Contracting Officer and the recipient.The agreement describes the terms andconditions applicable to the award ofWIA title I funds.

(b) Grant funds awarded to States.Under the Governor/SecretaryAgreement described in § 667.110, eachprogram year, the grant agreementdescribed in paragraph (a) of thissection will be executed and signed bythe Governor or the Governor’sdesignated representative and Secretaryor the Grant Officer. The grantagreement and associated Notices ofObligation are the basis for Federalobligation of funds allotted to the Statesin accordance with WIA sections 127(b)and 132(b) for each program year.

(c) Indian and Native AmericanPrograms. (1) Awards of grants,contracts or cooperative agreements forthe WIA Indian and Native Americanprogram will be made to eligible entitieson a competitive basis every twoprogram years for a two-year period, inaccordance with the provisions of 20CFR part 668. An award for thesucceeding two-year period may bemade to the same recipient on a non-competitive basis if the recipient:

(i) Has performed satisfactorily; and(ii) Submits a satisfactory two-year

program plan for the succeeding two-year grant, contract or agreement period.

(2) A grant, contract or cooperativeagreement may be renewed under theauthority of paragraph (c)(1) of thissection no more than once during anyfour-year period for any single recipient.

(d) National Farmworker Jobsprograms. (1) Awards of grants or

contracts for the National FarmworkerJobs program will be made to eligibleentities on a competitive basis every twoprogram years for a two-year period, inaccordance with the provisions of 20CFR part 669. An award for thesucceeding two-year period may bemade to the same recipient if therecipient:

(i) Has performed satisfactorily; and(ii) Submits a satisfactory two-year

program plan for the succeeding two-year period.

(2) A grant or contract may berenewed under the authority ofparagraph (d)(1) of this section no morethan once during any four-year periodfor any single recipient.

(e) Job Corps. (1) Awards of contractswill be made on a competitive basisbetween the Contracting Officer andeligible entities to operate contractcenters and provide operational supportservices.

(2) The Secretary may enter intointeragency agreements with Federalagencies for funding, establishment, andoperation of Civilian ConservationCenters for Job Corps programs.

(f) Youth Opportunity grants. Awardsof grants for Youth Opportunityprograms will be made to eligible LocalBoards and eligible entities for a one-year period. The grants may be renewedfor each of the four succeeding yearsbased on criteria that include successfulperformance.

(g) Awards under WIA sections 171and 172. (1) Awards of grants, contractsor cooperative agreements will be madeto eligible entities for programs oractivities authorized under WIAsections 171 or 172. These funds are for:

(i) Demonstration;(ii) Pilot;(iii) Multi-service;(iv) Research;(v) Multi-State projects; and(vi) Evaluations(2) Grants and contracts under

paragraphs (g)(1)(i) and (ii) of thissection will be awarded on acompetitive basis, except that anoncompetitive award may be made inthe case of a project that is fundedjointly with other public or privateentities that provide a portion of thefunding.

(3) Contracts and grants underparagraphs (g)(1)(iii), (iv), and (v) of thissection in amounts that exceed $100,000will be awarded on a competitive basis,except that a noncompetitive award maybe made in the case of a project that isfunded jointly with other public orprivate sector entities that provide asubstantial portion of the assistanceunder the grant or contract for theproject.

(4) Grants or contracts for carrying outprojects in paragraphs (g)(1)(iii), (iv),and (v) of this section may not beawarded to the same organization formore than three consecutive years,unless the project is competitivelyreevaluated within that period.

(5) Entities with nationally recognizedexpertise in the methods, techniquesand knowledge of workforce investmentactivities will be provided priority inawarding contracts or grants for theprojects under paragraphs (g)(1)(iii), (iv),and (v) of this section.

(6) A peer review process will be usedfor projects under paragraphs (g)(1)(iii),(iv), and (v) of this section for grantsthat exceed $500,000, and to designateexemplary and promising programs.

(h) Termination. Each grantterminates when the period of fundavailability has expired. The grant mustbe closed in accordance with thecloseout provisions at 29 CFR 95.71 or97.50, as appropriate.

§ 667.107 What is the period of availabilityfor expenditure of WIA funds?

(a) Grant funds expended by States.Funds allotted to States under WIAsections 127(b) and 132(b) for anyprogram year are available forexpenditure by the State receiving thefunds only during that program year andthe two succeeding program years.

(b) Grant funds expended by localareas. (1) Funds allocated by a State toa local area under WIA sections 128(b)and 133(b), for any program year areavailable for expenditure only duringthat program year and the succeedingprogram year.

(2) Funds which are not expended bya local area in the two-year perioddescribed in paragraph (b)(1) of thissection, must be returned to the State.Funds so returned are available forexpenditure by State and localrecipients and subrecipients only duringthe third program year of availability.These funds may:

(i) Be used for Statewide projects, or(ii) Be distributed to other local areas

which had fully expended theirallocation of funds for the same programyear within the two-year period.

(c) Job Corps. Funds obligated for anyprogram year for any Job Corps activitycarried out under title I, subtitle C, ofWIA may be expended during thatprogram year and the two succeedingprogram years.

(d) Funds awarded under WIAsections 171 and 172. Funds obligatedfor any program year for a program oractivity authorized under sections 171or 172 of WIA remain available untilexpended.



(e) Other programs under title I ofWIA. For all other grants, contracts andcooperative agreements issued undertitle I of WIA the period of availabilityfor expenditure is set in the terms andconditions of the award document.

§ 667.110 What is the Governor/SecretaryAgreement?

(a) To establish a continuingrelationship under the Act, theGovernor and the Secretary will enterinto a Governor/Secretary Agreement.The Agreement will consist of astatement assuring that the State willcomply with:

(1) The Workforce Investment Act andall applicable rules and regulations, and

(2) The Wagner-Peyser Act and allapplicable rules and regulations.

(b) The Governor/SecretaryAgreement may be modified, revised orterminated at any time, upon theagreement of both parties.

§ 667.120 What planning information musta State submit in order to receive a formulagrant?

Each State seeking financialassistance under WIA sections 127(youth) or 132 (adults and dislocatedworkers) or under the Wagner-PeyserAct must submit a single State Plan. Therequirements for the plan content andthe plan review process are described inWIA section 112, Wagner-Peyser Actsection 8, and 20 CFR 661.220, 661.240and 652.211 through 652.214.

§ 667.130 How are WIA title I formula fundsallocated to local workforce investmentareas?

(a) General. The Governor mustallocate WIA formula funds allotted forservices to youth, adults and dislocatedworkers in accordance with WIAsections 128 and 133, and this section.

(1) State Boards must assist Governorsin the development of any discretionarywithin-State allocation formulas. (WIAsec. 111(d)(5).)

(2) Within-State allocations must bemade:

(i) In accordance with the allocationformulas contained in WIA sections128(b) and 133(b) and in the Stateworkforce investment plan, and

(ii) After consultation with chiefelected officials in each of the workforceinvestment areas.

(b) State reserve. (1) Of the WIAformula funds allotted for services toyouth, adults and dislocated workers,the Governor must reserve funds fromeach of these sources for Statewideworkforce investment activities. Inmaking these reservations, the Governormay reserve up to fifteen (15) percentfrom each of these sources. Fundsreserved under this paragraph may be

combined and spent on Statewideemployment and training activities, foradults and dislocated workers, andStatewide youth activities, as describedin 20 CFR 665.200 and 665.210, withoutregard to the funding source of thereserved funds.

(2) The Governor must reserve aportion of the dislocated worker fundsfor Statewide rapid response activities,as described in WIA section 134(a)(2)(A)and 20 CFR 665.310 through 665.330. Inmaking this reservation, the Governormay reserve up to twenty-five (25)percent of the dislocated worker funds.

(c) Youth allocation formula. (1)Unless the Governor elects to distributefunds in accordance with thediscretionary allocation formuladescribed in paragraph (c)(2) of thissection, the remainder of youth fundsnot reserved under paragraph (b)(1) ofthis section must be allocated:

(i) 331⁄3 percent on the basis of therelative number of unemployedindividuals in areas of substantialunemployment in each workforceinvestment area, compared to the totalnumber of unemployed individuals inall areas of substantial unemploymentin the State;

(ii) 331⁄3 percent on the basis of therelative excess number of unemployedindividuals in each workforceinvestment area, compared to the totalexcess number of unemployedindividuals in the State; and

(iii) 331⁄3 percent on the basis of therelative number of disadvantaged youthin each workforce investment area,compared to the total number ofdisadvantaged youth in the State. (WIAsec. 128(b)(2)(A)(i))

(2) Discretionary youth allocationformula. In lieu of making the formulaallocation described in paragraph (c)(1)of this section, the State may allocateyouth funds under a discretionaryformula. Under that formula, the Statemust allocate a minimum of 70 percentof youth funds not reserved underparagraph (b)(1) of this section on thebasis of the formula in paragraph (c)(1)of this section, and may allocate up to30 percent on the basis of a formulathat:

(i) Incorporates additional factors(other than the factors described inparagraph (c)(1) of this section) relatingto:

(A) Excess youth poverty in urban,rural and suburban local areas; and

(B) Excess unemployment above theState average in urban, rural andsuburban local areas; and

(ii) Was developed by the State Boardand approved by the Secretary of Laboras part of the State workforceinvestment plan. (WIA sec. 128(b)(3).)

(d) Adult allocation formula. (1)Unless the Governor elects to distributefunds in accordance with thediscretionary allocation formuladescribed in paragraph (d)(2) of thissection, the remainder of adult fundsnot reserved under paragraph (b)(1) ofthis section must be allocated:

(i) 331⁄3 percent on the basis of therelative number of unemployedindividuals in areas of substantialunemployment in each workforceinvestment area, compared to the totalnumber of unemployed individuals inareas of substantial unemployment inthe State;

(ii) 331⁄3 percent on the basis of therelative excess number of unemployedindividuals in each workforceinvestment area, compared to the totalexcess number of unemployedindividuals in the State; and

(iii) 331⁄3 percent on the basis of therelative number of disadvantaged adultsin each workforce investment area,compared to the total number ofdisadvantaged adults in the State. (WIAsec. 133(b)(2)(A)(i))

(2) Discretionary adult allocationformula. In lieu of making the formulaallocation described in paragraph (d)(1)of this section, the State may allocateadult funds under an discretionaryformula. Under that formula, the Statemust allocate a minimum of 70 percentof adult funds on the basis of theformula in paragraph (d)(1) of thissection, and may allocate up to 30percent on the basis of a formula that:

(i) Incorporates additional factors(other than the factors described inparagraph (d)(1) of this section) relatingto:

(A) Excess poverty in urban, rural andsuburban local areas; and

(B) Excess unemployment above theState average in urban, rural andsuburban local areas; and

(ii) Was developed by the State Boardand approved by the Secretary of Laboras part of the State workforceinvestment plan. (WIA sec. 133(b)(3).)

(e) Dislocated worker allocationformula. (1) The remainder of dislocatedworker funds not reserved underparagraph (b)(1) or (b)(2) of this sectionmust be allocated on the basis of aformula prescribed by the Governor thatdistributes funds in a manner thataddresses the State’s workerreadjustment assistance needs. Funds sodistributed must not be less than 60percent of the State’s formula allotment.

(2)(i) The Governor’s dislocatedworker formula must use the mostappropriate information available to theGovernor, including information on:

(A) Insured unemployment data,(B) Unemployment concentrations,



(C) Plant closings and mass layoffdata,

(D) Declining industries data,(E) Farmer-rancher economic

hardship data, and(F) Long-term unemployment data.(ii) The State Plan must describe the

data used for the formula and theweights assigned, and explain theState’s decision to use other informationor to omit any of the informationsources set forth in paragraph (e)(2)(i) ofthis section.

(3) The Governor may not amend thedislocated worker formula more thanonce for any program year.

(4)(i) Dislocated worker funds initiallyreserved by the Governor for Statewiderapid response activities in accordancewith paragraph (b)(2) of this section maybe:

(A) Distributed to local areas, and(B) Used to operate projects in local

areas in accordance with therequirements of WIA section134(a)(2)(A) and 20 CFR 665.310through 665.330.

(ii) The State Plan must describe theprocedures for any distribution to localareas, including the timing and processfor determining whether a distributionwill take place.

§ 667.135 What ‘‘hold harmless’’provisions apply to WIA adult and youthallocations?

(a)(1) For the first two fiscal yearsafter the date on which a local area isdesignated under section 116 of WIA,the State may elect to apply the ‘‘holdharmless’’ provisions specified inparagraph (b) of this section to local areaallocations of WIA youth funds under§ 667.130(c) and to allocations of WIAadult funds under § 667.130(d).

(2) Effective at the end of the secondfull fiscal year after the date on whicha local area is designated under section116 of WIA the State must apply the‘‘hold harmless’’ specified in paragraph(b) of this section to local areaallocations of WIA youth funds under§ 667.130(c) and to allocations of WIAadult funds under § 667.130(d).

(3) There are no ‘‘hold harmless’’provisions that apply to local areaallocations of WIA dislocated workerfunds.

(b)(1) If a State elects to apply a‘‘hold-harmless’’ under paragraph (a)(1)of this section, a local area must notreceive an allocation amount for a fiscalyear that is less than 90 percent of theaverage allocation of the local area forthe two preceding fiscal years.

(2) In applying the ‘‘hold harmless’’under paragraph (a)(2) of this section, alocal area must not receive an allocationamount for a fiscal year that is less than

90 percent of the average allocation ofthe local area for the two precedingfiscal years.

(3) Amounts necessary to increaseallocations to local areas must beobtained by ratably reducing theallocations to be made to other localareas.

(4) If the amounts of WIA fundsappropriated in a fiscal year are notsufficient to provide the amountspecified in paragraph (b)(1) of thissection to all local areas, the amountsallocated to each local area mustberatably reduced. (WIA secs.128(b)(2)(A)(ii), 133(b)(2)(A)(ii), 506.)

§ 667.140 Does a Local Board have theauthority to transfer funds betweenprograms?

(a) A Local Board may transfer up to20 percent of a program year allocationfor adult employment and trainingactivities, and up to 20 percent of aprogram year allocation for dislocatedworker employment and trainingactivities between the two programs.

(b) Before making any such transfer, aLocal Board must obtain the Governor’sapproval.

(c) Local Boards may not transferfunds to or from the youth program.

§ 667.150 What reallotment proceduresdoes the Secretary use?

(a) The first reallotment of fundsamong States will occur during PY 2001based on obligations in PY 2000.

(b) The Secretary determines, duringthe first quarter of the program year,whether a State has obligated itsrequired level of at least 80 percent ofthe funds allotted under WIA sections127 and 132 for programs serving youth,adults, and dislocated workers for theprior year, as separately determined foreach of the three funding streams.Unobligated balances are determinedbased on allotments adjusted for anyallowable transfer between the adultand dislocated worker funding streams.The amount to be recaptured from eachState for reallotment, if any, is based onState obligations of the funds allotted toeach State under WIA sections 127 and132 for programs serving youth, adults,or dislocated workers, less any amountreserved (up to 5 percent at the Statelevel and up to 10 percent at the locallevel) for the costs of administration.This amount, if any, is separatelydetermined for each funding stream.

(c) The Secretary reallots youth, adultand dislocated worker funds amongeligible States in accordance with theprovisions of WIA sections 127(c) and132(c), respectively. To be eligible toreceive a reallotment of youth, adult, ordislocated worker funds under the

reallotment procedures, a State musthave obligated at least 80 percent of theprior program year’s allotment, less anyamount reserved for the costs ofadministration of youth, adult, ordislocated worker funds. A State’seligibility to receive a reallotment isseparately determined for each fundingstream.

(d) The term ‘‘obligation’’ is defined at20 CFR 660.300. For purposes of thissection, the Secretary will also treat asState obligations:

(1) Amounts allocated by the State,under WIA sections 128(b) and 133(b),to the single State local area if the Statehas been designated as a single localarea under WIA section 116(b) or to abalance of State local area administeredby a unit of the State government, and

(2) Inter-agency transfers and otheractions treated by the State asencumbrances against amounts reservedby the State under WIA sections 128(a)and 133(a) for Statewide workforceinvestment activities.

§ 667.160 What reallocation proceduresmust the Governors use?

(a) The Governor may reallocateyouth, adult, and dislocated workerfunds among local areas within the Statein accordance with the provisions ofsections 128(c) and 133(c) of the Act. Ifthe Governor chooses to reallocatefunds, the provisions in paragraphs (b)and (c) of this section apply.

(b) For the youth, adult and dislocatedworker programs, the amount to berecaptured from each local area forpurposes of reallocation, if any, must bebased on the amount by which the prioryear’s unobligated balance of allocatedfunds exceeds 20 percent of that year’sallocation for the program, less anyamount reserved (up to 10 percent) forthe costs of administration. Unobligatedbalances must be determined based onallocations adjusted for any allowabletransfer between funding streams. Thisamount, if any, must be separatelydetermined for each funding stream.

(c) To be eligible to receive youth,adult or dislocated worker funds underthe reallocation procedures, a local areamust have obligated at least 80 percentof the prior program year’s allocation,less any amount reserved (up to 10percent) for the costs of administration,for youth, adult, or dislocated workeractivities, as separately determined. Alocal area’s eligibility to receive areallocation must be separatelydetermined for each funding stream.

§ 667.170 What responsibility review doesthe Department conduct for awards madeunder WIA title I, subtitle D?

(a) Before final selection as a potentialgrantee, we conduct a review of the



available records to assess theorganization’s overall responsibility toadminister Federal funds. As part of thisreview, we may consider anyinformation that has come to ourattention and will consider theorganization’s history with regard to themanagement of other grants, includingDOL grants. The failure to meet any oneresponsibility test, except for thoselisted in paragraphs (a)(1) and (a)(2) ofthis section, does not establish that theorganization is not responsible unlessthe failure is substantial or persistent(for two or more consecutive years). Theresponsibility tests include:

(1) The organization’s efforts torecover debts (for which three demandletters have been sent) established byfinal agency action have beenunsuccessful, or that there has beenfailure to comply with an approvedrepayment plan;

(2) Established fraud or criminalactivity of a significant nature withinthe organization.

(3) Serious administrative deficienciesthat we identify, such as failure tomaintain a financial managementsystem as required by Federalregulations;

(4) Willful obstruction of the auditprocess;

(5) Failure to provide services toapplicants as agreed to in a current orrecent grant or to meet applicableperformance standards;

(6) Failure to correct deficienciesbrought to the grantee’s attention inwriting as a result of monitoringactivities, reviews, assessments, or otheractivities;

(7) Failure to return a grant closeoutpackage or outstanding advances within90 days of the grant expiration date orreceipt of closeout package, whicheveris later, unless an extension has beenrequested and granted; final billingsreflecting serious cost category or totalbudget cost overrun;

(8) Failure to submit required reports;(9) Failure to properly report and

dispose of government property asinstructed by DOL;

(10) Failure to have maintainedeffective cash management or costcontrols resulting in excess cash onhand;

(11) Failure to ensure that asubrecipient complies with its OMBCircular A–133 audit requirementsspecified at § 667.200(b);

(12) Failure to audit a subrecipientwithin the required period;

(13) Final disallowed costs in excessof five percent of the grant or contractaward if, in the judgement of the grantofficer, the disallowances are egregiousfindings and;

(14) Failure to establish a mechanismto resolve a subrecipient’s audit in atimely fashion.

(b) This responsibility review isindependent of the competitive process.Applicants which are determined to benot responsible will not be selected aspotential grantees irrespective of theirstanding in the competition.

Subpart B—Administrative Rules,Costs and Limitations

§ 667.200 What general fiscal andadministrative rules apply to the use of WIAtitle I funds?

(a) Uniform fiscal and administrativerequirements. (1) Except as provided inparagraphs (a)(3) through (6) of thissection, State, local, and Indian tribalgovernment organizations that receivegrants or cooperative agreements underWIA title I must follow the commonrule ‘‘Uniform AdministrativeRequirements for Grants andCooperative Agreements to State andLocal Governments’’ which is codifiedat 29 CFR part 97.

(2) Except as provided in paragraphs(a)(3) through (7) of this section,institutions of higher education,hospitals, other non-profitorganizations, and commercialorganizations must the follow thecommon rule implementing OMBCircular A–110 which is codified at 29CFR part 95.

(3) In addition to the requirements at29 CFR 95.48 or 29 CFR 97.36(i) (asappropriate), all procurement contractsand other transactions between LocalBoards and units of State or localgovernments must be conducted only ona cost reimbursement basis. Noprovision for profit is allowed. (WIAsec. 184(a)(3)(B).)

(4) In addition to the requirements at29 CFR 95.42 or 29 CFR 97.36(b)(3) (asappropriate), which address codes ofconduct and conflict of interest issuesrelated to employees:

(i) A State Board member or a LocalBoard member or a Youth Councilmember must neither cast a vote on, norparticipate in any decision-makingcapacity, on the provision of services bysuch member (or any organizationwhich that member directly represents),nor on any matter which would provideany direct financial benefit to thatmember or a member of his immediatefamily.

(ii) Neither membership on the StateBoard, the Local Board, the YouthCouncil nor the receipt of WIA funds toprovide training and related services, byitself, violates these conflict of interestprovisions.

(5) The addition method, described at29 CFR 95.24 or 29 CFR 97.25(g)(2) (as

appropriate), must be used for the allprogram income earned under WIA titleI grants. When the cost of generatingprogram income has been charged to theprogram, the gross amount earned mustbe added to the WIA program. However,the cost of generating program incomemust be subtracted from the amountearned to establish the net amount ofprogram income available for use underthe grants when these costs have notbeen charged to the WIA program.

(6) Any excess of revenue over costsincurred for services provided by agovernmental or non-profit entity mustbe included in program income. (WIAsec. 195(7)(A) and (B).)

(7) Interest income earned on fundsreceived under WIA title I must beincluded in program income. (WIA sec.195(7)(B)(iii).)

(8) On a fee-for-service basis,employers may use local area services,facilities, or equipment funded undertitle I of WIA to provide employmentand training activities to incumbentworkers:

(i) When the services, facilities, orequipment are not being used by eligibleparticipants;

(ii) If their use does not affect theability of eligible participants to use theservices, facilities, or equipment; and

(iii) If the income generated from suchfees is used to carry out programsauthorized under this title.

(b) Audit requirements. (1) Allgovernmental and non-profitorganizations must follow the auditrequirements of OMB Circular A–133.These requirements are found at 29 CFR97.26 for governmental organizationsand at 29 CFR 95.26 for institutions ofhigher education, hospitals, and othernon-profit organizations.

(2)(i) We are responsible for audits ofcommercial organizations which aredirect recipients of Federal financialassistance under WIA title I.

(ii) Commercial organizations whichare subrecipients under WIA title I andwhich expend more than the minimumlevel specified in OMB Circular A–133($300,000 as of August 11, 2000) musthave either an organization-wide auditconducted in accordance with A–133 ora program specific financial andcompliance audit.

(c) Allowable costs/cost principles.All recipients and subrecipients mustfollow the Federal allowable costprinciples that apply to their kind oforganizations. The DOL regulations at29 CFR 95.27 and 29 CFR 97.22 identifythe Federal principles for determiningallowable costs which each kind ofrecipient and subrecipient must follow.The applicable Federal principles foreach kind of recipient are described in



paragraphs (c)(1) through (5) of thissection; all recipients must comply withparagraphs (c)(6) and (c)(7) of thissection. For those selected items of costrequiring prior approval, the authorityto grant or deny approval is delegated tothe Governor for programs funded undersections 127 or 132 of the Act.

(1) Allowable costs for State, local,and Indian tribal governmentorganizations must be determined underOMB Circular A–87, ‘‘Cost Principlesfor State, Local and Indian TribalGovernments.’’

(2) Allowable costs for non-profitorganizations must be determined underOMB Circular A–122, ‘‘Cost Principlesfor Non-Profit Organizations.’’

(3) Allowable costs for institutions ofhigher education must be determinedunder OMB Circular A–21, ‘‘CostPrinciples for Educational Institutions.’’

(4) Allowable costs for hospitals mustbe determined in accordance underappendix E of 45 CFR part 74,‘‘Principles for Determining CostsApplicable to Research andDevelopment Under Grants andContracts with Hospitals.’’

(5) Allowable costs for commercialorganizations and those non-profitorganizations listed in Attachment C toOMB Circular A–122 must bedetermined under the provisions of theFederal Acquisition Regulation (FAR),at 48 CFR part 31.

(6) For all types of entities, legalexpenses for the prosecution of claimsagainst the Federal Government,including appeals to an AdministrativeLaw Judge, are unallowable.

(7) In addition to the allowable costprovisions identified in paragraphs(c)(1) through (6) of this section, the costof information technology—computerhardware and software—will only beallowable under WIA title I grants whensuch computer technology is ‘‘Year 2000compliant.’’ To meet this requirement,information technology must be able toaccurately process date/time (including,but not limited to, calculating,comparing and sequencing) from, intoand between the twentieth and twenty-first centuries, and the years 1999 and2000. The information technology mustalso be able to make leap yearcalculations. Furthermore, ‘‘Year 2000compliant’’ information technology,when used in combination with otherinformation technology, must accuratelyprocess date/time data if the otherinformation technology properlyexchanges date/time with it.

(d) Government-wide debarment andsuspension, and government-wide drug-free workplace requirements. All WIAtitle I grant recipients and subrecipientsmust comply with the government-wide

requirements for debarment andsuspension, and the government-widerequirements for a drug-free workplace,codified at 29 CFR part 98.

(e) Restrictions on lobbying. All WIAtitle I grant recipients and subrecipientsmust comply with the restrictions onlobbying which are codified in the DOLregulations at 29 CFR part 93.

(f) Nondiscrimination. All WIA title Irecipients, as the term is defined in 29CFR 37.4, must comply with thenondiscrimination and equalopportunity provisions of WIA section188 and its implementing regulationsfound at 29 CFR part 37. Information onthe handling of discriminationcomplaints by participants and otherinterested parties may be found in 29CFR 37.70 through 37.80, and in§ 667.600(g).

(g) Nepotism. (1) No individual maybe placed in a WIA employment activityif a member of that person’s immediatefamily is directly supervised by ordirectly supervises that individual.

(2) To the extent that an applicableState or local legal requirementregarding nepotism is more restrictivethan this provision, such State or localrequirement must be followed.

§ 667.210 What administrative cost limitsapply to Workforce Investment Act title Igrants?

(a) Formula grants to States:(1) As part of the 15 percent that a

State may reserve for Statewideactivities, the State may spend up to fivepercent (5%) of the amount allottedunder sections 127(b)(1), 132(b)(1) and132(b)(2) of the Act for theadministrative costs of Statewideworkforce investment activities.

(2) Local area expenditures foradministrative purposes under WIAformula grants are limited to no morethan ten percent (10%) of the amountallocated to the local area undersections 128(b) and 133(b) of the Act.

(3) Neither the five percent (5%) ofthe amount allotted that may bereserved for Statewide administrativecosts nor the ten percent (10%) of theamount allotted that may be reserved forlocal administrative costs needs to beallocated back to the individual fundingstreams.

(b) Limits on administrative costs forprograms operated under subtitle D oftitle I will be identified in the grant orcontract award document.

(c) In a One-Stop environment,administrative costs borne by othersources of funds, such as the Wagner-Peyser Act, are not included in theadministrative cost limit calculation.Each program’s administrative activitiesarea chargeable to its own grant and

subject to its own administrative costlimitations.

§ 667.220 What Workforce Investment Acttitle I functions and activities constitute thecosts of administration subject to theadministrative cost limit?

(a) The costs of administration arethat allocable portion of necessary andreasonable allowable costs of State andlocal workforce investment boards,direct recipients, including State grantrecipients under subtitle B of title I andrecipients of awards under subtitle D oftitle I, as well as local grant recipients,local grant subrecipients, local fiscalagents and one-stop operators that areassociated with those specific functionsidentified in paragraph (b) of thissection and which are not related to thedirect provision of workforceinvestment services, including servicesto participants and employers. Thesecosts can be both personnel and non-personnel and both direct and indirect.

(b) The costs of administration are thecosts associated with performing thefollowing functions:

(1) Performing the following overallgeneral administrative functions andcoordination of those functions underWIA title I:

(i) Accounting, budgeting, financialand cash management functions;

(ii) Procurement and purchasingfunctions;

(iii) Property management functions;(iv) Personnel management functions;(v) Payroll functions;(vi) Coordinating the resolution of

findings arising from audits, reviews,investigations and incident reports;

(vii) Audit functions;(viii) General legal services functions;

and(ix) Developing systems and

procedures, including informationsystems, required for theseadministrative functions;

(2) Performing oversight andmonitoring responsibilities related toWIA administrative functions;

(3) Costs of goods and servicesrequired for administrative functions ofthe program, including goods andservices such as rental or purchase ofequipment, utilities, office supplies,postage, and rental and maintenance ofoffice space;

(4) Travel costs incurred for officialbusiness in carrying out administrativeactivities or the overall management ofthe WIA system; and

(5) Costs of information systemsrelated to administrative functions (forexample, personnel, procurement,purchasing, property management,accounting and payroll systems)including the purchase, systems



development and operating costs ofsuch systems.

(c)(1) Awards to subrecipients orvendors that are solely for theperformance of administrative functionsare classified as administrative costs.

(2) Personnel and related non-personnel costs of staff who performboth administrative functions specifiedin paragraph (b) of this section andprogrammatic services or activities mustbe allocated as administrative orprogram costs to the benefitting costobjectives/categories based ondocumented distributions of actual timeworked or other equitable costallocation methods.

(3) Specific costs charged to anoverhead or indirect cost pool that canbe identified directly as a program costare to be charged as a program cost.Documentation of such charges must bemaintained.

(4) Except as provided at paragraph(c)(1), all costs incurred for functionsand activities of subrecipients andvendors are program costs.

(5) Costs of the following informationsystems including the purchase, systemsdevelopment and operating (e.g., dataentry) costs are charged to the programcategory:

(i) Tracking or monitoring ofparticipant and performanceinformation;

(ii) Employment statisticsinformation, including job listinginformation, job skills information, anddemand occupation information;

(iii) Performance and program costinformation on eligible providers oftraining services, youth activities, andappropriate education activities;

(iv) Local area performanceinformation; and

(v) Information relating to supportiveservices and unemployment insuranceclaims for program participants;

(6) Continuous improvementactivities are charged to administrationor program category based on thepurpose or nature of the activity to beimproved. Documentation of suchcharges must be maintained.

§ 667.250 What requirements relate to theenforcement of the Military SelectiveService Act?

The requirements relating to theenforcement of the Military SelectiveService Act are found at WIA section189(h).

§ 667.255 Are there special rules thatapply to veterans when income is a factorin eligibility determinations?

Yes, under 38 U.S.C. 4213, when pastincome is an eligibility determinant forFederal employment or training

programs, any amounts received asmilitary pay or allowances by anyperson who served on active duty, andcertain other specified benefits must bedisregarded. This applies whendetermining if a person is a ‘‘low-income individual’’ for eligibilitypurposes, (for example, in the WIAyouth, Job Corps, or NFJP programs) andapplies if income is used as a factor inapplying the priority provision, under20 CFR 663.600, when WIA adult fundsare limited. Questions regarding theapplication of 38 U.S.C. 4213 should bedirected to the Veterans Employmentand Training Service.

§ 667.260 May WIA title I funds be spentfor construction?

WIA title I funds must not be spent onconstruction or purchase of facilities orbuildings except:

(a) To meet a recipient’s, as the termis defined in 29 CFR 37.4, obligation toprovide physical and programmaticaccessibility and reasonableaccommodation, as required by section504 of the Rehabilitation Act of 1973, asamended, and the Americans withDisabilities Act of 1990, as amended;

(b) To fund repairs, renovations,alterations and capital improvements ofproperty, including:

(1) SESA real property, identified atWIA section 193, using a formula thatassesses costs proportionate to spaceutilized;

(2) JTPA owned property which istransferred to WIA title I programs;

(c) Job Corps facilities, as authorizedby WIA section 160(3)(B); and

(d) To fund disaster reliefemployment on projects for demolition,cleaning, repair, renovation, andreconstruction of damaged anddestroyed structures, facilities, andlands located within a disaster area.(WIA sec. 173(d).)

§ 667.262 Are employment generatingactivities, or similar activities, allowableunder WIA title I?

(a) Under WIA section 181(e), WIAtitle I funds may not be spent onemployment generating activities,economic development, and othersimilar activities, unless they aredirectly related to training for eligibleindividuals. For purposes of thissection, employer outreach and jobdevelopment activities are directlyrelated to training for eligibleindividuals.

(b) These employer outreach and jobdevelopment activities include:

(1) Contacts with potential employersfor the purpose of placement of WIAparticipants;

(2) Participation in businessassociations (such as chambers of

commerce); joint labor managementcommittees, labor associations, andresource centers;

(3) WIA staff participation oneconomic development boards andcommissions, and work with economicdevelopment agencies, to:

(i) Provide information about WIAprograms,

(ii) Assist in making informeddecisions about community job trainingneeds, and

(iii) Promote the use of first sourcehiring agreements and enterprise zonevouchering services,

(4) Active participation in localbusiness resource centers (incubators) toprovide technical assistance to smalland new business to reduce the rate ofbusiness failure;

(5) Subscriptions to relevantpublications;

(6) General dissemination ofinformation on WIA programs andactivities;

(7) The conduct of labor marketsurveys;

(8) The development of on-the-jobtraining opportunities; and

(9) Other allowable WIA activities inthe private sector. (WIA sec. 181(e).)

§ 667.264 What other activities areprohibited under title I of WIA?

(a) WIA title I funds must not be spenton:

(1) The wages of incumbentemployees during their participation ineconomic development activitiesprovided through a Statewide workforceinvestment system, (WIA sec.181(b)(1).);

(2) Public service employment, exceptto provide disaster relief employment,as specifically authorized in section173(d) of WIA, (WIA sec. 195(10));

(3) Expenses prohibited under anyother Federal, State or local law orregulation.

(b) WIA formula funds available toStates and local areas under subtitle B,title I of WIA must not be used forforeign travel. (WIA sec. 181(e).)

§ 667.266 What are the limitations relatedto sectarian activities?

(a) Limitations related to sectarianactivities are set forth at WIA section188(a)(3) and 29 CFR 37.6(f).

(b) Under these limitations:(1) WIA title I financial assistance

may not be spent on the employment ortraining of participants in sectarianactivities. This limitation is more fullydescribed at 29 CFR 37.6(f)(1).

(2) Under 29 CFR 37.6(f)(1),participants must not be employedunder title I of WIA to carry out theconstruction, operation, or maintenance



of any part of any facility that is usedor to be used for sectarian instruction oras a place for religious worship.However, as discussed in 29 CFR37.6(f)(2), WIA financial assistance maybe used for the maintenance of a facilitythat is not primarily or inherentlydevoted to sectarian instruction orreligious worship if the organizationoperating the facility is part of aprogram or activity providing services toWIA participants. (WIA sec. 188(a)(3).)

§ 667.268 What prohibitions apply to theuse of WIA title I funds to encouragebusiness relocation?

(a) WIA funds may not be used orproposed to be used for:

(1) The encouragement or inducementof a business, or part of a business, torelocate from any location in the UnitedStates, if the relocation results in anyemployee losing his or her job at theoriginal location;

(2) Customized training, skill training,or on-the-job training or companyspecific assessments of job applicants oremployees of a business or a part of abusiness that has relocated from anylocation in the United States, until thecompany has operated at that locationfor 120 days, if the relocation hasresulted in any employee losing his orher jobs at the original location.

(b) Pre-award review. To verify that anestablishment which is new orexpanding is not, in fact, relocatingemployment from another area,standardized pre-award review criteriadeveloped by the State must becompleted and documented jointly bythe local area with the establishment asa prerequisite to WIA assistance.

(1) The review must include namesunder which the establishment doesbusiness, including predecessors andsuccessors in interest; the name, title,and address of the company officialcertifying the information, and whetherWIA assistance is sought in connectionwith past or impending job losses atother facilities, including a review ofwhether WARN notices relating to theemployer have been filed.

(2) The review may includeconsultations with labor organizationsand others in the affected local area(s).(WIA sec. 181(d).)

§ 667.269 What procedures and sanctionsapply to violations of §§ 667.260 through667.268?

(a) We will promptly review and takeappropriate action on alleged violationsof the provisions relating to:

(1) Employment generating activities(§ 667.262);

(2) Other prohibited activities(§ 667.264);

(3) The limitation related to sectarianactivities (§ 667.266);

(4) The use of WIA title I funds toencourage business relocation(§ 667.268).

(b) Procedures for the investigationand resolution of the violations areprovided for under the Grant Officer’sresolution process at § 667.510.Sanctions and remedies are provided forunder WIA section 184(c) for violationsof the provisions relating to:

(1) Construction (§ 667.260);(2) Employment generating activities

(§ 667.262);(3) Other prohibited activities

(§ 667.264); and(4) The limitation related to sectarian

activities (§ 667.266(b)(1)).(c) Sanctions and remedies are

provided for in WIA section 181(d)(3)for violations of § 667.268, whichaddresses business relocation.

(d) Violations of § 667.266(b)(2) willbe handled in accordance with the DOLnondiscrimination regulationsimplementing WIA section 188, codifiedat 29 CFR part 37.

§ 667.270 What safeguards are there toensure that participants in WorkforceInvestment Act employment and trainingactivities do not displace other employees?

(a) A participant in a program oractivity authorized under title I of WIAmust not displace (including a partialdisplacement, such as a reduction in thehours of non-overtime work, wages, oremployment benefits) any currentlyemployed employee (as of the date ofthe participation).

(b) A program or activity authorizedunder title I of WIA must not impairexisting contracts for services orcollective bargaining agreements. Whena program or activity authorized undertitle I of WIA would be inconsistentwith a collective bargaining agreement,the appropriate labor organization andemployer must provide writtenconcurrence before the program oractivity begins.

(c) A participant in a program oractivity under title I of WIA may not beemployed in or assigned to a job if:

(1) Any other individual is on layofffrom the same or any substantiallyequivalent job;

(2) The employer has terminated theemployment of any regular,unsubsidized employee or otherwisecaused an involuntary reduction in itsworkforce with the intention of fillingthe vacancy so created with the WIAparticipant; or

(3) The job is created in a promotionalline that infringes in any way on thepromotional opportunities of currentlyemployed workers.

(d) Regular employees and programparticipants alleging displacement mayfile a complaint under the applicablegrievance procedures found at§ 667.600. (WIA sec. 181.)

§ 667.272 What wage and labor standardsapply to participants in activities under titleI of WIA?

(a) Individuals in on-the-job trainingor individuals employed in activitiesunder title I of WIA must becompensated at the same rates,including periodic increases, as traineesor employees who are similarly situatedin similar occupations by the sameemployer and who have similartraining, experience and skills. Suchrates must be in accordance withapplicable law, but may not be less thanthe higher of the rate specified insection 6(a)(1) of the Fair LaborStandards Act of 1938 (29 U.S.C.206(a)(1)) or the applicable State or localminimum wage law.

(b) Individuals in on-the-job trainingor individuals employed in programsand activities under Title I of WIA mustbe provided benefits and workingconditions at the same level and to thesame extent as other trainees oremployees working a similar length oftime and doing the same type of work.

(c) Allowances, earnings, andpayments to individuals participating inprograms under Title I of WIA are notconsidered as income for purposes ofdetermining eligibility for and theamount of income transfer and in-kindaid furnished under any Federal orFederally assisted program based onneed other than as provided under theSocial Security Act (42 U.S.C. 301 etseq.). (WIA sec. 181(a)(2).)

§ 667.274 What health and safetystandards apply to the working conditionsof participants in activities under title I ofWIA?

(a) Health and safety standardsestablished under Federal and State lawotherwise applicable to workingconditions of employees are equallyapplicable to working conditions ofparticipants engaged in programs andactivities under Title I of WIA.

(b)(1) To the extent that a Stateworkers’ compensation law applies,workers’ compensation must beprovided to participants in programsand activities under Title I of WIA onthe same basis as the compensation isprovided to other individuals in theState in similar employment.

(2) If a State workers’ compensationlaw applies to a participant in workexperience, workers’ compensationbenefits must be available for injuriessuffered by the participant in such workexperience. If a State workers’



compensation law does not apply to aparticipant in work experience,insurance coverage must be secured forinjuries suffered by the participant inthe course of such work experience.

§ 667.275 What are a recipient’sobligations to ensure nondiscriminationand equal opportunity, as well asnonparticipation in sectarian activities?

(a)(1) Recipients, as defined in 29 CFR37.4, must comply with thenondiscrimination and equalopportunity provisions of WIA section188 and its implementing regulations,codified at 29 CFR part 37. Under thatdefinition, the term ‘‘recipients’’includes State and Local WorkforceInvestment Boards, One-Stop operators,service providers, vendors, andsubrecipients, as well as other types ofindividuals and entitites.

(2) Nondiscrimination and equalopportunity requirements andprocedures, including complaintprocessing and compliance reviews, aregoverned by the regulationsimplementing WIA section 188, codifiedat 29 CFR part 37, and are administeredand enforced by the DOL Civil RightsCenter.

(3) As described in § 667.260(a),financial assistance provided underWIA title I may be used to meet arecipient’s obligation to providephysical and programmatic accessibilityand reasonable accommodation/modification in regard to the WIAprogram, as required by section 504 ofthe Rehabilitation Act of 1973, asamended, the Americans withDisabilities Act of 1990, as amended,section 188 of WIA, and the regulationsimplementing these statutoryprovisions.

(b) Under 29 CFR 37.6(f), theemployment or training of participantsin sectarian activities is prohibited,except with respect to the maintenanceof a facility that is not primarily orinherently devoted to sectarianinstruction or religious worship, in acase in which the organization operatingthe facility is part of a program oractivity providing services toparticipants.


§ 667.300 What are the reportingrequirements for Workforce Investment Actprograms?

(a) General. All States and other directgrant recipients must report financial,participant, and performance data inaccordance with instructions issued byDOL. Required reports must besubmitted no more frequently thanquarterly within a time period specifiedin the reporting instructions.

(b) Subrecipient reporting. (1) A Stateor other direct grant recipient mayimpose different forms or formats,shorter due dates, and more frequentreporting requirements onsubrecipients. However, the recipient isrequired to meet the reportingrequirements imposed by DOL.

(2) If a State intends to imposedifferent reporting requirements, it mustdescribe those reporting requirements inits State WIA plan.

(c) Financial reports. (1) Each grantrecipient must submit financial reports.

(2) Reports must include any incomeor profits earned, including suchincome or profits earned bysubrecipients, and any costs incurred(such as stand-in costs) that areotherwise allowable except for fundinglimitations. (WIA sec. 185(f)(2))

(3) Reported expenditures andprogram income, including any profitsearned, must be on the accrual basis ofaccounting and cumulative by fiscalyear of appropriation. If the recipient’saccounting records are not normallykept on the accrual basis of accounting,the recipient must develop accrualinformation through an analysis of thedocumentation on hand.

(d) Due date. Financial reports andparticipant data reports are due no laterthan 45 days after the end of eachquarter unless otherwise specified inreporting instructions. A final financialreport is required 90 days after theexpiration of a funding period or thetermination of grant support.

(e) Annual performance progressreport. An annual performance progressreport for each of the three programsunder title I, subpart B is required byWIA section 136(d).

(1) A State failing to submit any ofthese annual performance progressreports within 45 days of the due datemay have its grant (for that program orall title I, subpart B programs) for thesucceeding year reduced by as much asfive percent, as provided by WIAsection 136(g)(1)(B).

(2) States submitting annualperformance progress reports thatcannot be validated or verified asaccurately counting and reportingactivities in accordance with thereporting instructions, may be treated asfailing to submit annual reports, and besubject to sanction. Sanctions related toState performance or failure to submitthese reports timely cannot result in atotal grant reduction of more than fivepercent. Any sanction would be inaddition to having to repay the amountof any incentive funds granted based onthe invalid report.


§ 667.400 Who is responsible for oversightand monitoring of WIA title I grants?

(a) The Secretary is authorized tomonitor all recipients and subrecipientsof all grants awarded and fundsexpended under WIA title I todetermine compliance with the Act andthe WIA regulations, and mayinvestigate any matter deemednecessary to determine suchcompliance. Federal oversight will beconducted primarily at the recipientlevel.

(b) In each fiscal year, we will alsoconduct in-depth reviews in severalStates, including financial andperformance audits, to assure that fundsare spent in accordance with the Act.Priority for such in-depth reviews willbe given to States not meeting annualadjusted levels of performance.

(c)(1) Each recipient and subrecipientmust continuously monitor grant-supported activities in accordance withthe uniform administrativerequirements at 29 CFR parts 95 and 97,as applicable, including the applicablecost principles indicated at 29 CFR97.22(b) or 29 CFR 95.27, for all entitiesreceiving WIA title I funds. Forgovernmental units, the applicablerequirements are at 29 CFR part 97. Fornon-profit organizations, the applicablerequirements are at 29 CFR part 95.

(2) In the case of grants under WIAsections 127 and 132, the Governormust develop a State monitoring systemthat meets the requirements of§ 667.410(b). The Governor mustmonitor Local Boards annually forcompliance with applicable laws andregulations in accordance with the Statemonitoring system. Monitoring mustinclude an annual review of each localarea’s compliance with the uniformadministrative requirements.

§ 667.410 What are the oversight roles andresponsibilities of recipients andsubrecipients?

(a) Roles and responsibilities for allrecipients and subrecipients of fundsunder WIA title I in general. Eachrecipient and subrecipient must conductregular oversight and monitoring of itsWIA activities and those of itssubrecipients and contractors in orderto:

(1) Determine that expenditures havebeen made against the cost categoriesand within the cost limitations specifiedin the Act and the regulations in thispart;

(2) Determine whether or not there iscompliance with other provisions of theAct and the WIA regulations and otherapplicable laws and regulations; and



(3) Provide technical assistance asnecessary and appropriate.

(b) State roles and responsibilities forgrants under WIA sections 127 and 132.

(1) The Governor is responsible forthe development of the State monitoringsystem. The Governor must be able todemonstrate, through a monitoring planor otherwise, that the State monitoringsystem meets the requirements ofparagraph (b)(2) of this section.

(2) The State monitoring system must:(i) Provide for annual on-site

monitoring reviews of local areas’compliance with DOL uniformadministrative requirements, as requiredby WIA section 184(a)(4);

(ii) Ensure that established policies toachieve program quality and outcomesmeet the objectives of the Act and theWIA regulations, including policiesrelating to: the provision of services byOne-Stop Centers; eligible providers oftraining services; and eligible providersof youth activities;

(iii) Enable the Governor to determineif subrecipients and contractors havedemonstrated substantial compliancewith WIA requirements; and

(iv) Enable the Governor to determinewhether a local plan will bedisapproved for failure to makeacceptable progress in addressingdeficiencies, as required in WIA section118(d)(1).

(v) Enable the Governor to ensurecompliance with the nondiscriminationand equal opportunity requirements ofWIA section 188 and 29 CFR part 37.Requirements for these aspects of themonitoring system are set forth in 29CFR 37.54(d)(2)(ii).

(3) The State must conduct an annualon-site monitoring review of each localarea’s compliance with DOL uniformadministrative requirements, includingthe appropriate administrativerequirements for subrecipients and theapplicable cost principles indicated at§ 667.200 for all entities receiving WIAtitle I funds.

(4) The Governor must require thatprompt corrective action be taken if anysubstantial violation of standardsidentified in paragraphs (b) (2) or (3) ofthis section is found. (WIA sec.184(a)(5).)

(5) The Governor must impose thesanctions provided in WIA section 184(b) and (c) in the event of asubrecipient’s failure to take requiredcorrective action required underparagraph (b)(4) of this section.

(6) The Governor may issue additionalrequirements and instructions tosubrecipients on monitoring activities.

(7) The Governor must certify to theSecretary every two years that:

(i) The State has implementeduniform administrative requirements;

(ii) The State has monitored localareas to ensure compliance withuniform administrative requirements;and

(iii) The State has taken appropriatecorrective action to secure suchcompliance. (WIA sec. 184(a)(6)(A), (B),and (C).)

Subpart E—Resolution of Findingsfrom Monitoring and OversightReviews

§ 667.500 What procedures apply to theresolution of findings arising from audits,investigations, monitoring and oversightreviews?

(a) Resolution of subrecipient-levelfindings. (1) The Governor isresponsible for resolving findings thatarise from the State’s monitoringreviews, investigations and audits(including OMB Circular A–133 audits)of subrecipients.

(2) A State must utilize the auditresolution, debt collection and appealprocedures that it uses for other Federalgrant programs.

(3) If a State does not have suchprocedures, it must prescribe standardsand procedures to be used for this grantprogram.

(b) Resolution of State and otherdirect recipient level findings. (1) TheSecretary is responsible for resolvingfindings that arise from Federal audits,monitoring reviews, investigations,incident reports, and recipient levelOMB Circular A–133 audits.

(2) The Secretary uses the DOL auditresolution process, consistent with theSingle Audit Act of 1996 and OMBCircular A–133, and Grant OfficerResolution provisions of § 667.510, asappropriate.

(3) A final determination issued by aGrant Officer under this process may beappealed to the DOL Office ofAdministrative Law Judges under theprocedures at § 667.800.

(c) Resolution of nondiscriminationfindings. Findings arising frominvestigations or reviews conductedunder nondiscrimination laws will beresolved in accordance with WIAsection 188 and the Department of Labornondiscrimination regulationsimplementing WIA section 188, codifiedat 29 CFR part 37.

§ 667.505 How do we resolve investigativeand monitoring findings?

(a) As a result of an investigation, on-site visit or other monitoring, we notifythe recipient of the findings of theinvestigation and gives the recipient aperiod of time (not more than 60 days)

to comment and to take appropriatecorrective actions.

(b) The Grant Officer reviews thecomplete file of the investigation ormonitoring report and the recipient’sactions under paragraph (a) of thissection. The Grant Officer’s review takesinto account the sanction provisions ofWIA section 184(b) and (c). If the GrantOfficer agrees with the recipient’shandling of the situation, the GrantOfficer so notifies the recipient. Thisnotification constitutes final agencyaction.

(c) If the Grant Officer disagrees withthe recipient’s handling of the matter,the Grant Officer proceeds under§ 667.510.

§ 667.510 What is the Grant Officerresolution process?

(a) General. When the Grant Officer isdissatisfied with the State’s dispositionof an audit or other resolution ofviolations (including those arising out ofincident reports or compliance reviews),or with the recipient’s response tofindings resulting from investigations ormonitoring report, the initial and finaldetermination process, set forth in thissection, is used to resolve the matter.

(b) Initial determination. The GrantOfficer makes an initial determinationon the findings for both those matterswhere there is agreement and thosewhere there is disagreement with therecipient’s resolution, including theallowability of questioned costs oractivities. This initial determination isbased upon the requirements of the Actand regulations, and the terms andconditions of the grants, contracts, orother agreements under the Act.

(c) Informal resolution. Except in anemergency situation, when the Secretaryinvokes the authority described in WIAsection 184(e), the Grant Officer may notrevoke a recipient’s grant in whole or inpart, nor institute corrective actions orsanctions, without first providing therecipient with an opportunity to presentdocumentation or arguments to resolveinformally those matters in controversycontained in the initial determination.The initial determination must providefor an informal resolution period of atleast 60 days from issuance of the initialdetermination. If the matters areresolved informally, the Grant Officermust issue a final determination underparagraph (d) of this section whichnotifies the parties in writing of thenature of the resolution and may closethe file.

(d) Grant Officer’s finaldetermination. (1) If the matter is notfully resolved informally, the GrantOfficer provides each party with awritten final determination by certified



mail, return receipt requested. Foraudits of recipient-level entities andother recipients which receive WIAfunds directly from DOL, ordinarily, thefinal determination is issued not laterthan 180 days from the date that theOffice of Inspector General (OIG) issuesthe final approved audit report to theEmployment and TrainingAdministration. For audits ofsubrecipients conducted by the OIG,ordinarily the final determination isissued not later than 360 days from thedate the OIG issues the final approvedaudit report to ETA.

(2) A final determination under thisparagraph (d) must:

(i) Indicate whether efforts toinformally resolve matters contained inthe initial determination have beenunsuccessful;

(ii) List those matters upon which theparties continue to disagree;

(iii) List any modifications to thefactual findings and conclusions setforth in the initial determination andthe rationale for such modifications;

(iv) Establish a debt, if appropriate;(v) Require corrective action, when

needed;(vi) Determine liability, method of

restitution of funds and sanctions; and(vii) Offer an opportunity for a

hearing in accordance with § 667.800 ofthis part.

(3) Unless a hearing is requested, afinal determination under thisparagraph (d) is final agency action andis not subject to further review.

(e) Nothing in this subpart precludesthe Grant Officer from issuing an initialdetermination and/or finaldetermination directly to a subrecipient,in accordance with section 184(d)(3) ofthe Act. In such a case, the Grant Officerwill inform the recipient of this action.

Subpart F—Grievance Procedures,Complaints, and State AppealsProcesses

§ 667.600 What local area, State and directrecipient grievance procedures must beestablished?

(a) Each local area, State and directrecipient of funds under title I of WIA,except for Job Corps, must establish andmaintain a procedure for grievances andcomplaints according to therequirements of this section. Thegrievance procedure requirementsapplicable to Job Corps are set forth at20 CFR 670.990.

(b) Each local area, State, and directrecipient must:

(1) Provide information about thecontent of the grievance and complaintprocedures required by this section toparticipants and other interested parties

affected by the local WorkforceInvestment System, including One-Stoppartners and service providers;

(2) Require that every entity to whichit awards Title I funds must provide theinformation referred to in paragraph(b)(1) of this section to participantsreceiving Title I-funded services fromsuch entities; and

(3) Must make reasonable efforts toassure that the information referred to inparagraph (b)(1) of this section will beunderstood by affected participants andother individuals, including youth andthose who are limited-English speakingindividuals. Such efforts must complywith the language requirements of 29CFR 37.35 regarding the provision ofservices and information in languagesother than English.

(c) Local area procedures mustprovide:

(1) A process for dealing withgrievances and complaints fromparticipants and other interested partiesaffected by the local WorkforceInvestment System, including One-Stoppartners and service providers;

(2) An opportunity for an informalresolution and a hearing to becompleted within 60 days of the filingof the grievance or complaint;

(3) A process which allows anindividual alleging a labor standardsviolation to submit the grievance to abinding arbitration procedure, if acollective bargaining agreementcovering the parties to the grievance soprovides; and

(4) An opportunity for a local levelappeal to a State entity when:

(i) No decision is reached within 60days; or

(ii) Either party is dissatisfied withthe local hearing decision.

(d) State procedures must provide:(1) A process for dealing with

grievances and complaints fromparticipants and other interested partiesaffected by the Statewide WorkforceInvestment programs;

(2) A process for resolving appealsmade under paragraph (c)(4) of thissection;

(3) A process for remandinggrievances and complaints related to thelocal Workforce Investment Actprograms to the local area grievanceprocess; and

(4) An opportunity for an informalresolution and a hearing to becompleted within 60 days of the filingof the grievance or complaint.

(e) Procedures of direct recipientsmust provide:

(1) A process for dealing withgrievance and complaints fromparticipants and other interested partiesaffected by the recipient’s WorkforceInvestment Act programs; and

(2) An opportunity for an informalresolution and a hearing to becompleted within 60 days of the filingof the grievance or complaint.

(f) The remedies that may be imposedunder local, State and direct recipientgrievance procedures are enumerated atWIA section 181(c)(3).

(g)(1) The provisions of this sectionon grievance procedures do not apply todiscrimination complaints broughtunder WIA section 188 and/or 29 CFRpart 37. Such complaints must behandled in accordance with theprocedures set forth in that regulatorypart.

(2) Questions about or complaintsalleging a violation of thenondiscrimination provisions of WIAsection 188 may be directed or mailedto the Director, Civil Rights Center, U.S.Department of Labor, Room N4123, 200Constitution Avenue, NW, Washington,D.C. 20210, for processing.

(h) Nothing in this subpart precludesa grievant or complainant from pursuinga remedy authorized under anotherFederal, State or local law.

§ 667.610 What processes do we use toreview State and local grievances andcomplaints?

(a) We investigate allegations arisingthrough the grievance proceduresdescribed in § 667.600 when:

(1) A decision on a grievance orcomplaint under § 667.600(d) has notbeen reached within 60 days of receiptof the grievance or complaint or within60 days of receipt of the request forappeal of a local level grievance andeither party appeals to the Secretary; or

(2) A decision on a grievance orcomplaint under § 667.600(d) has beenreached and the party to which suchdecision is adverse appeals to theSecretary.

(b) We must make a final decision onan appeal under paragraph (a) of thissection no later than 120 days afterreceiving the appeal.

(c) Appeals made under paragraph(a)(2) of this section must be filedwithin 60 days of the receipt of thedecision being appealed. Appeals madeunder paragraph (a)(1) of this sectionmust be filed within 120 days of thefiling of the grievance with the State, orthe filing of the appeal of a localgrievance with the State. All appealsmust be submitted by certified mail,return receipt requested, to theSecretary, U.S. Department of Labor,Washington, DC 20210, Attention:ASET. A copy of the appeal must besimultaneously provided to theappropriate ETA RegionalAdministrator and the opposing party.



(d) Except for complaints arisingunder WIA section 184(f) or section 188,grievances or complaints made directlyto the Secretary will be referred to theappropriate State or local area forresolution in accordance with thissection, unless we notify the parties thatthe Department of Labor will investigatethe grievance under the procedures at§ 667.505. Discrimination complaintsbrought under WIA section 188 or 29CFR part 37 will be referred to theDirector of the Civil Rights Center.

§ 667.630 How are complaints and reportsof criminal fraud and abuse addressedunder WIA?

Information and complaints involvingcriminal fraud, waste, abuse or othercriminal activity must be reportedimmediately through the Department’sIncident Reporting System to the DOLOffice of Inspector General, Office ofInvestigations, Room S5514, 200Constitution Avenue NW., Washington,D.C. 20210, or to the correspondingRegional Inspector General forInvestigations, with a copysimultaneously provided to theEmployment and TrainingAdministration. The Hotline number is1–800–347–3756. Complaints of a non-criminal nature are handled under theprocedures set forth in § 667.505 orthrough the Department’s IncidentReporting System.

§ 667.640 What additional appealprocesses or systems must a State have forthe WIA program?

(a) Non-designation of local areas: (1)The State must establish, and include inits State Plan, due process procedureswhich provide expeditious appeal to theState Board for a unit or combination ofunits of general local government or arural concentrated employment programgrant recipient (as described at WIAsection 116(a)(2)(B)) that requests, but isnot granted, automatic or temporary andsubsequent designation as a localworkforce investment area under WIAsection 116(a)(2) or 116(a)(3).

(2) These procedures must provide anopportunity for a hearing and prescribeappropriate time limits to ensureprompt resolution of the appeal.

(3) If the appeal to the State Boarddoes not result in designation, theappellant may request review by theSecretary under § 667.645.

(4) If the Secretary determines that theappellant was not accorded proceduralrights under the appeal processestablished in paragraph (a)(1) of thissection, or that the area meets therequirements for designation at WIAsection 116(a)(2) or 116(a)(3), theSecretary may require that the area be

designated as a workforce investmentarea.

(b) Denial or termination of eligibilityas a training provider. (1) A State mustestablish procedures which allowproviders of training services theopportunity to appeal:

(i) Denial of eligibility by a LocalBoard or the designated State agencyunder WIA section 122 (b), (c) or (e);

(ii) Termination of eligibility or otheraction by a Local Board or State agencyunder WIA section 122(f); or

(iii) Denial of eligibility as a providerof on-the-job training (OJT) orcustomized training by a One-Stopoperator under WIA section 122(h).

(2) Such procedures must provide anopportunity for a hearing and prescribeappropriate time limits to ensureprompt resolution of the appeal.

(3) A decision under this State appealprocess may not be appealed to theSecretary.

(c) Testing and sanctioning for use ofcontrolled substances. (1) A State mustestablish due process procedures whichprovide expeditious appeal for:

(i) WIA participants subject to testingfor use of controlled substances,imposed under a State policyestablished under WIA section 181(f);and

(ii) WIA participants who aresanctioned after testing positive for theuse of controlled substances, under thepolicy described in paragraph (c)(1)(i) ofthis section.

(2) A decision under this State appealprocess may not be appealed to theSecretary.

§ 667.645 What procedures apply to theappeals of non-designation of local areas?

(a) A unit or combination of units ofgeneral local government or ruralconcentrated employment programgrant recipient (as described in WIAsection 116(a)(2)(B)) whose appeal ofthe denial of a request for automatic ortemporary and subsequent designationas a local workforce investment area tothe State Board has not resulted indesignation may appeal the denial oflocal area designation to the Secretary.

(b) Appeals made under paragraph (a)of this section must be filed no laterthan 30 days after receipt of writtennotification of the denial from the StateBoard, and must be submitted bycertified mail, return receipt requested,to the Secretary, U.S. Department ofLabor, Washington, DC 20210,Attention: ASET. A copy of the appealmust be simultaneously provided to theState Board.

(c) The appellant must establish thatit was not accorded procedural rightsunder the appeal process set forth in the

State Plan, or establish that it meets therequirements for designation in WIAsection 116(a)(2) or (a)(3). The Secretarymay consider any comments submittedin response by the State Board.

(d) If the Secretary determines that theappellant has met its burden ofestablishing that it was not accordedprocedural rights under the appealprocess set forth in the State Plan, orthat it meets the requirements fordesignation in WIA section 116(a)(2) or(a)(3), the Secretary may require that thearea be designated as a local workforceinvestment area.

(e) The Secretary must issue a writtendecision to the Governor and theappellant.

§ 667.650 What procedures apply to theappeals of the Governor’s imposition ofsanctions for substantial violations orperformance failures by a local area?

(a) A local area which has been foundin substantial violation of WIA title I,and has received notice from theGovernor that either all or part of thelocal plan will be revoked or that areorganization will occur, may appealsuch sanctions to the Secretary underWIA section 184(b). The sanctions donot become effective until:

(1) The time for appeal has expired;or

(2) The Secretary has issued adecision.

(b) A local area which has failed tomeet local performance measures fortwo consecutive years, and has receivedthe Governor’s notice of intent toimpose a reorganization plan, mayappeal such sanctions to the Secretaryunder WIA section 136(h)(1)(B).

(c) Appeals made under paragraph (a)or (b) of this section must be filed nolater than 30 days after receipt ofwritten notification of the revoked planor imposed reorganization, and must besubmitted by certified mail, returnreceipt requested, to the Secretary, U.S.Department of Labor, Washington, DC20210, Attention: ASET. A copy of theappeal must be simultaneouslyprovided to the Governor.

(d) The Secretary may consider anycomments submitted in response by theGovernor.

(e) The Secretary will notify theGovernor and the appellant in writing ofthe Secretary’s decision underparagraph (a) of this section within 45days after receipt of the appeal. TheSecretary will notify the Governor andthe appellant in writing of theSecretary’s decision under paragraph (b)of this section within 30 days afterreceipt of the appeal.



Subpart G—Sanctions, CorrectiveActions, and Waiver of Liability

§ 667.700 What procedure do we use toimpose sanctions and corrective actions onrecipients and subrecipients of WIA grantfunds?

(a)(1) Except for actions under WIAsection 188(a) or 29 CFR part 37(relating to nondiscriminationrequirements), the Grant Officer uses theinitial and final determinationprocedures outlined in § 667.510 toimpose a sanction or corrective action.

(2) To impose a sanction or correctiveaction for a violation of WIA section188(a) or 29 CFR part 37, theDepartment will use the procedures setforth in that regulatory part.

(b) To impose a sanction or correctiveaction for noncompliance with theuniform administrative requirements setforth at section 184(a)(3) of WIA, and§ 667.200(a), when the Grant Officerdetermines that the Governor has nottaken corrective action to remedy theviolation as required by WIA section184(a)(5), the Grant Officer, under theauthority of WIA section 184(a)(7) and§ 667.710(c), must require the Governorto impose any of the corrective actionsset forth at WIA section 184(b)(1). If theGovernor fails to impose the correctiveactions required by the Grant Officer,the Secretary may immediately suspendor terminate financial assistance inaccordance with WIA section 184(e).

(c) For substantial violations of WIAstatutory and regulatory requirements, ifthe Governor fails to promptly take theactions specified in WIA section184(b)(1), the Grant Officer may imposesuch actions directly against the localarea.

(d) The Grant Officer may also imposea sanction directly against asubrecipient, as authorized in section184(d)(3) of the Act. In such a case, theGrant Officer will inform the recipientof the action.

§ 667.705 Who is responsible for fundsprovided under title I of WIA?

(a) The recipient is responsible for allfunds under its grant(s).

(b) The political jurisdiction(s) of thechief elected official(s) in a localworkforce investment area is liable forany misuse of the WIA grant fundsallocated to the local area under WIAsections 128 and 133, unless the chiefelected official(s) reaches an agreementwith the Governor to bear such liability.

(c) When a local workforce area iscomposed of more than one unit ofgeneral local government, the liability ofthe individual jurisdictions must bespecified in a written agreementbetween the chief elected officials.

§ 667.710 What actions are required toaddress the failure of a local area to complywith the applicable uniform administrativeprovisions?

(a) If, as part of the annual on-sitemonitoring of local areas, the Governordetermines that a local area is not incompliance with the uniformadministrative requirements found at 29CFR part 95 or part 97, as appropriate,the Governor must:

(1) Require corrective action to secureprompt compliance; and

(2) Impose the sanctions provided forat section 184(b) if the Governor findsthat the local area has failed to taketimely corrective action.

(b) An action by the recipient toimpose a sanction against a local area,in accordance with this section, may beappealed to the Secretary in accordancewith § 667.650, and will not becomeeffective until:

(1) The time for appeal has expired;or

(2) The Secretary has issued adecision.

(c)(1) If the Secretary finds that theGovernor has failed to monitor andcertify compliance of local areas withthe administrative requirements, underWIA section 184(a), or that the Governorhas failed to promptly take the actionsrequired upon a determination underparagraph (a) of this section that a localarea is not in compliance with theuniform administrative requirements,the Secretary will require the Governorto take corrective actions against theState recipient or the local area, asappropriate to ensure promptcompliance.

(2) If the Governor fails to take thecorrective actions required by theSecretary under paragraph (c)(1) of thissection, the Secretary may immediatelysuspend or terminate financialassistance under WIA section 184(e).

§ 667.720 How do we handle a recipient’srequest for waiver of liability under WIAsection 184(d)(2)?

(a) A recipient may request a waiverof liability, as described in WIA section184(d)(2), and a Grant Officer mayapprove such a waiver under WIAsection 184(d)(3).

(b)(1) When the debt for which awaiver of liability is desired wasestablished in a non-Federal resolutionproceeding, the resolution report mustaccompany the waiver request.

(2) When the waiver request is madeduring the ETA Grant Officer resolutionprocess, the request must be madeduring the informal resolution perioddescribed in § 667.510(c).

(c) A waiver of the recipient’s liabilityshall be considered by the Grant Officeronly when:

(1) The misexpenditure of WIA fundsoccurred at a subrecipient’s level;

(2) The misexpenditure was not dueto willful disregard of the requirementsof title I of the Act, gross negligence,failure to observe accepted standards ofadministration, or did not constitutefraud;

(3) If fraud did exist, it wasperpetrated against the recipient/subrecipients; and

(i) The recipient/subrecipientsdiscovered, investigated, reported, andcooperated in any prosecution of theperpetrator of the fraud; and

(ii) After aggressive debt collectionaction, it has been documented thatfurther attempts at debt collection fromthe perpetrator of the fraud would beinappropriate or futile;

(4) The recipient has issued a finaldetermination which disallows themisexpenditure, the recipient’s appealprocess has been exhausted, and a debthas been established; and

(5) The recipient requests such awaiver and provides documentation todemonstrate that it has substantiallycomplied with the requirements ofsection 184(d)(2) of the Act, and thissection.

(d) The recipient will not be releasedfrom liability for misspent funds underthe determination required by section184(d) of the Act unless the GrantOfficer determines that furthercollection action, either by the recipientor subrecipients, would beinappropriate or would prove futile.

§ 667.730 What is the procedure to handlea recipient’s request for advance approvalof contemplated corrective actions?

(a) The recipient may request advanceapproval from the Grant Officer forcontemplated corrective actions,including debt collection actions, whichthe recipient plans to initiate or toforego. The recipient’s request mustinclude a description and an assessmentof all actions taken by the subrecipientsto collect the misspent funds.

(b) Based on the recipient’s request,the Grant Officer may determine that therecipient may forego certain collectionactions against a subrecipient when:

(1) The subrecipient meets the criteriaset forth in section 184(d)(2) of the Act;

(2) The misexpenditure of funds:(i) Was not made by that subrecipient

but by an entity that received WIAfunds from that subrecipient;

(ii) Was not a violation of section184(d)(1) of the Act, and did notconstitute fraud; or

(iii) If fraud did exist,(A) It was perpetrated against the

subrecipient; and:(B) The subrecipient discovered,

investigated, reported, and cooperated



in any prosecution of the perpetrator ofthe fraud; and

(C) After aggressive debt collectionaction, it has been documented thatfurther attempts at debt collection fromthe perpetrator of the fraud would beinappropriate or futile;

(3) A final determination whichdisallows the misexpenditure andestablishes a debt has been issued at theappropriate level;

(4) Final action within the recipient’sappeal system has been completed; and

(5) Further debt collection action bythat subrecipient or the recipient wouldbe either inappropriate or futile.

§ 667.740 What procedure must be usedfor administering the offset/deductionprovisions at section 184(c) of the Act?

(a)(1) For recipient levelmisexpenditures, we may determinethat a debt, or a portion thereof, may beoffset against amounts that are allottedto the recipient. Recipients must submita written request for an offset to theGrant Officer. Generally, we will applythe offset against amounts that areavailable at the recipient level foradministrative costs.

(2) The Grant Officer may approve anoffset request, under paragraph (a)(1) ofthis section, if the misexpenditures werenot due to willful disregard of therequirements of the Act and regulations,gross negligence, failure to observeaccepted standards of administration ora pattern of misexpenditure.

(b) For subrecipient levelmisexpenditures that were not due towillful disregard of the requirements ofthe Act and regulations, grossnegligence, failure to observe acceptedstandards of administration or a patternof misexpenditure, if we have requiredthe State to repay such amount the Statemay deduct an amount equal to themisexpenditure from its subsequentyear’s allocations to the local area fromfunds available for the administrativecosts of the local programs involved.

(c) If offset is granted, the debt willnot be fully satisfied until the GrantOfficer reduces amounts allotted to theState by the amount of themisexpenditure.

(d) A State may not make a deductionunder paragraph (b) of this section untilthe State has taken appropriatecorrective action to ensure fullcompliance within the local area withregard to appropriate expenditure ofWIA funds.

Subpart H—AdministrativeAdjudication and Judicial Review

§ 667.800 What actions of the Departmentmay be appealed to the Office ofAdministrative Law Judges?

(a) An applicant for financialassistance under title I of WIA which isdissatisfied because we have issued adetermination not to award financialassistance, in whole or in part, to suchapplicant; or a recipient, subrecipient,or a vendor against which the GrantOfficer has directly imposed a sanctionor corrective action, including asanction against a State under 20 CFRpart 666, may appeal to the U.S.Department of Labor, Office ofAdministrative Law Judges (OALJ)within 21 days of receipt of the finaldetermination.

(b) Failure to request a hearing within21 days of receipt of the finaldetermination constitutes a waiver ofthe right to a hearing.

(c) A request for a hearing under thissubpart must state specifically thoseissues in the final determination uponwhich review is requested. Thoseprovisions of the final determination notspecified for review, or the entire finaldetermination when no hearing hasbeen requested within the 21 days, areconsidered resolved and not subject tofurther review. Only alleged violationsof the Act, its regulations, grant or otheragreement under the Act fairly raised inthe determination, and the request forhearing are subject to review.

(d) A request for a hearing must betransmitted by certified mail, returnreceipt requested, to the ChiefAdministrative Law Judge, U.S.Department of Labor, Suite 400, 800 KStreet, NW., Washington, DC 20001,with one copy to the Departmentalofficial who issued the determination.

(e) The procedures in this subpartapply in the case of a complainant whohas not had a dispute adjudicated underthe alternative dispute resolutionprocess set forth in § 667.840 within the60 days, except that the request forhearing before the OALJ must be filedwithin 15 days of the conclusion of the60-day period provided in § 667.840. Inaddition to including the finaldetermination upon which review isrequested, the complainant mustinclude a copy of any Stipulation ofFacts and a brief summary ofproceedings.

§ 667.810 What rules of procedure apply tohearings conducted under this subpart?

(a) Rules of practice and procedure.The rules of practice and procedurepromulgated by the OALJ at subpart Aof 29 CFR part 18, govern the conduct

of hearings under this subpart.However, a request for hearing underthis subpart is not considered acomplaint to which the filing of ananswer by DOL or a DOL agency orofficial is required. Technical rules ofevidence will not apply to hearingsconducted pursuant to this part.However, rules or principles designed toassure production of the most credibleevidence available and to subjecttestimony to cross-examination willapply.

(b) Prehearing procedures. In allcases, the Administrative Law Judge(ALJ) should encourage the use ofprehearing procedures to simplify andclarify facts and issues.

(c) Subpoenas. Subpoenas necessaryto secure the attendance of witnessesand the production of documents orother items at hearings must be obtainedfrom the ALJ and must be issued underthe authority contained in section 183(c)of the Act, incorporating 15 U.S.C. 49.

(d) Timely submission of evidence.The ALJ must not permit theintroduction at the hearing of anydocumentation if it has not been madeavailable for review by the other partiesto the proceeding either at the timeordered for any prehearing conference,or, in the absence of such an order, atleast 3 weeks prior to the hearing date.

(e) Burden of production. The GrantOfficer has the burden of production tosupport her or his decision. To this end,the Grant Officer prepares and files anadministrative file in support of thedecision which must be made part ofthe record. Thereafter, the party orparties seeking to overturn the GrantOfficer’s decision has the burden ofpersuasion.

§ 667.820 What authority does theAdministrative Law Judge have in orderingrelief as an outcome of an administrativehearing?

In ordering relief, the ALJ has the fullauthority of the Secretary under the Act.

§ 667.825 What special rules apply toreviews of NFJP and WIA INA grantselections?

(a) An applicant whose applicationfor funding as a WIA INA grantee under20 CFR part 668 or as an NFJP granteeunder 20 CFR part 669 is denied inwhole or in part may request anadministrative review under§ 667.800(a) with to determine whetherthere is a basis in the record to supportthe decision. This appeal will not in anyway interfere with the designation andfunding of another organization to servethe area in question during the appealperiod. The available remedy in such anappeal is the right to be designated inthe future as the WIA INA or NFJP



grantee for the remainder of the currentgrant cycle. Neither retroactive norimmediately effective selection statusmay be awarded as relief in a non-selection appeal under this section.

(b) If the ALJ rules that theorganization should have been selectedand the organization continues to meetthe requirements of 20 CFR part 668 orpart 669, we will select and fund theorganization within 90 days of the ALJ’sdecision unless the end of the 90-dayperiod is within six (6) months of theend of the funding period. An applicantso selected is not entitled to the fullgrant amount, but will only receive thefunds remaining in the grant that havenot been expended by the currentgrantee through its operation of thegrant and its subsequent closeout.

(c) Any organization selected and/orfunded as a WIA INA or NFJP granteeis subject to being removed as grantee inthe event an ALJ decision so orders. TheGrant Officer provides instructions ontransition and close-out to a granteewhich is removed. All parties mustagree to the provisions of this paragraphas a condition for WIA INA or NFJPfunding.

(d) A successful appellant which hasnot been awarded relief because of theapplication of paragraph (b) of thissection is eligible to compete for fundsin the immediately subsequent two-yeargrant cycle. In such a situation, we willnot issue a waiver of competition andfor the area and will select a granteethrough the normal competitive process.

§ 667.830 When will the AdministrativeLaw Judge issue a decision?

(a) The ALJ should render a writtendecision not later than 90 days after theclosing of the record.

(b) The decision of the ALJ constitutesfinal agency action unless, within 20days of the decision, a party dissatisfiedwith the ALJ’s decision has filed apetition for review with theAdministrative Review Board (ARB)(established under Secretary’s Order No.2–96), specifically identifying theprocedure, fact, law or policy to whichexception is taken. Any exception notspecifically urged is deemed to havebeen waived. A copy of the petition forreview must be sent to the opposingparty at that time. Thereafter, thedecision of the ALJ constitutes finalagency action unless the ARB, within 30days of the filing of the petition forreview, notifies the parties that the casehas been accepted for review. Any caseaccepted by the ARB must be decidedwithin 180 days of acceptance. If not sodecided, the decision of the ALJconstitutes final agency action.

§ 667.840 Is there an alternative disputeresolution process that may be used inplace of an OALJ hearing?

(a) Parties to a complaint which hasbeen filed according to the requirementsof § 667.800 may choose to waive theirrights to an administrative hearingbefore the OALJ. Instead, they maychoose to transfer the settlement of theirdispute to an individual acceptable toall parties who will conduct an informalreview of the stipulated facts and rendera decision in accordance withapplicable law. A written decision mustbe issued within 60 days aftersubmission of the matter for informalreview.

(b) The waiver of the right to requesta hearing before the OALJ willautomatically be revoked if a settlementhas not been reached or a decision hasnot been issued within the 60 daysprovided in paragraph (a) of thissection.

(c) The decision rendered under thisinformal review process will be treatedas a final decision of an AdministrativeLaw Judge under section 186(b) of theAct.

§ 667.850 Is there judicial review of a finalorder of the Secretary issued under section186 of the Act?

(a) Any party to a proceeding whichresulted in a Secretary’s final orderunder section 186 of the Act may obtaina review in the United States Court ofAppeals having jurisdiction over theapplicant or recipient of funds involved,by filing a review petition within 30days of the issuance of the Secretary’sfinal order.

(b) The court has jurisdiction to makeand enter a decree affirming, modifying,or setting aside the order of theSecretary, in whole or in part.

(c) No objection to the Secretary’sorder may be considered by the courtunless the objection was specificallyurged, in a timely manner, before theSecretary. The review is limited toquestions of law, and the findings of factof the Secretary are conclusive ifsupported by substantial evidence.

(d) The judgment of the court is final,subject to certiorari review by theUnited States Supreme Court.

§ 667.860 Are there other remediesavailable outside of the Act?

Nothing contained in this subpartprejudices the separate exercise of otherlegal rights in pursuit of remedies andsanctions available outside the Act.

Subpart I—Transition Planning

§ 667.900 What special rules apply duringthe JTPA/WIA transition?

(a)(1) To facilitate planning for theimplementation of WIA, a Governormay reserve an amount equal to no morethan 2 percent of the total amount ofJTPA formula funds allotted to the Statefor fiscal years 1998 and 1999 forexpenditure on transition planningactivities. The funds may be from anyone or more of the JTPA titles andsubparts, that is, funds do not have tobe drawn proportionately from all titlesand subparts. The Governor must reportthe expenditure of these funds fortransition planning separately inaccordance with instructions we issued,but the expenditure is not required to beallocated to the various titles andsubparts;

(2) These reserved transition fundsmay be excluded from any calculationof compliance with JTPA costlimitations.

(b) Not less than 50 percent of thefunds reserved by the Governor inparagraph (a) of this section must bemade available to local entities.

(c) We will issue such other transitionguidance as is necessary andappropriate.

§ 667.910 Are JTPA participants to begrandfathered into WIA?

Yes, all JTPA participants who areenrolled in JTPA must be grandfatheredinto WIA. These participants cancomplete the JTPA services specified intheir individual service strategy, even ifthat service strategy is not allowableunder WIA, or if the participant is noteligible to receive these services underWIA.

PART 668—INDIAN AND NATIVEAMERICAN PROGRAMS UNDER TITLEI OF THE WORKFORCE INVESTMENTACT

Subpart A—Purposes and Policies

Sec.668.100 What is the purpose of the

programs established to serve NativeAmerican peoples (INA programs) undersection166 of the Workforce InvestmentAct?

668.120 How must INA programs beadministered?

668.130 What obligation do we have toconsult with the INA grantee communityin developing rules, regulations, andstandards of accountability for INAprograms?

668.140 What WIA regulations apply to theINA program?

668.150 What definitions apply to termsused in the regulations in this part?



Subpart B—Service Delivery SystemsApplicable to Section 166 Programs668.200 What are the requirements for

designation as an ‘‘Indian or NativeAmerican (INA) grantee’’?

668.210 What priority for designation isgiven to eligible organizations?

668.220 What is meant by the ‘‘ability toadminister funds’’ for designationpurposes?

668.230 How will we determine an entity’s‘‘ability to administer funds’’?

668.240 What is the process for applying fordesignation as an INA grantee?

668.250 What happens if two or moreentities apply for the same area?

668.260 How are INA grantees designated?668.270 What appeal rights are available to

entities that are denied designation?668.280 Are there any other ways in which

an entity may be designated as an INAgrantee?

668.290 Can an INA grantee’s designationbe terminated?

668.292 How does a designated entitybecome an INA grantee?

668.294 Do we have to designate an INAgrantee for every part of the country?

668.296 How are WIA funds allocated toINA grantees?

Subpart C—Services to Customers668.300 Who is eligible to receive services

under the INA program?668.340 What are INA grantee allowable

activities?668.350 Are there any restrictions on

allowable activities?668.360 What is the role of INA grantees in

the One-Stop system?668.370 What policies govern payments to

participants, including wages, trainingallowances or stipends, or directpayments for supportive services?

668.380 What will we do to strengthen thecapacity of INA grantees to delivereffective services?

Subpart D—Supplemental Youth Services668.400 What is the purpose of the

supplemental youth services program?668.410 What entities are eligible to receive

supplemental youth services funding?668.420 What are the planning

requirements for receiving supplementalyouth services funding?

668.430 What individuals are eligible toreceive supplemental youth services?

668.440 How is funding for supplementalyouth services determined?

668.450 How will supplemental youthservices be provided?

668.460 Are there performance measuresand standards applicable to thesupplemental youth services program?


668.500 What services may INA granteesprovide to or for employers undersection 166?

668.510 What services may INA granteesprovide to the community at large undersection 166?

668.520 Must INA grantees give preferenceto Indian/Native American entities in theselection of contractors or serviceproviders?

668.530 What rules govern the issuance ofcontracts and/or subgrants?

Subpart F—Accountability for Services andExpenditures

668.600 To whom is the INA granteeaccountable for the provision of servicesand the expenditure of INA funds?

668.610 How is this accountabilitydocumented and fulfilled?

668.620 What performance measures are inplace for the INA program?

668.630 What are the requirements forpreventing fraud and abuse undersection 166?

668.640 What grievance systems must asection 166 program provide?

668.650 Can INA grantees exclude segmentsof the eligible population?

Subpart G—Section 166 Planning/FundingProcess

668.700 What process must an INA granteeuse to plan its employment and trainingservices?

668.710 What planning documents must anINA grantee submit?

668.720 What information must theseplanning documents contain?

668.730 When must these plans besubmitted?

668.740 How will we review and approvesuch plans?

668.750 Under what circumstances can weor the INA grantee modify the terms ofthe grantee’s plan(s)?

Subpart H—Administrative Requirements

668.800 What systems must an INA granteehave in place to administer an INAprogram?

668.810 What types of costs are allowableexpenditures under the INA program?

668.820 What rules apply to administrativecosts under the INA program?

668.825 Does the WIA administrative costlimit for States and local areas apply tosection 166 grants?

668.830 How should INA program granteesclassify costs?

668.840 What cost principles apply to INAfunds?

668.850 What audit requirements apply toINA grants?

668.860 What cash management proceduresapply to INA grant funds?

668.870 What is ‘‘program income’’ andhow is it regulated in the INA program?

Subpart I—Miscellaneous ProgramProvisions

668.900 Does WIA provide regulatory and/or statutory waiver authority?

668.910 What information is required todocument a requested waiver?

668.920 What provisions of law orregulations may not be waived?

668.930 May INA grantees combine orconsolidate their employment andtraining funds?

668.940 What is the role of the NativeAmerican Employment and TrainingCouncil?

Authority: Secs. 506(c) and 166(h)(2), Pub.L. 105–220; 20 U.S.C. 9276(c); 29 U.S.C.2911(h)(2).

Subpart A—Purposes and Policies

§ 668.100 What is the purpose of theprograms established to serve NativeAmerican peoples (INA programs) undersection 166 of the Workforce InvestmentAct?

(a) The purpose of WIA INA programsis to support comprehensiveemployment and training activities forIndian, Alaska Native and NativeHawaiian individuals in order to:

(1) Develop more fully their academic,occupational, and literacy skills;

(2) Make them more competitive inthe workforce;

(3) Promote the economic and socialdevelopment of Indian, Alaska Native,and Native Hawaiian communitiesaccording to the goals and values ofsuch communities; and

(4) Help them achieve personal andeconomic self-sufficiency.

(b) The principal means ofaccomplishing these purposes is toenable tribes and Native Americanorganizations to provide employmentand training services to NativeAmerican peoples and theircommunities. Services should beprovided in a culturally appropriatemanner, consistent with the principlesof Indian self-determination. (WIA sec.166(a)(1).)

§ 668.120 How must INA programs beadministered?

(a) We will administer INA programsto maximize the Federal commitment tosupport the growth and development ofNative American people andcommunities as determined byrepresentatives of such communities.

(b) In administering these programs,we will observe the Congressionaldeclaration of policy set forth in theIndian Self-Determination andEducation Assistance Act, at 25 U.S.C.section 450a, as well as the Departmentof Labor’s ‘‘American Indian and AlaskaNative Policy,’’ dated July 29, 1998.

(c) The regulations in this part are notintended to abrogate the trustresponsibilities of the FederalGovernment to Native American bands,tribes, or groups in any way.

(d) We will administer INA programsthrough a single organizational unit andconsistent with the requirements insection 166(h) of the Act. We havedesignated the Division of Indian andNative American Programs (DINAP)within the Employment and TrainingAdministration (ETA) as this singleorganizational unit required by WIAsection 166(h)(1).

(e) We will establish and maintainadministrative procedures for theselection, administration, monitoring,and evaluation of Native American



employment and training programsauthorized under this Act. We willutilize staff who have a particularcompetence in this field to administerthese programs. (WIA sec. 166(h).)

§ 668.130 What obligation do we have toconsult with the INA grantee community indeveloping rules, regulations, andstandards of accountability for INAprograms?

We will consult with the NativeAmerican grantee community as a fullpartner in developing policies for theINA programs. We will actively seekand consider the views of all INAgrantees, and will discuss options withthe grantee community prior toestablishing policies and programregulations. The primary consultationvehicle is the Native AmericanEmployment and Training Council.(WIA sec. 166(h)(2).)

§ 668.140 What WIA regulations apply tothe INA program?

(a) The regulations found in thissubpart.

(b) The general administrativerequirements found in 20 CFR part 667,including the regulations concerningComplaints, Investigations and Hearingsfound at 20 CFR part 667, subpart Ethrough subpart H.

(c) The Department’s regulationscodifying the common rulesimplementing Office of Managementand Budget (OMB) Circulars whichgenerally apply to Federal programscarried out by Indian tribal governmentsand nonprofit organizations, at 29 CFRparts 95, 96, 97, and 99 as applicable.

(d) The Department’s regulations at 29CFR part 37, which implement thenondiscrimination provisions of WIAsection 188, apply to recipients offinancial assistance under WIA section166.

§ 668.150 What definitions apply to termsused in the regulations in this part?

In addition to the definitions found inWIA sections 101 and 166 and 20 CFR660.300, the following definitionsapply:

DINAP means the Division of Indianand Native American Programs withinthe Employment and TrainingAdministration of the Department.

Governing body means a body ofrepresentatives who are duly elected,appointed by duly elected officials, orselected according to traditional tribalmeans. A governing body must have theauthority to provide services to and toenter into grants on behalf of theorganization that selected or designatedit.

Grant Officer means a Department ofLabor official authorized to obligate

Federal funds. Indian or NativeAmerican (INA) Grantee means anentity which is formally designatedunder subpart B of this part to operatean INA program and which has a grantagreement under § 668.292.

NEW means the Native EmploymentWorks Program, the tribal work programauthorized under section 412(a)(2) ofthe Social Security Act, as amended bythe Personal Responsibility and WorkOpportunity Reconciliation Act (PublicLaw 104–193).

Underemployed means an individualwho is working part time but desiresfull time employment, or who isworking in employment notcommensurate with the individual’sdemonstrated level of educational and/or skill achievement.

Subpart B—Service Delivery SystemsApplicable to Section 166 Programs

§ 668.200 What are the requirements fordesignation as an ‘‘Indian or NativeAmerican (INA) grantee’’?

(a) To be designated as an INAgrantee, an entity must have:

(1) A legal status as a government oras an agency of a government, privatenon-profit corporation, or a consortiumwhich contains at least one of theseentities;

(2) The ability to administer INAprogram funds, as defined at § 668.220;and

(3) A new (non-incumbent) entitymust have a population within thedesignated geographic service areawhich would provide funding under thefunding formula found at § 668.296(b) inthe amount of at least $100,000,including any amounts received forsupplemental youth services under thefunding formula at § 668.440(a).Incumbent grantees which do not meetthis dollar threshold for Program Year(PY) 2000 and beyond will begrandfathered in. We will make anexception for grantees wishing toparticipate in the demonstrationprogram under Public Law 102–477 ifall resources to be consolidated underthe Public Law 102–477 plan total atleast $100,000, with at least $20,000derived from section 166 funds asdetermined by the most recent Censusdata. Exceptions to this $20,000 limitmay be made for those entities whichare close to the limit and which havedemonstrated the capacity to administerFederal funds and operate a successfulemployment and training program.

(b) To be designated as a NativeAmerican grantee, a consortium or itsmembers must meet the requirements ofparagraph (a) of this section and must:

(1) Be in close proximity to oneanother, but they may operate in morethan one State;

(2) Have an administrative unit legallyauthorized to run the program and tocommit the other members to contracts,grants, and other legally-bindingagreements; and

(3) Be jointly and individuallyresponsible for the actions andobligations of the consortium, includingdebts.

(c) Entities potentially eligible fordesignation under paragraph (a)(1) or(b)(1) of this section are:

(1) Federally-recognized Indian tribes;(2) Tribal organizations, as defined in

25 U.S.C. 450b;(3) Alaska Native-controlled

organizations representing regional orvillage areas, as defined in the AlaskaNative Claims Settlement Act;

(4) Native Hawaiian-controlledentities;

(5) Native American-controlledorganizations serving Indians; and

(6) Consortia of eligible entities whichindividually meets the legalrequirements for a consortium describedin paragraph (c) of this section.

(d) Under WIA section 166(d)(2)(B),individuals who were eligible toparticipate under section 401 of JTPAon August 6, 1998, remain eligible toparticipate under section 166 of WIA.State-recognized tribal organizationsserving such individuals are consideredto be ‘‘Native American controlled’’ forWIA section 166 purposes.

§ 668.210 What priority for designation isgiven to eligible organizations?

(a) Federally-recognized Indian tribes,Alaska Native entities, or consortia thatinclude a tribe or entity will have thehighest priority for designation. To bedesignated, the organizations must meetthe requirements in this subpart. Theseorganizations will be designated forthose geographic areas and/orpopulations over which they have legaljurisdiction. (WIA sec. 166(c)(1).)

(b) If we decide not to designateIndian tribes or Alaska Native entities toserve their service areas, we will enterinto arrangements to provide serviceswith entities which the tribes or AlaskaNative entities involved approve.

(c) In geographic areas not served byIndian tribes or Alaska Native entities,entities with a Native American-controlled governing body and whichare representative of the NativeAmerican community or communitiesinvolved will have priority fordesignation.



§ 668.220 What is meant by the ‘‘ability toadminister funds’’ for designationpurposes?

An organization has the ‘‘ability toadminister funds’’ if it:

(a) Is in compliance withDepartmental debt managementprocedures, if applicable;

(b) Has not been found guilty of fraudor criminal activity which would affectthe entity’s ability to safeguard Federalfunds or deliver program services;

(c) Can demonstrate that it has or canacquire the necessary program andfinancial management personnel tosafeguard Federal funds and effectivelydeliver program services; and

(d) Can demonstrate that it hassuccessfully carried out, or has thecapacity to successfully carry outactivities that will strengthen the abilityof the individuals served to obtain orretain unsubsidized employment.

§ 668.230 How will we determine anentity’s ‘‘ability to administer funds’’?

(a) Before determining which entity todesignate for a particular service area,we will conduct a review of the entity’sability to administer funds.

(b) The review for an entity that hasserved as a grantee in either of the twodesignation periods before the oneunder consideration, also will considerthe extent of compliance with the WIAregulations or the JTPA regulations at 20CFR part 632. Evidence of the ability toadminister funds may be established bya satisfactory Federal audit record. Itmay also be established by a recentrecord showing substantial compliancewith Federal record keeping, reporting,program performance standards, orsimilar standards imposed on granteesby this or other public sector supportedprograms.

(c) For other entities, the reviewincludes the experience of the entity’smanagement in administering funds forservices to Native American people.This review also includes an assessmentof the relationship between the entityand the Native American community orcommunities to be served.

§ 668.240 What is the process for applyingfor designation as an INA grantee?

(a) Every entity seeking designationmust submit a Notice of Intent (NOI)which complies with the requirementsof the Solicitation for Grant Application(SGA). An SGA will be issued every twoyears, covering all areas except for thosefor which competition is waived for theincumbent grantee under WIA section166(c)(2).

(b) NOI’s must be submitted to theChief of DINAP, bearing a U.S. PostalService postmark indicating its

submission no later than October 1st ofthe year which precedes the first year ofa new designation cycle (unless the SGAprovides a later date). For NOI’sreceived after October 1, only a timelyofficial U.S. Postal Service postmark isacceptable as proof of timelysubmission. Dates indicatingsubmission by private express deliveryservices or metered mail areunacceptable as proof of the timelysubmission of designation documents.

(c) NOI’s must include the following:(1) Documentation of the legal status

of the entity, as described in§ 668.200(a)(1);

(2) A Standard Form (SF) 424b;(3) The assurances required by 29 CFR

37.20;(4) A specific description, by State,

county, reservation or similar area, orservice population, of the geographicarea for which the entity requestsdesignation;

(5) A brief summary of theemployment and training or humanresource development programs servingNative Americans that the entitycurrently operates or has operatedwithin the previous two-year period;

(6) A description of the planningprocess used by the entity, including theinvolvement of the governing body andlocal employers;

(7) Evidence to establish an entity’sability to administer funds under§§ 668.220 through 668.230.

§ 668.250 What happens if two or moreentities apply for the same area?

(a) Every two years, unless there hasbeen a waiver of competition for thearea, we issue a Solicitation for GrantApplication (SGA) seeking applicantsfor INA program grants.

(b) If two or more entities apply forgrants for the same service area, or foroverlapping service areas, and a waiverof competition under WIA section166(c)(2) is not granted to theincumbent grantee, the followingadditional procedures apply:

(1) The Grant Officer will follow theregulations for priority designation at§ 668.210.

(2) If no applicant is entitled topriority designation, DINAP will informeach entity which submitted a NOI,including the incumbent grantee, inwriting, of all the competing Notices ofIntent no later than November 15 of theyear the NOI’s are received.

(3) Each entity will have anopportunity to describe its service plan,and may submit additional informationaddressing the requirements of§ 668.240(c) or such other informationas the applicant determines isappropriate. Revised Notices must be

received or contain an official U.S.Postal Service postmark, no later thanJanuary 5th (unless a later date isprovided in DINAP’s informationnotice).

(4) The Grant Officer selects the entitythat demonstrates the ability to producethe best outcomes for its customers.

§ 668.260 How are INA granteesdesignated?

(a) On March 1 of each designationyear, we designate or conditionallydesignate Native American grantees forthe coming two program years. TheGrant Officer informs, in writing, eachentity which submitted a Notice ofIntent that the entity has been:

(1) Designated;(2) Conditionally designated;(3) Designated for only a portion of its

requested area or population; or(4) Denied designation.(b) Designated Native American

entities must ensure and provideevidence to DOL that a system is inplace to afford all members of theeligible population within their servicearea an equitable opportunity to receiveemployment and training activities andservices.

§ 668.270 What appeal rights are availableto entities that are denied designation?

Any entity that is denied designationin whole or in part for the area orpopulation that it requested may appealthe denial to the Office of theAdministrative Law Judges using theprocedures at 20 CFR 667.800 or thealternative dispute resolutionprocedures at 20 CFR 667.840. TheGrant Officer will provide an entitywhose request for designation wasdenied, in whole or in part, with a copyof the appeal procedures.

§ 668.280 Are there any other ways inwhich an entity may be designated as anINA grantee?

Yes, for an area which wouldotherwise go unserved. The GrantOfficer may designate an entity, whichhas not submitted an NOI, but whichmeets the qualifications for designation,to serve the particular geographic area.Under such circumstances, DINAP willseek the views of Native Americanleaders in the area involved about thedecision to designate the entity to servethat community. DINAP will inform theGrant Officer of their views. The GrantOfficer will accommodate their views tothe extent possible.

§ 668.290 Can an INA grantee’sdesignation be terminated?

(a) Yes, the Grant Officer canterminate a grantee’s designation forcause, or the Secretary or another DOL



official confirmed by the Senate canterminate a grantee’s designation inemergency circumstances wheretermination is necessary to protect theintegrity of Federal funds or ensure theproper operation of the program. (WIAsec. 184(e).)

(b) The Grant Officer may terminate agrantee’s designation for cause only ifthere is a substantial or persistentviolation of the requirements in the Actor the WIA regulations. The granteemust be provided with written notice 60days before termination, stating thespecific reasons why termination isproposed. The appeal procedures at 20CFR 667.800 apply.

(c) The Secretary must give a granteeterminated in emergency circumstancesprompt notice of the termination and anopportunity for a hearing within 30 daysof the termination.

§ 668.292 How does a designated entitybecome an INA grantee?

A designated entity becomes a granteeon the effective date of an executedgrant agreement, signed by theauthorized official of the granteeorganization and the Grant Officer. Thegrant agreement includes a set ofcertifications and assurances that thegrantee will comply with the terms ofthe Act, the WIA regulations, and otherappropriate requirements. Funds arereleased to the grantee upon approval ofthe required planning documents, asdescribed in §§ 668.710 through668.740.

§ 668.294 Do we have to designate an INAgrantee for every part of the country?

No, beginning with the PY 2000 grantawards, if there are no entities meetingthe requirements for designation in aparticular area, or willing to serve thatarea, we will not allocate funds for thatservice area. The funds allocated to thatarea will be distributed to the remainingINA grantees, or used for other programpurposes such as technical assistanceand training (TAT). Unawarded fundsused for technical assistance andtraining are in addition to, and notsubject to the limitations on, amountsreserved under § 668.296(e). Areaswhich are unserved by the INA programmay be restored during a subsequentdesignation cycle, when and if a currentgrantee or other eligible entity appliesfor and is designated to serve that area.

§ 668.296 How are WIA funds allocated toINA grantees?

(a) Except for reserved fundsdescribed in paragraph (e) of thissection and funds used for programpurposes under § 668.294, all fundsavailable for WIA section 166(d)(2)(A)(i)comprehensive workforce investment

services program at the beginning of aProgram Year will be allocated to NativeAmerican grantees for their designatedgeographic service areas.

(b) Each INA grantee will receive thesum of the funds calculated under thefollowing formula:

(1) One-quarter of the funds availablewill be allocated on the basis of thenumber of unemployed NativeAmerican persons in the grantee’sdesignated INA service area(s)compared to all such persons in all suchareas in the United States.

(2) Three-quarters of the fundsavailable will be allocated on the basisof the number of Native Americanpersons in poverty in the grantee’sdesignated INA service area(s) ascompared to all such persons in all suchareas in the United States.

(3) The data and definitions used toimplement these formulas is providedby the U.S. Bureau of the Census.

(c) In years immediately following theuse of new data in the formuladescribed in paragraph (b) of thissection, based upon criteria to bedescribed in the SGA, we may utilize ahold harmless factor to reduce thedisruption in grantee services whichwould otherwise result from changes infunding levels. This factor will bedetermined in consultation with thegrantee community and the NativeAmerican Employment and TrainingCouncil.

(d) We may reallocate funds from oneINA grantee to another if a grantee isunable to serve its area for any reason,such as audit or debt problems, criminalactivity, internal (political) strife, or lackof ability or interest. Funds may also bereallocated if a grantee has carry-inexcess of 20 percent of the total fundsavailable to it. Carry-in amounts greaterthan 20 percent but less than 25 percentof total funds available may be allowedunder an approved waiver issued byDINAP.

(e) We may reserve up to one percent(1 percent) of the funds appropriatedunder WIA section 166(d)(2)(A)(i) forany Program Year for TAT purposes.Technical assistance will be provided inconsultation with the Native AmericanEmployment and Training Council.

Subpart C—Services to Customers

§ 668.300 Who is eligible to receiveservices under the INA program?

(a) A person is eligible to receiveservices under the INA program if thatperson is:

(1) An Indian, as determined by apolicy of the Native American grantee.The grantee’s definition must at leastinclude anyone who is a member of aFederally-recognized tribe; or

(2) An Alaska Native, as defined insection 3(b) of the Alaska Native ClaimsSettlement Act (ANCSA), 43 U.S.C.1602(b); or

(3) A Native Hawaiian, as defined inWIA section 166(b)(3).

(b) The person must also be any oneof the following:

(1) Unemployed; or(2) Underemployed, as defined in

§ 668.150; or(3) A low-income individual, as

defined in WIA section 101(25); or(4) The recipient of a bona fide lay-

off notice which has taken effect in thelast six months or will take effect in thefollowing six month period, who isunlikely to return to a previous industryor occupation, and who is in need ofretraining for either employment withanother employer or for job retentionwith the current employer; or

(5) An individual who is employed,but is determined by the grantee to bein need of employment and trainingservices to obtain or retain employmentthat allows for self-sufficiency.

(c) If applicable, male applicants mustalso register or be registered for theSelective Service.

(d) For purposes of determiningwhether a person is a low-incomeindividual under paragraph (b)(3) of thissection, we will issue guidance for thedetermination of family income. (WIAsec. 189(h).)

§ 668.340 What are INA grantee allowableactivities?

(a) The INA grantee may provide anyservices consistent with the purposes ofthis section that are necessary to meetthe needs of Native Americanspreparing to enter, reenter, or retainunsubsidized employment. (WIA sec.166(d)(1)(B).) Comprehensive workforceinvestment activities authorized underWIA section 166(d)(2) include:

(b) Core services, which must bedelivered in partnership with the One-Stop delivery system, include:

(1) Outreach;(2) Intake;(3) Orientation to services available;(4) Initial assessment of skill levels,

aptitudes, abilities and supportiveservice needs;

(5) Eligibility certification;(6) Job Search and placement

assistance;(7) Career counseling;(8) Provision of employment statistics

information and local, regional, andnational Labor Market Information;

(9) Provision of information aboutfiling of Unemployment Insuranceclaims;

(10) Assistance in establishingeligibility for Welfare-to-Workprograms;



(11) Assistance in establishingeligibility for financial assistance fortraining;

(12) Provision of information aboutsupportive services;

(13) Provision of performance andcost information relating to trainingproviders and training services; and

(14) Follow-up services.(c) Allowable intensive services

which include:(1) Comprehensive and specialized

testing and assessment;(2) Development of an individual

employment plan;(3) Group counseling;(4) Individual counseling and career

planning;(5) Case Management for seeking

training services;(6) Short term pre-vocational services;(7) Work experience in the public or

private sector;(8) Tryout employment;(9) Dropout prevention activities;(10) Supportive services; and(11) Other services identified in the

approved Two Year Plan.(d) Allowable training services which

include:(1) Occupational skill training;(2) On-the-job training;(3) Programs that combine workplace

training with related instruction, whichmay include cooperative educationprograms;

(4) Training programs operated by theprivate sector;

(5) Skill upgrading and retraining;(6) Entrepreneurial and small

business development technicalassistance and training;

(7) Job readiness training;(8) Adult basic education, GED

attainment, literacy training, andEnglish language training, providedalone or in combination with training orintensive services described paragraphs(c)(1) through (11) and (d)(1) through(10) of this section;

(9) Customized training conductedwith a commitment by an employer orgroup of employers to employ anindividual upon successful completionof training; and

(10) Educational and tuitionassistance.

(e) Allowable activities specificallydesigned for youth are identified insection 129 of the Act and include:

(1) Improving educational and skillcompetencies;

(2) Adult mentoring;(3) Training opportunities;(4) Supportive services, as defined in

WIA section 101(46);(5) Incentive programs for recognition

and achievement;(6) Opportunities for leadership

development, decision-making,citizenship and community service;

(7) Preparation for postsecondaryeducation, academic and occupationallearning, unsubsidized employmentopportunities, and other effectiveconnections to intermediaries withstrong links to the job market and localand regional employers;

(8) Tutoring, study skills training, andother drop-out prevention strategies;

(9) Alternative secondary schoolservices;

(10) Summer employmentopportunities that are directly linked toacademic and occupational learning;

(11) Paid and unpaid workexperiences, including internships andjob shadowing;

(12) Occupational skill training;(13) Leadership development

opportunities, as defined in 20 CFR664.420;

(14) Follow-up services, as defined in20 CFR 664.450;

(15) Comprehensive guidance andcounseling, which may include drugand alcohol abuse counseling andreferral; and

(16) Information and referral.(f) In addition, allowable activities

include job development andemployment outreach, including:

(1) Support of the Tribal EmploymentRights Office (TERO) program;

(2) Negotiation with employers toencourage them to train and hireparticipants;

(3) Establishment of linkages withother service providers to aid programparticipants;

(4) Establishment of managementtraining programs to support tribaladministration or enterprises; and

(5) Establishment of linkages withremedial education, such as Adult BasicEducation (ABE), basic literacy training,and English-as-a-second-language (ESL)training programs, as necessary.

(g) Participants may be enrolled inmore than one activity at a time andmay be sequentially enrolled inmultiple activities.

(h) INA grantees may provide anyservices which may be carried out byfund recipients under any provisions ofthe Act. (WIA sec. 166(d).)

(i) In addition, INA grantees mustdevelop programs which contribute tooccupational development, upwardmobility, development of new careers,and opportunities for nontraditionalemployment. (WIA sec. 195(1).)

§ 668.350 Are there any restrictions onallowable activities?

(a) All occupational training must befor occupations for which there areemployment opportunities in the localarea or another area to which theparticipant is willing to relocate. (WIAsec. 134(d)(4)(A)(iii).)

(b) INA grantees must provide OJTservices consistent with the definitionprovided in WIA section 101(31) andother limitations in the Act. Individualsin OJT must:

(1) Be compensated at the same rates,including periodic increases, as traineesor employees who are similarly situatedin similar occupations by the sameemployer and who have similartraining, experience, and skills (WIAsec. 181(a)(1)); and

(2) Be provided benefits and workingconditions at the same level and to thesame extent as other trainees oremployees working a similar length oftime and doing the same type of work.(WIA sec. 181(b)(5).)

(c) In addition, OJT contracts underthis title must not be entered into withemployers who have:

(1) Received payments under previouscontracts and have exhibited a patternof failing to provide OJT participantswith continued, long-term employmentas regular employees with wages andemployment benefits and workingconditions at the same level and to thesame extent as other employees workinga similar length of time and doing thesame work; or

(2) Who have violated paragraphs(b)(1) and/or (2) of this section. (WIAsec. 195(4).)

(d) INA grantees are prohibited fromusing funds to encourage the relocationof a business, as described in WIAsection 181(d) and 20 CFR 667.268.

(e) INA grantees must only use WIAfunds for activities which are inaddition to those that would otherwisebe available to the Native Americanpopulation in the area in the absence ofsuch funds. (WIA sec. 195(2).)

(f) INA grantees must not spend fundson activities that displace currentlyemployed individuals, impair existingcontracts for services, or in any wayaffect union organizing.

(g) Under 20 CFR 667.266, sectarianactivities involving WIA financialassistance or participants are limited inaccordance with the provisions of 29CFR 37.6(f). (WIA sec. 181(b).)

§ 668.360 What is the role of INA granteesin the One-Stop system?

(a) In those local workforceinvestment areas where an INA granteeconducts field operations or providessubstantial services, the INA grantee isa required partner in the local One-Stopdelivery system and is subject to theprovisions relating to such partnersdescribed in 20 CFR part 662.Consistent with those provisions, aMemorandum of Understanding (MOU)between the INA grantee and the LocalBoard over the operation of the One-



Stop Center(s) in the Local Board’sworkforce investment area also must beexecuted. Where the Local Board is analternative entity under 20 CFR 661.330,the INA grantee must negotiate with thealternative entity on the terms of itsMOU and the scope of its on-going rolein the local workforce investmentsystem, as specified in 20 CFR661.310(b)(2). In local areas with a largeconcentration of potentially eligible INAparticipants, which are in an INAgrantee’s service area but in which thegrantee does not conduct operations orprovide substantial services, the INAgrantee should encourage suchindividuals to participate in the One-Stop system in that area in order toreceive WIA services.

(b) At a minimum, the MOU mustcontain provisions related to:

(1) The services to be providedthrough the One-Stop Service System;

(2) The methods for referral ofindividuals between the One-Stopoperator and the INA grantee which takeinto account the services provided bythe INA grantee and the other One-Stoppartners;

(3) The exchange of information onthe services available and accessiblethrough the One-Stop system and theINA program;

(4) As necessary to provide referralsand case management services, theexchange of information on NativeAmerican participants in the One-Stopsystem and the INA program;

(5) Arrangements for the funding ofservices provided by the One-Stop(s),consistent with the requirements at 20CFR 662.280 that no expenditures maybe made with INA program funds forindividuals who are not eligible or forservices not authorized under this part.

(c) The INA grantee’s Two Year Planmust describe the efforts the grantee hasmade to negotiate MOU’s consistentwith paragraph (b) of this section, foreach planning cycle during which LocalBoards are operating under the terms ofWIA.

§ 668.370 What policies govern paymentsto participants, including wages, trainingallowances or stipends, or direct paymentsfor supportive services?

(a) INA grantees may pay trainingallowances or stipends to participantsfor their successful participation in andcompletion of education or trainingservices (except such allowance may notbe provided to participants in OJT).Allowances or stipends may not exceedthe Federal or State minimum wage,whichever is higher.

(b) INA grantees may not pay aparticipant in a training activity whenthe person fails to participate withoutgood cause.

(c) If a participant in a WIA-fundedactivity, including participants in OJT,is involved in an employer-employeerelationship, that participant must bepaid wages and fringe benefits at thesame rates as trainees or employees whohave similar training, experience andskills and which are not less than thehigher of the applicable Federal, State orlocal minimum wage. (WIA sec.181(a)(1).)

(d) In accordance with the policydescribed in the two-year plan, INAgrantees may pay incentive bonuses toparticipants who meet or exceedindividual employability or traininggoals established in writing in theindividual employment plan.

(e) INA grantees must comply withother restrictions listed in WIA sections181 through 199, which apply to allprograms funded under title I of WIA.

(f) INA grantees must comply with theprovisions on labor standards in WIAsection 181(b).

§ 668.380 What will we do to strengthenthe capacity of INA grantees to delivereffective services?

We will provide appropriate TAT, asnecessary, to INA grantees. This TATwill assist INA grantees to improveprogram performance and enhanceservices to the target population(s), asresources permit. (WIA sec. 166(h)(5).)

Subpart D—Supplemental YouthServices

§ 668.400 What is the purpose of thesupplemental youth services program?

The purpose of this program is toprovide supplemental employment andtraining and related services to NativeAmerican youth on or near Indianreservations, or in Oklahoma, Alaska,and Hawaii. (WIA sec. 166(d)(2)(A)(ii).)

§ 668.410 What entities are eligible toreceive supplemental youth servicesfunding?

Eligible recipients for supplementalyouth services funding are limited tothose tribal, Alaska Native, NativeHawaiian and Oklahoma tribal granteesfunded under WIA section166(d)(2)(A)(i), or other grantees servingthose areas and/or populations specifiedin § 668.400, that received fundingunder title II–B of the Job TrainingPartnership Act, or that are designatedto serve an eligible area as specified inWIA section 166(d)(2)(A)(ii).

§ 668.420 What are the planningrequirements for receiving supplementalyouth services funding?

Beginning with PY 2000, eligible INAgrantees must describe thesupplemental youth services which they

intend to provide in their Two YearPlan (described more fully in §§ 668.710and 668.720). This Plan includes thetarget population the grantee intends toserve, for example, drop-outs, juvenileoffenders, and/or college students. Italso includes the performancemeasures/standards to be utilized tomeasure program progress.

§ 668.430 What individuals are eligible toreceive supplemental youth services?

(a) Participants in supplemental youthservices activities must be NativeAmericans, as determined by the INAgrantee according to § 668.300(a), andmust meet the definition of EligibleYouth, as defined in WIA section101(13).

(b)Youth participants must be low-income individuals, except that notmore than five percent (5%) who do notmeet the minimum income criteria, maybe considered eligible youth if theymeet one or more of the followingcategories:

(1) School dropouts;(2) Basic skills deficient as defined in

WIA section 101(4);(3) Have educational attainment that

is one or more grade levels below thegrade level appropriate to their agegroup;

(4) Pregnant or parenting;(5) Have disabilities, including

learning disabilities;(6) Homeless or runaway youth;(7) Offenders; or(8) Other eligible youth who face

serious barriers to employment asidentified by the grantee in its Plan.(WIA sec. 129(c)(5).)

§ 668.440 How is funding for supplementalyouth services determined?

(a) Beginning with PY 2000,supplemental youth funding will beallocated to eligible INA grantees on thebasis of the relative number of NativeAmerican youth between the ages of 14and 21, inclusive, in the grantee’sdesignated INA service area ascompared to the number of NativeAmerican youth in other eligible INAservice areas. We reserve the right toredetermine this youth funding streamin future program years, in consultationwith the Native American Employmentand Training Council, as programexperience warrants and as appropriatedata become available.

(b) The data used to implement thisformula is provided by the U.S. Bureauof the Census.

(c) The hold harmless factor describedin § 668.296(c) also applies tosupplemental youth services funding.This factor also will be determined inconsultation with the grantee



community and the Native AmericanEmployment and Training Council.

(d) The reallocation provisions of§ 668.296(d) also apply to supplementalyouth services funding.

(e) Any supplemental youth servicesfunds not allotted to a grantee or refusedby a grantee may be used for thepurposes outlined in § 668.296(e), asdescribed in § 668.294. Any such fundsare in addition to, and not subject to thelimitations on, amounts reserved under§ 668.296(e).

§ 668.450 How will supplemental youthservices be provided?

(a) INA grantees may offersupplemental services to youththroughout the school year, during thesummer vacation, and/or during otherbreaks during the school year at theirdiscretion;

(b) We encourage INA grantees towork with Local Educational Agenciesto provide academic credit for youthactivities whenever possible;

(c) INA grantees may provideparticipating youth with the activitieslisted in 20 CFR 668.340(e).

§ 668.460 Are there performance measuresand standards applicable to thesupplemental youth services program?

Yes, WIA section 166(e)(5) requiresthat the program plan contain adescription of the performancemeasures to be used to assess theperformance of grantees in carrying outthe activities assisted under this section.We will develop specific indicators ofperformance and levels of performancefor supplemental youth servicesactivities in partnership with the NativeAmerican Employment and TrainingCouncil, and will transmit them to INAgrantees as an administrative issuance.


§ 668.500 What services may INA granteesprovide to or for employers under section166?

(a) INA grantees may provide a varietyof services to employers in their areas.These services may include:

(1) Workforce planning whichinvolves the recruitment of current orpotential program participants,including job restructuring services;

(2) Recruitment and assessment ofpotential employees, with priority givento potential employees who are or whomight become eligible for programservices;

(3) Pre-employment training;(4) Customized training;(5) On-the-Job training (OJT);(6) Post-employment services,

including training and support servicesto encourage job retention andupgrading;

(7) Work experience for public orprivate sector work sites;

(8) Other innovative forms of worksitetraining.

(b) In addition to the services listed inparagraph (a) of this section, othergrantee-determined services (asdescribed in the grantee’s Two YearPlan) which are intended to assisteligible participants to obtain or retainemployment may also be provided to orfor employers.

§ 668.510 What services may INA granteesprovide to the community at large undersection 166?

(a) INA grantees may provide servicesto the Native American communities intheir designated service areas byengaging in program development andservice delivery activities which:

(1) Strengthen the capacity of NativeAmerican-controlled institutions toprovide education and work-basedlearning services to Native Americanyouth and adults, whether directly orthrough other Native Americaninstitutions such as tribal colleges;

(2) Increase the community’s capacityto deliver supportive services, such aschild care, transportation, housing,health, and similar services needed byclients to obtain and retain employment;

(3) Use program participants engagedin education, training, work experience,or similar activities to further theeconomic and social development ofNative American communities inaccordance with the goals and values ofthose communities; and

(4) Engage in other community-building activities described in the INAgrantee’s Two Year Plan.

(b) INA grantees should develop theirTwo Year Plan in conjunction with, andin support of, strategic tribal planningand community development goals.

§ 668.520 Must INA grantees givepreference to Indian/Native Americanentities in the selection of contractors orservice providers?

Yes, INA grantees must give as muchpreference as possible to Indianorganizations and to Indian-ownedeconomic enterprises, as defined insection 3 of the Indian Financing Act of1974 (25 U.S.C. 1452), when awardingany contract or subgrant.

§ 668.530 What rules govern the issuanceof contracts and/or subgrants?

In general, INA grantees must followthe rules of OMB Circulars A–102 (fortribes) or A–110 (for private non-profits)when awarding contracts and/orsubgrants under WIA section 166. Thecommon rules implementing thosecirculars are codified for DOL-fundedprograms at 29 CFR part 97 (A–102) or

29 CFR part 95 (A–110), and covered inthe WIA regulations at 20 CFR 667.200.These rules do not apply to OJT contractawards.

Subpart F—Accountability for Servicesand Expenditures

§ 668.600 To whom is the INA granteeaccountable for the provision of servicesand the expenditure of INA funds?

(a) The INA grantee is responsible tothe Native American community to beserved by INA funds.

(b) The INA grantee is alsoresponsible to the Department of Labor,which is charged by law with ensuringthat all WIA funds are expended:

(1) According to applicable laws andregulations;

(2) For the benefit of the identifiedNative American client group; and

(3) For the purposes approved in thegrantee’s plan and signed grantdocument.

§ 668.610 How is this accountabilitydocumented and fulfilled?

(a) Each INA grantee must establishits own internal policies and proceduresto ensure accountability to the INAgrantee’s governing body, as therepresentative of the Native Americancommunity(ies) served by the INAprogram. At a minimum, these policiesand procedures must provide a systemfor governing body review and oversightof program plans and measures andstandards for program performance.

(b) Accountability to the Departmentis accomplished in part through on-siteprogram reviews (monitoring), whichstrengthen the INA grantee’s capabilityto deliver effective services and protectthe integrity of Federal funds.

(c) In addition to audit information, asdescribed at § 668.850 and programreviews, accountability to theDepartment is documented and fulfilledby the submission of reports. For thepurposes of report submission, apostmark or date indicating receipt by aprivate express delivery service isacceptable proof of timely submission.These report requirements are asfollows:

(1) Each INA grantee must submit anannual report on program participantsand activities. This report must bereceived no later than 90 days after theend of the Program Year, and may becombined with the report on programexpenditures. The reporting format isdeveloped by DINAP, in consultationwith the Native American AdvisoryCouncil, and published in the FederalRegister.

(2) Each INA grantee must submit anannual report on program expenditures.This report must be received no later



than 90 days after the end of theProgram Year, and may be combinedwith the report on program participantsand activities.

(3) INA grantees are encouraged, butnot required, to submit a descriptivenarrative with their annual reportsdescribing the barriers to successfulplan implementation they haveencountered. This narrative should alsodiscuss program successes and othernotable occurrences that effected theINA grantee’s overall performance thatyear.

(4) Each INA grantee may be requiredto submit interim reports on programparticipants and activities and/orprogram expenditures during theProgram Year. Interim reports must bereceived no later than 45 days after theend of the reporting period.

§ 668.620 What performance measures arein place for the INA program?

Indicators of performance measuresand levels of performance in use for INAprogram will be those indicators andstandards proposed in individualgrantee plans and approved by us, inaccordance with guidelines we willdevelop in consultation with INAgrantees under WIA section166(h)(2)(A).

§ 668.630 What are the requirements forpreventing fraud and abuse under section166?

(a) Each INA grantee must implementprogram and financial managementprocedures to prevent fraud and abuse.Such procedures must include a processwhich enables the grantee to take actionagainst contractors or subgrantees toprevent any misuse of funds. (WIA sec.184.)

(b) Each INA grantee must have rulesto prevent conflict of interest by itsgoverning body. These conflict ofinterest rules must include a ruleprohibiting any member of anygoverning body or council associatedwith the INA grantee from voting on anymatter which would provide a directfinancial benefit to that member, or toa member of his or her immediatefamily, in accordance with 20 CFR667.200(a)(4) and 29 CFR 97.36(b) or 29CFR 95.42.

(c) Officers or agents of the INAgrantee must not solicit or personallyaccept gratuities, favors, or anything ofmonetary value from any actual orpotential contractor, subgrantee, vendoror participant. This rule must also applyto officers or agents of the grantee’scontractors and/or subgrantees. Thisprohibition does not apply to:

(1) Any rebate, discount or similarincentive provided by a vendor to its

customers as a regular feature of itsbusiness;

(2) Items of nominal monetary valuedistributed consistent with the culturalpractices of the Native Americancommunity served by the grantee.

(d) No person who selects programparticipants or authorizes the servicesprovided to them may select orauthorize services to any participantwho is such a person’s husband, wife,father, mother, brother, sister, son, ordaughter unless:

(1)(i) The participant involved is alow income individual; or

(ii) The community in which theparticipant resides has a population ofless than 1,000 Native American people;and

(2) The INA grantee has adopted andimplemented the policy described in theTwo Year Plan to prevent favoritism onbehalf of such relatives.

(e) INA grantees are subject to theprovisions of 41 U.S.C. 53 relating tokickbacks.

(f) No assistance provided under thisAct may involve political activities.(WIA sec. 195(6).)

(g) INA grantees may not use fundsunder this Act for lobbying, as providedin 29 CFR part 93.

(h) The provisions of 18 U.S.C. 665and 666 prohibiting embezzlementapply to programs under WIA.

(i) Recipients of financial assistanceunder WIA section 168 are prohibitedfrom discriminatory practices asoutlined at WIA section 188, and theregulations implementing WIA section188, at 29 CFR part 37. However, thisdoes not affect the legal requirementthat all INA participants be NativeAmerican. Also, INA grantees are notobligated to serve populations otherthan those for which they weredesignated.

§ 668.640 What grievance systems must asection 166 program provide?

INA grantees must establish grievanceprocedures consistent with therequirements of WIA section 181(c) and20 CFR 667.600.

§ 668.650 Can INA grantees excludesegments of the eligible population?

(a) No, INA grantees cannot excludesegments of the eligible population. INAgrantees must document in their TwoYear Plan that a system is in place toafford all members of the eligiblepopulation within the service area forwhich the grantee was designated anequitable opportunity to receive WIAservices and activities.

(b) Nothing in this section restricts theability of INA grantees to targetsubgroups of the eligible population (for

example, the disabled, substanceabusers, TANF recipients, or similarcategories), as outlined in an approvedTwo Year Plan. However, it is unlawfulto target services to subgroups ongrounds prohibited by WIA section 188and 29 CFR part 37, including tribalaffilitation (which is considerednational origin). Outreach efforts, on theother hand, may be targeted to anysubgroups.

Subpart G—Section 166 Planning/Funding Process

§ 668.700 What process must an INAgrantee use to plan its employment andtraining services?

(a) An INA grantee may utilize theplanning procedures it uses to planother activities and services.

(b) However, in the process ofpreparing its Two Year Plan for NativeAmerican WIA services, the INA granteemust consult with:

(1) Customers or prospectivecustomers of such services;

(2) Prospective employers of programparticipants or their representatives;

(3) Service providers, including localeducational agencies, which canprovide services which support or arecomplementary to the grantee’s ownservices; and

(4) Tribal or other community officialsresponsible for the development andadministration of strategic communitydevelopment efforts.

§ 668.710 What planning documents mustan INA grantee submit?

Each grantee receiving funds underWIA section 166 must submit to DINAPa comprehensive services plan and aprojection of participant services andexpenditures covering the two-yearplanning cycle. We will, in consultationwith the Native American AdvisoryCouncil, issue budget and planninginstructions which grantees must usewhen preparing their plan.

§ 668.720 What information must theseplanning documents contain?

(a) The comprehensive services planmust cover the two Program Yearsincluded within a designation cycle.According to planning instructionsissued by the Department, thecomprehensive services plan mustdescribe in narrative form:

(1) The specific goals of the INAgrantee’s program for the two ProgramYears involved;

(2) The method the INA grantee willuse to target its services to specificsegments of its service population;

(3) The array of services which theINA grantee intends to make available;



(4) The system the INA grantee willuse to be accountable for the results ofits program services. Such results mustbe judged in terms of the outcomes forindividual participants and/or thebenefits the program provides to theNative American community(ies) whichthe INA grantee serves. Plans mustinclude the performance informationrequired by § 668.620;

(5) The ways in which the INAgrantee will seek to integrate orcoordinate and ensure nonduplicationof its employment and training serviceswith:

(i) The One-Stop delivery system inits local workforce investment area,including a description of any MOU’swhich affect the grantee’s participation;

(ii) Other services provided by LocalWorkforce Investment Boards;

(iii) Other program operators;(iv) Other services available within

the grantee organization; and(v) Other services which are available

to Native Americans in the community,including planned participation in theOne-Stop system.

(b) Eligible INA grantees must includein their plan narratives a description ofactivities planned under thesupplemental youth program, includingitems described in paragraphs (a)(1)through (5) of this section.

(c) INA grantees must be prepared tojustify the amount of proposedAdministrative Costs, utilizing thedefinition at 20 CFR 667.220.

(d) INA grantees’ plans must containa projection of participant services andexpenditures for each Program Year,consistent with guidance issued by theDepartment.

§ 668.730 When must these plans besubmitted?

(a) The two-year plans are due at adate specified by DINAP in the year inwhich the two-year designation cyclebegins. We will announce exactsubmission dates in the biennialplanning instructions.

(b) Plans from INA grantees who areeligible for supplemental youth servicesfunds must include their supplementalyouth plans as part of their regular TwoYear Plan.

(c) INA grantees must submitmodifications for the second yearreflecting exact funding amounts, afterthe individual allotments have beendetermined. We will announce the timefor their submission, which will be nolater than June 1 prior to the beginningof the second year of the designationcycle.

§ 668.740 How will we review and approvesuch plans?

(a) We will approve a grantee’splanning documents before the date onwhich funds for the program becomeavailable unless:

(1) The planning documents do notcontain the information specified in theregulations in this part andDepartmental planning guidance; or

(2) The services which the INAgrantee proposes are not permittedunder WIA or applicable regulations.

(b) We may approve a portion of theplan, and disapprove other portions.The grantee also has the right to appealthe decision to the Office of theAdministrative Law Judges under theprocedures at 20 CFR 667.800 or667.840. While the INA granteeexercises its right to appeal, the granteemust implement the approved portionsof the plan.

(c) If we disapprove all or part of anINA grantee’s plan, and that disapprovalis sustained in the appeal process, theINA grantee will be given theopportunity to amend its plan so that itcan be approved.

(d) If an INA grantee’s plan isamended but is still disapproved, thegrantee will have the right to appeal thedecision to the Offices of theAdministrative Law Judges under theprocedures at 20 CFR 667.800 or667.840.

§ 668.750 Under what circumstances canwe or the INA grantee modify the terms ofthe grantee’s plan(s)?

(a) We may unilaterally modify theINA grantee’s plan to add funds or, ifrequired by Congressional action, toreduce the amount of funds available forexpenditure.

(b) The INA grantee may requestapproval to modify its plan to add,expand, delete, or diminish any serviceallowable under the regulations in thispart. The INA grantee may modify itsplan without our approval, unless themodification reduces the total numberof participants to be served annuallyunder the grantee’s program by anumber which exceeds 25 percent of theparticipants previously proposed to beserved, or by 25 participants, whicheveris larger.

(c) We will act upon any modificationwithin thirty (30) calendar days ofreceipt of the proposed modification. Inthe event that further clarification ormodification is required, we may extendthe thirty (30) day time frame toconclude appropriate negotiations.

Subpart H—AdministrativeRequirements

§ 668.800 What systems must an INAgrantee have in place to administer an INAprogram?

(a) Each INA grantee must have awritten system describing theprocedures the grantee uses for:

(1) The hiring and management ofpersonnel paid with program funds;

(2) The acquisition and managementof property purchased with programfunds;

(3) Financial management practices;(4) A participant grievance system

which meets the requirements in section181(c) of WIA and 20 CFR 667.600; and

(5) A participant records system.(b) Participant records systems must

include:(1) A written or computerized record

containing all the information used todetermine the person’s eligibility toreceive program services;

(2) The participant’s signaturecertifying that all the eligibilityinformation he or she provided is trueto the best of his/her knowledge; and

(3) The information necessary tocomply with all program reportingrequirements.

§ 668.810 What types of costs areallowable expenditures under the INAprogram?

Rules relating to allowable costsunder WIA are covered in 20 CFR667.200 through 667.220.

§ 668.820 What rules apply toadministrative costs under the INAprogram?

The definition and treatment ofadministrative costs are covered in 20CFR 667.210(b) and 667.220.

§ 668.825 Does the WIA administrativecost limit for States and local areas applyto section 166 grants?

No, under 20 CFR 667.210(b), limitson administrative costs for section 166grants will be negotiated with thegrantee and identified in the grantaward document.

§ 668.830 How should INA programgrantees classify costs?

Cost classification is covered in theWIA regulations at 20 CFR 667.200through 667.220. For purposes of theINA program, program costs alsoinclude costs associated with otheractivities such as Tribal EmploymentRights Office (TERO), and supportiveservices, as defined in WIA section101(46).

§ 668.840 What cost principles apply toINA funds?

The cost principles described in OMBCirculars A–87 (for tribal governments),



A–122 (for private non-profits), and A–21 (for educational institutions), and theregulations at 20 CFR 667.200(c), applyto INA grantees, depending on thenature of the grantee organization.

§ 668.850 What audit requirements applyto INA grants?

The audit requirements establishedunder the Department’s regulations at29 CFR part 99, which implement OMBCircular A–133, apply to all NativeAmerican WIA grants. Theseregulations, for all of WIA title I, arecited at 20 CFR 667.200(b). Auditresolution procedures are covered at 20CFR 667.500 and 667.510.

§ 668.860 What cash managementprocedures apply to INA grant funds?

INA grantees must draw down fundsonly as they actually need them. TheU.S. Department of Treasury regulationswhich implement the Cash ManagementImprovement Act, found at 31 CFR part205, apply by law to most recipients ofFederal funds. Special rules may applyto those grantees required to keep theirfunds in interest-bearing accounts, andto grantees participating in thedemonstration under Public Law 102–477.

§ 668.870 What is ‘‘program income’’ andhow is it regulated in the INA program?

(a) Program income is defined andregulated by WIA section 195(7), 20 CFR667.200(a)(5) and the applicable rules in29 CFR parts 95 and 97.

(b) For grants made under this part,program income does not includeincome generated by the work of a workexperience participant in an enterprise,including an enterprise owned by anIndian tribe or Alaska Native entity,whether in the public or private sector.

(c) Program income does not includeincome generated by the work of an OJTparticipant in an establishment underparagraph (b) of this section.

Subpart I—Miscellaneous ProgramProvisions

§ 668.900 Does WIA provide regulatoryand/or statutory waiver authority?

Yes, WIA section 166(h)(3) permitswaivers of any statutory or regulatoryrequirement imposed upon INAgrantees (except for the areas cited in§ 668.920). Such waivers may includethose necessary to facilitate WIAsupport of long term communitydevelopment goals.

§ 668.910 What information is required todocument a requested waiver?

To request a waiver, an INA granteemust submit a plan indicating how thewaiver will improve the grantee’s WIA

program activities. We will providefurther guidance on the waiver process,consistent with the provisions of WIAsection 166(h)(3).

§ 668.920 What provisions of law orregulations may not be waived?

Requirements relating to:(a) Wage and labor standards;(b) Worker rights;(c) Participation and protection of

workers and participants;(d) Grievance procedures;(e) Judicial review; and(f) Non-discrimination may not be

waived. (WIA sec. 166(h)(3)(A).)

§ 668.930 May INA grantees combine orconsolidate their employment and trainingfunds?

Yes, INA grantees may consolidatetheir employment and training fundsunder WIA with assistance receivedfrom related programs in accordancewith the provisions of the IndianEmployment, Training and RelatedServices Demonstration Act of 1992(Public Law 102–477) (25 U.S.C. 3401 etseq.). Also, Federally-recognized tribesthat administer INA funds and fundsprovided by more than one State underother sections of WIA title I may enterinto an agreement with the Governors totransfer the State funds to the INAprogram. (WIA sec. 166(f) and (h)(6).)

§ 668.940 What is the role of the NativeAmerican Employment and TrainingCouncil?

The Native American Employmentand Training Council is a bodycomposed of representatives of thegrantee community which advises theSecretary on all aspects of NativeAmerican employment and trainingprogram implementation. WIA section166(h)(4) continues the Councilessentially as it is currently constituted,with the exception that all the Councilmembers no longer have to be NativeAmerican. However, the nature of theconsultative process remains essentiallyunchanged. We continue to support theCouncil.

PART 669—NATIONALFARMWORKERS JOBS PROGRAMUNDER TITLE I OF THE WORKFORCEINVESTMENT ACT

Subpart A—Purpose and Definitions

Sec.669.100 What is the purpose of the National

Farmworker Jobs Program (NFJP) and theother services and activities establishedunder WIA section 167?

669.110 What definitions apply to thisprogram?

669.120 How do we administer the NFJPprogram?

669.130 What unit within the Departmentadministers the National FarmworkerJobs Program funded under WIA section167?

669.140 How does the Division of Seasonaland Farmworker Programs (DSFP) assistthe MSFW grantee organizations to servefarmworker customers?

669.150 How are regulations established forthis program?

669.160 How do we consult with NFJPorganizations in developing rules,regulations and standards ofaccountability, and other policyguidance for the NFJP?

669.170 What WIA regulations apply to theprograms funded under WIA section167?

Subpart B—The Service Delivery System forthe National Farmworker Jobs Program

669.200 Who is eligible to receive an NFJPgrant?

669.210 How does an eligible entity becomean NFJP grantee?

669.220 What is the role of the NFJP granteein the One-Stop delivery system?

669.230 Can an NFJP grantee’s designationbe terminated?

669.240 How will we use fundsappropriated under WIA section 167 forthe NFJP?

Subpart C—The National Farmworker JobsProgram Customers and Available ProgramServices

669.300 What are the generalresponsibilities of the NFJP grantees?

669.310 What are the basic components ofan NFJP service delivery strategy?

669.320 Who is eligible to receive servicesunder the NFJP?

669.330 How are services delivered to thecustomer?

669.340 What core services are available toeligible MSFW’s?

669.350 How are core services delivered toMSFW’s?

669.360 May grantees provide emergencyassistance to MSFW’s?

669.370 What intensive services may beprovided to eligible MSFW’s?

669.380 What is the objective assessmentthat is authorized as an intensiveservice?

669.400 What are the elements of theIndividual Employment Plan that isauthorized as an intensive service?

669.410 What training services may beprovided to eligible MSFW’s?

669.420 What must be included in an on-the-job training contract?

669.430 What Related Assistance servicesmay be provided to eligiblefarmworkers?

669.440 When may farmworkers receiverelated assistance?

Subpart D—Performance Accountability,Planning and Waiver Provision

669.500 What performance measures andstandards apply to the NFJP?

669.510 What planning documents must anNFJP grantee submit?

669.520 What information is required in theNFJP grant plans?



669.530 What are the submission dates forthese plans?

669.540 Under what circumstances are theterms of the grantee’s plan modified bythe grantee or the Department?

669.550 How are costs classified under theNFJP?

669.555 Do the WIA administrative costlimits for States and local areas apply toNFJP grants?

669.560 Are there regulatory and/orstatutory waiver provisions that apply toWIA section 167?

669.570 What information is required todocument a requested waiver?

Subpart E—The MSFW Youth Program

669.600 What is the purpose of the WIAsection 167 MSFW Youth Program?

669.610 What is the relationship betweenthe MSFW youth program and the NFJPauthorized at WIA section 167?

669.620 How do the MSFW youth programregulations apply to the NFJP authorizedunder WIA section 167?

669.630 What are the requirements fordesignation as an ‘‘MSFW youth programgrantee’’?

669.640 What is the process for applying fordesignation as an MSFW youth programgrantee?

669.650 How are MSFW youth fundsallocated to section 167 youth grantees?

669.660 What planning documents andinformation are required in theapplication for MSFW youth grants andwhen must they be filed?

669.670 Who is eligible to receive servicesunder the section 167 MSFW youthprogram?

669.680 What activities and services may beprovided under the MSFW youthprogram?


Subpart A—Purpose and Definitions

§ 669.100 What is the purpose of theNational Farmworker Jobs Program (NFJP)and the other services and activitiesestablished under WIA section 167?

The purpose of the NFJP, and theother services and activities establishedunder WIA section 167, is to strengthenthe ability of eligible migrant andseasonal farmworkers and their familiesto achieve economic self-sufficiency.This part provides the regulatoryrequirements applicable to theexpenditure of WIA section 167 fundsfor such programs, services andactivities.

669.110 What definitions apply to thisprogram?

In addition to the definitions found inWIA sections 101 and 167 and in 20CFR 660.300, the following definitionsapply to programs under this part:

Allowances means direct payments,which must not exceed the higher of theState or Federal minimum wage, madeto NFJP participants during their

enrollment to enable them to participatein intensive or training services.

Capacity enhancement means thetechnical assistance we provide tograntees and grantee staff by theDepartment to improve the quality ofthe program and the delivery of programservices to NFJP participants.

Dependent means an individual who:(1) Was claimed as a dependent on

the qualifying farmworker’s federalincome tax return for the previous year;or

(2) Is the spouse of the qualifyingfarmworker; or

(3) If not claimed as a dependent forfederal income tax purposes, is able toestablish:

(i) A relationship as the farmworker’s(A) Child, grandchild, great

grandchild, including legally adoptedchildren;

(B) Stepchild;(C) Brother, sister, half brother, half

sister, stepbrother, or stepsister;(D) Parent, grandparent, or other

direct ancestor but not foster parent;(E) Foster child;(F) Stepfather or stepmother;(G) Uncle or aunt;(H) Niece or nephew;(I) Father-in-law, mother-in-law, son-

in-law; or(J) Daughter-in-law, brother-in-law, or

sister-in-law; and(ii) The receipt of over half of his/her

total support from the eligiblefarmworker’s family during theeligibility determination period.

Disadvantaged means a farmworkerwhose income, for any 12 consecutivemonths out of the 24 monthsimmediately before the farmworkerapplies for the program, does not exceedthe higher of either the poverty line or70 percent of the lower living standardincome level, adjusted for thefarmworker’s family size and includingthe income of all wage earners, exceptwhen its inclusion would be unjust dueto unstable conditions of the familyunit.

DSFP means the Division of SeasonalFarmworker Programs within theEmployment and TrainingAdministration of the Department, or asuccessor organizational unit.

Eligibility determination periodmeans any consecutive 12-month periodwithin the 24-month periodimmediately preceding the date ofapplication for the NFJP by theapplicant farmworker.

Emergency Assistance meansassistance that addresses immediateneeds of farmworkers and their families,provided by NFJP grantees. Except forevidence to support legal working statusin the United States and Selective

Service registration, where applicable,the applicant’s self-attestation isaccepted as eligibility for emergencyassistance.

Farmwork means those occupationsand industries within agriculturalproduction and agricultural servicesthat we identify for the NationalFarmworker Jobs Program.

Housing development assistancewithin the NFJP, is a type of relatedassistance consisting of an organizedprogram of education and on-sitedemonstrations about the basic elementsof family housing and may includefinancing, site selection, permits andconstruction skills, leading towardshome ownership.

MOU means Memorandum ofUnderstanding.

MSFW means a Migrant or SeasonalFarmworker under WIA section 167.

MSFW program grantee means anentity to which we directly award aWIA grant to carry out the MSFWprogram in one or more designatedStates or substate areas.

National Farmworker Jobs Program(NFJP) is the nationally administeredworkforce investment program forfarmworkers established by WIA section167 as a required partner of the One-Stop system.

Related Assistance means short-termforms of direct assistance designed toassist farmworkers and their families toretain or stabilize their agriculturalemployment or enrollment in the NFJP.

Self-certification means afarmworker’s signed attestation that theinformation he/she submits todemonstrate eligibility for the NFJP istrue and accurate.

Service area means the geographicaljurisdiction in which a WIA section 167grantee is designated to operate.

Work experience means a planned,structured learning experience thattakes place in a workplace for a limitedperiod of time. Work experience may bepaid or unpaid, as appropriate.

§ 669.120 How do we administer the NFJPprogram?

This program is centrallyadministered by the Department ofLabor in a manner consistent with therequirements of WIA section 167. Asdescribed in § 669.210, we designategrantees using procedures consistentwith standard Federal governmentcompetitive procedures. We award othergrants and contracts using similarcompetitive procedures.

§ 669.130 What unit within the Departmentadministers the National Farmworker JobsProgram funded under WIA section 167?

We have designated the Division ofSeasonal Farmworker Programs (DSFP),



or its successor organization, within theEmployment and TrainingAdministration, as the organizationalunit that administers the NFJP and otherMSFW programs at the Federal level.

§ 669.140 How does the Division ofSeasonal Farmworker Programs (DSFP)assist the MSFW grantee organizations toserve farmworker customers?

We provide technical assistance andtraining to MSFW grantees for thepurposes of program implementationand program performance managementleading to enhancement of services toand continuous improvement in theemployment outcomes of farmworkers.

§ 669.150 How are regulations establishedfor this program?

In developing regulations for WIAsection 167, we consult with theMigrant and Seasonal FarmworkerEmployment and Training AdvisoryCommittee. The regulations andprogram guidance consider theeconomic circumstances anddemographics of eligible migrant andseasonal farmworkers.

§ 669.160 How do we consult with NFJPorganizations in developing rules,regulations and standards of accountability,and other policy guidance for the NFJP?

(a) We consider the NFJP granteecommunity as a full partner in thedevelopment of policies for the NFJPsunder the Act.

(b) We have established and continueto support the Federal MSFWEmployment and Training AdvisoryCommittee. Through the AdvisoryCommittee, we actively seek andconsider the views of the granteecommunity before establishing policiesand/or program regulations, accordingto the requirements of WIA section 167.

§ 669.170 What WIA regulations apply tothe programs funded under WIA section167?

(a) The regulations found in this part;(b) The general administrative

requirements found in 20 CFR part 667,including the regulations concerningComplaints, Investigations and Hearingsfound at 20 CFR part 667, subpart Ethrough subpart H, which coverprograms under WIA section 167;

(c) The Department’s regulationscodifying the common rulesimplementing Office of Managementand Budget (OMB) Circulars, whichgenerally apply to Federal programscarried out by State and localgovernments and nonprofitorganizations at 29 CFR parts 95, 96, 97,and 99, as applicable.

(d) The regulations on partnershipresponsibilities contained in 20 CFR

parts 661 (Statewide and LocalGovernance) and 662 (the One-StopSystem).

(e) The Department’s regulations at 29CFR part 37, which implement thenondiscrimination provisions of WIAsection 188, apply to recipients offinancial assistance under WIA section167.

Subpart B—The Service DeliverySystem for the National FarmworkerJobs Program

§ 669.200 Who is eligible to receive a NFJPgrant?

(a) To be eligible to receive a grantunder this section, an entity must have:

(1) An understanding of the problemsof eligible migrant and seasonalfarmworkers and their dependents;

(2) A familiarity with the agriculturalindustry and the labor market needs ofthe geographic area to be served;

(3) The capacity to effectivelyadminister a diversified program ofworkforce investment activities andrelated assistance for eligible migrantand seasonal farmworkers (includingfarmworker youth) as described inparagraph (b) of this section;

(4) The capacity to work effectively asa One-Stop partner.

(b) For purposes of paragraph (a)(3) ofthis section, an entity’s ‘‘capacity toeffectively administer’’ a program maybe demonstrated by:

(1) Organizational experience; or(2) Significant experience of its key

staff in administering similar programs.(c) For purposes of paragraph (a)(4) of

this section, an applicant maydemonstrate its capacity to workeffectively as a One-Stop partnerthrough its existing relationships withLocal Workforce Investment Boards andother One-Stop partners, as evidencedthrough One-Stop system participationand successful MOU negotiations.

(d) As part of the evaluation of theapplicant’s capacity to work effectivelyas a One-Stop partner under paragraph(a)(4) of this section:

(1) The Grant Officer must determinewhether the policies or actions of anyLocal Board established under theauthorty of the alternative entityprovision of WIA section 117(i) and 20CFR 661.330:

(i) Preclude One-Stop systemparticipation by the applicant orexisting NFJP grantee; or

(ii) For the prior program year,contributed to a failure to reachagreement on the terms of the MOUrequired under § 669.220; and

(2) If the Grant Officer’sdeterminations under paragraph (d)(1)of this section are affirmative, then the

Grant Officer may consider this factwhen weighing the capacity of thecompetitors.

§ 669.210 How does an eligible entitybecome an NFJP grantee?

To become an NFJP grantee andreceive a grant under this subpart, anapplicant must respond to a Solicitationfor Grant Applications (SGA). The SGAmay contain additional requirements forthe grant application or the grantee’stwo-year plan. Under the SGA, granteeswill be selected using standard FederalGovernment competitive procedures.The entity’s proposal must describe atwo-year strategy for meeting the needsof eligible migrant and seasonalfarmworkers in the geographic area theentity seeks to serve.

§ 669.220 What is the role of the NFJPgrantee in the One-Stop delivery system?

(a) In those local workforceinvestment areas where the granteeoperates its NFJP, the grantee is arequired partner of the local One-Stopdelivery system and is subject to theprovisions relating to such partnersdescribed in 20 CFR part 662.Consistent with those provisions, thegrantee and the Local Board mustnegotiate an MOU which meets therequirements of 20 CFR 662.300 andsets forth their respectiveresponsibilities for making the full rangeof services available through the One-Stop system available to farmworkers.Where the Local Board is an alternativeentity under 20 CFR 661.330, the NFJPgrantee must negotiate with the Boardon the terms of its MOU and the scopeof its on-going role in the localworkforce investment system, asspecified in 20 CFR 661.310(b)(2). Inlocal areas where the grantee does notoperate its NFJP and there is a largeconcentration of MSFW’s, the granteemay consider the availability ofelectronic connections and other meansto participate in the One-stop system inthat area, in order to serve thoseindividuals.

(b) The MOU must provide forappropriate and equitable services toMSFW’s, and may include costs ofservices to MSFW’s incurred by theOne-Stop that extend beyond Wagner-Peyser funded services and activities.

§ 669.230 Can an NFJP grantee’sdesignation be terminated?

Yes, a grantee’s designation may beterminated for cause:

(a) By the Secretary, in emergencycircumstances when such action isnecessary to protect the integrity ofFederal funds or ensure the properoperation of the program. Any granteeso terminated will be provided with



written notice and an opportunity for ahearing within 30 days after thetermination (WIA sec. 184(e)); or

(b) By the Grant Officer, if there is asubstantial or persistent violation of therequirements in the Act or the WIAregulations. In such a case, the GrantOfficer must provide the grantee with 60days prior written notice, stating thereasons why termination is proposed,and the applicable appeal procedures.

§ 669.240 How do we use fundsappropriated under WIA section 167 for theNFJP?

(a) At least 94 percent of the fundsappropriated each year for WIA section167 activities must be allocated to Stateservice areas, based on the distributionof the eligible MSFW populationdetermined under a formula which hasbeen published in the Federal Register.Grants are awarded under a competitiveprocess for the provision of services toeligible farmworkers within each servicearea.

(b) The balance, up to 6 percent of theappropriated funds, will be used fordiscretionary purposes, for suchactivities as grantee technical assistanceand support of farmworker housingactivities.

Subpart C—The National FarmworkerJobs Program Customers andAvailable Program Services

§ 669.300 What are the generalresponsibilities of the NFJP grantees?

Each grantee is responsible forproviding needed services inaccordance with a service deliverystrategy described in its approved grantplan. These services must reflect theneeds of the MSFW population in theservice area and include the servicesand training activities that are necessaryto achieve each participant’semployment goals.

§ 669.310 What are the basic componentsof an NFJP service delivery strategy?

The NFJP service delivery strategymust include:

(a) A customer-centered casemanagement approach;

(b) The provision of workforceinvestment activities, which includecore services, intensive services, andtraining services, as described in WIAsection 134, as appropriate;

(c) The arrangements under theMOU’s with the applicable LocalWorkforce Investment Boards for thedelivery of the services availablethrough the One-Stop system toMSFW’s; and

(d) Related assistance services.

§ 669.320 Who is eligible to receiveservices under the NFJP?

Disadvantaged migrant and seasonalfarmworkers, as defined in § 669.110,and their dependents are eligible forservices funded by the NFJP.

§ 669.330 How are services delivered tothe customer?

To ensure that all services are focusedon the customer’s needs, services areprovided through a case-managementapproach and may include: Core,intensive and training services; andrelated assistance, which includesemergency assistance and supportiveservices. The basic services and deliveryof case-management activities arefurther described at §§ 669.340 through669.410. Consistent with 20 CFR part663, before receiving intensive services,a participant must receive at least onecore service, and, prior to receivingtraining services, a participant mustreceive at least one intensive service.

§ 669.340 What core services are availableto eligible MSFW’s?

The core services identified in WIAsection 134(d)(2) are available to eligibleMSFW’s.

§ 669.350 How are core services deliveredto MSFW’s?

(a) The full range of core services areavailable to MSFW’s, as well as otherindividuals, at One-Stop Centers, asdescribed in 20 CFR part 662.

(b) Core services must be madeavailable through the One-Stop deliverysystem. The delivery of core services toMSFW’s, by the NFJP grantee andthrough the One-Stop system, must bediscussed in the required MOU betweenthe Local Board and the NFJP grantee.

§ 669.360 May grantees provideemergency assistance to MSFW’s?

(a) Yes, Emergency Assistance (asdefined in § 669.110) is a form of therelated assistance that is authorizedunder WIA section 167(d) and may beprovided by a grantee as described inthe grant plan.

(b) In providing emergency assistance,the NFJP grantee may use anabbreviated eligibility determinationprocess that accepts the applicant’s self-attestation as final evidence ofeligibility, except that self-attestationmay not be used to establish therequirements of legal working status inthe United States, and Selective Serviceregistration, where applicable.

§ 669.370 What intensive services may beprovided to eligible MSFW’s?

(a) Intensive services available tofarmworkers include those described inWIA section 134(d)(3)(C).

(b) Intensive services may alsoinclude:

(1) Dropout prevention activities;(2) Allowance payments;(3) Work experience, which:(i) Is designed to promote the

development of good work habits andbasic work skills at the work-site (workexperience may be conducted with thepublic and private non-profit sectorsand with the private for-profit sectorwhen the design for this service isdescribed in the approved grant plan);and which:

(ii)(A) May be paid. Paid workexperience must compensateparticipants at no less than the higher ofthe applicable State or Federalminimum wage; or

(B) May be unpaid. Unpaid workexperience must provide tangiblebenefits, in lieu of wages, to those whoparticipate in unpaid work experienceand the strategy for ensuring thattangible benefits are received must bedescribed in the approved grant plan.The benefits to the participant must becommensurate with the participant’scontribution to the hosting organization;

(4) Literacy and English-as-a-Secondlanguage; and

(5) Other services identified in theapproved grant plan.

§ 669.380 What is the objectiveassessment that is authorized as anintensive service?

(a) An objective assessment is aprocedure designed to comprehensivelyassess the skills, abilities, and interestsof each employment and trainingparticipant through the use of diagnostictesting and other assessment tools. Themethods used by the grantee inconducting the objective assessmentmay include:

(1) Structured in-depth interviews;(2) Skills and aptitude assessments;(3) Performance assessments (for

example, skills or work samples,including those that measure interestand capability to train in nontraditionalemployment);

(4) Interest or attitude inventories;(5) Career guidance instruments;(6) Aptitude tests; and(7) Basic skills tests.(b) The objective assessment is an

ongoing process that requires thegrantee staff to remain in closeconsultation with each participant tocontinuously obtain current informationabout the participant’s progress thatmay be relevant to his/her IndividualEmployment Plan (IEP).



§ 669.400 What are the elements of theIndividual Employment Plan that isauthorized as an intensive service?

The elements of the IndividualEmployment Plan (IEP) are:

(a) Joint development: The granteedevelops the IEP in partnership with theparticipant;

(b) Customer focus: The combinationof services chosen with the participantmust be consistent with the results ofany objective assessment, responsive tothe expressed goals of the participant,and must include periodic evaluation ofplanned goals and a record ofaccomplishments in consultation withthe participant;

(c) Length/type of service: The typeand duration of intensive or trainingservices must be based upon:

(1) The employment/career goal;(2) Referrals to other programs for

specified activities; and(3) The delivery agents and schedules

for intensive services, training andtraining-related supportive services; and

(d) Privacy: As a customer-centeredcase management tool, an IEP is apersonal record and must receiveconfidential treatment.

§ 669.410 What training services may beprovided to eligible MSFW’s?

(a) Training services include thosedescribed in WIA sections 134(d)(4)(D)and 167(d), and may be described in theIEP and may include:

(1) On-the-job training activitiesunder a contract between theparticipating employer and the grantee;

(2) Training-related supportiveservices; and

(b) Other training activities identifiedin the approved grant plan such astraining in self-employment skills andmicro-enterprise development.

§ 669.420 What must be included in an on-the-job training contract?

At a minimum, an on-the-job trainingcontract must comply with therequirements of WIA sections 195(4)and 101(31) and must include:

(a) The occupation(s) for whichtraining is to be provided;

(b) The duration of training;(c) The wage rate to be paid to the

trainee;(d) The rate of reimbursement;(e) The maximum amount of

reimbursement;(f) A training outline that reflects the

work skills required for the position;(g) An outline of any other separate

classroom training that may be providedby the employer; and

(h) The employer’s agreement tomaintain and make available time andattendance, payroll and other records to

support amounts claimed by theemployer for reimbursement under theOJT contract.

§ 669.430 What Related Assistanceservices may be provided to eligiblefarmworkers?

Related Assistance may include suchservices and activities as:

(a) Emergency Assistance;(b) Workplace safety and farmworker

pesticide safety instruction;(c) Housing development assistance;(d) Other supportive services

described in the grant plan; and(e) English language classes and basic

education classes for participants notenrolled in intensive or trainingservices.

§ 669.440 When may farmworkers receiverelated assistance?

Farmworkers may receive relatedassistance services when the need forthe related assistance is documented forany eligible farmworker or dependent ina determination made by the grantee orin a statement by the farmworker.

Subpart D—PerformanceAccountability, Planning and WaiverProvision

§ 669.500 What performance measuresand standards apply to the NFJP?

(a) The NFJP will use the coreindicators of performance common tothe adult and youth programs, describedin 20 CFR part 666. The levels ofperformance for the farmworkerindicators will be established in anegotiation between the Department andthe grantee. The levels must take intoaccount the characteristics of thepopulation to be served and theeconomic conditions in the service area.Proposed levels of performance must beincluded in the grantee plansubmission, and the agreed-upon levelsmust be included in the approved plan.

(b) We may develop additionalperformance indicators with appropriatelevels of performance for evaluatingprograms that serve farmworkers andwhich reflect the State service areaeconomy and local demographics ofeligible MSFW’s. The levels ofperformance for these additionalindicators must be negotiated with thegrantee and included in the approvedplan.

§ 669.510 What planning documents musta NFJP grantee submit?

Each grantee receiving WIA section167 program funds must submit to DSFPa comprehensive service delivery planand a projection of participant servicesand expenditures covering the two-yeardesignation cycle.

§ 669.520 What information is required inthe NFJP grant plans?

An NFJP grantee’s biennial plan mustdescribe:

(a) The employment and educationneeds of the farmworker population tobe served;

(b) The manner in which proposedservices to farmworkers and theirfamilies will strengthen their ability toobtain or retain employment or stabilizetheir agricultural employment;

(c) The related assistance andsupportive services to be provided andthe manner in which such assistanceand services are to be coordinated withother available services;

(d) The performance indicators andproposed levels of performance used toassess the performance of such entity,including the specific goals of thegrantee’s program for the two ProgramYears involved;

(e) The method the grantee will use totarget its services on specific segmentsof the eligible population, asappropriate;

(f) The array of services which thegrantee intends to make available, withcosts specified on forms we prescribe.These forms will indicate how manyparticipants the grantee expects to serve,by activity, the results expected underthe grantee’s plan, and the anticipatedexpenditures by cost category; and

(g) Its response to any otherrequirements set forth in the SGA issuedunder § 669.210.

§ 669.530 What are the submission datesfor these plans?

We will announce plan submissiondates in the SGA issued under§ 669.220.

§ 669.540 Under what circumstances arethe terms of the grantee’s plan modified bythe grantee or the Department?

(a) Plans must be modified to reflectthe funding level for the second year ofthe designation cycle. We will provideinstructions for when to submitmodifications for second year funding,which will generally be no later thanJune 1 prior to the beginning of thesecond year of the designation cycle.

(b) We may unilaterally modify thegrantee’s plan to add funds or, if thetotal amount of funds available forallotment is reduced by Congress, toreduce each grantee’s grant amount.

(c) The grantee may modify its plan toadd, delete, expand, or reduce any partof the program plan or allowableactivities. Such modifications may bemade by the grantee without ourapproval except where the modificationreduces the total number of participantsto be served annually under intensive



and/or training services by 15 percent ormore, in which case the plan may onlybe modified with Grant Officerapproval.

(d) If the grantee is approved for aregulatory waiver under §§ 669.560 and669.570, the grantee must submit amodification of its service delivery planto reflect the effect of the waiver.

§ 669.550 How are costs classified underthe NFJP?

(a) Costs are classified as follows:(1) Administrative costs, as defined in

20 CFR 667.220; and(2) Program costs, which are all other

costs not defined as administrative.(b) Program costs must be classified

and reported in the following categories:(1) Related assistance, including

emergency assistance and supportiveservices, including allocated staff costs;and

(2) All other program services,including allocated staff costs.

§ 669.555 Do the WIA administrative costlimits for States and local areas apply toNFJP grants?

No, under 20 CFR 667.210(b), limitson administrative costs for NFJP grantswill be negotiated with the grantee andidentified in the grant award document.

§ 669.560 Are there regulatory and/orstatutory waiver provisions that apply toWIA section 167?

(a) The statutory waiver provision atWIA section 189(i) does not apply toWIA section 167.

(b) NFJP grantees may request waiverof any regulatory provisions only whensuch regulatory provisions are:

(1) Not required by WIA;(2) Not related to wage and labor

standards, nondisplacement protection,worker rights, participation andprotection of workers and participants,and eligibility of participants, grievanceprocedures, judicial review,nondiscrimination, allocation of funds,procedures for review and approval ofplans; and

(3) Not related to the key reformprinciples embodied in WIA, describedin 20 CFR 661.400.

§ 669.570 What information is required todocument a requested waiver?

To request a waiver, a grantee mustsubmit a waiver plan that:

(a) Describes the goals of the waiver,the expected programmatic outcomes,and how the waiver will improve theprovision of WIA activities;

(b) Is consistent with guidelines weestablish and the waiver provisions at20 CFR 661.400 through 661.420; and

(c) Includes a modified servicedelivery plan reflecting the effect ofrequested waiver.

Subpart E—The MSFW Youth Program

§ 669.600 What is the purpose of the WIAsection 167 MSFW Youth Program?

The purpose of the MSFW youthprogram is to provide an effective andcomprehensive array of educationalopportunities, employment skills, andlife enhancement activities to at-riskand out-of-school MSFW youth thatlead to success in school, economicstability and development intoproductive members of society.

§ 669.610 What is the relationship betweenthe MSFW youth program and the NFJPauthorized at WIA section 167?

The MSFW youth program is fundedunder WIA section 127(b)(1)(A)(iii) toprovide farmworker youth activitiesunder the auspices of WIA section 167.These funds are specifically earmarkedfor MSFW youth. Funds provided forthe section 167 program may also beused for youth, but are not limited tothis age group.

§ 669.620 How do the MSFW youthprogram regulations apply to the NFJPprogram authorized under WIA section 167?

(a) This subpart applies only to theadministration of grants for MSFWyouth programs funded under WIAsection 127(b)(1)(A)(iii).

(b) The regulations for the NFJP inthis part apply to the administration ofthe MSFW youth program, except asmodified in this subpart.

§ 669.630 What are the requirements fordesignation as an ‘‘MSFW youth programgrantee’’?

Any entity that meets therequirements described in the SGA mayapply for designation as an ‘‘MSFWyouth program grantee’’ consistent withrequirements described in the SGA. TheDepartment gives special considerationto an entity in any service area forwhich the entity has been designated asa WIA section 167 NFJP programgrantee.

§ 669.640 What is the process for applyingfor designation as an MSFW youth programgrantee?

(a) To apply for designation as anMSFW youth program grantee, entitiesmust respond to an SGA by submittinga plan that meets the requirements ofWIA section 167(c)(2) and describes atwo-year strategy for meeting the needsof eligible MSFW youth in the servicearea the entity seeks to serve.

(b) The designation process isconducted competitively (subject to§ 669.210) through a selection processdistinct from the one used to select WIAsection 167 NFJP grantees.

§ 669.650 How are MSFW youth fundsallocated to section 167 youth grantees?

The allocation of funds among entitiesdesignated as WIA section 167 MSFWYouth Program grantees is based on thecomparative merits of the applications,in accordance with criteria set forth inthe SGA. However, we may includecriteria in the SGA that promote ageographical distribution of funds andthat encourages both large- and small-scale programs.

§ 669.660 What planning documents andinformation are required in the applicationfor MSFW youth grants and when must theybe filed?

The required planning documents andother required information and thesubmission dates for filing are describedin the SGA.

§ 669.670 Who is eligible to receiveservices under the section 167 MSFW youthprogram?

Disadvantaged youth, ages 14 through21, who are individually eligible or aremembers of eligible families under theWIA section 167 NFJP may receive theseservices.

§ 669.680 What activities and services maybe provided under the MSFW youthprogram?

(a) Based on an evaluation andassessment of the needs of MSFW youthparticipants, grantees may provideactivities and services to MSFW youththat include:

(1) Intensive services and trainingservices, as described in §§ 669.400 and669.410;

(2) Life skills activities which mayinclude self and interpersonal skillsdevelopment;

(3) Community service projects;(4) Small business development

technical assistance and training inconjunction with entrepreneurialtraining;

(5) Supportive services including therelated assistance services, described in§ 669.430; and

(b) Other activities and services thatconform to the use of funds for youthactivities described in 20 CFR part 664.

PART 670—THE JOB CORPS UNDERTITLE I OF THE WORKFORCEINVESTMENT ACT


Sec.670.100 What is the scope of this part?670.110 What is the Job Corps program?670.120 What definitions apply to this part?670.130 What is the role of the Job Corps

Director?



Subpart B—Site Selection and Protectionand Maintenance of Facilities670.200 Who decides where Job Corps

centers will be located?670.210 How are center facility

improvements and new constructionhandled?

670.220 Are we responsible for theprotection and maintenance of centerfacilities?

Subpart C—Funding and Selection ofService Providers670.300 What entities are eligible to receive

funds to operate centers and providetraining and operational supportservices?

670.310 How are entities selected to receivefunding?

670.320 What are the requirements foraward of contracts and payments toFederal agencies?

Subpart D—Recruitment, Eligibility,Screening, Selection and Assignment, andEnrollment670.400 Who is eligible to participate in the

Job Corps program?670.410 Are there additional factors which

are considered in selecting an eligibleapplicant for enrollment?

670.420 Are there any special requirementsfor enrollment related to the MilitarySelective Service Act?

670.430 What entities conduct outreach andadmissions activities for the Job Corpsprogram?

670.440 What are the responsibilities ofoutreach and admissions agencies?

670.450 How are applicants who meeteligibility and selection criteria assignedto centers?

670.460 What restrictions are there on theassignment of eligible applicants fornonresidential enrollment in Job Corps?

670.470 May a person who is determined tobe ineligible or an individual who isdenied enrollment appeal that decision?

670.480 At what point is an applicantconsidered to be enrolled in Job Corps?

670.490 How long may a student beenrolled in Job Corps?

Subpart E—Program Activities and CenterOperati

670.500 What services must Job Corpscenters provide?

670.505 What types of training must JobCorps centers provide?

670.510 Are Job Corps center operatorsresponsible for providing all vocationaltraining?

670.515 What responsibilities do the centeroperators have in managing work-basedlearning?

670.520 Are students permitted to hold jobsother than work-based learningopportunities?

670.525 What residential support servicesmust Job Corps center operators provide?

670.530 Are Job Corps centers required tomaintain a student accountabilitysystem?

670.535 Are Job Corps centers required toestablish behavior management systems?

670.540 What is Job Corps’ zero tolerancepolicy?

670.545 How does Job Corps ensure thatstudents receive due process indisciplinary actions?

670.550 What responsibilities do Job Corpscenters have in assisting students withchild care needs?

670.555 What are the center’sresponsibilities in ensuring thatstudents’ religious rights are respected?

670.560 Is Job Corps authorized to conductpilot and demonstration projects?


670.600 Is government-paid transportationprovided to Job Corps students?

670.610 When are students authorized totake leaves of absence from their JobCorps centers?

670.620 Are Job Corps students eligible toreceive cash allowances andperformance bonuses?

670.630 Are student allowances subject toFederal Payroll Taxes?

670.640 Are students provided withclothing?

Subpart G—Placement and ContinuedServices670.700 What are Job Corps centers’

responsibilities in preparing students forplacement services?

670.710 What placement services areprovided for Job Corps students?

670.720 Who provides placement services?670.730 What are the responsibilities of

placement agencies?670.740 Must continued services be

provided for graduates?670.750 Who may provide continued

services for graduates?670.760 How will Job Corps coordinate

with other agencies?

Subpart H—Community Connections670.800 How do Job Corps centers and

service providers become involved intheir local communities?

Subpart I—Administrative and ManagementProvisions670.900 Are damages caused by students

eligible for reimbursement under theTort Claims Act?

670.905 Are damages that occur to privateparties at Job Corps Centers eligible forreimbursement under the Tort ClaimsAct?

670.910 Are students entitled to FederalEmployees Compensation Benefits(FECB)?

670.915 When are residential studentsconsidered to be in the performance ofduty?

670.920 When are non-resident studentsconsidered to be in the performance ofduty?

670.925 When are students considered to benot in the performance of duty?

670.930 How are FECA benefits computed?670.935 How are students protected from

unsafe or unhealthy situations?670.940 What are the requirements for

criminal law enforcement jurisdiction oncenter property?

670.945 Are Job Corps operators and serviceproviders authorized to pay State or localtaxes on gross receipts?

670.950 What are the financial managementresponsibilities of Job Corps centeroperators and other service providers?

670.955 Are center operators and serviceproviders subject to Federal audits?

670.960 What are the procedures formanagement of student records?

670.965 What procedures apply todisclosure of information about JobCorps students and program activities?

670.970 What are the reportingrequirements for center operators andoperational support service providers?

670.975 How is the performance of the JobCorps program assessed?

670.980 What are the indicators ofperformance for Job Corps?

670.985 What happens if a center operator,screening and admissions contractor orother service provider fails to meet theexpected levels of performance?

670.990 What procedures are available toresolve complaints and disputes?

670.991 How does Job Corps ensure thatcomplaints or disputes are resolved in atimely fashion?

670.992 How does Job Corps ensure thatcenters or other service providerscomply with the Act and the WIAregulations?

670.993 How does Job Corps ensure thatcontract disputes will be resolved?

670.994 How does Job Corps resolvedisputes between DOL and other FederalAgencies?

670.995 What DOL equal opportunity andnondiscrimination regulations apply toJob Corps?



§ 670.100 What is the scope of this part?

The regulations in this part are anoutline of the requirements that apply tothe Job Corps program. More detailedpolicies and procedures are containedin a Policy and Requirements Handbookissued by the Secretary. Throughout thispart, phrases like ‘‘according toinstructions (procedures) issued by theSecretary’’ refer to the Policy andRequirements Handbook and other JobCorps directives.

§ 670.110 What is the Job Corps program?

Job Corps is a national program thatoperates in partnership with States andcommunities, local WorkforceInvestment Boards, youth councils,One-Stop Centers and partners, andother youth programs to provideeducation and training, primarily in aresidential setting, for low incomeyoung people. The objective of JobCorps is to provide young people withthe skills they need to obtain and holda job, enter the Armed Forces, or enrollin advanced training or furthereducation.



§ 670.120 What definitions apply to thispart?

The following definitions apply tothis part:

Absent Without Official Leave (AWOL)means an adverse enrollment status towhich a student is assigned based onextended, unapproved absence fromhis/her assigned center or off-centerplace of duty. Students do not earn JobCorps allowances while in AWOLstatus.

Applicable local board means a localWorkforce Investment Board that:

(1) Works with a Job Corps center andprovides information on local demandoccupations, employment opportunities,and the job skills needed to obtain theopportunities, and

(2) Serves communities in which thegraduates of the Job Corps seekemployment when they leave theprogram.

Capital improvement means anymodification, addition, restoration orother improvement:

(1) Which increases the usefulness,productivity, or serviceable life of anexisting site, facility, building, structure,or major item of equipment;

(2) Which is classified for accountingpurposes as a ‘‘fixed asset;’’ and

(3) The cost of which increases therecorded value of the existing building,site, facility, structure, or major item ofequipment and is subject todepreciation.

Center means a facility and anorganizational entity, including all of itsparts, providing Job Corps training anddesignated as a Job Corps center.

Center operator means a Federal,State or local agency, or a contractorthat runs a center under an agreementor contract with DOL.

Civilian conservation center (CCC)means a center operated on public landunder an agreement between DOL andanother Federal agency, which provides,in addition to other training andassistance, programs of work-basedlearning to conserve, develop, ormanage public natural resources orpublic recreational areas or to developcommunity projects in the publicinterest.

Contract center means a Job Corpscenter operated under a contract withDOL.

Contracting officer means theRegional Director or other officialauthorized to enter into contracts oragreements on behalf of DOL.

Enrollee means an individual who hasvoluntarily applied for, been selectedfor, and enrolled in the Job Corpsprogram, and remains with the program,but has not yet become a graduate.

Enrollees are also referred to as‘‘students’’ in this part.

Enrollment means the process bywhich individual formally becomes astudent in the Job Corps program.

Graduate means an enrollee who has:(1) Completed the requirements of a

vocational training program, or receiveda secondary school diploma or itsequivalent as a result of participating inthe Job Corps program; and

(2) Achieved job readiness andemployment skills as a result ofparticipating in the Job Corps program.

Individual with a disability means anindividual with a disability as definedin section 3 of the Americans withDisabilities Act of 1990 (42 U.S.C.12102).

Interagency agreement means a formalagreement between DOL and anotherFederal agency administering andoperating centers. The agreementestablishes procedures for the funding,administration, operation, and review ofthose centers as well as the resolutionof any disputes.

Job Corps means the agency of theDepartment established by section 143of the Workforce Investment Act of 1998(WIA) (20 U.S.C. 9201 et seq.) toperform those functions of the Secretaryof Labor set forth in subtitle C of WIATitle I.

Job Corps Director means the chiefofficial of the Job Corps or a personauthorized to act for the Job CorpsDirector.

Low income individual means anindividual who meets the definition inWIA section 101(25).

National Office means the nationaloffice of Job Corps.

National training contractor means alabor union, union-affiliatedorganization, business organization,association or a combination of suchorganizations, which has a contract withthe national office to provide vocationaltraining, placement, or other services.

Operational support services meansactivities or services required to supportthe operation of Job Corps, including:

(1) Outreach and admissions services;(2) Contracted vocational training and

off-center training;(3) Placement services;(4) Continued services for graduates;(5) Certain health services; and(6) Miscellaneous logistical and

technical support.Outreach and admissions agency

means an organization that performsoutreach, and screens and enrolls youthunder a contract or other agreementwith Job Corps.

Placement means studentemployment, entry into the ArmedForces, or enrollment in other training

or education programs followingseparation from Job Corps.

Placement agency means anorganization acting under a contract orother agreement with Job Corps toprovide placement services forgraduates and, to the extent possible, forformer students.

Regional appeal board means theboard designated by the RegionalDirector to consider student appeals ofdisciplinary discharges.

Regional Director means the chief JobCorps official of a regional office or aperson authorized to act for the RegionalDirector.

Regional Office means a regionaloffice of Job Corps.

Regional Solicitor means the chiefofficial of a regional office of the DOLOffice of the Solicitor, or a personauthorized to act for the RegionalSolicitor.

Separation means the action by whichan individual ceases to be a student inthe Job Corps program, eithervoluntarily or involuntarily.

Student means an individual enrolledin the Job Corps.

Unauthorized goods means:(1) Firearms and ammunition;(2) Explosives and incendiaries;(3) Knives with blades longer than 2

inches;(4) Homemade weapons;(5) All other weapons and

instruments used primarily to inflictpersonal injury;

(6) Stolen property;(7) Drugs, including alcohol,

marijuana, depressants, stimulants,hallucinogens, tranquilizers, and drugparaphernalia except for drugs and/orparaphernalia that are prescribed formedical reasons; and

(8) Any other goods prohibited by thecenter operator in a student handbook.

§ 670.130 What is the role of the Job CorpsDirector?

The Job Corps Director has beendelegated the authority to carry out theresponsibilities of the Secretary underSubtitle I–C of the Act. Where the term‘‘Secretary’’ is used in this part 670 torefer to establishment or issuance ofguidelines and standards directlyrelating to the operation of the Job Corpsprogram, the Job Corps Director has thatresponsibility.

Subpart B—Site Selection andProtection and Maintenance ofFacilities

§ 670.200 Who decides where Job Corpscenters will be located?

(a) The Secretary must approve thelocation and size of all Job Corpscenters.



(b) The Secretary establishesprocedures for making decisionsconcerning the establishment,relocation, expansion, or closing ofcontract centers.

§ 670.210 How are center facilityimprovements and new constructionhandled?

The Secretary issues procedures forrequesting, approving, and initiatingcapital improvements and newconstruction on Job Corps centers.

§ 670.220 Are we responsible for theprotection and maintenance of centerfacilities?

(a) Yes, the Secretary establishesprocedures for the protection andmaintenance of contract center facilitiesowned or leased by the Department ofLabor, that are consistent with FederalProperty Management Regulations at 41CFR Chapter 101.

(b) Federal agencies operating civilianconservation centers (CCC’s) on publicland are responsible for protection andmaintenance of CCC facilities.

(c) The Secretary issues proceduresfor conducting periodic facility surveysof centers to determine their conditionand to identify needs such as correctionof safety and health deficiencies,rehabilitation, and/or new construction.

Subpart C—Funding and Selection ofService Providers

§ 670.300 What entities are eligible toreceive funds to operate centers andprovide training and operational supportservices?

(a) Entities eligible to receive fundsunder this subpart to operate centersinclude:

(1) Federal, State, and local agencies;(2) Private for-profit and non-profit

corporations;(3) Indian tribes and organizations;

and(4) Area vocational education or

residential vocational schools. (WIA sec.147(a)(1)(A) and (d)).

(b) Entities eligible to receive funds toprovide outreach and admissions,placement and other operationalsupport services include:

(1) One-Stop Centers and partners;(2) Community action agencies;(3) Business organizations;(4) Labor organizations;(5) Private for-profit and non-profit

corporations; and(6) Other agencies, and individuals

that have experience and contact withyouth. (WIA sec. 145(a)(3)).

§ 670.310 How are entities selected toreceive funding?

(a) The Secretary selects eligibleentities to operate contract centers and

operational support service providers ona competitive basis in accordance withthe Federal Property and AdministrativeServices Act of 1949 unless section 303(c) and (d) of that Act apply. In selectingan entity, Job Corps issues requests forproposals (RFP) for the operation of allcontract centers and for provision ofoperational support services accordingto Federal Acquisition Regulation (48CFR Chapter 1) and DOL AcquisitionRegulation (48 CFR Chapter 29). JobCorps develops RFP’s for centeroperators in consultation with theGovernor, the center industry council (ifestablished), and the Local Board for theworkforce investment area in which thecenter is located.

(b) The RFP for each contract centerand each operational support servicecontract describes uniformspecifications and standards, as well asspecifications and requirements that areunique to the operation of the specificcenter or to the specific requiredoperational support services.

(c) The Contracting Officer selects andfunds Job Corps contract centeroperators on the basis of an evaluationof the proposals received using criteriaestablished by the Secretary, and setforth in the RFP. The criteria includethe following:

(1) The offeror’s ability to coordinatethe activities carried out through the JobCorps center with activities carried outunder the appropriate State and localworkforce investment plans;

(2) The degree to which the offerorproposes vocational training thatreflects employment opportunities inthe local areas in which most of thestudents intend to seek employment;

(3) The degree to which the offeror isfamiliar with the surroundingcommunity, including the applicableOne-Stop Centers, and the State andregion in which the center is located;and

(4) The offeror’s past performance.(d) The Contracting Officer selects

and funds operational support servicecontractors on the basis of an evaluationof the proposals received using criteriaestablished by the Secretary and setforth in the RFP.

(e) The Secretary enters intointeragency agreements with Federalagencies for the funding, establishment,and operation of CCC’s which includeprovisions to ensure that the Federalagencies comply with the regulationsunder this part.

§ 670.320 What are the requirements foraward of contracts and payments to Federalagencies?

(a) The requirements of the FederalProperty and Administrative Services

Act of 1949, as amended; the FederalGrant and Cooperative Agreement Act of1977; the Federal AcquisitionRegulation (48 CFR Chapter 1); and theDOL Acquisition Regulation (48 CFRChapter 29) apply to the award ofcontracts and to payments to Federalagencies.

(b) Job Corps funding of Federalagencies that operate CCC’s are made bya transfer of obligational authority fromDOL to the respective operating agency.

Subpart D—Recruitment, Eligibility,Screening, Selection and Assignment,and Enrollment

§ 670.400 Who is eligible to participate inthe Job Corps program?

To be eligible to participate in the JobCorps, an individual must be:

(a) At least 16 and not more than 24years of age at the time of enrollment,except

(1) There is no upper age limit for anotherwise eligible individual with adisability; and

(2) Not more than 20% of individualsenrolled nationwide may be individualswho are aged 22 to 24 years old;

(b) A low-income individual;(c) An individual who is facing one or

more of the following barriers toeducation and employement:

(1) Is basic skills deficient, as definedin WIA sec. 101(4); or

(2) Is a school dropout; or(3) Is homeless, or a runaway, or a

foster child; or(4) Is a parent; or(5) Requires additional education,

vocational training, or intensivecounseling and related assistance inorder to participate successfully inregular schoolwork or to secure andhold meaningful employment; and

(d) Meets the requirements of§ 670.420, if applicable.

§ 670.410 Are there additional factorswhich are considered in selecting aneligible applicant for enrollment?

Yes, in accordance with proceduresissued by the Secretary, an eligibleapplicant may be selected forenrollment, only if:

(a) A determination is made, based oninformation relating to the background,needs and interests of the applicant, thatthe applicant’s educational andvocational needs can best be metthrough the Job Corps program;

(b) A determination is made that thereis a reasonable expectation the applicantcan participate successfully in groupsituations and activities, and is notlikely to engage in actions that wouldpotentially:

(1) Prevent other students fromreceiving the benefit of the program;



(2) Be incompatible with themaintenance of sound discipline; or

(3) Impede satisfactory relationshipsbetween the center to which the studentis assigned and surrounding localcommunities;

(c) The applicant is made aware of thecenter’s rules and what theconsequences are for failure to observethe rules, as described in proceduresissued by the Secretary;

(d) The applicant passes a backgroundcheck conducted according toprocedures established by the Secretary.The background check must find thatthe applicant is not on probation,parole, under a suspended sentence orunder the supervision of any agency asa result of court action orinstitutionalization, unless the court orappropriate agency certifies in writingthat it will approve of the applicant’srelease from its supervision and that theapplicant’s release does not violateapplicable laws and regulations. No onewill be denied enrollment in Job Corpssolely on the basis of contact with thecriminal justice system. (WIA secs.145(b)(1)(C) and 145(b)(2));

(e) Suitable arrangements are made forthe care of any dependent children forthe proposed period of enrollment.

§ 670.420 Are there any specialrequirements for enrollment related to theMilitary Selective Service Act?

(a) Yes, each male applicant 18 yearsof age or older must present evidencethat he has complied with section 3 ofthe Military Selective Service Act (50U.S.C. App. 451 et seq.) if required; and

(b) When a male student turns 18years of age, he must submit evidenceto the center that he has complied withthe requirements of the MilitarySelective Service Act (50 U.S.C. App.451 et seq).

§ 670.430 What entities conduct outreachand admissions activities for the Job Corpsprogram?

The Regional Director makesarrangements with outreach andadmissions agencies to perform JobCorps recruitment, screening andadmissions functions according tostandards and procedures issued by theSecretary. One-Stop Centers or partners,community action organizations, privatefor-profit and non-profit businesses,labor organizations, or other entities thathave contact with youth over substantialperiods of time and are able to offerreliable information about the needs ofyouth, conduct outreach and admissionsactivities. The Regional Director awardscontracts for provision of outreach andscreening services on a competitivebasis in accordance with therequirements in § 670.310.

§ 670.440 What are the responsibilities ofoutreach and admissions agencies?

(a) Outreach and admissions agenciesare responsible for:

(1) Developing outreach and referralsources;

(2) Actively seeking out potentialapplicants;

(3) Conducting personal interviewswith all applicants to identify theirneeds and eligibility status; and

(4) Identifying youth who areinterested and likely Job Corpsparticipants.

(b) Outreach and admissions agenciesare responsible for completing all JobCorps application forms anddetermining whether applicants meetthe eligibility and selection criteria forparticipation in Job Corps as providedin §§ 670.400 and 670.410.

(c) The Secretary may decide thatdeterminations with regard to one ormore of the eligibility criteria will bemade by the Regional Director.

§ 670.450 How are applicants who meeteligibility and selection criteria assigned tocenters?

(a) Each applicant who meets theapplication and selection requirementsof §§ 670.400 and 670.410 is assigned toa center based on an assignment plandeveloped by the Secretary. Theassignment plan identifies a target forthe maximum percentage of students ateach center who come from the State orregion nearest the center, and theregions surrounding the center. Theassignment plan is based on an analysisof:

(1) The number of eligible individualsin the State and region where the centeris located and the regions surroundingwhere the center is located;

(2) The demand for enrollment in JobCorps in the State and region where thecenter is located and in surroundingregions; and

(3) The size and enrollment level ofthe center.

(b) Eligible applicants are assigned tocenters closest to their homes, unless itis determined, based on the specialneeds of applicants, includingvocational interests and English literacyneeds, the unavailability of openings inthe closest center, or parent or guardianconcerns, that another center is moreappropriate.

(c) A student who is under the age of18 must not be assigned to a centerother than the center closest to home ifa parent or guardian objects to theassignment.

§ 670.460 What restrictions are there onthe assignment of eligible applicants fornonresidential enrollment in Job Corps?

(a) No more than 20 percent ofstudents enrolled in Job Corpsnationwide may be nonresidentialstudents.

(b) In enrolling individuals who are tobe nonresidential students, priority isgiven to those eligible individuals whoare single parents with dependentchildren. (WIA sec 147(b).)

§ 670.470 May a person who is determinedto be ineligible or an individual who isdenied enrollment appeal that decision?

(a) A person who is determined to beineligible to participate in Job Corpsunder § 670.400 or a person who is notselected for enrollment under § 670.410may appeal the determination to theoutreach and admissions agency or tothe center within 60 days of thedetermination. The appeal will beresolved according to the procedures in§§ 670.990 and 670.991. If the appeal isdenied by the outreach/admissionscontractor or the center, the person mayappeal the decision in writing to theRegional Director within 60 days thedate of the denial. The Regional Directorwill decide within 60 days whether toreverse or approve the appealeddecision. The decision by the RegionalDirector is the Department’s finaldecision.

(b) If an applicant believes that he orshe has been determined ineligible ornot selected for enrollment based upona factor prohibited by WIA section 188,the individual may proceed under theapplicable DOL nondiscriminationregulations implementing WIA section188. These regulations may be found at29 CFR part 37.

(c) An applicant who is determined tobe ineligible or a person who is deniedenrollment must be referred to theappropriate One-Stop Center or otherlocal service provider.

§ 670.480 At what point is an applicantconsidered to be enrolled in Job Corps?

(a) To become enrolled as a Job Corpsstudent, an applicant selected forenrollment must physically arrive at theassigned Job Corps center on theappointed date. However, applicantsselected for enrollment who arrive attheir assigned centers by governmentfurnished transportation are consideredto be enrolled on their dates ofdeparture by such transportation.

(b) Center operators must documentthe enrollment of new studentsaccording to procedures issued by theSecretary.



§ 670.490 How long may a student beenrolled in Job Corps?

(a) Except as provided in paragraph(b) of this section, a student may remainenrolled in Job Corps for no more thantwo years.

(b)(1) An extension of a student’senrollment may be authorized in specialcases according to procedures issued bythe Secretary; and

(2) A student’s enrollment in anadvanced career training program maybe extended in order to complete theprogram for a period not to exceed oneyear.

Subpart E—Program Activities andCenter Operations

§ 670.500 What services must Job Corpscenters provide?

(a) Job Corps centers must provide:(1) Academic, vocational,

employability and social skills training;(2) Work-based learning; and(3) Recreation, counseling and other

residential support services.(b) In addition, centers must provide

students with access to the core servicesdescribed in WIA section 134(d)(2) andthe intensive services described in WIAsection 134(d)(3).

§ 670.505 What types of training must JobCorps centers provide?

(a) Job Corps centers must providebasic education, vocational and socialskills training. The Secretary providescurriculum standards and guidelines.

(b) Each center must provide studentswith competency-based orindividualized training in anoccupational area that will bestcontribute to the students’ opportunitiesfor permanent long-term employment.

(1) Specific vocational trainingprograms offered by individual centersmust be approved by the RegionalDirector according to policies issued bythe Secretary.

(2) Center industry councils describedin § 670.800 must review appropriatelabor market information, identifyemployment opportunities in local areaswhere students will look foremployment, determine the skills andeducation necessary for those jobs, andas appropriate, recommend changes inthe center’s vocational training programto the Secretary.

(c) Each center must implement asystem to evaluate and track theprogress and achievements of eachstudent at regular intervals.

(d) Each center must develop atraining plan that must be available forreview and approval by the appropriateRegional Director.

§ 670.510 Are Job Corps center operatorsresponsible for providing all vocationaltraining?

No, in order to facilitate students’entry into the workforce, the Secretarymay contract with national business,union, or union-affiliated organizationsfor vocational training programs atspecific centers. Contractors providingsuch vocational training will be selectedin accordance with the requirements of§ 670.310.

§ 670.515 What responsibilities do thecenter operators have in managing work-based learning?

(a) The center operator mustemphasize and implement work-basedlearning programs for students throughcenter program activities, includingvocational skills training, and througharrangements with employers. Work-based learning must be under actualworking conditions and must bedesigned to enhance the employability,responsibility, and confidence of thestudents. Work-based learning usuallyoccurs in tandem with students’vocational training.

(b) The center operator must ensurethat students are assigned only toworkplaces that meet the safetystandards described in § 670.935.

§ 670.520 Are students permitted to holdjobs other than work-based learningopportunities?

Yes, a center operator may authorizea student to participate in gainfulleisure time employment, as long as theemployment does not interfere withrequired scheduled activities.

§ 670.525 What residential supportservices must Job Corps center operatorsprovide?

Job Corps center operators mustprovide the following services accordingto procedures issued by the Secretary:

(a) A quality living and learningenvironment that supports the overalltraining program and includes a safe,secure, clean and attractive physical andsocial environment, seven days a week,24 hours a day;

(b) An ongoing, structured counselingprogram for students;

(c) Food service, which includesprovision of nutritious meals forstudents;

(d) Medical services, throughprovision or coordination of a wellnessprogram which includes access to basicmedical, dental and mental healthservices, as described in the Policy andRequirements Handbook, for allstudents from the date of enrollmentuntil separation from the Job Corpsprogram;

(e) A recreation/avocational program;

(f) A student leadership program andan elected student government; and

(g) A student welfare association forthe benefit of all students that is fundedby non-appropriated funds which comefrom sources such as snack bars,vending machines, disciplinary fines,and donations, and is run by an electedstudent government, with the help of astaff advisor.

§ 670.530 Are Job Corps centers requiredto maintain a student accountabilitysystem?

Yes, each Job Corps center mustestablish and operate an effectivesystem to account for and document thewhereabouts, participation, and statusof students during their Job Corpsenrollment. The system must enablecenter staff to detect and respond toinstances of unauthorized orunexplained student absence. Eachcenter must operate its studentaccountability system according torequirements and procedures issued bythe Secretary.

§ 670.535 Are Job Corps centers requiredto establish behavior managementsystems?

(a) Yes, each Job Corps center mustestablish and maintain its own studentincentives system to encourage andreward students’ accomplishments.

(b) The Job Corps center mustestablish and maintain a behaviormanagement system, according toprocedures established by the Secretary.The behavior management system mustinclude a zero tolerance policy forviolence and drugs policy as describedin § 670.540.

§ 670.540 What is Job Corps’ zerotolerance policy?

(a) Each Job Corps center must havea zero tolerance policy for:

(1) An act of violence, as defined inprocedures issued by the Secretary;

(2) Use, sale, or possession of acontrolled substance, as defined at 21U.S.C. 802;

(3) Abuse of alcohol;(4) Possession of unauthorized goods;

or(5) Other illegal or disruptive activity.(b) As part of this policy, all students

must be tested for drugs as a conditionof enrollment. (WIA sec. 145(a)(1) and152(b)(2).)

(c) According to procedures issued bythe Secretary, the policy must specifythe offenses that result in the automaticseparation of a student from the JobCorps. The center director is responsiblefor determining when there is aviolation of a specified offense.



§ 670.545 How does Job Corps ensure thatstudents receive due process indisciplinary actions?

The center operator must ensure thatall students receive due process indisciplinary proceedings according toprocedures developed by the Secretary.These procedures must include, at aminimum, center fact-finding andbehavior review boards, a code ofsanctions under which the penalty ofseparation from Job Corps might beimposed, and procedures for students toappeal a center’s decision to dischargethem involuntarily from Job Corps to aregional appeal board.

§ 670.550 What responsibilities do JobCorps centers have in assisting studentswith child care needs?

(a) Job Corps centers are responsiblefor coordinating with outreach andadmissions agencies to assist studentswith making arrangements for child carefor their dependent children.

(b) Job Corps centers may operate oncenter child development programswith the approval of the Secretary.

§ 670.555 What are the center’sresponsibilities in ensuring that students’religious rights are respected?

(a) Centers must ensure that a studenthas the right to worship or not worshipas he or she chooses.

(b) Religious services may not be heldon center unless the center is so isolatedthat transportation to and fromcommunity religious facilities isimpractical.

(c) If religious services are held oncenter, no Federal funds may be paid tothose who conduct services. Servicesmay not be confined to one religiousdenomination, and centers may notrequire students to attend services.

(d) Students who believe theirreligious rights have been violated mayfile complaints under the procedures setforth in 29 CFR part 37.

§ 670.560 Is Job Corps authorized toconduct pilot and demonstration projects?

(a) Yes, the Secretary may undertakeexperimental, research anddemonstration projects related to the JobCorps program according to WIA section156.

(b) The Secretary establishes policiesand procedures for conducting suchprojects.

(c) All studies and evaluationsproduced or developed with Federalfunds become the property of the UnitedStates.


§ 670.600 Is government-paidtransportation provided to Job Corpsstudents?

Yes, Job Corps provides for thetransportation of students between theirhomes and centers as described inpolicies and procedures issued by theSecretary.

§ 670.610 When are students authorized totake leaves of absence from their Job Corpscenters?

Job Corps students are eligible forannual leaves, emergency leaves andother types of leaves of absence fromtheir assigned centers according tocriteria and requirements issued by theSecretary. Center operators and otherservice providers must account forstudent leave according to proceduresissued by the Secretary.

§ 670.620 Are Job Corps students eligibleto receive cash allowances andperformance bonuses?

(a) Yes, according to criteria and ratesestablished by the Secretary, Job Corpsstudents receive cash living allowances,performance bonuses, and allotmentsfor care of dependents, and graduatesreceive post-separation readjustmentallowances and placement bonuses. TheSecretary may provide former studentswith post-separation allowances.

(b) In the event of a student’s death,any amount due under this section ispaid according to the provisions of 5U.S.C. 5582 governing issues such asdesignation of beneficiary, order ofprecedence and related matters.

§ 670.630 Are student allowances subjectto Federal Payroll Taxes?

Yes, Job Corps student allowances aresubject to Federal payroll taxwithholding and social security taxes.Job Corps students are considered to beFederal employees for purposes ofFederal payroll taxes. (WIA sec.157(a)(2).)

§ 670.640 Are students provided withclothing?

Yes, Job Corps students are providedcash clothing allowances and/or articlesof clothing, including safety clothing,when needed for their participation inJob Corps and their successful entry intothe work force. Center operators andother service providers must issueclothing and clothing assistance tostudents according to rates, criteria, andprocedures issued by the Secretary.

Subpart G—Placement and ContinuedServices

§ 670.700 What are Job Corps centers’responsibilities in preparing students forplacement services?

Job Corps centers must test andcounsel students to assess theircompetencies and capabilities anddetermine their readiness for placement.

§ 670.710 What placement services areprovided for Job Corps students?

(a) Job Corps placement services focuson placing program graduates in:

(1) Full-time jobs that are related totheir vocational training and that paywages that allow for self-sufficiency;

(2) Higher education; or(3) Advanced training programs,

including apprenticeship programs.(b) Placement service levels for

students may vary, depending onwhether the student is a graduate or aformer student.

(c) Procedures relating to placementservice levels are issued by theSecretary.

§ 670.720 Who provides placementservices?

The One-Stop system must be used tothe fullest extent possible in placinggraduates and former students in jobs.Job Corps placement agencies provideplacement services under a contract orother agreement with the Department ofLabor.

§ 670.730 What are the responsibilities ofplacement agencies?

(a) Placement agencies are responsiblefor:

(1) Contacting graduates;(2) Assisting them in improving skills

in resume preparation, interviewingtechniques and job search strategies;

(3) Identifying job leads oreducational and training opportunitiesthrough coordination with localWorkforce Investment Boards, One-Stopoperators and partners, employers,unions and industry organizations; and

(4) Placing graduates in jobs,apprenticeship, the Armed Forces, orhigher education or training, or referringformer students for additional servicesin their local communities asappropriate. Placement services may beprovided for former students accordingto procedures issued by the Secretary.

(b) Placement agencies must recordand submit all Job Corps placementinformation according to proceduresestablished by the Secretary.

§ 670.740 Must continued services beprovided for graduates?

Yes, according to procedures issuedby the Secretary, continued services,



including transition support andworkplace counseling, must be providedto program graduates for 12 months aftergraduation.

§ 670.750 Who may provide continuedservices for graduates?

Placement agencies, centers or otheragencies, including One-Stop partners,may provide post-program servicesunder a contract or other agreementwith the Regional Director. In selectinga provider for continued services,priority is given to One-Stop partners.(WIA sec. 148(d)).

§ 670.760 How will Job Corps coordinatewith other agencies?

(a) The Secretary issues guidelines forthe National Office, Regional Offices,Job Corps centers and operationalsupport providers to use in developingand maintaining cooperativerelationships with other agencies andinstitutions, including law enforcement,educational institutions, communities,and other employment and trainingprograms and agencies.

(b) The Secretary develops policesand requirements to ensure linkageswith the One-Stop delivery system tothe greatest extent practicable, as well aswith other Federal, State, and localprograms, and youth programs fundedunder this title. These linkages enhanceservices to youth who face multiplebarriers to employment and mustinclude, where appropriate:

(1) Referrals of applicants andstudents;

(2) Participant assessment;(3) Pre-employment and work

maturity skills training;(4) Work-based learning;(5) Job search, occupational, and basic

skills training; and(6) Provision of continued services for

graduates.

Subpart H—Community Connections

§ 670.800 How do Job Corps centers andservice providers become involved in theirlocal communities?

(a) Job Corps representatives serve onYouth Councils operating underapplicable Local Boards wherevergeographically feasible.

(b) Each Job Corps center must havea Business and Community Liaisondesignated by the director of the centerto establish relationships with local anddistant employers, applicable One-Stopcenters and local boards, and membersof the community according toprocedures established by the Secretary.(WIA sec. 153(a).)

(c) Each Job Corps center mustimplement an active communityrelations program.

(d) Each Job Corps center mustestablish an industry advisory council,according to procedures established bythe Secretary. The industry advisorycouncil must include:

(1) Distant and local employers;(2) Representatives of labor

organizations (where present) andemployees; and

(3) Job Corps students and graduates.(e) A majority of the council members

must be local and distant businessowners, chief executives or chiefoperating officers of nongovernmentalemployers or other private sectoremployers, who have substantialmanagement, hiring or policyresponsibility and who representbusinesses with employmentopportunities in the local area and theareas to which students will return.

(f) The council must work with LocalBoards and must review labor marketinformation to providerecommendations to the Secretaryregarding the center’s vocationaltraining offerings, includingidentification of emerging occupationssuitable for training. (WIAsec.154(b)(1).)

(g) Job Corps is identified as arequired One-Stop partner. Whereverpracticable, Job Corps centers andoperational support contractors mustestablish cooperative relationships andpartnerships with One-Stop centers andother One-Stop partners, Local Boards,and other programs for youth.

Subpart I—Administrative andManagement Provisions

§ 670.900 Are damages caused bystudents eligible for reimbursement underthe Tort Claims Act?

Yes, Students are considered Federalemployees for purposes of the TortClaims Act (28 U.S.C. 2671 et seq.). Ifa student is alleged to be involved in thedamage, loss, or destruction of theproperty of others, or in causingpersonal injury to or the death ofanother individual(s), the injuredperson(s), or their agent may file a claimwith the Center Director. The Directormust investigate all of the facts,including accident and medical reports,and interview witnesses, and submit theclaim for a decision to the RegionalSolicitor’s Office. All tort claims for$25,000 or more must be sent to theAssociate Solicitor for EmployeeBenefits, U.S. Department of Labor, 200Constitution Avenue, N.W.,Washington, DC 20210.

§ 670.905 Are damages that occur toprivate parties at Job Corps Centers eligiblefor reimbursement under the Tort ClaimsAct?

(a) Whenever there is loss or damageto persons or property, which isbelieved to have resulted from operationof a Job Corps center and to be a propercharge against the Federal Government,the owner(s) of the property, the injuredperson(s), or their agent may submit aclaim for the damage to the RegionalSolicitor. Claims must be filed no laterthan two years from the date of loss ordamage. The Regional Solicitor willdetermine if the claim is valid under theTort Claims Act. If the RegionalSolicitor determines a claim is not validunder the Tort Claims Act, the RegionalSolicitor must consider the facts andmay still settle the claim, in an amountnot to exceed $1,500.

(b) The Job Corps may pay studentsfor valid claims under the Tort ClaimsAct for lost, damaged, or stolenproperty, up to a maximum amount setby the Secretary, when the loss is notdue to the negligence of the student.Students must file claims no later thansix months from the date of loss.Students are compensated for lossesincluding those that result from anatural disaster or those that occurwhen the student’s property is in theprotective custody of the Job Corps,such as when the student is AWOL.Claims must be filed with Job Corpsregional offices. The regional office willpromptly notify the student and thecenter of its determination.

§ 670.910 Are students entitled to FederalEmployees Compensation Benefits (FECB)?

(a) Job Corps students are consideredFederal employees for purposes of theFederal Employees Compensation Act(FECA). (WIA sec. 157(a)(3).)

(b) Job Corps students may be entitledto Federal Employees CompensationBenefits as specified in WIA section157.

(c) Job Corps students must meet thesame eligibility tests for FECA paymentsthat apply to all other Federalemployees. One of those tests is that theinjury must occur ‘‘in the performanceof duty.’’ This test is described in§ 670.915.

§ 670.915 When are residential studentsconsidered to be in the performance ofduty?

Residential students will beconsidered to be in the ‘‘performance ofduty’’ at all times while:

(a) They are on center under thesupervision and control of Job Corpsofficials;

(b) They are engaged in anyauthorized Job Corps activity;



(c) They are in authorized travelstatus; or

(d) They are engaged in anyauthorized offsite activity.

§ 670.920 When are non-resident studentsconsidered to be in the performance ofduty?

Non-resident students are considered‘‘in performance of duty’’ as Federalemployees when they are engaged inany authorized Job Corps activity, fromthe time they arrive at any scheduledcenter activity until they leave theactivity. The standard rules governingcoverage of Federal employees duringtravel to and from work apply. Theserules are described in guidance issuedby the Secretary.

§ 670.925 When are students consideredto be not in the performance of duty?

Students are considered to be not inthe performance of duty when:

(a) They are AWOL;(b) They are at home, whether on pass

or on leave(c) They are engaged in an

unauthorized offsite activity; or(d) They are injured or ill due to their

own:(1) Willful misconduct;(2) Intent to cause injury or death to

oneself or another; or(3) Intoxication or illegal use of drugs.

§ 670.930 How are FECA benefitscomputed?

(a) FECA benefits for disability ordeath are computed using the entrancesalary for a grade GS–2 as the student’smonthly pay.

(b) The provisions of 5 U.S.C. 8113 (a)and (b), relating to compensation forwork injuries apply to students.Compensation for disability will notbegin to accrue until the day followingthe date on which the injured studentcompletes his or her Job Corpsseparation.

(c) Whenever a student is injured,develops an occupationally relatedillness, or dies while in the performanceof duty, the procedures in the DOLEmployment Standards Administrationregulations, at 20 CFR Chapter 1, mustbe followed. A thorough investigation ofthe circumstances and a medicalevaluation must be completed andrequired forms must be timely filed bythe center operator with the DOL Officeof Workers’ Compensation Programs.

§ 670.935 How are students protected fromunsafe or unhealthy situations?

(a) The Secretary establishesprocedures to ensure that students arenot required or permitted to work, betrained, reside in, or receive services inbuildings or surroundings or under

conditions that are unsanitary orhazardous. Whenever students areemployed or in training for jobs, theymust be assigned only to jobs or trainingwhich observe applicable Federal, Stateand local health and safety standards.

(b) The Secretary develops proceduresto ensure compliance with applicableDOL Occupational Safety and HealthAdministration regulations.

§ 670.940 What are the requirements forcriminal law enforcement jurisdiction oncenter property?

(a) All Job Corps property whichwould otherwise be under exclusiveFederal legislative jurisdiction isconsidered under concurrentjurisdiction with the appropriate Stateand locality with respect to criminal lawenforcement. Concurrent jurisdictionextends to all portions of the property,including housing and recreationalfacilities, in addition to the portions ofthe property used for education andtraining activities.

(b) Centers located on property underconcurrent Federal-State jurisdictionmust establish agreements with Federal,State and local law enforcementagencies to enforce criminal laws.

(c) The Secretary develops proceduresto ensure that any searches of astudent’s person, personal area orbelongings for unauthorized goodsfollow applicable right-to-privacy laws.

§ 670.945 Are Job Corps operators andservice providers authorized to pay State orlocal taxes on gross receipts?

(a) A private for-profit or a nonprofitJob Corps service provider is not liable,directly or indirectly, to any State orsubdivision for any gross receipts taxes,business privilege taxes measured bygross receipts, or any similar taxes inconnection with any payments made toor by such service provider for operatinga center or other Job Corps program oractivity. The service provider is notliable to any State or subdivision tocollect or pay any sales, excise, use, orsimilar tax imposed upon the sale to oruse by such deliverer of any property,service, or other item in connectionwith the operation of a center or otherJob Corps program or activity. (WIA sec.158(d).)

(b) If a State or local authoritycompels a center operator or otherservice provider to pay such taxes, thecenter operator or service provider maypay the taxes with Federal funds, butmust document and report the State orlocal requirement according toprocedures issued by the Secretary.

§ 670.950 What are the financialmanagement responsibilities of Job Corpscenter operators and other serviceproviders?

(a) Center operators and other serviceproviders must manage Job Corps fundsusing financial management informationsystems that meet the specifications andrequirements of the Secretary.

(b) These financial managementsystems must:

(1) Provide accurate, complete, andcurrent disclosures of the costs of theirJob Corps activities;

(2) Ensure that expenditures of fundsare necessary, reasonable, allocable andallowable in accordance with applicablecost principles;

(3) Use account structures specifiedby the Secretary;

(4) Ensure the ability to comply withcost reporting requirements andprocedures issued by the Secretary; and

(5) Maintain sufficient cost data foreffective planning, monitoring, andevaluation of program activities and fordetermining the allowability of reportedcosts.

§ 670.955 Are center operators and serviceproviders subject to Federal audits?

(a) Yes, Center operators and serviceproviders are subject to Federal audits.

(b) The Secretary arranges for thesurvey, audit, or evaluation of each JobCorps center and service provider atleast once every three years, by Federalauditors or independent publicaccountants. The Secretary may arrangefor more frequent audits. (WIA sec.159(b)(2).)

(c) Center operators and other serviceproviders are responsible for giving fullcooperation and access to books,documents, papers and records to dulyappointed Federal auditors andevaluators. (WIA sec. 159(b)(1).)

§ 670.960 What are the procedures formanagement of student records?

The Secretary issues guidelines for asystem for maintaining records for eachstudent during enrollment and fordisposition of such records afterseparation.

§ 670.965 What procedures apply todisclosure of information about Job Corpsstudents and program activities?

(a) The Secretary develops proceduresto respond to requests for information orrecords or other necessary disclosurespertaining to students.

(b) DOL disclosure of Job Corpsinformation must be handled accordingto the Freedom of Information Act andaccording to DOL regulations at 29 CFRpart 70.

(c) Job Corps contractors are not‘‘agencies’’ for Freedom of Information



Act purposes. Therefore, their recordsare not subject to disclosure under theFreedom of Information Act or 29 CFRpart 70.

(d) The regulations at 29 CFR part 71apply to a system of records covered bythe Privacy Act of 1974 maintained byDOL or to a similar system maintainedby a contractor, such as a screeningagency, contract center operator, orplacement agency on behalf of the JobCorps.

§ 670.970 What are the reportingrequirements for center operators andoperational support service providers?

The Secretary establishes proceduresto ensure the timely and completereporting of necessary financial andprogram information to maintainaccountability. Center operators andoperational support service providersare responsible for the accuracy andintegrity of all reports and data theyprovide.

§ 670.975 How is the performance of theJob Corps program assessed?

The performance of the Job Corpsprogram as a whole, and theperformance of individual programcomponents, is assessed on an ongoingbasis, in accordance with theregulations in this part and proceduresand standards, including a nationalperformance measurement system,issued by the Secretary. Annualperformance assessments are done foreach center operator and other serviceproviders, including screening andadmissions and placement agencies.

§ 670.980 What are the indicators ofperformance for Job Corps?

(a) At a minimum, the performanceassessment system established under§ 670.975 will include expected levelsof performance established for each ofthe indicators of performance containedin WIA section 159(c). These are:

(1) The number of graduates and rateof graduation, analyzed by the type ofvocational training received and thetraining provider;

(2) The job placement rate ofgraduates into unsubsidizedemployment, analyzed by the vocationaltraining received, whether or not the jobplacement is related to the trainingreceived, the vocational trainingprovider, and whether the placement ismade by a local or national serviceprovider;

(3) The average placement wage ofgraduates in training-related and non-training related unsubsidized jobs;

(4) The average wage of graduates onthe first day of employment and at 6 and12 months following placement,

analyzed by the type of vocationaltraining received;

(5) The number of and retention rateof graduates in unsubsidizedemployment after 6 and 12 months;

(6) The number of graduates whoentered unsubsidized employment for32 hours per week or more, for 20 to 32hours per week, and for less than 20hours per week.

(7) The number of graduates placed inhigher education or advanced training;and

(8) The number of graduates whoattained job readiness and employmentskills.

(b) The Secretary issues the expectedlevels of performance for each indicator.To the extent practicable, the levels ofperformance will be continuous andconsistent from year to year.

§ 670.985 What happens if a centeroperator, screening and admissionscontractor or other service provider fails tomeet the expected levels of performance?

(a) The Secretary takes appropriateaction to address performance issuesthrough a specific performance plan.

(b) The plan may include thefollowing actions:

(1) Providing technical assistance to aJob Corps center operator or supportservice provider, including a screeningand admissions contractor;

(2) Changing the management staff ofa center;

(3) Changing the vocational trainingoffered at a center;

(4) Contracting out or recompeting thecontract for a center or operationalsupport service provider;

(5) Reducing the capacity of a JobCorps center;

(6) Relocating a Job Corps center; or(7) Closing a Job Corps center. (WIA

sec. 159 (f).)

§ 670.990 What procedures are available toresolve complaints and disputes?

(a) Each Job Corps center operator andservice provider must establish andmaintain a grievance procedure forfiling complaints and resolving disputesfrom applicants, students and/or otherinterested parties about its programsand activities. A hearing on eachcomplaint or dispute must be conductedwithin 30 days of the filing of thecomplaint or dispute. A decision on thecomplaint must be made by the centeroperator or service provider, asappropriate, within 60 days after thefiling of the complaint, and a copy ofthe decision must be immediatelyserved, by first-class mail, on thecomplainant and any other party to thecomplaint. Except for complaints under§ 670.470 or complaints alleging fraud

or other criminal activity, complaintsmay be filed within one year of theoccurrence that led to the complaint.

(b) The procedure established underparagraph (a) of this section mustinclude procedures to processcomplaints alleging violations of WIAsection 188, consistent with DOLnondiscrimination regulationsimplementing WIA section 188 at 29CFR part 37 and § 670.995.

§ 670.991 How does Job Corps ensure thatcomplaints or disputes are resolved in atimely fashion?

(a) If a complaint is not resolved bythe center operator or service providerin the time frames described in§ 670.990, the person making thecomplaint may request that the RegionalDirector determine whether reasonablecause exists to believe that the Act orregulations for this part of the Act havebeen violated. The request must be filedwith the Regional Director within 60days from the date that the centeroperator or service provider should haveissued the decision.

(b) Following the receipt of a requestfor review under paragraph (a) of thissection, the Regional Director mustdetermine within 60 days whether therehas been a violation of the Act or theWIA regulations. If the RegionalDirector determines that there has beena violation of the Act or Regulations,(s)he may direct the operator or serviceprovider to remedy the violation ordirect the service provider to issue adecision to resolve the disputeaccording to the service provider’sgrievance procedures. If the serviceprovider does not comply with theRegional Director’s decision within 30days, the Regional Director may imposea sanction on the center operator orservice provider for violating the Act orregulations, and/or for failing to issue adecision. Decisions imposing sanctionsupon a center operator or serviceprovider may be appealed to the DOLOffice of Administrative Law Judgesunder 20 CFR 667.800 or 667.840.

§ 670.992 How does Job Corps ensure thatcenters or other service providers complywith the Act and the WIA regulations?

(a) If DOL receives a complaint or hasreason to believe that a center or otherservice provider is failing to complywith the requirements of the Act orregulations, the Regional Director mustinvestigate the allegation and determinewithin 90 days after receiving thecomplaint or otherwise learning of thealleged violation, whether suchallegation or complaint is true.

(b) As a result of such adetermination, the Regional Directormay:



(1) Direct the center operator orservice provider to handle a complaintthrough the grievance proceduresestablished under § 670.990; or

(2) Investigate and determine whetherthe center operator or service provideris in compliance with the Act andregulations. If the Regional Directordetermines that the center or serviceprovider is not in compliance with theAct or regulations, the Regional Directormay take action to resolve the complaintunder § 670.991(b), or will report theincident to the DOL Office of theInspector General, as described in 20CFR 667.630.

§ 670.993 How does Job Corps ensure thatcontract disputes will be resolved?

A dispute between DOL and a JobCorps contractor will be handledaccording to the Contract Disputes Actand applicable regulations.

§ 670.994 How does Job Corps resolvedisputes between DOL and other FederalAgencies?

Disputes between DOL and a FederalAgency operating a center will behandled according to the interagencyagreement with the agency which isoperating the center.

§ 670.995 What DOL equal opportunity andnondiscrimination regulations apply to JobCorps?

Nondiscrimination requirements,procedures, complaint processing, andcompliance reviews are governed by, asapplicable, provisions of the followingDepartment of Labor regulations:

(a) Regulations implementing WIAsection 188 for programs receivingFederal financial assistance under WIAfound at 29 CFR part 37.

(b) 29 CFR part 33 for programsconducted by the Department of Labor;and

(c) 41 CFR Chapter 60 for entities thathave a Federal government contract.

PART 671—NATIONAL EMERGENCYGRANTS FOR DISLOCATEDWORKERS

Sec.671.100 What is the purpose of national

emergency grants under WIA section173?

671.105 What funds are available fornational emergency grants?

671.110 What are major economicdislocations or other events which mayqualify for a national emergency grant?

671.120 Who is eligible to apply fornational emergency grants?

671.125 What are the requirements forsubmitting applications for nationalemergency grants?

671.130 When should applications fornational emergency grants be submittedto the Department?

671.140 What are the allowable activitiesand what dislocated workers may beserved under national emergency grants?

671.150 How do statutory and workflexwaivers apply to national emergencygrants?

671.160 What rapid response activities arerequired before a national emergencygrant application is submitted?

671.170 What are the program andadministrative requirements that applyto national emergency grants?


§ 671.100 What is the purpose of nationalemergency grants under WIA section 173?

The purpose of national emergencygrants is to provide supplementaldislocated worker funds to States, LocalBoards and other eligible entities inorder to respond to the needs ofdislocated workers and communitiesaffected by major economic dislocationsand other worker dislocation eventswhich cannot be met with formulaallotments.

§ 671.105 What funds are available fornational emergency grants?

We use funds reserved under WIAsection 132(a)(2)(A) to provide financialassistance to eligible applicant for grantsunder WIA section 173.

§ 671.110 What are major economicdislocations or other events which mayqualify for a national emergency grant?

These include:(a) Plant closures;(b) Mass layoffs affecting 50 or more

workers at a single site of employment;(c) Closures and realignments of

military installations;(d) Multiple layoffs in a single local

community that have significantlyincreased the total number ofunemployed individuals in acommunity;

(e) Emergencies or natural disasters,as defined in paragraphs (1) and (2)respectively, of section 102 of the RobertT. Stafford Disaster Relief andEmergency Assistance Act (42 U.S.C.5122(1) and (2)) which have beendeclared eligible for public assistance bythe Federal Emergency ManagementAgency (FEMA); and

(f) Other events, as determined by theSecretary.

§ 671.120 Who is eligible to apply fornational emergency grants?

(a) For projects within a State. A State,a Local Board or another entitydetermined to be appropriate by theGovernor of the State in which theproject is located may apply for anational emergency grant. Also, Indiantribes, tribal organizations, AlaskaNative entities, Indian-controlled

organizations serving Indians, or NativeHawaiian organizations which arerecipients of funds under section 166 ofthe Act (Indian and Native AmericanPrograms) may apply for a nationalemergency grant.

(b) For inter-State projects. Consortiaof States and/or Local Boards mayapply. Other private entities which candemonstrate, in the application forassistance, that they possess uniquecapabilities to effectively respond to thecircumstances of the major economicdislocation(s) covered in the applicationmay apply.

(c) Other entities. The Secretary mayconsider applications from otherentities, to ensure that appropriateassistance is provided in response tomajor economic dislocations.

§ 671.125 What are the requirements forsubmitting applications for nationalemergency grants?

We publish instructions forsubmitting applications for NationalEmergency Grants in the FederalRegister. The instructions specifyapplication procedures, selectioncriteria and the approval process.

§ 671.130 When should applications fornational emergency grants be submitted tothe Department?

(a) Applications for nationalemergency grants to respond to masslayoffs and plant closures may besubmitted to the Department as soon as:

(1) The State receives a notification ofa mass layoff or a closure as a result ofa WARN notice, a generalannouncement or some other meansdetermined by the Governor to besufficient to respond;

(2) Rapid response assistance hasbeen initiated; and

(3) A determination has been made, incollaboration with the applicable LocalBoard(s) and chief elected official(s),that State and local formula dislocatedworker funds are inadequate to providethe level of services needed by theworkers being laid off.

(b) An eligible entity may apply for anational emergency grant at any timeduring the year.

(c) Applications for nationalemergency grants to respond to adeclared emergency or natural disasteras described in § 671.110(e), cannot beconsidered until FEMA has declaredthat the affected area is eligible fordisaster-related public assistance.

§ 671.140 What are the allowable activitiesand what dislocated workers may be servedunder national emergency grants?

(a) National emergency grants mayprovide adjustment assistance for



eligible dislocated workers, described atWIA section 173(c)(2) or (d)(2).

(b) Adjustment assistance includesthe core, intensive, and training servicesauthorized at WIA sections 134(d) and173. The scope of services to beprovided in a particular project arenegotiated between the Department andthe grantee, taking into account theneeds of the target population coveredby the grant. The scope of services maybe changed through grant modifications,if necessary.

(c) National emergency grants mayprovide for supportive services to helpworkers who require such assistance toparticipate in activities provided for inthe grant. Needs-related payments, insupport of other employment andtraining assistance, may be available forthe purpose of enabling dislocatedworkers who are eligible for suchpayments to participate in programs oftraining services. Generally, the terms ofa grant must be consistent with LocalBoard policies governing such financialassistance with formula funds(including the payment levels andduration of payments). However, theterms of the grant agreement maydiverge from established Local Boardpolicies, in the following instances:

(1) If unemployed dislocated workersserved by the project are not able tomeet the 13 or 8 weeks enrollment intraining requirement at WIA section134(e)(3)(B) because of the lack offormula or emergency grant funds in theState or local area at the time ofdislocation, such individuals may beeligible for needs-related payments ifthey are enrolled in training by the endof the 6th week following the date of theemergency grant award;

(2) Trade-impacted workers who arenot eligible for trade readjustmentassistance under NAFTA–TAA may beeligible for needs-related paymentsunder a national emergency grant if theworker is enrolled in training by the endof the 16th week following layoff; and

(3) Under other circumstances asspecified in the national emergencygrant application guidelines.

(d) A national emergency grant torespond to a declared emergency ornatural disaster, as defined at§ 671.110(e), may provide short-termdisaster relief employment for:

(1) Individuals who are temporarily orpermanently laid off as a consequenceof the disaster;

(2) Dislocated workers; and(3) Long-term unemployed

individuals.(e) Temporary employment assistance

is authorized on disaster projects thatprovide food, clothing, shelter and otherhumanitarian assistance for disaster

victims; and on projects that performdemolition, cleaning, repair, renovationand reconstruction of damaged anddestroyed structures, facilities and landslocated within the disaster area. Forsuch temporary jobs, each eligibleworker is limited to no more than sixmonths of employment for each singledisaster. The amounts, duration andother limitations on wages will benegotiated for each grant.

(f) Additional requirements that applyto national emergency grants, includingnatural disaster grants, are contained inthe application instructions.

§ 671.150 How do statutory and workflexwaivers apply to national emergencygrants?

(a) State and Local Board granteesmay request and we may approve theapplication of existing general statutoryor regulatory waivers and workflexwaivers to a National Emergency Grantaward. The application for grant fundsmust describe any statutory waiverswhich the applicant wishes to apply tothe project that the State and/or LocalBoard, as applicable, have been grantedunder its waiver plan, or that the Statehas approved for implementation in theapplicable local area under workflexwaivers. We will consider such requestsas part of the overall application reviewand decision process.

(b) If, during the operation of theproject, the grantee wishes to apply awaiver not identified in the application,the grantee must request a modificationwhich includes the provision to bewaived, the operational barrier to beremoved and the effect upon theoutcome of the project.

§ 671.160 What rapid response activitiesare required before a national emergencygrant application is submitted?

(a) Rapid response is a requiredStatewide activity under WIA section134(a)(2)(A), to be carried out by theState or its designee in collaborationwith the Local Board(s) and chiefelected official(s). Under 20 CFR665.310, rapid response encompasses,among other activities, an assessment ofthe general needs of the affectedworkers and the resources available tothem.

(b) In accordance with nationalemergency grant application guidelinespublished by the Department, eachapplicant must demonstrate that:

(1) The rapid response activitiesdescribed in 20 CFR 665.310 have beeninitiated and carried out, or are in theprocess of being carried out;

(2) State and local funds, includingthose made available under section132(b)(2)(B) of the Act, have been used

to initiate appropriate services to theeligible workers;

(3) There is a need for additionalfunds to effectively respond to theassistance needs of the workers and, inthe case of declared emergencies andnatural disasters, the community; and

(4) The application has beendeveloped by or in conjunction with theLocal Board(s) and chief electedofficial(s) of the local area(s) in whichthe proposed project is to operate.

§ 671.170 What are the program andadministrative requirements that apply tonational emergency grants?

(a) In general, the programrequirements and administrativestandards set forth at 20 CFR parts 663and 667 will apply.

(b) Exceptions include:(1) Funds provided in response to a

natural disaster may be used fortemporary job creation in areas declaredeligible for public assistance by FEMA,subject to the limitations of WIA section173(d), this part and the applicationguidelines issued by the Department;

(2) National emergency grant fundsmay be used to pay an appropriate levelof administrative costs based on thedesign and complexity of the project.We will negotiate administration costswith the applicant as part of theapplication review and grant award andmodification processes;

(3) The period of availability forexpenditure of funds under a nationalemergency grant is specified in the grantagreement.

(4) We may establish supplementalreporting, monitoring and oversightrequirements for national emergencygrants. The requirements will beidentified in the grant applicationinstructions or the grant document.

(5) We may negotiate and fundprojects under terms other than thosespecified in this part where it can beclearly demonstrated that suchadjustments will achieve a greaterpositive benefit for the workers and/orcommunities being assisted.

PART 652—ESTABLISHMENT ANDFUNCTIONING OF STATEEMPLOYMENT SERVICES

1. The authority citation for part 652continues to read as follows:

Authority: 29 U.S.C. 49k.

2. The subpart heading to subpart Ais revised to read as follows:



Subpart A—Employment ServiceOperations.

§ 652.1 [Amended]3. In § 652.1, the definition of State

Job Training Coordinating Council(SJTCC) is removed.

4. Section 652.5 is revised to read asfollows:

§ 652.5 Services authorized.The sums allotted to each State under

section 6 of the Act must be expendedconsistent with an approved plan under20 CFR 661.220 through 661.240 and§§ 652.211 through 652.214. At aminimum, each State shall provide thebasic labor exchange elements at§ 652.3.

5. Section 652.8 is amended asfollows:

a. in paragraph (a) remove the citation‘‘41 CFR part 29–70’’ and add in itsplace the citation ‘‘29 CFR part 97,Uniform Administrative Requirementsfor Grants and Cooperative Agreementsto State and Local Governments,’’, andremove the citation ‘‘41 CFR. part 1–15.7’’ and add in its place the citation‘‘OMB Circular A–87 (Revised)’’.;

b. in paragraph (d)(2) remove thecitation ‘‘41 CFR part 29–70’’ and addin its place the citation ‘‘29 CFR part 97,Uniform Administrative Requirementsfor Grants and Cooperative Agreementsto State and Local Governments,’’, andremove the citation ‘‘41 CFR 1–15.7’’and add in its place the citation ‘‘OMBCircular A–87 (Revised)’’, and removethe citation ‘‘41 CFR 29–70.215’’ andadd in its place the citation ‘‘29 CFR97.32(g)’;

c. in paragraph (d)(6) introductorytext, remove the citation ‘‘41 CFR 1–15.711–13 and 711–10’’ and add in itsplace the citation ‘‘OMB Circular A–87(Revised)’’;

d. in paragraph (d)(6)(ii) remove thecitation ‘‘41 CFR 1–15.711–13 and 711–10’’ and add in its place the citation‘‘OMB Circular A–87 (Revised)’’;

e. in paragraph (d)(6)(iii) remove thecitation ‘‘41 CFR 1–15.711–13 and 1–15.711–10’’ and add in its place thecitation ‘‘OMB Circular A–87(Revised)’’;

f. in paragraph (d)(6)(iv) remove thecitation ‘‘41 CFR 1–15.711–13 and 1–15.711–10’’ and add in its place thecitation ‘‘OMB Circular A–87(Revised)’’;

g. in paragraph (j)(4) remove thecitation ‘‘29 CFR parts 1627 and 32’’ andadd in its place the citation ‘‘29 CFRpart 32 and 29 CFR 1627.3(b)(iv).’’

h. paragraph (j)(1) is revised to read asfollows:

§ 652.8 Administrative provisions.* * * * *

(j) * * *(1) Assure that no individual be

excluded from participation in, deniedthe benefits of, subjected todiscrimination under, or deniedemployment in the administration or inconnection with any services oractivities authorized under the Act inviolation of any applicablenondiscrimination law, including lawsprohibiting discrimination on the basisof age, race, sex, color, religion, nationalorigin, disability, political affiliation orbelief. All complaints allegingdiscrimination shall be filed andprocessed according to the proceduresin the applicable DOLnondiscrimination regulations.* * * * *

6. Subpart C is revised to read asfollows:

Subpart C—Wagner-Peyser ActServices in a One-Stop DeliverySystem Environment

Sec.652.200 What is the purpose of this

subpart?652.201 What is the role of the State agency

in the One-Stop delivery system?652.202 May local Employment Service

Offices exist outside of the One-Stopservice delivery system?

652.203 Who is responsible for fundsauthorized under the Act in theworkforce investment system?

652.204 Must funds authorized undersection 7(b) of the Act (the Governor’sreserve) flow through the One-Stopdelivery system?

652.205 May funds authorized under theAct be used to supplement funding forlabor exchange programs authorizedunder separate legislation?

652.206 May a State use funds authorizedunder the Act to provide ‘‘core services’’and ‘‘intensive services’’ as defined inWIA?

652.207 How does a State meet therequirement for universal access toservices provided under the Act?

652.208 How are core services andintensive services related to the methodsof service delivery described in§ 652.207(b)(2)?

652.209 What are the requirements underthe Act for providing reemploymentservices and other activities to referredUI claimants?

652.210 What are the Act’s requirements foradministration of the work test andassistance to UI claimants?

652.211 What are State planningrequirements under the Act?

652.212 When should a State submitmodifications to the five-year plan?

652.213 What information must a Stateinclude when the plan is modified?

652.214 How often may a State submitmodifications to the plan?

652.215 Do any provisions in WIA changethe requirement that State merit-staff

employees must deliver servicesprovided under the Act?

652.216 May the One-Stop operator provideguidance to State merit-staff employeesin accordance with the Act?

Subpart C—Wagner-Peyser ActServices in a One-Stop DeliverySystem Environment

§ 652.200 What is the purpose of thissubpart?

(a) This subpart provides guidance toStates to implement the servicesprovided under the Act, as amended byWIA, in a One-Stop delivery systemenvironment.

(b) Except as otherwise provided, thedefinitions contained at subpart A ofthis part and section 2 of the Act applyto this subpart.

§ 652.201 What is the role of the Stateagency in the One-Stop delivery system?

(a) The role of the State agency in theOne-Stop delivery system is to ensurethe delivery of services authorizedunder section 7(a) of the Act. The Stateagency is a required One-Stop partner ineach local One-Stop delivery systemand is subject to the provisions relatingto such partners that are described at 20CFR part 662.

(b) Consistent with those provisions,the State agency must:

(1) Participate in the One-Stopdelivery system in accordance withsection 7(e) of the Act;

(2) Be represented on the WorkforceInvestment Boards that oversee the localand State One-Stop delivery system andbe a party to the Memorandum ofUnderstanding, described at 20 CFR662.300, addressing the operation of theOne-Stop delivery system; and

(3) Provide these services as part ofthe One-Stop delivery system.

§ 652.202 May local Employment ServiceOffices exist outside of the One-Stopservice delivery system?

(a) No, local Employment ServiceOffices may not exist outside of theOne-Stop service delivery system.

(b) However, local EmploymentService Offices may operate as affiliatedsites, or through electronically ortechnologically linked access points aspart of the One-Stop delivery system,provided the following conditions aremet:

(1) All labor exchange services aredelivered as a part of the local One-Stopdelivery system in accordance withsection 7(e) of the Act and § 652.207(b);

(2) The services described inparagraph (b)(1) of this section areavailable in at least one comprehensivephysical center, as specified in 20 CFR662.100, from which job seekers andemployers can access them; and



(3) The Memorandum ofUnderstanding between the State agencylocal One-Stop partner and the LocalWorkforce Investment Board meets therequirements of 20 CFR 662.300.

§ 652.203 Who is responsible for fundsauthorized under the Act in the workforceinvestment system?

The State agency retainsresponsibility for all funds authorizedunder the Act, including those fundsauthorized under section 7(a) requiredfor providing the services and activitiesdelivered as part of the One-Stopdelivery system.

§ 652.204 Must funds authorized undersection 7(b) of the Act (the Governor’sreserve) flow through the One-Stop deliverysystem?

No, these funds are reserved for useby the Governor for the three categoriesof activities specified in section 7(b) ofthe Act. However, these funds may flowthrough the One-Stop delivery system.

§ 652.205 May funds authorized under theAct be used to supplement funding forlabor exchange programs authorized underseparate legislation?

(a) Section 7(c) of the Act enablesStates to use funds authorized undersections 7(a) or 7(b) of the Act tosupplement funding of any workforceactivity carried out under WIA.

(b) Funds authorized under the Actmay be used under section 7(c) toprovide additional funding to otheractivities authorized under WIA if:

(1) The activity meets therequirements of the Act, and its ownrequirements;

(2) The activity serves the sameindividuals as are served under the Act;

(3) The activity provides services thatare coordinated with services under theAct; and

(4) The funds supplement, rather thansupplant, funds provided from non-Federal sources.

§ 652.206 May a State use fundsauthorized under the Act to provide ‘‘coreservices’’ and ‘‘intensive services’’ asdefined in WIA?

Yes, funds authorized under section7(a) of the Act must be used to providecore services, as defined at section134(d)(2) of WIA and discussed at 20CFR 663.150, and may be used toprovide intensive services as defined atWIA section 134(d)(3)(C) and discussedat 20 CFR 663.200. Funds authorizedunder section 7(b) of the Act may beused to provide core or intensiveservices. Core and intensive servicesmust be provided consistent with therequirements of the Act.

§ 652.207 How does a State meet therequirement for universal access toservices provided under the Act?

(a) A State has discretion in how itmeets the requirement for universalaccess to services provided under theAct. In exercising this discretion, a Statemust meet the Act’s requirements.

(b) These requirements are:(1) Labor exchange services must be

available to all employers and jobseekers, including unemploymentinsurance (UI) claimants, veterans,migrant and seasonal farmworkers, andindividuals with disabilities;

(2) The State must have the capacityto deliver labor exchange services toemployers and job seekers, as describedin the Act, on a Statewide basis through:

(i) Self-service;(ii) Facilitated self-help service; and(iii) Staff-assisted service;(3) In each local workforce investment

area, in at least one comprehensivephysical center, staff funded under theAct must provide core and applicableintensive services including staff-assisted labor exchange services; and

(4) Those labor exchange servicesprovided under the Act in a localworkforce investment area must bedescribed in the Memorandum ofUnderstanding (MOU).

§ 652.208 How are core services andintensive services related to the methods ofservice delivery described in§ 652.207(b)(2)?

Core services and intensive servicesmay be delivered through any of theapplicable three methods of servicedelivery described in § 652.207(b)(2).These methods are:

(a) Self-service;(b) Facilitated self-help service; and(c) Staff-assisted service.

§ 652.209 What are the requirements underthe Act for providing reemploymentservices and other activities to referred UIclaimants?

(a) In accordance with section 3(c)(3)of the Act, the State agency, as part ofthe One-Stop delivery system, mustprovide reemployment services to UIclaimants for whom such services arerequired as a condition for receipt of UIbenefits. Services must be provided tothe extent that funds are available andmust be appropriate to the needs of UIclaimants who are referred toreemployment services under anyFederal or State UI law.

(b) The State agency must alsoprovide other activities, including:

(1) Coordination of labor exchangeservices with the provision of UIeligibility services as required bysection 5(b)(2) of the Act;

(2) Administration of the work testand provision of job finding and

placement services as required bysection 7(a)(3)(F) of the Act.

§ 652.210 What are the Act’s requirementsfor administration of the work test andassistance to UI claimants?

(a) State UI law or rules establish therequirements under which UI claimantsmust register and search for work inorder to fulfill the UI work testrequirements.

(b) Staff funded under the Act mustassure that:

(1) UI claimants receive the full rangeof labor exchange services availableunder the Act that are necessary andappropriate to facilitate their earliestreturn to work;

(2) UI claimants requiring assistancein seeking work receive the necessaryguidance and counseling to ensure theymake a meaningful and realistic worksearch; and

(3) UI program staff receiveinformation about UI claimants’ abilityor availability for work, or thesuitability of work offered to them.

§ 652.211 What are State planningrequirements under the Act?

The State agency designated toadminister funds authorized under theAct must prepare for submission by theGovernor, the portion of the five-yearState Workforce Investment Plandescribing the delivery of servicesprovided under the Act in accordancewith WIA regulations at 20 CFR661.220. The State Plan must contain adetailed description of services that willbe provided under the Act, which areadequate and reasonably appropriate forcarrying out the provisions of the Act,including the requirements of section8(b) of the Act.

§ 652.212 When should a State submitmodifications to the five-year plan?

(a) A State may submit modificationsto the five-year plan as necessary duringthe five-year period, and must do so inaccordance with the same collaboration,notification, and other requirements thatapply to the original plan. Modificationsare likely to be needed to keep thestrategic plan a viable and livingdocument over its five-year life.

(b) That portion of the planaddressing the Act must be updated toreflect any reorganization of the Stateagency designated to deliver servicesunder the Act, any change in servicedelivery strategy, any change in levels ofperformance when performance goalsare not met, or any change in servicesdelivered by State merit-staffemployees.



§ 652.213 What information must a Stateinclude when the plan is modified?

A State must follow the instructionsfor modifying the strategic five-yearplan in 20 CFR 661.230.

§ 652.214 How often may a State submitmodifications to the plan?

A State may modify its plan, as oftenas needed, as changes occur in Federalor State law or policies, Statewidevision or strategy, or if changes ineconomic conditions occur.

§ 652.215 Do any provisions in WIAchange the requirement that State merit-staff employees must deliver servicesprovided under the Act?

No, the Secretary requires that laborexchange services provided under theauthority of the Act, including servicesto veterans, be provided by State merit-

staff employees. This interpretation isauthorized by and consistent with theprovisions in sections 3(a) and 5(b) ofthe Act and the IntergovernmentalPersonnel Act (42 U.S.C. 4701 et seq.).The Secretary has and has exercised thelegal authority under section 3(a) of theAct to set additional staffing standardsand requirements and to conductdemonstrations to ensure the effectivedelivery of services provided under theAct. No additional demonstrations willbe authorized.

§ 652.216 May the One-Stop operatorprovide guidance to State merit-staffemployees in accordance with the Act?

Yes, the One-Stop delivery systemenvisions a partnership in whichWagner-Peyser Act labor exchangeservices are coordinated with otheractivities provided by other partners in

a One-Stop setting. As part of the localMemorandum of Understanding, theState agency, as a One-Stop partner,may agree to have staff receive guidancefrom the One-Stop operator regardingthe provision of labor exchange services.Personnel matters, includingcompensation, personnel actions, termsand conditions of employment,performance appraisals, andaccountability of State merit-staffemployees funded under the Act,remain under the authority of the Stateagency. The guidance given toemployees must be consistent with theprovisions of the Act, the localMemorandum of Understanding, andapplicable collective bargainingagreements.

[FR Doc. 00–19985 Filed 8–10–00; 8:45 am]BILLING CODE 4510–30–P


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