[Federal Register Volume 78, Number 47 (Monday, March 11, 2013)]
[Rules and Regulations]
[Pages 15283-15292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05345]
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DEPARTMENT OF LABOR
Veterans' Employment and Training Service
20 CFR Part 1001
RIN 1293-AA18
Uniform National Threshold Entered Employment Rate for Veterans
AGENCY: Veterans' Employment and Training Service, Labor.
ACTION: Final rule.
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SUMMARY: The purpose of this Final Rule is to establish the uniform
national threshold entered employment rate (UNTEER) for veterans, as
required of the Secretary in 38 U.S.C. 4102A(c)(3)(B), for use in
evaluating States' performance in assisting veterans to meet their
employment needs. The Final Rule also explains how the threshold will
be used in the process of identifying those States to be reviewed by
comparing the actual entered employment rate (EER) achieved for
veterans with the threshold EER, and it identifies certain factors, in
addition to the threshold, that will be included in the Department's
review to determine whether an EER below the threshold reflects a
deficiency in the State's performance, or is attributable to other
factors beyond the State's control. Finally, in those cases in which a
State's EER is determined to reflect a deficiency in a State's
performance, this Final Rule identifies the procedure for the
submission and review of a corrective action plan (CAP), the delivery
of technical assistance (TA), and the initiation of the necessary steps
to implement corrective actions to improve the State's performance in
assisting veterans to meet their employment needs.
DATES: Effective Date: The Final Rule will become effective on May 10,
2013.
FOR FURTHER INFORMATION CONTACT: Ruth Samardick, Director, Office of
[[Page 15284]]
National Programs, Veterans' Employment and Training Service, U.S.
Department of Labor, 200 Constitution Avenue NW., Room S-1325,
Washington, DC 20210, [email protected], (202) 693-4700 (this is
not a toll-free number) or (202) 693-4760 (TTY/TDD).
SUPPLEMENTARY INFORMATION: This preamble contains three sections.
Section I provides general background information on the development of
the Final Rule. Section II discusses the comments received on the
Notice of Proposed Rulemaking (NPRM) and the related regulatory
provisions included in the Final Rule. Section III addresses the
administrative requirements for the Final Rule, as mandated by statute
and executive order.
I. Background
On February 18, 2011, the Department published a Notice of Proposed
Rulemaking (NPRM, 76 FR 9517) proposing a Rule to implement a uniform
national threshold entered employment rate for veterans applicable to
State employment service delivery systems. We undertook this Rulemaking
in accordance with 38 U.S.C. 4102A(c)(3)(B) (as enacted by the Jobs for
Veterans Act) which requires the Department to establish that threshold
rate by regulation. All comments received during the comment period
were posted on www.regulations.gov.
The Jobs for Veterans Act (JVA), Public Law 107-288, was signed
into law November 7, 2002. Section 4(a)(1) of the JVA amended 38 U.S.C.
4102A to require that the Secretary of Labor ''establish, and update as
appropriate, a comprehensive performance accountability system (as
described in subsection (f)) and carry out annual performance reviews
of veterans employment, training, and placement services provided
through employment service delivery systems, including through Disabled
Veterans' Outreach Program specialists and through Local Veterans'
Employment Representatives in States receiving grants, contracts, or
awards under this chapter.'' 38 U.S.C. 4102A(b)(7).
Section 4102A(f) requires the establishment of performance
standards and outcome measures to measure the performance of State
employment service delivery systems.
Section 4101(7) of the statute defines ''employment service
delivery system'' to include ''labor exchange services * * * offered in
accordance with the Wagner-Peyser Act.'' We interpret this definition
to include the services delivered through the Wagner-Peyser State
Grants, funded by the Employment and Training Administration (ETA), as
well as the services delivered through the Jobs for Veterans State
Grants (JVSG), funded by the Veterans' Employment and Training Service
(VETS). In addition, we interpret this definition to exclude the
services funded through the Workforce Investment Act of 1998 (WIA)
(Pub. L. 105-220).
Under section 4102A(f), the standards and measures used to assess
performance of veterans' programs must be consistent with State
performance measures applicable under section 136(b) of the WIA. 38
U.S.C. 4102A(f)(2)(A); see also WIA section 136(b) (codified at 29
U.S.C. 2871(b)). The basic standards and measures applied by the
Department to measure performance under WIA are referred to in the
State employment service delivery systems as ``common measures.'' The
current methods of calculating the common measures are specified in
Training and Employment Guidance Letter (TEGL) No.17-05, issued on
February 17, 2006. This TEGL can be accessed at http://wdr.doleta.gov/directives/attach/TEGL17-05.pdf. The common measures for adult
workforce programs include a measure of the rate at which enrollees of
State employment service delivery systems enter employment. This is
referred to as the ``entered employment rate'' or EER. Under the common
measures, there is a comparable EER specifically applicable to veterans
and eligible persons. Application of that measure to all State
employment service delivery systems is implemented each year through
issuance of a Veterans' Program Letter (VPL), most recently VPL 03-11,
issued on June 14, 2011, which established the reporting and
performance measurement requirements for PY 2011. This VPL can be
accessed at: http://www.dol.gov/vets/VPLS/VPLDirectory.html.
In the NPRM it was explained that this regulation establishes a
uniform national threshold only for the EER for veterans and eligible
persons. If we revise the calculation of the standards and measures
applied by the Department to measure performance under WIA or under a
successor program to WIA through issuance of policy guidance, the Final
Rule provides that the revised method of calculating the EER for
veterans and eligible persons will be used in calculating the uniform
national threshold EER. The method of calculating the uniform national
threshold EER for veterans and eligible persons will be specified to
State employment service delivery systems in the annual VPL, as
mentioned above, and in a companion annual Training and Employment
Guidance Letter issued by ETA, such as TEGL No.29-10, ``Negotiating
Performance Goals for the Workforce Investment Act Title 1B Programs
and Wagner-Peyser Act Funded Activities for Program Year (PY) 2011''
issued on June 1, 2011.
As explained in the NPRM, in developing this regulation we also
anticipated that there would be changes to the existing State workforce
agency performance reporting system to accommodate reporting on the
definition of ``veteran'' that applies to the priority of service
provisions of the JVA. The priority of service definition includes any
person who served in the military and was discharged under conditions
other than dishonorable. Section 1001.162 of this Final Rule outlines
how this definition will be phased into operation.
For Sec. 1001.162 in this Rule, we adopted the language proposed
in the NPRM. The language explains that for purposes of this Rule, the
definition of ``veteran'' will be implemented in two stages. Under
Sec. 1001.162(a), starting with the first Program Year that begins
after May 10, 2013, we will implement this Rule using the definition of
``veteran'' that is consistent with the definition of ``eligible
veteran'' that applies to VETS' services provided under 38 U.S.C.
chapter 41. An ``eligible veteran'' is defined as a person who served
on active duty in the military for a period of more than 180 days and
was discharged under conditions other than dishonorable. (The
definition also includes some other smaller group of veterans, for
example, those who were released from active duty because of a service-
connected disability.) Because of the requirement of more than 180 days
of service, the NPRM referred to this definition as the ``more
restrictive'' definition of ``veteran.''
Then, as stated in Sec. 1001.162(b), we will begin to use the less
restrictive priority of service definition of ``veteran'' starting two
Program Years after States are required to begin collecting data under
the Priority of Service regulations. DOL will require States to begin
collecting this data in PY 2012. Therefore, we will begin using the
less restrictive definition of ``veteran'' for purposes of this Rule
beginning PY 2014.
As explained in the NPRM, even when we begin using the less
restrictive definition of ``veteran'' when implementing this Rule,
States will be required to continue collecting data under the more
restrictive definition in addition to collecting data under the
[[Page 15285]]
Priority of Service regulations. This is because the Secretary is
required by 38 U.S.C. 4107(c) to report annually to the Senate and
House Veterans' Affairs Committees on the employment and training
services provided under 38 U.S.C. chapter 41, which are the services
provided to ``eligible veterans'' as defined by the more restrictive
definition.
Section 4102A(c)(3) of Title 38 states that ``(A)(i) As a condition
of a grant or contract under this section for a program year, in the
case of a State that the Secretary determines has an entered employment
rate for veterans that is deficient for the preceding program year, the
State shall develop a Corrective Action Plan (CAP) to improve that rate
for veterans in the State. (ii) The State shall submit the Corrective
Action Plan to the Secretary for approval, and if approved, shall
expeditiously implement the plan. (iii) If the Secretary does not
approve a Corrective Action Plan submitted by the State under clause
(i), the Secretary shall take such steps as may be necessary to
implement corrective actions in the State to improve the entered
employment rate for veterans in that State. (B) To carry out
subparagraph (A), the Secretary shall establish in regulations a
uniform national threshold entered employment rate for veterans for a
program year by which determinations of deficiency may be made under
subparagraph (A). (C) In making a determination with respect to a
deficiency under subparagraph (A), the Secretary shall take into
account the applicable annual unemployment data for the State and
consider other factors, such as prevailing economic conditions, that
affect performance of individuals providing employment, training, and
placement services in the State.''
Section 1001.164 of this Final Rule states that the uniform
national threshold EER for a program year is equal to 90 percent of the
national EER for veterans and eligible persons, which is defined in 20
CFR 1001.163(c).
In the process of establishing the uniform national threshold EER,
before the issuance of the NPRM, we considered a variety of
methodologies and used actual EER results from Program Years 2005
through 2009 in order to test the validity of the methodologies. Our
goal was to establish a uniform national threshold that would meet five
criteria: the threshold should produce reasonable results under varying
economic conditions; the threshold should relate directly to the
national EER because the national EER is the overall program
performance measure related to entered employment rates; the threshold
should identify State agencies whose EERs are demonstrably low; the
threshold methodology should be easily explained and readily grasped;
and the annual threshold-setting process should not conflict with or
introduce confusion into the annual performance goal-setting process
conducted between VETS and each State agency.
We first tried methodologies that essentially compared a State's
current year veterans' EER results with prior years' results, using
straightforward comparisons in one method and comparisons to prior year
averages in another. Those methods involved relatively complex
calculations, and empirical tests with State performance data from
Program Years 2008 and 2009 demonstrated that those methodologies did
not produce reasonable results under the conditions created by the
economic recession experienced during that period.
We then looked at simpler designs for calculating and applying the
uniform national threshold EER. One methodology used the national EER
for the program year before the subject program year as the basis for
calculating the threshold EER. The process would have involved simply
setting the threshold at a particular percentage of the national EER
from the prior year and comparing the State agencies' actual
achievements in the subject program year to that threshold percentage.
However, testing at several different percentage levels indicated that
using the prior year's national EER as the basis for a threshold also
produces unreasonable results in years when there are relatively
unusual declines or upturns in economic conditions.
We then tested and selected a similar one-step methodology using
the national EER for the subject program year as the basis for
calculating the threshold EER. We chose to propose a 90 percent (of the
national EER) level as the threshold for identifying each year those
State agencies to be subject to a review triggered by the UNTEER
because testing of that threshold level most completely satisfies the
five criteria stated above. Testing of higher and lower threshold
levels (e.g., 80 to 95 percent of the national EER) produced results
that in one or more ways failed to satisfy those five criteria stated
above. Setting the threshold at the 80 or 85 percent (of the national
EER) levels apparently would exempt virtually all of the subject State
agencies from the review, year in and year out, despite their
relatively low performance levels. That clearly is not an outcome
compatible with the legislative intent. At the 95 percent level, more
State agencies would be in the cohort subject to the review. But at
that level, moreso than at the 90 percent level, it also is more likely
that the number of State agencies whose statistical under-performance
was attributable primarily to economic factors in the subject program
year, and thus not subject to corrective action planning, would be
increased.
II. Discussion of the Comments and Regulatory Provisions
Summary of Comments
We received eight comments on the NPRM by the close of the comment
period. All comments were carefully reviewed. Of the eight comments,
seven were from organizations with an interest in veterans' employment
services. Of the seven comments from organizations, six were from State
Workforce Agencies, and one was from a State veterans' commission that
is the Jobs for Veterans State grantee in that state. One of the eight
comments was submitted by an individual in his personal capacity; that
person also submitted a comment as an employee of a State Workforce
Agency.
Discussion of Comments
1. Three comments raised objections to the fact that the proposed
uniform national threshold entered employment rate (UNTEER) would not
include the performance data of all Workforce Investment Act-funded
programs for veterans and other eligible persons. They said that WIA
program services, especially WIA-funded training programs, are integral
to the workforce services provided to veterans in the States. The
comments maintained that by excluding WIA performance data, the
threshold will not accurately reflect a State's performance in serving
veterans through its workforce system. Furthermore, one of the comments
stated that the exclusion of WIA would cause the threshold to be less
effective in improving a State's services to veterans. Another comment
stated that in excluding WIA programs from the UNTEER, VETS would miss
the opportunity to improve WIA program performance for veterans. Two of
the comments also stated that not applying the threshold measure as a
performance standard to the overall performance of the workforce
services programs in a State would undermine the priority for veterans
and other covered persons that is supposed to be given by all DOL-
funded employment and training programs.
Response: As was proposed in the NPRM, the UNTEER in the Final Rule
[[Page 15286]]
does not include WIA-funded services. Section 4102A(f)(1) of 38 U.S.C.
requires that VETS establish performance standards to carry out
performance reviews of veterans services provided though State
employment service delivery systems, including services provided
through JVSG staff. Section 4101 defines ``employment service delivery
system'' to mean ``a service delivery system at which or through which
labor exchange services * * * are offered in accordance with the
Wagner-Peyser Act.'' We have interpreted this definition to exclude
WIA-funded services. Section 4102A(f)(2) states that these performance
standards must be consistent with other performance standards and
outcome measures related to services to veterans that are commonly
applied to State Workforce agencies. The Department's common measures
of State agency performance on behalf of veterans (including annual
entered employment rates for each State) apply to the outcomes of
services provided by the veterans' specialists funded by Jobs for
Veterans State Grants and the State agency staff who are supported by
grants authorized by the Wagner-Peyser Act. Therefore it is appropriate
that the UNTEER be calculated from a database that covers the
performance of the JVSG and Wagner-Peyser grant-supported staff only.
Regarding the comments that questioned this Rule's effect on
States' implementation of the priority of service requirements of 38
U.S.C. 4215, we believe that these comments have raised the broader
issue of the need for performance standards for all DOL-funded programs
subject to the priority of service for covered persons requirement.
That issue is separate from the establishment of the uniform national
threshold entered employment rate that is relevant exclusively to
measuring the effectiveness of the services of State agencies that are
recipients of Wagner-Peyser State Grants, and/or Jobs for Veterans
State Grants. Furthermore, the Department currently is working to
implement the requirement in Public Law 112-56, enacted in November
2011, to establish appropriate performance measures related to the
priority of service advantage for veterans and other covered persons.
2. One commenter pointed out that because the proposed UNTEER can
only be calculated at the end of a performance period, the number would
not be known during the annual goal-setting negotiations that take
place between VETS and the State JVSG recipients. The commenter stated
that therefore the annual goal-setting process will be undermined,
because the States would not know the appropriate performance target to
set.
Response: We acknowledge the circumstances cited by the commenter,
but do not believe that the annual goal-setting negotiations will be
undermined by the existence of the UNTEER as it was proposed. The
UNTEER is not intended to be a performance target; rather, it is a
floor-level benchmark, meant to be used in the annual process of
assessing the results of the services that were provided during the
program year. We believe that States and the two DOL agencies involved,
VETS and ETA, will continue to be able to use historical data,
including the national EER and individual State EER data, to formulate
and negotiate reasonable annual performance targets in the future.
Furthermore, because the UNTEER is derived from the aggregate
performance of all of the State employment service agencies, DOL
expects it to be relatively consistent from year to year.
3. Two commenters said that VETS needs to clarify how the proposed
UNTEER would correlate to other annual negotiated performance measures
and numerical targets and the processes for putting those annual
targets in place.
Response: We agree that VETS and ETA will need to provide some
clarifying guidance to the States about how the UNTEER does or does not
affect the annual goal-setting processes for the entered employment
rate common measures required of all JVSG and Wagner-Peyser grantees.
This guidance will be disseminated via administrative directives (such
as Veterans Program Letters by VETS and Training and Employment
Guidance Letters by ETA) and published by those agencies each year.
4. Two commenters stated that due to the data reporting system's
lag time, under the NPRM, there would be no less than a two-year hiatus
between the performance year after which a State may be required to
have a Corrective Action Plan (CAP) and the completion of the CAP
itself, and that the lack of immediacy of the CAP remedy could be
problematic. One of those commenters suggested that any State found
deficient and subject to a CAP should therefore be exempt from the
annual review for EER deficiency during the hiatus, until the CAP is
completed. The other commenter questioned how the two-year time lag
would impact the annual performance negotiations if a State was under a
CAP.
Response: We have not made any changes to the Rule in response to
these comments. While there will be lag time between the program year
that gives rise to a CAP and the completion of the CAP, we believe that
any challenges inherent in the proposed cycle of reviews, CAP
development and imposition, and later determinations of the success of
subject agencies in resolving their deficiencies can and will be
overcome by good faith efforts of the grantor agencies and the State
agencies in behalf of veterans. The review that follows a determination
that a State failed to meet the UNTEER essentially will focus on
whether or not the statistical performance was due to internal policy
or operational flaws that may be correctable, or instead was due to
economic and other external variables beyond a State's control. In the
latter case, no CAP would be called for. The Department's view is that
every situation that requires a Corrective Action Plan is unique, and
therefore every CAP will be unique. Although unique in content, each
CAP would include a diagnosis section that outlines the unique,
specific State agency internal policy and/or operational flaws that
existed in the subject performance year, and a plan section that
outlines the specific corrective actions, with timetables, to remedy
those flaws. It is likely that some corrective actions in each CAP may
take place during the period while the CAP is being developed, or at
various times during the period while the approved CAP is in place, and
thus the lag time between diagnosis and remedy would be reduced from
the two-year time frame cited by the commenter for discrete parts of
the corrective actions.
As for the proposed exemption from the annual reviews to determine
whether or not a CAP should be required, we do not intend to exempt any
State from the reviews. However, should a State agency that is already
under a CAP fail again to attain the UNTEER our review will take into
consideration the relevant facts including progress toward the goals in
the CAP, and we will react appropriately. Later actions could include
continuation of all portions of the original CAP, or modification of
the existing CAP, or creation of an entirely new CAP. Each case would
be unique.
5. One commenter proposed that the first year of application of the
proposed UNTEER and subsequent deficiency reviews be a ``hold
harmless'' year, in which the results would be computed but no remedial
action would be required of any State agency, in order to establish a
baseline for the UNTEER.
Response: We see no need for a ``hold harmless'' period. The
databases in
[[Page 15287]]
which the individual States' entered employment rates reside and from
which the UNTEER is calculated are mature, and the data sets are
considered valid and reliable. In formulating the proposed UNTEER, we
used these databases to predict the results of applying the UNTEER
measure and found that applying the UNTEER as proposed will not lead to
any extreme results. While it is true that the incorporation of the new
definition of veteran into the system will have some impact on the
veterans data, the change is expected to have only a minor impact, not
significant enough to de-stabilize or invalidate the databases.
6. Another commenter stated that the NPRM's allowance of a two-year
delay for developing a data system to capture data on the less
restrictive definition of ``veteran'' (as it is defined for purposes of
priority of service) will likely cause confusion for program staff
since certain veterans will count as veterans for one purpose
(preference in job referrals), but not for the Federal entered
employment performance measure until two years from now.
Response: We have made no changes to the Final Rule in response to
this comment. We realize that at the service delivery level, there may
be some program linkage problems due to the fact that Federal laws do
not provide a uniform definition of the persons who are considered to
be ``veterans'' for all employment and training related programs. Even
when the less restrictive definition of ``veteran'' begins to apply for
purposes of this Rule and for the Priority of Service requirements,
States must continue to also collect data using the more restrictive
definition of ``eligible veteran'' to fulfill the reporting
requirements under 38 U.S.C. chapter 41. That issue can only be
resolved by legislative changes. The reason for the two year time frame
for the changeover to using the data collected under the new definition
is to ensure that those data are accurate and reliable before applying
them in the annual review process.
7. Two commenters addressed the status of the ETA/VETS data
collection and data reporting systems, both encouraging ETA and VETS to
collaborate to make changes necessary to incorporate the new definition
of veteran into the data collection and reporting systems. One of the
two commenters also asked if the Department would provide funding
support to the States for the changes that have to be made.
Response: VETS and ETA are collaborating on the data systems
changes. States will be able to use Federal grant funds to pay for
their costs of implementing the data systems changes.
8. One commenter stated that the potential impact of the proposed
UNTEER would be greater on States with larger veteran populations. To
mitigate this disparate impact, the commenter proposed that the numbers
of certain categories of hard-to-serve veterans (e.g., incarcerated and
homeless veterans) not be included in the entered employment rate
calculations that will be done following implementation of the UNTEER
and related deficiency review processes outlined in this Rule.
Response: We reject removal of any category of veterans or covered
persons from the EER calculations performed under this Rule. There is
no support in VETS' governing statutes for such exclusion, and no
precedent for doing so. The Final Rule retains the single UNTEER to be
applicable to evaluating the performance of States' provision of
services to all veterans and covered persons in the State. However, we
will evaluate State-specific factors during a review for deficiency
under Sec. 1001.166(b)(1) of this Rule.
9. One commenter proposed that the threshold be lowered from the
proposed 90 percent of the national EER to 80 percent of the national
EER, in order ``to standardize reporting'' with the Wagner-Peyser and
WIA programs.
Response: The Uniform National Threshold Entered Employment Rate is
not intended to be viewed or used as the annual ``goal'' or ``target''
entered employment rate for any individual State. The UNTEER does not
serve the same purpose as the ETA and the VETS agencies' EER goal-
setting processes conducted annually with the State agencies, so there
is no reason to make the percentages equal. We expect that State
agencies in the future will continue to participate with VETS and ETA
in negotiating performance goals based primarily on each State agency's
history of performance and economic forecasts for the target year(s),
and additionally, for veterans, the assumption that delivering priority
of service will result in better outcomes for veterans.
10. Three commenters disagreed with the proposal to use the
national EER for veterans as a benchmark embedded into the UNTEER
formula, and suggested instead to use some methodology that would be
more specific to the circumstances of each State, such as comparing
performance to aggregated data derived from certain groupings (e.g., by
size or by other attributes) of State agencies rather than to the
national EER. The comments state that any process for determining
whether or not a State agency's performance is deficient needs to take
into consideration the specific circumstances of state and local
economies and customers' needs.
Response: We agree that we must take into consideration pertinent
information regarding unique circumstances related to any State
agency's performance before making a determination that the State
agency is deficient and must take corrective action on behalf of
veterans. However, we disagree that the method of calculating the
UNTEER must attempt to incorporate the multitude of factors that make
each State agency unique. There are far too many unique factors among
the State agencies affected by this regulation to quantify and
integrate into a viable threshold formula. The Final Rule takes into
account the unique factors related to a State agency's performance
during the review process that will take place for every State that
fails to attain the simple uniform national threshold, as described at
Sec. 1001.166(b).
We formulated and tested many methodologies for the UNTEER that
attempted to create a UNTEER along the lines suggested by these
commenters. All were found to be seriously flawed in some way or
another. For example, one commenter proposed revising the threshold
calculation and subsequent deficiency determination process by dividing
the States into three groups, Small, Medium, and Large (decided by the
number of veteran participants in the State), then calculating at the
end of each program year the EER collectively achieved by each of those
three groups of State agencies. The resultant three group EERs would
serve as the ``uniform national EER for veterans'' to identify the
agencies within each group that would be reviewed.
However, we determined that the concept of lumping States together
by that criterion, or by any other single criterion or group of
criteria (e.g., geographic size, geographic region, number of
independent Workforce Investment Boards, etc) and then creating several
aggregate numerical benchmarks to serve as the threshold is as subject
to criticism about the comparability or non-comparability of the
subject agencies as is the more simple national UNTEER that is being
adopted in this Final Rule. Also, 38 U.S.C. 4102A(c)(3)(B) calls for a
uniform national threshold, so a methodology that effectively creates
multiple different numerical thresholds in any given year is
problematic in that respect.
[[Page 15288]]
We tested other methods of calculating unique ``threshold'' EERs
for each State agency, including comparisons of year-to-year
performance. One method divided the State agencies into two groups
based on comparing each State's EER to the national EER. The method
then compared the State agencies' year-to-year performance, further
dividing State agencies into two groups based on comparing the State's
subject year performance to the average of the State's previous three
years' EERs. Another method compared each agency's performance
percentage of change from the previous year to the national percentage
of change from the previous year. However, there are serious flaws in
each of those relatively complicated methodologies. The empirical
results of testing of each formula with the available, complete State
agency data, i.e., from program years 2005 through 2009, showed that
those formulae failed to produce reasonable results during periods of
sharp economic change such as was experienced in 2008 and 2009.
We have chosen to implement 38 U.S.C. 4102A(c)(3)(B) by
establishing a floor-level EER for veterans below which a State
agency's performance will be subject to a Departmental review to
determine whether that State should be required to take corrective
action to improve its operations on behalf of veterans. We believe that
a simple UNTEER methodology directly related to the aggregate national
workforce services delivery system's actual achievement level is a
reasonable and understandable measure that satisfies the legislation's
requirement for a single measure intended to identify State agencies
potentially in need of corrective action on behalf of veterans.
We also favor the relatively simple to understand UNTEER in this
Final Rule because its simplicity lowers the potential for confusion
and conflict with the annual program goal-setting processes carried on
by both VETS and ETA with the States.
11. The same commenter who recommended creating the three group
threshold approach discussed above also recommended changing the Final
Rule to attach JVSG funding triggers to the results of the comparisons
of the States' EERs to the threshold EER. The commenter proposed that
any State agency that failed to attain the threshold number would
automatically lose 1-3 percent of its JVSG funding, and those States
that exceeded the number would automatically gain an additional 1-3
percent of JVSG funding. The commenter argued that this Rule should not
only focus on corrective action for under-performing State agencies, it
should also provide tangible recognition and rewards for higher
performing State agencies.
Response: We think that this suggestion goes far beyond what the
JVA law intended or authorizes. Section 4102A(c)(3) requires that after
a determination that takes into consideration internal and external
factors that affect performance, State agencies found to be deficient
for the preceding program year must engage in corrective action in
order to receive the next-due JVS grant. The statute does not require
or authorize the Department to adjust grant funding levels simply on
the basis of attainment or non-attainment of the threshold number.
12. Two commenters said that more explanation needs to be given
regarding the reviews that would be done by VETS following a finding
that a State agency's EER is deficient in relation to the UNTEER. One
asked specifically if there is, or will be, a model for analyzing the
economic data during the review to determine whether or not a
Corrective Action Plan is required. One asked if the impact of the new,
broader definition of veteran will be considered. One asked if
distinctions would be made between the EER for veterans and the
disabled veterans' EER, and how VETS would consider veterans who
require intensive services. One also asked if additional reporting
burdens will be imposed by the review process.
Response: We agree that we should provide to the State agencies
more information regarding the review content and process, but not in
federal regulations. We think that the details of the review process
and content is best left to VETS, the DOL agency that will make the
final determination, after consultation with ETA, whether or not a CAP
should be imposed. Administrative details will be provided through the
issuance of program guidance letters. The Rule gives wide latitude for
any State that is subject to the review to provide information about
its policies, operations, and performance level, but does not prescribe
any additional reporting requirements.
Changes From the NPRM
For this Final Rule, we have mainly adopted the text as proposed in
the NPRM. We made minor editorial changes to the text of section
1001.160, and the regulatory text now uses the acronym UNTEER to
reference the Uniform National Threshold EER. We also made minor
additions to the text of section 1001.166 to acknowledge that we will
consult with ETA during the evaluation described in that section.
Because section 1001.166 involves evaluating a State's employment
service delivery system, which includes the Wagner-Peyser program that
is administered by ETA, it is appropriate that VETS consider ETA's
input during the review process.
III. Administrative Information
Regulatory Flexibility Analysis, Executive Order 13272, and Small
Business Regulatory Enforcement Fairness Act
The Regulatory Flexibility Act (RFA), 5 U.S.C. Chapter 6, requires
the Department to evaluate the economic impact of this Rule with regard
to small entities. The RFA defines small entities to include small
businesses, small organizations including not-for-profit organizations,
and small governmental jurisdictions. We have determined, and have
certified to the Chief Counsel for Advocacy, Small Business
Administration, that this Rule does not impose a significant economic
impact on a substantial number of such small entities, because this
Rule would directly impact only States and the definition of small
entities does not include States.
Executive Orders 12866 and 13563
Executive Orders (E.O.) 13563 and 12866 direct agencies to assess
all costs and benefits of a rule and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity).
Executive Order 12866 requires that for each regulatory action we
propose, we must conduct an assessment of the proposed regulatory
action to determine whether the action is ``significant'' before
publishing the regulation. A ``significant regulatory action'' is
defined to include an action that will have an annual effect on the
economy of $100 million or more, and/or an action that raises a novel
legal or policy issue. This Rule will not have an annual effect on the
economy of $100 million or more, and it does not raise novel legal or
policy issues. Therefore, the Office of Management and Budget has
designated this Final Rule as ``not significant'' under E.O. 12866.
E.O. 13563, issued after publication of the NPRM, directs agencies
to identify, to the extent possible, the necessity of the regulation as
well as the costs and benefits of the regulation.
Through the Jobs for Veterans State Grants program, VETS provides
funding
[[Page 15289]]
to States to support Disabled Veterans Outreach Program specialists and
Local Veterans Employment Representatives in each State. These
individuals provide employment services to veterans and eligible
military spouses. Under 38 U.S.C. 4102A(c)(3)(A)(i), for a State to
receive JVSG funding for a program year, if VETS determines that the
State's entered-employment rate (EER) for veterans is deficient for the
preceding program year, the State must develop a corrective action plan
(CAP) to improve the EER for veterans in the State. Section
4102A(c)(3)(B) of title 38 requires VETS to ``establish in regulations
a uniform national threshold entered-employment rate for veterans for a
program year by which [these] determinations of deficiency may be
made.'' This Final Rule establishes a uniform national threshold, and
explains how VETS will use the uniform national threshold in its review
of States to determine whether an EER below the threshold reflects a
deficiency in the State's performance. The Rule also explains the
procedure for the submission and review of a CAP. This regulation is
necessary for VETS to fulfill its statutory obligations to establish
the uniform national threshold and to conduct reviews for deficiency
under the JVSG program.
The costs of this Rule are minimal. VETS will calculate the uniform
national threshold and will determine how a State's EER for veterans
compares to the threshold using the data that VETS already routinely
collects from States as part of the JVSG program. The Rule does not
impose any new data collection requirements. If a State is determined
deficient and required to submit a CAP, VETS estimates that the costs
specifically attributable to submitting and implementing the CAP would
be about one percent of the State's annual JVS grant amount. If a
State's JVSG funding is not adequate to cover the cost of developing
and implementing a CAP, additional funds will be provided through VETS'
routine reallocation procedure, which requires no additional
appropriation and thus would have no net cost.
The benefits of this Rule far outweigh its minimal costs. By
fulfilling VETS' statutory obligations to establish the uniform
national threshold and conduct reviews for deficiency, the Rule will
add another measure of accountability to the JVSG program. This will
help ensure that veterans and eligible spouses are provided a maximum
of employment and training opportunities, consistent with the purpose
of VETS as stated in 38 U.S.C. 4102. Furthermore, this Rule provides
States the necessary guidance on the procedure that VETS will follow
when reviewing the States for deficiency, and the procedure that States
must follow in submitting and implementing a CAP. The Rule also
outlines how VETS will provide technical assistance to States that must
develop and implement a CAP. These procedures will have the benefit of
facilitating and improving States' employment services to veterans and
eligible spouses under the JVSG program.
Paperwork Reduction Act
The purposes of the Paperwork Reduction Act of 1995 (PRA), 44
U.S.C. 3501 et seq., include minimizing the paperwork burden on
affected entities. The PRA requires certain actions before an agency
can adopt or revise the collection of information, including publishing
a summary of the collection of information and a brief description of
the need for and proposed use of the information. This Rule will not
require new or additional information collections, as defined in the
Act, from the affected entities. We have determined that a State's
obligation to develop and submit a CAP for approval does not qualify as
a collection of information, as defined by 5 CFR 1320.3(c), because
after receiving a determination of deficiency from VETS that excludes
the systemic factors beyond the State's control, the State is required
to develop and submit a CAP based on a self-diagnosis and prescription
that addresses the unique set of deficiencies embodied in that State's
policies and procedures. Therefore, a CAP does not qualify as a
''collection of information'' under 5 CFR 1320.3(c), because it does
not result from identical questions nor is the content across multiple
CAPs in any way identical. In addition, a CAP does not qualify as
''information'' under 5 CFR 1320.3(h) because the individuality of the
information provided in each State's CAP is consistent with a response
to a ''request for facts or opinions addressed to a single person,''
which is excluded under 5 CFR 1320.3(h)(6).
Current reporting systems and requirements are not changed by this
Rule. Therefore, this Rule does not impose on the State employment
service delivery systems any new information collection that would
require approval under the PRA.
Executive Order 13132
The Department reviewed this Rule in accordance with Executive
Order 13132 regarding federalism and determined that it does not have
''federalism implications.'' This Rule does not ''have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.'' This Rule
implements the uniform national threshold EER for veterans and eligible
persons applicable to State employment service delivery systems. This
Rule does nothing to alter either the relationship between the national
government and the States, or the distribution of power and
responsibilities among the various levels of government. Accordingly,
this Rule does not have ''federalism implications.''
Unfunded Mandates Reform Act of 1995
For purposes of the Unfunded Mandates Reform Act (UMRA) of 1995,
this Rule does not include any Federal mandate that may result in
increased expenditures by State, local and Tribal governments, or by
the private sector. As this Rule does not impose any unfunded Federal
mandate, the UMRA is not implicated. As explained above, current
reporting requirements on the States are not changed by this Rule. The
Labor Exchange Reporting System (LERS) produces program year EER
results for 52 of the 54 reporting employment service delivery systems
and calculates the first step toward a national EER, based on inclusion
of those 52 reporting units. For each program year, VETS will
supplement the results available from the LERS by: (a) Incorporating
the program year EER results for the two States that are piloting a
separate reporting system; and, (b) calculating the uniform national
threshold EER based on inclusion of the results for all 54 reporting
units. Therefore, this Rule does not impose any new reporting or
calculation requirement upon the State employment service delivery
systems. Some States may be required to institute corrective action
plans under this Rule. However, such CAPs are required by statute.
Moreover, the Department provides grant funds for the administration of
the JVSG program which may be used for any costs associated with the
imposition of a CAP.
Executive Order 13045
Executive Order 13045 concerns the protection of children from
environmental health risks and safety risks. This Rule implements the
uniform national threshold EER for veterans and eligible persons
applicable to State employment service delivery systems funded by the
Department. This Rule
[[Page 15290]]
has no impact on safety or health risks to children.
Executive Order 13175
Executive Order 13175 addresses the unique relationship between the
Federal Government and Indian Tribal governments. The order requires
Federal agencies to take certain actions when regulations have ``Tribal
implications.'' The order defines regulations as having ``Tribal
implications'' when they have substantial direct effects on one or more
Indian Tribes, on the relationship between the Federal Government and
Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes. We have reviewed this
Rule and concluded that it does not have Tribal implications for
purposes of Executive Order 13175, as it does nothing to affect either
the relationship or the distribution of power and responsibilities
between the Federal Government and Indian Tribes.
Environmental Impact Assessment
We have reviewed this Rule in accordance with the requirements of
the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et
seq.), the regulations of the Council on Environmental Quality (40 CFR
part 1500), and the Department's NEPA procedures (29 CFR part 11). The
Rule will not have a significant impact on the quality of the human
environment, and thus we have not prepared an environmental assessment
or an environmental impact statement.
Assessment of Federal Regulations and Policies on Families
Section 654 of the Treasury and General Government Appropriations
Act, enacted as part of the Omnibus Consolidated and Emergency
Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat.
2681), requires the Department to assess the impact of this Rule on
family well-being. A Rule that is determined to have a negative effect
on families must be supported with an adequate rationale. We have
assessed this Rule and determined that it will not have a negative
effect on families.
Privacy Act
The Privacy Act of 1974 (5 U.S.C. 552a) provides safeguards to
individuals for their personal information which the Government
collects. The Act requires certain actions by an agency that collects
information on individuals when that information contains personally
identifying information such as Social Security Numbers or names.
Because this Rule does not require a new collection of personally
identifiable information, the Privacy Act does not apply in this
instance.
Executive Order 12630
This Rule is not subject to Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights, because it does not involve implementation of a policy with
takings implications.
Executive Order 12988
This Rule has been drafted and reviewed in accordance with
Executive Order 12988, Civil Justice Reform, and it will not unduly
burden the Federal court system. The Final Rule has been written so as
to minimize litigation and provide a clear legal standard for affected
conduct, and has been reviewed carefully to eliminate drafting errors
and ambiguities.
Executive Order 13211
This Rule is not subject to Executive Order 13211, because it will
not have a significant adverse effect on the supply, distribution, or
use of energy.
Plain Language
We drafted this Rule in plain language.
Catalog of Federal Domestic Assistance Number
State employment service delivery systems consist of three formula
grant programs, operating within an integrated service delivery
infrastructure. Each of these three programs has been assigned a
Catalog of Federal Domestic Assistance (CFDA) Number. The three
programs are the Employment Service/Wagner-Peyser Funded Activities
(CFDA 17.207), the Disabled Veterans' Outreach Program (CFDA 17.801),
and the Local Veterans' Employment Representative Program (CFDA
17.804).
List of Subjects in 20 CFR Part 1001
Employment, Grant programs--Labor, Veterans.
For reasons stated in the preamble, 20 CFR Chapter IX is amended as
follows:
PART 1001--SERVICES FOR VETERANS
0
1. The authority citation for part 1001 continues to read as follows:
Authority: 29 U.S.C. 49k; 38 U.S.C. chapters 41 and 42.
0
2. Add subpart G, consisting of Sec. Sec. 1001.160 through 1001.167,
to read as follows:
Subpart G--Purpose and Definitions
Sec.
1001.160 What is the purpose and scope of this part?
1001.161 What definitions apply to this part?
1001.162 How does the Department define veteran for purposes of this
subpart?
1001.163 What is the national entered employment rate (EER) and what
is a State's program year EER for purposes of this part?
1001.164 What is the uniform national threshold EER, and how will it
be calculated?
1001.165 When will the uniform national threshold EER be published?
1001.166 How will the uniform national threshold EER be used to
evaluate whether a State will be required to submit a Corrective
Action Plan (CAP)?
1001.167 In addition to the procedures specified in this part, will
the Department be conducting any other monitoring of compliance
regarding services to veterans?
Subpart G--Purpose and Definitions
Sec. 1001.160 What is the purpose and scope of this part?
(a) The purpose of this part is to fulfill the requirement of 38
U.S.C. 4102A(c)(3)(B) to establish a uniform national threshold entered
employment rate (UNTEER) achieved for veterans and eligible persons by
the State employment service delivery systems. We will use the UNTEER
as part of the review process for determining whether a State's program
year EER is deficient and a Corrective Action Plan (CAP) is required of
that State employment service delivery system.
(b) This part is applicable to all State agencies that are
recipients of Wagner-Peyser State Grants, and/or Jobs for Veterans
State Grants.
Sec. 1001.161 What definitions apply to this part?
Department means the United States Department of Labor, including
its agencies and organizational units and their representatives.
Eligible person, as defined at 38 U.S.C. 4101(5), means:
(1) The spouse of any person who died of a service-connected
disability;
(2) The spouse of any member of the Armed Forces serving on active
duty who, at the time of application for assistance under this chapter,
is listed, pursuant to 37 U.S.C. 556 and regulations issued thereunder
by the Secretary concerned, in one or more of the following categories
and has been so listed for a total of more than ninety days:
(i) Missing in action,
(ii) Captured in line of duty by a hostile force, or
[[Page 15291]]
(iii) Forcibly detained or interned in line of duty by a foreign
government or power; or
(3) The spouse of any person who has a total disability permanent
in nature resulting from a service-connected disability or the spouse
of a veteran who died while a disability so evaluated was in existence.
Employment service delivery system, as defined at 38 U.S.C.
4101(7), means a service delivery system at which or through which
labor exchange services, including employment, training, and placement
services, are offered in accordance with the Wagner-Peyser Act.
Jobs for Veterans Act (JVA) means Public Law 107-288, 116 Stat.
2033 (2002), codified at 38 U.S.C. chapters 41 and 42.
Jobs for Veterans State Grant (JVSG) means an award of Federal
financial assistance by the Department to a State for the purposes of
the Disabled Veterans' Outreach Program or the Local Veterans'
Employment Representative Program.
Program year is the period from July 1 of a year through June 30 of
the following year and is numbered according to the calendar year in
which it begins.
Sec. 1001.162 How does the Department define veteran for purposes of
this subpart?
The Department applies two definitions of veteran for the purposes
of this subpart and has established two stages for the implementation
of these definitions.
(a) The first stage of implementation begins with application of
this subpart G to the first program year following May 10, 2013. As of
that date, veteran is defined as it is in 38 U.S.C. 4211(4), as a
person who:
(1) Served on active duty for a period of more than 180 days and
was discharged or released therefrom with other than a dishonorable
discharge;
(2) Was discharged or released from active duty because of a
service-connected disability;
(3) As a member of a reserve component under an order to active
duty pursuant to 10 U.S.C. 12301(a), (d), or (g), 12302, or 12304,
served on active duty during a period of war or in a campaign or
expedition for which a campaign badge is authorized and was discharged
or released from such duty with other than a dishonorable discharge; or
(4) Was discharged or released from active duty by reason of a sole
survivorship discharge (as that term is defined in 10 U.S.C.1174(i)).
(b) The second stage of implementation begins with the first day of
the program year that begins two years after the first day of the
program year that State grantees begin collecting and maintaining data
as required by 20 CFR 1010.330(c). As of that date, veteran will be
defined as it is in 20 CFR 1010.110:
(1) A person who served in the active military, naval, or air
service, and who was discharged or released there from under conditions
other than dishonorable, as specified in 38 U.S.C. 101(2).
(2) Active service includes full-time Federal service in the
National Guard or a Reserve component, other than full-time duty for
training purposes.
(c) During the second stage of implementation, any veteran who
meets the definition specified in paragraph (a) of this section will be
considered to meet the definition specified in paragraph (b) of this
section.
(d) We will notify State grantees when they are required to begin
implementing 20 CFR 1010.330(c).
Sec. 1001.163 What is the national entered employment rate (EER) and
what is a State's program year EER for purposes of this part?
(a) For purposes of this part, we use the EER for veterans and
eligible persons. This is the EER as applied to veterans (as defined in
Sec. 1001.162) and eligible persons (as defined in Sec. 1001.161) who
are participants in State employment service delivery systems.
(b) The EER for veterans and eligible persons measures the number
of the participants described in paragraph (a) of this section who are
employed after exiting an employment service delivery system compared
to the total number of those participants who exited. We will issue
policy guidance to establish the method of calculating the EER.
(c) The national EER for veterans and eligible persons is the EER
achieved by the national State employment service delivery system for
those veterans and eligible persons who are participants in all of the
State employment service delivery systems for the program year under
review. The national EER resulting from this calculation is expressed
as a percentage that is rounded to the nearest tenth of a percent.
(d) A State's program year EER is the EER for veterans and eligible
persons (as calculated in paragraph (b) of this section) achieved by a
single State's employment service delivery system for those veterans
and eligible persons who are included in the EER measure for that
State's employment service delivery system for the program year under
review. The program year EER resulting from this calculation is
expressed as a percentage that is rounded to the nearest tenth of a
percent.
Sec. 1001.164 What is the uniform national threshold EER, and how
will it be calculated?
(a) The uniform national threshold EER for a program year is equal
to 90 percent of the national EER for veterans and eligible persons (as
defined in Sec. 1001.163(c)).
(b) The uniform national threshold EER resulting from this
calculation is expressed as a percentage that is rounded to the nearest
tenth of a percent.
Sec. 1001.165 When will the uniform national threshold EER be
published?
When practicable, the Veterans' Employment and Training Service
(VETS) will publish the uniform national threshold EER for a given
program year by the end of December of the calendar year in which that
program year ends.
Sec. 1001.166 How will the uniform national threshold EER be used to
evaluate whether a State will be required to submit a Corrective Action
Plan (CAP)?
(a) Comparison. Each State's program year EER will be compared to
the uniform national threshold EER for that program year. State
agencies that do not achieve a program year EER that equals or exceeds
the uniform national threshold EER (90 percent of the national EER) for
the year under review will be subject to a review by VETS, with input
from the Employment and Training Administration (ETA), to determine
whether the program year EER is deficient.
(b) Review. For each State whose program year EER is subject to
review to determine deficiency, the review will consider the degree of
difference between the State's program year EER and the uniform
national threshold EER for that program year, as well as the annual
unemployment data for the State as compiled by the Bureau of Labor
Statistics.
(1) The review also may consider other relevant measures of
prevailing economic conditions and regional economic conditions, as
well as other measures of the performance of workforce programs and/or
any information the State may submit.
(2) The review will include consultation with VETS and ETA field
staff about findings from their on-site reviews and desk audits of
State agency implementation of policies and procedures for services to
veterans and also may include consultation with staff
[[Page 15292]]
affiliated with other agencies of the Department, as appropriate.
(c) Requirement of a CAP. After review, a State whose program year
EER is determined not to be deficient will be notified that a CAP will
not be required; a State whose program year EER is determined to be
deficient will be required to submit a CAP to improve the State's
performance in assisting veterans to meet their employment needs as a
condition of receiving its next-due JVSG.
(1) Any State whose program year EER has been determined to be
deficient will be notified by March 31 of the year following the
calendar year in which the program year under review ended.
(2) For any State that is required to submit a CAP, VETS will
provide technical assistance (TA), with input from ETA, on the
development of the CAP. The CAP must be submitted to the Grant
Officer's Technical Representative by June 30 of the year following the
calendar year in which the program year under review ended.
(3) We will review the CAP submitted by the State and determine,
with input from ETA, whether to approve it or to provide additional TA
to the State.
(i) If we approve the CAP, the State must expeditiously implement
it.
(ii) If we do not approve the CAP, we will take such steps as are
necessary to implement corrective actions to improve the State's EER
for veterans and eligible persons.
(4) If a State fails to take the actions we impose under paragraph
(c)(3)(ii) of this section, the Assistant Secretary for Veterans'
Employment and Training may take any actions available to remedy non-
compliance under 20 CFR 1001.130(a) (referring to the compliance
measures discussed in 20 CFR part 658, subpart H).
Sec. 1001.167 In addition to the procedures specified in this part,
will the Department be conducting any other monitoring of compliance
regarding services to veterans?
Yes. We will continue to monitor compliance with the regulations on
veterans' priority of service at 20 CFR 1010.240(b) jointly with the
ETA. If a State's program year EER is determined to be deficient for a
given program year, that deficiency would constitute information to be
considered in monitoring priority of service, since failure to fully
implement priority of service could be one of the contributors to a
deficient program year EER.
Keith Kelly,
Assistant Secretary, Veterans' Employment and Training.
[FR Doc. 2013-05345 Filed 3-8-13; 8:45 am]
BILLING CODE 4510-79-P