[Title 20 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2017 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          


          Title 20

Employees' Benefits


________________________

Part 657 to End

                         Revised as of April 1, 2017

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2017
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 20:
          Chapter V--Employment and Training Administration, 
          Department of Labor (Continued)                            3
          Chapter VI--Office of Workers' Compensation 
          Programs, Department of Labor                            401
          Chapter VII--Benefits Review Board, Department of 
          Labor                                                    603
          Chapter VIII--Joint Board for the Enrollment of 
          Actuaries                                                621
          Chapter IX--Office of the Assistant Secretary for 
          Veterans' Employment and Training Service, 
          Department of Labor                                      657
  Finding Aids:
      Table of CFR Titles and Chapters........................     713
      Alphabetical List of Agencies Appearing in the CFR......     733
      List of CFR Sections Affected...........................     743

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 20 CFR 658.400 
                       refers to title 20, part 
                       658, section 400.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 2017), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
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Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

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OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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PAST PROVISIONS OF THE CODE

    Provisions of the Code that are no longer in force and effect as of 
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for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.

``[RESERVED]'' TERMINOLOGY

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Federal Regulations. An agency may add regulatory information at a 
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not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

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established by statute and allows Federal agencies to meet the 
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This material, like any other properly issued regulation, has the force 
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this volume.

[[Page vii]]

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    Oliver A. Potts,
    Director,
    Office of the Federal Register.
    April 1, 2017.







[[Page ix]]



                               THIS TITLE

    Title 20--Employees' Benefits is composed of four volumes. The first 
volume, containing parts 1-399, includes current regulations issued by 
the Office of Workers' Compensation Programs, Department of Labor and 
the Railroad Retirement Board. The second volume, containing parts 400-
499, includes all current regulations issued by the Social Security 
Administration. The third volume, containing parts 500 to 656, includes 
current regulations issued by the Employees' Compensation Appeals Board, 
and the Employment and Training Administration. The fourth volume, 
containing part 657 to End, includes the current regulations issued by 
the Office of Workers' Compensation Programs, the Benefits Review Board, 
the Office of the Assistant Secretary for Veterans' Employment and 
Training Service (all of the Department of Labor) and the Joint Board 
for the Enrollment of Actuaries. The contents of these volumes represent 
all current regulations codified under this title of the CFR as of April 
1, 2017.

    An index to chapter III appears in the second volume.

    For this volume, Michele Bugenhagen was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of the 
John Hyrum Martinez, assisted by Stephen J. Frattini.

[[Page 1]]



                      TITLE 20--EMPLOYEES' BENEFITS




                  (This book contains part 657 to end)

  --------------------------------------------------------------------
                                                                    Part

chapter v--Employment and Training Administration, 
  Department of Labor (Continued)...........................         657

chapter vi--Office of Workers' Compensation Programs, 
  Department of Labor.......................................         701

chapter vii--Benefits Review Board, Department of Labor.....         801

chapter viii--Joint Board for the Enrollment of Actuaries...         900

chapter ix--Office of the Assistant Secretary for Veterans' 
  Employment and Training Service, Department of Labor......        1001

[[Page 3]]



 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR 
                               (CONTINUED)




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Part                                                                Page
657

Provisions governing grants to State agencies for employment services 
activities [Reserved]

658             Administrative provisions governing the 
                    Wagner-Peyser Act Employment Service....           5
660             Introduction to the regulations for 
                    workforce investment systems under Title 
                    I of the Workforce Investment Act.......          33
661             Statewide and local governance of the 
                    workforce investment system under Title 
                    I of the Workforce Investment Act.......          36
662             Description of the one-stop system under 
                    Title I of the Workforce Investment Act.          50
663             Adult and dislocated worker activities under 
                    Title I of the Workforce Investment Act.          57
664             Youth activities under Title I of the 
                    Workforce Investment Act................          73
665             Statewide workforce investment activities 
                    under Title I of the Workforce 
                    Investment Act..........................          81
666             Performance accountability under Title I of 
                    the Workforce Investment Act............          85
667             Administrative provisions under Title I of 
                    the Workforce Investment Act............          91
668             Indian and Native American programs under 
                    Title I of the Workforce Investment Act.         117
669             National farmworker jobs program under Title 
                    I of the Workforce Investment Act.......         134
670             The Job Corps under Title I of the Workforce 
                    Investment Act..........................         144
671             National emergency grants for dislocated 
                    workers.................................         160
672             Provisions governing the Youthbuild Program.         163
673-674

[Reserved]

[[Page 4]]

675             Introduction to the regulations for the 
                    workforce development systems under 
                    Title I of the Workforce Innovation and 
                    Opportunity Act.........................         175
676             Unified and combined State plans Under Title 
                    I of the Workforce Innovation and 
                    Opportunity Act.........................         179
677             Performance accountability under Title I of 
                    the Workforce Innovation and Opportunity 
                    Act.....................................         187
678             Description of the one-stop delivery system 
                    under Title I of the Workforce 
                    Innovation and Opportunity Act..........         199
679             Statewide and local governance of the 
                    workforce development system under Title 
                    I of the Workforce Innovation and 
                    Opportunity Act.........................         223
680             Adult and dislocated worker activities under 
                    Title I of the Workforce Innovation and 
                    Opportunity Act.........................         248
681             Youth activities under Title I of the 
                    Workforce Innovation and Opportunity Act         272
682             Statewide activities under Title I of the 
                    Workforce Innovation and Opportunity Act         285
683             Administrative provisions under Title I of 
                    the Workforce and Opportunity Act.......         293
684             Indian and Native American Programs under 
                    Title I of the Workforce Innovation and 
                    Opportunity Act.........................         326
685             National Farmworker Jobs Program under Title 
                    I of the Workforce Innovation and 
                    Opportunity Act.........................         342
686             The Job Corps under Title I of the Workforce 
                    Innovation and Opportunity Act..........         352
687             National Dislocated Worker Grants...........         377
688             Provisions governing the Youthbuild Program.         382
689-699

[Reserved]

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 PART 657_PROVISIONS GOVERNING GRANTS TO STATE AGENCIES FOR EMPLOYMENT 
                     SERVICES ACTIVITIES [RESERVED]



PART 658_ADMINISTRATIVE PROVISIONS GOVERNING THE WAGNER	PEYSER ACT
EMPLOYMENT SERVICE--Table of Contents



Subpart A-D [Reserved]

Subpart E_Employment Service and Employment-Related Law Complaint System 
                           (Complaint System)

Sec.
658.400 Purpose and scope of subpart.

              Complaints Filed at the Local and State Level

658.410 Establishment of local and State complaint systems.
658.411 Action on complaints.
658.417 State hearings.
658.418 Decision of the State hearing official.
658.419 Apparent violations.

               When a Complaint Rises to the Federal Level

658.420 Responsibilities of the Employment and Training Administration 
          regional office.
658.421 Handling of Wagner-Peyser Act Employment Service regulation-
          related complaints.
658.422 Handling of employment-related law complaints by the Regional 
          Administrator.
658.424 Proceedings before the Office of Administrative Law Judges.
658.425 Decision of Department of Labor Administrative Law Judge.
658.426 Complaints against the United States Employment Service.

Subpart F_Discontinuation of Services to Employers by the Wagner-Peyser 
                         Act Employment Service

658.500 Scope and purpose of subpart.
658.501 Basis for discontinuation of services.
658.502 Notification to employers.
658.503 Discontinuation of services.
658.504 Reinstatement of services.

  Subpart G_Review and Assessment of State Workforce Agency Compliance 
                   With Employment Service Regulations

658.600 Scope and purpose of subpart.
658.601 State Workforce Agency responsibility.
658.602 Employment and Training Administration National Office 
          responsibility.
658.603 Employment and Training Administration Regional Office 
          responsibility.
658.604 Assessment and evaluation of program performance data.
658.605 Communication of findings to State agencies.

  Subpart H_Federal Application of Remedial Action to State Workforce 
                                Agencies

658.700 Scope and purpose of subpart.
658.701 Statements of policy.
658.702 Initial action by the Regional Administrator.
658.703 Emergency corrective action.
658.704 Remedial actions.
658.705 Decision to decertify.
658.706 Notice of decertification.
658.707 Requests for hearings.
658.708 Hearings.
658.709 Conduct of hearings.
658.710 Decision of the Administrative Law Judge.
658.711 Decision of the Administrative Review Board.

    Authority: Secs. 189, 503, Pub. L. 113-128, 128 Stat. 1425 (Jul. 22, 
2014); 29 U.S.C. chapter 4B.

    Source: 81 FR 56352, Aug. 19, 2016, unless otherwise noted.

Subpart A-D [Reserved]



Subpart E_Employment Service and Employment-Related Law Complaint System 
                           (Complaint System)



Sec.  658.400  Purpose and scope of subpart.

    (a) This subpart sets forth the regulations governing the Complaint 
System for the Wagner-Peyser Act Employment Service (ES) at the State 
and Federal levels. Specifically, the Complaint System handles 
complaints against an employer about the specific job to which the 
applicant was referred through the ES and complaints involving the 
failure to comply with the ES regulations under parts 651, 652, 653, and 
654 of this chapter and this part. As noted in Sec.  658.411(d)(6), this 
subpart only covers ES-related complaints made within 2 years of the 
alleged violation.

[[Page 6]]

    (b) Any complaints alleging violations under the Unemployment 
Insurance program, under Workforce Innovation and Opportunity Act (WIOA) 
title I programs, or complaints by veterans alleging employer violations 
of the mandatory listing requirements under 38 U.S.C. 4212 are not 
covered by this subpart and must be referred to the appropriate 
administering agency which would follow the procedures set forth in the 
respective regulations.
    (c) The Complaint System also accepts, refers, and, under certain 
circumstances, tracks complaints involving employment-related laws as 
defined in Sec.  651.10 of this chapter.
    (d) A complainant may designate an individual to act as his/her 
representative.

              Complaints Filed at the Local and State Level



Sec.  658.410  Establishment of local and State complaint systems.

    (a) Each State Workforce Agency (SWA) must establish and maintain a 
Complaint System pursuant to this subpart.
    (b) The State Administrator must have overall responsibility for the 
operation of the Complaint System. At the ES office level the manager 
must be responsible for the operation of the Complaint System.
    (c) SWAs must ensure centralized control procedures are established 
for the processing of complaints. The manager of the ES office and the 
SWA Administrator must ensure a central complaint log is maintained, 
listing all complaints taken by the ES office or the SWA, and specifying 
for each complaint:
    (1) The name of the complainant;
    (2) The name of the respondent (employer or State agency);
    (3) The date the complaint is filed;
    (4) Whether the complaint is by or on behalf of a migrant and 
seasonal farmworker (MSFW);
    (5) Whether the complaint concerns an employment-related law or the 
ES regulations; and
    (6) The action taken and whether the complaint has been resolved.
    (d) State agencies must ensure information pertaining to the use of 
the Complaint System is publicized, which must include, but is not 
limited to, the prominent display of an Employment and Training 
Administration (ETA)-approved Complaint System poster in each one-stop 
center.
    (e) Each one-stop center must ensure there is appropriate staff 
available during regular office hours to take complaints.
    (f) Complaints may be accepted in any one-stop center, or by a State 
Workforce Agency, or elsewhere by an outreach worker.
    (g) All complaints filed through the local ES office must be handled 
by a trained Complaint System representative.
    (h) All complaints received by a SWA must be assigned to a State 
agency official designated by the State Administrator, provided that the 
State agency official designated to handle MSFW complaints must be the 
State Monitor Advocate (SMA).
    (i) State agencies must ensure any action taken by the Complaint 
System representative, including referral on a complaint from an MSFW is 
fully documented containing all relevant information, including a 
notation of the type of each complaint pursuant to Department guidance, 
a copy of the original complaint form, a copy of any ES-related reports, 
any relevant correspondence, a list of actions taken, a record of 
pertinent telephone calls and all correspondence relating thereto.
    (j) Within 1 month after the end of the calendar quarter, the ES 
office manager must transmit an electronic copy of the quarterly 
Complaint System log described in paragraph (c) of this section to the 
SMA. These logs must be made available to the Department upon request.
    (k) The appropriate SWA or ES office representative handling a 
complaint must offer to assist the complainant through the provision of 
appropriate services.
    (l) The State Administrator must establish a referral system for 
cases where a complaint is filed alleging a violation that occurred in 
the same State but through a different ES office.
    (m) Follow-up on unresolved complaints. When a complaint is 
submitted or referred to a SWA, the Complaint

[[Page 7]]

System representative (where the complainant is an MSFW, the Complaint 
System representative will be the SMA), must follow-up monthly regarding 
MSFW complaints, and must inform the complainant of the status of the 
complaint. No follow-up with the complainant is required for non-MSFW 
complaints.
    (n) When a complainant is an English Language Learner (ELL), all 
written correspondence with the complainant under part 658, subpart E 
must include a translation into the complainant's native language.
    (o) A complainant may designate an individual to act as his/her 
representative throughout the filing and processing of a complaint.



Sec.  658.411  Action on complaints.

    (a) Filing complaints. (1) Whenever an individual indicates an 
interest in filing a complaint under this subpart with an ES office or 
SWA representative, or an outreach worker, the individual receiving the 
complaint must offer to explain the operation of the Complaint System 
and must offer to take the complaint in writing.
    (2) During the initial discussion with the complainant, the staff 
taking the complaint must:
    (i) Make every effort to obtain all the information he/she perceives 
to be necessary to investigate the complaint;
    (ii) Request that the complainant indicate all of the physical 
addresses, email, and telephone numbers through which he/she might be 
contacted during the investigation of the complaint; and
    (iii) Request that the complainant contact the Complaint System 
representative before leaving the area if possible, and explain the need 
to maintain contact during the investigation.
    (3) The staff must ensure the complainant (or his/her 
representative) submits the complaint on the Complaint/Referral Form or 
another complaint form prescribed or approved by the Department or 
submits complaint information which satisfies paragraph (a)(4) of this 
section. The Complaint/Referral Form must be used for all complaints, 
including complaints about unlawful discrimination, except as provided 
in paragraph (a)(4) of this section. The staff must offer to assist the 
complainant in filling out the form and submitting all necessary 
information, and must do so if the complainant desires such assistance. 
If the complainant also represents several other complainants, all such 
complainants must be named. The complainant, or his/her representative, 
must sign the completed form in writing or electronically. The identity 
of the complainant(s) and any persons who furnish information relating 
to, or assisting in, an investigation of a complaint must be kept 
confidential to the maximum extent possible, consistent with applicable 
law and a fair determination of the complaint. A copy of the completed 
complaint submission must be given to the complainant(s), and the 
complaint form must be given to the appropriate Complaint System 
representative described in Sec.  658.410(g).
    (4) Any complaint in a reasonable form (letter or email) which is 
signed by the complainant, or his/her representative, and includes 
sufficient information to initiate an investigation must be treated as 
if it were a properly completed Complaint/Referral Form filed in person. 
A letter (via hard copy or email) confirming the complaint was received 
must be sent to the complainant and the document must be sent to the 
appropriate Complaint System representative. The Complaint System 
representative must request additional information from the complainant 
if the complainant has not provided sufficient information to 
investigate the matter expeditiously.
    (b) Complaints regarding an employment-related law. (1) When a 
complaint is filed regarding an employment-related law with a ES office 
or a SWA the office must determine if the complainant is an MSFW.
    (i) If the complainant is a non-MSFW, the office must immediately 
refer the complainant to the appropriate enforcement agency, another 
public agency, a legal aid organization, and/or a consumer advocate 
organization, as appropriate, for assistance. Upon completing the 
referral the local or State representative is not required to follow-up 
with the complainant.

[[Page 8]]

    (ii) If the complainant is a MSFW, the ES office or SWA Complaint 
System representative must:
    (A) Take from the MSFW or his/her representative, in writing (hard 
copy or electronic), the complaint(s) describing the alleged 
violation(s) of the employment-related law(s); and
    (B) Attempt to resolve the issue informally at the local level, 
except in cases where the complaint was submitted to the SWA and the SMA 
determines that he/she must take immediate action and except in cases 
where informal resolution at the local level would be detrimental to the 
complainant(s). In cases where informal resolution at the local level 
would be detrimental to the complainant(s), the Complaint System 
Representative or SMA (depending on where the complaint was filed) must 
immediately refer the complaint to the appropriate enforcement agency. 
Concurrently, the Complaint System representative must offer to refer 
the MSFW to other employment services should the MSFW be interested.
    (C) If the issue is not resolved within 5 business days, the 
Complaint System representative must refer the complaint to the 
appropriate enforcement agency (or another public agency, a legal aid 
organization, or a consumer advocate organization, as appropriate) for 
further assistance.
    (D) If the ES office or SWA Complaint System representative 
determines that the complaint must be referred to a State or Federal 
agency, he/she must refer the complaint to the SMA who must immediately 
refer the complaint to the appropriate enforcement agency for prompt 
action.
    (E) If the complaint was referred to the SMA under paragraph 
(b)(1)(ii)(D) of this section, the representative must provide the SMA's 
contact information to the complainant. The SMA must notify the 
complainant of the enforcement agency to which the complaint was 
referred.
    (2) If an enforcement agency makes a final determination that the 
employer violated an employment-related law and the complaint is 
connected to a job order, the SWA must initiate procedures for 
discontinuation of services immediately in accordance with subpart F of 
this part. If this occurs, the SWA must notify the complainant and the 
employer of this action.
    (c) Complaints alleging a violation of rights under the Equal 
Employment Opportunity Commission (EEOC) regulations or enforced by the 
Department of Labor's Civil Rights Center (CRC). (1) All complaints 
received by a ES office or a SWA alleging unlawful discrimination, as 
well as reprisal for protected activity, in violation of EEOC 
regulations, must be logged and immediately referred to either a local 
Equal Opportunity (EO) representative, the State EO representative, or 
the EEOC. The Complaint System representative must notify the 
complainant of the referral in writing.
    (2) Any complaints received either at the local and State level or 
at the ETA regional office, that allege violations of civil rights laws 
and regulations such as those under title VI of the Civil Rights Act or 
sec. 188 of WIOA, including for beneficiaries (as defined in 29 CFR 
38.4) only, on the basis of citizenship status or participant status, as 
well as reprisal for protected activity, must immediately be logged and 
directed or forwarded to the recipient's Equal Opportunity Officer or 
the CRC.
    (d) Complaints regarding the ES regulations (ES complaints). (1) 
When an ES complaint is filed with a ES office or a SWA the following 
procedures apply:
    (i) When an ES complaint is filed against an employer, the proper 
office to handle the complaint is the ES office serving the area in 
which the employer is located.
    (ii) When a complaint is against an employer in another State or 
against another SWA:
    (A) The ES office or SWA receiving the complaint must send, after 
ensuring that the Complaint/Referral Form is adequately completed, a 
copy of the Complaint/Referral Form and copies of any relevant documents 
to the SWA in the other State. Copies of the referral letter must be 
sent to the complainant, and copies of the complaint and referral letter 
must be sent to the ETA Regional Office(s) with jurisdiction over the 
transferring and receiving State agencies. All such copies must be sent 
via hard copy or electronic mail.

[[Page 9]]

    (B) The SWA receiving the complaint must handle the complaint as if 
it had been initially filed with that SWA.
    (C) The ETA regional office with jurisdiction over the receiving SWA 
must follow-up with it to ensure the complaint is handled in accordance 
with these regulations.
    (D) If the complaint is against more than one SWA, the complaint 
must so clearly state. Additionally, the complaints must be processed as 
separate complaints and must be handled according to procedures in this 
paragraph (d).
    (iii) When an ES complaint is filed against a ES office, the proper 
office to handle the complaint is the ES office serving the area in 
which the alleged violation occurred.
    (iv) When an ES complaint is filed against more than one ES offices 
and is in regard to an alleged agency-wide violation the SWA 
representative or his/her designee must process the complaint.
    (v) When a complaint is filed alleging a violation that occurred in 
the same State but through a different ES office, the ES office where 
the complaint is filed must ensure that the Complaint/Referral Form is 
adequately completed and send the form to the appropriate local ES 
office for tracking, further referral if necessary, and follow-up. A 
copy of the referral letter must be sent to the complainant via hard 
copy or electronic mail.
    (2)(i) If a complaint regarding an alleged violation of the ES 
regulations is filed in a ES office by either a non-MSFW or MSFW, or 
their representative(s) (or if all necessary information has been 
submitted to the office pursuant to paragraph (a)(4) of this section), 
the appropriate ES office Complaint System representative must 
investigate and attempt to resolve the complaint immediately upon 
receipt.
    (ii) If resolution has not been achieved to the satisfaction of the 
complainant within 15 working days after receipt of the complaint, or 5 
working days with respect to complaints filed by or on behalf of MSFWs, 
(or after all necessary information has been submitted to the ES office 
pursuant to paragraph (a)(4) of this section), the Complaint System 
representative must send the complaint to the SWA for resolution or 
further action.
    (iii) The ES office must notify the complainant and the respondent, 
in writing (via hard copy or electronic mail), of the determination 
(pursuant to paragraph (d)(5) of this section) of its investigation 
under paragraph (d)(2)(i) of this section, or of the referral to the SWA 
(if referred).
    (3) When a non-MSFW or his/her representative files a complaint 
regarding the ES regulations with a SWA, or when a non-MSFW complaint is 
referred from a ES office the following procedures apply:
    (i) If the complaint is not transferred to an enforcement agency 
under paragraph (b)(1)(i) of this section the Complaint System 
representative must investigate and attempt to resolve the complaint 
immediately upon receipt.
    (ii) If resolution at the SWA level has not been accomplished within 
30 working days after the complaint was received by the SWA (or after 
all necessary information has been submitted to the SWA pursuant to 
paragraph (a)(4) of this section), whether the complaint was received 
directly or from a ES office pursuant to paragraph (d)(2)(ii) of this 
section, the SWA must make a written determination regarding the 
complaint and must send electronic copies to the complainant and the 
respondent. The determination must follow the procedures set forth in 
paragraph (d)(5) of this section.
    (4)(i) When a MSFW or his/her representative files a complaint 
regarding the ES regulations directly with a SWA, or when a MSFW 
complaint is referred from a ES office, the SMA must investigate and 
attempt to resolve the complaint immediately upon receipt and may, if 
necessary, conduct a further investigation.
    (ii) If resolution at the SWA level has not been accomplished within 
20 business days after the complaint was received by the SWA (or after 
all necessary information has been submitted to the SWA pursuant to 
paragraph (a)(4) of this section), the SMA must make a written 
determination regarding the complaint and must send electronic copies to 
the complainant and the respondent. The determination

[[Page 10]]

must follow the procedures set forth in paragraph (d)(5) of this 
section.
    (5)(i) All written determinations by ES or SWA officials on 
complaints under the ES regulations must be sent by certified mail (or 
another legally viable method) and a copy of the determination may be 
sent via electronic mail. The determination must include all of the 
following:
    (A) The results of any SWA investigation;
    (B) The conclusions reached on the allegations of the complaint;
    (C) If a resolution was not reached, an explanation of why the 
complaint was not resolved; and
    (D) If the complaint is against the SWA, an offer to the complainant 
of the opportunity to request, in writing, a hearing within 20 business 
days after the certified date of receipt of the notification.
    (ii) If the SWA determines that the employer has not violated the ES 
regulations, the SWA must offer to the complainant the opportunity to 
request a hearing within 20 working days after the certified date of 
receipt of the notification.
    (iii) If the SWA, within 20 business days from the certified date of 
receipt of the notification provided for in paragraph (d)(5) of this 
section, receives a written request (via hard copy or electronic mail) 
for a hearing, the SWA must refer the complaint to a State hearing 
official for hearing. The SWA must, in writing (via hard copy or 
electronic mail), notify the respective parties to whom the 
determination was sent that:
    (A) The parties will be notified of the date, time, and place of the 
hearing;
    (B) The parties may be represented at the hearing by an attorney or 
other representative;
    (C) The parties may bring witnesses and/or documentary evidence to 
the hearing;
    (D) The parties may cross-examine opposing witnesses at the hearing;
    (E) The decision on the complaint will be based on the evidence 
presented at the hearing;
    (F) The State hearing official may reschedule the hearing at the 
request of a party or its representative; and
    (G) With the consent of the SWA's representative and of the State 
hearing official, the party who requested the hearing may withdraw the 
request for hearing in writing before the hearing.
    (iv) If the State agency makes a final determination that the 
employer who has or is currently using the ES has violated the ES 
regulations, the determination, pursuant to paragraph (d)(5) of this 
section, must state that the State will initiate procedures for 
discontinuation of services to the employer in accordance with subpart F 
of this part.
    (6) A complaint regarding the ES regulations must be handled to 
resolution by these regulations only if it is made within 2 years of the 
alleged occurrence.
    (e) Resolution of complaints. A complaint is considered resolved 
when:
    (1) The complainant indicates satisfaction with the outcome via 
written correspondence;
    (2) The complainant chooses not to elevate the complaint to the next 
level of review;
    (3) The complainant or the complainant's authorized representative 
fails to respond to a request for information under paragraph (a)(4) of 
this section within 20 working days or, in cases where the complainant 
is an MSFW, 40 working days of a written request by the appropriate ES 
office or State agency;
    (4) The complainant exhausts all available options for review; or
    (5) A final determination has been made by the enforcement agency to 
which the complaint was referred.
    (f) Reopening of case after resolution. If the complainant or the 
complainant's authorized representative fails to respond pursuant to 
paragraph (e)(3) of this section, the complainant or the complainant's 
authorized representative may reopen the case within 1 year after the 
SWA has closed the case.



Sec.  658.417  State hearings.

    (a) The hearing described in Sec.  658.411(d)(5) must be held by 
State hearing officials. A State hearing official may be any State 
official authorized to hold hearings under State law.

[[Page 11]]

Examples of hearing officials are referees in State unemployment 
compensation hearings and officials of the State agency authorized to 
preside at State administrative hearings.
    (b) The State hearing official may decide to conduct hearings on 
more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously if conducted together.
    (c) The State hearing official, upon the referral of a case for a 
hearing, must:
    (1) Notify all involved parties of the date, time, and place of the 
hearing; and
    (2) Reschedule the hearing, as appropriate.
    (d) In conducting a hearing, the State hearing official must:
    (1) Regulate the course of the hearing;
    (2) Issue subpoenas if necessary, provided the official has the 
authority to do so under State law;
    (3) Ensure that all relevant issues are considered;
    (4) Rule on the introduction of evidence and testimony; and
    (5) Take all actions necessary to ensure an orderly proceeding.
    (e) All testimony at the hearing must be recorded and may be 
transcribed when appropriate.
    (f) The parties must be afforded the opportunity to present, 
examine, and cross-examine witnesses.
    (g) The State hearing official may elicit testimony from witnesses, 
but may not act as advocate for any party.
    (h) The State hearing official must receive and include in the 
record, documentary evidence offered by any party and accepted at the 
hearing. Copies thereof must be made available by the party submitting 
the document to other parties to the hearing upon request.
    (i) Federal and State rules of evidence do not apply to hearings 
conducted pursuant to this section; however rules or principles designed 
to assure production of the most credible evidence available and to 
subject testimony to test by cross-examination, must be applied where 
reasonably necessary by the State hearing official. The State hearing 
official may exclude irrelevant, immaterial, or unduly repetitious 
evidence.
    (j) The case record, or any portion thereof, must be available for 
inspection and copying by any party at, prior to, or subsequent to the 
hearing upon request. Special procedures may be used for disclosure of 
medical and psychological records such as disclosure to a physician 
designated by the individual.
    (k) The State hearing official must, if feasible, resolve the 
dispute at any time prior to the conclusion of the hearing.
    (l) At the State hearing official's discretion, other appropriate 
individuals, organizations, or associations may be permitted to 
participate in the hearing as amicus curiae (friends of the court) with 
respect to any legal or factual issues relevant to the complaint. Any 
documents submitted by the amicus curiae must be included in the record.
    (m) If the parties to the hearing are located in more than one State 
or are located in the same State but access to the hearing location is 
extremely inconvenient for one or more parties as determined by the 
State hearing official, the hearing official must:
    (1) Whenever possible, hold a single hearing at a location 
convenient to all parties or their representatives wishing to appear and 
present evidence, with all such parties and/or their representatives 
present.
    (2) If a hearing location cannot be established by the State hearing 
official under paragraph (m)(1) of this section, the State hearing 
official may conduct, with the consent of the parties, the hearing by a 
telephone conference call from a State agency office. If the hearing is 
conducted via telephone conference call the parties and their 
representatives must have the option to participate in person or via 
telephone.
    (3) Where the State agency is not able, for any reason, to conduct a 
telephonic hearing under paragraph (m)(2) of this section, the State 
agencies in the States where the parties are located must take evidence 
and hold the hearing in the same manner as used for appealed interstate 
unemployment claims in those States, to the extent

[[Page 12]]

that such procedures are consistent with this section.



Sec.  658.418  Decision of the State hearing official.

    (a) The State hearing official may:
    (1) Rule that it lacks jurisdiction over the case;
    (2) Rule that the complaint has been withdrawn properly in writing;
    (3) Rule that reasonable cause exists to believe that the request 
has been abandoned; or
    (4) Render such other rulings as are appropriate to resolve the 
issues in question.
    However, the State hearing official does not have authority or 
jurisdiction to consider the validity or constitutionality of the ES 
regulations or of the Federal statutes under which they are promulgated.
    (b) Based on the entire record, including the investigations and 
determinations of the ES offices and State agencies and any evidence 
provided at the hearing, the State hearing official must prepare a 
written decision. The State hearing official must send a copy of the 
decision stating the findings of fact and conclusions of law, and the 
reasons therefor to the complainant, the respondent, entities serving as 
amicus capacity (if any), the State agency, the Regional Administrator, 
and the Solicitor of Labor, Attn: Associate Solicitor for Employment and 
Training Legal Services, Department of Labor, Room N2101, 200 
Constitution Avenue NW., Washington, DC 20210. The notification to the 
complainant and respondent must be sent by certified mail or by other 
legally viable means.
    (c) All decisions of a State hearing official must be accompanied by 
a written notice informing the parties (not including the Regional 
Administrator, the Solicitor of Labor, or entities serving in an amicus 
capacity) that they may appeal the judge's decision within 20 working 
days of the certified date of receipt of the decision, and they may file 
an appeal in writing with the Regional Administrator. The notice must 
give the address of the Regional Administrator.



Sec.  658.419  Apparent violations.

    (a) If a SWA, ES office employee, or outreach worker, observes, has 
reason to believe, or is in receipt of information regarding a suspected 
violation of employment-related laws or ES regulations by an employer, 
except as provided at Sec.  653.503 of this chapter (field checks) or 
Sec.  658.411 (complaints), the employee must document the suspected 
violation and refer this information to the ES office manager.
    (b) If the employer has filed a job order with the ES office within 
the past 12 months, the ES office must attempt informal resolution 
provided at Sec.  658.411.
    (c) If the employer has not filed a job order with the ES office 
during the past 12 months, the suspected violation of an employment-
related law must be referred to the appropriate enforcement agency in 
writing.

               When a Complaint Rises to the Federal Level



Sec.  658.420  Responsibilities of the Employment and Training 
Administration regional office.

    (a) Each Regional Administrator must establish and maintain a 
Complaint System within each ETA regional office.
    (b) The Regional Administrator must designate Department of Labor 
officials to handle ES regulation-related complaints as follows:
    (1) Any complaints received either at the local and State level or 
at the ETA regional office, that allege violations of civil rights laws 
and regulations such as those under Title VI of the Civil Rights Act or 
sec. 188 of WIOA, including for beneficiaries (as defined in 29 CFR 
38.4) only, on the basis of citizenship status or participant status, as 
well as reprisal for protected activity, must immediately be logged and 
directed or forwarded to the recipient's Equal Opportunity Officer or 
the CRC.
    (2) All complaints alleging discrimination on the basis of genetic 
information must be assigned to a Regional Director for Equal 
Opportunity and Special Review and, where appropriate, handled in 
accordance with procedures Coordinated Enforcement at 29 CFR part 31.

[[Page 13]]

    (3) All complaints other than those described in paragraphs (b)(1) 
and (2) of this section, must be assigned to a regional office official 
designated by the Regional Administrator, provided that the regional 
office official designated to handle MSFW complaints must be the 
Regional Monitor Advocate (RMA).
    (c) Except for those complaints under paragraphs (b)(1) and (2) of 
this section, the Regional Administrator must designate Department of 
Labor officials to handle employment-related law complaints in 
accordance with Sec.  658.411, provided that the regional official 
designated to handle MSFW employment-related law complaints must be the 
RMA. The RMA must follow up monthly on all complaints filed by MSFWs 
including complaints under paragraphs (b)(1) and (2) of this section.
    (d) The Regional Administrator must ensure that all complaints and 
all related documents and correspondence are logged with a notation of 
the nature of each item.



Sec.  658.421  Handling of Wagner-Peyser Act Employment Service 
regulation-related complaints.

    (a)(1) Except as provided below in paragraph (a)(2) of this section, 
no complaint alleging a violation of the ES regulations may be handled 
at the ETA regional office level until the complainant has exhausted the 
SWA administrative remedies set forth at Sec. Sec.  658.411 through 
658.418. If the Regional Administrator determines that a complaint has 
been prematurely filed with an ETA regional office, the Regional 
Administrator must inform the complainant within 10 working days in 
writing that the complainant must first exhaust those remedies before 
the complaint may be filed in the regional office. A copy of this letter 
and a copy of the complaint also must be sent to the State 
Administrator.
    (2) If a complaint is submitted directly to the Regional 
Administrator and if he/she determines that the nature and scope of a 
complaint described in paragraph (a) of this section is such that the 
time required to exhaust the administrative procedures at the SWA level 
would adversely affect a significant number of individuals, the RA must 
accept the complaint and take the following action:
    (i) If the complaint is filed against an employer, the regional 
office must handle the complaint in a manner consistent with the 
requirements imposed upon State agencies by Sec. Sec.  658.411 and 
658.418. A hearing must be offered to the parties once the Regional 
Administrator makes a determination on the complaint.
    (ii) If the complaint is filed against a SWA, the regional office 
must follow procedures established at Sec.  658.411(d).
    (b) The ETA regional office is responsible for handling appeals of 
determinations made on complaints at the SWA level. An appeal includes 
any letter or other writing which the Regional Administrator reasonably 
understands to be requesting review if it is received by the regional 
office and signed by a party to the complaint.
    (c)(1) Once the Regional Administrator receives a timely appeal, he/
she must request the complete SWA file, including the original 
Complaint/Referral Form from the appropriate SWA.
    (2) The Regional Administrator must review the file in the case and 
must determine within 10 business days whether any further investigation 
or action is appropriate; however if the Regional Administrator 
determines that he/she needs to request legal advice from the Office of 
the Solicitor at the U.S. Department of Labor then the Regional 
Administrator is allowed 20 business days to make this determination.
    (d) If the Regional Administrator determines that no further action 
is warranted, the Regional Administrator will send his/her determination 
in writing to the appellant within 5 days of the determination, with a 
notification that the appellant may request a hearing before a 
Department of Labor Administrative Law Judge (ALJ) by filing a hearing 
request in writing with the Regional Administrator within 20 working 
days of the appellant's receipt of the notification.
    (e) If the Regional Administrator determines that further 
investigation or other action is warranted, the Regional Administrator 
must undertake such an investigation or other action necessary to 
resolve the complaint.

[[Page 14]]

    (f) After taking the actions described in paragraph (e) of this 
section, the Regional Administrator must either affirm, reverse, or 
modify the decision of the State hearing official, and must notify each 
party to the State hearing official's hearing or to whom the State 
office determination was sent, notice of the determination and notify 
the parties that they may appeal the determination to the Department of 
Labor's Office of Administrative Law Judges within 20 business days of 
the party's receipt of the notice.
    (g) If the Regional Administrator finds reason to believe that a SWA 
or one of its ES offices has violated ES regulations, the Regional 
Administrator must follow the procedures set forth at subpart H of this 
part.



Sec.  658.422  Handling of employment-related law complaints by the 
Regional Administrator.

    (a) This section applies to all complaints submitted directly to the 
Regional Administrator or his/her representative.
    (b) Each complaint filed by an MSFW alleging violation(s) of 
employment-related laws must be taken in writing, logged, and referred 
to the appropriate enforcement agency for prompt action.
    (c) Each complaint submitted by a non-MSFW alleging violation(s) of 
employment-related laws must be logged and referred to the appropriate 
enforcement agency for prompt action.
    (d) Upon referring the complaint in accordance with paragraphs (b) 
and (c) of this section, the regional official must inform the 
complainant of the enforcement agency (and individual, if known) to 
which the complaint was referred.



Sec.  658.424  Proceedings before the Office of Administrative Law Judges.

    (a) If a party requests a hearing pursuant to Sec.  658.421 or Sec.  
658.707, the Regional Administrator must:
    (1) Send the party requesting the hearing, and all other parties to 
the prior State level hearing, a written notice (hard copy or 
electronic) that the matter will be referred to the Office of 
Administrative Law Judges for a hearing;
    (2) Compile four hearing files (hard copy or electronic) containing 
copies of all documents relevant to the case, indexed and compiled 
chronologically; and
    (3) Send simultaneously one hearing file to the Department of Labor 
Chief Administrative Law Judge, 800 K Street NW., Suite 400N, 
Washington, DC 20001-8002, one hearing file to the OWI Administrator, 
and one hearing file to the Solicitor of Labor, Attn: Associate 
Solicitor for Employment and Training Legal Services, and retain one 
hearing file.
    (b) Proceedings under this section are governed by the rules of 
practice and procedure at subpart A of 29 CFR part 18, Rule of Practice 
and Procedure for Administrative Hearings before the Office of 
Administrative Law Judges, except where otherwise specified in this 
section or at Sec.  658.425.
    (c) Upon receipt of a hearing file, the ALJ designated to the case 
must notify the party requesting the hearing, all parties to the prior 
State hearing official hearing (if any), the State agency, the Regional 
Administrator, the OWI Administrator, and the Solicitor of Labor of the 
receipt of the case. After conferring all the parties, the ALJ may 
decide to make a determination on the record in lieu of scheduling a 
hearing.
    (d) The ALJ may decide to consolidate cases and conduct hearings on 
more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously.
    (e) If the parties to the hearing are located in more than one State 
or are located in the same State but access to the hearing location is 
extremely inconvenient for one or more parties as determined by the ALJ, 
the ALJ must:
    (1) Whenever possible, hold a single hearing, at a location 
convenient to all parties or their representatives wishing to appear and 
present evidence, with all such parties and/or their representatives 
present.
    (2) If a hearing location cannot be established by the ALJ at a 
location pursuant to paragraph (e)(1) of this section, the ALJ may 
conduct, with the consent of the parties, the hearing by a

[[Page 15]]

telephone conference call. If the hearing is conducted via telephone 
conference call the parties and their representatives must have the 
option to participate in person or via telephone.
    (3) Where the ALJ is unable, for any reason, to conduct a telephonic 
hearing under paragraph (e)(2) of this section, the ALJ must confer with 
the parties on how to proceed.
    (f) Upon deciding to hold a hearing, the ALJ must notify all 
involved parties of the date, time, and place of the hearing.
    (g) The parties to the hearing must be afforded the opportunity to 
present, examine, and cross-examine witnesses. The ALJ may elicit 
testimony from witnesses, but may not act as advocate for any party. The 
ALJ has the authority to issue subpoenas.
    (h) The ALJ must receive, and make part of the record, documentary 
evidence offered by any party and accepted at the hearing, provided that 
copies of such evidence is provided to the other parties to the 
proceeding prior to the hearing at the time required by the ALJ.
    (i) Technical rules of evidence do not apply to hearings conducted 
pursuant to this part, but rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination must be applied where reasonably 
necessary by the ALJ conducting the hearing. The ALJ may exclude 
irrelevant, immaterial, or unduly repetitious evidence.
    (j) The case record, or any portion thereof, must be available for 
inspection and copying by any party to the hearing at, prior to, or 
subsequent to the hearing upon request. Special procedures may be used 
for disclosure of medical and psychological records such as disclosure 
to a physician designated by the individual concerned.
    (k) The ALJ must, if feasible, encourage resolution of the dispute 
by conciliation at any time prior to the conclusion of the hearing.



Sec.  658.425  Decision of Department of Labor Administrative Law Judge.

    (a) The ALJ may:
    (1) Rule that he/she lacks jurisdiction over the case;
    (2) Rule that the appeal has been withdrawn, with the written 
consent of all parties;
    (3) Rule that reasonable cause exists to believe that the appeal has 
been abandoned; or
    (4) Render such other rulings as are appropriate to the issues in 
question. However, the ALJ does not have jurisdiction to consider the 
validity or constitutionality of the ES regulations or of the Federal 
statutes under which they are promulgated.
    (b) Based on the entire record, including any legal briefs, the 
record before the State agency, the investigation (if any) and 
determination of the Regional Administrator, and evidence provided at 
the hearing, the ALJ must prepare a written decision. The ALJ must send 
a copy of the decision stating the findings of fact and conclusions of 
law to the parties to the hearing, including the State agency, the 
Regional Administrator, the OWI Administrator, and the Solicitor, and to 
entities filing amicus briefs (if any).
    (c) The decision of the ALJ serves as the final decision of the 
Secretary.



Sec.  658.426  Complaints against the United States Employment Service.

    (a) Complaints alleging that an ETA regional office or the National 
Office has violated ES regulations must be mailed to the Assistant 
Secretary for Employment and Training, U.S. Department of Labor, 
Washington, DC 20210. Such complaints must include:
    (1) A specific allegation of the violation;
    (2) The date of the incident;
    (3) Location of the incident;
    (4) The individual alleged to have committed the violation; and
    (5) Any other relevant information available to the complainant.
    (b) The Assistant Secretary or the Regional Administrator as 
designated must make a determination and respond to the complainant 
after investigation of the complaint.

[[Page 16]]



Subpart F_Discontinuation of Services to Employers by the Wagner-Peyser 
                         Act Employment Service



Sec.  658.500  Scope and purpose of subpart.

    This subpart contains the regulations governing the discontinuation 
of services provided pursuant part 653 of this chapter to employers by 
the ETA, including SWAs.



Sec.  658.501  Basis for discontinuation of services.

    (a) The SWA must initiate procedures for discontinuation of services 
to employers who:
    (1) Submit and refuse to alter or withdraw job orders containing 
specifications which are contrary to employment-related laws;
    (2) Submit job orders and refuse to provide assurances, in 
accordance with the Agricultural Recruitment System for U.S. Workers at 
part 653, subpart F, of this chapter, that the jobs offered are in 
compliance with employment-related laws, or to withdraw such job orders;
    (3) Are found through field checks or otherwise to have either 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders;
    (4) Are found by a final determination by an appropriate enforcement 
agency to have violated any employment-related laws and notification of 
this final determination has been provided to the Department or the SWA 
by that enforcement agency;
    (5) Are found to have violated ES regulations pursuant to Sec.  
658.411;
    (6) Refuse to accept qualified workers referred through the 
clearance system;
    (7) Refuse to cooperate in the conduct of field checks conducted 
pursuant to Sec.  653.503 of this chapter; or
    (8) Repeatedly cause the initiation of the procedures for 
discontinuation of services pursuant to paragraphs (a)(1) through (7) of 
this section.
    (b) The SWA may discontinue services immediately if, in the judgment 
of the State Administrator, exhaustion of the administrative procedures 
set forth in this subpart in paragraphs (a)(1) through (7) of this 
section would cause substantial harm to a significant number of workers. 
In such instances, procedures at Sec. Sec.  658.503 and 658.504 must be 
followed.
    (c) If it comes to the attention of a ES office or SWA that an 
employer participating in the ES may not have complied with the terms of 
its temporary labor certification, under, for example the H-2A and H-2B 
visa programs, State agencies must engage in the procedures for 
discontinuation of services to employers pursuant to paragraphs (a)(1) 
through (8) of this section and simultaneously notify the Chicago 
National Processing Center (CNPC) of the alleged non-compliance for 
investigation and consideration of ineligibility pursuant to Sec.  
655.184 or Sec.  655.73 of this chapter respectively for subsequent 
temporary labor certification.



Sec.  658.502  Notification to employers.

    (a) The SWA must notify the employer in writing that it intends to 
discontinue the provision of employment services pursuant to this part 
and parts 652, 653, and 654 of this chapter, and the reason therefore.
    (1) Where the decision is based on submittal and refusal to alter or 
to withdraw job orders containing specifications contrary to employment-
related laws, the SWA must specify the date the order was submitted, the 
job order involved, the specifications contrary to employment-related 
laws and the laws involved. The SWA must notify the employer in writing 
that all employment services will be terminated in 20 working days 
unless the employer within that time:
    (i) Provides adequate evidence that the specifications are not 
contrary to employment-related laws; or
    (ii) Withdraws the specifications and resubmits the job order in 
compliance with all employment-related laws; or
    (iii) If the job is no longer available, makes assurances that all 
future job orders submitted will be in compliance with all employment-
related laws; or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (2) Where the decision is based on the employer's submittal of an 
order and refusal to provide assurances that the job is in compliance 
with employment-

[[Page 17]]

related laws or to withdraw the order, the SWA must specify the date the 
order was submitted, the job order involved, and the assurances 
involved. The employer must be notified that all employment services 
will be terminated within 20 working days unless the employer within 
that time:
    (i) Resubmits the order with the appropriate assurances; or
    (ii) If the job is no longer available, make assurances that all 
future job orders submitted will contain all necessary assurances that 
the job offered is in compliance with employment-related laws; or
    (iii) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (3) Where the decision is based on a finding that the employer has 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders, the 
SWA must specify the basis for that determination. The employer must be 
notified that all employment services will be terminated in 20 working 
days unless the employer within that time:
    (i) Provides adequate evidence that terms and conditions of 
employment were not misrepresented; or
    (ii) Provides adequate evidence that there was full compliance with 
the assurances made on the job orders; or
    (iii) Provides resolution of a complaint which is satisfactory to a 
complainant referred by the ES; and
    (iv) Provides adequate assurance that specifications on future 
orders will accurately represent the terms and conditions of employment 
and that there will be full compliance with all job order assurances; or
    (v) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (4) Where the decision is based on a final determination by an 
enforcement agency, the SWA must specify the enforcement agency's 
findings of facts and conclusions of law. The employer must be notified 
that all employment services will be terminated in 20 working days 
unless the employer within that time:
    (i) Provides adequate evidence that the enforcement agency has 
reversed its ruling and that the employer did not violate employment-
related laws; or
    (ii) Provides adequate evidence that the appropriate fines have been 
paid and/or appropriate restitution has been made; and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future.
    (5) Where the decision is based on a finding of a violation of ES 
regulations under Sec.  658.411, the SWA must specify the finding. The 
employer must be notified that all employment services will be 
terminated in 20 working days unless the employer within that time:
    (i) Provides adequate evidence that the employer did not violate ES 
regulations; or
    (ii) Provides adequate evidence that appropriate restitution has 
been made or remedial action taken; and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future; or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (6) Where the decision is based on an employer's failure to accept 
qualified workers referred through the clearance system, the SWA must 
specify the workers referred and not accepted. The employer must be 
notified that all employment services will be terminated in 20 working 
days unless the employer within that time:
    (i) Provides adequate evidence that the workers were accepted; or
    (ii) Provides adequate evidence that the workers were not available 
to accept the job; or
    (iii) Provides adequate evidence that the workers were not 
qualified; and
    (iv) Provides adequate assurances that qualified workers referred in 
the future will be accepted; or
    (v) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (7) Where the decision is based on lack of cooperation in the 
conduct of field checks, the SWA must specify the lack of cooperation. 
The employer must be notified that all employment

[[Page 18]]

services will be terminated in 20 working days unless the employer 
within that time:
    (i) Provides adequate evidence that he/she did cooperate; or
    (ii) Cooperates immediately in the conduct of field checks; and
    (iii) Provides assurances that he/she will cooperate in future field 
checks in further activity; or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (b) If the employer chooses to respond pursuant to this section by 
providing documentary evidence or assurances, he/she must at the same 
time request a hearing if such hearing is desired in the event that the 
SWA does not accept the documentary evidence or assurances as adequate.
    (c) Where the decision is based on repeated initiation of procedures 
for discontinuation of services, the employer must be notified that 
services have been terminated.
    (d) If the employer makes a timely request for a hearing, in 
accordance with this section, the SWA must follow procedures set forth 
at Sec.  658.411 and notify the complainant whenever the discontinuation 
of services is based on a complaint pursuant to Sec.  658.411.



Sec.  658.503  Discontinuation of services.

    (a) If the employer does not provide a satisfactory response in 
accordance with Sec.  658.502, within 20 working days, or has not 
requested a hearing, the SWA must immediately terminate services to the 
employer.
    (b) If services are discontinued to an employer subject to Federal 
Contractor Job Listing Requirements, the SWA must notify the ETA 
regional office immediately.



Sec.  658.504  Reinstatement of services.

    (a) Services may be reinstated to an employer after discontinuation 
under Sec.  658.503(a) and (b), if:
    (1) The State is ordered to do so by a Federal ALJ Judge or Regional 
Administrator; or
    (2)(i) The employer provides adequate evidence that any policies, 
procedures or conditions responsible for the previous discontinuation of 
services have been corrected and that the same or similar circumstances 
are not likely to occur in the future; and
    (ii) The employer provides adequate evidence that he/she has 
responded adequately to any findings of an enforcement agency, SWA, or 
ETA, including restitution to the complainant and the payment of any 
fines, which were the basis of the discontinuation of services.
    (b) The SWA must notify the employer requesting reinstatement within 
20 working days whether his/her request has been granted. If the State 
denies the request for reinstatement, the basis for the denial must be 
specified and the employer must be notified that he/she may request a 
hearing within 20 working days.
    (c) If the employer makes a timely request for a hearing, the SWA 
must follow the procedures set forth at Sec.  658.417.
    (d) The SWA must reinstate services to an employer if ordered to do 
so by a State hearing official, Regional Administrator, or Federal ALJ 
as a result of a hearing offered pursuant to paragraph (c) of this 
section.



  Subpart G_Review and Assessment of State Workforce Agency Compliance 
                   With Employment Service Regulations



Sec.  658.600  Scope and purpose of subpart.

    This subpart sets forth the regulations governing review and 
assessment of State Workforce Agency (SWA) compliance with the ES 
regulations at this part and parts 651, 652, 653, and 654 of this 
chapter. All recordkeeping and reporting requirements contained in this 
part and part 653 of this chapter have been approved by the Office of 
Management and Budget as required by the Paperwork Reduction Act of 
1980.



Sec.  658.601  State Workforce Agency responsibility.

    (a) Each SWA must establish and maintain a self-appraisal system for 
ES operations to determine success in reaching goals and to correct 
deficiencies in performance. The self-appraisal system must include 
numerical (quantitative) appraisal and non-numerical (qualitative) 
appraisal.

[[Page 19]]

    (1) Numerical appraisal at the ES office level must be conducted as 
follows:
    (i) Performance must be measured on a quarterly-basis against 
planned service levels as stated in the Unified or Combined State Plan 
(``State Plan''). The State Plan must be consistent with numerical goals 
contained in ES office plans.
    (ii) To appraise numerical activities/indicators, actual results as 
shown on the Department's ETA 9002A report, or any successor report 
required by the Department must be compared to planned levels. 
Differences between achievement and plan levels must be identified.
    (iii) When the numerical appraisal of required activities/indicators 
identifies significant differences from planned levels, additional 
analysis must be conducted to isolate possible contributing factors. 
This data analysis must include, as appropriate, comparisons to past 
performance, attainment of State Plan goals and consideration of 
pertinent non-numerical factors.
    (iv) Results of ES office numerical reviews must be documented and 
significant deficiencies identified. A corrective action plan as 
described in paragraph (a)(6) of this section must be developed to 
address these deficiencies.
    (v) The result of ES office appraisal, including corrective action 
plans, must be communicated in writing to the next higher level of 
authority for review. This review must cover adequacy of analysis, 
appropriateness of corrective actions, and need for higher level 
involvement. When this review is conducted at an area or district 
office, a report describing ES office performance within the area or 
district jurisdiction must be communicated to the SWA on a quarterly 
basis.
    (2) Numerical appraisal at the SWA level must be conducted as 
follows:
    (i) Performance must be measured on a quarterly basis against 
planned service levels as stated in the State Plan. The State Plan must 
be consistent with numerical goals contained in ES office plans.
    (ii) To appraise these key numerical activities/indicators, actual 
results as shown on the ETA 9002A report, or any successor report 
required by the Department must be compared to planned levels. 
Differences between achievement and plan levels must be identified.
    (iii) The SWA must review statewide data and performance against 
planned service levels as stated in the State Plan on at least a 
quarterly basis to identify significant statewide deficiencies and to 
determine the need for additional analysis, including identification of 
trends, comparisons to past performance, and attainment of State Plan 
goals.
    (iv) Results of numerical reviews must be documented and significant 
deficiencies identified. A corrective action plan as described in 
paragraph (a)(5) of this section must be developed to address these 
deficiencies. These plans must be submitted to the ETA Regional Office 
as part of the periodic performance process described at Sec.  
658.603(d)(2).
    (3) Non-numerical (qualitative) appraisal of ES office activities 
must be conducted at least annually as follows:
    (i) Each ES office must assess the quality of its services to 
applicants, employers, and the community and its compliance with Federal 
regulations.
    (ii) At a minimum, non-numerical review must include an assessment 
of the following factors:
    (A) Appropriateness of services provided to participants and 
employers;
    (B) Timely delivery of services to participants and employers;
    (C) Staff responsiveness to individual participants and employer 
needs;
    (D) Thoroughness and accuracy of documents prepared in the course of 
service delivery; and
    (E) Effectiveness of ES interface with external organizations, such 
as other ETA-funded programs, community groups, etc.
    (iii) Non-numerical review methods must include:
    (A) Observation of processes;
    (B) Review of documents used in service provisions; and
    (C) Solicitation of input from applicants, employers, and the 
community.
    (iv) The result of non-numerical reviews must be documented and 
deficiencies identified. A corrective action plan addressing these 
deficiencies as described in paragraph (a)(6) of this section must be 
developed.

[[Page 20]]

    (v) The result of ES office non-numerical appraisal, including 
corrective actions, must be communicated in writing to the next higher 
level of authority for review. This review must cover thoroughness and 
adequacy of ES office appraisal, appropriateness of corrective actions, 
and need for higher level involvement. When this review is conducted at 
an area or district level, a report summarizing local ES office 
performance within that jurisdiction must be communicated to the SWA on 
an annual basis.
    (4) As part of its oversight responsibilities, the SWA must conduct 
onsite reviews in those ES offices which show continuing internal 
problems or deficiencies in performance as indicated by such sources as 
data analysis, non-numerical appraisal, or other sources of information.
    (5) Non-numerical (qualitative) review of SWA ES activities must be 
conducted as follows:
    (i) SWA operations must be assessed annually to determine compliance 
with Federal regulations.
    (ii) Results of non-numerical reviews must be documented and 
deficiencies identified. A corrective action plan addressing these 
deficiencies must be developed.
    (6) Corrective action plans developed to address deficiencies 
uncovered at any administrative level within the State as a result of 
the self-appraisal process must include:
    (i) Specific descriptions of the type of action to be taken, the 
time frame involved, and the assignment of responsibility.
    (ii) Provision for the delivery of technical assistance as needed.
    (iii) A plan to conduct follow-up on a timely basis to determine if 
action taken to correct the deficiencies has been effective.
    (7)(i) The provisions of the ES regulations which require numerical 
and non-numerical assessment of service to special applicant groups 
(e.g., services to veterans at 20 CFR part 1001--Services for Veterans 
and services to MSFWs at this part and part 653 of this chapter), are 
supplementary to the provisions of this section.
    (ii) Each State Administrator and ES office manager must ensure 
their staff know and carry out ES regulations, including regulations on 
performance standards and program emphases, and any corrective action 
plans imposed by the SWA or by the Department.
    (iii) Each State Administrator must ensure the SWA complies with its 
approved State Plan.
    (iv) Each State Administrator must ensure to the maximum extent 
feasible the accuracy of data entered by the SWA into Department-
required management information systems. Each SWA must establish and 
maintain a data validation system pursuant to Department instructions. 
The system must review every local ES office at least once every 4 
years. The system must include the validation of time distribution 
reports and the review of data gathering procedures.
    (b) [Reserved]



Sec.  658.602  Employment and Training Administration National Office responsibility.

    The ETA National Office must:
    (a) Monitor ETA Regional Offices' operations under ES regulations;
    (b) From time to time, conduct such special reviews and audits as 
necessary to monitor ETA regional office and SWA compliance with ES 
regulations;
    (c) Offer technical assistance to the ETA regional offices and SWAs 
in carrying out ES regulations and programs;
    (d) Have report validation surveys conducted in support of resource 
allocations; and
    (e) Develop tools and techniques for reviewing and assessing SWA 
performance and compliance with ES regulations.
    (f) ETA must appoint a National Monitor Advocate (NMA), who must 
devote full time to the duties set forth in this subpart. The NMA must:
    (1) Review the effective functioning of the Regional Monitor 
Advocates (RMAs) and SMAs;
    (2) Review the performance of SWAs in providing the full range of 
employment services to MSFWs;
    (3) Take steps to resolve or refer ES-related problems of MSFWs 
which come to his/her attention;

[[Page 21]]

    (4) Take steps to refer non ES-related problems of MSFWs which come 
to his/her attention;
    (5) Recommend to the Administrator changes in policy toward MSFWs; 
and
    (6) Serve as an advocate to improve services for MSFWs within the ES 
system. The NMA must be a member of the National Farm Labor Coordinated 
Enforcement Staff Level Working Committee and other Occupational Safety 
and Health Administration (OSHA) and Wage and Hour Division (WHD) task 
forces, and other committees as appropriate.
    (g) The NMA must be appointed by the Office of Workforce Investment 
Administrator (Administrator) after informing farmworker organizations 
and other organizations with expertise concerning MSFWs of the opening 
and encouraging them to refer qualified applicants to apply through the 
Federal merit system. Among qualified candidates, determined through 
merit systems procedures, individuals must be sought who meet the 
criteria used in the selection of the SMAs, as provided in SWA self-
monitoring requirements at Sec.  653.108(b) of this chapter.
    (h) The NMA must be assigned staff necessary to fulfill effectively 
all the responsibilities set forth in this subpart.
    (i) The NMA must submit the Annual Report to the OWI Administrator, 
the ETA Assistant Secretary, and the National Farm Labor Coordinated 
Enforcement Committee covering the matters set forth in this subpart.
    (j) The NMA must monitor and assess SWA compliance with ES 
regulations affecting MSFWs on a continuing basis. His/her assessment 
must consider:
    (1) Information from RMAs and SMAs;
    (2) Program performance data, including the service indicators;
    (3) Periodic reports from regional offices;
    (4) All Federal on-site reviews;
    (5) Selected State on-site reviews;
    (6) Other relevant reports prepared by the ES;
    (7) Information received from farmworker organizations and 
employers; and
    (8) His/her personal observations from visits to SWAs, ES offices, 
agricultural work sites, and migrant camps. In the Annual Report, the 
NMA must include both a quantitative and qualitative analysis of his/her 
findings and the implementation of his/her recommendations by State and 
Federal officials, and must address the information obtained from all of 
the foregoing sources.
    (k) The NMA must review the activities of the State/Federal 
monitoring system as it applies to services to MSFWs and the Complaint 
System including the effectiveness of the regional monitoring function 
in each region and must recommend any appropriate changes in the 
operation of the system. The NMA's findings and recommendations must be 
fully set forth in the Annual Report.
    (l) If the NMA finds the effectiveness of any RMA has been 
substantially impeded by the Regional Administrator or other regional 
office official, he/she must, if unable to resolve such problems 
informally, report and recommend appropriate actions directly to the OWI 
Administrator. If the NMA receives information that the effectiveness of 
any SMA has been substantially impeded by the State Administrator or 
other State or Federal ES official, he/she must, in the absence of a 
satisfactory informal resolution at the regional level, report and 
recommend appropriate actions directly to the OWI Administrator.
    (m) The NMA must be informed of all proposed changes in policy and 
practice within the ES, including ES regulations, which may affect the 
delivery of services to MSFWs. The NMA must advise the Administrator 
concerning all such proposed changes which may adversely affect MSFWs. 
The NMA must propose directly to the OWI Administrator changes in ES 
policy and administration which may substantially improve the delivery 
of services to MSFWs. He/she also must recommend changes in the funding 
of SWAs and/or adjustment or reallocation of the discretionary portions 
of funding formulae.
    (n) The NMA must participate in the review and assessment activities 
required in this section and Sec. Sec.  658.700 through 658.711. As part 
of such participation, the NMA, or if he/she is unable

[[Page 22]]

to participate, a RMA must accompany the National Office review team on 
National Office on-site reviews. The NMA must engage in the following 
activities in the course of each State on-site review:
    (1) He/she must accompany selected outreach workers on their field 
visits.
    (2) He/she must participate in a random field check(s) of migrant 
camps or work site(s) where MSFWs have been placed on inter or 
intrastate clearance orders.
    (3) He/she must contact local WIOA sec. 167 National Farmworker Jobs 
Program grantees or other farmworker organizations as part of the on-
site review, and, discuss with representatives of these organizations 
current trends and any other pertinent information concerning MSFWs.
    (4) He/she must meet with the SMA and discuss the full range of the 
employment services to MSFWs, including monitoring and the Complaint 
System.
    (o) In addition to the duties specified in paragraph (f)(8) of this 
section, the NMA each year during the harvest season must visit the four 
States with the highest level of MSFW activity during the prior fiscal 
year, if they are not scheduled for a National Office on-site review 
during the current fiscal year, and must:
    (1) Meet with the SMA and other SWA staff to discuss MSFW service 
delivery; and
    (2) Contact representatives of MSFW organizations and interested 
employer organizations to obtain information concerning ES delivery and 
coordination with other agencies.
    (p) The NMA must perform duties specified in Sec. Sec.  658.700 
through 765.711. As part of this function, he/she must monitor the 
performance of regional offices in imposing corrective action. The NMA 
must report any deficiencies in performance to the Administrator.
    (q) The NMA must establish routine and regular contacts with WIOA 
sec. 167 National Farmworker Jobs Program grantees, other farmworker 
organizations and agricultural employers and/or employer organizations. 
He/she must attend conferences or meetings of these groups wherever 
possible and must report to the Administrator and the National Farm 
Labor Coordinated Enforcement Committee on these contacts when 
appropriate. The NMA must include in the Annual Report recommendations 
about how the Department might better coordinate ES and WIOA sec. 167 
National Farmworker Jobs Program services as they pertain to MSFWs.
    (r) In the event that any SMA or RMA, enforcement agency, or MSFW 
group refers a matter to the NMA which requires emergency action, he/she 
must assist them in obtaining action by appropriate agencies and staff, 
inform the originating party of the action taken, and, upon request, 
provide written confirmation.
    (s) Through all the mechanisms provided in this subpart, the NMA 
must aggressively seek to ascertain and remedy, if possible, systemic 
deficiencies in the provisions of employment services and protections 
afforded by these regulations to MSFWs. The NMA must:
    (1) Use the regular reports on complaints submitted by SWAs and ETA 
regional offices to assess the adequacy of these systems and to 
determine the existence of systemic deficiencies.
    (2) Provide technical assistance to ETA regional office and State 
Workforce Agency staff for administering the Complaint System, and any 
other employment services as appropriate.
    (3) Recommend to the Regional Administrator specific instructions 
for action by regional office staff to correct any ES-related systemic 
deficiencies. Prior to any ETA review of regional office operations 
concerning employment services to MSFWs, the NMA must provide to the 
Regional Administrator a brief summary of ES-related services to MSFWs 
in that region and his/her recommendations for incorporation in the 
regional review materials as the Regional Administrator and ETA 
reviewing organization deem appropriate.
    (4) Recommend to the National Farm Labor Coordinated Enforcement 
Committee specific instructions for action by WHD and OSHA regional 
office staff to correct any non-ES-related systemic deficiencies of 
which he/she is aware.

[[Page 23]]



Sec.  658.603  Employment and Training Administration Regional Office
responsibility.

    (a) The Regional Administrator must have responsibility for the 
regular review and assessment of SWA performance and compliance with ES 
regulations.
    (b) The Regional Administrator must participate with the National 
Office staff in reviewing and approving the State Plan for the SWAs 
within the region. In reviewing the State Plans the Regional 
Administrator and appropriate National Office staff must consider 
relevant factors including the following:
    (1) State Workforce Agency compliance with ES regulations;
    (2) State Workforce Agency performance against the goals and 
objectives established in the previous State Plan;
    (3) The effect which economic conditions and other external factors 
considered by the ETA in the resource allocation process may have had or 
are expected to have on the SWA's performance;
    (4) SWA adherence to national program emphasis; and
    (5) The adequacy and appropriateness of the State Plan for carrying 
out ES programs.
    (c) The Regional Administrator must assess the overall performance 
of SWAs on an ongoing basis through desk reviews and the use of required 
reporting systems and other available information.
    (d) As appropriate, Regional Administrators must conduct or have 
conducted:
    (1) Comprehensive on-site reviews of SWAs and their offices to 
review SWA organization, management, and program operations;
    (2) Periodic performance reviews of SWA operation of ES programs to 
measure actual performance against the State Plan, past performance, the 
performance of other SWAs, etc.;
    (3) Audits of SWA programs to review their program activity and to 
assess whether the expenditure of grant funds has been in accordance 
with the approved budget. Regional Administrators also may conduct 
audits through other agencies or organizations or may require the SWA to 
have audits conducted;
    (4) Validations of data entered into management information systems 
to assess:
    (i) The accuracy of data entered by the SWAs into the management 
information system;
    (ii) Whether the SWAs' data validating and reviewing procedures 
conform to Department instructions; and
    (iii) Whether SWAs have implemented any corrective action plans 
required by the Department to remedy deficiencies in their validation 
programs;
    (5) Technical assistance programs to assist SWAs in carrying out ES 
regulations and programs;
    (6) Reviews to assess whether the SWA has complied with corrective 
action plans imposed by the Department or by the SWA itself; and
    (7) Random, unannounced field checks of a sample of agricultural 
work sites to which ES placements have been made through the clearance 
system to determine and document whether wages, hours, working and 
housing conditions are as specified on the job order. If regional office 
staff find reason to believe that conditions vary from job order 
specifications, findings must be documented on the Complaint/Apparent 
Violation Referral Form and provided to the State Workforce Agency to be 
handled as an apparent violation under Sec.  658.419.
    (e) The Regional Administrator must provide technical assistance to 
SWAs to assist them in carrying out ES regulations and programs.
    (f) The Regional Administrator must appoint a RMA who must devote 
full time to the duties set forth in this subpart. The RMA must:
    (1) Review the effective functioning of the SMAs in his/her region;
    (2) Review the performance of SWAs in providing the full range of 
employment services to MSFWs;
    (3) Take steps to resolve ES-related problems of MSFWs which come to 
his/her attention;
    (4) Recommend to the Regional Administrator changes in policy 
towards MSFWs;
    (5) Review the operation of the Complaint System; and

[[Page 24]]

    (6) Serve as an advocate to improve service for MSFWs within the ES. 
The RMA must be a member of the Regional Farm Labor Coordinated 
Enforcement Committee.
    (g) The RMA must be appointed by the Regional Administrator after 
informing farmworker organizations and other organizations in the region 
with expertise concerning MSFWs of the opening and encouraging them to 
refer qualified applicants to apply through the Federal merit system. 
The RMA must have direct personal access to the Regional Administrator 
wherever he/she finds it necessary. Among qualified candidates, 
individuals must be sought who meet the criteria used in the selection 
of the SMAs, as provided in Sec.  653.108(b) of this chapter.
    (h) The Regional Administrator must ensure that staff necessary to 
fulfill effectively all the regional office responsibilities set forth 
in this section are assigned. The RMA must notify the Regional 
Administrator of any staffing deficiencies and the Regional 
Administrator must take appropriate action.
    (i) The RMA within the first 3 months of his/her tenure must 
participate in a training session(s) approved by the National Office.
    (j) At the regional level, the RMA must have primary responsibility 
for:
    (1) Monitoring the effectiveness of the Complaint System set forth 
at subpart E of this part;
    (2) Apprising appropriate State and ETA officials of deficiencies in 
the Complaint System; and
    (3) Providing technical assistance to SMAs in the region.
    (k) At the ETA regional level, the RMA must have primary 
responsibility for ensuring SWA compliance with ES regulations as it 
pertains to services to MSFWs is monitored by the regional office. He/
she must independently assess on a continuing basis the provision of 
employment services to MSFWs, seeking out and using:
    (1) Information from SMAs, including all reports and other 
documents;
    (2) Program performance data;
    (3) The periodic and other required reports from SWAs;
    (4) Federal on-site reviews;
    (5) Other reports prepared by the National Office;
    (6) Information received from farmworker organizations and 
employers; and
    (7) Any other pertinent information which comes to his/her attention 
from any possible source.
    (8) In addition, the RMA must consider his/her personal observations 
from visits to ES offices, agricultural work sites, and migrant camps.
    (l) The RMA must assist the Regional Administrator and other line 
officials in applying appropriate corrective and remedial actions to 
State agencies.
    (m) The Regional Administrator's quarterly report to the National 
Office must include the RMA's summary of his/her independent assessment 
as required in paragraph (f)(5) of this section. The fourth quarter 
summary must include an annual summary from the region. The summary also 
must include both a quantitative and a qualitative analysis of his/her 
reviews and must address all the matters with respect to which he/she 
has responsibilities under these regulations.
    (n) The RMA must review the activities and performance of the SMAs 
and the State monitoring system in the region, and must recommend any 
appropriate changes in the operation of the system to the Regional 
Administrator. The RMA's review must include a determination whether the 
SMA:
    (1) Does not have adequate access to information;
    (2) Is being impeded in fulfilling his/her duties; or
    (3) Is making recommendations which are being consistently ignored 
by SWA officials. If the RMA believes that the effectiveness of any SMA 
has been substantially impeded by the State Administrator, other State 
agency officials, or any Federal officials, he/she must report and 
recommend appropriate actions to the Regional Administrator. Copies of 
the recommendations must be provided to the NMA electronically or in 
hard copy.
    (o) The RMA must be informed of all proposed changes in policy and 
practice within the ES, including ES regulations, which may affect the 
delivery of services to MSFWs. He/she must advise the Regional 
Administrator on all such proposed changes which, in his/her opinion, 
may adversely affect MSFWs

[[Page 25]]

or which may substantially improve the delivery of services to MSFWs.
    The RMA also may recommend changes in ES policy or regulations, as 
well as changes in the funding of State Workforce Agencies and/or 
adjustments of reallocation of the discretionary portions of funding 
formulae as they pertain to MSFWs.
    (p) The RMA must participate in the review and assessment activities 
required in this section and Sec. Sec.  658.700 through 658.711. He/she, 
an assistant, or another RMA, must participate in National Office and 
regional office on-site statewide reviews of employment services to 
MSFWs in States in the region. The RMA must engage in the following 
activities in the course of participating in an on-site SWA review:
    (1) Accompany selected outreach workers on their field visits;
    (2) Participate in a random field check of migrant camps or work 
sites where MSFWs have been placed on intrastate or interstate clearance 
orders;
    (3) Contact local WIOA sec. 167 National Farmworker Jobs Program 
grantees or other farmworker organizations as part of the on-site 
review, and must discuss with representatives of these organizations 
perceived trends, and/or other relevant information concerning MSFWs in 
the area; and
    (4) Meet with the SMA and discuss the full range of the employment 
services to MSFWs, including monitoring and the Complaint System.
    (q) During the calendar quarter preceding the time of peak MSFW 
activity in each State, the RMA must meet with the SMA and must review 
in detail the State Workforce Agency's capability for providing the full 
range of services to MSFWs as required by ES regulations, during the 
upcoming harvest season. The RMA must offer technical assistance and 
recommend to the SWA and/or the Regional Administrator any changes in 
State policy or practice that he/she finds necessary.
    (r) The RMA each year during the peak harvest season must visit each 
State in the region not scheduled for an on-site review during that 
fiscal year and must:
    (1) Meet with the SMA and other SWA staff to discuss MSFW service 
delivery; and
    (2) Contact representatives of MSFW organizations to obtain 
information concerning ES delivery and coordination with other agencies 
and interested employer organizations.
    (s) The RMA must initiate and maintain regular and personal 
contacts, including informal contacts in addition to those specifically 
required by these regulations, with SMAs in the region. In addition, the 
RMA must have personal and regular contact with the NMA. The RMA also 
must establish routine and regular contacts with WIOA sec. 167 National 
Farmworker Jobs Program grantees, other farmworker organizations and 
agricultural employers and/or employer organizations in his/her region. 
He/she must attend conferences or meetings of these groups wherever 
possible and must report to the Regional Administrator and the Regional 
Farm Labor Coordinated Enforcement Committee on these contacts when 
appropriate. He/she also must make recommendations as to how the 
Department might better coordinate ES and WIOA sec. 167 National 
Farmworker Jobs Program services to MSFWs.
    (t) The RMA must attend MSFW-related public meeting(s) conducted in 
the region. Following such meetings or hearings, the RMA must take such 
steps or make such recommendations to the Regional Administrator, as he/
she deems necessary to remedy problem(s) or condition(s) identified or 
described therein.
    (u) The RMA must attempt to achieve regional solutions to any 
problems, deficiencies, or improper practices concerning services to 
MSFWs which are regional in scope. Further, he/she must recommend 
policies, offer technical assistance, or take any other necessary steps 
as he/she deems desirable or appropriate on a regional, rather than 
State-by-State basis, to promote region-wide improvement in the delivery 
of employment services to MSFWs. He/she must facilitate region-wide 
coordination and communication regarding provision of employment 
services to MSFWs among SMAs, State

[[Page 26]]

Administrators, and Federal ETA officials to the greatest extent 
possible. In the event that any SWA or other RMA, enforcement agency, or 
MSFW group refers a matter to the RMA which requires emergency action, 
he/she must assist them in obtaining action by appropriate agencies and 
staff, inform the originating party of the action taken, and, upon 
request, provide written confirmation.
    (v) The RMA must initiate and maintain such contacts as he/she deems 
necessary with RMAs in other regions to seek to resolve problems 
concerning MSFWs who work, live, or travel through the region. He/she 
must recommend to the Regional Administrator and/or the National Office 
inter-regional cooperation on any particular matter, problem, or policy 
with respect to which inter-regional action is desirable.
    (w) The RMA must establish regular contacts with the regional 
agricultural coordinators from WHD and OSHA and any other regional staff 
from other Federal enforcement agencies and must establish contacts with 
the staff of other Department agencies represented on the Regional Farm 
Labor Coordinated Enforcement Committee and to the extent necessary, on 
other pertinent task forces or committees.
    (x) The RMA must participate in the regional reviews of the State 
Plans, and must comment to the Regional Administrator as to the SWA 
compliance with the ES regulations as they pertain to services to MSFWs, 
including the staffing of ES offices.



Sec.  658.604  Assessment and evaluation of program performance data.

    (a) State Workforce Agencies must compile program performance data 
required by the Department, including statistical information on program 
operations.
    (b) The Department must use the program performance data in 
assessing and evaluating whether each SWA has complied with ES 
regulations and its State Plan.
    (c) In assessing and evaluating program performance data, the 
Department must act in accordance with the following general principles:
    (1) The fact that the program performance data from a SWA, whether 
overall or relative to a particular program activity, indicate poor 
program performance does not by itself constitute a violation of ES 
regulations or of the State Workforce Agency's responsibilities under 
its State Plan;
    (2) Program performance data, however, may so strongly indicate that 
a SWA's performance is so poor that the data may raise a presumption 
(prima facie case) that a SWA is violating ES regulations or the State 
Plan. A SWA's failure to meet the operational objectives set forth in 
the State Plan raises a presumption that the agency is violating ES 
regulations and/or obligations under its State Plan. In such cases, the 
Department must afford the SWA an opportunity to rebut the presumption 
of a violation pursuant to the procedures at subpart H of this part.
    (3) The Department must take into account that certain program 
performance data may measure items over which SWAs have direct or 
substantial control while other data may measure items over which the 
SWA has indirect or minimal control.
    (i) Generally, for example, a SWA has direct and substantial control 
over the delivery of employment services such as referrals to jobs, job 
development contacts, counseling, referrals to career and supportive 
services, and the conduct of field checks.
    (ii) State Workforce Agencies, however, have only indirect control 
over the outcome of services. For example, SWAs cannot guarantee that an 
employer will hire a referred applicant, nor can they guarantee that the 
terms and conditions of employment will be as stated on a job order.
    (iii) Outside forces, such as a sudden heavy increase in 
unemployment rates, a strike by SWA employees, or a severe drought or 
flood, may skew the results measured by program performance data.
    (4) The Department must consider a SWA's failure to keep accurate 
and complete program performance data required by ES regulations as a 
violation of the ES regulations.

[[Page 27]]



Sec.  658.605  Communication of findings to State agencies.

    (a) The Regional Administrator must inform SWAs in writing of the 
results of review and assessment activities and, as appropriate, must 
discuss with the State Administrator the impact or action required by 
the Department as a result of review and assessment activities.
    (b) The ETA National Office must transmit the results of any review 
and assessment activities it conducted to the Regional Administrator who 
must send the information to the SWA.
    (c) Whenever the review and assessment indicates a SWA violation of 
ES regulations or its State Plan, the Regional Administrator must follow 
the procedures set forth at subpart H of this part.
    (d) Regional Administrators must follow-up any corrective action 
plan imposed on a SWA under subpart H of this part by further review and 
assessment of the State Workforce Agency pursuant to this subpart.



  Subpart H_Federal Application of Remedial Action to State Workforce 
                                Agencies



Sec.  658.700  Scope and purpose of subpart.

    This subpart sets forth the procedures which the Department must 
follow upon either discovering independently or receiving from other(s) 
information indicating that SWAs may not be adhering to ES regulations.



Sec.  658.701  Statements of policy.

    (a) It is the policy of the Department to take all necessary action, 
including the imposition of the full range of sanctions set forth in 
this subpart, to ensure State Workforce Agencies comply with all 
requirements established by ES regulations.
    (b) It is the policy of the Department to initiate decertification 
procedures against SWAs in instances of serious or continual violations 
of ES regulations if less stringent remedial actions taken in accordance 
with this subpart fail to resolve noncompliance.
    (c) It is the policy of the Department to act on information 
concerning alleged violations by SWAs of the ES regulations received 
from any person or organization.



Sec.  658.702  Initial action by the Regional Administrator.

    (a) The ETA Regional Administrator is responsible for ensuring that 
all SWAs in his/her region are in compliance with ES regulations.
    (b) Wherever a Regional Administrator discovers or is apprised of 
possible SWA violations of ES regulations by the review and assessment 
activities under subpart G of this part, or through required reports or 
written complaints from individuals, organizations, or employers which 
are elevated to the Department after the exhaustion of SWA 
administrative remedies, the Regional Administrator must conduct an 
investigation. Within 10 business days after receipt of the report or 
other information, the Regional Administrator must make a determination 
whether there is probable cause to believe that a SWA has violated ES 
regulations.
    (c) The Regional Administrator must accept complaints regarding 
possible SWA violations of ES regulations from employee organizations, 
employers or other groups, without exhaustion of the complaint process 
described at subpart E of this part, if the Regional Administrator 
determines that the nature and scope of the complaint are such that the 
time required to exhaust the administrative procedures at the State 
level would adversely affect a significant number of applicants. In such 
cases, the Regional Administrator must investigate the matter within 10 
business days, may provide the SWA 10 business days for comment, and 
must make a determination within an additional 10 business days whether 
there is probable cause to believe that the SWA has violated ES 
regulations.
    (d) If the Regional Administrator determines that there is no 
probable cause to believe that a SWA has violated ES regulations, he/she 
must retain all reports and supporting information in Department files. 
In all cases where the Regional Administrator has insufficient 
information to make a probable cause determination,

[[Page 28]]

he/she must so notify the Administrator in writing and the time for the 
investigation must be extended 20 additional business days.
    (e) If the Regional Administrator determines there is probable cause 
to believe a SWA has violated ES regulations, he/she must issue a Notice 
of Initial Findings of Non-compliance by registered mail (or other 
legally viable means) to the offending SWA. The notice will specify the 
nature of the violation, cite the regulations involved, and indicate 
corrective action which may be imposed in accordance with paragraphs (g) 
and (h) of this section. If the non-compliance involves services to 
MSFWs or the Complaint System, a copy of said notice must be sent to the 
NMA.
    (f)(1) The SWA may have 20 business days to comment on the findings, 
or up to 20 additional days, if the Regional Administrator determines a 
longer period is appropriate. The SWA's comments must include agreement 
or disagreement with the findings and suggested corrective actions, 
where appropriate.
    (2) After the period elapses, the Regional Administrator must 
prepare within 20 business days, written final findings which specify 
whether the SWA has violated ES regulations. If in the final findings 
the Regional Administrator determines the SWA has not violated ES 
regulations, the Regional Administrator must notify the State 
Administrator of this finding and retain supporting documents in his/her 
files. If the final finding involves services to MSFWs or the Complaint 
System, the Regional Administrator also must notify the NMA. If the 
Regional Administrator determines a SWA has violated ES regulations, the 
Regional Administrator must prepare a Final Notice of Noncompliance 
which must specify the violation(s) and cite the regulations involved. 
The Final Notice of Noncompliance must be sent to the SWA by registered 
mail or other legally viable means. If the noncompliance involves 
services to MSFWs or the Complaint System, a copy of the Final Notice 
must be sent to the NMA.
    (g) If the violation involves the misspending of grant funds, the 
Regional Administrator may order in the Final Notice of Noncompliance a 
disallowance of the expenditure and may either demand repayment or 
withhold future funds in the amount in question. If the Regional 
Administrator disallows costs, the Regional Administrator must give the 
reasons for the disallowance, inform the SWA that the disallowance is 
effective immediately and that no more funds may be spent in the 
disallowed manner, and offer the SWA the opportunity to request a 
hearing pursuant to Sec.  658.707. The offer, or the acceptance of an 
offer of a hearing, however, does not stay the effectiveness of the 
disallowance. The Regional Administrator must keep complete records of 
the disallowance.
    (h) If the violation does not involve misspending of grant funds or 
the Regional Administrator determines that the circumstances warrant 
other action:
    (1) The Final Notice of Noncompliance must direct the SWA to 
implement a specific corrective action plan to correct all violations. 
If the SWA's comment demonstrates with supporting evidence (except where 
inappropriate) that all violations have already been corrected, the 
Regional Administrator need not impose a corrective action plan and 
instead may cite the violation(s) and accept the SWA's resolution, 
subject to follow-up review, if necessary. If the Regional Administrator 
determines that the violation(s) cited had been found previously and 
that the corrective action(s) taken had not corrected the violation(s) 
contrary to the findings of previous follow-up reviews, the Regional 
Administrator must apply remedial actions to the SWA pursuant to Sec.  
658.704.
    (2) The Final Notice of Noncompliance must specify the time by which 
each corrective action must be taken. This period may not exceed 40 
business days unless the Regional Administrator determines that 
exceptional circumstances necessitate corrective actions requiring a 
longer time period. In such cases, and if the violations involve 
services to MSFWs or the Complaint System, the Regional Administrator 
must notify the Administrator in writing of the exceptional 
circumstances which necessitate more time, and must specify the 
additional

[[Page 29]]

time period. The specified time must commence with the date of signature 
on the registered mail receipt.
    (3) When the time provided for in paragraph (h)(2) of this section 
elapses, Department staff must review the SWA's efforts as documented by 
the SWA to determine if the corrective action(s) has been taken and if 
the SWA has achieved compliance with ES regulations. If necessary, 
Department staff must conduct a follow-up visit as part of this review.
    (4) If, as a result of this review, the Regional Administrator 
determines the SWA has corrected the violation(s), the Regional 
Administrator must record the basis for this determination, notify the 
SWA, send a copy to the Administrator, and retain a copy in Department 
files.
    (5) If, as a result of this review, the Regional Administrator 
determines the SWA has taken corrective action but is unable to 
determine if the violation has been corrected due to seasonality or 
other factors, the Regional Administrator must notify in writing the SWA 
and the Administrator of his/her findings. The Regional Administrator 
must conduct further follow-up at an appropriate time to make a final 
determination if the violation has been corrected. If the Regional 
Administrator's follow-up reveals that violations have not been 
corrected, the Regional Administrator must apply remedial actions to the 
SWA pursuant to Sec.  658.704.
    (6) If, as a result of the review the Regional Administrator 
determines the SWA has not corrected the violations and has not made 
good faith efforts and adequate progress toward the correction of the 
violations, the Regional Administrator must apply remedial actions to 
the SWA pursuant to Sec.  658.704.
    (7) If, as a result of the review, the Regional Administrator 
determines the SWA has made good faith efforts and adequate progress 
toward the correction of the violation and it appears the violation will 
be fully corrected within a reasonable amount of time, the SWA must be 
advised by registered mail or other legally viable means (with a copy 
sent to the Administrator) of this conclusion, of remaining differences, 
of further needed corrective action, and that all deficiencies must be 
corrected within a specified time period. This period may not exceed 40 
business days unless the Regional Administrator determines exceptional 
circumstances necessitate corrective action requiring more time. In such 
cases, the Regional Administrator must notify the Administrator in 
writing of the exceptional circumstances which necessitate more time, 
and must specify that time period. The specified time commences with the 
date of signature on the registered mail receipt.
    (8)(i) If the SWA has been given additional time pursuant to 
paragraph (h)(7) of this section, Department staff must review the SWA's 
efforts as documented by the SWA at the end of the time period. If 
necessary, the Department must conduct a follow-up visit as part of this 
review.
    (ii) If the SWA has corrected the violation(s), the Regional 
Administrator must document that finding, notify in writing the SWA and 
the Administrator, and retain supporting documents in Department files. 
If the SWA has not corrected the violation(s), the Regional 
Administrator must apply remedial actions pursuant to Sec.  658.704.



Sec.  658.703  Emergency corrective action.

    In critical situations as determined by the Regional Administrator, 
where it is necessary to protect the integrity of the funds, or ensure 
the proper operation of the program, the Regional Administrator may 
impose immediate corrective action. Where immediate corrective action is 
imposed, the Regional Administrator must notify the SWA of the reason 
for imposing the emergency corrective action prior to providing the SWA 
an opportunity to comment.



Sec.  658.704  Remedial actions.

    (a) If a SWA fails to correct violations as determined pursuant to 
Sec.  658.702, the Regional Administrator must apply one or more of the 
following remedial actions to the SWA:
    (1) Imposition of special reporting requirements for a specified 
time;
    (2) Restrictions of obligational authority within one or more 
expense classifications;

[[Page 30]]

    (3) Implementation of specific operating systems or procedures for a 
specified time;
    (4) Requirement of special training for SWA personnel;
    (5) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant Secretary, the elevation of specific decision-making functions 
from the State Administrator to the Regional Administrator;
    (6) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant Secretary, the imposition of Federal staff in key SWA 
positions;
    (7) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant Secretary, funding of the SWA on a short-term basis or partial 
withholding of funds for a specific function or for a specific 
geographical area;
    (8) Holding of public hearings in the State on the SWA's 
deficiencies;
    (9) Disallowance of funds pursuant to Sec.  658.702(g); or
    (10) If the matter involves a serious or continual violation, the 
initiation of decertification procedures against the State Workforce 
Agency, as set forth in paragraph (e) of this section.
    (b) The Regional Administrator must send, by registered mail, a 
Notice of Remedial Action to the SWA. The Notice of Remedial Action must 
set forth the reasons for the remedial action. When such a notice is the 
result of violations of regulations governing services to MSFWs 
(Sec. Sec.  653.100 through 653.113 of this chapter) or the Complaint 
System (Sec. Sec.  658.400 through 658.426), a copy of said notice must 
be sent to the Administrator, who must publish the notice promptly in 
the Federal Register.
    (c) If the remedial action is other than decertification, the notice 
must state the remedial action must take effect immediately. The notice 
also must state the SWA may request a hearing pursuant to Sec.  658.707 
by filing a request in writing with the Regional Administrator pursuant 
to Sec.  658.707 within 20 business days of the SWA's receipt of the 
notice. The offer of hearing, or the acceptance thereof, however, does 
not stay or otherwise delay the implementation of remedial action.
    (d) Within 60 business days after the initial application of 
remedial action, the Regional Administrator must conduct a review of the 
SWA's compliance with ES regulations unless the Regional Administrator 
determines more time is necessary. In such cases, the Regional 
Administrator must notify the Administrator in writing of the 
circumstances which necessitate more time, and specify that time period. 
If necessary, Department staff must conduct a follow-up visit as part of 
this review. If the SWA is in compliance with the ES regulations, the 
Regional Administrator must fully document these facts and must 
terminate the remedial actions. The Regional Administrator must notify 
the SWA of his/her findings. When the case involves violations of 
regulations governing services to MSFWs or the Complaint System, a copy 
of said notice must be sent to the Administrator, who must promptly 
publish the notice in the Federal Register. The Regional Administrator 
must conduct, within a reasonable time after terminating the remedial 
actions, a review of the SWA's compliance to determine whether any 
remedial actions must be reapplied.
    (e) If, upon conducting the on-site review referred to in paragraph 
(c) of this section, the Regional Administrator finds the SWA remains in 
noncompliance, the Regional Administrator must continue the remedial 
action and/or impose different additional remedial actions. The Regional 
Administrator must fully document all such decisions and, when the case 
involves violations of regulations governing services to MSFWs or the 
Complaint System, must send copies to the Administrator, who must 
promptly publish the notice in the Federal Register.
    (f)(1) If the SWA has not brought itself into compliance with ES 
regulations within 120 business days of the initial application of 
remedial action, the Regional Administrator must initiate 
decertification unless the Regional Administrator determines the 
circumstances necessitate continuing remedial action for more time. In 
such

[[Page 31]]

cases, the Regional Administrator must notify the Administrator in 
writing of the circumstances which necessitate the extended time, and 
specify the time period.
    (2) The Regional Administrator must notify the SWA by registered 
mail or by other legally viable means of the decertification 
proceedings, and must state the reasons therefor. Whenever such a notice 
is sent to a SWA, the Regional Administrator must prepare five copies 
(hard copies or electronic copies) containing, in chronological order, 
all the documents pertinent to the case along with a request for 
decertification stating the grounds therefor. One copy must be retained. 
Two must be sent to the ETA National Office, one must be sent to the 
Solicitor of Labor, Attention: Associate Solicitor for Employment and 
Training, and, if the case involves violations of regulations governing 
services to MSFWs or the Complaint System, one copy must be sent to the 
NMA. All copies also must be sent electronically to each respective 
party. The notice sent by the Regional Administrator must be published 
promptly in the Federal Register.



Sec.  658.705  Decision to decertify.

    (a) Within 30 business days of receiving a request for 
decertification, the ETA Assistant Secretary must review the case and 
must decide whether to proceed with decertification.
    (b) The Assistant Secretary must grant the request for 
decertification unless he/she makes a finding that:
    (1) The violations of ES regulations are neither serious nor 
continual;
    (2) The SWA is in compliance; or
    (3) The Assistant Secretary has reason to believe the SWA will 
achieve compliance within 80 business days unless exceptional 
circumstances necessitate more time, pursuant to the remedial action 
already applied or to be applied. (In the event the Assistant Secretary 
does not have sufficient information to act upon the request, he/she may 
postpone the determination for up to an additional 20 business days in 
order to obtain any available additional information.) In making a 
determination of whether violations are ``serious'' or ``continual,'' as 
required by paragraph (b)(1) of this section, the Assistant Secretary 
must consider:
    (i) Statewide or multiple deficiencies as shown by performance data 
and/or on-site reviews;
    (ii) Recurrent violations, even if they do not persist over 
consecutive reporting periods, and
    (iii) The good faith efforts of the State to achieve full compliance 
with ES regulations as shown by the record.
    (c) If the Assistant Secretary denies a request for decertification, 
he/she must write a complete report documenting his/her findings and, if 
appropriate, instructing an alternate remedial action or actions be 
applied. Electronic copies of the report must be sent to the Regional 
Administrator. Notice of the Assistant Secretary's decision must be 
published promptly in the Federal Register and the report of the 
Assistant Secretary must be made available for public inspection and 
copying.
    (d) If the Assistant Secretary decides decertification is 
appropriate, he/she must submit the case to the Secretary providing 
written explanation for his/her recommendation of decertification.
    (e) Within 30 business days after receiving the Assistant 
Secretary's report, the Secretary must determine whether to decertify 
the SWA. The Secretary must grant the request for decertification unless 
he/she makes one of the three findings set forth in paragraph (b) of 
this section. If the Secretary decides not to decertify, he/she must 
then instruct that remedial action be continued or that alternate 
actions be applied. The Secretary must write a report explaining his/her 
reasons for not decertifying the SWA and copies (hard copy and 
electronic) will be sent to the SWA. Notice of the Secretary's decision 
must be published promptly in the Federal Register, and the report of 
the Secretary must be made available for public inspection and copy.
    (f) Where either the Assistant Secretary or the Secretary denies a 
request for decertification and orders further remedial action, the 
Regional Administrator must continue to monitor the SWA's compliance. If 
the SWA achieves compliance within the time established pursuant to 
paragraph (b)

[[Page 32]]

of this section, the Regional Administrator must terminate the remedial 
actions. If the SWA fails to achieve full compliance within that time 
period after the Secretary's decision not to decertify, the Regional 
Administrator must submit a report of his/her findings to the Assistant 
Secretary who must reconsider the request for decertification pursuant 
to the requirements of paragraph (b) of this section.



Sec.  658.706  Notice of decertification.

    If the Secretary decides to decertify a SWA, he/she must send a 
Notice of Decertification to the SWA stating the reasons for this action 
and providing a 10 business day period during which the SWA may request 
an administrative hearing in writing to the Secretary. The notice must 
be published promptly in the Federal Register.



Sec.  658.707  Requests for hearings.

    (a) Any SWA which received a Notice of Decertification under Sec.  
658.706 or a notice of disallowance under Sec.  658.702(g) may request a 
hearing on the issue by filing a written request for hearing with the 
Secretary within 10 business days of receipt of the notice. This request 
must state the reasons the SWA believes the basis of the decision to be 
wrong, and it must be signed by the State Administrator (electronic 
signatures may be accepted).
    (b) When the Secretary receives a request for a hearing from a SWA, 
he/she must send copies of a file containing all materials and 
correspondence relevant to the case to the Assistant Secretary, the 
Regional Administrator, the Solicitor of Labor, and the Department of 
Labor Chief Administrative Law Judge. When the case involves violations 
of regulations governing services to MSFWs or the Complaint System, a 
copy must be sent to the NMA.
    (c) The Secretary must publish notice of hearing in the Federal 
Register. This notice must invite all interested parties to attend and 
to present evidence at the hearing. All interested parties who make 
written request to participate must thereafter receive copies (hard copy 
and/or electronic) of all documents filed in said proceedings.



Sec.  658.708  Hearings.

    (a) Upon receipt of a hearing file by the Chief Administrative Law 
Judge, the case must be docketed and notice sent by electronic mail, 
other means of electronic service, or registered mail, return receipt 
requested, to the Solicitor of Labor, Attention: Associate Solicitor for 
Employment and Training, the Administrator, the Regional Administrator 
and the State Administrator. The notice must set a time, place, and date 
for a hearing on the matter and must advise the parties that:
    (1) They may be represented at the hearing;
    (2) They may present oral and documentary evidence at the hearing;
    (3) They may cross-examine opposing witnesses at the hearing; and
    (4) They may request rescheduling of the hearing if the time, place, 
or date set are inconvenient.
    (b) The Solicitor of Labor or the Solicitor's designee will 
represent the Department at the hearing.



Sec.  658.709  Conduct of hearings.

    (a) Proceedings under this section are governed by secs. 5 through 8 
of the Administrative Procedure Act, 5 U.S.C. 553 et seq. and the rules 
of practice and procedure at subpart A of 29 CFR part 18, except as 
otherwise specified in this section.
    (b) Technical rules of evidence do not apply, but rules or 
principles designed to assure production of the most credible evidence 
available and to subject testimony to test by cross-examination, must be 
applied if necessary by the ALJ conducting the hearing. The ALJ may 
exclude irrelevant, immaterial, or unduly repetitious evidence. All 
documents and other evidence offered or taken for the record must be 
open to examination by the parties. Opportunity must be given to refute 
facts and arguments advanced on either side of the issue. A transcript 
must be made of the oral evidence except to the extent the substance 
thereof is stipulated for the record.
    (c) Discovery may be conducted as provided in the rules of practice 
and procedure at 29 CFR 18.50 through 18.65.
    (d) When a public officer is a respondent in a hearing in an 
official capacity

[[Page 33]]

and during its pendency dies, resigns, or otherwise ceases to hold 
office, the proceeding does not abate and the officer's successor is 
automatically substituted as a party. Proceedings following the 
substitution must be in the name of the substituted party, but any 
misnomer not affecting the substantive rights of the parties must be 
disregarded. An order of substitution may be entered at any time, but 
the omission to enter such an order may not affect the substitution.



Sec.  658.710  Decision of the Administrative Law Judge.

    (a) The ALJ has jurisdiction to decide all issues of fact and 
related issues of law and to grant or deny appropriate motions, but does 
not have jurisdiction to decide upon the validity of Federal statutes or 
regulations.
    (b) The decision of the ALJ must be based on the hearing record, 
must be in writing, and must state the factual and legal basis of the 
decision. The ALJ's decision must be available for public inspection and 
copying.
    (c) Except when the case involves the decertification of a SWA, the 
decision of the ALJ will be considered the final decision of the 
Secretary.
    (d) If the case involves the decertification of an appeal to the 
SWA, the decision of the ALJ must contain a notice stating that, within 
30 calendar days of the decision, the SWA or the Administrator may 
appeal to the Administrative Review Board, United States Department of 
Labor, by sending a written appeal to the Administrative Review Board.



Sec.  658.711  Decision of the Administrative Review Board.

    (a) Upon the receipt of an appeal to the Administrative Review 
Board, United States Department of Labor, the ALJ must certify the 
record in the case to the Administrative Review Board, which must make a 
decision to decertify or not on the basis of the hearing record.
    (b) The decision of the Administrative Review Board is the final 
decision of the Secretary on decertification appeals. It must be in 
writing, and must set forth the factual and legal basis for the 
decision. Notice of the Administrative Review Board's decision must be 
published in the Federal Register, and copies must be made available for 
public inspection and copying.



PART 660_INTRODUCTION TO THE REGULATIONS FOR WORKFORCE INVESTMENT
SYSTEMS UNDER TITLE I OF THE WORKFORCE INVESTMENT ACT--Table of Contents



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 
          title I of the Workforce Investment Act cover?
660.300 What definitions apply to the regulations for workforce 
          investment systems under title I of WIA?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49388, Aug. 11, 2000, unless otherwise noted.



Sec.  660.100  What is the purpose of title I of the Workforce Investment
Act of 1998?

    The purpose of title I of the Workforce Investment Act of 1998 (WIA) 
is to provide workforce investment activities that increase the 
employment, retention and earnings of participants, and increase 
occupational skill attainment by participants, which will improve the 
quality of the workforce, reduce welfare dependency, and enhance the 
productivity and competitiveness of the Nation's economy. These goals 
are achieved through the workforce investment system. (WIA sec. 106.)



Sec.  660.200  What do the regulations for workforce investment systems
under title I of the Workforce Investment Act cover?

    The regulations found in 20 CFR parts 660 through 671 set forth the 
regulatory requirements that are applicable to programs operated with 
funds provided under title I of WIA. This part 660 describes the purpose 
of that Act, explains the format of these regulations and sets forth 
definitions for terms that apply to each part. Part 661 contains 
regulations relating to Statewide and local governance of the workforce 
investment system. Part 662 describes the One-Stop system and the roles 
of

[[Page 34]]

One-Stop partners. Part 663 sets forth requirements applicable to WIA 
title I programs serving adults and dislocated workers. Part 664 sets 
forth requirements applicable to WIA title I programs serving youth. 
Part 665 contains regulations relating to Statewide activities. Part 666 
describes the WIA title I performance accountability system. Part 667 
sets forth the administrative requirements applicable to programs funded 
under WIA title I. Parts 668 and 669 contain the particular requirements 
applicable to programs serving Indians and Native Americans and Migrant 
and Seasonal Farmworkers, respectively. Parts 670 and 671 describe the 
particular requirements applicable to the Job Corps and other national 
programs, respectively. In addition, part 652 describes the 
establishment and functioning of State Employment Services under the 
Wagner-Peyser Act, and 29 CFR part 37 contains the Department's 
nondiscrimination regulations implementing WIA section 188.



Sec.  660.300  What definitions apply to the regulations for workforce
investment systems under title I of WIA?

    In addition to the definitions set forth at WIA section 101, the 
following definitions apply to the regulations in 20 CFR parts 660 
through 671:
    Department or DOL means the U.S. Department of Labor, including its 
agencies and organizational units.
    Designated region means a combination of local areas that are partly 
or completely in a single labor market area, economic development 
region, or other appropriate contiguous subarea of a State, that is 
designated by the State under WIA section 116(c), or a similar 
interstate region that is designated by two or more States under WIA 
section 116(c)(4).
    Employment and training activity means a workforce investment 
activity that is carried out for an adult or dislocated worker.
    EO data means data on race and ethnicity, age, sex, and disability 
required by 29 CFR part 37 of the DOL regulations implementing section 
188 of WIA, governing nondiscrimination.
    ETA means the Employment and Training Administration of the U.S. 
Department of Labor.
    Grant means an award of WIA financial assistance by the U.S. 
Department of Labor to an eligible WIA recipient.
    Grantee means the direct recipient of grant funds from the 
Department of Labor. A grantee may also be referred to as a recipient.
    Individual with a disability means an individual with any disability 
(as defined in section 3 of the Americans with Disabilities Act of 1990 
(42 U.S.C. 12102)). For purposes of WIA section 188, this term is 
defined at 29 CFR 37.4.
    Labor Federation means an alliance of two or more organized labor 
unions for the purpose of mutual support and action.
    Literacy means an individual's ability to read, write, and speak in 
English, and to compute, and solve problems, at levels of proficiency 
necessary to function on the job, in the family of the individual, and 
in society.
    Local Board means a Local Workforce Investment Board established 
under WIA section 117, to set policy for the local workforce investment 
system.
    Obligations means the amounts of orders placed, contracts and 
subgrants awarded, goods and services received, and similar transactions 
during a funding period that will require payment by the recipient or 
subrecipient during the same or a future period. For purposes of the 
reallotment process described at 20 CFR 667.150, the Secretary also 
treats as State obligations any amounts allocated by the State under WIA 
sections 128(b) and 133(b) to a single area State or to a balance of 
State local area administered by a unit of the State government, and 
inter-agency transfers and other actions treated by the State as 
encumbrances against amounts reserved by the State under WIA sections 
128(a) and 133(a) for Statewide workforce investment activities.
    Outlying area means the United States Virgin Islands, Guam, American 
Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of 
the Marshall Islands, the Federated States of Micronesia, and the 
Republic of Palau.

[[Page 35]]

    Participant means an individual who has registered under 20 CFR 
663.105 or 664.215 and has been determined to be eligible to participate 
in and who is receiving services (except for follow up services) under a 
program authorized by WIA title I. Participation commences on the first 
day, following determination of eligibility, on which the individual 
begins receiving core, intensive, training or other services provided 
under WIA title I.
    Recipient means an entity to which a WIA grant is awarded directly 
from the Department of Labor to carry out a program under title I of 
WIA. The State is the recipient of funds awarded under WIA sections 
127(b)(1)(C)(I)(II), 132(b)(1)(B) and 132(b)(2)(B). The recipient is the 
entire legal entity that received the award and is legally responsible 
for carrying out the WIA program, even if only a particular component of 
the entity is designated in the grant award document.
    Register means the process for collecting information to determine 
an individual's eligibility for services under WIA title I. Individuals 
may be registered in a variety ways, as described in 20 CFR 663.105 and 
20 CFR 664.215.
    Secretary means the Secretary of the U.S. Department of Labor.
    Self certification means an individual's signed attestation that the 
information he/she submits to demonstrate eligibility for a program 
under title I of WIA is true and accurate.
    State means each of the several States of the United States, the 
District of Columbia and the Commonwealth of Puerto Rico. The term 
``State'' does not include outlying areas.
    State Board means a State Workforce Investment Board established 
under WIA section 111.
    Subgrant means an award of financial assistance in the form of 
money, or property in lieu of money made under a grant by a grantee to 
an eligible subrecipient. The term includes financial assistance when 
provided by contractual legal agreement, but does not include 
procurement purchases, nor does it include any form of assistance which 
is excluded from the definition of Grant in this part.
    Subrecipient means an entity to which a subgrant is awarded and 
which is accountable to the recipient (or higher tier subrecipient) for 
the use of the funds provided. DOL's audit requirements for States, 
local governments, and non-profit organizations provides guidance on 
distinguishing between a subrecipient and a vendor at 29 CFR 99.210.
    Unobligated balance means the portion of funds authorized by the 
Federal agency that has not been obligated by the grantee and is 
determined by deducting the cumulative obligations from the cumulative 
funds authorized.
    Vendor means an entity responsible for providing generally required 
goods or services to be used in the WIA program. These goods or services 
may be for the recipient's or subrecipient's own use or for the use of 
participants in the program. DOL's audit requirements for States, local 
governments, and non-profit organizations provides guidance on 
distinguishing between a subrecipient and a vendor at 29 CFR 99.210.
    Wagner-Peyser Act means the Act of June 6, 1933, as amended, 
codified at 29 U.S.C. 49 et seq.
    WIA regulations mean the regulations in 20 CFR parts 660 through 
671, the Wagner-Peyser Act regulations in 20 CFR part 652, subpart C, 
and the regulations implementing WIA section 188 in 29 CFR part 37.
    Workforce investment activities mean the array of activities 
permitted under title I of WIA, which include employment and training 
activities for adults and dislocated workers, as described in WIA 
section 134, and youth activities, as described in WIA section 129.
    Youth activity means a workforce investment activity that is carried 
out for youth.

[[Page 36]]



PART 661_STATEWIDE AND LOCAL GOVERNANCE OF THE WORKFORCE INVESTMENT 
SYSTEM UNDER TITLE I OF THE WORKFORCE INVESTMENT ACT--Table of Contents



                 Subpart A_General Governance Provisions

Sec.
661.100 What is the workforce investment system?
661.110 What is the role of the Department of Labor as the Federal 
          governmental partner in the governance of the workforce 
          investment system?
661.120 What are the roles of the local and State governmental partner 
          in the governance of the workforce investment system?

                  Subpart B_State Governance Provisions

661.200 What is the State Workforce Investment Board?
661.203 What is meant by the terms ``optimum policy making authority'' 
          and ``expertise relating to [a] program, service or 
          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 an open manner under the ``sunshine provision'' of 
          WIA section 111(g)?
661.210 Under what circumstances may the Governor select an alternative 
          entity in place of the State Workforce Investment Board?
661.220 What are the requirements for the submission of the State 
          Workforce Investment Plan?
661.230 What are the requirements for modification of the State 
          Workforce Investment Plan?
661.240 How do the unified planning requirements apply to the five-year 
          strategic WIA and Wagner-Peyser plan and to other Department 
          of Labor plans?
661.250 What are the requirements for designation of local workforce 
          investment areas?
661.260 What are the requirements for automatic designation of workforce 
          investment areas relating to units of local government with a 
          population of 500,000 or more?
661.270 What are the requirements for temporary and subsequent 
          designation of workforce investment areas relating to areas 
          that had been designated as service delivery areas under JTPA?
661.280 What right does an entity have to appeal the Governor's decision 
          rejecting a request for designation as a workforce investment 
          area?
661.290 Under what circumstances may States require Local Boards to take 
          part in regional planning activities?

                  Subpart C_Local Governance Provisions

661.300 What is the Local Workforce Investment Board?
661.305 What is the role of the Local Workforce Investment Board?
661.307 How does the Local Board meet its requirement to conduct 
          business in an open manner under the ``sunshine provision'' of 
          WIA section 117(e)?
661.310 Under what limited conditions may a Local Board directly be a 
          provider of core services, intensive services, or training 
          services, or act as a One-Stop Operator?
661.315 Who are the required members of the Local Workforce Investment 
          Boards?
661.317 Who may be selected to represent a particular One-Stop partner 
          program on the Local Board when there is more than one partner 
          program entity in the local area?
661.320 Who must chair a Local Board?
661.325 What criteria will be used to establish the membership of the 
          Local Board?
661.330 Under what circumstances may the State use an alternative entity 
          as the Local Workforce Investment Board?
661.335 What is a youth council, and what is its relationship to the 
          Local Board?
661.340 What are the responsibilities of the youth council?
661.345 What are the requirements for the submission of the local 
          workforce investment plan?
661.350 What are the contents of the local workforce investment plan?
661.355 When must a local plan be modified?

                 Subpart D_Waivers and Work-Flex Waivers

661.400 What is the purpose of the General Statutory and Regulatory 
          Waiver Authority provided at section 189(i)(4) of the 
          Workforce Investment Act?
661.410 What provisions of WIA and the Wagner-Peyser Act may be waived, 
          and what provisions may not be waived?
661.420 Under what conditions may a Governor request, and the Secretary 
          approve, a general waiver of statutory or regulatory 
          requirements under WIA section189(i)(4)?
661.430 Under what conditions may the Governor submit a Workforce 
          Flexibility Plan?
661.440 What limitations apply to the State's Workforce Flexibility Plan 
          authority under WIA?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

[[Page 37]]


    Source: 65 FR 49390, Aug. 11, 2000, unless otherwise noted.



                 Subpart A_General Governance Provisions



Sec.  661.100  What is the workforce investment system?

    Under title I of WIA, the workforce investment system provides the 
framework for delivery of workforce investment activities at the State 
and local levels to individuals who need those services, including job 
seekers, dislocated workers, youth, incumbent workers, new entrants to 
the workforce, veterans, persons with disabilities, and employers. Each 
State's Governor is required, in accordance with the requirements of 
this part, to establish a State Board; to designate local workforce 
investment areas; and to oversee the creation of Local Boards and One-
Stop service delivery systems in the State.



Sec.  661.110  What is the role of the Department of Labor as the Federal
governmental partner in the governance of the workforce investment system?

    (a) Successful governance of the workforce investment system will be 
achieved through cooperation and coordination of Federal, State and 
local governments.
    (b) The Department of Labor sees as one of its primary roles 
providing leadership and guidance to support a system that meets the 
objectives of title I of WIA, and in which State and local partners have 
flexibility to design systems and deliver services in a manner designed 
to best achieve the goals of WIA based on their particular needs. The 
WIA regulations provide the framework in which State and local officials 
can exercise such flexibility within the confines of the statutory 
requirements. Wherever possible, system features such as design options 
and categories of services are broadly defined, and are subject to State 
and local interpretation.
    (c) The Secretary, in consultation with other Federal Agencies, as 
appropriate, may publish guidance on interpretations of statutory and 
regulatory provisions. State and local policies, interpretations, 
guidelines and definitions that are consistent with interpretations 
contained in such guidance will be considered to be consistent with the 
Act for purposes of Sec.  661.120.



Sec.  661.120  What are the roles of the local and State governmental
partner in the governance of the workforce investment system?

    (a) Local areas should establish policies, interpretations, 
guidelines and definitions to implement provisions of title I of WIA to 
the extent that such policies, interpretations, guidelines and 
definitions are not inconsistent with the Act and the regulations issued 
under the Act, Federal statutes and regulations governing One-Stop 
partner programs, and with State policies.
    (b) States should establish policies, interpretations, guidelines 
and definitions to implement provisions of title I of WIA to the extent 
that such policies, interpretations, guidelines and definitions are not 
inconsistent with the Act and the regulations issued under the Act, as 
well as Federal statutes and regulations governing One-Stop partner 
programs.



                  Subpart B_State Governance Provisions



Sec.  661.200  What is the State Workforce Investment Board?

    (a) The State Board is a board established by the Governor in 
accordance with the requirements of WIA section 111 and this section.
    (b) The membership of the State Board must meet the requirements of 
WIA section 111(b). The State Board must contain two or more members 
representing the categories described in WIA section 111(b)(1)(C)(iii)-
(v), and special consideration must be given to chief executive officers 
of community colleges and community based organizations in the selection 
of members representing the entities identified in WIA section 
111(b)(1)(C)(v).
    (c) The Governor may appoint any other representatives or agency 
officials, such as agency officials responsible for economic 
development, child support and juvenile justice programs in the State.

[[Page 38]]

    (d) Members who represent organizations, agencies or other entities 
must be individuals with optimum policy making authority within the 
entities they represent.
    (e) A majority of members of the State Board must be representatives 
of business. Members who represent business must be individuals who are 
owners, chief executive officers, chief operating officers, or other 
individuals with optimum policy making or hiring authority, including 
members of Local Boards.
    (f) The Governor must appoint the business representatives from 
among individuals who are nominated by State business organizations and 
business trade associations. The Governor must appoint the labor 
representatives from among individuals who are nominated by State labor 
federations.
    (g) The Governor must select a chairperson of the State Board from 
the business representatives on the board.
    (h) The Governor may establish terms of appointment or other 
conditions governing appointment or membership on the State Board.
    (i) For the programs and activities carried out by One-Stop 
partners, as described in WIA section 121(b) and 20 CFR 662.200 and 
662.210, the State Board must include:
    (1) The lead State agency officials with responsibility for such 
program, or
    (2) In any case in which no lead State agency official has 
responsibility for such a program service, a representative in the State 
with expertise relating to such program, service or activity.
    (3) If the director of the designated State unit, as defined in 
section 7(8)(B) of the Rehabilitation Act, does not represent the State 
Vocational Rehabilitation Services program (VR program) on the State 
Board, then the State must describe in its State plan how the member of 
the State Board representing the VR program will effectively represent 
the interests, needs, and priorities of the VR program and how the 
employment needs of individuals with disabilities in the State will be 
addressed.
    (j) An individual may be appointed as a representative of more than 
one entity if the individual meets all the criteria for representation, 
including the criteria described in paragraphs (d) through (f) of this 
section, for each entity. (WIA sec. 111)



Sec.  661.203  What is meant by the terms ``optimum policy making 
authority'' and ``expertise relating to [a] program, service or
activity''?

    For purposes of selecting representatives to State and local 
workforce investment boards:
    (a) A representative with ``optimum policy making authority'' is an 
individual who can reasonably be expected to speak affirmatively on 
behalf of the entity he or she represents and to commit that entity to a 
chosen course of action.
    (b) A representative with ``expertise relating to [a] program, 
service or activity'' includes a person who is an official with a One-
stop partner program and a person with documented expertise relating to 
the One-stop partner program.



Sec.  661.205  What is the role of the State Board?

    The State Board must assist the Governor in the:
    (a) Development of the State Plan;
    (b) Development and continuous improvement of a Statewide system of 
activities that are funded under subtitle B of title I of WIA, or 
carried out through the One-Stop delivery system, including--
    (1) Development of linkages in order to assure coordination and 
nonduplication among the programs and activities carried out by One-Stop 
partners, including, as necessary, addressing any impasse situations in 
the development of the local Memorandum of Understanding; and
    (2) Review of local plans;
    (c) Commenting at least once annually on the measures taken under 
section 113(b)(14) of the Carl D. Perkins Vocational and Technical 
Education Act;
    (d) Designation of local workforce investment areas,
    (e) Development of allocation formulas for the distribution of funds 
for adult employment and training activities and youth activities to 
local areas,

[[Page 39]]

as permitted under WIA sections 128(b)(3)(B) and 133(b)(3)(B);
    (f) Development and continuous improvement of comprehensive State 
performance measures, including State adjusted levels of performance, to 
assess the effectiveness of the workforce investment activities in the 
State, as required under WIA section 136(b);
    (g) Preparation of the annual report to the Secretary described in 
WIA section 136(d);
    (h) Development of the Statewide employment statistics system 
described in section 15(e) of the Wagner-Peyser Act; and
    (i) Development of an application for an incentive grant under WIA 
section 503. (WIA sec. 111(d).)



Sec.  661.207  How does the State Board meet its requirement to 
conduct business in an open manner under the ``sunshine provision''
of WIA section 111(g)?

    The State Board must conduct its business in an open manner as 
required by WIA section 111(g), by making available to the public, on a 
regular basis through open meetings, information about the activities of 
the State Board. This includes information about the State Plan prior to 
submission of the plan; information about membership; the development of 
significant policies, interpretations, guidelines and definitions; and, 
on request, minutes of formal meetings of the State Board.



Sec.  661.210  Under what circumstances may the Governor select an
alternative entity in place of the State Workforce Investment Board?

    (a) The State may use any State entity that meets the requirements 
of WIA section 111(e) to perform the functions of the State Board.
    (b) If the State uses an alternative entity, the State workforce 
investment plan must demonstrate that the alternative entity meets all 
three of the requirements 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 section 122 (relating to State Job 
Training Coordinating Councils) or title VII (relating to State Human 
Resource Investment Councils) of the Job Training Partnership Act (29 
U.S.C.1501 et seq.), as in effect on December 31, 1997, or
    (ii) Is substantially similar to the State Board described in WIA 
section 111(a), (b), and (c) and Sec.  661.200; and
    (3) Includes, at a minimum, two or more representatives of business 
in the State and two or more representatives of labor organizations in 
the State.
    (c) If the alternative entity does not provide for representative 
membership of each of the categories of required State Board membership 
under WIA section 111(b), the State Plan must explain the manner in 
which the State will ensure an ongoing role for any unrepresented 
membership group in the workforce investment system. The State Board may 
maintain an ongoing role for an unrepresented membership group, 
including entities carrying out One-stop partner programs, by means such 
as regularly scheduled consultations with entities within the 
unrepresented membership groups, by providing an opportunity for input 
into the State Plan or other policy development by unrepresented 
membership groups, or by establishing an advisory committee of 
unrepresented membership groups.
    (d) If the membership structure of the alternative entity is 
significantly changed after December 31, 1997, the entity will no longer 
be eligible to perform the functions of the State Board. In such case, 
the Governor must establish a new State Board which meets all of the 
criteria of WIA section 111(b).
    (e) A significant change in the membership structure includes any 
significant change in the organization of the alternative entity or in 
the categories of entities represented on the alternative entity which 
requires a change to the alternative entity's charter or a similar 
document that defines the formal organization of the alternative entity, 
regardless of whether the required change to the document has or has not 
been made. A significant change in the membership structure is 
considered to have occurred when members are added to represent groups 
not previously represented on the entity. A significant change in the 
membership structure is not considered to have occurred when additional 
members are added to an existing membership category, when non-

[[Page 40]]

voting members are added, or when a member is added to fill a vacancy 
created in an existing membership category.
    (f) In 20 CFR parts 660 through 671, all references to the State 
Board also apply to an alternative entity used by a State.



Sec.  661.220  What are the requirements for the submission of the
State Workforce Investment Plan?

    (a) The Governor of each State must submit a State Workforce 
Investment Plan (State Plan) in order to be eligible to receive funding 
under title I of WIA and the Wagner-Peyser Act. The State Plan must 
outline the State's five year strategy for the workforce investment 
system.
    (b) The State Plan must be submitted in accordance with planning 
guidelines issued by the Secretary of Labor. The planning guidelines set 
forth the information necessary to document the State's vision, goals, 
strategies, policies and measures for the workforce investment system 
(that were arrived at through the collaboration of the Governor, chief 
elected officials, business and other parties), as well as the 
information required to demonstrate compliance with WIA, and the 
information detailed by WIA and the WIA regulations, including 29 CFR 
part 37, and the Wagner-Peyser Act and the Wagner-Peyser regulations at 
20 CFR part 652:
    (c) The State Plan must contain a description of the State's 
performance accountability system, and the State performance measures in 
accordance with the requirements of WIA section 136 and 20 CFR part 666.
    (d) The State must provide an opportunity for public comment on and 
input into the development of the State Plan prior to its submission. 
The opportunity for public comment must include an opportunity for 
comment by representatives of business, representatives of labor 
organizations, and chief elected official(s) and must be consistent with 
the requirement, at WIA section 111(g), that the State Board makes 
information regarding the State Plan and other State Board activities 
available to the public through regular open meetings. The State Plan 
must describe the State's process and timeline for ensuring a meaningful 
opportunity for public comment.
    (e) The Secretary reviews completed plans and must approve all plans 
within ninety days of their submission, unless the Secretary determines 
in writing that:
    (1) The plan is inconsistent with the provisions of title I of WIA 
or the WIA regulations, including 29 CFR part 37. For example, a finding 
of inconsistency would be made if the Secretary and the Governor have 
not reached agreement on the adjusted levels of performance under WIA 
section 136(b)(3)(A), or there is not an effective strategy in place to 
ensure development of a fully operational One-Stop delivery system in 
the State; or
    (2) The portion of the plan describing the detailed Wagner-Peyser 
plan does not satisfy the criteria for approval of such 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, or which does not contain sufficient 
information to determine whether it is consistent with the statutory or 
regulatory requirements of title I of WIA or of section 8(d) of the 
Wagner-Peyser Act, will be considered to be inconsistent with those 
requirements.



Sec.  661.230  What are the requirements for modification of the
State Workforce Investment Plan?

    (a) The State may submit a modification of its workforce investment 
plan at any time during the five-year life of the plan.
    (b) Modifications are required when:
    (1) Changes in Federal or State law or policy substantially change 
the assumptions upon which the plan is based.
    (2) There are changes in the Statewide vision, strategies, policies, 
performance indicators, the methodology used to determine local 
allocation of funds, reorganizations which change the working 
relationship with system employees, changes in organizational 
responsibilities, changes to the membership structure of the State Board 
or alternative entity and similar substantial changes to the State's 
workforce investment system.

[[Page 41]]

    (3) The State has failed to meet performance goals, and must adjust 
service strategies.
    (c) Modifications are required in accordance with the Wagner-Peyser 
provisions at 20 CFR 652.212.
    (d) Modifications to the State Plan are subject to the same public 
review and comment requirements that apply to the development of the 
original State Plan.
    (e) State Plan modifications will be approved by the Secretary based 
on the approval standard applicable to the original State Plan under 
Sec.  661.220(e).



Sec.  661.240  How do the unified planning requirements apply to
the five-year strategic WIA and Wagner-Peyser plan and to other
Department of Labor plans?

    (a) A State may submit to the Secretary a unified plan for any of 
the programs or activities described in WIA section 501(b)(2). This 
includes the following DOL programs and activities:
    (1) The five-year strategic WIA and Wagner-Peyser plan;
    (2) Trade adjustment assistance activities and NAFTA-TAA;
    (3) Veterans' programs under 38 U.S.C. Chapter 41;
    (4) Programs authorized under State unemployment compensation laws;
    (5) [Reserved]
    (6) Senior Community Service Employment Programs under title V of 
the Older Americans Act.
    (b) For purposes of paragraph (a) of this section:
    (1) A State may submit, as part of the unified plan, any plan, 
application form or any other similar document, that is required as a 
condition for the approval of Federal funding under the applicable 
program. These plans include such things as the WIA plan. They do not 
include jointly executed funding instruments, such as grant agreements, 
or Governor/Secretary Agreements or items such as corrective actions 
plans.
    (2) A state may submit a unified plan meeting the requirements of 
the Interagency guidance entitled State Unified Plan, Planning Guidance 
for State Unified Plans Under Section 501 of the Workforce Investment 
Act of 1998, in lieu of completing the individual State planning 
guidelines of the programs covered by the unified plan.
    (c) A State which submits a unified plan covering an activity or 
program described in subsection 501(b) of WIA that is approved under 
subsection 501(d) of the Act will not be required to submit any other 
plan or application in order to receive Federal funds to carry out the 
activity or program.
    (d) Each portion of a unified plan submitted under paragraph (a) of 
this section is subject to the particular requirements of Federal law 
authorizing the program. All grantees are still subject to such things 
as reporting and record-keeping requirements, corrective action plan 
requirements and other generally applicable requirements.
    (e) A unified plan must contain the information required by WIA 
section 501(c) and will be approved in accordance with the requirements 
of WIA section 501(d).

[65 FR 49390, Aug. 11, 2000, as amended at 71 FR 35525, June 21, 2006]



Sec.  661.250  What are the requirements for designation of local
workforce investment areas?

    (a) The Governor must designate local workforce investment areas in 
order for the State to receive funding under title I of WIA.
    (b) The Governor must take into consideration the factors described 
in WIA section 116(a)(1)(B) in making designations of local areas. Such 
designation must be made in consultation with the State Board, and after 
consultation with chief elected officials. The Governor must also 
consider comments received through the public comment process described 
in the State workforce investment plan under Sec.  661.220(d).
    (c) The Governor may approve a request for designation as a 
workforce investment area from any unit of general local government, 
including a combination of such units, if the State Board determines 
that the area meets the requirements of WIA section 116(a)(1)(B) and 
recommends designation.
    (d) The Governor of any State that was a single service delivery 
area State under the Job Training Partnership Act as of July 1, 1998, 
and only those

[[Page 42]]

States, may designate the State as a single local workforce investment 
area State. (WIA sec.116.)



Sec.  661.260  What are the requirements for automatic 
designation of workforce investment areas relating to units 
of local government with a population of 500,000 or more?

    The requirements for automatic designation relating to units of 
local government with a population of 500,000 or more and to rural 
concentrated employment programs are contained in WIA section 116(a)(2). 
The Governor has authority to determine the source of population data to 
use in making these designations.



Sec.  661.270  What are the requirements for temporary and 
subsequent designation of workforce investment areas relating
to areas that had been designated as service delivery areas 
under JTPA?

    The requirements for temporary and subsequent designation relating 
to areas that had been designated as service delivery areas under JTPA 
are contained in WIA section 116(a)(3).



Sec.  661.280  What right does an entity have to appeal the
Governor's decision rejecting a request for designation as a
workforce investment area?

    (a) A unit of local government (or combination of units) or a rural 
concentrated employment program grant recipient (as described at WIA 
section 116(a)(2)(B), which has requested but has been denied its 
request for designation as a workforce investment area under Sec. Sec.  
661.260 through 661.270, may appeal the decision to the State Board, in 
accordance with appeal procedures established in the State Plan.
    (b) If a decision on the appeal is not rendered in a timely manner 
or if the appeal to the State Board does not result in designation, the 
entity may request review by the Secretary of Labor, under the 
procedures set forth at 20 CFR 667.640(a).
    (c) The Secretary may require that the area be designated as a 
workforce investment area, if the Secretary determines that:
    (1) The entity was not accorded procedural rights under the State 
appeals process; or
    (2) The area meets the automatic designation requirements at WIA 
section 116(a)(2) or the temporary and subsequent designation 
requirements at WIA section 116(a)(3), as appropriate.



Sec.  661.290  Under what circumstances may States require Local
Boards to take part in regional planning activities?

    (a) The State may require Local Boards within a designated region 
(as defined at 20 CFR 660.300) to:
    (1) Participate in a regional planning process that results in 
regional performance measures for workforce investment activities under 
title I of WIA. Regions that meet or exceed the regional performance 
measures may receive regional incentive grants;
    (2) Share, where feasible, employment and other types of information 
that will assist in improving the performance of all local areas in the 
designated region on local performance measures; and
    (3) Coordinate the provision of WIA title I services, including 
supportive services such as transportation, across the boundaries of 
local areas within the designated region.
    (b) Two or more States may designate a labor market area, economic 
development region, or other appropriate contiguous subarea of the 
States as an interstate region. In such cases, the States may jointly 
exercise the State's functions described in this section.
    (c) Designation of intrastate regions and interstate regions and 
their corresponding performance measures must be described in the 
respective State Plan(s). For interstate regions, the roles of the 
respective Governors, State Boards and Local Boards must be described in 
the respective State Plans.
    (d) Unless agreed to by all affected chief elected officials and the 
Governor, these regional planning activities may not substitute for or 
replace the requirements applicable to each local area under other 
provisions of the WIA. (WIA sec. 116(a).)

[[Page 43]]



                  Subpart C_Local Governance Provisions



Sec.  661.300  What is the Local Workforce Investment Board?

    (a) The Local Workforce Investment Board (Local Board) is appointed 
by the chief elected official in each local area in accordance with 
State criteria established under WIA section 117(b), and is certified by 
the Governor every two years, in accordance with WIA section 117(c)(2).
    (b) In partnership with the chief elected official(s), the Local 
Board sets policy for the portion of the Statewide workforce investment 
system within the local area.
    (c) The Local Board and the chief elected official(s) may enter into 
an agreement that describes the respective roles and responsibilities of 
the parties.
    (d) The Local Board, in partnership with the chief elected official, 
develops the local workforce investment plan and performs the functions 
described in WIA section 117(d). (WIA sec.117 (d).)
    (e) If a local area includes more than one unit of general local 
government in accordance with WIA section 117 (c)(1)(B), the chief 
elected officials of such units may execute an agreement to describe 
their responsibilities for carrying out the roles and responsibilities. 
If, after a reasonable effort, the chief elected officials are unable to 
reach agreement, the Governor may appoint the members of the local board 
from individuals nominated or recommended as specified in WIA section 
117(b).
    (f) If the State Plan indicates that the State will be treated as a 
local area under WIA title I, the Governor may designate the State Board 
to carry out any of the roles of the Local Board.



Sec.  661.305  What is the role of the Local Workforce Investment Board?

    (a) WIA section 117(d) specifies that the Local Board is responsible 
for:
    (1) Developing the five-year local workforce investment plan (Local 
Plan) and conducting oversight of the One-Stop system, youth activities 
and employment and training activities under title I of WIA, in 
partnership with the chief elected official;
    (2) Selecting One-Stop operators with the agreement of the chief 
elected official;
    (3) Selecting eligible youth service providers based on the 
recommendations of the youth council, and identifying eligible providers 
of adult and dislocated worker intensive services and training services, 
and maintaining a list of eligible providers with performance and cost 
information, as required in 20 CFR part 663, subpart E;
    (4) Developing a budget for the purpose of carrying out the duties 
of the Local Board, subject to the approval of the chief elected 
official;
    (5) Negotiating and reaching agreement on local performance measures 
with the chief elected official and the Governor;
    (6) Assisting the Governor in developing the Statewide employment 
statistics system under the Wagner-Peyser Act;
    (7) Coordinating workforce investment activities with economic 
development strategies and developing employer linkages; and
    (8) Promoting private sector involvement in the Statewide workforce 
investment system through effective connecting, brokering, and coaching 
activities through intermediaries such as the One-Stop operator in the 
local area or through other organizations, to assist employers in 
meeting hiring needs.
    (b) The Local Board, in cooperation with the chief elected official, 
appoints a youth council as a subgroup of the Local Board and 
coordinates workforce and youth plans and activities with the youth 
council, in accordance with WIA section 117(h) and Sec.  661.335.
    (c) Local Boards which are part of a State designated region for 
regional planning must carry out the regional planning responsibilities 
required by the State in accordance with WIA section 116(c) and Sec.  
661.290. (WIA sec. 117.)



Sec.  661.307  How does the Local Board meet its requirement to
conduct business in an open manner under the ``sunshine provision''
of WIA section 117(e)?

    The Local Board must conduct its business in an open manner as 
required by WIA section 117(e), by making available to the public, on a 
regular basis

[[Page 44]]

through open meetings, information about the activities of the Local 
Board. This includes information about the Local Plan prior to 
submission of the plan; information about membership; the development of 
significant policies, interpretations, guidelines and definitions; and, 
on request, minutes of formal meetings of the Local Board.



Sec.  661.310  Under what limited conditions may a Local Board
directly be a provider of core services, intensive services, or
training services, or act as a One-Stop Operator?

    (a) A Local Board may not directly provide core services, or 
intensive services, or be designated or certified as a One-Stop 
operator, unless agreed to by the chief elected official and the 
Governor.
    (b) A Local Board is prohibited from providing training services, 
unless the Governor grants a waiver in accordance with the provisions in 
WIA section 117(f)(1). The waiver shall apply for not more than one 
year. The waiver may be renewed for additional periods, but for not more 
than one additional year at a time.
    (c) The restrictions on the provision of core, intensive, and 
training services by the Local Board, and designation or certification 
as One-Stop operator, also apply to staff of the Local Board. (WIA sec. 
117(f)(1) and (f)(2).)



Sec.  661.315  Who are the required members of the Local Workforce
Investment Boards?

    (a) The membership of Local Board must be selected in accordance 
with criteria established under WIA section 117(b)(1) and must meet the 
requirements of WIA section 117(b)(2). The Local Board must contain two 
or more members representing the categories described in WIA section 
117(b)(2)(A)(ii)-(v), and special consideration must be given to the 
entities identified in WIA section 117(b)(2)(A)(ii), (iv) and (v) in the 
selection of members representing those categories. The Local Board must 
contain at least one member representing each One-Stop partner.
    (b) The membership of Local Boards may include individuals or 
representatives of other appropriate entities, including entities 
representing individuals with multiple barriers to employment and other 
special populations, as determined by the chief elected official.
    (c) Members who represent organizations, agencies or other entities 
must be individuals with optimum policy making authority within the 
entities they represent.
    (d) A majority of the members of the Local Board must be 
representatives of business in the local area. Members representing 
business must be individuals who are owners, chief executive officers, 
chief operating officers, or other individuals with optimum policymaking 
or hiring authority. Business representatives serving on Local Boards 
may also serve on the State Board.
    (e) Chief elected officials must appoint the business 
representatives from among individuals who are nominated by local 
business organizations and business trade associations. Chief elected 
officials must appoint the labor representatives from among individuals 
who are nominated by local labor federations (or, for a local area in 
which no employees are represented by such organizations, other 
representatives of employees). (WIA sec. 117(b).)
    (f) An individual may be appointed as a representative of more than 
one entity if the individual meets all the criteria for representation, 
including the criteria described in paragraphs (c) through (e) of this 
section, for each entity.



Sec.  661.317  Who may be selected to represent a particular
One-Stop partner program on the Local Board when there is more
than one partner program entity in the local area?

    When there is more than one grant recipient, administrative entity 
or organization responsible for administration of funds of a particular 
One-stop partner program in the local area, the chief elected official 
may appoint one or more members to represent all of those particular 
partner program entities. In making such appointments, the local elected 
official may solicit nominations from the partner program entities.

[[Page 45]]



Sec.  661.320  Who must chair a Local Board?

    The Local Board must elect a chairperson from among the business 
representatives on the board. (WIA sec. 117(b)(5).)



Sec.  661.325  What criteria will be used to establish the 
membership of the Local Board?

    The Local Board is appointed by the chief elected official(s) in the 
local area in accordance with State criteria established under WIA 
section 117(b), and is certified by the Governor every two years, in 
accordance with WIA section 117(c)(2). The criteria for certification 
must be described in the State Plan. (WIA sec. 117(c).)



Sec.  661.330  Under what circumstances may the State use an
alternative entity as the Local Workforce Investment Board?

    (a) The State may use any local entity that meets the requirements 
of WIA section 117(i) to perform the functions of the Local Board. WIA 
section 117(i) requires that such entity:
    (1) Was established to serve the local area (or the service delivery 
area that most closely corresponds to the local area);
    (2) Was in existence on December 31, 1997;
    (3)(i) Is a Private Industry Council established under section 102 
of the Job Training Partnership Act, as in effect on December 31, 1997; 
or
    (ii) Is substantially similar to the Local Board described in WIA 
section 117 (a), (b), and (c) and (h)(1) and (2); and,
    (4) Includes, at a minimum, two or more representatives of business 
in the local area and two or more representatives of labor organizations 
nominated by local labor federations or employees in the local area.
    (b)(1) If the Governor certifies an alternative entity to perform 
the functions of the Local Board; the State workforce investment plan 
must demonstrate that the alternative entity meets the requirements of 
WIA section 117(i), set forth in paragraph (a) of this section.
    (2) If the alternative entity does not provide for representative 
membership of each of the categories of required Local Board membership 
under WIA section 117(b), including all of the One-stop partner 
programs, the local workforce investment plan must explain the manner in 
which the Local Board will ensure an ongoing role for the unrepresented 
membership group in the local workforce investment system.
    (3) The Local Board may provide an ongoing role for an unrepresented 
membership group, including entities carrying out One-stop partner 
programs, by means such as regularly scheduled consultations with 
entities within the unrepresented membership groups, by providing an 
opportunity for input into the local plan or other policy development by 
unrepresented membership groups, or by establishing an advisory 
committee of unrepresented membership groups. The Local Board must enter 
into good faith negotiations over the terms of the MOU with all entities 
carrying out One-stop partner programs, including programs not 
represented on the alternative entity.
    (c) If the membership structure of an alternative entity is 
significantly changed after December 31, 1997, the entity will no longer 
be eligible to perform the functions of the Local Board. In such case, 
the chief elected official(s) must establish a new Local Board which 
meets all of the criteria of WIA section 117(a), (b), and (c) and (h)(1) 
and (2).
    (d) A significant change in the membership structure includes any 
significant change in the organization of the alternative entity or in 
the categories of entities represented on the alternative entity which 
requires a change to the alternative entity's charter or a similar 
document that defines the formal organization of the alternative entity, 
regardless of whether the required change to the document has or has not 
been made. A significant change in the membership structure is 
considered to have occurred when members are added to represent groups 
not previously represented on the entity. A significant change in the 
membership structure is not considered to have occurred when additional 
members are added to an existing membership category, when non-voting 
members (including a Youth

[[Page 46]]

Council) are added, or when a member is added to fill a vacancy created 
in an existing membership category.
    (e) In 20 CFR parts 660 through 671, all references to the Local 
Board must be deemed to also apply to an alternative entity used by a 
local area. (WIA sec. 117(i).)



Sec.  661.335  What is a youth council, and what is its 
relationship to the Local Board?

    (a) A youth council must be established as a subgroup within each 
Local Board.
    (b) The membership of each youth council must include:
    (1) Members of the Local Board, such as educators, which may include 
special education personnel, employers, and representatives of human 
service agencies, who have special interest or expertise in youth 
policy;
    (2) Members who represent service agencies, such as juvenile justice 
and local law enforcement agencies;
    (3) Members who represent local public housing authorities;
    (4) Parents of eligible youth seeking assistance under subtitle B of 
title I of WIA;
    (5) Individuals, including former participants, and members who 
represent organizations, that have experience relating to youth 
activities; and
    (6) Members who represent the Job Corps, if a Job Corps Center is 
located in the local area represented by the council.
    (c) Youth councils may include other individuals, who the chair of 
the Local Board, in cooperation with the chief elected official, 
determines to be appropriate.
    (d) Members of the youth council who are not members of the Local 
Board must be voting members of the youth council and nonvoting members 
of the Local Board.



Sec.  661.340  What are the responsibilities of the 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, 
as determined by the chairperson of the Local Board;
    (c) Recommending eligible youth service providers in accordance with 
WIA section 123, subject to the approval of the Local Board;
    (d) Conducting oversight with respect to eligible providers of youth 
activities in the local area, subject to the approval of the Local 
Board; and
    (e) Carrying out other duties, as authorized by the chairperson of 
the Local Board, such as establishing linkages with educational agencies 
and other youth entities.



Sec.  661.345  What are the requirements for the submission of
the local workforce investment plan?

    (a) WIA section 118 requires that each Local Board, in partnership 
with the appropriate chief elected officials, develops and submits a 
comprehensive five-year plan to the Governor which identifies and 
describes certain policies, procedures and local activities that are 
carried out in the local area, and that is consistent with the State 
Plan.
    (b) The Local Board must provide an opportunity for public comment 
on and input into the development of the local workforce investment plan 
prior to its submission, and the opportunity for public comment on the 
local plan must:
    (1) Make copies of the proposed local plan available to the public 
(through such means as public hearings and local news media);
    (2) Include an opportunity for comment by members of the Local Board 
and members of the public, including representatives of business and 
labor organizations;
    (3) Provide at least a thirty (30) day period for comment, beginning 
on the date on which the proposed plan is made available, prior to its 
submission to the Governor; and
    (4) Be consistent with the requirement, in WIA section 117(e), that 
the Local Board make information about the plan available to the public 
on a regular basis through open meetings.
    (c) The Local Board must submit any comments that express 
disagreement with the plan to the Governor along with the plan.

[[Page 47]]



Sec.  661.350  What are the contents of the local workforce
investment plan?

    (a) The local workforce investment plan must meet the requirements 
of WIA section 118(b). The plan must include:
    (1) An identification of the workforce investment needs of 
businesses, job-seekers, and workers in the local area;
    (2) An identification of current and projected employment 
opportunities and job skills necessary to obtain such opportunities;
    (3) A description of the One-Stop delivery system to be established 
or designated in the local area, including:
    (i) How the Local Board will ensure continuous improvement of 
eligible providers of services and ensure that such providers meet the 
employment needs of local employers and participants; and
    (ii) A copy of the local Memorandum(s) of Understanding between the 
Local Board and each of the One-Stop partners concerning the operation 
of the local One-Stop delivery system;
    (4) A description of the local levels of performance negotiated with 
the Governor and the chief elected official(s) to be used by the Local 
Board for measuring the performance of the local fiscal agent (where 
appropriate), eligible providers, and the local One-Stop delivery 
system;
    (5) A description and assessment of the type and availability of 
adult and dislocated worker employment and training activities in the 
local area, including a description of the local ITA system and the 
procedures for ensuring that exceptions to the use of ITA's, if any, are 
justified under WIA section 134(d)(4)(G)(ii) and 20 CFR 663.430;
    (6) A description of how the Local Board will coordinate local 
activities with Statewide rapid response activities;
    (7) A description and assessment of the type and availability of 
youth activities in the local area, including an identification of 
successful providers of such activities;
    (8) A description of the process used by the Local Board to provide 
opportunity for public comment, including comment by representatives of 
business and labor organizations, and input into the development of the 
local plan, prior to the submission of the plan;
    (9) An identification of the fiscal agent, or entity responsible for 
the disbursal of grant funds;
    (10) A description of the competitive process to be used to award 
grants and contracts for activities carried out under this subtitle I of 
WIA, including the process to be used to procure training services that 
are made as exceptions to the Individual Training Account process (WIA 
section 134(d)(4)(G)),
    (11) A description of the criteria to be used by the Governor and 
the Local Board, under 20 CFR 663.600, to determine whether funds 
allocated to a local area for adult employment and training activities 
under WIA sections 133(b)(2)(A) or (3) are limited, and the process by 
which any priority will be applied by the One-Stop operator;
    (12) In cases where an alternate entity functions as the Local 
Board, the information required at Sec.  661.330(b), and
    (13) Such other information as the Governor may require.
    (b) The Governor must review completed plans and must approve all 
such plans within ninety days of their submission, unless the Governor 
determines in writing that:
    (1) There are deficiencies identified in local workforce investment 
activities carried out under this subtitle that have not been 
sufficiently addressed; or
    (2) The plan does not comply with title I of WIA and the WIA 
regulations, including the required consultations, the public comment 
provisions, and the nondiscrimination requirements of 29 CFR part 37.
    (c) In cases where the State is a single local area:
    (1) The Secretary performs the roles assigned to the Governor as 
they relate to local planning activities.
    (2) The Secretary issues planning guidance for such States.
    (3) The requirements found in WIA and in the WIA regulations for 
consultation with chief elected officials apply to the development of 
State and local plans and to the development and operation of the One-
Stop delivery system.
    (d) During program year 2000, if a local plan does not contain all 
of the

[[Page 48]]

elements described in paragraph (a) of this section, the Governor may 
approve a local plan on a transitional basis. A transitional approval 
under this paragraph is considered to be a written determination that 
the local plan is not approved under paragraph (b) of this section.



Sec.  661.355  When must a local plan be modified?

    The Governor must establish procedures governing the modification of 
local plans. Situations in which modifications may be required by the 
Governor include significant changes in local economic conditions, 
changes in the financing available to support WIA title I and partner-
provided WIA services, changes to the Local Board structure, or a need 
to revise strategies to meet performance goals.



                 Subpart D_Waivers and Work-Flex Waivers



Sec.  661.400  What is the purpose of the General Statutory
and Regulatory Waiver Authority provided at section 189(i)(4) 
of the Workforce Investment Act?

    (a) The purpose of the general statutory and regulatory waiver 
authority is to provide flexibility to States and local areas and 
enhance their ability to improve the statewide workforce investment 
system.
    (b) A waiver may be requested to address impediments to the 
implementation of a strategic plan, including the continuous improvement 
strategy, consistent with the key reform principles of WIA. These key 
reform principles include:
    (1) Streamlining services and information to participants through a 
One-Stop delivery system;
    (2) Empowering individuals to obtain needed services and information 
to enhance their employment opportunities;
    (3) Ensuring universal access to core employment-related services;
    (4) Increasing accountability of States, localities and training 
providers for performance outcomes;
    (5) Establishing a stronger role for Local Boards and the private 
sector;
    (6) Providing increased State and local flexibility to implement 
innovative and comprehensive workforce investment systems; and
    (7) Improving youth programs through services which emphasize 
academic and occupational learning.



Sec.  661.410  What provisions of WIA and the Wagner-Peyser Act
may be waived, and what provisions may not be waived?

    (a) The Secretary may waive any of the statutory or regulatory 
requirements of 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 judicial review;
    (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 
requirements of sections 8 through 10 of the Wagner-Peyser Act (29 
U.S.C. 49g-49i) except for requirements relating to:
    (1) The provision of services to unemployment insurance claimants 
and veterans; and
    (2) Universal access to the basic labor exchange services without 
cost to job seekers.
    (c) The Secretary does not intend to waive any of the statutory or 
regulatory provisions essential to the key reform principles embodied in 
the Workforce Investment Act, described in Sec.  661.400, except in 
extremely unusual circumstances where the provision can be demonstrated 
as impeding reform. (WIA sec. 189(i).)



Sec.  661.420  Under what conditions may a Governor request, and
the Secretary approve, a general waiver of statutory or regulatory
requirements under WIA section 189(i)(4)?

    (a) A Governor may request a general waiver in consultation with 
appropriate chief elected officials:

[[Page 49]]

    (1) By submitting a waiver plan which may accompany the State's WIA 
5-year strategic Plan; or
    (2) After a State's WIA Plan is approved, by directly submitting a 
waiver plan.
    (b) A Governor's waiver request may seek waivers for the entire 
State or for one or more local areas.
    (c) A Governor requesting a general waiver must submit to the 
Secretary a plan to improve the Statewide workforce investment system 
that:
    (1) Identifies the statutory or regulatory requirements for which a 
waiver is requested and the goals that the State or local area, as 
appropriate, intends to achieve as a result of the waiver and how those 
goals relate to the Strategic Plan goals;
    (2) Describes the actions that the State or local area, as 
appropriate, has undertaken to remove State or local statutory or 
regulatory barriers;
    (3) Describes the goals of the waiver and the expected programmatic 
outcomes if the request is granted;
    (4) Describes the individuals affected by the waiver; and
    (5) Describes the processes used to:
    (i) Monitor the progress in implementing the waiver;
    (ii) Provide notice to any Local Board affected by the waiver;
    (iii) Provide any Local Board affected by the waiver an opportunity 
to comment on the request; and
    (iv) Ensure meaningful public comment, including comment by business 
and organized labor, on the waiver.
    (d) The Secretary issues a decision on a waiver request within 90 
days after the receipt of the original waiver request.
    (e) The Secretary will approve a waiver request if and only to the 
extent that:
    (1) The Secretary determines that the requirements for which a 
waiver is requested impede the ability of either the State or local area 
to implement the State's plan to improve the Statewide workforce 
investment system;
    (2) The Secretary determines that the waiver plan meets all of the 
requirements of WIA section 189(i)(4) and Sec. Sec.  661.400 through 
661.420; and
    (3) The State has executed a Memorandum of Understanding with the 
Secretary requiring the State to meet, or ensure that the local area 
meets, agreed-upon outcomes and to implement other appropriate measures 
to ensure accountability.
    (f) The Secretary will issue guidelines under which the States may 
request general waivers of WIA and Wagner-Peyser requirements. (WIA sec. 
189(i).)



Sec.  661.430  Under what conditions may the Governor submit a 
Workforce Flexibility Plan?

    (a) A State may submit to the Secretary, and the Secretary may 
approve, a workforce flexibility (work-flex) plan under which the State 
is authorized to waive, in accordance with the plan:
    (1) Any of the statutory or regulatory requirements under title I of 
WIA applicable to local areas, if the local area requests the waiver in 
a waiver application, except for:
    (i) Requirements relating to the basic purposes 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 Investment Act, described in Sec.  
661.400.
    (2) Any of the statutory or regulatory requirements applicable to 
the State under section 8 through 10 of the Wagner-Peyser Act (29 U.S.C. 
49g-49i), except for requirements relating to:
    (i) The provision of services to unemployment insurance claimants 
and veterans; and
    (ii) Universal access to basic labor exchange services without cost 
to job seekers; and
    (3) Any of the statutory or regulatory requirements under the Older 
Americans Act of 1965 (OAA) (42 U.S.C. 3001 et seq.), applicable to 
State agencies on aging with respect to activities carried

[[Page 50]]

out using funds allotted under OAA section 506(a)(3) (42 U.S.C. 
3056d(a)(3)), except for requirements 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-year Strategic Plan or may be submitted separately. If it is 
submitted separately, the workforce flexibility plan must identify 
related provisions in the State's five-year Strategic Plan.
    (c) A workforce flexibility plan submitted under paragraph (a) of 
this section must include descriptions of:
    (1) The process by which local areas in the State may submit and 
obtain State approval of applications for waivers;
    (2) The statutory and regulatory requirements of title I of WIA that 
are likely to be waived by the State under the workforce flexibility 
plan;
    (3) The statutory and regulatory requirements of sections 8 through 
10 of the Wagner-Peyser Act that are proposed for waiver, if any;
    (4) The statutory and regulatory requirements of the Older Americans 
Act of 1965 that are proposed for waiver, if any;
    (5) The outcomes to be achieved by the waivers described in 
paragraphs (c)(1) to (4) of this section including, where appropriate, 
revisions to adjusted levels of performance included in the State or 
local plan under title I of WIA; and
    (6) The measures to be taken to ensure appropriate accountability 
for Federal funds in connection with the waivers.
    (d) The Secretary may approve a workforce flexibility plan for a 
period of up to five years.
    (e) Before submitting a workforce flexibility plan to the Secretary 
for approval, the State must provide adequate notice and a reasonable 
opportunity for comment on the proposed waiver requests under the 
workforce flexibility plan to all interested parties and to the general 
public.
    (f) The Secretary will issue guidelines under which States may 
request designation as a work-flex State.



Sec.  661.440  What limitations apply to the State's Workforce
Flexibility Plan authority under WIA?

    (a)(1) Under work-flex waiver authority a State must not waive the 
WIA, Wagner-Peyser or Older Americans Act requirements which are 
excepted from the work-flex waiver authority and described in Sec.  
661.430(a).
    (2) Requests to waive statutory and regulatory requirements of title 
I of WIA applicable at the State level may not be granted under work-
flex waiver authority granted to a State. Such requests may only be 
granted by the Secretary under the general waiver authority described at 
Sec. Sec.  661.410 through 661.420.
    (b) As required in Sec.  661.430(c)(5), States must address the 
outcomes to result from work-flex waivers as part of its workforce 
flexibility plan. Once approved, a State's work-flex designation is 
conditioned on the State demonstrating it has met the agreed-upon 
outcomes contained in its workforce flexibility plan.



PART 662_DESCRIPTION OF THE ONE-STOP SYSTEM UNDER TITLE I OF 
THE WORKFORCE INVESTMENT ACT--Table of Contents



      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 the Responsibilities of Partners

662.200 Who are the required One-Stop partners?
662.210 What other entities may serve as One-Stop partners?
662.220 What entity serves as the One-Stop partner for a particular 
          program in the local area?
662.230 What are the responsibilities of the required One-Stop partners?
662.240 What are a program's applicable core services?
662.250 Where and to what extent must required One-Stop partners make 
          core services available?
662.260 What services, in addition to the applicable core services, are 
          to be provided by One-Stop partners through the One-Stop 
          delivery system?

[[Page 51]]

662.270 How are the costs of providing services through the One-Stop 
          delivery system and the operating costs of the system to be 
          funded?
662.280 Does title I require One-Stop partners to use their funds for 
          individuals who are not eligible for the partner's program or 
          for services that are not authorized under the partner's 
          program?

 Subpart C_Memorandum of Understanding for the One-Stop Delivery System

662.300 What is the Memorandum of Understanding (MOU)?
662.310 Is there a single MOU for the local area or are there to be 
          separate MOU's between the Local Board and each partner?

                      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 limited conditions may the Local Board be designated 
          or certified as the One-Stop operator?
662.430 Under what conditions may One-Stop operators designated to 
          operate in a One-Stop delivery system established prior to the 
          enactment of WIA be designated to continue to act as a One-
          Stop operator under WIA without meeting the requirements of 
          Sec.  662.410(b)?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49398, Aug. 11, 2000, unless otherwise noted.



      Subpart A_General Description of the One-Stop Delivery System



Sec.  662.100  What is the One-Stop delivery system?

    (a) In general, the One-Stop delivery system is a system under which 
entities responsible for administering separate workforce investment, 
educational, and other human resource programs and funding streams 
(referred to as One-Stop partners) collaborate to create a seamless 
system of service delivery that will enhance access to the programs' 
services and improve long-term employment outcomes for individuals 
receiving assistance.
    (b) Title I of WIA assigns responsibilities at the local, State and 
Federal level to ensure the creation and maintenance of a One-Stop 
delivery system that enhances the range and quality of workforce 
development services that are accessible to individuals seeking 
assistance.
    (c) The system must include at least one comprehensive physical 
center in each local area that must provide the core services specified 
in WIA section 134(d)(2), and must provide access to other programs and 
activities carried out by the One-Stop partners.
    (d) While each local area must have at least one comprehensive 
center (and may have additional comprehensive centers), WIA section 
134(c) allows for arrangements to supplement the center. These 
arrangements may include:
    (1) A network of affiliated sites that can provide one or more 
partners' programs, services and activities at each site;
    (2) A network of One-Stop partners through which each partner 
provides services that are linked, physically or technologically, to an 
affiliated site that assures individuals are provided information on the 
availability of core services in the local area; and
    (3) Specialized centers that address specific needs, such as those 
of dislocated workers.
    (e) The design of the local area's One-Stop delivery system, 
including the number of comprehensive centers and the supplementary 
arrangements, must be described in the local plan and be consistent with 
the Memorandum of Understanding executed with the One-Stop partners.



    Subpart B_One-Stop Partners and the Responsibilities of Partners



Sec.  662.200  Who are the required One-Stop partners?

    (a) WIA section 121(b)(1) identifies the entities that are required 
partners in the local One-Stop systems.
    (b) The required partners are the entities that are responsible for 
administering the following programs and activities in the local area:
    (1) Programs authorized under title I of WIA, serving:
    (i) Adults;
    (ii) Dislocated workers;
    (iii) Youth;
    (iv) Job Corps;
    (v) Native American programs;

[[Page 52]]

    (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 et 
seq.); (WIA sec. 121(b)(1)(B)(ii));
    (3) Adult education and literacy activities authorized under title 
II of WIA; (WIA sec. 121(b)(1)(B)(iii));
    (4) Programs authorized under parts A and B of title I of the 
Rehabilitation Act (29 U.S.C. 720 et seq.); (WIA sec. 121(b)(1)(B)(iv));
    (5) [Reserved]
    (6) Senior community service employment activities authorized under 
title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.); 
(WIA sec. 121(b)(1)(B)(vi));
    (7) Postsecondary vocational education activities under the Carl D. 
Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2301 
et seq.); (WIA sec. 121(b)(1)(B)(vii));
    (8) Trade Adjustment Assistance and NAFTA Transitional Adjustment 
Assistance activities authorized under chapter 2 of title II of the 
Trade Act of 1974, as amended (19 U.S.C. 2271 et seq.) and Section 
123(c)(2) of the Trade Adjustment Assistance Reform Act of 2002 (Pub. L. 
107-210), respectively; see (WIA sec. 121(b)(1)(B)(viii));
    (9) Activities authorized under chapter 41 of title 38, U.S.C. 
(local veterans' employment representatives and disabled veterans 
outreach programs); (WIA sec. 121(b)(1)(B)(ix));
    (10) Employment and training activities carried out under the 
Community Services Block Grant (42 U.S.C. 9901 et seq.); (WIA sec. 
121(b)(1)(B)(x));
    (11) Employment and training activities carried out by the 
Department of Housing and Urban Development; (WIA sec. 
121(b)(1)(B)(xi)); and
    (12) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law); (WIA sec. 
121(b)(1)(B)(xii).)

[65 FR 49398, Aug. 11, 2000, as amended at 71 FR 35523, June 21, 2006]



Sec.  662.210  What other entities may serve as One-Stop partners?

    (a) WIA provides that other entities that carry out a human resource 
program, including Federal, State, or local programs and programs in the 
private sector may serve as additional partners in the One-Stop system 
if the Local 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 
Security Act (42 U.S.C. 601 et seq.);
    (2) Employment and training programs authorized under section 
6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4));
    (3) Work programs authorized under section 6(o) of the Food Stamp 
Act of 1977 (7 U.S.C. 2015(o));
    (4) Programs authorized under the National and Community Service Act 
of 1990 (42 U.S.C. 12501 et seq.); and
    (5) Other appropriate Federal, State or local programs, including 
programs related to transportation and housing and programs in the 
private sector. (WIA sec. 121(b)(2).)
    (c) The State may require that one or more of the programs 
identified in paragraph (b) of this section be included as a partner in 
all of the local One-Stop delivery systems in the State.



Sec.  662.220  What entity serves as the One-Stop partner for a
particular program in the local area?

    (a) The ``entity'' that carries out the program and activities 
listed in Sec. Sec.  662.200 and 662.210 and, therefore, serves as the 
One-Stop partner is the grant recipient, administrative entity or 
organization responsible for administering the funds of the specified 
program in the local area. The term ``entity'' does not include the 
service providers that contract with or are subrecipients of the local 
administrative entity. For programs that do not include local 
administrative entities, the responsible State Agency should be the 
partner. Specific entities for particular programs are identified in 
paragraph (b) of this section. If a program or activity listed in Sec.  
662.200 is not carried out in a local area, the requirements relating to 
a required One-Stop partner are not applicable to such program or 
activity in that local One-Stop system.
    (b)(1) For title II of WIA, the entity that carries out the program 
for the

[[Page 53]]

purposes of paragraph (a) is the State eligible entity. The State 
eligible entity may designate an eligible provider, or a consortium of 
eligible providers, as the ``entity'' for this purpose;
    (2) For title I, Part A, of the Rehabilitation Act, the entity that 
carries out the program for the purposes of paragraph (a) of this 
section is the designated State agency or designated unit specified 
under section 101(a)(2) that is primarily concerned with vocational 
rehabilitation, or vocational and other rehabilitation, of individuals 
with disabilities; and
    (3) Under WIA, the national programs, including Job Corps, the WIA 
Indian and Native American program, the Migrant and Seasonal Farmworkers 
program, and the Veterans' Workforce Investment program, are required 
One-Stop partners. Local Boards must include them in the One-Stop 
delivery system where they are present in their local area. In local 
areas where the national programs are not present, States and Local 
Boards should take steps to ensure that customer groups served by these 
programs have access to services through the One-Stop delivery system.



Sec.  662.230  What are the responsibilities of the required
One-Stop partners?

    All required partners must:
    (a) Make available to participants through the One-Stop delivery 
system the core services that are applicable to the partner's programs; 
(WIA sec. 121(b)(1)(A).)
    (b) Use a portion of funds made available to the partner's program, 
to the extent not inconsistent with the Federal law authorizing the 
partner's program, to:
    (1) Create and maintain the One-Stop delivery system; and
    (2) Provide core services; (WIA sec. 134(d)(1)(B).)
    (c) Enter into a memorandum of understanding (MOU) with the Local 
Board relating to the operation of the One-Stop system that meets the 
requirements of Sec.  662.300, including a description of services, how 
the cost of the identified services and operating costs of the system 
will be funded, and methods for referrals (WIA sec. 121(c));
    (d) Participate in the operation of the One-Stop system consistent 
with the terms of the MOU and requirements of authorizing laws; (WIA 
sec. 121(b)(1)(B).) and
    (e) Provide representation on the Local Workforce Investment Board. 
(WIA sec. 117(b)(2)(A)(vi).)



Sec.  662.240  What are a program's applicable core services?

    (a) The core services applicable to any One-Stop partner program are 
those services described in paragraph (b) of this section, that are 
authorized and provided under the partner's program.
    (b) The core services identified in section 134(d)(2) of the WIA 
are:
    (1) Determinations of whether the individuals are eligible to 
receive assistance under subtitle B of title I of WIA;
    (2) Outreach, intake (which may include worker profiling), and 
orientation to the information and other services available through the 
One-Stop delivery system;
    (3) Initial assessment of skill levels, aptitudes, abilities, and 
supportive service needs;
    (4) Job search and placement assistance, and where appropriate, 
career counseling;
    (5) Provision of employment statistics information, including the 
provision of accurate information relating to local, regional, and 
national labor market areas, including--
    (i) Job vacancy listings in such labor market areas;
    (ii) Information on job skills necessary to obtain the listed jobs; 
and
    (iii) Information relating to local occupations in demand and the 
earnings and skill requirements for such occupations;
    (6) Provision of program performance information and program cost 
information on:
    (i) Eligible providers of training services described in WIA section 
122;
    (ii) Eligible providers of youth activities described in WIA section 
123;
    (iii) Providers of adult education described in title II;
    (iv) Providers of postsecondary vocational education activities and 
vocational education activities available to

[[Page 54]]

school dropouts under the Carl D. Perkins Vocational and Applied 
Technology Education Act (20 U.S.C. 2301 et seq.); and
    (v) Providers of vocational rehabilitation program activities 
described in title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et 
seq.);
    (7) Provision of information on how the local area is performing on 
the local performance measures and any additional performance 
information with respect to the One-Stop delivery system in the local 
area;
    (8) Provision of accurate information relating to the availability 
of supportive services, including, at a minimum, child care and 
transportation, available in the local area, and referral to such 
services, as appropriate;
    (9) Provision of information regarding filing claims for 
unemployment compensation;
    (10) Assistance in establishing eligibility for programs of 
financial aid assistance for training and education programs that are 
not funded under this Act and are available in the local area; and
    (11) Followup services, including counseling regarding the 
workplace, for participants in workforce investment activities 
authorized under subtitle (B) of title I of WIA who are placed in 
unsubsidized employment, for not less than 12 months after the first day 
of the employment, as appropriate.

[65 FR 49398, Aug. 11, 2000, as amended at 71 FR 35523, June 21, 2006]



Sec.  662.250  Where and to what extent must required One-Stop 
partners make core services available?

    (a) At a minimum, the core services that are applicable to the 
program of the partner under Sec.  662.220, and that are in addition to 
the basic labor exchange services traditionally provided in the local 
area under the Wagner-Peyser program, must be made available at the 
comprehensive One-Stop center. These services must be made available to 
individuals attributable to the partner's program who seek assistance at 
the center. The adult and dislocated worker program partners are 
required to make all of the core services listed in Sec.  662.240 
available at the center in accordance with 20 CFR 663.100(b)(1).
    (b) The applicable core services may be made available by the 
provision of appropriate technology at the comprehensive One-Stop 
center, by co-locating personnel at the center, cross-training of staff, 
or through a cost reimbursement or other agreement between service 
providers at the comprehensive One-Stop center and the partner, as 
described in the MOU.
    (c) The responsibility of the partner for the provision of core 
services must be proportionate to the use of the services at the 
comprehensive One-Stop center by the individuals attributable to the 
partner's program. The specific method of determining each partner's 
proportionate responsibility must be described in the MOU.
    (d) For purposes of this part, individuals attributable to the 
partner's program may include individuals who are referred through the 
comprehensive One-Stop center and enrolled in the partner's program 
after the receipt of core services, who have been enrolled in the 
partner's program prior to receipt of the applicable core services at 
the center, who meet the eligibility criteria for the partner's program 
and who receive an applicable core service, or who meet an alternative 
definition described in the MOU.
    (e) Under the MOU, the provision of applicable core services at the 
center by the One-Stop partner may be supplemented by the provision of 
such services through the networks of affiliated sites and networks of 
One-Stop partners described in WIA section 134(c)(2).



Sec.  662.260  What services, in addition to the applicable core
services, are to be provided by One-Stop partners through the
One-Stop delivery system?

    In addition to the provision of core services, One-Stop partners 
must provide access to the other activities and programs carried out 
under the partner's authorizing laws. The access to these services must 
be described in the local MOU. 20 CFR part 663 describes the specific 
requirements relating to the provision of core, intensive, and training 
services through the One-Stop system that apply to the adult and the 
dislocated worker programs authorized

[[Page 55]]

under title I of WIA. Additional requirements apply to the provision of 
all labor exchange services under the Wagner-Peyser Act. (WIA sec. 
134(c)(1)(D).)



Sec.  662.270  How are the costs of providing services through
the One-Stop delivery system and the operating costs of the
system to be funded?

    The MOU must describe the particular funding arrangements for 
services and operating costs of the One-Stop delivery system. Each 
partner must contribute a fair share of the operating costs of the One-
Stop delivery system proportionate to the use of the system by 
individuals attributable to the partner's program. There are a number of 
methods, consistent with the equirements of the relevant OMB circulars, 
that may be used for allocating costs among the partners. Some of these 
methodologies include allocations based on direct charges, cost pooling, 
indirect cost rates and activity-based cost allocation plans. Additional 
guidance relating to cost allocation methods may be issued by the 
Department in consultation with the other appropriate Federal agencies.



Sec.  662.280  Does title I require One-Stop partners to use 
their funds for individuals who are not eligible for the partner's
program or for services that are not authorized under the partner's
program?

    No, the requirements of the partner's program continue to apply. The 
Act intends to create a seamless service delivery system for individuals 
seeking workforce development services by linking the One-Stop partners 
in the One-Stop delivery system. While the overall effect is to provide 
universal access to core services, the resources of each partner may 
only be used to provide services that are authorized and provided under 
the partner's program to individuals who are eligible under such 
program. (WIA sec. 121(b)(1).)



 Subpart C_Memorandum of Understanding for the One-Stop Delivery
 System



Sec.  662.300  What is the Memorandum of Understanding (MOU)?

    (a) The Memorandum of Understanding (MOU) is an agreement developed 
and executed between the Local Board, with the agreement of the chief 
elected official, and the One-Stop partners relating to the operation of 
the One-Stop delivery system in the local area.
    (b) The MOU must contain the provisions required by WIA section 
121(c)(2). These provisions cover services to be provided through the 
One-Stop delivery system; the funding of the services and operating 
costs of the system; and methods for referring individuals between the 
One-Stop operators and partners. The MOU's provisions also must 
determine the duration and procedures for amending the MOU, and may 
contain any other provisions that are consistent with WIA title I and 
the WIA regulations agreed to by the parties. (WIA sec. 121(c).)



Sec.  662.310  Is there a single MOU for the local area or are
there to be separate MOU's between the Local Board and each partner?

    (a) A single ``umbrella'' MOU may be developed that addresses the 
issues relating to the local One-Stop delivery system for the Local 
Board, chief elected official and all partners, or the Local Board, 
chief elected official and the partners may decide to enter into 
separate agreements between the Local Board (with the agreement of the 
chief elected official) and one or more partners. Under either approach, 
the requirements described in this subpart apply. Since funds are 
generally appropriated annually, financial agreements may be negotiated 
with each partner annually to clarify funding of services and operating 
costs of the system under the MOU.
    (b) WIA emphasizes full and effective partnerships between Local 
Boards, chief elected officials and One-Stop partners. Local Boards and 
partners

[[Page 56]]

must enter into good-faith negotiations. Local Boards, chief elected 
officials and partners may request assistance from a State agency 
responsible for administering the partner program, the Governor, State 
Board, or other appropriate parties. The State agencies, the State 
Board, and the Governor may also consult with the appropriate Federal 
agencies to address impasse situations after exhausting other 
alternatives. The Local Board and partners must document the 
negotiations and efforts that have taken place. Any failure to execute 
an MOU between a Local Board and a required partner must be reported by 
the Local Board and the required partner to the Governor or State Board, 
and the State agency responsible for administering the partner's 
program, and by the Governor or the State Board and the responsible 
State agency to the Secretary of Labor and to the head of any other 
Federal agency with responsibility for oversight of a partner's program. 
(WIA sec. 121(c).)
    (c) If an impasse has not been resolved through the alternatives 
available under this section any partner that fails to execute an MOU 
may not be permitted to serve on the Local Board. In addition, any local 
area in which a Local Board has failed to execute an MOU with all of the 
required partners is not eligible for State incentive grants awarded on 
the basis of local coordination of activities under 20 CFR 
665.200(d)(2). These sanctions are in addition to, not in lieu of, any 
other remedies that may be applicable to the Local Board or to each 
partner for failure to comply with the statutory requirement.



                      Subpart D_One-Stop Operators



Sec.  662.400  Who is the One-Stop operator?

    (a) The One-Stop operator is the entity that performs the role 
described in paragraph (c) of this section. The types of entities that 
may be selected to be the One-Stop operator include:
    (1) A postsecondary educational institution;
    (2) An Employment Service agency established under the Wagner-Peyser 
Act on behalf of the local office of the agency;
    (3) A private, nonprofit organization (including a community-based 
organization);
    (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 
entities and may operate one or more One-Stop centers. In addition, 
there may be more than one One-Stop operator in a local area.
    (c) The agreement between the Local Board and the One-Stop operator 
shall specify the operator's role. That role may range between simply 
coordinating service providers within the center, to being the primary 
provider of services within the center, to coordinating activities 
throughout the One-Stop system. (WIA sec. 121(d).)



Sec.  662.410  How is the One-Stop operator selected?

    (a) The Local Board, with the agreement of the chief elected 
official, must designate and certify One-Stop operators in each local 
area.
    (b) The One-Stop operator is designated or certified:
    (1) Through a competitive process,
    (2) Under an agreement between the Local Board and a consortium of 
entities that includes at least three or more of the required One-Stop 
partners.identified at Sec.  662.200, or
    (3) Under the conditions described in Sec. Sec.  662.420 or 662.430. 
(WIA sec.121(d), 121(e) and 117(f)(2))
    (c) The designation or certification of the One-Stop operator must 
be carried out in accordance with the ``sunshine provision'' at 20 CFR 
661.307.



Sec.  662.420  Under what limited conditions may the Local Board
be designated or certified as the One-Stop operator?

    (a) The Local Board may be designated or certified as the One-Stop 
operator only with the agreement of the chief elected official and the 
Governor.
    (b) The designation or certification must be reviewed whenever the 
biennial certification of the Local Board is made under 20 CFR 
663.300(a). (WIA sec. 117(f)(2).)

[[Page 57]]



Sec.  662.430  Under what conditions may One-Stop operators 
designated to operate in a One-Stop delivery system established
prior to the enactment of WIA be designated to continue as a 
One-Stop operator under WIA without meeting the requirements of
Sec.  662.410(b)?

    Under WIA section 121(e), the Local Board, the chief elected 
official and the Governor may agree to certify an entity that has been 
serving as a One-Stop operator in a One-Stop delivery system established 
prior to the enactment of WIA (August 7, 1998) to continue to serve as a 
One-Stop operator without meeting the requirements for designation under 
Sec.  662.410(b) if the local One-Stop delivery system is modified, as 
necessary, to meet the other requirements of this part, including the 
requirements relating to the inclusion of One-Stop partners, the 
execution of the MOU, and the provision of services.(WIA sec. 121(e).)



PART 663_ADULT AND DISLOCATED WORKER ACTIVITIES UNDER TITLE I OF
THE WORKFORCE INVESTMENT ACT--Table of Contents



 Subpart A_Delivery of Adult and Dislocated Worker Services Through the 
                        One-Stop Delivery System

Sec.
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 dislocated workers be registered?
663.110 What are the eligibility criteria for core services for adults 
          in the adult and dislocated worker programs?
663.115 What are the eligibility criteria for core services for 
          dislocated workers in the adult and dislocated worker 
          programs?
663.120 Are displaced homemakers eligible for dislocated worker 
          activities under WIA?
663.145 What services are WIA title I adult and dislocated workers 
          formula funds used to provide?
663.150 What core services must be provided to adults and dislocated 
          workers?
663.155 How are core services delivered?
663.160 Are there particular core services an individual must receive 
          before receiving intensive services under WIA section 
          134(d)(3)?
663.165 How long must an individual be in core services in order to be 
          eligible for intensive services?

                      Subpart B_Intensive Services

663.200 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 
          worker needs intensive services to obtain or retain employment 
          leading to ``self-sufficiency''?
663.240 Are there particular intensive services an individual must 
          receive before receiving training services under WIA section 
          134(d)(4)(A)(i)?
663.245 What is the individual employment plan?
663.250 How long must an individual participant be in intensive services 
          to be eligible for training services?

                       Subpart C_Training Services

663.300 What are training services for adults and dislocated workers?
663.310 Who may receive training services?
663.320 What are the requirements for coordination of WIA training funds 
          and other grant assistance?

                 Subpart D_Individual Training Accounts

663.400 How are training services provided?
663.410 What is an Individual Training Account (ITA)?
663.420 Can the duration and amount of ITA's be limited?
663.430 Under what circumstances may mechanisms other than ITA's be used 
          to provide training services?
663.440 What are the requirements for consumer choice?

                  Subpart E_Eligible Training Providers

663.500 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 
          training providers?
663.535 What is the process for determining the subsequent eligibility 
          of a provider?
663.540 What kind of performance and cost information is required for 
          determinations of subsequent eligibility?
663.550 How is eligible provider information developed and maintained?
663.555 How is the State list disseminated?

[[Page 58]]

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 
          available from the State list?
663.585 May individuals choose training providers located outside of the 
          local area?
663.590 May a community-based organization (CBO) be included on an 
          eligible provider list?
663.595 What requirements apply to providers of OJT and customized 
          training?

               Subpart F_Priority and Special Populations

663.600 What priority must be given to low-income adults and public 
          assistance recipients served with adult funds under title I?
663.610 Does the statutory priority for use of adult funds also apply to 
          dislocated worker funds?
663.620 How do the Welfare-to-Work program and the TANF program relate 
          to the One-Stop delivery system?
663.630 How does a displaced homemaker qualify for services under title 
          I?
663.640 May an individual with a disability whose family does not meet 
          income eligibility criteria under the Act be eligible for 
          priority as a low-income adult?

       Subpart G_On-the-Job Training (OJT) and Customized Training

663.700 What are the requirements for on-the-job training (OJT)?
663.705 What are the requirements for OJT contracts for employed 
          workers?
663.710 What conditions govern OJT payments to employers?
663.715 What is customized training?
663.720 What are the requirements for customized training for employed 
          workers?
663.730 May funds provided to employers for OJT of customized training 
          be used to assist, promote, or deter union organizing?

                      Subpart H_Supportive Services

663.800 What are supportive services for adults and dislocated workers?
663.805 When may supportive services be provided to participants?
663.810 Are there limits on the amounts or duration of funds for 
          supportive services?
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 eligibility requirements for dislocated workers to 
          receive needs-related payments?
663.830 May needs-related payments be paid while a participant is 
          waiting to start training classes?
663.840 How is the level of needs-related payments determined?

    Authority: Section 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49402, Aug. 11, 2000, unless otherwise noted.



 Subpart A_Delivery of Adult and Dislocated Worker Services Through the 
                        One-Stop Delivery System



Sec.  663.100  What is the role of the adult and dislocated worker
programs in the One-Stop delivery system?

    (a) The One-Stop system is the basic delivery system for adult and 
dislocated worker services. Through this system, adults and dislocated 
workers can access a continuum of services. The services are organized 
into three levels: core, intensive, and training.
    (b) The chief elected official or his/her designee(s), as the local 
grant recipient(s) for the adult and dislocated worker programs, is a 
required One-Stop partner and is subject to the provisions relating to 
such partners described in 20 CFR part 662. Consistent with those 
provisions:
    (1) Core services for adults and dislocated workers must be made 
available in at least one comprehensive One-Stop center in each local 
workforce investment area. Services may also be available elsewhere, 
either at affiliated sites or at specialized centers. For example, 
specialized centers may be established to serve workers being dislocated 
from a particular employer or industry, or to serve residents of public 
housing.
    (2) The One-Stop centers also make intensive services available to 
adults and dislocated workers, as needed, either by the One-Stop 
operator directly or through contracts with service providers that are 
approved by the Local Board.
    (3) Through the One-Stop system, adults and dislocated workers 
needing training are provided Individual Training Accounts (ITA's) and 
access to lists of eligible providers and programs of training. These 
lists contain quality consumer information, including cost and 
performance information for each of the providers' programs, so that 
participants can make informed choices

[[Page 59]]

on where to use their ITA's. (ITA's are more fully discussed in subpart 
D of this part.)



Sec.  663.105  When must adults and dislocated workers be registered?

    (a) Registration is the process for collecting information to 
support a determination of eligibility. This information may be 
collected through methods that include electronic data transfer, 
personal interview, or an individual's application.
    (b) Adults and dislocated workers who receive services funded under 
title I other than self-service or informational activities must be 
registered and determined eligible.
    (c) EO data must be collected on every individual who is interested 
in being considered for WIA title I financially assisted aid, benefits, 
services, or training by a recipient, and who has signified that 
interest by submitting personal information in response to a request 
from the recipient.



Sec.  663.110  What are the eligibility criteria for core services
for adults in the adult and dislocated worker programs?

    To be eligible to receive core services as an adult in the adult and 
dislocated worker programs, an individual must be 18 years of age or 
older. To be eligible for the dislocated worker programs, an eligible 
adult must meet the criteria of Sec.  663.115. Eligibility criteria for 
intensive and training services are found at Sec. Sec.  663.220 and 
663.310.



Sec.  663.115  What are the eligibility criteria for core services
for dislocated workers in the adult and dislocated worker programs?

    (a) To be eligible to receive core services as a dislocated worker 
in the adult and dislocated worker programs, an individual must meet the 
definition of ``dislocated worker'' at WIA section 101(9). Eligibility 
criteria for intensive and training services are found at Sec. Sec.  
663.220 and 663.310.
    (b) Governors and Local Boards may establish policies and procedures 
for One-Stop operators to use in determining an individual's eligibility 
as a dislocated worker, consistent with the definition at WIA section 
101(9). These policies and procedures may address such conditions as:
    (1) What constitutes a ``general announcement'' of plant closing 
under WIA section 101(9)(B)(ii) or (iii); and
    (2) What constitutes ``unemployed as a result of general economic 
conditions in the community in which the individual resides or because 
of natural disasters'' for determining the eligibility of self-employed 
individuals, including family members and farm or ranch hands, under WIA 
section 101(9)(C).



Sec.  663.120  Are displaced homemakers eligible for dislocated 
worker activities under WIA?

    (a) Yes, there are two significant differences from the eligibility 
requirements under the Job Training Partnership Act.
    (b) Under the dislocated worker program in JTPA, displaced 
homemakers are defined as ``additional dislocated workers'' and are only 
eligible to receive services if the Governor determines that providing 
such services would not adversely affect the delivery of services to the 
other eligible dislocated workers. Under WIA section 101(9), displaced 
homemakers who meet the definition at WIA section 101(10) are eligible 
dislocated workers without any additional determination.
    (c) The definition of displaced homemaker under JTPA included 
individuals who had been dependent upon public assistance under Aid for 
Families with Dependent Children (AFDC) as well as those who had been 
dependent on the income of another family member. The definition in WIA 
section 101(10) includes only those individuals who were dependent on a 
family member's income. Those individuals who have been dependent on 
public assistance may be served in the adult program.



Sec.  663.145  What services are WIA title I adult and dislocated
workers formula funds used to provide?

    (a) WIA title I formula funds allocated to local areas for adults 
and dislocated workers must be used to provide core, intensive and 
training services through the One-Stop delivery system. Local Boards 
determine the most appropriate mix of these services, but

[[Page 60]]

all three types must be available for both adults and dislocated 
workers. There are different eligibility criteria for each of these 
types of services, which are described at Sec. Sec.  663.110, 663.115, 
663.220 and 663.310.
    (b) WIA title I funds may also be used to provide the other services 
described in WIA section 134(e):
    (1) Discretionary One-Stop delivery activities, including:
    (i) Customized screening and referral of qualified participants in 
training services to employment; and
    (ii) Customized employment-related services to employers on a fee-
for-service basis that are in addition to labor exchange services 
available to employers under the Wagner-Peyser Act.
    (2) Supportive services, including needs-related payments, as 
described in subpart H of this part.



Sec.  663.150  What core services must be provided to adults and
dislocated workers?

    (a) At a minimum, all of the core services described in WIA section 
134(d)(2) and 20 CFR 662.240 must be provided in each local area through 
the One-Stop delivery system.
    (b) Followup services must be made available, as appropriate, for a 
minimum of 12 months following the first day of employment, to 
registered participants who are placed in unsubsidized employment.



Sec.  663.155  How are core services delivered?

    Core services must be provided through the One-Stop delivery system. 
Core services may be provided directly by the One-Stop operator or 
through contracts with service providers that are approved by the Local 
Board. The Local Board may only be a provider of core services when 
approved by the chief elected official and the Governor in accordance 
with the requirements of WIA section 117(f)(2) and 20 CFR 661.310.



Sec.  663.160  Are there particular core services an individual
must receive before receiving intensive services under WIA 
section 134(d)(3)?

    (a) Yes, at a minimum, an individual must receive at least one core 
service, such as an initial assessment or job search and placement 
assistance, before receiving intensive services. The initial assessment 
provides preliminary information about the individual's skill levels, 
aptitudes, interests, and supportive services needs. The job search and 
placement assistance helps the individual determine whether he or she is 
unable to obtain employment, and thus requires more intensive services 
to obtain employment. The decision on which core services to provide, 
and the timing of their delivery, may be made on a case-by-case basis at 
the local level depending upon the needs of the participant.
    (b) A determination of the need for intensive services under Sec.  
663.220, as established by the initial assessment or the individual's 
inability to obtain employment through the core services provided, must 
be contained in the participant's case file.



Sec.  663.165  How long must an individual be in core services in 
order to be eligible for intensive services?

    There is no Federally-required minimum time period for participation 
in core services before receiving intensive services. (WIA sec. 
134(d)(3).)



                      Subpart B_Intensive Services



Sec.  663.200  What are intensive services for adults and 
dislocated workers?

    (a) Intensive services are listed in WIA section 134(d)(3)(C). The 
list in the Act is not all-inclusive and other intensive services, such 
as out-of-area job search assistance, literacy activities related to 
basic workforce readiness, relocation assistance, internships, and work 
experience may be provided, based on an assessment or individual 
employment plan.
    (b) For the purposes of paragraph (a) of this section, work 
experience is a planned, structured learning experience that takes place 
in a workplace for a limited period of time. Work experience may be paid 
or unpaid, as appropriate. A work experience workplace may be in the 
private for profit sector, the non-profit sector, or the public sector. 
Labor standards apply in any work experience where an employee/employer 
relationship, as defined by the Fair Labor Standards Act, exists.

[[Page 61]]



Sec.  663.210  How are intensive services delivered?

    (a) Intensive services must be provided through the One-Stop 
delivery system, including specialized One-Stop centers. Intensive 
services may be provided directly by the One-Stop operator or through 
contracts with service providers, which may include contracts with 
public, private for-profit, and private non-profit service providers 
(including specialized service providers), that are approved by the 
Local Board. (WIA secs. 117(d)(2)(D) and 134(d)(3)(B).)
    (b) The Local Board may only be a provider of intensive services 
when approved by the chief elected official and the Governor in 
accordance with WIA section 117(f)(2) and 20 CFR 661.310.



Sec.  663.220  Who may receive intensive services?

    There are two categories of adults and dislocated workers who may 
receive intensive services:
    (a) Adults and dislocated workers who are unemployed, have received 
at least one core service and are unable to obtain employment through 
core services, and are determined by a One-Stop operator to be in need 
of more intensive services to obtain employment; and
    (b) Adults and dislocated workers who are employed, have received at 
least one core service, and are determined by a One-Stop operator to be 
in need of intensive services to obtain or retain employment that leads 
to self-sufficiency, as described in Sec.  663.230.



Sec.  663.230  What criteria must be used to determine whether an
employed worker needs intensive services to obtain or retain employment
leading to ``self-sufficiency''?

    State Boards or Local Boards must set the criteria for determining 
whether employment leads to self-sufficiency. At a minimum, such 
criteria must provide that self-sufficiency means employment that pays 
at least the lower living standard income level, as defined in WIA 
section 101(24). Self-sufficiency for a dislocated worker may be defined 
in relation to a percentage of the layoff wage. The special needs of 
individuals with disabilities or other barriers to employment should be 
taken into account when setting criteria to determine self-sufficiency.



Sec.  663.240  Are there particular intensive services an
individual must receive before receiving training services under
WIA section 134(d)(4)(A)(i)?

    (a) Yes, at a minimum, an individual must receive at least one 
intensive service, such as development of an individual employment plan 
with a case manager or individual counseling and career planning, before 
the individual may receive training services.
    (b) The case file must contain a determination of need for training 
services under Sec.  663.310, as identified in the individual employment 
plan, comprehensive assessment, or through any other intensive service 
received.



Sec.  663.245  What is the individual employment plan?

    The individual employment plan is an ongoing strategy jointly 
developed by the participant and the case manager that identifies the 
participant's employment goals, the appropriate achievement objectives, 
and the appropriate combination of services for the participant to 
achieve the employment goals.



Sec.  663.250  How long must an individual participant be in
intensive services to be eligible for training services?

    There is no Federally-required minimum time period for participation 
in intensive services before receiving training services. The period of 
time an individual spends in intensive services should be sufficient to 
prepare the individual for training or employment. (WIA sec. 
134(d)(4)(A)(i).)



                       Subpart C_Training Services



Sec.  663.300  What are training services for adults and 
dislocated workers?

    Training services are listed in WIA section 134(d)(4)(D). The list 
in the Act is not all-inclusive and additional training services may be 
provided.

[[Page 62]]



Sec.  663.310  Who may receive training services?

    Training services may be made available to employed and unemployed 
adults and dislocated workers who:
    (a) Have met the eligibility requirements for intensive services, 
have received at least one intensive service under Sec.  663.240, and 
have been determined to be unable to obtain or retain employment through 
such services;
    (b) After an interview, evaluation, or assessment, and case 
management, have been determined by a One-Stop operator or One-Stop 
partner, to be in need of training services and to have the skills and 
qualifications to successfully complete the selected training program;
    (c) Select a program of training services that is directly linked to 
the employment opportunities either in the local area or in another area 
to which the individual is willing to relocate;
    (d) Are unable to obtain grant assistance from other sources to pay 
the costs of such training, including such sources as Welfare-to-Work, 
State-funded training funds, Trade Adjustment Assistance and Federal 
Pell Grants established under title IV of the Higher Education Act of 
1965, or require WIA assistance in addition to other sources of grant 
assistance, including Federal Pell Grants (provisions relating to fund 
coordination are found at Sec.  663.320 and WIA section 134(d)(4)(B)); 
and
    (e) For individuals whose services are provided through the adult 
funding stream, are determined eligible in accordance with the State and 
local priority system, if any, in effect for adults under WIA section 
134(d)(4)(E) and Sec.  663.600. (WIA sec. 134(d)(4)(A).)



Sec.  663.320  What are the requirements for coordination of WIA
training funds and other grant assistance?

    (a) WIA funding for training is limited to participants who:
    (1) Are unable to obtain grant assistance from other sources to pay 
the costs of their training; or
    (2) Require assistance beyond that available under grant assistance 
from other sources to pay the costs of such training. Program operators 
and training providers must coordinate funds available to pay for 
training as described in paragraphs (b) and (c) of this section.
    (b) Program operators must coordinate training funds available and 
make funding arrangements with One-Stop partners and other entities to 
apply the provisions of paragraph (a) of this section. Training 
providers must consider the availability of other sources of grants to 
pay for training costs such as Welfare-to-Work, State-funded training 
funds, and Federal Pell Grants, so that WIA funds supplement other 
sources of training grants.
    (c) A WIA participant may enroll in WIA-funded training while his/
her application for a Pell Grant is pending as long as the One-Stop 
operator has made arrangements with the training provider and the WIA 
participant regarding allocation of the Pell Grant, if it is 
subsequently awarded. In that case, the training provider must reimburse 
the One-Stop operator the WIA funds used to underwrite the training for 
the amount the Pell Grant covers. Reimbursement is not required from the 
portion of Pell Grant assistance disbursed to the WIA participant for 
education-related expenses. (WIA sec. 134(d)(4)(B).)



                 Subpart D_Individual Training Accounts



Sec.  663.400  How are training services provided?

    Except under the three conditions described in WIA section 
134(d)(4)(G)(ii) and Sec.  663.430(a), the Individual Training Account 
(ITA) is established for eligible individuals to finance training 
services. Local Boards may only provide training services under Sec.  
663.430 if they receive a waiver from the Governor and meet the 
requirements of 20 CFR 661.310 and WIA section 117(f)(1). (WIA sec. 
134(d)(4)(G).)



Sec.  663.410  What is an Individual Training Account (ITA)?

    The ITA is established on behalf of a participant. WIA title I adult 
and dislocated workers purchase training services from eligible 
providers they select in consultation with the case manager. Payments 
from ITA's may be made in a variety of ways, including

[[Page 63]]

the electronic transfer of funds through financial institutions, 
vouchers, or other appropriate methods. Payments may also be made 
incrementally; through payment of a portion of the costs at different 
points in the training course. (WIA sec. 134(d)(4)(G).)



Sec.  663.420  Can the duration and amount of ITA's be limited?

    (a) Yes, the State or Local Board may impose limits on ITA's, such 
as limitations on the dollar amount and/or duration.
    (b) Limits to ITA's may be established in different ways:
    (1) There may be a limit for an individual participant that is based 
on the needs identified in the individual employment plan; or
    (2) There may be a policy decision by the State Board or Local Board 
to establish a range of amounts and/or a maximum amount applicable to 
all ITA's.
    (c) Limitations established by State or Local Board policies must be 
described in the State or Local Plan, respectively, but should not be 
implemented in a manner that undermines the Act's requirement that 
training services are provided in a manner that maximizes customer 
choice in the selection of an eligible training provider. ITA 
limitations may provide for exceptions to the limitations in individual 
cases.
    (d) An individual may select training that costs more than the 
maximum amount available for ITAs under a State or local policy when 
other sources of funds are available to supplement the ITA. These other 
sources may include: Pell Grants; scholarships; severance pay; and other 
sources.



Sec.  663.430  Under what circumstances may mechanisms other than
ITA's be used to provide training services?

    (a) Contracts for services may be used instead of ITA's only when 
one of the following three exceptions applies:
    (1) When the services provided are on-the-job training (OJT) or 
customized training;
    (2) When the Local Board determines that there are an insufficient 
number of eligible providers in the local area to accomplish the purpose 
of a system of ITA's. The Local Plan must describe the process to be 
used in selecting the providers under a contract for services. This 
process must include a public comment period for interested providers of 
at least 30 days;
    (3) When the Local Board determines that there is a training 
services program of demonstrated effectiveness offered in the area by a 
community-based organization (CBO) or another private organization to 
serve special participant populations that face multiple barriers to 
employment, as described in paragraph (b) in this section. The Local 
Board must develop criteria to be used in determining demonstrated 
effectiveness, particularly as it applies to the special participant 
population to be served. The criteria may include:
    (i) Financial stability of the organization;
    (ii) Demonstrated performance in the delivery of services to hard to 
serve participant populations through such means as program completion 
rate; attainment of the skills, certificates or degrees the program is 
designed to provide; placement after training in unsubsidized 
employment; and retention in employment; and
    (iii) How the specific program relates to the workforce investment 
needs identified in the local plan.
    (b) Under paragraph (a)(3) of this section, special participant 
populations that face multiple barriers to employment are populations of 
low-income individuals that are included in one or more of the following 
categories:
    (1) Individuals with substantial language or cultural barriers;
    (2) Offenders;
    (3) Homeless individuals; and
    (4) Other hard-to-serve populations as defined by the Governor.



Sec.  663.440  What are the requirements for consumer choice?

    (a) Training services, whether under ITA's or under contract, must 
be provided in a manner that maximizes informed consumer choice in 
selecting an eligible provider.
    (b) Each Local Board, through the One-Stop center, must make 
available to customers the State list of eligible providers required in 
WIA section

[[Page 64]]

122(e). The list includes a description of the programs through which 
the providers may offer the training services, the information 
identifying eligible providers of on-the-job training and customized 
training required under WIA section 122(h) (where applicable), and the 
performance and cost information about eligible providers of training 
services described in WIA sections 122 (e) and (h).
    (c) An individual who has been determined eligible for training 
services under Sec.  663.310 may select a provider described in 
paragraph (b) of this section after consultation with a case manager. 
Unless the program has exhausted training funds for the program year, 
the operator must refer the individual to the selected provider, and 
establish an ITA for the individual to pay for training. For purposes of 
this paragraph, a referral may be carried out by providing a voucher or 
certificate to the individual to obtain the training.
    (d) The cost of referral of an individual with an ITA to a training 
provider is paid by the applicable adult or dislocated worker program 
under title I of WIA.



                  Subpart E_Eligible Training Providers



Sec.  663.500  What is the purpose of this subpart?

    The workforce investment system established under WIA emphasizes 
informed customer choice, system performance, and continuous 
improvement. The eligible provider process is part of the strategy for 
achieving these goals. Local Boards, in partnership with the State, 
identify training providers and programs whose performance qualifies 
them to receive WIA funds to train adults and dislocated workers. In 
order to maximize customer choice and assure that all significant 
population groups are served, States and local areas should administer 
the eligible provider process in a manner to assure that significant 
numbers of competent providers, offering a wide variety of training 
programs and occupational choices, are available to customers. After 
receiving core and intensive services and in consultation with case 
managers, eligible participants who need training use the list of these 
eligible providers to make an informed choice. The ability of providers 
to successfully perform, the procedures State and Local Boards use to 
establish eligibility, and the degree to which information, including 
performance information, on those providers is made available to 
customers eligible for training services, are key factors affecting the 
successful implementation of the Statewide workforce investment system. 
This subpart describes the process for determining eligible training 
providers.



Sec.  663.505  What are eligible providers of training services?

    (a) Eligible providers of training services are described in WIA 
section 122. They are those entities eligible to receive WIA title I-B 
funds to provide training services to eligible adult and dislocated 
worker customers.
    (b) In order to provide training services under WIA title I-B, a 
provider must meet the requirements of this subpart and WIA section 122.
    (1) These requirements apply to the use of WIA title I adult and 
dislocated worker funds to provide training:
    (i) To individuals using ITA's to access training through the 
eligible provider list; and
    (ii) To individuals for training provided through the exceptions to 
ITA's described at Sec.  663.430 (a)(2) and (a)(3).
    (2) These requirements apply to all organizations providing training 
to adult and dislocated workers, including:
    (i) Postsecondary educational institutions providing a program 
described in WIA section 122(a)(2)(A)(ii);
    (ii) Entities that carry out programs under the National 
Apprenticeship Act (29 U.S.C. 50 et seq.);
    (iii) Other public or private providers of a program of training 
services described in WIA section 122(a)(2)(C);
    (iv) Local Boards, if they meet the conditions of WIA section 
117(f)(1); and
    (v) Community-based organizations and other private organizations 
providing training under Sec.  663.430.
    (c) Provider eligibility procedures must be established by the 
Governor, as required by this subpart. Different

[[Page 65]]

procedures are described in WIA for determinations of ``initial'' and 
``subsequent'' eligibility. Because the processes are different, they 
are discussed separately.



Sec.  663.508  What is a ``program of training services''?

    A program of training services is one or more courses or classes, or 
a structured regimen, that upon successful completion, leads to:
    (a) A certificate, an associate degree, baccalaureate degree, or
    (b) The skills or competencies needed for a specific job or jobs, an 
occupation, occupational group, or generally, for many types of jobs or 
occupations, as recognized by employers and determined prior to 
training.



Sec.  663.510  Who is responsible for managing the eligible 
provider process?

    (a) The State and the Local Boards each have responsibilities for 
managing the eligible provider process.
    (b) The Governor must establish eligibility criteria for certain 
providers to become initially eligible and must set minimum levels of 
performance for all providers to remain subsequently eligible.
    (c) The Governor must designate a State agency (called the 
``designated State agency'') to assist in carrying out WIA section 122. 
The designated State agency is responsible for:
    (1) Developing and maintaining the State list of eligible providers 
and programs, which is comprised of lists submitted by Local Boards;
    (2) Determining if programs meet performance levels, including 
verifying the accuracy of the information on the State list in 
consultation with the Local Boards, removing programs that do not meet 
program performance levels, and taking appropriate enforcement actions, 
against providers in the case of the intentional provision of inaccurate 
information, as described in WIA section 122(f)(1), and in the case of a 
substantial violation of the requirements of WIA, as described in WIA 
section 122(f)(2);
    (3) Disseminating the State list, accompanied by performance and 
cost information relating to each provider, to One-Stop operators 
throughout the State.
    (d) The Local Board must:
    (1) Accept applications for initial eligibility from certain 
postsecondary institutions and entities providing apprenticeship 
training;
    (2) Carry out procedures prescribed by the Governor to assist in 
determining the initial eligibility of other providers;
    (3) Carry out procedures prescribed by the Governor to assist in 
determining the subsequent eligibility of all providers;
    (4) Compile a local list of eligible providers, collect the 
performance and cost information and any other required information 
relating to providers;
    (5) Submit the local list and information to the designated State 
agency;
    (6) Ensure the dissemination and appropriate use of the State list 
through the local One-Stop system;
    (7) Consult with the designated State agency in cases where 
termination of an eligible provider is contemplated because inaccurate 
information has been provided; and
    (8) Work with the designated State agency in cases where the 
termination of an eligible provider is contemplated because of 
violations of the Act.
    (e) The Local Board may:
    (1) Make recommendations to the Governor on the procedures to be 
used in determining initial eligibility of certain providers;
    (2) Increase the levels of performance required by the State for 
local providers to maintain subsequent eligibility;
    (3) Require additional verifiable program-specific information from 
local providers to maintain subsequent eligibility.



Sec.  663.515  What is the process for initial determination of
provider eligibility?

    (a) To be eligible to receive adult or dislocated worker training 
funds under title I of WIA, all providers must submit applications to 
the Local Boards in the areas in which they wish to provide services. 
The application must describe each program of training services to be 
offered.

[[Page 66]]

    (b) For programs eligible under title IV of the Higher Education Act 
and apprenticeship programs registered under the National Apprenticeship 
Act (NAA), and the providers or such programs, Local Boards determine 
the procedures to use in making an application. The procedures 
established by the Local Board must specify the timing, manner, and 
contents of the required application.
    (c) For programs not eligible under title IV of the HEA or 
registered under the NAA, and for providers not eligible under title IV 
of the HEA or carrying out apprenticeship programs under NAA:
    (1) The Governor must develop a procedure for use by Local Boards 
for determining the eligibility of other providers, after
    (i) Soliciting and taking into consideration recommendations from 
Local Boards and providers of training services within the State;
    (ii) Providing an opportunity for interested members of the public, 
including representatives of business and labor organizations, to submit 
comments on the procedure; and
    (iii) Designating a specific time period for soliciting and 
considering the recommendations of Local Boards and provider, and for 
providing an opportunity for public comment.
    (2) The procedure must be described in the State Plan.
    (3)(i) The procedure must require that the provider must submit an 
application to the Local Board at such time and in such manner as may be 
required, which contains a description of the program of training 
services;
    (ii) If the provider provides a program of training services on the 
date of application, the procedure must require that the application 
include an appropriate portion of the performance information and 
program cost information described in Sec.  663.540, and that the 
program meet appropriate levels of performance;
    (iii) If the provider does not provide a program of training 
services on that date, the procedure must require that the provider meet 
appropriate requirements specified in the procedure. (WIA sec. 
122(b)(2)(D).)
    (d) The Local Board must include providers that meet the 
requirements of paragraphs (b) and (c) of this section on a local list 
and submit the list to the designated State agency. The State agency has 
30 days to determine that the provider or its programs do not meet the 
requirements relating to the providers under paragraph (c) of this 
section. After the agency determines that the provider and its programs 
meet(s) the criteria for initial eligibility, or 30 days have elapsed, 
whichever occurs first, the provider and its programs are initially 
eligible. The programs and providers submitted under paragraph (b) of 
this section are initially eligible without State agency review. (WIA 
sec. 122(e).)



Sec.  663.530  Is there a time limit on the period of initial
eligibility for training providers?

    Yes, under WIA section 122(c)(5), the Governor must require training 
providers to submit performance information and meet performance levels 
annually in order to remain eligible providers. States may require that 
these performance requirements be met one year from the date that 
initial eligibility was determined, or may require all eligible 
providers to submit performance information by the same date each year. 
If the latter approach is adopted, the Governor may exempt eligible 
providers whose determination of initial eligibility occurs within six 
months of the date of submissions. The effect of this requirement is 
that no training provider may have a period of initial eligibility that 
exceeds eighteen months. In the limited circumstance when insufficient 
data is available, initial eligibility may be extended for a period of 
up to six additional months, if the Governor's procedures provide for 
such an extension.



Sec.  663.535  What is the process for determining the subsequent
eligibility of a provider?

    (a) The Governor must develop a procedure for the Local Board to use 
in determining the subsequent eligibility of all eligible training 
providers determined initially eligible under Sec.  663.515 (b) and (c), 
after:

[[Page 67]]

    (1) Soliciting and taking into consideration recommendations from 
Local Boards and providers of training services within the State;
    (2) Providing an opportunity for interested members of the public, 
including representatives of business and labor organizations, to submit 
comments on such procedure; and
    (3) Designating a specific time period for soliciting and 
considering the recommendations of Local Boards and providers, and for 
providing an opportunity for public comment.
    (b) The procedure must be described in the State Plan.
    (c) The procedure must require that:
    (1) Providers annually submit performance and cost information as 
described at WIA section 122(d)(1) and (2), for each program of training 
services for which the provider has been determined to be eligible, in a 
time and manner determined by the Local Board;
    (2) Providers and programs annually meet minimum performance levels 
described at WIA section 122(c)(6), as demonstrated utilizing UI 
quarterly wage records where appropriate.
    (d) The program's performance information must meet the minimum 
acceptable levels established under paragraph (c)(2) of this section to 
remain eligible;
    (e) Local Boards may require higher levels of performance for local 
programs than the levels specified in the procedures established by the 
Governor. (WIA sec.122(c)(5) and (c)(6).)
    (f) The State procedure must require Local Boards to take into 
consideration:
    (1) The specific economic, geographic and demographic factors in the 
local areas in which providers seeking eligibility are located, and
    (2) The characteristics of the populations served by programs 
seeking eligibility, including the demonstrated difficulties in serving 
these populations, where applicable.
    (g) The Local Board retains those programs on the local list that 
meet the required performance levels and other elements of the State 
procedures and submits the list, accompanied by the performance and cost 
information, and any additional required information, to the designated 
State agency. If the designated State agency determines within 30 days 
from the receipt of the information that the program does not meet the 
performance levels established under paragraph (c)(2) of this section, 
the program may be removed from the list. A program retained on the 
local list and not removed by the designated State agency is considered 
an eligible program of training services.



Sec.  663.540  What kind of performance and cost information is
required for determinations of subsequent eligibility?

    (a) Eligible providers of training services must submit, at least 
annually, under procedures established by the Governor under Sec.  
663.535(c):
    (1) Verifiable program-specific performance information, including:
    (i) The information described in WIA section 122(d)(1)(A)(i) for all 
individuals participating in the programs of training services, 
including individuals who are not receiving assistance under WIA section 
134 and individuals who are receiving such assistance; and
    (ii) The information described in WIA section 122(d)(1)(A)(ii) 
relating only to individuals receiving assistance under the WIA adult 
and dislocated worker program who are participating in the applicable 
program of training services; and
    (2) Information on program costs (such as tuition and fees) for WIA 
participants in the program.
    (b) Governors may require any additional verifiable performance 
information (such as the information described at WIA section 122(d)(2)) 
that the Governor determines to be appropriate to obtain subsequent 
eligibility, including information regarding all participating 
individuals as well as individuals receiving assistance under the WIA 
adult and dislocated worker program.
    (c) Governors must establish procedures by which providers can 
demonstrate if the additional information required under paragraph (b) 
of this section imposes extraordinary costs on providers, or if 
providers experience extraordinary costs in the collection of

[[Page 68]]

information. If, through these procedures, providers demonstrate that 
they experience such extraordinary costs:
    (1) The Governor or Local Board must provide access to cost-
effective methods for the collection of the information; or
    (2) The Governor must provide additional resources to assist 
providers in the collection of the information from funds for Statewide 
workforce investment activities reserved under WIA sections 128(a) and 
133(a)(1).
    (d) The Local Board and the designated State agency may accept 
program-specific performance information consistent with the 
requirements for eligibility under title IV of the Higher Education Act 
of 1965 from a provider for purposes of enabling the provider to fulfill 
the applicable requirements of this section, if the information is 
substantially similar to the information otherwise required under this 
section.



Sec.  663.550  How is eligible provider information developed
and maintained?

    (a) The designated State agency must maintain a list of all eligible 
training programs and providers in the State (the ``State list'').
    (b) The State list is a compilation of the eligible programs and 
providers identified or retained by local areas and that have not been 
removed under Sec. Sec.  663.535(g) and 663.565.
    (c) The State list must be accompanied by the performance and cost 
information contained in the local lists as required by Sec.  
663.535(e). (WIA sec. 122(e)(4)(A).)



Sec.  663.555  How is the State list disseminated?

    (a) The designated State agency must disseminate the State list and 
accompanying performance and cost information to the One-Stop delivery 
systems within the State.
    (b) The State list and information must be updated at least 
annually.
    (c) The State list and accompanying information form the primary 
basis of the One-Stop consumer reports system that provides for informed 
customer choice. The list and information must be widely available, 
through the One-Stop delivery system, to customers seeking information 
on training outcomes, as well as participants in employment and training 
activities funded under WIA and other programs.
    (1) The State list must be made available to individuals who have 
been determined eligible for training services under Sec.  663.310.
    (2) The State list must also be made available to customers whose 
training is supported by other One-Stop partners.



Sec.  663.565  May an eligible training provider lose its eligibility?

    (a) Yes. A training provider must deliver results and provide 
accurate information in order to retain its status as an eligible 
training provider.
    (b) If the provider's programs do not meet the established 
performance levels, the programs will be removed from the eligible 
provider list.
    (1) A Local Board must determine, during the subsequent eligibility 
determination process, whether a provider's programs meet performance 
levels. If the program fails to meet such levels, the program must be 
removed from the local list. If all of the provider's programs fail to 
meet such levels, the provider must be removed from the local list.
    (2) The designated State agency upon receipt of the performance 
information accompanying the local list, may remove programs from the 
State list if the agency determines the program failed to meet the 
levels of performance prescribed under Sec.  663.535(c). If all of the 
provider's programs are determined to have failed to meet the levels, 
the designated State agency may remove the provider from the State list.
    (3) Providers determined to have intentionally supplied inaccurate 
information or to have subsequently violated any provision of title I of 
WIA or the WIA regulations, including 29 CFR part 37, may be removed 
from the list in accordance with the enforcement provisions of WIA 
section 122(f). A provider whose eligibility is terminated under these 
conditions is liable to repay all adult and dislocated worker training 
funds it received during the period of noncompliance.

[[Page 69]]

    (4) The Governor must establish appeal procedures for providers of 
training to appeal a denial of eligibility under this subpart according 
to the requirements of 20 CFR 667.640(b).



Sec.  663.570  What is the consumer reports system?

    The consumer reports system, referred to in WIA as performance 
information, is the vehicle for informing the customers of the One-Stop 
delivery system about the performance of training providers and programs 
in the local area. It is built upon the State list of eligible providers 
and programs developed through the procedures described in WIA section 
122 and this subpart. The consumer reports system must contain the 
information necessary for an adult or dislocated worker customer to 
fully understand the options available to him or her in choosing a 
program of training services. Such program-specific factors may include 
overall performance, performance for significant customer groups 
(including wage replacement rates for dislocated workers), performance 
of specific provider sites, current information on employment and wage 
trends and projections, and duration of training programs.



Sec.  663.575  In what ways can a Local Board supplement the
information available from the State list?

    (a) Local Boards may supplement the information available from the 
State list by providing customers with additional information to assist 
in supporting informed customer choice and the achievement of local 
performance measures (as described in WIA section 136).
    (b) This additional information may include:
    (1) Information on programs of training services that are linked to 
occupations in demand in the local area;
    (2) Performance and cost information, including program-specific 
performance and cost information, for the local outlet(s) of multi-site 
eligible providers; and
    (3) Other appropriate information related to the objectives of WIA, 
which may include the information described in Sec.  663.570.



Sec.  663.585  May individuals choose training providers 
located outside of the local area?

    Yes, individuals may choose any of the eligible providers and 
programs on the State list. A State may also establish a reciprocal 
agreement with another State(s) to permit providers of eligible training 
programs in each State to accept individual training accounts provided 
by the other State. (WIA secs. 122(e)(4) and (e)(5).)



Sec.  663.590  May a community-based organization (CBO) be 
included on an eligible provider list?

    Yes, CBO's may apply and they and their programs may be determined 
eligible providers of training services, under WIA section 122 and this 
subpart. As eligible providers, CBO's provide training through ITA's and 
may also receive contracts for training special participant populations 
when the requirements of Sec.  663.430 are met.



Sec.  663.595  What requirements apply to providers of OJT and
customized training?

    For OJT and customized training providers, One-Stop operators in a 
local area must collect such performance information as the Governor may 
require, determine whether the providers meet such performance criteria 
as the Governor may require, and disseminate a list of providers that 
have met such criteria, along with the relevant performance information 
about them, through the One-Stop delivery system. Providers determined 
to meet the criteria are considered to be identified as eligible 
providers of training services. These providers are not subject to the 
other requirements of WIA section 122 or this subpart.



               Subpart F_Priority and Special Populations



Sec.  663.600  What priority must be given to low-income adults
and public assistance recipients served with adult funds under 
title I?

    (a) WIA states, in section 134(d)(4)(E), that in the event that 
funds allocated to a local area for adult employment

[[Page 70]]

and training activities are limited, priority for intensive and training 
services funded with title I adult funds must be given to recipients of 
public assistance and other low-income individuals in the local area.
    (b) Since funding is generally limited, States and local areas must 
establish criteria by which local areas can determine the availability 
of funds and the process by which any priority will be applied under WIA 
section 134(d)(2)(E). Such criteria may include the availability of 
other funds for providing employment and training-related services in 
the local area, the needs of the specific groups within the local area, 
and other appropriate factors.
    (c) States and local areas must give priority for adult intensive 
and training services to recipients of public assistance and other low-
income individuals, unless the local area has determined that funds are 
not limited under the criteria established under paragraph (b) of this 
section.
    (d) The process for determining whether to apply the priority 
established under paragraph (b) of this section does not necessarily 
mean that only the recipients of public assistance and other low income 
individuals may receive WIA adult funded intensive and training services 
when funds are determined to be limited in a local area. The Local Board 
and the Governor may establish a process that gives priority for 
services to the recipients of public assistance and other low income 
individuals and that also serves other individuals meeting eligibility 
requirements.



Sec.  663.610  Does the statutory priority for use of adult funds
also apply to dislocated worker funds?

    No, the statutory priority applies to adult funds for intensive and 
training services only. Funds allocated for dislocated workers are not 
subject to this requirement.



Sec.  663.620  How do the Welfare-to-Work program and the TANF
program relate to the One-Stop delivery system?

    (a) The local Welfare-to-Work (WtW) program operator is a required 
partner in the One-Stop delivery system. 20 CFR part 662 describes the 
roles of such partners in the One-Stop delivery system and applies to 
the Welfare-to-Work program operator. WtW programs serve individuals who 
may also be served by the WIA programs and, through appropriate linkages 
and referrals, these customers will have access to a broader range of 
services through the cooperation of the WtW program in the One-Stop 
system. WtW participants, who are determined to be WIA eligible, and who 
need occupational skills training may be referred through the One-Stop 
system to receive WIA training, when WtW grant and other grant funds are 
not available in accordance with Sec.  663.320(a). WIA participants who 
are also determined WtW eligible, may be referred to the WtW operator 
for job placement and other WtW assistance.
    (b) The local TANF agency is specifically suggested under WIA as an 
additional partner in the One-Stop system. TANF recipients will have 
access to more information about employment opportunities and services 
when the TANF agency participates in the One-Stop delivery system. The 
Governor and Local Board should encourage the TANF agency to become a 
One-Stop partner to improve the quality of services to the WtW and TANF-
eligible populations. In addition, becoming a One-Stop partner will 
ensure that the TANF agency is represented on the Local Board and 
participates in developing workforce investment strategies that help 
cash assistance recipients secure lasting employment.



Sec.  663.630  How does a displaced homemaker qualify for 
services under title I?

    Displaced homemakers may be eligible to receive assistance under 
title I in a variety of ways, including:
    (a) Core services provided by the One-Stop partners through the One-
Stop delivery system;
    (b) Intensive or training services for which an individual qualifies 
as a dislocated worker/displaced homemaker if the requirements of this 
part are met;
    (c) Intensive or training services for which an individual is 
eligible if the requirements of this part are met;
    (d) Statewide employment and training projects conducted with 
reserve

[[Page 71]]

funds for innovative programs for displaced homemakers, as described in 
20 CFR 665.210(f).



Sec.  663.640  May an individual with a disability whose family 
does not meet income eligibility criteria under the Act be eligible
for priority as a low-income adult?

    Yes, even if the family of an individual with a disability does not 
meet the income eligibility criteria, the individual with a disability 
is to be considered a low-income individual if the individual's own 
income:
    (a) Meets the income criteria established in WIA section 101(25)(B); 
or
    (b) Meets the income eligibility criteria for cash payments under 
any Federal, State or local public assistance program. (WIA sec. 
101(25)(F).)



       Subpart G_On-the-Job Training (OJT) and Customized Training



Sec.  663.700  What are the requirements for on-the-job training (OJT)?

    (a) On-the-job training (OJT) is defined at WIA section 101(31). OJT 
is provided under a contract with an employer in the public, private 
non-profit, or private sector. Through the OJT contract, occupational 
training is provided for the WIA participant in exchange for the 
reimbursement of up to 50 percent of the wage rate to compensate for the 
employer's extraordinary costs. (WIA sec. 101(31)(B).)
    (b) The local program must not contract with an employer who has 
previously exhibited a pattern of failing to provide OJT participants 
with continued long-term employment with wages, benefits, and working 
conditions that are equal to those provided to regular employees who 
have worked a similar length of time and are doing the same type of 
work. (WIA sec. 195(4).)
    (c) An OJT contract must be limited to the period of time required 
for a participant to become proficient in the occupation for which the 
training is being provided. In determining the appropriate length of the 
contract, consideration should be given to the skill requirements of the 
occupation, the academic and occupational skill level of the 
participant, prior work experience, and the participant's individual 
employment plan. (WIA sec. 101(31)(C).)



Sec.  663.705  What are the requirements for OJT contracts for
employed workers?

    OJT contracts may be written for eligible employed workers when:
    (a) The employee is not earning a self-sufficient wage as determined 
by Local Board policy;
    (b) The requirements in Sec.  663.700 are met; and
    (c) The OJT relates to the introduction of new technologies, 
introduction to new production or service procedures, upgrading to new 
jobs that require additional skills, workplace literacy, or other 
appropriate purposes identified by the Local Board.



Sec.  663.710  What conditions govern OJT payments to employers?

    (a) On-the-job training payments to employers are deemed to be 
compensation for the extraordinary costs associated with training 
participants and the costs associated with the lower productivity of the 
participants.
    (b) Employers may be reimbursed up to 50 percent of the wage rate of 
an OJT participant for the extraordinary costs of providing the training 
and additional supervision related to the OJT. (WIA sec. 101(31)(B).)
    (c) Employers are not required to document such extraordinary costs.



Sec.  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 a commitment by the employer to employ, 
or in the case of incumbent workers, continue to employ, an individual 
on successful completion of the training; and
    (c) For which the employer pays for not less than 50 percent of the 
cost of the training. (WIA sec. 101(8).)



Sec.  663.720  What are the requirements for customized training
for employed workers?

    Customized training of an eligible employed individual may be 
provided for an employer or a group of employers when:

[[Page 72]]

    (a) The employee is not earning a self-sufficient wage as determined 
by Local Board policy;
    (b) The requirements in Sec.  663.715 are met; and
    (c) The customized training relates to the purposes described in 
Sec.  663.705(c) or other appropriate purposes identified by the Local 
Board.



Sec.  663.730  May funds provided to employers for OJT of 
customized training be used to assist, promote, or deter union
organizing?

    No, funds provided to employers for OJT or customized training must 
not be used to directly or indirectly assist, promote or deter union 
organizing.



                      Subpart H_Supportive Services



Sec.  663.800  What are supportive services for adults and 
dislocated workers?

    Supportive services for adults and dislocated workers are defined at 
WIA sections 101(46) and 134(e)(2) and (3). They include services such 
as transportation, child care, dependent care, housing, and needs-
related payments, that are necessary to enable an individual to 
participate in activities authorized under WIA title I. Local Boards, in 
consultation with the One-Stop partners and other community service 
providers, must develop a policy on supportive services that ensures 
resource and service coordination in the local area. Such policy should 
address procedures for referral to such services, including how such 
services will be funded when they are not otherwise available from other 
sources. The provision of accurate information about the availability of 
supportive services in the local area, as well as referral to such 
activities, is one of the core services that must be available to adults 
and dislocated workers through the One-Stop delivery system. (WIA sec. 
134(d)(2)(H).)



Sec.  663.805  When may supportive services be provided to participants?

    (a) Supportive services may only be provided to individuals who are:
    (1) Participating in core, intensive or training services; and
    (2) Unable to obtain supportive services through other programs 
providing such services. (WIA sec. 134(e)(2)(A) and (B).)
    (b) Supportive services may only be provided when they are necessary 
to enable individuals to participate in title I activities. (WIA sec. 
101(46).)



Sec.  663.810  Are there limits on the amounts or duration of
funds for supportive services?

    (a) Local Boards may establish limits on the provision of supportive 
services or provide the One-Stop operator with the authority to 
establish such limits, including a maximum amount of funding and maximum 
length of time for supportive services to be available to participants.
    (b) Procedures may also be established to allow One-Stop operators 
to grant exceptions to the limits established under paragraph (a) of 
this section.



Sec.  663.815  What are needs-related payments?

    Needs-related payments provide financial assistance to participants 
for the purpose of enabling individuals to participate in training and 
are one of the supportive services authorized by WIA section 134(e)(3).



Sec.  663.820  What are the eligibility requirements for adults to
receive needs-related payments?

    Adults must:
    (a) Be unemployed,
    (b) Not qualify for, or have ceased qualifying for, unemployment 
compensation; and
    (c) Be enrolled in a program of training services under WIA section 
134(d)(4).



Sec.  663.825  What are the eligibility requirements for dislocated 
workers to receive needs-related payments?

    To receive needs related payments, a dislocated worker must:
    (a) Be unemployed, and:
    (1) Have ceased to qualify for unemployment compensation or trade 
readjustment allowance under TAA or NAFTA-TAA; and
    (2) Be enrolled in a program of training services under WIA section 
134(d)(4) by the end of the 13th week after the most recent layoff that 
resulted in a

[[Page 73]]

determination of the worker's eligibility as a dislocated worker, or, if 
later, by the end of the 8th week after the worker is informed that a 
short-term layoff will exceed 6 months; or
    (b) Be unemployed and did not qualify for unemployment compensation 
or trade readjustment assistance under TAA or NAFTA-TAA.



Sec.  663.830  May needs-related payments be paid while a
participant is waiting to start training classes?

    Yes, payments may be provided if the participant has been accepted 
in a training program that will begin within 30 calendar days. The 
Governor may authorize local areas to extend the 30 day period to 
address appropriate circumstances.



Sec.  663.840  How is the level of needs-related payments determined?

    (a) The payment level for adults must be established by the Local 
Board.
    (b) For dislocated workers, payments must not exceed the greater of 
either of the following levels:
    (1) For participants who were eligible for unemployment compensation 
as a result of the qualifying dislocation, the payment may not exceed 
the applicable weekly level of the unemployment compensation benefit; or
    (2) For participants who did not qualify for unemployment 
compensation as a result of the qualifying layoff, the weekly payment 
may not exceed the poverty level for an equivalent period. The weekly 
payment level must be adjusted to reflect changes in total family income 
as determined by Local Board policies. (WIA sec. 134(e)(3)(C).)



PART 664_YOUTH ACTIVITIES UNDER TITLE I OF THE WORKFORCE INVESTMENT
ACT--Table of Contents



                        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 
          Sec.  664.200(c)(1) defined and documented?
664.210 How is the ``requires additional assistance to complete an 
          educational program, or to secure and hold employment'' 
          criterion in Sec.  664.200(c)(6) defined and documented?
664.215 Must youth participants be registered to participate in the 
          youth program?
664.220 Is there an exception to permit youth who are not low-income 
          individuals to receive youth services?
664.230 Are the eligibility barriers for eligible youth the same as the 
          eligibility barriers for the five percent of youth 
          participants who do not have to meet income eligibility 
          requirements?
664.240 May a local program use eligibility for free lunches under the 
          National School Lunch Program as a substitute for the income 
          eligibility criteria under title I of WIA?
664.250 May a disabled youth whose family does not meet income 
          eligibility criteria under the Act be eligible for youth 
          services?

                      Subpart C_Out-of-School Youth

664.300 Who is an ``out-of-school youth''?
664.310 When is dropout status determined, particularly for youth 
          attending alternative schools?
664.320 Does the requirement that at least 30 percent of youth funds be 
          used to provide activities to out-of-school youth apply to all 
          youth funds?

        Subpart D_Youth Program Design, Elements, and Parameters

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 in WIA section 129(c)(2) as options available to youth 
          participants?
664.420 What are leadership development opportunities?
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 both youth and adult/dislocated worker 
          programs concurrently?

[[Page 74]]

664.510 Are Individual Training Accounts allowed for youth participants?

                Subpart F_Summer Employment Opportunities

664.600 Are Local Boards required to offer summer employment 
          opportunities in the local youth program?
664.610 How is the summer employment opportunities element administered?
664.620 Do the core indicators described in 20 CFR 666.100(a)(3) apply 
          to participation in summer employment activities?

                  Subpart G_One-Stop Services to Youth

664.700 What is the connection between the youth program and the One-
          Stop service delivery system?
664.710 Do Local Boards have the flexibility to offer services to area 
          youth who are not eligible under the youth program through the 
          One-Stop centers?

                   Subpart H_Youth Opportunity Grants

664.800 How are the recipients of Youth Opportunity Grants selected?
664.810 How does a Local Board or other entity become eligible to 
          receive a Youth Opportunity Grant?
664.820 Who is eligible to receive services under Youth Opportunity 
          Grants?
664.830 How are performance measures for Youth Opportunity Grants 
          determined?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49411, Aug. 11, 2000, unless otherwise noted.



                        Subpart A_Youth Councils



Sec.  664.100  What is the youth council?

    (a) The duties and membership requirements of the youth council are 
described in WIA section 117(h) and 20 CFR 661.335 and 661.340.
    (b) The purpose of the youth council is to provide expertise in 
youth policy and to assist the Local Board in:
    (1) Developing and recommending local youth employment and training 
policy and practice;
    (2) Broadening the youth employment and training focus in the 
community to incorporate a youth development perspective;
    (3) Establishing linkages with other organizations serving youth in 
the local area; and
    (4) Taking into account a range of issues that can have an impact on 
the success of youth in the labor market. (WIA sec. 117(h).)



Sec.  664.110  Who is responsible for oversight of youth
programs in the local area?

    (a) The Local Board, working with the youth council, is responsible 
for conducting oversight of local youth programs operated under the Act, 
to ensure both fiscal and programmatic accountability.
    (b) Local program oversight is conducted in consultation with the 
local area's chief elected official.
    (c) The Local Board may, after consultation with the CEO, delegate 
its responsibility for oversight of eligible youth providers, as well as 
other youth program oversight responsibilities, to the youth council, 
recognizing the advantage of delegating such responsibilities to the 
youth council whose members have expertise in youth issues. (WIA sec. 
117(d); 117(h)(4).)



                Subpart B_Eligibility for Youth Services



Sec.  664.200  Who is eligible for youth services?

    An eligible youth is defined, under WIA 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 an educational program, or to 
secure and hold employment. (WIA sec. 101(13).)



Sec.  664.205  How is the ``deficient in basic literacy skills''
criterion in Sec.  664.200(c)(1) defined and documented?

    (a) Definitions and eligibility documentation requirements regarding 
the ``deficient in basic literacy skills'' criterion in Sec.  
664.200(c)(1) may be established at the State or local level. These

[[Page 75]]

definitions may establish such criteria as are needed to address State 
or local concerns, and must include a determination that an individual:
    (1) Computes or solves problems, reads, writes, or speaks English at 
or below the 8th grade level on a generally accepted standardized test 
or a comparable score on a criterion-referenced test; or
    (2) Is unable to compute or solve problems, read, write, or speak 
English at a level necessary to function on the job, in the individual's 
family or in society. (WIA secs. 101(19), 203(12).)
    (b) In cases where the State Board establishes State policy on this 
criterion, the policy must be included in the State plan. (WIA secs. 
101(13)(C)(i), 101(19).)



Sec.  664.210  How is the ``requires additional assistance to
complete an educational program, or to secure and hold employment''
criterion in Sec 664.200(c)(6) defined and documented?

    Definitions and eligibility documentation requirements regarding the 
``requires additional assistance to complete an educational program, or 
to secure and hold employment'' criterion of Sec.  664.200(c)(6) may be 
established at the State or local level. In cases where the State Board 
establishes State policy on this criterion, the policy must be included 
in the State Plan. (WIA sec. 101(13)(C)(iv).)



Sec.  664.215  Must youth participants be registered to participate
in the youth program?

    (a) Yes, all youth participants must be registered.
    (b) Registration is the process of collecting information to support 
a determination of eligibility.
    (c) Equal opportunity data must be collected during the registration 
process on any individual who has submitted personal information in 
response to a request by the recipient for such information.



Sec.  664.220  Is there an exception to permit youth who are not
low-income individuals to receive youth services?

    Yes, up to five percent of youth participants served by youth 
programs in a local area may be individuals who do not meet the income 
criterion for eligible youth, provided that they are within one or more 
of the following categories:
    (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 the individual'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 Local 
Board. (WIA sec. 129(c)(5).)



Sec.  664.230  Are the eligibility barriers for eligible youth
the same as the eligibility barriers for the five percent of
youth participants who do not have to meet income eligibility
requirements?

    No, the barriers listed in Sec. Sec.  664.200 and 664.220 are not 
the same. Both lists of eligibility barriers include school dropout, 
homeless or runaway, pregnant or parenting, and offender, but each list 
contains barriers not included on the other list.



Sec.  664.240  May a local program use eligibility for free
lunches under the National School Lunch Program as a substitute
for the income eligibility criteria under title I of WIA?

    No, the criteria for income eligibility under the National School 
Lunch Program are not the same as the Act's income eligibility criteria. 
Therefore, the school lunch list may not be used as a substitute for 
income eligibility to determine who is eligible for services under the 
Act.



Sec.  664.250  May a disabled youth whose family does not meet
income eligibility criteria under the Act be eligible for youth
services?

    Yes, even if the family of a disabled youth does not meet the income 
eligibility criteria, the disabled youth may be considered a low-income 
individual if the youth's own income:
    (a) Meets the income criteria established in WIA section 101(25)(B); 
or

[[Page 76]]

    (b) Meets the income eligibility criteria for cash payments under 
any Federal, State or local public assistance program. (WIA sec. 
101(25)(F).)



                      Subpart C_Out-of-School Youth



Sec.  664.300  Who is an ``out-of-school youth''?

    An out-of-school youth is an individual who:
    (a) Is an eligible youth who is a school dropout; or
    (b) Is an eligible youth who has either graduated from high school 
or holds a GED, but is basic skills deficient, unemployed, or 
underemployed. (WIA sec. 101(33).)



Sec.  664.310  When is dropout status determined, particularly
for youth attending alternative schools?

    A school dropout is defined as an individual who is no longer 
attending any school and who has not received a secondary school diploma 
or its recognized equivalent. A youth's dropout status is determined at 
the time of registration. A youth attending an alternative school at the 
time of registration is not a dropout. An individual who is out-of 
school at the time of registration and subsequently placed in an 
alternative school, may be considered an out-of-school youth for the 
purposes of the 30 percent expenditure requirement for out-of-school 
youth. (WIA sec. 101(39).)



Sec.  664.320  Does the requirement that at least 30 percent
of youth funds be used to provide activities to out-of-school
youth apply to all youth funds?

    (a) Yes, the 30 percent requirement applies to the total amount of 
all funds allocated to a local area under WIA section 128(b)(2)(A) or 
(b)(3), except for local area expenditures for administrative purposes 
under 20 CFR 667.210(a)(2).
    (b) Although it is not necessary to ensure that 30 percent of such 
funds spent on summer employment opportunities (or any other particular 
element of the youth program) are spent on out-of-school youth, the 
funds spent on these activities are included in the total to which the 
30 percent requirement applies.
    (c) There is a limited exception, at WIA section 129(c)(4)(B), under 
which certain small States may apply to the Secretary to reduce the 
minimum amount that must be spent on out-of-school youth. (WIA sec. 
129(c)(4).)



        Subpart D_Youth Program Design, Elements, and Parameters



Sec.  664.400  What is a local youth program?

    A local youth program is defined as those youth activities offered 
by a Local Workforce Investment Board for a designated local workforce 
investment area, as specified in 20 CFR part 661.



Sec.  664.405  How must local youth programs be designed?

    (a) The design framework of local youth programs must:
    (1) Provide an objective assessment of each youth participant, that 
meets the requirements of WIA section 129(c)(1)(A), and includes a 
review of the academic and occupational skill levels, as well as the 
service needs, of each youth;
    (2) Develop an individual service strategy for each youth 
participant that meets the requirements of WIA section 129(c)(1)(B), 
including identifying an age-appropriate career goal and consideration 
of the assessment results for each youth; and
    (3) Provide preparation for postsecondary educational opportunities, 
provide linkages between academic and occupational learning, provide 
preparation for employment, and provide effective connections to 
intermediary organizations that provide strong links to the job market 
and employers.
    (4) The requirement in WIA section 123 that eligible providers of 
youth services be selected by awarding a grant or contract on a 
competitive basis does not apply to the design framework component, such 
as services for intake, objective assessment and the development of 
individual service strategy, when these services are provided by the 
grant recipient/fiscal agent.

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    (b) The local plan must describe the design framework for youth 
program design in the local area, and how the ten program elements 
required in Sec.  664.410 are provided within that framework.
    (c) Local Boards must ensure appropriate links to entities that will 
foster the participation of eligible local area youth. Such links may 
include connections to:
    (1) Local area justice and law enforcement 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 serve homeless youth and other public and private youth 
initiatives.
    (d) Local Boards must ensure that the referral requirements in WIA 
section 129(c)(3) for youth who meet the income eligibility criteria are 
met, including:
    (1) Providing these youth with information regarding the full array 
of applicable or appropriate services available through the Local Board 
or other eligible providers, or One-Stop partners; and
    (2) Referring these youth to appropriate training and educational 
programs that have the capacity to serve them either on a sequential or 
concurrent basis.
    (e) In order to meet the basic skills and training needs of eligible 
applicants who do not meet the enrollment requirements of a particular 
program or who cannot be served by the program, each eligible youth 
provider must ensure that these youth are referred:
    (1) For further assessment, as necessary, and
    (2) To appropriate programs, in accordance with paragraph (d)(2) of 
this section.
    (f) Local Boards must ensure that parents, youth participants, and 
other members of the community with experience relating to youth 
programs are involved in both the design and implementation of its youth 
programs.
    (g) The objective assessment required under paragraph (a)(1) of this 
section or the individual service strategy required under paragraph 
(a)(2) of this section is not required if the program provider 
determines that it is appropriate to use a recent objective assessment 
or individual service strategy that was developed under another 
education or training program. (WIA section 129(c)(1).)



Sec.  664.410  Must local programs include each of the ten
program elements listed in WIA section 129(c)(2) as options
available to youth participants?

    (a) Yes, local programs must make the following services available 
to youth participants:
    (1) Tutoring, study skills training, and instruction leading to 
secondary school completion, including dropout prevention strategies;
    (2) Alternative secondary school offerings;
    (3) Summer employment opportunities directly linked to academic and 
occupational learning;
    (4) Paid and unpaid work experiences, including internships and job 
shadowing, as provided in Sec. Sec.  664.460 and 664.470;
    (5) Occupational skill training;
    (6) Leadership development opportunities, which include community 
service and peer-centered activities encouraging responsibility and 
other positive social behaviors;
    (7) Supportive services, which may include the services listed in 
Sec.  664.440;
    (8) Adult mentoring for a duration of at least twelve (12) months, 
that may occur both during and after program participation;
    (9) Followup services, as provided in Sec.  664.450; and
    (10) Comprehensive guidance and counseling, including drug and 
alcohol abuse counseling, as well as referrals to counseling, as 
appropriate to the needs of the individual youth.
    (b) Local programs have the discretion to determine what specific 
program services will be provided to a youth participant, based on each 
participant's objective assessment and individual service strategy. (WIA 
sec. 129(c)(2).)



Sec.  664.420  What are leadership development opportunities?

    Leadership development opportunities are opportunities that 
encourage

[[Page 78]]

responsibility, employability, and other positive social behaviors such 
as:
    (a) Exposure to postsecondary educational opportunities;
    (b) Community and service learning projects;
    (c) Peer-centered activities, including peer mentoring and tutoring;
    (d) Organizational and team work training, including team leadership 
training;
    (e) Training in decision-making, including determining priorities; 
and
    (f) Citizenship training, including life skills training such as 
parenting, work behavior training, and budgeting of resources. (WIA sec. 
129(c)(2)(F).)



Sec.  664.430  What are positive social behaviors?

    Positive social behaviors are outcomes of leadership opportunities, 
often referred to as soft skills, which are incorporated by many local 
programs as part of their menu of services. Positive social behaviors 
focus on areas that may include the following:
    (a) Positive attitudinal development;
    (b) Self esteem building;
    (c) Openness to working with individuals from diverse racial and 
ethnic backgrounds;
    (d) Maintaining healthy lifestyles, including being alcohol and drug 
free;
    (e) Maintaining positive relationships with responsible adults and 
peers, and contributing to the well being of one's community, including 
voting;
    (f) Maintaining a commitment to learning 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).)



Sec.  664.440  What are supportive services for youth?

    Supportive services for youth, as defined in WIA section 101(46), 
may include 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 as eye glasses and protective 
eye gear. (WIA sec. 129(c)(2)(G).)



Sec.  664.450  What are follow-up services for youth?

    (a) Follow-up services for youth may include:
    (1) The leadership development and supportive service activities 
listed in Sec. Sec.  664.420 and 664.440;
    (2) Regular contact with a youth participant's employer, including 
assistance in addressing work-related problems that arise;
    (3) Assistance in securing better paying jobs, career development 
and further 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 
services for a minimum duration of 12 months. Follow-up services may be 
provided beyond twelve (12) months at the State or Local Board's 
discretion. The types of services provided and the duration of services 
must be determined based on the needs of the individual. The scope of 
these follow-up services may be less intensive for youth who have only 
participated in summer youth employment opportunities. (WIA sec. 
129(c)(2)(I).)



Sec.  664.460  What are work experiences for youth?

    (a) Work experiences are planned, structured learning experiences 
that take place in a workplace for a limited period of time. As provided 
in WIA section 129(c)(2)(D) and Sec.  664.470, work experiences may be 
paid or unpaid.
    (b) Work experience workplaces may be in the private, for-profit 
sector; the non-profit sector; or the public sector.
    (c) Work experiences are designed to enable youth to gain exposure 
to the working world and its requirements. Work experiences are 
appropriate and desirable activities for many youth throughout the year. 
Work experiences should help youth acquire the personal attributes, 
knowledge, and skills needed to obtain a job and advance in employment. 
The purpose is to provide

[[Page 79]]

the youth participant with the opportunities for career exploration and 
skill development and is not to benefit the employer, although the 
employer may, in fact, benefit from the activities performed by the 
youth. Work experiences may be subsidized or unsubsidized and may 
include the following elements:
    (1) Instruction in employability skills or generic workplace skills 
such as those identified by the Secretary's Commission on Achieving 
Necessary Skills (SCANS);
    (2) Exposure to various aspects of an industry;
    (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 
experiences activity for youth participants under age 18. Local program 
operators may choose, however, to use this service strategy for eligible 
youth when it is appropriate based on the needs identified by the 
objective assessment of an individual youth participant. (WIA sec. 
129(c)(2)(D).)



Sec.  664.470  Are paid work experiences allowable activities?

    Funds under the Act may be used to pay wages and related benefits 
for work experiences in the public; private, for-profit or non-profit 
sectors where the objective assessment and individual service strategy 
indicate that work experiences are appropriate. (WIA sec. 129(c)(2)(D).)



                     Subpart E_Concurrent Enrollment



Sec.  664.500  May youth participate in both youth and 
adult/dislocated worker programs concurrently?

    (a) Yes, under the Act, eligible youth are 14 through 21 years of 
age. Adults are defined in the Act as individuals age 18 and older. 
Thus, individuals ages 18 through 21 may be eligible for both adult and 
youth programs. There is no specified age for the dislocated worker 
program.
    (b) Individuals who meet the respective eligibility requirements may 
participate in adult and youth programs concurrently. Concurrent 
enrollment is allowable for youth served in programs under WIA titles I 
or II. Such individuals must be eligible under the youth or adult/
dislocated worker eligibility criteria applicable to the services 
received. Local program operators may determine, for individuals in this 
age group, the appropriate level and balance of services under the 
youth, adult, dislocated worker, or other services.
    (c) Local program operators must identify and track the funding 
streams which pay the costs of services provided to individuals who are 
participating in youth and adult/dislocated worker programs 
concurrently, and ensure that services are not duplicated.



Sec.  664.510  Are Individual Training Accounts allowed for
youth participants?

    No, however, individuals age 18 and above, who are eligible for 
training services under the adult and dislocated worker programs, may 
receive Individual Training Accounts through those programs. 
Requirements for concurrent participation requirements are set forth in 
Sec.  664.500. To the extent possible, in order to enhance youth 
participant choice, youth participants should be involved in the 
selection of educational and training activities.



                Subpart F_Summer Employment Opportunities



Sec.  664.600  Are Local Boards required to offer summer 
employment opportunities in the local youth program?

    (a) Yes, Local Boards are required to offer summer youth employment 
opportunities that link academic and occupational learning as part of 
the menu of services required in Sec.  664.410(a).
    (b) Summer youth employment must provide direct linkages to academic 
and occupational learning, and may provide other elements and strategies

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as appropriate to serve the needs and goals of the participants.
    (c) Local Boards may determine how much of available youth funds 
will be used for summer and for year-round youth activities.
    (d) The summer youth employment opportunities element is not 
intended to be a stand-alone program. Local programs should integrate a 
youth's participation in that element into a comprehensive strategy for 
addressing the youth's employment and training needs. Youths who 
participate in summer employment opportunities must be provided with a 
minimum of twelve months of followup services, as required in Sec.  
664.450. (WIA sec. 129(c)(2)(C).)



Sec.  664.610  How is the summer employment opportunities 
element administered?

    Chief elected officials and Local Boards are responsible for 
ensuring that the local youth program provides summer employment 
opportunities to youth. The chief elected officials (which may include 
local government units operating as a consortium) are the grant 
recipients for local youth funds, unless another entity is chosen to be 
grant recipient or fiscal agent under WIA section 117(d)(3)(B). If, in 
the administration of the summer employment opportunities element of the 
local youth program, providers other than the grant recipient/fiscal 
agent, are used to provide summer youth employment opportunities, these 
providers must be selected by awarding a grant or contract on a 
competitive basis, based on the recommendation of the youth council and 
on criteria contained in the State Plan. However, the selection of 
employers who are providing unsubsidized employment opportunities may be 
excluded from the competitive process. (WIA sec. 129(c)(2)(C).)



Sec.  664.620  Do the core indicators described in 20 CFR 666.100(a)(3)
apply to participation in summer employment activities?

    Yes, the summer employment opportunities element is one of a number 
of activities authorized by the WIA youth program. WIA section 136(b)(2) 
(A)(ii) and(B) provides specific core indicators of performance for 
youth, and requires that all participating youth be included in the 
determination of whether the local levels of performance are met. 
Program operators can help ensure positive outcomes for youth 
participants by providing them with continuity of services.



                  Subpart G_One-Stop Services to Youth



Sec.  664.700  What is the connection between the youth program
and the One-Stop service delivery system?

    (a) The chief elected official (or designee, under WIA section 
117(d)(3)(B)), as the local grant recipient for the youth program is a 
required One-Stop partner and is subject to the requirements that apply 
to such partners, described in 20 CFR part 662.
    (b) In addition to the provisions of 20 CFR part 662, connections 
between the youth program and the One-Stop system may include those that 
facilitate:
    (1) The coordination and provision of youth activities;
    (2) Linkages to the job market and employers;
    (3) Access for eligible youth to the information and services 
required in Sec. Sec.  664.400 and 664.410; and
    (4) Other activities designed to achieve the purposes of the youth 
program and youth activities as described in WIA section 129(a). (WIA 
secs. 121(b)(1)(B)(i); 129.)



Sec.  664.710  Do Local Boards have the flexibility to offer
services to area youth who are not eligible under the youth program
through the One-Stop centers?

    Yes, however, One-Stop services for non-eligible youth must be 
funded by programs that are authorized to provide services to such 
youth. For example, basic labor exchange services under the Wagner-
Peyser Act may be provided to any youth.

[[Page 81]]



                   Subpart H_Youth Opportunity Grants



Sec.  664.800  How are the recipients of Youth Opportunity Grants
selected?

    (a) Youth Opportunity Grants are awarded through a competitive 
selection process. The Secretary establishes appropriate application 
procedures, selection criteria, and an approval process for awarding 
Youth Opportunity Grants to applicants which can accomplish the purpose 
of the Act and use available funds in an effective manner in the 
Solicitation for Grant Applications announcing the competition.
    (b) The Secretary distributes grants equitably among urban and rural 
areas by taking into consideration such factors as the following:
    (1) The poverty rate in urban and rural communities;
    (2) The number of people in poverty in urban and rural communities; 
and
    (3) The quality of proposals received. (WIA sec.169(a) and (e).)



Sec.  664.810  How does a Local Board or other entity become
eligible to receive a Youth Opportunity Grant?

    (a) A Local Board is eligible to receive a Youth Opportunity Grant 
if it serves a community that:
    (1) Has been designated as an empowerment zone (EZ) or enterprise 
community (EC) under section 1391 of the Internal Revenue Code of 1986;
    (2) Is located in a State that does not have an EZ or an EC and that 
has been designated by its Governor as a high poverty area; or
    (3) Is one of two areas in a State that has been designated by the 
Governor as an area for which a local board may apply for a Youth 
Opportunity Grant, and that meets the poverty rate criteria in section 
1392 (a)(4), (b), and (d) of the Internal Revenue Code of 1986.
    (b) An entity other than a Local Board is eligible to receive a 
grant if that entity:
    (1) Is a WIA Indian and Native American grant recipient under WIA 
section 166; and
    (2) Serves a community that:
    (i) Meets the poverty rate criteria in section 1392(a)(4), (b), and 
(d) of the Internal Revenue Code of 1986; and
    (ii) Is located on an Indian reservation or serves Oklahoma Indians 
or Alaska Native villages or Native groups, as provided in WIA section 
169 (d)(2)(B). (WIA sec. 169(c) and (d).)



Sec.  664.820  Who is eligible to receive services under Youth
Opportunity Grants?

    All individuals ages 14 through 21 who reside in the community 
identified in the grant are eligible to receive services under the 
grant. (WIA sec. 169(a).)



Sec.  664.830  How are performance measures for Youth Opportunity
Grants determined?

    (a) The Secretary negotiates performance measures, including 
appropriate performance levels for each indicator, with each selected 
grantee, based on information contained in the application.
    (b) Performance indicators for the measures negotiated under Youth 
Opportunity Grants are the indicators of performance provided in WIA 
sections 136(b)(2)(A) and (B). (WIA sec. 169(f).).



PART 665_STATEWIDE WORKFORCE INVESTMENT ACTIVITIES UNDER T
ITLE I OF THE WORKFORCE INVESTMENT ACT--Table of Contents



                      Subpart A_General Description

Sec.
665.100 What are the Statewide workforce investment activities under 
          title I of WIA?
665.110 How are Statewide workforce investment activities funded?

    Subpart B_Required and Allowable Statewide Workforce Investment 
                               Activities

665.200 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 
          workforce investment activities?

                   Subpart C_Rapid Response Activities

665.300 What are rapid response activities and who is responsible for 
          providing them?
665.310 What rapid response activities are required?

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665.320 May other activities be undertaken as part of rapid response?
665.330 Are the NAFTA-TAA program requirements for rapid response also 
          required activities?
665.340 What is meant by ``provision of additional assistance'' in WIA 
          section 134(a)(2)(A)(ii)?

    Authority: Section 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49415, Aug. 11, 2000, unless otherwise noted.



                      Subpart A_General Description



Sec.  665.100  What are the Statewide workforce investment
activities under title I of WIA?

    Statewide workforce investment activities include Statewide 
employment and training activities for adults and dislocated workers, as 
described in WIA section 134(a), and Statewide youth activities, as 
described in WIA section 129(b). They include both required and 
allowable activities. In accordance with the requirements of this 
subpart, the State may develop policies and strategies for use of 
Statewide workforce investment funds. Descriptions of these policies and 
strategies must be included in the State Plan. (WIA secs. 129(b), 
134(a).)



Sec.  665.110  How are Statewide workforce investment activities funded?

    (a) Except for the Statewide rapid response activities described in 
paragraph (c) of this section, Statewide workforce investment activities 
are supported by funds reserved by the Governor under WIA section 
128(a).
    (b) Funds reserved by the Governor for Statewide workforce 
investment activities may be combined and used for any of the activities 
authorized in WIA sections 129(b), 134(a)(2)(B) or 134(a)(3)(A) (which 
are described in Sec. Sec.  665.200 and 665.210), regardless of whether 
the funds were allotted through the youth, adult, or dislocated worker 
funding streams.
    (c) Funds for Statewide rapid response activities are reserved under 
WIA section 133(a)(2) and may be used to provide the activities 
authorized at section 134(a)(2)(A) (which are described in Sec. Sec.  
665.310 through 665.330). (WIA secs. 129(b), 133(a)(2), 134(a)(2)(B), 
and 134(a)(3)(A).)



    Subpart B_Required and Allowable Statewide Workforce Investment 
                               Activities



Sec.  665.200  What are required Statewide workforce 
investment activities?

    Required Statewide workforce investment activities are:
    (a) Required rapid response activities, as described in Sec.  
665.310;
    (b) Disseminating:
    (1) The State list of eligible providers of training services 
(including those providing non-traditional training services), for 
adults and dislocated workers;
    (2) Information identifying eligible providers of on-the-job 
training (OJT) and customized training;
    (3) Performance and program cost information about these providers, 
as described in 20 CFR 663.540; and
    (4) A list of eligible providers of youth activities as described in 
WIA section 123;
    (c) States must assure that the information listed in paragraphs 
(b)(1) through (4) of this section is widely available.
    (d) Conducting evaluations, under WIA section 136(e), of workforce 
investment activities for adults, dislocated workers and youth, in order 
to establish and promote methods for continuously improving such 
activities to achieve high-level performance within, and high-level 
outcomes from, the Statewide workforce investment system. Such 
evaluations must be designed and conducted in conjunction with the State 
and Local Boards, and must include analysis of customer feedback, 
outcome and process measures in the workforce investment system. To the 
maximum extent practicable, these evaluations should be conducted in 
coordination with Federal evaluations carried out under WIA section 172.
    (e) Providing incentive grants:
    (1) To local areas for regional cooperation among Local Boards 
(including Local Boards for a designated region, as described in 20 CFR 
661.290);
    (2) For local coordination of activities carried out under WIA; and
    (3) For exemplary performance by local areas on the performance 
measures.

[[Page 83]]

    (f) Providing technical assistance to local areas that fail to meet 
local performance measures.
    (g) Assisting in the establishment and operation of One-Stop 
delivery systems, in accordance with the strategy described in the State 
workforce investment plan. (WIA sec. 112(b)(14).)
    (h) Providing additional assistance to local areas that have high 
concentrations of eligible youth.
    (i) Operating a fiscal and management accountability information 
system, based on guidelines established by the Secretary after 
consultation with the Governors, chief elected officials, and One-Stop 
partners, as required by WIA section 136(f). (WIA secs. 129(b)(2), 
134(a)(2), and 136(e)(2).)



Sec.  665.210  What are allowable Statewide workforce investment
activities?

    Allowable Statewide workforce investment activities include:
    (a) State administration of the adult, dislocated worker and youth 
workforce investment activities, consistent with the five percent 
administrative cost limitation at 20 CFR 667.210(a)(1).
    (b) Providing capacity building and technical assistance to local 
areas, including Local Boards, One-Stop operators, One-Stop partners, 
and eligible providers, which may include:
    (1) Staff development and training; and
    (2) The development of exemplary program activities.
    (c) Conducting research and demonstrations.
    (d) Establishing and implementing:
    (1) Innovative incumbent worker training programs, which may include 
an employer loan program to assist in skills upgrading; and
    (2) Programs targeted to Empowerment Zones and Enterprise 
Communities.
    (e) Providing support to local areas for the identification of 
eligible training providers.
    (f) Implementing innovative programs for displaced homemakers, and 
programs to increase the number of individuals trained for and placed in 
non-traditional employment.
    (g) Carrying out such adult and dislocated worker employment and 
training activities as the State determines are necessary to assist 
local areas in carrying out local employment and training activities.
    (h) Carrying out youth activities Statewide.
    (i) Preparation and submission to the Secretary of the annual 
performance progress report as described in 20 CFR 667.300(e). (WIA 
secs. 129(b)(3) and 134(a)(3).)



Sec.  665.220  Who is an ``incumbent worker'' for purposes of
Statewide workforce investment activities?

    States may establish policies and definitions to determine which 
workers, or groups of workers, are eligible for incumbent worker 
services under this subpart. An incumbent worker is an individual who is 
employed, but an incumbent worker does not necessarily have to meet the 
eligibility requirements for intensive and training services for 
employed adults and dislocated workers at 20 CFR 663.220(b) and 663.310. 
(WIA sec. 134(a)(3)(A)(iv)(I).)



                   Subpart C_Rapid Response Activities



Sec.  665.300  What are rapid response activities and who is
responsible for providing them?

    (a) Rapid response activities are described in Sec. Sec.  665.310 
through 665.330. They encompass the activities necessary to plan and 
deliver services to enable dislocated workers to transition to new 
employment as quickly as possible, following either a permanent closure 
or mass layoff, or a natural or other disaster resulting in a mass job 
dislocation.
    (b) The State is responsible for providing rapid response 
activities. Rapid response is a required activity carried out in local 
areas by the State, or an entity designated by the State, in conjunction 
with the Local Board and chief elected officials. The State must 
establish methods by which to provide additional assistance to local 
areas that experience disasters, mass layoffs, plant closings, or other 
dislocation events when such events substantially increase the number of 
unemployed individuals.
    (c) States must establish a rapid response dislocated worker unit to 
carry

[[Page 84]]

out Statewide rapid response activities. (WIA secs. 101(38), 
112(b)(17)(A)(ii) and 134(a)(2)(A).)



Sec.  665.310  What rapid response activities are required?

    Rapid response activities must include:
    (a) Immediate and on-site contact with the employer, representatives 
of the affected workers, and the local community, which may include an 
assessment of the:
    (1) Layoff plans and schedule of the employer;
    (2) Potential for averting the layoff(s) in consultation with State 
or local economic development agencies, including private sector 
economic development entities;
    (3) Background and probable assistance needs of the affected 
workers;
    (4) Reemployment prospects for workers in the local community; and
    (5) Available resources to meet the short and long-term assistance 
needs of the affected workers.
    (b) The provision of information and access to unemployment 
compensation benefits, comprehensive One-Stop system services, and 
employment and training activities, including information on the Trade 
Adjustment Assistance (TAA) program and the NAFTA-TAA program (19 U.S.C. 
2271 et seq.);
    (c) The provision of guidance and/or financial assistance in 
establishing a labor-management committee voluntarily agreed to by labor 
and management, or a workforce transition committee comprised of 
representatives of the employer, the affected workers and the local 
community. The committee may devise and oversee an implementation 
strategy that responds to the reemployment needs of the workers. The 
assistance to this committee may include:
    (1) The provision of training and technical assistance to members of 
the committee;
    (2) Funding the operating costs of a committee to enable it to 
provide advice and assistance in carrying out rapid response activities 
and in the design and delivery of WIA-authorized services to affected 
workers. Typically, such support will last no longer than six months; 
and
    (3) Providing a list of potential candidates to serve as a neutral 
chairperson of the committee.
    (d) The provision of emergency assistance adapted to the particular 
closing, layoff or disaster.
    (e) The provision of assistance to the local board and chief elected 
official(s) to develop a coordinated response to the dislocation event 
and, as needed, obtain access to State economic development assistance. 
Such coordinated response may include the development of an application 
for National Emergency Grant under 20 CFR part 671. (WIA secs. 101(38) 
and 134(a)(2)(A).)



Sec.  665.320  May other activities be undertaken as part of
rapid response?

    Yes, a State or designated entity may provide rapid response 
activities in addition to the activities required to be provided under 
Sec.  665.310. In order to provide effective rapid response upon 
notification of a permanent closure or mass layoff, or a natural or 
other disaster resulting in a mass job dislocation, the State or 
designated entity may:
    (a) In conjunction, with other appropriate Federal, State and Local 
agencies and officials, employer associations, technical councils or 
other industry business councils, and labor organizations:
    (1) Develop prospective strategies for addressing dislocation 
events, that ensure rapid access to the broad range of allowable 
assistance;
    (2) Identify strategies for the aversion of layoffs; and
    (3) Develop and maintain mechanisms for the regular exchange of 
information relating to potential dislocations, available adjustment 
assistance, and the effectiveness of rapid response strategies.
    (b) In collaboration with the appropriate State agency(ies), collect 
and analyze information related to economic dislocations, including 
potential closings and layoffs, and all available resources in the State 
for dislocated workers in order to provide an adequate basis for 
effective program management, review and evaluation of rapid response 
and layoff aversion efforts in the State.

[[Page 85]]

    (c) Participate in capacity building activities, including providing 
information about innovative and successful strategies for serving 
dislocated workers, with local areas serving smaller layoffs.
    (d) Assist in devising and overseeing strategies for:
    (1) Layoff aversion, such as prefeasibility studies of avoiding a 
plant closure through an option for a company or group, including the 
workers, to purchase the plant or company and continue it in operation;
    (2) Incumbent worker training, including employer loan programs for 
employee skill upgrading; and
    (3) Linkages with economic development activities at the Federal, 
State and local levels, including Federal Department of Commerce 
programs and available State and local business retention and 
recruitment activities.



Sec.  665.330  Are the NAFTA-TAA program requirements for rapid
response also required activities?

    The Governor must ensure that rapid response activities under WIA 
are made available to workers who, under the NAFTA Implementation Act 
(Public Law 103-182), are members of a group of workers (including those 
in any agricultural firm or subdivision of an agricultural firm) for 
which the Governor has made a preliminary finding that:
    (a) A significant number or proportion of the workers in such firm 
or an appropriate subdivision of the firm have become totally or 
partially separated, or are threatened to become totally or partially 
separated; and
    (b) Either:
    (1) The sales or production, or both, of such firm or subdivision 
have decreased absolutely; and
    (2) Imports from Mexico or Canada of articles like or directly 
competitive with those produced by such firm or subdivision have 
increased; or
    (c) There has been a shift in production by such workers' firm or 
subdivision to Mexico or Canada of articles which are produced by the 
firm or subdivision.



Sec.  665.340  What is meant by ``provision of additional
assistance'' in WIA section 134(a)(2)(A)(ii)?

    Up to 25 percent of dislocated worker funds may be reserved for 
rapid response activities. Once the State has reserved adequate funds 
for rapid response activities, such as those described in Sec. Sec.  
665.310 and 665.320, the remainder of the funds may be used by the State 
to provide funds to local areas, that experience increased numbers of 
unemployed individuals due to natural disasters, plant closings, mass 
layoffs or other events, for provision of direct services to 
participants (such as intensive, training, and other services) if there 
are not adequate local funds available to assist the dislocated workers.



PART 666_PERFORMANCE ACCOUNTABILITY UNDER TITLE I OF THE 
WORKFORCE INVESTMENT ACT--Table of Contents



                 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 of 
          performance?
666.130 Under what conditions may a State or DOL request revisions to 
          the State negotiated levels of performance?
666.140 Which individuals receiving services are included in the core 
          indicators of performance?
666.150 What responsibility do States have to use quarterly wage record 
          information for performance accountability?

        Subpart B_Incentives and Sanctions for State Performance

666.200 Under what circumstances is a State eligible for an Incentive 
          Grant?
666.205 What are the time frames under which States submit performance 
          progress reports and apply for incentive grants?
666.210 How may Incentive Grant funds be used?
666.220 What information must be included in a State Board's application 
          for an Incentive Grant?
666.230 How does the Department determine the amounts for Incentive 
          Grant awards?
666.240 Under what circumstances may a sanction be applied to a State 
          that fails

[[Page 86]]

          to achieve negotiated levels of performance for title I?

                 Subpart C_Local Measures of Performance

666.300 What performance indicators apply to local areas?
666.310 What levels of performance apply to the indicators of 
          performance in local areas?

        Subpart D_Incentives and Sanctions for Local Performance

666.400 Under what circumstances are local areas eligible for State 
          Incentive Grants?
666.410 How may local incentive awards be used?
666.420 Under what circumstances may a sanction be applied to local 
          areas for poor performance?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49402, Aug. 11, 2000, unless otherwise noted.



                 Subpart A_State Measures of Performance



Sec.  666.100  What performance indicators must be included
in a State's plan?

    (a) All States submitting a State Plan under WIA title I, subtitle B 
must propose expected levels of performance for each of the core 
indicators of performance for the adult, dislocated worker and youth 
programs, respectively and the two customer satisfaction indicators.
    (1) For the Adult program, these indicators are:
    (i) Entry into unsubsidized employment;
    (ii) Retention in unsubsidized employment six months after entry 
into the employment;
    (iii) Earnings received in unsubsidized employment six months after 
entry into the employment; and
    (iv) Attainment of a recognized credential related to achievement of 
educational skills (such as a secondary school diploma or its recognized 
equivalent), or occupational skills, by participants who enter 
unsubsidized employment.
    (2) For the Dislocated Worker program, these indicators are:
    (i) Entry into unsubsidized employment;
    (ii) Retention in unsubsidized employment six months after entry 
into the employment;
    (iii) Earnings received in unsubsidized employment six months after 
entry into the employment; and
    (iv) Attainment of a recognized credential related to achievement of 
educational skills (such as a secondary school diploma or its recognized 
equivalent), or occupational skills, by participants who enter 
unsubsidized employment.
    (3) For the Youth program, these indicators are:
    (i) For eligible youth aged 14 through 18:
    (A) Attainment of basic skills goals, and, as appropriate, work 
readiness or occupational skills goals, up to a maximum of three goals 
per year;
    (B) Attainment of secondary school diplomas and their recognized 
equivalents; and
    (C) Placement and retention in postsecondary education, advanced 
training, military service, employment, or qualified apprenticeships.
    (ii) For eligible youth aged 19 through 21:
    (A) Entry into unsubsidized employment;
    (B) Retention in unsubsidized employment six months after entry into 
the employment;
    (C) Earnings received in unsubsidized employment six months after 
entry into the employment; and
    (D) Attainment of a recognized credential related to achievement of 
educational skills (such as a secondary school diploma or its recognized 
equivalent), or occupational skills, by participants who enter post-
secondary education, advanced training, or unsubsidized employment.
    (4) A single customer satisfaction measure for employers and a 
single customer satisfaction indicator for participants must be used for 
the WIA title I, subtitle B programs for adults, dislocated workers and 
youth. (WIA sec. 136(b)(2).)
    (b) After consultation with the representatives identified in WIA 
sections 136(i) and 502(b), the Departments of

[[Page 87]]

Labor and Education will issue definitions for the performance 
indicators established under title I and title II of WIA. (WIA sec. 136 
(b), (f) and (i).)



Sec.  666.110  May a Governor require additional indicators of performance?

    Yes, Governors may develop additional indicators of performance for 
adults, youth and dislocated worker activities. These indicators must be 
included in the State Plan. (WIA sec. 136(b)(2)(C).)



Sec.  666.120  What are the procedures for negotiating annual
levels of performance?

    (a) We issue instructions on the specific information that must 
accompany the State Plan and that is used to review the State's expected 
levels of performance. The instructions may require that levels of 
performance for years two and three be expressed as a percentage 
improvement over the immediately preceding year's performance, 
consistent with the objective of continuous improvement.
    (b) States must submit expected levels of performance for the 
required indicators for each of the first three program years covered by 
the Plan.
    (c) The Secretary and the Governor must reach agreement on levels of 
performance for each core indicator and the customer satisfaction 
indicators. In negotiating these levels, the following must be taken 
into account:
    (1) The expected levels of performance identified in the State Plan;
    (2) The extent to which the levels of performance for each core 
indicator assist in achieving high customer satisfaction;
    (3) The extent to which the levels of performance promote continuous 
improvement and ensure optimal return on the investment of Federal 
funds; and
    (4) How the levels compare with those of other States, taking into 
account factors including differences in economic conditions, 
participant characteristics, and the proposed service mix and 
strategies.
    (d) The levels of performance agreed to under paragraph (c) of this 
section will be the State's negotiated levels of performance for the 
first three years of the State Plan. These levels will be used to 
determine whether sanctions will be applied or incentive grant funds 
will be awarded.
    (e) Before the fourth year of the State Plan, the Secretary and the 
Governor must reach agreement on levels of performance for each core 
indicator and the customer satisfaction indicators for the fourth and 
fifth years covered by the plan. In negotiating these levels, the 
factors listed in paragraph (c) of this section must be taken into 
account.
    (f) The levels of performance agreed to under paragraph (e) of this 
section will be the State negotiated levels of performance for the 
fourth and fifth years of the plan and must be incorporated into the 
State Plan.
    (g) Levels of performance for the additional indicators developed by 
the Governor, including additional indicators to demonstrate and measure 
continuous improvement toward goals identified by the State, are not 
part of the negotiations described in paragraphs (c) and (e) of this 
section. (WIA sec. 136(b)(3).)
    (h) State negotiated levels of performance may be revised in 
accordance with Sec.  666.130.



Sec.  666.130  Under what conditions may a State or DOL request
revisions to the State negotiated levels of performance?

    (a) The DOL guidelines describe when and under what circumstances a 
Governor may request revisions to negotiated levels. These circumstances 
include significant changes in economic conditions, in the 
characteristics of participants entering the program, or in the services 
to be provided from when the initial plan was submitted and approved. 
(WIA sec. 136(b)(3)(A)(vi).)
    (b) The guidelines will establish the circumstances under which a 
State will be required to submit revisions under specified 
circumstances.



Sec.  666.140  Which individuals receiving services are included
in the core indicators of performance?

    (a)(1) The core indicators of performance apply to all individuals 
who are registered under 20 CFR 663.105 and 664.215 for the adult, 
dislocated worker

[[Page 88]]

and youth programs, except for those adults and dislocated workers who 
participate exclusively in self-service or informational activities. 
(WIA sec. 136(b)(2)(A).)
    (2) Self-service and informational activities are those core 
services that are made available and accessible to the general public, 
that are designed to inform and educate individuals about the labor 
market and their employment strengths, weaknesses, and the range of 
services appropriate to their situation, and that do not require 
significant staff involvement with the individual in terms of resources 
or time.
    (b) For registered participants, a standardized record that includes 
appropriate performance information must be maintained in accordance 
with WIA section 185(a)(3).
    (c) Performance will be measured on the basis of results achieved by 
registered participants, and will reflect services provided under WIA 
title I, subtitle B programs for adults, dislocated workers and youth. 
Performance may also take into account services provided to participants 
by other One-Stop partner programs and activities, to the extent that 
the local MOU provides for the sharing of participant information.



Sec.  666.150  What responsibility do States have to use quarterly
wage record information for performance accountability?

    (a) States must, consistent with State laws, use quarterly wage 
record information in measuring the progress on State and local 
performance measures. In order to meet this requirement the use of 
social security numbers from registered participants and such other 
information as is necessary to measure the progress of those 
participants through quarterly wage record information is authorized.
    (b) The State must include in the State Plan a description of the 
State's performance accountability system, and a description of the 
State's strategy for using quarterly wage record information to measure 
the progress on State and local performance measures. The description 
must identify the entities that may have access to quarterly wage record 
information for this purpose.
    (c) ``Quarterly wage record information'' means information 
regarding wages paid to an individual, the social security account 
number (or numbers, if more than one) of the individual and the name, 
address, State, and (when known) the Federal employer identification 
number of the employer paying the wages to the individual. (WIA sec. 
136(f)(2).)



        Subpart B_Incentives and Sanctions for State Performance



Sec.  666.200  Under what circumstances is a State eligible for
an Incentive Grant?

    A State is eligible to apply for an Incentive Grant if its 
performance for the immediately preceding year exceeds:
    (a) The State's negotiated levels of performance for the required 
core indicators for the adult, dislocated worker and youth programs 
under title I of WIA as well as the customer satisfaction indicators for 
WIA title I programs;
    (b) The adjusted levels of performance for title II Adult Education 
and Family Literacy programs; and
    (c) The adjusted levels of performance under section 113 of the Carl 
D. Perkins Vocational and Technical Education Act (20 U.S.C. 2301 et 
seq.). (WIA sec. 503.)



Sec.  666.205  What are the time frames under which States submit
performance progress reports and apply for incentive grants?

    (a) State performance progress reports must be filed by the due date 
established in reporting instructions issued by the Department.
    (b) Based upon the reports filed under paragraph (a) of this 
section, we will determine the amount of funds available, under WIA 
title I, to each eligible State for incentive grants, in accordance with 
the criteria of Sec.  666.230. We will publish the award amounts for 
each eligible State, after consultation with the Secretary of Education, 
within ninety (90) days after the due date for performance progress 
reports established under paragraph (a) of this section.

[[Page 89]]

    (c) Within forty-five (45) days of the publication of award amounts 
under paragraph (b) of this section, States may apply for incentive 
grants in accordance with the requirements of Sec.  666.220.



Sec.  666.210  How may Incentive Grant funds be used?

    Incentive grant funds are awarded to States to carry out any one or 
more innovative programs under titles I or II of WIA or the Carl D. 
Perkins Vocational and Technical Education Act, regardless of which Act 
is the source of the incentive funds. (WIA sec. 503(a).)



Sec.  666.220  What information must be included in a State 
Board's application for an Incentive Grant?

    (a) After consultation with the Secretary of Education, we will 
issue instructions annually which will include the amount of funds 
available to be awarded for each State and provide instructions for 
submitting applications for an Incentive Grant.
    (b) Each State desiring an incentive grant must submit to the 
Secretary an application, developed by the State Board, containing the 
following assurances:
    (1) The State legislature was consulted regarding the development of 
the application.
    (2) The application was approved by the Governor, the eligible 
agency (as defined in WIA section 203), and the State agency responsible 
for vocational and technical programs under the Carl D. Perkins 
Vocational and Technical Education Act.
    (3) The State exceeded the State negotiated levels of performance 
for title I, the levels of performance under title II and the levels for 
vocational and technical programs under the Carl D. Perkins Vocational 
and Technical Education Act. (WIA sec. 503(b).)



Sec.  666.230  How does the Department determine the amounts for
Incentive Grant awards?

    (a) We determine the total amount to be allocated from funds 
available under WIA section 174(b) for Incentive Grants taking into 
consideration such factors as:
    (1) The availability of funds under section 174(b) for technical 
assistance, demonstration and pilot projects, evaluations, and Incentive 
Grants and the needs for these activities;
    (2) The number of States that are eligible for Incentive Grants and 
their relative program formula allocations under title I;
    (3) The availability of funds under WIA section 136(g)(2) resulting 
from funds withheld for poor performance by States; and
    (4) The range of awards established in WIA section 503(c).
    (b) We will publish the award amount for eligible States, after 
consultation with the Secretary of Education, within 90 days after the 
due date, established under Sec.  666.205(a), for the latest State 
performance progress report providing the annual information needed to 
determine State eligibility.
    (c) In determining the amount available to an eligible State, the 
Secretary, with the Secretary of Education, may consider such factors 
as:
    (1) The relative allocations of the eligible State compared to other 
States;
    (2) The extent to which the negotiated levels of performance were 
exceeded;
    (3) Performance improvement relative to previous years;
    (4) Changes in economic conditions, participant characteristics and 
proposed service design since the negotiated levels of performance were 
agreed to;
    (5) The eligible State's relative performance for each of the 
indicators compared to other States; and
    (6) The performance on those indicators considered most important in 
terms of accomplishing national goals established by each of the 
respective Secretaries.



Sec.  666.240  Under what circumstances may a sanction be applied
to a State that fails to achieve negotiated levels of performance
for title I?

    (a) If a State fails to meet the negotiated levels of performance 
agreed to under Sec.  666.120 for core indicators of performance or 
customer satisfaction indicators for the adult, dislocated worker or 
youth programs under title I

[[Page 90]]

of WIA, the Secretary must, upon request, provide technical assistance, 
as authorized under WIA sections 136(g) and 170.
    (b) If a State fails to meet the negotiated levels of performance 
for core indicators of performance or customer satisfaction indicators 
for the same program in two successive years, the amount of the 
succeeding year's allocation for the applicable program may be reduced 
by up to five percent.
    (c) The exact amount of any allocation reduction will be based upon 
the degree of failure to meet the negotiated levels of performance for 
core indicators. In making a determination of the amount, if any, of 
such a sanction, we may consider factors such as:
    (1) The State's performance relative to other 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 
participant characteristics described in the State Plan; and
    (7) Performance on other core indicators of performance and customer 
satisfaction indicators for that program. (WIA sec. 136(g).)
    (d) Only performance that is less than 80 percent of the negotiated 
levels will be deemed to be a failure to achieve negotiated levels of 
performance.
    (e) In accordance with 20 CFR 667.300(e), a State grant may be 
reduced for failure to submit an annual performance progress report.
    (f) A State may request review of a sanction we impose in accordance 
with the provisions of 20 CFR 667.800.



                 Subpart C_Local Measures of Performance



Sec.  666.300  What performance indicators apply to local areas?

    (a) Each local workforce investment area in a State is subject to 
the same core indicators of performance and the customer satisfaction 
indicators that apply to the State under Sec.  666.100(a).
    (b) In addition to the indicators described in paragraph (a) of this 
section, under Sec.  666.110, the Governor may apply additional 
indicators of performance to local areas in the State. (WIA sec. 
136(c)(1).)



Sec.  666.310  What levels of performance apply to the indicators
of performance in local areas?

    (a) The Local Board and the chief elected official must negotiate 
with the Governor and reach agreement on the local levels of performance 
for each indicator identified under Sec.  666.300. The levels must be 
based on the State negotiated levels of performance established under 
Sec.  666.120 and take into account the factors described in paragraph 
(b) of this section.
    (b) In determining the appropriate local levels of performance, the 
Governor, Local Board and chief elected official must take into account 
specific economic, demographic and other characteristics of the 
populations to be served in the local area.
    (c) The performance levels agreed to under paragraph (a) of this 
section must be incorporated in the local plan. (WIA secs. 118(b)(3) and 
136(c).)



        Subpart D_Incentives and Sanctions for Local Performance



Sec.  666.400  Under what circumstances are local areas eligible
for State Incentive Grants?

    (a) States must use a portion of the funds reserved for Statewide 
workforce investment activities under WIA sections 128(a) and 133(a)(1) 
to provide Incentive Grants to local areas for regional cooperation 
among local boards (including local boards for a designated region, as 
described in WIA section 116(c)), for local coordination of activities 
carried out under this Act, and for exemplary performance on the local 
performance measures established under subpart C of this part.
    (b) The amount of funds used for Incentive Grants under paragraph 
(a) of this section and the criteria used for determining exemplary 
local performance levels to qualify for the incentive grants are 
determined by the Governor. (WIA sec. 134(a)(2)(B)(iii).)

[[Page 91]]



Sec.  666.410  How may local incentive awards be used?

    The local incentive grant funds may be used for any activities 
allowed under WIA title I-B.



Sec.  666.420  Under what circumstances may a sanction be applied
to local areas for poor performance?

    (a) If a local area fails to meet the levels of performance agreed 
to under Sec.  666.310 for the core indicators of performance or 
customer satisfaction indicators for a program in any program year, 
technical assistance must be provided. The technical assistance must be 
provided by the Governor with funds reserved for Statewide workforce 
investment activities under WIA sections 128(a) and 133(a)(1), or, upon 
the Governor's request, by the Secretary. The technical assistance may 
include the development of a performance improvement plan, a modified 
local plan, or other actions designed to assist the local area in 
improving performance.
    (b) If a local area fails to meet the levels of performance agreed 
to under Sec.  666.310 for the core indicators of performance or 
customer satisfaction indicators for a program for two consecutive 
program years, the Governor must take corrective actions. The corrective 
actions may include the development of a reorganization plan under which 
the Governor:
    (1) Requires the appointment and certification of a new Local Board;
    (2) Prohibits the use of particular service providers or One-Stop 
partners that have been identified as achieving poor levels of 
performance; or
    (3) Requires other appropriate measures designed to improve the 
performance of the local area.
    (c) A local area may appeal to the Governor to rescind or revise a 
reorganization plan imposed under paragraph (b) of this section not 
later than thirty (30) days after receiving notice of the plan. The 
Governor must make a final decision within 30 days after receipt of the 
appeal. The Governor's final decision may be appealed by the Local Board 
to the Secretary under 20 CFR 667.650(b) not later than thirty (30) days 
after the local area receives the decision. The decision by the Governor 
to impose a reorganization plan becomes effective at the time it is 
issued, and remains effective unless the Secretary rescinds or revises 
the reorganization plan. Upon receipt of the appeal from the local area, 
the Secretary must make a final decision within thirty (30) days. (WIA 
sec. 136(h).)



PART 667_ADMINISTRATIVE PROVISIONS UNDER TITLE I OF THE WORKFORCE
INVESTMENT ACT--Table of Contents



                            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 
          Investment Act funds under title I of the Act?
667.107 What is the period of availability for expenditure of WIA funds?
667.110 What is the Governor/Secretary Agreement?
667.120 What planning information must a State submit in order to 
          receive a formula grant?
667.130 How are WIA title I formula funds allocated to local workforce 
          investment areas?
667.135 What ``hold harmless'' provisions apply to WIA adult and youth 
          allocations?
667.140 Does a Local Board have the authority to transfer funds between 
          programs?
667.150 What reallotment procedures does the Secretary use?
667.160 What reallocation procedures must the Governors use?
667.170 What responsibility review does the Department conduct for 
          awards made under WIA title I, subtitle D?

          Subpart B_Administrative Rules, Costs and Limitations

667.200 What general fiscal and administrative rules apply to the use of 
          WIA title I funds?
667.210 What administrative cost limits apply to Workforce Investment 
          Act title I grants?
667.220 What Workforce Investment Act title I functions and activities 
          constitute the costs of administration subject to the 
          administrative cost limit?
667.250 What requirements relate to the enforcement of the Military 
          Selective Service Act?
667.255 Are there special rules that apply to veterans when income is a 
          factor in eligibility determinations?
667.260 May WIA title I funds be spent for construction?

[[Page 92]]

667.262 Are employment generating activities, or similar activities, 
          allowable under WIA title I?
667.264 What other activities are prohibited under title I of WIA?
667.266 What are the limitations related to religious activities?
667.268 What prohibitions apply to the use of WIA title I funds to 
          encourage business relocation?
667.269 What procedures and sanctions apply to violations of Sec. Sec.  
          667.260 through 667.268?
667.270 What safeguards are there to ensure that participants in 
          Workforce Investment Act employment and training activities do 
          not displace other employees?
667.272 What wage and labor standards apply to participants in 
          activities under title I of WIA?
667.274 What health and safety standards apply to the working conditions 
          of participants in activities under title I of WIA?
667.275 What are a recipient's obligations to ensure nondiscrimination 
          and equal opportunity, and what are a recipient's obligations 
          with respect to religious activities?

                    Subpart C_Reporting Requirements

667.300 What are the reporting requirements for Workforce Investment Act 
          programs?

                   Subpart D_Oversight and Monitoring

667.400 Who is responsible for oversight and monitoring of WIA title I 
          grants?
667.410 What are the oversight roles and responsibilities of recipients 
          and subrecipients?

 Subpart E_Resolution of Findings From Monitoring and Oversight Reviews

667.500 What procedures apply to the resolution of findings arising from 
          audits, investigations, monitoring and oversight reviews?
667.505 How do we resolve investigative and monitoring findings?
667.510 What is the Grant Officer resolution process?

 Subpart F_Grievance Procedures, Complaints, and State Appeals Processes

667.600 What local area, State and direct recipient grievance procedures 
          must be established?
667.610 What processes do we use to review State and local grievances 
          and complaints?
667.630 How are complaints and reports of criminal fraud and abuse 
          addressed under WIA?
667.640 What additional appeal processes or systems must a State have 
          for the WIA program?
667.645 What procedures apply to the appeals of non-designation of local 
          areas?
667.650 What procedures apply to the appeals of the Governor's 
          imposition of sanctions for substantial violations or 
          performance failures by a local area?

    Subpart G_Sanctions, Corrective Actions, and Waiver of Liability

667.700 What procedure do we use to impose sanctions and corrective 
          actions on recipients and subrecipients of WIA grant funds?
667.705 Who is responsible for funds provided under title I of WIA?
667.710 What actions are required to address the failure of a local area 
          to comply with the applicable uniform administrative 
          provisions?
667.720 How do we handle a recipient's request for waiver of liability 
          under WIA section 184(d)(2)?
667.730 What is the procedure to handle a recipient's request for 
          advance approval of contemplated corrective actions?
667.740 What procedure must be used for administering the offset/
          deduction provisions at section 184(c) of the Act?

        Subpart H_Administrative Adjudication and Judicial Review

667.800 What actions of the Department may be appealed to the Office of 
          Administrative Law Judges?
667.810 What rules of procedure apply to hearings conducted under this 
          subpart?
667.820 What authority does the Administrative Law Judge have in 
          ordering relief as an outcome of an administrative hearing?
667.825 What special rules apply to reviews of NFJP and WIA INA grant 
          selections?
667.830 When will the Administrative Law Judge issue a decision?
667.840 Is there an alternative dispute resolution process that may be 
          used in place of an OALJ hearing?
667.850 Is there judicial review of a final order of the Secretary 
          issued under section 186 of the Act?
667.860 Are there other remedies available outside of the Act?

    Authority: Subtitle C of Title I, Sec. 506(c), Pub. L. 105-220, 112 
Stat. 936 (20 U.S.C. 9276(c)); Executive Order 13198, 66 FR 8497, 3 CFR 
2001 Comp., p. 750; Executive Order 13279, 67 FR 77141, 3 CFR 2002 
Comp., p. 258.

    Source: 65 FR 49421, Aug. 11, 2000, unless otherwise noted.

[[Page 93]]



                            Subpart A_Funding



Sec.  667.100  When do Workforce Investment Act grant funds
become available?

    (a) Program year. Except as provided in paragraph (b) of this 
section, fiscal year appropriations for programs and activities carried 
out under title I of WIA are available for obligation on the basis of a 
program year. A program year begins on July 1 in the fiscal year for 
which the appropriation is made and ends on June 30 of the following 
year.
    (b) Youth fund availability. Fiscal year appropriations for a 
program year's youth activities, authorized under chapter 4, subtitle B, 
title I of WIA, may be made available for obligation beginning on April 
1 of the fiscal year for which the appropriation is made.



Sec.  667.105  What award document authorizes the expenditure
of Workforce Investment Act funds under title I of the Act?

    (a) Agreement. All WIA title I funds that are awarded by grant, 
contract or cooperative agreement are issued under an agreement between 
the Grant Officer/Contracting Officer and the recipient. The agreement 
describes the terms and conditions applicable to the award of WIA title 
I funds.
    (b) Grant funds awarded to States. Under the Governor/Secretary 
Agreement described in Sec.  667.110, each program year, the grant 
agreement described in paragraph (a) of this section will be executed 
and signed by the Governor or the Governor's designated representative 
and Secretary or the Grant Officer. The grant agreement and associated 
Notices of Obligation are the basis for Federal obligation of funds 
allotted to the States in accordance with WIA sections 127(b) and 132(b) 
for each program year.
    (c) Indian and Native American Programs. (1) Awards of grants, 
contracts or cooperative agreements for the WIA Indian and Native 
American program will be made to eligible entities on a competitive 
basis every two program years for a two-year period, in accordance with 
the provisions of 20 CFR part 668. An award for the succeeding two-year 
period may be made 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 cooperative agreement may be renewed under 
the authority of paragraph (c)(1) of this section no more than once 
during any four-year period for any single recipient.
    (d) National Farmworker Jobs programs. (1) Awards of grants or 
contracts for the National Farmworker Jobs program will be made to 
eligible entities on a competitive basis every two program years for a 
two-year period, in accordance with the provisions of 20 CFR part 669. 
An award for the succeeding two-year period may be made to the same 
recipient if the recipient:
    (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 be renewed under the authority of 
paragraph (d)(1) of this section no more than once during any four-year 
period for any single recipient.
    (e) Job Corps. (1) Awards of contracts will be made on a competitive 
basis between the Contracting Officer and eligible entities to operate 
contract centers and provide operational support services.
    (2) The Secretary may enter into interagency agreements with Federal 
agencies for funding, establishment, and operation of Civilian 
Conservation Centers for Job Corps programs.
    (f) [Reserved]
    (g) Awards under WIA sections 171 and 172. (1) Awards of grants, 
contracts or cooperative agreements will be made to eligible entities 
for programs or activities authorized under WIA sections 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 this 
section

[[Page 94]]

will be awarded on a competitive basis, except that a noncompetitive 
award may be made in the case of a project that is funded jointly with 
other public or private entities that provide a portion of the funding.
    (3) Contracts and grants under paragraphs (g)(1)(iii), (iv), and (v) 
of this section in amounts that exceed $100,000 will be awarded on a 
competitive basis, except that a noncompetitive award may be made in the 
case of a project that is funded jointly with other public or private 
sector entities that provide a substantial portion of the assistance 
under the grant or contract for the project.
    (4) Grants or contracts for carrying out projects in paragraphs 
(g)(1)(iii), (iv), and (v) of this section may not be awarded to the 
same organization for more than three consecutive years, unless the 
project is competitively reevaluated within that period.
    (5) Entities with nationally recognized expertise in the methods, 
techniques and knowledge of workforce investment activities will be 
provided priority in awarding contracts or grants for the projects under 
paragraphs (g)(1)(iii), (iv), and (v) of this section.
    (6) A peer review process will be used for projects under paragraphs 
(g)(1)(iii), (iv), and (v) of this section for grants that exceed 
$500,000, and to designate exemplary and promising programs.
    (h) Termination. Each grant terminates when the period of fund 
availability has expired. The grant must be closed in accordance with 
the closeout provisions at 29 CFR 95.71 or 97.50, as appropriate.

[65 FR 49421, Aug. 11, 2000, as amended at 71 FR 35525, June 21, 2006]



Sec.  667.107  What is the period of availability for expenditure
of WIA funds?

    (a) Grant funds expended by States. Funds allotted to States under 
WIA sections 127(b) and 132(b) for any program year are available for 
expenditure by the State receiving the funds only during that program 
year and the two succeeding program years.
    (b) Grant funds expended by local areas. (1) Funds allocated by a 
State to a local area under WIA sections 128(b) and 133(b), for any 
program year are available for expenditure only during that program year 
and the succeeding program year.
    (2) Funds which are not expended by a local area in the two-year 
period described in paragraph (b)(1) of this section, must be returned 
to the State. Funds so returned are available for expenditure by State 
and local recipients and subrecipients only during the 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 
their allocation of funds for the same program year within the two-year 
period.
    (c) Job Corps. Funds obligated for any program year for any Job 
Corps activity carried out under title I, subtitle C, of WIA may be 
expended during that program year and the two succeeding program years.
    (d) Funds awarded under WIA sections 171 and 172. Funds obligated 
for any program year for a program or activity authorized under sections 
171 or 172 of WIA remain available until expended.
    (e) Other programs under title I of WIA. For all other grants, 
contracts and cooperative agreements issued under title I of WIA the 
period of availability for expenditure is set in the terms and 
conditions of the award document.



Sec.  667.110  What is the Governor/Secretary Agreement?

    (a) To establish a continuing relationship under the Act, the 
Governor and the Secretary will enter into a Governor/Secretary 
Agreement. The Agreement will consist of a statement assuring that the 
State will comply with:
    (1) The Workforce Investment Act and all applicable rules and 
regulations, and
    (2) The Wagner-Peyser Act and all applicable rules and regulations.
    (b) The Governor/Secretary Agreement may be modified, revised or 
terminated at any time, upon the agreement of both parties.

[[Page 95]]



Sec.  667.120  What planning information must a State submit in
order to receive a formula grant?

    Each State seeking financial assistance under WIA sections 127 
(youth) or 132 (adults and dislocated workers) or under the Wagner-
Peyser Act must submit a single State Plan. The requirements for the 
plan content and the plan review process are described in WIA section 
112, Wagner-Peyser Act section 8, and 20 CFR 661.220, 661.240 and 
652.211 through 652.214.



Sec.  667.130  How are WIA title I formula funds allocated to
local workforce investment areas?

    (a) General. The Governor must allocate WIA formula funds allotted 
for services to youth, adults and dislocated workers in accordance with 
WIA sections 128 and 133, and this section.
    (1) State Boards must assist Governors in the development of any 
discretionary within-State allocation formulas. (WIA sec. 111(d)(5).)
    (2) Within-State allocations must be made:
    (i) In accordance with the allocation formulas contained in WIA 
sections 128(b) and 133(b) and in the State workforce investment plan, 
and
    (ii) After consultation with chief elected officials in each of the 
workforce investment areas.
    (b) State reserve. (1) Of the WIA formula funds allotted for 
services to youth, adults and dislocated workers, the Governor must 
reserve funds from each of these sources for Statewide workforce 
investment activities. In making these reservations, the Governor may 
reserve up to fifteen (15) percent from each of these sources. Funds 
reserved under this paragraph may be combined and spent on Statewide 
employment and training activities, for adults and dislocated workers, 
and Statewide youth activities, as described in 20 CFR 665.200 and 
665.210, without regard to the funding source of the reserved funds.
    (2) The Governor must reserve a portion of the dislocated worker 
funds for Statewide rapid response activities, as described in WIA 
section 134(a)(2)(A) and 20 CFR 665.310 through 665.330. In making this 
reservation, the Governor may reserve up to twenty-five (25) percent of 
the dislocated worker funds.
    (c) Youth allocation formula. (1) Unless the Governor elects to 
distribute funds in accordance with the discretionary allocation formula 
described in paragraph (c)(2) of this section, the remainder of youth 
funds not reserved under paragraph (b)(1) of this section must be 
allocated:
    (i) 33\1/3\ percent on the basis of the relative number of 
unemployed individuals in areas of substantial unemployment in each 
workforce investment area, compared to the total number of unemployed 
individuals in all areas of substantial unemployment in the State;
    (ii) 33\1/3\ percent on the basis of the relative excess number of 
unemployed individuals in each workforce investment area, compared to 
the total excess number of unemployed individuals in the State; and
    (iii) 33\1/3\ percent on the basis of the relative number of 
disadvantaged youth in each workforce investment area, compared to the 
total number of disadvantaged youth in the State. (WIA sec. 
128(b)(2)(A)(i))
    (2) Discretionary youth allocation formula. In lieu of making the 
formula allocation described in paragraph (c)(1) of this section, the 
State may allocate youth funds under a discretionary formula. Under that 
formula, the State must allocate a minimum of 70 percent of youth funds 
not reserved under paragraph (b)(1) of this section on the basis of the 
formula in paragraph (c)(1) of this section, and may allocate up to 30 
percent on the basis of a formula that:
    (i) Incorporates additional factors (other than the factors 
described in paragraph (c)(1) of this section) relating to:
    (A) Excess youth poverty in urban, rural and suburban local areas; 
and
    (B) Excess unemployment above the State average in urban, rural and 
suburban local areas; and
    (ii) Was developed by the State Board and approved by the Secretary 
of Labor as part of the State workforce investment plan. (WIA sec. 
128(b)(3).)
    (d) Adult allocation formula. (1) Unless the Governor elects to 
distribute funds in accordance with the discretionary

[[Page 96]]

allocation formula described in paragraph (d)(2) of this section, the 
remainder of adult funds not reserved under paragraph (b)(1) of this 
section must be allocated:
    (i) 33\1/3\ percent on the basis of the relative number of 
unemployed individuals in areas of substantial unemployment in each 
workforce investment area, compared to the total number of unemployed 
individuals in areas of substantial unemployment in the State;
    (ii) 33\1/3\ percent on the basis of the relative excess number of 
unemployed individuals in each workforce investment area, compared to 
the total excess number of unemployed individuals in the State; and
    (iii) 33\1/3\ percent on the basis of the relative number of 
disadvantaged adults in each workforce investment area, compared to the 
total number of disadvantaged adults in the State. (WIA sec. 
133(b)(2)(A)(i))
    (2) Discretionary adult allocation formula. In lieu of making the 
formula allocation described in paragraph (d)(1) of this section, the 
State may allocate adult funds under a discretionary formula. Under that 
formula, the State must allocate a minimum of 70 percent of adult funds 
on the basis of the formula in paragraph (d)(1) of this section, and may 
allocate up to 30 percent on the basis of a formula that:
    (i) Incorporates additional factors (other than the factors 
described in paragraph (d)(1) of this section) relating to:
    (A) Excess poverty in urban, rural and suburban local areas; and
    (B) Excess unemployment above the State average in urban, rural and 
suburban local areas; and
    (ii) Was developed by the State Board and approved by the Secretary 
of Labor as part of the State workforce investment plan. (WIA sec. 
133(b)(3).)
    (e) Dislocated worker allocation formula. (1) The remainder of 
dislocated worker funds not reserved under paragraph (b)(1) or (b)(2) of 
this section must be allocated on the basis of a formula prescribed by 
the Governor that distributes funds in a manner that addresses the 
State's worker readjustment assistance needs. Funds so distributed must 
not be less than 60 percent of the State's formula allotment.
    (2)(i) The Governor's dislocated worker formula must use the most 
appropriate information available to the Governor, including information 
on:
    (A) Insured unemployment data,
    (B) Unemployment concentrations,
    (C) Plant closings and mass layoff data,
    (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 
the weights assigned, and explain the State's decision to use other 
information or to omit any of the information sources set forth in 
paragraph (e)(2)(i) of this section.
    (3) The Governor may not amend the dislocated worker formula more 
than once for any program year.
    (4)(i) Dislocated worker funds initially reserved by the Governor 
for Statewide rapid response activities in accordance with paragraph 
(b)(2) of this section may be:
    (A) Distributed to local areas, and
    (B) Used to operate projects in local areas in accordance with the 
requirements of WIA section 134(a)(2)(A) and 20 CFR 665.310 through 
665.330.
    (ii) The State Plan must describe the procedures for any 
distribution to local areas, including the timing and process for 
determining whether a distribution will take place.



Sec.  667.135  What ``hold harmless'' provisions apply to WIA
adult and youth allocations?

    (a)(1) For the first two fiscal years after the date on which a 
local area is designated under section 116 of WIA, the State may elect 
to apply the ``hold harmless'' provisions specified in paragraph (b) of 
this section to local area allocations of WIA youth funds under Sec.  
667.130(c) and to allocations of WIA adult funds under Sec.  667.130(d).
    (2) Effective at the end of the second full fiscal year after the 
date on which a local area is designated under section 116 of WIA the 
State must apply the ``hold harmless'' specified in paragraph (b) of 
this section to local area allocations of WIA youth funds under Sec.  
667.130(c) and to allocations of WIA adult funds under Sec.  667.130(d).

[[Page 97]]

    (3) There are no ``hold harmless'' provisions that apply to local 
area allocations of WIA dislocated worker funds.
    (b)(1) If a State elects to apply a ``hold-harmless'' under 
paragraph (a)(1) of this section, a local area must not receive an 
allocation amount for a fiscal year that is less than 90 percent of the 
average allocation of the local area for the two preceding fiscal years.
    (2) In applying the ``hold harmless'' under paragraph (a)(2) of this 
section, a local area must not receive an allocation amount for a fiscal 
year that is less than 90 percent of the average allocation of the local 
area for the two preceding fiscal years.
    (3) Amounts necessary to increase allocations to local areas must be 
obtained by ratably reducing the allocations to be made to other local 
areas.
    (4) If the amounts of WIA funds appropriated in a fiscal year are 
not sufficient to provide the amount specified in paragraph (b)(1) of 
this section to all local areas, the amounts allocated to each local 
area mustbe ratably reduced. (WIA secs. 128(b)(2)(A)(ii), 
133(b)(2)(A)(ii), 506.)



Sec.  667.140  Does a Local Board have the authority to transfer
funds between programs?

    (a) A Local Board may transfer up to 20 percent of a program year 
allocation for adult employment and training activities, and up to 20 
percent of a program year allocation for dislocated worker employment 
and training activities between the two programs.
    (b) Before making any such transfer, a Local Board must obtain the 
Governor's approval.
    (c) Local Boards may not transfer funds to or from the youth 
program.



Sec.  667.150  What reallotment procedures does the Secretary use?

    (a) The first reallotment of funds among States will occur during PY 
2001 based on obligations in PY 2000.
    (b) The Secretary determines, during the first quarter of the 
program year, whether a State has obligated its required level of at 
least 80 percent of the funds allotted under WIA sections 127 and 132 
for programs serving youth, adults, and dislocated workers for the prior 
year, as separately determined for each of the three funding streams. 
Unobligated balances are determined based on allotments adjusted for any 
allowable transfer between the adult and dislocated worker funding 
streams. The amount to be recaptured from each State for reallotment, if 
any, is based on State obligations of the funds allotted to each State 
under WIA sections 127 and 132 for programs serving youth, adults, or 
dislocated workers, less any amount reserved (up to 5 percent at the 
State level and up to 10 percent at the local level) for the costs of 
administration. This amount, if any, is separately determined for each 
funding stream.
    (c) The Secretary reallots youth, adult and dislocated worker funds 
among eligible States in accordance with the provisions of WIA sections 
127(c) and 132(c), respectively. To be eligible to receive a reallotment 
of youth, adult, or dislocated worker funds under the reallotment 
procedures, a State must have obligated at least 80 percent of the prior 
program year's allotment, less any amount reserved for the costs of 
administration of youth, adult, or dislocated worker funds. A State's 
eligibility to receive a reallotment is separately determined for each 
funding stream.
    (d) The term ``obligation'' is defined at 20 CFR 660.300. For 
purposes of this section, the Secretary will also treat as State 
obligations:
    (1) Amounts allocated by the State, under WIA sections 128(b) and 
133(b), to the single State local area if the State has been designated 
as a single local area under WIA section 116(b) or to a balance of State 
local area administered by a unit of the State government, and
    (2) Inter-agency transfers and other actions treated by the State as 
encumbrances against amounts reserved by the State under WIA sections 
128(a) and 133(a) for Statewide workforce investment activities.



Sec.  667.160  What reallocation procedures must the Governors use?

    (a) The Governor may reallocate youth, adult, and dislocated worker 
funds among local areas within the State in accordance with the 
provisions of sections 128(c) and 133(c) of the

[[Page 98]]

Act. If the Governor chooses to reallocate funds, the provisions in 
paragraphs (b) and (c) of this section apply.
    (b) For the youth, adult and dislocated worker programs, the amount 
to be recaptured from each local area for purposes of reallocation, if 
any, must be based on the amount by which the prior year's unobligated 
balance of allocated funds exceeds 20 percent of that year's allocation 
for the program, less any amount reserved (up to 10 percent) for the 
costs of administration. Unobligated balances must be determined based 
on allocations adjusted for any allowable transfer between funding 
streams. This amount, if any, must be separately determined for each 
funding stream.
    (c) To be eligible to receive youth, adult or dislocated worker 
funds under the reallocation procedures, a local area must have 
obligated at least 80 percent of the prior program year's allocation, 
less any amount reserved (up to 10 percent) for the costs of 
administration, for youth, adult, or dislocated worker activities, as 
separately determined. A local area's eligibility to receive a 
reallocation must be separately determined for each funding stream.



Sec.  667.170  What responsibility review does the Department
conduct for awards made under WIA title I, subtitle D?

    (a) Before final selection as a potential grantee, we conduct a 
review of the available records to assess the organization's overall 
responsibility to administer Federal funds. As part of this review, we 
may consider any information that has come to our attention and will 
consider the organization's history with regard to the management of 
other grants, including DOL grants. The failure to meet any one 
responsibility test, except for those listed in paragraphs (a)(1) and 
(a)(2) of this section, does not establish that the organization is not 
responsible unless the failure is substantial or persistent (for two or 
more consecutive years). The responsibility tests include:
    (1) The organization's efforts to recover debts (for which three 
demand letters have been sent) established by final agency action have 
been unsuccessful, or that there has been failure to comply with an 
approved repayment plan;
    (2) Established fraud or criminal activity of a significant nature 
within the organization.
    (3) Serious administrative deficiencies that we identify, such as 
failure to maintain a financial management system as required by Federal 
regulations;
    (4) Willful obstruction of the audit process;
    (5) Failure to provide services to applicants as agreed to in a 
current or recent grant or to meet applicable performance standards;
    (6) Failure to correct deficiencies brought to the grantee's 
attention in writing as a result of monitoring activities, reviews, 
assessments, or other activities;
    (7) Failure to return a grant closeout package or outstanding 
advances within 90 days of the grant expiration date or receipt of 
closeout package, whichever is later, unless an extension has been 
requested and granted; final billings reflecting serious cost category 
or total budget cost overrun;
    (8) Failure to submit required reports;
    (9) Failure to properly report and dispose of government property as 
instructed by DOL;
    (10) Failure to have maintained effective cash management or cost 
controls resulting in excess cash on hand;
    (11) Failure to ensure that a subrecipient complies with its OMB 
Circular A-133 audit requirements specified at Sec.  667.200(b);
    (12) Failure to audit a subrecipient within the required period;
    (13) Final disallowed costs in excess of five percent of the grant 
or contract award if, in the judgement of the grant officer, the 
disallowances are egregious findings and;
    (14) Failure to establish a mechanism to resolve a subrecipient's 
audit in a timely fashion.
    (b) This responsibility review is independent of the competitive 
process. Applicants which are determined to be not responsible will not 
be selected as potential grantees irrespective of their standing in the 
competition.

[[Page 99]]



          Subpart B_Administrative Rules, Costs and Limitations



Sec.  667.200  What general fiscal and administrative rules
apply to the use of WIA title I funds?

    (a) Uniform fiscal and administrative requirements. (1) Except as 
provided in paragraphs (a)(3) through (6) of this section, State, local, 
and Indian tribal government organizations that receive grants or 
cooperative agreements under WIA title I must follow the common rule 
``Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments'' which is codified at 29 CFR 
part 97.
    (2) Except as provided in paragraphs (a)(3) through (7) of this 
section, institutions of higher education, hospitals, other non-profit 
organizations, and commercial organizations must the follow the common 
rule implementing OMB Circular A-110 which is codified at 2 CFR part 215 
and 29 CFR part 95.
    (3) In addition to the requirements at 29 CFR 95.48 or 29 CFR 
97.36(i) (as appropriate), all procurement contracts and other 
transactions between Local Boards and units of State or local 
governments must be conducted only on a cost reimbursement basis. No 
provision for profit is allowed. (WIA sec. 184(a)(3)(B).)
    (4) In addition to the requirements at 29 CFR 95.42 or 29 CFR 
97.36(b)(3) (as appropriate), which address codes of conduct and 
conflict of interest issues related to employees:
    (i) A State Board member or a Local Board member or a Youth Council 
member must neither cast a vote on, nor participate in any decision-
making capacity, on the provision of services by such member (or any 
organization which that member directly represents), nor on any matter 
which would provide any direct financial benefit to that member or a 
member of his immediate family.
    (ii) Neither membership on the State Board, the Local Board, the 
Youth Council nor the receipt of WIA funds to provide training and 
related services, by itself, violates these conflict of interest 
provisions.
    (5) The addition method, described at 29 CFR 95.24 or 29 CFR 
97.25(g)(2) (as appropriate), must be used for the all program income 
earned under WIA title I grants. When the cost of generating program 
income has been charged to the program, the gross amount earned must be 
added to the WIA program. However, the cost of generating program income 
must be subtracted from the amount earned to establish the net amount of 
program income available for use under the grants when these costs have 
not been charged to the WIA program.
    (6) Any excess of revenue over costs incurred for services provided 
by a governmental or non-profit entity must be included in program 
income. (WIA sec. 195(7)(A) and (B).)
    (7) Interest income earned on funds received under WIA title I must 
be included 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 under title I of WIA to 
provide employment and training activities to incumbent workers:
    (i) When the services, facilities, or equipment are not being used 
by eligible participants;
    (ii) If their use does not affect the ability of eligible 
participants to use the services, facilities, or equipment; and
    (iii) If the income generated from such fees is used to carry out 
programs authorized under this title.
    (b) Audit requirements. (1) All governmental and non-profit 
organizations must follow the audit requirements of OMB Circular A-133. 
These requirements are found at 29 CFR 97.26 for governmental 
organizations and at 29 CFR 95.26 for institutions of higher education, 
hospitals, and other non-profit organizations.
    (2)(i) We are responsible for audits of commercial organizations 
which are direct recipients of Federal financial assistance under WIA 
title I.
    (ii) Commercial organizations which are subrecipients under WIA 
title I and which expend more than the minimum level specified in OMB 
Circular A-133 ($300,000 ($500,000 for years ending after December 21, 
2003)) must have either an organization-wide audit conducted in 
accordance with A-133 or a program

[[Page 100]]

specific financial and compliance audit.
    (c) Allowable costs/cost principles. All recipients and 
subrecipients must follow the Federal allowable cost principles that 
apply to their kind of organizations. The DOL regulations at 29 CFR 
95.27 and 29 CFR 97.22 identify the Federal principles for determining 
allowable costs which each kind of recipient and subrecipient must 
follow. The applicable Federal principles for each kind of recipient are 
described in paragraphs (c)(1) through (5) of this section; all 
recipients must comply with paragraphs (c)(6) and (c)(7) of this 
section. For those selected items of cost requiring prior approval, the 
authority to grant or deny approval is delegated to the Governor for 
programs funded under sections 127 or 132 of the Act.
    (1) Allowable costs for State, local, and Indian tribal government 
organizations must be determined under OMB Circular A-87, ``Cost 
Principles for State, Local and Indian Tribal Governments.''
    (2) Allowable costs for non-profit organizations must be determined 
under OMB Circular A-122, ``Cost Principles for Non-Profit 
Organizations.''
    (3) Allowable costs for institutions of higher education must be 
determined under OMB Circular A-21, ``Cost Principles for Educational 
Institutions.''
    (4) Allowable costs for hospitals must be determined in accordance 
under appendix E of 45 CFR part 74, ``Principles for Determining Costs 
Applicable to Research and Development Under Grants and Contracts with 
Hospitals.''
    (5) Allowable costs for commercial organizations and those non-
profit organizations listed in Attachment C to OMB Circular A-122 must 
be determined under the provisions of the Federal Acquisition Regulation 
(FAR), at 48 CFR part 31.
    (6) For all types of entities, legal expenses for the prosecution of 
claims against the Federal Government, including appeals to an 
Administrative Law Judge, are unallowable.
    (d) Government-wide debarment and suspension, and government-wide 
drug-free workplace requirements. All WIA title I grant recipients and 
subrecipients must comply with the government-wide requirements for 
debarment and suspension, and the government-wide requirements for a 
drug-free workplace, codified at 29 CFR part 98.
    (e) Restrictions on lobbying. All WIA title I grant recipients and 
subrecipients must comply with the restrictions on lobbying which are 
codified in the DOL regulations at 29 CFR part 93.
    (f) Nondiscrimination. All WIA title I recipients, as the term is 
defined in 29 CFR 37.4, must comply with the nondiscrimination and equal 
opportunity provisions of WIA section 188 and its implementing 
regulations found at 29 CFR part 37. Information on the handling of 
discrimination complaints by participants and other interested parties 
may be found in 29 CFR 37.70 through 37.80, and in Sec.  667.600(g).
    (g) Nepotism. (1) No individual may be placed in a WIA employment 
activity if a member of that person's immediate family is directly 
supervised by or directly supervises that individual.
    (2) To the extent that an applicable State or local legal 
requirement regarding nepotism is more restrictive than this provision, 
such State or local requirement must be followed.

[65 FR 49421, Aug. 11, 2000, as amended at 71 FR 35523, June 21, 2006]



Sec.  667.210  What administrative cost limits apply to Workforce
Investment Act title I grants?

    (a) Formula grants to States:
    (1) As part of the 15 percent that a State may reserve for Statewide 
activities, the State may spend up to five percent (5%) of the amount 
allotted under sections 127(b)(1), 132(b)(1) and 132(b)(2) of the Act 
for the administrative costs of Statewide workforce investment 
activities.
    (2) Local area expenditures for administrative purposes under WIA 
formula grants are limited to no more than ten percent (10%) of the 
amount allocated to the local area under sections 128(b) and 133(b) of 
the Act.
    (3) Neither the five percent (5%) of the amount allotted that may be 
reserved for Statewide administrative costs nor the ten percent (10%) of 
the amount allotted that may be reserved for local administrative costs 
needs to be allocated back to the individual funding streams.

[[Page 101]]

    (b) Limits on administrative costs for programs operated under 
subtitle D of title I will be identified in the grant or contract award 
document.
    (c) In a One-Stop environment, administrative costs borne by other 
sources of funds, such as the Wagner-Peyser Act, are not included in the 
administrative cost limit calculation. Each program's administrative 
activities area chargeable to its own grant and subject to its own 
administrative cost limitations.



Sec.  667.220  What Workforce Investment Act title I functions
and activities constitute the costs of administration subject to
the administrative cost limit?

    (a) The costs of administration are that allocable portion of 
necessary and reasonable allowable costs of State and local workforce 
investment boards, direct recipients, including State grant recipients 
under subtitle B of title I and recipients of awards under subtitle D of 
title I, as well as local grant recipients, local grant subrecipients, 
local fiscal agents and one-stop operators that are associated with 
those specific functions identified in paragraph (b) of this section and 
which are not related to the direct provision of workforce investment 
services, including services to participants and employers. These costs 
can be both personnel and non-personnel and both direct and indirect.
    (b) The costs of administration are the costs associated with 
performing the following functions:
    (1) Performing the following overall general administrative 
functions and coordination of those functions under WIA title I:
    (i) Accounting, budgeting, financial and cash management functions;
    (ii) Procurement and purchasing functions;
    (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 information 
systems, required for these administrative functions;
    (2) Performing oversight and monitoring responsibilities related to 
WIA administrative functions;
    (3) Costs of goods and services required for administrative 
functions of the program, including goods and services such as rental or 
purchase of equipment, utilities, office supplies, postage, and rental 
and maintenance of office space;
    (4) Travel costs incurred for official business in carrying out 
administrative activities or the overall management of the WIA system; 
and
    (5) Costs of information systems related to administrative functions 
(for example, personnel, procurement, purchasing, property management, 
accounting and payroll systems) including the purchase, systems 
development and operating costs of such systems.
    (c)(1) Awards to subrecipients or vendors that are solely for the 
performance of administrative functions are classified as administrative 
costs.
    (2) Personnel and related non-personnel costs of staff who perform 
both administrative functions specified in paragraph (b) of this section 
and programmatic services or activities must be allocated as 
administrative or program costs to the benefitting cost objectives/
categories based on documented distributions of actual time worked or 
other equitable cost allocation methods.
    (3) Specific costs charged to an overhead or indirect cost pool that 
can be identified directly as a program cost are to be charged as a 
program cost. Documentation of such charges must be maintained.
    (4) Except as provided at paragraph (c)(1), all costs incurred for 
functions and activities of subrecipients and vendors are program costs.
    (5) Costs of the following information systems including the 
purchase, systems development and operating (e.g., data entry) costs are 
charged to the program category:
    (i) Tracking or monitoring of participant and performance 
information;
    (ii) Employment statistics information, including job listing 
information,

[[Page 102]]

job skills information, and demand occupation information;
    (iii) Performance and program cost information on eligible providers 
of training services, youth activities, and appropriate education 
activities;
    (iv) Local area performance information; and
    (v) Information relating to supportive services and unemployment 
insurance claims for program participants;
    (6) Continuous improvement activities are charged to administration 
or program category based on the purpose or nature of the activity to be 
improved. Documentation of such charges must be maintained.



Sec.  667.250  What requirements relate to the enforcement of the
Military Selective Service Act?

    The requirements relating to the enforcement of the Military 
Selective Service Act are found at WIA section 189(h).



Sec.  667.255  Are there special rules that apply to veterans
when income is a factor in eligibility determinations?

    Yes, under 38 U.S.C. 4213, when past income is an eligibility 
determinant for Federal employment or training programs, any amounts 
received as military pay or allowances by any person who served on 
active duty, and certain other specified benefits must be disregarded. 
This applies when determining if a person is a ``low-income individual'' 
for eligibility purposes, (for example, in the WIA youth, Job Corps, or 
NFJP programs) and applies if income is used as a factor in applying the 
priority provision, under 20 CFR 663.600, when WIA adult funds are 
limited. Questions regarding the application of 38 U.S.C. 4213 should be 
directed to the Veterans Employment and Training Service.



Sec.  667.260  May WIA title I funds be spent for construction?

    WIA title I funds must not be spent on construction or purchase of 
facilities or buildings except:
    (a) To meet a recipient's, as the term is defined in 29 CFR 37.4, 
obligation to provide physical and programmatic accessibility and 
reasonable accommodation, as required by section 504 of the 
Rehabilitation Act of 1973, as amended, and the Americans with 
Disabilities Act of 1990, as amended;
    (b) To fund repairs, renovations, alterations and capital 
improvements of property, including:
    (1) SESA real property, identified at WIA section 193, using a 
formula that assesses costs proportionate to space utilized;
    (2) JTPA owned property which is transferred to WIA title I 
programs;
    (c) Job Corps facilities, as authorized by WIA section 160(3)(B); 
and
    (d) To fund disaster relief employment on projects for demolition, 
cleaning, repair, renovation, and reconstruction of damaged and 
destroyed structures, facilities, and lands located within a disaster 
area. (WIA sec. 173(d).)



Sec.  667.262  Are employment generating activities, or similar
activities, allowable under WIA title I?

    (a) Under WIA section 181(e), WIA title I funds may not be spent on 
employment generating activities, economic development, and other 
similar activities, unless they are directly related to training for 
eligible individuals. For purposes of this section, employer outreach 
and job development activities are directly related to training for 
eligible individuals.
    (b) These employer outreach and job development activities include:
    (1) Contacts with potential employers for the purpose of placement 
of WIA participants;
    (2) Participation in business associations (such as chambers of 
commerce); joint labor management committees, labor associations, and 
resource centers;
    (3) WIA staff participation on economic development boards and 
commissions, and work with economic development agencies, to:
    (i) Provide information about WIA programs,
    (ii) Assist in making informed decisions about community job 
training needs, and
    (iii) Promote the use of first source hiring agreements and 
enterprise zone vouchering services,

[[Page 103]]

    (4) Active participation in local business resource centers 
(incubators) to provide technical assistance to small and new business 
to reduce the rate of business failure;
    (5) Subscriptions to relevant publications;
    (6) General dissemination of information on WIA programs and 
activities;
    (7) The conduct of labor market surveys;
    (8) The development of on-the-job training opportunities; and
    (9) Other allowable WIA activities in the private sector. (WIA sec. 
181(e).)



Sec.  667.264  What other activities are prohibited under title I of WIA?

    (a) WIA title I funds must not be spent on:
    (1) The wages of incumbent employees during their participation in 
economic development activities provided through a Statewide workforce 
investment system, (WIA sec. 181(b)(1).);
    (2) Public service employment, except to provide disaster relief 
employment, as specifically authorized in section 173(d) of WIA, (WIA 
sec. 195(10));
    (3) Expenses prohibited under any other Federal, State or local law 
or regulation.
    (b) WIA formula funds available to States and local areas under 
subtitle B, title I of WIA must not be used for foreign travel. (WIA 
sec. 181(e).)



Sec.  667.266  What are the limitations related to religious
activities?

    (a) Limitations related to sectarian activities are set forth at WIA 
section 188(a)(3) and 29 CFR 37.6(f).
    (b)(1) 29 CFR part 2, subpart D governs the circumstances under 
which DOL support, including WIA Title I financial assistance, may be 
used to employ or train participants in religious activities. Under that 
subpart, such assistance may be used for such employment or training 
only when the assistance is provided indirectly within the meaning of 
the Establishment Clause of the U.S. Constitution, and not when the 
assistance is provided directly. As explained in that subpart, 
assistance provided through an Individual Training Account is generally 
considered indirect, and other mechanisms may also be considered 
indirect. See also 20 CFR 667.275 and 29 CFR 37.6(f)(1). 29 CFR part 2, 
subpart D also contains requirements related to equal treatment in 
Department of Labor programs for religious organizations, and to 
protecting the religious liberty of Department of Labor social service 
providers and beneficiaries.
    (2) Limitations on the employment of participants under WIA Title I 
to carry out the construction, operation, or maintenance of any part of 
any facility used or to be used for religious instruction or as a place 
for religious worship are described at 29 CFR 37.6(f)(2).

[65 FR 49421, Aug. 11, 2000, as amended at 69 FR 41891, July 12, 2004]



Sec.  667.268  What prohibitions apply to the use of WIA 
title I funds to encourage business relocation?

    (a) WIA funds may not be used or proposed to be used for:
    (1) The encouragement or inducement of a business, or part of a 
business, to relocate from any location in the United States, if the 
relocation results in any employee losing his or her job at the original 
location;
    (2) Customized training, skill training, or on-the-job training or 
company specific assessments of job applicants or employees of a 
business or a part of a business that has relocated from any location in 
the United States, until the company has operated at that location for 
120 days, if the relocation has resulted in any employee losing his or 
her jobs at the original location.
    (b) Pre-award review. To verify that an establishment which is new 
or expanding is not, in fact, relocating employment from another area, 
standardized pre-award review criteria developed by the State must be 
completed and documented jointly by the local area with the 
establishment as a prerequisite to WIA assistance.
    (1) The review must include names under which the establishment does 
business, including predecessors and successors in interest; the name, 
title, and address of the company official certifying the information, 
and whether WIA assistance is sought in connection with past or 
impending job losses at other facilities, including a review of whether 
WARN notices relating to the employer have been filed.

[[Page 104]]

    (2) The review may include consultations with labor organizations 
and others in the affected local area(s). (WIA sec. 181(d).)



Sec.  667.269  What procedures and sanctions apply to violations
of Sec. Sec.  667.260 through 667.268?

    (a) We will promptly review and take appropriate action on alleged 
violations of the provisions relating to:
    (1) Employment generating activities (Sec.  667.262);
    (2) Other prohibited activities (Sec.  667.264);
    (3) The limitation related to sectarian activities (Sec.  667.266);
    (4) The use of WIA title I funds to encourage business relocation 
(Sec.  667.268).
    (b) Procedures for the investigation and resolution of the 
violations are provided for under the Grant Officer's resolution process 
at Sec.  667.510. Sanctions and remedies are provided for under WIA 
section 184(c) for violations of the provisions relating to:
    (1) Construction (Sec.  667.260);
    (2) Employment generating activities (Sec.  667.262);
    (3) Other prohibited activities (Sec.  667.264); and
    (4) The limitation related to sectarian activities (Sec.  
667.266(b)(1)).
    (c) Sanctions and remedies are provided for in WIA section 181(d)(3) 
for violations of Sec.  667.268, which addresses business relocation.
    (d) Violations of Sec.  667.266(b)(2) will be handled in accordance 
with the DOL nondiscrimination regulations implementing WIA section 188, 
codified at 29 CFR part 37.



Sec.  667.270  What safeguards are there to ensure that
participants in Workforce Investment Act employment and 
training activities do not displace other employees?

    (a) A participant in a program or activity authorized under title I 
of WIA must not displace (including a partial displacement, such as a 
reduction in the hours of non-overtime work, wages, or employment 
benefits) any currently employed employee (as of the date of the 
participation).
    (b) A program or activity authorized under title I of WIA must not 
impair existing contracts for services or collective bargaining 
agreements. When a program or activity authorized under title I of WIA 
would be inconsistent with a collective bargaining agreement, the 
appropriate labor organization and employer must provide written 
concurrence before the program or activity begins.
    (c) A participant in a program or activity under title I of WIA may 
not be employed in or assigned to a job if:
    (1) Any other individual is on layoff from the same or any 
substantially equivalent job;
    (2) The employer has terminated the employment of any regular, 
unsubsidized employee or otherwise caused an involuntary reduction in 
its workforce with the intention of filling the vacancy so created with 
the WIA participant; or
    (3) The job is created in a promotional line that infringes in any 
way on the promotional opportunities of currently employed workers.
    (d) Regular employees and program participants alleging displacement 
may file a complaint under the applicable grievance procedures found at 
Sec.  667.600. (WIA sec. 181.)



Sec.  667.272  What wage and labor standards apply to 
participants in activities under title I of WIA?

    (a) Individuals in on-the-job training or individuals employed in 
activities under title I of WIA must be compensated at the same rates, 
including periodic increases, as trainees or employees who are similarly 
situated in similar occupations by the same employer and who have 
similar training, experience and skills. Such rates must be in 
accordance with applicable law, but may not be less than the higher of 
the rate specified in section 6(a)(1) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(a)(1)) or the applicable State or local minimum wage 
law.
    (b) Individuals in on-the-job training or individuals employed in 
programs and activities under Title I of WIA must be provided benefits 
and working conditions at the same level and to the same extent as other 
trainees or employees working a similar length of time and doing the 
same type of work.
    (c) Allowances, earnings, and payments to individuals participating 
in programs under Title I of WIA are not

[[Page 105]]

considered as income for purposes of determining eligibility for and the 
amount of income transfer and in-kind aid furnished under any Federal or 
Federally assisted program based on need other than as provided under 
the Social Security Act (42 U.S.C. 301 et seq.). (WIA sec. 181(a)(2).)



Sec.  667.274  What health and safety standards apply to the 
working conditions of participants in activities under title I
of WIA?

    (a) Health and safety standards established under Federal and State 
law otherwise applicable to working conditions of employees are equally 
applicable to working conditions of participants engaged in programs and 
activities under Title I of WIA.
    (b)(1) To the extent that a State workers' compensation law applies, 
workers' compensation must be provided to participants in programs and 
activities under Title I of WIA on the same basis as the compensation is 
provided to other individuals in the State in similar employment.
    (2) If a State workers' compensation law applies to a participant in 
work experience, workers' compensation benefits must be available for 
injuries suffered by the participant in such work experience. If a State 
workers' compensation law does not apply to a participant in work 
experience, insurance coverage must be secured for injuries suffered by 
the participant in the course of such work experience.



Sec.  667.275  What are a recipient's obligations to ensure
nondiscrimination and equal opportunity, and what are a 
recipient's obligations with respect to religious activities?

    (a)(1) Recipients, as defined in 29 CFR 37.4, must comply with the 
nondiscrimination and equal opportunity provisions of WIA section 188 
and its implementing regulations, codified at 29 CFR part 37. Under that 
definition, the term ``recipients'' includes State and Local Workforce 
Investment Boards, One-Stop operators, service providers, vendors, and 
subrecipients, as well as other types of individuals and entitites.
    (2) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, are 
governed by the regulations implementing WIA section 188, codified at 29 
CFR part 37, and are administered and enforced by the DOL Civil Rights 
Center.
    (3) As described in Sec.  667.260(a), financial assistance provided 
under WIA title I may be used to meet a recipient's obligation to 
provide physical and programmatic accessibility and reasonable 
accommodation/modification in regard to the WIA program, as required by 
section 504 of the Rehabilitation Act of 1973, as amended, the Americans 
with Disabilities Act of 1990, as amended, section 188 of WIA, and the 
regulations implementing these statutory provisions.
    (b) 29 CFR part 2, subpart D governs the circumstances under which 
recipients may use DOL support, including WIA Title I financial 
assistance, to employ or train participants in religious activities. 
Under that subpart, such assistance may be used for such employment or 
training only when the assistance is provided indirectly within the 
meaning of the Establishment Clause of the U.S. Constitution, and not 
when the assistance is provided directly. As explained in that subpart, 
assistance provided through an Individual Training Account is generally 
considered indirect, and other mechanisms may also be considered 
indirect. See also 20 CFR 667.266 and 29 CFR 37.6(f)(1). 29 CFR part 2, 
subpart D also contains requirements related to equal treatment of 
religious organizations in Department of Labor programs, and to 
protection of religious liberty of Department of Labor social service 
providers and beneficiaries. Limitations on the employment of 
participants under WIA Title I to carry out the construction, operation, 
or maintenance of any part of any facility used or to be used for 
religious instruction or as a place of religious worship are described 
at 29 CFR 37.6(f)(2). See section 188(a)(3) of the Workforce Investment 
Act of 1998, 29 U.S.C. 2938(a)(3).

[65 FR 49421, Aug. 11, 2000, as amended at 69 FR 41891, July 12, 2004]

[[Page 106]]



                    Subpart C_Reporting Requirements



Sec.  667.300  What are the reporting requirements for
Workforce Investment Act programs?

    (a) General. All States and other direct grant recipients must 
report financial, participant, and performance data in accordance with 
instructions issued by DOL. Required reports must be submitted no more 
frequently than quarterly within a time period specified in the 
reporting instructions.
    (b) Subrecipient reporting. (1) A State or other direct grant 
recipient may impose different forms or formats, shorter due dates, and 
more frequent reporting requirements on subrecipients. However, the 
recipient is required to meet the reporting requirements imposed by DOL.
    (2) If a State intends to impose different reporting requirements, 
it must describe those reporting requirements in its State WIA plan.
    (c) Financial reports. (1) Each grant recipient must submit 
financial reports.
    (2) Reports must include any income or profits earned, including 
such income or profits earned by subrecipients, and any costs incurred 
(such as stand-in costs) that are otherwise allowable except for funding 
limitations. (WIA sec. 185(f)(2))
    (3) Reported expenditures and program income, including any profits 
earned, must be on the accrual basis of accounting and cumulative by 
fiscal year of appropriation. If the recipient's accounting records are 
not normally kept on the accrual basis of accounting, the recipient must 
develop accrual information through an analysis of the documentation on 
hand.
    (d) Due date. Financial reports and participant data reports are due 
no later than 45 days after the end of each quarter unless otherwise 
specified in reporting instructions. A final financial report is 
required 90 days after the expiration of a funding period or the 
termination of grant support.
    (e) Annual performance progress report. An annual performance 
progress report for each of the three programs under title I, subpart B 
is required by WIA section 136(d).
    (1) A State failing to submit any of these annual performance 
progress reports within 45 days of the due date may have its grant (for 
that program or all title I, subpart B programs) for the succeeding year 
reduced by as much as five percent, as provided by WIA section 
136(g)(1)(B).
    (2) States submitting annual performance progress reports that 
cannot be validated or verified as accurately counting and reporting 
activities in accordance with the reporting instructions, may be treated 
as failing to submit annual reports, and be subject to sanction. 
Sanctions related to State performance or failure to submit these 
reports timely cannot result in a total grant reduction of more than 
five percent. Any sanction would be in addition to having to repay the 
amount of any incentive funds granted based on the invalid report.



                   Subpart D_Oversight and Monitoring



Sec.  667.400  Who is responsible for oversight and monitoring
of WIA title I grants?

    (a) The Secretary is authorized to monitor all recipients and 
subrecipients of all grants awarded and funds expended under WIA title I 
to determine compliance with the Act and the WIA regulations, and may 
investigate any matter deemed necessary to determine such compliance. 
Federal oversight will be conducted primarily at the recipient level.
    (b) In each fiscal year, we will also conduct in-depth reviews in 
several States, including financial and performance audits, to assure 
that funds are spent in accordance with the Act. Priority for such in-
depth reviews will be given to States not meeting annual adjusted levels 
of performance.
    (c)(1) Each recipient and subrecipient must continuously monitor 
grant-supported activities in accordance with the uniform administrative 
requirements at 29 CFR parts 95 and 97, as applicable, including the 
applicable cost principles indicated at 29 CFR 97.22(b) or 29 CFR 95.27, 
for all entities receiving WIA title I funds. For governmental units, 
the applicable requirements are at 29 CFR part 97. For non-

[[Page 107]]

profit organizations, the applicable requirements are at 29 CFR part 95.
    (2) In the case of grants under WIA sections 127 and 132, the 
Governor must develop a State monitoring system that meets the 
requirements of Sec.  667.410(b). The Governor must monitor Local Boards 
annually for compliance with applicable laws and regulations in 
accordance with the State monitoring system. Monitoring must include an 
annual review of each local area's compliance with the uniform 
administrative requirements.



Sec.  667.410  What are the oversight roles and responsibilities
of recipients and subrecipients?

    (a) Roles and responsibilities for all recipients and subrecipients 
of funds under WIA title I in general. Each recipient and subrecipient 
must conduct regular oversight and monitoring of its WIA activities and 
those of its subrecipients and contractors in order to:
    (1) Determine that expenditures have been made against the cost 
categories and within the cost limitations specified in the Act and the 
regulations in this part;
    (2) Determine whether or not there is compliance with other 
provisions of the Act and the WIA regulations and other applicable laws 
and regulations; and
    (3) Provide technical assistance as necessary and appropriate.
    (b) State roles and responsibilities for grants under WIA sections 
127 and 132. (1) The Governor is responsible for the development of the 
State monitoring system. The Governor must be able to demonstrate, 
through a monitoring plan or otherwise, that the State monitoring system 
meets the requirements of paragraph (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 uniform administrative requirements, as required by 
WIA section 184(a)(4);
    (ii) Ensure that established policies to achieve program quality and 
outcomes meet the objectives of the Act and the WIA regulations, 
including policies relating to: the provision of services by One-Stop 
Centers; eligible providers of training services; and eligible providers 
of youth activities;
    (iii) Enable the Governor to determine if subrecipients and 
contractors have demonstrated substantial compliance with WIA 
requirements; and
    (iv) Enable the Governor to determine whether a local plan will be 
disapproved for failure to make acceptable progress in addressing 
deficiencies, as required in WIA section 118(d)(1).
    (v) Enable the Governor to ensure compliance with the 
nondiscrimination and equal opportunity requirements of WIA section 188 
and 29 CFR part 37. Requirements for these aspects of the monitoring 
system are set forth in 29 CFR 37.54(d)(2)(ii).
    (3) The State must conduct an annual on-site monitoring review of 
each local area's compliance with DOL uniform administrative 
requirements, including the appropriate administrative requirements for 
subrecipients and the applicable cost principles indicated at Sec.  
667.200 for all entities receiving WIA title I funds.
    (4) The Governor must require that prompt corrective action be taken 
if any substantial violation of standards identified in paragraphs (b) 
(2) or (3) of this section is found. (WIA sec. 184(a)(5).)
    (5) The Governor must impose the sanctions provided in WIA section 
184 (b) and (c) in the event of a subrecipient's failure to take 
required corrective action required under paragraph (b)(4) of this 
section.
    (6) The Governor may issue additional requirements and instructions 
to subrecipients on monitoring activities.
    (7) The Governor must certify to the Secretary every two years that:
    (i) The State has implemented uniform administrative requirements;
    (ii) The State has monitored local areas to ensure compliance with 
uniform administrative requirements; and
    (iii) The State has taken appropriate corrective action to secure 
such compliance. (WIA sec. 184(a)(6)(A), (B), and (C).)

[[Page 108]]



 Subpart E_Resolution of Findings From Monitoring and 
 Oversight Reviews



Sec.  667.500  What procedures apply to the resolution of 
findings arising from audits, investigations, monitoring and 
oversight reviews?

    (a) Resolution of subrecipient-level findings. (1) The Governor is 
responsible for resolving findings that arise from the State's 
monitoring reviews, investigations and audits (including OMB Circular A-
133 audits) of subrecipients.
    (2) A State must utilize the audit resolution, debt collection and 
appeal procedures that it uses for other Federal grant programs.
    (3) If a State does not have such procedures, it must prescribe 
standards and procedures to be used for this grant program.
    (b) Resolution of State and other direct recipient level findings. 
(1) The Secretary is responsible for resolving findings that arise from 
Federal audits, monitoring reviews, investigations, incident reports, 
and recipient level OMB Circular A-133 audits.
    (2) The Secretary uses the DOL audit resolution process, consistent 
with the Single Audit Act of 1996 and OMB Circular A-133, and Grant 
Officer Resolution provisions of Sec.  667.510, as appropriate.
    (3) A final determination issued by a Grant Officer under this 
process may be appealed to the DOL Office of Administrative Law Judges 
under the procedures at Sec.  667.800.
    (c) Resolution of nondiscrimination findings. Findings arising from 
investigations or reviews conducted under nondiscrimination laws will be 
resolved in accordance with WIA section 188 and the Department of Labor 
nondiscrimination regulations implementing WIA section 188, codified at 
29 CFR part 37.



Sec.  667.505  How do we resolve investigative and monitoring findings?

    (a) As a result of an investigation, on-site visit or other 
monitoring, we notify the recipient of the findings of the investigation 
and gives the recipient a period of time (not more than 60 days) to 
comment and to take appropriate corrective actions.
    (b) The Grant Officer reviews the complete file of the investigation 
or monitoring report and the recipient's actions under paragraph (a) of 
this section. The Grant Officer's review takes into account the sanction 
provisions of WIA section 184(b) and (c). If the Grant Officer agrees 
with the recipient's handling of the situation, the Grant Officer so 
notifies the recipient. This notification constitutes final agency 
action.
    (c) If the Grant Officer disagrees with the recipient's handling of 
the matter, the Grant Officer proceeds under Sec.  667.510.



Sec.  667.510  What is the Grant Officer resolution process?

    (a) General. When the Grant Officer is dissatisfied with the State's 
disposition of an audit or other resolution of violations (including 
those arising out of incident reports or compliance reviews), or with 
the recipient's response to findings resulting from investigations or 
monitoring report, the initial and final determination process, set 
forth in this section, is used to resolve the matter.
    (b) Initial determination. The Grant Officer makes an initial 
determination on the findings for both those matters where there is 
agreement and those where there is disagreement with the recipient's 
resolution, including the allowability of questioned costs or 
activities. This initial determination is based upon the requirements of 
the Act and regulations, and the terms and conditions of the grants, 
contracts, or other agreements under the Act.
    (c) Informal resolution. Except in an emergency situation, when the 
Secretary invokes the authority described in WIA section 184(e), the 
Grant Officer may not revoke a recipient's grant in whole or in part, 
nor institute corrective actions or sanctions, without first providing 
the recipient with an opportunity to present documentation or arguments 
to resolve informally those matters in controversy contained in the 
initial determination. The initial determination must provide for an 
informal resolution period of at least 60 days from issuance of the 
initial determination. If the matters are resolved informally, the Grant 
Officer must

[[Page 109]]

issue a final determination under paragraph (d) of this section which 
notifies the parties in writing of the nature of the resolution and may 
close the file.
    (d) Grant Officer's final determination. (1) If the matter is not 
fully resolved informally, the Grant Officer provides each party with a 
written final determination by certified mail, return receipt requested. 
For audits of recipient-level entities and other recipients which 
receive WIA funds directly from DOL, ordinarily, the final determination 
is issued not later than 180 days from the date that the Office of 
Inspector General (OIG) issues the final approved audit report to the 
Employment and Training Administration. For audits of subrecipients 
conducted by the OIG, ordinarily the final determination is issued not 
later than 360 days from the date the OIG issues the final approved 
audit report to ETA.
    (2) A final determination under this paragraph (d) must:
    (i) Indicate whether efforts to informally resolve matters contained 
in the initial determination have been unsuccessful;
    (ii) List those matters upon which the parties continue to disagree;
    (iii) List any modifications to the factual findings and conclusions 
set forth in the initial determination and the 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 Sec.  
667.800 of this part.
    (3) Unless a hearing is requested, a final determination under this 
paragraph (d) is final agency action and is not subject to further 
review.
    (e) Nothing in this subpart precludes the Grant Officer from issuing 
an initial determination and/or final determination directly to a 
subrecipient, in accordance with section 184(d)(3) of the Act. In such a 
case, the Grant Officer will inform the recipient of this action.



 Subpart F_Grievance Procedures, Complaints, and State Appeals Processes



Sec.  667.600  What local area, State and direct recipient
grievance procedures must be established?

    (a) Each local area, State and direct recipient of funds under title 
I of WIA, except for Job Corps, must establish and maintain a procedure 
for grievances and complaints according to the requirements of this 
section. The grievance procedure requirements applicable to Job Corps 
are set forth at 20 CFR 670.990.
    (b) Each local area, State, and direct recipient must:
    (1) Provide information about the content of the grievance and 
complaint procedures required by this section to participants and other 
interested parties affected by the local Workforce Investment System, 
including One-Stop partners and service providers;
    (2) Require that every entity to which it awards Title I funds must 
provide the information referred to in paragraph (b)(1) of this section 
to participants receiving Title I-funded services from such entities; 
and
    (3) Must make reasonable efforts to assure that the information 
referred to in paragraph (b)(1) of this section will be understood by 
affected participants and other individuals, including youth and those 
who are limited-English speaking individuals. Such efforts must comply 
with the language requirements of 29 CFR 37.35 regarding the provision 
of services and information in languages other than English.
    (c) Local area procedures must provide:
    (1) A process for dealing with grievances and complaints from 
participants and other interested parties affected by the local 
Workforce Investment System, including One-Stop partners and service 
providers;
    (2) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint;
    (3) A process which allows an individual alleging a labor standards 
violation to submit the grievance to a binding arbitration procedure, if 
a collective bargaining agreement covering the

[[Page 110]]

parties to the grievance so provides; and
    (4) An opportunity for a local level appeal to a State entity when:
    (i) No decision is reached within 60 days; or
    (ii) Either party is dissatisfied with the local hearing decision.
    (d) State procedures must provide:
    (1) A process for dealing with grievances and complaints from 
participants and other interested parties affected by the Statewide 
Workforce Investment programs;
    (2) A process for resolving appeals made under paragraph (c)(4) of 
this section;
    (3) A process for remanding grievances and complaints related to the 
local Workforce Investment Act programs to the local area grievance 
process; and
    (4) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint.
    (e) Procedures of direct recipients must provide:
    (1) A process for dealing with grievance and complaints from 
participants and other interested parties affected by the recipient's 
Workforce Investment Act programs; and
    (2) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint.
    (f) The remedies that may be imposed under local, State and direct 
recipient grievance procedures are enumerated at WIA section 181(c)(3).
    (g)(1) The provisions of this section on grievance procedures do not 
apply to discrimination complaints brought under WIA section 188 and/or 
29 CFR part 37. Such complaints must be handled in accordance with the 
procedures set forth in that regulatory part.
    (2) Questions about or complaints alleging a violation of the 
nondiscrimination provisions of WIA section 188 may be directed or 
mailed to the Director, Civil Rights Center, U.S. Department of Labor, 
Room N4123, 200 Constitution Avenue, NW, Washington, D.C. 20210, for 
processing.
    (h) Nothing in this subpart precludes a grievant or complainant from 
pursuing a remedy authorized under another Federal, State or local law.



Sec.  667.610  What processes do we use to review State and local
grievances and complaints?

    (a) We investigate allegations arising through the grievance 
procedures described in Sec.  667.600 when:
    (1) A decision on a grievance or complaint under Sec.  667.600(d) 
has not been reached within 60 days of receipt of the grievance or 
complaint or within 60 days of receipt of the request for appeal of a 
local level grievance and either party appeals to the Secretary; or
    (2) A decision on a grievance or complaint under Sec.  667.600(d) 
has been reached and the party to which such decision is adverse appeals 
to the Secretary.
    (b) We must make a final decision on an appeal under paragraph (a) 
of this section no later than 120 days after receiving the appeal.
    (c) Appeals made under paragraph (a)(2) of this section must be 
filed within 60 days of the receipt of the decision being appealed. 
Appeals made under paragraph (a)(1) of this section must be filed within 
120 days of the filing of the grievance with the State, or the filing of 
the appeal of a local grievance with the State. All appeals must be 
submitted by certified mail, return receipt requested, to the Secretary, 
U.S. Department of Labor, Washington, DC 20210, Attention: ASET. A copy 
of the appeal must be simultaneously provided to the appropriate ETA 
Regional Administrator and the opposing party.
    (d) Except for complaints arising under WIA section 184(f) or 
section 188, grievances or complaints made directly to the Secretary 
will be referred to the appropriate State or local area for resolution 
in accordance with this section, unless we notify the parties that the 
Department of Labor will investigate the grievance under the procedures 
at Sec.  667.505. Discrimination complaints brought under WIA section 
188 or 29 CFR part 37 will be referred to the Director of the Civil 
Rights Center.

[[Page 111]]



Sec.  667.630  How are complaints and reports of criminal fraud
and abuse addressed under WIA?

    Information and complaints involving criminal fraud, waste, abuse or 
other criminal activity must be reported immediately through the 
Department's Incident Reporting System to the DOL Office of Inspector 
General, Office of Investigations, Room S5514, 200 Constitution Avenue 
NW., Washington, D.C. 20210, or to the corresponding Regional Inspector 
General for Investigations, with a copy simultaneously provided to the 
Employment and Training Administration. The Hotline number is 1-800-347-
3756. Complaints of a non-criminal nature are handled under the 
procedures set forth in Sec.  667.505 or through the Department's 
Incident Reporting System.



Sec.  667.640  What additional appeal processes or systems must
a State have for the WIA program?

    (a) Non-designation of local areas: (1) The State must establish, 
and include in its State Plan, due process procedures which provide 
expeditious appeal to the State Board for a unit or combination of units 
of general local government or a rural concentrated employment program 
grant recipient (as described at WIA section 116(a)(2)(B)) that 
requests, but is not granted, automatic or temporary and subsequent 
designation as a local workforce investment area under WIA section 
116(a)(2) or 116(a)(3).
    (2) These procedures must provide an opportunity for a hearing and 
prescribe appropriate time limits to ensure prompt resolution of the 
appeal.
    (3) If the appeal to the State Board does not result in designation, 
the appellant may request review by the Secretary under Sec.  667.645.
    (4) If the Secretary determines that the appellant was not accorded 
procedural rights under the appeal process established in paragraph 
(a)(1) of this section, or that the area meets the requirements for 
designation at WIA section 116(a)(2) or 116(a)(3), the Secretary may 
require that the area be designated as a workforce investment area.
    (b) Denial or termination of eligibility as a training provider. (1) 
A State must establish procedures which allow providers of training 
services the opportunity to appeal:
    (i) Denial of eligibility by a Local Board or the designated State 
agency under WIA section 122 (b), (c) or (e);
    (ii) Termination of eligibility or other action by a Local Board or 
State agency under WIA section 122(f); or
    (iii) Denial of eligibility as a provider of on-the-job training 
(OJT) or customized training by a One-Stop operator under WIA section 
122(h).
    (2) Such procedures must provide an opportunity for a hearing and 
prescribe appropriate time limits to ensure prompt resolution of the 
appeal.
    (3) A decision under this State appeal process may not be appealed 
to the Secretary.
    (c) Testing and sanctioning for use of controlled substances. (1) A 
State must establish due process procedures which provide expeditious 
appeal for:
    (i) WIA participants subject to testing for use of controlled 
substances, imposed under a State policy established under WIA section 
181(f); and
    (ii) WIA participants who are sanctioned after testing positive for 
the use of controlled substances, under the policy described in 
paragraph (c)(1)(i) of this section.
    (2) A decision under this State appeal process may not be appealed 
to the Secretary.



Sec.  667.645  What procedures apply to the appeals of 
non-designation of local areas?

    (a) A unit or combination of units of general local government or 
rural concentrated employment program grant recipient (as described in 
WIA section 116(a)(2)(B)) whose appeal of the denial of a request for 
automatic or temporary and subsequent designation as a local workforce 
investment area to the State Board has not resulted in designation may 
appeal the denial of local area designation to the Secretary.
    (b) Appeals made under paragraph (a) of this section must be filed 
no later than 30 days after receipt of written notification of the 
denial from the State Board, and must be submitted by certified mail, 
return receipt requested, to the Secretary, U.S. Department of Labor, 
Washington, DC 20210,

[[Page 112]]

Attention: ASET. A copy of the appeal must be simultaneously provided to 
the State Board.
    (c) The appellant must establish that it was not accorded procedural 
rights under the appeal process set forth in the State Plan, or 
establish that it meets the requirements for designation in WIA section 
116(a)(2) or (a)(3). The Secretary may consider any comments submitted 
in response by the State Board.
    (d) If the Secretary determines that the appellant has met its 
burden of establishing that it was not accorded procedural rights under 
the appeal process set forth in the State Plan, or that it meets the 
requirements for designation in WIA section 116(a)(2) or (a)(3), the 
Secretary may require that the area be designated as a local workforce 
investment area.
    (e) The Secretary must issue a written decision to the Governor and 
the appellant.



Sec.  667.650  What procedures apply to the appeals of the 
Governor's imposition of sanctions for substantial violations or 
performance failures by a local area?

    (a) A local area which has been found in substantial violation of 
WIA title I, and has received notice from the Governor that either all 
or part of the local plan will be revoked or that a reorganization will 
occur, may appeal such sanctions to the Secretary under WIA section 
184(b). The sanctions do not become effective until:
    (1) The time for appeal has expired; or
    (2) The Secretary has issued a decision.
    (b) A local area which has failed to meet local performance measures 
for two consecutive years, and has received the Governor's notice of 
intent to impose a reorganization plan, may appeal such sanctions to the 
Secretary under WIA section 136(h)(1)(B).
    (c) Appeals made under paragraph (a) or (b) of this section must be 
filed no later than 30 days after receipt of written notification of the 
revoked plan or imposed reorganization, and must be submitted by 
certified mail, return receipt requested, to the Secretary, U.S. 
Department of Labor, Washington, DC 20210, Attention: ASET. A copy of 
the appeal must be simultaneously provided to the Governor.
    (d) The Secretary may consider any comments submitted in response by 
the Governor.
    (e) The Secretary will notify the Governor and the appellant in 
writing of the Secretary's decision under paragraph (a) of this section 
within 45 days after receipt of the appeal. The Secretary will notify 
the Governor and the appellant in writing of the Secretary's decision 
under paragraph (b) of this section within 30 days after receipt of the 
appeal.



    Subpart G_Sanctions, Corrective Actions, and Waiver of Liability



Sec.  667.700  What procedure do we use to impose sanctions
and corrective actions on recipients and subrecipients of WIA
grant funds?

    (a)(1) Except for actions under WIA section 188(a) or 29 CFR part 37 
(relating to nondiscrimination requirements), the Grant Officer uses the 
initial and final determination procedures outlined in Sec.  667.510 to 
impose a sanction or corrective action.
    (2) To impose a sanction or corrective action for a violation of WIA 
section 188(a) or 29 CFR part 37, the Department will use the procedures 
set forth in that regulatory part.
    (b) To impose a sanction or corrective action for noncompliance with 
the uniform administrative requirements set forth at section 184(a)(3) 
of WIA, and Sec.  667.200(a), when the Grant Officer determines that the 
Governor has not taken corrective action to remedy the violation as 
required by WIA section 184(a)(5), the Grant Officer, under the 
authority of WIA section 184(a)(7) and Sec.  667.710(c), must require 
the Governor to impose any of the corrective actions set forth at WIA 
section 184(b)(1). If the Governor fails to impose the corrective 
actions required by the Grant Officer, the Secretary may immediately 
suspend or terminate financial assistance in accordance with WIA section 
184(e).
    (c) For substantial violations of WIA statutory and regulatory 
requirements, if the Governor fails to promptly take the actions 
specified in WIA section 184(b)(1), the Grant Officer may impose

[[Page 113]]

such actions directly against the local area.
    (d) The Grant Officer may also impose a sanction directly against a 
subrecipient, as authorized in section 184(d)(3) of the Act. In such a 
case, the Grant Officer will inform the recipient of the action.



Sec.  667.705  Who is responsible for funds provided under 
title I of WIA?

    (a) The recipient is responsible for all funds under its grant(s).
    (b) The political jurisdiction(s) of the chief elected official(s) 
in a local workforce investment area is liable for any misuse of the WIA 
grant funds allocated to the local area under WIA sections 128 and 133, 
unless the chief elected official(s) reaches an agreement with the 
Governor to bear such liability.
    (c) When a local workforce area is composed of more than one unit of 
general local government, the liability of the individual jurisdictions 
must be specified in a written agreement between the chief elected 
officials.



Sec.  667.710  What actions are required to address the failure
of a local area to comply with the applicable uniform administrative 
provisions?

    (a) If, as part of the annual on-site monitoring of local areas, the 
Governor determines that a local area is not in compliance with the 
uniform administrative requirements found at 29 CFR part 95 or part 97, 
as appropriate, the Governor must:
    (1) Require corrective action to secure prompt compliance; and
    (2) Impose the sanctions provided for at section 184(b) if the 
Governor finds that the local area has failed to take timely corrective 
action.
    (b) An action by the recipient to impose a sanction against a local 
area, in accordance with this section, may be appealed to the Secretary 
in accordance with Sec.  667.650, and will not become effective until:
    (1) The time for appeal has expired; or
    (2) The Secretary has issued a decision.
    (c)(1) If the Secretary finds that the Governor has failed to 
monitor and certify compliance of local areas with the administrative 
requirements, under WIA section 184(a), or that the Governor has failed 
to promptly take the actions required upon a determination under 
paragraph (a) of this section that a local area is not in compliance 
with the uniform administrative requirements, the Secretary will require 
the Governor to take corrective actions against the State recipient or 
the local area, as appropriate to ensure prompt compliance.
    (2) If the Governor fails to take the corrective actions required by 
the Secretary under paragraph (c)(1) of this section, the Secretary may 
immediately suspend or terminate financial assistance under WIA section 
184(e).



Sec.  667.720  How do we handle a recipient's request for waiver
of liability under WIA section 184(d)(2)?

    (a) A recipient may request a waiver of liability, as described in 
WIA section 184(d)(2), and a Grant Officer may approve such a waiver 
under WIA section 184(d)(3).
    (b)(1) When the debt for which a waiver of liability is desired was 
established in a non-Federal resolution proceeding, the resolution 
report must accompany the waiver request.
    (2) When the waiver request is made during the ETA Grant Officer 
resolution process, the request must be made during the informal 
resolution period described in Sec.  667.510(c).
    (c) A waiver of the recipient's liability shall be considered by the 
Grant Officer only when:
    (1) The misexpenditure of WIA funds occurred at a subrecipient's 
level;
    (2) The misexpenditure was not due to willful disregard of the 
requirements of title I of the Act, gross negligence, failure to observe 
accepted standards of administration, or did not constitute fraud;
    (3) If fraud did exist, it was perpetrated against the recipient/
subrecipients; and
    (i) The recipient/subrecipients discovered, investigated, reported, 
and cooperated in any prosecution of the perpetrator of the fraud; and
    (ii) After aggressive debt collection action, it has been documented 
that further attempts at debt collection from the perpetrator of the 
fraud would be inappropriate or futile;

[[Page 114]]

    (4) The recipient has issued a final determination which disallows 
the misexpenditure, the recipient's appeal process has been exhausted, 
and a debt has been established; and
    (5) The recipient requests such a waiver and provides documentation 
to demonstrate that it has substantially complied with the requirements 
of section 184(d)(2) of the Act, and this section.
    (d) The recipient will not be released from liability for misspent 
funds under the determination required by section 184(d) of the Act 
unless the Grant Officer determines that further collection action, 
either by the recipient or subrecipients, would be inappropriate or 
would prove futile.



Sec.  667.730  What is the procedure to handle a recipient's request
for advance approval of contemplated corrective actions?

    (a) The recipient may request advance approval from the Grant 
Officer for contemplated corrective actions, including debt collection 
actions, which the recipient plans to initiate or to forego. The 
recipient's request must include a description and an assessment of all 
actions taken by the subrecipients to collect the misspent funds.
    (b) Based on the recipient's request, the Grant Officer may 
determine that the recipient may forego certain collection actions 
against a subrecipient when:
    (1) The subrecipient meets the criteria set 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 
WIA funds from that subrecipient;
    (ii) Was not a violation of section 184(d)(1) of the Act, and did 
not constitute 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 of the fraud; and
    (C) After aggressive debt collection action, it has been documented 
that further attempts at debt collection from the perpetrator of the 
fraud would be inappropriate or futile;
    (3) A final determination which disallows the misexpenditure and 
establishes a debt has been issued at the appropriate level;
    (4) Final action within the recipient's appeal system has been 
completed; and
    (5) Further debt collection action by that subrecipient or the 
recipient would be either inappropriate or futile.



Sec.  667.740  What procedure must be used for administering the
offset/deduction provisions at section 184(c) of the Act?

    (a)(1) For recipient level misexpenditures, we may determine that a 
debt, or a portion thereof, may be offset against amounts that are 
allotted to the recipient. Recipients must submit a written request for 
an offset to the Grant Officer. Generally, we will apply the offset 
against amounts that are available at the recipient level for 
administrative costs.
    (2) The Grant Officer may approve an offset request, under paragraph 
(a)(1) of this section, if the misexpenditures were not due to willful 
disregard of the requirements of the Act and regulations, gross 
negligence, failure to observe accepted standards of administration or a 
pattern of misexpenditure.
    (b) For subrecipient level misexpenditures that were not due to 
willful disregard of the requirements of the Act and regulations, gross 
negligence, failure to observe accepted standards of administration or a 
pattern of misexpenditure, if we have required the State to repay such 
amount the State may deduct an amount equal to the misexpenditure from 
its subsequent year's allocations to the local area from funds available 
for the administrative costs of the local programs involved.
    (c) If offset is granted, the debt will not be fully satisfied until 
the Grant Officer reduces amounts allotted to the State by the amount of 
the misexpenditure.
    (d) A State may not make a deduction under paragraph (b) of this 
section until the State has taken appropriate corrective action to 
ensure full compliance within the local area with regard

[[Page 115]]

to appropriate expenditure of WIA funds.



        Subpart H_Administrative Adjudication and Judicial Review



Sec.  667.800  What actions of the Department may be appealed to
the Office of Administrative Law Judges?

    (a) An applicant for financial assistance under title I of WIA which 
is dissatisfied because we have issued a determination not to award 
financial assistance, in whole or in part, to such applicant; or a 
recipient, subrecipient, or a vendor against which the Grant Officer has 
directly imposed a sanction or corrective action, including a sanction 
against a State under 20 CFR part 666, may appeal to the U.S. Department 
of Labor, Office of Administrative Law Judges (OALJ) within 21 days of 
receipt of the final determination.
    (b) Failure to request a hearing within 21 days of receipt of the 
final determination constitutes a waiver of the right to a hearing.
    (c) A request for a hearing under this subpart must state 
specifically those issues in the final determination upon which review 
is requested. Those provisions of the final determination not specified 
for review, or the entire final determination when no hearing has been 
requested within the 21 days, are considered resolved and not subject to 
further review. Only alleged violations of the Act, its regulations, 
grant or other agreement under the Act fairly raised in the 
determination, and the request for hearing are subject to review.
    (d) A request for a hearing must be transmitted by certified mail, 
return receipt requested, to the Chief Administrative Law Judge, U.S. 
Department of Labor, Suite 400, 800 K Street, NW., Washington, DC 20001, 
with one copy to the Departmental official who issued the determination.
    (e) The procedures in this subpart apply in the case of a 
complainant who has not had a dispute adjudicated under the alternative 
dispute resolution process set forth in Sec.  667.840 within the 60 
days, except that the request for hearing before the OALJ must be filed 
within 15 days of the conclusion of the 60-day period provided in Sec.  
667.840. In addition to including the final determination upon which 
review is requested, the complainant must include a copy of any 
Stipulation of Facts and a brief summary of proceedings.



Sec.  667.810  What rules of procedure apply to hearings conducted
under this subpart?

    (a) Rules of practice and procedure. The rules of practice and 
procedure promulgated by the OALJ at subpart A of 29 CFR part 18, govern 
the conduct of hearings under this subpart. However, a request for 
hearing under this subpart is not considered a complaint to which the 
filing of an answer by DOL or a DOL agency or official is required. 
Technical rules of evidence will not apply to hearings conducted 
pursuant to this part. However, rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to cross-examination will apply.
    (b) Prehearing procedures. In all cases, the Administrative Law 
Judge (ALJ) should encourage the use of prehearing procedures to 
simplify and clarify facts and issues.
    (c) Subpoenas. Subpoenas necessary to secure the attendance of 
witnesses and the production of documents or other items at hearings 
must be obtained from the ALJ and must be issued under the 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 the 
introduction at the hearing of any documentation if it has not been made 
available for review by the other parties to the proceeding either at 
the time ordered for any prehearing conference, or, in the absence of 
such an order, at least 3 weeks prior to the hearing date.
    (e) Burden of production. The Grant Officer has the burden of 
production to support her or his decision. To this end, the Grant 
Officer prepares and files an administrative file in support of the 
decision which must be made part of the record. Thereafter, the party or 
parties seeking to overturn the Grant Officer's decision has the burden 
of persuasion.

[[Page 116]]



Sec.  667.820  What authority does the Administrative Law Judge
have in ordering relief as an outcome of an administrative hearing?

    In ordering relief, the ALJ has the full authority of the Secretary 
under the Act.



Sec.  667.825  What special rules apply to reviews of NFJP and
WIA INA grant selections?

    (a) An applicant whose application for funding as a WIA INA grantee 
under 20 CFR part 668 or as an NFJP grantee under 20 CFR part 669 is 
denied in whole or in part may request an administrative review under 
Sec.  667.800(a) with to determine whether there is a basis in the 
record to support the decision. This appeal will not in any way 
interfere with the designation and funding of another organization to 
serve the area in question during the appeal period. The available 
remedy in such an appeal is the right to be designated in the future as 
the WIA INA or NFJP grantee for the remainder of the current grant 
cycle. Neither retroactive nor immediately effective selection status 
may be awarded as relief in a non-selection appeal under this section.
    (b) If the ALJ rules that the organization should have been selected 
and the organization continues to meet the requirements of 20 CFR part 
668 or part 669, we will select and fund the organization within 90 days 
of the ALJ's decision unless the end of the 90-day period is within six 
(6) months of the end of the funding period. An applicant so selected is 
not entitled to the full grant amount, but will only receive the funds 
remaining in the grant that have not been expended by the current 
grantee through its operation of the grant and its subsequent closeout.
    (c) Any organization selected and/or funded as a WIA INA or NFJP 
grantee is subject to being removed as grantee in the event an ALJ 
decision so orders. The Grant Officer provides instructions on 
transition and close-out to a grantee which is removed. All parties must 
agree to the provisions of this paragraph as a condition for WIA INA or 
NFJP funding.
    (d) A successful appellant which has not been awarded relief because 
of the application of paragraph (b) of this section is eligible to 
compete for funds in the immediately subsequent two-year grant cycle. In 
such a situation, we will not issue a waiver of competition and for the 
area and will select a grantee through the normal competitive process.



Sec.  667.830  When will the Administrative Law Judge issue a decision?

    (a) The ALJ should render a written decision not later than 90 days 
after the closing of the record.
    (b) The decision of the ALJ constitutes final agency action unless, 
within 20 days of the decision, a party dissatisfied with the ALJ's 
decision has filed a petition for review with the Administrative Review 
Board (ARB) (established under Secretary's Order No. 2-96), specifically 
identifying the procedure, fact, law or policy to which exception is 
taken. Any exception not specifically urged is deemed to have been 
waived. A copy of the petition for review must be sent to the opposing 
party at that time. Thereafter, the decision of the ALJ constitutes 
final agency action unless the ARB, within 30 days of the filing of the 
petition for review, notifies the parties that the case has been 
accepted for review. Any case accepted by the ARB must be decided within 
180 days of acceptance. If not so decided, the decision of the ALJ 
constitutes final agency action.



Sec.  667.840  Is there an alternative dispute resolution process
that may be used in place of an OALJ hearing?

    (a) Parties to a complaint which has been filed according to the 
requirements of Sec.  667.800 may choose to waive their rights to an 
administrative hearing before the OALJ. Instead, they may choose to 
transfer the settlement of their dispute to an individual acceptable to 
all parties who will conduct an informal review of the stipulated facts 
and render a decision in accordance with applicable law. A written 
decision must be issued within 60 days after submission of the matter 
for informal review.
    (b) The waiver of the right to request a hearing before the OALJ 
will automatically be revoked if a settlement has not been reached or a 
decision has

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not been issued within the 60 days provided in paragraph (a) of this 
section.
    (c) The decision rendered under this informal review process will be 
treated as a final decision of an Administrative Law Judge under section 
186(b) of the Act.



Sec.  667.850  Is there judicial review of a final order of the
Secretary issued under section 186 of the Act?

    (a) Any party to a proceeding which resulted in a Secretary's final 
order under section 186 of the Act may obtain a review in the United 
States Court of Appeals having jurisdiction over the applicant or 
recipient of funds involved, by filing a review petition within 30 days 
of the issuance of the Secretary's final order.
    (b) The court has jurisdiction to make and enter a decree affirming, 
modifying, or setting aside the order of the Secretary, in whole or in 
part.
    (c) No objection to the Secretary's order may be considered by the 
court unless the objection was specifically urged, in a timely manner, 
before the Secretary. The review is limited to questions of law, and the 
findings of fact of the Secretary are conclusive if supported by 
substantial evidence.
    (d) The judgment of the court is final, subject to certiorari review 
by the United States Supreme Court.



Sec.  667.860  Are there other remedies available outside of the Act?

    Nothing contained in this subpart prejudices the separate exercise 
of other legal rights in pursuit of remedies and sanctions available 
outside the Act.



PART 668_INDIAN AND NATIVE AMERICAN PROGRAMS UNDER TITLE I OF
THE WORKFORCE INVESTMENT ACT--Table of Contents



                     Subpart A_Purposes and Policies

Sec.
668.100 What is the purpose of the programs established to serve Native 
          American peoples (INA programs) under section166 of the 
          Workforce Investment Act?
668.120 How must INA programs be administered?
668.130 What obligation do we have to consult with the INA grantee 
          community in developing rules, regulations, and standards of 
          accountability for INA programs?
668.140 What WIA regulations apply to the INA program?
668.150 What definitions apply to terms used in the regulations in this 
          part?

  Subpart B_Service Delivery Systems Applicable to Section 166 Programs

668.200 What are the requirements for designation as an ``Indian or 
          Native American (INA) grantee''?
668.210 What priority for designation is given to eligible 
          organizations?
668.220 What is meant by the ``ability to administer funds'' for 
          designation purposes?
668.230 How will we determine an entity's ``ability to administer 
          funds''?
668.240 What is the process for applying for designation as an INA 
          grantee?
668.250 What happens if two or more entities 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 INA grantee?
668.290 Can an INA grantee's designation be terminated?
668.292 How does a designated entity become an INA grantee?
668.294 Do we have to designate an INA grantee for every part of the 
          country?
668.296 How are WIA funds allocated to INA grantees?

                     Subpart C_Services to Customers

668.300 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, 
          training allowances or stipends, or direct payments for 
          supportive services?
668.380 What will we do to strengthen the capacity of INA grantees to 
          deliver effective services?

                  Subpart D_Supplemental Youth Services

668.400 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 supplemental 
          youth services funding?
668.430 What individuals are eligible to receive supplemental youth 
          services?

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668.440 How is funding for supplemental youth services determined?
668.450 How will supplemental youth services be provided?
668.460 Are there performance measures and standards applicable to the 
          supplemental youth services program?

                    Subpart E_Services to Communities

668.500 What services may INA grantees provide to or for employers under 
          section 166?
668.510 What services may INA grantees provide to the community at large 
          under section 166?
668.520 Must INA grantees give preference to Indian/Native American 
          entities in the selection of contractors or service providers?
668.530 What rules govern the issuance of contracts and/or subgrants?

         Subpart F_Accountability for Services and Expenditures

668.600 To whom is the INA grantee accountable for the provision of 
          services and the expenditure of INA funds?
668.610 How is this accountability documented and fulfilled?
668.620 What performance measures are in place for the INA program?
668.630 What are the requirements for preventing fraud and abuse under 
          section 166?
668.640 What grievance systems must a section 166 program provide?
668.650 Can INA grantees exclude segments of the eligible population?

             Subpart G_Section 166 Planning/Funding Process

668.700 What process must an INA grantee use to plan its employment and 
          training services?
668.710 What planning documents must an INA grantee submit?
668.720 What information must these planning documents contain?
668.730 When must these plans be submitted?
668.740 How will we review and approve such plans?
668.750 Under what circumstances can we or the INA grantee modify the 
          terms of the grantee's plan(s)?

                  Subpart H_Administrative Requirements

668.800 What systems must an INA grantee have in place to administer an 
          INA program?
668.810 What types of costs are allowable expenditures under the INA 
          program?
668.820 What rules apply to administrative costs under the INA program?
668.825 Does the WIA administrative cost limit for States and local 
          areas apply to section 166 grants?
668.830 How should INA program grantees classify costs?
668.840 What cost principles apply to INA funds?
668.850 What audit requirements apply to INA grants?
668.860 What cash management procedures apply to INA grant funds?
668.870 What is ``program income'' and how is it regulated in the INA 
          program?

               Subpart I_Miscellaneous Program Provisions

668.900 Does WIA provide regulatory and/or statutory waiver authority?
668.910 What information is required to document a requested waiver?
668.920 What provisions of law or regulations may not be waived?
668.930 May INA grantees combine or consolidate their employment and 
          training funds?
668.940 What is the role of the Native American Employment and Training 
          Council?

    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).

    Source: 65 FR 49435, Aug. 11, 2000, unless otherwise noted.



                     Subpart A_Purposes and Policies



Sec.  668.100  What is the purpose of the programs established
to serve Native American peoples (INA programs) under section 166
of the Workforce Investment Act?

    (a) The purpose of WIA INA programs is to support comprehensive 
employment and training activities for Indian, Alaska Native and Native 
Hawaiian individuals in order to:
    (1) Develop more fully their academic, occupational, and literacy 
skills;
    (2) Make them more competitive in the workforce;
    (3) Promote the economic and social development of Indian, Alaska 
Native, and Native Hawaiian communities according to the goals and 
values of such communities; and
    (4) Help them achieve personal and economic self-sufficiency.
    (b) The principal means of accomplishing these purposes is to enable

[[Page 119]]

tribes and Native American organizations to provide employment and 
training services to Native American peoples and their communities. 
Services should be provided in a culturally appropriate manner, 
consistent with the principles of Indian self-determination. (WIA sec. 
166(a)(1).)



Sec.  668.120  How must INA programs be administered?

    (a) We will administer INA programs to maximize the Federal 
commitment to support the growth and development of Native American 
people and communities as determined by representatives of such 
communities.
    (b) In administering these programs, we will observe the 
Congressional declaration of policy set forth in the Indian Self-
Determination and Education Assistance Act, at 25 U.S.C. section 450a, 
as well as the Department of Labor's ``American Indian and Alaska Native 
Policy,'' dated July 29, 1998.
    (c) The regulations in this part are not intended to abrogate the 
trust responsibilities of the Federal Government to Native American 
bands, tribes, or groups in any way.
    (d) We will administer INA programs through a single organizational 
unit and consistent with the requirements in section 166(h) of the Act. 
We have designated the Division of Indian and Native American Programs 
(DINAP) within the Employment and Training Administration (ETA) as this 
single organizational unit required by WIA section 166(h)(1).
    (e) We will establish and maintain administrative procedures for the 
selection, administration, monitoring, and evaluation of Native American 
employment and training programs authorized under this Act. We will 
utilize staff who have a particular competence in this field to 
administer these programs. (WIA sec. 166(h).)



Sec.  668.130  What obligation do we have to consult with the 
INA grantee community in developing rules, regulations, and
standards of accountability for INA programs?

    We will consult with the Native American grantee community as a full 
partner in developing policies for the INA programs. We will actively 
seek and consider the views of all INA grantees, and will discuss 
options with the grantee community prior to establishing policies and 
program regulations. The primary consultation vehicle is the Native 
American Employment and Training Council. (WIA sec. 166(h)(2).)



Sec.  668.140  What WIA regulations apply to the INA program?

    (a) The regulations found in this subpart.
    (b) The general administrative requirements found in 20 CFR part 
667, including the regulations concerning Complaints, Investigations and 
Hearings found at 20 CFR part 667, subpart E through subpart H.
    (c) The Department's regulations codifying the common rules 
implementing Office of Management and Budget (OMB) Circulars which 
generally apply to Federal programs carried out by Indian tribal 
governments and nonprofit organizations, at 29 CFR parts 95, 96, 97, and 
99 as applicable.
    (d) The Department's regulations at 29 CFR part 37, which implement 
the nondiscrimination provisions of WIA section 188, apply to recipients 
of financial assistance under WIA section 166.



Sec.  668.150  What definitions apply to terms used in the 
regulations in this part?

    In addition to the definitions found in WIA sections 101 and 166 and 
20 CFR 660.300, the following definitions apply:
    DINAP means the Division of Indian and Native American Programs 
within the Employment and Training Administration of the Department.
    Governing body means a body of representatives who are duly elected, 
appointed by duly elected officials, or selected according to 
traditional tribal means. A governing body must have the authority to 
provide services to and to enter into grants on behalf of the 
organization that selected or designated it.
    Grant Officer means a Department of Labor official authorized to 
obligate Federal funds. Indian or Native American (INA) Grantee means an 
entity which is formally designated under subpart B of this part to 
operate an

[[Page 120]]

INA program and which has a grant agreement under Sec.  668.292.
    NEW means the Native Employment Works Program, the tribal work 
program authorized under section 412(a)(2) of the Social Security Act, 
as amended by the Personal Responsibility and Work Opportunity 
Reconciliation Act (Public Law 104-193).
    Underemployed means an individual who is working part time but 
desires full time employment, or who is working in employment not 
commensurate with the individual's demonstrated level of educational 
and/or skill achievement.



  Subpart B_Service Delivery Systems Applicable to Section 166
  Programs



Sec.  668.200  What are the requirements for designation as
an ``Indian or Native American (INA) grantee''?

    (a) To be designated as an INA grantee, an entity must have:
    (1) A legal status as a government or as an agency of a government, 
private non-profit corporation, or a consortium which contains at least 
one of these entities;
    (2) The ability to administer INA program funds, as defined at Sec.  
668.220; and
    (3) A new (non-incumbent) entity must have a population within the 
designated geographic service area which would provide funding under the 
funding formula found at Sec.  668.296(b) in the amount of at least 
$100,000, including any amounts received for supplemental youth services 
under the funding formula at Sec.  668.440(a). Incumbent grantees which 
do not meet this dollar threshold for Program Year (PY) 2000 and beyond 
will be grandfathered in. We will make an exception for grantees wishing 
to participate in the demonstration program under Public Law 102-477 if 
all resources to be consolidated under the Public Law 102-477 plan total 
at least $100,000, with at least $20,000 derived from section 166 funds 
as determined by the most recent Census data. Exceptions to this $20,000 
limit may be made for those entities which are close to the limit and 
which have demonstrated the capacity to administer Federal funds and 
operate a successful employment and training program.
    (b) To be designated as a Native American grantee, a consortium or 
its members must meet the requirements of paragraph (a) of this section 
and must:
    (1) Be in close proximity to one another, but they may operate in 
more than one State;
    (2) Have an administrative unit legally authorized to run the 
program and to commit the other members to contracts, grants, and other 
legally-binding agreements; and
    (3) Be jointly and individually responsible for the actions and 
obligations of the consortium, including debts.
    (c) Entities potentially eligible for designation 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 or 
village areas, as defined in the Alaska Native Claims Settlement Act;
    (4) Native Hawaiian-controlled entities;
    (5) Native American-controlled organizations serving Indians; and
    (6) Consortia of eligible entities which individually meets the 
legal requirements for a consortium described in paragraph (c) of this 
section.
    (d) Under WIA section 166(d)(2)(B), individuals who were eligible to 
participate under section 401 of JTPA on August 6, 1998, remain eligible 
to participate under section 166 of WIA. State-recognized tribal 
organizations serving such individuals are considered to be ``Native 
American controlled'' for WIA section 166 purposes.



Sec.  668.210  What priority for designation is given to eligible
organizations?

    (a) Federally-recognized Indian tribes, Alaska Native entities, or 
consortia that include a tribe or entity will have the highest priority 
for designation. To be designated, the organizations must meet the 
requirements in this subpart. These organizations will be designated for 
those geographic areas and/or populations over which

[[Page 121]]

they have legal jurisdiction. (WIA sec. 166(c)(1).)
    (b) If we decide not to designate Indian tribes or Alaska Native 
entities to serve their service areas, we will enter into arrangements 
to provide services with entities which the tribes or Alaska Native 
entities involved approve.
    (c) In geographic areas not served by Indian tribes or Alaska Native 
entities, entities with a Native American-controlled governing body and 
which are representative of the Native American community or communities 
involved will have priority for designation.



Sec.  668.220  What is meant by the ``ability to administer 
funds'' for designation purposes?

    An organization has the ``ability to administer funds'' if it:
    (a) Is in compliance with Departmental debt management procedures, 
if applicable;
    (b) Has not been found guilty of fraud or criminal activity which 
would affect the entity's ability to safeguard Federal funds or deliver 
program services;
    (c) Can demonstrate that it has or can acquire the necessary program 
and financial management personnel to safeguard Federal funds and 
effectively deliver program services; and
    (d) Can demonstrate that it has successfully carried out, or has the 
capacity to successfully carry out activities that will strengthen the 
ability of the individuals served to obtain or retain unsubsidized 
employment.



Sec.  668.230  How will we determine an entity's ``ability to
administer funds''?

    (a) Before determining which entity to designate for a particular 
service area, we will conduct a review of the entity's ability to 
administer funds.
    (b) The review for an entity that has served as a grantee in either 
of the two designation periods before the one under consideration, also 
will consider the extent of compliance with the WIA regulations. 
Evidence of the ability to administer funds may be established by a 
satisfactory Federal audit record. It may also be established by a 
recent record showing substantial compliance with Federal record 
keeping, reporting, program performance standards, or similar standards 
imposed on grantees by this or other public sector supported programs.
    (c) For other entities, the review includes the experience of the 
entity's management in administering funds for services to Native 
American people. This review also includes an assessment of the 
relationship between the entity and the Native American community or 
communities to be served.

[65 FR 49435, Aug. 11, 2000, as amended at 71 FR 35524, June 21, 2006]



Sec.  668.240  What is the process for applying for designation
as an INA grantee?

    (a) Every entity seeking designation must submit a Notice of Intent 
(NOI) which complies with the requirements of the Solicitation for Grant 
Application (SGA). An SGA will be issued every two years, covering all 
areas except for those for which competition is waived for the incumbent 
grantee under WIA section 166(c)(2).
    (b) NOI's must be submitted to the Chief of DINAP, bearing a U.S. 
Postal Service postmark indicating its submission no later than October 
1st of the year which precedes the first year of a new designation cycle 
(unless the SGA provides a later date). For NOI's received after October 
1, only a timely official U.S. Postal Service postmark is acceptable as 
proof of timely submission. Dates indicating submission by private 
express delivery services or metered mail are unacceptable as proof of 
the timely submission of designation documents.
    (c) NOI's must include the following:
    (1) Documentation of the legal status of the entity, as described in 
Sec.  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, or service population, of the geographic area for which the entity 
requests designation;
    (5) A brief summary of the employment and training or human resource 
development programs serving Native Americans that the entity currently 
operates or has operated within the previous two-year period;

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    (6) A description of the planning process used by the entity, 
including the involvement of the governing body and local employers;
    (7) Evidence to establish an entity's ability to administer funds 
under Sec. Sec.  668.220 through 668.230.



Sec.  668.250  What happens if two or more entities apply for
the same area?

    (a) Every two years, unless there has been a waiver of competition 
for the area, we issue a Solicitation for Grant Application (SGA) 
seeking applicants for INA program grants.
    (b) If two or more entities apply for grants for the same service 
area, or for overlapping service areas, and a waiver of competition 
under WIA section 166(c)(2) is not granted to the incumbent grantee, the 
following additional procedures apply:
    (1) The Grant Officer will follow the regulations for priority 
designation at Sec.  668.210.
    (2) If no applicant is entitled to priority designation, DINAP will 
inform each entity which submitted a NOI, including the incumbent 
grantee, in writing, of all the competing Notices of Intent no later 
than November 15 of the year the NOI's are received.
    (3) Each entity will have an opportunity to describe its service 
plan, and may submit additional information addressing the requirements 
of Sec.  668.240(c) or such other information as the applicant 
determines is appropriate. Revised Notices must be received or contain 
an official U.S. Postal Service postmark, no later than January 5th 
(unless a later date is provided in DINAP's information notice).
    (4) The Grant Officer selects the entity that demonstrates the 
ability to produce the best outcomes for its customers.



Sec.  668.260  How are INA grantees designated?

    (a) On March 1 of each designation year, we designate or 
conditionally designate Native American grantees for the coming two 
program years. The Grant Officer informs, in writing, each entity which 
submitted a Notice of Intent 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 provide 
evidence to DOL that a system is in place to afford all members of the 
eligible population within their service area an equitable opportunity 
to receive employment and training activities and services.



Sec.  668.270  What appeal rights are available to entities that
are denied designation?

    Any entity that is denied designation in whole or in part for the 
area or population that it requested may appeal the denial to the Office 
of the Administrative Law Judges using the procedures at 20 CFR 667.800 
or the alternative dispute resolution procedures at 20 CFR 667.840. The 
Grant Officer will provide an entity whose request for designation was 
denied, in whole or in part, with a copy of the appeal procedures.



Sec.  668.280  Are there any other ways in which an entity may
be designated as an INA grantee?

    Yes, for an area which would otherwise go unserved. The Grant 
Officer may designate an entity, which has not submitted an NOI, but 
which meets the qualifications for designation, to serve the particular 
geographic area. Under such circumstances, DINAP will seek the views of 
Native American leaders in the area involved about the decision to 
designate the entity to serve that community. DINAP will inform the 
Grant Officer of their views. The Grant Officer will accommodate their 
views to the extent possible.



Sec.  668.290  Can an INA grantee's designation be terminated?

    (a) Yes, the Grant Officer can terminate a grantee's designation for 
cause, or the Secretary or another DOL official confirmed by the Senate 
can terminate a grantee's designation in emergency circumstances where 
termination is necessary to protect the integrity of Federal funds or 
ensure the proper operation of the program. (WIA sec. 184(e).)

[[Page 123]]

    (b) The Grant Officer may terminate a grantee's designation for 
cause only if there is a substantial or persistent violation of the 
requirements in the Act or the WIA regulations. The grantee must be 
provided with written notice 60 days before termination, stating the 
specific reasons why termination is proposed. The appeal procedures at 
20 CFR 667.800 apply.
    (c) The Secretary must give a grantee terminated in emergency 
circumstances prompt notice of the termination and an opportunity for a 
hearing within 30 days of the termination.



Sec.  668.292  How does a designated entity become an INA 
grantee?

    A designated entity becomes a grantee on the effective date of an 
executed grant agreement, signed by the authorized official of the 
grantee organization and the Grant Officer. The grant agreement includes 
a set of certifications and assurances that the grantee will comply with 
the terms of the Act, the WIA regulations, and other appropriate 
requirements. Funds are released to the grantee upon approval of the 
required planning documents, as described in Sec. Sec.  668.710 through 
668.740.



Sec.  668.294  Do we have to designate an INA grantee for
every part of the country?

    No, beginning with the PY 2000 grant awards, if there are no 
entities meeting the requirements for designation in a particular area, 
or willing to serve that area, we will not allocate funds for that 
service area. The funds allocated to that area will be distributed to 
the remaining INA grantees, or used for other program purposes such as 
technical assistance and training (TAT). Unawarded funds used for 
technical assistance and training are in addition to, and not subject to 
the limitations on, amounts reserved under Sec.  668.296(e). Areas which 
are unserved by the INA program may be restored during a subsequent 
designation cycle, when and if a current grantee or other eligible 
entity applies for and is designated to serve that area.



Sec.  668.296  How are WIA funds allocated to INA grantees?

    (a) Except for reserved funds described in paragraph (e) of this 
section and funds used for program purposes under Sec.  668.294, all 
funds available for WIA section 166(d)(2)(A)(i) comprehensive workforce 
investment services program at the beginning of a Program Year will be 
allocated to Native American grantees for their designated geographic 
service areas.
    (b) Each INA grantee will receive the sum of the funds calculated 
under the following formula:
    (1) One-quarter of the funds available will be allocated on the 
basis of the number of unemployed Native American persons in the 
grantee's designated INA service area(s) compared to all such persons in 
all such areas in the United States.
    (2) Three-quarters of the funds available will be allocated on the 
basis of the number of Native American persons in poverty in the 
grantee's designated INA service area(s) as compared to all such persons 
in all such areas in the United States.
    (3) The data and definitions used to implement these formulas is 
provided by the U.S. Bureau of the Census.
    (c) In years immediately following the use of new data in the 
formula described in paragraph (b) of this section, based upon criteria 
to be described in the SGA, we may utilize a hold harmless factor to 
reduce the disruption in grantee services which would otherwise result 
from changes in funding levels. This factor will be determined in 
consultation with the grantee community and the Native American 
Employment and Training Council.
    (d) We may reallocate funds from one INA grantee to another if a 
grantee is unable to serve its area for any reason, such as audit or 
debt problems, criminal activity, internal (political) strife, or lack 
of ability or interest. Funds may also be reallocated if a grantee has 
carry-in excess of 20 percent of the total funds available to it. Carry-
in amounts greater than 20 percent but less than 25 percent of total 
funds available may be allowed under an approved waiver issued by DINAP.
    (e) We may reserve up to one percent (1 percent) of the funds 
appropriated

[[Page 124]]

under WIA section 166(d)(2)(A)(i) for any Program Year for TAT purposes. 
Technical assistance will be provided in consultation with the Native 
American Employment and Training Council.



                     Subpart C_Services to Customers



Sec.  668.300  Who is eligible to receive services under the INA program?

    (a) A person is eligible to receive services under the INA program 
if that person is:
    (1) An Indian, as determined by a policy of the Native American 
grantee. The grantee's definition must at least include anyone who is a 
member of a Federally-recognized tribe; or
    (2) An Alaska Native, as defined in section 3(b) of the Alaska 
Native Claims Settlement Act (ANCSA), 43 U.S.C. 1602(b); or
    (3) A Native Hawaiian, as defined in WIA section 166(b)(3).
    (b) The person must also be any one of the following:
    (1) Unemployed; or
    (2) Underemployed, as defined in Sec.  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 the last six months or will take effect in the following six 
month period, who is unlikely to return to a previous industry or 
occupation, and who is in need of retraining for either employment with 
another employer or for job retention with the current employer; or
    (5) An individual who is employed, but is determined by the grantee 
to be in need of employment and training services to obtain or retain 
employment that allows for self-sufficiency.
    (c) If applicable, male applicants must also register or be 
registered for the Selective Service.
    (d) For purposes of determining whether a person is a low-income 
individual under paragraph (b)(3) of this section, we will issue 
guidance for the determination of family income. (WIA sec. 189(h).)



Sec.  668.340  What are INA grantee allowable activities?

    (a) The INA grantee may provide any services consistent with the 
purposes of this section that are necessary to meet the needs of Native 
Americans preparing to enter, reenter, or retain unsubsidized 
employment. (WIA sec. 166(d)(1)(B).) Comprehensive workforce investment 
activities authorized under WIA section 166(d)(2) include:
    (b) Core services, which must be delivered 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 
supportive service needs;
    (5) Eligibility certification;
    (6) Job Search and placement assistance;
    (7) Career counseling;
    (8) Provision of employment statistics information and local, 
regional, and national Labor Market Information;
    (9) Provision of information about filing of Unemployment Insurance 
claims;
    (10) Assistance in establishing eligibility for Welfare-to-Work 
programs;
    (11) Assistance in establishing eligibility for financial assistance 
for training;
    (12) Provision of information about supportive services;
    (13) Provision of performance and cost information relating to 
training providers 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;

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    (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, which may include cooperative education programs;
    (4) Training programs operated by the private sector;
    (5) Skill upgrading and retraining;
    (6) Entrepreneurial and small business development technical 
assistance and training;
    (7) Job readiness training;
    (8) Adult basic education, GED attainment, literacy training, and 
English language training, provided alone or in combination with 
training or intensive services described paragraphs (c)(1) through (11) 
and (d)(1) through (10) of this section;
    (9) Customized training conducted with a commitment by an employer 
or group of employers to employ an individual upon successful completion 
of training; and
    (10) Educational and tuition assistance.
    (e) Allowable activities specifically designed for youth are 
identified in section 129 of the Act and include:
    (1) Improving educational and skill competencies;
    (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 postsecondary education, academic and 
occupational learning, unsubsidized employment opportunities, and other 
effective connections to intermediaries with strong links to the job 
market and local and regional employers;
    (8) Tutoring, study skills training, and other drop-out prevention 
strategies;
    (9) Alternative secondary school services;
    (10) Summer employment opportunities that are directly linked to 
academic and occupational learning;
    (11) Paid and unpaid work experiences, including internships and job 
shadowing;
    (12) Occupational skill training;
    (13) Leadership development opportunities, as defined in 20 CFR 
664.420;
    (14) Follow-up services, as defined in 20 CFR 664.450;
    (15) Comprehensive guidance and counseling, which may include drug 
and alcohol abuse counseling and referral; and
    (16) Information and referral.
    (f) In addition, allowable activities include job development and 
employment outreach, including:
    (1) Support of the Tribal Employment Rights Office (TERO) program;
    (2) Negotiation with employers to encourage them to train and hire 
participants;
    (3) Establishment of linkages with other service providers to aid 
program participants;
    (4) Establishment of management training programs to support tribal 
administration or enterprises; and
    (5) Establishment of linkages with remedial education, such as Adult 
Basic Education (ABE), basic literacy training, and English-as-a-second-
language (ESL) training programs, as necessary.
    (g) Participants may be enrolled in more than one activity at a time 
and may be sequentially enrolled in multiple activities.
    (h) INA grantees may provide any services which may be carried out 
by fund recipients under any provisions of the Act. (WIA sec. 166(d).)
    (i) In addition, INA grantees must develop programs which contribute 
to occupational development, upward mobility, development of new 
careers, and opportunities for nontraditional employment. (WIA sec. 
195(1).)



Sec.  668.350  Are there any restrictions on allowable activities?

    (a) All occupational training must be for occupations for which 
there are employment opportunities in the local area or another area to 
which the participant is willing to relocate. (WIA sec. 
134(d)(4)(A)(iii).)

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    (b) INA grantees must provide OJT services consistent with the 
definition provided in WIA section 101(31) and other limitations in the 
Act. Individuals in OJT must:
    (1) Be compensated at the same rates, including periodic increases, 
as trainees or employees who are similarly situated in similar 
occupations by the same employer and who have similar training, 
experience, and skills (WIA sec. 181(a)(1)); and
    (2) Be provided benefits and working conditions at the same level 
and to the same extent as other trainees or employees working a similar 
length of time and doing the same type of work. (WIA sec. 181(b)(5).)
    (c) In addition, OJT contracts under this title must not be entered 
into with employers who have:
    (1) Received payments under previous contracts and have exhibited a 
pattern of failing to provide OJT participants with continued, long-term 
employment as regular employees with wages and employment benefits and 
working conditions at the same level and to the same extent as other 
employees working a similar length of time and doing the same work; or
    (2) Who have violated paragraphs (b)(1) and/or (2) of this section. 
(WIA sec. 195(4).)
    (d) INA grantees are prohibited from using funds to encourage the 
relocation of a business, as described in WIA section 181(d) and 20 CFR 
667.268.
    (e) INA grantees must only use WIA funds for activities which are in 
addition to those that would otherwise be available to the Native 
American population in the area in the absence of such funds. (WIA sec. 
195(2).)
    (f) INA grantees must not spend funds on activities that displace 
currently employed individuals, impair existing contracts for services, 
or in any way affect union organizing.
    (g) Under 20 CFR 667.266, sectarian activities involving WIA 
financial assistance or participants are limited in accordance with the 
provisions of 29 CFR 37.6(f). (WIA sec. 181(b).)



Sec.  668.360  What is the role of INA grantees in the One-Stop system?

    (a) In those local workforce investment areas where an INA grantee 
conducts field operations or provides substantial services, the INA 
grantee is a required partner in the local One-Stop delivery system and 
is subject to the provisions relating to such partners described in 20 
CFR part 662. Consistent with those provisions, a Memorandum of 
Understanding (MOU) between the INA grantee and the Local Board over the 
operation of the One-Stop Center(s) in the Local Board's workforce 
investment area also must be executed. Where the Local Board is an 
alternative entity under 20 CFR 661.330, the INA grantee must negotiate 
with the alternative entity on the terms of its MOU and the scope of its 
on-going role in the local workforce investment system, as specified in 
20 CFR 661.310(b)(2). In local areas with a large concentration of 
potentially eligible INA participants, which are in an INA grantee's 
service area but in which the grantee does not conduct operations or 
provide substantial services, the INA grantee should encourage such 
individuals to participate in the One-Stop system in that area in order 
to receive WIA services.
    (b) At a minimum, the MOU must contain provisions related to:
    (1) The services to be provided through the One-Stop Service System;
    (2) The methods for referral of individuals between the One-Stop 
operator and the INA grantee which take into account the services 
provided by the INA grantee and the other One-Stop partners;
    (3) The exchange of information on the services available and 
accessible through the One-Stop system and the INA program;
    (4) As necessary to provide referrals and case management services, 
the exchange of information on Native American participants in the One-
Stop system and the INA program;
    (5) Arrangements for the funding of services provided by the One-
Stop(s), consistent with the requirements at 20 CFR 662.280 that no 
expenditures may be made with INA program funds for individuals who are 
not eligible or for services not authorized under this part.
    (c) The INA grantee's Two Year Plan must describe the efforts the 
grantee

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has made to negotiate MOU's consistent with paragraph (b) of this 
section, for each planning cycle during which Local Boards are operating 
under the terms of WIA.



Sec.  668.370  What policies govern payments to participants,
including wages, training allowances or stipends, or direct 
payments for supportive services?

    (a) INA grantees may pay training allowances or stipends to 
participants for their successful participation in and completion of 
education or training services (except such allowance may not be 
provided to participants in OJT). Allowances or stipends may not exceed 
the Federal or State minimum wage, whichever is higher.
    (b) INA grantees may not pay a participant in a training activity 
when the person fails to participate without good cause.
    (c) If a participant in a WIA-funded activity, including 
participants in OJT, is involved in an employer-employee relationship, 
that participant must be paid wages and fringe benefits at the same 
rates as trainees or employees who have similar training, experience and 
skills and which are not less than the higher of the applicable Federal, 
State or local minimum wage. (WIA sec. 181(a)(1).)
    (d) In accordance with the policy described in the two-year plan, 
INA grantees may pay incentive bonuses to participants who meet or 
exceed individual employability or training goals established in writing 
in the individual employment plan.
    (e) INA grantees must comply with other restrictions listed in WIA 
sections 181 through 199, which apply to all programs funded under title 
I of WIA.
    (f) INA grantees must comply with the provisions on labor standards 
in WIA section 181(b).



Sec.  668.380  What will we do to strengthen the capacity of 
INA grantees to deliver effective services?

    We will provide appropriate TAT, as necessary, to INA grantees. This 
TAT will assist INA grantees to improve program performance and enhance 
services to the target population(s), as resources permit. (WIA sec. 
166(h)(5).)



                  Subpart D_Supplemental Youth Services



Sec.  668.400  What is the purpose of the supplemental youth services program?

    The purpose of this program is to provide supplemental employment 
and training and related services to Native American youth on or near 
Indian reservations, or in Oklahoma, Alaska, and Hawaii. (WIA sec. 
166(d)(2)(A)(ii).)



Sec.  668.410  What entities are eligible to receive
supplemental youth services funding?

    Eligible recipients for supplemental youth services funding are 
limited to those tribal, Alaska Native, Native Hawaiian and Oklahoma 
tribal grantees funded under WIA section 166(d)(2)(A)(i), or other 
grantees serving those areas and/or populations specified in Sec.  
668.400, that received funding under title II-B of the Job Training 
Partnership Act, or that are designated to serve an eligible area as 
specified in WIA section 166(d)(2)(A)(ii).



Sec.  668.420  What are the planning requirements for 
receiving supplemental youth services funding?

    Beginning with PY 2000, eligible INA grantees must describe the 
supplemental youth services which they intend to provide in their Two 
Year Plan (described more fully in Sec. Sec.  668.710 and 668.720). This 
Plan includes the target population the grantee intends to serve, for 
example, drop-outs, juvenile offenders, and/or college students. It also 
includes the performance measures/standards to be utilized to measure 
program progress.



Sec.  668.430  What individuals are eligible to receive 
supplemental youth services?

    (a) Participants in supplemental youth services activities must be 
Native Americans, as determined by the INA grantee according to Sec.  
668.300(a), and must meet the definition of Eligible Youth, as defined 
in WIA section 101(13).
    (b)Youth participants must be low-income individuals, except that 
not more than five percent (5%) who do not meet the minimum income 
criteria,

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may be considered eligible youth if they meet one or more of the 
following categories:
    (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 the grade level appropriate to their age group;
    (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 as 
identified by the grantee in its Plan. (WIA sec. 129(c)(5).)



Sec.  668.440  How is funding for supplemental youth services
determined?

    (a) Beginning with PY 2000, supplemental youth funding will be 
allocated to eligible INA grantees on the basis of the relative number 
of Native American youth between the ages of 14 and 21, inclusive, in 
the grantee's designated INA service area as compared to the number of 
Native American youth in other eligible INA service areas. We reserve 
the right to redetermine this youth funding stream in future program 
years, in consultation with the Native American Employment and Training 
Council, as program experience warrants and as appropriate data become 
available.
    (b) The data used to implement this formula is provided by the U.S. 
Bureau of the Census.
    (c) The hold harmless factor described in Sec.  668.296(c) also 
applies to supplemental youth services funding. This factor also will be 
determined in consultation with the grantee community and the Native 
American Employment and Training Council.
    (d) The reallocation provisions of Sec.  668.296(d) also apply to 
supplemental youth services funding.
    (e) Any supplemental youth services funds not allotted to a grantee 
or refused by a grantee may be used for the purposes outlined in Sec.  
668.296(e), as described in Sec.  668.294. Any such funds are in 
addition to, and not subject to the limitations on, amounts reserved 
under Sec.  668.296(e).



Sec.  668.450  How will supplemental youth services be provided?

    (a) INA grantees may offer supplemental services to youth throughout 
the school year, during the summer vacation, and/or during other breaks 
during the school year at their discretion;
    (b) We encourage INA grantees to work with Local Educational 
Agencies to provide academic credit for youth activities whenever 
possible;
    (c) INA grantees may provide participating youth with the activities 
listed in 20 CFR 668.340(e).



Sec.  668.460  Are there performance measures and standards
applicable to the supplemental youth services program?

    Yes, WIA section 166(e)(5) requires that the program plan contain a 
description of the performance measures to be used to assess the 
performance of grantees in carrying out the activities assisted under 
this section. We will develop specific indicators of performance and 
levels of performance for supplemental youth services activities in 
partnership with the Native American Employment and Training Council, 
and will transmit them to INA grantees as an administrative issuance.



                    Subpart E_Services to Communities



Sec.  668.500  What services may INA grantees provide to or
for employers under section 166?

    (a) INA grantees may provide a variety of services to employers in 
their areas. These services may include:
    (1) Workforce planning which involves the recruitment of current or 
potential program participants, including job restructuring services;
    (2) Recruitment and assessment of potential employees, with priority 
given to potential employees who are or who might become eligible for 
program services;
    (3) Pre-employment training;
    (4) Customized training;
    (5) On-the-Job training (OJT);
    (6) Post-employment services, including training and support 
services to encourage job retention and upgrading;
    (7) Work experience for public or private sector work sites;

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    (8) Other innovative forms of worksite training.
    (b) In addition to the services listed in paragraph (a) of this 
section, other grantee-determined services (as described in the 
grantee's Two Year Plan) which are intended to assist eligible 
participants to obtain or retain employment may also be provided to or 
for employers.



Sec.  668.510  What services may INA grantees provide to
the community at large under section 166?

    (a) INA grantees may provide services to the Native American 
communities in their designated service areas by engaging in program 
development and service delivery activities which:
    (1) Strengthen the capacity of Native American-controlled 
institutions to provide education and work-based learning services to 
Native American youth and adults, whether directly or through other 
Native American institutions such as tribal colleges;
    (2) Increase the community's capacity to deliver supportive 
services, such as child care, transportation, housing, health, and 
similar services needed by clients to obtain and retain employment;
    (3) Use program participants engaged in education, training, work 
experience, or similar activities to further the economic and social 
development of Native American communities in accordance with the goals 
and values of those communities; and
    (4) Engage in other community-building activities described in the 
INA grantee's Two Year Plan.
    (b) INA grantees should develop their Two Year Plan in conjunction 
with, and in support of, strategic tribal planning and community 
development goals.



Sec.  668.520  Must INA grantees give preference to Indian/Native
American entities in the selection of contractors or service
providers?

    Yes, INA grantees must give as much preference as possible to Indian 
organizations and to Indian-owned economic enterprises, as defined in 
section 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452), when 
awarding any contract or subgrant.



Sec.  668.530  What rules govern the issuance of contracts and/or subgrants?

    In general, INA grantees must follow the rules of OMB Circulars A-
102 (for tribes) or A-110 (for private non-profits) when awarding 
contracts and/or subgrants under WIA section 166. The common rules 
implementing those circulars are codified for DOL-funded programs at 29 
CFR part 97 (A-102) or 29 CFR part 95 (A-110), and covered in the WIA 
regulations at 20 CFR 667.200. These rules do not apply to OJT contract 
awards.



         Subpart F_Accountability for Services and Expenditures



Sec.  668.600  To whom is the INA grantee accountable for the
provision of services and the expenditure of INA funds?

    (a) The INA grantee is responsible to the Native American community 
to be served by INA funds.
    (b) The INA grantee is also responsible to the Department of Labor, 
which is charged by law with ensuring that all WIA funds are expended:
    (1) According to applicable laws and regulations;
    (2) For the benefit of the identified Native American client group; 
and
    (3) For the purposes approved in the grantee's plan and signed grant 
document.



Sec.  668.610  How is this accountability documented and fulfilled?

    (a) Each INA grantee must establish its own internal policies and 
procedures to ensure accountability to the INA grantee's governing body, 
as the representative of the Native American community(ies) served by 
the INA program. At a minimum, these policies and procedures must 
provide a system for governing body review and oversight of program 
plans and measures and standards for program performance.
    (b) Accountability to the Department is accomplished in part through 
on-site program reviews (monitoring), which strengthen the INA grantee's 
capability to deliver effective services and protect the integrity of 
Federal funds.

[[Page 130]]

    (c) In addition to audit information, as described at Sec.  668.850 
and program reviews, accountability to the Department is documented and 
fulfilled by the submission of reports. For the purposes of report 
submission, a postmark or date indicating receipt by a private express 
delivery service is acceptable proof of timely submission. These report 
requirements are as follows:
    (1) Each INA grantee must submit an annual report on program 
participants and activities. This report must be received no later than 
90 days after the end of the Program Year, and may be combined with the 
report on program expenditures. The reporting format is developed by 
DINAP, in consultation with the Native American Advisory Council, and 
published in the Federal Register.
    (2) Each INA grantee must submit an annual report on program 
expenditures. This report must be received no later than 90 days after 
the end of the Program Year, and may be combined with the report on 
program participants and activities.
    (3) INA grantees are encouraged, but not required, to submit a 
descriptive narrative with their annual reports describing the barriers 
to successful plan implementation they have encountered. This narrative 
should also discuss program successes and other notable occurrences that 
effected the INA grantee's overall performance that year.
    (4) Each INA grantee may be required to submit interim reports on 
program participants and activities and/or program expenditures during 
the Program Year. Interim reports must be received no later than 45 days 
after the end of the reporting period.



Sec.  668.620  What performance measures are in place for the INA program?

    Indicators of performance measures and levels of performance in use 
for INA program will be those indicators and standards proposed in 
individual grantee plans and approved by us, in accordance with 
guidelines we will develop in consultation with INA grantees under WIA 
section 166(h)(2)(A).



Sec.  668.630  What are the requirements for preventing fraud and
abuse under section 166?

    (a) Each INA grantee must implement program and financial management 
procedures to prevent fraud and abuse. Such procedures must include a 
process which enables the grantee to take action against contractors or 
subgrantees to prevent any misuse of funds. (WIA sec. 184.)
    (b) Each INA grantee must have rules to prevent conflict of interest 
by its governing body. These conflict of interest rules must include a 
rule prohibiting any member of any governing body or council associated 
with the INA grantee from voting on any matter which would provide a 
direct financial benefit to that member, or to a member of his or her 
immediate family, in accordance with 20 CFR 667.200(a)(4) and 29 CFR 
97.36(b) or 29 CFR 95.42.
    (c) Officers or agents of the INA grantee must not solicit or 
personally accept gratuities, favors, or anything of monetary value from 
any actual or potential contractor, subgrantee, vendor or participant. 
This rule must also apply to officers or agents of the grantee's 
contractors and/or subgrantees. This prohibition does not apply to:
    (1) Any rebate, discount or similar incentive provided by a vendor 
to its customers as a regular feature of its business;
    (2) Items of nominal monetary value distributed consistent with the 
cultural practices of the Native American community served by the 
grantee.
    (d) No person who selects program participants or authorizes the 
services provided to them may select or authorize services to any 
participant who is such a person's husband, wife, father, mother, 
brother, sister, son, or daughter unless:
    (1)(i) The participant involved is a low income individual; or
    (ii) The community in which the participant resides has a population 
of less than 1,000 Native American people; and
    (2) The INA grantee has adopted and implemented the policy described 
in the Two Year Plan to prevent favoritism on behalf of such relatives.
    (e) INA grantees are subject to the provisions of 41 U.S.C. 53 
relating to kickbacks.

[[Page 131]]

    (f) No assistance provided under this Act may involve political 
activities. (WIA sec. 195(6).)
    (g) INA grantees may not use funds under this Act for lobbying, as 
provided in 29 CFR part 93.
    (h) The provisions of 18 U.S.C. 665 and 666 prohibiting embezzlement 
apply to programs under WIA.
    (i) Recipients of financial assistance under WIA section 168 are 
prohibited from discriminatory practices as outlined at WIA section 188, 
and the regulations implementing WIA section 188, at 29 CFR part 37. 
However, this does not affect the legal requirement that all INA 
participants be Native American. Also, INA grantees are not obligated to 
serve populations other than those for which they were designated.



Sec.  668.640  What grievance systems must a section 166 program
provide?

    INA grantees must establish grievance procedures consistent with the 
requirements of WIA section 181(c) and 20 CFR 667.600.



Sec.  668.650  Can INA grantees exclude segments of the eligible
population?

    (a) No, INA grantees cannot exclude segments of the eligible 
population. INA grantees must document in their Two Year Plan that a 
system is in place to afford all members of the eligible population 
within the service area for which the grantee was designated an 
equitable opportunity to receive WIA services and activities.
    (b) Nothing in this section restricts the ability of INA grantees to 
target subgroups of the eligible population (for example, the disabled, 
substance abusers, TANF recipients, or similar categories), as outlined 
in an approved Two Year Plan. However, it is unlawful to target services 
to subgroups on grounds prohibited by WIA section 188 and 29 CFR part 
37, including tribal affilitation (which is considered national origin). 
Outreach efforts, on the other hand, may be targeted to any subgroups.



             Subpart G_Section 166 Planning/Funding Process



Sec.  668.700  What process must an INA grantee use to plan its
employment and training services?

    (a) An INA grantee may utilize the planning procedures it uses to 
plan other activities and services.
    (b) However, in the process of preparing its Two Year Plan for 
Native American WIA services, the INA grantee must consult with:
    (1) Customers or prospective customers of such services;
    (2) Prospective employers of program participants or their 
representatives;
    (3) Service providers, including local educational agencies, which 
can provide services which support or are complementary to the grantee's 
own services; and
    (4) Tribal or other community officials responsible for the 
development and administration of strategic community development 
efforts.



Sec.  668.710  What planning documents must an INA grantee submit?

    Each grantee receiving funds under WIA section 166 must submit to 
DINAP a comprehensive services plan and a projection of participant 
services and expenditures covering the two-year planning cycle. We will, 
in consultation with the Native American Advisory Council, issue budget 
and planning instructions which grantees must use when preparing their 
plan.



Sec.  668.720  What information must these planning documents contain?

    (a) The comprehensive services plan must cover the two Program Years 
included within a designation cycle. According to planning instructions 
issued by the Department, the comprehensive services plan must describe 
in narrative form:
    (1) The specific goals of the INA grantee's program for the two 
Program Years involved;
    (2) The method the INA grantee will use to target its services to 
specific segments of its service population;
    (3) The array of services which the INA grantee intends to make 
available;
    (4) The system the INA grantee will use to be accountable for the 
results of

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its program services. Such results must be judged in terms of the 
outcomes for individual participants and/or the benefits the program 
provides to the Native American community(ies) which the INA grantee 
serves. Plans must include the performance information required by Sec.  
668.620;
    (5) The ways in which the INA grantee will seek to integrate or 
coordinate and ensure nonduplication of its employment and training 
services with:
    (i) The One-Stop delivery system in its local workforce investment 
area, including a description of any MOU's which affect the grantee's 
participation;
    (ii) Other services provided by Local Workforce 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 the One-Stop system.
    (b) Eligible INA grantees must include in their plan narratives a 
description of activities planned under the supplemental youth program, 
including items described in paragraphs (a)(1) through (5) of this 
section.
    (c) INA grantees must be prepared to justify the amount of proposed 
Administrative Costs, utilizing the definition at 20 CFR 667.220.
    (d) INA grantees' plans must contain a projection of participant 
services and expenditures for each Program Year, consistent with 
guidance issued by the Department.



Sec.  668.730  When must these plans be submitted?

    (a) The two-year plans are due at a date specified by DINAP in the 
year in which the two-year designation cycle begins. We will announce 
exact submission dates in the biennial planning instructions.
    (b) Plans from INA grantees who are eligible for supplemental youth 
services funds must include their supplemental youth plans as part of 
their regular Two Year Plan.
    (c) INA grantees must submit modifications for the second year 
reflecting exact funding amounts, after the individual allotments have 
been determined. We will announce the time for their submission, which 
will be no later than June 1 prior to the beginning of the second year 
of the designation cycle.



Sec.  668.740  How will we review and approve such plans?

    (a) We will approve a grantee's planning documents before the date 
on which funds for the program become available unless:
    (1) The planning documents do not contain the information specified 
in the regulations in this part and Departmental planning guidance; or
    (2) The services which the INA grantee proposes are not permitted 
under WIA or applicable regulations.
    (b) We may approve a portion of the plan, and disapprove other 
portions. The grantee also has the right to appeal the decision to the 
Office of the Administrative Law Judges under the procedures at 20 CFR 
667.800 or 667.840. While the INA grantee exercises its right to appeal, 
the grantee must implement the approved portions of the plan.
    (c) If we disapprove all or part of an INA grantee's plan, and that 
disapproval is sustained in the appeal process, the INA grantee will be 
given the opportunity to amend its plan so that it can be approved.
    (d) If an INA grantee's plan is amended but is still disapproved, 
the grantee will have the right to appeal the decision to the Offices of 
the Administrative Law Judges under the procedures at 20 CFR 667.800 or 
667.840.



Sec.  668.750  Under what circumstances can we or the INA grantee
modify the terms of the grantee's plan(s)?

    (a) We may unilaterally modify the INA grantee's plan to add funds 
or, if required by Congressional action, to reduce the amount of funds 
available for expenditure.
    (b) The INA grantee may request approval to modify its plan to add, 
expand, delete, or diminish any service allowable under the regulations 
in this part. The INA grantee may modify its plan without our approval, 
unless the modification reduces the total number of participants to be 
served annually

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under the grantee's program by a number which exceeds 25 percent of the 
participants previously proposed to be served, or by 25 participants, 
whichever is larger.
    (c) We will act upon any modification within thirty (30) calendar 
days of receipt of the proposed modification. In the event that further 
clarification or modification is required, we may extend the thirty (30) 
day time frame to conclude appropriate negotiations.



                  Subpart H_Administrative Requirements



Sec.  668.800  What systems must an INA grantee have in place to
administer an INA program?

    (a) Each INA grantee must have a written system describing the 
procedures the grantee uses for:
    (1) The hiring and management of personnel paid with program funds;
    (2) The acquisition and management of property purchased with 
program funds;
    (3) Financial management practices;
    (4) A participant grievance system which meets the requirements in 
section 181(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 to determine the person's eligibility to receive program services;
    (2) The participant's signature certifying that all the eligibility 
information he or she provided is true to the best of his/her knowledge; 
and
    (3) The information necessary to comply with all program reporting 
requirements.



Sec.  668.810  What types of costs are allowable expenditures under
the INA program?

    Rules relating to allowable costs under WIA are covered in 20 CFR 
667.200 through 667.220.



Sec.  668.820  What rules apply to administrative costs under the
INA program?

    The definition and treatment of administrative costs are covered in 
20 CFR 667.210(b) and 667.220.



Sec.  668.825  Does the WIA administrative cost limit for States 
and local areas apply to section 166 grants?

    No, under 20 CFR 667.210(b), limits on administrative costs for 
section 166 grants will be negotiated with the grantee and identified in 
the grant award document.



Sec.  668.830  How should INA program grantees classify costs?

    Cost classification is covered in the WIA regulations at 20 CFR 
667.200 through 667.220. For purposes of the INA program, program costs 
also include costs associated with other activities such as Tribal 
Employment Rights Office (TERO), and supportive services, as defined in 
WIA section 101(46).



Sec.  668.840  What cost principles apply to INA funds?

    The cost principles described in OMB Circulars A-87 (for tribal 
governments), A-122 (for private non-profits), and A-21 (for educational 
institutions), and the regulations at 20 CFR 667.200(c), apply to INA 
grantees, depending on the nature of the grantee organization.



Sec.  668.850  What audit requirements apply to INA grants?

    The audit requirements established under the Department's 
regulations at 29 CFR part 99, which implement OMB Circular A-133, apply 
to all Native American WIA grants. These regulations, for all of WIA 
title I, are cited at 20 CFR 667.200(b). Audit resolution procedures are 
covered at 20 CFR 667.500 and 667.510.



Sec.  668.860  What cash management procedures apply to INA grant funds?

    INA grantees must draw down funds only as they actually need them. 
The U.S. Department of Treasury regulations which implement the Cash 
Management Improvement Act, found at 31 CFR part 205, apply by law to 
most recipients of Federal funds. Special rules

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may apply to those grantees required to keep their funds in interest-
bearing accounts, and to grantees participating in the demonstration 
under Public Law 102-477.



Sec.  668.870  What is ``program income'' and how is it regulated
in the INA program?

    (a) Program income is defined and regulated by WIA section 195(7), 
20 CFR 667.200(a)(5) and the applicable rules in 29 CFR parts 95 and 97.
    (b) For grants made under this part, program income does not include 
income generated by the work of a work experience participant in an 
enterprise, including an enterprise owned by an Indian tribe or Alaska 
Native entity, whether in the public or private sector.
    (c) Program income does not include income generated by the work of 
an OJT participant in an establishment under paragraph (b) of this 
section.



               Subpart I_Miscellaneous Program Provisions



Sec.  668.900  Does WIA provide regulatory and/or statutory waiver
authority?

    Yes, WIA section 166(h)(3) permits waivers of any statutory or 
regulatory requirement imposed upon INA grantees (except for the areas 
cited in Sec.  668.920). Such waivers may include those necessary to 
facilitate WIA support of long term community development goals.



Sec.  668.910  What information is required to document a requested waiver?

    To request a waiver, an INA grantee must submit a plan indicating 
how the waiver will improve the grantee's WIA program activities. We 
will provide further guidance on the waiver process, consistent with the 
provisions of WIA section 166(h)(3).



Sec.  668.920  What provisions of law or regulations 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).)



Sec.  668.930  May INA grantees combine or consolidate their
employment and training funds?

    Yes, INA grantees may consolidate their employment and training 
funds under WIA with assistance received from related programs in 
accordance with the provisions of the Indian Employment, Training and 
Related Services Demonstration Act of 1992 (Public Law 102-477) (25 
U.S.C. 3401 et seq.). Also, Federally-recognized tribes that administer 
INA funds and funds provided by more than one State under other sections 
of WIA title I may enter into an agreement with the Governors to 
transfer the State funds to the INA program. (WIA sec. 166(f) and 
(h)(6).)



Sec.  668.940  What is the role of the Native American Employment
and Training Council?

    The Native American Employment and Training Council is a body 
composed of representatives of the grantee community which advises the 
Secretary on all aspects of Native American employment and training 
program implementation. WIA section 166(h)(4) continues the Council 
essentially as it is currently constituted, with the exception that all 
the Council members no longer have to be Native American. However, the 
nature of the consultative process remains essentially unchanged. We 
continue to support the Council.



PART 669_NATIONAL FARMWORKER JOBS PROGRAM UNDER TITLE I OF THE
WORKFORCE INVESTMENT ACT--Table of Contents



                    Subpart A_Purpose and Definitions

Sec.
669.100 What is the purpose of the National Farmworker Jobs Program 
          (NFJP) and the other services and activities established under 
          WIA section 167?
669.110 What definitions apply to this program?
669.120 How do we administer the NFJP program?
669.130 What unit within the Department administers the National 
          Farmworker Jobs Program funded under WIA section 167?

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669.140 How does the Division of Seasonal and Farmworker Programs (DSFP) 
          assist the MSFW grantee organizations to serve farmworker 
          customers?
669.150 How are regulations established for this program?
669.160 How do we consult with NFJP organizations in developing rules, 
          regulations and standards of accountability, and other policy 
          guidance for the NFJP?
669.170 What WIA regulations apply to the programs funded under WIA 
          section 167?

 Subpart B_The Service Delivery System for the National Farmworker Jobs 
                                 Program

669.200 Who is eligible to receive an NFJP grant?
669.210 How does an eligible entity become an NFJP grantee?
669.220 What is the role of the NFJP grantee in the One-Stop delivery 
          system?
669.230 Can an NFJP grantee's designation be terminated?
669.240 How will we use funds appropriated under WIA section 167 for the 
          NFJP?

 Subpart C_The National Farmworker Jobs Program Customers and Available 
                            Program Services

669.300 What are the general responsibilities of the NFJP grantees?
669.310 What are the basic components of an NFJP service delivery 
          strategy?
669.320 Who is eligible to receive services under the NFJP?
669.330 How are services delivered to the customer?
669.340 What core services are available to eligible MSFW's?
669.350 How are core services delivered to MSFW's?
669.360 May grantees provide emergency assistance to MSFW's?
669.370 What intensive services may be provided to eligible MSFW's?
669.380 What is the objective assessment that is authorized as an 
          intensive service?
669.400 What are the elements of the Individual Employment Plan that is 
          authorized as an intensive service?
669.410 What training services may be provided to eligible MSFW's?
669.420 What must be included in an on-the-job training contract?
669.430 What Related Assistance services may be provided to eligible 
          farmworkers?
669.440 When may farmworkers receive related assistance?

   Subpart D_Performance Accountability, Planning and Waiver Provision

669.500 What performance measures and standards apply to the NFJP?
669.510 What planning documents must an NFJP grantee submit?
669.520 What information is required in the NFJP grant plans?
669.530 What are the submission dates for these plans?
669.540 Under what circumstances are the terms of the grantee's plan 
          modified by the grantee or the Department?
669.550 How are costs classified under the NFJP?
669.555 Do the WIA administrative cost limits for States and local areas 
          apply to NFJP grants?
669.560 Are there regulatory and/or statutory waiver provisions that 
          apply to WIA section 167?
669.570 What information is required to document a requested waiver?

                    Subpart E_The MSFW Youth Program

669.600 What is the purpose of the WIA section 167 MSFW Youth Program?
669.610 What is the relationship between the MSFW youth program and the 
          NFJP authorized at WIA section 167?
669.620 How do the MSFW youth program regulations apply to the NFJP 
          programs authorized under WIA section 167?
669.630 What are the requirements for designation as an ``MSFW youth 
          program grantee''?
669.640 What is the process for applying for designation as an MSFW 
          youth program grantee?
669.650 How are MSFW youth funds allocated to section 167 youth 
          grantees?
669.660 What planning documents and information are required in the 
          application for MSFW youth grants and when must they be filed?
669.670 Who is eligible to receive services under the section 167 MSFW 
          youth program?
669.680 What activities and services may be provided under the MSFW 
          youth program?

    Authority: Section 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49445, Aug. 11, 2000, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec.  669.100  What is the purpose of the National Farmworker
Jobs Program (NFJP) and the other services and activities established
under WIA section 167?

    The purpose of the NFJP, and the other services and activities 
established under WIA section 167, is to

[[Page 136]]

strengthen the ability of eligible migrant and seasonal farmworkers and 
their families to achieve economic self-sufficiency. This part provides 
the regulatory requirements applicable to the expenditure of WIA section 
167 funds for such programs, services and activities.



Sec.  669.110  What definitions apply to this program?

    In addition to the definitions found in WIA sections 101 and 167 and 
in 20 CFR 660.300, the following definitions apply to programs under 
this part:
    Allowances means direct payments, which must not exceed the higher 
of the State or Federal minimum wage, made to NFJP participants during 
their enrollment to enable them to participate in intensive or training 
services.
    Capacity enhancement means the technical assistance we provide to 
grantees and grantee staff by the Department to improve the quality of 
the program and the delivery of program services to NFJP participants.
    Dependent means an individual who:
    (1) Was claimed as a dependent on the qualifying farmworker's 
federal income tax return for the previous year; or
    (2) Is the spouse of the qualifying farmworker; or
    (3) If not claimed as a dependent for federal income tax purposes, 
is able to establish:
    (i) A relationship as the farmworker's
    (A) Child, grandchild, great grandchild, including legally adopted 
children;
    (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 
eligible farmworker's family during the eligibility determination 
period.
    Disadvantaged means a farmworker whose income, for any 12 
consecutive months out of the 24 months immediately before the 
farmworker applies for the program, does not exceed the higher of either 
the poverty line or 70 percent of the lower living standard income 
level, adjusted for the farmworker's family size and including the 
income of all wage earners, except when its inclusion would be unjust 
due to unstable conditions of the family unit.
    DSFP means the Division of Seasonal Farmworker Programs within the 
Employment and Training Administration of the Department, or a successor 
organizational unit.
    Eligibility determination period means any consecutive 12-month 
period within the 24-month period immediately preceding the date of 
application for the NFJP by the applicant farmworker.
    Emergency assistance means assistance that addresses immediate needs 
of farmworkers and their families, provided by NFJP grantees. Except for 
evidence to support legal working status in the United States and 
Selective Service registration, where applicable, the applicant's self-
attestation is accepted as eligibility for emergency assistance.
    Farmwork means those occupations and industries within agricultural 
production and agricultural services that we identify for the National 
Farmworker Jobs Program.
    Housing development assistance within the NFJP, is a type of related 
assistance consisting of an organized program of education and on-site 
demonstrations about the basic elements of family housing and may 
include financing, site selection, permits and construction skills, 
leading towards home ownership.
    MOU means Memorandum of Understanding.
    MSFW means a Migrant or Seasonal Farmworker under WIA section 167.
    MSFW program grantee means an entity to which we directly award a 
WIA grant to carry out the MSFW program in one or more designated States 
or substate areas.
    National Farmworker Jobs Program (NFJP) is the nationally 
administered

[[Page 137]]

workforce investment program for farmworkers established by WIA section 
167 as a required partner of the One-Stop system.
    Related assistance means short-term forms of direct assistance 
designed to assist farmworkers and their families to retain or stabilize 
their agricultural employment or enrollment in the NFJP.
    Self-certification means a farmworker's signed attestation that the 
information he/she submits to demonstrate eligibility for the NFJP is 
true and accurate.
    Service area means the geographical jurisdiction in which a WIA 
section 167 grantee is designated to operate.
    Work experience means a planned, structured learning experience that 
takes place in a workplace for a limited period of time. Work experience 
may be paid or unpaid, as appropriate.



Sec.  669.120  How do we administer the NFJP program?

    This program is centrally administered by the Department of Labor in 
a manner consistent with the requirements of WIA section 167. As 
described in Sec.  669.210, we designate grantees using procedures 
consistent with standard Federal government competitive procedures. We 
award other grants and contracts using similar competitive procedures.



Sec.  669.130  What unit within the Department administers the
National Farmworker Jobs Program funded under WIA section 167?

    We have designated the Division of Seasonal Farmworker Programs 
(DSFP), or its successor organization, within the Employment and 
Training Administration, as the organizational unit that administers the 
NFJP and other MSFW programs at the Federal level.



Sec.  669.140  How does the Division of Seasonal Farmworker 
Programs (DSFP) assist the MSFW grantee organizations to serve 
farmworker customers?

    We provide technical assistance and training to MSFW grantees for 
the purposes of program implementation and program performance 
management leading to enhancement of services to and continuous 
improvement in the employment outcomes of farmworkers.



Sec.  669.150  How are regulations established for this program?

    In developing regulations for WIA section 167, we consult with the 
Migrant and Seasonal Farmworker Employment and Training Advisory 
Committee. The regulations and program guidance consider the economic 
circumstances and demographics of eligible migrant and seasonal 
farmworkers.



Sec.  669.160  How do we consult with NFJP organizations in 
developing rules, regulations and standards of accountability,
and other policy guidance for the NFJP?

    (a) We consider the NFJP grantee community as a full partner in the 
development of policies for the NFJPs under the Act.
    (b) We have established and continue to support the Federal MSFW 
Employment and Training Advisory Committee. Through the Advisory 
Committee, we actively seek and consider the views of the grantee 
community before establishing policies and/or program regulations, 
according to the requirements of WIA section 167.



Sec.  669.170  What WIA regulations apply to the programs funded
under WIA section 167?

    (a) The regulations found in this part;
    (b) The general administrative requirements found in 20 CFR part 
667, including the regulations concerning Complaints, Investigations and 
Hearings found at 20 CFR part 667, subpart E through subpart H, which 
cover programs under WIA section 167;
    (c) The Department's regulations codifying the common rules 
implementing Office of Management and Budget (OMB) Circulars, which 
generally apply to Federal programs carried out by State and local 
governments and nonprofit organizations at 29 CFR parts 95, 96, 97, and 
99, as applicable.
    (d) The regulations on partnership responsibilities contained in 20 
CFR parts 661 (Statewide and Local Governance) and 662 (the One-Stop 
System).
    (e) The Department's regulations at 29 CFR part 37, which implement 
the

[[Page 138]]

nondiscrimination provisions of WIA section 188, apply to recipients of 
financial assistance under WIA section 167.



 Subpart B_The Service Delivery System for the National Farmworker Jobs 
                                 Program



Sec.  669.200  Who is eligible to receive a NFJP grant?

    (a) To be eligible to receive a grant under this section, an entity 
must have:
    (1) An understanding of the problems of eligible migrant and 
seasonal farmworkers and their dependents;
    (2) A familiarity with the agricultural industry and the labor 
market needs of the geographic area to be served;
    (3) The capacity to effectively administer a diversified program of 
workforce investment activities and related assistance for eligible 
migrant and seasonal farmworkers (including farmworker youth) as 
described in paragraph (b) of this section;
    (4) The capacity to work effectively as a One-Stop partner.
    (b) For purposes of paragraph (a)(3) of this section, an entity's 
``capacity to effectively administer'' a program may be 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 
may demonstrate its capacity to work effectively as a One-Stop partner 
through its existing relationships with Local Workforce Investment 
Boards and other One-Stop partners, as evidenced through One-Stop system 
participation and successful MOU negotiations.
    (d) As part of the evaluation of the applicant's capacity to work 
effectively as a One-Stop partner under paragraph (a)(4) of this 
section:
    (1) The Grant Officer must determine whether the policies or actions 
of any Local Board established under the authorty of the alternative 
entity provision of WIA section 117(i) and 20 CFR 661.330:
    (i) Preclude One-Stop system participation by the applicant or 
existing NFJP grantee; or
    (ii) For the prior program year, contributed to a failure to reach 
agreement on the terms of the MOU required under Sec.  669.220; and
    (2) If the Grant Officer's determinations under paragraph (d)(1) of 
this section are affirmative, then the Grant Officer may consider this 
fact when weighing the capacity of the competitors.



Sec.  669.210  How does an eligible entity become an NFJP grantee?

    To become an NFJP grantee and receive a grant under this subpart, an 
applicant must respond to a Solicitation for Grant Applications (SGA). 
The SGA may contain additional requirements for the grant application or 
the grantee's two-year plan. Under the SGA, grantees will be selected 
using standard Federal Government competitive procedures. The entity's 
proposal must describe a two-year strategy for meeting the needs of 
eligible migrant and seasonal farmworkers in the geographic area the 
entity seeks to serve.



Sec.  669.220  What is the role of the NFJP grantee in the 
One-Stop delivery system?

    (a) In those local workforce investment areas where the grantee 
operates its NFJP, the grantee is a required partner of the local One-
Stop delivery system and is subject to the provisions relating to such 
partners described in 20 CFR part 662. Consistent with those provisions, 
the grantee and the Local Board must negotiate an MOU which meets the 
requirements of 20 CFR 662.300 and sets forth their respective 
responsibilities for making the full range of services available through 
the One-Stop system available to farmworkers. Where the Local Board is 
an alternative entity under 20 CFR 661.330, the NFJP grantee must 
negotiate with the Board on the terms of its MOU and the scope of its 
on-going role in the local workforce investment system, as specified in 
20 CFR 661.310(b)(2). In local areas where the grantee does not operate 
its NFJP and there is a large concentration of MSFW's, the grantee

[[Page 139]]

may consider the availability of electronic connections and other means 
to participate in the One-stop system in that area, in order to serve 
those individuals.
    (b) The MOU must provide for appropriate and equitable services to 
MSFW's, and may include costs of services to MSFW's incurred by the One-
Stop that extend beyond Wagner-Peyser funded services and activities.



Sec.  669.230  Can an NFJP grantee's designation be terminated?

    Yes, a grantee's designation may be terminated for cause:
    (a) By the Secretary, in emergency circumstances when such action is 
necessary to protect the integrity of Federal funds or ensure the proper 
operation of the program. Any grantee so terminated will be provided 
with written notice and an opportunity for a hearing within 30 days 
after the termination (WIA sec. 184(e)); or
    (b) By the Grant Officer, if there is a substantial or persistent 
violation of the requirements in the Act or the WIA regulations. In such 
a case, the Grant Officer must provide the grantee with 60 days prior 
written notice, stating the reasons why termination is proposed, and the 
applicable appeal procedures.



Sec.  669.240  How do we use funds appropriated under WIA 
section 167 for the NFJP?

    (a) At least 94 percent of the funds appropriated each year for WIA 
section 167 activities must be allocated to State service areas, based 
on the distribution of the eligible MSFW population determined under a 
formula which has been published in the Federal Register. Grants are 
awarded under a competitive process for the provision of services to 
eligible farmworkers within each service area.
    (b) The balance, up to 6 percent of the appropriated funds, will be 
used for discretionary purposes, for such activities as grantee 
technical assistance and support of farmworker housing activities.



 Subpart C_The National Farmworker Jobs Program Customers and Available 
                            Program Services



Sec.  669.300  What are the general responsibilities of the NFJP grantees?

    Each grantee is responsible for providing needed services in 
accordance with a service delivery strategy described in its approved 
grant plan. These services must reflect the needs of the MSFW population 
in the service area and include the services and training activities 
that are necessary to achieve each participant's employment goals.



Sec.  669.310  What are the basic components of an NFJP service
delivery strategy?

    The NFJP service delivery strategy must include:
    (a) A customer-centered case management approach;
    (b) The provision of workforce investment activities, which include 
core services, intensive services, and training services, as described 
in WIA section 134, as appropriate;
    (c) The arrangements under the MOU's with the applicable Local 
Workforce Investment Boards for the delivery of the services available 
through the One-Stop system to MSFW's; and
    (d) Related assistance services.



Sec.  669.320  Who is eligible to receive services under the NFJP?

    Disadvantaged migrant and seasonal farmworkers, as defined in Sec.  
669.110, and their dependents are eligible for services funded by the 
NFJP.



Sec.  669.330  How are services delivered to the customer?

    To ensure that all services are focused on the customer's needs, 
services are provided through a case-management approach and may 
include: Core, intensive and training services; and related assistance, 
which includes emergency assistance and supportive services. The basic 
services and delivery of case-management activities are further 
described at Sec. Sec.  669.340 through 669.410. Consistent with 20 CFR 
part 663, before receiving intensive services, a participant must 
receive at least one core

[[Page 140]]

service, and, prior to receiving training services, a participant must 
receive at least one intensive service.



Sec.  669.340  What core services are available to eligible MSFW's?

    The core services identified in WIA section 134(d)(2) are available 
to eligible MSFW's.



Sec.  669.350  How are core services delivered to MSFW's?

    (a) The full range of core services are available to MSFW's, as well 
as other individuals, at One-Stop Centers, as described in 20 CFR part 
662.
    (b) Core services must be made available through the One-Stop 
delivery system. The delivery of core services to MSFW's, by the NFJP 
grantee and through the One-Stop system, must be discussed in the 
required MOU between the Local Board and the NFJP grantee.



Sec.  669.360  May grantees provide emergency assistance to MSFW's?

    (a) Yes, Emergency Assistance (as defined in Sec.  669.110) is a 
form of the related assistance that is authorized under WIA section 
167(d) and may be provided by a grantee as described in the grant plan.
    (b) In providing emergency assistance, the NFJP grantee may use an 
abbreviated eligibility determination process that accepts the 
applicant's self-attestation as final evidence of eligibility, except 
that self-attestation may not be used to establish the requirements of 
legal working status in the United States, and Selective Service 
registration, where applicable.



Sec.  669.370  What intensive services may be provided to eligible MSFW's?

    (a) Intensive services available to farmworkers include those 
described in WIA section 134(d)(3)(C).
    (b) Intensive services may also include:
    (1) Dropout prevention activities;
    (2) Allowance payments;
    (3) Work experience, which:
    (i) Is designed to promote the development of good work habits and 
basic work skills at the work-site (work experience may be conducted 
with the public and private non-profit sectors and with the private for-
profit sector when the design for this service is described in the 
approved grant plan); and which:
    (ii)(A) May be paid. Paid work experience must compensate 
participants at no less than the higher of the applicable State or 
Federal minimum wage; or
    (B) May be unpaid. Unpaid work experience must provide tangible 
benefits, in lieu of wages, to those who participate in unpaid work 
experience and the strategy for ensuring that tangible benefits are 
received must be described in the approved grant plan. The benefits to 
the participant must be commensurate with the participant's contribution 
to the hosting organization;
    (4) Literacy and English-as-a-Second language; and
    (5) Other services identified in the approved grant plan.



Sec.  669.380  What is the objective assessment that is authorized
as an intensive service?

    (a) An objective assessment is a procedure designed to 
comprehensively assess the skills, abilities, and interests of each 
employment and training participant through the use of diagnostic 
testing and other assessment tools. The methods used by the grantee in 
conducting the objective assessment may include:
    (1) Structured in-depth interviews;
    (2) Skills and aptitude assessments;
    (3) Performance assessments (for example, skills or work samples, 
including those that measure interest and capability to train in 
nontraditional employment);
    (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 the 
grantee staff to remain in close consultation with each participant to 
continuously obtain current information about the participant's progress 
that may be relevant to his/her Individual Employment Plan (IEP).



Sec.  669.400  What are the elements of the Individual Employment
Plan that is authorized as an intensive service?

    The elements of the Individual Employment Plan (IEP) are:

[[Page 141]]

    (a) Joint development: The grantee develops the IEP in partnership 
with the participant;
    (b) Customer focus: The combination of services chosen with the 
participant must be consistent with the results of any objective 
assessment, responsive to the expressed goals of the participant, and 
must include periodic evaluation of planned goals and a record of 
accomplishments in consultation with the participant;
    (c) Length/type of service: The type and duration of intensive or 
training services 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 and training-related supportive services; and
    (d) Privacy: As a customer-centered case management tool, an IEP is 
a personal record and must receive confidential treatment.



Sec.  669.410  What training services may be provided to eligible MSFW's?

    (a) Training services include those described in WIA sections 
134(d)(4)(D) and 167(d), and may be described in the IEP and may 
include:
    (1) On-the-job training activities under a contract between the 
participating employer and the grantee;
    (2) Training-related supportive services; and
    (b) Other training activities identified in the approved grant plan 
such as training in self-employment skills and micro-enterprise 
development.



Sec.  669.420  What must be included in an on-the-job training contract?

    At a minimum, an on-the-job training contract must comply with the 
requirements of WIA sections 195(4) and 101(31) and must include:
    (a) The occupation(s) for which training 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 
provided by the employer; and
    (h) The employer's agreement to maintain and make available time and 
attendance, payroll and other records to support amounts claimed by the 
employer for reimbursement under the OJT contract.



Sec.  669.430  What Related Assistance services may be provided 
to eligible farmworkers?

    Related Assistance may include such services 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 not enrolled in intensive or training services.



Sec.  669.440  When may farmworkers receive related assistance?

    Farmworkers may receive related assistance services when the need 
for the related assistance is documented for any eligible farmworker or 
dependent in a determination made by the grantee or in a statement by 
the farmworker.



   Subpart D_Performance Accountability, Planning and Waiver Provision



Sec.  669.500  What performance measures and standards apply to the NFJP?

    (a) The NFJP will use the core indicators of performance common to 
the adult and youth programs, described in 20 CFR part 666. The levels 
of performance for the farmworker indicators will be established in a 
negotiation between the Department and the grantee. The levels must take 
into account the characteristics of the population to be served and the 
economic conditions in the service area. Proposed levels of performance 
must be included in the grantee plan submission, and the

[[Page 142]]

agreed-upon levels must be included in the approved plan.
    (b) We may develop additional performance indicators with 
appropriate levels of performance for evaluating programs that serve 
farmworkers and which reflect the State service area economy and local 
demographics of eligible MSFW's. The levels of performance for these 
additional indicators must be negotiated with the grantee and included 
in the approved plan.



Sec.  669.510  What planning documents must an NFJP grantee submit?

    Each grantee receiving WIA section 167 program funds must submit to 
DSFP a comprehensive service delivery plan and a projection of 
participant services and expenditures covering the two-year designation 
cycle.



Sec.  669.520  What information is required in the NFJP grant plans?

    An NFJP grantee's biennial plan must describe:
    (a) The employment and education needs of the farmworker population 
to be served;
    (b) The manner in which proposed services to farmworkers and their 
families will strengthen their ability to obtain or retain employment or 
stabilize their agricultural employment;
    (c) The related assistance and supportive services to be provided 
and the manner in which such assistance and services are to be 
coordinated with other available services;
    (d) The performance indicators and proposed levels of performance 
used to assess the performance of such entity, including the specific 
goals of the grantee's program for the two Program Years involved;
    (e) The method the grantee will use to target its services on 
specific segments of the eligible population, as appropriate;
    (f) The array of services which the grantee intends to make 
available, with costs specified on forms we prescribe. These forms will 
indicate how many participants the grantee expects to serve, by 
activity, the results expected under the grantee's plan, and the 
anticipated expenditures by cost category; and
    (g) Its response to any other requirements set forth in the SGA 
issued under Sec.  669.210.



Sec.  669.530  What are the submission dates for these plans?

    We will announce plan submission dates in the SGA issued under Sec.  
669.220.



Sec.  669.540  Under what circumstances are the terms of the
grantee's plan modified by the grantee or the Department?

    (a) Plans must be modified to reflect the funding level for the 
second year of the designation cycle. We will provide instructions for 
when to submit modifications for second year funding, which will 
generally be no later than June 1 prior to the beginning of the second 
year of the designation cycle.
    (b) We may unilaterally modify the grantee's plan to add funds or, 
if the total amount of funds available for allotment is reduced by 
Congress, to reduce each grantee's grant amount.
    (c) The grantee may modify its plan to add, delete, expand, or 
reduce any part of the program plan or allowable activities. Such 
modifications may be made by the grantee without our approval except 
where the modification reduces the total number of participants to be 
served annually under intensive and/or training services by 15 percent 
or more, in which case the plan may only be modified with Grant Officer 
approval.
    (d) If the grantee is approved for a regulatory waiver under 
Sec. Sec.  669.560 and 669.570, the grantee must submit a modification 
of its service delivery plan to reflect the effect of the waiver.



Sec.  669.550  How are costs classified under the 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 
supportive services, including allocated staff costs; and
    (2) All other program services, including allocated staff costs.

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Sec.  669.555  Do the WIA administrative cost limits for States
and local areas apply to NFJP grants?

    No, under 20 CFR 667.210(b), limits on administrative costs for NFJP 
grants will be negotiated with the grantee and identified in the grant 
award document.



Sec.  669.560  Are there regulatory and/or statutory waiver
provisions that apply to WIA section 167?

    (a) The statutory waiver provision at WIA section 189(i) does not 
apply to WIA section 167.
    (b) NFJP grantees may request waiver of any regulatory provisions 
only when such regulatory provisions are:
    (1) Not required by WIA;
    (2) Not related to wage and labor standards, nondisplacement 
protection, worker rights, participation and protection of workers and 
participants, and eligibility of participants, grievance procedures, 
judicial review, nondiscrimination, allocation of funds, procedures for 
review and approval of plans; and
    (3) Not related to the key reform principles embodied in WIA, 
described in 20 CFR 661.400.



Sec.  669.570  What information is required to document a
requested waiver?

    To request a waiver, a grantee must submit a waiver plan that:
    (a) Describes the goals of the waiver, the expected programmatic 
outcomes, and how the waiver will improve the provision of WIA 
activities;
    (b) Is consistent with guidelines we establish and the waiver 
provisions at 20 CFR 661.400 through 661.420; and
    (c) Includes a modified service delivery plan reflecting the effect 
of requested waiver.



                    Subpart E_The MSFW Youth Program



Sec.  669.600  What is the purpose of the WIA section 167 MSFW
Youth Program?

    The purpose of the MSFW youth program is to provide an effective and 
comprehensive array of educational opportunities, employment skills, and 
life enhancement activities to at-risk and out-of-school MSFW youth that 
lead to success in school, economic stability and development into 
productive members of society.



Sec.  669.610  What is the relationship between the MSFW youth
program and the NFJP authorized at WIA section 167?

    The MSFW youth program is funded under WIA section 127(b)(1)(A)(iii) 
to provide farmworker youth activities under the auspices of WIA section 
167. These funds are specifically earmarked for MSFW youth. Funds 
provided for the section 167 program may also be used for youth, but are 
not limited to this age group.



Sec.  669.620  How do the MSFW youth program regulations apply
to the NFJP program authorized under WIA section 167?

    (a) This subpart applies only to the administration of grants for 
MSFW youth programs funded under WIA section 127(b)(1)(A)(iii).
    (b) The regulations for the NFJP in this part apply to the 
administration of the MSFW youth program, except as modified in this 
subpart.



Sec.  669.630  What are the requirements for designation as an
``MSFW youth program grantee''?

    Any entity that meets the requirements described in the SGA may 
apply for designation as an ``MSFW youth program grantee'' consistent 
with requirements described in the SGA. The Department gives special 
consideration to an entity in any service area for which the entity has 
been designated as a WIA section 167 NFJP program grantee.



Sec.  669.640  What is the process for applying for designation
as an MSFW youth program grantee?

    (a) To apply for designation as an MSFW youth program grantee, 
entities must respond to an SGA by submitting a plan that meets the 
requirements of WIA section 167(c)(2) and describes a two-year strategy 
for meeting the needs of eligible MSFW youth in the service area the 
entity seeks to serve.
    (b) The designation process is conducted competitively (subject to 
Sec.  669.210) through a selection process

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distinct from the one used to select WIA section 167 NFJP grantees.



Sec.  669.650  How are MSFW youth funds allocated to section 167 youth grantees?

    The allocation of funds among entities designated as WIA section 167 
MSFW Youth Program grantees is based on the comparative merits of the 
applications, in accordance with criteria set forth in the SGA. However, 
we may include criteria in the SGA that promote a geographical 
distribution of funds and that encourages both large- and small-scale 
programs.



Sec.  669.660  What planning documents and information are required
in the application for MSFW youth grants and when must they be filed?

    The required planning documents and other required information and 
the submission dates for filing are described in the SGA.



Sec.  669.670  Who is eligible to receive services under the
section 167 MSFW youth program?

    Disadvantaged youth, ages 14 through 21, who are individually 
eligible or are members of eligible families under the WIA section 167 
NFJP may receive these services.



Sec.  669.680  What activities and services may be provided under
the MSFW youth program?

    (a) Based on an evaluation and assessment of the needs of MSFW youth 
participants, grantees may provide activities and services to MSFW youth 
that include:
    (1) Intensive services and training services, as described in 
Sec. Sec.  669.400 and 669.410;
    (2) Life skills activities which may include self and interpersonal 
skills development;
    (3) Community service projects;
    (4) Small business development technical assistance and training in 
conjunction with entrepreneurial training;
    (5) Supportive services including the related assistance services, 
described in Sec.  669.430; and
    (b) Other activities and services that conform to the use of funds 
for youth activities described in 20 CFR part 664.



PART 670_THE JOB CORPS UNDER TITLE I OF THE WORKFORCE INVESTMENT ACT
--Table of Contents



                       Subpart A_Scope and Purpose

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 Protection and Maintenance of Facilities

670.200 Who decides where Job Corps centers will be located?
670.210 How are center facility improvements and new construction 
          handled?
670.220 Are we responsible for the protection and maintenance of center 
          facilities?

          Subpart C_Funding and Selection of Service Providers

670.300 What entities are eligible to receive funds to operate centers 
          and provide training and operational support services?
670.310 How are entities selected to receive funding?
670.320 What are the requirements for award of contracts and payments to 
          Federal agencies?

Subpart D_Recruitment, Eligibility, Screening, Selection and Assignment, 
                             and Enrollment

670.400 Who is eligible to participate in the Job Corps program?
670.410 Are there additional factors which are considered in selecting 
          an eligible applicant for enrollment?
670.420 Are there any special requirements for enrollment related to the 
          Military Selective Service Act?
670.430 What entities conduct outreach and admissions activities for the 
          Job Corps program?
670.440 What are the responsibilities of outreach and admissions 
          agencies?
670.450 How are applicants who meet eligibility and selection criteria 
          assigned to centers?
670.460 What restrictions are there on the assignment of eligible 
          applicants for nonresidential enrollment in Job Corps?
670.470 May a person who is determined to be ineligible or an individual 
          who is denied enrollment appeal that decision?
670.480 At what point is an applicant considered to be enrolled in Job 
          Corps?
670.490 How long may a student be enrolled in Job Corps?

[[Page 145]]

           Subpart E_Program Activities and Center Operations

670.500 What services must Job Corps centers provide?
670.505 What types of training must Job Corps centers provide?
670.510 Are Job Corps center operators responsible for providing all 
          vocational training?
670.515 What responsibilities do the center operators have in managing 
          work-based learning?
670.520 Are students permitted to hold jobs other than work-based 
          learning opportunities?
670.525 What residential support services must Job Corps center 
          operators provide?
670.530 Are Job Corps centers required to maintain a student 
          accountability system?
670.535 Are Job Corps centers required to establish behavior management 
          systems?
670.540 What is Job Corps' zero tolerance policy?
670.545 How does Job Corps ensure that students receive due process in 
          disciplinary actions?
670.550 What responsibilities do Job Corps centers have in assisting 
          students with child care needs?
670.555 What are the center's responsibilities in ensuring that 
          students' religious rights are respected?
670.560 Is Job Corps authorized to conduct pilot and demonstration 
          projects?

                        Subpart F_Student Support

670.600 Is government-paid transportation provided to Job Corps 
          students?
670.610 When are students authorized to take leaves of absence from 
          their Job Corps centers?
670.620 Are Job Corps students eligible to receive cash allowances and 
          performance bonuses?
670.630 Are student allowances subject to Federal Payroll Taxes?
670.640 Are students provided with clothing?

               Subpart G_Placement and Continued Services

670.700 What are Job Corps centers' responsibilities in preparing 
          students for placement services?
670.710 What placement services are provided 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 Connections

670.800 How do Job Corps centers and service providers become involved 
          in their local communities?

           Subpart I_Administrative and Management Provisions

670.900 Are damages caused by the acts or omissions of students eligible 
          for payment under the Federal Tort Claims Act?
670.905 Are loss and damages that occur to persons or personal property 
          of students at Job Corps centers eligible for reimbursement?
670.910 If a student is injured in the performance of duty as a Job 
          Corps Student, what benefits may they receive?
670.915 When is a Job Corps student considered to be in the performance 
          of duty?
670.935 How are students protected from unsafe or unhealthy situations?
670.940 What are the requirements for criminal law enforcement 
          jurisdiction on center property?
670.945 Are Job Corps operators and service providers authorized to pay 
          State or local taxes on gross receipts?
670.950 What are the financial management responsibilities of Job Corps 
          center operators and other service providers?
670.955 Are center operators and service providers subject to Federal 
          audits?
670.960 What are the procedures for management of student records?
670.965 What procedures apply to disclosure of information about Job 
          Corps students and program activities?
670.970 What are the reporting requirements for center operators and 
          operational support service providers?
670.975 How is the performance of the Job Corps program assessed?
670.980 What are the indicators of performance for Job Corps?
670.985 What happens if a center operator, screening and admissions 
          contractor or other service provider fails to meet the 
          expected levels of performance?
670.990 What procedures are available to resolve complaints and 
          disputes?
670.991 How does Job Corps ensure that complaints or disputes are 
          resolved in a timely fashion?
670.992 How does Job Corps ensure that centers or other service 
          providers comply with the Act and the WIA regulations?
670.993 How does Job Corps ensure that contract disputes will be 
          resolved?
670.994 How does Job Corps resolve disputes between DOL and other 
          Federal Agencies?

[[Page 146]]

670.995 What DOL equal opportunity and nondiscrimination regulations 
          apply to Job Corps?

    Authority: Subtitle C of title I, sec. 506(c), Pub. L. 105-220, 112 
Stat. 936 (20 U.S.C. 2881 et seq. and 9276(c)); 5 U.S.C. 301; Executive 
Order 13198, 66 FR 8497, 3 CFR 2001 Comp., p. 750; Executive Order 
13279, 67 FR 77141, 3 CFR 2002 Comp., p. 258.

    Source: 65 FR 49450, Aug. 11, 2000, unless otherwise noted.



                       Subpart A_Scope and Purpose



Sec.  670.100  What is the scope of this part?

    The regulations in this part are an outline of the requirements that 
apply to the Job Corps program. More detailed policies and procedures 
are contained in a Policy and Requirements Handbook issued by the 
Secretary. Throughout this part, phrases like ``according to 
instructions (procedures) issued by the Secretary'' refer to the Policy 
and Requirements Handbook and other Job Corps directives.



Sec.  670.110  What is the Job Corps program?

    Job Corps is a national program that operates in partnership with 
States and communities, local Workforce Investment Boards, youth 
councils, One-Stop Centers and partners, and other youth programs to 
provide education and training, primarily in a residential setting, for 
low income young people. The objective of Job Corps is to provide young 
people with the skills they need to obtain and hold a job, enter the 
Armed Forces, or enroll in advanced training or further education.



Sec.  670.120  What definitions apply to this part?

    The following definitions apply to this part:
    Absent Without Official Leave (AWOL) means an adverse enrollment 
status to which a student is assigned based on extended, unapproved 
absence from his/her assigned center or off-center place of duty. 
Students do not earn Job Corps allowances while in AWOL status.
    Applicable local board means a local Workforce Investment Board 
that:
    (1) Works with a Job Corps center and provides information on local 
demand occupations, employment opportunities, and the job skills needed 
to obtain the opportunities, and
    (2) Serves communities in which the graduates of the Job Corps seek 
employment when they leave the program.
    Capital improvement means any modification, addition, restoration or 
other improvement:
    (1) Which increases the usefulness, productivity, or serviceable 
life of an existing site, facility, building, structure, or major item 
of equipment;
    (2) Which is classified for accounting purposes as a ``fixed 
asset;'' and
    (3) The cost of which increases the recorded value of the existing 
building, site, facility, structure, or major item of equipment and is 
subject to depreciation.
    Center means a facility and an organizational entity, including all 
of its parts, providing Job Corps training and designated as a Job Corps 
center.
    Center operator means a Federal, State or local agency, or a 
contractor that runs a center under an agreement or contract with DOL.
    Civilian conservation center (CCC) means a center operated on public 
land under an agreement between DOL and another Federal agency, which 
provides, in addition to other training and assistance, programs of 
work-based learning to conserve, develop, or manage public natural 
resources or public recreational areas or to develop community projects 
in the public interest.
    Contract center means a Job Corps center operated under a contract 
with DOL.
    Contracting officer means the Regional Director or other official 
authorized to enter into contracts or agreements on behalf of DOL.
    Enrollee means an individual who has voluntarily applied for, been 
selected for, and enrolled in the Job Corps program, 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 by which individual formally becomes a 
student in the Job Corps program.
    Graduate means an enrollee who has:

[[Page 147]]

    (1) Completed the requirements of a vocational training program, or 
received a secondary school diploma or its equivalent as a result of 
participating in the Job Corps program; and
    (2) Achieved job readiness and employment skills as a result of 
participating in the Job Corps program.
    Individual with a disability means an individual with a disability 
as defined in section 3 of the Americans with Disabilities Act of 1990 
(42 U.S.C. 12102).
    Interagency agreement means a formal agreement between DOL and 
another Federal agency administering and operating centers. The 
agreement establishes procedures for the funding, administration, 
operation, and review of those centers as well as the resolution of any 
disputes.
    Job Corps means the agency of the Department established by section 
143 of the Workforce Investment Act of 1998 (WIA) (20 U.S.C. 9201 et 
seq.) to perform those functions of the Secretary of Labor set forth in 
subtitle C of WIA Title I.
    Job Corps Director means the chief official of the Job Corps or a 
person authorized to act for the Job Corps Director.
    Low income individual means an individual who meets the definition 
in WIA section 101(25).
    National Office means the national office of Job Corps.
    National training contractor means a labor union, union-affiliated 
organization, business organization, association or a combination of 
such organizations, which has a contract with the national office to 
provide vocational training, placement, or other services.
    Operational support services means activities or services required 
to support the 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 performs 
outreach, and screens and enrolls youth under a contract or other 
agreement with Job Corps.
    Placement means student employment, entry into the Armed Forces, or 
enrollment in other training or education programs following separation 
from Job Corps.
    Placement agency means an organization acting under a contract or 
other agreement with Job Corps to provide placement services for 
graduates and, to the extent possible, for former students.
    Regional appeal board means the board designated by the Regional 
Director to consider student appeals of disciplinary discharges.
    Regional Director means the chief Job Corps official of a regional 
office or a person authorized to act for the Regional Director.
    Regional Office means a regional office of Job Corps.
    Regional Solicitor means the chief official of a regional office of 
the DOL Office of the Solicitor, or a person authorized to act for the 
Regional Solicitor.
    Separation means the action by which an individual ceases to be a 
student in the Job Corps program, either voluntarily or involuntarily.
    Student means an individual enrolled in 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 inflict 
personal injury;
    (6) Stolen property;
    (7) Drugs, including alcohol, marijuana, depressants, stimulants, 
hallucinogens, tranquilizers, and drug paraphernalia except for drugs 
and/or paraphernalia that are prescribed for medical reasons; and
    (8) Any other goods prohibited by the center operator in a student 
handbook.



Sec.  670.130  What is the role of the Job Corps Director?

    The Job Corps Director has been delegated the authority to carry out 
the responsibilities of the Secretary under Subtitle I-C of the Act. 
Where the term ``Secretary'' is used in this part 670 to refer to 
establishment or issuance of

[[Page 148]]

guidelines and standards directly relating to the operation of the Job 
Corps program, the Job Corps Director has that responsibility.



  Subpart B_Site Selection and Protection and Maintenance of Facilities



Sec.  670.200  Who decides where Job Corps centers will be located?

    (a) The Secretary must approve the location and size of all Job 
Corps centers.
    (b) The Secretary establishes procedures for making decisions 
concerning the establishment, relocation, expansion, or closing of 
contract centers.



Sec.  670.210  How are center facility improvements and new
construction handled?

    The Secretary issues procedures for requesting, approving, and 
initiating capital improvements and new construction on Job Corps 
centers.



Sec.  670.220  Are we responsible for the protection and maintenance
of center facilities?

    (a) Yes, the Secretary establishes procedures for the protection and 
maintenance of contract center facilities owned or leased by the 
Department of Labor, that are consistent with Federal Property 
Management Regulations at 41 CFR Chapter 101.
    (b) Federal agencies operating civilian conservation centers (CCC's) 
on public land are responsible for protection and maintenance of CCC 
facilities.
    (c) The Secretary issues procedures for conducting periodic facility 
surveys of centers to determine their condition and to identify needs 
such as correction of safety and health deficiencies, rehabilitation, 
and/or new construction.



          Subpart C_Funding and Selection of Service Providers



Sec.  670.300  What entities are eligible to receive funds to operate
centers and provide training and operational support services?

    (a) Entities eligible to receive funds under this subpart to operate 
centers include:
    (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 to provide outreach and 
admissions, placement and other operational support 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 
with youth. (WIA sec. 145(a)(3)).



Sec.  670.310  How are entities selected to receive funding?

    (a) The Secretary selects eligible entities to operate contract 
centers and operational support service providers on a competitive basis 
in accordance with the Federal Property and Administrative Services Act 
of 1949 unless section 303 (c) and (d) of that Act apply. In selecting 
an entity, Job Corps issues requests for proposals (RFP) for the 
operation of all contract centers and for provision of operational 
support services according to Federal Acquisition Regulation (48 CFR 
Chapter 1) and DOL Acquisition Regulation (48 CFR Chapter 29). Job Corps 
develops RFP's for center operators in consultation with the Governor, 
the center industry council (if established), and the Local Board for 
the workforce investment area in which the center is located.
    (b) The RFP for each contract center and each operational support 
service contract describes uniform specifications and standards, as well 
as specifications and requirements that are unique to the operation of 
the specific center or to the specific required operational support 
services.
    (c) The Contracting Officer selects and funds Job Corps contract 
center operators on the basis of an evaluation of the proposals received 
using criteria established by the Secretary, and set

[[Page 149]]

forth in the RFP. The criteria include the following:
    (1) The offeror's ability to coordinate the activities carried out 
through the Job Corps center with activities carried out under the 
appropriate State and local workforce investment plans;
    (2) The degree to which the offeror proposes vocational training 
that reflects employment opportunities in the local areas in which most 
of the students intend to seek employment;
    (3) The degree to which the offeror is familiar with the surrounding 
community, including the applicable One-Stop Centers, and the State and 
region in which the center is located; and
    (4) The offeror's past performance.
    (d) The Contracting Officer selects and funds operational support 
service contractors on the basis of an evaluation of the proposals 
received using criteria established by the Secretary and set forth in 
the RFP.
    (e) The Secretary enters into interagency agreements with Federal 
agencies for the funding, establishment, and operation of CCC's which 
include provisions to ensure that the Federal agencies comply with the 
regulations under this part.



Sec.  670.320  What are the requirements for award of contracts and
payments to Federal agencies?

    (a) The requirements of the Federal Property and Administrative 
Services Act of 1949, as amended; the Federal Grant and Cooperative 
Agreement Act of 1977; the Federal Acquisition Regulation (48 CFR 
Chapter 1); and the DOL Acquisition Regulation (48 CFR Chapter 29) apply 
to the award of contracts and to payments to Federal agencies.
    (b) Job Corps funding of Federal agencies that operate CCC's are 
made by a transfer of obligational authority from DOL to the respective 
operating agency.



Subpart D_Recruitment, Eligibility, Screening, Selection and Assignment, 
                             and Enrollment



Sec.  670.400  Who is eligible to participate in the Job Corps program?

    To be eligible to participate in the Job Corps, an individual must 
be:
    (a) At least 16 and not more than 24 years of age at the time of 
enrollment, except
    (1) There is no upper age limit for an otherwise eligible individual 
with a disability; and
    (2) Not more than 20% of individuals enrolled nationwide may be 
individuals who 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 to education and employment:
    (1) Is basic skills deficient, as defined in 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 intensive 
counseling and related assistance in order to participate successfully 
in regular schoolwork or to secure and hold meaningful employment; and
    (d) Meets the requirements of Sec.  670.420, if applicable.



Sec.  670.410  Are there additional factors which are considered in
selecting an eligible applicant for enrollment?

    Yes, in accordance with procedures issued by the Secretary, an 
eligible applicant may be selected for enrollment, only if:
    (a) A determination is made, based on information relating to the 
background, needs and interests of the applicant, that the applicant's 
educational and vocational needs can best be met through the Job Corps 
program;
    (b) A determination is made that there is a reasonable expectation 
the applicant can participate successfully in group situations and 
activities, and is not likely to engage in actions that would 
potentially:
    (1) Prevent other students from receiving the benefit of the 
program;
    (2) Be incompatible with the maintenance of sound discipline; or
    (3) Impede satisfactory relationships between the center to which 
the student is assigned and surrounding local communities;
    (c) The applicant is made aware of the center's rules and what the 
consequences are for failure to observe the

[[Page 150]]

rules, as described in procedures issued by the Secretary;
    (d) The applicant passes a background check conducted according to 
procedures established by the Secretary. The background check must find 
that the applicant is not on probation, parole, under a suspended 
sentence or under the supervision of any agency as a result of court 
action or institutionalization, unless the court or appropriate agency 
certifies in writing that it will approve of the applicant's release 
from its supervision and that the applicant's release does not violate 
applicable laws and regulations. No one will be denied enrollment in Job 
Corps solely on the basis of contact with the criminal justice system. 
(WIA secs. 145(b)(1)(C) and 145(b)(2));
    (e) Suitable arrangements are made for the care of any dependent 
children for the proposed period of enrollment.



Sec.  670.420  Are there any special requirements for enrollment
related to the Military Selective Service Act?

    (a) Yes, each male applicant 18 years of age or older must present 
evidence that he has complied with section 3 of the Military Selective 
Service Act (50 U.S.C. App. 451 et seq.) if required; and
    (b) When a male student turns 18 years of age, he must submit 
evidence to the center that he has complied with the requirements of the 
Military Selective Service Act (50 U.S.C. App. 451 et seq).



Sec.  670.430  What entities conduct outreach and admissions
activities for the Job Corps program?

    The Regional Director makes arrangements with outreach and 
admissions agencies to perform Job Corps recruitment, screening and 
admissions functions according to standards and procedures issued by the 
Secretary. One-Stop Centers or partners, community action organizations, 
private for-profit and non-profit businesses, labor organizations, or 
other entities that have contact with youth over substantial periods of 
time and are able to offer reliable information about the needs of 
youth, conduct outreach and admissions activities. The Regional Director 
awards contracts for provision of outreach and screening services on a 
competitive basis in accordance with the requirements in Sec.  670.310.



Sec.  670.440  What are the responsibilities of outreach and 
admissions agencies?

    (a) Outreach and admissions agencies are responsible for:
    (1) Developing outreach and referral sources;
    (2) Actively seeking out potential applicants;
    (3) Conducting personal interviews with all applicants to identify 
their needs and eligibility status; and
    (4) Identifying youth who are interested and likely Job Corps 
participants.
    (b) Outreach and admissions agencies are responsible for completing 
all Job Corps application forms and determining whether applicants meet 
the eligibility and selection criteria for participation in Job Corps as 
provided in Sec. Sec.  670.400 and 670.410.
    (c) The Secretary may decide that determinations with regard to one 
or more of the eligibility criteria will be made by the Regional 
Director.



Sec.  670.450  How are applicants who meet eligibility and 
selection criteria assigned to centers?

    (a) Each applicant who meets the application and selection 
requirements of Sec. Sec.  670.400 and 670.410 is assigned to a center 
based on an assignment plan developed by the Secretary. The assignment 
plan identifies a target for the maximum percentage of students at each 
center who come from the State or region nearest the center, and the 
regions surrounding the center. The assignment plan is based on an 
analysis of:
    (1) The number of eligible individuals in the State and region where 
the center is located and the regions surrounding where the center is 
located;
    (2) The demand for enrollment in Job Corps in the State and region 
where the center is located and in surrounding regions; and
    (3) The size and enrollment level of the center.
    (b) Eligible applicants are assigned to centers closest to their 
homes, unless it is determined, based on the special needs of 
applicants, including vocational interests and English literacy

[[Page 151]]

needs, the unavailability of openings in the closest center, or parent 
or guardian concerns, that another center is more appropriate.
    (c) A student who is under the age of 18 must not be assigned to a 
center other than the center closest to home if a parent or guardian 
objects to the assignment.



Sec.  670.460  What restrictions are there on the assignment of
eligible applicants for nonresidential enrollment in Job Corps?

    (a) No more than 20 percent of students enrolled in Job Corps 
nationwide may be nonresidential students.
    (b) In enrolling individuals who are to be nonresidential students, 
priority is given to those eligible individuals who are single parents 
with dependent children. (WIA sec 147(b).)



Sec.  670.470  May a person who is determined to be ineligible or
an individual who is denied enrollment appeal that decision?

    (a) A person who is determined to be ineligible to participate in 
Job Corps under Sec.  670.400 or a person who is not selected for 
enrollment under Sec.  670.410 may appeal the determination to the 
outreach and admissions agency or to the center within 60 days of the 
determination. The appeal will be resolved according to the procedures 
in Sec. Sec.  670.990 and 670.991. If the appeal is denied by the 
outreach/admissions contractor or the center, the person may appeal the 
decision in writing to the Regional Director within 60 days the date of 
the denial. The Regional Director will decide within 60 days whether to 
reverse or approve the appealed decision. The decision by the Regional 
Director is the Department's final decision.
    (b) If an applicant believes that he or she has been determined 
ineligible or not selected for enrollment based upon a factor prohibited 
by WIA section 188, the individual may proceed under the applicable DOL 
nondiscrimination regulations implementing WIA section 188. These 
regulations may be found at 29 CFR part 37.
    (c) An applicant who is determined to be ineligible or a person who 
is denied enrollment must be referred to the appropriate One-Stop Center 
or other local service provider.



Sec.  670.480  At what point is an applicant considered to be
enrolled in Job Corps?

    (a) To become enrolled as a Job Corps student, an applicant selected 
for enrollment must physically arrive at the assigned Job Corps center 
on the appointed date. However, applicants selected for enrollment who 
arrive at their assigned centers by government furnished transportation 
are considered to be enrolled on their dates of departure by such 
transportation.
    (b) Center operators must document the enrollment of new students 
according to procedures issued by the Secretary.



Sec.  670.490  How long may a student be enrolled in Job Corps?

    (a) Except as provided in paragraph (b) of this section, a student 
may remain enrolled in Job Corps for no more than two years.
    (b)(1) An extension of a student's enrollment may be authorized in 
special cases according to procedures issued by the Secretary; and
    (2) A student's enrollment in an advanced career training program 
may be extended in order to complete the program for a period not to 
exceed one year.



           Subpart E_Program Activities and Center Operations



Sec.  670.500  What services must Job Corps centers 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 services described in WIA section 134(d)(2) and the intensive 
services described in WIA section 134(d)(3).



Sec.  670.505  What types of training must Job Corps centers provide?

    (a) Job Corps centers must provide basic education, vocational and 
social skills training. The Secretary provides curriculum standards and 
guidelines.

[[Page 152]]

    (b) Each center must provide students with competency-based or 
individualized training in an occupational area that will best 
contribute to the students' opportunities for permanent long-term 
employment.
    (1) Specific vocational training programs offered by individual 
centers must be approved by the Regional Director according to policies 
issued by the Secretary.
    (2) Center industry councils described in Sec.  670.800 must review 
appropriate labor market information, identify employment opportunities 
in local areas where students will look for employment, determine the 
skills and education necessary for those jobs, and as appropriate, 
recommend changes in the center's vocational training program to the 
Secretary.
    (c) Each center must implement a system to evaluate and track the 
progress and achievements of each student at regular intervals.
    (d) Each center must develop a training plan that must be available 
for review and approval by the appropriate Regional Director.



Sec.  670.510  Are Job Corps center operators responsible for
providing all vocational training?

    No, in order to facilitate students' entry into the workforce, the 
Secretary may contract with national business, union, or union-
affiliated organizations for vocational training programs at specific 
centers. Contractors providing such vocational training will be selected 
in accordance with the requirements of Sec.  670.310.



Sec.  670.515  What responsibilities do the center operators have
in managing work-based learning?

    (a) The center operator must emphasize and implement work-based 
learning programs for students through center program activities, 
including vocational skills training, and through arrangements with 
employers. Work-based learning must be under actual working conditions 
and must be designed to enhance the employability, responsibility, and 
confidence of the students. Work-based learning usually occurs in tandem 
with students' vocational training.
    (b) The center operator must ensure that students are assigned only 
to workplaces that meet the safety standards described in Sec.  670.935.



Sec.  670.520  Are students permitted to hold jobs other than
work-based learning opportunities?

    Yes, a center operator may authorize a student to participate in 
gainful leisure time employment, as long as the employment does not 
interfere with required scheduled activities.



Sec.  670.525  What residential support services must Job Corps
center operators provide?

    Job Corps center operators must provide the following services 
according to procedures issued by the Secretary:
    (a) A quality living and learning environment that supports the 
overall training program and includes a safe, secure, clean and 
attractive physical and social environment, seven days a week, 24 hours 
a day;
    (b) An ongoing, structured counseling program for students;
    (c) Food service, which includes provision of nutritious meals for 
students;
    (d) Medical services, through provision or coordination of a 
wellness program which includes access to basic medical, dental and 
mental health services, as described in the Policy and Requirements 
Handbook, for all students from the date of enrollment until separation 
from the Job Corps program;
    (e) A recreation/avocational program;
    (f) A student leadership program and an elected student government; 
and
    (g) A student welfare association for the benefit of all students 
that is funded by non-appropriated funds which come from sources such as 
snack bars, vending machines, disciplinary fines, and donations, and is 
run by an elected student government, with the help of a staff advisor.



Sec.  670.530  Are Job Corps centers required to maintain a 
student accountability system?

    Yes, each Job Corps center must establish and operate an effective 
system to account for and document the whereabouts, participation, and 
status

[[Page 153]]

of students during their Job Corps enrollment. The system must enable 
center staff to detect and respond to instances of unauthorized or 
unexplained student absence. Each center must operate its student 
accountability system according to requirements and procedures issued by 
the Secretary.



Sec.  670.535  Are Job Corps centers required to establish behavior
management systems?

    (a) Yes, each Job Corps center must establish and maintain its own 
student incentives system to encourage and reward students' 
accomplishments.
    (b) The Job Corps center must establish and maintain a behavior 
management system, according to procedures established by the Secretary. 
The behavior management system must include a zero tolerance policy for 
violence and drugs policy as described in Sec.  670.540.



Sec.  670.540  What is Job Corps' zero tolerance policy?

    (a) Each Job Corps center must have a zero tolerance policy for:
    (1) An act of violence, as defined in procedures issued by the 
Secretary;
    (2) Use, sale, or possession of a controlled substance, as defined 
at 21 U.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 condition of enrollment. (WIA sec. 145(a)(1) and 152(b)(2).)
    (c) According to procedures issued by the Secretary, the policy must 
specify the offenses that result in the automatic separation of a 
student from the Job Corps. The center director is responsible for 
determining when there is a violation of a specified offense.



Sec.  670.545  How does Job Corps ensure that students receive due
process in disciplinary actions?

    The center operator must ensure that all students receive due 
process in disciplinary proceedings according to procedures developed by 
the Secretary. These procedures must include, at a minimum, center fact-
finding and behavior review boards, a code of sanctions under which the 
penalty of separation from Job Corps might be imposed, and procedures 
for students to appeal a center's decision to discharge them 
involuntarily from Job Corps to a regional appeal board.



Sec.  670.550  What responsibilities do Job Corps centers have in 
assisting students with child care needs?

    (a) Job Corps centers are responsible for coordinating with outreach 
and admissions agencies to assist students with making arrangements for 
child care for their dependent children.
    (b) Job Corps centers may operate on center child development 
programs with the approval of the Secretary.



Sec.  670.555  What are the center's responsibilities in ensuring
that students' religious rights are respected?

    (a) Centers must ensure that a student has the right to worship or 
not worship as he or she chooses.
    (b) Students who believe their religious rights have been violated 
may file complaints under the procedures set forth in 29 CFR part 37.
    (c) Requirements related to equal treatment of religious 
organizations in Department of Labor programs, and to protection of 
religious liberty of Department of Labor social service providers and 
beneficiaries, are found at subpart D of 29 CFR part 2. See also 
Sec. Sec.  667.266 and 667.275 of 20 CFR; 29 CFR part 37.

[65 FR 49450, Aug. 11, 2000, as amended at 69 FR 41891, July 12, 2004]



Sec.  670.560  Is Job Corps authorized to conduct pilot and
demonstration projects?

    (a) Yes, the Secretary may undertake experimental, research and 
demonstration projects related to the Job Corps program according to WIA 
section 156.
    (b) The Secretary establishes policies and procedures for conducting 
such projects.
    (c) All studies and evaluations produced or developed with Federal 
funds become the property of the United States.

[[Page 154]]



                        Subpart F_Student Support



Sec.  670.600  Is government-paid transportation provided to 
Job Corps students?

    Yes, Job Corps provides for the transportation of students between 
their homes and centers as described in policies and procedures issued 
by the Secretary.



Sec.  670.610  When are students authorized to take leaves of
absence from their Job Corps centers?

    Job Corps students are eligible for annual leaves, emergency leaves 
and other types of leaves of absence from their assigned centers 
according to criteria and requirements issued by the Secretary. Center 
operators and other service providers must account for student leave 
according to procedures issued by the Secretary.



Sec.  670.620  Are Job Corps students eligible to receive cash
allowances and performance bonuses?

    (a) Yes, according to criteria and rates established by the 
Secretary, Job Corps students receive cash living allowances, 
performance bonuses, and allotments for care of dependents, and 
graduates receive post-separation readjustment allowances and placement 
bonuses. The Secretary may provide former students with post-separation 
allowances.
    (b) In the event of a student's death, any amount due under this 
section is paid according to the provisions of 5 U.S.C. 5582 governing 
issues such as designation of beneficiary, order of precedence and 
related matters.



Sec.  670.630  Are student allowances subject to Federal Payroll
Taxes?

    Yes, Job Corps student allowances are subject to Federal payroll tax 
withholding and social security taxes. Job Corps students are considered 
to be Federal employees for purposes of Federal payroll taxes. (WIA sec. 
157(a)(2).)



Sec.  670.640  Are students provided with clothing?

    Yes, Job Corps students are provided cash clothing allowances and/or 
articles of clothing, including safety clothing, when needed for their 
participation in Job Corps and their successful entry into the work 
force. Center operators and other service providers must issue clothing 
and clothing assistance to students according to rates, criteria, and 
procedures issued by the Secretary.



               Subpart G_Placement and Continued Services



Sec.  670.700  What are Job Corps centers' responsibilities in
preparing students for placement services?

    Job Corps centers must test and counsel students to assess their 
competencies and capabilities and determine their readiness for 
placement.



Sec.  670.710  What placement services are provided for Job Corps
students?

    (a) Job Corps placement services focus on placing program graduates 
in:
    (1) Full-time jobs that are related to their vocational training and 
that pay wages 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 on 
whether the student is a graduate or a former student.
    (c) Procedures relating to placement service levels are issued by 
the Secretary.



Sec.  670.720  Who provides placement services?

    The One-Stop system must be used to the fullest extent possible in 
placing graduates and former students in jobs. Job Corps placement 
agencies provide placement services under a contract or other agreement 
with the Department of Labor.



Sec.  670.730  What are the responsibilities of placement agencies?

    (a) Placement agencies are responsible for:
    (1) Contacting graduates;
    (2) Assisting them in improving skills in resume preparation, 
interviewing techniques and job search strategies;
    (3) Identifying job leads or educational and training opportunities

[[Page 155]]

through coordination with local Workforce Investment Boards, One-Stop 
operators and partners, employers, unions and industry organizations; 
and
    (4) Placing graduates in jobs, apprenticeship, the Armed Forces, or 
higher education or training, or referring former students for 
additional services in their local communities as appropriate. Placement 
services may be provided for former students according to procedures 
issued by the Secretary.
    (b) Placement agencies must record and submit all Job Corps 
placement information according to procedures established by the 
Secretary.



Sec.  670.740  Must continued services be provided for graduates?

    Yes, according to procedures issued by the Secretary, continued 
services, including transition support and workplace counseling, must be 
provided to program graduates for 12 months after graduation.



Sec.  670.750  Who may provide continued services for graduates?

    Placement agencies, centers or other agencies, including One-Stop 
partners, may provide post-program services under a contract or other 
agreement with the Regional Director. In selecting a provider for 
continued services, priority is given to One-Stop partners. (WIA sec. 
148(d)).



Sec.  670.760  How will Job Corps coordinate with other agencies?

    (a) The Secretary issues guidelines for the National Office, 
Regional Offices, Job Corps centers and operational support providers to 
use in developing and maintaining cooperative relationships with other 
agencies and institutions, including law enforcement, educational 
institutions, communities, and other employment and training programs 
and agencies.
    (b) The Secretary develops polices and requirements to ensure 
linkages with the One-Stop delivery system to the greatest extent 
practicable, as well as with other Federal, State, and local programs, 
and youth programs funded under this title. These linkages enhance 
services to youth who face multiple barriers to employment and must 
include, where appropriate:
    (1) Referrals of applicants and students;
    (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



Sec.  670.800  How do Job Corps centers and service providers
become involved in their local communities?

    (a) Job Corps representatives serve on Youth Councils operating 
under applicable Local Boards wherever geographically feasible.
    (b) Each Job Corps center must have a Business and Community Liaison 
designated by the director of the center to establish relationships with 
local and distant employers, applicable One-Stop centers and local 
boards, and members of the community according to procedures established 
by the Secretary. (WIA sec. 153(a).)
    (c) Each Job Corps center must implement an active community 
relations program.
    (d) Each Job Corps center must establish an industry advisory 
council, according to procedures established by the Secretary. The 
industry advisory council must include:
    (1) Distant and local employers;
    (2) Representatives of labor organizations (where present) and 
employees; and
    (3) Job Corps students and graduates.
    (e) A majority of the council members must be local and distant 
business owners, chief executives or chief operating officers of 
nongovernmental employers or other private sector employers, who have 
substantial management, hiring or policy responsibility and who 
represent businesses with employment opportunities in the local area and 
the areas to which students will return.
    (f) The council must work with Local Boards and must review labor 
market information to provide recommendations to the Secretary regarding 
the center's vocational training offerings, including identification of 
emerging

[[Page 156]]

occupations suitable for training. (WIA sec.154(b)(1).)
    (g) Job Corps is identified as a required One-Stop partner. Wherever 
practicable, Job Corps centers and operational support contractors must 
establish cooperative relationships and partnerships with One-Stop 
centers and other One-Stop partners, Local Boards, and other programs 
for youth.



           Subpart I_Administrative and Management Provisions



Sec.  670.900  Are damages caused by the acts or omissions of 
students eligible for payment under the Federal Tort Claims Act?

    Yes, students are considered Federal employees for purposes of the 
FTCA (28 U.S.C. 2671 et seq.). Claims for such damage should be filed 
pursuant to the procedures found in 29 CFR part 15, subpart D.

[77 FR 22207, Apr. 13, 2012]



Sec.  670.905  Are loss and damages that occur to persons or personal
property of students at Job Corps centers eligible for reimbursement?

    Yes, the Job Corps may pay students for valid claims under the 
procedures found in 29 CFR part 15, subpart D.

[77 FR 22207, Apr. 13, 2012]



Sec.  670.910  If a student is injured in the performance of duty
as a Job Corps Student, what benefits may they receive?

    (a) Job Corps students are considered Federal employees for purposes 
of the Federal Employees' Compensation Act (FECA) as specified in 29 
U.S.C. 2897.
    (b) Job Corps students may be entitled to benefits under FECA as 
provided by 5 U.S.C. 8143 for injuries occurring in the performance of 
duty.
    (c) Job Corps students must meet the same eligibility tests for FECA 
benefits that apply to all other Federal employees. The requirements for 
FECA benefits may be found at 5 U.S.C. 8101, et seq. and part 10 of this 
title. The Department of Labor's Office of Workers' Compensation 
Programs (OWCP) administers the FECA program; all FECA determinations 
are within the exclusive authority of the OWCP, subject to appeal to the 
Employees' Compensation Appeals Board.
    (d) Whenever a student is injured, develops an occupationally 
related illness, or dies while in the performance of duty, the 
procedures of the OWCP, at part 10 of this title, must be followed. To 
assist OWCP in determining FECA eligibility, a thorough investigation of 
the circumstances and a medical evaluation must be completed and 
required forms must be timely filed by the center operator with the 
DOL's OWCP. Additional information regarding Job Corps FECA claims may 
be found in OWCP's regulations and procedures available on DOL's Web 
site located at www.dol.gov.

[77 FR 22207, Apr. 13, 2012]



Sec.  670.915  When is a Job Corps student considered to be in 
the performance of duty?

    (a) Performance of duty is a determination that must be made by the 
OWCP under FECA, and is based on the individual circumstances in each 
claim.
    (b) In general, residential students may be considered to be in the 
``performance of duty'' when:
    (1) They are on center under the supervision and control of Job 
Corps officials;
    (2) They are engaged in any authorized Job Corps activity;
    (3) They are in authorized travel status; or
    (4) They are engaged in any authorized offsite activity.
    (c) Non-resident students are generally considered to be ``in 
performance of duty'' as Federal employees when they are engaged in any 
authorized Job Corps activity, from the time they arrive at any 
scheduled center activity until they leave the activity. The standard 
rules governing coverage of Federal employees during travel to and from 
work apply. These rules are described in guidance issued by the 
Secretary.
    (d) Students are generally considered to be not in the performance 
of duty when:
    (1) They are Absent Without Leave (AWOL);
    (2) They are at home, whether on pass or on leave;

[[Page 157]]

    (3) They are engaged in an unauthorized offsite activity; or
    (4) They are injured or ill due to their own willful misconduct, 
intent to cause injury or death to oneself or another or through 
intoxication or illegal use of drugs.

[77 FR 22207, Apr. 13, 2012]



Sec.  670.935  How are students protected from unsafe or unhealthy
situations?

    (a) The Secretary establishes procedures to ensure that students are 
not required or permitted to work, be trained, reside in, or receive 
services in buildings or surroundings or under conditions that are 
unsanitary or hazardous. Whenever students are employed or in training 
for jobs, they must be assigned only to jobs or training which observe 
applicable Federal, State and local health and safety standards.
    (b) The Secretary develops procedures to ensure compliance with 
applicable DOL Occupational Safety and Health Administration 
regulations.



Sec.  670.940  What are the requirements for criminal law enforcement
jurisdiction on center property?

    (a) All Job Corps property which would otherwise be under exclusive 
Federal legislative jurisdiction is considered under concurrent 
jurisdiction with the appropriate State and locality with respect to 
criminal law enforcement. Concurrent jurisdiction extends to all 
portions of the property, including housing and recreational facilities, 
in addition to the portions of the property used for education and 
training activities.
    (b) Centers located on property under concurrent Federal-State 
jurisdiction must establish agreements with Federal, State and local law 
enforcement agencies to enforce criminal laws.
    (c) The Secretary develops procedures to ensure that any searches of 
a student's person, personal area or belongings for unauthorized goods 
follow applicable right-to-privacy laws.



Sec.  670.945  Are Job Corps operators and service providers authorized
to pay State or local taxes on gross receipts?

    (a) A private for-profit or a nonprofit Job Corps service provider 
is not liable, directly or indirectly, to any State or subdivision for 
any gross receipts taxes, business privilege taxes measured by gross 
receipts, or any similar taxes in connection with any payments made to 
or by such service provider for operating a center or other Job Corps 
program or activity. The service provider is not liable to any State or 
subdivision to collect or pay any sales, excise, use, or similar tax 
imposed upon the sale to or use by such deliverer of any property, 
service, or other item in connection with the operation of a center or 
other Job Corps program or activity. (WIA sec. 158(d).)
    (b) If a State or local authority compels a center operator or other 
service provider to pay such taxes, the center operator or service 
provider may pay the taxes with Federal funds, but must document and 
report the State or local requirement according to procedures issued by 
the Secretary.



Sec.  670.950  What are the financial management responsibilities of
Job Corps center operators and other service providers?

    (a) Center operators and other service providers must manage Job 
Corps funds using financial management information systems that meet the 
specifications and requirements of the Secretary.
    (b) These financial management systems must:
    (1) Provide accurate, complete, and current disclosures of the costs 
of their Job Corps activities;
    (2) Ensure that expenditures of funds are necessary, reasonable, 
allocable and allowable in accordance with applicable cost principles;
    (3) Use account structures specified by the Secretary;
    (4) Ensure the ability to comply with cost reporting requirements 
and procedures issued by the Secretary; and
    (5) Maintain sufficient cost data for effective planning, 
monitoring, and evaluation of program activities and

[[Page 158]]

for determining the allowability of reported costs.



Sec.  670.955  Are center operators and service providers subject
to Federal audits?

    (a) Yes, Center operators and service providers are subject to 
Federal audits.
    (b) The Secretary arranges for the survey, audit, or evaluation of 
each Job Corps center and service provider at least once every three 
years, by Federal auditors or independent public accountants. The 
Secretary may arrange for more frequent audits. (WIA sec. 159(b)(2).)
    (c) Center operators and other service providers are responsible for 
giving full cooperation and access to books, documents, papers and 
records to duly appointed Federal auditors and evaluators. (WIA sec. 
159(b)(1).)



Sec.  670.960  What are the procedures for management of student records?

    The Secretary issues guidelines for a system for maintaining records 
for each student during enrollment and for disposition of such records 
after separation.



Sec.  670.965  What procedures apply to disclosure of information
about Job Corps students and program activities?

    (a) The Secretary develops procedures to respond to requests for 
information or records or other necessary disclosures pertaining to 
students.
    (b) DOL disclosure of Job Corps information must be handled 
according to the Freedom of Information Act and according to DOL 
regulations at 29 CFR part 70.
    (c) Job Corps contractors are not ``agencies'' for Freedom of 
Information Act purposes. Therefore, their records are not subject to 
disclosure under the Freedom of Information Act or 29 CFR part 70.
    (d) The regulations at 29 CFR part 71 apply to a system of records 
covered by the Privacy Act of 1974 maintained by DOL or to a similar 
system maintained by a contractor, such as a screening agency, contract 
center operator, or placement agency on behalf of the Job Corps.



Sec.  670.970  What are the reporting requirements for center 
operators and operational support service providers?

    The Secretary establishes procedures to ensure the timely and 
complete reporting of necessary financial and program information to 
maintain accountability. Center operators and operational support 
service providers are responsible for the accuracy and integrity of all 
reports and data they provide.



Sec.  670.975  How is the performance of the Job Corps program assessed?

    The performance of the Job Corps program as a whole, and the 
performance of individual program components, is assessed on an ongoing 
basis, in accordance with the regulations in this part and procedures 
and standards, including a national performance measurement system, 
issued by the Secretary. Annual performance assessments are done for 
each center operator and other service providers, including screening 
and admissions and placement agencies.



Sec.  670.980  What are the indicators of performance for Job Corps?

    (a) At a minimum, the performance assessment system established 
under Sec.  670.975 will include expected levels of performance 
established for each of the indicators of performance contained in WIA 
section 159(c). These are:
    (1) The number of graduates and rate of graduation, analyzed by the 
type of vocational training received and the training provider;
    (2) The job placement rate of graduates into unsubsidized 
employment, analyzed by the vocational training received, whether or not 
the job placement is related to the training received, the vocational 
training provider, and whether the placement is made by a local or 
national service provider;
    (3) The average placement wage of graduates in training-related and 
non-training related unsubsidized jobs;
    (4) The average wage of graduates on the first day of employment and 
at 6 and 12 months following placement, analyzed by the type of 
vocational training received;

[[Page 159]]

    (5) The number of and retention rate of graduates in unsubsidized 
employment after 6 and 12 months;
    (6) The number of graduates who entered unsubsidized employment for 
32 hours per week or more, for 20 to 32 hours per week, and for less 
than 20 hours per week.
    (7) The number of graduates placed in higher education or advanced 
training; and
    (8) The number of graduates who attained job readiness and 
employment skills.
    (b) The Secretary issues the expected levels of performance for each 
indicator. To the extent practicable, the levels of performance will be 
continuous and consistent from year to year.



Sec.  670.985  What happens if a center operator, screening and
admissions contractor or other service provider fails to meet the
expected levels of performance?

    (a) The Secretary takes appropriate action to address performance 
issues through a specific performance plan.
    (b) The plan may include the following actions:
    (1) Providing technical assistance to a Job Corps center operator or 
support service provider, including a screening and admissions 
contractor;
    (2) Changing the management staff of a center;
    (3) Changing the vocational training offered at a center;
    (4) Contracting out or recompeting the contract for a center or 
operational support service provider;
    (5) Reducing the capacity of a Job Corps center;
    (6) Relocating a Job Corps center; or
    (7) Closing a Job Corps center. (WIA sec. 159 (f).)



Sec.  670.990  What procedures are available to resolve complaints 
and disputes?

    (a) Each Job Corps center operator and service provider must 
establish and maintain a grievance procedure for filing complaints and 
resolving disputes from applicants, students and/or other interested 
parties about its programs and activities. A hearing on each complaint 
or dispute must be conducted within 30 days of the filing of the 
complaint or dispute. A decision on the complaint must be made by the 
center operator or service provider, as appropriate, within 60 days 
after the filing of the complaint, and a copy of the decision must be 
immediately served, by first-class mail, on the complainant and any 
other party to the complaint. Except for complaints under Sec.  670.470 
or complaints alleging fraud or other criminal activity, complaints may 
be filed within one year of the occurrence that led to the complaint.
    (b) The procedure established under paragraph (a) of this section 
must include procedures to process complaints alleging violations of WIA 
section 188, consistent with DOL nondiscrimination regulations 
implementing WIA section 188 at 29 CFR part 37 and Sec.  670.995.



Sec.  670.991  How does Job Corps ensure that complaints or disputes
are resolved in a timely fashion?

    (a) If a complaint is not resolved by the center operator or service 
provider in the time frames described in Sec.  670.990, the person 
making the complaint may request that the Regional Director determine 
whether reasonable cause exists to believe that the Act or regulations 
for this part of the Act have been violated. The request must be filed 
with the Regional Director within 60 days from the date that the center 
operator or service provider should have issued the decision.
    (b) Following the receipt of a request for review under paragraph 
(a) of this section, the Regional Director must determine within 60 days 
whether there has been a violation of the Act or the WIA regulations. If 
the Regional Director determines that there has been a violation of the 
Act or Regulations, (s)he may direct the operator or service provider to 
remedy the violation or direct the service provider to issue a decision 
to resolve the dispute according to the service provider's grievance 
procedures. If the service provider does not comply with the Regional 
Director's decision within 30 days, the Regional Director may impose a 
sanction on the center operator or service provider for violating the 
Act or regulations, and/or for failing to issue a decision. Decisions 
imposing sanctions

[[Page 160]]

upon a center operator or service provider may be appealed to the DOL 
Office of Administrative Law Judges under 20 CFR 667.800 or 667.840.



Sec.  670.992  How does Job Corps ensure that centers or other
service providers comply with the Act and the WIA regulations?

    (a) If DOL receives a complaint or has reason to believe that a 
center or other service provider is failing to comply with the 
requirements of the Act or regulations, the Regional Director must 
investigate the allegation and determine within 90 days after receiving 
the complaint or otherwise learning of the alleged violation, whether 
such allegation or complaint is true.
    (b) As a result of such a determination, the Regional Director may:
    (1) Direct the center operator or service provider to handle a 
complaint through the grievance procedures established under Sec.  
670.990; or
    (2) Investigate and determine whether the center operator or service 
provider is in compliance with the Act and regulations. If the Regional 
Director determines that the center or service provider is not in 
compliance with the Act or regulations, the Regional Director may take 
action to resolve the complaint under Sec.  670.991(b), or will report 
the incident to the DOL Office of the Inspector General, as described in 
20 CFR 667.630.



Sec.  670.993  How does Job Corps ensure that contract disputes
will be resolved?

    A dispute between DOL and a Job Corps contractor will be handled 
according to the Contract Disputes Act and applicable regulations.



Sec.  670.994  How does Job Corps resolve disputes between DOL
and other Federal Agencies?

    Disputes between DOL and a Federal Agency operating a center will be 
handled according to the interagency agreement with the agency which is 
operating the center.



Sec.  670.995  What DOL equal opportunity and nondiscrimination
regulations apply to Job Corps?

    Nondiscrimination requirements, procedures, complaint processing, 
and compliance reviews are governed by, as applicable, provisions of the 
following Department of Labor regulations:
    (a) Regulations implementing WIA section 188 for programs receiving 
Federal financial assistance under WIA found at 29 CFR part 37.
    (b) 29 CFR part 33 for programs conducted by the Department of 
Labor; and
    (c) 41 CFR Chapter 60 for entities that have a Federal government 
contract.



PART 671_NATIONAL EMERGENCY GRANTS FOR DISLOCATED WORKERS
--Table of Contents



Sec.
671.100 What is the purpose of national emergency grants under WIA 
          section 173?
671.105 What funds are available for national emergency grants?
671.110 What are major economic dislocations or other events which may 
          qualify for a national emergency grant?
671.120 Who is eligible to apply for national emergency grants?
671.125 What are the requirements for submitting applications for 
          national emergency grants?
671.130 When should applications for national emergency grants be 
          submitted to the Department?
671.140 What are the allowable activities and what dislocated workers 
          may be served under national emergency grants?
671.150 How do statutory and workflex waivers apply to national 
          emergency grants?
671.160 What rapid response activities are required before a national 
          emergency grant application is submitted?
671.170 What are the program and administrative requirements that apply 
          to national emergency grants?

    Authority: Sec. 506(c), Pub. L. 105-220; 20 U.S.C. 9276(c).

    Source: 65 FR 49460, Aug. 11, 2000, unless otherwise noted.



Sec.  671.100  What is the purpose of national emergency grants
under WIA section 173?

    The purpose of national emergency grants is to provide supplemental 
dislocated worker funds to States, Local Boards and other eligible 
entities in order to respond to the needs of dislocated workers and 
communities affected by major economic dislocations and other worker 
dislocation events

[[Page 161]]

which cannot be met with formula allotments.



Sec.  671.105  What funds are available for national emergency
grants?

    We use funds reserved under WIA section 132(a)(2)(A) to provide 
financial assistance to eligible applicant for grants under WIA section 
173.



Sec.  671.110  What are major economic dislocations or other
events which may qualify 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 
significantly increased the total number of unemployed individuals in a 
community;
    (e) Emergencies or natural disasters, as defined in paragraphs (1) 
and (2) respectively, of section 102 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5122(1) and (2)) which 
have been declared eligible for public assistance by the Federal 
Emergency Management Agency (FEMA); and
    (f) Other events, as determined by the Secretary.



Sec.  671.120  Who is eligible to apply for national emergency grants?

    (a) For projects within a State. A State, a Local Board or another 
entity determined to be appropriate by the Governor of the State in 
which the project is located may apply for a national emergency grant. 
Also, Indian tribes, tribal organizations, Alaska Native entities, 
Indian-controlled organizations serving Indians, or Native Hawaiian 
organizations which are recipients of funds under section 166 of the Act 
(Indian and Native American Programs) may apply for a national emergency 
grant.
    (b) For inter-State projects. Consortia of States and/or Local 
Boards may apply. Other private entities which can demonstrate, in the 
application for assistance, that they possess unique capabilities to 
effectively respond to the circumstances of the major economic 
dislocation(s) covered in the application may apply.
    (c) Other entities. The Secretary may consider applications from 
other entities, to ensure that appropriate assistance is provided in 
response to major economic dislocations.



Sec.  671.125  What are the requirements for submitting applications
for national emergency grants?

    We publish instructions for submitting applications for National 
Emergency Grants in the Federal Register. The instructions specify 
application procedures, selection criteria and the approval process.



Sec.  671.130  When should applications for national emergency
grants be submitted to the Department?

    (a) Applications for national emergency grants to respond to mass 
layoffs and plant closures may be submitted to the Department as soon 
as:
    (1) The State receives a notification of a mass layoff or a closure 
as a result of a WARN notice, a general announcement or some other means 
determined by the Governor to be sufficient to respond;
    (2) Rapid response assistance has been initiated; and
    (3) A determination has been made, in collaboration with the 
applicable Local Board(s) and chief elected official(s), that State and 
local formula dislocated worker funds are inadequate to provide the 
level of services needed by the workers being laid off.
    (b) An eligible entity may apply for a national emergency grant at 
any time during the year.
    (c) Applications for national emergency grants to respond to a 
declared emergency or natural disaster as described in Sec.  671.110(e), 
cannot be considered until FEMA has declared that the affected area is 
eligible for disaster-related public assistance.



Sec.  671.140  What are the allowable activities and what
dislocated workers may be served under national emergency 
grants?

    (a) National emergency grants may provide adjustment assistance for 
eligible dislocated workers, described at WIA section 173(c)(2) or 
(d)(2).

[[Page 162]]

    (b) Adjustment assistance includes the core, intensive, and training 
services authorized at WIA sections 134(d) and 173. The scope of 
services to be provided in a particular project are negotiated between 
the Department and the grantee, taking into account the needs of the 
target population covered by the grant. The scope of services may be 
changed through grant modifications, if necessary.
    (c) National emergency grants may provide for supportive services to 
help workers who require such assistance to participate in activities 
provided for in the grant. Needs-related payments, in support of other 
employment and training assistance, may be available for the purpose of 
enabling dislocated workers who are eligible for such payments to 
participate in programs of training services. Generally, the terms of a 
grant must be consistent with Local Board policies governing such 
financial assistance with formula funds (including the payment levels 
and duration of payments). However, the terms of the grant agreement may 
diverge from established Local Board policies, in the following 
instances:
    (1) If unemployed dislocated workers served by the project are not 
able to meet the 13 or 8 weeks enrollment in training requirement at WIA 
section 134(e)(3)(B) because of the lack of formula or emergency grant 
funds in the State or local area at the time of dislocation, such 
individuals may be eligible for needs-related payments if they are 
enrolled in training by the end of the 6th week following the date of 
the emergency grant award;
    (2) Trade-impacted workers who are not eligible for trade 
readjustment assistance under NAFTA-TAA may be eligible for needs-
related payments under a national emergency grant if the worker is 
enrolled in training by the end of the 16th week following layoff; and
    (3) Under other circumstances as specified in the national emergency 
grant application guidelines.
    (d) A national emergency grant to respond to a declared emergency or 
natural disaster, as defined at Sec.  671.110(e), may provide short-term 
disaster relief employment for:
    (1) Individuals who are temporarily or permanently laid off as a 
consequence of the disaster;
    (2) Dislocated workers; and
    (3) Long-term unemployed individuals.
    (e) Temporary employment assistance is authorized on disaster 
projects that provide food, clothing, shelter and other humanitarian 
assistance for disaster victims; and on projects that perform 
demolition, cleaning, repair, renovation and reconstruction of damaged 
and destroyed structures, facilities and lands located within the 
disaster area. For such temporary jobs, each eligible worker is limited 
to no more than six months of employment for each single disaster. The 
amounts, duration and other limitations on wages will be negotiated for 
each grant.
    (f) Additional requirements that apply to national emergency grants, 
including natural disaster grants, are contained in the application 
instructions.



Sec.  671.150  How do statutory and workflex waivers apply to 
national emergency grants?

    (a) State and Local Board grantees may request and we may approve 
the application of existing general statutory or regulatory waivers and 
workflex waivers to a National Emergency Grant award. The application 
for grant funds must describe any statutory waivers which the applicant 
wishes to apply to the project that the State and/or Local Board, as 
applicable, have been granted under its waiver plan, or that the State 
has approved for implementation in the applicable local area under 
workflex waivers. We will consider such requests as part of the overall 
application review and decision process.
    (b) If, during the operation of the project, the grantee wishes to 
apply a waiver not identified in the application, the grantee must 
request a modification which includes the provision to be waived, the 
operational barrier to be removed and the effect upon the outcome of the 
project.

[[Page 163]]



Sec.  671.160  What rapid response activities are required before
a national emergency grant application is submitted?

    (a) Rapid response is a required Statewide activity under WIA 
section 134(a)(2)(A), to be carried out by the State or its designee in 
collaboration with the Local Board(s) and chief elected official(s). 
Under 20 CFR 665.310, rapid response encompasses, among other 
activities, an assessment of the general needs of the affected workers 
and the resources available to them.
    (b) In accordance with national emergency grant application 
guidelines published by the Department, each applicant must demonstrate 
that:
    (1) The rapid response activities described in 20 CFR 665.310 have 
been initiated and carried out, or are in the process of being carried 
out;
    (2) State and local funds, including those made available under 
section 132(b)(2)(B) of the Act, have been used to initiate appropriate 
services to the eligible workers;
    (3) There is a need for additional funds to effectively respond to 
the assistance needs of the workers and, in the case of declared 
emergencies and natural disasters, the community; and
    (4) The application has been developed by or in conjunction with the 
Local Board(s) and chief elected official(s) of the local area(s) in 
which the proposed project is to operate.



Sec.  671.170  What are the program and administrative requirements
that apply to national emergency grants?

    (a) In general, the program requirements and administrative 
standards set forth at 20 CFR parts 663 and 667 will apply.
    (b) Exceptions include:
    (1) Funds provided in response to a natural disaster may be used for 
temporary job creation in areas declared eligible for public assistance 
by FEMA, subject to the limitations of WIA section 173(d), this part and 
the application guidelines issued by the Department;
    (2) National emergency grant funds may be used to pay an appropriate 
level of administrative costs based on the design and complexity of the 
project. We will negotiate administration costs with the applicant as 
part of the application review and grant award and modification 
processes;
    (3) The period of availability for expenditure of funds under a 
national emergency grant is specified in the grant agreement.
    (4) We may establish supplemental reporting, monitoring and 
oversight requirements for national emergency grants. The requirements 
will be identified in the grant application instructions or the grant 
document.
    (5) We may negotiate and fund projects under terms other than those 
specified in this part where it can be clearly demonstrated that such 
adjustments will achieve a greater positive benefit for the workers and/
or communities being assisted.



PART 672_PROVISIONS GOVERNING THE YOUTHBUILD PROGRAM--Table of Contents



                    Subpart A_Purpose and Definitions

Sec.
672.100 What is YouthBuild?
672.105 What are the purposes of the YouthBuild program?
672.110 What definitions apply to this part?

                Subpart B_Funding and Grant Applications

672.200 How are YouthBuild grants funded and administered?
672.205 How does an eligible entity apply for grant funds to operate a 
          YouthBuild program?
672.210 How are eligible entities selected to receive grant funds?
672.215 How are eligible entities notified of approval for grant funds?

                     Subpart C_Program Requirements

672.300 Who is an eligible participant?
672.305 Are there special rules that apply to veterans?
672.310 What eligible activities may be funded under the YouthBuild 
          program?
672.315 What timeframes apply to participation?
672.320 What timeframes must be devoted to education and workforce 
          investment or other activities?
672.325 What timeframes apply for follow-up services?

[[Page 164]]

                    Subpart D_Performance Indicators

672.400 What are the performance indicators for YouthBuild grants?
672.405 What are the required levels of performance for the performance 
          indicators?
672.410 What are the reporting requirements for YouthBuild grantees?
672.415 What are the due dates for quarterly reporting?

         Subpart E_Administrative Rules, Costs, and Limitations

672.500 What administrative regulations apply to the YouthBuild program?
672.505 How may grantees provide services under the YouthBuild program?
672.510 What cost limits apply to the use of YouthBuild program funds?
672.515 What are the cost-sharing or matching requirements of the 
          YouthBuild program?
672.520 What are considered to be leveraged funds?
672.525 How are the costs associated with real property treated in the 
          YouthBuild program?
672.530 What participant costs are allowable under the YouthBuild 
          program?
672.535 What effect do payments to YouthBuild participants have on 
          eligibility for other Federal need-based benefits?
672.540 What program income requirements apply under the YouthBuild 
          program?
672.545 Are YouthBuild programs subject to the Davis-Bacon Act labor 
          standards?
672.550 What are the recordkeeping requirements for YouthBuild programs?

                    Subpart F_Additional Requirements

672.600 What are the safety requirements for the YouthBuild Program?
672.605 What are the reporting requirements for youth safety?
672.610 What environmental protection laws apply to the YouthBuild 
          Program?
672.615 What requirements apply to YouthBuild housing?

    Authority: 29 U.S.C. 2918a.

    Source: 77 FR 9129, Feb. 15, 2012, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec.  672.100  What is YouthBuild?

    (a) YouthBuild is a workforce development program that provides 
employment, education, leadership development, and training 
opportunities to disadvantaged and low-income youth between the ages of 
16 and 24, most of whom are secondary school drop outs and are either a 
member of a low-income family, a foster care youth, a youth offender, a 
youth with a disability, a child of an incarcerated parent, or a migrant 
youth.
    (b) Program participants receive education services that may lead to 
either a high school diploma or General Educational Development (GED). 
Further, they receive occupational skills training and are encouraged to 
pursue a post- secondary education or additional training, including 
registered apprenticeship programs. The program is designed to create a 
skilled workforce either in the construction industry, through the 
rehabilitation and construction of housing for homeless individuals and 
families and low- income families, as well as public facilities, or in 
other high wage, high-demand jobs. The program also benefits the larger 
community because it provides more new and rehabilitated affordable 
housing.



Sec.  672.105  What are the purposes of the YouthBuild program?

    (a) The overarching goal of the YouthBuild program is to provide 
disadvantaged and low-income youth the opportunity to obtain education 
and employment skills in local in-demand and high-demand jobs to achieve 
economic self-sufficiency. Additionally, the YouthBuild program has as 
goals:
    (1) To promote leadership skills development and community service 
activities. YouthBuild programs will foster the development of 
leadership skills and a commitment to community improvement among youth 
in low-income communities.
    (2) To enable youth to further their education and training. 
YouthBuild programs will provide counseling and assistance in obtaining 
post-secondary education and/or employment and training placements that 
allow youth to further their education and training.
    (3) To expand the supply of permanent affordable housing and reduce 
the rate of homelessness in communities with YouthBuild programs. The 
program seeks to increase the number of affordable housing units 
available and

[[Page 165]]

to decrease the number of homeless individuals and families in their 
communities.
    (b) Through these educational and occupational opportunities, to 
enable youth participants to provide a valuable contribution to their 
communities. The YouthBuild program will add skilled workers to the 
workforce by educating and training youth who might have otherwise 
succumbed to the negative influences within their environments.



Sec.  672.110  What definitions apply to this part?

    Alternative school. The term ``alternative school'' means a school 
or program that is set up by a State, school district, or other 
community-based entity to serve young people who are not succeeding in a 
traditional public school environment. In order for an ``alternative 
school'' to qualify as of part of a ``sequential service strategy'' it 
must be recognized by the authorizing entity designated by the State, 
award a high school diploma or both a high school diploma and a GED and, 
must be affiliated with a YouthBuild program.
    Community or other public facility. The term ``community or other 
public facility'' means those facilities which are either privately 
owned by non-profit organizations, including faith-based and community-
based organizations, and publicly used for the benefit of the community, 
or publicly owned and publicly used for the benefit of the community.
    Core construction. The term ``core construction'' means activities 
that are directly related to the construction or rehabilitation of 
residential, community, or other public facilities. These activities 
include, but are not limited to, job skills that can be found under the 
Standard Occupational Classification System (SOC) major group 47, 
Construction and Extraction Occupations, in codes 47-1011 through 47-
4099. These activities may also include, but are not limited to, 
construction skills that may be required by green building and 
weatherization industries but are not yet standardized. A full list of 
the SOC's can be found at the Bureau of Labor Statistics (BLS) Web site, 
http://www.bls.gov/soc.
    Eligible entity. The term ``eligible entity'' means a public or 
private nonprofit agency or organization (including a consortium of such 
agencies or organizations), including--
    (1) A community-based organization;
    (2) A faith-based organization;
    (3) An entity carrying out activities under this Title, such as a 
local school board;
    (4) A community action agency;
    (5) A State or local housing development agency;
    (6) An Indian tribe or other agency primarily serving Indians;
    (7) A community development corporation;
    (8) A State or local youth service or conservation corps; and
    (9) Any other entity eligible to provide education or employment 
training under a Federal program (other than the program carried out 
under this part).
    Homeless individual. For purposes of YouthBuild, the definition of 
``homeless individual'' at Section 103 of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11302) applies.
    Housing development agency. The term ``housing development agency'' 
means any agency of a Federal, State or local government, or any private 
nonprofit organization, that is engaged in providing housing for 
homeless individuals or low-income families.
    Income. As defined in 42 U.S.C. 1437a(b), ``income'' is: Income from 
all sources of each member of the household, as determined in accordance 
with the criteria prescribed by the Secretary of Labor, in consultation 
with the Secretary of Agriculture, except that any amounts not actually 
received by the family and any amounts which would be eligible for 
exclusion under sec. 1382b(a)(7) of the United States Housing Act of 
1937, may not be considered as income under this paragraph.
    Indian; Indian tribe. As defined in 25 U.S.C. 450b of sec. 4 of the 
Indian Self- Determination and Education Assistance Act, the term 
``Indian'' is a person who is a member of an Indian tribe;

[[Page 166]]

and the term ``Indian tribe'' is any Indian tribe, band, nation, or 
other organized group or community, including any Alaska Native village 
or regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688) (43 U.S.C. 
1601 et seq.), which is recognized as eligible for the special programs 
and services provided by the United States to Indians because of their 
status as Indians.
    Individual of limited English proficiency. As defined in 20 U.S.C. 
9202(10), an ``individual of limited English proficiency'' is: An adult 
or out- of-school youth who has limited ability in speaking, reading, 
writing, or understanding the English language, and:
    (1) Whose native language is a language other than English; or
    (2) Who lives in a family or community environment where a language 
other than English is the dominant language.
    Low-income family. As defined in 42 U.S.C. 1437a(b)(2), a ``low-
income family'' is: A family whose income does not exceed 80 percent of 
the median income for the area, as determined by the Secretary of Labor 
with adjustments for smaller and larger families, except that the 
Secretary of Labor may establish income ceilings higher or lower than 80 
percent of the median for the area if the Secretary finds that such 
variations are necessary because of prevailing levels of construction 
costs or unusually high or low family incomes. Further, as defined by 42 
U.S.C. 1437a(b)(2)(3), the term families includes families consisting of 
one person.
    Migrant youth. The term ``migrant youth'' means a youth, or a youth 
who is the dependent of someone who, during the previous 12 months has:
    (1) Worked at least 25 days in agricultural labor that is 
characterized by chronic unemployment or underemployment;
    (2) Made at least $800 from agricultural labor that is characterized 
by chronic unemployment or underemployment, if at least 50 percent of 
his or her income came from such agricultural labor;
    (3) Was employed at least 50 percent of his or her total employment 
in agricultural labor that is characterized by chronic unemployment or 
underemployment; or
    (4) Was employed in agricultural labor that requires travel to a 
jobsite such that the farmworker is unable to return to a permanent 
place of residence within the same day.
    Needs-based stipend. The term ``Needs-based stipends'' means 
additional payments (beyond regular stipends for program participation) 
that are based on defined needs that enable youth to participate in the 
program. To provide needs-based stipends the grantee must have a written 
policy in place, which defines: Eligibility; the amounts; and the 
required documentation and criteria for payments. This policy must be 
applied consistently to all program participants.
    Occupational skills training. The term ``Occupational skills 
training'' means an organized program of study that provides specific 
vocational skills that lead to proficiency in performing the actual 
tasks and technical functions required by certain occupational fields at 
entry, intermediate, or advanced levels. The occupational skills 
training offered in YouthBuild programs must begin upon program 
enrollment and be tied to the award of an industry-recognized 
credential.
    Partnership. The term ``partnership'' means an agreement that 
involves a Memorandum of Understanding (MOU) or letter of commitment 
submitted by each organization and applicant, as defined in the 
YouthBuild Transfer Act, that plan on working together as partners in a 
YouthBuild program. Each partner must have a clearly defined role. These 
roles must be verified through a letter of commitment, not just a letter 
of support, or an MOU submitted by each partner. The letter of 
commitment or MOU must detail the role the partner will play in the 
YouthBuild Program, including the partner's specific responsibilities 
and resources committed, if appropriate. These letters or MOUs must 
clearly indicate the partnering organization's unique contribution and 
commitment to the YouthBuild Program.
    Public housing agency. As defined in 42 U.S.C. 1437a(b), a ``public 
housing

[[Page 167]]

agency'' is: Any State, county, municipality or other government entity 
or public body, or agency or instrumentality of these entities, that is 
authorized to engage or assist in the development or operation of low- 
income housing.
    Registered apprenticeship program. The term ``registered 
apprenticeship program'' means:
    (1) Registered under the Act of August 16, 1937 (commonly known as 
the ``National Apprenticeship Act''; 50 Stat. 664, chapter 663; 20 
U.S.C. 50 et seq.); and
    (2) A program with a plan containing all terms and conditions for 
the qualification, recruitment, selection, employment and training of 
apprentices, as required under 29 CFR parts 29 and 30, including such 
matters as the requirement for a written apprenticeship agreement.
    Sequential service strategy. The term ``sequential service 
strategy'' means the educational and occupational skills training plan 
developed for individuals who have dropped out of high school and want 
to enroll in a YouthBuild program. The plan is designed so that the 
individual sequentially enrolls in an alternative school, and after 
receiving a year or more of educational services, enrolls in the 
YouthBuild program.
    Transitional housing. The term ``transitional housing'' means 
housing provided for the purpose of facilitating the movement of 
homeless individuals to independent living within a reasonable amount of 
time. The term includes housing primarily designed to serve 
deinstitutionalized homeless individuals and other homeless individuals 
who are individuals with disabilities or are members of families with 
children.
    Youth in foster care. The term ``youth in foster care'' means youth 
currently in foster care or youth who have ever been in foster care.
    Youth who is an individual with a disability. The term youth who is 
an individual with a disability means a youth with any disability (as 
defined in section 3 of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12102)) or a student receiving special education and related 
services under the Individuals with Disabilities Education Act (IDEA).



                Subpart B_Funding and Grant Applications



Sec.  672.200  How are YouthBuild grants funded and administered?

    The Secretary uses funds authorized for appropriation under sec. 
173A of the Workforce Investment Act (WIA) to administer YouthBuild as a 
national program under Title I, Subtitle D of the Act. YouthBuild grants 
are awarded to eligible entities, as defined in Sec.  672.110, through a 
competitive selection process described in Sec.  672.205.



Sec.  672.205  How does an eligible entity apply for grant funds
to operate a YouthBuild program?

    The Secretary announces the availability of grant funds through a 
Solicitation for Grant Applications (SGA). The SGA contains instructions 
for what is required in the grant application, describes eligibility 
requirements, the rating criteria that will be used in reviewing grant 
applications, and special reporting requirements to operate a YouthBuild 
project.



Sec.  672.210  How are eligible entities selected to receive
grant funds?

    In order to receive funds under the YouthBuild program, an eligible 
entity applying for funds (applicant) must meet selection criteria 
established by the Secretary which include:
    (a) The qualifications or potential capabilities of an applicant;
    (b) An applicant's potential to develop a successful YouthBuild 
program;
    (c) The need for an applicant's proposed program, as determined by 
the degree of economic distress of the community from which participants 
would be recruited (measured by indicators such as poverty, youth 
unemployment, and the number of individuals who have dropped out of 
secondary school) and of the community in which the housing and public 
facilities proposed to be rehabilitated or constructed are located 
(measured by indicators such as incidence of homelessness, shortage of 
affordable housing, and poverty);
    (d) The commitment of an applicant to provide skills training, 
leadership

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development, counseling and case management, and education to 
participants;
    (e) The focus of a proposed program on preparing youth for 
postsecondary education and training opportunities or local in-demand 
occupations;
    (f) The extent of an applicant's coordination of activities to be 
carried out through the proposed program with:
    (1) Local boards, One-Stop Career Center operators, and One-Stop 
partners participating in the operation of the One-Stop delivery system 
involved, or the extent of the applicant's good faith efforts, as 
determined by the Secretary, in achieving such coordination;
    (2) Public education, criminal justice, housing and community 
development, national service, or postsecondary education or other 
systems that relate to the goals of the proposed program; and
    (3) Employers in the local area.
    (g) The extent to which a proposed program provides for inclusion of 
tenants who were previously homeless individuals or families in the 
rental of housing provided through the program;
    (h) The commitment of additional resources to the proposed program 
(in addition to the funds made available through the grant) by:
    (1) An applicant;
    (2) Recipients of other Federal, State, or local housing and 
community development assistance who will sponsor any part of the 
rehabilitation, construction, operation and maintenance, or other 
housing and community development activities undertaken as part of the 
proposed program; or
    (3) Entities carrying out other Federal, State, or local activities 
or activities conducted by Indian tribes, including vocational education 
programs, adult and language instruction educational programs, and job 
training using funds provided under WIA,
    (i) An applicant's ability to enter partnerships with:
    (1) Education and training providers including:
    (i) The kindergarten through twelfth grade educational system;
    (ii) Adult education programs;
    (iii) Community and technical colleges;
    (iv) Four-year colleges and universities;
    (v) Registered apprenticeship programs; and
    (vi) Other training entities.
    (2) Employers, including professional organizations and 
associations. An applicant will be evaluated on the extent to which 
employers participate in:
    (i) Defining the program strategy and goals;
    (ii) Identifying needed skills and competencies;
    (iii) Designing training approaches and curricula;
    (iv) Contributing financial support; and
    (v) Hiring qualified YouthBuild graduates.
    (3) The workforce investment system which may include:
    (i) State and local workforce investment boards;
    (ii) State workforce agencies; and
    (iii) One-Stop Career Centers and their cooperating partners.
    (4) The juvenile and adult justice systems, and the extent to which 
they provide:
    (i) Support and guidance for YouthBuild participants with court 
involvement;
    (ii) Assistance in the reporting of recidivism rates among 
YouthBuild participants; and
    (iii) Referrals of eligible participants through diversion or re-
entry from incarceration.
    (5) Faith-based and community organizations, and the extent to which 
they provide a variety of grant services such as:
    (i) Case management;
    (ii) Mentoring;
    (iii) English as a Second Language courses; and
    (iv) Other comprehensive supportive services, when appropriate.
    (j) The applicant's potential to serve different regions, including 
rural areas and States that may not have previously received grants for 
YouthBuild programs; and
    (k) Such other factors as the Secretary determines to be appropriate 
for purposes of evaluating an applicant's potential to carry out the 
proposed program in an effective and efficient manner.

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    (l) The weight to be given to these factors will be described in the 
SGA issued under Sec.  672.205.



Sec.  672.215  How are eligible entities notified of approval
for grant funds?

    The Secretary will, to the extent practicable, notify each eligible 
entity applying for funds no later than 5 months from the date the 
application is received, whether the application is approved or 
disapproved. In the event additional funds become available, ETA 
reserves the right to use such funds to select additional grantees from 
applications submitted in response to an SGA.



                     Subpart C_Program Requirements



Sec.  672.300  Who is an eligible participant?

    (a) Eligibility criteria. Except as provided in paragraph (b) of 
this section, an individual is eligible to participate in a YouthBuild 
program if the individual is:
    (1) Not less than age 16 and not more than age 24 on the date of 
enrollment; and
    (2) A school dropout or an individual who has dropped out of school 
and reenrolled in an alternative school, if that reenrollment is part of 
a sequential service strategy; and
    (3) Is one or more of the following:
    (i) A member of a low-income family as defined in Sec.  672.110;
    (ii) A youth in foster care;
    (iii) A youth offender;
    (iv) A youth who is an individual with a disability;
    (v) The child of a current or formerly incarcerated parent; or
    (vi) A migrant youth as defined in Sec.  672.110.
    (b) Exceptions. Not more than 25 percent of the participants in a 
program, under this section, may be individuals who do not meet the 
requirements of paragraph (a)(2) or (3) of this section, if such 
individuals:
    (1) Are basic skills deficient as defined in section 101(4) of WIA, 
even if they have their high school diploma, GED credential, or other 
State-recognized equivalent; or
    (2) Have been referred by a local secondary school for participation 
in a YouthBuild program leading to the attainment of a secondary school 
diploma.



Sec.  672.305  Are there special rules that apply to veterans?

    Special rules for determining income for veterans are found in 20 
CFR 667.255 and for the priority of service provisions for qualified 
persons are found in 20 CFR part 1010. Those special rules apply to 
covered persons who are eligible to participate in the YouthBuild 
program.



Sec.  672.310  What eligible activities may be funded under the
YouthBuild program?

    Grantees may provide one or more of the following education and 
workforce investment and other activities to YouthBuild participants--
    (a) Eligible education activities include:
    (1) Services and activities designed to meet the educational needs 
of participants, including:
    (i) Basic skills instruction and remedial education;
    (ii) Language instruction educational programs for individuals with 
limited English proficiency;
    (iii) Secondary education services and activities, including 
tutoring, study skills training, and dropout prevention activities, 
designed to lead to the attainment of a secondary school diploma, GED 
credential, or other State- recognized equivalent (including recognized 
alternative standards for individuals with disabilities);
    (iv) Counseling and assistance in obtaining post-secondary education 
and required financial aid; and
    (v) Alternative secondary school services;
    (2) Counseling services and related activities, such as 
comprehensive guidance and counseling on drug and alcohol abuse and 
referral to appropriate treatment;
    (3) Activities designed to develop employment and leadership skills, 
which may include community service and peer-centered activities 
encouraging responsibility and other positive social behaviors, and 
activities related to

[[Page 170]]

youth policy committees that participate in decisionmaking related to 
the program; and
    (4) Supportive services, as defined under Title I of WIA Section 
101(46), and provision of need-based stipends, as defined in Sec.  
672.110.
    (b) Eligible workforce investment activities include:
    (1) Work experience and skills training (coordinated, to the maximum 
extent feasible, with registered apprenticeship programs) in housing 
rehabilitation and construction activities described in paragraphs 
(c)(1) and (2) of this section;
    (2) Occupational skills training;
    (3) Other paid and unpaid work experiences, including internships 
and job shadowing; and
    (4) Job search assistance.
    (c) Other eligible activities include:
    (1) Supervision and training for participants in the rehabilitation 
or construction of housing, including residential housing for homeless 
individuals and families or low-income families, or transitional housing 
for homeless individuals and families;
    (2) Supervision and training for participants in the rehabilitation 
or construction of community or other public facilities, except that, as 
provided in Sec.  672.505(b), not more than 10 percent of the funds 
awarded for each grant may be used for such supervision and training;
    (3) Ongoing training and technical assistance for staff of grant 
recipients that is related to developing and carrying out the YouthBuild 
program;
    (4) Payment of a portion of the administrative costs of the program 
as provided in Sec.  672.505(a);
    (5) Adult mentoring;
    (6) Provision of wages, stipends, or additional benefits to 
participants in the program as provided in Sec.  672.530; and
    (7) Follow-up services as provided in Sec.  672.325.



Sec.  672.315  What timeframes apply to participation?

    An eligible individual selected for participation in the program 
must be offered full-time participation in the program for not less than 
6 months and not more than 24 months.



Sec.  672.320  What timeframes must be devoted to education and
workforce investment or other activities?

    YouthBuild grantees must structure programs so that participants in 
the program are offered:
    (a) Eligible education activities, as specified in Sec.  672.310(a), 
during at least 50 percent of the time during which they participate in 
the program; and
    (b) Eligible workforce investment activities, as specified in Sec.  
672.310(b), during at least 40 percent of the time during which they 
participate in the program. Grantees must provide the eligible workforce 
investment activities described in Sec.  672.310(b)(1) as part of their 
program of eligible workforce investment activities.
    (c) The remaining 10 percent of the time of participation can be 
used for the activities described in paragraphs (a) and (b) of this 
section and/or for leadership development and community service 
activities.



Sec.  672.325  What timeframes apply for follow-up services?

    Follow-up services must be provided to all YouthBuild participants 
for a period of not less than 9 months but no more than 12 months after 
participants exit a YouthBuild program. These are services that assist 
participants in obtaining or retaining employment, or applying for and 
transitioning to post-secondary education or training.



                    Subpart D_Performance Indicators



Sec.  672.400  What are the performance indicators for
YouthBuild grants?

    (a) The performance indicators for YouthBuild grants are:
    (1) Placement in employment or education;
    (2) Attainment of a degree or certificate;
    (3) Literacy and numeracy gains; and
    (4) Such other indicators of performance as may be required by the 
Secretary.
    (b) We will provide the details of the performance indicators in 
administrative guidance.

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Sec.  672.405  What are the required levels of performance for
the performance indicators?

    (a) Expected levels of performance for each of the common 
performance indicators are national standards that are provided in 
separately issued guidance. Short-term or other performance indicators 
will be provided in separately issued guidance or as part of the SGA or 
grant agreement. Performance level expectations are based on available 
YouthBuild data and data from similar WIA Youth programs and may change 
between grant competitions. The expected national levels of performance 
will take into account the extent to which the levels promote continuous 
improvement in performance.
    (b) The levels of performance established will, at a minimum:
    (1) Be expressed in an objective, quantifiable, and measurable form; 
and
    (2) Indicate continuous improvement in performance.



Sec.  672.410  What are the reporting requirements for
YouthBuild grantees?

    Each grantee must provide such reports as are required by the 
Secretary in separately issued guidance, including:
    (a) The Quarterly Performance Report;
    (b) The quarterly narrative progress report;
    (c) The financial report; and
    (d) Such other reports as may be required by the grant agreement.



Sec.  672.415  What are the due dates for quarterly reporting?

    (a) Quarterly reports are due no later than 45 days after the end of 
the reporting quarter, unless otherwise specified in the reporting 
guidance issued under Sec.  672.410; and
    (b) A final financial report is required 90 days after the 
expiration of a funding period or the termination of grant support.



         Subpart E_Administrative Rules, Costs, and Limitations



Sec.  672.500  What administrative regulations apply to the
YouthBuild program?

    Each YouthBuild grantee must comply with the following:
    (a) The regulations found in this part.
    (b) The general administrative requirements found in 20 CFR part 
667, except those that apply only to the WIA Title I-B program and those 
that have been modified by this section.
    (c) The Department's regulations on government-wide requirements, 
which include:
    (1) The regulations codifying the Office of Management and Budget's 
government-wide grants requirements: Circular A-110 (codified at 2 CFR 
part 215), and Circular A-102 at 29 CFR parts 95 and 97, as applicable;
    (2) The Department's regulations at 29 CFR part 37, which implement 
the nondiscrimination provisions of WIA section 188;
    (3) The Department's regulations at 29 CFR parts 93, 94, and 98 
relating to restrictions on lobbying, drug free workplace, and debarment 
and suspension; and
    (4) The audit requirements of OMB Circular A-133 stated at 29 CFR 
part 99, as required by 29 CFR 96.11, 95.26, and 97.26, as applicable.



Sec.  672.505  How may grantees provide services under the
YouthBuild program?

    Each recipient of a grant under the YouthBuild program may provide 
the services and activities described in these regulations either 
directly or through subgrants, contracts, or other arrangements with 
local educational agencies, postsecondary educational institutions, 
State or local housing development agencies, other public agencies, 
including agencies of Indian tribes, or private organizations.



Sec.  672.510  What cost limits apply to the use of YouthBuild
program funds?

    (a) Administrative costs for programs operated under YouthBuild are 
limited to no more than 15 percent of the grant

[[Page 172]]

award. The definition of administrative costs can be found in 20 CFR 
667.220.
    (b) The cost of supervision and training for participants involved 
in the rehabilitation or construction of community and other public 
facilities is limited to no more than 10 percent of the grant award.



Sec.  672.515  What are the cost-sharing or matching requirements
of the YouthBuild program?

    (a) The cost-sharing or matching requirements applicable to a 
YouthBuild grant will be addressed in the grant agreement.
    (b) The value of construction materials used in the YouthBuild 
program is an allowable cost for the purposes of the required non-
Federal share or match.
    (c) The value of land acquired for the YouthBuild program is not an 
allowable cost-sharing or match.
    (d) Federal funds may not be used as cost-sharing or match resources 
except as provided by Federal law.
    (e) The value of buildings acquired for the YouthBuild program is an 
allowable match, provided that the following conditions apply:
    (1) The purchase cost of buildings used solely for training purposes 
is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase price related to direct training activities.
    (f) Grantees must follow the requirements of 29 CFR 95.23 or 29 CFR 
97.24 in the accounting, valuation, and reporting of the required non-
Federal share.



Sec.  672.520  What are considered to be leveraged funds?

    (a) Leveraged funds may be used to support allowable YouthBuild 
program activities and consist of payments made for allowable costs 
funded by both non-YouthBuild Federal, and non-Federal, resources which 
include:
    (1) Costs which meet the criteria for cost-sharing or match in Sec.  
672.515 and are in excess of the amount of cost-sharing or match 
resources required;
    (2) Costs which would meet the criteria in Sec.  672.515 except that 
they are paid for with other Federal resources; and
    (3) Costs which benefit the grant program and are otherwise 
allowable under the cost principles but are not allowable under the 
grant because of some statutory, regulatory, or grant provision, whether 
paid for with Federal or non-Federal resources.
    (b) The use of leveraged funds must be reported in accordance with 
Departmental instructions.



Sec.  672.525  How are the costs associated with real property
treated in the YouthBuild program?

    (a) As provided in paragraphs (b) and (c) of this section, the costs 
of the following activities associated with real property are allowable 
solely for the purpose of training YouthBuild participants:
    (1) Rehabilitation of existing structures for use by homeless 
individuals and families or low-income families or for use as 
transitional housing.
    (2) Construction of buildings for use by homeless individuals and 
families or low-income families or for use as transitional housing.
    (3) Construction or rehabilitation of community or other public 
facilities, except, as provided in Sec.  672.510(b), only 10 percent of 
the grant award is allowable for such construction and rehabilitation.
    (b) The costs for acquisition of buildings that are used for 
activities described in paragraph (a) of this section are allowable with 
prior grant officer approval and only under the following conditions:
    (1) The purchase cost of buildings used solely for training purposes 
is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase cost related to direct training.
    (c) The following costs are allowable to the extent allocable to 
training YouthBuild participants in the construction and rehabilitation 
activities specified in paragraph (a) of this section:
    (1) Trainees' tools and clothing including personal protective 
equipment (PPE);

[[Page 173]]

    (2) On-site trainee supervisors;
    (3) Construction management;
    (4) Relocation of buildings; and
    (5) Clearance and demolition.
    (d) Architectural fees, or a proportionate share thereof, are 
allowable when such fees can be related to items such as architectural 
plans or blueprints on which participants will be trained.
    (e) The following costs are unallowable:
    (1) The costs of acquisition of land.
    (2) Brokerage fees.



Sec.  672.530  What participant costs are allowable under the
YouthBuild program?

    Allowable participant costs include:
    (a) The costs of payments to participants engaged in eligible work-
related YouthBuild activities.
    (b) The costs of payments provided to participants engaged in non-
work- related YouthBuild activities.
    (c) The costs of needs-based stipends.
    (d) The costs of supportive services.
    (e) The costs of providing additional benefits to participants or 
individuals who have exited the program and are receiving follow-up 
services, which may include:
    (1) Tuition assistance for obtaining college education credits;
    (2) Scholarships to an Apprenticeship, Technical, or Secondary 
Education program; and
    (3) Sponsored health programs.



Sec.  672.535  What effect do payments to YouthBuild participants
have on eligibility for other Federal need-based benefits?

    Under 20 CFR 667.272(c), allowances, earnings, and payments to 
individuals participating in programs under Title I of WIA are not 
considered as income for purposes of determining eligibility for and the 
amount of income transfer and in-kind aid furnished under any Federal or 
Federally-assisted program based on need other than as provided under 
the Social Security Act (42 U.S.C. 301).



Sec.  672.540  What program income requirements apply under
the YouthBuild program?

    (a) Except as provided in paragraph (b) of this section, program 
income requirements, as specified in the applicable Uniform 
Administrative Requirements at 29 CFR 95.24 and 97.25, apply to 
YouthBuild grants.
    (b) Revenue from the sale of buildings rehabilitated or constructed 
under the YouthBuild program to homeless individuals and families and 
low-income families is not considered program income. Grantees are 
encouraged to use that revenue for the long-term sustainability of the 
YouthBuild program.



Sec.  672.545  Are YouthBuild programs subject to the 
Davis-Bacon Act labor standards?

    (a) YouthBuild programs and grantees are subject to Davis-Bacon 
labor standards requirements under the circumstances set forth in 
paragraph (b) of this section. In those instances where a grantee is 
subject to Davis-Bacon requirements, the grantee must follow applicable 
requirements in the Department's regulations at 29 CFR parts 1, 3, and 
5, including the requirements contained in the Davis-Bacon contract 
provisions set forth in 29 CFR 5.5.
    (b) YouthBuild participants are subject to Davis-Bacon Act labor 
standards when they perform Davis-Bacon-covered laborer or mechanic 
work, defined at 29 CFR 5.2, on Federal or Federally-assisted projects 
that are subject to the Davis-Bacon Act labor standards. The Davis-Bacon 
prevailing wage requirements apply to hours worked on the site of the 
work.
    (c) YouthBuild participants who are not registered and participating 
in a training program approved by the Employment and Training 
Administration must be paid not less than the applicable wage rate on 
the wage determination for the classification of work actually 
performed.



Sec.  672.550  What are the recordkeeping requirements for
YouthBuild programs?

    (a) Grantees must follow the recordkeeping requirements specified in 
the Uniform Administrative Requirements, at 29 CFR 95.53 and 29 CFR 
97.42, as appropriate.
    (b) Grantees must maintain such additional records related to the 
use of

[[Page 174]]

buildings constructed or rehabilitated with YouthBuild funds as 
specified in the grant agreement or in the Department's guidance.



                    Subpart F_Additional Requirements



Sec.  672.600  What are the safety requirements for the
YouthBuild program?

    (a) YouthBuild Grantees must comply with 20 CFR 667.274, which 
applies Federal and State health and safety standards to the working 
conditions under WIA-funded projects and programs. These health and 
safety standards include ``hazardous orders'' governing child labor 
under 29 CFR part 570 prohibiting youth ages 16 and 17 from working in 
identified hazardous occupations.
    (b) YouthBuild grantees are required to:
    (1) Provide comprehensive safety training for youth working on 
YouthBuild construction projects;
    (2) Have written, jobsite-specific, safety plans overseen by an on-
site supervisor with authority to enforce safety procedures;
    (3) Provide necessary personal protective equipment to youth working 
on YouthBuild projects; and
    (4) Submit required injury incident reports.



Sec.  672.605  What are the reporting requirements for
youth safety?

    YouthBuild grantees must ensure that YouthBuild program sites comply 
with the Occupational Safety and Health Administration's (OSHA) 
reporting requirements in 29 CFR part 1904. A YouthBuild grantee is 
responsible for sending a copy of OSHA's injury incident report form, to 
U.S. Department of Labor, Employment and Training Administration within 
7 days of any reportable injury suffered by a YouthBuild participant. 
The injury incident report form is available from OSHA and can be 
downloaded at http://www.osha.gov/recordkeeping/RKforms.html. Reportable 
injuries include those that result in death, days away from work, 
restricted work or transfer to another job, medical treatment beyond 
first aid, or loss of consciousness.



Sec.  672.610  What environmental protection laws apply to
the YouthBuild program?

    YouthBuild Program grantees are required, where applicable, to 
comply with all environmental protection statutes and regulations.



Sec.  672.615  What requirements apply to YouthBuild housing?

    (a) YouthBuild grantees must ensure that all residential housing 
units which are constructed or rehabilitated using YouthBuild funds must 
be available solely for:
    (1) Sale to homeless individuals and families or low-income 
families;
    (2) Rental by homeless individuals and families or low-income 
families;
    (3) Use as transitional or permanent housing for the purpose of 
assisting in the movement of homeless individuals and families to 
independent living; or
    (4) Rehabilitation of homes for low-income homeowners.
    (b) For rentals of residential units located on the property which 
are constructed or rehabilitated using YouthBuild funds:
    (1) The property must maintain at least a 90 percent level of 
occupancy for low-income families. The income test will be conducted 
only at the time of entry for each available unit or rehabilitation of 
occupant-owned home. If the grantee cannot find a qualifying tenant to 
lease the unit, the unit may be leased to a family whose income is above 
the income threshold to qualify as a low-income family but below the 
median income for the area. Leases for tenants with higher incomes will 
be limited to not more than two years. The leases provided to tenants 
with higher incomes are not subject to the termination clause that is 
described in paragraph (b)(2) of this section.
    (2) The property owner must not terminate the tenancy or refuse to 
renew the lease of a tenant occupying a residential rental housing unit 
constructed or rehabilitated using YouthBuild funds except for serious 
or repeated violations of the terms and conditions of the lease, for 
violation of applicable Federal, State or local laws, or for good cause. 
Any termination or refusal to renew the lease must be preceded by not 
less than a 30-day written notice to

[[Page 175]]

the tenant specifying the grounds for the action. The property owner may 
waive the written notice requirement for termination in dangerous or 
egregious situations involving the tenant.
    (c) All transitional or permanent housing for homeless individuals 
or families or low-income families must be safe and sanitary. The 
housing must meet all applicable State and local housing codes and 
licensing requirements in the jurisdiction in which the housing is 
located.
    (d) For sales or rentals of residential housing units constructed or 
rehabilitated using YouthBuild funds, YouthBuild grantees must ensure 
that owners of the property record a restrictive covenant at the time 
that an occupancy permit is issued against such property which includes 
the use restrictions set forth in paragraphs (a), (b), and (c) of this 
section and incorporates the following definitions at Sec.  672.110: 
Homeless Individual; Low- Income Housing; and Transitional Housing. The 
term of the restrictive covenant must be at least 10 years from the time 
of the issuance of the occupancy permit, unless a time period of more 
than 10 years has been established by the grantee. Any additional 
stipulations imposed by a grantee or property owner should be clearly 
stated in the covenant.
    (e) Any conveyance document prepared in the 10-year period of the 
restrictive covenant must inform the buyer of the property that all 
residential housing units constructed or rehabilitated using YouthBuild 
funds are subject to the restrictions set forth in paragraphs (a), (b), 
(c), and (d) of this section.

                        PARTS 673	674 [RESERVED]



PART 675_INTRODUCTION TO THE REGULATIONS FOR THE WORKFORCE
DEVELOPMENT SYSTEMS UNDER TITLE I OF THE WORKFORCE INNOVATION
AND OPPORTUNITY ACT--Table of Contents



Sec.
675.100 What are the purposes of title I of the Workforce Innovation and 
          Opportunity Act?
675.200 What do the regulations for workforce development systems under 
          title I of the Workforce Innovation and Opportunity Act cover?
675.300 What definitions apply to these regulations?

    Authority: Secs. 2, 3, 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).

    Source: 81 FR 56368, Aug. 19, 2016, unless otherwise noted.



Sec.  675.100  What are the purposes of title I of the Workforce
Innovation and Opportunity Act?

    The purposes of title I of the Workforce Innovation and Opportunity 
Act (WIOA) include:
    (a) Increasing access to, and opportunities for individuals to 
receive, the employment, education, training, and support services 
necessary to succeed in the labor market, with a particular focus on 
those individuals with disabilities or other barriers to employment 
including out of school youth with the goal of improving their outcomes;
    (b) Enhancing the strategic role for States and elected officials, 
and Local Workforce Development Boards (WDBs) in the public workforce 
system by increasing flexibility to tailor services to meet employer and 
worker needs at State, regional, and local levels;
    (c) Streamlining service delivery across multiple programs by 
requiring colocation, coordination, and integration of activities and 
information to make the system understandable and accessible for 
individuals, including individuals with disabilities and those with 
other barriers to employment, and businesses.
    (d) Supporting the alignment of the workforce investment, education, 
and economic development systems in support of a comprehensive, 
accessible, and high-quality workforce development system at the 
Federal, State, and local and regional levels;
    (e) Improving the quality and labor market relevance of workforce 
investment, education, and economic development efforts by promoting the 
use of industry and sector partnerships, career pathways, and regional 
service delivery strategies in order to both provide America's workers 
with the skills and credentials that will enable them to secure and 
advance in employment with family-sustaining wages, and to

[[Page 176]]

provide America's employers with the skilled workers the employers need 
to succeed in a global economy;
    (f) Promoting accountability using core indicators of performance 
measured across all WIOA authorized programs, sanctions, and high 
quality evaluations to improve the structure and delivery of services 
through the workforce development system to address and improve the 
employment and skill needs of workers, job seekers, and employers;
    (g) Increasing the prosperity and economic growth of workers, 
employers, communities, regions, and States; and
    (h) Providing workforce development activities through statewide and 
local workforce development systems to increase employment, retention 
and earnings of participants and to increase industry-recognized 
postsecondary credential attainment to improve the quality of the 
workforce, reduce welfare dependency, increase economic self-
sufficiency, meet skill requirements of employers, and enhance 
productivity and competitiveness of the nation.



Sec.  675.200  What do the regulations for workforce development
systems under title I of the Workforce Innovation and Opportunity
Act cover?

    (a) The regulations found in parts 675 through 688 of this chapter 
set forth the regulatory requirements that are applicable to programs 
operated with funds provided under title I of WIOA. This part describes 
the purpose of that Act, explains the format of these regulations, and 
sets forth definitions for terms that apply to each part. Parts 676, 677 
and 678 of this chapter contain regulations relating to Unified and 
Combined State Plans, performance accountability, and the one-stop 
delivery system and the roles of one-stop partners, respectively. Part 
679 of this chapter contains regulations relating to statewide and local 
governance of the workforce development system. Part 680 of this chapter 
sets forth requirements applicable to WIOA title I programs serving 
adults and dislocated workers. Part 681 of this chapter sets forth 
requirements applicable to WIOA title I programs serving youth. Part 682 
of this chapter contains regulations relating to statewide activities. 
Part 683 of this chapter sets forth the administrative requirements 
applicable to programs funded under WIOA title I. Parts 684 and 685 of 
this chapter contain the particular requirements applicable to programs 
serving Indians and Native Americans and Migrant and Seasonal 
Farmworkers, respectively. Parts 686 and 687 of this chapter describe 
the particular requirements applicable to the Job Corps and the national 
dislocated worker grant programs, respectively. Part 688 of this chapter 
contains the regulations governing the YouthBuild program. In addition, 
part 603 of this chapter provides the requirements regarding 
confidentiality and disclosure of State Unemployment Compensation 
program data under WIOA.
    (b) Finally, parts 651 through 658 of this chapter address 
provisions for the Wagner-Peyser Act Employment Service, as amended by 
WIOA title III. Specifically, part 651 of this chapter contains general 
provisions and definitions of terms used in parts 651 through 658 of 
this chapter; part 652 of this chapter establishes the State Employment 
Service and describes its operation and services; part 653 of this 
chapter describes employment services to migrant and seasonal 
farmworkers and the role of the State Monitor Advocate; part 654 of this 
chapter addresses the special responsibilities of the Employment Service 
regarding housing for farmworkers; and part 658 of this chapter contains 
the administrative provisions that apply to the Wagner-Peyser Act 
Employment Service.
    (c) Title 29 CFR part 38 contains the Department's nondiscrimination 
regulations implementing WIOA sec. 188.



Sec.  675.300  What definitions apply to these regulations?

    In addition to the definitions set forth in WIOA and those set forth 
in specific parts of this chapter, the following definitions apply to 
the regulations in parts 675 through 688 of this chapter:
    Consultation means the process by which State and/or local 
stakeholders convene to discuss changes to the public workforce system 
and constitutes a

[[Page 177]]

robust conversation in which all parties are given an opportunity to 
share their thoughts and opinions.
    Contract means a legal instrument by which a non-Federal entity 
purchases property or services needed to carry out the project or 
program under a Federal award. The term as used in this part does not 
include a legal instrument, even if the non-Federal entity considers it 
a contract, when the substance of the transaction meets the definition 
of a Federal award or subaward as defined in this section.
    Contractor means an entity that receives a contract as defined in 
this section.
    Cooperative agreement means a legal instrument of financial 
assistance between a Federal awarding agency or pass-through entity and 
a non-Federal entity that, consistent with 31 U.S.C. 6302-6305:
    (1) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value from the Federal awarding agency 
or pass-through entity to the non-Federal entity to carry out a public 
purpose authorized by a law of the United States (see 31 U.S.C. 
6101(3)); and not to acquire property or services for the Federal 
government or pass-through entity's direct benefit or use;
    (2) Is distinguished from a grant in that it provides for 
substantial involvement between the Federal awarding agency or pass-
through entity and the non-Federal entity in carrying out the activity 
contemplated by the Federal award.
    (3) The term does not include:
    (i) A cooperative research and development agreement as defined in 
15 U.S.C. 3710a; or
    (ii) An agreement that provides only:
    (A) Direct United States Government cash assistance to an 
individual;
    (B) A subsidy;
    (C) A loan;
    (D) A loan guarantee; or
    (E) Insurance.
    Department means the U.S. Department of Labor, including its 
agencies and organizational units.
    Employment and training activity means a workforce investment 
activity that is carried out for an adult or dislocated worker under 
part 678 of this chapter.
    Equal opportunity data or EO data means data on race and ethnicity, 
age, sex, and disability required by 29 CFR part 38 of the Department of 
Labor regulations implementing sec. 188 of WIOA, governing 
nondiscrimination.
    Employment and Training Administration or ETA means the Employment 
and Training Administration of the U.S. Department of Labor.
    Family means two or more persons related by blood, marriage, or 
decree of court, who are living in a single residence, and are included 
in one or more of the following categories:
    (1) A married couple and dependent children;
    (2) A parent or guardian and dependent children; or
    (3) A married couple.
    Federal award means:
    (1) The Federal financial assistance that a non-Federal entity 
receives directly from a Federal awarding agency or indirectly from a 
pass-through entity, as described in 2 CFR 200.101 (Applicability);
    (2) The cost-reimbursement contract under the Federal Acquisition 
Regulations that a non-Federal entity receives directly from a Federal 
awarding agency or indirectly from a pass-through entity, as described 
in 2 CFR 200.101 (Applicability); and
    (3) The instrument setting forth the terms and conditions. The 
instrument is the grant agreement, cooperative agreement, other 
agreement for assistance covered in paragraph (b) of 2 CFR 200.40 
(Federal financial assistance), or the cost-reimbursement contract 
awarded under the Federal Acquisition Regulations.
    (4) Federal award does not include other contracts that a Federal 
agency uses to buy goods or services from a contractor or a contract to 
operate Federal government owned, contractor operated facilities 
(GOCOs).
    Federal financial assistance means:
    (1) For grants and cooperative agreements, assistance in the form 
of:
    (i) Grants;
    (ii) Cooperative agreements;
    (iii) Non-cash contributions or donations of property (including 
donated surplus property);

[[Page 178]]

    (iv) Direct appropriations;
    (v) Food commodities; and
    (vi) Other financial assistance, except assistance listed in 
paragraph (2) of this definition.
    (2) For purposes of the audit requirements at 2 CFR part 200, 
subpart F, Federal financial assistance includes assistance that non-
Federal entities receive or administer in the form of:
    (i) Loans;
    (ii) Loan Guarantees;
    (iii) Interest subsidies; and
    (iv) Insurance.
    (3) Federal financial assistance does not include amounts received 
as reimbursement for services rendered to individuals as described in 2 
CFR 200.502, which outlines the basis for determining Federal awards 
expended.
    Grant or grant agreement means a legal instrument of financial 
assistance between a Federal awarding agency and a non-Federal entity 
that, consistent with 31 U.S.C. 6302, 6304:
    (1) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value from the Federal awarding agency 
to carry out a public purpose authorized by a law of the United States 
(see 31 U.S.C. 6101(3)); and not to acquire property or services for the 
Federal awarding agency's direct benefit or use;
    (2) Is distinguished from a cooperative agreement in that it does 
not provide for substantial involvement between the Federal awarding 
agency or pass-through entity and the non-Federal entity in carrying out 
the activity contemplated by the Federal award.
    (3) Grant agreement does not include an agreement that provides 
only:
    (i) Direct United States Government cash assistance to an 
individual;
    (ii) A subsidy;
    (iii) A loan;
    (iv) A loan guarantee; or
    (v) Insurance.
    Grantee means the direct recipient of grant funds from the 
Department of Labor under a grant or grant agreement. A grantee also may 
be referred to as a recipient.
    Individual with a disability means an individual with any disability 
as defined in sec. 3 of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12102). For purposes of WIOA sec. 188, this term is defined at 29 
CFR 38.4.
    Labor Federation means an alliance of two or more organized labor 
unions for the purpose of mutual support and action.
    Literacy means an individual's ability to read, write, and speak in 
English, and to compute, and solve problems, at levels of proficiency 
necessary to function on the job, in the family of the individual, and 
in society.
    Local WDB means a Local Workforce Development Board (WDB) 
established under WIOA sec. 107, to set policy for the local workforce 
development system.
    Non-Federal entity, as defined in 2 CFR 2900.2, means a State, local 
government, Indian tribe, institution of higher education (IHE), for-
profit entity, foreign public entity, foreign organization or nonprofit 
organization that carries out a Federal award as a recipient or 
subrecipient.
    Obligations when used in connection with a non-Federal entity's 
utilization of funds under a Federal award, means orders placed for 
property and services, contracts and subawards made, and similar 
transactions during a given period that require payment by the non- 
Federal entity during the same or a future period.
    Outlying area means:
    (1) The United States Virgin Islands, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands; and
    (2) The Republic of Palau, except during a period that the 
Secretaries determine both that a Compact of Free Association is in 
effect and that the Compact contains provisions for training and 
education assistance prohibiting the assistance provided under WIOA.
    Pass-through entity means a non-Federal entity that provides a 
subaward to a subrecipient to carry out part of a Federal program.
    Recipient means a non-Federal entity that receives a Federal award 
directly from a Federal awarding agency to carry out an activity under a 
Federal program. The term recipient does not include subrecipients.

[[Page 179]]

    Register means the process for collecting information, including 
identifying information, to determine an individual's eligibility for 
services under WIOA title I. Individuals may be registered in a variety 
ways, as described in Sec.  680.110 of this chapter.
    Secretary means the Secretary of the U.S. Department of Labor, or 
their designee.
    Secretaries means the Secretaries of the U.S. Department Labor and 
the U.S. Department of Education, or their designees.
    Self-certification means an individual's signed attestation that the 
information they submit to demonstrate eligibility for a program under 
title I of WIOA is true and accurate.
    State means each of the several States of the United States, the 
District of Columbia, and the Commonwealth of Puerto Rico. The term 
``State'' does not include outlying areas.
    State WDB means a State Workforce Development Board (WDB) 
established under WIOA sec. 101.
    Subgrant or subaward means an award provided by a pass-through 
entity to a subrecipient for the subrecipient to carry out part of a 
Federal award received by the pass-through entity. It does not include 
payments to a contractor or payments to an individual that is a 
beneficiary of a Federal program. A subaward may be provided through any 
form of legal agreement, including an agreement that the pass-through 
entity considers a contract.
    Subrecipient means a non-Federal entity that receives a subaward 
from a pass-through entity to carry out part of a Federal program, but 
does not include an individual that is a beneficiary of such program. A 
subrecipient also may be a recipient of other Federal awards directly 
from a Federal awarding agency.
    Unliquidated obligations means, for financial reports prepared on a 
cash basis, obligations incurred by the non-Federal entity that have not 
been paid (liquidated). For reports prepared on an accrual expenditure 
basis, these are obligations incurred by the non-Federal entity for 
which an expenditure has not been recorded.
    Unobligated balance means the amount of funds under a Federal award 
that the non-Federal entity has not obligated. The amount is computed by 
subtracting the cumulative amount of the non-Federal entity's 
unliquidated obligations and expenditures of funds under the Federal 
award from the cumulative amount of the funds that the Federal awarding 
agency or pass- through entity authorized the non- Federal entity to 
obligate.
    Wagner-Peyser Act means the Act of June 6, 1933, as amended, 
codified at 29 U.S.C. 49 et seq.
    WIA regulations mean the regulations in parts 660 through 672 of 
this chapter, the Wagner-Peyser Act regulations in part 652, subpart C, 
of this chapter, and the regulations implementing WIA sec. 188 in 29 CFR 
part 37.
    WIOA regulations mean the regulations in parts 675 through 687 of 
this chapter, the Wagner-Peyser Act regulations in part 652, subpart C, 
of this chapter, and the regulations implementing WIA sec. 188 in 29 CFR 
part 38.
    Workforce investment activities mean the array of activities 
permitted under title I of WIOA, which include employment and training 
activities for adults and dislocated workers, as described in WIOA sec. 
134, and youth activities, as described in WIOA sec. 129.
    Youth workforce investment activity means a workforce investment 
activity that is carried out for eligible youth under part 679 of this 
chapter.



PART 676_UNIFIED AND COMBINED STATE PLANS UNDER TITLE I OF
THE WORKFORCE INNOVATION AND OPPORTUNITY ACT--Table of Contents



Sec.
676.100 What are the purposes of the Unified and Combined State Plans?
676.105 What are the general requirements for the Unified State Plan?
676.110 What are the program-specific requirements in the Unified State 
          Plan for the adult, dislocated worker, and youth programs 
          authorized under Workforce Innovation and Opportunity Act 
          title I?
676.115 What are the program-specific requirements in the Unified State 
          Plan for the Adult Education and Family Literacy Act program 
          authorized under Workforce Innovation and Opportunity Act 
          title II?

[[Page 180]]

676.120 What are the program-specific requirements in the Unified State 
          Plan for the Employment Service program authorized under the 
          Wagner-Peyser Act, as amended by Workforce Innovation and 
          Opportunity Act title III?
676.125 What are the program-specific requirements in the Unified State 
          Plan for the State Vocational Rehabilitation program 
          authorized under title I of the Rehabilitation Act of 1973, as 
          amended by Workforce Innovation and Opportunity Act title IV?
676.130 What is the development, submission, and approval process of the 
          Unified State Plan?
676.135 What are the requirements for modification of the Unified State 
          Plan?
676.140 What are the general requirements for submitting a Combined 
          State Plan?
676.143 What is the development, submission, and approval process of the 
          Combined State Plan?
676.145 What are the requirements for modifications of the Combined 
          State Plan?

    Authority: Secs. 102, 103, and 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).

    Source: 81 FR 55597, Aug. 19, 2016, unless otherwise noted.



Sec.  676.100  What are the purposes of the Unified and 
Combined State Plans?

    (a) The Unified and Combined State Plans provide the framework for 
States to outline a strategic vision of, and goals for, how their 
workforce development systems will achieve the purposes of the Workforce 
Innovation and Opportunity Act (WIOA).
    (b) The Unified and Combined State Plans serve as 4-year action 
plans to develop, align, and integrate the State's systems and provide a 
platform to achieve the State's vision and strategic and operational 
goals. A Unified or Combined State Plan is intended to:
    (1) Align, in strategic coordination, the six core programs required 
in the Unified State Plan pursuant to Sec.  676.105(b), and additional 
Combined State Plan partner programs that may be part of the Combined 
State Plan pursuant to Sec.  676.140;
    (2) Direct investments in economic, education, and workforce 
training programs to focus on providing relevant education and training 
to ensure that individuals, including youth and individuals with 
barriers to employment, have the skills to compete in the job market and 
that employers have a ready supply of skilled workers;
    (3) Apply strategies for job-driven training consistently across 
Federal programs; and
    (4) Enable economic, education, and workforce partners to build a 
skilled workforce through innovation in, and alignment of, employment, 
training, and education programs.



Sec.  676.105  What are the general requirements for the 
Unified State Plan?

    (a) The Unified State Plan must be submitted in accordance with 
Sec.  676.130 and WIOA sec. 102(c), as explained in joint planning 
guidelines issued by the Secretaries of Labor and Education.
    (b) The Governor of each State must submit, at a minimum, in 
accordance with Sec.  676.130, a Unified State Plan to the Secretary of 
Labor to be eligible to receive funding for the workforce development 
system's six core programs:
    (1) The adult, dislocated worker, and youth programs authorized 
under subtitle B of title I of WIOA and administered by the U.S. 
Department of Labor (DOL);
    (2) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA and administered by the U.S. 
Department of Education (ED);
    (3) The Employment Service program authorized under the Wagner-
Peyser Act of 1933, as amended by WIOA title III and administered by 
DOL; and
    (4) The Vocational Rehabilitation program authorized under title I 
of the Rehabilitation Act of 1973, as amended by title IV of WIOA and 
administered by ED.
    (c) The Unified State Plan must outline the State's 4-year strategy 
for the core programs described in paragraph (b) of this section and 
meet the requirements of sec. 102(b) of WIOA, as explained in the joint 
planning guidelines issued by the Secretaries of Labor and Education.
    (d) The Unified State Plan must include strategic and operational 
planning elements to facilitate the development of an aligned, 
coordinated, and comprehensive workforce development system. The Unified 
State Plan must include:
    (1) Strategic planning elements that describe the State's strategic 
vision and goals for preparing an educated

[[Page 181]]

and skilled workforce under sec. 102(b)(1) of WIOA. The strategic 
planning elements must be informed by and include an analysis of the 
State's economic conditions and employer and workforce needs, including 
education and skill needs.
    (2) Strategies for aligning the core programs and Combined State 
Plan partner programs as described in Sec.  676.140(d), as well as other 
resources available to the State, to achieve the strategic vision and 
goals in accordance with sec. 102(b)(1)(E) of WIOA.
    (3) Operational planning elements in accordance with sec. 102(b)(2) 
of WIOA that support the strategies for aligning the core programs and 
other resources available to the State to achieve the State's vision and 
goals and a description of how the State Workforce Development Board 
(WDB) will implement its functions, in accordance with sec. 101(d) of 
WIOA. Operational planning elements must include:
    (i) A description of how the State strategy will be implemented by 
each core program's lead State agency;
    (ii) State operating systems, including data systems, and policies 
that will support the implementation of the State's strategy identified 
in paragraph (d)(1) of this section;
    (iii) Program-specific requirements for the core programs required 
by WIOA sec. 102(b)(2)(D);
    (iv) Assurances required by sec. 102(b)(2)(E) of WIOA, including an 
assurance that the lead State agencies responsible for the 
administration of the core programs reviewed and commented on the 
appropriate operational planning of the Unified State Plan and approved 
the elements as serving the needs of the population served by such 
programs, and other assurances deemed necessary by the Secretaries of 
Labor and Education under sec. 102(b)(2)(E)(x) of WIOA;
    (v) A description of joint planning and coordination across core 
programs, required one-stop partner programs, and other programs and 
activities in the Unified State Plan; and
    (vi) Any additional operational planning requirements imposed by the 
Secretary of Labor or the Secretary of Education under sec. 
102(b)(2)(C)(viii) of WIOA.
    (e) All of the requirements in this part that apply to States also 
apply to outlying areas.



Sec.  676.110  What are the program-specific requirements in the
Unified State Plan for the adult, dislocated worker, and youth
programs authorized under Workforce Innovation and Opportunity Act 
title I?

    The program-specific requirements for the adult, dislocated worker, 
and youth programs that must be included in the Unified State Plan are 
described in sec. 102(b)(2)(D) of WIOA. Additional planning requirements 
may be explained in joint planning guidelines issued by the Secretaries 
of Labor and Education.



Sec.  676.115  What are the program-specific requirements in the
Unified State Plan for the Adult Education and Family Literacy Act
program authorized under Workforce Innovation and Opportunity Act
title II?

    The program-specific requirements for the AEFLA program in title II 
that must be included in the Unified State Plan are described in secs. 
102(b)(2)(C) and 102(b)(2)(D)(ii) of WIOA.
    (a) With regard to the description required in sec. 
102(b)(2)(D)(ii)(I) of WIOA pertaining to content standards, the Unified 
State Plan must describe how the eligible agency will, by July 1, 2016, 
align its content standards for adult education with State-adopted 
challenging academic content standards under the Elementary and 
Secondary Education Act of 1965, as amended.
    (b) With regard to the description required in sec. 102(b)(2)(C)(iv) 
of WIOA pertaining to the methods and factors the State will use to 
distribute funds under the core programs, for title II of WIOA, the 
Unified State Plan must include--
    (1) How the eligible agency will award multi-year grants on a 
competitive basis to eligible providers in the State; and
    (2) How the eligible agency will provide direct and equitable access 
to funds using the same grant or contract announcement and application 
procedure.

[[Page 182]]



Sec.  676.120  What are the program-specific requirements in the
Unified State Plan for the Employment Service program authorized 
under the Wagner-Peyser Act,as amended by Workforce Innovation and
Opportunity Act title III?

    The Employment Service program authorized under the Wagner-Peyser 
Act of 1933, as amended by WIOA title III, is subject to requirements in 
sec. 102(b) of WIOA, including any additional requirements imposed by 
the Secretary of Labor under secs. 102(b)(2)(C)(viii) and 
102(b)(2)(D)(iv) of WIOA, as explained in joint planning guidelines 
issued by the Secretaries of Labor and Education.



Sec.  676.125  What are the program-specific requirements in the
Unified State Plan for the State Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended
by Workforce Innovation and Opportunity Act title IV?

    The program specific-requirements for the vocational rehabilitation 
services portion of the Unified or Combined State Plan are set forth in 
sec. 101(a) of the Rehabilitation Act of 1973, as amended. All 
submission requirements for the vocational rehabilitation services 
portion of the Unified or Combined State Plan are in addition to the 
jointly developed strategic and operational content requirements 
prescribed by sec. 102(b) of WIOA.



Sec.  676.130  What is the development, submission, and approval
process of the Unified State Plan?

    (a) The Unified State Plan described in Sec.  676.105 must be 
submitted in accordance with WIOA sec. 102(c), as explained in joint 
planning guidelines issued jointly by the Secretaries of Labor and 
Education.
    (b) A State must submit its Unified State Plan to the Secretary of 
Labor pursuant to a process identified by the Secretary.
    (1) The initial Unified State Plan must be submitted no later than 
120 days prior to the commencement of the second full program year of 
WIOA.
    (2) Subsequent Unified State Plans must be submitted no later than 
120 days prior to the end of the 4-year period covered by a preceding 
Unified State Plan.
    (3) For purposes of paragraph (b) of this section, ``program year'' 
means July 1 through June 30 of any year.
    (c) The Unified State Plan must be developed with the assistance of 
the State WDB, as required by Sec.  679.130(a) of this chapter and WIOA 
sec. 101(d), and must be developed in coordination with administrators 
with optimum policy-making authority for the core programs and required 
one-stop partners.
    (d) The State must provide an opportunity for public comment on and 
input into the development of the Unified State Plan prior to its 
submission.
    (1) The opportunity for public comment must include an opportunity 
for comment by representatives of Local WDBs and chief elected 
officials, businesses, representatives of labor organizations, 
community-based organizations, adult education providers, institutions 
of higher education, other stakeholders with an interest in the services 
provided by the six core programs, and the general public, including 
individuals with disabilities.
    (2) Consistent with the ``Sunshine Provision'' of WIOA in sec. 
101(g), the State WDB must make information regarding the Unified State 
Plan available to the public through electronic means and regularly 
occurring open meetings in accordance with State law. The Unified State 
Plan must describe the State's process and timeline for ensuring a 
meaningful opportunity for public comment.
    (e) Upon receipt of the Unified State Plan from the State, the 
Secretary of Labor will ensure that the entire Unified State Plan is 
submitted to the Secretary of Education pursuant to a process developed 
by the Secretaries.
    (f) The Unified State Plan is subject to the approval of both the 
Secretary of Labor and the Secretary of Education.
    (g) Before the Secretaries of Labor and Education approve the 
Unified State Plan, the vocational rehabilitation services portion of 
the Unified State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be 
approved by the Commissioner of the Rehabilitation Services 
Administration.

[[Page 183]]

    (h) The Secretaries of Labor and Education will review and approve 
the Unified State Plan within 90 days of receipt by the Secretary of 
Labor, unless the Secretary of Labor or the Secretary of Education 
determines in writing within that period that:
    (1) The plan is inconsistent with a core program's requirements;
    (2) The Unified State Plan is inconsistent with any requirement of 
sec. 102 of WIOA; or
    (3) The plan is incomplete or otherwise insufficient to determine 
whether it is consistent with a core program's requirements or other 
requirements of WIOA.
    (i) If neither the Secretary of Labor nor the Secretary of Education 
makes the written determination described in paragraph (h) of this 
section within 90 days of the receipt by the Secretaries, the Unified 
State Plan will be considered approved.



Sec.  676.135  What are the requirements for modification of the
Unified State Plan?

    (a) In addition to the required modification review set forth in 
paragraph (b) of this section, a Governor may submit a modification of 
its Unified State Plan at any time during the 4-year period of the plan.
    (b) Modifications are required, at a minimum:
    (1) At the end of the first 2-year period of any 4-year State Plan, 
wherein the State WDB must review the Unified State Plan, and the 
Governor must submit modifications to the plan to reflect changes in 
labor market and economic conditions or other factors affecting the 
implementation of the Unified State Plan;
    (2) When changes in Federal or State law or policy substantially 
affect the strategies, goals, and priorities upon which the Unified 
State Plan is based;
    (3) When there are changes in the statewide vision, strategies, 
policies, State negotiated levels of performance as described in Sec.  
677.170(b) of this chapter, the methodology used to determine local 
allocation of funds, reorganizations that change the working 
relationship with system employees, changes in organizational 
responsibilities, changes to the membership structure of the State WDB 
or alternative entity, and similar substantial changes to the State's 
workforce development system.
    (c) Modifications to the Unified State Plan are subject to the same 
public review and comment requirements in Sec.  676.130(d) that apply to 
the development of the original Unified State Plan.
    (d) Unified State Plan modifications must be approved by the 
Secretaries of Labor and Education, based on the approval standards 
applicable to the original Unified State Plan under Sec.  676.130. This 
approval must come after the approval of the Commissioner of the 
Rehabilitation Services Administration for modification of any portion 
of the plan described in sec. 102(b)(2)(D)(iii) of WIOA.



Sec.  676.140  What are the general requirements for submitting
a Combined State Plan?

    (a) A State may choose to develop and submit a 4-year Combined State 
Plan in lieu of the Unified State Plan described in Sec. Sec.  676.105 
through 676.125.
    (b) A State that submits a Combined State Plan covering an activity 
or program described in paragraph (d) of this section that is, in 
accordance with WIOA sec. 103(c), approved or deemed complete under the 
law relating to the program will not be required to submit any other 
plan or application in order to receive Federal funds to carry out the 
core programs or the program or activities described under paragraph (d) 
of this section that are covered by the Combined State Plan.
    (c) If a State develops a Combined State Plan, it must be submitted 
in accordance with the process described in Sec.  676.143.
    (d) If a State chooses to submit a Combined State Plan, the plan 
must include the six core programs and one or more of the Combined State 
Plan partner programs and activities described in sec. 103(a)(2) of 
WIOA. The Combined State Plan partner programs and activities that may 
be included in the Combined State Plan are:
    (1) Career and technical education programs authorized under the 
Carl D.

[[Page 184]]

Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et 
seq.);
    (2) Temporary Assistance for Needy Families or TANF, authorized 
under part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.);
    (3) Employment and training programs authorized under sec. 6(d)(4) 
of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
    (4) Work programs authorized under sec. 6(o) of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2015(o));
    (5) Trade adjustment assistance activities under chapter 2 of title 
II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
    (6) Services for veterans authorized under chapter 41 of title 38 
United States Code;
    (7) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law);
    (8) Senior Community Service Employment Programs under title V of 
the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
    (9) Employment and training activities carried out by the Department 
of Housing and Urban Development (HUD);
    (10) Employment and training activities carried out under the 
Community Services Block Grant Act (42 U.S.C. 9901 et seq.); and
    (11) Reintegration of offenders programs authorized under sec. 212 
of the Second Chance Act of 2007 (42 U.S.C. 17532).
    (e) A Combined State Plan must contain:
    (1) For the core programs, the information required by sec. 102(b) 
of WIOA and Sec. Sec.  676.105 through 676.125, as explained in the 
joint planning guidelines issued by the Secretaries;
    (2) For the Combined State Plan partner programs and activities, 
except as described in paragraph (h) of this section, the information 
required by the law authorizing and governing that program to be 
submitted to the appropriate Secretary, any other applicable legal 
requirements, and any common planning requirements described in sec. 
102(b) of WIOA, as explained in the joint planning guidelines issued by 
the Secretaries;
    (3) A description of the methods used for joint planning and 
coordination among the core programs, and with the required one-stop 
partner programs and other programs and activities included in the State 
Plan; and
    (4) An assurance that all of the entities responsible for planning 
or administering the programs described in the Combined State Plan have 
had a meaningful opportunity to review and comment on all portions of 
the plan.
    (f) Each Combined State Plan partner program included in the 
Combined State Plan remains subject to the applicable program-specific 
requirements of the Federal law and regulations, and any other 
applicable legal or program requirements, governing the implementation 
and operation of that program.
    (g) For purposes of Sec. Sec.  676.140 through 676.145 the term 
``appropriate Secretary'' means the head of the Federal agency who 
exercises either plan or application approval authority for the program 
or activity under the Federal law authorizing the program or activity 
or, if there are no planning or application requirements, who exercises 
administrative authority over the program or activity under that Federal 
law.
    (h) States that include employment and training activities carried 
out under the Community Services Block Grant (CSBG) Act (42 U.S.C. 9901 
et seq.) under a Combined State Plan would submit all other required 
elements of a complete CSBG State Plan directly to the Federal agency 
that administers the program, according to the requirements of Federal 
law and regulations.
    (i) States that submit employment and training activities carried 
out by HUD under a Combined State Plan would submit any other required 
planning documents for HUD programs directly to HUD, according to the 
requirements of Federal law and regulations.



Sec.  676.143  What is the development, submission, and approval
process of the Combined State Plan?

    (a) For purposes of Sec.  676.140(a), if a State chooses to develop 
a Combined

[[Page 185]]

State Plan it must submit the Combined State Plan in accordance with the 
requirements described below and sec. 103 of WIOA, as explained in the 
joint planning guidelines issued by the Secretaries of Labor and 
Education.
    (b) The Combined State Plan must be developed with the assistance of 
the State WDB, as required by Sec.  679.130(a) of this chapter and WIOA 
sec. 101(d), and must be developed in coordination with administrators 
with optimum policy-making authority for the core programs and required 
one-stop partners.
    (c) The State must provide an opportunity for public comment on and 
input into the development of the Combined State Plan prior to its 
submission.
    (1) The opportunity for public comment for the portions of the 
Combined State Plan that cover the core programs must include an 
opportunity for comment by representatives of Local WDBs and chief 
elected officials, businesses, representatives of labor organizations, 
community-based organizations, adult education providers, institutions 
of higher education, other stakeholders with an interest in the services 
provided by the six core programs, and the general public, including 
individuals with disabilities.
    (2) Consistent with the ``Sunshine Provision'' of WIOA in sec. 
101(g), the State WDB must make information regarding the Combined State 
Plan available to the public through electronic means and regularly 
occurring open meetings in accordance with State law. The Combined State 
Plan must describe the State's process and timeline for ensuring a 
meaningful opportunity for public comment on the portions of the plan 
covering core programs.
    (3) The portions of the plan that cover the Combined State Plan 
partner programs are subject to any public comment requirements 
applicable to those programs.
    (d) The State must submit to the Secretaries of Labor and Education 
and to the Secretary of the agency with responsibility for approving the 
program's plan or deeming it complete under the law governing the 
program, as part of its Combined State Plan, any plan, application, 
form, or any other similar document that is required as a condition for 
the approval of Federal funding under the applicable program or 
activity. Such submission must occur in accordance with a process 
identified by the relevant Secretaries in paragraph (a) of this section.
    (e) The Combined State Plan will be approved or disapproved in 
accordance with the requirements of sec. 103(c) of WIOA.
    (1) The portion of the Combined State Plan covering programs 
administered by the Departments of Labor and Education must be reviewed, 
and approved or disapproved, by the appropriate Secretary within 90 days 
beginning on the day the Combined State Plan is received by the 
appropriate Secretary from the State, consistent with paragraph (f) of 
this section. Before the Secretaries of Labor and Education approve the 
Combined State Plan, the vocational rehabilitation services portion of 
the Combined State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be 
approved by the Commissioner of the Rehabilitation Services 
Administration.
    (2) If an appropriate Secretary other than the Secretary of Labor or 
the Secretary of Education has authority to approve or deem complete a 
portion of the Combined State Plan for a program or activity described 
in Sec.  676.140(d), that portion of the Combined State Plan must be 
reviewed, and approved, disapproved, or deemed complete, by the 
appropriate Secretary within 120 days beginning on the day the Combined 
State Plan is received by the appropriate Secretary from the State 
consistent with paragraph (f) of this section.
    (f) The appropriate Secretaries will review and approve or deem 
complete the Combined State Plan within 90 or 120 days, as appropriate, 
as described in paragraph (e) of this section, unless the Secretaries of 
Labor and Education or appropriate Secretary have determined in writing 
within that period that:
    (1) The Combined State Plan is inconsistent with the requirements of 
the six core programs or the Federal laws authorizing or applicable to 
the program or activity involved, including the criteria for approval of 
a plan or

[[Page 186]]

application, or deeming the plan complete, if any, under such law;
    (2) The portion of the Combined State Plan describing the six core 
programs or the program or activity described in paragraph (a) of this 
section involved does not satisfy the criteria as provided in sec. 102 
or 103 of WIOA, as applicable; or
    (3) The Combined State Plan is incomplete, or otherwise insufficient 
to determine whether it is consistent with a core program's 
requirements, other requirements of WIOA, or the Federal laws 
authorizing, or applicable to, the program or activity described in 
Sec.  676.140(d), including the criteria for approval of a plan or 
application, if any, under such law.
    (g) If the Secretary of Labor, the Secretary of Education, or the 
appropriate Secretary does not make the written determination described 
in paragraph (f) of this section within the relevant period of time 
after submission of the Combined State Plan, that portion of the 
Combined State Plan over which the Secretary has jurisdiction will be 
considered approved.
    (h) The Secretaries of Labor and Education's written determination 
of approval or disapproval regarding the portion of the plan for the six 
core programs may be separate from the written determination of 
approval, disapproval, or completeness of the program-specific 
requirements of Combined State Plan partner programs and activities 
described in Sec.  676.140(d) and included in the Combined State Plan.
    (i) Special rule. In paragraphs (f)(1) and (3) of this section, the 
term ``criteria for approval of a plan or application,'' with respect to 
a State or a core program or a program under the Carl D. Perkins Career 
and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), includes a 
requirement for agreement between the State and the appropriate 
Secretaries regarding State performance measures or State performance 
accountability measures, as the case may be, including levels of 
performance.



Sec.  676.145  What are the requirements for modifications of 
the Combined State Plan?

    (a) For the core program portions of the Combined State Plan, 
modifications are required, at a minimum:
    (1) By the end of the first 2-year period of any 4-year State Plan. 
The State WDB must review the Combined State Plan, and the Governor must 
submit modifications to the Combined State Plan to reflect changes in 
labor market and economic conditions or other factors affecting the 
implementation of the Combined State Plan;
    (2) When changes in Federal or State law or policy substantially 
affect the strategies, goals, and priorities upon which the Combined 
State Plan is based;
    (3) When there are changes in the statewide vision, strategies, 
policies, State negotiated levels of performance as described in Sec.  
677.170(b) of this chapter, the methodology used to determine local 
allocation of funds, reorganizations that change the working 
relationship with system employees, changes in organizational 
responsibilities, changes to the membership structure of the State WDB 
or alternative entity, and similar substantial changes to the State's 
workforce development system.
    (b) In addition to the required modification review described in 
paragraph (a)(1) of this section, a State may submit a modification of 
its Combined State Plan at any time during the 4-year period of the 
plan.
    (c) For any Combined State Plan partner programs and activities 
described in Sec.  676.140(d) that are included in a State's Combined 
State Plan, the State--
    (1) May decide if the modification requirements under WIOA sec. 
102(c)(3) that apply to the core programs will apply to the Combined 
State Plan partner programs, as long as consistent with any other 
modification requirements for the programs, or may comply with the 
requirements applicable to only the particular program or activity; and
    (2) Must submit, in accordance with the procedure described in Sec.  
676.143, any modification, amendment, or revision

[[Page 187]]

required by the Federal law authorizing, or applicable to, the Combined 
State Plan partner program or activity.
    (i) If the underlying programmatic requirements change (e.g., the 
authorizing statute is reauthorized) for Federal laws authorizing such 
programs, a State must either modify its Combined State Plan or submit a 
separate plan to the appropriate Federal agency in accordance with the 
new Federal law authorizing the Combined State Plan partner program or 
activity and other legal requirements applicable to such program or 
activity.
    (ii) If the modification, amendment, or revision affects the 
administration of only that particular Combined State Plan partner 
program and has no impact on the Combined State Plan as a whole or the 
integration and administration of the core and other Combined State Plan 
partner programs at the State level, modifications must be submitted for 
approval to only the appropriate Secretary, based on the approval 
standards applicable to the original Combined State Plan under Sec.  
676.143, if the State elects, or in accordance with the procedures and 
requirements applicable to the particular Combined State Plan partner 
program.
    (3) A State also may amend its Combined State Plan to add a Combined 
State Plan partner program or activity described in Sec.  676.140(d).
    (d) Modifications of the Combined State Plan are subject to the same 
public review and comment requirements that apply to the development of 
the original Combined State Plan as described in Sec.  676.143(c) except 
that, if the modification, amendment, or revision affects the 
administration of a particular Combined State Plan partner program and 
has no impact on the Combined State Plan as a whole or the integration 
and administration of the core and other Combined State Plan partner 
programs at the State level, a State may comply instead with the 
procedures and requirements applicable to the particular Combined State 
Plan partner program.
    (e) Modifications for the core program portions of the Combined 
State Plan must be approved by the Secretaries of Labor and Education, 
based on the approval standards applicable to the original Combined 
State Plan under Sec.  676.143. This approval must come after the 
approval of the Commissioner of the Rehabilitation Services 
Administration for modification of any portion of the Combined State 
Plan described in sec. 102(b)(2)(D)(iii) of WIOA.



PART 677_PERFORMANCE ACCOUNTABILITY UNDER TITLE I OF THE 
WORKFORCE INNOVATION AND OPPORTUNITY ACT--Table of Contents



Sec.
677.150 What definitions apply to Workforce Innovation and Opportunity 
          Act performance accountability provisions?

       Subpart A_State Indicators of Performance for Core Programs

677.155 What are the primary indicators of performance under the 
          Workforce Innovation and Opportunity Act?
677.160 What information is required for State performance reports?
677.165 May a State establish additional indicators of performance?
677.170 How are State levels of performance for primary indicators 
          established?
677.175 What responsibility do States have to use quarterly wage record 
          information for performance accountability?

Subpart B_Sanctions for State Performance and the Provision of Technical 
                               Assistance

677.180 When is a State subject to a financial sanction under the 
          Workforce Innovation and Opportunity Act?
677.185 When are sanctions applied for a State's failure to submit an 
          annual performance report?
677.190 When are sanctions applied for failure to achieve adjusted 
          levels of performance?
677.195 What should States expect when a sanction is applied to the 
          Governor's Reserve Allotment?
677.200 What other administrative actions will be applied to States' 
          performance requirements?

Subpart C_Local Performance Accountability for Workforce Innovation and 
                    Opportunity Act Title I Programs

677.205 What performance indicators apply to local areas and what 
          information must be included in local area performance 
          reports?

[[Page 188]]

677.210 How are local performance levels established?

 Subpart D_Incentives and Sanctions for Local Performance for Workforce 
             Innovation and Opportunity Act Title I Programs

677.215 Under what circumstances are local areas eligible for State 
          Incentive Grants?
677.220 Under what circumstances may a corrective action or sanction be 
          applied to local areas for poor performance?
677.225 Under what circumstances may local areas appeal a reorganization 
          plan?

     Subpart E_Eligible Training Provider Performance for Workforce 
             Innovation and Opportunity Act Title I Programs

677.230 What information is required for the eligible training provider 
          performance reports?

       Subpart F_Performance Reporting Administrative Requirements

677.235 What are the reporting requirements for individual records for 
          core Workforce Innovation and Opportunity Act (WIOA) title I 
          programs; the Wagner-Peyser Act Employment Service program, as 
          amended by WIOA title III; and the Vocational Rehabilitation 
          program authorized under title I of the Rehabilitation Act of 
          1973, as amended by WIOA title IV?
677.240 What are the requirements for data validation of State annual 
          performance reports?

    Authority: Secs. 116, 189, and 503 of Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

    Source: 81 FR 56002, Aug. 19, 2016, unless otherwise noted.



Sec.  677.150  What definitions apply to Workforce Innovation
and Opportunity Act performance accountability provisions?

    (a) Participant. A reportable individual who has received services 
other than the services described in paragraph (a)(3) of this section, 
after satisfying all applicable programmatic requirements for the 
provision of services, such as eligibility determination.
    (1) For the Vocational Rehabilitation (VR) program, a participant is 
a reportable individual who has an approved and signed Individualized 
Plan for Employment (IPE) and has begun to receive services.
    (2) For the Workforce Innovation and Opportunity Act (WIOA) title I 
youth program, a participant is a reportable individual who has 
satisfied all applicable program requirements for the provision of 
services, including eligibility determination, an objective assessment, 
and development of an individual service strategy, and received 1 of the 
14 WIOA youth program elements identified in sec. 129(c)(2) of WIOA.
    (3) The following individuals are not participants:
    (i) Individuals in an Adult Education and Family Literacy Act 
(AEFLA) program who have not completed at least 12 contact hours;
    (ii) Individuals who only use the self-service system.
    (A) Subject to paragraph (a)(3)(ii)(B) of this section, self-service 
occurs when individuals independently access any workforce development 
system program's information and activities in either a physical 
location, such as a one-stop center resource room or partner agency, or 
remotely via the use of electronic technologies.
    (B) Self-service does not uniformly apply to all virtually accessed 
services. For example, virtually accessed services that provide a level 
of support beyond independent job or information seeking on the part of 
an individual would not qualify as self-service.
    (iii) Individuals who receive information-only services or 
activities, which provide readily available information that does not 
require an assessment by a staff member of the individual's skills, 
education, or career objectives.
    (4) Programs must include participants in their performance 
calculations.
    (b) Reportable individual. An individual who has taken action that 
demonstrates an intent to use program services and who meets specific 
reporting criteria of the program, including:
    (1) Individuals who provide identifying information;
    (2) Individuals who only use the self-service system; or
    (3) Individuals who only receive information-only services or 
activities.
    (c) Exit. As defined for the purpose of performance calculations, 
exit is the point after which a participant who has received services 
through any program meets the following criteria:

[[Page 189]]

    (1) For the adult, dislocated worker, and youth programs authorized 
under WIOA title I, the AEFLA program authorized under WIOA title II, 
and the Employment Service program authorized under the Wagner-Peyser 
Act, as amended by WIOA title III, exit date is the last date of 
service.
    (i) The last day of service cannot be determined until at least 90 
days have elapsed since the participant last received services; services 
do not include self-service, information-only services or activities, or 
follow-up services. This also requires that there are no plans to 
provide the participant with future services.
    (ii) [Reserved].
    (2)(i) For the VR program authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV (VR program):
    (A) The participant's record of service is closed in accordance with 
34 CFR 361.56 because the participant has achieved an employment 
outcome; or
    (B) The participant's service record is closed because the 
individual has not achieved an employment outcome or the individual has 
been determined ineligible after receiving services in accordance with 
34 CFR 361.43.
    (ii) Notwithstanding any other provision of this section, a 
participant will not be considered as meeting the definition of exit 
from the VR program if the participant's service record is closed 
because the participant has achieved a supported employment outcome in 
an integrated setting but not in competitive integrated employment.
    (3)(i) A State may implement a common exit policy for all or some of 
the core programs in WIOA title I and the Employment Service program 
authorized under the Wagner-Peyser Act, as amended by WIOA title III, 
and any additional required partner program(s) listed in sec. 
121(b)(1)(B) of WIOA that is under the authority of the U.S. Department 
of Labor (DOL).
    (ii) If a State chooses to implement a common exit policy, the 
policy must require that a participant is exited only when all of the 
criteria in paragraph (c)(1) of this section are met for the WIOA title 
I core programs and the Employment Service program authorized under the 
Wagner-Peyser Act, as amended by WIOA title III, as well as any 
additional required partner programs listed in sec. 121(b)(1)(B) of WIOA 
under the authority of DOL to which the common exit policy applies in 
which the participant is enrolled.
    (d) State. For purposes of this part, other than in regard to 
sanctions or the statistical adjustment model, all references to 
``State'' include the outlying areas of American Samoa, Guam, 
Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, 
and, as applicable, the Republic of Palau.



       Subpart A_State Indicators of Performance for Core Programs



Sec.  677.155  What are the primary indicators of performance 
under the Workforce Innovation and Opportunity Act?

    (a) All States submitting either a Unified or Combined State Plan 
under Sec. Sec.  676.130 and 676.143 of this chapter, must propose 
expected levels of performance for each of the primary indicators of 
performance for the adult, dislocated worker, and youth programs 
authorized under WIOA title I; the AEFLA program authorized under WIOA 
title II; the Employment Service program authorized under the Wagner-
Peyser Act, as amended by WIOA title III; and the VR program authorized 
under title I of the Rehabilitation Act of 1973, as amended by WIOA 
title IV.
    (1) Primary indicators of performance. The six primary indicators of 
performance for the adult and dislocated worker programs, the AEFLA 
program, and the VR program are:
    (i) The percentage of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (ii) The percentage of participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (iii) Median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (iv)(A) The percentage of those participants enrolled in an 
education or training program (excluding those in

[[Page 190]]

on-the-job training [OJT] and customized training) who attained a 
recognized postsecondary credential or a secondary school diploma, or 
its recognized equivalent, during participation in or within 1 year 
after exit from the program.
    (B) A participant who has attained a secondary school diploma or its 
recognized equivalent is included in the percentage of participants who 
have attained a secondary school diploma or recognized equivalent only 
if the participant also is employed or is enrolled in an education or 
training program leading to a recognized postsecondary credential within 
1 year after exit from the program;
    (v) The percentage of participants who, during a program year, are 
in an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains, defined as documented academic, technical, occupational, or 
other forms of progress, towards such a credential or employment. 
Depending upon the type of education or training program, documented 
progress is defined as one of the following:
    (A) Documented achievement of at least one educational functioning 
level of a participant who is receiving instruction below the 
postsecondary education level;
    (B) Documented attainment of a secondary school diploma or its 
recognized equivalent;
    (C) Secondary or postsecondary transcript or report card for a 
sufficient number of credit hours that shows a participant is meeting 
the State unit's academic standards;
    (D) Satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training; or
    (E) Successful passage of an exam that is required for a particular 
occupation or progress in attaining technical or occupational skills as 
evidenced by trade-related benchmarks such as knowledge-based exams.
    (vi) Effectiveness in serving employers.
    (2) Participants. For purposes of the primary indicators of 
performance in paragraph (a)(1) of this section, ``participant'' will 
have the meaning given to it in Sec.  677.150(a), except that--
    (i) For purposes of determining program performance levels under 
indicators set forth in paragraphs (a)(1)(i) through (iv) and (vi) of 
this section, a ``participant'' does not include a participant who 
received services under sec. 225 of WIOA and exits such program while 
still in a correctional institution as defined in sec. 225(e)(1) of 
WIOA; and
    (ii) The Secretaries of Labor and Education may, as needed and 
consistent with the Paperwork Reduction Act (PRA), make further 
determinations as to the participants to be included in calculating 
program performance levels for purposes of any of the performance 
indicators set forth in paragraph (a)(1) of this section.
    (b) The primary indicators in paragraphs (a)(1)(i) through (iii) and 
(vi) of this section apply to the Employment Service program authorized 
under the Wagner-Peyser Act, as amended by WIOA title III.
    (c) For the youth program authorized under WIOA title I, the primary 
indicators are:
    (1) Percentage of participants who are in education or training 
activities, or in unsubsidized employment, during the second quarter 
after exit from the program;
    (2) Percentage of participants in education or training activities, 
or in unsubsidized employment, during the fourth quarter after exit from 
the program;
    (3) Median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (4) The percentage of those participants enrolled in an education or 
training program (excluding those in OJT and customized training) who 
obtained a recognized postsecondary credential or a secondary school 
diploma, or its recognized equivalent, during participation in or within 
1 year after exit from the program, except that a participant who has 
attained a secondary school diploma or its recognized equivalent is 
included as having attained a

[[Page 191]]

secondary school diploma or recognized equivalent only if the 
participant is also employed or is enrolled in an education or training 
program leading to a recognized postsecondary credential within 1 year 
from program exit;
    (5) The percentage of participants who during a program year, are in 
an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains, defined as documented academic, technical, occupational or 
other forms of progress towards such a credential or employment. 
Depending upon the type of education or training program, documented 
progress is defined as one of the following:
    (i) Documented achievement of at least one educational functioning 
level of a participant who is receiving instruction below the 
postsecondary education level;
    (ii) Documented attainment of a secondary school diploma or its 
recognized equivalent;
    (iii) Secondary or postsecondary transcript or report card for a 
sufficient number of credit hours that shows a participant is achieving 
the State unit's academic standards;
    (iv) Satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training; or
    (v) Successful passage of an exam that is required for a particular 
occupation or progress in attaining technical or occupational skills as 
evidenced by trade-related benchmarks such as knowledge-based exams.
    (6) Effectiveness in serving employers.



Sec.  677.160  What information is required for State 
performance reports?

    (a) The State performance report required by sec. 116(d)(2) of WIOA 
must be submitted annually using a template the Departments of Labor and 
Education will disseminate, and must provide, at a minimum, information 
on the actual performance levels achieved consistent with Sec.  677.175 
with respect to:
    (1) The total number of participants served, and the total number of 
participants who exited each of the core programs identified in sec. 
116(b)(3)(A)(ii) of WIOA, including disaggregated counts of those who 
participated in and exited a core program, by:
    (i) Individuals with barriers to employment as defined in WIOA sec. 
3(24); and
    (ii) Co-enrollment in any of the programs in WIOA sec. 
116(b)(3)(A)(ii).
    (2) Information on the performance levels achieved for the primary 
indicators of performance for all of the core programs identified in 
Sec.  677.155 including disaggregated levels for:
    (i) Individuals with barriers to employment as defined in WIOA sec. 
3(24);
    (ii) Age;
    (iii) Sex; and
    (iv) Race and ethnicity.
    (3) The total number of participants who received career services 
and the total number of participants who exited from career services for 
the most recent program year and the 3 preceding program years, and the 
total number of participants who received training services and the 
total number of participants who exited from training services for the 
most recent program year and the 3 preceding program years, as 
applicable to the program;
    (4) Information on the performance levels achieved for the primary 
indicators of performance consistent with Sec.  677.155 for career 
services and training services for the most recent program year and the 
3 preceding program years, as applicable to the program;
    (5) The percentage of participants in a program who attained 
unsubsidized employment related to the training received (often referred 
to as training-related employment) through WIOA title I, subtitle B 
programs;
    (6) The amount of funds spent on career services and the amount of 
funds spent on training services for the most recent program year and 
the 3 preceding program years, as applicable to the program;
    (7) The average cost per participant for those participants who 
received career services and training services, respectively, during the 
most recent program year and the 3 preceding program years, as 
applicable to the program;

[[Page 192]]

    (8) The percentage of a State's annual allotment under WIOA sec. 
132(b) that the State spent on administrative costs; and
    (9) Information that facilitates comparisons of programs with 
programs in other States.
    (10) For WIOA title I programs, a State performance narrative, 
which, for States in which a local area is implementing a pay-for-
performance contracting strategy, at a minimum provides:
    (i) A description of pay-for-performance contract strategies being 
used for programs;
    (ii) The performance of service providers entering into contracts 
for such strategies, measured against the levels of performance 
specified in the contracts for such strategies; and
    (iii) An evaluation of the design of the programs and performance 
strategies and, when available, the satisfaction of employers and 
participants who received services under such strategies.
    (b) The disaggregation of data for the State performance report must 
be done in compliance with WIOA sec. 116(d)(6)(C).
    (c) The State performance reports must include a mechanism of 
electronic access to the State's local area and eligible training 
provider (ETP) performance reports.
    (d) States must comply with these requirements from sec. 116 of WIOA 
as explained in joint guidance issued by the Departments of Labor and 
Education, which may include information on reportable individuals as 
determined by the Secretaries of Labor and Education.



Sec.  677.165  May a State establish additional indicators
of performance?

    States may identify additional indicators of performance for the six 
core programs. If a State does so, these indicators must be included in 
the Unified or Combined State Plan.



Sec.  677.170  How are State levels of performance for primary
indicators established?

    (a) A State must submit in the State Plan expected levels of 
performance on the primary indicators of performance for each core 
program as required by sec. 116(b)(3)(A)(iii) of WIOA as explained in 
joint guidance issued by the Secretaries of Labor and Education.
    (1) The initial State Plan submitted under WIOA must contain 
expected levels of performance for the first 2 years of the State Plan.
    (2) States must submit expected levels of performance for the third 
and fourth year of the State Plan before the third program year 
consistent with Sec. Sec.  676.135 and 676.145 of this chapter.
    (b) States must reach agreement on levels of performance with the 
Secretaries of Labor and Education for each indicator for each core 
program. These are the negotiated levels of performance. The negotiated 
levels must be based on the following factors:
    (1) How the negotiated levels of performance compare with State 
levels of performance established for other States;
    (2) The application of an objective statistical model established by 
the Secretaries of Labor and Education, subject to paragraph (d) of this 
section;
    (3) How the negotiated levels promote continuous improvement in 
performance based on the primary indicators and ensure optimal return on 
investment of Federal funds; and
    (4) The extent to which the negotiated levels assist the State in 
meeting the performance goals established by the Secretaries of Labor 
and Education for the core programs in accordance with the Government 
Performance and Results Act of 1993, as amended.
    (c) An objective statistical adjustment model will be developed and 
disseminated by the Secretaries of Labor and Education. The model will 
be based on:
    (1) Differences among States in actual economic conditions, 
including but not limited to unemployment rates and job losses or gains 
in particular industries; and
    (2) The characteristics of participants, including but not limited 
to:
    (i) Indicators of poor work history;
    (ii) Lack of work experience;
    (iii) Lack of educational or occupational skills attainment;
    (iv) Dislocation from high-wage and high-benefit employment;
    (v) Low levels of literacy;

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    (vi) Low levels of English proficiency;
    (vii) Disability status;
    (viii) Homelessness;
    (ix) Ex-offender status; and
    (x) Welfare dependency.
    (d) The objective statistical adjustment model developed under 
paragraph (c) of this section will be:
    (1) Applied to the core programs' primary indicators upon 
availability of data which are necessary to populate the model and apply 
the model to the local core programs;
    (2) Subject to paragraph (d)(1) of this section, used before the 
beginning of a program year in order to reach agreement on State 
negotiated levels for the upcoming program year; and
    (3) Subject to paragraph (d)(1) of this section, used to revise 
negotiated levels at the end of a program year based on actual economic 
conditions and characteristics of participants served, consistent with 
sec. 116(b)(3)(A)(vii) of WIOA.
    (e) The negotiated levels revised at the end of the program year, 
based on the statistical adjustment model, are the adjusted levels of 
performance.
    (f) States must comply with these requirements from sec. 116 of WIOA 
as explained in joint guidance issued by the Departments of Labor and 
Education.



Sec.  677.175  What responsibility do States have to use quarterly
wage record information for performance accountability?

    (a)(1) States must, consistent with State laws, use quarterly wage 
record information in measuring a State's performance on the primary 
indicators of performance outlined in Sec.  677.155 and a local area's 
performance on the primary indicators of performance identified in Sec.  
677.205.
    (2) The use of social security numbers from participants and such 
other information as is necessary to measure the progress of those 
participants through quarterly wage record information is authorized.
    (3) To the extent that quarterly wage records are not available for 
a participant, States may use other information as is necessary to 
measure the progress of those participants through methods other than 
quarterly wage record information.
    (b) ``Quarterly wage record information'' means intrastate and 
interstate wages paid to an individual, the social security number (or 
numbers, if more than one) of the individual, and the name, address, 
State, and the Federal employer identification number of the employer 
paying the wages to the individual.
    (c) The Governor may designate a State agency (or appropriate State 
entity) to assist in carrying out the performance reporting requirements 
for WIOA core programs and ETPs. The Governor or such agency (or 
appropriate State entity) is responsible for:
    (1) Facilitating data matches;
    (2) Data quality reliability; and
    (3) Protection against disaggregation that would violate applicable 
privacy standards.



Subpart B_Sanctions for State Performance and the Provision
of Technical Assistance



Sec.  677.180  When is a State subject to a financial sanction 
under the Workforce Innovation and Opportunity Act?

    A State will be subject to financial sanction under WIOA sec. 116(f) 
if it fails to:
    (a) Submit the State annual performance report required under WIOA 
sec. 116(d)(2); or
    (b) Meet adjusted levels of performance for the primary indicators 
of performance in accordance with sec. 116(f) of WIOA.



Sec.  677.185  When are sanctions applied for a State's failure
to submit an annual performance report?

    (a) Sanctions will be applied when a State fails to submit the State 
annual performance report required under sec. 116(d)(2) of WIOA. A State 
fails to report if the State either:
    (1) Does not submit a State annual performance report by the date 
for timely submission set in performance reporting guidance; or
    (2) Submits a State annual performance report by the date for timely 
submission, but the report is incomplete.

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    (b) Sanctions will not be applied if the reporting failure is due to 
exceptional circumstances outside of the State's control. Exceptional 
circumstances may include, but are not limited to:
    (1) Natural disasters;
    (2) Unexpected personnel transitions; and
    (3) Unexpected technology related issues.
    (c) In the event that a State may not be able to submit a complete 
and accurate performance report by the deadline for timely reporting:
    (1) The State must notify the Secretary of Labor or Secretary of 
Education as soon as possible, but no later than 30 days prior to the 
established deadline for submission, of a potential impact on the 
State's ability to submit its State annual performance report in order 
to not be considered failing to report.
    (2) In circumstances where unexpected events occur less than 30 days 
before the established deadline for submission of the State annual 
performance reports, the Secretaries of Labor and Education will review 
requests for extending the reporting deadline in accordance with the 
Departments of Labor and Education's procedures that will be established 
in guidance.



Sec.  677.190  When are sanctions applied for failure to achieve
adjusted levels of performance?

    (a) States' negotiated levels of performance will be adjusted 
through the application of the statistical adjustment model established 
under Sec.  677.170 to account for actual economic conditions 
experienced during a program year and characteristics of participants, 
annually at the close of each program year.
    (b) Any State that fails to meet adjusted levels of performance for 
the primary indicators of performance outlined in Sec.  677.155 for any 
year will receive technical assistance, including assistance in the 
development of a performance improvement plan provided by the Secretary 
of Labor or Secretary of Education.
    (c) Whether a State has failed to meet adjusted levels of 
performance will be determined using the following three criteria:
    (1) The overall State program score, which is expressed as the 
percent achieved, compares the actual results achieved by a core program 
on the primary indicators of performance to the adjusted levels of 
performance for that core program. The average of the percentages 
achieved of the adjusted level of performance for each of the primary 
indicators by a core program will constitute the overall State program 
score.
    (2) However, until all indicators for the core program have at least 
2 years of complete data, the overall State program score will be based 
on a comparison of the actual results achieved to the adjusted level of 
performance for each of the primary indicators that have at least 2 
years of complete data for that program;
    (3) The overall State indicator score, which is expressed as the 
percent achieved, compares the actual results achieved on a primary 
indicator of performance by all core programs in a State to the adjusted 
levels of performance for that primary indicator. The average of the 
percentages achieved of the adjusted level of performance by all of the 
core programs on that indicator will constitute the overall State 
indicator score.
    (4) However, until all indicators for the State have at least 2 
years of complete data, the overall State indicator score will be based 
on a comparison of the actual results achieved to the adjusted level of 
performance for each of the primary indicators that have at least 2 
years of complete data in a State.
    (5) The individual indicator score, which is expressed as the 
percent achieved, compares the actual results achieved by each core 
program on each of the individual primary indicators to the adjusted 
levels of performance for each of the program's primary indicators of 
performance.
    (d) A performance failure occurs when:
    (1) Any overall State program score or overall State indicator score 
falls below 90 percent for the program year; or

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    (2) Any of the States' individual indicator scores fall below 50 
percent for the program year.
    (e) Sanctions based on performance failure will be applied to States 
if, for 2 consecutive years, the State fails to meet:
    (1) 90 percent of the overall State program score for the same core 
program;
    (2) 90 percent of the overall State indicator score for the same 
primary indicator; or
    (3) 50 percent of the same indicator score for the same program.



Sec.  677.195  What should States expect when a sanction is 
applied to the Governor's Reserve Allotment?

    (a) The Secretaries of Labor and Education will reduce the 
Governor's Reserve Allotment by five percent of the maximum available 
amount for the immediately succeeding program year if:
    (1) The State fails to submit the State annual performance reports 
as required under WIOA sec. 116(d)(2), as defined in Sec.  677.185;
    (2) The State fails to meet State adjusted levels of performance for 
the same primary performance indicator(s) under either Sec.  
677.190(d)(1) for the second consecutive year as defined in Sec.  
677.190; or
    (3) The State's score on the same indicator for the same program 
falls below 50 percent under Sec.  677.190(d)(2) for the second 
consecutive year as defined in Sec.  677.190.
    (b) If the State fails under paragraphs (a)(1) and either (a)(2) or 
(3) of this section in the same program year, the Secretaries of Labor 
and Education will reduce the Governor's Reserve Allotment by 10 percent 
of the maximum available amount for the immediately succeeding program 
year.
    (c) If a State's Governor's Reserve Allotment is reduced:
    (1) The reduced amount will not be returned to the State in the 
event that the State later improves performance or submits its annual 
performance report; and
    (2) The Governor's Reserve will continue to be set at the reduced 
level in each subsequent year until the Secretary of Labor or the 
Secretary of Education, depending on which program is impacted, 
determines that the State met the State adjusted levels of performance 
for the applicable primary performance indicators and has submitted all 
of the required performance reports.
    (d) A State may request review of a sanction the Secretary of Labor 
imposes in accordance with the provisions of Sec.  683.800 of this 
chapter.



Sec.  677.200  What other administrative actions will be applied
to States' performance requirements?

    (a) In addition to sanctions for failure to report or failure to 
meet adjusted levels of performance, States will be subject to 
administrative actions in the case of poor performance.
    (b) States' performance achievement on the individual primary 
indicators will be assessed in addition to the overall State program 
score and overall State indicator score. Based on this assessment, as 
clarified and explained in guidance, for performance on any individual 
primary indicator, the Secretary of Labor or the Secretary of Education 
will require the State to establish a performance risk plan to address 
continuous improvement on the individual primary indicator.



Subpart C_Local Performance Accountability for Workforce Innovation and 
                    Opportunity Act Title I Programs



Sec.  677.205  What performance indicators apply to local areas
and what information must be included in local area performance 
reports?

    (a) Each local area in a State under WIOA title I is subject to the 
same primary indicators of performance for the core programs for WIOA 
title I under Sec.  677.155(a)(1) and (c) that apply to the State.
    (b) In addition to the indicators described in paragraph (a) of this 
section, under Sec.  677.165, the Governor may apply additional 
indicators of performance to local areas in the State.
    (c) States must annually make local area performance reports 
available to the public using a template that the Departments of Labor 
and Education will disseminate in guidance, including by electronic 
means. The State must

[[Page 196]]

provide electronic access to the public local area performance report in 
its annual State performance report.
    (d) The local area performance report must include:
    (1) The actual results achieved under Sec.  677.155 and the 
information required under Sec.  677.160(a);
    (2) The percentage of a local area's allotment under WIOA secs. 
128(b) and 133(b) that the local area spent on administrative costs; and
    (3) Other information that facilitates comparisons of programs with 
programs in other local areas (or planning regions if the local area is 
part of a planning region).
    (e) The disaggregation of data for the local area performance report 
must be done in compliance with WIOA sec. 116(d)(6)(C).
    (f) States must comply with any requirements from sec. 116(d)(3) of 
WIOA as explained in guidance, including the use of the performance 
reporting template, issued by DOL.



Sec.  677.210  How are local performance levels established?

    (a) The objective statistical adjustment model required under sec. 
116(b)(3)(A)(viii) of WIOA and described in Sec.  677.170(c) must be:
    (1) Applied to the core programs' primary indicators upon 
availability of data which are necessary to populate the model and apply 
the model to the local core programs;
    (2) Used in order to reach agreement on local negotiated levels of 
performance for the upcoming program year; and
    (3) Used to establish adjusted levels of performance at the end of a 
program year based on actual conditions, consistent with WIOA sec. 
116(c)(3).
    (b) Until all indicators for the core program in a local area have 
at least 2 years of complete data, the comparison of the actual results 
achieved to the adjusted levels of performance for each of the primary 
indicators only will be applied where there are at least 2 years of 
complete data for that program.
    (c) The Governor, Local Workforce Development Board (WDB), and chief 
elected official must reach agreement on local negotiated levels of 
performance based on a negotiations process before the start of a 
program year with the use of the objective statistical model described 
in paragraph (a) of this section. The negotiations will include a 
discussion of circumstances not accounted for in the model and will take 
into account the extent to which the levels promote continuous 
improvement. The objective statistical model will be applied at the end 
of the program year based on actual economic conditions and 
characteristics of the participants served.
    (d) The negotiations process described in paragraph (c) of this 
section must be developed by the Governor and disseminated to all Local 
WDBs and chief elected officials.
    (e) The Local WDBs may apply performance measures to service 
providers that differ from the performance indicators that apply to the 
local area. These performance measures must be established after 
considering:
    (1) The established local negotiated levels;
    (2) The services provided by each provider; and
    (3) The populations the service providers are intended to serve.



 Subpart D_Incentives and Sanctions for Local Performance for Workforce 
             Innovation and Opportunity Act Title I Programs



Sec.  677.215  Under what circumstances are local areas eligible
for State Incentive Grants?

    (a) The Governor is not required to award local incentive funds, but 
is authorized to provide incentive grants to local areas for performance 
on the primary indicators of performance consistent with WIOA sec. 
134(a)(3)(A)(xi).
    (b) The Governor may use non-Federal funds to create incentives for 
the Local WDBs to implement pay-for-performance contract strategies for 
the delivery of training services described in WIOA sec. 134(c)(3) or 
activities described in WIOA sec. 129(c)(2) in the local areas served by 
the Local WDBs. Pay-for-performance contract strategies must be 
implemented in accordance with part 683, subpart E of this chapter and 
Sec.  677.160.

[[Page 197]]



Sec.  677.220  Under what circumstances may a corrective action or
sanction be applied to local areas for poor performance?

    (a) If a local area fails to meet the adjusted levels of performance 
agreed to under Sec.  677.210 for the primary indicators of performance 
in the adult, dislocated worker, and youth programs authorized under 
WIOA title I in any program year, technical assistance must be provided 
by the Governor or, upon the Governor's request, by the Secretary of 
Labor.
    (1) A State must establish the threshold for failure to meet 
adjusted levels of performance for a local area before coming to 
agreement on the negotiated levels of performance for the local area.
    (i) A State must establish the adjusted level of performance for a 
local area, using the statistical adjustment model described in Sec.  
677.170(c).
    (ii) At least 2 years of complete data on any indicator for any 
local core program are required in order to establish adjusted levels of 
performance for a local area.
    (2) The technical assistance may include:
    (i) Assistance in the development of a performance improvement plan;
    (ii) The development of a modified local or regional plan; or
    (iii) Other actions designed to assist the local area in improving 
performance.
    (b) If a local area fails to meet the adjusted levels of performance 
agreed to under Sec.  677.210 for the same primary indicators of 
performance for the same core program authorized under WIOA title I for 
a third consecutive program year, the Governor must take corrective 
actions. The corrective actions must include the development of a 
reorganization plan under which the Governor:
    (1) Requires the appointment and certification of a new Local WDB, 
consistent with the criteria established under Sec.  679.350 of this 
chapter;
    (2) Prohibits the use of eligible providers and one-stop partners 
that have been identified as achieving poor levels of performance; or
    (3) Takes such other significant actions as the Governor determines 
are appropriate.



Sec.  677.225  Under what circumstances may local areas appeal a
reorganization plan?

    (a) The Local WDB and chief elected official for a local area that 
is subject to a reorganization plan under WIOA sec. 116(g)(2)(A) may 
appeal to the Governor to rescind or revise the reorganization plan not 
later than 30 days after receiving notice of the reorganization plan. 
The Governor must make a final decision within 30 days after receipt of 
the appeal.
    (b) The Local WDB and chief elected official may appeal the final 
decision of the Governor to the Secretary of Labor not later than 30 
days after receiving the decision from the Governor. Any appeal of the 
Governor's final decision must be:
    (1) Appealed jointly by the Local WDB and chief elected official to 
the Secretary of Labor under Sec.  683.650 of this chapter; and
    (2) Must be submitted by certified mail, return receipt requested, 
to the Secretary of Labor, U.S. Department of Labor, 200 Constitution 
Ave. NW., Washington, DC 20210, Attention: ASET. A copy of the appeal 
must be simultaneously provided to the Governor.
    (c) Upon receipt of the joint appeal from the Local WDB and chief 
elected official, the Secretary of Labor must make a final decision 
within 30 days. In making this determination the Secretary of Labor may 
consider any comments submitted by the Governor in response to the 
appeals.
    (d) The decision by the Governor on the appeal becomes effective at 
the time it is issued and remains effective unless the Secretary of 
Labor rescinds or revises the reorganization plan under WIOA sec. 
116(g)(2)(C).

[[Page 198]]



     Subpart E_Eligible Training Provider Performance for Workforce 
             Innovation and Opportunity Act Title I Programs



Sec.  677.230  What information is required for the eligible 
training provider performance reports?

    (a) States are required to make available and publish annually using 
a template the Departments of Labor and Education will disseminate 
including through electronic means, the ETP performance reports for ETPs 
who provide services under sec. 122 of WIOA that are described in 
Sec. Sec.  680.400 through 680.530 of this chapter. These reports at a 
minimum must include, consistent with Sec.  677.175 and with respect to 
each program of study that is eligible to receive funds under WIOA:
    (1) The total number of participants as defined by Sec.  677.150(a) 
who received training services under the adult and dislocated worker 
programs authorized under WIOA title I for the most recent year and the 
3 preceding program years, including:
    (i) The number of participants under the adult and dislocated worker 
programs disaggregated by barriers to employment;
    (ii) The number of participants under the adult and dislocated 
worker programs disaggregated by race, ethnicity, sex, and age;
    (iii) The number of participants under the adult and dislocated 
worker programs disaggregated by the type of training entity for the 
most recent program year and the 3 preceding program years;
    (2) The total number of participants who exit a program of study or 
its equivalent, including disaggregate counts by the type of training 
entity during the most recent program year and the 3 preceding program 
years;
    (3) The average cost-per-participant for participants who received 
training services for the most recent program year and the 3 preceding 
program years disaggregated by type of training entity;
    (4) The total number of individuals exiting from the program of 
study (or the equivalent) with respect to all individuals engaging in 
the program of study (or the equivalent); and
    (5) The levels of performance achieved for the primary indicators of 
performance identified in Sec.  677.155(a)(1)(i) through (iv) with 
respect to all individuals engaging in a program of study (or the 
equivalent).
    (b) Apprenticeship programs registered under the National 
Apprenticeship Act are not required to submit ETP performance 
information. If a registered apprenticeship program voluntarily submits 
performance information to a State, the State must include this 
information in the report.
    (c) The State must provide a mechanism of electronic access to the 
public ETP performance report in its annual State performance report.
    (d) States must comply with any requirements from sec. 116(d)(4) of 
WIOA as explained in guidance issued by DOL.
    (e) The Governor may designate one or more State agencies such as a 
State Education Agency or other State Educational Authority to assist in 
overseeing ETP performance and facilitating the production and 
dissemination of ETP performance reports. These agencies may be the same 
agencies that are designated as responsible for administering the ETP 
list as provided under Sec.  680.500 of this chapter. The Governor or 
such agencies, or authorities, is responsible for:
    (1) Facilitating data matches between ETP records and unemployment 
insurance (UI) wage data in order to produce the report;
    (2) The creation and dissemination of the reports as described in 
paragraphs (a) through (d) of this section;
    (3) Coordinating the dissemination of the performance reports with 
the ETP list and the information required to accompany the list, as 
provided in Sec.  680.500 of this chapter.

[[Page 199]]



       Subpart F_Performance Reporting Administrative Requirements



Sec.  677.235  What are the reporting requirements for individual
records for core Workforce Innovation and Opportunity Act (WIOA)
title I programs; the Wagner-Peyser Act Employment Service program, 
as amended by WIOA Title III; and the Vocational Rehabilitation
program authorized under title I of the Rehabilitation Act of 1973,
as amended by WIOA title IV?

    (a) On a quarterly basis, each State must submit to the Secretary of 
Labor or the Secretary of Education, as appropriate, individual records 
that include demographic information, information on services received, 
and information on resulting outcomes, as appropriate, for each 
reportable individual in either of the following programs administered 
by the Secretary of Labor or Secretary of Education: A WIOA title I core 
program; the Employment Service program authorized under the Wagner-
Peyser Act, as amended by WIOA title III; or the VR program authorized 
under title I of the Rehabilitation Act of 1973, as amended by WIOA 
title IV.
    (b) For individual records submitted to the Secretary of Labor, 
those records may be required to be integrated across all programs 
administered by the Secretary of Labor in one single file.
    (c) States must comply with the requirements of sec. 116(d)(2) of 
WIOA as explained in guidance issued by the Departments of Labor and 
Education.



Sec.  677.240  What are the requirements for data validation of 
State annual performance reports?

    (a) States must establish procedures, consistent with guidelines 
issued by the Secretary of Labor or the Secretary of Education, to 
ensure that they submit complete annual performance reports that contain 
information that is valid and reliable, as required by WIOA sec. 
116(d)(5).
    (b) If a State fails to meet standards in paragraph (a) of this 
section as determined by the Secretary of Labor or the Secretary of 
Education, the appropriate Secretary will provide technical assistance 
and may require the State to develop and implement corrective actions, 
which may require the State to provide training for its subrecipients.
    (c) The Secretaries of Labor and Education will provide training and 
technical assistance to States in order to implement this section. 
States must comply with the requirements of sec. 116(d)(5) of WIOA as 
explained in guidance.



PART 678_DESCRIPTION OF THE ONE-STOP DELIVERY SYSTEM UNDER TITLE I
OF THE WORKFORCE INNOVATION AND OPPORTUNITY ACT--Table of Contents



      Subpart A_General Description of the One-Stop Delivery System

Sec.
678.300 What is the one-stop delivery system?
678.305 What is a comprehensive one-stop center and what must be 
          provided there?
678.310 What is an affiliated site and what must be provided there?
678.315 Can a stand-alone Wagner-Peyser Act Employment Service office be 
          designated as an affiliated one-stop site?
678.320 Are there any requirements for networks of eligible one-stop 
          partners or specialized centers?

    Subpart B_One-Stop Partners and the Responsibilities of Partners

678.400 Who are the required one-stop partners?
678.405 Is Temporary Assistance for Needy Families a required one-stop 
          partner?
678.410 What other entities may serve as one-stop partners?
678.415 What entity serves as the one-stop partner for a particular 
          program in the local area?
678.420 What are the roles and responsibilities of the required one-stop 
          partners?
678.425 What are the applicable career services that must be provided 
          through the one-stop delivery system by required one-stop 
          partners?
678.430 What are career services?
678.435 What are the business services provided through the one-stop 
          delivery system, and how are they provided?

[[Page 200]]

678.440 When may a fee be charged for the business services in this 
          subpart?

 Subpart C_Memorandum of Understanding for the One-Stop Delivery System

678.500 What is the Memorandum of Understanding for the one-stop 
          delivery system and what must be included in the Memorandum of 
          Understanding?
678.505 Is there a single Memorandum of Understanding for the local 
          area, or must there be different Memoranda of Understanding 
          between the Local Workforce Development Board and each 
          partner?
678.510 How must the Memorandum of Understanding be negotiated?

                      Subpart D_One-Stop Operators

678.600 Who may operate one-stop centers?
678.605 How is the one-stop operator selected?
678.610 When is the sole-source selection of one-stop operators 
          appropriate, and how is it conducted?
678.615 May an entity currently serving as one-stop operator compete to 
          be a one-stop operator under the procurement requirements of 
          this subpart?
678.620 What is the one-stop operator's role?
678.625 Can a one-stop operator also be a service provider?
678.630 Can State merit staff still work in a one-stop center where the 
          operator is not a governmental entity?
678.635 What is the compliance date of the provisions of this subpart?

                   Subpart E_One-Stop Operating Costs

678.700 What are the one-stop infrastructure costs?
678.705 What guidance must the Governor issue regarding one-stop 
          infrastructure funding?
678.710 How are infrastructure costs funded?
678.715 How are one-stop infrastructure costs funded in the local 
          funding mechanism?
678.720 What funds are used to pay for infrastructure costs in the local 
          one-stop infrastructure funding mechanism?
678.725 What happens if consensus on infrastructure funding is not 
          reached at the local level between the Local Workforce 
          Development Board, chief elected officials, and one-stop 
          partners?
678.730 What is the State one-stop infrastructure funding mechanism?
678.731 What are the steps to determine the amount to be paid under the 
          State one-stop infrastructure funding mechanism?
678.735 How are infrastructure cost budgets for the one-stop centers in 
          a local area determined in the State one-stop infrastructure 
          funding mechanism?
678.736 How does the Governor establish a cost allocation methodology 
          used to determine the one-stop partner programs' proportionate 
          shares of infrastructure costs under the State one-stop 
          infrastructure funding mechanism?
678.737 How are one-stop partner programs' proportionate shares of 
          infrastructure costs determined under the State one-stop 
          infrastructure funding mechanism?
678.738 How are statewide caps on the contributions for one-stop 
          infrastructure funding determined in the State one-stop 
          infrastructure funding mechanism?
678.740 What funds are used to pay for infrastructure costs in the State 
          one-stop infrastructure funding mechanism?
678.745 What factors does the State Workforce Development Board use to 
          develop the formula described in Workforce Innovation and 
          Opportunity Act, which is used by the Governor to determine 
          the appropriate one-stop infrastructure budget for each local 
          area operating under the State infrastructure funding 
          mechanism, if no reasonably implementable locally negotiated 
          budget exists?
678.750 When and how can a one-stop partner appeal a one-stop 
          infrastructure amount designated by the State under the State 
          infrastructure funding mechanism?
678.755 What are the required elements regarding infrastructure funding 
          that must be included in the one-stop Memorandum of 
          Understanding?
678.760 How do one-stop partners jointly fund other shared costs under 
          the Memorandum of Understanding?

                    Subpart F_One-Stop Certification

678.800 How are one-stop centers and one-stop delivery systems certified 
          for effectiveness, physical and programmatic accessibility, 
          and continuous improvement?

                       Subpart G_Common Identifier

678.900 What is the common identifier to be used by each one-stop 
          delivery system?

    Authority: Secs. 503, 107, 121, 134, 189, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

    Source: 81 FR 56008, Aug. 19, 2016, unless otherwise noted.

[[Page 201]]



      Subpart A_General Description of the One-Stop Delivery System



Sec.  678.300  What is the one-stop delivery system?

    (a) The one-stop delivery system brings together workforce 
development, educational, and other human resource services in a 
seamless customer-focused service delivery network that enhances access 
to the programs' services and improves long-term employment outcomes for 
individuals receiving assistance. One-stop partners administer 
separately funded programs as a set of integrated streamlined services 
to customers.
    (b) Title I of the Workforce Innovation and Opportunity Act (WIOA) 
assigns responsibilities at the local, State, and Federal level to 
ensure the creation and maintenance of a one-stop delivery system that 
enhances the range and quality of education and workforce development 
services that employers and individual customers can access.
    (c) The system must include at least one comprehensive physical 
center in each local area as described in Sec.  678.305.
    (d) The system may also have additional arrangements to supplement 
the comprehensive center. These arrangements include:
    (1) An affiliated site or a network of affiliated sites, where one 
or more partners make programs, services, and activities available, as 
described in Sec.  678.310;
    (2) A network of eligible one-stop partners, as described in 
Sec. Sec.  678.400 through 678.410, through which each partner provides 
one or more of the programs, services, and activities that are linked, 
physically or technologically, to an affiliated site or access point 
that assures customers are provided information on the availability of 
career services, as well as other program services and activities, 
regardless of where they initially enter the public workforce system in 
the local area; and
    (3) Specialized centers that address specific needs, including those 
of dislocated workers, youth, or key industry sectors, or clusters.
    (e) Required one-stop partner programs must provide access to 
programs, services, and activities through electronic means if 
applicable and practicable. This is in addition to providing access to 
services through the mandatory comprehensive physical one-stop center 
and any affiliated sites or specialized centers. The provision of 
programs and services by electronic methods such as Web sites, 
telephones, or other means must improve the efficiency, coordination, 
and quality of one-stop partner services. Electronic delivery must not 
replace access to such services at a comprehensive one-stop center or be 
a substitute to making services available at an affiliated site if the 
partner is participating in an affiliated site. Electronic delivery 
systems must be in compliance with the nondiscrimination and equal 
opportunity provisions of WIOA sec. 188 and its implementing regulations 
at 29 CFR part 38.
    (f) The design of the local area's one-stop delivery system must be 
described in the Memorandum of Understanding (MOU) executed with the 
one-stop partners, described in Sec.  678.500.



Sec.  678.305  What is a comprehensive one-stop center and what
must be provided there?

    (a) A comprehensive one-stop center is a physical location where job 
seeker and employer customers can access the programs, services, and 
activities of all required one-stop partners. A comprehensive one-stop 
center must have at least one title I staff person physically present.
    (b) The comprehensive one-stop center must provide:
    (1) Career services, described in Sec.  678.430;
    (2) Access to training services described in Sec.  680.200 of this 
chapter;
    (3) Access to any employment and training activities carried out 
under sec. 134(d) of WIOA;
    (4) Access to programs and activities carried out by one-stop 
partners listed in Sec. Sec.  678.400 through 678.410, including the 
Employment Service program authorized under the Wagner-Peyser Act, as 
amended by WIOA title III (Wagner-Peyser Act Employment Service 
program); and
    (5) Workforce and labor market information.

[[Page 202]]

    (c) Customers must have access to these programs, services, and 
activities during regular business days at a comprehensive one-stop 
center. The Local Workforce Development Board (WDB) may establish other 
service hours at other times to accommodate the schedules of individuals 
who work on regular business days. The State WDB will evaluate the hours 
of access to service as part of the evaluation of effectiveness in the 
one-stop certification process described in Sec.  678.800(b).
    (d) ``Access'' to each partner program and its services means:
    (1) Having a program staff member physically present at the one-stop 
center;
    (2) Having a staff member from a different partner program 
physically present at the one-stop center appropriately trained to 
provide information to customers about the programs, services, and 
activities available through partner programs; or
    (3) Making available a direct linkage through technology to program 
staff who can provide meaningful information or services.
    (i) A ``direct linkage'' means providing direct connection at the 
one-stop center, within a reasonable time, by phone or through a real-
time Web-based communication to a program staff member who can provide 
program information or services to the customer.
    (ii) A ``direct linkage'' cannot exclusively be providing a phone 
number or computer Web site or providing information, pamphlets, or 
materials.
    (e) All comprehensive one-stop centers must be physically and 
programmatically accessible to individuals with disabilities, as 
described in 29 CFR part 38, the implementing regulations of WIOA sec. 
188.



Sec.  678.310  What is an affiliated site and what must be provided
there?

    (a) An affiliated site, or affiliate one-stop center, is a site that 
makes available to job seeker and employer customers one or more of the 
one-stop partners' programs, services, and activities. An affiliated 
site does not need to provide access to every required one-stop partner 
program. The frequency of program staff's physical presence in the 
affiliated site will be determined at the local level. Affiliated sites 
are access points in addition to the comprehensive one-stop center(s) in 
each local area. If used by local areas as a part of the service 
delivery strategy, affiliate sites must be implemented in a manner that 
supplements and enhances customer access to services.
    (b) As described in Sec.  678.315, Wagner-Peyser Act employment 
services cannot be a stand-alone affiliated site.
    (c) States, in conjunction with the Local WDBs, must examine lease 
agreements and property holdings throughout the one-stop delivery system 
in order to use property in an efficient and effective way. Where 
necessary and appropriate, States and Local WDBs must take expeditious 
steps to align lease expiration dates with efforts to consolidate one-
stop operations into service points where Wagner-Peyser Act employment 
services are colocated as soon as reasonably possible. These steps must 
be included in the State Plan.
    (d) All affiliated sites must be physically and programmatically 
accessible to individuals with disabilities, as described in 29 CFR part 
38, the implementing regulations of WIOA sec. 188.



Sec.  678.315  Can a stand-alone Wagner-Peyser Act Employment
Service office be designated as an affiliated one-stop site?

    (a) Separate stand-alone Wagner-Peyser Act Employment Service 
offices are not permitted under WIOA, as also described in Sec.  652.202 
of this chapter.
    (b) If Wagner-Peyser Act employment services are provided at an 
affiliated site, there must be at least one or more other partners in 
the affiliated site with a physical presence of combined staff more than 
50 percent of the time the center is open. Additionally, the other 
partner must not be the partner administering local veterans' employment 
representatives, disabled veterans' outreach program specialists, or 
unemployment compensation programs. If Wagner-Peyser Act employment 
services and any of these 3 programs are provided at an affiliated site, 
an additional partner or partners must have a presence of combined staff

[[Page 203]]

in the center more than 50 percent of the time the center is open.



Sec.  678.320  Are there any requirements for networks of eligible
one-stop partners or specialized centers?

    Any network of one-stop partners or specialized centers, as 
described in Sec.  678.300(d)(3), must be connected to the comprehensive 
one-stop center and any appropriate affiliate one-stop centers, for 
example, by having processes in place to make referrals to these centers 
and the partner programs located in them. Wagner-Peyser Act employment 
services cannot stand alone in a specialized center. Just as described 
in Sec.  678.315 for an affiliated site, a specialized center must 
include other programs besides Wagner-Peyser Act employment services, 
local veterans' employment representatives, disabled veterans' outreach 
program specialists, and unemployment compensation.



    Subpart B_One-Stop Partners and the Responsibilities of Partners



Sec.  678.400  Who are the required one-stop partners?

    (a) Section 121(b)(1)(B) of WIOA identifies the entities that are 
required partners in the local one-stop delivery systems.
    (b) The required partners are the entities responsible for 
administering the following programs and activities in the local area:
    (1) Programs authorized under title I of WIOA, including:
    (i) Adults;
    (ii) Dislocated workers;
    (iii) Youth;
    (iv) Job Corps;
    (v) YouthBuild;
    (vi) Native American programs; and
    (vii) Migrant and seasonal farmworker programs;
    (2) The Wagner-Peyser Act Employment Service program authorized 
under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), as amended by WIOA 
title III;
    (3) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA;
    (4) The Vocational Rehabilitation (VR) program authorized under 
title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), as 
amended by WIOA title IV;
    (5) The Senior Community Service Employment Program authorized under 
title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
    (6) Career and technical education programs at the postsecondary 
level authorized under the Carl D. Perkins Career and Technical 
Education Act of 2006 (20 U.S.C. 2301 et seq.);
    (7) Trade Adjustment Assistance activities authorized under chapter 
2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
    (8) Jobs for Veterans State Grants programs authorized under chapter 
41 of title 38, U.S.C.;
    (9) Employment and training activities carried out under the 
Community Services Block Grant (42 U.S.C. 9901 et seq.);
    (10) Employment and training activities carried out by the 
Department of Housing and Urban Development;
    (11) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law);
    (12) Programs authorized under sec. 212 of the Second Chance Act of 
2007 (42 U.S.C. 17532); and
    (13) Temporary Assistance for Needy Families (TANF) authorized under 
part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), 
unless exempted by the Governor under Sec.  678.405(b).



Sec.  678.405  Is Temporary Assistance for Needy Families a
required one-stop partner?

    (a) Yes, TANF, authorized under part A of title IV of the Social 
Security Act (42 U.S.C. 601 et seq.), is a required partner.
    (b) The Governor may determine that TANF will not be a required 
partner in the State, or within some specific local areas in the State. 
In this instance, the Governor must notify the Secretaries of the U.S. 
Departments of Labor and Health and Human Services in writing of this 
determination.
    (c) In States, or local areas within a State, where the Governor has 
determined that TANF is not required to be a partner, local TANF 
programs may still work in collaboration or partnership with the local 
one-stop centers to

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deliver employment and training services to the TANF population unless 
inconsistent with the Governor's direction.



Sec.  678.410  What other entities may serve as one-stop partners?

    (a) Other entities that carry out a workforce development program, 
including Federal, State, or local programs and programs in the private 
sector, may serve as additional partners in the one-stop delivery system 
if the Local WDB and chief elected official(s) approve the entity's 
participation.
    (b) Additional partners may include, but are not limited to:
    (1) Employment and training programs administered by the Social 
Security Administration, including the Ticket to Work and Self-
Sufficiency Program established under sec. 1148 of the Social Security 
Act (42 U.S.C. 1320b-19);
    (2) Employment and training programs carried out by the Small 
Business Administration;
    (3) Supplemental Nutrition Assistance Program (SNAP) employment and 
training programs, authorized under secs. 6(d)(4) and 6(o) of the Food 
and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
    (4) Client Assistance Program authorized under sec. 112 of the 
Rehabilitation Act of 1973 (29 U.S.C. 732);
    (5) Programs authorized under the National and Community Service Act 
of 1990 (42 U.S.C. 12501 et seq.); and
    (6) Other appropriate Federal, State or local programs, including, 
but not limited to, employment, education, and training programs 
provided by public libraries or in the private sector.



Sec.  678.415  What entity serves as the one-stop partner for a
particular program in the local area?

    (a) The entity that carries out the program and activities listed in 
Sec.  678.400 or Sec.  678.410, and therefore serves as the one-stop 
partner, is the grant recipient, administrative entity, or organization 
responsible for administering the funds of the specified program in the 
local area. The term ``entity'' does not include the service providers 
that contract with, or are subrecipients of, the local administrative 
entity. For programs that do not include local administrative entities, 
the responsible State agency must be the partner. Specific entities for 
particular programs are identified in paragraphs (b) through (e) of this 
section. If a program or activity listed in Sec.  678.400 is not carried 
out in a local area, the requirements relating to a required one-stop 
partner are not applicable to such program or activity in that local 
one-stop delivery system.
    (b) For title II of WIOA, the entity or agency that carries out the 
program for the purposes of paragraph (a) of this section is the sole 
entity or agency in the State or outlying area responsible for 
administering or supervising policy for adult education and literacy 
activities in the State or outlying area. The State eligible entity or 
agency may delegate its responsibilities under paragraph (a) of this 
section to one or more eligible providers or consortium of eligible 
providers.
    (c) For the VR program, authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV, the entity that 
carries out the program for the purposes of paragraph (a) of this 
section is the designated State agencies or designated State units 
specified under sec. 101(a)(2) of the Rehabilitation Act that is 
primarily concerned with vocational rehabilitation, or vocational and 
other rehabilitation, of individuals with disabilities.
    (d) Under WIOA title I, the national programs, including Job Corps, 
the Native American program, YouthBuild, and Migrant and Seasonal 
Farmworker programs are required one-stop partners. The entity for the 
Native American program, YouthBuild, and Migrant and Seasonal Farmworker 
programs is the grantee of those respective programs. The entity for Job 
Corps is the Job Corps center.
    (e) For the Carl D. Perkins Career and Technical Education Act of 
2006, the entity that carries out the program for the purposes of 
paragraph (a) of this section is the eligible recipient or recipients at 
the postsecondary level, or a consortium of eligible recipients at the 
postsecondary level in the local area. The eligible recipient at the 
postsecondary level may also request assistance from the State eligible 
agency

[[Page 205]]

in completing its responsibilities under paragraph (a) of this section.



Sec.  678.420  What are the roles and responsibilities of the
required one-stop partners?

    Each required partner must:
    (a) Provide access to its programs or activities through the one-
stop delivery system, in addition to any other appropriate locations;
    (b) Use a portion of funds made available to the partner's program, 
to the extent consistent with the Federal law authorizing the partner's 
program and with Federal cost principles in 2 CFR parts 200 and 2900 
(requiring, among other things, that costs are allowable, reasonable, 
necessary, and allocable), to:
    (1) Provide applicable career services; and
    (2) Work collaboratively with the State and Local WDBs to establish 
and maintain the one-stop delivery system. This includes jointly funding 
the one-stop infrastructure through partner contributions that are based 
upon:
    (i) A reasonable cost allocation methodology by which infrastructure 
costs are charged to each partner based on proportionate use and 
relative benefit received;
    (ii) Federal cost principles; and
    (iii) Any local administrative cost requirements in the Federal law 
authorizing the partner's program. (This is further described in Sec.  
678.700.)
    (c) Enter into an MOU with the Local WDB relating to the operation 
of the one-stop delivery system that meets the requirements of Sec.  
678.500(b);
    (d) Participate in the operation of the one-stop delivery system 
consistent with the terms of the MOU, requirements of authorizing laws, 
the Federal cost principles, and all other applicable legal 
requirements; and
    (e) Provide representation on the State and Local WDBs as required 
and participate in Board committees as needed.



Sec.  678.425  What are the applicable career services that
must be provided through the one-stop delivery system by required 
one-stop partners?

    (a) The applicable career services to be delivered by required one-
stop partners are those services listed in Sec.  678.430 that are 
authorized to be provided under each partner's program.
    (b) One-stop centers provide services to individual customers based 
on individual needs, including the seamless delivery of multiple 
services to individual customers. There is no required sequence of 
services.



Sec.  678.430  What are career services?

    Career services, as identified in sec. 134(c)(2) of WIOA, consist of 
three types:
    (a) Basic career services must be made available and, at a minimum, 
must include the following services, as consistent with allowable 
program activities and Federal cost principles:
    (1) Determinations of whether the individual is eligible to receive 
assistance from the adult, dislocated worker, or youth programs;
    (2) Outreach, intake (including worker profiling), and orientation 
to information and other services available through the one-stop 
delivery system. For the TANF program, States must provide individuals 
with the opportunity to initiate an application for TANF assistance and 
non-assistance benefits and services, which could be implemented through 
the provision of paper application forms or links to the application Web 
site;
    (3) Initial assessment of skill levels including literacy, numeracy, 
and English language proficiency, as well as aptitudes, abilities 
(including skills gaps), and supportive services needs;
    (4) Labor exchange services, including--
    (i) Job search and placement assistance, and, when needed by an 
individual, career counseling, including--
    (A) Provision of information on in-demand industry sectors and 
occupations (as defined in sec. 3(23) of WIOA); and
    (B) Provision of information on nontraditional employment; and
    (ii) Appropriate recruitment and other business services on behalf 
of employers, including information and referrals to specialized 
business services other than those traditionally offered through the 
one-stop delivery system;
    (5) Provision of referrals to and coordination of activities with 
other programs and services, including programs

[[Page 206]]

and services within the one-stop delivery system and, when appropriate, 
other workforce development programs;
    (6) Provision of workforce and labor market employment statistics 
information, including the provision of accurate information relating to 
local, regional, and national labor market areas, including--
    (i) Job vacancy listings in labor market areas;
    (ii) Information on job skills necessary to obtain the vacant jobs 
listed; and
    (iii) Information relating to local occupations in demand and the 
earnings, skill requirements, and opportunities for advancement for 
those jobs;
    (7) Provision of performance information and program cost 
information on eligible providers of education, training, and workforce 
services by program and type of providers;
    (8) Provision of information, in usable and understandable formats 
and languages, about how the local area is performing on local 
performance accountability measures, as well as any additional 
performance information relating to the area's one-stop delivery system;
    (9) Provision of information, in usable and understandable formats 
and languages, relating to the availability of supportive services or 
assistance, and appropriate referrals to those services and assistance, 
including: Child care; child support; medical or child health assistance 
available through the State's Medicaid program and Children's Health 
Insurance Program; benefits under SNAP; assistance through the earned 
income tax credit; and assistance under a State program for TANF, and 
other supportive services and transportation provided through that 
program;
    (10) Provision of information and meaningful assistance to 
individuals seeking assistance in filing a claim for unemployment 
compensation.
    (i) ``Meaningful assistance'' means:
    (A) Providing assistance on-site using staff who are well-trained in 
unemployment compensation claims filing and the rights and 
responsibilities of claimants; or
    (B) Providing assistance by phone or via other technology, as long 
as the assistance is provided by trained and available staff and within 
a reasonable time.
    (ii) The costs associated in providing this assistance may be paid 
for by the State's unemployment insurance program, or the WIOA adult or 
dislocated worker programs, or some combination thereof.
    (11) Assistance in establishing eligibility for programs of 
financial aid assistance for training and education programs not 
provided under WIOA.
    (b) Individualized career services must be made available if 
determined to be appropriate in order for an individual to obtain or 
retain employment. These services include the following services, as 
consistent with program requirements and Federal cost principles:
    (1) Comprehensive and specialized assessments of the skill levels 
and service needs of adults and dislocated workers, which may include--
    (i) Diagnostic testing and use of other assessment tools; and
    (ii) In-depth interviewing and evaluation to identify employment 
barriers and appropriate employment goals;
    (2) Development of an individual employment plan, to identify the 
employment goals, appropriate achievement objectives, and appropriate 
combination of services for the participant to achieve his or her 
employment goals, including the list of, and information about, the 
eligible training providers (as described in Sec.  680.180 of this 
chapter);
    (3) Group counseling;
    (4) Individual counseling;
    (5) Career planning;
    (6) Short-term pre-vocational services including development of 
learning skills, communication skills, interviewing skills, punctuality, 
personal maintenance skills, and professional conduct services to 
prepare individuals for unsubsidized employment or training;
    (7) Internships and work experiences that are linked to careers (as 
described in Sec.  680.170 of this chapter);
    (8) Workforce preparation activities;

[[Page 207]]

    (9) Financial literacy services as described in sec. 129(b)(2)(D) of 
WIOA and Sec.  681.500 of this chapter;
    (10) Out-of-area job search assistance and relocation assistance; 
and
    (11) English language acquisition and integrated education and 
training programs.
    (c) Follow-up services must be provided, as appropriate, including: 
Counseling regarding the workplace, for participants in adult or 
dislocated worker workforce investment activities who are placed in 
unsubsidized employment, for up to 12 months after the first day of 
employment.
    (d) In addition to the requirements in paragraph (a)(2) of this 
section, TANF agencies must identify employment services and related 
support being provided by the TANF program (within the local area) that 
qualify as career services and ensure access to them via the local one-
stop delivery system.



Sec.  678.435  What are the business services provided through
the one-stop delivery system, and how are they provided?

    (a) Certain career services must be made available to local 
employers, specifically labor exchange activities and labor market 
information described in Sec.  678.430(a)(4)(ii) and (a)(6). Local areas 
must establish and develop relationships and networks with large and 
small employers and their intermediaries. Local areas also must develop, 
convene, or implement industry or sector partnerships.
    (b) Customized business services may be provided to employers, 
employer associations, or other such organizations. These services are 
tailored for specific employers and may include:
    (1) Customized screening and referral of qualified participants in 
training services to employers;
    (2) Customized services to employers, employer associations, or 
other such organizations, on employment-related issues;
    (3) Customized recruitment events and related services for employers 
including targeted job fairs;
    (4) Human resource consultation services, including but not limited 
to assistance with:
    (i) Writing/reviewing job descriptions and employee handbooks;
    (ii) Developing performance evaluation and personnel policies;
    (iii) Creating orientation sessions for new workers;
    (iv) Honing job interview techniques for efficiency and compliance;
    (v) Analyzing employee turnover;
    (vi) Creating job accommodations and using assistive technologies; 
or
    (vii) Explaining labor and employment laws to help employers comply 
with discrimination, wage/hour, and safety/health regulations;
    (5) Customized labor market information for specific employers, 
sectors, industries or clusters; and
    (6) Other similar customized services.
    (c) Local areas may also provide other business services and 
strategies that meet the workforce investment needs of area employers, 
in accordance with partner programs' statutory requirements and 
consistent with Federal cost principles. These business services may be 
provided through effective business intermediaries working in 
conjunction with the Local WDB, or through the use of economic 
development, philanthropic, and other public and private resources in a 
manner determined appropriate by the Local WDB and in cooperation with 
the State. Allowable activities, consistent with each partner's 
authorized activities, include, but are not limited to:
    (1) Developing and implementing industry sector strategies 
(including strategies involving industry partnerships, regional skills 
alliances, industry skill panels, and sectoral skills partnerships);
    (2) Customized assistance or referral for assistance in the 
development of a registered apprenticeship program;
    (3) Developing and delivering innovative workforce investment 
services and strategies for area employers, which may include career 
pathways, skills upgrading, skill standard development and certification 
for recognized postsecondary credential or other employer use, and other 
effective initiatives for meeting the workforce investment needs of area 
employers and workers;
    (4) Assistance to area employers in managing reductions in force in 
coordination with rapid response activities and with strategies for the 
aversion of layoffs, which may include strategies

[[Page 208]]

such as early identification of firms at risk of layoffs, use of 
feasibility studies to assess the needs of and options for at-risk 
firms, and the delivery of employment and training activities to address 
risk factors;
    (5) The marketing of business services to appropriate area 
employers, including small and mid-sized employers; and
    (6) Assisting employers with accessing local, State, and Federal tax 
credits.
    (d) All business services and strategies must be reflected in the 
local plan, described in Sec.  679.560(b)(3) of this chapter.



Sec.  678.440  When may a fee be charged for the business 
services in this subpart?

    (a) There is no requirement that a fee-for-service be charged to 
employers.
    (b) No fee may be charged for services provided in Sec.  678.435(a).
    (c) A fee may be charged for services provided under Sec.  
678.435(b) and (c). Services provided under Sec.  678.435(c) may be 
provided through effective business intermediaries working in 
conjunction with the Local WDB and may also be provided on a fee-for-
service basis or through the leveraging of economic development, 
philanthropic, and other public and private resources in a manner 
determined appropriate by the Local WDB. The Local WDB may examine the 
services provided compared with the assets and resources available 
within the local one-stop delivery system and through its partners to 
determine an appropriate cost structure for services, if any.
    (d) Any fees earned are recognized as program income and must be 
expended by the partner in accordance with the partner program's 
authorizing statute, implementing regulations, and Federal cost 
principles identified in Uniform Guidance.



 Subpart C_Memorandum of Understanding for the One-Stop Delivery System



Sec.  678.500  What is the Memorandum of Understanding for the
one-stop delivery system and what must be included in the Memorandum
of Understanding?

    (a) The MOU is the product of local discussion and negotiation, and 
is an agreement developed and executed between the Local WDB and the 
one-stop partners, with the agreement of the chief elected official and 
the one-stop partners, relating to the operation of the one-stop 
delivery system in the local area. Two or more local areas in a region 
may develop a single joint MOU, if they are in a region that has 
submitted a regional plan under sec. 106 of WIOA.
    (b) The MOU must include:
    (1) A description of services to be provided through the one-stop 
delivery system, including the manner in which the services will be 
coordinated and delivered through the system;
    (2) Agreement on funding the costs of the services and the operating 
costs of the system, including:
    (i) Funding of infrastructure costs of one-stop centers in 
accordance with Sec. Sec.  678.700 through 678.755; and
    (ii) Funding of the shared services and operating costs of the one-
stop delivery system described in Sec.  678.760;
    (3) Methods for referring individuals between the one-stop operators 
and partners for appropriate services and activities;
    (4) Methods to ensure that the needs of workers, youth, and 
individuals with barriers to employment, including individuals with 
disabilities, are addressed in providing access to services, including 
access to technology and materials that are available through the one-
stop delivery system;
    (5) The duration of the MOU and procedures for amending it; and
    (6) Assurances that each MOU will be reviewed, and if substantial 
changes have occurred, renewed, not less than once every 3-year period 
to ensure appropriate funding and delivery of services.
    (c) The MOU may contain any other provisions agreed to by the 
parties that

[[Page 209]]

are consistent with WIOA title I, the authorizing statutes and 
regulations of one-stop partner programs, and the WIOA regulations.
    (d) When fully executed, the MOU must contain the signatures of the 
Local WDB, one-stop partners, the chief elected official(s), and the 
time period in which the agreement is effective. The MOU must be updated 
not less than every 3 years to reflect any changes in the signatory 
official of the Board, one-stop partners, and chief elected officials, 
or one-stop infrastructure funding.
    (e) If a one-stop partner appeal to the State regarding 
infrastructure costs, using the process described in Sec.  678.750, 
results in a change to the one-stop partner's infrastructure cost 
contributions, the MOU must be updated to reflect the final one-stop 
partner infrastructure cost contributions.



Sec.  678.505  Is there a single Memorandum of Understanding for
the local area, or must there be different Memoranda of Understanding
between the Local Workforce Development Board and each partner?

    (a) A single ``umbrella'' MOU may be developed that addresses the 
issues relating to the local one-stop delivery system for the Local WDB, 
chief elected official and all partners. Alternatively, the Local WDB 
(with agreement of chief elected official) may enter into separate 
agreements between each partner or groups of partners.
    (b) Under either approach, the requirements described in Sec.  
678.500 apply. Since funds are generally appropriated annually, the 
Local WDB may negotiate financial agreements with each partner annually 
to update funding of services and operating costs of the system under 
the MOU.



Sec.  678.510  How must the Memorandum of Understanding be negotiated?

    (a) WIOA emphasizes full and effective partnerships between Local 
WDBs, chief elected officials, and one-stop partners. Local WDBs and 
partners must enter into good-faith negotiations. Local WDBs, chief 
elected officials, and one-stop partners may also request assistance 
from a State agency responsible for administering the partner program, 
the Governor, State WDB, or other appropriate parties on other aspects 
of the MOU.
    (b) Local WDBs and one-stop partners must establish, in the MOU, how 
they will fund the infrastructure costs and other shared costs of the 
one-stop centers. If agreement regarding infrastructure costs is not 
reached when other sections of the MOU are ready, an interim 
infrastructure funding agreement may be included instead, as described 
in Sec.  678.715(c). Once agreement on infrastructure funding is 
reached, the Local WDB and one-stop partners must amend the MOU to 
include the infrastructure funding of the one-stop centers. 
Infrastructure funding is described in detail in subpart E of this part.
    (c) The Local WDB must report to the State WDB, Governor, and 
relevant State agency when MOU negotiations with one-stop partners have 
reached an impasse.
    (1) The Local WDB and partners must document the negotiations and 
efforts that have taken place in the MOU. The State WDB, one-stop 
partner programs, and the Governor may consult with the appropriate 
Federal agencies to address impasse situations related to issues other 
than infrastructure funding after attempting to address the impasse. 
Impasses related to infrastructure cost funding must be resolved using 
the State infrastructure cost funding mechanism described in Sec.  
678.730.
    (2) The Local WDB must report failure to execute an MOU with a 
required partner to the Governor, State WDB, and the State agency 
responsible for administering the partner's program. Additionally, if 
the State cannot assist the Local WDB in resolving the impasse, the 
Governor or the State WDB must report the failure to the Secretary of 
Labor and to the head of any other Federal agency with responsibility 
for oversight of a partner's program.

[[Page 210]]



                      Subpart D_One-Stop Operators



Sec.  678.600  Who may operate one-stop centers?

    (a) One-stop operators may be a single entity (public, private, or 
nonprofit) or a consortium of entities. If the consortium of entities is 
one of one-stop partners, it must include a minimum of three of the one-
stop partners described in Sec.  678.400.
    (b) The one-stop operator may operate one or more one-stop centers. 
There may be more than one one-stop operator in a local area.
    (c) The types of entities that may be a one-stop operator include:
    (1) An institution of higher education;
    (2) An Employment Service State agency established under the Wagner-
Peyser Act;
    (3) A community-based organization, nonprofit organization, or 
workforce intermediary;
    (4) A private for-profit entity;
    (5) A government agency;
    (6) A Local WDB, with the approval of the chief elected official and 
the Governor; or
    (7) Another interested organization or entity, which is capable of 
carrying out the duties of the one-stop operator. Examples may include a 
local chamber of commerce or other business organization, or a labor 
organization.
    (d) Elementary schools and secondary schools are not eligible as 
one-stop operators, except that a nontraditional public secondary school 
such as a night school, adult school, or an area career and technical 
education school may be selected.
    (e) The State and Local WDBs must ensure that, in carrying out WIOA 
programs and activities, one-stop operators:
    (1) Disclose any potential conflicts of interest arising from the 
relationships of the operators with particular training service 
providers or other service providers (further discussed in Sec.  679.430 
of this chapter);
    (2) Do not establish practices that create disincentives to 
providing services to individuals with barriers to employment who may 
require longer-term career and training services; and
    (3) Comply with Federal regulations and procurement policies 
relating to the calculation and use of profits, including those at Sec.  
683.295 of this chapter, the Uniform Guidance at 2 CFR part 200, and 
other applicable regulations and policies.



Sec.  678.605  How is the one-stop operator selected?

    (a) Consistent with paragraphs (b) and (c) of this section, the 
Local WDB must select the one-stop operator through a competitive 
process, as required by sec. 121(d)(2)(A) of WIOA, at least once every 4 
years. A State may require, or a Local WDB may choose to implement, a 
competitive selection process more than once every 4 years.
    (b) In instances in which a State is conducting the competitive 
process described in paragraph (a) of this section, the State must 
follow the same policies and procedures it uses for procurement with 
non-Federal funds.
    (c) All other non-Federal entities, including subrecipients of a 
State (such as local areas), must use a competitive process based on 
local procurement policies and procedures and the principles of 
competitive procurement in the Uniform Guidance set out at 2 CFR 200.318 
through 200.326. All references to ``noncompetitive proposals'' in the 
Uniform Guidance at 2 CFR 200.320(f) will be read as ``sole source 
procurement'' for the purposes of implementing this section.
    (d) Entities must prepare written documentation explaining the 
determination concerning the nature of the competitive process to be 
followed in selecting a one-stop operator.



Sec.  678.610  When is the sole-source selection of one-stop 
operators appropriate, and how is it conducted?

    (a) States may select a one-stop operator through sole source 
selection when allowed under the same policies and procedures used for 
competitive procurement with non-Federal funds, while other non-Federal 
entities including subrecipients of a State (such as local areas) may 
select a one-stop operator through sole selection when consistent with 
local procurement policies and procedures and the Uniform Guidance set 
out at 2 CFR 200.320.

[[Page 211]]

    (b) In the event that sole source procurement is determined 
necessary and reasonable, in accordance with Sec.  678.605(c), written 
documentation must be prepared and maintained concerning the entire 
process of making such a selection.
    (c) Such sole source procurement must include appropriate conflict 
of interest policies and procedures. These policies and procedures must 
conform to the specifications in Sec.  679.430 of this chapter for 
demonstrating internal controls and preventing conflict of interest.
    (d) A Local WDB may be selected as a one-stop operator through sole 
source procurement only with agreement of the chief elected official in 
the local area and the Governor. The Local WDB must establish sufficient 
conflict of interest policies and procedures and these policies and 
procedures must be approved by the Governor.



Sec.  678.615  May an entity currently serving as one-stop operator
compete to be a one-stop operator under the procurement requirements
of this subpart?

    (a) Local WDBs may compete for and be selected as one-stop 
operators, as long as appropriate firewalls and conflict of interest 
policies and procedures are in place. These policies and procedures must 
conform to the specifications in Sec.  679.430 of this chapter for 
demonstrating internal controls and preventing conflict of interest.
    (b) State and local agencies may compete for and be selected as one-
stop operators by the Local WDB, as long as appropriate firewalls and 
conflict of interest policies and procedures are in place. These 
policies and procedures must conform to the specifications in Sec.  
679.430 of this chapter for demonstrating internal controls and 
preventing conflict of interest.
    (c) In the case of single-area States where the State WDB serves as 
the Local WDB, the State agency is eligible to compete for and be 
selected as operator as long as appropriate firewalls and conflict of 
interest policies are in place and followed for the competition. These 
policies and procedures must conform to the specifications in Sec.  
679.430 of this chapter for demonstrating internal controls and 
preventing conflicts of interest.



Sec.  678.620  What is the one-stop operator's role?

    (a) At a minimum, the one-stop operator must coordinate the service 
delivery of required one-stop partners and service providers. Local WDBs 
may establish additional roles of one-stop operator, including, but not 
limited to: Coordinating service providers across the one-stop delivery 
system, being the primary provider of services within the center, 
providing some of the services within the center, or coordinating 
service delivery in a multi-center area, which may include affiliated 
sites. The competition for a one-stop operator must clearly articulate 
the role of the one-stop operator.
    (b)(1) Subject to paragraph (b)(2) of this section, a one-stop 
operator may not perform the following functions: Convene system 
stakeholders to assist in the development of the local plan; prepare and 
submit local plans (as required under sec. 107 of WIOA); be responsible 
for oversight of itself; manage or significantly participate in the 
competitive selection process for one-stop operators; select or 
terminate one-stop operators, career services, and youth providers; 
negotiate local performance accountability measures; or develop and 
submit budget for activities of the Local WDB in the local area.
    (2) An entity serving as a one-stop operator, that also serves a 
different role within the one-stop delivery system, may perform some or 
all of these functions when it is acting in its other role, if it has 
established sufficient firewalls and conflict of interest policies and 
procedures. The policies and procedures must conform to the 
specifications in Sec.  679.430 of this chapter for demonstrating 
internal controls and preventing conflict of interest.



Sec.  678.625  Can a one-stop operator also be a service provider?

    Yes, but there must be appropriate firewalls in place in regards to 
the competition, and subsequent oversight,

[[Page 212]]

monitoring, and evaluation of performance of the service provider. The 
operator cannot develop, manage, or conduct the competition of a service 
provider in which it intends to compete. In cases where an operator is 
also a service provider, there must be firewalls and internal controls 
within the operator-service provider entity, as well as specific 
policies and procedures at the Local WDB level regarding oversight, 
monitoring, and evaluation of performance of the service provider. The 
firewalls must conform to the specifications in Sec.  679.430 of this 
chapter for demonstrating internal controls and preventing conflicts of 
interest.



Sec.  678.630  Can State merit staff still work in a one-stop
center where the operator is not a governmental entity?

    Yes. State merit staff can continue to perform functions and 
activities in the one-stop center. The Local WDB and one-stop operator 
must establish a system for management of merit staff in accordance with 
State policies and procedures. Continued use of State merit staff for 
the provision of Wagner-Peyser Act services or services from other 
programs with merit staffing requirements must be included in the 
competition for and final contract with the one-stop operator when 
Wagner-Peyser Act services or services from other programs with merit 
staffing requirements are being provided.



Sec.  678.635  What is the compliance date of the provisions of
this subpart?

    (a) No later than July 1, 2017, one-stop operators selected under 
the competitive process described in this subpart must be in place and 
operating the one-stop center.
    (b) By November 17, 2016, every Local WDB must demonstrate it is 
taking steps to prepare for competition of its one-stop operator. This 
demonstration may include, but is not limited to, market research, 
requests for information, and conducting a cost and price analysis.



                   Subpart E_One-Stop Operating Costs



Sec.  678.700  What are the one-stop infrastructure costs?

    (a) Infrastructure costs of one-stop centers are nonpersonnel costs 
that are necessary for the general operation of the one-stop center, 
including:
    (1) Rental of the facilities;
    (2) Utilities and maintenance;
    (3) Equipment (including assessment-related products and assistive 
technology for individuals with disabilities); and
    (4) Technology to facilitate access to the one-stop center, 
including technology used for the center's planning and outreach 
activities.
    (b) Local WDBs may consider common identifier costs as costs of one-
stop infrastructure.
    (c) Each entity that carries out a program or activities in a local 
one-stop center, described in Sec. Sec.  678.400 through 678.410, must 
use a portion of the funds available for the program and activities to 
maintain the one-stop delivery system, including payment of the 
infrastructure costs of one-stop centers. These payments must be in 
accordance with this subpart; Federal cost principles, which require 
that all costs must be allowable, reasonable, necessary, and allocable 
to the program; and all other applicable legal requirements.



Sec.  678.705  What guidance must the Governor issue regarding
one-stop infrastructure funding?

    (a) The Governor, after consultation with chief elected officials, 
the State WDB, and Local WDBs, and consistent with guidance and policies 
provided by the State WDB, must develop and issue guidance for use by 
local areas, specifically:
    (1) Guidelines for State-administered one-stop partner programs for 
determining such programs' contributions to a one-stop delivery system, 
based on such programs' proportionate use of such system, and relative 
benefit received, consistent with Office of Management and Budget (OMB) 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for

[[Page 213]]

Federal Awards in 2 CFR part 200, including determining funding for the 
costs of infrastructure; and
    (2) Guidance to assist Local WDBs, chief elected officials, and one-
stop partners in local areas in determining equitable and stable methods 
of funding the costs of infrastructure at one-stop centers based on 
proportionate use and relative benefit received, and consistent with 
Federal cost principles contained in the Uniform Guidance at 2 CFR part 
200.
    (b) The guidance must include:
    (1) The appropriate roles of the one-stop partner programs in 
identifying one-stop infrastructure costs;
    (2) Approaches to facilitate equitable and efficient cost allocation 
that results in a reasonable cost allocation methodology where 
infrastructure costs are charged to each partner based on its 
proportionate use of the one-stop centers and relative benefit received, 
consistent with Federal cost principles at 2 CFR part 200; and
    (3) The timelines regarding notification to the Governor for not 
reaching local agreement and triggering the State funding mechanism 
described in Sec.  678.730, and timelines for a one-stop partner to 
submit an appeal in the State funding mechanism.



Sec.  678.710  How are infrastructure costs funded?

    Infrastructure costs are funded either through the local funding 
mechanism described in Sec.  678.715 or through the State funding 
mechanism described in Sec.  678.730.



Sec.  678.715  How are one-stop infrastructure costs funded in the
local funding mechanism?

    (a) In the local funding mechanism, the Local WDB, chief elected 
officials, and one-stop partners agree to amounts and methods of 
calculating amounts each partner will contribute for one-stop 
infrastructure funding, include the infrastructure funding terms in the 
MOU, and sign the MOU. The local funding mechanism must meet all of the 
following requirements:
    (1) The infrastructure costs are funded through cash and fairly 
evaluated non-cash and third-party in-kind partner contributions and 
include any funding from philanthropic organizations or other private 
entities, or through other alternative financing options, to provide a 
stable and equitable funding stream for ongoing one-stop delivery system 
operations;
    (2) Contributions must be negotiated between one-stop partners, 
chief elected officials, and the Local WDB and the amount to be 
contributed must be included in the MOU;
    (3) The one-stop partner program's proportionate share of funding 
must be calculated in accordance with the Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal Awards 
in 2 CFR part 200 based upon a reasonable cost allocation methodology 
whereby infrastructure costs are charged to each partner in proportion 
to its use of the one-stop center, relative to benefits received. Such 
costs must also be allowable, reasonable, necessary, and allocable;
    (4) Partner shares must be periodically reviewed and reconciled 
against actual costs incurred, and adjusted to ensure that actual costs 
charged to any one-stop partners are proportionate to the use of the 
one-stop center and relative to the benefit received by the one-stop 
partners and their respective programs or activities.
    (b) In developing the section of the MOU on one-stop infrastructure 
funding described in Sec.  678.755, the Local WDB and chief elected 
officials will:
    (1) Ensure that the one-stop partners adhere to the guidance 
identified in Sec.  678.705 on one-stop delivery system infrastructure 
costs.
    (2) Work with one-stop partners to achieve consensus and informally 
mediate any possible conflicts or disagreements among one-stop partners.
    (3) Provide technical assistance to new one-stop partners and local 
grant recipients to ensure that those entities are informed and 
knowledgeable of the elements contained in the MOU and the one-stop 
infrastructure costs arrangement.
    (c) The MOU may include an interim infrastructure funding agreement, 
including as much detail as the Local WDB has negotiated with one-stop 
partners, if all other parts of the MOU have been negotiated, in order 
to allow

[[Page 214]]

the partner programs to operate in the one-stop centers. The interim 
infrastructure funding agreement must be finalized within 6 months of 
when the MOU is signed. If the interim infrastructure funding agreement 
is not finalized within that timeframe, the Local WDB must notify the 
Governor, as described in Sec.  678.725.



Sec.  678.720  What funds are used to pay for infrastructure 
costs in the local one-stop infrastructure funding mechanism?

    (a) In the local funding mechanism, one-stop partner programs may 
determine what funds they will use to pay for infrastructure costs. The 
use of these funds must be in accordance with the requirements in this 
subpart, and with the relevant partner's authorizing statutes and 
regulations, including, for example, prohibitions against supplanting 
non-Federal resources, statutory limitations on administrative costs, 
and all other applicable legal requirements. In the case of partners 
administering programs authorized by title I of WIOA, these 
infrastructure costs may be considered program costs. In the case of 
partners administering adult education and literacy programs authorized 
by title II of WIOA, these funds must include Federal funds made 
available for the local administration of adult education and literacy 
programs authorized by title II of WIOA. These funds may also include 
non-Federal resources that are cash, in-kind or third-party 
contributions. In the case of partners administering the Carl D. Perkins 
Career and Technical Education Act of 2006, funds used to pay for 
infrastructure costs may include funds available for local 
administrative expenses, non-Federal resources that are cash, in-kind or 
third-party contributions, and may include other funds made available by 
the State.
    (b) There are no specific caps on the amount or percent of overall 
funding a one-stop partner may contribute to fund infrastructure costs 
under the local funding mechanism, except that contributions for 
administrative costs may not exceed the amount available for 
administrative costs under the authorizing statute of the partner 
program. However, amounts contributed for infrastructure costs must be 
allowable and based on proportionate use of the one-stop centers and 
relative benefit received by the partner program, taking into account 
the total cost of the one-stop infrastructure as well as alternate 
financing options, and must be consistent with 2 CFR part 200, including 
the Federal cost principles.
    (c) Cash, non-cash, and third-party in-kind contributions may be 
provided by one-stop partners to cover their proportionate share of 
infrastructure costs.
    (1) Cash contributions are cash funds provided to the Local WDB or 
its designee by one-stop partners, either directly or by an interagency 
transfer.
    (2) Non-cash contributions are comprised of--
    (i) Expenditures incurred by one-stop partners on behalf of the one-
stop center; and
    (ii) Non-cash contributions or goods or services contributed by a 
partner program and used by the one-stop center.
    (3) Non-cash contributions, especially those set forth in paragraph 
(c)(2)(ii) of this section, must be valued consistent with 2 CFR 200.306 
to ensure they are fairly evaluated and meet the partners' proportionate 
share.
    (4) Third-party in-kind contributions are:
    (i) Contributions of space, equipment, technology, non-personnel 
services, or other like items to support the infrastructure costs 
associated with one-stop operations, by a non-one-stop partner to 
support the one-stop center in general, not a specific partner; or
    (ii) Contributions by a non-one-stop partner of space, equipment, 
technology, non-personnel services, or other like items to support the 
infrastructure costs associated with one-stop operations, to a one-stop 
partner to support its proportionate share of one-stop infrastructure 
costs.
    (iii) In-kind contributions described in paragraphs (c)(4)(i) and 
(ii) of this section must be valued consistent with 2 CFR 200.306 and 
reconciled on a regular basis to ensure they are fairly evaluated and 
meet the proportionate share of the partner.
    (5) All partner contributions, regardless of the type, must be 
reconciled on

[[Page 215]]

a regular basis (i.e., monthly or quarterly), comparing actual expenses 
incurred to relative benefits received, to ensure each partner program 
is contributing its proportionate share in accordance with the terms of 
the MOU.



Sec.  678.725  What happens if consensus on infrastructure funding
is not reached at the local level between the Local Workforce 
Development Board, chief elected officials, and one-stop partners?

    With regard to negotiations for infrastructure funding for Program 
Year (PY) 2017 and for each subsequent program year thereafter, if the 
Local WDB, chief elected officials, and one-stop partners do not reach 
consensus on methods of sufficiently funding local infrastructure 
through the local funding mechanism in accordance with the Governor's 
guidance issued under Sec.  678.705 and consistent with the regulations 
in Sec. Sec.  678.715 and 678.720, and include that consensus agreement 
in the signed MOU, then the Local WDB must notify the Governor by the 
deadline established by the Governor under Sec.  678.705(b)(3). Once 
notified, the Governor must administer funding through the State funding 
mechanism, as described in Sec. Sec.  678.730 through 678.738, for the 
program year impacted by the local area's failure to reach consensus.



Sec.  678.730  What is the State one-stop infrastructure funding 
mechanism?

    (a) Consistent with sec. 121(h)(1)(A)(i)(II) of WIOA, if the Local 
WDB, chief elected official, and one-stop partners in a local area do 
not reach consensus agreement on methods of sufficiently funding the 
costs of infrastructure of one-stop centers for a program year, the 
State funding mechanism is applicable to the local area for that program 
year.
    (b) In the State funding mechanism, the Governor, subject to the 
limitations in paragraph (c) of this section, determines one-stop 
partner contributions after consultation with the chief elected 
officials, Local WDBs, and the State WDB. This determination involves:
    (1) The application of a budget for one-stop infrastructure costs as 
described in Sec.  678.735, based on either agreement reached in the 
local area negotiations or the State WDB formula outlined in Sec.  
678.745;
    (2) The determination of each local one-stop partner program's 
proportionate use of the one-stop delivery system and relative benefit 
received, consistent with the Uniform Guidance at 2 CFR part 200, 
including the Federal cost principles, the partner programs' authorizing 
laws and regulations, and other applicable legal requirements described 
in Sec.  678.736; and
    (3) The calculation of required statewide program caps on 
contributions to infrastructure costs from one-stop partner programs in 
areas operating under the State funding mechanism as described in Sec.  
678.738.
    (c) In certain situations, the Governor does not determine the 
infrastructure cost contributions for some one-stop partner programs 
under the State funding mechanism.
    (1) The Governor will not determine the contribution amounts for 
infrastructure funds for Native American program grantees described in 
part 684 of this chapter. The appropriate portion of funds to be 
provided by Native American program grantees to pay for one-stop 
infrastructure must be determined as part of the development of the MOU 
described in Sec.  678.500 and specified in that MOU.
    (2) In States in which the policy-making authority is placed in an 
entity or official that is independent of the authority of the Governor 
with respect to the funds provided for adult education and literacy 
activities authorized under title II of WIOA, postsecondary career and 
technical education activities authorized under the Carl D. Perkins 
Career and Technical Education Act of 2006, or VR services authorized 
under title I of the Rehabilitation Act of 1973 (other than sec. 112 or 
part C), as amended by WIOA title IV, the determination of the amount 
each of the applicable partners must contribute to assist in paying the 
infrastructure costs of one-stop centers must be made by the official or 
chief officer of the entity with such authority, in consultation with 
the Governor.
    (d) Any duty, ability, choice, responsibility, or other action 
otherwise related to the determination of infrastructure costs 
contributions that is

[[Page 216]]

assigned to the Governor in Sec. Sec.  678.730 through 678.745 also 
applies to this decision-making process performed by the official or 
chief officer described in paragraph (c)(2) of this section.



Sec.  678.731  What are the steps to determine the amount to be
paid under the State one-stop infrastructure funding mechanism?

    (a) To initiate the State funding mechanism, a Local WDB that has 
not reached consensus on methods of sufficiently funding local 
infrastructure through the local funding mechanism as provided in Sec.  
678.725 must notify the Governor by the deadline established by the 
Governor under Sec.  678.705(b)(3).
    (b) Once a Local WDB has informed the Governor that no consensus has 
been reached:
    (1) The Local WDB must provide the Governor with local negotiation 
materials in accordance with Sec.  678.735(a).
    (2) The Governor must determine the one-stop center budget by 
either:
    (i) Accepting a budget previously agreed upon by partner programs in 
the local negotiations, in accordance with Sec.  678.735(b)(1); or
    (ii) Creating a budget for the one-stop center using the State WDB 
formula (described in Sec.  678.745) in accordance with Sec.  
678.735(b)(3).
    (3) The Governor then must establish a cost allocation methodology 
to determine the one-stop partner programs' proportionate shares of 
infrastructure costs, in accordance with Sec.  678.736.
    (4)(i) Using the methodology established under paragraph (b)(2)(ii) 
of this section, and taking into consideration the factors concerning 
individual partner programs listed in Sec.  678.737(b)(2), the Governor 
must determine each partner's proportionate share of the infrastructure 
costs, in accordance with Sec.  678.737(b)(1), and
    (ii) In accordance with Sec.  678.730(c), in some instances, the 
Governor does not determine a partner program's proportionate share of 
infrastructure funding costs, in which case it must be determined by the 
entities named in Sec.  678.730(c)(1) and (2).
    (5) The Governor must then calculate the statewide caps on the 
amounts that partner programs may be required to contribute toward 
infrastructure funding, according to the steps found at Sec.  
678.738(a)(1) through (4).
    (6) The Governor must ensure that the aggregate total of the 
infrastructure contributions according to proportionate share required 
of all local partner programs in local areas under the State funding 
mechanism do not exceed the cap for that particular program, in 
accordance with Sec.  678.738(b)(1). If the total does not exceed the 
cap, the Governor must direct each one-stop partner program to pay the 
amount determined under Sec.  678.737(a) toward the infrastructure 
funding costs of the one-stop center. If the total does exceed the cap, 
then to determine the amount to direct each one-stop program to pay, the 
Governor may:
    (i) Ascertain, in accordance with Sec.  678.738(b)(2)(i), whether 
the local partner or partners whose proportionate shares are calculated 
above the individual program caps are willing to voluntarily contribute 
above the capped amount to equal that program's proportionate share; or
    (ii) Choose from the options provided in Sec.  678.738(b)(2)(ii), 
including having the local area re-enter negotiations to reassess each 
one-stop partner's proportionate share and make adjustments or identify 
alternate sources of funding to make up the difference between the 
capped amount and the proportionate share of infrastructure funding of 
the one-stop partner.
    (7) If none of the solutions given in paragraphs (b)(6)(i) and (ii) 
of this section prove to be viable, the Governor must reassess the 
proportionate shares of each one-stop partner so that the aggregate 
amount attributable to the local partners for each program is less than 
that program's cap amount. Upon such reassessment, the Governor must 
direct each one-stop partner program to pay the reassessed amount toward 
the infrastructure funding costs of the one-stop center.



Sec.  678.735  How are infrastructure cost budgets for the
one-stop centers in a local area determined in the State one-stop
infrastructure funding mechanism?

    (a) Local WDBs must provide to the Governor appropriate and relevant 
materials and documents used in the negotiations under the local funding

[[Page 217]]

mechanism, including but not limited to: The local WIOA plan, the cost 
allocation method or methods proposed by the partners to be used in 
determining proportionate share, the proposed amounts or budget to fund 
infrastructure, the amount of total partner funds included, the type of 
funds or non-cash contributions, proposed one-stop center budgets, and 
any agreed upon or proposed MOUs.
    (b)(1) If a local area has reached agreement as to the 
infrastructure budget for the one-stop centers in the local area, it 
must provide this budget to the Governor as required by paragraph (a) of 
this section. If, as a result of the agreed upon infrastructure budget, 
only the individual programmatic contributions to infrastructure funding 
based upon proportionate use of the one-stop centers and relative 
benefit received are at issue, the Governor may accept the budget, from 
which the Governor must calculate each partner's contribution consistent 
with the cost allocation methodologies contained in the Uniform Guidance 
found in 2 CFR part 200, as described in Sec.  678.736.
    (2) The Governor may also take into consideration the extent to 
which the partners in the local area have agreed in determining the 
proportionate shares, including any agreements reached at the local 
level by one or more partners, as well as any other element or product 
of the negotiating process provided to the Governor as required by 
paragraph (a) of this section.
    (3) If a local area has not reached agreement as to the 
infrastructure budget for the one-stop centers in the local area, or if 
the Governor determines that the agreed upon budget does not adequately 
meet the needs of the local area or does not reasonably work within the 
confines of the local area's resources in accordance with the Governor's 
one-stop budget guidance (which is required to be issued by WIOA sec. 
121(h)(1)(B) and under Sec.  678.705), then, in accordance with Sec.  
678.745, the Governor must use the formula developed by the State WDB 
based on at least the factors required under Sec.  678.745, and any 
associated weights to determine the local area budget.



Sec.  678.736  How does the Governor establish a cost allocation
methodology used to determine the one-stop partner programs' 
proportionate shares of infrastructure costs under the State 
one-stop infrastructure funding mechanism?

    Once the appropriate budget is determined for a local area through 
either method described in Sec.  678.735 (by acceptance of a budget 
agreed upon in local negotiation or by the Governor applying the formula 
detailed in Sec.  678.745), the Governor must determine the appropriate 
cost allocation methodology to be applied to the one-stop partners in 
such local area, consistent with the Federal cost principles permitted 
under 2 CFR part 200, to fund the infrastructure budget.



Sec.  678.737  How are one-stop partner programs' proportionate
shares of infrastructure costs determined under the State one-stop
infrastructure funding 
          mechanism?

    (a) The Governor must direct the one-stop partners in each local 
area that have not reached agreement under the local funding mechanism 
to pay what the Governor determines is each partner program's 
proportionate share of infrastructure funds for that area, subject to 
the application of the caps described in Sec.  678.738.
    (b)(1) The Governor must use the cost allocation methodology--as 
determined under Sec.  678.736--to determine each partner's 
proportionate share of the infrastructure costs under the State funding 
mechanism, subject to considering the factors described in paragraph 
(b)(2) of this section.
    (2) In determining each partner program's proportionate share of 
infrastructure costs, the Governor must take into account the costs of 
administration of the one-stop delivery system for purposes not related 
to one-stop centers for each partner (such as costs associated with 
maintaining the Local WDB or information technology systems), as well as 
the statutory requirements for each partner program, the partner 
program's ability to fulfill such requirements, and all other applicable 
legal requirements. The Governor may also take into consideration the 
extent to which the partners in the local area have agreed in 
determining

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the proportionate shares, including any agreements reached at the local 
level by one or more partners, as well as any other materials or 
documents of the negotiating process, which must be provided to the 
Governor by the Local WDB and described in Sec.  678.735(a).



Sec.  678.738  How are statewide caps on the contributions for
one-stop infrastructure funding determined in the State one-stop 
infrastructure funding mechanism?

    (a) The Governor must calculate the statewide cap on the 
contributions for one-stop infrastructure funding required to be 
provided by each one-stop partner program for those local areas that 
have not reached agreement. The cap is the amount determined under 
paragraph (a)(4) of this section, which the Governor derives by:
    (1) First, determining the amount resulting from applying the 
percentage for the corresponding one-stop partner program provided in 
paragraph (d) of this section to the amount of Federal funds provided to 
carry out the one-stop partner program in the State for the applicable 
fiscal year;
    (2) Second, selecting a factor (or factors) that reasonably 
indicates the use of one-stop centers in the State, applying such 
factor(s) to all local areas in the State, and determining the 
percentage of such factor(s) applicable to the local areas that reached 
agreement under the local funding mechanism in the State;
    (3) Third, determining the amount resulting from applying the 
percentage determined in paragraph (a)(2) of this section to the amount 
determined under paragraph (a)(1) of this section for the one-stop 
partner program; and
    (4) Fourth, determining the amount that results from subtracting the 
amount determined under paragraph (a)(3) of this section from the amount 
determined under paragraph (a)(1) of this section. The outcome of this 
final calculation results in the partner program's cap.
    (b)(1) The Governor must ensure that the funds required to be 
contributed by each partner program in the local areas in the State 
under the State funding mechanism, in aggregate, do not exceed the 
statewide cap for each program as determined under paragraph (a) of this 
section.
    (2) If the contributions initially determined under Sec.  678.737 
would exceed the applicable cap determined under paragraph (a) of this 
section, the Governor may:
    (i) Ascertain if the one-stop partner whose contribution would 
otherwise exceed the cap determined under paragraph (a) of this section 
will voluntarily contribute above the capped amount, so that the total 
contributions equal that partner's proportionate share. The one-stop 
partner's contribution must still be consistent with the program's 
authorizing laws and regulations, the Federal cost principles in 2 CFR 
part 200, and other applicable legal requirements; or
    (ii) Direct or allow the Local WDB, chief elected officials, and 
one-stop partners to: Re-enter negotiations, as necessary; reduce the 
infrastructure costs to reflect the amount of funds that are available 
for such costs without exceeding the cap levels; reassess the 
proportionate share of each one-stop partner; or identify alternative 
sources of financing for one-stop infrastructure funding, consistent 
with the requirement that each one-stop partner pay an amount that is 
consistent with the proportionate use of the one-stop center and 
relative benefit received by the partner, the program's authorizing laws 
and regulations, the Federal cost principles in 2 CFR part 200, and 
other applicable legal requirements.
    (3) If applicable under paragraph (b)(2)(ii) of this section, the 
Local WDB, chief elected officials, and one-stop partners, after 
renegotiation, may come to agreement, sign an MOU, and proceed under the 
local funding mechanism. Such actions do not require the redetermination 
of the applicable caps under paragraph (a) of this section.
    (4) If, after renegotiation, agreement among partners still cannot 
be reached or alternate financing cannot be identified, the Governor may 
adjust the specified allocation, in accordance with the amounts 
available and the limitations

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described in paragraph (d) of this section. In determining these 
adjustments, the Governor may take into account information relating to 
the renegotiation as well as the information described in Sec.  
678.735(a).
    (c) Limitations. Subject to paragraph (a) of this section and in 
accordance with WIOA sec. 121(h)(2)(D), the following limitations apply 
to the Governor's calculations of the amount that one-stop partners in 
local areas that have not reached agreement under the local funding 
mechanism may be required under Sec.  678.736 to contribute to one-stop 
infrastructure funding:
    (1) WIOA formula programs and Wagner-Peyser Act Employment Service. 
The portion of funds required to be contributed under the WIOA youth, 
adult, or dislocated worker programs, or under the Wagner-Peyser Act (29 
U.S.C. 49 et seq.) must not exceed three percent of the amount of the 
program in the State for a program year.
    (2) Other one-stop partners. For required one-stop partners other 
than those specified in paragraphs (c)(1), (3), (5), and (6) of this 
section, the portion of funds required to be contributed must not exceed 
1.5 percent of the amount of Federal funds provided to carry out that 
program in the State for a fiscal year. For purposes of the Carl D. 
Perkins Career and Technical Education Act of 2006, the cap on 
contributions is determined based on the funds made available by the 
State for postsecondary level programs and activities under sec. 132 of 
the Carl D. Perkins Career and Technical Education Act and the amount of 
funds used by the State under sec. 112(a)(3) of the Perkins Act during 
the prior year to administer postsecondary level programs and 
activities, as applicable.
    (3) Vocational rehabilitation. (i) Within a State, for the entity or 
entities administering the programs described in WIOA sec. 
121(b)(1)(B)(iv) and Sec.  678.400, the allotment is based on the one 
State Federal fiscal year allotment, even in instances where that 
allotment is shared between two State agencies, and the cumulative 
portion of funds required to be contributed must not exceed--
    (A) 0.75 percent of the amount of Federal funds provided to carry 
out such program in the State for Fiscal Year 2016 for purposes of 
applicability of the State funding mechanism for PY 2017;
    (B) 1.0 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2017 for purposes of applicability of the 
State funding mechanism for PY 2018;
    (C) 1.25 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2018 for purposes of applicability of the 
State funding mechanism for PY 2019;
    (D) 1.5 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2019 and following years for purposes of 
applicability of the State funding mechanism for PY 2020 and subsequent 
years.
    (ii) The limitations set forth in paragraph (d)(3)(i) of this 
section for any given fiscal year must be based on the final VR 
allotment to the State in the applicable Federal fiscal year.
    (4) Federal direct spending programs. For local areas that have not 
reached a one-stop infrastructure funding agreement by consensus, an 
entity administering a program funded with direct Federal spending, as 
defined in sec. 250(c)(8) of the Balanced Budget and Emergency Deficit 
Control Act of 1985, as in effect on February 15, 2014 (2 U.S.C. 
900(c)(8)), must not be required to provide more for infrastructure 
costs than the amount that the Governor determined (as described in 
Sec.  678.737).
    (5) TANF programs. For purposes of TANF, the cap on contributions is 
determined based on the total Federal TANF funds expended by the State 
for work, education, and training activities during the prior Federal 
fiscal year (as reported to the Department of Health and Human Services 
(HHS) on the quarterly TANF Financial Report form), plus any additional 
amount of Federal TANF funds that the State TANF agency reasonably 
determines was expended for administrative costs in connection with 
these activities but that was separately reported to HHS as an 
administrative cost. The State's contribution to the one-stop 
infrastructure must not exceed 1.5 percent of these combined 
expenditures.
    (6) Community Services Block Grant (CSBG) programs. For purposes of

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CSBG, the cap on contributions will be based on the total amount of CSBG 
funds determined by the State to have been expended by local CSBG-
eligible entities for the provision of employment and training 
activities during the prior Federal fiscal year for which information is 
available (as reported to HHS on the CSBG Annual Report) and any 
additional amount that the State CSBG agency reasonably determines was 
expended for administrative purposes in connection with these activities 
and was separately reported to HHS as an administrative cost. The 
State's contribution must not exceed 1.5 percent of these combined 
expenditures.
    (d) For programs for which it is not otherwise feasible to determine 
the amount of Federal funding used by the program until the end of that 
program's operational year--because, for example, the funding available 
for education, employment, and training activities is included within 
funding for the program that may also be used for other unrelated 
activities--the determination of the Federal funds provided to carry out 
the program for a fiscal year under paragraph (a)(1) of this section may 
be determined by:
    (1) The percentage of Federal funds available to the one-stop 
partner program that were used by the one-stop partner program for 
education, employment, and training activities in the previous fiscal 
year for which data are available; and
    (2) Applying the percentage determined under paragraph (d)(1) of 
this section to the total amount of Federal funds available to the one-
stop partner program for the fiscal year for which the determination 
under paragraph (a)(1) of this section applies.



Sec.  678.740  What funds are used to pay for infrastructure costs
in the State one-stop infrastructure funding mechanism?

    (a) In the State funding mechanism, infrastructure costs for WIOA 
title I programs, including Native American Programs described in part 
684 of this chapter, may be paid using program funds, administrative 
funds, or both. Infrastructure costs for the Senior Community Service 
Employment Program under title V of the Older Americans Act (42 U.S.C. 
3056 et seq.) may also be paid using program funds, administrative 
funds, or both.
    (b) In the State funding mechanism, infrastructure costs for other 
required one-stop partner programs (listed in Sec. Sec.  678.400 through 
678.410) are limited to the program's administrative funds, as 
appropriate.
    (c) In the State funding mechanism, infrastructure costs for the 
adult education program authorized by title II of WIOA must be paid from 
the funds that are available for local administration and may be paid 
from funds made available by the State or non-Federal resources that are 
cash, in-kind, or third-party contributions.
    (d) In the State funding mechanism, infrastructure costs for the 
Carl D. Perkins Career and Technical Education Act of 2006 must be paid 
from funds available for local administration of postsecondary level 
programs and activities to eligible recipients or consortia of eligible 
recipients and may be paid from funds made available by the State or 
non-Federal resources that are cash, in-kind, or third-party 
contributions.



Sec.  678.745  What factors does the State Workforce Development
Board use to develop the formula described in Workforce Innovation 
and Opportunity Act, which is used by the Governor to determine the
appropriate one-stop infrastructure budget for each local area 
operating under the State infrastructure funding mechanism,
if no reasonably implementable locally negotiated budget exists?

    The State WDB must develop a formula, as described in WIOA sec. 
121(h)(3)(B), to be used by the Governor under Sec.  678.735(b)(3) in 
determining the appropriate budget for the infrastructure costs of one-
stop centers in the local areas that do not reach agreement under the 
local funding mechanism and are, therefore, subject to the State funding 
mechanism. The formula identifies the factors and corresponding weights 
for each factor that the Governor must use, which must include: The 
number of one-stop centers in a local area; the population served by 
such centers; the services provided

[[Page 221]]

by such centers; and any factors relating to the operations of such 
centers in the local area that the State WDB determines are appropriate. 
As indicated in Sec.  678.735(b)(1), if the local area has agreed on 
such a budget, the Governor may accept that budget in lieu of applying 
the formula factors.



Sec.  678.750  When and how can a one-stop partner appeal a
one-stop infrastructure amount designated by the State under 
the State infrastructure funding mechanism?

    (a) The Governor must establish a process, described under sec. 
121(h)(2)(E) of WIOA, for a one-stop partner administering a program 
described in Sec. Sec.  678.400 through 678.410 to appeal the Governor's 
determination regarding the one-stop partner's portion of funds to be 
provided for one-stop infrastructure costs. This appeal process must be 
described in the Unified State Plan.
    (b) The appeal may be made on the ground that the Governor's 
determination is inconsistent with proportionate share requirements in 
Sec.  678.735(a), the cost contribution limitations in Sec.  678.735(b), 
the cost contribution caps in Sec.  678.738, consistent with the process 
described in the State Plan.
    (c) The process must ensure prompt resolution of the appeal in order 
to ensure the funds are distributed in a timely manner, consistent with 
the requirements of Sec.  683.630 of this chapter.
    (d) The one-stop partner must submit an appeal in accordance with 
State's deadlines for appeals specified in the guidance issued under 
Sec.  678.705(b)(3), or if the State has not set a deadline, within 21 
days from the Governor's determination.



Sec.  678.755  What are the required elements regarding 
infrastructure funding that must be included in the one-stop 
Memorandum of Understanding?

    The MOU, fully described in Sec.  678.500, must contain the 
following information whether the local areas use either the local one-
stop or the State funding method:
    (a) The period of time in which this infrastructure funding 
agreement is effective. This may be a different time period than the 
duration of the MOU.
    (b) Identification of an infrastructure and shared services budget 
that will be periodically reconciled against actual costs incurred and 
adjusted accordingly to ensure that it reflects a cost allocation 
methodology that demonstrates how infrastructure costs are charged to 
each partner in proportion to its use of the one-stop center and 
relative benefit received, and that complies with 2 CFR part 200 (or any 
corresponding similar regulation or ruling).
    (c) Identification of all one-stop partners, chief elected 
officials, and Local WDB participating in the infrastructure funding 
arrangement.
    (d) Steps the Local WDB, chief elected officials, and one-stop 
partners used to reach consensus or an assurance that the local area 
followed the guidance for the State funding process.
    (e) Description of the process to be used among partners to resolve 
issues during the MOU duration period when consensus cannot be reached.
    (f) Description of the periodic modification and review process to 
ensure equitable benefit among one-stop partners.



Sec.  678.760  How do one-stop partners jointly fund other shared
costs under the Memorandum of Understanding?

    (a) In addition to jointly funding infrastructure costs, one-stop 
partners listed in Sec. Sec.  678.400 through 678.410 must use a portion 
of funds made available under their programs' authorizing Federal law 
(or fairly evaluated in-kind contributions) to pay the additional costs 
relating to the operation of the one-stop delivery system. These other 
costs must include applicable career services and may include other 
costs, including shared services.
    (b) For the purposes of paragraph (a) of this section, shared 
services' costs may include the costs of shared services that are 
authorized for and may be commonly provided through the one-stop partner 
programs to any individual, such as initial intake, assessment of needs, 
appraisal of basic skills, identification of appropriate services to 
meet such needs, referrals to other one-stop partners, and business 
services. Shared operating costs may also

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include shared costs of the Local WDB's functions.
    (c) Contributions to the additional costs related to operation of 
the one-stop delivery system may be cash, non-cash, or third-party in-
kind contributions, consistent with how these are described in Sec.  
678.720(c).
    (d) The shared costs described in paragraph (a) of this section must 
be allocated according to the proportion of benefit received by each of 
the partners, consistent with the Federal law authorizing the partner's 
program, and consistent with all other applicable legal requirements, 
including Federal cost principles in 2 CFR part 200 (or any 
corresponding similar regulation or ruling) requiring that costs are 
allowable, reasonable, necessary, and allocable.
    (e) Any shared costs agreed upon by the one-stop partners must be 
included in the MOU.



                    Subpart F_One-Stop Certification



Sec.  678.800  How are one-stop centers and one-stop delivery
systems certified for effectiveness, physical and programmatic 
accessibility, and continuous improvement?

    (a) The State WDB, in consultation with chief elected officials and 
Local WDBs, must establish objective criteria and procedures for Local 
WDBs to use when certifying one-stop centers.
    (1) The State WDB, in consultation with chief elected officials and 
Local WDBs, must review and update the criteria every 2 years as part of 
the review and modification of State Plans pursuant to Sec.  676.135 of 
this chapter.
    (2) The criteria must be consistent with the Governor's and State 
WDB's guidelines, guidance, and policies on infrastructure funding 
decisions, described in Sec.  678.705. The criteria must evaluate the 
one-stop centers and one-stop delivery system for effectiveness, 
including customer satisfaction, physical and programmatic 
accessibility, and continuous improvement.
    (3) When the Local WDB is the one-stop operator as described in 
Sec.  679.410 of this chapter, the State WDB must certify the one-stop 
center.
    (b) Evaluations of effectiveness must include how well the one-stop 
center integrates available services for participants and businesses, 
meets the workforce development needs of participants and the employment 
needs of local employers, operates in a cost-efficient manner, 
coordinates services among the one-stop partner programs, and provides 
access to partner program services to the maximum extent practicable, 
including providing services outside of regular business hours where 
there is a workforce need, as identified by the Local WDB. These 
evaluations must take into account feedback from one-stop customers. 
They must also include evaluations of how well the one-stop center 
ensures equal opportunity for individuals with disabilities to 
participate in or benefit from one-stop center services. These 
evaluations must include criteria evaluating how well the centers and 
delivery systems take actions to comply with the disability-related 
regulations implementing WIOA sec. 188, set forth at 29 CFR part 38. 
Such actions include, but are not limited to:
    (1) Providing reasonable accommodations for individuals with 
disabilities;
    (2) Making reasonable modifications to policies, practices, and 
procedures where necessary to avoid discrimination against persons with 
disabilities;
    (3) Administering programs in the most integrated setting 
appropriate;
    (4) Communicating with persons with disabilities as effectively as 
with others;
    (5) Providing appropriate auxiliary aids and services, including 
assistive technology devices and services, where necessary to afford 
individuals with disabilities an equal opportunity to participate in, 
and enjoy the benefits of, the program or activity; and
    (6) Providing for the physical accessibility of the one-stop center 
to individuals with disabilities.
    (c) Evaluations of continuous improvement must include how well the 
one-stop center supports the achievement of the negotiated local levels 
of performance for the indicators of performance for the local area 
described in sec. 116(b)(2) of WIOA and part 677 of this chapter. Other 
continuous improvement factors may include a regular process for 
identifying and responding to technical assistance needs,

[[Page 223]]

a regular system of continuing professional staff development, and 
having systems in place to capture and respond to specific customer 
feedback.
    (d) Local WDBs must assess at least once every 3 years the 
effectiveness, physical and programmatic accessibility, and continuous 
improvement of one-stop centers and the one-stop delivery systems using 
the criteria and procedures developed by the State WDB. The Local WDB 
may establish additional criteria, or set higher standards for service 
coordination, than those set by the State criteria. Local WDBs must 
review and update the criteria every 2 years as part of the Local Plan 
update process described in Sec.  676.580 of this chapter. Local WDBs 
must certify one-stop centers in order to be eligible to use 
infrastructure funds in the State funding mechanism described in Sec.  
678.730.
    (e) All one-stop centers must comply with applicable physical and 
programmatic accessibility requirements, as set forth in 29 CFR part 38, 
the implementing regulations of WIOA sec. 188.



                       Subpart G_Common Identifier



Sec.  678.900  What is the common identifier to be used by
each one-stop delivery system?

    (a) The common one-stop delivery system identifier is ``American Job 
Center.''
    (b) As of November 17, 2016, each one-stop delivery system must 
include the ``American Job Center'' identifier or ``a proud partner of 
the American Job Center network'' on all primary electronic resources 
used by thONTENTSe one-stop delivery system, and on any newly 
printed, purchased, or created materials.
    (c) As of July 1, 2017, each one-stop delivery system must include 
the ``American Job Center'' identifier or ``a proud partner of the 
American Job Center network'' on all products, programs, activities, 
services, electronic resources, facilities, and related property and new 
materials used in the one-stop delivery system.
    (d) One-stop partners, States, or local areas may use additional 
identifiers on their products, programs, activities, services, 
facilities, and related property and materials.




PART 679_STATEWIDE AND LOCAL GOVERNANCE OF THE WORKFORCE DEVELOPMENT
SYSTEM UNDER TITLE I OF THE WORKFORCE INNOVATION AND OPPORTUNITY ACT
--Table of Contents



               Subpart A_State Workforce Development Board

Sec.
679.100 What is the purpose of the State Workforce Development Board?
679.110 What is the State Workforce Development Board?
679.120 What is meant by the terms ``optimum policy-making authority'' 
          and ``demonstrated experience and expertise''?
679.130 What are the functions of the State Workforce Development Board?
679.140 How does the State Workforce Development Board meet its 
          requirement to conduct business in an open manner under 
          ``sunshine provision'' of the Workforce Innovation and 
          Opportunity Act?
679.150 Under what circumstances may the Governor select an alternative 
          entity in place of the State Workforce Development Board?
679.160 Under what circumstances may the State Workforce Development 
          Board hire staff?

  Subpart B_Workforce Innovation and Opportunity Act Local Governance 
                      (Workforce Development Areas)

679.200 What is the purpose of requiring States to identify regions?
679.210 What are the requirements for identifying a region?
679.220 What is the purpose of the local area?
679.230 What are the general procedural requirements for designation of 
          local areas?
679.240 What are the substantive requirements for designation of local 
          areas that were not designated as local areas under the 
          Workforce Investment Act of 1998?
679.250 What are the requirements for initial and subsequent designation 
          of workforce development areas that had been designated as 
          local areas under the Workforce Investment Act of 1998?
679.260 What do the terms ``performed successfully'' and ``sustained 
          fiscal integrity'' mean for purposes of designating local 
          areas?
679.270 What are the special designation provisions for single-area 
          States?

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679.280 How does the State fulfill the requirement to provide assistance 
          to local areas within a planning region that wish to 
          redesignate into a single local area?
679.290 What right does an entity have to appeal the Governor's decision 
          rejecting a request for designation as a workforce development 
          area?

              Subpart C_Local Workforce Development Boards

679.300 What is the vision and purpose of the Local Workforce 
          Development Board?
679.310 What is the Local Workforce Development Board?
679.320 Who are the required members of the Local Workforce Development 
          Board?
679.330 Who must chair a Local Workforce Development Board?
679.340 What is meant by the terms ``optimum policy-making authority'' 
          and ``demonstrated experience and expertise''?
679.350 What criteria will be used to establish the membership of the 
          Local Workforce Development Board?
679.360 What is a standing committee, and what is its relationship to 
          the Local Workforce Development Board?
679.370 What are the functions of the Local Workforce Development Board?
679.380 How does the Local Workforce Development Board satisfy the 
          consumer choice requirements for career services and training 
          services?
679.390 How does the Local Workforce Development Board meet its 
          requirement to conduct business in an open manner under the 
          ``sunshine provision'' of the Workforce Innovation and 
          Opportunity Act?
679.400 Who are the staff to the Local Workforce Development Board and 
          what is their role?
679.410 Under what conditions may a Local Workforce Development Board 
          directly be a provider of career services, or training 
          services, or act as a one-stop operator?
679.420 What are the functions of the local fiscal agent?
679.430 How do entities performing multiple functions in a local area 
          demonstrate internal controls and prevent conflict of 
          interest?

                    Subpart D_Regional and Local Plan

679.500 What is the purpose of the regional and local plan?
679.510 What are the requirements for regional planning?
679.520 What are the requirements for approval of a regional plan?
679.530 When must the regional plan be modified?
679.540 How are local planning requirements reflected in a regional 
          plan?
679.550 What are the requirements for the development of the local plan?
679.560 What are the contents of the local plan?
679.570 What are the requirements for approval of a local plan?
679.580 When must the local plan be modified?

         Subpart E_Waivers/WorkFlex (Workforce Flexibility Plan)

679.600 What is the purpose of the general statutory and regulatory 
          waiver authority in the Workforce Innovation and Opportunity 
          Act?
679.610 What provisions of the Workforce Innovation and Opportunity Act 
          and the Wagner-Peyser Act may be waived, and what provisions 
          may not be waived?
679.620 Under what conditions may a Governor request, and the Secretary 
          approve, a general waiver of statutory or regulatory 
          requirements under the Workforce Innovation and Opportunity 
          Act?
679.630 Under what conditions may the Governor submit a workforce 
          flexibility plan?
679.640 What limitations apply to the State's workforce flexibility plan 
          authority under the Workforce Innovation and Opportunity Act?

    Authority: Secs. 101, 106, 107, 108, 189, 503, Public Law 113-128, 
128 Stat. 1425 (Jul. 22, 2014).

    Source: 81 FR 56371, Aug. 19, 2016, unless otherwise noted.



               Subpart A_State Workforce Development Board



Sec.  679.100  What is the purpose of the State Workforce Development Board?

    The purpose of the State Workforce Development Board (WDB) is to 
convene State, regional, and local workforce system and partners, to--
    (a) Enhance the capacity and performance of the workforce 
development system;
    (b) Align and improve the outcomes and effectiveness of Federally-
funded and other workforce programs and investments; and
    (c) Through these efforts, promote economic growth.
    (d) Engage public workforce system representatives, including 
businesses, education providers, economic development, labor 
representatives, and other

[[Page 225]]

stakeholders to help the workforce development system achieve the 
purpose of the Workforce Innovation and Opportunity Act (WIOA); and
    (e) Assist to achieve the State's strategic and operational vision 
and goals as outlined in the State Plan.



Sec.  679.110  What is the State Workforce Development Board?

    (a) The State WDB is a board established by the Governor in 
accordance with the requirements of WIOA sec. 101 and this section.
    (b) The membership of the State WDB must meet the requirements of 
WIOA sec. 101(b) and must represent diverse geographic areas of the 
State, including urban, rural, and suburban areas. The WDB membership 
must include:
    (1) The Governor;
    (2) A member of each chamber of the State legislature, appointed by 
the appropriate presiding officers of such chamber, as appropriate under 
State law; and
    (3) Members appointed by the Governor, which must include:
    (i) A majority of representatives of businesses or organizations in 
the State who:
    (A) Are the owner or chief executive officer for the business or 
organization, or is an executive with the business or organization with 
optimum policy-making or hiring authority, and also may be members of a 
Local WDB as described in WIOA sec. 107(b)(2)(A)(i);
    (B) Represent businesses, or organizations that represent businesses 
described in paragraph (b)(3)(i) of this section, that, at a minimum, 
provide employment and training opportunities that include high-quality, 
work-relevant training and development in in-demand industry sectors or 
occupations in the State; and
    (C) Are appointed from a list of potential members nominated by 
State business organizations and business trade associations; and
    (D) At a minimum, one member representing small businesses as 
defined by the U.S. Small Business Administration.
    (ii) Not less than 20 percent who are representatives of the 
workforce within the State, which:
    (A) Must include two or more representatives of labor organizations 
nominated by State labor federations;
    (B) Must include one representative who must be a member of a labor 
organization or training director from a joint labor-management 
registered apprenticeship program, or, if no such joint program exists 
in the State, a member of a labor organization or training director who 
is a representative of an registered apprenticeship program;
    (C) May include one or more representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of individuals 
with barriers to employment, including organizations that serve veterans 
or provide or support competitive, integrated employment for individuals 
with disabilities; and
    (D) May include one or more representatives of organizations that 
have demonstrated experience and expertise in addressing the employment, 
training, or education needs of eligible youth, including 
representatives of organizations that serve out-of-school youth.
    (iii) The balance of the members:
    (A) Must include representatives of the Government including:
    (1) The lead State officials with primary responsibility for the 
following core programs--
    (i) The adult, dislocated worker, and youth programs authorized 
under title I of WIOA and the Wagner-Peyser Act;
    (ii) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA; and
    (iii) The State Vocational Rehabilitation (VR) program authorized 
under the Rehabilitation Act of 1973, as amended by title IV of WIOA.
    (iv) Where the lead official represents more than one core program, 
that official must ensure adequate representation of the needs of all 
core programs under his or her jurisdiction.
    (2) Two or more chief elected officials (collectively representing 
both cities and counties, where appropriate).
    (B) May include other appropriate representatives and officials 
designated

[[Page 226]]

by the Governor, such as, but not limited to, State agency officials 
responsible for one-stop partner programs, economic development or 
juvenile justice programs in the State, individuals who represent an 
Indian tribe or tribal organization as defined in WIOA sec. 166(b), and 
State agency officials responsible for education programs in the State, 
including chief executive officers of community colleges and other 
institutions of higher education.
    (c) The Governor must select a chairperson for the State WDB from 
the business representatives on the WDB described in paragraph (b)(3)(i) 
of this section).
    (d) The Governor must establish by-laws that at a minimum address:
    (1) The nomination process used by the Governor to select the State 
WDB chair and members;
    (2) The term limitations and how the term appointments will be 
staggered to ensure only a portion of membership expire in a given year;
    (3) The process to notify the Governor of a WDB member vacancy to 
ensure a prompt nominee;
    (4) The proxy and alternative designee process that will be used 
when a WDB member is unable to attend a meeting and assigns a designee 
as per the following requirements:
    (i) If the alternative designee is a business representative, he or 
she must have optimum policy-making hiring authority.
    (ii) Other alternative designees must have demonstrated experience 
and expertise and optimum policy-making authority.
    (5) The use of technology, such as phone and Web-based meetings, 
that must be used to promote WDB member participation;
    (6) The process to ensure members actively participate in convening 
the workforce development system's stakeholders, brokering relationships 
with a diverse range of employers, and leveraging support for workforce 
development activities; and
    (7) Other conditions governing appointment or membership on the 
State WDB as deemed appropriate by the Governor.
    (e) Members who represent organizations, agencies or other entities 
described in paragraphs (b)(3)(ii) through (iii) of this section must be 
individuals who have optimum policy-making authority in the organization 
or for the core program that they represent.
    (f)(1) A State WDB member may not represent more than one of the 
categories described in:
    (i) Paragraph (b)(3)(i) of this section (business representatives);
    (ii) Paragraph (b)(3)(ii) of this section (workforce 
representatives); or
    (iii) Paragraph (b)(3)(iii) of this section (government 
representatives).
    (2) A State WDB member may not serve as a representative of more 
than one subcategory under paragraph (b)(3)(ii) of this section.
    (3) A State WDB member may not serve as a representative of more 
than one subcategory under paragraph (b)(3)(iii) of this section, except 
that where a single government agency is responsible for multiple 
required programs, the head of the agency may represent each of the 
required programs.
    (g) All required WDB members must have voting privileges. The 
Governor also may convey voting privileges to non-required members.



Sec.  679.120  What is meant by the terms ``optimum policy-making
authority'' and ``demonstrated experience and expertise''?

    For purposes of Sec.  679.110:
    (a) A representative with ``optimum policy-making authority'' is an 
individual who can reasonably be expected to speak affirmatively on 
behalf of the entity he or she represents and to commit that entity to a 
chosen course of action.
    (b) A representative with ``demonstrated experience and expertise'' 
means an individual with documented leadership in developing or 
implementing workforce development, human resources, training and 
development, or a core program function. Demonstrated experience and 
expertise may include individuals with experience in education or 
training of job seekers with barriers to employment as described in 
Sec.  679.110(b)(3)(ii)(C) and (D).

[[Page 227]]



Sec.  679.130  What are the functions of the State Workforce
Development Board?

    Under WIOA sec. 101(d), the State WDB must assist the Governor in 
the:
    (a) Development, implementation, and modification of the 4-year 
State Plan;
    (b) Review of statewide policies, programs, and recommendations on 
actions that must be taken by the State to align workforce development 
programs to support a comprehensive and streamlined workforce 
development system. Such review of policies, programs, and 
recommendations must include a review and provision of comments on the 
State Plans, if any, for programs and activities of one-stop partners 
that are not core programs;
    (c) Development and continuous improvement of the workforce 
development system, including--
    (1) Identification of barriers and means for removing barriers to 
better coordinate, align, and avoid duplication among programs and 
activities;
    (2) Development of strategies to support career pathways for the 
purpose of providing individuals, including low-skilled adults, youth, 
and individuals with barriers to employment, including individuals with 
disabilities, with workforce investment activities, education, and 
supportive services to enter or retain employment;
    (3) Development of strategies to provide effective outreach to and 
improved access for individuals and employers who could benefit from 
workforce development system;
    (4) Development and expansion of strategies to meet the needs of 
employers, workers, and job seekers particularly through industry or 
sector partnerships related to in-demand industry sectors and 
occupations;
    (5) Identification of regions, including planning regions for the 
purposes of WIOA sec. 106(a), and the designation of local areas under 
WIOA sec. 106, after consultation with Local WDBs and chief elected 
officials;
    (6) Development and continuous improvement of the one-stop delivery 
system in local areas, including providing assistance to Local WDBs, 
one-stop operators, one-stop partners, and providers. Such assistance 
includes assistance with planning and delivering services, including 
training and supportive services, to support effective delivery of 
services to workers, job seekers, and employers; and
    (7) Development of strategies to support staff training and 
awareness across the workforce development system and its programs;
    (d) Development and updating of comprehensive State performance and 
accountability measures to assess core program effectiveness under WIOA 
sec. 116(b);
    (e) Identification and dissemination of information on best 
practices, including best practices for--
    (1) The effective operation of one-stop centers, relating to the use 
of business outreach, partnerships, and service delivery strategies, 
including strategies for serving individuals with barriers to 
employment;
    (2) The development of effective Local WDBs, which may include 
information on factors that contribute to enabling Local WDBs to exceed 
negotiated local levels of performance, sustain fiscal integrity, and 
achieve other measures of effectiveness; and
    (3) Effective training programs that respond to real-time labor 
market analysis, that effectively use direct assessment and prior 
learning assessment to measure an individual's prior knowledge, skills, 
competencies, and experiences for adaptability, to support efficient 
placement into employment or career pathways;
    (f) Development and review of statewide policies affecting the 
coordinated provision of services through the State's one-stop delivery 
system described in WIOA sec. 121(e), including the development of--
    (1) Objective criteria and procedures for use by Local WDBs in 
assessing the effectiveness, physical and programmatic accessibility and 
continuous improvement of one-stop centers. Where a Local WDB serves as 
the one-stop operator, the State WDB must use such criteria to assess 
and certify the one-stop center;
    (2) Guidance for the allocation of one-stop center infrastructure 
funds under WIOA sec. 121(h); and

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    (3) Policies relating to the appropriate roles and contributions of 
entities carrying out one-stop partner programs within the one-stop 
delivery system, including approaches to facilitating equitable and 
efficient cost allocation in the system;
    (g) Development of strategies for technological improvements to 
facilitate access to, and improve the quality of services and activities 
provided through the one-stop delivery system, including such 
improvements to--
    (1) Enhance digital literacy skills (as defined in sec. 202 of the 
Museum and Library Service Act, 20 U.S.C. 9101);
    (2) Accelerate acquisition of skills and recognized postsecondary 
credentials by participants;
    (3) Strengthen professional development of providers and workforce 
professionals; and
    (4) Ensure technology is accessible to individuals with disabilities 
and individuals residing in remote areas;
    (h) Development of strategies for aligning technology and data 
systems across one-stop partner programs to enhance service delivery and 
improve efficiencies in reporting on performance accountability 
measures, including design implementation of common intake, data 
collection, case management information, and performance accountability 
measurement and reporting processes and the incorporation of local input 
into such design and implementation to improve coordination of services 
across one-stop partner programs;
    (i) Development of allocation formulas for the distribution of funds 
for employment and training activities for adults and youth workforce 
investment activities, to local areas as permitted under WIOA secs. 
128(b)(3) and 133(b)(3);
    (j) Preparation of the annual reports described in paragraphs (1) 
and (2) of WIOA sec. 116(d);
    (k) Development of the statewide workforce and labor market 
information system described in sec. 15(e) of the Wagner-Peyser Act; and
    (l) Development of other policies as may promote statewide 
objectives for and enhance the performance of the workforce development 
system in the State.



Sec.  679.140  How does the State Workforce Development Board meet
its requirement to conduct business in an open manner under the
``sunshine provision'' of the Workforce Innovation and Opportunity Act?

    (a) The State WDB must conduct business in an open manner as 
required by WIOA sec. 101(g).
    (b) The State WDB must make available to the public, on a regular 
basis through electronic means and open meetings, information about the 
activities and functions of the State WDB, including:
    (1) The State Plan, or modification to the State Plan, prior to 
submission of the State Plan or modification of the State Plan;
    (2) Information regarding membership;
    (3) Minutes of formal meetings of the State WDB upon request;
    (4) State WDB by-laws as described at Sec.  679.110(d).



Sec.  679.150  Under what circumstances may the Governor select an
alternative entity in place of the State Workforce Development Board?

    (a) The State may use any State entity that meets the requirements 
of WIOA sec. 101(e) to perform the functions of the State WDB. This may 
include:
    (1) A State council;
    (2) A State WDB within the meaning of the Workforce Investment Act 
of 1998, as in effect on the day before the date of enactment of WIOA; 
or
    (3) A combination of regional WDBs or similar entity.
    (b) If the State uses an alternative entity, the State Plan must 
demonstrate that the alternative entity meets all three of the 
requirements of WIOA sec. 101(e)(1):
    (1) Was in existence on the day before the date of enactment of the 
Workforce Investment Act of 1998 (WIA);
    (2) Is substantially similar to the State WDB described in WIOA 
secs. 101(a)-(c) and Sec.  679.110; and
    (3) Includes representatives of business and labor organizations in 
the State.
    (c) If the alternative entity does not provide representatives for 
each of the categories required under WIOA sec. 101(b), the State Plan 
must explain the

[[Page 229]]

manner in which the State will ensure an ongoing role for any 
unrepresented membership group in the workforce development system. The 
State WDB must maintain an ongoing and meaningful role for an 
unrepresented membership group, including entities carrying out the core 
programs, by such methods as:
    (1) Regularly scheduled consultations with entities within the 
unrepresented membership groups;
    (2) Providing an opportunity for input into the State Plan or other 
policy development by unrepresented membership groups; and
    (3) Establishing an advisory committee of unrepresented membership 
groups.
    (d) In parts 675 through 687 of this chapter, all references to the 
State WDB also apply to an alternative entity used by a State.



Sec.  679.160  Under what circumstances may the State Workforce
Development Board hire staff?

    (a) The State WDB may hire a director and other staff to assist in 
carrying out the functions described in WIOA sec. 101(d) and Sec.  
679.130 using funds described in WIOA sec. 129(b)(3) or sec. 
134(a)(3)(B)(i).
    (b) The State WDB must establish and apply a set of objective 
qualifications for the position of director that ensures the individual 
selected has the requisite knowledge, skills, and abilities to meet 
identified benchmarks and to assist in effectively carrying out the 
functions of the State WDB.
    (c) The director and staff must be subject to the limitations on the 
payment of salary and bonuses described in WIOA sec. 194(15).



  Subpart B_Workforce Innovation and Opportunity Act Local Governance 
                      (Workforce Development Areas)



Sec.  679.200  What is the purpose of requiring States to
identify regions?

    The purpose of identifying regions is to align workforce development 
activities and resources with larger regional economic development areas 
and available resources to provide coordinated and efficient services to 
both job seekers and employers.



Sec.  679.210  What are the requirements for identifying a region?

    (a) The Governor must assign local areas to a region prior to 
submission of the State Unified or Combined Plan, in order for the State 
to receive WIOA title I, subtitle B adult, dislocated worker, and youth 
allotments.
    (b) The Governor must develop a policy and process for identifying 
regions. Such policy must include:
    (1) Consultation with the Local WDBs and chief elected officials 
(CEOs) in the local area(s) as required in WIOA sec. 102(b)(2)(D)(i)(II) 
and WIOA sec. 106(a)(1); and
    (2) Consideration of the extent to which the local areas in a 
proposed region:
    (i) Share a single labor market;
    (ii) Share a common economic development area; and
    (iii) Possess the Federal and non-Federal resources, including 
appropriate education and training institutions, to administer 
activities under WIOA subtitle B.
    (c) In addition to the required criteria described in paragraph 
(b)(2) of this section, other factors the Governor also may consider 
include:
    (1) Population centers;
    (2) Commuting patterns;
    (3) Land ownership;
    (4) Industrial composition;
    (5) Location quotients;
    (6) Labor force conditions;
    (7) Geographic boundaries; and
    (8) Additional factors as determined by the Secretary.
    (d) Regions must consist of:
    (1) One local area;
    (2) Two or more contiguous local areas in a single State; or
    (3) Two or more contiguous local areas in two or more States.
    (e) Planning regions are those regions described in paragraph (d)(2) 
or (3) of this section. Planning regions are subject to the regional 
planning requirements in Sec.  679.510.

[[Page 230]]



Sec.  679.220  What is the purpose of the local area?

    (a) The purpose of a local area is to serve as a jurisdiction for 
the administration of workforce development activities and execution of 
adult, dislocated worker, and youth funds allocated by the State. Such 
areas may be aligned with a region identified in WIOA sec. 106(a)(1) or 
may be components of a planning region, each with its own Local WDB. 
Also, significantly, local areas are the areas within which Local WDBs 
oversee their functions, including strategic planning, operational 
alignment and service delivery design, and a jurisdiction where partners 
align resources at a sub-State level to design and implement overall 
service delivery strategies.
    (b) The Governor must designate local areas (local areas) in order 
for the State to receive adult, dislocated worker, and youth funding 
under title I, subtitle B of WIOA.



Sec.  679.230  What are the general procedural requirements for
designation of local areas?

    As part of the process of designating or redesignating a local area, 
the Governor must develop a policy for designation of local areas that 
must include:
    (a) Consultation with the State WDB;
    (b) Consultation with the chief elected officials and affected Local 
WDBs; and
    (c) Consideration of comments received through a public comment 
process which must:
    (1) Offer adequate time for public comment prior to designation of 
the local area; and
    (2) Provide an opportunity for comment by representatives of Local 
WDBs, chief elected officials, businesses, institutions of higher 
education, labor organizations, other primary stakeholders, and the 
general public regarding the designation of the local area.



Sec.  679.240  What are the substantive requirements for
designation of local areas that were not designated as local 
areas under the Workforce Investment Act of 1998?

    (a) Except as provided in Sec.  679.250, the Governor may designate 
or redesignate a local area in accordance with policies and procedures 
developed by the Governor, which must include at a minimum consideration 
of the extent to which the proposed area:
    (1) Is consistent with local labor market areas;
    (2) Has a common economic development area; and
    (3) Has the Federal and non-Federal resources, including appropriate 
education and training institutions, to administer activities under WIOA 
subtitle B.
    (b) The Governor may approve a request at any time for designation 
as a workforce development area from any unit of general local 
government, including a combination of such units, if the State WDB 
determines that the area meets the requirements of paragraph (a)(1) of 
this section and recommends designation.
    (c) Regardless of whether a local area has been designated under 
this section or Sec.  679.250, the Governor may redesignate a local area 
if the redesignation has been requested by a local area and the Governor 
approves the request.



Sec.  679.250  What are the requirements for initial and subsequent
designation of workforce development areas that had been designated
as local areas under the Workforce Investment Act of 1998?

    (a) If the chief elected official and Local WDB in a local area 
submits a request for initial designation, the Governor must approve the 
request if, for the 2 program years preceding the date of enactment of 
WIOA, the following criteria are met:
    (1) The local area was designated as a local area for purposes of 
WIA;
    (2) The local area performed successfully; and
    (3) The local area sustained fiscal integrity.
    (b) Subject to paragraph (c) of this section, after the period of 
initial designation, if the chief elected official and Local WDB in a 
local area submits

[[Page 231]]

a request for subsequent designation, the Governor must approve the 
request if the following criteria are met for the 2 most recent program 
years of initial designation:
    (1) The local area performed successfully;
    (2) The local area sustained fiscal integrity; and
    (3) In the case of a local area in a planning region, the local area 
met the regional planning requirements described in WIOA sec. 106(c)(1).
    (c) No determination of subsequent eligibility may be made before 
the conclusion of Program Year (PY) 2017.
    (d) The Governor:
    (1) May review a local area designated under paragraph (b) of this 
section at any time to evaluate whether that the area continues to meet 
the requirements for subsequent designation under that paragraph; and
    (2) Must review a local area designated under paragraph (b) of this 
section before submitting its State Plan during each 4-year State 
planning cycle to evaluate whether the area continues to meet the 
requirements for subsequent designation under that paragraph.
    (e) For purposes of subsequent designation under paragraphs (b) and 
(d) of this section, the local area and chief elected official must be 
considered to have requested continued designation unless the local area 
and chief elected official notify the Governor that they no longer seek 
designation.
    (f) Local areas designated under Sec.  679.240 or States designated 
as single-area States under Sec.  679.270 are not subject to the 
requirements described in paragraph (b) of this section related to the 
subsequent designation of a local area.
    (g) The Governor may approve, under paragraph (c) of this section, a 
request for designation as a local area from areas served by rural 
concentrated employment programs as described in WIOA sec. 107(c)(1)(C).



Sec.  679.260  What do the terms ``performed successfully'' and
``sustained fiscal integrity'' mean for purposes of designating
local areas?

    (a) For the purpose of initial local area designation, the term 
``performed successfully'' means that the local area met or exceeded the 
levels of performance the Governor negotiated with the Local WDB and 
chief elected official under WIA sec. 136(c) for the last 2 full program 
years before the enactment of WIOA, and that the local area has not 
failed any individual measure for the last 2 consecutive program years 
before the enactment of WIOA.
    (b) For the purpose of determining subsequent local area 
designation, the term ``performed successfully'' means that the local 
area met or exceeded the levels of performance the Governor negotiated 
with the Local WDB and chief elected official for core indicators of 
performance as provided in paragraphs (b)(1) and (2) of this section as 
appropriate, and that the local area has not failed any individual 
measure for the last 2 consecutive program years in accordance with a 
State-established definition, provided in the State Plan, of met or 
exceeded performance.
    (1) For subsequent designation determinations made at the conclusion 
of PY 2017, a finding of whether a local area performed successfully 
must be limited to having met or exceeded the negotiated levels for the 
Employment Rate 2nd Quarter after Exit and the Median Earnings 
indicators of performance, as described at Sec.  677.155(a)(1)(i) and 
(iii) of this chapter respectively, for PY 2016 and PY 2017.
    (2) For subsequent designation determinations made at the conclusion 
of PY 2018, or at any point thereafter, a finding of whether a local 
area performed successfully must be based on all six of the WIOA 
indicators of performance as described at Sec.  677.155(a)(1)(i) through 
(vi) of this chapter for the 2 most recently completed program years.
    (c) For the purpose of determining initial and subsequent local area 
designation under Sec.  679.250(a) and (b), the term ``sustained fiscal 
integrity'' means that the Secretary has not made a formal determination 
that either the grant recipient or the administrative entity of the area 
misexpended funds due to willful disregard of the requirements of the 
provision involved, gross negligence, or failure to comply with accepted 
standards of administration for the 2-year period preceding the 
determination.

[[Page 232]]



Sec.  679.270  What are the special designation provisions for
single-area States?

    (a) The Governor of any State that was a single-State local area 
under the WIA as in effect on July 1, 2013 may designate the State as a 
single-State local area under WIOA.
    (b) The Governor of a State local area under paragraph (a) of this 
section who seeks to designate the State as a single-State local area 
under WIOA must:
    (1) Identify the State as a single-area State in the Unified or 
Combined State Plan; and
    (2) Include the local plan for approval as part of the Unified or 
Combined State Plan.
    (c) The State WDB for a single-area State must act as the Local WDB 
and carry out the functions of the Local WDB in accordance with WIOA 
sec. 107 and Sec.  679.370, except that the State is not required to 
meet and report on a set of local performance accountability measures.
    (d) Single-area States must conduct the functions of the Local WDB 
as outlined in paragraph (c) of this section to achieve the 
incorporation of local interests but may do so in a manner that reduces 
unnecessary burden and duplication of processes.
    (e) States must carry out the duties of State and Local WDBs in 
accordance with guidance issued by the Secretary of Labor.



Sec.  679.280  How does the State fulfill the requirement to
provide assistance to local areas within a planning region that
wish to redesignate into a single local area?

    (a) When the chief elected officials and Local WDBs of each local 
area within a planning region make a request to the Governor to 
redesignate into a single local area, the State WDB must authorize 
statewide adult, dislocated worker, and youth program funds to 
facilitate such redesignation.
    (b) When statewide funds are not available, the State may provide 
funds for redesignation in the next available program year.
    (c) Redesignation activities that may be carried out by the local 
areas include:
    (1) Convening sessions and conferences;
    (2) Renegotiation of contracts and agreements; and
    (3) Other activities directly associated with the redesignation as 
deemed appropriate by the State WDB.



Sec.  679.290  What right does an entity have to appeal the 
Governor's decision rejecting a request for designation as a
workforce development area?

    (a) A unit of local government (or combination of units) or a local 
area which has requested but has been denied its request for designation 
as a workforce development area under Sec.  679.250 may appeal the 
decision to the State WDB, in accordance with appeal procedures 
established in the State Plan and Sec.  683.630(a) of this chapter.
    (b) If a decision on the appeal is not rendered in a timely manner 
or if the appeal to the State WDB does not result in designation, the 
entity may request review by the Secretary of Labor, under the 
procedures set forth at Sec.  683.640 of this chapter.



              Subpart C_Local Workforce Development Boards



Sec.  679.300  What is the vision and purpose of the Local
Workforce Development Board?

    (a) The vision for the Local WDB is to serve as a strategic leader 
and convener of local workforce development system stakeholders. The 
Local WDB partners with employers and the workforce development system 
to develop policies and investments that support public workforce system 
strategies that support regional economies, the development of effective 
approaches including local and regional sector partnerships and career 
pathways, and high quality, customer centered service delivery and 
service delivery approaches;
    (b) The purpose of the Local WDB is to--
    (1) Provide strategic and operational oversight in collaboration 
with the required and additional partners and workforce stakeholders to 
help develop a comprehensive and high-quality workforce development 
system in the local area and larger planning region;

[[Page 233]]

    (2) Assist in the achievement of the State's strategic and 
operational vision and goals as outlined in the Unified State Plan or 
Combined State Plan; and
    (3) Maximize and continue to improve the quality of services, 
customer satisfaction, effectiveness of the services provided.



Sec.  679.310  What is the Local Workforce Development Board?

    (a) The Local WDB is appointed by the chief elected official(s) in 
each local area in accordance with State criteria established under WIOA 
sec. 107(b), and is certified by the Governor every 2 years, in 
accordance with WIOA sec. 107(c)(2).
    (b) In partnership with the chief elected official(s), the Local WDB 
sets policy for the portion of the statewide workforce development 
system within the local area and consistent with State policies.
    (c) The Local WDB and the chief elected official(s) may enter into 
an agreement that describes the respective roles and responsibilities of 
the parties.
    (d) The Local WDB, in partnership with the chief elected 
official(s), develops the local plan and performs the functions 
described in WIOA sec. 107(d) and Sec.  679.370.
    (e) If a local area includes more than one unit of general local 
government in accordance with WIOA sec. 107(c)(1)(B), the chief elected 
officials of such units may execute an agreement to describe their 
responsibilities for carrying out the roles and responsibilities. If the 
chief elected officials are unable to reach agreement after a reasonable 
effort, the Governor may appoint the members of the Local WDB from 
individuals nominated or recommended as specified in WIOA sec. 107(b).
    (f) If the State Plan indicates that the State will be treated as a 
local area under WIOA, the State WDB must carry out the roles of the 
Local WDB in accordance with WIOA sec. 107, except that the State is not 
required to meet and report on a set of local performance accountability 
measures.
    (g) The CEO must establish by-laws, consistent with State policy for 
Local WDB membership, that at a minimum address:
    (1) The nomination process used by the CEO to select the Local WDB 
chair and members;
    (2) The term limitations and how the term appointments will be 
staggered to ensure only a portion of membership expire in a given year;
    (3) The process to notify the CEO of a WDB member vacancy to ensure 
a prompt nominee;
    (4) The proxy and alternative designee process that will be used 
when a WDB member is unable to attend a meeting and assigns a designee 
as per the requirements at Sec.  679.110(d)(4);
    (5) The use of technology, such as phone and Web-based meetings, 
that will be used to promote WDB member participation;
    (6) The process to ensure WDB members actively participate in 
convening the workforce development system's stakeholders, brokering 
relationships with a diverse range of employers, and leveraging support 
for workforce development activities; and
    (7) A description of any other conditions governing appointment or 
membership on the Local WDB as deemed appropriate by the CEO.



Sec.  679.320  Who are the required members of the Local
Workforce Development Board?

    (a) For each local area in the State, the members of Local WDB must 
be selected by the chief elected official consistent with criteria 
established under WIOA sec. 107(b)(1) and criteria established by the 
Governor, and must meet the requirements of WIOA sec. 107(b)(2).
    (b) A majority of the members of the Local WDB must be 
representatives of business in the local area. At a minimum, two members 
must represent small business as defined by the U.S. Small Business 
Administration. Business representatives serving on Local WDBs also may 
serve on the State WDB. Each business representative must meet the 
following criteria:
    (1) Be an owner, chief executive officer, chief operating officer, 
or other individual with optimum policy-making or hiring authority; and
    (2) Provide employment opportunities in in-demand industry sectors 
or

[[Page 234]]

occupations, as those terms are defined in WIOA sec. 3(23).
    (c) At least 20 percent of the members of the Local WDB must be 
workforce representatives. These representatives:
    (1) Must include two or more representatives of labor organizations, 
where such organizations exist in the local area. Where labor 
organizations do not exist, representatives must be selected from other 
employee representatives;
    (2) Must include one or more representatives of a joint labor-
management, or union affiliated, registered apprenticeship program 
within the area who must be a training director or a member of a labor 
organization. If no union affiliated registered apprenticeship programs 
exist in the area, a representative of a registered apprenticeship 
program with no union affiliation must be appointed, if one exists;
    (3) May include one or more representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training or education needs of individuals 
with barriers to employment, including organizations that serve veterans 
or provide or support competitive integrated employment for individuals 
with disabilities; and
    (4) May include one or more representatives of organizations that 
have demonstrated experience and expertise in addressing the employment, 
training, or education needs of eligible youth, including 
representatives of organizations that serve out-of-school youth.
    (d) The Local WDB also must include:
    (1) At least one eligible training provider administering adult 
education and literacy activities under WIOA title II;
    (2) At least one representative from an institution of higher 
education providing workforce investment activities, including community 
colleges; and
    (3) At least one representative from each of the following 
governmental and economic and community development entities:
    (i) Economic and community development entities;
    (ii) The State Employment Service office under the Wagner-Peyser Act 
(29 U.S.C. 49 et seq.) serving the local area; and
    (iii) The programs carried out under title I of the Rehabilitation 
Act of 1973, other than sec. 112 or part C of that title;
    (e) The membership of Local WDBs may include individuals or 
representatives of other appropriate entities in the local area, 
including:
    (1) Entities administering education and training activities who 
represent local educational agencies or community-based organizations 
with demonstrated expertise in addressing the education or training 
needs for individuals with barriers to employment;
    (2) Governmental and economic and community development entities who 
represent transportation, housing, and public assistance programs;
    (3) Philanthropic organizations serving the local area; and
    (4) Other appropriate individuals as determined by the chief elected 
official.
    (f) Members must be individuals with optimum policy-making authority 
within the entities they represent.
    (g) Chief elected officials must establish a formal nomination and 
appointment process, consistent with the criteria established by the 
Governor and State WDB under sec. 107(b)(1) of WIOA for appointment of 
members of the Local WDBs, that ensures:
    (1) Business representatives are appointed from among individuals 
who are nominated by local business organizations and business trade 
associations;
    (2) Labor representatives are appointed from among individuals who 
are nominated by local labor federations (or, for a local area in which 
no employees are represented by such organizations, other 
representatives of employees); and
    (3) When there is more than one local area provider of adult 
education and literacy activities under title II, or multiple 
institutions of higher education providing workforce investment 
activities as described in WIOA sec. 107(b)(2)(C)(i) or (ii), 
nominations are solicited from those particular entities.

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    (h) An individual may be appointed as a representative of more than 
one entity if the individual meets all the criteria for representation, 
including the criteria described in paragraphs (c) through (g) of this 
section, for each entity.
    (i) All required WDB members must have voting privilege. The chief 
elected official may convey voting privileges to non-required members.



Sec.  679.330  Who must chair a Local Workforce Development Board?

    The Local WDB must elect a chairperson from among the business 
representatives on the WDB.



Sec.  679.340  What is meant by the terms ``optimum policy-making
authority'' and ``demonstrated experience and expertise''?

    For purposes of selecting representatives to Local WDBs:
    (a) A representative with ``optimum policy-making authority'' is an 
individual who can reasonably be expected to speak affirmatively on 
behalf of the entity he or she represents and to commit that entity to a 
chosen course of action.
    (b) A representative with ``demonstrated experience and expertise'' 
means an individual who:
    (1) Is a workplace learning advisor as defined in WIOA sec. 3(70);
    (2) Contributes to the field of workforce development, human 
resources, training and development, or a core program function; or
    (3) The Local WDB recognizes for valuable contributions in education 
or workforce development related fields.



Sec.  679.350  What criteria will be used to establish the
membership of the Local Workforce Development Board?

    The Local WDB is appointed by the chief elected official(s) in the 
local area in accordance with State criteria established under WIOA sec. 
107(b), and is certified by the Governor every 2 years, in accordance 
with WIOA sec. 107(c)(2).



Sec.  679.360  What is a standing committee, and what is its
relationship to the Local Workforce Development Board?

    (a) Standing committees may be established by the Local WDB to 
provide information and assist the Local WDB in carrying out its 
responsibilities under WIOA sec. 107. Standing committees must be 
chaired by a member of the Local WDB, may include other members of the 
Local WDB, and must include other individuals appointed by the Local WDB 
who are not members of the Local WDB and who have demonstrated 
experience and expertise in accordance with Sec.  679.340(b) and as 
determined by the Local WDB. Standing committees may include each of the 
following:
    (1) A standing committee to provide information and assist with 
operational and other issues relating to the one-stop delivery system, 
which may include representatives of the one-stop partners.
    (2) A standing committee to provide information and to assist with 
planning, operational, and other issues relating to the provision of 
services to youth, which must include community-based organizations with 
a demonstrated record of success in serving eligible youth.
    (3) A standing committee to provide information and to assist with 
operational and other issues relating to the provision of services to 
individuals with disabilities, including issues relating to compliance 
with WIOA sec. 188, if applicable, and applicable provisions of the 
Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) 
regarding providing programmatic and physical access to the services, 
programs, and activities of the one-stop delivery system, as well as 
appropriate training for staff on providing supports for or 
accommodations to, and finding employment opportunities for, individuals 
with disabilities.
    (b) The Local WDB may designate other standing committees in 
addition to those specified in paragraph (a) of this section.
    (c) Local WDBs may designate an entity in existence as of the date 
of the

[[Page 236]]

enactment of WIOA, such as an effective youth council, to serve as a 
standing committee as long as the entity meets the requirements of WIOA 
sec. 107(b)(4).



Sec.  679.370  What are the functions of the Local Workforce
Development Board?

    As provided in WIOA sec. 107(d), the Local WDB must:
    (a) Develop and submit a 4-year local plan for the local area, in 
partnership with the chief elected official and consistent with WIOA 
sec. 108;
    (b) If the local area is part of a planning region that includes 
other local areas, develop and submit a regional plan in collaboration 
with other local areas. If the local area is part of a planning region, 
the local plan must be submitted as a part of the regional plan;
    (c) Conduct workforce research and regional labor market analysis to 
include:
    (1) Analyses and regular updates of economic conditions, needed 
knowledge and skills, workforce, and workforce development (including 
education and training) activities to include an analysis of the 
strengths and weaknesses (including the capacity to provide) of such 
services to address the identified education and skill needs of the 
workforce and the employment needs of employers;
    (2) Assistance to the Governor in developing the statewide workforce 
and labor market information system under the Wagner-Peyser Act for the 
region; and
    (3) Other research, data collection, and analysis related to the 
workforce needs of the regional economy as the WDB, after receiving 
input from a wide array of stakeholders, determines to be necessary to 
carry out its functions;
    (d) Convene local workforce development system stakeholders to 
assist in the development of the local plan under Sec.  679.550 and in 
identifying non-Federal expertise and resources to leverage support for 
workforce development activities. Such stakeholders may assist the Local 
WDB and standing committees in carrying out convening, brokering, and 
leveraging functions at the direction of the Local WDB;
    (e) Lead efforts to engage with a diverse range of employers and 
other entities in the region in order to:
    (1) Promote business representation (particularly representatives 
with optimum policy-making or hiring authority from employers whose 
employment opportunities reflect existing and emerging employment 
opportunities in the region) on the Local WDB;
    (2) Develop effective linkages (including the use of intermediaries) 
with employers in the region to support employer utilization of the 
local workforce development system and to support local workforce 
investment activities;
    (3) Ensure that workforce investment activities meet the needs of 
employers and support economic growth in the region by enhancing 
communication, coordination, and collaboration among employers, economic 
development entities, and service providers; and
    (4) Develop and implement proven or promising strategies for meeting 
the employment and skill needs of workers and employers (such as the 
establishment of industry and sector partnerships), that provide the 
skilled workforce needed by employers in the region, and that expand 
employment and career advancement opportunities for workforce 
development system participants in in-demand industry sectors or 
occupations;
    (f) With representatives of secondary and postsecondary education 
programs, lead efforts to develop and implement career pathways within 
the local area by aligning the employment, training, education, and 
supportive services that are needed by adults and youth, particularly 
individuals with barriers to employment;
    (g) Lead efforts in the local area to identify and promote proven 
and promising strategies and initiatives for meeting the needs of 
employers, workers and job seekers, and identify and disseminate 
information on proven and promising practices carried out in other local 
areas for meeting such needs;
    (h) Develop strategies for using technology to maximize the 
accessibility and effectiveness of the local workforce development 
system for employers, and workers and job seekers, by:

[[Page 237]]

    (1) Facilitating connections among the intake and case management 
information systems of the one-stop partner programs to support a 
comprehensive workforce development system in the local area;
    (2) Facilitating access to services provided through the one-stop 
delivery system involved, including access in remote areas;
    (3) Identifying strategies for better meeting the needs of 
individuals with barriers to employment, including strategies that 
augment traditional service delivery, and increase access to services 
and programs of the one-stop delivery system, such as improving digital 
literacy skills; and
    (4) Leveraging resources and capacity within the local workforce 
development system, including resources and capacity for services for 
individuals with barriers to employment;
    (i) In partnership with the chief elected official for the local 
area:
    (1) Conduct oversight of youth workforce investment activities 
authorized under WIOA sec. 129(c), adult and dislocated worker 
employment and training activities under WIOA secs. 134(c) and (d), and 
the entire one-stop delivery system in the local area;
    (2) Ensure the appropriate use and management of the funds provided 
under WIOA subtitle B for the youth, adult, and dislocated worker 
activities and one-stop delivery system in the local area; and
    (3) Ensure the appropriate use management, and investment of funds 
to maximize performance outcomes under WIOA sec. 116;
    (j) Negotiate and reach agreement on local performance indicators 
with the chief elected official and the Governor;
    (k) Negotiate with CEO and required partners on the methods for 
funding the infrastructure costs of one-stop centers in the local area 
in accordance with Sec.  678.715 of this chapter or must notify the 
Governor if they fail to reach agreement at the local level and will use 
a State infrastructure funding mechanism;
    (l) Select the following providers in the local area, and where 
appropriate terminate such providers in accordance with 2 CFR part 200:
    (1) Providers of youth workforce investment activities through 
competitive grants or contracts based on the recommendations of the 
youth standing committee (if such a committee is established); however, 
if the Local WDB determines there is an insufficient number of eligible 
training providers in a local area, the Local WDB may award contracts on 
a sole-source basis as per the provisions at WIOA sec. 123(b);
    (2) Providers of training services consistent with the criteria and 
information requirements established by the Governor and WIOA sec. 122;
    (3) Providers of career services through the award of contracts, if 
the one-stop operator does not provide such services; and
    (4) One-stop operators in accordance with Sec. Sec.  678.600 through 
678.635 of this chapter;
    (m) In accordance with WIOA sec. 107(d)(10)(E) work with the State 
to ensure there are sufficient numbers and types of providers of career 
services and training services serving the local area and providing the 
services in a manner that maximizes consumer choice, as well as 
providing opportunities that lead to competitive integrated employment 
for individuals with disabilities;
    (n) Coordinate activities with education and training providers in 
the local area, including:
    (1) Reviewing applications to provide adult education and literacy 
activities under WIOA title II for the local area to determine whether 
such applications are consistent with the local plan;
    (2) Making recommendations to the eligible agency to promote 
alignment with such plan; and
    (3) Replicating and implementing cooperative agreements to enhance 
the provision of services to individuals with disabilities and other 
individuals, such as cross training of staff, technical assistance, use 
and sharing of information, cooperative efforts with employers, and 
other efforts at cooperation, collaboration, and coordination;
    (o) Develop a budget for the activities of the Local WDB, with 
approval of the chief elected official and consistent with the local 
plan and the duties of the Local WDB;

[[Page 238]]

    (p) Assess, on an annual basis, the physical and programmatic 
accessibility of all one-stop centers in the local area, in accordance 
with WIOA sec. 188, if applicable, and applicable provisions of the 
Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.); and
    (q) Certification of one-stop centers in accordance with Sec.  
678.800 of this chapter.



Sec.  679.380  How does the Local Workforce Development Board
satisfy the consumer choice requirements for career services and 
training services?

    (a) In accordance with WIOA sec. 122 and in working with the State, 
the Local WDB satisfies the consumer choice requirement for training 
services by:
    (1) Determining the initial eligibility of entities providing a 
program of training services, renewing the eligibility of providers, and 
considering the possible termination of an eligible training provider 
due to the provider's submission of inaccurate eligibility and 
performance information or the provider's substantial violation of WIOA;
    (2) Working with the State to ensure there are sufficient numbers 
and types of providers of training services, including eligible training 
providers with expertise in assisting individuals with disabilities and 
eligible training providers with expertise in assisting adults in need 
of adult education and literacy activities described under WIOA sec. 
107(d)(10)(E), serving the local area;
    (3) Ensuring the dissemination and appropriate use of the State list 
through the local one-stop delivery system;
    (4) Receiving performance and cost information from the State and 
disseminating this information through the one-stop delivery systems 
within the State; and
    (5) Providing adequate access to services for individuals with 
disabilities.
    (b) Working with the State, the Local WDB satisfies the consumer 
choice requirement for career services by:
    (1) Determining the career services that are best performed by the 
one-stop operator consistent with Sec. Sec.  678.620 and 678.625 of this 
chapter and career services that require contracting with a career 
service provider; and
    (2) Identifying a wide-array of potential career service providers 
and awarding contracts where appropriate including to providers to 
ensure:
    (i) Sufficient access to services for individuals with disabilities, 
including opportunities that lead to integrated, competitive employment 
for individuals with disabilities; and
    (ii) Sufficient access for adult education and literacy activities.



Sec.  679.390  How does the Local Workforce Development Board
meet its requirement to conduct business in an open manner under
the ``sunshine provision'' of the Workforce Innovation and
Opportunity Act?

    The Local WDB must conduct its business in an open manner as 
required by WIOA sec. 107(e), by making available to the public, on a 
regular basis through electronic means and open meetings, information 
about the activities of the Local WDB. This includes:
    (a) Information about the Local Plan, or modification to the Local 
Plan, before submission of the plan;
    (b) List and affiliation of Local WDB members;
    (c) Selection of one-stop operators;
    (d) Award of grants or contracts to eligible training providers of 
workforce investment activities including providers of youth workforce 
investment activities;
    (e) Minutes of formal meetings of the Local WDB; and
    (f) Local WDB by-laws, consistent with Sec.  679.310(g).



Sec.  679.400  Who are the staff to the Local Workforce Development
Board and what is their role?

    (a) WIOA sec. 107(f) grants Local WDBs authority to hire a director 
and other staff to assist in carrying out the functions of the Local 
WDB.
    (b) Local WDBs must establish and apply a set of qualifications for 
the position of director that ensures the individual selected has the 
requisite knowledge, skills, and abilities to meet identified benchmarks 
and to assist in carrying out the functions of the Local WDB.

[[Page 239]]

    (c) The Local WDB director and staff must be subject to the 
limitations on the payment of salary and bonuses described in WIOA sec. 
194(15).
    (d) In general, Local WDB staff only may assist the Local WDB 
fulfill the required functions at WIOA sec. 107(d).
    (e) Should the WDB select an entity to staff the WDB that provides 
additional workforce functions beyond the functions described at WIOA 
sec. 107(d), such an entity is required to enter into a written 
agreement with the Local WDB and chief elected official(s) to clarify 
their roles and responsibilities as required by Sec.  679.430.



Sec.  679.410  Under what conditions may a Local Workforce
Development Board directly be a provider of career services,
or training services, or act as a one-
stop operator?

    (a)(1) A Local WDB may be selected as a one-stop operator:
    (i) Through sole source procurement in accordance with Sec.  678.610 
of this chapter; or
    (ii) Through successful competition in accordance with Sec.  678.615 
of this chapter.
    (2) The chief elected official in the local area and the Governor 
must agree to the selection described in paragraph (a)(1) of this 
section.
    (3) Where a Local WDB acts as a one-stop operator, the State must 
ensure certification of one-stop centers in accordance with Sec.  
678.800 of this chapter.
    (b) A Local WDB may act as a provider of career services only with 
the agreement of the chief elected official in the local area and the 
Governor.
    (c) A Local WDB is prohibited from providing training services, 
unless the Governor grants a waiver in accordance with the provisions in 
WIOA sec. 107(g)(1).
    (1) The State must develop a procedure for approving waivers that 
includes the criteria at WIOA sec. 107(g)(1)(B)(i):
    (i) Satisfactory evidence that there is an insufficient number of 
eligible training providers of such a program of training services to 
meet local demand in the local area;
    (ii) Information demonstrating that the WDB meets the requirements 
for eligible training provider services under WIOA sec. 122; and
    (iii) Information demonstrating that the program of training 
services prepares participants for an in-demand industry sector or 
occupation in the local area.
    (2) The local area must make the proposed request for a waiver 
available to eligible training providers and other interested members of 
the public for a public comment period of not less than 30 days and 
includes any comments received during this time in the final request for 
the waiver.
    (3) The waiver must not exceed the duration of the local plan and 
may be renewed by submitting a new waiver request consistent with 
paragraphs (c)(1) and (2) of this section for additional periods, not to 
exceed the durations of such subsequent plans.
    (4) The Governor may revoke the waiver if the Governor determines 
the waiver is no longer needed or that the Local WDB involved has 
engaged in a pattern of inappropriate referrals to training services 
operated by the Local WDB.
    (d) The restrictions on the provision of career and training 
services by the Local WDB, as one-stop operator, also apply to staff of 
the Local WDB.



Sec.  679.420  What are the functions of the local fiscal agent?

    (a) In order to assist in administration of the grant funds, the 
chief elected official or the Governor, where the Governor serves as the 
local grant recipient for a local area, may designate an entity to serve 
as a local fiscal agent. Designation of a fiscal agent does not relieve 
the chief elected official or Governor of liability for the misuse of 
grant funds. If the CEO designates a fiscal agent, the CEO must ensure 
this agent has clearly defined roles and responsibilities.
    (b) In general the fiscal agent is responsible for the following 
functions:
    (1) Receive funds.
    (2) Ensure sustained fiscal integrity and accountability for 
expenditures of funds in accordance with Office of Management and Budget 
circulars, WIOA and the corresponding Federal Regulations and State 
policies.
    (3) Respond to audit financial findings.

[[Page 240]]

    (4) Maintain proper accounting records and adequate documentation.
    (5) Prepare financial reports.
    (6) Provide technical assistance to subrecipients regarding fiscal 
issues.
    (c) At the direction of the Local WDB or the State WDB in single-
area States, the fiscal agent may have the following additional 
functions:
    (1) Procure contracts or obtain written agreements.
    (2) Conduct financial monitoring of service providers.
    (3) Ensure independent audit of all employment and training 
programs.



Sec.  679.430  How do entities performing multiple functions in
a local area demonstrate internal controls and prevent conflict 
of interest?

    Local organizations often function simultaneously in a variety of 
roles, including local fiscal agent, Local WDB staff, one-stop operator, 
and direct provider of services. Any organization that has been selected 
or otherwise designated to perform more than one of these functions must 
develop a written agreement with the Local WDB and CEO to clarify how 
the organization will carry out its responsibilities while demonstrating 
compliance with WIOA and corresponding regulations, relevant Office of 
Management and Budget circulars, and the State's conflict of interest 
policy.



                    Subpart D_Regional and Local Plan



Sec.  679.500  What is the purpose of the regional and local plan?

    (a) The local plan serves as 4-year action plan to develop, align, 
and integrate service delivery strategies and to support the State's 
vision and strategic and operational goals. The local plan sets forth 
the strategy to:
    (1) Direct investments in economic, education, and workforce 
training programs to focus on providing relevant education and training 
to ensure that individuals, including youth and individuals with 
barriers to employment, have the skills to compete in the job market and 
that employers have a ready supply of skilled workers;
    (2) Apply job-driven strategies in the one-stop delivery system;
    (3) Enable economic, education, and workforce partners to build a 
skilled workforce through innovation in, and alignment of, employment, 
training, and education programs; and
    (4) Incorporate the local plan into the regional plan per Sec.  
679.540.
    (b) In the case of planning regions, a regional plan is required to 
meet the purposes described in paragraph (a) of this section and to 
coordinate resources among multiple WDBs in a region.
    (c) The Governor must establish and disseminate to Local WDBs and 
regional planning areas a policy for the submission of local and 
regional plans. The policy must set a deadline for the submission of the 
regional and local plans that accounts for the activities required in 
plan development outlined in Sec. Sec.  679.510 and 679.550.



Sec.  679.510  What are the requirements for regional planning?

    (a) Local WDBs and chief elected officials within an identified 
planning region (as defined in WIOA secs. 106(a)(2)(B)-(C) and Sec.  
679.200) must:
    (1) Participate in a regional planning process that results in:
    (i) The preparation of a regional plan, as described in paragraph 
(a)(2) of this section and consistent with any guidance issued by the 
Department;
    (ii) The establishment of regional service strategies, including use 
of cooperative service delivery agreements;
    (iii) The development and implementation of sector initiatives for 
in-demand industry sectors or occupations for the planning region;
    (iv) The collection and analysis of regional labor market data (in 
conjunction with the State) which must include the local planning 
requirements at Sec.  679.560(a)(1)(i) and (ii);
    (v) The coordination of administrative cost arrangements, including 
the pooling of funds for administrative costs, as appropriate;
    (vi) The coordination of transportation and other supportive 
services as appropriate;
    (vii) The coordination of services with regional economic 
development services and providers; and

[[Page 241]]

    (viii) The establishment of an agreement concerning how the planning 
region will collectively negotiate and reach agreement with the Governor 
on local levels of performance for, and report on, the performance 
accountability measures described in WIOA sec. 116(c) for local areas or 
the planning region.
    (2) Prepare, submit, and obtain approval of a single regional plan 
that:
    (i) Includes a description of the activities described in paragraph 
(a)(1) of this section; and
    (ii) Incorporates local plans for each of the local areas in the 
planning region, consistent with Sec.  679.540(a).
    (b) Consistent with Sec.  679.550(b), the Local WDBs representing 
each local area in the planning region must provide an opportunity for 
public comment on the development of the regional plan or subsequent 
plan modifications before submitting the plan to the Governor. To 
provide adequate opportunity for public comment, the Local WDBs must:
    (1) Make copies of the proposed regional plan available to the 
public through electronic and other means, such as public hearings and 
local news media;
    (2) Include an opportunity for comment by members of the public, 
including representatives of business, labor organizations, and 
education;
    (3) Provide no more than a 30-day period for comment on the plan 
before its submission to the Governor, beginning on the date on which 
the proposed plan is made available; and
    (4) The Local WDBs must submit any comments that express 
disagreement with the plan to the Governor along with the plan.
    (5) Consistent with WIOA sec. 107(e), the Local WDB must make 
information about the plan available to the public on a regular basis 
through electronic means and open meetings.
    (c) The State must provide technical assistance and labor market 
data, as requested by local areas, to assist with regional planning and 
subsequent service delivery efforts.
    (d) As they relate to regional areas and regional plans, the terms 
local area and local plan are defined in WIOA secs. 106(c)(3)(A)-(B).



Sec.  679.520  What are the requirements for approval of a 
regional plan?

    Consistent with the requirements of Sec.  679.570, the Governor must 
review completed plans (including a modification to the plan). Such 
plans will be considered approved 90 days after receipt of the plan 
unless the Governor determines in writing that:
    (a) There are deficiencies in workforce investment activities that 
have been identified through audits and the local area has not made 
acceptable progress in implementing plans to address deficiencies; or
    (b) The plan does not comply with applicable provisions of WIOA and 
the WIOA regulations, including the required consultations and public 
comment provisions, and the nondiscrimination requirements of 29 CFR 
part 38.
    (c) The plan does not align with the State Plan, including with 
regard to the alignment of the core programs to support the strategy 
identified in the State Plan in accordance with WIOA sec. 102(b)(1)(E) 
and Sec.  676.105 of this chapter.



Sec.  679.530  When must the regional plan be modified?

    (a) Consistent with Sec.  679.580, the Governor must establish 
procedures governing the modification of regional plans.
    (b) At the end of the first 2-year period of the 4-year local plan, 
the Local WDBs within a planning region, in partnership with the 
appropriate chief elected officials, must review the regional plan and 
prepare and submit modifications to the regional plan to reflect 
changes:
    (1) In regional labor market and economic conditions; and
    (2) Other factors affecting the implementation of the local plan, 
including but not limited to changes in the financing available to 
support WIOA title I and partner-provided WIOA services.



Sec.  679.540  How are local planning requirements reflected 
in a regional plan?

    (a) The regional plan must address the requirements at WIOA secs. 
106(c)(1)(A)-(H), and incorporate the

[[Page 242]]

local planning requirements identified for local plans at WIOA secs. 
108(b)(1)-(22).
    (b) The Governor may issue regional planning guidance that allows 
Local WDBs and chief elected officials in a planning region to address 
any local plan requirements through the regional plan where there is a 
shared regional responsibility.



Sec.  679.550  What are the requirements for the development of
the local plan?

    (a) Under WIOA sec. 108, each Local WDB must, in partnership with 
the appropriate chief elected officials, develop and submit a 
comprehensive 4-year plan to the Governor.
    (1) The plan must identify and describe the policies, procedures, 
and local activities that are carried out in the local area, consistent 
with the State Plan.
    (2) If the local area is part of a planning region, the Local WDB 
must comply with WIOA sec. 106(c) and Sec. Sec.  679.510 through 679.540 
in the preparation and submission of a regional plan.
    (b) Consistent with Sec.  679.510(b), the Local WDB must provide an 
opportunity for public comment on the development of the local plan or 
subsequent plan modifications before submitting the plan to the 
Governor. To provide adequate opportunity for public comment, the Local 
WDB must:
    (1) Make copies of the proposed local plan available to the public 
through electronic and other means, such as public hearings and local 
news media;
    (2) Include an opportunity for comment by members of the public, 
including representatives of business, labor organizations, and 
education;
    (3) Provide no more than a 30-day period for comment on the plan 
before its submission to the Governor, beginning on the date on which 
the proposed plan is made available, prior to its submission to the 
Governor; and
    (4) The Local WDB must submit any comments that express disagreement 
with the plan to the Governor along with the plan.
    (5) Consistent WIOA sec. 107(e), the Local WDB must make information 
about the plan available to the public on a regular basis through 
electronic means and open meetings.



Sec.  679.560  What are the contents of the local plan?

    (a) The local workforce investment plan must describe strategic 
planning elements, including:
    (1) A regional analysis of:
    (i) Economic conditions including existing and emerging in-demand 
industry sectors and occupations; and
    (ii) Employment needs of employers in existing and emerging in-
demand industry sectors and occupations.
    (iii) As appropriate, a local area may use an existing analysis, 
which is a timely current description of the regional economy, to meet 
the requirements of paragraphs (a)(1)(i) and (ii) of this section;
    (2) Knowledge and skills needed to meet the employment needs of the 
employers in the region, including employment needs in in-demand 
industry sectors and occupations;
    (3) An analysis of the regional workforce, including current labor 
force employment and unemployment data, information on labor market 
trends, and educational and skill levels of the workforce, including 
individuals with barriers to employment;
    (4) An analysis of workforce development activities, including 
education and training, in the region. This analysis must include the 
strengths and weaknesses of workforce development activities and 
capacity to provide the workforce development activities to address the 
education and skill needs of the workforce, including individuals with 
barriers to employment, and the employment needs of employers;
    (5) A description of the Local WDB's strategic vision to support 
regional economic growth and economic self-sufficiency. This must 
include goals for preparing an educated and skilled workforce (including 
youth and individuals with barriers to employment), and goals relating 
to the performance accountability measures based on performance 
indicators described in Sec.  677.155(a)(1) of this chapter; and
    (6) Taking into account analyses described in paragraphs (a)(1) 
through (4) of this section, a strategy to work with the entities that 
carry out the core

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programs and required partners to align resources available to the local 
area, to achieve the strategic vision and goals described in paragraph 
(a)(5) of this section.
    (b) The plan must include a description of the following 
requirements at WIOA secs. 108(b)(2)-(21):
    (1) The workforce development system in the local area that 
identifies:
    (i) The programs that are included in the system; and
    (ii) How the Local WDB will support the strategy identified in the 
State Plan under Sec.  676.105 of this chapter and work with the 
entities carrying out core programs and other workforce development 
programs, including programs of study authorized under the Carl D. 
Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et 
seq.) to support service alignment;
    (2) How the Local WDB will work with entities carrying out core 
programs to:
    (i) Expand access to employment, training, education, and supportive 
services for eligible individuals, particularly eligible individuals 
with barriers to employment;
    (ii) Facilitate the development of career pathways and co-
enrollment, as appropriate, in core programs; and
    (iii) Improve access to activities leading to a recognized 
postsecondary credential (including a credential that is an industry-
recognized certificate or certification, portable, and stackable);
    (3) The strategies and services that will be used in the local area:
    (i) To facilitate engagement of employers in workforce development 
programs, including small employers and employers in in-demand industry 
sectors and occupations;
    (ii) To support a local workforce development system that meets the 
needs of businesses in the local area;
    (iii) To better coordinate workforce development programs and 
economic development;
    (iv) To strengthen linkages between the one-stop delivery system and 
unemployment insurance programs; and
    (v) That may include the implementation of initiatives such as 
incumbent worker training programs, on-the-job training programs, 
customized training programs, industry and sector strategies, career 
pathways initiatives, utilization of effective business intermediaries, 
and other business services and strategies designed to meet the needs of 
regional employers. These initiatives must support the strategy 
described in paragraph (b)(3) of this section;
    (4) An examination of how the Local WDB will coordinate local 
workforce investment activities with regional economic development 
activities that are carried out in the local area and how the Local WDB 
will promote entrepreneurial skills training and microenterprise 
services;
    (5) The one-stop delivery system in the local area, including:
    (i) How the Local WDB will ensure the continuous improvement of 
eligible providers through the system and that such providers will meet 
the employment needs of local employers, workers, and job seekers;
    (ii) How the Local WDB will facilitate access to services provided 
through the one-stop delivery system, including in remote areas, through 
the use of technology and other means;
    (iii) How entities within the one-stop delivery system, including 
one-stop operators and the one-stop partners, will comply with WIOA sec. 
188, if applicable, and applicable provisions of the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) regarding the 
physical and programmatic accessibility of facilities, programs and 
services, technology, and materials for individuals with disabilities, 
including providing staff training and support for addressing the needs 
of individuals with disabilities; and
    (iv) The roles and resource contributions of the one-stop partners;
    (6) A description and assessment of the type and availability of 
adult and dislocated worker employment and training activities in the 
local area;
    (7) A description of how the Local WDB will coordinate workforce 
investment activities carried out in the local area with statewide rapid 
response activities;
    (8) A description and assessment of the type and availability of 
youth workforce investment activities in the local area including 
activities for

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youth who are individuals with disabilities, which must include an 
identification of successful models of such activities;
    (9) How the Local WDB will coordinate relevant secondary and 
postsecondary education programs and activities with education and 
workforce investment activities to coordinate strategies, enhance 
services, and avoid duplication of services;
    (10) How the Local WDB will coordinate WIOA title I workforce 
investment activities with the provision of transportation and other 
appropriate supportive services in the local area;
    (11) Plans, assurances, and strategies for maximizing coordination, 
improving service delivery, and avoiding duplication of Wagner-Peyser 
Act (29 U.S.C. 49 et seq.) services and other services provided through 
the one-stop delivery system;
    (12) How the Local WDB will coordinate WIOA title I workforce 
investment activities with adult education and literacy activities under 
WIOA title II. This description must include how the Local WDB will 
carry out the review of local applications submitted under title II 
consistent with WIOA secs. 107(d)(11)(A) and (B)(i) and WIOA sec. 232;
    (13) Copies of executed cooperative agreements which define how all 
local service providers, including additional providers, will carry out 
the requirements for integration of and access to the entire set of 
services available in the local one-stop delivery system. This includes 
cooperative agreements (as defined in WIOA sec. 107(d)(11)) between the 
Local WDB or other local entities described in WIOA sec. 101(a)(11)(B) 
of the Rehabilitation Act of 1973 (29 U.S.C. 721(a)(11)(B)) and the 
local office of a designated State agency or designated State unit 
administering programs carried out under title I of the Rehabilitation 
Act (29 U.S.C. 720 et seq.) (other than sec. 112 or part C of that title 
(29 U.S.C. 732, 741) and subject to sec. 121(f)) in accordance with sec. 
101(a)(11) of the Rehabilitation Act (29 U.S.C. 721(a)(11)) with respect 
to efforts that will enhance the provision of services to individuals 
with disabilities and to other individuals, such as cross training of 
staff, technical assistance, use and sharing of information, cooperative 
efforts with employers, and other efforts at cooperation, collaboration, 
and coordination;
    (14) An identification of the entity responsible for the disbursal 
of grant funds described in WIOA sec. 107(d)(12)(B)(i)(III), as 
determined by the chief elected official or the Governor under WIOA sec. 
107(d)(12)(B)(i);
    (15) The competitive process that will be used to award the 
subgrants and contracts for WIOA title I activities;
    (16) The local levels of performance negotiated with the Governor 
and chief elected official consistent with WIOA sec. 116(c), to be used 
to measure the performance of the local area and to be used by the Local 
WDB for measuring the performance of the local fiscal agent (where 
appropriate), eligible providers under WIOA title I subtitle B, and the 
one-stop delivery system in the local area;
    (17) The actions the Local WDB will take toward becoming or 
remaining a high-performing WDB, consistent with the factors developed 
by the State WDB;
    (18) How training services outlined in WIOA sec. 134 will be 
provided through the use of individual training accounts, including, if 
contracts for training services will be used, how the use of such 
contracts will be coordinated with the use of individual training 
accounts under that chapter, and how the Local WDB will ensure informed 
customer choice in the selection of training programs regardless of how 
the training services are to be provided;
    (19) The process used by the Local WDB, consistent with WIOA sec. 
108(d), to provide a 30-day public comment period prior to submission of 
the plan, including an opportunity to have input into the development of 
the local plan, particularly for representatives of businesses, 
education, and labor organizations;
    (20) How one-stop centers are implementing and transitioning to an 
integrated, technology-enabled intake and case management information 
system for programs carried out under WIOA and by one-stop partners; and
    (21) The direction given by the Governor and the Local WDB to the 
one-

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stop operator to ensure priority for adult career and training services 
will be given to recipients of public assistance, other low-income 
individuals, and individuals who are basic skills deficient consistent 
with WIOA sec. 134(c)(3)(E) and Sec.  680.600 of this chapter.
    (c) The local plan must include any additional information required 
by the Governor.
    (d) The local plan must identify the portions that the Governor has 
designated as appropriate for common response in the regional plan where 
there is a shared regional responsibility, as permitted by Sec.  
679.540(b).
    (e) Comments submitted during the public comment period that 
represent disagreement with the plan must be submitted with the local 
plan.



Sec.  679.570  What are the requirements for approval of a local plan?

    (a) Consistent with the requirements at Sec.  679.520 the Governor 
must review completed plans (including a modification to the plan). Such 
plans will be considered approved 90 days after the Governor receives 
the plan unless the Governor determines in writing that:
    (1) There are deficiencies in workforce investment activities that 
have been identified through audits and the local area has not made 
acceptable progress in implementing plans to address deficiencies; or
    (2) The plan does not comply with applicable provisions of WIOA and 
the WIOA regulations, including the required consultations and public 
comment provisions, and the nondiscrimination requirements of 29 CFR 
part 38.
    (3) The plan does not align with the State Plan, including with 
regard to the alignment of the core programs to support the strategy 
identified in the State Plan in accordance with WIOA sec. 102(b)(1)(E) 
and Sec.  676.105 of this chapter.
    (b) In cases where the State is a single local area:
    (1) The State must incorporate the local plan into the State's 
Unified or Combined State Plan and submit it to the U.S. Department of 
Labor in accordance with the procedures described in Sec.  676.105 of 
this chapter.
    (2) The Secretary of Labor performs the roles assigned to the 
Governor as they relate to local planning activities.
    (3) The Secretary of Labor will issue planning guidance for such 
States.



Sec.  679.580  When must the local plan be modified?

    (a) Consistent with the requirements at Sec.  679.530, the Governor 
must establish procedures governing the modification of local plans.
    (b) At the end of the first 2-year period of the 4-year local plan, 
each Local WDB, in partnership with the appropriate chief elected 
officials, must review the local plan and prepare and submit 
modifications to the local plan to reflect changes:
    (1) In labor market and economic conditions; and
    (2) Other factors affecting the implementation of the local plan, 
including but not limited to:
    (i) Significant changes in local economic conditions;
    (ii) Changes in the financing available to support WIOA title I and 
partner-provided WIOA services;
    (iii) Changes to the Local WDB structure; and
    (iv) The need to revise strategies to meet local performance goals.



         Subpart E_Waivers/WorkFlex (Workforce Flexibility Plan)



Sec.  679.600  What is the purpose of the general statutory and
regulatory waiver authority in the Workforce Innovation and Opportunity Act?

    (a) The purpose of the general statutory and regulatory waiver 
authority provided at sec. 189(i)(3) of the WIOA is to provide 
flexibility to States and local areas and enhance their ability to 
improve the statewide workforce development system to achieve the goals 
and purposes of WIOA.
    (b) A waiver may be requested to address impediments to the 
implementation of a Unified or Combined State Plan, including the 
continuous improvement strategy, consistent with the purposes of title I 
of WIOA as identified in Sec.  675.100 of this chapter.

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Sec.  679.610  What provisions of the Workforce Innovation and 
Opportunity Act and the Wagner-Peyser Act may be waived, and what
provisions may not be waived?

    (a) The Secretary may waive for a State, or local area in a State, 
any of the statutory or regulatory requirements of subtitles A, B and E 
of title I of WIOA, 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 judicial review;
    (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 WDBs;
    (10) Procedures for review and approval of State and Local plans;
    (11) The funding of infrastructure costs for one-stop centers; and
    (12) Other requirements relating to the basic purposes of title I of 
WIOA described in Sec.  675.100 of this chapter.
    (b) The Secretary may waive for a State, or local area in a State, 
any of the statutory or regulatory requirements of secs. 8 through 10 of 
the Wagner- Peyser Act (29 U.S.C. 49g-49i) except for requirements 
relating to:
    (1) The provision of services to unemployment insurance claimants 
and veterans; and
    (2) Universal access to the basic labor exchange services without 
cost to job seekers.



Sec.  679.620  Under what conditions may a Governor request, and 
the Secretary approve, a general waiver of statutory or regulatory
requirements under the Workforce Innovation and Opportunity Act?

    (a) The Secretary will issue guidelines under which the States may 
request general waivers of WIOA and Wagner-Peyser Act requirements.
    (b) A Governor may request a general waiver in consultation with 
appropriate chief elected officials:
    (1) By submitting a waiver plan which may accompany the State's WIOA 
4-year Unified or Combined State Plan or 2-year modification; or
    (2) After a State's WIOA Plan is approved, by separately submitting 
a waiver plan.
    (c) A Governor's waiver request may seek waivers for the entire 
State or for one or more local areas within the State.
    (d) A Governor requesting a general waiver must submit to the 
Secretary a plan to improve the statewide workforce development system 
that:
    (1) Identifies the statutory or regulatory requirements for which a 
waiver is requested and the goals that the State or local area, as 
appropriate, intends to achieve as a result of the waiver and how those 
goals relate to the Unified or Combined State Plan;
    (2) Describes the actions that the State or local area, as 
appropriate, has undertaken to remove State or local statutory or 
regulatory barriers;
    (3) Describes the goals of the waiver and the expected programmatic 
outcomes if the request is granted;
    (4) Describes how the waiver will align with the Department's policy 
priorities, such as:
    (i) Supporting employer engagement;
    (ii) Connecting education and training strategies;
    (iii) Supporting work-based learning;
    (iv) Improving job and career results; and
    (v) Other priorities as articulated in guidance;
    (5) Describes the individuals affected by the waiver, including how 
the waiver will impact services for disadvantaged populations or 
individuals with multiple barriers to employment; and
    (6) Describes the processes used to:
    (i) Monitor the progress in implementing the waiver;
    (ii) Provide notice to any Local WDB affected by the waiver;
    (iii) Provide any Local WDB affected by the waiver an opportunity to 
comment on the request;
    (iv) Ensure meaningful public comment, including comment by business 
and organized labor, on the waiver; and
    (v) Collect and report information about waiver outcomes in the 
State's WIOA Annual Report.
    (7) The Secretary may require that States provide the most recent 
data

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available about the outcomes of the existing waiver in cases where the 
State seeks renewal of a previously approved waiver.
    (e) The Secretary will issue a decision on a waiver request within 
90 days after the receipt of the original waiver request.
    (f) The Secretary will approve a waiver request if and only to the 
extent that:
    (1) The Secretary determines that the requirements for which a 
waiver is requested impede the ability of either the State or local area 
to implement the State's Plan to improve the statewide workforce 
development system;
    (2) The Secretary determines that the waiver plan meets all of the 
requirements of WIOA sec. 189(i)(3) and Sec. Sec.  679.600 through 
679.620; and
    (3) The State has executed a memorandum of understanding (MOU) with 
the Secretary requiring the State to meet, or ensure that the local area 
meets, agreed-upon outcomes and to implement other appropriate measures 
to ensure accountability.
    (g) A waiver may be approved for as long as the Secretary determines 
appropriate, but for not longer than the duration of the State's 
existing Unified or Combined State Plan.
    (h) The Secretary may revoke a waiver granted under this section if 
the Secretary determines that the State has failed to meet the agreed 
upon outcomes, measures, failed to comply with the terms and conditions 
in the MOU described in paragraph (f) of this section or any other 
document establishing the terms and conditions of the waiver, or if the 
waiver no longer meets the requirements of Sec. Sec.  679.600 through 
679.620.



Sec.  679.630  Under what conditions may the Governor submit a workforce
flexibility plan?

    (a) A State may submit to the Secretary, and the Secretary may 
approve, a workforce flexibility (workflex) plan under which the State 
is authorized to waive, in accordance with the plan:
    (1) Any of the statutory or regulatory requirements under title I of 
WIOA applicable to local areas, if the local area requests the waiver in 
a waiver application, except for:
    (i) Requirements relating to the basic purposes of title I of WIOA 
described in Sec.  675.100 of this chapter;
    (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 WDBs;
    (viii) Procedures for review and approval of local plans; and
    (ix) Worker rights, participation, and protection.
    (2) Any of the statutory or regulatory requirements applicable to 
the State under secs. 8 through 10 of the Wagner-Peyser Act (29 U.S.C. 
49g-49i), except for requirements relating to:
    (i) The provision of services to unemployment insurance claimants 
and veterans; and
    (ii) Universal access to basic labor exchange services without cost 
to job seekers.
    (3) Any of the statutory or regulatory requirements applicable under 
the Older Americans Act of 1965 (OAA) (42 U.S.C. 3001 et seq.), to State 
agencies on aging with respect to activities carried out using funds 
allotted under OAA sec. 506(b) (42 U.S.C. 3056d(b)), except for 
requirements relating to:
    (i) The basic purposes of OAA;
    (ii) Wage and labor standards;
    (iii) Eligibility of participants in the activities; and
    (iv) Standards for grant agreements.
    (b) A workforce flexibility plan submitted under paragraph (a) of 
this section must include descriptions of:
    (1) The process by which local areas in the State may submit and 
obtain State approval of applications for waivers of requirements under 
title I of WIOA;
    (2) A description of the criteria the State will use to approve 
local area waiver requests and how such requests support implementation 
of the goals identified State Plan;
    (3) The statutory and regulatory requirements of title I of WIOA 
that are likely to be waived by the State under the workforce 
flexibility plan;
    (4) The statutory and regulatory requirements of secs. 8 through 10 
of the

[[Page 248]]

Wagner-Peyser Act that are proposed for waiver, if any;
    (5) The statutory and regulatory requirements of the OAA that are 
proposed for waiver, if any;
    (6) The outcomes to be achieved by the waivers described in 
paragraphs (b)(1) through (5) of this section including, where 
appropriate, revisions to adjusted levels of performance included in the 
State or local plan under title I of WIOA, and a description of the data 
or other information the State will use to track and assess outcomes; 
and
    (7) The measures to be taken to ensure appropriate accountability 
for Federal funds in connection with the waivers.
    (c) A State's workforce flexibility plan may accompany the State's 
Unified or Combined State Plan, 2-year modification, or may be submitted 
separately as a modification to that plan.
    (d) The Secretary may approve a workforce flexibility plan 
consistent with the period of approval of the State's Unified or 
Combined State Plan, and not for more than 5 years.
    (e) Before submitting a workforce flexibility plan to the Secretary 
for approval, the State must provide adequate notice and a reasonable 
opportunity for comment on the proposed waiver requests under the 
workforce flexibility plan to all interested parties and to the general 
public.
    (f) The Secretary will issue guidelines under which States may 
request designation as a work-flex State. These guidelines may require a 
State to implement an evaluation of the impact of work-flex in the 
State.



Sec.  679.640  What limitations apply to the State's workforce 
flexibility plan authority under the Workforce Innovation and Opportunity
Act?

    (a)(1) Under work-flex waiver authority a State must not waive the 
WIOA, Wagner-Peyser Act or OAA requirements which are excepted from the 
work-flex waiver authority and described in Sec.  679.630(a).
    (2) Requests to waive statutory and regulatory requirements of title 
I of WIOA applicable at the State level may not be granted under work-
flex waiver authority granted to a State. Such requests only may be 
granted by the Secretary under the general waiver authority described at 
Sec. Sec.  679.610 through 679.620.
    (b) As required in Sec.  679.630(b)(6), States must address the 
outcomes to result from work-flex waivers as part of its workforce 
flexibility plan. The Secretary may terminate a State's work-flex 
designation if the State fails to meet agreed-upon outcomes or other 
terms and conditions contained in its workforce flexibility plan.



PART 680_ADULT AND DISLOCATED WORKER ACTIVITIES UNDER TITLE I OF 
THE WORKFORCE INNOVATION AND OPPORTUNITY ACT--Table of Contents



Subpart A_Delivery of Adult and Dislocated Worker Activities Under Title 
            I of the Workforce Innovation and Opportunity Act

Sec.
680.100 What is the role of the adult and dislocated worker programs in 
          the one-stop delivery system?
680.110 When must adults and dislocated workers be registered and 
          considered a participant?
680.120 What are the eligibility criteria for career services for adults 
          in the adult and dislocated worker programs?
680.130 What are the eligibility criteria for career services for 
          dislocated workers in the adult and dislocated worker 
          programs?
680.140 What Workforce Innovation and Opportunity Act title I adult and 
          dislocated worker services are Local Workforce Development 
          Boards required and permitted to provide?
680.150 What career services must be provided to adults and dislocated 
          workers?
680.160 How are career services delivered?
680.170 What is the individual employment plan?
680.180 What is an internship or work experience for adults and 
          dislocated workers?
680.190 What is a transitional job?
680.195 What funds may be used for transitional jobs?

                       Subpart B_Training Services

680.200 What are training services for adults and dislocated workers? 
          680.210 Who may receive training services?
680.220 Are there particular career services an individual must receive 
          before receiving training services under the Workforce 
          Innovation and Opportunity Act?

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680.230 What are the requirements for coordination of Workforce 
          Innovation and Opportunity Act training funds and other grant 
          assistance?

                 Subpart C_Individual Training Accounts

680.300 How are training services provided?
680.310 Can the duration and amount of Individual Training Accounts be 
          limited?
680.320 Under what circumstances may mechanisms other than Individual 
          Training Accounts be used to provide training services?
680.330 How can Individual Training Accounts, supportive services, and 
          needs-related payments be used to support placing 
          participating adults and dislocated workers into a registered 
          apprenticeship program and support participants once they are 
          in a registered apprenticeship program?
680.340 What are the requirements for consumer choice?
680.350 May Workforce Innovation and Opportunity Act title I adult and 
          dislocated worker funds be used to directly support adult 
          education and literacy activities?

                  Subpart D_Eligible Training Providers

680.400 What is the purpose of this subpart?
680.410 What is an eligible training provider?
680.420 What is a ``program of training services''?
680.430 Who is responsible for managing the training provider 
          eligibility process?
680.440 [Reserved]
680.450 What is the initial eligibility process for new providers and 
          programs?
680.460 What is the application procedure for continued eligibility?
680.470 What are the procedures for including and removing registered 
          apprenticeship programs on a State list of eligible training 
          providers and programs?
680.480 May an eligible training provider lose its eligibility?
680.490 What kind of performance and cost information must eligible 
          training providers other than registered apprenticeship 
          programs provide for each program of training services?
680.500 How is the State list of eligible training providers and 
          programs disseminated?
680.510 In what ways can a Local Workforce Development Board supplement 
          the information available from the State list of eligible 
          training providers and programs?
680.520 May individuals choose training providers and programs located 
          outside of the local area or outside of the State?
680.530 What eligibility requirements apply to providers of on-the-job-
          training, customized training, incumbent worker training, and 
          other training exceptions?

               Subpart E_Priority and Special Populations

680.600 What priority must be given to low-income adults and public 
          assistance recipients and individuals who are basic skills 
          deficient served with adult funds under title I of the 
          Workforce Innovation and Opportunity Act?
680.610 Does the statutory priority for use of adult funds also apply to 
          dislocated worker funds?
680.620 How does the Temporary Assistance for Needy Families program 
          relate to the one-stop delivery system?
680.630 How does a displaced homemaker qualify for services under title 
          I of the Workforce Innovation and Opportunity Act?
680.640 May an individual with a disability whose family does not meet 
          income eligibility criteria under the Workforce Innovation and 
          Opportunity Act be eligible for priority as a low-income 
          adult?
680.650 Do veterans receive priority of service under the Workforce 
          Innovation and Opportunity Act?
680.660 Are separating military service members eligible for dislocated 
          worker activities under the Workforce Innovation and 
          Opportunity Act?

                      Subpart F_Work-Based Training

680.700 What are the requirements for on-the-job training?
680.710 What are the requirements for on-the-job training contracts for 
          employed workers?
680.720 What conditions govern on-the-job training payments to 
          employers?
680.730 Under what conditions may a Governor or Local Workforce 
          Development Board raise the on-the-job training reimbursement 
          rate up to 75 percent of the wage rate?
680.740 How can on-the-job training funds be used to support placing 
          participants into a registered apprenticeship program?
680.750 Can Individual Training Account and on-the-job training funds be 
          combined to support placing participants into a registered 
          apprenticeship program?
680.760 What is customized training?
680.770 What are the requirements for customized training for employed 
          workers?
680.780 Who is an ``incumbent worker'' for purposes of statewide and 
          local employment and training activities?
680.790 What is incumbent worker training?
680.800 What funds may be used for incumbent worker training?

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680.810 What criteria must be taken into account for an employer to be 
          eligible to receive local incumbent worker funds?
680.820 Are there cost sharing requirements for local area incumbent 
          worker training?
680.830 May funds provided to employers for work-based training be used 
          to assist, promote, or deter union organizing?
680.840 May funds provided to employers for work-based training and 
          other work experiences be used to fill job openings as a 
          result of a labor dispute?

                      Subpart G_Supportive Services

680.900 What are supportive services for adults and dislocated workers?
680.910 When may supportive services be provided to participants?
680.920 Are there limits on the amount or duration of funds for 
          supportive services?
680.930 What are needs-related payments?
680.940 What are the eligibility requirements for adults to receive 
          needs-related payments?
680.950 What are the eligibility requirements for dislocated workers to 
          receive needs-related payments?
680.960 May needs-related payments be paid while a participant is 
          waiting to start training classes?
680.970 How is the level of needs-related payments determined?

    Authority: Secs. 122, 134, 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).

    Source: 81 FR 56385, Aug. 19, 2016, unless otherwise noted.



Subpart A_Delivery of Adult and Dislocated Worker Activities Under Title 
            I of the Workforce Innovation and Opportunity Act



Sec.  680.100  What is the role of the adult and dislocated worker
programs in the one-stop delivery system?

    (a) The one-stop delivery system is the basic delivery system for 
adult and dislocated worker services. Through this system, adults and 
dislocated workers can access a continuum of services. The services are 
classified as career and training services.
    (b) The chief elected official or his/her designee(s), as the local 
grant recipient(s) for the adult and dislocated worker programs, is a 
required one-stop partner and is subject to the provisions relating to 
such partners described in part 678 of this chapter. Consistent with 
those provisions:
    (1) Career services for adults and dislocated workers must be made 
available in at least one one-stop center in each local area. Services 
also may be available elsewhere, either at affiliated sites or at 
specialized centers. For example, specialized centers may be established 
to serve workers being dislocated from a particular employer or 
industry, or to serve residents of public housing.
    (2) Through the one-stop delivery system, adults and dislocated 
workers needing training are provided Individual Training Accounts 
(ITAs) and access to lists of eligible training providers and programs 
of training. These lists contain quality consumer information, including 
cost and performance information for each of the providers' programs, so 
that participants can make informed choices on where to use their ITAs. 
(ITAs are more fully discussed in subpart C of this part.)



Sec.  680.110  When must adults and dislocated workers be registered
and considered a participant?

    (a) Registration is the process for collecting information to 
support a determination of eligibility. This information may be 
collected through methods that include electronic data transfer, 
personal interview, or an individual's application. Individuals are 
considered participants when they have received a Workforce Innovation 
and Opportunity Act (WIOA) service other than self-service or 
information-only activities and have satisfied all applicable 
programmatic requirements for the provision of services, such as 
eligibility determination (see Sec.  677.150(a) of this chapter).
    (b) Adults and dislocated workers who receive services funded under 
WIOA title I other than self-service or information-only activities must 
be registered and must be a participant.
    (c) EO data, as defined in Sec.  675.300 of this chapter, must be 
collected on every individual who is interested in being considered for 
WIOA title I financially assisted aid, benefits, services, or training 
by a recipient, and who has signified that interest by submitting 
personal information in response to a

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request from the grant recipient or designated service provider.



Sec.  680.120  What are the eligibility criteria for career services
for adults in the adult and dislocated worker programs?

    To be eligible to receive career services as an adult in the adult 
and dislocated worker programs, an individual must be 18 years of age or 
older. To be eligible for any dislocated worker programs, an eligible 
adult must meet the criteria of Sec.  680.130. Eligibility criteria for 
training services are found at Sec.  680.210.



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

    (a) To be eligible to receive career services as a dislocated worker 
in the adult and dislocated worker programs, an individual must meet the 
definition of ``dislocated worker'' at WIOA sec. 3(15). Eligibility 
criteria for training services are found at Sec.  680.210.
    (b) Governors and Local Workforce Development Boards (WDBs) may 
establish policies and procedures for one-stop centers to use in 
determining an individual's eligibility as a dislocated worker, 
consistent with the definition at WIOA sec. 3(15). These policies and 
procedures may address such conditions as:
    (1) What constitutes a ``general announcement'' of plant closing 
under WIOA sec. 3(15)(B)(ii) or (iii);
    (2) What constitutes ``unemployed as a result of general economic 
conditions in the community in which the individual resides or because 
of natural disasters'' for determining the eligibility of self-employed 
individuals, including family members and farm workers or ranch hands, 
under WIOA sec. 3(15)(C); and
    (3) What constitutes ``unlikely to return to a previous industry or 
occupation'' under WIOA sec. 3(15)(A)(iii), consistent with Sec.  
680.660.



Sec.  680.140  What Workforce Innovation and Opportunity Act title I
adult and dislocated worker services are Local Workforce Development
Boards required and permitted to provide?

    (a) WIOA title I formula funds allocated to local areas for adults 
and dislocated workers must be used to provide career and training 
services through the one-stop delivery system. Local WDBs determine the 
most appropriate mix of these services, but both types must be available 
for eligible adults and dislocated workers. Different eligibility 
criteria apply for each type of services. See Sec. Sec.  680.120, 
680.130, and 680.210.
    (b) WIOA title I funds also may be used to provide the additional 
services described in WIOA sec. 134(d), including:
    (1) Job seeker services, such as:
    (i) Customer support to enable individuals with barriers to 
employment (including individuals with disabilities) and veterans, to 
navigate among multiple services and activities;
    (ii) Training programs for displaced homemakers and for individuals 
training for nontraditional employment (as defined in WIOA sec. 3(37) as 
occupations or fields of work in which individuals of one gender 
comprise less than 25 percent of the individuals so employed), in 
conjunction with programs operated in the local area;
    (iii) Work support activities for low-wage workers, in coordination 
with one-stop partners, which will provide opportunities for these 
workers to retain or enhance employment. These activities may include 
any activities available under the WIOA adult and dislocated worker 
programs in coordination with activities and resources available through 
partner programs. These activities may be provided in a manner that 
enhances the worker's ability to participate, for example by providing 
them at nontraditional hours or providing on-site child care;
    (iv) Supportive services, including needs-related payments, as 
described in subpart G of this part; and
    (v) Transitional jobs, as described in Sec.  680.190, to individuals 
with barriers to

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employment who are chronically unemployed or have an inconsistent work 
history;
    (2) Employer services, such as:
    (i) Customized screening and referral of qualified participants in 
training services to employers;
    (ii) Customized employment-related services to employers, employer 
associations, or other such organization on a fee-for-service basis that 
are in addition to labor exchange services available to employers under 
the Wagner-Peyser Act Employment Service;
    (iii) Activities to provide business services and strategies that 
meet the workforce investment needs of area employers, as determined by 
the Local WDB and consistent with the local plan (see Sec.  678.435 of 
this chapter and WIOA sec. 134(d)(1)(A)(ix)); and
    (3) Coordination activities, such as:
    (i) Employment and training activities in coordination with child 
support enforcement activities, as well as child support services and 
assistance activities, of the State and local agencies carrying out part 
D of title IV of the Social Security Act (42 U.S.C. 651 et seq.);
    (ii) Employment and training activities in coordination with 
cooperative extension programs carried out by the Department of 
Agriculture;
    (iii) Employment and training activities in coordination with 
activities to facilitate remote access to services provided through a 
one-stop delivery system, including facilitating access through the use 
of technology;
    (iv) Improving coordination between workforce investment activities 
and economic development activities carried out within the local area 
involved, and to promote entrepreneurial skills training and 
microenterprise services;
    (v) Improving services and linkages between the local workforce 
development system (including the local one-stop delivery system) and 
employers, including small employers, in the local area;
    (vi) Strengthening linkages between the one-stop delivery system and 
the unemployment insurance programs; and
    (vii) Improving coordination between employment and training 
activities and programs carried out in the local area for individuals 
with disabilities, including programs carried out by State agencies 
relating to intellectual disabilities and developmental disabilities, 
activities carried out by Statewide Independent Living Councils 
established under sec. 705 of the Rehabilitation Act of 1973 (29 U.S.C. 
796d), programs funded under part B of chapter 1 of title VII of such 
Act (29 U.S.C. 796e et seq.), and activities carried out by centers for 
independent living, as defined in sec. 702 of such Act (29 U.S.C. 796a);
    (4) Implementing a Pay-for-Performance contract strategy for 
training services in accordance with Sec. Sec.  683.500 through 683.530 
of this chapter for which up to 10 percent of the Local WDB's total 
adult and dislocated worker funds may be used;
    (5) Technical assistance for one-stop centers, partners, and 
eligible training providers (ETPs) on the provision of service to 
individuals with disabilities in local areas, including staff training 
and development, provision of outreach and intake assessments, service 
delivery, service coordination across providers and programs, and 
development of performance accountability measures;
    (6) Activities to adjust the economic self-sufficiency standards 
referred to in WIOA sec. 134(a)(3)(A)(xii) for local factors or 
activities to adopt, calculate or commission for approval, economic 
self-sufficiency standards for the local areas that specify the income 
needs of families, by family size, the number and ages of children in 
the family, and sub-State geographical considerations;
    (7) Implementing promising service to workers and businesses, which 
may include support for education, training, skill upgrading, and 
statewide networking for employees to become workplace learning advisors 
and maintain proficiency in carrying out the activities associated with 
such advising; and
    (8) Incumbent worker training programs, as described in subpart F of 
this part.

[[Page 253]]



Sec.  680.150  What career services must be provided to adults and
dislocated workers?

    (a) At a minimum, all of the basic career services described in WIOA 
secs. 134(c)(2)(A)(i)-(xi) and Sec.  678.430(a) of this chapter must be 
provided in each local area through the one-stop delivery system.
    (b) Individualized career services described in WIOA sec. 
134(c)(2)(A)(xii) and Sec.  678.430(b) of this chapter must be made 
available, if determined appropriate in order for an individual to 
obtain or retain employment.
    (c) Follow-up services, as described in WIOA sec. 134(c)(2)(A)(xiii) 
and Sec.  678.430(c) of this chapter, must be made available, as 
determined appropriate by the Local WDB, for a minimum of 12 months 
following the first day of employment, to participants who are placed in 
unsubsidized employment.



Sec.  680.160  How are career services delivered?

    Career services must be provided through the one-stop delivery 
system. Career services may be provided directly by the one-stop 
operator or through contracts with service providers that are approved 
by the Local WDB. The Local WDB only may be a provider of career 
services when approved by the chief elected official and the Governor in 
accordance with the requirements of WIOA sec. 107(g)(2) and Sec.  
679.410 of this chapter.



Sec.  680.170  What is the individual employment plan?

    The individual employment plan (IEP) is an individualized career 
service, under WIOA sec. 134(c)(2)(A)(xii)(II), that is developed 
jointly by the participant and career planner when determined 
appropriate by the one-stop center or one-stop partner. The plan is an 
ongoing strategy to identify employment goals, achievement objectives, 
and an appropriate combination of services for the participant to 
achieve the employment goals.



Sec.  680.180  What is an internship or work experience for adults
and dislocated workers?

    For the purposes of WIOA sec. 134(c)(2)(A)(xii)(VII), an internship 
or work experience is a planned, structured learning experience that 
takes place in a workplace for a limited period of time. Internships and 
other work experience may be paid or unpaid, as appropriate and 
consistent with other laws, such as the Fair Labor Standards Act. An 
internship or other work experience may be arranged within the private 
for profit sector, the non-profit sector, or the public sector. Labor 
standards apply in any work experience setting where an employee/
employer relationship, as defined by the Fair Labor Standards Act, 
exists. Transitional jobs are a type of work experience, as described in 
Sec. Sec.  680.190 and 680.195.



Sec.  680.190  What is a transitional job?

    A transitional job is one that provides a time-limited work 
experience, that is wage-paid and subsidized, and is in the public, 
private, or non-profit sectors for those individuals with barriers to 
employment who are chronically unemployed or have inconsistent work 
history, as determined by the Local WDB. These jobs are designed to 
enable an individual to establish a work history, demonstrate work 
success in an employee-employer relationship, and develop the skills 
that lead to unsubsidized employment.



Sec.  680.195  What funds may be used for transitional jobs?

    The local area may use up to 10 percent of their combined total of 
adult and dislocated worker allocations for transitional jobs as 
described in Sec.  680.190. Transitional jobs must be combined with 
comprehensive career services (see Sec.  680.150) and supportive 
services (see Sec.  680.900).



                       Subpart B_Training Services



Sec.  680.200  What are training services for adults and dislocated
workers?

    Types of training services are listed in WIOA sec. 134(c)(3)(D) and 
in paragraphs (a) through (k) of this section.

[[Page 254]]

This list is not all-inclusive and additional training services may be 
provided.
    (a) Occupational skills training, including training for 
nontraditional employment;
    (b) On-the-job training (OJT) (see Sec. Sec.  680.700, 680.710, 
680.720, and 680.730);
    (c) Incumbent worker training, in accordance with WIOA sec. 
134(d)(4) and Sec. Sec.  680.780, 680.790, 680.800, 680.810, and 
680.820;
    (d) Programs that combine workplace training with related 
instruction, which may include cooperative education programs;
    (e) Training programs operated by the private sector;
    (f) Skills upgrading and retraining;
    (g) Entrepreneurial training;
    (h) Transitional jobs in accordance with WIOA sec 134(d)(5) and 
Sec. Sec.  680.190 and 680.195;
    (i) Job readiness training provided in combination with services 
listed in paragraphs (a) through (h) of this section;
    (j) Adult education and literacy activities, including activities of 
English language acquisition and integrated education and training 
programs, provided concurrently or in combination with training services 
listed in paragraphs (a) through (g) of this section; and
    (k) Customized training conducted with a commitment by an employer 
or group of employers to employ an individual upon successful completion 
of the training (see Sec. Sec.  680.760 and 680.770).



Sec.  680.210  Who may receive training services?

    Under WIOA sec. 134(c)(3)(A) training services may be made available 
to employed and unemployed adults and dislocated workers who:
    (a) A one-stop center or one-stop partner determines, after an 
interview, evaluation, or assessment, and career planning, are:
    (1) Unlikely or unable to obtain or retain employment that leads to 
economic self-sufficiency or wages comparable to or higher than wages 
from previous employment through career services;
    (2) In need of training services to obtain or retain employment 
leading to economic self-sufficiency or wages comparable to or higher 
than wages from previous employment; and
    (3) Have the skills and qualifications to participate successfully 
in training services;
    (b) Select a program of training services that is directly linked to 
the employment opportunities in the local area or the planning region, 
or in another area to which the individuals are willing to commute or 
relocate;
    (c) Are unable to obtain grant assistance from other sources to pay 
the costs of such training, including such sources as State-funded 
training funds, Trade Adjustment Assistance (TAA), and Federal Pell 
Grants established under title IV of the Higher Education Act of 1965, 
or require WIOA assistance in addition to other sources of grant 
assistance, including Federal Pell Grants (provisions relating to fund 
coordination are found at Sec.  680.230 and WIOA sec. 134(c)(3)(B)); and
    (d) If training services are provided through the adult funding 
stream, are determined eligible in accordance with the State and local 
priority system in effect for adults under WIOA sec. 134(c)(3)(E) and 
Sec.  680.600.



Sec.  680.220  Are there particular career services an individual
must receive before receiving training services under the Workforce
Innovation and Opportunity Act?

    (a) Yes, except as provided by paragraph (b) of this section, an 
individual must at a minimum receive either an interview, evaluation, or 
assessment, and career planning or any other method through which the 
one-stop center or partner can obtain enough information to make an 
eligibility determination to be determined eligible for training 
services under WIOA sec. 134(c)(3)(A)(i) and Sec.  680.210. Where 
appropriate, a recent interview, evaluation, or assessment, may be used 
for the assessment purpose.
    (b) The case file must contain a determination of need for training 
services under Sec.  680.210 as determined through the interview, 
evaluation, or assessment, and career planning informed by local labor 
market information and training provider performance

[[Page 255]]

information, or through any other career service received. There is no 
requirement that career services be provided as a condition to receipt 
of training services; however, if career services are not provided 
before training, the Local WDB must document the circumstances that 
justified its determination to provide training without first providing 
the services described in paragraph (a) of this section.
    (c) There is no Federally required minimum time period for 
participation in career services before receiving training services.



Sec.  680.230  What are the requirements for coordination of
Workforce Innovation and Opportunity Act training funds and other
grant assistance?

    (a) WIOA funding for training is limited to participants who:
    (1) Are unable to obtain grant assistance from other sources to pay 
the costs of their training; or
    (2) Require assistance beyond that available under grant assistance 
from other sources to pay the costs of such training. Programs and 
training providers must coordinate funds available to pay for training 
as described in paragraphs (b) and (c) of this section. In making the 
determination under this paragraph (a), one-stop centers may take into 
account the full cost of participating in training services, including 
the cost of support services and other appropriate costs.
    (b) One-stop centers must coordinate training funds available and 
make funding arrangements with one-stop partners and other entities to 
apply the provisions of paragraph (a) of this section. One-stop centers 
must consider the availability of other sources of grants to pay for 
training costs such as Temporary Assistance for Needy Families (TANF), 
State-funded training funds, and Federal Pell Grants, so that WIOA funds 
supplement other sources of training grants.
    (c) A WIOA participant may enroll in WIOA-funded training while his/
her application for a Pell Grant is pending as long as the one-stop 
center has made arrangements with the training provider and the WIOA 
participant regarding allocation of the Pell Grant, if it is 
subsequently awarded. In that case, the training provider must reimburse 
the one-stop center the WIOA funds used to underwrite the training for 
the amount the Pell Grant covers, including any education fees the 
training provider charges to attend training. Reimbursement is not 
required from the portion of Pell Grant assistance disbursed to the WIOA 
participant for education-related expenses.



                 Subpart C_Individual Training Accounts



Sec.  680.300  How are training services provided?

    Training services for eligible individuals are typically provided by 
training providers who receive payment for their services through an 
ITA. The ITA is a payment agreement established on behalf of a 
participant with a training provider. WIOA title I adult and dislocated 
workers purchase training services from State eligible training 
providers they select in consultation with the career planner, which 
includes discussion of program quality and performance information on 
the available eligible training providers. Payments from ITAs may be 
made in a variety of ways, including the electronic transfer of funds 
through financial institutions, vouchers, or other appropriate methods. 
Payments also may be made incrementally, for example, through payment of 
a portion of the costs at different points in the training course. Under 
limited conditions, as provided in Sec.  680.320 and WIOA sec. 
134(d)(3)(G), a Local WDB may contract for these services, rather than 
using an ITA for this purpose. In some limited circumstances, the Local 
WDB may itself provide the training services, but only if it obtains a 
waiver from the Governor for this purpose, and the Local WDB meets the 
other requirements of Sec.  679.410 of this chapter and WIOA sec. 
107(g)(1).



Sec.  680.310  Can the duration and amount of Individual Training
Accounts be limited?

    (a) Yes, the State or Local WDB may impose limits on ITAs, such as 
limitations on the dollar amount and/or duration.

[[Page 256]]

    (b) Limits to ITAs may be established in different ways:
    (1) There may be a limit for an individual participant that is based 
on the needs identified in the IEP, such as the participant's 
occupational choice or goal and the level of training needed to succeed 
in that goal; or
    (2) There may be a policy decision by the State WDB or Local WDB to 
establish a range of amounts and/or a maximum amount applicable to all 
ITAs.
    (c) Limitations established by State or Local WDB policies must be 
described in the State or Local Plan, respectively, but must not be 
implemented in a manner that undermines WIOA's requirement that training 
services are provided in a manner that maximizes customer choice in the 
selection of an ETP. Exceptions to ITA limitations may be provided for 
individual cases and must be described in State or Local WDB policies.
    (d) An individual may select training that costs more than the 
maximum amount available for ITAs under a State or local policy when 
other sources of funds are available to supplement the ITA. These other 
sources may include: Pell Grants; scholarships; severance pay; and other 
sources.



Sec.  680.320  Under what circumstances may mechanisms other than
Individual Training Accounts be used to provide training services?

    (a) Contracts for services may be used instead of ITAs only when one 
or more of the following five exceptions apply, and the local area has 
fulfilled the consumer choice requirements of Sec.  680.340:
    (1) When the services provided are on-the-job-training (OJT), 
customized training, incumbent worker training, or transitional jobs.
    (2) When the Local WDB determines that there are an insufficient 
number of eligible training providers in the local area to accomplish 
the purpose of a system of ITAs. The determination process must include 
a public comment period for interested providers of at least 30 days, 
and be described in the Local Plan.
    (3) When the Local WDB determines that there is a training services 
program of demonstrated effectiveness offered in the area by a 
community-based organization or another private organization to serve 
individuals with barriers to employment, as described in paragraph (b) 
of this section. The Local WDB must develop criteria to be used in 
determining demonstrated effectiveness, particularly as it applies to 
the individuals with barriers to employment to be served. The criteria 
may include:
    (i) Financial stability of the organization;
    (ii) Demonstrated performance in the delivery of services to 
individuals with barriers to employment through such means as program 
completion rate; attainment of the skills, certificates or degrees the 
program is designed to provide; placement after training in unsubsidized 
employment; and retention in employment; and
    (iii) How the specific program relates to the workforce investment 
needs identified in the local plan.
    (4) When the Local WDB determines that it would be most appropriate 
to contract with an institution of higher education (see WIOA sec. 
3(28)) or other provider of training services in order to facilitate the 
tr