Workforce Innovation and Opportunity Act; Notice of Proposed Rulemaking

SUMMARY

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

 
CONTENT

Federal Register, Volume 80 Issue 73 (Thursday, April 16, 2015)

Federal Register Volume 80, Number 73 (Thursday, April 16, 2015)

Proposed Rules

Pages 20689-20966

From the Federal Register Online via the Government Printing Office www.gpo.gov

FR Doc No: 2015-05530

Page 20689

Vol. 80

Thursday,

No. 73

April 16, 2015

Part III

Department of Labor

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

Employment and Training Administration

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

20 CFR Parts 601, 651, 652 et al.

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

Page 20690

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

DEPARTMENT OF LABOR

Employment and Training Administration

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

Docket No. ETA-2015-0001

RIN 1205-AB73

Workforce Innovation and Opportunity Act; Notice of Proposed Rulemaking

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

ACTION: Notice of Proposed Rulemaking (NPRM).

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

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

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

ADDRESSES: You may submit comments, identified by docket number ETA-

2015-0001, for Regulatory Information Number (RIN) 1205-AB73, by one of the following methods:

Federal e-Rulemaking Portal: http://www.regulations.gov. Follow the Web site instructions for submitting comments.

Mail and hand delivery/courier: Written comments, disk, and CD-ROM submissions may be mailed to Adele Gagliardi, Administrator, Office of Policy Development and Research, U.S. Department of Labor, 200 Constitution Avenue NW., Room N-5641, Washington, DC 20210.

Instructions: Label all submissions with ``RIN 1205-AB73.''

Please submit your comments by only one method. Please be advised that the Department will post all comments received that related to this NPRM on http://www.regulations.gov without making any change to the comments or redacting any information. The http://www.regulations.gov Web site is the Federal e-rulemaking portal and all comments posted there are available and accessible to the public. Therefore, the Department recommends that commenters remove personal information such as Social Security Numbers (SSNs), personal addresses, telephone numbers, and email addresses included in their comments as such information may become easily available to the public via the http://www.regulations.gov Web site. It is the responsibility of the commenter to safeguard personal information.

Also, please note that due to security concerns, postal mail delivery in Washington, DC may be delayed. Therefore, the Department encourages the public to submit comments on http://www.regulations.gov.

Docket: All comments on this proposed rule will be available on the http://www.regulations.gov Web site and can be found using RIN 1205-

AB73. The Department also will make all the comments it receives available for public inspection by appointment during normal business hours at the above address. If you need assistance to review the comments, the Department will provide appropriate aids such as readers or print magnifiers. The Department will make copies of this proposed rule available, upon request, in large print and electronic file on computer disk. To schedule an appointment to review the comments and/or obtain the proposed rule in an alternative format, contact the Office of Policy Development and Research (OPDR) at (202) 693-3700 (this is not a toll-free number). You may also contact this office at the address listed below.

Comments under the Paperwork Reduction Act (PRA): In addition to filing comments with ETA, persons wishing to comment on the information collection (IC) aspects of this rule may send comments to: Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-ETA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503, Fax: 202-395-6881 (this is not a toll-free number), email: OIRA_submission@omb.eop.gov.

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

SUPPLEMENTARY INFORMATION:

Preamble Table of Contents

I. Executive Summary

II. Acronyms and Abbreviations

III. Background

  1. Workforce Innovation and Opportunity Act Principles

  2. Major Changes From Current Workforce Investment Act of 1998

  3. Rule Format

  4. Legal Basis

    IV. Section-by-Section Discussion of Proposal

  5. Part 603--Federal-State Unemployment Compensation Program

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

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

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

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

  10. Part 682--Statewide Activities Under Title I of the Workforce Innovation and Opportunity Act

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

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

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

  13. Part 686--The Job Corps Under Title I of the Workforce Innovation and Opportunity Act

  14. Part 687--National Dislocated Worker Grants

    L. Part 688--Provisions Governing the YouthBuild Program

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

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

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

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

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

    V. Rulemaking Analyses and Notices

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

  21. Paperwork Reduction Act

  22. Executive Order 13132 (Federalism)

  23. Unfunded Mandates Reform Act of 1995

  24. Plain Language

  25. Assessment of Federal Regulations and Policies on Families

  26. Regulatory Flexibility Act

    Page 20691

  27. Small Business Regulatory Enforcement Fairness Act of 1996

    I. Executive Order 13175 (Indian Tribal Governments)

  28. Executive Order 12630 (Government Actions and Interference With Constitutionally Protected Property Rights)

  29. Executive Order 12988 (Civil Justice Reform)

    L. Executive Order 13211 (Energy Supply)

    I. Executive Summary

    On July 22, 2014, President Obama signed the Workforce Innovation and Opportunity Act (WIOA) (Pub. L. 113-128), comprehensive legislation that reforms and modernizes the public workforce system. It reaffirms the role of the public workforce system, and brings together and enhances several key employment, education, and training programs. WIOA provides resources, services, and leadership tools for the workforce system to help individuals find good jobs and stay employed and improves employer prospects for success in the global marketplace. It ensures that the workforce system operates as a comprehensive, integrated and streamlined system to provide pathways to prosperity for those it serves and continuously improves the quality and performance of its services.

    The Department of Labor is publishing this NPRM to implement those provisions of WIOA that affect the core programs under titles I and III, and the Job Corps and national programs authorized under title I which will administered by the Department. In addition to this NPRM, the Departments of Education (ED) and Labor (DOL) are jointly publishing an NPRM to implement those provisions of WIOA that affect all of the WIOA core programs (titles I-IV) and which will have to be jointly overseen and administered by both Departments. Readers should note that there are a number of cross-references to the Joint NPRM published by ED and DOL, with particular focus on those provisions in the Joint NPRM that have to do with performance reporting among all the core programs. Finally, this NPRM has been structured so that the proposed Code of Federal Regulations (CFR) parts will align with the Joint NPRM CFR parts in once all of the proposed rules of have been finalized.

    WIOA seeks to deliver a broad array of integrated services to individuals seeking jobs and skills training, as well as employers seeking skilled workers by improving the workforce system, more closely aligning it with regional economies and strengthening the network of about 2,500 one-stop centers. Customers must have access to a seamless system of high-quality services through coordination of programs, services and governance structures. The Act builds closer ties among key workforce partners--business leaders, workforce boards, labor unions, community colleges, non-profit organizations, youth-serving organizations, and State and local officials--in striving for a more job-driven approach to training and skills development.

    WIOA will help job seekers and workers access employment, education, training, and support services to succeed in the labor market and match employers with the skilled workers they need to compete in the global economy. The purposes of WIOA described in the Act include:

    Increasing access to and opportunities for the employment, education, training, and support services that individuals need, particularly those with barriers to employment.

    Supporting the alignment of workforce investment, education, and economic development systems, in support of a comprehensive, accessible, and high-quality workforce development system.

    Improving the quality and labor market relevance of workforce investment, education, and economic development efforts.

    Promoting improvement in the structure and delivery of services.

    Increasing the prosperity of workers and employers.

    Providing workforce development activities that increase employment, retention, and earnings of participants and that increase post-secondary credential attainment and as a result, improve the quality of the workforce, reduce welfare dependency, increase economic self-sufficiency, meet skill requirements of employers, and enhance productivity, and competitiveness of the nation.

    WIOA is complemented by the groundwork laid by the Administration-

    wide review of employment, education, and training programs to ensure Federal agencies do everything possible to prepare ready-to-work-

    Americans with ready-to-be-filled jobs. The review identified seven priorities for these Federal programs:

    Work up-front with employers to determine local or regional hiring needs and design training programs that are responsive to those needs;

    Offer work-based learning opportunities with employers--

    including on-the-job training, internships, and pre-apprenticeships and registered apprenticeships--as training paths to employment;

    Make better use of data to drive accountability, inform what programs are offered and what is taught, and offer user-friendly information for job seekers to choose what programs and pathways work for them and are likely to result in a job;

    Measure and evaluate employment and earnings outcomes;

    Promote a seamless progression from one educational stepping stone to another, and across work-based training and education, so individuals' efforts result in progress;

    Break down barriers to accessing job-driven training and hiring for any American who is willing to work, including access to supportive services and relevant guidance; and

    Create regional collaborations among American Job Centers, education institutions, labor, and nonprofits.

    As WIOA implementation progresses, success in accomplishing the purposes of WIOA at the State, local, and regional levels, will be assessed by whether:

    One-stop centers are recognized as a valuable community resource and are known for high quality, comprehensive services for customers.

    The core programs and one-stop partners provide seamless, integrated customer service.

    Program performance, labor market and related data drive policy and strategic decisions and inform customer choice.

    Youth programs reconnect out-of-school youth (OSY) to education and jobs.

    Job seekers access quality career services either online or in a one-stop career center through a ``common front door'' that connects them to the right services.

    One-stop centers facilitate access to high quality, innovative education and training.

    Services to businesses are robust and effective, meeting businesses' workforce needs across the business lifecycle.

    II. Acronyms and Abbreviations

    AEFLA Adult Education and Family Literacy Act

    ALJ Administrative Law Judge

    ANVSA Alaska Native Village Service Area

    AOP Agricultural Outreach Plan

    ARS Agricultural Recruitment System

    AWOL Absent Without Official Leave

    BLS Bureau of Labor Statistics

    CBO Community-based organization

    CCC Civilian Conservation Center

    CEO Chief elected official

    CFR Code of Federal Regulations

    Complaint System Employment Service and Employment-Related Law Complaint System

    Page 20692

    COSO Committee of Sponsoring Organizations of the Treadway Commission

    CTT Career Technical Training

    DINAP Division of Indian and Native American Programs

    DOL Department of Labor

    ED Department of Education

    E.O. Executive Order

    EO Equal opportunity

    ES Employment Service

    ESA Employment Standards Administration

    ESARS Employment Security Automated Reporting System

    ETA Employment and Training Administration

    ETP Eligible training provider

    ETPL Eligible training provider list

    FECA Federal Employees Compensation Act

    FEIN Federal employer identification number

    FEMA Federal Emergency Management Agency

    FERPA Family Educational Rights and Privacy Act

    FLSA Fair Labor Standards Act

    FOA Funding Opportunity Announcement

    FR Federal Register

    GED General Educational Development

    GIS Geographic information system

    GPRA Government Performance and Results Act

    HEARTH Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009

    HHS Department of Health and Human Services

    HSD High School Diploma

    HUD U.S. Department of Housing and Urban Development

    IC Information collection

    IEVS Income and Eligibility Verification System

    INA Indian and Native American

    ISDEAA Indian Self-Determination and Education Assistance Act

    ISY In-school youth

    ITA Individual Training Account

    JIS Job Information Service

    JS Job Service

    JTPA Job Training Partnership Act

    JVSG Jobs for Veterans State Grants

    LEHD Longitudinal Employer-Household Dynamics

    LEP Limited English proficiency

    MOU Memorandum of Understanding

    MSFW Migrant and Seasonal Farmworker

    NAACP National Association for the Advancement of Colored People

    NAFTA North American Free Trade Agreement

    NAICS North American Industry Classification System

    NDWG National Dislocated Worker Grant

    NEG National Emergency Grant

    NFJP National Farmworker Jobs Program

    NICRA Negotiated Indirect Cost Rate Agreement

    NPRM Notice of Proposed Rulemaking

    OALJ Office of Administrative Law Judges

    OBS On-board strength

    OFLC Office of Foreign Labor Certification

    OJT On-the-job training

    OMB Office of Management and Budget

    OMS Outcome Measurement System

    OPDR Office of Policy Development and Research

    OSHA Occupational Safety and Health Administration

    OSY Out-of-school youth

    OTSA Oklahoma Tribal Service Area

    OWI Office of Workforce Investment

    PART Program Assessment and Rating Tool

    PBP Program Budget Plan

    PRA Paperwork Reduction Act of 1995

    PRH Policy and Requirements Handbook

    Pub. L. Public Law

    PY Program year

    RFA Regulatory Flexibility Act

    RFP Requests for proposals

    Richey Order Judge Richey Court Order

    RIN Regulatory Information Number

    SBA Small Business Administration

    SBREFA Small Business Regulatory Enforcement Fairness Act of 1996

    SDA Service delivery area

    sec. Section of a Public Law or the United States Code

    SESA State Employee Security Act

    SMA State Monitor Advocate

    SOC Standard Occupational Classification

    SNAP Supplemental Nutrition Assistance Program

    SSA Social Security Act

    SSN Social Security Number

    State Board State Workforce Development Board

    STAWRS Simplified Tax and Wage Reporting System

    SWA State Workforce Agency

    TAA Trade Adjustment Assistance

    TANF Temporary Assistance for Needy Families

    TEGL Training and Employment Guidance Letter

    TEN Training and Employment Notice

    UC Unemployment Compensation

    UCX Unemployment Compensation for Ex-service members

    UI Unemployment insurance

    U.S.C. United States Code

    VA Department of Veterans Affairs

    VETS Veterans' Employments and Training Service

    VR Vocational rehabilitation

    Wagner-Peyser Wagner-Peyser Act of 1933

    WARN Worker Adjustment and Retraining Notification

    WDB Workforce Development Board

    WHD Wage and Hour Division

    WIA Workforce Investment Act of 1998

    WIAC Workforce Information Advisory Council

    WIC Workforce Information Council

    WIOA Workforce Innovation and Opportunity Act of 2014

    WLMI Workforce and Labor Market Information

    WLMIS Workforce and Labor Market Information System

    WRIS Wage Record Interchange System

    III. Background

  30. Workforce Innovation and Opportunity Act Principles

    On July 22, 2014, President Obama signed the WIOA, the first legislative reform of the public workforce system in more than 15 years, which passed Congress by a wide bipartisan majority. WIOA supersedes the Workforce Investment Act of 1998 (WIA) and amends the Adult Education and Family Literacy Act (AEFLA), the Wagner-Peyser Act, and the Rehabilitation Act of 1973. WIOA presents an extraordinary opportunity for the workforce system to accelerate its transformational efforts and demonstrate its ability to improve job and career options for our citizens through an integrated, job-driven public workforce system that links diverse talent to our nation's businesses. It supports the development of strong, vibrant regional economies where businesses thrive and people want to live and work.

    WIOA reaffirms the role of the customer-focused one-stop delivery system, a cornerstone of the public workforce investment system, and enhances and increases coordination among several key employment, education, and training programs. Most provisions in WIOA take effect on July 1, 2015, the first full program year (PY) after enactment, although the new State plans and performance accountability system take effect July 1, 2016. Title IV, however, took effect upon enactment.

    WIOA presents an extraordinary opportunity for the workforce system to accelerate its transformational efforts and demonstrate its ability to improve job and career options for our citizens through an integrated, job-driven public workforce system that links diverse talent to our nation's businesses. It supports the development of strong, vibrant regional economies where businesses thrive and people want to live and work.

    WIOA is designed to help job seekers access employment, education, training, and support services to succeed in the labor market and to match employers with the skilled workers they need to compete in the global economy. WIOA has six main purposes: (1) Increasing access to and opportunities for the employment, education, training, and support services for individuals, particularly those with barriers to employment; (2) supporting the alignment of workforce investment, education, and economic development systems in support of a comprehensive, accessible, and high-quality workforce development system; (3) improving the quality and labor market relevance of workforce investment, education, and economic development efforts; (4) promoting improvement in the structure and delivery of services; (5) increasing the prosperity of workers and employers; and (6) providing workforce development activities that increase

    Page 20693

    employment, retention, and earnings of participants and that increase post-secondary credential attainment and as a result, improve the quality of the workforce, reduce welfare dependency, increase economic self-sufficiency, meet skill requirements of employers, and enhance productivity and competitiveness of the nation.

    Beyond achieving the requirements of the new law, WIOA offers an opportunity to continue to modernize the workforce system, and achieve key hallmarks of a customer centered workforce system, where the needs of business and workers drive workforce solutions, where one-stop career centers and partners provide excellent customer service to job seekers and businesses, where the workforce system pursues continuous improvement through evaluation and data-driven policy, and where the workforce system supports strong regional economies.

    Regulations and guidance implementing titles I and III are issued by DOL, with the exception of joint regulations that will be issued by DOL and ED on the provisions in title I relating to unified and combined planning, performance, and the one-stop delivery system. Regulations and guidance on implementing titles II and IV will be issued by ED.

    WIOA retains much of the structure of WIA, but with critical changes to advance greater coordination and alignment. Under title I-A, each State will be required to develop a single, unified strategic plan that is applicable to four core workforce development programs. The core programs consist of (1) the adult, dislocated worker, and youth formula programs administered by the Department under title I of WIOA; (2) the Adult Education and Family Literacy program administered by ED under title II of WIOA; (3) the Wagner-Peyser Act employment services (ES) program administered by the Department, as amended by title III of WIOA; and (4) the vocational rehabilitation (VR) programs under title I of the Rehabilitation Act administered by ED, as amended by title IV of WIOA. In addition to core programs, WIOA provides States the opportunity to include other key one-stop partner programs such as the Supplemental Nutrition Assistance Program (SNAP), Unemployment Insurance (UI), Temporary Assistance for Needy Families (TANF), and Perkins Career Technical Education in a Combined State Plan. The law also includes a common performance accountability system applicable to all of the core programs.

    The remainder of WIOA title I authorizes the adult, dislocated worker, and youth formula programs; the State and local workforce development (formerly investment) boards; the designation of regions and local areas; local plans; the one-stop system; national programs, including Job Corps, YouthBuild, Indian and Native American programs, and Migrant and Seasonal Farmworker (MSFW) programs; technical assistance and evaluations; and general administrative provisions currently authorized under title I of WIA. Title II retains and amends the Adult Education and Family Literacy Program currently authorized under title II of WIA. Title III contains amendments to the Wagner-

    Peyser Act relating to the ES and Workforce and Labor Market Information System (WLMIS), and requires the Secretary to establish a Workforce Information Advisory Council (WIAC). Title IV contains amendments to the Rehabilitation Act of 1973, which were also included under title IV of WIA; it also requires the Secretary of Labor to establish an Advisory Committee on Increasing Competitive Integrated Employment for Individuals with Disabilities. Finally, title V contains general provisions similar to the provisions applicable under title V of WIA as well as the effective dates and transition provisions.

    Since the enactment of WIOA, the Department has used a variety of means to coordinate with other Federal agencies that have roles and responsibilities under the Act. The Department works closely with staff at ED and the Department of Health and Human Services (HHS) on all shared policy and implementation matters. Key areas of collaboration include the Unified State Plan, performance reporting, one-stop service delivery, and services to disconnected youth and to individuals with disabilities. WIOA created an opportunity to enhance coordination and collaboration across other Federal programs through the Combined State Plan and the Department meets with the other Federal agencies regarding those plans.

    Before publishing the NPRM, the Department solicited broad input through a variety of mechanisms including:

    Issued Training and Employment Notice (TEN) No. 05-14 to notify the public workforce system that WIOA was enacted, accompanied by a statutory implementation timeline, a fact sheet that identified key reforms to the public workforce system, and a list of frequently asked questions.

    Issued TEN No. 06-14 to announce a series of webinars to engage WIOA stakeholders in implementation of WIOA.

    Issued TEN No. 12-14 to provide guidance to States and other recipients of funds under title I of WIA on the use and reporting of PY 2014 funds for planning and implementation activities associated with the transition to WIOA.

    Established a WIOA Resource Page (www.doleta.gov/WIOA) to provide updated information related to WIOA implementation to the public workforce system and stakeholders;

    Established a dedicated email address for the public workforce system and stakeholders to ask questions and offer ideas related to WIOA (DOL.WIOA@dol.gov);

    Conducted, in conjunction with ED and HHS outreach calls, webinars, and stakeholder and in-person town halls in each ETA region. The Department and its Federal partners hosted 10 town halls across the country, reaching over 2,000 system leaders and staff representing core programs and one-stop partners, employers, and performance staff. This included a town hall with Indian and Native American leaders and membership organizations serving Indians and Native Americans, Hawaiians, and Alaskan Natives as well as a formal consultation with members of the Native American Employment and Training Advisory Council to the Secretary of Labor.

    Conducted readiness assessments to implement WIOA in all States and 70 local workforce areas to inform technical assistance.

  31. Major Changes From Current Workforce Investment Act of 1998

    This section contains a summary of the major changes from the current WIA. As indicated above, WIOA retains much of the structure of WIA.

    Major changes in WIOA are:

    Aligns Federal investments to support job seekers and employers. The Act provides for States to prepare a single Unified State Plan that identifies a 4-year strategy for achieving the strategic vision and goals of the State for preparing an educated and skilled workforce and for meeting the skilled workforce needs of employers. States govern the core programs as one system assessing strategic needs and aligning them with service strategies to ensure the workforce system meets employment and skill needs of all workers and employers.

    Streamlines the governing bodies that establish State, regional and local workforce investment priorities. WIOA makes State and Local Workforce

    Page 20694

    Development Boards more agile and well positioned to meet local and regional employers' workforce needs by reducing the size of the boards and assigning them additional responsibilities to assist in the achievement of the State and local strategic workforce vision and goals. The State Workforce Development Boards (State Boards) continue to have a majority of business representation and a business chair that work for all workers and jobseekers, including low-skilled adults, youth, and individuals with disabilities, while they foster innovation, and ensure streamlined operations and service delivery excellence.

    Creates a common performance accountability system and information for job seekers and the public. WIOA ensures that Federal investments in employment, education, and training programs are evidence-based and data-driven, and accountable to participants and the public. It establishes a performance accountability system that applies across the core programs, by generally applying six primary indicators of performance: entry into unsubsidized employment at two points in time, median earnings, attainment of post-secondary credentials, measurable skill gains, and effectiveness in serving employers.

    Fosters regional collaboration to meet the needs of regional economies. WIOA promotes alignment of workforce development programs with regional economic development strategies to meet the needs of local and regional employers.

    Enhances access to high quality services through the network of one-stop system. WIOA helps jobseekers and employers acquire the services they need in centers and online, clarifies the roles and responsibilities of the one-stop partner programs, adds the TANF program as a required one-stop partner unless the Governor objects, requires competitive selection of one-stop operators, and requires the use by the one-stop system of a common one-stop delivery identifier or brand that is to be developed by the Secretary of Labor.

    Improves services to individuals with disabilities. WIOA stresses physical and programmatic accessibility, including the use of accessible technology to increase individuals with disabilities' access to high quality workforce services.

    Makes key investments for disconnected youth. WIOA emphasizes services to disconnected youth to prepare them for successful employment by requiring that a minimum of 75 percent of youth formula program funds be used to help OSY, in contrast to the 30 percent required under WIA. WIOA increases OSYs' access to WIOA services, including pre-apprenticeship opportunities that result in registered apprenticeship. It adds a requirement that at least 20 percent of formula funds at the local level be used on work-based training activities such as summer jobs, on-the-job training (OJT), and apprenticeship.

    Helps Employers Find Workers with the Necessary Skills. WIOA contributes to economic growth and business expansion by ensuring the workforce system is job-driven--matching employers with skilled individuals. WIOA requires Local Boards to promote the use of industry and sector partnerships that include key stakeholders in an industry cluster or sector that work with public entities to identify and address the workforce needs of multiple employers.

    Additionally, successful implementation of many of the approaches called for within WIOA, such as career pathways and sector strategies, require robust relationships across programs and with businesses, economic development, education and training institutions, including community colleges and career and technical education, local entities, and supportive services agencies.

  32. Rule Format

    The NPRM format reflects the Department's commitment to writing regulations that are reader-friendly. The Department has attempted to make this NPRM clear and easy to understand. To this end, the regulatory text is presented in a ``question and answer'' format and organized consistent with the Act. While the Department has provided cross-references to the statute(s), the Department also has included the Act's provisions in the answers for completeness.

    While the Department has anticipated many issues that may arise and provided appropriate directions, there are many other areas where the Department continues to weigh options. Thus, the Department raises questions throughout the preamble where the Department seeks additional information or where the Department is weighing options and seek comments.

  33. Legal Basis

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

    IV. Section-by-Section Discussion of Proposal

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

    Relationship Between 20 CFR Part 603 and WIOA

    The Department is amending its regulations at 20 CFR part 603 to help States comply with the WIOA. WIOA requires that States use ``quarterly wage records'' in assessing the performance of certain Federally-funded employment and training programs.

    States must make available performance reports for local areas and for eligible training providers (ETPs) under title I of the WIOA. WIOA also requires that States cooperate in evaluations, by the Departments of Labor and Education, of State programs overseen by those Federal agencies.

    To help States comply with these requirements, the Department has determined that it would be useful to more clearly and specifically, describe in unemployment compensation (UC) confidentiality regulations, the standards for disclosure between the State UC, workforce, and education systems. This proposal amends current regulations to clarify, in a limited fashion, those State government officials with whom the State may share certain confidential information in order to carry out requirements under the law. The regulations enumerate certain additional public officials who may access confidential State wage records that are the basis for the State's performance reporting. Ensuring such access to these State records would allow State agencies to better manage the information for the purpose of making Federally-

    required reports on certain program outcomes, and to cooperate more effectively and be more informative with respect to Federal program evaluations.

    WIOA section (sec.) 116(i)(2) and proposed regulation Sec. 677.175 (a) require State workforce, training, and education programs to use quarterly wage records to measure the progress of

    Page 20695

    the State on State and local performance accountability measures. Under WIA, the Department interpreted the reference to ``quarterly wage records'' in sec. 136(f)(2) to require States to use the confidential UC information in the employer-provided wage reports collected under sec. 1137 of the Social Security Act (SSA), 42 U.S.C. 1320b-7. (See 20 CFR 677.175.) These are the reports that the State UC agency obtains from employers for determining UC tax liability, monetary eligibility, or for cross-matching against State UC agencies' files to determine if improper payments have been made. The Department adheres to this interpretation in implementing WIOA sec. 116(i)(2).

    The ``wage information'' defined in Sec. 603.2(k)--which the regulations allow State agencies to disclose under limited circumstances--includes the three data categories or elements (wages, SSN(s), employer information) that States must use as their data source for State and local performance reporting under WIOA. The proposed WIOA implementing regulation at 20 CFR 677.175 (b) defines ``quarterly wage record information'' to include three data elements or categories of data elements: (1) A program participant's SSN(s); (2) information about the wages program participants earn after exiting from the program; and (3) the name, address, State and (when known) the Federal Employer Identification Number (FEIN) of the employer paying those wages. The disclosure of such wage record data is governed by UC part 603 regulations, which establish requirements for maintaining the confidentiality of UC information along with standards for mandatory and permissive disclosure of such information.

    Part 603 permits State agencies to disclose confidential UC information--including ``wage information''--to ``public officials'' (defined at Sec. 603.2(d)) under limited circumstances (defined under Sec. 603.5), and authorizes such ``public officials,'' in turn, to use the information to develop Federally-required performance reports.

    As explained in greater detail below, the Department proposes changes to Sec. 603.2 (definition of ``public official'') and Sec. 603.5 (governing disclosures to public officials), to help States comply with WIOA's performance requirements, including the performance reports of the States, local areas, and ETPs. In addition, the Department proposes to amend Sec. 603.6 to add a provision requiring disclosure to implement the new statutory requirement on State cooperation with certain DOL and ED evaluations. These changes would facilitate States' obligations to report on performance through the use of quarterly wage records, and to cooperate in DOL and ED evaluations.

    The amendments the Department is proposing to part 603 relate only to State agency disclosures necessary to comply with certain provisions of WIOA. The Department is not proposing to redefine or expand the confidential State information--the confidential wage records or wage information--that is currently the basis for State performance reporting, and is not proposing to reduce in any way the significant privacy protections and confidentiality requirements that currently govern that information. The Department is not proposing to change any requirements relating to the permissible or mandatory disclosure of confidential UC information for any other purpose, or addressing any general UC issues. We note, in particular, that nothing in these proposed regulations exempts disclosures made under these regulations from the safeguards and security requirements in Sec. 603.9, the requirements in Sec. 603.10 governing agreements, or the requirements for payment of costs under Sec. 603.8(a).

    The Department invites comments on our proposed additions to part 603, but will not consider or address comments on part 603 or other UC matters that are outside the scope of this NPRM.

    Section 603.2(d)(2)-(5)

    Proposed Sec. Sec. 603.2(d)(2)-(5) expand the definition of who and what entities are considered ``public officials'' for purposes of complying with WIOA's requirements. Currently, Sec. 603.2(d) defines ``public official'' as ``an official, agency, or public entity'' in the executive branch of government with ``responsibility for administering or enforcing a law,'' or ``an elected official in the Federal, State or local government.'' Proposed Sec. 603.5(e) allows disclosure to public officials who need the information to carry out their official duties. This exception allows State agencies that collect ``wage information'' (including the data required for performance reporting under WIOA sec. 677.175) to provide that information to the State agencies responsible for administering and reporting on the WIOA core programs and mandatory one-stop partner programs. For example, State UC agencies, which are governed by part 603, may disclose confidential UC information to the State adult basic education agency for purposes of performing their official duties, as used in Sec. 603.5(e).

    The proposed amendments to Sec. 603.2(d) would clearly enumerate that ``public official'' includes officials from public post-secondary educational organizations, State performance accountability and customer information agencies, the chief elected officials (CEOs) of local Workforce Development Areas (as that term is used in WIOA sec. 106), and a public State educational authority, agency, or institution. Proposed Sec. 603.2(d)(2) would permit disclosure to public post-

    secondary educational institutions, regardless of how those institutions are structured or organized under State law. The regulation, as proposed, specifically mentions three categories of institutions. Proposed Sec. 603.2(d)(2)(i) would permit disclosure to public post-secondary educational institutions that are part of a State's executive branch, i.e., derive their authority either directly from the Governor or from an entity (State Board, commission, etc.) somewhere in that line of authority. Proposed Sec. 603.2(d)(2)(ii) would permit disclosure to public post-secondary educational institutions that are independent of the State's executive branch, which means those institutions whose directors derive their authority either directly from an elected official in the State other than the Governor or from an entity (again, a State Board, commission, or other entity) in that line of authority. Proposed Sec. 603.2(d)(2)(ii) covers any public post-secondary educational institution established and governed under State law, for example, a State Board of Regents. Proposed Sec. 603.2(d)(2)(iii) would allow disclosure specifically to State technical colleges and community colleges. (Those institutions may also be covered under (i) or (ii))

    Proposed Sec. 603.2(d)(5) permits disclosure to a public State educational authority, agency or institution'' as the terms are used in the Family Educational Rights and Privacy Act (FERPA) to clarify that the Department considers the heads of public institutions that derive their authority from a State educational authority or agency to be ``public officials'' for purposes of part 603.

    The Department proposes these changes to help States comply with WIOA's requirement to use wage records to measure performance (WIOA sec. 116(i)(2)) and to facilitate the performance reporting required for ETPs under secs. 116(d) and 122 of WIOA. WIOA mandates the use of wage records to measure State and local performance. As long as the recipients of the data adhere to all of the requirements in 20 CFR part 603, this proposed section

    Page 20696

    would permit States to make these disclosures to comply with WIOA requirements for Federal, State, or local government reporting on program outcomes and for other specified purposes.

    Non-public educational institutions, including non-profit or for-

    profit educational institutions or other ETPs which are not subject to the authority of the executive branch or another State elected official would not be permitted to obtain confidential UC information, including wage information, under this authority because they are not public entities. Any disclosures of confidential UC information to those entities for purposes of complying with WIOA would have to be authorized under the provisions of Sec. 603.5 other than Sec. 603.5(e). However, it is permissible and encouraged to develop processes or systems, such as the Wage Record Interchange System, to enable a State agency or State educational authority (including a State Education Agency) that collects wage records to match program participant data with wage records, and to provide aggregate participant outcome data to non-governmental educational entities, including ETPs under title I of WIOA.

    Section 603.5(e)

    Proposed Sec. 603.5(e), as amended, would assist State workforce and State education programs in complying with WIOA, and in particular with WIOA's sec. 116 performance accountability responsibilities, by explicitly stating that confidential UC information may be disclosed to a ``public official'' as defined in Sec. 603.2(d)(2) for limited, specified WIOA purposes.

    Proposed Sec. 603.5(e), as amended, in conjunction with the revised definition of ``public official'' under 603.2(d)(2), would enable State UC agencies to disclose confidential UC information to State and local agencies and other public officials authorized to carry out their responsibilities under WIOA for performance accountability, including audits and evaluations of the programs and other required reporting of outcomes, as described in proposed Sec. 603.2(d)(2). To enable States to comply with WIOA, State UI agencies, or other State agencies responsible for collection of wage record information, must collaborate with the entities under WIOA that are required to use wage record data for performance to make the data available pursuant to part 603.

    The Department notes that the proposed amendment to Sec. 603.5(e) would permit disclosure to a public official for purposes of performance accountability of the entities on the State's eligible training provider list (ETPL). In addition, disclosure of confidential UC information for other programs' performance accountability purposes (e.g., TANF or SNAP) may be accomplished under existing Sec. 603.5, as these entities are public officials and are performing their public duty, as defined in this section.

    A new clause (iii) under proposed Sec. 603.5(e) would permit disclosures ``as otherwise required for education or workforce training program performance accountability and reporting under Federal or State law.'' The Department intends that this provision apply only in the limited instance where a Federal or State law requires performance reporting for which data covered by part 603 is needed in a way that is not covered by the other WIOA-specific provisions. In those instances, this provision would permit a State agency to disclose confidential UC information to a ``public official'' seeking the information to comply with that statute.

    Section 603.6(8)

    Proposed Sec. 603.6(8) makes the disclosure of confidential UC information for certain Federal evaluations mandatory when the disclosure would not interfere with the efficient administration of State UC law. The Department proposes this change to Sec. 603.6 to implement the requirement, under WIOA sec. 116(e)(4), that States cooperate, ``to the extent practicable,'' in the conduct of evaluations by either the Secretary of Labor or the Secretary of Education. WIOA sec. 116(e)(4) defines cooperation to include ``the provision of data (in accordance with appropriate privacy protections established by the Secretary of Labor)''; this includes 20 CFR part 603 and any other privacy protections the Secretary may establish. The proposed new regulation at Sec. 603.6(8) would implement these requirements for purposes of providing confidential UC information regulated by part 603. The new regulation would require disclosure of confidential UC information to Federal officials, or their agents or contractors, requesting such information in the course of an evaluation covered by WIOA Sec. 116(e)(4) and 116(e)(1), to the extent that such disclosure is ``practicable.''

    In these cases, the Department interprets ``to the extent practicable'' to mean that the disclosure would not interfere with the efficient administration of State UC law. This standard is consistent with the standard the regulation applies to disclosures under Sec. 603.5, in situations where the disclosure is permitted but a State must determine, first, that the disclosure would not interfere with the efficient administration of State UC law. In effect, the proposed provision would require that State UC agencies make disclosures to Federal education and labor agencies carrying out evaluations when it would not interfere with the efficient administration of the State UC law. The Department anticipates this cooperation and related disclosures would include responding to surveys and allowing site visits, as well as disclosure of confidential UC information needed for the evaluation.

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

    Proposed part 675 discusses the purpose of title I of the WIOA, explains the format of the regulations governing title I, and provides additional definitions which are not found and defined in the Act.

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

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

    Proposed Sec. 675.300 provides a list of proposed definitions that are applicable across the WIOA regulations.

    In addition to the definitions in the WIOA regulations and at secs. 3, 142, 166(b), 167(i), 170(a), 171(b), 203, 302, and 404 of WIOA, proposed Sec. 675.300 provides additional definitions that apply to the programs and activities authorized and funded under title I of WIOA.

    Included in this list of definitions, the Department proposes to adopt the following relevant definitions from the Office of Management and Budget's (OMB) ``Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards'' found at 2 CFR part 200: Contract, Contractor, Cooperative Agreement, Federal Award, Federal Financial Assistance, Grant Agreement, Non-Federal Entity, Obligations, Pass-Through Entity, Recipient, Subaward, Subrecipient, Unliquidated Obligations, and Unobligated Balance. All other definitions at 2 CFR part 200 apply to these regulations where relevant, but have not been included in this section.

    Contract: The proposed definition for ``contract'' incorporates the definition established by OMB at 2 CFR 200.22. Specifically, the proposed term ``contract'' refers to the legal document that a non-

    Federal entity uses to purchase property or services used to carry out its duties under a grant authorized under WIOA. If the

    Page 20697

    Department determines that a particular transaction entered into by the entity is a Federal award or subaward it will not be considered a contract.

    Contractor: The proposed definition of ``contractor'' incorporates the definition contained in OMB's Uniform Guidance at 2 CFR 200.23. The Uniform Guidance has replaced the term ``vendor'' with the term ``contractor.'' As used in these regulations, the term ``contractor'' includes entities that the Act refers to as ``vendors.'' Additionally, it is important to note that contractors are not subrecipients. Additional guidance on distinguishing between a contractor and a subrecipient can be found at 2 CFR 200.330.

    Cooperative Agreement: The proposed definition of ``cooperative agreement'' incorporates the definition contained in the Uniform Guidance at 2 CFR 200.24.

    Department or DOL: This proposed term refers to the United States DOL, its agencies, and organizational units.

    Employment and Training Activity: As used in these regulations, the proposed term ``employment and training activity'' refers to any workforce investment activities carried out for an adult or dislocated worker under sec. 134 of WIOA and 20 CFR part 678.

    Equal Opportunity (EO) Data: This proposed term refers to the data required by the Department's regulations at 29 CFR part 37 implementing sec. 188 of WIOA.

    ETA: This proposed term refers to the ETA, an agency of DOL, or its successor organization.

    Federal Award: This proposed definition incorporates the definition in the Uniform Guidance at 2 CFR 200.38.

    Federal Financial Assistance: The proposed definition of ``Federal financial assistance'' incorporates the definition contained in the Uniform Guidance at 2 CFR 200.40.

    Grant or Grant Agreement: The proposed definition of ``grant agreement'' incorporates the definition contained in the Uniform Guidance at 2 CFR 200.51. Because both WIOA and these regulations use ``grant'' and ``grant agreement'' interchangabily, the inclusion of both terms here clarifies that the terms are synonymous.

    Grantee: The proposed definition of ``grantee'' refers to a recipient of funds under a grant or grant agreement. Grantees are also referred to as recipients in these regulations.

    Individual with a Disability: This proposed definition adopts the definition from sec. 3 of the Americans with Disabilities Act, as amended, and is further defined at 29 CFR 37.4.

    Labor Federation: This proposed definition remains unchanged from the definition used in the regulations under WIA at 20 CFR 660.300.

    Literacy: The proposed definition for ``literacy'' as used in these regulations is a measure of an individual's ability to participate and successfully function both in the workplace and in society.

    Local Board: This proposed definition clarifies that the term ``Local Board'' as used in these regulations refers to the Local Workforce Development Boards established under sec. 107 of WIOA.

    Non-Federal Entity: The proposed definition of ``non-Federal entity'' incorporates the definition contained in the Department's Exceptions to the Uniform Guidance at 2 CFR 2900.2.

    Obligations: The definition of ``obligations'' incorporates the definition contained in the Uniform Guidance at 2 CFR 200.71.

    Outlying Area: The proposed term ``outlying area'' refers to those Territories of the United States which are not within the definition of ``State,'' including the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and, in certain circumstances, the Republic of Palau.

    Pass-through entity: The proposed definition of pass-through entity incorporates the definition in the Uniform Guidance at 2 CFR 200.74.

    Recipient: The proposed definition of ``recipient,'' which is different than the current definition of recipient under WIA at 20 CFR 660.300, incorporates the definition in the Uniform Guidance at 2 CFR 200.86.

    Register: The proposed definition of ``register'' means the point at which an individual seeks more than minimal assistance from staff in taking the next step towards self-sufficient employment. This is also when information that is used in performance information begins to be collected. At a minimum, individuals must provide identifying information to be registered.

    Secretary: This proposed term refers to the Secretary of the U.S. DOL, or their officially delegated designees.

    Secretaries: This proposed term refers to the Secretaries of the U.S. DOL and the U.S. ED, or their officially designated designees.

    Self-Certification: The proposed term ``self-certification'' refers to the certification made by an individual that they are eligible to receive services under title I of WIOA.

    State: The proposed term ``State'' refers to each of the several States of the United States, the District of Columbia, and the Commonwealth of Puerto Rico.

    State Board: This proposed definition clarifies that the term ``State Board'' as used in these regulations refers to the State Boards established under sec. 101 of WIOA

    Subgrant or Subaward: This proposed term incorporates the definition of ``subaward'' in the Uniform Guidance at 2 CFR 200.92. This term replaces the term ``subgrant'' found in WIA at 20 CFR 660.300. Because both WIOA and these regulations use ``subgrant'' and ``subaward'' interchangeably, the inclusion of both terms here clarifies that the terms are synonymous.

    Subrecipient: The proposed definition of ``subrecipient'' incorporates the definition in the Uniform Guidance at 2 CFR 200.93. This term is synonymous with the term ``subgrantee.''

    Unliquidated Obligations: The proposed definition of ``unliquidated obligations'' incorporates the definition contained in the Uniform Guidance at 2 CFR 200.97.

    Unobligated Balance: The proposed definition of ``unobligated balance'' incorporates the definition in the Uniform Guidance at 2 CFR 200.98.

    Wagner-Peyser Act: As used in these regulations, the proposed term ``Wagner-Peyser Act'' refers to the Wagner-Peyser Act passed on June 6, 1933, and codified at 29 U.S.C. 49, et seq.

    WIA Regulations: The proposed term ``WIA Regulations'' as used in this regulation or subsequently by the Department refers to the regulations 20 CFR parts 660-672. This definition is necessary because, as described in the introduction to these regulations, the Department has chosen to retain the WIA regulations at parts 660-672 of title 20 of the CFR.

    WIOA Regulations: This proposed term, as used in this regulation or generally by the Department means those regulations in 20 CFR parts 675 through 687, the Wagner-Peyser Act regulations in 20 CFR part 652, subpart C, and the regulations implementing WIOA sec. 188 in 29 CFR part 37.

    Workforce Investment Activities: The proposed term ``workforce investment activities'' is a general term that describes the broad array of activities and services provided to eligible adults, dislocated workers, and youth under secs. 129 and 134 of title I of WIOA.

    Youth Workforce Investment Activity: The proposed term ``youth workforce investment activity'' refers to those activities carried out for eligible youth that fall within the broad definition of ``workforce investment activity.''

    Page 20698

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

    1. Subpart A--State Workforce Development Board

    This subpart A sets forth the conditions under which the Governor must establish the State Board.

    Proposed Sec. Sec. 679.100(a)-(e) explain the purpose of the State Board. The State Board represents a wide variety of individuals, businesses, and organizations throughout the State. WIOA is designed to help job seekers and workers access employment, education, training, and support services needed to succeed in the labor market, and match employers with the skilled workers needed to compete in the global economy. Further, the Department envisions a State Board that takes leadership to ensure that the one-stop system in each State is customer driven. The State Board can help lead this effort by aligning Federal investments in job training, integrating service delivery across programs, and ensuring that the workforce system is job-driven and matches employers with skilled individuals.

    The Department envisions that the State Board will serve as a convener of State, regional, and local workforce system partners to enhance the capacity and performance of the workforce development system; align and improve employment, training, and education programs, and through these efforts, promote economic growth.

    The State Board must be a strategic convener that promotes partnerships and engages key stakeholders. This role can only be accomplished if each State Board member is an active participant in the business of the board. State Board members must establish a platform in which all members actively participate and collaborate closely with the required partners of the workforce development system, including public and private organizations. This engagement is crucial in the State Board's role to help integrate and align a more effective job-driven workforce investment system that invests in the connection between education and career preparation.

    Section 679.100 What is the vision and purpose of the State Board?

    A key goal of Federally-funded training programs is to get more Americans ready to work with marketable skills and support businesses to find workers with the skills that are needed. The role of the State Board in achieving this goal includes engaging employers, education providers, economic development, and other stakeholders to help the workforce development system achieve the purpose of WIOA and the State's strategic and operational vision and goals outlined in the State Plan. The Department encourages the State Board to develop a comprehensive and high-quality workforce development system by working with its workforce, education, business, and other partners to improve and align employment, training, and education programs under WIOA.

    The Department encourages the State to take a broad and strategic view when considering representatives of the State Board, and also in establishing processes which it will use to include necessary perspectives in carrying out State Board functions. For example, alignment of required one-stop partner investments is essential to achieving strategic and programmatic alignment at the State, regional, and local level. Further, States are encouraged to examine factors like the natural bounds of regional economies, commuting patterns, and how economic sectors impact the State, which may benefit from inputs either from formal members of the board, or through other engagement. Further, a broad geographic representation as well as a reflection of diversity of populations within the State is critical.

    Section 679.110 What is the State Workforce Development Board?

    Proposed Sec. 679.110 describes the membership requirements of the State Board. WIOA sec. 101(b) uses the terms ``representative'' and ``representatives'' in several places. In this section the Department interprets ``representatives'' to mean two or more individuals and ``representative'' as one individual.

    Proposed Sec. 679.110(a) explains that States must establish State Boards in accordance to the requirements of WIOA sec. 101 and these regulations. This proposed section retains the same requirements found at 20 CFR 661.200(a).

    Proposed Sec. 679.110(b) generally requires, in accordance with sec. 101(b)(2) of WIOA, that the State Board membership represent the diverse geographic areas of the State. Employers' and workers' challenges and needs differ among the urban, rural, and suburban areas of the States due to demographics, labor market information and conditions, and business and worker needs and access to the workforce development system. Accordingly, the Department strongly encourages that each category of membership on the Board--the members of the State legislature, business representative, workforce and labor representatives, and State and local officials--represent the diverse geographic areas of the State to ensure that the workforce development system meets the education, employment, and skill needs of workers, jobseekers, and businesses, no matter their location in the State.

    Proposed Sec. 679.110(b)(1) and (2) implement secs. 101(1)(A) and (B) of WIOA by requiring that the board include the Governor of the State and one member of each chamber of the State legislature.

    Proposed Sec. 679.110(b)(3)(i)(A) through (C), implementing sec. 101(b)(1)(C)(i) of WIOA, require the majority of State Board representatives to be from businesses or organizations in the State. These representatives must either be the owner or chief executive of the business or be an executive with optimum policy-making or hiring authority as defined in proposed Sec. 679.120. These representatives must also come from businesses or organizations that represent businesses which provide employment and training opportunities that include high-quality, work-relevant training, and development opportunities in in-demand industry sectors or occupations. Work-

    relevant and development opportunities may include customized training, registered apprenticeship, or OJT. Finally, the Governor must appoint these members based on nominations from business organizations and trade associations in the State. The Department envisions that these members will be individuals that will be able to drive the board to align the workforce investment, education, and economic development systems in support of a comprehensive, accessible, and high-quality workforce development system.

    Proposed Sec. 679.110(b)(3)(i)(D) requires, at a minimum, that one member of the State Board represent small business as defined by the U.S. Small Business Administration. Small businesses are a critical component of and major contributor to the strength of local economies and present new employment opportunities. The Department proposes to require a small business representative because the presence of at least one small business representative on the State Board will allow the board as a whole to more readily receive the unique perspectives, experiences, and needs of small businesses.

    Proposed Sec. 679.110(b)(3)(ii)(A) through (D) require that not less than 20

    Page 20699

    percent of the members of the State Board be representatives of the workforce. Such representatives must include representatives from labor organizations and registered apprenticeship programs within the State, in accordance with sec. 101(b)(1)(ii). This provision maintains WIA's emphasis and requirement that State Board representatives include members of the workforce and labor organizations. The Department anticipates that the inclusion of workforce and labor representatives will foster cooperation between labor and management, strengthening the operation and effectiveness of the State workforce development system. This proposed section also encourages representation from CBOs that have demonstrated experience and expertise, as defined in proposed Sec. 679.120, in addressing the employment, training, or education needs of individuals with barriers to employment across the State including organizations that serve veterans or that provide or support competitive, integrated employment for individuals with disabilities, and organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of eligible youth, including organizations that serve OSY.

    Proposed Sec. 679.110(b)(3)(iii)(A)(1) and (2), implementing WIOA sec. 101(b)(1)(iii)(I), require the Governor to appoint to the State Board representatives of government that include the lead State officials with primary responsibility for each of the core programs and two or more CEOs that represent both cities and counties, where appropriate. The inclusion of State officials with primary responsibility for each of the core programs and CEOs on the State Board is important so that they can support and improve the service delivery of each core program through their experience in workforce investment activities and positions as public leaders. This provision also requires that where the State official with primary responsibility for a core program represents more than one core program, that official must ensure adequate representation on the State Board of the needs of all the core programs under their jurisdiction. Additionally, the CEOs must be able to represent their geographic area such as their surrounding cities and counties in the area.

    Proposed Sec. 679.110(b)(3)(iii)(B), in accordance with WIOA sec. 101(b)(1)(C)(iii)(II), allows the Governor to designate other representatives and officials to the Board, including but not limited to, representatives and officials such as State agency officials from agencies that are responsible for one-stop partners, State agency officials responsible for economic development or juvenile justice programs, individuals who represent an Indian tribe or tribal organizations, and State agency officials responsible for education programs.

    Proposed Sec. 679.110(c), implementing sec. 101(c) of WIOA, requires the Governor to select a chairperson for the State Board from the business representatives on the board. This proposed section retains the same requirements found at 20 CFR 661.200(g).

    Proposed Sec. 679.110(d) requires the Governor to establish by-

    laws that help improve operations of the State Board. Proposed Sec. 679.110(d)(1) through (7) require that at a minimum the by-laws address the nomination process used by the Governor to select the State Board chair and members, term limitations and how the term appointments will be staggered to ensure only a portion of memberships expire in a given year, the process to notify the Governor of a board member vacancy to ensure a prompt nominee, the proxy and alternative designee process that will be used when a board member is unable to attend a meeting and assigns a designee, brokers relationships with stakeholders, and any other conditions governing appointment or membership on the State Board as deemed appropriate by the Governor. In addition to these required elements, the Governor must include any additional requirements in the board's by-laws that he or she believes is necessary to ensure the orderly administration and functioning of the board. An effective State Board establishes clear roles, responsibilities, procedures, and expectations through its by-laws, and that these requirements will help State Boards to be more agile and proactive in reacting to board turnover, increase board participation when board members are not able to physically attend board meetings, improve board functionality, and help ensure that the public is informed about the operation of the board.

    Proposed Sec. 679.110(e) requires, as a general condition of State Board membership, that members who represent the non-business organizations, agencies, or other entities described in proposed Sec. 679.110(b)(3)(ii) and (iii) have optimum policy-making authority. Because WIOA sec. 101(d) adds State Board functions, such as identifying and disseminating information on best practices and developing and reviewing statewide policies affecting the coordinated provision of services through the State's one-stop delivery system, all members, not just those representing the business community, should have optimum policy-making authority to accomplish the purposes of WIOA and conduct the State Board required functions.

    Proposed Sec. 679.110(f) implements the multiple-entity representation limitations for State Board members at WIOA sec. 101(b)(3). Robust representation in each of the categories is essential to ensure that the State Board benefits from the diversity and experience of board members.

    Proposed Sec. 679.110(f)(1) explains that a State Board member may not represent more than one of the three membership categories: Business representatives, workforce representatives, or government representatives. For example, one member could not serve as a business representative and a joint labor-management apprenticeship program even if the member would otherwise satisfy the criteria for both categories.

    Proposed Sec. 679.110(f)(2) explains that a State Board member may not serve as a representative of more than one subcategory under (b)(3)(ii). Under this provision, a single board member could not serve as a representative of an organized labor organization and an apprenticeship program (or the optional subcategories) even if the member would otherwise satisfy the criteria for either category.

    Proposed Sec. 679.110(f)(3) prohibits a government representative from serving as a representative of more than one subcategory under (b)(3)(iii). However, where a single government agency is responsible for multiple required programs, the head of the agency may represent each of the required programs. In some instances, it would be appropriate and beneficial for one representative to represent multiple programs on the State Board. For example, the head of a State Workforce Agency might represent both the WIOA title I and Wagner-Peyser programs. This arrangement could serve to improve integration of these two programs and/or help the State Board better achieve the colocation requirements at WIOA sec. 123(c)(3). In other instances, such an arrangement would be less beneficial. For example, where vocational rehabilitation services fall under the State Workforce Agency, appointing a single representative to satisfy the membership requirements of WIOA title I, Wagner-Peyser, and vocational rehabilitation services may limit the voice and influence of a core program partner. The Department encourages Governors to use discretion

    Page 20700

    when appointing board members to represent multiple subcategories under (b)(3)(iii).

    Proposed Sec. 679.110(g) requires that all required board members have voting privileges and allows the option for the Governor to convey voting privileges to non-required members. All required board members must have a voice in the State Board's decisions to ensure that the interests of all members of the community represented by the required members are taken into account by the board. Requiring voting rights allows the required board members to have an effect on the State Board's key decisions and initiatives and enables the required board members to effectively represent the individuals and organizations of their communities. This proposed section also permits the Governor to grant voting privileges to the non-required members of the board, and the Department encourages the Governor to do so if doing so, in their opinion, would further the mission and goals of the board.

    Section 679.120 What is meant by the terms ``optimum-policy-making authority'' and ``demonstrated experience and expertise''?

    Proposed Sec. 679.120(a) defines the term ``optimum policy-making authority'' as an individual who can reasonably be expected to speak affirmatively on behalf of the entity he or she represents and to commit that entity to a chosen course of action. This proposed section retains the same requirements found at 20 CFR 661.203(a).

    Proposed Sec. 679.120(b) defines the term ``demonstrated experience and expertise'' as an individual who has documented leadership in developing or implementing workforce development, human resources, training and development, or a core program function. WIOA sec. 101(d) adds new State Board functions, such as the development of strategies for aligning technology and data systems across one-stop partner programs to enhance service delivery and improve efficiencies in reporting on performance accountability measures. This provision will ensure that the State Board will include members that will assist the board in fulfilling these functions. The Department seeks public comment on how to further define ``demonstrated experience and expertise'' and examples of the types of qualifications that would meet such a definition.

    Section 679.130 What are the functions of the State Board?

    Proposed Sec. 679.130 implements sec. 101(d) of WIOA and describes the role and functions of the State Board. Proposed Sec. 679.130(a), (d) through (e), and (g) through (k) reiterate the relevant statutory requirements at secs. 101(d)(1), (4)-(5), and (7)-(11). These functions are the primary functions of the State Board.

    Proposed Sec. 679.130 is consistent with WIOA's statutory requirement that the State Board must assist the Governor in the development, implementation, and modification of the 4-year State Plan.

    Proposed Sec. 679.130(b) is consistent with WIOA sec. 101(d)(2) and reiterates the statutory requirements. The proposed regulation states the review of statewide policies, programs, and recommendations on actions that must be taken by the State to align workforce development programs to support a comprehensive and streamlined workforce development system. Such review of policies, programs, and recommendations must include a review and provision of comments on the State plans, if any, for programs and activities of one-stop partners that are not core programs.

    Proposed Sec. 679.130(c)(1) through (7) are consistent with WIOA secs. 101(d)(3)(A) through (G) and reiterate WIOA's requirements that the State Board assist the Governor in development and continuous improvement of the State's workforce development system, including removing barriers to aligning programs and activities, developing career pathways to support individuals to retain and enter employment, developing customer outreach strategies, identifying regions and designating local workforce areas, developing and continuously improving the one-stop system, and developing strategies to train and inform staff.

    Proposed Sec. 679.130(d) and (e) reiterate statutory language requiring State Boards to assist in the development of State performance and accountability measures and to identify and disseminate best practices.

    Proposed Sec. 679.130(f)(1) through (3) are consistent with WIOA secs. 101(d)(6)(A) through (C) to assist in the development and review of statewide policies on coordinated service provisions, which includes criteria for Local Boards to assess one-stop centers, allocation of one-stop center infrastructure funds, and the roles and contributions of one-stop partners within the one-stop delivery system. In addition, it is important for the State Board to consult with CEOs and Local Boards when establishing objective criteria and procedures for Local Boards to use when certifying one-stop centers. Where Local Boards serve as the one-stop operator, the State Board must use such criteria to assess and certify the one-stop center to avoid inherent conflicts of interest in a Local Board assessing itself.

    Proposed Sec. 679.130(g) through (k) reiterate statutory language requiring State Boards to assist in the development of strategies for technological improvements to improve access and quality of service, align technology and data systems across one-stop partner programs to improve service delivery and effectiveness in reporting on performance accountability, develop allocation formulas for distribution of adult and youth programs, and in accordance with WIOA and these regulations, prepare the annual report and develope the statewide WLMIS.

    Proposed Sec. 679.130(l) is consistent with WIOA sec. 101(d)(12). This proposed regulation requires the State Board to assist the Governor in the development of other policies that promote statewide objectives and enhance the performance of the workforce development system in the State.

    Section 679.140 How does the State Board meet its requirement to conduct business in an open manner under ``sunshine provision'' of the Workforce Innovation and Opportunity Act sec. 101(g)?

    Proposed Sec. 679.140 implements sec. 101(g) of WIOA, requires that the State Board conduct its business in an open and transparent manner, and describes several pieces of information that the board is required to provide to ensure transparency.

    Proposed Sec. 679.140(b)(1) through (4) requires the State Board to make certain information available on a regular basis to ensure that it is conducting its business in an open manner. Transparency promotes accountability and provides valuable information to citizens on the Federal, State, and local government's activities. Therefore, the State Board must make available to the public on a regular basis, through electronic means and open meetings, information about State Board activities such as the State Plan, modifications to the State Plan, board membership, the board's by-laws, the minutes of meetings. This information must be easily accessed by interested parties. Ensuring that this information is widely available promotes transparency and

    Page 20701

    provides access to the public on how the State Board works to align, integrate, and continuously improve the workforce development system.

    Section 679.150 Under what circumstances may the Governor select an alternative entity in place of the State Workforce Development Board?

    Proposed Sec. 679.150(a) and (b) implement the requirements of WIOA sec. 101(e)(1) and describe the circumstances by which the Governor may select an alternate entity in place of a State Board. Paragraph (b) lists the conditions that must be met if a State uses an alternative entity in place of the State Board and requires that the entity meets the requirements of Sec. 679.110.

    Proposed Sec. 679.150 (c)(1) through (3) stipulate that if the alternative entity does not provide representatives for each of the categories required under WIOA sec. 101(b), the State Plan must explain the manner in which the State will ensure an ongoing role for any unrepresented membership group in the workforce development system. The proposed section further requires that the State Board ensure that the alternative entity maintain a meaningful, ongoing role for unrepresented membership groups, including entities carrying out the core programs, and to inform the Board's actions.

    Proposed Sec. 679.150(d) stipulates if the membership structure of the alternative entity had a significant change after August 7, 1998, the entity will no longer be eligible to perform the functions of the State Board. In such a case, the Governor must establish a new State Board which meets all of the criteria of WIOA sec. 101(b).

    Proposed Sec. 679.150 (e)(1) and (2) define a significant change in the membership structure which includes a change in the organization of the alternative entity or in the categories of entities represented on the alternative entity which requires a change to the alternative entity's charter or a similar document that defines the formal organization of the alternative entity, regardless of whether the required change to the document has or has not been made. This proposed section retains the same requirements found at 20 CFR 661.210(e).

    Proposed Sec. 679.150(f) stipulates all State Board references in 20 CFR parts 675 through 687 also apply to an alternative entity used by a State. This proposed section implements sec. 101(e)(2) of WIOA.

    Section 679.160 Under what circumstances may the State Board hire staff?

    Proposed Sec. 679.160 implements sec. 101(h) and describes the board's authority to hire staff. Per proposed Sec. 679.160(c), the pay provided to the director and staff hired by the board is subject to the limitations on the payment of salary and bonuses described in WIOA sec. 194(15).

    2. Subpart B--Workforce Innovation and Opportunity Act Local Governance (Workforce Development Areas)

    The WIOA envisions a workforce development system that is customer-

    focused on both the job seeker and business, and is able to anticipate and respond to the needs of regional economies. It requires Workforce Development Boards and CEOs to design and govern the system regionally, aligning workforce policies and services with regional economies and supporting service delivery strategies tailored to these needs. To support this regional approach, WIOA requires States to identify intrastate and interstate regions which may be comprised of more than one local area, and requires local areas to plan regionally. WIOA envisions a regional system where not only do local areas plan regionally, but workforce system leaders partner and provide leadership as part of comprehensive, regional workforce and economic strategies. This subpart provides the requirements for designation of regions and local areas under WIOA.

    Section 679.200 What is the purpose of a region?

    Proposed Sec. 679.200 describes the purpose of requiring States to identify regions: to align workforce development resources to regional economies to ensure coordinated and efficient services to both job seekers and employers. WIOA requires States to establish regions in order to ensure that training and ES support economic growth and related employment opportunities and are meeting the skill competency requirements of the regions. The development of comprehensive regional partnerships facilitates alignment of workforce development activities with regional economic development activities, and better supports the execution and implementation of sector strategies and career pathways. Regional cooperation may also lower costs and increase the effectiveness of service delivery to businesses that span more than one local workforce development area within a region and to job seekers through coordination of shared services, processes, and operations. The Department encourages States to use these processes to identify any performance, fiscal, or planning challenges and to ensure that local and regional planning areas are aligned to support improved service delivery, improved training and employment outcomes, better meet employer needs, and greater effectiveness and efficiency in achieving these outcomes.

    Section 679.210 What are the requirements for identifying a region?

    Proposed Sec. 679.210 outlines the requirements for identifying a region.

    Proposed Sec. 679.210(a) requires that the Governor assign local areas to a region prior to the submission of the State Unified or Combined Plan.

    Proposed Sec. 679.210(b) explains that the Governor must develop a policy for designation of a region prior to submission of the State Unified or Combined Plan, in order to receive WIOA title I-B adult, dislocated worker, and youth allotments. The regional assignment is important because regional economic development areas do not necessarily correspond to State, county, or local workforce development areas, or municipal boundaries.

    Proposed Sec. 679.210(b) clarifies the required factors that a Governor must consider when identifying a region and the parties the Governor must consult, implementing WIOA sec. 106(a)(1). The considerations for identifying a planning region are consistent with those for local area designation outlined in proposed Sec. 679.240(a).

    Proposed Sec. 679.210(c) provides additional criteria the Governor may consider when identifying regions. These additional criteria, which provide a more comprehensive picture of regional economies and labor markets, provide additional data points to inform the Governor's decision to assign local areas to regions. However, the Department seeks comment on the appropriateness of these factors and requests suggestions of additional data points for defining a regional economy and labor market.

    The Department has included ``population centers'' in proposed Sec. 679.210(c)(1) because they and their contiguous areas of growth are a basic factor distinguishing economic development areas and planning regions.

    Proposed Sec. 679.210(c)(2) allows the consideration of ``commuting patterns'' because commuting pattern data can show the movement of workers from their residence to their workplace. A

    Page 20702

    strong flow of commuters from one local area, municipality, or county into another is an indication of the economic interdependence of the two areas.

    ``Land ownership'' is included in proposed Sec. 679.210(c)(3) because land ownership can significantly affect the economic development potential of an area.

    ``Industrial composition'' has been proposed as a factor in Sec. 679.210(c)(4) because it is primarily based upon industry employment patterns. The factors used in determining regions could be jobs by industry and share of total employment by industry.

    Proposed Sec. 679.210(c)(5) permits the Governor to consider ``location quotients,'' which are ratios that could be computed by dividing a local area's percentage of employment in a particular industry by the State's percentage of employment in a particular industry. The economic base of a local area includes those industries in which the local area has a higher proportion of employment than the State as a whole, or a higher location quotient. Adjacent local areas with similar economic bases are strong candidates for placement in the same region.

    ``Labor force conditions'' is proposed as a factor in Sec. 679.210(c)(6). Local area labor force employment and unemployment data could provide a measure of labor availability throughout the State. Adjacent local areas with similar labor force characteristics, such as unemployment rates, might have similar workforce/economic development needs, thus joining those areas into a region may be beneficial.

    Proposed Sec. 679.210(c)(7) suggests that the Governor consider ``geographic boundaries'' when setting regions because they may serve to facilitate or hinder the movement of people and commerce between areas, thereby naturally delineating regional boundaries.

    Finally, proposed Sec. 679.210(c)(8) indicates that the Secretary may suggest additional factors in future guidance.

    Proposed Sec. 679.210(d), implementing sec. 106(a)(2) of WIOA, outlines the types of regions and how local areas may be assigned to regions. A region may consist of a single local area, two or more contiguous local areas with a State, or two or more contiguous local areas in two or more States. When the Governor(s) assigns two or more local areas to a region, the region, per WIOA sec. 3(48), is considered a planning region, which is required to coordinate regional service strategies, regional sector initiatives, the collection and analysis of regional labor market data, administrative costs, transportation, partnership with economic develop agencies, and the negotiation of local performance consistent with the regional planning requirements at Sec. 679.510. A single local area may not be split across two planning regions. Local areas must be contiguous in order to be a planning region and effectively align economic and workforce development activities and resources. The Department anticipates providing additional guidance regarding the creation and management of interstate planning regions.

    Section 679.220 What is the purpose of the local workforce development area?

    Distinct from the regional designation, WIOA also provides for local workforce development areas. As described above, these local areas may be identified individually or in combination, as regions. Proposed Sec. 679.220 describes the purpose of the local workforce development area (local area). The Governor must designate local areas in order to receive WIOA title I adult, dislocated worker, and youth allotments, as required by WIOA sec. 106. Local areas serve as a jurisdiction for the administration of workforce development activities and execution of adult, dislocated worker, and youth funds allocated by the State. States allocate workforce investment funds based on various population characteristics of the local area. Local areas may correspond to regions identified in WIOA sec. 106(a)(1) or may be smaller geographic areas within a planning region, each with its own Local Workforce Development Board.

    Section 679.230 What are the general procedural requirements for designation of local workforce development areas?

    Proposed Sec. 679.230 describes the procedural requirements that the Governor must use for the designation or redesignation of a local workforce development area. Proposed Sec. 679.220 (a) through (c), implementing WIOA sec. 106(b)(1)(A), requires the Governor to consult with the State Board and CEO, and consider public comments from a wide range of stakeholders consistent with provisions at WIOA sec. 102(b)(2)(e)(iii)(II) as part of the process of identifying the local area. The Governor has the discretion to establish the process and procedures to solicit comments that it determines appropriate; however a wide-reaching, inclusive process allows sufficient time for stakeholders to provide substantive comments that will enable the Governor to receive meaningful feedback from all interested stakeholders, ensuring that the Governor is able to consider all relevant information, data, and opinions before making a decision to designate or redesignate a local area.

    Section 679.240 What are the substantive requirements for designation of local workforce development areas that were not designated as local areas under the Workforce Investment Act of 1998?

    Proposed Sec. 679.240 provides the substantive requirements that Governor must use for the designation or redesignation of local workforce development areas.

    Proposed Sec. 679.240(a) explains that the Governor must develop a policy for designation or redesignation of local workforce development areas, including the factors that the Governor must consider. The statute requires that the Governor designate local areas that ``are consistent'' with labor market and regional economic development areas: The Department interprets this to mean that within a local area, there must be common labor markets and economic development areas. Better integration between the workforce and economic development systems serves to best connect the employment needs of workers with the skilled workforce needs of employers. This section implements sec. 106(b)(1)(B) of WIOA.

    Proposed Sec. 679.240(b) permits the Governor to approve a local area designation request from any unit of local government, including a combination of multiple units. This provision implements sec. 106(b)(4) of WIOA and retains the same requirements found at 20 CFR 661.250(c). Proposed paragraph (c) permits the Governor to redesignate a local area that has been designated or redesignated under Sec. 679.240(a) or has been designated under Sec. 679.250(a) or (c) if the local area requests, and the Governor approves, the redesignation.

    Section 679.250 What are the requirements for initial and subsequent designation of workforce development areas that had been designated as local areas under the Workforce Investment Act of 1998?

    Proposed Sec. 679.250 describes the requirements for initial and subsequent designation of local areas that had been designated as local areas under WIA.

    Proposed Sec. 679.250(a) implements sec. 106(b)(2) of WIOA that requires, during the first 2 full PYs following the enactment of WIOA, a Governor is to approve a request for initial designation from any local area designated as a local area under WIA as long as the entity

    Page 20703

    was designated a local area under WIA, performed successfully, and maintained sustained fiscal integrity for 2 years prior to the enactment of WIOA. This provision requires the Governor to continue the designation of local areas that performed well and maintained sound fiscal practices under WIA. If a local area that was designated under WIA requests initial designation under WIOA but does not meet all of the requirements of Sec. 679.250(a), the Governor has the discretion to approve the initial designation under WIOA or to redesignate the local area pursuant to the procedures described in Sec. 679.240.

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

    Proposed Sec. 679.250(c), in accordance with sec. 106(b)(3) of WIOA, describes the requirements for the subsequent designation of local workforce development areas that were initially designated under Sec. 679.250(a). Specifically, the Governor must approve requests for subsequent designation as long as the local area performed successfully, sustained fiscal integrity, and in the case of a local area in a planning region, met the planning region requirements during the 2-year period of initial designation. Local areas that are able to demonstrate successful performance and fiscal integrity must be permitted to continue to operate and may not be redesignated without the consent of the Local Board and CEO in the local area.

    Proposed Sec. 679.250(d) describes the role of the Governor in reviewing a local area's subsequent designation. Paragraph (d)(1) permits the Governor to evaluate a local area at any time to ensure the local area continues to meet the requirements for subsequent eligibility at paragraph (c). Paragraph (d)(2) requires the Governor to review local areas to ensure they continue to satisfy the requirements at paragraph (2) as part of each 4-year State planning cycle. Sections 116(g)(2)(A) and 184(b)(1) of WIOA describe the required actions that the Governor must take in the event that a local workforce area fails to meet its negotiated levels of performance or does not comply with administrative requirements, respectively. Under these provisions the Governor retains the authority to take corrective action in light of failure of performance or fiscal management short of redesignation, and is not required to redesignate a local area that has failed to maintain the requirements of paragraph (c). Furthermore, the Governor may redesignate local areas at any time with the cooperation of the CEO and Local Board in a given local area.

    Proposed Sec. 679.250(e) presumes that local areas will be considered to have requested continued designation unless the CEO and the Local Board directly notify the Governor that they no longer wish operate as a local area. This newly proposed paragraph reduces the administrative burden of maintaining local area status, while still holding local areas accountable to the requirements of paragraph (c).

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

    Proposed Sec. 679.250(g) clarifies that rural concentrated employment programs are not eligible to apply for initial designation as a local area. WIOA allows any unit of local government (or combination of units of local government) to request designation as a local area; however, unlike under WIA, this provision does not extend to rural concentrated employment programs.

    Section 679.260 What do the terms ``performed successfully'' and ``sustained fiscal integrity'' mean for purposes of designating local areas?

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

    Proposed Sec. 679.260(a) defines the term ``performed successfully'' for the purpose of initial designation to mean that the local area met or exceeded all performance levels the Governor negotiated with Local Board and CEO under WIA sec. 136(c) for the last 2 full PYs before the enactment of WIOA. It also requires that the local area not fail any individual measure for the last 2 consecutive PYs before the enactment of WIOA. Proposed Sec. 679.260(a)(1) requires the Governor, in order to determine if a local area has performed successfully, to have defined the terms ``met or exceeded'' and ``failure'' at the time the performance levels were negotiated. Proposed Sec. 679.260(a)(2) clarifies that the Governor may not retroactively apply any higher WIOA threshold to performance negotiated and achieved under WIA for the purposes of local area designation.

    Proposed Sec. 679.260(b) defines the term ``performed successfully'' for the purpose of subsequent designation to mean that the local area met or exceeded the levels of performance the Governor negotiated with Local Board and CEO for core indicators of performance described at WIOA sec. 116(b)(2)(A). It also requires the Governor to have defined the terms ``met or exceeded'' and ``failure'' in the State Plan.

    Proposed Sec. 679.260(a) and (b) expand on the definition at WIOA sec. 106(e)(1) to ensure that the initial and subsequent designation of local areas is conducted in a fair and transparent manner by ensuring that the local area's performance is judged on the contemporaneous standards agreed to between the State and local area at the time rather than under subsequently imposed performance standards.

    Proposed Sec. 679.260(c) defines the term ``sustained fiscal integrity'' for the purpose of determining initial and subsequent local area designation to mean that the Secretary has not made a formal determination that either the grant recipient or any other entity charged with expending local area funds misexpended such funds due to willful disregard of the requirements of the provision involved, gross negligence, or failure to comply with accepted standards of administration for the 2-year period preceding the determination.

    Proposed Sec. Sec. 679.250 and 679.260 allow for an orderly transition from WIA to WIOA and protects the designation status of local areas that meet or exceed performance targets negotiated in good faith under the relevant authorizing legislation while allowing the Governor both to oversee properly the performance of the local areas and take action necessary to improve the area's performance in a timely fashion.

    Section 679.270 What are the special designation provisions for single-

    area States?

    Proposed Sec. 679.270 outlines the special designation provisions for single-area States. Under WIOA sec. 106(d), the Governor of any single-area State under WIA may choose to continue to designate the State as a single-State area. However, proposed Sec. 679.270(b) clarifies that the Governor must identify the single-area status of the State in its Unified or Combined State Plan and proposed Sec. 679.270(c) further clarifies that the State Board in a single-area State must continue to carry out the functions of the State and Local Boards. This section is intended to clarify single-area States' responsibilities and functions: Key local functions, such as monitoring; entering into a memorandum of understanding (MOU) with one-

    stop partners; selecting one-stop operators; selecting eligible providers of youth activities, career services and training services; and

    Page 20704

    certifying one-stop centers, are essential to the proper functioning of the public workforce system and remain so within single-area States.

    Section 679.280 How does the State fulfill the requirement to provide assistance to local areas within a planning region that wish to redesignate into a single local area?

    Proposed Sec. 679.280 describes how the State fulfills the requirement to provide assistance to local areas within a planning region that wish to redesignate into a single local area.

    Proposed Sec. 679.280(a) asserts that the State must authorize statewide funds for transition activities when all local areas in a planning region petition the Governor for redesignation as a single local area as required by WIOA sec. 106(b)(6). WIOA introduces redesignation assistance as a required statewide activity. This provision will help local areas consolidate where appropriate for the purposes of cost savings and streamlined service delivery.

    Proposed Sec. 679.280(b) clarifies that when statewide funds are exhausted in a given PY, the State may fulfill the requirement to provide redesignation assistance in the following PY. This section provides States with the flexibility to balance priorities while ensuring local areas receive redesignation assistance.

    Proposed Sec. 679.280(c) provides examples of the activities that local areas may elect to pursue with the redesignation assistance received from the State. However, the State may establish policy on what other activities local areas may use funds received for the purposes of redesignation or leave such determination to the local areas.

    Section 679.290 What right does an entity have to appeal the Governor's decision rejecting a request for designation as a workforce development area?

    Proposed Sec. 679.290 outlines the appeals process for an entity that submits a request for initial or subsequent designation as a local workforce development area that is rejected by the Governor. This section implements sec. 106(b)(5) of WIOA.

    Proposed Sec. 679.290(a) establishes that entities that are not approved as local areas may follow the process established at 20 CFR 683.640. This section is essentially unchanged from WIA. However, while provisions at WIOA sec. 106(b) permit any unit of local government or combination of units to apply for designation as a local area, the law does not specify that rural concentrated employment programs may apply for designation as a local area. The intent of this section was to prohibit such an arrangement under WIOA and that this prohibition logically applies to the appeals process.

    Proposed Sec. 679.290(b) establishes that an entity making an unsuccessful appeal to the State Board may request a review of the appeal by the Secretary of Labor if the State does not respond to the appeal in a timely manner or if the appeal for designation is denied by the State. The Department defines a `timely manner' to be 60 days after the submission of the appeal. This provides adequate time for the State to review and make a ruling on the appeal while not being so long as to delay unreasonably the appeal and designation processes.

    Proposed Sec. 679.290(c) summarizes the circumstances under which the Secretary of Labor may require an entity to be designated as a local area. Specifically, the Secretary may require designation upon a finding of either a denial of procedural rights or a finding that the area meets the requirements for designation. This section was updated from WIA to reflect that neither the `automatic' nor `temporary and subsequent' designation statuses exist under WIOA.

    3. Subpart C--Local Boards

    Section 679.300 What is the vision and purpose of the Local Workforce Development Board?

    Proposed Sec. 679.300 explains the purpose of the Local Board. The Local Board represents a wide variety of individuals, businesses, and organizations throughout the local area. The Local Board serves as a strategic convener to promote and broker effective relationships between the CEOs and economic, education, and workforce partners.

    The Local Board must develop a strategy to continuously improve and strengthen the workforce development system through innovation in, and alignment and improvement of, employment, training, and education programs to promote economic growth. Local Board members must establish a platform in which all members actively participate and collaborate closely with the required and other partners of the workforce development system, including public and private organizations. This is crucial to the Local Board's role to integrate and align a more effective, job-driven workforce investment system.

    Proposed Sec. 679.300(b)(1) and (2) outlines the purposes of the Local Board. A key goal of Federally-funded training programs is to prepare job seekers ready to work with marketable skills. This includes providing strategic and operational oversight in collaboration with required and other partners to help the workforce development system achieve the purposes outlined in WIOA sec. 2, and assist in the achievement of the State's strategic and operational vision and goals outlined in the State Plan. The Local Board must work to develop a comprehensive and high-quality workforce development system by collaborating with its workforce and education partners to improve and align employment, training, and education programs under WIOA.

    Section 679.310 What is the Local Workforce Development Board?

    Proposed Sec. 679.310 defines the Local Workforce Development Board. Proposed Sec. 679.310(a) explains that the CEO in each local area appoints the Local Board in accordance with WIOA sec. 107(b) and that the Governor must certify the Local Board on a biannual basis. This proposed section retains the same requirements found at 20 CFR 661.300(a).

    Proposed Sec. 679.310(b) describes that the Local Board sets policy within the local area in partnership with the CEO, consistent with State policy. This proposed section retains the same requirements found at 20 CFR 661.300(b).

    Proposed Sec. 679.310(c), asserts that the CEO may enter into an agreement with the Local Board that describes the respective roles and responsibilities of the parties. However, the CEO remains liable for funds received under title I of WIOA unless they reach an agreement for the Governor to act as the local grant recipient and bear such liability. This proposed section retains the same requirements found at 20 CFR 661.300(c).

    Proposed Sec. 679.310(d) describes that the Local Board, in partnership with the CEO, are responsible for the development of the local plan. This proposed section retains the same requirements found at 20 CFR 661.120(d).

    Proposed Sec. 679.310(e) affirms that in local areas with more than one unit of general local government, the CEOs of the respective units may execute an agreement to describe their responsibilities for carrying out their roles and responsibilities. If the various parties cannot come to an agreement, the Governor may appoint the Local Board. This proposed section retains the

    Page 20705

    same requirements found at 20 CFR 661.300(3).

    Proposed Sec. 679.310(f) indicates that in single-State areas, the State Board must fulfill the functions of the Local Board, which the Department also required under the WIA regulation at 20 CFR 661.300(f). As required by WIOA sec. 107(c)(4)(B)(iii), the proposed section clarifies that the State is not required to establish or report on local performance measures. This clarification presents a logical approach to local performance because the local area performance will be reflected in the State performance reports.

    Proposed paragraph (g) requires the CEO to establish by-laws, consistent with State policy, that help improve operations of the Local Board. Proposed Sec. 679.310(g)(1) through (7) require that at a minimum the by-laws address the nomination process used by the CEO to elect the Local Board chair and members, term limitations and how the term appointments will be staggered to ensure only a portion of memberships expire in a given year, the process to notify the CEO of a board member vacancy to ensure a prompt nominee, the proxy and alternative designee process that will be used when a board member is unable to attend a meeting and assigns a designee, the use of technology to improve board functions, brokers relationships with stakeholders, and any other conditions governing appointment or membership on the Local Board as deemed appropriate by the CEO. In addition to these required elements, the CEO must include any additional requirements in the board's by-laws that it believes is necessary to ensure the orderly administration and functioning of the board. An effective Local Board establishes clear roles, responsibilities, procedures, and expectations through its by-laws, and that these requirements will help Local Boards to be more agile and proactive in reacting to board turnover, increase board participation when board members are not able to physically attend board meetings, improve board functionality, and help ensure that the public is informed about the operation of the board.

    Section 679.320 Who are the required members of the Local Workforce Development Board?

    Proposed Sec. 679.320 explains that the CEO in a local area must appoint a Local Workforce Development Board and provides guidelines on requirements and options for the CEO to follow in appointing members to the Local Board.

    Proposed Sec. 679.320(b) requires that a majority of the Local Board members must represent businesses as per WIOA sec. 107(b)(2)(A). Business representatives include owners, chief executive or operating officers, and other business executives, including small businesses, and business organizations. As reflected in proposed paragraph (b)(2), WIOA requires that business representatives on the Local Board must represent business that provide employment opportunities in in-demand industry sectors or occupations as defined in WIOA sec. 3(25). Employers with employment opportunities in high-growth sectors are uniquely suited to communicate the emerging workforce needs of employers in these high-growth, in-demand sectors to the Local Board.

    Proposed Sec. 679.320(c) explains the required and optional member categories that must make up at least 20 percent of the Local Board membership representing labor organizations, or where they do not exist, employee representatives. Proposed paragraphs (c)(1) and (2) require that the Local Board must include two or more representatives of labor organizations (or other employee representatives if there are no labor organizations operating in the local area) and one or more representatives of a joint-labor management registered apprenticeship program (or other registered apprenticeship program if there is no joint labor-management program in the local area). The use of the word `representatives' with respect to labor organization membership indicates a requirement for two or more members. In areas with joint apprenticeship programs, the apprenticeship representative must be a member of a labor organization or a training director.

    In addition to these required members, proposed paragraphs (c)(3) and (4) explain that the CEO may appoint one or more representatives of CBOs with experience in addressing the employment needs of individual barriers to employment including organizations that serve veterans or that provide or support competitive integrated employment for individuals with disabilities, and one or more representative of organizations with experience addressing the employment needs of WIOA-

    eligible youth, including serving OSY. While not mandatory, the two representative categories in proposed paragraphs (c)(3) and (4) count towards reaching the 20 percent threshold. Proposed Sec. 679.320(c) underscores both the importance of registered apprenticeship, a proven training strategy that effectively meets the needs of both employers and workers,\1\ and the role of organized labor in workforce development, particularly in developing registered apprenticeship programs.

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

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

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

    Proposed Sec. 679.320(d)(1) and (2) describe the entities required to be on the board to provide an adult education perspective and representation. These sections require that Local Boards include a minimum of one member with experience providing adult education and literacy activities under title II of WIOA and at least one member from a higher education institution, which may include community colleges, that provides workforce training.

    Proposed paragraph (d)(3) sets forth the statutory requirement that a minimum of one Local Board member must be included from each of the following organizations: Economic or community development organizations, the State ES Office under Wagner-Peyser serving the local area, and programs carried out under title I of the Rehabilitation Act of 1973 (29 U.S.C. 720, et seq.) other than sec. 112 or part C of that title.

    Proposed Sec. 679.320(e) provides examples of other appropriate optional members of the board. In addition to the entities described in (e)(1) through (3), proposed paragraph (e)(4) explains that the CEO may appoint other individuals to the board at his or her discretion. This provides the CEO the flexibility to assemble a Local Board that connects all key resources and stakeholders.

    Proposed Sec. 679.320(f) requires that Local Board members possess optimum policy-making authority in the organizations they represent. This proposed section retains the same requirements found at 20 CFR 661.315(c).

    Proposed Sec. 679.320(g) explains the nomination criteria for business and labor representatives, as well as representatives of adult education and literacy activities under title II when there are multiple institutions providing these services in a local area. These nomination requirements are unchanged from the requirements at 20 CFR 661.315(e), however, a formal policy ensures that business and labor organizations are provided the opportunity to provide input on board member selection. When there is more than one local area provider of adult education and literacy activities under title II, or multiple institutions of higher education providing workforce

    Page 20706

    investment activities as described in WIOA 107(b)(2)(C)(i) or (ii), the CEO must solicit nominations from those particular entities. This requirement provides for a representative selection process for these membership categories.

    Proposed Sec. 679.320(h) explains that an individual may be appointed as a representative of more than one entity if the individual meets all the criteria for representation, including the criteria described in paragraphs (c) through (g) of this section, for each entity. While such ``multiple entity'' representation may not be appropriate in all cases, the Department proposes to allow an individual to represent more than one entity, because there may be instances when such representation may be an effective tool for reducing board size while still ensuring that all entities entitled to representation receive effective representation.

    Proposed Sec. 679.320(i) explains that all required board members must have voting privileges and that the CEO may give voting privileges to non-required members. Voting rights allow the required board members to have an effect on the Local Board's key decisions and initiatives. This will enable the required board members to effectively represent the individuals and organizations of their communities.

    Section 679.330 Who must chair a Local Board?

    Proposed Sec. 679.330 affirms that the Local Board must elect a chairperson from the business representatives on the Local Board. This proposed section retains the same requirements found at 20 CFR 661.320.

    Section 679.340 What is meant by the terms ``optimum policy-making authority'' and ``demonstrated experience and expertise''?

    Proposed Sec. 679.120 explains what is meant by ``optimum policy-

    making authority'' and ``demonstrated experience and expertise'' for members of the Local Board under sec. 107(b)(5) of WIOA. Proposed paragraph (a) defines an individual with ``optimum policy-making authority'' as someone who can reasonably be expected to speak affirmatively on behalf of the entity he or she represents and to commit that entity to a chosen course of action. In order for the decisions of the board to have the greatest possible impact, all board members must be able to speak authoritatively when committing their organization to a decided course of action.

    Proposed paragraphs (b)(1) through (3) define the qualifications that satisfy the ``experience and expertise'' requirement for Local Board members. The CEO has a duty to appoint only those board members that have the skills and practical knowledge to contribute fully to the strategic vision of the local area's workforce system.

    Section 679.350 What criteria will be used to establish the membership of the Local Board?

    Proposed Sec. 679.350 affirms that the CEO appoints the Local Board in accordance with the criteria in WIOA sec. 107(b) and applicable State criteria. This proposed section retains the same requirements found at 20 CFR 661.325.

    Section 679.360 What is a standing committee, and what is its relationship to the Local Board?

    Proposed Sec. 679.360 establishes the roles and responsibilities of standing committees within the Local Board structure. Such committees were not legislated in the past, are optional under WIOA, and may be used to assist the Local Board in carrying out its responsibilities as outlined in WIOA sec. 107. The Department encourages the use of standing committees to expand opportunities for stakeholders to participate in board decision-making, particularly for representatives of organizations that may no longer sit on the Local Board but continue to have a stake in the success of board decisions. Such committees also expand the capacity of the board in meeting required functions.

    Proposed paragraph (a) expressly authorizes Local Boards to establish standing committees that include individuals who are not formal members of the board, but who have expertise to advise on issues that support the board's ability to attain the goals of the State, local and regional plans, and the objective of providing customer-

    focused services to individuals and businesses. The subpart provides examples of areas where standing committees may be particularly beneficial, including serving targeted groups of customers such as individuals with disabilities and youth, and addressing one-stop system issues.

    Proposed paragraph (b) provides for Local Board discretion in terms of what kinds of standing committees, in any, the Local Board creates.

    Proposed paragraph (c) allows Local Boards to designate an entity in existence on the date that WIOA was enacted, such as an effective youth council, to fulfill the requirements of a standing committee as long as the entity meets the requirements outlined in paragraph (a).

    Section 679.370 What are the functions of the Local Board?

    Proposed Sec. 679.370 provides the functions of the Local Boards as enumerated in statute. Under WIOA, the Local Board, in partnership with the CEO, must perform a variety of functions to support the local workforce system. Many of these functions have been expanded and enhanced under WIOA. Proposed Sec. 661.305(a), (c), (d), (g), (h), (j), (o), and (p) reiterate the relevant statutory requirements at WIOA secs. 107(d)(1) through (3), (6), (7), (9), (12), and (13); no further discussion of these provisions is provided below.

    Proposed paragraph (b) discusses a new role for Local Boards that are part of a planning region that includes multiple local areas. This regulation repeats the new statutory requirement that Local Boards that are part of a planning region must develop and submit a regional plan in collaboration with the other Local Boards in the region. Under WIOA, the local plan is incorporated into the regional plan, where required, in accordance with Sec. 679.540.

    Proposed paragraph (e) explains the role of the Local Boards in engaging employers, promoting business representation on the board, and developing and implementing proven or promising strategies for meeting the needs of employers and workers (like industry or sector partnerships) and providing linkages and coordination among employers and the workforce system. It enhances the Local Board's role in engaging employers beyond what was required by WIA by requiring the board to develop and implement promising strategies for meeting the employment skill needs of workers and employers. Engaging employers presents an opportunity to meet the local area's labor market and workforce development needs and connect customers seeking jobs or career advancement to greater employment prospects.

    Proposed paragraph (f) requires the Local Board to connect with representatives of secondary and post-secondary education programs in the local area in order to develop and implement career pathways. This regulation supports the statute's focus on career pathways.

    Proposed paragraph (i) enhances the oversight role of the Local Board beyond what was required in WIA. It requires the Local Board to conduct oversight, in partnership with the CEO, of the use and management of funds, including

    Page 20707

    ensuring the appropriate management and investment of funds to maximize performance outcomes under WIOA sec. 116.

    Proposed paragraph (k) requires that the Local Board must negotiate with CLEO and required partners on the methods for funding the infrastructure costs of one-stop centers in the local area in accordance with Sec. 678.715. This provision ensures each partner in the one-stop system is provided resources equitably.

    Proposed paragraph (l) also expands and enhances the Local Board's role in the selection of eligible service providers in the local area which must be conducted consistent with 2 CFR part 200. The regulation maintains the board's role in the identification of eligible providers of youth workforce investment activities, but now requires, consistent with WIOA sec. 107(d)(10)(B), that this identification be accomplished through the award of grants or contracts on a competitive basis. It also adds that the recommendations of the youth standing committee, if one is established, must be taken into account. It also indicates that the Local Board must identify eligible providers of career services through the award of contracts, if the one-stop operator does not provide such services. This provision does not impact those services provided by State merit staff. The final proposed expansion in this subpart is the requirement that Local Boards select one-stop operators through the competitive process described in Sec. Sec. 678.600 through 678.635.

    Proposed paragraph (m) describes the requirement that the Local Board work with the State to ensure that there are sufficient numbers and types of providers of career and training services in the local area so that consumer choice and opportunities for employment for individuals with disabilities are maximized.

    Proposed paragraph (n) reflects a number of new functions for the Local Board related to coordination with adult education and literacy providers in the local area. The regulation requires the Local Board to review applications to provide adult education and literacy activities under title II to determine whether such applications are consistent with the local plan. It also requires the board to make recommendations to the eligible agency to promote alignment with the local plan. Further information regarding Local Board coordination with adult education and literacy providers is provided at 34 CFR 463 which requires the eligible agency to establish in its competition, a processes by which applicants must submit an application to the Local Board for review prior to its submission to the eligible agency. This subpart also includes a role for the board in replicating and implementing cooperative agreements in accordance with subparagraph (B) of sec. 101(a)(11) of the Rehabilitation Act of 1973 (29 U.S.C. 721(a)(11)), and implementing cooperative agreements in accordance with that section with the local agencies administering plans under title I of that Act (29 U.S.C. 720 et seq.) (other than sec. 112 or part C of that title (29 U.S.C. 732, 741) to enhance the provision of services to individuals with disabilities and other individuals.

    Proposed paragraph (q) requires the Local Board to certify one-stop centers in accordance with Sec. 662.600.

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

    Proposed Sec. 679.380 describes how the Local Board satisfies the consumer choice requirements for career services and training services. While WIA required the Local Board to maximize consumer choice for training services, consumer choice for career services is a new requirement under WIOA. Clarification of the board's role will minimize confusion for one-stop managers and frontline staff.

    Proposed paragraphs (a)(1) through (3) describe the process of how the Local Board assists the State Board in identifying providers, ensures a sufficient number of providers, and provides performance and cost information through the one-stop system.

    Proposed paragraphs (b)(2)(i) and (ii) describe how the Local Board satisfies the requirement to provide consumer choice for career services. In general, the Local Board must decide which services are best provided by the one-stop operator and which services may require a contracted provider. Furthermore, these paragraphs require the board to identify a wide range of services based on the needs in the local area with special attention to services for individuals with disabilities and literacy services. Requiring the board to identify a wide array of potential career service providers, while still allowing the board to ultimately determine the career service providers, balances board flexibility and customer choice. There is no requirement to provide customers with a choice of providers for a given career service.

    Section 679.390 How does the Local Board meet its requirement to conduct business in an open manner under the ``sunshine provision'' of the Workforce Innovation and Opportunity Act?

    Proposed Sec. 679.390 maintains the Local Board's requirement to conduct business in an open manner, but expands on the scope of what the public must be made aware of and requires that information be shared by electronic means as well as through open meetings as provided for in WIOA sec. 107(e). These new requirements facilitate the transparent functioning of the board and contribute to smoother board operations. This can only be accomplished by each Local Board member actively participating during Local Board meetings, and by developing effective by-laws that outline the nomination process, which includes steps for a prompt nominee during a vacancy, term limitations, and encourage the use of technology and active participation.

    Section 679.400 Who are the staff to the Local Board and what is their role?

    Proposed Sec. 679.400 describes the Local Board's authority to hire staff and the appropriate roles for board staff. This proposal clarifies and differentiates the staff's role and requires the Local Board to hire only qualified staff.

    Proposed paragraph (a) authorizes the board to hire a director and other staff. The volunteer board may not have the capacity to fulfill the required board functions at WIOA sec. 107(d). Board support ensures these functions are achieved.

    Proposed paragraph (b) requires the board to apply objective qualifications to the board director. It is in the best interest of the public workforce system to ensure the director of the board is competent and experienced with workforce programs and service delivery.

    Proposed paragraph (c) limits the board staff's role to assisting the board fulfill the functions at WIOA sec. 107(d) unless the entity selected to staff the board enters into a written agreement with the board and CEO as noted in paragraph (e) and described more fully in Sec. 679.430 of this part. The reasons that the Department proposes to require a written agreement if the staff provide functions outside of those in WIOA sec. 107(d) are discussed in the preamble to Sec. 679.430 of this part.

    Proposed paragraph (d) requires Local Boards that elect to hire a director to establish objective qualifications to ensure that the selected candidate possesses the knowledge and skills to

    Page 20708

    assist the board in carrying out its functions.

    Proposed paragraph (e) limits the payment of the Local Board director and board staff to the basic pay rate for level II of the Executive Schedule under sec. 5313 of title 5, U.S.C. This requirement ensures that board staff are compensated at a reasonable level.

    Section 679.410 Under what conditions may a Local Board directly be a provider of career services, or training services, or act as a one-stop operator?

    Proposed Sec. 679.410 explains the situations in which the Local Board may directly act as a one-stop operator, a provider of career services or training services. Proposed Sec. 679.410(a)(1)(i) and (ii) establishes that a Local Board may act as a one-stop operator where a Local Board successfully participates in a competition or if the board meets the criteria for sole source procurement. Under both circumstances, as required by proposed Sec. 679.410(a)(2), implementing WIOA sec. 107(g)(2), the Governor and CEO must agree to such selection. This clarifies the interaction between sec. 122(d)(2)(A) of WIOA, which requires that Local Boards select a one-

    stop operator through a competitive process, and WIOA sec. 107(g)(2), which states that a Local Board can be designated as a one-stop operator only with the agreement of the Governor and CEO in the local area. One interpretation of sec. 107(g)(2) is that Local Boards, with approval of the Governor and CEO, could be selected as one-stop operators without undergoing a competitive process. However, such a non-competitive selection is only appropriate after a competitive process has been conducted as required by WIOA sec. 122(d)(2)(A). The Department welcomes comments regarding this interpretation.

    Proposed Sec. 679.410(a)(3) also requires that where a Local Board acts as a one-stop operator, the State must ensure certification of one-stop centers. Local Boards are required to certify one-stop centers; however, States must fulfill that role when a Local Board acts as a one-stop operator to avoid conflicts of interest with a Local Board certifying its own performance.

    Proposed Sec. 679.410(b) provides that a Local Board may act as a provider of career services only with the agreement of the CEO in the local area and the Governor. The Department interprets WIOA sec. 107(g)(2) to operate as a general exception from the requirement that the Local Board award contracts to providers of career services consistent with 2 CFR part 200. A Local Board acting as a direct provider of services is not optimal, as the Local Board is designed to oversee the one-stop system and its services, not provide them. However, unlike the selection of one-stop operators, which are statutorily required to be competitively selected, there is no similarly clear statutory requirement for providers of career services. Therefore, the Department does not propose to require that a competition fail before the Local Board may provide career services.

    Proposed 679.410(c) specifies that a Local Board is prohibited from providing training services unless the Governor grants a waiver in accordance with WIOA sec. 107(g)(1). Proposed Sec. 679.410(c)(1) requires the State to develop a procedure to review waiver requests received from Local Boards and the limitations of the waiver that incorporates the criteria listed at WIOA sec. 107(g)(1)(B)(i). While WIA contained provisions for a similar waiver, it did not include any such criteria. The intent of this waiver is to provide the option for Local Boards to provide training services in extenuating circumstances only, such as rural areas with limited training providers. A formal procedure facilitates transparency and clarity regarding the criteria for the training waiver and ensures that any Local Board that applies is subject to the same criteria. Furthermore, the new criteria underscore that the waiver is not appropriate for local areas that have a robust network of training providers.

    Proposed Sec. 679.410(c) indicates that the local area must make the request to be designated as a training provider available through public comment for a period of 30 days or more and include those comments in the local area's final request to the State. The proposed section also outlines the timeline for approval and Governor's authority to revoke a waiver if the Governor determines it is no longer needed or the Local Board demonstrates a pattern of inappropriate referrals. This proposed section helps ensure that the local area is acting in good faith when asserting that there are insufficient providers in the local area and protects against a conflict of interest.

    Proposed Sec. 679.410(d) affirms that the general prohibitions that apply to Local Boards directly providing career services or training services also apply to board staff.

    Section 679.420 What are the functions of the local fiscal agent?

    Proposed Sec. 679.420 describes the role of the local fiscal agent when the CEO in a local area elects to designate a fiscal agent. While the term `fiscal agent' was widely used under WIA, the term was never defined, which led to inconsistent understanding of their role and function throughout the workforce system. This section clarifies the role of a fiscal agent to create a common understanding of that role.

    Proposed paragraph (a) describes that the CEO or the Governor, where the Governor serves as the local grant recipient for a local area, may designate an entity to serve as a local fiscal agent.

    Proposed paragraph (b) provides a list of the key functions of a fiscal agent. The appropriate role of fiscal agent is limited to accounting and funds management functions rather than policy or service delivery. Proposed fiscal agent functions include those listed in paragraphs (b)(1) through (6) and (c) provide additional potential functions for single State areas. The Department requests comment from State and local stakeholders regarding appropriate functions for a fiscal agent.

    Section 679.430 How do entities performing multiple functions in a local area demonstrate internal controls and prevent conflict of interest?

    Proposed Sec. 679.430 clarifies how entities performing multiple functions in a local area demonstrate internal controls and prevent conflict of interest. This proposed provision requires a written agreement with the Local Board and CEO when a single entity operates in more than one of the following roles: Local fiscal agent, Local Board staff, one-stop operator, or direct provider of career services or training services. The proposed paragraph clarifies how the organization will carry out its responsibilities while demonstrating compliance with WIOA and corresponding regulations, relevant OMB circulars, and the State's conflict of interest policy. While it may be appropriate in some instances for a single organization to fulfill multiple roles, a written agreement between the Local Board, CEO, and the organization fulfilling multiple roles is the best method to limit conflict of interest or the appearance of conflict of interest, minimize fiscal risk, and develop appropriate firewalls within a single entity performing multiple functions.

    4. Subpart D--Regional and Local Plan

    WIOA provides designated regions and local workforce areas the responsibility and opportunity to develop employment and training systems tailored specifically to regional economies. These systems must meet the needs of the full range of learners and workers, including those with

    Page 20709

    barriers to employment. The system must also address the specific needs of regional employers and the skills they require. WIOA requires the Local Board, in partnership with the CEO, to submit a local plan to the Governor. If the local area is part of a planning region, the Local Board will submit its local plan as part of the regional plan and will not submit a separate local plan. The local or regional plan provides the framework for local areas to define how their workforce development systems will achieve the purposes of WIOA. The regional or local plans serve as 4-year action plans to develop, align, and integrate the region and local area's job-driven workforce development systems, and provides the platform to achieve the local area's visions and strategic and operational goals. Since the local plan is only as effective as the partnerships that operationalize it, it must represent a collaborative process among local elected officials, boards, and required and other partners (including economic development, education, and private sector partners) to create a shared understanding of the local area's workforce investment needs, a shared vision of how the workforce investment system can be designed to meet those needs, and agreement on the key strategies to realize this vision.

    Section 679.500 What is the purpose of the regional and local plan?

    Proposed Sec. 679.500 describes the purpose of the regional and local plans. Proposed Sec. 679.500(a)(1) through (4) explain that the local plan is the primary vehicle for communicating the Local Board's vision for the local workforce system and aligning and integrating local service delivery across Federal programs in a region to foster better alignment of Federal investments in job training, integrate service delivery across programs, and ensure that the workforce system is job-driven and matches employers with skilled individuals. Proposed Sec. 679.500(b) clarifies that when a State-designated region encompasses two or more local areas, the regional plan must meet the purposes of the local plan and coordinate resources across the region and across local areas. This approach is intended to align resources between multiple Local Boards.

    Section 679.510 What are the requirements for regional planning?

    Proposed Sec. Sec. 679.510, 679.520, and 679.530 describe the required contents of the regional plan, the approval process, and when the regional plan must be modified. While sec. 106(c) of WIOA clearly describes the required contents of the regional plan, it provides less detail about the approval and modification process, saying only that officials in the planning region must ``prepare, submit, and obtain approval'' of the plan. Because the local plan is a component of the regional plan, the Department has decided to apply the approval and modification requirements, including the requirement to seek public comment and sunshine provision, to the regional plan.

    Proposed Sec. 679.510 implements sec. 106(c) of WIOA and describes the State and local requirements for regional planning. Proposed Sec. 679.510(a)(1) requires Local Boards and CEOs to participate in a regional planning process. In some instances, where a single local workforce development area comprises a region, the local area will carry out its planning in this context.

    Proposed Sec. 679.510(a)(2) describes the regional plan contents and submission process. The Local Boards and CEOs must submit a regional plan to the Governor for approval that includes the activities listed at proposed Sec. 679.510(a)(1) and incorporates the local plans developed for each local area. Local areas are not required to submit an additional local plan outside of the regional planning process. The coordination required for regional planning is an effective method for local areas to identify areas of efficiency, coordinate effective practices, and streamline service delivery. While the regional plan requires coordination of local performance negotiations with the State, each CEO, as required by Sec. 677.210(b) and (c) will negotiate performance goals with the State and will remain ultimately responsible for ensuring that the local area meets or exceeds those goals.

    Proposed Sec. 679.510(b) requires Local Boards to make the regional plan available for comment before submitting the plan to the Governor and describes the steps necessary to ensure adequate public comment. This requirement provides all affected entities and the public an opportunity to provide input to inform plan development.

    Proposed Sec. 679.510(b)(5) specifically requires the public comment process to be consistent with the `sunshine provisions' at WIOA sec. 107(e), which requires that the Local Boards must make the plan available through electronic means and open meetings. This requirement ensures greater transparency in the planning process, and encourage regions to consider efforts to maximize the transparency and inclusiveness of the process.

    Proposed Sec. 679.510(c) requires the State to provide technical assistance and labor market data to facilitate regional planning. Because States possess a broader understanding of labor market information across jurisdictions and tools for analysis that individual local areas may not possess, States have a responsibility to provide and instruct local areas on the effective use of regional labor market information.

    Section 679.520 What are the requirements for approval of a regional plan?

    Proposed Sec. 679.520 describes the approval of the comprehensive 4-year regional plan. This section requires that the Governor review completed plans and stipulates that unless the Governor determines that any of the conditions described in proposed paragraphs (a) through (c) are met the plan will be considered approved 90 days after submission of the plan to the Governor.

    Section 679.530 When must the regional plan be modified?

    Proposed Sec. 679.530 describes when a regional plan must be modified. Proposed Sec. 679.530(a) requires the Governor to establish procedures governing regional plan modification, which will help ensure that the biannual modification of regional plans is conducted consistently throughout the State.

    Proposed Sec. 679.530(b) explains that the Local Boards and appropriate CEOs in the planning region must review the regional plan every 2 years and submit a modification based on significant changes in labor market and economic conditions and other factors including changes to local economic conditions, and any changes in the financing available to support WIOA title I and partner-provided WIOA services. This proposed requirement helps ensure that planning regions use their plans to drive economic development, sector, career pathway, and customer-focused service delivery strategies.

    Section 679.540 How are local planning requirements reflected in a regional plan?

    Proposed Sec. 679.540 outlines how local planning requirements are reflected in a regional plan. WIOA is silent on the coordination of the regional and local plan, noting only that the regional plan must ``incorporate local plans for each of the local areas in the planning region.'' The Department has determined that the most appropriate and least burdensome approach to implementing this provision is to incorporate the local plans within the regional plan. In this arrangement, the regional plan is completed in

    Page 20710

    cooperation with the Local Boards and CEOs in a planning region, per Sec. 679.510(a). Each individual Local Board and CEO will respond to the local planning requirements at Sec. 679.560(b) through (e) individually. The Local Boards and CEOs in a planning region must cooperate to develop a common response to the local planning requirements that discuss regional labor market information, as required by Sec. 679.540(a), and any other appropriate requirements permitted by the Governor per Sec. 679.540(b). When these activities are completed, the planning region submits one regional plan to the Governor that includes the common discussion of regional labor market information and other requirements as required by the Governor, as well as each local plan in a single document.

    Proposed Sec. 679.540(a) requires regional plans to include the items identified in Sec. Sec. 679.510 and 679.560, which implement secs. 106(c)(1) and 108(b) of WIOA.

    Proposed Sec. 679.540(b) specifies the Governor may issue regional planning guidance that allows local areas to provide a common response to any local requirements it deems as a shared regional responsibility, which may include regional economic analysis. The Department recognizes there are many planning requirements and encourages Governors to minimize the individual local area burden by reducing duplication and encouraging a coordinated service delivery strategy.

    Section 679.550 What are the requirements for the development of the local plan?

    Proposed Sec. 679.550 explains the requirements for the development of the local plan. This section emphasizes the importance of collaboration and transparency in the development and submission of the local plan and subsequent modifications.

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

    Proposed Sec. 679.550(b) requires Local Boards to make the local plan available for comment before submitting the plan to the Governor and describes the steps necessary to ensure adequate public comment. This requirement provides all affected entities and the public an opportunity to provide input to inform plan development. This section implements sec. 108(d) of WIOA.

    Proposed Sec. 679.550(b)(5) requires the public comment process to be consistent with the `sunshine provisions' at WIOA sec. 107(e) and proposed Sec. 679.390 and that the Local Board must make the plan available through electronic means and in open meetings. This requirement ensures transparency to the public. This provision implements sec. 107(e) of WIOA.

    Section 679.560 What are the contents of the local plan?

    Proposed Sec. 679.560, consistent with sec. 108(b) of WIOA, explains what information must be included in the local plan. These requirements set the foundation for WIOA principles, by fostering strategic alignment, improving service integration, and ensuring that the workforce system is industry-relevant, responding to the economic needs of the local workforce development area and matching employers with skilled workers. In addressing these planning requirements, boards engage strategic partners to develop and implement regionally aligned workforce development priorities and streamlined service delivery. Local and regional planning also is expected to lead to greater efficiencies by reducing duplication and maximizing financial and human resources. WIOA significantly expands the content requirements for the local plan.

    Proposed Sec. 679.560(a)(1) specifies that the local plan must meet the requirements of WIOA sec. 108(b)(1). Of relevance to this section, the use of economic and labor market information ensures that the local strategies are based on a thorough understanding of the economic opportunities and workforce needs of the region, and inform the alignment of strategies to the best interests of job seekers and employers with the economic future of the State. Similarly, the contents of the plan must include an analysis of the workforce development activities in the region, including an analysis of the strengths and weaknesses of such services to address the identified education and skill needs of the workforce and employment needs in the region. A thorough assessment of the best available information or evidence of effectiveness and performance information for specific service models in the region, as well as a plan to improve the effectiveness of such programs by adopting proven or promising practices, is an important part of this assessment and strategic vision. In addition, the regional analyses described in this proposed section may be conducted in cooperation with the other local areas in a local planning region as part of the regional planning requirements described at Sec. 661.290 and must not be conducted by each local area.

    Proposed Sec. 679.560(a)(1)(iii), consistent with sec. 108(c) of WIOA permits local areas to use an existing analysis to meet the requirements in Sec. 679.560(a).

    Proposed Sec. 679.560(b) outlines the required contents of the local plan that are required by secs. 108(b)(2)-(21) of WIOA to ensure that a local plan presents a comprehensive, customer-focused, and actionable service delivery strategy. This section emphasizes alignment and coordination to a greater extent than that required by WIA. Except where noted, the requirements outlined in Sec. 679.560(b)(2) through (21) simply reiterate the statutory requirements without additional explanation.

    Proposed Sec. 679.560(b)(2) requires elaboration on the strategies for alignment by requiring that the Local Board describe how such alignment will improve access to services and to activities that lead to a recognized post-secondary credential. Proposed Sec. 679.560(b)(2)(ii) explains that the Local Board must describe how they will work with entities carrying out core programs to facilitate the development of career pathways and co-enrollment, as appropriate, in core programs. Co-enrollment allows partners to leverage resources, while providing a more comprehensive service delivery strategy that meets the needs of customers with several barriers to employment. Additionally, coordination of services in a customer-focused manner minimizes the possibility of subsequent reentry into the public workforce system in cases where needed services were not provided or possible barriers not addressed.

    Proposed Sec. 679.560(b)(4) explains that the Local Board must describe how they will coordinate local workforce investment activities with regional economic development activities that are carried out in the local area and how the Local Board will promote entrepreneurial skills training and microenterprise services. Alignment between the public workforce system and local economic development activities is critical in order to identify and fulfill industry talent needs by training customers for emerging and in-demand job skills. Furthermore, microenterprise services refers to training for the purposes of self-

    employment. This training strategy may be appropriate for individuals or participants with multiple barriers to employment, including persons with disabilities.

    Proposed Sec. 679.560(b)(5) focuses on the delivery of services through the one-stop delivery system in the local area

    Page 20711

    and requires descriptions regarding how the Local Board will ensure the continuous improvement of eligible providers of services, including through the promotion of proven and promising approaches and evaluation; how the Local Board will facilitate access to services, including in remote areas, through the use of technology and other means; how entities within the one-stop delivery system, including one-

    stop operators and the one-stop partners, will comply with WIOA sec. 188, if applicable, and applicable provisions of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) regarding physical and programmatic accessibility; and the roles and resource contributions of the one-stop partners. WIOA, and the corresponding regulations at Sec. 678.420, establishes the roles of one-stop partners. These include providing access to the partner's programs through the one-stop system; making program funds available to maintain the one-stop delivery system, including infrastructure costs; providing applicable career services; entering into a MOU with the Local Board regarding one-stop operation; ongoing participation in the one-stop system; and providing representation on State and Local Workforce development boards as required and Board committees as needed. Additionally, one-stop partners are responsible for sharing infrastructure and career services costs. Documenting how one-stop partners will manage their shared roles and contribute to the funding of the one-stop in the local plan increases accountability and transparency.

    Proposed Sec. 679.560(b)(6) through (11) focus on coordination activities for improving services and avoiding duplication. Proposed Sec. 679.560(b)(11) reflects a new statutory requirement not contained in WIA that the local plan include plans, assurances and strategies for maximizing coordination with Wagner-Peyser Act services and other services provided through the one-stop system.

    Proposed Sec. 679.560(b)(12) and (13) are also new requirements under WIOA. Proposed Sec. 679.560(b)(12) speaks to coordination with adult education and literacy activities under title II of WIOA and requires a description of how the Local Board will carry out the review of local applications submitted under title II. Proposed Sec. 679.560(b)(13) is intended to enhance the provision of services to individuals with disabilities through cooperative agreements, as defined in WIOA sec. 107(d)(11), and other collaborative efforts between the Local Board and the local VR entity. All such collaborative efforts must be described in the local plan.

    Proposed Sec. 679.560(b)(16) requires the Local Board to include local levels of performance that the board has negotiated with the Governor in the local plan. Additionally, this section proposes that the local plan must include the standards, process, or performance measures that the Local Board will use to evaluate the performance of the local fiscal agent where the CEO has designated such an entity. These proposed requirements increase transparency and public accountability, while helping ensure the Local Board has the information it needs to ensure sustained fiscal integrity of public funds.

    Proposed Sec. 679.560(b)(19) maintains the requirement that the local plan include a description of the process used by the Local Board to provide for public input into the development of the plan and for public comment on the completed plan prior to its submission. Unlike WIA, this regulation identifies the 30-day timeframe for public comment prior to submission of the plan.

    Proposed Sec. 679.560(b)(20), new to WIOA, requires a description of how the one-stop centers are implementing and transitioning to an integrated, technology-enabled intake and case management information system for programs carried out under WIOA and by one-stop partners.

    Proposed Sec. 679.560(b)(21) requires that the plan include the process by which priority of service must be applied by the one-stop operator, but also clarifies that such priority is for adult career and training services and must be given to recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient. The Department is proposing to include this requirement under the authority to require additional reporting, recordkeeping, and investigations. Including the priority service policy in the local plan will help ensure a more uniform application of the policy throughout the local area.

    As permitted by sec. 108(b)(22) of WIOA, proposed Sec. 679.560(c) requires that the plan include any additional information required by the Governor.

    Proposed Sec. 679.560(d) recommends that the local plan identify the portions of the local plan that the Governor has designated as appropriate for common response among all local areas in a planning region, as per the regulations at 20 CFR 679.540.

    Proposed Sec. 679.560(e) reflects the requirement in WIOA sec. 108(e) that any comments submitted during the public comment period that represent disagreement with the plan must be submitted with the local plan.

    Section 679.580 When must the local plan be modified?

    Proposed Sec. 679.580(a) requires the Governor to establish procedures governing local plan review and modification to ensure that the biannual review and modification of local plans is conducted consistently throughout the State.

    Proposed Sec. 679.580(b) explains that the Local Board and appropriate CEOs must review the local plan every 2 years and submit a modification as needed, based on significant changes in labor market and economic conditions and other factors including changes to local economic conditions, changes in the financing available to support WIOA title I and partner-provided WIOA services, changes to the Local Board structure, or a need to revise strategies to meet performance goals. This requirement is consistent with WIOA sec. 108(a). This proposed requirement helps ensure that local areas use their plans to drive service delivery strategies and the activities the local area is performing remains consistent with the plan.

    Section 679.570 What are the requirements for approval of a local plan?

    Proposed Sec. 679.570 describes the approval of the comprehensive 4-year local plan. Proposed Sec. 679.570(a) requires that the Governor review completed plans and stipulates that unless the Governor determines that the conditions described in paragraphs (a)(1) through (3) are met the plan will be considered approved 90 days after submission of the plan to the Governor. This section implements sec. 108(e) of WIOA.

    Proposed Sec. 679.570(b) outlines the processes, roles, and responsibilities for situations in which the State is a single local area. Proposed Sec. 679.570(b)(1) clarifies the State must incorporate the local plan in the State's Unified or Combined State Plan submitted to DOL. Proposed Sec. 679.570(b)(2) states that the Secretary of Labor will perform the roles assigned to the Governor as they relate to local planning activities. Proposed Sec. 679.570(b)(3) indicates the Secretary of Labor will issue planning guidance for single area States. This section implements sec. 106(d) of WIOA.

    The Department recognizes that the development of the local plan is dependent on several other essential State and local WIOA implementation activities and that local areas may not be

    Page 20712

    able to respond fully to each of the required elements of the local plan in the timeframe provided. The Department seeks comment on the scope of the challenges local areas may face regarding regional and local planning, and potential actions that the Department can take to help local areas address these challenges.

    5. Subpart E--Waivers/WorkFlex (Workforce Flexibility Plan)

    This subpart describes the statutory and regulatory waiver authority provided by WIOA sec. 189(i), and the requirements for submitting a Workforce Flexibility Plan under WIOA sec. 190. WIOA provides States the flexibility to request a waiver of program requirements in order to implement new strategic goals for the improvement of the statewide workforce development system and to provide better customer service in exchange for accountability for expected programmatic outcomes. A Workforce Flexibility plan provides additional flexibility to the State. In general, a State with an approved Workforce Flexibility plan is given the authority to identify local level provisions to waive without further approval from the Secretary of Labor to achieve outcomes specified in the plan.

    A description of what provisions of WIOA and Wagner-Peyser may and may not be waived is included, along with an explanation of the procedures for requesting a waiver. The subpart also describes what may and may not be waived under a Workforce Flexibility Plan, and the procedures for obtaining approval of a plan. The WIOA requirements for obtaining approval for a waiver or Workforce Flexibility Plan are similar to those in WIA secs. 189(i) and 192, respectively; therefore, many of the proposed regulations are the same as the regulations implementing WIA.

    Section 679.600 What is the purpose of the General Statutory and Regulatory Waiver Authority in the Workforce Innovation and Opportunity Act?

    Proposed Sec. 679.600(a) explains that the purpose of the general statutory and regulatory waiver authority, provided under WIOA sec. 189(i)(3), is to provide flexibility to States and local areas to enhance their ability to improve the statewide workforce investment system to carry out WIOA's goals and purposes.

    Proposed Sec. 679.600(b) explains that a waiver may be requested to address impediments to a strategic plan that is consistent with the purposes of title I of WIOA, which are identified at Sec. 675.100(a) through (h).

    Section 679.610 What provisions of the Workforce Innovation and Opportunity Act and the Wagner-Peyser Act may be waived, and what provisions may not be waived?

    Proposed Sec. 679.610(a) implements WIOA sec. 189(i)(3)(A)(i), and explains that the Secretary may waive for a State or local area any of the statutory or regulatory requirements of WIOA title I, subtitles A, B, and E, except for the requirements listed in paragraphs (a)(1) through (12). As noted in this section, the purposes of title I of WIOA are described at 20 CFR 675.100(a) through (h). The Department will provide examples of requirements that it will not waive in subsequently issued guidance.

    Proposed Sec. 679.610(b) follows WIOA sec. 189(i)(3)(A)(ii), and explains that the Secretary may waive the statutory or regulatory requirements of Wagner-Peyser secs. 8 through 10, except for the requirements listed in paragraphs (b)(1) and (2).

    Section 679.620 Under what conditions may a Governor request, and the Secretary approve, a general waiver of statutory or regulatory requirements under the Workforce Innovation and Opportunity Act?

    Proposed Sec. 679.620(a) through (f) implements WIOA sec. 189(i)(3) and describes the conditions under which a Governor may request, and the Secretary may approve a waiver of statutory or regulatory requirements.

    Proposed Sec. 679.620(a) explains that the Secretary will issue guidelines on waiving WIOA and Wagner-Peyser requirements. States will be required to follow the Secretary's guidelines, which supplement the requirements listed in 20 CFR 679.600 through 679.620. The guidelines will be issued contemporaneously with State planning guidance. This proposed section retains the same requirements found at 20 CFR 661.420(f).

    Proposed Sec. 679.620(b) explains that the Governor may request a general waiver in consultation with the appropriate CEOs by submitting a waiver plan which accompanies the State's WIOA 4-year Unified or Combined State Plan, 2-year modification, or by directly submitting a waiver plan at any time after a State's WIOA Plan is approved. This approach is consistent with WIOA secs. 102 and 103, which require the State to submit either a 4-year Unified or Combined State Plan.

    Proposed Sec. 679.620(c) explains that a Governor's waiver request may seek waivers for the entire State or for one or more local areas within the State. This proposed section retains the same requirements found at 20 CFR 661.420(b).

    Proposed Sec. 679.620(d) lists the required components of a waiver plan for the improvement of the statewide workforce development system and includes the requirements of WIOA sec. 189(i)(3)(B). Specifically, the plan must identify the statutory or regulatory requirements that are requested to be waived, and the goals that the State or local area intend to achieve as a result of the waiver. The plan must also describe the actions that the State or local area has taken to remove State or local statutory or regulatory barriers; the goals of the waiver and the expected programmatic outcomes if the waiver is granted; the individuals affected by the waiver; and the processes used to monitor the progress in implementing the waiver, provide notice to any Local Board affected by the waiver, and provide any Local Board affected by the waiver an opportunity to comment on the request.

    Proposed Sec. 679.620(d)(1) requires that the waiver plan explain how the goals of the waiver relate to the Unified or Combined State Plan. Waivers must support State strategies as enumerated in the State Plan. Waivers are not separate or detached from the Unified or Combined State Plan: An approved waiver constitutes a modification of the State Plan.

    Additionally, as required by Sec. 679.620(d)(4), the waiver plan must describe how the waiver will align with the Department's priorities, such as supporting employer engagement, connecting education and training strategies, supporting work-based learning, and improving job and career results. The Department's priorities may change and evolve to reflect major changes in the economy, changes in the needs of the workforce, and new developments in service strategy approaches. This new requirement ensures that the Department is issuing waivers that align with and help achieve the priorities of the Department. As noted in Sec. 679.620(d)(4)(v), a more complete list of current priorities will be articulated in future guidance.

    Proposed Sec. 679.620(d)(5) requires the waiver plan to generally describe the individuals affected by the proposed waiver. This section specifically requires that the plan describe how the waiver will impact services for disadvantaged populations and individuals with multiple barriers to employment. One of the primary purposes of WIOA is to increase and enhance education, employment, and

    Page 20713

    training opportunities for individuals with barriers to employment, including low-income individuals, individuals with disabilities, the Native American population, and the other groups identified in sec. 3(24) of the Act. The Department has added this specific requirement to ensure that the State, as part of its waiver request, considers the employment and training needs of these groups and how the proposed waiver would affect these populations.

    An additional requirement at proposed Sec. 679.620(d)(6)(iv) is that the plan must describe the processes used to ensure meaningful public comment, including comment by business and organized labor. This requirement was included to ensure as transparent a process as possible, to make sure that the public is given an opportunity to voice their concerns or support of potential changes in the public workforce system, while the Governor is afforded an opportunity to reflect on the opinions of the public before proceeding with a waiver request. This proposed section retains the same requirements found at 20 CFR 661.420(c)(5)(iv).

    The Governor must also describe, per Sec. 679.620(d)(6)(v), the process used to collect and report information about the goals and outcomes achieved under the waiver plan in the State's WIOA Annual Report. The Department approves waivers in order to assist States and local areas in achieving goals and outcomes that will improve the statewide workforce development system. This collection and reporting requirement holds States accountable for the goals and outcomes to be achieved with the approved waivers and provides a regular and public assessment of the effectiveness of States and local areas in doing so.

    Finally, proposed Sec. 679.620(d)(7) explains that if a waiver is up for renewal, the Secretary may require that States provide the most recent data available about the outcomes achieved under the existing waiver. This requirement will ensure that the Department has the most recent, relevant information before deciding whether to renew a waiver. As part of its decision the Department may take other factors into account when deciding to renew or deny a waiver.

    Proposed Sec. 679.620(e) specifies that the Secretary will issue a decision on a waiver request within 90 days of the receipt of the waiver, consistent with WIOA sec. 189(i)(3)(C).

    Proposed Sec. 679.620(f) implements the requirements of WIOA secs. 189(i)(C)(i) and (ii), and explains that the Secretary will approve a waiver request only to the extent that the Secretary determines that the requirements for which a waiver is requested impede the ability of either the State or local area to implement the State's plan to improve the statewide workforce investment system, and the State has executed a MOU with the Secretary requiring the State to meet, or ensure that the local area meets, agreed-upon outcomes and to implement other appropriate measures to ensure accountability. This section also makes approval of the waiver contingent on the Secretary's determining that the waiver plan meets all of the requirements of WIOA sec. 189(i)(3) and Sec. Sec. 679.600 through 679.620. This proposed section retains the same requirements found at 20 CFR 661.420(e), except that the statutory reference has changed from sec. 189(i)(4) to sec. 189(i)(3).

    Consistent with current practice, proposed Sec. 679.620(g) authorizes the Secretary to approve a waiver for as long as the Secretary determines is appropriate; however, the duration of the waiver may not exceed the duration of a State's current Unified or Combined State Plan. For example, a waiver granted during the third year of the Plan would have to be reconsidered as part of the subsequent plan submission and approval cycle, at the latest. By limiting the duration of the waiver, the Department will be able to ensure that the waiver is consistent with the goals of the State's plan and remains consistent with the priorities of the Department.

    Proposed Sec. 679.620(h) gives the Secretary the authority to revoke a State's waiver under certain circumstances. The Secretary has an obligation to oversee the implementation and performance of States under their State plan, including any waivers granted by the Department. As part of this responsibility, the Department proposes to allow the Secretary to revoke a waiver granted under this section if the State fails to meet the agreed upon outcomes and measures, the State fails to comply with the terms and conditions of the MOU or other document that includes the terms and conditions of the waiver, and if the Secretary determines that the waiver no longer meets any of the requirements of Sec. Sec. 679.600 through 679.620. Limiting the Secretary's authority to revoke to these circumstances balances the State's need for flexibility with the Secretary's duty to oversee the implementation of the waiver.

    Section 679.630 Under what conditions may the Governor submit a Workforce Flexibility Plan?

    Proposed Sec. 679.630 describes the conditions under which the Governor may submit a workforce flexibility (work-flex) plan.

    Proposed Sec. 679.630(a) includes the requirements of WIOA sec. 190(a), and explains that a State may submit a workforce flexibility plan for approval by the Secretary, under which three categories of statutory or regulatory requirements can be waived.

    Proposed Sec. 679.630(a)(1), implementing WIOA sec. 190(a)(1), permits a State to waive any of the statutory or regulatory requirements that are applicable to local areas under WIOA title I (if the local area requests the waiver), except for the requirements listed in proposed paragraphs (a)(1)(i) through (iv). In addition to the statutory exceptions, this proposed section adds the requirement that any of the statutory provisions essential to WIOA's title I purposes cannot be waived.

    The second category, described in proposed Sec. 679.630(a)(2), and implementing WIOA sec. 190(a)(2), explains that any of the statutory or regulatory requirements applicable to the State under Wagner-Peyser Act secs. 8 through 10 may be waived, except for requirements listed at Sec. 679.630(a)(2)(i) and (ii). This proposed section retains the same requirements found at 20 CFR 661.430(a)(2).

    Proposed Sec. 679.630(a)(3), implementing WIOA sec. 190(a)(3), permits waiver of the statutory or regulatory requirements applicable under the Older Americans Act of 1965 to State agencies on aging with respect to activities carried out using funds allotted under sec. 506(b) of the Older Americans Act, except the for requirements identified at Sec. 679.630(a)(3)(i) through (iv).

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

    Proposed Sec. 679.630(b)(1) and (3) implement the requirements at WIOA sec. 190(b)(1), and specify that a State workforce flexibility plan must include a description of the process by which local areas in the State may submit and obtain State approval of applications for waivers, and the requirements of title I of WIOA that are likely to be waived by the State under the plan.

    Proposed Sec. 679.630(b)(2) adds the requirement that the plan include a description of the criteria that the State will use to approve local area waiver requests and how such requests support implementation of the goals identified

    Page 20714

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

    Proposed Sec. 679.630(b)(4) implements the requirements of WIOA sec. 190(b)(2) and requires a description of the Wagner-Peyser Act secs. 8 through 10 that are proposed for waiver, if any. This proposed section retains the same requirements found at 20 CFR 661.430(c)(3).

    Proposed Sec. 679.630(b)(5) implements the requirements of WIOA sec. 190(b)(3) and requires a description of the requirements of the Older Americans Act that are proposed for waiver, if any. This proposed section retains the same requirements found at 20 CFR 661.430(c)(4).

    Proposed Sec. 679.630(b)(6) implements the requirements of sec. 190(b)(4) of WIOA by requiring that the plan describe the outcomes to be achieved by the waivers. The section explains that ``outcomes'' include, when appropriate, revisions to adjusted levels of performance included in the State or local plan under WIOA title I, and a description of the data or other information the State will use to track and assess outcomes. This provision allows the Department to measure more effectively the impact of waivers. For some waivers, it may be difficult to make a direct connection between the waiver and a direct impact on performance; in those instances the State must discuss the impact of a waiver on performance to the extent that the State has available data.

    Proposed Sec. 679.630(b)(7) implements WIOA sec. 190(b)(5) and requires that the plan include the measures to be taken to ensure appropriate accountability for Federal funds in connection with the waivers. This proposed section retains the same requirements found at 20 CFR 661.430(b)(6).

    Proposed Sec. 679.630(c) explains that a State's workforce flexibility plan may accompany the State's Unified or Combined State Plan, the required 2-year modification of the State's Unified or Combined State Plan, or may be submitted separately as a plan modification. This requirement emphasizes that the State may submit a workforce-flexibility plan at any time.

    Proposed Sec. 679.630(d) explains that the Secretary may approve a workforce flexibility plan consistent with a period of approval of the State's Unified or Combined State Plan, and not more than 5 years. For example, if a workflex plan is approved in the third year of a 4-year Unified Plan, the approval would be for the remainder of the period covered by the plan and then would need to be reconsidered as part of the subsequent Unified Plan or Combined Plan. Approving a workforce flexibility plan for the life of a currently approved Unified or Combined State Plan ensures that the waivers granted under the plan are consistent with the strategies outlined in the State Plan. The period of up to 5 years is consistent with sec. 190(c) of WIOA.

    Proposed Sec. 679.630(e) implements WIOA sec. 190(d) and requires the State to provide notice and opportunity for comment on the proposed waiver request to all interested parties and the general public before submitting the workforce flexibility plan to the Secretary. This proposed section retains the same requirements found at 20 CFR 661.430(e).

    Proposed Sec. 679.630(f) explains that the Secretary will issue guidelines under which States may request designation as a workflex State. This proposed section retains the same requirements found at 20 CFR 661.430(f) and notes that the Secretary's guidelines may include requirements for a State to implement an evaluation of the impact of work-flex in that State.

    Section 679.640 What limitations apply to the State's Workforce Flexibility Plan authority under the Workforce Innovation and Opportunity Act?

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

    Proposed Sec. 679.640(a)(1) specifies that under work-flex waiver authority, a State must not waive WIOA, Wagner-Peyser Act, or Older Americans Act requirements which are excepted from the work-flex waiver authority and described in Sec. 679.630(a). This proposed section retains the same requirements found at 20 CFR 661.440(a)(1).

    Proposed Sec. 679.640(a)(2) explains that requests to waive title I of WIOA requirements that are applicable at the State level may not be granted under work-flex waiver authority granted to a State. These requests may only be granted by the Secretary under the general waiver authority which is described at Sec. Sec. 679.610 through 679.620. The Department included this provision to emphasize that work-flex waivers are issued under separate authority than general waivers, and that States may not use work-flex waiver authority as a substitute for the general State-level waivers available under sec. 189(i)(3). This proposed section retains the same requirements found at 20 CFR 661.440(a)(2).

    Proposed Sec. 679.640(b) expands on Sec. 679.630(b)(6) by explaining that once approved the Secretary may terminate a work-flex designation if the State fails to meet agreed-upon outcomes or the terms and conditions contained in its workforce flexibility plan. The Department included this provision to emphasize that the Department reserves the authority to terminate a workflex plan if a State is not meeting the terms and conditions agreed to between the Department and the State, including the relevant performance outcomes.

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

    1. Introduction

    In this part of the proposed rule, the Department describes requirements relating to the services that are available for adults and dislocated workers under WIOA. Adult services are provided to job seekers who are at least 18 years old; the statute and the proposed rule, in providing for such services, establish a priority for serving low-income individuals, participants on public assistance, and individuals lacking basic work skills. Dislocated worker services are targeted for workers who are unemployed and have lost a job, through no fault of their own, sometimes through mass layoffs that happen during the business cycle. The goal of these services is to provide for the return of these individuals to quality employment. Dislocated workers generally include an individual who:

    Has been terminated or laid off, or has received a notice of termination or layoff from employment;

    Is eligible for or has exhausted entitlement to UC or has been employed for a duration sufficient to demonstrate attachment to the workforce but is not eligible for UC due to insufficient earnings or works for an employer not covered under State UC law; and

    Is unlikely to return to a previous industry or occupation.

    Under WIOA, adults and dislocated workers may access career services and training services. WIOA provides for a workforce system that is universally accessible, customer centered, and training that is job-driven. WIOA will provide for career and training services at the nation's nearly 2,500 one-stop centers. Training is supported through a robust ETPL, comprised of entities with a proven capability of securing participants with quality employment. WIOA also provides enhanced access

    Page 20715

    and flexibility for work-based training options, such as OJT, customized training, and incumbent worker training. In this part, the Department also discusses supportive services and needs-related payments that can be provided, based on customer needs, to enable them to participate in WIOA career and training services.

    2. Subpart A--Delivery of Adult and Dislocated Worker Activities Under Title I of the Workforce Innovation and Opportunity Act

    Introduction

    This subpart discusses the role of WIOA adult and dislocated worker services through the one-stop delivery system. The one-stop delivery system is the foundation of the workforce system. The system provides universal access to career services to meet the diverse needs of adults and dislocated workers. The grant recipient(s) for the adult and dislocated worker program is a required partner in the one-stop delivery system and is subject to the required partner responsibilities set forth in Sec. 678.415.

    Career and training services, tailored to the individual needs of jobseekers, form the backbone of the one-stop delivery system. While some jobseekers may only need self-service or other basic career services like job listings, labor market information, labor exchange services or information about other services, some jobseekers will need services that are more comprehensive and tailored to their individual career needs. These services may include comprehensive skills assessments, career planning, and development of an individual employment plan that outlines the needs and goal of successful employment. Under WIA, career services were identified as core and intensive services and generally participants would go through each level of service in order to eventually receive training. WIOA clarifies that individuals receiving services in the one-stop centers must receive the service that is needed to assist the individual to meet his or her job search goals, and does not need to follow a fixed sequence of services that may not be necessary to effectively serve the individual.

    Under WIOA, the Department proposes to classify career services into two categories: Basic and individualized career services. This grouping is not designed to create barriers to training, but rather identifies the importance that these two types of career services can have in helping individuals obtain employment. Basic career services must be made available to all job seekers and include services such as labor exchange services, labor market information, job listings, and information on partner programs. Individualized career services identified in WIOA and described in these proposed regulations are to be provided by local areas as appropriate to help individuals to obtain or retain employment.

    Under WIA, participants often were required to undergo a sequence of core and intensive services in order to receive training. WIOA clarifies that there is no sequence of service requirement in order to receive training. Training is made available to individuals after an interview, assessment or evaluation determines that the individual requires training to obtain employment or remain employed. Supportive services, including needs-related payments, can be essential to enable individuals to participate in career and training services.

    Section 680.100 What is the role of the adult and dislocated worker programs in the one-stop delivery system?

    Proposed Sec. 680.100 directs that the one-stop system is the foundational system through which adult and dislocated worker program services are provided to eligible individuals. WIOA merges the categories of core services and intensive services under WIA into the category of career services.

    Section 680.110 When must adults and dislocated workers be registered and considered a participant?

    Proposed Sec. 680.110 addresses the important distinction between registration and participation--two separate actions in the process by which adults and dislocated workers seek direct, one-on-one staff assistance from the one-stop system. The distinction is important for recordkeeping and program evaluation purposes. Individuals who are primarily seeking information are not treated as participants and their self-service or informational search requires no registration. When an individual seeks more than minimal assistance from staff in taking the next step towards self-sufficient employment, the person must be registered and eligibility must be determined. To register, as defined in Sec. 675.300, is the point at which information that is used in performance information begins to be collected. Participation is the point at which the individual has been determined eligible for program services and has received or is receiving a WIOA service, such as career services, other than self-service or informational service and is the point at which an individual is to be included in performance calculations for the primary indicators in 20 CFR part 681.

    Proposed Sec. 680.110(a) describes the registration process for collecting information to support a determination of eligibility for the WIOA adult and dislocated worker programs. This section explains that registration can be done electronically, through interviews, or through an application. This section proposes to distinguish the term ``participation'' from registration by providing that participation occurs after IC and eligibility determination, when an individual receives a WIOA service, other than self-service or informational activities.

    Proposed Sec. 680.110(b) requires that adults and dislocated workers who receive services other than self-service and informational activities must be registered and considered a participant for WIOA title I services.

    Proposed Sec. 680.110(c) maintains the requirement in WIA regulation Sec. 663.105(c) that EO data be collected on every individual who is interested in being considered for WIOA title I financially assisted aid, benefits, services, or training, and who has signified that interest by submitting personal information in response to a request from the service provider.

    Section 680.120 What are the eligibility criteria for career services for adults in the adult and dislocated worker programs?

    An individual must be 18 years of age or older to receive career services in the adult program. Priority for individualized career services and training services funded with title I adult funds must be given to low-income adults and public assistance recipients and individuals who are basic skills deficient, in accordance with WIOA sec. 134(c)(3)(E) and proposed Sec. 680.600.

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

    Proposed Sec. 680.130(a) states that an individual must meet the definition of ``dislocated worker'' in WIOA sec. 3(15) to receive career services in the dislocated worker program.

    Proposed Sec. 680.130(b) provides that Governors and Local Boards may develop policies and procedures for one-stop operators to use in determining a dislocated worker's eligibility for career services consistent with the definitions provided in the statute,

    Page 20716

    regulations and any guidance issued by the Secretary.

    Proposed Sec. 680.130(b)(1) and (2) allows for Governors and Local Boards to develop policies and procedures for what constitutes a ``general announcement'' of a plant closing. These policies and procedures could include policies and procedures for what constitutes a ``general announcement'' of a plant closing or for what constitutes ``unemployed as a result of general economic conditions in the community in which the individual resides or because of natural disasters'' for individuals who are self-employed, including family members and ranch hands.

    Section 680.140 What Workforce Innovation and Opportunity Act title I adult and dislocated worker services are Local Boards required and permitted to provide?

    Proposed Sec. 680.140 describes generally the availability of funds for use in providing services for adult and dislocated workers under title I of WIOA. Local areas have significant flexibility when providing services with adult and dislocated worker funds. In addition to the required career and training services, local areas may use these funds to provide additional job seeker services, business services, as well as facilitate enhanced coordination between other partner programs and entities at the State and local level. Local areas can use these funds to develop new types of technical assistance, develop new intake procedures, test new procurement methods which may lead to better outcomes for jobseekers, and ensure robust services to businesses throughout the workforce system.

    Paragraph (a) provides that WIOA title I adult and dislocated worker funds to local areas must be used to provide career and training services through the one-stop delivery system. Local areas have discretion in the appropriate mix of services, but both career and training services must be made available through the one-stop system for provision to eligible individuals served through the system.

    Paragraph (b) describes the services that may be provided with WIOA title I adult and dislocated worker funds in local areas.

    Subparagraph (b)(1) identifies ``Job Seeker Services.'' These services include customer support activities to help individuals with barriers to employment, training programs for displaced homemakers and individuals training for nontraditional occupations, work support activities for low-wage workers, supportive services and needs-related payments, and providing transitional jobs to individuals with barriers to employment who are chronically unemployed or have an inconsistent work history.

    Paragraph (b)(2) identifies ``Employer Services.'' These services include customized screening and referral of qualified participants in training to employers, customized employment-related services to employers, and business services.

    Paragraph (b)(3) identifies ``Coordination Activities.'' Coordination is required among training and employment activities under WIOA, child support agencies and services, Department of Agriculture extension programs, facilitating remote access by using technology and the one-stop delivery system, economic development agencies, linkages between the public workforce system and employers and those between the one-stop delivery system and unemployment insurance programs, and organizations that provide services to individuals with disabilities.

    Paragraph (b)(4) authorizes local areas to enter into pay-for-

    performance contracts as part of a training strategy. Local areas may use up to 10 percent of their total adult and dislocated worker funds under this procurement method.

    Paragraph (b)(5) provides for technical assistance for one-stop operators, partners, and ETPs regarding the provision of services to individuals with disabilities.

    Paragraph (b)(6) provides for local areas to adjust the economic self-sufficiency standards for local areas. Levels of self-sufficiency may vary by local area and the local economy; this flexibility allows local areas to tailor their services in a way that works in their local economy.

    Paragraph (b)(7) provides for the implementation of promising services to workers and employers. Local areas can build upon promising practices to improve service delivery to both job seekers and employers.

    Paragraph (b)(8) provides for the use of funds for incumbent worker training. Local areas can use up to 20 percent of their combined adult and dislocated worker funds to do incumbent worker training consistent with subpart F of this part.

    Section 680.150 What career services must be provided to adults and dislocated workers?

    At a minimum, all of the basic career services described in WIOA sec. 134(c)(2)(A)(i)-(xi) and Sec. 678.430(a) must be provided in each local area through the one-stop delivery system. These services include referrals to partner programs, initial assessments, and labor exchange services.

    In addition, services described in WIOA sec. 134(c)(2)(A)(xii) and Sec. 678.430(b), such as career counseling and the development of an individual employment plan, must be made available if appropriate for an individual to obtain or retain employment. These services are categorized as ``Individualized Career Services'' in Sec. 678.430(b). An individual employment plan is discussed in connection with proposed Sec. 680.180.

    Appropriate follow-up services must be made available to a participant placed in unsubsidized employment for a minimum of 12 months following the participant's first date of employment. Follow-up services can be useful for participants in order to maintain employment. One-stop staff can provide workplace information and tips for success in a workplace environment. Additionally, follow-up services provide a continuing link between the participant and workforce system; these services allow the one-stop to assist with other services the participant may need once he or she obtains employment. Examples may include assistance with employer benefits, health insurance, and financial literacy and budgeting assistance.

    Section 680.160 How are career services delivered?

    Proposed Sec. 680.160 explains that career services must be provided through the one-stop delivery system. Career services may be provided by the one-stop operator or through contracts with service providers approved by the Local Board. A Local Board may not be the provider of career services unless it receives a waiver from the Governor and meets other statutory and regulatory conditions.

    Section 680.170 What is an internship or work experience for adults and dislocated workers?

    Proposed Sec. 683.170 defines an internship or work experience as a planned, structured, time-limited learning experience that takes places in a workplace. An internship or work experience may be paid or unpaid, as appropriate. An internship or work experience may be provided in the private for-profit, non-profit, or public sectors. Labor standards apply to any internship or work experience in which an employee/employer relationship exists under applicable law. The Department recognizes the role work experiences and internships play in

    Page 20717

    helping individuals obtain the skills they need to succeed in the workplace. An internship or work experience for a participant in WIOA is classified as an Individualized Career Service as described in Sec. 678.430(b). Internships and work experiences provide a helpful means for an individual to gain experience that leads to unsubsidized employment.

    Section 680.180 What is the individual employment plan?

    Proposed Sec. 680.180 explains that an individual employment plan is an individualized career service, as described in Sec. 678.430(b), jointly developed by the participant and career planner, that may be appropriate for an individual. The plan includes an ongoing strategy to identify employment goals, achievement objectives, and an appropriate combination of services for the participant to obtain these goals and objectives. Individual employment plans are one of the most effective ways to serve individuals with barriers to employment, and to coordinate the various services including training services they may need to overcome these barriers.

    3. Subpart B--Training Services

    Introduction

    Training services are discussed at proposed Sec. Sec. 680.200 through 680.230. WIOA is designed to increase participant access to training services. Training services are provided to equip individuals to enter the workforce and retain employment. Training services may include, for example, occupational skills training, OJT, registered apprenticeship which incorporates both OJT and classroom training, incumbent worker training, pre-apprenticeship training, workplace training with related instruction, training programs operated by the private sector, skill upgrading and retraining, entrepreneurial training, and transitional jobs. Training services are available for individuals who, after interview, evaluation or assessment, and case management are determined to be unlikely or unable to obtain or retain employment that leads to self-sufficiency or higher wages from previous employment through career services alone. The participant must be determined to be in need of training services and to possess the skills and qualifications to successfully participate in the selected program. The Department explains that some participants may need additional services to assist their vocational training, such as job readiness training, literacy activities including English language training, and customized training.

    Section 680.200 What are training services for adults and dislocated workers?

    Proposed Sec. 680.200 directs the reader to WIOA sec. 134(c)(3)(D) for a description of available training services. The proposal provides a series of examples that is not all-inclusive.

    Section 680.210 Who may receive training services?

    Proposed Sec. 680.210(a) discusses the process used to determine when and what training services must be made available to an individual. Under WIOA, an individual may receive training services after an interview, evaluation, or assessment, and career planning if the one-stop operator or partner determines the individual is unlikely or unable, by only receiving career services, to retain employment that leads to economic self-sufficiency or wages comparable to or higher than wages from previous employment. Additionally, the one-stop operator or partner must also determine that the training the individual receives would result in employment leading to economic self-sufficiency or wages comparable to or higher than wages from previous employment. The one-stop operator or partner must also determine that the individual has the skills and qualifications to successfully participate in and complete the training. Upon a determination that career services are unlikely to obtain these employment outcomes, the individual may be enrolled in training services. The individual should have the skills and qualifications needed to successfully participate in and complete the training services.

    Proposed Sec. 680.210(b) requires that individuals, for whom training has been deemed appropriate, select a training program linked to employment opportunities in the local area or in an area to which the individual is willing to commute or relocate. The selection of this training program should be fully informed by the performance of relevant training providers, and individuals must be provided with the performance reports for all training providers who provide a relevant program.

    Proposed Sec. 680.210(c) explains that WIOA training services must be provided when other sources of grant assistance are unavailable to the individual.

    Proposed Sec. 680.210(d) requires that training services provided under the WIOA adult funding stream must be provided in accordance with the State or Local Board's priority system.

    Section 680.220 Are there particular career services an individual must receive before receiving training services under Workforce Innovation and Opportunity Act?

    WIOA removed the requirement under WIA that an individual had to receive an intensive service before receiving training services. The proposal explains that, other than an interview, evaluation, or assessment and career planning there is no requirement that additional career services must be provided before an individual enrolls in training. Where an assessment is provided, a previous assessment may be adequate for this purpose. There is no requirement for a sequencing of services under WIOA. If individuals are determined to be in need of training consistent with WIOA sec. 134(c)(3) then they may be placed in training services. The Department encourages the use of individualized career services under Sec. 678.420(b) when appropriate for an individual; an individual employment plan or career counseling informed by local labor market information and training provider performance reports often will be appropriate before an individual receives training services.

    Proposed Sec. 680.220(b) requires that the case files for individuals must document the participant eligibility for training services and explain how this determination was made--by interview, evaluation or assessment, career planning, or other career service, such as an individual employment plan. It is important that the one-

    stop gather enough information, by whatever means, be they through an interview or through career services, to justify the need for training services.

    Section 680.230 What are the requirements for coordination of Workforce Innovation and Opportunity Act training funds and other grant assistance?

    Proposed Sec. 680.230 restates the requirements for coordination with other forms of assistance that apply under WIA. The Department has also added a sentence to Sec. 680.230(a)(2) to reflect the new provision in WIOA sec. 134(c)(3)(B)(iii) that one-stop operators and one-stop partners may take into account the full cost of the training, including the cost of supportive services. The Department encourages program operators to do so.

    Proposed Sec. 680.230(a) states that when coordinating other grant assistance the one-stop operator or

    Page 20718

    partner may take into account the full cost of participating in training services, including the cost of dependent care and transportation and other appropriate costs. Additionally, the one-stop operator or partner must coordinate training funds available and make funding arrangements with one-stop partners and other entities.

    Proposed Sec. 680.230(b) states that WIOA participants may enroll in WIOA-funded training while the participant has a Pell Grant application pending as long as the one-stop operator has made arrangements with the training provider and the WIOA participant regarding the award of the Pell Grant. The training provider must reimburse the one-stop operator or partner the amount of the WIOA funds used to pay for the training costs covered by the Pell Grant in the event that one is approved after WIOA-funded training has begun. Reimbursement from the participant for education-related expenses is not required.

    4. Subpart C--Individual Training Accounts

    Introduction

    Individual Training Accounts (ITAs) are key tools used in the delivery of many training services. The Department seeks to provide maximum flexibility to State and local program operators in managing ITAs. These proposed regulations do not establish the procedures for making payments, restrictions on the duration or amounts of the ITA, or policies regarding exceptions to the limits. The authority to make those decisions resides with the State or Local Boards. The authority that States or Local Boards may use to restrict the duration of ITAs or restrict funding amounts must not be used to establish limits that arbitrarily exclude eligible providers.

    Through the one-stop center, individuals will be provided with quality and performance information on providers of training and, with effective career services, case management, and career planning with the ITA as the payment mechanism. ITAs allow participants the opportunity to choose the training provider that best meets their needs. Under WIOA, ITAs can more easily support placing participants into registered apprenticeship programs than under WIA.

    Section 680.300 How are training services provided?

    Proposed Sec. 680.300 explains that in most circumstances an individual will receive training services through an ITA. An ITA is established on behalf of the participant, where services are purchased from eligible providers selected in consultation with a career planner. Payments may be made through electronic transfers of funds, vouchers, or other appropriate methods. Payments may be made at the beginning of the training program or on an incremental basis; the payment processes must be decided at the local level. As explained in proposed Sec. 680.300, an ITA is used by an individual to access training services from an entity on the State's ETPL. In some circumstances involving work-based training, such as OJT, customized training, registered apprenticeship, incumbent worker training and transitional jobs, the Local Board may contract out the training services. The section allows for a Local Board itself to provide the training services if it receives a waiver from the Governor. Local Boards must coordinate funding for ITAs with funding from other Federal, State, local, or private job training programs or sources to assist individuals in obtaining training services.

    Section 680.310 Can the duration and amount of Individual Training Accounts be limited?

    Proposed Sec. 680.310 maintains the State and local flexibility to impose limits on ITAs that exists under WIA.

    Section 680.320 Under what circumstances may mechanisms other than Individual Training Accounts be used to provide training services?

    Proposed Sec. 680.320(a) discusses the exceptions to the otherwise required use of an ITA for training. In situations covered by these exceptions, a contract for services may be used to provide for training. The exceptions include:

    1. OJT, which could include placing participants in a registered apprenticeship, customized training, incumbent worker training, or transitional jobs.

    2. Where a Local Board determines there are an insufficient number of eligible providers in the local area to accomplish the purpose of an ITA. The local plan must describe how this determination was made and the process used for contracting for services. This exception maintains the same language as WIA.

    3. If the Local Board determines a CBO or other private organization provides effective training services to individuals with barriers to employment. The Local Board must develop criteria to show that the program is effective.

    4. Training for multiple individuals in in-demand industry sectors or occupations, as long as the contract does not limit the individual's consumer choice.

    5. Circumstances in which a pay-for-performance contract is appropriate, consistent with Sec. 683.510.

    Proposed Sec. 680.320(b) includes the term ``individuals with barriers to employment'' in place of the term ``special participant,'' as used under WIA. ``Individuals with barriers to employment'' is broader than ``special participants.'' ``Individuals with barriers to employment'' includes: Displaced homemakers (see Sec. 680.630); low-

    income individuals; Indians, Alaska Natives, and Native Hawaiians; individuals with disabilities; older individuals; ex-offenders; homeless individuals; youth who are in or have aged out of the foster care system; individuals who are English learners, have low literacy levels, or face substantial cultural barriers; eligible MSFWs; individuals within 2 years of exhausting lifetime eligibility under TANF; single parents (including pregnant women); long-term unemployed individuals; and members of other groups identified by the Governor.

    Section 680.330 How can Individual Training Accounts, supportive services, and needs-related payments be used to support placing participating adults and dislocated workers into a registered apprenticeship program and support participants once they are in a registered apprenticeship program?

    This regulation is designed to ensure States and local areas have the flexibility to serve individuals in both being placed into a registered apprenticeship as well as to assist currently registered apprentices. WIOA provides a new opportunity for registered apprenticeship programs to automatically qualify to be placed on the State's ETPL, allowing ITAs to support participants in registered apprenticeship programs, and more directly connecting apprenticeship programs to job seekers in one-stop centers. Some apprenticeship programs are with a single employer, whereas others may operate through a joint labor-management organization where participants are selected for the apprenticeship but not immediately hired by a specific employer. The Department is seeking comment on how registered apprenticeship programs and individuals enrolled or seeking to be enrolled in such programs may be best served within the one-stop delivery system.

    Page 20719

    Proposed Sec. 680.330(a) states that participants may use an ITA to receive training at a pre-apprenticeship program that is on the State's ETPL. Pre-apprenticeship programs provide training to increase math, literacy, and other vocational skills needed to gain entry to a registered apprenticeship program. A pre-apprenticeship program funded with an ITA must have at least one registered apprenticeship partner; such pre-apprenticeship programs must possess or develop a strong record of enrolling their pre-apprenticeship graduates into a registered apprenticeship program. The Department is also open to comment on how pre-apprenticeship programs and individuals enrolled or seeking to be enrolled in such programs may be best served within the one-stop delivery system.

    Proposed Sec. 680.330(b) explains that the cost of tuition may be paid through an ITA to the training provider involved in a registered apprenticeship program. In such instances, the training provider may be an employer, a joint labor-management entity, a labor organization, or an outside training provider.

    Proposed Sec. 680.330(c) states that supportive services may be provided to support the placement of a participant into a registered apprenticeship program, consistent with the rules governing supportive services in subpart H.

    Proposed Sec. 680.330(d) explains that needs-related payments may be provided to support the placement of a participant into a registered apprenticeship program, consistent with the rules governing needs-

    related payments in subpart H.

    Proposed Sec. 680.330(e) provides a citation to the regulations on using OJT funds with registered apprenticeships.

    Section 680.340 What are the requirements for consumer choice?

    Proposed Sec. 680.340 largely restates the consumer choice requirements established under WIA. The term ``career planner,'' used in WIOA, replaces the term ``case manager,'' used in WIA. Proposed Sec. 680.340(e) provides that one-stop operators may coordinate funding for ITAs with other funding sources in order to assist the individual in obtaining training services. Proposed Sec. 680.340(f) requires that priority consideration be given to programs that are aligned with in-demand industry sectors or occupations in the local area.

    5. Subpart D--Eligible Training Providers

    This part describes the methods by which organizations qualify as eligible providers of training services under WIOA. It also describes the roles and responsibilities of the State and Local Boards in managing this process and disseminating ETPLs. The State ETPL and the related eligibility procedures ensure the accountability, quality, and labor-market relevance of programs of training services that receive funds through WIOA title I-B. The regulations emphasize that the list and accompanying information must be easily understood and disseminated widely, in order to maximize informed consumer choice and serve all significant population groups.

    The State plays a leadership role in ensuring the success of the eligible provider system in partnership with Local Boards, the one-stop system, and its partners. The Governor must establish eligibility criteria and procedures for initial determination and renewals of eligibility for training providers and training programs to receive funds under WIOA title I-B. In doing so, the Governor may establish minimum performance levels for eligibility and the Department encourages Governors to do so. In establishing minimum performance levels for eligibility, the Govenor should take into consideration the need to serve targeted populations. The Local Board may establish additional performance levels for program eligibility within a local area.

    The proposed regulations implement WIOA sec. 122 and refer to WIOA secs. 107, 116, and 134 where those sections affect provider eligibility, the ETPL, the use of ITAs, and the inclusion of registered apprenticeship programs on the ETPL. In Sec. 680.410, the regulations clarify that all training providers, including those operating under the ITA exceptions, must qualify as eligible providers, except for those engaged in OJT and customized training (for which the Governor must establish qualifying procedures as discussed in Sec. 680.530). The proposed regulations also explain how registered apprenticeship programs, which WIOA treats differently than other providers in some respects, are to be included in the list. Finally, the regulations describe how the State ETPL must be disseminated with accompanying performance and cost information. The performance information must be presented in a way that is easily understood, in order to maximize informed consumer choice and serve all significant population groups. Separately, ETP performance reports, which require providers to supply performance information for all individuals enrolled in a program are addressed in Sec. 677.230.

    In response to concerns expressed by stakeholders that some providers of training would face difficulties in participating in this WIOA-revised system, the Department has clarified the interrelated eligibility requirements and explained that while WIOA places an emphasis on quality training as measured by performance criteria, State and Local Boards and training providers must work together in attaining this goal. The proposed regulations emphasize the Governor's discretion in offering financial or technical support to training providers where the information requirements of this section result in undue cost or burden. Making a wide variety of high-quality training programs available to participants will increase customer choice and that training providers may find performance information useful to improve their programs of study, which in turn will provide a direct benefit to participants. The Department also encourages the Governor to work with ETPs to return aggregate performance information to the provider in ways that will help the training providers improve their program performance. Given that training providers may have many programs of study within their institution, the department is seeking comment on ways that States can help streamline performance reporting for training providers and minimize the burden associated with reporting on multiple programs of study. The State and Local Boards must work together to ensure sufficient numbers and types of training providers and programs in order to maximize customer choice while maintaining the quality and integrity of training services. In addition, the proposed regulations explain that CBOs have the opportunity to deliver training funded under WIOA through contracts for services rather than ITAs, provided the local area determines this is necessary to meet local customer needs and also that the provider meets training performance requirements. Because of WIOA's emphasis on ensuring the provision of quality training, and the importance of using performance criteria to obtain such quality, the Department does not intend to waive any of the requirements of this section. The Department is seeking comment on possible adaptations of ETP eligibility and reporting requirements to ensure small CBOs, especially those serving hard to

    Page 20720

    serve participant populations, have the capacity to qualify as ETPs.

    Section 680.400 What is the purpose of this subpart?

    The workforce development system established under WIOA emphasizes informed consumer choice, job-driven training, provider performance, and continuous improvement. The quality and selection of providers and programs of training services is vital to achieving these core principles. As required by WIOA sec. 122, proposed Sec. 680.400 explains that States, in partnership with Local Boards, must identify providers of training services that are qualified to receive WIOA funds to train adults and dislocated workers. Therefore, WIOA requires that each State must maintain a list of ETPs. The list must be accompanied by relevant performance and cost information and must be made widely available, including in electronic formats, and presented in a way that is easily understood, in order to maximize informed consumer choice and serve all significant population groups.

    Section 680.410 What entities are eligible providers of training services?

    Proposed Sec. 680.410 defines the types of entities that may be considered eligible to provide training services and the specific funds to be used for this purpose. This proposed section explains that training providers, including those operating under the ITA exceptions, must qualify as eligible providers, except for those engaged in OJT and customized training (for which the Governor must establish qualifying procedures as discussed in Sec. 680.530). The proposed regulations identify registered apprenticeship programs as included in the list as long as the program remains registered. This is further explained in proposed Sec. 680.470.

    Proposed paragraph (a) explains that only providers that the State determines to be eligible, as required in WIOA sec. 122, may receive training funds under WIOA title I-B. This refers to funds used to provide training for adult and dislocated worker participants who enroll in a program of training services. Proposed paragraph (a) states that the Governor will establish the criteria and procedures for determining eligibility. These criteria must take into account, at a minimum the items in WIOA sec. 122(b)(1)(A). Under the requirements of WIOA sec. 122, the procedures for determining eligibility of providers are established at the State level and include application and renewal procedures, eligibility criteria, and information requirements.

    Proposed paragraphs (a)(1) through (4) list the categories of potentially eligible training entities. This list is largely unchanged from WIA. Potentially eligible entities include post-secondary education institutions, registered apprenticeship programs, other public or private providers of training, Local Boards that meet certain conditions, and CBOs or private organizations providing training under contract with the Local Board.

    Proposed paragraphs (b)(1) and (2) specify that these eligibility requirements apply to adult and dislocated worker funds. The requirements apply to both participants who seek training using ITAs and those who seek training through the exceptions described in proposed Sec. Sec. 680.320 and 680.530. Under WIOA sec. 134(c)(3)(G), limited exceptions allow local areas to provide training through a contract for services rather than ITAs in order to maintain consumer choice. These exceptions include: OJT training, customized training, incumbent worker training, or transitional employment; instances where the Local Board determines there are insufficient numbers of eligible providers of training services in the local area; where the Local Board determines an exception is necessary to meet the needs of individuals with barriers to employment (including assisting individuals with disabilities or adults in need of adult education and literacy services); where the Local Board determines that it would be most appropriate to award a contract to an institution of higher education or other eligible provider to facilitate the training of multiple individuals in in-demand industry sectors or occupations (where the contract does not limit customer choice); and, for pay-for-performance contracts.

    Proposed paragraph (b)(2) explains that the requirements to become an eligible provider of training services apply to all organizations providing training to adults and dislocated workers, with the specific exception for registered apprenticeship programs. WIOA makes a change from WIA in that registered apprenticeship programs must be included and maintained on the list for as long as the program remains registered. Registered apprenticeship programs are not subject to the same application and performance information requirements as other ETPs. However, because it is possible that particular registered apprenticeship programs may prefer not to be included on the list, the proposed regulation requires registered apprenticeship programs to indicate their interest in being on the State list, according to a mechanism established by the Governor. The pertinent requirements for registered apprenticeship programs are explained in proposed Sec. 680.470.

    Section 680.420 What is a ``program of training services''?

    Proposed Sec. 680.420 defines the term ``program of training services,'' which is used throughout this part. The Department explains that a program of training services includes a structured regimen that leads to specific outcomes. Our definition reinforces a key principle of WIOA to improve accountability and performance. Proposed paragraphs (a) through (c) align the outcomes for a program of training services with the performance requirements described in WIOA sec. 116(b)(2)(A). These potential outcomes include post-secondary credentials, industry-

    recognized credentials, employment, and measurable skill gains toward credentials or employment.

    Section 680.430 Who is responsible for managing the eligible provider process?

    Proposed Sec. 680.430 explains the roles of the Governor and Local Boards in administering the eligible provider process. Throughout this subpart, the Department emphasizes the Governor's discretion, in consultation with stakeholders, to establish eligibility procedures. The eligible provider process under WIOA sec. 122 requires the Governor to establish eligibility procedures and to clarify State and Local Board roles and responsibilities. In various sections, WIOA assigns responsibilities to Local Boards concerning ETPs and identifies additional optional activities that may be undertaken by Local Boards. For the convenience of stakeholders and the public, the Department has listed in proposed Sec. 680.430 these required and potential activities.

    Proposed paragraph (a) explains the Governor's responsibilities for managing the process for determining eligibility, developing and maintaining the State's list of ETPs, and disseminating the list to Local Boards, as required by WIOA sec. 122. In keeping with WIOA secs. 122(a)(1) and (c)(1), proposed paragraph (a) further requires that Governors consult with the State Board when establishing these procedures. Proposed paragraph (b) authorizes the Governor to designate a State agency to carry out the requirements of this section. While WIOA sec. 122 does not address this point, the Department anticipates that most States will work through a designated State agency (or appropriate State entity) to administer the

    Page 20721

    requirements of this section. The Department proposes paragraph (b) to make this option explicit.

    Proposed paragraphs (b)(1) through (5) describe the State's responsibilities for developing and maintaining the State list of providers. The State may establish minimum performance levels. The State is responsible for determining if such performance targets are met. It is also the State's responsibility to determine whether accurate information has been submitted, take enforcement actions as needed, and disseminate the list to the Local Boards, the one-stop system, its partner programs, and the public. This includes dissemination through Web sites and searchable databases and any other means the State uses to disseminate information to consumers. Under WIA, similar responsibilities were primarily assigned to the Local Workforce Boards. In establishing greater accountability and flexibility at the State level, WIOA sec. 122 specifically requires the State to manage the ETP process. Proposed paragraph (b) describes these responsibilities and notes the Governor's primary role in exercising these responsibilities, including the assignment of duties to be undertaken by Local Boards.

    Paragraph (c) identifies the required responsibilities of Local Boards, which are found in WIOA secs. 107 and 134. These include responsibilities assigned to Local Boards statutorily as well as responsibilities that may be assigned by the Governor. Proposed paragraph (c)(1) makes clear that the Local Board must carry out procedures assigned to it by the State, as provided for under WIOA sec.122(c)(1). The Department provides examples of the responsibilities that the Governor may choose to assign to Local Boards, including duties similar to those undertaken by Local Boards under WIA.

    Proposed paragraph (c)(2) explains the Local Boards' responsibility to work with the State to ensure that there are sufficient number and variety of programs to provide participants, as consumers, adequate choice among providers, as described in WIOA sec. 107. Local Boards are charged with working with the State to ensure that there are sufficient numbers and types of providers to meet the skill development needs of adults and dislocated workers, including those who are disabled and/or require adult literacy assistance. This proposed paragraph emphasizes that Local Boards and the State must work together to ensure adequate consumer choice.

    Proposed paragraph (c)(3) explains, as required by WIOA sec. 134(a)(2)(B), that Local Boards must also ensure that the State' eligible training provider list is disseminated publicly through the local one-stop system, and its partner programs. The list is a tool to assist one-stop customers in evaluating training programs and provider options. The dissemination of the list is also discussed under proposed Sec. 680.500.

    Proposed paragraph (d) explains the roles that a Local Board may choose to exercise in the eligible provider process. The Governor's procedure may not prevent Local Boards from exercising these options.

    Proposed paragraph (d)(1) emphasizes the potential for Local Board input into the Governor's development of the eligible provider procedure. WIOA sec. 122(e) requires the Governor to provide an opportunity for interested members of the public to make recommendations and submit comments regarding the eligibility procedure. Although not explicitly addressed in the WIOA sec. 122, the Department interprets its language to encompass Local Boards and thus have included this requirement in the proposed paragraph.

    Proposed paragraphs (d)(2) and (3) include the provisions at WIOA sec. 122(b)(3), which allow Local Boards to set additional eligibility criteria, information requirements, and minimum performance levels for local providers beyond what is required by the Governor's procedure. Stakeholders and the public must note that any additional requirements imposed by a Local Board will only affect a program's eligibility and performance requirements within the local area.

    Section 680.440 What are the transition procedures for Workforce Investment Act-eligible providers to become eligible under the Workforce Innovation and Opportunity Act?

    Proposed Sec. 680.440 explains the procedure established by WIOA sec. 122(c) for training providers that were eligible as of the date WIOA was enacted, July 21, 2014, to continue their eligibility under WIOA. The Department anticipates the majority of providers previously eligible under WIA will be affected by this transition.

    Proposed paragraph (a) explains that the Governor may establish a transition period and states that providers that were eligible on July 21, 2014 will remain eligible under WIOA until December 31, 2015, or such earlier date as the Governor may set. Proposed paragraph (b) explains that in order to retain eligibility after the transition period, these providers will be subject to the application procedure established by the Governor for providers that have previously been found eligible, as further explained in proposed Sec. 680.460. Proposed paragraph (c) explains that providers that have previously been found eligible are not subject to the initial eligibility procedures, as described in proposed Sec. 680.450. As discussed in Sec. 680.450, the initial eligibility procedures apply only to providers that were not previously eligible under WIA or WIOA.

    Section 680.450 What is the initial eligibility procedure for new providers?

    Proposed Sec. 680.450 describes the process for adding ``new''' providers to the ETPL (i.e., those that have not previously been found eligible under sec. 122 of either WIA or WIOA). Such providers must first apply for initial eligibility according to procedures set by the Governor. In accordance with WIOA sec. 122(b)(4), this proposed section describes the factors the Governor must take into consideration in developing this procedure and take into account in setting criteria for initial eligibility. Eligibility is determined on a program-by-program basis for each provider. Proposed Sec. 680.450 distinguishes between registered apprenticeship programs seeking inclusion on the list and other providers. Registered apprenticeship programs, consistent with WIOA sec. 122(a)(3), are not subject to the initial eligibility application procedure. However, registered apprenticeship programs are required to indicate their interest to be included in the ETPL, according to a mechanism established by the Governor, as discussed in Sec. 680.470.

    Proposed paragraph (a) explains that the Governor's procedure must require that providers of training seeking initial eligibility submit required information in order to receive initial eligibility.

    Proposed paragraph (b) explains the exception for providers who are carrying out registered apprenticeship programs under the National Apprenticeship Act. Such programs are included and maintained on the list of eligible providers of training for as long as the program remains registered. Therefore, registered apprenticeship programs are not subject to a period of initial eligibility or to initial-

    eligibility procedures. Rather, the Department proposes paragraph (b) to require the Governor to establish a procedure whereby registered apprenticeship programs may indicate their interest to be included and maintained on the list. This requirement is further discussed in Sec. 680.470.

    Proposed paragraph (c) explains the requirement that the Governor must consult with Local Boards and solicit

    Page 20722

    public comment in determining the initial eligibility procedure. While the Governor is responsible for developing the initial eligibility procedure, input by the Local Board and public comment remain important for shaping a public workforce system that is responsive to local needs. The Local Board is responsible for working with the State to ensure that there are sufficient numbers and types of providers of career and training services, as required by WIOA sec. 107(d)(10)(E) and described in proposed Sec. 679.370(m). Therefore, the Department is requiring that the Governor consult with Local Boards about the initial eligibility procedure in order to maximize consumer choice at the local level. This is also in keeping with WIOA sec. 122(e) on the requirements for public comment. In addition, although WIOA does not address this point, the Department proposes requiring the Governor to describe the procedure, eligibility criteria, and information requirements for initial eligibility in the State Plan. Although States will need a separate mechanism for public comment during the first year of implementation, in subsequent years the State Plan process will afford the opportunity to solicit comments and recommendations from key stakeholders. In addition, the State Plan submission and review process allows the Department to ensure compliance with statutory and regulatory requirements and identify promising practices and technical assistance needs.

    Proposed paragraph (d) explains that the Governor must establish criteria and State requirements for non-exempt providers seeking initial eligibility. These initial requirements apply to providers that were not previously eligible under this section (or sec. 122 of WIA, as in effect on the day before the enactment of WIOA).

    Proposed paragraph (e) describes the factors that the Governor must take into account in establishing the criteria for determining initial eligibility. For those institutions that are not exempt from complying with the ETP application process, the State must establish consistent and uniform criteria for providers seeking initial eligibility. The information that must be submitted to the State for review will be defined by the Governor, but must, at a minimum, address factors related to program elements included in both WIOA secs. 122(b)(4)(D) and 116(b)(2)(A)(i)(I)-(IV). The Department has listed these required elements in proposed paragraphs (e)(2) through (5). The elements taken from WIOA sec. 122 include information addressing factors related to program performance indicators, any partnership a program has with a business, attributes indicating high quality training services and credentialing, and the alignment of the program's services with in-

    demand industry sectors. WIOA requires that providers provide ``verifiable program-specific performance information.'' The Department is interested in comments about the types of verifiable program specific-information this would include. The Department is particularly interested in the methods of providing verifiable information that are the least costly to the training provider and the easiest to verify to reduce the cost to the State or local area. The Department has added a requirement that the applicant provide a description of the program. The Department thinks this information is not burdensome and is essential to enable customers to understand whether the program meets their training needs.

    Proposed paragraph (f) describes the Governor's discretion to establish minimum performance standards. As with the application procedures described in Sec. 680.460, the Governor may establish minimum performance levels in the initial eligibility procedures, and the Department encourages them to do so.

    Proposed Sec. 680.450(g) emphasizes the time limit for initial eligibility, which is 1 fiscal year for a particular program, per WIOA sec. 122(b)(4)(B).

    Proposed paragraph (h) clarifies that after the period of initial eligibility, these training providers are subject to the Governor's application procedure, described at proposed Sec. 680.460 in order to remain eligible.

    Section 680.460 What is the application procedure for continued eligibility?

    Proposed Sec. 680.460 explains the detailed application process for previously WIA-eligible providers to remain eligible under WIOA. Eligibility is determined on a program-by-program basis for each provider.

    Proposed paragraphs (a)(1) and (2) list the two groups of providers that are subject to the requirements of proposed Sec. 680.460. These include new training providers that were previously eligible under WIA (following the Governor's transition period, which ends December 31, 2015 or such earlier date established by the Governor) as well as new training providers whose initial eligibility expires after 1 fiscal year.

    Proposed paragraphs (b)(1) and (2) explain that the Governor is required to gather and consider input from Local Boards, providers, and the public, including representatives of business and labor organizations. The Local Board is responsible for working with the State to ensure that there are sufficient numbers and types of providers of career and training services, as required by WIOA sec. 107(d)(10)(E) and described in proposed Sec. 679.370(m). Therefore, the Department is requiring that the Governor consult with Local Boards regarding training provider eligibility procedures in order to maximize consumer choice among quality training providers at the local level. This is also in keeping with WIOA sec. 122(e) regarding the requirements for public comment. While WIOA does not specify a timeframe within which the consultation and determination must be completed, proposed paragraph (b)(3) requires the Governor to establish a timeframe for that purpose while leaving the amount of time to the Governor's discretion. The same requirements for Local Board consultation and a public comment period are described above in connection with proposed Sec. 680.450(c) for the Governor's development of initial eligibility procedures.

    Proposed paragraph (c) clarifies that registered apprenticeship programs are exempted from these application procedures. Under WIOA sec. 122(a)(3), registered apprenticeship programs must be included and maintained on the State list for as long as the program remains registered. While registered apprenticeships are considered eligible, not all re