[Federal Register: August 11, 2000 (Volume 65, Number 156)]

[Rules and Regulations]

[Page 49293-49342]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr11au00-7]

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Part II

Department of Labor

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Employment and Training Administration

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20 CFR Part 652 et al.

Workforce Investment Act; Final Rules

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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 652 and Parts 660 through 671

RIN 1205-AB20

Workforce Investment Act

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

ACTION: Final rule.

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SUMMARY: The Department of Labor (DOL) is issuing a Final Rule

implementing provisions of titles I, III and V of the Workforce

Investment Act. Through these regulations, the Department implements

major reforms of the nation's job training system and provides 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. Key components of

this reform include streamlining services through a One-Stop service

delivery system, empowering individuals through information and access

to training resources through Individual Training Accounts, providing

universal access to core services, increasing accountability for

results, ensuring a strong role for Local Boards and the private sector

in the workforce investment system, facilitating State and local

flexibility, and improving youth programs.

DATES: This Final Rule will become effective on September 11, 2000.

ADDRESSES: All comments received during the comment period following

the publication of the Interim Final Rule (64 FR 18662, et seq., Apr.

15, 1999) are available for public inspection and copying during normal

business hours at the Employment and Training Administration, Office of

Career Transition Assistance, 200 Constitution Avenue, NW., Room S-

4231, Washington, DC 20210. Copies of the Final Rule are available in

alternate formats of large print and electronic file on computer disk,

which may be obtained at the above-stated address. The Final Rule is

also available on the WIA web site at http://usworkforce.org.

FOR FURTHER INFORMATION CONTACT: Mr. Eric Johnson, Office of Career

Transition Assistance, U.S. Department of Labor, 200 Constitution

Avenue, NW., Room S-4231, Washington, DC 20210, Telephone: (202) 219-

7831 (voice) (this is not a toll-free number) or 1-800-326-2577 (TDD).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

This Final Rule does not add any new information collection

requirements to those of the Interim Final Rule. Certain sections of

this Final Rule, such as Secs. 667.300, 667.900, 668.800, and 669.570

contain information collection requirements. These requirements have

not been changed. Under the Paperwork Reduction Act of 1995 (44 U.S.C.

3507(d)), the Department of Labor submitted a copy of these sections to

the Office of Management and Budget for review. No comments were

received about and no changes have been made to the information

collection requirements.

We have prepared documents providing guidance on specific

information collection requirements. As required by the Paperwork

Reduction Act of 1995 (44 U.S.C. 3507(d)), we submitted these documents

to the Office of Management and Budget (OMB) for its review. Affected

parties do not have to comply with the information collection

requirements contained in this document until we publish in the Federal

Register the control numbers assigned by the Office of Management and

Budget. Publication of the control numbers notifies the public that OMB

has approved this information collection requirement under the

Paperwork Reduction Act of 1995. For further information contact: Ira

Mills, Departmental Clearance Officer, Department of Labor, 200

Constitution Avenue, NW., Washington, DC 20210, (202) 219-5095, ext.

143.

I. Background

A. WIA Principles

On August 7, 1998, President Clinton signed the Workforce

Investment Act of 1998 (WIA), comprehensive reform legislation that

supersedes the Job Training Partnership Act (JTPA) and amends the

Wagner-Peyser Act. WIA also contains the Adult Education and Family

Literacy Act (title II) and the Rehabilitation Act Amendments of 1998

(title IV). Guidance or regulations implementing titles II and IV will

be issued by the Department of Education.

WIA reforms Federal job training programs and creates a new,

comprehensive workforce investment system. The reformed system is

intended to be customer-focused, to help Americans access the tools

they need to manage their careers through information and high quality

services, and to help U.S. companies find skilled workers. This new law

embodies seven key principles. They are:

- Streamlining services through better integration at the

street level in the One-Stop delivery system. Programs and providers

will co-locate, coordinate and integrate activities and information, so

that the system as a whole is coherent and accessible for individuals

and businesses alike.

- Empowering individuals in several ways. First, eligible

adults are given financial power to use Individual Training Accounts

(ITA's) at qualified institutions. These ITA's supplement financial aid

already available through other sources, or, if no other financial aid

is available, they may pay for all the costs of training. Second,

individuals are empowered with greater levels of information and

guidance, through a system of consumer reports providing key

information on the performance outcomes of training and education

providers. Third, individuals are empowered through the advice,

guidance, and support available through the One-Stop system, and the

activities of One-Stop partners.

- Universal access. Any individual will have access to the

One-Stop system and to core employment-related services. Information

about job vacancies, career options, student financial aid, relevant

employment trends, and instruction on how to conduct a job search,

write a resume, or interview with an employer is available to any job

seeker in the U.S., or anyone who wants to advance his or her career.

- Increased accountability. The goal of the Act is to

increase employment, retention, and earnings of participants, and in

doing so, improve the quality of the workforce to sustain economic

growth, enhance productivity and competitiveness, and reduce welfare

dependency. Consistent with this goal, the Act identifies core

indicators of performance that State and local entities managing the

workforce investment system must meet--or suffer sanctions. However,

State and local entities exceeding the performance levels can receive

incentive funds. Training providers and their programs also have to

demonstrate successful performance to remain eligible to receive funds

under the Act. And participants, with their ITA's, have the opportunity

to make training choices based on program outcomes. To survive in the

market, training providers must make accountability for performance and

customer satisfaction a top priority.

- Strong role for local workforce investment boards and the

private sector, with local, business-led boards

acting as ``boards of directors,'' focusing on strategic planning,

policy development and oversight of the local workforce investment

system. Business and labor have an immediate and direct stake in the

quality of the workforce investment system. Their active involvement is

critical to the provision of essential data on what skills are in

demand, what jobs are available, what career fields are expanding, and

the identification and development of programs that best meet local

employer needs. Highly successful private industry councils under JTPA

exhibit these characteristics now. Under WIA, this will become the

norm.

- State and local flexibility. States and localities have

increased flexibility, with significant authority reserved for the

Governor and chief elected officials, to build on existing reforms in

order to implement innovative and comprehensive workforce investment

systems tailored to meet the particular needs of local and regional

labor markets.

- Improved youth programs linked more closely to local labor

market needs and community youth programs and services, and with strong

connections between academic and occupational learning. Youth programs

include activities that promote youth development and citizenship, such

as leadership development through voluntary community service

opportunities; adult mentoring and followup; and targeted opportunities

for youth living in high poverty areas.

Many States and local areas have already taken great strides in

implementing these principles, supported by grants from the Department

of Labor (DOL) to build One-Stop service delivery systems and school-

to-work transition systems. The Act builds on these reforms and ensures

that they will be available throughout the country.

We wish to emphasize that DOL considers the reforms embodied in the

Workforce Investment Act to be pivotal, and not ``business as usual.''

This legislation provides an unprecedented opportunity for major

reforms that can result in a reinvigorated, integrated workforce

investment system. States and local communities, together with

business, labor, community-based organizations, educational

institutions, and other partners, must seize this historic opportunity

by thinking expansively as they design a customer-focused,

comprehensive delivery system.

The success of the reformed workforce investment system is

dependent on the development of true partnerships and honest

collaboration at all levels and among all stakeholders. While the

Workforce Investment Act and these regulations assign specific roles

and responsibilities to specific entities, for the system to realize

its potential necessitates moving beyond current categorical

configurations and institutional interests. Also, it is imperative that

input is received from all stakeholders and the public at each stage of

the development of State and local workforce investment systems.

The cornerstone of the new workforce investment system is One-Stop

service delivery which unifies numerous training, education and

employment programs into a single, customer-friendly system in each

community. The underlying notion of One-Stop is the coordination of

programs, services and governance structures so that the customer has

access to a seamless system of workforce investment services. We

envision that a variety of programs could use common intake, case

management and job development systems in order to take full advantage

of the One-Stops' potential for efficiency and effectiveness. A wide

range of services from a variety of training and employment programs

will be available to meet the needs of employers and job seekers. The

challenge in making One-Stop live up to its potential is to make sure

that the State and Local Boards can effectively coordinate and

collaborate with the network of other service agencies, including TANF

agencies, transportation agencies and providers, metropolitan planning

organizations, child care agencies, nonprofit and community partners,

and the broad range of partners who work with youth.

B. Rule Format

The format, as well as the substance, of the Final Rule, reflects

the Administration's commitment to regulatory reform and to writing

regulations that are reader-friendly. We have attempted to make these

regulations clear and easy to understand, as well as to anticipate

issues that may arise and to provide appropriate direction. To this

end, the regulatory text is presented in a ``question and answer''

format. We have organized the regulations in a way that will help those

implementing the new system to recognize the various steps that must be

taken to develop the organization and services that make up the

workforce investment system. In many cases, the provisions of WIA are

not repeated in these regulations. In response to comments, however, we

determined that, in a number of instances, the regulations would

provide context and be more reader-friendly if the Act's provisions

were included in an answer rather than merely cross-referencing the

statute.

C. Prior Actions

Since the passage of the Workforce Investment Act in August of

1998, we have used a variety of means to initiate extensive

coordination with other Federal agencies that have roles and

responsibilities under WIA. In addition, the Department of Labor, the

Department of Education, the Department of Health and Human Services,

the Department of Transportation, and the Department of Housing and

Urban Development continue to meet on a regular basis to resolve issues

surrounding WIA implementation.

Before publishing the Interim Final Rule, we also requested and

received input from a broad range of sources about how to structure

guidance on how to comply with a number of WIA statutory provisions. We

solicited broad input on WIA implementation through a variety of

mechanisms: establishing a web site to encourage input; publishing a

Federal Register notice on September 15, 1998; conducting regional and

national panel discussions in October 1998; publishing a White Paper

announcing goals and principles governing implementation; posting

issues on the usworkforce.org web site; sharing a discussion draft of

regulatory issues with stakeholders; holding town hall meetings across

the country in December 1998; conducting several workgroups in December

1998; issuing draft Planning Guidance in December 1998; and conducting

a series of WIA Implementation Technical Assistance Conferences across

the country in March and April of 1999.

On April 15, 1999, the Interim Final Rule was published in the

Federal Register, at 64 FR 18662 through 18764, and a 90-day comment

period commenced. We continued to provide information by posting

questions and answers on the usworkforce.org web site; publishing a

series of consultation papers in April, May and August of 1999, on

defining and measuring performance, incentives and sanctions, customer

satisfaction, and continuous improvement; conducting a second round of

Town Hall meetings across the country in August of 1999; and hosting

``Voice of Experience'' forums in February and March of 2000 where

practitioners shared insights and suggestions for successful

implementation of WIA. An Interim Final Rule implementing section 188

nondiscrimination and equal

opportunity provisions of WIA, codified in 29 CFR part 37, was

published separately in the Federal Register, at 64 FR 61692 through

61738, Nov. 12, 1999. Comments received on those regulations will be

addressed in the preamble to that Final Rule.

We reviewed every comment received during the comment period

following publication of the Interim Final Rule, as well as the

experience of early implementing States, and suggestions received from

partners and stakeholders when considering whether the Final Rule

should differ from the Interim Final Rule. These comments are discussed

in the Summary and Explanation of the individual provisions of the

Final Rule. Section 506(c)(1) of the Act required the Secretary of

Labor to issue this Final Rule implementing provisions of the WIA under

the Department's purview by December 31, 1999. While we were unable to

meet this deadline, we have endeavored to issue this Final Rule as

expeditiously as possible without compromising the quality of the

document. Under Secretary of Labor's Order No. 4-75, the Assistant

Secretary for Employment and Training has been delegated the

responsibility to carry out WIA policies, programs, and activities for

the Secretary of Labor. We have determined that this Final Rule, as

promulgated, complies with the WIA statutory mandate to issue a Final

Rule and provides effective direction for the implementation of WIA

programs.

II. Summary and Explanation

This section contains our response to comments received on the

Interim Final Rule during the comment period. The comments are

discussed at considerable length in order to make clear our

interpretation of WIA through these final regulations and of their

application to some of the challenges that may arise in implementing

the Act.

We have set regulations only where they are necessary to clarify or

to explain how we intend to interpret the WIA statute, to provide

context for interpretations or to provide a clear statement of the

Act's requirements. In several instances--for example, the Indian and

Native American Programs, and Migrant and Seasonal Farmworker

Programs--the regulations were developed in consultation with advisory

councils and are more comprehensive in order to assist those grantees.

Consistent with the Act, the Final Rule provides the States and local

governments with the primary responsibility to initiate and develop

program implementation procedures and policy guidance regarding WIA

administration.

There are a limited number of changes in the Final Rule because of

our commitment to allowing maximum flexibility at the State and local

level. Section 661.120 formalizes this flexibility in the regulations.

A number of comments suggested that we specify certain groups of

providers and participants and types of activities in numerous sections

of the regulations. Among others, these comments suggested revising the

regulations to: add new definitions, and additional State and local

planning requirements; require States and locals to consult with

specific organizations in order to fulfill the public comment process

requirements; and identify certain types of programs, providers or

participants, such as service learning opportunities, and

nontraditional employment and training opportunities for women and

dislocated homemakers, in matters where States and localities have

discretion to define terms and make other discretionary decisions. To

provide policy-making flexibility to States and local areas and to

avoid suggesting that any one group or activity is more important than

those not highlighted in the regulations, we have generally not made

those changes. However, we do believe that consultation with and

inclusion of these groups is important to obtaining the optimal

functioning of the cooperative system envisioned by WIA. We fully

expect that States and local areas will consult broadly before adopting

plans and policies; and that their workforce investment systems will be

structured to include all providers and programs that may help meet the

needs of their populations, and equitably serve all population segments

within their service areas.

In addition to the changes made based upon the comments received,

in order to clarify policy and interpretation and improve upon the

Rule's reader-friendly format, we have also made technical changes to

correct typographical errors, such as consistent capitalization,

abbreviations, grammatical corrections and citations, and for

consistency with the regulations implementing the nondiscrimination and

equal opportunity provisions of WIA section 188, which were first

published in the Federal Register on November 12, 1999 (64 FR 61692

through 61738, 29 CFR part 37).

When publishing a Final Rule following a comment period, it is

customary to publish only changes made to the rule, however, in order

to be more user-friendly, we are publishing the entire Rule, including

those parts that have not been changed, for WIA titles I and V. This

means that one document which contains all of the regulations and

commentary may be consulted rather than needing to compare various

documents. Similarly, the new Wagner-Peyser regulations at part 652

subpart C are republished in full.

Description of Regulatory Provisions

Part 660--Introduction to the Regulations for the Workforce Investment

Systems Under Title I of the Workforce Investment Act

Part 660 discusses the purpose of title I of the Workforce

Investment Act and explains the format of the regulations governing

title I.

A few commenters suggested we add the attainment of self-

sufficiency to the description of the purpose of title I in

Sec. 660.100.

Response: While we agree that the attainment of self-sufficiency is

an important goal of workforce investment systems under title I of the

Act, we have not added that phrase to the regulation since the current

language tracks section 106 of the Act.

Part 660 also provides definitions which are not found in the Act,

as well as some of the statutory definitions we felt should be added

for emphasis or clarification. Sections 101, 142, 166(b), 167(h) 301

and 502 of the Act contain additional definitions. We received several

comments on the definitions contained in Sec. 660.300. One commenter

suggested that we add ``youth'' to the definition of ``employment and

training activity''.

Response: The three terms, ``workforce investment activity,''

``employment and training activity,'' and ``youth activity,'' are

defined in section 101 of WIA. We have not added ``youth'' to the

definition of ``employment and training activity'' since employment and

training activities are a separate subset of workforce investment

activities under title I, Chapter 5 of the Act. Workforce investment

activities are the array of activities permitted under title I of WIA,

which include employment and training activities for adults and

dislocated workers, and youth activities.

A commenter requested that we define the term ``labor federation''

as used in relation to nomination requirements for labor representatives

to the State and Local Boards, stating ``[i]t is our understanding

that [this term] is intended to include AFL-CIO State Federations,

State Building and Construction Trades Councils, AFL-CIO Central

Labor Councils, and Local Building and Construction Trade Councils.''

Response: We have added a definition of the term ``labor

federation'', similar to that used in JTPA, which will include these

groups within that term.

We received several comments on the definition of ``literacy''. One

commenter suggested that the definition of ``literacy'' be expanded to

mean the ability to read, write and speak in English or an individual's

native language, if that is not English.

Response: In order to promote consistency among Federal Programs,

title I, section 101(19) of WIA defines ``literacy'' by stating that it

is the same definition used in title II, section 203(12) of the Act.

Section 660.300 of the regulations restates this definition for the

convenience of the reader. Literacy is defined as the ``ability to

read, write, and speak in English, compute and solve problems, at the

levels of proficiency necessary to function on the job, in the family

of the individual and in society.'' No change has been made to this

statutory definition.

Another commenter suggested that the term ``literacy'' be amended

to include computer literacy since it is an important and necessary

workplace skill.

Response: We agree that computer literacy is a key skill, however,

as stated above, no changes have been made to the definition of

``literacy'' since it is a statutory definition found in section

203(12) of title II of WIA.

Among the regulatory definitions, we have defined the term

``register'' in order to clarify that programs do not need to register

participants until they receive a core service beyond those that are

self-service or informational. This point in time also corresponds to

the point when the participants are counted for performance measurement

purposes. A few commenters suggested that the term ``register'' be

redefined to require all adults and dislocated workers who receive

services, including those who only receive self-service or

informational services, to be registered in order to track universal

participation in the workforce investment system.

Response: The process of registration is designed to signal when an

individual is counted against the core measures of performance title I

programs. Since the Act exempts informational and self-service

activities from the core measures, we are not requiring individuals who

only receive those services to be registered. However, States and local

areas are authorized to collect information beyond what is required at

the Federal level. In March 2000, we issued Training and Employment

Letter (TEGL) 7-99 which provides additional guidance on the point of

registration. This guidance can be found on the Internet at

www.usworkforce.org. Additional discussion of this issue is contained

in part 663 and part 664 of these regulations. Part 666 provides new

guidelines on when a service is determined to be self-service or

informational. Finally, while participants may not need to be

registered until they receive core services for performance measurement

purposes, recipients must collect equal opportunity data regarding any

individual who has submitted personal information in response to a

request by the recipient for such information. See 29 CFR 37.4

(definitions of ``applicant'' and ``registrant''), and

Sec. 37.37(b)(2).

Another commenter suggested that the term ``register'' be more

clearly defined, and requested a description of the differences between

registration, enrollment and participation.

Response: While we have not changed the definition of ``register,''

additional guidance on the registration process and its connection to

the performance accountability system can be found in TEGL 7-99, as

well as part 663 and part 664 of these regulations. In general,

``enrollment'' is not a term that is being used in the WIA title I

performance system. An individual who registers for services is

determined eligible and is counted against the core indicators of

performance. This registered individual is considered a participant

while receiving services (except followup services) funded under

subtitle B of WIA title I.

This commenter also suggested that we clarify that information on

citizenship and selective service status be collected at the time of

registration.

Response: In addition to any other statutory or regulatory

requirements, under WIA section 188(a)(5)--``Prohibition on

Discrimination Against Certain Non-Citizens''--participation in

programs or activities, or receiving financial assistance under WIA

title I, must be available to citizens and nationals of the United

States, lawfully admitted permanent resident aliens, refugees, asylees,

and parolees and other immigrants authorized to work in the United

States. Compliance with the non-discrimination provisions of WIA is

addressed in the Interim Final Regulations promulgated by the

Department's Civil Rights Center at 29 CFR part 37 (64 FR 61692,

November 12, 1999). A discussion of these provisions can be found in

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

Section 189 of WIA provides that the Military Selective Service Act

(50 U.S.C. App. 453) must be complied with to receive any assistance or

benefit under title I. In order to allow the greatest possible

flexibility in the provision of services, we will not dictate specific

ways to comply with this straightforward requirement.

Several commenters suggested adding definitions of ``contract'' and

``commercial organization'' or ``for-profit entity'' and modifying the

definitions of ``grant,'' ``subrecipient,'' and ``vendor'' to ensure

consistency with the Federal Grant and Cooperative Agreement Act, (31

U.S.C. 6301), and to reduce confusion about what awards are subject to

the uniform procurement requirements at 29 CFR 95.40 through 95.48 and

29 CFR 97.36, and what awards are not subject to these requirements.

Response: We have decided not to add definitions of ``contract,''

``commercial organization'' or ``for-profit entity'', because these

terms are defined or discussed in the Department's rules on uniform

administrative requirements at 29 CFR parts 95 and 97 (the ``Common

Rules''), as well as in the Department's rules on audit requirements

for grantees in 29 CFR parts 96 and 99, all of which are incorporated

by reference at 20 CFR 667.200. We are modifying the definitions of

``subrecipient'' and ``vendor'' to cross-reference the discussion in

the DOL audit requirements, at 29 CFR 99.210, which contrasts the

differences between subrecipients and vendors. Since the definition of

``grant'' in Sec. 660.300, is already quite specific as to the types of

organizations which may be awarded grants, we consider changes to this

term to be unnecessary. We also are modifying the definition of

``recipient'' to indicate that the term refers to the entire legal

entity receiving the award, not just the particular component within

that entity which is designated in the award document. The modification

is consistent with the definition of ``recipient'' in the JTPA

regulations at 20 CFR 626.5 and the definition of ``grantee'' in the

Common Rule at 29 CFR 97.3. Also, we are reiterating the Common Rule's

definition of the term ``subgrant'' for the convenience of the reader.

Another commenter suggested defining the term ``obligation'' so

that Individual Training Account (ITA) commitments could be treated as

obligations for purposes of the reallotment and reallocation procedures

of 20 CFR Secs. 667.150 and 667.160, even though they might not meet

the standards of obligation used by particular State or local

governments.

Response: Section 667.150 of the regulations provides for recapture

by the Secretary of unobligated balances from States with unobligated

balances which exceed 20 percent of the amount allotted in the previous

program year, after adjustment for amounts reserved by a State for

administration and amounts transferred by the State between youth and

adult funds. Reallotment is then made to States which have obligated at

least 80 percent of the amounts allotted in the previous program year,

after adjustment for transfers and amounts reserved for administration.

Section 667.160 covers the recapture and reallocation of amounts within

the State using the same factors used in the Secretary's reallotment

process.

We have added a definition of ``obligation'' to Sec. 660.300 which,

for the purpose of reallotments under 20 CFR 667.150, specifically

excludes: (1) Amounts allocated to a single local area State or to a

balance of State local area administered by a unit of the State

government; and (2) inter-agency transfers and other actions treated by

the State as encumbrances against amounts reserved by the State under

WIA sections 128(a) and 133(a) for Statewide workforce investment

activities. These exclusions were also in effect under JTPA. The

purpose of these exclusions is to treat similar financial transactions

the same way in all States, even where a State only recognizes a

financial transaction as a legally enforceable ``obligation'' if it

involves an arms-length award to another party or if performance has

already occurred. We also are adding the definition of ``unobligated

balance,'' which appears at 29 CFR 97.3, for the convenience of the

reader.

With respect to the comment regarding defining commitments under

ITA's as obligations, we are not aware of any unique characteristics of

ITA's which necessitate expanding the definition of ``obligation''

provided in Sec. 660.300 of these regulations. Commitments under ITA's

should be treated the same way as similar commitments of the

recipient's or subrecipient's non-WIA funds, whether as obligations or

otherwise.

Other commenters suggested we include a definition of the term

``individual with a disability'' to encourage One-Stop center staff to

have a knowledge and sensitivity to the needs of such individuals.

Response: Since the provision of quality services to individuals

with disabilities is a key facet of the One-Stop service delivery

system, we have added the WIA title I, section 101(17) definition of

the term ``individual with a disability'' to Sec. 660.300.

One commenter was concerned that the definition of ``veteran''

contained in section 101(49) of the Act was too broad and raised

uncertainty as to which veterans were to be served under title I of

WIA. The commenter suggested that we replace the definition in the

Interim Final Regulations with the definition of ``veteran'' contained

in title 38 of the U.S. Code since it provides more specificity and

consistency between programs.

Response: Since the definition of ``veteran'' appears in title I of

WIA, we are not making any change in the Final Regulation. We encourage

States and local areas to take these definitions into account as they

undertake their responsibility to assure that the delivery of services

under WIA title I programs and activities authorized under the chapter

41 of U.S.C. title 38 partner program are coordinated through the One-

Stop service delivery system.

One commenter suggested that we add definitions of a sectoral

employment intervention strategy and the self-sufficiency standard. A

sectoral employment intervention strategy is an approach to community

economic development that connects members of low-income communities to

employment opportunities, self-sufficiency wages and/or advancement

opportunities by both redirecting training resources and education, and

facilitating direct linkages to employers in targeted regional

industries. The self-sufficiency standard defines the minimum amount of

cash resources needed for a family to meet its basic needs and be self-

sufficient.

Response: While we encourage State and Local Boards to develop

linkages between their workforce and economic development systems, we

do not think it is appropriate to highlight one strategy for achieving

such linkages. As for a definition of self-sufficiency, 20 CFR 663.230

requires State or Local Boards to set the criteria for determining

whether employment leads to self-sufficiency. At a minimum, such

criteria must provide that self-sufficiency means employment that pays

at least the lower living standard income level, defined in WIA section

101(24). No changes are being made to the regulations.

Part 661--Statewide and Local Governance of the Workforce Investment

System Under Title I of the Workforce Investment Act

Introduction

This part covers the critical underpinnings of how the Workforce

Investment system is organized under WIA at the State and Local levels.

Specifically, it consists of four subparts--General Governance

Provisions, State Governance Provisions, Local Governance Provisions

and Waiver Provisions. The General Governance subpart broadly describes

the WIA system and describes the roles of the governmental partners.

The State and Local Governance subparts cover the State and Local

Workforce Investment Boards and the designation process, including

alternative entities, and the planning requirements. The waiver subpart

discusses the processes for obtaining general and work-flex waivers.

Subpart A--General Governance Provisions

Subpart A describes the Workforce Investment system, and sets forth

the roles of the government partners in the system: the Federal

government, State governments and Local governments.

Section 661.120 provides authority to State and Local governments

to establish their own policies, interpretations, guidelines and

definitions relating to program operations under title I, as long as

they are not inconsistent with WIA, these regulations, and Federal

statutes and regulations governing One-Stop partner programs. The

reference to Federal statutes and regulations governing One-Stop

partner programs has been added to Sec. 661.120 (a) and (b) as a

reminder that State and local administration of the One-Stop system

must be consistent with the requirements of the Federal law applicable

to the partner's program. In the case of local governments such

policies, interpretation, guidelines and definitions may not be

inconsistent with State policies. This section has also been revised to

correct an inconsistency between terms used in the question and answer.

The question refers to ``Local and State governmental partners'' while

the answer refers to Local and State Boards. We do not intend to

exclude the Governors and local elective officials from the authority

to develop State and local policies relating to WIA title I, provided

those policies are consistent with the Act, regulations and, where

appropriate, other State policies. Therefore, paragraphs (a) and (b)

are revised to replace the phrases ``Local

Boards'' and ``State Boards'' with ``Local areas'' and ``States''

respectively so that they will not appear to be inconsistent with the

terms used in the question.

To assist with the State and local interpretations authorized under

Sec. 661.120, we have issued technical assistance guidance, with the

participation of other Federal agencies, as appropriate, to help States

and localities interpret WIA and the regulations. This guidance is not

intended to limit State flexibility, but rather is intended to provide

helpful models on which States and Local governments can rely to ensure

that their own interpretations are not inconsistent with the Act and

regulations. In our role as Federal partner we will continue to provide

technical assistance to States and localities, in collaboration with

other Federal agencies as appropriate, however we remain committed to

the principles in the statute which allow and encourage flexibility.

A commenter suggested that the standard against which State and

local policies, interpretations, etc. are measured under Sec. 661.120

should be whether they are ``consistent'' with WIA and the regulations

rather than ``not inconsistent.'' The commenter suggests that the

current language may send an inappropriate message about the need to

conform to statutory and regulatory requirements and may lead to

differing interpretations of some provisions.

Response: We don't agree that this provision should be changed. The

workforce investment system is a partnership between State, local and

Federal stakeholders. One of WIA's key principles is that States and

localities have increased authority to implement innovative workforce

investment strategies to best serve the needs of the labor market.

While we take very seriously our responsibility to ensure that State

and local policies, interpretations, guidelines and definitions do not

violate the provisions of the statute and these regulations, where

differing interpretations are legally possible we believe that States

and localities should have the flexibility to implement systems that

they feel are best suited to their particular needs. The current

regulation best serves this flexibility, because it does not imply that

there is only one ``consistent'' interpretation available. Therefore,

we have not changed the regulation.

Several commenters expressed differing views regarding the relative

roles of State and local partners in the One-Stop system. Some

commenters requested that we expressly state that States and localities

are equal partners in the One-Stop system, while others requested that

we clarify that States have clear authority to promulgate

interpretations and other guidance to State and local agencies.

Response: In our view, neither of these positions is absolutely

correct. The success of the workforce investment system depends on a

commitment, particularly among the governmental entities and the One-

Stop partners, to collaborate and form real partnerships. On many

matters, the State has the authority to set Statewide policies

applicable to local areas. However, WIA also gives certain

responsibilities and authority to local areas. Close coordination among

State and local government partners is essential to the success of the

system. The flexibility of the WIA system offers a unique opportunity

for leadership from both the State and local level to work

cooperatively with one another to address the specific workforce needs

of each community and benefit the State as a whole. We do not think it

would be productive to enumerate where each entity has authority, but

trust that in establishing the workforce investment system Governors

and chief executive officers will take their roles and responsibilities

seriously and work together to create a system that best helps their

community aid those in need.

According to one commenter, there may be confusion resulting from

the language in WIA section 117(d)(3)(B)(i) that holds chief elected

officials liable, as grant recipient, for misuse of local formula funds

(unless the Governor agrees to undertake such liability). The commenter

reported that some local areas were worried that this liability would

be interpreted as the personal liability of the elected official.

Response: While we have not changed the regulations, we wish to

clearly state our interpretation of this provision. We interpret this

provision as holding the chief elected officials (and the Governor,

when appropriate) liable in their official capacity and not holding

them personally liable for misuse of WIA funds.

Subpart B--State Governance Provisions

1. State Workforce Investment Board: Sections 661.200-661.210

describe the membership requirements and responsibilities of the State

Workforce Investment Board (State Board) and procedures for designating

an alternative entity to perform the functions of the State Board.

Section 661.200(a) requires that the State Board be established by the

Governor. Of course, the Governor must select the members of the State

Board in a nondiscriminatory fashion, in accordance with the

requirements of 29 CFR part 37. A correction is made to paragraph

661.200(i), to correct a cross-reference to provisions in part 662

identifying One-Stop partners.

WIA and these regulations provide significant flexibility to States

and local areas to develop policies, interpretations, guidelines and

definitions relating to program operations under WIA title I. Several

commenters requested that we require that State and local boards

include significant policies and interpretations in the State and local

plans or consult with specified parties when developing these policies

and interpretations. We do not believe we can mandate these

suggestions, but encourage State and local boards to include in the

plans any significant policies and interpretations etc., that are not

already required to be included. Moreover, under Secs. 661.200(j) and

661.305(d), the development of significant policies, interpretations,

guidelines and definitions, as an activity of the boards must be done

in an open manner. To emphasize this requirement, we have moved these

requirements to new Secs. 661.207 and 661.307, and have specified that

the development of significant policies, interpretations, guidelines

and definitions must be conducted in an open manner. We consider

policies and interpretations etc,. relating to eligibility requirements

and self-sufficiency standards to be the type of significant policies

and interpretations etc., that must be developed in an open manner.

One commenter recommended that we require that any newly

established State Board review and/or ratify any policies implemented

by the entity acting as the Board during the State's transition to WIA.

Response: We find this to be a helpful suggestion, but do not

believe it is appropriate to impose it as a mandatory requirement on

States. We believe that an effective State Board will periodically

review State policies as part of its oversight role. It seems natural

that a newly established Board might find the need to reconsider some

of the policies implemented by its predecessor. In that case,

Sec. 661.230(a) provides the State Board with the authority to submit a

modification to the State plan.

The greatest number of comments on part 661 related to State and

Local Board membership requirements. Many of the comments on State

Boards are equally applicable to Local Boards. We have consolidated our

discussion of State and Local Board membership

requirements in the following paragraphs.

We received a large number of comments about the requirement, at

Secs. 661.200(b) and 661.315(a), that at least two or more members of

the State and Local Boards be selected to represent the membership

categories set forth at WIA sections 111(b)(1)(C) (iii)-(v) and

117(b)(2)(A) (ii)-(v), and that the Local Board contain at least one

member representing each One-Stop partner. The comments reflect a

tension between the need to provide States and Local areas with the

flexibility needed to keep these Boards at a manageable size, with the

need for specificity as to what level of participation is guaranteed to

stakeholders in the Workforce Investment system. Many commenters felt

that the two or more member requirement led to large, unwieldy-sized

Boards and requested that this requirement be eliminated. Other

commenters sought clarification of the number of members of each

partner on the Local Board. Many commenters requested clarification

about whether an individual seated on the State or Local Board could

represent more than one entity or institution, particularly when

multiple grantees of a One-Stop partner program are located in a local

area.

Many commenters requested more specificity as to which entities are

entitled to a seat on the Boards. For example, many commenters felt

that the language in the preamble to the Interim Final Rule did not go

far enough in recommending that States consider appointing

representatives from both the designated State unit under section

101(a)(2)(B) of the Rehabilitation Act and from the State agency for

the blind to represent programs that provide vocational rehabilitation

services. These commenters recommended that we amend the regulations to

change this recommendation into a requirement that States appoint

representatives from both of these organizations. Others sought

specific appointment of members representing community-based

organizations (CBO's), mental health agencies, disabled youth and

disabled youth service providers, disabled adults, literacy providers,

non-labor construction workers, and other groups.

Response: In our view, no individual (other than the Governor) or

group is entitled to a ``seat'' on a State or Local Workforce

Investment Board. However, certain specified groups, including One-Stop

partner programs, are entitled to a ``voice'' on the Boards through a

representative.

A partner program may feel that it should have the right to choose

who sits on a State or Local Board as its representative. The

regulations cannot provide this power to the partners, because WIA

gives the authority to select State or Local Board members to the

Governor or chief elected official (CEO), respectively. However, the

Governor's and CEO's discretion to select individuals to serve as

representatives of partner programs and other entities on State and

Local Boards must be exercised in a manner that is consistent with the

requirements set forth in WIA and these regulations. For One-Stop

partner programs, the individual selected as the Local Board

representative may or may not be the specific individual that each

funded entity would prefer, but that individual must be an individual

with ``optimum policy-making authority'' within an entity that receives

funds or carries out activities under the partner program.

We recognize that the representation issue is a legitimate and

serious concern. It is exacerbated by equally legitimate concerns over

Board size, especially at the local level. We encourage as broad a

representation as possible on all WIA Boards, especially representation

of those entities identified as required partners in the Act. We expect

that local workforce investment areas will follow the regulations and

that States will ensure that all required partner programs have

appropriate and effective representation on Local Boards. We encourage

local parties to resolve issues of representation to their mutual

satisfaction, in accordance with the Act and regulations. We view this

generally as a matter of local implementation. We believe that

consultation between Governors or CEO's and partner programs, and other

organizations entitled to representation on the Boards, in the

selection of Board representatives will help to develop positive

relationships leading to more effective delivery of services, and we

encourage such consultations. The final regulations attempt to

facilitate this process by providing Local areas with flexibility for

finding the right mix of representatives on the Local Board, while

ensuring that the Board is an effective policy-making body by

protecting the rights of all participants in the system and by

stressing the requirement that members be individuals with optimum

policy-making authority.

To this end, we have made several changes to the interim final

rule. However, we did not change the requirement that each Board

contain two or more members representing the groups specified in WIA

sections 111(b)(1)(C) (iii)-(v) and 117(b)(2)(A) (ii)-(v). As indicated

in the preamble to the Interim Final Rule, we are constrained by

statutory language to follow this requirement. One commenter suggested

that the provision at 1 U.S.C. 1 may provide justification for a more

flexible interpretation of the membership requirement. While this

provision provides the general rule that statutory reference to plurals

includes the singular, we think that, in this instance, the context of

WIA section 111 and 117, indicates that the term ``representatives''

was intended to mean two or more. The requirement that the Local Board

contain at least one member representing each local One-Stop partner

program is consistent with this interpretation. As is does for the

other membership classes specified at WIA section 117(b)(2)(A) (ii)

through (v), the Local Board must contain two or members representing

the class of One-Stop partner programs identified at section

117(b)(2)(A)(vi). Because each One-Stop system will include many

partners, the requirement that the class is represented by two or more

members will neccesarily be met by one member representing each partner

program. Consequently, we have not changed this requirement.

We have made several changes to clarify what is meant by

representation on the State and Local Workforce Investment Boards. We

have made changes to accommodate the concerns of those commenters who

asked whether an individual seated on the Board could represent more

than one entity or institution. While such ``multiple entity''

representation may not be appropriate in all cases, we believe that

there may be instances when such representation may be an effective

tool for reducing Board size while still ensuring that all parties

entitled to representation receive effective representation. Therefore,

we have added new paragraphs to Secs. 661.200 and 661.315 to permit it

when appropriate. For example, where the same State agency has

authority for several One-Stop partner programs, such as a State

employment security agency which oversees the employment service and

unemployment insurance service, the head of the agency (or other

official with optimum policy-making authority) may be appointed to the

State Board to represent both of these programs. On the other hand,

such ``multiple entity'' representation will not be appropriate where

the individual so appointed does not have authority to make policy for

all of the programs that s/he purportedly represents. For example,

appointing a local business

person, who is a member of a veterans' organization, as representative

of the 41 U.S.C. chapter 38 veterans' program and of local business

and/or the local veterans' organization, will not satisfy the Local

Board membership requirements if the individual does not possess

optimum policy-making authority within the 41 U.S.C. chapter 38 program

and within the veterans' organization and within the business.

Similarly, if the State vocational rehabilitation agency (including the

vocational rehabilitation agency for the Blind) is primarily concerned

with the rehabilitation of individuals with disabilities under section

101(a)(2)(B)(i) of the Rehabilitation Act, then the head of that agency

must represent the vocational rehabilitation program on the State

Board. An individual from any other State agency would not be an

appropriate representative of the vocational rehabilitation program.

We have added a new Sec. 661.203, in which we have defined the

terms ``optimum policy-making authority'' and ``expertise relating to

[a] program, service or activity'' in order to assist States and Local

areas in determining when such representation is appropriate. A

representative with ``optimum policy making authority'' is an

individual who can reasonably be expected to speak affirmatively on

behalf of the entity he or she represents and to commit that entity to

a chosen course of action. In the case of a One-Stop partner program,

an individual who does not have ``optimum policy-making authority''

within an entity that receives funds or carries out activities under

the partner program cannot serve as that program's representative on

the Local Board. A representative with ``expertise relating to [a]

program, service or activity'' includes a person who is an official

with a One-Stop partner program and a person with documented expertise

relating to the One-Stop partner program.

Finally, we have added new Sec. 661.317 to clarify representation

when there are several Local grantees or operating entities of a

partner program in a One-Stop system. In such a case, the Local Board

membership requirements may be met by the appointment of one member to

represent all of the Local partner program entities. Also, Sec. 661.317

permits the chief elected official to solicit nominations from One-Stop

partner program entities to facilitate the selection of such

representatives. Soliciting nominations from partner program entities

may be useful to chief elected officials in identifying the individual

who will be able to represent the program most effectively in the work

of the Local Board. Of course, the chief elected official can opt to

appoint more than one member to represent this program, if he or she so

chooses and the selection criteria permit it.

To implement the policy described in the joint letter, dated March

24, 2000, from the Assistant Secretary of Labor for Employment and

Training, the Assistant Secretary of Education for Special Education

and Rehabilitative Services, and the Commissioner of the Rehabilitative

Services Administration regarding Vocational Rehabilitation (VR)

representation on State Boards, we have added a new paragraph (3) to

Sec. 661.200(i). Under this provision, if the director of the

designated State unit, as defined in section 7(8)(B) of the

Rehabilitation Act, does not represent the State Vocational

Rehabilitation Services program (VR program) on the State Board, then

the State must describe in its State Plan how the members of the State

Board representing the VR program will effectively represent the

interests, needs, and priorities of the VR program and how the

employment needs of individuals with disabilities in the State will be

addressed.

Other comments on the State and Local Board membership requirements

questioned the different descriptions relating to the creation of State

and Local Boards, the different processes for selecting the

chairpersons of the Boards, and suggested that we mandate that the

business majority requirement apply to any subcommittees of Boards.

Response: Section 661.200(a) describes the State Board as being

``established'' by the Governor, while Sec. 661.300(a) describes the

Local Board as being ``appointed'' by the CEO. These descriptions are

intended to simply reflect the terms used in the statute and are not

meant to imply an inferior or superior relationship. Section 661.200(g)

provides that the Governor must select a State Board chairperson from

the business representatives on the Board, while Sec. 661.320 provides

that the Local Board members elect a chairperson from the business

representatives. Because these different processes are specified in WIA

sections 111(c) and 117(b)(5), we have not changed the rule. With

regard to the business majority requirement, we agree with the

commenter that a strong role for business representatives is an

essential ingredient for successful Boards, but we do not think it is

appropriate that the regulations should dictate the internal structure

and day-to-day workings of the Boards. Within the framework required by

the statute and regulations, States and localities have the flexibility

to design Boards that best serve their needs.

A commenter suggested that we add sanctions provisions to make

clear that the Governor can refuse to appoint to the State Board a

representative of partners which have not cooperated in good faith with

the One-stop system at the local level.

Response: As the commenter pointed out, Sec. 661.310 addresses this

very issue at the local level. Under this section, one of the sanctions

for a partner failing to engage in good faith negotiations over the

terms of the local MOU is a loss of representation on the Local Board.

We expect that this provision, will be sufficient incentive for Local

Boards and One-stop partners to engage in good faith negotiation. If

experience does not bear this out, we will consider issuing additional

guidance in the future.

A commenter requested that we define the term ``labor federation''

as used in the nomination requirements for labor representatives to the

State and Local Boards, stating ``[i]t is our understanding that [this

term] is intended to include AFL-CIO State Federations, State Building

and Construction Trades Councils, AFL-CIO Central Labor Councils, and

Local Building and Construction Trade Councils.''

Response: We have added to 20 CFR 660.300 a definition of the term

``labor federation'', similar to that used in JTPA, which will include

groups such as those suggested within that term.

2. Alternative Entities: Because many of the comments relating to

alternative entities are applicable at both the State and local levels,

we have consolidated our discussion of this issue here. One commenter

expressed the view that the requirement in Secs. 661.210(c) and

661.330(b)(2), that the State and local plans must describe how the

Boards will ensure an ongoing role for any required membership groups

not represented on an alternative entity, is not supported by WIA.

Response: We find that the ongoing role requirement is a reasonable

interpretation of WIA requirements relating to Board membership and

responsibility. It is clear from the statute that Congress intended

that certain specified groups have a strong leadership role in the

State and local workforce investment systems, as expressed by the

representation requirements. The regulatory requirement that Boards

provide an ongoing role for any of those statutorily identified

entities which are not represented on the alternative entity is

consistent with this intent. The regulation does not specify the scope

of a group's ongoing role, but rather permits States and localities to

determine it as part of the public planning process. Therefore, we have

maintained this requirement. However, as described below, we have made

changes to this regulation to provide guidance as to how the ongoing

role requirement may be met.

There were several comments regarding the provision in

Secs. 661.210(d) and 661.330(c) about changes in the membership

structure of an alternative entity serving as the State Workforce

Investment Board or as a Local Workforce Investment Board. Two

commenters thought that the rule was overly restrictive about

permitting changes to alternative entities and suggested that we revise

the Interim Final Rule to permit incremental changes to these entities

so that at least some of the representational groups required by the

WIA Board membership requirements could be added to existing entities,

or that we permit incremental changes that increase the efficiency and

effectiveness of the workforce investment system. A commenter noted

that in single workforce investment areas states, where the State Board

is acting as the Local Board under WIA section 117(c)(4), the use of an

existing state board under the alternative entity provisions may

exclude even more partners from participation on the board at the local

level.

Response: We are sympathetic to these concerns, but believe that

permitting incremental changes to the boards will, in fact, act as a

disincentive to the creation of Workforce Investment Boards that

include all required representatives, by permitting inclusion of some

groups while still excluding other groups. By requiring the

establishment of a new WIA-compliant Board whenever the membership

structure of an alternative entity is significantly changed, other

excluded groups will be able ``to ride the coattails'' of the newly

added group. Therefore, because we remain committed to the goal of

encouraging fully compliant Workforce Investment Boards in each State

and local workforce investment area, the requirement that a new WIA-

compliant Board must be created when the membership structure of an

alternative entity is significantly changed has not been changed.

However, we have added language to clarify the type of situation in

which the membership structure of an alternative entity is considered

to have been significantly changed. Specifically, a significant change

in the membership structure is considered to have occurred when members

are added to represent groups not previously represented on the entity.

A significant change in the membership structure is not considered to

have occurred when additional members are added to an existing

membership category, when non-voting members (including a Youth

Council) are added, or when a member is added to fill a vacancy created

in an existing membership category. A change to the charter is not

itself grounds for disqualification of an alternative entity. The

relevant question is whether the organization or membership structure

has been changed. However, we continue to consider the need for a

change to the charter as a good indicator of a significant change in

the membership structure, and have clarified that this is true

regardless of whether the required change has been made.

Other commenters identified the need for additional guidance as to

what measures an alternative entity must take to ensure an ongoing role

in the State or Local Workforce Investment system for any of the WIA-

specified membership groups who are not represented on the alternative

entity. As discussed below in relation to the Migrant and Seasonal

Farmworker (MSFW) program, commenters have sometimes found that it is

difficult to ensure full and active participation in a One-Stop system

when a partner or other membership group is not represented on an

alternative entity.

Response: To address this problem, we have added language to

Sec. 661.210(c) and have added a new paragraph 661.330(b)(3) to

identify ways in which to ensure such an ongoing role. For example, the

Boards could provide for regularly scheduled consultations, may provide

an opportunity for input into the State or local plan or other policy

development, or may establish an advisory committee of unrepresented

groups. We also require that the alternative entity engage in good-

faith negotiation over the terms of the MOU, with all omitted partner

programs. We have made a change to more clearly identify those groups

which are specified for representation on State and local boards under

WIA but are not represented on the alternative entity as

``unrepresented membership groups''. This replaces the somewhat

ambiguous term ``such groups'' used in the Interim Final Rule.

3. State Workforce Investment Plan Requirements: Section 661.220

describes the requirements for submission of the State Workforce

Investment Plan and the process for review and approval of that plan. A

commenter pointed out that the reference to Wagner-Peyser Act State

Plan modifications in Sec. 661.230(c) was inaccurate. We have edited

Sec. 661.230(c)(2) to reference 20 CFR 652.212. Under her authority to

provide for an orderly transition from JTPA to WIA, the Secretary

permitted States to submit a transition plan during program year 1999

to allow the provision of WIA services with funds appropriated for JTPA

services. Such a plan would be approved for program year 1999, but

would not be considered an approved five-year Workforce Investment

Plan. To reflect this practice, a new paragraph (e)(3) is added to

Sec. 661.220 is added to clarify that a plan that is incomplete or does

not contain sufficient information to determine whether it is fully

compliant with the statutory and regulatory requirements of WIA and the

Wagner-Peyser Act is considered to be inconsistent with these

requirements for plan approval purposes.

A commenter requested that the provision of Sec. 661.230(e)(2)

describing the plan approval process be revised to more clearly

indicate that the portion of the plan describing Wagner-Peyser Act

activities, requirements and delivery of services is an integral part

of the plan and not a separate plan.

Response: We agree and have made the suggested change.

Some commenters remarked that they found that the State Plan

requirements focused on process and compliance rather than on strategic

planning issues.

Response: We believe that the State Plan guidelines seeks the

information needed to support broad strategic planning objectives while

ensuring compliance with the statutory requirements. We acknowledge

that it is difficult to balance these two goals. Based upon our

experience with early implementing States, we hope to amend the

planning guidelines to streamline them, but remain committed to

requiring that States submit the information we need to assess whether

the plan complies with the statute and regulations.

We received several comments on the need for specific public

comment periods for State Plans, consistent with Local Plan

requirements. Others felt that modifications as well as planning

documents should be subject a public comment period.

Response: We intend that the information contained in the State

Plan be subject to the broadest possible stakeholder involvement in

policy development and the broadest possible range of public comment.

The Interim Final Rule, at Sec. 661.230(d) already requires that plan

modifications undergo the same public review and

comment as the State plan. The Workforce Investment Act State planning

guidelines set forth the information needed for the Secretary to make

an informed judgment about whether a State Plan is consistent with WIA,

and the plan review process requires evidence of a public comment

period. We have clearly stated the need for an open and inclusive

planning process at both the State and local levels and we expect the

States to establish the appropriate time lines and procedures.

Consequently, no change in the rule is being made at this time,

although we will carefully review State plans for compliance with the

WIA public comment requirements.

Commenters suggested that we change Sec. 661.220(d) to require that

States submit to us all oral and written comments made during the

public comment process, including comments made on drafts, and

responses to those comments, that we review the responses as part of

our plan review process, and that we specify that failure to actively

consult with local areas is grounds for plan disapproval. Other

commenters suggested that we mandate a 30-day review period as part of

the State plan public comment process.

Response: Based upon our review of plans submitted by early

implementing States, we have found that requiring submission of

comments on State plans does not significantly help the plan review

process. Given the short time period for plan review and approval, we

are unable to provide any meaningful review to comments submitted with

the plan. We do not think it is necessary to impose a mandatory public

comment period on the States. We expect that States will undertake a

good faith effort to develop State plans through a meaningful public

process. We believe that our review of the State plan's description of

the process will enable us to ensure that the State planning process

complies with this requirement. A failure to develop the plan through

the public comment and consultation process described in the

regulations could be grounds for plan disapproval under the existing

standards. No change has been made to the regulation.

Section 661.240 contains provisions relating to unified plans,

submitted under the authority of WIA section 501. On January 14, 2000,

the Department, in partnership with the Departments of Agriculture,

Education, Health and Human Services, and Housing and Urban

Development, and with the assistance of the Office of Management and

Budget, issued joint unified planning guidance entitled State Unified

Plan, Planning Guidance for State Unified Plans Submitted Under Section

501 of the Workforce Investment Act of 1998. This document was

published in the Federal Register at 65 FR 2464 (Jan. 14, 2000). We

have revised Sec. 631.240(b) to add a new paragraph (2), that

specifically provides that States may submit unified plans that contain

the information required in the unified planning guidance in lieu of

the individual planning guidelines of the programs covered by the

unified plan.

One commenter remarked that the unified planning guidelines were

too narrowly focused to lead to effective unified planning. Other

comments on Sec. 661.240 requested that we hold unified plans to the

same public review and comment requirements as required of standalone

WIA State plans, that we explain how to resolve different planning

timetables for programs included in the unified plan, and that we

provide incentives to encourage States to submit unified plans.

Response: We believe that the unified planning guidance is an

important first step towards collaborative planning and effective

coordination of federal programs. Currently, it is the only planning

approach that streamlines existing non-statutory planning requirements.

We believe these streamlined planning requirements offer an incentive

encouraging States to undertake unified planning. While it may not go

as far as some would like, we believe that, as the Federal partners

work with the States to acquire more experience with unified planning,

we will be able to develop alternative approaches that could offer even

greater flexibility and burden reduction.

With regard to the substantive comments on Sec. 661.240, WIA

section 501(c)(1) provides that the portion of the unified plan

covering a particular program or activity is still subject to the

applicable planning requirements of the statute that authorizes the

program. Therefore, for unified plans containing the State WIA/Wagner-

Peyser Act plan, the WIA plan review and public comment requirements,

at Sec. 661.220(d) still apply. Similarly, while the WIA/Wagner-Peyser

Act portion of the unified plan is submitted on a five-year planning

cycle, the inclusion of a plan on a different planning cycle does not

change the plan for that program to a five-year plan. We believe that

the time saved through joint planning is itself a strong incentive

towards engaging in unified planning. Joint planning also benefits

States by leading to an improved use of State and Federal resources,

increased coordination at the local level, and burden reduction through

elimination of duplicate planning processes. These and other benefits

of unified planning are discussed in the unified planning guidance at

65 FR 2464, 2468.

4. Local Workforce Investment Area Designation Requirements:

Sections 661.250 through 661.280 discuss the requirements applicable to

the designation of local workforce investment areas (local areas).

Section 661.250 sets forth the process for designating local areas.

Commenters noted that this section did not refer to the provision, at

WIA section 116(b), that permits Governors of States which were single

service delivery area States under JTPA, as of July 1, 1998, to

designate the State as a single local workforce investment area.

Response: We interpret section 116(b) as limiting single local area

designations to only those States which were designated as a single

service delivery area State under JTPA, as of July 1, 1998. Section

661.250 is revised to by adding a new paragraph (d) to specifically

authorize Governors of States which were single service delivery area

States under JTPA, as of July 1, 1998, to designate the State as a

single local workforce investment area.

A commenter noted that the applicability of the automatic local

area designation provisions for units of general local government of

500,000 or more may depend upon the population statistics used in

making designations. An area may or may not be found to meet this

threshold population level depending on whether 1990 Census data or

more up-to-date estimates are used. The commenter suggested specifying

certain data, or specifically delegating the authority to determine

which data to use to the Governor.

Response: While we do not believe it is appropriate that we specify

the source of the data to be used in the regulations, we agree with the

suggestion to specify that the Governor has the authority to determine

which population data to use when making designation determinations.

Section 661.260 is amended to make this clear.

A commenter noted that Sec. 661.280(c) provides that, on appeal of

a denial of a request for designation, the Secretary can require that

an area be designated solely upon her finding that the area was not

afforded the procedural rights guaranteed by the statute. The commenter

suggested that, in that instance, a finding that the area meets the

requirements for designation should also be required before the State

can be ordered to designate the area.

Response: We think that Sec. 661.280(c) accurately restates the

provisions of

WIA section 116(a)(5) that 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. No change has been made to

the regulation.

Section 661.290 describes the State's authority to require regional

planning by Local Boards. Paragraph (d) of this section provides that

regional planning may not substitute for or replace local planning

unless the Governor and all the affected CEO's agree to the

substitution or replacement. A commenter opined that WIA does not give

the Department the authority to undermine the State's authority to

require regional planning in this way.

Response: We do not agree that this regulation impermissibly

undermines the State's authority. Section 661.290(a) is consistent with

WIA section 116 by providing the State with authority to require Local

Boards to participate in a regional planning process. The agreement of

the local areas is not required for this. Requiring local area

agreement before regional planning can replace local planning may

reduce the ability of the State to unilaterally impose effective

regional planning, since the regional planning may overlap or duplicate

local planning. However, we believe that this provision fairly balances

the rights of States and localities. In our view, the most effective

regional planning will occur when all parties in the region are

committed to cooperating with one another.

Subpart C--Local Governance Provisions

This subpart covers the designation of Local Workforce Investment

areas and the responsibilities and membership requirements of Local

Boards. Because many issues relating to Local Boards and alternative

entities are equally applicable at the State and local level, comments

on these issues are discussed above, under subpart B.

1. Responsibilities of Chief Elected Officials: Section 300(a)

requires chief elected officials to appoint the Local Board in

accordance with State criteria established under WIA section 117(b).

Appointments to the Local Board must be made in a nondiscriminatory

fashion, in accordance with the requirements of 29 CFR part 37. A few

commenters found the provision in Sec. 661.300, authorizing the Local

Board and the chief elected official(s) in a local area to enter into

an agreement that describes the respective roles and responsibilities

of the parties to be confusing in light of the statement in 20 CFR

667.705 regarding liability of funds in local areas comprised of more

than one unit of general local government.

Response: Under 20 CFR 667.705, when a local area is comprised of

more than one unit of general local government, the liability of the

individual jurisdictions for funds provided to the local area must be

specified in a written agreement between the chief elected officials.

This is a mandatory provision. The agreement authorized in

Sec. 661.300(c) regarding a description of general roles and

responsibilities is optional. Chief elected officials are not required

to enter into such an agreement, but the agreement may be a useful tool

for specifying the division of duties among the chief elected officials

in the local area. No change has been made to the regulations.

A few commenters asked for clarification as to what extent a chief

elected official(s) may delegate their responsibilities under title I

of WIA.

Response: In general, the chief elected official(s) is authorized

to delegate their authority under title I of WIA to other entities such

as the Local Board or a local governmental agency. In multiple

jurisdiction local areas, the chief elected officials may delegate

certain roles as part of the agreement authorized in Sec. 661.300(c),

as discussed above. For example, WIA section 117(d)(3)(B)(i)(II)

specifically authorizes the chief elected official(s) to designate an

entity to serve as a local fiscal agent in order to assist in the

administration of grant funds at the local level. Similarly, the chief

elected official(s) may designate an entity to carry out their other

responsibilities. Under Sec. 661.300(c), the chief elected official(s)

may enter into an agreement with the Local Board that describes the

respective roles and responsibilities of the parties. However, the

chief elected official(s) remains liable for funds received under title

I of WIA unless they reach an agreement with the Governor to bear such

liability. This is the only situation in which the chief elected

official(s) is not liable for funds.

Some commenters requested a clarification of the role of the chief

elected official as a One-Stop partner.

Response: This issue is addressed in the preamble to 20 CFR part

662.

2. Local Boards as Service Providers: Section 117(f)(1) of WIA

places limitations on Local Boards' direct provision of core services,

intensive services, or training services. These limitations and waivers

of the limitation on providing training services are set forth in

Sec. 661.310. Commenters noted that Sec. 661.310(b) permits a waiver of

the prohibition on providing training services to be renewed only once.

Response: This limitation was inadvertent. We have revised this

paragraph to indicate that a waiver may be renewed more than once,

although no waiver may be for more than one-year at a time.

A commenter opined that the provision in Sec. 661.310(c) that

extended the service delivery restrictions of the Local Board to the

staff of the Board is not supported by WIA.

Response: We don't agree that this provision is inconsistent with

WIA. The limitation on the Local Board's authority to be a service

provider in Sec. 661.310(c) is meant to ensure that the Local Board

serves as the ``board of directors'' for the local area. This frees the

Board from the day-to-day functioning of the local workforce system and

allows the Local Board to focus on strategic planning, policy

development and oversight of the system. To permit the staff of the

Local Board to provide direct services on behalf of the Board would

undermine this principle.

However, we read the service delivery limitations in WIA section

117 as applying to the Local Board as an entity and not to the members

of the Board as individuals. Therefore, members of the Local Board may

not provide services in their capacity as a member of the Board.

However, if an individual member of the Board is also an employee of a

service provider, then as an employee of that service provider entity

s/he may provide services on behalf of that entity. Of course, this

must be consistent with federal, state and local conflict of interest

requirements. The same rules apply to the staff of the Local Board.

Members of the Local Board's staff may also be employees of the entity

administering the local area's WIA grant. We acknowledge that many

local areas use staff from inter-related agencies to provide support to

the Local Board as well as the administrative entity for the grant

recipient. When these roles are clearly defined, the fact that an

individual works for both the Local Board and the entity administering

the WIA grant does not preclude the entity from providing services.

3. Youth Council: Sections 661.330 and 661.335 describe the

membership requirements and responsibilities of the Youth Council.

Commenters suggested that we amend this section to require that

representatives of vocational rehabilitation agencies and members with

experience in nontraditional training employment for women be selected

for the Youth Council.

Response: We have not made the suggested change, because we do not

believe it is appropriate to specify certain groups for Youth Council

membership beyond those provided by statute. However, we agree that the

viewpoint of these groups could serve the Youth Council well. We

encourage chief elected officials to consider appointing such

representatives under the existing Youth Council membership categories.

One commenter suggested changes to Sec. 661.335(b)(4) which lists

``parents of eligible youth seeking assistance under subtitle B of

title I of WIA'' as required members of the youth council. The

commenter expressed a fear that it will be difficult to find parents of

participants and former participants who will be likely to make a

positive contribution to the youth council. The commenter asked whether

a local area will be penalized if it is unable to find parents and

participants to serve on the youth council and suggests changing

Sec. 661.335(b)(4) to read ``parents, that may include those of

eligible youth seeking assistance. . . .''

Response: We recognize the commenter's concern, however, the

regulation restates the language of WIA section 117 (h)(iv) and (v).

Therefore, these membership categories have been statutorily mandated

by Congress. We do not interpret the statutory standard to limit youth

council membership to parents of youth participants. Section 117(h)(iv)

of the Act requires the youth council to include members who are:

``parents of eligible youth seeking assistance under this subtitle.''

This statutory phrase is somewhat confusing, since it could be read as

requiring parents of eligible youth seeking assistance rather than

parents of participants who are receiving assistance. We interpret this

language to mean that the representatives for this membership category

must come from families who currently experience the barriers described

in WIA section 101(13)(A) and (B), and in Secs. 664.200 or 664.220, or

who have faced those barriers in the past. This interpretation allows

those families who have successfully overcome their barrers to

education and employment to have a voice on the youth council. We

believe that it is important that youth councils include the views of

parents, especially the views of parents of youth participating in WIA

youth programs. We feel it is important that the representatives for

this membership category possess a first-hand understanding of the

needs and barriers facing eligible youth and strongly encourage chief

elected officials to seek out parents of WIA youth participants. Just

as the Individual Training Account system in the adult and dislocated

worker programs empowers the customer to take an active role in the

training process, these membership categories empower the families most

affected by youth services to take an active role in designing and

improving the system. This interpretation, of course, does not prohibit

the appointment of other parents in the community under WIA section

117(h)(2)(B), which authorizes the appointment of ``other individuals

as the chairperson of the Local Board, in cooperation with the chief

elected official, determines to be appropriate.''

Similarly, this commenter also requested a change to

Sec. 661.335(b)(5), which lists ``Individuals, including former

participants, and members who represent organizations that have

experience relating to youth activities'' as required members of the

youth council. The suggestion would have Sec. 661.335(b)(5) state

``individuals, that may include former participants, and members who .

. .'' We have not made the commenter's change because the regulation

already uses the phrase ``individuals, including former participants .

. . .''

4. Local Workforce Investment Plan: Sections 661.345 through

661.355 describe requirements relating to the submission and

modification of local workforce investment plans.

A commenter disagreed with the provision, in Sec. 661.345(c), that

the Secretary performs the roles of the Governor in reviewing the local

plan developed in a single local workforce investment area State,

particularly regarding the review of the MOU's. The commenter compared

this process with the process in other States where the Governor

reviews locally developed MOU's submitted as part of the local plan.

The commenter emphasized that development and review MOU's should

remain as close as possible to the local level.

Response: We agree that successful implementation of the One-Stop

system in a single local workforce investment area State requires

strong local involvement. MOU's should be developed at the local level.

Section 661.350(c)(3) facilitates local involvement by ensuring that

the local chief elected officials in those States retain their roles in

the system. However, we believe that an independent review of local

plans is necessary. In a single workforce investment area State, where,

in essence, the State itself is the local area, we believe it is

appropriate that the Secretary undertake the role of providing

independent review of the local plan for the State. Since the MOU's are

required to be included in the local plan, the Secretary's review will

include review of the MOU's. No change has been made to the regulation.

With regard to the required local plan contents of Sec. 661.350,

several commenters suggested that we encourage States to require

additional items, such as a comprehensive assessment of activities in

the local area, a description of services available to displaced

homemakers, disadvantaged individuals and to other groups, a

description of nontraditional training and employment activities, a

local plan for the provision of supportive services, and to use a

``sectoral approach'' to link the needs of employers with the skills of

workers.

Response: The authority to require additional items in local plans,

beyond the requirements specified in Sec. 661.350, lies with the

Governor. We encourage Governors to consider the suggested items when

establishing those requirements.

A commenter requested that we add language to

Sec. 661.350(a)(3)(ii) to authorize the submission with the plan of a

status report on MOU's when some MOU's are still in negotiation. The

commenter stated that it appears that it will take some time to

negotiate all the necessary MOU's and asks that we recognize this and

permit the plan process to move forward.

Response: We recognize that the commenter may have a valid point.

Our experience with early implementing States has shown that the

negotiation of MOU's can be an involved process. However, because the

MOU's are the primary means for coordinating the services of the One-

Stop partners, they are the foundation of the entire workforce

investment system. The MOU's address issues with the partners such as

which services each partner will provide through the One-Stop system,

how the costs of the system will be allocated among the partners, how

customers will be referred by the One-Stop operator to the appropriate

partner, among others. Because the resolution of these issues forms the

building blocks of the One-Stop system, we are not prepared to change

the regulation at this time. We strongly encourage States and

localities to take the necessary steps to ensure that the negotiation

of these important documents will be done in a timely manner. However,

in recognition of the fact that some local areas may need additional

time to develop a fully approvable local plan, we have added a new

Sec. 661.350(d), authorizing Governors

to approve local plans on a transitional basis during program year

2000. Governors may use this authority to give transitional approval to

local areas that have not finalized their MOU's or other elements of

their plan. Such a conditional approval is considered to be a written

determination that the local plan is not approved, but will allow

implementation of WIA reforms as they finalize the transition from JTPA

to WIA. This authority is similar to, and derives from, the Department

of Labor's authority under WIA sec. 506(d), to approve incomplete State

plans on a transitional basis.

There were a few comments about the requirements for local plan

modifications at Sec. 661.355. One commenter suggested that we drop, as

unnecessary, the requirement in Sec. 661.355 that the Governor

establish procedures for modification of local plans.

Response: While the commenter may be correct that Governors already

know their responsibilities so this regulation is not needed, we

believe that there is value in clearly specifying the responsibility to

establish these procedures so that it is not inadvertently overlooked.

A commenter suggested that we amend the illustrative list of the

circumstances when a local plan modification may be required by the

Governor, at Sec. 661.355, to include changes to the membership

structure of the Local Board among those circumstances.

Response: The regulation as written already includes this factor.

The conditions under which a State plan modification is required, in

Sec. 661.230(b), also include changes to the membership structure of

the State Board.

Another commenter asked, regarding one of the existing

circumstances in which a local plan modification may be required--at

what point is a ``change in the financing available to support WIA

title I and partner-provided WIA services'' significant enough to

warrant a modification?

Response: When developing the local plan modification procedure

under Sec. 661.355, this is one of the questions the Governor should

consider. The answer is likely to be different for different states and

possibly for different areas. We do not think it is appropriate to

restrict the Governors' authority by setting a federal standard.

Subpart D--General Waivers and Work-Flex Waivers

Subpart D indicates the elements of WIA and the Wagner-Peyser Act

that may and may not be waived under either the general waiver

authority of WIA section 189(i) or the work-flex provision at WIA

section 192. In response to comments, we have made a technical

correction in Sec. 661.420, changing paragraph (g) to (f).

We received several comments about the exceptions to the

Secretary's waiver authority, described at Sec. 661.410, and work-flex

waiver authority, described at Sec. 661.430. Commenters requested that

the regulation be amended to specify that the Secretary will not

approve waivers of title I of the Rehabilitation Act, nor of the State

merit staffing requirements of the Wagner-Peyser Act, and deleting the

Older Americans Act from work-flex waiver authority.

Response: Regarding the Rehabilitation Act, the regulations make

clear that the Secretary's authority to approve waiver requests is

limited to requests for waiver of certain provisions of WIA and the

Wagner-Peyser Act. We cannot waive provisions of other statutes. While

we are not making the suggested change, we wish to make clear that the

Department does not intend, nor do we have authority to entertain or

grant waivers of title I of the Rehabilitation Act. Similarly, an

exception for the Wagner-Peyser Act State merit staffing requirement is

not necessary. Our authority to waive Wagner-Peyser Act provisions is

limited to requirements under sections 8 through 10 of that Act. The

requirement that Wagner-Peyser Act services be provided by State merit

staff employees derives from sections 3 and 5(b)(1) of the Wagner-

Peyser Act. Accordingly, we do not intend to, nor do we have authority

to entertain or grant waivers of the Wagner-Peyser Act merit staffing

requirement. Finally, we have retained the authority for Governors to

approve waivers of certain provisions of the Older Americans Act,

because WIA section 192(a)(3) specifically provides that authority.

Other commenters suggested that we define the existing exception

prohibiting waivers of provisions relating to worker rights,

participation and protections to prohibit waivers of provisions

relating to labor nominations and appointments to State and Local

Boards, opportunities for comment on State and local plans, and the

certification process for eligible training providers. The commenters

also requested that States be required to establish a public comment

process, that includes comment from organized labor, on proposed

waivers and a work-flex plan; and asked that we conduct periodic

evaluation of the impact of waivers and work-flex activities.

Response: We have not added the suggested definition of the worker

rights, participation and protection exceptions. First, we do not agree

that the suggested provisions fall within the scope of the worker

rights, participation and protection exceptions. Secondly, we do not

think it is appropriate to define the scope of these provisions by

regulation and believe it will be more effective to deal with waiver

requests as they occur. On the other hand, we believe that requests for

waivers of the provisions suggested by the commenters will likely fall

within other exceptions to waiver authority. Section 661.410(a)(9)

excludes waivers of requirements relating to procedures for review and

approval of plans, which would exclude a waiver of the public comment

requirements for State and local plans. Provisions related to the

establishment and function of Local Boards may not be waived. This will

prohibit waivers of the nomination and appointment requirements for

Local Boards. The eligible training provider requirements seem to fall

within the key principles of empowering individuals and increasing

accountability identified at Sec. 661.400(b)(2) and (4). Provisions

relating to the key principles may not be waived under Work-flex

authority, and will only be waived by the Secretary in extremely

unusual circumstances when the provision can be demonstrated to be

impeding reform.

We agree with the commenters' suggestion regarding the public

comment process for waiver plans and work-flex plans. Section

661.430(e) already requires that the State work-flex plan undergo a

public comment process, similar to that of the State five-year plan.

While WIA section 189(i) does not specifically require that a stand-

alone waiver plan go through a similar process (a waiver plan included

within the State five-year plan would undergo public review along with

the rest of that plan), the requirement for Local Board comment on the

waiver plan at WIA section 189(i)(4)(B)(v) and the sunshine provisions

for State and Local Board activities at WIA sections 111(g) and 117(e)

indicate clear Congressional intent that major decisions involving the

workforce investment system be made in a public and open manner. In our

view, the decision to request a waiver of statutory or regulatory

requirements is such a major decision. Accordingly, we have revised

Sec. 661.420(a)(5), to require a description of the process used to

ensure meaningful public comment, including comment by business and

organized labor, on the State waiver plan. Finally, we agree on the

need for evaluation of the waiver process. Although, we have not yet

made specific plans for such a review, we intend to do so in the future.

Part 662--Description of the One-Stop System Under Title I of the

Workforce Investment Act

Introduction

The establishment of a One-Stop delivery system for workforce

development services is a cornerstone of the reforms contained in title

I of WIA. This delivery system streamlines access to numerous workforce

investment and educational, and other human resource services,

activities and programs. The Act's requirements build on reform efforts

that are well established in all States through the Department's One-

Stop grant initiative. Rather than requiring individuals and employers

to seek workforce development information and services at several

different locations, which is often costly, discouraging and confusing,

WIA requires States and communities to integrate multiple workforce

development programs and resources for individuals at the ``street

level'' through a user friendly One-Stop delivery system. This system

will simplify and expand access to services for job seekers and

employers.

The Act specifies nineteen required One-Stop partners and an

additional five optional partners to coordinate activities and

streamline access to a range of employment and training services. WIA

requires coordination among all Department of Labor funded programs as

well as other workforce investment programs administered by the

Departments of Education, Health and Human Services, and Housing and

Urban Development. WIA also encourages participation in the One-Stop

delivery system by other relevant programs, such as those administered

by the Departments of Agriculture, Health and Human Services, and

Transportation, as well as the Corporation for National and Community

Service. In addition, local areas are authorized to add additional

partners as local needs may require. All of the Federal Agencies will

continue to work together to ensure effective communication and

collaboration at the Federal level in support of One-Stop service

delivery.

Subpart A--One-Stop Delivery System

1. Structure: Subpart A describes the structure of a One-Stop

delivery system. Section 662.100, describes the One-Stop system as a

seamless system of service delivery created through the collaboration

of entities responsible for separate workforce development funding

streams. The One-Stop system is designed to enhance access to services

and improve outcomes for individuals seeking assistance. The regulation

specifically defines the system as consisting of one or more

comprehensive, physical One-Stop centers in a local area. Core services

specified in WIA section 134(d)(2) must be provided at the One-Stop

center as must access to the other activities and programs provided

under WIA and by each One-Stop partner. In addition to the statutory

list of core services, States and locals are encourated to add

additional core services such as the provision of information relating

to the availability of work supports, including, Food Stamps, Medicaid,

Children's Health Insurance Program, child support, and the Earned

Income Tax Credit. In locating each comprehensive center, Local Boards

should coordinate with the broader community, including transportation

agencies and existing public and private sector service providers, to

ensure that the centers and services are accessible to their customers,

including individuals with disabilities.

In addition to the comprehensive centers, Sec. 662.100(d) describes

three other arrangements to supplement the comprehensive center. These

supplemental arrangements include: (1) A network of affiliated sites

that provide one or more of the programs, services and activities of

the partners; (2) a network of One-Stop partners through which the

partners provide services linked to an affiliated site and through

which all individuals are provided information on the availability of

core services in the local area; and (3) specialized centers that

address specific needs. In essence, this structure may be described as

a ``one right door and no wrong door'' approach. One-Stop partners have

an obligation to ensure that core services that are appropriate for

their particular populations are made available at one comprehensive

center, and through additional sites, as described in the local plan

and consistent with the local memorandum of understanding (MOU). If an

individual enters the system through one of the network sites rather

than the comprehensive One-Stop center, the individual may obtain

certain services at the network site and must be able to receive

information about how and where the other services provided through the

One-Stop system may be obtained.

Some commenters expressed concern that the description in

Sec. 662.100 emphasizes physical locations rather than the development

of systems. The commenters suggested that the regulations be expanded

to provide that, in addition to the comprehensive center, it is

expected that local areas will build a One-Stop system by developing

affiliate relationships with existing public and private sector

providers. The commenters further suggested that more examples should

be offered as to how the centers and affiliates may mix and match

services.

Response: The purpose of Sec. 662.100 is simply to describe the

general objectives of the One-Stop system and to identify the required

components of that system as well as the alternative designs specified

in WIA. While we agree that effective networks connecting the centers

and affiliates will generally be critical to the success of the One-

Stop system, WIA allows local areas significant flexibility in

tailoring the design of the system to best meet local needs. Therefore,

rather than include examples as part the requirements of this

regulation, we will disseminate information and provide technical

assistance about how different local areas have designed effective One-

Stop systems.

Commenters also requested clarification that physical co-location

at the centers was not required for all of the services provided by a

partner's program and that each partner was not required to be co-

located at the centers.

Response: The description of the One-Stop system in Sec. 662.100

and the requirements for the provision of services at the centers in

Sec. 662.250 make it clear that WIA requires the provision of specified

core services at the centers. However, Sec. 662.250(b) specifically

provides that the core services may be provided at the centers by the

partners in a variety of ways, including agreements with service

providers at the centers to provide the core services or the provision

of appropriate technology, as alternatives to the co-location of

personnel. The extent to which services in addition to the specified

core services are provided at the centers and how services are to be

provided are matters to be addressed in the local MOU's, and are not

specified by WIA. We believe the current provisions are clear on these

issues and have not made changes to the regulations.

Some commenters also expressed concern that the description of the

One-Stop system did not address access for individuals with

disabilities, and suggested that we reiterate the applicability of the

Americans with Disabilities Act and Section 504 of the

Rehabilitation Act of 1973 to the One-Stop system.

Response: Section 667.275(a)(3) specifically states that the ADA

and Section 504, as well as the nondiscrimination provisions of WIA

section 188, are applicable to the One-Stop system as well as the other

activities administered under title I of WIA. We believe that, as with

other uniform requirements, adding this statement to every affected

section of these regulations would be duplicative and potentially

confusing. The Department's regulations implementing the

nondiscrimination provisions in WIA section 188 (29 CFR part 37)

extensively address this issue.

Subpart B--One-Stop Partners

1. Responsibilities: Subpart B identifies the One-Stop partners and

their responsibilities in the One-Stop delivery system. The required

partners are entities that carry out the workforce development

programs. They are specifically identified in section 121(b)(1) of WIA

and Sec. 662.200. Section 662.200(b)(1)(i through vii) separately

specifies the programs under title I that are included as required

partners. Section 662.200(b)(2)-(12) also identifies the other required

programs, with some clarification of the particular provisions of

certain Acts (for example, the Vocational Rehabilitation Act and the

Carl D. Perkins Act) that authorize the required partner program.

Section 662.210 identifies additional partners that may be a part of

the One-Stop system.

One commenter suggested that the Governor has the authority under

WIA to require that additional partners be included in all the local

One-Stop delivery systems in the State and asks that the regulation

include such authority. The commenter cites section 112(b)(8)(A) of

WIA, which requires the State to describe in the State plan procedures

to assure coordination and avoid duplication among specified programs,

and section 117(b)(1) of WIA, which provides that the Governor

establish criteria for the appointment of members of local boards, as

the basis for this authority.

Response: We agree that the provisions cited by the commenter

authorize the State to require that additional partners participate as

partners in all of the One-Stop systems in the State. This includes the

program specified in WIA section 121(b)(2)(B)(i) through (iv) or any

other appropriate program under WIA section 121(b)(2)(B)(v). We have

added a new section 662.210(c) to clarify that the State does have this

authority. The State's authority to identify additional partners to be

included in all One-Stop systems does not affect the CEO's authority to

include locally-identified human resource programs as One-Stop

partners. Under WIA section 121(b)(2), the CEO and Local Board may

approve any appropriate Federal, State or local program, including

programs in the private sector, for participation as a partner in the

local One-Stop system.

Entities--Section 662.220 provides a general definition of the

``entity'' that carries out the specified programs and serves as the

partner. In light of the responsibilities of the partners, which are

described in Sec. 662.230 and which include decisions about the use and

administration of program resources, the regulation defines the

``entity'' as the grant recipient or other entity or organization

responsible for administering the program's funds in the local area.

The term ``entity'' does not include service providers that contract

with or are subrecipients of the local entity. Section 662.220(a)

provides that for programs that do not have local administrative

entities, the responsible State agency should be the One-Stop partner.

In addition, Sec. 662.220(b) (1) and (2) specifies the appropriate

entities to serve as partner for the Adult Education and Vocational

Rehabilitation programs. Entities that serve as the partner under the

Indian and Native American, Migrant and Seasonal Farmworker, and Job

Corps programs are identified in the parts of the regulations

applicable to those programs (parts 668, 669, and 670 respectively).

One commenter requested two clarifications about the partner

representing the Adult Education and Literacy programs under title II

of WIA. First, while the regulation specifies that the partner for

those programs is the State eligible entity or an eligible provider

designated by the State entity, the commenter suggested adding

authority for the State entity to designate a consortium of eligible

providers as the partner. Second, the commenter suggested clarifying

that the State eligible entity also has the authority to designate the

individual representing the partner on the local boards, not just the

entity.

Response: We agree that the State eligible entity may designate a

consortium of eligible providers to serve as the local One-Stop partner

and have modified the regulation to clarify this authority. However, we

assume that any consortium so designated would have mechanisms in place

so that it speaks with one voice on behalf of Adult Education and

Literacy programs on issues affecting the One-Stop system. We would not

expect that the designation of a consortium would require the Local

Board to separately negotiate with each member of the consortium about

how the responsibilities of the partner will be carried out.

The second issue is addressed in the preamble discussion of 20 CFR

part 661.

Another commenter noted that Sec. 662.220(b)(3) only defines

national programs under title I of WIA as required partners if such

programs are present in the local area and suggested that the

regulation apply the same condition to the other required partners.

Response: We agree that the responsibilities of a required partner

apply in those local areas where the required partner provides

services. We do not believe WIA was intended to require programs not

serving local areas to begin to provide services in such areas, but

instead to require collaboration through the One-Stop system in any

local area in which such services are provided. While we believe that

the vast majority of local areas are currently served by the required

partner programs, the regulation is modified to clarify this

requirement.

Several commenters also noted that several of the programs

identified as required partners may be administered by the same entity

in the State or local area and the regulation should indicate that one

individual from that entity may represent all such programs on the

local board.

Response: This issue is addressed in the preamble discussion of 20

CFR part 661.

Partner Responsibilities--Section 662.230 describes and elaborates

on the statutory responsibilities of the partners and identifies the

five provisions of the Act that describe these responsibilities. These

responsibilities include: (1) Making available through the One-Stop

system appropriate core services that are applicable to the partner's

program; (2) using a portion of funds available to the partner's

program, to the extent not inconsistent with the Federal law

authorizing the program, to create and maintain the One-Stop delivery

system and to provide core services; (3) entering into an MOU regarding

the operation of the One-Stop system; (4) participating in the

operation of the One-Stop system; and (5) provide representation on the

Local Board.

Several commenters expressed concerns about the required use of a

portion of the partners' funds to support the One-Stop system. Some

commenters suggested that certain authorizing laws, such as the Perkins

Vocational Education Act, would not permit such

use. Other commenters suggested that since the WIA statutory language

requires that partner funds be used to ``establish'' the One-Stop

system, the regulatory requirement be limited to initial start-up of

the system and not include any responsibility to use funds to

``maintain'' the system. In addition, some commenters were concerned

about whether we could enforce the use of funds requirement and

suggested that unless the partners contributed real resources, the

overall WIA vision would not be achieved.

Response: WIA section 134(d)(1)(B) specifically requires all of the

required partners to use a portion of their funds to support the One-

Stop system. We believe the language providing that the use of the

partners' funds not be inconsistent with the authorizing law may affect

the particular One-Stop activities the partner may support, but is not

intended to nullify this requirement. Several of the core services

(e.g., outreach) are authorized under all programs, and each partner

should collaborate to ensure that the local One-Stop system is

providing workforce investment activities that are of benefit to

participants in the partner's program. A portion of the partner's funds

is then used to support the system in providing those activities. The

details of the particular portion and use of those funds are to be

addressed in the MOU. These issues are further addressed in the

subsequent regulatory provisions of this subpart.

With respect to the responsibility to assist in maintaining the

system, we believe that the requirement in Sec. 662.230(a)(2)(i) that a

portion of funds be used to ``create and maintain'' the One-Stop system

is the appropriate interpretation of the statutory requirement in WIA

section134(d)(1)(B) that a partner use a portion of funds to

``establish'' the One-Stop delivery system. There is nothing in WIA or

the legislative history to suggest that ``establish'' refers to a one-

time start-up activity. To the contrary, all of the partners'

responsibilities apply as long as the One-Stop system is in operation

and include participation in the operation of the One-Stop system (WIA

section121(b)(1)(B)) and carrying out the MOU that includes the details

on the funding of the system (WIA sec. 121(c)). We do not believe that

Congress intended that the partners continue to participate in the

operation of the one-stop system, but that their responsibility to use

funds to support that system terminate as soon as some undefined start-

up period is completed. Rather, we believe the only reasonable

interpretation is that a required partner's responsibility to use a

portion of funds to support the system continues along with the

participation of the partner in the system. Therefore, we have not

changed this provision of the regulations.

With respect to enforcement of these requirements, we are working

with the other Federal agencies to ensure that all partner programs are

aware of and carry out these requirements. We believe that full

participation in the One-Stop system will be of great benefit to the

partners' programs and to their participants, and, therefore, these

requirements should be viewed as promoting a comprehensive and

effective system of service delivery for each local area.

Section 662.240 addresses the core services applicable to a

partner's program that are to be provided through the One-Stop system.

Section 662.400(a) lists the core services that are described in

section 134(d)(2) of WIA, and defines ``applicable'' to mean the

services from that list that are authorized and provided under the

partner programs. The extent to which core services are applicable to a

partner program, as well as the manner in which services are provided,

are determined by the program's authorizing statute.

Some commenters suggested we further define many of the listed core

services. For example, one suggestion was to require career counseling

to include a discussion of self-sufficiency standards to assist in

setting long-term employment goals. Another suggestion was to require

additional employment statistics information relating to high wage jobs

and employment laws. Other suggestions included adding computer

literacy to the initial assessment, and information relating to

employment rights to follow-up services.

Response: We believe many of the proposed elements would enhance

the provision of services. However, we believe they should be

disseminated as technical assistance rather than as regulatory

requirements. The purpose of this provision is to identify the list of

core services contained in the statute that must be made available

through the One-Stop system. The specific elements of these services is

a matter that may be addressed in the MOU and should be tailored to

meet local needs. Therefore, we have not made any changes to the

statutory list of core services under this regulation.

Availability of Services--Section 662.250 describes where and to

what extent the One-Stop partners must make available the applicable

core services. Since section 134(c) of WIA requires that core services

be provided, at a minimum, at one comprehensive physical center, the

regulation requires that the core services applicable to the partner's

program be made available by each partner at that comprehensive center.

To avoid duplication of services traditionally provided under the

Wagner-Peyser Act, this requirement is limited to those applicable core

services that are in addition to the basic labor exchange services

traditionally provided in the local area under the Wagner-Peyser

program. While a partner would not, for example, be required to

duplicate an assessment provided under the Wagner-Peyser Act, the

partner would be responsible for any needed assessment that includes

additional elements specifically tailored to participants under that

partner's program. We encourage partners to work together at the local

level to tailor the initial assessment so that the information taken

can provide a gateway to the partner program's more specific

requirements. However, it is important to note that the adult and

dislocated worker partner programs are required to make all of the core

services available at the center (see Sec. 662.250(a)).

Flexibility--Section 662.250(b) also provides significant

flexibility about how the core services are made available at the One-

Stop center by allowing for services to be provided through appropriate

technology at the center, through co-location of personnel, cross-

training of staff, or through contractual or other arrangements between

the partner and the service providers at the center.

Proportionate Responsibility: Section 662.250(c) provides that the

responsibility for the provision of and financing for applicable core

services is to be proportionate to the use of services at the center by

individuals attributable to the partners' programs. Section 662.250(d)

further provides that the individuals attributable to a partners'

program may include individuals referred through the center and

enrolled in the partner's program after the receipt of core services,

individuals enrolled prior to the receipt of core services, individuals

who meet the eligibility criteria for the partner's program and who

receive an applicable core service, or individuals who meet an

alternative definition described in the MOU. This ``proportionate

responsibility'' provision is intended to provide an equitable

principle for sharing cost and service responsibilities among the

partners. The regulation provides that the specific method for

determining proportionate responsibility (for example, surveys) must be

described in the MOU.

Additional Sites--Section 662.250(e) provides that, under the MOU,

core services may be provided at sites in addition to the comprehensive

center. Therefore, it is not required that partners provide core

services exclusively at a One-Stop center. If an individual seeks core

services at the One-Stop center rather than at the partner's site, they

should be made available to him or her without referral to another

location, but a partner is not required to route all of its

participants through the comprehensive One-Stop center.

There were a number of comments on these provisions about the

availability of core services and proportionate responsibility.

Commenters questioned whether the requirement that partners provide

core services at the One-Stop center went beyond the statute, and

whether proportionate responsibility was required by the statute.

Several commenters expressed concern that the concepts of proportionate

responsibility and attributable individuals did not provide clear

direction. In addition, some commenters requested clarification that

not all applicants for a partner's program would be attributable to

that program while others suggested the regulation should provide that

only individuals enrolled in the program should be attributable.

Finally, some commenters were concerned that proportionate

responsibility would require undue tracking and recordkeeping.

Response: We believe these regulatory provisions are appropriate

interpretations of WIA and the general cost principles enunciated in

the relevant OMB circulars. We believe that, read together, the

requirements of WIA section 134(c)(1), regarding the actual provision

of core services and the provision of access to other services, WIA

section 134(c)(2), regarding the accessibility of these services at a

physical center, and WIA section 121, requiring that the partners

provide the applicable core services, support the requirement that each

partner provide the applicable core services at the center. As noted

above, such core services may also be provided at other sites in the

One-Stop delivery system in addition to being provided at the center.

Section 662.250 does include provisions to ensure that there is

significant flexibility in the manner in which core services may be

provided at the center, and does not require partners to provide those

core services at the center that are traditionally provided by the

Wagner-Peyser program. The Department, in partnership with other

federal agencies will provide additional technical assistance to help

implement these requirements. We believe these requirements are

essential to ensure that basic information and services relating to

workforce development can truly be obtained at ``One-Stop'', and that

the partners effectively collaborate to provide a seamless system of

service delivery.

The principle of a partner's responsibility for the proportionate

use of these services by individuals attributable to the program of the

partner is derived from general cost principles of the OMB circulars,

as well our interpretation of the WIA provisions relating to the

required provision of applicable core services. As noted above, we

believe this is an equitable principle that is intended to ensure an

appropriate level of participation by the partners in a manner that is

fair to the partners. We do not want to prescribe how such

proportionate use is to be calculated, but simply to identify options

that we believe would be acceptable under the circulars for attributing

individuals to a program. The regulation does not require that a

particular option be used, only that the methods be described in the

MOU. Therefore, whether attribution is based on enrollment in the

program or some other basis is a matter to be determined locally among

the partners. Tracking and recordkeeping will also be affected by how

the local area chooses to determine proportionate use and we do not

believe such requirements need be unduly burdensome. Consistent with

our principle of writing these regulations to provide maximum State and

local flexibility, the regulation seeks to balance the need for Federal

guidance to ensure that the objectives of WIA are realized with the

need for flexibility at the State and local level to tailor specific

approaches to meet local needs. We do not want this flexibility to be

used to avoid implementing the changes in service delivery required

under WIA, but we also do not want to preclude innovative approaches to

implementing those changes. Therefore, we intend to retain the

regulatory requirements of this section and offer technical assistance

to facilitate implementation.

Access to Services--Section 662.260 provides that, in addition to

the provision of core services, the One-Stop partners must use the One-

Stop system to provide access to the partners' other activities and

programs. This access must be described in the MOU. This requirement is

essential to ensuring a seamless, comprehensive workforce development

system that identifies the service options available to individuals and

takes the critical next step of facilitating access to these services.

Several commenters suggested that we maintain a flexible

interpretation of the term ``access'' in Sec. 662.260 when referring to

the access to activities and services, other than the core services,

that a partner must provide through the One-Stop system. These

commenters expressed concern that a partner with a broad array of

services could not provide all services at a single One-Stop center,

and suggested that we encourage flexible delivery models, such as

outstationing of staff or electronic access, to meet this requirement.

Response: We have intentionally not defined what constitutes access

to these other activities and services in the regulation and the

regulation simply requires each local area to describe how access is

provided through the One-Stop system in the MOU. We believe access is

intended to go beyond the mere listing of a program and location, but

instead that the One-Stop will provide added value by assisting

customers to identify the services and programs that may best meet

their particular needs and by arranging to obtain such services. Co-

location of certain services at the center may be the most user-

friendly approach to providing access in some areas, while other areas

may rely more on electronic and other affiliate connections to ensure

access. That is a matter to be determined among the partners in the

local area through the MOU and this section of the regulation retains

that requirement.

2. Cost Sharing: Section 662.270 provides that the particular

arrangements for funding the services provided through the One-Stop

system and the operating costs of the One-Stop system must be described

in the MOU. Each partner must contribute a fair share of the operating

costs based on the use of the One-Stop delivery system by individuals

attributable to the partner's program. This is an equitable principle

and there are a number of methods that may be used for allocating costs

among partners that are consistent with this principle and the OMB

circulars. To promote efficiency and optimal performance, partner

contributions for the costs of the system may be re-evaluated annually

through the MOU process. This regulation identifies a number of

methodologies, including cost pooling, indirect cost allocation, and

activity based cost allocation plans, that may be used. The Department,

in consultation with other affected Federal agencies, issued guidance.

The guidance was published in the Federal Register on June 27, 2000.

There were numerous comments about this section. Many of the

comments about the requirement that each partner contribute a fair

share to the operation of the One-Stop system based on proportionate

use of the system by individuals attributable to the program of the

partner were the same as or similar to the comments on proportionate

responsibility under Sec. 662.250. Some commenters suggested that the

methodology for allocating costs of the One-Stop system be strengthened

and clarified. Some commenters suggested prescribing particular

approaches, such as requiring cost sharing only be based on real costs

directly attributable to the use of One-Stop center space and utilities

when the partners are co-located, while others suggested limiting the

methods for attributing individuals to a program to services received

after enrollment in the program. Some commenters suggested that the

regulation provide for pooling of overhead costs and proportionate

allocation of service costs. Some commenters expressed concern that the

multiple cost allocation methodologies identified in the regulation

were at odds with the proportionate use approach, while others

expressed concern that the proportionate use approach required

extensive recordkeeping and tracking. Some commenters stressed the need

for time to determine baseline percentages of how many people each

partner serves relative to the total traffic and suggested that we

provide additional guidance on developing baselines. A commenter

expressed concern that a proportionate cost allocation approach could

cause discord and undercut collaboration and co-location, while other

commenters expressed concern about whether this approach could be

enforced.

In addition, some commenters suggested clarifying that operating

costs include both administrative and programmatic costs. Other

commenters suggested that the regulations allow the fair share to be

contributed ``in-kind''. Some commenters suggested removing the

multiple methodologies described in the regulation while others

expressed concern that without more specific requirements title I

programs would end up paying all the costs.

Some commenters expressed concern that reliance on the OMB

circulars based on benefit to the program would be a barrier to One-

Stop delivery and suggested a new circular that would promote

integrated service delivery should be developed. A number of commenters

indicated that it was important that Federal agencies work together to

present a coherent message in support of sharing costs and integrating

programs and that technical assistance be provided to facilitate the

development of acceptable cost allocation methodologies.

Response: We believe that the ``fair share'' requirement of this

regulation is the appropriate interpretation of the WIA provisions

relating to the contributions of the One-Stop partners and the

applicable OMB circulars. The regulation is intended to identify each

partner's responsibility to contribute to the operation of the system

based on proportionate use, while allowing each local area significant

flexibility in providing how that contribution is to be determined.

While prescribing a more detailed methodology may provide clearer

direction and facilitate more rapid resolution of the cost allocation

issue at the local level, it would also significantly limit the ability

of each local area to tailor the arrangements to meet their particular

needs. Therefore, we believe that the ``fair share'' requirement is a

reasonable and flexible standard that should be retained and

supplemented by technical assistance that will inform local areas of

acceptable approaches in more detail. The cost allocation and resource

sharing guidance published in the Federal Register by the Department,

in consultation with the Federal partner agencies, on June 27, 2000,

addresses this issue in more detail.

The proportionate use standard is not intended to be rigid and we

do not believe the multiple methodologies identified in the regulation

are inconsistent with that standard. The various methodologies offer

different approaches that may be used in implementing these

requirements. As indicated with respect to Sec. 662.250, we do not

believe that this standard necessarily requires extensive tracking and

recordkeeping. The burdens attendant to the adoption of a particular

cost allocation method are a legitimate factor to be considered in

negotiating MOU's. We believe that local areas have the flexibility to

refine and modify the cost allocation procedures as more experience is

gained. For example, there is the flexibility to refine the development

of baselines on proportionate use over time, and such adjustments may

be facilitated if the funding arrangements in the MOU are revised

annually.

Contrary to the concern that the proportionate use standard will

promote discord and deter co-location and collaboration, we believe

that standard provides an equitable framework which should assist local

areas and partners in reaching agreement and within which a more

detailed methodology may be developed that supports the particular

design of the One-Stop system in each area. With respect to

enforcement, we are working with other Federal agencies to develop

models of acceptable methodologies and to assist in ensuring that

partners are aware of the opportunities of the One-Stop delivery system

and of their responsibilities under WIA.

On the question of the kinds of operating costs of the One-Stop

system for which the One-Stop partners must contribute, we believe

those costs are the common costs of operating the One-Stop system, and

could include such items as space and occupancy costs, utilities,

common supplies and equipment, a common receptionist, and other shared

staff. However, these common costs will vary depending on the design of

the One-Stop system and we intend to address these costs as part of the

technical assistance that we are developing in partnership other

federal agencies. Therefore, we have not modified the regulation to

further define these costs.

On the question of whether the contribution of the partners to the

operating costs of the One-Stop system may be ``in-kind,'' which we

understand to mean provided with resources other than cash, we

understand that the OMB circulars recognize the provision of noncash

resources as acceptable in meeting certain costs. However, the

contributions of partners may also consist of cash resources, or a

mixture of cash and noncash resources. Rather, the determination

regarding the forms of the contributions is a matter to be determined

locally through the MOU negotiation process, taking into account the

needs of the One-Stop system to ensure customer-friendly access to

services and the proportionate responsibility of and resources

available to the partners. We also intend to address this issue in the

technical assistance we will provide with other agencies and have not

modified the regulation.

On the issue of reliance on the OMB circulars, while the circulars

do set parameters that relate the allocation of costs to the benefit

received by a program, we believe they also allow flexibility to

develop cost allocation methodologies that support integrated service

delivery. We do not expect the issuance of a new circular to address

One-Stop delivery, but, as noted above, we are working with OMB and

other agencies to identify cost allocation methodologies that will be

useful in a One-Stop environment.

Finally, we agree with the comment about the importance of Federal

agencies working together in support of cost sharing and integrating

programs. There have been significant joint efforts to assist in

implementing WIA, including issuance of the streamlined unified

planning guidance, and other joint communications designed to assist

the partners in working together. This effort includes the joint

technical assistance being prepared on cost allocation methodologies

and additional ongoing activities intended to assist in the

implementation of the other elements of the One-Stop system.

Allocation Process--Section 662.280 clarifies that the requirements

of each partner's authorizing legislation continue to apply under the

One-Stop system. Therefore, while the overall effect of linking One-

Stop partners in the One-Stop system is to create universal access to

core services and to facilitate access to partner services, the

resources of each partner may only be used to provide services that are

authorized and provided under the partner's program to individuals who

are eligible under the program. As noted above, consistent with this

principle, there are a variety of methods for allocating costs among

programs. This regulation is intended to clarify that participation in

the One-Stop delivery system is a requirement that is in addition to,

rather than in lieu of, the other requirements applicable to the

partner program under each authorizing law.

There were several comments suggesting that we reiterate in several

different sections of part 662 that the requirements of the laws

authorizing the programs of the partner continue to apply. For example,

commenters suggested that Sec. 662.260, on access to services and

Sec. 662.300, on MOU's, be revised to specifically provide that the

requirements of the laws authorizing the programs of the partner

continue to apply.

Response: We believe that Sec. 662.280 effectively describes the

continued applicability of the requirements of the authorizing laws and

have not repeated this language in other sections except where the

underlying statutory provision specifically makes reference to

consistency with the authorizing laws. We have made no change to the

regulations.

Subpart C--Memorandum of Understanding (MOU)

Subpart C describes the requirements relating to the local

Memorandum of Understanding MOU that governs the operation of the local

One-Stop system. Section 662.300 addresses the contents of the MOU that

must be executed between the Local Board, with the agreement of the

local elected official, and the One-Stop partners. The MOU must

describe the services to be provided through the One-Stop delivery

system, the funding of the services and the operating costs of the

system, the methods for referring individuals between the One-Stop

operators and the partners and the duration of and procedures for

amending the MOU. The MOU may also include other provisions about the

operation of the One-Stop system that the parties consider appropriate.

For example, the parties may use the MOU to address the coordination of

equal opportunity responsibilities such as the handling of

discrimination complaints or other grievances relating to the One-Stop

system.

Section 662.310 provides that the local areas may develop a single

umbrella MOU covering all partners and the Local Board, or separate

MOU's between partners and the Local Board. In many areas, the umbrella

approach may be the preferred means to facilitate a comprehensive and

equitable resolution of the operational issues relating to the One-

Stop, adding information specific to each individual partner

organization. The regulation also emphasizes that it is a legal

obligation for the partners and the Local Board to engage in good faith

negotiation and reach agreement on the MOU. The partners and the Local

Boards may seek the assistance of the appropriate State agencies, the

Governor, State Board or other appropriate parties in reaching

agreement. The State agencies, the State Board and the Governor may

also consult with the appropriate Federal agencies to address impasse

situations. If an impasse has not been resolved, in addition to any

programmatic remedies that may be taken, parties that fail to execute

an MOU may not be permitted to serve on the Local Board. In addition,

if the Local Board has not executed an MOU with all required parties,

the local area is not eligible for State incentive grants awarded for

local coordination.

Several commenters suggested that the regulation provide that only

required partners ``in the area'' must enter into the MOU and also

requested clarification as to whether optional partners were required

to enter into MOU's.

Response: We agree that a required One-Stop partner must enter into

an MOU only in those local areas in which the partner's program

provides services. However, that condition also applies to carrying out

the other responsibilities of a required partner, and, as described

above, we have modified section 662.220(a) to clarify that condition.

We do not believe it is necessary to repeat that condition in this

section. We also believe the intent of WIA section 121 is that optional

partners must be included in the MOU, or execute a separate MOU with

the Local Board, to become part of the One-Stop system. Since the MOU

describes the operational details of the One-Stop system, we believe

WIA intends that the MOU also be the vehicle for addressing the

specified issues of services, costs, and referrals with the optional

partners. WIA section 121(c) refers to One-Stop partners as parties to

the MOU without distinguishing between required and optional partners.

However, we note that the regulation similarly refers to One-Stop

partners generally and is not limited to required partners. We

therefore do not believe it necessary to modify the regulation.

Some commenters indicated that the involvement of the chief elected

official was critical to the successful development and implementation

of MOU's and expressed concern that while the agreement of the chief

elected official to the MOU was required under Sec. 662.300, the chief

elected official was not identified as a party to the MOU in

Sec. 662.310.

Response: We agree that the chief elected official has a

significant role to play in facilitating the development, completion

and operation of the MOU's. This role is explicit in WIA section

121(c), which provides that the Local Board is to develop and enter

into MOU's with the agreement of the chief elected official. This role

is included in Sec. 662.300 and we are adding similar language to

Sec. 662.310. In addition, the chief elected official will often have

authority over many of the title I One-Stop partners in the role of

grant recipient/fiscal agent for the adult, dislocated worker and youth

programs and may play an important role in ensuring that those partners

contribute to the effective development and implementation of MOU's.

Some commenters stated that strong guidance and support for MOU's

at the State level was essential and that a strategy should be

developed to monitor and evaluate MOU's at the State and local levels.

Other commenters suggested that local systems would benefit from MOU's

that offer incentives or penalties to required partners depending on

their performance relative to systemize performance. These commenters

also suggested that the regulations should provide incentives to

Governors to make MOU's and partnerships strong at the outset so that

regulatory effort need not be spent on developing sanctions and

penalties for those who fail to perform as intended. Several commenters

questioned whether the sanctions specified in the regulation for

failure to execute an MOU were consistent with WIA, arguing that WIA

requires that partners be represented on the Local Board without

reference to whether or not they have executed an MOU, while other

commenters suggested that exceptions to the sanctions be allowed by the

regulation where a party has exhibited good faith.

Response: We agree that the Governor and the State have a critical

role to play in facilitating the execution of local MOU's. That role is

reflected in the requirement in WIA section 112(b)(14) that the State

plan describe the strategy of the State for assisting local areas in

the development and implementation of fully operational One-Stop

delivery systems. The regulation also identifies a State role in

assisting local areas to reach agreements on the MOU. We do not believe

the regulations need to provide additional incentives for the State to

promote strong MOU's since the development of MOU's will generally be

critical to enabling local areas and the State to obtain the

performance outcome levels needed to qualify for Federal incentive

payments. The State also has a significant role since many of the

parties to the MOU will be State agencies under the direction of the

Governor. We believe it is important that the Governor work with those

agencies and with localities to ensure that effective MOU's are

executed and implemented. We agree, however, that the suggested

inclusion in the MOU of performance-based incentives or penalties,

whether based on the relative performance of partners or their shared

performance, may be useful in many local areas. We are willing to

assist in the development of performance-based provisions that meet

relevant legal requirements while promoting State and local objectives.

However, we do not believe the regulation needs to contain incentive or

penalty provisions since WIA and the regulations already provide for

the addition of provisions that the parties deem appropriate.

With respect to the sanctions identified in Sec. 662.310(c), we

believe it is reasonable to interpret the reference to representatives

of the One-Stop partners on the Local Board in WIA section

117(b)(2)(A)(vi) as referring to those One-Stop partners that meet the

requirements for being partners in the local One-Stop system, including

executing the MOU. Since the MOU is the vehicle through which the

partner's role in the local system is detailed, the inability to reach

agreement on that role means that an entity has not assumed the role of

a One-Stop partner in that local system for purposes of representation

on the Local Board.

On the question of allowing a ``good faith'' exception that would

permit local areas to be eligible for a State coordination incentive

grant even if the area has not executed an MOU with all required

partners, we believe that such grants are only intended to be awarded

to areas that demonstrate exemplary coordination activities that are in

addition to meeting the minimum requirements for coordination under

WIA. We believe that incentive grants are not intended to be awarded to

areas that are unable to meet the minimum requirement that the local

area have an MOU executed with all required partners, even if the Local

Board has acted in good faith in attempting to reach agreement.

We also believe it should be noted that the sanctions specified in

Sec. 662.310(c) are in addition to rather than in lieu of any other

remedies that may be applicable to the Local Board or to each of the

partners for failure to comply with the Federal statutory requirement

that they execute an MOU and have clarified this point in the

regulation.

Some commenters suggested that the regulation specify that the

details of the assessments of individuals seeking services through the

One-Stop system be described in the MOU and that we set parameters that

will help the States and localities reach agreement on assessment

goals, tools and processes.

Response: We agree that the MOU is a vehicle that local areas

should use to coordinate how assessments and other services are to be

carried out in the One-Stop system. We will work with other Federal

agencies and interested State and local partners to provide technical

assistance that promotes agreement on and enhances how assessments and

other services are delivered. However, we believe that WIA allows

States and localities significant flexibility in determining how,

consistent with the Federal authorizing laws, such services are carried

out and coordinated and, therefore, do not believe it is appropriate to

establish parameters for these services in the regulations.

Some commenters suggested that the regulation be modified to

require that the MOU's contain specific information on staffing

arrangements, including assignment and supervision of staff, staff

training and related personnel policies. In addition, these commenters

suggested that the regulation require written concurrence from

appropriate labor organizations when such arrangements affect their

members or a collective bargaining agreement. These commenters also

suggested that the MOU contain the assurances described in WIA section

181(b)(7) prohibiting the use of funds to assist, promote, or deter

union organizing.

Response: We believe the MOU may be an appropriate vehicle to

address certain personnel issues in many local areas. Section 652.216

of these regulations, governing the Wagner-Peyser Act, provides that

personnel matters for the State merit staffed employees funded under

the Wagner-Peyser Act are the responsibility of the State agency,

although, as part of the MOU, Wagner-Peyser funded employees may

receive guidance on the provision of labor exchange services from the

One-Stop operator. However, we do not believe it would be appropriate

to mandate that additional personnel issues be addressed in the MOU.

The determination of the extent to which such issues are addressed in

the MOU remains with the parties to the MOU under this regulation.

WIA section 181(b)(2)(B) provides that activities carried out with

funds under title I of WIA must not impair collective bargaining

agreements and that no activity inconsistent with the terms of a

collective bargaining agreement may be undertaken without the written

concurrence of the labor organization and employer concerned.

Therefore, to the extent an MOU provides that title I funds be used in

a manner inconsistent with a collective bargaining agreement, written

concurrence is required. However, we do not believe it is necessary to

restate this requirement in this section of the regulation since this

requirement applies to all activities undertaken with title I funds.

Similarly, the prohibition on the use of title I funds to assist,

promote or deter union organizing is applicable to the use of all WIA

title I funds. However, since this prohibition applies to all WIA-

funded activities, we do not believe that WIA requires that an

assurance regarding this prohibition be written into each MOU. Local

areas may be prudent in doing so, but the regulation has not been

modified to require that the MOU contain such a written assurance.

Several commenters suggested that the final rule require MOU's to

be available for public review and comment before execution,

particularly to training providers.

Response: WIA section 118(b)(2)(B) requires that the MOU's be part

of the local plan that is subject to public

review and comment requirements. We believe this requirement ensures

public review and that an additional regulatory requirement is

unnecessary. However, we do encourage local areas to provide

significant opportunities for public input regarding the form and

contents of the MOU as early in the process as is possible.

Several commenters suggested that, due to potential shifts in the

annual appropriations affecting the programs of the partners, the

regulation require annual review of the MOU's by the parties. Other

commenters suggested that due to the difficulty in reaching agreement

and the need for stability, the regulation clarify that multi-year

agreements are permissible.

Response: Section 662.300(b) provides, as does WIA section

121(c)(2)(A)(iv), that the duration of the MOU, and the procedures for

modification, must be addressed in the MOU itself and does not

prescribe an annual review process. Section 662.310(a) indicates that,

in light of the annual appropriations process, the financial agreements

``may'' be negotiated annually, but also allows a multi-year agreement.

We believe these provisions are appropriate interpretations of WIA and

have not modified the regulations.

Subpart D--One-Stop Operator

This subpart addresses the role and selection of One-Stop

operators. One-Stop operators are responsible for administering the

One-Stop centers and their role may range from simply coordinating

service providers in the center to being the primary provider of

services at the center. The role is determined by the chief elected

official. In areas where there is more than one comprehensive One-Stop

center, there may be separate operators for each center or one operator

for multiple centers. The operator may be selected by the Local Board

through a competitive process, or the Local Board may designate a

consortium that includes three or more required One-Stop partners as an

operator. The Local Board itself may serve as a One-Stop operator only

with the consent of the chief elected official and the Governor.

This subpart also addresses the ``grandfathering'' of existing One-

Stop operators. Section 662.430 provides some continuity for areas that

have already established One-Stop systems while ensuring that

fundamental features of the new One-Stop system are incorporated. A

local area does not have to comply with the One-Stop operator selection

procedures if the One-Stop delivery system, of which the operator is a

part, existed before August 7, 1998 (the date of the WIA's enactment).

However, that One-Stop system must be modified to meet the WIA

requirements about the inclusion of the required One-Stop partners and

the MOU.

Some commenters suggested that the regulations be modified to allow

for a system operator (rather than separate center operators) that may

be responsible for the coordination of the entire local one-stop

system, or the maintenance and development of the linkages and

technology between centers.

Response: While WIA section 121(d) refers to the operator primarily

in connection with the operation of centers, we believe that the law

does not preclude the expansion of that role to include additional

coordination responsibilities relating to the One-Stop system. The

particular role may vary depending on the design of the local system.

We have modified section 662.410(c) to include the possibility of

broader One-Stop operator coordination responsibilities.

Several commenters suggested that the regulations be modified to

clarify that the public must have the opportunity to review and comment

on documents relating to the selection of a One-Stop operator if a

competitive selection process is used.

Response: WIA section 117(e) contains a general sunshine provision

that requires the Local Board to make available on a regular basis

information regarding its activities, including information on the

designation and certification of One-Stop operators. This requirement

applies to whatever designation process is used by the local area,

whether it be competitive or an agreement with a consortium. Section

662.420(b) referred to this requirement only in connection with the

designation of the Local Board as the operator and the designation of

an existing operator. We have removed the reference in Sec. 662.420(b)

and have modified Sec. 662.410 to clarify that the Local Board's

sunshine provision, which is now described in Sec. 661.307, applies to

all designations and certifications of One-Stop operators.

Some commenters suggested that the regulation describe the various

financial assistance agreements that may be made with the One-Stop

operator following the selection process. Specifically, the commenters

suggested that the regulation identify grants, cooperative agreements,

and procurement contracts as the alternative arrangements and identify

the OMB circulars that apply to each arrangement.

Response: We believe that the fiscal and administrative rules

relating to the use of WIA title I funds, including the use of such

funds to support the One-Stop operator, are appropriately described in

20 CFR 667.200 and need not be restated in each section of the

regulations to which they are applicable.

Some commenters suggested that we should encourage the

grandfathering of One-Stop operators that were designated pursuant to a

collaborative process. These commenters also suggested that

Sec. 662.430 appears to impose more requirements on the grandfathering

of existing One-Stop operators than apply to new designations and that

those requirements should be uniform.

Response: We believes that WIA provides options for the designation

of One-Stop operators and intends for each local area to determine the

approach that best meets local needs. We will disseminate information

relating to the experience of local areas that have used each of the

allowable options. We will also modify this regulation to clarify that

the only difference between One-Stop systems that choose to grandfather

the One-Stop operator and systems that designate the operator pursuant

to competition or consortium agreement is the selection process. The

WIA requirements relating to the inclusion of required partners, the

provision of services, and the execution of the MOU's apply to all One-

Stop systems, including those with operators retained under the

grandfathering provision. Such systems must be modified, to the extent

necessary, to comply with all WIA requirements regarding the One-Stop

system. We have modified Sec. 662.430 to make these distinctions

clearer.

Part 663--Adult and Dislocated Worker Activities Under Title I of the

Workforce Investment Act

Introduction

This part of the regulations describes requirements relating to the

services that are available for adults and dislocated workers. The

required adult and dislocated worker services, described as core,

intensive, and training services, form the backbone of the One-Stop

delivery system for services to two workforce program customers, job

seekers and employers. The WIA goal of universal access to core

services is achieved, among other strategies, through close integration

of services provided by the Wagner-Peyser, WIA adult and dislocated

worker partners and other partners in the One-Stop center and system.

Intensive and

training services are available to individuals who meet the eligibility

requirements for the funding streams and who are determined to need

these services to achieve employment, or in the case of employed

individuals, to obtain or retain self-sufficient employment. Supportive

services, to enable individuals to participate in these other

activities, including needs-related payments for individuals in

training, may also be provided.

These regulations also introduce the Individual Training Account

(ITA), which is a key reform element of the Workforce Investment Act.

Individuals will now be able to take a proactive role in choosing the

training services which meet their needs. They will be provided with

quality information on providers of training and, armed with effective

case management, an ITA as the payment mechanism. These tools will

enable them to choose the training provider that best serves their

individual needs.

Along with part 664, this part contains most of the program service

requirements that apply to WIA title I formula funds. WIA provides

States and local areas with significant flexibility to deliver services

in ways that best serve the particular needs of each State and local

communities. These regulations support that principle; wherever

possible, program design options and categories of service are defined

broadly. States and local areas are reminded that they must use that

flexibility in a manner that broadens the opportunities available under

the Act to all customers. Recipients of financial assistance under WIA

title I must be mindful of their responsibilities under the

nondiscrimination provisions of section 188, and must not unfairly

exclude individuals from opportunities or otherwise make decisions

based upon race, color, religion, sex, national origin, age, political

affiliation or belief, disability status, or citizenship. The

Department published comprehensive regulations implementing section 188

at 29 CFR part 37. 20 CFR 667.275 makes clear that all recipients of

financial assistance under WIA title I must comply with 29 CFR part 37

when exercising the flexibility provided by WIA and this Final Rule.

Subpart A--One-Stop System

1. Role of the Adult and Dislocated Worker Programs in the One-Stop

System: Section 663.100 provides that the One-Stop system is the basic

delivery system for services to adults and dislocated workers. The

concept of a single system that provides universal access to certain

services to all individuals age 18 or older is a key tenet of the

Workforce Investment Act. The regulation reflects the emphasis in WIA

to consolidate and coordinate services. The grant recipient(s) for the

adult and dislocated worker program becomes a required partner of the

One Stop system, and is subject to 20 CFR 662.230 regarding required

partner responsibilities, including serving on the Local Board. Access

to services through the One-Stop system ensures that individual needs

are identified and, to the extent possible, met. The consolidation of

and access to services will result in improved services for both adults

and dislocated workers.

One comment on Sec. 663.100 noted that adult and dislocated worker

programs are separate activities with separate funding streams, and

asked whether they might each have separate representatives on the

Local Board.

Response: We understand that the heading for Sec. 663.100 may be

misleading, in that it may be read to imply that there is a single

program serving adults and dislocated workers, which is clearly not the

case. As accurately noted by the commenter, these are separate programs

with separate funding streams. Accordingly, we have revised the

headings and regulatory text in Secs. 663.100, 110 and 115 to pluralize

the word ``Program,'' to more accurately reflect the discrete nature of

the two programs. On the matter of separate representation for each of

these programs on the Local Board, we feel the rule already

sufficiently addresses this issue in the Local Governance provisions at

20 CFR 661.315, and 662.200(a), concerning the required One-Stop

partners. These sections make it clear that the Local Board must have

at least one member representing each One-Stop partner program--

including the Adult and Dislocated Worker programs. The CEO may select

one member to represent the Adult program and a different member to

represent the Dislocated Worker program. Or, under new paragraph

661.315(f), the CEO may select one member to represent both of those

programs, if that member meets all the criteria for representation for

each program. Accordingly, no change has been made to the Rule.

Another commenter observed that Individual Training Accounts were

the only method for providing training specifically referenced in

Sec. 663.100(b)(3) and suggested that the Final Rule also list all

training services, including contract training, OJT, and customized

training.

Response: The purpose of Sec. 663.100 is to highlight the key

facets of the Adult and Dislocated Worker programs in the One-Stop

delivery system, one of which is the establishment of ITAs. Since the

purpose of this provision is to highlight ITAs as an important

component of the new workforce investment system, rather than to

clarify the types of training that may be provided under the adult and

dislocated worker programs, no change is being made to the regulations.

Section 663.300 clarifies that training services are listed in WIA

section 134(d)(4), and that the list is not all-inclusive and

additional training services may be provided.

2. Registration and Eligibility: Sections 663.105 through

Sec. 663.115 address registration and basic eligibility requirements.

These sections provide general guidance in the regulation at

Sec. 663.105 on when adults and dislocated workers must be registered.

Sections 663.110 and 663.120 contain the basic eligibility criteria for

adults and dislocated workers, respectively.

Registration is an information collection process that documents a

determination of eligibility. It is also the point at which performance

accountability information begins to be collected. Individuals who are

seeking information and who, therefore, do not require a significant

degree of staff assistance, do not need to be registered. Accordingly,

of the core services listed in the Act, only staff assisted services

such as individualized job search services, career counseling, and job

development will automatically require registration. Additional core

services offered at the discretion of the State and Local Boards, and

not listed in the Act, may or may not require registration, depending

on the degree of staff assistance involved, and other established local

policies. Participation in any intensive or training service, whether

those specifically listed in the Act, or another offered at the State

or Local Board's discretion, will always require registration.

In addition to the responsibility to register participants, EO data

must be collected on every individual who is interested in being

considered for WIA title I financially assisted aid, benefits,

services, or training by a recipient, and who has signified that

interest by submitting personal information in response to a request

from the recipient. See 29 CFR 37.4 (definition of ``applicant'') and

29 CFR 37.37(b)(2). The point at which such personal information should

be collected is within the recipient's discretion; however, the

recipient's request for and receipt of that information with regard to

a specific individual triggers the accompanying responsibility to

collect EO data at the same time. The EO data

must be maintained in a manner that allows the individuals from whom

the data was collected to be identified, and that ensure

confidentiality. This responsibility is separate from, and might not

arise at the same point in the process, as the registration

responsibility. We will issue further guidance on this data collection

requirement. Further, all requirements of WIA Section 188 and 29 CFR

part 37 must be followed during the registration and eligibility

determination process to ensure non-discrimination in the assessment

process.

Additional information needed to determine eligibility for

assistance other than Title I of WIA available at the One-Stop site may

also be determined at the same time. Program operators should determine

what information they need for cost allocation purposes and when they

can most efficiently collect it. Electronic records systems allow

information to be collected incrementally as higher levels of

assistance are provided.

One commenter felt that the rule at Sec. 663.105(b), which requires

registration for any service other than self-service or informational

activities, is in conflict with the goal of universal access.

Response: There has been confusion over the issue of precisely when

participants must be registered. For the core services listed in the

Act, only those core services that are not informational and for which

the participant requires significant staff-assistance, such as follow-

up services, individual job development, job clubs and screened

referrals, will require registration under title I of WIA. This

interpretation preserves the goal of universal access and makes the

services delivery process as customer-friendly as possible, consistent

with the legislative requirements of performance accountability. All

persons will have access to core employment-related information and

self-service tools without restrictions or additional eligibility

requirements. No change has been made to the Final Rule. Additional

information on the issue of registration under title I of WIA is

contained in Training and Employment Guidance Letter (TEGL) 7-99 which

can be accessed at www.usworkforce.org.

We received many comments expressing concern that there is no

mechanism in the regulations to ensure that unregistered individuals

receiving informational and self-help core services are benefitting

from those services. Two comments suggested that One-Stops should

either be required to track these individuals' outcomes or that the

Department itself engage in some sort of periodic tracking. Another

commenter questioned whether a State could collect this information

independent of a regulatory requirement to do so.

Response: While we have chosen not to require registration or

collection of outcomes information for those using only self-service or

informational activities, this does not preclude States and One-Stop

operators from collecting a variety of other information about service

use, customer outcomes consistent with rules governing confidentiality,

and/or customer satisfaction if they so choose. We strongly encourage

States and local areas to seek customer feedback regarding the quality

of services available, in order to further their continuous improvement

efforts. Finally, local areas may also choose to have less formal

tracking mechanisms which fall short of official registration,

including paper-based or electronic ``sign-in'' when individuals enter

the center. Realizing that some assessment of the value of these

services is important for determining what resources are devoted to

these types of activities we will convene a workgroup of Federal, State

and local representatives to discuss the issue of self-service measures

in the Fall of 2000. We anticipate that this workgroup will develop a

menu of optional self-service measures that States and local areas can

utilize.

We also received comments which argued that the existing data

collection requirements are too burdensome and should be limited. In

addressing the data collection requirements in the regulations, we have

attempted to strike a reasonable balance which satisfies our reporting

needs under WIA without over-burdening States and local areas. No

change has been made to the Final Rule in response to these comments.

We issued a Federal Register notice on WIA title I reporting

requirements on April 3, 2000. The purpose of the notice was to solicit

comments concerning the new management information and reporting system

including the WIA Standardized Record Data, the Quarterly Summary

Report and the Annual.

One commenter suggested that, in order to avoid redundancy,

individuals eligible for TAA, or NAFTA-TAA, or those referred from the

Worker Profiling and Reemployment Services initiative, should

automatically be eligible for dislocated worker services and should be

specifically included in Sec. 663.115 in the Final Rule.

Response: We agree that most workers certified as eligible for the

TAA and NAFTA-TAA programs will also meet the Act's definition of

dislocated workers. To determine dislocated worker eligibility, the

One-Stop operator must have sufficient information from which to make

that determination, and in States with common intake systems, no

further collection of registration information may be required in order

to determine eligibility. One of the key reforms of WIA is streamlining

customer services, and we would encourage local areas to examine

methods through which they can determine eligibility for multiple

programs at one time, through the coordination of One Stop Center

partner activities. We further recommend that TAA and NAFTA-TAA

certified workers who qualify as dislocated workers should also be

enrolled under Title I of WIA. By doing this, those TAA and NAFTA-TAA

workers who are determined to be in need of intensive, supportive or

training services would be able to receive any of these services that

cannot be provided under the TAA or NAFTA-TAA programs under Title I of

WIA. Procedures to govern these processes should be part of the MOU's

developed between WIA partners, in accordance with the dislocated

worker eligibility determination procedures described in

Sec. 663.115(b) of these regulations.

Acceptance of profiled and referred Unemployment Insurance (UI)

claimants as eligible dislocated workers is a decision to be made by

Governors and Local Boards consistent with the definition at WIA

Section 101(9). The policies and procedures established by Governors

and Local Boards may include a policy that the UI profiling methodology

and referral process meets the criteria in WIA Section 101(9). In such

instances, no further documentation would be needed to establish the

``unlikely to return'' criterion at WIA section 101(9)(A)(iii). Other

eligibility criteria could also be documented by the unemployment

compensation system through this process. Since acceptance of TAA,

NAFTA-TAA and UI profiling data to prove eligibility are matters for

State or local decision, no change has been made to the Final Rule.

One comment suggested that language be added to Sec. 663.105 in the

Final Rule permitting the use by One-Stops of intake application data

and other information collected by non-WIA funded providers for

registration and eligibility determination.

Response: We support the goal of developing common intake systems

that can be used across a variety of programs and which eliminate

redundancy of data collection and encourage States and local areas to

develop such systems. We

think that these activities are an essential part of the reforms

envisioned by WIA and the creation of the One-Stop system and can lead

to improved efficiency for program operators and better customer

service. One Stop partners must work cooperatively to develop

procedures, outlined in the MOU's, which will facilitate such

streamlining. At the Federal level we are working with other Federal

agencies to develop common definitions and data elements to facilitate

this process. Since the integration of intake systems is currently

permissible under the regulations as long as all necessary data is

collected, no change has been made in the Final Rule.

Another comment suggested State and Local Boards should be

prohibited from developing dislocated worker definitions that exclude

groups of workers based on their industry, occupation, or union

affiliation.

Response: In considering the procedures for determining

eligibility, we believe that need for services should be based on

individual circumstances, and that State and locally developed

definitions must be consistent with WIA section 101(9). There is no

language in that Section that we interpret as authorizing an

eligibility definition based on industry or union affiliation, thereby

allowing any exclusions based on the same. We strongly agree that

workers should not be prohibited from receiving services based on their

union affiliation. Blanket exclusions based on industry or occupation

are too general to accommodate individual needs and unique situations.

It should also be noted that the union representative as well as other

members of the Local Board have an opportunity to raise concerns

regarding consideration of such blanket eligibility decisions, through

the WIA ``sunshine provisions'' in sections 111 and 117 and described

in new Secs. 661.207 and 661.307, governing Board activity, and through

the required public comment process.

Many comments from the Vocational Rehabilitation system suggested

that eligibility for Vocational Rehabilitation services must remain a

distinct concept from eligibility determination for services under

Title I of WIA.

Response: While we acknowledge there are separate eligibility

criteria for the two programs, we see no need for additional regulatory

language on this issue. 20 CFR 662.280 clearly addresses this issue and

states that the eligibility requirements of each One-Stop partner's

program continue to apply. Additionally, the resources of each partner

may only be used to provide services that are authorized and provided

for under the partner's program, to individuals that are eligible under

such program. We encourage local One-Stops to maximize coordination

arrangements which promote convenient and accurate eligibility

determination for individuals with disabilities who may need Vocational

Rehabilitation services, while maintaining the integrity of the One-

Stop Center's integrated service strategy. One benefit of a closely

coordinated One-Stop system is increased administrative efficiency, as

well as more seamless service to the customer, through the use of

common intake systems. Moreover, we emphasize that under 29 CFR 37.7,

individuals with disabilities should be served through the same

channels as individuals without disabilities, receiving reasonable

accommodation as appropriate under 29 CFR 37.8.

Several commenters noted that, under Sec. 663.115, Governors and

Local Boards are allowed to develop policies and procedures for the

interpretation of the dislocated worker eligibility criteria, and asked

how disputes between these parties would be resolved.

Response: While we provide technical assistance on matters of

legislative and regulatory interpretation, we look to the State and

Local Boards to develop a process to avoid, and if necessary resolve

any disagreements. Under 20 CFR 661.120, local policies must be

consistent with established State policies, as well as the Act and the

regulations. Thus, while Local Boards may develop policies which

supplement State policies, they may not adopt policies which conflict

with State policies. No change has been made to the Final Rule.

One comment stated that dislocated worker programs serving union

members must consult the union in the design and implementation of

those programs.

Response: Unions are well-positioned to understand the needs of

their members and can be a valuable resource in the design of effective

dislocated worker programs. WIA requires that organized labor

participate in the development and design of available services to

dislocated workers, through their representation on State and Local

Boards. Additionally, the public, including the organized Labor

community, must have an opportunity to review and comment on the

proposed design of programs serving dislocated workers, as part of the

plan review and approval process. State and Local Boards are encouraged

to use input from all key stakeholders, including employees, their

representatives, and employers, and to work collaboratively with them

when designing services. It is up to the governance structure at the

Local level to set procedures to ensure this input is considered in

program planning. Accordingly, no change has been made to the Final

Rule.

One commenter requested that the regulations provide that where the

Local Board wishes to pursue training services not listed in the Act,

that such services must be identified in the Local Plan, and that a

review process that includes consultation with labor organizations

whose members have skills in the specific training being proposed by

the One-Stop operator, prior to funding such activities.

Response: The Act, at section 118(b), provides, among other things,

that the Local Plan identify the current and projected employment

opportunities in the local area, and the job skills necessary to obtain

such employment opportunities. Although the Act does not include

``formal'' consultation with labor organizations whose members have

skills like those in which training is proposed, such issues may be

addressed as part of the development of the Local Plan, and the public

plan review and approval process. Local Boards include representatives

of labor organizations who will participate in the development of the

Plan, and therefore in the design of training activities to be

conducted in the local area. Additionally, the Act, at section

118(b)(7), provides that the Local Plan include a public comment

process which includes an opportunity for representatives of labor

organizations to provide comments on the Plan, and input into the

development of the Local Plan, prior to its submission. In addition, 20

CFR 667.270 provides safeguards to ensure that participants in WIA

training activities do not displace other employees. No change to the

Final Rule is necessary.

Another commenter suggested that we amend the regulations to

require One-Stop operators to consult with the appropriate labor

organizations whose members have skills in the area in which the OJT or

customized training is proposed in the development of the training

contract. The comment does not limit this consultation to circumstances

where a collective bargaining agreement is in effect.

Response: WIA section 181(b)(2)(B) requires consultation, and

written concurrence of the labor organization and employer, where the

proposed training would impair an existing collective bargaining

agreement. It does not address consultation in other circumstances. We

believe, however,

that informal consultation with organized labor on the nature and scope

of proposed OJT or customized training can help to ensure its quality

and relevance. The labor representative(s) on the Local Board is in an

ideal position to establish policies about the consultation role of

organized labor and to help identify situations where appropriate labor

organizations should be consulted in the development of an OJT

contract. Accordingly, no change to the Final Rule is necessary.

One comment suggested that we define the term ``substantial

layoff,'' as found in WIA Section 101(9)(B)(i) and Sec. 663.115, to

include situations in which employers use layoff status to avoid their

WARN Act obligations to announce a plant closing or significant

permanent downsizing.

Response: The purpose of this comment is unclear. However, any

definition of the term ``substantial layoff'' for defining an eligible

dislocated worker under WIA section 101(9)(B)(i) is irrelevant to

employer obligations under the WARN Act. WIA provisions cannot be used

to enforce WARN Act employer notification obligations. We believe that

the definition of ``substantial layoff'' for WIA purposes is best left

to State and local areas to decide in light of their particular

economic conditions. We do not plan to further define ``substantial

layoff'' at this time.

The same commenter also suggested State and Local Boards be

encouraged to develop the broadest possible definition of a general

announcement of a plant closing, including information that is ``public

knowledge,'' despite the failure of the employer to acknowledge the

closing.

Response: Rapid response activity may be triggered by a variety of

information sources such as public announcements or press releases by

the employer or representatives of an employer, and other less formal

information developed by early warning networks, individual phone

calls, or other sources. A Rapid Response contact with an employer may

confirm a planned plant layoff or closing. ``Public knowledge'' is,

however, a very elusive concept and public funds are limited. It is

important to have a creditable source of information or confirmation

from the employer or some other clearly credible evidence of an

imminent dislocation event before triggering rapid response activities.

No change has been made to the Final Rule.

3. Displaced Homemaker Eligibility: Section 663.120 clarifies that

a displaced homemaker who has been dependent on the income of another

family member but is no longer supported by that income, is unemployed

or underemployed and is experiencing difficulty in obtaining or

upgrading employment, may receive assistance with funds available to

Local Boards for services to dislocated workers.

Several commenters recommended that we require State Plans to

further discuss the eligibility of displaced homemakers and the service

strategies for meeting this group's special needs.

Response: States are required to discuss displaced homemaker

service strategies as part of their State Plans (WIA Section

112(b)(17)(A)(iv)). This requirement is addressed in the WIA Planning

Guidance for Strategic Five Year State Plans. This requirement is also

addressed in, Final Unified Plan Guidance for the Workforce Investment

Act, published in the Federal Register Vol.65, No. 10 on January 14,

2000, which contains instructions for plan narrative discussions on how

special populations, including displaced homemakers, will be served.

Services to displaced homemakers are also addressed in 20 CFR

665.210(f), which provides that, among other things, implementing

innovative programs for displaced homemakers is an allowable Statewide

workforce investment activity. No changes have been made to the Final

Rule.

4. Title I Funds: Section 663.145 clarifies how title I adult and

dislocated worker funds are used to contribute to the provision of core

services, and to provide intensive and training services through the

One-Stop delivery system. All three types of services must be provided,

but the Local Boards determine the mix of the three services.

One commenter supported the requirement that all three types of

services, (core, intensive, and training), must be available through

the One-Stop delivery system, but wanted the regulations to limit the

provision of the ``discretionary'' services authorized under WIA

section 134(e)(1) to those that do not reduce the availability or

accessibility of other mandatory services to eligible participants

under the Act.

Response: While it is not entirely clear from the comment, we

assume that the commenter is referring only to those employment and

training activities labeled ``discretionary'' under WIA section

134(e)(1), and not to all ``permissible'' local activities under

section 134(e) of the Act. We agree that required activities for

eligible individuals take precedence over the permissible discretionary

activities described in Sec. 663.145(b), and that core, intensive and

training services, as defined in section 134(d)(2) through (4), must be

provided in each local area. However, to impose a hard and fast rule on

when each State or local area may provide discretionary activities,

reduces the flexibility of Boards to make more localized decisions,

which is contrary to the reforms of WIA. In the past, these kinds of

concerns were addressed through mandatory spending percentages for

various categories of services, such as the 50 percent for training

provision under the Job Training Partnership Act. The customized

screening and referral services listed in section 134(e)(1)(A) may

provide useful and necessary services to eligible participants and

could be very valuable in some labor markets. The customized employer

services listed in section 134(e)(1)(B) are to be provided on a fee-

for-service basis and should not result in any diminution of available

WIA funds. In either case, it is up to the States and Local Boards to

develop a mix of activities and services which will best serve the

customers of their area. The resources of all of the One-Stop partner

programs should be taken into account when determining the appropriate

mix of activities and services to be provided. Once a participant has

become part of the WIA system, she/he should be able to receive all the

services needed to reach an employment goal. We do not think it is

appropriate to attempt to set a rule that constrains the way in which

States and Local Boards provide that mix of services as long as

mandatory services are made available.

5. Sequence of Services: WIA provides for three levels of services:

core, intensive, and training, with service at one level being a

prerequisite to moving to the next level. The regulations establish the

concept of a tiered approach but allow significant flexibility at the

local level. We chose not to establish a minimum number of ``failed''

job applications or a minimum time period but, instead, the regulations

allow localities to establish gateway activities that lead from

participation in core to intensive and training services. Any core

service, such as an initial assessment or job search and placement

assistance, could be the gateway activity. In intensive services, the

gateway activity could be the development of an Individual Employment

Plan (IEP), individual counseling and career planning or another

intensive service. Key to these gateway activities is the

determination, made at the local level, that intensive or training

services are required for the participant to achieve the goal of

obtaining employment or, for employed participants, obtaining or

retaining self-sufficient employment. The three levels of services are

discussed separately in the regulations.

We received many comments concerning our general approach to

regulating participant progression through the sequence of services.

The commenters were uniformly pleased that the regulations did not

require a certain number of failed job search attempts or minimum

lengths of time in one service tier before an individual could be found

eligible for the next tier of services. Several commenters, however,

felt we should do even more to ensure that the Act is not interpreted

as a ``work first'' program. Some comments suggested that we should

preclude State and Local Boards from establishing minimum time periods

of participation in core and intensive services.

Response: While the regulations do not explicitly preclude State or

Local Boards from establishing minimum time periods within each tier of

services, we agree that mandatory waiting periods are not consistent

with customization of services according to each participant's unique

needs. Consistent with our intent to write regulations that maximize

State and local flexibility, however, we continue to support the idea

that local level program operators are best positioned to determine the

appropriate mix, and duration of services.

6. Core Services: Sections 663.150 to Sec. 663.165 discuss the core

services. All of the core services that are listed in the Act must be

made available in each local area through the One-Stop system. Follow-

up services must be available for a minimum of 12 months after

employment begins, to registered participants who are placed in

unsubsidized employment. We have made a technical correction to

Sec. 663.150, to conform with the statutory requirement that followup

services be made available ``as appropriate'' to the individual. This

means that the intensity of the followup services provided to

individuals may vary, depending upon the needs of the individual. Among

the core services available is information on targeted assistance

available through the One-Stop system for specific groups of workers,

such as Migrant and Seasonal Farm Workers, and veterans.

Core services also include assistance in establishing eligibility

for the Welfare-to-Work program, and programs of financial aid for

training and education programs. The specific form of this assistance

is determined at the local level based on the participant's needs and

in coordination with the other partner programs. This assistance may

include: referrals to specific agencies; information relating to, or

provision of, required applications or other forms; or specific on-site

assistance.

Another core service is the provision of information relating to

the availability of supportive services, including child care and

transportation available in the local area, and referral to such

services as appropriate. Local Boards are encouraged to establish

strong linkages with a variety of supportive service programs and work

supports, including child support, EITC, dependent care, housing, Food

Stamps, Medicaid programs, and the Children's Health Insurance Program,

that may benefit the customers they are serving at the One-Stop Center.

Such programs provide key supports for low-income working families and

families making the transition from welfare to self-sufficiency.

We also encourage Local Boards to establish strong linkages to

child support agencies and organizations serving fathers. WIA services

can help raise the employment and earnings of non-custodial fathers and

fathers living with their children so that they can better support

their children. Child support payments help low income single parents

stabilize and raise their income. At the same time, it is important for

One-Stop programs to be aware of the impact that child support

requirements may have on non-custodial parents who may seek services.

One commenter recommended that the provision of ``brokering

services,'' as presently performed by CBO's under JTPA be expressly

permitted under Part 663. These services include facilitating and

brokering relationships between low-income community residents, local

businesses, and specialized groups, as well as referrals to groups to

provide training and placement.

Response: While we agree that these brokering services are valuable

activities, decisions about program design, including the selection of

outreach, recruitment and referral activities, are within the purview

of the Local Board, operating within State policies. We expect that

Local Boards will consider a wide variety of services in designing

their WIA programs. We expect CBO's, as well as other stakeholders,

will be an integral part of program planning and design decisions

through their membership on the Local Board, their provision of input

through the public review process, and in many cases as customer

service providers. Accordingly, no change has been made to the Final

Rule.

Commenting on Sec. 663.150, one organization remarked on the

importance of ensuring that individuals seeking assistance through core

services be provided with opportunities for self-service, facilitated

self-help, and staff-assisted services.

Response: The service delivery options cited by the commenter are

activities specified in the Wagner-Peyser Act regulations at 20 CFR

652.207, to ensure universal access to Wagner-Peyser labor exchange

services for job seekers and employers. Although technically, these

three levels of service do not apply to core services provided with

funds other than Wagner-Peyser funds, practically, it makes sense to

have all three service levels available for all core services. Also, in

order to best serve the diverse needs of workforce investment

customers, both job seekers and employers, multiple service delivery

formats must be available. State and Local Plans are expected to

address WIA service delivery strategies. Local Plans should ensure that

the service delivery design reflects the needs of all customer groups

in the mix of self-service, informational and staff-assisted core

services. Since the issue is covered in the Wagner-Peyser regulations,

no change has been made to the Final Rule.

One commenter asked that the regulations provide a list of

available followup services which could be provided to all adults and

dislocated workers. The commenter also requested that the regulations

ensure that followup services are provided to all participants.

Response: The goal of follow-up services is to ensure job

retention, wage gains and career progress for participants who have

been referred to unsubsidized employment. While we do not think it is

necessary to specify or define followup services in Sec. 663.150(b), to

provide further guidance we discuss an illustrative list of possible

followup services below. Followup services must be made available for a

minimum of 12 months following the first day of employment. While

followup services must be made available, not all of the adults and

dislocated workers who are registered and placed into unsubsidized

employment will need or want such services. Also, as discussed above,

the intensity of appropriate followup services may vary among different

participants. Participants who have multiple employment barriers and

limited work histories may be in need of significant followup services

to ensure long-term success in the labor

market. Other participants may identify an area of weakness in the

training provided by WIA prior to placement that will affect their

ability to progress further in their occupation or to retain their

employment. Therefore, we have chosen not to change the regulatory

language that such services must be ``made available''.

Followup services could include, but are not limited to: additional

career planning and counseling; contact with the participant's

employer, including assistance with work-related problems that may

arise; peer support groups; information about additional educational

opportunities, and referral to supportive services available in the

community. In determining the need for post-placement services, there

may also be a review of the participant's need for supportive services

to meet the participant's employment goals. As provided in

Sec. 663.815, financial assistance, such as needs-related payments, for

employed participants is not an allowable follow-up service since,

under WIA section 134(e)(3)(A), needs-related payments are restricted

to unemployed persons who have exhausted or do not qualify for

unemployment compensation and who need the payments to participate in

training. We expect that the provision of training and supportive

services after entry into unsubsidized employment (``post-placement'')

will be limited, and will be part of the IEP, clearly documented in the

participant case file. Such post-placement training and supportive

services may be provided consistent with policies established by the

State or Local Board, and determined to be necessary on an individual

basis by the One Stop partner.

Several commenters noted there is no uniform understanding of

``assessment'' and that many One-Stop partners have different ideas of

what assessment should entail. Some comments also asked for examples or

additional guidance concerning best practices in this area.

Response: The purpose of assessment is to help individuals and

program staff make decisions about appropriate employment goals and to

develop effective service strategies for reaching those goals. We

strongly believe that meaningful service planning cannot occur in the

absence of effective assessment practices. We also believe there is no

single correct approach to conducting assessment--it could be

accomplished through the use of any number of formalized instruments,

through structured interviews, or through a combination of processes

developed at the local level. Further, assessments could be conducted

by the One-Stop operator, by a partner agency, or by an outside

organization on a contract basis.

Clarifying language has been added to the regulations at

Sec. 663.160 which states that initial assessment ``provides

preliminary information regarding the individual's skill levels,

aptitudes, interests, (re)employability and other needs.'' As a core

service, the initial assessment is necessarily a brief, preliminary

information gathering process that, among other things, will provide

sufficient information about an individual's basic literacy and

occupational skill levels to enable the One-Stop operator to make

appropriate referrals to services available through the One-Stop and

partner programs. Comprehensive assessment, which is an intensive

service, is a more detailed examination of these issues and may explore

any number of things relevant to the development of a person's IEP.

These might include some combination or all of the following:

educational attainment; employment history; more in-depth information

about basic literacy and occupational skill levels; interests;

aptitudes; family and financial situation; emotional and physical

health, including disabilities; attitudes toward work; motivation; and

supportive service needs. We expect that all partner agencies in the

One-Stop, under any applicable State policies, will work to achieve

consensus on the required components of the assessment system for the

One-Stop system at any local level. In doing so, they should take into

account any special assessment needs that may be experienced by

individuals with disabilities and other populations with multiple

barriers to employment. As we proceed with the implementation of WIA we

will consider gathering ``best practices'' on the delivery of

assessment services to share with the system.

One commenter suggested adding language to Sec. 663.160 mandating

that assessment and service strategies identified in IEPs conducted by

a non-WIA program, satisfy the conditions of WIA, thereby making

participants eligible for intensive and training services under the

Act.

Response: Because there are differences in the legal and program

requirements among the various programs that might provide assessments,

we do not think we can require that all assessments from any source be

accepted as valid for WIA. We do, however, support efforts to create

common intake systems and to share data across programs, thereby

eliminating duplication of effort for program staff or customers. We

also believe that assessments, evaluations, and service strategies

developed by partner agencies for individuals are the product of that

agency's unique expertise, and, therefore, should be given careful

consideration. We encourage Local Boards and partner agencies to

develop MOU's, with required and optional partners, that provide for

procedures to ensure that, where appropriate, partner assessments will

be accepted as valid for WIA, and WIA assessments will be accepted as

valid for partner programs. Of course, to be acceptable, an assessment,

from any source, must provide the information needed by the One-Stop

operator or the partner program. Local Boards and partner programs

should work together to develop assessment tools that will serve all

partner interests. If necessary for WIA purposes, the One-Stop operator

may choose to supplement assessment information provided from another

agency. Given the limited funding available, it is important to avoid

duplication of services. No changes have been made to the Final Rule in

this section.

Subpart B--Intensive Services

1. Intensive Services for Adults and Dislocated Workers: Section

663.200 discusses intensive services. It provides that intensive

services beyond those listed in the Act may also be provided. Out-of-

area job search expenses, relocation expenses, internships, and work

experience are specifically mentioned to clarify that they are among

the additional intensive services that may be provided. Intensive

services are intended to identify obstacles to employment through a

comprehensive assessment or individual employment plan in order to

determine specific services needed, such as counseling and career

planning, referrals to community services and, if appropriate,

referrals to training.

Several commenters supported Sec. 663.250 which provides that there

is no minimum amount of time for individuals to stay in core or

intensive services, stating that this approach maximizes local

flexibility and ensures that each person's needs are properly

addressed. In general, the comments received on subpart B related both

to expanding or limiting allowable intensive services, to listing

specific populations as among those potentially eligible for intensive

services, and to proposing definitions of ``self sufficiency.''

We received several comments on the definition of intensive

services at

Sec. 663.200(a). Two comments wanted nearly all of the specific

statutory language illustrating intensive services, at WIA Section

134(d)(3)(C), reiterated in this section. They also requested that

``orientation and mobility training for persons with disabilities'' be

added to the list of allowable intensive services. One commenter

recommended adding to the list of intensive services ``English as a

Second Language (ESL), Vocational Education integrated with ESL (VESL),

Functional Context Education Programs that integrate literacy or ESL

and job training.'' Another commenter asked that the Final Rule define

literacy to include reading and math literacy.

Response: Sec. 663.200(a) refers to the provisions at WIA Section

134(d)(3)(C) on the types of intensive services. The list of services

in this section is not intended to be all inclusive and may be expanded

by State Boards and Local Boards based on, among other things, local

conditions and the needs of the various populations within the local

area for such additional intensive services. Although the types of

services recommended by the commenters may have merit for certain

populations and would be permissible WIA-funded intensive services, we

believe that the determination of the specific types of intensive

services to be provided are matters for local decision-making and

should be an integral part of the State and Local Plan process.

Clearly, we expect State and Local Boards to consider the needs of the

local population, including individuals with disabilities and other

special needs populations, in the design and delivery of services which

respond to those needs. It is also expected that concerned parties will

have the opportunity to contribute to the planning and design of local

programs and services through either representation on the State and

Local Workforce Investment Boards or the open plan review and comment

process.

On the suggestion of including ESL, VESL and Functional Context

Education Programs that integrate literacy or ESL and job training as

intensive services, we note that WIA section 134(d)(4)(D), which

describes ``Training services,'' specifically includes adult education

and literacy activities provided in combination with other job skills

training. Such adult education and literacy training activities, when

combined with a job may include ESL, and other needed educational

services for participants, including reading and math literacy, as

determined by Local Board policies, and the individual assessment. As

indicated above, the list of intensive services is not all inclusive.

However, language skills independent of skills training would appear to

be of limited value in leading to (re)employability for individuals

without significant work histories and occupational skills. We expect

that basic language skills will be provided as a short-term

prevocational service when part of an Individual Employment Plan in

which such activities are followed by additional language skills

training as a ``training service,'' in accordance with procedures

established by the State or Local Board. Such determinations are for

State and local decision-making. No change has been made in the Final

Rule.

Several commenters expressed concern about the inclusion, at

Sec. 663.200(a), of internships and work experiences as intensive

services, rather than as training services. Some commenters were

concerned that participants could be exploited in unpaid work

experience and recommended that we establish time limits (e.g., not to

exceed 90 days) for such activities, and emphasize that labor standards

apply. One commenter thought that there may be a potential conflict

with Wage and Hour rules if work experience is in the private for-

profit sector and unpaid. Other commenters wanted to exclude work

experiences with private for-profit employers, limiting it to public

and private non-profit entities, and allow placement with private for-

profit employers only for on-the-job training (OJT), because of the

potential for abuse by employers that the commenter believes has

occurred in the past.

A few commenters indicated that since internships and work

experiences are designed to impart specific skill and behavioral

competencies they should be defined as ``training'' rather than

``intensive services.'' One comment suggested that, consistent with

prior JTPA provisions, work experience under WIA should be only for

those individuals with no significant work history. Another comment

asserted that, given the high cost of providing work experience,

participants could be best served by job readiness or some other

intensive service.

Two commenters indicated that internships and work experience must

be measured through outcomes, including training-related placements,

career ladders, and competencies. One of the commenters added that

these must be paid activities. One commenter recommended that the Final

Rule make clear that work experience could be with a public sector

employer, including a service or conservation corps.

Response: We understand the commenters' general concerns regarding

internships and work experience, particularly unpaid work experience.

We expect that work experience will be paid in most cases and labor

standards will apply in any situation where an employer/ employee

relationship, as defined by the Fair Labor Standards Act, exists. We

have revised Sec. 663.200(b) to clarify this policy.

We believe that the use of unpaid internships and work experiences

should be limited and based on a service strategy identified in an

Individual Employment Plan, and combined with other services. We expect

that such activities will be of limited duration, based on the needs of

the individual participant. State and Local Boards are responsible for

developing policies on the use, and duration, of both paid and unpaid

internships and work experiences as a service strategy. Similarly, we

expect that, along with other activities, State and Local Boards will

monitor and evaluate the effectiveness of intensive services, including

internships and work experience, in responding to the needs of

participants and the results on participant outcomes. While not

minimizing the commenters' concerns, there are good examples of local

programs using paid and unpaid work experience which respond to the

needs of participants, for example the School-to-Work Opportunities

initiative provided many young people the experience the needed to

secure higher paying, higher skilled employment.

On the issue of defining internships and work experience as

``training'' rather than ``intensive services,'' we believe that such

services may respond to the needs of particular clients which, when

combined with core services already received and other intensive

services, may result in positive employment outcomes without the need

for ``training'' services. For other clients, such experiences may

prove beneficial in identifying the need for, and referral to, needed

training services consistent with the Individual Employment Plan. No

change has been made in the Final Rule.

On the issue of limiting internships and work experience to the

public and private non-profit sectors, we feel that such a limitation

would unnecessarily restrict the employment opportunities for clients

seeking services and, to a degree, limit customer choice since the

majority of employment opportunities exist in the private for-profit

sector. Nothing in the rule prevents Local Boards from providing work

experience with community service or conservation

service corps programs. No change has been made to the Final Rule.

2. Delivery of Intensive Services: We received a few comments on

the provisions in Sec. 663.210 about how intensive services are to be

delivered. A few commenters wanted to revise Sec. 663.210(a) to address

special needs populations by adding at the end of the first sentence

``, including specialized One-Stop centers as authorized.,'' and, in

the second sentence inserting after ``service providers'' and before

``that''--``, which may include contracts with public, private for-

profit, and private non-profit service providers, and including

specialized service providers (i.e., community rehabilitation programs

for persons with disabilities).''

Response: Section 134(c)(3) of the Act authorizes specialized

centers as part of the One-Stop service delivery system. Language has

been added to Sec. 663.210(a) in the Final Rule to clarify that

intensive services may be provided through such specialized One-Stop

centers. Section 134(d)(3)(B)(ii) of the Act provides that intensive

services may be provided through contracts with service providers,

which may include contracts with public, private for-profit, and

private non-profit entities approved by the Local Board, and as noted,

language has been added in the Final Rule at Sec. 663.210(a) to reflect

the statutory provision on delivery of intensive services through

contracts with service providers, and have clarified that such service

providers may include specialized service providers. However, we have

not added the parenthetical phrase related to community rehabilitation

programs.

One commenter felt that the Final Rule must make clear that

intensive services cannot be provided through individual training

accounts or vouchers.

Response: We believe that the statutory and regulatory provisions

are sufficiently clear on how WIA-funded services are delivered to

participants. The Individual Training Account is a tool for providing

WIA title I funded training services under section 134(d)(4)(G). The

requirements for delivery of intensive services are described at WIA

section 134(d)(3)(B) and Sec. 663.210. Consistent with our policy of

providing flexibility to States and local areas, we believe the method

of delivery of intensive services is a matter of State and local

discretion, provided that the statutory and regulatory requirements are

met. Therefore, no change has been made to the Final Rule.

3. Participation in Intensive Services: Section 663.220 explains

that intensive services are provided to unemployed adults and

dislocated workers who are unable to obtain employment through core

services and require these services to obtain or retain employment, and

employed workers who need services to obtain or retain employment that

leads to self-sufficiency. Sections 663.240 through Sec. 663.250

specify that an individual must receive at least one intensive service,

such as the development of an Individual Employment Plan with a case

manager or individual counseling and career planning, before the

individual may receive training services and that there is no Federally

required minimum time for participation in intensive services. Each

person in intensive services should have a case management file, either

hard copy, electronic or both. Section 663.240 explains that the case

file must contain a determination of need for training services, as

identified through the intensive service received.

A number of commenters expressed concern that Sec. 663.220(a)

describes eligibility for unemployed individuals as simply requiring

that they are unable to obtain employment through core services while

Sec. 663.220(b) describes employed and/or dislocated workers as in need

of intensive services to obtain or retain employment that leads to

self-sufficiency. Commenters felt this appeared to set a double

standard and conflicted with the provisions of Titles II and IV of WIA

which clearly tie self-sufficiency to employment in all cases. The

commenters felt that these provisions might be interpreted to mean that

unemployed individuals may be put in jobs that do not lead to self-

sufficiency. Commenters recommended that the Final Rule provide that

States and Local Boards may set their own standards for employment,

e.g., using the Self-Sufficiency Standard for all job-seekers.

Response: We agree that the ultimate goal for all employment,

whether under WIA or any other program, should be self-sufficiency for

the job seeker. However, that is different from establishing

eligibility for adults and dislocated workers to receive intensive

services under WIA. The eligibility criteria set forth in Sec. 663.220

restates the statutory definition established in WIA section

134(d)(3)(A). The reference to employment leading to self-sufficiency

appears only in WIA section 134(d)(3)(A)(ii), governing the eligibility

of employed individuals to receive intensive services. A determination

that an employed or dislocated worker is in need of intensive services

to obtain or retain employment that allows for self-sufficiency is one

of the criteria for the receipt of such services. Although the statute

establishes slightly different eligibility criteria for unemployed and

employed adults and dislocated workers to receive intensive services,

we do not believe that there is a direct conflict with the provisions

of WIA Titles II and IV concerning self-sufficiency as it relates to

Adult Education and Literacy Programs and Vocational Rehabilitation

Programs, respectively.

While it is true that the difference in eligibility for intensive

services for unemployed and employed adults and dislocated workers

might be interpreted to mean that unemployed individuals can be put in

jobs which do not lead to self-sufficiency, we want to make clear that

the eligibility criterion is a service requirement and not an

employment outcome. Other provisions in WIA pertaining to wage and

benefit requirements, which appear at WIA section 181, labor standards,

at WIA section 181(b), employment in demand and growth occupations, at

WIA section 134(c)(4)(G)(iii), and employment in jobs with upward

mobility, at WIA section 195(1), to cite a few, all enhance

opportunities for employment which allows for self-sufficiency.

Additionally, the performance standard measures, at WIA section

136(b)(2)(A), will also be a spur to placing, and retaining,

participants in jobs with good, self-sufficient wages. As the

eligibility criteria are statutory requirements which the Secretary

does not have authority to change, no change has been made to the Final

Rule.

We agree with the suggestion the State and Local Boards be allowed

to set their own standards for employment, using the self-sufficiency

standard developed by the State or Local Boards for all employment.

There is nothing in the Act or Interim Final Rule that would preclude

such a policy as a goal for participant outcomes. Any such policy must

meet the minimum requirements in Sec. 663.230 for defining self-

sufficiency. While statutory language prevents us from mandating such a

policy, we do strongly recommend it. No change has been made to the

Final Rule.

One commenter suggested that leaving it solely to the One-Stop

operator to determine who is in need of more intensive or training

services could be problematic, particularly if the operator is a for-

profit entity which could financially benefit from limiting access to

intensive and training services.

Response: WIA contains provisions which address this commenter's

concerns. Section 121(d) of WIA provides that the Local Board, with the

agreement of the chief elected official

(CEO), is authorized to designate or certify One-Stop operators and to

terminate, for cause, the eligibility of such operators. The

eligibility provisions for One-Stop operators at WIA section

121(d)(2)(A) provide that such operators must be designated or

certified through a competitive process or through an agreement between

the Local Board and a consortium of entities that, at a minimum, must

include three or more of the One-Stop partners described at WIA section

121(b)(1). In addition, the One-Stop operators are subject to the

provisions of the local Memorandum of Understanding which must include,

among other things, methods for referral of individuals between the

One-Stop operator and the One-Stop partners, for the appropriate

services and activities. Potential problem areas may also be identified

through local program monitoring and oversight, requiring that action

be taken to correct identified deficiencies. Additionally, the

regulations, at 20 CFR 667.600, provide for the establishment of local

grievance procedures for handling complaints and grievances from

participants and other interested parties affected by the local

workforce investment system, including an opportunity for local level

appeal to the State. These and other provisions will help State and

Local Boards ensure the integrity of the new program. Accordingly, no

change has been made to the Final Rule.

We received a few comments about to the sequencing of intensive and

training services at Sec. 663.240.

One commenter supported the requirement that participants must

receive at least one intensive service such as development of

individual employment plan or individual counseling and career planning

before receiving training services. Another commenter wants an

Individual Employment Plan to be required for any worker seeking

intensive or training services.

Response: We agree that doing an Individual Employment Plan for

participants determined eligible for intensive services is a good idea,

and we recommend that an IEP be developed for every individual who uses

intensive or training services. However, the Act provides that the

development of an Individual Employment Plan is only one of the

intensive services that may be provided to individuals determined to be

in need of such services; it is not a condition to receive that

service. Accordingly, no change was made to the Final Rule.

One commenter acknowledged that the One-Stop partners, the Local

Board, and the CEO must participate in the development of policies for

eligibility beyond core services, but recommended that these policies

must also be available for public review and comment to assure fairness

in the selection process.

Response: We agree with the comment and believe that, although not

specifically required, such policies should be included in the Local

Plan and available for public review and comment. While we cannot

mandate their inclusion, we encourage Local Boards to include such a

policy in their local workforce investment plan development process. If

such policies are not included in the plan, their development, as an

activity of the Board, is subject to the sunshine provision at WIA

section 117(e) and new section 20 CFR 661.307. The sunshine provision

requires that the Board make information about its activities publicly

available through open meetings and minutes of meetings, on request.

These requirements also provide an opportunity for public input into

Local Board plans and policies. No changes have been made to the Final

Rule.

A few comments requested that a new sentence be added at the end

Sec. 663.220(b) to read: ``Persons with disabilities and other special

needs populations may also qualify for intensive services.''

Response: Eligibility for intensive services is open to all

unemployed adults and dislocated workers and all employed adults and

dislocated workers who meet the eligibility criteria and are determined

to be in need of such services. To single out specific populations in

the regulations would imply that there are different criteria for those

populations to receive intensive services, which is not the case.

Individuals with disabilities and other special needs populations may

as easily qualify for intensive services under the existing eligibility

criteria as any other person or group since the eligibility criteria

are based on need for the services. In addition, any barrier to

employment an individual may face (which may include a disability)

should be taken into account during the process of determining

eligibility for intensive services. We believe that the existing

language adequately addresses the statutory requirements, and is

consistent with the key principle to provide maximum flexibility to

States and local areas, that additional proscriptive language in

regulations is not needed.

4. Self-sufficiency: Section 663.230, discusses how ``self-

sufficiency'' should be determined. WIA requires a determination that

employed adults and dislocated workers need intensive or training

services to obtain or retain employment that allows for self-

sufficiency as a condition for providing those services. Recognizing

that there are different local conditions that should be considered in

this determination, the regulation provides maximum flexibility,

requiring only that self-sufficiency mean employment that pays at least

the lower living standard income level. State Boards or Local Boards

are empowered to set the criteria for determining whether employment

leads to self-sufficiency. Such factors as family size and local

economic conditions may be included in the criteria. It may often occur

that dislocated workers require a wage higher than the lower living

standard income level to maintain self-sufficiency. Therefore, the Rule

allows self-sufficiency for a dislocated worker to be defined in

relation to a percentage of the lay-off wage.

From our review of the comments received on Sec. 663.230, it

appears that there is some confusion with respect to the term ``self-

sufficiency'' and how it applies under WIA. A number of commenters are

clearly under the mistaken impression that the provisions of

Secs. 663.220(b) and 663.230 treat ``employment leading to self-

sufficiency'' as a performance outcome measure under WIA, which is not

the case. The commenters raised the point that the manner in which

self-sufficiency is defined could impact performance outcomes if

standards are set low in one area and higher in another. If such

measures will be used in comparisons across State and local lines,

setting higher standards for employment that leads to self-sufficiency

could negatively impact the outcomes achieved by the local system with

higher standards.

WIA section 136 establish the WIA performance accountability

system, including State and local performance measures intended to

assess the effectiveness of States and local areas in achieving

continuous improvement of WIA Title I-B funded workforce investment

activities. Although the core indicators of performance for WIA adult

and dislocated worker activities look at outcomes such as wage gain,

job retention and other factors in determining successful performance

of the programs; ``self-sufficiency'' is not one of the statutory core

indicators. Section 663.230 is not intended to imply that this is the

case.

Unlike predecessor employment and training programs, WIA opens up

employment and training services to

employed adults and dislocated workers. In doing so, the Act

establishes certain criteria that employed workers must meet in order

to receive services beyond core services. As indicated in our response

to the comments received on the ``Participation in Services'' sections,

the use of the term ``self-sufficiency'in Sec. 663.220(b) only applies

in the context of establishing eligibility for employed adults and

employed dislocated workers to receive intensive services under WIA. A

determination that an employed adult or dislocated worker is in need of

intensive services to obtain or retain employment that allows for self-

sufficiency is one of the criteria for the receipt of such services.

This provision serves as a ``limiter'' in determining service

eligibility for such employed workers, which helps ensure that

intensive services are provided to those employed adults or dislocated

workers most-in-need of such services, such as individuals employed in

low skill/low wage jobs and dislocated workers who may be working but

who have not achieved the wage replacement rate for self-sufficiency

defined by a State or Local Board for dislocated workers.

As indicated above, the regulations at Sec. 663.230 were developed

with the recognition that the ``self-sufficiency'' definition would

vary from State-to-State, and even from area-to-area within a State.

Therefore, the regulations provide that, for the purposes of

determining the eligibility of employed and dislocated workers for

intensive services, State and Local Boards are responsible for

establishing the criteria for determining whether employment leads to

self-sufficiency. Accordingly, the regulation provides maximum

flexibility, requiring only that self-sufficiency mean employment that

pays at least 100 percent of the lower living standard income level

(LLSIL).

In general, the majority of the comments received on Sec. 663.230

dealt with two areas: (1) recommendations on factors that should be

included in defining ``self-sufficiency,'' and (2) the need for a more

reliable measure of self-sufficiency than the LLSIL.

A few commenters asked why, since the LLSIL takes family size and

economic conditions into account, there was a need to require the use

of other factors in determining self-sufficiency. The commenters also

asked for clarification of the purpose of asking State and Local Boards

to set additional criteria for self-sufficiency, as well as the benefit

to a local system.

Response: Under JTPA, the LLSIL was used as one of the ceilings to

measure whether a participant was economically disadvantaged. Service

Delivery Areas had little discretion in setting local definitions

different from the statutory definition. Under WIA, in contrast, the

LLSIL is a floor to measure whether a job leads to self-sufficiency and

States and local areas have broad discretion to set a standard above

that floor. The Preamble to the Interim Final Rule clearly indicates

that factors such as family size and local economic conditions may be

included in criteria developed by a State or Local Board to define

self-sufficiency. The LLSIL also includes, and is adjusted using, these

and other factors. In acknowledging that conditions vary from place to

place, we have maintained maximum flexibility by allowing States and

Local Boards to determine what self-sufficiency means in their areas,

which may include other factors not included in determining the LLSIL.

As indicated above, State and Local Boards are responsible for

determining self-sufficiency and must develop criteria for making that

determination. The reason for authorizing the State and Local Boards to

develop criteria for making these determinations is that State and

Local Boards are best able to judge such factors as the cost of living

in a local area and the wages available in jobs in the local area.

Thus, they are best able to set a standard for self-sufficiency that

meet the needs of their local economy. The ``benefit'' to a local

system is the flexibility provided to develop such criteria, above the

established floor of the LLSIL, so that local conditions may be taken

into account. Therefore, no change has been made to the Final Rule.

A number of commenters stated that since the regulations use self-

sufficiency as a means to measure WIA success, it should be defined in

an individualized way. Further, data collection systems must be able to

account for higher living expenses experienced by persons with

disabilities in any determination of ``self-sufficiency''. One

commenter added that Federal and State work incentives used by people

with disabilities should not be viewed as lack of self-sufficiency.

Another commenter said that self-sufficiency must also include measures

for long-term success in the labor market.

One commenter noted that the regulations say that self-sufficiency

for employed dislocated workers may be defined relative to a percentage

of the layoff wage, and suggested specifying in the Final Rule that for

displaced homemakers, self-sufficiency may be defined as a percentage

of household income before displacement. One commenter indicated that

the definition for self-sufficiency must include discrete measures for

benefits, particularly health benefits. Also, the commenter suggested

that we provide guidance and technical assistance to State and Local

Boards to help them develop measures of self-sufficiency that are tied

to family wage/benefit levels needed to live in local communities.

Response: The regulations provide that State and Local Boards have

the responsibility for developing the criteria for determining whether

employment leads to self-sufficiency. With the exception of

establishing the minimum LLSIL requirement for such criteria, we have

refrained from establishing further criteria in the regulations to

provide maximum flexibility to State and Local Boards in developing

such criteria. That flexibility includes tailoring definitions of self

sufficiency to meet factors peculiar to an individual or group. The

State and Local Boards are in the best position to develop criteria

which reflect local economic conditions and other factors impacting on

the financial needs of the populations to be served, in defining self-

sufficiency for determining eligibility for intensive services.

Although the factors suggested by the commenters may have merit, and

serve as examples that Boards might consider, the development of such

criteria is subject to local decision-making and should be explored at

that level. We do, however, expect State and Local Boards to consider,

among other things, the needs of individuals with disabilities, and

other special needs populations with multiple barriers to employment,

in the development of such criteria. We have modified Sec. 663.230 to

reflect this expectation.

One commenter stated that the regulations must require Local Boards

to consult with organized labor and community based organizations in

the development of self-sufficiency measures, and wants the process for

establishing and updating self-sufficiency measures included in the

plan as well as all plan modifications.

Response: Organized labor and community-based organizations will

participate in the development of self-sufficiency measures by virtue

of their representation on State and Local Boards, along with other

representatives and local partners on the board. As with other policies

and procedures not specifically addressed in the Local Plan

requirements at WIA section 118, we believe that, although not

specifically required, such self-sufficiency policies should be

included in the Local Plan and available for public review and comment.

While we cannot mandate

inclusion, we encourage the Local Boards to include such a policy in

their plan development process. If such policies are not included in

the plan, they are, their development, as an activity of the Board, is

subject to the Sunshine Provision at WIA section 117(e) and new section

20 CFR 661.307.

One commenter, while appreciative that self-sufficiency as it

relates to intensive services is set at the lower living standard

income level, added that research has shown that a ``true'' standard

for self-sufficiency should be even higher, at 150 percent of the lower

living standard. The comment concluded that this level has a potential

for setting a high bar for measuring success under WIA--sending a

signal that the system has not succeeded when individuals end up in

minimum wage jobs. The commenter urged that the regulations require

that the Local Plans spell out how the local areas will define self-

sufficiency, so that it may be subject to public comment and review.

Another commenter felt that the LLSIL is not a reliable measure of

self-sufficiency, and recommended that the Bureau of Labor Statistics

(BLS) develop a new LLSIL that reflects the costs of self-sufficiency

for today's families, including the cost of child care. Until such a

measure is developed it was recommend that the self-sufficiency floor

be set at 150% of the LLSIL.

Response: As indicated earlier, ``self-sufficiency'' is an

eligibility criterion for the determination of need for intensive

services for employed workers. Also, the regulations set the floor for

self-sufficiency at employment that pay at least 100 percent of the

LLSIL. State and Local Boards may adjust the level upward in defining

employment that leads to self-sufficiency, based on, among other

things, local conditions and the needs of the populations to be served.

Our intent in drafting Sec. 663.230 was to give State and Local Boards

maximum flexibility to define ``self-sufficiency''. As indicated above,

we intended to use the LLSIL as a floor below which Boards cannot go in

their definition. We agree with the commenters that there are good

arguments that the ``real'' measure of self-sufficiency will be above

the LLSIL in most areas, sometimes significantly above it. We think

that one of the important purposes of the workforce investment system

is to help customers find jobs that will support them and their

families. We expect that State or local definitions will reflect this

reality and this purpose. We do not, however, wish to constrain State

and local discretion too far. Neither can we reasonably select a higher

floor that we can be sure will cover all of the variety of economic

conditions that exist in this diverse nation. Therefore, no change has

been made to the Final Rule.

One commenter wanted to know what action we will take if the State

Board and the Local Board decide to set different criteria for self-

sufficiency and they do not agree?

Response: It is entirely possible that self-sufficiency measures

developed by a State Board and a Local Board may, in some respects,

differ depending upon local conditions and other factors that may not

be present in other areas within the State. The regulations provide

maximum flexibility to State and Local Boards to address this issue. It

is also possible that the State board might establish some general

guidelines for use by Local Boards in developing such measures, with

latitude for the Local Boards to tailor the measures to their local

needs. However, since Local Boards must comply with the State policies,

State Boards are encouraged to adopt policies that Local Boards can

adapt. We do not anticipate that this will be a problem area, however,

if it does become one, we are available to provide technical assistance

upon request.

One commenter felt that using the minimum requirement of the LLSIL

will result in various definitions for different individuals, depending

on the size of the family, and suggested it is more reasonable to use a

percentage of the area's average annual income.

Response: We agree that the LLSIL is based on family size and will

result in different income levels for individuals, depending on family

size. The LLSIL is adjusted for regional, metropolitan, urban, and

rural differences and family size. The use of a single measure as

suggested would be an insufficient measure of self-sufficiency because

it would exclude other factors that impact on such a determination,

most importantly family size. We encourage State and Local Boards to

adopt definitions which reasonably reflects local economic conditions

and family needs, and made no change to the Final Rule.

One commenter would like the definition of low-income to be changed

to 100 percent of LLSIL, rather than 70 percent.

Response: The term ``low income individual'' is statutorily defined

at WIA section 101(25). We do not have authority to change this

statutory provision. However, Sec. 663.230 provides that, at a minimum,

self-sufficiency is at least 100 percent of LLSIL for determining if

employed adults and dislocated workers need intensive services. No

change has been made to the Final Rule.

We received comments on the definition of an Individual Employment

Plan at Sec. 663.245. One commenter recommended inserting, ``including

support services'' between the words ``appropriate combination of

services'' and ``for'' in order to ensure that the potential need for

supportive services is discussed and that appropriate information,

supportive services and referrals for services are provided. Another

commenter suggested replacing the word ``strategy'' with ``process'' to

convey a more interactive mode between case manager and client.

Response: Section 663.245, defining the Individual Employment Plan,

provides that these plans will identify the appropriate combination of

services for the participants to achieve their employment goals. The

``appropriate combination of services'' would, by definition, include

supportive services if determined appropriate, based on the need of the

individual participant. To single out a specific service in the

regulations would imply that the service is a plan element in all

cases, which is not the necessarily the case. A determination on the

need for services, and the appropriate service mix to respond to those

needs, are made at the local level on a case-by-case basis. On the

suggestion to replace ``strategy'' with ``process,'' while not wanting

to appear to quibble over the choice of words, we feel that, in this

case, the former is the more proactive word and conveys the idea of a

well planned approach for individual employment goals worked out in an

interactive way by the case manager and the participant, as envisioned

under WIA. No changes have been made to the Final Rule.

One commenter felt that the employment goals should include earning

a self-sufficiency wage. States should be encouraged to pursue

innovative strategies to meet that goal, as provided for in the Act,

including access to training and employment in nontraditional fields

for women, entrepreneurship training and asset-building instruction and

guidance.

Response: As indicated earlier, we think that self-sufficient

employment is an important goal for all employment whether under WIA or

any other program. The workforce investment system contemplated under

WIA encourages State and Local Boards to develop innovative approaches

in the design and delivery of services which respond to the needs of

all job seekers, including those suggested by the commenter. The Act,

however, only requires a determination that

employment leads to self-sufficiency when deciding whether an employed

adult or dislocated worker is eligible for intensive or training

services and we do not think we can require it as a precondition to all

employment. Therefore, no change has been made to the Final Rule.

Some comments addressed Sec. 663.250, which provides that there is

no minimum length of time a participant must spend in intensive

services.

One commenter recommended that, even though Sec. 663.250 places no

minimum time limit for participation in intensive services before

receiving training services, local One-Stop systems be urged to provide

sufficient intensive services to ensure that individuals are well

prepared for training and long term employment opportunities. Another

commenter said that States and Local Boards must be precluded from

establishing minimum and maximum time periods for participation in

intensive services.

Response: Section 663.250 recognizes that the duration of intensive

services will vary among individual participants. State and Local

Boards have the flexibility to develop policies on the delivery of

intensive services, which may include limits on the duration of

particular services, depending on the types of services provided and

the needs of the participant. We expect that the time spent in

intensive services will be sufficient for the participant to receive

needed services, consistent with employment goals, and have modified

Sec. 663.250 to reflect that expectation. We have not made a change in

the regulations in response to the comment suggesting we preclude

States or Local Boards from establishing minimum and maximum time

periods for participation in intensive services, since we want to

ensure State and local flexibility in this important area.

A commenter recommended that States be required to establish

measures for determining the ongoing effectiveness of intensive

services to assure that participants receive the maximum benefit.

Response: Under WIA sections 111 and 117, State and Local Boards

are required to monitor and evaluate the effectiveness of the WIA

program and we expect this to include monitoring the effectiveness of

intensive services to respond to the needs of participants and to

produce good participant outcomes. Additionally, the State, in

accordance with WIA section 136(e), must conduct ongoing evaluation

studies of Statewide title I-B workforce investment activities. Such

studies are intended to promote, establish, implement and utilize

methods for continuously improving such activities in order to achieve

high-level performance within, and high-level outcomes from, the

statewide workforce investment system. The State is required to

periodically prepare and submit reports of the evaluation studies to

State and Local Boards to promote efficiency and effectiveness of the

statewide system in improving the employability for job seekers and

competitiveness for employers. We think that these requirements meet

the intent of the commenter's request. No change has been made to the

Final Rule.

Subpart C--Training Services

1. Training Services: Training services are discussed in

Secs. 663.300 and 663.320. Training services are designed to equip

individuals to enter the workforce and retain employment. Under JTPA, a

dislocated worker participating in training under title III of JTPA is

deemed to be in training with the approval of the State Unemployment

Compensation Agency. With such approval, unemployment compensation

cannot be denied to the individual solely on the basis that the

individual is not available for work because he or she is in training.

Although there is no comparable provision in WIA, this JTPA provision

will remain in effect during the transition period under the

Secretary's authority to guide that transition from JTPA to WIA. We

will seek an amendment adding similar language to WIA which would deem

all adults participating in training under title I of WIA to be in

approved training for the purposes of unemployment compensation

qualification.

One commenter asked that we clarify in the Final Rule that, under

WIA, training may be provided to both employed and incumbent workers.

Response: While this statement is true on its face, we believe

there is confusion within the workforce development community about the

distinctions between ``employed'' and ``incumbent'' workers. The State

Board defines the term incumbent worker since incumbent worker training

is an allowable statewide activity under WIA section

134(a)(3)(A)(iv)(I). Funding for incumbent worker training must be

drawn from the State's combined adult, youth, and dislocated worker

``15-percent funds.'' As provided at 20 CFR 665.320(d)(2), the State

may also use a portion of its dislocated worker ``25-percent rapid

response funds'' to devise and oversee strategies for incumbent worker

training. These latter funds, however, may not be used to directly fund

the incumbent worker training itself. These individuals do not

necessarily have to meet the eligibility criteria for dislocated

workers contained at section 101(9) of the Act nor do they have to meet

the criteria for employed adults and dislocated workers under WIA

section 134(d)(4)(A).

``Employed'' adults and dislocated workers may also receive

training services through the One-Stop system under WIA when certain

conditions are met. These individuals must meet the statutory

definition of an eligible adult or dislocated worker and, to receive

intensive services, and ultimately training, an employed individual

must be determined by a One-Stop operator to be in need of such

services to obtain or retain employment that leads to self-sufficiency.

Funding for these activities comes from the ``formula'' funds provided

to the Workforce Investment Area.

One commenter felt that, in order to protect participants, any

training service that a Local Board offers that is in addition to those

listed in the Act must be identified in the Local Plan so that there

can be public review and comment. Similarly, any additional training

services that are offered after the approval of the Local Plan must

also be subject to public review and comment.

Response: We agree with the comment and believe that, although not

specifically required, the training services that the Local Board

intends to offer should be included in the Local Plan and available for

public review and comment. While inclusion is not mandated, we

encourage the Local Boards to include such information in their plan

development process. This allows the Local Board to communicate its

vision and its proposed priorities in the delivery of services, and

ensures that all interested parties have an opportunity to review and

comment on those proposed policies. We also agree with the comment that

the plan should contain policies concerning plan modifications,

including a definition of ``substantive change,'' and provide that when

such changes occur there should be a similar process allowing for

public review and comment. As indicated in earlier discussions on Local

Plan requirements, if such policies are not included in the plan, they

are, as an activity of the Board, subject to the sunshine provision at

WIA section 117(e) and new Sec. 661.307 and must be developed in an

open manner. No change has been made to the Final Rule.

Two commenters suggested that the regulations should list non-

traditional job training, including entrepreneurial training, asset

building, financial literacy training, micro enterprise

development, and vocational English as a Second Language training, as

well as other kinds of training services not specifically listed in the

Act.

Response: We support the provision of a wide variety of training

services for eligible customers of the workforce development system,

including all those mentioned by the commenter. As noted in the

regulations at Sec. 663.300, the list of training services in the Act

is not all-inclusive and additional services may be provided. We

believe that this language provides State and Local Boards the

flexibility necessary to offer training services appropriate to their

particular needs, without prescribing to the Local Boards what those

services should be. Accordingly, no change has been made in the Final

Rule.

2. Determining the Need for Training: Section 663.310 provides,

among other things, that the One-Stop operator or partner determines

the need for training based on an individual (1) meeting the

eligibility requirements for intensive services; (2) being unable to

obtain or retain employment through such services; and (3) being

determined after an interview, evaluation or assessment to be in need

of training. Section 663.310 requires that, to receive training, an

individual must select a program of services directly linked to

occupations in demand in the area, based on information provided by the

One-Stop operator or partner. If individuals are willing to relocate,

they may receive training in occupations in demand in another area.

We received numerous comments about the impact of training

eligibility criteria on individuals with disabilities. The commenters

were concerned about the requirement that eligible individuals must be

found to have the skills and qualifications to successfully participate

in the selected program of training services. Commenters felt that this

could limit the opportunities available for disabled persons.

Response: While we are sensitive to these concerns, we must point

out that this criterion is taken directly from the Act at section

134(d)(4)(ii), and is, therefore, a required element for all One-Stop

operators making training eligibility decisions. This criterion applies

only to training funded by WIA title I and not to training funded by

other WIA partners. We believe all training eligibility decisions

should be made on the basis of each individual's skills, abilities,

interests, and needs. It would, of course, be inappropriate to enroll

any individual, whether or not they are disabled, into training

programs for which they did not have the skills to be successful. We

also recognize that care must be taken not to stereotype persons with

barriers to employment, including disabilities, when evaluating their

skills, abilities, interests, and needs. Occasionally, some question

may arise as to whether a particular individual--such as a person with

disabilities--has the capacity to be successful in a given training

program, taking into consideration the availability of reasonable

accommodation or modification under 29 CFR 37.8. An advantage of the

One-Stop service delivery structure is that partner agencies with

specialized expertise will be available, when necessary, to assist with

determinations as to what training may fall within a particular

individual's skills and qualifications. We encourage One-Stop operators

and staff to take advantage of the unique expertise of these partners

when serving individuals with special needs. We also note that

individuals with a disability, or any others, who feel they have been

improperly assessed by One-Stop staff regarding their skills and

qualifications may appeal the decision using the appropriate local

grievance or complaints procedures established in accordance with WIA

section 181(c) and 20 CFR 667.700. No change has been made to the Final

Rule. An individual who feels that he or she has been discriminated

against because of his or her disability may file a complaint in

accordance with procedures for processing discrimination complaints, as

set forth in 29 CFR 37.70 through 37.80.

One comment suggested that Sec. 663.310 was not sufficiently

specific in linking training services to occupations in demand, as

required by the Act.

Response: The language used in the rule at Sec. 663.310(c) is

essentially the same as that found in the Act at

section134(d)(4)(A)(iii). Section 134(d)(4)(A)(iii), discussing

eligibility for training uses the phrase ``directly linked to the

employment opportunities in the local area or in another area. . . .''

In contrast, section 134(d)(4)(G)(iii), dealing with ITA's uses a

slightly different phrase, ``directly linked to occupations that are in

demand in the local area. . . .'' We assume that when Congress uses

different language, it means different things. In this case, we think

that the differences in phrasing mean that a person may be eligible to

receive training if she/he seeks training in an occupation in which

there are jobs available in the local area or in another local area to

which the person is willing to relocate. On the other hand, training

may not be financed through an ITA unless the training sought is in an

occupation in demand in the local area or in an area to which the

participant is willing to relocate. Thus, if a participant is found

eligible for training because he/she seeks training in an occupation in

which there are employment opportunities available but which is not

classified by the local area as an occupation in demand, the training

can only be provided if it can be arranged through one of the three

exceptions to ITA's. While it is possible that individual may not be

able to receive WIA-funded training because of this distinction, we

think that there will not be many cases where this occurs. Since

Sec. 663.310 correctly reflects the statutory language, no change has

been made to the Final rule. We do, however, encourage State and Local

Boards to consider a range of approaches for identifying ``employment

opportunities in the local area,'' including allowing participants to

demonstrate employer-identified job opportunities.

We received a number of comments about the effects of the

requirement that training programs selected must be directly linked to

demand occupations in the local area, or in another area to which the

individual is willing to relocate, on individual with disabilities.

Commenters felt that this could restrict persons with disabilities from

participating in the title I program and suggested granting a waiver of

the requirement in appropriate cases.

We think that the commenters' concerns about the occupations in

demand requirement are misplaced. As discussed above, the requirement

for training eligibility is that the training must be linked to an

employment opportunity available in the local community or in a place

to which the participant is willing to relocate. The phrase on which

the commenters focus, the occupations in demand requirement, is an

eligibility condition for receipt of an ITA. Thus, a participant may be

eligible for and receive training in any occupation (job) that is

available to the participant. If the job is not in an occupation in

demand, the participant may not be able to have the training funded

through an ITA, but may still receive the training through one of the

exceptions to ITA's, for example, through contracted training provided

by a CBO with demonstrated effectiveness in serving populations with

special needs. No change has been made to the regulations.

There were several other more general comments about the criteria

governing training eligibility. One commenter urged that training

services be linked with employment opportunities in high wage/high

skill demand occupations that provide career and upgrade opportunities.

Response: We agree that this is a worthy goal, and one which

promotes employment opportunities leading to economic self-sufficiency.

However, in order to ensure that State and Local Boards retain maximum

flexibility to establish training policies that best meet their unique

needs and circumstances, we have refrained from including additional

regulatory requirements. The regulations do contain other provisions

that impact on this issue. The provisions on performance

accountability, at 20 CFR 666.100, include measures on, among other

things, job retention, wage gains and credentialing which may serve as

an incentive to stress training in high wage and high skill demand

occupations. No change has been made in the Final Rule.

Similarly, another comment suggested that Sec. 663.310(c) be

modified to clarify that training should only be for employment

opportunities ``that provide a self-sufficiency wage.'' We agree, in

concept, that the ultimate goal for all employment, whether under WIA

or any other program, should be self-sufficiency for the job seeker. We

expect that State and Local Boards will consider a wide range of issues

including training for jobs that allow participants the opportunity to

attain self-sufficiency. Section 663.310, as written, is essentially a

recitation of the Act's training eligibility provisions. No change has

been made to the Final Rule.

One comment suggested that the One-Stop partners, the Local Board,

and the chief elected official must participate in the development of

training eligibility policies, and that those policies must also be

made available for public review and comment to assure fairness in the

selection process.

Response: We agree that the Local Board, which must include

representatives of the One-Stop partner agencies, is the entity

responsible for making policy at the local level. We also believe that,

although not specifically required, such policies should be included in

the Local Plan and available for public review and comment. We

encourage the Local Boards to include such a policy in their plan

development process. If such policies are not included in the plan,

their development, as an activity of the Board, is subject to the

sunshine provision at WIA section 117(e) and new section 20 CFR

661.307. No change has been made to the Final Rule.

Another commenter suggested that Title I of the Act ``radically''

and ``bureaucratically'' restricts access to job skills training, and

believed that the regulations require unemployed individuals to accept

any job available, regardless of whether that job enables the

participant to rise above the poverty level or not.

Response: We strongly disagree that the regulations require the

result suggested by the commenter. The intent is not to require

unemployed individuals to accept just any job. As we have stated above,

in responding to comments on eligibility for intensive services, the

different eligibility criteria for unemployed adults or dislocated

workers should in no way be construed to allow participants to be

placed in jobs that do not provide the opportunity for participants to

attain self-sufficiency. The regulations clearly state there are no

federally imposed minimum waiting periods before participants can

progress to the next tier of services. Neither is there a federally

imposed minimum number of failed job searches to demonstrate

eligibility for the next tier of services. Rather, the regulations

reflect our position that decisions regarding which services to

provide, and the timing of their delivery, are best made on a case-by-

case basis at the local level. Finally, we again note that neither the

Act nor the federal regulations mandate a ``work first'' system that

forces individuals into the first-available employment, regardless of

whether or not that employment leads to self-sufficiency. No change has

been made to the Final Rule.

3. Requirements When Other Grant Assistance is Available to

Participants: Section 663.320 implements the requirements of WIA

section 134(d)(4)(B), which limit the use of WIA funds for training

services to instances when there is no or insufficient grant assistance

from other sources available to pay for those costs. The statute

specifically requires that funds not be used to pay for the costs of

training when Pell Grant funds or grant assistance from other sources

are available to pay those costs. Section 663.320 is intended to give

effect to this WIA requirement and still give effect to title IV of the

Higher Education Act (HEA), as amended (20 U.S.C. 1087uu), which

prohibits taking into account either a Pell Grant or other Federal

student financial assistance when determining an individual's

eligibility for, or the amount of, any other Federal funding assistance

program.

Section 134(d)(4)(B) of WIA requires the coordination of training

costs with funds available under other Federal programs. To avoid

duplicate payment of costs when an individual is eligible for both WIA

and other assistance, including a Pell Grant, Sec. 663.320(b) requires

that program operators and training providers coordinate by entering

into arrangements with the entities administering the alternate sources

of funds, including eligible providers administering Pell Grants. These

entities should consider all available sources of funds, excluding

loans, in determining an individual's overall need for WIA funds. The

exact mix of funds should be determined based on the availability of

funding for either training costs or supportive services, with the goal

of ensuring that the costs of the training program the participant

selects are fully paid and that necessary supportive services are

available so that the training can be completed successfully. This

determination should focus on the needs of the participant; simply

reducing the amount of WIA funds by the amount of Pell Grant funds is

not permitted. Participation in a training program funded under WIA may

not be conditioned on applying for or using a loan to help finance

training costs.

With such coordination and arrangements, the WIA counselor is

likely to know the amount of WIA funds available to the WIA participant

when calculating the amount of financial assistance needed for the

participant to complete the training program successfully. The WIA

counselor needs to work with the WIA participant to calculate the total

funding resources available as well as to assess the full ``education

and education related costs'' (training and supportive services costs)

incurred if the participant is to complete the chosen program. This

also ensures both that duplicate payments of training costs are not

made and that the amount of WIA funded training is not reduced by the

amount of Federal student financial assistance in violation of 20

U.S.C. 1087uu.

It is important to note that the Pell Grant is not school-based;

rather, it is a portable grant for which preliminary eligibility can,

and should, be determined before the participant enrolls in a

particular school or training program. The Free Application for Student

Aid (FASA), which is used to establish Pell Grant eligibility, should

be readily available at all One-Stop centers for assistance in the

completion of these ``gateway'' financial aid applications.

Section 663.320(c) implements the requirements of WIA section

134(d)(4)(B)(ii). This section permits a WIA participant to enroll in a

training program with WIA funds while an application for Pell Grant

funds is pending, but requires that the local

workforce investment area be reimbursed for the amount of the Pell

Grant used for training if the application is approved. Since Pell

Grants are intended to provide for both tuition and other education-

related costs, the Rule also clarifies that only the portion provided

for tuition is subject to reimbursement.

In the limited cases where contracts are used rather than ITA's,

the contracts negotiated by the One-Stop center must prohibit training

institutions or organizations from holding the student liable for

outstanding charges. Otherwise, the performance agreements would be

undercut because the incentive for the institution or organization to

perform would be removed. Also, the practice of withholding Pell Grants

from students is prohibited by the U.S. Department of Education.

We received a few comments on Pell Grant issues. One commenter

stated that WIA section 134(d)(4)(B) does not require disbursement from

that portion of Pell paid to WIA participants for education-related

expenses. The commenter recommended that, although the issue was

discussed in the preamble to the Interim Final Rule, the rule should be

modified to state that the training provider must reimburse only for

``tuition portion'' of the Pell grant. The commenter also raised the

issue of the need for reimbursement arrangements for WIA funds used to

``underwrite the training'' with training provider while Pell funding

is pending. The commenter also requested clarification on whether

tuition costs include or exclude specifically required fees for lab,

supplies and other fees. Another commenter noted that the regulations

appear to assign the One-Stop operator the responsibility for making

arrangements with training providers to process reimbursements when WIA

participants enroll in training while their application for a Pell

Grant is pending. This precludes the other One-Stop partners from

having this responsibility. The commenter recommended that we replace

all references in the regulations that assign specific responsibilities

to the One-Stop operator with language that allows for flexibility.

Response: We will continue to work with the U.S. Department of

Education to address the coordination of Pell grant assistance with WIA

title I funded training assistance. We will provide additional guidance

to the WIA Workforce Development System through administrative

issuance. We are also pursuing a legislative amendment to make clear

the order of payment for training costs for individuals eligible for

both WIA activities and Pell Grant educational assistance. In the

meantime, we have adopted the changes suggested by the commenters.

Subpart D--Individual Training Accounts

1. Definition of an Individual Training Account: Sections 663.400

through 663.430 contain information about Individual Training Accounts

(ITA's). A key reform tenet of the Workforce Investment Act is that

adults and dislocated workers who have been determined to need training

may access training with an Individual Training Account which enables

them to choose among available training providers, thus bringing market

forces into federally funded training programs. Section 663.410

provides a definition for an ITA that seeks to provide maximum

flexibility to State and local program operators in managing ITA's.

These regulations do not establish the procedures for making payments,

restrictions on the duration or amounts, or policies regarding

exceptions to the limits of the ITA, rather they provide that authority

to the State or Local Boards.

One commenter felt that the accountability requirements in the Act

and regulations deny States and Local Boards the flexibility needed to

ensure that individuals have enough financial power over their use of

ITA's, but believes that this is a necessary result of the

accountability requirements of the Act and regulations. The commenter

suggested that, to accomplish the desired flexibility, Congress and the

Department must lower performance and accountability expectations.

Response: We believe the performance and accountability

expectations of the Act must be balanced against the flexibility

provided to the State and Local Boards to design their ITA programs.

The performance and cost information that training providers must

submit to be identified as an eligible provider of training services

under WIA section 122, combined with the negotiated local area

performance measures, are essential for ensuring high quality

individual and program-wide outcomes. Within this structure, we have

attempted to give State and Local Boards the maximum possible

discretion to develop ITA programs. No change has been made to the

Final Rule.

Procedures for making payments--State and Local Boards have the

authority to establish procedures for making payments for ITA's funded

under WIA section 134(d)(4)(g) and Sec. 663.410. There were a number of

comments about the nature of payments to training providers under

ITA's. Two commenters suggested that the regulations explicitly state

that payments to community colleges for a training program or program

segment must be made under the same terms that the colleges require of

other students, rather than incrementally. Other commenters supported

the current language in Sec. 663.410 that offers the flexibility for

incremental payments to training providers.

Response: We generally agree that the normal form and manner of

tuition payments to community colleges should not change as the result

of the use of ITA's. At the same time, we do not want to prohibit Local

Boards from adopting methods that tie payments to contractually agreed

upon benchmarks that can benefit both participants and training

providers, and support the achievement of performance measures. No

change has been made to the regulations.

One commenter, which favored retention of the regulatory language

authorizing interim payments, seemed to believe that such a payment

methodology would also apply to the supportive services that an ITA

participant might be receiving.

Response: We do not read the regulations to require that when a

Board chooses to make incremental payments for training, it is under an

obligation to pay for other associated services in that same manner.

Another commenter recommended that the regulations require an ITA

payment system that incorporates independent verification procedures

that will ensure that the training provider has measured and certified

the training received. That same commenter also suggested we establish

a payment system that is efficient and easy to use while providing the

strongest fiscal controls to prevent abuse.

Response: We have chosen not to impose a particular payment

procedures but we note that the process of identifying eligible

training providers in and of itself helps to ensure quality training.

We also encourage Local Boards to adopt other practices that promote

quality training, such as documentation by the training provider of the

delivery of training or the participant's achievement of agreed upon

benchmarks or outcomes, on-site and desk reviews of the training

provider and regular contact with the participant. We also agree that

payment systems should be designed to ensure strong fiscal

accountability and to

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

Role of the case manager--WIA section 134(d)(4)(A)(ii) provides

that one of the eligibility criteria for adults and dislocated workers

to receive training services is that, after an interview, evaluation,

or assessment and case management, the participant has been determined

by a One-Stop operator to be in need of training services and to have

the skills and qualifications to successfully participate in the

selected program of training services. Commenters supported the role

that is described for case managers in Sec. 663.410, that is, assisting

the participant to select the eligible provider from which to purchase

training. One of these commenters further suggested that we emphasize

the need for skilled, professional case managers while another pointed

out that demonstration studies on the use of vouchers have found that

skill, professional case management was the key factor in determining

the effectiveness of vouchers

Response: We acknowledge the critical role of case managers and

urge, where necessary, States and/or local areas to arrange quickly for

staff training to ensure case managers have the understanding and

knowledge to carry out this role effectively. We believe, however, that

prescribing the role of case managers in the regulations is

inconsistent with our principle that the regulations should permit

State and Local Boards the maximum possible flexibility. The

regulations have not been changed.

National data collection and evaluation of the new ITA system:

There were also comments urging us to collect information on the actual

costs of training and to conduct evaluations of the relationship

between training and job placement, as well as the relationship between

the amount and duration of ITA's and the success of workers in securing

jobs that provide self-sufficiency. Additionally, the commenter asked

us to establish a system to collect information on outcomes for ITA's

including the relationship of training to job placement.

Response: We believe that both evaluations and analyses of JTPA

SPIR data have already demonstrated the strong relationship between

training, including training durations, and outcomes. The evaluations

that will be conducted of current ITA demonstrations will further

examine the issues raised by the commenters. Also, WIA section

136(d)(2)(A) requires States to report on entry into unsubsidized

employment that is related to the training provided to participants,

and section 136(d)(2)(C) requires States to report the cost of

workforce investment activities (which include training) relative to

the effect of the activities on the performance of participants, to the

Department as part of their annual report. We encourage State and Local

Boards, as part of their ongoing responsibility to manage performance,

to examine those same issues. In addition, we will continue to provide

technical assistance regarding various program design issues and the

implications and potential unintended consequences that must be

considered in making ITA policy decisions. No change has been made to

the Final Rule.

Two other commenters suggested that the regulations authorize the

use of ITA's to pay the full cost of customized training programs in

which tuition is not otherwise charged.

Response: The Act specifically identifies customized training as an

exception to ITA's. In general, customized training is provided based

on a specific training curriculum ``customized'' to the particular

worker skill needs of a specific employer or group of employers. While

participants may choose to participate in such training, there is no

provision for customer choice among training providers, rather there is

a single training provider who has been selected to ``customize'' the

training. Because there is no customer choice on the part of the

participant, ITA's are not an appropriate mechanism for customized

training. On the separate issue of the use of WIA funds to pay for the

full cost of customized training, we are constrained by section

101(8)(C) of the Act, which requires the employer to pay not less than

50 percent of the cost of the training. No change has been made to the

Final Rule.

2. Limitations on the amount and duration of ITA's: A number of

commenters raised concerns about the policies that State and Local

Boards might establish with respect to a dollar and/or duration

limitation for ITA's. Section 663.420 provides guidance for State and

Local Boards in their policy decisions to impose amount or duration

limits on ITA's. In general, although the regulations allow limits, we

expect that the limits will be realistic and will neither preclude

people from getting the training that they need nor providers from

participating in the system. In setting limits, State and Local Boards

need to consider the factors described above to be sure that the limits

are not too restrictive.

A commenter recommended that the limits on ITA's be as flexible as

possible to allow workers to invest in training that will lead to a

living wage and long-term self sufficiency and a second urged State and

Local Boards to consider the needs of different populations in setting

limits.

Response: Section 663.420(b)(1) allows State and Local Boards to

establish limits based on a participant's needs, which should include

the need for a job that leads to self-sufficiency. In addition,

Sec. 663.420(b)(2) allows State or Local Boards to set a range of

limits, an option which Boards may choose when considering the varying

needs of different population groups. These two options provide

considerable flexibility to the Local Board to support a policy that

provides for variations in the funding of ITA's. Thus, particular

occupational training that leads to self-sufficiency, or furthers other

goals of the workforce investment, could be set at different dollar

limits. Similarly, Local Boards could seek to ensure a large number of

providers of entry level skills training are available to aid

participants in avoiding transportation costs and long commutes during

training. While we agree with the comment, and do not want limits of

amount of duration to preclude people from getting the training they

need or training providers from participating in the system, in order

to preserve State and local flexibility, no change has been made to the

regulations.

To ensure that State and Local Board are able to make informed

decisions about how effectively different populations can be served

under an ITA system, commenters recommended that we encourage State and

Local Boards to gather data from training providers and other

stakeholders on the actual costs of and time needed for training. One

commenter focused this concern on low-income unemployed individuals.

The commenter asked that we include affirmative examples to States and

Local Boards in regulations or in guidance to ensure that such

limitations do not impede the success of intervention. Other commenters

suggested that there is evidence that previously established limits

have been too restrictive to effectively serve low income populations.

Response: We believe that is important for the eligible training

provider list to include sufficient numbers of training providers to

ensure that customer choice is a reality. This means that State and

Local Boards must develop ITA policies that ensure the marketplace can

operate and that a number of training providers across a

wide variety of occupations will believe it is in their best interests

to apply to become an eligible provider. If the number of training

providers seeking to be included on the eligible provider list is

sufficient to ensure healthy competition, then the need for extensive

cost analysis may be eliminated. No change has been made to the Final

Rule.

We have begun to develop additional information about ITA's,

including information drawn from a new ITA demonstration that will

explore a number of approaches to the administration of ITA's and

provide a laboratory for stakeholders and local operators to visit and

observe. We will use this information to provide guidance to the system

through conference workshops.

Numerous comments concerned Sec. 663.420, which gives the State or

Local Board the authority to establish limits on the dollar amount and

the duration of an ITA. Several commenters were concerned that cost and

duration limitations on ITA's will limit customer choice. They were

especially concerned that cost limitations would be set too low to

provide a range of eligible training providers from which to choose.

The commenters voiced concern that the cost limitations could be set at

amounts less than the actual cost of training services. They requested

that we provide regulations or guidance to ensure that ITA

administration does not become a limiting factor in serving job

seekers. Similarly, many commenters felt that limits on the amount and

duration of an ITA conflicted with Title I of the Rehabilitation Act

and limits informed choice of individuals with disabilities.

Response: We are also concerned that the dollar and duration

limitations could have the potential for limiting customer choice.

Consequently, Sec. 663.420(c) provides that these limitations should be

implemented in a manner that maximizes customer choice. We emphasize

that any limits established by a State or Local Board apply only to

training under Title I of WIA, not to training under Title I of the

Rehabilitation Act. We also note that, under WIA, access to training or

any other services is not an entitlement. Local Boards must exercise

discretion in establishing ITA's for eligible participants. The

regulations at Sec. 663.420(b) permit State and Local Boards to

establish ITA limitations in a number of different ways and provides

substantial discretion to allow for other circumstances such as the

availability of other funding, the contribution such training would

make to the overall workforce skill needs of the community, or the

needs of the individual participant to be taken into consideration.

We have added language to Sec. 663.420(c) to clarify that any ITA

limitations that are established may provide for exceptions to the

limitations in individual cases. We believe that more effective

programs will include this type of flexible limitation policies, so

that individuals are not excluded from training solely because of an

ITA limitation. In establishing guidance or limits on training funding,

a number of factors may be taken into consideration, such as the skill

shortages identified by local employers, the costs of training to

address these occupations in demand, and the training needs and

interests of the participants. The availability of other funding

resources should also be considered in the development of the training

portion of the Individual Development Plan, including Rehabilitation

Act funds, TANF, Pell Grants, and other Federal and State funding.

Coordination and cost sharing between Local Boards and Rehabilitation

Act grantees as well as other partners with training funds is a matter

for local negotiation and inclusion in the MOU. 20 CFR part 662

contains a detailed discussion of MOUs.

DOL's WIA title I performance accountability specifications do not

measure cost per participant, therefore, the setting of cost

limitations for ITA's will not have an impact on the performance

accountability system. The decision to establish cost and duration

limitations should be made after fully considering their benefits to

the overall workforce system and their effects on individuals and

populations in need of training. In making such decisions, State and

Local Boards should consider all public costs, not simply available WIA

funds, the value of such training in contributing to the

competitiveness of local businesses that may be ``at risk'' or may be

expanding and other economic development benefits.

One commenter suggested that the language in Sec. 663.420(a) which

gives the State or Local Board responsibility for establishing dollar

and duration limits be revised to give the Local Board the sole

responsibility.

Response: State and Local Boards both play an important role in the

ITA/eligible training provider systems. Local Boards have an important

familiarity with the local labor market and local training providers,

while the State plays an important leadership role in the establishment

of the workforce investment system as a whole--including the ITA/

eligible training provider system. As a result, no change has been made

to the Final Rule.

One commenter asked how disagreements between a State and Local

Board over the establishment of limits to ITA's would be resolved.

Response: The State Board's limits would prevail in such a case.

State or Local Boards should consider the range of costs and types of

training in demand by employers throughout the State in setting limits.

Policies concerning spending limits on ITA's should not unduly exclude

eligible providers or unduly limit customers' training options in any

geographical area of the State. Any cost limits established by State or

Local Boards apply only to WIA funds, and not to the total cost of

training. Where the cost of the desired training exceeds the

established State or Local Board limit for ITA's, an eligible

participant should still be able to access WIA ITA funds, when the WIA

training funds will be supplemented with funds from other sources--such

as Pell Grants, scholarships, severance pay and other sources. Section

Sec. 663.420 has been changed by adding a new paragraph (d) to reflect

the ability of participants to access ITA funds when the ITA funds will

not pay the full cost of training. This approach is supported by

Sec. 663.310(d) which provides that training services may be made

available to employed and unemployed adults and dislocated workers who

are unable to obtain sufficient grant assistance from other sources to

pay the cost of training and require WIA assistance in addition to

other sources of assistance.

Although discussing limits to ITA's, one commenter suggested that

State and Local Boards be required to establish criteria and written

policies governing access to and the distribution of ITA's and that the

process for developing these policies be required to include

consultation with appropriate labor organizations. Further, the

commenter suggested that such policies be available to the interested

parties, the general public and all individuals served through the One-

Stop system.

Response: The State is required, in 20 CFR 661.220(d), to provide

an opportunity for public comment on and input into the development of

the state plan prior to its submission. The required opportunity for

public comment requires that representatives of labor organizations, as

well as representatives of business and chief elected officials be

afforded the opportunity to comment. Similarly, Sec. 661.345(b)(2)

requires that the Local Board provide an opportunity for public comment

on and input to the development of the local workforce

investment plan, prior to its submission, be provided to

representatives of labor organizations and business. WIA section 117(e)

also requires the Local Board to provide information to the public on

Local Board activity.

We believe that access to and distribution of ITA's is based

broadly on the Local Board's policy decision about the amount of

funding to be devoted to training services and, more narrowly, on

individual participants' need for training and their eligibility for

it. We strongly encourage Local Boards to consult with a variety of

organizations, including organized labor, when making policy decisions

concerning ITA's. No change has been made to the Final Rule.

A commenter recommended that we should include a prohibition on

discrimination on the basis of union affiliation in the selection of

training programs.

Response: We believe that WIA section 122 and Subpart E of part

663, which provides further direction regarding eligible training

providers, establish sufficiently objective procedures to ensure

against discrimination in the selection of training offered either by

unions or by employer organizations. No change has been made to the

Final Rule.

Another commenter requested authority for training providers to

reject students with ITA's where they think the student will not

succeed in, or benefit by, the program.

Response: There is no requirement that eligible training providers

must accept any participant who seeks to enroll under the local

workforce investment area's ITA program. Further, we are not limiting

an eligible training provider's ability to set entrance criteria or

screening tests to determine that the participant is likely to success

in the particular training curriculum. We believe that the intensive

services provided to a participant, especially assessment and career

counseling in consultation with the case manger in developing a

realistic Individual Employment Plan, combined with customer-oriented

information on eligible training providers that reflects the entrance

criteria for the desired training curriculum, will be critical to the

participant's selection of appropriate training in which they can

achieve success and ultimately, job placement. No change has been made

to the regulations.

3. Exceptions to ITA's: The Act, at Sec. 134(d)(4)(G)(ii), and the

regulations at Sec. 663.430, provide that, under certain limited

circumstances, contracts for training rather than ITA's may be used.

Specifically, on-the-job training contracts with employers and

customized training contracts are authorized. Contracts may also be

used when there is an insufficient number of eligible providers in a

local area. This exception applies primarily to rural areas. The

exceptions to ITA's are to be used infrequently. The Act reforms the

local service delivery system by eliminating the current practice of

assigning participants to contracted training services and instead

establishing a system that maximizes customer choice in the selection

of training providers. When the Local Board determines there are an

insufficient number of eligible providers in the local area to

accomplish the purposes of a system of ITA's, and intends to use

contracts for services, there must be at least a 30 day public comment

period for interested providers.

Contracts for Special Populations--Section 663.430(b) also

authorizes contracts for training when the Local Board determines that

there are special populations that face multiple barriers to employment

and that there is a training services program of demonstrated

effectiveness offered by an eligible provider. Section 663.430(a)(3)

explains that an eligible provider in this case is a community based

organization (CBO) or other private organization. We have received many

suggestions about this exception and the extent to which it may be

used.

Response: Generally, it is our position that this exception is

intended to meet special needs and should be used infrequently. Those

training providers operating under the ITA exceptions still must

qualify as eligible providers, as required at Sec. 663.505. We believe

that effective eligible training providers, including CBO's and other

training providers, can and will compete for individual training

accounts and that providers should view the use of ITA's as an

opportunity to expand their customer base.

Numerous comments recommended that the list of special participant

populations be expanded to include individuals with disabilities who

require multiple services over extended periods of time. Other

commenters recommended that the list also be expanded to include older

individuals or low income older individuals. Two commenters disagreed,

in part, with the recommendation that individuals with disabilities be

included as a special participant populations. They made the point that

such individuals should not be automatically perceived as a special

participant population and excluded from benefitting from ITA's.

Response: The Act does not specifically list any of these

populations in section 134(d)(4)(F)(iv). The Act and Sec. 663.430(b)

do, however, list as one of the four special participant populations

defined in the Act ``Other hard-to-serve populations as defined by the

Governor involved.'' As a result, Governors have the authority to add

additional groups, such as individuals with disabilities, to the list

contained in the statute. Other provisions that assure that persons

with disabilities will have full and fair access to WIA services. For

example, section 188(a)(2) provides that no individual shall be

excluded from or denied benefits under any WIA title I program or

activity on the basis of disability. Regulations implementing this

provision are found at 29 CFR part 37. In addition, section 112(b)(17)

of the Act requires the Governor to describe, in the State Plan, how

the State will serve the employment and training needs of ``individuals

with multiple barrier to employment (including older individuals and

individuals with disabilities).'' We believe that this direction, which

is included in the WIA State Planning Guidance, provides sufficient

direction for consideration of these and other population groups not

specifically mentioned in section 134(d)(4)(F)(iv) of WIA. The

requirement for public comment on the plan in Sec. 661.220 of the

regulations allows interested parties the opportunity to promote the

interests of those two groups.

In addition, we would like to clarify that within the special

participant populations that are listed in the Act and that are

identified by the Governor, there will be individuals for whom an ITA

is the most appropriate avenue to employment. We encourage One-Stop

operators and intensive service providers to consider all training

options when working with special participant populations. It is

important that consumer reports reflect adequate information to

determine the appropriateness of training provided by an eligible

training provider with regard to accessibility, auxiliary aids and

services, etc., to enable customers with special needs to make an

informed choice.

One commenter recommended that the Governor be required to solicit

comments from key stakeholders, including business, organized labor,

and CBO's, when identifying additional populations.

Response: Section 112(b)(17)(A)(iv) of the Act requires the

Governor to have this information in the State plan, which is, of

course, subject to comment.

No change has been made to the Final Rule.

Criteria for ``Demonstrated Effectiveness'': Section 663.430(a)(3),

provides that when the exception for special populations is used, the

Local Board must have in place criteria it developed to determine

``demonstrated effectiveness,'' particularly as it applies to the

special participant population it proposes to serve. This determination

is in addition to meeting the requirements for qualifying as an

eligible training provider. The criteria listed in the regulation are

illustrative and Local Boards should develop specific criteria

applicable to their local areas.

One commenter suggested that, in selecting CBO's as training

providers through a contract for services to serve special participant

populations, State and Local Boards should be able to consider quality

training even if that training program is not included on the eligible

provider list.

Response: We cannot agree to that recommendation since WIA section

122 requires that all training providers meet the requirements for

inclusion on the eligible provider list. Section 122(f) lists two

exceptions to the requirement that deliverers of training services be

eligible training providers; on-the-job training and customized

training. We interpret these exceptions to be exclusive; providers of

all other training services must go through the eligible provider

process. No change has been made to the Final Rule.

One commenter felt that one of the criteria of demonstrated

effectiveness established in Sec. 663.430(a)(3), ``financial

stability,'' was too restrictive and should not be a factor in

considering CBO's which have a record of providing crucial services to

disadvantaged groups.

Response: In order to ensure the proper expenditure of Federal

funds, we believe the financial stability of a CBO or of any private

organization is relevant in a Local Board's determination when

selecting a training provider for special participant populations.

While financial stability is not the only factor that a Local Board may

consider, and may not be the decisive factor, it is reasonable for a

Local Board to consider the financial stability of an organization in

which it may invest scarce training funds. No change has been made in

the Final Rule.

The same commenter also recommended that we change

Sec. 663.430(a)(3)(ii) to establish, as an alternative to the listed

program measures, the criterion of a demonstrated ability to do

outreach to and serve populations that face multiple barriers.

Response: Section 663.430(a)(3) does not limit Local Boards to the

listed factors in establishing criteria for demonstrated effectiveness.

The Local Board may also consider the CBO's or private organization's

success in reaching out to disadvantaged populations. No change has

been made to the Final Rule.

Another commenter suggested expanding the criteria for demonstrated

performance to include the attainment of a self sufficiency wage.

Response: Although we have, in Sec. 663.230, established a minimum

definition of self-sufficiency--employment that pays at least the lower

living standard income level, as defined in WIA section 101(24)--the

criteria for determining whether employment leads to self-sufficiency

is left to the State and Local Boards. This means the criteria to be

applied could vary substantially from area to area. In addition, the

performance accountability system, established in section 136 of WIA,

does not refer to attainment of self-sufficiency. While, as we have

said above, we recognize the importance of self-sufficiency as a goal

for all employment and training activities and urge State and Local

Boards to adopt that standard, we are not prepared to impose that

standard on the system. However, Sec. 663.430(a)(3) does not limit the

ability of the State or Local Board to adopt additional criteria of

demonstrated effectiveness by including attainment of self-sufficiency

as a measure of demonstrated performance. No change has been made to

the regulations.

One commenter suggested expanding the criteria for demonstrated

performance to include the demonstrated ability to serve ``hard to

serve'' populations.

Response: We have modified Sec. 663.430(a)(3)(ii) to clarify that

the criteria listed in that section are among the ways available to

demonstrate effective delivery of services to hard to serve

populations.

4. Requirements for Consumer Choice: WIA section 134(d)(4)(F), and

the regulations, at Sec. 663.440, identify the information on training

providers that must be made available to One-Stop center customers.

They require Local Boards to make available, through the One-Stop

centers, the eligible training provider list as well as the performance

and cost information associated with each provider. Section 663.440(c)

provides additional guidance on how participants may use that

information to select a training provider and have an ITA established

on their behalf. We received a number of comments on the contents of

the information, the manner in which it would be made available, and

the level of authority the Local Board and the One-Stop operator will

have in establishing ITA's.

A commenter expressed concern that, if the same entities that

establish ITA's also offer training, they will have the potential to

steer individuals toward their own training services.

Response: The introduction of ITA's was intended to maximize

customer choice and reduce any forms of inappropriate referral

practices that may have existed. The limited circumstances in which

exceptions to ITA's are authorized are a further safeguard against the

recurrence of such practices. The Act, at Section 117(f)(1)(B), also

establishes stringent conditions that a Local Board must meet before a

Governor can consider a waiver of the general prohibition against a

Local Board's provision of training. Further, the Act, at section

134(d)(4)(F), requires Local Boards to make available through the One-

Stop centers the eligible training provider list and the program and

cost information associated with each eligible provider. The

availability of that information will allow participants to assume more

control over the choice of training provider. Finally, through its

monitoring and oversight role, the State may identify and review any

unusual patterns of eligible provider usage to determine if corrective

action is necessary. We believe these protections are sufficient to

avoid the practices the commenter fears. No change has been made to the

final regulations.

Another commenter asked how customer choice requirements apply to

incumbent workers.

Response: It is important to recognize the difference between

incumbent and employed workers. As we have explained above, incumbent

workers are individuals who are employed, however, not all incumbent

workers are also eligible for services to employed worker as described

in WIA sec. 134(d)(3)(A)(ii). Training for incumbent workers is

specifically authorized only as a Statewide Workforce Investment

Activity under WIA section 134(a)(3(A)(iv)(I) and Sec. 665.210(d). This

is an optional activity in which the States may decide to engage.

Generally, incumbent worker training is developed with an employer or

employer association to upgrade skills training of a particular

workforce. It usually takes place in the workplace or after work hours

for employees of a specific employer or employer association.

There is no requirement that all incumbent workers to be trained must

be determined to be in need of training services to obtain or retain

employment that allows for self-sufficiency. Frequently, such training

is part of an economic development or business retention strategy

developed by a State. In such cases, the employer is involved in the

arrangement of the training curricula and usually has a role in the

selection of the training provider. Since the training is usually

arranged by the employer with a specific training provider, there is no

customer choice on the part of the individual incumbent worker other

than whether or not to participate in the training. This issue is also

addressed in the preamble discussion of 20 CFR part 665.

In contrast, when a One-Stop operator determines that an employed

worker meets the eligibility criteria, established under WIA Sec.

134(d)(3)(A)(ii), for training with local (formula) funds, that worker

should is no different from any other worker found eligible for

training services and must enjoy the same degree of consumer choice as

any other person eligible for training. An Individual Employment Plan

would be developed for the employed worker as part of the intensive

services provided to the participant and a training plan, if so

indicated, developed in the same manner as for any other participant.

Since the customer choice requirements do not apply to incumbent worker

training, no change has been made to the regulations.

Availability of training funds--There were several comments about

the language in Sec. 663.440(c) which requires a One-Stop operator to

refer an eligible individual to a training program and establish an ITA

``unless the program has exhausted funds for the program year. . . .''

One commenter suggested that, to avoid the early exhaustion of program

funds, we should add language requiring the use other available State

and local resources, particularly for incumbent workers, before using

WIA funds for ITA's. Another commenter felt that the language infringed

upon a Local Board's authority to allocate funds among core, intensive

and training services, presumably by mandating the expenditure of funds

on training at the expense of core and intensive services.

Response: It is important to emphasize that, under section

134(d)(4)(B), the opportunity for an individual to enroll in a training

program does not rely exclusively on the availability of WIA training

funds. In all cases, the resources of partners as well as Federal,

State, local and personal funding sources should must also be taken

into account in the development of the Individual Employment Plan.

Thus, an eligible individual may receive intensive services and receive

assistance in making arrangements for training regardless of whether

the local WIA program has exhausted training funds for the program year

and is unable to provide an ITA. Since we have already discussed the

requirements to consider and use other funding sources in Sec. 663.320,

we do not think it is necessary to add an additional mandate that

operators consider other funding sources before approving training.

Section 195(2) of the Act establishes a ``maintenance of effort'' type

of requirement by mandating that WIA funds be used for activities that

are in addition to those already available in the local area, and

Sec. 663.310(d) specifies that training services may be made available

to eligible adults and dislocated workers who are unable to obtain

grant assistance from other sources. In an effective One-Stop system,

the One-Stop operator will have knowledge of additional resources and

will be able to coordinate WIA services with those of other partner

programs, thus increasing the opportunity to provide increased services

to customers of all the partner programs. Finally, incumbent worker

training activities are funded from statewide workforce investment

funds authorized under section 134(a)(3)(A)(iv)(I) and rather than

local training funds.

In response to the second comment, the ``exhausted funds'' language

of Sec. 663.440(c) is not intended to contradict, and must be read in

conjunction with, the Local Board's authority to determine the

appropriate mix of core, intensive and training services in the local

area, described in Sec. 663.145(a). In recognition of this, we have

changed Sec. 663.440(c) to clarify that a One-Stop operator must refer

an individual to training and establish an ITA except when the Local

Board determines that training funds have been exhausted.

The commenter also suggested that the costs of referral to training

be borne by the One-Stop operator.

Response: No change has been made in the regulations since

Sec. 663.440(d) already requires that the cost of that referral be paid

by the applicable Title I adult or dislocated worker program.

Another commenter suggested that in order to assure ``true''

customer choice, the consumer information provided by the Local Board

should include a listing of the types of jobs into which providers have

placed people and the wages earned in those jobs.

Response: WIA section 122(d) does not require eligible training

providers to submit specific information on jobs, although the Governor

or the Local Board may choose to include such a requirement; that same

section does, however, require the submission of information on wages

and permits requiring the submission of information on the percentage

of individuals who obtain employment in an occupation related to the

program (WIA sec.122(d)(1)(A)(i)(II)). We note, though, that the

information required by section 122(d) must be submitted for each

specific training program on the list of eligible training programs,

not for the eligible provider's full range of programs. Information on

the specific training program, along with information submitted at the

Governor's or Local Board's option on training-related placements, may

serve as a useful substitute for the specific job information the

commenter seeks. As discussed further in subpart E, WIA section

122(d)(3) sets conditions under which additional information may be

requested. No change has been made in the regulations.

Another commenter supported the requirement in Sec. 663.430(a)(2)

for a public comment period of 30 days before a Local Board can

determine that there is an insufficient number of eligible training

providers in the local area to accomplish the purposes of ITA's.

Response: The regulations retain that requirement.

Subpart E--Eligible Training Providers

Subpart E describes the methods by which organizations qualify as

eligible providers of training services under WIA. It also describes

the roles and responsibilities of Local Boards and the State in

managing this process. Although no single entity has full

responsibility for the entire process, the State must play a leadership

role in ensuring the success of the eligible provider system. The

Governor establishes minimum performance levels for initial

determination of non-Higher Education Act/registered apprenticeship

providers and for all subsequent eligibility determinations. The Local

Board may establish additional local performance levels for subsequent

eligibility determinations. The eligible provider process requires a

collaborative effort among the State, Local Boards, and other partners.

The regulations attempt to amplify and clarify the intent of the Act,

by linking statutory language on eligible providers in WIA section 122

with the provisions covering Individual Training Accounts

(ITA's) in WIA section 134. In Sec. 663.505, the regulations clarify

that all training providers, including those operating under the ITA

exceptions, must qualify as eligible providers, except for those

engaged in on-the-job and customized training (for which the Governor

may establish qualifying procedures, as discussed in Sec. 663.595).

Finally, in order to ensure the strong relationship between the

eligible provider process and program performance, Sec. 663.530

establishes a maximum eighteen month period for an organization's

initial determination as an eligible provider.

Before publication of the Interim Final Rule, some traditional

providers of training under previous workforce programs, such as

community-based organizations, expressed concern that they would face

difficulties in participating in this system. The regulations clarify

that such organizations have the opportunity to deliver training funded

under WIA, provided that they deliver services that customers value and

meet training performance requirements. It is important that States

provide access to these organizations in order to maximize customer

choice. States should provide access to a broad and diverse range of

providers, including CBO's, while maintaining the quality and integrity

of training services.

A commenter recommended that the Act and the regulations for

subpart E be changed to permit use of a competitive procurement

process, such as that permitted for youth providers in the Act, since

the identification of eligible training providers for adult training

services was viewed as ``overly complicated.''

Response: We recognize that the eligible training provider

requirements may present significant implementation challenges to

States and local areas. However, these requirements are essential to

the new system envisioned under WIA, in which consumer choice and

accountability are key principles. Although ITA's must be used for most

training services, contacts for training are permissible in certain

limited circumstances (discussed in Sec. 663.430): for customized or

on-the-job training (OJT); when there are a limited number of

providers, or for programs of demonstrated effectiveness offered by

CBO's or other private organizations for special participant

populations facing multiple barriers to employment. Under 20 CFR

661.350(b)(10), Local Boards are required to describe in their local

plan the competitive process to be used to award contracts for training

services when exceptions are made to the use of ITA's. No change has

been made to the Final rule.

Several commenters suggested that language should be added in

Sec. 663.500 and throughout the subpart to clarify that programs, not

providers, are made eligible, and that eligibility is not automatically

conferred on all of an eligible provider's programs.

Response: We agree that clarification is needed. We have added

language throughout the subpart (in Secs. 663.500, 663.510, 663.515,

663.535, 663.550, 663.565, 663.570, 663.585, and 663.590) to clarify

that:

- programs as well as providers must be eligible;

- providers are eligible to provide training services only

for the programs described in their applications;

- the Local Board and the Governor may require application

information on providers as institutions, in addition to information

regarding programs;

- application requirements for all programs not eligible

under the Higher Education Act nor registered under the National

Apprenticeship Act (regardless of the type of provider) fall under the

Governor's initial eligibility procedures;

- providers submit performance information on programs and

those programs that don't meet performance levels must be removed from

local lists;

- providers may continue to be eligible if at least one of

their programs is eligible (even if other of their programs are

determined ineligible and removed from the local and State lists); and

- State and local lists must include information on eligible

training programs as well as providers.

A number of commenters wanted us to add specific language in

Sec. 663.500 and throughout this subpart on the need to assure that

there is diversity in the types of programs offered and in entrance

requirements, that community-based organizations are included, and that

nontraditional employment for women be a suggested focus for new

training providers.

Response: Under Sec. 663.440(a), training services must be provided

in a manner that maximizes consumer choice. We agree with the

commenters that maximizing consumer choice requires that Governors and

Local Boards ensure that eligible training provider systems offer a

diverse array of high-quality programs that meet the varying career

interests, skill levels, and training needs of WIA customers, including

low income adults, dislocated workers, and other priority groups under

WIA. Governors and Local Boards are strongly encouraged to provide

outreach, technical assistance, and leadership to different types of

providers, including CBO's and providers of non-traditional employment

and training opportunities, in order to ensure a diverse array of high-

quality training options. In fact, 29 CFR 37.42 requires recipients

(including Governors and Local Boards) to conduct outreach efforts to

various populations. Community-based organizations, recognized at

Sec. 663.590 as being able to apply and be determined eligible, have,

in many local areas, proven to be a key source of quality programs. We

do not think it would be useful to try to prescribe a uniform rule to

cover the variety of State and local selection processes and criteria

that will exist. We encourage Governors and Local Boards to administer

the selection process in a manner that assures that significant numbers

of competent providers, offering a wide variety of programs are

available to customers, and have added language indicating this to

Sec. 663.500.

A number of commenters were concerned that the requirements in

section 122 of the Act and all of Secs. 663.500 through 663.595 of the

regulations would be in conflict with ``informed choice'' requirements

in title I of the Rehabilitation Act of 1973, as amended by title IV of

the Workforce Investment Act. Commenters noted that State Vocational

Rehabilitation (VR) agencies have their own vendor approval procedures,

maintain their own vendor lists, and that some organizations that work

with persons with disabilities may not be on a WIA eligible training

provider list.

Response: While VR agencies are required partners in the One-stop

system, participants in VR-funded services can select vendors,

including training providers, approved under the State VR agency's

procedures and policies. Only when VR participants also use WIA title I

funds must training services be from a provider and program eligible

under WIA title I.

Both title I of WIA and Section 102(d) of the Rehabilitation Act

(title IV of WIA) contain provisions that we believe are intended to

serve the same goal--providing participants with the opportunity and

the means to make informed choices about the services they receive.

Title I of WIA mandates that training be delivered in a manner that

maximizes consumer choice and requires the use of ITA's, provision of

descriptive and performance information on eligible providers and

programs, and delivery of intensive services, such as assessment and

case management. Similarly, section 102(d) of the Rehabilitation Act

requires State VR agencies to implement policies to

assure that individuals can exercise informed choice in decisions

related to assessment, selection of employment outcome, specific

vocational rehabilitation services, the entity that will provide

services, the employment setting in which services will be provided,

and the methods available for procuring services.

We encourage State VR agencies and WIA systems to harmonize and

coordinate their respective policies and procedures on informed

consumer choice and the creation of lists of, and information on,

eligible or approved providers of training services. Both systems could

explore, for example, common application requirements or approval

criteria for vendors of training services, expediting the application

or approval process to assure timely inclusion of vendors from the

partner system, providing outreach to their respective providers on how

they can become eligible or approved under the partner's system, and

creation of a common, accessible consumer information system on

programs and providers that can be used by participants in both WIA

title I and VR as they exercise their choice.

As we noted earlier, we encourage Governors and Local Boards to

ensure that the eligible training provider system provides access to a

broad diversity of programs that can accommodate the varying needs,

career interests and preferences of priority groups under WIA. We

encourage Governors and Local Boards to make sure that State and local

WIA procedures, while maintaining the quality and integrity of training

services, afford adequate and timely opportunities for applications

from training programs and providers serving individuals with

disabilities. Also, when developing initial and subsequent eligibility

procedures, under Secs. 663.515(c)(1)(I) and 663.535 (a)(1), Governors

must solicit and take into consideration the recommendations of

providers. We encourage Governors to extend this opportunity to

providers offering training services to individuals with disabilities.

Since we do not see a conflict between WIA's customer choice and VR's

informed choice requirements, no change has been made to the Final

rule.

Section 663.505--What are Eligible Providers--One commenter wanted

to ensure that Sec. 663.505 permits apprenticeship programs with

applications pending to be recognized as eligible training providers.

Response: Apprenticeship programs awaiting State or federal

approval can be recognized as eligible by Local Boards. However, since

such programs are not yet registered under the National Apprenticeship

Act, the provider would have to apply under the Governor's procedures

for initial eligibility, which requires the provision of performance

and cost information. No change has been made to the Final rule.

A commenter suggested that Sec. 663.505 (b)(2)(iii), be revised to

specifically mention service or conservation corps as other eligible

providers of training services.

Response: Service or conservation corps programs are among the

types of programs that could be eligible to provide adult training

services under State and local initial eligibility procedures. There

are many types of organizations that could apply and become eligible,

but we do not think it is appropriate to try to enumerate them all, or

to specify certain groups. No change has been made to the Final rule.

One commenter wanted us to ensure that CBO's, whose eligibility is

discussed in Sec. 663.505(b)(2)(v), are not left out as eligible

training providers simply because they are not ``automatically''

eligible under WIA section 122(b)(1).

Response: Since most CBO's and their programs are not HEA-eligible,

they will have to provide program performance and cost information in

initial applications and their programs will have to be determined

eligible by the Local Board. However, we anticipate that many CBO

programs will be able to meet performance requirements both initially

and subsequently, and thus will be included on local and State lists.

As noted earlier, we strongly encourage States and Local Boards to

provide outreach and technical assistance to providers such as CBO's,

to ensure that there is a wide array of providers and programs that can

both accommodate WIA participants' diverse training needs and career

interests and meet accountability requirements. Community-based

organizations, recognized at Sec. 663.590 as being able to apply and be

determined eligible, have proven able in many communities to meet these

skill needs and career interests while increasing participants'

earnings and employment. We encourage CBO's to take part in the

consultation process required under Secs. 663.515(c) and 663.535(a).

Under these provisions Governors must solicit and take into

consideration the recommendations of training service providers and

interested members of the public on both initial and subsequent

eligibility procedures. We believe that the regulations adequately

protect the interests of CBO's, thus, no change has been made to the

Final rule.

Section 663.508--Definition of a Program of Training Services--A

number of commenters felt that the definition of a program of training

services in Sec. 663.508 should be clarified. The commenters suggested

that a course or sequence of courses leading to a ``competency or skill

recognized by employers'' and ``a training regimen that provides

individuals with additional skills or competencies generally recognized

by employers'' were similar, but vague. Commenters wondered if one

definition applied to services for the unemployed while the other

applied to such services for the employed, and what the word

``generally'' was intended to convey. One commenter recommended that

the definition require that competencies and training regimen be

identified and approved prior to training, and several commenters

suggested that the competencies approved by labor organizations or

labor-management committees should be acceptable. Another commenter

suggested that the regulation clarify that the competencies and skills

could include increased literacy or increased English language

abilities.

Response: The definition of a program of training services was

intended to ensure that individuals using ITA's have access to a broad

array of training options, and that no arbitrary limits would be

established as the length, nature, location or outcomes of the

training, unless required under other parts of the Act or regulations

(such as requirements for on-the-job training and customized training

at Secs. 663.700-663.720). We did not intend to differentiate between

training programs for the employed or unemployed. Section 663.508 has

been revised to clarify that a program of training services can consist

of one or more courses or a training regimen, and that either of these

can lead to a formal credential (such as a degree or certificate) or to

the acquisition of skills and competencies recognized by employers for

a specific job or occupation, as well as general skills and

competencies necessary for a broad range of occupations, or job

readiness. Section 663.508 has also been changed to indicate that the

skills and competencies should be recognized by employers and

identified in advance. Such competencies may include literacy or

English language abilities. We encourage Local Boards and Governors to

develop application requirements that solicit information on the skills

and competencies to be taught and how

these are ``recognized'' by employers, labor-management committees, or

labor organizations, particularly when programs do not offer a formal

credential. We also encourage Governors and Local Boards to create

policies and procedures for initial and subsequent eligibility (and

data reporting) to accommodate situations in which WIA participants'

training plans do not require a full ``program,'' but rather only part

of a program or courses from different programs.

Section 663.510--State and Local Roles in Managing the Eligible

Provider Process--One commenter asked that Sec. 663.510 be modified to

ensure that the public is provided access to the provider list and

performance information, that the lists are provided upon request, and

that satellite and affiliate offices of the One-Stop system also

receive the list.

Response: Under Sec. 663.555, the State list and consumer reports

containing performance information must be made available throughout

the One-stop system as a core service to the general public, to WIA

participants, and to participants whose training is supported by other

One-Stop partners. We strongly encourage States and local One-Stop

systems to assure that the list is available in all satellite and

affiliate offices. In addition, under 29 CFR 37.9, the provider list

and performance information must be made available in alternate formats

to individuals with disabilities. Since the regulations already

accommodate the commenter's request, no change has been made to the

Final rule.

A number of comments criticized Sec. 663.510 for failing to address

States' and Local Boards' responsibility to ensure that available

training options include nontraditional occupational training for

women, small business development and other programs targeting

particular populations or industrial sectors for which there may be

high demand. Commenters asked that the Final Rule include language

requiring States and localities to ensure that the eligibility

determination process assures the availability of non-traditional

training options for women. One commenter wanted the regulations to

require States and Local Boards to conduct outreach to CBO's that

provide services to disadvantaged populations to help them apply for

certification and contracts.

Response: As noted earlier, in order to support informed customer

choice by WIA participants with diverse skill needs and career

interests, Local Boards and Governors should make every effort to

ensure there is a broad range of programs and providers identified on

State and local lists. We strongly encourage States and Local Boards to

conduct outreach and technical assistance to various types of providers

in order to enhance the likelihood that customers will have access to a

broad range of programs and providers. Since the State and Local Boards

are accountable for their own performance, they must ensure that

programs other than HEA and NAA programs included on the initial lists

and all programs included on subsequent lists have met minimally

acceptable levels of performance. Although we strongly encourage States

and Local Boards to take affirmative steps to make sure that programs

offering non-traditional training and programs offered by CBO's are

included on their eligible provider lists, ultimately, the programs

must meet State and local performance requirement to be included. We

cannot require States and Local Boards to include programs that do not

meet their legitimate performance standards. Thus, no change has been

made to the Final rule.

One commenter requested that the regulations clarify that cost and

performance information is required for all providers, as indicated, in

the commenter's view, by the requirement at Sec. 663.510(c)(3) that the

designated State agency disseminate the State list ``accompanied by

performance and cost information related to each provider * * *''

Response: The commenter is partially correct. For subsequent

eligibility, performance and cost information is required of all

programs. For initial eligibility of non-HEA and non-NAA programs and

providers, Sec. 663.515(c)(3)(ii) requires Local Boards to use the

Governor's procedures for determining eligibility and those procedures

must require that appropriate portions of cost and performance

information be provided. For initial eligibility of HEA and NAA

programs and providers, Sec. 663.515(b) provides that the application

contents are determined by Local Boards, which are not required to

request performance and cost information. Local Boards are not

precluded from requesting such information, but the Act does not permit

performance levels to be used in determining initial eligibility of HEA

and NAA programs. No change has been made to the Final rule.

One commenter was concerned that, as local lists are combined to

form a State list, as discussed in Sec. 663.510, some programs and

providers could be included for which a Local Board would not want to

allow customers to use title I training funds. The commenter further

recommended that the regulations give final authority to Local Boards

to choose what programs and providers to include on a local list.

Response: We recognize that Local Boards may have legitimate

concerns about the quality or integrity of a program or provider. Such

concerns may arise if a program from another area's performance is

unknown or lower than the levels set by the Local Board for subsequent

eligibility, if there have been, or continue to be, problems known to

the Local Board related to training program inputs (such as curriculum,

instruction, or equipment) or if the provider has not complied with

administrative or financial requirements. These problems may exist for

programs and providers included by other Local Boards or by the Local

Board itself. However, the Board must permit eligible participants to

choose from providers on the State list which must include: (1) HEA and

NAA programs which submit complete applications for initial eligibility

in accordance with the Local Board's requirements, (2) non-HEA, non-NAA

programs which meet the criteria in the Governor's procedures, and (3)

programs placed on the list by another Local Board and approved by the

State agency.

The Act, at section 122(e)(4)(b), requires that individuals

eligible to receive training have the opportunity to select any

eligible provider from any local area that is included on the State

list. Local Boards are required to make this list available to the

local One-Stop system. We believe that, to maximize customer choice,

Local Boards must ensure that participants are informed about the State

and local lists, encouraged to use them, and informed of their right to

choose any programs on the list. For individuals determined eligible

for training services, there are only three conditions a Local Board

can impose on participants using ITA's: the training must be in an

occupation for which there is demand, the individual must have the

qualifications to succeed in the program, and the selection occurs

after consultation with a case manager. Since Local Boards must allow

title I funds to be used in the programs selected by training

participants if these three conditions are met, Local Boards should

ensure that the participants select the provider that best suits their

individual needs especially when the provider is not located in the

local area. Local Boards are encouraged to consider:

- Enhancing the quality of information on programs and

providers.

High quality information can aid customers in making informed judgments

and steering clear of questionable programs or providers. We encourage

Local Boards to make recommendations on the types of information to be

collected as part of the Governor's procedures for initial eligibility

for non-HEA, non-NAA programs and providers and to ensure that their

own applications for HEA and NAA programs and providers solicit the

needed types of information and to obtain appropriate information to

determine subsequent eligibility. Extensive supplementary information

on providers and programs can also be included on the local list under

Sec. 663.575 and Local Boards and case managers can present additional

information during the decision-making process, or encourage WIA

customers themselves to acquire additional information on programs and

providers under consideration. Local Boards can also coordinate with

one another on the types of information required in initial

applications and in supplementary information, to assure that there are

high levels of information on programs in all local areas.

- Providing quality guidance and continuing case management.

Individuals eligible for training services select a program after

consultation with a case manager. States and Local Boards can take

steps to ensure that case managers: encourage individuals to fully

utilize the information available in the local or State list and in the

consumer reports; provide additional information beyond the lists and

consumer reports; assist individuals in doing their own research on

programs or providers; and help individuals identify specific options

and systematically compare them. If an individual does chose a

questionable program, case managers can monitor the individual's

progress and the training program's performance, in order to identify

and take action to avoid potential problems.

- Creating procedures to assure high performance. State and

Local Boards can create procedures to hold questionable providers

accountable for performance. For example, procedures could permit ITA's

to be paid incrementally upon completion of specific milestones.

Because the Act encourages broad customer choice, we do not think

it appropriate to change the regulations. State and Local Boards have

the flexibility to help individuals to make the best choice for their

circumstances.

A commenter wanted Sec. 663.510 to ensure that Local Boards have

the flexibility to set policy on providers and programs that reflects

local conditions and that the State cannot add its own providers to the

State list.

Response: WIA section 122(e)(2) makes it clear that, in compiling

the State list, the State has authority to include only providers and

programs submitted as part of local lists. The State has no authority

to include additional providers and programs. However, Local Boards

have only limited authority to determine which programs or providers

are included or excluded from the local list. Rather, the Local Board

must, for initial eligibility, include all HEA and NAA programs and

providers for which complete applications are submitted and include

non-HEA and non-NAA programs which meet the Governor's criteria, which

are not required to, but may, permit adjustments to performance levels

for local conditions. For subsequent eligibility, all programs must

meet minimum acceptable performance levels specified in the Governor's

procedures and adjusted according to the Governor's procedures for

local factors and the characteristics of the population served by the

providers. Local Boards have the flexibility to require higher, but not

lower, levels of performance. We encourage Local Boards to actively

participate in the development of the procedures for determining

initial and subsequent eligibility.

We recognize that, during both initial and subsequent eligibility,

there may be programs which a Local Board believes are valuable in

meeting local workforce needs that do not meet performance levels (or

other criteria) and, therefore, cannot be included on the local list.

To avoid this situation, we encourage local Boards to make their

recommendations on the Governor's initial eligibility procedures, an

opportunity which Governors are required to make available to Local

Boards under Sec. 663.515(c)(1)(I). As discussed earlier, in order to

ensure access to a broad array of programs that can meet customer's

diverse skill needs, career interests, and preferences, we also

encourage Local Boards, to provide outreach and technical assistance to

providers.

We recognize that, in other instances, a Local Board may

reluctantly have to include programs or providers which it believes are

questionable on the local list. To avoid individuals selecting

questionable programs or providers or to prevent any problems if they

are selected, we encourage Local Boards to explore the approaches

suggested above, for enhancing the quality of information, providing

high quality case management and guidance, and creating procedures to

enhance performance. Since the regulation accurately reflects the

statutory requirements, no change has been made to the Final rule.

One commenter was concerned that the Preamble and Sec. 663.510(b)

were inconsistent in discussing the need for setting performance levels

for initial eligibility.

Response: It was unclear what the commenter found inconsistent. The

Governor determines the initial eligibility procedures, including

appropriate of levels of performance, for non-HEA and non-NAA programs

and sets minimum acceptable levels for all programs for subsequent

eligibility (though such levels can be increased by the Local Board).

These provisions are included in Secs. 663.515 and 663.535.

Another commenter stated that the process for determining eligible

providers, as described in Sec. 663.510, should be as transparent as

possible, and allow qualified providers to become eligible while

setting sufficient thresholds to limit participation of unqualified

providers.

Response: We believe that the Act and regulations provide States

and Local Boards with the opportunity to set up systems that will be

transparent and achieve the goals suggested by the commenter. No change

has been made to the Final rule.

Some commenters questioned whether Secs. 663.510(c)(2) and

663.515(d) give too much authority to designated State agency by

authorizing it to verify performance information on providers' programs

submitted by the Local Board. One commenter felt that the regulations

exceed the language of the Act, which only requires that the State

determine if performance levels are met. Another commenter suggested

that the regulations should not shift this responsibility onto States

and that, if States have this responsibility, we should provide support

and technical assistance in carrying out verification. The commenter

also suggested that the Act appears to require a duplicative function

by Local Boards and the designated State agency in determining if

performance levels are met.

Response: We agree that the Act, in section 122(e)(2), specifies

that the State determines if performance levels are met for programs

submitted on local lists. However, we believe that the role of the

State agency in verifying performance information is implicit in the

statutory scheme, based on the State agency's authority to enforce

provisions of section 122(f)(1) on the intentional submission of

inaccurate performance information (which can only be determined as

inaccurate if there is a

way to verify the information submitted) and on the requirement that

providers submit verifiable program-specific information. We have

changed the language in Sec. 663.510(c)(2) to clarify that the State

agency must determine if programs meet performance levels, and, in so

doing, may verify the accuracy the performance information submitted.

We have also revised Sec. 663.515(d) to clarify that the designated

State agency determines if the performance levels are met for programs

Local Boards submit as part of their local list. In addition, since

State agency consultation with the Local Board is required under

section 122(f)(1) and verifiable information is required to be

submitted to the Local Board, we believe that the Act also provides

implicit authority to Local Boards to verify performance information

and to report suspected inaccuracies to the State agency. We have added

language in a new paragraph 663.510(e)(4) to clarify that Local Boards

may perform verification of performance information, under the

Governor's procedures. Technical assistance on verification and other

aspects of implementing WIA section 122 is being planned.

We agree that the roles of the State agency and Local Boards may

overlap in determining if programs meet performance levels and in

verifying performance information, and we encourage States and Local

Boards to work toward eliminating needless duplication. The Act does

not, however, authorize the State to review Local Boards'

determinations of programs that do not meet the performance levels and

are, therefore, neither included on local lists nor forwarded to the

State. No change has been made to this aspect of the Final rule.

Section 663.515--Initial Eligibility Process--One commenter

suggested that initial eligibility criteria for institutions offering

degree programs be accreditation or approval by the appropriate

authority and, for institutions that offer certificate programs,

appropriate licensing by the State.

Response: In determining initial eligibility, Local Boards have the

option to request information about accreditation and approval from

HEA-eligible and NAA-registered programs and providers as part of the

application and to include such information on the local list. However,

we do not believe that Act provides authority for any approval criteria

for HEA and NAA programs and their providers, as long as completed

applications are submitted and the program or provider meets the

eligibility criteria of WIA section 122(a)(2)(A) and (B). We note that

to be eligible under HEA title IV, providers must be accredited, and,

if a public institution, approved by appropriate State authorities. For

non-HEA and non-NAA programs and their providers, the Governor's

procedures could require that State licensing, or any other applicable

criteria, be used for both approval or information purposes. No change

has been made to the Final rule.

We encourage State WIA systems to work with State public education,

and licensing authorities to harmonize, coordinate, or strengthen

requirements for all types of programs and providers, since the

strictness and consistency of approval, licensing and accreditation for

providers and programs varies widely between--and even within--States.

Similarly, requirements for certificate programs, offered at both HEA-

eligible and non-HEA-eligible providers, vary widely in terms of

length, content, and rigor.

Another commenter asked that Secs. 663.515 and 663.535 require the

Governor to allow sufficient time for labor organizations and

businesses to provide comments on initial and subsequent eligibility

procedures and suggested a minimum of 30 days. The commenter also

wanted the regulations to require that State and local labor

federations be part of the consultation process.

Response: We view the comment and consultation provisions in this

section, as throughout the Act, as cornerstones of the new system

envisioned in the Act. To assure there is adequate time for comments,

while permitting as much State flexibility as possible, we have added

language at Secs. 663.515(c)(1)(iii) and 663.535(a)(3) to require

Governors to establish and adhere to a specific time period for the

consultation and comment process during the development of procedures

for initial and subsequent eligibility. We strongly encourage Governors

to take affirmative steps to include State and local labor federations

in the comment and consultation process, but we do not think additional

changes to the Final rule are warranted. Under the rule as written,

Governors are required to solicit and take into consideration the

recommendations of providers of training services, which may, in some

areas, include labor federations involved in providing apprenticeship

or other training, and must provide an opportunity for representatives

of labor organizations to submit comments on the procedures.

A commenter suggested that Governor's procedures for initial

eligibility require evidence that training providers have consulted

with labor organizations who represent workers having the skills in

which training is proposed.

Response: While such an activity may be desirable, the Act does not

provide authority to require Governors to include such a provision in

their initial eligibility procedures. The contents of applications for

initial and subsequent approval are left to the Governor's discretion,

after appropriate consultation. We encourage Governors to consider such

consultation requirements for initial eligibility, in order to assure

that programs are of high-quality and match current skill requirements.

We also encourage both Governors and Local Boards to consider including

information items in initial eligibility procedures and applications

that will help consumers identify if programs have been subject to

review and approval by appropriate labor and industry organizations. No

change has been made to the Final rule.

One commenter was concerned that the 30 days, permitted in section

122(e) of the Act, for the State agency to determine if programs

submitted by Local Boards meet the performance criteria for initial and

subsequent eligibility, was insufficient. The commenter recommended

that State agencies be given 90 days.

Response: We recognize that until State data collection and records

linkages systems are in place, States will have difficulty in meeting

the timing requirement for verifying information and for determining if

performance levels are met. Since the law specifies that the State

agency has only 30 days, the State may not be able to determine if such

levels are met on all programs' performance and the State may have to

develop a prioritizing or sampling system. However, we also recognize

that in a number of circumstances, timing problems will persist even

once such data systems are in place, since there are time lags in

accessing UI quarterly records for verifying program performance

information. We have added language in Sec. 663.530 to provide that, in

the limited circumstance when insufficient data is available, initial

eligibility may be extended for a period of up to six additional

months, if the Governor's procedures provide for such an extension.

A number of commenters expressed suspicion that initial eligibility

procedures, by providing complete discretion to Governors and Local

Boards, would result in programs being determined eligible on the basis

of arbitrary performance and cost thresholds, and thus lead to ``creaming''

of programs and participants. Commenters expressed concern that the

regulations do not define an ``appropriate portion of performance and

cost information'' and ``appropriate levels of performance'' and asked

that we define these terms and offer examples of how States and Local

Boards could set up initial eligibility procedures to assure a diverse

provider system. Commenters suggested several other remedies: requiring

or allowing use of adjustment or weighting factors for the local area

and participant characteristics; encouraging use of data from outside

the JTPA system to ensure a wide array of performance information;

requiring Governors to set aside technical assistance funds to help

small, nonprofit CBO's with application and data collection activities;

requiring information on growth occupations and growing sectors in the

area; and requiring that CBO's be listed as examples of interested

members of the public to whom opportunities to comment should be

provided.

Response: We believe that the Act provides broad discretion to

Governors to determine initial and subsequent eligibility procedures.

Since we want to provide as much flexibility to States as possible, we

have not defined what constitute ``appropriate portions of performance

and cost information'' or ``appropriate levels of performance.''

However, we are concerned that all procedures and practices be fair and

not arbitrary, and that they be based on research, information from

past experience, and sound management approaches. We are also concerned

about practices that result in ``creaming'' of participants or lead to

a lack of training options that meet the diverse skill needs and career

interests of WIA participants. We plan to develop technical assistance

on development of initial and subsequent eligibility criteria.

As noted earlier, we strongly encourage outreach and technical

assistance by States and Local Boards to providers in order to assure

that WIA participants have access to a broad range of programs. Also,

we strongly encourage CBO's to take advantage of the public comment and

consultation required to be provided by the Governor in the development

of procedures for initial eligibility for non-HEA, non-NAA programs and

subsequent eligibility for all programs. No change has been made to the

Final rule.

One commenter requested clarification on how both initial and

subsequent eligibility under WIA fits with requirements of State and

national systems for accreditation, approval, and performance

information. Several commenters recommended that the WIA system for

collecting and disseminating performance information be used in other

systems.

Response: The Act recognizes the value of at least two other

national recognition systems, in the requirements for HEA and NAA

programs for initial eligibility. We encourage all One-Stop partners at

the State and local level to harmonize and coordinate performance

requirements and to enhance systems for certification, licensure, and

accreditation. We encourage all partners to avoid the creation of, or

resolve, duplicative or conflicting requirements regarding programs,

institutions, and data on individuals. We also support the creation of

unified data collection systems that can reduce administrative burden

while permitting information to be generated to meet reporting

requirements under many programs. We believe that WIA's requirements

will strengthen accountability and customer choice by supplementing

existing systems established through State and federal higher education

requirements and State licensing agencies. Information disseminated on

individual training programs' performance under WIA will be a

significant addition to the accountability systems currently in place,

and will provide the general public, program administrators and front-

line staff access to information that, in most parts of the Nation, has

never before been available. We encourage Governors and Local Boards to

consider ways to make use of performance and cost information already

available through these other systems. We do not think, however, that

WIA section 122 gives the authority to mandate this kind of

coordination; thus, no change has been made to the Final rule.

Section 663.530--Time Limit for Initial Eligibility--A number of

commenters expressed approval of the clear expression of how long

initial eligibility may last and supported the swift transition to

subsequent eligibility when all providers would be subject to the

performance requirements. One commenter, however, was concerned that

the requirement in Sec. 663.530 that initial eligibility be only 12 to

18 months will create problems for institutions eligible under the

Higher Education Act that will not be able to compile information in

time for subsequent eligibility determination.

Response: We agree that, in certain circumstances, providers will

have difficulty in collecting all the performance information required;

similarly, the designated State agency may have difficulty verifying

the information, particularly because of the lag time in using UI

quarterly records. However, because of the critical importance of

performance information for consumer choice and accountability, initial

eligibility should be extended only in very limited circumstances, such

as for new programs for which no data under the methodology the

Governor selects would be available within 12 to 18 months. In other

circumstances, Governors' procedures could permit an extension of

initial eligibility of up to six months, when insufficient data is

available. In such cases, it may be a good idea to partially assess

performance by using the information that is available even if it is

only partial information (such data on all students that recently left

a program even if no WIA client information is yet available) or by

using survey-based information until UI records can be used for

verification. We have added language to Sec. 663.530 to permit

Governor's procedures to extend initial eligibility in limited

circumstances.

Section 663.535--Subsequent Eligibility--One commenter wanted

Sec. 663.535 to be revised to clarify that the State agency can verify

information on performance and cost effectiveness for subsequent

eligibility.

Response: As discussed above, we have changed Sec. 663.510 to

clarify that the State, as well as the Local Board, may verify

performance information in the process of determining if performance

levels at initial and subsequent eligibility are met. The Act

authorizes the State agency to determine if the performance levels are

met for programs submitted by the Local Boards. The State does not have

a role in reviewing performance of programs not approved by the Local

Board and not included on local lists. However, there is nothing to

preclude Local Boards from delegating to the State agency the authority

to perform all initial determinations of eligibility of non-HEA and

non-NAA programs, and subsequent eligibility determination for all

programs, although responsibility for this process still remains with

the Local Board. The Act does not explicitly authorize the State agency

to determine ``cost-effectiveness,'' but rather requires that the

information on the costs of the training services be required in

applications for initial eligibility of non-HEA and non-NAA and for all

programs for subsequent eligibility. Although States and Local Boards

may choose to use the available cost and performance information to

determine the cost-effectiveness of training programs, the decision to

do so is a matter of State or local discretion. We have made no

additional change to the final regulations.

Several commenters were concerned that provider requirements at

Sec. 663.535 will not take into account the characteristics of the

population served and the difficulties in serving these populations.

Response: These concerns are addressed in our response to similar

comments on adjustments to performance levels in the discussion of

Sec. 663.540.

Section 663.540--Types of Performance and Cost Information Required

and Extraordinary Costs of Collecting Performance Information--One

commenter was concerned that federal requirements on confidentiality of

student records possibly presents a major problem for developing

information on students not funded with ITA's.

Response: We recognize that regulations and administrative guidance

for the Federal Educational Rights and Privacy Act (FERPA) under 20

U.S.C. Sec. 1232g, as issued by the U.S. Department of Education, may

need to address the issue of how States can assure that performance

information on all students in eligible programs can be developed,

particularly when UI quarterly records must be used, as required under

section 122 of WIA. We are working with the U.S. Department of

Education to identify how State WIA systems, State education systems,

and educational institutions can comply with FERPA and also generate

the information required under WIA and plan to issue joint guidance

that will assist States in complying with FERPA. No change has been

made to the Final rule.

One commenter recommended that the law and regulations be changed

so that information on all participants in a program, which may be

difficult to obtain, is not required.

Response: We believe that eliminating this information would

vitiate one of the key elements needed for maximizing customer choice.

As the commenter recognizes, the Act requires performance information

on all students in a program. State WIA systems are encouraged to work

with State public education and licensing authorities to harmonize,

coordinate, or strengthen information requirements in all systems. No

change has been made to the Final rule.

One commenter recommended that Governors be allowed to require

additional verifiable performance information describing the

demographics of the populations served in a training program, including

age, race, national origin, English proficiency, sex, and disability.

The commenter further recommended that all such information be included

in the consumer reports system.

Response: 29 CFR 37.37(b)(2) requires recipients, including

training providers, to ``record the race/ethnicity, sex, age, and where

known, disability status, of every applicant, registrant, eligible

applicant/registrant, participant, terminee, applicant for employment,

and employee.'' Governors should consider the merits of including such

information in the consumer reports system. No change has been made to

the Final rule.

Several commenters wanted the regulations to require Governors and

Local Boards to demonstrate how local area factors and population

characteristics are considered in determining performance levels for

subsequent eligibility as well as requiring that Governors and Local

Boards to demonstrate that the most disadvantaged are being served.

Response: Under Sec. 663.535(f), the Governor's procedures already

must ensure that Local Boards takes such factors into consideration. As

we have said above, Governors and Local Boards should assure that all

WIA participants who may have multiple barriers to employment have

access to programs that can effectively serve their needs. No change

has been made to the Final Rule.

A number of commenters noted that Sec. 663.540 does not define what

constitute ``extraordinary costs'' and that differences of opinion on

this matter should be an allowable basis to appeal denial or

termination of eligibility. Some commenters recommended that training

providers be given explicit authority to present to their Local Board

and Governor evidence of extraordinary costs and that a response should

be required within a reasonable period of time. They further suggested

that, if additional resources or cost-effective data collection methods

were not provided, the provider would be exempted from submitting the

performance information. One commenter recommended that providers

which, after presenting evidence of extraordinary costs involved in

providing performance information, receive neither additional resources

nor cost-effective information-collection methods, should be exempted

from submitting information on their programs' performance and that

such programs should remain eligible. By contrast, one commenter wanted

to assure there were limits on the amount of funds Governors must offer

to training providers who need additional funds to collect performance

information.

Response: The Act requires Governors to provide additional

resources or cost-effective methods of data collection when providers

experience extraordinary costs in providing required information, under

section 122(d)(1)(A)(ii), on program participants who receive

assistance under the adult or dislocated worker programs, or in

providing additional information under section 122(d)(2). In order to

assure that Governors provide such assistance, Sec. 663.540(c) has been

revised to require that the Governor establish procedures by which such

costs can be determined. While Governors must define the methodology to

be used in determining such costs and either provide the funds or

procedures to help defray or lower these costs when they are determined

to be extraordinary, we have not mandated that the Governor or Local

Board is required to defray all of the provider's extraordinary costs.

Reasonable parties may differ over whether information costs are

extraordinary and whether the State has undertaken reasonable means to

defray or lower such costs. States and local areas will have to devise

a system under which disputes regarding extraordinary costs can be

reasonably resolved. For example, a Local Board may base its initial

decision on the basic information required, while attempting to reach

agreement on the costs of the additional information. If a provider is

denied eligibility because it has not provided the required

information, section 663.565(b)(4) provides an opportunity for review

of that decision.

Section 663.555--Dissemination of the State List--Several

commenters want the state list of eligible training providers to be

made available to the public and not just individuals.

Response: Section 663.555 already provides that the list and

consumer reports are required to be widely disseminated and made

available as a core service throughout the One-Stop delivery systems in

the State. We believe that the One-Stop system is the appropriate way

to ensure wide access of the list, so no change has been made to the

Final rule.

Section 663.565--Loss of Eligibility and the Appeals Procedures--A

number of commenters recommended there be a time limit required for

prompt resolution of appeals and suggested 60 days as the limit.

Response: States must develop procedures that assure prompt

resolution of appeals. Unlike other provisions in WIA, for example,

section 181(c), which establish time limits for

the resolution of grievances or appeals, section 122(g) does not

establish a time limit on the appeal; it leaves the details of the

procedure to the Governor. We do not think we can mandate a time limit

where Congress has chosen to give the Governor the discretion to

fashion an appeal procedure. We do, however, strongly encourage States

to establish and adhere to time limits for such appeals and to make

those time limits consistent with the time limits in their other WIA

appeal procedures. No change has been made to the Final rule.

One commenter noted that the criteria for termination of

eligibility do not address situations in which institutions lose their

license to operate, when they or their programs lose accreditation, or

State educational agency approval, and when providers violate State or

local laws.

Response: The criteria for initial eligibility for non-HEA and non-

NAA programs are determined in the Governor's procedures and may cover

a number of different situations, such as when programs are in

violation of State and local laws or have lost their license to

operate. WIA section 122 does not mandate the detailed criteria to be

used in determining eligibility for providers and programs, but rather

permits Governors and Local Boards to set application information

requirements and determine that the information is complete. For

example, information on the status of a program or provider as eligible

under HEA, registered under NAA, and on accreditation or compliance

with various State and local laws could be required and included on the

State or local list). The only criteria in WIA for termination of

subsequent eligibility are limited to: not meeting performance levels,

intentionally submitting inaccurate information, and noncompliance with

the Act and its regulations. If a State or Local Board asks for

information about accreditation status or compliance with laws and the

provider submits inaccurate information, it may be subject to

termination under Sec. 663.565(b)(3). Because WIA is silent about what

happens if a provider's license accreditation status change during the

period between initial and subsequent eligibility determinations or

between annual subsequent eligibility determinations, we want to

clarify that Governors may set procedures for resubmission of initial

applications or other information in cases where the status of a

provider or its program has changed.

The same commenter noted that Sec. 663.565(b)(1) requires that

Local Boards must remove programs that do not meet performance levels

from the local list, while, under Sec. 663.565(b)(2), States only may

remove such programs from the State list, which could result in

incompatible State and local lists and in Local Boards being sued by

providers.

Response: The Local Board has the authority and the obligation,

under WIA section 122(c)(6)(A) and (e)(1), to deny initial eligibility

and subsequent eligibility if programs and providers fail to meet

performance levels. Since, under WIA section 122(c)(6)(B), Local Boards

may set higher performance standards for providers or programs to be

included on their local list, it is possible that one local area may

remove a program or provider while another places them on its local

list. In that case, the State Agency must decide whether or not to

remove the program or provider from the State list. The possibility of

being sued by providers exists at both the local and the State levels,

depending on which level is involved in denying or terminating

eligibility. No change has been made to the Final rule.

Sections 663.570 and 663.575--The Consumer Reports System and

Additional Local Information--A number of commenters asked that the

regulations require consumer reports to include information about wage

trends and projections, occupations that provide high wages, in

addition to information on growth occupations, or those in growing

sectors of the economy.

Response: We agree that such information is valuable to individuals

in determining which occupations and training to pursue. Section

663.570 encourages States and Local Boards to make program specific

information on wage trends and projections available in the consumer

reports. Section 663.575 permits Local Boards to supplement the

information on the State list with information on training linked to

occupations in demand in the local areas. This kind of information is

readily available since information on job vacancies, occupations in

demand, and the earnings and skill requirements of such occupations is

required as a core service available to the general public and to all

WIA clients under Sec. 663.240(b)(5). No change has been made to the

Final rule.

Several commenters asked that ``program entrance requirements'' be

added to the list of information that can be included in consumer

reports in Sec. 663.570 and further suggested that information be

required to be presented ``in user-friendly format and language, taking

into consideration the literacy levels, languages and developmental

stages of the communities to be served.'' In addition, a few commenters

asked that the regulations mention that information about

nontraditional occupational training and placement of women in

nontraditional jobs be specifically identified as appropriate

information related to the objectives of the Act.

Response: We agree that program entrance requirements and the use

of a user-friendly format and language are highly valuable to assist

adults or dislocated workers to fully understand the options available

in choosing a program of training services. States and Local Boards

should assure that as much information as possible is accessible to

anticipated users of ITA's and key populations who use such information

as part of the core services available in the local One-Stop system. It

is up to States and Local Boards to determine the types of information

to be required; we do not believe it is appropriate to specify required

information in the regulations. In making such determinations, we

encourage States and Local Boards to consider whether to highlight

information on specific types of programs, such as nontraditional

occupational training for women. No change has been made to the Final

rule.

Section 663.585--Providers Outside the Local Area and Reciprocal

Agreements with Other States--One commenter asked that we add language

to Sec. 663.585 on portability of apprenticeship skill credentials, to

assure that individuals registered in an apprenticeship program in one

State would be deemed registered in an accredited program in other

States.

Response: WIA does not address recognition of individuals'

registration status by apprenticeship programs in different States.

Rather, the Act permits reciprocal agreements among States so that

individuals with ITA's can use providers in other States. If such an

agreement had been made, the ability of individuals to participate in

other States' programs would depend on whether those programs were

included on the State list and the program's own policies regarding

recognition of skill attainments and credentials from other programs.

Questions of the portability of credentials in the apprenticeship

system are the province of the Bureau of Apprenticeship and Training.

No change has been made to the Final rule.

Section 663.590--Community-Based Organizations--One commenter

expressed gratitude that the regulations clarify that CBO's can be

determined eligible and they and their programs included on the State

and local lists.

Section 663.595--Requirements for Providers of OJT and Customized

Training--One commenter recommended that the Governor solicit comments

from business and labor organizations on the development of performance

information for OJT and customized training while another commenter

suggested that it was inadvisable to disseminate information on the

performance of employers, since many employers would be unwilling to

participate if their identity was to be made known to the general

public.

Response: There is nothing to preclude Governors from soliciting

comments from business and labor in developing these performance

requirements and learning if disseminating performance information

would be a deterrent to other employers and it would be consistent with

both the process for developing provider and program eligibility

procedures and the general intent of WIA to promote openness and

consultation to do so. Governors need to consider the impact of

requiring performance information in terms of employer participation,

particularly since employer-provided training has, in the past, been an

effective method for providing training. However, if the Governor

determines that performance information must be collected and the

criteria to be met, One-Stop operators must collect such information,

determine if performance criteria are met, and disseminate information

on employers that meet the criteria. We note that information does not

have to be disseminated on employers that do not meet Governor's

criteria under the current regulation. No change has been made to the

Final rule.

One commenter noted that the Preamble to the Interim Final rule,

page 18673, column three, lines 8-11, should have said that the

Governor has the option to require performance information of providers

of OJT and customized training.

Response: We agree that the Preamble was in error. It should have

said that Governors may require performance information.

Subpart F--Priority and Special Populations

1. Priority Under Limited Adult Funding: This subpart contains

requirements related to the statutorily-required priority for the use

of adult funds, authorized under WIA section 133(b)(2)(A) or (3), when

funds are limited. WIA section 134(d)(4)(E) states that in the event

that funds allocated to a local area for adult employment and training

activities are limited, priority shall be given to recipients of public

assistance and other low-income individuals for intensive services and

training services. The appropriate Local Board and the Governor must

direct the One-Stop operators in the local area with regard to making

determinations related to such priority. We assume that adult funding

is generally limited because there are not enough adult funds available

to provide services to all of the adults who could benefit from such

services. However, we also recognize that conditions are different from

one area to another and funds might not be limited in all areas.

Because of this, the regulation requires that all Local Boards must

consider the availability of funds in their area. In making this

determination, the availability of other Federal funding, such as TANF

and Welfare-to-Work funds, should be taken into consideration. Unless

the Local Board determines that funds are not limited in the local

area, the priority requirement will be in effect. States and Local

Boards must work together to establish the criteria that must be used

in making this determination. States and Local Boards also may

administer their priority for adult recipients of public assistance and

other low income adults so as not to preclude providing intensive and

training services to other individuals.

We received a substantial number of comments on the priority issue.

Many commenters voiced their support for interpretation that adult

funds will generally be limited and for clarifying the State's and

local areas' role in prioritizing the use of these funds for TANF

recipients and other low-income individuals. Many other commenters

believed that we should not write any regulations at all on this

section of the statute.

Response: We believe that the interpretation of this requirement is

of such importance that there must be regulations. Section 663.600

interprets the statutory language that provides States and Local Boards

with the authority to determine the criteria to be applied when making

the determination that there are sufficient funds available so that the

priority is not in effect. No change has been made to the Final rule.

Some commenters requested further guidance and technical assistance

regarding the process described at Sec. 663.600(b), (c), and (d) that

permits the priority for services to the recipients of public

assistance and low income individuals to be exercised while still

serving other eligible individuals. A number of these commenters

supported the ``cone of service'' concept that provides universal

service to the largest number of individuals and, through a process of

determining individuals' employment service needs and their

eligibility, leads to reduce numbers of individuals receiving services

as the services become more staff intensive, longer in duration, and

more costly. They asked that priority guidance be based on this

concept.

Response: In general, Sec. 663.600(d) clarifies that the process

for determining whether to apply the priority established under

paragraph (b) does not necessarily mean that only recipients on public

assistance and other low income individuals may receive WIA adult

funded intensive and training services when funds are determined to be

limited in a local area. The Local Board and the Governor are

specifically authorized to establish a process that gives priority for

services to recipients on public assistance and other low income

individuals and that also serves other individuals meeting eligibility

requirements.

We used the ``cone of service'' concept to illustrate an estimated

distribution of service needs by One-Stop customers. It was not

intended to convey a scheme of priority of service. The distribution of

service needs in a local area may vary from the pure ``cone'' in areas

with a number of job seekers with extensive barriers to employment or

in areas of highly educated, self-directed job seekers. The ``cone''

illustration is not intended to be applied as strict percentages of

service provision to the pool of eligibles candidates for services.

Rather each local area must assess the needs of its workforce and

determine the most appropriate distribution of services against

projected levels of service needs. However, recognizing the important

role that the adult and dislocated worker funds play in the One-Stop

system, Sec. 662. 250(a) requires these programs to provide all of the

required core services in each of the comprehensive One-Stop centers.

The fact that WIA adult funds may be used to provide core services on a

universal basis is one of the key reform elements of the legislation,

and augments the investment traditionally provided by the Wagner-Peyser

Act. No change has been made to the Final Rule.

Commenters expressed concern that the priority requirement would be

implemented by establishing an arbitrary minimum standard, such as

establishing a percentage of participants or funds that must be

targeted to TANF and other low-income job seekers, which could become a

``check off'' rather than a thoughtful balancing of needs. Commenters

also were concerned that an arbitrary percentage not be used to satisfy

the priority requirement.

Response: While the regulation requires that States and local areas

consider whether funds are limited, it gives them flexibility to

determine the criteria on which to base the determination, because

local areas vary widely in the characteristics of their work force. We

discourage States and local areas from setting an arbitrary percentage

of TANF and low-income job seekers to be served could result in

sufficiently skewing the distribution of services relative to the

workforce's needs that differences in the severity of service needs

would not necessarily be reflected in the process. We believe that the

present language in the regulations permits the maximum flexibility in

the design of the priority process and provides a sufficient framework

to implement priority of service for public assistance recipients and

low income individuals consistent with the Act. We expect that States

and local areas will take seriously the responsibility to develop

effective priority criteria, and believe that the public input

generated through the local planning process will result in criteria

that effectively serve the needs of the local area. No change has been

made to the Final rule.

Other commenters requested assurance in the regulations that if

local entities determine that there is not limited funding, that we

would not reevaluate their determination at a later date and find the

local area out of compliance.

Response: The regulations, at Sec. 661.350(a)(11), require that the

local workforce investment plan include a description of the criteria

to be used by the Governor and the Local Board, under Sec. 663.600, to

determine whether funds allocated to a local area for adult employment

and training activities under WIA Secs. 133(b)(2)(A) or (3) are

limited, and the process by which any priority will be applied by the

One-Stop operator(s). The local plan is subject to public comment as

well as review and approval by the Governor. Upon approval by the

Governor and local implementation of its priority determination, it is

expected that the local workforce staff will continue to monitor

workforce employment and training population needs and conditions to

ensure that the priority determination continues to be appropriate.

Later modifications to the plan would require public comment. No change

has been made to the Final rule. We recognize that this will be an area

of interest to the Department and national policymakers and as such,

State and local areas can expect that it will be evaluated during the

implementation studies.

Commenters suggested that we add language to the regulations that

would require the mix of individuals served by the local One-Stop

system to reflect the demographic characteristics of the eligible

population in the community and that the local plan provide an

interpretation of the priority as applied to the demographics of the

area.

Response: The Department has an obligation, as part of its

oversight responsibilities, to determine whether a particular function,

e.g., service delivery, is consistent with the intent of the Act and

regulations. Non-discrimination and equal opportunity requirements and

procedures, including complaint processing and compliance reviews, are

administered and enforced by our Civil Rights Center. Regulations

implementing the requirements of WIA section 188 are published at 29

CFR part 37. It should be noted that except where service to specific

populations is authorized by statute (such as in WIA section 166), it

is unlawful under WIA section 188(a)(2) and 29 CFR 37.6(b)(1)-(6) for

One-Stop systems to use demographic characteristics to determine which

individuals will receive services. However, under 29 CFR 37.42, One-

Stop systems must do outreach to various populations, to ensure that

members of those populations are aware of the programs and services

provided by the systems. No change has been made to the Final Rule.

We received a number of comments about the definition of ``public

assistance'' as it relates to individuals served under the priority

provision. Commenters stated the belief that while application of the

priority could result in improved access to persons with disabilities,

the potential for this increased access is dependent, to some degree,

on the application of a broad definition of public assistance. WIA

section 101(37), defines public assistance to mean ``Federal, State or

local government cash payments for which eligibility is determined by a

needs or income test.'' The commenters requested a definition that

specifically recognizes other forms of assistance such as Medicaid,

Medicare, Social Security Disability Income (SSDI) and Supplemental

Security Income (SSI) as well as ``other funding used heavily by

persons with disabilities.''

Response: A definition of the term ``public assistance'' developed

by States and local areas that includes the availability of other

Federal, State or local government cash payments to an individual based

on a needs or income test would be consistent with WIA requirements.

The statutory definition of ``public assistance'' at WIA sec. 101(37)

contains a two-part test. The program must provide ``cash payments''

and eligibility for the program must be determined by a ``needs or

income test.'' Under this definition, cash payments, such as SSI, state

payments to individuals with a disability, and local general relief

payments to homeless individuals would meet both parts of the statutory

definition of public assistance.

On the other hand, the statute would not permit a state or local

definition that included programs providing benefits that are not cash

payments, or programs that are not needs or income-based. For example,

SSDI payments are not income tested, and, therefore, cannot be

considered public assistance under WIA. However, as a practical matter,

SSDI beneficiaries may still qualify for priority under WIA. For

example, SSDI beneficiaries might be determined to be eligible under

the priority for WIA services as ``other low income individuals'' based

on their income, under 20 CFR 663.640, which provides for the

individual with a disability to be considered a low income individual

even if the family income does not meet the income eligibility criteria

when the individual's own income meets the income criteria. Similarly,

Medicaid and Medicare benefits are not considered public assistance as

defined under WIA. Medicare is a medical insurance for which

individuals are eligible based their having attained the age of 65 and

contributed to the fund during their employment. There is no needs or

income test to determine an individual's receipt of Medicare benefits.

Furthermore, while Medicaid eligibility is dependent upon an income

test, it fails to meet the second part of the WIA definition. Under

Medicaid, there is no cash payment provided to the individual, rather

payments representing reimbursements of medical expenses are paid

directly to the medical services provider. However, individuals

receiving Medicaid or Medicare payments may still be determined

appropriate for the WIA service priority as ``other low income

individuals'' based on their income. No change has been made to the

Final rule.

2. Welfare-to-Work and Temporary Assistance to Needy Families as

Part of One-Stop: At Sec. 663.620, the regulation discusses the

relationship of the Welfare-to-Work program and the Temporary

Assistance to Needy Families (TANF) program to the One-Stop delivery

system. Welfare-to-Work is a required partner to which the One-Stop

partner regulations apply. The TANF agency is specifically

suggested as an additional partner. Both programs can benefit from

close cooperation with the One-Stop delivery system because their

respective participants will have access to a much broader range of

services to promote employment retention and self-sufficiency.

A commenter suggested that Sec. 663.620(a), which provides that

Welfare-to-Work participants may be referred to receive WIA training,

should include a statement that such funding assistance is not

available under Welfare-to-Work or should clarify that Sec. 663.620 is

an exception to Sec. 663.310(d), if that is the intent.

Response: Section 663.310(d) provides that training services are

available to adults who ``are unable to obtain grant assistance from

other sources to pay the costs of such training'' and notes as an

example of other grant assistance, Federal Pell Grants. It is not

intended that this section limit ``other grant assistance'' to only

Federal Pell Grants, rather it is expected that access to other grant

funds that will maximize the availability of WIA funds so that the

broadest number of individuals may be served. ``Other grant

assistance'' funds would be considered as additional training resources

for individuals requiring training. Such funds could include not only

Federal Pell Grants, but also Welfare-to-Work grant funds (which, under

recent amendments may be used to provide limited occupational

training), State education grants and dislocated worker funds where

such an application is appropriate. The language in Sec. 663.310(d) has

been changed to provide Welfare-to-Work and other examples in addition

to the Pell Grant reference as appropriate to the eligibility of the

individual involved for other training fund assistance.

Subpart G--On-the-Job Training and Customized Training

Sections 663.700 through 663.720 are the regulatory provisions for

conducting on-the-job (OJT) and customized training activities. They

include specific information regarding general, contract, and employer

payment requirements. Unlike JTPA, WIA does not limit OJT to six

months. However, as specified in WIA Sec. 101(31)(C), it is limited in

duration as appropriate for the occupation being trained for. Section

663.705 establishes requirements that permit OJT contracts for employed

workers.

One commenter supported the brevity of the regulations related to

OJT. A second commenter apparently construed the language in

Sec. 663.700(a) that states that, ``A contract may be developed * * *''

to mean that the use of contracts for the development and delivery of

OJT is optional.

Response: The language in Sec. 663.700(a) has been changed to

clarify that OJT must be provided through a contractual arrangement as

an exception to the ITA requirement under WIA section

134(d)(4)(G)(ii)(I). We believe that written agreements are necessary

to ensure that the requirements of OJT are met. The regulations, in

Sec. 663.700 (b) and (c), establish minimal requirements for OJT

contracts. OJT contracts must ensure that participants are provided a

structured training opportunity in which to gain the knowledge and

competencies necessary to be successful in the occupation in which they

receive training.

That same commenter also suggested that the regulations be amended

to require that the OJT contract contain detailed information on the

skills and competencies to be acquired, the time frame for acquiring

them, and sufficient documentation to demonstrate that workers received

bonafide training and acquired the competencies.

Response: Generally, we believe that States and local areas should

have the flexibility to determine the information needed for inclusion

in the required OJT contracts. Therefore, we have not mandated that the

contracts contain documentation that the competencies are acquired.

However, in order to ensure that workers and employers have a common

understanding of the goals and purpose of the OJT assignment, we

believe that certain general terms should be reduced to writing.

Accordingly, we have amended Sec. 663.700(c) to require that the OJT

contract identify the occupation, the skills and competencies to be

learned and the length of time the training will be provided.

We received comments which recommended that the regulations require

local programs, in entering into OJT contracts or undertaking

customized training, give priority to employers who: offer wages and

benefits that lead to family self sufficiency; ensure long term self

sufficiency for their employees; exhibit a strong pattern of union

management cooperation; and after upgrading existing employees through

OJT, backfill vacancies with public assistance recipients and other low

income persons.

Response: We have chosen not to limit local options by specifically

identifying priorities for the selection of such employers. However,

Local Boards may consider these and other factors in selecting

employers to provide training opportunities that will assist in their

efforts to provide services that meet or exceed the performance

objectives regarding employment leading to self sufficiency and job

retention. No change has been made to the Final rule.

Commenters recommended that the regulations be revised to eliminate

from consideration for an OJT contract or for customized training any

employer which has violated: anti-discrimination statutes; labor and

employment laws; environmental laws; or health and safety laws.

Response: We concur that Federal grant funds should not be used to

engage employers that have violated Federal law. Such information

should be available under information requirements at 29 CFR 37.38(b).

We encourage States and Local Boards to require a written assurance by

a potential employer, that no such violations have occurred within some

reasonable period of time. It would also be appropriate to obtain

written assurance from the employer that the training to be provided

will be in accordance with WIA Sec. 181(a)(1)(A) and Sec. 667.272 for

wage and labor standards, and WIA Sec. 181(a)(2) and Sec. 667.274(a)

for health and safety standards.

29 CFR 37.20(a)(1) contains an assurance regarding

nondiscrimination and equal opportunity. Under 29 CFR 37.20(a)(2), this

assurance is considered incorporated by operation of law, and may be

incorporated by reference, in documents that make WIA Title I financial

assistance available, such as OJT contracts.

A commenter recommended that we add a requirement that employers be

required to retain, or transition to new upgraded jobs with wages and

benefits commensurate with their new skills, those workers who receive

customized retraining.

Response: WIA Sec. 181(b)(2) and 20 CFR 667.270 establish

safeguards for workers to ensure that participants in WIA employment

and training activities do not displace other employees. These

protections may affect immediate opportunities for workers receiving

customized training to ``transition to new upgraded jobs.'' However,

Local Boards may establish policies concerning the selection and non-

selection of employers for the OJT and customized training programs. We

encourage the development of policies that maximize the opportunities

presented by funding upgrade skill training on-site, which, upon

completion of the training, will result not only in a more highly

skilled workforce, but also in new entry level jobs for additional

program participants.

We have made no change to the regulations.

A commenter requested that the regulations require that a system be

in place to assure that customized training funds are used to

supplement rather than supplant an employer's own training.

Response: We do not believe it is necessary to require such a

system. With the limited funding available for training, issues of

maintenance of effort or substitution of public funds for training

previously funded by the employer will most likely be considered an

important factor in a local or state policy for the selection of

employers for customized training. We have made no change to the

regulations.

A commenter suggested that the performance outcomes of employers

who have OJT contracts should be considered public documents and made

available for review and comment. At the same time, the commenter

cautioned that the confidentiality of participant records must be

preserved.

Response: Performance information on providers of OJT and

customized training is collected and disseminated under the eligible

provider requirements of Sec. 663.595.

A commenter recommended that we modify the regulations to require

that local programs conduct retention services with individuals placed

in OJT to determine whether the OJT requirements and nondiscrimination

and other employment rights are satisfied.

Response: As discussed above, all OJT contracts are subject to the

worker protection requirements set forth in WIA sections 181(a)(1) (A)

and (B), (b) (2), (3), (4) and (5), and 188. In addition, we believe

that monitoring of OJT contractors must include review of selection

patterns and other areas of potential concern regarding trainees' civil

and other employment rights (consistent with the requirements of 29 CFR

37.54(d)(2)(ii)) to ensure the quality of the One-Stop operator's

selection of training opportunities. No change has been made to the

regulations.

A commenter suggested that to assure compliance with WIA section

181(b)(7), OJT and customized training contracts be required to include

a provision guarantees that customized training funds or subsidies will

not be used directly or indirectly to assist, promote or deter union

organizing.

Response: We don't believe it is appropriate to mandate the

inclusion of a particular provision in these contracts. However, we

have specifically identified this prohibition in new Sec. 663.730 to

ensure that this information is readily available to practitioners.

Several commenters urged that we drop the requirements in

Secs. 663.705 and 663.720, that in order for employed workers to be

determined eligible for OJT and for customized training they must not

be earning a self-sufficient wage as determined by the Local Board. The

commenters observed that there is no specific wage criterion on OJT and

customized training eligibility in WIA, and that it would limit

customized training available for skill upgrading for new technology

and new job skills noted in Sec. 663.720(c). The commenters believed

that such a limitation on customized training could also affect the

linkages with employers and economic development efforts.

Response: The Act, in sections 134 (d)(3)(A)(ii) and (d)(4)(A)(i),

provides that one of the eligibility criteria for intensive and

training services for employed individuals is that they need such

services in order to obtain or retain employment that allows for self-

sufficiency. These criteria enable employed adults in entry level jobs

to receive those services to initiate the steps toward a career or to

obtain those skills necessary to improve their earning capacity in

another job to assist them in attaining self-sufficiency. Therefore, no

change has been made to the Final rule. However, this eligibility

requirement does not apply to training provided as part of the

Statewide workforce investment activities under 20 CFR 665.210(d),

which provides for establishing and implementing innovative incumbent

workers training programs.

We received a comment requesting that we add language to the

regulations to assure that labor organizations who operate training

programs be considered eligible to operate customized training

programs.

Response: The definition of customized training, at Sec. 663.715,

does not limit providers of customized training to employers, but

provides that it be ``conducted with a commitment by the employer to

employ an individual on successful completion of the training, and * *

* for which the employer pays for not less than 50 percent of the

training.'' Neither the Act nor regulations preclude any specific

organization which meets the criteria established by local areas from

being a provider of a customized training program. Because a wide range

of programs and providers are available, we have decided not to

identify any specific type of program or provider in the regulations.

Subpart H--Supportive Services

1. Flexibility in the Provision of Supportive Services: The

regulations in subpart H define the scope and purpose of supportive

services and needs related payments and the requirements governing

their disbursement. Supportive services include transportation, child

care, dependent care, housing and needs-related payments that are

necessary to enable an individual to participate in activities

authorized under WIA title I. We also strongly encourage Local Boards

to establish linkages with programs such as child support, EITC, Food

Stamps, Medicaid, and the Children's Health Insurance Program, which

also serve as key supports for customers making the transition to self-

sufficiency. A fundamental principle of WIA is to provide local areas

with the authority to make policy and administrative decisions as well

as the flexibility to tailor the workforce investment system to meet

the needs of the local community. To ensure this flexibility, the

regulations afford local areas the discretion to provide supportive

services as they deem appropriate with limitations only in the areas

defined in the Act. Local Boards are required to develop policies and

procedures addressing coordination with other entities to ensure non-

duplication of resources and services, as well as any limits on the

amount and duration of such services. Attention should be given to

developing policies and procedures that ensure that the supportive

services provided are not available through other agencies and that

they are necessary for the individual to participate in title I

activities.

We received a comment suggesting that States must be encouraged to

provide incentive and performance rewards to those local areas which

provide substantial supportive services.

Response: States certainly may choose to spend Statewide reserve

funds on this type of incentive award. However, we believe that

amending the regulations to encourage States to provide incentive and

performance rewards to local areas for supportive services is not

consistent with the principle of granting discretion to Local Boards to

determine the appropriate mix of services, including provision of

supportive services, for their area based on their assessment of local

needs and resources. No change has been made to the regulations.

A comment asked that the local supportive services policy be

required to address service delivery and procedures for referrals.

Response: Although Local Boards are required to adopt policies that

ensure coordination of any supportive services provided, we have not

mandated that the policy specifically address the delivery of such

services. The inclusion of such a mandate, or the substitution of

``must'' for ``should'' with respect to referral procedures in the

context of this regulation would be inconsistent with the principle of

granting local discretion in the provision of supportive services. No

change has been made to the Final rule.

2. Needs-Related Payments: Sections 663.815 through 663.840 address

requirements relating to needs-related payments. Section 663.825, in

particular, deals with needs-related payments to dislocated workers.

Studies show that early entry into training for dislocated workers who

require it is a key factor in reducing the period of unemployment

during the adjustment process. Early intervention strategies and

policies are best implemented through quality rapid response assistance

which includes comprehensive core services, and the provision of other

reemployment assistance, including intensive and training services, as

soon as the need can be identified, preferably before layoff. The

statute authorizes all levels of assistance under title I of WIA to

many workers six months (180 days) before layoff, or at least as soon

as a layoff notice is received. Providing these workers with access to

quality information regarding all adjustment assistance available in

the community, including any deadlines that must be met, is critical

for workers to make intelligent reemployment choices. Thus, any

concerns that the enrolled in training requirement may limit the number

of dislocated workers who are eligible for needs-related payments can

be resolved through the use of early intervention strategies.

A commenter asked that the regulations be changed to require that

Local Boards must fund supportive services, and, particularly, needs-

related payments, when other resources are not available.

Response: WIA, at Section 134(e) (2) and (3) lists supportive

services and needs-related payments as permissible employment and

training activities. Although we agree that supportive services and

needs-related payments should be provided with WIA funds when other

funds are not available, we also recognize that WIA recognizes that

Local Boards or One-Stop operators may have to make hard decisions

about the use of limited WIA resources. To enable them to make these

hard decisions, WIA makes the provision of supportive services a

discretionary decision. It would be inconsistent with the Act and with

our principle of maximizing flexibility to create the requirement the

commenter requests. No change has been made to the regulations.

However, as a matter of policy, we will follow State and local policy

with respect to provision of needs-related payments to dislocated

worker program participants under national emergency grants operating

in a local area.

A commenter noted the different time requirements for training

enrollments for TAA and NAFTA-TAA, as compared to WIA, and asked that

the requirements be aligned to permit more complete assistance to

dislocated workers eligible for TAA and NAFTA-TAA.

Response: The eligibility requirements for TAA benefits and needs-

related payments are established by different authorizing statutes, and

may not be changed by these regulations. As also noted above, early

entry into training for dislocated workers needing it is a key

determinant in reducing an individual's period of unemployment.

We received two other comments about the eligibility requirements

for dislocated workers to receive needs-related payments found in

Sec. 663.825. One comment indicated that references to TAA seemed to be

intended for TRA. A second comment noted a missing reference to

training as an eligibility requirement for needs-related payments by

those dislocated workers who are unemployed and who did not qualify for

unemployment compensation or trade readjustment allowances.

Response: Section 663.825 has been revised to change the incorrect

reference to ``trade readjustment assistance'' to ``trade readjustment

allowances.'' However, difference in eligibility criteria for

individuals who did not qualify for unemployment insurance or trade

readjustment allowances is required by WIA section 134(e)(3).

One comment was received in regard to Sec. 663.840 asking that all

needs-related payments and support services ``packages'' be required to

be comparable to the applicable weekly level of the unemployment

compensation benefit.

Response: WIA sets a maximum level for needs-related payments, but

does not specify a minimum level. As noted previously, we do not think

it is appropriate to limit the flexibility granted to States and local

areas by statute.

Part 664--Youth Activities Under Title I

Introduction

The regulations for youth activities reflect the intent of the

legislation by moving away from one-time, short-term interventions and

toward a systematic approach that offers youth a broad range of

coordinated services. This includes opportunities for assistance in

academic and occupational learning; development of leadership skills;

and preparation for further education, additional training, and

eventual employment. Rather than supporting separate, categorical

programs, the regulations for youth activities are written to

facilitate the provision of a menu of varied services that may be

provided in combination or alone at different times during a youth's

development.

The youth council, (the local entity responsible for recommending

and coordinating youth policies and programs), a new entity created in

WIA, serves as a catalyst for this broad change. The regulations

support that legislative intent.

Flexibility for local program operators to conduct youth programs

is key to WIA and these regulations. We encourage local decision-making

in developing policy, youth program design within the statutory

framework, and determining appropriate program offerings for each

individual youth. We expect that these programs and activities will

provide needed guidance for youth that is balanced with appropriate

consideration of each youth's involvement in his or her training and

educational plan. Further, the regulations support strong connections

between youth program activities and the One-Stop service delivery

system, so that youth learn early in their development how to access

the services of the One-Stop system and continue to use those services

throughout their working lives.

Subpart A--Youth Councils

Subpart A explains the purpose of youth councils which are created

at section 117(h) of the Act and discussed in 20 CFR 661.335 and

661.340 of the local governance regulations in part 661. The youth

council is a new feature of the workforce investment system that helps

develop youth employment and training policy, brings a youth

development perspective to the establishment of that policy,

establishes linkages with other local youth services organizations, and

takes into account a range of issues that can have an impact on the

success of youth in the labor market.

There were several comments about the youth councils. One commenter

suggested requiring that the youth council include representatives from

organized labor, particularly from recognized apprenticeship programs

and teachers' unions.

Response: As stated in WIA section 117(h)(1), members of the youth

council are appointed by the Local Board in cooperation with the chief

elected officials(s) (CEO) in the local area. Among other categories of

youth council representatives, paragraph (2) of WIA section 117(h)

states that the youth council must include Local Board members

described in paragraph (A) or (B) of section 117(b)(2) with special

interest or expertise in youth policy. Therefore, union members

(including those who may be from recognized apprenticeship programs or

teachers' unions) who are members of the Local Board and have an

interest or expertise in youth issues may be appointed to the youth

council under this provision. Additionally, clause (B) of WIA section

117(h)(2) provides that the chairperson of the Local Board, in

cooperation with the CEO's, may appoint other ``appropriate''

individuals to the youth council. In short, the Act already provides

avenues through which representatives of organized labor may be

appointed to the youth council. Because we believe that local areas

should have as much discretion as possible in selecting members of the

youth council to best serve their communities, we do not feel it is

appropriate to prescribe requirements in addition to those in the Act.

No change has been made to the regulation.

Other commenters asked that we require that youth be included as

full members of these councils at all levels. A number of other

commenters encouraged us to require that youth with disabilities are

members of the youth councils

Response: While there is no specific requirement for the

appointment of youth, including youth with disabilities, to the youth

council, there is also no prohibition to naming them to the youth

council. In fact, 20 CFR 661.335(a) requires representation by

individuals with experience relating to youth activities and 20 CFR

661.335(c) authorizes the Local Board Chair and CEO to appoint such

other individuals as they determine appropriate. Either of these

provisions could support the appointment of youth, including

participants and youth with disabilities, to the youth council.

Furthermore, WIA section 129(c)(3)(C) and Sec. 664.400(f) provide that

Local Boards must ensure that youth participants are among the

individuals who are involved in both the design and the implementation

of its youth program. Youth with disabilities may, of course, be

included among the youth participants who are designated to be involved

in this process. We agree with the commenters that Local Boards should

seek to involve a diverse cross-section of its youth population in the

planning and design of activities, however, we feel that adding

additional youth council requirements beyond those already in the Act

and the regulations, is neither necessary nor appropriate. As discussed

above, we believe that local areas should have as much discretion as

possible, in selecting members of the youth council to best serve their

communities. The issue of youth council membership is also discussed in

20 CFR 661.335, as well as the preamble discussion of that section. No

change has been made to the regulations.

Section 664.110 discusses oversight responsibilities for youth

programs and activities. Working with the youth council, the Local

Board has responsibility for oversight of youth programs. As required

by WIA section 117(d)(4), Sec. 664.110(b) requires local program

oversight to be conducted in consultation with the CEO. In order to

make Sec. 664.110(c) consistent with Sec. 664.110(b), a commenter

recommended revising Sec. 664.110(c) to add that the Local Board should

consult with the CEO about delegating its responsibility for oversight

of youth programs to the youth council.

Response: We agree that it may be advantageous for Local Boards, in

consultation with local area CEO, to delegate the responsibility for

oversight of youth programs to youth councils which have expertise in

youth issues, as is permitted by Sec. 664.110. Section 664.110(c) has

been revised to reflect this comment.

A commenter requested that we provide guidance to youth councils on

identifying and certifying eligible non-traditional training providers

to ensure that youth are able to pursue non-traditional employment. The

commenter feels that more information is needed on non-traditional

training, specifically guidance on non-traditional employment for

women.

Response: We support the idea that local youth programs can benefit

by making non-traditional training opportunities available to

participants, and encourage States to consider non-traditional service

providers among the lists of service providers designated in local

areas. In addition, should the need arise, we will consider addressing

the issue of non-traditional training providers and eligible providers

list through subsequent guidance and technical assistance. At this

time, however, we do not see a need for additional guidance.

Subpart B--Eligibility for Youth Services

Subpart B provides regulations under which youth are determined

eligible for WIA youth services. A commenter requested that we amend

the criteria in Sec. 664.200 so that a low-income youth, regardless of

any other barriers may participate in the youth employment programs

funded through WIA. The commenter feels that youth served by their

agency do not meet the barrier to employment eligibility criteria to

allow them to participate in WIA youth activities.

Response: We cannot accommodate the commenter's concerns. The Act

specifically requires that, to be determined eligible, a low income

youth must have at least one of the barriers listed in section

101(13)(C) of the Act and Sec. 664.200(c) of the regulations.

We received a comment suggesting that we make the definition of

basic literacy skills at Sec. 664.205 consistent with the definition of

basic skills deficient in section 101(4) the Act, in order to eliminate

confusion.

Response: Section 664.205 is revised to better align the definition

of these two terms by using the same grade level criterion for both

terms. While we made changes to better align the definitions, the two

terms are not identical. Section 101(4) of the Act refers to a

definition of basic skills deficient for use as one of the categories

of youth not meeting the income eligibility test who may be served with

up to 5% of youth funds, as well as one of the standards for

determining ``out-of-school-youth.'' Section 664.205 addresses the

criterion for documenting general eligibility when determining whether

youth are deficient in basic literacy skills. The regulatory definition

of ``deficient in basic literacy skills'' is based on the statutory

definition of the term ``literacy'' found in WIA section 203 and cross-

referenced in WIA section 101(19). Therefore, the terms and their

definitions are not identical. However, Sec. 664.205(a) provides

authority for States and local areas to define the term ``deficient in

basic literacy skills,'' so long as certain minimum criteria are met.

The flexibility provided at Sec. 664.205(a) as revised, would allow

States and/or local areas which choose to do so to define the term in a

way in which an individual who is determined to be ``deficient in basic

literacy skills'' on the basis of the grade level criteria, will also

be considered to be ``basic skills deficient'' for purposes of

determining whether the out-of-school youth or 5% youth standards

are met.

Under section 101(13)(C)(vi) of the Act, a low income youth is

eligible for services if he or she requires additional assistance to

complete an educational program, or to secure and hold employment. We

envision that Local Boards will define this term, however, under

Sec. 664.210, if the State sets policy regarding this provision, the

policy must be described in the State Plan.

Section 664.215 requires that all youth participants be registered

by collecting information for supporting eligibility determinations, as

well as Equal Opportunity (EO) data. We received a number of comments

asking that we make the policy that all youth must be registered to

participate in youth programs consistent with the adult policy,

allowing the same exceptions to the registration requirement.

Response: While these commenters feel that the registration policy

for youth and adults should be the same, we believe that the policy for

youth should not be changed because the basic approach for serving

youth differs from adults. The difference in the registration criteria

for youth and adults arises from the way in which an applicant enters

each program. WIA section 129(c)(1) makes it clear that each youth

participant is to have an assessment and a service strategy, activities

which would also require registration under the Adult program. An adult

may enter the One-Stop and receive only informational or self-help

services, for which registration is not required. The more

individually-focused youth program does not envision these kinds of

activities as part of entry. (Of course, a youth may avail him/herself

of informational or self-help services through the One-Stop.)

Therefore, no change has been made to this section of the regulations.

EO data must be collected for every individual who is interested in

being considered for WIA title I financially assisted aid, benefits,

services, or training by a recipient, and who has signified that

interest by submitting personal information in response to a request by

the recipient. See 29 CFR 37.4 (definition of ``applicant'') and 29 CFR

37.37. This includes all youth participants. We will issue further

guidance regarding this data collection requirement.

Section 129(c)(5) of the Act provides that up to five percent of

youth participants served in a local area may be individuals who do not

meet the income criterion for eligible youth, if they meet one or more

of the criteria specified in section 129(c)(5)(A) through (H) of the

Act, restated in the regulations at Sec. 664.220. Local Boards may

define the term ``serious barriers to employment'' and describe it in

the Local Plan. One commenter also supported WIA's requirements that

allow individuals with one or more disabilities, including learning

disabilities, to be eligible under the exception to permit five percent

of youth participants to be individuals who do not meet the income

criteria.

Section 664.240 explains that eligibility for free school lunches

is not a substitute for income eligibility under the Act. When drafting

the Interim Final Regulations, we received suggestions that program

operators be allowed to use eligibility for free lunch as a substitute

for determining eligibility under the Act, and encouraging us to seek a

technical amendment to include such a provision in the legislation.

Several commenters again made requests that we pursue a technical

amendment on the free lunch and reduced lunch eligibility issue and

suggested that eligibility for these programs be used to determine

eligibility for WIA youth services.

Response: We recognize the importance of this issue, yet lack

statutory authority to change the Act's income eligibility

requirements. Should such a change be made to the statute, Sec. 664.240

would be revised. We support a technical amendment in this area, and

have discussed the issue with Congressional staff.

Section 664.250 provides that a youth with a disability whose

family income exceeds maximum income levels under the Act may qualify

for services if the individual's own income meets the income criteria

established in WIA section 101(25)(F), or the eligibility criteria for

cash payments under any Federal, State or Local public assistance

program. (WIA section 101(25)(B).) One commenter strongly supported

WIA's recognition, in the Act and the regulations, of the need for

youth with disabilities to receive youth services.

Subpart C--Out of School Youth

Sections 664.300, 664.310, and 664.320 address issues related to

out-of-school youth. Section 101(33) of the Act defines ``out-of-school

youth'' as: eligible youth who are school dropouts or who have received

a secondary school diploma or its equivalent, but are basic skills

deficient, unemployed, or underemployed. ``School dropout'' is defined

in WIA section 101(39) and Sec. 664.310. Youth enrolled in alternative

schools are not school dropouts.

We received a number of comments requesting that we seek a

technical amendment to WIA that would allow youth attending alternative

schools to be included in the definition of ``school dropout.'' The

commenters felt that this would permit Local Boards to provide services

to more youth in alternative educational environments and to design

programs that take advantage of local resources and best meet the needs

of local youth.

Response: While we recognize the importance of local flexibility

and of serving youth in alternative school settings, we lack statutory

authority to change definitions established under the Act. However, we

have revised Sec. 664.310 to clarify that a youth's dropout status is

determined at the time of registration. Therefore, an individual who is

out-of-school at the time of registration and subsequently placed in an

alternative school, may be considered an out-of-school youth for the

purposes of the 30 percent expenditure requirement for out-of-school

youth.

We also received comments suggesting that Sec. 664.310 should make

it clear that, for the purposes of determining whether a youth in an

alternative school can be considered out-of-school, their dropout

status should be determined at the point of intake.

Response: We agree. Section 664.310 is revised to clarify that

dropout status is determined at the time of registration.

At least thirty percent of the total youth allocation (except for

local area expenditures for administrative purposes) must be spent on

services for out-of-school youth. This 30 percent, like the remaining

70 percent, need not be spent proportionally between summer and year-

round activities. The Local Board, in consultation with the chief

elected official, determines the distribution of funds. There is no

separate summer program under WIA. Therefore, there is no exemption

from the 30 percent requirement for funds spent on summer employment

opportunities. A single allocation of youth funds, at least 30 percent

of which must be spent on out-of-school youth, is available to local

areas for year-round and summer employment opportunities.

Subpart D--Youth Program Design, Elements, and Parameters

The features of the youth program design are outlined in section

129(c) of the Act. While the Act specifies three program design

categories and ten

program elements, it permits individual program design flexibility in

determining the definition, scope, and characteristics of the elements.

A commenter suggested that, to avoid confusion, we should clarify

the number of youth elements that are required and the entity

responsible for providing the ten elements. The commenter also

suggested replacing the term ``local program'' in Sec. 664.410 with

either ``local workforce investment board'' or ``local workforce

investment area'' to identify the entity responsible for making the ten

elements available.

Response: WIA requires that Local Boards must ensure that all ten

elements are available for youth in their local area. To provide

further guidance to assist Local Boards, we added a new Sec. 664.400 to

define the composition of a local youth program and to address the

difference between local programs and local program operators. This

definition clarifies that a local youth program must include all the

youth activities in a local area, irrespective of the number of

operators or alternative services. In addition, we redesignated

Sec. 664.400 of the Interim Final Rule as Sec. 664.405 and have added a

provision which we discuss below.

Redesignated Sec. 664.405 discusses the three categories required

under WIA section 129(c)(1) which provide the framework for youth

program design. They are: (1) An objective assessment of each

participant; (2) individual service strategies; and (3) services that

prepare youth for postsecondary educational opportunities, link

academic and occupational learning, prepare youth for employment, and

provide connections to intermediary organizations linked to the job

market and employers.

A commenter asked us to clarify that the requirement, in WIA

section 123, that eligible providers of only the ten required program

elements be identified by awarding grants or contracts on a competitive

basis, does not apply to the design framework component of the program.

Response: Eligible providers of the ten program elements must be

identified as required by WIA section 123; however, we have added a new

paragraph (a)(4) to the redesignated Sec. 664.405 to clarify that this

requirement does not apply to the design framework of local youth

programs when the grant recipient/fiscal agent is the provider of the

design framework activity. A similar exception in Sec. 664.610 also

applies to the grant recipient/fiscal agent's provision of summer

employment activities.

A commenter requested that we clarify that developing a career goal

for each youth could be part of the individual's service strategy

rather than an immediate requirement to identify a career goal because

many young people 14 years and above do not know what they want to do.

Response: We agree that developing a career goal may be part of an

individual service strategy rather than an immediate requirement for

younger youth. However, setting goals for younger youth may reflect a

career interest. Goals may change as a youth ages and interests broaden

as a result of participation in workforce development activities.

Therefore, we believe local program operators should encourage younger

youth to identify career interests which may serve as a career goal. We

have added the phrase ``age-appropriate'' to redesignated

Sec. 664.405(a)(2) to clarify that the career goals selected should

appropriate for the age of the youth participant.

Redesignated Sec. 664.405(c) requires Local Boards to establish

linkages to entities that will foster the participation of eligible

youth. We received several comments stating that youth programs should

be designed to address the needs of teen parents (such as child care,

flexibility in schedule), to combat the occupational segregation which

contributes to low wages of women and that training should be evaluated

for access to non-traditional jobs and career paths for women and

girls. The commenters also suggested that we add language to this

section to provide for linking youth programs with educational

institutions, child care facilities, and other entities to meet women-

specific needs.

Response: The final regulations, in redesignated

Sec. 664.405(a)(3), provide for linking youth programs with other

entities to assist youth. Examples of linkages are listed in

Sec. 644.405(c), but the list is not exhaustive. Local Boards must

ensure that there are appropriate links to entities that will foster

the participation of eligible local area youth. Program operators may

link their programs to entities such as local high schools, alternative

schools, childcare agencies, vocational programs, and two-and four-year

postsecondary institutions that provide services to address the

specific needs of the targeted population, including teen parents, for

eligible youth services. We agree with the commenters about the

importance of these linkages in fostering the participation of eligible

youth, however, we do not want to be overly prescriptive, decreasing

the discretion of local areas in making such decisions. No change has

been made in the final regulations.

Section 129(c)(3) of the Act requires that Local Boards ensure that

eligible youth receive information and referrals, including information

on the full array of appropriate services available to them and

referrals to appropriate training and educational programs. Youth

program providers must ensure that eligible applicants who do not meet

the enrollment requirements of their program or who cannot be served by

their program are referred for additional assessment and program

placement. This language is included in redesignated Sec. 664.405(d) to

emphasize the importance of referrals as a part of overall youth

program design. To further promote the concept of seamless One-Stop

service delivery, One-Stop operators are encouraged to send those youth

assessments that are completed at the One-Stop center to other training

and educational programs to which the youth is referred.

Section 129(c)(2) of the Act lists 10 program elements that must be

generally available to youth through local programs. A commenter asked

for clarification on the number of youth elements required and whether

these elements must be provided to every youth participant.

Response: Section 664.410(a) makes it clear that the Local Board

must ensure that all ten elements are available for youth in their

local area. However, Sec. 664.410(b) provides that a local program is

not required to provide all ten program elements to every participant.

Local program operators must determine what program elements will be

provided to each youth participant based on the participant's objective

assessment and service strategy. We envision that each youth will

participate in more than one of the ten program elements required as

part of any local youth program and all youth must receive follow-up

services. For example, even if it is determined appropriate that a

youth participate in only summer employment activities, he or she would

still receive at least 12 months of followup services. Followup service

requirements are fully described in Sec. 664.450. Since the regulations

address this issue, no change is necessary.

Sections 664.420 through 664.470 further define and discuss five

program elements: leadership development, positive social behaviors,

supportive services, followup services, and work experiences.

Under WIA section 129(c)(2)(F) and Sec. 664.410, youth programs

must make leadership development opportunities available. The Act gives

the following examples of leadership activities:

community service and peer-centered activities encouraging

responsibility and other positive social behaviors during non-school

hours. Some additional examples of leadership development activities

are listed in Sec. 664.420 which elaborates on the definition of

leadership development opportunities. The development of leadership

abilities might address team work, decision making, personal

responsibility, and citizenship training, as well as positive social

behavior training in areas such as positive attitudinal development,

self-esteem building, cultural diversity training, and other skills and

attributes that would help youth to lead effectively, responsibly, and

by example.

One commenter suggested that the examples of leadership development

opportunities should include actual opportunities for youth to assume

leadership roles, such as: involving participants in program governance

and decision making, entrepreneurship training and peer leadership

opportunities.

Response: The examples of leadership development and positive

social behaviors in Sec. 664.420 are not intended to be all inclusive,

they are merely examples. Other kinds of leadership development

opportunities may be provided at the discretion of the Local Board. The

commenter provides good examples of the types of leadership development

opportunities Local Boards may want to consider when designing their

local youth programs. No change has been made in the final regulations.

A commenter suggested that the rules define ``positive social

behaviors'' and make it clear that positive social behaviors are

outcomes of leadership opportunities. The commenter recommended a new

definition of positive social behavior which includes some of the

following activities: maintaining healthy lifestyles, including being

drug and alcohol free; maintaining positive relationships with

responsible adults and peers; contributing to the well-being of one's

community; voting; being committed to learning and academic success;

remaining non-delinquent; and postponed and responsible parenting.

Response: We have added these suggestions to the list of positive

social behaviors in Sec. 664.430 because we think that the original

list of examples was too narrow to reflect the full range of positive

social behaviors. As a technical correction, we have removed the phrase

``but not limited to'' from this section. This does not change the

meaning of this provision. Here, as throughout the regulations, the

term ``include'' is used to indicate an illustrative, but not

exhaustive list of examples.

Another of the ten required program elements is supportive

services. Section 101(46) of the Act defines supportive services to

include services such as transportation, child care, dependent care,

housing, and needs-related payments, that are necessary to participate

in activities authorized under title I of the Act. Section 664.440

elaborates on the definition of supportive services as it applies to

youth. Such services may include: linkages to community services;

referrals to medical services; and assistance with work attire and

work-related tool costs, including such items as eye glasses and

protective eye gear. Child support, EITC, Food Stamps, Medicaid, and

the Children's Health Insurance Program are among the programs with

which Local Boards are encouraged to coordinate. We have made a slight

modification to this section which previously referred to assistance

with transportation, dependent care and housing ``costs''. We have

removed the reference to ``costs'' for the services since WIA title I

funds may be used to provide services such as on-site child care as

well as to directly provide or reimburse the costs of these services.

Section 664.450 requires that followup services be provided to all

youth participants for not less than 12 months after the completion of

participation, as appropriate. The appropriate scope of followup

services must be based on the needs of the individual participant.

Followup services have proved to be effective. Evaluation studies such

as Abt Associates' Final Report on the National JTPA Study, have shown

disappointing results for short-term job training programs for youth.

In contrast, programs such as STRIVE and the Children's Village have

shown much success with longer-term followup strategies. A 1993 study

by MDRC showed that the programs of the Center for Employment Training,

which feature close ties to the private sector and a strong job

placement component with followup with employers, increased the

earnings of enrollees by $3,000 a year over a control group during the

last two years of a four-year evaluation.

Section 664.450(a)(1) provides that followup may include leadership

development or supportive service activities, as well as other

allowable activities, and provides additional examples of permissible

followup services. The list is intended to present examples of followup

services; other types of followup services may be determined at the

local level.

Section 664.450(b) clarifies that all youth participants must

receive some form of followup services. Such services must be for a

minimum of 12 months. Followup services for youth who participate in

only summer employment activities may, however, be less intensive than

for those youth who participate in other types of activities. Program

operators are encouraged to consider the intensity of the services

provided and the needs of the individual youth in determining the

appropriate level of followup services.

A commenter suggested revising the sentence referring to less

intensive followup services for youth who have only participated in

summer employment opportunities, to say that the scope and intensity of

these followup services should be consistent with each participant's

individual service strategy.

Response: Section 664.450(b) already states that the types of

services provided and the duration of services must be determined based

on the needs of the individual. Therefore, we do not feel that further

clarification is required. Local programs will make the determination

on the intensity of followup services. However, we will provide

additional guidance on other aspects of this subject through our

regular system of communication to States and local areas for States

that may need technical assistance.

Sections 664.460 and 664.470 address work experiences for youth.

Work experiences are planned, structured learning experiences that take

place in a workplace for a limited period of time. The regulations do

not specify a particular time limit for work experiences. A commenter

requested that we place a maximum time limit on work experiences (no

more than 30 days), and require that all work experiences be paid, with

priority given to employers who have evidenced a commitment to training

for their own workers and union management approaches to training.

Response: We agree that Local Boards should make a point of

establishing work experiences opportunities for youth with employers

who have demonstrated quality approaches to training and labor

management, but do not think it is necessary to mandate this approach.

We believe, however, that establishing a regulatory time limit,

requiring that all work experiences be paid and giving priority to

select employers is inconsistent with principle of local flexibility in

designing programs. No change has been made in the final regulations.

As provided in Section 129(c)(2)(D) of the Act, work experiences

may be paid or unpaid, as appropriate. A commenter suggested that we

clarify that work experiences are appropriate and desirable activities

for many youth throughout the year.

Response: We agree and have added the suggested language to

Sec. 664.460(c).

Section 664.460 provides that work experiences may be in the

private for-profit sector, the nonprofit sector, or the public sector,

and gives examples of the types of activities that work experiences may

include, such as internships and job shadowing. A few commenters

recommended adding other examples to Sec. 664.600 to expand the types

of acceptable work experiences. They suggested that the definition of

work experiences should make it clear that paid or unpaid community

service programs, such as youth services or conservation corps, are

valid examples of work experiences, and suggested that language be

added to encourage Local Boards to maximize the use of paid work

experiences in summer conservation corps programs managed by qualified

State, local, non-profit or Federal agencies, as key element or

strategy. In addition, a commenter proposed that the regulations

encourage Local Boards to maximize collaboration with federal agencies

that operate summer youth conservation corps program.

Response: We agree that paid and unpaid community service programs

may be appropriate types of work experiences for youth, and have

amended the list of examples in Sec. 664.460(c) to include them.

However, while we agree that youth conservation corps may be one of the

programs in which WIA youth participants gain work experiences, we have

refrained from identifying particular types of program providers

throughout the regulations. Therefore, consistent with the principle of

maximizing State and local discretion, we have not specified this

program in the regulations.

A few commenters also endorsed the principle that decisions

regarding OJT for youth participants should be left to Local Boards.

Response: We agree that the decision about when to provide OJT to

youth under age 18 should remain a decision left to Local Boards. While

OJT is not an appropriate activity for most youth under age 18, local

programs may choose to use this service strategy for such youth based

on the needs identified in an individual youth's objective assessment.

Since Sec. 664.460(d) provides for local discretion in deciding when to

use OJT, based on a youth's service strategy, no change is made to the

regulations.

Section 664.470 provides that youth funds may be used to pay the

wages of youth in work experiences, including in the private, for-

profit sector, under conditions designed to protect youth and incumbent

workers when the purpose of the work experiences is to provide youth

with opportunities for career exploration and skill development and not

to benefit the employer. If an unpaid work experience creates an

employer/employee relationship, federal wage standards may apply. This

relationship is determined under the Fair Labor Standards Act.

One commenter asked that we clarify the statement that the purpose

of work experiences is not to benefit the employer although the

employers may, in fact, benefit from activities performed by the youth,

stating that Sec. 664.460 (c) is ambiguous.

Response: The intent of work experiences is to provide youth with

opportunities for career exploration and skill development and to

enhance their work readiness skills in preparation for employment.

While this is the primary objective of work experiences, we recognize

that the employer may also receive some benefit in the form of work

being done or of recruiting a potential new employee. We believe that

the regulations adequately explain this; therefore, no change has been

made to the regulations.

Subpart E--Concurrent Enrollment

Under the criteria of section 101(13) of the Act, an eligible youth

is an individual 14 through 21 years of age. Adults are defined in

section 101(1) of the Act as individuals age 18 and older. Section

664.500(b) clarifies that eligible youth who are 18 through 21 years

old may participate in youth and adult programs concurrently, as

appropriate for the individual. Such individuals must meet the

eligibility requirements under the applicable youth or adult criteria

for the services received. Local program operators must identify and

track the funding streams for services provided to individuals who

participate in youth and adult programs concurrently, ensuring non-

duplication of services.

A commenter asked that we make it clear that out-of-school youth

may enroll in adult programs under Titles I and Title II of the Act.

Response: We have revised paragraph (b) of Sec. 664.500 to clarify

that concurrent enrollment is allowable for youth served in the adult

program, dislocated worker program, adult education programs under

title II of WIA, and other programs, in order to broaden options for

serving youth.

A commenter suggested that youth co-enrolled in both youth and

adult programs should also be offered the complete services available

to youth.

Response: We think the regulations already cover this suggestion

since youth enrolled in youth programs must receive an individual

assessment and service strategy based on their need, regardless of

whether they are co-enrolled in an adult program. The service strategy

should consider all the service options available under both the youth

and adult programs.

Section 664.510 provides that ITA's are not an authorized use of

youth funds. One commenter stated that WIA is silent on the use of

ITA's for youth and this should be a State or local decision. This

commenter felt that since it is allowable to enroll 18 year old youth

in both youth and adult programs, the use of ITA's should be allowed as

an activity for 18-21 year old youth enrolled only in youth funded

activities. Another commenter asked that we reverse the rule

disallowing ITA's for youth participants not eligible for training

services under the adult and dislocated worker programs.

Response: The ITA is the currency of a market-based system that

enables adults and dislocated workers to select the service providers

most suited to their needs based on information about the past

performance of such providers. While the Act does not mention ITA's in

its youth provisions, it does require that providers of the ten

required youth program elements be competitively selected. The

competitive selection requirement effectively precludes the use of

ITA's since providers are selected by the Local Board, rather than by

the participant. Thus, because the supply of providers may be limited,

we interpret the Act to preclude ITA's for youth below age 18. Youth

aged 18 through 21 can access ITA's under the adult or dislocated

worker program, if appropriate. Accordingly, we have not changed this

section.

Subpart F--Summer Employment Opportunities

Subpart F provides clarification about summer employment

opportunities for youth. Commenters expressed concern that WIA does not

have a separate funding authorization for summer youth employment and

training programs. A commenter also felt that without a separate

authorization, the summer youth employment program could find

itself in some peril in the future and suggested that regulatory

language be added to preclude any diminution in this highly important

activity.

Response: The commenters are correct that the summer youth

employment and training program is no longer a separately funded

activity. Rather, summer employment opportunities are intended to be

part of a comprehensive array of services available to youth in a local

area. Although all Local Boards must offer summer employment

opportunities for eligible youth as one of the ten required program

elements listed in WIA section 129(c)(2) and Sec. 664.420, the

proportion of youth funds used for summer employment is determined by

the Local Board in consultation with the chief elected official.

Section 664.600 elaborates on the activities that must be included in

all summer employment opportunities, including direct linkages to

academic and occupational learning, as well as followup services for at

least 12 months. Accordingly, we believe it would be contrary to the

intent of the Act and inconsistent with local flexibility to regulate

the level of activity required for any of the ten program elements,

including the summer youth employment opportunities. We will, however,

work with States and local areas to assist them with making the

transition to providing summer employment activities as part of a

comprehensive system of youth services. For example, we issued Training

and Employment Guidance Letter (TEGL) 3-99 in January 2000, to provide

guidance to States and local areas on implementing comprehensive youth

services under title I of WIA during the summer of 2000. This guidance

is available on the Internet at www.usworkforce.org. Therefore, a

change in the regulations is not necessary.

A commenter also asked that a new paragraph (e) be added to

Sec. 664.600 to require each local area to report yearly on the number

of youth participants who are provided summer employment opportunities.

Response: Section 183 of the Act authorizes the Secretary to

monitor all recipients of financial assistance, which would include

grant recipients that operate summer employment activities. We are in

the process of developing a reporting system to collect information on

WIA participants, youth participants will be included in the reporting

system. This reporting system will include information on how many

youth participants participated in summer employment opportunities, as

well as the characteristics of those participants. Since this issue is

being addressed in the reporting arena, no change is made to these

regulations. In addition, Training and Employment Guidance Letter

(TEGL) 14-99, transmitting instructions for the WIA Transition Summer

Report addresses these issues. The TEGL was issued on June 12, 2000 and

can be found on the Internet at www.usworkforce.org.

We received numerous inquiries about whether the Act would allow

cities and counties to continue to operate their summer employment

opportunity activities.

Response: Section 664.610 provides that this practice is still

allowed when the local chief elected official is the grant recipient/

fiscal agent. It clarifies that if summer employment opportunities are

provided by entities other than the grant recipient/fiscal agent, then,

under WIA section 123, the providers must be selected by awarding a

grant or contract on a competitive basis, based on recommendations of

the youth council and on criteria contained in the State Plan. Thus, a

city or county may continue to operate the summer employment

opportunities component of the youth program, and is not required to

engage in a competitive selection process for that component, if it

acts as the grant recipient/fiscal agent for the Local Area. However,

under WIA section 123, providers must be selected on a competitive

basis if providers other than the grant recipient/fiscal agent provide

the summer employment opportunities component of the local youth

program.

A commenter also suggested that we clarify that local government

units operating summer youth employment opportunities as a consortium

may provide summer youth opportunities without competitive bidding.

Response: We agree and have revised Sec. 664.610 to specifically

recognize consortia of local governments.

One commenter requested that we allow the selection of private

sector unsubsidized employment opportunities to be excluded from the

competitive process.

Response: We agree and Sec. 664.610 has been revised accordingly.

Some commenters suggested that the description of summer youth

employment should make it clear that youth service and conservation

corps constitute valid summer employment opportunities. They also

recommended that we encourage Local Boards to maximize collaboration

with Federal agencies that operate summer youth conservation corps

programs.

Response: In our discussion of Sec. 664.460, we have identified

youth conservation corps and youth service corps as available work

experiences opportunities for youth. As such, placement with these

programs as part of summer employment opportunities may also be

appropriate. However, we do not believe it is necessary to specifically

identify these programs in the regulations.

The core indicators specified in section 136 of the Act apply to

the youth program as a whole, including all youth program activities.

This is consistent with the intent of the Act to move from a focus on

separate, categorical programs to a more systematic approach to

workforce investment and serving the needs of youth. Summer employment

opportunities, then, are to be viewed as one element among many

available to youth as a part of a menu of activities offered by the

Local Board. Section 664.620 indicates that participants in summer

activities, as part of the overall youth program, are required to be

included in the same core indicators of performance as the other youth

activities.

A commenter thought that performance measures in Title I and Title

II should be the same for youth because youth can be simultaneously

enrolled in both programs.

Response: We agree that performance measures for federal education

and training programs should be coordinated to the extent possible. We

have held discussions with the Department of Education to identify

similar performance measures which would apply to both Title I and

Title II programs and will continue our joint efforts to harmonize

performance measures across programs.

Subpart G--One-Stop Services to Youth

Subpart G explains that the chief elected official (as the local

grant recipient for the youth program), is a required One-Stop partner,

is subject to the One-Stop provisions related to required partners,

described in 20 CFR part 662, and is responsible for connecting the

youth program and its activities to the One-Stop system. In addition to

the provisions of 20 CFR part 662, links between the youth program and

the One-Stop system may include those that facilitate:

- The coordination of youth activities;

- Connections to the job market and employers;

- Access for eligible youth to information and services; and

- Other activities designed to achieve the purposes of the

youth program.

Under section 134(d)(2) of the Act, adults have access to core

services in One-Stop centers without regard to eligibility. Adults are

defined under the Act as persons aged 18 and above. Section 664.710 of

the regulations clarifies that local area youth, including youth under

age 18 who are not eligible under the title I youth program, may

receive services through the One-Stop centers; however, services for

such youth must be funded from sources that do not restrict eligibility

for services, such as the Wagner-Peyser Act. We believe that WIA's

intent is to introduce youth, particularly out-of-school youth, to the

services of the One-Stop system early in their development and to

encourage the use of the One-Stop system as an entry point to obtaining

education, training, and job search services.

Commenters suggested that One-Stop Centers should make significant

efforts to make their programs and services accessible to youth and

work with local school systems to reach eligible youth. One of the

commenters also suggested amending Sec. 664.700(b)(2) to add the local

school systems to the linkage requirement, and to require One-Stops to

provide materials at low literacy and developmentally diverse levels.

To better serve participants of all ages, staff should be trained on

the developmental stages of youth and adulthood. A commenter also

stated that it is important that, in all cases, written material and/or

electronically accessed information available at one-stop centers and

throughout the system be written at no more than a fifth grade reading

level and, where appropriate, also available in languages other than

English spoken by a majority of potential customers.

Response: While neither WIA nor its implementing regulations

require any sort of reading level analysis for EO purposes, local areas

may consider providing written materials at low literacy and

developmentally diverse levels. The WIA nondiscrimination regulations,

at 29 CFR 37.35, set forth the specific obligations to provide services

and information in languages other than English. The level that

triggers the obligation to prepare non-English materials and services

in advance is ``a significant number or proportion of the population

eligible to be served or likely affected.'' Since One-Stop centers must

adhere to the 29 CFR part 37 Civil Rights regulations when adopting

such policies, no changes to Sec. 664.700 are necessary.

Subpart I --Youth Opportunity Grant Programs

This subpart explains that competitive procedures for awarding

Youth Opportunity Grants will be established by the Secretary. It also

restates statutory language about the eligibility of Local Boards and

other entities in high poverty areas to apply for Youth Opportunity

Grants. Provisions of the Act regarding eligibility for services under

Youth Opportunity Grants and the process for establishing performance

measures are clarified in Secs. 664.800 to 664.830. We view these

grants as a distinct opportunity to provide a variety of needed

services to youth in high poverty areas, building on the current

successful activities and innovations already at work in many

communities.

Part 665--Statewide Activities Under Title I of the Workforce

Investment Act

Introduction

This part addresses the funds reserved at the State level for

statewide workforce investment activities under WIA sections 128(a) and

133(a)(2).

Subpart A--General Description

Subpart A provides a general description of Statewide activities

conducted with the up to 15 percent of the funds which the Governor may

reserve from the youth, adult and dislocated worker funding streams

(``15 percent funds''), and the up to an additional 25 percent of

dislocated worker funds which the Governor may reserve for Statewide

activities.

Section 665.110(b) explains that the 15 percent reserved funds may

be pooled and expended on workforce investment activities without

regard to the source of the funding. For example, funds reserved from

the adult funding stream may be used to carry out Statewide youth

activities and vice versa. We believe that the use of these funds can

provide critical leadership in the development and continuous

improvement of a comprehensive workforce investment system for each

State and, as a result, create a national system to which job seekers

and workers can look to for expert assistance, and employers can look

to for a qualified workforce. This issue is also addressed in 20 CFR

667.130(b).

We did not receive any comments on this subpart and no changes have

been made in the final regulations.

Subpart B--Required and Allowable Statewide Workforce Investment

Activities

Subpart B discusses required and optional activities conducted with

funds reserved from the three title I funding streams (youth, adults,

and dislocated workers).

1. Required Activities: Section 665.200 identifies the eight

activities each State is required to carry out with its reserved funds

from the three funding streams. The Governor must reserve funding for

these activities, but has discretion to determine the amount reserved,

up to the maximum 15 percent of each funding stream. One authorized use

of these funds is administration, subject to the five percent

administrative cost limitation at 20 CFR 667.210(a)(1). This paragraph

clarifies that while there is no specific amount that must be spent for

each of the seven activities that are required to be carried out with

the 15 percent funds, it is expected that the State will expend a

sufficient amount to ensure effective implementation of those

activities.

States are also required to provide additional assistance to local

areas that have high concentrations of eligible youth. This activity is

one way States can help local areas maximize the number of youth served

under title I of WIA. Another required activity, rapid response, is

discussed in subpart C of part 665.

Section 665.200(b) discusses the States' responsibility for

disseminating information about eligible providers of training services

for adults, dislocated workers and youth, including the statewide list

of eligible providers and information on performance and program cost.

One commenter stated that, when discussing statewide dissemination

strategies, the regulation should encourage States to disseminate

information in different languages, for different reading levels, and

to use radio and television public service announcements to reach as

wide and diverse an audience as possible.

Response: We agree with the commenter and encourage States to

develop dissemination strategies using multiple means, including those

suggested by the commenter, to provide information in such a way as to

reach the widest population. The Interim Final Regulation implementing

WIA's section 188 nondiscrimination provisions contains requirements

for the effective communication of information to individuals with

disabilities, including dissemination of information in different

languages and to various population groups.

29 CFR 37.9; 37.35; 37.42, (published at 64 FR 61692) (Nov. 12, 1999)).

We will work with

the Department of Labor's Civil Rights Center to issue guidance on

compliance with 29 CFR 37.35 to assist providers in meeting their

obligations to provide materials and services in languages other than

English. To permit maximum State and local flexibility, we have chosen

not to specify particular methods by which information on eligible

providers must be disseminated. However, we have added a new paragraph

(5) to Sec. 665.200(b) which requires that States assure that the

information listed in paragraphs (1) through (4) is widely available.

Section 665.200(c) discusses conducting evaluations (WIA section

136(e)) of workforce investment activities for adults, dislocated

workers and youth as one of the eight required Statewide activities.

One commenter suggested that ``high wages'' be specified as part of

``high-level outcomes'' which result from the improvements identified

in the evaluations.

Response: Section 665.200(c) discusses broad Statewide program

goals leading to high-level performance and outcomes and is not

intended to require specific measures to be used in achieving them, nor

to address individual participant outcomes. We believe that high wages

may be better addressed by the core performance indicators required by

WIA section 136 and discussed in 20 CFR 666.100, especially by the 6-

month post employment earnings measure, which, by definition, addresses

wages. Also, it is expected that the Governors will use additional

indicators of performance on a Statewide and local basis that may more

fully address the commenter's concern (see 20 CFR 666.110 and

666.300(b)). Finally, ``high wages'' is a relative term and, as such,

is difficult to define in a useful way, except on an individual basis

because it is a function of a particular occupation, local labor market

conditions, an individual worker's skills, experience, education level,

and other factors. What are high wages for one person may be low wages

for another. For these reasons, the final regulation is unchanged.

Another commenter expressed concern that, under a universal access

system and uniform performance standards, special populations with

significant barriers to employment will experience difficulties in

learning about, accessing and receiving appropriate services. The

commenter suggested that the final regulations encourage evaluations of

the delivery of workforce investment activities to economically

disadvantaged and other special populations.

Response: While we agree that the evaluation of activities,

including outreach, for these populations is important and should be

encouraged, we do not wish to limit the Governors' flexibility in

allocating and administering the funds reserved for these required

activities. 29 CFR 37.42, in the regulations implementing the WIA

nondiscrimination and equal opportunity provisions, contains further

obligations regarding outreach and universal access. Under WIA, the

Governors have been given the discretion to determine funding levels

for outreach and evaluation activities and whether the activities will

be targeted to specific organizations, populations or programs.

However, WIA section 136(e)(2) and Sec. 665.200(c) require Governors to

design the evaluations in conjunction with the State and Local

Workforce Investment Boards and to coordinate with Local Boards in

conducting the evaluation studies. Community-based organizations,

advocacy groups, and other stakeholders have a variety of opportunities

for participation in the workforce investment system decision-making

process. They are among the groups represented on State and Local

Boards. They may attend Local Board meetings, provide comments on

workforce investment plans, become eligible training providers, and

demonstrate effectiveness in the delivery of training programs. We

believe that the commenter's concerns should be, and will be, addressed

through this broad consultation process. However, Sec. 665.200(c) of

the final regulations is revised to include a reference to the

requirements of WIA section 136(e)(2), which was not included in the

Interim Final Rule.

Other commenters suggested that, for the purposes of awarding

incentive grants, the final regulations should define the term

``exemplary performance,'' used at Sec. 665.200(d)(3), in a way that

will reward local areas that assist a significant percentage of

individuals to meet their self-sufficiency standard (i.e., to earn

wages needed to cover costs for various family sizes and types, without

governmental assistance).

Response: We agree that consideration of the extent to which

programs lead to self-sufficiency is an important factor in measuring

program effectiveness and encourage States to look at this factor in

determining incentive grants. Under WIA, however, the Governor has the

discretion to develop additional indicators of performance by further

defining exemplary performance beyond the core performance measures

specified in the Act and regulations. As stated in 20 CFR 666.300, WIA

section 136(c)(1) authorizes the Governor, and not the Department, to

apply additional indicators of performance, such as self-sufficiency,

to local areas and to use them along with the core performance measures

as the basis for awarding Incentive Grants for exemplary performance.

As stated in 20 CFR 666.400(b), WIA section 134(a)(2)(B)(iii) further

provides that the authority to determine the criteria for exemplary

local performance that qualifies for incentive grants, as well as the

amount of funds used for these grants, lies with the Governor. To limit

the Governors' discretion in this area by requiring additional

indicators would not be in keeping with the letter and intent of WIA to

provide increased State and local flexibility. Consequently, this

provision remains unchanged in the final regulations and the States

retain the authority to exercise discretion in these matters.

Section 665.200(e) provides for technical assistance to local areas

that fail to meet local performance measures. A commenter indicated

that such technical assistance must include capacity building for Local

Board members to help improve services and performance.

Response: The State has the flexibility to develop technical

assistance strategies and, therefore, a State may decide to include

capacity building activities as part of its overall technical

assistance strategy. WIA section 134(a)(3)(A)(ii) and Sec. 665.210(b)

list capacity building activities as an allowable statewide activity.

Consistent with the WIA principle of maximizing State and local

flexibility, we believe that it would not be appropriate to limit

flexibility by specifying a particular type of technical assistance

activity that must be provided. While we agree that capacity building

for Board members is often a useful technical assistance strategy, we

are not prepared to require it in all cases. This provision remains

unchanged in the final regulation.

2. Optional Activities: Section 665.210 identifies activities which

each State is allowed to carry out with the 15 percent funds. For the

first time, States have the discretion to conduct research and

demonstration projects, and incumbent worker projects, including the

establishment and implementation of an employer loan program. We

encourage States to establish policies and definitions to determine

which workers, or groups of workers, are eligible for incumbent worker

projects. We have added the phrase ``or groups of

workers'' to Sec. 665.220 to clarify that groups of workers, in

addition to individual workers, may be determined eligible for

incumbent worker training, and that the eligibility determination for

the ``group'' does not have to be done on an individual basis. Section

665.220 makes clear that incumbent workers served under projects funded

with these reserve funds do not necessarily have to meet the

requirement that training leads to a self-sufficient wage. However,

because of different WIA requirements, employed adult or dislocated

workers served with local formula funds must meet the self-sufficiency

requirement.

Under their capacity-building function (one of the allowable

Statewide workforce investment activities), states may also conduct

activities and implement programs designed to promote access to and

coordination among supportive services and work supports administered

by other state agencies. Because supportive service and work support

programs are vital for low-income families making the transition to

self-sufficiency, efforts to integrate and coordinate such programs at

the state level will greatly enhance the capacity of One-Stop providers

to serve their participants successfully.

One commenter suggested that States consult and coordinate

allowable Statewide workforce investment activities with State labor

federations and appropriate labor organizations, especially in the case

of incumbent worker training. The same commenter also suggested that

States be required to provide assurances that capacity building and

technical assistance funds are used to enhance participation of all

stakeholders, including organized labor.

Response: We agree that State labor federations and other

appropriate labor organizations at the State and local level should be

involved in consulting and coordinating on allowable Statewide

workforce investment activities, including capacity building (which is

one of the allowable activities), and technical assistance (a required

activity for local areas that fail to meet performance levels).

Representatives of labor organizations have the opportunity for

consultation and coordination through their membership on State and

Local Boards, the opportunity for public comment during State and local

planning processes, as well as other opportunities provided under the

sunshine provisions of WIA (WIA sections 111(g) and 117(e), and 20 CFR

661.220(d) and 661.305(d)). We believe the commenter's concerns on

consultation and coordination will be addressed by these broad

consultation processes. This provision remains unchanged in the final

regulations.

One commenter suggested that States must consult on policies

governing incumbent worker training with organized labor

representatives, especially those whose members have the skills in

which training is proposed. In addition, the commenter suggested that

written concurrence on the training pr