Workforce Innovation and Opportunity Act; Joint Rule for Unified and Combined State Plans, Performance Accountability, and the One-Stop System Joint Provisions; Final Rule, 55791-56070 [2016-15977]

Agencies

• DEPARTMENT OF EDUCATION
• Employment and Training Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 81, Number 161 (Friday, August 19, 2016)]
[Rules and Regulations]
[Pages 55791-56070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15977]



[[Page 55791]]

Vol. 81

Friday,

No. 161

August 19, 2016

Part V

Book 2 of 2 Books

Pages 55791-56470





Department of Labor





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Employment and Training Administration



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20 CFR Parts 676, 677, and 678





Department of Education





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34 CFR Parts 361 and 463



Workforce Innovation and Opportunity Act; Joint Rule for Unified and 
Combined State Plans, Performance Accountability, and the One-Stop 
System Joint Provisions; Final Rule

Federal Register / Vol. 81 , No. 161 / Friday, August 19, 2016 / 
Rules and Regulations

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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Parts 676, 677, and 678

[Docket No. ETA-2015-0002]
RIN 1205-AB74

DEPARTMENT OF EDUCATION

34 CFR Parts 361 and 463

RIN 1830-AA21


Workforce Innovation and Opportunity Act; Joint Rule for Unified 
and Combined State Plans, Performance Accountability, and the One-Stop 
System Joint Provisions; Final Rule

AGENCY: Office of Career, Technical, and Adult Education (OCTAE), 
Rehabilitation Services Administration (RSA), Education; Employment and 
Training Administration (ETA), Labor.

ACTION: Final rule.

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SUMMARY: The Departments of Education (ED) and Labor (DOL) (or, 
collectively, Departments) issue this Joint Final Rule to implement 
jointly administered activities authorized by title I of the Workforce 
Innovation and Opportunity Act (WIOA) signed into law on July 22, 2014 
(hereafter ``Joint WIOA Final Rule''). Through these regulations, the 
Departments implement workforce education and employment system reforms 
and strengthen the nation's public workforce development system to 
provide increased economic opportunity and make the United States more 
competitive in the 21st century evolving labor market. This Joint WIOA 
Final Rule provides guidance for State and local workforce development 
systems that increase the skill and credential attainment, employment, 
retention, and earnings of participants, especially those with 
significant barriers to employment, thereby improving the quality of 
the workforce, reducing dependency on public benefits, increasing 
economic opportunity, and enhancing the productivity and 
competitiveness of the nation.

DATES: This final rule is effective October 18, 2016.

FOR FURTHER INFORMATION CONTACT: 
    DOL: Adele Gagliardi, Administrator, Office of Policy Development 
and Research, U.S. Department of Labor, Employment and Training 
Administration, 200 Constitution Avenue NW., Room N-5641, Washington, 
DC 20210, Telephone: (202) 693-3700 (voice) (this is not a toll-free 
number) or 1-800-326-2577 (TDD--Telecommunications device for the 
deaf).
    ED: Lekesha Campbell, U.S. Department of Education, OCTAE, 400 
Maryland Avenue SW., Room 11-145, PCP, Washington, DC 20202-7240, 
Telephone: (202) 245-7808; Edward Anthony, U.S. Department of 
Education, RSA, 400 Maryland Avenue SW., Room 5085 PCP, Washington, DC 
20202-2800, Telephone: (202) 245-7256.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: This Joint WIOA Final Rule reflects changes 
made as a result of public comments received to the joint Notice of 
Proposed Rulemaking that was published on April 16, 2015, at 80 FR 
20574.
    WIOA strengthens the alignment of the public workforce development 
system's six core programs by compelling unified strategic planning 
requirements, common performance accountability measures, and 
requirements governing the one-stop delivery system. In so doing, WIOA 
placed heightened emphasis on coordination and collaboration at the 
Federal, State, local, and tribal levels to ensure a streamlined and 
coordinated service delivery system for job seekers, including those 
with disabilities, and employers. These regulations lay the foundation, 
through coordination and collaboration at the Federal level, for 
implementing the Departments' vision and goals of WIOA.
    In addition to this Joint WIOA Final Rule, the Departments are 
issuing separate final rules to implement program-specific requirements 
of WIOA that fall under each Department's purview. The DOL is issuing a 
Final Rule governing program-specific requirements under titles I and 
III of WIOA (hereinafter ``DOL WIOA Final Rule''). The ED is issuing 
three final rules: One implementing program-specific requirements of 
the Adult Education and Family Literacy Act (AEFLA), as reauthorized by 
title II of WIOA; and two final rules implementing all program-specific 
requirements for programs authorized under the Rehabilitation Act of 
1973, as amended by title IV of WIOA. The Department-specific final 
rules are published elsewhere in this issue of the Federal Register. 
Developing and issuing all five WIOA final rules collaboratively 
reinforces WIOA's heightened emphasis on coordination and collaboration 
to ensure an integrated and seamless service delivery system for job 
seekers and employers.

Preamble Table of Contents

I. Executive Summary
II. Acronyms and Abbreviations
III. Public Comments Received on the Notice of Proposed Rulemaking
IV. Section-by-Section Discussion of Public Comments and Final 
Regulations
    A. Unified and Combined State Plans Under Title I of the 
Workforce Innovation and Opportunity Act (20 CFR Part 676; 34 CFR 
Part 361, Subpart D; 34 CFR Part 463, Subpart H)
    B. Performance Accountability Under Title I of the Workforce 
Innovation and Opportunity Act (20 CFR Part 677; 34 CFR Part 361, 
Subpart E; 34 CFR Part 463, Subpart I)
    C. Description of the One-Stop System Under Title I of the 
Workforce Innovation and Opportunity Act (20 CFR Part 678; 34 CFR 
Part 361, Subpart F; 34 CFR Part 463, Subpart J)
V. Rulemaking Analyses and Notices
    A. Executive Orders 12866 and 13563: Regulatory Planning and 
Review
    B. Regulatory Flexibility Act
    C. Small Business Regulatory Enforcement Fairness Act of 1996
    D. Paperwork Reduction Act
    E. Executive Order 13132 (Federalism)
    F. Unfunded Mandates Reform Act of 1995
    G. Plain Language
    H. Assessment of Federal Regulations and Policies on Families
    I. Executive Order 13175 (Indian Tribal Governments)
    J. Executive Order 12630 (Government Actions and Interference 
With Constitutionally Protected Property Rights)
    K. Executive Order 12988 (Civil Justice Reform)
    L. Executive Order 13211 (Energy Supply)

I. Executive Summary

    Purpose of This Regulatory Action: President Barack Obama signed 
WIOA into law on July 22, 2014. WIOA is the first legislative reform of 
the public workforce system in more than 15 years, which passed 
Congress by a wide bipartisan majority. WIOA supersedes the Workforce 
Investment Act of 1998 (WIA) and amends the Wagner-Peyser Act and the 
Rehabilitation Act of 1973. WIOA strengthens and improves our nation's 
public workforce system and increases economic opportunities for 
individuals in the United States, especially youth and individuals with 
significant barriers to employment, to secure and advance in 
employment. WIOA reaffirms the role of the customer-focused one-stop 
delivery system, a cornerstone of the public workforce development 
system, and enhances and increases coordination among several key 
employment, education, and training programs.

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    WIOA supports innovative strategies to improve coordination among 
the six core programs and other Federal programs that support 
employment services, workforce development, adult education and 
literacy, and vocational rehabilitation (VR) activities.
    In WIOA, Congress directed the Departments to issue regulations 
implementing statutory requirements to ensure that the public workforce 
system operates as a comprehensive, integrated, and streamlined system 
to provide pathways to prosperity and continuously improve the quality 
and performance of its services to job seekers and to employers. 
Therefore, the Departments are issuing this Joint WIOA Final Rule to 
implement jointly administered activities authorized under WIOA, 
specifically those related to the Unified and Combined State Plans, 
performance accountability, and the one-stop delivery system. In an 
effort to promote collaboration and coordination at the State and local 
levels among the core programs and other Federal partner programs, the 
Departments have collaborated extensively with the Department of Health 
and Human Services (HHS) and other Federal agencies in developing this 
Final Rule.
    The Departments are publishing this Joint WIOA Final Rule to 
implement those provisions of WIOA that affect all of the six core 
programs, specifically the: Adult, dislocated worker, and youth 
programs authorized under title I and administered by DOL; AEFLA 
program authorized under title II and administered by ED; Employment 
Service program authorized under the Wagner-Peyser Act, as amended by 
title III, and administered by DOL (Wagner-Peyser Act Employment 
Service program); and VR program, authorized under title I of the 
Rehabilitation Act of 1973, as amended by title IV, and administered by 
ED. The requirements in these joint final regulations will be jointly 
administered by both Departments. The regulations contained in this 
Final Rule also impact other Federal programs that participate in the 
one-stop system and/or are identified as partner programs in a State's 
Combined State Plan if a State elects to submit such Plan rather than a 
Unified State Plan.
    A critical part of the implementation of WIOA is the collection and 
reporting of accurate, timely information about individuals who receive 
services through the programs authorized under the law. Such 
information is critical to inform public policy and support analysis of 
effective strategies. In keeping with the Paperwork Reduction Act 
(PRA), the methods for collecting such information are provided to the 
public for comment through information collection requests (ICRs). The 
Joint WIOA Final Rule had two accompanying requests to support the 
performance and planning aspects of these rules. Soon after publication 
of the Notice of Proposed Rulemaking (NPRM) (80 FR 20574, April 16, 
2015), the Departments published a notice in the Federal Register 
announcing the joint ICR for the WIOA Performance Management, 
Information, and Reporting System (80 FR 43474, July 22, 2015) and 
requested comments on this ICR during a 60-day public comment period 
(hereinafter ``WIOA Joint Performance ICR'') (see https://www.regulations.gov/#!docketDetail;D=ETA-2015-0007). On September 1, 
2015, DOL solicited comments on its own WIOA performance accountability 
ICR to require the following programs to report on a standardized set 
of data elements through the WIOA Workforce Performance Accountability, 
Information, and Reporting System: WIOA adult, dislocated worker, and 
youth, Wagner-Peyser Act Employment Service, National Farmworker Jobs 
Programs (NFJP), Trade Adjustment Assistance, YouthBuild, Indian and 
Native American (INA) grantees, and the Jobs for Veterans' State Grants 
(80 FR 52798) (hereinafter ``DOL Performance ICR'') (see https://www.regulations.gov/#!docketDetail;D=ETA-2015-0008). On April 16, 2015, 
ED solicited comments on its ICR related to the VR program Case Service 
Report (RSA-911) to require VR agencies to report data required under 
sec. 101(a)(10) of the Rehabilitation Act, of 1973, as amended by WIOA, 
as well as performance accountability data under title I of WIOA 
(hereinafter ``RSA-911''). The Departments received 112 public comment 
submissions in response to the WIOA Joint Performance ICR, DOL received 
public comments on the DOL Performance ICR, and ED received public 
comments on the RSA-911 (respectively).
    On August 6, 2015, the Departments, together with the Departments 
of Health and Human Services, Agriculture, and Housing and Urban 
Development (HUD), proposed a new information collection regarding 
required elements for submission of the Unified or Combined State Plan 
and Plan modifications under WIOA (hereinafter ``State Plan ICR'') (80 
FR 47003) (see https://www.regulations.gov/#!docketDetail;D=ETA-2015-
0006). The State Plan ICR received a total of 16 public comments. These 
public comment submissions informed the development of the final State 
Plan ICR, which the Office of Management and Budget (OMB) approved on 
February 19, 2016. Most provisions in titles I through III of WIOA took 
effect on July 1, 2015, the first full program year after enactment; 
however, the new State Plans and performance accountability system 
requirements in the statute will take effect on July 1, 2016. Title IV 
took effect upon enactment unless otherwise indicated.
    Section V. Rulemaking Analysis and Notices, D. Paperwork Reduction 
Act provides summary information about the public comments on the Joint 
Performance ICR and the State Plan ICR.
    In addition to this Joint WIOA Final Rule, the Departments are 
publishing, in separate regulatory actions published in the Federal 
Register, four agency-specific final rules that implement the 
provisions of WIOA that are administered separately by the 
Departments--one published by DOL implementing the agency-specific 
provisions of title I, and three published by ED implementing the 
agency-specific provisions of titles II and IV. Readers should note 
that there are a number of cross-references in this Joint WIOA Final 
Rule to the agency-specific final rules. Finally, the Departments 
structured this Joint WIOA Final Rule so that the Code of Federal 
Regulations (CFR) parts will align with the CFR parts in the agency-
specific final rules.
    To implement those provisions of WIOA that affect the WIOA programs 
and which will be jointly administered by both Departments, these 
regulations implement a number of improvements that WIOA makes to the 
public workforce system. These include improvements to:
     Ensure that workforce education and employment services 
are coordinated and complementary by requiring a single, 4-year 
strategic State Plan for achieving the workforce goals of the State. 
Additionally, States may conduct, along with the core programs, 
collaborative planning with other Federal education and training 
programs specified in WIOA;
     Ensure that Federal investments in education, employment, 
and training are evidence-based, data-driven, and accountable to 
participants and taxpayers by establishing a common performance 
accountability system for the core programs, requiring other authorized 
programs to report on the common performance indicators, and providing 
easy-to-understand information to consumers and the public about 
training providers and

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program performance to help inform their decision-making; and
     Enhance services provided to all job seekers and employers 
through the one-stop delivery system, also known as the American Job 
Center system, by: Requiring the colocation of the Wagner-Peyser Act 
Employment Service program; adding the Temporary Assistance for Needy 
Families (TANF) program as a required partner; providing for State-
established certification to ensure high-quality American Job Centers; 
requiring partners to dedicate funding for allowable infrastructure and 
other shared costs that are commensurate to the partner's proportionate 
use and relative benefit received by the program; and promoting the 
development of integrated intake, case management, and reporting 
systems.
Changes From the Notice of Proposed Rulemaking
    The Departments published a Joint WIOA NPRM on April 16, 2015 at 80 
FR 20574. The Final Rule supports the tenets expressed in the NPRM. In 
response to comments received and to strengthen the intent of the law, 
the Departments have made numerous revisions, including but not limited 
to changes to the following areas:
     State Plans: The Joint WIOA Final Rule text, among other 
things: (1) Clarifies the expected involvement of stakeholders, core 
programs, and the State Workforce Development Boards (WDBs) in the 
State Plan development; (2) ensures consistency by requiring a 
description of joint planning and coordination across core programs, 
required one-stop partners, and other programs and activities included 
in the Unified and Combined State Plans; (3) requires States to provide 
an opportunity for public comment on and input into the development of 
Unified and Combined State Plans prior to their submission, and (4) 
clarifies requirements for Unified and Combined State Plan 
modifications. The preamble responds to suggestions regarding certain 
Unified and Combined State Plan requirements, as well as provides 
further guidance and clarifications with regard to certain regulatory 
requirements governing the Unified and Combined State Plans.
     Performance Accountability: The Joint WIOA Final Rule 
clarifies certain definitions, primary indicators of performance, and 
sanctions. Changes in the Final Rule text include, among others: (1) 
Revising the definitions of ``participant,'' ``exit,'' and ``State;'' 
(2) clarifying the credential attainment rate indicator; (3) adding the 
types of gain that are included in the measurable skill gains 
indicator; (4) clarifying the difference between the ``adjusted level 
of performance'' that is agreed upon at the time the Unified or 
Combined State Plan is approved and the ``adjusted level of 
performance'' that is determined at the end of the program year; and 
(5) adding a phased-in approach for sanctions due to failure to achieve 
adjusted levels of performance and a transition period for complete 
WIOA data to be available. The preamble explains intent to phase in 
implementation of the ``effectiveness in serving employers'' indicator 
and to implement a uniform, national customer satisfaction survey that 
is not tied to accountability provisions or the determination of 
sanctions. The preamble also provides further guidance and 
clarification regarding changes made to the Final Rule text, including 
the inclusion of outlying areas (American Samoa, Guam, Commonwealth of 
the Northern Mariana Islands, the U.S. Virgin Islands, and, as 
applicable, the Republic of Palau) for purposes of the performance 
accountability system.
     One-Stop Governance and Operations: The Joint WIOA Final 
Rule includes changes to the operational aspects of one-stop operations 
including, among others: (1) Revising coverage of multiple program 
services and staff coverage in one-stop affiliate sites; (2) revising 
infrastructure funding regulations, and emphasizing partners' 
responsibilities towards infrastructure costs; (3) providing detailed 
information about career services; (4) clarifying the involvement of 
the TANF programs as one-stop partners; (5) simplifying provisions 
governing Memoranda of Understanding (MOU) negotiations; (6) 
emphasizing the need to conduct an open competition for one-stop 
operator selection; (7); changing the requirements related to hours of 
operation outside normal business hours; (8) emphasizing both physical 
and programmatic accessibility; (9) clarifying when the State funding 
mechanism is triggered for the funding of the one-stop system, 
including the funding limits applicable to the State funding mechanism; 
and (10) establishing a deadline to conform to the new common one-stop 
identifier.
    As noted throughout this Final Rule, the Departments will be 
issuing guidance to help our regulated communities understand their 
rights and responsibilities under WIOA and these regulations. 
Consistent with the Administrative Procedure Act's exemption from its 
notice and comment requirement for general statements of policy, 
interpretations and procedural instructions, this guidance will provide 
interpretations of many of the terms and provisions of these 
regulations and more detailed procedural instructions that would not be 
appropriate to set out in regulations. The Departments will also be 
issuing guidance to provide information on current priorities and 
initiatives, suggested best practices, and in response to stakeholder 
questions.
    The Departments also made a number of non-substantive changes to 
correct grammatical and typographical errors to improve the readability 
and conform the document stylistically that are not discussed in the 
analysis below.

II. Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act
ABAWD Able-Bodied Adults Without Dependents
ABS Adult Basic Skills
APA Administrative Procedure Act
BFET Basic Food Employment and Training
BLS Bureau of Labor Statistics
CBO Community-based organization
CEO Chief elected official
CFR Code of Federal Regulations
CHIP Children's Health Insurance Program
CMS Case Management System
CRIS Common Reporting Information System
CRO Community Rehabilitation Organization
CSBG Community Services Block Grant
CTE Career and Technical Education
DOL U.S. Department of Labor
DSA Designated State Agency
DSU Designated State Unit
ED U.S. Department of Education
EEOC Equal Employment Opportunity Commission
EFL Educational Functioning Level
E.O. Executive Order
ESEA Elementary and Secondary Education Act of 1965
ESL English-as-a-second-language
ETA Employment and Training Administration
ETP Eligible training provider
FEDES Federal Employment Data Exchange System
FEIN Federal employer identification number
FERPA Family Educational Rights and Privacy Act
FY Fiscal Year
GED General Education Diploma
GPA Grade Point Average
GS General Schedule
HHS Department of Health and Human Services
HSE High School Equivalency
HUD Department of Housing and Urban Development
ICR Information Collection Request
INA Indian and Native American
INAP Indian and Native American Programs
IPE Individualized Plan for Employment
IT Information technology
ITA Individual Training Account
JVSG Jobs for Veterans State Grants

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LMI Labor market information
LSAL The Longitudinal Study of Adult Learning
MOU Memorandum of Understanding
NAICS North American Industry Classification System
NASWA National Association of State Workforce Agencies
NFJP National Farmworker Jobs Program
NIST National Institute of Standards and Technology
NPRM Notice of Proposed Rulemaking
MIS Management Information System
OCTAE Office of Career, Technical, and Adult Education
OJT On-the-job training
OMB Office of Management and Budget
ORR Office of Refugee Resettlement
PII Personally identifiable information
PIRL Participant Individual Record Layout
POP Period of Participation
PRA Paperwork Reduction Act of 1995
PY Program Year
RFA Regulatory Flexibility Act
RFP Request for Proposals
RHY Runaway and Homeless Youth
RIA Regulatory Impact Analysis
RSA Rehabilitation Services Administration
SBA Small Business Administration
SBREFA Small Business Regulatory Enforcement Fairness Act of 1996
SCSEP Senior Community Service Employment Program
sec. Section of a Public Law or the United States Code
SLDS Statewide Longitudinal Data System
SNAP Supplemental Nutrition Assistance Program
SRC State Rehabilitation Council
SSA Social Security Administration
SSN Social Security Number
SWA State Workforce Agencies
TAA Trade Adjustment Assistance
TAG Technical Assistance Guide
TANF Temporary Assistance for Needy Families
TDD Telecommunications Device for the Deaf
TEGL Training and Employment Guidance Letter
UI Unemployment insurance
U.S.C. United States Code
VETS Veterans' Employment and Training Service
VEVRAA Vietnam Era Veterans' Readjustment Assistance Act
VR Vocational rehabilitation
WDB Workforce Development Board
WIA Workforce Investment Act of 1998
WIOA Workforce Innovation and Opportunity Act
WISPR Workforce Investment Streamlined Performance Reporting
WRIS Wage Record Interchange System

III. Public Comments Received on the Notice of Proposed Rulemaking

    The Departments published five NPRMs related to WIOA on April 16, 
2015. The first NPRM is the Joint Rule for Unified and Combined State 
Plans, Performance Accountability, and the One-Stop System Joint 
Provisions (80 FR 20574) (hereinafter ``the Joint WIOA NPRM''); the 
second NPRM is the Workforce Innovation and Opportunity Act (80 FR 
20690); the third NPRM is the Programs and Activities Authorized by the 
Adult Education and Family Literacy Act (Title II of the Workforce 
Innovation and Opportunity Act) (80 FR 20668); the fourth is the State 
Vocational Rehabilitation Services program; State Supported Employment 
Services program; Limitations on Use of Subminimum Wage (80 FR 21059); 
and the fifth is the Workforce Innovation and Opportunity Act, 
Miscellaneous Program Changes (80 FR 20688).
    During the 60-day public comment period, the Departments received a 
total of 546 public comments on the Joint WIOA NPRM. In addition to 
these comments, the Departments also considered relevant public 
comments on the DOL and ED program-specific NPRMs.
General Comments
    Comments: The Departments received many comments supporting these 
regulations. For example, the Departments received comments supporting 
cross-program data and performance measurement, the increased focus on 
adult education and services to immigrants, improved alignment between 
Federal initiatives and State and local needs, increased matching of 
apprenticeships with employers, as well as support for other provisions 
discussed in the section-by-section analysis below. Additionally, the 
Departments received comments commending the collaboration on joint 
regulations and encouraging additional coordinated guidance. Also, 
several commenters expressed support for the enactment of WIOA, noting 
the law will decrease unemployment, make the United States more 
competitive, lead to higher wages, and facilitate entry into the middle 
class.
    A few commenters generally opposed the rulemaking, in part because 
they disagreed with the role WIOA assigns to the Federal government 
concerning covered programs. Others suggested that the NPRM itself was 
excessive, overly cumbersome, and not understandable to the layperson, 
needed clarification, and was inconsistent with the plain and simple 
language of WIOA.
    Departments' Response: The Departments acknowledge these comments, 
but do not address them further in the Final Rule since they do not 
request specific changes to the regulatory text. However, the 
Departments note that the section-by-section analysis is drafted to 
provide additional clarity on complicated provisions, such as those 
related to the definitions used in the performance accountability 
regulations, requirements for the State funding mechanism for the one-
stop system, and requirements for Unified and Combined State Plan 
modifications. Furthermore, revisions were made to various sections in 
the regulatory text to improve readability. Additionally, the 
Departments will continue to provide guidance and technical assistance, 
as needed, to assist States in implementing WIOA.
Accessibility of the Public Workforce System to Individuals With 
Disabilities
    Comments: The Departments received many comments related to 
increased access to workforce services for individuals with 
disabilities, both in support of legislative changes and expressing 
concern that the regulations need to hold the public workforce system 
fully accountable to implement such changes. Several commenters noted 
that, under WIOA, individuals with disabilities will have greater 
access to workforce training programs and be able to take advantage of 
the benefits resulting from their training. However, one commenter 
asserted that the rule must do more to consider the unique needs of 
individuals with disabilities, who may take longer than others to 
achieve employment. Another commenter expressed concern that her 
organization would not have enough resources to provide pre-employment 
transition services to potentially eligible students with disabilities. 
A commenter encouraged efforts to improve the ability of the one-stop 
system to serve customers with disabilities through existing services 
and programs, and another urged the Departments to include specific 
requirements for training and access to text-to-speech and speech-to-
text technologies for people with dyslexia and print disabilities.
    Departments' Response: WIOA includes numerous provisions intended 
to increase employment opportunities for individuals with disabilities, 
and these regulations reinforce those statutory provisions. There are 
numerous discussions throughout part 678 reiterating the Departments' 
intent to ensure access to needed employment and training services to 
all individuals.
    The Department has published a Final Rule to implement sec. 188 of 
WIOA, which prohibits discrimination against WIOA participants, by 
making technical changes only to its existing regulation implementing 
WIA (i.e., (1) replicating at part 38 the rule from part 37, and (2) 
replacing references to the ``Workforce Investment Act of 1998'' or 
``WIA'' with ``Workforce Innovation and Opportunity Act'' or ``WIOA'' 
to reflect the proper

[[Page 55796]]

statutory authority). See 80 FR 43,871 (July 23, 2015).
    In addition, on January 26, 2016, DOL proposed updating these 
regulations to better align with the Americans with Disabilities Act 
Amendments Act of 2008, Public Law 110-325, sec. 2(b)(1), 122 Stat. 
3553 (2008) and the relevant implementing regulations and guidance 
issued by the Department of Justice (28 CFR parts 35 and 36), as well 
as the final regulations and guidance issued by the Equal Employment 
Opportunity Commission (29 CFR part 1630, 76 FR 16978 (Mar. 25, 2011) 
(Equal Employment Opportunity Commission regulations implementing 
Americans with Disabilities Act title I)). See 81 FR 4493 (January 26, 
2016). The proposed WIOA sec. 188 rule would ensure that the definition 
of ``disability'' is consistent with the Americans with Disabilities 
Act Amendments Act and current case law, which will enable more 
individuals with disabilities to be effectively served within the 
public workforce system. That NPRM also addresses accessibility 
requirements (such as those for information and electronic 
technologies) and service animals. The Departments encourage commenters 
to review carefully the provisions of part 678 in this Joint WIOA Final 
Rule, as well as the proposed WIOA sec. 188 rule.
    With respect to the commenter's concerns about pre-employment 
transition services, the Departments acknowledge that the provision of 
these services is a new requirement imposed on the VR program under 
sec. 113 of the Rehabilitation Act of 1973, as amended by title IV of 
WIOA. States must reserve at least 15 percent of their VR allotment to 
provide these services to students with disabilities. The ED provides 
detailed discussions regarding this requirement in the VR program-
specific final regulations published elsewhere in this issue of the 
Federal Register.
Requests To Extend the Comment Period
    Comments: A few commenters requested a 60-day extension of the 
comment period. The commenters cited the size and complexity of the 
five proposed NPRMs implementing WIOA.
    Departments' Response: While the Departments recognize that the 
issues addressed in the NPRM are complex and important, the Departments 
concluded that the 60-day comment period was sufficient to provide the 
public a meaningful opportunity to comment, and this conclusion is 
supported by the hundreds of complex and thoughtful comments received. 
Additionally, the NPRM was available to the public for a preliminary 
review on the Federal Register Web site upon submission of the NPRMs to 
the Federal Register, which was several weeks prior to publication, 
thereby providing stakeholders additional time prior to the publication 
date.
Conclusion
    These final regulations provide the critical framework for the 
implementation of WIOA. However, achieving the goals of WIOA will take 
visionary leadership and coordination at the State, regional, and local 
levels, and partnerships across many programs. It will require 
investment and innovation to develop new information technology that 
supports this important work, and make the most of this investment of 
public funds. The Departments will support these activities through 
program funding, on-going technical assistance and the provision of 
guidance to all levels of the American Job Center system.

IV. Section-by-Section Discussion of Public Comments and the Final 
Joint Regulations

A. Unified and Combined State Plans Under Title I of the Workforce 
Innovation and Opportunity Act (20 CFR Part 676; 34 CFR Part 361, 
Subpart D; 34 CFR Part 463, Subpart H)

    WIOA requires the Governor of each State to submit a Unified or 
Combined State Plan to the Secretary of Labor that outlines a 4-year 
strategy for the State's workforce development system. States must have 
approved State Plans in place to receive funding for the six core 
programs under WIOA--the adult, dislocated worker, and youth programs 
(WIOA title I); the AEFLA program (WIOA title II); the Employment 
Service program authorized under the Wagner-Peyser Act, as amended by 
WIOA title III (Wagner-Peyser Act Employment Service); and the VR 
program authorized under title I of the Rehabilitation Act of 1973, as 
amended by WIOA title IV (VR program). States must submit, at a 
minimum, a Unified State Plan, which encompasses the six core programs 
under WIOA. However, States are encouraged to submit a Combined State 
Plan, which must include the six core programs of the Unified State 
Plan, plus one or more Combined State Plan partner programs, as 
described at Sec.  676.140(d): (1) Career and Technical Education (CTE) 
programs authorized under the Carl D. Perkins Career and Technical 
Education Act of 2006 (20 U.S.C. 2301 et seq.); (2) TANF, authorized 
under part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.); (3) Employment and training programs authorized under sec. 
6(d)(4) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4)); 
(4) Work programs authorized under sec. 6(o) of the Food and Nutrition 
Act of 2008 (7 U.S.C. 2015(o)); (5) Trade adjustment assistance 
activities under chapter 2 of title II of the Trade Act of 1974 (19 
U.S.C. 2271 et seq.); (6) Services for veterans authorized under 
chapter 41 of title 38 United States Code; (7) Programs authorized 
under State unemployment compensation laws (in accordance with 
applicable Federal law); (8) Senior Community Service Employment 
Programs under title V of the Older Americans Act of 1965 (42 U.S.C. 
3056 et seq.); (9) Employment and training activities carried out by 
HUD; (10) Employment and training activities carried out under the 
Community Services Block Grant Act (CSBG) (42 U.S.C. 9901 et seq.); and 
(11) Reintegration of offenders programs authorized under sec. 212 of 
the Second Chance Act of 2007 (42 U.S.C. 17532). When a State elects 
this option, the Combined State Plan will take the place of the Unified 
State Plan for that State. Coordination across multiple Federal 
programs provides a wider range of coordinated and streamlined services 
to the customer.
    This part describes the submission process and content requirements 
for the Unified and Combined State Plans under WIOA. The major content 
areas of the Unified or Combined State Plan include strategic and 
operational planning elements. Strategic planning elements include 
State analyses of economic and workforce factors, an assessment of 
workforce development activities, formulation of the State's vision and 
goals for preparing an educated and skilled workforce that meets the 
needs of employers, and a strategy to achieve the vision and goals. 
Operational planning elements include State strategy implementation, 
State operating systems and policies, program-specific requirements, 
assurances, and additional requirements imposed by the Secretaries of 
Labor and Education, or other Secretaries, as appropriate.
    State WDBs are responsible for the development, implementation, and 
modification of the plan, and for convening all relevant programs, 
partners, and stakeholders. The Governor must ensure that the Unified 
or Combined State Plan is developed in a transparent manner and in 
consultation with representatives of Local WDBs and chief elected 
officials (CEOs), businesses, representatives of labor organizations, 
community-based

[[Page 55797]]

organizations (CBOs), adult education providers, institutions of higher 
education, other stakeholders with an interest in the services provided 
by the six core programs, and any Combined plan partner program 
included in a Combined Plan, as well as the general public, including 
individuals with disabilities. Other stakeholders include, but are not 
limited to, youth education and workforce development providers, 
disability advocates and service entities, youth-serving programs, and 
other advocacy organizations relevant to the programs covered by the 
Unified or Combined State Plan.
    As noted in the NPRM, the Departments have chosen not to include 
all of the specific planning elements in the regulation. Instead, 
comprehensive State Plan requirements for both Unified and Combined 
State Plans are detailed in the WIOA Unified and Combined State Plan 
and Plan Modifications ICR, entitled ``Required Elements for Submission 
of the Unified or Combined State Plan and Plan Modifications under the 
Workforce Innovation and Opportunity Act,'' under the OMB Collection 
Number 1205-0522 (hereafter ``WIOA State Plan ICR''). ICRs must be 
renewed every 3 years. In future years, the WIOA State Plan ICR may 
undergo revisions. Throughout this preamble, ``WIOA State Plan ICR'' 
refers to the WIOA State Plan ICR as published on February 19, 2016. 
The WIOA State Plan ICR went through two rounds of public comment 
before being finalized and future revisions will be subject to public 
comment as well, as required under the PRA. In addition, the 
Departments jointly have issued guidance explaining the mechanics of 
how a State must submit its State Plan, through TEGL No. 14-15, Policy 
Directive RSA-PD-16-03, and Program Memorandum 16-1, all entitled 
Workforce Innovation and Opportunity Act (WIOA) Requirements for 
Unified and Combined State Plans, which were issued in March 2016. 
States must use the WIOA State Plan ICR to develop and submit the WIOA 
Unified or Combined State Plan and in accordance with instructions 
described in the jointly issued State Plan guidance.
    In the section-by-section discussions of each Unified and Combined 
State Plan provision below, the heading references the DOL CFR part and 
section number. However, ED has identical provisions at 34 CFR part 
361, subpart D (under its State VR program regulations) and at 34 CFR 
part 463, subpart H (under a new CFR part for AEFLA regulations). For 
purposes of brevity, the section-by-section discussions for each 
Department's provisions appear only once--in conjunction with the DOL 
section number--and constitute the Departments' collective explanation 
and rationale for each provision. When the regulations are published in 
the CFR, these joint performance regulations will appear in each of the 
CFR parts identified above.
Section 676.100 What are the purposes of the Unified and Combined State 
Plans?
    Section 676.100 describes the principal purposes of the Unified and 
Combined State Plans, which communicate the State's vision for the 
State public workforce system and serve as vehicles for developing, 
aligning, and integrating the State public workforce system across 
Federal programs. Section 676.100(b) explains how the strategies 
articulated in the plan support the State's vision and overarching 
goals. The goals of the 4-year Unified and Combined State Plans are to 
align and integrate Federal education, employment, and training 
programs; direct investments to ensure that training and services are 
meeting the needs of employers and job seekers; apply consistent job-
driven training strategies across all relevant Federal programs; and 
engage economic, education, and workforce partners in improving the 
workforce development system. The Departments received a few comments 
on this section, none of which necessitated substantive changes to the 
regulatory text. Section 676.100, as discussed below, remains unchanged 
from the NPRM except for minor technical edits.
    Comments: Several commenters supported the Departments' stated 
purpose of the Unified and Combined State Plans. A commenter said the 
regulation should require that State WDBs be provided with regular 
(e.g., quarterly) program information and data, and at least annual 
analysis of the State's progress toward State Plan goals.
    Departments' Response: The Departments considered these comments 
and concur that regular receipt and review of program information, 
data, and analysis will better enable effective decision-making by the 
State WDB. Section 677.160 of the joint performance regulations 
requires States to report data annually for all six core programs; 
however, some programs will report data quarterly, specifically the 
WIOA title I programs, the Wagner-Peyser Act Employment Service 
program, and the VR program, in accordance with part 677 of this Joint 
WIOA Final Rule. The State's quarterly and annual reports are publicly 
available, and State and Local WDBs are encouraged to review this 
information regularly. Therefore, the Departments have concluded that 
it is unnecessary to amend the final regulations to require that data 
be provided to the WDBs regularly as the commenter recommended.
    Comments: A commenter requested confirmation that the references to 
``relevant'' and ``job-driven'' education and training, in proposed 
Sec.  676.100(b)(2) and (3), refer to ``evidence-based'' strategies 
identified in the Job-Driven Checklist (from Vice President Biden's 
report ``Ready to Work: Job-Driven Training and American Opportunity'' 
and the study of ``What Works in Job Training: A Synthesis of 
Evidence''). The commenter urged the Departments to provide 
clarification on how to, and encourage States to, use the joint State 
planning process to ensure that these evidence-based strategies are 
incorporated into their newly energized workforce development systems.
    Departments' Response: The Departments agree that evidence- based 
strategies are important for the strategic planning required by this 
section. Paragraph (b)(2) of Sec.  676.100 requires, as part of the 
description of the purpose of the Unified and Combined State Plans, 
that the plans direct investments to economic, education, and workforce 
training programs that focus on providing relevant education and 
training. Section 676.100(b)(3) further requires that plans apply 
strategies for job-driven training consistently across Federal 
programs. The references to ``relevant'' and ``job-driven'' education 
and training, in Sec.  676.100(b)(2) and (3), include the ``evidence-
based'' strategies identified in the Job-Driven Checklist from Vice 
President Biden's report ``Ready to Work: Job-Driven Training and 
American Opportunity'' and the study of ``What Works in Job Training: A 
Synthesis of Evidence.'' Through the issuance of joint Departmental 
guidance and instructions, the Departments offered further 
clarification and encouragement to States regarding how the joint 
planning process can ensure that evidence-based strategies are 
incorporated throughout the workforce development system, including the 
priorities of the job-driven checklist. No change to the regulatory 
text was made in response to this comment.
Section 676.105 What are the general requirements for the Unified State 
Plan?
    Section 676.105 describes the general requirements for the Unified 
State Plan that apply to all six core programs. These requirements set 
the foundation

[[Page 55798]]

for WIOA implementation by fostering strategic alignment, improving 
service integration, and ensuring that the public workforce system is 
industry-relevant, responds to the economic needs of the State, and 
matches employers with skilled workers. The Departments envision a plan 
that describes how the State will develop and implement a unified, 
integrated workforce development system rather than a plan that 
discusses the State's approach to operating each core program 
individually.
    Section 676.105(a) explains that Unified State Plans must be 
submitted in accordance with Sec.  676.130 and sec. 102(c) of WIOA as 
explained in joint planning guidelines issued by the Secretaries of 
Labor and Education, with instructions to States on how to submit 
Unified State Plans.
    Section 676.105(b) implements WIOA's statutory requirements in sec. 
102(a), and requires that the State submit the Unified State Plan to 
the Secretary of Labor to receive funding for the workforce development 
system's six core programs. The Departments made an editorial change 
under Sec.  676.105(b) to clarify that at a minimum States must satisfy 
the requirements of a Unified State Plan to be eligible to receive 
funding for the workforce development system's six core programs. 
However, if a State submits a Combined State Plan then it will, by 
including all the requirements of a Unified State Plan as mandated by 
the regulation, also satisfy the requirements of a Unified State Plan. 
WIOA sec. 103(b)(1) and Sec.  676.140(e)(1) of this regulation state 
that a Combined State Plan must include all of the requirements of a 
Unified State Plan. Therefore, if a State submits a complete Combined 
State Plan, it also will satisfy all the requirements of a Unified 
State Plan.
    Section 676.105(c) requires, in accordance with sec. 102(a) of 
WIOA, that the State outline its 4-year strategy for WIOA's core 
programs and meet the requirements of WIOA sec. 102(b). Paragraph (c) 
of Sec.  676.105 remains unchanged from that proposed in the NPRM.
    Section 676.105(d), which implements sec. 102(b) of WIOA, describes 
the strategic and operational planning elements that must be included 
in the Unified State Plan. The final regulation, consistent with that 
proposed in the NPRM, concerns major structural elements rather than 
enumerating all the statutory State planning requirements. States still 
must comply with each of the statutory requirements, regardless of 
whether they are repeated in regulation. In addition to minor technical 
edits throughout, the Departments made two substantive changes to Sec.  
676.105(d)(3). First, in Sec.  676.105(d)(3)(iv), the Departments 
specifically mention the assurance that the lead State agencies 
responsible for administering the core programs reviewed and commented 
on the appropriate operational planning of the Unified State Plan and 
approved those elements as serving the needs of the individuals served 
by the programs. Second, the Departments added a new paragraph 
(d)(3)(v) that requires the Unified State Plan to include a description 
of the joint planning and coordination across the core programs and 
other required one-stop partners and other programs in the workforce 
development system. While these provisions are new in these final 
regulations, they do not represent new requirements on the States 
because each of these requirements are contained in sec. 102(b) of WIOA 
and were applicable to the States regardless of whether they were 
mentioned in the NPRM.
    In these final regulations, the Departments have added Sec.  
676.105(e) to make clear that all of the requirements of part 676 
(which implements the Unified or Combined State Plan requirements of 
secs. 102 and 103 of WIOA) apply to the outlying areas. As a result, 
the outlying areas must submit a Unified or Combined State Plan to 
receive funding for all of the core programs. This regulatory change is 
discussed at greater length below.
Outlying Areas
    Comments: The Departments received several comments related to the 
applicability of Unified or Combined State Plan requirements to 
outlying areas. In the NPRM, the Departments sought comments 
specifically related to this issue and provided two options: Either (1) 
require outlying areas to submit Unified or Combined State Plans or (2) 
exempt outlying areas from the Unified or Combined State Plan 
requirement as a prerequisite for receiving funds for core programs. 
The commenters were unanimous in their support of explicitly requiring 
outlying areas to submit Unified or Combined State Plans as a 
prerequisite for receiving funding for all core programs. In so doing, 
these commenters said this approach would ensure consistency and a 
unified planning process, increase the relevance and validity of 
national program comparisons, and contribute to a fair and equitable 
distribution of funds. These commenters also noted that this approach 
would avoid the concern that outlying areas would submit Unified or 
Combined State Plans that include only the adult education and VR 
programs, since titles II and IV of WIOA require the submission of such 
plans as a prerequisite to receive funding.
    While supporting the approach that would require outlying areas to 
submit a Unified or Combined State Plan as a prerequisite to receive 
funding for all core programs, one commenter expressed concern that ED 
permits outlying areas to receive adult education program funds under 
title II through the Consolidated Grant to Insular Areas application 
process (Consolidated Grant process). The commenter recommended that if 
ED continues to permit the award of adult education funds through the 
Consolidated Grant process, the Departments should require that 
outlying areas choosing to go through the Consolidated Grant process 
include title II activities as part of the planning process for the 
Unified or Combined State Plan, even though their funding is awarded 
through the Consolidated Grant.
    Another commenter expressed concern that, if the outlying areas 
were not required to submit Unified or Combined State Plans for all 
core programs, a situation could exist in which the VR program would be 
the only component of such a plan if any of the outlying areas opted to 
include adult education program funds in its Consolidated Grant 
application process. The commenter suggested that, in such a situation, 
the Departments should ensure that outlying areas are not penalized and 
denied funding for the VR program, which is one of the six core 
programs under WIOA.
    Other commenters expressed general support for requiring outlying 
areas to submit Unified or Combined State Plans, and one commenter 
noted that the inconsistency in the definitions of ``State'' and 
``outlying areas'' in WIOA raised questions as to congressional intent 
on the issue of whether the Unified or Combined State Plan requirements 
should be applicable to the outlying areas. A commenter suggested, if 
the intent of differing definitions was to treat outlying areas 
differently than States, a more comprehensive delineation should be 
provided. In particular, the delineation should specify more than just 
a ``competitive process'' for the title I programs since outlying areas 
have historically received funding for these programs on a formula 
basis. The commenter suggested that the requirement for competitions is 
inconsistent with the need for a Unified or Combined State Plan 
because, under

[[Page 55799]]

a competition, funds would come into question every year. The commenter 
further suggested that if outlying areas are not going to be treated 
differently for purposes of the State planning requirements, a 
reconciliation of terms should be provided by Congress, thereby 
eliminating all ambiguity and restoring formula funding for the 
outlying areas through submission of a Unified or Combined State Plan.
    Departments' Response: The Departments agree that applying the 
Unified or Combined State Plan requirements to the outlying areas is 
most consistent with the vision under WIOA for all six core programs to 
provide an integrated and coordinated workforce development system.
    The Departments want to make clear that the State Plan requirements 
in WIOA secs. 102 and 103 apply to outlying areas, not just to States. 
To that end, the Departments have added clarifying language in Sec.  
676.105(e) of these final regulations. The Departments have concluded 
that requiring the outlying areas to submit Unified or Combined State 
Plans that incorporate all of the core programs as a prerequisite to 
receive funding under any of the core programs is most consistent with 
the plain meaning of WIOA's planning and allocation of funds 
requirements when both are read together. Further, it is the only 
interpretation that gives full meaning to the unified strategic 
planning required across all core programs.
    In resolving the apparent inconsistency and potential for confusion 
regarding the definitions of ``State'' and ``outlying area,'' as it was 
explained in the NPRM preamble, the Final Rule relies on the Secretary 
of Labor's general authority to regulate at sec. 189 of WIOA, and 
applicable provisions of titles II and IV of WIOA. In so doing, the 
Departments ensure that all core programs--and all grantees under each 
of those programs--are treated similarly, thereby achieving the vision 
of WIOA as an integrated and coordinated one-stop delivery system and a 
unified, strategic planning process encompassing all core programs.
    The Departments also agree with the commenter that the option, 
which has existed for ED, for outlying areas to include the adult 
education program as part of a Consolidated Grant application, raises 
some unique concerns with regard to the Unified or Combined State Plan 
requirements of WIOA. When an outlying area submits a Consolidated 
Grant application, pursuant to 48 U.S.C. 1469a, the application is 
submitted in lieu of any other State Plan required by any of the 
programs included in the Consolidated Grant application. The 
Departments have considered the suggestion made by the commenter; 
however, resolution of this particular concern goes beyond the scope of 
these joint regulations. The ED will take the recommendation under 
advisement and will address this issue more fully in its administration 
of the Consolidated Grant to Insular Areas.
    The Departments recognize that this interpretation raises 
additional questions with regard to the competition provisions that 
apply to the title I core programs in WIOA sec. 127(b)(1)(B). The DOL 
will address this issue in guidance.
Joint Planning Guidelines
    Comments: Proposed Sec.  676.105(a) is, in the NPRM, the first 
mention of joint planning guidelines to be issued by the Secretaries of 
Labor and Education. A number of commenters questioned whether the 
joint guidelines would be subject to public comment, and a few 
commenters challenged whether, in issuing the joint guidelines, the 
Departments would be in compliance with the Administrative Procedures 
Act (APA).
    Departments' Response: The Departments' joint planning guidelines, 
issued March 2016, complied with the APA. The APA does not require 
notice and comment for interpretative rules, general statements of 
policy, or rules of agency organization, procedure, or practice. See 5 
U.S.C. 553(b)(A). The planning guidance falls under these exceptions, 
and thus, was not subject to notice and comment rulemaking. 
Specifically, the guidance includes procedural rules explaining the 
mechanics of how a State must submit its State Plan, as well as 
interpretive rules as needed to explain the applicable statutory and 
regulatory requirement.
    Comments: One commenter supported the inclusion of adult education 
as a core program in the Unified State Plan in Sec.  676.105(b)(2), as 
well as the requirement that those who administer adult education 
programs be represented on State and Local WDBs. Multiple commenters 
asserted that any grant programs under the jurisdiction of DOL ETA and 
operated through the State Workforce Agency (SWA) or the one-stop 
delivery system should be required to be part of the State's Unified or 
Combined plan. As an example, the commenters said there should not be a 
separate planning process for the Jobs for Veterans' State Grant (JVSG) 
or Foreign Labor Certification. Another commenter said non-WIOA core 
program partners should be allowed to participate in the strategic 
portion of the planning process, even if they cannot fully align their 
program budgets and operational plans with a 2- or 4-year operational 
plan.
    Departments' Response: The Departments acknowledge the commenter's 
support for inclusion of those who administer adult education programs 
on the State and Local WDBs in the regulation as proposed. State and 
Local WDB requirements, and related comments, are discussed in sections 
of the DOL WIOA Final Rule preamble, which is published elsewhere in 
this issue of the Federal Register (see 20 CFR 679.110(b)(3)(iii)(A) 
and 679.320(d)).
    Regarding comments in support of including additional programs in 
the Unified State Plan, sec. 102(a) of WIOA and Sec.  676.105(b) make 
clear that only the core programs (as defined in sec. 3(12) and (13) of 
WIOA) are to be included in such plan. Paragraph (b) of Sec.  676.105 
is consistent with the six core programs identified throughout WIOA. 
States may submit a Combined State Plan that could include the programs 
mentioned by commenters. If a State chooses to submit a Combined State 
Plan, the plan must include the six core programs and one or more of 
the Combined State Plan partner programs and activities described in 
sec. 103(a)(2) of WIOA, and Sec.  676.140(d). The JVSG is a Combined 
State Plan partner program which States may include in a Combined State 
Plan as described under WIOA sec. 103 and Sec.  676.140(d). Foreign 
Labor Certification is not a Combined Plan partner program under WIOA 
sec. 103; however, a State may include a description of Foreign Labor 
Certification in its State Plan among its description of other programs 
and activities.
    Regarding the inclusion of non-WIOA core program partners in the 
strategic portion of the planning process, WIOA sec. 102(b)(2) requires 
State Plans to discuss alignment among core programs and the employment 
and training services within education and human services programs 
which operate in partnership with the one-stop delivery system, 
including those not authorized by WIOA. Although not described in the 
regulation for State Plans, this requirement is reflected in the WIOA 
State Plan ICR. The Departments agree that coordination with program 
partners and stakeholders to the fullest extent possible is vital for 
successful joint planning. In addition to the changes made to Sec.  
676.105(d)(3) as described above and relevant to these comments, the 
Departments revised Sec.  676.140 regarding Combined State Plans, which

[[Page 55800]]

will be discussed in more detail below in connection with that section. 
Further comments regarding the importance of public comment, review, 
input and coordination in development of the plan are discussed in this 
preamble in Sec.  676.130(c) and (d)(1) for Unified State Plans and 
under Sec. Sec.  676.140(e)(4) and 676.143(b) and (c) for Combined 
State Plans.
    Comments: A couple of commenters responded to the authority granted 
to the Secretaries by WIOA sec. 102(b)(2) to create additional 
operational planning requirements beyond those already detailed in 
statutory language. These commenters requested that the Secretaries, in 
their discretion, keep to a minimum any additional planning 
requirements to reduce the burden placed on States and to provide 
States with ample opportunity to comply with statutorily established 
planning elements.
    Departments' Response: The Departments have considered these 
comments and agree. WIOA contains a detailed description of planning 
requirements, and the Departments have chosen not to include all of the 
specific planning elements in the regulation. However, as made clear in 
the NPRM and this preamble, States must comply with all State planning 
requirements set forth in WIOA regardless of whether the requirements 
are repeated in these regulations. Comprehensive State Plan 
requirements for both Unified and Combined State Plans are detailed 
through the WIOA State Plan ICR. The Departments have endeavored to 
keep additional planning requirements to a minimum, while also 
attempting to ensure that the WIOA reform principles of program 
integration and alignment, job-driven training, accountability and 
transparency are reflected in the State Plans.
    Comments: The Departments received a number of comments that 
requested plan requirements be added. In response to these suggestions, 
described in more detail below, the Departments have made no change to 
the regulatory text but have indicated whether the particular suggested 
requirements are indeed already included in the applicable WIOA State 
Plan ICR, published on February 19, 2016. In future years, the WIOA 
State Plan ICR may undergo revisions. The level of detail of the plan 
requirements suggested by the following comments is more appropriately 
addressed in the WIOA State Plan ICR than in the regulatory text. The 
Departments have declined to incorporate the following suggested 
changes in the regulatory text, but the discussion of the following 
comments points to various provisions of the WIOA State Plan ICR and 
other places in the regulation that are pertinent to the commenters' 
concerns.
    Some commenters asserted that the regulation should require that 
States address priority of service for covered veterans, and for those 
veterans with service connected and non-service-connected (condition 
not as a result of military service) disabilities.
    Departments' Response: The Departments have reviewed these 
comments. The WIOA State Plan ICR requires that States describe in 
their Unified or Combined State Plans how they will implement and 
monitor the priority of service provisions for all veterans in 
accordance with the requirements of 38 U.S.C. 4215. This provision 
applies to all employment and training programs funded in whole or in 
part by DOL. In addition, the WIOA State Plan ICR requires States to 
explain the referral process for veterans determined to have a 
significant barrier to employment, including certain disabled veterans, 
to receive services from the JVSG program.
    Comments: One commenter said the Departments should unify the 
definition of ``supportive services'' across programs, thereby aligning 
adult education and literacy activities with other core programs and 
with one-stop partners. The commenter noted the disparity between the 
definition of ``supportive services'' under sec. 3(59) of WIOA and the 
definition of ``other services'' under career pathways programs. The 
commenter concluded that the quality and type of wraparound services 
offered should not be dependent on the program in which individuals 
participate, and the Departments should encourage States to develop 
comprehensive wraparound services that are available to adults, youth, 
dislocated workers, and adult education students whenever possible.
    Departments' Response: WIOA sec. 3(59) provides a definition of 
``supportive services;'' this definition applies to, and remains 
consistent across, all core programs. The WIOA State Plan ICR, which 
implements the statutory and regulatory requirements for Unified and 
Combined State Plans, requires States to describe how the entities 
carrying out the programs involved in the Unified or Combined State 
Plan including the core programs, any applicable Combined State Plan 
partner programs, and any mandatory and optional one-stop partner 
programs, will coordinate activities and resources to provide 
comprehensive, high-quality, customer-centered services. This 
requirement includes the provision of supportive services. However, the 
determination of need for, and the extent to which there is a need for, 
supportive services is within the State WDB's discretion, consistent 
with each of the individual program's authorizing statutes.
    Comments: One commenter, in response to Sec.  676.105(d)(1), said 
the Departments should ensure that consistent data definitions and 
comparable data are used to assess respective labor market areas.
    Departments' Response: The WIOA State Plan ICR emphasizes the use 
of economic analysis and labor market information throughout and also 
addresses alignment of labor market information systems. The 
Departments encourage States to use a variety of accurate, reliable, 
and timely labor market information on which to base analyses in the 
State Plan. However, consistent with WIOA, the Departments will not 
require States to use a particular dataset and will leave the choice of 
data sources to the States' discretion, thereby allowing each State to 
meet its own unique needs and circumstances.
Addressing the Needs of Individuals With Barriers to Employment
    Comments: A commenter suggested that the Departments require States 
to provide additional information regarding how they will address the 
needs of people with disabilities. Another commenter stated that WIOA 
requires that State and local planning efforts be informed by an 
analysis of various data, including data that include the education and 
skill levels of individuals with barriers to employment. A commenter 
said it would be helpful if the Departments explicitly required that 
States determine the number of individuals employed under 14(c) special 
wage certificates as part of the ``analysis of the current workforce, 
employment and unemployment data, labor market trends, and the 
educational and skill levels of the workforce, including individuals 
with barriers to employment (including individuals with disabilities), 
in the State'' pursuant to WIOA sec. 102(b)(1)(B). This commenter also 
stated that the strategic planning elements obligate the State to 
examine the specific employment related characteristics in their State 
and that this would be a valuable opportunity to gather information on 
employment statistics for individuals with disabilities.
    Departments' Response: Consistent with WIOA and these final 
regulations, multiple sections of the WIOA State

[[Page 55801]]

Plan ICR require the State to address the needs of individuals with 
barriers to employment. The term ``individual with a barrier to 
employment,'' as defined in sec. 3(24) of WIOA, encompasses the 
following groups of people: Individuals with disabilities, including 
youth with disabilities; displaced homemakers; low-income individuals; 
Indians, Alaska Natives, and Native Hawaiians; older individuals; ex-
offenders; homeless individuals, or homeless children and youths; youth 
who are in or have aged out of the foster care system; individuals who 
are English language learners, individuals who have low levels of 
literacy, and individuals facing substantial cultural barriers; 
farmworkers (as defined at sec. 167(i) of WIOA and Training and 
Employment Guidance Letter No. 35-14); individuals within 2 years of 
exhausting lifetime eligibility under the TANF program; single parents 
(including single pregnant women); and long-term unemployed 
individuals. Therefore, States are required to address the needs of 
individuals with disabilities in the Unified or Combined State Plan.
    Consistent with sec. 102(b)(1)(B) of WIOA and these final 
regulations, the WIOA State Plan ICR requires that State analysis 
related to individuals with barriers to employment include employment 
and unemployment, labor market trends, education, and skill levels of 
the workforce and any apparent gaps between the skills in demand by 
employers and the skill levels of the workforce. State and local 
planning efforts are informed by this analysis. Based on this analysis 
of workforce and labor market information required under sec. 
102(b)(1)(B) of WIOA, Sec.  676.105(d) and the WIOA State Plan ICR 
require State Plans to describe State's strategic vision and goals for 
developing its workforce and meeting employer needs in order to support 
economic growth and economic self-sufficiency. To that end, the State 
must describe its goals for preparing an educated and skilled 
workforce, including preparing youth and individuals with barriers to 
employment and other populations. Further, the WIOA State Plan ICR 
requires the State to assure that the State obtained input into the 
development of the Unified or Combined State Plan and provided an 
opportunity for comment on the plan by primary stakeholders, including 
organizations that provide services to individuals with barriers to 
employment and that the Unified or Combined State Plan is available and 
accessible to the general public.
    Additionally, the Departments agree that the number of individuals 
employed under 14(c) special wage certificates may be helpful as part 
of the analysis by the State of workforce needs. However, the benefit 
of requiring the collection of sufficient data elements to satisfy the 
needs of every program must be balanced with the burden such a 
requirement would impose on State program operators and participants. 
For this reason, the Departments are not regulating such a requirement. 
While the collection of this data element will not be required of 
States, comparable data is publicly available. When an employer applies 
for a sec. 14(c) certificate from the Department of Labor's Wage and 
Hour Division, the employer is required to report on their application 
the number of workers with disabilities they employed at subminimum 
wages during their most recently completed fiscal year. The Department 
of Labor's Wage and Hour Division posts on its Web site (https://www.dol.gov/whd/workerswithdisabilities/) lists of all employers who 
hold sec. 14(c) certificates and certain data elements reported on 
their applications, including the number of workers with disabilities 
who were paid subminimum wages.
    Finally, the Departments agree that the strategic planning elements 
requirements present a valuable opportunity to gather information on 
employment statistics for individuals with disabilities, so long as 
States are mindful of Federal and State law protecting personally 
identifiable information (PII).
    Comments: A couple of commenters said States should be required to 
include the following information in their State Plans: (1) Explicit 
activities focused on how they will work to ensure ``low-level 
learners'' and hard-to-serve populations are served by the State Plan, 
and (2) a report on the diversity of programs funded and the actions 
taken to ensure broad participation at the local level. A commenter 
urged the Departments to encourage States and localities to build 
activities into their State Plans specifically directed at raising 
awareness about older workers and dispelling stereotypes. This same 
commenter also urged the Departments to encourage States to create 
plans that ensure engagement of all players to help employers connect 
with older workers.
    Departments' Response: The Departments have reviewed these 
comments. As noted above, States must address in their Unified or 
Combined State Plans the needs of ``individuals with barriers to 
employment,'' as defined in sec. 3(24) of WIOA, in the State's 
workforce analysis, goals for the public workforce system and in the 
State's stakeholder input and public comment assurances. As described 
above, the term ``individual with a barrier to employment'' includes 
individuals who have low levels of literacy and older workers. However, 
the Governors and State WDBs will determine the explicit activities 
appropriate for their individual States. For this reason, the 
Departments are not requiring in these regulations specific activities 
to satisfy these requirements, though we acknowledge that some states 
may elect to do so. In developing their Unified or Combined State 
Plans, States must conduct a thorough analysis of labor market 
statistics, which will address the needs of specific populations. The 
Departments do not have authority under WIOA to require a report on the 
diversity of programs funded and the actions taken to ensure broad 
participation at the local level, as recommended by commenters.
    Comments: A few commenters recommended that the Departments 
encourage WDBs to establish effective operational partnerships with 
Continuum of Care bodies and State councils focused on homelessness. A 
couple of commenters also suggested that the Departments encourage 
State Plans to include specific strategies for using employment to 
prevent and end homelessness. One commenter provided examples of 
specific strategies for using employment to prevent and end 
homelessness, including HUD support for public housing residents, 
individuals with housing vouchers, and housing and community 
development projects. Lastly, this same commenter urged the Departments 
to work with HUD and other national experts and initiatives to identify 
and promote promising examples of where and how homeless services 
systems and workforce systems are working together for the benefit of 
increasing employment and economic opportunity for job seekers.
    Departments' Response: The Departments have reviewed these 
comments. The Departments encourage State and Local WDBs to partner 
with appropriate entities to address the needs and concerns of 
individuals who are homeless or at risk of homelessness, including 
Continuum of Care bodies, State councils focused on homelessness, and 
programs administered by HUD. These are appropriate strategies for a 
State Plan in States with significant issues related to individuals who 
are homeless or at-risk of homelessness. As noted above, in developing 
its Unified or Combined State Plan, the State must

[[Page 55802]]

address the needs of individuals with barriers to employment in the 
State's workforce analysis, goals for the public workforce system and 
in the State's stakeholder input and public comment assurances. An 
``individual with a barrier to employment'' in WIOA sec. 3(24) includes 
homeless individuals. Because each State's needs and circumstances are 
unique, the Departments have not imposed the additional planning 
requirements suggested by commenters in these final regulations. The 
Departments agree with the commenter about the need for increased 
collaboration at the Federal level and, to that end, the Departments 
have collaborated with other Federal agencies, including HUD, in 
developing the WIOA State Plan ICR and will continue to do so to ensure 
full implementation of WIOA.
    Comments: A few commenters stated that WIOA represents a 
substantial shift from the WIA because it increases the amount of title 
I youth funding dedicated to out-of-school youth to 75 percent (up from 
the prior 30 percent under WIA) and expands the age range to include 
those between 16 and 24 years old. The commenters said immigrants 
represent more than 1 in 10 youth in this age range nationwide. The 
commenters urged the Departments to explore ways to encourage States 
and Local WDBs to review their program design and recruitment 
strategies to ensure that they are reaching and effectively serving 
eligible immigrants and youth in their communities who are English 
language learners.
    Departments' Response: Some guidance has already been released by 
DOL related to the change in the percentage of youth program (title I) 
formula dollars that must be spent on out-of-school youth, (see TEGL 
No. 23-14), and DOL plans to issue further guidance and technical 
assistance focused on strategies for complying with this requirement. 
The Departments agree that States should address their strategies for 
serving out-of-school youth in State Plans. The WIOA State Plan ICR 
requires States to describe the strategies the State will use to 
achieve improved outcomes for out-of-school youth as they are defined 
in WIOA sec. 129(a)(1)(B), including how it will leverage and align the 
core programs, any Combined State Plan partner programs included in 
this plan, required and optional one-stop partner programs, and any 
other resources available. In developing their Unified or Combined 
State Plans, States must address the needs of individuals with barriers 
to employment in their workforce analysis, goals for the public 
workforce system and in stakeholder input and public comment 
assurances. Under WIOA sec. 3(24), individuals with barriers to 
employment include youth with disabilities, homeless children and 
youths, youth who are in or have aged out of the foster care system, 
individuals who are English language learners, individuals who have low 
levels of literacy, and individuals facing substantial cultural 
barriers. In their Unified or Combined State Plan, States also must 
describe how the one-stop delivery system will ensure that each one-
stop center is able to meet the needs of English language learners. The 
Departments encourage States with eligible immigrants and youth in 
their communities to revisit their program design and strategies to 
ensure that they are reaching and effectively serving these 
populations.
    Comments: A couple of commenters recommended that the Departments 
require that State Plans provide for access for English language 
learners to all title I-funded services. If any title I-funded programs 
in a State or locality are not explicitly expected to provide access to 
English language learners, the commenters continued, the Departments 
should require that the State or locality demonstrate how it is 
complying with Federal anti-discrimination provisions and providing 
equitable access to title I services for English language learners.
    Departments' Response: The Departments have reviewed these comments 
and agree that providing for the needs of English language learners 
through title I services, as well as other services, should be a 
component of all Unified and Combined State Plans. Sec. 
102(b)(2)(C)(vii) of WIOA requires States to describe how the one-stop 
delivery system (including one-stop center operators and the one-stop 
delivery system partners) will comply with sec. 188 of WIOA. In 
addition, the WIOA State Plan ICR requires States to describe how the 
one-stop delivery system (including one-stop center operators and the 
one-stop delivery system partners) will ensure that each one-stop 
center is able to meet the needs of English language learners, such as 
through established procedures, staff training, resources, and other 
materials.
    The Departments agree with the importance of ensuring that States 
address the needs of the specific populations mentioned by the 
commenters. As noted above, States must address, in developing their 
Unified or Combined State Plans, the needs of individuals with barriers 
to employment in their workforce analysis, goals for the public 
workforce system, and in stakeholder input and public comment 
assurances. It also should be noted that WIOA grant recipients are 
subject to all of the requirements of the sec. 188 WIOA 
Nondiscrimination and Equal Opportunity Regulations (29 CFR part 38).
Suggestions for State Plan Requirements
    Section 676.105(d)(3)(i) through (v) lists the operational planning 
elements that must be included in a Unified or Combined State Plan. 
Section 676.105(d)(3)(ii) states that operational planning elements 
must include State operating systems, including data systems, and 
policies that will support the implementation of the State's strategy.
    Comments: In response to these requirements, a commenter requested 
guidance on where to focus State efforts in technology planning. 
Specifically the commenter asked whether the State strategic plan can 
describe a schedule for developing a comprehensive technology plan and 
how States should prioritize investments in technology as funds become 
available. Another commenter requested guidance on the Departments' 
expectations regarding the States' development of a common intake 
system among one-stop partners.
    Departments' Response: The Departments have considered these 
comments and agree that additional guidance regarding the operational 
planning elements contained in a State Plan is appropriate. The 
Departments plan to issue joint planning and operational guidance 
regarding the technology planning and data systems to be used for 
reporting and intake systems. Further, States are encouraged to utilize 
the Departments' available technical assistance.
    Comments: A commenter recommended that the Departments require 
States to include and address the following five topics in their 
Unified State Plan: (1) Priority of Service, (2) Career Pathways, (3) 
Criteria for Selecting Employers for Work-based Training, (4) Youth 
Committees, and (5) Measurable Skill Gains. The commenter went on to 
detail how States should address each of the enumerated topics in the 
State Plans. Specifically, with regard to Priority of Service, the 
commenter recommended requiring that Unified State Plans include a 
description of how the Governor will ensure priority of service for 
title I adult career and training services for recipients of public 
assistance, individuals who are basic skills deficient, and other low-
income individuals. Regarding career pathways, the commenter said 
Unified State Plans should be required to explain: How the

[[Page 55803]]

WIOA definition of a career pathway will be applied to the programs in 
their State that align with industries in the regional economy; how the 
State will make accessible secondary and postsecondary education; how 
the State will include individual education and career counseling 
services; how the State will include integrated education and training; 
how the State is organized for acceleration; how the State will make 
available high school equivalency and at least one postsecondary 
credential; and how the State will promote career advancement. The 
commenter also recommended that Unified State Plans be required to 
demonstrate how they will track career pathway participants whose 
service happens not within one particular Federal program and funding 
stream, but across these programs through co-enrollment. In addition, 
this same commenter urged the Departments to require States to list the 
criteria they will use for selecting employers as an operational 
element of the Unified State Plan, and to ensure that local plans in 
their State similarly describe the criteria they will use for selecting 
employers. Regarding youth committees, the commenter recommended that 
the Departments require States to explain in their State Plans the 
State-directed format for local areas youth committee elections. 
Lastly, to ensure the effective implementation of the measurable skill 
gains indicator, the commenter recommended that Unified State Plans be 
required to ensure that local plans include: (1) A process describing 
how they will use the measurable skill gains indicator based on their 
service delivery strategies across programs, and (2) a list of the 
measurable skill gains that they will be utilizing in the coming year.
    Departments' Response: The Departments considered this comment but 
did not revise the regulatory text. Many of the concerns are already 
addressed by sec. 102 of WIOA, these regulations, and the WIOA State 
Plan ICR. The WIOA State Plan ICR, consistent with sec. 134(c)(3)(E) of 
WIOA, requires States to address, in developing their Unified or 
Combined State Plans, priority in the delivery of career and training 
services to individuals who are low income, public assistance 
recipients, or basic skills deficient. With regard to the commenter's 
concern about career pathways, the WIOA State Plan ICR, consistent with 
secs. 101(d)(3)(B) and 102(b)(2)(B)(ii) of WIOA, includes requirements 
for the State to describe both its sector and career pathways strategy. 
Further comments regarding career pathways are discussed in detail 
below. With regard to the commenter's concerns about work-based 
training, the WIOA State Plan ICR requires States to address work-based 
learning approaches as a part of adult, dislocated worker, and youth 
activities under title I-B of WIOA. However, the Departments decline to 
require a specific policy on employer criteria because the description 
of the State's approach will provide sufficient information to the 
Departments and stakeholders. Regarding youth committees, WIOA 
eliminates the requirement for Local WDBs to establish a youth council; 
however, the Local WDB may choose to establish a standing youth 
committee, as described at 20 CFR 681.110 (see DOL WIOA Final Rule). 
States with Local WDBs that have chosen to form standing youth 
committees may describe this as a part of the State's operational 
planning elements, which are required in the WIOA State Plan ICR. 
However, the Departments have declined to require that States address 
standing youth committees because the creation of standing youth 
committees is determined by Local WDBs and the appropriateness of 
including such committees in the State Plan will vary from State to 
State. The DOL has issued guidance on standing youth committees, in 
TEGL No. 23-14 and in TEGL No. 8-15. Lastly, measurable skill gains is 
a required performance indicator under WIOA and it is defined in part 
677 of this Joint WIOA Final Rule. That part further defines the 
specific allowable skill gains. The Departments addressed the data 
collection necessary to sufficiently measure skill gains and identify 
other indicators in the WIOA Joint Performance ICR. The Departments 
also provided further guidance on this particular issue. Therefore, the 
Departments decline to revise the regulatory text in response to the 
concerns discussed above.
    Comments: Some commenters said the Departments should require the 
States to include in their Unified or Combined State Plans a 
demonstration of how they will ensure that eligible providers have 
direct and equitable access to apply and compete for grants or 
contracts.
    Departments' Response: In response to this concern, the Departments 
direct the commenters to the WIOA State Plan ICR, which requires States 
to describe, with regard to the distribution of funds for title II 
programs in particular, how the eligible agency will ensure direct and 
equitable access to all eligible providers to apply and compete for 
funds. This provision in the WIOA State Plan ICR is consistent with 
sec. 231(c) of WIOA requiring direct and equitable access for all 
eligible providers under title II. Further, the WIOA State Plan ICR 
requires States to describe how the eligible agency will ensure that it 
is using the same grant or contract announcement and application 
procedure for all eligible providers. The guidance sufficiently 
addresses the commenters' concerns; no changes to the regulatory text 
were made in response to these comments.
    Comments: One commenter remarked that throughout the ``Career 
Services'' section of the law, there are references to the 
``assistance'' provided by the one-stop center or its contractor as it 
relates to financial aid eligibility and filing for unemployment 
compensation. Due to the significant decline in resources, the 
commenter requested that State Plans address how statewide resources 
will be utilized to ensure local areas have enough staff to meet this 
demand, including how the State will allocate funding and merit staff.
    Departments' Response: The Departments have considered this comment 
and concluded that adopting a requirement such as that would result in 
substantial burden to the States. The purpose of WIOA is best served if 
the States retain flexibility to determine the best use of staff 
resources to deliver workforce services in the State.
Industry and Sector Partnerships
    Comments: Several commenters recommended that the Departments 
require States to describe in the Unified State Plan how they will 
carry out the requirements under WIOA sec. 101(d)(3)(D) relating to the 
development of industry or sector partnerships. One of these commenters 
made several recommendations with regard to industry or sector 
partnerships. First, require regional plans to clarify the relationship 
between regional sector initiatives and any industry or sector 
partnerships in the regional planning area. Second, establish a new 
subpart H covering Industry or Sector Partnerships that, at a minimum, 
(a) describes the purposes of industry or sector partnerships, (b) 
reiterates the required partners for an industry or sector partnership 
as set forth in WIOA, (c) clarifies the role of Local WDBs in industry 
and sector partnerships, (d) identifies the ways in which States and 
local areas can evaluate the effectiveness of industry or sector 
partnerships, and (e) eliminates the current references to industry or 
sector partnerships in proposed Sec.  678.435, which generally 
describes the business services that must be provided through the one-
stop delivery system.

[[Page 55804]]

Additionally, as noted in the portion of the DOL WIOA NPRM preamble 
addressing 20 CFR 675.300, commenters recommended that the Departments 
define the terms ``Industry and Sector Partnership'' and ``Sector 
Strategy'' and suggested specific components to include in such 
definitions.
    Departments' Response: The WIOA State Plan ICR requires States to 
describe the strategies they will implement, including industry or 
sector partnerships related to in-demand industry sectors and 
occupations and career pathways, as required by WIOA sec. 101(d)(3)(B) 
and (D). It also requires States to address industry sectors and 
occupations throughout the analyses required in the State Plan. 
Additionally, WIOA sec. 3(26) defines ``industry or sector 
partnership.'' Due to the changing needs of the workforce and 
employers, and in order to maximize States' flexibility to develop 
strategies to address these changing needs, the Departments decline to 
change the regulation to be more prescriptive through changing the 
definition of ``industry or sector partnership,'' defining the term 
``sector strategy,'' or adding a new subpart H on industry or sector 
partnerships. The Departments have provided technical assistance on 
sector strategies and plan to continue to do so while also issuing 
further guidance on industry and sector partnerships. Lastly, regional 
planning requirements are addressed in 20 CFR 679.510 (see DOL WIOA 
Final Rule published elsewhere in this issue of the Federal Register).
    Comments: One commenter recommended that special emphasis be placed 
upon highlighting the importance of credentialing within industry and 
sector partnerships, especially for new high-growth industries. 
Specifically, the commenter recommended the following: (1) Funds be 
specifically allocated and used for State and local credentialing 
efforts within industry or sector partnerships, (2) DOL link 
credentialing to industry or sector partnerships and amend the proposed 
State Plan requirements to require States to use explicit language to 
clarify how they will integrate credentialing into the development of 
new industry or sector partnerships, where applicable, and (3) States 
should be required to explain their efforts to find industry-driven 
credentials as part of their Unified State Plans while providing a list 
of those credentials to DOL.
    Departments' Response: The Departments agree that credentialing as 
a part of industry or sector partnerships is important. The WIOA State 
Plan ICR supports the inclusion of credentialing and its role in sector 
and career pathways strategies. Specifically, the WIOA State Plan ICR, 
consistent with sec. 102(b)(2)(B)(vi) of WIOA, requires States to 
describe how their strategies will improve access to activities leading 
to recognized postsecondary credentials, including registered 
apprenticeship certificates. The requirement in the WIOA State Plan ICR 
further includes credentials that are industry-recognized certificates, 
licenses, or certifications, and that are portable and stackable. The 
WIOA State Plan ICR also requires States to describe the strategies the 
State will implement, including industry or sector partnerships related 
to in-demand industry sectors and occupations and career pathways, as 
required by WIOA sec. 101(d)(3)(B) and (D). Such strategies may include 
the use of credentials or industry-recognized certificates. The 
Departments have concluded that these requirements adequately address 
the States' use of credentials within industry or sector partnerships. 
The Departments have declined to require States to use explicit 
language regarding how they will integrate credentialing and the 
State's efforts to fund industry-driven credentials, or to require that 
States provide a list of those credentials to the Departments to reduce 
planning burdens on States. Lastly, funding allocations for State 
credentialing efforts are outside the authority of this rule.
Career Pathways
    Comments: Several commenters were pleased that WIOA sec. 3(7) 
codifies a definition of ``career pathways'' in Federal law, but they 
expressed concern that the rule includes little guidance on how career 
pathways are to be implemented. These commenters recommended that the 
Departments require States to describe how they will carry out the 
requirements under WIOA relating to the development of career pathways.
    Departments' Response: The Departments considered the commenters' 
support for the WIOA definition of career pathways and the 
recommendation that States be required to describe how they will carry 
out the development of career pathways in the State Plan. Career 
pathways are designed to serve a diverse group of learners, including 
youth, dislocated workers, veterans, individuals with disabilities, 
individuals who have low levels of literacy or English proficiency, new 
immigrants, women, and minorities. Career pathways programs provide 
opportunities for more flexible education and training, allow people to 
earn industry-recognized credentials, and support the attainment of 
marketable skills that transfer into work for all. The Departments are 
choosing not to regulate further regarding the implementation of career 
pathways in order to promote maximum flexibility at the State and local 
level, and the Departments will continue to support career pathways 
programs locally and regionally through comprehensive technical 
assistance.
    Comments: A number of commenters recommended that the rule clarify 
the minimum requirements that a Local WDB must satisfy in order to 
demonstrate successful implementation of career pathways.
    A few commenters encouraged the Departments to use a forthcoming 
Career Pathways and Credentials Toolkit to amplify and build awareness 
of States' and localities' requirements for career pathways under WIOA.
    Another commenter encouraged the Departments to expand the use of 
career pathways, especially for racial minorities and women, and to 
provide support to States and localities as they implement plans to 
improve career pathways available locally and regionally.
    One commenter said the Departments should offer more specific 
guidance for operationalizing career pathways, such as acceptable 
strategies for braiding funding streams from titles I and II of WIOA 
and ways to identify and improve career pathways programs, with a 
particular focus on how to integrate wraparound services successfully 
into career pathways programs.
    One commenter provided the following recommendations:
     Unified State Plans should be required to demonstrate how 
to track career pathway participants whose service happens across 
Federal program and funding streams through co-enrollment.
     The required elements for the Unified State Plan should 
specify the need to identify co-enrolled participants across the WIOA 
titles and in the CTE and human service partner systems.
     Unified State Plans should illustrate roles for CTE 
partners in development and implementation of career pathways, 
including strategies for co-enrollment.
     The Joint WIOA Final Rule should provide guidance to title 
I and title II providers on working with CTE in the design and 
implementation of career pathways, and should promote shared decision-
making.
     Unified State Plans should be required to address 
strategies for serving TANF recipients through career pathway 
programming, as part of the plan's description of how career

[[Page 55805]]

pathway services will be provided to adults, youth, and individuals 
with barriers to employment.
    Departments' Response: Consistent with sec. 101(d)(3)(D) of WIOA, 
the WIOA State Plan ICR includes requirements for the State to describe 
the career pathways strategies. The WIOA State Plan ICR, consistent 
with secs. 101(d) and 102(b)(2) of WIOA, also requires States to 
describe how such activities will be aligned across the core programs 
and Combined State Plan partner programs included in the State Plan and 
among the entities administering the programs, including using co-
enrollment and other strategies, as appropriate. States have the option 
of including strategies that address TANF recipients as well as the 
option of including TANF as a Combined State Plan partner program in a 
Combined State Plan. Because career pathways, co-enrollment, and TANF 
recipients already are reflected in guidance, the Departments decline 
to regulate planning requirements regarding career pathways further. 
Regarding commenters' suggestions for specific strategies around 
implementation and requests for guidance, the Departments agree that 
additional guidance is necessary to describe WIOA requirements for 
incorporating career pathways into the State's strategies, although the 
Departments have concluded that additional regulatory text on career 
pathways is not necessary. The Departments are working in partnership 
with other Federal agencies to provide additional guidance on the 
implementation of career pathways in WIOA, and the Departments continue 
to take steps to incorporate career pathways approaches into a wide 
range of program investments, evaluation and research activities, and 
technical assistance efforts.
Combined State Plan Partner Programs
    Paragraph (d)(2) of Sec.  676.105 specifically requires that 
Unified State Plans include strategies for aligning the core programs 
with Combined State Plan partner programs and other resources to 
support the State's vision and goals (WIOA sec. 102(b)(1)).
    Comments: A few commenters noted that the term ``optional 
programs'' is not used in WIOA sec. 102(b)(1), but the commenters also 
acknowledged that from the context it is apparent that the Departments 
intended to refer to the programs described at sec. 103(a)(2) and 
proposed Sec.  676.140(d). The commenters supported this language, but 
they encouraged the Departments to clarify this intent explicitly by 
amending proposed Sec.  676.105(d)(2) to include ``as described in 
Sec.  676.140(d)'' after the words ``optional programs.'' One commenter 
stated that while the use of the term ``optional programs'' for other 
workforce development programs is understood to be in reference to the 
fact that they are not required to be part of Unified Plans, there is 
the danger that the term could inadvertently send a message about the 
value of these programs. The commenter recommended that guidance should 
clarify that ``optional'' only refers to the planning requirements and 
does not imply that other programs beyond the WIOA ``core'' programs 
are any less essential to workforce development.
    Departments' Response: The Departments have reviewed these comments 
and agree that the term ``optional program'' was unclear. The term 
``optional,'' as used in the NPRM, referred to the State's option of 
including these partner programs in a Combined State Plan. The 
Departments also agree that Combined State Plan partner programs are a 
valuable part of the workforce development system and the Departments 
encourage States to maximize the involvement of these programs in 
developing the State's strategies, goals, and vision for the one-stop 
delivery system in each State. The Departments revised Sec.  
676.105(d)(2), by replacing the term ``optional programs'' with 
``Combined State Plan partner programs'' and also applied the suggested 
edit cross-referencing the term to Sec.  676.140. The sentence now 
reads as ``Strategies for aligning the core programs and Combined State 
Plan partner programs as described in Sec.  676.140(d), as well as 
other resources available to the State, to achieve the strategic vision 
and goals in accordance with sec. 102(b)(1)(E) of WIOA.'' Throughout 
this preamble to the Joint WIOA Final Rule, the Departments have 
generally used the term ``Combined State Plan partner program'' to 
refer to what were called ``optional programs'' in the NPRM.
Coordination in Plan Development
    Comments: A number of commenters expressed concern about having an 
adequate voice and input into the State Plan development process. One 
commenter requested that the Departments issue a stronger or clearer 
regulation addressing which entities must be involved in the process.
    Departments' Response: The Departments reviewed these comments and 
agree that the regulation would benefit from a more explicit statement 
regarding the role of core programs in the planning process. In 
response to these comments, the Departments have added a new paragraph 
(d)(3)(v) to Sec.  676.105 to clarify that operational planning 
elements must include a description of joint planning methods across 
core programs and required one-stop partner programs and other programs 
and activities in the Unified Plan. Due to this addition, proposed 
Sec.  676.105(d)(3)(v) has been redesignated as Sec.  676.105(d)(3)(vi) 
in this Joint WIOA Final Rule. The Departments also have added a new 
paragraph (c) to Sec.  676.130 to explain how stakeholder and core 
program providers should be involved in plan development, as well as 
the role of the State WDB in plan development. The Departments have 
made parallel revisions to Sec. Sec.  676.140 and 676.143 for Combined 
State Plans, all of which will be discussed in connection with each of 
these provisions.
    Comments: Several commenters supported the unified planning process 
in general but expressed concern about the lack of oversight and 
enforcement mechanisms regarding the requirement that the development 
of the plan is collaborative. The commenters urged the Departments to 
remind all the core programs that they must truly collaborate if WIOA 
is to succeed.
    Similarly, a commenter said the rule's strategic approach will 
require constant collaboration between Federal, State, and local 
governments, as well as other community partners, but the willingness 
to collaborate among these actors must be present. This commenter said 
other challenges include resistance to change within the workforce 
system, procurement requirements in a single State area, and 
conflicting performance requirements from different funding streams.
    Another commenter said research has shown that bundling multiple 
services leads to more successful outcomes in the workforce development 
field, and the workforce system provides an ideal platform to integrate 
financial capability services because they both are focused on ensuring 
individuals have the tools to participate in, contribute to, and 
benefit from the mainstream economy.
    Departments' Response: The Departments issued this Final Rule 
jointly to lay the foundation, through coordination and collaboration 
at the Federal level, for implementing the vision and goals of WIOA. 
One of WIOA's principal areas of reform is to require States to plan 
across programs and include this planning process in the Unified or 
Combined State Plans, which promotes a shared understanding of the 
workforce needs of a State and a comprehensive strategy for addressing 
those needs. Unified or combined

[[Page 55806]]

planning can support better alignment of resources, increased 
coordination among programs, and improved efficiency in service 
delivery. The Departments considered these comments and recognize the 
challenges mentioned by the commenters. WIOA placed heightened emphasis 
on coordination and collaboration at the Federal, State, and local 
levels to ensure a streamlined and coordinated service delivery system 
for job seekers. The WIOA State Plan ICR, consistent with the statutory 
and regulatory requirements, reinforces the importance of collaboration 
in the development of State Plans. However, to further address these 
comments and others relating to the issue of collaboration and 
stakeholder involvement, the Departments have added new paragraph 
(d)(3)(v) to Sec.  676.105 to clarify that operational planning 
elements must include a description of joint planning methods across 
core programs and required one-stop partner programs in the Unified 
Plan. The WIOA statute and the WIOA State Plan ICR require the State to 
assure that core programs have ``reviewed and commented on the 
appropriate operational planning elements of the Unified State Plan, 
and approved the elements as serving the needs of the populations 
served by such programs.'' The Departments have amended Sec.  
676.105(d)(3)(iv) to emphasize this statutorily required assurance.
    Lastly, the Departments note that some of the stated challenges, 
such as procurement requirements, are not relevant to the regulation of 
State Plans. Regarding the challenges cited by commenters regarding 
differing reporting requirements, WIOA has addressed this challenge by 
requiring the six core programs to report performance outcomes against 
the primary indicators of performance. The core programs will all use 
the same definitions and data elements. The Departments agree that 
aligning performance outcomes is a significant step toward aligning 
programs. WIOA sec. 116's performance requirements are addressed in the 
WIOA State Plan ICR Appendix 1, as well as the WIOA Joint Performance 
ICR and part 677 of this Joint WIOA Final Rule.
The Role of State Workforce Development Boards in Plan Development
    Comments: Several commenters requested clarification about the role 
of the State WDB in approval of State Plans. One commenter said the 
Departments should require the State WDB to review and approve the 
State Plan before submission. This same commenter asked if core 
programs were required to sign off on the plan, or if their 
representation on the State WDB would serve that purpose. A commenter 
asked about the authority of a State WDB over specific programs' plans, 
specifically requesting clarification on whether the Board can, in 
effect, veto a portion of the plan.
    Departments' Response: The Departments reviewed these comments and 
agree that the Joint WIOA Final Rule should provide additional 
clarification about the role of the State WDB in approval of State 
Plans. Accordingly, the Departments revised Sec. Sec.  676.130(c) and 
676.143(b) to clarify expected roles during plan development. More 
detail will be provided in the discussions related to these particular 
sections below. The Departments expect the States to recognize the 
importance of an inclusive and collaborative process in developing the 
State Plan. The Departments also have revised Sec.  676.105(d)(3)(iv), 
which implements an assurance required by sec. 102(b)(2)(E) of WIOA. 
Under Sec.  676.105(d)(3)(iv), States are required to assure that the 
lead State agencies responsible for the administration of the core 
programs review and comment on the appropriate operational planning 
sections of the Unified State Plan and approve that each element serves 
the needs of the population served by such programs.
    Comments: A commenter requested clarification on the processes of 
State, regional, and local planning. Specifically, this commenter 
wondered how much direct influence local workforce boards will have in 
their State's respective State Plans. The commenter requested greater 
assurances that Local WDBs be systematically included in the State 
planning process. Similarly, a commenter recommended that Governors 
must have Local WDB and CEO consent before taking actions impacting 
Local WDBs, stating that most of the best innovations are developed 
based on local relationships. Another commenter recommended regulatory 
language that enables local areas to meet the needs of the State WDB in 
meeting their responsibilities under WIOA for statewide planning, but 
encourages and allows local areas to provide their own input, feedback, 
and strategies within the local plan.
    Departments' Response: The Departments agree with the commenters 
that it is important for the Governor to include Local WDBs and CEOs in 
the State planning process. Section 679.110 of 20 CFR requires that 
State WDB membership include two or more CEOs (see DOL WIOA Final Rule 
published elsewhere in this issue of the Federal Register). The 
Governor has the flexibility to appoint more local elected officials to 
the State WDB as he/she sees fit. The Departments encourage the 
Governor to use this authority, which may include increasing the 
representation of CEOs, to ensure accurate representation of the 
interests of job seekers and businesses in the State and also to ensure 
the involvement of these local representatives in the State planning 
process. WIOA does not require that Governors must have Local WDB and 
CEO consent before taking actions impacting Local WDBs. However, the 
Departments do expect engagement of Local WDBs in the development of 
the State Plan through public comment and input. This is further 
discussed below at Sec.  676.130(d). The requirements for local plan 
development and input are discussed in 20 CFR 679.550 (see DOL WIOA 
Final Rule published elsewhere in this issue of the Federal Register).
Section 676.110 What are the program-specific requirements in the 
Unified State Plan for the adult, dislocated worker, and youth programs 
authorized under Workforce Innovation and Opportunity Act title I?
    Section 676.110 indicates that program-specific requirements for 
the adult, dislocated worker, and youth workforce investment activities 
in the Unified State Plan are described in sec. 102(b)(2)(D)(i) of 
WIOA. Additional planning requirements may be explained in joint 
planning guidelines issued by the Secretaries of Labor and Education.
Proposed Additional Title I Program-Specific Requirements to State 
Plans
    Comments: One commenter agreed with the proposed program-specific 
requirements in Sec. Sec.  676.110 through 676.125. Another commenter 
stated that this section provides insufficient direction and 
accountability to ensure that the needs of individuals with a barrier 
to employment or who have priority of service are adequately included 
and addressed in a Unified or Combined State Plan. The commenter 
recommended that the Departments require that State and local planning 
efforts utilize the most current Census and administrative data 
available to develop estimates of each priority service population in 
their planning efforts, and update these data year to year. The 
commenter said these data should be utilized in Federal reviews of 
State Plans to ensure that system designs and projected investments are

[[Page 55807]]

equitably targeted to service-priority populations. The commenter 
further stated that the data also should be used to benchmark system 
performance in actual implementation of the priority of service from 
year to year.
    Departments' Response: The Departments have considered these 
comments. The WIOA State Plan ICR, consistent with WIOA requirements 
for title I-B programs, requires States to address priority in the 
delivery of career and training services to individuals who are low 
income, public assistance recipients, or basic skills deficient. WIOA 
sec. 134(c)(3)(E) prioritizes these groups for the receipt of 
individualized career services and training services. The Departments 
encourage States to use a variety of accurate, reliable, and timely 
labor market information on which to base analysis and priority of 
service. Indeed, priority for use of adult funds can be made using a 
variety of available data, in addition to the use of Census data. 
However, to minimize the burden for each individual State, the 
Departments will not require States to use a particular dataset, 
leaving it to the discretion of the States to choose the appropriate 
data sources.
Section 676.115 What are the program-specific requirements in the 
Unified State Plan for the Adult Education and Family Literacy Act 
program authorized under Workforce Innovation and Opportunity Act title 
II?
    Section 676.115 explains the additional planning requirements to 
which the AEFLA program is subject. Section 676.115 contains three 
specific program requirements. First, Sec.  676.115(a) restates the 
statutory requirement that the eligible agency must explain in its 
Unified or Combined State Plan how it will align its adult education 
content standards with its State-adopted challenging academic content 
standards under the Elementary and Secondary Education Act by July 1, 
2016. Second, Sec.  676.115(b)(1) addresses the requirement that States 
describe the methods and factors the State will use to award multi-year 
grants on a competitive basis to eligible providers. Third, Sec.  
676.115(b)(2) requires that States describe the methods and factors 
used to provide direct and equitable access to funds using the same 
grant or contract announcement or application procedure. Based on 
comments, and as discussed further below, the Departments have deleted 
proposed regulatory text at Sec.  676.115(c) concerning a requirement 
to describe the interoperability of data systems. Deletion of paragraph 
(c) is the only substantive change made to this regulatory provision 
from that proposed in the NPRM.
Timing of Plan Acceptance and Open Competitions
    Comments: Many commenters expressed concern that States may have to 
issue requests for proposals (RFPs) for funds before the plans have 
been approved. Several commenters said that this would result in an RFP 
process that does not address the objectives of the State Plan. Some 
commenters asked that the Departments provide an additional transition 
year in order to allow for the time necessary for States to receive 
State and local plan approval and begin the implementation of the 
approved plans, after which the States could run their competitions in 
alignment with the approved plans.
    Departments' Response: The Departments agree with the commenters' 
concerns and recognize the time that is required for State procurement 
processes. The ED understands that it would create difficulties to 
require States to issue RFPs prior to the State Plan being approved 
when the RFPs are intended to be based on the approved State Plan. 
Additionally local plans must be in place before the RFP can be issued 
so applications for subgrants can be aligned with local plans. The ED 
has issued guidance regarding the process for awarding subgrants to 
eligible providers authorized under title II, which provides 
information regarding the timing of competitions and their alignment 
with State and local plans. It is not necessary to address this concern 
in the regulation and the regulation is not revised in response to 
these comments.
Alignment With State Elementary and Secondary Education Act Standards
    Comments: Numerous commenters stated that most States have adopted 
the College and Career Readiness Standards for adult education and will 
demonstrate in their State Plans how the College and Career Readiness 
Standards for adult education align with the standards that State 
established under the Elementary and Secondary Education Act of 1965, 
as amended (ESEA). These commenters also expressed concern regarding 
the unavailability of standards for adult education that focus on 
English Language Acquisition. Additionally, commenters raised concerns 
about the absence of assessments that measure performance on the 
College and Career Readiness Standards for adult education and 
recommended that the Departments provide a 3-year transition period 
during which States are held accountable based on the available 
assessments instruments. A commenter also recommended that the 
Departments integrate the English language descriptors into the current 
adult education National Reporting System Educational Functioning 
Levels descriptors. Finally, another commenter recommended that the 
Departments adjust accountability measurements to reflect separate 
English Language Acquisition tables in the National Reporting System 
from the standard adult basic education (ABE) standards.
    Departments' Response: The Departments have reviewed the 
commenters' concerns related to having adequate time to establish 
English Language Acquisition content standards, as well as the lack of 
assessment mechanism to measure adult education content standards. The 
ED recognizes that English Language Acquisition content standards do 
not yet exist. The ED acknowledges that there are currently no National 
Reporting System-approved assessment instruments by which to measure 
student progress and achievement in relation to College and Career 
Readiness standards. However, based on our review of the comments, it 
appears that some commenters might have misunderstood the proposed 
requirement pertaining to content standards. The final regulations 
require the eligible agency to describe in the Unified State Plan how, 
by July 1, 2016, it will align its content standards for adult 
education with State-adopted challenging academic standards under the 
ESEA. The regulations do not require that the State implement those 
standards by July 1, 2016, or that the State implement assessments 
aligned to the standards by July 1, 2016. The ED intends to issue 
guidance pertaining to the alignment and implementation of standards; 
the standards for English language acquisition; and the aligned 
assessments for accountability in adult education. Finally, although 
the Departments reviewed the comments about the integration of the 
English Language Acquisition descriptors into the National Reporting 
System and the separation of the accountability measures in the English 
Language Acquisition table from the ABE tables, the Departments 
concluded that they do not have the statutory authority to address 
these in the final regulations. No changes to the regulatory text were 
made in response to these comments.
Interoperability of Data Systems
    Comments: Numerous commenters sought clarification on the 
definition of

[[Page 55808]]

``interoperability.'' Several commenters stated that there is a 
national data integration workgroup at the Federal level; and 
recommended that, rather than each State expending time and funds to 
create an interoperable system, the Departments give the States the 
option to await the results of the national data integration workgroup 
before creating their State interoperable system.
    Commenters stated that, due to the variety in State data systems, 
regulations that attempt to implement a ``one size fits all'' approach 
are impractical. These commenters recommended that the Departments 
convey expectations for interoperability via non-regulatory guidance 
(including guidance highlighting existing solutions and offering States 
options for reporting this data). A commenter recommended that DOL work 
with other Federal agencies to establish minimum national standards for 
how integrated data systems should be designed and interface with 
existing public systems to support the employment needs of adults and 
youth facing barriers to employment. The commenter also urged DOL to 
work with other Federal agencies to ensure that integrated data systems 
align with existing data being collected on employment, education, and 
training services across Federal programs.
    A commenter said the requirement for a description of how the State 
will ensure interoperability of data systems in the reporting on core 
indicators of performance and performance reports is listed only under 
the AEFLA title II specific section (Sec.  676.115); however, in the 
law, the requirement for such information is listed under sec. 
102(b)(2)(C) State Operating Systems and Policies of WIOA. Therefore, 
the commenter suggested Sec.  676.115(c) should be moved to Sec.  
676.105, General Requirements. Another commenter said the regulations 
place the responsibility of ensuring interoperability of data systems 
on the title II adult education programs, which is not feasible because 
the various data systems are governed under different programs and 
frequently by different agencies. The commenter also said the rule 
seems to place the burden of supporting the cost of interoperability on 
title II adult education programs, which is not equitable because there 
will likely be a significant cost to creating such interoperability. 
The commenter recommended that the Departments restate this in 
regulation as a joint requirement of core programs and any programs 
included in a Combined State Plan.
    Departments' Response: The Departments agree with commenters' 
concerns regarding the complexity of integration, including the amount 
of time, planning, and resources necessary to achieve such integration. 
The Departments agree with the commenters that the integration and 
interoperability of data systems is not limited to title II of WIOA. 
The Departments understand that performance and accountability data 
collection and systems integration is a long-term process that will 
involve additional costs and resources for all programs. The 
Departments will review reports from the national data integration 
workgroup, as well as information from the planning descriptions 
provided by States in the initial State Plan, to inform possible policy 
decisions and the development of guidance on this topic. The 
Departments also will look into similar data collection and system 
integration across Federal agencies that provide employment, education, 
and training services.
    As a result of these concerns, the Departments have removed the 
language proposed in Sec.  676.115(c), and instead have included in the 
WIOA State Plan ICR, consistent with sec. 102(b)(2)(C) of WIOA, a 
general requirement that States address fiscal and management 
accountability information system planning across all of the programs 
included in a Unified or Combined State Plan, as required by sec. 
116(i)(1) of WIOA.
Direct and Equitable
    Comments: Regarding Sec.  676.115(b)(2), which specifies that all 
eligible agencies ``will provide direct and equitable access to 
funds,'' several commenters said that there is no specific mention of 
this requirement in Sec.  676.140, which governs the Combined State 
Plan. One commenter sought clarification on whether this was 
intentional or an oversight.
    Departments' Response: The Departments have reviewed these comments 
and agree that the omission of the requirement related to direct and 
equitable access of funds in the Combined State Plan was an error. The 
Departments have revised Sec.  676.140(e)(1) to include this 
requirement in the regulations that address the Combined State Plan.
Request for Guidance
    Comments: Several commenters said States should be required to 
identify the guidance they will provide to eligible providers for 
nominating an adult education representative to the Local WDB that 
would represent all eligible providers in the region as well as 
communicate board activities.
    Departments' Response: The Departments have reviewed the comments 
supporting a requirement that States issue guidance for adult education 
representation on the Local WDB. States have the authority to issue 
such guidance and it is not necessary to revise the regulations to 
address this specific need.
Section 676.120 What are the program-specific requirements in the 
Unified State Plan for the Employment Service program authorized under 
the Wagner-Peyser Act, as amended by Workforce Innovation and 
Opportunity Act title III?
    Section 676.120 states that Wagner-Peyser Act Employment Service 
programs are subject to the requirements in sec. 102(b) of WIOA, 
including any additional requirements imposed by the Secretary of Labor 
under secs. 102(b)(2)(C)(viii) and 102(b)(2)(D)(iv) of WIOA. This 
section requires States to include any information the Secretary of 
Labor determines is necessary to administer the Wagner-Peyser Act 
Employment Services programs. The Departments have provided additional 
information through jointly issued planning guidance and the WIOA State 
Plan ICR. Except for the addition of a reference to WIOA sec. 
102(b)(2)(D)(iv) and other minor technical edits, this provision 
remains substantively the same as that proposed in the NPRM. WIOA sec. 
102(b)(2)(D)(iv) refers to Wagner-Peyser Act program-specific 
requirements.
Proposed Additional Wagner-Peyser Act Program-Specific Requirements for 
State Plans
    Comments: A commenter agreed with the proposed requirements 
specific to Wagner-Peyser Act Employment Services programs. One 
commenter stated that homeless persons should be a prioritized group 
for employment services, including those with no income or work 
history, and those with a criminal background. Also, this commenter 
recommended that serving higher barrier persons be incentivized.
    Departments' Response: The Departments agree with the importance of 
ensuring that States address the needs of very low income and homeless 
populations in the State Plan. As discussed under Sec.  676.105, the 
WIOA State Plan ICR, consistent with WIOA, requires that Unified and 
Combined State Plans address the needs of individuals with barriers to 
employment. As defined in sec. 3(24)(G) of WIOA, an ``individual with a 
barrier

[[Page 55809]]

to employment'' includes homeless individuals or homeless children and 
youths. However, employment services under the Wagner-Peyser Act are 
universal and available to all; the Departments do not have the 
authority to prioritize use of Wagner-Peyser Act funds for specific 
populations.
    Comments: Several commenters said the regulation should require 
State workforce agencies to include a clearly defined management 
reporting structure for State merit-based employees as part of the 
State Plan for each one-stop center to minimize confusion and protect 
the systemic integrity of Wagner-Peyser Act services.
    Departments' Response: While the Departments recognize the 
importance of adhering to merit staffing requirements for Wagner-Peyser 
Act services, the Departments decline to require a reporting structure 
for merit staff in the regulation or in the WIOA State Plan ICR because 
it imposes an unnecessary burden on States. However, a State may elect 
to develop such a policy and include it in its State Plan.
Section 676.125 What are the program-specific requirements in the 
Unified State Plan for the State Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by Workforce Innovation and Opportunity Act title IV?
    Section 676.125 requires States to submit a VR services portion as 
part of the Unified State Plan that complies with all State Plan 
requirements set forth in sec. 101(a) of the Rehabilitation Act of 
1973, as amended by title IV of WIOA. All submission requirements of 
the VR Services portion of the Unified State Plan are in addition to 
the jointly developed strategic and operational content requirements 
prescribed by sec. 102(b) of WIOA. Except for minor technical edits, 
this provision remains substantively the same as that proposed in the 
NPRM.
Individuals With Disabilities in the VR Program
    Comments: A commenter agreed with the requirements specific to the 
VR program.
    Some commenters stated that there should be greater emphasis on the 
VR program in the State Plans. The commenters encouraged Governor-
mandated appointment of disability service providers on State WDBs to 
ensure proper representation for the development of this section of the 
plan. Similarly, other commenters urged the Departments to encourage 
greater inclusion of stakeholders within the disability community in 
the development, review, and implementation of the plans. One commenter 
further encouraged the Departments to issue guidance that will ensure 
that State executives will not ignore or under-represent the workforce 
development needs of people with disabilities in the strategic and 
operational planning outline in either the Unified or Combined State 
Plan.
    Departments' Response: In response to the first concern, the 
Departments refer commenters to the WIOA State Plan ICR where the VR 
program is addressed at length in Section VI Program-Specific 
Requirements for Core State Plan Programs. This section overviews the 
descriptions and estimates that must be included in the VR Services 
Portion of a State Plan, as required by sec. 101(a) of the 
Rehabilitation act of 1973, as amended by WIOA, and sec. 
102(b)(2)(D)(iii) of WIOA. State WDB membership requirements are 
addressed in 20 CFR 679.110 (see DOL WIOA Final Rule published 
elsewhere in this issue of the Federal Register). The Departments also 
note that beyond these requirements, the constitution of State WDBs and 
their membership has been left to the States. Although State Plans must 
include a State WDB Membership Roster and a list of Board activities as 
described in sec. III(b)(3)(B) of the WIOA State Plan ICR, the 
Departments have concluded that it is unnecessary to include additional 
regulatory text. With regard to greater stakeholder involvement in the 
review and implementation of State Plans, Sec. Sec.  676.130(d) and 
676.143(c), already require that States provide an opportunity for 
comment on and input into the development of a State Plan from 
representatives of Local WDBs and CEOs, businesses, labor 
organizations, institutions of higher education, other stakeholders 
with an interest in the services provided by the six core programs, and 
the general public, including individuals with disabilities. Thus, 
stakeholders with disabilities are required to have opportunity to 
engage in the development of State Plans. Finally, sec. 102(b) of WIOA 
and the WIOA State Plan ICR require the State to address the needs of 
individuals with barriers to employment within the State Plan's 
Strategic Vision and Goals and Operational Planning Elements. According 
to WIOA sec. 3(24), the term ``individual with a barrier to 
employment'' includes individuals with disabilities, including youth 
who are individuals with disabilities.
Interagency Cooperation
    Comments: A commenter said the Departments should make explicit the 
importance of including State developmental disabilities agencies in 
cooperative agreements regarding individuals eligible for home and 
community-based waiver programs. Another commenter stated that, in 
addition to the cooperative agreement between VR and the State 
developmental disabilities agency, State Plans should be required to 
contain a cooperative agreement between Medicaid and the State mental 
health agency in order to promote effective collaboration between State 
agencies.
    Departments' Response: While not stated in the regulation itself, 
the WIOA State Plan ICR describes how a State will incorporate 
interagency cooperation between VR and other State agencies providing 
assistance to or serving individuals with disabilities. In the WIOA 
State Plan ICR, consistent with sec. 101(a)(11) of the Rehabilitation 
Act, as amended by title IV of WIOA, the VR agency must describe the 
collaboration between the responsible State agency administering the 
State Medicaid plan, the State agency serving individuals with 
developmental disabilities, and the State agency responsible for 
providing mental health services. Nothing in this requirement restricts 
collaboration between agencies, as the goal is to develop opportunities 
for competitive integrated employment to the greatest extent possible. 
A more detailed discussion of the collaboration between the VR agency 
and other agencies serving individuals with disabilities is provided in 
ED's Final Rule related to the VR program published elsewhere in this 
issue of the Federal Register.
VR Program's Order of Selection
    Comments: One commenter referenced a proposal to give State VR 
agencies operating under an Order of Selection the option to indicate 
that they will serve eligible individuals with disabilities outside the 
Order of Selection who have an immediate need for equipment or services 
to maintain employment. The commenter requested clarification in 
determining what services or equipment is allowed to be provided if 
identified as an immediate need if the individual is in jeopardy of 
losing his or her job.
    Departments' Response: Section 101(a)(5)(D) of the Rehabilitation 
Act of 1973, as amended, indicates that State Plans shall, under an 
Order of Selection, permit the State, in its discretion, to elect to 
serve eligible individuals who

[[Page 55810]]

require specific services or equipment to maintain employment. The WIOA 
State Plan ICR allows for the VR program to identify whether it will 
serve eligible individuals with disabilities outside the Order of 
Selection who has an immediate need for equipment or services to 
maintain employment. Services or equipment provided to eligible 
individuals under these circumstances must be determined on an 
individual basis according to the employee's need required to maintain 
employment, consistent with the Individualized Plan for Employment. A 
much more detailed discussion of this issue is provided in ED's Final 
Rule covering the VR program published elsewhere in this issue of the 
Federal Register.
Records and Data Collection
    Comments: A commenter said the Departments should identify ways to 
allow State VR agencies to gain ready access to Federal employment 
data, such as the data that are available through the Federal 
Employment Data Exchange System funded by DOL.
    Departments' Response: The Departments addressed this issue through 
the WIOA State Plan ICR process. Section III(b)(6)(A) of the WIOA State 
Plan ICR states that State agencies responsible for the administration 
of core programs (such as the VR program) shall describe plans to align 
and integrate available workforce and educational data systems for the 
core programs, unemployment insurance (UI) programs, and education 
through postsecondary education. This directive provides sufficient 
identification of the opportunities available to States to incorporate 
both State and Federal data into their State programs. For this reason, 
no changes to the regulatory text were made in response to this 
comment.
Independent Living for Older Individuals Who Are Blind Program
    Comments: A couple of commenters opposed eliminating a requirement 
in the State Plan for the Independent Living for Older Individuals who 
are Blind program, stating that this elimination constitutes a great 
disservice to older persons with vision loss. The commenters 
recommended that an Independent Living for Older Individuals who are 
Blind section be added to the VR section of the Unified or Combined 
State Plans.
    Departments' Response: The Independent Living for Older Individuals 
who are Blind program is covered under title VII of the Rehabilitation 
Act of 1973, as amended by WIOA, and is not among the six core programs 
that must submit a Unified State Plan pursuant to sec. 102 of WIOA. The 
VR services portion of the Unified or Combined State Plan is similar in 
content to the standalone VR State Plans that were submitted prior to 
the passage of WIOA and covers only the VR program requirements of 
title I of the Rehabilitation Act, as amended by WIOA. The Independent 
Living for Older Individuals who are Blind program requires submission 
of an application with assurances every 3 years that complies with the 
requirements for that program as set forth in title VII of the 
Rehabilitation Act, as amended by WIOA. A detailed discussion of the 
Independent Living Services for Older Individuals Who are Blind program 
(34 CFR part 367) is provided in ED's Final Rule of WIOA Miscellaneous 
Programs published elsewhere in this issue of the Federal Register.
Section 676.130 What is the development, submission, and approval 
process of the Unified State Plan?
    In order to facilitate the State strategic planning process, and 
concurrent review by the relevant Federal program offices, this section 
requires the Unified State Plan to be submitted to the Secretary of 
Labor, according to the procedures established in sec. 102(c) of WIOA, 
which are clarified and explained through joint planning guidelines. 
Likewise, the Departments, upon receipt of a Unified State Plan, follow 
procedures established by this section. Section 676.130 also explains 
requirements for transparency, public comment, and submission, as well 
as the terms for approval of plans by the Secretaries of Labor and 
Education.
    Section 676.130(a) requires that the Unified State Plan be 
submitted in accordance with the procedures set out in the joint 
planning guidelines, issued by the Secretaries of Labor and Education, 
which explains the submission and approval process described in sec. 
102(c) of WIOA.
    Sections 676.130(b)(1) and (2) reiterate the requirement at sec. 
102(c)(1) of WIOA regarding the deadlines for submitting the initial 
and subsequent Unified State Plans to the Departments. The Departments 
developed a process for submission of Unified State Plans to ensure 
that ED receives the entire Unified State Plan submission concurrently. 
WIOA secs. 102(c)(1)(A) and 103(b)(1) require States to submit the 
initial Unified or Combined State Plan no later than 120 days prior to 
the commencement of the second full program year after the date of 
enactment (i.e., July 1, 2016), making the statutory submission date 
for the initial Unified or Combined State Plan March 3, 2016. However, 
pursuant to the orderly transition authority in sec. 503 of WIOA, the 
Departments considered the initial Unified or Combined State Plans 
timely if submitted by April 1, 2016.
    Section 102(c)(1)(B) of WIOA requires subsequent Unified State 
Plans to be submitted not later than 120 days prior to the end of the 
4-year period covered by the preceding Unified State Plan. In other 
words, WIOA Unified State Plans cover 4-year periods, and the 
subsequent plan must be submitted no later than 120 days before 
existing plan's 4-year period ends. The Departments have made 
clarifying edits to the regulatory text in Sec.  676.130(b)(2) to more 
clearly align it with these statutory requirements. The Departments 
anticipate that the second Unified State Plans will need to be 
submitted in the spring of 2020. The official submission dates for the 
plans will be announced in the joint planning guidelines.
    Section 676.130(b)(3) clarifies that, consistent with current 
practice for many of the core programs, a program year runs from July 1 
through June 30 of any year. This clarification is particularly 
important, in this context, for the VR program since that program 
operates on a Federal fiscal year basis and will continue to do so, in 
accordance with title I of the Rehabilitation Act of 1973, despite the 
fact that the VR services portion of the Unified State Plan will align, 
for submission and performance purposes, with the other partners on a 
program year basis.
    In order to more accurately reflect the content of Sec.  676.130, 
the Departments have made a change to the title to include the word 
``development.'' Additionally, in response to comments, described 
below, requesting clarity regarding the role of the State WDB, core 
program administrators and required one-stop partners, the Departments 
have added Sec.  676.130(c). This additional paragraph explains the 
statutory requirement that the Unified State Plan must be developed 
with the assistance of the State WDB and must be developed in 
coordination with administrators with optimum policy-making authority 
for the core programs and required one-stop partners. The term 
``optimum policy-making authority'' is defined in 20 CFR 679.120 as 
``an individual who can reasonably be expected to speak affirmatively 
on behalf of the entity he or she represents and to commit that entity 
to a chosen course of action.'' See DOL WIOA Final

[[Page 55811]]

Rule published elsewhere in this issue of the Federal Register. 
Accordingly, Sec.  676.130(c) through (h) have been renumbered at Sec.  
676.130(d) through (i). Other than these changes to paragraph (b)(2), 
the addition of paragraph (c), and the edit to paragraph (h) discussed 
below, no changes to the regulatory text have been made.
Deadlines
    Comments: The Departments received a comment that supported the 
timeline for developing initial Unified State Plans. Several commenters 
requested clarification about the definition of program year, specified 
in Sec.  676.130(b)(3), as it applies to VR, noting that the VR program 
operates on a Federal fiscal year. A couple commenters said the 
specified program year may put additional administrative burden and 
costs, especially in the startup, on State VR agencies. A commenter 
said the VR agencies should continue to report as they currently do. 
Due to the difference in fiscal year versus program year, one commenter 
recommended that the VR program be transferred to DOL to ensure 
seamless coordination of workforce activity at the Federal and State 
level and to ensure that the States operate unified, integrated 
programs. However, other commenters said it is unclear whether the 
change in program will be a burden for State VR agencies. In fact, one 
commenter anticipated a benefit for aligning State match, fiscal 
planning, and managing funds. One of these commenters said that ED 
should survey State VR agencies to see if this will prove to be a 
burden or an issue for administration of the State Plan.
    A commenter remarked that performance data and plans will be on the 
program year basis and that Federal awards and reporting will remain on 
the fiscal year basis. The commenter sought clarification as to how 
reporting and performance timeframes will be integrated.
    Departments' Response: The Departments acknowledge the concerns 
expressed by commenters. The VR program will utilize a program year, 
according to the Sec.  676.130(b)(3) definition, for the purposes of 
reporting performance and identifying its goals and priorities as part 
of the VR portion of the Unified or Combined State Plan. Since data 
will be collected quarterly, RSA will have the flexibility to report 
performance data for each of the VR agencies for both the program year 
and the fiscal year. The Departments have not concluded that this will 
cause any additional burden to the VR agencies for the development of 
the VR portion of the State Plan, in particular, to establish and 
evaluate the State's performance measures. Further guidance about 
performance reporting for VR agencies will be provided in the final ICR 
for the RSA-911 report. Fiscally, the VR agencies will continue to 
operate on a Federal fiscal year basis as required statutorily pursuant 
to secs. 110 and 111 of the Rehabilitation Act of 1973, as amended. The 
WIOA State Plan ICR Appendix 1 clarifies what performance information 
States must include in the State Plan. The Departments provided further 
instructions through the WIOA Joint Performance ICR, the WIOA State 
Plan ICR, and related joint guidance. Finally, WIOA does not authorize 
the VR program to move to DOL.
Stakeholder Involvement
    Comments: Numerous commenters expressed concern about having 
adequate voice and input into the State Plan development process, and a 
number of commenters requested stronger or clearer regulation on who 
must be involved in the State Plan development process. Commenters said 
the Departments should require a role in the planning process for core 
programs, one-stop partners, State and Local WDBs, and CEOs, among 
other entities.
    Departments' Response: Although WIOA requires an inclusive planning 
process, and there are many references to inclusiveness in planning and 
program implementation throughout the Joint WIOA Final Rule, the 
Departments considered these comments and agree. The Joint WIOA Final 
Rule will continue to emphasize inclusiveness in planning and program 
implementation and will further benefit from a more explicit statement 
of the entities required to participate in the development of Unified 
State Plans. In response to the comments, the Departments have added 
regulatory text in a new paragraph (c) to Sec.  676.130 to clarify that 
Unified State Plans must be developed with the assistance of the State 
WDB and in coordination with administrators with optimum policy-making 
authority for the core programs and required one-stop partners. In 
addition, to ensure consistency, the Departments have added regulatory 
text in a new paragraph (d)(3)(v) of Sec.  676.105, discussed above, 
requiring that the Unified Plans include a ``description of joint 
planning and coordination across core programs, required one-stop 
partner programs and other programs and activities included in the 
Unified Plan.'' The Departments also have revised the title of Sec.  
676.130 to include the word ``development'' to clarify that this 
section describes the development of the Unified State Plan, as well as 
submission and approval. These changes are reflected in the WIOA State 
Plan ICR.
Collaboration and Input Into the Plan Process
    Comments: A couple of commenters recommended that States should 
include title II adult education partners, as well as other immigrant-
serving organizations, in their WIOA planning. A few commenters 
suggested that refugee programs and service providers be included in 
planning at the State and Local level and that the Departments should 
emphasize in the regulation's discussion of local governance the 
importance of providing expertise in serving linguistically and 
culturally diverse populations. Some commenters noted several 
organizations should have input into the development of State Plans, 
including: quality credentialing organizations, immigrant-serving 
organizations, State and local human service agencies, community and 
technical colleges, nonprofit community-based and nontraditional 
service providers, and State Departments of Education.
    Departments' Response: The Departments considered these comments 
and note that collaboration in the planning process for Unified and 
Combined Plans is required of title II adult education program partners 
as they are among the core programs included in all plans. The WIOA 
State Plan ICR enables States to include human services, faith- and 
community-based organizations, and educational institutions in the 
State Plan, as well as other Federal programs, particularly as part of 
a discussion of innovative partnerships with the one-stop delivery 
system. These types of organizations may include immigrant-serving 
organizations and refugee programs. No change to the regulatory text 
was made in response to these comments.
Public Comment and Availability of Information
    Comments: One commenter said the rule should reaffirm that, as one 
of its responsibilities, the State WDB must provide an environment for 
State Plan development that is conducive to participation and receptive 
to input. Further, this commenter stated that States should be required 
to describe how they will make this process accessible to individuals 
with disabilities.
    Departments' Response: The State must provide an opportunity for 
comment and input into the State Plan. Furthermore, the Departments 
agree that

[[Page 55812]]

the public comment process must be accessible to all concerned 
organizations and individuals, including individuals with disabilities. 
As described in Sec.  676.130(d)(1), the State must provide an 
opportunity for public comment on and input into the development of the 
Unified State Plan prior to its submission which includes an 
opportunity for comment by representatives of Local WDBs and CEOs, 
businesses, representatives of labor organizations, community-based 
organizations, adult education providers, institutions of higher 
education, other stakeholders with an interest in the services provided 
by the six core programs, and the general public, including individuals 
with disabilities. Further, as discussed earlier, the WIOA State Plan 
ICR, consistent with WIOA, requires the State to address the needs of 
individuals with barriers to employment including the needs of English 
language learners.
    Comments: Several commenters stated that the consultation 
requirement should accommodate Single States that have only a volunteer 
State WDB and no Local WDB to consult.
    Departments' Response: Although single-area States have no Local 
WDB to consult, they still have stakeholders, including CEOs. In 
accordance with Sec.  676.130(d)(1), single-area States must provide an 
opportunity for comment by CEOs and other stakeholders as a part of the 
opportunity for public comment on State Plans, which includes local 
officials and local stakeholders.
    Comments: A couple commenters recommended a minimum notice period 
of 90 days for the opportunity for public comment on the development of 
the Unified State Plan. A commenter urged the Departments to require 
that States publicly post the plan electronically and that the 
Departments themselves create an electronic database where States, 
policy makers, advocates, and the general public can access all of the 
plans.
    Departments' Response: The Departments have reviewed these comments 
and decline to set a number of days for public comment of Unified State 
Plans, leaving the decision of schedules for public comment and posting 
plans electronically to the discretion of the States. Many States' laws 
require a minimum number of days for public comment, and many States 
use online posting as a way of making the plans available for public 
comment. While the Departments are not adding a regulation regarding an 
electronic database, the Departments provide a centralized online 
access point for completed State Plans.
Review and Approval of Unified State Plans
    Comments: A commenter stated that WIOA indicates that approval of 
the Unified State Plan will occur within 90 days after submission, but 
the NPRM stated that it will occur within 90 days of receipt. The 
commenter recommended a revision to the language making the terminology 
for establishing the timeframe for review and approval of plans be 
consistent and that a definition be provided for determining that start 
date.
    Departments' Response: The Departments decline to change the 
regulatory text and retain the use of the word ``receipt'' in the 
renumbered Sec.  676.130(h) in order to allow the Departments to have a 
full 90 days to review the plan in the event of any delay in 
transmission of the plan from the State to the Departments. However, 
the Departments have replaced the words ``by the appropriate 
Secretary'' in paragraph (h) with ``the Secretary of Labor,'' to 
clarify that the 90-day review period begins upon receipt of the plan 
by the Secretary of Labor. This wording is more closely aligned with 
the statute, at WIOA sec. 102(c)(1). As stated in paragraph (e) of this 
section, immediately upon receipt of a Unified State Plan from a State, 
the Secretary of Labor will ensure that the entire Unified State Plan 
is submitted to the Secretary of Education pursuant to a process 
developed by the Secretaries. At that point, the Secretaries will begin 
their review.
    Comments: Several commenters said States whose Unified State Plans 
are rejected should be given detailed reasons why in writing so those 
States can focus on areas that need improvement.
    Departments' Response: As a part of the approval process, the 
Departments intend to provide States with detailed reasons in writing 
if a plan is not approvable.
    Comments: A few commenters asserted that there was lack of clarity 
in the NPRM regarding whether the Unified Plan submission process will 
change. These commenters recommended that DOL issue a TEGL on the 
submission process of the Unified Plan. Similarly, a commenter said 
more guidance is needed to understand how this process will work and 
differ from previous Unified Plan submissions.
    Departments' Response: The Departments considered these comments 
and agree that additional guidance will assist States in understanding 
the submission and approval process for Unified State Plans. The 
Departments issued joint guidance, which describes the submission 
process in greater detail. This joint guidance included TEGL No. 14-15, 
``Workforce Innovation and Opportunity Act (WIOA) Requirements for 
Unified and Combined State Plans,'' issued to DOL grantees, a Program 
Memorandum issued to AEFLA grantees, and a Policy Directive issued to 
VR program grantees, all of which contained identical content.
Rehabilitation Services Administration Approval of Plan
    The renumbered Sec.  676.130(g) states that before the Secretary of 
Labor and the Secretary of Education approve the Unified State Plan, 
the VR portion of the Unified State Plan must be approved by the 
Commissioner of the Rehabilitation Services Administration (RSA).
    Comments: Several commenters requested clarification on whether the 
90-day approval timeframe for the entire plan starts when the VR 
portion of the Unified State Plan is approved by the RSA Commissioner 
or when it is subsequently forwarded to the ED and DOL Secretaries for 
approval. A commenter suggested that the regulation require a timeline 
for the Commissioner of RSA to approve or disapprove the VR portion of 
the Unified State Plan.
    Departments' Response: The 90-day review timeframe, which begins 
upon receipt of the State Plan by DOL, includes RSA Commissioner review 
and approval. The VR program is an ED program, and ED's and DOL's 
reviews of plan submissions are concurrent. However, the approval of 
the VR services portion of the plan by the RSA Commissioner must occur 
first, after which the plan, if it complies with all of the other 
requirements, will be officially approved by the Secretaries of Labor 
and Education. The Secretaries of Labor and Education have developed a 
process to ensure that both Departments receive the entire Unified 
State Plan submission concurrently to ensure timely review. The 
Departments have concluded that the existing regulatory text and 
preamble place adequate emphasis on the timely concurrent reviews of 
the plans by the Departments and no changes to the regulatory text were 
made in response to these comments.
    Comments: Some commenters asked whether it is the responsibility of 
the State VR agencies or the Secretaries of Labor and Education to 
obtain approval from the RSA Commissioner. One of these commenters 
stated that placing the responsibility on VR agencies to ensure that 
this review is done

[[Page 55813]]

(especially before submission of the plan to the Secretaries by the 
States) would be an unfair burden to place on VR agencies and States. 
This commenter further asked when the deadline is for the submittal of 
the VR portion of the State Plan to the RSA Commissioner, if it is the 
responsibility of State VR agencies to submit and obtain approval of 
the VR portion of the plan by the RSA Commissioner prior to submission 
to the Secretary of Labor.
    Departments' Response: It is not the State VR agencies' 
responsibility to submit and obtain approval of the VR portion of the 
State Plan prior to submitting the Unified Plan to the Departments. 
Rather, the entire Unified State Plan, including the VR services 
portion of that Plan, should be submitted to the Departments, and the 
review and approval by the RSA commissioner will take place following 
that submission as a part of the 90-day Federal review of the plan. The 
ED, including RSA, and DOL will work together to ensure the timely 
review and approval of all portions of the State Plans, including the 
VR services portion. The Departments have developed a process for 
submission of Unified State Plans to ensure that the Departments of 
Labor and Education, including the RSA Commissioner, receive the entire 
Unified State Plan submission concurrently. The Departments have 
concluded that the existing regulatory text and preamble place adequate 
emphasis on the timely concurrent reviews of the plans by the 
Departments.
    Comments: Some commenters requested clarification on what happens 
to the full Unified State Plan if the RSA Commissioner does not approve 
the VR portion of the State Plan.
    Departments' Response: Approval of the Unified State Plan requires 
that the requirements of all core programs are met, including the 
requirements for the VR portion of the State Plan. No change to the 
regulatory text was made in response to these comments.
Guidance on Submission and Approval Process
    Comments: Several commenters provided suggestions for potential 
joint guidance from the Departments and how the guidance should 
influence the submission and approval process for Unified State Plans. 
Some commenters recommended that the Departments issue guidance that 
provides recommendations for how States can develop appropriate 
outreach and engagement strategies for stakeholders. One commenter said 
the Departments should issue guidance that addresses whether the VR 
agency should hold separate public meetings on their portion of the 
State Plan or schedule a unified public meeting for the entire State 
Plan. One commenter welcomed guidance from the Departments that advises 
State and local areas on whether to submit workforce plans that cover 
additional workforce related programs besides the six core programs.
    Numerous commenters requested that any guidance from the 
Departments that provides further details on the submission of the 
State Plans be released as early as possible. A few commenters said 
States may be waiting for guidance from the agencies before beginning 
their planning processes in earnest, which may cause some States to 
bypass key opportunities for stakeholder engagement or forgo pursuing a 
Combined State Plan in an effort to meet the statutory deadlines for 
plan submission.
    A commenter said it would be useful if the Departments provided a 
template for the Unified and Combined State Plans, ideally several 
months before the plan is due. The commenter also said ensuring that 
the templates are available at least several months ahead of the 
submission deadline would make the process of completing the plan much 
more efficient for States.
    Departments' Response: The Departments issued joint planning 
guidelines that address these and other topics regarding State Plan 
development, submission, and approval and the requirements of the WIOA 
State Plan ICR. For example TEGL No. 14-15, ``Workforce Innovation and 
Opportunity Act (WIOA) Requirements for Unified and Combined State 
Plans,'' was issued on March 4, 2016. The ED issued identical guidance 
to its grantees via Program Memorandum OCTAE 16-1 (https://www2.ed.gov/about/offices/list/ovae/wioa-16-1.pdf) and RSA-PD-16-03 (https://www2.ed.gov/policy/speced/guid/rsa/pd/2016/pd-16-03.pdf) on March 9, 
2016. VR agencies must still meet the requirements for public 
participation prior to the submission or amendment of a State Plan in 
accordance with 34 CFR 361.20. Although not commonly referred to as a 
template, the WIOA State Plan ICR is a detailed and comprehensive set 
of requirements for developing and submitting State Plans. In addition 
to the written joint guidance, the Departments also have presented 
multiple webinars on the development and submission of the State Plans. 
No change to the regulatory text was made in response to these 
comments.
Section 676.135 What are the requirements for modification of the 
Unified State Plan?
    Given the multi-year life of the Unified State Plan, States must 
revisit regularly State Plan strategies and recalibrate these 
strategies to respond to the changing economic conditions and workforce 
needs of the State. At a minimum, a State is required to submit 
modifications to its Unified State Plan at the end of the first 2-year 
period of any 4-year plan and also under other specific circumstances, 
examples of which have been included in this section. States may choose 
to submit a State Plan modification at any time during the life of the 
plan. Section 676.135 further describes the requirements for submission 
and approval of Unified State Plan modifications, which are subject to 
the same public review and comment requirements and approval process as 
the full Unified State Plan submissions.
    Except for minor technical edits, such as corrections to cross-
references to other sections that have been renumbered and edits to 
conform with changes to part 677 on the performance accountability 
system, this section remains substantively the same as that proposed in 
the NPRM.
Timeframe for Unified Plan Modifications
    Comments: One commenter supported the 2-year timeline for modifying 
initial Unified State Plans specified in Sec.  676.135(a). Another 
commenter said Federal agencies should use the State Unified Plan 
timeframe for submitting mandatory modifications to review the 
regulatory framework and other guidance under which WIOA is initially 
implemented. The Departments, this commenter continued, should use this 
time to review how the challenges and opportunities involved in WIOA's 
implementation have evolved.
    Departments' Response: The Departments considered this comment and 
agree. The Departments intend to update existing and future 
regulations, ICRs, and guidance as appropriate and as needed for the 
continued effective implementation of WIOA.
Unified State Plan Modification Requirements
    Comments: Regarding proposed Sec.  676.135(b), several commenters 
stated that modifications to State Plans only should be necessary in 
the event of significant or substantial changes in labor market and 
economic conditions or other factors significantly affecting 
implementation of the plan.

[[Page 55814]]

    Departments' Response: The Departments recognize the balance 
between the benefit of periodic modifications of State Plans and the 
potential burden of submitting State Plan modifications beyond those 
required at the end of the first 2-year period. The Departments agree 
that periodic review of State Plans aids in the continual update and 
improvement of State policies and that State Plan modifications other 
than those required at the end of the first 2-year period should be 
required only in the event of substantial changes impacting the plan. 
Paragraph (b) of Sec.  676.135, which is consistent with WIOA, requires 
States to submit modifications at the end of the first 2-year period, 
and these modifications must reflect changes in labor market and 
economic conditions. Other than this 2-year modification, States are 
required to submit modifications only when changes in Federal or State 
law or policy substantially affect the strategies, goals, and 
priorities upon which the Unified State Plan is based, or when there 
are changes in the statewide vision, strategies, policies, State 
negotiated levels of performance (see Sec.  677.170(b) of this Joint 
WIOA Final Rule), the methodology used to determine local allocation of 
funds, reorganizations which change the working relationship with 
system employees, changes in organizational responsibilities, changes 
to the membership structure of the State WDB or alternative entity, and 
similar substantial changes to the State's workforce investment system.
Public Comment on Unified State Plan Modifications
    Comments: Several commenters stated that the VR regulations in 34 
CFR part 361 already address when public comments are needed in the 
State Plan modification process. Specifically, any change to the VR 
portion of the State Plan that directly affects the provision of 
services, such as Order of Selection or the imposition of a financial 
needs test, would require public review and input before such a change 
is made. These commenters recommended that the Joint WIOA Final Rule 
here reflect the same high threshold for public comments on State Plan 
modifications for the other five core programs.
    Departments' Response: Paragraph (c) of Sec.  676.135 contains the 
same public review and comment requirements for all modifications to 
Unified State Plans as those for the development of initial Unified 
State Plans specified in Sec.  676.130(d). In addition, States must 
adhere to any program-specific requirements for the core programs 
included in the State Plan, such as sec.101(a) of the Rehabilitation 
Act of 1973, as amended, and its implementing regulations under 34 CFR 
361.10 and 361.20. The Departments do not require that the entire plan 
be subject to the program-specific public comment requirements of the 
VR rules in 34 CFR part 361. However, the Departments plan to issue 
further guidance regarding State Plan modifications.
    Comments: Some commenters said States should have the flexibility 
to define what constitutes a major change, as plan modifications 
necessitated by minor changes are burdensome and expend valuable 
resources. One commenter stated that there was no definition of 
``substantial change'' provided in the NPRM and suggested that the 
threshold for ``substantive change'' in proposed 34 CFR 361.20(a)(2) be 
used in the Joint WIOA Final Rule. Another commenter said ``substantial 
change'' should be defined as a change that involves a substantive 
change to service delivery or participating partners or substantial 
fiscal impact.
    Departments' Response: The Departments agree that State Plan 
modifications other than those required after the first 2-year period 
for State Plans should be limited in order to avoid undue burden. 
However, the Departments also want to ensure State Plans are up to date 
and that States periodically review State Plans. Sections 676.135(b)(2) 
and (3) describe the circumstances where a Unified State Plan 
modification is required (other than at the first 2-year period). 
States are required to modify State Plans when changes in Federal or 
State law or policy substantially affect the strategies, goals, and 
priorities upon which the Unified State Plan is based; or when there 
are changes in the statewide vision, strategies, policies, State 
negotiated levels of performance, the methodology used to determine 
local allocation of funds, reorganizations which change the working 
relationship with system employees, changes in organizational 
responsibilities, changes to the membership structure of the State WDB 
or alternative entity, and similar substantial changes to the State's 
workforce development system. The Departments have not defined the term 
``substantial change'' in this regulation and have instead outlined in 
the regulation the specific situations where modifications of Unified 
State Plans are required.
Section 676.140 What are the general requirements for submitting a 
Combined State Plan?
    States have the option to submit a Combined State Plan that goes 
beyond the core programs of a Unified State Plan to include at least 
one additional Federal workforce, educational, or social service 
program from the programs identified in sec. 103(a)(2) of WIOA. 
Generally, the requirements for a Combined State Plan include the 
requirements for the Unified State Plan as well as the program-specific 
requirements for any Combined State Plan partner programs that are 
included in the Combined State Plan. To expand the benefits of cross-
program strategic planning, increase alignment among State programs, 
and improve service integration, the Departments strongly encourage 
States to submit Combined State Plans.
    Section 676.140 specifies the general requirements for submitting a 
Combined State Plan. Paragraph (a) of Sec.  676.140 states that a State 
may choose to develop and submit a 4-year Combined State Plan in lieu 
of the Unified State Plan. The Departments have edited Sec.  
676.140(a), as well as Sec.  676.140(e)(1), to correctly cite 
references to Unified State Plan requirements that must be included in 
a Combined State Plan. Paragraph (e) of Sec.  676.140 specifies the 
information that a Combined Plan must contain. Paragraph (e)(2) of 
Sec.  676.140 has been edited to include the words ``and activities,'' 
to clarify that the Combined Plan must provide the required information 
for any programs and activities included in the State Plan. Section 
676.140(e)(3), consistent with WIOA, has been revised to expand the 
required description of joint planning and coordination to include core 
programs, required one-stop partner programs and other programs and 
activities included in the State Plan. Section 676.140(i) is a new 
paragraph that requires States that submit employment and training 
activities carried out by HUD under a Combined State Plan to submit any 
other required planning documents for HUD programs directly to HUD, 
according to the requirements of Federal law and regulations. Except 
for the changes described here, this section remains unchanged from 
that proposed in the NPRM.
    Comments: One commenter said planning and implementation must be a 
thoughtful process, and system transformation cannot be rushed. This 
same commenter also said there should be increased interagency 
collaboration between the Departments. Specifically,

[[Page 55815]]

the commenter stated that there should be more incentives for programs 
within the two Departments to be included in a Combined State Plan.
    Departments' Response: The Departments considered these comments 
but did not make changes to the regulatory text based on them. The 
Departments agree that planning and implementation must be thoughtful 
processes and that system transformation is an ongoing process. WIOA 
does not authorize incentives for States submitting a Combined State 
Plan. However, the Departments encourage States to be as inclusive as 
possible in their State Plans because joint planning across programs, 
including between those in the two Departments, fosters greater 
alignment and coordination of services.
Planning Cycles
    Section 676.140(a) allows States to choose to develop and submit a 
4-year Combined State Plan in lieu of the Unified State Plan. In the 
NPRM, the Departments note that the Combined Plan's 4-year plan 
development and implementation cycle, with a 2-year modification 
deadline, is inconsistent with the planning cycles governing many 
Combined State Plan partner programs. The Departments sought comment on 
how to reconcile differing planning cycles across Combined State Plan 
partner programs that do not align with the 4-year planning required by 
WIOA. In response, commenters provided various recommendations.
    Comments: A few commenters said an approved Combined State Plan 
should suffice to meet the planning requirements of Combined State Plan 
partner programs and that Federal agencies should address the issues of 
differing planning cycles at the Federal level through executive 
actions. Another commenter said the Departments should require Combined 
State Plan partner programs to describe their planning cycles for the 
upcoming 4 years, and to include when during the next 4 years they may 
need to submit modifications to their part of the Combined State Plan. 
Similarly, two commenters suggested that the Combined State Plan report 
on the progress of the mid-cycle plan submitted by the Combined State 
Plan partner program(s) and include language on how the Combined State 
Plan partner program's submitted plan includes integration with WIOA 
programs.
    Departments' Response: WIOA does not authorize the Departments to 
change the planning requirements, including submission deadlines that 
are under other authorizing legislation. However, WIOA gives the States 
the ability to apply the 2-year WIOA modification provisions to the 
Combined State Plan partner programs included in the plan in addition 
to any modification timeline or interval required by the statute 
governing the Combined State Plan partner program as long as they do 
not overwrite those programs' required timelines. The Departments have 
concluded that for any Combined State Plan partner program included in 
the plan with a different planning cycle from WIOA, States should 
submit program-specific modifications that align with the natural 
planning cycles for that specific program, unless the 2-year WIOA 
modification cycle can accommodate that program's planning and 
modification cycle. For example, if a State chooses to include CTE 
programs under the Carl D. Perkins Career and Technical Education Act 
of 2006 (Perkins Act), as a part of its Combined State Plan, the State 
would submit plan modifications annually to align with Perkins' annual 
State Plan cycle. As another example, the TANF authorizing statute 
requires a State to have submitted a plan within 27 months of the end 
of the first fiscal quarter in order to receive TANF funds for that 
fiscal year. Accordingly, adopting the more frequent 2-year WIOA cycle 
for modifications should accommodate TANF's cycle, allowing a State to 
make all changes to each portion of the Combined State Plan 
concurrently. The State must submit such modifications to the relevant 
Secretary for that program, as well as to the Departments of Labor and 
Education. Special instructions apply to UI State Quality Service Plan 
and to JVSG as described below. The Departments have developed a 
process for submission of Combined State Plans that ensures that all 
relevant Secretaries receive the plan concurrently and, as part of this 
system, the Departments anticipate that State Plan modifications will 
be housed in an accessible format with that State's original State 
Plan. The State may choose to describe the planning cycles of the 
Combined State Plan partner programs that are included in the State 
Plan, and the State also may describe intentions to submit future 
modifications to comply with those planning cycles; however, in order 
to minimize burden, the Departments have chosen not to require these 
descriptions through regulation or through the WIOA State Plan ICR.
    States that include, in their Combined State Plan, UI programs (UI 
Federal-State programs administered under State unemployment 
compensation laws in accordance with applicable Federal law) carried 
out under title III, sec. 302, of the Social Security Act including 
secs. 303(a)(8) and (9) which govern the expenditure of funds, should 
submit their UI State Quality Service Plan following the cycle, 
according to UI State Quality Service Plan Planning and Reporting 
Guidelines.
    The JVSG programs, carried out under chapter 41 of title 38 of the 
U.S. Code, require both a JVSG State Plan and a separate annual 
application for funding. States that include the JVSG programs in their 
Combined State Plan must submit the JVSG State Plan information in 
their Combined State Plan, and submit their funding applications 
annually as required by current Veterans' Employment and Training 
Service guidance.
    Comments: One commenter said the bifurcated nature of the WIOA 
State Plans could be adapted to allow non-WIOA programs to participate 
in the strategic portion of the planning process, even if they cannot 
fully align their budgets and operational plans with a 2- or 4-year 
operational plan. A commenter suggested that the Departments issue 
guidance on how States can incorporate existing and aligned planned 
activity with WIOA funded programs, as well as other related programs. 
The commenter concluded that several agencies that administer the 
Combined State Plan partner programs permitted have plans that align 
with partners outside of the six core programs, and States and local 
areas need a method of aligning existing effective plans. A commenter 
recommended adding Social Security Administration's Ticket to Work as a 
workforce program in the Combined State Plan. A commenter urged DOL to 
work closely with the Department of Justice to outline additional 
recommendations and considerations within guidance for working 
specifically with the Second Chance Act partners and State Departments 
of Corrections.
    Departments' Response: The Departments received similar comments, 
in response to Sec.  676.130, regarding the inclusion of program 
partners beyond the core programs and required one-stop partners in the 
development of the Unified Plan. As already discussed in the context of 
Unified Plans in the preamble section that discusses Sec.  676.130, the 
WIOA State Plan ICR, consistent with secs. 102 and 103 of WIOA, allows 
States to include programs beyond the core programs, required one-stop 
partners, and Combined State Plan partner programs in a Combined State 
Plan. This is particularly true in the context of a discussion of 
innovative partnerships with the one-stop delivery

[[Page 55816]]

system. These partners and programs could include human services, 
faith- and community-based organizations, educational institutions, and 
Federal programs not listed among the Combined Plan programs. These 
programs may be incorporated into the strategic portion of the planning 
process. As mentioned in the introduction, the Departments issued joint 
guidance to facilitate the inclusion of innovative partnerships and to 
foster alignment across partner programs outside of WIOA's core 
programs. States also are encouraged to utilize technical assistance, 
as the specific dynamics across program partners within States will 
vary. Because sec. 103 of WIOA provides an exclusive list of Combined 
State Plan partner programs, the Departments do not have the authority 
to expand the statutory list of Combined State Plan partner programs 
for inclusion in Combined State Plans.
    Comments: One commenter said the Departments should keep the 
approval of the core programs separate from the approval of Combined 
State Plan partner programs, such that the implementation of what would 
otherwise be an approved Unified State Plan is not impacted or held up 
by decisions on Combined State Plan partner program cycles.
    Departments' Response: The Departments agree with this comment and 
have added text to Sec.  676.143(h) to clarify that approval or 
disapproval of Combined State Plan portions covering Combined State 
Plan partner programs does not impact approval of the common sections 
of the plan which cover the core programs. This change will be 
discussed in more detail in the preamble related to that section. The 
portions of the Combined State Plan related to the core programs are 
subject to the same approval requirements applicable to the Unified 
State Plan (WIOA sec. 102(c)). The Secretaries of Labor and Education's 
written determination of approval or disapproval of the portion of the 
plan for the six core programs may be separate from the written 
determination of approval, disapproval, or completeness of the program-
specific requirements of Combined State Plan partner programs and 
activities described in Sec.  676.140(d) and included the Combined 
State Plan. For example, if all the common planning elements and 
program-specific requirements for the core programs are met, approval 
and funding may proceed regardless of specific issues that may be 
identified in the program-specific sections for any Combined State Plan 
partner programs.
Temporary Assistance for Needy Families
    Section 676.140(d)(2) specifies that TANF, authorized under part A 
of title IV of the Social Security Act, is a Combined State Plan 
partner program that may be included in the Combined State Plan.
    Comments: One commenter said it appears that as a Combined State 
Plan partner program in a Combined State Plan TANF would be subject 
both to its own current statutory participation rate requirements and 
to the six performance measures specified in WIOA. The commenter stated 
that the performance accountability sections in both WIOA and the NPRM 
consistently refer to the six performance measures in relation to the 
core programs only and it is the core programs' funding alone that is 
tied to performance on these measures. The commenter requested that an 
exception be made such that when a State includes TANF as part of its 
Combined State Plan, TANF training and employment activities not be 
subject to WIOA required performance measures. The commenter requested 
that TANF training and employment activities only be subject to the 
performance measures under TANF, the same way that performance measures 
for CSBG employment and training activities are only those under CSBG.
    Departments' Response: The Departments have reviewed this comment 
but did not make a change to the regulatory text. WIOA sec. 103 does 
not require the Combined State Plan partner programs to report on the 
WIOA sec. 116 primary indicators of performance. WIOA sec. 103(b)(1) 
only requires the Combined State Plan partner programs, which include 
TANF, to include the requirements, if any, applicable to that program 
or activity under the Federal law authorizing the program or activity. 
This means those portions of the plans related to training and 
employment. An explicit exemption for TANF is not required in these 
regulations. In referring to CSBG and to HUD employment and training 
activities, WIOA sec. 103(a)(2) does not refer to a specific program 
within those agencies but to employment and training activities in 
general. In contrast, WIOA sec. 103(a)(2) refers to TANF as a whole and 
does not limit this to the employment and training activities under 
TANF.
    Comments: A commenter asked whether a separate TANF State Plan 
would be required even if the State opts to submit a Combined State 
Plan. If a separate TANF State Plan is required, the commenter asked 
what the advantage would be for a TANF entity in combining their State 
Plan with the WIOA Unified Plan. A commenter said the Departments 
should explicitly state that the Governor's option to determine that 
TANF will not be a required one-stop partner in a State is a separate 
and distinct decision from the option of including TANF in a Combined 
State Plan.
    Departments' Response: If the State opts to submit a Combined State 
Plan under this rule that includes a TANF State Plan, the State would 
not be required to submit a separate TANF State Plan to HHS. Instead, 
HHS will receive the Combined State Plan under this rule. If a State 
submits a Combined State Plan that is approved, the State is not 
required to submit any other plan in order to receive the funds to 
operate the programs covered by that Plan. The Combined State Plan 
takes the place of the individual State Plans for the Combined State 
Plan partner programs that are covered by the plan and replaces the 
Unified State Plan. In this way, the Combined State Plan is meant to 
promote integrated planning across State programs in addition to the 
integration among the core programs that would occur under a Unified 
State Plan. While no additional plan is required, Sec.  676.140(f) 
stipulates that each Combined State Plan partner program included in 
the Combined State Plan remains subject to the applicable program-
specific requirements of the Federal law and regulations, and any other 
applicable legal or program requirements, governing the implementation 
and operation of that program. Finally, a Governor's option to 
determine that TANF will not be a required one-stop partner in a State 
is a separate and distinct decision from the option of including TANF 
in a Combined State Plan.
Perkins/Career and Technical Education Programs
    Comments: Several commenters did not support the use of a Combined 
State Plan because, according to these commenters, the current Federal 
funding is essential for local CTE programs; the current Unified Plan 
model is working well by allowing local control of Perkins funds; the 
workforce board should not dictate course offerings or the curriculum 
provided; and the reporting/performance requirements for both WIOA and 
Perkins would conflict.
    Another commenter stated that schools should have the ability to 
develop programs that align with each other and the resources to 
support

[[Page 55817]]

program development. The commenter said Office of Superintendent of 
Public Instruction should be given the control to direct funds to 
support CTE program development and oversee the implementation of the 
Programs of Study.
    Departments' Response: The Departments considered these comments. 
States have the option of including postsecondary programs, including 
programs of study described in sec. 122 (c) under the Perkins Act, as a 
part of their Combined State Plan. However, even if Perkins 
postsecondary programs are included as a part of a State's Combined 
State Plan, there will be no impact on the amount of Perkins 
postsecondary funds that are distributed at the local level, unless the 
State formally amends its Perkins Act State Plan to change its 
secondary and postsecondary split of funds pursuant to sec. 112(a)(1) 
of the Perkins Act. In the case where there is a change in the split, 
the formula established in sec. 132 of the Perkins Act, or the 
alternative formula established in sec. 133 of the Perkins Act, still 
applies.
    In addition, under WIOA, Local WDBs cannot dictate course offerings 
or curricula. Local recipients retain the ability to develop programs 
and align resources to meet students' needs. Finally, as discussed 
above, WIOA sec. 103 does not require the Combined Plan partner 
programs to report on the WIOA sec. 116 primary indicators of 
performance. WIOA sec. 103(b)(1) only requires the Combined State Plan 
partner programs to include the requirements, if any, applicable to 
that program or activity under the Federal law authorizing the program 
or activity.
    Comments: One commenter stated that the regulation should account 
for WIOA's statutory requirement that Combined State Plan partner 
programs remain subject to their original authorizing statutes. This is 
particularly important, according to the commenter, in instances where 
the Perkins eligible agency does not fall under the direct line of 
authority or control of the Governor. It is imperative to assure the 
Perkins eligible agency that it has full authority to carry out the 
responsibilities under sec. 121 of the Perkins Act when part of a WIOA 
Combined State Plan. The Perkins eligible agency is ultimately subject 
to the Federal government fiscal and accountability reporting 
requirements under Perkins regardless of whether the Perkins State Plan 
is separate or part of a WIOA Combined Plan.
    Departments' Response: Reference to the original authorizing 
statutes and their requirements are made throughout the Joint Rule with 
respect to Combined State Plan partner programs included in Combined 
State Plans. There is no intention of removing or minimizing the 
authority of the Perkins eligible agency to carry out its Perkins' 
responsibilities under WIOA.
    Comments: A commenter made the following remarks about the 
submission of a Perkins State Plan as part of the Combined State Plan:
     The NPRMs do not address a reconciliation of the two 
separate and distinct submission requirements (2-year versus annual).
     If a State submits the annual Perkins Plan separate from 
the Combined State Plan, the rules are not clear if the Perkins Plan 
must be approved by the State WDB.
     The rules require two agencies to negotiate the level of 
performance on the core indicators of WIOA but do not indicate if the 
two agencies must negotiate the level of performance on the Perkins 
indicators.
     The Perkins State levels of performance are dependent on 
local negotiations and levels of performance but the NPRMs do not 
indicate how the integrity, validity, and reliability of the local 
Perkins negotiations can be retained.
    Departments' Response: As discussed previously, WIOA gives the 
States the ability to apply the 2-year WIOA modification provisions to 
the Combined State Plan partner programs included in the plan in 
addition to any modification timeline or interval required by the 
statute governing the Combined State Plan partner program as long as 
they do not overwrite those programs' required timelines. The 
Departments have concluded that for any Combined State Plan partner 
program included in the plan with a different planning cycle from WIOA, 
States should submit program-specific modifications that align with the 
natural planning cycles for that specific program. Section 676.140(f) 
stipulates that each Combined Plan partner program included in the 
Combined State Plan remains subject to the applicable program-specific 
requirements of the Federal law and regulations, and any other 
applicable legal or program requirements, governing the implementation 
and operation of that program.
    If a State chooses to include Perkins as part of its Combined State 
Plan, the State will submit Perkins State Plan modifications annually, 
consistent with the Perkins annual State Plan cycle. If the Perkins 
State Plan modifications affect only the administration of Perkins and 
have no impact on the Combined State Plan as a whole or the integration 
and administration of the core and Combined State Plan partner 
programs, then such modifications may be submitted only to the 
Secretary of Education consistent with Sec.  676.145(c)(2). 
Modifications to a Perkins State plan that impact the Combined State 
Plan as a whole or the integration and administration of the core and 
Combined State Plan partner programs are subject to the same public 
review and comment requirements that apply to the development of the 
original Combined State Plan. Under the Perkins-specific procedures, 
hearings may or may not be required depending on the specific facts 
presented.
    In response to the commenters who raised concerns regarding 
performance negotiations, the Departments are clarifying that sec. 103 
of WIOA does not require Combined State Plan partner programs to report 
on the primary indicators of performance in sec. 116 of WIOA. Section 
103(b)(1) of WIOA only requires the Combined State Plan partner 
programs, which include Perkins, to include the requirements, if any, 
applicable to that program or activity under the Federal law 
authorizing the program or activity. Perkins program inclusion in a 
State's Combined State Plan will not impact the annual Perkins 
performance indicator negotiation process. See sec. 676.143(i). The 
WIOA State Plan ICR Appendix 1 clarifies what performance information 
States must include in the State Plan. The Departments provided further 
instructions through the WIOA Joint Performance ICR, the WIOA State 
Plan ICR, and related joint guidance. The Departments issued 
operational guidance on both performance and State Plan submission 
guidelines following the finalized Performance and WIOA State Plan 
ICRs.
Inclusion of Combined State Plan Programs Not Under Governor's 
Authority
    Section 676.140(e)(4) requires States to provide assurance that all 
of the entities responsible for planning or administering an eligible 
program described in a Combined State Plan have a ``meaningful 
opportunity to review and comment'' on all portions of the plan.
    Comments: Several commenters recommended strengthening the language 
in the regulation to ensure that States give assurances that all of the 
entities responsible for planning or administering a program described 
in a Combined State Plan have approved the inclusion of the programs in 
a Combined Plan, especially where such

[[Page 55818]]

programs do not fall under the direct control of a Governor. According 
to these commenters, as the language currently stands, it could be 
interpreted as leaving this decision of whether to include a Combined 
State Plan partner program in the Combined State Plan up to the sole 
discretion of the Governor.
    One commenter stated that, based on sec. 121 of the Perkins Act, 
the Perkins eligible agency should have the authority to determine 
whether CTE programs authorized under the Perkins Act are included in a 
State's Combined Plan. Section 121 of the Perkins Act states, in 
relevant part, that each ``eligible agency . . . shall prepare and 
submit to the Secretary a State plan . . .'' As mentioned above, the 
Perkins eligible agency maintains authority to carry out the 
responsibilities under sec. 121 of the Perkins Act under a Combined 
State Plan.
    A few commenters said the Joint WIOA Final Rule should state the 
intent that the TANF program should have a meaningful influence in all 
stages of plan development and be a voting member of the State WDB.
    Departments' Response: The Departments have concluded that no 
change to the regulatory text at Sec.  676.140(e)(4) is necessary in 
response to these comments. The Departments have modified Sec.  
676.140(e)(3) to require States to describe joint planning methods in 
the Combined State Plan among the core programs, and with the required 
one-stop partner programs and other programs and activities included in 
the State Plan. The Departments acknowledge that not all programs 
identified in WIOA for potential inclusion in the Combined State Plan 
fall under the purview of the Governor. For some, the Federal funds go 
directly to local entities, such as several HUD programs administered 
by Public Housing Authorities. Others, such as the Reintegration of Ex-
Offenders, are competitive grants that may be awarded to community-
based organizations. Perkins funds flow directly to a State eligible 
agency by formula. In some States the Perkins State eligible agency is 
an independent agency not under the authority of the Governor. The 
Departments expect the Governor to work in collaboration with any 
Combined State Plan partner programs included in the plan and with the 
agencies that administer those programs consistent with these 
regulations and sec. 103(b)(3) of WIOA. The Departments expect that the 
State's joint planning methods across these programs ensure that the 
State has full cooperation from any such programs and agencies included 
in the Combined State Plan. Finally, in response to the comment that 
the TANF program should be a voting member of the State WDB, State WDB 
membership requirements are addressed in 20 CFR 679.110 (see DOL WIOA 
Final Rule).
Other Comments
    Comments: Two commenters sought clarification on the primary 
indicators of performance relative to the inclusion of those partners 
beyond the core programs. If a State should choose the Combined State 
Plan option, one commenter asked whether all partners would be held to 
the standards of performance accountability identified in WIOA.
    Departments' Response: WIOA sec. 103 does not require the Combined 
Plan partner programs to report on the WIOA sec. 116 primary indicators 
of performance. WIOA sec. 103(b)(1) only requires the Combined State 
Plan partner programs to include the requirements, if any, applicable 
to that program or activity under the Federal law authorizing the 
program or activity. The WIOA State Plan ICR Appendix 1 clarifies what 
performance information States must include in the State Plan. The 
Departments provided further instructions through the WIOA Joint 
Performance ICR, the WIOA State Plan ICR, and related joint guidance.
    Comments: A commenter requested that the Departments ensure that 
partner programs will not have to submit additional or separate 
standalone plans.
    Departments' Response: Partner programs, except for those carrying 
out employment and training activities carried out under CSBG, HUD 
programs, and the Food and Nutrition Act of 2008, will not be required 
to submit additional or separate standalone plans. Paragraph (h) and 
new paragraph (i) of Sec.  676.140 explain the additional submission 
requirements for CSBG and HUD programs. Under paragraphs (h) and (i), 
the regulation explicitly limits the Combined Plan requirements for 
CSBG and HUD programs to ``employment and training activities.'' 
However, these activities are only a subset of a broad range of 
antipoverty activities provided under these two programs. In the case 
of CSBG programs, under Sec.  676.140(h), the State would submit the 
remainder of the State Plan for CSBG (e.g., those parts that apply to 
the other antipoverty activities provided by CSBG that are not 
``employment and training activities'') to the Federal agency that 
administers the program. New paragraph (i) clarifies that, like the 
requirements under paragraph (h) for CSBG programs, only the components 
of the individual plans for HUD programs that pertain to employment and 
training should be submitted with the Combined State Plan. The State 
must submit any other required planning documents for HUD to the 
Federal agency that administers the respective program. The language in 
this new paragraph creates a consistent approach for the Combined State 
Plan partner programs that WIOA sec. 103(a) identifies by activities 
rather than by a specific program name. This change also makes the 
regulatory text relating to HUD consistent with instructions in the 
WIOA State Plan ICR for submission requirements for Combined State 
Plans.
    For employment and training programs and work programs authorized 
under the Food and Nutrition Act of 2008, including those under secs. 
6(d)(4) and 6(o), the State would similarly submit to the Departments 
of Labor and Education only the Supplemental Nutrition Assistance 
Program Employment and Training programs (SNAP E&T). The Departments 
declined to regulate an exception for SNAP E&T because State Plans for 
SNAP E&T, as described under 7 CFR 273.7(c)(8), are generally not 
comingled with the State Plans for the remaining activities under SNAP.
    Comments: A commenter expressed concern that proposed Sec.  676.140 
does not require States to identify populations for Priorities of 
Service, though this is required at the local level. The commenter 
recommended that the regulation be revised to require that States 
identify populations for priority of service, and provide explanation 
of why those populations are named.
    Departments' Response: As discussed earlier under Sec.  676.105, in 
the title I-specific requirements, the WIOA State Plan ICR requires the 
State to address its policy for ensuring adult program funds provide a 
priority in the delivery of career and training services to individuals 
who are low income, public assistance recipients, or basic skills 
deficient. Otherwise, as with the Unified Plan Requirements, the 
Departments have chosen not to regulate the specifics of State Plan 
requirements, as these are explained in comprehensive detail in the 
WIOA State Plan ICR.
Section 676.143 What is the development, submission, and approval 
process for the Combined State Plan?
    Section 676.143 implements WIOA's statutory requirements for 
submitting a Combined State Plan. These are similar to the requirements 
for submitting a Unified State Plan at Sec.  676.130, with added 
considerations for review and approval by the Federal agencies that 
oversee the Combined State Plan partner

[[Page 55819]]

programs. The heading for Sec.  676.143 has been modified to include 
the word ``development,'' to more accurately reflect the content of 
this section. In response to comments, discussed earlier, regarding the 
role of State WDB, core programs, required one-stop partners, and other 
stakeholders in the development of the State Plan, the Departments have 
made several revisions to Sec.  676.143 to mirror the requirements for 
Unified Plans related to coordination, public comment and input. A new 
paragraph (b) has been added to include information similar to the 
newly added Sec.  676.130(c), clarifying that the Combined State Plan, 
just as the Unified State Plan, must be developed with the assistance 
of the State WDB and must be developed in coordination with 
administrators with optimum policy-making authority for the core 
programs and required one-stop partners. New Sec.  676.143(c)(1) and 
(2) have been added to include information similar to Sec.  
676.130(d)(1) and (2) requiring that the State must provide an 
opportunity for public comment and input on the development of the 
Combined State Plan prior to its submission, and that these 
requirements apply to the portions of the plan that cover the core 
programs. Finally, Sec.  676.143(c)(3) has been added to further 
clarify that the portions of the Combined State Plan that cover the 
Combined State Plan partner programs are subject to any applicable 
public comment requirements for those programs. Proposed Sec.  
676.143(b) has been renumbered to Sec.  676.143(d), and remaining 
sections have been renumbered accordingly. Renumbered Sec.  
676.143(e)(1) has been revised to clarify that, before the Secretaries 
of Labor and Education approve the Combined State Plan, the VR services 
portion of the Combined State Plan must be approved by the RSA 
Commissioner. In response to comments requesting clarity around 
Combined State Plan approval, new Sec.  676.143(h) states that the 
Secretaries of Labor and Education's written determination of approval 
or disapproval of the portion of the plan for the six core programs may 
be separate from the written determination of approval, disapproval, or 
completeness for program-specific requirements of Combined State Plan 
partner programs at Sec.  676.140(d). Except for the changes described 
here, this section remains unchanged from that proposed in the NPRM.
Submission of Combined State Plan
    Section 676.143(d) requires a State to submit to the Secretaries of 
Labor and Education and, if applicable, to the Secretary of the agency 
with responsibility for approving the program's plan or for deeming it 
complete under the law governing the program, as part of its Combined 
State Plan, any plan, application, form, or any other similar document 
that is required as a condition for the approval of Federal funding 
under the applicable program or activity.
    Comments: A couple of commenters stated that, to reduce the burden 
on States, the Secretaries of Labor and Education should be responsible 
for distributing the plans to other appropriate Federal entities. One 
of these commenters said the Secretaries of Labor and Education may 
want to consider taking all of the Combined State Plans and submitting 
them as a batch to the other appropriate Federal entities.
    Departments' Response: The submission process set forth in WIOA 
sec. 103(a)(1) for Combined State Plans requires that they be submitted 
to the ``appropriate Secretaries,'' which differs from the submission 
process for the Unified State Plan set forth in WIOA sec. 102(a). 
However, similar to what is required by Sec.  676.130(e) for the 
submission of Unified State Plans, the Departments developed a process 
for the single electronic submission of Combined State Plans that 
allows for concurrent review of, and immediate access to, the plans by 
all the relevant Federal entities. As discussed in the introduction, 
the Departments issued guidance that explains the submission process 
for Combined State Plans, which is intended to streamline State 
submission of plans. No change to the regulatory text was made in 
response to these comments, but the Departments have issued further 
guidance regarding State Plan submission.
Timelines for Review and Approval
    Section 676.143(e) stipulates the timelines for review and approval 
by the Secretary of Labor or Secretary of Education, or another 
appropriate Secretary.
    Comments: A couple of commenters requested clarification on the 
different timelines for the review and approval of the Combined State 
Plan (90 days for core programs and 120 days for Combined State Plan 
partner programs).
    Departments' Response: The Departments considered these comments 
and are implementing the regulation to reflect the statutory 
requirements. As required by WIOA sec. 103(c)(3), Combined State Plan 
partner programs that fall under an authority other than the Secretary 
of Labor or Secretary of Education have an approval timeline of 120 
days, rather than 90 days. This additional time allows for review and 
approval of Combined State Plan partner programs that are administered 
outside the Departments of Education and Labor, such as programs 
administered by U.S. Department of Agriculture, HHS, and HUD. These are 
statutory requirements not subject to regulatory change.
Rehabilitation Services Administration Approval of Combined State Plans
    Comments: Several commenters requested clarification on whether the 
VR portion of a Combined State Plan must be approved by the RSA 
Commissioner prior to the full Combined State Plan being approved by 
the Secretaries of Labor and Education, as the Unified State Plan 
process description explicitly states in Sec.  676.130(g).
    Departments' Response: The Departments considered these comments 
and agree that the rule needed to provide additional clarification 
regarding this requirement. Just as required for Unified State Plans, 
the RSA Commissioner must approve the VR services portion of the 
Combined State Plan prior to approval of the full Combined State Plan 
by the Secretaries of Labor and Education. The Departments have added 
regulatory text to clarify this requirement at Sec.  676.143(e)(1).
    Comments: One commenter said ensuring review by the RSA 
Commissioner should be the responsibility of the Secretaries, not VR 
agencies, and asked if this review would be part of the 90-day review 
timeframe.
    Departments' Response: The Departments worked together to ensure 
the timely review of all State Plans, including the VR services portion 
of each plan. As discussed under Sec.  676.130 for Unified Plans, it is 
not the State VR agencies' responsibilities to submit and obtain 
approval of the VR services portion of the State Plan prior to 
submitting the Combined State Plan to the Departments. Rather, the 
entire plan should be submitted to the Departments and review by the 
RSA commissioner will take place following that submission as a part of 
the 90-day Federal review of the plan. The Departments developed a 
process for submission of State Plans to ensure that all Departments, 
as appropriate, receive the entire submission concurrently. The 
Departments have concluded that the existing regulatory text and 
preamble place adequate emphasis on the timely concurrent reviews of 
the plans by the Departments.

[[Page 55820]]

Review, Approval, and Disapproval of Combined State Plans
    Section 676.143(f) provides specifics on the approval process for 
Combined State Plans.
    Comments: A few commenters stated that there appears to be little 
incentive for States to pursue a Combined State Plan. One commenter 
said States need assurances that the Departments will handle the 
Combined State Plan review in a manner different from how the 
Departments handled the Unified State Plan review under WIA, which was 
largely superficial in nature. The commenter recommended that the 
review process not only enforce statutory requirements but also 
consider the plan in a coordinated, cross-agency approach. The 
commenter said States need additional clarity on how the Federal 
agencies will manage the review process and make approval 
determinations, particularly when the statutes provide mixed or 
conflicting direction.
    Departments' Response: Although States only are required, at a 
minimum, to submit a Unified State Plan that encompasses the six core 
programs under WIOA, the Departments encourage States to submit a 
Combined State Plan that includes additional Combined State Plan 
partner programs as described at Sec.  676.140. Development of a 
Combined State Plan allows for coordination across multiple Federal 
programs, cross-program strategic planning, increased alignment among 
State programs, and improved service integration, which provides a 
wider range of coordinated and streamlined services to the customer. 
WIOA offers an expanded opportunity for States to create and implement 
a shared vision and strategy for the public workforce system within the 
State. The Departments have added language to Sec.  676.143 in 
paragraphs (e)(1) and (h) to further clarify the review process for 
Combined State Plans. Review of Combined State Plans will take into 
consideration the strategic coordination, program alignment, 
integration, and cross-agency joint planning that is reflected in the 
Combined Plan. The Departments worked together to create a robust 
review process across all partner agencies and consider this review 
process to be integral to effective joint planning and implementation. 
The Departments have added regulatory text at Sec.  676.143(h) to 
clarify that the Secretaries of Labor and Education's written 
determination of approval or disapproval of the portion of the plan for 
the six core programs may be separate from the written determination of 
approval, disapproval, or completeness of the program-specific 
requirements of Combined State Plan partner programs and activities 
included in the Combined State Plan.
    Comments: One commenter requested guidance (1) that allows States 
to develop a Combined State Plan without the threat of a loss of funds 
if elements of the individual programs are not specifically identified, 
and (2) on how accountability metrics and reporting requirements for 
those programs included in the plan will not be a disincentive for 
inclusion. A commenter said it is not clear what benefit exists for the 
State or local Perkins recipients to attempt to address indicators that 
are not pertinent to their purpose of operation as outlined in State 
regulation as well as the ``Federal Perkins regulation.'' The commenter 
said if the Combined State Plan partner programs are not required to 
report on the WIOA indicators of performance, the benefit of a Combined 
State Plan is not clear.
    Departments' Response: Regarding concerns about funding, the joint 
submission, or joint review process of the Combined State Plans will 
not impact funding because the Departments developed a process to 
ensure Combined State Plans are reviewed in a coordinated and timely 
manner across agencies. The Combined State Plan review process is 
further explained at Sec.  676.143. Combined State Plan partner 
programs are not subject to the six common indicators for performance 
under WIOA, although they may be subject to the same or similar 
indicators under their own authorizing statute or under State law. 
Regardless of whether required indicators are identical, States will 
find that public workforce development system customers can benefit 
from the results of developing a Combined State Plan that fosters 
program integration and alignment and optimal use of resources. The 
Departments' worked together to implement a robust review process 
across all partner agencies and consider this review process to be 
integral to effective joint planning and implementation. Performance 
issues have been addressed through the WIOA State Plan ICR, the WIOA 
Joint Performance ICR, and related joint guidance.
    Comments: One commenter said it is unclear how the rejection of one 
part of a Combined State Plan would affect funding for the other 
programs. A commenter stated that the regulation implies that 
disapproval by any Secretary of their respective program will result in 
disapproval of the Combined State Plan as a whole, which provides 
incentive to submit a Unified State Plan (instead of a Combined State 
Plan). Similarly, another commenter said disapproval of a section of 
the plan pertaining to a program not considered to be a core program 
should not result in the disapproval of the entire plan. Another 
commenter requested additional guidance on the process to follow if the 
RSA Commissioner does not approve the VR portion of the State Plan.
    Departments' Response: Per Sec.  676.143(h), disapproval of a 
section of a Combined State Plan pertaining to a Combined State Plan 
partner program does not impact the approval for the portions of the 
Combined State Plan that apply to the core programs. In the process 
mentioned above, the common planning elements and program-specific 
elements of Combined State Plans are reviewed concurrently across the 
Departments of Labor and Education and other relevant agencies, with 
the approval determination by RSA occurring first, and with additional 
time allowed for specific Combined State Plan sections that fall within 
the purview of U.S. Department of Agriculture, HUD, or HHS. A 
determination regarding approval or disapproval for the common elements 
and the core programs may be issued separately from the approval 
determination for program-specific requirements for Combined State Plan 
partner programs, including those that allow 120 days for review. The 
Departments have added a new Sec.  676.143(h) to clarify that the 
Secretaries of Labor and Education's written determination of approval 
or disapproval of the portion of the plan for the six core programs may 
be separate from the written determination of approval, disapproval, or 
completeness for program-specific requirements of Combined State Plan 
partner programs specified in Sec.  676.140(d) in the Combined State 
Plan. However, the portions of the Combined State Plans that cover the 
core programs must be approved by all core program agencies.
Special Rule for Perkins Act Programs
    Comments: Several commenters referred to Sec.  676.143(f) in the 
NPRM, which has been renumbered to Sec.  676.143(i) in the Joint WIOA 
Final Rule, the special regulation for programs authorized by the 
Perkins Act, which directs the State to come to an agreement with the 
Secretary of Education regarding State performance measures. One 
commenter requested further clarification as to what accountability 
measures would take

[[Page 55821]]

precedence under an agreement between the Secretary of Education and a 
State. The commenter stated that the Departments should specify that 
when a State chooses to include Perkins in a Combined State Plan, the 
State is required to include the totality of the Perkins State Plan in 
the Combined State Plan and cannot break off the parts relevant only to 
postsecondary CTE.
    Departments' Response: WIOA sec. 103 does not subject the Combined 
State Plan partner programs to the WIOA sec. 116 primary indicators of 
performance. WIOA sec. 103(b)(1) only requires the Combined State Plan 
partner programs, which include Perkins programs, to include the 
requirements, if any, applicable to that program or activity under the 
Federal law authorizing the program or activity. The WIOA State Plan 
ICR Appendix 1 further clarifies what performance information States 
must include in the State Plan. As discussed in Sec.  676.140 above, if 
a State chooses to include postsecondary CTE programs under the Perkins 
Act as a part of its Combined State Plan, the State would submit the 
entirety of the State Plan, including any annual revisions, pertaining 
to the CTE programs authorized under the Perkins Act. In addition, the 
State would submit plan modifications annually to align with Perkins' 
annual State Plan cycle, consistent with Sec.  676.145.
Section 676.145 What are the requirements for modifications of the 
Combined State Plan?
    Section 676.145 specifies requirements for modifying a Combined 
State Plan. Sections 676.145(a)(1) through (3) have been added to 
mirror the core program modification requirements specified for Unified 
State Plans in Sec.  676.135(b). Section 676.145(a)(1) through (3) 
outline three instances in which a modification for the core programs 
is required. These instances include: (1) At the conclusion of the 
first 2-year period of a 4-year State Plan, (2) when changes in Federal 
or State law substantially affect the plan's implementation, and (3) 
when there are substantial changes to the State's workforce investment 
system. The Departments revised Sec.  676.145(a)(3) to clarify that 
modifications to the Combined State Plans are required when States 
modify their negotiated levels of performance. This clarification was 
made for consistency with the changes to part 677 on the performance 
accountability system. The Departments have added a clarifying edit to 
Sec.  676.145(c)(1) to explain that States have discretion to apply the 
plan modification requirements for core programs to Combined State Plan 
partner programs so long as it is consistent with any other 
modification requirements for that program. The Departments have 
incorporated proposed Sec.  676.145(f) into Sec.  676.145(c)(2) to 
clarify these provisions to address commenters' confusion in this area, 
and deleted paragraph (f). The Departments also have made technical 
edits at Sec.  676.145(d). Except for the changes described here, this 
section remains substantively the same as that proposed in the NPRM.
Timeframe for Combined State Plan Modifications
    Comments: A couple of commenters said the Departments should 
consider emphasizing the opportunity for States to submit Combined Plan 
modifications following submission of the initial plan to ensure that 
Combined Plan partner programs continue to be engaged in the planning 
and implementation process. Some commenters said the Federal agencies 
responsible for the Combined Plan partner programs should accept the 
Combined State Plan on the timeline outlined in WIOA and not prescribe 
more frequent updates or different timeframes for modifications and 
renewals. In addition, the commenters said the submission deadlines 
must align. These commenters also said the Departments should issue 
final guidance early enough that there is sufficient time to negotiate 
the levels of performance for State performance accountability measures 
before submission deadline.
    Departments' Response: The Departments agree that modifications 
following submission of the initial plan are useful to ensure that 
Combined State Plan partner programs continue to be engaged in the 
planning and implementation process. Sections 676.135 and 676.145 
enable States to continue to modify and improve the planning process of 
both core and Combined State Plan partner programs through Unified and 
Combined State Plans. The Departments are not prescribing more frequent 
updates beyond what is required under WIOA timeframes. However, the 
Departments have revised Sec.  676.145(a) to clarify the circumstances 
under which a Combined State Plan must be modified for core programs, 
which are the same modification requirements that apply under Unified 
State Plans. The States have the discretion to apply these modification 
requirements to Combined State Plan partner programs or activities. The 
Departments have added regulatory text at Sec.  676.145(c)(1) to 
clarify that a State may apply these modification requirements to 
Combined State Plan partner programs, as long as this is consistent 
with any other modification requirements for those specific programs. 
As discussed under Sec.  676.140, the Departments do not have the 
authority to change the planning requirements, including submission 
deadlines, that are not under WIOA's jurisdiction. The Departments have 
provided additional clarity on the review and approval process through 
joint planning guidelines.
Combined State Plan Modification Requirements
    Unlike Sec.  676.135, which addresses modifications of Unified 
State Plans, proposed Sec.  676.145, which addressed modifications for 
Combined State Plans, did not require modification of a plan when there 
are ``substantial changes'' to a State's workforce investment system.
    Comments: The Departments received comments requesting that 
language similar to that in Sec.  676.135(b)(2) and (3), requiring 
States to submit modifications when there are ``substantial changes,'' 
be added to the section pertaining to Combined State Plan 
modifications.
    Departments' Response: The Departments considered these comments 
and agree. The Departments have revised proposed Sec.  676.145(a) by 
adding new paragraphs (a)(2) and (a)(3) that are essentially identical 
to Sec.  676.135(b)(2) and (3) to clarify that the same modification 
requirements that apply to the Unified Plan also apply to the portions 
of the Combined Plan covering the core programs. States are required to 
submit a modification for the portions of the Combined Plan covering 
the core programs when (1) changes in Federal or State law or policy 
substantially affect the strategies, goals, and priorities upon which 
the Combined State Plan is based, and (2) when there are changes in the 
statewide vision, strategies, policies, State negotiated levels of 
performance, the methodology used to determine local allocation of 
funds, reorganizations which change the working relationship with 
system employees, changes in organizational responsibilities, changes 
to the membership structure of the State WDB or alternative entity, and 
similar substantial changes to the State's workforce investment system. 
Under WIOA sec. 103(b)(1), it is at the discretion of the State to 
decide whether to apply these modification requirements to Combined 
State Plan partner programs or activities, as long as this is 
consistent with any other modification requirements for those specific 
programs. The Departments

[[Page 55822]]

have added language at Sec.  676.145(c)(1) to clarify this distinction.
Public Comment on Combined Plan Modifications
    In the NPRM, the Departments sought comments on how to streamline 
the public review and comment process for Combined State Plan 
modifications. The Departments further sought comments in the NPRM on 
whether it is advisable to limit the requirement for public comment on 
plan modifications to significant or substantial modifications to the 
common planning elements and, if so, how the Departments might define 
``significant'' or ``substantial changes.''
    Comments: One commenter indicated that historically, in-person 
meetings are poorly attended, so comments in relation to Sec.  676.145 
should be allowed via other methods, such as surveys, webinars, video 
conferences, and phone conferences. Another commenter said public 
review should not exceed 30 days.
    Some commenters said the Departments should limit the comment 
process under Sec.  676.145 to significant or substantial 
modifications, such as substantive change to service delivery or 
participating partners, adding or removing a Combined State Plan 
partner program, or discretionary changes within a program that would 
directly affect the provision of services and its collaboration with 
other programs (excluding programmatic changes required due to audit 
findings or sanctions). One commenter said the Departments should allow 
public comment on the shared planning elements to streamline this 
process significantly, particularly for States in which core program 
agencies have different governance and review processes.
    Departments' Response: In the Joint WIOA Final Rule, the 
Departments have not included requirements related to the timing, 
method, or other specifics related to public review and comment. The 
Departments leave much of the process related to public review and 
comment to the discretion of the State so long as regulatory 
requirements for public comment are met. If, based on the regulatory 
categories described in Sec.  676.145, a Combined State Plan 
modification is required, such a plan modification is subject to the 
requirements for comment as described in Sec.  676.145(d). As described 
in Sec.  676.145(d), modifications to the Combined State Plan are 
subject to the same public review and comment requirements that apply 
to the development of the original Combined State Plan as described in 
Sec.  676.143(c) except that, if the modification, amendment, or 
revision affects the administration of a particular Combined State Plan 
partner program and has no impact on the Combined State Plan as a whole 
or the integration and administration of the core and other Combined 
State Plan partner programs at the State level, a State may comply 
instead with the procedures and requirements applicable to the 
particular Combined State Plan partner program. The Departments have 
made a technical edit to Sec.  676.145(c)(2)(ii) for clarity by adding 
the word ``other'' before Combined State Plan partner programs in the 
phrase ``has no impact on the Combined State Plan as a whole or the 
integration and administration of the core and Combined State Plan 
partner programs at the State level.'' The Combined State Plan partner 
programs being referred to here are those other than the program that 
is the focus of the modification. States may determine, at their 
discretion, if these same plan modification requirements apply to 
Combined State Plan partner programs included in the Combined State 
Plan. States can further use their own discretion to provide a 
reasonable period of time for public comment. Many State laws also 
require a minimum number of days for public comment. Likewise, States 
may determine the best way to streamline the public comment process 
while ensuring that regulatory requirements for public comment are met.
    In addition to the regulatory text changes discussed above, various 
non-substantive changes have been made for purposes of correcting 
typographical errors and improving clarity that have not been necessary 
to note elsewhere.

B. Performance Accountability Under Title I of the Workforce Innovation 
and Opportunity Act (20 CFR Part 677; 34 CFR Part 361, Subpart E; 34 
CFR Part 463, Subpart I)

1. Introduction
    Section 116 of WIOA establishes performance accountability 
indicators and performance reporting requirements to assess the 
effectiveness of States and local areas in achieving positive outcomes 
for individuals served by the workforce development system's six core 
programs described in sec. 116(b)(3)(A)(ii) of WIOA. These six core 
programs are the adult, dislocated worker, and youth programs under 
title I of WIOA; AEFLA program under WIOA title II; Employment Service 
program authorized under the Wagner-Peyser Act, as amended by WIOA 
title III (Wagner-Peyser Act Employment Service program); and VR 
program authorized under title I of the Rehabilitation Act of 1973, as 
amended by WIOA title IV.
    The performance accountability system established in WIOA subtitle 
A (``System Alignment'') in sec. 116 requires that the performance 
accountability requirements apply across all six core programs with few 
exceptions. As such, the six core programs have an historic opportunity 
to align performance-related definitions, streamline performance 
indicators, integrate reporting, and ensure comparable data collection 
and reporting across all the core programs, while also implementing 
program-specific requirements.
    Through this Joint WIOA Final Rule, the Departments are laying the 
foundation for a performance accountability system that serves all core 
programs and their targeted populations in a manner that is customer-
focused and that supports an integrated service design and delivery 
model. In addition, WIOA requires additional DOL-administered title I 
programs, specifically Job Corps, Native American programs, the Migrant 
and Seasonal Farmworker programs, and the YouthBuild program, to comply 
with the same primary indicators as the core programs (see 20 CFR part 
686 and 20 CFR part 684 of the DOL WIOA Final Rule published elsewhere 
in this issue of the Federal Register). The inclusion of these 
additional DOL-administered programs into the common performance 
accountability system will better align both the core programs and 
other education and training programs across the public workforce 
system. Further, DOL is including other workforce programs under its 
purview in this performance-related streamlining effort, including the 
JVSG program as authorized by the Jobs for Veterans Act and other 
appropriate formula and competitive grant programs.
    In the section-by-section discussions of each performance 
accountability regulatory provision below, the heading references the 
DOL CFR section number. The ED is establishing in this Joint WIOA Final 
Rule identical provisions at 34 CFR part 361, subpart E (under its 
State VR program regulations) and at 34 CFR part 463, subpart I (under 
a new CFR part for AEFLA regulations). Although for purposes of 
brevity, the section-by-section discussions for each provision appear 
only once--in conjunction with the DOL section number--the discussions 
nevertheless constitute the Departments' collective explanation and 
rationale for each regulatory provision. When the

[[Page 55823]]

regulations are published in the CFR, these joint performance 
regulations will appear in each of the CFR parts identified above.
2. Definitions (20 CFR 677.150; 34 CFR 361.150; 34 CFR 463.150)
Section 677.150 What definitions apply to Workforce Innovation and 
Opportunity Act performance accountability provisions?
    Section 677.150 defines ``participant,'' ``reportable individual,'' 
``exit,'' and ``State,'' which are key performance-related terms 
applicable to all six core programs for implementation of the 
performance accountability system under sec. 116 of WIOA and part 677 
of these joint regulations. The definition of ``participant'' has been 
revised, as explained below, to distinguish clearly between 
participants and reportable individuals. The definitions of 
``reportable individual'' and ``exit'' have been revised as explained 
below. The Departments also have added a definition of ``State,'' which 
includes the outlying areas for purposes of part 677, other than in 
regard to sanctions or the statistical adjustment model. These 
definitions establish the foundation of an integrated performance 
accountability system and support clarity and alignment of performance 
metrics and comparability among the programs, States, and outlying 
areas.
Definition of ``Participant'' (Sec.  677.150(a))
    Comments: Numerous commenters responded to the Departments' 
solicitations for input on the joint NPRM regarding the proposed 
definitions of ``participant,'' ``reportable individual,'' and 
``exit.'' While several commenters supported the definition of 
``participant'' generally, many commenters raised multiple concerns 
regarding the distinction between self-service and staff-assisted 
service. A common concern was that the proposed definition of 
``participant'' excludes self-service only individuals, which conflicts 
with WIOA's goal of leveraging technology to improve service delivery. 
Some commenters expressed concerns about the term ``staff-assisted 
service,'' stating that the term should either be defined or removed 
because it is critical to understanding the precise distinction between 
a ``participant'' and a ``reportable individual.'' Several commenters 
asserted that the Departments should remove ``staff-assisted service'' 
from the definition of ``participant'' because it is not defined in 
WIOA or regulations and can be misleading when providing upfront 
assessment services to youth. Other commenters encouraged the 
Departments to define ``staff-assisted service'' in order to provide 
clarification. One commenter indicated that the regulatory definition 
of ``participant,'' for purposes of the title I youth program, should 
reflect policy positions articulated by the Departments in the Joint 
WIOA NPRM's preamble.
    Commenters also suggested additional terms and concepts that could 
be defined, including providing definitions for ``qualifying 
services,'' ``facilitated self-service,'' and ``career and training 
services.'' One commenter asserted that the Departments should issue 
timely guidance with additional definitions and clarifications or allow 
States to continue using definitions contained in WIA.
    Departments' Response: The Departments agree that it is critical 
that these definitions be clear in order to ensure compliant data 
collection and reporting. Section 677.150(a) provides a definition of 
``participant'' that applies to all six core programs because the 
primary performance indicators set forth in sec. 116(b)(2)(A)(i) of 
WIOA specifically base performance calculations on the participants in 
each of the core programs. The definition of ``participant'' 
establishes a common point at which an individual is meaningfully 
engaged in a core program and thus, it is appropriate for the person to 
be included in the primary indicators of performance. In the NPRM, the 
Departments attempted to distinguish ``staff-assisted services,'' which 
required more meaningful interaction with a core program, from ``self-
services'' and information-only services and activities, where 
individuals engaged in these activities that require minimal 
interaction with the programs, by which the Departments mean minimal 
resources are spent on their behalf in most cases. While individuals 
who receive only self-service or information-only services and 
activities do not satisfy the definition of ``participant,'' these 
individuals are considered ``reportable individuals'' as defined in 
Sec.  677.150(b) and discussed in more detail below.
    The Departments considered each of the suggested revisions to the 
proposed definition of ``participant'' and have modified Sec.  677.150 
to clarify the application of this definition to requirements under 
WIOA. The Departments made the following changes to the definition of 
``participant'' in Sec.  677.150(a).
    In Sec.  677.150(a), the Departments replaced the phrase ``staff-
assisted services'' with ``services other than those described in Sec.  
677.150(a)(3).'' In so doing, the Departments eliminate the confusion 
of what is meant by ``staff-assisted services'' and make clear that 
individuals who receive the services described in Sec.  677.150(a)(3) 
will not be deemed to be ``participants'' for purposes of the 
performance accountability system requirements under part 677, but 
rather will constitute a ``reportable individual'' under Sec.  
677.150(b).
    The Departments provided additional clarification in renumbered 
Sec.  677.150(a)(3) to describe what does and does not constitute self-
service and information-only services and activities. In so doing, the 
Departments have eliminated the confusion noted by commenters. 
Specifically, the revisions contained in Sec.  677.150(a)(3) clarify 
that the difference between reportable individual and participant is 
the point when a reportable individual uses services other than those 
identified in renumbered Sec.  677.150(a)(3). The Departments clarify 
what is meant by self-service and information-only services and 
activities, thereby avoiding use of the term ``staff-assisted 
services'' in this regulation, which raised concerns among commenters.
    Because the Departments appreciate the concerns raised by 
commenters and recognize the changing landscape and advances in service 
delivery and design, the Departments added Sec.  677.150(a)(3)(ii)(A) 
to describe self-service. The Departments recognize that not all 
electronic technologies are self-service and that individuals engaged 
in this type of service could potentially meet the definition of 
``participant.'' For example, there may be some services that provide 
robust levels of assistance in assessing a person's skills and matching 
that person to a job that are provided using electronic technologies 
that involve one-on-one interaction with a one-stop center staff 
member, such as an Internet chat room, or interactive technology, such 
as video conferencing, that would result in the individual becoming a 
participant. Additionally, the Departments acknowledge how fast 
technology evolves and new technology emerges that could be used by 
States and local areas to maximize available resources and better serve 
job seekers, workers, and employers. The Departments will continue to 
assess the field and emerging innovative technologies that may provide 
more cost-effective services and inform the workforce system of such 
developments, and their allowable uses, through program guidance.
    The Departments are continuing to examine staff-assisted virtual 
service

[[Page 55824]]

delivery in order to determine its potential. Paragraph (a)(3)(ii)(B) 
of Sec.  677.150 clarifies that virtual services providing support 
above an individual's independent job- or information-seeking efforts 
would not qualify as self-service, thus resulting in the individual 
becoming a ``participant.''.
    The Departments have concluded that the following revisions to 
Sec.  677.150(a)(3), described in more detail below, add the clarity 
requested by commenters:
    Self-service occurs when individuals independently access the 
workforce development system information and activities with very 
little to no staff assistance. This can be done in either a physical 
location, such as a one-stop center resource room or partner agency, or 
remotely via the use of electronic technologies, with very little to no 
staff assistance.
    Importantly, if a service is virtual service it is not 
automatically a self-service. As many commenters pointed out, there 
have been great strides made in the area of virtual service design and 
delivery allowing for staff to provide support and services through a 
variety of in-person and virtual platforms. For example, there may be 
some services that are provided using electronic technologies that 
involve one-on-one interaction with a one-stop center staff member or 
interactive technology, such as video conferencing, that would trigger 
participation. Furthermore, individuals who receive self-service or 
information-only services and activities can still be participants if 
they receive services other than self-service or information-only 
activities.
    Information-only services or activities are activities or services 
that provide readily available information that does not require an 
assessment by a staff member of the individual's skills, education, or 
career objectives. In a public workforce development setting, 
information activities or services may include both self-service basic 
career services and staff-assisted basic career services. Both are 
designed to inform and educate an individual about the labor market and 
to enable an individual to identify his or her employment strengths, 
weaknesses, and range of appropriate services. However, basic career 
services that require significant staff involvement are not considered 
information-only services or activities.
    Applying the above guidance to determining when a reportable 
individual satisfies the definition of a ``participant,'' an individual 
is a reportable individual, but not a participant, when a staff member 
provides the individual with readily available information that does 
not require an assessment of the individual's skills, education, or 
career objectives, because the individual is a recipient of 
information-only services or activities. Such information could include 
labor market trends, the unemployment rate, businesses that are hiring 
or reducing their workforce, information on high growth industries, 
occupations that are in demand, and referrals other than referrals to 
employment. Information-only services or activities also occur when a 
staff member provides the individual with information and instructions 
on how to access the variety of other services available in the one-
stop center, including tools in the resource room.
    Significant staff involvement that would result in an individual 
qualifying as a participant includes a staff member's assessment of an 
individual's skills, education, or career objectives in order to 
achieve any of the following:
     Assist individuals in deciding on appropriate next steps 
in the search for employment, training, and related services, including 
job referral;
     Assist individuals in assessing their personal barriers to 
employment; or
     Assist individuals in accessing other related services 
necessary to enhance their employability and individual employment 
related needs.
    The Departments also added a new Sec.  677.150(a)(2) to align the 
regulatory text definition of ``participant,'' for purposes of the 
title I youth program, with the intent expressed in the NPRM. New Sec.  
677.150(a)(2) clarifies the definition of a ``participant'' for 
purposes of the WIOA title I youth program.
    The Departments did not add a definition of ``staff-assisted 
service,'' as suggested by commenters, because the revisions to Sec.  
677.150(a) described above resulted in the removal of the term from the 
regulatory text. In addition, the Departments declined to add the 
recommended definitions of ``qualifying services'' or ``facilitated 
self-services,'' because the modifications made to the definition of 
``participant''--particularly at Sec.  677.150(a)(3) regarding 
clarifications of self-service and information-only services or 
activities--will address the needs of commenters. In addition, the 
Departments consider additional recommended definitions to fall within 
the scope of either the WIOA Joint Performance ICR (which identify 
performance calculations, definitions, and reporting parameters) or 
operating and programmatic guidance.
    The Departments did not add definitions of ``career services'' and 
``training services'' because WIOA sec. 134(c)(2) and (3) define 
``career services'' and ``training services,'' respectively, and these 
terms are further defined at Sec.  678.430 (``What are career 
services?'') in the Joint WIOA Final Rule and 20 CFR 680.200 (``What 
are training services for adult and dislocated workers?''), in the DOL 
WIOA Final Rule, both of which are published in this issue of the 
Federal Register. The WIOA Joint Performance ICR contains further 
specifications regarding the collection and reporting of career and 
training services under this section. The Departments intend to issue 
further clarifying programmatic guidance regarding these and other 
performance-related definitions in order to assist States and outlying 
areas in implementing them.
    Comments: A commenter acknowledged the problems associated with 
outcome evaluations of participants who do not go through an intake 
process but stated that the performance metrics should give credit for 
the investment of resources and staff required to maintain effective 
self-service systems. Another commenter asserted that self-service 
individuals should be included in the definition of ``participant'' to 
allow States to fully convey the impact and return on investment for 
this large customer group.
    Departments' Response: The Departments recognize commenters' 
concerns about the resources required to maintain effective self-
service systems. Although performance calculations on the primary 
indicators of performance are limited to individuals who meet the 
definition of participant and do not include individuals who only use 
the self-service system, other information that captures resources and 
costs associated with those individuals served by the public workforce 
system at the self-service or information-only levels is collected and 
reported in the State annual performance reports under Sec.  677.160, 
and additional elements are required through associated ICRs published 
by the Departments.
    The Departments expect that because information about reportable 
individuals, including those who access self-service and information-
only services or activities, will be included in the State annual 
performance reports and associated WIOA Joint Performance ICR or 
Department-specific ICRs, such investments by States and local areas 
will be recognized. The Departments note that the changes in the 
regulatory text maintain the policy expressed by

[[Page 55825]]

the Departments in the NPRM. Individuals who only use the self-service 
system or who receive information-only services or activities are not 
defined as ``participants.'' No change to the regulatory text was made 
in response to these comments.
    Comments: A commenter opposed the exclusion of self-service 
individuals in the definition of ``participant,'' asserting that it 
creates a bias against rural areas where one-stop centers are less 
accessible.
    Conversely, a number of other commenters stated that individuals 
receiving self-service and information-only services should not be 
considered participants for performance purposes, stating that 
participation should not begin until an individual receives a staff-
assisted service. A commenter agreed that self-service individuals 
should be excluded from the definition of ``participant,'' but 
suggested that a performance analysis be conducted to assess the impact 
of exclusion of self-service results on performance.
    Departments' Response: The Departments recognize commenters' 
concerns about the delivery of services in rural areas and recognize 
the importance of leveraging virtual services technology to improve the 
delivery of services in such areas. As discussed above, the Departments 
do not consider all services provided virtually to be ``self-service'' 
and reiterate that such activities, even when delivered virtually, can 
trigger participation and subsequent inclusion in performance 
calculations. The Departments developed the proposed definitions in 
order to maintain a level of rigor and accountability that is 
consistently applied across programs, while also providing a platform 
that is flexible enough to accommodate changes in service delivery 
design and advancements in technology. As stated above, no changes to 
the regulatory text regarding individuals who only use the self-service 
system were made in response to comments, as these individuals are not 
considered ``participants'' for purposes of the performance 
accountability system.
    With regard to the recommendation that a performance analysis be 
conducted to assess the impact of exclusion of self-service and 
information-only services or activities, the Departments analyzed a 
number of factors before proposing the definition of participant, 
including the relative impact of self-service exclusion and inclusion, 
and concluded that exclusion of such services had little to no impact 
on performance outcomes. Therefore, as stated above, the Departments 
decline to change the regulation's definition of participants based on 
these comments.
    With regard to the recommendation that participation begin only 
when an individual receives a staff-assisted service, the Departments 
have concluded that to define such a precise attachment point in 
regulation would prevent the performance accountability system from 
being able to adapt and account for all the services that the programs 
are providing. For example, an individual could receive staff-assisted 
services in the form of an assessment in the WIOA youth program, or in 
the form of fewer than 12 contact hours of AEFLA services, yet still 
appropriately be excluded from the definition of a participant.
    Comments: A few commenters suggested that self-service participants 
should be included in Wagner-Peyser Act employment indicators or 
measured separately.
    Departments' Response: The Departments considered collection and 
reporting burdens of doing so and did not revise the regulatory text to 
require additional collection and reporting on reportable individuals 
beyond the associated counts and information already required under the 
WIOA Joint Performance ICR. However, States should feel free to conduct 
additional analysis beyond what is required to be submitted to the 
Departments, such as an analysis on outcome of Wagner-Peyser Act self-
service individuals. No change to the regulatory text was made in 
response to these comments.
    Comments: Several commenters remarked that, under the NPRM, a youth 
receiving an assessment could be considered as receiving a staff-
assisted service and therefore be considered a ``participant.'' These 
commenters further stated that this proposed regulation would conflict 
with the discussion in the NPRM, which had proposed that a 
``participant'' for performance calculation purposes of the WIOA youth 
program, would be a ``reportable individual'' who was determined 
eligible, received an assessment, and received a program element. These 
commenters asserted that an assessment alone should not be considered a 
staff-assisted service, and that the regulation should be revised to 
conform to the language in the preamble of the NPRM. Another commenter 
expressed similar concerns, stating that an assessment alone for any 
individual in any program should not trigger participation.
    Departments' Response: The Departments agree with the numerous 
commenters who asserted the NPRM text regarding the definition of 
``participant,'' as applied to the WIOA title I youth programs, could 
potentially conflict with the stated intent in the preamble. The 
Departments, therefore, revised the regulatory text by adding a new 
Sec.  677.150(a)(2), which reflects the intent stated in the NPRM 
preamble. In so doing, the Departments have made clear that a WIOA 
program youth is not considered a ``participant,'' and subsequently 
included in performance calculations, until the youth has been 
determined eligible, received an objective assessment, developed an 
individual service strategy, and received 1 of the 14 youth program 
elements (as outlined in WIOA sec. 129(c)(2)). The Departments have 
concluded that this change is consistent with the general definition of 
a ``participant'' in Sec.  677.150(a), as well as the application of 
the definition to all core programs. This differs from the NPRM only by 
additionally requiring the youth participant to have satisfied the 
applicable program requirement for provision of services, including 
eligibility determination, objective assessment, and the development of 
an individual service strategy, as required under WIOA sec. 
129(c)(1)(B).
    Comments: A few commenters suggested that co-enrollees be counted 
as participants in all of the core programs from which they are 
receiving services. A few commenters discussed the benefits of co-
enrollment, particularly for youth populations, and supported the idea 
that eligible individuals may be co-enrolled in title I youth services 
and title II adult education programs. One commenter requested 
clarification regarding how to account for individuals enrolled in 
multiple core programs. Another commenter remarked that differences 
among programs and uncertainty about reporting co-enrollees create a 
disincentive for co-enrollment.
    Departments' Response: The Departments recognize the value of co-
enrollment across the core programs and greatly encourage efforts by 
the core programs in States to establish the data infrastructure and 
partnerships necessary to facilitate seamless enrollment in one or more 
core programs under WIOA. The Departments encourage co-enrollment 
between those programs that are required partners under WIOA, such as 
the Jobs for Veterans State Grant Programs, the Trade Adjustment 
Assistance (TAA) programs, and others as outlined in sec. 121(b)(1)(B) 
of WIOA.
    However, the Departments have concluded there is no need for 
revision to the regulations to address these comments since WIOA sec. 
116(d)(2)(I)

[[Page 55826]]

and Sec.  677.160(a)(1) require core programs to report the number of 
participants who are enrolled in more than one of the programs 
described in WIOA sec. 116(b)(3)(A)(ii), disaggregated by each 
subpopulation of such individuals. Therefore, individuals who are co-
enrolled in more than one core program and who meet the definition of 
participant under each respective program must be included in each 
respective program's performance calculations.
    These calculations, as proposed under the WIOA Joint Performance 
ICR, would be done independent of the participant's participation in 
another core program unless a State opted to implement such policies 
for co-enrollment that allows for a common participation or exit date 
based on entering any of the core programs. Under WIA title I, some 
States maintained similar policies. For example, under WIA title I, in 
those cases where an individual was initially enrolled in the Wagner-
Peyser Act program and subsequently received services under another 
DOL-administered program, the participation date for each program was 
the same and the receipt of a program's service was recorded as the 
date of receipt for first service as named. Such practices are allowed 
to continue under WIOA. Irrespective of the dates for participation and 
exit, each program would account for the participants in its program, 
and would be accountable for the outcomes of such participants in their 
reporting. For example, a title I youth participant who is co-enrolled 
in a title II AEFLA program and who also meets the definition of 
participant under title II, would be included in the State performance 
report for both title I youth and the AEFLA program under title II. No 
change to the regulatory text was made in response to these comments.
    Comments: Several commenters addressed the applicability of the 
``participant'' definition to the VR program. A few of these commenters 
noted that the proposed definition of ``participant'' would inflate the 
number of individuals exiting the VR program without achieving an 
employment outcome. Of these, one commenter stated it is not clear how 
the definitions of ``participant,'' ``exit,'' and the calculation of 
the performance indicators that rely on quarterly wage data are being 
operationalized in the proposed VR ICR for the RSA-911, particularly as 
it relates to calculating the denominator, and numerator. Specifically, 
this commenter said that it appeared that quarterly earnings and 
Federal Employer Identification Numbers (FEINs) only should be supplied 
for those participants who achieve competitive integrated employment. 
As a result, this commenter stated this would mean a significant number 
of VR participants would be included in the denominator but would be 
automatically excluded from the numerator for performance calculations 
if they did not achieve a competitive integrated employment outcome, 
even though they received significant VR services before exiting the VR 
program. This commenter was concerned that this approach would not 
provide a consistent and equitable comparison across all core programs 
since the definition of ``participant'' means an individual who 
received staff-assisted services. For example, this commenter asserted 
that WIOA title I and title III (Wagner-Peyser Act Employment Service) 
staff-assisted services may be quite limited compared to the intensive 
and sustained services provided to VR customers under an individualized 
plan for employment (IPE), the development of which requires 
substantial VR counselor investment and is in itself a service that may 
improve employment prospects. Therefore, this commenter recommended 
that the denominator be likewise limited to those participants who 
achieved competitive integrated employment or, in the alternative, 
require quarterly earnings and FEINs for all participants, not just 
those who achieved competitive integrated employment. This commenter 
recommended that RSA provide the specific formula for calculating 
performance indicators and provide a comment period. A few commenters 
stated that the proposed definition of ``participant'' would exclude a 
potentially large number of students with disabilities who receive pre-
employment transition services under the VR program. Another commenter 
urged the Departments to provide guidance regarding the application of 
the ``participant'' definition to the VR program.
    Departments' Response: The Departments agree that the definition of 
``participant,'' for purposes of the VR program, will include both 
those individuals who exit the VR program after achieving an employment 
outcome as well as those individuals who exit without achieving an 
employment outcome. While the Departments understand that this 
calculation is a departure from what was done by VR agencies under 
prior 34 CFR 361.84(c), Sec.  677.150(a)(1) of the Joint WIOA Final 
Rule is consistent with the use of the term ``participant'' throughout 
sec. 116 of WIOA and its application to the primary performance 
indicators set forth in sec. 116(b)(2)(A)(i) of WIOA. Moreover, the 
definition of ``participant,'' for purposes of the VR program, at Sec.  
677.150(a)(1) is consistent with the definition as applied to all core 
programs in Sec.  677.150(a). Specifically, the definition of 
``participant'' is broad enough to account for programmatic differences 
but narrow enough to capture the same type of individual with respect 
to each of the core programs. As the commenter noted, Wagner-Peyser Act 
services are often characterized as self-services and information-only 
activities. In accordance with Sec.  677.150(a)(3), individuals 
receiving those kinds of services would not meet the definition of 
``participant'' and, thus, there would be no comparison in the 
performance calculations between these individuals and participants of 
the VR program. However, individuals receiving Wagner-Peyser Act 
services that go beyond self-services or information-only activities 
would meet the definition of ``participant'' in Sec.  677.150(a). As 
such, there would be comparability between this participant and a 
participant of the VR program. The Departments recognize that VR 
services are provided in a much more intensive manner and for a more 
extended period of time than those provided by the Wagner-Peyser Act 
program. Such differences will be reflected in the performance levels 
established for each of the core programs.
    With respect to performance calculations, the three employment-
related indicators measure the percentage of participants who are 
employed in the second and fourth quarters after exit, as well as their 
median earnings in the second quarter after exit. The Departments 
provide further guidance regarding the performance calculations in the 
WIOA Joint Performance ICR.
    The Departments also agree that students with disabilities who 
receive pre-employment transition services without having applied, or 
been determined eligible, for the VR program would not satisfy the 
definition of ``participant'' as set forth in Sec.  677.150(a)(1), but 
rather would be tracked and reported as ``reportable individuals,'' as 
defined in Sec.  677.150(b). However, if a student with a disability 
applies and is determined eligible for the VR program and develops an 
IPE that includes the provision of pre-employment transition services 
or any other VR service, such student would satisfy the definition of 
``participant'' as

[[Page 55827]]

set forth in Sec.  677.150(a)(1) and would be included in the 
performance calculations as such. The Departments have provided 
additional guidance regarding the reporting of ``participants'' in the 
WIOA Joint Performance ICR. No change was made to the regulation at 
Sec.  677.150(a)(1) in response to the comments.
    Comments: Several commenters urged the Departments to adopt 
consistent definitions regarding point of enrollment across titles 
triggered by engagement in program activity, not just initial 
assessment. They expressed particular concern for the youth program.
    Departments' Response: The definition of ``participant'' takes into 
consideration the unique purposes and characteristics of each program 
and the ways in which an individual may access, and ultimately engage 
in, services in each of the core programs, thereby focusing on the 
established common point in service design and delivery that an 
individual reaches regardless of the program. The Departments concluded 
that it was sufficient to revise the definition of ``participant'' for 
purposes of the WIOA youth program.
    Comments: Several commenters sought clarification concerning the 
distinction between the data collected for reportable individuals and 
participants, particularly with regard to whether they are included in 
performance calculations for the primary indicators of performance.
    Departments' Response: While the Departments will collect and track 
information on reportable individuals as well as participants, the 
Departments currently do not intend to require reporting of outcomes of 
reportable individuals. The Departments will notify States via the ICR 
process of any collection and reporting requirements for reportable 
individuals. No change to the regulatory text was made in response to 
these comments.
    Comments: A commenter asserted that older individuals with barriers 
to employment may require priority in receiving staff-assisted 
services, since these individuals are not as likely to use self-service 
tools.
    Departments' Response: The Departments recognize the unique 
challenges faced by the different populations with barriers to 
employment that affect both their access to and utilization of services 
within the public workforce system. WIOA provides for meaningful access 
to individuals seeking services, including individuals with multiple 
barriers to employment. The regulation no longer refers to staff-
assisted services.
    Comments: Several commenters stated that while the definition of 
``participant'' is well suited for WIOA performance accountability 
purposes, it is not suitable for many education programs and 
postsecondary students. These commenters stated that postsecondary 
students may participate in the workforce system in ways that are not 
captured in the definition. For instance, students may take courses and 
determine a degree pathway but never officially enroll in a program of 
study.
    Departments' Response: The definition of ``participant'' 
establishes a common point at which an individual is meaningfully 
engaged in a core program. This takes into consideration the unique 
purposes and characteristics of each program and the ways in which an 
individual may access, and ultimately engage in, services in each of 
these programs. For example, an individual who accesses postsecondary 
education through the VR program, as set forth in title IV of WIOA, 
would meet the definition of participant at the point at which the 
eligible individual has an approved and signed IPE. Likewise, an 
individual accessing a career pathway program funded through title II 
would meet the definition of participant once the individual has 
completed at least 12 contact hours. Therefore, because programmatic 
differences are already accounted for, including differences regarding 
educational programs, the Departments have made no change to this Joint 
WIOA Final Rule regarding the definition of ``participant'' as applied 
to an educational program. The Departments note that further clarity is 
provided through the WIOA Joint Performance ICR. No change to the 
regulatory text was made in response to these comments.
    Comments: A few commenters stated that the definition of 
``participant'' is problematic when applied to all individuals in a 
program of study for the purpose of the eligible training provider 
performance report.
    Departments' Response: The Departments recognize the need for 
clarity on terms as they apply to the eligible training provider (ETP) 
performance reports applicable to the adult and dislocated worker 
programs. There is further discussion on this and associated issues in 
the preamble of Sec.  677.230 below. The Departments do not consider 
all individuals in a program of study through an ETP as falling within 
the definition of participants as defined under Sec.  677.150. No 
change to the regulatory text was made in response to these comments.
    Comments: Although the Departments received no comments 
specifically on proposed Sec.  677.150(a)(4), which requires that 
programs must include participants in their performance calculations, 
the Departments received comments with respect to other areas of 
performance accountability that highlighted the intersection between 
WIOA core programs and their partner programs. Some commenters 
addressed the general applicability of these provisions to the national 
programs authorized under title I, particularly with regard to those 
programs identified in WIOA sec. 121(b)(1)(B).
    Departments' Response: The Departments reiterate that sec. 116 
applies to other programs, including the national programs and the 
partner programs identified in WIOA sec. 121(b)(1)(B), to the extent 
provided for by provisions of WIOA pertaining to those programs and 
their authorizing statutes and implementing regulations. In some 
instances, these statutes or regulations invoke the performance 
accountability provisions of WIOA sec. 116. In other instances, a 
program has its own statutory or regulatory performance provisions that 
apply to the program. In the case of ETP programs authorized at 20 CFR 
part 680 and reported through Sec.  677.230 of these joint regulations, 
the definitions under Sec.  677.150 only apply to those individuals who 
are WIOA program participants who received training from an ETP. Where 
Sec.  677.230 outlines required reporting for all individuals in a 
program of study, these definitions under Sec.  677.150 do not apply. 
Further direction regarding the terms, calculations, and reporting is 
provided and discussed in the WIOA Joint Performance ICR. No change to 
the regulatory text was made in response to these comments.
    Because of WIOA sec. 134's unique eligibility requirements, the 
Departments do not consider individuals who receive incumbent worker 
training to be participants required for inclusion in the WIOA 
performance indicator calculations. WIOA sec. 134(d)(4) requires the 
Local WDB to determine if an employer is eligible to have its employees 
receive incumbent worker training; there is no separate determination 
of the eligibility of any particular employee to receive incumbent 
worker training.
Definition of ``Reportable Individual'' (Sec.  677.150(b))
    Section 677.150(b) defines ``reportable individual'' as an 
individual who has

[[Page 55828]]

taken action that demonstrates an intent to use program services and 
who meets specific program criteria for reporting, which may include 
the provision of identifying information, the use of a self-service 
system, or receipt of information-only services or activities. This 
approach requires counting as a ``reportable individual'' those who use 
the self-service system, or who receive only information-only services 
or activities, as well as those who receive other services that may 
occur prior to an individual meeting the definition of ``participant'' 
in Sec.  677.150(a).
    A key difference between ``reportable individuals'' and 
``participants'' is that reportable individuals are not included in 
performance calculations for primary indicators of performance. 
Furthermore, there currently is no requirement for the collection and 
reporting of outcome data for reportable individuals, but the 
Departments may propose an amended ICR through an additional PRA notice 
and comment period, to require such collections and reporting in the 
future if determined to be appropriate. The Departments intend to issue 
more detailed guidance on the tracking and reporting of reportable 
individuals under WIOA through the WIOA Joint Performance ICR, 
Department-specific ICRs, guidance, and technical assistance.
    The Departments revised Sec.  677.150(b) by deleting the word 
``core'' to clarify that the definition of a ``reportable individual'' 
is not limited to core programs, as had appeared in proposed Sec.  
677.150(b). With this change, a ``reportable individual'' is one who 
has taken action that demonstrates intent to use program services and 
who meets specific reporting criteria of the program. The Departments 
also revised Sec.  677.150(b) to emphasize that the listed examples of 
actions taken by a reporting individual (i.e., providing identifying 
information, using the self-service system, or receiving information-
only services or activities) are neither exhaustive nor required. An 
individual may be properly treated as a reportable individual without 
having taken all of the actions identified at Sec.  677.150(b). 
Similarly, an individual may take action demonstrating an intent to use 
program services by meeting specific program reporting criteria other 
than those identified at Sec.  677.150(b).
    Comments: Of the commenters who remarked on the proposed definition 
of ``reportable individual,'' most expressed support. Multiple 
commenters applauded the Departments for establishing a definition that 
is broad enough to cover students with disabilities who access pre-
employment transition services under the VR program but do not 
subsequently apply for VR services.
    Departments' Response: The Departments will continue to consider 
further clarification that can be provided in program guidance, the 
WIOA Joint Performance ICR, and Department-specific ICRs that support 
alignment and consistency of performance definitions across all 
programs and States. The final regulations for the VR program, which 
are published elsewhere in this issue of the Federal Register, contain 
specific provisions regarding the application of this definition as 
applied to students with disabilities receiving pre-employment 
transition services under the VR program.
    Comments: A few commenters asserted that receipt of staff-assisted 
services should align with the type of activity, not the level of 
engagement of one-stop center staff.
    Departments' Response: As discussed above with regard to the 
definition of a ``participant,'' the Departments modified Sec.  
677.150(a), particularly by adding Sec.  677.150(a)(3), to explain that 
the point at which a person is a participant is when the person moves 
beyond self-service or information-only services or activities. In the 
NPRM, the Departments considered receipt of ``staff-assisted services'' 
to be the most common point across the core programs to define the 
transition to being a participant. However, in response to comments, 
the Departments modified the definition of participant to eliminate the 
use of the term ``staff-assisted services'' thereby aligning the 
definitions of ``participant'' and ``reportable individual'' and 
clarifying the progression from ``reportable individual'' to 
``participant.''
    Comments: One commenter proposed that the appropriate point of 
receipt of staff-assisted services should be when initial assessment 
and eligibility documentation is complete.
    Departments' Response: As noted above, the definition of 
``participant'' no longer incorporates a reference to ``staff-
assisted'' services, but the definition continues to require that the 
individual has received certain services after having satisfied all 
programmatic requirements for the provision of services, such as 
eligibility determination. The Departments note that the definition 
does not explicitly require completion of an initial assessment, but it 
does require satisfaction of all applicable programmatic requirements--
which may include an initial assessment or an eligibility 
determination. No change to the regulatory text was made in response to 
these comments.
    Comments: One commenter suggested that ``reportable individuals,'' 
should be those individuals who have a signed and approved IEP.
    Departments' Response: The Departments decline to adopt the 
recommendation because to do so would be inconsistent with the 
distinctions between the definitions of ``participant'' and 
``reportable individual.'' The Departments plan to provide more 
detailed guidance on the tracking and reporting of reportable 
individuals under WIOA through the WIOA Joint Performance ICR, 
Department-specific ICRs, guidance, and technical assistance.
    Comments: Several commenters sought clarification concerning the 
proposed definition of ``reportable individual.'' Of these, a few 
commenters requested that the Departments clarify whether a pretest is 
required for individuals in the AEFLA program in order to be considered 
reportable.
    Departments' Response: A reportable individual is an individual who 
has taken action that demonstrates an intent to use program services 
and meets the specific criteria of the program. Further explanation of 
this definition is available through the WIOA Joint Performance ICR. A 
pretest has no bearing on the status of an individual being a 
participant or a reportable individual.
    Comments: A few commenters stated that a clearer description of the 
point at which an individual becomes ``reportable'' would enhance 
comparability among States. Multiple commenters suggested that 
individuals become ``reportable'' when an individual provides 
identifying information. A commenter remarked that it is unclear how 
agencies should track reportable individuals. This commenter stated 
that an individual should not be considered reportable without 
providing identifying information to enable tracking.
    Departments' Response: The Departments note that the regulations 
simply require the reporting of reportable individuals. Someone can be 
considered a reportable individual without providing identifying 
information. The Departments intend to issue further program guidance 
to aid States in implementing the requirement to report on ``reportable 
individuals.'' No change to the regulatory text was made in response to 
these comments.
    Comments: A commenter thought that the term ``reportable 
individual'' may not be easily understood by the general

[[Page 55829]]

public and suggested ``customer'' as an alternative.
    Departments' Response: The Departments have concluded that 
``customer'' would not be an appropriate term for these purposes as all 
individuals who are served through a program would be considered 
customers. The terms in Sec.  677.150 are consistent with the purposes 
outlined in this section and with the requirements of sec. 116 of WIOA. 
No change to the regulatory text was made in response to these 
comments.
    Comments: A commenter inquired as to whether an individual could 
first be tracked as a participant and then tracked as a reportable 
individual if the person exited the program after receiving services 
and was subsequently determined to be ineligible.
    Departments' Response: To do as the commenter suggests would be 
inconsistent with the definitions of ``participant'' and ``reportable 
individual'' at Sec.  677.150(a) and (b). To be clear, an individual is 
a ``participant'' if he or she is a ``reportable individual'' who has 
satisfied programmatic requirements for the receipt of services, such 
as eligibility determination, and has received services that go beyond 
self-service or information-only services or activities. Therefore, 
once an individual crosses the threshold from ``reportable individual'' 
to ``participant'' by receiving such services, this does not change by 
virtue of the fact that the individual eventually exits the program 
because he or she is later determined ineligible. Neither the 
definition of ``participant'' nor ``reportable individual'' contain 
requirements related to the individual's exit from the program. Those 
requirements are set forth in the definition of ``exit'' at Sec.  
677.150(c), discussed in more detail below. The Departments will 
provide further guidance regarding the reporting of participants and 
reportable individuals in the WIOA Joint Performance ICR and 
Department-specific ICRs, as well as guidance and technical assistance. 
No change to the regulatory text was made in response to these 
comments.
Definition of ``Exit'' (Sec.  677.150(c))
    Section 677.150(c) defines the term ``exit'' for purposes of the 
performance accountability system for the core programs under WIOA, as 
well as applicable non-core programs as described through regulation or 
guidance. Several of the primary indicators of performance require 
measuring participants' progress after they have exited from the 
program.
    Generally for core programs, except for the VR program, ``exit'' is 
the last date of service. The last date of service means the individual 
has not received any services for 90 days and no future services are 
planned. For the purpose of this definition, ``services'' do not 
include self-service, information-only services or activities, or 
follow-up services. Therefore, as set forth in Sec.  677.150(c)(1)(i), 
in order to determine whether an individual has exited, States will 
retroactively determine if 90 days have passed with no further services 
provided and no further services scheduled.
    The definition of ``exit'' at Sec.  677.150(c)(2) for the VR 
program is similar to that in Sec.  677.150(c)(1) in that it marks the 
point at which the individual is no longer engaged with the program and 
there is no ongoing relationship between the individual and the 
program. However, because of specific programmatic requirements between 
the VR program and other core programs, it was essential that the 
definition of ``exit'' clarify when the individual's relationship with 
the VR program ends. Under the VR program, an individual is determined 
to have exited the program on the date the individual's case is closed 
in accordance with VR program requirements.
    Even with this programmatic distinction, the calculations are 
essentially the same as with the other core programs because in all 
instances the ``exit'' count captures all persons who are no longer 
active participants in any of the core programs. In addition, for 
purposes of the VR program, the Departments exclude from the definition 
of ``exit'' those individuals who have achieved supported employment 
outcomes at subminimum wages. This provision is necessary to implement 
WIOA's heightened emphasis on competitive integrated employment. There 
are no substantive changes to Sec.  677.150(c)(2).
    Comments: The Departments received numerous comments, in response 
to both the NPRM and the proposed WIOA Joint Performance ICR, regarding 
whether an individual would be counted more than once in a program year 
if he or she met the definitions of ``participant'' and ``exit'' more 
than once in that same program year. The majority of these commenters 
opposed the Departments' position, set forth in the proposed WIOA Joint 
Performance ICR, which was that an individual only would count once in 
a program year.
    Departments' Response: The Departments note that under WIA, DOL 
counted as an ``exit'' from its programs for performance accountability 
purposes each time in a program year a participant exited from a 
program, regardless of whether the participant exited more than once in 
that program year. This was referred to as calculating on a ``period of 
participation'' basis. Thus, the same individual could be counted as 
more than one ``participant'' and as having more than one ``exit'' in 
that same program year for the performance accountability calculations. 
Although States reported individuals similarly for the VR program, 
States reported an individual only once in a program year under the 
AEFLA program, regardless of whether the individual would meet the 
definitions of ``participant'' and ``exit,'' more than once in a 
program year.
    The NPRM was silent as to whether ``participants'' and ``exits'' 
should count more than once in the same program year. However, the 
Departments proposed a different approach in the proposed WIOA Joint 
Performance ICR published on July 22, 2015 at 80 FR 43474. In the 
proposed WIOA Joint Performance ICR, the Departments proposed counting 
each individual once per program year regardless of how many times an 
individual met the definitions of ``participant'' and ``exit'' in Sec.  
677.150 within that same program year.
    After consideration, the Departments agree with the concerns raised 
by commenters. In response to those comments, the Departments will 
include in the performance calculations each time a participant exits 
from a program during a program year, even though this could result in 
such a person being counted as more than one participant. This 
calculation method for performance accountability purposes maintains 
the reporting approach historically used by some programs, as discussed 
above, and by linking a set of services or interventions to outcomes 
for each exit during a program year, strengthens accountability.
    However, the Departments will require States to provide unique 
identifiers for each individual ``participant'' so that the Departments 
will be able to calculate the number of unique participants in each 
core program during a program year. The Departments will provide 
technical assistance and guidance to States, including the WIOA Joint 
Performance ICR, as they take the necessary steps to modify their 
systems and processes to comply with these instructions.
    Comments: Many commenters provided input regarding the proposed 
definition of ``exit'' and responded to the Departments' request for 
comments

[[Page 55830]]

on the costs and benefits of taking either a program exit approach or a 
common exit approach. A number of commenters expressed support for 
utilizing a common exit in order to support career pathways and cross-
program participation that would benefit participants. One commenter 
supported the use of a common exit, specifically phased in over a 4-
year period. Conversely, other commenters opposed the use of a common 
exit and stated that the Departments should maintain program exits. 
Commenters cited numerous reasons for maintaining program exits 
including that: (1) Program exits are preferable to comply with sec. 
504 of WIOA, which requires States to simplify and reduce reporting 
burdens; (2) States should be permitted to choose whether to use a 
program exit or a common exit, and indicate their selection in the 
Unified or Combined State Plan; (3) States should have the option to 
use integrated periods of participation with common program exit dates 
for some or all core programs; and (4) a common exit would be 
problematic if the services provided by multiple programs are 
sequential.
    Departments' Response: Common Measures policies that included the 
use of common exit as a reporting structure were developed by ETA in 
2005 for use in title I programs under WIA as an acknowledgment that 
integrated reporting was key to integrated case management. The efforts 
to promote the use of a common exit across WIOA title I and Wagner-
Peyser Act Employment Service programs have significantly increased the 
use of common exit policies across States.
    The Departments have concluded that continuing common exit policies 
would emphasize the importance of an individual receiving and 
completing all program services necessary to ensure a successful 
attachment to the labor market. The Departments also recognize that the 
use of a common exit is dependent on the ability of States to exchange 
data effectively and efficiently across core programs in order to 
determine outcomes for each of the programs. The Departments considered 
each of the commenters' concerns and suggestions with regard to the 
proposed definition of exit and have revised the definition by adding 
Sec.  677.150(c)(3) to allow WIOA title I and Wagner-Peyser Act 
Employment Service (title III) programs to utilize a common exit 
policy. The decision to allow a common exit date for WIOA title I and 
Wagner-Peyser Act Employment Service programs--and not for the AEFLA 
and VR programs under WIOA titles II and IV, respectively--was based on 
a number of factors. In particular, under WIA and continuing under 
WIOA, DOL encouraged co-enrollment between the title I and Wagner-
Peyser Act Employment Service programs resulting in many states 
developing a common exit policy or co-enrollment strategies which DOL 
does not seek to disrupt. The ED will explore the feasibility of the 
use of a common exit policy for its title II and VR programs.
    The concept of integrated case management and common exit has 
extended beyond WIOA title I core programs and Wagner-Peyser Act 
Employment Service programs to their DOL partner programs, such as the 
TAA program and the JVSG program. Paragraph (c)(3)(i) of Sec.  677.150 
provides that where a State has implemented a common exit policy, the 
policy may extend to those required partner programs administered by 
DOL. As such, DOL encourages States to implement common exit policies 
consistent with these joint regulations.
    Since 2009, co-enrolling TAA participants with WIOA title I and 
Wagner-Peyser Act Employment Service programs has continued to provide 
participants supportive services, such as childcare and local 
transportation costs, that are not available under TAA. Further, due to 
the variable geography of TAA certified worker groups, WIOA title I 
program services and Wagner-Peyser Act Employment Service are often 
essential in providing prompt assessments and follow up services that 
complement the more substantial training and other services funded 
under TAA.
    Similarly, the Veterans Employment and Training Service worked to 
align its programs with WIOA as a key partner program. Currently, JVSG 
and Wagner-Peyser Act Employment Service have a common exit in multiple 
States. This ensures that program participants who may be co-enrolled 
exit all programs at the same point, and are measured and tracked for 
employment outcomes based on the same point. This approach is aligned 
with the idea that DOL's one-stop center programs offer seamless 
services to participants and that, despite referral to or from partner 
programs, employment outcomes are not measured until services are 
complete. The modifications to the definition of exit in this Joint 
WIOA Final Rule allow for these practices to continue and also allow 
States the flexibility to implement and move forward with existing 
common exit policies for programs administered by DOL.
    Comments: A few commenters cited the challenge of matching and 
exchanging data across agencies. Multiple commenters recommended 
implementing a research study to examine the use of the common exit, 
rather than codifying this requirement in regulation. One commenter 
stated that a common exit would make it very difficult to track and 
conduct follow up services. A commenter stated that the cost of 
reporting a common exit is prohibitive for that State. A commenter 
remarked that a common exit would be the costliest option.
    Departments' Response: The Departments recognize the challenges 
raised by commenters with regard to infrastructure and integration of 
data systems that would be required under a common exit policy. Under 
the current regulation, the States have the discretion to choose to 
adopt a common exit policy for DOL-administered programs. The 
Departments acknowledge that certain States are at different stages and 
may vary in their approaches and ability to adopt a common exit across 
multiple programs. The Departments also note, however, that common exit 
supports a customer-centric design that allows programs to leverage co-
enrollment for individuals who are eligible for, and need, multiple 
services that cross program lines without penalizing programs that may 
have to delay outcomes for those individuals referred to or co-enrolled 
in a partner program. Further, common exit policies have allowed 
smaller pilot, discretionary, or partner programs to access data and 
outcomes at a level that would not be available through their grant or 
program alone.
    With WIOA's focus on integration, common exit is a natural 
progression where appropriate infrastructure, and integrated data 
systems exist across programs. The DOL envisions full implementation of 
a common exit across the States for the DOL core programs. The DOL 
understands this is a long-term goal and intends to support States from 
where they are at in terms of capacity and structure towards achieving 
this goal. With this in mind, the Departments will require the States 
to develop a plan for implementing a common exit policy and will 
require States to share that plan with the Departments. The Departments 
anticipate modifying the requirements for State Plans through the 
information collection request process and will require the States to 
share their plans for implementing a common exit policy through the 
State Plan and will also require the States to conduct an examination 
and analysis of their capacity and structures that would support a 
common exit policy for the DOL core programs under title I and the

[[Page 55831]]

Wagner-Peyser Act Employment Service program. This will allow DOL to 
support the States as they move towards implementing a common exit 
policy.
    The Departments will continue to work with State and Local WDBs, 
one-stop center operators, and partners to achieve an integrated data 
system for the core programs and other programs to ensure 
interoperability and standardized collection of program and participant 
information, particularly for those States that have a common exit 
policy. Paragraph (c)(3) of Sec.  677.150 allows for the use and 
implementation of common exit policies for DOL administered-programs. 
The Departments encourage the use of common exit for DOL-administered 
programs, but do not currently require its immediate implementation, 
due partially to the commenters' concerns about potential difficulties 
and costs in implementing common exit. The Departments have concluded 
that this approach is responsive to both commenters who supported 
common exit as well as to commenters who supported program exits and 
appropriately allows States flexibility to choose to continue their use 
of common exit or to plan for the full implementation of common exit as 
a policy for WIOA title I and Wagner-Peyser Act Employment Service 
programs. Additionally the Departments will seek to collect information 
through the appropriate information collection vehicles on existing 
common exit policies, the programs included in those common exit 
policies, and their impacts on program design and outcomes.
    Comments: Many commenters supported the use of common exit in 
theory, but expressed reservations about the implementation of a common 
exit to title I youth programs, asserting that the use of a common exit 
would delay reporting of multiple performance indicators, harming the 
performance of the youth programs. These commenters suggested that the 
Departments encourage co-enrollment without a common exit, provide 
instruction for the identification in the participant record of 
individuals who are co-enrolled, and afford local programs the 
flexibility to use a program-specific exit or a common exit.
    Departments' Response: In response to the concerns raised about 
common exit and its effect on the performance of WIOA youth programs, 
predominately concerning the short-term or self-service nature of some 
programs as opposed to other programs providing longer-term or more 
intensive services, the Departments have clarified that the definition 
of ``participant'' at Sec.  677.150(a)(3)(ii) and (iii) excludes 
individuals who receive only ``self-service'' or ``information-only 
services or activities.'' As noted above, States--not individual 
programs within a State--are afforded the flexibility to use program-
specific exit or common exit. It does not appear feasible or preferable 
for individual programs within a State to choose the type of exit to 
implement.
    Comments: A number of commenters made additional suggestions 
specific to youth programs. One commenter stated that title I youth 
programs should have a defined end date, at which point participants 
should be considered to have exited, rather than waiting 90 days. 
Another commenter stated that local programs currently believe that no 
title I youth funds may be spent on youth once they exit, and requested 
clarification concerning follow-up services for youth conducted after 
an individual has exited. In addition, several commenters suggested 
that a hold status be maintained for youth who are not receiving 
services due to documented hardships. These commenters stated that a 
hold status would avoid counting these individuals as having exited if 
they reengage after the 90-day window.
    Departments' Response: While the Departments understand the 
concerns raised by commenters, the Departments decline to modify the 
definition of ``exit'' at Sec.  677.150(c) with regard to the 90-day 
period of no services. This definition maintains consistency with the 
definition of exit applied across other programs. Paragraph (c)(1)(i) 
of Sec.  677.150 requires that 90 days of no services (except for self-
service, information-only services or activities, and follow-up 
services) must have elapsed, and no future services, other than follow-
up services, may be planned in order for a participant to satisfy the 
definition of ``exit.''
    Conversely, Sec.  677.150(c)(3) adds flexibility for States that 
have or are pursuing common exit policies and strategies for their 
programs under WIOA titles I and III (Wagner-Peyser Act Employment 
Service) as well as other required partner programs that are 
administered by DOL. The clarification in this Final Rule that self-
service and follow-up services do not delay exit should allay the 
commenters' concerns regarding delayed reporting. By definition, 
follow-up services are provided to youth following exit and as a 
result, title I youth funds may be spent on participants once they exit 
in order to provide such follow-up services.
    For the sake of clarification, such expenditures of title I youth 
funds on participants for follow up services after exit do not result 
in delaying an individual's exit from the program. Section 681.580 (see 
DOL WIOA Final Rule published elsewhere in this issue of the Federal 
Register) clarifies which youth formula program elements may be 
provided during follow-up. Additionally, DOL will issue guidance on 
providing effective follow-up services for the programs it administers. 
Although the Departments are not implementing a ``hold status'' as 
suggested by the commenters, DOL will clarify through guidance the 
circumstances under which a ``gap in service'' may be appropriate in 
order to delay exit for those States that implement a common exit 
strategy for DOL-administered programs.
    Comments: Numerous commenters responded to the Departments' 
solicitation for comments regarding the effect of self-service 
activities on a participant's exit date. Most of the commenters 
asserted that self-service should not be used to delay the date of exit 
or count as re-enrollment in a program. However, other commenters 
asserted that individuals who access self-service activities should 
continue to qualify as participants because the use of these services 
indicates that participants have not completed their search for 
employment. One commenter suggested that self-service participants 
should continue to be tracked as reportable individuals.
    Departments' Response: The Departments acknowledge commenters' 
recommendation that self-service not be used to delay the exit date or 
qualify as re-enrollment. With regard to individuals who continue to 
use self-service, the Departments note that individuals access self-
service tools for a variety of reasons, but the decision to retain an 
exclusion of self-service from the definition of ``participant'' at 
Sec.  677.150(a)(3)(ii) is consistent with the decision in the NPRM to 
establish a uniform program attachment point in service delivery and 
design from which to compare programs. See the extensive discussion 
regarding the definition of ``participant'' and Sec.  677.150(a), 
above.
    Comments: Commenters raised a number of questions regarding various 
aspects of the proposed definition of ``exit,'' including requests for 
clarification regarding whether exit means exiting a core program or 
exiting all WIOA services.
    Departments' Response: Whether ``exit'' means from a specific 
program or a common exit from multiple programs depends on whether a 
State has implemented a common exit policy for DOL-administered 
programs. As discussed in more detail above, the

[[Page 55832]]

Departments have modified the definition of exit at Sec.  677.150(c)(3) 
to allow WIOA title I and Wagner-Peyser Act Employment Service programs 
to apply a common exit policy. States that lack a common exit policy 
across title I and Wagner-Peyser Act Employment Service programs will 
be required to conduct an assessment and develop a plan towards 
implementing a common exit policy. Additionally, States that retain or 
develop a common exit policy across title I and Wagner-Peyser Act 
Employment Service programs may extend such a policy to DOL-
administered required partner programs identified in WIOA sec. 
121(b)(1)(B). Further, States with common exit policies that include 
WIOA title I core programs and Wagner-Peyser Act Employment Service 
programs should ensure those policies align with the criteria in Sec.  
677.150(c).
    Comments: Several commenters expressed concerns regarding the 
definition of ``exit'' for purposes of the VR program since individuals 
served by VR typically require lengthier service delivery and follow-up 
activities than the other core programs. A few commenters also stated 
that a common exit would better protect individuals in the VR program 
from exiting the program before receiving the services they need.
    Departments' Response: As other commenters have noted, the VR 
program typically requires lengthier period of service delivery than 
the other core programs. While not common, it is possible for a single 
VR participant to receive services for 10 years, and service durations 
of 3 to 5 years are not unusual. If there were a single exit, it would 
mean that other programs would not be able to exit these co-enrollees 
until the VR case was closed. The VR program is not included under the 
common exit provision at this time, because if they were incorporated 
into the common exit provision, programs under other WIOA titles would 
not be able to report exit achievements until the time of the VR 
closure, no matter how much time had elapsed since participation in 
those programs. With the VR program having a separate closure process, 
individuals are shielded from the entreaties of other programs that may 
wish to close the case. The ED will explore the feasibility of the use 
of a common exit policy for its title II and VR programs. No change to 
the regulatory text was made in response to these comments.
    Comments: Some commenters expressed support for expanding the 
proposed definition of ``exit'' to reference the termination of staff-
assisted services.
    Departments' Response: The definition of ``participant'' at Sec.  
677.150(a) no longer references the term ``staff-assisted'' services 
due to concerns raised by many commenters about the confusion such term 
raises. Section 677.150(a) now describes the services as being those 
other than self-service and information-only services or activities, 
which are described further in Sec.  677.150(a)(3). See the response to 
comments related to the definition of ``participant'' above regarding 
the Departments' elimination of the term ``staff-assisted'' services 
from the definition; therefore, it is not necessary to expand the use 
of that term with regard to the definition of ``exit'' as the 
commenters suggest.
    Comments: Several commenters remarked on the application of the 
definition of ``exit'' to education programs, noting that the 
definition does not account for a transfer between institutions or 
participants not taking a class during the summer term that could 
exceed the 90-day timeframe.
    Departments' Response: Section 677.150(c)(1)(i) makes clear that a 
participant ``exits'' a program only if 90 days of no services have 
elapsed and there are no future services planned. Please see the 
analysis of comments regarding Sec.  677.230, below, for further 
discussion of these and other terms as they apply to eligible training 
providers.
    Comments: Some commenters suggested the Departments revise the 
definition of ``exit'' at Sec.  677.150(c) to lengthen the proposed 90-
day period of no services to 120 days, citing the challenges of 
sporadic engagement in services in which youth cycle in and out of 
services. In such cases, service delays can extend an exit beyond the 
90 days. One commenter suggested doubling the 90-day window to 180 
days. Other commenters suggested shortening the 90-day period.
    Departments' Response: Although the Departments recognize that out-
of-school youth, among other examples, may be a population that is 
difficult to engage in continuous services, the Departments have 
concluded that it is important to maintain consistency across all core 
programs regarding the definition of exit. The 90-day period has a 
basis in historical application. Under WIA, the DOL-administered 
programs and the AEFLA program under title II used 90 days of no 
service as a benchmark for determining when services had ended. 
Similarly, prior to WIOA the VR program closed an individual's service 
record after services had ended and the individual had maintained 
employment for 90 days.
    The Departments have not revised the definition of ``exit'' at 
Sec.  677.150(c) since lengthening the timeframe would delay outcomes 
for indicators that are already lagged behind the actual time period of 
exit, such as employment-related primary indicators that measure a 
participant's employment at the second and fourth quarters after exit 
and the median earnings of a participant in the second quarter after 
exit. The Departments have concluded that the 90-day period of no 
service strikes the appropriate balance for knowing how the programs 
are performing while providing enough time to account for sporadic 
participation. No change to the regulatory text was made in response to 
these comments.
    Comments: Some commenters expressed support for retaining the 
current ``neutral'' exits. Other commenters urged the Departments to 
adopt a more flexible exit policy that would allow participants who 
were ``negative'' exits due to loss of contact with the program, to 
reengage and positively exit if performance outcomes are achieved.
    Departments' Response: There are a number of reasons why 
individuals exit from the programs in which they are enrolled. The 
current definition of ``exit'' allows for performance accountability 
that can uniformly translate across programs, while also retaining 
critical programmatic differences and the policy-based flexibility for 
States in their program engagement and design. The Departments have 
concluded that the definitions in Sec.  677.150, including that for 
``exit'' at Sec.  677.150(c), are consistent with their applicability 
to the performance accountability system set forth in sec. 116 of WIOA.
    A ``neutral'' exit, as it relates to the performance accountability 
provisions, allows the State to exclude certain participants from the 
calculation of the primary indicators. The Departments have concluded 
that there is sufficient statutory authority to permit certain 
exclusions, as appropriate, from the performance calculations for the 
primary indicators of performance. The Departments have implemented 
these exclusions through the WIOA Joint Performance ICR. The 
Departments have concluded that it is important to account for 
premature exits from the program and that modifying the definition of 
``exit'' to allow neutral exits would undermine program accountability 
intended by WIOA. The Departments intend to provide guidance on how to 
calculate the primary

[[Page 55833]]

indicators of performance and provide guidance on other performance-
related requirements through the WIOA Joint Performance ICR, 
programmatic guidance, and technical assistance. No change to the 
regulatory text was made in response to these comments.
    Comments: A commenter emphasized the need for guidance regarding 
the transition from active programming to follow-up services, 
particularly as it relates to the definition of ``exit.''
    Departments' Response: The Departments will provide further 
guidance regarding the transition from active programming to follow-up 
services as it relates to the definition of ``exit.''
Definition of ``State'' (Sec.  677.150(d))
    The Departments have added a definition of ``State'' as Sec.  
677.150(d) to specify that the outlying areas are subject to the 
performance accountability provisions of part 677. This provides that, 
for purposes of part 677 other than in regard to sanctions or the 
statistical adjustment model, ``State'' includes the outlying areas of 
American Samoa, Guam, Commonwealth of the Northern Mariana Islands, the 
U.S. Virgin Islands, and, as applicable, the Republic of Palau. In so 
doing, as discussed in detail immediately below regarding outlying 
areas, the Departments ensure that the performance accountability 
requirements apply to the outlying areas as well. This regulatory 
change is essential to ensuring consistency with the Departments' 
decision to require outlying areas to submit Unified or Combined State 
Plans which, pursuant to sec. 102 of WIOA must include expected levels 
of performance, thereby making the performance accountability system 
applicable to the outlying areas.
    In the NPRM, the Departments specifically requested comments about 
the applicability of WIOA sec. 116 performance accountability system 
requirements to the core programs administered by the outlying areas, 
namely American Samoa, Guam, Commonwealth of the Northern Mariana 
Islands, the U.S. Virgin Islands, and, as applicable, the Republic of 
Palau (80 FR 20574, 20583-20584 (April 16, 2015)). The Departments 
explained the ambiguity that was created by differing terms and 
definitions for outlying areas and States, for purposes of the title I 
core programs, but made clear that titles II and IV specifically 
subject adult education and VR grantees, including outlying areas, to 
the common performance accountability system set forth in sec. 116 of 
WIOA.
    Sections 189(a) and (c) of WIOA provide the authority to impose 
planning and performance reporting requirements on outlying areas, 
which is being accomplished through this definition. The decision to 
treat outlying areas as States for purposes of the common performance 
accountability system dovetails, and is consistent with, the 
Departments' decision to treat outlying areas the same as States for 
purposes of the Unified and Combined State Plan requirements, as 
discussed elsewhere in this preamble with respect to part 676 of this 
Joint WIOA Final Rule.
    Although the Departments will hold the outlying areas accountable 
for complying with the performance accountability system requirements 
of sec. 116 of WIOA and part 677, the Departments will not impose 
monetary sanctions against the outlying areas pursuant to sec. 
116(f)(1)(B) of WIOA for two reasons. First, the sanctions are imposed 
against the Governor's Reserve under sec. 128(a) of WIOA, which the 
outlying areas do not receive. Second, the sanctions are imposed when a 
State fails to satisfy the adjusted levels of performance or fails to 
report. The adjusted performance level is based on several required 
factors set forth in sec. 116(b)(3)(A)(v) of WIOA, including, among 
other things, the use of a statistical adjustment model. The 
performance output data provided by the core programs in the outlying 
areas yield too small a sample size; thus, applying an adjustment model 
to the outlying areas will not yield a valid result. In addition, there 
are cases in the outlying areas where required data are not available 
to run the statistical adjustment model. Despite the fact that the 
Departments will not impose monetary sanctions against the outlying 
areas in accordance with sec. 116(f)(1)(B) of WIOA, the Departments 
want to make clear that the Departments will hold outlying areas 
accountable for poor performance or failure to report through technical 
assistance and the development of performance improvement plans in 
accordance with sec. 116(f)(1)(A) of WIOA.
3. State Indicators of Performance for Core Programs (20 CFR Part 677, 
Subpart A; 34 CFR 361.155 Through 361.175; 34 CFR 463.155 Through 
463.175)
Section 677.155 What are the primary indicators of performance under 
the Workforce Innovation and Opportunity Act?
    Section 677.155 implements the primary indicators of performance as 
set forth in WIOA sec. 116(b)(2)(A)(i). These primary performance 
indicators apply to the core programs described in sec. 
116(b)(3)(A)(ii) of WIOA, and administered by ED's OCTAE and RSA, and 
DOL's ETA. These primary indicators of performance create a common 
language shared across the programs' performance metrics, which the 
Departments anticipate will support system alignment, enhance 
programmatic decision-making, and facilitate consumer choice. The 
Departments implement the requirements of sec. 116 of WIOA through this 
Joint WIOA Final Rule, as revised and described in this preamble.
    Comments: A commenter expressed concern about the cost and time it 
would take to establish and operate a fiscal and management 
accountability information system.
    Departments' Response: The Departments recognize the concerns 
raised with regard to the infrastructure, and resulting cost, required 
to implement the performance, fiscal, and management accountability 
information systems. No changes to the regulatory text were made in 
response to this comment because the performance accountability 
provisions outlined within sec. 116 of WIOA clearly mandate States and 
local areas to collect and report on the information contained in part 
677. The Departments want to make clear that all core programs were 
required, even prior to the enactment of WIOA, to operate fiscal and 
management systems pursuant to WIA, former OMB Circular A-87, OMB's 
Uniform Guidance (2 CFR part 200), and programmatic requirements. It is 
important to note that WIOA's requirements for States to operate such 
systems are very similar to those required under WIA, which is why the 
Departments do not consider these to be new requirements. However, the 
Departments acknowledge an integration of such systems would be a 
departure from that required under WIA and recognize that time and 
resources combined with guidance and technical assistance will be 
necessary before an integration of fiscal and management systems could 
occur.
    The Departments have concluded that system integration will, in the 
long-term, reduce administrative and reporting burden while supporting 
alignment and comprehensive accountability across all of the core 
programs. The Departments will work with State and Local WDBs, one-stop 
center operators, and partners to achieve an integrated data system for 
the programs covered by WIOA to ensure interoperability and the 
accurate and

[[Page 55834]]

standardized collection of program and participant information. 
Integrated data systems will allow for unified and streamlined intake, 
case management and service delivery, minimize the duplication of data, 
ensure consistently defined and applied data elements, facilitate 
compliance with performance reporting and evaluation requirements, and 
provide meaningful information about core program participation to 
inform operations. Data integration may be accomplished through a 
variety of methodologies including data sharing, linking systems, or 
use of data warehouses.
    Comments: A commenter urged State and local planning efforts to use 
the most current Census and administrative data available to develop 
estimates of each priority service population.
    Departments' Response: The Departments note that the WIOA State 
Plan ICR provides guidance as to what information should be included in 
the analysis and the State Plan requirements. No change to the 
regulatory text is being made in response to this comment.
    Comments: A commenter recommended creating data systems to separate 
participants by program and local area and allowing the progress 
measures to be skills based using goal setting rather than time 
intervals. A commenter recommended adding self-sufficiency as an 
indicator of performance. Commenters supported workforce system 
performance that addresses the needs of veterans with disabilities.
    Departments' Response: Changing the primary indicators of 
performance to a skills-based measurement system, rather than one based 
on time intervals, would not be consistent with the primary indicators 
of performance set forth in sec. 116(b)(2)(A)(i) of WIOA, which require 
the measurement of employment in the second and fourth quarters after 
exit, the attainment of a credential during participation in the 
program and up to 1 year post exit, and the attainment of measurable 
skill gains during the program year. WIOA clearly establishes 
timeframes for each of these primary indicators of performance.
    However, sec. 116(b)(1)(A)(ii) of WIOA and Sec.  677.165 permit 
States to develop additional indicators of performance. If a State were 
to do so, the State could implement skills-based indicators or 
indicators that measure self-sufficiency or services to veterans with 
disabilities as suggested by commenters. The Departments encourage 
State and Local WDBs to work in collaboration to identify and implement 
additional indicators of performance that aid in the management of 
workforce programs in their State. No change to the regulatory text is 
being made in response to this comment.
    Comments: In the preamble to the NPRM, the Departments requested 
comments on using the performance indicators identified in Sec.  
677.155 for additional programs beyond the core programs. The 
Departments postulated that this broader use of the six primary 
indicators of performance could streamline reporting on other DOL-
administered programs, such as the JVSG program and other discretionary 
grant programs. Commenters supported the use of common metrics across 
education and workforce programs wherever appropriate. Commenters also 
raised questions about alignment with various specific programs, such 
as Migrant and Seasonal Farmworkers, Job Corps, Indian and Native 
American, Family Literacy, Integrated English Literacy and Civics 
Education, Wagner-Peyser Act Employment Service, Adult Education, and 
JVSG.
    Departments' Response: The Departments acknowledge that WIOA has 
introduced unprecedented opportunities for alignment and as such, 
envision integration across workforce programs to the maximum extent 
feasible. The core programs, described in sec. 116(b)(3)(A)(ii) of 
WIOA, are covered under this Joint WIOA Final Rule and the WIOA Joint 
Performance ICR. National programs such as Job Corps, the National 
Farmworker Jobs Program, and the Indian and Native American adult and 
youth programs that are authorized under title I of WIOA are also 
aligned under this regulation, as well as their respective program 
regulations at 20 CFR parts 686 (Job Corps), 685 (National Farmworker 
Jobs Program), and 684 (Indian and Native American Program). 
Additionally, the Departments intend that DOL-administered partner 
programs authorized by statutes other than WIOA and not covered under 
these joint regulations, such as the JVSG programs and the TAA 
programs, will be aligned with the performance accountability system 
under WIOA through both legislative and policy guidance. The 
Departments recognize the variety of interactions among programs under 
WIOA and programs authorized by other statutes. The Departments 
understand the need for further guidance and clarification, which will 
be issued throughout the workforce development system and which will 
include information on how and where to report.
    Comments: A commenter noted that many programs for out-of-school 
youth, including Job Corps, often use accredited online high school 
programs to provide education to youth participants. The commenter 
requested that any measure intended to capture progress on achieving or 
attaining a high school diploma or recognized equivalency degree should 
reflect any State-accredited standard.
    Departments' Response: Details regarding accreditation are beyond 
the scope of this Joint WIOA Final Rule and will be addressed in 
guidance or in the WIOA Joint Performance ICR or DOL Performance ICR. 
No change to the regulatory text is being made in response to this 
comment.
    Comments: Commenters requested guidance and examples on several 
subjects, such as: Measuring and reporting registered apprenticeship 
performance; how wages for successful and unsuccessful closures are 
used and measured; performance data for industry-driven credentials; 
students with degrees from another country; areas where net income can 
apply as a performance indicator; incorporating self-employment as a 
successful outcome; performance metrics; when enrollment occurs; 
operational definitions; determination of competitive wage; cross 
program impacts; individualized measurements of the six primary 
indicators as relates to VR consumers; and individual skills 
measurement. A few commenters asked that States be allowed flexibility 
in developing data sharing agreements and additional performance 
measures.
    Departments' Response: The Departments acknowledge the need for 
clarification and examples to illustrate the methods that each of the 
core programs will use to determine performance on the primary 
indicators, including details regarding data collection for self-
employment outcomes, as well as educational attainment and measurable 
skill gains. The Departments will address these issues in guidance and 
in the instructions for program-specific reporting requirements 
contained in the WIOA Joint Performance ICR.
    With regard to requests for State flexibility in developing data 
sharing agreements and additional performance measures, sec. 
116(b)(1)(A)(ii) of WIOA and Sec.  677.165 permit States to implement, 
through their State Plans, additional indicators of performance and 
encourage States to also leverage their program collection and 
reporting to analyze and manage performance of their programs. With 
regard to data sharing agreements States have the flexibility to enter 
into data sharing agreements, ensuring that such

[[Page 55835]]

agreements meet all applicable Federal and State statutory and 
regulatory confidentiality requirements. No change to the regulatory 
text is being made in response to this comment.
    Section 677.155(a)(1) identifies the six primary indicators of 
performance that will be applied to the core programs identified in 
sec. 116(b)(3)(A)(ii) of WIOA. Where practicable, DOL intends to 
leverage these indicators to streamline reporting for other DOL-
administered programs, such as the JVSG program, TAA and other 
discretionary grant programs.
    Section 677.155(a)(1)(i) implements the first primary indicator as 
described in sec. 116(b)(2)(A)(i)(I) of WIOA. This primary indicator is 
a measure of the percentage of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program. There are no changes to Sec.  677.155(a)(1)(i) from that 
proposed in the NPRM, which mirrors the statutory requirement of WIOA 
sec. 116(b)(2)(A)(i)(I).
    Comments: A commenter recommended that calculated employment 
percentages should not include individuals who never received core 
program services.
    Departments' Response: The issue raised by the commenter is more 
closely related to the definitions of ``participant'' and ``reportable 
individual,'' as set forth in Sec.  677.150 and which are discussed in 
detail above. The Departments have concluded that these definitions are 
clear in setting the standards under which participants are included in 
performance calculations for purposes of the primary indicators of 
performance. Specifically, the definition of ``participant'' at Sec.  
677.150(a) ensures that an individual is receiving services of a 
substantive nature from any of the core programs before the individual 
is considered a ``participant'' and, thus, included in performance 
calculations. Because Sec.  677.155(a)(1)(i) is consistent with sec. 
116(b)(2)(A)(i)(I) of WIOA, no change to the regulatory text is being 
made in response to this comment.
    Comments: A number of commenters expressed support for the WIOA 
requirements as proposed in Sec.  677.155(a)(1)(i) and (ii). However, 
many commenters recommended that this section of the regulation and the 
section related to calculating performance should include the option 
for excluding participants who report that they are not working and not 
looking for work. These commenters cited data showing that 29 percent 
of AEFLA participants were ``not in the labor force.'' A commenter 
suggested adding the words ``who are in the labor force at enrollment'' 
after the word ``participants'' in Sec.  677.155(a)(1)(i) through 
(iii). Another commenter stated that it would seem practical to include 
participants who are not looking for employment in the calculation of 
the employment performance outcome.
    Departments' Response: The Departments acknowledge the concerns 
raised by commenters about being held accountable for those 
participants who enter the program and are not seeking employment, and 
about how participants not in the labor force might affect performance 
outcomes. However, WIOA secs. 116(b)(2)(A)(i)(I) through 
(b)(2)(A)(i)(III) measure the percentage of program participants in 
employment during the second and fourth quarters after exit and the 
median earnings of participants in the second quarter after exit. 
Therefore, the Departments disagree with commenters who believe that 
individuals who are not looking for work should not be included in the 
performance calculation. Having said this, the Departments recognize 
that there are very limited circumstances where certain individuals, 
such as those who are incarcerated and receiving services under sec. 
225 of WIOA, should not be included in the performance calculations for 
this indicator. The Departments have decided to exclude incarcerated 
individuals served under sec. 225 of WIOA because they do not have the 
opportunity to obtain employment or participate in education or 
training programs in the same manner as other participants who are in 
the general population. The Departments consider additional 
determinations regarding the need for exclusions from performance 
calculations to be more appropriately made through the ICR process and, 
therefore, have added Sec.  677.155(a)(2) to the regulatory text. This 
matter will be discussed in more detail with respect to that provision 
below.
    Comments: Another commenter asked whether the State can use AEFLA 
funds to serve individuals who are not looking for employment.
    Departments' Response: Section 203(4) of WIOA defines an eligible 
individual for the purposes of AEFLA. Eligibility does not include 
employment status. Whether or not an individual is seeking employment 
does not affect that person's eligibility status under title II. 
Further matters concerning AEFLA program implementation are in the 
program-specific final regulations published elsewhere in this issue of 
the Federal Register.
    Comments: Several commenters opposed the suggestion in the preamble 
to the NPRM that the Departments plan to calculate an ``entered 
employment rate'' for participants who were not employed at the time of 
program entry, in addition to an employment rate for all program 
participants regardless of employment status at entry.
    Departments' Response: Upon consideration of the various issues, 
the Departments have not made changes to these joint regulations to 
require the collection and reporting of an entered employment rate. 
Instead, the Departments intend to utilize the individual records 
available for the WIOA title I, Wagner-Peyser Act Employment Service, 
and VR programs (i.e., the disaggregated data submitted by the States) 
to calculate such a measure for comparative purposes. The Departments 
can calculate this entered employment rate from the information that is 
required to be collected under sec. 116 of WIOA. Therefore, no 
additional reporting burden will be imposed on the States for these 
programs for this additional calculation at the Federal level.
    However, such entered employment rate calculations will not be 
possible at the Federal level for the AEFLA program under title II, 
because States report AEFLA program data only in an aggregate manner. 
Therefore, for the Departments to receive the data necessary to perform 
the entered employment rate calculation for the AEFLA program--and to 
produce such outcome data--would place an undue burden on title II 
programs.
    Comments: Most commenters opposed including the entered employment 
rate as a performance indicator. A number of commenters recommended 
that only the employment rate should be counted for those employed 
during the second quarter after exit because less document retrieval 
would be required, and there are other indicators that can show whether 
program participants are better off after enrollment. Other commenters 
suggested that the employment rate should include job seekers who were 
both employed and not employed at the time of participation because 
this will help determine how effective the system is at helping both 
the unemployed and those looking for career progression. A commenter 
added that it is difficult to capture information about employees in 
part-time or multiple-employer jobs.
    Several other commenters, however, supported calculation of an 
entered employment rate, particularly for youth programs.
    The Departments also received numerous comments in reference to 
calculating the second quarter after exit employment indicator as an 
``entered

[[Page 55836]]

employment measure,'' as defined in WIA. A commenter only would support 
an entered employment calculation if the Departments modified the 
regulation to require submission of individual records under title II.
    Departments' Response: The Departments have concluded that that the 
entered employment rate will provide a useful comparison of the public 
workforce system as it exists under WIA and WIOA. As stated above, the 
Departments will calculate an entered employment rate for the WIOA 
title I, Wagner-Peyser Act Employment Service, and VR programs using 
information collected through the WIOA Joint Performance ICR. This 
entered employment rate will not be a primary indicator of performance 
and, thus, it will not be a basis for sanctions. It is nonetheless 
useful information in evaluating the impact and efficacy of programs 
under WIOA. No change to the regulatory text is being made in response 
to this comment.
    Comments: A commenter opposed measuring the employment rate in the 
second quarter after exit instead of the first quarter, as done under 
WIA, because the commenter suggested that 2 quarters after exit is too 
late to determine unsubsidized employment. Another commenter agreed 
that it is simpler to locate and re-engage a customer after the first 
quarter performance measure rather than waiting an additional 3 months. 
A commenter added that the time frame of 6 months for an individual 
working in an integrated setting to achieve a competitive integrated 
employment outcome is too fixed and arbitrary, and the time period 
should be increased to 18 months if needed by the individual. Another 
commenter warned that using the second and fourth quarters after exit 
for performance measures will negatively impact States with a highly 
seasonal workforce.
    Departments' Response: The Departments acknowledge the concerns 
raised, but sec. 116(b)(2)(A)(i)(I) and (II) of WIOA specifically 
require that employment be measured at the 6- and 12-month mark (second 
and fourth quarters respectively). Given the specificity of the 
quarters to be measured for purposes of the performance accountability 
system, the Departments do not have the authority to implement a 
regulation inconsistent with the statutory requirement. No change to 
the regulatory text is being made in response to this comment.
    Comments: A commenter opposed the provisions in Sec. Sec.  
677.155(a)(1)(i) and 677.175(a) because of a concern that these 
provisions would ask educators to store personal data, such as social 
security numbers (SSNs), that the students may be unwilling or unable 
to share.
    Departments' Response: The Departments acknowledge the concerns 
about the retention of SSNs. The Departments concluded that, where 
available and possible, the use of wage records to fulfill reporting 
requirements is required in accordance with sec. 116(i)(2) of WIOA. 
Matching participant SSNs against quarterly wage record information is 
the most effective means by which timely and accurate data can be made 
available to the system. However, consistent with the Privacy Act, 
program services cannot be withheld if an individual is unwilling or 
unable to disclose a SSN. More specifically, program eligibility is not 
contingent on the provision of a SSN for any of the core programs.
    Nevertheless, the use of quarterly wage records is essential to 
achieve full accountability under the WIOA performance accountability 
system to identify high performing States and localities, and, if 
necessary, to provide technical assistance to help improve performance 
or sanction low performing States and localities. Matching participant 
SSNs against quarterly wage record information is the most cost-
effective means by which timely and accurate data can be made available 
to the system.
    In consideration of the circumstances articulated by commenters in 
responses to both the Joint WIOA NPRM and the proposed WIOA Joint 
Performance ICR, the Departments will allow the collection and 
verification of non-UI wage data in the absence of available UI wage 
data obtained through wage record matching, as discussed more fully in 
the preamble to Sec.  677.175 below. The Departments also intend to 
issue guidance and technical assistance regarding the collection and 
reporting of both quarterly wage record data and supplemental 
information. No change to the regulatory text is being made in response 
to this comment.
    Comments: A commenter remarked that the indicators in Sec.  
677.155(a)(1)(i) through (iii) would require an unprecedented degree of 
interdependency between VR and other State and Federal repositories of 
employment data. Another commenter recommended that, given that several 
of the primary performance indicators for the core programs, including 
VR, require reporting on the percent of exiters who are in 
``unsubsidized employment,'' the Departments should clearly define 
``unsubsidized employment.'' In particular, the commenter requested 
clarity regarding whether individuals in competitive integrated 
employment who receive supported employment services following VR case 
closure are considered to be in ``unsubsidized employment.''
    Departments' Response: The Departments acknowledge that the use of 
wage record data for the employment and median earnings indicators will 
require a greater level of cooperation between the State VR and UI 
agencies. The Departments are developing guidance to facilitate this 
process and also are developing a new State wage record interchange 
system data sharing agreement to aid in the exchange of wage record 
data to enable all core programs to meet the performance reporting 
requirements outlined in these regulations and sec. 116 of WIOA.
    The Departments have considered the comments regarding the VR 
program and ``unsubsidized employment.'' Section 116 of WIOA describes 
the primary performance indicators for all core programs, including the 
VR program. Three of the performance indicators pertain to the 
employment status or median earnings of participants who exit a program 
in unsubsidized employment. In response to the commenter regarding 
supported employment and unsubsidized employment, the Departments want 
to clarify that supported employment means, in general for purposes of 
the VR program, employment in competitive integrated employment or in 
an integrated setting in which the individual is working towards 
competitive integrated employment on a short-term basis. Once an 
individual achieves supported employment as an employment outcome under 
the VR program and exits that program (in other words, his or her VR 
record of service is closed), the individual typically receives 
extended services from another provider. Receipt of extended services 
after the VR record of service is closed does not affect the nature of 
the employment. Supported employment is considered unsubsidized 
employment because the wages are not subsidized by another entity. 
Individuals in supported employment at subminimum wage who are working 
on a short-term basis toward competitive integrated employment would 
not satisfy the definition of ``exit'' for performance accountability 
purposes.
    Comments: A commenter recommended that adult education providers 
receive student-level disaggregated wage or UI data for compliance and 
input into the Student Information System tracking and

[[Page 55837]]

monitoring application and that MOUs and guidance from the Departments 
must authorize access. Commenters concluded that States may need to use 
alternative methods for tracking employment outcomes for participants 
and need to be provided with options for databases and data sharing.
    Departments' Response: As mentioned above, the Departments are 
aware of the necessity for pathways to match wage record data to exit 
data in order to have complete outcome information on a program. The 
Departments reiterate their intent to issue guidance and facilitate a 
new data sharing agreement in order to facilitate wage record data 
matching required for all core programs in meeting their performance 
reporting requirements under WIOA. These agreements will be executed 
under the authority of WIOA sec. 116(i)(2) and consistent with all 
applicable Federal and State privacy and confidentiality laws and 
regulations. The Departments cannot require the sharing of individual 
level PII from wage records with entities that do not meet the 
requirements of 20 CFR part 603. It should be noted that the 
Departments are aware of and recognize that a variety of structures 
exist within States affecting levels of access to certain types of 
information required to comply with WIOA and efforts are underway to 
issue joint guidance on data access and how to obtain what is necessary 
to comply with WIOA reporting requirements.
    Comments: An individual expressed concern that the performance 
indicators in Sec.  677.155(a)(1)(i) and (ii) may act as a disincentive 
to making progress in further education and training after exit. A 
commenter asked for clarification about the calculations for employment 
in the second and fourth quarters after exit, inquiring as to the time 
period for measurement and the individuals to be included in the 
measure.
    Departments' Response: The Departments have considered commenters' 
concerns regarding the disincentive the employment performance 
indicators may create for furthering education and training after exit. 
However, sec. 116(b)(2)(A)(i)(I) of WIOA establishes a statutory 
requirement for a performance indicator measuring the percentage of 
program participants who are in unsubsidized employment during the 
second quarter after exit from the program. Subsequent guidance 
providing the time periods for measurement and other operational 
parameters pertaining to calculations will be issued by the 
Departments.
    Comments: In the preamble to the Joint WIOA NPRM, the Departments 
asked for public comment on whether and how to collect information on 
the quality of employment. A commenter suggested that while the 
Departments are proposing some metrics that attempt to assess the 
quality of employment, specifically mentioning median wage, retention, 
and training-related outcomes, the Departments should consider looking 
at quality of employment once the current performance indicators are 
implemented. Other commenters asserted that information on the quality 
of employment should not be collected because it is redundant, costly, 
and too subjective. Another commenter described several factors 
contributing to the quality of employment: Fair, attractive, and 
competitive compensation and benefits; opportunities for development, 
learning, and advancement; wellness, health, and safety protections; 
availability of flexible work options; opportunities for meaningful 
work; promotion of constructive relationships in the workplace; culture 
of respect, inclusion, and equity; and provisions for employment 
security and predictabilities. Other commenters added the importance of 
wages sufficient to sustain the worker and dependents, work-based 
training, changes in net income, worker input into schedules, and 
employment outcomes consistent with the consumer's education and 
employment goal. One of the commenters discouraged making inappropriate 
comparisons across programs.
    Departments' Response: The majority of commenters did not support 
collecting information on the quality of employment because it would be 
too subjective to collect consistently, overly burdensome, and costly. 
At this time, the Departments have decided not to include such a 
measure because it would be too burdensome to implement a measure that 
would have to be developed in the absence of an existing metric. The 
Departments will consider in the future whether there is a suitable 
mechanism to measure the quality of employment. No change to the 
regulatory text is being made in response to this comment.
    Section 677.155(a)(1)(ii) implements the second statutory indicator 
as described in sec. 116(b)(2)(A)(i)(II) of WIOA. This indicator is a 
measure of the percentage of program participants who are in 
unsubsidized employment during the fourth quarter after exit from the 
program. This section, which mirrors WIOA sec. 116(b)(2)(A)(i)(II), 
remains unchanged from what was proposed in the NPRM.
    Under WIA, the common measures included a retention measure based 
on individuals who were employed in the first quarter after exiting 
from WIA services, and who were also employed in the second and third 
quarters. WIOA does not have an equivalent to the WIA retention 
measure. Instead, WIOA requires a second--separate and distinct--
employment indicator for the fourth quarter after exit, which measures 
the employment rate in that quarter, regardless of whether those 
participants also were employed in the second quarter after exit from 
the program. In other words, a participant would be counted as a 
positive outcome for this indicator if he or she was employed in the 
fourth quarter after exit regardless of whether he or she was also 
employed in the second quarter after exit.
    Comments: In the preamble to the NPRM, the Departments sought 
comment on the advantages and disadvantages of collecting or reporting 
the employment retention rate. A commenter expressed support for a 
retention rate because it would be an important measure to know, for 
example, when comparing Job Corps to other youth programs. A few 
commenters reasoned that a retention rate would represent the quality 
of the initial job placement. Many commenters supported using a 
retention rate as long as programs would not be held accountable to 
negotiated goals for employment retention and States would not be 
required to capture, report, or calculate additional values. Some 
commenters opposed highlighting measures of employment retention 
because they would be confusing for the system and impede the 
transition from the measures in WIA to the indicators in WIOA. A 
commenter stated that there was no benefit to calculating this measure 
for WIOA title I programs; however, another commenter supported the 
proposed provision to calculate a retained employment rate in the 
fourth quarter after exit. An individual commented that if fourth 
quarter employment is not used as a retention measure, then the growth 
or reduction of the employment rate of the cohort can be used to 
evaluate occupational skills training, particularly for those who are 
underemployed.
    There were a few commenters who articulated a preference for the 
requirement under WIA. Commenters stated that employee retention is 
based on market conditions and dependent on factors such as company 
working conditions. Commenters also asserted that a retention measure 
should take into account a change or advancement

[[Page 55838]]

in occupation and quality or levels of work. A commenter remarked that 
by collecting or reporting the retention rate, the Departments could 
compare performance under WIOA with performance under WIA, but the 
commenter also suggested this was not necessary. A few commenters asked 
whether the individual had to be working with the same employer or at 
the same job between the second and fourth quarters. Other commenters 
recommended that employment retention should be measured regardless of 
whether the employer or job title has changed.
    Departments' Response: As stated above, retained employment rate 
would not be counted for the purpose of performance calculations and, 
thus, would not form the basis for sanctions because it is not among 
the primary performance indicators set forth in sec. 116(b)(2)(A)(i) of 
WIOA. The Departments have concluded that calculating a retained 
employment rate would provide useful information about the 
effectiveness of services that lead to sustained attachment to 
employment. The Departments will calculate a retained employment rate 
for participants who were employed at the second quarter after exit for 
informational purposes at the Federal level for those programs for 
which the Federal offices collect individual (i.e., disaggregated data) 
records (i.e., for the WIOA title I, Wagner-Peyser Act Employment 
Service, and VR programs). For the AEFLA program, for which ED does not 
collect individual (i.e., disaggregated) records, the Departments will 
not require States to calculate and report a retained employment rate 
in addition to an employment rate at the fourth quarter after exit.
    Comments: With regard to this indicator and partner program 
metrics, one commenter remarked that in States where TANF is a required 
one-stop partner, a performance metric that is limited to 1 year after 
exit from the program may not align with outcomes that are significant 
for TANF customers, resulting in positive outcomes of TANF employment 
services that will not be captured. Another commenter suggested that 
the fourth quarter employment information could be obtained more easily 
by the local DOL office rather than the State VR administration and as 
such, State VR agencies should not be required to report this data.
    Departments' Response: The Departments acknowledge the commenters' 
concerns regarding the capture of outcomes for TANF employment services 
and the difficulty some programs will face in the collection of the 
data necessary to calculate this indicator. However, if an individual 
is a participant in a WIOA core program as described in sec. 
116(b)(3)(A)(ii) of WIOA, sec. 116(b)(2)(A)(i)(II) of WIOA explicitly 
requires the Departments to measure the employment rate for that 
participant in the fourth quarter after exit, regardless of whether 
that individual is also a participant in TANF or any other required 
partner program. With regard to comments that maintain that VR agencies 
should not have to report data on the fourth quarter after exit due to 
issues of data access and availability, the Departments reiterate the 
intent to renegotiate the wage record data sharing agreements and issue 
joint guidance on accessing such data in order to meet the requirements 
laid out in WIOA sec. 116. The Departments strongly encourage the 
development, enrichment, and enhancement of partnerships at the State 
and local levels to leverage such connections in obtaining relevant 
performance information. No change to the regulatory text is being made 
in response to this comment.
    Section 677.155(a)(1)(iii) implements the third statutory indicator 
as described in sec. 116(b)(2)(A)(i)(III) of WIOA. This indicator is a 
measure of the median earnings of those program participants who are in 
unsubsidized employment in the second quarter after exit. This section 
remains unchanged from that proposed in the NPRM.
    Comments: Several commenters requested guidance on how to match 
wage records or collect employment-related data without the use of 
SSNs, because some States cannot collect SSNs and some students do not 
have them. A commenter suggested that the regulation should provide 
States with the authority to require SSNs as a condition of program 
participation. Another commenter asserted that WIOA only should require 
SSNs when customers are directly receiving some form of financial 
assistance. A commenter discussed the challenge of tracking the 
progress of individuals without SSNs. A commenter urged the Departments 
to provide ways for agencies to share long-term wage and employment 
information to enable the commenter to report on the indicators.
    Departments' Response: The Departments considered the concerns 
raised by commenters in light of the statutory provisions at WIOA sec. 
116(b)(2)(a)(1)(iii) and concluded that, where available and possible, 
the use of wage records to fulfill reporting requirements is required 
in accordance with sec. 116(i)(2) of WIOA. Matching participant SSNs 
against quarterly wage record information is the most effective means 
by which timely and accurate data can be made available to the system.
    Nevertheless, the Departments want to make clear that neither WIOA 
nor this Joint WIOA Final Rule allows or requires States to request or 
require SSNs as a condition of program participation or for receipt of 
any form of financial assistance. As such, program eligibility under 
WIOA is not contingent on the provision of a SSN. Additionally, 
depriving such an individual of service would be in violation of the 
Privacy Act of 1974, which establishes a code of fair information 
practices that govern the collection, use, dissemination, and 
maintenance of information about individuals contained in systems of 
Federal records. Specifically, sec. 7(a)(1) of the Privacy Act (5 
U.S.C. 552a Note, Disclosure of Social Security Number) provides that 
unless the disclosure is required by Federal statute, ``It shall be 
unlawful for any Federal, State, or Local government agency to deny to 
any individual any right, benefit, or privilege provided by law because 
of such individual's refusal to disclose his social security account 
number.'' In consideration of the circumstances articulated by the 
commenters in public comments received on both the Joint WIOA NPRM and 
the WIOA Joint Performance ICR, the Departments are allowing the use of 
supplemental information to augment the performance information 
obtained through wage record matching when necessary because critical 
information (such as a SSN) is not available. More information can be 
found in the preamble to Sec.  677.175 discussed in more detail below. 
The WIOA Joint Performance ICR also will provide for the collection of 
such supplemental wage information in those circumstances where 
quarterly wage records are not available or may not apply. The 
Departments also intend to issue guidance and technical assistance 
regarding the collection and reporting of both quarterly wage record 
data and supplemental information on employment-based outcomes.
    Comments: Some commenters supported the use of median earnings 
rather than average (mean) earnings, used under WIA, noting that 
averages can be skewed by a few numbers. One commenter stated that the 
indicator data should be collected at both the second and fourth 
quarters. Commenters suggested that the median earnings indicator 
should be based on all earnings and not just earnings related to the 
employment goals on the IPE for customers of VR services. With the

[[Page 55839]]

change from an average earnings calculation under WIA to a median 
earnings calculation under WIOA, one commenter asked how to arrive at a 
baseline for determining performance numbers. A few commenters said 
they would prefer reporting both average and median wages and highlight 
the high-income employment outcomes they have historically achieved. 
The commenters also asked how to best verify and include incomes for 
self-employment outcomes in this indicator.
    Departments' Response: WIOA sec. 116(b)(2)(A)(i)(III), which forms 
the basis for Sec.  677.155(a)(1)(iii), requires States to collect data 
regarding median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from a core program. 
The Departments have the authority to collect additional information 
that provides context for the primary indicators of performance. Such 
information is important to understand and manage public workforce 
programs. The Departments note that the primary indicators identified 
in Sec.  677.155 are the only indicators subject to the performance 
accountability sanctions. Additionally, pursuant to sec. 
116(b)(1)(A)(ii) of WIOA and Sec.  677.165, States may develop 
additional performance indicators which could include median earnings 
in the fourth quarter, as the commenter suggests.
    With regard to inclusion of all earnings and not just those 
earnings related to employment goals on the IPE for customers of VR 
services, the individual records collected under the RSA-911 can be 
used to determine median wages at exit. The Departments acknowledge 
that wages may vary over time and that median earnings at exit may not 
reflect median wages in the second and fourth quarters after exit. With 
regard to baseline data for median earnings, the Departments recognize 
that some programs may not have the historical data necessary to 
establish a baseline for median earnings while other programs can 
review the data collected under WIA to establish an approximate 
baseline for this indicator. The Departments acknowledge the concerns 
raised regarding such employment outcomes that would not be captured 
through a pure match against State UI wage records, such as self-
employment. The Departments will promulgate guidance regarding the 
collection and verification of supplemental employment information, as 
noted in the preamble to Sec.  677.155(a)(1)(iii) and more fully 
discussed in the preamble to Sec.  677.175. The Departments recognize 
there is a need to further clarify and provide guidance regarding 
transitioning to the WIOA performance indicators and intend to provide 
further clarification and guidance on the establishment of baseline 
data. No change to the regulatory text is being made in response to 
these comments.
    Comments: A few commenters recommended that the value of benefits 
received should be included in the participants' median earnings 
indicator. Commenters urged reporting of wages expressed as dollars per 
hour to reflect outcomes for part-time workers accurately.
    Departments' Response: Since the value of benefits clearly does not 
constitute earnings, adopting this recommendation would be inconsistent 
with the statutory provision calling for measuring earnings. Further 
information and clarification regarding the operational parameters of 
each indicator will be provided through both the WIOA Joint Performance 
ICR and program guidance. No change to the regulatory text is being 
made in response to these comments.
    Comments: A few commenters stated that individuals participating in 
an education or training program should be excluded from the 
calculation of this indicator. Commenters especially expressed support 
for not including youth who were enrolled in postsecondary education in 
the median earnings indicator because such youth would not necessarily 
have an income. Some commenters warned that as many individuals are 
simultaneously enrolled and employed part time, they tend to work fewer 
hours at lower hourly wage rates. In these instances, the earnings 
measure serves as a disincentive for programs to provide further 
education and training. One of the commenters added that exiting 
applicants with entrepreneurship training may not reflect well on the 
earnings measures because a new business often takes time to become 
profitable.
    Departments' Response: In response to the comments regarding 
exclusions from the median earnings indicator, sec. 
116(b)(2)(A)(i)(III) of WIOA requires the collection of data regarding 
the median earnings for all participants who exit the program and are 
employed during the second quarter after exit, regardless of whether 
the participants are simultaneously enrolled in an educational or 
training program. The Departments understand the commenters' concerns 
regarding the decreased likelihood of full-time employment while 
enrolled in an education or training programs, but the Departments 
expect the levels of performance for different programs will vary based 
on the results of the statistical adjustment of the performance levels 
for those programs. Furthermore, States will have the ability to 
disaggregate performance data in order to gain an understanding of the 
effect of including youth in performance outcomes. No change to the 
regulatory text is being made in response to these comments.
    Comments: Other individuals requested guidance on how to treat 
missing earnings information for particular participants and whether 
the participant may be excluded from the dataset used to determine the 
median earnings.
    Departments' Response: In State wage record systems, a missing wage 
means that no wages for an individual were reported by any firm 
residing in that State. The missing wage only indicates that the 
individual is not in employment covered by the quarterly wage records 
for performance accountability purposes. The Departments have 
determined that collection and verification of supplemental employment 
data is allowed for the performance indicators where a wage is not 
present in quarterly wage data. Supplemental information that is used 
to establish employment must include earnings information and be 
counted in the employment indicators and the median earnings indicator. 
This calculation is meant to represent the median quarterly wage of all 
individuals who are employed in the second quarter after exit, 
therefore, ``missing earnings information'' will not be included in the 
median earnings calculation. Further, the Departments have elected to 
permit non-wage record matches (supplemental information) in the 
performance calculations. More information about this is in the 
preamble to Sec.  677.175 discussed in more detail below. The 
Departments note that the use of supplemental information must be 
uniform across performance indicators. In other words, if a participant 
is included in the employment in second quarter after exit indicator 
based on information obtained through supplemental information, wage 
information must be collected and that data must also be used for the 
median earnings indicator. Likewise, if the collection and verification 
of employment and wages cannot be obtained for such a participant 
through either wage record matching or through supplemental wage 
information, then the participant cannot be included as being in 
unsubsidized employment during the second quarter and fourth quarters 
after exit, as measured by the

[[Page 55840]]

first and second performance indicators. The Departments will issue 
guidance regarding the collection and verification of supplemental 
employment information, as noted in the preamble to Sec. Sec.  
677.155(a)(1)(iii) and 677.175.
    Section 677.155(a)(1)(iv) implements the fourth statutory indicator 
as described in sec. 116(b)(2)(A)(i)(IV) of WIOA, subject to sec. 
116(b)(2)(A)(iii). This indicator is the percentage of program 
participants who obtain a recognized postsecondary credential or a 
secondary school diploma or its recognized equivalent, during 
participation in or within 1 year after exit from the program. The 
Departments are implementing Sec.  677.155(a)(1)(iv) as revised and 
described here. The regulation, consistent with the statutory 
requirements, limits inclusion of participants who obtain a secondary 
school diploma or its equivalent in the percentage counted as meeting 
the criterion by only including those participants who are employed or 
are enrolled in an education or training program leading to a 
recognized credential within 1 year after exit from the program. The 
Departments specifically sought comment on clarifications necessary to 
implement this indicator.
    Comments: Many commenters expressed concerns about including all 
program participants in the indicator and asked whether the indicator 
is limited to those in an education or training program.
    Departments' Response: The Departments revised Sec.  
677.155(a)(1)(iv) to clarify that this indicator only applies to those 
participants who are or were enrolled in an education or training 
program. The purpose of the indicator is to measure performance related 
to attainment of a recognized postsecondary credential or a secondary 
school diploma or its recognized equivalent. As such, it would not 
fulfill the purpose of this indicator to measure a State's performance 
on the credential attainment indicator against a universe of 
participants that includes individuals who are not in an education or 
training program through which they can obtain one of these 
credentials. The Departments decided that it is appropriate to include, 
for purposes of this indicator, only those participants enrolled in an 
education or training program. The Departments have excluded 
participants enrolled in work-based on-the-job training or customized 
training from this indicator because such training does not typically 
lead to a credential. This exclusion avoids creating a disincentive to 
enroll in work-based training. This section has been revised to clarify 
that only those participants in an education or training program are 
included in the performance calculations for this performance 
indicator, with the exception of those in on-the-job or customized 
training. The WIOA Joint Performance ICR also will explain that 
participants, for purposes of the credential rate performance 
indicator, are only those who are in an education or training program 
(excluding those in on-the-job training or customized training).
    During the review period leading to this Joint WIOA Final Rule, the 
Departments noted an error in the NPRM related to the statutory 
requirement that participants receiving a secondary school diploma or 
its equivalent be included in the percentage of participants meeting 
the performance indicator only if the participant is employed or 
enrolled in an education or training program leading to a recognized 
postsecondary credential within 1 year of exit from the program. The 
NPRM incorrectly stated that a participant who has obtained a high 
school diploma or its equivalent only is included in the indicator if 
the participant is employed or is enrolled in an education or training 
program leading to a recognized credential within 1 year of exit from 
the program. The Departments have corrected Sec.  677.155(a)(1)(iv) to 
make it consistent with WIOA's requirement so that a participant who 
obtains a secondary school diploma or its recognized equivalent only 
counts as having met the performance indicator if the participant is 
also employed or is enrolled in an education or training program 
leading to a recognized postsecondary credential within 1 year after 
exit from the program.
    Comments: A few commenters stated that they fully supported the 
proposed provision. Some commenters remarked that WIOA presents a great 
opportunity to learn more about the credentials being earned by 
participants in the workforce system. The commenters suggested that 
regulations on the reporting of credential attainment should strike a 
balance between incentivizing the collection of better data and 
unfairly penalizing States that do not have the ability to measure 
attainment of all types of credentials, and that the Departments should 
consider a phased approach for making licenses and certifications part 
of performance levels.
    Departments' Response: The Departments are not planning a phased 
implementation of the credential attainment indicator because such data 
generally were collected and reported under WIA. With regard to the 
full performance accountability provisions under WIOA sec. 116, which 
include the application of an objective statistical adjustment model 
and the implementation of sanctions, the Departments did modify Sec.  
677.190 to allow for a phased-in approach for assessing performance 
success or failure for the purposes of sanctions in order to provide 
programs time to collect and report at least 2 full years of data 
required to develop and run a statistical adjustment model on those 
indicators. More information can be found on this in the preamble to 
Sec.  677.190 below.
    Comments: In the preamble to the NPRM, the Departments sought 
comments on clarifications that would be necessary to implement the 
credential attainment indicator. Many commenters requested 
clarification about accepted credentials; how to collect and track 
credentials; the definitions of enrollment and postsecondary 
credential; the determination of ``within 1 year after exit'' from the 
program; the achievement of a secondary degree or General Education 
Diploma (GED); and whether the indicator applies to the VR program. A 
commenter recommended consideration of apprenticeships as postsecondary 
credentials, but other commenters suggested that employer-based work 
activities generally do not result in industry-recognized credentials 
but often result in permanent employment.
    Departments' Response: The definition of ``recognized postsecondary 
credential'' is found in sec. 3(52) of WIOA, stating ``a credential 
consisting of an industry-recognized certificate or certification, a 
certificate of completion of an apprenticeship, a license recognized by 
the State involved or Federal Government, or an associate or 
baccalaureate degree.''
    With respect to one comment, the Departments note that this 
definition includes completion of an apprenticeship. In addition, the 
statutory language of the credential attainment indicator in WIOA sec. 
116(b)(2)(A)(i)(IV) includes participants' attainment of a secondary 
school diploma or its recognized equivalent in performance 
calculations, subject to the requirement that those participants also 
are employed or in an education or training program leading to a 
recognized postsecondary credential within 1 year after exit from the 
program. The credential attainment indicator applies to all core 
programs, including the VR program, except for the Wagner-Peyser Act 
Employment Service program, as

[[Page 55841]]

specified in sec. 116(b)(2)(A)(i) of WIOA. To be counted as having met 
the indicator, a participant must have obtained a credential at any 
point during participation in the program or up to 1 year after exit 
from the program.
    The Departments will issue joint guidance that further illustrates 
what constitutes a recognized postsecondary credential for the 
credential rate indicator, including definitions for each type of 
credential. The Departments recognize burden concerns for tracking 
credential attainment. However, as noted, WIOA requires the collection 
of data for purposes of reporting on the credential attainment 
indicator for all core programs, except for the Wagner-Peyser Act 
Employment Service program. The Departments also will provide joint 
guidance and technical assistance for tracking and reporting with 
respect to this performance indicator.
    Comments: A few commenters expressed concern that the value of a 
secondary diploma would be reduced. One commenter suggested the 
regulations should clarify that employment is at any time during the 
year after exit. Commenters recommended including alternative, 
standards-based certificates of high school completion for students 
with disabilities among the credentials recognized for achievement of 
the credential attainment indicator. Commenters cautioned that this 
indicator may not be appropriate for students in English language 
acquisition programs, and one of these commenters requested that 
postsecondary credentials include completion of Career and Technical 
Education programs. A commenter encouraged the reporting of credential 
type in addition to the attainment of a credential.
    Departments' Response: The Departments do not agree that a 
secondary school diploma would be devalued because a participant's 
attainment of a secondary school diploma can be included in performance 
calculations for purposes of the credential attainment indicator. For 
those who obtain a secondary school diploma or its recognized 
equivalent, such participants must also be employed or in an education 
or training program leading to a postsecondary credential within 1 year 
after exit from the program. Such employment or enrollment in an 
education or training program only needs to be for some period during 
the 4 quarters after exit, not for the entire 1-year period after exit. 
The types of secondary school diplomas and alternate diplomas that 
would satisfy this performance indicator are those recognized by a 
State and that are included for accountability purposes under the ESEA, 
as amended by the Every Student Succeeds Act. The types of recognized 
equivalents, for those not covered under ESEA, that would satisfy this 
performance indicator are those recognized by a State. No change to the 
regulatory text is being made in response to these comments.
    Comments: Several commenters also expressed concern that State VR 
and other programs do not track whether a participant is enrolled in 
postsecondary education after program exit and that to do so would 
represent a significant burden. One of the commenters recommended that 
educational attainment data could be reported as it occurs by the 
appropriate State educational authorities and matched to participant 
data. A commenter suggested that sharing information should be 
mandatory between workforce agencies and secondary and postsecondary 
educational and other training institutions. One commenter stated that 
national access to postsecondary records and earnings not covered by UI 
wage records are needed for implementation of the provision.
    Departments' Response: The Departments recognize that, in cases 
where information was not previously collected or reported on, there is 
an initial burden associated with establishing such collections for 
reporting. However, the Departments have concluded that WIOA sec. 
116(b)(2)(A)(i)(IV), read in conjunction with sec. 116(b)(2)(A)(iii), 
requires that the indicator applies to all core programs and 
necessitates tracking enrollment and employment up to 1 year after 
exit. With regard to the comments raised concerning real-time tracking 
and matching of educational attainment, the Departments note that 
tracking and reporting on participants is an obligation of the program. 
A State educational authority would not necessarily have information on 
all participants enrolled in education programs, public or private, 
non-profit or for-profit. The Departments do not currently have the 
authority to mandate sharing of information between workforce agencies 
and secondary and postsecondary educational and other training 
institutions in the manner proposed. In regards to the comment about 
national access to postsecondary records and earnings, the Departments 
do not think that implementation requires national access because 
States have the authority to implement appropriate mechanisms, 
including data sharing agreements, at the State level to fulfill these 
reporting requirements. The Departments are developing guidance to help 
the States meet their obligations. No change to the regulatory text is 
being made in response to this comment.
    Comments: One commenter stated that participants who were in 
occupational training designed to lead to employment in a specific 
occupation and who do not achieve the credential because they have 
become employed in the occupation should be removed from the indicator. 
Some commenters suggested that the credential attainment indicator 
should not be calculated as the percentage of all participants who earn 
a credential, but the indicator only should calculate the percentage of 
participants receiving education or training services who earn a 
credential. A commenter recommended that the indicator only should 
apply to participants who were enrolled in a program leading to a 
postsecondary credential or secondary diploma. One commenter cautioned 
that many students are currently unavailable to the job market. Another 
commenter reasoned that cross-enrollment may lead to participants 
furthering their training in one program after leaving another, and 
this may not be completed within 1 year.
    Departments' Response: With respect to the comment that the 
credential attainment indicator should calculate only the percentage of 
participants receiving education or training services who earn a 
credential, the Departments reiterate, as noted above, that Sec.  
677.155(a)(1)(iv) has been revised, as contained in these final 
regulations, to address this concern. With respect to the comment that 
those who do not earn a credential because they become employed should 
not be included in the calculation for the credential attainment 
indicator, the Departments note that the reason that a participant 
fails to attain a credential, including participating in further 
training, is not a basis for excluding that participant from the 
performance calculations for the credential attainment indicator. No 
change to the regulatory text is being made in response to these 
comments.
    Comments: Commenters also suggested that the indicator would result 
in a strong disincentive to enroll participants in title I programs 
that would not result in an industry-recognized credential. An 
individual mentioned that the indicator may discourage participation in 
training programs that take several years to complete. Commenters also 
suggested that prospective workers enrolled in TANF and other hard-to-
serve populations may require more than 1

[[Page 55842]]

year to achieve positive outcomes and that States have varying 
requirements for attaining credentials.
    Departments' Response: The Departments note that because the 
credential attainment indicator is an exit-based indicator, there is no 
requirement for a participant to attain a credential within 1 year of 
enrollment in the program. There is no time limit on how long 
participants are in the program, and the measurement point for 
credential attainment is not until 1 year following exit from the 
program. If participants are in a program multiple years before 
attaining a credential they are still counted as a success in the 
indicator if the credential is attained during participation in the 
program or within 1 year of program exit. Thus, the Departments do not 
think that this indicator will discourage participation in training 
programs that take several years to complete. It should be noted that 
in instances where participants are enrolled in an education or 
training program that is not intended to result in a credential, the 
measurable skill gains indicator can capture progress made by 
participants.
    Section 677.155(a)(1)(v) implements the fifth statutory indicator 
as described in sec. 116(b)(2)(A)(i)(V) of WIOA. This indicator is a 
measure of the percentage of participants who, during a program year, 
are in education or training programs that lead to a recognized 
postsecondary credential or employment, and who are achieving 
measureable skill gains toward such a credential or employment. The 
Departments are defining measurable skill gains as documented academic, 
technical, occupational, or other forms of progress toward the 
credential or employment. After seeking and considering all comments on 
the measurable skill gains indicator proposed at Sec.  
677.155(a)(1)(v), the Departments added five measures of documented 
progress that specify how to show a measurable skill gain.
    Comments: The preamble of the NPRM identified six examples of 
standardized ways States could measure documented progress during 
participation in an education or training program, and sought public 
comment on these and other ways progress may be measured. Some 
commenters generally supported the examples as well as the preamble 
language that stated, ``Documented progress could include such measures 
as . . .'' because it provided the State with flexibility. Another 
commenter recommended a menu system similar to the proposed but 
recommended the progress measure be attached to participant 
characteristics rather than a funding stream. Other commenters asserted 
that it would be difficult to standardize measures and documentation 
across all core programs as proposed by the Departments, and there 
would be little benefit for the VR program where individuals often seek 
to maintain their current occupation. Another commenter recommended 
that Local WDBs should be required to write into their local plans an 
exhaustive list of the documented progress measures they will use.
    Departments' Response: The Departments noted the suggested ways in 
which the States could measure documented progress. The Departments 
disagree with commenters that recommend against standardized methods, 
across States and core programs, to measure documented progress for 
purposes of the measurable skill gains indicator. Section 116(b)(4)(A) 
of WIOA requires the Secretaries to issue definitions of the primary 
performance indicators in order to ensure national comparability of 
performance data. Defining the measurable skill gains indicator to 
include standardized methods to measure documented progress across 
programs helps to ensure this comparability. With regard to the VR 
program, although a State VR agency may provide services to individuals 
with disabilities that enable them to maintain their current 
occupation, the Departments note that the majority of individuals 
served by the VR program receive assistance in obtaining or advancing 
in employment. With regard to local plan content and the recommendation 
that it include ``an exhaustive'' list of the documented progress 
measures, the Departments encourage States and local areas to consider 
the service provisions and applicable progress measures in the 
development of their plans but have determined that it is beyond the 
scope of part 677 to regulate concerning such requirements. State and 
local plans are discussed more fully in 20 CFR part 679 (see DOL WIOA 
Final Rule, published elsewhere in this issue of the Federal Register). 
The Departments reiterate that States will be required to report on the 
measurable skill gains indicator as set forth in Sec.  
677.155(a)(1)(v), consistent with program guidance. No change to the 
regulatory text is being made in response to these comments.
    Comments: Many commenters strongly supported the fact that the 
proposed regulations recognize the intent of Congress to ``encourage 
local adult education programs to serve all low-skilled adults,'' and 
stated that the measurable skill gains indicator will help to achieve 
that goal. One commenter suggested that measurable skill gains should 
be the only indicator of performance required for students functioning 
below the ninth grade level.
    Departments' Response: The Departments do not agree with the 
suggestion that the measurable skill gains indicator be the only 
indicator of performance for students functioning below the ninth grade 
level since WIOA requires that the indicators of performance apply 
across all core programs in order to assess the effectiveness of States 
and local areas in achieving positive outcomes for participants served 
by those programs.
    There is no basis for a blanket exclusion from all performance 
indicators except the measurable skill gains indicator for participants 
functioning below the ninth grade level. Such participants have the 
potential to receive services under a program, be included in 
performance calculations, and be counted as having met one of the other 
indicators. Therefore, unless a student functioning below the ninth 
grade level is otherwise appropriately excluded from participants 
included in the performance calculations for a particular indicator 
under Sec.  677.155(a)(2), the Departments will not categorically 
exclude such students functioning below the ninth grade level from the 
other five indicators of performance. No change to the regulatory text 
is being made in response to these comments.
    Comments: The majority of commenters endorsed continued use of 
educational functioning levels (EFLs) and encouraged eventual 
refinement of EFLs or the development of other potential measures that 
can document participants' progress toward educational goals. Other 
commenters expressed concern because in high intensity programs, 
students may advance two or more EFLs; therefore, the proposed language 
would not capture the full impact of adult education instruction. The 
commenters recommended that the requirement should be ``the achievement 
of the EFLs of the participant.''
    Departments' Response: As set forth in the preamble of the NPRM, 
the first standardized way States could measure and document 
participants' measurable skill gains is the documented achievement of 
at least one EFL of a participant in an education program that provides 
instruction below the postsecondary level. The Departments agree with 
comments that supported the continued use of EFLs to measure progress 
towards the measurable skill gains indicator. The Departments also

[[Page 55843]]

recognize that in some cases, students may advance more than one EFL 
during a program year. However, for purposes of the performance 
calculations, programs will be permitted to report only one EFL 
measureable skill gain per a participant's exit from the program 
through the WIOA Joint Performance ICR. This means that if a 
participant exits a program more than once in a program year and 
attains an EFL measureable skill gain prior to exiting each time, then 
the program will be able to report, for performance calculation 
purposes, more than one EFL measureable skill gain for the participant 
in a program year. In so doing, participants, for purposes of 
performance calculation purposes with respect to the measureable skill 
gains indicator, will be treated the same as for any other performance 
indicator. Having said this, through the WIOA Joint Performance ICR, 
the Departments will require States to provide unique identifiers for 
participants. Thus, there will be a unique count of participants under 
the core programs regardless of how many times the participant exits 
the program (see discussion in this preamble regarding the definition 
of ``exit'' in Sec.  677.150(c) above). The Departments have added 
Sec.  677.155(a)(1)(v)(A) to include ``documented achievement of at 
least one educational functioning level of a participant receiving 
instruction below the postsecondary education level,'' as one way of 
measuring documented progress under the measurable skill gains 
indicator. Options for measuring educational functioning level gain are 
described in the WIOA Joint Performance ICR.
    Comments: A commenter recommended that attainment of a high school 
diploma not be included as one of the measures of documented progress 
for purposes of the measurable skill gains indicator.
    Departments' Response: The Departments disagree with the assertion 
and consider attainment of a secondary school diploma a valuable 
measure of progress and have therefore revised Sec.  
677.155(a)(1)(v)(B) to include ``documented attainment of a secondary 
school diploma or its recognized equivalent.''
    Comments: Commenters stated that a lower requirement of six credit 
hours per semester better reflects the capability of adults who must 
work to provide for their families. Another commenter suggested that 
the measure should be expanded to include a demonstration of semester-
to-semester retention, which is a key indicator of academic success.
    Departments' Response: As proposed in the preamble of the NPRM, the 
third standardized way States could measure and document participants' 
measurable skill gains is through a transcript or report card for 
either secondary or postsecondary education. The Departments had 
proposed a measure requiring a transcript or report card for 1 academic 
year or for 24 credit hours. The Departments agree with the concern 
that a transcript for 1 academic year or 24 credit hours is too onerous 
for part-time students and have changed this measure to require that 
the transcript or report card reflect a sufficient number of credit 
hours to show a participant is achieving the State's academic 
standards. The Departments' current standard for a sufficient number of 
credit hours is at least 12 hours per semester or, for part-time 
students, a total of at least 12 hours over the course of 2 completed 
consecutive semesters during the program year that shows a participant 
is achieving the State unit's academic standards. The Departments have 
added Sec.  677.155(a)(1)(v)(C) to read ``secondary or postsecondary 
transcript or report card for a sufficient number of credit hours that 
shows a participant is meeting the State unit's academic standards.'' 
Clarification regarding the progress measures and the specific 
requirements for collection and reporting will be provided through the 
Departments' WIOA Joint Performance ICR, Department-specific ICRs, and 
programmatic guidance.
    Comments: A commenter suggested that the Joint WIOA Final Rule 
identify progress reports from training providers as an acceptable 
measure of documented progress for purposes of the measurable skill 
gains indicator.
    Departments' Response: As proposed in the NPRM, the fourth 
standardized way States could measure and document participants' 
measurable skill gains is through a satisfactory or better progress 
report towards established milestones from an employer who is providing 
training. Such milestones to be achieved could include completion of 
on-the-job training (OJT) or completion of 1 year of an apprenticeship 
program. The Departments agree with the commenter that progress reports 
from training providers as to achievement of established milestones 
also could be acceptable and note that when participants are enrolled 
in training programs, the training providers are in the best position 
to report on participants' progress toward established milestones. The 
Departments emphasize that rigor is expected in determining whether a 
progress report is satisfactory, whether from an employer or a training 
provider. The Departments have added Sec.  677.155(a)(1)(v)(D) to 
include ``satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training.''
    Comments: Several commenters requested information on how progress 
shall be measured under the VR program.
    Departments' Response: With regard to the VR program, there may be 
several methods for obtaining documentation related to measuring 
progress. For example, documentation such as standardized reports of 
progress from training providers, provided to the State VR agency, may 
be used to substantiate progress. To adequately document progress, 
programs should identify appropriate methodologies based upon the 
nature of the service being provided. For example, VR agencies 
frequently use grade reports from postsecondary educational 
institutions to document a student's progress toward achieving a 
degree. For OJT, where the individual is being trained on site by 
either the employer or by a vendor, VR Counselors receive regular 
training reports that include the OJT milestones completed as the 
individual masters the job skills required. More broadly, for 
apprenticeship programs, the milestones are already incorporated into 
the process. The steps required to complete the apprenticeship and the 
increases in pay that occur can be used to document progress.
    Comments: Some commenters recommended that successful completion of 
an exam, as recommended in the preamble of the NPRM as a way of 
measuring documented progress, be understood as achieving a passing 
score on the exam.
    Departments' Response: As proposed in the preamble of the NPRM, the 
fifth standardized way States could measure and document participants' 
measurable skill gains is through successful completion of an exam that 
is required for a particular occupation, or through progress in 
attaining technical or occupational skills as evidenced by trade-
related benchmarks such as knowledge-based exams. The Departments agree 
with the commenters that this measure documenting a measurable skill 
gain should require that a participant achieve a passing score on an 
exam and thus have added Sec.  677.155(a)(1)(v)(E), which requires 
``successful passage of an exam that is

[[Page 55844]]

required for a particular occupation, or progress in attaining 
technical or occupational skills as evidenced by trade-related 
benchmarks such as knowledge-based exams.'' Joint guidance will be 
issued about what qualifies as a trade-related benchmark to show 
documented progress for purposes of the measurable skill gain 
indicator.
    Comments: Commenters expressed concern about another measure of 
documented progress proposed in the preamble to the NPRM--measurable 
observable performance based on industry standards. Commenters 
indicated that it would be very challenging to identify a way to 
document this type of gain.
    Departments' Response: The Departments agree with the commenters' 
concerns that it would be difficult to articulate a method for 
documenting progress using measurable, observable performance based on 
industry standards. The Departments did not include this measure in 
Sec.  677.155(a)(1)(v).
    Comments: Commenters recommended using other measures of progress 
including achievement of passing grades, completion of high school 
equivalency (HSE) subtests, receipt of postsecondary education or 
training, completing some adult diploma requirements, and obtaining 
U.S. citizenship to document measurable skill gains. A commenter 
suggested that employment-related indicators of skill gains, such as 
employment in the participant's program of study, advancement in job 
titles, and performance-based wage increases, recognize that skills 
attainment correlates with career progression. One commenter 
recommended that a high school credential from another country should 
be treated as sufficient in meeting the requirement. Some commenters 
suggested that the metric should measure completion of something easily 
definable such as a degree, certification, or entrance into a program. 
A commenter asked the Departments to measure interim progress, 
including documented gains in achieving ``soft skills,'' such as 
program attendance, timely arrival, gains in proper behavior, and 
creating an IPE. Another commenter asked whether proceeding through a 
prescribed program toward a secondary degree would be considered 
``achieving measurable skill gains.'' One commenter cautioned about 
subjectivity in deciding positive gains. One commenter stated that the 
measurement should be simply ``making progress--yes or no.''
    Departments' Response: The Departments reviewed all of the 
additional suggestions for measurement of documented progress under the 
measurable skill gains indicator and concluded that none of the 
additional suggestions would be included in the Joint WIOA Final Rule 
or WIOA Joint Performance ICR. The Departments concluded that 
subjectivity should not be a part of determining skill gains and have 
included five objective progress measures that States may use in 
implementing the measurable skill gains indicator of performance. These 
indicators are sufficiently broad as to provide flexibility that 
addresses some of the commenters' concerns, while maintaining rigor. 
Several of the measures suggested by commenters (e.g., achieving soft 
skills) do not share the same level of rigor or objectivity. The 
Departments will provide further clarification, definition, and 
specification in the WIOA Joint Performance ICR.
    Comments: Another commenter suggested the Departments empanel 
expert working groups to assist in developing measures of skill gains. 
A commenter suggested that regional or local workforce boards be 
allowed to assign the WIOA defined skill gains indicator to particular 
education or training programs based on program curriculum and goals. 
One commenter recommended allowing the Local WDB to define industry-
related credentials or eliminating work-based learning from the 
measurable skill gains indicator. Another commenter agreed that work-
based training activities, such as on-the-job training, should be 
exempt from this indicator.
    Departments' Response: The Departments acknowledge the various 
points raised with regard to objective measures that are implemented in 
a rigorous manner. The Departments have, through the WIOA Joint 
Performance ICR, jointly coordinated the development of the underlying 
calculations, specifications, and operational definitions of the 
documented progress measures under this indicator. This will ensure 
measures uniformly are implemented in a rigorous and objective way. In 
addition to the WIOA Joint Performance ICR, each core program will 
define through guidance, the types of skill gains that are appropriate 
for the services provided and whether the program is an education or 
training program that leads to a recognized postsecondary credential or 
employment. For example, work experience in the WIOA title I youth 
program may not be considered an education or training program and, 
therefore, the measurable skill gains indicator may not apply to those 
participants engaged only in work experience under the WIOA title I 
youth program. More guidance regarding education and training programs 
is provided in 20 CFR part 680 (see DOL WIOA Final Rule published 
elsewhere in this issue of the Federal Register). No change to the 
regulatory text is being made in response to these comments.
    Comments: Commenters asked for specificity and guidance about the 
``comparator group/cohort;'' how to most efficiently collect 
documentation (such as confirmation by phone or email); industry-
specific recognized credentials; how time intervals would be used for 
skill gains; how the measure applies to shorter-term training programs 
that are completed within 1 year; how different measures could be used 
for different trainings; whether Indian and Native American youth are 
included in this indicator; and definitions and timing regarding when a 
measurable skill gain must have occurred in order to be counted.
    Departments' Response: The Departments recognize that the 
regulation poses broad parameters for these indicators. Many concerns 
and requests for clarity by commenters were identified and will be 
explained within the WIOA Joint Performance ICR or Department-specific 
ICRs, which are designed to operationalize such aspects of collection 
and reporting as time periods, specific calculations, details regarding 
who is included, and where to record positive outcomes. In addition to 
the WIOA Joint Performance ICR, the Departments will provide further 
guidance on acceptable source documentation, and the definitions 
recommended by commenters. In addition, the Departments will provide 
program-specific guidance for programs, such as the Indian and Native 
American youth program, on the application of performance indicators in 
their respective regulations and in guidance.
    Comments: In the preamble to the NPRM, the Departments sought 
comments on whether time intervals should be required when implementing 
the measurable skill gains indicator and if so, what time intervals 
might be. One commenter suggested that specific time intervals should 
not be required because of variation in services across and within core 
programs and because individuals at different levels take different 
amounts of time to show gain. Other commenters agreed that a time 
requirement should not be used for determining measurable skill gains. 
Certain commenters, however, recommended that time intervals be 
established in a manner that is flexible

[[Page 55845]]

enough to meet the varying durations of service across core programs, 
from 1 month to an academic year, but those time intervals should not 
adversely affect the provision of services based on the particular 
needs of a customer. One commenter stated that, for youth under WIA, 
the skill gains and literacy/numeracy gains are effective for a 
participation year. However, if a customer enrolls in education or 
training toward the end of a program year, it will result in a negative 
outcome due to the customer not having enough time to obtain the skill 
gain before June 30. This commenter recommended that any participants, 
adult or youth, who were enrolled less than 90 days prior to the 
program year end, and are continuing services into the next program 
year be allowed to continue as an active participant, and considered 
enrolled in Year 1, and in progress in Year 2, with expected completion 
in Year 2. Another commenter supported a minimum program duration 
threshold, and suggested that measurable skill gains generally should 
not be available to programs that are shorter than sixteen weeks. 
Another commenter suggested a time period of measurement set at the 
first anniversary of enrollment and each year thereafter.
    Departments' Response: The Departments considered whether a minimum 
time threshold should be incorporated into the measurable skill gains 
indicator. The Departments have concluded that, given the diversity of 
participant needs and program services, imposing a time period by which 
progress is to be documented would be somewhat arbitrary and difficult. 
Such practice could result in excluding a number of participants from 
performance accountability reporting requirements, even if those 
participants would achieve a gain under one of the measures of 
progress. The Departments recognize that participants enrolling late in 
the program year may not have enough time to achieve a measurable skill 
gain prior to the end of the first program year, and the Departments 
recognize this could be perceived as negatively impacting performance. 
However, the negotiation process can and should take into account 
enrollment patterns and lower baseline data when setting targets for 
the measurable skill gains indicator. The Departments are concerned 
about incentivizing behavior that discourages service providers from 
enrolling disconnected youth in particular when they first approach 
programs, or that purposefully attempts to focus service on individuals 
who are more likely to obtain a positive outcome. The Departments 
emphasize that programs must not delay enrollment or prohibit 
participants from entering a program late in the program year. All 
participant outcomes, regardless if achieved at the end of the 
reporting period in which they enrolled or in the next reporting 
period, count as positive outcomes for the program. No change to the 
regulatory text was made in response to these comments.
    The Departments will define, through program guidance, the types of 
services and trainings that constitute ``an education or training 
program that leads to a recognized postsecondary credential or 
employment,'' applicable for each of the core programs. All 
participants who enrolled during a program year in an education or 
training program that leads to a recognized postsecondary credential or 
employment are counted each time the participant exits the program 
during a program year.
    Comments: In the preamble of the NPRM, the Departments also asked 
for comments on whether the negotiated levels of performance for this 
indicator should be set at the indicator level or the discrete 
documented progress measure (e.g., attainment of high school diploma) 
level. Setting the negotiated levels of performance at the indicator 
level would aggregate results for all documented progress measures 
(i.e., achieving any or several of measurable skill gains would be 
recorded as a success). Setting the negotiated levels of performance 
based on discrete documented progress measures would separately set 
targets for each indicator and each measurable skill gains. The vast 
majority of these commenters preferred that the performance targets for 
this indicator be set at the indicator level rather than at the 
documented progress level. Other commenters, however, suggested that 
standardization is more easily achieved by linking the target to a 
documented progress measure level, stating that targets based on 
documented progress, versus an indicator, may be easier to collect. 
Another commenter suggested that performance targets should include 
both indicator and documented progress measures.
    Departments' Response: After considering the comments received, the 
Departments agree with the majority of commenters that supported 
setting the target (or the adjusted level of performance) at the 
indicator level. The Departments have concluded this will provide a 
more streamlined and user-friendly approach to using progress measures 
and will result in a more uniform application of the measurable skill 
gains indicator. Guidance on negotiating adjusted levels of performance 
that contains specific information about setting targets for Measurable 
Skill Gains will be issued by the Departments. No change to the 
regulatory text is being made in response to these comments.
    Section 677.155(a)(1)(vi) implements the sixth statutory indicator 
as described in sec. 116(b)(2)(A)(i)(VI) of WIOA, subject to sec. 
116(b)(2)(A)(iv). This indicator measures program effectiveness in 
serving employers. Under WIOA, the Departments must consult with 
stakeholders and receive public comment on proposed approaches to 
defining the indicator. As part of this requirement, in addition to 
seeking public comment through the NPRM and the WIOA Joint Performance 
ICR, the Departments previously sought public input on performance 
indicators generally and on the business indicators specifically 
through several avenues, including a town-hall meeting that addressed 
all of the primary indicators, a town-hall meeting convened with 
employers, and additional town-halls and webinars on WIOA across the 
country as well as consultations with State Administrators for AEFLA 
programs and VR stakeholders. As described more fully below, the 
Departments received many comments regarding the three proposed 
definitions of this indicator. After considering the responses received 
through all venues, the Departments are initially implementing this 
indicator in the form of a pilot program to test the rigor and 
feasibility of the three proposed approaches, and to develop a 
standardized indicator. The performance indicator for effectiveness in 
serving employers will not be included in sanctions determinations 
until the standardized indicator is developed.
Proposed Approaches to Measuring Employer Satisfaction
    Comments: The preamble to the NPRM described three approaches to 
measure employer satisfaction (i.e., effectiveness in serving 
employers). In the first approach, States would use wage records to 
identify whether or not a participant matched the same FEIN in the 
second and fourth quarters. Many commenters opposed this approach 
because participants may have relocated, joined the military, or found 
a better job, although these circumstances do not mean the employer was 
not satisfied. They also opposed this approach because the mere fact 
that an individual is employed with the same employer does not mean 
that

[[Page 55846]]

the employer is satisfied. Many other commenters, however, favored the 
approach because it would be the least disruptive to employers. A 
commenter agreed that employee retention can be measured, but that 
measure does not take into account the quality of the placement. 
Commenters suggested piloting a limited demonstration using existing 
data to determine if the variability in the types of occupations in a 
particular local area has a more profound impact on retention than the 
value added by the services provided under a WIOA program, and to 
determine whether there is a correlation between retention and 
effectiveness.
    The second approach to define this indicator would measure the 
repeated use rate for employers' use of the core programs. Many 
commenters did not support this approach because some employers may not 
have many hiring needs during a program year, or an employer may have a 
need but the program has no students who are ready to graduate and go 
to work. Also, this approach would encourage programs to protect their 
individual employer relationships rather than working collaboratively 
through sector partnerships. Several commenters recommended use of this 
measure along with the number of workers employed by businesses 
participating in sector partnerships. Other commenters supported the 
approach because it represents increased use, retention, or growth of 
business engagement, although some commenters would use the number of 
workers employed, not the number of businesses served. The preamble to 
the NPRM specifically sought comments on how States could capture this 
data, the feasibility of capturing and reporting this data, and queried 
whether this indicator would measure the efficacy of services provided 
to employers. The Departments received both positive and negative 
comments regarding this approach.
    The third approach would use the number or percent of employers 
that are using the core program services out of all employers 
represented in an area or State served by the system (i.e., employers 
served). A large proportion of commenters opposed this approach and 
warned that this saturation method only would work if all participants 
come from the local market area; for a number of programs, it is 
usually not the case that most of the participants come from the local 
market area. Also, the commenters asserted that this option would focus 
too much on the breadth of employer involvement, rather than the depth 
or quality. Some commenters supported this approach when used with 
another approach. The preamble to the NPRM specifically sought comments 
on how States could capture this data, the feasibility of capturing and 
reporting this data, and queried whether this indicator would measure 
the efficacy of services provided to employers. The Departments 
received both positive and negative comments regarding this approach.
    Departments' Response: After further review, analysis, and 
consideration of public response, the Departments have concluded that 
too little is known with regard to the validity and reliability of each 
of the proposed approaches. In concurrence with multiple commenters, 
the Departments have concluded that the retention method, using wage 
record FEIN matches to be the least burdensome method to employers for 
measuring the quality of service provided to employers given that the 
outcome is concluded solely by the use of wage-match data, which 
prevents outside factors from influencing the way success is measured 
within the reporting system. The Departments concluded, however, that 
there was not enough evidence that this point of measurement would 
encompass the intent of this indicator. Therefore, the Departments have 
proposed a pilot allowing all three approaches, and any additional 
measure that the Governor may establish relating to services for 
employers, with the intent of assessing each approach for its efficacy 
in measuring the effectiveness in serving employers.
    The Departments have included these approaches in the WIOA Joint 
Performance ICR and will require each State to choose two of the three 
approaches set out in the NPRM as well as any additional measure that 
the Governor may establish related to services to employers, with 
results to be included in the first WIOA annual report due in October 
2017. This approach provides States flexibility in selecting the 
measures that best suit their needs, while providing partner Agencies 
the opportunity to evaluate States' experiences in using these measures 
during PY 2016 and PY 2017, and additionally allows the Departments to 
obtain employer feedback regarding the extent to which these indicators 
measure effectiveness in serving employers. The Departments will 
evaluate State experiences with the various indicator approaches and 
plan to use the results of that evaluation to identify a standardized 
indicator that we anticipate will be implemented no later than the 
beginning of PY 2019. In this process, the Departments intend to engage 
the National Association of State Workforce Agencies (NASWA) and the 
States to inform the evaluation design; communicate how States fare in 
operationalizing the measures; and contribute to the development of 
technical assistance activities and tools.
    The Departments acknowledge the dissatisfaction expressed by 
commenters with using each of the NPRM proposed measures as a sole 
indicator of successful service to employers and agree with comments 
discussing the utility of piloting multiple alternative measures to 
ensure that States are being required to report on employer 
satisfaction in the most effective manner. As such, the Departments 
will work to implement a pilot program, the details of which will be 
further delineated in joint Departmental guidance. The Departments have 
opted to implement a pilot program using all of the approaches in order 
to assess the States' experiences with these and evaluate the efficacy 
of such approaches in measuring this construct. Further guidance 
regarding the pilot program will be provided.
Effectiveness in Serving Employers across Programs
    Comments: The NPRM also sought comment on using effectiveness in 
serving employers as a shared indicator across programs, as many 
employers are served by multiple programs. Many commenters supported 
using effectiveness in serving employers as a shared indicator across 
programs because it would foster collaboration rather than competition 
among the core programs. One commenter stated that using effectiveness 
in serving employers as a shared indicator would mitigate concerns 
regarding measuring effectiveness in serving employers for the Wagner-
Peyser Act program. Commenters stated that there are too many 
indicators already and a single metric should suffice. Commenters also 
suggested that the Departments should engage the employer community, 
such as using a short survey or task force, to discover methods of 
measuring effectiveness. One commenter, however, opposed employer 
surveys and burdensome employer contacts. A group of commenters 
recommended that agency directors conduct a study on how effectively 
workforce development aligns with business needs. Others favored having 
States create and submit for approval an indicator that meets the 
State's current needs, including targeted sectors and partner 
collaboration. A commenter suggested that the workforce system offer 
one point of contact or

[[Page 55847]]

``account executive'' to each employer. However, one commenter opposed 
the use of a shared indicator, and recommended measuring at an 
individual program level in order to measure the impact on each core 
program.
    One commenter developed a novel approach for measuring 
effectiveness and provided details in a concept paper, which was 
expressly supported by some commenters. The approach includes a 
customizable point-menu system that would award varying levels of 
points to WDBs based on the degree of intensity and the value of 
services provided. Services earning high points would clearly reflect 
deeper relationships with employers and activities that are the result 
of longer-term relationships. The Departments will consider this 
approach in the course of the pilot program. A separate commenter 
suggested using tiers to measure employer engagement with concrete 
examples. The Departments also will further consider this suggestion of 
a tiered approach.
    The preamble to the NPRM also requested feedback regarding whether 
a single metric for this indicator would sufficiently capture 
effectiveness in serving employers or if this indicator should 
encompass a combination of metrics, as well as how these metrics could 
most effectively be combined. A number of commenters expressed concern 
or disinterest with using a single metric to measure effectiveness in 
serving employers.
    A few other commenters who expressed support for using multiple 
metrics for this indicator recommended a list of core functions to 
indicate the effectiveness in serving employers, with the list of core 
functions including strategic planning with business to identify 
business needs; outreach and recruitment; hiring; retention; training, 
consultation services, and other customized services; and business 
customer satisfaction with services provided. One commenter added 
preparing workers for in-demand industries and occupations and the 
percentage of participants who earn an industry credential. Some 
commenters also mentioned fill rate--the number of job seekers placed 
against the number of open job orders in the system--and employer 
referrals. A few commenters stated that there is insufficient clarity 
on the employer satisfaction indicator and the meaning of 
effectiveness.
    Departments' Response: The Departments have concluded that 
implementing the effectiveness in serving employers indicator as a 
shared indicator across all core programs to be the most useful 
approach based on the collaborative nature of this method and the 
overwhelming majority of commenters who were in favor of this option. 
In doing so, States and local areas are better positioned to provide a 
single point of contact to each employer, making it easier for the 
differences between specific core programs to become invisible and 
enable the programs to serve together as a unified front. Measurement 
at the program level would be contrary to WIOA's efforts to streamline 
reporting across programs, reduce burden on employers, and decrease the 
likelihood of duplicated employer counts. In keeping with such efforts, 
the Departments have opted not to require employers to fill out any 
additional surveys. The Departments had, however, prior to the 
publication of the NPRM, engaged in multiple meaningful exchanges with 
the employer community to receive feedback on the most appropriate ways 
to assess the utility of the public workforce system for businesses.
    In addition, through the implementation of the previously mentioned 
pilot program, the Departments will seek to discover the best methods 
for assessing how well workforce development aligns with business 
needs. There were a number of noteworthy measures suggested by State 
workforce agencies and nonprofit organizations, some of which will be 
included in the pilot, giving the Departments an opportunity to review 
some of the alternative methods that would help States to improve 
current relationships and establish strong future relationships with 
local employers, such as using the fill rate, employer referrals, the 
level of employer engagement, allowing any additional measure that the 
Governor may establish relating to services for employers, 
participation in targeted sector partnerships, the inclusion of 
recruitment, training, and other pre-hire services as part of the 
performance metric, using tiers to measure employer engagement, and the 
use of already existing electronic, or wage record data along with a 
myriad of other valuable recommendations. The Departments acknowledge 
the value of using a combination of metrics as pointed out by a number 
of commenters and will seek to delve further into the benefits of such 
an option through the use of the upcoming pilot program. No change to 
the regulatory text is being made in response to these comments.
    Comments: One commenter stated that the provision is not applicable 
to the INA program because it is not a core program. Another commenter 
requested that the measurement of effectiveness of serving employers be 
eliminated as a measure for Adult Education and Literacy because the 
program already works closely with Career and Technical Education, the 
workforce system, and industry to ensure that it is providing programs 
and services to meet the needs of employers. A commenter recommended 
that any finalized measure not allow a program to be penalized because 
of factors beyond its control. Another commenter requested information 
about feedback obtained at the stakeholder meetings that involved 
employer partners.
    Departments' Response: The Departments recognize that the INA 
program is not a core program. However, WIOA sec. 116(e)(5) requires 
that the performance accountability indicators (which include 
effectiveness in serving employers) be used to assess performance, and 
WIOA sec. 116(h)(2) requires agreement on the adjusted levels of 
performance for all of the primary indicators be reached between the 
Secretary of Labor and the entity carrying out activities under this 
section.
    In response to the comment requesting that the measurement of 
effectiveness of serving employers be eliminated as an indicator for 
the AEFLA program, the Departments have no authority to exempt AEFLA 
programs from the indicator regarding effectiveness in serving 
employers. WIOA sec. 116(b)(2)(A) explicitly requires that the State 
primary indicators of performance for the AEFLA activities authorized 
under title II, as well as for other specified programs and activities, 
shall include indicators of effectiveness in serving employers. In 
response to concerns about programs being required to account for 
factors beyond their control, the Departments refer to Sec.  677.170 
and the associated discussions regarding factors to be considered when 
coming to agreement on negotiated levels of performance, including the 
objective statistical model. The Departments have provided a summary of 
comments raised at stakeholder meetings and during the regulatory 
process above. No change to the regulatory text is being made in 
response to these comments.
    Comments: Commenters expressed a great deal of concern regarding 
the implementation of an indicator that would likely cause undue 
penalty.
    Departments' Response: The Departments note that this concern 
weighed heavily in the decision to allow employee retention to serve as 
a means of measuring employer satisfaction. The Departments also note 
that concerns regarding penalties are an issue that will

[[Page 55848]]

be greatly ameliorated with the use of benchmark target setting via the 
statistical adjustment model. The statistical adjustment model also 
will address issues such as size discrepancies across States and local 
areas, labor shortages, and other external factors and provide 
objective, realistic goals for improvement. Application of the 
statistical model to both set targets and apply sanctions is most 
effective when assessing quantitative metrics, with the use of 
qualitative metrics making both efforts exponentially more complex. It 
is for this reason that, although the Departments understand the 
significance of using such methods to evaluate quality service to 
employers, more qualitative metrics were not included as part of the 
effectiveness in serving employers indicator.
    As previously stated, a great deal of discussion regarding these 
and other proposed methods for measuring this indicator took place 
during previous webinars and town halls with State workforce agencies, 
members of the employer community, and other stakeholders. The outcome 
of these discussions was the three options listed within the NPRM. 
Understanding the importance of receiving extensive feedback on this 
issue, the Departments requested further input via the NPRM and the 
proposed WIOA Joint Performance ICR, the responses for which can be 
found on regulations.gov. No change to the regulatory text is being 
made in response to these comments.
    Section 677.155(a)(2). The Departments added a new paragraph Sec.  
677.155(a)(2) after considering public comments received in response to 
the proposed WIOA Joint Performance ICR, particularly with regard to 
discrete populations that would be excluded from performance 
calculations. As noted in both the preamble to the NPRM and the 
supporting statement to the proposed WIOA Joint Performance ICR, 
because of the close relationship between the two documents, the 
Departments informed the public that comments on either the NPRM or the 
proposed WIOA Joint Performance ICR would be used to form the basis for 
necessary changes in both the Joint WIOA Final Rule and the finalized 
WIOA Joint Performance ICR. After reviewing WIOA sec. 116, the 
Departments have concluded that the purpose of the performance 
accountability system is to measure a program's performance with 
respect to the populations served and the services provided. A 
program's performance should be measured in terms of populations it is 
designed to serve or services it is designed to provide. In so doing, 
the performance accountability system will measure a program's 
performance more precisely. Given that sec. 116(f) of WIOA imposes 
sanctions for poor performance, it is critical that the Departments 
receive data that accurately reflect a program's performance. 
Explicitly defining which participants will be included in performance 
indicator calculations will allow a program's performance to be 
assessed appropriately. It is for this reason that the Departments 
proposed certain ``exclusions'' in the proposed WIOA Joint Performance 
ICR.
    The Departments have added language in the Joint WIOA Final Rule at 
Sec.  677.150(a)(2)(i) to exclude individuals receiving services under 
sec. 225 of WIOA from all primary performance indicators for purposes 
of performance accountability, except the measurable skill gains 
indicator (Sec.  677.155(a)(1)(v)). This is because the measurable 
skill gains indicator is the only performance indicator applicable to 
this population. In so doing, the Departments ensure programs serving 
these individuals will not be inadvertently subject to low performance 
levels with regard to those indicators not applicable to sec. 225 
participants.
    Section 677.150(a)(2)(ii) allows the Secretaries of Labor and 
Education to make further decisions as to the participants to be 
included in calculating program performance levels for other purposes 
that are necessary with regard to any of the primary performance 
indicators. Further information about those exclusions is provided 
through the WIOA Joint Performance ICR and related guidance.
Section 677.155(b)--Indicators for the Employment Service Programs
    Paragraph (b) of Sec.  677.155 remains unchanged from that proposed 
in the NPRM. The Departments did not receive any comments regarding 
this provision.
Section 677.155(c)--Indicators for the Youth Program
    Paragraph (c) of Sec.  677.155 implements the primary indicators 
for the WIOA title I youth program, as described in sec. 
116(b)(2)(A)(ii) of WIOA. No change to the regulatory text is being 
made in response to public comments.
    Comments: A few commenters supported the fact that the common 
performance indicators for youth programs apply only to WIOA title I 
youth programs. Some commenters remarked that employment rate measures 
are different for youth and adults because the youth measure allows 
enrollment in education and training to be included in the indicator, 
that this difference is likely to work against co-enrollment. These 
commenters suggested that 18 to 24 year old individuals co-enrolled in 
the WIOA title I youth program and other WIOA programs only be included 
in the youth indicators.
    Departments' Response: Although the Departments recognize that 
subjecting such youth to adult and youth employment rate indicators 
could serve as a barrier to co-enrollment, WIOA only authorizes the 
youth indicators for the WIOA title I youth program and does not 
authorize these indicators for any other WIOA core program.
    Comments: One commenter suggested that the following outcomes count 
toward the first two youth statutory indicators as successful outcomes: 
(1) Unsubsidized employment, (2) military employment, (3) education 
(secondary or postsecondary), (4) advanced training (long-term licensed 
or credentialed, for example, registered nurse training), and (5) 
occupational skills training.
    Departments' Response: The Departments agree that these suggested 
outcomes, and additionally registered apprenticeships, are among the 
successful outcomes for the first two statutory indicators, but do not 
think that any change to the regulatory text is necessary to 
accommodate such outcomes as successful. Specific references to 
particular successful outcomes will be included in the WIOA Joint 
Performance ICR.
    Comments: One commenter suggested that supplemental data be allowed 
to measure employment in the second and fourth quarters after exit 
because UI wage record data alone do not capture the full spectrum of 
employment options.
    Departments' Response: The Departments agree and have chosen to 
permit the States to use non-wage record matches (supplemental 
information) in calculating the performance indicators, subject to use 
consistent with the Departments' guidance on this issue. More 
information can be read about this in the preamble to Sec.  677.175 
below. That guidance regarding the use of supplemental wage data will 
be relevant to the use of supplemental data to determine employment 
status.
    Comments: One commenter recommended consideration of planned short-
term employment by youth as a positive outcome, such as internships. 
Another commenter requested that service programs such as AmeriCorps, 
NCCC, and Public Allies be counted as ``unsubsidized employment.'' A

[[Page 55849]]

commenter recommended that placement in unsubsidized employment or 
postsecondary education count as a success regardless of the quarter in 
which it occurs, rather than focusing only on the second and fourth 
quarters after exit. Similarly, one commenter asked that attainment of 
initial employment count as a successful outcome (i.e., a placement 
rate).
    Departments' Response: As required by sec. 116(b)(2)(A)(ii)(I) and 
(II) of WIOA, only unsubsidized employment will count as a positive 
outcome for employment in the first and second indicators. Internships 
that are subsidized would not count as a positive employment outcome, 
but they are an important service in preparing youth for unsubsidized 
employment. However, service programs, such as AmeriCorps, would count 
as a positive outcome in the first and second primary youth indicators 
because these service programs are considered training for the purposes 
of those youth indicators. The Departments will clarify the 
categorization of service programs in the WIOA Joint Performance ICR. 
The first and second primary youth indicators measure the percentage of 
participants in unsubsidized employment, or in education or training 
activities, during the second and fourth quarters after exit. The 
Departments do not have the authority to deviate from the WIOA statute 
by counting participants' status in the first and third quarters after 
exit, or by counting participants as successful simply upon attainment 
of initial employment.
    Comments: A few commenters expressed concern that the requirement 
to track educational attainment up to a year after exit may prove 
infeasible. One commenter favored alignment of reporting that is 
required on post-school outcomes.
    Departments' Response: Although the Departments recognize that 
tracking attainment up to a year after exit is difficult for an often-
transient youth population, the WIOA title I youth program includes a 
follow-up services program element that is required to last not less 
than 12 months after completion of participation. The requirement to 
capture program outcomes 1 year after exit is consistent with the 
follow-up services program element. In addition, follow-up services 
help ensure youth receive the support they need as they transition to 
the world of work or postsecondary education. Regarding alignment of 
reporting on post-school outcomes, WIOA requires the specific 
indicators for youth programs identified in WIOA sec. 116(b)(2)(A)(ii). 
No change to the regulatory text is being made in response to these 
comments.
    Comments: A number of commenters stated that the Departments only 
should measure status of employment or education in the second quarter 
after exit, rather than an entered employment or education rate that 
includes only those not employed or not in education prior to program 
enrollment. This commenter also asked for a clarification of the 
definition of education and training activities related to the two 
youth indicators that measure the percentage of participants in 
unsubsidized employment or in education or training activities. One 
commenter suggested that any type of education should count in the two 
youth indicators related to employment or education or training.
    Departments' Response: The Departments agree that the first two 
indicators only should measure status of employment or education in the 
second and fourth quarter after exit, respectively, regardless of 
employment or education status at enrollment. The definition of 
education and training activities related to the two youth indicators 
will be included in the WIOA Joint Performance ICR. Both secondary and 
postsecondary education will count as successful outcomes for the two 
youth indicators related to employment or education or training. No 
change to the regulatory text is being made in response to these 
comments.
    Comments: Many commenters addressed the third primary performance 
indicator, which measures median earnings in the second quarter after 
exit. The commenters reasoned that areas that are highly successful in 
exiting youth to postsecondary education and training should not be 
penalized; therefore, youth who are working part-time and are also in 
education or training activities should be excluded from the 
calculation of median earnings. In addition, a commenter suggested that 
the focus of services to youth is education and training and, 
therefore, a measure of median earnings does not seem appropriate.
    Departments' Response: WIOA requires all participants with earnings 
in the second quarter after exit to be included in the earnings 
indicator, including participants engaged in education or training 
programs. Therefore, youth who are working part time while in education 
or training activities will be included in the calculation of median 
earnings. Those engaged in both employment and education and training 
will be taken into account in both the statistical adjustment model and 
through target setting. No change to the regulatory text is being made 
in response to these comments.
    The fourth primary indicator for youth measures attainment of a 
recognized postsecondary credential, or secondary school diploma or its 
recognized equivalent, by participants who are enrolled in an education 
or training program (excluding those in on-the-job training or 
incumbent worker training), subject to the caveat that such 
participants only are measured as successes if the participant is also 
employed or enrolled in an education or training program leading to a 
recognized postsecondary credential within 1 year from program exit. 
The language of this indicator is the same as the indicator in Sec.  
677.155(a)(1)(iv). The Departments have provided an in-depth 
explanation of this in the preamble for Sec.  677.155(a)(1)(iv) above 
and refer readers to this section for more information on this 
indicator. No particular comments were received regarding the 
implementation of the fourth primary youth indicator, other than 
discussed above. The Departments are implementing Sec.  677.155(c)(4) 
as revised.
    The fifth primary indicator documents measurable skill gains. The 
language of this indicator is the same as the indicator in Sec.  
677.155(a)(1)(v). The Departments have provided an in-depth explanation 
of these changes in the preamble for Sec.  677.155(a)(1)(v) above. No 
particular comments were received regarding the implementation of the 
fifth primary youth indicator, other than discussed above. The 
Departments are implementing Sec.  677.155(c)(5) as revised and 
discussed in more detail above with respect to Sec.  677.155(a)(1)(v).
    The sixth primary indicator measures effectiveness in serving 
employers. The Departments' approach for measuring this indicator and 
the resulting changes to the regulatory text are discussed in 
significant detail in the preamble discussion for Sec.  
677.155(a)(1)(vi) above and that approach is applicable for this 
indicator for purposes of calculating performance under the title I 
youth program.
    Comments: A commenter suggested that the proposed youth indicators 
in Sec.  677.155(d)(1) and (2) sufficiently measure employer 
satisfaction and that, to the extent that those measures do not 
sufficiently measure employer satisfaction, a brief survey could be 
developed and administered to measure employer satisfaction.
    Departments' Response: The Departments have concluded that the 
effectiveness in serving employers

[[Page 55850]]

indicator is statutorily required as a separate indicator from 
percentage of participants in education or training activities, or in 
unsubsidized employment, during the second and fourth quarters after 
exit from the program. The Departments will be implementing a pilot 
program, as discussed above, to assess measures of effectiveness in 
serving employers.
    Comments: One commenter stated that the introductory description 
provided under this proposed section is confusing regarding the primary 
indicators, particularly when distinguishing between the adult and 
youth indicators. The commenter suggested that the indicators of 
performance for adults and youth be separately described so there is no 
confusion in the field as to which indicators apply to each population 
group.
    Departments' Response: As suggested, the Joint WIOA Final Rule 
separates adult and youth indicators to avoid confusion.
    Comments: One commenter suggested that the VR program report youth 
performance separately just as title I youth programs.
    Departments' Response: Section Sec.  677.155(d) of the NPRM 
contained the performance indicators set forth in sec. 116(b)(2)(A)(ii) 
of WIOA, which applies only to the title I youth program. These youth 
performance indicators are now found in the final regulatory text at 
Sec.  677.155(c). WIOA sec. 116(b)(2)(A)(i) requires all other core 
programs, including the VR program, to comply with the primary 
performance indicators set forth in sec. 116(b)(2)(A)(i) of WIOA and 
Sec.  677.155(a)(1). Therefore, there is no statutory authority for the 
Departments to do as the commenter suggests.
    The Departments understand that the VR program pays for training 
and education needed for individuals, including youth, to obtain 
employment. Because the youth indicators in Sec.  677.155(c) are not 
applicable to the VR program, State VR programs are not required to 
report outcomes under the youth indicators. Adult and youth performance 
outcomes can be differentiated in the RSA-911 data, as has always been 
the case, with no need for additional reporting burden.
Section 677.160 What information is required for State performance 
reports?
    Section 677.160, which implements sec. 116(d)(2) of WIOA, 
identifies the information States are statutorily required to report in 
the State performance report, including levels achieved for the primary 
indicators of performance. No substantive changes have been made to 
this section.
    Comments: Some commenters expressed concern that in many States and 
tribal nations it will be time-consuming and costly to collect the data 
and produce a report for all core programs.
    Departments' Response: The Departments understand the concerns 
expressed by some of the commenters regarding the collection of data 
needed to produce the annual reports and have made every effort to 
minimize the burden and cost to States by incorporating only necessary 
data elements in the Departments' data collection instrument provided 
through the WIOA Joint Performance ICR. Prior to amending each 
Department's data collection instrument, considerable time was taken to 
ensure the required data elements collected would be consistent across 
all core programs and that the only elements added would be necessary 
to meet the requirements under sec. 116 of WIOA, thereby minimizing the 
burden as much as possible. Each core program will be responsible for 
submitting performance reports to their respective Federal agency, just 
as has been done prior to WIOA. Further, the Departments clarify in 
this response that there is no requirement in WIOA or the Joint WIOA 
Final Rule that data reporting be integrated among all core programs. 
As discussed in more detail with respect to the issue of ``common 
exit'' in the preamble for Sec.  677.150(c) above, DOL intends to work 
towards developing an integrated reporting mechanism for the core 
programs it administers. The Departments are open to States wishing to 
submit integrated performance reports, but a single report submission 
across core programs is not required. If a State were to do this, it 
must ensure that it reports on all required reporting elements--both 
for the common performance accountability system under sec. 116 of WIOA 
and for each of the program-specific reporting elements.
    Comments: Commenters recommended that the Departments develop 
guidance, technical assistance, or an integrated set of reporting 
specifications that will allow States to submit customer data in the 
same format for each of the six core programs.
    Departments' Response: The Departments recognize the need for, and 
will develop and disseminate, guidance and associated technical 
assistance related to the preparation and submission of joint and WIOA 
title-specific performance reporting, and the WIOA Joint Performance 
ICR.
    Comments: One commenter suggested that the Departments, working 
with State and local systems, should consider how core programs can 
collect and provide information on the amount of training provided to 
program participants.
    Departments' Response: The Departments acknowledge the comment and 
have concluded that data that will be collected through the WIOA Joint 
Performance ICR associated with this Joint WIOA Final Rule are 
sufficient to meet the requirements of sec. 116(d)(2) of WIOA. Prior to 
imposing additional information collection requirements, the 
Departments must consider them in the context of associated burden and 
cost. The Departments have concluded that the final information 
collections meet the statutory requirement while minimizing reporting 
burden to the extent possible.
    Comments: Commenters urged the Departments to allow the State and 
local agencies that administer the core programs to have access to the 
data they need, such as UI wage record data. A commenter added that in 
some States, a release of information form must be signed by the 
participant. Another commenter recommended that States should be given 
the option to await the results of the national data integration 
workgroup before creating their State interoperable system.
    Departments' Response: With regard to the commenters' concerns 
about the availability of quarterly wage record information and the 
need for, in some cases, informed consent for the disclosures required 
under applicable privacy and confidentiality laws and regulations for 
all programs, the Departments did not modify this regulation. The 
Departments are developing, and will disseminate, guidance that covers 
the allowable disclosures and processes through which disclosures can 
be made under 20 CFR part 603, 20 U.S.C. 1232g and 34 CFR part 99 and 
34 CFR 361.38. Additionally, work is underway to re-negotiate the Wage 
Record Interchange System Data Sharing Agreements to establish pathways 
to the wage record matching required for all core programs to meet 
their performance reporting requirements.
    Paragraph (a)(1) of Sec.  677.160 requires the total number of 
participants served and total number of participants exited, 
disaggregated by the number of individuals with barriers to employment 
and by numbers of participants co-enrolled in core programs. No change 
to the regulatory text is being made in response to these comments.

[[Page 55851]]

    Comments: Commenters supported the provision in Sec.  
677.160(a)(1)(i) that would require reporting to be disaggregated by 
categories for individuals with barriers to employment. Commenters also 
urged that the requirement apply to ``reportable individuals'' as well 
as ``participants.'' Those commenters generally suggested that the 
information in the reporting requirements should be disaggregated based 
on each disability subset and not the entire group.
    Departments' Response: The Departments acknowledge the identified 
potential benefits for State reporting of disaggregated data for 
``reportable individuals'' in addition to ``participants.'' For the 
purpose of Sec.  677.160, the Departments are addressing only the 
requirements for States' annual performance report as required under 
sec. 116(d)(2) of WIOA, which requires reports on only participants. It 
should be noted that the different core programs already collect and 
report information pertaining to ``reportable individuals'' through 
their separate individual reporting vehicles.
    With regard to the discrete disability categories, RSA currently 
collects a number of data elements, including the primary and secondary 
disability type, for individuals who have been determined eligible for 
VR services and would be considered a ``reportable individual.'' The 
data can be disaggregated in different categories, including by 
disability type. The final RSA-911, which is published concurrently 
with this Joint WIOA Final Rule, has been revised to align with the 
additional WIOA requirements. No change to the regulatory text is being 
made in response to these comments.
    Comments: A commenter recommended that the requirement to collect 
information on barriers to employment be tied to the point at which the 
initial IPE is signed.
    Departments' Response: The Departments recognize that different 
State programs have a number of questions regarding how each of the 
core programs will collect the required data elements, including at 
what point required demographic information will be collected to 
produce the most reliable information and how the current consumer 
information will be updated to meet the new WIOA requirements. These 
issues will be addressed through guidance related to the WIOA Joint 
Performance ICR or the Department-specific ICRs. The Departments also 
note that Sec.  677.150(a)(1) defines participants for the VR program 
as an individual who has an approved and signed IPE, and who has begun 
to receive services. Therefore, data elements required on 
``participants'' must comply with the definition applicable to that 
term for the VR program. No change to the regulatory text is being made 
in response to these comments.
    Comments: Commenters inquired about implementing a count of total 
participants and total exiters, disaggregated by co-enrollment in any 
of the core programs. A commenter expressed concern about being able to 
obtain the information. For disaggregated counts for those who 
participated by co-enrollment as required by Sec.  677.160(a)(1)(ii), 
commenters warned that integrated case management and reporting systems 
would need to be in place, and the commenters requested technical 
assistance regarding how core programs housed in different agencies can 
share and compare participant data to meet reporting requirements. One 
commenter, however, supported the requirement to report data 
disaggregated for co-enrollment in any of the core programs.
    Departments' Response: The Departments acknowledge that the absence 
of integrated case management or integrated reporting systems poses 
challenges to ensuring uniform and easy access to data across programs. 
The Departments have concluded that integrated data systems would allow 
for unified and streamlined intake, and case management and service 
delivery, and would overcome many such challenges. The Departments also 
note that such systems are not widely used or in place currently at the 
State level, and encourage States to examine ways in which this may be 
developed or implemented across core programs. The Departments note 
that data system integration ranges from data sharing between existing 
systems to employing consolidated systems. However, in the absence of 
such systems, the Departments encourage all programs to ensure strong 
partnerships and collaborative workspaces in which to ensure all 
programs can meet their reporting requirements. In addition to planning 
and conducting training and technical assistance on data sharing, the 
Departments will issue joint guidance for matching education and wage 
records in order to assist States in providing performance information 
required under WIOA. Additionally, the Departments will work with State 
and Local WDBs, one-stop center operators, and partners to achieve an 
integrated data system for the core programs and other programs to 
ensure interoperability and the accurate and standardized collection of 
program and participant information. No change to the regulatory text 
is being made in response to these comments.
    Paragraph (a)(2) of Sec.  677.160 requires disaggregated 
performance levels based on barriers to employment, age, sex, race, and 
ethnicity. Certain commenters favored this provision. No substantive 
change was made to this section.
    Paragraphs (a)(3) through (a)(7) of Sec.  677.160 require 
information on participants who received career services and training 
services. The Departments have revised Sec.  677.160(a)(3), (4), (6) 
and (7) to specify that career services and training services are two 
different services, not one type of service. No change was made to 
Sec.  677.160(a)(5).
    Comments: Several commenters stated that tracking these detailed 
costs would be overly burdensome and exceed the value of the 
information gained.
    Departments' Response: The Departments recognize the concerns 
identified by the commenters about the States' ability to collect data 
pertaining to career services and training services, including 
expenditures. However, the data elements contained in the State 
performance report, including the data elements on career services and 
training services, are required by statute. No change to the regulatory 
text is being made in response to these comments.
    Comments: A few commenters recommended that reporting begin with a 
1 year period and work up to 3 years.
    Departments' Response: The Departments have concluded that these 
provisions are prospective provisions that do not require retroactive 
collection of information. Reporting begins in PY 2016, and by PY 2018 
States will have reported 3 years of data. No change to the regulatory 
text is being made in response to this comment.
    Comments: Commenters asked for a definition of ``career and 
training service'' and the relationship to ``vocational and training 
services'' in the VR program regulations.
    Departments' Response: WIOA defines both career services and 
training services in sec. 134(c)(2) and (c)(3)(D), respectively. 
Additionally, further information is provided in Sec.  678.430 of this 
Joint WIOA Final Rule about career services in the one-stop delivery 
system. Although the definitions are contained in statutory provisions 
relevant only to the title I core programs, sec. 121 of WIOA (which 
applies to all core programs) requires each of the core programs to 
provide career services and training services, as applicable to the 
program, thereby making those

[[Page 55852]]

definitions relevant to all core programs, including the VR program. 
Furthermore, these services are consistent with the types of services 
provided by the VR program and with the data collected through the VR 
program's RSA-911 collection instrument.
    With respect to Sec.  677.160(a)(3) (4), (6), and (7), the 
Departments have revised the regulatory text to address commenter 
requests for clarity. The previous language at Sec.  677.160(a)(3) 
referred to ``the total number of participants and exiters who received 
career and training services for the most recent program year and the 3 
preceding program years, as applicable to the program.'' This has been 
revised to refer to ``the total number of participants who received 
career services and the total number of participants who exited from 
career services for the most recent program year and the 3 preceding 
program years, and the total number of participants who received 
training services and the total number of participants who exited from 
training services for the most recent program year and the 3 preceding 
program years as applicable to the program.'' In so doing, the 
Departments make clear that career services and training services are 
two different types of services, not one type of service. The revised 
language is also more consistent with the statutory provision by 
referring to ``participants who exited'' rather than ``exiters'' since 
these final regulations define ``exit,'' not ``exiter.'' A similar 
revision was made to Sec.  677.160(a)(4). Likewise, proposed Sec.  
677.160(a)(6) previously referred to ``the amount of funds spent on 
each type of career and training service for the most recent program 
year and the 3 preceding program years.'' This language has been 
revised to refer to ``the amount of funds spent on career services and 
the amount of funds spent on training services for the most recent 
program year and the 3 preceding program years, as applicable to the 
program.'' A similar revision was made to Sec.  677.160(a)(7). These 
changes clarify that the Departments interpret sec. 116(d)(2)(D) to 
require the collection and reporting on participants who receive career 
services and participants who receive training services, as well as 
participants who exited from career services and training services, as 
a single point of collection and thus does not require an itemized 
collection and reporting on each of the various career services or each 
of the various training services that a program provides. Instead, the 
amount to be reported is the total amount spent on career services and 
the total amount spent on training services.
    Comments: Paragraph (a)(3) of Sec.  677.160 requires reporting on 
the number of participants and exiters who received career services and 
training services. A number of comments were received regarding the 
difficulty of tracking costs associated with expenditures of funds on 
such services, as required in paragraph (a)(6).
    Departments' Response: The Departments will provide technical 
assistance or guidance in regard to tracking costs associated with 
expenditures of funds on career and training services.
    No particular comments were received in regard to Sec.  
677.160(a)(4).
    Paragraph (a)(5) of Sec.  677.160 requires reporting on the 
percentage of participants who obtained training-related employment 
through WIOA title I, subtitle B programs.
    Comments: Some commenters warned that determining what constitutes 
training-related employment under paragraph (a)(5) is highly subjective 
and requires clarification.
    Departments' Response: The Departments will provide more 
information regarding what constitutes training-related employment 
services through the WIOA Joint Performance ICR and through guidance. 
No change to the regulatory text is being made in response to these 
comments.
    Paragraphs (a)(6) and (a)(7) of Sec.  677.160 require reporting on 
the amount of funds spent on career services and training services, and 
the average cost per participant for participants receiving career 
services and training services.
    Comments: Commenters requested guidance on whether the average cost 
per participant for career and training services refers to the cost to 
serve the individual or the costs of the career and training services, 
and whether administrative costs are included. Separately, one of these 
commenters also asked for the meaning of ``type'' of service needed for 
disaggregation in reporting under paragraph (a)(6).
    Departments' Response: The Departments will provide guidance 
regarding calculations of costs in the WIOA Joint Performance ICR. The 
Departments have revised Sec.  677.160(a)(6) to reflect the statutory 
language, as WIOA did not require reports on the amount of funds spent 
on career services and training services to be disaggregated by the 
type of career service or training service. The language of the 
regulation no longer refers to the ``type'' of service.
    Paragraph (a)(8) of Sec.  677.160 requires that States report on 
the percent of the State's annual WIOA allotment expended on 
administrative costs.
    Comments: A commenter sought clarification on whether this means 
the percentage of each core program's annual allotment spent on 
administrative cost, or the State as a whole.
    Departments' Response: The Departments want to clarify that Sec.  
677.160(a)(8) applies only with respect to the allotment under WIOA 
sec. 132(b) and not with respect to allotments under other core 
programs. No change to the regulatory text is being made in response to 
this comment.
    Paragraph (a)(9) of Sec.  677.160 requires information that 
facilitates comparisons with programs in other States.
    Comments: Some commenters opposed a requirement for additional data 
collection and preferred, for example, development of shared tools/
surveys for measuring the quality of services to one-stop center 
customers.
    Departments' Response: The Departments note that WIOA allows 
consideration of information that is necessary to facilitate comparison 
of programs across States, which could potentially include the 
development of shared tools or surveys. No change to the regulatory 
text is being made in response to these comments. Further, the 
Departments note that implementation of this provision would be 
accomplished through the information collection request process.
    Comments: The Departments also sought comments on the potential 
inclusion of a supplemental customer service measure, including 
suggestions on how to structure such a measure and whether the 
inclusion of such a measure would be valuable. Commenters did not favor 
developing a universal access point for customer feedback to be 
provided with regard to the one-stop centers, though other commenters 
expressed support for State or local measures of customer satisfaction. 
One commenter asserted that such information would serve as a 
foundation for substantive strategic planning, continuous improvement, 
program research and evaluation, and the dissemination of best 
practices nationwide.
    Departments' Response: The Departments are considering various 
mechanisms available to produce a national measure of customer 
satisfaction, with particular interest in a measure akin to the net 
promoter score used commonly in business and industry. Additionally, 
the Departments intend to collect information on

[[Page 55853]]

customer satisfaction efforts used by the State and local areas through 
the WIOA Joint Performance ICR as well as information on what States 
are doing to leverage such information in the management of their 
programs. The Departments continue to welcome input and participation 
from States and local areas on how to capture customer satisfaction as 
it pertains to usage of the public workforce system.
    Comments: Other commenters also supported the provision and 
suggested customer service measures to assess the quality of services, 
but warned that guidance is needed. A few commenters reasoned that a 
customer service measure is valuable only if the local area receives 
the information and has a mechanism to reach out to the customer and 
make the experience better.
    A few commenters warned that obtaining the data would be difficult 
and suggested that the measure should be left to the discretion of the 
State or local government. Commenters recommended that the provision 
should be part of the continuous improvement process at the local 
level. In addition to the approach described above, the Departments 
also are interested in the work that has been developed and used at the 
State and local levels with regard to customer satisfaction, as well as 
what actions States and Local areas have and will take in response to 
such feedback.
    Departments' Response: At this time, the Departments are not 
modifying the regulatory text to regulate such activities. As discussed 
above, the Departments recognize that, a national, State or local 
customer satisfaction measure would require guidance and technical 
assistance that will be provided through the mechanisms available such 
as the information collection request process, which allows for notice 
and public comment, program guidance, and technical assistance. The 
Departments reiterate their intent to implement a uniform, national 
customer satisfaction survey, applicable to both participants and 
reportable individuals. While this customer satisfaction survey will 
not be tied to accountability provisions, and the survey results will 
not be factored into determinations of sanctions, customer satisfaction 
will be a factor considered in the certification of one-stop centers. 
The Departments anticipate the survey will encompass two elements: A 
national net-promoter score-type indicator will be issued through the 
amended WIOA Joint Performance ICR with a standard methodology; and a 
State-based methodology that States will develop and States and Local 
WDBs will use for one-stop center accountability and customer service 
improvement. A focus from the Federal level will be on understanding 
what States and local WDBs did with the results, which is critical to 
using the data and information gathered towards the betterment of 
service delivery and design. When the Departments collect information 
on these activities, such actions and instructions will be conveyed 
through the information collection process that is also subject to 
notice and public comment.
    Comments: Paragraph (a)(10) of Sec.  677.160 requires a State 
narrative report regarding pay-for-performance contracting. A local 
government recommended that the Departments provide a clear definition 
of pay-for-performance contracts.
    Departments' Response: The Departments did not introduce a 
definition of pay-for-performance contracts under this section of the 
regulation. The Departments refer to 20 CFR part 683, subpart E, where 
the allowance and guidelines for pay-for-performance activities is more 
fully described (see DOL WIOA Final Rule, published in this issue of 
the Federal Register). Paragraph (a)(10) of Sec.  677.160 remains 
unchanged from that proposed in the NPRM.
    Paragraph (b) of Sec.  677.160 prohibits the disaggregation of data 
for a category in the State performance report if the number of 
participants in that category is insufficient to yield statistically 
reliable information.
    Comments: Commenters suggested that States are likely to have 
several ``cell sizes'' that do not meet the standard of statistical 
reliability; therefore, reporting requirements should include 
alternative methods for summarizing data into larger aggregates. A 
commenter requested guidance on an acceptable level of disaggregation 
of data.
    Departments' Response: The Departments recognize that 
disaggregation can produce certain cell sizes that fall below the 
aggregation levels that are allowed in order to protect the data from 
yielding PII.
    The Departments did not impose a minimum disaggregation level in 
this section of the NPRM or this Joint WIOA Final Rule and will provide 
additional clarity through guidance regarding aggregation that is 
statistically significant and reliable yet protects the identity of 
individuals served through the programs. In developing such guidelines 
and guidance, the Departments have considered industry standards such 
as those established by the National Institute of Standards and 
Technology (NIST), the Family Educational Rights and Privacy Act 
(FERPA), the confidentiality regulations for the VR program at 34 CFR 
361.38, the UC confidentiality regulations found at 20 CFR part 603, 
the Social Security Act sec. 1137(a)(5) as well as State laws that 
govern aggregation levels and factors that can be used to affect the 
level of suppression required to maintain the privacy and 
confidentiality of participant data. No change to the regulatory text 
is being made in response to these comments. Furthermore, the 
Departments reiterate their interpretation of this statutory provision 
of WIOA, as noted in the NPRM at 80 FR 20474, 20589 (April. 16, 2015). 
As written, WIOA sec. 116(d)(2) requires the performance report to be 
subject to WIOA sec. 116(d)(5)(C). However, this section refers to Data 
Validation, and the Departments interpret this reference to requires 
States to comply with sec. 116(d)(6)(C), which ensures the Departments 
receive statistically reliable information and protects participants' 
privacy. The Departments are implementing this regulation as proposed.
    Paragraph (c) of Sec.  677.160 requires that the State performance 
report include a mechanism of electronic access to the State's local 
area and ETP performance reports. This provision does not require a 
State to submit the actual local area and ETP performance reports with 
its State report. Failure to provide a mechanism of electronic access 
to the State's local area and ETP performance reports will constitute 
an incomplete State performance report submission, and thus trigger 
sanctions. No comments were received regarding this electronic access 
reporting requirement. This section remains unchanged from that 
proposed in the NPRM.
    Paragraph (d) of Sec.  677.160 states that States and local areas 
must comply with the requirements in sec. 116 of WIOA as explained 
through joint guidance that the Departments will promulgate. This 
section remains unchanged from that proposed in the NPRM.
Section 677.165 May a State establish additional indicators of 
performance?
    Section 677.165 reflects the WIOA provisions in sec. 116(b)(2)(B) 
that a State may identify in the Unified or Combined State Plan 
additional performance accountability indicators. For example, a State 
could add an indicator for attaining U.S. citizenship, work readiness, 
completion of work-based learning, or any other indicator of State 
significance. This provision of additional performance indicators 
proposed by the State remains

[[Page 55854]]

unchanged from WIA. There were no comments on proposed Sec.  677.165. 
There were no substantive changes made to this section.
Section 677.170 How are State levels of performance for primary 
indicators established?
    Section 677.170 outlines the process that will be followed and the 
factors that will be considered in determining adjusted levels of 
performance. WIOA uses the term ``adjusted levels'' to refer to both 
the levels agreed to prior to the start of a program year, as well as 
the adjustment done using the objective statistical model at the close 
of the program year. In order to distinguish between the two adjustment 
processes described in statute, this section was revised to use two 
different terms for each process, specifically ``negotiated levels of 
performance'' and ``adjusted levels of performance.'' Section 677.170 
was revised to provide specific distinctions among expected levels, 
negotiated levels, and adjusted levels of performance. The section 
explains the process under which levels of performance are negotiated, 
adjusted, and then calculated.
    Section 677.170(a)(1) implements the requirement in sec. 
116(b)(3)(A)(iii) that States provide expected levels of performance in 
the initial submission of the Unified or Combined State Plan for the 
first 2 years of the plan. In addition, the Departments are requiring 
in Sec.  677.170(a)(2) that the States submit expected levels of 
performance for the third and fourth years before the start of the 
third program year covered by the Unified or Combined State Plan 
consistent with Sec. Sec.  676.135 and 676.145, as part of the State 
Plan modifications under sec. 102(c)(3)(A) of WIOA.
    Comments: One commenter questioned whether performance levels 
required in the State Plans are the proposed standards or the 
negotiated standards since the term ``expected'' is used. The commenter 
also recommended that the State WDB coordinate and participate in 
performance negotiations for each partner and that the negotiations be 
completed with States at least 45 days before the statutory deadlines 
for submission of the 4-year plans and the 2-year plan modifications.
    Departments' Response: Section 116(b)(3)(A)(iii) of WIOA requires 
that each State identify expected levels of performance for each of the 
corresponding primary indicators of performance for each of the core 
programs for the first 2 program years covered by the Unified or 
Combined State Plan. The expected levels of performance are those 
submitted by the State in the initial submission of the State Plan 
prior to negotiation. The expected levels of performance will be used 
to reach agreement with the Departments on State negotiated levels of 
performance. Therefore, the expected performance levels are similar to 
proposed goals, reflecting the State's expectations for its 
performance. These expected levels, however, will be adjusted through 
negotiations between the State and the Departments in accordance with 
sec. 116(b)(3)(A)(iv) of WIOA. Once the negotiated levels of 
performance are agreed upon, these levels will be incorporated into the 
approved Unified or Combined State Plan. Section 677.170(a) reflects 
this statutory requirement. The Departments did not modify the 
regulation to require coordination across core programs with regard to 
the negotiations process, as recommended by the commenter. The 
Departments agree that the commenter's suggestions are important for 
the purposes and priorities of WIOA and strongly encourage coordination 
across the core programs and other partner programs with respect to 
negotiating performance levels for all programs operating in a State. 
This section is consistent with the statutory requirements; the timing 
of the negotiation is connected to the approval of the State Plan. The 
Departments will provide guidance about the negotiation process.
    Section 677.170(b) requires that the State reach agreement with the 
Secretaries on negotiated levels of performance based on the factors in 
WIOA sec. 116(b)(3)(A)(v). The Departments reiterate that WIOA uses the 
term ``adjusted levels'' to refer to both the levels agreed to prior to 
the start of a program year, as well as the adjustment done using the 
objective statistical model at the close of the program year. This 
paragraph was revised to use the term ``negotiated levels'' as 
appropriate, to distinguish between the two processes.
    The Departments sought comments on whether any additional factors, 
beyond those identified in the proposed regulation, should be 
considered in developing the statistical adjustment model, and the best 
approach to updating the model as necessary.
    Comments: Several commenters requested clarification of the 
requirement for promoting continuous improvement, as set forth in 
paragraph (b)(3) of Sec.  677.170. One commenter recommended that the 
Departments consider embracing the full concept of continuous 
improvement or eliminate the term from the regulations because a true 
continuous improvement measure may have nothing to do with increasing a 
performance measure and may seek to improve a process. Another 
commented that continuous improvement can be defined in a variety of 
ways, including as improvements in efficiency. Commenters also 
requested that continuous improvement be defined in the regulation.
    Departments' Response: The Departments want to make clear that sec. 
116(b)(3)(A)(v) of WIOA requires the negotiated levels of performance 
take into account four factors, including, among other things, how the 
levels of performance promote continuous improvement. The Departments 
recognize the complexities involved in using a continuous improvement 
factor in performance negotiations. However, the Departments are unable 
to remove the continuous improvement factor from the regulation because 
it is a statutory requirement. The Departments will issue guidance on 
the performance negotiations process that will provide additional 
information regarding how the factor will be applied. No change to the 
regulatory text is being made in response to these comments.
    Section 677.170(c) provides that the Secretaries will disseminate 
an objective statistical adjustment model that will be used both to 
reach agreement on the State negotiated levels of performance and to 
revise the negotiated levels at the end of a program year, to establish 
the adjusted levels of performance. The objective statistical 
adjustment model will account for actual economic conditions and 
characteristics of participants, including the factors required by WIOA 
sec. 116(b)(3)(A)(v)(II). The Departments will consider identified 
statutory factors and other factors, which through empirical support 
are established to have an effect on employment or skill outcomes and 
are consistent with the factors identified in WIOA. The Departments 
also will publish guidance that includes how the model was developed, 
what factors were considered, and how the results are interpreted.
    The regulation reflects the statutory requirement that the 
objective statistical model consider certain factors. The differences 
among States in actual economic conditions, as set forth in Sec.  
677.170(c)(1) for required inclusion in the statistical adjustment 
model, include the same economic conditions identified in WIOA sec. 
116(b)(3)(A)(v)(II)(aa). The characteristics of participants, as set 
forth in Sec.  677.170(c)(2) for required inclusion in the statistical 
adjustment

[[Page 55855]]

model, include the factors identified in WIOA sec. 
116(b)(3)(A)(v)(II)(bb).
    Comments: One commenter expressed concern that including 
participants' disability status as a factor in the objective 
statistical model could unintentionally undermine the goal of 
increasing the number of participants with disabilities in integrated 
and competitive employment settings.
    Departments' Response: The Departments note that disability status 
is a statutorily required factor for the objective statistical model. 
The Departments also note that continuous improvement is a factor in 
establishing the negotiated levels of performance.
    Comments: In the preamble to the NPRM, the Departments requested 
comments specifically concerning additional factors to consider in 
developing the statistical adjustment model. Many commenters supported 
the commitment to use a statistical model and offered additional 
factors, including race, Hispanic ethnicity, age, gender, veterans in 
the area, severity of disability (e.g., receiving Social Security 
disability benefits), seasonal employment, self-employment, minimum 
wage and other economic data applicable to the local area, nature of 
predominant employers in the area, quality of educational and training 
facilities in the area, crime rate in the area, public transportation 
and geographic barriers in the area, unemployment rate applicable to 
young people, lack of a high school diploma, individuals not in the 
workforce, and ratio of earnings at program entry to child support 
arrearages.
    Departments' Response: Upon consideration of comments regarding 
additional factors to be included in the model, the Departments 
concluded additional regulation is not required to include additional 
factors. The Departments intend, in accordance with the statutory 
requirements for the use of an objective statistical model, to consider 
those identified statutory factors along with any other factors either 
established within WIOA or through empirical support (and which are 
consistent with the factors in the statute) to have an effect on 
employment or skill outcomes as measured by the primary indicators of 
performance established in Sec.  677.155. Factors that are included in 
the model will be based on the application of empirically supported 
statistical analyses used to determine the effect of a particular 
factor on participant outcomes. The statistical adjustment model will 
be reviewed periodically and may be revised with appropriate 
consultation to ensure its accuracy and utility.
    Comments: A commenter asserted that adjusted performance levels 
should include a factor for small States, single-area States, and areas 
of generally lower population.
    Departments' Response: The Departments are considering all 
potential factors in an effort to establish a model that is evidence-
based and supported by the literature. Having conducted a review of the 
existing literature, the Departments have concluded that small States 
and single-area State structures would be accounted for by those 
variables that capture industrial structures, unemployment rates, and 
shares of the population represented by race and educational levels. No 
change to the regulatory text is being made in response to these 
comments.
    Comments: One commenter suggested that the Departments be mindful 
of the potential burden that requiring additional data collection would 
create and urged reducing reporting burdens and simplifying reporting 
requirements.
    Departments' Response: The Departments are mindful of the reporting 
burden that would result from requiring additional information on 
participants. In this case, the Departments aim to work with States as 
well as other agencies that may have administrative data that could be 
used to populate the model based on established, empirical evidence 
that such information is shown to have an effect on the outcomes being 
measured.
    Comments: A few of the commenters suggested that the Secretaries 
may need to establish separate statistical models for different 
programs, such as those for youth and for adults, and suggested that 
the models should be tested over a trial period and re-examined. 
Commenters also recommended regular updates to the models.
    Departments' Response: Section 116(b)(3)(A)(v)(II) of WIOA requires 
that adjustments be made using ``the objective statistical model,'' 
which the Departments will build on a common framework for all core 
programs to allow for programmatic differences between programs. The 
model will be examined and revised as necessary. No change to the 
regulatory text is being made in response to these comments.
    Comments: One commenter raised concerns about the title II program 
not collecting individual records at the Federal level and stated that 
such records are absolutely necessary to develop and operate 
statistical models. The commenter urged the Departments to develop a 
common reporting mechanism. Other commenters noted that title II 
programs lack experience using adjustment models and requested 
additional guidance and technical assistance.
    Departments' Response: The Departments acknowledge that the use of 
aggregate data for the title II AEFLA program creates shortcomings for 
developing an adjustment model because, among other things, the results 
only can be used to adjust performance at the aggregate level (i.e., 
State) and results from these models cannot be applied to any sub-level 
(e.g., city, county). However, the Departments disagree that individual 
data are absolutely necessary to develop a statistical adjustment model 
for State-level adjustments. Aggregate data may be used in statistical 
adjustment models when individual records are not available. The 
Departments have already developed statistical models for other program 
purposes that produce accurate results using aggregated data and show 
that results are comparable for State level adjustments, regardless of 
whether individual data (i.e., disaggregated data) or aggregate data 
are used. The Departments note that for the AEFLA program under title 
II, ED will provide technical assistance to States in applying the 
statistical adjustment model. The Departments will develop procedures 
to minimize burden to States when using the model to generate adjusted 
levels of performance. No change to the regulatory text is being made 
in response to these comments.
    Comments: A few commenters warned that there is limited or no 
statistical tribal data available that captures economic circumstances 
for the various Indian and Native American geographic service areas. 
One of these commenters added that a regression model that factors in 
local economic conditions will need to be developed for the INA 
program.
    Departments' Response: In response to the commenter's concern about 
developing an accurate regression model to establish levels of 
performance for INA program grantees, the Departments recognize that 
labor market information (LMI) for American Indian geographic service 
areas may not be as reliable as that for other areas. However, the 
regression model also factors in the characteristics of participants 
served by the grantee and is, therefore, not totally dependent on LMI. 
Despite the potential for inaccurate LMI data for American Indian 
geographic service areas, the Departments are confident a regression 
model can be developed that establishes fair and attainable levels of 
performance for each INA program grantee's service area. The 
Departments envision developing further guidance regarding

[[Page 55856]]

INA adult performance indicators. No change to the regulatory text is 
being made in response to these comments.
    Comments: Some commenters did not support the use of an adjustment 
model, or express concerns about the design of the State performance 
accountability systems, because of the temptation to serve those 
individuals who are more likely to achieve positive outcomes. This 
commenter also noted that the fact that the State has sufficient tools 
to evaluate current and projected performance to identify intervening 
occurrences that would trigger re-evaluation of performance.
    Departments' Response: While the Departments understand the 
concerns expressed, sec. 116(b)(3)(A)(v)(II) of WIOA requires the use 
of an objective statistical model to adjust the State levels of 
performance based on actual economic conditions and characteristics of 
participants. The Departments caution that any service provider tempted 
to utilize the tactics described by the commenter should consider the 
impact on future performance levels, which may be affected because of 
relatively lower numbers or percentages of hard-to-serve populations 
and other populations with barriers to employment. No change to the 
regulatory text is being made in response to this comment.
    Comments: Commenters added that the model will need to account for 
varying levels of impact of a particular demographic or local economic 
condition in different parts of the country, in particular race and 
ethnicity, offender status, dependence on public assistance, local 
minimum wage, and the local unemployment rates for young adults. Some 
commenters recommended these factors be explicitly mentioned in the 
regulation. One such commenter suggested that select CEOs participate 
in the selection of factors in different parts of the country.
    Departments' Response: The Departments are considering a State 
fixed effect variable. Such a variable would account, in essence, for 
the quality of the programs and their services. The Departments, after 
consulting with various stakeholders and particularly in consultation 
with expert reviewers, identified that the most important piece of 
information that is not directly included within the statistical 
adjustment model for the purposes of the performance accountability 
system, is the quality of the programs and services. The model is being 
developed with consideration of all participant and student variables 
required by WIOA and the potential State specific factors that could be 
accounted for through a State fixed effect variable. This variable 
ultimately could serve the same purpose statistically as including 
additional individual characteristics and any other State 
characteristic not included in the model. With regard to participation 
of select CEOs in the selection of factors to be included within the 
statistical adjustment model, the Departments note that the 
methodology, including the factors in the model, will be available for 
public comment and review. Moreover, WIOA sec. 116(b)(3)(A)(viii) 
requires the Departments to develop an objective statistical model in 
consultation with a variety of stakeholders identified in sec. 
116(b)(4)(B), who would include CEOs. No change to the regulatory text 
is being made in response to these comments.
    Comments: Some commenters also suggested that States should be 
allowed to provide additional information specific to the State that 
may not be fully accounted for in the national statistical models when 
setting performance targets. Some commenters suggested that State and 
local areas should be able to document this information and use it in 
performance negotiations. Others stated that additional State 
information is critical because it is not feasible to develop a single 
statistical model with one set of demographic and economic variables 
that is equally accurate for all States and all boards.
    Departments' Response: The Departments note that States are 
permitted to provide additional information concerning factors listed 
in sec. 116(b)(3)(A)(v) of WIOA during the negotiations process. The 
States may provide relevant documentation and research concerning these 
factors during the negotiation process. The Departments will ensure 
that each programs' data, its availability, and its specificity will be 
considered in developing the methodology and framework for the 
application of the model to each program. The Departments intend to 
continue to assess the quality and robustness of the statistical 
adjustment model since it plays such a key part in the adjusted levels 
of performance under this section. No change to the regulatory text is 
being made in response to these comments.
    Section 677.170(d) requires the statistical adjustment model to be 
used before the beginning of a program year as a consideration in 
establishing levels of performance, and then used to adjust levels of 
performance at the end of a program year. The Departments reiterate 
that WIOA uses the term ``adjusted levels'' to refer to both the levels 
agreed to prior to the start of a program year, as well as the 
adjustment done using the objective statistical model at the close of 
the program year. This paragraph was revised to use the term 
``negotiated levels'' as appropriate to the process.
    Comments: Several commenters opposed having the goals adjusted 
twice a year, because it would make building strategic plans difficult, 
add additional burden, and create a moving target. Another commenter 
requested that the margin of error be published with the statistical 
models. A few commenters asserted that applying the formula at the end 
of the year creates the possibility of targets higher than planned 
outcomes, which could lead to local areas failing performance. The 
commenters stated that this approach does not lend itself to a 
strategic planning process. An individual suggested that the year-end 
adjustment process needs to allow room for additional factors that were 
not anticipated to be significant at the start of the year, and another 
commenter asked whether States will be able or required to negotiate 
the final targets or if the results of the model will be applied 
without discussion.
    Departments' Response: Section 677.170(d) implements sec. 
116(b)(3)(A)(iv) and (vii) of WIOA and requires the objective 
statistical model to be applied before the beginning of the program 
year as a consideration in establishing State levels of performance for 
the upcoming program year and be used again at the end of the program 
year based on actual circumstances. Therefore, there is no statutory 
authority to delete the requirement to use the objective statistical 
model at the end of the program year. The concern about margin of error 
is important in evaluating the results from the model. Consequently, 
the Departments will provide confidence intervals along with the 
adjusted performance measures for each State. The Departments also 
recognize that the effects of variables used in the adjustment model 
may change over time. No change to the regulatory text is being made in 
response to these comments.
    Comments: Commenters requested that the model be made available for 
the States to install within their own information systems so that it 
can be made available to the local areas.
    Departments' Response: The Departments acknowledge the commenters' 
interest in incorporating the model within their own systems. As 
required by WIOA, the Departments intend to make the statistical 
adjustment model available to States, local areas, and the public. No 
change to the

[[Page 55857]]

regulatory text is being made in response to these comments.
    Comments: Commenters sought guidance and technical assistance, 
including guidance on how to ensure that disadvantaged populations 
receive comparable services throughout the program with expectations 
that they will achieve outcomes leading to successful exits similar to 
all participants in the program. A commenter favored development of a 
common reporting mechanism, so that model development would not be 
delayed by claims that the necessary data are not available.
    Departments' Response: The Departments intend to publish guidance 
that includes how the model was developed, what factors were 
considered, and how the results are interpreted. The Departments also 
share the commenters' concerns regarding comparable service for 
disadvantaged participants and commit to providing technical assistance 
and guidance on how to ensure an equal distribution of services. No 
change to the regulatory text is being made in response to these 
comments.
    Comments: Many commenters suggested that, because data are lacking 
to set benchmarks for the new outcome measures, FY2017 should be a 
benchmarking year, or implementation should be lagged for 2 to 4 years 
to establish accurate levels of performance. A commenter expressed 
concern about the comparability of data across core programs and across 
States. Another commenter asked for clarification on whether there will 
be sanctions for low performance prior to the establishment of 
benchmarks and baselines.
    Departments' Response: The Departments have revised Sec.  
677.190(c) in response to these comments; more information about the 
Departments' approach is set out below in the preamble to that section.
    Section 677.170(e). The Departments added a new paragraph (e) to 
Sec.  677.170, and renumbered the previous paragraph (e) as Sec.  
677.170(f). The new paragraph (e) specifies that the previously 
discussed negotiated levels, after being revised at the end of the 
program year based on the statistical adjustment model, are the 
adjusted levels of performance.
    Section 677.170(f) requires States to comply with the requirements 
in sec. 116 of WIOA. The Departments intend to issue guidance, which 
may include information on reportable individuals as established by the 
Secretaries. No comments were received regarding this reporting 
requirement and no changes have been made to this section.
Section 677.175 What responsibility do States have to use quarterly 
wage record information for performance accountability?
    Section 677.175 implements the requirement that States must, 
consistent with State laws, use quarterly wage record information to 
measure progress on State and local performance accountability 
measures, as required by sec. 116(i)(2) of WIOA. Such information 
includes the intrastate and interstate wages paid to an individual, the 
individual's SSN, and information about the employer paying the wages 
to the individual.
    After further review of this provision, the Departments recognize 
that some participants may not be included in quarterly wage records 
held by the State, such as those participants who refuse to provide a 
SSN to the program or who may be self-employed. In light of this fact, 
the Departments have revised Sec.  677.175(a) to make clear that States 
must use quarterly wage records to the extent they are available; 
however, States may use other information when such records are not 
available. In so doing, the Departments ensure that programs may track 
the participants for performance accountability purposes even if their 
information is not contained in the State's quarterly wage record 
system.
    The Departments have revised Sec.  677.175(c) to provide that the 
State agency or appropriate State entity designated to assist in 
carrying out the performance requirements is responsible for preventing 
disaggregation that would violate applicable privacy standards. The 
Departments added the words ``applicable'' and ``standards'' to Sec.  
677.175(c)(3) to require that the States must consider the privacy 
standards that apply to them.
    Comments: A significant number of commenters raised concerns about 
the difficulty in matching wage records, citing concerns over FERPA 
privacy rules, that students often refuse to provide SSNs (for reasons 
such as concern about consumer fraud and uncertain residency status), 
some students do not have SSNs, and several States do not allow 
programs to collect SSNs. Some of these commenters asserted that there 
are other data matching mechanisms by which to track employee outcomes. 
Other commenters suggested not including participants without SSNs in 
the measure for computing the percentage for the performance target. 
Many commenters also urged the Departments to provide guidance on how 
to collect employment-related data without use of SSNs, acceptable 
forms of SSN validation, and on alternatives to using wage records. 
Many commenters added that data from the UI wage record system often do 
not present a complete picture of employment because it excludes the 
self-employed, those outside of an individual State, and risks over-
representing Limited English Proficient individuals in the non-matching 
group. Some of these commenters recommended that States be given 
supplemental options such as follow-up calls or emails to verify 
employment status.
    Departments' Response: The Departments considered the commenters' 
concerns about the obstacles to using wage record information and agree 
there are limited circumstances in which such information may not be 
available. The Departments want to make clear that sec. 116(i)(2) of 
WIOA requires that States use quarterly wage records when determining 
performance under the primary performance indicators that measure 
employment status and median earnings. Using its authority under sec. 
189 of WIOA, the Secretaries are allowing States to use other 
information to verify performance of those individuals for whom 
quarterly wage records are not available, such as those who are self-
employed. This flexibility is necessary to carry out the requirements 
of WIOA and its performance accountability system. To do otherwise 
would potentially result in programs not able to report on participants 
as required under WIOA. Therefore, where available and possible, States 
must use wage records to fulfill reporting requirements. Furthermore, 
the Departments understand that wage record information may not provide 
a complete representation of the employment outcomes. For all the 
reasons discussed here, the Departments will allow the collection and 
verification of supplemental wage information to demonstrate employment 
outcomes in the second and fourth quarters after exit in those 
instances where wage records are not available. However, if a State 
uses supplemental information to report on the employment rate 
indicators, the State also must use supplemental information to report 
on the median earnings indicators. The Departments will provide 
guidance on acceptable supplemental information to verify performance 
outcomes. Section 677.175(a) has been revised to reflect the changes 
described here.
    With regard to acceptable forms of SSN validation, the Departments 
note

[[Page 55858]]

that WIOA sec. 116(d)(5) requires the Departments to issue data 
validation guidelines, which the States must use to ensure that the 
information in the reports is valid and reliable. See the preamble to 
Sec.  677.240 below for further discussion on this requirement.
    In the NPRM, the Departments expressed the intent to engage in a 
renegotiation of the WRIS data sharing agreements with States, which 
will allow States to conduct interstate wage matches for all WIOA core 
programs. Like WIA, WIOA similarly provides authority for the 
Departments to facilitate data matching between the States.
    Comments: Several commenters approved of this commitment and 
encouraged the Departments to clarify that all the core programs may 
use the Federal Employment Data Exchange System (FEDES) for WIOA 
performance reporting.
    Departments' Response: Under WIA, DOL's Employment and Training 
Administration aided in the establishment and management of a system 
through which participating, signed States could access Federal 
employment records from the participating government agencies. The 
Departments have concluded that the authorities established in WIOA 
allow for the continuation of such an agreement to facilitate wage 
matching for Federal employment for States that become signatories to 
the established data sharing agreement. The Departments have concluded 
that such agreements should be entered into and conducted at the State 
level based on the language of WIOA sec. 116(i)(2), which requires that 
the use of wage records must be consistent with State law. Moreover, 
WIOA sec. 116(i)(2) requires the Secretary of Labor to facilitate such 
arrangements between States. Therefore, the Departments continue in 
their commitment to review and renegotiate the appropriate agreements 
with State government entities that provide the necessary wage data for 
complete and robust performance reporting across all core programs 
under WIOA.
    Comments: One commenter recommended that, for private training 
providers who cannot access wage record information, regulations should 
provide that the data these entities submitted for training 
participants not found in the UI wage records be returned to the 
provider, indicating that the records do not match UI records.
    Departments' Response: ETP access to wage records is governed by 
the UC Confidentiality and Disclosure regulations at 20 CFR part 603. 
Therefore, training providers seeking access to wage records must 
comply with these provisions. Because ETP access is governed by 20 CFR 
part 603, the Departments have not changed Sec.  677.175 in response to 
this comment. However, the Departments will issue guidance regarding 
the process of matching wage records. No change to the regulatory text 
is being made in response to this comment.
    Comments: Another commenter favored allowing performance to be 
reported disaggregated by industry.
    Departments' Response: The Departments consider additional 
disaggregation, when it is not required by statute, to pose an 
additional and unnecessary burden on the States. Moreover, many States 
do not require the inclusion of the North American Industry 
Classification System codes within wage records. Therefore, its 
inconsistent availability makes requiring this kind of reporting 
infeasible. No change to the regulatory text is being made in response 
to this comment.
    Comments: One commenter suggested that WDBs and AEFLA providers are 
entitled to know whether a participant they served was employed in a 
given quarter.
    Departments' Response: The Departments reiterate that an entity's 
ability to obtain this information depends on their compliance with the 
confidentiality requirements of 20 CFR part 603 (covering UC records), 
34 CFR part 99 (covering educational records protected by FERPA), and 
34 CFR 361.38 (covering VR records), as well as any applicable State 
laws. However, the Departments want to make clear that States are 
responsible for ensuring the appropriate entities have access to the 
information required for reporting purposes under WIOA sec. 116 and 
these regulations.
    Comments: The Departments received several comments related to the 
use of wage record information and the VR program. Another commenter 
asked whether the wage record provision will be tracked in the VR 
program differently than in the other core programs. A commenter 
requested that additional guidance on VR access to WRIS be issued so 
that States may plan any necessary changes to their IT systems.
    Departments' Response: The Departments recognize the unique 
disclosure requirements that have to be navigated by various entities. 
Because of the importance of protecting PII while also obtaining the 
necessary information needed for States to comply with the performance 
accountability system requirements, the Departments will issue guidance 
to assist States in regard to accessing wage record information.
    The Departments also refer these commenters to the UC 
Confidentiality and Disclosure regulations at 20 CFR part 603, which 
govern the confidentiality and disclosure of, wage record information. 
It should be noted that the confidentiality provisions apply to PII 
contained within a wage record and this extends to the absence of data 
for an individual level as well. The tracking of employment outcomes 
through wage record matching is subject to 20 CFR part 603 and any 
applicable Federal and State laws; therefore, there may be some 
variation in the mechanisms for matching wage record data via the State 
UC agencies and the process through which any core program enters into 
and engages under those agreements. Furthermore, regulating access to 
wage record information is beyond the scope of this part. No change to 
the regulatory text is being made in response to these comments.
    Comments: A commenter asserted that if the VR program is to track 
progress on wages, then it would need ready access to longer-range 
employment data.
    Departments' Response: The VR program is subject to the same 
outcome reporting requirements as the other core programs under WIOA. 
Thus the Departments have concluded that access to a different duration 
of employment data is not necessary. No change to the regulatory text 
is being made in response to this comment.
    Comments: Another commenter requested clarification on how 
participants who are seeking to better themselves without entering the 
workforce or postsecondary education should be treated in the 
performance accountability system. This population includes retirees, 
the non-working disabled, and English language learners who are seeking 
to improve their language skills but are not in the labor force.
    Departments' Response: The Departments interpret WIOA sec. 
116(b)(2)(A)(i) to require all participants to be included in the 
primary performance indicators, with very limited exceptions, 
regardless of their employment status at program entry. No change to 
the regulatory text is being made in response to this comment.
    Comments: A commenter requested clarification about whether the 
wage record information refers to wages paid or wages earned.

[[Page 55859]]

    Departments' Response: The Departments clarify that the wage record 
information held by State UC agencies, from which wage record 
information is drawn, only contain the wages paid to an individual. See 
20 CFR 603.2(k)(1). Moreover, sec. 1137(a)(3) of the Social Security 
Act, which creates the requirement that States provide quarterly wage 
reports, only requires that employers report wage information. 
Similarly, sec. 3306(b) of the Federal Unemployment Tax Act defines 
wages as all remuneration for employment. Because the records only 
include wages paid, the Departments interpret WIOA sec. 116(i)(2)'s 
requirement to use State UI wage records to mean that the States only 
are required to report on wages paid. No change to the regulatory text 
is being made in response to this comment.
    Comments: Some commenters favored data sharing and record matching 
across departments and programs. Another commenter said that the Indian 
and Native American programs (INAP) do not have a mechanism to match 
participant SSNs with UI wage records. One commenter recommended that 
the Departments, in renegotiating the Wage Record Interchange System 
(WRIS) agreements, make it possible for States to access readily both 
intra- and interstate UI data beyond the fourth quarter after exit for 
longer-term program impact evaluations.
    Departments' Response: The Departments recognize the variety of 
structures that exist for programs under WIOA; some programs are run 
through the States and others are run through sub-State level grantees. 
The Departments recognize the challenges faced by the INA programs in 
complying with WIOA performance reporting requirements and will be 
issuing guidance for and providing technical assistance to those 
programs. Under WIA the Secretary of Labor, working with States, 
established the WRIS to facilitate access to interstate wage data for 
State workforce agencies to fulfill their performance reporting 
requirements. In addition, DOL established the Common Reporting 
Information System (CRIS) in order to provide access to the aggregate 
wage data necessary for performance reporting, to those workforce 
programs that were not operated by State workforce agencies. These 
programs included the WIA national programs, such as INAP and NFJP, as 
well as competitive and discretionary grant programs operated under the 
jurisdiction of DOL.
    Under WIOA, the WRIS, WRIS2, and CRIS are being reviewed and 
renegotiated to establish the mechanisms for programs, including those 
under the jurisdiction of ED, where applicable, to access the quarterly 
wage data necessary for grantees to fulfill their WIOA performance 
reporting requirements.
    The Departments considered these comments and made no changes to 
the regulatory text. First, WIOA sec. 116(i)(2) already requires that 
the wage records of any State receiving program funds are available to 
any other State to the extent that such wage records are required by 
the other State in carrying out performance accountability for its 
State Plan. While the Departments are working to facilitate applicable 
programs' access to intra- and interstate UI data, the Departments have 
determined that the conditions and availability of the records outlined 
within these agreements are not appropriately included in this 
regulation.
    Comments: A commenter suggested that DOL look at wage record pilots 
to research gaps in wage record use.
    Departments' Response: The Departments will continue to give 
consideration to activities that identify gaps and improve on the usage 
of wage record information for the purposes of performance reporting. 
No change to the regulatory text is being made in response to this 
comment.
    Comments: Several commenters suggested that Local WDBs have access 
to data that is timely and pertinent, citing surveys in which 
participants say that their job is unrelated to the training received.
    Departments' Response: The Departments recognize the need for local 
areas to gain access to timely and accurate data and the Departments 
strongly urge States to provide the sub-State level local area 
reporting outcomes to their local areas along with the reporting that 
they submit to the Departments. No change to the regulatory has been 
made in response to these comments.
    Comments: Commenters suggested that the wages should include all 
program participant wages, pre- and post-exit.
    Departments' Response: The Departments have concluded that it is 
not necessary to include this level of specificity in the regulatory 
text. Such information and its required collection are handled through 
the WIOA Joint Performance ICR. No change to the regulatory text is 
being made in response to these comments.
4. Sanctions for State Performance and the Provision of Technical 
Assistance (20 CFR part 677, subpart B; 34 CFR 361.180 through 361.200; 
34 CFR 463.180 through 463.200)
Section 677.180 When is a State subject to a financial sanction under 
the Workforce Innovation and Opportunity Act?
    Section 677.180 outlines performance and reporting requirements 
that are subject to sanctions under sec. 116(f) of WIOA. Section 
677.180 provides that the failure to submit the State annual 
performance report required under sec. 116(d)(2) of WIOA is 
sanctionable, and that sanctions for performance failure are based on 
the primary indicators of performance. The Departments have revised 
Sec.  677.180 to correct a statutory citation error in the introductory 
paragraph (to change WIOA sec. 116(d) to sec. 116(f)). WIOA sec. 116(d) 
outlines the requirements for performance reports. The correct 
reference should be to sec. 116(f), which governs sanctions for State 
failure to meet State performance accountability indicators. No other 
substantive changes were made to this section.
    Comments: Commenters expressed support for the imposition of 
sanctions for failure to report as well as for failure to meet a 
performance standard.
    A few commenters stated that funding and sanctions should be tied 
to individual programs to ensure that a core program's poor performance 
does not negatively impact the funding of other core programs.
    Departments' Response: The Departments recognize the commenters' 
concerns regarding funding and sanctions being tied to individual 
programs; however, WIOA sec. 116(f)(1)(B) makes clear that the 
sanctions are imposed against the Governor's Reserve for statewide 
activities under the title I adult, dislocated worker, and youth 
formula programs regardless of which of the six core program's 
performance constitutes a failure giving rise to the sanction. 
Therefore, given the explicit statutory requirement, the Departments do 
not have the authority to do as these commenters suggested. No change 
to the regulatory text was made in response to these comments.
    Comments: Another commenter requested clarification regarding how 
individual core programs will be held accountable if they reside in 
different agencies.
    Departments' Response: The Departments note that accountability for 
the State's performance rests with the Governor and State WDB, through

[[Page 55860]]

which all core programs are represented. Therefore, even if the core 
programs are located in different agencies, there is no difference in 
how the States and core programs are treated. The Departments encourage 
and expect the core programs to work closely together regardless of the 
State agency in which they are located. No change to the regulatory 
text was made in response to this comment.
    Comments: A commenter sought clarification concerning the process 
for submitting the State annual performance report and the manner in 
which sanctions will be enforced.
    Departments' Response: The Departments consider the process of 
submitting State annual performance reports to fall under the purview 
of sub-regulatory guidance as it is implementation of the regulatory 
requirements. Therefore, the Departments will issue guidance clearly 
explaining how to carry out the annual reporting process. The 
Departments will impose financial sanctions consistent with WIOA sec. 
116(f)(1)(B), which provides for a five percent reduction of the State 
Governor's Reserve for Statewide Activities from the amount allocated 
in the immediately succeeding program year. The Departments consider 
the logistics of how the financial sanction will work to fall under the 
purview of sub-regulatory guidance as it is implementation of the 
statutory and regulatory requirement. Moreover, the financial sanctions 
will be carried out consistent with financial management and rules 
already in place. Therefore, the Departments will issue further 
guidance on how this process will be conducted. No change to the 
regulatory text is being made in response to this comment.
    Comments: One commenter requested clarification about whether WIOA 
or Perkins indicators of performance would take precedence in a 
Combined State Plan.
    Departments' Response: The Departments clarify here that the 
Perkins program is subject to its authorizing statute's requirements on 
performance measurement. Should a grantee receive both Perkins and WIOA 
funds, it must report on both programs accordingly.
Section 677.185 When are sanctions applied for a State's failure to 
submit an annual performance report?
    Section 677.185 outlines the circumstances under which a State may 
be sanctioned for failure to report under sec. 116(f)(1)(B) of WIOA. No 
substantive changes were made to this section.
    Comments: A commenter stated that the 30-day deadline to request an 
extension should be removed as it does not allow for exceptional 
circumstances, such as a natural disaster, that may occur closer to the 
deadline.
    Departments' Response: The Departments refer the commenter to Sec.  
677.185(c)(2) which allows for unexpected events within the 30-day 
period and provides a process by which exceptional circumstances may be 
addressed in less than 30 days. No change to the regulatory text was 
made in response to this comment.
    Comments: A few commenters supported the enforcement of sanctions 
for failure to report.
    A few other commenters requested clarification regarding what the 
Departments consider exceptional circumstances under which a State 
would be exempt from sanctions for failure to report.
    Departments' Response: In response to the comments on enforcement 
of sanctions for failure to report, the Departments note that a State 
annual performance report is considered complete only when it provides 
a mechanism of electronic access to local area and ETP performance 
reports. Thus, the submission of a State annual performance report that 
does not provide a mechanism of electronic access to local area and ETP 
performance reports is a sanctionable offense. Section 677.185(b) 
provides a non-exhaustive list of examples that may qualify as an 
exceptional circumstance. The listed exceptional circumstances include 
natural disasters, unexpected personnel transitions, and unexpected 
technology related impacts. These are not the only circumstances that 
may be justified, but rather are examples of the types of circumstances 
the Departments would consider exceptional. The Departments expect that 
any request for delay or any failure to report timely information would 
not be based on a routine or predictable situation. The Departments 
interpret Sec.  677.185(c) to require these exceptional circumstances 
to be fully documented by the States, supported by clear rationale, and 
include an estimation of when the performance reports will be made 
available. The Departments will determine the merits of each request 
based on exceptional circumstances in consultations with the States, 
and their respective regional offices. The Departments plan to issue 
guidance to provide further clarity with regard to exceptional 
circumstances. No change to the regulatory text is being made in 
response to these comments.
    Comments: A commenter expressed concern that the guidance regarding 
exceptional circumstances is to be issued without public comment and at 
a point at which States may already incur sanctions.
    Departments' Response: Any guidance issued by the Departments 
regarding exceptional circumstances would be interpretive and thus, is 
exempt from the notice and comment rulemaking requirements under the 
Administrative Procedure Act. See 5 U.S.C. 553(b)(A). The Departments 
intend to issue guidance prior to applying sanctions. No change to the 
regulatory text has been made in response to this comment.
    Comments: A commenter requested the Departments focus on 
incentivizing timely submission of State annual performance reports 
rather than sanctions.
    Departments' Response: WIOA sec. 116(f) requires that financial 
sanctions apply with regard to the timely submission of performance 
reports and does not provide for incentives within this context. No 
change to the regulatory text was made in response to this comment.
Section 677.190 When are sanctions applied for failure to achieve 
adjusted levels of performance?
    Section 677.190 governs how States will be assessed for performance 
failure and when such failure will result in a financial sanction. 
Although the Departments have referenced other non-core programs in 
previous sections of this preamble for part 677, consistent with WIOA 
sec. 116(b)(2) and 116(f)(1)(B), performance success or failure will be 
based solely on the performance of the six core programs of WIOA--not 
other partner programs in the public workforce development system. The 
Departments have added two new provisions to Sec.  677.190(c) to 
reflect a phased-in approach for applying sanctions for failure to 
achieve adjusted levels of performance. In addition, the Departments 
reiterate that WIOA uses the term ``adjusted levels'' to refer to both 
the levels agreed to prior to the start of a program year, as well as 
the adjustment done using the objective statistical model at the close 
of the program year. Paragraph (c) was revised to make clear that 
performance accountability will be based on a comparison of the State's 
performance with that determined to be the ``adjusted levels of 
performance,'' as appropriate. These revisions resulted in renumbering 
the subsequent paragraphs. Section 677.190(c)(2) provides that, until 
at least 2 years of complete data are available

[[Page 55861]]

for each of the indicators, the Departments will assess the State's 
performance on the overall program score based on the indicators for 
which there are at least 2 years of data available. Section 
677.190(c)(4) similarly provides that until at least 2 years of 
complete data are available for each of the indicators, the Departments 
will assess the States' performance on the overall indicator score, 
based on the indicators for which there are at least 2 years of data 
available. The Departments consider complete data to consist of, at a 
minimum, 2 full program years of performance data.
    Comments: Many commenters discussed the timeline for implementing 
the full accountability system, with the majority of commenters 
supporting a 2-year benchmarking period to allow for the collection of 
baseline data to be used to assess performance moving forward. Other 
suggestions included a 1-year baseline period, a 3-year baseline 
period, and a 4-year baseline period. Still, other commenters supported 
a baseline period, but did not provide a specific timeline for 
implementing the full performance accountability system. Commenters 
supported using the PY 2016, PY 2017, and PY 2018 annual report as the 
first years to report on State adjusted levels of performance. A 
commenter suggested the PY 2016 annual report be the first used for all 
of the performance indicators except credential attainment and 
measurable skill gains. Some commenters asserted that a 2-year delay in 
the implementation of sanctions would allow for further calibration of 
the statistical adjustment model. Some commenters requested a 2-year 
transition period that would allow States to adapt to the new 
performance standards before sanctions are implemented.
    Departments' Response: Section 677.190(c)(1) and (3) govern how 
performance on the overall State indicator score and the overall State 
program score will be assessed. As explained above, the Departments 
have revised the regulatory text in Sec.  677.190(c) to reflect a 
phased-in approach for applying sanctions for failure to achieve 
adjusted levels of performance. Paragraphs (c)(2) and (4) of Sec.  
677.190 govern how performance on the overall State indicator score and 
the overall State program score will be assessed. Section 677.190(c)(2) 
provides that, until at least 2 years of complete data are available 
for each of the indicators, the Departments will assess the State's 
performance on the overall program score based on the indicators for 
which there are at least 2 years of data available. Section 
677.190(c)(4) similarly provides that until at least 2 years of 
complete data are available for each of the indicators, the Departments 
will assess the States' performance on the overall indicator score, 
based on the indicators for which there are at least 2 years of data 
available. Pursuant to these provisions, the Departments consider 
complete data to consist of, at a minimum, 2 full program years of 
performance data.
    The Departments acknowledge that, given the lag in reporting data 
and the amount of time needed for each indicator to be measured, 2 
program years' worth of data for each of the indicators will occur at 
different times. However, the Departments consider it vital that 
performance accountability take effect as soon as possible to align 
with the vision and requirements of WIOA. These revisions provide for 
an assessment of the overall State program and indicator score when the 
States have reported at least 2 years of complete data for the 
indicators. For performance accountability determinations, including 
the determination of failure to achieve adjusted levels of performance, 
the Departments will not use data reported prior to July 1, 2016. The 
Departments note that where historical data that were reported under 
WIA provide a proxy for the new indicators (at least 2 years of data), 
it is possible to establish a statistical adjustment model for 
negotiation of those indicators. Such indicators will be included in 
the overall State program or overall State indicator score for 
performance assessment when States have reported 2 years of outcomes 
under WIOA. The States are still subject to a performance risk plan 
under Sec.  677.200(b).
    Comments: Several commenters urged the Departments to delay 
implementation of the full performance accountability system for 
reasons other than the collection of baseline data, including that the 
first annual State report should be coordinated with the development of 
data systems.
    Departments' Response: The Departments recognize the challenges in 
unified reporting across the core programs. For this reason the 
Departments are exercising the transition authority in sec. 503 of WIOA 
to implement the requirements in a manner that allows for an orderly 
transition from the requirements of WIA to the requirements of WIOA. To 
the extent that data are available, States must comply by submitting 
the requisite data. Moreover, the Departments recognize that some 
States have the capability to currently report all of the data in one 
system and upload reports to the Departments, whereas other States may 
not have that capability. The Departments plan to provide guidance on 
the submission process for WIOA State annual reports through the WIOA 
Joint Performance ICR.
    Comments: Several commenters stated that sanctions should not be 
implemented until the third consecutive year of performance failure, 
rather than the second, in order to allow improvement measures to be 
effective.
    Departments' Response: Section 116(f)(1)(B) of WIOA provides that 
performance is assessed and sanctions are applied in the second 
consecutive year of failure. Therefore, the Departments cannot 
implement the commenters' suggestion.
    Comments: Several commenters remarked that a definition of second 
year failure should be added to the regulatory text in order to prevent 
a State from incurring sanctions without adequate time to improve 
performance. Another commenter stated that sanctions should not be 
applied until a State has demonstrated that it is able to implement 
their performance improvement plan. While acknowledging the existing 
statutory constraints, a commenter expressed concern about the lack of 
time to intervene and allow program adjustments to demonstrate 
improvement.
    Departments' Response: Section 116(f)(1)(B) of WIOA is clear that 
sanctions apply after 2 program years of consecutive performance 
failure; the statutory language does not permit the Departments to 
delay sanctions because the State has not been able to implement its 
performance improvement plan. The Departments encourage States to use 
their quarterly data to monitor progress on their performance 
improvement plan benchmarks without waiting until they submit their 
annual performance report. No change to the regulatory text was made in 
response to these comments.
    Comments: Concerning the timing of performance outcome reporting, 
several commenters stated that performance outcomes for core programs 
should be reported by December 31 of each year.
    Departments' Response: The Departments have concluded that the 
timing of reporting performance outcomes will be announced through 
joint guidance clarifying when and how States should provide their 
respective program performance reports. No change to the regulatory 
text was made in response to these comments.
    Comments: A commenter asserted that to evaluate performance 
effectively,

[[Page 55862]]

indicators should be reported on a quarterly basis.
    Departments' Response: The Departments note that Sec.  677.235 
requires quarterly reporting for the WIOA title I, Wagner-Peyser Act 
Employment Service, and VR programs. No change to the regulatory text 
was made in response to these comments.
    Comments: Commenters also addressed the limited availability of and 
timely access to data, which can significantly hinder a State's ability 
to identify areas of improvement and make the necessary program 
adjustments to avoid failing.
    Departments' Response: The Departments acknowledge the commenters' 
concern regarding the limited availability of timely data that may 
assist in identifying areas of program improvement. The Departments 
have clarified the regulations regarding data availability and 
sanctions in Sec.  677.190(c), above. Additionally, the Departments 
note that all States have access to their program data and can use it 
to assess at intervals of their own choosing to best manage their 
performance, without the Departments having to require such action.
    Comments: Some commenters suggested using only the State average 
measure of the performance indicators rather than the average program 
scores for each State in order to incentivize partnerships among 
programs.
    Departments' Response: Under these regulations, failure is 
determined by both individual program performance as well as overall 
State performance in the overall State indicator score. The 
Departments' approach is premised on ensuring accountability for the 
individual core programs while incentivizing the partnerships that the 
Departments have concluded are critical to WIOA's long-term success. No 
change to the regulatory text was made in response to these comments.
    Comments: Several commenters suggested that the Departments award 
monetary incentives and public recognition in order to emphasize the 
importance of performance success, rather than setting unrealistic 
goals.
    Departments' Response: The Departments note that WIOA, unlike WIA, 
does not authorize the use of incentives for successful performance. 
However, States may continue to utilize incentives to recognize 
successful local performance under WIOA sec. 134(a)(3)(A)(xi). Finally, 
requests for guidance concerning performance metrics were made in order 
to allow for proper administration of programs. The Departments intend 
to issue further details on performance accountability through the WIOA 
Joint Performance ICR, guidance, and technical assistance.
    Comments: In addition to soliciting public comments on the NPRM 
text, the Departments posed several questions regarding the application 
of sanctions for failure to achieve adjusted levels of performance. 
Many commenters responded to the question about using a weighted 
average or a straight average for calculating State overall indicator 
scores. Some commenters supported the use of an unweighted average in 
order to support the goal of shared accountability among core programs. 
A commenter stated that performance measures should not be weighted 
until it is clear how weighted averages would be determined. Other 
commenters stated that a weighted average would take into account 
differences among programs and would prevent the misrepresentation of 
particular programs. Citing the enhanced accuracy of the system of 
performance, a commenter suggested that program performance be weighted 
by the number of participants served to avoid giving unequal weight to 
smaller core programs. Other commenters urged the Departments to weight 
the indicators in order to maintain the emphasis on job placement and 
employer partnerships as established in WIOA. A few commenters 
suggested that local areas be weighted less due to their lesser impact 
on wages paid within the area. A commenter supported the use of a 
weighted average if performance is to be determined regionally, in 
order to take into account the relative size of regional WDBs. In 
addition, several commenters stated that if a weighted average is 
pursued, a draft weighted average should be published for public 
comment. Similarly, a commenter suggested that the weights assigned to 
each program should be determined or agreed to by all partners. A few 
commenters suggested that, in addition to a public comment period, the 
weights should be reviewed at the end of each program year and adjusted 
as needed.
    Departments' Response: The Departments considered the comments 
regarding the use of a weighted or unweighted average for the 
determination of performance outcomes across programs and individual 
indicators. The Departments have decided that using unweighted measures 
across the programs and indicators still ensures performance 
accountability across all core programs and individual indicators. The 
Departments conclude this, in part, because an average performance 
number weighted by the number of participants would essentially cause 
each State's performance under Wagner-Peyser Act Employment Service 
programs to have a disproportionate impact. The Wagner-Peyser Act 
Employment Service program served more than 14 million participants in 
PY 2014, which surpasses the number of participants served in all other 
core programs combined. Using a weighted formula would mean that the 
Wagner-Peyser Act Employment Service program's outcomes would be 
determinative of a State's failure to achieve performance requirements. 
The Departments do not consider this to be consistent with the 
performance accountability goal of WIOA, which provides for shared 
accountability across the core programs. The Departments have concluded 
that using unweighted outcomes across the programs and indicators 
properly implements WIOA in recognizing the importance of both 
employment-related and education outcomes of the participants. No 
change to the regulatory text was made in response to these comments.
    Comments: Additionally, some commenters suggested the Departments 
weight the employment indicators more heavily than the credential and 
measureable skill gains indicators.
    Departments' Response: The Departments considered these comments, 
but decided not to alter the regulation as the three employment-related 
indicators make up half of all of the WIOA performance indicators. The 
three employment related indicators are the second and fourth quarter 
employment rate and the second quarter median earnings indicator. 
Because these measures make up half of all WIOA performance indicators, 
the Departments concluded they already have a sufficient impact on a 
State's performance.
    Comments: Many commenters addressed the proposed thresholds for 
performance failure of 90 percent for each of the State overall program 
scores and the overall State indicator scores, and 50 percent of the 
individual indicator scores. Numerous commenters opposed the 90 percent 
threshold, citing the current lack of core program performance data, 
the unrealistic nature of a 90 percent threshold, and the seemingly 
arbitrary assignment of the threshold. A few commenters stated that the 
90 and 50 percent threshold for performance failure should not be 
established without the required statistical adjustment models. Many 
other commenters responded to the Departments' solicitation regarding 
the potential increase of the 90 percent threshold to emphasize the 
importance

[[Page 55863]]

of performance success stating that the 90 percent threshold should not 
be increased. Other commenters urged the Departments to adopt alternate 
thresholds, ranging from 70 to 80 percent, with the majority supporting 
an 80 percent threshold. A number of commenters urged the Departments 
to establish thresholds in guidance rather than regulation so that they 
could be more easily adjusted in the future, as necessary. Many 
commenters stated that the Departments should establish a lower 
threshold than 90 percent to allow for a phased-in approach that 
gradually increases the threshold for performance failure over time. 
One commenter supported a tiered approach in order to promote 
continuous improvement. Although the vast majority of commenters 
supported maintaining or decreasing the proposed thresholds, one 
commenter stated that the 50 percent threshold for individual 
performance indicators should be increased because, as proposed, it 
would weaken the requirements of States and was not Congress's intent 
in WIOA.
    Departments' Response: The Departments considered the comments 
regarding the overall 90 percent threshold and the 50 percent threshold 
for individual indicators for a program year. The Departments 
considered the various commenter-proposed threshold levels in light of 
historical performance data and historical thresholds for each of the 
core programs and have decided to maintain the thresholds as proposed. 
The new thresholds are an increase from the 80 percent threshold 
familiar to the title I programs and a decrease from the 100 percent 
threshold for title II programs under WIA. The Departments consider 
these thresholds to be reasonable due to the use and application of an 
objective statistical model to account for actual conditions 
experienced by a program. Previously, the title I and title II 
thresholds were applied to a negotiated performance level and 
performance was assessed in the absence of weighting for actual 
economic conditions or participant characteristics. With the structure 
of the performance accountability system in sec. 116 of WIOA, the 
Departments consider a 90 percent overall threshold to strike the 
appropriate balance between maintaining flexibility for unknown 
mitigating variables and the newer precision introduced by utilizing an 
objective statistical model. The 50 percent performance threshold 
ensures that significant performance failure on a single indicator 
cannot be compensated for by successful performance in any other 
indicator or set of indicators. The introduction of an overall State 
score across programs and indicators ensures that the performance 
accountability system as articulated in sec. 116 of WIOA maintains 
alignment and integration across all of the core programs. This overall 
score paradigm, which is set at the 90 percent threshold, and balanced 
with a 50 percent threshold on any single indicator, allows a State to 
account for mitigating factors that prevent it from achieving 100 
percent of its adjusted levels of performance. It also provides that a 
State has not failed to achieve its negotiated levels of performance 
unless its average performance across all programs for one indicator or 
its performance for all indicators in one program falls below 90 
percent of the State's adjusted targets. No change to the regulatory 
text was made in response to these comments.
    Comments: One commenter expressed concern that a program could 
potentially pass the threshold for all of the individual indicators, 
but not meet the overall program or overall indicator threshold, which 
would send a mixed message to a program.
    Departments' Response: In order to ``pass'' the threshold, each 
State must meet or exceed the 90 percent threshold for the overall 
State program score for each program and the overall State indicator 
score for each indicator. Furthermore, under Sec.  677.190(d)(2), the 
State must not fall below 50 percent on any individual indicator. This 
is an additional safeguard against egregious failure by one indicator 
being outweighed by high scores elsewhere. Thus, there is no 
possibility of what the commenter suggested occurring. No change to the 
regulatory text was made in response to this comment.
    Comments: Some commenters raised potential alternative metrics for 
evaluating success including: the use of statistical variation metrics 
instead of the proposed threshold framework; standard deviation units 
or variation against regression predictions; and confidence intervals 
rather than a point estimate.
    Departments' Response: The Departments considered utilizing these 
methods, but concluded that a consistent threshold, which does not 
change from year to year based on the size of the dataset, is the most 
appropriate way to account for variations in the core programs or the 
indicators and the varying availability of data. By creating a 
consistent threshold, expected levels of performance will be easier for 
program staff to understand and allows for comparisons across program 
years. No change to the regulatory text was made in response to these 
comments.
Section 677.195 What should States expect when a sanction is applied to 
the Governor's Reserve Allotment?
    Section 677.195 governs what will occur when a sanction is applied 
to the Governor's Reserve for failure to report or failure to meet 
adjusted levels of performance. It clarifies that the sanction will be 
five percent of the amount that could otherwise be reserved by the 
Governor.
    Section 677.195(a)(3) was added so that this section contains the 
causes of failure as defined in Sec.  677.190(e) by noting that States 
also are subject to a 5 percent reduction of the Governor's Reserve 
Allotment for the immediately succeeding program year if the State's 
score for the same indicator in the same program falls below 50 percent 
for the second consecutive year. A conforming edit was made to Sec.  
677.195(b).
    Comments: Several commenters expressed general support for the 
Departments' interpretation of WIOA sec. 116(f) and the approach 
proposed. However, numerous commenters opposed this approach and 
requested clarification regarding the implementation of financial 
sanctions only on WIOA title I programs funded by the Governor's 
Reserve allotment. A commenter suggested that the burden of financial 
sanctions be applied to the specific programs not meeting the 
performance requirements. A few commenters requested clarification from 
the Departments concerning allocation of funding lost via sanctions. A 
number of commenters urged the Departments to permit the restoration of 
funds once the State meets its reporting responsibilities. Commenters 
also remarked that sanctioned funds should be spent on the Technical 
Assistance and Performance Improvement Plan.
    Departments' Response: Section 116(f)(1)(B) of WIOA does not 
provide authority for the Departments to use, for other purposes, funds 
that are reduced as a sanction from the Governor's Reserve. Therefore, 
the funds may not be used for technical assistance, performance 
improvement plans, the restoration of the Governor's Reserve funding, 
or any other activity. In contrast, WIA provided that funds reduced due 
to sanctions were to be used by the Secretary for performance incentive 
grants to the States under sec. 503 of WIA, which was not carried over 
to WIOA.
    The Departments considered the comments regarding the sanctions to 
WIOA title I programs being based on

[[Page 55864]]

any program's failure. WIOA sec. 116(f)(1)(B) clearly requires that any 
performance sanction must apply to the Governor's Reserve allotment 
under title I for any core program or indicator failure. Therefore, the 
Departments do not have the authority to sanction the specific program 
not meeting its adjusted levels of performance. The Departments 
strongly encourage high levels of alignment and coordination to ensure 
all core partners are engaged at all levels. The Departments emphasize 
the role of State and local planning to ensure alignment and common 
goals in attaining integration and service delivery. Regarding the 
commenters' request for clarification concerning the allocation of 
funding lost via sanctions, the Governor's Reserve for the next program 
year will be reduced by five percentage points and money lost via 
sanction will not be reallocated. No change to the regulatory text was 
made in response to these comments.
    Comments: Commenters also supported the elimination of proposed 
Sec.  677.195(b) because a State could fail to meet 2 different 
indicators for 2 consecutive years and receive a 5 percent sanction, 
but if the State fails to meet one indicator for 2 consecutive years 
and fails to report one time, the State would receive a 10 percent 
sanction. These commenters stated that the latter scenario is a less 
significant infraction and should not prompt the imposition of a 10 
percent sanction.
    Departments' Response: The Departments considered the comments on 
imposing sanctions when in the same year the State fails to submit a 
performance report and is in its second year of failure to meet 
adjusted levels of performance. The Departments are maintaining the 
language in Sec.  677.195(b) because the Departments conclude that 
failure to submit a State annual performance report is a serious 
compliance issue and should result in sanctions. Because the 
regulations provide for a 10 percent sanction on States that fail to 
submit performance reports as well as fail to meet the adjusted levels 
of performance for 2 consecutive years (5 percent for failure to submit 
report plus 5 percent for failure to meet adjusted levels of 
performance), States will have an incentive to report to the 
Departments even if they fail the adjusted levels of performance for 2 
consecutive years because by doing so, they would receive only a 5 
percent sanction for failure to meet adjusted levels of performance 
rather than the 10 percent sanction. No change to the regulatory text 
was made in response to these comments.
    Comments: Several commenters addressed concerns regarding the 
insufficient funding of the Governor's Reserve allotment and stated 
that sanctions should be lessened or not implemented until the 
allotment is fully funded, as is statutorily required. One commenter 
suggested that the Departments scale sanctions according to the funding 
available in the Governor's Reserve allotment.
    Departments' Response: The Departments considered the comments 
regarding the funding of the Governor's Reserve allotment and the use 
of sanctions. Statutorily, the Governor's Reserve is set at 15 percent 
of the WIOA adult, dislocated worker, and youth formula allocations to 
the States. For several years, the Governor's Reserve levels were 
restricted below 15 percent through the congressional appropriation, 
but were restored in the FY 2016 Consolidated Appropriations Act. The 
Departments support the full funding of the Governor's Reserve at 15 
percent as envisioned in WIOA. The Departments note that if the 
Governor's Reserve amount is not fully funded, the amount of funds 
subject to sanctions will be proportionately less because the sanction 
is either 5 or 10 percent of the Reserve amount no matter how much the 
Reserve amount is. No change to the regulatory text was made in 
response to these comments.
    Comments: A commenter stated that the sanctions for failure to 
report and failure to meet a State's adjusted levels of performance 
should be separated. Another commenter requested that the Departments 
provide guidelines for a process allowing for minor corrections to 
annual reports without incurring sanctions for failure to report.
    Departments' Response: The Departments considered the comments 
regarding the separation of sanctions for failure to report and for 
failure to achieve performance. The Departments note that these two 
sanctions are applied separately. When a State fails to meet 90 percent 
of its adjusted levels of performance or fails to submit a report in 
the same year, the State would incur 2 separate 5 percent sanctions 
totaling 10 percent. Otherwise, a State may receive a sanction for 
failure to report based on the criteria described in Sec.  677.185 or a 
State may receive a sanction for failure to achieve adjusted levels of 
performance per Sec.  677.190. Regarding a process to allow for minor 
corrections to annual reports, the Departments will provide a process 
for this and details on the process in guidance. No change to the 
regulatory text was made in response to these comments.
    Comments: A commenter urged the Departments to allow States 
flexibility in imposing sanctions on the State agencies responsible for 
the late submission.
    Departments' Response: The Departments note that ultimately the 
Governor and State Workforce Board, which consists of representatives 
from all core programs, are responsible for the submission of the 
annual report. The Departments expect the State agencies to work 
together to ensure timely reporting and, if there are expected delays 
due to exceptional circumstances, that the State provides timely 
communication to the Departments. The Departments note the flexibility 
provided to States under Sec.  677.185(b) and will work with States 
that are struggling to submit timely reports through guidance and 
technical assistance. No change to the regulatory text was made in 
response to these comments.
Section 677.200 What other administrative actions will be applied to 
States' performance requirements?
    Section 677.200 outlines the circumstances under which a State will 
be subject to additional administrative actions when determined to be 
at risk due to low performance on an individual primary indicator, the 
overall State indicator score, and the overall State program score. No 
substantive change was made to this section.
    Comments: A few commenters remarked that language in the NPRM 
indicated that the Departments would each issue their own guidance 
regarding performance risk or performance improvement plans. These 
commenters were concerned that the development of separate guidance 
documents signals a lack of long-term coordination between the 
Departments regarding performance accountability and reporting. A 
commenter urged DOL and WDBs to become familiar with setting measurable 
objectives, defining activities to meet the objectives, and determining 
if the objectives were achieved.
    Departments' Response: WIOA provides a unique opportunity for the 
core programs to work together in new ways, and to the extent practical 
the Departments will use joint guidance so that all core programs are 
provided a clear and consistent message.
    Regarding comments about DOL and WDBs setting measurable 
objectives, defining activities to meet objectives, and determining if 
objectives were achieved for purposes of the DOL-administered core 
programs, this will be communicated generally. WIOA articulates certain 
performance

[[Page 55865]]

requirements, the Joint WIOA Final Rule operationalizes the provisions 
of WIOA, and the Departments will provide guidance and technical 
assistance to assist States and Local WDBs in achieving their 
performance goals.
5. Local Performance Accountability for Workforce Innovation and 
Opportunity Act Title I Programs (20 CFR Part 677, Subpart C; 34 CFR 
361.205 Through 361.210; 34 CFR 463.205 Through 463.210)
Section 677.205 What performance indicators apply to local areas and 
what information must be included in local area performance reports?
    This section governs which performance indicators apply to local 
areas and the information that must be included in the local area 
performance reports. While the arrangement of this section was revised 
no substantive changes were made to the regulatory text.
    Comments: One commenter noted that the title did not fully convey 
what was contained within this section of the regulation.
    Departments' Response: The Departments concur and modified the 
title of this section to clarify that this section also governs what 
information the local area must include in its local area performance 
reports.
    Proposed Sec.  677.205(a), (b), and (c) are implemented as 
proposed.
    Comments: One commenter recommended removing section Sec.  
677.205(d) of the NPRM as unnecessary and duplicative of the 
requirements of Sec.  677.175.
    Departments' Response: The Departments agree that this section is 
duplicative, and is removing it. As a result, the Departments are 
renumbering subsequent sections to conform to this deletion.
    Comments: One commenter recommended revising proposed Sec.  
677.205(e)(2) to clarify that in addition to reporting on the 
performance indicators, the local area report must also include the 
other program information required in the State annual performance 
report, such as average cost information.
    Departments' Response: The Departments agree that further 
clarification would assist States and local areas in complying with 
their reporting requirements. The Departments note that as finalized, 
this has been renumbered as Sec.  677.205(d)(1). Since Sec.  
677.205(d)(1) includes all of the information previously in Sec.  
677.205(e)(1) and (2), the Departments removed proposed Sec.  
677.205(e)(2) from this Final Rule and have renumbered the remainder of 
Sec.  677.205(d).
    Comments: One commenter encouraged adding a parallel provision to 
the one that is included in Sec.  677.160(b) to clarify that the 
disaggregation of data in the local area performance report is also 
subject to WIOA sec. 116(d)(6)(C).
    Departments' Response: The Departments have added a parallel 
provision at Sec.  677.205(e).
    The Departments made a technical edit to proposed Sec.  677.205(f) 
to state that States must comply with any requirements from sec. 
116(d)(3) of WIOA as explained in guidance. The Departments made this 
revision to clarify our expectations that, to the extent that either 
Department's guidance merely explains in plain terms the requirements 
that stem directly from WIOA, the Departments expect States to comply 
with those statutory requirements.
    Comments: Several commenters from various stakeholder entities 
questioned the applicability of local performance indicators to core 
programs outside of WIOA title I. Many of these commenters specifically 
requested clarification on whether other core programs were exempt from 
local reporting requirements. One commenter also acknowledged some 
confusion regarding local-level requirements and offered several 
suggestions on reorganizing this subpart to enhance clarity. 
Additionally, the Departments received a number of comments pertaining 
to additional indicators of performance, with commenters suggesting 
that language be added to the Final Rule requiring States to develop 
any additional indicators of performance only in consultation with 
Local WDBs and CEOs.
    Departments' Response: The Departments acknowledge that there may 
be some confusion across the core programs regarding local-level 
performance-related requirements and are taking this opportunity to 
specify that local-level accountability requirements contained in WIOA 
sec. 116 pertain solely to title I adult, dislocated worker, and youth 
programs. As provided by WIOA sec. 116(b)(2)(B) and Sec.  677.165 of 
this regulation, the Governor has discretion to add additional 
indicators of performance.
    The Departments recognize that Local WDBs and CEOs are critical 
partners in the establishment of additional indicators of performance 
and strongly encourage States to engage and consult with Local WDBs and 
CEOs in their development. No change to the regulatory text was made in 
response to these comments.
Section 677.210 How are local performance levels established?
    Section 677.210 explains how the local performance levels are 
established. This section has been revised and renumbered in accordance 
with the distinctions among expected, negotiated, and adjusted levels 
of performance as described in the preamble to Sec.  677.170. This has 
resulted in the introduction of the terms ``negotiated levels'' and 
``adjusted levels'' as it applies appropriately within the process. 
Additionally, the Departments have added language to mirror provisions 
in Sec.  677.190 that require 2 years of complete data for any local 
core program before applying the objective statistical model and 
establishing adjusted levels of performance.
    Comments: Several comments pertained to the negotiations process in 
response to proposed Sec.  677.210(b). A few commenters were unclear 
why Local WDBs are included in the negotiations process described in 
sec. 116(c) of WIOA but are not included in the negotiations process 
described in sec. 116(b). Many commenters also expressed a desire that 
the negotiations process be meaningful, with one commenter noting that 
the negotiations process under WIA was often subjective with 
performance standards dictated on a take it or leave it basis. 
Similarly, a commenter emphasized that the process should not simply be 
a matter of setting a target independently and passing it down to Local 
WDBs. Another commenter also suggested that the overall negotiations 
process would be enhanced if local areas were allowed to provide 
additional information not accounted for in the statistical models. One 
commenter suggested that the regulations contain an appeal mechanism 
for Local WDBs in cases where the State does not negotiate performance 
with the Local WDB and CEO as required by WIOA.
    Departments' Response: The Departments note that local areas are 
permitted to provide additional information during the negotiations 
process. This allows the negotiations process to take into account 
other information that local areas consider important when establishing 
the negotiated levels of performance. The Departments also note that 
under WIOA sec. 116(g)(2)(B), the local areas may appeal the Governor's 
decision to impose a reorganization plan under WIOA sec. 
116(g)(2)(B)(i). Therefore, if the Governor fails to negotiate with the

[[Page 55866]]

Local WDBs, the Local WDB fails to meet its local performance 
accountability indicators as described in WIOA sec. 116(g), and the 
Governor imposes a reorganization plan, then the Local WDB may exercise 
its right to appeal under WIOA sec. 116(g)(2)(B). For further 
discussion, the Departments refer readers to the preamble to 20 CFR 
679.130 on the functions of the State WDB (see DOL WIOA Final Rule 
published elsewhere in this issue of the Federal Register).
    WIOA sec. 116(c)(2) requires the Local WDB, CEO, and the Governor 
to negotiate and reach agreement on local levels of performance. The 
Local WDBs are not included in the process outlined in sec. 116(b) 
because that process pertains to State accountability, with 
negotiations occurring between the State and the cognizant Federal 
agency for the core program. The Departments agree that WIOA requires a 
meaningful negotiation. The Departments encourage the parties to 
negotiate which the Departments interpret as requiring open-
communication between the parties for the purpose of reaching an 
agreement on the local performance targets. The Departments emphasize 
that the purpose of the statistical adjustment model required under 
sec. 116(b)(3)(A)(viii) is to enhance objectivity in the development of 
performance targets as part of the negotiations process. However, 
because the Departments have concluded that the requirement to 
negotiate is already conveyed through WIOA and the regulation, the 
Departments do not consider additional regulatory text necessary to 
ensure States comply with the requirements contained in sec. 116(c) 
that pertain to inclusion in the negotiations process. Therefore, no 
change to the regulatory text has been made in response to this 
comment.
    The Departments also agree that the statistical adjustment model 
may not adequately account for all of the economic and demographic 
variables that may affect a local area's performance. Section 
677.210(c) requires the negotiations between the Governor, Local WDB, 
and CEO to include a discussion of the circumstances not accounted for 
in the model. Because this is already required by the regulation, the 
Departments did not make a change to the regulatory text in response to 
this comment.
    Comments: Another commenter recommended that local areas have 
access to the models in order to run local targets.
    Departments' Response: The Departments note that it will publish 
the methodology of the statistical adjustment model, and the 
Departments invite the public, including local areas, to review, and 
access the model, as appropriate.
    Comments: The Departments received a number of comments on the 
statistical adjustment model. Some commenters expressed concern that 
using the model as proposed at the end of the program year would result 
in targets being applied retroactively. Similarly, commenters expressed 
concern that targets set through the model may not reflect service to 
hard-to-serve populations, such as foreign-born participants often 
served by title II programs or other populations with barriers to 
employment. Some commenters suggested that the model needed to be 
updated on a regular basis in order to reflect the barriers of enrolled 
participants and the participants actually served.
    Departments' Response: With respect to the utilization of the model 
at the end of program year in order to account for actual 
circumstances, this would not be a retroactive application of a 
performance target, but rather an adjustment to an already established 
target based on what actually transpired during the program year. This 
would take into account, as a commenter suggested, service to hard-to-
serve populations, such as those with barriers to employment. In other 
words, the model will increase the performance levels required if a 
State or local area were to serve lower-than-anticipated percentages of 
hard-to-serve populations with barriers to employment because it would 
presumably be easier to serve these individuals. Similarly, performance 
levels (or targets) would be decreased if a State or local area were to 
serve a higher-than-anticipated percentage of individuals with 
barriers, because these individuals are harder to serve. Given the 
importance both Departments place on consistent understanding, 
application, and implementation of these complex yet critical 
requirements, the Departments are committed to providing joint and 
substantive technical assistance in addition to detailed policy 
guidance. Furthermore, commenters' expressed need to update the model 
to reflect the participants who are actually being served is one of the 
hallmarks of the statistical adjustment models as envisioned. Because 
the model addresses the commenters' concerns, no changes to the 
regulatory text were made in response to these comments.
    Comments: One commenter recommended a national workgroup with broad 
participation across core programs and other WIOA stakeholders in order 
to address the statistical model, as well as other aspects of WIOA 
performance accountability because of the significance and impact of 
this Joint WIOA Final Rule. One commenter recommended that local areas 
be given an opportunity to review any detailed methodology utilized for 
setting performance targets prior to implementation.
    Departments' Response: The Departments understand the significance 
of these joint regulations on performance accountability that implement 
sec. 116 of WIOA. It is for this reason that the Departments have 
convened multiple stakeholder dialogues to address the intricacies of 
the statistical adjustment models as they are developed, consistent 
with, and as required by WIOA sec. 116(b)(3)(A)(viii). In addition, 
once the statistical adjustment methodology has been approved, there 
will be a comment period to ensure broad stakeholder input into its 
finalization.
    Comments: Another commenter remarked that CEOs of each local area 
in a planning region should be permitted to choose to develop, rather 
than be required to develop, regional performance measures in addition 
to local area measures and recommended a revision to 20 CFR 679.510 to 
reflect this suggested flexibility, remarking that Local WDBs and CEOs 
already have a significant responsibility regarding their own local 
area performance targets; requiring regional targets in addition to 
local area targets would be unduly burdensome.
    Departments' Response: WIOA sec. 108(b)(1) requires the CEOs to 
develop the regional performance indicators and the Departments' 
regulations are consistent with this statutory requirement. Therefore, 
the regulatory text has not been changed in response to this comment.
    Comments: A commenter requested that the Departments provide 
additional information regarding the requirement to promote continuous 
improvement through performance target setting, adding that neither the 
Preamble nor the NPRM text discuss the requirement beyond the fact that 
it exists. The commenter opined that the Departments seemed to 
interpret continuous improvement under WIA as requiring improvement on 
every measure, every year, and offered their own interpretation of 
continuous improvement, which could be defined as achieving the same 
results with fewer resources or serving a population with more barriers 
(or simply a larger population) with the same resources (i.e., 
increased efficiency). A commenter

[[Page 55867]]

recommended, based on the context of an optimal return on investment in 
Federal funds, that setting targets focusing on improvement of measures 
with lower performance, while setting targets consistent with existing 
performance levels on measures with higher performance, is consistent 
with the requirement to set targets that promote continuous improvement 
and an optimal return on investment of Federal funds.
    Departments' Response: The Departments agree that continuous 
improvement can be defined in multiple ways based on the circumstances 
and context. Because the meaning of this term varies significantly 
based on the circumstances and context in which it is used, the 
Departments do not think it is appropriate for inclusion in the 
regulation and will be providing additional information on continuous 
improvement during guidance development. Therefore, no change was made 
to the regulatory text in response to this comment.
6. Incentives and Sanctions for Local Performance for Workforce 
Innovation and Opportunity Act Title I Programs (20 CFR Part 677, 
Subpart D; 34 CFR 361.215 Through 361.225; 34 CFR 463.215 Through 
463.225)
Section 677.215 Under what circumstances are local areas eligible for 
State Incentive Grants?
    This section of the regulation governs when local areas are 
eligible for incentive grants.
    Comments: The Departments received a comment asking under what 
circumstances local areas are eligible for State incentive grants. 
Another commenter remarked that the question posed by the rule 
regarding possible circumstances for eligibility is not actually 
answered by the rule, which instead goes on to discuss pay-for-
performance strategies.
    Departments' Response: The Departments agree that the regulatory 
text in this paragraph should be revised to ensure understanding and 
consistent application. Therefore, paragraph (a) has been revised to 
specify that Governors are not required to award incentive funds based 
on local performance on the primary indicators, although they have the 
flexibility to do so using State set-aside funds based on WIOA at sec. 
134(a)(3)(A)(xi). Paragraph (b) has been revised to clarify that 
Governors also have the flexibility to create incentives for the Local 
WDBs to implement pay-for-performance contract strategies to provide 
training services as described in sec. 134(c)(3) or youth activities as 
described in sec. 129(c)(2). However, these incentives must be paid for 
with non-Federal funds.
    The Departments have chosen not to regulate under what specific 
circumstances a local area be eligible for incentive grants using WIOA 
funds given that this is at the discretion of the Governor. However, 
the Departments are considering providing guidance on this topic. No 
change to the regulatory text was made in response to this comment.
    Comments: Other commenters remarked that separate funds should be 
made available for States as an incentive for meeting or exceeding 
statewide performance targets as was the case under WIA, with 
commenters expressing concern that the dedicated incentive grants to 
States were utilized to leverage other funds and programs and the lack 
of this provision in WIOA presents a funding gap. These commenters 
requested further clarity on the issue and recommended that funds be 
made available to target system development needs.
    Departments' Response: The requirement under WIA that high-
performing States be rewarded with State incentive grants within 
specified Federal parameters no longer exists under WIOA. Rather, sec. 
134(a)(3)(A)(xi) provides States with the flexibility to utilize 
Governor's Reserve funds to provide incentive grants to local areas for 
performance by the local areas on local performance accountability 
indicators. Further, the Departments would like to emphasize that, in 
addition to the statewide capacity building efforts that are a required 
use of the funds allotted to States, both Departments are committed to 
providing substantive technical assistance on a national, regional, and 
statewide basis in order to target specific development needs, 
including needs around performance accountability. No change to the 
regulatory text is being made in response to this comment.
    Comments: One commenter expressed confusion about the programs 
included in pay-for-performance contract strategies and inquired as to 
whether the provision applies to title II providers, which the 
commenter recommended.
    Departments' Response: The Departments interpret the statutory 
provision for pay-for-performance contract strategy incentives at WIOA 
sec. 116(h) as only permitted for WIOA title I programs because of the 
specific reference to title I training services for adults and 
dislocated workers as well as the reference to title I youth services. 
Moreover, WIOA references Local WDBs, which are responsible for title I 
programs and providers, as the other programs do not have Local WDBs. 
However, there is nothing prohibiting the adoption of pay-for-
performance contract strategies by other programs that is consistent 
with other Federal, State, and local policies. No change to the 
regulatory text has been made in response to this comment.
Section 677.220 Under what circumstances may a corrective action or 
sanction be applied to local areas for poor performance?
    This section explains when a corrective action plan or sanction may 
be applied to a local area. This section has been revised and 
renumbered in accordance with the distinctions among expected, 
negotiated, and adjusted levels of performance as described in the 
preamble to Sec.  677.170. This has resulted in the introduction of the 
terms ``negotiated levels'' and ``adjusted levels'' as it applies 
appropriately within the process. Additionally, the Departments have 
added language to mirror provisions in Sec.  677.190 that require 2 
years of complete data for any local core program before applying the 
objective statistical model and establishing adjusted levels of 
performance. The Departments also have revised Sec.  677.220(b) to 
specify that failure occurs when a local area fails to meet the 
adjusted levels of performance for the same indicator for the same core 
program authorized under WIOA title I for the third consecutive program 
year.
    Comments: Several commenters indicated that more clarity is needed 
regarding how sanctions would apply locally to other programs and 
funding streams besides WIOA title I. One commenter remarked that the 
impact of local sanctions should be spread across the other core 
programs. Another commenter noted that all potential sanctions would be 
placed squarely on the shoulders of the Local WDB regardless of fault, 
creating a situation it viewed as inequitable.
    Departments' Response: Any financial sanction applied to the 
Governor's Reserve Allotment is based on State performance across the 
core programs, and not local performance. This is governed by WIOA sec. 
116(f) and subpart B of this part. Specifically, Sec. Sec.  677.180 
through 677.200 govern when the Departments will sanction a State. The 
Departments note that the local area provisions under WIOA sec. 116(c) 
only apply to WIOA title I programs. The other core programs may 
participate, partner, and provide services in a local area, but, there 
is no local area performance accountability

[[Page 55868]]

provision for those programs. However, local areas are held accountable 
for performance on the primary performance indicators for title I 
programs. Local-level accountability and any sanctions imposed are 
determined by the State, consistent with WIOA sec. 116(g) and subpart D 
of this part. Therefore, the Departments are not changing the 
regulatory text in response to these comments.
    Comments: Several commenters responded to the Departments' request 
for feedback regarding what other actions in addition to those already 
in statute should be considered by the Governor for local areas that 
continue to fail to meet performance for 3 consecutive years. Many 
commenters offered suggestions but stated the need for clarification 
first on what is meant by ``failure to meet adjusted levels of 
performance on required indicators for a third consecutive year,'' 
recommending that local area failure for a third consecutive year be 
based on the same indicator and not any indicator.
    Departments' Response: The Departments have defined ``failure to 
meet'' adjusted levels of performance at the State level across the 
core programs based on the primary indicators of performance and 
criteria delineated in Sec.  677.190 of these regulations. Determining 
what is meant by ``failure to meet adjusted levels of performance on 
required indicators for a third consecutive year'' at the local level 
is within the Governor's discretion per Sec.  677.220(a)(1), which is 
similar to the historical requirements that existed under WIA. Because 
defining these terms is within the Governor's discretion, the 
Departments think this is not appropriate to be addressed in these 
regulations. No change to the regulatory text was made in response to 
these comments.
    Comments: One commenter proposed another reason for the Departments 
to define ``failure to meet adjusted levels of performance'' arguing 
that a local area could be making significant progress towards 
improving performance but could potentially miss the required level by 
a fraction of a point. The commenter added that the lagged performance 
data complicates matters further and that some systemic performance 
issues may take more than 3 years to correct. For these reasons, this 
commenter suggested changing the regulatory language of ``fails to 
meet'' to ``fails to make satisfactory progress.''
    Departments' Response: The Departments' requirement to determine 
when a corrective action or sanction can be applied to a local area is 
based on statutory language and the Departments will not modify this 
requirement. Therefore, no change to the regulatory text was made in 
response to this comment.
    Comments: Several commenters offered suggestions for additional 
actions that might be taken by the Governor in addition to those 
already specified in regulatory text. Some commenters suggested that 
the Governor should be authorized to apply a financial sanction, with 
one commenter adding that the Governor should be authorized to dissolve 
a local area for continued failure, and other commenters recommended 
that the Governor also be authorized to consolidate local areas. 
Another commenter supported the Governor's flexibility, noting that 
redesignation of a local area is an inequitable penalty when compared 
to the penalties WIOA prescribes for State workforce agencies that fail 
to meet required performance levels. Other commenters, including a 
number of Local WDBs, expressed concern that the language in the 
regulatory text allowing Governors to take significant actions as 
deemed appropriate was too broad in scope and could be used to 
redesignate or eliminate local areas, suggesting at a minimum that 
parameters be specified at the Federal level. These commenters also 
stated that any additional actions taken by the Governor should be 
required to include consultation with the local elected official, 
although one commenter suggested the mandatory consultation with local 
elected officials should extend to any actions related to technical 
assistance. One commenter also inquired about the absence of any 
reference to failing performance for 2 consecutive years, stating it 
was clear that technical assistance was required after the first year, 
and it was clear a reorganization plan was needed after the third 
consecutive year, but the regulations were silent on what would take 
place after the second consecutive year of failure.
    Departments' Response: The Departments considered the comments 
regarding additional significant actions that might be taken by a 
Governor for continued local performance failure and concluded that 
there is nothing prohibiting a State from considering financial 
sanctions as a potential ``significant action'' as part of the 
reorganization plan. Therefore, no Federal action is needed to permit 
this. The Departments also agree that significant actions taken by the 
Governor pursuant to Sec.  677.220(b)(3) would be most effective if 
they included a consultation with the local elected official and other 
local stakeholders, and therefore, recommend the Governor do so. 
However, the Departments do not think a change in regulatory text is 
necessary as WIOA and regulation do not preclude the Governor from 
doing this. The Departments do not agree that regulatory text is 
necessary requiring consultation with local elected officials occur 
prior to the provision of any technical assistance as this is not 
required by WIOA and the process for providing technical assistance is 
at the Governor's discretion. Therefore, the Departments have chosen 
not to regulate this. Regarding the comment pertaining to failure for a 
second consecutive year, WIOA sec. 116(g)(1) makes clear that failure 
``for any program year'' will trigger the provision of technical 
assistance; therefore, if failure occurs in the second consecutive 
year, the Governor is obligated to provide technical assistance, or 
request the Secretary of Labor to do so. In response to comments that 
the Governor could consolidate, redesignate, or dissolve a local area 
through the reorganization plan, the Departments note that WIOA sec. 
116(g)(2) leaves what actions are most appropriate to take when a local 
area fails to meet its local performance accountability indicators, to 
the Governor's discretion. Therefore, the Departments will not change 
regulatory text in response to these comments.
    Comments: One commenter requested clarification on Sec.  
677.220(b)(2), which allows the Governor to prohibit the use of 
eligible providers and one-stop partners that have been identified as 
achieving poor levels of performance as an action that may be taken as 
part of a reorganization plan. The commenter pointed out that neither 
WIOA nor proposed regulations addressed poor performance levels of one-
stop partners, such as TANF, and suggested that the NPRM was referring 
to a competitively procured contractor or one-stop center operator.
    Departments' Response: The language in the regulation is statutory 
language from WIOA sec. 116(g)(2)(A)(ii), and the Departments do not 
have authority to change the requirements of WIOA. No change to the 
regulatory text was made in response to this comment.
    Comments: The Departments also received a number of general 
comments pertaining to this paragraph. One commenter wanted to ensure 
that any technical assistance for youth programs be developed by 
experienced youth experts that also could include youth who have 
successfully navigated the system and who are now employed. This 
commenter also cautioned against assumptions that a particular youth 
program may be causing the

[[Page 55869]]

performance failure. Another commenter strongly recommended that the 
Departments delay enforcement of the sanctions provisions for at least 
2 years to further calibrate the statistical adjustment model, during 
which time States could approach implementation in a methodical manner 
that allowed for the application of lessons learned without strict 
penalties. Other commenters offered a similar suggestion, recommending 
that an additional 2 years was needed to implement these requirements, 
during which time the Departments should launch an intensive and 
nationwide technical assistance effort. Another commenter recommended 
transitional implementation in conjunction with the development of a 
national workgroup of broad stakeholders and experts to tackle each 
aspect of performance accountability, including the imposition of 
sanctions.
    Departments' Response: The Departments expect the technical 
assistance the Governor provides pursuant to Sec.  677.220(a) will be 
well-informed and developed with input from subject matter experts and 
agrees that former youth participants can offer a valuable perspective 
on technical assistance needs based on their own experience. In 
response to comments requesting delayed implementation of performance 
at the local level, the Departments received similar comments on the 
State-level performance accountability. In response to those comments, 
the Departments have revised Sec.  677.190(c) to provide that the 
Departments expect full implementation of the performance 
accountability requirements to take some years, given the complexity of 
WIOA's requirements and the timing of the availability of data 
necessary to populate the statistical adjustment models, for instance. 
At the local level, the decisions on performance implementation are at 
the Governor's discretion and subject to the requirements of 20 CFR 
part 679 (see DOL WIOA Final Rule, published elsewhere in this issue of 
the Federal Register). Therefore, no change to the regulatory text is 
being made in this part in response to this comment. Additional 
information on implementation will be provided by the Departments in 
guidance.
Section 677.225 Under what circumstances may local areas appeal a 
reorganization plan?
    This section of the regulation governs the process for an appeal if 
the local area wishes to appeal a reorganization plan. The Departments 
received few comments on the proposed text for this paragraph of the 
regulations. The Departments are implementing this regulation as 
proposed, except for a revision to Sec.  677.225(d) which is described 
below.
    The Departments revised paragraph (d) of Sec.  677.225, replacing 
``to impose a reorganization plan'' with ``on the appeal'' for 
consistency with the relevant WIOA provision. WIOA sec. 116(g) governs 
the consequences for a local area's failure to meet local performance 
accountability indicators for the youth, adult, or dislocated worker 
programs. WIOA sec. 116(g)(2) requires the Governor to develop a 
corrective action plan if the local area's failure continues for a 
third consecutive year. The local area and CEO of the local area may 
appeal this decision to the Governor. The Local WDB and CEO may appeal 
the Governor's decision on the appeal to the Secretary of Labor. The 
proposed version of this paragraph stated that the Governor's decision 
to impose a reorganization plan becomes effective at the time it is 
issued. However, WIOA sec. 116(g)(2)(C) provides that it is the 
Governor's decision on the appeal, not the reorganization plan, that 
becomes effective unless the Secretary of Labor rescinds or revises the 
plan.
    Comments: One commenter recommended a revision to the regulatory 
text to clarify that if the Secretary of Labor does not respond to a 
joint appeal pursuant to Sec.  677.225(c) within 30 days, then the 
Governor's decision to impose a reorganization plan automatically 
results in the reorganization plan becoming effective.
    Departments' Response: Section 677.225(c) clearly requires the 
Departments to respond within the specified timeframe. The statutory 
text does not provide for automatic effectiveness of the plan if the 
Secretary of Labor does not respond within the 30-day timeframe. No 
change to the regulatory text was made in response to these comments.
7. Eligible Training Provider Performance for Workforce Innovation and 
Opportunity Act Title I Programs (20 CFR Part 677, Subpart E; 34 CFR 
361.230; 34 CFR 463.230)
Section 677.230 What information is required for the eligible training 
provider performance reports?
    Section 677.230 implements the requirements of sec. 116(d)(4) of 
WIOA, which requires annual ETP performance reports. The ETP 
performance reports provide critical information, including the 
employment, earnings, and credentials obtained by individuals in the 
program of study eligible to receive funding under the adult and 
dislocated worker formula programs under title I of WIOA. This 
information will be of significant benefit in assisting WIOA 
participants and members of the general public in identifying effective 
training programs and providers. The information will also benefit 
providers by widely disseminating information about their programs 
increasing awareness of the program and potentially as a tool to 
enhance their programs.
    Section 677.230(b) has been revised to specify that the registered 
apprenticeships programs referred to are those registered under the 
National Apprenticeship Act. This section, in conjunction with 20 CFR 
680.400 through 680.530, establishes the minimum requirements for 
performance information to be provided in the ETP performance reports. 
Additional information on these requirements and the data to be 
collected is provided through the WIOA Joint Performance ICR. The 
Departments inserted ``mechanism of'' into Sec.  677.230(c) to clarify 
that the State must provide a mechanism of electronic access to the 
public ETP performance report in its annual State performance report. 
This edit was made for consistency with Sec.  677.160(c).
    Comments: The Departments sought specific input on how the 
Departments could best support ETPs in meeting the requirements of this 
section as well as on how to make the ETP reports a useful tool for 
WIOA participants, ETPs, interested stakeholders, and the general 
public. Multiple commenters suggested the Departments could support 
ETPs in meeting the requirements of subpart E by providing reporting 
formats and instructions in order to establish the basis for data 
collection. A commenter remarked that guidance to States would help 
streamline performance reporting for training providers and minimize 
the associated burden.
    However, other comments suggested the Departments avoid being too 
prescriptive in order to maximize the accessibility of the reported 
data. A few commenters suggested that the increased volume of data 
collection necessitates technical assistance and funding support from 
DOL.
    Departments' Response: The Departments recognize that in many cases 
the ETP reporting provisions will be different from what was standard 
under WIA. In recognition of this, the Departments are issuing 
definitions on the elements required under this provision through the 
WIOA Joint Performance ICR in accordance with the

[[Page 55870]]

PRA. The Departments crafted the definitions as they pertain to ETP 
reporting with consideration of commenter suggestions, industry 
standards, and statutory requirements while balancing the need for 
clarity and flexibility. Although the Departments agree these 
definitions are needed, they are appropriately handled through the 
aforementioned WIOA Joint Performance ICR.
    Comments: Several commenters asserted that the Departments must 
permit an alternate definition of ``participant'' and/or ``exit'' for 
use in ETP reporting. These commenters noted that they would require 
considerable local flexibility in the application of these definitions. 
Commenters further articulated a need for technical assistance around 
the data collections associated with these definitions.
    Departments' Response: As mentioned above, through the WIOA Joint 
Performance ICR, the Departments are issuing definitions of how these 
terms are used in ETP reporting. These definitions balance the needs 
for consistency and flexibility. No change to the regulatory text was 
made in response to these comments.
    Comments: A few commenters suggested that the performance metrics, 
which are required to be reported for all individuals in a program of 
study, be waived for non-WIOA participants for the first 2 years to 
provide sufficient time to establish the required data systems to 
collect and report on these elements.
    Departments' Response: The Departments have given consideration to 
the systems readiness to implement these provisions and understand that 
implementation will require guidance and technical assistance in order 
to assist States in this implementation. No change to the regulatory 
text was made in response to these comments.
    Comments: A commenter stated that data collected should align with 
existing data collected on educational programs from other sources in 
order to maximize its usefulness to consumers.
    Departments' Response: The Departments considered this concern, 
however, the data being collected are required by WIOA sec. 116(d)(4). 
Therefore no change to the regulatory text has been made in response to 
this comment.
    Comments: A few commenters stated that since many training 
providers serve small populations, the data they report would not be 
statistically reliable indicators of performance. Similarly, a 
commenter requested clarification regarding the application of the 
disaggregation requirements to individual ETPs.
    Departments' Response: The Departments recognize the contribution 
of ETPs that may serve smaller populations. The Departments note that 
the data disaggregation requirement in WIOA sec. 116(d)(6)(C) also 
applies to the ETP performance reports. The Departments will provide 
additional information on the parameters of the collection and 
reporting of this information through the WIOA Joint Performance ICR 
and program-specific guidance. This information is required to be 
collected under WIOA sec. 116(d)(4); therefore, no change to the 
regulatory text has been made in response to these comments.
    Comments: A commenter urged the Departments to provide States 
maximum flexibility in displaying provider performance data in order to 
allow for State experimentation and to ensure compatibility with 
technology platforms. Another commenter suggested that the 
``scorecards'' already developed by Local WDBs should be considered as 
a model.
    Departments' Response: WIOA sec. 116(d)(1) and (4) require the use 
of `a template' developed by the Departments to report on outcomes for 
eligible training providers and this template must be used consistent 
with the requirements of WIOA sec. 116 and this regulation. However, 
the use of this template does not preclude the States from additionally 
displaying performance data in a manner of their choosing and the 
Departments welcome innovative approaches to displaying this 
information in a user-friendly manner. No change to the regulatory text 
was made in response to these comments.
    Comments: A commenter stated that if this data were a Federal 
requirement collected through ED, there would be a more consistent 
national approach.
    Departments' Response: WIOA sec. 116(d)(4) requires the collection 
and reporting of this information on eligible training providers 
therefore no change to the regulatory text has been made in response to 
this comment.
    Comments: A few commenters suggested that the possible barriers to 
employment be standardized for the purpose of the ETP performance 
report.
    Departments' Response: The Departments recognize the importance of 
standardized and uniform definitions to provide data that are 
comparable across programs and States. The Departments note that 
specific calculations, definitions, and reporting parameters will be 
provided through the WIOA Joint Performance ICR; therefore, no change 
has been made with respect to defining barriers to employment in this 
section. No change to the regulatory text was made in response to these 
comments.
    Comments: A commenter identified the most important data to be 
reported as training program completion rates, wage rates, and job 
placement rates.
    Departments' Response: The Departments acknowledge the suggestions 
raised regarding information that is valuable to understanding the 
outcomes of training programs. WIOA provides specific collection 
requirements at sec. 116(d)(4), which includes much of the data 
suggested by the commenter, and further information as it pertains to 
the reporting requirements for these programs can be found in the WIOA 
Joint Performance ICR. No changes to the regulatory text were made in 
response to this comment.
    Comments: A commenter stated that the performance outcomes only 
should be collected on those participants receiving services under WIOA 
title I, subtitle B.
    Departments' Response: WIOA sec. 116(d)(4)(a) requires reporting on 
the primary indicators of performance for all students in the program 
of study, therefore no change has been made in response to this 
suggestion. No change to the regulatory text was made in response to 
this comment.
    Comments: A commenter asserted that the ETP reporting requirements 
should be kept flexible to provide local providers the greatest choice 
in training providers. Commenters urged the Departments to allow ETP 
eligibility to last more than 1 year in order to generate enough 
participants and exits to provide a useful outcome measurement. A 
commenter remarked that WIOA authorizes Governors to establish a 
transition period for ETPs under WIA to remain on the list through 
2015. A commenter suggested that the Departments require States to list 
credentialing programs on ETP lists (ETPLs) in order to provide the 
most comprehensive information.
    Departments' Response: WIOA sec. 122 governs this process; 
therefore, the Departments refer readers to the discussion of 20 CFR 
part 680 in the DOL WIOA Final Rule (published in this issue of the 
Federal Register) for responses to these comments and more information 
regarding these issues. No change to the regulatory text was made in 
response to these comments.
    Comments: The Departments received numerous comments requesting 
clarity and further information on the interaction between the 
provisions in WIOA sec. 116(d)(4) Eligible Training Provider 
performance report and the

[[Page 55871]]

performance reporting required for training provider eligibility under 
WIOA sec. 122 (20 CFR part 680, see DOL WIOA Final Rule).
    Departments' Response: WIOA sec. 116(d)(4) requires that the ETP 
performance report must be prepared annually and the States must 
provide electronic access to this report in their State annual 
performance report pursuant to Sec.  677.160(c). WIOA sec. 122 governs 
the process for determining training provider eligibility; this process 
requires calculation of certain performance information. As many 
commenters noted, there is significant overlap in what must be included 
in the WIOA sec. 116(d)(4) report and the information providers must 
provide for the eligibility determination under WIOA sec. 122. The 
Departments recognize this overlap may provide opportunities for States 
to collect this information for both purposes. Further information 
concerning ETP reporting requirements and performance reporting 
requirements is available through the WIOA Joint Performance ICR. The 
Departments will also be providing technical assistance in regard to 
these reporting requirements. No change to the regulatory text was made 
in response to these comments.
    Under 20 CFR 681.550, DOL allows the use of individual training 
accounts (ITAs) for out-of-school youth ages 16 to 24. The parameters 
for this allowance are discussed in the preamble to that section. The 
Departments clarify here how youth are reported on in the WIOA sec. 
116(d)(4) eligible training provider performance reports. The 
Departments clarify that such out-of-school youth are reported on in 
both the eligible training provider performance report as well as in 
the State and Local annual reports. Because WIOA sec. 116(d)(4) does 
not describe such youth, the Departments are clarifying here as well as 
in the WIOA Joint Performance ICR how these youth program participants 
are reported on in these reports. When such youth are reported on in 
the eligible training provider performance reports, their performance 
is reported using the same performance indicators as prescribed for 
WIOA adult and dislocated worker participants. Using the same metrics 
minimizes the burden on ETPs. The Departments note that such youth are 
excluded from the required reporting identified at Sec.  
677.230(a)(1)(i) through (iii) but are included in the counts required 
by Sec.  677.230(a)(2) through (a)(4). The Departments further note 
that such youth are additionally reported on in the State and Local 
annual reports in accordance with Sec. Sec.  677.155(d), 677.160, and 
677.205, as described in those sections. The Departments will provide 
additional guidance on the treatment of these individuals through the 
WIOA Joint Performance ICR and in guidance.
    Comments: A number of commenters responded to the Departments' 
request for comments regarding support for registered apprenticeship 
programs interested in providing performance information. A few 
commenters suggested that registered apprenticeship programs should 
report on the same performance outcomes as other training programs. 
Another commenter urged the Departments to require registered 
apprenticeships to publish performance data. Other commenters suggested 
there is value in having a comprehensive list of registered 
apprenticeship providers, but opposed additional reporting requirements 
for these programs. A commenter stated that if pre-apprenticeship 
programs are to be included in the ETP system, they will likely require 
separate criteria. Another commenter stated that performance 
information for registered apprenticeship programs should be clearly 
described.
    Departments' Response: The Departments have concluded that WIOA 
sec. 116(d)(4) does not require registered apprenticeship programs to 
provide performance information for the ETP report. However, the 
Departments note that including information for a registered 
apprenticeship in these reports would provide a benefit to those 
individual seeking training through registered apprenticeships in that 
they will gain visibility and access to a broader applicant pool by 
voluntarily participating in this reporting. Therefore, the Departments 
are implementing Sec.  677.230(b) as proposed to allow for the 
voluntary submission of performance information from registered 
apprenticeship program sponsors and their providers of related 
technical instruction. Any such information must be published in the 
State's annual ETP performance reports. With regard to the creation of 
a comprehensive list of registered apprenticeships the Departments note 
that such a requirement is beyond the scope of this regulation. No 
change to the regulatory text was made in response to these comments.
    Comments: A commenter supported the creation of incentives for 
registered apprenticeship programs to submit performance information.
    Departments' Response: The Departments are not creating additional 
incentives but notes that incentive for reporting already exists as 
explained above. No change to the regulatory text was made in response 
to this comment.
    Comments: A commenter encouraged the Departments to account for 
positive outcomes from registered apprenticeship programs, even if the 
outcome is not necessarily completion of the program because programs 
could be several years in length.
    Departments' Response: To the extent that the registered 
apprenticeship is actively reporting the information required under 
these provisions includes such information as measureable skill gains, 
which accounts for progress made during participation of a registered 
apprenticeship. No change to the regulatory text was made in response 
to this comment.
    Comments: The Departments received multiple comments on how to 
calculate the average cost per participant for those who received 
training services for the most recent program year and the 3 preceding 
program years as required by WIOA sec. 116(d)(4)(E) and Sec.  
677.230(a)(3). One commenter noted that this metric is not currently 
collected. Such suggestions included: Calculating at the education or 
training program level, rather than the participant level; aligning 
calculations with existing national reporting standards, such as the 
Integrated Postsecondary Education Data System; calculating based on 
the tuition plus any support services (e.g., books, supplies, 
transportation) necessary to succeed in the training; calculating based 
on actual training costs for a student, including portions paid for 
with government subsidies; and calculating based on the direct cost 
paid under WIOA title I funding.
    Departments' Response: The Departments considered these proposals; 
however, the Departments have concluded that the cost per participant 
is more appropriately addressed in the WIOA Joint Performance ICR, 
which provides more specificity around what underlying data are 
necessary and how such data will be used in calculating this 
information. The Departments will provide additional information on how 
this metric is calculated through the WIOA Joint Performance ICR, 
guidance, and technical assistance. No change to the regulatory text 
was made in response to these comments.
    Comments: Commenters expressed concern that the ETP performance 
report does not provide sufficient cost information because it does not 
take into account other factors such as, textbooks, supplies, 
transportation, etc.
    Departments' Response: WIOA sec. 116(d)(4) and Sec.  677.230 
mandate the collection of specific information for each program of 
study for each eligible

[[Page 55872]]

provider of training services under title I as outlined in Sec.  
677.230(a). The Departments are cognizant of the reporting burden the 
ETP performance report places on ETPs and do not want to place 
additional burden on these entities. However, WIOA sec. 122 and 20 CFR 
part 680 require States to develop procedures for determining the 
eligibility of training providers and programs and to make information 
about the provider and program available to participants and members of 
the public. The WIOA sec. 116(d)(4) ETP performance report is only one 
component of an overall consumer product. States are not precluded from 
developing additional resources for consumers and the Departments 
encourage States to identify additional information that would be most 
helpful for students to have as they are evaluating a program or 
provider. No change to the regulatory text was made in response to 
these comments.
    Comments: Numerous commenters raised issues on the burden posed for 
training providers. Such as:
     A commenter asserted that many small training providers, 
particularly those in rural areas, would be unable to comply with ETP 
performance reporting requirements, which would limit available 
trainings.
     A commenter expressed concern regarding the burden 
associated with collecting data reliant on SSNs, stating that many 
community colleges do not collect student SSNs.
     A commenter described the increased data collection burden 
associated with obtaining the SSNs for all enrolled students, and, if 
deemed necessary, establishing data sharing agreements with each of the 
individual ETPs.
     A commenter asserted that the costs associated with 
collecting, maintaining, and reporting out data are unknown and will 
vary depending on the entity responsible for these processes.
     This commenter also suggested that entities applying for 
inclusion on the State ETPL may not capture the required demographic 
and programmatic data that would allow for the production of the 
performance report.
     A few commenters suggested that many of the reporting 
elements would not be valuable and would impose a significant burden at 
the State and local level.
    Multiple commenters suggested that many training providers do not 
have the capability or desire to report the proposed level of data on a 
regular basis, and this will lead to a decrease in training provider 
participation.
    Departments' Response: The information required to be reported is 
required by WIOA sec. 116(d)(4). The Departments reiterate that the ETP 
performance reports provide critical information, including the 
employment, earnings, and credentials obtained by individuals in the 
program of study eligible to receive funding under the adult and 
dislocated worker formula programs under title I of WIOA. This 
information will be of significant benefit in assisting WIOA 
participants and members of the general public in identifying effective 
training programs and providers. The information will also benefit 
providers by widely disseminating information about their programs and 
potentially as a tool to enhance their programs. No change to the 
regulatory text was made in response to these comments.
    Comments: Many commenters addressed Sec.  677.230(e)(3) which 
contains the provisions allowing the Governor to designate one or more 
State agencies such as a State Education Agency or State Educational 
Authority to assist in overseeing the eligible training provider 
performance. Several commenters suggested designating the State as 
responsible for ETP data collection, coordination, and dissemination. 
These commenters suggested that their proposed approach would ensure 
local staff time is spent serving participants and that the data are 
consistently collected and reported across the State. A few commenters 
also stated that the burden on training providers would be minimized by 
not requiring collection of any data the State already has. A few 
commenters suggested aligning the ETP eligibility determination process 
with the data reporting process in order to minimize burden. A 
commenter sought clarification regarding the role of training providers 
in generating ETP performance reports and collecting data on 
participants.
    Departments' Response: The Departments note that Sec.  677.230(e) 
allows many such actions as recommended by the commenters. 
Additionally, the Departments reiterate that to the extent that there 
is overlap between data collected to meet requirements under WIOA sec. 
122 and WIOA sec. 116 this overlap may provide opportunities for 
efficiency in collection and reporting of this information for both 
purposes. No change to the regulatory text was made in response to 
these comments.
    Comments: Commenters expressed concern regarding the level of 
burden to eligible training providers for collecting the required data.
    Departments' Response: The Departments acknowledge the need to 
identify the most effective data collection strategies and have 
reviewed the comments received through the WIOA Joint Performance ICR. 
Based on comments received, the Departments have concluded that State 
grantees are best situated to make the ETP performance reports 
available to ETA given their existing familiarity with the reporting 
structure. Grantees are required to establish a process to collect the 
data from the eligible training providers. The Departments will provide 
additional guidance on the ETP performance report.
    Comments: In order to facilitate the reporting process, a commenter 
suggested that all training providers should report outcomes in the 
same format to facilitate cross-program comparisons and identify 
underperforming vendors.
    Departments' Response: The Departments agree that reporting data in 
the same format would facilitate cross-program comparisons and WIOA 
sec. 116(d)(1) requires the Departments to develop a template for the 
annual ETP performance report. This section of WIOA requires the ETPs 
to use this report; therefore, all annual ETP performance reports will 
have outcomes listed in the same report to facilitate cross-program 
comparisons. Because this is already accomplished through WIOA and the 
regulation, the Departments did not make any changes to the regulatory 
text based on this comment.
    Comments: Another commenter suggested that each program of study 
that a provider wants to be eligible to serve WIOA-funded students 
should be required to report.
    Departments' Response: Under WIOA sec. 116(d)(4), the required 
reporting on a program of study only applies to those eligible training 
providers who are already on the State list of Eligible training 
providers and programs. Additional information on eligibility 
requirements is found in 20 CFR part 680, subpart D. The Departments 
also note, however, there is nothing in WIOA that precludes a State or 
an Eligible Training provider from providing or publishing similar 
information. No change to the regulatory text was made in response to 
this comment.
    Comments: A commenter pointed out that entrepreneurship training 
would not score well on the performance indicators unless a recognized 
credential is developed.
    Departments' Response: The Departments acknowledge concerns raised 
with regard to training that is

[[Page 55873]]

targeted at self-employment and recognizes that individuals who are 
self-employed would not be accounted for in State UI wage records. 
However, the Departments note that WIOA sec. 116(d)(4) identifies more 
than just employment or credential based outcomes. Such indicators as 
measurable skill gains combined with the allowance to collect and 
verify employment information through supplemental means as described 
more fully in the preamble to Sec.  677.175 provides alternative points 
of information on outcomes associated with such trainings. The 
Departments have not made any revisions to this section with regard to 
this comment. Further clarification on the allowed sources of data and 
calculations for these provisions will be provided through the WIOA 
Joint Performance ICR. No change to the regulatory text was made in 
response to this comment.
8. Performance Reporting Administrative Requirements (20 CFR Part 677, 
Subpart F; 34 CFR 361.235 Through 361.240; 34 CFR 463.235 Through 
463.240)
Section 677.235 What are the reporting requirements for individual 
records for core Workforce Innovation and Opportunity Act (WIOA) title 
I programs; the Wagner-Peyser Act Employment Service program, as 
amended by WIOA title III; and the Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by WIOA title IV?
    This section of the regulations requires all of the core programs--
except for the title II program--to report using individual records, as 
opposed to aggregate data. While the NPRM would have required that 
records submitted to DOL must be submitted in one record that is 
integrated across all core DOL-administered programs, the regulatory 
text has been revised to read that such records ``may'' be submitted in 
an integrated format.
    Comments: Many commenters expressed a range of concerns regarding 
the proposed reporting requirements that appear to be based on 
incorrect or incomplete information. For instance, one commenter 
asserted that WIA required an SSN for program participation, whereas 
the Wagner-Peyser Act Employment Service program did not, thereby 
resulting in data deficiencies regarding the matching of wage records, 
which should be addressed under WIOA.
    Departments' Response: The provision of a SSN is strongly 
encouraged to facilitate objective performance measurement through the 
use of wage records; however, requiring an SSN as a condition of 
program participation has been and remains a violation of the Privacy 
Act of 1974, 5 U.S.C. 552a Note, which DOL has previously clarified in 
policy guidance. See TEGL No. 5-08, ``Policy for Collection and Use of 
Workforce System Participants' Social Security Numbers.'' No change to 
the regulatory text was made in response to these comments.
    Comments: Another commenter suggested that, because one integrated 
record was required for each participant across all core programs, 
sufficient time should be provided to implement this paragraph, and it 
should be implemented no earlier than July 1, 2018. One commenter noted 
that State VR agencies are not part of the Workforce Investment 
Streamlined Performance Reporting (WISPR) system and suggested that 
States should be allowed to file separate reports for the VR program.
    Departments' Response: While the Departments want to make clear 
that there is no requirement that performance reporting for the 
Departments of Labor and Education be integrated, the Departments 
encourage moving in that direction. For States that have integrated 
reporting of WIOA title I core programs and Wagner-Peyser Act 
Employment Service programs, DOL strongly encourages those States to 
submit an integrated report. This provision regarding the submission of 
integrated reports does not extend to the AEFLA and VR programs 
administered by ED. However, the Departments note that as previously 
discussed, DOL intends to work towards developing an integrated 
reporting mechanism. No change to the regulatory text was made in 
response to this comment.
    Comments: Another commenter disagreed with the Departments' 
intention to have States integrate and submit their performance 
reporting as a single, comprehensive, aggregate report because it would 
incur an undue and unrealistic burden.
    Departments' Response: As explained above, this is not a current 
requirement. The Departments understand that there would be a burden 
with submitting a single, aggregate report to be submitted by one State 
agency when the different programs may currently be housed in different 
departments or agencies.
    Comments: Several commenters were also under the impression that 
all of the core programs currently utilize individual records, with one 
commenter asserting that the comment had been validated by WIOA staff 
across multiple States.
    Departments' Response: The Departments also would like to clarify 
that five of the six core programs currently transmit individual 
records to their respective Departments. The ED's OCTAE, which 
administers title II programs, does not receive individual records from 
State Adult Education Agencies. It is noted that for title II, State 
eligible agencies are required to collect individual records on a 
quarterly basis and submit annually aggregated data using individual 
records. The Departments acknowledge the need for guidance on program 
reporting as well as technical assistance needed to ensure consistent 
understanding for implementation. No change to the regulatory text was 
made in response to these comments.
    Comments: Many commenters expressed opposition to the exclusion of 
title II programs from the individual records reporting requirements. 
Several articulated that the expectations for system alignment through 
integrated reporting discussed in the NPRM would be undercut by the 
proposal to exclude title II from the same quarterly reporting 
requirements as the other five core programs. One commenter remarked 
that title II programs should be included in these reporting 
requirements in the spirit of true integration. And, and as previously 
noted, some commenters were under the impression that all of the core 
programs already use individual records, thereby making the exclusion 
of title II unwarranted.
    Departments' Response: Although ED's Office of Career, Technical, 
and Adult Education does not collect individual records at the Federal 
level, States are required to maintain individual record systems that 
meet strict standards. States are required to collect such data 
quarterly and aggregate the data to meet performance requirements in an 
annual submission. No change to the regulatory text was made in 
response to these comments.
    Comments: Several commenters suggested that the burden for the 
proposed reporting requirements was considerably underestimated and 
should reside at the Federal level, with some suggesting the additional 
requirements constitute an unfunded mandate, particularly for the VR 
program, which must incur the significant cost and staff training 
needed to transition from annual reporting of the RSA 911 to the 
proposed quarterly reporting of the RSA 911. Many of these commenters 
recommended that a currently available tool be utilized to validate RSA 
911 data on a quarterly

[[Page 55874]]

basis without the requirement for full quarterly report submission. 
Additionally, there were concerns raised regarding data that are 
collected through the VR program, which falls under the confidentiality 
requirements under 34 CFR 361.38 that may prohibit the release of 
social security information.
    Departments' Response: The ED's RSA acknowledges that additional 
time and resources as well as staff training will be needed to 
accomplish statutory requirement while ensuring consistent 
understanding and nationwide implementation. There is no provision in 
34 CFR 361.38 that prohibits the release of SSNs for reporting purposes 
since the reporting requirements are necessary for the administration 
of the VR program. Therefore 34 CFR 361.38(b) does not require informed 
written consent for the release of PII for this purpose. However, there 
may be other Federal or State laws that would govern such releases. 
Further, the Departments refer to the VR Performance ICR for the RSA-
911 form where burden for collection and reporting this information in 
the RSA 911 are further addressed. No change to the regulatory text was 
made in response to these comments.
    Comments: The Departments received comments on aspects of this part 
related to calculations for indicators and performance information, 
structure and compilation of individual records, and formatting for the 
collection of underlying data for the reports.
    Departments' Response: Because of the level of detail these 
comments sought on the more specific technical aspects of this part, 
the Departments, as discussed throughout this regulation, reiterate 
that such information will be provided through the WIOA Joint 
Performance ICR or Department-specific ICRs, as well as associated 
program guidance. No change to the regulatory text was made in response 
to these comments.
Section 677.240 What are the requirements for data validation of State 
annual performance reports?
    Section 677.240 provides the requirements for data validation of 
State annual performance reports. It has been revised to specify that 
performance reports should be consistent with the requirement for data 
validation in WIOA sec. 116(d)(5).
    Comments: Several commenters requested guidance for conducting data 
validation across core programs. Commenters specifically asked for 
guidance concerning where the responsibility for data validation lies 
when participants are co-enrolled in two or more partner programs. 
Commenters also asked for clarification regarding the distinction 
between State and local roles in annual reporting. Multiple commenters 
supported either the postponement of the effective date for data 
validation requirements until July 2017 or the gradual implementation 
of data validation requirements, particularly if the validation 
pertains to new data that are required to be collected. Some of these 
commenters expressed concern regarding potentially retroactive data 
validation requirements whereby States would have to go back in order 
to capture newly required data elements on periods of participation 
that began before the new requirements were implemented. Several 
commenters also suggested that the starting point for data validation 
guidance be based on existing data validation methods and procedures 
used under WIA, with one commenter specifically suggesting that a 
comprehensive review of the data elements currently included in WIA 
data validation be undertaken to ensure the appropriate data are being 
validated, eliminating those elements that are either duplicative or no 
longer necessary.
    Departments' Response: The Departments concur that joint guidance 
for conducting data validation across the core programs is necessary in 
order to provide the level of detail and specificity required to 
implement these provisions. As noted above, Sec.  677.240(a) has been 
revised to specify that reporting should be consistent with guidance 
issued pursuant to WIOA sec. 116(d)(5) concerning data validation. The 
guidance to be developed will be based on a comprehensive review of the 
methodology, data elements, and source documentation that have been 
utilized under WIA. It will clarify State and local roles in annual 
reporting and the associated validation process, and the co-enrollment 
of participants across two or more core programs will be addressed. The 
Departments do not expect to issue guidance that includes the need for 
retroactive data collection. In terms of implementation timeframes, the 
Departments anticipate a phased-in approach, which is particularly 
important for those programs that have not conducted data validation 
under WIA. Expectations will be articulated through the Departments' 
joint policy guidance, and technical assistance will be provided to 
ensure consistency in understanding and implementation. No change to 
the regulatory text has been made in response to these comments.
    Comments: Commenters shared specific suggestions for source 
documentation to be used to validate personal identity, with one 
commenter arguing that applicant and counselor statements should be 
acceptable for SSN validation to eliminate the need to copy social 
security cards, thereby minimizing the risk of file breach. Another 
commenter requested clarification on accuracy standards, inquiring as 
to whether the Departments will follow the ``five percent rule'' used 
for WIA data validation.
    Departments' Response: Source documentation requirements will be 
clarified in policy guidance to be issued jointly by the Departments, 
including documentation to validate personal identity. The Departments 
agree with one commenter who suggested that allowing staff verification 
is not consistent with data quality standards. The Departments 
acknowledge the proposed suggestions by commenters and will further 
clarify such procedures through the guidelines. No change to the 
regulatory text was made in response to these comments.
    The ``five percent rule'' referenced in the comment pertains to an 
accuracy standard utilized under WIA by DOL for its programs whereby 
critical data elements with an error rate exceeding five percent were 
flagged as potentially symptomatic of larger reporting and data quality 
issues. This will be addressed in guidance.
    In addition to the regulatory text changes discussed above, various 
non-substantive changes have been made for purposes of correcting 
typographical errors and improving clarity that have not been necessary 
to note elsewhere.

C. Description of the One-Stop System Under Title I of the Workforce 
Innovation and Opportunity Act (20 CFR Part 678; 34 CFR Part 361, 
Subpart F; 34 CFR Part 463, Subpart J)

1. Introduction
    In the section-by-section discussions of each one-stop system 
provision below, the heading references the DOL CFR part and section 
number. However, ED has identical provisions at 34 CFR part 361, 
subpart F (under its State VR program regulations) and at 34 CFR part 
463, subpart J (under a new CFR part for AEFLA regulations). For 
purposes of brevity, the section-by-section discussions for each 
Department's provisions appear only once--in conjunction with the DOL 
section number--and constitute the Departments' collective explanation 
and rationale for each provision. When the regulations are published in 
the CFR, these joint one-stop regulations will

[[Page 55875]]

appear in each of the CFR parts identified above.
2. General Description of the One-Stop Delivery System (20 CFR Part 
678, Subpart A; 34 CFR 361.300 Through 361.320; 34 CFR 463.300 Through 
463.320)
    WIOA reaffirms the role of the one-stop delivery system, a 
cornerstone of the public workforce development system, and subpart A 
describes the one-stop delivery system. Although there are many 
similarities to the system established under WIA, there are also 
significant changes under WIOA. This subpart, therefore, restates WIA 
requirements governing one-stop centers, to the extent they are still 
applicable under WIOA, and embodies a set of reforms that, when 
implemented effectively, are intended to make significant improvements 
to the public workforce delivery system. These regulations set forth 
requirements of the one-stop delivery system as established under WIOA, 
requiring partners to collaborate to support a seamless customer-
focused service delivery network. The regulations require that programs 
and providers colocate, coordinate, and integrate activities and 
information, so that the system as a whole is cohesive and accessible 
for individuals and employers alike. These regulations provide a 
detailed framework for implementation; however, the Departments 
acknowledge additional written guidance and technical assistance to the 
public workforce system is needed to implement the provisions and 
intentions of WIOA fully. Such guidance and technical assistance was 
provided during PY 2015 and will continue to be provided and updated 
with the future development of policies regarding the one-stop delivery 
system. The ultimate goal is to increase the long-term employment 
outcomes for individuals seeking services, especially those with 
significant barriers to employment, and to improve services to 
employers.
    Subpart A describes the one-stop delivery system. It establishes 
the different types of one-stop centers allowable in each local area, 
the need for both physical and programmatic accessibility in the one-
stop delivery system, and also addresses the use of technology to 
provide services through the one-stop delivery system. As discussed in 
Sec. Sec.  678.305 and 678.310, a local area's one-stop delivery system 
may be made up of a combination of a comprehensive one-stop center and 
a network of affiliated sites. When designing the one-stop delivery 
system, States and Local WDBs must ensure that information on the 
availability of career services is available at all one-stop center 
physical locations and access points, including electronic access 
points, regardless of where individuals initially enter the local one-
stop delivery system. The Departments acknowledge that some comments of 
support were included among comments in this subpart. No changes to the 
regulatory text were made in response to these comments.
    The Departments made several changes to regulatory text in response 
to comments on subpart A. Most notably, changes were made to Sec.  
678.305(d) that clarify what it means to make available a ``direct 
linkage'' through technology to provide access to program services and 
information for those partner programs not physically located in a 
comprehensive one-stop center.
Section 678.300 What is the one-stop delivery system?
    This section provides that there are responsibilities at the local, 
State, and Federal levels relative to the establishment and maintenance 
of the one-stop delivery system.
    Comments: Several commenters addressed the accessibility provisions 
in this subpart. A few commenters stated that VR agencies must work 
closely with workforce systems to ensure accessibility for individuals 
with disabilities. Another commenter said that each local area must 
have at least one comprehensive one-stop center that is accessible. A 
few commenters said that there are one-stop centers located in 
buildings that are not fully accessible, and the regulations should 
emphasize in this section that full accessibility is required.
    Departments' Response: The Departments agree with commenters that 
accessibility to one-stop centers and the program and services provided 
at those centers is of the utmost importance. Section 188 of WIOA, the 
corresponding regulations at 29 CFR part 38, and the regulations in 
this part at Sec. Sec.  678.305, 678.310, and 678.800 require that all 
one-stop centers and affiliated sites be physically and 
programmatically accessible to disabled individuals. The Departments 
have concluded that the numerous instances of directly addressing this 
or cross-referencing another section of regulation or WIOA throughout 
part 678 is sufficient emphasis on this point. No change to the 
regulatory text was made in response to these comments.
    Comments: One commenter asked which entity is responsible for 
ensuring one-stop center accessibility.
    Departments' Response: The decision as to which entity will be 
responsible for ensuring accessibility at a one-stop center is 
ultimately the Local WDB's to make, appropriately specified in the MOU.
    Comments: Another commenter said this subpart should describe the 
procedure for when a one-stop center is found not to be physically and 
programmatically accessible.
    Departments' Response: The procedures that must be followed when a 
one-stop center is found not to be physically or programmatically 
accessible are described in 29 CFR part 38. The Departments have added 
cross references to those regulations in Sec. Sec.  678.305 and 678.310 
to clarify that these are the controlling regulations in such 
instances, replacing references to Sec.  678.800.
    Comments: A commenter asked, given the long-standing separation 
between one-stop centers and adult education programs, how soon the 
Departments expect these entities to fulfill the requirement to provide 
a ``seamless customer-facing service delivery network.''
    Departments' Response: While the Departments understand that 
adapting to the new one-stop delivery system structure will take time 
for all partners involved, partner programs are expected to work as 
expeditiously as possible to reach the goal of providing a ``seamless 
customer-facing service delivery network.''
    Comments: A few commenters requested guidance on how certain 
partners, like libraries, are expected to measure enrollment.
    Departments' Response: A WIOA program carries the responsibility 
for reporting and ensuring such data are available to fulfill their 
reporting requirements. In the case where a partner program is 
receiving WIOA funds to provide services for any program, a mechanism 
for tracking and reporting such services and individuals will need to 
be established between the local one-stop partner and the program 
responsible for making such reports. Where a local one-stop partner is 
providing services beyond those funded under WIOA, reporting 
requirements would not extend to such services. In the case of a local 
one-stop partner, such as a local library, who may only be providing 
space for a program or programs to operate within, or providing access 
to public computers by which participants access programs, reporting is 
the responsibility of the program operator.

[[Page 55876]]

    Comments: A few commenters said that this section will require the 
UI program to change its business model.
    Departments' Response: The Departments do not agree that the UI 
program will require a change to its business model, and see the 
program as completely adaptable to the new regulations' plan and vision 
for the one-stop delivery system. New requirements, such as the 
requirement to provide ``meaningful assistance'' to claimants who need 
help filing a claim, do not translate into a move away from primarily 
on-line or phone claims filing. They simply assure that claimants who 
need assistance accessing the program receive it.
Section 678.305 What is a comprehensive one-stop center and what must 
be provided there?
Access and Direct Linkage
    Providing one-stop center participants with access to program 
activities and services is the keystone of the one-stop delivery 
system. ``Access'' is defined in Sec.  678.305(d), which provides three 
ways each partner program may meet this requirement: (1) Having a 
program staff member physically present at the one-stop center; (2) 
having a staff member from a different partner program physically 
present at the one-stop center appropriately trained to provide 
information to customers about the programs, services, and activities 
available through partner programs; or (3) making available a direct 
linkage through technology to program staff who can provide meaningful 
information or services. Options two and three offer a wide range of 
possibilities to partners. Option two could require varying levels of 
assistance depending on the program's needs, but this could be as 
simple as providing a hardcopy TANF benefit application to a 
participant or directing them to an online form. Direct linkage can 
take many forms as well, and the Departments received many comments on 
the definition of this term, as discussed below.
    Comments: A few commenters disagreed with the definition of 
``direct linkage,'' specifically because it does not include providing 
a phone number or Web site that individuals can use at home. These 
commenters said this is an unnecessary restraint on how States can 
serve customers and does not take into account the usage of mobile apps 
and other technology. The commenters also said that the definition of 
``direct linkage'' exceeds what is required in WIOA. Further, the 
commenters stated that proposed technologies, such as live Web chat 
systems, are expensive.
    Departments' Response: Maintaining the option of connecting to a 
well-trained program staff member at the one-stop center is extremely 
important to the success of the one-stop delivery system. The 
Departments recognize that the language defining ``access'' and 
``direct linkage'' may have been too restrictive and also could make it 
appear that every interaction required a human component, not just the 
availability of the option to speak with a person. Many one-stop 
customers may only require services provided electronically or may not 
be ready for a direct interaction with a staff member. For these 
reasons, the Departments have changed the regulatory text in paragraph 
(d)(3) of this section, replacing ``providing direct linkage . . .'' 
with ``making available a direct linkage . . .,'' in order to reflect 
that communicating with an individual must remain an option, but is not 
required for every one-stop customer interaction.
    Comments: Several of the previously mentioned commenters joined 
other commenters who said that it is not realistic to expect that every 
customer can receive services at the time of arrival at the one-stop 
center, and suggested that the regulation should not prohibit arranging 
for customers to receive services at a later time.
    Departments' Response: The Departments agree that the proposed 
regulation was not intended to prohibit arrangements to serve customers 
at a later time. Accordingly, the Departments have deleted the language 
prohibiting arranging for customers to receive services at a later 
time, thereby providing what the Departments see as more flexible 
service delivery options. Specifically, paragraph (d)(2) was changed by 
striking the phrase ``or making arrangements for the customer to 
receive services at a later time or on a different day.''
    Comments: A few commenters commented that the definition of 
``direct linkage'' implies that all customers entering a one-stop 
center have a computer with Internet access at home. The commenters 
recommended revising this section to indicate that providing a computer 
with access to enrollment or eligibility services does qualify as a 
direct linkage.
    Departments' Response: While providing such a service is of value 
and should be encouraged, a ``direct linkage,'' pursuant to these final 
regulations, must be the availability of a direct connection to a 
program staff member by phone or through real-time Web-based 
communication, an element seen by the Departments as critical to the 
service. As mentioned above, however, not all one-stop customer 
interactions require the use of a ``direct linkage;'' rather, the 
regulations require only that a ``direct linkage'' remains available to 
the customer. The language of paragraph (d)(2) was changed from ``[a] 
`direct linkage' does not include providing a phone number or computer 
Web site that can be used at an individual's home . . .'' to ``[a] 
`direct linkage' cannot exclusively be providing a phone number or 
computer Web site . . . .'' This means that providing a phone number or 
Web site, as mentioned by the commenters, would still be considered 
serving an individual, as long as more involved access was available to 
that customer if desired.
    Comments: Another commenter also disagreed with the NPRM, saying 
that States should have flexibility to determine how and when to 
deliver virtual services.
    Departments' Response: The Departments have concluded that, with 
the above-mentioned changes to the definitions of ``accessibility'' and 
``direct linkage,'' States and local areas are provided a reasonable 
amount of flexibility to determine how and when to deliver virtual 
services, as long as the option of a ``direct linkage'' remains open to 
customers if another form of ``access'' is not available. The 
Departments have not made further changes to the regulatory text in 
response to this comment.
    Comments: A few commenters requested clarification on the 
definition of ``timely manner'' and ``within a reasonable time.''
    Departments' Response: The Departments decline to define ``within a 
reasonable time'' in this section. The Departments consider what is 
``reasonable'' will fluctuate based on demand and resources in a 
specific local area. However, to ensure quality customer service, the 
Departments encourage States and local areas to minimize the time 
during which an individual must await a direct linkage to services and 
to coordinate direct services effectively.
One-Stop Center Partner Staffing
    Comments: A commenter asked whether the title I program staff 
person needs to be present full-time or may be present on a part-time 
basis. Another commenter asked whether there must also be at least a 
part-time title II staff presence. Additionally, one commenter said 
that electronic linkage should be permissible instead of requiring a 
physical staff presence.

[[Page 55877]]

    Departments' Response: At least one title I staff person must be 
present when the one-stop center is open for operations, although this 
requirement does not have to be met by a full-time staff person and can 
be met by the physical presence of different staff trading off 
throughout the one-stop center's times of operation.
    No such requirement exists for the physical presence of a title II 
staff person at the one-stop center. However, such physical presence 
may be appropriate as a means to provide access to the title II 
program, depending upon the particular local area's needs.
    Lastly, as long as there is a physical presence of at least one 
title I program staff member at all times of operation, all other 
programs have the option to provide ``access'' through a ``direct 
linkage'' that leverages available technologies according to the 
definitions provided in this section. The Departments, however, 
encourage partners to strive for a physical presence at one-stop 
centers to serve customers' needs better.
    Comments: A few commenters asked if it is the intent of the 
regulations to have all required partners colocated in the one-stop 
centers.
    Departments' Response: As stated in Sec.  678.305(a), ``[a] 
comprehensive one-stop center is a physical location where job seeker 
and employer customers can access the programs, services, and 
activities of all required one-stop partners.'' As providing services 
through ``direct linkage'' is an allowable form of ``access,'' as 
defined in Sec.  678.305(d), not all required partners must be 
physically present at a comprehensive one-stop center as long as 
``access'' to their services, programs, and activities is provided. 
However, the Departments encourage as much physical presence of partner 
staff persons that is feasible.
    Comments: Another commenter said that it will be logistically 
difficult to ensure that 50 percent of required partners are located in 
the one-stop centers, particularly with regard to adult education 
programs and the volume of customers that they serve.
    Departments' Response: This comment seems to stem from a 
misunderstanding of the colocation requirements. While all required 
one-stop partners must provide ``access'' to their programs and 
activities through a comprehensive one-stop center, at least one title 
I program staff person must be physically present. However, the 
Departments encourage as much physical presence of other one-stop 
partners' program staff persons as is feasible. States and local areas 
should be aware of the requirement in Sec.  678.315 that, if Wagner-
Peyser Act services are provided at an affiliated site, at least one or 
more other one-stop partner programs must be located in the affiliated 
site, and there must be a physical presence of combined staff from the 
other program(s) over 50 percent of the time that the site is open.
    Comments: Another commenter said that the ability of the VR program 
to participate through technology instead of through a physical 
presence will greatly expand the VR program's participation in the one-
stop delivery system.
    Departments' Response: As stated above, as long as this technology 
meets the definition of ``direct linkage'' as stated in Sec.  
678.305(d), the VR agencies are able to substitute this for a physical 
presence at a comprehensive one-stop center.
    Comments: One commenter asked if it is the intent of the 
regulations to require NFJP grantees to be located in the same one-stop 
center as other entities that provide one-stop services. The commenter 
said that colocating these grantees would be logistically very 
difficult. A couple of commenters stated that the decision to colocate 
services can be beneficial but should consider financial viability. If 
it is more beneficial to locate NFJP programs outside of a one-stop 
center, these commenters reasoned that grantees should be given the 
flexibility to do so, and commented that the grantee can still develop 
a close partnership with the one-stop delivery system without 
necessarily being colocated.
    Departments' Response: Because NFJP is an entity that administers a 
program authorized by title I of WIOA, sec. 121(b)(1)(B) and Sec.  
678.400(b)(1) require NFJP to be a comprehensive one-stop center 
partner. This does not necessarily mean, however, that NFJP staff must 
be physically present at the one-stop center. There are multiple 
examples in the regulations for providing access to a program and its 
services through the one-stop center (such as providing a ``direct 
linkage''), as discussed in paragraph (d) of this section. It should be 
noted, however, that an NFJP staff member placed at the local area's 
comprehensive one-stop center could serve as the required title I staff 
member when present.
    Comments: Another commenter remarked that, traditionally, there has 
been a cost increase associated with operating NFJP services in 
conjunction with a one-stop delivery system that leaves less funding 
available for training programs and participant services. This 
commenter said that the increase in operating costs would be due to 
high rent, assignment of personnel to other duties in the one-stop 
delivery system, and cooperative spending.
    Departments' Response: The Departments determined that while there 
may be cost increases in some areas, there may be savings in others due 
to the infrastructure cost contribution plan laid out in the local 
area's MOU in accordance with Sec. Sec.  678.700 through 678.755.
    Comments: One commenter suggested that one-stop centers should 
receive guidance about how to calculate co-occupancy rates so that 
partners are aware if there is inadequate space to provide colocated 
services.
    Departments' Response: The Departments recognize the importance of 
quality facilities, including adequate physical space, to deliver 
services across one-stop partner programs. However, the Departments do 
not consider this level of detail necessary in regulations and have not 
made changes to the regulatory text in response to this comment. The 
Departments encourage the use of State and local administrative data to 
guide negotiations regarding colocation and shared infrastructure 
costs.
    Comments: Some commenters said that the regulation implies that 
operating one-stop centers beyond normal business hours will lead to a 
higher evaluation during the certification process. These commenters 
expressed concern about the fairness of this practice, stating that 
some one-stop centers many not be able to stay open past normal 
business hours due to lease agreements or security concerns (e.g., 
needing to hire an additional security guard).
    Departments' Response: Providing nontraditional hours of operation, 
such as on Saturdays or after 5 p.m. on weekdays, is seen as a critical 
element in servicing difficult to reach populations, such as low-wage, 
low-skill, and other employed workers, and homeless individuals. 
Therefore, this will remain one of the required elements to be taken 
into account when evaluating the effectiveness of one-stop centers. The 
Departments have revised the regulatory text at Sec.  678.800(b) to 
reflect that such hours should be provided where there is such a need 
by the workforce population, as identified by the Local WDB. It should 
be noted that this is only one factor to take into consideration when 
evaluating a one-stop center for certification, and while operating a 
one-stop center beyond normal business hours will count positively 
toward a center's evaluation, this will in no way negatively affect the

[[Page 55878]]

evaluations of other one-stop centers in the State that may not be able 
to offer such services.
    Comments: Another commenter asserted that the regulation's emphasis 
on expanding operating hours would require additional staff and 
relocations to larger facilities to accommodate these staff.
    Departments' Response: In some instances, this may be true, but the 
Departments encourage creative ways of implementing these 
nontraditional hours with the resources the one-stop centers and Local 
WDBs have available to them. Innovation is one of the driving 
principles behind WIOA, including in how services are delivered to 
difficult to reach populations and individuals with barriers to 
employment.
Other Comments
    Comments: Another commenter said that States should determine 
standards for one-stop centers with input from Local WDBs.
    Departments' Response: Under sec. 101(d)(6) of WIOA, State WDBs are 
responsible for assisting the Governor in developing statewide policies 
affecting the coordinated provision of services through the one-stop 
delivery system, including developing objective criteria and procedures 
that Local WDBs will use to assess the effectiveness and continuous 
improvement of one-stop centers. In addition, one-stop centers must 
adhere to the requirements in sec. 121 of WIOA and these implementing 
regulations.
    Comments: A commenter suggested amending this section to encourage 
States to develop technology-based strategies to ensure that 
wraparound, or comprehensive, services are available outside of normal 
business hours.
    Departments' Response: The Departments encourage the development of 
technology-based strategies to deliver services to customers in 
innovative and comprehensive ways, both during normal business hours 
and nontraditional hours, and the Departments have concluded that the 
regulations support such activity as written. No changes to the 
regulatory text were made in response to this comment.
    Comments: Another commenter said that the NPRM does not provide 
enough guidance on how to decide the number and location of 
comprehensive one-stop centers, explaining that these decisions require 
significant collaboration among several stakeholders.
    Departments' Response: While sec. 121(e) of WIOA and Sec.  
678.300(c) require that at least one comprehensive one-stop center be 
established in a local area, many local areas will require the 
establishment of multiple centers to serve their populations properly. 
This is highly dependent on individualized factors in each local area. 
This determination is best carried out at the State and local planning 
level. WIOA sec. 121(a) requires the establishment of the one-stop 
delivery system, consistent with the approved Unified or Combined State 
Plan, through the Local WDB for a local area and with the agreement of 
CEO for the local area. It is these entities that should determine the 
proper number and location of one-stop centers, by drawing on their 
knowledge of the area's needs. The Departments made no change to the 
regulatory text in response to the comment.
Section 678.310 What is an affiliated site and what must be provided 
there?
    In addition to the requirement for a physical center in each local 
area where all required one-stop partners must provide access to their 
programs, services and activities, consistent with sec. 121(e)(2)(B) of 
WIOA,,Sec. Sec.  678.310 and 678.320 provide that the one-stop delivery 
system may also provide partner programs, services, and activities 
through affiliated sites or through a network of eligible one-stop 
partners that provide at least one or more of the programs, services, 
and activities at a physical location or through an electronically or 
technologically linked access point, such as a library. The Departments 
added a reference to 29 CFR part 38, the implementing regulations of 
WIOA sec. 188.
    Comments: A commenter recommended that affiliated sites not be 
required to have operators; however, the commenter also said that the 
entities delivering services at these sites should be signatories to 
the MOU.
    Departments' Response: As required by sec. 121(c) of WIOA, an MOU 
is an agreement among the one-stop partner programs and the Local WDB; 
therefore, the entities delivering services--i.e., the partner 
programs--will be signatories to the MOU. A local area's one-stop 
operator may be in charge of running affiliated sites as well as the 
comprehensive one-stop center. In other cases, other arrangements for 
operations of the affiliate sites may be specified in the MOU. The 
operator may be assigned different responsibilities, which are 
dependent on the terms of the selection process and the operator 
agreement(s) reached between the operator(s) and the Local WDB.
    Comments: One commenter suggested that affiliated sites should not 
have to provide access to all required partners, since physical 
staffing is determined locally.
    Departments' Response: Since affiliated sites are not required to 
provide access to all partner programs, as stated in Sec.  678.310(a), 
no change to the regulatory text is necessary.
    Comments: Another commenter asked whether VR agencies are required 
to participate in affiliated sites.
    Departments' Response: To clarify, neither the VR program, nor any 
other partner program, is required to participate in affiliated sites 
by these regulations or by statute; partner programs are required only 
to participate in the operation of the one-stop delivery system and 
must provide access to their programs through the comprehensive one-
stop centers. The Departments encourage the use of affiliated sites to 
serve a local area's population better, but decisions concerning this 
implementation are ultimately made by the local areas. These affiliated 
sites should, first and foremost, supplement and enhance customer 
access to services, and should be seen as access points that are in 
addition to the local area's comprehensive one-stop centers.
    Comments: One commenter asked whether an adult education provider 
in a CBO is considered an affiliated site.
    Departments' Response: Yes, an adult education provider, or any 
other partner program, located in a CBO, may be considered an 
affiliated site. If any partner program in a CBO is considered an 
affiliated site, that program must follow all of the requirements of 
this section.
Section 678.315 Can a stand-alone Wagner-Peyser Act Employment Service 
office be designated as an affiliated one-stop site?
    This section sets forth the prohibition against standalone Wagner-
Peyser Act Employment Services offices. WIOA requires that the Wagner-
Peyser Act Employment Service program be colocated with one-stop 
centers. A Wagner-Peyser Act Employment Service office cannot, by 
itself, constitute an affiliated site. In those cases where the Wagner-
Peyser Act Employment Service program is located in an affiliated site, 
there must be staff of at least one other partner in that affiliated 
site that is physically present more than 50 percent of the time the 
center is open.
    Comments: A commenter asked whether one partner agency that 
administers multiple partner programs can satisfy the 50 percent 
presence requirement. This commenter reasoned that multiple partners 
should be able to

[[Page 55879]]

meet the 50 percent requirement collectively.
    Departments' Response: In light of the comments and upon 
considering the requirement for physical presence of non-Wagner Peyser 
program staff more than 50 percent of the time, the Departments have 
concluded that it is appropriate to allow a combination of partner 
program staff members to meet this requirement, and the Departments 
have revised the regulatory text to reflect this.
    If there is only one qualifying partner program (i.e., partner 
programs other than local veterans' employment representatives, 
disabled veterans' outreach program specialists, or UC programs) in 
addition to the Wagner-Peyser Act program at an affiliated site, then 
that partner program alone must meet the more than 50 percent 
threshold. If there is more than one qualifying partner program in the 
affiliated site, such programs together must have staff present to 
provide coverage more than 50 percent of the time the site is open.
    Comments: A commenter also recommended that electronic access 
should be included to meet the more than 50 percent requirement. 
Another commenter agreed, and also added that it may not be financially 
feasible to have staff in affiliated sites more than 50 percent of the 
time.
    Departments' Response: While the Departments appreciate and 
encourage partners' use of technology to better, and more 
comprehensively, serve customers of the one-stop delivery system, the 
Departments have not revised the regulatory text to permit such 
activities in order to meet the more than 50 percent physical presence 
requirement for non-Wagner-Peyser Act partner programs. Doing so would 
defeat the purpose of this requirement, which is to have staff other 
than Wagner-Peyser Act staff physically present for a majority of the 
time that an affiliated site is open.
    Comments: A few commenters requested flexibility in determining 
staffing at affiliated sites to meet local needs best, stating that the 
50 percent threshold may result in some programs being overstaffed 
while Wagner-Peyser Act services are understaffed. Another commenter 
agreed that this requirement is burdensome and does not take into 
account existing long-term lease agreements.
    Departments' Response: In determining the number and placement of 
affiliated sites, Local WDBs should consider how their one-stop 
delivery system could deliver services most effectively across the 
local area with the resources that are available. In making these 
adjustments, Local WDBs should consider the services that are needed in 
each location, how services are delivered in the comprehensive one-stop 
center, where the one-stop center is located, and where current 
affiliated sites are located. This may require the opening of new 
affiliated sites, or the consolidation of existing offices that would 
be considered affiliated sites under WIOA. The Departments recognize 
that such adjustments take time, but the Departments expect this 
process to begin as soon as possible.
    Comments: Another commenter asked how this requirement would affect 
existing standalone Wagner-Peyser Act offices.
    Departments' Response: This requirement will mean that either a 
non-Wagner-Peyser Act partner program will need to colocate at the 
formerly standalone Wagner-Peyser Act office; the Wagner-Peyser Act 
program will need to move to another space that can support colocation 
with a non-Wagner-Peyser Act partner program; or the Wagner-Peyser Act 
program will need to shift operations to a comprehensive one-stop 
center, of which the program is a required member, or to another 
affiliated site. As stated in Sec.  678.315, Wagner-Peyser Act programs 
may no longer exist in standalone offices.
    Comments: One commenter recommended strengthening the language 
about how required partners are to operate in integrated partnerships 
with Wagner-Peyser Act services. The commenter stated that many local 
areas have flexibility to determine whether to colocate with Wagner-
Peyser Act services.
    Departments' Response: The Departments are not altering the 
regulatory text to address the language concerning how required 
partners are to operate in partnership with Wagner-Peyser Act services. 
WIOA recognizes the Wagner-Peyser Act program's role in the one-stop 
delivery system and has made Wagner-Peyser Act one of the core 
programs. The Departments have determined that Wagner-Peyser Act 
services are vital to the successful operation of one-stop centers, and 
have, through administrative guidance, strongly encouraged access to 
these services throughout the public workforce system.
    Comments: A few commenters expressed concern about the lack of 
specific instructions for how State workforce agencies are supposed to 
fund the colocation of Wagner-Peyser Act services. The commenters 
recommended that States do not need to use their Wagner-Peyser Act 
program allocations for this action.
    Departments' Response: Given the diversity in how States have 
structured their Wagner-Peyser Act employment services, the regulation 
provides States with discretion in developing an appropriate plan for 
relocation. Any plan, including the identification of funding to be 
used to carry out relocation, must comply with applicable Federal cost 
principles. The Departments did not make changes to the regulatory text 
in response to this comment.
    Comments: One commenter recommended that States be required to have 
a conflict-resolution process in place for on-site staff disputes, 
which may help alleviate one of the major challenges of program 
colocation.
    Departments' Response: While the Departments recognize the utility 
of such a process and may recommend the implementation of such a 
process in many instances, the Departments have decided it is best to 
provide Local WDBs with flexibility in determining how to 
operationalize the colocation of programs, as well as integrated 
service delivery. For this reason, the Departments will not require a 
conflict-resolution process for on-site staff disputes, and have made 
no changes to the regulatory text.
Section 678.320 Are there any requirements for networks of eligible 
one-stop partners or specialized centers?
    The Departments received no comments for this section and made no 
substantive changes to the regulatory text. However, the Departments 
have rephrased the first sentence of the paragraph to improve clarity 
and readability. The phrase ``such as having in place processes to make 
referrals to'' was stricken from its original position; ``one-stop 
center'' was added after ``comprehensive;'' and the phrase ``for 
example, by having processes in place to make referrals to these 
centers and the partner programs located in them'' was inserted at the 
end of the first sentence. The new sentence reads as follows: ``Any 
network of one-stop partner or specialized centers must be connected to 
the comprehensive one-stop center and any appropriate affiliate one-
stop centers, for example, by having processes in place to make 
referrals to these centers and the partner programs located in them.'' 
The Departments have made these changes to make this sentence more 
understandable than originally phrased and do not intend to change the 
meaning of the sentence or paragraph.

[[Page 55880]]

3. One-Stop Partners and the Responsibilities of Partners (20 CFR Part 
678, Subpart B; 34 CFR 361.400 Through 361.440; 34 CFR 463.400 Through 
463.440)
    The public workforce system envisioned by WIOA seeks to provide all 
participants with access to high-quality one-stop centers that connect 
them with the full range of services available in their communities, 
whether they are looking to find jobs, build educational or 
occupational skills, earn a postsecondary certificate or degree, obtain 
guidance on how to chart careers, or are employers seeking skilled 
workers. A genuinely seamless, one-stop experience requires strong 
partnerships across programs that are able to streamline service 
delivery and align program requirements. In this subpart of the 
regulation, the Departments describe requirements relating to such one-
stop partnerships. Specifically, this subpart identifies the programs 
that are required partners and their roles and responsibilities, the 
other entities that may serve as partners, and the types of services 
provided.
    The Departments changed several sections of this subpart in 
response to comments. While small changes to the regulatory text were 
made in Sec.  678.410, much more significant changes were made to Sec.  
678.415(e), which changed the default one-stop partner under the 
Perkins Act from the State agency administering that program to a local 
postsecondary recipient of Perkins funds. Changes to the requirements 
for local TANF partners have also been made in Sec.  678.430(a)(2) and 
(d). Two additions were also made to the human services that may be 
provided as business services in Sec.  678.435(b)(4).
Section 678.400 Who are the required one-stop partners?
    This section lists the one-stop partners required under sec. 
121(b)(1)(B) of WIOA. Beyond the partners previously required under 
WIA, WIOA adds the TANF program, administered by HHS, and the Ex-
Offender program, administered by DOL under sec. 212 of the Second 
Chance Act of 2007, to the list of required partners.
    Comments: A commenter requested clarification on participation for 
career and technical education programs and also a clearer definition 
of employment and training programs. The commenter expressed concern 
that without a clear definition of these terms, nearly any entity can 
claim to be an employment and training program. Further, the commenter 
requested that States be able to define these terms.
    Departments' Response: Within the context of these regulations, 
these terms are used in reference to programs authorized under specific 
Federal statutes. The ``career and technical education programs'' 
referred to in Sec.  678.400(b)(6) are those authorized by the Perkins 
Act at the postsecondary level. The ``employment and training 
activities'' listed in this section are either those carried out under 
the CSBG or those carried out by HUD, as provided in Sec.  
678.400(b)(9) and (10), respectively. Under these categorical 
restrictions, the Departments are not concerned that nearly any entity 
could claim to be an employment and training program. Section 
121(b)(1)(B) of WIOA, as implemented by Sec.  678.400, lists 
intentionally broad categories of required partners so as to bring more 
local partner programs into the comprehensive one-stop center and the 
broader one-stop delivery system to provide more comprehensive services 
for the one-stop centers' customers. For this reason, the Departments 
are not changing the regulatory text concerning these terms. The 
Departments have determined that it is within the best interests of the 
one-stop delivery system and its customers for States to adhere to 
these broad categorical definitions. Furthermore, narrowing these 
definitions would exclude some programs explicitly included by Congress 
as the regulatory language mirrors the statutory text in WIOA secs. 
121(b)(1)(B)(vi), (ix), and (x).
    Comments: A commenter asked whether CSBG programs have to be 
physically located at the one-stop center.
    Departments' Response: If a CSBG program carries out employment and 
training activities, then these activities must be accessible at the 
comprehensive one-stop center, either through a physical presence or 
through another means of ``access'' as defined by the regulations in 
Sec.  678.305(d), because these programs are required one-stop partners 
under sec. 121(b)(1)(B) of WIOA. Section 678.305(c) specifically 
requires customers to have access to one-stop partner programs in a 
comprehensive one-stop center, including employment and training 
activities carried out under the CSBG program. Furthermore, Sec.  
678.305(d) defines ``access'' as including, but not limited to, having 
partner program staff physically present at the one-stop center. That 
is, one-stop partner programs do not need to be physically present in a 
comprehensive one-stop center, but they must provide access to their 
services in the ways described in Sec.  678.305(d).
    Comments: One commenter said that the Perkins program needs to 
determine who the Perkins one-stop partner will be. Another commenter 
stated that Sec.  678.400 needs to be reconciled with the Perkins Act 
and asserted that career and technical education programs do not have 
authority to enter into an MOU, although a postsecondary entity does 
have such authority.
    Departments' Response: The NPRM specified that the State Eligible 
Agency serves as the one-stop partner for the Perkins program. As 
discussed below in this preamble, the Departments have determined that 
an eligible recipient at the postsecondary level, or a consortium of 
eligible recipients at the postsecondary level in the local area is the 
most appropriate entity to serve as the one-stop partner in a local 
area. This change is reflected in Sec.  678.415(e) and is discussed in 
the corresponding preamble section below.
    Comments: Another commenter recommended that all Federal grantees 
that have employment and training components in their grant should be 
required one-stop partners.
    Departments' Response: While the Departments encourage the 
inclusion of such entities as additional one-stop partners, the list of 
required partners in Sec.  678.400(b) is the statutorily mandated list 
of required partners. The Departments do not have authority to require 
additional programs to be one-stop partners. However, several entities 
such as those mentioned by the commenter are explicitly listed in sec. 
121(b)(2)(B) of WIOA and Sec.  678.410 as acceptable additional one-
stop partners, subject to approval of the Local WDB and CEO.
Section 678.405 Is temporary assistance for needy families a required 
one-stop partner?
    This section provides further clarification that the Governor may 
determine that TANF will not be a required one-stop partner in a local 
area(s), but must notify the Secretaries of Labor and HHS in writing of 
this determination. This implements sec. 121(b)(1)(C) of WIOA. It 
should be noted that the Governor's decision to exclude TANF from being 
a required one-stop partner is distinct and separate from the decision 
to include or not to include TANF in a Combined State Plan. TANF 
remains one of the many options of programs to be included in a 
Combined State Plan. Its status as a required one-stop partner does not 
mean it is required to be included in a Combined State Plan. For all 
sections regarding TANF, the HHS, which administers the program, was 
consulted extensively.

[[Page 55881]]

    Comments: A few commenters expressed support for TANF being a 
required one-stop partner. Other commenters remarked that adding TANF 
as a one-stop partner will lead to improved services for job seekers. 
However, one commenter recommended that the Departments include 
stronger language about including TANF as a required one-stop partner. 
This commenter said that if TANF is such an important partner, it 
should not be so easy for Governors to opt out.
    Departments' Response: While the Departments agree that TANF is an 
important partner in the one-stop delivery system, WIOA requires--at 
sec. 121(b)(1)(C)--that Governors be able to determine that TANF will 
not be a required one-stop partner through written notice to both the 
Secretary of Labor and the Secretary of HHS. It should be noted, 
however, that even if the Governor decides not to require TANF to be a 
one-stop partner, local TANF programs may still work in collaboration 
or partnership with the local one-stop centers to deliver employment 
and training services to the TANF population, unless inconsistent with 
the Governor's direction. Additionally, the local TANF program also may 
find other avenues of providing TANF services to one-stop customers 
that may not reach ``partner'' status.
    Comments: One commenter recommended that the regulations should 
clarify that TANF employment and training activities must be offered at 
one-stop centers, with other TANF-funded activities included at the 
discretion of the local TANF agency and Local WDB. This commenter 
reasoned that requiring all TANF activities at one-stop centers would 
be a substantial cost and administrative burden.
    Departments' Response: Access through the one-stop delivery system 
is required only for TANF activities related to work, education or 
training, the initiation of an application, and career services as 
specified in Sec.  678.430(a)(2). TANF is a required one-stop partner 
unless the Governor opts not to require TANF participation in either a 
specific local area or the entire State. The cost of the various 
activities associated with the one-stop operators should be one of the 
factors considered by the Governor in making this decision.
    Comments: A commenter stated that even if the Governor opts out, 
local TANF programs might still be required to be one-stop partners. 
Other commenters expressed support for local TANF programs to be 
permitted to opt in as one-stop partners, even if the Governor opts 
out. Another commenter expressed concern that the proposed regulations 
would permit a local TANF agency official to defy a Governor's decision 
not to include TANF as a required one-stop partner. The commenter 
recommended that this clause should be deleted, stating that a 
Governor's decision regarding TANF as a required one-stop partner must 
be respected.
    Departments' Response: While local TANF programs are allowed to be 
one-stop partners, they cannot be required to do so if the Governor has 
determined that TANF is not required to be a partner. However, the 
Departments agree that local TANF programs should be permitted to work 
in collaboration and partnership with the local one-stop centers and 
have determined that allowing local TANF programs to make this 
decision, in conjunction with Local WDBs, is in the best interest of 
serving one-stop customers to the fullest extent possible, unless doing 
so is inconsistent with the Governor's direction. The Departments 
recognize the importance of increasing access to TANF programs, and 
have determined that allowing these programs' voluntary inclusion, when 
not required by a Governor and when not prohibited by the Governor's 
direction, is consistent with the spirit of WIOA. The Departments have 
modified the regulatory text to indicate that local TANF programs may 
become partners at the local one-stop centers unless the Governor 
directs or orders otherwise. While a Governor may choose not to require 
TANF programs to be one-stop partners, the Departments do not want to 
create barriers to local TANF programs becoming partners in the local 
one-stop center when there is a mutual desire to do so. The Departments 
have concluded that the availability of TANF services to one-stop 
customers is an important element of the one-stop vision. Furthermore, 
the Departments have interpreted WIOA sec. 121(b) as providing separate 
authority to local areas to include additional one-stop partners, 
including TANF, which is not overridden by a Governor electing to 
exclude TANF from being a required partner. However, as administrator 
of the State TANF program, the Governor is empowered under the Social 
Security Administration (SSA) to direct the actions of local TANF 
programs and may choose to limit a local program's ability to opt in. 
It should be noted here that any additional partners not required by 
sec. 121(b)(1)(B) of WIOA, but permitted by sec. 121(b)(2)(B), can 
participate as a one-stop partner only with the agreement of the CEO 
and Local WDB.
    Comments: A commenter urged the Departments to ensure that a 
decision regarding whether TANF is a required one-stop partner should 
be separate from the decision regarding including TANF in a Combined 
State Plan.
    Departments' Response: The Governor's decision to exclude TANF as a 
required one-stop partner must be made through direct written 
notification of such a decision from the State's Governor to the 
Secretaries of Labor and HHS. By contrast, at any time, a Governor can 
opt to include or not include TANF in a Combined State Plan, whether or 
not TANF is a required one-stop partner in the State.
    Comments: Another commenter asked how TANF being a required partner 
instead of a core partner translates into level of service delivery for 
clients.
    Departments' Response: The regulations do not differentiate between 
core programs and required one-stop partners with respect to level of 
service delivery. All required one-stop partners are expected to 
provide comparable levels of service delivery to one-stop customers, 
regardless of whether they are core programs under WIOA. No changes to 
the regulatory text were made in response to this comment.
    Comments: One commenter stated that this is an opportunity for the 
TANF program to partner with schools.
    Departments' Response: While the TANF program's inclusion in a 
State's one-stop delivery system may, in fact, provide an opportunity 
for TANF programs to partner with schools, this is a decision that 
should be made at the local level and will not be required by the 
Departments. As such, no changes to the regulatory text were made in 
response to this comment.
Section 678.410 What other entities may serve as one-stop partners?
    Partnerships across programs are critical to supporting the one-
stop vision for service delivery. Section 678.410 reinforces sec. 
121(b)(2)(B)(vii) of WIOA, which states that other Federal, State, 
local, or private sector entities that carry out workforce development 
programs may serve as additional one-stop partners if the Local WDB and 
CEOs approve.
    Comments: A few commenters recommended that the regulations should 
strongly encourage partnerships with disability service providers, as 
increasing the employment of persons with disabilities is a key goal of 
WIOA. Another commenter stated that SNAP employment and training 
programs would include the Basic Food

[[Page 55882]]

Employment and Training (BFET) and Able-Bodied Adults Without 
Dependents (ABAWD) programs. The commenter also asked whether Sec.  
678.410(b)(6) includes programs funded by the Office of Refugee 
Resettlement (ORR). Another commenter urged one-stop centers that have 
youth services to partner with Runaway and Homeless Youth (RHY) 
providers. The commenter explained that RHY providers have best 
practices for dealing with traumatized youth. One commenter looked 
forward to working with refugee English language training organizations 
and other organizations as potential one-stop partners.
    Departments' Response: Each one of the comments above suggests 
including programs as one-stop center partners. Local partners 
representing any one of these programs that provides services or serves 
participants who are in need of the career development or job placement 
services of the one-stop delivery system would be appropriate additions 
to the one-stop delivery system in a given local area and could be 
added as additional partners under Sec.  678.410(b)(6). Inclusion in 
the one-stop center of these and other programs is outlined in the 
local area strategic plan, and in the specifications for the selection 
of one-stop operators and service providers in the local areas. In 
response to these and other comments, which are addressed below, 
wording has been added to this section to clarify that the list of 
optional one-stop partners is not exhaustive. The Departments have 
determined that no additional specific regulatory language is needed.
    Comments: A commenter recommended that the Departments add a 
reference to local or regional labor market information, which should 
be used to drive strategic planning and one-stop partner decisions 
regarding the appropriate mix of services required in local areas.
    Departments' Response: Many factors, including labor market 
information, can inform what local partners should include in a one-
stop center. The Departments have not changed the examples of optional 
one-stop partners in the regulation, but have clarified that the list 
in Sec.  678.410 is not exhaustive, by changing ``including'' to 
``including, but not limited to'' in the catch-all provision of 
paragraph (b)(6). It should be noted that the term ``including'' is, by 
definition, nonexclusive, and that this addition is made for the sake 
of emphasis and should not to be interpreted as suggesting that any 
other use of the term ``including'' in these or any other regulations 
denotes exclusivity. The Departments agree that partners suggested by 
commenters can be appropriate and useful one-stop partners but have 
concluded that it is easier to communicate this flexibility by 
clarifying that the list is not exhaustive, rather than trying to list 
every potential partner.
Section 678.415 What entity serves as the one-stop partner for a 
particular program in the local area?
    This section provides a general definition of the entities that 
carry out the programs identified in Sec. Sec.  678.400 and 678.410 and 
serve as the one-stop partners. The regulation defines an entity as the 
grant recipient, administrative entity, or other organization 
responsible for administering the funds of the specified program in the 
local area. The term ``entity'' does not include service providers that 
contract with, or are subrecipients of, the local administrative 
entity. The regulation notes that for programs that do not have local 
administrative entities, the responsible State agency should be the 
one-stop partner.
    Section 678.410(d) lists the entity that acts as the WIOA title I 
one-stop partner for national programs in any particular local area. 
While YouthBuild was listed in the NPRM as one of these national 
programs, the paragraph failed to list which entity would serve as the 
one-stop partner. Just as for the Indian and Native American and 
Migrant and Seasonal Farmworker programs, the grantee of the YouthBuild 
program is the entity that will serve as the one-stop partner in a 
local area. The regulatory text has been amended to convey this and 
correct the omission in the NPRM.
    Comments: A commenter asserted that proposed Sec.  678.415(e), 
which designates the Perkins State eligible agency as the local one-
stop partner for purposes of negotiating the MOU, ``lacks any support 
in the text of the law and would make an already complicated 
negotiation process that much more complex.'' Several commenters 
recommended revising the paragraph to state that the entity that 
carries out the program is the local area's Perkins eligible 
institution, rather than the State eligible agency. Further, this 
commenter recommended that the Departments remove the clause about the 
State eligible agency delegating its responsibilities.
    Departments' Response: In response to these comments, the 
Departments agree that the local eligible recipient is a more 
appropriate one-stop partner for the Perkins program and have changed 
the regulatory text in Sec.  678.415(e) to provide that the Perkins 
one-stop partner is the eligible recipient at the postsecondary level, 
or a consortium of eligible recipients at the postsecondary level in 
the local area. This change is aligned to the statutory text in WIOA 
sec. 121(b)(1)(B)(vi). The regulatory text also has been revised to 
state that the Perkins one-stop partner may request assistance from the 
State eligible agency in completing its responsibilities as a one-stop 
partner.
    Comments: A few commenters interpreted proposed Sec.  678.415(c) to 
mean that if the State's VR program is under an umbrella agency that is 
not primarily concerned with vocational rehabilitation, the designated 
VR partner will be the director of the designated State unit.
    Departments' Response: Under Sec.  678.415(c), if the designated 
State agency--which these commenters refer to as an ``umbrella 
agency''--is not primarily concerned with VR, then the designated State 
unit for the VR program would be the local partner.
    Comments: One commenter stated that it is unclear from this section 
whether the Local WDB or its chosen title I provider is the entity that 
serves as the one-stop partner and recommended that the Local WDB not 
be considered the one-stop partner in this case.
    Departments' Response: The Departments agree with the commenter 
that the Local WDB is not a one-stop partner, unless it is a specific 
program provider as well. The Departments have concluded that the 
proposed regulatory text is clear on this issue and have made no 
changes to the regulatory text.
    Comments: Another commenter agreed with the Job Corps center being 
the one-stop partner, but suggested also including the providers who 
conduct recruitment for the Job Corps program.
    Departments' Response: Determination of such an inclusion in the 
local one-stop delivery system is best left to the Local WDB. These 
providers will remain permissible one-stop partners but will not be 
required, and the Departments decline to change the regulatory text in 
response to this comment.
    Comments: One commenter suggested allowing the State TANF agency to 
delegate its responsibilities under Sec.  678.415(a), as other 
mandatory partners are permitted to do.
    Departments' Response: The Departments' interpretation of WIOA is 
that the local TANF program is the required one-stop partner that, 
therefore, holds the responsibilities mentioned by this commenter. 
Matters concerning the roles of entities in

[[Page 55883]]

carrying out TANF must be addressed under the TANF authorizing statute.
    Comments: Some commenters expressed support for not requiring the 
one-stop partner to have responsibilities in local areas where that 
program or activity is not carried out.
    Departments' Response: The final regulation continues to reflect 
this policy.
Section 678.420 What are the roles and responsibilities of the required 
one-stop partners?
    This section describes and elaborates upon the statutory 
responsibilities of the one-stop partners. These responsibilities and 
corresponding WIOA provisions are identified and summarized in 
paragraphs (a) through (e) of Sec.  678.420. Jointly funding services 
is a necessary foundation for an integrated service delivery system. 
All partner contributions to the costs of operating and providing 
services within the one-stop delivery system must be proportionate to 
the benefits received and also must adhere to the partner program's 
Federal authorizing statute and to Federal cost principles requiring 
that costs are reasonable, necessary, and allocable. The requirement in 
Sec.  678.420(e), to provide representation on State and Local WDBs, is 
new in WIOA and is required only of core programs; WIA only required 
one-stop partner representation on Local WDBs, and required it for all 
one-stop partner programs. The Departments have begun issuing guidance 
and providing the system with technical assistance on matters related 
to this section and will continue to do so.
Responsibilities Related to Infrastructure Cost Contributions
    Comments: A commenter asked whether the statement in this section 
that references Federal laws on administrative costs refers to the 
established ceilings on the infrastructure contributions that can be 
expected from certain programs, such as VR.
    Departments' Response: This is the intent of the rule and, as such, 
the Departments have made no changes to the regulatory text in response 
to this comment.
    Comments: A commenter stated that partner programs would be more 
likely to contribute to infrastructure costs if the individual 
programs' authorization were amended to include that expectation.
    Departments' Response: Revisions to the authorizing statutes and 
regulations of individual programs are beyond the scope of this 
regulation.
    Comments: Another commenter stated that it would be very 
challenging to establish equitable funding to support a one-stop 
delivery system without stronger language and guidance governing the 
required one-stop partners.
    Departments' Response: The Departments have released, and will 
continue to release, guidance relating to this and many other issues. 
The Departments concluded that the guidance will be sufficient in 
assisting one-stop partners in supporting a one-stop delivery system 
and decline to make a change to the regulatory text.
    Comments: A few commenters said that Sec.  678.420(b) can be 
construed to mean that YouthBuild programs must contribute money to 
their local one-stop delivery system. The commenters expressed concern 
that YouthBuild programs would have to pay into the one-stop delivery 
system for infrastructure support when the money is needed to operate 
the program.
    Departments' Response: As a statutorily required one-stop partner 
program, YouthBuild is required by sec. 121(b)(1)(A)(ii) of WIOA to 
contribute to the infrastructure costs of any one-stop center in which 
it participates, based on proportionate use and relative benefit 
received. The Departments do not have authority to change this 
requirement and have made no changes to the regulatory text in response 
to these comments.
    Comments: A commenter requested additional guidance on proportional 
benefits received and also on costs associated with title II providers 
contributing to one-stop infrastructure.
    Departments' Response: The portion of this preamble addressing 
public comments and changes made to the provisions in subpart E 
relating to ``One-Stop Operating Costs'' also addresses many of these 
issues.
Other Comments
    A few commenters recommended rewording this section to state that 
not all one-stop partners are required to be members of the State and 
Local WDBs.
    Departments' Response: After considering this comment, the 
Departments have concluded that the language of the proposed regulatory 
text is clear that not all one-stop partners are required to be members 
of the State and Local WDBs. No changes to the regulatory text were 
made in response to this comment.
    Comments: One commenter asked what recourse a Local WDB would have 
if States allocate the majority of their program funding to more 
populous areas, leaving rural areas underfunded.
    Departments' Response: The allocation of funds by programs is 
beyond the scope of this regulation and WIOA. As such, the Departments 
have no ability or authority to create such a recourse mechanism. As 
good faith partners in the one-stop delivery system, however, the 
Departments expect that programs will operate in a manner that best 
serves the needs of a State.
Section 678.425 What are the applicable career services that must be 
provided through the one-stop delivery system by required one-stop 
partners?
    WIOA requires one-stop partners to deliver applicable program-
specific career services. This regulation clarifies that an applicable 
career service is a service identified in Sec.  678.430 and is an 
authorized program activity.
    Comments: A few commenters requested clarification on what services 
must be physically available in one-stop centers. Another commenter 
said that proposed Sec.  678.425 does not describe how or where these 
services must be provided and suggested that customers should be able 
to receive in-person assistance with the required partners. Another 
commenter expressed support for eliminating the sequence of services, 
as this would provide staff with greater flexibility to serve 
customers.
    Departments' Response: The Departments have not made changes to 
Sec.  678.425. Section 678.305(b)(1) specifically states that 
comprehensive one-stop centers must provide career services described 
in Sec.  678.430. The language is not qualified by the phrase ``access 
to,'' meaning that career services must actually be provided in the 
comprehensive one-stop centers. With respect to programs and activities 
to which the one-stop partners must provide access, as set forth in 
Sec.  678.305(b)(2) through (4), the regulations describe requirements 
concerning physical presence of staff and in-person assistance in Sec.  
678.305(a), (c), and (d). Paragraph (a) of Sec.  678.305 requires that 
at least one title I staff person be physically present in a 
comprehensive one-stop center. Paragraph (c) of Sec.  678.305 requires 
customers to have access to one-stop partner programs in a 
comprehensive one-stop center, and paragraph (d) defines ``access'' as 
including, but not limited to, physical presence of partner program 
staff appropriately trained to provide information to customers about 
the programs, services, and activities available through partner 
programs. That is, one-stop partner programs do not need to be 
physically present in a comprehensive one-stop center, but they

[[Page 55884]]

must provide access to their services in the ways described in Sec.  
678.305(d).
Section 678.430 What are career services?
    Unemployment Insurance Claims Filing and Assistance. Section 
678.430 specifies the career services that one-stop partners must 
provide through the one-stop delivery system. Paragraph (a)(10) 
provides that core services include providing meaningful assistance to 
individuals seeking assistance in filing a claim for unemployment 
compensation.
    Comments: Several commenters addressed the proposed definition of 
``meaningful assistance.'' In particular, one commenter expressed 
support for the definition as it allows for technology to be used to 
provide the assistance. However, this commenter joined many others in 
expressing strong disagreement with the discussion in the preamble to 
the NPRM that one-stop customers referred to a phone-based service for 
UI claims be sent to a dedicated phone line for one-stop customers, 
rather than the general State UI queue. These commenters asserted that 
this requirement is not in WIOA; would be costly and difficult to 
maintain during times of high call volume; fails to take advantage of 
existing UI claims filing and assistance technology infrastructure in 
many States; and gives priority to individuals who are able to travel 
to one-stop centers, thereby disproportionately affecting individuals 
who are unable to travel to one-stop centers due to distance, lack of 
transportation options, or disability. A few commenters also stated 
that this requirement conflicts with the fact that most UI claims are 
done remotely through self-service options, including mobile 
applications and Web sites. One commenter asked for the definition of 
``within a reasonable time.'' Another commenter said that the 
definition of ``meaningful assistance'' is not clear.
    Departments' Response: The Departments disagree with the comments 
regarding a dedicated phone line for one-stop customers using UI 
services. States are not required to have a dedicated phone line for 
one-stop customers, but a phone line would provide a direct linkage for 
providing services remotely as required by Sec.  678.305(d). More 
importantly, simply referring one-stop customers to the general UI 
queue, without otherwise making trained staff available does not 
qualify as ``meaningful assistance.'' Therefore, if local areas choose 
to provide meaningful assistance through technological means, trained 
staff must be available such as through a dedicated phone line.
    In response to the comments regarding concerns that the 
``meaningful assistance'' requirement to help individuals file UI 
claims is overly burdensome, the Departments note that Sec.  
678.430(a)(10)(i) provides flexibility to States regarding 
implementation by providing a menu of options for States to meet the 
requirement. The regulation does not mandate the service delivery 
methodology. Options include the ability to provide the service 
remotely as long as it is provided by trained and available staff 
within a reasonable time. The Departments also note that this 
requirement is targeted to individuals who need assistance and is not 
intended to replace State processes for taking claims remotely, either 
online or by phone. The Departments have not provided a definition of 
reasonable time because that varies by circumstances. The Departments 
have made no changes to the regulatory text in response to these 
comments.
    Comments: Many commenters raised concerns about private entities or 
contractors providing assistance with filing UI claims, asserting that 
this should be considered an inherently governmental function that must 
be conducted by State merit staff. These commenters said that if UI 
staff is not present in one-stops to fulfill this function, Employment 
Services staff could do so. A few commenters also recommended that 
``State merit'' be inserted before ``staff'' in proposed Sec.  
678.430(a)(10)(i)(A) and (B). A commenter expressed concern regarding 
the definition of ``filing,'' suggesting that it should not be the 
function of one-stop or Wagner-Peyser Act staff to file UI 
applications.
    Another commenter asked for guidance on defining ``and assistance'' 
in the requirement to provide ``information and assistance regarding 
filing claims for unemployment compensation.'' Another commenter 
expressed support for the proposed expanded definition of ``enhanced 
career services'' including UI claims filing assistance and eligibility 
assessments.
    Departments' Response: The Departments decline to make changes to 
Sec.  678.430(a)(10) to refer to State merit staff. The assistance 
requirement only encompasses helping the individual navigate the 
State's claims filing process and providing the individual with general 
information on their responsibilities as a claimant. These functions 
are informational in nature and not directly connected to determining 
the claimant's eligibility for benefits. The requirement does not 
encompass speaking specifically to the individual's potential 
eligibility for benefits or making any determinations regarding the 
individual's eligibility for benefits, which are inherently 
governmental functions that must be provided by UI merit staff. The 
Departments note that it has been permissible for non-State merit staff 
to carry out similar functions, for example, reviewing compliance with 
State work search requirements as part of the Reemployment and 
Eligibility Assessment program for many years. The Departments 
reiterate the importance that, if these functions are carried out by 
non-UI staff, States must ensure that the staff is well trained. The 
Departments expect to provide additional guidance and technical 
assistance to States on the implementation of these provisions. For the 
reasons stated above, the Departments are not revising the regulatory 
text in response to these comments. For more information about the 
impact of WIOA implementation merit staffing for the Wagner-Peyser Act, 
see 20 CFR 652.215.
Temporary Assistance for Needy Families
    Comments: Several commenters addressed the Departments' request for 
comment regarding the identification and inclusion of TANF employment, 
related supported services, and TANF intake functions as career 
services that must be provided in one-stop centers. For example, some 
commenters suggested that because there are so many ways of delivering 
TANF intake services (e.g., electronically), States should have 
flexibility in determining whether TANF intake services should be 
physically located in the one-stop centers.
    Departments' Response: The Departments recognize the need, and 
utility, of providing States flexibility in implementing TANF intake 
services and have added two paragraphs to Sec.  678.430. Paragraph 
(a)(2) of Sec.  678.430 states, in pertinent part, that ``[f]or the 
TANF program, States must provide individuals with the opportunity to 
initiate an application for TANF assistance and non-assistance benefits 
and services . . .'' This provides States with flexibility as to how 
this is achieved. As a required partner, however, TANF must still 
provide access (as defined by Sec.  678.305(d)) to employment services 
and related support services. To this end, paragraph (d) has been added 
to Sec.  678.430, stating that ``[i]n addition to the requirements in 
paragraph (a)(2) of this section, TANF

[[Page 55885]]

agencies must identify employment services and related support being 
provided by the TANF program (within the local area) that qualify as 
career services and ensure access to them via the local one-stop 
delivery system.''
    Comments: Another commenter suggested that required partners should 
be required to provide TANF outreach and intake at one-stop centers.
    Departments' Response: As TANF is a required one-stop partner by 
default, and only is excluded from the one-stop delivery system through 
a decision by the Governor, TANF outreach and intake services must be 
provided at any one-stop center for which TANF is a partner.
    Comments: One commenter asserted that including TANF intake 
functions as career services would require significant cross training 
of other program staff in their State. For these reasons, the commenter 
supported the continuation of the colocation/co-enrollment model for 
TANF services at one-stop centers. Another commenter asked whether 
State agency staff were properly cross trained to conduct TANF intake.
    Departments' Response: The Departments recognize that some services 
come at higher costs than others, and this is one of the many factors 
that must be weighed in determining how best to deliver services. In 
addition, the question of what constitutes ``proper'' training on the 
TANF program for local one-stop workforce staff will depend on the TANF 
benefits and services that are offered at the local one-stop center.
    Comments: A few commenters stated that requiring one-stop centers 
to process TANF applications that are not related to employment is 
unhelpful and should not be considered career services.
    Departments' Response: As mentioned above, the Departments' review 
and consideration of comments made on the NPRM, particularly the 
language regarding intake, application processing, and initial 
eligibility determinations for TANF assistance and non-assistance 
benefits at one-stop centers, prompted the Departments to modify the 
requirement from how it was proposed in the NPRM. This modified 
requirement, found in final Sec.  678.430(a)(2), requires that, at a 
minimum, the one-stop centers must enable a family to initiate an 
application (as defined by the State agency) for TANF assistance and 
non-assistance benefits and services. One-stop centers could accomplish 
this by having paper application forms available at the one-stop center 
or by having information or links to the application on the one-stop 
center's Web site.
    The Departments have determined that allowing customers in need of 
career services to have the opportunity to initiate an application for 
TANF benefits at one-stop centers is not counterproductive or 
unhelpful. On the contrary, providing for a family's unmet needs via a 
TANF benefit is crucial to ensuring progress and success in meeting 
career service objectives.
    The Departments affirm the NPRM preamble explanation on the 
identification and delivery of career services (restated below) absent 
a definition of career services in the TANF statute.
    The TANF statute does not include a definition for career services. 
Accordingly, the TANF State grantees must identify any employment and 
related support services that the TANF program provides (within the 
particular local area) that are comparable with the career services as 
described in this section.
    Comments: A few commenters remarked that there is no universal 
English as a Second Language (ESL) test under TANF or other employment 
and training programs and suggested that ESL providers are better at 
conducting language proficiency testing than employment service 
providers. Another commenter suggested that one-stop providers should 
be expected to provide services to linguistically and culturally 
diverse populations.
    Departments' Response: The regulations do not require a specific 
ESL test as part of the initial assessment of skills, or to gain 
meaningful access to TANF or other Federal programs. They leave the 
selection and use of assessment tools, and qualified administrators of 
such tools, up to the partner program or service provider, as 
appropriate to individual participants. If any one-stop partner or 
service provider receives funds directly or indirectly from HHS or 
other Federal agencies, it is required under title VI of the Civil 
Rights Act of 1964 and its implementing regulations, to take reasonable 
steps to ensure meaningful access to its programs by persons with 
limited English proficiency. Title VI also prohibits Federal grant 
recipients from utilizing methods of administration that have the 
effect of discriminating against persons based on their race, color, or 
national origin. In some cases, a provider's failure to provide 
language assistance to linguistically or culturally diverse populations 
could be a violation of title VI. However, the title VI requirement to 
take reasonable steps to ensure meaningful access does not mean that 
jurisdictions are required to provide universal ESL training. While 
individual jurisdictions may need to provide ESL training and testing 
to TANF family members in some cases, universal ESL training is not a 
statutorily mandated requirement.
Other Career Services
    Comments: A commenter suggested that career services also should 
include a pre-screening for eligibility for supportive services such as 
the Children's Health Insurance Program (CHIP), SNAP, the Earned Income 
Tax Credit, TANF, and transportation services alongside the initial 
assessment of skill levels.
    Departments' Response: Paragraph (a)(2) of Sec.  678.430 requires 
that, along with intake, an orientation to the other services and 
programs provided at the one-stop center must be given to participants, 
and paragraph (a)(5) requires referrals to, and coordination of, 
activities with other programs and services. The Departments have 
determined that this strikes a balance between the burden on one 
program's staff to be knowledgeable about other partner programs and 
the benefit that this knowledge can be to participants. Requiring all 
staff to do pre-screening for the programs identified by the commenter 
would take time away from providing actual programmatic assistance to 
participants, as well as delay other participants from receiving 
services.
    Comments: Other commenters requested additional guidance on the 
initial assessment process. The commenters asked whether there is a 
specific point in service delivery when initial assessments should be 
provided to customers, what the vision and intent is of this 
assessment, and how the assessment is to be used. Another commenter 
asked whether there are any standardized tools to be used to conduct 
this assessment.
    Departments' Response: The Departments intend to issue joint 
guidance on this subject in the near future.
    Comments: One commenter said that the assessment should be tailored 
to include an evaluation of women's ``interest and aptitude for higher-
wage, nontraditional careers.''
    Departments' Response: The Departments have decided not to change 
the regulatory text in response to this comment. The Departments 
recognize the importance of placing women in higher-wage, 
nontraditional careers, but note that local areas have discretion to 
undertake such an evaluation as part of

[[Page 55886]]

the initial assessment of skill levels required in Sec.  678.430(a)(3).
    Comments: A commenter recommended rewording paragraph (b)(1) of 
Sec.  678.430 to state, ``Comprehensive and specialized assessments of 
the skill levels, interests, values, aptitudes, and service needs of 
adults and dislocated workers . . .''
    Departments' Response: The Departments have decided not to change 
the regulatory text in response to this comment. The assessment of 
skill levels could very well include these elements, but the 
Departments had determined that the inclusion of such elements is best 
left up to the Local WDB and partners to decide, given that they are in 
a position to adapt these processes to local area needs.
    Comments: Another commenter suggested that these assessments should 
include disability-related barriers to employment and the development 
of an action plan to reduce these barriers, as well as information on 
how to access common disability-related services. This commenter also 
recommended that when to disclose a disability and how to request a 
reasonable accommodation should be part of career counseling.
    Departments' Response: Disability-related barriers to employment 
and information on how to access disability-related services are 
elements of the assessment process that the Departments encourage Local 
WDBs and partner programs to implement, but the Departments have 
decided not to change Sec.  678.430(b)(1) in response to the comment at 
this time. The assessment process is meant to be molded to best fit a 
local area's employment environment and the needs of the participants, 
potential employers, and the community. Moreover, as written, Sec.  
678.430(b)(1)(ii) specifically indicates that assessments may include 
in-depth interviewing and evaluation to identify employment barriers, 
which could include disability-related barriers.
    Comments: A commenter expressed support for the inclusion of 
financial literacy as an allowable activity. The commenter stated that 
bundling financial education with workforce development leads to 
improved employment and financial outcomes. Another commenter suggested 
that there should be financial literacy programs specifically targeting 
individuals with disabilities.
    Departments' Response: The Departments agree with the commenter's 
statements about the bundling of financial education with workforce 
development. While the Departments have chosen not to change Sec.  
678.430(b)(9) to specifically include financial literacy programs 
targeting individuals with disabilities, the Departments encourage 
Local WDBs to implement such plans as they determine are necessary to 
meet the needs of a local area.
    Comments: One commenter recommended that one-stop center partners 
should work with local institutions to ensure that one-stop customers 
are banked (e.g., have banking accounts) to reduce reliance on 
predatory lending.
    Departments' Response: The Departments recognize the need to combat 
predatory lending and encourage Local WDBs to make such partnerships a 
part of their financial literacy services programs. However, the 
Departments decline to change the regulatory text to mandate such 
relationships because they may not be appropriate for every local area. 
The Local WDB is in the best position to determine if such a service is 
needed in a particular local area.
    Comments: Another commenter recommended that transportation should 
be put in a separate paragraph to emphasize that transportation for 
youth includes transportation to one-stop centers and work sites. The 
commenter also suggested that referrals to organizations that assist 
with housing, food, and obtaining identification documents should be 
provided at one-stop centers.
    Departments' Response: The provision of information about the 
availability of, and the referral to, transportation provided through 
TANF are included in WIOA sec.134(c)(2)(A)(1)(ix) and in Sec.  
678.430(a)(9) as a career service. The commenter's recommendation about 
transportation is adequately addressed in the regulatory provision as 
drafted, and the Departments have decided that it is not necessary to 
include it in a separate paragraph. The Departments have also 
determined that Sec.  678.430(a)(9), requiring information and 
referrals to be provided for other supportive services and assistance, 
would encompass referrals to other services as suggested by the 
commenter. While the list in the regulation does not specifically 
mention some of these services, it is a non-exhaustive list. Local WDBs 
are free to provide information and referrals to any supportive 
services that they determine would benefit one-stop participants in a 
local area.
    Comments: Another commenter said that it might be confusing to 
differentiate between basic and individualized career services.
    Departments' Response: The Departments have decided to make a 
distinction and separation between these terms. Basic services are 
those made available to each individual who accesses a one-stop center, 
while individualized services are those that are tailored to each 
participant to best meet his or her needs.
    Comments: A commenter suggested that if career services are 
classified as ``pre-enrollment'' and ``required enrollment,'' Local 
WDBs could determine the customer flow without having to worry about 
cost issues.
    Departments' Response: While the Departments have determined that 
some career services are more appropriate for those in pre-enrollment 
or those enrolled in a program, the Departments have determined that it 
is best to leave this distinction to the Local WDBs, as they are in 
better positions to recognize and respond to the needs of the local 
area.
    Comments: A couple of commenters stated that Sec.  678.430(a) 
potentially conflicts with Sec.  678.305, and suggested that the 
Departments rephrase it to read: ``Basic career services must be made 
available in accordance with the methods outlined in Sec.  678.305, at 
a minimum. . .''
    Departments' Response: The Departments disagree, having found, 
after examination of the text, no conflicting language or intent in 
these two sections. No changes to the regulatory were made text in 
response to this comment.
    Comments: Another commenter suggested adding ``and recognized 
postsecondary credentials'' to Sec.  678.430(a)(4)(i)(A) to place 
additional emphasis on the benefits of such credentials.
    Departments' Response: The Departments have not made such a change 
in the regulatory text, but postsecondary credentials and their 
importance in the employment environment of a local area will be 
emphasized by title II and other educational programs.
    Comments: One commenter expressed disagreement with Sec.  678.430, 
asserting that it restricts what WIOA allows. The commenter recommended 
that States should be permitted to develop guidelines to help local 
areas determine how to deliver services.
    Departments' Response: After consideration, the Departments have 
not found this section to restrict WIOA's allowances and, in fact, the 
Departments have determined that Sec.  678.430 is unrestrictive 
regarding what services a one-stop center may provide to a local area. 
The list of career services here are

[[Page 55887]]

required, but the list should not be read as excluding additional 
career services that a Local WDB may decide the local area needs. 
Nothing in this regulation prohibits States from developing guidelines 
on the deliverance of services, and the Departments encourage States to 
do so.
    Comments: A few commenters requested guidance on how to deliver 
career services when multiple one-stop partners might provide similar 
services.
    Departments' Response: The coordination among partners over which 
partner or partners will provide a service at any particular one-stop 
center or affiliated site is a subject that must be agreed upon and 
described in the MOU.
    Comments: A commenter asked for clarification on the definitions of 
``group counseling'' and ``individual counseling.''
    Departments' Response: ``Group counseling'' involves two or more 
participants addressing certain issues, problems, or situations that 
may be shared by the group members, while ``individual counseling'' is 
a one-on-one session that may go into greater detail about a particular 
participant's needs.
    Comments: A few commenters recommended that States be given 
flexibility in determining follow-up time frames and whether follow-up 
services are appropriate.
    Departments' Response: The 12-month time frame requirement for 
follow-up services to be conducted is established by WIOA sec. 
134(c)(2)(A)(iii). No change to the regulatory text was made in this 
section in response to the comments.
Section 678.435 What are the business services provided through the 
one-stop delivery system, and how are they provided?
    The one-stop delivery system is intended to serve both job seekers 
and businesses. Similar to job seekers, businesses should have access 
to a truly one-stop experience in which high quality and professional 
services are provided across partner programs in a seamless manner. 
Labor markets are typically regional, but programs often design service 
delivery strategies around State and local geographic boundaries. 
Effective business services must be developed in a manner that supports 
engagement of employers of all sizes in the context of both regional 
and local economies, but should avoid burdening employers, for example, 
with multiple uncoordinated points of contact. Section 678.435(a) lists 
required business services. Section 678.435(b) States that local areas 
have flexibility to provide services that meet the needs of area 
businesses and must carry out these activities in accordance with 
relevant statutory provisions.
    Comments: A commenter encouraged the Departments to improve the 
marketing of one-stop services to employers, because many employers 
that could benefit substantially from these services are not aware that 
there are one-stop services available to them.
    Departments' Response: While the Departments encourage Local WDBs 
and one-stop operators to increase efforts to reach out to local 
business industries and sectors, and to form and foster these 
relationships and partnerships is required by both the regulations in 
the section and WIOA, the Departments have determined this is a 
decision best left up to the Local WDBs. This will ensure that these 
efforts can be customized to fit the particular employment environment 
of the local area and remain malleable to the changing employment 
landscape.
    Comments: Several commenters recommended that employers be provided 
with an individual liaison at the one-stop center.
    Departments' Response: Individual liaisons can be an effective 
mechanism for serving employers. However, each local one-stop center 
should structure business services to best meet the needs of the 
employers that they serve; the Departments decline to require that all 
one-stop centers use this structure, although it may be a best practice 
that should be encouraged. The Departments also note that the duties of 
the one-stop operator under Sec.  678.620(a) may include the 
coordination of service delivery by required one-stop partners and 
service providers. This could reasonably include interacting with 
employers on a regular basis to ensure that appropriate service 
providers are meeting the employers' needs. For these reasons, no 
change was made to the regulatory text concerning this topic. However, 
the Departments will continue to engage with business customers to 
determine the best ways to determine effectiveness in serving employers 
and to improve those services continuously.
    Comments: Several commenters recommended eliminating references to 
sector partnerships in this section. The commenters asserted that it is 
important to distinguish between developing and implementing sector 
partnerships and simply providing career or training services to 
employers in a particular industry. Further, the commenters said that 
while sector partnerships are described as a required activity in Sec.  
678.435(a), paragraph (c) describes sector partnerships as one of 
several permissible activities that Local WDBs may undertake. The 
commenters suggested that the Departments should revise the language to 
state that Local WDBs should ensure that business services provided at 
one-stop centers can support sector partnerships in local areas.
    Departments' Response: The Departments view the development of 
industry and sector partnerships as a critical business service that 
local areas must explicitly provide as required by WIOA sec. 
134(c)(1)(A)(v). Regarding the commenters' statements about Sec.  
678.435(a) and (c), these paragraphs do not describe the same services. 
Paragraph (a) refers to ``industry or sector partnerships,'' while 
paragraph (c)(1) refers to ``industry sector strategies,'' which, as is 
noted in the regulatory text, could include strategies involving 
industry partnerships. Because these are separate services and not 
references to the same or duplicative services, the Departments have 
concluded that no change to the regulatory text is necessary. Moreover, 
while it is important for business services provided through one-stop 
centers to properly support industry sector partnerships, to change the 
regulatory text to specify this could have the unintended consequence 
of making this appear as a priority above providing these services to 
non-partner employers that seek them out.
    Comments: One commenter requested additional guidance regarding the 
implementation of sector partnerships, particularly the role of the 
convener (e.g., Local WDBs). Another commenter said that the limited 
instructions in the NPRM regarding sector partnerships might indicate 
that they are not a high priority and result in delayed implementation.
    Departments' Response: The Departments have concluded that the 
regulatory text does not indicate these sector partnerships are a low 
priority, but rather the regulatory text indicates that the details of 
how these partnerships are structured and operate are best left to 
Local WDBs with agency guidance, as they are in a better position to 
know the individual needs of a local area.
    Comments: The Departments received a number of comments that 
discussed the types of services that should be available to employers. 
One commenter suggested that one-stop centers should be able to provide 
services for employers interested in hiring individuals with 
disabilities. Another commenter said that the list of services to 
employers should be expanded to include services that are important for

[[Page 55888]]

hiring and retaining employees with disabilities, including 
``information on work experience options and tax credits, assistance 
and information on job accommodations and assistive technologies, and 
disability awareness training.''
    Departments' Response: The Departments have considered the 
suggestions regarding the types of services that should be available to 
employers, and have decided to amend the regulatory text to include 
some, but not all, of the suggestions.
    Business services related to job accommodations and assistive 
technology for individuals with disabilities have been included at 
Sec.  678.435(b)(4)(vi) to encourage not only these specific practices, 
but also the provision of other disability hiring services and general 
disability awareness. Information on local, State, and Federal tax 
credits is already listed as a possible business service to be provided 
under Sec.  678.435(c)(6). The Departments do not consider information 
on work experience options, suggested by the commenter, as a business 
service and have not added this to Sec.  678.435(c).
    Comments: Another commenter also suggested including individuals 
with disabilities in job fairs and customized recruitment events and 
expanding the list of services to include assistance on legal 
requirements and best practices around accommodating individuals with 
disabilities.
    Departments' Response: The Departments recognize the need to 
provide access to these services. However, the Departments have 
concluded not to make this addition to this section of the regulation 
because the Departments have determined that this level of detail is 
not necessary. All WIOA services are subject to the nondiscrimination 
requirements of WIOA sec. 188 and its implementing regulations at 29 
CFR part 38. Additionally, the Departments have made technical 
assistance on holding effective and inclusive job fairs available and 
will continue to provide guidance and resources regarding appropriate 
accommodations.
    Comments: A couple of commenters expressed support for Sec.  
678.435 and suggested additional services to employers including 
metrics, recordkeeping, and data analysis; affirmative action planning 
and assistance with goal attainment; assessment of employer needs; 
accessibility reviews; cultural awareness of specific disabilities; 
mentoring; on-the-job evaluation; and disability management for 
existing workforces. Another commenter said that businesses could use 
assistance developing ``position descriptions'' to better define the 
skills required for positions, as well as assistance locating 
information on where certifications are awarded.
    Departments' Response: While the Departments recognize the 
advantages of providing these and other services, the Departments also 
recognize that providing an all-encompassing list of possible business 
services is an impossibility and would restrict creative thinking about 
methods of service provision, the encouragement of which is at the 
heart of WIOA. Because of this, the list of possible business services 
in the regulation will remain a non-exhaustive list and the Departments 
made no changes to the regulatory text in response to these comments.
    Comments: One commenter recommended that the Departments should 
clarify their use of the phrase ``labor laws'' to ensure that it is 
clear this includes all Federal employment discrimination laws.
    Departments' Response: The Departments recognize the need for 
clarity in this language and have revised the regulatory text to 
include employment and discrimination laws in Sec.  678.435(b)(4)(vii).
    Comments: Another commenter suggested that Job Corps should be a 
required partner in the sector partnerships required in Sec.  
678.435(a).
    Departments' Response: To fully support the development of sector-
based strategies, the Departments are providing States, local areas, 
and regions with flexibility. The Departments strongly encourage that 
sector partnerships include a variety of entities, including training 
and education programs like Job Corps. Given the range of potential 
partners and the variety of industries and career pathways that may be 
included in a sector strategy, the Departments are not placing further 
regulatory requirements around partnerships, but will encourage such 
partnerships through guidance and technical assistance.
    Comments: One commenter asked whether the services provided in 
Sec.  678.435(b) but conducted by business intermediaries need to be 
located in the one-stop centers.
    Departments' Response: WIOA sec. 134(d)(1)(A) requires that 
business services, which are listed as a permissible local employment 
and training activity at WIOA sec. 134(d)(1)(A)(ix), be provided 
through the one-stop delivery system. No change to the regulatory text 
was made in response to this comment.
    Comments: Another commenter recommended that the Departments 
clarify in the regulations that it is an allowable activity for local 
areas to provide business services and develop relationships with the 
business community that will last beyond a change in one-stop operator 
or career services provider.
    Departments' Response: The Departments encourage Local WDBs to 
develop strategies to establish and sustain lasting partnerships and 
provision of business services. These business services may be provided 
by the Local WDB or through effective business intermediaries working 
in conjunction with the Local WDB, or through other public and private 
entities in a manner determined appropriate by the Local WDB and in 
cooperation with the State, consistent with Sec.  678.435(c). No change 
has been made to this portion of the regulatory text in response to the 
comment.
Section 678.440 When may a fee be charged for the business services in 
this subpart?
    WIOA allows customized employer-related services to be provided on 
a fee-for-service basis. Section 678.440 clarifies that there is no 
requirement that a fee-for-service be charged to employers. The Local 
WDBs, however, should examine available resources and assets to 
determine an appropriate cost structure. These Boards may also provide 
such services for no fee. The regulatory text was revised to add 
paragraph (d) to explain that fees earned are program income.
    Comments: One commenter expressed support for this section as 
proposed. Another commenter said that each program should be permitted 
to determine whether to charge a fee, instead of the Local WDB making 
that decision.
    Departments' Response: After considering this comment, the 
Departments have concluded that Local WDBs are in the best position to 
determine what business services are needed in a local area and what 
fee, if any, should be associated with the provision of these services. 
The Departments encourage Local WDBs to consult with partner programs 
when making such decisions, keeping in mind that any fees collected by 
partners are program income allocable to partner programs in proportion 
to the partner programs' participation in the activity. In this case, 
program income must be expended by the partner in accordance with the 
partner program's authorizing statute, implementing regulations, and 
Federal cost principles identified in

[[Page 55889]]

Uniform Guidance to ensure consistency with program income disbursement 
requirements. Additionally, the partner must consult its program 
statute and grant requirements to determine which method to use when 
disbursing program income as described in the Uniform Guidance at 2 CFR 
200.307(e).
    Comments: One commenter expressed concern that employer services 
beyond the provision of no-charge services under the Wagner-Peyser Act 
have not been discussed.
    Departments' Response: Local WDBs are not limited to only those 
business services discussed in this and other sections. They may also 
provide other business services that meet the workforce investment 
needs of area employers. If the Wagner-Peyser Act program provides 
funds for a business service, a fee cannot be charged. The Departments 
have concluded that the regulations sufficiently address business 
services and will not modify the regulatory text in response to this 
comment. Further joint guidance, however, will be released on this 
topic.
    Comments: A few commenters expressed concern about the prohibition 
on charging a fee for certain services. These commenters asked whether 
``appropriate recruitment and other business services on behalf of 
employers'' includes activities such as career expos, job fairs, and 
sector convening events. The commenters said that these events can be 
quite costly, and suggested that this section state that no fee, above 
a cost recovery fee, may be charged for services described in Sec.  
678.435(a).
    Departments' Response: Events such as career expos, job fairs, and 
sector convening events are not subject to the prohibition on charging 
fees as they are services provided under Sec.  678.435(b) and (c). For 
example, Wagner-Peyser Act funds are used for general labor exchanges, 
but these are limited to situations such as the use of a job board. 
These larger events are more tailored for employers, for which fee-for-
service is allowed. WIOA sec. 134(d)(1)(A)(ix) discusses activities to 
promote business services and strategies to meet workforce needs of 
employers, which may be provided on a fee-for-service basis.
4. Memorandum of Understanding for the One-Stop Delivery System (20 CFR 
Part 678, Subpart C; 34 CFR 361.500 Through 361.510; 34 CFR 463.500 
Through 463.510)
    This subpart describes the requirements for the MOU between the 
Local WDB, CEO, and the one-stop partners relating to the operation of 
the one-stop delivery system in the local area. The Local WDB acts as 
the convener of MOU negotiations and shapes how local one-stop services 
are delivered. One comment concerning the extension of existing MOUs to 
cover one-stop operations in PY 2016 was very pertinent and, as 
explained below, helped inform the Departments' decision on the 
implementation of the State funding mechanism, although this decision 
did not affect the regulatory language in subpart C. As explained in 
greater detail below, the Departments promulgate this subpart with no 
substantive changes.
    Comments: A commenter suggested that Governors should be permitted 
to opt out of the MOU requirement if a comparable mechanism already 
exists and achieves the desired results.
    Departments' Response: While the Departments recognize that 
existing mechanisms may already be in place in many States and local 
areas, bypassing the WIOA MOU process is not an option, because partner 
participation in the MOU is required by WIOA sec. 121(b)(1)(A)(iii). 
Any existing mechanisms will need to be supplanted by the WIOA MOU 
mechanism.
Section 678.500 What is the Memorandum of Understanding for the one-
stop delivery system and what must be included in the Memorandum of 
Understanding?
    Section 678.500 describes what must be included in the MOU executed 
between the Local WDB, with the agreement of the CEO, and the one-stop 
partners relating to the operation of the one-stop delivery system in 
the local area.
    Comments: A commenter recommended allowing existing MOUs in place 
under WIA to extend for the first program year of WIOA to acknowledge 
the unlikelihood of negotiating MOUs before the deadline.
    Departments' Response: The Departments note the first year of 
implementation for WIOA MOU provisions was PY 2015 (July 1, 2015 to 
June 30, 2016), which concluded prior to the effective date of these 
regulations.
    Comments: A commenter asked who specifically is supposed to write 
the MOU and wondered whether they can trust Local WDBs to write their 
own agreements.
    Departments' Response: Neither WIOA nor the regulations address 
which entity writes the MOU, but Sec.  678.500(a) specifies that the 
MOU must be a ``product of local discussion and negotiation'' among the 
Local WDB, chief elected official, and the one-stop partners,'' who all 
must sign it, according to paragraph (d), and which must include 
procedures for amending and reviewing it, according to paragraphs 
(b)(5) and (6). The Departments have determined that these provisions, 
and those in Sec.  678.510, include adequate safeguards for the 
drafting of the MOUs, and that specifying a single entity to draft the 
MOU would be too prescriptive.
    Comments: A commenter asked, for single-area States, if the State 
WDB assumes the MOU negotiation responsibilities, or whether the 
Governor/mayor assumes these responsibilities.
    Departments' Response: WIOA and the regulations do not assign 
negotiation responsibilities to a single party, and the regulations 
specify the joint nature of the responsibility among the parties. 
Therefore, no specific governmental entity is required by these 
regulations to assume MOU negotiation responsibilities, in single-area 
States.
    Comments: A few commenters supported the inclusion of provisions in 
this section that would allow one-stop partners to share client data 
through MOUs and confidentiality agreements.
    Departments' Response: WIOA and the regulations are silent on the 
inclusion of data sharing agreements in the MOU, but the Departments 
have concluded that the MOU may include such agreements, consistent 
with all applicable laws and regulations including 34 CFR 361.38 
(covering VR program privacy safeguards). No change to the regulatory 
text was made in response to these comments.
    Comments: A commenter said that the regulations should clarify that 
MOUs must be in accordance with 34 CFR 361.38.
    Departments' Response: The Departments agree; MOUs must not contain 
any provisions that violate the requirements of 34 CFR 361.38, which 
covers the protection, use, and release of personal information within 
the VR program. This applies specifically to Sec.  678.500(b)(3), which 
requires that MOUs include methods for referring individuals between 
the one-stop operators and partners for appropriate services and 
activities, as there are specific guidelines to be followed in 34 CFR 
361.38(e) regarding the release of participating individuals' 
information. As there are no specific requirements applying to the 
sharing of information, but rather only a requirement that the MOU 
provide the method of referrals from one partner program to another 
partner program, the Departments are not referencing the requirements 
of 34 CFR 361.38 in the regulatory text,

[[Page 55890]]

although such requirements will be mentioned in guidance released to 
aid in the implementation of the one-stop delivery system.
    Comments: Another commenter said that the MOU should include a 
specific process to ensure individuals are screened to determine the 
best set of services to receive at the one-stop center.
    Departments' Response: The Departments agree that individuals 
should receive the services that best meet their needs, but do not 
agree that the regulations should prescribe a screening process, 
especially given WIOA's movement away from the sequential delivery of 
services provided under WIA. The Departments will address this issue in 
guidance, if necessary, and through technical assistance.
    Comments: A few commenters requested additional guidance on MOU 
requirements, including whether the MOU should address partnerships 
that do not involve financial commitments, like housing agencies.
    Departments' Response: All one-stop partners must be signatories to 
an MOU, and all must use a portion of their funds to maintain the one-
stop delivery system including their proportionate share of one-stop 
infrastructure costs, whether this is through cash contributions, non-
cash contributions, or third-party in-kind contributions. These 
requirements are covered in much greater detail in subpart E of this 
part.
Section 678.505 Is there a single Memorandum of Understanding for the 
local area, or must there be different Memoranda of Understanding 
between the Local Workforce Development Board and each partner?
    Section 678.505 establishes that a Local WDB and one-stop partners 
may develop a single ``umbrella'' MOU that applies to all partners, or 
develop separate agreements between the Local WDB and each partner or 
groups of partners. Under either approach, the MOU requirements 
described in Sec.  678.500 apply. The Departments encourage States and 
local areas to use ``umbrella'' MOUs to facilitate transparent, 
flexible agreements that are not burdensome so that partners may focus 
upon service delivery.
    Comments: One commenter expressed support for the option to utilize 
an umbrella MOU or individual MOUs with each partner. Another commenter 
agreed that the umbrella MOU is the best approach, and said that MOUs 
for all local areas should be in a consistent format. In addition, a 
commenter asserted that WIOA sec. 121(c)(1) requires each Local WDB to 
enter into one MOU with all of the partners.
    Departments' Response: The Departments interpret sec. 121(c)(1) as 
permitting a single umbrella MOU that encompasses all partner programs, 
and the Departments encourage the use of such MOUs, but they are not 
required. No change to the regulatory text was made in response to this 
comment. The Departments will provide suggestions about the MOU in 
guidance and through technical assistance. However, because the MOU is 
the product of local discussion and negotiation developed by the Local 
WDB, with the agreement of the chief elected official and the local 
one-stop partners, which relates solely to the operation of the one-
stop delivery system in that particular local area, the determination 
of an MOU's format is best left to the Local WDBs, as long as the MOU 
meets the requirements outlined in Sec.  678.500 and any requirements 
mandated by the State.
    Comments: A different commenter expressed opposition to umbrella 
MOUs, saying that they will result in inaccurate cost allocations and 
inappropriate service delivery decisions.
    Departments' Response: The Departments have determined that there 
is no reason why umbrella MOUs will be less effective than multiple 
MOUs in addressing cost allocation and service delivery decisions in 
most situations. No change to the regulatory text was made in response 
to this comment.
    Comments: A commenter remarked that statewide organizations, such 
as VR, could have to enter into several dozen MOUs to cover all local 
areas.
    Departments' Response: This is correct. Any program that is a 
partner in a one-stop center, whether they are a partner in one or 
more, must sign an MOU with the appropriate Local WDB.
    Comments: A commenter suggested that the State WDB and any 
statewide partners negotiate on a ``mandatory agreement template'' that 
can be used by Local WDBs in their MOUs with these statewide agencies. 
Another commenter agreed and supported the development of a standard 
MOU for use with all Local WDBs.
    Departments' Response: While there is nothing to preclude the use 
of such a strategy, the Departments have determined not to require, 
encourage, or discourage such a method in order to leave the MOU 
mechanism as flexible and adaptable to local area situations as 
possible.
    Comments: A commenter said that partner programs operating outside 
of the workforce area (e.g., INA programs, Job Corps) should not be 
required to sign MOUs. Rather, the commenter said, these programs 
should commit to taking referrals from local areas and vice versa.
    Departments' Response: If a program is a required one-stop partner 
under WIOA sec. 121(b)(1) and the corresponding regulations found in 
subpart B of this part, then that program must sign an MOU with the 
Local WDB for each local area where it is a partner. According to WIOA 
sec. 121(b)(1)(A), required partners are limited to those entities that 
carry out programs or activities in a local area. Likewise, if a 
program is not required to be a partner but is approved by the Local 
WDB and CEO as an additional partner, that partner program must sign 
the respective MOU. The Departments have determined that, as this is 
required by WIOA, no changes to the regulatory text regarding what 
entities are required to sign MOUs are necessary.
Section 678.510 How must the Memorandum of Understanding be negotiated?
    Section 678.510 describes the collaborative and good-faith approach 
Local WDBs and partners are expected to use to negotiate MOUs. ``Good-
faith'' negotiations may include fully and repeatedly engaging 
partners, transparently sharing information, and maintaining a shared 
focus on the needs of the customer. Section 678.510(a) allows Local 
WDBs, CEOs, and partners to request assistance from a State agency 
responsible for the program, the Governor, State WDB, or other 
appropriate parties when negotiating the MOU. The Departments 
acknowledge that additional guidance and technical assistance will be 
needed on MOU requirements and negotiating infrastructure funding 
agreements. The Departments will issue guidance on this topic. Ongoing 
technical assistance will be made available to the public workforce 
system as well.
5. One-Stop Operators (20 CFR Part 678, Subpart D; 34 CFR 361.600 
Through 361.635; 34 CFR 463.600 Through 463.635)
    This subpart addresses the role and selection of one-stop 
operators. Unlike the other subparts in this Joint WIOA Final Rule, 
this subpart is administered primarily by DOL. DOL and ED agreed that 
the subpart should remain in this part of the Joint Rule, so that all 
of the subparts having to do with one-stop requirements are together. 
However, unlike the rest of part 678, this portion of the preamble 
refers mainly to DOL. For this reason, any reference to ``the

[[Page 55891]]

Department'' throughout this subpart D discussion is a reference to 
DOL.
    Comments: As noted, the Department received and evaluated numerous 
public comments on this topic. Several commenters expressed support for 
the Department's proposal to require competition for one-stop 
operators, primarily on the grounds that competition leads to better 
services and outcomes for job seekers. Others raised concerns, as 
detailed below.
    Department's Response: It is the conclusion of the Department that 
the requirement to use a competitive process for the selection of the 
one-stop operator is required by statute, as is the requirement for 
continuous improvement through evaluation of operator performance and 
regularly scheduled competitions. Competition is intended to promote 
efficiency and effectiveness of the one-stop operator by regularly 
examining performance and costs. The Department recognizes the 
challenges associated with competitive selection, including the 
additional costs such a process carries with it, the statutory 
requirement for a competitive process is clear. Additionally, 
competitive procurement processes are not uncommon in State and local 
government, and the Department encourages the consideration of methods 
used by other State and local government entities in streamlining their 
own process, as well as consideration of State and local procurement 
laws and the Uniform Guidance. Even with such a reference, however, 
additional guidance and technical assistance will be needed on MOU 
requirements and negotiating infrastructure funding agreements. Ongoing 
guidance and technical assistance will be made available to all parts 
of the public workforce system as well.
    Section 121(d)(2)(A) of WIOA only allows for selection of a one-
stop operator through a competitive process. This subpart uses the term 
``selection'' of one-stop operator through a competitive process, 
rather than ``designation'' or ``certification'' to avoid confusion. 
The competitive process established by this subpart requires States to 
follow the same policies and procedures they use for procurement from 
non-Federal funds as allowed under the Uniform Guidance at 2 CFR 
200.317. All other non-Federal entities, including subrecipients of a 
State (such as local areas), are required to use a competitive process 
based on the procurement standards in the Uniform Guidance set out at 2 
CFR 200.318 through 200.326.
    Unlike under WIA, there is no ``designation'' or ``certification,'' 
separate from the competitive selection requirements, of any entity as 
a one-stop operator, including a Local WDB. For Local WDBs, WIOA 
imposes an additional step beyond the competitive selection. Section 
107(g)(2) of WIOA states that a Local WDB may be designated or 
certified as a one-stop operator only with the agreement of the CEO in 
the local area and the Governor. DOL interprets this provision to 
create an additional requirement for situations in which a Local WDB is 
selected to be a one-stop operator through the competitive process as 
required under WIOA sec. 121(d)(2)(A) and as described in this subpart 
at Sec.  678.605(c). In situations in which the outcome of the 
competitive selection process is the selection of the Local WDB itself 
as the one-stop operator, WIOA sec.107(g)(2) requires that the Governor 
and CEO approve the selection.
    The DOL received many public comments regarding the impact of 
competition on local services. In response to these comments, changes 
were made to Sec.  678.605, simplifying the language regarding the 
procedures to be followed in conducting a one-stop operator selection 
competition. Some minor changes were also made to Sec. Sec.  678.620 
and 678.635 for clarity and consistency.
Section 678.600 Who may operate one-stop centers?
    Sections 678.600(a) through (d) describe who may operate a one-stop 
center. As stated in paragraph (a), WIOA allows a one-stop operator to 
be a single eligible entity or a consortium of entities. Consortia, 
like single entities, must be selected through a competitive process. 
Eligible entities identified in WIOA sec. 121(d)(2)(B). Section 
678.600(c)(6) clarifies that a Local WDB, with the approval of the 
chief elected official and the Governor, may serve as the one-stop 
operator. Section 678.600(c)(7) clarifies that another interested 
organization or entity, which is capable of carrying out the duties of 
the one-stop operator, may serve as the one-stop operator. Section 
678.600(d) repeats the requirement in sec. 121(d)(3) of WIOA that 
elementary schools and secondary schools are not eligible to be one-
stop operators; however, nontraditional public secondary schools such 
as night schools, adult schools, or area career and technical education 
schools are eligible to be operators.
    Section 678.600 states that a one-stop operator may be a single 
entity or a consortium of entities, and that if a consortium consists 
of one-stop partners, it must include a minimum of three of the one-
stop partners described in Sec.  678.400.
    Comments: One commenter stated that these two provisions of Sec.  
678.600(a), when taken together, do not make clear whether a single 
one-stop partner may be a one-stop operator. The commenter further 
stated that a one-stop operator may be a single one-stop partner, based 
on WIOA's intent and current practice, but requested that the 
regulations clarify this point.
    Department's Response: The commenter is correct in that a single 
one-stop partner may serve as a one-stop operator. Paragraph (c) of 
Sec.  678.600 lists the types of entities that may be selected as the 
one-stop operator. This repeats the eligible entities from WIOA sec. 
121(d)(2)(B), adding paragraph (c)(6) which states that a Local WDB, 
with the approval of the CEO and the Governor, may serve as a one-stop 
operator. Paragraph (c)(7) states that an interested organization of 
any other type that is capable of carrying out the duties of one-stop 
operator may serve as the operator. A single entity that is also a one-
stop partner may serve as operator, but in cases where more than one 
partner form a consortia to serve as operator, WIOA requires that the 
consortia contain a minimum of at least three one-stop partners. The 
Department declines to make any substantive change to the regulatory 
text and will be issuing guidance on this topic, as well as for 
competition for one-stop operators.
    Comments: A few commenters requested clarification on the phrase, 
``practices that create disincentives to providing services to 
individuals with barriers to employment that may require longer-term 
career and training services.'' Paragraph (e)(2) requires that State 
and Local WDBs ensure that one-stop operators do not establish 
practices that create disincentives to providing services to 
individuals with barriers to employment who may require longer-term 
career and training services. One commenter specifically recommended 
that one such practice that should be ``barred'' is sending older 
workers to self-service or the Senior Community Services Employment 
Program, both of which would prevent those workers from being counted 
in performance evaluations.
    Department's Response: The Departments have reiterated throughout 
the proposed regulations that all individuals with barriers to 
employment must be fairly evaluated for services, and services are to 
be made available and accessible in an equitable manner throughout the 
one-stop delivery system. Local WDBs must ensure that

[[Page 55892]]

one-stop operators do not create barriers that limit services to such 
individuals. WIOA sec. 188 and the corresponding regulations provide 
guidance on such issues for protected classes.
    Comments: A few commenters expressed concern about the selection of 
certain entities as one-stop operators. For example, one commenter 
expressed concern that private entity management would not be efficient 
or cost-effective for rural areas. Further, the commenter stated that a 
private entity could have difficulty providing quality service to rural 
areas due to inadequate expertise, models, or knowledge of living and 
working in such areas.
    Department's Response: The final regulations guard against the 
concerns expressed by the commenters. Section 678.605 requires that the 
Local WDB is to make the ultimate selection of the one-stop operator 
based on the principles of full and open competition. A sound 
competitive process will objectively evaluate bidders' proposals on 
factors that may consider costs and the ability to meet the needs of 
the local area.
    Comments: A commenter expressed concern that partner infrastructure 
and one-stop operating costs could be impacted by the profit motivation 
of a private for-profit entity acting as a one-stop operator.
    Department's Response: The Department does not share this concern. 
Procurement standards under the Uniform Guidance at 2 CFR 200.323(b), 
require that profit must be negotiated separately from the price in 
addition to a cost analysis and/or price analysis. Records documenting 
or detailing the procurement history including the negotiation and 
analysis of profit must be maintained by all entities (2 CFR 
300.318(h)(i)). This provides transparency in the actual operating 
costs versus profits for any entity, including for-profit entities, 
selected under a competitive procurement. Section 683.295 of the DOL 
WIOA Final Rule addresses the earning of profit. WIOA allows private 
for-profit entities to be one-stop operators (sec. 121(d)(2)(B)(iv)); 
therefore, the regulations are consistent with WIOA.
    Private for-profit entities also are required to adhere to the 
Uniform Guidance at 2 CFR part 200. DOL's adoption of the Uniform 
Guidance at 2 CFR 2900.2 expands the definition of `non-Federal entity' 
to include `for-profit' and `foreign' entities. As such, any private 
for-profit entity that is a direct grant recipient or subrecipient of a 
DOL award must adhere to the Uniform Guidance.
    Comments: A commenter urged the Departments to provide maximum 
flexibility and more defined authority to State WDBs to select the one-
stop operator. Additionally, the commenter asked what it means to be an 
operator, how the operator will be paid, and how firewalls and 
conflicts of interest are defined.
    Department's Response: These final regulations provide maximum 
flexibility to States and local areas in selecting one-stop operators 
for the one-stop delivery system as long as the competitive process is 
consistent with the Uniform Guidance at 2 CFR part 200 and/or with 
State procurement policies. WIOA sec. 121(d)(1) states that Local WDBs 
select the one-stop operator, but they must have the agreement of the 
CEO. Governors and CEOs must concur in cases where the Local WDB acts 
as the operator itself. In single-area States, the State WDB fulfills 
the requirements of a Local WDB by selecting the one-stop operator. A 
competitive selection process creates a level playing field where 
applicants must propose how to respond to the unique needs and 
requirements set forth by the Local WDB. Competition is the most 
effective way to ensure that providers can effectively and efficiently 
serve as one-stop operators. No changes to the regulatory text were 
made in response to this comment.
    Regarding the role of a one-stop operator, Sec.  678.620(a) only 
requires that the one-stop operator must coordinate the service 
delivery of required one-stop partners and service providers. A 
nonexclusive list of other roles that can be assigned to the one-stop 
operator also exists in paragraph (a) of Sec.  678.620, but the 
assignment of these or other roles is always at the discretion of the 
Local WDB.
    Comments: One commenter requested clarity regarding who may approve 
the Local WDB serving as the one-stop operator when the CEO and the 
Governor are the same individual.
    Department's Response: The comment appears to be addressing 
concerns about the treatment of single-area States. In single-area 
States and outlying areas where the CEO and Governor are the same 
individual, the Governor approves the designation of the Local WDB as 
one-stop operator after the completion of a competitive process. Single 
area States will follow their own procurement policies per the Uniform 
Guidance at 2 CFR 200.317. State procurement policies may include 
additional procurement methods beyond those included in the Uniform 
Guidance or may allow for a non-competitive selection of a government 
entity. In cases where there is no competition, the State and State WDB 
must work together to establish necessary internal controls and 
firewalls to provide the public with assurances that although a 
competitive process is not conducted, there is no conflict of interest. 
The Department will be issuing guidance on this topic and will follow 
the issuance of guidance with technical assistance.
    As stated above, the competitive process applies to both State and 
locally operated one-stop delivery systems; WIOA is clear that neither 
Governors nor State WDBs have the sole authority to designate one-stop 
operators, except under the conditions of a sole source method of 
procurement as stated in WIOA sec. 123(b). States are expected to 
conduct a competitive process for the selection of a one-stop operator, 
with appropriate protections from conflict of interest, per the State's 
own procurement policies and procedures.
Section 678.605 How is the one-stop operator selected?
Comments on the Proposed Competition Process
    DOL examined the comments received and reviewed the statutory 
provisions upon which this section is based. WIOA made significant 
changes to the requirements regarding the selection of one-stop 
operators. As noted in the preamble to the NPRM, unlike the situation 
under WIA, WIOA sec. 121(d)(2)(A) only allows selection of a one-stop 
operation to be made through a competitive process.
    Comments: A number of commenters generally questioned the 
complexities and specificities of the process described in the NPRM.
    Department's Response: After considering those comments, the 
Department has revised the regulatory text by deleting much of the 
specific contract-related language in the proposed regulations as 
applied to non-Federal entities other than States. The language now 
more generally requires that those entities follow the competitive 
process in accordance with local policies and procedures and the 
principles of competitive procurement in the Uniform Guidance at 2 CFR 
200.318 through 200.326. This provides maximum flexibility in 
implementing the competition requirement. Furthermore, as noted in 
revised paragraph (c) of Sec.  678.605, any reference to 
``noncompetitive proposals'' in the Uniform Guidance should be read as 
``sole source selection'' for the purposes of Sec.  678.605(c).

[[Page 55893]]

    The competitive selection process permits more than one method of 
procurement, and procurement options are outlined in the Uniform 
Guidance at 2 CFR 300.320. Discussions based on comments made evident 
that there are many different methods of procurement used appropriately 
throughout the public workforce system. Moreover, such methods are 
generally based on the Uniform Guidance when Federal funds are 
involved. The Department has determined that it is unnecessary to be 
overly prescriptive in defining the methods of procurement in these 
regulations. It is the intention of the Department to provide extensive 
guidance and technical assistance on acceptable methods of procurement, 
using the Uniform Guidance as a basis. The Department responds to 
specific substantive public comments on this topic in the remainder of 
this Final Rule preamble section.
    Comments: Many commenters suggested that existing one-stop 
operators that are performing well should be grandfathered into WIOA 
and permitted to continue operating without competitive procurement, 
which would reduce the burden of the competitive process and ensure 
continued system stability during the transition to WIOA. Some of the 
commenters further recommended that Local WDBs and CEOs should have the 
authority to waive the competitive procurement process after 4 years 
based on performance and accountability and only conduct a competitive 
procurement if their evaluations determine it is warranted.
    Department's Response: The requirement in WIOA to use a competitive 
process for the selection of the one-stop operator is an unequivocal 
statutory requirement, which is clearly set out in WIOA sec. 
121(d)(2)(A). Because of this statutory requirement, the competitive 
selection process for one-stop operators in all local areas cannot be 
waived. No changes to the regulatory text were made in response to 
these comments. Past performance, however, is an evaluation factor that 
may be considered in the competitive process, potentially giving weight 
to those bidders demonstrating successful performance as a one-stop 
operator.
    Comments: A commenter stated that requiring competitive procurement 
for its one-stop operators would be detrimental to the State's 
workforce because any new operator would have to invest in new 
infrastructure, which would take time and money away from implementing 
programs. Further, this commenter stated that the existing State 
employees, who are unionized, could be laid off if new operators were 
selected.
    Department's Response: Costs and burdens placed on the one-stop 
delivery system by the selection of a new one-stop operator is one of 
many factors that may be taken into account by a Local WDB or State WDB 
under the terms of the competitive selection process. Other factors may 
include, but are not limited to, performance results, performance 
results by targeted population, certification results, and price. 
Single-area States will follow their own procurement process per the 
Uniform Guidance at 2 CFR 200.317. State procurement policies may 
include additional procurement methods beyond those included in the 
Uniform Guidance, including sole source procurement. In appropriate 
instances, the State and State WDB must work together to establish 
necessary internal controls and firewalls to provide the public with 
assurances that there are no conflicts of interest. Further, the 
Department hopes that any disruption to existing public workforce 
system employees will be limited under the new competitive procurement 
policies. However, the Department is also confident that the intent of 
Congress in these provisions was to increase competition among the 
publicly funded WIOA programs. The implications of collective 
bargaining agreements will have to be taken into consideration within 
the provisions of State or Federal procurement and other legal 
requirements. As such, no changes were made to the regulatory text in 
response to this comment.
    Comments: A few commenters suggested that sole sourcing should be 
permitted when a public agency is selected as the one-stop operator, 
reasoning that a competitive process would disrupt delivery of 
workforce services to job seekers and employers. Another commenter 
urged that rural areas should be exempt from the competitive process, 
while a different commenter recommended that single-area States should 
be exempt from the competitive process.
    Department's Response: As stated above, sole source selection is 
allowable as long as the situation falls within the guidelines and 
requisite conditions of State and local procurement policies and 
procedures and the conditions outlined in the Uniform Guidance. The 
Local WDB must be able to demonstrate that it conducted sufficient 
market research and outreach to justify sole source selection. No 
change to the regulatory text was made in response to these comments.
    Comments: Some commenters stated that requiring a competitive 
process would divert resources away from delivery of services.
    Department's Response: While the Department recognizes the 
challenges associated with competitive selection, including the 
additional costs, the statutory requirement for a competitive process 
for selection of a one-stop operator is clear. Additionally, 
competitive procurement processes are not uncommon in State and local 
government, and the Department encourages the consideration of methods 
used by other State and local government entities in streamlining their 
own processes, as well as State and local procurement laws and the 
Uniform Guidance. No change was made to the regulatory text in response 
to these comments.
    Comments: A commenter recommended that the regulations permit Local 
WDB personnel to staff one-stop operators and service providers, with 
the agreement of the CEO and Governor, which would provide more 
flexibility to the CEO to determine the most efficient and effective 
one-stop delivery system for their area.
    Department's Response: The Department has determined that such 
staffing is allowable, as long as the Local WDB is selected in 
accordance with the requirements of the regulations and proper 
firewalls are in place. As the commenter noted, in such circumstances 
the agreement of the Governor and CEO is required as an additional step 
in the approval of the Board as the one-stop operator.
    Comments: One commenter recommended that if there is no cost 
associated with the selection of a consortium as a one-stop operator, 
there should be no competition.
    Department's Response: As noted, WIOA imposes the requirement of a 
competitive process. The fact that a particular entity, such as the 
consortium mentioned by the commenter, would be at no cost, however, 
might be taken into account by the Local WDB under the terms of the 
selection.
    Comments: Several commenters disagreed with the Department's 
interpretation of the relationship between WIOA secs. 107(g)(2) and 
121(d)(2)(A). The commenters asserted that WIOA sec. 107(g)(2), which 
states that a Local WDB may be designated or certified as a one-stop 
operator only with the agreement of the CEO and the Governor, is a 
separate and unrelated provision from WIOA sec. 121(d)(2)(A), which 
requires a competitive selection process for the one-stop operator. 
They

[[Page 55894]]

suggested that a Local WDB can be designated as a one-stop operator 
solely under WIOA sec. 107(g)(2), without having to undergo the 
competitive process described in WIOA sec. 121(d)(2)(A).
    Department's Response: The Departments received and evaluated 
numerous public comments on this topic. It is the conclusion of the 
Departments that the requirement to use a competitive process for the 
selection of the one-stop operator is required by statute, as is the 
requirement for continuous improvement through evaluation of operator 
performance and regularly scheduled competitions. Competition is 
intended to promote efficiency and effectiveness of the one-stop 
operator by regularly examining performance and costs.
    The relationship between these two provisions of WIOA was duly 
noted and considered by the Departments. After extensive consideration, 
the Departments have not changed their interpretation of the 
relationship between WIOA secs. 107(g)(2) and 121(d)(2)(A) as providing 
that a Local WDB may be designated or certified as a one-stop operator, 
with the agreement of the CEO and the Governor, only after being 
selected through a competitive process for the one-stop operator. In 
the Departments' view, the two provisions read together implement 
Congress' emphasis on increasing competition among the publicly funded 
WIOA programs, while also giving the CEO and the Governor the 
flexibility to approve the competitive selection of a Local WDB as a 
one-stop operator. The Departments read sec. 121(d)(2)(A) as 
establishing the governing requirement for competitive selection of 
one-stop operators with sec. 107(g)(2) imposing an additional 
requirement when the competitive process results in the selection of 
the Local WDB. No change to the regulatory text was made in response to 
these comments.
    Comments: A few commenters also stated that the Governor should 
have the authority to designate the one-stop operator in single-area 
States or States that have a statewide planning region.
    Department's Response: All areas, even single-area States, must use 
a competitive process to determine the one-stop operator by following 
the Uniform Guidance and State procurement procedures. Sole source 
selection is available but only if the applicable conditions exist 
under the State procurement policies and procedures. No change to the 
regulatory text was made in response to these comments.
    Comments: One commenter also recommended that the Department 
establish a workgroup of single-area States to provide advice for the 
Final Rule.
    Department's Response: Because of the extensive participation of 
stakeholders, including single-area States and representatives of State 
governments in the development of the NPRM and in the opportunity to 
comment on the NPRM before issuance of this Final Rule, the Department 
determined that it is not necessary to establish a separate workgroup, 
although workgroups aimed at serving other purposes may still be 
established.
    Comments: Several commenters described potential issues that could 
arise from a mandate for competitive procurements. They said that there 
could be: (1) Issues with organized labor representing local workers; 
(2) delays in service due to staff time being spent on the procurement 
process; (3) CEOs, who have liability for funding who are unable to 
choose the best solution for their local area; and (4) loss of local 
control. A few commenters suggested that requiring competition would 
increase the liability of the CEO, contribute to loss of local control, 
and increase the overall cost of operation by dismantling existing, 
efficient systems that utilize leveraged funding.
    Department's Response: The Department is required by WIOA sec. 
121(d)(2)(A) to mandate competitive selection of one-stop operators and 
cannot waive that requirement. Local WDBs should evaluate risk during 
all stages of the competitive selection process. Leveraged funding or a 
pledge for matching funds may be considered as a scoring factor when 
evaluating bidders' proposals for one-stop operator selection, if the 
solicitation describes how such scoring will be awarded. By following 
the Uniform Guidance, any such liability of CEOs is mitigated by 
corresponding protections in the eventual contract. Additionally, the 
Department encourages Local WDBs to work with local partners and one-
stop operators to use innovative and creative ways of mitigating these 
issues. No change to the regulatory text was made in response to these 
comments.
    Comments: A commenter remarked that while there are likely 
situations in which there is cause to procure one-stop operators 
competitively, it is not always the case that Local WDBs are unable to 
oversee the local workforce system while also serving as the one-stop 
operator.
    Department's Response: The Department agrees, as did Congress. WIOA 
allows Local WDBs to serve as a one-stop operator with the concurrence 
of the CEO and the Governor, if the Board is selected under a 
competitive process as provided in the Final Rule. No change to the 
regulatory text was made in response to this comment.
    Comments: A few commenters asked for clarification on whether the 
rule for competitive bidding is applied only at the regional or State 
sub-area level (such as a workforce development area), or if it also 
applies to operators who are site managers of one-stop sites.
    Department's Response: The requirements for the competitive 
selection of one-stop operators under WIOA would apply only to those 
procurements carried out by State or Local WDBs. All direct grant 
recipients and subrecipients of a Federal award must adhere to the 
procurement standards found in the Uniform Guidance. No change to the 
regulatory text was made in response to these comments.
    Comments: Several commenters expressed concerns about the financial 
impact of requiring Local WDBs to conduct competitive procurements, as 
this would be a new cost that could significantly impact limits on 
administrative costs. A few commenters also asserted that the proposed 
process of essentially vetting possible candidates prior to issuing a 
RFP is costly and repetitive. Some commenters said that having a one-
stop operator at all is not cost effective.
    Department's Response: The Department recognizes that there is a 
cost burden associated with conducting competitive procurements. Both 
WIOA and the Uniform Guidance encourage efficiencies in administrative 
operations through streamlining of services or building from an 
existing network of services. To the maximum extent practical, the 
Department encourages States and local areas to leverage their 
administrative support for procurement to reduce burden.
    Comments: A few commenters stated that Congress was intentional in 
requiring one-stop operators to be selected through a competitive 
process. These commenters suggested that the Final Rule should not 
allow contracts to be awarded to entities who then subcontract the work 
back to State or local agencies on a noncompetitive basis.
    Department's Response: The Department agrees that the requirement 
of using a competitive process for the selection of the one-stop 
operator cannot be subverted by subcontracting the position of one-stop 
operator on a noncompetitive basis. By aligning the one-stop operator 
competitive process

[[Page 55895]]

with the procurement requirements in the Uniform Guidance, there are 
stringent conflicts of interest and documentation requirements that 
will also apply to one-stop operator competitions. The Uniform Guidance 
requirements also apply to the award of subcontracts. Application of 
the Uniform Guidance requirements will ensure the integrity of the 
process. For this reason, the Department sees no need to change the 
regulatory language in response to this comment.
    Comments: A few commenters also said that the regulations should 
clarify that one-stop service providers must also be competitively 
procured. One commenter recommended that the final regulations should 
ensure that either the adult and dislocated worker service provider is 
also required to perform the responsibilities of the one-stop operator, 
and the Local WDB must hold a competition to procure a provider to fill 
this mixed role; or, if operator and service provider contracts are bid 
separately, an entity must be allowed to compete for and perform both 
roles. The commenter went on to recommend that Local WDBs should be 
required to bid every contract competitively, or request letters of 
intent at a minimum, and only select an operator through a 
noncompetitive method if there are no qualified candidates.
    Department's Response: The competitive processes outlined in the 
Uniform Guidance are applicable to procurement transactions with a 
contractor and not to a sub-awardee such as an adult or dislocated 
workers service provider. It is when WIOA requires competitive 
procurement process such as with the one-stop operators and youth 
service providers that States and Local WDBs must adhere to such 
requirements.
    Comments: A commenter stated that there are competitive selection 
processes available other than those listed in the proposed 
regulations. The commenter suggested that invitations to negotiate, 
professional services solicitations, and other approaches that 
emphasize performance over price should be considered. Another 
commenter requested clarity regarding whether ``competitive process'' 
requires an RFP. They recommended that ``competitive process'' be 
defined to include all methods permitted under State procurement laws.
    Department's Response: The commenters are correct in stating that a 
variety of competitive selection processes exist within approved 
procurement practices. As a result, the regulatory text has been 
changed from what was proposed in the NPRM to allow for greater 
flexibility in defining the competitive process to be followed by non-
Federal entities other than States. The regulations now state that 
where States are engaging in a competitive process, competitions should 
be based on the State procurement policies as defined in State 
administrative procedures and should be the same process used for 
procurement with non-Federal funds. The policies and procedures may 
encompass many of the areas suggested by the commenters. The 
regulations also state that where local areas or Local WDBs are 
engaging in a competitive process, competitions should be based on the 
local procurement policies as defined in local administrative 
procedures that must be consistent with all provisions of the Uniform 
Guidance. The policies and procedures may encompass many of the areas 
suggested by the commenters. All other entity types follow the Uniform 
Guidance requirements for procurement, which also contain flexibility 
in procurement methods, as well as the type of contract vehicle used. 
For example, the Uniform Guidance does permit sole source as a method 
of procurement under certain conditions. It was determined to be 
unnecessary for the Department to be overly prescriptive in defining 
the methods of procurement in these regulations.
    The Department has determined that this approach provides 
sufficient flexibility to enable a range of operators, including 
current one-stop operators, State agencies, Local WDBs, or consortia of 
required partners to be selected under a competitive process as one-
stop operators.
    Comments: Another commenter asked for clarification on whether 
``selection'' is the same as ``procurement,'' and whether the selection 
of a one-stop operator is always ``procurement,'' and which parts of 
the Uniform Guidance apply to such a selection process.
    Department's Response: While selection is typically understood as 
being a part of the procurement process--which typically goes through a 
series of phases that may include planning, evaluation, negotiation, 
selection, implementation and closeout--when discussing WIOA one-stop 
operators in this Final Rule, selection refers to the competitive 
process by which one-stop operators are chosen. This process may 
involve a number of methods of procurement as they are described in the 
Uniform Guidance. The Uniform Guidance describes the process and 
methods that must be followed to conduct procurement.
    Comments: The commenter further stated that the solicitation 
announcements need to reach a minimum number of vendors to ensure a 
variety of capable vendors have the ability to bid. In addition, the 
commenter suggested that selection of one-stop operators should include 
the ability to serve linguistically and culturally diverse 
participants.
    Department's Response: The Department declines to change the 
regulatory text in response to this comment. Determining the number of 
vendors is best left to the Local WDB, based on the needs identified in 
the local area. Typically, two or more vendors or bidders would be 
adequate in meeting the minimum requirement of competition, which may 
already be specified in the State procurement process.
    Comments: Another commenter asked how providers of career services 
are selected. The commenter also asked whether this must involve a 
competitive process.
    Department's Response: Career services are provided by the various 
partner programs participating in the one-stop center, the details of 
which are set out and agreed upon in the MOU. As mentioned above, these 
partners are not required to be procured in a competitive process under 
WIOA, but they may be under State or local procurement policies.
    Comments: Other commenters stated that the Governor should be 
allowed to recommend the RFP process for their State.
    Department's Response: The Governor, in consultation with the State 
WDB and chief elected official does have the authority under these 
regulations to choose the type of RFP process for their State that is 
consistent with State policy and the Uniform Guidance. No change to the 
regulatory was made text in response to these comments.
    Comments: A few commenters requested additional guidance on how a 
WDB could compete in the procurement process, either alone or as part 
of a consortium. Another commenter asked if, in single-area States, the 
State WDB assumes the responsibilities in WIOA sec. 107(d)(10)(A), or 
if the Governor is authorized to identify a State entity to conduct the 
competition.
    Department's Response: As noted, the Department has revised the 
regulatory text to allow greater flexibility in defining the 
competition process for non-Federal entities other than a State, 
deleting much of the language related to specific procurement methods 
in the proposed regulations. The Department

[[Page 55896]]

provides this flexibility because, as it became apparent through the 
discussion of comments, there are many different methods of procurement 
throughout the public workforce system, which are generally based on 
the Uniform Guidance when Federal funds are involved and which the 
Department would consider sufficient to meet the requirement for 
competitive selection of the one-stop operator. It was unnecessary for 
the Department to be overly prescriptive in defining the methods of 
procurement in these regulations, and provisions of proposed Sec.  
678.605(c) prescribing certain methods have been removed.
Length of Time Required Between Competitions
    Comments: A few commenters addressed the Department's question 
seeking comments regarding the length of time required between 
competitions for one-stop operators. In particular, a few commenters 
recommended that the timelines should be determined by States. Other 
commenters stated that 4 years, as proposed in the NPRM, is 
appropriate. A few commenters agreed that 4 years between competitions 
is appropriate, but they suggested that there be an option to extend 
additional years if performance expectations are met or exceeded. A few 
commenters suggested allowing more flexibility for States regarding the 
length of contracts, such as providing guidance that recommends 
contracts of 3 to 5 years, or allowing the award of 5-year contracts 
that have an initial base year followed by 4 option years that can be 
executed if the operator is performing well. A few commenters 
recommended 6 years between competitions, as that timeline would align 
with two 3-year certification periods for one-stop operators. Another 
commenter suggested that local areas should be permitted to extend an 
operator's contract once by 2 years to reward high performance.
    Department's Response: After considering these comments and 
recommendations, the Department decided to retain the period of 4 years 
as it is consistent with the other time periods contained in WIOA for 
resubmission of State Plans as well as re-certification of one-stop 
centers. The Department has determined that there is not a sufficient 
reason to shorten this period to 3 years, extend it beyond 4 years, or 
to leave the timeline determination to individual States. Instead, 
maintaining the proposed 4 years between competitions is consistent 
with WIOA's goals of a periodic reexamination of local plans and 
supporting successfully performing one-stop centers.
    Comments: A commenter remarked that, given the timelines for 
competitive procurement and certification criteria updates, both 
processes will be conducted simultaneously every 12th year. The 
commenter suggested that the Department adjust these timelines to be 
event-driven, rather than simply time dependent.
    Department's Response: While the Department recognizes the 
difficulties that the timing may cause, after considering the comments 
and suggested changes, the Department concluded that leaving these 
processes on set timelines, as opposed to event-driven timelines, is 
the best way to insure integrity in the process and will reap the best 
outcomes for the one-stop delivery system. As such, the Department has 
made no changes to the regulatory text in response to this comment. 
Guidance and technical assistance on this section regarding competition 
will be made available to all parts of the public workforce system.
Section 678.610 When is the sole-source selection of one-stop operators 
appropriate, and how is it conducted?
    Section 678.610 explains when and how sole-source selection of one-
stop operators is appropriate as a part of a competitive procurement 
process. The text has been changed from the NPRM to delete the 
references to the specific acceptable processes in proposed Sec.  
678.605(d)(3) and to indicate that State and local entities must follow 
their own procurement rules in addition to the Uniform Guidance, as 
appropriate. It also includes requirements about maintaining written 
documentation regarding the entire selection process, and developing 
appropriate conflict of interest policies. It states that a Local WDB 
may be selected as one-stop operator through sole source procurement 
only with the agreement of the CEO in the local area and the Governor. 
The Governor must approve the conflict of interest policies and 
procedures the Local WDB has in place when also serving as the one-stop 
operator. This is consistent with the Departments' interpretation of 
sec. 107(g)(2) of WIOA--the section adds an additional check in 
situations where a Local WDB is selected to be operator.
    Comments: Several commenters recommended allowing the Governor to 
designate the one-stop operator when the State is a single-area State, 
particularly if the State has a history of meeting performance 
standards. Several commenters also recommended allowing CEOs to 
designate the one-stop operator without a competitive process so as not 
to interrupt program continuity, particularly if the operator is 
already performing well.
    Department's Response: WIOA requires the selection of one-stop 
operators through a competitive process. The Governor or CEOs may not 
designate an operator without a competitive process. No change to the 
regulatory text was made in response to these comments. It is possible 
for the Governor to select an organization, such as the State WDB, by 
sole source selection after a competitive process. Otherwise, Local 
WDBs are responsible for conducting a competitive process to select a 
one-stop operator, which must also be consistent with the Uniform 
Guidance. The Department encourages Local WDBs to plan for the 
competitive process and allow for transition time to minimize any 
disruption and ensure program continuity. Local WDBs can be selected as 
one-stop operator through sole source procurement only with the 
agreement of the CEO in the local area and the Governor. Under Sec.  
678.610(d), the Governor must approve the conflict of interest policies 
and procedures that the Local WDB has in place when also serving as 
one-stop operator. This is consistent with DOL's interpretation of WIOA 
sec. 107(g)(2)--the section adds an additional check in the situations 
where a Local WDB is selected to be operator.
    Comments: One commenter also suggested that local areas already 
operating under a consortia model with demonstrated success be 
permitted to be sole sourced. Another commenter stated that very large, 
complex local areas should be able to sole source a ``system operator'' 
provided that the individual one-stop operators are procured through a 
competitive process.
    Department's Response: While WIOA requires selection of the one-
stop operator through a competitive process, under the Uniform Guidance 
there is the flexibility for sole source as a method of procurement; 
however, there are conditions that must be met to allow for sole source 
selection. The Local WDB must be able to demonstrate it conducted 
sufficient market research and outreach to make that determination. 
Additionally, Sec.  678.615(b) and (c) require robust conflict of 
interest policies and procedures as well as internal firewalls within 
the State agency to address the real and perceived conflicts of 
interest that could arise for a State or local agency applying to a 
competition run by a Local WDB.
    The Department notes that this section is particularly relevant to 
the

[[Page 55897]]

first competitions that are conducted after these regulations are 
promulgated for one-stop operators. With appropriate firewalls and 
conflict of interest policies and procedures to provide a fair and open 
competitive process, entities serving as one-stop operators at the time 
these regulations are promulgated, including Local WDBs and other 
current one-stop operators, may compete and be selected as operator 
under the competition requirements in this subpart if they are able to 
do so under applicable procurement policies and procedures. However, 
appropriate firewalls must be in place to ensure that the current 
operator is not involved in conducting the competitive process, as that 
would be an inherent conflict of interest. No change to the regulatory 
text was made in response to this comment.
    Comments: A commenter stated that the Department should reconcile 
Sec. Sec.  678.610 through 678.625 with 20 CFR 679.410 to ensure that 
both one-stop operations and career services are awarded competitively. 
The commenter provided one exception to this rule: that the Governor 
and CEO agree that there are insufficient providers available for a 
competition.
    Department's Response: WIOA does not link one-stop operator 
competition with competition for career services providers. That 
decision is left to the State and/or Local WDB, and the Department 
declines to require this by regulation. Competitions for certain types 
of services are neither expressly prohibited nor required by WIOA. 
State and Local WDBs are in the best position to determine how 
extensively to require service provider competitions in their 
respective areas.
Section 678.615 May an entity currently serving as one-stop operator 
compete to be a one-stop operator under the procurement requirements of 
this subpart?
    Section 678.615(a) states that Local Boards may compete for and be 
selected as one-stop operators, as long as appropriate firewalls and 
conflict of interest policies and procedures are in place. Section 
678.615(b) allows State or local agencies to compete for, and be 
selected as, one-stop operators. However, there must also be strong 
firewalls, internal controls, and conflict of interest policies and 
procedures in place.
    Comments: A few commenters stated that they interpret the Uniform 
Guidance on conflict of interest to mean simply that the specifications 
and requirements for the procurement must be drawn up by a neutral 
third-party, and that Local and State WDB members can take part in the 
selection, award, or administration of the one-stop operator contract 
so long as no member will see an increase in pay or benefits upon award 
of the contract.
    Department's Response: Competitions must be undertaken pursuant to 
Sec.  678.605. States are required to follow the same policies and 
procedures used for procurement with non-Federal funds while other non-
Federal entities are required to follow local procurement policies and 
procedures and the requirements in the Uniform Guidance at 2 CFR 
200.318 through 200.326. These policies and procedures may allow or 
require many of the commenter's suggestions. For example, the Uniform 
Guidance does permit sole source as a method of procurement under 
certain conditions. The Local WDB must be able to demonstrate it 
conducted sufficient market research and outreach to make that 
determination. With appropriate firewalls and conflict of interest 
policies and procedures to provide a fair and open competitive process, 
entities serving as one-stop operators at the time these regulations 
are promulgated, including Local WDBs and other current one-stop 
operators, may compete and be selected as operator under the 
competition requirements in this subpart if they are able to do so 
under the relevant procurement policies and procedures. In the 
alternative, they may be selected under appropriate sole source 
processes. However, appropriate firewalls must be in place to provide 
that the current operator is not involved in conducting the competitive 
process, as that would be an inherent conflict of interest.
    The Department wants to make clear that this approach provides 
sufficient flexibility to enable a range of operators to compete and be 
selected, including current one-stop operators, State agencies, Local 
WDBs, or consortia of required partners.
    Comments: Several commenters also asserted that effective 
firewalls, internal controls, and conflict of interest policies already 
exist in the workforce development system and have been reviewed by the 
States and DOL.
    Department's Response: While the Department agrees that some 
effective firewalls, internal controls, and conflict of interest 
policies already exist in the workforce development system, no change 
to the regulatory text was made in response to this comment. The 
procurement standard in the Uniform Guidance provides guidance on 
written codes of conduct covering real, apparent, and organizational 
conflicts of interest for persons involved in the procurement process.
    Comments: One commenter stated that one-stop operators can be 
staffed by Local WDBs as long as firewalls and conflict of interest 
policies are in place, which can include a WDB/CEO agreement with 
organizational charts.
    Department's Response: The Department agrees that, as long as the 
requisite firewalls and conflict of interest policies and procedures 
are in place, a Local WDB can compete to fill the one-stop operator 
position. To be placed in this position, of course, the Local WDB must 
win the competition and then be approved by the Governor and CEO. While 
such agreements and organizational charts are a useful tool to define 
firewalls, proper firewalls must go beyond these tools.
    Comments: One commenter asked the Department to define the term 
``firewall'' as it relates to this section. A group of Federal elected 
officials urged the Departments to establish strong organizational 
conflict of interest provisions in the Final Rule to ensure fair 
competition.
    Department's Response: The Department has determined that the 
Uniform Guidance, used in concert with State procurement procedures, 
establishes adequate standards for conflict of interest policies. Also, 
Sec.  678.615(b) and (c) require robust conflict of interest policies, 
as well as internal firewalls within the State agency, to address the 
real and apparent conflicts of interest that could arise for a State or 
local agency applying to a competition run by a Local WDB. In order to 
ensure flexibility for State and local entities in designing one-stop 
delivery systems, the Department declines to define these terms further 
in the final regulations.
    Comments: A few commenters said that they do not believe it is 
possible for a sufficient firewall to be established to eliminate a 
real or apparent conflict of interest when a Local WDB competes to be a 
one-stop operator. Even if an alternate entity were involved in 
developing the procurement requirements, according to these commenters, 
the Local WDB would still need to be involved in developing and 
approving them. Other commenters agreed and requested that single-area 
States be granted flexibility on, and waivers of, this provision. Two 
commenters asserted that in small States where there is very little 
competition (e.g., a one-stop operator may also be a service provider), 
it is not cost effective to implement firewalls.
    Department's Response: While the Uniform Guidance does provide

[[Page 55898]]

flexibility, some State and local procurement policies may prevent a 
Local WDB from competing under an RFP if it is not possible to 
establish a sufficient firewall to avoid a real or apparent conflict of 
interest. The Department declines to revise Sec.  678.615 to provide 
for a waiver or other flexibility concerning the requirement for 
firewalls and conflict of interest policies and procedures because 
avoiding a real or apparent conflict of interest is essential to a fair 
competitive process. The Department encourages States and local areas 
to review their procurement policies and procedures to ensure that they 
are consistent and contain appropriate firewalls and conflict of 
interest policies and procedures to provide a fair and open competitive 
process.
    Comments: A few commenters suggested that because the Governor has 
the authority, in agreement with the CEO, to select the Local WDB as 
the one-stop operator, firewalls and conflict of interest policies are 
not necessary. Another commenter agreed with this suggestion, adding 
that firewalls and conflict of interest policies are not necessary 
because the CEO would have oversight responsibilities.
    Department's Response: The Department disagrees. The Uniform 
Guidance, where applicable, calls for a written code of conduct policy 
that includes real, apparent, and organizational conflict of interest 
procedures to provide a fair and open competitive process. Entities 
serving as one-stop operators at the time these regulations are 
promulgated, including States, Local WDBs, and other current one-stop 
operators, may compete and be selected as the operator under the 
competition requirements in this subpart, if allowable under applicable 
procurement policies and procedures. Appropriate firewalls, however, 
must be in place to ensure that the current operator is not involved in 
conducting the competitive process, as that would be an inherent 
conflict of interest. Such firewalls pertain to the elected leadership 
of the State or local area as well as to the Boards. The Uniform 
Guidance, where applicable, and Sec.  678.615(b) and (c) require robust 
conflict of interest policies that will create internal firewalls 
within the State agency to address the real and perceived conflicts of 
interest that could arise when a State or local agency applies to a 
competition run by a Local WDB. No change to the regulatory text was 
made in response to these comments.
    Comments: One commenter expressed support for the Department's 
requirement to establish appropriate firewalls and internal controls.
Section 678.620 What is the one-stop operator's role?
    Section 678.620(a) describes the role of the one-stop operator 
without prescribing a specific and uniform role across the system. The 
minimum role that an operator must perform is coordination of all one-
stop partners and service providers.
    A change was made to this section for clarity. The regulatory text 
was revised to modify the list of potential roles for the one-stop 
operator, as chosen by the Local WDB, changing it from ``coordinating 
service providers within the center and across the one-stop system . . 
.'' to ``coordinating service providers across the one-stop delivery 
system.''
    Comments: Several commenters addressed the Department's question 
regarding whether all of the functions listed in proposed Sec.  
678.620(b) are accurately described as inherently the responsibility of 
the Local WDB. Some commenters agreed that all of these items are 
inherently the responsibility of the Local WDB. One commenter stated 
that some of the Local WDB responsibilities may have changed or been 
devolved to the operator or fiscal agent as the one-stop delivery 
system has evolved under WIA. A Local WDB recommended that the 
Department remove this paragraph because it adds confusion, 
particularly when the Local WDB or fiscal agent is also the one-stop 
operator. The commenter suggested that CEOs should be responsible for 
determining who is responsible for each function. Another commenter 
also stated that, rather than prohibiting certain actions, the NPRM 
should provide guidance to operators regarding how to deal with 
conflicting responsibilities. The commenter stated that this is 
particularly necessary for small States and single area States where 
agencies serve multiple roles in the system.
    Department's Response: The Department considers these provisions 
necessary and consistent with WIOA. The Department is aware that the 
requirements related to formally procuring the one-stop operator may be 
new in many areas, and that the roles and responsibilities for Boards, 
operators, and service providers under WIOA may differ from those under 
WIA. Some roles will continue and others will be modified in response 
to the new requirements and vision presented by WIOA. Transitioning to 
a new, more integrated system of service under WIOA will take time and 
technical assistance from all agencies involved. Some guidance is 
already available to the system in the form of TEGLs on a variety of 
subjects, such as ``Workforce Innovation and Opportunity Act Transition 
Authority for Immediate Implementation of Governance Provisions'' (TEGL 
No. 27-14), ``Vision for the Workforce System and Initial 
Implementation of the Workforce Innovation and Opportunity Act'' (TEGL 
No. 4-15), ``Guidance on Services Provided through the Adult and 
Dislocated Worker Program under the Workforce Innovation and 
Opportunity Act (WIOA or Opportunity Act) and Wagner Peyser, as Amended 
by WIOA, and Guidance for the Transition to WIOA Services'' (TEGL No. 
3-15), and ``Workforce Innovation and Opportunity Act (WIOA) Youth 
Program Transition'' (TEGL Nos. 23-14 and 8-15), among others, which 
can be found at https://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
    Furthermore, WIOA does not permit CEOs to be solely responsible for 
selecting who carries out each function of a one-stop center; this is 
something to be set forth in the MOU, as agreed upon by all the local 
partners and the Local WDB. No change to the regulatory text was made 
in response to these comments.
    Comments: Several commenters stated that the requirement in Sec.  
678.620(b) that one-stop operators establish firewalls and conflict of 
interest policies if they are also a service provider implies that the 
organization's head would need to establish firewalls between himself 
and his own staff who are delivering services.
    Department's Response: The Department would like to stress that 
there must be appropriate firewalls between staff providing services 
and staff responsible for oversight and monitoring of services. The 
same person or department cannot both provide services and oversee the 
provision of those services. This may require examination of the 
organizational structure of a State or local system to ensure that 
adequate firewalls are in place to ensure appropriate oversight and 
monitoring of services. Because the WIA system operated under similar 
internal controls for nearly 2 decades, the Department does not 
anticipate that the WIOA requirements regarding firewalls, conflict of 
interest policies, and procurement procedures will be major obstacles 
to WIOA implementation. The Department also has determined that the 
provisions of the Uniform Guidance at 2 CFR part 200 sufficiently 
address these issues. No

[[Page 55899]]

change to the regulatory text was made in response to these comments.
    Comments: Commenters also asked whether, if the organization that 
wins the one-stop operator competition is not also the WIOA title I 
service provider, there would have to be another competition for this 
service provider and thus another level of administration.
    Department's Response: The Department has concluded that State and 
Local WDBs are in the best position to determine how extensively to 
require service provider competitions in their respective areas, and 
the Department encourages States and local areas to review their 
procurement policies and procedures against the Uniform Guidance to 
ensure that they are consistent and contain appropriate conflict of 
interest policies and procedures to provide a fair and open competitive 
process.
    Comments: A commenter suggested that when there is a potential 
conflict of interest, the State WDB should be required to certify those 
one-stop centers. Another commenter asked how one-stop operators will 
be audited to ensure that internal controls are utilized.
    Department's Response: The State sets the criteria for 
certification of one-stop centers, and Federal representatives and 
State agencies will continue to monitor the entire public workforce 
system under WIOA. As part of such monitoring and oversight 
responsibilities, States and Federal representatives will review an 
entity's compliance with the Uniform Guidance, the soundness of its 
internal controls, and its internal control framework. Further, States 
and local agencies are audited either independently or under a State's 
comprehensive audit on an annual or biannual basis, which includes an 
examination of the State and local agencies' internal controls and 
internal controls framework. No change to the regulatory text was made 
in response to this comment.
    Comments: One commenter said that there was not enough clarity 
regarding staff oversight in one-stop centers. The commenter asked who 
is responsible for performance outcomes and operations when there are 
Combined Plan partners, and also, that CEOs be permitted to make this 
determination. Another commenter agreed that Governors should be able 
to determine appropriate roles for one-stop operators and Boards.
    Department's Response: Some operating guidance on this subject has 
already been released in TEGL No. 27-14 (``Workforce Innovation and 
Opportunity Act Transition Authority for Immediate Implementation of 
Governance Provisions''), and much more is in development, especially 
around performance outcomes of Combined State Plan partners. The 
Department presumes that staff oversight and other roles and 
responsibilities of WDBs and operators will be set in each State and 
local area by the WDB, in accordance with guidance provided by the 
Department, the Governor, and the provisions of the Uniform Guidance in 
2 CFR part 200 regarding the use of Federal funds. There must be 
appropriate firewalls between staff providing services and staff 
responsible for oversight and monitoring of services; however to ensure 
this, the Department has concluded that additional regulatory language 
is not required. Having proper firewalls in place will ensure that the 
same person or department does not oversee its own provision of 
services. This may require examination of the organizational structure 
of an organization to ensure that adequate firewalls are in place to 
ensure appropriate oversight and monitoring of services. No change to 
the regulatory text was made in response to these comments.
    Comments: A few commenters requested clarification of the term 
``another capacity'' in Sec.  678.620(b).
    Department's Response: The text from Sec.  678.620(b) in the NPRM 
reads, in part, ``[a]n entity serving as a one-stop operator may 
perform some or all of these functions if it also serves in another 
capacity, if it has established sufficient firewalls and conflict of 
interest policies. The policies must conform to the specifications in 
20 CFR 679.430 of this chapter for demonstrating internal controls and 
preventing conflict of interest.'' The Department has clarified this 
language, which now refers to ``acting in its other role,'' instead of 
``serves in another capacity.'' As revised, Sec.  678.620(b) now reads, 
``An entity serving as a one-stop operator, that also serves a 
different role within the one-stop delivery system, may perform some or 
all of these functions when it is acting in its other role, if it has 
established sufficient firewalls and conflict of interest policies and 
procedures. The policies and procedures must conform to the 
specifications in 20 CFR 679.430 of this chapter for demonstrating 
internal controls and preventing conflict of interest.'' The Department 
has determined that the term ``other roles'' is more readily 
understood. These could include such roles as service providers, State 
agencies, or Local WDBs.
    Comments: One commenter suggested that the Department should define 
the role of a ``system coordinator,'' which would unify a network of 
one-stop operators in large local areas into a more cohesive local 
system.
    Department's Response: The Department has declined to revise the 
regulatory text to define such a role, as this is a function of the 
Local WDB. WIOA does not identify a system coordinator role. Local 
areas have the ability to coordinate regionally and develop local or 
regional plans. Any coordination would be established as part of the 
local planning process.
    Comments: One commenter stated that one-stop operators should be 
allowed to participate in the local plan development only if there are 
appropriate firewalls and conflict of interest policies in place.
    Department's Response: The one-stop operator will be a contractor 
under the Local WDB. The Local WDB is tasked with oversight and 
monitoring of the one-stop operator. Therefore, if the operator 
participates in the development of the local plan, there must be 
adequate conflict of interest policies and firewalls in place to ensure 
the one-stop operator staff who are participating do not provide input 
on any policies associated with oversight and monitoring of their own 
actions. The Department has determined that this does not require the 
addition of regulatory language to this section, as Sec. Sec.  678.615, 
678.620, and 678.625 require firewalls and conflict of interest 
policies to prevent conflicts of interest in the selection of a one-
stop operators, in the one-stop operator's role, and in the functioning 
of the State and Local WDBs.
    Comments: One commenter recommended that the regulations should 
clarify that the one-stop operator chosen through the competitive 
procurement process is responsible for carrying out the required 
activities of WIOA sec. 134(c)(1)(A), both directly and through the 
one-stop required partners.
    Department's Response: The Department has determined that it is 
important to provide flexibility to local areas to define the role of 
one-stop operator to meet the needs of the local area and that Sec.  
678.620 provides this flexibility. No change to the regulatory text was 
made in regard to this comment.
Section 678.625 Can a one-stop operator also be a service provider?
    Section 678.625 allows a one-stop operator to also be a service 
provider. However, the section clarifies that there

[[Page 55900]]

must be firewalls in place to ensure that the operator is not 
conducting oversight of itself as a service provider. There also must 
be proper internal controls and firewalls in place to ensure that the 
entity, in its role as operator, does not conflict with its role as a 
service provider.
    Comments: Some commenters expressed that the process described in 
the NPRM for the grant recipient to operate the one-stop center and/or 
provide career services is difficult to follow. They expressed concern 
that the process as described could lead to ``unintended, questionable 
procurements.''
    Department's Response: After considering these comments and 
examining the language of WIOA sec. 121(d), the Departments have 
determined that the process for separating the functions of operator 
and service provider is clear. A one-stop operator cannot participate 
in the selection of a provider to perform services in which the 
operator intends to compete. Specifically, the operator cannot 
participate in the planning, development, review, negotiation, and 
selection phases of the competitive procurement process and then also 
submit its own proposal. Moreover, proper firewalls must be in place, 
as well as internal controls, to separate the functions of oversight, 
monitoring, and evaluation of its role as service provider in order for 
a one-stop operator to also serve as a service provider. The Department 
will continue to provide guidance and technical assistance to the 
public workforce system in this regard.
    Comments: One commenter asserted that Congress could not have 
intended for the WIOA competition provision to be the catalyst for a 
regulatory structure that would entrench service providers and insulate 
them from competition while competing out only the more tangential 
oversight position of one-stop operator, which typically has a much 
smaller total impact on the quality of services delivered to one-stop 
users. The commenter remarked that the one-stop operator and service 
provider roles have been ``substantially intertwined'' over the years, 
with WIA sec. 117(d)(2)(D) even suggesting that operators were also 
expected to be service providers. The commenter stated that it has been 
common practice at many one-stop centers for the roles of operator and 
service provider to be bid concurrently, and common practice in other 
one-stop centers for service providers to be assigned various operator 
duties as part of their service provider role.
    Department's Response: The Departments encourage Local WDBs to 
review current service providers strategically and plan for the 
competitive process, allowing for a period of transition to minimize 
any disruption and ensure program continuity. WIOA does not link one-
stop operator competition with competition of providers of services in 
the one-stop. That decision is left to the State and/or Local WDB. No 
change to the regulatory text was made in response to this comment.
Section 678.630 Can State merit staff still work in a one-stop center 
where the operator is not a governmental entity?
    Section 678.630 addresses the concern about whether State merit 
staff can continue to work in a one-stop center where the operator is 
an entity other than the State. State merit staff support numerous 
programs at the one-stop center, including Wagner-Peyser Act programs, 
VR, UI, and the JVSG program. Section 678.630 clarifies that State 
merit staff may continue to work in the one-stop center so long as a 
system for the management of merit staff in accordance with State 
policies and procedures is established. Similar to State merit staff, 
nothing would prevent local government staff from being employees in 
the one-stop center, although the Department recognizes that local 
government employees are not equivalent to the State merit staff, as 
State merit staff are governed by the requirements attached to specific 
programs that must be in the one-stop center regardless of operator.
    In response to concerns about staffing, the last sentence of Sec.  
678.630 has been revised to clarify that continued use of State merit 
staff for the provision of Wagner-Peyser Act services or services from 
other programs with merit staffing requirements must be included in the 
competition for and final contract with the one-stop operator when 
Wagner-Peyser Act services or services from other programs with merit 
staffing requirements are being provided.
    Comments: Several commenters remarked that local staff do not have 
the same protections as State merit staff, and new contractors often 
bring in their own staff when taking over programs. Additionally, these 
commenters asserted that it would be cost-prohibitive for potential 
applicants to retain many public employees because they are typically 
fully vested and may be unionized.
    Department's Response: DOL acknowledges the concerns and points 
regarding the State merit staffing requirement. The benefits of merit 
staffing in promoting greater consistency, efficiency, accountability, 
and transparency have been well established, and the Department intends 
to continue the respective UI, Wagner-Peyser Act, and VR merit staffing 
requirements under WIOA. While there is no merit staffing requirement 
under other WIOA core programs, the Department has determined, 
consistent with 20 CFR 652.215 that Wagner-Peyser Act and VR staff must 
meet the requirements of merit staff. A revision to the regulatory 
text, as discussed above, has been made to Sec.  678.630 to respond to 
concerns about staff.
    Comments: Some commenters, including a few unions, urged the 
Department to require that UI and ES agencies be parties and agree to 
the establishment of the NPRM's ``system for management of merit 
staff.''
    Department's Response: UI and Wagner-Peyser Act programs will be 
party to the establishment of such a system through their participation 
and decision-making on State or Local WDBs as required partners, and 
through their good-faith negotiations during the MOU process. The 
Department has made no changes to the regulatory text in response to 
these comments.
    Comments: Some of these commenters also suggested that the 
Department should revise Sec.  678.630 to require UI and ES agencies to 
agree to inclusion of local merit staff in the competition and final 
contract, to be consistent with proposed 20 CFR 652.216.
    Department's Response: The Departments decline to make revisions to 
policies regarding local merit staffing.
    Comments: One commenter stated that the NPRM, which includes VR in 
the list of State merit staff, conflicts with the responsibility of the 
designated State agency (DSA) or designated State unit (DSU) in sec. 
101(a)(2) of the Rehabilitation Act of 1973 ``by inferring that the 
State Board and one-stop operator may establish State policies 
regarding the management of'' VR staff. The commenter also stated that 
the NPRM may conflict with RSA Technical Assistance Circulars 12-03 and 
13-02. Another commenter expressed support for including VR as State 
merit staff, as this will provide flexibility for States to integrate 
VR staff within one-stop centers.
    Department's Response: In accordance with this section, State VR 
personnel are permitted to perform functions and activities in a one-
stop center where the one-stop operator is a non-governmental entity.
    This section does not circumvent the requirements governing the 
State VR Program at 34 CFR part 361. In particular, if State VR 
personnel are

[[Page 55901]]

performing functions and activities in a one-stop center operated by a 
non-governmental entity, the requirements related to the responsibility 
for administration and the non-delegable functions of the designated 
State unit at 34 CFR 361.13(c) remain in place.
    Contrary to the commenter's suggestion, neither the State WDB nor 
the one-stop operator would assume sole management of State VR 
personnel employed by the designated State unit responsible for the 
administration of the VR services program, because such responsibility 
rests fully with the designated State unit for the VR program. Rather, 
the State WDB and the one-stop operator would establish a system for 
management of State VR personnel in accordance with State policies and 
procedures, consistent with program specific requirements such as that 
described in 34 CFR 361.13(c).
    Comments: A few commenters recommended that CEOs or Local WDBs 
should be permitted to determine the best staffing mix for their local 
areas.
    Department's Response: WIOA sec. 107(f) and 20 CFR 679.400 of the 
DOL Final Rule describe the Local WDB's authority to hire and the 
appropriate roles for Board staff and Sec.  678.620 describes the role 
of the one-stop operator in comparison to Local WDB functions. Local 
WDBs may establish appropriate staffing within the confines of these 
requirements, but nothing in these provisions would change staffing 
requirements established pursuant to other laws, such as the Wagner-
Peyser Act merit-staffing requirement. The Department made no changes 
to the regulatory text in response to these comments.
    Comments: One commenter asserted that, because WIOA does not 
specifically amend, address, or rescind the Employment Services merit 
staff exemption granted to Colorado, Massachusetts, and Michigan under 
the Wagner-Peyser Act, this exemption remains in full effect.
    Department's Response: The benefits of merit staffing in promoting 
greater consistency, efficiency, accountability, and transparency have 
been well established and DOL has proposed continuing Wagner-Peyser Act 
merit staffing requirements under WIOA. Nonetheless, WIOA is silent on 
the continuation of this exemption, and there is no need to address it 
in these regulations. However, to prevent significant disruptions in 
service delivery and to help facilitate implementation of WIOA, the 
Secretary of Labor has elected to continue all current exemptions to 
the Wagner-Peyser Act merit staffing requirement. This continuation 
applies only to the current exemptions; the Department has no immediate 
plans to expand this authority within States that have been granted 
this administrative flexibility or to additional States, and such 
grants could be subject to termination in the future at the discretion 
of future DOL leadership.
Section 678.635 What is the compliance date of the provisions of this 
subpart?
    While no significant policy changes have been made to this section, 
the date by which Local WDBs must demonstrate they are preparing for 
the one-stop operator competition process has been changed from June 
30, 2016 to [90 days from publication of this Final Rule], in order to 
give Local WDBs an adequate amount of time to actively respond to the 
requirements of these regulations.
    Comments: A few commenters requested flexibility to delay 
competitive selection if a State determines that breaking a lease in 
existence prior to PY 2014 exceeds the three percent funding cap for 
that local area's title I or Wagner-Peyser Act funding for PY 2016. The 
commenters requested guidance or technical assistance if the cost of 
maintaining current programming in existing one-stop centers exceeds 
the caps.
    Department's Response: DOL has issued operational guidance on the 
continuation of contracts during the WIA to WIOA transition, and 
depending on the State or local interpretation of a lease agreement, 
this guidance may be relevant. Please see TEGL No. 38-14, ``Operational 
Guidance to Support the Orderly Transition of Workforce Investment Act 
Participants, Funds, and Subrecipient Contracts to the WIOA,'' which 
can be found at https://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
    Comments: A commenter stated that DOL should adjust the 
implementation date of this provision to July 1, 2017 from June 30, 
2017 to coincide with the beginning of the new program year, instead of 
the last day of the previous program year.
    Department's Response: After considering this comment, the 
Department has adjusted the date in Sec.  678.635(a) to July 1, 2017 in 
order to be consistent with the program year.
    Comments: A few commenters expressed support for regulatory 
language that would allow Local WDBs to continue competitively procured 
one-stop operator contracts that are executed before the June 30, 2017 
effective date.
    Department's Response: No regulatory text changes were made in 
response to these comments. The Department recommends following the 
guidance that has been released for continuing, adapting, and 
terminating (if necessary) one-stop services contracts that can be 
applied to one-stop operator contracts, which can be found in TEGL No. 
38-14, ``Operational Guidance to Support the Orderly Transition of 
Workforce Investment Act Participants, Funds, and Subrecipient 
Contracts to the Workforce Innovation and Opportunity Act,'' which can 
be found at https://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
Other Comments on One-Stop Operators
    Comments: A few commenters stated that neither WIOA nor the NPRM 
state that the Local WDB is required to pay the one-stop operators. 
They also recommended that Governors be able to set policies for one-
stop operators.
    Department's Response: A competitive process is required for the 
selection of the one-stop operator by the Local WDB, and it is expected 
that a sizable portion of the bid-on costs would be the salary of the 
one-stop operator's staff. One-stop operator roles and responsibilities 
are defined in WIOA and these regulations, and existing and future 
operational guidance and rules will delineate how these policies are 
set at the local level. WIOA sec. 121(d)(1) delegates the majority of 
the authority to set these policies to the Local WDB. No change to the 
regulatory text was made in response to these comments.
    Comments: A commenter recommended making this section more 
collaborative with ED, to be consistent with the rest of the NPRM. The 
commenter expressed concern that this topic is only under DOL's 
auspices when both Departments oversee the entities involved in the 
one-stop delivery system.
    Department's Response: The Department agrees; this is a joint 
regulation and the comment responses, in addition to most existing 
operational policies, have been developed through collaboration between 
the Departments of Labor and Education. It is the intention of the 
Departments to continue to provide joint guidance and training to our 
respective systems of service in a collaborative manner.
    Comments: Another commenter suggested that the Department should 
establish labor standards for staff working in the one-stop delivery 
system.
    Department's Response: The Department appreciates the concerns 
giving rise to this suggestion, but the establishment of labor 
standards for

[[Page 55902]]

occupations in State or local governmental entities carrying out the 
provisions of WIOA is outside the scope of these regulations, as well 
as the Departments' administrative authority. No change to the 
regulatory text was made in response to this comment.
6. One-Stop Operating Costs (20 CFR Part 678, Subpart E; 34 CFR 361.700 
Through 361.760; 34 CFR 463.700 Through 463.760)
    The regulations governing one-stop partner funding of 
infrastructure costs and other shared costs are intended to:
    (1) Maintain the one-stop delivery system to meet the needs of the 
local areas;
    (2) Reduce duplication by improving program effectiveness through 
the sharing of services, resources and technologies among partners;
    (3) Reduce overhead by streamlining and sharing financial, 
procurement, and facilities costs;
    (4) Encourage efficient use of information technology to include, 
where possible, the use of machine readable forms and shared management 
systems;
    (5) Ensure that costs are appropriately shared by one-stop partners 
by basing contributions on proportionate use of the one-stop centers 
and relative benefit received, and requiring that all funds are spent 
solely for allowable purposes in a manner consistent with the 
applicable authorizing statute and all other applicable legal 
requirements, including the OMB's Uniform Guidance set forth in 2 CFR 
chapter II, part 200 (Uniform Guidance); and
    (6) Ensure that services provided by the one-stop partners to 
reduce duplication or to increase financial efficiency at the one-stop 
centers are allowable under the partner's program.
    Infrastructure costs are the responsibility of all one-stop partner 
programs, whether they are physically located in the one-stop center or 
not. Each partner's contribution to these costs, however, may vary, as 
these contributions are to be based on the proportionate use and 
relative benefit received by each program, consistent with the partner 
programs' authorizing laws and regulations and the Uniform Guidance at 
2 CFR part 200. Section 121(h)(1)(A) of WIOA establishes two funding 
mechanisms--a local funding mechanism and a State funding mechanism. 
Under WIOA sec. 121(c), the Local WDBs must enter into MOUs that cover, 
in part, the amount each partner will contribute toward the one-stop 
center's infrastructure costs. The Departments strongly encourage Local 
WDBs to reach agreement. If the Local WDB fails to reach agreement with 
each of the partners with regard to the amount each partner will 
contribute to the one-stop delivery system's infrastructure costs 
pursuant to WIOA sec. 121(h)(1)(A)(i)(I), the local area is considered 
to be at an impasse. When a local area fails to reach such agreement, 
the State funding mechanism is triggered pursuant to WIOA sec. 
121(h)(1)(A)(ii).
    As discussed in more detail in the analysis of comments regarding 
Sec.  678.725, the State funding mechanism, in the event a local area 
fails to reach agreement with the one-stop partners, will not be 
triggered prior to PY 2017. In other words, the failure of a local area 
to reach an agreement with regard to the funding of the one-stop 
centers' infrastructure costs for PY 2017 (which begins July 1, 2017), 
would trigger the State funding mechanism, in order to provide that 
funds are available to pay for the one-stop delivery system's 
infrastructure costs in PY 2017. In specific instances, the triggering 
of the State funding mechanism will be based on the guidance developed 
by the Governor under Sec.  678.705(b)(3) as to the timeline for 
notifying the Governor that the local area was unable to reach 
agreement. The same would be true for each subsequent program year. 
States and local areas may continue to negotiate local funding 
agreements as they have under WIA for the purposes of PY 2016.
    The Departments have determined this interpretation is most 
consistent with the plain meaning of the statutory provision, because 
all negotiations for purposes of the one-stop delivery system's 
infrastructure costs for PY 2016, which begins on July 1, 2016, as well 
as the implementation of a State funding mechanism, would need to occur 
well before the start of PY 2016 in order to provide funding for the 
one-stop delivery system in PY 2016. However, sec. 121(h)(1)(A)(ii) 
makes clear that the State funding mechanism does not apply until 
negotiations fail to result in an agreement after the start of PY 2016, 
which, by necessity, would make it applicable beginning with PY 2017, 
and then for all subsequent program years.
    For PY 2017 and all subsequent program years, when a local area 
fails to reach an agreement, thereby triggering the implementation of 
the State funding mechanism pursuant to sec. 121(h)(1)(A)(ii), the 
Governor, or in some cases other officials as described in Sec.  
678.730(c)(2) and in more detail below, after consultation with State 
and Local WDBs and CEOs, will determine the amount each partner must 
contribute to assist in paying the infrastructure costs of one-stop 
centers. The Governor, or other official in consultation with the 
Governor, as appropriate, must calculate amounts based on the 
proportionate use of the one-stop centers and relative benefit received 
by each partner and other factors stated in Sec.  678.737(b). The 
amounts contributed by each one-stop partner in a local area will be 
based on an infrastructure cost budget determined either by local 
agreement, as stated in Sec.  678.735(a), or by formula, as stated in 
Sec.  678.735(b)(3) and in accordance with the remainder of Sec.  
678.745 and sec. 121(h)(3)(B) of WIOA. Section 678.738(c) sets forth 
the limitation for one-stop partners' contributions under the State 
funding mechanism, based on a percentage of their statewide funding 
allocation, in accordance with WIOA sec.121(h)(2)(D)(ii).
    Comments: A commenter expressed support for the proposed 
regulations in this subpart. Another commenter requested technical 
assistance and additional clarity on these provisions. One commenter 
asked that the Departments describe the expectations in this subpart 
and in subpart C for each one-stop partner program, individually and 
separately, because each program has its own requirements for 
administrative costs and infrastructure contributions based on its 
authorizing statute.
    Departments' Response: The Departments have issued operating 
guidance that describes the Departments' views on how these provisions 
will work. The expectations for each partner program will be further 
defined in guidance on one-stop infrastructure negotiations, and 
technical assistance will be provided to the public workforce system 
following publication of these regulations. To describe these details 
in regulatory language would be overly prescriptive; the Departments 
decline to change the regulatory text in response to this comment. 
Required Federal partner programs often operate under different 
authorizing statutes in addition to WIOA. Those administering agencies 
will issue program-specific guidance and technical assistance on 
infrastructure costs and negotiating MOUs in addition to any joint 
guidance regarding WIOA implementation. The costs of the one-stop 
delivery system are not only supported by infrastructure funding, but 
also by the payment of other shared costs that may be part of the MOU.
    Comments: A commenter stated that this subpart would have the 
effect of

[[Page 55903]]

worsening or reducing collaboration between local programs. The 
commenter went on to say that partners do not know how to implement 
WIOA's options for sharing local infrastructure costs.
    Departments' Response: The Departments disagree with this general 
assessment, and the Departments are aware of many States and local 
areas where infrastructure and cost sharing agreements have been 
working well for some time. The intent of WIOA is to continue and 
enhance the collaboration of partners, with more specific guidelines, 
and the Departments intend to provide further guidance and technical 
assistance regarding the sharing of local infrastructure costs and 
other shared costs. No change to the regulatory text was made in 
response to this comment.
    Comments: A few commenters expressed support for a separate funding 
line item for one-stop infrastructure costs.
    Departments' Response: Since a separate line item was not 
authorized in WIOA, nor included in any of the Departments' 
appropriations, the Departments are not authorized to implement 
separate funding for infrastructure costs. No change to the regulatory 
text was made in response to these comments.
Section 678.700 What are the one-stop infrastructure costs?
    Section 678.700 provides the definition for infrastructure costs 
based on sec. 121(h)(4) of WIOA. In addition, the section adds common 
one-stop delivery system identifier costs. These costs are those 
associated with signage and other expenses related to the one-stop 
common identifier, as required by subpart G of this part.
    Jointly funding services is a necessary foundation for an 
integrated service delivery system. Section 678.700(c) explains that a 
partner's contributions to the costs of operating and providing 
services within the one-stop delivery system must adhere to the partner 
program's Federal authorizing statute, and to all other applicable 
legal requirements, including the Federal cost principles that require 
that costs must be allowable, reasonable, necessary and allocable. 
These requirements and principles will help one-stop partners identify 
an appropriate cost allocation methodology for determining partner 
contributions. There are a variety of methods to allocate costs, for 
instance: based on the proportion of a partner program's occupancy 
percentage of the one-stop center (square footage); the proportion of a 
partner program's customers compared to all customers served by the 
one-stop; the proportion of partner program's staff compared to all 
staff at the one-stop; or based on a partner program's use of equipment 
or other items that support the local one-stop delivery system. A 
detailed discussion of the Departments' responses to public comments 
received on this section follows immediately below.
    Comments: One commenter asked whether infrastructure costs are 
applicable only to partners physically located in the one-stop centers 
or to all partners.
    Departments' Response: Infrastructure costs are applicable to all 
one-stop partner programs, whether they are physically located in the 
one-stop center or not. Each partner's contribution to these costs, 
however, may vary, as these contributions are based on the 
proportionate use and relative benefit received, consistent with the 
partner programs' authorizing laws and regulations and the Uniform 
Guidance at 2 CFR part 200.
    Comments: Another commenter said that the Departments need to 
provide sufficient guidance on the expectations for certain programs to 
ensure that cost negotiations take place and contributions occur.
    Departments' Response: Since the issuance of the NPRM, 
infrastructure funding guidance has been released by the Departments, 
and more guidance and technical assistance documents will be released 
throughout the operational lifetime of the regulations.
    Comments: One commenter suggested that because the NPRM essentially 
requires title I programs to police the participation of other programs 
regarding infrastructure costs, they would discourage optional one-stop 
partners from participating at all.
    Departments' Response: Governors and State WDBs must create the 
framework for funding and required partner programs must operate within 
that framework, both at the State and local levels. Local WDBs will 
follow this framework, which must be inclusive of required partner 
programs as well as other programs that are additional partners in the 
one-stop centers in that local area. Once negotiated MOUs are in place, 
the State will monitor their operations, along with the other fiscal 
procedures of local areas, as they do now. The Local WDBs will be 
responsible for ensuring that all of the one-stop infrastructure costs 
are paid according to the provisions of the MOU, as they are the entity 
with which the partner programs will be signing the MOU. No change to 
the regulatory text was made in response to this comment.
    Comments: A commenter said that proposed Sec.  678.700(c) should 
begin, ``Each entity described in . . .'' to clearly indicate that 
partners must contribute funds for infrastructure, regardless of 
whether a partner wants to have a service delivery mechanism separate 
from the one-stop center.
    Departments' Response: The Departments have determined that the 
regulation is clear as proposed, and have concluded that this change is 
not needed and would cause unnecessary confusion.
    Comments: Another commenter suggested that Perkins Act funds should 
not be shifted to infrastructure support.
    Departments' Response: As a statutorily required partner of the 
one-stop center under WIOA, a Perkins eligible recipient at the 
postsecondary level, or a consortium of eligible recipients at the 
postsecondary level in a local area, will now be involved in the 
development of local MOUs, which spell out the services to be provided 
through the one-stop centers. All partners must contribute to the one-
stop infrastructure costs according to WIOA, as is described in more 
detail in Sec.  678.720(a). No change to the regulatory text was made 
in response to this comment.
    Comments: One commenter expressed concern that, given the 
``proportionate use by or benefit to the partner program'' clause in 
this part, TANF or Basic Food Employment and Training could incur a 
significant cost due to the volume of clients served by these programs. 
The commenter also asked if this funding is in addition to the funds 
already provided for employment services.
    Departments' Response: With regard to the TANF program, only those 
funds used for the provision or administration of employment and 
training programs are considered in infrastructure and MOU negotiations 
under WIOA. The Departments wish to clarify that there are numerous 
methods for allocating costs, of which a proportion of customers is 
only one. One-stop partners will negotiate MOU's and infrastructure 
funding agreements that meet the needs of the local areas and the 
partner programs.
    Comments: A few commenters objected to the funding structure 
described in the NPRM, stating that there is a discrepancy in how 
contributions are calculated and how funds are reallocated. 
Specifically, the commenter suggested that the State WDB formula--as 
discussed in Sec.  678.745--redistribute funds under

[[Page 55904]]

what was proposed as the State funding mechanism in the NPRM using 
different factors than what is used to calculate proportionate share.
    Departments' Response: The Departments have determined that the 
referenced discrepancy does not exist. There will be differences in the 
application of the framework for infrastructure funding used among 
local areas, but required partner programs will have consistent 
requirements across all programs. As the commenter suggested, however, 
the use of the State WDB formula as proposed in the NPRM created 
ambiguities in determining what local partner programs should 
contribute. Because of this and other comments, the formula has been 
reworked to provide a more stable, and practicable tool for the 
Governor to use. These changes are detailed in Sec.  678.745 and the 
associated Preamble discussion.
    Comments: A few commenters said that contributions from partner 
programs must be consistent with their authorizing statutes and all 
other legal requirements under WIOA.
    Departments' Response: The Departments agree that all required 
partner programs must also comply with the provisions of their own 
authorizing statutes, in addition to WIOA, and have determined that the 
regulations reflect this requirement.
    Comments: A few commenters asked if only partners colocated within 
the one-stop must contribute, or if all partners that benefit from the 
centers must also contribute.
    Departments' Response: As mentioned above, all one-stop partners 
must contribute to infrastructure funding, but will do so based upon a 
reasonable cost allocation methodology whereby infrastructure costs are 
charged based on each partner's proportionate use of the one-stop 
centers and relative benefit received. This would still apply even if 
the program is not located at the one-stop center, if it is a required 
partner.
    Comments: A commenter asked why the UI system is not a mandatory 
funding partner.
    Departments' Response: This is an incorrect assumption. As a 
required one-stop partner under WIOA sec. 121(b)(1)(B)(xi), a partner 
providing UI services must contribute its proportionate share of the 
infrastructure costs, as is required by WIOA sec. 121(b)(1)(A)(ii).
    Comments: Another commenter recommended that TANF should not be 
required to pay infrastructure costs.
    Departments' Response: As a one-stop partner, a TANF program must 
provide infrastructure cost funding according to its proportionate use 
of the one-stop centers and relative benefit received, as is required 
by WIOA, unless the Governor exercises the option not to include TANF 
as a required partner. See WIOA sec. 121(b)(1)(C). If the Governor has 
exercised the option so that an entity carrying out a TANF program is 
not a required one-stop partner, but it chooses to become one 
voluntarily, the program must provide its share of infrastructure costs 
as do all required partners. No change to the regulatory text was made 
in response to this comment.
    Comments: A few commenters said that the Departments should make it 
clear that title I funds can support title II based on the definition 
of ``training'' in WIOA sec. 134(c)(3).
    Departments' Response: Program funds are for the benefit of the 
participants enrolled in training authorized in that particular title. 
Funds provided by partners to support infrastructure and shared costs 
of the one-stop delivery system are intended to benefit the 
participants of all programs. Guidance also has been released on the 
subject in both TEGL No. 2-15, ``Operational Guidance for National 
Dislocated Worker Grants pursuant to the Workforce Innovation and 
Opportunity Act,'' and TEGL No. 04-15 ``Vision for the One-Stop 
Delivery System under WIOA,'' among others, as well as corresponding ED 
documents, such as TAC-15-01 and Program Memorandum OCTAE 15-3, which 
are associated with TEGL No. 04-15. All DOL WIOA operating guidance can 
be found at https://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm, and all associated ED documents may be 
found at www2.ed.gov/about/offices/list/osers/rsa/wioa-reauthorization.html and www2.ed.gov/policy/adulted/guid/memoranda.html.
    Furthermore, an additional section of regulatory text on this 
subject was added to the DOL WIOA Final Rule at 20 CFR 680.350. No 
change to the regulatory text was made in response to these comments.
    Comments: Multiple commenters urged the elimination of the one-stop 
delivery system proposed infrastructure payments, and some remarked 
that the NFJP should be exempt from this requirement because NFJP 
grantees often operate in satellite locations in rural areas where the 
communities face transportation barriers. Some of these commenters 
discussed the extensive outreach necessary in these communities and 
remarked that NFJP grantees would not have to sacrifice their identity 
or their close partnerships with one-stop delivery systems if the 
Departments allow them this exemption.
    Departments' Response: The Departments cannot eliminate the one-
stop delivery system infrastructure payments for any of the required 
partner programs, as the infrastructure cost contributions are required 
by sec. 121(b)(1)(A)(ii) of WIOA. While NFJP grantees are required 
partners and are required to provide infrastructure funding for the 
one-stop centers, they will contribute amounts in direct proportion to 
their use in accordance with the provisions of these regulations and 
Departmental guidance. No change to the regulatory text was made in 
response to these comments.
    Comments: Several commenters stated that, if deemed necessary, 
infrastructure payments should be no greater than the value received by 
NFJP programs, and some commenters suggested that in-kind contributions 
should be considered as a valid form of payment.
    Departments' Response: WIOA requires partners to contribute 
infrastructure funds according to the partners' proportionate use and 
relative benefit received. The regulations allow noncash and third-
party in-kind contributions as valid forms of payment for 
infrastructure costs. The Uniform Guidance related to in-kind 
contributions applies here, and additional guidance regarding noncash 
and in-kind contributions and shared costs has been released by the 
Departments. No change to the regulatory text was made in response to 
these comments.
    Comments: A commenter suggested that NFJP grantees should continue 
to be required partners on State and Local WDBs if NFJP is forced to 
make a financial contribution.
    Departments' Response: The Departments recognize that many 
important system partners with experience with specific populations--
such as certain required one-stop partner programs, tribal 
organizations, other Department program grantees, and those serving the 
disadvantaged and disabled populations--are no longer required members 
of WDBs. However, 20 CFR 679.320(c) of the DOL-only Final Rule requires 
that the Local WDB must be comprised of workforce representatives that 
can include one or more representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of individuals 
with barriers to employment. Further, 20 CFR 679.320(e)(4) says the CEO 
has the

[[Page 55905]]

flexibility to appoint ``other appropriate individuals,'' which does 
not preclude any organization that the CEO deems appropriate. The 
Departments encourage the CEO to ensure that Local WDB members 
represent the diversity of job seekers and employers in their local 
areas, which includes ensuring adequate representation on the Local 
WDB. Section 679.320 in the DOL WIOA Final Rule implements the WIOA 
sec. 107(b) Local WDB membership requirements. No change to the 
regulatory text was made in response to this comment.
    Comments: Several commenters addressed the Departments' request for 
comment on the types of costs that should be included as infrastructure 
costs. One commenter reasoned that staff development and training is an 
appropriate use of funds to maintain the one-stop delivery system as 
described in Sec.  678.700(c). The commenter also asked if the 
Departments are acknowledging that costs described in paragraphs (a) 
and (b) are allowed by the required program authorizing statutes. 
Another commenter asked if infrastructure costs include personnel costs 
such as facility maintenance, and one commenter asked if they include 
copy machine leases. A different commenter suggested that 
infrastructure costs should include one-stop marketing, IT and 
communication costs, and administrative costs of operating one-stop 
centers. A couple of commenters suggested that certain one-stop 
operation personnel costs, such as receptionist, IT support, building 
security, and manager, should be funded from infrastructure costs. 
Another commenter agreed, reasoning that if they are not, such costs 
would fall on WIOA title I-B funds.
    Departments' Response: Section 121(h)(4) of WIOA defines one-stop 
infrastructure costs as ``the nonpersonnel costs that are necessary for 
the general operation of the one-stop center, including rental costs of 
the facilities, the costs of utilities and maintenance, equipment 
(including assessment-related products and assistive technology for 
individuals with disabilities), and technology to facilitate access to 
the one-stop center, including the center's planning and outreach 
activities.'' This definition is also in Sec.  678.700(a). The 
Departments will provide additional guidance regarding infrastructure 
costs, but addressing all potential specific items of cost that could 
be included or excluded from infrastructure costs, based on this 
definition, is beyond the scope of these regulations.
    WIOA allocates equitably the cost responsibility for operating the 
one-stop delivery system across partner programs; therefore, it is not 
the intention that any one partner bear a disproportionate share of the 
costs. The Departments do not agree with the conclusion that if the 
costs identified by the commenters are not included in infrastructure 
costs they will fall on WIOA title I funds. Costs that are related to 
services shared by partners that do not fall into the definition of 
infrastructure costs should be treated as other shared costs according 
to WIOA sec. 121(i)(2) and Sec.  678.760 of these regulations.
    Comments: One commenter stated that infrastructure costs should be 
aggregated and addressed at the State level.
    Departments' Response: It is not possible to accomplish this by 
Federal regulation. Funds are separately appropriated to States under a 
variety of authorizing statutes. The Governor, in working with the 
State WDB, will develop guidance that, among other things, outlines a 
framework for identifying infrastructure contribution from each 
required partner, as discussed in Sec.  678.705 of these regulations. 
If consensus cannot be reached on an infrastructure funding agreement 
locally, the Governor will implement the State funding mechanism to 
determine one-stop partner contributions, as discussed in Sec. Sec.  
678.725 through 678.745. No change to the regulatory text was made in 
response to this comment.
    Comments: A commenter expressed support for including assistive 
technology as a required infrastructure cost.
    Departments' Response: Section 121(h)(4) and Sec.  678.700(a)(3) 
provide that equipment, including assistive technology for individuals 
with disabilities, is an infrastructure cost. However, neither of these 
provisions describes assistive technology as a required infrastructure 
cost, and the Departments have determined that designating any 
particular cost as a required infrastructure cost is beyond the scope 
of these regulations. As previously indicated in this Preamble, the 
Departments intend to issue guidance regarding specific items of 
allowable infrastructure costs and will address one-stop center 
accessibility costs in that guidance. No change to the regulatory text 
was made in response to this comment.
    Comments: A few commenters recommended that costs associated with 
adopting the common identifier should be funded by the Departments, not 
from infrastructure costs. One commenter asked for examples of common 
identifier costs. Another commenter agreed that common identifier costs 
should be included as common infrastructure costs.
    Departments' Response: Costs associated with the common identifier 
may be included as infrastructure as well, however there is no separate 
source of funding to allocate from the Federal level for common 
identifier costs. Examples of common identifier costs would be the cost 
of new signage, changing material templates, and changing electronic 
resources, but it would not include any sort of advertising campaign 
promoting the one-stop center under the new common identifier. No 
change to the regulatory text was made in response to these comments.
    Comments: Several commenters stated that infrastructure cost levels 
should be set at the State level for adult education programs, rather 
than requiring local negotiations between each adult education program 
and each one-stop partner.
    Departments' Response: Section 678.415(b) of the regulation 
specifies that the appropriate entity to serve as a partner for the 
adult education program is the State eligible agency or entity and the 
State eligible agency or entity for AEFLA may delegate its 
responsibilities to act as a local one-stop partner to one or more 
eligible providers or consortium of eligible providers. As part of 
these delegated responsibilities to serve as a one-stop partner, a 
local adult education entity would assume the roles and 
responsibilities of one-stop partners under sec. 121(b)(1)(A), which 
would include contributing to infrastructure costs. No change to the 
regulatory text was made in response to these comments.
Section 678.705 What guidance must the Governor issue regarding one-
stop infrastructure funding?
    Section 678.705 includes certain requirements for the Governor's 
guidance, including establishing roles, defining equitable and 
efficient methods for negotiating around infrastructure costs, and 
establishing timelines for local areas. These requirements are 
essential to ensuring a consistent approach to the Governors' guidance 
across States. This allows for one-stop certification, competition of 
the one-stop operator, and inclusion of infrastructure funding 
agreement terms into the local State Plan in appropriate timeframes. 
Based on comments received, the Departments have concluded that the 
Governor's guidance and technical assistance will be of greatest value 
to the public workforce system in implementing the provisions

[[Page 55906]]

of the sections that follow. A detailed discussion of the Departments' 
responses to public comments received on this section follows 
immediately below.
    Comments: A commenter asked whether the Governor may dictate the 
cost categories and allocation methods, or whether the Governor may 
provide flexibility to local partners in these areas. Another commenter 
said that the Departments should issue guidance on cost sharing, 
allocation, and allowable costs. One commenter recommended that in 
cases where the Governor needs to intervene to establish local 
contributions, the contributions should be supported with similar 
funding sources for all contributors. Another commenter said that 
guidance on funding should allow for flexible contributions from 
required partners.
    Departments' Response: The Departments have determined that the 
language in Sec.  678.705 is consistent with the cost principles 
contained in the Uniform Guidance and those of the authorizing statutes 
and, thus, provides sufficient parameters within which to define costs, 
cost allocation, and other principles of cost sharing. For purposes of 
clarity, specific references to the Uniform Guidance have been added to 
Sec.  678.705. Furthermore, paragraph (b)(2) also has been revised to 
clarify that cost allocation should be based on proportionate use of 
the one-stop centers and relative benefit received. The Governor may 
not dictate cost categories or allocation methods that are not 
consistent with the Uniform Guidance. There are a variety of methods to 
allocate costs that are consistent with the Uniform Guidance, for 
instance, based on: The proportion of a partner program's occupancy 
percentage of the one-stop center (square footage); the proportion of a 
partner program's customers benefitting by coming to the one-stop; the 
proportion of partner program's staff among all staff at the one-stop 
center; or the percentage of a partner program's use of equipment at 
the one-stop center. This portion of the regulation can be complex, and 
the Departments will continue to issue guidance and provide technical 
assistance to the public workforce system.
    The DOL's previous Financial Management Technical Assistance Guide 
published for WIA remains useful for an overview of cost allocation 
methodologies. See https://www.doleta.gov/grants/pdf/TAG_PartI.pdf and 
https://www.doleta.gov/grants/pdf/TAG_PartII_July2011.pdf. The 
Departments jointly will work to update this guide and provide 
technical assistance on cost allocation in the future.
    Comments: A few commenters said there needs to be guidance for 
local partners to contribute to the one-stop infrastructure costs. The 
commenter said that these costs need to be defined as program costs.
    Departments' Response: In addition to the provisions of these 
regulations, guidance for local partner contributions will be available 
from Departmental policy guidance documents, and from the State 
agencies administering partner funds. However, local required partners 
and their CEOs also must recognize that funds must be used in 
accordance with the related authorizing statutes, and consistent with 
the requirements of the Uniform Guidance. While infrastructure costs 
may be considered as program costs for DOL WIOA programs--which are 
primarily WIOA title I programs--this is not the case for all local 
area partner programs. Other authorizing statutes may have differing 
interpretations. Further guidance and technical assistance is 
forthcoming on this issue.
    Comments: A few commenters requested additional guidance for the 
Governor to assist in establishing roles and defining equitable and 
efficient methods for negotiation. A commenter said that the rule 
should give guidance on what roles the Departments envision to ensure 
that the Governors' recommendations are appropriate.
    Departments' Response: Since the issuance of the NPRM, the 
Departments have released infrastructure funding guidance that includes 
roles and responsibilities, and more guidance and technical assistance 
documents will be released throughout the operational lifetime of the 
regulations. No change to the regulatory text was made in response to 
these comments.
    Comments: A commenter said that this section should refer to WIOA 
sec. 121, concerning infrastructure spending ceilings for certain 
programs.
    Departments' Response: The Departments decline to adopt this 
recommendation. While the infrastructure funding caps for certain 
programs under the State funding mechanism are covered in Sec.  
678.738(c), they do not apply to contributions of local programs 
pursuant to the local funding mechanism. No change to the regulatory 
text was made in response to this comment.
    Comments: A couple of commenters said that the regulations need to 
provide a ``fail safe'' for local areas in case the State is not 
negotiating in good faith or fails to meet the requirements of the MOU. 
The commenter recommended that this would be a plan consisting of MOU 
terms and cost allocation plans that would go into effect if either 
condition above occurs.
    Departments' Response: The Departments are not authorized by WIOA 
to implement a ``fail safe'' plan as the commenter suggested. WIOA and 
this Joint WIOA Final Rule (at Sec.  678.750) require that the Governor 
have an appeals process for the State funding mechanism that would 
allow one-stop partners to appeal a Governor's funding determination. 
In addition, 20 CFR 683.600 of the DOL WIOA Final Rule would include 
Local WDBs and CEOs as ``other interested parties'' that may file 
grievances under the State established procedures required by WIOA sec. 
181(c)(1). No change to the regulatory text was made in response to 
these comments.
Section 678.710 How are infrastructure costs funded?
    Section 678.710 indicates that sec. 121(h)(1)(A) of WIOA 
establishes two methods for funding the infrastructure costs of one-
stop centers: A local funding mechanism and a State funding mechanism. 
Both methods utilize the funds provided to one-stop partners by their 
authorizing statutes. There is no separate funding source for one-stop 
infrastructure costs. The Departments received no comments on this 
section and made no changes to the regulatory text.
Section 678.715 How are one-stop infrastructure costs funded in the 
local funding mechanism?
    To use the local funding mechanism, Local WDBs, in consultation 
with CEOs, must engage one-stop partners early in discussions about 
one-stop center locations, costs, and other services, so that all 
parties can make decisions cooperatively and reach consensus about 
funding infrastructure costs. WIOA does not place any limitations on 
contributions under the local mechanism; however, partner programs' 
contributions must be in compliance with their Federal authorizing 
statutes and other applicable legal requirements, including 
administrative cost limitations, and represent each partner's 
proportionate share, consistent with the Uniform Guidance. Under this 
section, agreement is achieved when all of the one-stop partners sign 
an MOU with the Local WDB, which includes a final agreement regarding 
funding of infrastructure that includes the elements listed in Sec.  
678.755, or an interim funding agreement that includes as many of these 
elements as possible. A detailed discussion of the Departments'

[[Page 55907]]

responses to public comments received on this section follows 
immediately below.
    Comments: One commenter said that partners should pay an equitable 
share of the infrastructure costs, not a proportionate share based on 
relative benefits.
    Departments' Response: WIOA sec. 121(h)(1)(B)(i) and sec. 
121(h)(2)(C) specifically require funding allocations under both the 
local or State funding options to be based on proportionate use and 
relative benefit received. The first and preferred option is through 
methods agreed on by the Local WDB, CEOs, and one-stop partners. If no 
agreement can be made, then the State funding mechanism applies. Both 
mechanisms are based upon Federal cost principles contained in the 
Uniform Guidance. No change to the regulatory text was made in response 
to this comment.
    Comments: A commenter stated that the regulations should clarify 
that the Local WDB has the responsibility for maintaining and preparing 
the records necessary to periodically review and reconcile partner 
shares of infrastructure costs against actual expenditures to ensure 
equity.
    Departments' Response: The Departments disagree; specifics of the 
roles and responsibilities of local entities is something to be worked 
out in the MOU, not in Federal regulation. Additionally, MOUs are 
required to be reviewed no less than once every 3 years as required by 
WIOA sec. 121(c)(2)(A)(v). No change to the regulatory text was made in 
response to this comment.
    Comments: Another commenter asked for a definition of 
``proportionate share.'' One commenter said that the Governor should 
set policy regarding ``proportionate benefit.'' Another commenter 
requested guidance on calculating proportionate use.
    Departments' Response: There is no specific Federal definition of 
proportionate share, proportionate benefit, or proportionate use, and 
none of these terms are defined in WIOA. In a general sense, 
proportionate share is the share of each partner program's 
infrastructure costs based upon its proportionate use of the one-stop 
centers and relative benefit received from that use. The concept of 
proportionate share, consistent with the partner programs' authorizing 
statutes and regulations and the Uniform Guidance at 2 CFR part 200, is 
used by Federal cost principles in the Uniform Guidance, among others. 
The Departments are aware of the complex nature of arriving at a 
generally accepted method of calculating proportionate share in a given 
State or local area and will address this issue through additional 
fiscal guidance and training. No additional regulatory text is 
required.
    Comments: Several commenters in the adult education field asked for 
guidance regarding the duties and functions of the Local and State WDBs 
in small States and single-area States.
    Departments' Response: Because WIOA is an evolving system, there is 
no standard list of all of the possible duties and functions of Local 
and State WDBs. While WIOA establishes required duties and functions 
for State and Local WDBs, discussed further in this subpart, each State 
and Local WDB will develop State and local plans that define their 
visions and roles and may expand upon these duties and functions. 
Pursuant to WIOA's Sunshine Provisions, the State and local plans are 
available for public inspection and Board meetings must be open to the 
public, which ensures transparency and accountability for all State and 
Local WDBs.
    Comments: A few commenters said that the Departments should issue 
guidance on simply bypassing the local infrastructure funding process 
and using the State funding process instead.
    Departments' Response: WIOA does not provide authority for 
bypassing the local funding mechanism. The State funding mechanism is 
only triggered after the Governor is informed that consensus could not 
be reached at the local level.
    Comments: Many commenters said that the Departments should clarify 
that both cash and in-kind contributions are permitted in both the 
local and State funding mechanisms. One commenter asked for 
clarification on how in-kind contributions should be calculated as an 
alternative to direct payments. A few commenters asked for 
clarification of the phrase ``fairly evaluated in-kind contributions'' 
and also asked to know who makes this determination. Another commenter 
said that infrastructure funding should be cash-only. One commenter 
said that the Departments should update their guidance for in-kind 
contributions to ensure that such contributions are weighted 
appropriately. A few other commenters said that provision of 
alternative communication services (e.g., Braille, deaf interpreters) 
should be considered an in-kind contribution for the VR program.
    Departments' Response: These comments assisted the Departments in 
making certain adjustments in this part of the regulations. WIOA sec. 
121(c)(2) outlines the required content of the local MOU. This includes 
a description of how the costs of operation of the one-stop delivery 
system will be funded. Operating budgets for one-stop centers encompass 
two types of costs that are specifically outlined in the law: 
Infrastructure costs, defined in WIOA sec. 121(h)(4), and additional 
costs relating to the operation of the one-stop delivery system that do 
not constitute infrastructure costs, described in WIOA sec. 121(i)(1), 
which includes the cost of career services under WIOA sec. 134(c)(2) 
and may include shared services, defined in WIOA sec. 121(i)(2). WIOA 
sec. 121(c)(2)(A)(ii)(I) establishes in-kind contributions as valid 
forms of payment for operations.
    The regulatory text in Sec.  678.715 has been revised to clarify 
that cash, non-cash, and third-party in-kind contributions may be 
provided by, or on behalf of, one-stop partners to cover their 
proportionate share of infrastructure costs and to provide further 
agreement on the terms with definitions provided in the Uniform 
Guidance. These terms are further defined in Sec.  678.720(c).
    Non-cash contributions, which are separate from third-party in-kind 
contributions, are comprised of receipts for current expenditures 
incurred by one-stop partners on behalf of the one-stop center and non-
cash resources such as goods or services, or the documentation of 
supporting costs for items owned by the partner's program and used by 
the one-stop center.
    For example, imagine a partner's proportionate share of the one-
stop operating costs is $15,000. The partner does not have sufficient 
cash or other resources to fund its share fully, and wishes to donate 
(not for its own individual use) gently used surplus computer 
equipment. The computers at the time of the donation have a value 
determined in accordance with the requirements of 2 CFR 200.306 of 
$10,000. The partner would be able to use the $10,000 value as part of 
the resources provided to fund the shared costs.
    Third-party in-kind contributions are contributions of space, 
equipment, technology, nonpersonnel services, or other like items to 
support the infrastructure costs associated with one-stop center 
operations, by a non-one-stop partner to support the one-stop center in 
general (rather than a specific partner), or contributions by a non-
one-stop partner of space, equipment, technology, nonpersonnel 
services, or other like items to support the infrastructure costs 
associated with one-stop center operations, to a one-stop partner to 
support its proportionate share of one-stop infrastructure costs.

[[Page 55908]]

    There are two types of third-party in-kind contributions: General 
contributions to one-stop operations (i.e., those not connected to any 
individual one-stop partner) and specific contributions made to a 
particular one-stop partner program.
    For example, a general in-kind contribution could be a city 
government allowing the one-stop to use city space rent-free. These in-
kind contributions would not be associated with one specific partner, 
but rather would go to support the one-stop generally and would be 
factored into the underlying budget and cost pools used to determine 
proportionate share. The result would be a decrease in amount of funds 
each partner contributes, as the overall budget will have been reduced.
    The second type of in-kind contribution could be a third-party 
contribution to a specific partner to support one-stop infrastructure. 
For example, an employer partner provides assistive technology to a VR 
program that then gives it to the one-stop center. So long as assistive 
technology was in the one-stop operating budget's infrastructure costs, 
the partner could then value the assistive technology in accordance 
with the Uniform Guidance and use the value to count towards its 
proportionate share. Prior to accepting in-kind contributions from a 
partner (via a third-party donor), there would need to be agreement 
among the partners on cost allocation methodology to ensure that other 
infrastructure operating costs are sufficiently covered through cash 
and noncash contributions.
    Both non-cash and in-kind contributions must be valued consistent 
with 2 CFR 200.306 and reconciled on a regular basis to ensure that 
they are fairly evaluated and meeting the partners' proportionate 
share.
    All partner contributions, regardless of the type, must be 
reconciled on a regular basis (i.e., monthly or quarterly) to ensure 
each partner program is contributing no more than its proportionate 
share, in accordance with the Uniform Guidance at 2 CFR part 200. No 
other change to the regulatory text is made in response to these 
comments.
Section 678.720 What funds are used to pay for infrastructure costs in 
the local one-stop infrastructure funding mechanism?
    Section 678.720 explains the funds that one-stop partners may use 
to pay for one-stop infrastructure costs. In funding the one-stop 
infrastructure costs, partner programs must satisfy the requirements of 
their authorizing statutes and regulations. Further, all one-stop 
partners must work together to administer the partner programs and the 
one-stop and other activities of the core programs under WIOA as 
efficiently and effectively as possible. This will ensure that, as 
recipients and stewards of Federal funds for all of these programs, the 
partners and their subrecipients, when allowable under a partner 
program's authorizing statute, administer these programs and activities 
to meet all applicable legal requirements and goals. It is important to 
note that the different Federal statutes and regulations of partner 
programs define administrative costs slightly differently. Some 
programs' statutes and regulations define all of the infrastructure 
costs listed in Sec.  678.700 as administrative costs, while other 
programs' statutes and regulations define some of the infrastructure 
costs as administrative costs, and some as program costs. Under Sec.  
678.720 of these final regulations, one-stop partner programs must 
adhere to the administrative and program cost limitations and 
requirements to which they are subject.
    Several changes were made to this section in response to public 
comments received by the Departments on the NPRM. In Sec.  678.720(a), 
language was added clarifying that, for WIOA title I programs, 
infrastructure costs may be considered program costs. Also in paragraph 
(a), a distinction was made between title II programs and programs 
authorized under the Perkins Act. Because the proposed Joint Final Rule 
had designated the State eligible agency under the Perkins Act as the 
required one-stop partner, it consequently required that infrastructure 
costs be paid from the funds reserved by the State eligible agency for 
State administrative expenses. The joint Final Rule, instead, 
designates that the Perkins one-stop partner is the eligible recipient 
at the postsecondary level, or a consortium of eligible recipients at 
the postsecondary level in a local area. Consequently, the joint Final 
Rule requires that infrastructure costs under the Perkins Act be paid 
from funds available for Perkins postsecondary recipients' local 
administrative expenses, or from other funds made available by the 
State. The Joint Final Rule also changes the source of infrastructure 
funding for the title II program, specifying that these costs be paid 
from the funds available for local administrative expenses or from non-
Federal resources that are cash, in-kind or third-party contributions.
    Also the Departments added a new paragraph (c) and associated 
subparagraphs to Sec.  678.720 in response to requests for further 
clarification, which cover the distinctions between and definitions of 
cash, non-cash, and third-party in-kind contributions to meet partner 
programs' infrastructure costs contribution obligations. In addition, 
the Departments provided operating guidance and technical assistance to 
the public workforce system, and will continue to provide such 
assistance, as needed. A detailed discussion of the Departments' 
responses to public comments received on this section follows 
immediately below.
    Comments: A commenter indicated that this section ``is in error in 
its implication of Perkins State administration funding to support 
local one-stop infrastructure.'' This commenter asserted that directing 
Perkins Act State administration is a violation of the uses of funds 
for such dollars as articulated in Perkins Act sec. 112(a)(3). The 
commenter recommended revising Sec.  678.720(a) to read: ``In the case 
of partners administering the Carl D. Perkins Career and Technical 
Education Act of 2006, these funds shall include local administrative 
funds available to local eligible institutions or consortia of such 
institutions.'' The commenter further stated that Perkins Act funds are 
not divided among secondary and postsecondary career and technical 
education programs; the distribution between the eligible recipients 
only takes place at the local level, and this section and Sec.  
678.740(d) should be revised to apply only to local-level funding 
instead of the Perkins eligible agency and the State's administrative 
dollars. Another commenter agreed, stating that the regulations appear 
to require duplicate Perkins funds, including both State and local 
Perkins administrative funds. The commenter similarly indicated that 
this is a new use of Perkins State administrative funds. Another 
commenter interpreted the intent of this section to mean that when the 
Perkins State eligible agency delegates authority to local entities to 
serve as one-stop partners, the State agency may require the use of 
local administrative funds in lieu of State administrative funds.
    Departments' Response: The Joint WIOA NPRM designated the State 
eligible agency under the Perkins Act as the required one-stop partner, 
and consequently required that infrastructure costs be paid from the 
funds reserved by the State eligible agency for State administrative 
expenses. The Final Rule instead designates that the Perkins one-stop 
partner is the eligible recipient at the postsecondary level, or a 
consortium of eligible recipients at the postsecondary

[[Page 55909]]

level in the local area. The Departments have determined that this 
change is consistent with WIOA sec. 121(b)(1)(B)(iv) which designates 
local one-stop Perkins partners as the entity that carries out career 
and technical education programs at the postsecondary level, authorized 
under the Perkins Act, in a local area. However, the Departments have 
concluded the State's involvement could be valuable at the negotiation 
stage and have modified Sec. Sec.  678.415(e) and 678.720(a) to provide 
that the local recipients at the postsecondary level may request 
assistance from the State eligible agency in completing its 
responsibilities in negotiating local MOUs. To meet their obligations 
to cover their proportionate share of infrastructure costs, Perkins 
postsecondary recipients may use funds available for local 
administrative costs under the Perkins Act, or draw from other funds 
made available by the State, at the State's discretion.
    Comments: A commenter stated that Perkins funds are not divided 
among secondary and postsecondary career and technical education 
programs; rather, the distribution between the eligible recipients only 
takes place at the local level, and Sec. Sec.  678.720 and 678.740(d) 
of the NPRM should be revised to apply only to local-level funding 
instead of the Perkins eligible agency and the State's administrative 
dollars.
    Departments' Response: As stated above, this comment was taken into 
consideration in making the final regulatory text changes indicating 
that the Perkins one-stop partner is the eligible recipient at the 
postsecondary level, or a consortium of eligible recipients at the 
postsecondary level in the local area.
    Comments: A commenter stated that the regulations appear to require 
duplicate Perkins funding, including both State and local Perkins 
administrative funds. The commenter said that this is a new use of 
Perkins State administrative funds.
    Departments' Response: Perkins State funds are no longer required 
to be used to pay for infrastructure costs, as outlined above, but may 
be made available by the State, at the State's discretion.
    Comments: A commenter said that Sec.  678.720(a) of the NPRM limits 
title II contributions to no more than five percent of the Federal 
AEFLA funds received by the State. The commenter said that the 
Departments should direct States to distribute a share of other title 
II funds to local partners to pay for infrastructure costs.
    Departments' Response: The Departments do not have the authority to 
direct the States to do this. Section 233(a)(2) of WIOA specifically 
provides that up to five percent of the AEFLA funds allocated to local 
eligible providers shall be used for administrative costs, including 
costs related to the one-stop partner responsibilities in sec. 
121(b)(1)(A). These responsibilities include contributing to 
infrastructure costs. Under sec. 233(a)(1), 95 percent of the funds 
allocated to local eligible providers must be used for carrying out 
adult education and literacy activities. However, under sec. 233(b), if 
the five percent cost limit is too restrictive to permit the local 
eligible provider to cover the local administrative costs, including 
the payment of infrastructure costs, the local eligible provider 
negotiates with the State eligible agency to determine an adequate 
amount to be used for non-instructional purposes. No change to the 
regulatory text was made in response to this comment.
    Comments: A few commenters asked if the approach described in Sec.  
678.720(a) would allow ``the Federal funding stream to sidestep its 
responsibility to cover costs relative to the benefit received by the 
program.''
    Departments' Response: As described at the beginning of this 
section, changes have been made to the local funding mechanism to 
explain partner responsibilities and make clear that programs must 
contribute their proportionate share based on proportionate use and 
relative benefit received.
    Comments: Some commenters stated that because WIOA sec. 121 does 
place a cap on infrastructure funding for the VR program, Sec.  678.720 
should not state that there is no cap on the funding a one-stop partner 
may contribute.
    Departments' Response: The caps on infrastructure funding, which 
are addressed in Sec.  678.738, apply to what the Governor can require 
partner programs to contribute under the State funding mechanism, 
triggered when local partners cannot reach consensus on the local-
funding mechanism. If a partner program chooses to contribute more than 
the cap for its program under the State funding mechanism, it can do 
so, as long as such contributions reflect its proportionate share, 
consistent with the Uniform Guidance. On the other hand, if the State 
funding mechanism is not triggered, neither WIOA sec. 121 nor Sec.  
678.720 of these final regulations impose a limitation on how much a 
core program may contribute for infrastructure costs. No change to the 
regulatory text was made in response to these comments.
    Comments: A commenter said that infrastructure costs should use 
only a portion of the available administrative cost amount, otherwise 
there will be no funds available for other administrative costs 
associated with operating the program.
    Departments' Response: A one-stop partner program's contributions 
to infrastructure costs under the local funding mechanism is limited in 
that contributions for administrative costs may not exceed the amount 
available for administrative costs under the authorizing statute of the 
partner program. In addition, the amounts contributed for 
infrastructure costs must be allowable and based on proportionate use 
of the one-stop centers and relative benefit received by the partner 
program, and must be consistent with 2 CFR part 200, including the 
Federal cost principles. No change to the regulatory text was made in 
response to this comment.
    Comments: Another commenter requested additional clarification on 
the process and role of adult education programs in contributing to 
infrastructure costs.
    Departments' Response: Upon further review, the Departments note 
that sec. 233(a)(2) of WIOA specifically provides that adult education 
program local administrative funds, rather than the State 
administration funds referenced in the NPRM, are to be used for one-
stop partner responsibilities under WIOA sec. 121(b)(1)(A). These 
responsibilities include contributing toward one-stop infrastructure 
costs. Further, while AEFLA caps the amount that may be used for local 
administrative expenses at five percent under sec. 233(a)(2) of WIOA, 
the State adult education agency may increase the amount that can be 
spent on local administration in cases where the cost limits are too 
restrictive to allow for specified activities. This may include funding 
one-stop center infrastructure that would be part of the one-stop 
partner responsibilities to be carried out by the eligible provider in 
a local area.
    The NPRM permitted the State eligible agency to use non-Federal 
funds that it contributes to meeting the program's matching or 
maintenance of effort requirements for infrastructure costs under both 
the local and State-level infrastructure funding mechanisms. Upon 
further review, the Departments have determined that providing States 
and local entities even greater flexibility to leverage non-Federal 
resources to pay infrastructure costs is appropriate.

[[Page 55910]]

    The text of Sec. Sec.  678.720 and 678.740 have been revised to 
provide that funds for infrastructure costs for the adult education 
programs under the local funding mechanism and State funding 
mechanisms, respectively, must include Federal funds available for 
local administration of the programs and non-Federal resources that are 
cash, non-cash, or in-kind or third-party contributions.
    Comments: A few commenters said that in times of limited resources, 
requiring one-stop partners to pay for infrastructure costs out of 
administrative funds could have the effect of limiting their 
participation in the one-stop delivery system.
    Departments' Response: Each one-stop partner will enter 
negotiations around the MOU and infrastructure funding agreement with 
the knowledge of their budgets and the requirements of their program 
statutes. The Departments hope that all partners find that developing a 
truly integrated one-stop center system results in efficiencies and 
enables partners to provide services in a cost effective manner that 
allows them to support the infrastructure costs of the one-stop center. 
No change to the regulatory text was made in response to these 
comments.
    Comments: A commenter expressed support for the flexibility 
provided to partners to use State or local funding options as long as 
there is minimal administrative burden. A couple of commenters 
expressed support for State and Local WDBs to have flexibility to 
determine how to meet their cost sharing requirements.
    Departments' Response: The Departments agree that these final 
regulations provide flexibility to one-stop partners in determining 
infrastructure funding contributions.
    Comments: A commenter asked if there is a difference between 
administrative and overall funding for one-stop partners.
    Departments' Response: As discussed above, the Federal statutes and 
regulations governing each of the partner programs define 
``administrative costs'' differently; therefore, partners must comply 
with program-specific requirements governing the expenditure of funds 
for such purpose.
    Comments: A commenter supported only administrative funds being 
used for one-stop infrastructure costs. Another commenter suggested 
that workforce development funds should not be co-mingled with career 
and technical education funds for purposes of funding and allocating 
one-stop infrastructure costs.
    Departments' Response: WIOA does not require or authorize blending 
or co-mingling of partner funds. Rather, the local MOU and 
infrastructure funding agreement will identify the infrastructure and 
operating costs of the one-stop center and develop a cost allocation 
methodology to determine each partner's proportionate share for both 
types of costs, consistent with the Uniform Guidance set forth in 2 CFR 
part 200. This process is similar to what has been done by one-stop 
partners for several years and it has been working well among one-stop 
centers in many local areas. Partners can contribute cash, noncash, or 
third-party in-kind contributions to the Local WDB to satisfy their 
share. However, infrastructure costs, unlike other shared operating 
costs, do not include personnel costs and therefore may not be paid for 
with in-kind personnel time. No change to the regulatory text was made 
in response to these comments.
Section 678.725 What happens if consensus on infrastructure funding is 
not reached at the local level between the Local Workforce Development 
Board, chief elected officials, and one-stop partners?
    The Departments have concluded that WIOA sec. 121(h)(1)(A)(i) 
requires that consensus agreement on the methods of sufficiently 
funding the costs of infrastructure be reached in negotiations, 
beginning July 1, 2016. The Departments informed the public and all 
relevant parties that this section of the WIOA regulations will not be 
implemented for PY 2016. The workforce development system was informed 
of this decision through the issuance of a Frequently Asked Question 
(FAQ) that was posted on agency Web sites on January 28, 2016 (see 
https://www.doleta.gov/wioa/FAQs.cfm). The regulatory text of this 
section has been revised to further clarify these provisions and to 
provide that the provisions outlined in this section on the State 
funding mechanism will be applicable to program years beginning with PY 
2017. Before that time, State agencies of the Governor will have issued 
the mechanism to follow if a local area fails to reach a local 
infrastructure funding agreement through the process of negotiating 
MOUs with the required programs.
    Section 678.725 states that failure to sign the MOU containing the 
final infrastructure funding agreement or interim agreement by the 
beginning of each program year would trigger the State funding 
mechanism. This section states that Local WDBs must notify the Governor 
by the deadline established by the Governor's infrastructure guidance 
developed under Sec.  678.705(b)(3) if the local partners cannot reach 
consensus. The State will monitor the local areas to address violations 
of the Governor's guidance. The Governor's guidance might establish an 
earlier date for notification of a lack of consensus to the State, or 
of milestones or decision points in the negotiation process, to ensure 
the uninterrupted services of the one-stop services in the local area. 
A detailed discussion of the Departments' responses to public comments 
received on this section follows immediately below.
    Comments: A commenter suggested that the regulations should state 
that if the Governor has to intervene to establish local contributions, 
that the contribution will be supported with similar funding sources 
for all contributors.
    Departments' Response: The State funding mechanism will be made 
public prior to application in any local area, and the framework used 
to determine contributions is the same for all contributors (see Sec.  
678.730). There is no statutory requirement in WIOA sec. 121(h) that 
partners contribute funds for one-stop infrastructure costs under the 
State funding mechanism from similar sources, as the commenter 
recommends. The State funding mechanism is developed at the State--not 
the Federal--level; it would not be appropriate to accept the 
commenter's suggestion. The Departments decline to do so.
    The framework used to determine contributions, however, would be 
the same for all contributors statewide (see Sec.  678.730). It also 
should be noted that, while under the local funding mechanism partner 
programs may contribute through any funds allowed by their authorizing 
statutes, under the State funding mechanism, infrastructure funds must 
come from administrative funds for the majority of partner programs.
Section 678.730 What is the State one-stop infrastructure funding 
mechanism?
    This section--as well as Sec. Sec.  678.735 and 678.740--has 
undergone significant changes from the NPRM in both content and 
structure, although the core principles of the State funding mechanism 
remain the same. Several sections have been added to both break the 
previous section into more concise parts and to provide further clarity 
and structure to the State funding mechanism regulations, including 
Sec.  678.731, which outlines the steps to implement the State 
mechanism. The Departments recognize that the State

[[Page 55911]]

funding mechanism is still complex, and further guidance regarding its 
design and implementation will be released.
    As outlined in Sec.  678.730(b)(1) through (3) of this section, the 
framework for the State funding mechanism consists of three essential 
steps to be performed by the Governor once the State mechanism has been 
triggered by the submission of a notice by the Local WDB that no 
consensus could be reached in the MOU negotiations:
    (1) A budget must be determined for the infrastructure costs for 
one-stop centers in the local area (Sec.  678.735).
    (2) Each partner's proportionate share must be determined 
(Sec. Sec.  678.736 and 678.737).
    (3) The calculation of the required funding caps must be made, 
along with any associated reconsiderations and adjustments to the 
budget or partner's proportionate share (Sec.  678.738).
    These steps are detailed in Sec. Sec.  678.731 and 678.735 through 
678.738 of the regulatory text and the associated discussion sections 
below, which include an example scenario. A detailed discussion of the 
Departments' responses to public comments received on this section 
follows immediately below. Minor changes were made to NPRM Sec.  
678.735(b), which covered instances in which the Governor does not 
determine the infrastructure funding contribution for certain partners, 
and this section was moved to Sec.  678.730(c) of the Final Rule.
    Comments: One commenter remarked that the requirements in this 
section are complex, onerous, and will be costly to administer. 
Specifically, the commenter expressed concern with (1) the annual 
identification of each partner's required share based on proportionate 
use, in the absence of a data collection system to accurately track 
program participants for each partner; (2) collecting and accounting 
for the funds; (3) ongoing administration, including tracking each 
partner's contributions; and (4) periodically reviewing costs charged 
to each partner to ensure they are still in line with proportionate use 
and benefit.
    Departments' Response: As mentioned above, the Departments 
recognize the complexities of the State funding mechanism and have 
taken steps to address this. While there will be a cost associated with 
implementing the State funding mechanism, this cost will be mitigated 
by the provision of all negotiation materials and documents from the 
local area to the Governor, as is required by Sec.  678.735(a).
    As to the collecting and accounting for funds, the Governor never 
actually takes possession of any funds, but instead determines a local 
budget in accordance with Sec.  678.735, as well as partner 
contributions, and directs partners to pay for their share of 
infrastructure costs from the individual partner program's funds, as is 
specified by Sec. Sec.  678.736 and 678.737. Furthermore, the Governor 
will not be managing the local plans; the Local WDB and one-stop 
operator will carry on their duties as under any locally reached 
agreement. The only difference in the State funding mechanism is that 
the Governor determines what the infrastructure funding agreement 
portion of the MOU looks like.
    Comments: One commenter expressed confusion over how the State 
funding mechanism will operate. The commenter stated that in some 
provisions, it seems that the Governor would assemble a single 
statewide fund consisting of local contributions, and then distribute 
them to local areas using the formula established by the State WDB. In 
other provisions, according to the commenter, it appears that the 
Governor would decide on an area-by-area basis what the contributions 
from each partner should be, and collect and allocate those funds to 
that local area only. Another commenter requested additional clarity on 
how this mechanism would work, particularly when there is potential for 
conflict between the partners. A Local WDB requested examples of 
creating and implementing the one-stop funding provisions.
    Departments' Response: The Governor and the State WDB are required 
to develop and issue guidance to be used by the local areas in 
negotiating agreements for the funding of the one-stop delivery system, 
particularly guidance about the roles of one-stop partners and 
approaches to facilitate equitable and efficient cost allocation for 
infrastructure costs. The guidance, as required by Sec.  678.705, also 
would include the development of a State funding mechanism that will be 
used only in the event that a local area fails to reach an agreement. 
As to the collecting and accounting for funds, the Governor never 
actually takes possession of any funds, but they instead determine a 
local budget in accordance with Sec.  678.735, as well as partner 
contributions, and direct partners to pay for their share of 
infrastructure costs from the individual partner program's funds, as is 
stated by Sec. Sec.  678.736 and 678.737.
Section 678.731 What are the steps to determine the amount to be paid 
under the State one-stop infrastructure funding mechanism?
    This section was not in the NPRM; and therefore, the Departments 
did not receive any comments on it directly, but it was created in 
response to comments that said the State funding mechanism was 
confusing and overly complex. This section lists the individual steps 
that must be taken by the Local WDB and the Governor in order to 
implement the State funding mechanism in order to clarify this process.
Section 678.735 How are infrastructure cost budgets for the one-stop 
centers in a local area determined in the State one-stop infrastructure 
funding mechanism?
    In response to comments pointing out the complexity of the State 
funding mechanism regulations, the original Sec.  678.735 (``How are 
partner contributions determined in the State one-stop funding 
mechanism?'') was broken up into four separate sections and 
considerably expanded to provide more assistance in explaining how this 
process will work. Section 678.735 now covers the Governor's 
determination of the one-stop infrastructure budget under the State 
funding mechanism. This includes a requirement for the Local WDB to 
provide the Governor with all pertinent materials from the failed local 
negotiations (Sec.  678.735(a)), and provisions for a Governor adopting 
a budget that was agreed upon at the local level (Sec.  678.735(b)(1) 
and (2)), as well as for situations when the adoption of such a budget 
would not be appropriate or is impossible because one was never locally 
agreed upon (Sec.  678.735(b)(3)). In the case of the later situation, 
the Governor must use the formula created by the State WDB for 
determining the budget, as is described in Sec.  678.745. A detailed 
discussion of the Departments' responses to public comments received on 
proposed Sec.  678.735 follows immediately below.
    In this section of the NPRM preamble, the Departments stated that 
Native American programs must contribute to infrastructure funding as 
required one-stop partners and must negotiate with the Local WDB on 
that contribution amount. Upon further review, the Departments have 
determined that Native American programs are not required to contribute 
to infrastructure funding, but as required one-stop partners they are 
encouraged to contribute. Any agreement regarding the contribution or 
non-contribution to infrastructure funding by Native

[[Page 55912]]

American programs must be recorded in the signed MOU (see WIOA sec. 
121(h)(2)(D)(iv)). The Departments have determined that the regulatory 
text proposed in the NPRM is supported by WIOA and the revised 
statement above properly reflects both the regulatory text and WIOA. As 
such, no change to the regulatory text was necessary to address this 
issue.
    Comments: Many commenters requested clarification on whether the 
1.5 percent cap on funding one-stop infrastructure funds for title II 
is calculated from the State administration funds, or from the total 
adult education grant. The commenters stated that if it is 1.5 percent 
of the total grant, and the funds must be taken from the State 
administration funds within the grant, that would require 30 percent of 
the State administration funds to be used for one-stop infrastructure. 
The commenters asked the Departments to clarify that the cap is 1.5 
percent of State administration funds, not the total grant.
    Departments' Response: The calculation of the percentage of funds 
to be used for infrastructure is from the total State grant award. The 
1.5 percent cap on contributions of funds from the adult education 
program is a statewide cap, as implemented in Sec.  678.738. In 
accordance with Sec.  678.738(b)(1), the Governor must ensure that the 
funds required to be contributed by each partner program in the local 
areas in the State under the State funding mechanism, in aggregate, do 
not exceed the statewide cap for each program. Thus, the amount of 
funds contributed by each AEFLA partner program in the local areas in 
the State, in aggregate, cannot exceed the 1.5 percent statewide cap 
for the AEFLA program, as calculated under Sec.  678.738(a). The funds 
that the local AEFLA partners contribute toward infrastructure costs 
must be paid from funds that are available for local administration or 
from State or other non-Federal resources that are cash, in-kind, or 
third-party contributions.
    Comments: Many of these commenters also stated that it is not 
fiscally practical for programs such as adult education and NFJP that 
cover multiple Local WDB regions to give 1.5 percent to each Local WDB. 
These commenters asked the Departments to clarify that a local program 
only needs to provide a maximum of 1.5 percent of its administration 
funds to infrastructure costs.
    Departments' Response: For the State funding mechanism, 
infrastructure costs for the adult education program authorized by 
title II of WIOA must be paid from funds that are available for local 
administration or from State or other non-Federal resources that are 
cash, in-kind, or third-party contributions. No matter the program, be 
it NFJP, adult education, or other, the percentage cap mentioned in the 
comment does not apply at the local level or to areas under the local 
funding mechanism, but to the aggregate amount of funds for local 
partners of a particular program across the entire State which are in 
local areas operating under the State funding mechanism.
    Comments: A commenter said that because only postsecondary Perkins 
is a mandatory partner, the 1.5 percent cap is the amount used for 
administration of postsecondary programs and activities. Another 
commenter agreed but also said that at the State level there is no 
distinction between funds available for postsecondary programs and 
those available for secondary programs. Another commenter asked whether 
the predetermined amounts are in addition to the ``fair share'' 
allocation formulas in Sec.  678.730.
    Departments' Response: To clarify, because only local postsecondary 
Perkins programs are mandatory one-stop partners, the 1.5 percent cap 
is calculated based upon the amount made available by the State for 
postsecondary level programs and activities under sec. 132 of the 
Perkins Act (distribution of Perkins funds for postsecondary education 
programs) and the amount of funds used by the State under Perkins Act 
sec. 112(a)(3) during the prior year to administer postsecondary level 
programs and activities, as applicable. The Departments have clarified 
the regulatory text to reflect this. As a reminder, the Final Rule 
designates that the Perkins one-stop partner is the eligible recipient 
at the postsecondary level, or a consortium of eligible recipients at 
the postsecondary level in the local area. To meet their obligations to 
pay infrastructure costs, Perkins postsecondary recipients may use 
funds available for local administrative costs under the Perkins Act, 
or draw from other funds made available by the State.
    Comments: Some commenters expressed support for the cap for the VR 
contribution.
    A few commenters stated that the Wagner-Peyser Act and VR program 
do not distinguish between administrative and programmatic funds, 
resulting in Wagner-Peyser Act programs in particular providing a 
disproportionate share of infrastructure costs. The commenters 
recommended the Departments study the allocation percentages no later 
than WIOA reauthorization in 2020.
    Departments' Response: The commenters are correct that the Wagner-
Peyser Act program does not make a distinction between the program 
funds that must be used for the provision of services and those funds 
that must be used for administrative costs.
    WIOA requires partner contributions determined through the State 
funding mechanism to come from administrative sources. The ED's 
Rehabilitation Services Administration (RSA) has revised 34 CFR 
361.5(c)(2)(viii) to clarify that the definition of ``administrative 
costs'' includes those costs associated with the infrastructure of the 
one-stop delivery system, regardless of whether the VR partner 
contribution is determined through the local or State funding mechanism 
(see ED Office of Special Education and Rehabilitative Services Final 
Rule, RIN 1820-AB70, Docket No. ED-2015-OSERS-0001). Historically, 
infrastructure costs were considered administrative based upon the 
statutory and regulatory provisions of the VR program. This 
clarification will ensure one-stop costs are treated in accordance with 
long-standing practices in the VR program and will ensure that similar 
costs are not treated differently based upon which funding mechanism is 
utilized to determine the VR partner infrastructure contribution.
    The Departments want to make clear, however, that each program may 
contribute only an amount that does not exceed its proportionate share 
in accordance with the Uniform Guidance set forth in 2 CFR part 200 and 
an agreed-upon cost allocation methodology developed by the one-stop 
partners. In so doing, neither partner should be paying a 
disproportionate share because it would not be an allowable cost under 
the Uniform Guidance and could not be allocable to the program. The 
question of studying the allocation percentages in advance of the WIOA 
reauthorization is not pertinent to these regulations.
    Comments: A few commenters said that there is an inherent inequity 
among the caps for various programs such that some programs' 
contributions to infrastructure costs, when spread across multiple 
local areas and one-stop centers, would be negligible.
    Departments' Response: The Departments want to clarify that the 
statutory caps on administrative funds apply only when the State 
funding mechanism is triggered due to the inability of one or more 
Local WDBs in a State to reach consensus regarding the funding of local 
one-stop centers. The Departments encourage Local WDBs to develop MOUs 
among each of the one-

[[Page 55913]]

stop partners that sufficiently fund the one-stop delivery system so 
that the State funding mechanism, and hence the funding caps, are not 
needed. Because the administrative caps apply only when the State 
funding mechanism is triggered, partner programs may contribute more 
than the cap amount under the local funding mechanism. The partners' 
shares may be contributed in cash, non-cash, and, in certain 
aforementioned circumstances, in-kind contributions. However, the 
partners may not contribute more than their proportionate share.
    Comments: A commenter remarked that the Departments should provide 
a more clear definition of ``proportionate benefit,'' as some partners 
may claim no benefit from the one-stop delivery system and therefore 
not contribute to infrastructure costs.
    Departments' Response: The allocation of infrastructure costs by 
partner program must be based on methodologies that are driven by 
proportionate use of the one-stop centers and relative benefit 
received, as determined by the Uniform Guidance principles at 2 CFR 
part 200. The benefit is not subjective, as the commenter suggests, but 
rather the benefit is based on a cost allocation methodology that 
determines the proportion of the costs that are allocable to the use of 
the partner program at the one-stop center.
    Comments: Another commenter urged the Departments to recognize that 
the Perkins Act funds systems and programs instead of individuals, so 
the proportionality determination will be difficult to implement 
because there are no data to determine relative benefit on a per-
student basis.
    Departments' Response: The allocation of infrastructure costs by 
partner program must be based on methodologies that are driven by 
proportionate use of the one-stop centers and relative benefit 
received, as determined by the Uniform Guidance principles at 2 CFR 
part 200. When making this determination, the calculation is per-
program, rather than per-individual. The Departments do not conclude 
that the fact that Perkins funds systems and programs, rather than 
individuals, will present an issue for Governors when making this 
determination. In addition, the Governor has discretion to determine a 
reasonable cost allocation methodology provided that the calculation of 
proportionate share is consistent with the Uniform Guidance in 2 CFR 
part 200, particularly that all costs charged to partners, including 
Perkins partners, are in proportion to use of the one-stop center, and 
constitute allowable, reasonable, necessary and allocable costs. No 
change to the regulatory text was made in response to this comment.
    Comments: One commenter hoped the funding obligations for a 
particular program are determined in the context of program resources 
and any in-kind support the one-stop receives from program 
participants.
    Departments' Response: Infrastructure funding contributions are 
either determined using the local or State mechanism. Under each, the 
proportionate share principle is key; the partners should be 
contributing an amount proportionate to their use of the one-stop 
center. Determining this under the local mechanism is completely left 
up to the local partners and Local WDB to work out in the MOU, as long 
as it follows the Federal cost principles of the Uniform Guidance. 
Under the State mechanism, specific language in Sec.  678.737(b)(2) 
requires the Governor to take into consideration program resources in 
determining proportionate share. Under both mechanisms, third-party in-
kind contributions are acceptable contributions to infrastructure 
funding, as is detailed in Sec.  678.720. No change to the regulatory 
text was made in response to this comment.
    Comments: One commenter asserted that there would be many 
administrative difficulties for Wagner-Peyser Act contributions if they 
are required to be calculated on a fiscal year basis, because Wagner-
Peyser Act funds are provided on a program year basis.
    Departments' Response: The Departments want to make clear that 
there is no requirement in WIOA or these final regulations that the 
one-stop delivery system be funded on a fiscal year, as the commenter 
seems to suggest. Many of the required partners are funded on different 
fiscal periods (e.g., some are funded on a program year basis while 
others are funded on a Federal fiscal year basis); so, accounting 
methodologies will have to be employed to resolve such differences.
    Comments: A commenter encouraged the Departments to clarify their 
guidelines for infrastructure cost sharing, including in-kind 
contributions, and the use of administrative vs. program funds.
    Departments' Response: The Departments acknowledge that guidance 
will assist stakeholders in the public workforce system with 
understanding how to negotiate infrastructure cost sharing agreements 
and understand other aspects of funding the one-stop delivery system, 
such as in-kind contributions and the allocation of costs. Some of this 
guidance is currently available in the form of TEGLs on a variety of 
subjects, such as, the ``Operational Guidance to Support the Orderly 
Transition of Workforce Investment Act Participants, Funds, and 
Subrecipient Contracts to the Workforce Innovation and Opportunity 
Act'' (TEGL No. 38-14), ``Workforce Innovation and Opportunity Act 
Transition Authority for Immediate Implementation of Governance 
Provisions'' (TEGL No. 27-14), ``Vision for the One-Stop Delivery 
System under the Workforce Innovation and Opportunity Act (WIOA)'' 
(TEGL No. 4-15), ``Guidance on Services Provided through the Adult and 
Dislocated Worker Program under the Workforce Innovation and 
Opportunity Act (WIOA or Opportunity Act) and Wagner Peyser, as Amended 
by WIOA, and Guidance for the Transition to WIOA Services'' (TEGL No. 
3-15), ``Workforce Innovation and Opportunity Act (WIOA) Youth Program 
Transition'' (TEGL Nos. 23-14 and 8-15), among others. All DOL WIOA 
operating guidance can be located at www.doleta.gov/wioa, and all 
associated ED documents may be found at www2.ed.gov/about/offices/list/osers/rsa/wioa-reauthorization.html and www2.ed.gov/policy/adulted/guid/memoranda.html.
    In addition, cost principle guidance is provided in the Uniform 
Guidance at 2 CFR part 200 on the use of Federal funds, and in the 
existing financial Technical Assistance Guide (TAG) handbooks 
previously issued by DOL, which are still applicable to WIOA (see 
https://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm). 
Nevertheless, the Departments' intention is to continue to provide 
system guidance and technical assistance on all aspects of WIOA 
throughout the life of this authorizing legislation.
    Comments: A commenter said that for the TANF program, the cap of 
1.5 percent of the Federal funds provided to ``carry out that education 
program or employment and training program'' should instead state 
``education program or employment and training activities.'' The 
commenter also urged the Departments to clarify that ``education 
program'' only refers to the TANF funds used to serve adults or teen 
heads of households in needy families, not dependent children in low-
income households.
    Departments' Response: The addition of Sec.  678.738(c)(5) provides 
that for purposes of TANF, the cap on contributions is determined based 
on total Federal TANF funds expended by the State for ``work, 
education, and training activities'' during the prior

[[Page 55914]]

Federal fiscal year as reported by States to HHS on the Quarterly TANF 
Financial Report form (and associated administrative expenditures).
Section 678.736 How does the Governor establish a cost allocation 
methodology used to determine the one-stop partner programs' 
proportionate shares of infrastructure costs under the State one-stop 
infrastructure funding mechanism?
    This new section was created from portions of proposed Sec.  
678.735 in the NPRM in response to comments regarding the complexity of 
the State funding mechanism. The new Sec.  678.736 details how the 
Governor is to establish a cost allocation methodology for determining 
partner programs' proportionate shares of one-stop infrastructure 
costs. The idea that partner programs should make contributions to 
infrastructure costs that are proportionate to the benefit they receive 
from one-stop centers is central to the funding of the one-stop 
delivery system under WIOA. There are a variety of methods that may be 
used--e.g., square footage occupied, number of staff present, number of 
people served--to make the determination of partner programs' 
proportionate share. It is important that the Governor choose a 
methodology that is consistent with the requirements of the Uniform 
Guidance found at 2 CFR part 200.
Section 678.737 How are one-stop partner programs' proportionate shares 
of infrastructure costs determined under the State one-stop 
infrastructure funding mechanism?
    This new section is another created from the NPRM's proposed Sec.  
678.735 in response to comments regarding the complexity of the State 
funding mechanism, and details the steps that should be taken by the 
Governor to determine partner programs' proportionate share of the one-
stop infrastructure costs. In addition to the methodology determined in 
Sec.  678.736, Sec.  678.737(b)(2) states that the Governor must take 
into account a number of factors, including the costs of administration 
of the one-stop delivery system for purposes not related to one-stop 
centers for each partner, costs associated with maintaining the Local 
WDB or information technology systems, as well as the statutory 
requirements for each partner program, all other applicable legal 
requirements, and the partner program's ability to fulfill such 
requirements. The Governor may also take into account the extent to 
which proportionate shares were agreed upon in the failed local 
negotiations, as well as any other elements of the negotiation process 
provided to the Governor per Sec.  678.735(a).
Section 678.738 How are statewide caps on the contributions for one-
stop infrastructure funding determined in the State one-stop 
infrastructure funding mechanism?
    This is the final new section created from proposed Sec.  678.735 
in response to comments regarding the complexity of the State funding 
mechanism, covering the caps that apply to program funding that can be 
designated by the Governor as one-stop infrastructure funding. 
Paragraph (a) of Sec.  678.738 is a step-by-step instruction on how the 
Governor is to calculate the cap for each program. First, the Governor 
determines the maximum potential cap amount in the State by determining 
the amount of Federal funds provided to the State to carry out a one-
stop partner program for the applicable fiscal year multiplied by the 
cap percentage applicable to that program under paragraph (c) of Sec.  
678.738. Second, the Governor selects a factor or factors that 
reasonably indicates the use of one-stop centers in the State (such as 
the total population). The Governor then determines the percentage of 
that factor applicable to the local areas that reached consensus under 
the local funding mechanism (for example, 70 percent of the State 
population resides in those areas). This percentage is applied to the 
amount of the maximum potential cap. The resulting amount (70 percent 
of the maximum potential amount) is then deducted from the maximum 
potential cap amount to produce the applicable cap amount for the local 
areas subject to the State funding mechanism. This approach recognizes 
that the statewide caps only apply to those local areas that do not 
reach consensus, and are not applicable to the local areas that reach 
agreement. Therefore, the actual amounts of infrastructure agreed to in 
those local areas that reach agreement should not affect the cap 
amounts available to those local areas that do not reach agreement. 
Instead, the applicable cap is determined by selection and application 
of a factor or factors that would reflect the relative expected use of 
one-stop centers in the local areas subject to the cap.
    Paragraph (b) details the requirement that, in aggregate, a program 
statewide does not exceed the caps, including only those local partner 
programs in areas under the State funding mechanism (Sec.  
678.738(b)(1)), as well as the steps to be taken in the event that the 
proportionate share of a partner causes a program's aggregate 
infrastructure funding to exceed the cap (Sec.  678.738(b)(1) through 
(4)).
    Paragraph (c) of Sec.  678.738 sets out the specific limitations 
put on infrastructure funding from each program, and Sec.  678.738(d) 
gives instructions on calculating the caps for programs for which it is 
not feasible to determine the amount of Federal funding used by the 
program until the end of the fiscal or programmatic year. While the 
methodologies of these programs somewhat differ in application, the 
methodologies for the CSBG and TANF programs are similar to that used 
for the Perkins program because in each case the State is asked to make 
a determination regarding the amount of administrative costs that are 
related to relevant education, employment, and training activities 
carried out within the respective program.
    The following is an example scenario to determine one partner 
program's cap: Partner Program A (a WIOA formula program) receives 
[x]--in this example, $30 million--to carry out its program in the 
State in the applicable year. There are seven local areas in the State, 
two of which have not been able to reach consensus through the local 
funding mechanism. Because Partner Program A is a WIOA formula program, 
the limitation percentage [p] given in Sec.  678.738(c)(1) is applied 
to the Federal dollars received in total by the program statewide. The 
example below uses three percent for [p], resulting in a maximum 
potential cap of $900,000 [y]. The maximum potential cap [y] is 
calculated by multiplying the program dollars [x] by the percentage 
[p], in this example yielding $900,000.

px = y

.03 x 30,000,000 = 900,000

    The Governor then selects a factor [f] that reasonably indicates 
the use of one-stop centers in the State--such as total population. The 
Governor then determines the percentage of the total population that 
resides in the local areas that have reached agreement. In this 
example, local areas that have reached agreement represent 70 percent 
of the State's total population. Next the Governor applies this 
percentage to the maximum potential cap [y], $900,000, giving the 
amount of these dollars represented by the local areas in agreement 
[z]: $630,000.

fy = z

0.7 x 900,000 = 630,000

    Finally, the Governor subtracts this amount [z], $630,000, from 
maximum potential cap [y], $900,000, giving the amount of the cap to be 
used for those two areas under the State funding mechanism [c], 
$270,000.


[[Page 55915]]


y - z = c

900,000 - 630,000 = 270,000

    This means that the aggregate of the infrastructure contributions 
made by the two local partner programs in local areas operating under 
the State funding mechanism must not exceed $270,000. This calculation 
must then be done for all the other partner programs in those local 
areas.
    For the VR program, WIOA sec. 121(h)(2)(D)(ii)(III) and Sec.  
678.738(c)(3) establishes the limitations for the amount the VR program 
can be required to contribute toward the funding of the one-stop 
delivery system's infrastructure costs. In the first year that the 
State funding mechanism could be applicable--e.g., PY 2017 beginning 
July 1, 2017 (see explanation above)--the VR program may contribute no 
more than 0.75 percent of the State's FY 2016 VR allotment (see sec. 
121(h)(2)(D)(ii)(III)(aa)). If a local area fails to reach an agreement 
for purposes of PY 2018, the VR program cannot be required to pay more 
than one percent of its FY 2017 VR allotment (see sec. 
121(h)(2)(D)(ii)(III)(bb) of WIOA). If a local area fails to reach 
agreement for purposes of PY 2019, the VR program cannot be required to 
contribute more than 1.25 percent of its FY 2018 VR allotment (WIOA 
sec. 121(2)(D)(ii)(III)(cc)). Finally, if a local area fails to reach 
an agreement for PY 2020 and all subsequent years, the VR program 
cannot be required to contribute more than 1.5 percent of its FY 2019 
or, as appropriate, any subsequent year's VR allotment (WIOA sec. 
121(h)(2)(D)(ii)(III)(dd)). In States where there are two VR agencies 
(a general agency and a blind agency), the combined contribution from 
these programs cannot be required to exceed the cap, which is based on 
the total VR allotment to the State. In addition to this specific 
funding limitation, each program, including the VR program, must comply 
with the requirements of the program's authorizing statute, all other 
applicable legal requirements, and the requirements in this subpart 
when contributing funds to cover one-stop center infrastructure costs.
    In determining the maximum amount that a VR program could 
contribute toward the one-stop infrastructure costs under the State 
funding mechanism, the Governor would first have to determine the 
amount of the VR allotment to the State for the applicable year as 
described above. Because the allotment amount to any given State could 
change throughout a Federal fiscal year due to reductions made for 
maintenance of effort deficits, funds returned for reallotment to other 
States, and additional funds received by a State in reallotment, a 
Governor should base the limitations for infrastructure costs on the 
final VR allotment amount for the State for the applicable Federal 
fiscal year (WIOA sec. 110 and 111 of the Rehabilitation Act, as 
amended by title IV of WIOA). The final VR allotment for any Federal 
fiscal year may not be determined until September 30 of that fiscal 
year. Prior to that time and for planning purposes, the Governor can 
use historical data to estimate or project its contributions. However, 
these fluctuations of the VR allotment in any particular Federal fiscal 
year should not affect the VR program's percentage that can be 
attributed to the infrastructure costs under the State funding 
mechanism because the final VR allotment for any year would be known 
well before the implementation of the State funding mechanism for any 
applicable program year.
    It is important to note that WIOA sec. 121(h)(2)(D)(ii)(III) refers 
to a program year (July 1 through June 30), not a Federal fiscal year 
(October 1 through September 30). However, because the VR program funds 
are provided to a State on a Federal fiscal year basis, the Departments 
have interpreted ``program year'' in this context, for purposes of 
determining the VR program's funding limitations, as meaning the funds 
provided to the State to operate the VR program in a Federal fiscal 
year.
    As this section did not exist in the NPRM, the Departments did not 
receive any comments that directly refer to it, but did receive 
comments referring to some of the contributing material, which are 
discussed under Sec.  678.635 of the Final Rule part 678 discussion.
Section 678.740 What funds are used to pay for infrastructure costs in 
the State one-stop infrastructure funding mechanism?
    This section describes the funding sources that are used under the 
State funding mechanism by WIOA title I programs, adult education 
programs, the Carl D. Perkins program, and other WIOA authorized 
programs. Changes were made in response to comments to Sec.  
678.740(d), which addresses Carl D. Perkins program infrastructure 
funding sources. Because the State is no longer the default Perkins 
program partner, the Departments' modified this section to state that 
Perkins postsecondary recipient one-stop partners may use funds 
available for administrative expenses to pay infrastructure costs and 
that these funds may be supplemented by any additional funds the State 
chooses to make available. A detailed discussion of the Departments' 
responses to public comments received on this section follows 
immediately below.
    Comments: A commenter expressed concern that Sec.  678.740(d) 
implies an incentive for local areas to fail to develop a local MOU, as 
defaulting to the State funding mechanism could result in local areas 
gaining access to State administrative funds. The commenter suggested 
that the Departments should revise this paragraph to clarify that this 
is not the case, particularly with regard to Perkins funds, and also 
revise other paragraphs in the State funding mechanism sections to 
emphasize local contributions.
    Departments' Response: As stated above, Sec.  678.740(d) has been 
reworded, which has taken the emphasis away from State funds and put 
more on local entities funding infrastructure costs. No further change 
to the regulatory text is being made in response to this comment.
    Comments: Another commenter made the opposite argument, saying that 
because this section is about a State funding mechanism, State funds 
should be used. The commenter also said that in cases where the local 
Perkins partner is entering into an MOU in the local funding mechanism 
option, the regulations should clarify that no local recipient is 
required to contribute more than the cap percentage (e.g., 1.5 percent) 
in local administrative funds if other partners in that local area are 
unable to negotiate an MOU and the State process is used for those 
partners.
    Departments' Response: As the State is no longer the default 
Perkins partner, the suggested course of action no longer applies to 
the situation. No change to the regulatory text was made in response to 
this comment.
    Comments: A commenter said that Combined State Plan partner 
programs such as TANF would be limited to the administrative funds at 
their disposal. Another commenter said that as long as the costs of 
Senior Community Service Employment Program (SCSEP) funds spent on 
participants and enrollees assigned to the one-stop is counted toward 
the cost allocation, the regulations will minimize the impact on this 
program.
    Departments' Response: The TANF program is not a Combined State 
Plan partner program in the one-stop delivery system, but rather it is 
a required partner pursuant to WIOA sec. 121(b) unless exempted per 
sec. 121(b)(1)(C). The SCSEP program is a required partner and must 
contribute to the infrastructure costs of the local one-stop delivery 
system. The allocation

[[Page 55916]]

methodology agreed upon by the partner programs or the Governor may 
include participant counts served by the one-stop center. No change to 
the regulatory text was made in response to this comment.
Section 678.745 What factors does the State Workforce Development Board 
use to develop the formula described in Workforce Innovation and 
Opportunity Act sec. 121(h)(3)(B), which is used by the Governor to 
determine the appropriate one-stop infrastructure budget for each local 
area operating under the State infrastructure funding mechanism, if no 
reasonably implementable locally negotiated budget exists?
    This section also underwent significant changes in response to 
public comments received that stated that the State WDB formula 
provisions were confusing, overly complicated, and could violate 
authorizing statutes. In order to reduce the confusion centered around 
the formula, step-by-step instructions are provided on how to apply the 
formula when a locally negotiated budget does not exist. The new 
provisions only require the use of the formula in specific situations 
regarding the determination of the one-stop budget by the Governor 
(i.e., when the Governor cannot, or has chosen not to, accept a locally 
agreed upon one-stop budget). The formula is to identify factors and 
the associated weights of these factors that the Governor must consider 
when determining the one-stop budget under these situations. Included 
in these factors are those statutorily required by WIOA and any other 
factors related to the operation of the one-stop delivery system that 
the State WDB sees as appropriate. A detailed discussion of the 
Departments' responses to public comments received on this section 
follows immediately below.
    Comments: A commenter asked how ``a redirection of Federal funds 
from one program to another will not negatively impact the calculation 
of the Perkins Act's `maintenance of effort' provisions or Federal 
`supplement not supplant' provisions.'' The commenter said that these 
provisions would likely be violated if any Perkins State administrative 
funds are redirected to one-stop infrastructure.
    Departments' Response: Because of changes to this provision, the 
commenter's concerns regarding Perkins State administrative funds are 
no longer applicable. Additionally, partner contributions must not 
exceed the partner's proportionate share.
    Comments: Likewise, the commenter stated that the Departments need 
to ensure that the reallocation formula in this part ensures that local 
Perkins funds return to the local area from which they were derived in 
order to adhere to the within-State allocation formula of the Perkins 
Act, sec. 132(a)(2).
    Departments' Response: Again, because of the changes to the formula 
provision, that is that the Governor will never actually collect and 
re-allocate funds, this commenter's concerns are no longer applicable.
    Comments: A commenter said that Sec.  678.745 should include a 
descriptor of the type of one-stop center (e.g., comprehensive, 
affiliate, satellite) in the funding formula policy.
    Departments' Response: The formula applies to all one-stop center 
and affiliated sites under the State mechanism where the Governor has 
not accepted a locally agreed upon budget. Therefore, it is not 
necessary to specify the type of one-stop center.
Section 678.755 What are the required elements regarding infrastructure 
funding that must be included in the one-stop Memorandum of 
Understanding?
    Comments: A couple of commenters urged the Departments to encourage 
shared staffing for similar partner positions (e.g., business 
development). These commenters said that encouraging partnerships 
beyond infrastructure could avoid duplication of efforts, particularly 
with respond to employer services.
    Departments' Response: The Departments encourage the partners to 
consider all available means of integration at the one-stop centers, 
thereby improving the effectiveness and efficiency of the partner 
programs in the one-stop delivery system. There is nothing in WIOA or 
these final regulations that prohibit partner programs in sharing 
certain key staff positions. However, the Departments caution that such 
sharing of staff would necessitate the retention of adequate records 
supporting the allocation of personnel costs between the programs, 
which also must be consistent with the Uniform Guidance. Furthermore, 
the Departments reiterate that the sharing of staff will not be 
considered an infrastructure cost, but it may be paid with other funds 
in accordance with WIOA sec. 121(i).
Section 678.760 How do one-stop partners jointly fund other shared 
costs under the Memorandum of Understanding?
    The Departments added paragraph (c) to explain that contributions 
to the additional costs related to operation of the one-stop delivery 
system may be cash, non-cash, or third-party in-kind contributions. 
This addition is consistent with the changes made in Sec.  678.720(c). 
As a result the remaining paragraphs were renumbered.
    Comments: Multiple commenters expressed confusion about whether the 
1.5 percent spending cap for infrastructure costs for the title II 
program includes the joint contribution to funding the costs of career 
services. One commenter recommended that it include the cost of career 
services so that more funds are available to provide AEFLA services.
    Departments' Response: Contribution to shared cost including career 
services are separate from contributions for infrastructure cost and 
thus the 1.5 percent cap on contributions does not apply to shared 
cost.
    Comments: Two commenters requested a definition of ``additional 
costs relating to the operation of the one-stop delivery system.'' 
Another commenter asked whether this phrase includes the cost for the 
one-stop operator.
    Departments' Response: The Departments will not define additional 
costs. By allowing States to define additional costs, they will be in a 
better position of assisting their local areas in meeting the demand 
and challenges of operating a one-stop delivery system. No change to 
the regulatory text was made in response to these comments.
7. One-Stop Certification (20 CFR Part 678, Subpart F [678.800]; 34 CFR 
361.800; 34 CFR 463.800)
    Subpart F of part 678 implements the requirements in WIOA sec. 
121(g) that the Local WDB certify the one-stop center every 3 years. 
The certification process is important to setting a minimum level of 
quality and consistency of services in one-stop centers across a State. 
The certification criteria allow States to set standard expectations 
for customer-focused seamless services from a network of employment, 
training, and related services that help individuals overcome barriers 
to becoming and staying employed.
    The one major change to this section from what was published in the 
NPRM was made in response to comments regarding the use of the 
provision of services beyond regular business hours as a certification 
factor for one-stop centers. While the Departments have retained this 
as a certification criterion, the language has been changed at Sec.  
678.800(b) to make the consideration of this factor conditional on the 
Local

[[Page 55917]]

WDB determining that there is a need in the local area for such an 
extension of service hours. The Departments also would like to assure 
readers that it is highly unlikely that a one-stop center's 
certification would hinge on such a factor, as there are many criteria 
that must be taken into account in the certification process.
Section 678.800 How are one-stop centers and one-stop delivery systems 
certified for effectiveness, physical and programmatic accessibility, 
and continuous improvement?
General Comments About One-Stop Certification
    Comments: Several commenters addressed the proposed timelines for 
one-stop certification and updates to the evaluation criteria. A 
commenter stated that the proposed timelines could conflict or overlap. 
A few commenters suggested that all reviews should be on a 4-year 
cycle. A few State and Local WDBs recommended that the certification 
criteria be updated every 3 years to match the certification process. A 
few commenters asserted that it is impractical for all Local WDBs to 
update the local additional certification criteria every 2 years as 
part of the local plan update process. Another commenter suggested that 
both timelines should be event-dependent.
    Departments' Response: The Departments have made no substantive 
changes to this section other than the changes to Sec.  678.800(a)(1) 
and (b) discussed below. The timelines related to one-stop 
certification are statutory: Certification every 3 years from WIOA sec. 
121(g)(1) and updated criteria every 2 years from WIOA sec. 121(g)(5). 
However, the regulations require certification ``at least'' every 3 
years, and Local WDBs may certify more often if it helps align 
timelines with other efforts. No change to the regulatory text was made 
in response to this comment.
    Comments: One commenter asserted that giving Local WDBs the 
authority to certify one-stop centers creates a conflict of interest. 
Another commenter stated that Local WDBs that are one-stop operators 
are currently permitted to certify themselves.
    Departments' Response: The Departments agree that Local WDBs should 
not certify themselves but have not made changes to this section as 
Sec.  678.800(a)(3) already stated that State WDBs must certify one-
stop centers when the Local WDB is the one-stop operator.
    Comments: A commenter suggested that the Departments should provide 
guidance to State WDBs on developing objective criteria and training or 
assistance the State WDBs can share with Local WDBs on implementing 
certification procedures.
    Departments' Response: On August 13, 2015, the Departments issued a 
joint vision for the implementation of American Job Centers as TEGL No. 
04-15, and have released other technical assistance materials since 
then as well. All of these guidance documents and other pieces of 
guidance relating to WIOA may be found at https://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm, www2.ed.gov/about/offices/list/osers/rsa/wioa-reauthorization.html, and www2.ed.gov/policy/adulted/guid/memoranda.html. The Departments' staffs continue to remain 
available for technical assistance.
    Comments: A commenter stated that the State Plan should define the 
certification process for the one-stop delivery system.
    Departments' Response: The State Plan may include the one-stop 
certification process if a State wishes to include it, but the 
Departments do not consider it appropriate or necessary to require such 
an inclusion in the State Plan. No change to the regulatory text was 
made in response to this comment.
    Comments: Another commenter recommended that certification criteria 
focus on system performance instead of program performance; effective 
communication and data sharing across systems while safeguarding 
information; and availability of diverse and necessary resources at 
one-stops.
    Departments' Response: States that wish to focus on certain aspects 
of one-stop center quality can establish criteria for those aspects, 
but the statutorily required criteria at WIOA sec. 121(g)(2) must be 
included. The State WDB-established criteria create a baseline of 
consistency across the State, and States can establish policies about 
processes and methods. No change to the regulatory text was made in 
response to this comment.
    Comments: A few commenters suggested that the State WDB should 
consult with Local WDBs when updating certification criteria.
    Departments' Response: The Departments agree and have revised Sec.  
678.800(a)(1) to clarify that the State WDB must consult with chief 
elected officials and Local WDBs when it reviews and updates criteria, 
not only when it establishes criteria.
    Comments: A few commenters requested flexibility for States to 
determine the certification method, while other commenters stated that 
all Local WDBs should use the same process to certify one-stops.
    Departments' Response: While all Local WDBs within a State must use 
the State required certification criteria, WIOA sec. 121(g)(3) allows 
Local WDBs to establish additional criteria to be used in that local 
area as well. The Departments have concluded that Local WDBs should be 
able to choose the process for certifying one-stop centers that works 
best for each local area. No change to the regulatory text was made in 
response to these comments.
    Comments: A commenter asked whether the State WDB has discretion to 
determine the method of certification, and whether the State WDB can 
delegate the certification process.
    Departments' Response: The State WDB does not certify, but it must 
set the certification criteria. The Departments have determined that 
this responsibility is an important strategy to establish quality one-
stop centers and have not incorporated the suggestion to allow the 
State WDB to delegate it. The State WDB must approve the final 
certification criteria.
    Comments: Another commenter asked whether the intent is to certify 
each one-stop center or the local area one-stop delivery system.
    Departments' Response: WIOA sec. 121(g)(4) and this section of the 
regulation state that the Local WDB must certify one-stop centers, not 
the one-stop delivery system. Although the same criteria used to make 
this certification are to be used in evaluating a local area's one-stop 
delivery system, there is no certification process for the one-stop 
delivery systems themselves, only the one-stop centers that together 
make up the one-stop delivery system.
    Comments: A few commenters asked what would happen if the one-stop 
center does not meet the evaluation criteria or get certified.
    Departments' Response: Paragraph (d) of Sec.  678.800 and WIOA sec. 
121(g)(4) state that local areas that do not certify their one-stop 
centers are not eligible to use infrastructure funding under the State 
infrastructure option until such certification is complete. Local WDBs 
can consider ramifications for failing one-stop certifications in their 
one-stop operator contracts.
    Comments: One commenter asked whether technical assistance will be 
provided to one-stop centers that fail certification.
    Departments' Response: States may provide technical assistance to 
one-stop centers that fail certification or to any other one-stop 
center that may require or ask for it.

[[Page 55918]]

Evaluations of Effectiveness
    Comments: Several commenters expressed concern regarding the 
requirement to include the provision of service outside of regular 
business hours as a factor to be considered when evaluating one-stop 
center effectiveness, stating that many one-stop centers may not be 
able to provide such services and that an inability to do so should not 
count against them.
    Departments' Response: The Departments considered these concerns, 
and have determined that this should still remain one of the many 
factors to be considered in evaluating one-stop center effectiveness. 
Paragraph (b) of Sec.  678.800, however, was revised to include that 
the consideration of this factor is conditional on whether the 
applicable Local WDB has determined there is a workforce need for the 
provision of service outside of regular business hours. The Departments 
stress that this is one of many factors to be taken into account when 
evaluating effectiveness, and that it is very unlikely that a one-stop 
center will fail to qualify for certification solely for not providing 
services outside of regular business hours.
    Comments: Several commenters remarked that the NPRM's inclusion of 
customer satisfaction in the evaluation of a one-stop center's 
effectiveness goes beyond what is included in WIOA. The commenters 
stated that, while this is an important measure, it is not necessarily 
a measure of effectiveness, and it is also subjective.
    Departments' Response: This provision is supported by the statutory 
requirement to consider how well a one-stop center meets the workforce 
development needs of local employers and participants in WIOA sec. 
121(g)(2)(B)(iii). The Departments have determined that reviewing 
customer satisfaction is an important part of knowing whether services 
to employers and participants are effective and meet their needs, and 
will aid one-stop operators, Local WDBs, and State WDBs in the 
continued improvement of the one-stop delivery system required by WIOA. 
For this reason, the Departments have not removed this requirement from 
the regulations. No change to the regulatory text was made in response 
to these comments.
    Comments: Another commenter stated that Local WDBs could assess 
customer satisfaction through surveys centered on the one-stop center's 
responsiveness to the needs of employers and customers, the 
availability and quality of workshops, and the repeat usage over a 
period of time.
    Departments' Response: The regulations are not specific on how 
customer satisfaction must be measured and the Departments have 
concluded that State WDBs and Local WDBs can determine how best to 
include it as a component of a one-stop certification criteria.
    Comments: Two commenters said that the proposed performance 
accountability metrics already address customer satisfaction.
    Departments' Response: To clarify, the proposed accountability 
metrics concerning customer satisfaction and the requirements in Sec.  
678.800 related to customer satisfaction are referring to the same 
mechanism. This section gives the requirement to review and apply the 
customer satisfaction data to measure the effectiveness of one-stop 
centers; the actual measure, its technical aspects, and the timing of 
the data collection are outlined in Sec.  677.160 (see Joint WIOA Final 
Rule).
    Comments: A few commenters asserted that the most efficient and 
effective systems are where the Local WDB is the one-stop operator.
    Departments' Response: The Departments have determined that regular 
measurements of effectiveness and efficiency will assist States in 
determining the most effective one-stop operator, including whether it 
is effective and efficient for a Local WDB to be the operator.
Evaluations of Accessibility
    Comments: Several commenters expressed support for the Departments' 
dedication to ensuring accessibility to individuals with disabilities. 
A few commenters also stated that the requirement for one-stop centers 
to be programmatically and physically accessible should be reiterated 
in this part.
    Departments' Response: The Departments agree and have updated Sec.  
678.800(e) to clarify that all one-stop centers must be 
programmatically, as well as physically, accessible.
    Comments: A few commenters also suggested that the language on 
programs being in integrated settings should be stronger and use the 
phrase ``in an integrated setting'' rather than ``in the most 
integrated setting appropriate.'' The commenters also stated that 
programs should be in community-based settings.
    Departments' Response: The Departments have retained the phrase 
``in the most integrated setting appropriate'' to describe our 
expectations for integrated and community-based settings in order to 
remain consistent with WIOA sec. 188 and the Americans with 
Disabilities Act.
    Comments: One commenter stated that the Departments should provide 
full accessibility and be in full compliance with civil rights laws, 
the Americans with Disabilities Act, and secs. 504 and 508 of the 
Rehabilitation Act. The commenter further stated that one-stop 
operators should have additional training on the importance of full 
accessibility to individuals with disabilities for all services.
    Departments' Response: The Departments are fully committed to 
accessibility and adhering to civil rights laws. The regulation 
reiterates the requirement for full accessibility in Sec. Sec.  
678.800(e), 678.305, and 678.310. The Departments have provided, and 
will continue to provide, technical assistance on accessibility. No 
change to the regulatory text was made in response to this comment.
    Comments: Another commenter stated that there should be 
transparency in reporting States' performance in physical and 
programmatic access.
    Departments' Response: The DOL currently is conducting a study of 
accessibility in one-stop centers, which will be published and made 
available to the public when completed in the summer of 2016. Potential 
violations of civil rights laws, including the inadequate provision of 
programmatic and physical accessibility, are investigated by DOL's 
Civil Rights Center, which may share major findings with the public. 
States also can improve transparency by making certification results 
public.
    Comments: One commenter expressed concern that accessibility 
evaluation criteria and guidelines will be determined by the State and 
Local WDBs. The commenter recommended the Departments establish general 
guidelines for minimum standards, targets, and metrics.
    Departments' Response: The regulations keep the determination of 
accessibility criteria as a responsibility of the State and Local WDBs, 
as required by statute, but such criteria must meet, at a minimum, the 
legal standards established by the regulations implementing WIOA sec. 
188, set forth at 29 CFR part 38. DOL has issued best practices in how 
recipients can comply with accessibility laws in a guide shared in 
Training and Employment Notice No. 01-15, ``Promising Practices in 
Achieving Universal Access and Equal Opportunity: A Section 188 
Disability Reference Guide.''

[[Page 55919]]

Evaluations of Continuous Improvement
    Comments: A commenter expressed concern about the use of 
performance outcome data in evaluations of continuous improvement 
because it may not be timely enough to identify and resolve issues.
    Departments' Response: States have the flexibility to add 
additional data to the criteria that are more timely if they wish, but 
the Departments have determined that no additional data other than that 
which is already included in the regulations should be required.
8. Common Identifier (20 CFR part 678, subpart G [678.900]; 34 CFR 
361.900; 34 CFR 463.900)
    The regulations in 20 CFR part 678, subpart G and 34 CFR 361.900 
and 463.900 promote increased public identification of the one-stop 
delivery system through use of a common identifier across the nation, 
consistent with WIOA sec. 121(e)(4). Section 678.900 designates the 
name ``American Job Center'' as the common identifier for the one-stop 
delivery system. This designation was made by the Secretaries after 
consulting with the heads of other appropriate departments and 
agencies, representatives of State WDBs and Local WDBs, and other 
stakeholders in the one-stop delivery system through various means. 
This was a process started under WIA, and many one-stop centers are 
already incorporating use of either the ``American Job Center'' title 
or the associated tag line ``proud partner of the American Job Center 
network'' into their branding.
    The major changes in this section in response to comments relate to 
the date by which rebranding of the one-stop centers is to be complete. 
The date by which one-stop centers are required to rebrand all of their 
primary electronic resources, such as Web sites has been changed to [90 
days from the publication of this Final Rule] instead of July 1, 2016, 
which will provide a reasonable time to effectuate this provision. 
Additionally, any new products and materials printed, purchased or 
created after [90 days from the publication of this Final Rule] must 
comply with the new branding requirements. However the Departments have 
determined that extending the deadline to July 1, 2017 for other 
branding, including activities, physical products and signage, would 
allow an appropriate amount of time for the rebranding to be completed. 
Additionally, the Departments will not object if the one-stop centers 
continue to use materials not using the ``American Job Center'' 
branding which are created before [90 days from the publication of this 
Final Rule] until those supplies are exhausted.
Section 678.900 What is the common identifier to be used by each one-
stop delivery system?
    Comments: Many commenters expressed opposition to the use of 
American Job Center as a common identifier. Several commenters said 
that they already have a common brand used in their State, and it would 
be confusing to the public to discontinue the use of an existing brand 
and begin utilizing new logos and branding. A few Local WDBs asked that 
States have flexibility in branding, such as by utilizing ``American 
Job Centers of [State name].'' Another commenter suggested that centers 
should be permitted to utilize their program name, followed by ``a 
partner in America's Workforce System.'' One commenter requested a 
waiver for States that already have a widely known brand. Another Local 
WDB commented that the Departments should allow States with approved 
names under WIA be able to continue to use those names.
    Departments' Response: The Departments are not requiring that any 
State or local area discontinue use of their existing name or brand. 
The Departments recognize that many States and local areas use their 
own brand, some of which are well known. The requirement in Sec.  
678.900(c) to use either the ``American Job Center'' identifier or ``a 
proud partner of the American Job Center network'' as a tag line 
already allows the usage of other identifiers or brands or logos. One-
stop centers that want to use their existing name followed by a tagline 
may use their name along with ``a proud partner of the American Job 
Center network;'' the use of ``a partner in America's Workforce 
System'' alone would not meet the requirement. The Departments have 
concluded that this section adequately states that the use of 
additional identifiers is permitted, and what the tagline requirement 
is, and so have not made changes in response to these comments. States 
that wish to use ``American Job Center of [State name]'' would be 
including the American Job Center identifier, and thus in compliance 
with this regulation. While the Departments did not make a change to 
list different permutations that would be allowed, the Departments will 
issue guidance on the usage of the identifier.
    Comments: Some commenters suggested that the identifier use 
``career'' instead of ``jobs.'' Some commenters also stated that 
American Job Center implies that only citizens can be served. One 
commenter asked what ``American'' means in this context. Another 
commenter stated that American Job Center implies that only one 
service--job placement assistance--is available, and does not address 
the other services available at one-stop centers.
    Departments' Response: The Departments considered the concerns 
about ``Job'' and ``American'' shared by commenters but have maintained 
the name American Job Center. The Departments see value in both ``Job'' 
for its simplicity, directness, and description of the end goal of 
virtually all services; the Departments also see value in ``Career'' 
for its emphasis on growth. In deciding between the two, the 
Departments have chosen to continue to use ``job'' because many States 
and local areas have already adopted ``American Job Center'' or have 
incorporated the ``proud partner of the American Job Center network'' 
tag line into their established branding. Additionally, ``American'' is 
not meant to imply that only citizens can be served, but used to 
communicate that the centers are part of a nation-wide system.
    Comments: A few commenters asked the Departments what the logo is 
for the common identifier. Some commenters asked that the new logo or 
icon be something simple that can be added to existing signage without 
changing the names of existing centers. Some commenters stated that 
they needed clearer expectations to implement the common identifier.
    One commenter expressed support for the proposed common identifier. 
A few commenters expressed support for the flexibility provided by the 
use of ``a proud partner of the American Job Center network'' alongside 
existing brands. Another commenter supported the use of a common 
identifier, but cautioned that improper use of the logo, brand, or 
tagline could dilute the brand or mislead the public. This commenter 
stated that American Job Center should be utilized only for 
comprehensive one-stop centers, with ``A proud partner of the American 
Job Center Network'' permitted to be used at other sites. The commenter 
also recommended that the Departments trademark the common identifier.
    Departments' Response: The logo for American Job Center is 
available at www.dol.gov/ajc and its use, implementation expectations, 
and suggestions for adoption at various price points will be released 
in upcoming guidance and technical assistance. In order to allow job 
seekers and employers to find all the locations that

[[Page 55920]]

could assist them, the Departments are continuing to allow all one-stop 
centers, comprehensive and affiliate, to use ``American Job Center'' or 
the tagline ``a proud partner of the American Job Center network.'' The 
DOL has trademarked the identifier American Job Center, as a commenter 
suggested.
    Comments: A few commenters asserted that this will be an expensive 
unfunded mandate for most States, and requested that the Departments 
provide funding to States to help pay for the cost to print new 
materials and change signage, or else make this requirement optional. 
One commenter also asked that the Departments phase in the change more 
slowly. Other commenters urged the Departments to allow one-stop 
centers to phase in the change as they print new materials.
    A few commenters requested clarification regarding the deadline for 
implementation. They stated that the NPRM regulatory text indicated 
one-stop centers must utilize the new identifier by July 1, 2016, but 
the NPRM preamble stated that the identifier be in place during PY 
2016, or by June 30, 2017. The commenter requested the later date, 
reasoning that changing signage and materials by July 1, 2016 would be 
cost prohibitive.
    Departments' Response: The Departments recognize that there is a 
cost associated with adopting the common identifier, and has extended 
the timeframe in which one-stop centers must include the identifier, to 
require that one-stop centers use it on Web sites and online materials 
by [90 days from the publication of this Final Rule], on new products 
and materials purchased or created after July 1, 2016 and on all other 
activities, materials, buildings, and signs by July 1, 2017. These 
changes are reflected in Sec.  678.900(b) and (c). Implementing the 
identifier is an allowable use of WIOA title I funds. The Departments 
will release suggestions for adopting the identifier at various price 
points in upcoming guidance and technical assistance.
    While one-stop centers will be expected to provide the ``American 
Job Center'' or ``proud partner of the American Job Center network'' 
branding on any newly printed, purchased or created materials after [90 
days from the publication of this Final Rule], this does not require 
one-stop centers to discard previously obtained materials. The 
Departments will not object to use of any materials lacking the 
branding that were printed, purchased, or created before this initial 
deadline until supplies are exhausted, regardless of the final 
implementation date of July 1, 2017. Paragraphs (b) and (c) of Sec.  
678.900 have been modified to reflect the revision of the date when 
this policy goes into effect.
    In addition to the regulatory text changes discussed above, various 
non-substantive changes have been made for purposes of correcting 
typographical errors and improving clarity that have not been necessary 
to note elsewhere.

V. Rulemaking Analyses and Notices

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

    Executive Order (E.O.) 12866 directs agencies, in deciding whether 
and how to regulate, to assess all costs and benefits of available 
regulatory alternatives, including the alternative of not regulating. 
E.O. 13563 is supplemental to and reaffirms E.O. 12866. It emphasizes 
the importance of quantifying current and future costs and benefits; 
directs that regulations be developed with public participation; and, 
where relevant and feasible, directs that regulatory approaches be 
considered that reduce burdens, harmonize rules across agencies, and 
maintain flexibility and freedom of choice for the public. Costs and 
benefits should include both quantifiable measures and qualitative 
assessments of possible impacts that are difficult to quantify. If 
regulation is necessary, agencies should select regulatory approaches 
that maximize net benefits. The OMB determines whether a regulatory 
action is significant and, therefore, is subject to review.
    Section 3(f) of E.O. 12866 defines a ``significant regulatory 
action'' as any action that is likely to result in a rule that could:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising from legal mandates, 
the President's priorities, or the principles set forth in E.O. 12866.
    The Final Rule is a significant regulatory action under sec. 3(f) 
of E.O. 12866. The economic effects of the costs that will result from 
the changes in this Final Rule are economically significant.
Outline of the Analysis
    Section V.A.1 describes the need for the Joint WIOA Final Rule and 
section V.A.2 describes the alternatives that were considered in this 
rule's NPRM. Section V.A.3 summarizes the public comments received 
related to the NPRM, and comments received related to the VR program-
specific requirements set forth in the NPRM on ``State Vocational 
Rehabilitation Services Program; State Supported Employment Services 
Program; Limitations on Use of Subminimum Wage.'' Section V.A.3 also 
provides the Departments' responses to the comments. Section V.A.4 
describes the process used to estimate the costs of this Final Rule and 
the general inputs used, such as wages and number of affected entities. 
Section V.A.5 explains updates made to the assumptions and inputs used 
in the analysis of this Final Rule relative to the assumptions and 
inputs used in the analysis of the NPRM. Section V.A.5 also describes 
how these changes affected the costs of this Final Rule. Section V.A.6 
describes how the provisions of this Final Rule will result in 
quantifiable costs and presents the calculations the Departments used 
to estimate them. Finally, section V.A.7 summarizes the estimated 
first-year and 10-year total costs and describes the benefits and 
transfers that may result from this Final Rule.
Summary of the Analysis
    The DOL and ED, hereafter collectively referred to as ``the 
Departments,'' provide the following summary of the Regulatory Impact 
Analysis (RIA):
    (1) This Final Rule is a ``significant regulatory action'' under 
sec. 3(f)(4) of E.O. 12866 and, accordingly, OMB has reviewed the Final 
Rule.
    (2) This Final Rule is not expected to have a significant cost 
impact on a substantial number of small entities.
    The Departments estimate that this Final Rule will generate 
benefits (including some that take the form of cost reductions). 
Because of the nature of these benefits, the Departments are not able 
to quantify them, but rather describe them qualitatively in the 
``Regulatory Benefits'' section. As shown in Exhibit 1, over the 10-
year period, this Final Rule is estimated to have an undiscounted total 
cost of $626.8 million. This is equivalent to an estimated annual cost 
of $62.7 million. With 7-percent discounting over the 10-year period, 
the Final Rule will result in an estimated total cost of $495.2 
million. This is equivalent to an

[[Page 55921]]

estimated annualized cost of $70.5 million (with 7-percent 
discounting).

  Exhibit 1--Estimated Monetized Costs of the Departments of Labor and
               Education Final Rule (2015 dollars) ($ mil)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Undiscounted 10-Year Total.....................................   $626.8
10-Year Total with 3% Discounting..............................    558.9
10-Year Total with 7% Discounting..............................    495.2
10-Year Average................................................     62.7
Annualized with 3% Discounting.................................     65.5
Annualized with 7% Discounting.................................     70.5
------------------------------------------------------------------------

    The largest contributor to the total cost of the rule is the 
implementation of performance accountability requirements contained in 
sec. 116 of WIOA. The largest of these costs include the development 
and updating of State performance accountability systems, followed by 
performance reporting requirements, and adjusting levels of 
performance. See section V.A.6 (Subject-by-Subject Cost-Benefit 
Analysis) for a detailed explanation.
    The Departments were unable to quantify several important benefits 
to society due to data limitations and lack of existing data or 
evaluation findings. We qualitatively describe the benefits related to 
increased alignment of training with local labor markets using 
economic, education, and workforce data. In addition, based on a review 
of empirical studies (primarily studies published in peer-reviewed 
academic publications and studies we sponsored), we identified the 
following societal benefits: (1) Training services increase job 
placement rates; (2) participants in occupational training experience 
higher reemployment rates; (3) training is associated with higher 
earnings; and (4) State performance accountability measures, combined 
with the Board membership provision requiring employer/business 
representation, can be expected to improve the quality of the training 
and, ultimately, the number and caliber of job placements. We 
identified several channels through which these benefits might be 
achieved, including: (1) Better information about training providers 
enables workers to make more informed choices about programs to pursue; 
and (2) enhanced services for dislocated workers, self-employed 
individuals, and workers with disabilities will lead to the benefits 
discussed above.
    In addition, the Departments qualitatively describe an ancillary 
benefit to the DOL-administered core programs that is expected to 
result from the integration of DOL program participant records. While 
the integration of these participant records is not required by WIOA or 
these implementing regulations, it is highly encouraged. For a detailed 
description of the regulatory and ancillary benefits of the Final Rule, 
see section V.A.7 (Summary of Analysis).
1. Need for Regulation
    Section 503(f)(1) of WIOA requires publication of implementing 
regulations. These regulations will ensure that States implement 
requirements under WIOA efficiently and effectively. In addition, such 
regulations will provide Congress and others with uniform information 
necessary to evaluate the outcomes of WIOA.
2. Alternatives to the Required Publication of Regulations
    OMB Circular A-4, which outlines best practices in regulatory 
analysis, directs agencies to analyze alternatives outside the scope of 
their current legal authority if such alternatives best satisfy the 
philosophy and principles of E.O. 12866. Although WIOA provides little 
regulatory discretion, the Departments assessed, to the extent 
feasible, alternatives to the regulations.
    As described in the NPRM, the Departments considered alternatives 
to accomplish the objectives of WIOA, which also would minimize any 
significant economic impact on small entities. This analysis considered 
the extent to which WIOA's prescriptive language presented regulatory 
options that also would allow for achieving WIOA's programmatic goals. 
In many instances, we have reiterated WIOA's language in the regulatory 
text, and have expanded some language to provide clarification and 
guidance. The additional regulatory guidance should result in more 
efficient program administration by reducing ambiguities caused by 
unclear statutory language.
    In addition, the Departments considered the issuance of sub-
regulatory guidance in lieu of additional regulations. This policy 
option has two primary benefits to the regulated community. First, sub-
regulatory guidance will be issued following publication of the Final 
Rule, thereby allowing States and local areas additional time to adhere 
to additional guidance. Second, sub-regulatory guidance is more 
flexible, allowing for faster modifications and any subsequent 
issuances, as necessary.
    The Departments considered three possible alternatives in the NPRM:
    (1) Implement the legislative changes prescribed in WIOA, as noted 
in this Final Rule, thereby satisfying the legislative mandate;
    (2) Take no action, that is, attempt to implement WIOA using 
existing regulations promulgated under WIA; or
    (3) Publish no regulation and rescind existing WIA regulations, 
which would result in non-compliance with the WIOA requirement to 
publish implementing regulations.
    The Departments considered these three options in accordance with 
the provisions of E.O. 12866 and concluded that publishing the WIOA 
Final Rule--that is, the first alternative--was the only appropriate 
option. We considered the second alternative--retaining existing WIA 
regulations as the guide for WIOA implementation--but WIOA has changed 
WIA's requirements substantially enough that new implementing 
regulations are necessary for the public workforce system to achieve 
compliance. We considered, but rejected, the third alternative--not to 
publish implementing regulations and rescind existing WIA regulations--
because this option, inherently, does not provide sufficient detailed 
guidance to implement the statutory requirements effectively.
    In addition to the regulatory alternatives noted above, the 
Departments also considered phasing in certain elements of WIOA over 
time (different compliance dates), thereby allowing States and 
localities more time for planning and successful implementation. As a 
policy option, this alternative appears appealing in a broad 
theoretical sense and, where feasible, we have recognized and made 
allowances for different implementation schedules. However, with the 
exception of these allowances, we are not implementing an alternative 
that delays certain requirements for the following two reasons: (1) 
Implementation delays are not operationally feasible because many 
critical WIOA elements depend on the implementation of other 
provisions, and (2) the costs associated with additional implementation 
delays beyond those noted in this Final Rule could outweigh the 
benefits of alternative starting dates.
3. General Comments Received on the Economic Analysis in the NPRM
    The Departments received several public comments regarding the 
economic analysis, presented RIA in the NPRM for this rule, and a few 
other comments regarding the economic analysis related to the VR 
program specifically as set forth in the NPRM on ``State Vocational 
Rehabilitation Services Program; State Supported Employment Services 
Program; Limitations on Use of Subminimum

[[Page 55922]]

Wage'' (80 FR 21059 (April 16, 2015)).\1\ We considered all comments 
received. The significant comments and summaries of the Departments' 
analyses of those comments are discussed in the following two sections, 
depending on whether the comments relate to jointly administered 
requirements set forth in the NPRM for this Final Rule or the comments 
relate to VR program-specific requirements as set forth in the NPRM on 
``State Vocational Rehabilitation Services Program; State Supported 
Employment Services Program; Limitations on Use of Subminimum Wage.'' 
Comments that pertain only to the VR program, and not jointly 
administered requirements, will be summarized here, but ED will address 
them directly in the Final Rule for ``State Vocational Rehabilitation 
Services Program; State Supported Employment Services Program; 
Limitations on Use of Subminimum Wage,'' which is published in this 
edition of the Federal Register.
---------------------------------------------------------------------------

    \1\ The NPRM for ``State Vocational Rehabilitation Services 
Program; State Supported Employment Services Program; Limitations on 
Use of Subminimum Wage'' was published at 80 FR 21059 on April 16, 
2015. It can be accessed at https://regulations.gov.
---------------------------------------------------------------------------

a. Discussion of Public Comments Related to This Rule's NPRM
i. Contextualizing the Costs of WIOA
    To provide context for the costs of the NPRM in the RIA, the 
Departments expressed the annual cost of the NPRM relative to the 
average annual amount made available to the six core programs in Fiscal 
Years (FYs) 2012, 2013, and 2014 under WIA.\2\ Based on an average 
annual total Federal appropriation of $6.4 billion for the 3 fiscal 
years for these programs, the proportional annual cost of the NPRM was 
between 2.6 percent and 2.7 percent (using 3-percent and 7-percent 
discounting, respectively).
---------------------------------------------------------------------------

    \2\ U.S. Department of Labor, Employment and Training 
Administration. (2015). Archive of State Statutory Formula Funding. 
Retrieved from: https://www.doleta.gov/budget/py01_py09_arra_archive.cfm. The Departments used data from the 
following files to estimate the average annual WIA budget: WIA Adult 
Activities Program (Program Years [PYs] 2011, 2012, 2013, and 2014); 
WIA Dislocated Worker Activities Program (PYs 2011, 2012, 2013, and 
2014); and WIA Youth Activities (PYs 2012, 2013, and 2014). Note 
that for the adult and dislocated worker activities programs, each 
fiscal year's funding is calculated as the sum of the program year's 
July funding and the previous program year's October funding. The 
youth activities funding is obligated to States in April and 
corresponds to the fiscal year in which it is obligated.
    U.S. Department of Education. (2016). Department of Education 
Budget Tables. Retrieved from: https://www2.ed.gov/about/overview/budget/tables.html?src=ct. The Departments used data from the 
following files to estimate the average annual WIA budget: 
Congressional Action (FYs 2012, 2013, and 2014).
---------------------------------------------------------------------------

    Comments: A commenter asserted that the incremental cost burden 
should not be compared to the total funds made available for these six 
programs under WIA, but instead should be compared to the 
administrative funds available to the States because this will be the 
funding source for a majority of the new requirements.
    Departments' Response: In section V.A.7 (Summary of Analysis) of 
this Final Rule, the Departments present the incremental burden of WIOA 
both as a proportion of the average annual appropriation for carrying 
out these programs under WIA and as a proportion of the administrative 
and transition funds that might be used for WIOA implementation.
ii. The Value of Common Exit
    In the NPRM, the Departments sought public comments on the value of 
a cross-program definition of exit (i.e., a ``common exit'') that is 
based on the last date of service (other than self-service or 
information only activities) from all core programs, rather than a 
program-specific exit as proposed in the NPRM. Under a common exit, an 
individual would have to complete services from all core programs from 
which he or she received services to exit from the system.
    Comments: Several commenters stated that a common exit approach 
would be costly. Specifically, some of these commenters asserted that a 
requirement to report a common exit would be prohibitive to States 
because a single Management Information System (MIS) does not exist for 
all core programs. Another commenter indicated that, in addition to the 
very large costs that would result from the interfaces that would need 
to be built across programs, additional labor hours would be required 
to track the exit dates of other programs. Other commenters indicated 
that some of their clients who cannot complete instructional services 
might continue to use their services for years if other options are not 
developed. These commenters further stated that data systems would need 
to have the capacity to hold clients' data for years, which could 
result in significant costs.
    On the other hand, one commenter remarked that the lack of a common 
exit would result in the need for more information technology (IT) 
resources, such as increased storage space.
    Departments' Response: The Departments have revised these final 
regulations to permit--but not require--WIOA title I and Wagner-Peyser 
Act Employment Service DOL programs to collect and report common exit 
data. Common exit data collection and reporting will not be permitted 
or required for core programs under titles II and IV of WIOA.
    Although the Departments have concluded an integrated system that 
would track common exits for an individual is a vision for the 
workforce development system, an integrated system is not a requirement 
under WIOA or these final regulations. Furthermore, because the common 
exit approach is optional, we have not concluded that it would cause 
providers to extend the duration of program services artificially. In 
addition, we have no way to anticipate how many, if any, States will 
implement the common exit approach. For these reasons, no costs are 
included in this analysis related to the implementation of the optional 
common exit approach, including the cost of developing integrated 
systems or artificially extending the duration of services.
iii. Primary Indicators of Performance
    Several commenters addressed the costs of implementing proposed 
requirements related to some of the primary indicators of performance.
    Comments: A few commenters indicated concerns about tracking 
program participants to determine if they had attained a postsecondary 
credential or a secondary school diploma within 1 year after exiting 
the program. These commenters stated that no system is in place to 
collect and track such information and asserted that doing so would be 
very staff intensive and costly. Commenters also expressed concern that 
major changes would be needed to their MISs to track data on 
individuals who had exited the program.
    Departments' Response: Although the Departments understand the 
concerns expressed by commenters, we want to make clear that the 
performance indicators proposed in the NPRM and contained in these 
final regulations are consistent with the statutory requirements set 
forth in sec. 116(b)(2)(A) of WIOA. Moreover, we have concluded that 
these requirements will not lead to a burden increase for most core 
programs because similar--although not identical--information was 
tracked by these programs for performance purposes under WIA. We 
acknowledge that for some programs, such as the VR program, post-exit 
data, including credential attainment, is not collected under the 
current data system. Consequently, States will have to collect such 
data with the informed written consent of the participant through 
follow-up with the exited participant or

[[Page 55923]]

the educational institution or entity where the individual was 
receiving training. We have concluded this process will not be overly 
burdensome to the VR program, as suggested by the commenters, however, 
because the VR program provides postsecondary education and training 
only as a necessary service to support an employment goal on the 
individualized plan for employment. As a result, in the vast majority 
of cases, a credential will be obtained prior to employment and prior 
to exit from the VR program. Very few individuals will obtain 
postsecondary credentials after exiting the VR program. Hence, only a 
small percentage of cases will need to be tracked manually.
    Comments: In response to the Departments seeking comments on 
clarifications that might be needed to implement the credential 
attainment rate performance indicator, one commenter indicated that 
implementing and tracking the time frames would be an immense reporting 
burden on States.
    Departments' Response: The Departments did not establish a time 
frame for obtaining a credential for purposes of the performance 
indicator required by sec. 116(b)(2)(A)(i)(IV) of WIOA, except for that 
required by WIOA--specifically that the credential be attained during 
the participant's participation in the program or within 1 year after 
exit from the program. Given that WIOA requires this particular time 
frame, there is no statutory authority to eliminate it from these final 
regulations or eliminate any burden estimate related to its 
implementation. Therefore, the estimated burden related to implementing 
the statutorily required time frame is maintained. During the 
development of the NPRM, the Departments considered the extent of the 
work required for data collection and reporting on this indicator and 
incorporated the level of effort for those follow-up activities in the 
burden estimates that were published in the NPRM. These costs will not 
be substantial because the time frame for participants to obtain a 
credential was lengthened from only 3 quarters from exit under WIA to 4 
quarters under WIOA.
    Comments: The NPRM proposed that States would be required to report 
information on the career and training services provided by title I 
core programs, as well as the percentage of those participants who 
obtain training-related employment. One commenter said that the States' 
administrative data do not indicate whether employment is related to 
training. The commenter asserted that such data would be costly to 
collect directly from each participant on a case-by-case basis.
    Departments' Response: Although the Departments understand the 
commenter's concern, we want to make clear that the requirement to 
collect and report this information is required by sec. 116(d)(2)(G) of 
WIOA. We do not agree that collecting and reporting the required data 
will be as costly or burdensome as the commenter suggests. Currently, 
State (UI) agencies provide wage data that, at a minimum, include a 
North American Industry Classification System (NAICS) code that 
generally provides an indication of whether employment outcomes were 
training related. In addition, costs for follow-ups to determine if 
training was related to employment were already accounted for in the 
baseline because they were collected under WIA. The other core programs 
are not required to collect and report such data.
    Comments: One commenter suggested that some of the performance 
measures proposed for INA supplemental youth service programs are 
burdensome--particularly given the disparity in funding between the INA 
youth grants and State grants. The commenter remarked that it would 
cost $1 million to update its Bear Tracks performance reporting system, 
which is currently used by INA grantees to collect data for performance 
measures. The performance reporting system would have to be upgraded 
because: (1) It is not a Web-based application; (2) it does not provide 
an adequate level of data security; and (3) it soon could be 
incompatible with the Departments' new technology. In addition, 
training would be required for the INA grantees across the United 
States. Furthermore, the commenter warned that its program only might 
be able to handle the additional reporting burden by keeping 
participants as ``active participants'' by not exiting them from the 
program until they graduate from high school. The commenter stated that 
this would create a significant burden because grantees would have to 
provide qualified follow-up service every 90 days to keep the 
participants active.
    Departments' Response: The Departments acknowledge that some 
grantees, including grantees awarded funding under WIOA, title I, 
subtitle D--National Programs, could experience higher burdens than 
other entities. We want to make clear that the cost estimates presented 
in the NPRM and these final regulations represent the cost for a single 
representative State, not potential cost burden that could be realized 
by individual grantees because such effects are based on a variety of 
factors specific to each program. Furthermore, we point out that data 
for a credential attainment measure are currently being collected by 
the INA program (under WIA) that is similar to the education and 
credential indicators under WIOA and, therefore, the burden associated 
with such requirements is not new but rather is burden already 
accounted for in the baseline presented in the RIA for the NPRM and 
these final regulations.
iv. Additional State Performance Indicators
    Comments: A commenter questioned why the NPRM's RIA projected 
burdens for only five States with regard to establishing additional 
performance accountability indicators and asked for clarification on 
which five States were expected to submit these data. The commenter 
asserted that if all States were expected to submit data, by accounting 
only for five, the Departments were significantly underestimating the 
cost of this requirement in the NPRM.
    Departments' Response: Under WIA, States were permitted to 
establish performance indicators in addition to the required 
indicators. No State, however, established additional performance 
indicators under WIA. Based on this past practice, the Departments 
estimate that very few States, if any, will establish additional 
performance indicators and report related data under WIOA. In an effort 
to estimate all potential costs where quantifiable, however, we 
provided burden estimates based on as many as five States choosing to 
establish additional performance indicators. To be clear, the five 
States referenced in the NPRM's RIA were intended as an upper-level 
estimate of the number of States expected to establish additional State 
performance indicators, and were not intended to mean that we knew 
which States, if any, would choose to do so. Burden estimates 
associated with collection and reporting of data for the primary 
indicators of performance include all States and are accounted for 
elsewhere in provision (c) Performance Accountability System of the RIA 
for these final regulations. For the foregoing reasons, we have 
concluded the burden estimates proposed in the NPRM, and revised for 
these final regulations, reflect an accurate representation of the 
expected cost burden of WIOA in the event that as many as five States 
decide to implement and report on additional performance indicators.
    Comments: In the NPRM, the Departments estimated that seven VR 
agencies each would experience $5,000

[[Page 55924]]

in one-time software and IT systems costs and annual labor costs for 60 
technical staff members at 9 hours each to obtain additional 
information for new data fields for those States, if any, choosing to 
establish additional performance indicators under WIOA. A commenter 
noted that the $35,000 first-year software and IT systems costs 
associated with programming designated State unit systems (i.e., VR 
agencies) accounted for only 7 VR agencies not 80. In addition, the 
commenter indicated that the Departments underestimated the level of 
effort per entity to modify the State-developed case management system 
(CMS) so that designated State agencies and VR agencies could report on 
the required performance measures.
    Departments' Response: The Departments want to make clear that the 
estimates referenced by the commenter reflect the increased burden to 
the VR program should a few States adopt additional performance 
indicators. As stated in the response to another commenter, no State 
established additional performance indicators under WIA, even though 
each was permitted to do so. To avoid underestimating costs, however, 
the NPRM estimated the burden to the State if up to five States--two of 
which have a separate agency for the individuals who are blind (i.e., 
seven VR agencies)--choose to adopt additional performance indicators. 
After further Departmental review of the proposed burden estimate, we 
have reduced the estimated number of affected entities from seven to 
five VR agencies and reduced the estimated labor cost per entity, as 
indicated in Exhibit 33.
    In response to public comments and based on additional information 
received, the Departments have also eliminated the estimated burden for 
the revision of existing CMSs to accommodate the collection of data to 
support additional State indicators. We have concluded that such 
indicators likely would not require the collection of additional new 
data. In addition, any changes needed to State CMSs for such measures 
already would be subsumed by the one-time costs of revising their 
existing systems to collect required data to support the primary 
indicators of performance, reported under the Development and Updating 
of State Performance Accountability Systems subsection of provision (c) 
``Performance Accountability System'' displayed in Exhibit 18.
iv. State Performance Reports
    Comments: In the NPRM, the Departments proposed that States would 
be required to submit a State performance report, which would describe, 
among other things, the amount of funds spent on career and training 
services, respectively, for the current program year and the 3 
preceding program years. Several commenters asserted that breaking out 
the funds spent by service would be too costly.
    One commenter expressed opposition to tracking and reporting the 
amount of funds spent on each type of career and training service. The 
commenter stated that the NPRM did not take into account the expense of 
doing so. Citing their own experiences, multiple commenters noted that 
costs incurred for programming in addition to the ongoing 
administrative costs related to IT systems would be prohibitive.
    Another commenter stated that the existing CMSs do not track funds 
spent on each type of career and training service. The commenter 
indicated that this would require the costly and time-intensive 
integration of the State's CMS with the financial systems in place in 
each of the local areas.
    A commenter expressed that, in addition to tracking specific 
payments to training providers, it would have to track indirect costs 
such as benefits paid to staff, building space, and the cost of devices 
used in delivering services (e.g., computers). The commenter concluded 
that the effort to determine these specific cost breakouts greatly 
would exceed the value gained from this information.
    Departments' Response: The Departments want to make clear that the 
statutory requirement and these final regulations are less burdensome 
than the commenters appear to believe. Section 116(d)(2)(D) of WIOA 
requires the State to report on the amount of funds spent on ``each 
type of service,'' which we have interpreted to mean career services, 
as one type, and training services, as the other type--not each 
individual type of career or training services, provided to 
participants. Therefore, the NPRM's RIA did not account for burden 
associated with tracking each individual type of career service and 
training service provided because such tracking is not required by WIOA 
or these final regulations. Moreover, the cost estimates in the NPRM 
and these final regulations do not account for IT system integration 
because the Departments concluded that States are unlikely to update 
their IT systems to allow for the integration of fiscal, case 
management, and performance data.
    The Departments agree with the commenters that such micro-level 
reporting would be burdensome to the States. Before publishing the 
NPRM, we consulted with States and concluded that this type of tracking 
would be extremely burdensome. Therefore, we have concluded that 
affected entities are likely to use a model that divides the total cost 
spent on career services or training services by the total number of 
participants who received career services or training services to 
determine the cost per participant.
v. Underestimated Burden for Development of Strategies for Aligning 
Technology and Data Systems Across One-Stop Partner Programs To Enhance 
Service Delivery and Improved Efficiencies
    In the NPRM, the Departments estimated that State WDBs would incur 
a one-time cost of $1.2 million and that State- and local-level AEFLA 
programs and VR agencies would incur annual costs of $35.5 million 
related to the development of strategies for aligning technology and 
data systems across one-stop partner programs. This includes costs for 
design implementation of common intake, data collection, case 
management information, performance accountability measurement, 
reporting processes, and incorporation of local input into design and 
implementation to improve coordination of services across one-stop 
partner programs.
    Comments: A few commenters asserted that the cost of aligning data 
and data systems to collect data on performance measures across 
programs was understated in the NPRM. One of these commenters stated 
that the Departments underestimated the burden for coordinating service 
delivery across all of the relevant programs given the large array of 
data systems, software platforms, and partners involved. Another 
commenter suggested that aligning technology and data systems might 
prove expensive for State agencies due to changing or integrated data 
system and collection methods. The commenter concluded that full 
integration of technology and data systems would be a costly and time-
consuming process.
    Departments' Response: First, the Departments want to make clear 
that WIOA has no statutory requirement that data systems be integrated 
across all core programs, as some of the commenters appear to believe. 
State WDBs are required to assist Governors in developing strategies to 
align technology and data systems across one-stop partner programs to 
enhance service delivery. Therefore, the NPRM and these final 
regulations reflect the estimated burden for the DOL-

[[Page 55925]]

administered and VR programs associated with the future implementation 
of integrated IT systems across core programs and the burden for State 
agencies to enhance their AEFLA program participation in the Statewide 
Longitudinal Data Systems (SLDS) Grant Program. Because States are at 
varying stages in the data alignment process, the cost estimates for 
DOL-administered and VR programs presented in the NPRM represent the 
national average costs for ``low-'' and ``high-effort'' States, while 
the cost estimates for the AEFLA program do not adopt such a 
classification of States and, instead, use a standard cost estimate for 
all States. The Departments understand that some States could 
experience higher actual costs, while actual costs could be lower for 
others.
vi. Integrating Record Collection and Performance Reporting
    Comments: One commenter stated that the Departments underestimated 
the cost of integrating record collection across ED and between DOL and 
ED in terms of time and resources. In particular, the commenter 
indicated that the costs would be greater for the VR program because 
the VR program has the most disparate system (i.e., WISPR is a DOL-
specific platform), according to the commenter. Furthermore, the 
commenter suggested that the burden for integrating data for 
performance reporting across core programs belongs at the Federal level 
because DOL and ED receive records from each State for their respective 
programs. To have Federal agencies work out the integration of data 
elements and then push this integration to the States that are 
integrating their systems based on Federal recommendations would be 
more efficient. In addition, the commenter stated that costs are 
associated with the guidance and technical assistance that would be 
needed to bridge the gap between workforce partners' current systems 
and the Final Rule requirements before the data could be integrated.
    Departments' Response: The Departments acknowledge that some 
affected entities would experience higher burdens than other entities. 
Following additional consultation with program experts in the affected 
DOL and ED program areas, and based on the best available evidence, we 
calculated the compliance costs of each component of this Final Rule 
based on a range of burden estimates by States, a standard burden 
estimate per State, or an estimate for a single representative State 
that was used as a proxy for the average cost per State in the 
analysis. Please note, however, that this Final Rule does not require 
the integration of data collection and reporting systems across DOL and 
ED programs. Under WIOA, State VR programs will continue to submit RSA-
911 data to RSA, except that data will be submitted quarterly on open 
and closed service records instead of annually on closed service 
records as had been done historically. RSA will use these four 
quarterly reports to generate the annual WIOA performance report, which 
will be sent to the State agencies, reducing the burden on State VR 
agencies.
    Concerning the comment about burden for integrated reporting 
belonging at the Federal level, as part of the implementation of this 
rule, DOL and ED jointly are proposing an Information Collection for 
the WIOA Performance Management, Information, and Reporting System (OMB 
Control Number 1205-0526). This ICR (WIOA Joint Performance ICR) and 
associated documents, including the WIOA Participant Individual Record 
Layout (PIRL), provides a standardized set of data elements, 
definitions, and reporting instructions that will be used to describe 
the characteristics, activities, and outcomes of WIOA participants.
vii. Reductions in State VR Agency Resources and the Impact of WIOA 
Implementation
    Comments: One commenter stated that the cost estimates for the VR 
program in the NPRM did not appear to account for the current 
reductions in agency staff and State funding.
    Departments' Response: Although the Departments understand the 
concern expressed by the commenter, we want to make clear that the 
burden estimates are based on the estimation of what implementing new 
requirements under WIOA, including both jointly administered 
requirements and program-specific requirements, will cost States. The 
burden estimates do not account for circumstances individual States 
face at the State level, such as reductions in staff or reductions in 
State funds for match purposes.
viii. Benefits Due To Reduced Youth Unemployment
    Comments: One commenter said that WIOA includes improvements that 
would ensure low-income workers have the skills and support needed for 
full participation in the workforce. Specifically, the commenter 
expressed that provisions that increase the focus on comprehensive 
programming for out-of-school youth should reduce the effect youth 
unemployment has on Federal and State governments. The commenter cited 
a 2014 report, which found that the average unemployed 18- to 24-year-
old costs taxpayers over $4,000 annually and the average unemployed 25- 
to 34-year-old costs taxpayers approximately $9,000 annually.
    Departments' Response: WIOA provides additional opportunities to 
coordinate education and employment services for youth across the core 
programs. The Departments will continue to encourage these partnerships 
and the benefits that result from their implementation. The study cited 
by the commenter evaluates impacts resulting from reduced welfare and 
unemployment benefits being paid out, as well as increased tax revenue. 
The Departments considered these outcomes in evaluating the impact of 
WIOA, and described these and other impacts resulting from training and 
employment services, such as re-engagement of dislocated workers, in 
the Regulatory Benefits discussion and the Transfers discussion in 
section V.A.7 (Summary of Analysis) of this RIA.
ix. Inability to Quantify Benefits
    In the NPRM, the Departments stated that they were unable to 
quantify the benefits associated with the NPRM because of data 
limitations and a lack of operational WIOA data or evaluation findings 
on the provisions of the NPRM. The Departments invited comments 
regarding how the benefits described qualitatively in the NPRM could be 
estimated.
    Comments: Several commenters stated that State workforce and 
business agencies have developed a set of performance measures designed 
to capture the financial impact of services delivered at the local 
community, workforce area, regional, and State levels. The measures 
also allow for the calculation of return on investment. The commenters 
remarked that the measures would allow the economic value of services 
delivered to local communities to be expressed, attainable goals that 
align with staff activities to be set, and staff to understand the 
value of their work. These tools are in the initial stages of 
development and implementation.
    Departments' Response: The Departments acknowledge that the tools 
described by the commenters are currently being developed and tested. 
We understand, however, that these tools were developed for use at the 
State, local, and regional levels and have not been applied for similar 
purposes at the national level. Therefore, modifying these tools to

[[Page 55926]]

obtain information in the limited time frame for this analysis was not 
feasible.
b. Discussion of Public Comments Related to the Proposed Program-
Specific Rules for the VR Program
i. Underestimated Costs to the VR Program
    Comments: The Departments received a few comments related to one of 
ED's three WIOA-related NPRMs, which, among other things, covered VR 
program-specific requirements.
    Departments' Response: The public comments pertaining to estimates 
provided in the NPRM specific to the VR program will be responded to 
directly by ED in the Final Rule governing, among other things, the VR 
program published elsewhere in this issue of the Federal Register.
4. Analysis Considerations
    The Departments estimated the additional costs, benefits, and 
transfers associated with implementing this WIOA-required Final Rule 
from the existing baseline, that is, the practices complying with, at a 
minimum, the 2000 WIA Final Rule (65 FR 49294, Aug. 11, 2000).
    The Departments explain how the required actions of States, Local 
WDBs, employers and training entities, government agencies, and other 
related entities were linked to the estimated costs and expected 
benefits. We also consider, when appropriate, the unintended 
consequences of the regulations introduced by this Final Rule. We have 
made every effort to quantify and monetize the costs and benefits of 
the Final Rule. We were unable to quantify benefits associated with the 
Final Rule because of data limitations and a lack of operational data 
or evaluation findings on the provisions of the Final Rule or WIOA in 
general. Therefore, we describe some benefits qualitatively.
    The Departments have made every effort to quantify all incremental 
costs associated with the implementation of WIOA's requirements as 
distinct from those that already exist under WIA, WIOA's predecessor 
statute. Despite our best efforts, however, we might be double counting 
some activities that occurred under WIA. Thus, the costs itemized below 
represent an upper bound for the potential cost of implementing WIOA.
    In addition to this Final Rule, the Departments are publishing 
separate final rules to implement program-specific requirements of WIOA 
that fall under each Department's purview; see section I of this Joint 
WIOA Final Rule (Executive Summary). We acknowledge that these final 
rules and their associated impacts might not be fully independent from 
one another, but we are unaware of a reliable method to quantify the 
effects of this interdependence. Therefore, this analysis does not 
capture the correlated impacts of the costs and benefits of this Final 
Rule and those associated with the other Final Rules. We have made an 
effort to ensure no duplication of benefits and costs between this and 
the other Final Rules.
    In accordance with the regulatory analysis guidance articulated in 
Circular A-4, and consistent with the Departments' practices in 
previous rulemakings, this regulatory analysis focuses on the likely 
consequences (i.e., costs and benefits that accrue to citizens and 
residents of the United States) of this WIOA-required Final Rule. The 
analysis covers 10 years (2016 through 2025) to ensure it captures 
major additional costs and benefits that accrue over time. The 
Departments express all quantifiable impacts in 2015 dollars and use 3-
percent and 7-percent discounting following Circular A-4.
    Exhibit 2 presents the estimated number of entities expected to 
experience a change in level of effort (workload) due to the 
regulations included in this Final Rule. The Departments provide these 
estimates and use them extensively throughout this analysis to estimate 
the cost of each provision, where feasible.
---------------------------------------------------------------------------

    \3\ For simplicity, the Departments' use of the term ``States'' 
in this Final Rule RIA refers to the 50 States; the District of 
Columbia; the U.S. territories of American Samoa, Guam, the 
Commonwealth of the Northern Mariana Islands, the Commonwealth of 
Puerto Rico, and the Virgin Islands; and the Republic of Palau, a 
country in free association with the United States. In the NPRM, the 
number of States for the DOL program was 56 and 57 for the AEFLA and 
RSA programs because DOL did not include the Republic of Palau.
    \4\ Based on internal DOL data.
    \5\ DOL estimate.
    \6\ DOL estimate.
    \7\ Based on internal ED data.
    \8\ ED estimate.
    \9\ Local AEFLA providers include local education agencies; 
community-based organizations; faith-based organizations; libraries; 
community, junior, and technical colleges; 4-year colleges and 
universities; correctional institutions; and other agencies and 
institutions.
    \10\ Based on internal ED data.
    \11\ Pursuant to sec. 7(34) of the Rehabilitation Act of 1973, 
as amended, this figure includes the 50 States, the District of 
Columbia, American Samoa, Guam, the Commonwealth of the Northern 
Mariana Islands, the Commonwealth of Puerto Rico, and the Virgin 
Islands. Twenty-four States have two DSAs for the VR program; 
therefore, the total number of VR agencies is 80. The Departments 
note particularly that we have sought to avoid duplication of costs, 
given the fact that some States have two VR agencies.
    \12\ Based on internal ED data.

             Exhibit 2--Number of Affected Entities by Type
------------------------------------------------------------------------
                                                             Number of
                       Entity type                           entities
------------------------------------------------------------------------
DOL Program:
    States \3\..........................................          \4\ 57
    States establishing additional performance                     \5\ 5
     indicators.........................................
    Local WDBs..........................................         \6\ 580
AEFLA Program:
    States..............................................          \7\ 57
    States establishing additional performance                     \8\ 5
     indicators.........................................
    Local AEFLA providers...............................       \9\ 2,396
    Local AEFLA providers establishing additional               \10\ 200
     performance indicators.............................
RSA Program:
    VR agencies.........................................         \11\ 80
    VR agencies establishing additional performance               \12\ 5
     indicators.........................................
------------------------------------------------------------------------


[[Page 55927]]

Estimated Number of Workers and Level of Effort
    The Departments present the estimated average number of workers and 
the estimated average level of effort required per worker for each 
activity in the subject-by-subject analysis. Where possible, Federal 
program experts consulted with State programs to estimate the average 
levels of effort and the average number of workers needed for each 
activity to meet the requirements relative to the baseline (i.e., the 
current practice under WIA) to derive these estimates. These estimates 
are the national averages for all States; thus, some States could 
experience higher actual costs, while actual costs could be lower for 
other States.
Compensation Rates
    In the subject-by-subject analysis, the Departments present the 
additional labor and other costs associated with the implementation of 
the provisions in this Final Rule. Exhibit 3 presents the compensation 
rates for the occupational categories expected to experience an 
increase in level of effort (workload) due to the Final Rule. We use 
the Bureau of Labor Statistics' (BLS) mean hourly wage rate for State 
and local employees.13 14 We also use wage rates from the 
Office of Personnel Management's Salary Table for the 2015 General 
Schedule for Federal employees.\15\ We adjust the wage rates using a 
loaded wage factor to reflect total compensation, which includes non-
wage factors such as health and retirement benefits. For the State and 
local sectors, we use a loaded wage factor of 1.57, which represents 
the ratio of average total compensation \16\ to average wages for State 
and local government workers in 2015.17 18 For Federal 
employees, we use a loaded wage factor of 1.63, which was estimated 
using a two-step process. First, we calculated a loaded wage rate of 
1.44 for private industry workers, which is the ratio of average total 
compensation \19\ to average wages \20\ for private industry workers in 
2015. We then multiplied the 2015 loaded wage rate for private workers 
(1.44) by the ratio of the loaded wage factors for Federal workers to 
private workers (1.13) using data from a Congressional Budget Office 
report \21\ to estimate the 2015 loaded wage rate for Federal workers 
of 1.63.\22\ We then multiply the loaded wage factor by each 
occupational category's wage rate to calculate an hourly compensation 
rate.
---------------------------------------------------------------------------

    \13\ Bureau of Labor Statistics. (2015). May 2015 national 
industry-specific occupational employment and wage estimates: NAICS 
999200--State government, excluding schools and hospitals (OES 
designation). Retrieved from: https://www.bls.gov/oes/current/naics4_999200.htm.
    \14\ Bureau of Labor Statistics. (2015). May 2015 national 
industry-specific occupational employment and wage estimates: NAICS 
999300--Local government, excluding schools and hospitals (OES 
designation). Retrieved from: https://www.bls.gov/oes/current/naics4_999300.htm.
    \15\ The wage rate for Federal employees is based on Step 5 of 
the General Schedule (source: OPM, 2015, ``Salary Table for the 2015 
General Schedule''). Retrieved from: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2015/GS_h.pdf.
    \16\ Bureau of Labor Statistics. (2016). 2015 Employer Costs for 
Employee Compensation. Retrieved from: https://www.bls.gov/schedule/archives/ecec_nr.htm. The Departments calculated this value using 
data from Table 3. ``Employer Costs per Hour Worked for Employee 
Compensation and Costs as a Percent of Total Compensation: State and 
Local Government Workers, by Major Occupational and Industry 
Group.'' Total compensation for all workers. To calculate the 
average total compensation in 2015 of $44.53, we averaged the total 
compensation for all workers provided in March, June, September, and 
December releases.
    \17\ Bureau of Labor Statistics. (2016). 2015 Employer Costs for 
Employee Compensation. Retrieved from: https://www.bls.gov/schedule/archives/ecec_nr.htm. The Departments calculated this value using 
data from Table 3. ``Employer Costs per Hour Worked for Employee 
Compensation and Costs as a Percent of Total Compensation: State and 
Local Government Workers, by Major Occupational and Industry 
Group.'' Wages and salaries for all workers. To calculate the 
average wage and salary in 2015 of $28.41, we averaged the wage and 
salaries for all workers provided in March, June, September, and 
December releases.
    \18\ The State and local loaded wage factor was applied to all 
non-Federal employees. Discerning the number of State and local-
sector employees and private-sector employees at the local level is 
difficult; therefore, the Departments used the State and local-
sector loaded wage factor (1.57) instead of the private-sector wage 
factor (1.44) for all non-Federal employees to avoid underestimating 
the costs.
    \19\ Bureau of Labor Statistics. (2016). 2015 Employer Costs for 
Employee Compensation. Retrieved from: https://www.bls.gov/schedule/archives/ecec_nr.htm. The Departments calculated this value using 
data from Table 5. ``Employer Costs per Hour Worked for Employee 
Compensation and Costs as a Percent of Total Compensation: Private 
Industry Workers, by Major Occupational Group and Bargaining Unit 
Status.'' Total compensation for all workers. To calculate the 
average total compensation in 2015 of $31.57, we averaged the total 
compensation for all workers provided in March, June, September, and 
December releases.
    \20\ Bureau of Labor Statistics. (2016). 2015 Employer Costs for 
Employee Compensation. Retrieved from: https://www.bls.gov/schedule/archives/ecec_nr.htm. The Departments calculated this value using 
data from Table 5. ``Employer Costs per Hour Worked for Employee 
Compensation and Costs as a Percent of Total Compensation: Private 
Industry Workers, by Major Occupational Group and Bargaining Unit 
Status.'' Wages and salaries for all workers. To calculate the 
average wage and salary in 2015 of $21.97, we averaged the wage and 
salaries for all workers provided in March, June, September, and 
December releases.
    \21\ Congressional Budget Office. (2012). Comparing the 
compensation of federal and private-sector employees. Tables 2 and 
4. Retrieved from: https://www.cbo.gov/sites/default/files/112th-congress-2011-2012/reports/01-30-FedPay_0.pdf. The Departments 
calculated the loaded wage rate for Federal workers of all education 
levels of 1.63 by dividing total compensation by wages (1.63 = 
$52.50/$32.30). We then calculated the loaded wage rate for private 
sector workers of all education levels of 1.44 by dividing total 
compensation by wages (1.44 = $ 45.40/$31.60). Finally, we 
calculated the ratio of the loaded wage factors for Federal to 
private sector workers of 1.13 (1.13 = 1.63/1.44).
    \22\ The Departments conclude that the overhead costs associated 
with this Final Rule are small because the additional activities 
required by the Final Rule will be performed by existing employees 
whose overhead costs are already covered. However, acknowledging 
that there might be additional overhead costs, as a sensitivity 
analysis of results, we calculate the impact of more significant 
overhead costs by including an overhead rate of 17 percent. This 
rate has been used by the Environmental Protection Agency (EPA) in 
its final rules (see for example, EPA Electronic Reporting under the 
Toxic Substances Control Act Final Rule, Supporting & Related 
Material), and is based on a Chemical Manufacturers Association 
study. An overhead rate from chemical manufacturing may not be 
appropriate for all industries, so there may be substantial 
uncertainty concerning the estimates based on this illustrative 
example. (By contrast, DOL's Employee Benefits Security 
Administration (EBSA) includes overhead costs that are substantially 
higher and more variable across employee types than EPA's--between 
39 and 138 percent of base wages for compensation and benefits 
managers, lawyers, paralegals and other legal assistants, and 
computer systems analysts--as presented in detail at www.dol.gov/ebsa/pdf/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-march-2016.pdf.) Using an overhead rate of 17 percent 
would increase the total cost of the Final Rule by 4.7 percent, from 
$135.2 million in Year 1 to $141.5 million. Over the 10-year period, 
using an overhead rate of 17 percent would increase the total 
undiscounted cost of the Final Rule from $620.4 million to $650.2 
million, or 4.8 percent.
---------------------------------------------------------------------------

    The Departments use the hourly compensation rates presented in 
Exhibit 3 throughout this analysis to estimate the labor costs for each 
provision.

[[Page 55928]]



                                          Exhibit 3--Compensation Rates
                                                 [2015 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                  Average hourly   Loaded  wage       Hourly
                                                                     wage rate        factor       compensation
              Position                       Grade level         --------------------------------      rate
                                                                                                 ---------------
                                                                         a               b           c = a x b
----------------------------------------------------------------------------------------------------------------
                                                 Local Employees
----------------------------------------------------------------------------------------------------------------
Computer systems analysts..........  N/A........................          $38.70            1.57          $60.76
Database administrators............  ...........................           37.96  ..............           59.60
Management analysts................  ...........................           38.60  ..............           60.60
Management occupations staff.......  ...........................           40.53  ..............           63.63
Office and administrative support    ...........................           18.70  ..............           29.36
 occupations.
Social and community service         ...........................           38.86  ..............           61.01
 managers.
----------------------------------------------------------------------------------------------------------------
                                                 State Employees
----------------------------------------------------------------------------------------------------------------
Computer systems analysts..........  N/A........................           35.78            1.57           56.17
Database administrators............  ...........................           36.32  ..............           57.02
Lawyers............................  ...........................           41.71  ..............           65.48
Management analysts................  ...........................           29.22  ..............           45.88
Management occupations staff.......  ...........................           41.65  ..............           65.39
Office and administrative support    ...........................           19.47  ..............           30.57
 occupations.
Rehabilitation counselors..........  ...........................           23.35  ..............           36.66
Social and community service         ...........................           34.53  ..............           54.21
 managers.
Social workers.....................  ...........................           22.43  ..............           35.22
Staff trainers \23\................  ...........................           34.53  ..............           54.21
State Rehabilitation Council Board   ...........................           29.22  ..............           45.88
 members \24\.
----------------------------------------------------------------------------------------------------------------
                                                Federal Employees
----------------------------------------------------------------------------------------------------------------
Federal positions..................  GS-12, Step 5..............           33.39            1.63           54.43
                                     GS-13, Step 5..............           39.70  ..............           64.71
                                     GS-14, Step 5..............           46.92  ..............           76.48
----------------------------------------------------------------------------------------------------------------

    The subject-by-subject analysis presents the total incremental 
costs of the Final Rule relative to the baseline--that is, requirements 
applicable to core programs prior to the enactment of WIOA. This 
analysis estimates these incremental costs, which affected entities 
will incur in complying with the Final Rule. The equation below shows 
the method the Departments use to calculate the incremental total cost 
for each provision over the 10-year analysis period.
---------------------------------------------------------------------------

    \23\ Based on the BLS mean hourly wage for social and community 
service managers.
    \24\ Based on the BLS mean hourly wage rate for management 
analysts.
[GRAPHIC] [TIFF OMITTED] TR19AU16.000

---------------------------------------------------------------------------
Where,

 Al Number of affected entities that will incur labor 
costs,
Ni Number of staff of occupational category i,
Hi Hours required per staff of occupational category i,
Wi Mean hourly wage rate of staff of occupational 
category i,
Li Loaded wage factor of staff of occupational category 
i,
Aj Number of affected entities incurring non-labor costs 
of type j,
Cj Non-labor cost of type j,
i Occupational category,
n Number of occupational categories,
j Non-labor cost type,
m Number of non-labor cost types,
T Year.

    The total cost of each provision is calculated as the sum of the 
total labor cost and total non-labor cost incurred each year over the 
10-year period (see Exhibit 50 for a summary of the average annual cost 
of the Final Rule by provision). The total labor cost is the sum of the 
labor costs for each occupational category i (e.g., computer systems 
analysts, database administrators, and lawyers) multiplied by the 
number of affected entities that will incur labor costs, Al. 
The labor cost for each occupational category i is calculated by 
multiplying the number of staff members required to perform the 
activity, Ni; the hours required per staff member to perform 
the activity, Hi; the mean hourly wage rate of staff of 
occupational category i, Wi; and the loaded wage factor of 
staff of occupational category i, Li. The total non-labor 
cost is the sum of the non-labor costs for each non-labor cost type j 
(e.g., consulting costs) multiplied by the number of affected entities 
that will incur non-labor costs, Aj.
Transfer Payments
    The Departments provide an assessment of transfer payments 
associated with transitioning the Nation's public workforce system from 
the requirements of WIA to the new

[[Page 55929]]

requirements of WIOA. In accordance with Circular A-4, we consider 
transfer payments as payments from one group to another that do not 
affect total resources available to society. For example, under both 
WIA and WIOA, financial transfers via formula grants will be made from 
the Federal government to the States and from the States to Local WDBs, 
as appropriate. In accordance with the State allotment provisions 
required by WIOA sec. 127, the interstate funding formula methodology 
is not significantly different from that used for the distribution of 
funds under WIA.\25\
---------------------------------------------------------------------------

    \25\ States may elect to change the distribution of funds at the 
local level and appropriately document such changes in the State 
Plans. Because small entities are fully funded by the States, which 
are not small entities, however, the Departments do not anticipate 
any impact on small entities.
---------------------------------------------------------------------------

    One example of where impacts are discussed qualitatively, rather 
than quantified, is the expectation that available U.S. workers trained 
and hired who were previously unemployed will no longer seek new or 
continued UI benefits. Assuming other factors remain constant, the 
Departments expect State UI expenditures to decline because of the 
hiring of U.S. workers following WIOA implementation. We cannot 
quantify these transfer payments, however, due to a lack of adequate 
data.
5. Updates to the Cost-Benefit Analysis for the Final Rule
    In total, the Departments estimate that this Final Rule will result 
in a 10-year undiscounted cost of $626.8 million (in 2015 dollars). We 
estimated that the NPRM would result in $1.5 billion in undiscounted 
costs (in 2013 dollars). As discussed below, after reviewing public 
comments and with further consultation with program experts in the DOL 
and ED program areas, we updated the cost analysis and made changes to 
specific provisions in the NPRM that affected costs.
General Updates
    In the Final Rule economic analysis, the Departments update all 
costs to 2015 dollars from 2013 dollars in the NPRM. This update 
increases the estimated cost of the Final Rule relative to the cost 
presented in the NPRM.
    In addition, the Departments have made several updates to the labor 
cost estimates. First, we use more appropriate occupational categories 
than those used in the NPRM (i.e., administrative staff, Board members, 
counsel staff, local stakeholders, managers, and technical staff). In 
this Final Rule, the occupational categories include: computer systems 
analysts, database administrators, lawyers, management analysts, 
management occupations staff (hereafter referred to as ``managers''), 
office and administrative support occupations staff (hereafter referred 
to as ``office and administrative support staff''), rehabilitation 
counselors, social and community service managers, social workers, 
staff trainers, and State Rehabilitation Council (SRC) Board members. 
Due to the numerous changes made to each provision in the analysis, 
which are described in detail below, these occupational categories add 
more specificity to the labor costs, but it is unclear whether they had 
a positive or negative effect on costs as a whole.
    Second, the Departments have updated labor costs, including wage 
rates and loaded wage factors, to reflect 2015 BLS data. Furthermore, 
instead of using State government employee wage rates for workers at 
both the State and local level as in the NPRM, we applied wage rates 
for State government employees and local government employees to 
workers at the State and local levels, respectively. Depending on the 
occupational category, the State-level wage rate could be higher or 
lower than the corresponding local-level wage rate; thus, it is unclear 
whether this had a positive or negative effect on costs as a whole.
    Third, based on further discussion with DOL program experts, the 
Departments have increased the overall number of States affected by DOL 
program requirements from 56 to 57 in the Final Rule because we 
concluded that the WIOA requirements also will affect the Republic of 
Palau.
    In the Final Rule, the Departments have made several changes to the 
provisions presented in the NPRM. Exhibit 4 presents a summary of the 
updates made to the NPRM provisions in the Final Rule. To simplify the 
analysis and combine related requirements, we merge the following 
provisions:
     Provision (b) ``New Elements to State and Local Plans'' 
and provision (f) ``Unified or Combined State Plans'' are combined to 
form provision (b) ``Unified or Combined State Plan: Expanded Content, 
Biennial Development and Modification Process, and Submission 
Coordination Requirements.''
     Provision (c) ``Development and Updating of State 
Performance Accountability Measures,'' provision (e) ``Development of 
Strategies for Aligning Technology and Data Systems across One-Stop 
Partner Programs,'' provision (h) ``State Performance Accountability 
Measures,'' provision (i) ``Performance Reports,'' and provision (j) 
``Evaluation of State Programs'' are combined to form provision (c) 
``Performance Accountability System.''
    In addition, the Departments have decided that the following two 
provisions are more appropriate in the DOL WIOA Final Rule RIA: 
Provision (d) ``Identification and Dissemination of Best Practices'' 
and provision (g) ``Local Plan Revisions.'' Although the updates made 
to each provision (i.e., changes from the NPRM estimates) are discussed 
under the relevant headings below, a detailed description of each cost 
provision remains in section V.A.6 (Subject-by-Subject Cost-Benefit 
Analysis).
---------------------------------------------------------------------------

    \26\ This column maps the requirements from the RIA of the NPRM 
to the RIA of the Final Rule, and is not a comprehensive list of all 
Final Rule requirements.

            Exhibit 4--Updates to Cost Provisions in the NPRM
------------------------------------------------------------------------
                                                     Required activities
            NPRM                   Final rule           in NPRM \26\
------------------------------------------------------------------------
(a) Time to Review the New    (a) Time to Review     Learn about
 Rule.                         the New Rule.         new regulations and
                                                     plan for
                                                     compliance.
(b) New Elements to State     (b) Unified or         Develop new
 and Local Plans.              Combined State        4-year Unified or
                               Plans: Expanded       Combined State
                               Content, Biennial     Plans; and
                               Development and       Review and
                               Modification          modify 4-year
                               Process, and          Unified or Combined
                               Submission            State Plans.
                               Coordination
                               Requirements.

[[Page 55930]]

 
(c) Development and Updating  (c) Performance        Develop and
 of State Performance          Accountability        update the State
 Accountability Measures.      System.               performance
                                                     accountability
                                                     systems;
                                                     Implement
                                                     measures for data
                                                     collection and
                                                     reporting on the
                                                     effectiveness in
                                                     serving employers;
                                                     Negotiate
                                                     levels of
                                                     performance;
                                                     Run
                                                     statistical
                                                     adjustment model to
                                                     adjust levels of
                                                     performance based
                                                     on actual economic
                                                     conditions and
                                                     characteristics of
                                                     participants;
                                                     Provide
                                                     technical
                                                     assistance to
                                                     States;
                                                     Obtain UI
                                                     wage data; and
                                                     Purchase
                                                     data analytic
                                                     software and
                                                     perform training.
(d) Identification and        Moved to the DOL      N/A.
 Dissemination of Best         WIOA Final Rule
 Practices.                    (see provision (c)
                               ``Identification
                               and Dissemination
                               of Best
                               Practices'').
(e) Development of            (c) Performance        Align
 Strategies for Aligning       Accountability        technology and data
 Technology and Data Systems   System.               systems across one-
 across One-Stop Partner                             stop partner
 Programs.                                           programs.
(f) Unified or Combined       (b) Unified or         Review and
 State Plan.                   Combined State        develop new 4-year
                               Plans: Expanded       Unified or Combined
                               Content, Biennial     State Plans to
                               Development and       ensure they satisfy
                               Modification          the new content
                               Process, and          requirements; and
                               Submission            Coordinate
                               Coordination          actions for
                               Requirements.         developing a new 4-
                                                     year Unified or
                                                     Combined State Plan
                                                     among the core
                                                     programs
                                                     administered by the
                                                     Departments.
(g) Local Plan Revisions....  Moved to the DOL      N/A.
                               WIOA Final Rule:
                               (See provision (m)
                               ``Local and
                               Regional Plan
                               Modification'').
(h) State Performance         (c) Performance        Collect
 Accountability Measures.      Accountability        data to report on
                               System.               additional State
                                                     performance
                                                     accountability
                                                     measures.
(i) Performance Reports.....  (c) Performance        Develop a
                               Accountability        performance report
                               System.               template that
                                                     reports outcomes
                                                     via the new WIOA
                                                     performance
                                                     accountability
                                                     metrics;
                                                     Develop,
                                                     update, and submit
                                                     eligible training
                                                     provider (ETP)
                                                     reports;
                                                     Collect,
                                                     analyze, and report
                                                     performance data;
                                                     and
                                                     Provide
                                                     training on data
                                                     collection.
(j) Evaluation of State       (d) State Evaluation   Coordinate
 Programs.                     Responsibilities.     any evaluation
                                                     activities to
                                                     cooperate in the
                                                     provision of
                                                     various forms of
                                                     data for evaluation
                                                     activities; and
                                                     Coordinate
                                                     in designing and
                                                     developing
                                                     evaluations carried
                                                     out under sec.
                                                     116(e) of WIOA.
------------------------------------------------------------------------

Time To Review the New Rule
    This section describes the updates to the NPRM's provision (a) 
``Time to Review the New Rule.'' In this Final Rule's subject-by-
subject analysis, costs related to this provision are found in 
provision (a) ``Time to Review the New Rule.'' The cost of this 
provision reflects the cost for individuals in the regulated community 
to learn about the new regulations and plan for compliance. Each core 
program has different staffing and WIOA affects them differently, which 
would result in different labor categories and level of effort for them 
to read and understand the Joint WIOA Final Rule. The total 
undiscounted 10-year cost of this provision decreased from $17.7 
million for the NPRM to $3.3 million for this Final Rule.\27\
---------------------------------------------------------------------------

    \27\ This variance in cost is mainly a result of the decrease in 
the estimated number of staff and level of effort required for this 
activity for the State- and local-level AEFLA program.
---------------------------------------------------------------------------

    At the State level for the DOL programs, the Departments made the 
following changes, which are presented in Exhibit 5. Following 
additional discussions with program experts, we decreased the number of 
DOL management staff from two to one. We added four lawyers who will 
review the new requirements in the Final Rule. Finally, we replaced the 
technical staff in our previous estimate with the more appropriate 
occupational category of social and community service manager. Although 
the number of personnel in this last category was reduced from four to 
two, the level of effort was increased from 20 to 40 hours; hence, the 
overall level of effort (80 hours) remained the same.

[[Page 55931]]



                                                      Exhibit 5--Updates to Costs of State-Level DOL Programs--Time to Review the New Rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (a) Time to review the new rule                                                                  (a) Time to review the new rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            2           20  One time.............  56 States............  Management                     1           20  One time............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            4           20                                                Lawyer.............            4           20
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Social & community             2           40
                                                                                                            service manager.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 6 presents the updates to the State-level AEFLA program. 
The Departments consulted with experts at the State-level AEFLA program 
and decided to reduce the number of managers from five to four after 
concluding that the number needed to reflect an average staffing level 
across all States and outlying areas was less than expected. Three of 
the four managers are categorized as social and community service 
managers and will have a level of effort of 20 hours rather than 40 
hours because we concluded that associate staff will not spend as much 
time on this activity as the State director.\28\ We reduced the level 
of effort required from the lawyer from 40 to 20 hours because we 
concluded that the lawyer, whose role is largely advisory, will not 
spend as much time on this activity as the State director, who will be 
responsible for implementation. We also excluded the two technical and 
five administrative staff included in our previous estimate because 
those occupational categories generally are not involved in reviewing 
regulations.
---------------------------------------------------------------------------

    \28\ The Departments used the occupations category of 
``management occupations staff'' to estimate the compensation rate 
for the State Director.

                                                     Exhibit 6--Updates to Costs of State-Level AEFLA Programs--Time To Review the New Rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (a) Time to review the new rule                                                                  (a) Time to review the new rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            5           40  One time.............  57 States............  Management                     1           40  One time............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           40                                                Lawyer.............            1           20
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           40                                                Social & community             3           20
                                                                                                            service manager.
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Admin. staff.....................            5           40
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following updates to the State VR program, 
which are shown in Exhibit 7. We consulted with VR program experts and 
decided to increase the number of managers from three to four. Three of 
these four managers are categorized as social and community service 
managers. In addition, we increased the level of effort per manager 
from 20 to 40 hours to reflect the greater complexity of the new rule. 
We replaced the counsel and technical staff members with three 
rehabilitation counselors to review the new requirements of the Final 
Rule. This change was made to better reflect the VR agency staff who 
will be performing this task.

                                                       Exhibit 7--Updates to Costs of State-Level VR Programs--Time To Review the New Rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (a) Time to review the new rule                                                                  (a) Time to review the new rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            3           20  One time.............  80 VR agencies.......  Management                     1           40  One time............  80 VR agencies.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------

[[Page 55932]]

 
Counsel staff....................            1           20                                                Social & community             3           40
                                                                                                            service manager.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           20                                                Rehabilitation                 3           40
                                                                                                            counselor.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    At the local level for the AEFLA program, the Departments made the 
following changes, which are presented in Exhibit 8. We concluded that 
local involvement in reviewing the new rule generally will require 
participation in a statewide meeting convened by the State office to 
present the new rule and address questions raised by local staff. We 
added one social and community service manager who will review the new 
requirements of the Final Rule. Based on conversations with additional 
program experts, we excluded the technical and administrative staff 
included in our previous estimate, because those occupational 
categories generally are not involved in reviewing regulations. Note 
that, instead of presenting the costs at the State level as in the 
NPRM, we are presenting costs at the program, or local, level.

                                                     Exhibit 8--Updates to Costs of Local-Level AEFLA Programs--Time To Review the New Rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (a) Time to review the new rule                                                                  (a) Time to review the new rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           40           40  One time.............  57 States............  Management                     1            4  One time............  2,396 local
                                                                                                            occupations staff.                                                   programs.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................           40           40                                                Social & community             1            4
                                                                                                            service manager.
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Admin. staff.....................           40           40
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

New Elements to State and Local Plans
    This section describes the updates to the NPRM's provision (b) 
``New Elements to State and Local Plans.'' In this Final Rule's 
subject-by-subject analysis, this cost provision is included in 
provision (b) ``Unified or Combined State Plans: Expanded Content, 
Biennial Development and Modification Process, and Submission 
Coordination Requirements'' and it captures the cost of developing new 
4-year Unified or Combined State Plans, performing a review of each 
State Plan, and modifying it 2 years after it is submitted. For this 
activity, the total 10-year cost (undiscounted) decreased from $53.9 
million in the NPRM to $1.9 million in the Final Rule.\29\ These 
revised cost estimates can be found under the subsections ``Four-Year 
Plan Modification--Third Year,'' ``Development of New 4-Year Plan--
Fifth Year,'' ``Four-Year Plan Modification--Seventh Year,'' and 
``Development of New 4-Year Plan--Ninth Year,'' in provision (b) of 
this Final Rule.
---------------------------------------------------------------------------

    \29\ The variance in cost is due to changes to the assumptions 
used to estimate costs (e.g., number of staff, occupational 
categories, level of effort, and frequency.) More specifically, this 
variance in cost is mainly due to AEFLA omitting biennial State-
level consulting costs and biennial local-level labor costs and the 
Departments' assumption that the level of effort to undertake the 
biennial development and modification process will decrease over 
time rather than remain constant. The Final Rule does not implement 
any policy changes over the NPRM that impact this cost.
---------------------------------------------------------------------------

    At the State level for the DOL programs, the Departments made the 
following changes, which are presented in Exhibit 9. In the Final Rule, 
required compliance activities are measured biennially and instead of 
assuming a constant level of effort for each biennial activity, we 
assumed that the level of effort will be slightly higher for managers 
and management analysts to modify the first 4-year State Plan and 
develop the second State Plan than it will be to produce new State 
Plans and modifications in subsequent years. The Departments expect 
that more effort initially will be expended to build relationships 
between new partners and to acquire experience drafting State Plans in 
a format that might be new to some partners. In addition, we added 
managers and lawyers and we replaced the technical staff in our 
previous estimate with the more appropriate occupational category of 
management analyst.

[[Page 55933]]



                                                 Exhibit 9--Updates to Costs of State-Level DOL Programs--New Elements to State and Local Plans
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                (b) New elements to state and local plans                                     (b) Unified or combined state plans: expanded content, biennial development and
----------------------------------------------------------------------------------------------------------             modification process, and submission coordination Requirements
                                                                                                          --------------------------------------------------------------------------------------
                                     Average      Average                                                                                      Average
          Labor category            number of    level  of         Frequency         Number of  affected                          Average     level  of                             Number of
                                     workers       effort                                  entities           Labor category     number of      effort          Frequency           affected
                                                   (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Technical staff..................            2           16  Annual...............  56 States............                         Four-Year Plan Modification--Third Year
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Admin. staff.....................            1           16                                                Management                     1           12  3rd year............  57 States.
                                                                                                            occupations staff.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Lawyer.............            1            4
                                  -------------------------------------------------
                                                                                                           Management analyst.            2           12
                                  -------------------------------------------------
                                                                                                           Office & admin.                1            4
                                                                                                            support staff.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Development of New 4-Year Plans--Fifth Year
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1           12  5th year............  57 States.
                                                                                                            occupations staff.
                                  -------------------------------------------------
                                                                                                           Lawyer.............            1            4
                                  -------------------------------------------------
                                                                                                           Management analyst.            2           12
                                  -------------------------------------------------
                                                                                                           Office & admin.                1            4
                                                                                                            support staff.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Four-Year Plan Modification--Seventh Year
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1            8  7th year............  57 States.
                                                                                                            occupations staff.
                                  -------------------------------------------------
                                                                                                           Lawyer.............            1            4
                                  -------------------------------------------------
                                                                                                           Management analyst.            2            8
                                  -------------------------------------------------
                                                                                                           Office & admin.                1            4
                                                                                                            support staff.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Development of New 4-Year Plans--Ninth Year
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1           10  9th year............  57 States.
                                                                                                            occupations staff.
                                  -------------------------------------------------
                                                                                                           Lawyer.............            1            4
                                  -------------------------------------------------
                                                                                                           Management analyst.            2           10
                                  -------------------------------------------------
                                                                                                           Office & admin.                1            4
                                                                                                            support staff.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 10 presents the changes made by the Departments at the 
State level for the AEFLA program. The Departments considered the State 
office's historical level of effort for State Plan development. The 
Departments expect that it will take more effort initially to build 
relationships between new partners and to acquire experience drafting 
State Plans in a format that may be new to some partners. We concluded 
that the AEFLA State office could leverage economies of scale for the 
biennial State Plan development and modification process required under 
WIOA. That is, established procedures and experienced staff already 
will be in place from previous State Plan efforts to gather, refine, 
and incorporate input for modification of the new elements. In 
addition, we anticipate that the extent of necessary plan modifications 
will decrease over time as the elements are improved with each revision 
cycle. Burdens will be higher in the fifth and ninth years to account 
for the additional burden involved with developing new State Plans. 
Furthermore, we reduced the number of managers from five to four (three 
of which are categorized as social and community service managers). We 
removed technical and administrative staff because we concluded that 
those occupational categories are not typically involved in State Plan 
development. In addition, we removed the consultant cost because we 
concluded that consultants are not commonly engaged in State Plan 
development.

[[Page 55934]]



                                                Exhibit 10--Updates to Costs of State-Level AEFLA Programs--New Elements to State and Local Plans
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              (b) New elements to state and local plans                                     (b) Unified or combined state plans: Expanded content, biennial development and
------------------------------------------------------------------------------------------------------               modification process, and submission coordination requirements
                                                                                                      ------------------------------------------------------------------------------------------
                                      Average     Average                                                                                  Average
          Labor  category            number of   level  of        Frequency       Number of  affected                          Average    level  of                         Number of  affected
                                      workers     effort                                entities          Labor category      number of    effort          Frequency              entities
                                                  (hrs.)                                                                       workers     (hrs.)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager...........................           5          40  Biennial............  57 States..........                           Four-Year Plan Modification--Third Year
-----------------------------------------------------------                                           ------------------------------------------------------------------------------------------
Counsel staff.....................           1          20                                             Management                     1          10  3rd year............  57 States.
                                                                                                        occupations staff.
-----------------------------------------------------------                                           ----------------------------------------------
Technical staff...................           2          40                                             Lawyer..............           1          10
-----------------------------------------------------------                                           ----------------------------------------------
Admin. staff......................           5          20                                             Social & community             3          10
                                                                                                        service manager.
-----------------------------------------------------------                                           ------------------------------------------------------------------------------------------
Consultant cost...................          $25,000                                                                           Development of New 4-Year Plans--Fifth Year
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     1          15  5th year............  57 States.
                                                                                                        occupations staff.
                                   ----------------------------------------------
                                                                                                       Lawyer..............           1          15
                                   ----------------------------------------------
                                                                                                       Social & community             3          15
                                                                                                        service manager.
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Four-Year Plan Modification--Seventh Year
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     1           5  7th year............  57 States.
                                                                                                        occupations staff.
                                   ----------------------------------------------
                                                                                                       Lawyer..............           1           5
                                   ----------------------------------------------
                                                                                                       Social & community             3           5
                                                                                                        service manager.
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Development of New 4-Year Plan--Ninth Year
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     1          10  9th year............  57 States.
                                                                                                        occupations staff.
                                   ----------------------------------------------
                                                                                                       Lawyer..............           1          10
                                   ----------------------------------------------
                                                                                                       Social & community             3          10
                                                                                                        service manager.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following updates to the State VR program, 
which are shown in Exhibit 11. Instead of assuming a constant level of 
effort for each biennial activity, we assumed the level of effort will 
be highest for modifying the first new 4-year State Plan in the third 
year, will decrease slightly for developing the second 4-year State 
Plan in the fifth year, and will remain at a slightly lower level for 
the subsequent development and modification process. Again, this 
decrease over time reflects the initial effort to build relationships 
between new partners and to acquire experience drafting State Plans in 
a format that might be new to some partners. In addition, we replaced 
the technical staff in our previous estimate with the more appropriate 
occupational category of social and community service manager.

                                                 Exhibit 11--Updates to Costs of State-Level VR Programs--New Elements to State and Local Plans
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              (b) New elements to state and local plans                                     (b) Unified or combined state plans: Expanded content, biennial development and
------------------------------------------------------------------------------------------------------               modification process, and submission coordination requirements
                                                                                                      ------------------------------------------------------------------------------------------
                                      Average     Average                                                                                  Average
          Labor  category            number of   level  of        Frequency       Number of  affected                          Average    level  of                         Number of  affected
                                      workers     effort                                entities          Labor category      number of    effort          Frequency              entities
                                                  (hrs.)                                                                       workers     (hrs.)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager...........................           1           5  Biennial............  80 VR agencies.....                           Four-Year Plan Modification--Third Year
-----------------------------------------------------------                                           ------------------------------------------------------------------------------------------
Technical staff...................           1           5                                             Management                     2          14  3rd year............  80 VR agencies.
                                                                                                        occupations staff.
----------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Social & community             2          14
                                                                                                        service manager.
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Development of New 4-Year Plan--Fifth Year
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 55935]]

 
                                                                                                       Management                     2          10  5th year............  80 VR agencies.
                                                                                                        occupations staff.
                                   ----------------------------------------------
                                                                                                       Social & community             2          10
                                                                                                        service manager.
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Four-Year Plan Modification--Seventh Year
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     2           7  7th year............  80 VR agencies.
                                                                                                        occupations staff.
                                   ----------------------------------------------
                                                                                                       Social & community             2           7
                                                                                                        service manager.
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Development of New 4-Year Plan--Ninth Year
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     2           7  9th year............  80 VR agencies.
                                                                                                        occupations staff.
                                   ----------------------------------------------
                                                                                                       Social & community             2           7
                                                                                                        service manager.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    For the AEFLA program at the local level, the Departments made the 
following changes, which are presented in Exhibit 12. We have concluded 
that local AEFLA staff will not bear the burden for reviewing State and 
Local Plans because we have concluded that reviewing State and Local 
Plans is not the role of local AEFLA staff. Therefore, we removed all 
cost inputs at the local level related to this provision.

                                                Exhibit 12--Updates to Costs of Local-Level AEFLA Programs--New Elements to State and Local Plans
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              (b) New elements to state and local plans                                                                            NA
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                  Average
                                      Average    level  of                        Number of  affected                          Average    level  of                         Number of  affected
          Labor  category            number of    effort          Frequency             entities          Labor category      number of    effort          Frequency              entities
                                      workers     (hrs.)                                                                       workers     (hrs.)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager...........................          40          40  Biennial............  57 States..........                                             N/A
-----------------------------------------------------------
Admin. staff......................          40          20
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Development and Updating of State Performance Accountability Measures
    This section describes the updates to the NPRM's provision (c) 
``Development and Updating of State Performance Accountability 
Measures.'' In this Final Rule, this cost provision has been included 
in provision (c) ``Performance Accountability System,'' and it captures 
the cost of: (1) Developing and updating the State performance 
accountability system; (2) implementing measures for data collection 
and reporting on the effectiveness in serving employers; (3) 
negotiating levels of performance; (4) running the statistical 
adjustment model to adjust levels of performance based on actual 
economic conditions and characteristics of participants; (5) providing 
technical assistance to States; (6) obtaining UI wage data; and (7) 
purchasing data analytic software and performing training. For these 
activities, the total 10-year cost (undiscounted) increased from $128.9 
million in the NPRM to $320.0 million in this Final 
Rule.30 31 These revised cost estimates can be found under 
the subsections ``Development and Updating of State Performance 
Accountability Systems,'' ``Negotiation of Levels of Performance,'' 
``Running Statistical Adjustment Model to Adjust Levels of Performance 
Based on Actual Economic Conditions and Characteristics of 
Participants,'' ``Technical Assistance to States,'' ``Obtain UI Wage 
Data,'' and ``Data Analytic Software and Training,'' in provision (c) 
of this Final Rule.
---------------------------------------------------------------------------

    \30\ A portion of the $320.0 million in costs accounts for 
software and IT systems costs from provision (e) ``Development of 
Strategies for Aligning Technology and Data Systems across One-Stop 
Partner Programs,'' provision (i) ``Performance Reports,'' and 
provision (j) ``Evaluation of State Programs.'' Thus, this value 
overstates how much costs have increased in this Final Rule relative 
to the NPRM.
    \31\ This variance in cost is mainly due to new burdens for 
negotiating levels of performance and running statistical adjustment 
models to adjust levels of performance and to new Federal-level 
burdens for the VR program to develop and update the State 
performance accountability systems.
---------------------------------------------------------------------------

    At the Federal level for the DOL programs, the Departments made the 
following changes, which are presented in Exhibit 13. We added a one-
time Federal software and IT systems cost of $750,000 to upgrade the 
system to meet the requirements of WIOA. Following discussions with 
additional program experts, we accounted for the effort related to 
negotiating levels of performance and adjusting levels of performance 
based on economic

[[Page 55936]]

conditions and the characteristics of participants. For negotiations, 
we added one manager and two management analysts. The biennial level of 
effort is estimated at 8 hours for both occupational categories. This 
additional level of effort is required for existing staff to compile 
new inputs that were not required under WIA. For adjusting levels of 
performance, we also added one manager and two computer systems 
analysts to account for running the regression model twice per year as 
required under WIOA rather than only once per year as required under 
WIA. The annual level of effort is estimated at 250 hours for managers 
and 1,000 hours for computer systems analysts. Furthermore, licensing 
fees of $10,000 will be incurred to purchase the statistical software 
used to perform the regression analysis and modeling.

                                Exhibit 13--Updates to Costs of Federal-Level DOL Programs--Development and Updating of State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
              (c) Development and updating of state performance accountability measures                                          (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                  Average
                                     Average     level  of                        Number of  affected                          Average    level  of                         Number of  affected
         Labor  category            number of      effort         Frequency             entities          Labor category      number of    effort          Frequency              entities
                                     workers       (hrs.)                                                                      workers     (hrs.)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Development and Updating of State Performance Accountability Systems
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Software/IT systems          $750,000         One time............  1
                                                                                                        cost.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Negotiation of Levels of Performance
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     1           8  1st year, then every  1
                                                                                                        occupations staff                             2 years.
                                                                                                        (GS-14, Step 5).
                                  -----------------------------------------------
                                                                                                       Management analyst             2           8
                                                                                                        (GS-12, Step 5).
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Running Statistical Adjustment Model to Adjust Levels of Performance Based on Actual
                                                    Economic Conditions and Characteristics of Participants
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     1         250  Annual..............  1
                                                                                                        occupations staff
                                                                                                        (GS-14, Step 5).
                                  -----------------------------------------------
                                                                                                       Computer systems               2       1,000
                                                                                                        analysts (GS-13,
                                                                                                        Step 5).
                                  -----------------------------------------------
                                                                                                       Licensing fee.......          $10,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following updates to the Federal-level 
AEFLA program, which are presented in Exhibit 14. We accounted for the 
additional burden for Federal staff to negotiate levels of performance 
for the new performance indicators under WIOA. We added four managers 
and four social community service managers to perform these activities. 
The biennial level of effort for each occupational category is 
estimated at 24 hours for each staff member.
    The Departments also revised the estimates from the NPRM to include 
an important source of Federal burden for running the new statistical 
adjustment model. In the NPRM, we originally estimated no hours for 
this activity. After further review and consideration, however, we 
concluded that Federal staff hours will be required annually to account 
for running the statistical adjustment model twice per year as required 
under WIOA. We added two managers at 40 hours each and two management 
analysts at 80 hours each to perform these tasks annually.
    In addition, the Departments added a one-time Federal consultant 
cost of $1 million in the second year to provide technical assistance 
to States in the collection of data to comply with the new requirements 
relating to the WIOA performance accountability indicators.

                               Exhibit 14--Updates to Costs of Federal-Level AEFLA Programs--Development and Updating of State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
              (c) Development and updating of state performance accountability measures                                          (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                  Average
                                     Average     level  of                        Number of  affected                          Average    level  of                         Number of  affected
         Labor  category            number of      effort         Frequency             entities          Labor category      number of    effort          Frequency              entities
                                     workers       (hrs.)                                                                      workers     (hrs.)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 N/A         Negotiation of Levels of Performance
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     4          24  1st year, then every  1
                                                                                                        occupations staff                             2 years.
                                                                                                        (GS-14, Step 5).
                                  -----------------------------------------------

[[Page 55937]]

 
                                                                                                       Social & community             4          24
                                                                                                        service manager (GS-
                                                                                                        13, Step 5).
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Running Statistical Adjustment Model to Adjust Levels of Performance Based on Actual
                                                    Economic Conditions and Characteristics of Participants
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     2          40  Annual..............  1
                                                                                                        occupations staff
                                                                                                        (GS-14, Step 5).
                                  -----------------------------------------------
                                                                                                       Management analysts            2          80
                                                                                                        (GS-12, Step 5).
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Technical Assistance to States
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Consultant cost.....        $1,000,000        2nd year............  1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 15 presents the following changes made by the Departments 
to the Federal level for the VR program. After consulting with 
additional program experts, we accounted for and revised the level of 
effort needed to develop and update State performance accountability 
systems, negotiate levels of performance, and run the statistical 
adjustment model to adjust levels of performance based on actual 
economic conditions and characteristics of participants.
    For developing and updating State performance accountability 
systems, the Departments added two data management specialists 
positions, one of which will be General Schedule (GS)-level 14 and the 
other GS-level 13. Both specialists will devote 768.63 hours in the 
first year of the rule to program the database and perform related 
software development tasks. For negotiations, we added four managers to 
reflect the analysis and review of State and Federal data during the 
negotiation process. The level of effort for the managers is estimated 
at 12 hours each biennially. For adjusting levels of performance, we 
added two managers and two database administrators to review the State 
and Federal data relative to the adjustments made to the levels of 
performance by the final run of the model. The level of effort for 
managers is estimated at 52 hours each annually, while the level of 
effort for database administrators is estimated at 156 hours each 
annually.

                                Exhibit 15--Updates to Costs of Federal-Level VR Programs--Development and Updating of State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
              (c) Development and updating of state performance accountability measures                                          (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                  Average
                                     Average     level  of                        Number of  affected                          Average    level  of                         Number of  affected
         Labor  category            number of      effort         Frequency             entities          Labor category      number of    effort          Frequency              entities
                                     workers       (hrs.)                                                                      workers     (hrs.)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Development and Updating of State Performance Accountability Systems
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Data Management                1      768.63  One time............  1.
                                                                                                        Specialist (GS-14,
                                                                                                        Step 5).
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Data Management                1      768.63  One time............  1.
                                                                                                        Specialist (GS-13,
                                                                                                        Step 5).
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Negotiation of Levels of Performance
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     4          12  1st year, then every  1.
                                                                                                        occupations staff                             2 years.
                                                                                                        (GS-14, Step 5).
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Running Statistical Adjustment Model to Adjust Levels of Performance Based on Actual
                                                    Economic Conditions and Characteristics of Participants
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     2          52  Annual..............  1.
                                                                                                        occupations staff
                                                                                                        (GS-14, Step 5).
                                  -----------------------------------------------
                                                                                                       Database admin. (GS-           2         156
                                                                                                        13, Step 5).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 55938]]

    At the State level for the DOL programs, the Departments made the 
following updates, which are presented in Exhibit 16. We replaced the 
technical staff in our previous estimate with the more appropriate 
occupational category of computer systems analyst. Following 
discussions with program experts, we increased the level of effort for 
each administrative staff member from 32 to 72 hours, and we decided 
that costs related to the work performed by staff and the software and 
IT systems will be incurred only once rather than annually. In 
addition, we accounted for the effort related to negotiating levels of 
performance and adjusting levels of performance. For negotiations, we 
added one manager and two office and administrative support staff 
members. The estimated level of effort for each staff member in both 
occupational categories is 8 hours biennially. For adjusting levels of 
performance, we added one manager, two computer systems analysts, and 
two office and administrative support staff members. These staff 
members will gather and input various data points to the tool, which 
then will create statewide levels of performance for each WIOA 
performance indicator. The estimated annual level of effort for each 
manager, computer systems analyst, and office and administrative 
support staff member is 10 hours, 40 hours, and 20 hours, respectively.

                                 Exhibit 16--Updates to Costs of State-Level DOL Programs--Development and Updating of State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
              (c) Development and updating of state performance accountability measures                                          (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                  Average
                                     Average     level  of                        Number of  affected                          Average    level  of                         Number of  affected
         Labor  category            number of      effort         Frequency             entities          Labor category      number of    effort          Frequency              entities
                                     workers       (hrs.)                                                                      workers     (hrs.)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           32  Annual.............  56 States..........             Development and Updating of State Performance Accountability Systems
------------------------------------------------------------                                          ------------------------------------------------------------------------------------------
Technical Staff..................            3           80                                            Management                     1          32  One time............  57 SWAs.
                                                                                                        occupations staff.
------------------------------------------------------------                                          ----------------------------------------------
Admin. staff.....................            1           32                                            Computer systems               3          80
                                                                                                        analyst.
------------------------------------------------------------                                          ----------------------------------------------
Software/IT systems cost.........          $100,000                                                    Office & admin.                1          72
                                                                                                        support staff.
------------------------------------------------------------                                          --------------------------------------------------------------------
Licensing fee....................           $50,000                                                    Software/IT systems          $100,000
                                                                                                        cost.
---------------------------------------------------------------------------------                     --------------------------------------------------------------------
Consultant cost..................           $75,000          One time...........                       Licensing fee.......          $50,000         Annual..............
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Consultant cost.....          $75,000         One time............
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Negotiation of Levels of Performance
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     1           8  1st year, then every  57 States.
                                                                                                        occupations staff.                            2 years.
                                  -----------------------------------------------
                                                                                                       Office & admin.                2           8
                                                                                                        support staff.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Running Statistical Adjustment Model to Adjust Levels of Performance Based on Actual
                                                    Economic Conditions and Characteristics of Participants
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Management                     1          10  Annual..............  57 States.
                                                                                                        occupations staff.
                                  -----------------------------------------------
                                                                                                       Computer systems               2          40
                                                                                                        analysts.
                                  -----------------------------------------------
                                                                                                       Office & admin.                2          20
                                                                                                        support staff.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following updates to the State-level AEFLA 
program, which are presented in Exhibit 17. For the costs related to 
developing and updating State performance accountability systems, we 
reduced the number of managers from five to four after determining that 
this number will reflect more accurately the staffing level needed 
across all States and outlying areas. Three of these staff members are 
categorized as social and community service managers, and we decreased 
the level of effort per staff member from 80 hours to 60 hours. We 
replaced the two technical staff in our previous estimate with the more 
appropriate occupational categories of database administrator and 
computer systems analyst. After consideration, we revised the 
calculation to exclude the five administrative staff members included 
in our previous estimate, because those occupational categories are 
generally not involved in these tasks. We eliminated a one-time 
consultant cost because we have concluded that consultants are 
typically not engaged in this task. We added an annual $350,000 
software and IT systems cost for the State AEFLA data system. This 
annual $350,000 software and IT systems cost replaces one-time and 
annual State

[[Page 55939]]

software and IT systems costs that were previously attributed in the 
NPRM to provisions (i) ``Performance Reports'' and (j) ``Evaluation of 
State Programs.'' We have concluded that using annual State software 
and IT systems costs, rather than one-time software and IT systems 
costs, more accurately reflects the typical IT funding pattern of the 
State-level AEFLA program.
    These changes also are based on the review of public comments, 
which resulted in a decision by the Departments that each exit by a 
participant during a program year will count as a separate response to 
be used for data collection and outcome reporting for the performance 
indicators. Prior to WIOA, the AEFLA program reported only unduplicated 
counts of participant outcomes. Making the change to an accountability 
structure that is based on reporting outcomes for each exit by a 
participant during a program year represents a significant operational 
change for the AEFLA program and will require a commensurate increase 
in the level of effort needed for implementation.
    In addition, after discussions with program experts, the 
Departments accounted for additional burden for State staff to 
negotiate levels of performance for the new indicators under WIOA. We 
added one manager and one social community service manager to perform 
these activities. The biennial level of effort per staff member is 
estimated at 12 hours.
    The Departments eliminated the State burden for running the 
statistical adjustment model, after consulting with statistical experts 
and determining that the model will only be run in the Federal office 
using aggregate State data.

                                Exhibit 17--Updates to Costs of State-Level AEFLA Programs--Development and Updating of State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                (c) Development and updating of state performance accountability measures                                          (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            5           80  One time.............  57 States............           Development and Updating of State Performance Accountability Systems
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            2           80                                                Management                     1           60  One time............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            5           80                                                Computer systems               1           80
                                                                                                            analyst.
------------------------------------------------------------                                              -----------------------------------------------
Consultant cost..................           $25,000                                                        Social & community             3           60
                                                                                                            service manager.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Database                       1           80
                                                                                                            administrator.
                                  ------------------------------------------------------------------------
                                                                                                           Software/IT systems          $350,000          Annual..............
                                                                                                            cost.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Negotiation of Levels of Performance
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1           12  1st year, then every  57 States.
                                                                                                            occupations staff.                             2 years.
                                  -------------------------------------------------
                                                                                                           Social & community             1           12
                                                                                                            service manager.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Under the ``Development and Updating of State Performance Accountability Systems,'' the software and IT systems costs are a combination of inputs that were previously accounted for under
  provisions (i) ``Performance Reports'' and (j) ``Evaluation of State Programs.''

    Exhibit 18 presents the updates to the State VR program. Based on 
public comment and further deliberation, the Departments significantly 
revised the estimated State-level burden associated with the 
development and updating of State VR agency performance accountability 
systems. First, to more appropriately account for the burden associated 
with the establishment of State performance goals and the State's 
evaluation and analysis of progress toward such goals, the Departments 
reduced the number of managers from six to four, three of which are 
categorized as social and community service managers, and replaced the 
four technical staff with two database administrators. However, this 
decrease in the number of staff is offset by the increase in the level 
of effort from 10 to 80 hours for managers and 10 to 100 hours for 
database administrators. We also included SRC members because they will 
need to play an advisory role in developing and updating levels of 
performance for the State VR agency. These costs will occur biennially.
    Although the Departments estimate that each VR agency will require 
computer systems analysts for this one-time task, the related burden 
for changing a State's CMS has been broken down to reflect the 
variation among the 80 State VR agencies with respect to their size and 
whether they contract for outside assistance for developing and 
maintaining their CMS. For example, the level of effort for the 30 VR 
agencies that have a maintenance contract with a CMS vendor to make 
system updates will be less than the 50 agencies that are without 
vendor support. The burden hours shown in Exhibit 18 for tasks to be 
carried out by computer systems analysts has been adjusted to reflect 
only those hours we attribute to new requirements under sec. 116 in 
title I of WIOA. The remaining hours related to this new burden are 
accounted for in the RIA accompanying the final regulations for ``State 
Vocational Rehabilitation Services Program; State Supported Employment 
Services Program; Limitations on Use of Subminimum Wage,'' which is 
published in this edition of the Federal Register. We also

[[Page 55940]]

added the proportional cost of annual licensing fees of $6,930 for 48 
VR agencies for vendor-supplied CMS software.
    In addition, following discussions with program experts, the 
Departments accounted for and revised the level of effort needed to 
negotiate and adjust levels of performance and we are adding one 
manager, two social and community service managers, and two management 
analysts to accommodate the increased level of effort. Similarly, we 
used input from public comment and program experts to revise the level 
of effort needed to apply the statistical adjustment model and we are 
adding one manager, one computer systems analyst, one database 
administrator, and one management analyst to account for the effort 
needed to integrate the statistical adjustment model into the process 
of establishing expected levels of performance and negotiated levels of 
performance.
    In response to public comment and discussions with program experts, 
the Departments have included the estimated burden for obtaining UI 
Wage Data by VR Agencies. The estimates reflect that VR agencies will 
incur new costs for obtaining UI wage data on participants that exit 
the program after receiving services and will incur different levels of 
annual data query costs related to obtaining UI wage data, depending on 
the size of the agency. State VR agencies operating under the increased 
data and performance requirements of WIOA will also need the capability 
to analyze their program performance data more effectively. In response 
to public comment, we added a new software and IT systems cost for data 
analytic software and related training. The amount of the software and 
IT systems costs varies, depending on the size of the agency.

                                 Exhibit 18--Updates to Costs of State-Level VR Programs--Development and Updating of State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                (c) Development and updating of state performance accountability measures                                          (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            6           10  One time.............  80 VR agencies.......           Development and Updating of State Performance Accountability Systems
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            4           10                                                Management                     1           80  1st year, then every  80 VR agencies.
                                                                                                            occupations staff.                             2 years.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Social & community             3           80
                                                                                                            service manager.
                                  -------------------------------------------------
                                                                                                           Database                       2          100
                                                                                                            administrator.
                                  -------------------------------------------------
                                                                                                           SRC Board members..           12            3
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Computer systems               5          360  One time............  5 (large) VR
                                                                                                            analyst.                                                             agencies w/o
                                                                                                                                                                                 vendor support.
                                               ------------------------------------                       --------------------------------------------------------------------------------------
                                                                                                                                          2          360                        45 (small &
                                                                                                                                                                                 med.) VR
                                                                                                                                                                                 agencies w/o
                                                                                                                                                                                 vendor support.
                                               ------------------------------------                       --------------------------------------------------------------------------------------
                                                                                                                                          2           54                        30 VR agencies w/
                                                                                                                                                                                 CMS vendor
                                                                                                                                                                                 contracts.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Licensing fee......           $6,930           Annual..............  48 VR agencies.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Negotiation of Levels of Performance
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1           12  1st year, then every  80 VR agencies.
                                                                                                            occupations staff.                             2 years.
                                  -------------------------------------------------
                                                                                                           Social & community             2           12
                                                                                                            service manager.
                                  -------------------------------------------------
                                                                                                           Management analyst.            2           12
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 55941]]

 
                                       Running Statistical Adjustment Model to Adjust Levels of Performance Based on Actual
                                                     Economic Conditions and Characteristics of Participants
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1            4  Annual..............  80 VR agencies.
                                                                                                            occupations staff.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Computer systems               1            4
                                                                                                            analyst.
                                  -------------------------------------------------
                                                                                                           Database                       1           20
                                                                                                            administrator.
                                  -------------------------------------------------
                                                                                                           Management analyst.            1            4
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Obtain UI Wage Data
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Data query cost....           $20,000          Annual..............  10 (large) VR
                                                                                                                                                                                 agencies.
                                               ------------------------------------                       --------------------------------------------------------------------------------------
                                                                                                                                         $8,000                                 42 (med.) VR
                                                                                                                                                                                 agencies.
                                               ------------------------------------                       --------------------------------------------------------------------------------------
                                                                                                                                         $4,000                                 28 (small) VR
                                                                                                                                                                                 agencies.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Data Analytic Software and Training
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Software/IT systems           $25,000          One time............  10 (large) VR
                                                                                                            cost.                                                                agencies.
                                               ------------------------------------                       --------------------------------------------------------------------------------------
                                                                                                                                         $15,000                                42 (med.) VR
                                                                                                                                                                                 agencies.
                                               ------------------------------------                       --------------------------------------------------------------------------------------
                                                                                                                                         $10,000                                28 (small) VR
                                                                                                                                                                                 agencies.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    At the local level for the DOL programs, the Departments made the 
following updates, which are presented in Exhibit 19. Based on 
discussions with program experts, we added one manager and two office 
and administrative support staff members to account for the effort 
needed to negotiate levels of performance biennially. The biennial 
level of effort per staff member for both occupational categories is 
estimated at 8 hours. We also added one manager, two computer systems 
analysts, and two office and administrative support staff members to 
account for the effort needed to run the statistical adjustment model 
annually. The estimated annual level of effort per staff member for the 
manager, computer systems analysts, and administrative staff members is 
10 hours, 40 hours, and 20 hours, respectively.

[[Page 55942]]



                                 Exhibit 19--Updates to Costs of Local-Level DOL Programs--Development and Updating of State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                (c) Development and updating of state performance accountability measures                                          (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   N/A         Negotiation of Levels of Performance
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1            8  1st year then every   580 Local WDBs.
                                                                                                            occupations staff.                             2 years.
                                  -------------------------------------------------
                                                                                                           Office & admin.                2            8
                                                                                                            occupations staff.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Running Statistical Adjustment Model to Adjust Levels of Performance Based on Actual
                                                     Economic Conditions and Characteristics of Participants
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1           10  Annual..............  580 Local WDBs.
                                                                                                            occupations staff.
                                  -------------------------------------------------
                                                                                                           Computer systems               2           40
                                                                                                            analysts.
                                  -------------------------------------------------
                                                                                                           Office & admin.                2           20
                                                                                                            support staff.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 20 presents the updates to the local-level AEFLA program. 
The Departments considered the typical experience of local involvement 
and concluded that local staff will participate in statewide 
stakeholder meetings, convened by the State AEFLA office, to develop 
and update State performance accountability measures. We found that the 
level of effort for local AEFLA programs will be significantly less 
than previously expected because their role would be limited to those 
stakeholder meetings. Note that instead of presenting the costs at the 
State level as in the NPRM, we are presenting costs at the program, or 
local, level using the total number of local AEFLA programs reflected 
in actual program data submitted by States for the most recent 
reporting year.

                                Exhibit 20--Updates to Costs of Local-Level AEFLA Programs--Development and Updating of State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                (c) Development and updating of state performance accountability measures                                          (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           40           80  One-time.............  57 States............           Development and Updating of State Performance Accountability Systems
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................           40           80                                                Management                     1            4  One-time............  2,396 local
                                                                                                            occupations staff.                                                   programs.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Database                       1            4
                                                                                                            administrator.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Identification and Dissemination of Best Practices
    After further consideration, the Departments decided that the costs 
associated with provision (d) ``Identification and Dissemination of 
Best Practices'' in the NPRM are more appropriate in the DOL WIOA Final 
Rule because the requirements affect only State WDBs. This provision 
now can be found as provision (c) in the DOL WIOA Final Rule. 
Therefore, this provision and its costs that result from the inputs 
presented in Exhibit 21 ($2.9 million) are no longer included in the 
economic analysis for this Final Rule.

[[Page 55943]]



                                         Exhibit 21--Updates to Costs of Local-Level DOL State WDBs--Identification and Dissemination of Best Practices
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                          (d) Identification and dissemination of best practices                                                        Moved to DOL WIOA final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           20  One-time.............  40 States............                               N/A. See DOL WIOA Final Rule
------------------------------------------------------------
Technical staff..................            2           40
------------------------------------------------------------
Admin. staff.....................            1           20
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Development of Strategies for Aligning Technology and Data Systems 
Across One-Stop Partner Programs To Enhance Service Delivery and 
Improve Efficiencies
    This section describes the updates to the NPRM's provision (e) 
``Development of Strategies for Aligning Technology and Data Systems 
across One-Stop Partner Programs to Enhance Service Delivery and 
Improve Efficiencies.'' In the Final Rule's subject-by-subject 
analysis, this cost provision is combined into provision (c) 
``Performance Accountability System,'' and it captures the cost of 
aligning technology and data systems across one-stop partner programs. 
For this activity, the total 10-year cost (undiscounted) decreased from 
$356.6 million in the NPRM to $166.5 million in the Final Rule.\32\ 
These revised cost estimates can be found under the subsection 
``Development and Updating of State Performance Accountability 
Systems'' in provision (c) of the Final Rule.
---------------------------------------------------------------------------

    \32\ The variance in cost is due to changes to the assumptions 
used to estimate costs (e.g., number of staff, occupational 
categories, level of effort, and frequency.) More specifically, this 
variance in cost is due to the reduction in annual software and IT 
systems cost for the State-level AEFLA program and the removal of 
the local-level AEFLA program costs. The Final Rule does not 
implement any policy changes over the NPRM that impact this cost.
---------------------------------------------------------------------------

    Exhibit 22 presents the changes made by the Departments for the 
State Workforce Agencies (SWAs) State-level program. After further 
consideration, we removed the manager and technical staff members and 
replaced them with consultant and software and IT systems costs. We 
estimated that the 23 SWAs that are farther in the process of aligning 
their technology and data systems will incur $100,000 in first-year 
consultant costs for designing the new systems, $200,000 in first-year 
software and IT systems costs for purchasing hardware and implementing 
the new systems, and $100,000 in software and IT systems costs in the 
following 2 years for system maintenance. We estimate that the 34 SWAs 
that use legacy systems will require more effort to align their 
technology and data systems. These SWAs will incur $200,000 in first-
year consultant and software and IT system costs; $100,000 and $200,000 
in second-year consultant and software and IT system costs, 
respectively; and $100,000 in software and IT systems costs for 
maintenance in the third through fifth years.

                            Exhibit 22--Updates to Costs of SWA--Development of Strategies for Aligning Technology and Data Systems Across One-Stop Partner Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 (e) Development of strategies for aligning technology and data systems across one-stop partner programs                           (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           80  One time.............  56 States............          Aligning Technology and Data Systems across One-stop Partner Programs
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            2          120                                                Consultant cost              $100,000          One time............  23 SWAs.
                                                                                                            (``Low-Effort''
                                                                                                            SWAs).
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Software and IT              $200,000          One time............
                                                                                                            systems cost
                                                                                                            (``Low-Effort''
                                                                                                            SWAs).
                                  ------------------------------------------------------------------------
                                                                                                           Software and IT              $100,000          2nd & 3rd years.....
                                                                                                            systems cost
                                                                                                            (``Low-Effort''
                                                                                                            SWAs).
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Consultant cost              $200,000          One time............  34 SWAs.
                                                                                                            (``High-Effort''
                                                                                                            SWAs).
                                  ------------------------------------------------------------------------
                                                                                                           Consultant cost              $100,000          2nd year............
                                                                                                            (``High-Effort''
                                                                                                            SWAs).
                                  ------------------------------------------------------------------------
                                                                                                           Software and IT              $200,000          1st & 2nd years.....
                                                                                                            systems cost
                                                                                                            (``High-Effort''
                                                                                                            SWAs).
                                  ------------------------------------------------------------------------

[[Page 55944]]

 
                                                                                                           Software and IT              $100,000          3rd-5th years.......
                                                                                                            systems cost
                                                                                                            (``High-Effort''
                                                                                                            SWAs).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    For the AEFLA State-level program, the Departments made the 
following updates, which are shown in Exhibit 23. We removed the labor 
costs because these occupational categories are not generally involved 
in aligning technology and data systems. The annual software and IT 
systems cost decreased from $150,000 to $100,000 because we were 
initially accounting for some costs that are now accounted for in the 
costs for performance reports under provision (c) of the Final Rule. As 
a result of the opportunities created for greater program coordination 
under WIOA, we estimate that AEFLA State agencies will enhance their 
participation in the SLDS Grant Program, which supports the design, 
development, implementation, and expansion of P-20W (early learning 
through the workforce) longitudinal data systems.\33\ The annual IT 
systems cost of $100,000 estimated in Exhibit 23 accounts for this 
work.
---------------------------------------------------------------------------

    \33\ For more information on the SLDS Grant Program, see the 
U.S. Department of Education, Institute of Education Sciences, 
National Center for Education Statistics' Web site: https://nces.ed.gov/programs/slds/about_SLDS.asp.

                 Exhibit 23--Updates to Costs of State-Level AEFLA Programs--Development of Strategies for Aligning Technology and Data Systems Across One-Stop Partner Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 (e) Development of strategies for aligning technology and data systems across one-stop partner programs                           (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            5           40  Annual...............  57 States............          Aligning Technology and Data Systems across One-stop Partner Programs
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            2          120                                                Software/IT systems          $100,000          Annual..............  57 States.
                                                                                                            cost.
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Admin. staff.....................            5           40
------------------------------------------------------------
Software/IT systems cost.........          $150,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following changes to the VR program cost 
burden at the State level, which are presented in Exhibit 24. After 
further consideration, we removed the managers as well as the counsel 
and technical staff members and replaced them with consultant and 
software and IT systems costs. We estimated that the 32 VR agencies 
that are further in the process of aligning their technology and data 
systems will incur $100,000 in first-year consultant costs for 
designing the new systems, $200,000 in first-year software and IT 
systems costs for purchasing hardware and implementing the new systems, 
and $100,000 in software and IT systems costs in each of the following 
2 years for system maintenance. We estimate that the 48 VR agencies 
that use legacy systems will require more effort to align their 
technology and data systems. These VR agencies will incur $200,000 in 
first-year consultant and software and IT system costs; $100,000 and 
$200,000 in second-year consultant and software and IT system costs, 
respectively; and $100,000 in software and IT systems costs for 
maintenance in each year from the third through fifth years.

[[Page 55945]]



                  Exhibit 24--Updates to Costs of State-Level VR Programs--Development of Strategies for Aligning Technology and Data Systems Across One-Stop Partner Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 (e) Development of strategies for aligning technology and data systems across one-stop partner programs                           (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1            8  Annual...............  80 VR agencies.......          Aligning Technology and Data Systems across One-Stop Partner Programs
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Counsel staff....................            1            4                                                Consultant cost              $100,000          One time............  32 VR agencies.
                                                                                                            (``Low-Effort'' VR
                                                                                                            agencies).
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            1           16                                                Software and IT              $200,000          One time............
                                                                                                            systems cost
                                                                                                            (``Low-Effort'' VR
                                                                                                            agencies).
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Software and IT              $100,000          2nd & 3rd years.....
                                                                                                            systems cost
                                                                                                            (``Low-Effort'' VR
                                                                                                            agencies).
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Consultant cost              $200,000          One time............  48 VR agencies.
                                                                                                            (``High-Effort''
                                                                                                            VR agencies).
                                  ------------------------------------------------------------------------
                                                                                                           Consultant cost              $100,000          2nd year............
                                                                                                            (``High-Effort''
                                                                                                            VR agencies).
                                  ------------------------------------------------------------------------
                                                                                                           Software and IT              $200,000          1st & 2nd years.....
                                                                                                            systems cost
                                                                                                            (``High-Effort''
                                                                                                            VR agencies).
                                  ------------------------------------------------------------------------
                                                                                                           Software and IT              $100,000          3rd-5th years.......
                                                                                                            systems cost
                                                                                                            (``High-Effort''
                                                                                                            VR agencies).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    For the AEFLA program at the local level, the Departments made the 
following changes, which are shown in Exhibit 25. We have concluded 
that local AEFLA staff will not bear the burden for aligning technology 
and data systems because AEFLA data are collected and maintained at the 
State level in each State and outlying area. Therefore, we removed all 
cost inputs at the local level related to this provision.

                 Exhibit 25--Updates to Costs of Local-Level AEFLA Programs--Development of Strategies for Aligning Technology and Data Systems Across One-Stop Partner Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(e) Development of strategies for aligning technology and data systems across one-stop partner programs                                            N/A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Average                                                                                      Average
                                     Average    level  of                          Number of  affected                           Average     level  of                              Number of
         Labor  category            number of    effort          Frequency               entities           Labor category      number of      effort          Frequency            affected
                                     workers     (hrs.)                                                                          workers       (hrs.)                               entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................          40          40  Annual...............  57 States............                                            N/A
----------------------------------------------------------
Technical staff..................          40         120
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Unified or Combined State Plan
    This section describes the updates to the NPRM's provision (f) 
``Unified or Combined State Plans.'' In this Final Rule's subject-by-
subject analysis, this cost provision has been included in provision 
(b) ``Unified or Combined State Plans: Expanded Content, Biennial 
Development and Modification Process, and Submission Coordination 
Requirements,'' and it captures the cost of (1) reviewing and 
developing new 4-year Unified or Combined State Plans to ensure they 
satisfy the new content requirements and (2) coordinating actions for 
developing new 4-year Unified or Combined State Plans among the core 
programs administered by the Departments. For these activities, the 
total 10-year cost (undiscounted) decreased from $17.2 million in the 
NPRM to $9.6 million in this Final Rule.\34\ These revised cost 
estimates can be found under the subsections ``Expanded Content'' and 
``Coordinating Submission of State Plans'' in provision (b) of this 
Final Rule.
---------------------------------------------------------------------------

    \34\ This variance in cost is mainly due to the reduction in the 
number and types of workers expected to incur incremental cost for 
the local-level AEFLA program and a reduction in their level of 
effort.
---------------------------------------------------------------------------

    At the State level for the DOL programs, the Departments made the

[[Page 55946]]

following updates, which are presented in Exhibit 26: (1) We added a 
one-time cost to review and revise existing plans to ensure they 
include the new elements; (2) we concluded the costs will be incurred 
biennially rather than only in the second and sixth years of the 
analysis period; (3) we reduced the number of managers from two to one 
along with their level of effort; (4) we removed the lawyers; (5) we 
replaced the four technical staff members in our previous estimate with 
the more appropriate management analyst occupational category; and (6) 
we reduced the level of effort per analyst from 20 to 8 hours.

                                                   Exhibit 26--Updates to Costs of Local-Level DOL State WDBs--Unified or Combined State Plan
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                   (f) Unified or Combined State Plan                                        (b) Unified or Combined State Plans: Expanded Content, Biennial Development and
--------------------------------------------------------------------------------------------------------              Modification Process, and Submission Coordination Requirements
                                                                                                        ----------------------------------------------------------------------------------------
                                     Average     Average                                                                                      Average
         Labor  category            number of   level  of        Frequency         Number of  affected                           Average     level  of                              Number of
                                     workers     effort                                  entities           Labor category      number of      effort          Frequency            affected
                                                 (hrs.)                                                                          workers       (hrs.)                               entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           2          20  2nd & 6th years......  56 States............                                      Expanded Content
                                                                                                        ----------------------------------------------------------------------------------------
Counsel staff....................           1           8                                                Management                      4           20  One time.............  57 states.
                                                                                                          occupations staff.
----------------------------------------------------------                                              ------------------------------------------------
Technical staff..................           4          20                                                Lawyer..............            1            8
----------------------------------------------------------                                              ------------------------------------------------
Admin. staff.....................           1           8                                                Social & community              2           20
                                                                                                          service manager.
                                  -----------------------------------------------
                                                                                                         Office & admin.                 1            8
                                                                                                          support staff.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Coordinating Submission of State Plans
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Management                      1            8  1st year, then every   57 states.
                                                                                                          occupations staff.                              2 years.
                                  -----------------------------------------------
                                                                                                         Management analyst..            2            8
                                  -----------------------------------------------
                                                                                                         Office & admin.                 1            8
                                                                                                          support staff.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following updates to the State-level AEFLA 
program, which are presented in Exhibit 27. After consulting with 
additional program experts, we added a one-time cost to review and 
revise existing plans to ensure that they include the new elements. We 
concluded that the costs for coordinating submissions will be incurred 
biennially rather than only once. We reduced the number of managers 
from five to one, which is a more accurate reflection of typical 
staffing in a State adult education office, and reduced the level of 
effort because we have concluded that the process of coordinating the 
submission of the State Plan does not require the level of effort we 
initially estimated. We decreased the lawyer's level of effort from 8 
to 4 hours because we have concluded that the process of coordinating 
the submission the State Plan does not require the level of effort we 
initially estimated. We clarified that the work done by the two 
technical staff will be done by three social and community service 
managers because we have concluded that technical staff members are 
typically not involved in the process of coordinating the submission of 
the State Plan. We also decreased the number of administrative staff 
from five to one, which is a more accurate reflection of typical 
staffing in a State adult education office, and halved the level of 
effort for the staff member because we have concluded that the process 
of coordinating the submission of the State Plan does not cumulatively 
require more than 1 full day of work for the administrative staff 
member. Finally, we removed the $25,000 consultant cost because we have 
concluded that a consultant is not required for the submission of the 
State Plan.

                                                   Exhibit 27--Updates to Costs of State-Level AEFLA Programs--Unified or Combined State Plan
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                   (f) Unified or Combined State Plan                                        (b) Unified or Combined State Plans: Expanded Content, Biennial Development and
--------------------------------------------------------------------------------------------------------              Modification Process, and Submission Coordination Requirements
                                                                                                        ----------------------------------------------------------------------------------------
                                     Average     Average                                                                                      Average
         Labor  category            number of   level  of        Frequency         Number of  affected                           Average     level  of                              Number of
                                     workers     effort                                  entities           Labor  category     number of      effort          Frequency            affected
                                                 (hrs.)                                                                          workers       (hrs.)                               entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           5          24  One time.............  57 states............                                      Expanded Content
----------------------------------------------------------                                              ----------------------------------------------------------------------------------------
Counsel staff....................           1           8                                                Management                      1           20  One time.............  57 States.
                                                                                                          occupations staff.
----------------------------------------------------------                                              ------------------------------------------------

[[Page 55947]]

 
Technical staff..................           2          24                                                Lawyer..............            1           20
----------------------------------------------------------                                              ------------------------------------------------
Admin. staff.....................           5          16                                                Social & community              3           20
                                                                                                          service manager.
----------------------------------------------------------                                              ----------------------------------------------------------------------------------------
Consultant cost..................          $25,000                                                                                Coordinating Submission of State Plans
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Management                      1            8  1st year, then every   57 States.
                                                                                                          occupations staff.                              2 years.
                                  -----------------------------------------------
                                                                                                         Lawyer..............            1            4
                                  -----------------------------------------------
                                                                                                         Social & community              3            8
                                                                                                          service.
                                  -----------------------------------------------
                                                                                                         Office & admin.                 1            8
                                                                                                          support staff.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 28 presents the changes made by the Departments to the 
State level for the VR program. After further consideration, we added a 
one-time cost to review and revise existing plans to ensure they 
include the new elements. We concluded that these costs for 
coordinating submissions will be incurred biennially rather than 
annually and we doubled the level of effort per manager and social and 
community service manager. We replaced the technical staff in our 
previous estimate with the more appropriate occupational category of 
social and community service manager.

                                                     Exhibit 28--Updates to Costs of State-Level VR Programs--Unified or Combined State Plan
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                   (f) Unified or Combined State Plan                                        (b) Unified or Combined State Plans: Expanded Content, Biennial Development and
--------------------------------------------------------------------------------------------------------              Modification Process, and Submission Coordination Requirements
                                                                                                        ----------------------------------------------------------------------------------------
                                     Average     Average                                                                                      Average
         Labor  category            number of   level  of        Frequency         Number of  affected                           Average     level  of                              Number of
                                     workers     effort                                  entities           Labor category      number of      effort          Frequency            affected
                                                 (hrs.)                                                                          workers       (hrs.)                               entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           2           7  Annual...............  80 VR agencies.......                                      Expanded Content
----------------------------------------------------------                                              ----------------------------------------------------------------------------------------
Technical staff..................           2           7                                                Management                      2           21  One time.............  80 VR agencies.
                                                                                                          occupations staff.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Social & community              2           21
                                                                                                          service manager.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Coordinating Submission of State Plans
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Management                      2           14  1st year, then every   80 VR agencies.
                                                                                                          occupations staff.                              2 years.
                                  -----------------------------------------------
                                                                                                         Social & community              2           14
                                                                                                          service manager.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following changes to the local-level AEFLA 
program, which are presented in Exhibit 29. We considered the typical 
experience of local involvement and concluded that local staff will 
participate in statewide stakeholder meetings, convened by the State 
AEFLA office, to examine State Plan elements in need of modification 
and to gather input for those revisions. Therefore, we reduced the 
number of managers and removed the lawyers, technical and 
administrative staff, and local stakeholders and replaced them with 
social and community service managers. Note that instead of presenting 
the costs at the State level as in the NPRM, we are presenting costs at 
the program level.

[[Page 55948]]



                                                   Exhibit 29--Updates to Costs of Local-Level AEFLA Programs--Unified or Combined State Plan
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                    (f) Unified or combined state plan                                        (c) Unified or combined state plans: Expanded content, biennial development and
----------------------------------------------------------------------------------------------------------             modification process, and submission coordination requirements
                                                                                                          --------------------------------------------------------------------------------------
                                     Average      Average                                                                                      Average
          Labor category            number of    level  of         Frequency         Number of  affected                          Average     level  of                             Number of
                                     workers       effort                                  entities           Labor category     number of      effort          Frequency           affected
                                                   (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           40           24  One time.............  57 States............                          Coordinating Submission of State Plans
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Counsel staff....................            3            8                                                Management                     1            4  1st year, then every  2,396 local
                                                                                                            occupations staff.                             2 years.              programs.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................           40           24                                                Social & community             1            4
                                                                                                            service manager.
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Admin. staff.....................           40           16
------------------------------------------------------------
Local stakeholder................          100            8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Local Plan Revisions
    After further consideration, the Departments decided that the costs 
associated with provision (g) ``Local Plan Revisions'' in the NPRM are 
more appropriate in the DOL WIOA Final Rule. The costs associated with 
this provision now can be found under provision (m) ``Local and 
Regional Plan Modification'' in the DOL WIOA Final Rule. Therefore, 
this provision and its costs that result from the inputs presented in 
Exhibit 30 ($22.6 million) are no longer included in this Final Rule 
economic analysis.

                                                           Exhibit 30--Updates to Costs of Local-Level Programs--Local Plan Revisions
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         (g) Local plan revisions                                                                     Moved to the DOL WIOA final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Workforce Development Board Costs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            2           20  2nd & 6th years......  580 Local WDBs.......                               N/A. See DOL WIOA Final Rule
------------------------------------------------------------
Counsel staff....................            1            8
------------------------------------------------------------
Technical staff..................            4           20
------------------------------------------------------------
Admin. staff.....................            1            8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       AEFLA Program Costs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           40           24  One time.............  57 States............                               N/A. See DOL WIOA Final Rule
------------------------------------------------------------
Technical staff..................           40           24
------------------------------------------------------------
Admin. staff.....................           40           16
------------------------------------------------------------
Local stakeholders...............          100            8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

State Performance Accountability Measures
    This section describes the updates to the NPRM's provision (h) 
``State Performance Accountability Measures,'' which in this Final 
Rule's subject-by-subject analysis is included in provision (c) 
``Performance Accountability System.'' This provision captures the cost 
of collecting data to report on any additional State performance 
accountability indicators established by a State pursuant to WIOA sec. 
116(b)(2)(B). For this activity, the total 10-year cost (undiscounted) 
decreased from $11.7 million in the NPRM to $170,000 in the Final 
Rule.\35\ These revised cost estimates can be found under the 
subsections ``Additional State Performance Accountability Indicators 
(Beyond Required Performance Indicators)'' in provision (c) of the 
Final Rule.
---------------------------------------------------------------------------

    \35\ The variance in cost is mainly due to changes for State-
level DOL programs including: a reduction in the level of effort per 
worker; costs incurred once rather than annually; and the removal of 
annual software and IT systems costs and licensing fees and one-time 
consultant costs.
---------------------------------------------------------------------------

    At the State level for the DOL programs, the Departments made the

[[Page 55949]]

following updates, which are presented in Exhibit 31. After discussions 
with additional program experts, we made the following updates: (1) We 
concluded that costs will be incurred only once rather than annually; 
(2) we halved the level of effort for managers; (3) we replaced the 
technical staff in our previous estimate with the more appropriate 
occupational category of computer systems analyst and halved their 
level of effort; (4) we increased the level of effort from 32 to 36 
hours; and (5) we removed the software and IT systems cost, licensing 
fees, and consultant cost.

                                               Exhibit 31--Updates to Costs of State-Level DOL Programs--State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              (h) State performance accountability measures                                                       (c) Performance accountability measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           32  Annual...............  5 States.............   Additional State Performance Accountability Indicators (Beyond Required Performance
                                                                                                                                                 Indicators)
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            3           80                                                Management                     1           16  One time............  5 States
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           32                                                Computer systems               3           40
                                                                                                            analyst.
------------------------------------------------------------                                              -----------------------------------------------
Software/IT systems cost.........          $100,000                                                        Office & admin.                1           36
                                                                                                            support staff.
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Licensing fee....................           $50,000
-----------------------------------------------------------------------------------
Consultant cost..................           $75,000          One time
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following updates at the State level for 
the AEFLA program, which are presented in Exhibit 32. We increased the 
hours for all State staff and reduced the number of management staff 
members from five to four after determining the number needed to 
reflect a staffing level that is more representative of the States and 
outlying areas. Three of these managers are categorized as social and 
community service managers. We replaced the two technical staff members 
in our previous estimate with the more appropriate occupational 
categories of database administrators and computer systems analysts. We 
revised the calculation to exclude the five administrative staff 
members included in our previous estimate, because those occupational 
categories generally would not be involved in the development of 
additional State performance accountability measures.

                                              Exhibit 32--Updates to Costs of State-Level AEFLA Programs--State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              (h) State performance accountability measures                                                       (c) Performance accountability measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            5            7  One time.............  5 States.............   Additional State Performance Accountability Indicators (Beyond Required Performance
                                                                                                                                                 Indicators)
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            2            7                                                Management                     1            8  One time............  5 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            5            7                                                Computer systems               1            8
                                                                                                            analyst.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Social & community             3            8
                                                                                                            service manager.
                                  -------------------------------------------------
                                                                                                           Database                       1            8
                                                                                                            administrator.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 33 presents the changes made by Departments for the State-
level VR program. After additional discussion with our program experts, 
we became aware that the estimated burden for obtaining UI wage data in 
the NPRM was not related to the additional State performance 
indicators. In this Final Rule, the burden will be for 80 State VR 
agencies to obtain UI wage data for the reporting on the primary 
indicators of performance, which is included in Exhibit 18. In 
addition, due to public comment and additional consultation with 
program experts, we reduced the number of VR agencies that will incur 
costs related to the additional State performance accountability 
indicators

[[Page 55950]]

from seven to five and decreased the level of effort from 9 to 8 hours 
for each occupational category. We removed the software and IT systems 
costs from the subsection on ``Additional State Performance 
Accountability Indicators (Beyond Required Performance Indicators)'' 
because upon further consideration, we concluded that this software 
cost applies only to data collection for the primary indicators of 
performance.

                                               Exhibit 33--Updates to Costs of State-Level VR Programs--State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              (h) State performance accountability measures                                                       (c) Performance accountability measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                   ObtaAdditional State Performance Accountability Indicators (Beyond Required Performance
                                                                           Indicators)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            2           20  One time.............  7 VR agencies........  Management                     1            8  One time............  5 VR agencies.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           20                                                Computer systems               1            8
                                                                                                            analyst.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           20                                                Social & community             3            8
                                                                                                            service manager.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                            Obtain Additional Information for New Data Fields                              Database                       1            8
                                                                                                            administrator.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Technical staff..................           60            9  Annual...............  7 VR agencies........
-----------------------------------------------------------------------------------
Software/IT systems cost.........           $5,000           One time.............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    At the local level for the AEFLA program, the Departments made the 
following changes, which are presented in Exhibit 34. We considered the 
typical experience of local involvement and concluded that local staff 
will participate in statewide stakeholder meetings, convened by the 
State AEFLA office, to develop and update the additional State 
performance accountability measures. Therefore, we reduced the level of 
effort from 7 to 4 hours. Note that instead of presenting the costs at 
the State level as in the NPRM, we are presenting costs at the program, 
or local, level.

                                              Exhibit 34--Updates to Costs of Local-Level AEFLA Programs--State Performance Accountability Measures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              (h) State performance accountability measures                                                        (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           40            7  One time.............  5 States.............   Additional State Performance Accountability Indicators (Beyond Required Performance
                                                                                                                                                 Indicators)
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................           40            7                                                Management                     1            4  One time............  200 local
                                                                                                            occupations staff.                                                   programs.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Database                       1            4
                                                                                                            administrator.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Performance Reports
    This section describes the updates to the NPRM's provision (i) 
``Performance Reports.'' In the Final Rule, this cost provision has 
been included in provision (c) ``Performance Accountability System'' 
and it captures the costs of developing a performance template that 
reports outcomes via the new WIOA performance accountability metrics; 
developing, updating, and submitting ETP reports; and collecting, 
analyzing, and reporting performance data. For this activity, the total 
10-year cost (undiscounted) increased from $121.9 million in the NPRM 
to $295.4 million in the Final Rule.36 37 These revised cost 
estimates can be found under the subsections ``Development and Updating 
State Performance Accountability Systems'' and ``Performance Reports'' 
in provision (c) of this Final Rule.
---------------------------------------------------------------------------

    \36\ A portion of the $295.4 million in costs accounts for 
software and IT systems costs from provision (e) ``Development of 
Strategies for Aligning Technology and One-Stop Partner Programs'' 
and provision (j) ``Evaluation of State Programs.'' Thus, this value 
overstates how much costs have increased in this Final Rule relative 
to the NPRM.
    \37\ This variance in cost is due to new annual and one-time 
software and IT systems costs for Federal AEFLA programs, new annual 
labor costs for the State-level DOL program, and new one-time and 
annual labor costs for the State-level VR program.

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

[[Page 55951]]

    At the Federal level for the DOL programs, the Departments made the 
following updates, which are shown in Exhibit 35. After consultation 
with additional program experts, we added annual burden hours for one 
manager, one computer systems analyst, and one management analyst to 
implement and review the new ETP performance reporting template. We 
also added an estimated annual software and IT systems cost of $250,000 
for ETP reporting.

                                                         Exhibit 35--Updates to Costs of Federal-Level DOL Programs--Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         (i) Performance reports                                                                   (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   N/A                  Performance Report
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1            8  Annual..............  1
                                                                                                            occupations staff
                                                                                                            (GS-14, Step 5).
                                  -------------------------------------------------
                                                                                                           Computer systems               1            5
                                                                                                            analysts (GS-13,
                                                                                                            Step 5).
                                  -------------------------------------------------
                                                                                                           Management analyst             1           16
                                                                                                            (GS-12, Step 5).
                                  -------------------------------------------------
                                                                                                           Software/IT systems          $250,000
                                                                                                            cost.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following updates for the Federal-level 
AEFLA program, which are presented in Exhibit 36. We concluded that 
updating and maintaining the Federal data system for compliance with 
the new requirements of WIOA will be performed annually rather than 
once because Federal data system costs have been historically incurred 
annually. We reduced the number of Federal staff members and clarified 
that the work will be performed by one manager, one social and 
community service manager, and one database administrator. We reduced 
the level of effort per manager from 60 to 8 hours, because most of 
this work will be performed by the database administrator. The managers 
will direct and oversee the modernization process and the database 
administrator will manage the new system. Finally, we revised our 
estimate to add a one-time Federal cost of $5 million for IT systems 
development, modernization, and enhancement to build the data 
infrastructure and increase the capacity of the adult education data 
collection system at the Federal, State, and local levels to comply 
with the new performance reporting requirements under WIOA. An annual 
software and IT cost of $250,000 also has been included to maintain the 
data infrastructure in steady state.

                                                        Exhibit 36--Updates to Costs of Federal-Level AEFLA Programs--Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         (i) Performance reports                                                                   (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager (GS-13, Step 5)..........            1           60  One time.............  1....................                                    Performance Report
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Federal staff (GS-13, Step 5)....           10           15                                                Management                     1            8  Annual..............  1
                                                                                                            occupations staff
                                                                                                            (GS-14, Step 5).
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Social & community             1           16
                                                                                                            service manager
                                                                                                            (GS-13, Step 5).
                                  -------------------------------------------------
                                                                                                           Database                       1           40
                                                                                                            administrator (GS-
                                                                                                            13, Step 5).
                                  -------------------------------------------------
                                                                                                           Software/IT systems          $250,000
                                                                                                            cost.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Software/IT systems         $5,000,000         One time............  1
                                                                                                            cost.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following updates for the Federal-level VR 
program, which are presented in Exhibit 37. We added a one-time 
software and IT cost of $68,925 to support the VR program's ability to 
compile quarterly

[[Page 55952]]

data reported by VR agencies into the annual reports required under 
WIOA. The ED will be developing and submitting the annual reports based 
on quarterly data submitted by the VR agencies. This cost was not 
included in the NPRM because at the time the NPRM was published, the 
PIRL and RSA-911 had not been finalized. Since that time, ED has 
completed a more comprehensive analysis of the data structure required 
to meet the WIOA requirements and found that additional software is 
necessary to support the development of the annual reports for VR 
agencies by ED.

                                                         Exhibit 37--Updates to Costs of Federal-Level VR Programs--Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         (i) Performance reports                                                                   (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   N/A                 Performance Reports
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Software/IT systems           $68,925          One-time............  1
                                                                                                            cost.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 38 presents updates to the State-level DOL program. The 
Departments added one manager, one computer systems analyst, one 
management analyst, and one office and administrative support staff 
member to account for the annual effort related to ETP reporting.

                                                          Exhibit 38--Updates to Costs of State-Level DOL Programs--Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         (i) Performance reports                                                                   (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   N/A                 Performance Reports
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1            8  Annual..............  57 States.
                                                                                                            occupations staff.
                                  -------------------------------------------------
                                                                                                           Computer systems               1           40
                                                                                                            analyst.
                                  -------------------------------------------------
                                                                                                           Management analyst.            1           60
                                  -------------------------------------------------
                                                                                                           Office & admin.                4           20
                                                                                                            support staff.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following changes for the AEFLA program at 
the State level, which are presented in Exhibit 39. We concluded that 
the effort from all relevant staff members will occur on an annual 
basis rather than once. We reduced the number of managers from five to 
four after determining that this number will reflect more accurately 
the staffing level needed across all States and outlying areas. Three 
of these staff members are categorized as social and community service 
managers. We replaced the two technical staff members in our previous 
estimate with the more appropriate occupational categories of database 
administrator and computer systems analyst. We also revised the 
calculation to exclude the five administrative staff members included 
in our previous estimate because those occupational categories are 
generally not involved with performance reports. In addition, we moved 
the State data system costs to the subsection under provision (c) on 
``Development and Updating of State Performance Accountability 
Systems'' where more realistic costs will be captured that States will 
incur in establishing the capabilities to collect the data necessary to 
calculate the newly required performance measures (see Exhibit 17). We 
have concluded that the one-time cost estimate for the State-level 
software and IT systems cost needed to be aligned with actual funding 
patterns across all States and outlying areas and will occur annually. 
In addition, we eliminated the recurring licensing fee, since we 
accounted for such fees in the annual cost estimate for the State data 
system under the subsection ``Development and Updating of State 
Performance Accountability Systems.''

[[Page 55953]]



                                                         Exhibit 39--Updates to Costs of State-Level AEFLA Programs--Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         (i) Performance reports                                                                   (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            5           40  One time.............  56 States............           Development and Updating of State Performance Accountability Systems
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            2           40                                                Software/IT systems          $350,000          Annual..............  57 States.
                                                                                                            cost.
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Admin. staff.....................            5           40                                                                                 Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1           40  Annual..............  57 States.
                                                                                                            occupations staff.
-----------------------------------------------------------------------------------
Software/IT cost.................         $1,750,000                                57 States............  Computer systems               1           40
                                                                                                            analyst.
------------------------------------------------------------                                              -----------------------------------------------
Licensing fee....................           $25,000          Annual...............                         Social & community             3           40
                                                                                                            service manager.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Database                       1           40
                                                                                                            administrator.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    At the State level for the VR program, the Departments made the 
following changes, which are presented in Exhibit 40. We added one 
manager, one computer systems analyst, two social and community service 
managers, and one database administrator to address the State-level 
effort involved in reviewing and verifying the annual performance 
report that RSA will assemble from the quarterly RSA-911 data the 
States have previously reported.
    In response to comments, the Departments have included the burden 
associated with the training of VR staff on the collection of new data 
and related data collection requirements. Based on information from the 
RSA-2 Cost Report, we use an average of 62 rehabilitation counselors 
per VR agency in calculating this burden and have added labor burden of 
6 hours for one staff trainer and 3 hours for each of the 62 
rehabilitation counselors to participate in the training.
    Finally, Exhibit 40 includes the annual labor for 62 rehabilitation 
counselors per VR agency to collect the new data. The data collection 
related labor burden included in this analysis is limited to the hours 
the Departments have attributed to the requirements under sec. 116 of 
title I of WIOA implemented in these joint regulations. We estimate 
that approximately 36 percent of all new data elements required by WIOA 
are related to requirements under sec. 116 of title I of WIOA and have 
prorated the total additional data collection burden accordingly. For 
the first year of data collection, VR agencies will incur a greater 
data collection burden than in subsequent years. All VR participants 
who are still receiving services (i.e., have not exited) by the start 
of PY 2016 (July 1, 2016) become WIOA participants and will be counted 
and tracked in accordance with the WIOA performance requirements set 
forth in sec. 116 of WIOA. Based on State-reported RSA data for FY 
2015, we estimate that each VR agency will incur an additional 3,600 
hours in labor burden to collect sec. 116 performance data for current 
and new participants in the first year of data collection, or 58 
additional hours per VR counselor. However, for the second and 
subsequent years of data collection under these final regulations, we 
estimate that each VR agency will incur an additional 945 hours per 
year in labor burden to collect joint performance data, or 15 hours per 
year per counselor. The data collection burden associated with the 
implementation of amendments to the VR program under title IV of WIOA 
is included in the RIA section of the final regulations for the ``State 
Vocational Rehabilitation Services Program; State Supported Employment 
Services Program; Limitations on Use of Subminimum Wage'' also 
published in this edition of the Federal Register.

                                              Exhibit 40--Updates to the Final Rule Analysis Costs of State-Level VR Programs--Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         (i) Performance reports                                                                   (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Performance Reports--Review and Verify Annual Performance Reports
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1            5  Annual..............  80 VR agencies.
                                                                                                            occupations staff.
                                  -------------------------------------------------
                                                                                                           Computer systems               1            5
                                                                                                            analyst.
                                  -------------------------------------------------
                                                                                                           Social & community             2           10
                                                                                                            service manager.
                                  -------------------------------------------------

[[Page 55954]]

 
                                                                                                           Database                       1           25
                                                                                                            administrator.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Performance Reports--Training on New Data Collection
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Staff trainer......            1            6  One time............  80 VR agencies.
                                  -------------------------------------------------
                                                                                                           Rehabilitation                62            3
                                                                                                            counselor.
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Performance Reports -Data Collection
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Rehabilitation                62           58  First year..........  80 VR agencies.
                                                                                                            counselor.
                                  -------------------------------------------------
                                                                                                           Rehabilitation                62           15  Second and            80 VR agencies.
                                                                                                            counselor.                                     subsequent years.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    At the local level for the AEFLA program, the Departments made the 
following updates, which are presented in Exhibit 41. We considered the 
extent of actual local involvement in performance reporting and 
additional burden under WIOA. Instead of presenting the costs at the 
State level as in the NPRM, we are presenting annual costs at the 
program, or local, level. As a result, we reduced the number of 
managers and the hours per local manager and increased the number of 
entities to reflect local programs for this provision. In addition, we 
added one database administrator for data collection, analysis, and 
entry.

                                                         Exhibit 41--Updates to Costs of Local-Level AEFLA Programs--Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         (i) Performance reports                                                                   (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           40           40  One time.............  57 States............                                   Performance Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management                     1            8  Annual..............  2,396 local
                                                                                                            occupations staff.                                                   programs.
                                  -------------------------------------------------
                                                                                                           Social & community             1            8
                                                                                                            service manager.
                                  -------------------------------------------------
                                                                                                           Database                       1            8
                                                                                                            administrator.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Evaluation of State Programs
    This section describes the updates to the NPRM's provision (j) 
``Evaluation of State Programs.'' In the Final Rule's subject-by-
subject analysis, costs related to this provision can be found 
primarily in provision (d) ``State Evaluation Responsibilities.'' \38\ 
The cost of this provision of the Final Rule reflects the cost for 
affected entities to conduct evaluations of title I activities over 
multiple years to provide various forms of data for Federal 
evaluations, and for SWAs and other State agencies to coordinate in 
designing and developing evaluations carried out under sec. 116(e) of 
WIOA. For this provision, the total 10-year cost (undiscounted) 
decreased from $737.9 million in the NPRM to $222.5 million in this 
Final Rule.39 40
---------------------------------------------------------------------------

    \38\ A small portion of State-level software and IT systems 
costs for the AEFLA program was moved to provision (c) ``Performance 
Accountability System.''
    \39\ A portion of the $222.5 million in costs accounts for 
software and IT systems costs from provision (e) ``Development of 
Strategies for Aligning Technology and One-Stop Partner Programs'' 
and provision (i) ``Performance Reports.'' Thus, this value 
understates how much costs have decreased in this Final Rule 
relative to the NPRM.
    \40\ This variance in cost is due to the reduction in software 
and IT systems costs for State-level DOL programs and the removal of 
costs for local-level AEFLA programs.
---------------------------------------------------------------------------

    At the Federal level for the DOL programs, the Departments made the 
following updates, which are presented in Exhibit 42. We added two 
managers, one computer system analyst, and two management analysts to 
account for Federal effort related to SWA evaluation activities under 
sec. 116(e) of WIOA. We added these Federal staff costs to support all 
aspects of State evaluation

[[Page 55955]]

activities, including technical assistance, monitoring, and 
dissemination.

                                                    Exhibit 42--Updates to Costs of Federal-Level DOL Programs--Evaluation of State Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (j) Evaluation of state programs                                                              (d) State evaluation responsibilities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   N/A                                                     Management                     2           25  Annual..............  1.
                                                                                                            occupations staff
                                                                                                            (GS-14, Step 5).
                                  -------------------------------------------------
                                                                                                           Computer systems               1            3
                                                                                                            analysts (GS-13,
                                                                                                            Step 5).
                                  -------------------------------------------------
                                                                                                           Management analyst             2           30
                                                                                                            (GS-12, Step 5).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 43 presents the changes made by the Departments to reflect 
the cost of Federal AEFLA program staff in providing technical 
assistance and promoting State adult education agency participation in 
the coordination process, and possibly in the design and development of 
State evaluation activities under WIOA sec. 116(e). These Federal staff 
costs were added to support all aspects of State evaluation activities, 
including technical assistance, monitoring, and dissemination.

                                                   Exhibit 43--Updates to Costs of Federal-Level AEFLA Programs--Evaluation of State Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (j) Evaluation of state programs                                                              (d) State evaluation responsibilities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   N/A                                                     Management                     4           10  Annual..............  1.
                                                                                                            occupations staff
                                                                                                            (GS-14, Step 5).
                                  -------------------------------------------------
                                                                                                           Computer systems               1            5
                                                                                                            analysts (GS-13,
                                                                                                            Step 5).
                                  -------------------------------------------------
                                                                                                           Management analyst             2           30
                                                                                                            (GS-12, Step 5).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Exhibit 44 presents the changes made by the Departments to reflect 
the cost of Federal staff responsible for the VR program in providing 
technical assistance and promoting State VR agency participation and 
coordination in carrying out State evaluations under sec. 116(e) of 
WIOA, including possible involvement in the design and development of 
such evaluations. We added these Federal staff costs to support all 
aspects of State evaluation activities such as technical assistance, 
monitoring, and dissemination.

                                                     Exhibit 44--Updates to Costs of Federal-Level VR Programs--Evaluation of State Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (j) Evaluation of state programs                                                              (d) State evaluation responsibilities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
          Labor category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   N/A                                                     Management                     2            5  Annual..............  1.
                                                                                                            occupations staff
                                                                                                            (GS-14, Step 5).
                                  -------------------------------------------------
                                                                                                           Social & community             2           10
                                                                                                            service manager
                                                                                                            (GS-13, Step 5).
                                  -------------------------------------------------
                                                                                                           Management analyst             2           15
                                                                                                            (GS-12, Step 5).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 55956]]

    The Departments made the following updates to the State-level DOL 
programs, which are presented in Exhibit 45. After consultation with 
additional program experts, we made the following updates: (1) We 
replaced the manager in our previous estimate with the more appropriate 
occupational category of social and community service manager; (2) we 
replaced the two technical staff members in the previous estimate with 
the more appropriate occupational category of computer systems analyst 
and reduced the annual level of effort per staff member from 20 hours 
to 15 hours; (3) we added a management analyst with an annual level of 
effort of 10 hours; (4) we reduced the annual software and IT systems 
costs from $200,000 and $1 million for 20 ``low-effort'' States and 15 
``high-effort'' States, respectively, to $10,000 for all 57 SWAs; and 
(5) we added an annual consultant cost of $21,400. In the NPRM, we 
assumed that full cooperation would occur. Realistically, cooperation 
will be difficult to achieve because there is an overall lack of 
funding for evaluations; therefore, a reduced cost estimate is 
appropriate.

                                                     Exhibit 45--Updates to Costs of State-Level DOL Programs--Evaluation of State Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (j) Evaluation of state programs                                                              (d) State evaluation responsibilities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           20  Annual...............  56 States............  Computer systems               2           15  Annual..............  57 SWAs.
                                                                                                            analyst.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           20                                                Social & community             1           20
                                                                                                            service manager.
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           10                                                Management analyst.            1           10
------------------------------------------------------------                       ----------------------------------------------------------------------
Software/IT systems cost (``Low-           $200,000                                 20 States............  Office & admin.                1           10
 Effort'' States).                                                                                          support staff.
------------------------------------------------------------                       ----------------------------------------------------------------------
Software/IT systems cost (``High-         $1,000,000                                15 States............  Software/IT systems           $10,000
 Effort'' States).                                                                                          cost.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Consultant cost....           $21,400
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    At the State level for the AEFLA program, the Departments made the 
following changes, which are presented in Exhibit 46. We reduced the 
number of managers from five to two after determining that the number 
needed to reflect an average staffing level for this activity across 
all States and outlying areas. One of these managers is categorized as 
a social and community service manager. We replaced the two technical 
staff members in the previous estimate with the more appropriate 
occupational categories of computer systems analysts and management 
analysts. We also revised the calculation to exclude the five 
administrative staff members included in the previous estimate, because 
those occupational categories are generally not involved in the 
evaluation of State programs. We reduced the level of effort for the 
staff because we have concluded that this work does not require the 
level of effort we initially estimated. In addition, we eliminated the 
annual IT systems costs from this provision and accounted for them 
under subsection ``Development and Updating of State Performance 
Accountability Systems'' in provision (c) of this Final Rule because 
they were more appropriately placed there (see Exhibit 17).

                                                    Exhibit 46--Updates to Costs of State-Level AEFLA Programs--Evaluation of State Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (j) Evaluation of state programs                                                              (c) Performance accountability system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            5          120  Annual...............  57 States............           Development and Updating of State Performance Accountability Systems
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            2           80                                                Software/IT systems          $350,000          Annual..............  57 States.
                                                                                                            cost.
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Admin. staff.....................            5           80                                                                        (d) State Evaluation Responsibilities
------------------------------------------------------------                                              --------------------------------------------------------------------------------------

[[Page 55957]]

 
Software/IT systems cost.........          $250,000                                                        Management                     1           10  Annual..............  57 SWAs.
                                                                                                            occupations staff.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Computer systems               1           20
                                                                                                            analyst.
                                  -------------------------------------------------
                                                                                                           Social & community             1           10
                                                                                                            service manager.
                                  -------------------------------------------------
                                                                                                           Management analyst.            1           20
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    For the State VR program, the Departments replaced the technical 
staff member in the previous estimate with the more appropriate 
occupational category of computer systems analysts, as shown in Exhibit 
47. In addition, we added one social community service manager and one 
management analyst.

                                                      Exhibit 47--Updates to Costs of State-Level VR Programs--Evaluation of State Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (j) Evaluation of state programs                                                              (d) State evaluation responsibilities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1            1  Annual...............  80 VR agencies.......  Management                     1            1  Annual..............  80 VR agencies.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           13                                                Computer systems               1           13
                                                                                                            analyst.
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1            2                                                Social & community             1            5
                                                                                                            service managers.
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management analyst.            1            5
                                  -------------------------------------------------
                                                                                                           Office and admin.              1            2
                                                                                                            support staff.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments made the following changes for the local-level 
AEFLA program, which are presented in Exhibit 48. We reconsidered the 
extent of local involvement in the evaluation of State programs. As a 
result, we concluded that hours for local staff should be eliminated 
for this provision.

                                                    Exhibit 48--Updates to Costs of Local-Level AEFLA Programs--Evaluation of State Programs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (j) Evaluation of state programs                                                              (d) State evaluation responsibilities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           40          120  Annual...............  57 States............                                           N/A
------------------------------------------------------------
Technical staff..................           40           80
------------------------------------------------------------
Admin. staff.....................           40           80
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Effectiveness in Serving Employers
    This section describes the updates to the rule's cost analysis. In 
the NPRM, the Departments did not include costs for States to implement 
effectiveness in serving employer approaches because, at the time of 
the NPRM's publication, policy decisions had not yet been made on 
whether these measures would be added to the rule. In the Final Rule, 
the Departments estimated the cost of the pilot program and the 
implementation

[[Page 55958]]

of the effectiveness in serving employers measures, which amounted to a 
total undiscounted 10-year cost of $6.4 million. See the cost 
subsection of section V.A.6 (Subject-by-Subject Analysis) below for 
details on this estimate.
6. Subject-by-Subject Cost-Benefit Analysis
    The Departments' analysis below covers the expected costs of 
implementing the requirements of the Final Rule against the baseline 
cost under WIA, especially with regard to the following four expected 
costs: (a) ``Time to Review the New Rule;'' (b) ``Unified or Combined 
State Plans: Expanded Content, Biennial Development and Modification 
Process, and Submission Coordination Requirements;'' (c) ``Performance 
Accountability System;'' and (d) ``State Evaluation Responsibilities.''
    The Departments emphasize that many of the requirements in this 
Final Rule are not new, for DOL programs, but rather were requirements 
under WIA. For example, States were required to ``prepare performance 
reports'' under title I of WIA and other authorizing statutes amended 
by WIA required States to submit performance information. Similarly, 
many of the requirements governing the one-stop system's infrastructure 
and operations under WIA are carried forward under WIOA. Therefore, 
these and other such costs are not considered ``new'' cost burdens 
under this Final Rule for some of the core programs, but rather are 
included in the ``baseline costs'' used as a comparison for the new 
burden costs. Accordingly, this regulatory analysis focuses on new 
costs that can be attributed exclusively to new requirements under 
title I of WIOA as addressed in this Final Rule.
a. Time To Review the New Rule
    Upon publication of this Final Rule, the regulated community will 
need to learn about the new regulations and plan for compliance.
    Affected entities will incur costs based primarily on the level of 
effort needed by relevant individuals to review and understand the 
Final Rule. This includes interpretation and learning how to navigate 
the Final Rule, but it does not include any steps beyond what is 
included in the baseline related to running a Federal program. Costs 
for developing a detailed action plan for compliance would not be 
included in the new cost burden because they will be accounted for in 
other burden estimate discussions. In addition, affected entities will 
incur relatively minor costs for the first steps needed to comply, such 
as notifying relevant personnel of the rule. The Departments estimate 
that learning about the new regulations and planning for compliance 
with those regulations will involve one-time labor costs for State-
level DOL programs, State- and local-level AEFLA programs, and State VR 
agencies in the first analysis year. Local WDBs might incur limited 
costs under this provision, which are not accounted for below, because 
the costs for relevant individuals to comply are accounted for in the 
DOL, AEFLA, and VR agency estimates. DOL expects that the States will 
carefully review and interpret the Final Rule before passing along any 
necessary information to Local WDBs. Although Local WDBs are not 
required to review the Final Rule, those that do are likely to limit 
their review to a few paragraphs or sections most relevant to them.
i. Costs
    At the State level for DOL's core programs (see Exhibit 5), the 
Departments estimated this labor cost by multiplying the estimated 
number of lawyers per State (4) by the time required to read and review 
the new rule (20 hours each), and then by the applicable hourly 
compensation rate ($65.48/hour). We performed the same calculation for 
the following occupational categories: Managers (1 manager at $65.39/
hour for 20 hours) and social and community service managers (2 
managers at $54.21/hour for 40 hours each). We summed the labor cost 
for all three categories ($10,883) and multiplied the result by the 
number of States (57) to estimate this one-time cost of $620,331. Over 
the 10-year period, this calculation yields an average annual cost of 
$62,033.
    At the State level for the AEFLA program (see Exhibit 6), the 
Departments estimated this labor cost by multiplying the estimated 
number of lawyers per State (1) by the time required to read and review 
the new rule (20 hours) and then by the applicable hourly compensation 
rate ($65.48/hour). We performed the same calculation for the following 
occupational categories: Managers (1 manager at $65.39/hour for 40 
hours) and social and community service managers (3 managers at $54.21/
hour for 20 hours each). We summed the labor cost for all three 
categories ($7,178) and multiplied the result by the number of States 
(57). This calculation resulted in a one-time cost of $409,135, which 
is equal to an average annual cost of $40,913.
    At the local level for the AEFLA program (see Exhibit 8), the 
Departments multiplied the estimated number of managers (1) by the time 
required to read and review the new rule (4 hours) and then by the 
hourly compensation rate ($63.63/hour). We repeated the calculation for 
social and community service managers (1 manager at $61.01/hour for 4 
hours). We did not estimate lawyer hours for local-level AEFLA programs 
because our experience indicates that this occupational category is 
typically engaged only at the State level. We summed the labor cost for 
both occupational categories ($499) and multiplied the result by the 
number of local AEFLA providers (2,396). This calculation yields $1.2 
million ($1,194,550) in labor costs in the first year of the rule. Over 
the 10-year period, this calculation yields an average annual cost of 
$119,455.
    For State VR agencies (see Exhibit 7), the Departments multiplied 
the estimated number of managers per VR agency (1) by the time required 
to read and review the new rule (40 hours) and then by the hourly 
compensation rate ($65.39/hour). We performed the same calculation for 
the following occupational categories: Social and community service 
managers (3 managers at $54.21/hour for 40 hours each) and 
rehabilitation counselors (3 counselors at $36.66/hour for 40 hours 
each). We summed the labor cost for all three categories ($13,520) and 
multiplied the result by the number of VR agencies (80). This 
calculation resulted in a one-time labor cost of $1.1 million 
($1,081,600), which is equal to an average annual cost of $108,160 over 
the 10-year period.
    The sum of these costs yields a total one-time labor cost of $3.3 
million ($3,305,615) for individuals from State-level DOL programs, 
State- and local-level AEFLA programs, and State VR agencies to read 
and review the new rule. Over the 10-year period of analysis, these 
one-time costs result in an average annual cost of $330,562.
b. Unified or Combined State Plans: Expanded Content, Biennial 
Development and Modification Process, and Submission Coordination 
Requirements
    Under WIOA title I, each State must develop and submit a 4-year 
Unified State Plan that covers the following six core programs: The 
adult, dislocated worker, and youth formula programs (WIOA title I); 
the AEFLA program (WIOA title II); the Employment Service program 
authorized under the Wagner-Peyser Act, as amended by WIOA title

[[Page 55959]]

III; and the VR program as authorized by title I of the Rehabilitation 
Act of 1973, as amended by WIOA title IV. In the alternative, a State 
may submit a 4-year Combined State Plan that covers the six core 
programs plus one or more Combined State Plan partner programs 
identified in sec. 103(a)(2) of WIOA. Section 103(b)(1) of WIOA 
requires the portion of a Combined State Plan covering the core 
programs to meet the same requirements as for a Unified State Plan 
under sec. 102 of WIOA. States must have an approved Unified or 
Combined State Plan in place to receive funding for the six core 
programs.
    Under WIA, States were required to submit separate State Plans that 
covered: (1) The title I and Wagner-Peyser Act Employment Service DOL 
programs; (2) the AEFLA program; and (3) the VR program. Because 
States, under WIOA, must integrate what had historically been stand-
alone State Plans for the AEFLA and VR programs into a single Unified 
or Combined State Plan with the title I and Wagner-Peyser Act 
Employment Service DOL programs, the Departments anticipate added cost 
burdens for the States as they work together to strategize alignment of 
all six core programs into one Unified or Combined State Plan. Thus, 
the requirement that the Unified or Combined State Plan must include 
the ED-administered programs is new under WIOA.
    Affected entities will incur costs to (1) review and develop new 4-
year Unified or Combined State Plans to ensure that they satisfy the 
new content requirements; (2) perform the development and modification 
process for the plans; and (3) coordinate on developing a Unified or 
Combined State Plan that covers all six core programs.
i. Expanded Content
    WIOA sec. 102(b) expands the content requirements for Unified and 
Combined State Plans, many of which are new to all core programs, such 
as strategic and operational planning elements. Strategic planning 
elements include State analyses of economic and workforce conditions, 
an assessment of workforce development activities (including education 
and training) in the State, and formulation of the State's vision and 
goals for preparing an educated and skilled workforce that meets the 
needs of employers and a strategy to achieve the vision and goals. 
Operational planning elements include State strategy implementation, 
State operating systems and policies, program-specific requirements, 
assurances, and additional requirements imposed by the Secretaries of 
Labor and Education, or other Secretaries (for Combined State Plan 
purposes), as appropriate. Most of the WIOA operational planning 
elements are functionally equivalent to State Plan content requirements 
that were required by DOL's core programs under WIA sec. 112(b). The 
WIOA strategic planning elements, however, constitute new or expanded 
State planning requirements for all core programs that were not 
required under WIA. For example, WIOA requires that more economic, 
education, and workforce data be included in the State Plan than was 
required under WIA.\41\
---------------------------------------------------------------------------

    \41\ WIOA sec. 102(b)(1) requires:
    (1) Strategic Planning Elements.--The Unified State Plan shall 
include strategic planning elements consisting of a strategic vision 
and goals for preparing an educated and skilled workforce, that 
include--
    (A) an analysis of the economic conditions in the State, 
including--
    (i) existing and emerging in-demand industry sectors and 
occupations; and
    (ii) the employment needs of employers, including a description 
of the knowledge, skills, and abilities, needed in those industries 
and occupations;
    (B) an analysis of the current workforce, employment and 
unemployment data, labor market trends, and the educational and 
skill levels of the workforce, including individuals with barriers 
to employment (including individuals with disabilities), in the 
State;
    (C) an analysis of the workforce development activities 
(including education and training) in the State, including an 
analysis of the strengths and weaknesses of such activities, and the 
capacity of State entities to provide such activities, in order to 
address the identified education and skill needs of the workforce 
and the employment needs of employers in the State;
    (D) a description of the State's strategic vision and goals for 
preparing an educated and skilled work-force (including preparing 
youth and individuals with barriers to employment) and for meeting 
the skilled work-force needs of employers, including goals relating 
to performance accountability measures based on primary indicators 
of performance described in section 116(b)(2)(A), in order to 
support economic growth and economic self-sufficiency, and of how 
the State will assess the overall effectiveness of the workforce 
investment system in the State; and
    (E) taking into account analyses described in subparagraphs (A) 
through (C), a strategy for aligning the core programs, as well as 
other resources available to the State, to achieve the strategic 
vision and goals described in subparagraph (D).
    WIA sec. 112(b)(4) required:
    (b) Contents.--The State plan shall include--
    * * * * *
    (4) information describing--
    (A) the needs of the State with regard to current and projected 
employment opportunities, by occupation;
    (B) the job skills necessary to obtain such employment 
opportunities;
    (C) the skills and economic development needs of the State; and
    (D) the type and availability of workforce investment activities 
in the State;
---------------------------------------------------------------------------

    Therefore, this will be an expansion of a State planning 
requirement for DOL's core programs under WIOA and will be new 
requirements for the AEFLA and VR programs. Because DOL core programs 
were already analyzing and using economic, education, and workforce 
data under WIA, those programs will not experience as much in 
incremental costs associated with that particular requirement as will 
the AEFLA and VR programs. The Departments anticipate that any costs 
incurred by the States with regard to new or expanded State planning 
content requirements will constitute one-time incremental costs for all 
core programs to ensure that all Unified or Combined State Plans 
satisfy the new content requirements.
Costs
    At the State level for the DOL core programs (see Exhibit 26), the 
Departments estimated this labor cost by multiplying the estimated 
number of lawyers per State (1) by the time required to review and 
develop new Unified or Combined State Plans to ensure that the new 
elements are included (8 hours) and by the hourly compensation rate 
($65.48/hour). We performed the same calculation for the following 
occupational categories: Managers (4 managers at $65.39/hour for 20 
hours each), social and community service managers (2 managers at 
$54.21/hour for 20 hours each), and office and administrative support 
staff members (1 staff member at $30.57/hour for 8 hours). We summed 
the labor cost for all four categories ($8,168) and multiplied the 
result by the number of States (57) to estimate this one-time cost of 
$465,576. Over the 10-year period, this calculation yields an average 
annual cost of $46,558.
    At the State level for the AEFLA program (see Exhibit 27), the 
Departments estimated this cost by multiplying the estimated number of 
lawyers per State (1) by the time required to review and develop new 
Unified or Combined State Plans to ensure that the new elements are 
included (20 hours) and by the hourly compensation rate ($65.48/hour). 
We performed the same calculation for the following occupational 
categories: Managers (1 manager at $65.39/hour for 20 hours) and social 
and community service managers (3 managers at $54.21/hour for 20 hours 
each). We summed the labor cost for the three occupational categories 
($5,870) and multiplied the result by the number of States (57). This 
calculation yields $334,590 in one-time labor costs, which is equal to 
an average annual cost of $33,459 over the 10-year period.
    For State VR agencies (see Exhibit 28), the Departments estimated 
this cost by first multiplying the estimated number

[[Page 55960]]

of managers per VR agency (2) by the time required to review and 
develop new Unified or Combined State Plans to ensure that the new 
elements are included (21 hours each) and by the hourly compensation 
rate ($65.39/hour). We performed the same calculation for social and 
community service managers (2 managers at $54.21/hour for 21 hours 
each). Summing the labor cost for both categories ($5,023) and 
multiplying the result by the number of VR agencies (80) will result in 
a one-time cost of $401,856. Over the 10-year period, this calculation 
yields an average annual cost of $40,186.
    The sum of these costs yields a total one-time cost of $1.2 million 
($1,202,022) for individuals from the State-level DOL core programs, 
AEFLA program, and VR agencies to review and develop new Unified or 
Combined State Plans to ensure that the new elements are included. Over 
the 10-year period of analysis, these one-time costs result in an 
average annual cost of $120,202.
ii. New 4-Year State Plan Development and Modification
    Under WIA sec. 112(d), modifications to a State Plan covering the 
DOL core programs were permitted but not required. For the AEFLA 
program under WIA sec. 224, States submitted 5-year State Plans, and 
revisions to plans were required only if those revisions were 
substantial. Upon the expiration of authorization of the program, and 
pending reauthorization, States submitted annual State Plan extensions 
containing revisions that were updated sections of their original 5-
year plans. For the VR program under title IV of WIA (sec. 101 of the 
Rehabilitation Act), States were required to update specified State 
Plan attachments annually and modifications to State Plan assurances 
and other attachments were required only if substantive changes 
occurred. Under WIOA sec. 102(c)(3)(A), States must submit 
modifications to the Unified or Combined State Plan, at a minimum, at 
the end of the first 2-year period of any 4-year Plan. The 
modifications must reflect changes in labor market and economic 
conditions or other factors affecting implementation of the 4-year 
Unified or Combined State Plan. This mandatory biennial review and 
modification of a 4-year Unified or Combined State Plan is a new cost 
under WIOA for all six core programs.
    State-level DOL programs, AEFLA programs, and VR agencies will 
incur biennial labor costs to review and modify the Unified or Combined 
State Plan at the end of the 2-year period after any 4-year plan. In 
the absence of significant economic or administration changes within a 
State, most costs resulting from the State Plan modification 
requirements will occur during the first and second submissions because 
the unified State planning process is new for all core programs and 
States will just be learning the new requirements of WIOA and how to 
coordinate among all core programs so that they become more aligned to 
promote an integrated workforce development system. The Departments 
anticipate that new Unified or Combined State Plans submitted in 2020 
and thereafter, and the 2-year modifications of those Plans, will be 
easier for States to develop. For this reason, we present the costs by 
year of submission of either the development of a 4-year Unified or 
Combined State Plan or the 2-year modification of that Plan.
Costs
Four-Year Plan Modification--Third Year
    At the State level for the DOL core programs (see Exhibit 9), the 
Departments estimated this labor cost by multiplying the estimated 
number of lawyers per State (1) by the time required to review and 
modify the 4-year Unified or Combined State Plan (4 hours) and by the 
hourly compensation rate ($65.48/hour). We performed the same 
calculation for the following occupational categories: Managers (1 
manager at $65.39/hour for 12 hours), management analysts (2 analysts 
at $45.88/hour for 12 hours each), and office and administrative 
support staff members (1 staff member at $30.57/hour for 4 hours). We 
summed the labor cost for all four categories ($2,270) and multiplied 
the result by the number of States (57) to estimate this one-time cost 
of $129,390, occurring in 2018. Over the 10-year period, this 
calculation yields an average annual cost of $12,939.
    At the State level for the AEFLA program (see Exhibit 10), the 
Departments estimated this cost by multiplying the estimated number of 
lawyers per State (1) by the time required to review and modify the 4-
year Unified or Combined State Plan (10 hours) and by the hourly 
compensation rate ($65.48/hour). We performed the same calculation for 
the following occupational categories: Managers (1 manager at $65.39/
hour for 10 hours) and social and community service managers (3 
managers $54.21/hour for 10 hours each). We summed the labor cost for 
the three occupational categories ($2,935) and multiplied the result by 
the number of States (57). This results in a one-time cost of $167,295, 
occurring in 2018. Over the 10-year period of the analysis, this one-
time cost results in an average annual cost of $16,730.
    For State VR agencies (see Exhibit 11), the Departments estimated 
this cost by first multiplying the estimated number of managers per VR 
agency (2) by the time required to review and modify the 4-year Unified 
or Combined State Plan (14 hours each) and by the hourly compensation 
rate ($65.39/hour). We performed the same calculation for social and 
community service managers (2 managers at $54.21/hour for 14 hours 
each). Summing the labor cost for both categories ($3,349) and 
multiplying the result by the number of VR agencies (80), we estimate 
this one-time cost at $267,904, occurring in 2018. This calculation 
yields an average annual cost of $26,790 over the 10-year period.
    The sum of these costs yields a total one-time cost of $564,589, 
occurring in 2018, for individuals from the State-level DOL core 
programs, AEFLA program, and VR agencies to review and modify the 4-
year Unified or Combined State Plan. Over the 10-year period of 
analysis, these one-time costs result in an average annual cost of 
$56,459.
Development of 4-Year State Plan--Fifth Year
    At the State level for the DOL core programs (see Exhibit 9), the 
Departments estimated this labor cost by multiplying the estimated 
number of lawyers per State (1) by the time required to review and 
develop a new 4-year Unified or Combined State Plan (4 hours) and by 
the hourly compensation rate ($65.48/hour). We performed the same 
calculation for the following occupational categories: Managers (1 
manager at $65.39/hour for 12 hours), management analysts (2 analysts 
at $45.88/hour for 12 hours each), and office and administrative 
support staff members (1 staff member at $30.57/hour for 4 hours). We 
summed the labor cost for all four categories ($2,270) and multiplied 
the result by the number of States (57) to estimate this one-time cost 
of $129,390, occurring in 2020. This one-time cost results in an 
average annual cost of $12,939 over the 10-year period.
    At the State level for the AEFLA program (see Exhibit 10), the 
Departments estimated this cost by multiplying the estimated number of 
lawyers per State (1) by the time required to review and develop a new 
4-year Unified or Combined State Plan (15 hours) and by the hourly 
compensation rate ($65.48/hour). We performed the same calculation for 
the following occupational categories:

[[Page 55961]]

Managers (1 manager at $65.39/hour for 15 hours) and social and 
community service managers (3 managers at $54.21/hour for 15 hours 
each). We summed the labor cost for the three occupational categories 
($4,403) and multiplied the result by the number of States (57). This 
will result in a one-time cost of $250,943, occurring in 2020. Over the 
10-year period, this calculation yields an average annual cost of 
$25,094.
    For State VR agencies (see Exhibit 11), the Departments estimated 
this cost by first multiplying the estimated number of managers per VR 
agency (2) by the time required to review and develop a new 4-year 
Unified or Combined State Plan (10 hours each) and by the hourly 
compensation rate ($65.39/hour). We performed the same calculation for 
social and community service managers (2 managers at $54.21/hour for 10 
hours each). We summed the labor cost for both categories ($2,392) and 
multiplied the result by the number of VR agencies (80). This 
calculation yields $191,360 in one-time labor costs, occurring in 2020. 
This one-time cost results in an average annual cost of $19,136 over 
the 10-year period.
    The sum of these costs yields a total one-time cost of $571,693, 
occurring in 2020, for individuals from the State-level DOL core 
programs, AEFLA program, and VR agencies to review and develop a new 4-
year Unified or Combined State Plan. Over the 10-year period of 
analysis, the sum of these one-time costs results in an average annual 
cost of $57,169.
Four-Year State Plan Modification--Seventh Year
    At the State level for the DOL core programs (see Exhibit 9), the 
Departments estimated this labor cost by multiplying the estimated 
number of lawyers per State (1) by the time required to review and 
modify the 4-year Unified or Combined State Plan (4 hours) and by the 
hourly compensation rate ($65.48/hour). We performed the same 
calculation for the following occupational categories: Managers (1 
manager at $65.39/hour for 8 hours), management analysts (2 analysts at 
$45.88/hour for 8 hours each), and office and administrative support 
staff members (1 staff member at $30.57/hour for 4 hours). We summed 
the labor cost for all four categories ($1,641) and multiplied the 
result by the number of States (57) to estimate this cost of $93,560, 
occurring in 2022. This is equal to an average annual cost of $9,356.
    At the State level for the AEFLA program (see Exhibit 10), the 
Departments estimated this cost by multiplying the estimated number of 
lawyers per State (1) by the time required to review and modify the 4-
year Unified or Combined State Plan (5 hours) and by the hourly 
compensation rate ($65.48/hour). We performed the same calculation for 
the following occupational categories: Managers (1 manager at $65.39/
hour for 5 hours) and social and community service managers (3 managers 
at $54.21/hour for 5 hours each). We summed the labor cost for the 
three occupational categories ($1,468) and multiplied the result by the 
number of States (57). This results in a one-time cost of $83,648, 
occurring in 2022. This is equal to an average annual cost of $8,365.
    For State VR agencies (see Exhibit 11), the Departments estimated 
this cost by first multiplying the estimated number of managers per VR 
agency (2) by the time required to review and modify the 4-year Unified 
or Combined State Plan (7 hours) and by the hourly compensation rate 
($65.39/hour). We performed the same calculation for social and 
community service managers (2 managers at $54.21/hour for 7 hours 
each). Summing the labor cost for both categories ($1,674) and 
multiplying the result by the number of VR agencies (80), we estimate 
this one-time cost of $133,952, occurring in 2022. This is equal to an 
average annual cost of $13,395.
    The sum of these costs for the modification process occurring for 
new 4-year Unified or Combined State Plans yields a total cost of 
$311,159, occurring in 2022, for individuals from the State-level DOL 
core programs, AEFLA program, and VR agencies. Over the 10-year period 
of analysis, this results in an average annual cost of $31,116.
Development of 4-Year State Plan--Ninth Year
    At the State level for the DOL core programs (see Exhibit 9), the 
Departments estimated this labor cost by multiplying the estimated 
number of lawyers per State (1) by the time required to review and 
develop a new 4-year Unified or Combined State Plan (4 hours) and by 
the hourly compensation rate ($65.48/hour). We performed the same 
calculation for the following occupational categories: Managers (1 
manager at $65.39/hour for 10 hours), management analysts (2 analysts 
at $45.88/hour for 10 hours each), and office and administrative 
support staff members (1 staff member at $30.57/hour for 4 hours). We 
summed the labor cost for all four categories ($1,956) and multiplied 
the result by the number of States (57) to estimate this one-time cost 
of $111,475, occurring in 2024. This one-time cost results in an 
average annual cost of $11,147 over the 10-year period.
    At the State level for the AEFLA program (see Exhibit 10), the 
Departments estimated this cost by multiplying the estimated number of 
lawyers per State (1) by the time required to review and develop a new 
4-year Unified or Combined State Plan (10 hours) and by the hourly 
compensation rate ($65.48/hour). We performed the same calculation for 
the following occupational categories: Managers (1 manager at $65.39/
hour for 10 hours) and social and community service managers (3 
managers at $54.21/hour for 10 hours each). We summed the labor cost 
for the three occupational categories ($2,935) and multiplied the 
result by the number of States (57). This will result in a one-time 
cost of $167,295, occurring in 2024. Over the 10-year period, this 
calculation yields an average annual cost of $16,730.
    For State VR agencies (see Exhibit 11), the Departments estimated 
this cost by first multiplying the estimated number of managers per VR 
agency (2) by the time required to review and develop a new 4-year 
Unified or Combined State Plan (7 hours each) and by the hourly 
compensation rate ($65.39/hour). We performed the same calculation for 
social and community service managers (2 managers at $54.21/hour for 7 
hours each). We summed the labor cost for both categories ($1,674) and 
multiplied the result by the number of VR agencies (80). This 
calculation yields $133,952 in one-time labor costs, occurring in 2024. 
This one-time cost results in an average annual cost of $13,395 over 
the 10-year period.
    The sum of these costs yields a total one-time cost of $412,722, 
occurring in 2024, for individuals from the State-level DOL core 
programs, AEFLA program, and VR agencies to review and develop a new 4-
year Unified or Combined State Plan. Over the 10-year period of 
analysis, the sum of these one-time costs results in an average annual 
cost of $41,272.
    In total, the cost for the biennial development and modification 
process over the 10-year period is $1.9 million ($1,860,163). This 
estimated total 10-year cost results in an average annual cost of 
$186,016.
iii. Coordinating Submissions
    Affected entities will incur costs associated with coordinating 
actions among the core programs administered by DOL and ED because, as 
explained above, under WIA, only the DOL core programs were covered by 
a single State Plan; the AEFLA and VR programs each

[[Page 55962]]

had stand-alone State Plans under WIA. For State WDBs, the Departments 
estimate that costs will be associated with State planning attributed 
to the extra effort to coordinate and develop a plan that covers all 
six core programs, which is a new requirement under WIOA.
    The Departments estimate that the AEFLA and VR programs will incur 
one-time costs associated with coordinating and participating in 
statewide stakeholder meetings and other activities to coordinate, 
develop, and review their first-time State Plan submissions. We 
anticipate that the AEFLA and VR programs will incur a larger cost than 
the DOL core programs because, under WIA, neither the AEFLA nor VR 
program were required to coordinate with other partner programs in 
developing a State Plan. We also anticipate that the DOL core programs 
will experience an incremental increase in their coordination costs 
because this will be the first time that DOL core programs must 
coordinate with the AEFLA and VR programs for State planning purposes. 
Although the DOL core programs have had to coordinate with each other 
under WIA, because new relationships will need to be formed with the 
AEFLA and VR partners, their costs will increase.
    In addition, in some States, different agencies that previously 
have not worked together will have to build infrastructure to form 
partnerships. Working together might take the form of ``shaking hands'' 
and following a ``model agreement'' involving State councils.
    Compliance with this provision will increase biennial labor costs--
in connection with the development of a 4-year Unified or Combined 
State Plan or the 2-year modifications of each of those plans--for 
State-level DOL core programs, State- and local-level AEFLA programs, 
and State-level VR agencies.
Costs
    At the State level for the DOL core programs (see Exhibit 26), the 
Departments estimated this labor cost by multiplying the estimated 
number of managers per State (1) by the time required to coordinate on 
developing a Unified or Combined State Plan among all six core programs 
(8 hours) and by the hourly compensation rate ($65.39/hour). We 
performed the same calculation for the following occupational 
categories: Management analysts (2 analysts at $45.88/hour for 8 hours 
each) and office and administrative support staff members (1 staff 
member at $30.57/hour for 8 hours). We summed the labor cost for all 
three categories ($1,502) and multiplied the result by the number of 
States (57) to estimate this biennial cost of $85,600. Over the 10-year 
period, this calculation yields a total cost of $428,002, which is 
equal to an average annual cost of $42,800.
    At the State level for the AEFLA program (see Exhibit 27), the 
Departments estimated this labor cost by multiplying the estimated 
number of lawyers per State (1) by the time required to coordinate on 
developing the Unified or Combined State Plan submission (4 hours) and 
by the hourly compensation rate ($65.48/hour). We performed the same 
calculation for the following occupational categories: Managers (1 
manager at $65.39/hour for 8 hours), social and community service 
managers (3 managers at $54.21/hour for 8 hours each), and office and 
administrative support staff members (1 staff member at $30.57/hour for 
8 hours). We summed the labor cost for all four categories ($2,331) and 
multiplied the result by the number of States (57). This calculation 
yields a biennial cost of $132,846. Over the 10-year period, this 
calculation results in a total cost of $664,232, which is equal to an 
average annual cost of $66,423.
    At the local level for the AEFLA program (see Exhibit 29), the 
Departments estimated this cost by multiplying the estimated number of 
managers per local AEFLA provider (1) by the time required to 
coordinate on developing the Unified or Combined State Plan submission 
(4 hours) and by the hourly compensation rate ($63.63/hour). We 
repeated the calculation for social and community service managers (1 
manager at $61.01/hour for 4 hours). We summed the labor cost for the 
two occupational categories ($499) and multiplied the result by the 
number of local AEFLA providers (2,396). The biennial cost at the local 
level for the AEFLA program is estimated to be $1.2 million 
($1,194,550). Over the 10-year period, this calculation results in a 
total cost of $6.0 million ($5,972,749), which is equal to an average 
annual cost of $597,275.
    For State VR agencies (see Exhibit 28), the Departments estimated 
this cost by first multiplying the estimated number of managers per VR 
agency (2) by the time required to coordinate and develop the Unified 
or Combined State Plan submission (14 hours each) and by the hourly 
compensation rate ($65.39/hour). We performed the same calculation for 
social and community service managers (2 managers at $54.21/hour for 14 
hours each). Summing the labor cost for both categories ($3,349) and 
multiplying the result by the number of VR agencies (80) results in a 
biennial cost of $267,904 for State VR agencies. Over the 10-year 
period, this calculation yields a total cost of $1.3 million 
($1,339,520), which is equal to an average annual cost of $133,952.
    The sum of these costs yields a biennial cost of $1.7 million 
($1,680,901). Over the 10-year period, this calculation results in a 
total cost of $8.4 million ($8,404,503), which is equal to an average 
annual cost of $840,450, for individuals from State-level DOL core 
programs, State- and local-level AEFLA programs, and State-level VR 
agencies to coordinate actions among all six core programs.
    The sum of the costs for the Unified or Combined State Plans: 
Expanded Content, Biennial Development and Modification Process, and 
Submission Coordination requirements, which includes the costs to 
expand content requirements, develop and modify State Plans, and 
coordinate the submission of State Plans results in a 10-year total 
cost of $11.5 million ($11,466,688), which results in an average annual 
cost of $1.1 million ($1,146,669).
c. Performance Accountability System
    WIOA sec. 116 establishes performance accountability indicators and 
performance reporting requirements to assess the effectiveness of 
States and local areas in achieving positive outcomes for individuals 
served by the six core programs (WIOA sec. 116(b)(3)(A)(ii)). With few 
exceptions, including the local accountability system under WIOA sec. 
116(c), the performance accountability requirements apply across all 
six core programs.
    Affected entities will incur costs to (1) develop and update their 
State performance accountability system; (2) implement measures for 
data collection and reporting on effectiveness of serving employers; 
(3) negotiate levels of performance; (4) run statistical adjustment 
model to adjust levels of performance based on actual economic 
conditions and characteristics of participants; (5) collect data to 
report on any additional State performance accountability indicators; 
(6) provide technical assistance to States; (7) develop a performance 
report template that reports outcomes via the new WIOA performance 
accountability metrics; develop, update, and submit ETP reports; and 
collect, analyze, and report performance data; (8) obtain UI wage data; 
and (9) purchase data analytic software and perform training.

[[Page 55963]]

i. Development and Updating of State Performance Accountability Systems
    Under WIOA sec. 101(d)(8), States must help Governors develop 
strategies for aligning technology and data systems across one-stop 
partner programs to enhance service delivery and improve efficiencies 
in reporting on performance accountability measures. This WIOA 
provision specifies that such strategies must include design and 
implementation of common intake, data collection, case management 
information, and performance accountability measurement and reporting 
processes. The strategies also must incorporate local input to such 
design and implementation to improve coordination of services across 
one-stop partner programs.
    Although this State WDB requirement is implemented in the DOL WIOA 
Final Rule, one-stop partner programs will have to contribute to the 
development of the data system alignment strategies required by WIOA. 
Moreover, the implementation of these data system alignment strategies 
developed by the State WDBs--the actual alignment of technology and 
data systems across one-stop partner programs--would impose costs on 
one-stop partners. For these reasons, the Departments consider the 
costs imposed on State WDBs and the potential future costs to one-stop 
partner programs by this WIOA requirement a cost of this Final Rule.
    WIOA sec. 116(b)(2)(A)(i) establishes six primary indicators of 
performance for measuring the effectiveness of activities provided for 
under each of the core programs:
    (1) Percentage of program participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (2) Percentage of program participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (3) Median earnings of program participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (4) Percentage of program participants who obtain a recognized 
postsecondary credential, or a secondary school diploma or its 
recognized equivalent, during participation in or within 1 year after 
exit from the program;
    (5) Percentage of program participants who, during a program year, 
are in an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains toward such a credential or employment; and
    (6) Indicator(s) of effectiveness in serving employers.\42\
---------------------------------------------------------------------------

    \42\ WIOA sec. 116(b)(2)(A)(iv) requires DOL and ED to develop 
one or more indicators of performance to measure the effectiveness 
of the core programs in serving employers.
---------------------------------------------------------------------------

    Under WIOA sec. 116(b)(2)(A)(i), however, the fourth and fifth 
indicators are not applicable to the Wagner-Peyser Act Employment 
Service program because that program provides no education or training 
services, which are measured by those performance indicators. 
Additionally, for youth activities authorized under WIOA title I, 
subtitle B, WIOA specifies slightly modified versions of the first two 
primary indicators of performance.\43\ Under WIA sec. 136, the 
performance indicators differed and applied only to activities under 
the adult, dislocated worker, and youth formula programs administered 
by DOL. Under WIA sec. 212, the AEFLA program was subject to indicators 
of performance that applied specifically to that program. The VR 
program was subject to standards and indicators of performance 
established under the Rehabilitation Act. Thus, the task of measuring 
program effectiveness through the calculation and updating of levels of 
performance as indicated by the specific performance indicator metrics 
established in WIOA is somewhat new for all six core programs.
---------------------------------------------------------------------------

    \43\ WIOA sec. 116(b)(2)(A)(ii) establishes the following youth 
performance indicators in place of the first and second indicators 
applicable to the other core programs: (1) The percentage of program 
participants who are in education or training activities, or in 
unsubsidized employment, during the second quarter after exit from 
the program; and (2) the percentage of program participants who are 
in education or training activities, or in unsubsidized employment, 
during the fourth quarter after exit from the program.
---------------------------------------------------------------------------

    The Departments assume that the potential implementation of the 
strategies for aligning technology and data systems across one-stop 
partner programs would involve consulting and software and IT systems 
for State-level DOL programs and VR agencies. There would be larger 
upfront consulting costs to design the system and software and IT 
systems costs to purchase hardware and implement the system. Subsequent 
software and IT systems costs would also be incurred for maintaining 
the systems. Some States are already working to better align technology 
and data systems where feasible and are at varying points in the 
alignment process. States that are farther in the process will require 
less effort for alignment than those using legacy systems. We estimate 
that 40 percent of State-level DOL programs (i.e., SWAs) (23 SWAs) and 
VR agencies (32 agencies) will be ``low-effort'' SWAs and VR agencies, 
and 60 percent will be ``high-effort'' SWAs (34 SWAs) and VR agencies 
(48 agencies). These estimates are based on the Departments' experience 
with WIA programs and information received from SWAs, and represent 
costs for average SWAs and VR agencies within each effort 
classification. We understand that some SWAs and VR agencies will 
experience costs far exceeding those we account for in ``high-effort'' 
entities and far below those estimated for ``low-effort'' entities. In 
addition, the Departments anticipate that the State-level AEFLA 
programs will incur annual software and IT systems costs to enhance 
their participation in the SLDS Grant Program, which supports the 
design, development, implementation, and expansion of P-20W (early 
learning through the workforce) longitudinal data systems.
    The affected entities will incur costs to develop and update their 
performance accountability systems, which involves establishing the 
capabilities to collect and regularly update the relevant performance 
data. State-level DOL core programs, State- and local-level AEFLA 
programs, and Federal- and State-level VR agencies will incur labor 
costs related to complying with this provision's requirements in the 
first year of the Final Rule. Furthermore, compliance will result in a 
one-time non-labor cost for software and IT systems for the Federal DOL 
program. For State-level DOL core programs, compliance will result in 
one-time non-labor costs for software and IT systems and consultants 
and annual non-labor costs for licensing fees. In addition, compliance 
will result in annual software and IT systems costs for the AEFLA 
program at the State level.
Costs
Aligning Technology and Data Systems Across One-Stop Partner Programs
    For the future costs associated with implementing strategies for 
aligning technology and data systems across one-stop partner programs 
(see Exhibit 22), the Departments estimated costs for ``low-'' and 
``high-effort'' SWAs for DOL core programs. We estimated the consultant 
cost for ``low-effort'' SWAs by multiplying the one-time consultant 
cost ($100,000) by the number of ``low-effort'' SWAs (23). This 
calculation yields a one-time cost of $2.3 million ($2,300,000) in the 
first year of the Final Rule, which is equal to an average annual cost 
of $230,000 over the 10-year period.
    The Departments estimated the consultant cost for ``high-effort'' 
SWAs

[[Page 55964]]

by multiplying the sum of the consultant cost for the first year of the 
rule ($200,000) and for the second year ($100,000) by the number of 
``high-effort'' SWAs (34). This results in a 10-year total cost of 
$10.2 million ($10,200,000), which is equal to an average annual cost 
of $1.0 million ($1,020,000).
    The Departments estimated the software and IT systems cost for 
``low-effort'' SWAs by multiplying the sum of the cost for the first 
year of the rule ($200,000) and the cost for the second and third years 
($100,000 per year) by the number of ``low-effort'' SWAs (23). This 
calculation yields a total 10-year cost of $9.2 million ($9,200,000), 
which is equal to an average annual cost of $920,000.
    The Departments estimated the software and IT systems cost for 
``high-effort'' SWAs by multiplying the sum of the cost for the first 
and second years of the rule ($200,000 per year) and the cost in for 
the third year through the fifth year ($100,000 per year) by the number 
of ``high-effort'' SWAs (34). This calculation results in an average 
annual cost of $2.4 million ($2,380,000), which is equal to a total 
cost of $23.8 million ($23,800,000) over the 10-year period.
    For the State-level AEFLA program (see Exhibit 23), the Departments 
estimated the software and IT systems cost for States to enhance their 
participation in the SLDS Grant Program by multiplying the annual 
software and IT cost ($100,000) by the number of States (57). This 
calculation results in a total 10-year cost of $57.0 million 
($57,000,000), which is equal to an average annual cost of $5.7 million 
($5,700,000).
    The Departments estimated implementation and future alignment costs 
for ``low-'' and ``high-effort'' VR agencies (see Exhibit 24). We 
estimated the consultant cost for ``low-effort'' VR agencies by 
multiplying the one-time consultant cost ($100,000) by the number of 
``low-effort'' VR agencies (32). This calculation yields a one-time 
cost of $3.2 million ($3,200,000) in the first year of the rule, which 
is equal to an average annual cost of $320,000 over the 10-year period.
    The Departments estimated the consultant cost for ``high-effort'' 
VR agencies by multiplying the sum of the consultant cost for the first 
year of the rule ($200,000) and the second year ($100,000) by the 
number of ``high-effort'' VR agencies (48). This results in a total 10-
year cost of $14.4 million ($14,400,000), which is equal to an average 
annual cost of $1.4 million ($1,440,000) over the 10-year period.
    The Departments estimated the software and IT systems cost for 
``low-effort'' VR agencies by multiplying the sum of the cost for the 
first year of the rule ($200,000) and the cost for the second and third 
years ($100,000 per year) by the number of ``low-effort'' VR agencies 
(32). This calculation yields a total 10-year cost of $12.8 million 
($12,800,000), which is equal to an average annual cost of $1.3 million 
($1,280,000).
    The Departments estimated the software and IT systems cost for 
``high-effort'' VR agencies by multiplying the sum of the cost for the 
first and second years of the rule ($200,000 per year) and the cost for 
the third year through the fifth year ($100,000 per year) by the number 
of ``high-effort'' VR agencies (48). This calculation results in a 
total 10-year cost of $33.6 million ($33,600,000), which is equal to an 
average annual cost of $3.4 million ($3,360,000).
    The sum of these potential costs for aligning technologies and data 
systems across one-stop partner programs yields a total cost of $166.5 
million ($166,500,000) in non-labor costs from the SWAs, the State-
level AEFLA program, and VR agencies. Over the 10-year analysis, these 
costs result in an average annual cost of $16.7 million ($16,650,000).
Development and Updating of State Performance Accountability Systems
    For the costs related to developing and updating State performance 
accountability systems (see Exhibit 13), the Departments estimated the 
one-time Federal software and IT systems cost for DOL to be $750,000 in 
the first year of the Final Rule. This is equivalent to an average 
annual cost of $75,000.
    At the State level for DOL core programs (i.e., SWAs) (see Exhibit 
16), the Departments estimated this labor cost by first multiplying the 
estimated number of managers per SWA (1) by the time required to 
develop and update the performance accountability system (32 hours) and 
by the hourly compensation rate ($65.39/hour). We performed the same 
calculation for computer systems analysts (3 analysts at $56.17/hour 
for 80 hours each) and office and administrative support staff members 
(1 staff member at $30.57/hour for 72 hours). We summed the labor cost 
for all three categories ($17,774) and multiplied the result by the 
number of SWAs (57) to estimate a one-time cost of $1.0 million 
($1,013,136). Over the 10-year period, this calculation yields an 
average annual cost of $101,314.
    The Departments estimated the software and IT systems cost for SWAs 
by multiplying the software and IT systems cost per SWA ($100,000) by 
the number of SWAs (57). This calculation yields a one-time cost of 
$5.7 million ($5,700,000) in the first year of the rule, which results 
in an average annual cost of $570,000 over the 10-year period.
    The Departments estimated the licensing fees for SWAs by 
multiplying the annual licensing fee per SWA ($50,000) by the number of 
SWAs (57). This calculation results in an annual cost of $2.9 million 
($2,850,000), which is equal to a 10-year total cost of $28.5 million.
    The Departments estimated the consultant cost for SWAs by 
multiplying the consultant cost per SWA ($75,000) by the number of SWAs 
(57). This calculation yields a one-time cost of $4.3 million 
($4,275,000) in the first year of the rule, which is equal to an 
average annual cost of $427,500 over the 10-year period.
    At the State level for the AEFLA program (see Exhibit 17), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per State (1) by the time required to 
develop and update the performance accountability system (60 hours) and 
by the hourly compensation rate ($65.39/hour). We repeated the 
calculation for computer systems analysts (1 analyst at $56.17/hour for 
80 hours), social and community service managers (3 managers at $54.21/
hour for 60 hours each), and database administrators (1 administrator 
at $57.02/hour for 80 hours). We summed the labor cost for all four 
categories ($22,736) and multiplied the result by the number of States 
(57), resulting in an estimated one-time cost of $1.3 million 
($1,295,975).\44\ Over the 10-year period, this calculation yields an 
average annual cost of $129,597.
---------------------------------------------------------------------------

    \44\ This provision will be a joint effort between State and 
local AEFLA staff.
---------------------------------------------------------------------------

    The Departments estimated the software and IT systems cost for the 
State-level AEFLA program by multiplying the software and IT systems 
cost per State ($350,000) by the number of States (57). This 
calculation yields an annual cost of $20.0 million ($19,950,000), which 
is equal to a total 10-year cost of $199.5 million ($199,500,000).
    At the local level for the AEFLA program (see Exhibit 20), the 
Departments estimated this cost by first multiplying the estimated 
number of managers per local AEFLA provider (1) by the time required to 
develop and update the performance accountability system (4 hours) and 
by the hourly compensation rate ($63.63/hour). We

[[Page 55965]]

performed the same calculation for database administrators (1 
administrator at $59.60/hour for 4 hours). We summed the labor cost for 
the two occupational categories ($493) and multiplied the result by the 
number of local AEFLA providers (2,396), resulting in a one-time cost 
of $1.2 million ($1,181,036). Over the 10-year period, this calculation 
yields an average annual cost of $118,104.
    At the Federal level for the VR program (see Exhibit 15), the 
Departments estimated this labor cost by first multiplying the 
estimated number of GS-14 level, Step 5 data management specialists (1) 
by the time required to program the database and perform related 
software development tasks (768.63 hours) and by the hourly 
compensation rate ($76.48/hour). We performed the same calculation for 
GS-13 level, Step 5 data management specialists (1 specialist at 
$64.71/hour for 768.63 hours). We summed the labor cost for both 
categories to estimate this one-time cost of $108,523, which is equal 
to an average annualized cost of $10,852.
    For State VR agencies (see Exhibit 18), the Departments estimated 
the cost associated with the establishment of State performance goals 
and the State's evaluation and analysis of progress toward such goals 
by first multiplying the estimated number of managers per VR agency (1) 
by the time required to develop and update the performance 
accountability system (80 hours) and by the hourly compensation rate 
($65.39/hour). We repeated the calculation for the following 
occupational categories: Social and community service managers (3 
managers at $54.21/hour for 80 hours each), database administrators (2 
administrators at $57.02/hour for 100 hours each), and SRC Board 
members (12 members at $45.88/hour for 3 hours each). We summed the 
labor cost for the four categories ($31,297) and multiplied the result 
by the number of VR agencies (80) to estimate the biennial cost as $2.5 
million ($2,503,782). In addition, to estimate the cost of updating and 
modifying VR agency case management systems we multiplied the estimated 
number of computer systems analysts per large VR agency that is 
updating case management and reporting systems using in-house staff (5) 
by the time required to make system changes (360) and by the hourly 
compensation rate ($56.17/hour). We multiplied the result ($101,106) by 
the number of large VR agencies updating systems using in-house staff 
(5) to estimate this one-time cost of $505,530. We then multiplied the 
estimated number of computer systems analysts per small or medium VR 
agency that is updating case management and reporting systems using in-
house staff (2) by the time required to make system changes (360 hours) 
and by the hourly compensation rate ($56.17/hour). We multiplied the 
result ($40,442) by the number of small and medium VR agencies updating 
systems using in-house staff (45) to estimate this one-time cost of 
$1.8 million ($1,819,908). Finally, we multiplied the estimated number 
of computer systems analysts per VR agency that has a maintenance 
contract with a single CMS vendor (2) by the time required to make 
system changes (54 hours) and by the hourly compensation rate ($56.17/
hour). We multiplied the result ($6,066) by the number of VR agencies 
with a maintenance contract (30) to estimate this one-time cost of 
$181,991. In total, the sum of these calculations yields a total 10-
year cost of $15.0 million ($15,026,341), which results in an average 
annual cost of $1.5 million ($1,502,634) over the 10-year period.
    The Departments estimated the annual licensing fees cost for State 
VR agencies by multiplying the annual licensing fee per VR agency 
($6,930) by the number of VR agencies that receive vendor-supplied CMS 
software (48). This calculation results in an annual cost of $332,640, 
which is equal to a 10-year total cost of $3.3 million ($3,326,400).
    The sum of these costs for the development and updating of State 
performance accountability systems yields a total 10-year cost of 
$260.7 million ($260,676,411) in costs from the SWAs, AEFLA program, 
and VR program. Over the 10-year analysis period, these costs result in 
an average annual cost of $26.1 million ($26,067,641).
    The sum of the costs for individuals from the Federal- and State-
level DOL core programs, State- and local-level AEFLA programs, and 
Federal- and State-level VR agencies to implement strategies for 
aligning technology and data systems across one-stop partners and to 
develop and update the performance accountability measures yields a 
total 10-year cost of $427.2 million ($427,176,411) and an average 
annual cost of $42.7 million ($42,717,641).
ii. Effectiveness in Serving Employers
    WIOA sec. 116(b)(2)(A)(i)(VI) provides that the sixth primary 
indicator of performance will be an indicator of effectiveness in 
serving employers, which will be established pursuant to WIOA sec. 
116(b)(2)(A)(iv). This indicator will measure program effectiveness in 
serving employers. Under WIOA sec. 116(b)(2)(A)(iv), the Departments 
must consult with stakeholders on proposed approaches to defining this 
indicator. The NPRM described three approaches to measure employer 
satisfaction. In the first approach, States would use wage records to 
identify whether a participant's identification matches the same FEIN 
in the second and fourth quarters. The second approach to define this 
performance indicator would use the number or percentage of employers 
that are using the core program services out of all employers 
represented in an area or State served by the system (i.e., employers 
served). The third approach would measure the repeated use rate for 
employers' use of the core programs. Both the market penetration and 
repeat business measure should come from already existing data sources. 
For market penetration, States will have to produce the total number of 
business customers, as well as the total number of businesses, which is 
readily available through BLS. For repeat businesses, these figures 
will also come from the business customer database and will be shown as 
a sum within the reporting period.
    In this Final Rule, the Departments are initially implementing the 
performance indicator of effectiveness in serving employers in the form 
of a pilot program to test the rigor and feasibility of the three 
proposed approaches and to develop a standardized indicator. The 
performance indicator for effectiveness in serving employers will not 
be included in sanctions determinations until the standardized 
indicator is developed in accordance with rulemaking requirements. The 
WIOA Joint Performance ICR and the DOL Performance ICR include the data 
elements and specifications to calculate all three measures proposed in 
the NPRM (employee retention with the same employer, market 
penetration, and repeat business). States will be required to choose 
two of the three measures of effectiveness in serving employers for 
data collection and reporting for PYs 2016 and 2017 with results to be 
included in the WIOA annual reports due in October.
    The Departments cannot anticipate which of the three approaches 
States will select, limiting our ability to estimate the cost of these 
activities. Due to this uncertainty, the Departments estimated the 
costs of the pilot program in 2016 and 2017 using the assumption that 
the realized cost will be the midpoint of the range of the total costs 
if on the low end, all States choose the

[[Page 55966]]

two lowest-cost approaches; if on the high end, all States choose the 
two highest-cost approaches. The Departments similarly estimated the 
cost of the implementation beginning in 2019 using the assumption that 
this cost will be the midpoint of the range of the total costs if on 
the low end, all States choose the lowest-cost approach; on the high 
end, all States choose the highest-cost approach. Below we discuss the 
estimated costs for each approach in the pilot program if all States 
were to choose that approach. We then use these values to estimate the 
cost of this provision as discussed.
Costs
Approach 1--Retention With the Same Employer
    At the Federal level for the DOL core programs, the Departments 
estimated the one-time labor cost associated with the first approach by 
multiplying the estimated number of GS-14, Step 5 management analysts 
(1) by the time required for technical assistance development (8 hours) 
and by the hourly compensation rate ($76.48/hour). This calculation 
would result in a one-time labor cost of $612.
    The Departments estimated DOL's annual labor costs for the first 
approach by multiplying the estimated number of GS-14, Step 5 
management analysts (1) by the time required for technical assistance 
delivery (4 hours) and by the hourly compensation rate ($76.48/hour). 
This calculation would result in an annual labor cost of $306.
    At the State level for the DOL core programs, the Departments 
estimated the first approach's one-time labor cost by multiplying the 
estimated number of management analysts (1) by the time required for 
programming and data collection (8 hours) and by the hourly 
compensation rate ($45.88/hour). We multiplied the labor cost ($367) by 
the number of States (57) to estimate this one-time cost of $20,921.
    The Departments estimated the State-level DOL core programs' annual 
labor cost associated with the first approach in the pilot program by 
multiplying the estimated number of management analysts (1) by the sum 
of time required for data collection (4 hours) and for Federal 
reporting (4 hours) and by the hourly compensation rate ($45.88/hour). 
We multiplied the labor cost ($367) by the number of States (57) to 
estimate this annual cost of $20,291.
    At the Federal level for the AEFLA program, the Departments 
estimated the one-time labor cost associated with the first approach in 
the pilot program by multiplying the estimated number of GS-14, Step 5 
management analysts (1) by the time required for technical assistance 
development (8 hours) and by the hourly compensation rate ($76.48/
hour). This calculation would result in a one-time labor cost of $612.
    The Departments estimated AEFLA's annual labor cost for the first 
approach by multiplying the estimated number of GS-14, Step 5 
management analysts (1) by the time required for technical assistance 
delivery (4 hours) and by the hourly compensation rate ($76.48/hour). 
This calculation would result in an annual labor cost of $306.
    At the State level for the AEFLA program, the Departments estimated 
the first approach's one-time labor cost by multiplying the estimated 
number of management analysts (1) by the time required for programming 
and data collection (8 hours) and by the hourly compensation rate 
($45.88/hour). We multiplied the labor cost ($367) by the number of 
States (57) to estimate this one-time cost of $20,921.
    The Departments estimated the State-level AEFLA program's annual 
labor cost associated with the first approach by multiplying the 
estimated number of management analysts (1) by the sum of time required 
for data collection (4 hours) and for Federal reporting (4 hours) and 
by the hourly compensation rate ($45.88/hour). We multiplied the labor 
cost ($367) by the number of States (57) to estimate this annual cost 
of $20,921.
    At the Federal level for the VR program, the Departments estimated 
the one-time labor cost associated with the first approach in the pilot 
program by multiplying the estimated number of GS-14, Step 5 management 
analysts (1) by the time required for technical assistance development 
(8 hours) and by the hourly compensation rate ($76.48/hour). This 
calculation would result in a one-time labor cost of $612.
    The Departments estimated the annual labor costs for the VR program 
associated with the first approach by multiplying the estimated number 
of GS-14, Step 5 management analysts (1) by the time required for 
technical assistance delivery (4 hours) and by the hourly compensation 
rate ($76.48/hour). This calculation would result in an annual labor 
cost of $306.
    At the State level for the VR program, the Departments estimated 
the first approach's one-time labor cost by multiplying the estimated 
number of management analysts (1) by the time required for programming 
and data collection (8 hours) and by the hourly compensation rate 
($45.88/hour). We multiplied the labor cost ($367) by the number of VR 
agencies (80) to estimate this one-time cost of $29,363.
    The Departments estimated the State-level AEFLA program's annual 
labor cost associated with the first approach by multiplying the 
estimated number of management analysts (1) by the sum of time required 
for data collection (4 hours) and for Federal reporting (4 hours) and 
by the hourly compensation rate ($45.88/hour). We multiplied the labor 
cost ($367) by the number of VR agencies (80) to estimate this annual 
cost of $29,363.
    In total, Approach 1 would result in one-time costs of $73,041 for 
individuals from the Federal- and State-level DOL core programs, AEFLA 
program, and VR program. In addition, Approach 1 would result in 
$72,123 in annual costs for these entities.
Approach 2--Percentage of Employers Using Services Out of All Employers 
in the State
    At the Federal level for the DOL core programs, the Departments 
estimated the one-time labor cost associated with the second approach 
in the pilot program by multiplying the estimated number of GS-14, Step 
5 management analysts (1) by the time required for technical assistance 
development (8 hours) and by the hourly compensation rate ($76.48/
hour). This calculation would result in a one-time labor cost of $612.
    The Departments estimated DOL's annual labor cost associated with 
the second approach by multiplying the estimated number of GS-14, Step 
5 management analysts (1) by the time required for technical assistance 
delivery (4 hours) and by the hourly compensation rate ($76.48/hour). 
This calculation would result in an annual labor cost of $306.
    At the State level for the DOL core programs, the Departments 
estimated the second approach's annual labor cost by multiplying the 
estimated number of management analysts (1) by the sum of time required 
for data collection (4 hours), providing training and technical 
assistance to Local WDBs (3 hours), and Federal reporting (4 hours) and 
by the hourly compensation rate ($45.88/hour). We multiplied the labor 
cost ($505) by the number of States (57) to estimate this annual cost 
of $28,767.
    For local-level DOL core programs, the Departments estimated the 
annual labor cost for the second approach by multiplying the estimated 
number of management analysts (1) by the time required for data 
collection (4 hours) and by the hourly compensation rate ($60.60/hour). 
We multiplied the labor cost ($242) by the number of Local

[[Page 55967]]

WDBs (580) to estimate this annual cost of $140,592.
    At the Federal level for the AEFLA program, the Departments 
estimated the one-time labor cost associated with the second approach 
in the pilot program by multiplying the estimated number of GS-14, Step 
5 management analysts (1) by the time required for technical assistance 
development (8 hours) and by the hourly compensation rate ($76.48/
hour). This calculation would result in a one-time labor cost of $612.
    The Departments estimated AEFLA's annual labor cost associated with 
the second approach by multiplying the estimated number of GS-14, Step 
5 management analysts (1) by the time required for technical assistance 
delivery (4 hours) and by the hourly compensation rate ($76.48/hour). 
This calculation would result in an annual labor cost of $306.
    At the State level for the AEFLA program, the Departments estimated 
the second approach's annual labor cost by multiplying the estimated 
number of management analysts (1) by the sum of time required for data 
collection (4 hours), providing training and technical assistance to 
local AEFLA providers (3 hours), and Federal reporting (4 hours) and by 
the hourly compensation rate ($45.88/hour). We multiplied the labor 
cost ($505) by the number of States (57) to estimate this annual cost 
of $28,767.
    For the local-level AEFLA program, the Departments estimated the 
annual labor cost for the second approach by multiplying the estimated 
number of management analysts (1) by the time required for data 
collection (4 hours) and by the hourly compensation rate ($60.60/hour). 
We multiplied the labor cost ($242) by the number of local AEFLA 
providers (2,396) to estimate this annual cost of $580,790.
    At the Federal level for the VR program, the Departments estimated 
the one-time labor cost associated with the second approach in the 
pilot program by multiplying the estimated number of GS-14, Step 5 
management analysts (1) by the time required for technical assistance 
development (8 hours) and by the hourly compensation rate ($76.48/
hour). This calculation would result in a one-time labor cost of $612.
    The Departments estimated the VR program's annual labor cost 
associated with the second approach by multiplying the estimated number 
of GS-14, Step 5 management analysts (1) by the time required for 
technical assistance delivery (4 hours) and by the hourly compensation 
rate ($76.48/hour). This calculation would result in an annual labor 
cost of $306.
    At the State level for the VR program, the Departments estimated 
the second approach's one-time labor cost by multiplying the estimated 
number of staff trainers (1) by the time required for training of 
rehabilitation counselors (4 hours) and by the hourly compensation rate 
($54.21/hour). We repeated the calculation for the rehabilitation 
counselors (62 assistants at $36.66/hour for 1 hour each). We summed 
the labor cost for both categories ($2,490) and multiplied it by the 
number of VR agencies (80) to estimate this one-time cost of $199,181.
    The Departments estimated the State-level VR program's annual labor 
cost associated with the second approach by multiplying the estimated 
number of management analysts (1) by the time required for Federal 
reporting (4 hours) and by the hourly compensation rate ($45.88/hour). 
In addition, we added the estimated number of rehabilitation counselors 
(62 assistants) by the time required for data collection (1 hour each) 
and by the hourly compensation rate ($36.66/hour). We summed the labor 
cost for both categories ($2,456) and multiplied it by the number of VR 
agencies (80) to estimate this annual cost of $196,515.
    In total, Approach 2 would result in one-time costs of $201,016 for 
individuals from the Federal-level DOL core programs, AEFLA program, 
and VR program and the State-level VR program. In addition, Approach 2 
would result in $976,349 in annual costs for the Federal-, State-, and 
local-level DOL core programs and AEFLA program and the State-level VR 
program.
Approach 3--Percentage of Repeat Employers Using Services Within the 
Previous 3 Years
    At the Federal level for the DOL core programs, the Departments 
estimated the one-time labor cost associated with the third approach in 
the pilot program by multiplying the estimated number of GS-14, Step 5 
management analysts (1) by the time required for technical assistance 
development (8 hours) and by the hourly compensation rate ($76.48/
hour). This calculation would result in a one-time labor cost of $612.
    The Departments estimated DOL's annual labor cost associated with 
the third approach by multiplying the estimated number of GS-14, Step 5 
management analysts (1) by the time required for technical assistance 
delivery (4 hours) and by the hourly compensation rate ($76.48/hour). 
This calculation would result in an annual labor cost of $306.
    At the State level for the DOL core programs, the Departments 
estimated the third approach's annual labor cost by multiplying the 
estimated number of management analysts (1) by the sum of time required 
for data collection (4 hours), providing training and technical 
assistance to Local WDBs (3 hours), and Federal reporting (4 hours) and 
by the hourly compensation rate ($45.88/hour). We multiplied the labor 
cost ($505) by the number of States (57) to estimate this annual cost 
of $28,767.
    For the local-level DOL core programs, the Departments estimated 
the annual labor cost for third approach in the pilot program by 
multiplying the estimated number of management analysts (1) by the time 
required for data collection (6 hours) and by the hourly compensation 
rate ($60.60/hour). We multiplied the labor cost ($364) by the number 
of Local WDBs (580) to estimate this annual cost of $210,888.
    At the Federal level for the AEFLA program, the Departments 
estimated the one-time labor cost associated with the third approach in 
the pilot program by multiplying the estimated number of GS-14, Step 5 
management analysts (1) by the time required for technical assistance 
development (8 hours) and by the hourly compensation rate ($76.48/
hour). This calculation would result in a one-time labor cost of $612.
    The Departments estimated AEFLA's annual labor cost associated with 
the third approach by multiplying the estimated number of GS-14, Step 5 
management analysts (1) by the time required for technical assistance 
delivery (4 hours) and by the hourly compensation rate ($76.48/hour). 
This calculation would result in an annual labor cost of $306.
    At the State level for the DOL core programs, the Departments 
estimated the third approach's annual labor cost by multiplying the 
estimated number of management analysts (1) by the sum of time required 
for data collection (4 hours), providing training and technical 
assistance to local AEFLA providers (3 hours), and Federal reporting (4 
hours) and by the hourly compensation rate ($45.88/hour). We multiplied 
the labor cost ($505) by the number of States (57) to estimate this 
annual cost of $28,767.
    For the local-level AEFLA program, the Departments estimated the 
annual labor cost for the third approach by multiplying the estimated 
number of management analysts (1) by the time required for data 
collection (6 hours) and by the hourly compensation rate ($60.60/hour). 
We multiplied the labor cost ($364) by the number of local AEFLA 
providers (2,396) to estimate this annual cost of $871,186.
    At the Federal level for the VR program, the Departments estimated 
the

[[Page 55968]]

one-time labor cost associated with the third approach in the pilot 
program by multiplying the estimated number of GS-14, Step 5 management 
analysts (1) by the time required for technical assistance development 
(8 hours) and by the hourly compensation rate ($76.48/hour). This 
calculation would result in a one-time labor cost of $612.
    The Departments estimate the VR program's annual labor cost 
associated with the third approach by multiplying the estimated number 
of GS-14, Step 5 management analysts (1) by the time required for 
technical assistance delivery (4 hours) and by the hourly compensation 
rate ($76.48/hour). This calculation would result in an annual labor 
cost of $306.
    At the State level for the VR program, the Departments estimated 
the third approach's one-time labor cost by multiplying the estimated 
number of staff trainers (1) by the time required for training of 
rehabilitation counselors (4 hours) and by the hourly compensation rate 
($54.21/hour). We repeated the calculation for the rehabilitation 
counselors (62 counselors at $36.66/hour for 1 hour each). We summed 
the labor cost for both categories ($2,490) and multiplied it by the 
number of VR agencies (80) to estimate this one-time cost of $199,181.
    The Departments estimated the State-level VR program annual labor 
cost associated with the third approach by multiplying the estimated 
number of management analysts (1) by the time required for Federal 
reporting (4 hours) and by the hourly compensation rate ($45.88/hour). 
In addition, we added the estimated number of rehabilitation counselors 
(62 counselors) by the time required for data collection (1 hour each) 
and by the hourly compensation rate ($36.66/hour). We summed the labor 
cost for both categories ($2,456) and multiplied it by the number of VR 
agencies (80) to estimate this annual cost of $196,515.
    In total, Approach 3 would result in one-time costs of $201,016 for 
individuals from the Federal-level DOL core programs, AEFLA program, 
and VR program and the State-level VR program. In addition, Approach 3 
would result in $1.3 million (1,337,040) in annual costs for the 
Federal-, State-, and local-level DOL core programs and AEFLA program 
and the State-level VR program.
    As presented in Exhibit 49, Approach 1 is the lowest-cost approach 
with $73,041 in one-time costs and $72,124 in annual costs for Federal- 
and State-level costs for DOL, AEFLA, and the VR program. Approach 3 is 
the highest-cost approach with $201,016 in one-time costs and $1.3 
million ($1,337,040) in annual costs for Federal-, State-, and local-
level costs for DOL and AEFLA and Federal- and State-level costs for 
the VR program.

       Exhibit 49--Estimated Cost of the Pilot Program by Approach
------------------------------------------------------------------------
                Approach                   One-time cost    Annual cost
------------------------------------------------------------------------
Approach 1--Retention with the Same              $73,041         $72,124
 Employer...............................
Approach 2--Percentage of Employers              201,016         976,349
 Using Services Out of All Employers in
 the State..............................
Approach 3--Percentage of Repeat                 201,016       1,337,040
 Employers Using Services within the
 Previous 3 Years.......................
------------------------------------------------------------------------

    The Departments estimated the one-time labor cost for the pilot 
program to be incurred in 2016 and the annual labor cost to be incurred 
in 2017 by taking the average of the low-end range of costs (i.e., if 
all States were to choose the two lowest-cost approaches) and the high-
end range of costs (i.e., if all States were to choose the two highest-
cost approaches). If all States chose the two lowest-cost approaches 
(i.e., Approaches 1 and 2), the one-time cost to the States would be 
$274,057 ($73,041 + $201,016). If all States chose the two highest-cost 
approaches (i.e., Approaches 2 and 3), the one-time cost to the States 
would be $402,032 ($201,016 + $201,016). We took the average of this 
range to estimate the one-time cost of the pilot program of $338,045 to 
be incurred in 2016. We repeated this calculation to estimate the 
annual cost for the pilot program. If all States chose the two lowest-
cost approaches, the annual cost to the States would be $1.0 million 
($1,048,473) ($72,124 + $976,349). If all States chose the two highest-
cost approaches, the annual cost to the States would be $2.0 million 
($2,313,389) ($976,349 + $1,337,040). We took the average of this range 
to estimate the annual cost of the pilot program of $1.7 million 
($1,680,931) to be incurred in 2017. The sum of these calculations 
results in a total 10-year cost of $2.0 million ($2,018,976), which is 
equal to an average annual cost of $201,898 for the pilot program.
    The Departments estimated the one-time labor cost for 
implementation to be incurred in 2019 and the annual labor cost to be 
incurred annually starting in 2020 by taking the average of the low-end 
range of costs (i.e., if all States were to choose the lowest-cost 
approach) and the high-end range of costs (i.e., if all States were to 
choose the highest-cost approach). If all States chose the lowest-cost 
approach (i.e., Approach 1), the one-time cost to the States would be 
$73,041. If all States chose the highest-cost approach (i.e., Approach 
2), the one-time cost to the States would be $201,016. We took the 
average of this range to estimate the one-time cost of the program of 
$137,029 to be incurred in 2019. We repeated this calculation to 
estimate the annual cost for the program. If all States chose the 
lowest-cost approach, the annual cost to the States would be $72,124. 
If all States chose the highest-cost approach, the annual cost to the 
States would be $1.3 million ($1,337,040). We took the average of this 
range to estimate the annual cost of the program of $704,582 to be 
incurred beginning in 2020. The sum of these calculations results in a 
total 10-year cost of $4.4 million ($4,364,521), which is equal to an 
average annual cost of $436,452 for the implementation.
    The sum of the costs for the pilot program and the implementation 
results in a total 10-year cost of $6.4 million ($6,383,497), which is 
equal to an average annual cost of $638,350 for the implementation.
iii. Negotiation of Levels of Performance
    WIOA sec. 116(b)(3) requires States to negotiate with DOL and ED 
and agree on levels of performance for each performance indicator for 
each core program every 2 years. States must establish expected levels 
of performance for each of the six core programs in the submitted 
Unified or Combined State Plan. Prior to approving the Unified or 
Combined State Plan, however, DOL and ED must negotiate with the States 
to agree on an adjusted performance level (referred to as a 
``negotiated level of performance'' in Sec.  677.170(b) of these final 
regulations). The negotiated level of performance must be incorporated 
into the Unified or Combined Plan prior to its approval. The negotiated 
levels of performance are based on factors including how the expected 
levels compare to other States, the statistical

[[Page 55969]]

adjustment model, the extent to which the levels promote continuous 
improvement, and the extent to which the levels will assist the State 
in meeting its long-term performance goals. This negotiation of levels 
of performance will result in recurring costs incurred by each core 
program.
    Costs will be incurred by entities at Federal, State, and local 
levels to negotiate adjusted levels of performance. Specifically, 
biennial labor costs will be incurred at the Federal, State, and local 
levels for the DOL core programs, at the Federal and State levels for 
the AEFLA program, and at the Federal and State levels for the VR 
program.
Costs
    At the Federal level for DOL core programs (see Exhibit 13), the 
Departments estimated this labor cost by first multiplying the 
estimated number of GS-14 level, Step 5 managers (1) by the time 
required to negotiate levels of performance (8 hours) and by the hourly 
compensation rate ($76.48/hour). We performed the same calculation for 
GS-12 level, Step 5 management analysts (2 analysts at $54.43/hour for 
8 hours each). We summed the labor cost for both categories to estimate 
this biennial cost of $1,483. This calculation results in a total 10-
year cost of $7,414, which is equal to an average annual cost of $741.
    At the State level for DOL core programs (see Exhibit 16), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per State (1) by the time required to 
negotiate levels of performance (8 hours) and by the hourly 
compensation rate ($65.39/hour). We performed the same calculation for 
office and administrative support staff members (2 staff members at 
$30.57/hour for 8 hours each). We summed the labor cost for both 
categories ($1,012) and multiplied the result by the number of States 
(57). This calculation yields a biennial cost of $57,698. Over the 10-
year period, this calculation results in a total cost of $288,488, 
which is equal to an average annual cost of $28,849.
    At the local level for DOL core programs (see Exhibit 19), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per Local WDB (1) by the time required to 
negotiate levels of performance (8 hours) and by the hourly 
compensation rate ($63.63/hour). We performed the same calculation for 
office and administrative support staff members (2 staff members at 
$29.36/hour for 8 hours each). We summed the labor cost for both 
categories ($979) and multiplied the result by the number of Local WDBs 
(580), which results in a biennial cost of $567,704. This calculation 
results in a total 10-year cost of $2.8 million ($2,838,520), which is 
equal to an average annual cost of $283,852.
    At the Federal level for the AEFLA programs (see Exhibit 14), the 
Departments estimated this labor cost by first multiplying the 
estimated number of GS-14 level, Step 5 managers (4) by the time 
required to negotiate levels of performance (24 hours each) and by the 
hourly compensation rate ($76.48/hour). We performed the same 
calculation for GS-13 level, Step 5 social and community service 
managers (4 managers at $64.71/hour for 24 hours each). We summed the 
labor cost for both categories to estimate this biennial cost of 
$13,554. Over the 10-year period, this calculation yields a total cost 
of $67,771, which is equal to an average annual cost of $6,777.
    At the State level for the AEFLA program (see Exhibit 17), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per State (1) by the time required to 
negotiate levels of performance (12 hours) and by the hourly 
compensation rate ($65.39/hour). We repeated the calculation for social 
and community service managers (1 manager at $54.21/hour for 12 hours). 
We summed the labor cost for both categories ($1,435) and multiplied 
the result by the number of States (57). This calculation results in a 
biennial cost of $81,806. Over the 10-year period, this calculation 
results in a total cost of $409,032, which is equal to an average 
annual cost of $40,903.
    At the Federal level for the VR program (see Exhibit 15), the 
Departments estimated this biennial labor cost by first multiplying the 
estimated number of GS-14 level, Step 5 managers (4) by the time 
required to negotiate levels of performance (12 hours each) and by the 
hourly compensation rate ($76.48/hour).\45\ The biennial labor cost of 
$3,671 results in a total 10-year cost of $18,355, which is equal to an 
average annual cost of $1,836.
---------------------------------------------------------------------------

    \45\ Managers include data, VR program, State liaison, and unit 
chief participation.
---------------------------------------------------------------------------

    For State VR agencies (see Exhibit 18), the Departments estimated 
the cost of negotiating levels of performance by first multiplying the 
estimated number of managers per VR agency (1) by the time required to 
negotiate adjusted levels of performance (12 hours) and by the hourly 
compensation rate ($65.39/hour). We repeated the calculation for the 
following occupational categories: social and community service 
managers (2 managers at $54.21/hour for 12 hours each) and management 
analysts (2 analysts at $45.88/hour for 12 hours each). We summed the 
labor cost for the three categories ($3,187) and multiplied the result 
by the number of VR agencies (80) to estimate this biennial cost as 
$254,947. This calculation results in a 10-year cost of $1.3 million 
($1,274,736), which is equal to an average annual cost of $127,474 over 
the 10-year analysis period.
    The sum of these calculations yields a biennial cost of $980,863 
for individuals from the Federal, State, and local level for the DOL 
core programs, from the Federal- and State-levels for the AEFLA 
program, and from the Federal and State levels for the VR program to 
negotiate levels of performance. This results in a total 10-year cost 
of $4.9 million ($4,904,316), which is equal to an average annual cost 
of $490,432.
iv. Running Statistical Adjustment Model To Adjust Levels of 
Performance Based on Actual Economic Conditions and Characteristics of 
Participants
    WIOA sec. 116(b)(3) requires DOL, ED, and States to ensure that 
negotiated levels of performance are adjusted using a statistical 
adjustment model--developed and disseminated by DOL and ED--based on 
the differences among States in (1) actual economic conditions 
(including differences in unemployment rates and job losses or gains in 
particular industries) and (2) the characteristics of participants when 
they entered the relevant program (including indicators of poor work 
history, lack of work experience, lack of education or occupational 
skills attainment, dislocation from high-wage and high-benefit 
employment, low levels of literacy or English proficiency, disability 
status, homelessness, ex-offender status, and welfare dependency). 
Regularly adjusting the levels of performance for each primary 
performance indicator for each core program will result in annual costs 
being incurred at the Federal, State, and local levels for the DOL core 
programs, at the Federal level for the AEFLA program, and at the 
Federal and State levels for the VR program to collect and update data 
on participants. Furthermore, DOL will experience costs related to 
annual licensing fees.
Costs
    At the Federal level for DOL core programs (see Exhibit 13), the 
Departments estimated this labor cost by first multiplying the 
estimated number

[[Page 55970]]

of GS-14 level, Step 5 managers (1) by the time required to collect and 
update data on the core programs' participants (250 hours) and by the 
hourly compensation rate ($76.48/hour). We performed the same 
calculation for GS-13 level, Step 5 computer systems analysts (2 
analysts at $64.71/hour for 1,000 hours each). We summed the labor cost 
for both categories to estimate this annual cost of $148,540, which 
results in a total 10-year cost of $1.5 million ($1,485,400).\46\
---------------------------------------------------------------------------

    \46\ For DOL programs, the Federal program will experience the 
heaviest burden as ETA will produce all State and local calculations 
and disseminate them to States and local areas.
---------------------------------------------------------------------------

    The Departments estimated the annual licensing fee for DOL to be 
$10,000, or a total cost of $100,000 over the 10-year analysis period.
    At the State level for DOL core programs (see Exhibit 16), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per State (1) by the time required to 
collect and update data on the programs' participants (10 hours) and by 
the hourly compensation rate ($65.39/hour). We performed the same 
calculation for the following occupational categories: computer systems 
analysts (2 analysts at $56.17/hour for 40 hours each) and office and 
administrative support staff members (2 staff members at $30.57/hour 
for 20 hours each). We summed the labor cost for the three categories 
($6,370) and multiplied the result by the number of States (57) to 
estimate this annual cost of $363,107. This result is equal to a total 
10-year cost of $3.6 million ($3,631,071).
    At the local level for DOL core programs (see Exhibit 19), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per Local WDB (1) by the time required to 
collect and update data on the programs' participants (10 hours) and by 
the hourly compensation rate ($63.63/hour). We performed the same 
calculation for the following occupational categories: computer systems 
analysts (2 analysts at $60.76/hour for 40 hours each) and office and 
administrative support staff members (2 staff members at $29.36/hour 
for 20 hours each). We summed the labor cost for both categories 
($6,672) and multiplied the result by the number of Local WDBs (580). 
The annual cost is estimated to be $3.9 million ($3,869,470), which 
results in a 10-year total cost of $38.7 million ($38,694,700).
    At the Federal level for the AEFLA program (see Exhibit 14), the 
Departments estimated this labor cost by first multiplying the 
estimated number of GS-14 level, Step 5 managers (2) by the time 
required to provide Federal oversight and technical assistance (40 
hours each) and by the hourly compensation rate ($76.48/hour). We 
performed the same calculation for GS-12 level, Step 5 management 
analysts (2 analysts at $54.43/hour for 80 hours each). We summed the 
labor cost for both categories to estimate this annual cost of $14,827, 
which results in a total 10-year cost of $148,272.
    At the Federal level for the VR program (see Exhibit 15), the 
Departments estimated this biennial labor cost by first multiplying the 
estimated number of GS-14 level, Step 5 managers (2) by the time 
required to collect and update data on its participants (52 hours each) 
and by the hourly compensation rate ($76.48/hour).\47\ The Departments 
repeated the calculation for GS-13 level, Step 5 database 
administrators (2 administrators at $64.71/hour for 156 hours each). We 
summed the annual labor cost for the two categories ($28,143), which 
results in a total 10-year cost of $281,434.
---------------------------------------------------------------------------

    \47\ Managers will include data unit database administrative 
staff and management staff.
---------------------------------------------------------------------------

    For State VR agencies (see Exhibit 18), the Departments estimated 
this cost by first multiplying the estimated number of managers per VR 
agency (1) by the time required to collect and update data on its 
participants (4 hours) and by the hourly compensation rate ($65.39/
hour). We repeated the calculation for the following occupational 
categories: Database administrators (1 administrator at $57.02/hour for 
20 hours), computer systems analysts (1 analyst at $56.17/hour for 4 
hours), and management analysts (1 analyst at $45.88/hour for 4 hours). 
We summed the labor cost for the four categories ($1,810) and 
multiplied the result by the number of VR agencies (80) to estimate 
this annual cost as $144,813, which results in a total 10-year cost of 
$1.4 million ($1,448,128).
    The sum of these calculations yields an annual cost of $4.6 million 
($4,578,901) for individuals from the Federal, State, and local levels 
for the DOL core programs, the Federal level for the AEFLA program, and 
the Federal and State levels for the VR program to collect and update 
data on their participants. This is equal to a 10-year total cost of 
$45.8 million ($45,789,005).
v. Additional State Performance Accountability Indicators (Beyond 
Required Performance Indicators)
    Under WIOA sec. 116(b), States must include levels of performance 
for the six primary performance indicators in their Unified or Combined 
State Plans. In addition, WIOA sec. 116(b)(2)(B) permits States to 
identify in the State Plan additional performance accountability 
indicators for the core programs beyond the six required primary 
indicators. Although States had similar latitude under WIA, no State 
has ever established additional performance indicators. Therefore, the 
Departments do not expect any State to establish additional performance 
accountability indicators under WIOA. If a State chooses to do so, 
however, we have conservatively calculated a burden estimate based on 
five States establishing additional indicators of performance. The 
costs associated with this activity are those incurred by State-level 
DOL core programs, State- and local-level AEFLA programs, and State VR 
agencies having to collect additional data to report on the additional 
performance indicators in the first year of the Final Rule.
Costs
    At the State level for DOL core programs (see Exhibit 31), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per State providing additional data (1) by 
the time required to collect additional data (16 hours) and by the 
hourly compensation rate ($65.39/hour). We performed the same 
calculation for computer systems analysts (3 analysts at $56.17/hour 
for 40 hours each) and office and administrative support staff members 
(1 staff member at $30.57/hour for 36 hours). We summed the labor cost 
for all three categories ($8,887) and multiplied the result by the 
number of States providing additional data (5) to estimate this one-
time cost of $44,436. Over the 10-year period, this calculation yields 
an average annual cost of $4,444.
    At the State level for the AEFLA program (see Exhibit 32), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per State providing additional data (1) by 
the time required to collect additional data (8 hours) and by the 
hourly compensation rate ($65.39/hour). We repeated the calculation for 
the following occupational categories: Database administrators (1 
administrator at $57.02/hour for 8 hours), computer systems analysts (1 
analyst at $56.17/

[[Page 55971]]

hour for 8 hours), and social and community service managers (3 
managers at $54.21/hour for 8 hours each). We summed the labor cost for 
all four categories ($2,730) and multiplied the result by the number of 
States providing additional data (5) to estimate this one-time cost of 
$13,648.\48\ Over the 10-year period, this calculation yields an 
average annual cost of $1,365.
---------------------------------------------------------------------------

    \48\ This provision will be a joint effort between State and 
local AEFLA staff.
---------------------------------------------------------------------------

    At the local level for the AEFLA program (see Exhibit 34), the 
Departments estimated this cost by first multiplying the estimated 
number of managers per local AEFLA provider proving additional data (1) 
by the time required to collect additional data (4 hours) and by the 
hourly compensation rate ($63.63/hour). We performed the same 
calculation for database administrators (1 administrator at $59.60/hour 
for 4 hours). We summed the labor cost for the two occupational 
categories ($493) and multiplied the result by the number of local 
AEFLA providers providing additional data (200) to estimate this one-
time cost of $98,584. Over the 10-year period, this calculation yields 
an average annual cost of $9,858.
    For State VR agencies (see Exhibit 33), the Departments estimated 
this cost by first multiplying the estimated number of managers per VR 
agency providing additional data (1) by the time required to collect 
additional data (8 hours) and by the hourly compensation rate ($65.39/
hour). We repeated the calculation for the following occupational 
categories: Database administrators (1 administrator at $57.02/hour for 
8 hours), computer systems analysts (1 analyst at $56.17/hour for 8 
hours), and social and community service managers (3 managers at 
$54.21/hour for 8 hours each). We summed the labor cost for the four 
categories ($2,730) and multiplied the result by the number of VR 
agencies providing additional data (5) to estimate this one-time cost 
as $13,648. Over the 10-year period, this calculation yields an average 
annual cost of $1,365.
    The sum of these calculations yields a total first-year cost of 
$170,317 from the State-level DOL core programs, State- and local-level 
AEFLA programs, and State VR agencies to collect additional data. This 
is equal to an average annual cost of $17,032.
vi. Technical Assistance to States
    The cost of this activity reflects the Federal cost for procuring a 
consultant to provide technical assistance to States in the collection 
of data to comply with the new performance accountability requirements 
of WIOA. The cost for this activity was not included in the NPRM, 
because the FY 2017 budget request was in the process of being 
developed. For FY 2017, the Administration requested funds to help meet 
WIOA performance requirements through improved data infrastructure 
along with $1 million for ED to provide technical assistance to help 
AEFLA grantees comply with the new requirements, including the 
collection of new WIOA data elements. The total 10-year cost 
(undiscounted) for this activity represents a one-time Federal 
consultant cost of $1 million in the second year of WIOA.
Costs
    At the Federal level for the AEFLA program (see Exhibit 14), the 
Departments estimated the cost related to providing technical 
assistance to States to comply with the new WIOA performance 
accountability requirements, including the collection and reporting of 
new data as a one-time consultant cost ($1,000,000) in the second year 
of the rule. Over the 10-year period, this calculation yields an 
average annual cost of $100,000.
vii. Performance Reports
    Under WIOA sec. 116(d)(6), States must make available (including by 
electronic means) performance reports for local areas and for ETPs 
under title I of WIOA. WIA required DOL to make State performance 
reports publicly available but did not require States, themselves, to 
make their performance reports available (see WIA sec. 136(d)(3)). 
Section 116(d)(1) of WIOA requires the Departments to provide a 
performance reporting template to be used by States, Local WDBs, and 
ETPs for the performance reports required in WIOA secs. 116(d)(2) 
through (4). This Final Rule requires States to submit quarterly 
participant and performance data reports for each of the DOL core 
programs. Because DOL has required quarterly reporting for its programs 
prior to WIOA, the frequency of the reporting requirement should not 
result in incremental cost increases for any of the DOL core programs; 
rather, the Federal costs associated with this rule's performance 
reporting requirements will be associated with the implementation of 
the new performance reporting template. In addition, DOL State-level 
costs will be associated with developing, updating, and submitting ETP 
reports because while ETP reporting was required under WIA, many States 
received waivers allowing them not to make the submissions. Under WIOA, 
DOL does not expect to allow waivers for this reporting requirement. 
The State-level AEFLA programs reported annually under WIA, while 
local-level AEFLA programs reported annually to States under WIA, and 
both will continue to do so under WIOA. AEFLA programs will incur costs 
to collect, analyze, and report performance data. Under WIA, VR 
agencies submitted annual performance data on closed service records 
through the RSA-911 Case Service Report, and under WIOA, they will 
incur costs to transition to reporting on open and closed service 
records on a quarterly basis.
    The DOL and ED, for purposes of the DOL core programs and the AEFLA 
program, will incur annual Federal level costs to collect, analyze, and 
report performance data. Furthermore, both Federal agencies will 
experience annual costs for software and IT systems. The Departments do 
not anticipate an increase in annual Federal-level costs for the VR 
program compared to the baseline. However, ED will incur a one-time 
software and IT systems cost to support its ability to compile 
quarterly data reported by VR agencies into annual reports required 
under WIOA. At the State level for the DOL core programs, the AEFLA 
program, and the VR program, as well as at the local level for the 
AEFLA program, there will be annual costs to collect, analyze, and 
report performance data.
Costs
    At the Federal level for DOL core programs (see Exhibit 35), the 
Departments estimated this labor cost by first multiplying the 
estimated average number of GS-14, Step 5 managers (1) by the time 
required to implement and review the new performance reporting template 
(8 hours) and by the hourly compensation rate ($76.48/hour). We 
performed the same calculation for GS-13, Step 5 computer systems 
analysts (1 analyst at $64.71/hour for 5 hours) and GS-12, Step 5 
management analysts (1 analyst at $54.43/hour for 16 hours). We summed 
the labor cost for all three categories to estimate an annual cost of 
$1,806, which results in a total cost of $18,063 over the 10-year 
analysis period.
    The Departments estimated the annual software and IT systems cost 
at the Federal level for the DOL core programs to be $250,000, which 
yields a total cost of $2.5 million ($2,500,000) over the 10-year 
analysis period.
    At the State level for the DOL core programs (see Exhibit 38), the 
Departments estimated this labor cost by first multiplying the 
estimated average number of managers per State (1) by the

[[Page 55972]]

time required to develop, update, and submit ETP reports (8 hours) and 
by the hourly compensation rate ($65.39/hour). We performed the same 
calculation for the following occupational categories: Computer system 
analysts (1 analyst at $56.17/hour for 40 hours), management analysts 
(1 analyst at $45.88/hour for 60 hours), and office and administrative 
staff members (4 staff members at $30.57/hour for 20 hours each). We 
summed the labor cost for all four categories ($7,968) and multiplied 
the result by the number of States (57) to estimate an annual cost of 
$454,194, which results in a total cost of $4.5 million ($4,541,942) 
over the 10-year analysis period.
    At the Federal level for the AEFLA program (see Exhibit 36), the 
Departments estimated this labor cost by first multiplying the 
estimated number of GS-14, Step 5 managers (1) by the time required to 
collect, analyze, and report performance data (8 hours) and by the 
hourly compensation rate ($76.48/hour). We repeated the calculation for 
GS-13, Step 5 social and community service managers (1 manager at 
$64.71/hour for 16 hours) and GS-13, Step 5 database administrators (1 
administrator at $64.71/hour for 40 hours). We summed the labor cost 
for all three categories to estimate an annual cost of $4,236. Over the 
10-year period, this calculation yields a total cost of $42,356.
    The Departments estimated a one-time software and IT systems cost 
at the Federal level for the AEFLA program to be $5 million for 
development, modernization, and enhancement. Over the 10-year period, 
this calculation yields an average annual cost of $500,000.
    The Departments also estimated the annual software and IT systems 
cost for the AEFLA program at the Federal level to be $250,000 to 
maintain the steady state. Over the 10-year period, this calculation 
yields a cost of $2.5 million ($2,500,000).
    At the State level for the AEFLA program (see Exhibit 39), the 
Departments estimated this labor cost by first multiplying the 
estimated average number of managers per State (1) by the time required 
to collect, analyze, and report performance data (40 hours) and by the 
hourly compensation rate ($65.39/hour). We repeated the calculation for 
the following occupational categories: Computer systems analysts (1 
analyst at $56.17/hour for 40 hours), social and community service 
managers (3 managers at $54.21/hour for 40 hours each), and database 
administrators (1 administrator at $57.02/hour for 40 hours). We summed 
the labor cost for all four categories ($13,648) and multiplied the 
result by the number of States (57) to estimate an annual cost of 
$777,959. Over the 10-year period, this calculation yields a total cost 
of $7.8 million ($7,779,588).\49\
---------------------------------------------------------------------------

    \49\ This provision will be a joint effort between State and 
local AEFLA staff.
---------------------------------------------------------------------------

    At the local level for the AEFLA program (see Exhibit 41), the 
Departments estimated this cost by first multiplying the estimated 
number of managers per local AEFLA provider (1) by the time required to 
collect, analyze, and report performance data (8 hours) and by the 
hourly compensation rate ($63.63/hour). We performed the same 
calculation for social and community service managers (1 manager at 
$61.01/hour for 8 hours) and database administrators (1 administrator 
at $59.60/hour for 8 hours). We summed the labor cost for all three 
occupational categories ($1,474) and multiplied the result by the 
number of local AEFLA providers (2,396) to estimate an annual cost of 
$3.5 million ($3,531,512). Over the 10-year period, this calculation 
yields a total cost of $35.3 million ($35,315,123).
    At the Federal level for the VR program (see Exhibit 37), the 
Departments estimated a one-time software and IT systems cost to be 
$68,925 to support ED's ability to compile quarterly data reported by 
VR agencies into annual reports required under WIOA. Over the 10-year 
period, this calculation yields an average annual cost of $6,893.
    For State VR agencies (see Exhibit 40), the Departments estimated 
this cost by first multiplying the estimated number of managers per VR 
agency (1) by the time required to review and verify the annual 
performance report that RSA will assemble from the quarterly RSA-911 
data that the States have previously reported (5 hours) and by the 
hourly compensation rate ($65.39/hour). We repeated the calculation for 
the following occupational categories: Computer systems analysts (1 
analyst at $56.17/hour for 5 hours), social and community service 
managers (2 managers at $54.21/hour for 10 hours each), and database 
administrators (1 administrator at $57.02/hour for 25 hours). We summed 
the labor cost for all four categories ($3,118) and multiplied the 
result by the number of VR agencies (80) to estimate an annual cost as 
$249,400, which results in a total 10-year cost of $2.5 million 
($2,494,000).\50\
---------------------------------------------------------------------------

    \50\ Costs for the Federal RSA program are not estimated because 
Federal costs for report generation will not be in excess of current 
RSA-911 report costs.
---------------------------------------------------------------------------

    For State VR agencies (see Exhibit 40), the Departments estimated 
this cost by first multiplying the estimated number of staff trainers 
per VR agency (1) by the time required to train staff on new data 
collection (6 hours) and by the hourly compensation rate ($54.21/hour). 
We repeated the calculation for rehabilitation counselors (62 
counselors at $36.66/hour for 3 hours each). We summed the labor cost 
for both categories ($7,144) and multiplied the result by the number of 
VR agencies (80) to estimate a one-time cost of $571,522, which results 
in an average annual cost of $57,152.
    For State VR agencies (see Exhibit 40), the Departments estimated 
this cost by first multiplying the estimated number of rehabilitation 
counselors (62) by the time required to collect data in the first year 
(58 hours) and by the hourly compensation rate ($36.66/hour). We summed 
the labor cost ($131,829) and multiplied the result by the number of VR 
agencies (80) to estimate a first year cost of $10.5 million 
($10,546,349). We then multiplied the estimated number of 
rehabilitation counselors (62) by the time required to collect data in 
the second and subsequent years (15 hours) and by the hourly 
compensation rate ($36.66/hour). We summed the labor cost ($34,094) and 
multiplied the result by the number of VR agencies (80) to estimate an 
annual cost of $2.7 million ($2,727,504). This results in a total 10-
year cost of $35.1 million ($35,093,885), which is equivalent to an 
average annual cost of $3.5 million ($3,509,388).
    The sum of these calculations yields an average annual cost of $9.6 
million ($9,592,540) for individuals from the Federal- and State-level 
DOL core programs, the Federal-, State-, and local-level AEFLA 
programs, and the Federal- and State-level VR agencies, that will incur 
costs related to the performance reports. This is equal to a total 10-
year cost of $95.9 million ($95,925,404).
viii. Obtain UI Wage Data
    WIOA core programs will need access to quarterly State UI wage data 
to efficiently identify exited participants who are employed in the 
second and fourth full quarters after exit to report on the employment 
performance indicators. These core programs also will need access to 
the State quarterly UI wage data to identify the individual quarterly 
wages in the second full quarter to calculate the median wage 
performance measure. Prior to WIOA, the AEFLA program obtained 
quarterly UI wage data on its participants and DOL's public workforce 
systems had costs associated with UI wage matches. This will be the 
first time, however, that

[[Page 55973]]

State VR agencies will be required to obtain and report UI wage data. 
VR programs will need to contribute a reasonable and proportional share 
of the costs for maintaining and using the State UI wage system and 
interstate wage information systems, on a per individual, per query, 
monthly, quarterly, or annual basis.
Costs
    For State VR agencies (Exhibit 18), the Departments estimated this 
cost by first multiplying the data query cost for large VR agencies 
($20,000) by the number of large VR agencies (10). We then multiplied 
the data query cost for medium VR agencies ($8,000) by the number of 
medium VR agencies (42). Finally, we multiplied the data query cost for 
small VR agencies ($4,000) by the number of small VR agencies (28). We 
summed the annual data query cost for all VR agencies ($648,000), which 
results in a total 10-year cost of $6.5 million ($6,480,000).\51\
---------------------------------------------------------------------------

    \51\ Costs for the Federal RSA program are not estimated because 
Federal costs for report generation will not be in excess of current 
RSA-911 report costs.
---------------------------------------------------------------------------

ix. Data Analytic Software and Training
    VR agencies also will require data analytic and reporting software 
to extract the information required from their data collection systems 
necessary to match individual cases to the employment and quarterly 
earnings data contained in the UI wage data system. DOL and AEFLA, 
which have the software and perform the analytics, will experience no 
incremental costs related to this activity. This software also will be 
required to import the wage and earnings information to their 
information collection and reporting systems, and complete the 
calculations necessary to report on the second quarter employment and 
median-age performance indicators, and on the fourth-quarter employment 
indicator.
Costs
    For State VR agencies (see Exhibit 18), the Departments estimated 
this cost by first multiplying the software and IT systems cost for 
large VR agencies ($25,000) by the number of large VR agencies (10). We 
then multiplied the software and IT systems cost for medium VR agencies 
($15,000) by the number of medium VR agencies (42). Finally, we 
multiplied the software and IT systems cost for small VR agencies 
($10,000) by the number of small VR agencies (28). We summed the one-
time software and IT systems cost for all VR agencies, resulting in a 
total one-time cost of $1.2 million ($1,160,000), which is equivalent 
to an average annual cost of $116,000.\52\
---------------------------------------------------------------------------

    \52\ Costs for the Federal RSA program are not estimated because 
Federal costs for report generation will not be in excess of older 
RSA-911 report costs.
---------------------------------------------------------------------------

    The sum of the costs for the Performance Accountability System, 
which includes the costs to:
     Develop and update State performance accountability 
systems (which includes the cost to align technology and data systems 
across one-stop partner programs);
     Implement measures for data collection and reporting on 
the effectiveness in serving employers;
     Negotiate levels of performance;
     Run a statistical adjustment model to adjust levels of 
performance;
     Obtain data to report on any additional State performance 
accountability indicators beyond required performance indicators;
     Provide technical assistance to States;
     Develop a performance report template;
     Develop, update and submit ETP reports;
     Collect, analyze, and report performance data; and provide 
training;
     Collect UI wage data; and
     Purchase data analytic software and provide training.
    This calculation results in a 10-year total cost of $589.0 million 
($588,988,950), which is equal to an average annual cost of $58.9 
million ($58,898,895).
d. State Evaluation Responsibilities
    WIOA sec. 116(e)(1) requires States, in coordination with Local 
WDBs and agencies responsible for administering core programs, to 
conduct ongoing evaluations of title I activities carried out in the 
State under the core programs. Such program evaluations were required 
under WIA; however, WIOA specifies that SWAs and other State agencies 
must coordinate the evaluations with the evaluation and research 
conducted by the Secretary of Labor or the Secretary of Education under 
the provisions of Federal law identified in WIOA secs. 169 and 
242(c)(2)(D); secs. 12(a)(5), 14, and 107 of the Rehabilitation Act of 
1973 (29 U.S.C. 709(a)(5), 711, 727) (applied with respect to the VR 
program); and the investigations provided for by the Secretary of Labor 
under sec. 10(b) of the Wagner-Peyser Act (29 U.S.C. 49i(b)). 
Additionally, WIOA sec. 116(e)(4) directs that SWAs and other State 
agencies must, to the extent practicable, cooperate in the evaluations 
(including related research projects) conducted under the provisions of 
Federal law identified in the preceding sentence. Specifically, such 
cooperation must include the provision of data and responses to 
surveys, as well as allowing timely site visits. These directives 
regarding coordination within States as well as coordination with and 
cooperation in Federal evaluations were not present in WIA. Finally, 
WIOA sec. 116(e)(3) requires States to prepare and submit annually to 
the State and Local WDBs within a State, and make available to the 
public (including by electronic means), any reports containing the 
results of evaluations conducted by the State under this section. Under 
WIA sec. 136(e)(3), States were required to prepare and submit 
periodically evaluation reports to the State and Local WDBs within the 
State and to DOL as part of their annual report, but were not required 
to make them electronically available to the public.
    Requirements related to Federal coordination to support State 
evaluations will be new to the AEFLA and VR programs under WIOA; 
however, DOL core programs had evaluation-related requirements under 
WIA, as discussed above.
    DOL will incur Federal-level costs for SWA evaluation activities 
under sec. 116(e) of WIOA. The Federal-level AEFLA and VR programs will 
incur costs for providing technical assistance and promoting State 
AEFLA and VR agency participation, respectively, in the coordination 
process (which may include the design and development of State 
evaluation activities). All Federal programs will incur costs for 
technical assistance, monitoring, and dissemination. Costs will be 
incurred by affected entities to coordinate any evaluations of 
activities carried out in the States and in cooperating in the 
provision of various forms of data for Federal evaluations. The 
Departments estimate that implementing these requirements will generate 
annual labor costs at the Federal and State level for DOL and ED 
programs. In addition, there will be some marginal software and IT 
systems and consultant costs for State-level DOL programs.
i. Costs
    At the Federal level for DOL core programs (see Exhibit 42), the 
Departments estimated this labor cost by first multiplying the 
estimated number of GS-14, Step 5 managers per State (2) by the time 
required to support State evaluation activities (25 hours each) and by 
the hourly compensation rate ($76.48/hour). We performed the same

[[Page 55974]]

calculation for GS-13, Step 5 computer system analysts (1 analyst at 
$64.71/hour for 3 hours) and GS-12, Step 5 management analysts (2 
analysts at $54.43/hour for 30 hours each). We summed the labor cost 
for all three categories ($7,284) to estimate the costs this entity 
will incur annually. This is equivalent to a 10-year cost of $72,839.
    At the State level for DOL core programs (see Exhibit 45), the 
Departments estimated this labor cost by first multiplying the 
estimated number of computer systems analysts per State (2) by the time 
required to coordinate any evaluations of activities carried out in the 
States and to cooperate in the provision of various forms of data for 
Federal evaluations (15 hours each) and by the hourly compensation rate 
($56.17/hour). We performed the same calculation for the following 
occupational categories: Social and community managers (1 manager at 
$54.21/hour for 20 hours), management analysts (1 analyst at $45.88/
hour for 10 hours), and office and administrative staff members (1 
staff member at $30.57/hour for 10 hours). We summed the labor cost for 
all four categories ($3,534) and multiplied the result by the number of 
States (57) to estimate an annual cost of $201,427. This is equivalent 
to a 10-year cost of $2.0 million ($2,014,266).
    At the State level for DOL core programs, the Departments estimated 
the software and IT systems costs. We first multiplied the software and 
IT systems cost ($10,000) by the number of States (57) to estimate an 
annual cost of $570,000. This estimate represents the cost associated 
with this Final Rule beyond the IT expenditures currently incurred by 
SWAs. This is equivalent to a 10-year cost of $5.7 million 
($5,700,000).
    At the State level for DOL core programs, the Departments estimated 
the consultant costs. We first multiplied the consultant costs 
($21,400) by the number of States (57) to estimate an annual cost of 
$1.2 million ($1,219,800). This is equivalent to a 10-year cost of 
$12.2 million ($12,198,000).
    At the Federal level for the AEFLA program (see Exhibit 43), the 
Departments estimated the labor cost by first multiplying the estimated 
number of GS-14, Step 5 managers per State (4) by the time required to 
support State adult education agency participation in the coordination 
process (10 hours each) and the hourly compensation rate ($76.48/hour). 
We performed the same calculation for the following occupational 
categories: GS-13, Step 5 computer systems analysts (1 analyst at 
$64.71/hour for 5 hours), and GS-12, Step 5 management analysts (2 
analysts at $54.43/hour for 30 hours each). We summed the labor cost 
for all three categories to estimate an annual cost of $6,649. This is 
equivalent to a 10-year cost of $66,486.
    At the State level for the AEFLA program (see Exhibit 46), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per State (1) by the time required to 
coordinate any evaluations of activities carried out in the States and 
in cooperating in the provision of various forms of data for Federal 
evaluations (10 hours) and by the hourly compensation rate ($65.39/
hour). We performed the same calculation for the following occupational 
categories: Computer systems analysts (1 analyst at $56.17/hour for 20 
hours), social and community managers (1 manager at $54.21/hour for 10 
hours), and management analysts (1 analyst at $45.88/hour for 20 
hours). We summed the labor cost for all four categories ($3,237) and 
multiplied the result by the number of States (57) to estimate an 
annual cost of $184,509. This is equivalent to a 10-year cost of $1.8 
million ($1,845,090).
    At the Federal level for the VR program (see Exhibit 44), the 
Departments estimated the labor cost by first multiplying the estimated 
number of GS-14, Step 5 managers per State (2) by the time required to 
support State VR agency participation and coordination in carrying out 
State evaluations (5 hours each) and the hourly compensation rate 
($76.48/hour). We performed the same calculation for the following 
occupational categories: GS-13, Step 5 social and community service 
managers (2 managers at $64.71/hour for 10 hours each) and GS-12, Step 
5 management analysts (2 analysts at $54.43/hour for 15 hours each). We 
summed the labor cost for all three categories to estimate an annual 
cost of $3,692. This is equivalent to a 10-year cost of $36,919.
    At the State level for the VR program (see Exhibit 47), the 
Departments estimated this labor cost by first multiplying the 
estimated number of managers per State (1) by the time required to 
coordinate any evaluations of activities carried out in the States and 
for cooperating in the provision of various forms of data for Federal 
evaluations (1 hour) and by the hourly compensation rate ($65.39/hour). 
We performed the same calculation for the following occupational 
categories: Computer systems analysts (1 analyst at $56.17/hour for 13 
hours), social and community service managers (1 manager at $54.21/hour 
for 5 hours), management analysts (1 analyst at $45.88/hour for 5 
hours), and office and administrative support staff (1 staff member at 
$30.57/hour for 2 hours). We summed the labor cost for all five 
categories ($1,357) and multiplied the result by the number of VR 
agencies (80) to estimate an annual cost of $108,575. This is 
equivalent to a 10-year cost of $1.1 million ($1,085,752).
    The sum of these calculations yields a total 10-year cost of $23.0 
million ($23,019,352) resulting in an average annual cost of $2.3 
million ($2,301,935), for individuals from the Federal- and State-level 
DOL, AEFLA and VR programs related to State evaluation 
responsibilities.
    Relative to the baseline of practice under WIA, the four provisions 
of the WIOA Final Rule described above are expected to result in costs 
of $626.8 million ($626,780,605) over the 10-year period. This is 
equivalent to an average annual cost of $62.7 million ($62,678,060). 
See section V.A.7 (Summary of Analysis) for a summary of these costs.
7. Summary of Analysis
    Exhibit 50 summarizes the estimated undiscounted average annual 
costs for each provision of this Final Rule. The exhibit also presents 
a high-level qualitative description of the benefits resulting from 
full WIOA implementation for each rule provision. These qualitative 
forecasts are predicated on program experience and are outcomes for 
which data will become available only after implementation. The 
Departments estimate the average annual cost of this Final Rule over 
the 10-year period of analysis to be $62.7 million. The largest 
contributor to this cost is the provision related to the development 
and updating of State performance accountability systems, which is 
estimated at $42.7 million per year. The next largest cost results from 
performance reports at an estimated $9.6 million per year, followed by 
the average cost of adjusting performance based on actual economic 
conditions and characteristics of participants at an estimated $4.6 
million per year.

[[Page 55975]]



          Exhibit 50--Estimated Costs of the Departments of Education and Labor Final Rule by Provision
----------------------------------------------------------------------------------------------------------------
                                                 Average
                 Provision                     annual cost     Percent of       Qualitative benefit highlights
                                             (undiscounted)    total cost
----------------------------------------------------------------------------------------------------------------
(a) Time to Review the New Rule............        $330,562            0.53  General requirement.
(b)(i) Unified or Combined State Plans--            120,202            0.19  Enhanced data for management
 Expanded Content Requirements.                                               decision-making and policy
                                                                              integration; avoided program
                                                                              service duplication; enhanced
                                                                              internal State planning; avoids
                                                                              ``silos'' and service
                                                                              duplications; more efficient use
                                                                              of public resources.
(b)(ii) Unified or Combined State Plans--           186,016            0.30
 Biennial Development and Modification
 Process.
(b)(iii) Unified or Combined Plans--                840,450            1.34
 Coordinating Submission of State Plans.
(c)(i) Development and Updating of State         42,717,641           68.15  Clear articulation of expectations
 Performance Accountability Systems.                                          and outcomes for accountability
                                                                              purposes; improved policy and
                                                                              management decision-making from
                                                                              performance measure data; better
                                                                              management and policy decisions
                                                                              using outcome data; improved
                                                                              service and placements; more
                                                                              accountability.
                                                                             1.02%
(c)(ii) Effectiveness of Serving Employers.         638,350            1.02
(c)(iii) Negotiation of Levels of                   490,432            0.78
 Performance.
(c)(iv) Running Statistical Adjustment            4,578,901            7.31
 Model to Adjust Levels of Performance
 Based on Actual Economic Conditions and
 Characteristics of Participants.
(c)(v) Additional State Performance                  17,032            0.03
 Accountability Indicators (Beyond Required
 Performance Indicators).
(c)(vi) Technical Assistance to States.....         100,000            0.16
(c)(vii) Performance Reports, including           9,592,540           15.30
 collection of new data.
(c)(viii) Obtain UI Wage Data..............         648,000            1.03
(c)(ix) Data Analytic Software and Training         116,000            0.19
(d) State Evaluation Responsibilities......       2,301,935            3.67  Improved service delivery and
                                                                              customer service; enhanced policy-
                                                                              making and system building; more
                                                                              accountability.
                                            --------------------------------
    Total Costs............................      62,678,060          100.00  ...................................
----------------------------------------------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

    Exhibit 51 summarizes the first-year costs for each provision of 
this Final Rule. The Departments estimated the total first-year cost of 
this Final Rule to be $135.5 million. The largest contributor to the 
first-year cost is the provision related to developing and updating 
State performance accountability systems at $97.5 million. The next 
largest first-year cost results from performance reports, amounting to 
$21.7 million, followed by adjusting levels of performance based on 
actual economic conditions and characteristics at $4.6 million.

  Exhibit 51--Estimated First-Year Costs of the Final Rule by Provision
------------------------------------------------------------------------
                                                            Percent of
                Provision                  Total first-    total first-
                                             year cost       year cost
------------------------------------------------------------------------
(a) Time to Review the New Rule.........      $3,305,615            2.44
(b)(i) Unified or Combined State Plans--       1,202,022            0.89
 Expanded Content Requirements..........
(b)(ii) Unified or Combined State Plans--              0            0.00
 Biennial Development and Modification
 Process................................
(b)(iii) Unified or Combined Plans--           1,680,901            1.24
 Coordinating Submission of State Plans.
(c)(i) Development and Updating of State      97,467,521           71.91
 Performance Accountability Systems.....
(c)(ii) Effectiveness of Serving                 338,045            0.25
 Employers..............................
(c)(iii) Negotiation of Levels of                980,863            0.72
 Performance............................
(c)(iv) Running Statistical Adjustment         4,578,901            3.38
 to Adjust Levels of Performance Based
 on Actual Economic Conditions and
 Characteristics of Participants........
(c)(v) Additional State Performance              170,317            0.13
 Accountability Indicators (Beyond
 Required Performance Indicators).......
(c)(vi) Technical Assistance to States..               0            0.00
(c)(vii) Performance Reports, including       21,705,903           16.01
 collection of new data.................
(c)(viii) Obtain UI Wage Data...........         648,000            0.48
(c)(ix) Data Analytic Software and             1,160,000            0.86
 Training...............................
(d) State Evaluation Responsibilities...       2,301,935            1.70
                                         -------------------------------
    Total Cost..........................     135,540,023          100.00
------------------------------------------------------------------------
Note: Totals might not sum due to rounding.


[[Page 55976]]

    Exhibit 52 summarizes the estimated annual and total costs of this 
Final Rule. The estimated total (undiscounted) cost of the rule sums to 
$626.8 million over the 10-year analysis period, which is equal to an 
average annual cost of $62.7 million per year. In total, the estimated 
10-year discounted costs of the Final Rule range from $495.2 million to 
$558.9 million (with 7- and 3-percent discounting, respectively).
    To contextualize the cost of this Final Rule, the average annual 
budget for WIA implementation over FY 2012-2014 for the Departments of 
Labor and Education combined was $7.2 billion.\53\ Thus, the annual 
additional cost of implementing this Final Rule is 0.9 to 1 percent of 
the average annual WIA budget for FY 2012-2014 (with 3-percent and 7-
percent discounting, respectively). In response to public comments, the 
Departments also contextualize the cost of the Final Rule relative to 
the amount of administrative and transition funds available to States, 
which averaged $200.1 million between PY 2014 and PY 2015.\54\ The 
annual additional cost of implementing the Final Rule is between 32.7 
percent and 35.2 percent of the average annual administrative and 
transition funds budget (with 3-percent and 7-percent discounting, 
respectively).
---------------------------------------------------------------------------

    \53\ U.S. Department of Labor, Employment and Training 
Administration. (2015). Archive of State Statutory Formula Funding. 
Retrieved from: https://www.doleta.gov/budget/py01_py09_arra_archive.cfm. The Departments used data from the 
following files to estimate the average annual WIA budget: WIA Adult 
Activities Program (PYs 2011, 2012, 2013, and 2014); WIA Dislocated 
Worker Activities Program (PYs 2011, 2012, 2013, and 2014); and WIA 
Youth Activities (PYs 2012, 2013, and 2014). Note that for adult and 
dislocated worker activities, the Departments summed the program 
year's July funding with the previous program year's October funding 
to calculate the amount of funding per fiscal year. The youth 
activities funding is obligated to States in April and therefore 
corresponds to the fiscal year in which it is obligated. We inflated 
the funding for each fiscal year, so that the average annual WIA 
budget is in 2015 dollars.
    U.S. Department of Labor, Employment and Training 
Administration. (2015) State Statutory Formula Funding. Retrieved 
from: https://www.doleta.gov/budget/statfund.cfm. The Departments 
also used data from the following files to estimate the average 
annual WIA budget: Employment Services Program Dollar Tables (PYs 
2012, 2013, and 2014). Note that Wagner-Peyser Act funds for a 
program year are obligated to States in July; therefore, these funds 
correspond to the fiscal year in which they are obligated. We 
inflated the funding for each fiscal year, so that the average 
annual WIA budget is in 2015 dollars.
    U.S. Department of Education. (2016). Department of Education 
Budget Tables. Retrieved from: https://www2.ed.gov/about/overview/budget/tables.html?src=ct. The Departments used data from the 
following files to estimate the average annual WIA budget: 
Congressional Action (FYs 2012, 2013, and 2014). The budget was 
updated to 2015 dollars.
    \54\ Training and Employment Guidance Letter (TEGL) 34-14, TEGL 
12-14, TEGL 24-14. The Departments inflated the funding for each 
program year.

    Exhibit 52--Estimated Monetized Costs of Departments of Labor and
                          Education Final Rule
                             [2015 dollars]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
2016....................................................    $135,540,023
2017....................................................      77,389,018
2018....................................................      64,038,222
2019....................................................      52,945,116
2020....................................................      59,249,908
2021....................................................      45,312,669
2022....................................................      50,789,374
2023....................................................      45,312,669
2024....................................................      50,890,937
2025....................................................      45,312,669
Undiscounted 10-Year Total..............................     626,780,605
10-Year Total with 3% Discounting.......................     558,940,877
10-Year Total with 7% Discounting.......................     495,158,156
10-Year Average.........................................      62,678,060
Annualized with 3% Discounting..........................      65,524,922
Annualized with 7% Discounting..........................      70,499,382
------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

Regulatory Benefits
    The Departments were unable to quantify several important benefits 
to society due to data limitations and a lack of existing data or 
evaluation findings on particular items.\55\ These include increased 
employment opportunities for unemployed or underemployed U.S. workers, 
enhanced ETP process, and evaluation of State programs. Below, we 
describe qualitatively the benefits related to this Final Rule.
---------------------------------------------------------------------------

    \55\ The Departments were able to estimate many but not all of 
the inputs that would be necessary to quantify a benefit to DOL 
programs that could result from this Final Rule if affected entities 
choose to integrate DOL program participant records. This activity 
is highly encouraged but not required by this Final Rule; hence, one 
of the key inputs to the benefits calculation (the number of 
entities choosing to integrate) is highly uncertain. Given the 
inability to reliably estimate this input, no quantitative estimate 
of cost savings is presented; instead these ancillary benefits are 
discussed at the end of this benefits section.
---------------------------------------------------------------------------

    The Departments provide a qualitative description of the 
anticipated WIOA benefits below. The anticipated WIOA benefits are the 
results of expanded services to a larger number of people and/or 
improving services that are already being offered under WIA. These 
qualitative forecasts are predicated on program experience and are 
outcomes for which data will become available only after 
implementation. The studies discussed below are largely based on 
programs and their existing requirements under WIA and therefore they 
capture the benefits associated with WIA. However, they still can 
illustrate the types of benefits that are expected from this Final 
Rule.
    Increased alignment of training with local labor markets through 
economic, education, and workforce data. Under WIOA, more substantial 
economic, education, and workforce data are required to be integrated 
into the State Plan than was required under WIA for ED programs. Under 
WIA, economic, education, and workforce data were not included in State 
Plans for ED programs.\56\ Hence, it was possible that some program 
participants were being trained for jobs with no local demand at the 
time of the participants' exit from the training program, even though 
the demand for the job might have existed elsewhere. Under WIOA, 
economic, education, and workforce data will be shared by DOL and ED 
via the core programs in the State Plan. Relative to WIA, the use of 
economic, education, and workforce data are expected to result in 
training that is better aligned with local labor market demand (i.e., 
the likelihood that more participants are learning skills that are 
applicable to jobs for which there will be local demand is increased).
---------------------------------------------------------------------------

    \56\ DOL already included economic, education, and workforce 
data in the State Plans under WIA, so DOL programs will not 
experience as much in incremental costs associated with this 
particular requirement as will the AEFLA and VR programs.
---------------------------------------------------------------------------

    This is expected to result in three potential benefits: (1) 
Improved employment outcomes in the local area, (2) higher wages, and 
(3) reduced costs associated with returning training participants. 
First, because training participants will primarily be trained for jobs 
with local demand, these individuals will have an increased likelihood 
of obtaining employment following their training due to their 
applicable skill set and the increased availability of local labor 
market positions. This could minimize the duration of unemployment in 
some local areas. Second, these individuals could be paid a higher wage 
because they will possess job-specific training for jobs in demand in 
the local area. Finally, under WIA, if an individual was not employed 
after exiting a training program, he or she was able to participate in 
some additional training programs, which resulted in greater costs for 
those training providers and one-stop partners. Under WIOA, the 
Departments expect costs for returning participants could decrease due 
to some participants' increased likelihood of obtaining employment. 
Overall, having better aligned training programs will have a positive 
effect on the economy from benefits such as reduced retraining

[[Page 55977]]

costs, and improved worker morale. The lengthy and involved process of 
implementing changes to existing programs and developing new programs, 
however, might delay the benefits derived from improved economic, 
education, and workforce data.\57\
---------------------------------------------------------------------------

    \57\ Johnson, T., Gritz, M., Jackson, R., Burghardt, J., Boussy, 
C., Leonard, J., and Orians, C. (1999). National Job Corps Study: 
Report on the process analysis. Prepared by Mathematica Policy 
Research, Inc. for U.S. Department of Labor, Employment and Training 
Administration. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/99-jc_analysis.pdf.
---------------------------------------------------------------------------

    State evaluation research. In support of a State's strategic plan 
and goals, State-conducted evaluations and other forms of research will 
enable each State to test various interventions geared toward State 
conditions and opportunities. Results from such evaluation and 
research, if used by States, could improve service quality and 
effectiveness, potentially leading to higher employment rates and 
earnings among participants. Implementing various innovations that have 
been tested and found effective also could lead to lower unit costs and 
increased numbers of individuals served within a State. Sharing the 
findings nationally could lead to new service or management practices 
that other States could adopt to improve participant labor market 
outcomes, lower unit costs, or increase the number served.
    Training's impact on job placement. A recent study found that 
flexible and innovative training that is closely related to a real and 
in-demand occupation is associated with better labor market outcomes 
for training participants. Youth disconnected from work and school can 
benefit from comprehensive and integrated models of training that 
combine education, occupational skills, and support services.\58\ The 
study noted, however, that evidence for effective employment and 
training-related programs for youth is less extensive than for adults, 
and that there are fewer positive findings from evaluations.\59\ The 
WIA youth program remains largely untested.\60\ One study found that 
WIA training services increase placement rates by 4.4 percent among 
adults and by 5.9 percent among dislocated workers,\61\ while another 
study concluded that placement rates are 3 to 5 percent higher among 
all training recipients.\62\
---------------------------------------------------------------------------

    \58\ U.S. Department of Labor, U.S. Department of Commerce, U.S. 
Department of Education, and U.S. Department of Health and Human 
Services. (2014). What works in job training: A synthesis of the 
evidence. Retrieved from: https://www.dol.gov/asp/evaluation/jdt/jdt.pdf.
    \59\ Ibid.
    \60\ Decker, P.T., & Berk. J.A. (2011). Ten years of the 
Workforce Investment Act (WIA): Interpreting the research on WIA and 
related programs. Journal of Policy Analysis and Management, 30(4), 
906-926.
    \61\ Hollenbeck, K., Schroeder, D., King, C.T., and Huang, W.J. 
(2005). Net impact estimates for services provided through the 
Workforce Investment Act (Occasional Paper 2005-06). Washington, DC: 
U.S. Department of Labor, Employment and Training Administration, 
Office of Policy and Research, Division of Research and 
Demonstration. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
    \62\ Heinrich, C.J., Mueser, P.R., and Troske, K.R. (2009). 
Workforce Investment Act non-experimental net impact evaluation. 
Columbia, MD: IMPAQ International, LLC. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Workforce%20Investment%20Act%20Non-Experimental%20Net%20Impact%20Evaluation%20-%20Final%20Report.pdf.
---------------------------------------------------------------------------

    Participants in occupational training had a reemployment rate 5 
percentage points higher than those who received no training, and 
reemployment rates were highest among recipients of on-the-job 
training, a difference of 10 to 11 percentage points.\63\ The study 
found that training, however, did not correspond to higher employment 
retention or earnings.\64\ A Youth Opportunity Grant Initiative study 
found that Youth Opportunity was successful at improving outcomes for 
high-poverty youth. Youth Opportunity also increased the labor-force 
participation rate overall and for subgroups, including 16- to 19-year-
old adolescents, women, African Americans, and in-school youth.\65\ 
DOL-sponsored research found that participants who received core 
services (often funded by Employment Services) and other services in 
American Job Centers were more likely to enter and retain 
employment.\66\
---------------------------------------------------------------------------

    \63\ Park, J. (2011). Does occupational training by the Trade 
Adjustment Assistance Program really help reemployment?: Success 
measured as matching. Washington, DC: U.S. Department of Labor, 
Employment and Training Administration. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2011-09.pdf.
    \64\ Ibid.
    \65\ Jackson, R.H., Malen[eacute] Dixon, R., McCoy, A., 
Pistorino, C., Zador, P., Lopdell, J., . . . and Bruno., L. (2007). 
Youth Opportunity Grant Initiative: Impact and synthesis report. 
Prepared by Decision Information Resources, Inc. for U.S. Department 
of Labor, Employment and Training Administration. Retrieved from: 
https://wdr.doleta.gov/research/FullText_Documents/YO%20Impact%20and%20Synthesis%20Report.pdf.
    \66\ U.S. Department of Labor, Employment and Training 
Administration, Office of Policy Development and Research. (2013). 
Five-Year research and evaluation strategic plan program years 2012-
2017. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2013_21.pdf.
---------------------------------------------------------------------------

    Training's impact on wages. Before enactment of WIA, Job Training 
Partnership Act services had a modest but statistically significant 
impact on the earnings of adult participants.\67\ WIA training 
increased participants' quarterly earnings by $660; these impacts 
persisted beyond 2 years and were largest among women.\68\ WIA adult 
program participants who received core services (e.g., skill 
assessment, labor market information) or intensive services (e.g., 
specialized assessments, counseling) earned up to $200 more per quarter 
than non-WIA participants. Participants who received training services 
in addition to core and intensive services initially earned less but 
caught up within 10 quarters with the earnings of participants who 
received only core or intensive services; marginal benefits of training 
could exceed $400 per quarter. Earnings progressions were similar for 
WIA adult program participants and users of the labor exchange 
only.\69\ WIA training services also improved participants' long-term 
wage rates, doubling earnings after 10 quarters over those not 
receiving training services.\70\ WIA participants who did not receive 
training, however, earned $550 to $700 more in the first quarter after 
placement. The study also noted that individuals who did not receive 
training received effective short-term counseling that enabled them to 
gain an immediate advantage in the labor market.\71\
---------------------------------------------------------------------------

    \67\ Barnow, B., and Gubits, D. (2003) Review of recent pilot, 
demonstration, research, and evaluation initiatives to assist in the 
implementation of programs under the Workforce Investment Act 
(Occasional Paper 2003-10). U.S. Department of Labor, Employment and 
Training Administration. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/ETAOP%202003-10%20Review%20of%20Recent%20Pilot%2C%20Demonostration%2C%20Research%2C%20and%20Evaluation%20Initiatives.pdf.
    \68\ Ibid.
    \69\ Chrisinger, C.K. (2011). Earnings progression among 
workforce development participants: Evidence from Washington State. 
U.S. Department of Labor, Employment and Training Administration. 
Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2011-11.pdf.
    \70\ Heinrich, C.J., Mueser, P.R., and Troske, K.R. (2009). 
Workforce Investment Act non-experimental net impact evaluation. 
Columbia, MD: IMPAQ International, LLC. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Workforce%20Investment%20Act%20Non-Experimental%20Net%20Impact%20Evaluation%20-%20Final%20Report.pdf.
    \71\ Ibid.
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    Another DOL program, the Job Corps program for disadvantaged youth 
and young adults, produced sustained increases in earnings for 
participants in their early twenties. Students who completed Job Corps 
vocational training experienced average earnings increases by the 
fourth follow-up year over the comparison group, whereas those who

[[Page 55978]]

did not complete training experienced no increase.\72\ Another 
publication noted that on average, adults experienced a $743 quarterly 
post-exit earnings boost.\73\
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    \72\ Gritz, M., and Johnson, T. (2001). National Job Corps 
Study: Assessing program effects on earnings for students achieving 
key program milestones. Prepared by Battelle Memorial Institute for 
U.S. Department of Labor, Employment and Training Administration, 
Office of Policy and Research. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/MilestoneImpactReport-Final.pdf.
    \73\ Hollenbeck, K., Schroeder, D., King, C.T., and Huang, W.J. 
(2005). Net impact estimates for services provided through the 
Workforce Investment Act (Occasional Paper 2005-06). Washington, DC: 
U.S. Department of Labor. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
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    Those who completed training experienced a 15 percent increase in 
employment rates and an increase in hourly wages of $1.21 relative to 
participants without training.\74\ Participation in WIA training also 
had a distinct positive but smaller impact on employment and earnings, 
with employment 4.4 percentage points higher and quarterly earnings 
$660 higher than comparison group members.
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    \74\ Needels, K., Bellotti, J., Dadgar, M., and Nicholson, W. 
(2006). Evaluation of the Military Base National Emergency Grants: 
Final report (Occasional Paper 2007-02). Prepared by Mathematica 
Policy Research for U.S. Department of Labor, Employment and 
Training Administration, Office of Policy Development and Research. 
Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Evaluation%20of%20the%20Military%20Base%20National%20Emergency%20Grants%20Final%20Report.pdf.
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    National and international studies such as the recent Survey of 
Adult Skills \75\ provide strong evidence of the need for and economic 
value of adult basic skills (ABS). A growing body of research indicates 
strong economic return on basic skills at given levels of education. 
Estimates have been made of the potential economic benefits that would 
accrue from increased educational attainment and levels of basic 
skills. The Longitudinal Study of Adult Learning \76\ (LSAL) randomly 
sampled approximately 1,000 high school dropouts and followed them for 
nearly a decade from 1998 to 2007. LSAL followed both participants and 
nonparticipants in ABS programs, assessing their literacy skills and 
skill uses over long periods, along with changes in their social, 
educational, and economic status, offering a rich picture of adult 
literacy development. The study found that individuals who participate 
in ABS programs have higher future earnings, and income premiums are 
larger with more intensive participation.\77\ Individuals who 
participate in ABS programs tend to have higher levels of future 
literacy proficiency. Their proficiency premiums are larger with more 
intensive participation.\78\ The study also found a robust impact of 
ABS program participation on secondary school credential attainment 
\79\ and engagement in postsecondary education.\80\
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    \75\ OECD. About the Survey of Adult Skills (PIAAC). Retrieved 
from: https://www.oecd.org/site/piaac/surveyofadultskills.htm.
    \76\ Portland State University. (2010). Introduction to LSAL. 
Retrieved from: https://www.lsal.pdx.edu/.
    \77\ U.S. Department of Education, Office of Career, Technical, 
and Adult Education. The Impact of ABS Program Participation on 
Long-Term Economic Outcomes. Washington, DC, 2014. Retrieved from: 
https://lincs.ed.gov/employer/1_ABS_Economic_Outcomes.pdf.
    \78\ U.S. Department of Education, Office of Career, Technical, 
and Adult Education. The Impact of ABS Program Participation on 
Long-Term Literacy Growth. Washington, DC, 2014. Retrieved from: 
https://lincs.ed.gov/employer/2_ABS_Literacy_Growth.pdf.
    \79\ U.S. Department of Education, Office of Career, Technical, 
and Adult Education. The Impact of ABS Program Participation on 
Long-Term GED Attainment. Washington, DC, 2014. Retrieved from: 
https://lincs.ed.gov/employer/3_ABS_GED_Attainment.pdf.
    \80\ U.S. Department of Education, Office of Career, Technical, 
and Adult Education. The Impact of ABS Program Participation on 
Long-Term Postsecondary Engagement. Washington, DC, 2014. Retrieved 
from: https://lincs.ed.gov/employer/4_ABS_Postsecondary_Engagement.pdf.
---------------------------------------------------------------------------

    Vocational and adult literacy's education impact. Vocational 
managers indicate that closely aligning service offerings with labor 
market reports improves the likelihood that participants will learn 
applicable skills. The lengthy and involved process of implementing 
changes to existing programs and developing new programs, however, 
might delay the benefits derived from improved labor market data.\81\
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    \81\ Johnson, T., Gritz, M., Jackson, R., Burghardt, J., Boussy, 
C., Leonard, J. and Orians, C. (1999). National Job Corps study: 
Report on the process analysis. Prepared by Mathematica Policy 
Research, Inc. for U.S. Department of Labor, Employment and Training 
Administration. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/99-jc_analysis.pdf.
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    The following are channels through which the benefits discussed 
above might be achieved:
    Better information for workers. The performance accountability 
measures will provide workers with higher-quality information about 
potential training program providers and enable them to make better-
informed choices about which programs to pursue. The information 
analyzed and published by the WDBs about local labor markets also will 
help trainees and providers target their efforts and develop reasonable 
expectations about outcomes.
    Consumers of educational services, including those with barriers to 
employment, such as disadvantaged and displaced workers, require 
reliable information on the value of different training options to make 
informed choices. Displaced workers tend to be farther removed from 
schooling and lack information about available courses and the fields 
with the highest economic return.\82\ Given these information gaps and 
financial pressures, it is important that displaced workers learn of 
the economic returns to various training plans.\83\ Still, one study 
concluded that the cost-effectiveness of WIA job training for 
disadvantaged workers is ``modestly positive'' due to the limited 
sample of States on which the research was based.\84\
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    \82\ Greenstone, M., and Looney, A. (2011). Building America's 
job skills with effective workforce programs: A training strategy to 
raise wages and increase work opportunities. Washington, DC: The 
Hamilton Project. Retrieved from: https://www.brookings.edu/~/media/
research/files/papers/2011/11/training-greenstone-looney/
11_training_greenstone_looney.pdf.
    \83\ Jacobson, L.S., Lalonde, R.J., and Sullivan, D. (2011). 
Policies to reduce high tenured displaced workers' earnings losses 
through retraining (Discussion Paper 2011-11). Washington, DC: The 
Hamilton Project. Retrieved from: https://www.brookings.edu/~/media/
research/files/papers/2011/11/displaced-jacobson-lalaonde-sullivan/
11_displaced_jls_paper.pdf.
    \84\ Heinrich, C.J., Mueser, P.R., Troske, K.R., Jeon, K.S., and 
Kahvecioglu, D.C. (2009). New estimates of public employment and 
training program net impacts: A nonexperimental evaluation of the 
Workforce Investment Act program (Discussion Paper 4569). Bonn, 
Germany: Institute for the Study of Labor (IZA). Retrieved from: 
https://ftp.iza.org/dp4569.pdf.
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    State performance accountability measures. This requirement will 
include significant data collection for Local WDBs to address 
performance measures for the core programs in their jurisdictions. This 
data collection will permit the State WDBs to assess performance across 
each State. Training providers will be required to provide data to 
Local WDBs, which will represent a cost in the form of increased data 
collection and processing. Employers and employees also will have to 
provide information to the training providers, which will take time. 
This provision--in combination with the Board membership provision 
requiring employer/business representation that is part of the DOL WIOA 
Final Rule--is expected to improve the quality of local training and, 
ultimately, the number and caliber of job placements.
    Implementation of follow-up measures, rather than termination-based 
measures, might improve long-term labor market outcomes, although some

[[Page 55979]]

could divert resources from training activities.\85\
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    \85\ Courty, P., and Marschke, G. (2007). Making government 
accountable: Lessons from a federal job training program. Public 
Administration Review, 67(5), 904-916.
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    Before-after earning metrics capture the contribution of training 
to earnings potential and minimize incentives to select only training 
participants with high initial earnings.\86\ With the exception of 
programs in a few States, current incentives do not reward enrollment 
of the least advantaged.\87\ In addition, the study noted evidence that 
the performance-standards can be ``gamed'' in an attempt to maximize 
centers' measured performance.\88\
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    \86\ Heckman, J.J., Heinrich, C., and Smith, J.A. (1997). 
Assessing the performance of performance standards in public 
bureaucracies. American Economic Review, 87(2), 389-395.
    \87\ Ibid.
    \88\ Ibid.
---------------------------------------------------------------------------

    Pressure to meet performance levels could lead providers to focus 
on offering services to participants most likely to succeed. For 
example, current performance accountability measures might create 
incentives for training providers to screen participants for 
motivation, delay participation for those needing significant 
improvement, or discourage participation by those with high existing 
wages.\89\
---------------------------------------------------------------------------

    \89\ Dunham, K., Mack, M., Salzman, J., and Wiegand, A. (2005). 
Evaluation of the WIA performance measurement system: Survey report. 
Prepared by Social Policy Research Associates for U.S. Department of 
Labor, Employment and Training Administration. Retrieved from: 
https://wdr.doleta.gov/research/FullText_Documents/Evaluation%20of%20the%20WIA%20Performance%20Measurement%20System%20-%20Survey%20Report.pdf.
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    The following subsections present additional channels by which 
economic benefits may be associated with various aspects of this Final 
Rule:
    Dislocated workers. A study found that, for dislocated workers, 
receiving WIA services significantly increased employment rates by 13.5 
percent and boosted post-exit quarterly earnings by $951.\90\ Another 
study, however, found that training in the WIA dislocated worker 
program had a net benefit close to zero or even below zero.\91\
---------------------------------------------------------------------------

    \90\ Hollenbeck K., Schroeder, D., King, C.T., and Huang, W.-J. 
(2005). Net impact estimates for services provided through the 
Workforce Investment Act (Occasional Paper 2005-06). Washington, DC: 
U.S. Department of Labor, Employment and Training Administration, 
Office of Policy and Research, Division of Research and 
Demonstration. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
    \91\ Heinrich, C.J., Mueser, P.R., and Troske, K.R. (2009). 
Workforce Investment Act non-experimental net impact evaluation. 
Columbia, MD: IMPAQ International, LLC. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Workforce%20Investment%20Act%20Non-Experimental%20Net%20Impact%20Evaluation%20-%20Final%20Report.pdf.
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    Self-employed individuals. Job seekers who received self-employment 
services started businesses sooner and had longer lasting businesses 
than nonparticipants. Self-employment assistance participants were 19 
times more likely to be self-employed than nonparticipants and 
expressed high levels of satisfaction with self-employment. A study of 
Maine, New Jersey, and New York programs found that participants were 
four times more likely to obtain employment of any kind than 
nonparticipants.\92\
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    \92\ Kosanovich, W., Fleck, H., Yost, B., Armon, W., and 
Siliezar, S. (2001). Comprehensive assessment of self-employment 
assistance programs. Prepared by DTI Associates for U.S. Department 
of Labor, Office of Workforce Security. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Comprehensive%20Assessment%20of%20Self-Employment%20Assistance%20Programs.pdf.
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    Workers with disabilities. A study of individuals with disabilities 
enrolled in training for a broad array of occupations found that the 
mean hourly wage and hours worked per quarter for program graduates 
were higher than for individuals who did not complete the program.
    In conclusion, after a review of the quantitative and qualitative 
analysis of the impacts of this Final Rule, the Departments have 
concluded that the societal benefits justify the anticipated costs.
Ancillary Benefits
    The following section describes the ancillary benefit to the DOL 
program that may result from this Final Rule due to integrated DOL 
program participant records--an activity that is highly encouraged in 
the Final Rule, but is not required.
    Integrated DOL Program Participant Records. Section 504 of WIOA 
requires State and Local WDBs to establish procedures and criteria that 
will simplify reporting requirements and reduce reporting burdens. 
Under WIOA, States will be highly encouraged to submit one record for 
an individual participating in one or more DOL title I and Wagner-
Peyser Act Employment Service core programs. The individual records 
would be standardized in terms of data elements and associated 
reporting specifications. Under WIA, for the DOL core programs, States 
were required to provide two separate individual records for an 
individual receiving services under the DOL title I programs and the 
Wagner-Peyser Act Employment Service program. A single integrated 
individual record for DOL core programs would eliminate duplicative 
reporting of an individual's demographic information across programs.
    According to a recent report which sampled 28 local areas, career 
counselors reported that their high caseloads (approximately 50 to 100 
cases per counselor) limited the amount of time they could spend 
providing individualized career services (individualized career 
services under WIOA) per client.\93\ Efficiencies in the intake process 
will allow case managers to spend more time per client delivering 
intensive services. The study also found that intensive services led to 
increased employment and earnings, and individuals that received 
intensive services were more likely to have stable jobs with more 
benefits.\94\ In addition to the technical benefits of integrated 
systems, this process will reduce administrative burdens in service 
delivery that existed under WIA. WIOA removes a sequence of service 
requirement that in some cases may have prolonged or created barriers 
to effective service delivery. Under WIOA, career planners can deliver 
the needed services without going through these administrative 
processes. By doing so, individuals will get the services they need 
sooner which can lead to quicker entry into employment or training. 
Furthermore, having integrated records will help the programs find the 
best mix of services for individuals, which can result in UI payment 
reductions, improved job placement rates, higher paying jobs, and 
reduced government assistance. Although there will be some upfront 
costs to develop the system (as discussed in provision (c) ``State 
Performance Accountability System''), the Departments expect long-term 
benefits.
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    \93\ D'Amico, R. et al. (2015). Providing public workforce 
services to job seekers: Implementation findings on the WIA Adult 
and Dislocated Worker Programs. Washington, DC: Mathematic Policy 
Research.
    \94\ McConnell, S. et al. (2016). Providing public workforce 
services to job seekers: 15-Month impact findings on the WIA Adult 
and Dislocated Worker Programs. Washington, DC: Mathematica Policy 
Research.
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Transfers
    In addition, there are two important transfers that the Departments 
were unable to quantify. Below, we describe qualitatively the transfers 
that are expected to result from improved system alignment and the 
Reemployment and Eligibility Assessment Program.
    Improved system alignment. Under WIOA, State WDBs must help 
Governors develop strategies for

[[Page 55980]]

aligning technology and data systems across one-stop partner programs 
to enhance service delivery and improve efficiencies in reporting on 
performance accountability measures. Improved system alignment will 
allow States to better understand and address State-level problems. 
Integrated data systems will allow for unified and streamlined intake, 
case management, and service delivery; minimize the duplication of 
data; ensure consistently defined and applied data elements; facilitate 
compliance with performance reporting and evaluation requirements; and 
provide meaningful information about core program participation to 
inform operations. For example, participants in a title I job training 
program, who need to improve their basic literacy skills, will be able 
to access the title II adult education services they need in one 
location which will help to facilitate concurrent service delivery by 
the one-stop core partner programs and ultimately accelerate overall 
timeliness for outcome attainment. With this improved information, 
States will have the ability to negotiate levels of performance more 
accurately, which will subsequently reduce the likelihood that States 
will receive sanctions for failing to meet the State-adjusted levels of 
performance for a program for a second consecutive program year or for 
failing to submit a report for any program year.
    The Reemployment and Eligibility Assessment program. The 
Reemployment and Eligibility Assessment program, which has now evolved 
to become the Reemployment Service and Eligibility Assessment program, 
was effective in assisting claimants to exit the UI program and avoid 
exhausting regular UI benefits in Florida, Idaho, and Nevada. By 
avoiding UI benefit exhaustion, the program led to reductions in the 
likelihood of receiving unemployment compensation benefits. There 
exists notable evidence that the Reemployment and Eligibility 
Assessment program is cost-effective, particularly when provided 
through an integrated service delivery model, which WIOA also 
promotes.\95\ The program reduced UI payments and increased tax revenue 
resulting from increased worker earnings.
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    \95\ Poe-Yamagata, E., Benus, J., Bill, N., Carrington, H., 
Michaelides, M., and Shen, T. (2011). Impact of the Reemployment and 
Eligibility Assessment (REA) Initiative. Columbia, MD: IMPAQ 
International, LLC. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_08_Impact_of_the_REA_Initiative.pdf.
---------------------------------------------------------------------------

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 603, requires 
agencies to prepare a regulatory flexibility analysis to determine 
whether a regulation will have a significant economic impact on a 
substantial number of small entities. Section 605 of the RFA allows an 
agency to certify a rule in lieu of preparing an analysis if the 
regulation is not expected to have a significant economic impact on a 
substantial number of small entities. Further, under the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801 (SBREFA), an 
agency is required to produce compliance guidance for small entities if 
the rule has a significant economic impact.
    The Small Business Administration (SBA) defines a small business as 
one that is ``independently owned and operated and which is not 
dominant in its field of operation.'' The definition of small business 
varies from industry to industry to the extent necessary to reflect 
industry size differences properly. An agency must either use the SBA 
definition for a small entity or establish an alternative definition, 
in this instance, for the workforce industry. The Departments have 
adopted the SBA definition for purposes of this certification.
    The Departments have notified the Chief Counsel for Advocacy, SBA, 
under the RFA at 5 U.S.C. 605(b), and certify that this rule will not 
have a significant economic impact on a substantial number of small 
entities. This finding is supported, in very large measure, by the fact 
that small entities are already receiving financial assistance under 
the WIA program and will likely continue to do so under the WIOA 
program as articulated in this Final Rule.
Affected Small Entities
    The Final Rule can be expected to impact small one-stop center 
operators. One-stop operators can be a single entity (public, private, 
or nonprofit) or a consortium of entities. The types of entities that 
might be a one-stop operator include: (1) An institution of higher 
education; (2) an employment service State agency established under the 
Wagner-Peyser Act; (3) a community-based organization, nonprofit 
organization, or workforce intermediary; (4) a private for-profit 
entity; (5) a government agency; (6) a Local WDB, with the approval of 
the chief elected official and the Governor; or (7) another interested 
organization or entity that can carry out the duties of the one-stop 
operator. Examples include a local chamber of commerce or other 
business organization, or a labor organization.
    This Final Rule can also be expected to impact a variety of AEFLA 
local providers: (1) Local education agencies; (2) community-based 
organizations; (3) faith-based organizations; (4) libraries; community, 
junior, and technical colleges; (5) 4-year colleges and universities; 
(6) correctional institutions; and (7) other institutions, such as 
medical and special institutions not designed for criminal 
offenders.\96\
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    \96\ In terms of VR grantees, they are State government entities 
and, by definition, are not small entities.
---------------------------------------------------------------------------

Impact on Small Entities
    The Departments indicate that transfer payments are a significant 
aspect of this analysis in that the majority of WIOA program cost 
burdens on State and Local WDBs will be fully financed through Federal 
transfer payments to States. We have highlighted costs that are new to 
WIOA implementation and this Final Rule. Therefore, we expect that this 
WIOA Final Rule will have no cost impact on small entities.

C. Small Business Regulatory Enforcement Fairness Act of 1996

    The Departments have concluded that this Joint WIOA Final Rule does 
not impose a significant economic impact on a substantial number of 
small entities under the RFA; therefore, the Departments are not 
required to produce any Compliance Guides for Small Entities, as 
mandated by the SBREFA.

D. Paperwork Reduction Act

    The purposes of the PRA, 44 U.S.C. 3501 et seq., include minimizing 
the paperwork burden on affected entities. The PRA requires certain 
actions before an agency can adopt or revise a collection of 
information, including publishing for public comment a summary of the 
collection of information and a brief description of the need for and 
proposed use of the information.
    As part of continuing efforts to reduce paperwork and respondent 
burden, the Departments conduct preclearance consultation activities to 
provide the public and Federal agencies with an opportunity to comment 
on proposed and continuing collections of information in accordance 
with the PRA. See 44 U.S.C. 3506(c)(2)(A). This activity helps to 
ensure that the public understands the collection instructions, 
respondents can provide the requested data in the desired format, 
reporting

[[Page 55981]]

burden (time and financial resources) is minimized, collection 
instruments are clearly understood, and the Departments can properly 
assess the impact of collection requirements on respondents.
    A Federal agency may not conduct or sponsor a collection of 
information unless it is approved by the OMB under the PRA and displays 
a currently valid OMB Control Number. The public is also not required 
to respond to a collection of information unless it displays a 
currently valid OMB Control Number. In addition, notwithstanding any 
other provisions of law, no person will be subject to penalty for 
failing to comply with a collection of information if the collection of 
information does not display a currently valid OMB Control Number (44 
U.S.C. 3512).
    In accordance with the PRA, the Departments submitted two ICRs--(1) 
Workforce Innovation and Opportunity Act Common Performance Reporting 
and (2) Unified or Combined State Plan and Plan Modifications under the 
Workforce Innovation and Opportunity Act, Wagner-Peyser Act WIOA Title 
I Programs, and Vocational Rehabilitation Adult Education--to OMB when 
the NPRM was published. The NPRM provided an opportunity for the public 
to send comments on the two information collections directly to the 
Departments; commenters also were advised that comments under the PRA 
could be submitted directly to OMB. OMB issued a notice of action for 
each request asking the Departments to resubmit the ICRs, after 
considering public comments, at the Final Rule stage. Given that 
information collection instruments were not ready at the time the NPRM 
published, the Departments provided additional opportunities for the 
public to comment on the information collections through notices in the 
Federal Register that provided additional comment periods on the 
associated forms and instructions. These comment periods provided at 
least 60 days for comments to be submitted to the agencies. Each of 
these ICRs was then submitted for OMB approval, and additional notices 
were published in the Federal Register that invited comments to be sent 
to OMB for a period lasting at least 30 days. The Departments also 
submitted each ICR for further approval to incorporate the provisions 
of this Joint WIOA Final Rule; these Final Rule ICRs were not subject 
to further public comment. The Departments provide a status of each ICR 
in the summary section that immediately follows in this portion of the 
preamble. Where a review remained pending, when this preamble was 
drafted, the Department will publish an additional notice to announce 
OMB's final action on the ICR. The Departments also discuss the public 
comments received related to the ICRs in this section of the preamble. 
It should be noted that these ICRs have been submitted under a 
procedure that allows a collection to be sponsored by one agency and 
later subscribed to by other agencies. Such ICRs are classified as 
``common forms.'' In making the initial request, the host agency 
submits the request and claims its portion of the burden; ultimately, 
the full burden is accounted for as other agencies subscribe and claim 
their share of the burden. For purposes of this Joint WIOA Final Rule 
preamble, only the DOL share of the burden is discussed. The full 
burden is addressed in the supporting statement used to justify the 
request.
    It should be noted that the ICR review status reported in this 
section only relates to requests related directly to the Final Rule. 
Certain ICR packages that were previously approved are being updated to 
change references to those in the Joint WIOA Final Rule. As has been 
the practice throughout WIOA implementation, the agencies will continue 
to update stakeholders on the status of the joint ICRs related to State 
planning and performance accountability through other means.
    The Required Elements for the Submission of the Unified or Combined 
State Plan and Plan Modifications Under the Workforce Innovation and 
Opportunity Act Information Collection, OMB 1205-0522 substantive 
requirements were approved via a notice of action dated February 19, 
2016. As of the date of the drafting of this preamble, the information 
collection is being updated to reflect references in the Joint WIOA 
Final Rule. Also, the Workforce Innovation and Opportunity Act Common 
Performance Reporting ICR review is pending as of the date this 
preamble was drafted. The substantive requirements will be approved 
through a notice of action by OMB, and will take effect as of that 
date. The Departments will announce this approval.
    The information collections in this Final Rule are summarized as 
follows.
Workforce Innovation and Opportunity Act Common Performance Reporting
    Agency: DOL-ETA.
    Title: Workforce Innovation and Opportunity Act Common Performance 
Reporting.
    Type of Review: New collection.
    OMB Control Number: 1205-0526.
    Affected Public: State, Local, and Tribal Governments; Private 
Sector; and Individuals or Households.
    Obligation to Respond: Required to obtain or retain benefits (WIOA 
sec. 116).
    Total Estimated Number of Respondents Annually: 16,246,121.
    Total Estimated Number of Annual Responses: 32,456,962.
    Frequency of Response: On occasion.
    Total Estimated Annual Time Burden: 8,372,737 hours.
    Total Estimated Annual Other Costs Burden: $26,147,067.
    Regulations Sections: 20 CFR part 680 (adult and dislocated worker 
programs, and ETPs); 20 CFR part 681 (youth program); 20 CFR part 652 
(Wagner-Peyser Act Employment Service program); 34 CFR parts 462 and 
463 (AEFLA program); and 34 CFR part 361 (VR program).
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: This information collection will collect common 
performance data required under sec. 116 of WIOA from all six core 
programs--the adult, dislocated worker, youth, Wagner-Peyser Act 
Employment Service, AEFLA, and VR programs--as well as from ETPs. The 
Departments will use a common approach to standardize the quarterly and 
annual reporting, as appropriate, of common data elements for all core 
programs and ETPs. These data are in addition to other performance data 
reported by each of the core programs under current information 
collections in accordance with final joint and program-specific 
regulations discussed elsewhere in this issue of the Federal Register. 
The Departments note that the OMB control number for this new 
information collection was shown in the NPRM as 1205-0420. After 
further review and consultation with OMB, due to the need to continue 
reporting other data associated with WIA, 1205-0420 will remain as a 
WIA-only collection and the new WIOA performance collection will 
receive the control number 1205-0526.
    Response to Comments Received: The Departments received general and 
specific comments concerning this performance information collection. 
The comments focused specifically upon three areas: Measurable skill 
gains; ETP; and the ICR instruments.
General Comments
    General comments focused on data collection and overall burden.

[[Page 55982]]

    Comments: One commenter stated that the Departments should be aware 
that the proposed definitions and rules could create unintended 
incentives that do not align with program objectives. Another commenter 
stated that there is too much data included in the WIOA Joint 
Performance ICR. Several commenters requested clarification about data 
collection, reducing the burden, and other requirements.
    Departments' Response: The Departments have established a reporting 
system that reflects all the requirements of WIOA and, to the extent 
possible, safeguards against false or inaccurate reporting. The 
statistical adjustment model will contribute greatly to such efforts. 
The WIOA Performance Management, Information, and Reporting System 
includes only those elements that are required by statute or are a 
necessary component of the calculation of performance indicators or 
report items. While the Departments recognize that the data 
requirements are potentially burdensome, the Departments have made 
every effort to minimize the burden as much as possible. Additionally, 
the Departments recognize concerns regarding clarification about data 
collection for several of the primary indicators of performance and the 
burden of collection and management of data on common performance 
accountability requirements, as well as ensuring consistency in 
reporting across programs. The Departments recognize that State 
agencies will be faced with the challenges and burden of implementing 
the new requirements and responsibilities imposed by WIOA, including 
revising their management information systems. The Departments are 
working together to provide both joint and program-specific guidance 
and technical assistance to assist States in implementing these 
changes. The ETA will also issue an agency-specific reporting handbook 
for the PIRL along with guidance.
    Comments: A few commenters discussed the use of supplemental data 
(i.e., a proxy for wage records that do not exist) in the context of 
the median earnings performance indicator. Specifically, two commenters 
expressed opposition to the use of supplemental data for the median 
wage indicator, commenting that under WIA reporting, any wage-related 
measure relied exclusively on wage records. Another commenter remarked 
that the collection of supplemental data on wages is burdensome. Other 
commenters recommended that calculation of median earnings should not 
permit the utilization of supplemental data, but should rely solely on 
quarterly wage records.
    Departments' Response: The Departments considered the concerns 
expressed by commenters regarding the possible burden and reliability 
of supplemental data and follow-up methods to report on the median wage 
indicator. However, the Departments have concluded that in order to 
hold States accountable for employment and earnings outcomes of all 
program participants, States will be allowed to collect and verify 
supplemental wage information to demonstrate employment outcomes in the 
2nd and 4th quarters after exit in those instances where wage records 
are not available. Using supplemental data ensures that programs may 
track participants even if those participants' employment and wage 
information is not contained in the State's quarterly wage record 
system. If a State uses supplemental information to report on the 
employment rate indicators, the State must also use supplemental 
information to report on the median earnings indicator. States that 
elect not to use supplemental data and follow-up methods are expected 
to include participants who do not have the necessary data points to 
complete a wage record match in the denominator of the calculation. 
Those individuals would be counted as failures on the three employment 
indicators. In some programs, follow-up procedures have already been 
established and have been used historically to supplement wage record 
matching. The Departments conclude that allowing States to use 
supplemental follow-up methods for individuals who are self-employed, 
do not provide a valid SSN, or other specified reasons will provide a 
more comprehensive picture of program performance. The Departments will 
issue joint guidance to define further what constitutes acceptable 
forms of supplemental data and follow-up methods.
    Comments: Many commenters discussed the credential attainment rate 
indicator, several of whom commented on the calculation methodology. In 
particular, three commenters said the proposed methodology for 
calculating the credential attainment rate would overlook the progress 
and accomplishments of students who enter adult education programs with 
high school credentials. A commenter remarked that if the denominator 
for the credential attainment indicator includes all participants, it 
would serve as a disincentive to co-enrollment; however, if it only 
includes participants in training, it would create a disincentive for 
widespread access to training. Two commenters stated that the proposed 
calculation of the credential rate denominator would create a negative 
incentive and serve to steer low-skilled individuals away from training 
services. Another commenter suggested that only participants who 
received training services should be counted in this indicator. Still 
another commenter urged the Departments to design this indicator to 
prevent counting a participant more than once. Two commenters 
recommended that secondary and postsecondary results be separated for 
the calculation of the credential attainment rate indicator. Some 
commenters requested clarification on various aspects of the credential 
attainment rate indicator. Three commenters asked the Departments to 
clarify what would constitute a certificate. A commenter requested that 
the Departments provide clear definitions for the terms ``recognized 
postsecondary credentials'' and ``industry recognized credentials.'' 
Similarly, two other commenters suggested that the Departments provide 
guidance on this issue. Another commenter recommended that 
clarification be provided regarding how far in the past a date of 
enrollment in education or training may be to count for purposes of 
this indicator. Two commenters requested clarification regarding 
whether Adult Basic Education (ABE) participation in classes at the 
ninth grade equivalent or higher would count as enrollment in secondary 
education. A different commenter requested additional information 
regarding the counting of participants who obtain multiple credentials 
during the same program year. A couple of commenters requested 
clarification about what services would qualify as a participant having 
received training for the purpose of the credential attainment rate. 
Finally, two commenters asked whether the credential obtained must be 
based on WIOA-funded services and provided by an ETP.
    Departments' Response: The Departments understand the concerns 
expressed by many commenters about whether the credential attainment 
rate indicator includes all participants of any core program. The 
credential attainment rate indicator focuses on participants who are 
enrolled in an education or training program because the purpose of the 
indicator is to measure performance related to attainment of 
credentials received as a result of successful participation in these 
programs; therefore, it would not be reasonable to measure credential 
attainment against a universe that

[[Page 55983]]

includes other individuals who are seeking critical WIOA services other 
than a credential. The final regulations, as well as the final WIOA 
Joint Performance ICR, will make clear that this indicator measures the 
percentage of those participants enrolled in an education or training 
program (excluding those in OJT and customized training) who obtained a 
recognized postsecondary credential or a secondary school diploma, or 
its recognized equivalent, during participation in or within 1 year 
after exit from the program. Moreover, a participant who has obtained a 
secondary school diploma or its recognized equivalent is only included 
in the percentage of participants who obtained a secondary school 
diploma or recognized equivalent if the participant is also employed or 
is enrolled in an education or training program leading to a recognized 
postsecondary credential within 1 year after exit from the program. 
This WIOA Joint Performance ICR has been revised accordingly such that 
the postsecondary portion of the credential attainment rate denominator 
includes only those postsecondary exiters in an education or training 
program. Postsecondary exiters in on-the-job training and customized 
training are excluded from the credential attainment rate indicator 
because the Departments recognize that those trainings do not typically 
lead to a credential.
    A ``recognized postsecondary credential'' is defined in WIOA sec. 
3(52) as ``a credential consisting of an industry-recognized 
certificate or certification, a certificate of completion of an 
apprenticeship, a license recognized by the State involved or Federal 
Government, or an associate or baccalaureate degree.'' The Departments 
will issue joint guidance that further defines what constitutes an 
acceptable credential for the credential attainment rate numerator, 
including guidance regarding an acceptable industry-recognized 
certificate or certification and definitions for each type of 
credential. The Departments have not provided a threshold for 
participation in education or training programs for inclusion in the 
indicator. The Departments will provide further program-specific 
guidance on what constitutes education or training for inclusion in the 
credential attainment rate indicator, for purposes of the core 
programs. The credential obtained is not required to be WIOA-funded or 
based on services provided by an eligible training provider. There is 
no reason to capture the date training concluded. The credential 
indicator is calculated based on those in education or training at any 
point in the program or within 1 year after exiting the program, 
regardless of whether the training ended.
    Because WIOA sec. 116(b)(2) specifies the percentage of 
participants who obtain a recognized postsecondary credential or 
secondary school diploma or its recognized equivalent in a single 
indicator, the Departments will not separate secondary and 
postsecondary credential attainment into two separate indicators. Any 
acceptable credential attained during the program or within 1 year 
following program exit counts toward the credential attainment rate 
indicator. The PIRL records outcomes regarding this indicator in the 
following manner.
    First, for participants enrolled in a postsecondary education or 
training program (other than OJT and customized training), PIRL 1811, 
Most Recent Date Enrolled in Education or Training Program Leading to a 
Recognized Postsecondary Credential or Employment During the Program, 
records enrollment. Participants enrolled in such a program are 
included in the denominator for calculating outcomes for this 
indicator. PIRL 1801, Date Attained Recognized Credential, records the 
date on which an individual attained a recognized credential, and PIRL 
1800, Type of Recognized Credential, records the type of recognized 
credential attained. The Departments note that PIRL 1801 (formerly PIRL 
1705) has been renamed as suggested by a commenter. Participants are 
included as successes in the numerator of this indicator if at least 
one recognized credential is earned either during participation in the 
program or within 1 year (i.e., four quarters) after exit from the 
program. A participant counts in the denominator and numerator only one 
time regardless of how many credentials a ``participant'' attains prior 
to an ``exit.'' However, if a ``participant'' ``exits'' more than once 
in a program year and attains a credential prior to each exit, the 
program will report the credential attained prior to each exit. The 
Departments note that participants who enter a program with a secondary 
school credential are counted as a success on this indicator if they 
earn a postsecondary credential during participation in the program or 
within 1 year after exit from the program.
    Second, for participants who attain a secondary school diploma or 
its recognized equivalent, PIRL 1401, Enrolled in a Secondary Education 
Program, records enrollment. ABE participation in classes at the ninth 
grade equivalent or higher will count as enrollment in secondary 
education. Participants enrolled in such a program are included in the 
denominator for calculating outcomes regarding this indicator. As 
stated above, PIRL 1801, Date Attained Recognized Credential, records 
the date on which an individual attained a recognized credential, and 
PIRL 1800, Type of Recognized Credential, records the type of 
recognized credential attained, including high school diploma or 
equivalency. WIOA sec. 116(b)(2)(A)(iii) requires that program 
participants who obtain a secondary school diploma or its recognized 
equivalent shall be included in the percentage counted as meeting the 
criterion only if such participants have obtained or retained 
employment or are in an education or training program leading to a 
recognized postsecondary credential within 1 year after exit from the 
program. To that end, PIRL 1406, Date Enrolled in a Post Exit Education 
or Training Program, records the date of post-exit enrollment in such a 
program. Participants are included as successes in the numerator of 
this indicator if, during the program or within 1 year after exit from 
the program, they are enrolled in a post-exit education or training 
program (PIRL 1406), attain a recognized postsecondary credential (PIRL 
1800), or obtain or retain employment (PIRL 1600, PIRL 1602, PIRL 1604, 
PIRL 1606). In the final WIOA Joint Performance ICR, those participants 
who are receiving adult education services while incarcerated will not 
count in the employment retention, earnings, credential attainment, or 
effectiveness of serving employers indicators. These individuals will 
only be counted, for performance calculation purposes, in the 
measurable skill gains indicator. The Departments recognize burden 
concerns for tracking credential attainment. WIOA requires the 
collection and reporting of the credential attainment rate indicator 
for all core programs, except for the Employment Service program, 
authorized under the Wagner-Peyser Act as amended by title III of WIOA 
(see WIOA sec. 116(b)(2)(A)(i)). The Departments will provide guidance 
and technical assistance for tracking and reporting credential 
attainment.
    Comments: A few commenters expressed concern that a participant may 
only be in the denominator once but may be in the numerator multiple 
times, thereby disproportionately affecting the indicator. Commenters 
suggested that the measurable skill gains report templates be aligned 
with the

[[Page 55984]]

reporting instructions and designed so that a participant is not 
counted multiple times. Another recommended that the Departments revise 
the reporting period to include a reasonable lag period, which would 
provide participants with a reasonable opportunity to achieve a gain. 
Three commenters suggested that participants who receive educational or 
training services while incarcerated or institutionalized be included 
in the measurable skill gains performance indicator in order to avoid a 
disincentive to serve these populations. However, a commenter remarked 
that institutionalized individuals should be excluded from the 
indicator because they will not likely be able to continue in secondary 
or postsecondary education. A commenter requested clarification on the 
inclusion of incarcerated individuals in this indicator. One commenter 
stated that the program year timeline does not align with the 
performance needs of the participant and would result in an 
underestimation of the true rate of skill gains. The commenter also 
contended that if a participant is receiving services under multiple 
programs, the individual could be counted multiple times, creating an 
incentive to recruit and promote providers offering short-term 
trainings with easily achieved milestones.
    Departments' Response: The performance calculation for the 
measurable skill gains indicator is the same as it is for all other 
indicators. If a participant exits a program more than once in a 
program year and achieves measurable skill gains prior to exiting each 
time, then that participant could achieve more than one measurable 
skill gain in a program year. A participant may achieve more than one 
measurable skill gain prior to each exit, but only one gain per exit 
will be counted in the performance calculations. If a participant is 
co-enrolled in multiple core programs and meets the definition of 
participant for each of the multiple programs in which the participant 
is enrolled, the participant would count in each program's indicators 
of performance, including the measurable skill gains indicator.
    The Departments will provide program-specific guidance and 
technical assistance to define the types of services and trainings that 
constitute ``an education or training program that leads to a 
recognized postsecondary credential or employment''. Individuals not in 
the types of programs specified will not be included in the measurable 
skill gains indicator.
    The Departments recognize the concern raised by commenters that the 
program year timeline may not provide participants with reasonable 
opportunity to achieve a gain, particularly when a participant enters 
the program late in a program year. Therefore, the Departments 
considered whether a minimum time threshold should be incorporated into 
the measurable skill gains indicator. However, the Departments have 
concluded that given the diversity of participant needs and program 
services, imposing a time period by which progress is to be documented 
would be somewhat arbitrary and difficult. Such practice could result 
in excluding a number of participants from performance accountability 
reporting requirements, even if those participants achieve a gain under 
one of the measures of progress. The Departments note that the 
negotiations process can and should take into account enrollment 
patterns and lower baseline data when establishing negotiated levels of 
performance for the measurable skill gains indicator.
    All participant outcomes, regardless of whether achieved at the end 
of the reporting period in which a participant enrolled or in the next 
reporting period, will count as positive outcomes for the program. The 
Departments are concerned about incentivizing behavior that discourages 
service providers from enrolling disconnected youth, in particular, 
when they first approach programs, or that purposefully attempts to 
focus service on individuals who are more likely to obtain a positive 
outcome. The Departments emphasize that programs must not delay 
enrollment or prohibit participants from entering a program late in the 
program year.
    It is not the Departments' intent to exclude incarcerated 
individuals from the measurable skill gains indicator. The PIRL 
includes a code value for incarcerated participants in PIRL 923, Other 
Reasons for Exit (formerly PIRL 971, Exclusionary Reasons). This 
element is used to exclude incarcerated participants who are enrolled 
in adult education from all performance indicators except for the 
measurable skill gains indicator if they remain incarcerated at program 
exit. The Departments recognize that some programs (i.e., the youth and 
adult education programs) offer educational services to incarcerated 
individuals, and participants may make interim progress or other gains 
in secondary or postsecondary education. The final information 
collection specifies that the purpose of the code values specific to 
incarcerated participants is to exclude incarcerated individuals from 
the performance calculations for the employment indicators (employment 
in 2nd and 4th quarter after exit, median wages, and effectiveness in 
serving employers) and the credential attainment indicator, but not to 
exclude them from performance calculations for the measurable skill 
gains indicator. This means that programs that serve incarcerated 
individuals would be held accountable for the measurable skill gains 
indicator.
    Comments: Regarding the burden of collecting data for measurable 
skill gains, commenters stated that the performance indicator would be 
too burdensome to collect for adult and dislocated worker programs. 
Commenters also inquired how frequently the data used to calculate this 
indicator need to be collected. One commenter remarked that it has not 
tracked the data required to calculate measurable skill gains and it 
would be burdensome to gather this information retroactively. A 
commenter emphasized the need for guidance regarding measurable skill 
gains. Another commenter requested that guidance for the indicator 
consider skills beyond typical quantifiable measures, using the NFJP 
model as a basis, which includes developing detailed custom training 
plans for each participant. One commenter inquired whether local areas 
will be required to implement a standard measure or test of proficiency 
and whether there will be technical assistance to operationalize the 
real-time recording of proficiency levels. This commenter compared the 
potential challenges of the measurable skill gains indicator for local 
areas to the challenges experienced under the WIA literacy/numeracy 
gains common measure. One commenter supported the proposal to phase in 
the implementation of the measurable skill gains indicator and 
suggested that grade point average (GPA) be used as a method to measure 
and document skill gains.
    Departments' Response: The Departments recognize burden concerns 
for States due to the changes in the performance reporting 
requirements; however, WIOA sec. 116(b)(2)(A)(i) requires that the 
measurable skill gains indicator apply across all core programs, except 
for the Wagner-Peyser Act Employment Service program, in order to 
assess the effectiveness of States and local areas in achieving 
positive outcomes for individuals served by those programs. Therefore, 
the implementation of the measurable skill gains indicator cannot be 
phased in and States are required to begin collecting

[[Page 55985]]

data for this indicator in PY 2016. Having said this, the Departments 
recognize that some programs will not be able to collect data and 
report on all indicators immediately. The Departments will provide 
program-specific guidance as appropriate.
    In order to address the various comments and questions received 
regarding the measurable skill gains indicator, the Departments will 
provide program guidance and technical assistance regarding each core 
program in WIOA titles I, II, and IV to further clarify the measurable 
skill gains indicator. The Departments have concluded, however, that 
additional types of documented progress for determining whether a 
participant has achieved measurable skill gains beyond the five types 
set forth in final Sec.  677.155(a)(1)(v) will not be included. The 
Departments note the five gain types included in the regulation and the 
WIOA Joint Performance ICR share a level of rigor and provide enough 
flexibility to allow for the commenters' recommended option.
    The Departments acknowledge the suggestion to use GPA as a method 
to measure skill gains. The Departments reiterate that, as stated 
above, both the Final Rule at Sec.  677.155(a)(1)(v) and the WIOA Joint 
Performance ICR will define only five standardized ways States can 
measure and document participants' measurable skill gains. The 
Departments note, however, that GPA may be reflected in PIRL 1807 
(former PIRL 1801) and PIRL 1808 (former PIRL 1801). Each of these 
elements records measurable skill gains as documented by a transcript 
or report card for either secondary or postsecondary education for a 
sufficient number of credit hours to show that a participant is meeting 
the State unit's academic standards.
    Comments: A commenter suggested that measurable skill gains should 
include attainment of competencies to stay abreast of innovative 
educational practices; secondary and postsecondary education should be 
measured separately to enhance precision and clarity of the indicator; 
and interim progress should be achieved after attainment of 12 rather 
than 24 credit hours. Another commenter inquired as to what is 
considered an adequate rate of measurable skill gains for part-time 
students.
    Departments' Response: The Departments acknowledge the suggestion 
to include attainment of competencies to stay abreast of innovative 
educational practices but have not added measures beyond the five 
standardized ways for documenting measurable skill gains in Sec.  
677.155(a)(1)(v) and the WIOA Joint Performance ICR. In regard to the 
comment related to measuring secondary and postsecondary education 
separately, the Departments will not separate secondary and 
postsecondary credential attainment into two separate indicators of 
performance because WIOA specifies the percentage of students who 
obtain a recognized postsecondary credential or secondary school 
diploma as a single indicator of performance for the performance 
accountability measures. However, the Departments note that it is 
important to capture data on students who achieve a high school diploma 
or its recognized equivalent, as well as a recognized postsecondary 
credential; therefore, both will be included in one indicator for 
performance accountability purposes (as indicated by the ``Credential 
Attainment Rate'' tab in the WIOA Statewide Performance Report 
Template), but programs will be able to collect data on achievement of 
both types of credentials, as appropriate, in PIRL 1800 (former PIRL 
1700), which records Type of Recognized Credential attained. The 
Departments conclude that for the measurable skill gains indicator, the 
multiple gain types proposed are rigorous and provide flexibility to 
allow for gains to be captured in a variety of ways. While commenters 
may be concerned about how the Departments will adjust for variation 
among States in gains for clients enrolled in longer-term postsecondary 
programs, the Departments note that participants would have the 
opportunity for success in the transcript type gain, which would allow 
a program to record a gain for such participants in every year. 
Furthermore, the statistical adjustment model is designed to compensate 
for these variations in the consideration of levels of performance, 
thereby compensating for State-to-State variances in the length of 
postsecondary education. The Departments will not weigh performance 
indicators based on degree of program difficulty. The Departments 
emphasize that programs may not purposefully attempt to focus service 
on individuals perceived as more likely to obtain a positive outcome, 
or selectively enroll participants in programs in which positive 
outcomes on these indicators are perceived as more likely, but for 
which such enrollment is not in the best interest of the participants.
    Lastly, the Departments recognize concerns regarding credit hours 
for interim progress. In the NPRM, the Departments proposed a measure 
requiring a transcript or report card for 1 academic year or for 24 
credit hours. The Departments agree with the concern that a transcript 
for 1 academic year or 24 credit hours is too onerous for part-time 
students and have changed this measure to require that the transcript 
or report card reflect a sufficient number of credit hours to show a 
participant is achieving the State unit's academic standards. This 
change will be reflected in the Joint WIOA Final Rule at Sec.  
677.155(a)(1)(v)(C), which will document progress through receipt of a 
secondary or postsecondary transcript or report card for a sufficient 
number of credit hours that shows a participant is meeting the State 
unit's academic standards. The Departments anticipate that, for 
participants in postsecondary education, a sufficient number of credit 
hours would be at least 12 hours per semester or, for part-time 
students, a total of at least 12 hours over the course of two completed 
consecutive semesters during the program year that shows a participant 
is achieving the State unit's academic standards (or the equivalent for 
other than credit-hour programs).
    Comments: A commenter recommended that the Departments implement 
processes in data collection and reporting that are sensitive to 
diverse populations. Specifically, this commenter pointed out that the 
significant barriers for some students (especially those at the lowest 
literacy levels or non-native English speakers) are often not taken 
into consideration when developing measures to track goals and student 
performance. Another commenter suggested that special programming 
efforts may require new regulations or exceptions to existing 
regulations. Other commenters recommended that special priority 
populations, including ``low-level learners'', be reported as separate 
cohorts and suggested that the reporting methods take into 
consideration the more difficult process for data collection to follow 
up with these populations.
    Departments' Response: The Departments acknowledge the 
recommendation to implement processes for data collection and reporting 
that are sensitive to special populations with barriers to employment. 
The Departments recognize that, given the diversity of participant 
needs and program services, the State agencies will be faced with the 
challenges and burden of implementing the new requirements and 
responsibilities imposed by WIOA, including the challenges associated 
with revising the management information systems to collect information 
on diverse populations.

[[Page 55986]]

    However, for consistency purposes in reporting, the Departments 
will not implement additional exceptions to these final regulations. 
The Departments have provided rules to accommodate certain exceptional 
circumstances. For example, criminal offenders in correctional 
facilities are not included in employment and earnings indicators or 
the credential attainment rate indicator if they remain incarcerated at 
program exit, since they do not have the same opportunity to engage in 
unsubsidized employment or postsecondary education as do others in the 
general population. Likewise, participants who score at low levels of 
literacy are not included in credential attainment rate indicators 
unless they are enrolled in programs that provide instruction at or 
above the ninth grade level. These measures provide a reasonable 
approach to providing accountability while acknowledging the needs of 
vulnerable populations.
    Comments: Multiple commenters provided feedback on two basic 
approaches to compiling the information necessary for a compliant ETP 
performance report that would achieve the stated objective of 
maximizing the value of the template for stakeholders. In the first 
approach, grantees would complete the ETP performance reports and make 
them available using the proposed template. Under that approach, one 
commenter favored grantees completing and making available the 
information using the proposed template, reasoning that it would give 
States the flexibility to compile and reconcile their own data. 
Commenters in another State agreed this approach would maximize the 
value of the report for local use. One commenter said that its State 
does not collect program level data for its large public institutions 
as part of the criteria to be an ETP, but the commenter recommended 
that program level data should be reported for those who provide 
training to participants in the WIOA adult and dislocated worker 
programs. In the second approach, grantees would send the necessary 
aggregate data to the Department, which would then compile, format and 
display the data.
    One commenter favored this approach because it would increase the 
likelihood that reporting would be consistent, which would facilitate 
analysis and comparison. Another commenter suggested that, because each 
State has different access rights to information, the burden on States 
could be drastically reduced if WIOA partners could submit their 
reports to their Federal reporting agency that is then responsible for 
consolidating the information. Another commenter requested that DOL not 
specify the manner in which ETP performance reports are filed, 
reasoning that it would be easier for State agencies to run data 
required by the template rather than requiring ETPs to modify their 
systems to capture all the information required by the report. A 
commenter agreed that much of the information in the ETP report could 
be more efficiently provided by State and local governments--notably 
one-stop caseworkers--rather than ETPs, which have little or no access 
to some of the data. Commenters in another State remarked that local 
areas collect and track information for the ETP performance report 
constantly and stated that transferring the data to a centralized point 
for display to the public seems unnecessary and burdensome. Some 
commenters supported flexibility and urged the Departments not to 
mandate a method for filing reports, allowing either of the two 
approaches: grantees complete the ETP performance reports using a 
template and provide the Departments with the appropriate location of 
the report, or grantees send the necessary aggregate data to the 
Departments where the data could be compiled, formatted and displayed 
in a standardized user-friendly template and made available as required 
by WIOA sec. 116(d)(6)(B).
    Departments' Response: WIOA sec. 116(d)(1) requires the Secretary 
of Labor, in conjunction with the Secretary of Education, to develop a 
template for performance reports to be used by States, Local WDBs, and 
ETPs for reporting on outcomes achieved by participants in the six core 
programs. The statute further requires that these templates for 
performance reports be designed in a manner that reflects the need to 
maximize the value of these templates for workers, job seekers, 
employers, local elected officials, State officials, Federal policy-
makers, and other key stakeholders. Ultimately, as required by WIOA 
sec. 116(d)(6), the State must make available, in an easily 
understandable format, the performance reports for the ETPs. Based on 
review and consideration of the comments, the Departments have 
concluded that the standardization of the submission approach would 
lead to the best results in terms of data quality and will be providing 
submission details in a separate publication.
    Comments: Many commenters expressed concern regarding the level of 
burden to ETPs for collecting the required data. Comments on burden 
pertained to required data elements as well as the data required for 
WIOA and non-WIOA students in particular. Some of these commenters 
recommended that the Departments lessen the burden by providing States 
the flexibility to develop ETP reporting requirements specifically for 
the elements related to wage data. One commenter acknowledged the data 
collection challenge for some ETPs but asserted it was important to 
have data on all students in order to help WIOA participants make 
informed decisions when selecting a training program. Another commenter 
remarked that it would be challenging to track down students to 
identify information as needed. A State agency expressed concern that 
ETPs would incur substantial burden to modify their systems to track 
and report data specific to WIOA participants. Another commenter said 
it is unlikely all providers will be able to collect the required data, 
so there may be data gaps for non-WIOA participants. A commenter 
expressed concern that the ETP performance report would not encourage 
entities other than colleges to participate in training because the 
data collection would seem intrusive to smaller facilities. This 
commenter also stated that collecting detailed program level data would 
be ineffective due to the small number of enrollments in training 
programs. Other commenters expressed similar concerns that data 
collection for the ETP performance report would seem intrusive to 
smaller training facilities and that information and documentation for 
low-income and younger clients would be difficult. Another commenter 
stated that disaggregated reports would be largely blank due to the 
relatively small number of participants and the need to maintain 
confidentiality.
    Departments' Response: The Departments acknowledge the commenters' 
concerns and recognize the need to identify effective data collection 
strategies. However, the Departments have no authority to reduce the 
ETP reporting requirements set forth in WIOA sec. 116(d)(4), which 
mandate the collection of specific information for WIOA participants 
and for all individuals engaged in a program of study (or equivalent) 
for each such program of study provided by each eligible training 
provider, as outlined in the final regulations at Sec.  677.230(a). The 
Departments recognize concerns expressed regarding the level of burden 
to ETPs for collecting the required data. In particular, WIOA sec. 
116(d)(4)(A) requires information specifying the levels of performance 
achieved, for all

[[Page 55987]]

individuals engaged in a program of study, with respect to the primary 
indicators of performance for employment, earnings, and credential 
attainment. Moreover, WIOA sec. 116(d)(4)(B) requires the total number 
of individuals exiting from a program of study. Finally, WIOA secs. 
116(d)(4)(C)-(F) require additional information regarding participant 
counts, participant exits, average cost per participant, and number of 
participants with barriers to employment as described in the proposed 
definitions.
    In addition, the Departments have concluded that States are 
permitted to use ITAs for out-of-school WIOA youth participants ages 18 
to 24, as provided in the DOL WIOA Final Rule at 20 CFR 681.550. For 
the purpose of the annual ETP performance report, WIOA out-of-school 
youth, ages 18 to 24, participating in a program of study using an ITA 
are reported in both the ETP performance report as well as in the State 
and Local annual reports. Because WIOA sec. 116(d)(4) does not describe 
such youth, the Departments note that when such youth are reported in 
the ETP performance reports, their performance is reported using the 
same performance indicators as prescribed for WIOA adult and dislocated 
worker participants (i.e., the primary indicators of performance 
specified under WIOA sec. 116(b)(2)(A)(i)), which will be further 
specified in implementing regulations at Sec.  677.155(a)(1)(i) through 
(vi). Using the same metrics for out-of-school youth using ITAs as well 
as for other WIOA participants and individuals in a course of study (or 
equivalent) minimizes the burden on ETPs. The Departments note that 
such youth are excluded from the required reporting identified at Sec.  
677.230(a)(1)(i) through (iii), but are included in the counts required 
by (a)(2) through (a)(4). The Departments further note that such youth 
are additionally reported on in the State and Local annual reports in 
accordance with Sec. Sec.  677.155(d), 677.160, and 677.205 as 
described in those sections. The Departments will provide additional 
guidance on the treatment of these out-of-school youth using ITAs 
through the information collection process and in guidance. Therefore, 
for purposes of reporting on the ETP performance report, references to 
the adult and dislocated worker programs under title I of the WIOA 
adult program include out-of-school WIOA youth ages 18 to 24 
participating in a program of study using an ITA.
    The Departments have concluded that the WIOA Joint Performance ICR 
is in line with WIOA sec. 116(d) and will not reduce the number of 
required elements in the ETP reporting template. The Departments 
recognize the contribution of ETPs that may serve smaller populations 
and acknowledge that suppression standards may limit data, but have 
concluded that the WIOA Joint Performance ICR aligns with WIOA sec. 
116. The Departments also recognize the interest in establishing 
processes for accessing wage related data. The Departments will provide 
additional information on the parameters of the collection and 
reporting of this information through the associated ICR and program 
specific guidance.
    Comments: Regarding the PIRL, multiple commenters addressed the use 
of unique identifiers for program participants. A commenter requested 
clarification regarding how States would match unique identifiers when 
not using SSNs. Similarly, three commenters asked whether all core 
programs would be required to use the same unique identifier for a 
participant. Other commenters requested that the Departments clarify if 
the unique identifier must be an SSN. Another commenter recommended 
that a method for implementing a unique identifier be identified and 
phased in over time in order to allow States time to develop the 
necessary data collection systems. One commenter remarked that its core 
programs are not interconnected and would be unable to share unique 
identifiers.
    Departments' Response: The unique identifier is not required to be 
an SSN. However, wage matching with the State UI system will be 
impossible for any participant for whom an SSN is not available. In 
those circumstances, programs will need to rely on supplemental follow-
up methods for determining wages at 2nd quarter and 4th quarter 
following program exit. State VR agencies use a unique identifier now 
and the VR program may be a resource for other core programs when 
developing such a system. The Departments understand that many State 
data systems for Education and Labor programs are not interconnected. 
There is no requirement to share a common data system. Having separate 
systems does not preclude matching data to identify employment 
outcomes.
    Comments: Commenters also discussed cultural barriers to 
employment. Four commenters urged the Departments to define cultural 
barriers clearly. Similarly, two commenters recommended that the 
Departments provide a less subjective definition of cultural barriers 
to allow for more consistency in the data. Another commenter suggested 
that the definition of cultural barriers be expanded to include limited 
English abilities. Two commenters stated that PIRL 705 identifies both 
displaced homemaker and cultural barriers. A commenter expressed 
opposition to tracking cultural barriers, reasoning this could alienate 
populations it should be serving and create liability for 
discrimination-based lawsuits. Similarly, another commenter expressed 
concern about posing this question without appearing discriminatory. 
Two commenters opposed collecting information on cultural barriers, 
stating that it is subjective and adds no significant value. Another 
commenter asked whether cultural barriers should be identified by the 
participant. One commenter recommended that the service providers, 
rather than the participant, be responsible for identifying cultural 
barriers. However, another commenter suggested only substantial, self-
identified cultural barriers should be reported. Still another 
commenter contended that PIRL 705 is defined using a lesser standard 
than WIOA, which references a substantial cultural barrier. Two 
commenters requested that the Departments provide guidance indicating 
how to collect data on cultural barriers. A commenter suggested that 
participants may be unaware of the cultural barriers to employment that 
they face, making the data inaccurate.
    Departments' Response: The statute identifies ``individuals who are 
English language learners, individuals who have low levels of literacy 
and individuals facing substantial cultural barriers'' as three 
categories of an ``individual with a barrier to employment.'' These 
three categories are treated as separate data elements in the PIRL 
because both individuals who are English language learners and 
individuals with low levels of literacy are elements that are required 
to be used in the statistical adjustment model, while the data element 
for individuals who are facing substantial cultural barriers is not 
required to be used in the model. The Departments understand that the 
determination of cultural barriers is highly subjective and have 
provided a definition that allows a program to base the designation on 
a participant's self-perception as to whether his or her attitudes, 
beliefs, customs, or practices pose a hindrance to employment.
    Comments: Five commenters expressed concern and requested 
clarification about the discrepancies between the PIRL and RSA-911. For 
example, a commenter stated that the RSA-911 does not currently collect 
PIRL 1802 (Date of Most Recent

[[Page 55988]]

Measurable Skill Gains: Training Milestone) or PIRL 1803 (Date of Most 
Recent Measurable Skill Gains: Skills Progression). Another commenter 
recommended that the Departments align the PIRL and RSA-911 definitions 
and reporting options for PIRL data elements 1800 through 1804. 
Similarly, another commenter suggested that the Departments align the 
PIRL and RSA-911 or provide a crosswalk between the two sets of data 
elements.
    Departments' Response: The Departments note the RSA-911 ICR was 
published prior to the proposed WIOA Joint Performance ICR, which 
includes the PIRL. Therefore, the RSA-911 did not reflect all of the 
changes necessary to align with the PIRL. The final RSA-911 ICR will 
include new and/or revised data elements and definitions as necessary 
to provide alignment with the PIRL. In addition, RSA-911 data will be 
submitted quarterly in order to align reporting under the VR program, 
which operates on a Federal fiscal year basis, to the reporting of 
performance on a program year basis as required under these 
regulations.
    Comments: Two commenters expressed concern that the PIRL is 
centered on DOL programs and is difficult for other core programs to 
use. A commenter said that it is unclear which programs are responsible 
for the transmission of the PIRL, or if each core program should submit 
the report separately. A commenter said that a combined core PIRL would 
be duplicative if States are required to submit quarterly and annual 
reports as well.
    Departments' Response: Individual core programs will submit data 
through each core program's information collection. The entity that 
will submit this data will vary by State based on the level of data 
integration. The Departments strongly encourage States to improve data 
integration across programs. The purpose of this collection is to 
specify the elements that are required to be reported by all core 
programs and align the definitions of the different data elements 
across the core programs, thereby ensuring consistency and 
comparability of the data among all core programs and States. The 
Departments note that, for the programs that require submissions of 
quarterly and annual reports, the information obtained through this 
collection will be part of these quarterly and annual reports and not a 
duplication of those reports.
    Comments: A number of stakeholders submitted comments on the burden 
estimates for the State performance report template, noting that the 
costs are underestimated. In particular, commenters suggested that the 
time to collect data should be more than 15 minutes per response. 
Commenters also cited the burden to obtain information that is not 
currently available, including the requirement to track individuals 
after program exit and the need to monitor data quality. A commenter 
enumerated significant IT time and costs, including more frequent 
reporting and integration with partnering agencies, to implement the 
required changes. Another commenter remarked that staff time spent on 
these activities results in fewer direct services to program 
participants. A commenter asked for clarification about reporting for 
multiple years and possible duplication for co-enrolled participants, 
commenting that enhancing the quality, utility, and clarity of the 
information collected would reduce the burden on those who must 
respond. Another commenter requested that an effort be made to utilize 
any existing Federal and State databases that already contain some of 
the WIOA-required data elements that need to be collected. One 
commenter suggested that the Departments develop a standardized 
application or supplemental form that includes fields for applicants to 
self-report the required data elements.
    Departments' Response: The Departments acknowledge that an increase 
in the burden estimate is necessary to reflect more accurately the 
costs in time and resources to begin collecting, validating, and 
reporting new requirements under WIOA's new reporting system, 
particularly for the VR program. As such, the burden estimates in the 
RIA section of this Joint WIOA Final Rule (see section V.A), as well as 
the tables in section 12 of the Supporting Statement for the WIOA Joint 
Performance ICR (which cover burden estimates) have been modified . For 
example, in response to comments, RSA has revised its methodology for 
estimating burden related to new data collection requirements in order 
to more accurately reflect needed State investments in personnel, time, 
and other resources.
    The Departments also understand the increased administrative burden 
for follow up and the collection of new statutorily required data under 
WIOA, such as cost per WIOA participant served (see WIOA sec. 
116(d)(2)(F), which requires the State performance report to include 
``the average cost per participant of those participants who received 
career and training services, respectively, during the most recent 
program year and the three preceding program years''). The Departments 
made every effort to provide a comprehensive estimate of the costs 
incurred by programs, State agencies, and all other stakeholders in 
adhering to all WIOA requirements and will provide direction on issues 
such as identifying clients without SSNs, streamlining processes and 
eliminating duplication, timelines for integration, alignment of the 
RSA-911 with the WIOA PIRL, and best practices for providing optimal 
initial and follow-up services to participants in subsequent guidance. 
Also, the Departments agree with the commenter that the enhanced use of 
technology in the data collection and reporting process will result in 
greater efficiencies and reduced burden for States and local programs. 
With regard to the commenter's other concerns about data sharing among 
the core partners, the Departments are currently working on additional 
guidance to facilitate that process. The burden estimate for the 
collection and reporting of data was updated in the issuance of the 
final WIOA Joint Performance ICR to more accurately reflect the time 
staff spent obtaining and entering the required data elements.
    States may use existing databases to assist in obtaining the 
required data elements provided the data sharing meets the required 
statutory and regulatory privacy requirements. However, States remain 
responsible for ensuring the accuracy and timely submission of required 
data elements. States are not prohibited from developing a standardized 
form that would allow individuals to self-report data, apart from 
information that is necessary for the program to receive Federal funds.
    Comments: Several commenters provided input on the definition of 
participant and/or participation period. The majority of commenters 
expressed opposition to establishing a new exit date for an individual 
who has exited and returned within the same program year. A few 
commenters stated that the proposed exit methodology will increase the 
implementation burden while producing less informative data. Another 
commenter mentioned that the proposal to combine multiple periods of 
participation (POPs) when a participant exits more than once in a 
program year would reduce the reliability of quarterly reports, 
increase the burden to manage programs, and decrease the effectiveness 
of the statistical adjustment model. A few other commenters said that 
implementing the definition of ``exit'' as proposed would require 
modifications to case management systems. A commenter suggested that 
the definition of ``exiter'' remain the same as under

[[Page 55989]]

WIA. This commenter also remarked that the definition of ``exiter'' as 
proposed in the WIOA Joint Performance ICR would provide an accurate 
count of participants in a program year for participant and ``exiter'' 
measures, but would potentially duplicate participants in primary 
performance outcome measures. A commenter remarked that the proposed 
definitions of ``participant'' and ``exit'' would require a rolling 
system for reporting, but it is not clear how this could be done 
accurately to track performance.
    Departments' Response: The Departments acknowledge the commenters' 
many concerns and suggestions related to the Departments' proposed 
approach to participation and exit for individuals who exit more than 
once in the same program year. To respond to these concerns, the 
Departments have altered the approach to unique participants that was 
published in the proposed WIOA Joint Performance ICR. For performance 
reporting purposes, States should report participants separately for 
each time the participant exits the program, with the period of time 
the participant received services prior to exiting sometimes commonly 
called a ``POP.'' In addition, States should provide to the 
Departments, for each of the WIOA titles I and II core programs, and 
the VR program, a unique identifier that stays the same across multiple 
POP for the same participant, but not necessarily the same identifier 
across different programs if the participant receives services from 
multiple programs in the same program year. The Departments will use 
this unique identifier to calculate a count of unique participants in 
each program for each State, which will be reported on the State 
Performance Reporting Template. The performance measures will be 
calculated using the ``exits'' (i.e., POP), which the Departments 
conclude will incentivize the provision of the most effective and 
appropriate service delivery strategy regardless of how many previous 
POP an individual has had. The Departments will provide further 
guidance and technical assistance to implement this in order to ensure 
a consistent approach that facilitates comparability across programs.
    Core programs administered by ETA already utilize a ``rolling four 
quarter methodology'' for quarterly reporting. In other words, for each 
data element, the most recent four quarters worth of data are reported 
(which will be different for different data elements due to the timing 
of the availability of the data). ETA will continue utilizing this 
approach, which adjusts for seasonality and which allows 1 year of data 
to be reported on any given quarterly report.
    Comments: Several commenters discussed the collection of data 
pertaining to barriers to employment. A few commenters said that 
collecting the data on barriers of employment would be challenging and 
burdensome. Similarly, a commenter stated that the collection of this 
data would increase the burden more than the value it would provide and 
asked how the Departments plan to communicate the results of the data 
to local areas. Another commenter stated that the proposed data on 
barriers to be collected is unnecessary. A few commenters requested 
clarification on barriers to employment. In particular, one of these 
commenters asked whether it is expected to collect data on all barriers 
to employment for each client. Another commenter requested 
clarification on how data on barriers to employment would be collected. 
A different commenter suggested the Departments confirm that a 
participant may be reported in multiple categories for barriers to 
employment.
    Departments' Response: WIOA sec. 116 requires a statewide report 
that includes a breakout by those with barriers to employment. The WIOA 
Joint Performance ICR provides information about the barriers to 
employment that must be collected and how these data will be collected. 
Additional information on how these categories are populated can be 
found in the PIRL and Statewide Annual Report Specifications.
    Comments: Some Commenters pointed out that every barrier to 
employment should not have to require documentation to be validated. 
Two commenters asked whether PIRL 802 (formerly PIRL 702) determining 
``Low Income'', would apply to adult education participants and whether 
supporting documentation from the participant would be required. 
Similarly, another commenter said that describing artificial barriers 
for ex-offenders is a poor word choice for describing their barriers to 
employment.
    Departments' Response: WIOA specifies new reporting requirements, 
including data reporting related to barriers to employment. The 
definition of an ``individual with a barrier to employment'' 
encompasses mandatory populations. Low income and ex-offenders are just 
two of the populations included in the definition, representing 
barriers to employment that must be collected for purposes of the 
performance accountability system under WIOA. The Departments recognize 
the importance of ensuring that individuals with barriers to employment 
receive services, and the Departments recognize that States may 
experience challenges with this data collection. The Departments intend 
to issue joint- and program-specific guidance and technical assistance 
to provide further clarification on each employment barrier, how the 
data should be collected, and necessary documentation for each barrier.

Unified or Combined State Plan and Plan Modifications Under the 
Workforce Innovation and Opportunity Act, Wagner-Peyser WIOA Title I 
Programs, and Vocational Rehabilitation Adult Education

    Agency: DOL-ETA.
    Title of Collection: Unified or Combined State Plan and Plan 
Modifications under the Workforce Innovation and Opportunity Act, 
Wagner-Peyser WIOA Title I Programs, and Vocational Rehabilitation 
Adult Education.
    Type of Review: Revision.
    OMB Control Number: 1205-0522.
    Affected Public: State, Local, and Tribal Governments.
    Obligation to Respond: Required to obtain or maintain benefits 
(WIOA, secs. 102 and 103).
    Total Estimated Number of Respondents Annually: 38.
    Total Estimated Number of Annual Responses: 38.
    Frequency of Responses: On Occasion.
    Total Estimated Annual Time Burden: 8,136 hours.
    Total Estimated Annual Other Costs Burden: $0.
    Regulations Sections: DOL programs--20 CFR 652.211, 653.107(d), 
653.109(d), 676.105, 676.110, 676.115, 676.120, 676.135, 676,140, 
676.145, 677.230, 678.310, 678.405, 678.750(a), 681.400(a)(1), 
681.410(b)(2), 682.100, 683.115. ED programs--34 CFR parts 361, 462 and 
463.
    ICR Approval Status: Not yet approved.

Overview and Response to Comments Received

    Overview: WIOA requires each State to submit either a Unified or 
Combined State Plan that fosters strategic alignment of the six core 
programs, which include the adult, dislocated worker, youth, Wagner-
Peyser Act Employment Service, AEFLA, and VR programs. The Departments 
have interpreted ``State,'' in this context, to include the outlying 
areas of Guam, American Samoa, Northern Mariana Islands, the U.S. 
Virgin Islands, and, as applicable, the Republic of Palau. This

[[Page 55990]]

means that each of the outlying areas must submit a Unified or Combined 
State Plan, in accordance with secs. 102 and 103 of WIOA, just as any 
State does. The Unified or Combined State Plan requirements improve 
service integration and ensure that the public workforce system is 
industry-relevant and responds to the economic needs of the State and 
successfully matches employers with skilled workers. The Unified or 
Combined State Plan describes how the State will develop and implement 
a unified and integrated service delivery system rather than separately 
discuss the State's approach to operating each core program 
individually. This information collection implements secs. 102 and 103 
of WIOA.
    While each State, at a minimum, must submit a Unified State Plan 
covering the six core programs, sec. 103 of WIOA permits a State to 
submit a Combined State Plan that includes the six core programs plus 
one or more additional Combined State Plan partner programs listed in 
sec. 103(a)(2) of WIOA. If the State chooses to include one or more 
Combined State Plan partner programs, its Combined State Plan must 
include all of the common planning elements contained in the Unified 
State Plan and an additional element describing how the State will 
coordinate the additional Combined State Plan partner programs with the 
six core programs (WIOA sec. 103(b)(3)).
    Comments: One commenter recommended that State Plans require a 
labor market analysis.
    Departments' Response: Although the Departments agree with the 
comment, no change to the WIOA State Plan ICR is needed because it 
already requires a labor market analysis consistent with sec. 102(b)(1) 
of WIOA.
    Comments: Another commenter expressed concern that the trucking 
industry may struggle to secure ``in-demand'' recognition in many 
States unless a State's obligations are further clarified under section 
II of the Draft Unified and Combined State Plan Requirements document.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment because States are 
encouraged to use a variety of accurate, reliable, and timely labor 
market information on which to base their analyses in the State Plan. 
The use of a variety of labor market information allows States to 
reliably determine ``in-demand'' labor market needs, including for the 
trucking industry.
    Comments: Several commenters provided input on section 
II(a)(1)(A)(iii), in which commenters proposed that States include an 
assessment of the employment needs of employers in certain industries 
and sectors, including a description of the knowledge, skills, 
abilities, and credentials and licenses required for employers. The 
commenters also recommended replacing ``credentials and licenses'' with 
``recognized postsecondary credentials.''
    Departments' Response: The Departments conclude that it was 
appropriate to keep ``credentials and licenses'' rather than narrowing 
the meaning of term by replacing it with ``postsecondary credentials'' 
since it is a broad term that allows maximum flexibility to States to 
determine their needs and the WIOA State Plan ICR already requires 
States to include ``recognized postsecondary credentials.''
    Comments: A commenter stated that when assessing the needs of 
employers, it would be beneficial to collect information on whether 
these various employers are subject to sec. 503 of the Rehabilitation 
Act.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR because it is not the appropriate vehicle for collecting 
information on whether employers are subject to sec. 503 of the 
Rehabilitation Act.
    Comments: Some commenters noted that section II(a)(1)(B) would be 
an appropriate opportunity to include labor force participation rates 
for persons with disabilities, including youth and veterans with 
disabilities.
    Departments' Response: The Departments agree that understanding 
labor force participation rates is important and revised the collection 
instrument in section II(a)(1)(B)(i) to include labor force 
participation rates.
    Comments: A commenter suggested that States collect information 
concerning the numbers of individuals with disabilities who are working 
in segregated work environments (``sheltered workshops'') and who are 
employed under a 14c waiver (receiving sub-minimum wage).
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment because the change is not 
necessary. Section 101(a)(14) of the Rehabilitation Act of 1973, as 
amended by title IV of WIOA, requires the VR agencies to conduct a 
semiannual review and re-evaluation of individuals served by the VR 
program who are employed in sheltered settings or at subminimum wage. 
The semiannual reviews must be conducted for the first 2 years of the 
individual's employment and annually thereafter. Furthermore, the VR 
services portion of the Unified or Combined State Plan contains an 
assurance that the State VR agency will report information generated 
under sec. 101(a)(14) to the Administrator of the Wage and Hour 
Division of DOL.
    Comments: Another commenter proposed that knowledge and familiarity 
with English be included in the analysis of the current workforce and 
that each Plan include a strategy for addressing the adult education 
and family literacy needs of the incumbent workforce.
    Departments' Response: The Departments agree that such analysis and 
strategies should be included and expect States to provide a strategy 
for addressing the needs of individuals with limited English 
proficiency. Since the WIOA State Plan ICR already requires this as 
written, no change is needed.
    Comments: A commenter cited an increase in State and Federal 
policies aimed at increasing employment for individuals with 
disabilities and encouraged States to examine whether or not their 
particular State is under any of these policies, which would help 
determine future labor market trends and give further direction on 
increasing employment for individuals with disabilities.
    Departments' Response: The Departments decline to require an 
examination of State policies as a way to understand their possible 
impact on employment for individuals with disabilities since it goes 
beyond what the State is required to do under WIOA for purposes of the 
State Plan and may be more appropriate for a formal study.
    Comments: Another commenter explicitly urged that financial 
literacy be included as a component of education. Specifically, the 
commenter said that there should be an assessment of financial literacy 
skills as part of the assessment of education and skills level.
    Departments' Response: The Departments agree that financial 
literacy plays a significant role in a person's overall success, and 
that the WIOA State Plan ICR, as written, permits States to identify 
what skills gaps exist in their State, including a lack of financial 
literacy. States are encouraged to look at financial literacy as a 
possible need of their population, but the Departments decline to 
itemize every kind of skill that could be included in an assessment of 
education and skill level in the WIOA State Plan ICR.
    Comments: Several commenters asked for clarification on what is 
meant by ``skill gaps.''

[[Page 55991]]

    Departments' Response: Determining ``current gaps,'' ``projected 
gaps,'' and ``projected education and skills of the workforce'' is 
within the State's purview, and each State has flexibility to identify 
what skills gaps or mismatches exist in the State.
    Comments: A commenter said innovative partnerships with entities 
such as faith- and community-based organizations should be included in 
the analysis of the State's workforce development, education, and 
training activities in section II(a)(2)(A) and section III(a)(2)(c).
    Departments' Response: The Departments agree and made a change to 
the WIOA State Plan ICR by adding a footnote clarifying that the phrase 
``workforce development activities'' could include a wide variety of 
programs, including human services, faith- and community-based 
organizations, and educational institutions.
    Comments: A commenter asserted that the requirements for the 
workforce development, activities should include reporting on, and not 
only an assessment of, activities offered and to what extent those 
activities are both physically and programmatically accessible to job 
seekers with disabilities.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment because it is more 
appropriate to identify the extent to which these activities are 
accessible during monitoring than through the State Plan. Sections V.7 
and V.10 require States to comply with physical and programmatic 
accessibility requirements of WIOA sec. 188 and the Americans with 
Disabilities Act of 1990.
    Comments: A commenter said the State's strategic goal should be a 
guiding rather than prescriptive document, providing overall direction 
and supporting Local WDBs in developing strategies best suited to their 
local economies.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR because it is within the Governor's discretion to decide 
how broad the vision should be for the State; however, engagement of 
the Local WDBs is required under sec. 101(d) of WIOA in the development 
of the State Plan.
    Comments: Several commenters took issue with the use of the term 
``sector strategies'' in section (II)(c)(1) and suggested that the 
language be refined.
    Departments' Response: The Departments agree and changed the WIOA 
State Plan ICR to refer to ``industry or sector partnerships'' and to 
align more closely with the statutory language, including WIOA sec. 
101(d)(3)(B) and (D). Also, statutory references were added for the 
definitions of ``career pathway'' and ``in-demand industry sector or 
occupation'' to provide additional clarity concerning this requirement.
    Comments: Some commenters requested career pathways and sector 
strategies be addressed in State Plans and requested further definition 
of career pathways. Another commenter requested that State Plans 
include descriptions about credentialing and integrating credentialing 
with sector partnerships.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to these comments. The WIOA State Plan ICR 
already includes requirements for the State to describe both its sector 
and career pathways strategy in section (II)(c), so it already supports 
the inclusion of credentialing and its integration with sector and 
career pathways strategies. Although the Departments did not revise the 
WIOA State Plan ICR to include definitions of ``career pathways'' and 
``sector partnerships,'' the Departments did add statutory citations 
for the definitions of those terms.
    Comments: Commenters said the language of section (II)(c)(2) is 
more detailed than the requirements under WIOA sec. 102(b)(1)(E), which 
the commenters said only references the alignment between core programs 
and ``other resources available to the State.''
    Departments' Response: The Departments agree with this comment, and 
section IV has been revised in the WIOA State Plan ICR to require a 
description of the joint planning and coordination among the core 
programs and with other required partners and other programs and 
activities included in the Unified or Combined State Plan.
    Comments: A commenter said the Departments should clarify the 
intended ``gaps'' mentioned in the final sentence of section II(c)(2).
    Departments' Response: The Departments clarify the meaning in the 
final sentence of section (II)(c)(2) by changing the word ``gaps'' to 
``weaknesses'' and by adding a reference to section II(a)(2) to explain 
what analysis should be taken into account for this requirement. 
However, the Departments decline to add a reference to section 
II(a)(1)(B)(iv), since the requirement is specifically regarding the 
strengthening of workforce development activities.
    Comments: A commenter stated that State strategy should unify wrap-
around services across programs.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment, since section III(a)(2)(C) 
of the WIOA State Plan ICR already requires coordination of supportive 
services (wrap-around services) among programs.
    Comments: Another commenter recommended amending language, which 
clarifies that States can and should be coordinating and aligning 
services across programs in a manner that achieves the goals of 
industry and sector partnerships. The same commenter recommended 
strengthening the language to clarify that the description required is 
not limited to direct employer services, but should also include any 
other programs and activities that will support service delivery to 
employers.
    Departments' Response: The Departments concur with this suggestion 
to reinforce the importance of industry and sector partnerships and 
have amended the requirement. With respect to the comment concerning 
service delivery to employers, the Departments conclude that the 
language is sufficient as originally written to include both direct and 
indirect services to employers.
    Comments: A commenter was unclear as to the source of the 
requirement that the State outline additional strategies for 
coordinating ``services to employers.''
    Departments' Response: The Departments conclude that both the State 
and local governments are partners in developing strategies for serving 
employers. Using the authority WIOA grants to the Secretaries to add 
additional operational planning elements as appropriate, the 
Departments chose to include a requirement around serving employers 
since they are a critical customer.
    Comments: Several commenters supported extending the requirement to 
cover a broader range of providers than community colleges and area 
career and technical education (CTE) schools, but noted that there is 
no formal definition of the term ``education and training providers'' 
under WIOA.
    Departments' Response: The Departments agree with this comment and 
revised section III(a)(2) of the WIOA State Plan ICR to include in 
section III(a)(2)(E) a separate requirement for engagement with 
community colleges and career and technical education schools as 
required by sec. 102(b)(2)(B)(iv) of WIOA. The Departments included in 
section

[[Page 55992]]

III(a)(2)(F) a separate element for engagement with other education and 
training providers because such coordination is necessary to have a 
successful strategy for the provision of services.
    Comments: A commenter requested that the listed examples in section 
III(a)(2)(E) include community rehabilitation organizations (CROs). The 
commenter noted that frequently individuals with disabilities enter 
into CROs after completing high school, and these CROs are tasked with 
teaching individuals with disabilities job skills with the expectation 
of acquiring employment in the community.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment because CROs are not solely 
education/training entities. Nevertheless, States may address CROs in 
their plans.
    Comments: A commenter suggested adding a subsection to section 
III(b) of the WIOA State Plan ICR that includes a description of 
proposed benchmarks for the negotiated amounts and/or percentages that 
each one-stop partner that is a unit of State government will 
contribute to the local one-stop delivery system costs. The commenter 
said that including this element will provide for better coordination 
and more transparency in the negotiation of shared costs.
    Departments' Response: The Departments concur that the inclusion of 
information on one-stop partner cost sharing arrangements in the State 
Plan will provide for better coordination and more transparency in the 
negotiation of shared costs. However, the Departments anticipate that 
States will not be ready to provide their guidelines in the initial 
Unified or Combined State Plans that take effect July 1, 2016. Instead, 
the Departments revised section III(b)(2) of the WIOA State Plan ICR to 
require information about the State's process for developing guidelines 
and benchmarks in the initial Unified or Combined State Plan, and 
require the guidelines when the State submits a modification to its 
State Plan in PY 2018.
    Comments: Another commenter recommended emphasizing the role of 
local and regional planning in establishing appropriate assessment 
standards.
    Departments' Response: The Departments concur with the comment with 
minor modifications and made a change to the WIOA State Plan ICR. The 
Departments amended the requirement that ``such State assessments 
should take into account local and regional planning goals,'' and also 
added ``broken down by State and local area.''
    Comments: A commenter agreed with the importance of the assessment 
of core programs and one-stop partner programs based on accountability 
measures, but asserted that not all core programs currently collect the 
same performance information. The commenter requested clarification on 
what constitutes previous assessment results for the preceding 2 years, 
noting that there may not be a formal assessment available in States 
that were previously granted waivers of the requirement to conduct 
evaluations under WIA. The commenter also requested clarification on 
what constitutes elements required to be included in the assessments 
for the other core programs.
    Departments' Response: The Departments agree and made a change to 
the WIOA State Plan ICR as a result of this comment. The previous 2-
year period referenced in sec. 116 of WIOA and in section III(b)(4) of 
the WIOA State Plan ICR should be implemented for the first time at the 
2-year plan modification cycle because assessments of WIOA programs 
will not be available before that time. Therefore, clarifying language 
has been added.
    Comments: Another commenter requested the Departments to require 
States to provide a description of a clearly defined management 
reporting structure for State merit staff.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment because requiring a 
reporting structure for merit staff imposes an unnecessary burden on 
States. However, States may elect to develop such a policy and include 
it in its State Plan.
    Comments: A commenter urged the Departments to require that 
assessments document how each program will ensure not only physical 
accessibility but programmatic accessibility, including specific 
examples of how WIOA sec. 188 regulations are being met.
    Departments' Response: The Departments agree that compliance with 
physical and programmatic accessibility requirements is critical and 
have required States to provide how this will be achieved in section 
III(b)(8) of the WIOA State Plan ICR and through the common assurances 
in section V. Therefore, a change in the WIOA State Plan ICR is not 
needed.
    Comments: Another commenter supported efforts to improve 
coordination across programs and recognized that integrated data 
systems are an important step in achieving this goal. However, the 
commenter was concerned that achieving this goal will be expensive and 
challenging for States in light of State budget crises and declining 
Federal resources. This commenter proposed adding language that 
clarifies that States are not required to make such efforts.
    Departments' Response: The Departments decline to revise the WIOA 
State Plan ICR not to require States to make efforts to integrate data 
systems. Under WIOA sec. 101(d)(8), the State WDB is required to assist 
the Governor with ``the development of strategies for aligning 
technology and data systems across one-stop partner programs to enhance 
service delivery and improve efficiencies in reporting on performance 
accountability measures (including the design and implementation of 
common intake, data collection, case management information, and 
performance accountability measurement and reporting processes and the 
incorporation of local input into such design and implementation, to 
improve coordination of services across one-stop partner programs)'' 
and under WIOA sec. 102(b)(2)(C)(v)(I), the State Plan must explain 
``how the lead State agencies with responsibility for the 
administration of the core programs will align and integrate available 
workforce and education data on core programs, unemployment insurance 
programs, and education through postsecondary education.'' Due to these 
statutory requirements, States must develop a plan for aligning and 
integrating data systems.
    Comments: A commenter indicated that moving to true 
interoperability and integration of data management systems would 
likely require substantial outlays of time and money that States may 
not be able to meet, especially in a time of level or declining Federal 
resources.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment since WIOA requires States 
to have a plan for aligning and integrating data systems.
    Comments: Another commenter said that States should establish a 
reasonable timeline for data alignment and integration.
    Departments' Response: The WIOA State Plan ICR, as written, permits 
States to establish a ``reasonable timeline'' as part of their plans 
for achieving data system alignment and integration. Therefore, a 
change to the collection is not needed.
    Comments: The same commenter also said the Departments and State 
Plans should both report a single score for each of the six performance 
indicators,

[[Page 55993]]

but only after 4 years of WIOA implementation.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment. WIOA requires that each 
State establish levels of performance for each of the indicators of 
performance for each of the programs.
    Comments: A commenter suggested that Veterans Priority of Service 
(POS) be addressed in the State Plan and that POS should be required 
for service-connected and non-service connected disabilities.
    Departments' Response: The Departments decline to make the 
requested change because the WIOA State Plan ICR requires States to 
describe how they implement Veterans POS in their State (see section 
III(b)(7)). Moreover, under 38 U.S.C. 4215, all veterans, including 
disabled veterans with both service and non-service connected 
disabilities, receive POS for all employment and training programs 
funded in whole or in part by DOL.
    Comments: A few commenters requested clarification on the 
Addressing the Accessibility of the One-Stop Delivery System for 
Individuals with Disabilities requirement in light of a parenthetical 
sentence at the end of the section indicating that this requirement 
applies to core programs, rather than the one-stop delivery system 
partners referenced earlier in the requirement.
    Departments' Response: The Departments make a change to section 
III(b)(8) of the WIOA State Plan ICR as a result of the comment. The 
Departments concur with the comment that the parenthetical in the 
proposed WIOA State Plan ICR could create confusion about the 
requirements of WIOA sec. 188 and so it was removed. WIOA sec. 
102(b)(2)(C)(vii) requires that the Unified State Plan contain a 
description of how one-stop operators and one-stop partners, in 
addition to core programs, will comply with sec. 188 of WIOA and the 
applicable provisions of the Americans with Disabilities Act of 1990. 
Per WIOA sec. 103(b)(1), this information must also be included in any 
Combined State Plan.
    Comments: Some commenters said States should be required to 
describe the methods used for joint planning and coordination of the 
core programs, even where the State opts to submit a Unified State Plan 
rather than a Combined State Plan.
    Departments' Response: The Departments concur that discussion of 
coordination with core programs and one-stop partners is helpful to 
ensure successful joint planning and coordination for both Unified and 
Combined State Plans, rather than just the Combined State Plan as had 
been proposed. To that end, the Departments added specific reference to 
the Unified State Plan to section IV of the WIOA State Plan ICR.
    Comments: A few commenters said the review and approval requirement 
should be extended to all agencies or entities with responsibility for 
Combined State Plan partner programs.
    Departments' Response: The Departments maintain that the WIOA State 
Plan ICR as written, and as required by WIOA, provides all programs the 
opportunity to review and comment on the State Plan. WIOA does not 
require Combined State Plan partner programs to approve the Combined 
State Plan prior to its submission.
    Comments: A commenter said the State Plan process should also 
include the expertise and experience of partner organizations that 
serve individuals with barriers to employment because they are 
important partners in the public workforce system.
    Departments' Response: The Departments concur that the State Plan 
process should include the expertise and experience of partner 
organizations that serve individuals with barriers to employment 
because they are important partners in the public workforce system. To 
that end, the Departments have added specific mention of organizations 
serving individuals with barriers to employment to the common 
assurances in section V(4)(a) of the WIOA State Plan ICR. As such, 
these organizations are now specifically listed as being among the 
stakeholders who should have the opportunity to comment on the Unified 
or Combined State Plan.
    Comments: A commenter requested a specific number of days for 
public comment on the State Plan.
    Departments' Response: The Departments decline to set a number of 
days for public comment because States may use their own discretion in 
providing a reasonable period of time for public comment. Many States 
have State laws or regulations that govern the amount of time that must 
be provided for public comment.
    Comments: Another commenter requested clarification on whether 
there are cost limitations for contributions and whether such 
contributions shall be factored into infrastructure costs.
    Departments' Response: The Departments conclude that the requested 
information is not appropriate to the WIOA State Plan ICR so no change 
was made. Further specifics on infrastructure costs are provided in the 
preamble for the Joint WIOA Final Rule at part 678 and will be provided 
in future joint guidance.
    Comments: A commenter recommended including explicit reference to 
other people with barriers to employment, including individuals with 
disabilities, as well as clarification that priority of service to 
veterans remains in place.
    Departments' Response: Section 3(24) of WIOA defines an 
``individual with a barrier to employment,'' which includes many 
different populations. Individuals with disabilities are specifically 
identified in sec. 3(24)(D) of WIOA. Given the exclusive list of 
populations contained in that definition, there is no statutory 
authority for the Departments to add other populations to that 
definition or to the WIOA State Plan ICR. Requirements for priority of 
service for veterans remain in place and are covered in section 
III(b)(7) of the WIOA State Plan ICR.
    Comments: Another commenter recommended adding the following Common 
Assurance: ``The State will negotiate in good faith with the Local 
Boards its portion of the shared costs of the one-stop system, in 
accordance with WIOA sec. 121, on behalf of all one-stop partners that 
are units of State government.''
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment. The Departments expect that 
States will negotiate in good faith with Local WDBs on one-stop cost 
sharing without requiring an assurance that they will do so.
    Comments: A commenter said States should be required to describe 
how they will meet the statutory requirement to use statewide funds to 
support local areas by providing information on, and support for, the 
effective development, convening, and implementation of industry or 
sector partnerships.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment. Other areas of the State 
Plan requirements provide adequate information on how the State intends 
to implement sector partnerships, and the Departments have concluded it 
appropriate to maintain the requirement regarding use of statewide 
funds broad enough for States to describe a number of uses of those 
funds, required and allowable.
    Comments: Some commenters on 20 CFR 683.130 of the DOL WIOA NPRM 
were concerned with the Governor's approval of the adult-dislocated 
worker funds transfer request and whether the Governor would complete 
the request

[[Page 55994]]

timely or would unreasonably deny a request.
    Departments' Response: The Departments concur with the comment and 
added a requirement to include State-developed criteria for 
transferring adult and dislocated worker funds in the plan in order to 
provide process transparency to local areas that may request funds 
transfers.
    Comments: A commenter acknowledged the need to differentiate 
training models enumerated in paragraph (b)(1) from apprenticeships, 
but said the name ``employer-based'' is more appropriate than the term 
``alternative'' in reflecting the widespread use of programs.
    Departments' Response: The Departments agree that the language in 
section VI(b)(1) of the WIOA State Plan ICR, which governs program-
specific requirements for the adult and dislocated worker programs, 
should reflect more specifically the training model, and have amended 
the requirement to replace ``alternative'' with ``work-based'' since 
``work-based'' more accurately captures the variety of training models 
than ``employer-based.''
    Comments: Another commenter suggested requiring a policy on 
criteria for selecting employers for work-based training.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment. Since the Departments 
require States to address work-based learning approaches, requiring a 
specific policy on employer criteria is not needed because the 
description of the State's approach will provide sufficient information 
and also provide information to stakeholders.
    Comments: A commenter said it was unclear whether the description 
of the Training Provider Eligibility Procedure was for initial 
eligibility, subsequent eligibility, or both.
    Departments' Response: The Departments concur with the commenter 
that the proposed language was unclear. Therefore, the Departments 
revised the program-specific requirements in the WIOA State Plan ICR 
under section VI in subsection (b)(3) for the adult and dislocated 
worker programs to specify that the State must provide its training 
provider eligibility procedure for both initial and continued 
eligibility.
    Comments: A commenter asked if it is the intent for the State to 
describe how the State ensures that all 14 program elements required 
under the youth program are carried out, or some other objective.
    Departments' Response: The Departments agree with the concern and 
replaced the language in the WIOA State Plan ICR under section VI in 
subsection (c)(2), thereby offering more clarity.
    Comments: Another commenter said WIOA title I, subtitle B should be 
expanded to include assurance that States have a written publicly 
available policy that ensures adult program funds provide a priority in 
the delivery of career and training services to individuals who are 
basic skills deficient.
    Departments' Response: The Departments concur that more information 
on the implementation of the priority in the use of adult funds for 
training services and the individualized career services outlined in 
WIOA sec. 134(c)(2)(A)(xii) would be useful, and have included a new 
requirement in the WIOA State Plan ICR under section VI in subsection 
(b)(4) for the adult program to describe how the State will implement 
and monitor the priority of service provisions for public assistance 
recipients, other low-income individuals, or individuals who are basic 
skills deficient in accordance with the requirements of WIOA sec. 
134(c)(3)(E), which applies to training services and individualized 
career services funded by the adult formula program. However, the 
Departments did not add a requirement that the policy be made publicly 
available because the State Plan is already required to be made 
publicly available for comment.
    Comments: A commenter submitted a comment related to the priority 
for use of adult funds stating that DOL should require that State and 
local planning efforts utilize the most current Census and 
administrative data available to develop estimates of each priority 
service population in their planning efforts, and update these data 
year to year. The commenter stated that these data should be utilized 
in Federal reviews of State Plans to ensure that system designs and 
projected investments are equitably targeted to service-priority 
populations and that they should also be used to benchmark system 
performance in actual implementation of the priority for the use of 
adult funds from year to year.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment. The Departments maintain 
that the priority for use of adult funds can be made without the use of 
Census data, and the approach suggested by the commenter would be 
overly burdensome for both State and Federal staff.
    Comments: Another commenter said use of the term identification of 
UI eligibility issues does not align with language in WIOA, asserting 
that there is a fundamental difference between providing assistance in 
filing for benefits and determining eligibility.
    Departments' Response: The Departments made a change to the WIOA 
State Plan ICR in response to this comment by adding ``and referral to 
UI staff for adjudication'' to the WIOA State Plan ICR under section VI 
in subsection (a)(2) for the Wagner-Peyser Act Employment Service 
program. The Departments' intention with the language referenced by the 
commenter was not to de-emphasize reemployment services, but rather to 
emphasize the importance of enhanced connection between UI and ES/WIOA 
staff, and reemphasize the importance of providing reemployment 
services to UI claimants and other unemployed individuals. Both WIOA 
title I and the Wagner-Peyser Act (as amended by WIOA title III) 
contain new language regarding how these programs may provide services 
to UI claimants.
    Comments: Numerous commenters requested reintroducing the 
requirement for SWAs to consult the NFJP grantees as was required in 
the regulations at 20 CFR 653.107(d).
    Departments' Response: In response to this comment, the Departments 
make a change to the WIOA State Plan ICR under section VI in subsection 
(e)(4) for the Wagner-Peyser Act Employment Service program because it 
will foster greater collaboration between the SWAs and the NFJP 
grantees.
    Comments: A few commenters said there appears to be no specific 
element relating to integrated education and training, as required 
under WIOA sec. 102(b)(2)(D)(ii)(II)(dd), and recommended that the 
instrument be amended to include a requirement that States describe how 
they will fund and support such activities.
    Departments' Response: Under section VI of the WIOA State Plan ICR 
for the AEFLA (title II) program, States have an opportunity to 
describe in subsection (b) how they will fund eligible providers to 
establish or operate adult education and literacy activities, including 
integrated education and training. The Departments make a small 
clarification to the WIOA State Plan ICR.
    Comments: A commenter asked for clarification on whether ``eligible 
agency'' as used in the Aligning of Content Standards section refers to 
State agencies, Local WDBs, and/or adult education providers (WIOA, 
AEFLA, etc.).

[[Page 55995]]

    Departments' Response: The definition of ``eligible agency'' for 
the AEFLA program is located in sec. 203(3) of WIOA.
    Comments: A couple of commenters provided input on section (d), 
Integrated English Literacy and Civics Education Program. A commenter 
expressed concern that the language used in the fourth paragraph of (d) 
fails to acknowledge the populations enrolled in integrated literacy 
and civics education courses who are already employed and working 
towards job advancement and literacy gains. The commenter stated that 
plans for program design and success should include not only job 
placement outcomes but also job retention and advancement measures. The 
other commenter said the Departments should provide flexibility for 
program operators to determine the appropriate services to meet the 
needs of individual participants, which may not include workforce 
preparation and training.
    Departments' Response: The Departments delete the paragraph and 
move it to the AEFLA program certifications and assurances section, 
where the language outlining the two requirements for design of 
Integrated English Literacy and Civics Education programs will remain 
included as part of the assurance. This language expresses the specific 
requirements for design of these programs in sec. 243(c)(1) and (2) of 
WIOA.
    Comments: A commenter applauded the attention that is given to 
reporting coordination and collaboration between State VR agencies and 
relevant entities, specifically inter-agency and inter-department 
cooperatives.
    Departments' Response: No change to the WIOA State Plan ICR is 
needed as a result of this comment.
    Comments: Another commenter suggested that the State should 
describe the manner in which the designated State agency establishes 
cooperative agreements with private non-profit VR service providers. 
The same commenter stated that the instrument should include a 
reference to employers who are Federal contractors to assist with their 
compliance with Rehabilitation Act sec. 503 and Vietnam Era Veterans' 
Readjustment Assistance Act (VEVRAA). The same commenter also stated 
that the instrument should include a section under (j)(1) for those who 
are veterans with non-service-connected disabilities on public 
assistance. Lastly, the same commenter stated that data should be 
disaggregated by age and disability.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment since only those elements 
described in sec. 101(a) of the Rehabilitation Act are required to be 
included in the VR services portion of the Unified or Combined State 
Plan.
    Comments: A couple of commenters expressed concern over whether 
States will be able to meet current State Plan submission deadlines. 
One commenter expressed concern over limitations for tracking client 
earnings in the 2nd and 4th quarter due to the lack of data agreements 
at the Federal level. The other commenter noted that some core partners 
do not collect the information needed to establish a reasonable 
baseline of comparison and was uncertain if the requested information 
needed to complete the table will be available in time to meet the 
State Plan submission deadline.
    Departments' Response: The Departments make a change to the WIOA 
State Plan ICR in response to these comments by including specific 
instructions for how to populate the chart for the first 2 years of the 
plan to account for a lack of data availability.
    Comments: A commenter recommended developing crosswalks of 
substantially similar plan elements and allowing States to respond to 
program-specific elements through incorporation by reference of 
responses to the Combined State Plan.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment. Although the Departments 
agree that identical or similar plan provisions relative to required 
and optional Combined State Plan partner programs may be ``integrated'' 
or ``synthesized'' together in the Combined State Plan document, the 
Departments decline to develop crosswalks of those elements at this 
time. However, in responding to a program-specific requirement that may 
be duplicative of an element addressed in other parts of a Combined 
State Plan, a State may clearly identify where it thinks it has 
responded to the requirement in the plan document. If the provision is 
not so identified, then the Federal task of reviewing the document and 
rendering a decision on completeness may become a major challenge and 
burdensome to the State and Federal staff.
    Comments: A joint submission from a couple of commenters requested 
clarification on the use of the term ``the State'' as it pertains to 
the inclusion of the Carl D. Perkins Career and Technical Education Act 
in a Combined State Plan, per the supplemental document entitled, 
``Supplement to Workforce Innovation and Opportunity Act- program 
specific.'' The commenters asserted that the document uses ``the 
State'' in lieu of the statutorily required term ``the State eligible 
agency,'' at least as it pertains to what entity is responsible for the 
Perkins Act's participation in a Combined State Plan.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment. The Departments were not 
seeking comment on the program-specific elements for the Perkins 
section of the WIOA State Plan ICR since it is a separately approved 
data collection.
    Comments: A commenter referred to the States' total estimated 
burden, which is $141,708, and noted that the Federal burden is 
$240,987. The commenter asserted that, unless the $141,708 value of 
respondent time is for each of the six core program respondents, the 
estimated burden for States to fulfill the program-specific 
requirements for all six core programs appears to be significantly 
underestimated.
    Departments' Response: The Departments concur with the commenter 
that the burden estimated for the Federal review was overstated 
relative to the State burden. After further analysis of the burden 
estimate, the Departments corrected a mathematical error in item #14 
that failed to annualize State Plan receipt as was done for the State 
burden estimate.
    Comments: Another commenter stated that the WIOA State Plan ICR 
provides a reasonable synthesis of the required elements and provides 
States with sufficient guidance, but certain elements could be 
strengthened to ensure that States and programs are moving towards true 
alignment across programs.
    Departments' Response: The Departments decline to make a change to 
the WIOA State Plan ICR because the comment did not suggest one.
    Comments: A commenter stated that the draft instrument responds to 
many of its concerns, but expressed continued reservations that certain 
State Plan elements may not truly reflect the experiences of, or 
respond to the needs of, individuals with disabilities.
    Departments' Response: The Departments decline to make a change to 
the WIOA State Plan ICR in response to the comment because the comment 
did not suggest one.
    Comments: Another commenter commended the Departments' 
collaboration on the instrument but also urged the inclusion of 
entities that serve individuals with barriers to employment, including 
immigrants, in outreach and technical assistance efforts.

[[Page 55996]]

    Departments' Response: The Departments decline to make a change to 
the WIOA State Plan ICR in response to the comment because the comment 
did not suggest one.
    Comments: A commenter appreciated several elements of the WIOA 
legislation (e.g., adding adult education as a core program, the bill's 
emphasis on college and career readiness) and asserted that the need 
for additional funding has never been greater.
    Departments' Response: The Departments decline to make a change to 
the WIOA State Plan ICR in response to the comment because the comment 
did not suggest one.
    Comments: Another commenter opposed ``the program'' in general.
    Departments' Response: The Departments decline to make a change to 
the WIOA State Plan ICR in response to the comment because the comment 
did not suggest one.
    Comments: A commenter recommended that certain pages of the SCSEP 
component related to SCSEP operations be deleted from the SCSEP 
Combined State Plan requirements.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment. The Departments are not 
seeking comment on these data elements since they are covered by a 
separate collection number governing the SCSEP data collection.
    Comments: A comment that was submitted through the NPRM stated that 
the State Plan should require evidence-based strategies as outlined in 
the Job-Driven Training reports.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment since the instrument already 
reflects the content of the job-driven report.
    Comments: Another comment that was submitted through the NPRM 
recommended requiring States to include in the State Plan how they will 
use measurable skill gains and a list of the measurable skill gains 
they will use.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment since measurable skill gains 
are addressed in the WIOA Joint Performance ICR.
    Comments: The final comment that was submitted through the NPRM 
requested guidance on the burden of technology upgrades.
    Departments' Response: The Departments decline to change the WIOA 
State Plan ICR in response to this comment but will take it into 
account for future guidance or technical assistance.
    To see a more detailed view of the responses to public comments, 
refer to item 8 of the supporting statements of the information 
collections.

E. Executive Order 13132 (Federalism)

    E.O. 13132 requires Federal agencies to ensure that the principles 
of Federalism established by the Framers of our Constitution guide the 
executive departments and agencies in the formulation and 
implementation of policies and to further the policies of the Unfunded 
Mandates Reform Act. Further, agencies must strictly adhere to 
constitutional principles. Agencies must closely examine the 
constitutional and statutory authority supporting any action that would 
limit the policy-making discretion of the States and they must 
carefully assess the necessity for any such action. To the extent 
practicable, State and local officials must be consulted before any 
such action is implemented. Section 3(b) of the E.O. further provides 
that Federal agencies must implement regulations that have a 
substantial direct effect only if statutory authority permits the 
regulation and it is of national significance. The Departments have 
reviewed the Joint WIOA Final Rule in light of these requirements and 
have concluded that, with the enactment of WIOA and its clear 
requirement to publish national implementing regulations, E.O. sec. 
3(b) has been reviewed and its requirement satisfied.
    Accordingly, the Departments have reviewed this WIOA-required Joint 
Final Rule and have concluded that the rulemaking has no Federalism 
implications. The Joint WIOA Final Rule, as noted above, has no 
substantial direct effects on States, on the relationships between the 
States, or on the distribution of power and responsibilities among the 
various levels of government as described by E.O. 13132. Therefore, the 
Departments have concluded that this Final Rule does not have a 
sufficient Federalism implication to warrant the preparation of a 
summary impact statement.

F. Unfunded Mandates Reform Act of 1995

    Comments: In response to the NPRM, the Departments received some 
comments that addressed unfunded mandates. A few commenters asserted 
that the requirements to collect data and to report performance are 
unfunded mandates. One of the commenters asserted that the cost in 
terms of time and technology for integrating individual records across 
multiple data systems at the State level is very high. Another one of 
the commenters suggested that the rule included other unfunded 
mandates, such as sub-minimum wage tracking and pre-employment 
transition services set-asides. One commenter added that although grant 
funding will be provided by the Federal government, in some States the 
grant funds provided for implementation are insufficient to reimburse 
the States.
    Departments' Response: The Departments acknowledge the commenters' 
concerns and detail the cost burden associated with this Joint WIOA 
Final Rule in Section V.A (Rulemaking Analyses and Notices). Grant 
funding is provided annually to all programs authorized under WIOA and 
that funding will be used to cover the costs of implementing this rule.
    With respect to the comments pertaining to requirements under the 
VR program for the VR agencies to report data regarding individuals 
employed at subminimum wage and for States to reserve at least 15 
percent of their VR allotment to provide pre-employment transition 
services to students with disabilities, ED provides descriptions of 
these cost burdens in the RIA of the VR program-specific Final Rule 
published elsewhere in this issue of the Federal Register.
    The Unfunded Mandates Reform Act of 1995 directs agencies to assess 
the effects of Federal regulatory actions on State, local, and tribal 
governments, and the private sector. A Federal mandate is any provision 
in a regulation that imposes an enforceable duty upon State, local, or 
tribal governments, or imposes a duty upon the private sector that is 
not voluntary.
    WIOA contains specific language supporting employment and training 
activities for Indian, Alaska Natives, and Native Hawaiian individuals. 
These program requirements are supported, as is the WIOA workforce 
development system generally, by Federal formula grant funds and 
accordingly are not considered unfunded mandates. Similarly, Migrant 
and Seasonal Farmworker activities are authorized and funded under the 
WIOA program as was done under the WIA program. The States are mandated 
to perform certain activities for the Federal government under WIOA and 
will be reimbursed (grant funding) for the resources required to 
perform those activities. The same process and grant relationship 
exists between States and Local WDBs under the WIA program and must 
continue under the WIOA program as identified in this Final Rule.

[[Page 55997]]

    WIOA contains language-establishing procedures regarding the 
eligibility of training providers to receive funds under the WIOA 
program and contains clear State information collection requirements 
for eligible training providers (e.g., submission of appropriate, 
accurate, and timely information). A decision by a private training 
entity to participate as a provider under the WIOA program is purely 
voluntary and, therefore, information collection burdens do not impose 
a duty on the private sector that is not voluntarily assumed.
    Following consideration of these factors, the Departments concluded 
that the Joint WIOA Final Rule contained no unfunded Federal mandates, 
which are defined in 2 U.S.C. 658(6) to include either a ``Federal 
intergovernmental mandate'' or a ``Federal private sector mandate.''

G. Plain Language

    E.O. 12866 and E.O. 13563 require regulations to be written in a 
manner that is easy to understand.
    Comments: An individual had difficulty understanding many of the 
provisions of the proposal and said that the definitions sounded like 
the ``fine print'' of a contract.
    Departments' Response: The overall format of these WIOA regulations 
reflects the Departments' commitment to writing regulations that are 
reader-friendly. The Departments have attempted to make this Final Rule 
easy to understand. For example, the regulatory text is presented in a 
``question and answer'' format and organized consistent with WIOA. In 
consideration of the foregoing, the Departments have concluded that the 
Departments have drafted this Joint WIOA Final Rule in plain language.

H. Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act, enacted as part of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 
2681) requires the assessment of the impact of this rule on family 
well-being. A rule that is determined to have a negative effect on 
families must be supported with an adequate rationale. The Departments 
have assessed this Joint WIOA Final Rule in light of this requirement 
and concluded that the Joint Final Rule will not have a negative effect 
on families.

I. Executive Order 13175 (Indian Tribal Governments)

    The Departments reviewed the Joint WIOA Final Rule under the terms 
of E.O. 13175 and DOL's Tribal Consultation Policy and have concluded 
the final regulation would have tribal implications as the final 
regulations have substantial direct effects on one or more Indian 
tribes, the relationship between the Federal government and Indian 
tribes, or the distribution of power and responsibilities between the 
Federal government and Indian tribes. Therefore, as described in the 
preamble to the NPRM, the Departments carried out several consultations 
with tribal institutions, including tribal officials, which allowed the 
tribal officials to provide meaningful and timely input into the 
Departments' proposals. Additionally, through the Notice and Comment 
rulemaking process, the Departments received comments on the programs 
and provisions in WIOA that have tribal implications and the 
Departments have responded to these comments throughout the preamble to 
the Final Joint and DOL-only regulations.
    In addition to the comments received through its Notice and Comment 
rulemaking process, the Department of Labor received feedback from the 
INA community and the public prior to the publication of the NPRM. This 
feedback was summarized in the NPRM at 80 FR 20626-28.

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

    The Departments have concluded that this Joint WIOA Final Rule is 
not subject to E.O. 12630, Governmental Actions and Interference with 
Constitutionally Protected Property Rights, because it does not involve 
implementation of a policy with takings implications.

K. Executive Order 12988 (Civil Justice Reform)

    This Joint WIOA Final Rule was drafted and reviewed in accordance 
with E.O. 12988, Civil Justice Reform, and the Departments have 
concluded that the Joint Final Rule will not unduly burden the Federal 
court system. The Joint WIOA Final Rule was written to minimize 
litigation and, to the extent feasible, provide a clear legal standard 
for affected conduct. In addition, the Joint WIOA Final Rule has been 
reviewed to eliminate drafting errors and ambiguities.

L. Executive Order 13211 (Energy Supply)

    This Joint WIOA Final Rule was drafted and reviewed in accordance 
with E.O. 13211, Energy Supply. The Departments have concluded the 
Joint WIOA Final Rule will not have a significant adverse effect on the 
supply, distribution, or use of energy and is not subject to E.O. 
13211.

List of Subjects

20 CFR Parts 676, 677, and 678

    Employment, Grant programs--labor.

34 CFR Part 361

    Administrative practice and procedure, Grant programs--education, 
Grant programs--social programs, Reporting and recordkeeping 
requirements, Vocational rehabilitation.

34 CFR Part 463

    Adult education, Grant programs--education, Reporting and 
recordkeeping requirements.

Department of Labor

Employment and Training Administration

20 CFR Chapter V

    For the reasons stated in the preamble, ETA amends 20 CFR chapter V 
as follows:

0
1. Add part 676 to read as follows:

PART 676--UNIFIED AND COMBINED STATE PLANS UNDER TITLE I OF THE 
WORKFORCE INNOVATION AND OPPORTUNITY ACT

Sec.
676.100 What are the purposes of the Unified and Combined State 
Plans?
676.105 What are the general requirements for the Unified State 
Plan?
676.110 What are the program-specific requirements in the Unified 
State Plan for the adult, dislocated worker, and youth programs 
authorized under Workforce Innovation and Opportunity Act title I?
676.115 What are the program-specific requirements in the Unified 
State Plan for the Adult Education and Family Literacy Act program 
authorized under Workforce Innovation and Opportunity Act title II?
676.120 What are the program-specific requirements in the Unified 
State Plan for the Employment Service program authorized under the 
Wagner-Peyser Act, as amended by Workforce Innovation and 
Opportunity Act title III?
676.125 What are the program-specific requirements in the Unified 
State Plan for the State Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as 
amended by Workforce Innovation and Opportunity Act title IV?

[[Page 55998]]

676.130 What is the development, submission, and approval process of 
the Unified State Plan?
676.135 What are the requirements for modification of the Unified 
State Plan?
676.140 What are the general requirements for submitting a Combined 
State Plan?
676.143 What is the development, submission, and approval process of 
the Combined State Plan?
676.145 What are the requirements for modifications of the Combined 
State Plan?

    Authority: Secs. 102, 103, and 503, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).


Sec.  676.100  What are the purposes of the Unified and Combined State 
Plans?

    (a) The Unified and Combined State Plans provide the framework for 
States to outline a strategic vision of, and goals for, how their 
workforce development systems will achieve the purposes of the 
Workforce Innovation and Opportunity Act (WIOA).
    (b) The Unified and Combined State Plans serve as 4-year action 
plans to develop, align, and integrate the State's systems and provide 
a platform to achieve the State's vision and strategic and operational 
goals. A Unified or Combined State Plan is intended to:
    (1) Align, in strategic coordination, the six core programs 
required in the Unified State Plan pursuant to Sec.  676.105(b), and 
additional Combined State Plan partner programs that may be part of the 
Combined State Plan pursuant to Sec.  676.140;
    (2) Direct investments in economic, education, and workforce 
training programs to focus on providing relevant education and training 
to ensure that individuals, including youth and individuals with 
barriers to employment, have the skills to compete in the job market 
and that employers have a ready supply of skilled workers;
    (3) Apply strategies for job-driven training consistently across 
Federal programs; and
    (4) Enable economic, education, and workforce partners to build a 
skilled workforce through innovation in, and alignment of, employment, 
training, and education programs.


Sec.  676.105  What are the general requirements for the Unified State 
Plan?

    (a) The Unified State Plan must be submitted in accordance with 
Sec.  676.130 and WIOA sec. 102(c), as explained in joint planning 
guidelines issued by the Secretaries of Labor and Education.
    (b) The Governor of each State must submit, at a minimum, in 
accordance with Sec.  676.130, a Unified State Plan to the Secretary of 
Labor to be eligible to receive funding for the workforce development 
system's six core programs:
    (1) The adult, dislocated worker, and youth programs authorized 
under subtitle B of title I of WIOA and administered by the U.S. 
Department of Labor (DOL);
    (2) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA and administered by the U.S. 
Department of Education (ED);
    (3) The Employment Service program authorized under the Wagner-
Peyser Act of 1933, as amended by WIOA title III and administered by 
DOL; and
    (4) The Vocational Rehabilitation program authorized under title I 
of the Rehabilitation Act of 1973, as amended by title IV of WIOA and 
administered by ED.
    (c) The Unified State Plan must outline the State's 4-year strategy 
for the core programs described in paragraph (b) of this section and 
meet the requirements of sec. 102(b) of WIOA, as explained in the joint 
planning guidelines issued by the Secretaries of Labor and Education.
    (d) The Unified State Plan must include strategic and operational 
planning elements to facilitate the development of an aligned, 
coordinated, and comprehensive workforce development system. The 
Unified State Plan must include:
    (1) Strategic planning elements that describe the State's strategic 
vision and goals for preparing an educated and skilled workforce under 
sec. 102(b)(1) of WIOA. The strategic planning elements must be 
informed by and include an analysis of the State's economic conditions 
and employer and workforce needs, including education and skill needs.
    (2) Strategies for aligning the core programs and Combined State 
Plan partner programs as described in Sec.  676.140(d), as well as 
other resources available to the State, to achieve the strategic vision 
and goals in accordance with sec. 102(b)(1)(E) of WIOA.
    (3) Operational planning elements in accordance with sec. 102(b)(2) 
of WIOA that support the strategies for aligning the core programs and 
other resources available to the State to achieve the State's vision 
and goals and a description of how the State Workforce Development 
Board (WDB) will implement its functions, in accordance with sec. 
101(d) of WIOA. Operational planning elements must include:
    (i) A description of how the State strategy will be implemented by 
each core program's lead State agency;
    (ii) State operating systems, including data systems, and policies 
that will support the implementation of the State's strategy identified 
in paragraph (d)(1) of this section;
    (iii) Program-specific requirements for the core programs required 
by WIOA sec. 102(b)(2)(D);
    (iv) Assurances required by sec. 102(b)(2)(E) of WIOA, including an 
assurance that the lead State agencies responsible for the 
administration of the core programs reviewed and commented on the 
appropriate operational planning of the Unified State Plan and approved 
the elements as serving the needs of the population served by such 
programs, and other assurances deemed necessary by the Secretaries of 
Labor and Education under sec. 102(b)(2)(E)(x) of WIOA;
    (v) A description of joint planning and coordination across core 
programs, required one-stop partner programs, and other programs and 
activities in the Unified State Plan; and
    (vi) Any additional operational planning requirements imposed by 
the Secretary of Labor or the Secretary of Education under sec. 
102(b)(2)(C)(viii) of WIOA.
    (e) All of the requirements in this part that apply to States also 
apply to outlying areas.


Sec.  676.110  What are the program-specific requirements in the 
Unified State Plan for the adult, dislocated worker, and youth programs 
authorized under Workforce Innovation and Opportunity Act title I?

    The program-specific requirements for the adult, dislocated worker, 
and youth programs that must be included in the Unified State Plan are 
described in sec. 102(b)(2)(D) of WIOA. Additional planning 
requirements may be explained in joint planning guidelines issued by 
the Secretaries of Labor and Education.


Sec.  676.115  What are the program-specific requirements in the 
Unified State Plan for the Adult Education and Family Literacy Act 
program authorized under Workforce Innovation and Opportunity Act title 
II?

    The program-specific requirements for the AEFLA program in title II 
that must be included in the Unified State Plan are described in secs. 
102(b)(2)(C) and 102(b)(2)(D)(ii) of WIOA.
    (a) With regard to the description required in sec. 
102(b)(2)(D)(ii)(I) of WIOA pertaining to content standards, the 
Unified State Plan must describe how the eligible agency will, by July 
1, 2016, align its content standards for adult education with State-
adopted challenging academic content standards under the Elementary and 
Secondary Education Act of 1965, as amended.
    (b) With regard to the description required in sec. 
102(b)(2)(C)(iv) of WIOA pertaining to the methods and

[[Page 55999]]

factors the State will use to distribute funds under the core programs, 
for title II of WIOA, the Unified State Plan must include--
    (1) How the eligible agency will award multi-year grants on a 
competitive basis to eligible providers in the State; and
    (2) How the eligible agency will provide direct and equitable 
access to funds using the same grant or contract announcement and 
application procedure.


Sec.  676.120  What are the program-specific requirements in the 
Unified State Plan for the Employment Service program authorized under 
the Wagner-Peyser Act, as amended by Workforce Innovation and 
Opportunity Act title III?

    The Employment Service program authorized under the Wagner-Peyser 
Act of 1933, as amended by WIOA title III, is subject to requirements 
in sec. 102(b) of WIOA, including any additional requirements imposed 
by the Secretary of Labor under secs. 102(b)(2)(C)(viii) and 
102(b)(2)(D)(iv) of WIOA, as explained in joint planning guidelines 
issued by the Secretaries of Labor and Education.


Sec.  676.125  What are the program-specific requirements in the 
Unified State Plan for the State Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by Workforce Innovation and Opportunity Act title IV?

    The program specific-requirements for the vocational rehabilitation 
services portion of the Unified or Combined State Plan are set forth in 
sec. 101(a) of the Rehabilitation Act of 1973, as amended. All 
submission requirements for the vocational rehabilitation services 
portion of the Unified or Combined State Plan are in addition to the 
jointly developed strategic and operational content requirements 
prescribed by sec. 102(b) of WIOA.


Sec.  676.130  What is the development, submission, and approval 
process of the Unified State Plan?

    (a) The Unified State Plan described in Sec.  676.105 must be 
submitted in accordance with WIOA sec. 102(c), as explained in joint 
planning guidelines issued jointly by the Secretaries of Labor and 
Education.
    (b) A State must submit its Unified State Plan to the Secretary of 
Labor pursuant to a process identified by the Secretary.
    (1) The initial Unified State Plan must be submitted no later than 
120 days prior to the commencement of the second full program year of 
WIOA.
    (2) Subsequent Unified State Plans must be submitted no later than 
120 days prior to the end of the 4-year period covered by a preceding 
Unified State Plan.
    (3) For purposes of paragraph (b) of this section, ``program year'' 
means July 1 through June 30 of any year.
    (c) The Unified State Plan must be developed with the assistance of 
the State WDB, as required by Sec.  679.130(a) of this chapter and WIOA 
sec. 101(d), and must be developed in coordination with administrators 
with optimum policy-making authority for the core programs and required 
one-stop partners.
    (d) The State must provide an opportunity for public comment on and 
input into the development of the Unified State Plan prior to its 
submission.
    (1) The opportunity for public comment must include an opportunity 
for comment by representatives of Local WDBs and chief elected 
officials, businesses, representatives of labor organizations, 
community-based organizations, adult education providers, institutions 
of higher education, other stakeholders with an interest in the 
services provided by the six core programs, and the general public, 
including individuals with disabilities.
    (2) Consistent with the ``Sunshine Provision'' of WIOA in sec. 
101(g), the State WDB must make information regarding the Unified State 
Plan available to the public through electronic means and regularly 
occurring open meetings in accordance with State law. The Unified State 
Plan must describe the State's process and timeline for ensuring a 
meaningful opportunity for public comment.
    (e) Upon receipt of the Unified State Plan from the State, the 
Secretary of Labor will ensure that the entire Unified State Plan is 
submitted to the Secretary of Education pursuant to a process developed 
by the Secretaries.
    (f) The Unified State Plan is subject to the approval of both the 
Secretary of Labor and the Secretary of Education.
    (g) Before the Secretaries of Labor and Education approve the 
Unified State Plan, the vocational rehabilitation services portion of 
the Unified State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be 
approved by the Commissioner of the Rehabilitation Services 
Administration.
    (h) The Secretaries of Labor and Education will review and approve 
the Unified State Plan within 90 days of receipt by the Secretary of 
Labor, unless the Secretary of Labor or the Secretary of Education 
determines in writing within that period that:
    (1) The plan is inconsistent with a core program's requirements;
    (2) The Unified State Plan is inconsistent with any requirement of 
sec. 102 of WIOA; or
    (3) The plan is incomplete or otherwise insufficient to determine 
whether it is consistent with a core program's requirements or other 
requirements of WIOA.
    (i) If neither the Secretary of Labor nor the Secretary of 
Education makes the written determination described in paragraph (h) of 
this section within 90 days of the receipt by the Secretaries, the 
Unified State Plan will be considered approved.


Sec.  676.135  What are the requirements for modification of the 
Unified State Plan?

    (a) In addition to the required modification review set forth in 
paragraph (b) of this section, a Governor may submit a modification of 
its Unified State Plan at any time during the 4-year period of the 
plan.
    (b) Modifications are required, at a minimum:
    (1) At the end of the first 2-year period of any 4-year State Plan, 
wherein the State WDB must review the Unified State Plan, and the 
Governor must submit modifications to the plan to reflect changes in 
labor market and economic conditions or other factors affecting the 
implementation of the Unified State Plan;
    (2) When changes in Federal or State law or policy substantially 
affect the strategies, goals, and priorities upon which the Unified 
State Plan is based;
    (3) When there are changes in the statewide vision, strategies, 
policies, State negotiated levels of performance as described in Sec.  
677.170(b) of this chapter, the methodology used to determine local 
allocation of funds, reorganizations that change the working 
relationship with system employees, changes in organizational 
responsibilities, changes to the membership structure of the State WDB 
or alternative entity, and similar substantial changes to the State's 
workforce development system.
    (c) Modifications to the Unified State Plan are subject to the same 
public review and comment requirements in Sec.  676.130(d) that apply 
to the development of the original Unified State Plan.
    (d) Unified State Plan modifications must be approved by the 
Secretaries of Labor and Education, based on the approval standards 
applicable to the original Unified State Plan under Sec.  676.130. This 
approval must come after the approval of the Commissioner of the 
Rehabilitation Services

[[Page 56000]]

Administration for modification of any portion of the plan described in 
sec. 102(b)(2)(D)(iii) of WIOA.


Sec.  676.140  What are the general requirements for submitting a 
Combined State Plan?

    (a) A State may choose to develop and submit a 4-year Combined 
State Plan in lieu of the Unified State Plan described in Sec. Sec.  
676.105 through 676.125.
    (b) A State that submits a Combined State Plan covering an activity 
or program described in paragraph (d) of this section that is, in 
accordance with WIOA sec. 103(c), approved or deemed complete under the 
law relating to the program will not be required to submit any other 
plan or application in order to receive Federal funds to carry out the 
core programs or the program or activities described under paragraph 
(d) of this section that are covered by the Combined State Plan.
    (c) If a State develops a Combined State Plan, it must be submitted 
in accordance with the process described in Sec.  676.143.
    (d) If a State chooses to submit a Combined State Plan, the plan 
must include the six core programs and one or more of the Combined 
State Plan partner programs and activities described in sec. 103(a)(2) 
of WIOA. The Combined State Plan partner programs and activities that 
may be included in the Combined State Plan are:
    (1) Career and technical education programs authorized under the 
Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 
2301 et seq.);
    (2) Temporary Assistance for Needy Families or TANF, authorized 
under part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.);
    (3) Employment and training programs authorized under sec. 6(d)(4) 
of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
    (4) Work programs authorized under sec. 6(o) of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2015(o));
    (5) Trade adjustment assistance activities under chapter 2 of title 
II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
    (6) Services for veterans authorized under chapter 41 of title 38 
United States Code;
    (7) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law);
    (8) Senior Community Service Employment Programs under title V of 
the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
    (9) Employment and training activities carried out by the 
Department of Housing and Urban Development (HUD);
    (10) Employment and training activities carried out under the 
Community Services Block Grant Act (42 U.S.C. 9901 et seq.); and
    (11) Reintegration of offenders programs authorized under sec. 212 
of the Second Chance Act of 2007 (42 U.S.C. 17532).
    (e) A Combined State Plan must contain:
    (1) For the core programs, the information required by sec. 102(b) 
of WIOA and Sec. Sec.  676.105 through 676.125, as explained in the 
joint planning guidelines issued by the Secretaries;
    (2) For the Combined State Plan partner programs and activities, 
except as described in paragraph (h) of this section, the information 
required by the law authorizing and governing that program to be 
submitted to the appropriate Secretary, any other applicable legal 
requirements, and any common planning requirements described in sec. 
102(b) of WIOA, as explained in the joint planning guidelines issued by 
the Secretaries;
    (3) A description of the methods used for joint planning and 
coordination among the core programs, and with the required one-stop 
partner programs and other programs and activities included in the 
State Plan; and
    (4) An assurance that all of the entities responsible for planning 
or administering the programs described in the Combined State Plan have 
had a meaningful opportunity to review and comment on all portions of 
the plan.
    (f) Each Combined State Plan partner program included in the 
Combined State Plan remains subject to the applicable program-specific 
requirements of the Federal law and regulations, and any other 
applicable legal or program requirements, governing the implementation 
and operation of that program.
    (g) For purposes of Sec. Sec.  676.140 through 676.145 the term 
``appropriate Secretary'' means the head of the Federal agency who 
exercises either plan or application approval authority for the program 
or activity under the Federal law authorizing the program or activity 
or, if there are no planning or application requirements, who exercises 
administrative authority over the program or activity under that 
Federal law.
    (h) States that include employment and training activities carried 
out under the Community Services Block Grant (CSBG) Act (42 U.S.C. 9901 
et seq.) under a Combined State Plan would submit all other required 
elements of a complete CSBG State Plan directly to the Federal agency 
that administers the program, according to the requirements of Federal 
law and regulations.
    (i) States that submit employment and training activities carried 
out by HUD under a Combined State Plan would submit any other required 
planning documents for HUD programs directly to HUD, according to the 
requirements of Federal law and regulations.


Sec.  676.143  What is the development, submission, and approval 
process of the Combined State Plan?

    (a) For purposes of Sec.  676.140(a), if a State chooses to develop 
a Combined State Plan it must submit the Combined State Plan in 
accordance with the requirements described below and sec. 103 of WIOA, 
as explained in the joint planning guidelines issued by the Secretaries 
of Labor and Education.
    (b) The Combined State Plan must be developed with the assistance 
of the State WDB, as required by Sec.  679.130(a) of this chapter and 
WIOA sec. 101(d), and must be developed in coordination with 
administrators with optimum policy-making authority for the core 
programs and required one-stop partners.
    (c) The State must provide an opportunity for public comment on and 
input into the development of the Combined State Plan prior to its 
submission.
    (1) The opportunity for public comment for the portions of the 
Combined State Plan that cover the core programs must include an 
opportunity for comment by representatives of Local WDBs and chief 
elected officials, businesses, representatives of labor organizations, 
community-based organizations, adult education providers, institutions 
of higher education, other stakeholders with an interest in the 
services provided by the six core programs, and the general public, 
including individuals with disabilities.
    (2) Consistent with the ``Sunshine Provision'' of WIOA in sec. 
101(g), the State WDB must make information regarding the Combined 
State Plan available to the public through electronic means and 
regularly occurring open meetings in accordance with State law. The 
Combined State Plan must describe the State's process and timeline for 
ensuring a meaningful opportunity for public comment on the portions of 
the plan covering core programs.
    (3) The portions of the plan that cover the Combined State Plan 
partner programs are subject to any public comment requirements 
applicable to those programs.

[[Page 56001]]

    (d) The State must submit to the Secretaries of Labor and Education 
and to the Secretary of the agency with responsibility for approving 
the program's plan or deeming it complete under the law governing the 
program, as part of its Combined State Plan, any plan, application, 
form, or any other similar document that is required as a condition for 
the approval of Federal funding under the applicable program or 
activity. Such submission must occur in accordance with a process 
identified by the relevant Secretaries in paragraph (a) of this 
section.
    (e) The Combined State Plan will be approved or disapproved in 
accordance with the requirements of sec. 103(c) of WIOA.
    (1) The portion of the Combined State Plan covering programs 
administered by the Departments of Labor and Education must be 
reviewed, and approved or disapproved, by the appropriate Secretary 
within 90 days beginning on the day the Combined State Plan is received 
by the appropriate Secretary from the State, consistent with paragraph 
(f) of this section. Before the Secretaries of Labor and Education 
approve the Combined State Plan, the vocational rehabilitation services 
portion of the Combined State Plan described in WIOA sec. 
102(b)(2)(D)(iii) must be approved by the Commissioner of the 
Rehabilitation Services Administration.
    (2) If an appropriate Secretary other than the Secretary of Labor 
or the Secretary of Education has authority to approve or deem complete 
a portion of the Combined State Plan for a program or activity 
described in Sec.  676.140(d), that portion of the Combined State Plan 
must be reviewed, and approved, disapproved, or deemed complete, by the 
appropriate Secretary within 120 days beginning on the day the Combined 
State Plan is received by the appropriate Secretary from the State 
consistent with paragraph (f) of this section.
    (f) The appropriate Secretaries will review and approve or deem 
complete the Combined State Plan within 90 or 120 days, as appropriate, 
as described in paragraph (e) of this section, unless the Secretaries 
of Labor and Education or appropriate Secretary have determined in 
writing within that period that:
    (1) The Combined State Plan is inconsistent with the requirements 
of the six core programs or the Federal laws authorizing or applicable 
to the program or activity involved, including the criteria for 
approval of a plan or application, or deeming the plan complete, if 
any, under such law;
    (2) The portion of the Combined State Plan describing the six core 
programs or the program or activity described in paragraph (a) of this 
section involved does not satisfy the criteria as provided in sec. 102 
or 103 of WIOA, as applicable; or
    (3) The Combined State Plan is incomplete, or otherwise 
insufficient to determine whether it is consistent with a core 
program's requirements, other requirements of WIOA, or the Federal laws 
authorizing, or applicable to, the program or activity described in 
Sec.  676.140(d), including the criteria for approval of a plan or 
application, if any, under such law.
    (g) If the Secretary of Labor, the Secretary of Education, or the 
appropriate Secretary does not make the written determination described 
in paragraph (f) of this section within the relevant period of time 
after submission of the Combined State Plan, that portion of the 
Combined State Plan over which the Secretary has jurisdiction will be 
considered approved.
    (h) The Secretaries of Labor and Education's written determination 
of approval or disapproval regarding the portion of the plan for the 
six core programs may be separate from the written determination of 
approval, disapproval, or completeness of the program-specific 
requirements of Combined State Plan partner programs and activities 
described in Sec.  676.140(d) and included in the Combined State Plan.
    (i) Special rule. In paragraphs (f)(1) and (3) of this section, the 
term ``criteria for approval of a plan or application,'' with respect 
to a State or a core program or a program under the Carl D. Perkins 
Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), 
includes a requirement for agreement between the State and the 
appropriate Secretaries regarding State performance measures or State 
performance accountability measures, as the case may be, including 
levels of performance.


Sec.  676.145  What are the requirements for modifications of the 
Combined State Plan?

    (a) For the core program portions of the Combined State Plan, 
modifications are required, at a minimum:
    (1) By the end of the first 2-year period of any 4-year State Plan. 
The State WDB must review the Combined State Plan, and the Governor 
must submit modifications to the Combined State Plan to reflect changes 
in labor market and economic conditions or other factors affecting the 
implementation of the Combined State Plan;
    (2) When changes in Federal or State law or policy substantially 
affect the strategies, goals, and priorities upon which the Combined 
State Plan is based;
    (3) When there are changes in the statewide vision, strategies, 
policies, State negotiated levels of performance as described in Sec.  
677.170(b) of this chapter, the methodology used to determine local 
allocation of funds, reorganizations that change the working 
relationship with system employees, changes in organizational 
responsibilities, changes to the membership structure of the State WDB 
or alternative entity, and similar substantial changes to the State's 
workforce development system.
    (b) In addition to the required modification review described in 
paragraph (a)(1) of this section, a State may submit a modification of 
its Combined State Plan at any time during the 4-year period of the 
plan.
    (c) For any Combined State Plan partner programs and activities 
described in Sec.  676.140(d) that are included in a State's Combined 
State Plan, the State--
    (1) May decide if the modification requirements under WIOA sec. 
102(c)(3) that apply to the core programs will apply to the Combined 
State Plan partner programs, as long as consistent with any other 
modification requirements for the programs, or may comply with the 
requirements applicable to only the particular program or activity; and
    (2) Must submit, in accordance with the procedure described in 
Sec.  676.143, any modification, amendment, or revision required by the 
Federal law authorizing, or applicable to, the Combined State Plan 
partner program or activity.
    (i) If the underlying programmatic requirements change (e.g., the 
authorizing statute is reauthorized) for Federal laws authorizing such 
programs, a State must either modify its Combined State Plan or submit 
a separate plan to the appropriate Federal agency in accordance with 
the new Federal law authorizing the Combined State Plan partner program 
or activity and other legal requirements applicable to such program or 
activity.
    (ii) If the modification, amendment, or revision affects the 
administration of only that particular Combined State Plan partner 
program and has no impact on the Combined State Plan as a whole or the 
integration and administration of the core and other Combined State 
Plan partner programs at the State level, modifications must be 
submitted for approval to only the appropriate

[[Page 56002]]

Secretary, based on the approval standards applicable to the original 
Combined State Plan under Sec.  676.143, if the State elects, or in 
accordance with the procedures and requirements applicable to the 
particular Combined State Plan partner program.
    (3) A State also may amend its Combined State Plan to add a 
Combined State Plan partner program or activity described in Sec.  
676.140(d).
    (d) Modifications of the Combined State Plan are subject to the 
same public review and comment requirements that apply to the 
development of the original Combined State Plan as described in Sec.  
676.143(c) except that, if the modification, amendment, or revision 
affects the administration of a particular Combined State Plan partner 
program and has no impact on the Combined State Plan as a whole or the 
integration and administration of the core and other Combined State 
Plan partner programs at the State level, a State may comply instead 
with the procedures and requirements applicable to the particular 
Combined State Plan partner program.
    (e) Modifications for the core program portions of the Combined 
State Plan must be approved by the Secretaries of Labor and Education, 
based on the approval standards applicable to the original Combined 
State Plan under Sec.  676.143. This approval must come after the 
approval of the Commissioner of the Rehabilitation Services 
Administration for modification of any portion of the Combined State 
Plan described in sec. 102(b)(2)(D)(iii) of WIOA.

0
2. Add part 677 to read as follows:

PART 677--PERFORMANCE ACCOUNTABILITY UNDER TITLE I OF THE WORKFORCE 
INNOVATION AND OPPORTUNITY ACT

Sec.
677.150 What definitions apply to Workforce Innovation and 
Opportunity Act performance accountability provisions?
Subpart A--State Indicators of Performance for Core Programs
677.155 What are the primary indicators of performance under the 
Workforce Innovation and Opportunity Act?
677.160 What information is required for State performance reports?
677.165 May a State establish additional indicators of performance?
677.170 How are State levels of performance for primary indicators 
established?
677.175 What responsibility do States have to use quarterly wage 
record information for performance accountability?
Subpart B--Sanctions for State Performance and the Provision of 
Technical Assistance
677.180 When is a State subject to a financial sanction under the 
Workforce Innovation and Opportunity Act?
677.185 When are sanctions applied for a State's failure to submit 
an annual performance report?
677.190 When are sanctions applied for failure to achieve adjusted 
levels of performance?
677.195 What should States expect when a sanction is applied to the 
Governor's Reserve Allotment?
677.200 What other administrative actions will be applied to States' 
performance requirements?
Subpart C--Local Performance Accountability for Workforce Innovation 
and Opportunity Act Title I Programs
677.205 What performance indicators apply to local areas and what 
information must be included in local area performance reports?
677.210 How are local performance levels established?
Subpart D--Incentives and Sanctions for Local Performance for Workforce 
Innovation and Opportunity Act Title I Programs
677.215 Under what circumstances are local areas eligible for State 
Incentive Grants?
677.220 Under what circumstances may a corrective action or sanction 
be applied to local areas for poor performance?
677.225 Under what circumstances may local areas appeal a 
reorganization plan?
Subpart E--Eligible Training Provider Performance for Workforce 
Innovation and Opportunity Act Title I Programs
677.230 What information is required for the eligible training 
provider performance reports?
Subpart F--Performance Reporting Administrative Requirements
677.235 What are the reporting requirements for individual records 
for core Workforce Innovation and Opportunity Act (WIOA) title I 
programs; the Wagner-Peyser Act Employment Service program, as 
amended by WIOA title III; and the Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as 
amended by WIOA title IV?
677.240 What are the requirements for data validation of State 
annual performance reports?

    Authority: Secs. 116, 189, and 503 of Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Sec.  677.150  What definitions apply to Workforce Innovation and 
Opportunity Act performance accountability provisions?

    (a) Participant. A reportable individual who has received services 
other than the services described in paragraph (a)(3) of this section, 
after satisfying all applicable programmatic requirements for the 
provision of services, such as eligibility determination.
    (1) For the Vocational Rehabilitation (VR) program, a participant 
is a reportable individual who has an approved and signed 
Individualized Plan for Employment (IPE) and has begun to receive 
services.
    (2) For the Workforce Innovation and Opportunity Act (WIOA) title I 
youth program, a participant is a reportable individual who has 
satisfied all applicable program requirements for the provision of 
services, including eligibility determination, an objective assessment, 
and development of an individual service strategy, and received 1 of 
the 14 WIOA youth program elements identified in sec. 129(c)(2) of 
WIOA.
    (3) The following individuals are not participants:
    (i) Individuals in an Adult Education and Family Literacy Act 
(AEFLA) program who have not completed at least 12 contact hours;
    (ii) Individuals who only use the self-service system.
    (A) Subject to paragraph (a)(3)(ii)(B) of this section, self-
service occurs when individuals independently access any workforce 
development system program's information and activities in either a 
physical location, such as a one-stop center resource room or partner 
agency, or remotely via the use of electronic technologies.
    (B) Self-service does not uniformly apply to all virtually accessed 
services. For example, virtually accessed services that provide a level 
of support beyond independent job or information seeking on the part of 
an individual would not qualify as self-service.
    (iii) Individuals who receive information-only services or 
activities, which provide readily available information that does not 
require an assessment by a staff member of the individual's skills, 
education, or career objectives.
    (4) Programs must include participants in their performance 
calculations.
    (b) Reportable individual. An individual who has taken action that 
demonstrates an intent to use program services and who meets specific 
reporting criteria of the program, including:
    (1) Individuals who provide identifying information;
    (2) Individuals who only use the self-service system; or
    (3) Individuals who only receive information-only services or 
activities.
    (c) Exit. As defined for the purpose of performance calculations, 
exit is the

[[Page 56003]]

point after which a participant who has received services through any 
program meets the following criteria:
    (1) For the adult, dislocated worker, and youth programs authorized 
under WIOA title I, the AEFLA program authorized under WIOA title II, 
and the Employment Service program authorized under the Wagner-Peyser 
Act, as amended by WIOA title III, exit date is the last date of 
service.
    (i) The last day of service cannot be determined until at least 90 
days have elapsed since the participant last received services; 
services do not include self-service, information-only services or 
activities, or follow-up services. This also requires that there are no 
plans to provide the participant with future services.
    (ii) [Reserved].
    (2)(i) For the VR program authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV (VR program):
    (A) The participant's record of service is closed in accordance 
with 34 CFR 361.56 because the participant has achieved an employment 
outcome; or
    (B) The participant's service record is closed because the 
individual has not achieved an employment outcome or the individual has 
been determined ineligible after receiving services in accordance with 
34 CFR 361.43.
    (ii) Notwithstanding any other provision of this section, a 
participant will not be considered as meeting the definition of exit 
from the VR program if the participant's service record is closed 
because the participant has achieved a supported employment outcome in 
an integrated setting but not in competitive integrated employment.
    (3)(i) A State may implement a common exit policy for all or some 
of the core programs in WIOA title I and the Employment Service program 
authorized under the Wagner-Peyser Act, as amended by WIOA title III, 
and any additional required partner program(s) listed in sec. 
121(b)(1)(B) of WIOA that is under the authority of the U.S. Department 
of Labor (DOL).
    (ii) If a State chooses to implement a common exit policy, the 
policy must require that a participant is exited only when all of the 
criteria in paragraph (c)(1) of this section are met for the WIOA title 
I core programs and the Employment Service program authorized under the 
Wagner-Peyser Act, as amended by WIOA title III, as well as any 
additional required partner programs listed in sec. 121(b)(1)(B) of 
WIOA under the authority of DOL to which the common exit policy applies 
in which the participant is enrolled.
    (d) State. For purposes of this part, other than in regard to 
sanctions or the statistical adjustment model, all references to 
``State'' include the outlying areas of American Samoa, Guam, 
Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, 
and, as applicable, the Republic of Palau.

Subpart A--State Indicators of Performance for Core Programs


Sec.  677.155  What are the primary indicators of performance under the 
Workforce Innovation and Opportunity Act?

    (a) All States submitting either a Unified or Combined State Plan 
under Sec. Sec.  676.130 and 676.143 of this chapter, must propose 
expected levels of performance for each of the primary indicators of 
performance for the adult, dislocated worker, and youth programs 
authorized under WIOA title I; the AEFLA program authorized under WIOA 
title II; the Employment Service program authorized under the Wagner-
Peyser Act, as amended by WIOA title III; and the VR program authorized 
under title I of the Rehabilitation Act of 1973, as amended by WIOA 
title IV.
    (1) Primary indicators of performance. The six primary indicators 
of performance for the adult and dislocated worker programs, the AEFLA 
program, and the VR program are:
    (i) The percentage of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (ii) The percentage of participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (iii) Median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (iv)(A) The percentage of those participants enrolled in an 
education or training program (excluding those in on-the-job training 
[OJT] and customized training) who attained a recognized postsecondary 
credential or a secondary school diploma, or its recognized equivalent, 
during participation in or within 1 year after exit from the program.
    (B) A participant who has attained a secondary school diploma or 
its recognized equivalent is included in the percentage of participants 
who have attained a secondary school diploma or recognized equivalent 
only if the participant also is employed or is enrolled in an education 
or training program leading to a recognized postsecondary credential 
within 1 year after exit from the program;
    (v) The percentage of participants who, during a program year, are 
in an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains, defined as documented academic, technical, occupational, 
or other forms of progress, towards such a credential or employment. 
Depending upon the type of education or training program, documented 
progress is defined as one of the following:
    (A) Documented achievement of at least one educational functioning 
level of a participant who is receiving instruction below the 
postsecondary education level;
    (B) Documented attainment of a secondary school diploma or its 
recognized equivalent;
    (C) Secondary or postsecondary transcript or report card for a 
sufficient number of credit hours that shows a participant is meeting 
the State unit's academic standards;
    (D) Satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training; or
    (E) Successful passage of an exam that is required for a particular 
occupation or progress in attaining technical or occupational skills as 
evidenced by trade-related benchmarks such as knowledge-based exams.
    (vi) Effectiveness in serving employers.
    (2) Participants. For purposes of the primary indicators of 
performance in paragraph (a)(1) of this section, ``participant'' will 
have the meaning given to it in Sec.  677.150(a), except that--
    (i) For purposes of determining program performance levels under 
indicators set forth in paragraphs (a)(1)(i) through (iv) and (vi) of 
this section, a ``participant'' does not include a participant who 
received services under sec. 225 of WIOA and exits such program while 
still in a correctional institution as defined in sec. 225(e)(1) of 
WIOA; and
    (ii) The Secretaries of Labor and Education may, as needed and 
consistent with the Paperwork Reduction Act (PRA), make further 
determinations as to the participants to be included in calculating 
program performance levels for purposes of any of the performance 
indicators set forth in paragraph (a)(1) of this section.
    (b) The primary indicators in paragraphs (a)(1)(i) through (iii) 
and (vi) of this section apply to the Employment

[[Page 56004]]

Service program authorized under the Wagner-Peyser Act, as amended by 
WIOA title III.
    (c) For the youth program authorized under WIOA title I, the 
primary indicators are:
    (1) Percentage of participants who are in education or training 
activities, or in unsubsidized employment, during the second quarter 
after exit from the program;
    (2) Percentage of participants in education or training activities, 
or in unsubsidized employment, during the fourth quarter after exit 
from the program;
    (3) Median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (4) The percentage of those participants enrolled in an education 
or training program (excluding those in OJT and customized training) 
who obtained a recognized postsecondary credential or a secondary 
school diploma, or its recognized equivalent, during participation in 
or within 1 year after exit from the program, except that a participant 
who has attained a secondary school diploma or its recognized 
equivalent is included as having attained a secondary school diploma or 
recognized equivalent only if the participant is also employed or is 
enrolled in an education or training program leading to a recognized 
postsecondary credential within 1 year from program exit;
    (5) The percentage of participants who during a program year, are 
in an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains, defined as documented academic, technical, occupational or 
other forms of progress towards such a credential or employment. 
Depending upon the type of education or training program, documented 
progress is defined as one of the following:
    (i) Documented achievement of at least one educational functioning 
level of a participant who is receiving instruction below the 
postsecondary education level;
    (ii) Documented attainment of a secondary school diploma or its 
recognized equivalent;
    (iii) Secondary or postsecondary transcript or report card for a 
sufficient number of credit hours that shows a participant is achieving 
the State unit's academic standards;
    (iv) Satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training; or
    (v) Successful passage of an exam that is required for a particular 
occupation or progress in attaining technical or occupational skills as 
evidenced by trade-related benchmarks such as knowledge-based exams.
    (6) Effectiveness in serving employers.


Sec.  677.160  What information is required for State performance 
reports?

    (a) The State performance report required by sec. 116(d)(2) of WIOA 
must be submitted annually using a template the Departments of Labor 
and Education will disseminate, and must provide, at a minimum, 
information on the actual performance levels achieved consistent with 
Sec.  677.175 with respect to:
    (1) The total number of participants served, and the total number 
of participants who exited each of the core programs identified in sec. 
116(b)(3)(A)(ii) of WIOA, including disaggregated counts of those who 
participated in and exited a core program, by:
    (i) Individuals with barriers to employment as defined in WIOA sec. 
3(24); and
    (ii) Co-enrollment in any of the programs in WIOA sec. 
116(b)(3)(A)(ii).
    (2) Information on the performance levels achieved for the primary 
indicators of performance for all of the core programs identified in 
Sec.  677.155 including disaggregated levels for:
    (i) Individuals with barriers to employment as defined in WIOA sec. 
3(24);
    (ii) Age;
    (iii) Sex; and
    (iv) Race and ethnicity.
    (3) The total number of participants who received career services 
and the total number of participants who exited from career services 
for the most recent program year and the 3 preceding program years, and 
the total number of participants who received training services and the 
total number of participants who exited from training services for the 
most recent program year and the 3 preceding program years, as 
applicable to the program;
    (4) Information on the performance levels achieved for the primary 
indicators of performance consistent with Sec.  677.155 for career 
services and training services for the most recent program year and the 
3 preceding program years, as applicable to the program;
    (5) The percentage of participants in a program who attained 
unsubsidized employment related to the training received (often 
referred to as training-related employment) through WIOA title I, 
subtitle B programs;
    (6) The amount of funds spent on career services and the amount of 
funds spent on training services for the most recent program year and 
the 3 preceding program years, as applicable to the program;
    (7) The average cost per participant for those participants who 
received career services and training services, respectively, during 
the most recent program year and the 3 preceding program years, as 
applicable to the program;
    (8) The percentage of a State's annual allotment under WIOA sec. 
132(b) that the State spent on administrative costs; and
    (9) Information that facilitates comparisons of programs with 
programs in other States.
    (10) For WIOA title I programs, a State performance narrative, 
which, for States in which a local area is implementing a pay-for-
performance contracting strategy, at a minimum provides:
    (i) A description of pay-for-performance contract strategies being 
used for programs;
    (ii) The performance of service providers entering into contracts 
for such strategies, measured against the levels of performance 
specified in the contracts for such strategies; and
    (iii) An evaluation of the design of the programs and performance 
strategies and, when available, the satisfaction of employers and 
participants who received services under such strategies.
    (b) The disaggregation of data for the State performance report 
must be done in compliance with WIOA sec. 116(d)(6)(C).
    (c) The State performance reports must include a mechanism of 
electronic access to the State's local area and eligible training 
provider (ETP) performance reports.
    (d) States must comply with these requirements from sec. 116 of 
WIOA as explained in joint guidance issued by the Departments of Labor 
and Education, which may include information on reportable individuals 
as determined by the Secretaries of Labor and Education.


Sec.  677.165  May a State establish additional indicators of 
performance?

    States may identify additional indicators of performance for the 
six core programs. If a State does so, these indicators must be 
included in the Unified or Combined State Plan.

[[Page 56005]]

Sec.  677.170  How are State levels of performance for primary 
indicators established?

    (a) A State must submit in the State Plan expected levels of 
performance on the primary indicators of performance for each core 
program as required by sec. 116(b)(3)(A)(iii) of WIOA as explained in 
joint guidance issued by the Secretaries of Labor and Education.
    (1) The initial State Plan submitted under WIOA must contain 
expected levels of performance for the first 2 years of the State Plan.
    (2) States must submit expected levels of performance for the third 
and fourth year of the State Plan before the third program year 
consistent with Sec. Sec.  676.135 and 676.145 of this chapter.
    (b) States must reach agreement on levels of performance with the 
Secretaries of Labor and Education for each indicator for each core 
program. These are the negotiated levels of performance. The negotiated 
levels must be based on the following factors:
    (1) How the negotiated levels of performance compare with State 
levels of performance established for other States;
    (2) The application of an objective statistical model established 
by the Secretaries of Labor and Education, subject to paragraph (d) of 
this section;
    (3) How the negotiated levels promote continuous improvement in 
performance based on the primary indicators and ensure optimal return 
on investment of Federal funds; and
    (4) The extent to which the negotiated levels assist the State in 
meeting the performance goals established by the Secretaries of Labor 
and Education for the core programs in accordance with the Government 
Performance and Results Act of 1993, as amended.
    (c) An objective statistical adjustment model will be developed and 
disseminated by the Secretaries of Labor and Education. The model will 
be based on:
    (1) Differences among States in actual economic conditions, 
including but not limited to unemployment rates and job losses or gains 
in particular industries; and
    (2) The characteristics of participants, including but not limited 
to:
    (i) Indicators of poor work history;
    (ii) Lack of work experience;
    (iii) Lack of educational or occupational skills attainment;
    (iv) Dislocation from high-wage and high-benefit employment;
    (v) Low levels of literacy;
    (vi) Low levels of English proficiency;
    (vii) Disability status;
    (viii) Homelessness;
    (ix) Ex-offender status; and
    (x) Welfare dependency.
    (d) The objective statistical adjustment model developed under 
paragraph (c) of this section will be:
    (1) Applied to the core programs' primary indicators upon 
availability of data which are necessary to populate the model and 
apply the model to the local core programs;
    (2) Subject to paragraph (d)(1) of this section, used before the 
beginning of a program year in order to reach agreement on State 
negotiated levels for the upcoming program year; and
    (3) Subject to paragraph (d)(1) of this section, used to revise 
negotiated levels at the end of a program year based on actual economic 
conditions and characteristics of participants served, consistent with 
sec. 116(b)(3)(A)(vii) of WIOA.
    (e) The negotiated levels revised at the end of the program year, 
based on the statistical adjustment model, are the adjusted levels of 
performance.
    (f) States must comply with these requirements from sec. 116 of 
WIOA as explained in joint guidance issued by the Departments of Labor 
and Education.


Sec.  677.175  What responsibility do States have to use quarterly wage 
record information for performance accountability?

    (a)(1) States must, consistent with State laws, use quarterly wage 
record information in measuring a State's performance on the primary 
indicators of performance outlined in Sec.  677.155 and a local area's 
performance on the primary indicators of performance identified in 
Sec.  677.205.
    (2) The use of social security numbers from participants and such 
other information as is necessary to measure the progress of those 
participants through quarterly wage record information is authorized.
    (3) To the extent that quarterly wage records are not available for 
a participant, States may use other information as is necessary to 
measure the progress of those participants through methods other than 
quarterly wage record information.
    (b) ``Quarterly wage record information'' means intrastate and 
interstate wages paid to an individual, the social security number (or 
numbers, if more than one) of the individual, and the name, address, 
State, and the Federal employer identification number of the employer 
paying the wages to the individual.
    (c) The Governor may designate a State agency (or appropriate State 
entity) to assist in carrying out the performance reporting 
requirements for WIOA core programs and ETPs. The Governor or such 
agency (or appropriate State entity) is responsible for:
    (1) Facilitating data matches;
    (2) Data quality reliability; and
    (3) Protection against disaggregation that would violate applicable 
privacy standards.

Subpart B--Sanctions for State Performance and the Provision of 
Technical Assistance


Sec.  677.180  When is a State subject to a financial sanction under 
the Workforce Innovation and Opportunity Act?

    A State will be subject to financial sanction under WIOA sec. 
116(f) if it fails to:
    (a) Submit the State annual performance report required under WIOA 
sec. 116(d)(2); or
    (b) Meet adjusted levels of performance for the primary indicators 
of performance in accordance with sec. 116(f) of WIOA.


Sec.  677.185  When are sanctions applied for a State's failure to 
submit an annual performance report?

    (a) Sanctions will be applied when a State fails to submit the 
State annual performance report required under sec. 116(d)(2) of WIOA. 
A State fails to report if the State either:
    (1) Does not submit a State annual performance report by the date 
for timely submission set in performance reporting guidance; or
    (2) Submits a State annual performance report by the date for 
timely submission, but the report is incomplete.
    (b) Sanctions will not be applied if the reporting failure is due 
to exceptional circumstances outside of the State's control. 
Exceptional circumstances may include, but are not limited to:
    (1) Natural disasters;
    (2) Unexpected personnel transitions; and
    (3) Unexpected technology related issues.
    (c) In the event that a State may not be able to submit a complete 
and accurate performance report by the deadline for timely reporting:
    (1) The State must notify the Secretary of Labor or Secretary of 
Education as soon as possible, but no later than 30 days prior to the 
established deadline for submission, of a potential impact on the 
State's ability to submit its State annual performance report in order 
to not be considered failing to report.
    (2) In circumstances where unexpected events occur less than 30 
days before the established deadline for submission of the State annual 
performance reports, the Secretaries of

[[Page 56006]]

Labor and Education will review requests for extending the reporting 
deadline in accordance with the Departments of Labor and Education's 
procedures that will be established in guidance.


Sec.  677.190  When are sanctions applied for failure to achieve 
adjusted levels of performance?

    (a) States' negotiated levels of performance will be adjusted 
through the application of the statistical adjustment model established 
under Sec.  677.170 to account for actual economic conditions 
experienced during a program year and characteristics of participants, 
annually at the close of each program year.
    (b) Any State that fails to meet adjusted levels of performance for 
the primary indicators of performance outlined in Sec.  677.155 for any 
year will receive technical assistance, including assistance in the 
development of a performance improvement plan provided by the Secretary 
of Labor or Secretary of Education.
    (c) Whether a State has failed to meet adjusted levels of 
performance will be determined using the following three criteria:
    (1) The overall State program score, which is expressed as the 
percent achieved, compares the actual results achieved by a core 
program on the primary indicators of performance to the adjusted levels 
of performance for that core program. The average of the percentages 
achieved of the adjusted level of performance for each of the primary 
indicators by a core program will constitute the overall State program 
score.
    (2) However, until all indicators for the core program have at 
least 2 years of complete data, the overall State program score will be 
based on a comparison of the actual results achieved to the adjusted 
level of performance for each of the primary indicators that have at 
least 2 years of complete data for that program;
    (3) The overall State indicator score, which is expressed as the 
percent achieved, compares the actual results achieved on a primary 
indicator of performance by all core programs in a State to the 
adjusted levels of performance for that primary indicator. The average 
of the percentages achieved of the adjusted level of performance by all 
of the core programs on that indicator will constitute the overall 
State indicator score.
    (4) However, until all indicators for the State have at least 2 
years of complete data, the overall State indicator score will be based 
on a comparison of the actual results achieved to the adjusted level of 
performance for each of the primary indicators that have at least 2 
years of complete data in a State.
    (5) The individual indicator score, which is expressed as the 
percent achieved, compares the actual results achieved by each core 
program on each of the individual primary indicators to the adjusted 
levels of performance for each of the program's primary indicators of 
performance.
    (d) A performance failure occurs when:
    (1) Any overall State program score or overall State indicator 
score falls below 90 percent for the program year; or
    (2) Any of the States' individual indicator scores fall below 50 
percent for the program year.
    (e) Sanctions based on performance failure will be applied to 
States if, for 2 consecutive years, the State fails to meet:
    (1) 90 percent of the overall State program score for the same core 
program;
    (2) 90 percent of the overall State indicator score for the same 
primary indicator; or
    (3) 50 percent of the same indicator score for the same program.


Sec.  677.195  What should States expect when a sanction is applied to 
the Governor's Reserve Allotment?

    (a) The Secretaries of Labor and Education will reduce the 
Governor's Reserve Allotment by five percent of the maximum available 
amount for the immediately succeeding program year if:
    (1) The State fails to submit the State annual performance reports 
as required under WIOA sec. 116(d)(2), as defined in Sec.  677.185;
    (2) The State fails to meet State adjusted levels of performance 
for the same primary performance indicator(s) under either Sec.  
677.190(d)(1) for the second consecutive year as defined in Sec.  
677.190; or
    (3) The State's score on the same indicator for the same program 
falls below 50 percent under Sec.  677.190(d)(2) for the second 
consecutive year as defined in Sec.  677.190.
    (b) If the State fails under paragraphs (a)(1) and either (a)(2) or 
(3) of this section in the same program year, the Secretaries of Labor 
and Education will reduce the Governor's Reserve Allotment by 10 
percent of the maximum available amount for the immediately succeeding 
program year.
    (c) If a State's Governor's Reserve Allotment is reduced:
    (1) The reduced amount will not be returned to the State in the 
event that the State later improves performance or submits its annual 
performance report; and
    (2) The Governor's Reserve will continue to be set at the reduced 
level in each subsequent year until the Secretary of Labor or the 
Secretary of Education, depending on which program is impacted, 
determines that the State met the State adjusted levels of performance 
for the applicable primary performance indicators and has submitted all 
of the required performance reports.
    (d) A State may request review of a sanction the Secretary of Labor 
imposes in accordance with the provisions of Sec.  683.800 of this 
chapter.


Sec.  677.200  What other administrative actions will be applied to 
States' performance requirements?

    (a) In addition to sanctions for failure to report or failure to 
meet adjusted levels of performance, States will be subject to 
administrative actions in the case of poor performance.
    (b) States' performance achievement on the individual primary 
indicators will be assessed in addition to the overall State program 
score and overall State indicator score. Based on this assessment, as 
clarified and explained in guidance, for performance on any individual 
primary indicator, the Secretary of Labor or the Secretary of Education 
will require the State to establish a performance risk plan to address 
continuous improvement on the individual primary indicator.

Subpart C--Local Performance Accountability for Workforce 
Innovation and Opportunity Act Title I Programs


Sec.  677.205  What performance indicators apply to local areas and 
what information must be included in local area performance reports?

    (a) Each local area in a State under WIOA title I is subject to the 
same primary indicators of performance for the core programs for WIOA 
title I under Sec.  677.155(a)(1) and (c) that apply to the State.
    (b) In addition to the indicators described in paragraph (a) of 
this section, under Sec.  677.165, the Governor may apply additional 
indicators of performance to local areas in the State.
    (c) States must annually make local area performance reports 
available to the public using a template that the Departments of Labor 
and Education will disseminate in guidance, including by electronic 
means. The State must provide electronic access to the public local 
area performance report in its annual State performance report.

[[Page 56007]]

    (d) The local area performance report must include:
    (1) The actual results achieved under Sec.  677.155 and the 
information required under Sec.  677.160(a);
    (2) The percentage of a local area's allotment under WIOA secs. 
128(b) and 133(b) that the local area spent on administrative costs; 
and
    (3) Other information that facilitates comparisons of programs with 
programs in other local areas (or planning regions if the local area is 
part of a planning region).
    (e) The disaggregation of data for the local area performance 
report must be done in compliance with WIOA sec. 116(d)(6)(C).
    (f) States must comply with any requirements from sec. 116(d)(3) of 
WIOA as explained in guidance, including the use of the performance 
reporting template, issued by DOL.


Sec.  677.210  How are local performance levels established?

    (a) The objective statistical adjustment model required under sec. 
116(b)(3)(A)(viii) of WIOA and described in Sec.  677.170(c) must be:
    (1) Applied to the core programs' primary indicators upon 
availability of data which are necessary to populate the model and 
apply the model to the local core programs;
    (2) Used in order to reach agreement on local negotiated levels of 
performance for the upcoming program year; and
    (3) Used to establish adjusted levels of performance at the end of 
a program year based on actual conditions, consistent with WIOA sec. 
116(c)(3).
    (b) Until all indicators for the core program in a local area have 
at least 2 years of complete data, the comparison of the actual results 
achieved to the adjusted levels of performance for each of the primary 
indicators only will be applied where there are at least 2 years of 
complete data for that program.
    (c) The Governor, Local Workforce Development Board (WDB), and 
chief elected official must reach agreement on local negotiated levels 
of performance based on a negotiations process before the start of a 
program year with the use of the objective statistical model described 
in paragraph (a) of this section. The negotiations will include a 
discussion of circumstances not accounted for in the model and will 
take into account the extent to which the levels promote continuous 
improvement. The objective statistical model will be applied at the end 
of the program year based on actual economic conditions and 
characteristics of the participants served.
    (d) The negotiations process described in paragraph (c) of this 
section must be developed by the Governor and disseminated to all Local 
WDBs and chief elected officials.
    (e) The Local WDBs may apply performance measures to service 
providers that differ from the performance indicators that apply to the 
local area. These performance measures must be established after 
considering:
    (1) The established local negotiated levels;
    (2) The services provided by each provider; and
    (3) The populations the service providers are intended to serve.

Subpart D--Incentives and Sanctions for Local Performance for 
Workforce Innovation and Opportunity Act Title I Programs


Sec.  677.215  Under what circumstances are local areas eligible for 
State Incentive Grants?

    (a) The Governor is not required to award local incentive funds, 
but is authorized to provide incentive grants to local areas for 
performance on the primary indicators of performance consistent with 
WIOA sec. 134(a)(3)(A)(xi).
    (b) The Governor may use non-Federal funds to create incentives for 
the Local WDBs to implement pay-for-performance contract strategies for 
the delivery of training services described in WIOA sec. 134(c)(3) or 
activities described in WIOA sec. 129(c)(2) in the local areas served 
by the Local WDBs. Pay-for-performance contract strategies must be 
implemented in accordance with part 683, subpart E of this chapter and 
Sec.  677.160.


Sec.  677.220  Under what circumstances may a corrective action or 
sanction be applied to local areas for poor performance?

    (a) If a local area fails to meet the adjusted levels of 
performance agreed to under Sec.  677.210 for the primary indicators of 
performance in the adult, dislocated worker, and youth programs 
authorized under WIOA title I in any program year, technical assistance 
must be provided by the Governor or, upon the Governor's request, by 
the Secretary of Labor.
    (1) A State must establish the threshold for failure to meet 
adjusted levels of performance for a local area before coming to 
agreement on the negotiated levels of performance for the local area.
    (i) A State must establish the adjusted level of performance for a 
local area, using the statistical adjustment model described in Sec.  
677.170(c).
    (ii) At least 2 years of complete data on any indicator for any 
local core program are required in order to establish adjusted levels 
of performance for a local area.
    (2) The technical assistance may include:
    (i) Assistance in the development of a performance improvement 
plan;
    (ii) The development of a modified local or regional plan; or
    (iii) Other actions designed to assist the local area in improving 
performance.
    (b) If a local area fails to meet the adjusted levels of 
performance agreed to under Sec.  677.210 for the same primary 
indicators of performance for the same core program authorized under 
WIOA title I for a third consecutive program year, the Governor must 
take corrective actions. The corrective actions must include the 
development of a reorganization plan under which the Governor:
    (1) Requires the appointment and certification of a new Local WDB, 
consistent with the criteria established under Sec.  679.350 of this 
chapter;
    (2) Prohibits the use of eligible providers and one-stop partners 
that have been identified as achieving poor levels of performance; or
    (3) Takes such other significant actions as the Governor determines 
are appropriate.


Sec.  677.225  Under what circumstances may local areas appeal a 
reorganization plan?

    (a) The Local WDB and chief elected official for a local area that 
is subject to a reorganization plan under WIOA sec. 116(g)(2)(A) may 
appeal to the Governor to rescind or revise the reorganization plan not 
later than 30 days after receiving notice of the reorganization plan. 
The Governor must make a final decision within 30 days after receipt of 
the appeal.
    (b) The Local WDB and chief elected official may appeal the final 
decision of the Governor to the Secretary of Labor not later than 30 
days after receiving the decision from the Governor. Any appeal of the 
Governor's final decision must be:
    (1) Appealed jointly by the Local WDB and chief elected official to 
the Secretary of Labor under Sec.  683.650 of this chapter; and
    (2) Must be submitted by certified mail, return receipt requested, 
to the Secretary of Labor, U.S. Department of Labor, 200 Constitution 
Ave. NW., Washington, DC 20210, Attention: ASET. A copy of the appeal 
must be simultaneously provided to the Governor.
    (c) Upon receipt of the joint appeal from the Local WDB and chief 
elected

[[Page 56008]]

official, the Secretary of Labor must make a final decision within 30 
days. In making this determination the Secretary of Labor may consider 
any comments submitted by the Governor in response to the appeals.
    (d) The decision by the Governor on the appeal becomes effective at 
the time it is issued and remains effective unless the Secretary of 
Labor rescinds or revises the reorganization plan under WIOA sec. 
116(g)(2)(C).

Subpart E--Eligible Training Provider Performance for Workforce 
Innovation and Opportunity Act Title I Programs


Sec.  677.230  What information is required for the eligible training 
provider performance reports?

    (a) States are required to make available and publish annually 
using a template the Departments of Labor and Education will 
disseminate including through electronic means, the ETP performance 
reports for ETPs who provide services under sec. 122 of WIOA that are 
described in Sec. Sec.  680.400 through 680.530 of this chapter. These 
reports at a minimum must include, consistent with Sec.  677.175 and 
with respect to each program of study that is eligible to receive funds 
under WIOA:
    (1) The total number of participants as defined by Sec.  677.150(a) 
who received training services under the adult and dislocated worker 
programs authorized under WIOA title I for the most recent year and the 
3 preceding program years, including:
    (i) The number of participants under the adult and dislocated 
worker programs disaggregated by barriers to employment;
    (ii) The number of participants under the adult and dislocated 
worker programs disaggregated by race, ethnicity, sex, and age;
    (iii) The number of participants under the adult and dislocated 
worker programs disaggregated by the type of training entity for the 
most recent program year and the 3 preceding program years;
    (2) The total number of participants who exit a program of study or 
its equivalent, including disaggregate counts by the type of training 
entity during the most recent program year and the 3 preceding program 
years;
    (3) The average cost-per-participant for participants who received 
training services for the most recent program year and the 3 preceding 
program years disaggregated by type of training entity;
    (4) The total number of individuals exiting from the program of 
study (or the equivalent) with respect to all individuals engaging in 
the program of study (or the equivalent); and
    (5) The levels of performance achieved for the primary indicators 
of performance identified in Sec.  677.155(a)(1)(i) through (iv) with 
respect to all individuals engaging in a program of study (or the 
equivalent).
    (b) Apprenticeship programs registered under the National 
Apprenticeship Act are not required to submit ETP performance 
information. If a registered apprenticeship program voluntarily submits 
performance information to a State, the State must include this 
information in the report.
    (c) The State must provide a mechanism of electronic access to the 
public ETP performance report in its annual State performance report.
    (d) States must comply with any requirements from sec. 116(d)(4) of 
WIOA as explained in guidance issued by DOL.
    (e) The Governor may designate one or more State agencies such as a 
State Education Agency or other State Educational Authority to assist 
in overseeing ETP performance and facilitating the production and 
dissemination of ETP performance reports. These agencies may be the 
same agencies that are designated as responsible for administering the 
ETP list as provided under Sec.  680.500 of this chapter. The Governor 
or such agencies, or authorities, is responsible for:
    (1) Facilitating data matches between ETP records and unemployment 
insurance (UI) wage data in order to produce the report;
    (2) The creation and dissemination of the reports as described in 
paragraphs (a) through (d) of this section;
    (3) Coordinating the dissemination of the performance reports with 
the ETP list and the information required to accompany the list, as 
provided in Sec.  680.500 of this chapter.

Subpart F--Performance Reporting Administrative Requirements


Sec.  677.235  What are the reporting requirements for individual 
records for core Workforce Innovation and Opportunity Act (WIOA) title 
I programs; the Wagner-Peyser Act Employment Service program, as 
amended by WIOA title III; and the Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by WIOA title IV?

    (a) On a quarterly basis, each State must submit to the Secretary 
of Labor or the Secretary of Education, as appropriate, individual 
records that include demographic information, information on services 
received, and information on resulting outcomes, as appropriate, for 
each reportable individual in either of the following programs 
administered by the Secretary of Labor or Secretary of Education: A 
WIOA title I core program; the Employment Service program authorized 
under the Wagner-Peyser Act, as amended by WIOA title III; or the VR 
program authorized under title I of the Rehabilitation Act of 1973, as 
amended by WIOA title IV.
    (b) For individual records submitted to the Secretary of Labor, 
those records may be required to be integrated across all programs 
administered by the Secretary of Labor in one single file.
    (c) States must comply with the requirements of sec. 116(d)(2) of 
WIOA as explained in guidance issued by the Departments of Labor and 
Education.


Sec.  677.240  What are the requirements for data validation of State 
annual performance reports?

    (a) States must establish procedures, consistent with guidelines 
issued by the Secretary of Labor or the Secretary of Education, to 
ensure that they submit complete annual performance reports that 
contain information that is valid and reliable, as required by WIOA 
sec. 116(d)(5).
    (b) If a State fails to meet standards in paragraph (a) of this 
section as determined by the Secretary of Labor or the Secretary of 
Education, the appropriate Secretary will provide technical assistance 
and may require the State to develop and implement corrective actions, 
which may require the State to provide training for its subrecipients.
    (c) The Secretaries of Labor and Education will provide training 
and technical assistance to States in order to implement this section. 
States must comply with the requirements of sec. 116(d)(5) of WIOA as 
explained in guidance.

0
3. Add part 678 to read as follows:

PART 678--DESCRIPTION OF THE ONE-STOP DELIVERY SYSTEM UNDER TITLE I 
OF THE WORKFORCE INNOVATION AND OPPORTUNITY ACT

Subpart A--General Description of the One-Stop Delivery System
Sec.
678.300 What is the one-stop delivery system?
678.305 What is a comprehensive one-stop center and what must be 
provided there?
678.310 What is an affiliated site and what must be provided there?
678.315 Can a stand-alone Wagner-Peyser Act Employment Service 
office be designated as an affiliated one-stop site?
678.320 Are there any requirements for networks of eligible one-stop 
partners or specialized centers?

[[Page 56009]]

Subpart B--One-Stop Partners and the Responsibilities of Partners
678.400 Who are the required one-stop partners?
678.405 Is Temporary Assistance for Needy Families a required one-
stop partner?
678.410 What other entities may serve as one-stop partners?
678.415 What entity serves as the one-stop partner for a particular 
program in the local area?
678.420 What are the roles and responsibilities of the required one-
stop partners?
678.425 What are the applicable career services that must be 
provided through the one-stop delivery system by required one-stop 
partners?
678.430 What are career services?
678.435 What are the business services provided through the one-stop 
delivery system, and how are they provided?
678.440 When may a fee be charged for the business services in this 
subpart?
Subpart C--Memorandum of Understanding for the One-Stop Delivery System
678.500 What is the Memorandum of Understanding for the one-stop 
delivery system and what must be included in the Memorandum of 
Understanding?
678.505 Is there a single Memorandum of Understanding for the local 
area, or must there be different Memoranda of Understanding between 
the Local Workforce Development Board and each partner?
678.510 How must the Memorandum of Understanding be negotiated?
Subpart D--One-Stop Operators
678.600 Who may operate one-stop centers?
678.605 How is the one-stop operator selected?
678.610 When is the sole-source selection of one-stop operators 
appropriate, and how is it conducted?
678.615 May an entity currently serving as one-stop operator compete 
to be a one-stop operator under the procurement requirements of this 
subpart?
678.620 What is the one-stop operator's role?
678.625 Can a one-stop operator also be a service provider?
678.630 Can State merit staff still work in a one-stop center where 
the operator is not a governmental entity?
678.635 What is the compliance date of the provisions of this 
subpart?
Subpart E--One-Stop Operating Costs
678.700 What are the one-stop infrastructure costs?
678.705 What guidance must the Governor issue regarding one-stop 
infrastructure funding?
678.710 How are infrastructure costs funded?
678.715 How are one-stop infrastructure costs funded in the local 
funding mechanism?
678.720 What funds are used to pay for infrastructure costs in the 
local one-stop infrastructure funding mechanism?
678.725 What happens if consensus on infrastructure funding is not 
reached at the local level between the Local Workforce Development 
Board, chief elected officials, and one-stop partners?
678.730 What is the State one-stop infrastructure funding mechanism?
678.731 What are the steps to determine the amount to be paid under 
the State one-stop infrastructure funding mechanism?
678.735 How are infrastructure cost budgets for the one-stop centers 
in a local area determined in the State one-stop infrastructure 
funding mechanism?
678.736 How does the Governor establish a cost allocation 
methodology used to determine the one-stop partner programs' 
proportionate shares of infrastructure costs under the State one-
stop infrastructure funding mechanism?
678.737 How are one-stop partner programs' proportionate shares of 
infrastructure costs determined under the State one-stop 
infrastructure funding mechanism?
678.738 How are statewide caps on the contributions for one-stop 
infrastructure funding determined in the State one-stop 
infrastructure funding mechanism?
678.740 What funds are used to pay for infrastructure costs in the 
State one-stop infrastructure funding mechanism?
678.745 What factors does the State Workforce Development Board use 
to develop the formula described in Workforce Innovation and 
Opportunity Act, which is used by the Governor to determine the 
appropriate one-stop infrastructure budget for each local area 
operating under the State infrastructure funding mechanism, if no 
reasonably implementable locally negotiated budget exists?
678.750 When and how can a one-stop partner appeal a one-stop 
infrastructure amount designated by the State under the State 
infrastructure funding mechanism?
678.755 What are the required elements regarding infrastructure 
funding that must be included in the one-stop Memorandum of 
Understanding?
678.760 How do one-stop partners jointly fund other shared costs 
under the Memorandum of Understanding?
Subpart F--One-Stop Certification
678.800 How are one-stop centers and one-stop delivery systems 
certified for effectiveness, physical and programmatic 
accessibility, and continuous improvement?
Subpart G--Common Identifier
678.900 What is the common identifier to be used by each one-stop 
delivery system?

    Authority: Secs. 503, 107, 121, 134, 189, Pub. L. 113-128, 128 
Stat. 1425 (Jul. 22, 2014).

Subpart A--General Description of the One-Stop Delivery System


Sec.  678.300  What is the one-stop delivery system?

    (a) The one-stop delivery system brings together workforce 
development, educational, and other human resource services in a 
seamless customer-focused service delivery network that enhances access 
to the programs' services and improves long-term employment outcomes 
for individuals receiving assistance. One-stop partners administer 
separately funded programs as a set of integrated streamlined services 
to customers.
    (b) Title I of the Workforce Innovation and Opportunity Act (WIOA) 
assigns responsibilities at the local, State, and Federal level to 
ensure the creation and maintenance of a one-stop delivery system that 
enhances the range and quality of education and workforce development 
services that employers and individual customers can access.
    (c) The system must include at least one comprehensive physical 
center in each local area as described in Sec.  678.305.
    (d) The system may also have additional arrangements to supplement 
the comprehensive center. These arrangements include:
    (1) An affiliated site or a network of affiliated sites, where one 
or more partners make programs, services, and activities available, as 
described in Sec.  678.310;
    (2) A network of eligible one-stop partners, as described in 
Sec. Sec.  678.400 through 678.410, through which each partner provides 
one or more of the programs, services, and activities that are linked, 
physically or technologically, to an affiliated site or access point 
that assures customers are provided information on the availability of 
career services, as well as other program services and activities, 
regardless of where they initially enter the public workforce system in 
the local area; and
    (3) Specialized centers that address specific needs, including 
those of dislocated workers, youth, or key industry sectors, or 
clusters.
    (e) Required one-stop partner programs must provide access to 
programs, services, and activities through electronic means if 
applicable and practicable. This is in addition to providing access to 
services through the mandatory comprehensive physical one-stop center 
and any affiliated sites or specialized centers. The provision of 
programs and services by electronic methods such as Web sites, 
telephones, or other means must improve the efficiency, coordination, 
and quality of one-stop partner services. Electronic delivery must not 
replace access to such services at a comprehensive one-stop center or 
be a substitute to making services available at an affiliated site if 
the partner is participating in an

[[Page 56010]]

affiliated site. Electronic delivery systems must be in compliance with 
the nondiscrimination and equal opportunity provisions of WIOA sec. 188 
and its implementing regulations at 29 CFR part 38.
    (f) The design of the local area's one-stop delivery system must be 
described in the Memorandum of Understanding (MOU) executed with the 
one-stop partners, described in Sec.  678.500.


Sec.  678.305  What is a comprehensive one-stop center and what must be 
provided there?

    (a) A comprehensive one-stop center is a physical location where 
job seeker and employer customers can access the programs, services, 
and activities of all required one-stop partners. A comprehensive one-
stop center must have at least one title I staff person physically 
present.
    (b) The comprehensive one-stop center must provide:
    (1) Career services, described in Sec.  678.430;
    (2) Access to training services described in Sec.  680.200 of this 
chapter;
    (3) Access to any employment and training activities carried out 
under sec. 134(d) of WIOA;
    (4) Access to programs and activities carried out by one-stop 
partners listed in Sec. Sec.  678.400 through 678.410, including the 
Employment Service program authorized under the Wagner-Peyser Act, as 
amended by WIOA title III (Wagner-Peyser Act Employment Service 
program); and
    (5) Workforce and labor market information.
    (c) Customers must have access to these programs, services, and 
activities during regular business days at a comprehensive one-stop 
center. The Local Workforce Development Board (WDB) may establish other 
service hours at other times to accommodate the schedules of 
individuals who work on regular business days. The State WDB will 
evaluate the hours of access to service as part of the evaluation of 
effectiveness in the one-stop certification process described in Sec.  
678.800(b).
    (d) ``Access'' to each partner program and its services means:
    (1) Having a program staff member physically present at the one-
stop center;
    (2) Having a staff member from a different partner program 
physically present at the one-stop center appropriately trained to 
provide information to customers about the programs, services, and 
activities available through partner programs; or
    (3) Making available a direct linkage through technology to program 
staff who can provide meaningful information or services.
    (i) A ``direct linkage'' means providing direct connection at the 
one-stop center, within a reasonable time, by phone or through a real-
time Web-based communication to a program staff member who can provide 
program information or services to the customer.
    (ii) A ``direct linkage'' cannot exclusively be providing a phone 
number or computer Web site or providing information, pamphlets, or 
materials.
    (e) All comprehensive one-stop centers must be physically and 
programmatically accessible to individuals with disabilities, as 
described in 29 CFR part 38, the implementing regulations of WIOA sec. 
188.


Sec.  678.310  What is an affiliated site and what must be provided 
there?

    (a) An affiliated site, or affiliate one-stop center, is a site 
that makes available to job seeker and employer customers one or more 
of the one-stop partners' programs, services, and activities. An 
affiliated site does not need to provide access to every required one-
stop partner program. The frequency of program staff's physical 
presence in the affiliated site will be determined at the local level. 
Affiliated sites are access points in addition to the comprehensive 
one-stop center(s) in each local area. If used by local areas as a part 
of the service delivery strategy, affiliate sites must be implemented 
in a manner that supplements and enhances customer access to services.
    (b) As described in Sec.  678.315, Wagner-Peyser Act employment 
services cannot be a stand-alone affiliated site.
    (c) States, in conjunction with the Local WDBs, must examine lease 
agreements and property holdings throughout the one-stop delivery 
system in order to use property in an efficient and effective way. 
Where necessary and appropriate, States and Local WDBs must take 
expeditious steps to align lease expiration dates with efforts to 
consolidate one-stop operations into service points where Wagner-Peyser 
Act employment services are colocated as soon as reasonably possible. 
These steps must be included in the State Plan.
    (d) All affiliated sites must be physically and programmatically 
accessible to individuals with disabilities, as described in 29 CFR 
part 38, the implementing regulations of WIOA sec. 188.


Sec.  678.315  Can a stand-alone Wagner-Peyser Act Employment Service 
office be designated as an affiliated one-stop site?

    (a) Separate stand-alone Wagner-Peyser Act Employment Service 
offices are not permitted under WIOA, as also described in Sec.  
652.202 of this chapter.
    (b) If Wagner-Peyser Act employment services are provided at an 
affiliated site, there must be at least one or more other partners in 
the affiliated site with a physical presence of combined staff more 
than 50 percent of the time the center is open. Additionally, the other 
partner must not be the partner administering local veterans' 
employment representatives, disabled veterans' outreach program 
specialists, or unemployment compensation programs. If Wagner-Peyser 
Act employment services and any of these 3 programs are provided at an 
affiliated site, an additional partner or partners must have a presence 
of combined staff in the center more than 50 percent of the time the 
center is open.


Sec.  678.320  Are there any requirements for networks of eligible one-
stop partners or specialized centers?

    Any network of one-stop partners or specialized centers, as 
described in Sec.  678.300(d)(3), must be connected to the 
comprehensive one-stop center and any appropriate affiliate one-stop 
centers, for example, by having processes in place to make referrals to 
these centers and the partner programs located in them. Wagner-Peyser 
Act employment services cannot stand alone in a specialized center. 
Just as described in Sec.  678.315 for an affiliated site, a 
specialized center must include other programs besides Wagner-Peyser 
Act employment services, local veterans' employment representatives, 
disabled veterans' outreach program specialists, and unemployment 
compensation.

Subpart B--One-Stop Partners and the Responsibilities of Partners


Sec.  678.400  Who are the required one-stop partners?

    (a) Section 121(b)(1)(B) of WIOA identifies the entities that are 
required partners in the local one-stop delivery systems.
    (b) The required partners are the entities responsible for 
administering the following programs and activities in the local area:
    (1) Programs authorized under title I of WIOA, including:
    (i) Adults;
    (ii) Dislocated workers;
    (iii) Youth;
    (iv) Job Corps;
    (v) YouthBuild;
    (vi) Native American programs; and

[[Page 56011]]

    (vii) Migrant and seasonal farmworker programs;
    (2) The Wagner-Peyser Act Employment Service program authorized 
under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), as amended by WIOA 
title III;
    (3) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA;
    (4) The Vocational Rehabilitation (VR) program authorized under 
title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), as 
amended by WIOA title IV;
    (5) The Senior Community Service Employment Program authorized 
under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et 
seq.);
    (6) Career and technical education programs at the postsecondary 
level authorized under the Carl D. Perkins Career and Technical 
Education Act of 2006 (20 U.S.C. 2301 et seq.);
    (7) Trade Adjustment Assistance activities authorized under chapter 
2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
    (8) Jobs for Veterans State Grants programs authorized under 
chapter 41 of title 38, U.S.C.;
    (9) Employment and training activities carried out under the 
Community Services Block Grant (42 U.S.C. 9901 et seq.);
    (10) Employment and training activities carried out by the 
Department of Housing and Urban Development;
    (11) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law);
    (12) Programs authorized under sec. 212 of the Second Chance Act of 
2007 (42 U.S.C. 17532); and
    (13) Temporary Assistance for Needy Families (TANF) authorized 
under part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.), unless exempted by the Governor under Sec.  678.405(b).


Sec.  678.405  Is Temporary Assistance for Needy Families a required 
one-stop partner?

    (a) Yes, TANF, authorized under part A of title IV of the Social 
Security Act (42 U.S.C. 601 et seq.), is a required partner.
    (b) The Governor may determine that TANF will not be a required 
partner in the State, or within some specific local areas in the State. 
In this instance, the Governor must notify the Secretaries of the U.S. 
Departments of Labor and Health and Human Services in writing of this 
determination.
    (c) In States, or local areas within a State, where the Governor 
has determined that TANF is not required to be a partner, local TANF 
programs may still work in collaboration or partnership with the local 
one-stop centers to deliver employment and training services to the 
TANF population unless inconsistent with the Governor's direction.


Sec.  678.410  What other entities may serve as one-stop partners?

    (a) Other entities that carry out a workforce development program, 
including Federal, State, or local programs and programs in the private 
sector, may serve as additional partners in the one-stop delivery 
system if the Local WDB and chief elected official(s) approve the 
entity's participation.
    (b) Additional partners may include, but are not limited to:
    (1) Employment and training programs administered by the Social 
Security Administration, including the Ticket to Work and Self-
Sufficiency Program established under sec. 1148 of the Social Security 
Act (42 U.S.C. 1320b-19);
    (2) Employment and training programs carried out by the Small 
Business Administration;
    (3) Supplemental Nutrition Assistance Program (SNAP) employment and 
training programs, authorized under secs. 6(d)(4) and 6(o) of the Food 
and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
    (4) Client Assistance Program authorized under sec. 112 of the 
Rehabilitation Act of 1973 (29 U.S.C. 732);
    (5) Programs authorized under the National and Community Service 
Act of 1990 (42 U.S.C. 12501 et seq.); and
    (6) Other appropriate Federal, State or local programs, including, 
but not limited to, employment, education, and training programs 
provided by public libraries or in the private sector.


Sec.  678.415  What entity serves as the one-stop partner for a 
particular program in the local area?

    (a) The entity that carries out the program and activities listed 
in Sec.  678.400 or Sec.  678.410, and therefore serves as the one-stop 
partner, is the grant recipient, administrative entity, or organization 
responsible for administering the funds of the specified program in the 
local area. The term ``entity'' does not include the service providers 
that contract with, or are subrecipients of, the local administrative 
entity. For programs that do not include local administrative entities, 
the responsible State agency must be the partner. Specific entities for 
particular programs are identified in paragraphs (b) through (e) of 
this section. If a program or activity listed in Sec.  678.400 is not 
carried out in a local area, the requirements relating to a required 
one-stop partner are not applicable to such program or activity in that 
local one-stop delivery system.
    (b) For title II of WIOA, the entity or agency that carries out the 
program for the purposes of paragraph (a) of this section is the sole 
entity or agency in the State or outlying area responsible for 
administering or supervising policy for adult education and literacy 
activities in the State or outlying area. The State eligible entity or 
agency may delegate its responsibilities under paragraph (a) of this 
section to one or more eligible providers or consortium of eligible 
providers.
    (c) For the VR program, authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV, the entity 
that carries out the program for the purposes of paragraph (a) of this 
section is the designated State agencies or designated State units 
specified under sec. 101(a)(2) of the Rehabilitation Act that is 
primarily concerned with vocational rehabilitation, or vocational and 
other rehabilitation, of individuals with disabilities.
    (d) Under WIOA title I, the national programs, including Job Corps, 
the Native American program, YouthBuild, and Migrant and Seasonal 
Farmworker programs are required one-stop partners. The entity for the 
Native American program, YouthBuild, and Migrant and Seasonal 
Farmworker programs is the grantee of those respective programs. The 
entity for Job Corps is the Job Corps center.
    (e) For the Carl D. Perkins Career and Technical Education Act of 
2006, the entity that carries out the program for the purposes of 
paragraph (a) of this section is the eligible recipient or recipients 
at the postsecondary level, or a consortium of eligible recipients at 
the postsecondary level in the local area. The eligible recipient at 
the postsecondary level may also request assistance from the State 
eligible agency in completing its responsibilities under paragraph (a) 
of this section.


Sec.  678.420  What are the roles and responsibilities of the required 
one-stop partners?

    Each required partner must:
    (a) Provide access to its programs or activities through the one-
stop delivery system, in addition to any other appropriate locations;
    (b) Use a portion of funds made available to the partner's program, 
to the extent consistent with the Federal law authorizing the partner's 
program and

[[Page 56012]]

with Federal cost principles in 2 CFR parts 200 and 2900 (requiring, 
among other things, that costs are allowable, reasonable, necessary, 
and allocable), to:
    (1) Provide applicable career services; and
    (2) Work collaboratively with the State and Local WDBs to establish 
and maintain the one-stop delivery system. This includes jointly 
funding the one-stop infrastructure through partner contributions that 
are based upon:
    (i) A reasonable cost allocation methodology by which 
infrastructure costs are charged to each partner based on proportionate 
use and relative benefit received;
    (ii) Federal cost principles; and
    (iii) Any local administrative cost requirements in the Federal law 
authorizing the partner's program. (This is further described in Sec.  
678.700.)
    (c) Enter into an MOU with the Local WDB relating to the operation 
of the one-stop delivery system that meets the requirements of Sec.  
678.500(b);
    (d) Participate in the operation of the one-stop delivery system 
consistent with the terms of the MOU, requirements of authorizing laws, 
the Federal cost principles, and all other applicable legal 
requirements; and
    (e) Provide representation on the State and Local WDBs as required 
and participate in Board committees as needed.


Sec.  678.425  What are the applicable career services that must be 
provided through the one-stop delivery system by required one-stop 
partners?

    (a) The applicable career services to be delivered by required one-
stop partners are those services listed in Sec.  678.430 that are 
authorized to be provided under each partner's program.
    (b) One-stop centers provide services to individual customers based 
on individual needs, including the seamless delivery of multiple 
services to individual customers. There is no required sequence of 
services.


Sec.  678.430  What are career services?

    Career services, as identified in sec. 134(c)(2) of WIOA, consist 
of three types:
    (a) Basic career services must be made available and, at a minimum, 
must include the following services, as consistent with allowable 
program activities and Federal cost principles:
    (1) Determinations of whether the individual is eligible to receive 
assistance from the adult, dislocated worker, or youth programs;
    (2) Outreach, intake (including worker profiling), and orientation 
to information and other services available through the one-stop 
delivery system. For the TANF program, States must provide individuals 
with the opportunity to initiate an application for TANF assistance and 
non-assistance benefits and services, which could be implemented 
through the provision of paper application forms or links to the 
application Web site;
    (3) Initial assessment of skill levels including literacy, 
numeracy, and English language proficiency, as well as aptitudes, 
abilities (including skills gaps), and supportive services needs;
    (4) Labor exchange services, including--
    (i) Job search and placement assistance, and, when needed by an 
individual, career counseling, including--
    (A) Provision of information on in-demand industry sectors and 
occupations (as defined in sec. 3(23) of WIOA); and
    (B) Provision of information on nontraditional employment; and
    (ii) Appropriate recruitment and other business services on behalf 
of employers, including information and referrals to specialized 
business services other than those traditionally offered through the 
one-stop delivery system;
    (5) Provision of referrals to and coordination of activities with 
other programs and services, including programs and services within the 
one-stop delivery system and, when appropriate, other workforce 
development programs;
    (6) Provision of workforce and labor market employment statistics 
information, including the provision of accurate information relating 
to local, regional, and national labor market areas, including--
    (i) Job vacancy listings in labor market areas;
    (ii) Information on job skills necessary to obtain the vacant jobs 
listed; and
    (iii) Information relating to local occupations in demand and the 
earnings, skill requirements, and opportunities for advancement for 
those jobs;
    (7) Provision of performance information and program cost 
information on eligible providers of education, training, and workforce 
services by program and type of providers;
    (8) Provision of information, in usable and understandable formats 
and languages, about how the local area is performing on local 
performance accountability measures, as well as any additional 
performance information relating to the area's one-stop delivery 
system;
    (9) Provision of information, in usable and understandable formats 
and languages, relating to the availability of supportive services or 
assistance, and appropriate referrals to those services and assistance, 
including: Child care; child support; medical or child health 
assistance available through the State's Medicaid program and 
Children's Health Insurance Program; benefits under SNAP; assistance 
through the earned income tax credit; and assistance under a State 
program for TANF, and other supportive services and transportation 
provided through that program;
    (10) Provision of information and meaningful assistance to 
individuals seeking assistance in filing a claim for unemployment 
compensation.
    (i) ``Meaningful assistance'' means:
    (A) Providing assistance on-site using staff who are well-trained 
in unemployment compensation claims filing and the rights and 
responsibilities of claimants; or
    (B) Providing assistance by phone or via other technology, as long 
as the assistance is provided by trained and available staff and within 
a reasonable time.
    (ii) The costs associated in providing this assistance may be paid 
for by the State's unemployment insurance program, or the WIOA adult or 
dislocated worker programs, or some combination thereof.
    (11) Assistance in establishing eligibility for programs of 
financial aid assistance for training and education programs not 
provided under WIOA.
    (b) Individualized career services must be made available if 
determined to be appropriate in order for an individual to obtain or 
retain employment. These services include the following services, as 
consistent with program requirements and Federal cost principles:
    (1) Comprehensive and specialized assessments of the skill levels 
and service needs of adults and dislocated workers, which may include--
    (i) Diagnostic testing and use of other assessment tools; and
    (ii) In-depth interviewing and evaluation to identify employment 
barriers and appropriate employment goals;
    (2) Development of an individual employment plan, to identify the 
employment goals, appropriate achievement objectives, and appropriate 
combination of services for the participant to achieve his or her 
employment goals, including the list of, and information about, the 
eligible training providers (as described in Sec.  680.180 of this 
chapter);

[[Page 56013]]

    (3) Group counseling;
    (4) Individual counseling;
    (5) Career planning;
    (6) Short-term pre-vocational services including development of 
learning skills, communication skills, interviewing skills, 
punctuality, personal maintenance skills, and professional conduct 
services to prepare individuals for unsubsidized employment or 
training;
    (7) Internships and work experiences that are linked to careers (as 
described in Sec.  680.170 of this chapter);
    (8) Workforce preparation activities;
    (9) Financial literacy services as described in sec. 129(b)(2)(D) 
of WIOA and Sec.  681.500 of this chapter;
    (10) Out-of-area job search assistance and relocation assistance; 
and
    (11) English language acquisition and integrated education and 
training programs.
    (c) Follow-up services must be provided, as appropriate, including: 
Counseling regarding the workplace, for participants in adult or 
dislocated worker workforce investment activities who are placed in 
unsubsidized employment, for up to 12 months after the first day of 
employment.
    (d) In addition to the requirements in paragraph (a)(2) of this 
section, TANF agencies must identify employment services and related 
support being provided by the TANF program (within the local area) that 
qualify as career services and ensure access to them via the local one-
stop delivery system.


Sec.  678.435  What are the business services provided through the one-
stop delivery system, and how are they provided?

    (a) Certain career services must be made available to local 
employers, specifically labor exchange activities and labor market 
information described in Sec.  678.430(a)(4)(ii) and (a)(6). Local 
areas must establish and develop relationships and networks with large 
and small employers and their intermediaries. Local areas also must 
develop, convene, or implement industry or sector partnerships.
    (b) Customized business services may be provided to employers, 
employer associations, or other such organizations. These services are 
tailored for specific employers and may include:
    (1) Customized screening and referral of qualified participants in 
training services to employers;
    (2) Customized services to employers, employer associations, or 
other such organizations, on employment-related issues;
    (3) Customized recruitment events and related services for 
employers including targeted job fairs;
    (4) Human resource consultation services, including but not limited 
to assistance with:
    (i) Writing/reviewing job descriptions and employee handbooks;
    (ii) Developing performance evaluation and personnel policies;
    (iii) Creating orientation sessions for new workers;
    (iv) Honing job interview techniques for efficiency and compliance;
    (v) Analyzing employee turnover;
    (vi) Creating job accommodations and using assistive technologies; 
or
    (vii) Explaining labor and employment laws to help employers comply 
with discrimination, wage/hour, and safety/health regulations;
    (5) Customized labor market information for specific employers, 
sectors, industries or clusters; and
    (6) Other similar customized services.
    (c) Local areas may also provide other business services and 
strategies that meet the workforce investment needs of area employers, 
in accordance with partner programs' statutory requirements and 
consistent with Federal cost principles. These business services may be 
provided through effective business intermediaries working in 
conjunction with the Local WDB, or through the use of economic 
development, philanthropic, and other public and private resources in a 
manner determined appropriate by the Local WDB and in cooperation with 
the State. Allowable activities, consistent with each partner's 
authorized activities, include, but are not limited to:
    (1) Developing and implementing industry sector strategies 
(including strategies involving industry partnerships, regional skills 
alliances, industry skill panels, and sectoral skills partnerships);
    (2) Customized assistance or referral for assistance in the 
development of a registered apprenticeship program;
    (3) Developing and delivering innovative workforce investment 
services and strategies for area employers, which may include career 
pathways, skills upgrading, skill standard development and 
certification for recognized postsecondary credential or other employer 
use, and other effective initiatives for meeting the workforce 
investment needs of area employers and workers;
    (4) Assistance to area employers in managing reductions in force in 
coordination with rapid response activities and with strategies for the 
aversion of layoffs, which may include strategies such as early 
identification of firms at risk of layoffs, use of feasibility studies 
to assess the needs of and options for at-risk firms, and the delivery 
of employment and training activities to address risk factors;
    (5) The marketing of business services to appropriate area 
employers, including small and mid-sized employers; and
    (6) Assisting employers with accessing local, State, and Federal 
tax credits.
    (d) All business services and strategies must be reflected in the 
local plan, described in Sec.  679.560(b)(3) of this chapter.


Sec.  678.440  When may a fee be charged for the business services in 
this subpart?

    (a) There is no requirement that a fee-for-service be charged to 
employers.
    (b) No fee may be charged for services provided in Sec.  
678.435(a).
    (c) A fee may be charged for services provided under Sec.  
678.435(b) and (c). Services provided under Sec.  678.435(c) may be 
provided through effective business intermediaries working in 
conjunction with the Local WDB and may also be provided on a fee-for-
service basis or through the leveraging of economic development, 
philanthropic, and other public and private resources in a manner 
determined appropriate by the Local WDB. The Local WDB may examine the 
services provided compared with the assets and resources available 
within the local one-stop delivery system and through its partners to 
determine an appropriate cost structure for services, if any.
    (d) Any fees earned are recognized as program income and must be 
expended by the partner in accordance with the partner program's 
authorizing statute, implementing regulations, and Federal cost 
principles identified in Uniform Guidance.

Subpart C--Memorandum of Understanding for the One-Stop Delivery 
System


Sec.  678.500  What is the Memorandum of Understanding for the one-stop 
delivery system and what must be included in the Memorandum of 
Understanding?

    (a) The MOU is the product of local discussion and negotiation, and 
is an agreement developed and executed between the Local WDB and the 
one-stop partners, with the agreement of the chief elected official and 
the one-stop partners, relating to the operation of the one-stop 
delivery system in the local area. Two or more local areas in a region 
may develop a single joint MOU, if they are in a region that has 
submitted a regional plan under sec. 106 of WIOA.
    (b) The MOU must include:

[[Page 56014]]

    (1) A description of services to be provided through the one-stop 
delivery system, including the manner in which the services will be 
coordinated and delivered through the system;
    (2) Agreement on funding the costs of the services and the 
operating costs of the system, including:
    (i) Funding of infrastructure costs of one-stop centers in 
accordance with Sec. Sec.  678.700 through 678.755; and
    (ii) Funding of the shared services and operating costs of the one-
stop delivery system described in Sec.  678.760;
    (3) Methods for referring individuals between the one-stop 
operators and partners for appropriate services and activities;
    (4) Methods to ensure that the needs of workers, youth, and 
individuals with barriers to employment, including individuals with 
disabilities, are addressed in providing access to services, including 
access to technology and materials that are available through the one-
stop delivery system;
    (5) The duration of the MOU and procedures for amending it; and
    (6) Assurances that each MOU will be reviewed, and if substantial 
changes have occurred, renewed, not less than once every 3-year period 
to ensure appropriate funding and delivery of services.
    (c) The MOU may contain any other provisions agreed to by the 
parties that are consistent with WIOA title I, the authorizing statutes 
and regulations of one-stop partner programs, and the WIOA regulations.
    (d) When fully executed, the MOU must contain the signatures of the 
Local WDB, one-stop partners, the chief elected official(s), and the 
time period in which the agreement is effective. The MOU must be 
updated not less than every 3 years to reflect any changes in the 
signatory official of the Board, one-stop partners, and chief elected 
officials, or one-stop infrastructure funding.
    (e) If a one-stop partner appeal to the State regarding 
infrastructure costs, using the process described in Sec.  678.750, 
results in a change to the one-stop partner's infrastructure cost 
contributions, the MOU must be updated to reflect the final one-stop 
partner infrastructure cost contributions.


Sec.  678.505  Is there a single Memorandum of Understanding for the 
local area, or must there be different Memoranda of Understanding 
between the Local Workforce Development Board and each partner?

    (a) A single ``umbrella'' MOU may be developed that addresses the 
issues relating to the local one-stop delivery system for the Local 
WDB, chief elected official and all partners. Alternatively, the Local 
WDB (with agreement of chief elected official) may enter into separate 
agreements between each partner or groups of partners.
    (b) Under either approach, the requirements described in Sec.  
678.500 apply. Since funds are generally appropriated annually, the 
Local WDB may negotiate financial agreements with each partner annually 
to update funding of services and operating costs of the system under 
the MOU.


Sec.  678.510  How must the Memorandum of Understanding be negotiated?

    (a) WIOA emphasizes full and effective partnerships between Local 
WDBs, chief elected officials, and one-stop partners. Local WDBs and 
partners must enter into good-faith negotiations. Local WDBs, chief 
elected officials, and one-stop partners may also request assistance 
from a State agency responsible for administering the partner program, 
the Governor, State WDB, or other appropriate parties on other aspects 
of the MOU.
    (b) Local WDBs and one-stop partners must establish, in the MOU, 
how they will fund the infrastructure costs and other shared costs of 
the one-stop centers. If agreement regarding infrastructure costs is 
not reached when other sections of the MOU are ready, an interim 
infrastructure funding agreement may be included instead, as described 
in Sec.  678.715(c). Once agreement on infrastructure funding is 
reached, the Local WDB and one-stop partners must amend the MOU to 
include the infrastructure funding of the one-stop centers. 
Infrastructure funding is described in detail in subpart E of this 
part.
    (c) The Local WDB must report to the State WDB, Governor, and 
relevant State agency when MOU negotiations with one-stop partners have 
reached an impasse.
    (1) The Local WDB and partners must document the negotiations and 
efforts that have taken place in the MOU. The State WDB, one-stop 
partner programs, and the Governor may consult with the appropriate 
Federal agencies to address impasse situations related to issues other 
than infrastructure funding after attempting to address the impasse. 
Impasses related to infrastructure cost funding must be resolved using 
the State infrastructure cost funding mechanism described in Sec.  
678.730.
    (2) The Local WDB must report failure to execute an MOU with a 
required partner to the Governor, State WDB, and the State agency 
responsible for administering the partner's program. Additionally, if 
the State cannot assist the Local WDB in resolving the impasse, the 
Governor or the State WDB must report the failure to the Secretary of 
Labor and to the head of any other Federal agency with responsibility 
for oversight of a partner's program.

Subpart D--One-Stop Operators


Sec.  678.600  Who may operate one-stop centers?

    (a) One-stop operators may be a single entity (public, private, or 
nonprofit) or a consortium of entities. If the consortium of entities 
is one of one-stop partners, it must include a minimum of three of the 
one-stop partners described in Sec.  678.400.
    (b) The one-stop operator may operate one or more one-stop centers. 
There may be more than one one-stop operator in a local area.
    (c) The types of entities that may be a one-stop operator include:
    (1) An institution of higher education;
    (2) An Employment Service State agency established under the 
Wagner-Peyser Act;
    (3) A community-based organization, nonprofit organization, or 
workforce intermediary;
    (4) A private for-profit entity;
    (5) A government agency;
    (6) A Local WDB, with the approval of the chief elected official 
and the Governor; or
    (7) Another interested organization or entity, which is capable of 
carrying out the duties of the one-stop operator. Examples may include 
a local chamber of commerce or other business organization, or a labor 
organization.
    (d) Elementary schools and secondary schools are not eligible as 
one-stop operators, except that a nontraditional public secondary 
school such as a night school, adult school, or an area career and 
technical education school may be selected.
    (e) The State and Local WDBs must ensure that, in carrying out WIOA 
programs and activities, one-stop operators:
    (1) Disclose any potential conflicts of interest arising from the 
relationships of the operators with particular training service 
providers or other service providers (further discussed in Sec.  
679.430 of this chapter);
    (2) Do not establish practices that create disincentives to 
providing services to individuals with barriers to employment who may 
require longer-term career and training services; and
    (3) Comply with Federal regulations and procurement policies 
relating to the calculation and use of profits, including those at 
Sec.  683.295 of this chapter, the

[[Page 56015]]

Uniform Guidance at 2 CFR part 200, and other applicable regulations 
and policies.


Sec.  678.605  How is the one-stop operator selected?

    (a) Consistent with paragraphs (b) and (c) of this section, the 
Local WDB must select the one-stop operator through a competitive 
process, as required by sec. 121(d)(2)(A) of WIOA, at least once every 
4 years. A State may require, or a Local WDB may choose to implement, a 
competitive selection process more than once every 4 years.
    (b) In instances in which a State is conducting the competitive 
process described in paragraph (a) of this section, the State must 
follow the same policies and procedures it uses for procurement with 
non-Federal funds.
    (c) All other non-Federal entities, including subrecipients of a 
State (such as local areas), must use a competitive process based on 
local procurement policies and procedures and the principles of 
competitive procurement in the Uniform Guidance set out at 2 CFR 
200.318 through 200.326. All references to ``noncompetitive proposals'' 
in the Uniform Guidance at 2 CFR 200.320(f) will be read as ``sole 
source procurement'' for the purposes of implementing this section.
    (d) Entities must prepare written documentation explaining the 
determination concerning the nature of the competitive process to be 
followed in selecting a one-stop operator.


Sec.  678.610  When is the sole-source selection of one-stop operators 
appropriate, and how is it conducted?

    (a) States may select a one-stop operator through sole source 
selection when allowed under the same policies and procedures used for 
competitive procurement with non-Federal funds, while other non-Federal 
entities including subrecipients of a State (such as local areas) may 
select a one-stop operator through sole selection when consistent with 
local procurement policies and procedures and the Uniform Guidance set 
out at 2 CFR 200.320.
    (b) In the event that sole source procurement is determined 
necessary and reasonable, in accordance with Sec.  678.605(c), written 
documentation must be prepared and maintained concerning the entire 
process of making such a selection.
    (c) Such sole source procurement must include appropriate conflict 
of interest policies and procedures. These policies and procedures must 
conform to the specifications in Sec.  679.430 of this chapter for 
demonstrating internal controls and preventing conflict of interest.
    (d) A Local WDB may be selected as a one-stop operator through sole 
source procurement only with agreement of the chief elected official in 
the local area and the Governor. The Local WDB must establish 
sufficient conflict of interest policies and procedures and these 
policies and procedures must be approved by the Governor.


Sec.  678.615  May an entity currently serving as one-stop operator 
compete to be a one-stop operator under the procurement requirements of 
this subpart?

    (a) Local WDBs may compete for and be selected as one-stop 
operators, as long as appropriate firewalls and conflict of interest 
policies and procedures are in place. These policies and procedures 
must conform to the specifications in Sec.  679.430 of this chapter for 
demonstrating internal controls and preventing conflict of interest.
    (b) State and local agencies may compete for and be selected as 
one-stop operators by the Local WDB, as long as appropriate firewalls 
and conflict of interest policies and procedures are in place. These 
policies and procedures must conform to the specifications in Sec.  
679.430 of this chapter for demonstrating internal controls and 
preventing conflict of interest.
    (c) In the case of single-area States where the State WDB serves as 
the Local WDB, the State agency is eligible to compete for and be 
selected as operator as long as appropriate firewalls and conflict of 
interest policies are in place and followed for the competition. These 
policies and procedures must conform to the specifications in Sec.  
679.430 of this chapter for demonstrating internal controls and 
preventing conflicts of interest.


Sec.  678.620  What is the one-stop operator's role?

    (a) At a minimum, the one-stop operator must coordinate the service 
delivery of required one-stop partners and service providers. Local 
WDBs may establish additional roles of one-stop operator, including, 
but not limited to: Coordinating service providers across the one-stop 
delivery system, being the primary provider of services within the 
center, providing some of the services within the center, or 
coordinating service delivery in a multi-center area, which may include 
affiliated sites. The competition for a one-stop operator must clearly 
articulate the role of the one-stop operator.
    (b)(1) Subject to paragraph (b)(2) of this section, a one-stop 
operator may not perform the following functions: Convene system 
stakeholders to assist in the development of the local plan; prepare 
and submit local plans (as required under sec. 107 of WIOA); be 
responsible for oversight of itself; manage or significantly 
participate in the competitive selection process for one-stop 
operators; select or terminate one-stop operators, career services, and 
youth providers; negotiate local performance accountability measures; 
or develop and submit budget for activities of the Local WDB in the 
local area.
    (2) An entity serving as a one-stop operator, that also serves a 
different role within the one-stop delivery system, may perform some or 
all of these functions when it is acting in its other role, if it has 
established sufficient firewalls and conflict of interest policies and 
procedures. The policies and procedures must conform to the 
specifications in Sec.  679.430 of this chapter for demonstrating 
internal controls and preventing conflict of interest.


Sec.  678.625  Can a one-stop operator also be a service provider?

    Yes, but there must be appropriate firewalls in place in regards to 
the competition, and subsequent oversight, monitoring, and evaluation 
of performance of the service provider. The operator cannot develop, 
manage, or conduct the competition of a service provider in which it 
intends to compete. In cases where an operator is also a service 
provider, there must be firewalls and internal controls within the 
operator-service provider entity, as well as specific policies and 
procedures at the Local WDB level regarding oversight, monitoring, and 
evaluation of performance of the service provider. The firewalls must 
conform to the specifications in Sec.  679.430 of this chapter for 
demonstrating internal controls and preventing conflicts of interest.


Sec.  678.630  Can State merit staff still work in a one-stop center 
where the operator is not a governmental entity?

    Yes. State merit staff can continue to perform functions and 
activities in the one-stop center. The Local WDB and one-stop operator 
must establish a system for management of merit staff in accordance 
with State policies and procedures. Continued use of State merit staff 
for the provision of Wagner-Peyser Act services or services from other 
programs with merit staffing requirements must be included in the 
competition for and final contract with the one-stop operator when 
Wagner-Peyser Act services or services from

[[Page 56016]]

other programs with merit staffing requirements are being provided.


Sec.  678.635  What is the compliance date of the provisions of this 
subpart?

    (a) No later than July 1, 2017, one-stop operators selected under 
the competitive process described in this subpart must be in place and 
operating the one-stop center.
    (b) By November 17, 2016, every Local WDB must demonstrate it is 
taking steps to prepare for competition of its one-stop operator. This 
demonstration may include, but is not limited to, market research, 
requests for information, and conducting a cost and price analysis.

Subpart E--One-Stop Operating Costs


Sec.  678.700  What are the one-stop infrastructure costs?

    (a) Infrastructure costs of one-stop centers are nonpersonnel costs 
that are necessary for the general operation of the one-stop center, 
including:
    (1) Rental of the facilities;
    (2) Utilities and maintenance;
    (3) Equipment (including assessment-related products and assistive 
technology for individuals with disabilities); and
    (4) Technology to facilitate access to the one-stop center, 
including technology used for the center's planning and outreach 
activities.
    (b) Local WDBs may consider common identifier costs as costs of 
one-stop infrastructure.
    (c) Each entity that carries out a program or activities in a local 
one-stop center, described in Sec. Sec.  678.400 through 678.410, must 
use a portion of the funds available for the program and activities to 
maintain the one-stop delivery system, including payment of the 
infrastructure costs of one-stop centers. These payments must be in 
accordance with this subpart; Federal cost principles, which require 
that all costs must be allowable, reasonable, necessary, and allocable 
to the program; and all other applicable legal requirements.


Sec.  678.705  What guidance must the Governor issue regarding one-stop 
infrastructure funding?

    (a) The Governor, after consultation with chief elected officials, 
the State WDB, and Local WDBs, and consistent with guidance and 
policies provided by the State WDB, must develop and issue guidance for 
use by local areas, specifically:
    (1) Guidelines for State-administered one-stop partner programs for 
determining such programs' contributions to a one-stop delivery system, 
based on such programs' proportionate use of such system, and relative 
benefit received, consistent with Office of Management and Budget (OMB) 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards in 2 CFR part 200, including 
determining funding for the costs of infrastructure; and
    (2) Guidance to assist Local WDBs, chief elected officials, and 
one-stop partners in local areas in determining equitable and stable 
methods of funding the costs of infrastructure at one-stop centers 
based on proportionate use and relative benefit received, and 
consistent with Federal cost principles contained in the Uniform 
Guidance at 2 CFR part 200.
    (b) The guidance must include:
    (1) The appropriate roles of the one-stop partner programs in 
identifying one-stop infrastructure costs;
    (2) Approaches to facilitate equitable and efficient cost 
allocation that results in a reasonable cost allocation methodology 
where infrastructure costs are charged to each partner based on its 
proportionate use of the one-stop centers and relative benefit 
received, consistent with Federal cost principles at 2 CFR part 200; 
and
    (3) The timelines regarding notification to the Governor for not 
reaching local agreement and triggering the State funding mechanism 
described in Sec.  678.730, and timelines for a one-stop partner to 
submit an appeal in the State funding mechanism.


Sec.  678.710  How are infrastructure costs funded?

    Infrastructure costs are funded either through the local funding 
mechanism described in Sec.  678.715 or through the State funding 
mechanism described in Sec.  678.730.


Sec.  678.715  How are one-stop infrastructure costs funded in the 
local funding mechanism?

    (a) In the local funding mechanism, the Local WDB, chief elected 
officials, and one-stop partners agree to amounts and methods of 
calculating amounts each partner will contribute for one-stop 
infrastructure funding, include the infrastructure funding terms in the 
MOU, and sign the MOU. The local funding mechanism must meet all of the 
following requirements:
    (1) The infrastructure costs are funded through cash and fairly 
evaluated non-cash and third-party in-kind partner contributions and 
include any funding from philanthropic organizations or other private 
entities, or through other alternative financing options, to provide a 
stable and equitable funding stream for ongoing one-stop delivery 
system operations;
    (2) Contributions must be negotiated between one-stop partners, 
chief elected officials, and the Local WDB and the amount to be 
contributed must be included in the MOU;
    (3) The one-stop partner program's proportionate share of funding 
must be calculated in accordance with the Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards in 2 CFR part 200 based upon a reasonable cost allocation 
methodology whereby infrastructure costs are charged to each partner in 
proportion to its use of the one-stop center, relative to benefits 
received. Such costs must also be allowable, reasonable, necessary, and 
allocable;
    (4) Partner shares must be periodically reviewed and reconciled 
against actual costs incurred, and adjusted to ensure that actual costs 
charged to any one-stop partners are proportionate to the use of the 
one-stop center and relative to the benefit received by the one-stop 
partners and their respective programs or activities.
    (b) In developing the section of the MOU on one-stop infrastructure 
funding described in Sec.  678.755, the Local WDB and chief elected 
officials will:
    (1) Ensure that the one-stop partners adhere to the guidance 
identified in Sec.  678.705 on one-stop delivery system infrastructure 
costs.
    (2) Work with one-stop partners to achieve consensus and informally 
mediate any possible conflicts or disagreements among one-stop 
partners.
    (3) Provide technical assistance to new one-stop partners and local 
grant recipients to ensure that those entities are informed and 
knowledgeable of the elements contained in the MOU and the one-stop 
infrastructure costs arrangement.
    (c) The MOU may include an interim infrastructure funding 
agreement, including as much detail as the Local WDB has negotiated 
with one-stop partners, if all other parts of the MOU have been 
negotiated, in order to allow the partner programs to operate in the 
one-stop centers. The interim infrastructure funding agreement must be 
finalized within 6 months of when the MOU is signed. If the interim 
infrastructure funding agreement is not finalized within that 
timeframe, the Local WDB must notify the Governor, as described in 
Sec.  678.725.

[[Page 56017]]

Sec.  678.720  What funds are used to pay for infrastructure costs in 
the local one-stop infrastructure funding mechanism?

    (a) In the local funding mechanism, one-stop partner programs may 
determine what funds they will use to pay for infrastructure costs. The 
use of these funds must be in accordance with the requirements in this 
subpart, and with the relevant partner's authorizing statutes and 
regulations, including, for example, prohibitions against supplanting 
non-Federal resources, statutory limitations on administrative costs, 
and all other applicable legal requirements. In the case of partners 
administering programs authorized by title I of WIOA, these 
infrastructure costs may be considered program costs. In the case of 
partners administering adult education and literacy programs authorized 
by title II of WIOA, these funds must include Federal funds made 
available for the local administration of adult education and literacy 
programs authorized by title II of WIOA. These funds may also include 
non-Federal resources that are cash, in-kind or third-party 
contributions. In the case of partners administering the Carl D. 
Perkins Career and Technical Education Act of 2006, funds used to pay 
for infrastructure costs may include funds available for local 
administrative expenses, non-Federal resources that are cash, in-kind 
or third-party contributions, and may include other funds made 
available by the State.
    (b) There are no specific caps on the amount or percent of overall 
funding a one-stop partner may contribute to fund infrastructure costs 
under the local funding mechanism, except that contributions for 
administrative costs may not exceed the amount available for 
administrative costs under the authorizing statute of the partner 
program. However, amounts contributed for infrastructure costs must be 
allowable and based on proportionate use of the one-stop centers and 
relative benefit received by the partner program, taking into account 
the total cost of the one-stop infrastructure as well as alternate 
financing options, and must be consistent with 2 CFR part 200, 
including the Federal cost principles.
    (c) Cash, non-cash, and third-party in-kind contributions may be 
provided by one-stop partners to cover their proportionate share of 
infrastructure costs.
    (1) Cash contributions are cash funds provided to the Local WDB or 
its designee by one-stop partners, either directly or by an interagency 
transfer.
    (2) Non-cash contributions are comprised of--
    (i) Expenditures incurred by one-stop partners on behalf of the 
one-stop center; and
    (ii) Non-cash contributions or goods or services contributed by a 
partner program and used by the one-stop center.
    (3) Non-cash contributions, especially those set forth in paragraph 
(c)(2)(ii) of this section, must be valued consistent with 2 CFR 
200.306 to ensure they are fairly evaluated and meet the partners' 
proportionate share.
    (4) Third-party in-kind contributions are:
    (i) Contributions of space, equipment, technology, non-personnel 
services, or other like items to support the infrastructure costs 
associated with one-stop operations, by a non-one-stop partner to 
support the one-stop center in general, not a specific partner; or
    (ii) Contributions by a non-one-stop partner of space, equipment, 
technology, non-personnel services, or other like items to support the 
infrastructure costs associated with one-stop operations, to a one-stop 
partner to support its proportionate share of one-stop infrastructure 
costs.
    (iii) In-kind contributions described in paragraphs (c)(4)(i) and 
(ii) of this section must be valued consistent with 2 CFR 200.306 and 
reconciled on a regular basis to ensure they are fairly evaluated and 
meet the proportionate share of the partner.
    (5) All partner contributions, regardless of the type, must be 
reconciled on a regular basis (i.e., monthly or quarterly), comparing 
actual expenses incurred to relative benefits received, to ensure each 
partner program is contributing its proportionate share in accordance 
with the terms of the MOU.


Sec.  678.725   What happens if consensus on infrastructure funding is 
not reached at the local level between the Local Workforce Development 
Board, chief elected officials, and one-stop partners?

    With regard to negotiations for infrastructure funding for Program 
Year (PY) 2017 and for each subsequent program year thereafter, if the 
Local WDB, chief elected officials, and one-stop partners do not reach 
consensus on methods of sufficiently funding local infrastructure 
through the local funding mechanism in accordance with the Governor's 
guidance issued under Sec.  678.705 and consistent with the regulations 
in Sec. Sec.  678.715 and 678.720, and include that consensus agreement 
in the signed MOU, then the Local WDB must notify the Governor by the 
deadline established by the Governor under Sec.  678.705(b)(3). Once 
notified, the Governor must administer funding through the State 
funding mechanism, as described in Sec. Sec.  678.730 through 678.738, 
for the program year impacted by the local area's failure to reach 
consensus.


Sec.  678.730  What is the State one-stop infrastructure funding 
mechanism?

    (a) Consistent with sec. 121(h)(1)(A)(i)(II) of WIOA, if the Local 
WDB, chief elected official, and one-stop partners in a local area do 
not reach consensus agreement on methods of sufficiently funding the 
costs of infrastructure of one-stop centers for a program year, the 
State funding mechanism is applicable to the local area for that 
program year.
    (b) In the State funding mechanism, the Governor, subject to the 
limitations in paragraph (c) of this section, determines one-stop 
partner contributions after consultation with the chief elected 
officials, Local WDBs, and the State WDB. This determination involves:
    (1) The application of a budget for one-stop infrastructure costs 
as described in Sec.  678.735, based on either agreement reached in the 
local area negotiations or the State WDB formula outlined in Sec.  
678.745;
    (2) The determination of each local one-stop partner program's 
proportionate use of the one-stop delivery system and relative benefit 
received, consistent with the Uniform Guidance at 2 CFR part 200, 
including the Federal cost principles, the partner programs' 
authorizing laws and regulations, and other applicable legal 
requirements described in Sec.  678.736; and
    (3) The calculation of required statewide program caps on 
contributions to infrastructure costs from one-stop partner programs in 
areas operating under the State funding mechanism as described in Sec.  
678.738.
    (c) In certain situations, the Governor does not determine the 
infrastructure cost contributions for some one-stop partner programs 
under the State funding mechanism.
    (1) The Governor will not determine the contribution amounts for 
infrastructure funds for Native American program grantees described in 
part 684 of this chapter. The appropriate portion of funds to be 
provided by Native American program grantees to pay for one-stop 
infrastructure must be determined as part of the development of the MOU 
described in Sec.  678.500 and specified in that MOU.
    (2) In States in which the policy-making authority is placed in an 
entity or official that is independent of the

[[Page 56018]]

authority of the Governor with respect to the funds provided for adult 
education and literacy activities authorized under title II of WIOA, 
postsecondary career and technical education activities authorized 
under the Carl D. Perkins Career and Technical Education Act of 2006, 
or VR services authorized under title I of the Rehabilitation Act of 
1973 (other than sec. 112 or part C), as amended by WIOA title IV, the 
determination of the amount each of the applicable partners must 
contribute to assist in paying the infrastructure costs of one-stop 
centers must be made by the official or chief officer of the entity 
with such authority, in consultation with the Governor.
    (d) Any duty, ability, choice, responsibility, or other action 
otherwise related to the determination of infrastructure costs 
contributions that is assigned to the Governor in Sec. Sec.  678.730 
through 678.745 also applies to this decision-making process performed 
by the official or chief officer described in paragraph (c)(2) of this 
section.


Sec.  678.731  What are the steps to determine the amount to be paid 
under the State one-stop infrastructure funding mechanism?

    (a) To initiate the State funding mechanism, a Local WDB that has 
not reached consensus on methods of sufficiently funding local 
infrastructure through the local funding mechanism as provided in Sec.  
678.725 must notify the Governor by the deadline established by the 
Governor under Sec.  678.705(b)(3).
    (b) Once a Local WDB has informed the Governor that no consensus 
has been reached:
    (1) The Local WDB must provide the Governor with local negotiation 
materials in accordance with Sec.  678.735(a).
    (2) The Governor must determine the one-stop center budget by 
either:
    (i) Accepting a budget previously agreed upon by partner programs 
in the local negotiations, in accordance with Sec.  678.735(b)(1); or
    (ii) Creating a budget for the one-stop center using the State WDB 
formula (described in Sec.  678.745) in accordance with Sec.  
678.735(b)(3).
    (3) The Governor then must establish a cost allocation methodology 
to determine the one-stop partner programs' proportionate shares of 
infrastructure costs, in accordance with Sec.  678.736.
    (4)(i) Using the methodology established under paragraph (b)(2)(ii) 
of this section, and taking into consideration the factors concerning 
individual partner programs listed in Sec.  678.737(b)(2), the Governor 
must determine each partner's proportionate share of the infrastructure 
costs, in accordance with Sec.  678.737(b)(1), and
    (ii) In accordance with Sec.  678.730(c), in some instances, the 
Governor does not determine a partner program's proportionate share of 
infrastructure funding costs, in which case it must be determined by 
the entities named in Sec.  678.730(c)(1) and (2).
    (5) The Governor must then calculate the statewide caps on the 
amounts that partner programs may be required to contribute toward 
infrastructure funding, according to the steps found at Sec.  
678.738(a)(1) through (4).
    (6) The Governor must ensure that the aggregate total of the 
infrastructure contributions according to proportionate share required 
of all local partner programs in local areas under the State funding 
mechanism do not exceed the cap for that particular program, in 
accordance with Sec.  678.738(b)(1). If the total does not exceed the 
cap, the Governor must direct each one-stop partner program to pay the 
amount determined under Sec.  678.737(a) toward the infrastructure 
funding costs of the one-stop center. If the total does exceed the cap, 
then to determine the amount to direct each one-stop program to pay, 
the Governor may:
    (i) Ascertain, in accordance with Sec.  678.738(b)(2)(i), whether 
the local partner or partners whose proportionate shares are calculated 
above the individual program caps are willing to voluntarily contribute 
above the capped amount to equal that program's proportionate share; or
    (ii) Choose from the options provided in Sec.  678.738(b)(2)(ii), 
including having the local area re-enter negotiations to reassess each 
one-stop partner's proportionate share and make adjustments or identify 
alternate sources of funding to make up the difference between the 
capped amount and the proportionate share of infrastructure funding of 
the one-stop partner.
    (7) If none of the solutions given in paragraphs (b)(6)(i) and (ii) 
of this section prove to be viable, the Governor must reassess the 
proportionate shares of each one-stop partner so that the aggregate 
amount attributable to the local partners for each program is less than 
that program's cap amount. Upon such reassessment, the Governor must 
direct each one-stop partner program to pay the reassessed amount 
toward the infrastructure funding costs of the one-stop center.


Sec.  678.735  How are infrastructure cost budgets for the one-stop 
centers in a local area determined in the State one-stop infrastructure 
funding mechanism?

    (a) Local WDBs must provide to the Governor appropriate and 
relevant materials and documents used in the negotiations under the 
local funding mechanism, including but not limited to: The local WIOA 
plan, the cost allocation method or methods proposed by the partners to 
be used in determining proportionate share, the proposed amounts or 
budget to fund infrastructure, the amount of total partner funds 
included, the type of funds or non-cash contributions, proposed one-
stop center budgets, and any agreed upon or proposed MOUs.
    (b)(1) If a local area has reached agreement as to the 
infrastructure budget for the one-stop centers in the local area, it 
must provide this budget to the Governor as required by paragraph (a) 
of this section. If, as a result of the agreed upon infrastructure 
budget, only the individual programmatic contributions to 
infrastructure funding based upon proportionate use of the one-stop 
centers and relative benefit received are at issue, the Governor may 
accept the budget, from which the Governor must calculate each 
partner's contribution consistent with the cost allocation 
methodologies contained in the Uniform Guidance found in 2 CFR part 
200, as described in Sec.  678.736.
    (2) The Governor may also take into consideration the extent to 
which the partners in the local area have agreed in determining the 
proportionate shares, including any agreements reached at the local 
level by one or more partners, as well as any other element or product 
of the negotiating process provided to the Governor as required by 
paragraph (a) of this section.
    (3) If a local area has not reached agreement as to the 
infrastructure budget for the one-stop centers in the local area, or if 
the Governor determines that the agreed upon budget does not adequately 
meet the needs of the local area or does not reasonably work within the 
confines of the local area's resources in accordance with the 
Governor's one-stop budget guidance (which is required to be issued by 
WIOA sec. 121(h)(1)(B) and under Sec.  678.705), then, in accordance 
with Sec.  678.745, the Governor must use the formula developed by the 
State WDB based on at least the factors required under Sec.  678.745, 
and any associated weights to determine the local area budget.

[[Page 56019]]

Sec.  678.736   How does the Governor establish a cost allocation 
methodology used to determine the one-stop partner programs' 
proportionate shares of infrastructure costs under the State one-stop 
infrastructure funding mechanism?

    Once the appropriate budget is determined for a local area through 
either method described in Sec.  678.735 (by acceptance of a budget 
agreed upon in local negotiation or by the Governor applying the 
formula detailed in Sec.  678.745), the Governor must determine the 
appropriate cost allocation methodology to be applied to the one-stop 
partners in such local area, consistent with the Federal cost 
principles permitted under 2 CFR part 200, to fund the infrastructure 
budget.


Sec.  678.737   How are one-stop partner programs' proportionate shares 
of infrastructure costs determined under the State one-stop 
infrastructure funding mechanism?

    (a) The Governor must direct the one-stop partners in each local 
area that have not reached agreement under the local funding mechanism 
to pay what the Governor determines is each partner program's 
proportionate share of infrastructure funds for that area, subject to 
the application of the caps described in Sec.  678.738.
    (b)(1) The Governor must use the cost allocation methodology--as 
determined under Sec.  678.736--to determine each partner's 
proportionate share of the infrastructure costs under the State funding 
mechanism, subject to considering the factors described in paragraph 
(b)(2) of this section.
    (2) In determining each partner program's proportionate share of 
infrastructure costs, the Governor must take into account the costs of 
administration of the one-stop delivery system for purposes not related 
to one-stop centers for each partner (such as costs associated with 
maintaining the Local WDB or information technology systems), as well 
as the statutory requirements for each partner program, the partner 
program's ability to fulfill such requirements, and all other 
applicable legal requirements. The Governor may also take into 
consideration the extent to which the partners in the local area have 
agreed in determining the proportionate shares, including any 
agreements reached at the local level by one or more partners, as well 
as any other materials or documents of the negotiating process, which 
must be provided to the Governor by the Local WDB and described in 
Sec.  678.735(a).


Sec.  678.738  How are statewide caps on the contributions for one-stop 
infrastructure funding determined in the State one-stop infrastructure 
funding mechanism?

    (a) The Governor must calculate the statewide cap on the 
contributions for one-stop infrastructure funding required to be 
provided by each one-stop partner program for those local areas that 
have not reached agreement. The cap is the amount determined under 
paragraph (a)(4) of this section, which the Governor derives by:
    (1) First, determining the amount resulting from applying the 
percentage for the corresponding one-stop partner program provided in 
paragraph (d) of this section to the amount of Federal funds provided 
to carry out the one-stop partner program in the State for the 
applicable fiscal year;
    (2) Second, selecting a factor (or factors) that reasonably 
indicates the use of one-stop centers in the State, applying such 
factor(s) to all local areas in the State, and determining the 
percentage of such factor(s) applicable to the local areas that reached 
agreement under the local funding mechanism in the State;
    (3) Third, determining the amount resulting from applying the 
percentage determined in paragraph (a)(2) of this section to the amount 
determined under paragraph (a)(1) of this section for the one-stop 
partner program; and
    (4) Fourth, determining the amount that results from subtracting 
the amount determined under paragraph (a)(3) of this section from the 
amount determined under paragraph (a)(1) of this section. The outcome 
of this final calculation results in the partner program's cap.
    (b)(1) The Governor must ensure that the funds required to be 
contributed by each partner program in the local areas in the State 
under the State funding mechanism, in aggregate, do not exceed the 
statewide cap for each program as determined under paragraph (a) of 
this section.
    (2) If the contributions initially determined under Sec.  678.737 
would exceed the applicable cap determined under paragraph (a) of this 
section, the Governor may:
    (i) Ascertain if the one-stop partner whose contribution would 
otherwise exceed the cap determined under paragraph (a) of this section 
will voluntarily contribute above the capped amount, so that the total 
contributions equal that partner's proportionate share. The one-stop 
partner's contribution must still be consistent with the program's 
authorizing laws and regulations, the Federal cost principles in 2 CFR 
part 200, and other applicable legal requirements; or
    (ii) Direct or allow the Local WDB, chief elected officials, and 
one-stop partners to: Re-enter negotiations, as necessary; reduce the 
infrastructure costs to reflect the amount of funds that are available 
for such costs without exceeding the cap levels; reassess the 
proportionate share of each one-stop partner; or identify alternative 
sources of financing for one-stop infrastructure funding, consistent 
with the requirement that each one-stop partner pay an amount that is 
consistent with the proportionate use of the one-stop center and 
relative benefit received by the partner, the program's authorizing 
laws and regulations, the Federal cost principles in 2 CFR part 200, 
and other applicable legal requirements.
    (3) If applicable under paragraph (b)(2)(ii) of this section, the 
Local WDB, chief elected officials, and one-stop partners, after 
renegotiation, may come to agreement, sign an MOU, and proceed under 
the local funding mechanism. Such actions do not require the 
redetermination of the applicable caps under paragraph (a) of this 
section.
    (4) If, after renegotiation, agreement among partners still cannot 
be reached or alternate financing cannot be identified, the Governor 
may adjust the specified allocation, in accordance with the amounts 
available and the limitations described in paragraph (d) of this 
section. In determining these adjustments, the Governor may take into 
account information relating to the renegotiation as well as the 
information described in Sec.  678.735(a).
    (c) Limitations. Subject to paragraph (a) of this section and in 
accordance with WIOA sec. 121(h)(2)(D), the following limitations apply 
to the Governor's calculations of the amount that one-stop partners in 
local areas that have not reached agreement under the local funding 
mechanism may be required under Sec.  678.736 to contribute to one-stop 
infrastructure funding:
    (1) WIOA formula programs and Wagner-Peyser Act Employment Service. 
The portion of funds required to be contributed under the WIOA youth, 
adult, or dislocated worker programs, or under the Wagner-Peyser Act 
(29 U.S.C. 49 et seq.) must not exceed three percent of the amount of 
the program in the State for a program year.
    (2) Other one-stop partners. For required one-stop partners other 
than those specified in paragraphs (c)(1), (3), (5), and (6) of this 
section, the portion of funds required to be contributed must not 
exceed 1.5 percent of the amount of Federal funds provided to carry out 
that program in the State for a fiscal year.

[[Page 56020]]

For purposes of the Carl D. Perkins Career and Technical Education Act 
of 2006, the cap on contributions is determined based on the funds made 
available by the State for postsecondary level programs and activities 
under sec. 132 of the Carl D. Perkins Career and Technical Education 
Act and the amount of funds used by the State under sec. 112(a)(3) of 
the Perkins Act during the prior year to administer postsecondary level 
programs and activities, as applicable.
    (3) Vocational rehabilitation. (i) Within a State, for the entity 
or entities administering the programs described in WIOA sec. 
121(b)(1)(B)(iv) and Sec.  678.400, the allotment is based on the one 
State Federal fiscal year allotment, even in instances where that 
allotment is shared between two State agencies, and the cumulative 
portion of funds required to be contributed must not exceed--
    (A) 0.75 percent of the amount of Federal funds provided to carry 
out such program in the State for Fiscal Year 2016 for purposes of 
applicability of the State funding mechanism for PY 2017;
    (B) 1.0 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2017 for purposes of applicability of the 
State funding mechanism for PY 2018;
    (C) 1.25 percent of the amount provided to carry out such program 
in the State for Fiscal Year 2018 for purposes of applicability of the 
State funding mechanism for PY 2019;
    (D) 1.5 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2019 and following years for purposes of 
applicability of the State funding mechanism for PY 2020 and subsequent 
years.
    (ii) The limitations set forth in paragraph (d)(3)(i) of this 
section for any given fiscal year must be based on the final VR 
allotment to the State in the applicable Federal fiscal year.
    (4) Federal direct spending programs. For local areas that have not 
reached a one-stop infrastructure funding agreement by consensus, an 
entity administering a program funded with direct Federal spending, as 
defined in sec. 250(c)(8) of the Balanced Budget and Emergency Deficit 
Control Act of 1985, as in effect on February 15, 2014 (2 U.S.C. 
900(c)(8)), must not be required to provide more for infrastructure 
costs than the amount that the Governor determined (as described in 
Sec.  678.737).
    (5) TANF programs. For purposes of TANF, the cap on contributions 
is determined based on the total Federal TANF funds expended by the 
State for work, education, and training activities during the prior 
Federal fiscal year (as reported to the Department of Health and Human 
Services (HHS) on the quarterly TANF Financial Report form), plus any 
additional amount of Federal TANF funds that the State TANF agency 
reasonably determines was expended for administrative costs in 
connection with these activities but that was separately reported to 
HHS as an administrative cost. The State's contribution to the one-stop 
infrastructure must not exceed 1.5 percent of these combined 
expenditures.
    (6) Community Services Block Grant (CSBG) programs. For purposes of 
CSBG, the cap on contributions will be based on the total amount of 
CSBG funds determined by the State to have been expended by local CSBG-
eligible entities for the provision of employment and training 
activities during the prior Federal fiscal year for which information 
is available (as reported to HHS on the CSBG Annual Report) and any 
additional amount that the State CSBG agency reasonably determines was 
expended for administrative purposes in connection with these 
activities and was separately reported to HHS as an administrative 
cost. The State's contribution must not exceed 1.5 percent of these 
combined expenditures.
    (d) For programs for which it is not otherwise feasible to 
determine the amount of Federal funding used by the program until the 
end of that program's operational year--because, for example, the 
funding available for education, employment, and training activities is 
included within funding for the program that may also be used for other 
unrelated activities--the determination of the Federal funds provided 
to carry out the program for a fiscal year under paragraph (a)(1) of 
this section may be determined by:
    (1) The percentage of Federal funds available to the one-stop 
partner program that were used by the one-stop partner program for 
education, employment, and training activities in the previous fiscal 
year for which data are available; and
    (2) Applying the percentage determined under paragraph (d)(1) of 
this section to the total amount of Federal funds available to the one-
stop partner program for the fiscal year for which the determination 
under paragraph (a)(1) of this section applies.


Sec.  678.740  What funds are used to pay for infrastructure costs in 
the State one-stop infrastructure funding mechanism?

    (a) In the State funding mechanism, infrastructure costs for WIOA 
title I programs, including Native American Programs described in part 
684 of this chapter, may be paid using program funds, administrative 
funds, or both. Infrastructure costs for the Senior Community Service 
Employment Program under title V of the Older Americans Act (42 U.S.C. 
3056 et seq.) may also be paid using program funds, administrative 
funds, or both.
    (b) In the State funding mechanism, infrastructure costs for other 
required one-stop partner programs (listed in Sec. Sec.  678.400 
through 678.410) are limited to the program's administrative funds, as 
appropriate.
    (c) In the State funding mechanism, infrastructure costs for the 
adult education program authorized by title II of WIOA must be paid 
from the funds that are available for local administration and may be 
paid from funds made available by the State or non-Federal resources 
that are cash, in-kind, or third-party contributions.
    (d) In the State funding mechanism, infrastructure costs for the 
Carl D. Perkins Career and Technical Education Act of 2006 must be paid 
from funds available for local administration of postsecondary level 
programs and activities to eligible recipients or consortia of eligible 
recipients and may be paid from funds made available by the State or 
non-Federal resources that are cash, in-kind, or third-party 
contributions.


Sec.  678.745  What factors does the State Workforce Development Board 
use to develop the formula described in Workforce Innovation and 
Opportunity Act, which is used by the Governor to determine the 
appropriate one-stop infrastructure budget for each local area 
operating under the State infrastructure funding mechanism, if no 
reasonably implementable locally negotiated budget exists?

    The State WDB must develop a formula, as described in WIOA sec. 
121(h)(3)(B), to be used by the Governor under Sec.  678.735(b)(3) in 
determining the appropriate budget for the infrastructure costs of one-
stop centers in the local areas that do not reach agreement under the 
local funding mechanism and are, therefore, subject to the State 
funding mechanism. The formula identifies the factors and corresponding 
weights for each factor that the Governor must use, which must include: 
The number of one-stop centers in a local area; the population served 
by such centers; the services provided by such centers; and any factors 
relating to the operations of such centers in the local area that the 
State WDB determines are appropriate. As indicated in Sec.  
678.735(b)(1), if the local area has agreed on such a budget,

[[Page 56021]]

the Governor may accept that budget in lieu of applying the formula 
factors.


Sec.  678.750  When and how can a one-stop partner appeal a one-stop 
infrastructure amount designated by the State under the State 
infrastructure funding mechanism?

    (a) The Governor must establish a process, described under sec. 
121(h)(2)(E) of WIOA, for a one-stop partner administering a program 
described in Sec. Sec.  678.400 through 678.410 to appeal the 
Governor's determination regarding the one-stop partner's portion of 
funds to be provided for one-stop infrastructure costs. This appeal 
process must be described in the Unified State Plan.
    (b) The appeal may be made on the ground that the Governor's 
determination is inconsistent with proportionate share requirements in 
Sec.  678.735(a), the cost contribution limitations in Sec.  
678.735(b), the cost contribution caps in Sec.  678.738, consistent 
with the process described in the State Plan.
    (c) The process must ensure prompt resolution of the appeal in 
order to ensure the funds are distributed in a timely manner, 
consistent with the requirements of Sec.  683.630 of this chapter.
    (d) The one-stop partner must submit an appeal in accordance with 
State's deadlines for appeals specified in the guidance issued under 
Sec.  678.705(b)(3), or if the State has not set a deadline, within 21 
days from the Governor's determination.


Sec.  678.755  What are the required elements regarding infrastructure 
funding that must be included in the one-stop Memorandum of 
Understanding?

    The MOU, fully described in Sec.  678.500, must contain the 
following information whether the local areas use either the local one-
stop or the State funding method:
    (a) The period of time in which this infrastructure funding 
agreement is effective. This may be a different time period than the 
duration of the MOU.
    (b) Identification of an infrastructure and shared services budget 
that will be periodically reconciled against actual costs incurred and 
adjusted accordingly to ensure that it reflects a cost allocation 
methodology that demonstrates how infrastructure costs are charged to 
each partner in proportion to its use of the one-stop center and 
relative benefit received, and that complies with 2 CFR part 200 (or 
any corresponding similar regulation or ruling).
    (c) Identification of all one-stop partners, chief elected 
officials, and Local WDB participating in the infrastructure funding 
arrangement.
    (d) Steps the Local WDB, chief elected officials, and one-stop 
partners used to reach consensus or an assurance that the local area 
followed the guidance for the State funding process.
    (e) Description of the process to be used among partners to resolve 
issues during the MOU duration period when consensus cannot be reached.
    (f) Description of the periodic modification and review process to 
ensure equitable benefit among one-stop partners.


Sec.  678.760  How do one-stop partners jointly fund other shared costs 
under the Memorandum of Understanding?

    (a) In addition to jointly funding infrastructure costs, one-stop 
partners listed in Sec. Sec.  678.400 through 678.410 must use a 
portion of funds made available under their programs' authorizing 
Federal law (or fairly evaluated in-kind contributions) to pay the 
additional costs relating to the operation of the one-stop delivery 
system. These other costs must include applicable career services and 
may include other costs, including shared services.
    (b) For the purposes of paragraph (a) of this section, shared 
services' costs may include the costs of shared services that are 
authorized for and may be commonly provided through the one-stop 
partner programs to any individual, such as initial intake, assessment 
of needs, appraisal of basic skills, identification of appropriate 
services to meet such needs, referrals to other one-stop partners, and 
business services. Shared operating costs may also include shared costs 
of the Local WDB's functions.
    (c) Contributions to the additional costs related to operation of 
the one-stop delivery system may be cash, non-cash, or third-party in-
kind contributions, consistent with how these are described in Sec.  
678.720(c).
    (d) The shared costs described in paragraph (a) of this section 
must be allocated according to the proportion of benefit received by 
each of the partners, consistent with the Federal law authorizing the 
partner's program, and consistent with all other applicable legal 
requirements, including Federal cost principles in 2 CFR part 200 (or 
any corresponding similar regulation or ruling) requiring that costs 
are allowable, reasonable, necessary, and allocable.
    (e) Any shared costs agreed upon by the one-stop partners must be 
included in the MOU.

Subpart F--One-Stop Certification


Sec.  678.800  How are one-stop centers and one-stop delivery systems 
certified for effectiveness, physical and programmatic accessibility, 
and continuous improvement?

    (a) The State WDB, in consultation with chief elected officials and 
Local WDBs, must establish objective criteria and procedures for Local 
WDBs to use when certifying one-stop centers.
    (1) The State WDB, in consultation with chief elected officials and 
Local WDBs, must review and update the criteria every 2 years as part 
of the review and modification of State Plans pursuant to Sec.  676.135 
of this chapter.
    (2) The criteria must be consistent with the Governor's and State 
WDB's guidelines, guidance, and policies on infrastructure funding 
decisions, described in Sec.  678.705. The criteria must evaluate the 
one-stop centers and one-stop delivery system for effectiveness, 
including customer satisfaction, physical and programmatic 
accessibility, and continuous improvement.
    (3) When the Local WDB is the one-stop operator as described in 
Sec.  679.410 of this chapter, the State WDB must certify the one-stop 
center.
    (b) Evaluations of effectiveness must include how well the one-stop 
center integrates available services for participants and businesses, 
meets the workforce development needs of participants and the 
employment needs of local employers, operates in a cost-efficient 
manner, coordinates services among the one-stop partner programs, and 
provides access to partner program services to the maximum extent 
practicable, including providing services outside of regular business 
hours where there is a workforce need, as identified by the Local WDB. 
These evaluations must take into account feedback from one-stop 
customers. They must also include evaluations of how well the one-stop 
center ensures equal opportunity for individuals with disabilities to 
participate in or benefit from one-stop center services. These 
evaluations must include criteria evaluating how well the centers and 
delivery systems take actions to comply with the disability-related 
regulations implementing WIOA sec. 188, set forth at 29 CFR part 38. 
Such actions include, but are not limited to:
    (1) Providing reasonable accommodations for individuals with 
disabilities;
    (2) Making reasonable modifications to policies, practices, and 
procedures where necessary to avoid discrimination against persons with 
disabilities;

[[Page 56022]]

    (3) Administering programs in the most integrated setting 
appropriate;
    (4) Communicating with persons with disabilities as effectively as 
with others;
    (5) Providing appropriate auxiliary aids and services, including 
assistive technology devices and services, where necessary to afford 
individuals with disabilities an equal opportunity to participate in, 
and enjoy the benefits of, the program or activity; and
    (6) Providing for the physical accessibility of the one-stop center 
to individuals with disabilities.
    (c) Evaluations of continuous improvement must include how well the 
one-stop center supports the achievement of the negotiated local levels 
of performance for the indicators of performance for the local area 
described in sec. 116(b)(2) of WIOA and part 677 of this chapter. Other 
continuous improvement factors may include a regular process for 
identifying and responding to technical assistance needs, a regular 
system of continuing professional staff development, and having systems 
in place to capture and respond to specific customer feedback.
    (d) Local WDBs must assess at least once every 3 years the 
effectiveness, physical and programmatic accessibility, and continuous 
improvement of one-stop centers and the one-stop delivery systems using 
the criteria and procedures developed by the State WDB. The Local WDB 
may establish additional criteria, or set higher standards for service 
coordination, than those set by the State criteria. Local WDBs must 
review and update the criteria every 2 years as part of the Local Plan 
update process described in Sec.  676.580 of this chapter. Local WDBs 
must certify one-stop centers in order to be eligible to use 
infrastructure funds in the State funding mechanism described in Sec.  
678.730.
    (e) All one-stop centers must comply with applicable physical and 
programmatic accessibility requirements, as set forth in 29 CFR part 
38, the implementing regulations of WIOA sec. 188.

Subpart G--Common Identifier


Sec.  678.900  What is the common identifier to be used by each one-
stop delivery system?

    (a) The common one-stop delivery system identifier is ``American 
Job Center.''
    (b) As of November 17, 2016, each one-stop delivery system must 
include the ``American Job Center'' identifier or ``a proud partner of 
the American Job Center network'' on all primary electronic resources 
used by the one-stop delivery system, and on any newly printed, 
purchased, or created materials.
    (c) As of July 1, 2017, each one-stop delivery system must include 
the ``American Job Center'' identifier or ``a proud partner of the 
American Job Center network'' on all products, programs, activities, 
services, electronic resources, facilities, and related property and 
new materials used in the one-stop delivery system.
    (d) One-stop partners, States, or local areas may use additional 
identifiers on their products, programs, activities, services, 
facilities, and related property and materials.

Department of Education

34 CFR Chapters III and IV

    For the reasons stated in the preamble, the Department of Education 
amends 34 CFR chapters III and IV as follows:

PART 361--STATE VOCATIONAL REHABILITATION SERVICES PROGRAM

0
4. The authority citation for part 361 continues to read as follows:

    Authority: 29 U.S.C. 709(c), unless otherwise noted.


0
5. Add subpart D to part 361 to read as follows:
Subpart D--Unified and Combined State Plans Under Title I of the 
Workforce Innovation and Opportunity Act
Sec.
361.100 What are the purposes of the Unified and Combined State 
Plans?
361.105 What are the general requirements for the Unified State 
Plan?
361.110 What are the program-specific requirements in the Unified 
State Plan for the adult, dislocated worker, and youth programs 
authorized under Workforce Innovation and Opportunity Act title I?
361.115 What are the program-specific requirements in the Unified 
State Plan for the Adult Education and Family Literacy Act program 
authorized under Workforce Innovation and Opportunity Act title II?
361.120 What are the program-specific requirements in the Unified 
State Plan for the Employment Service program authorized under the 
Wagner-Peyser Act, as amended by Workforce Innovation and 
Opportunity Act title III?
361.125 What are the program-specific requirements in the Unified 
State Plan for the State Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as 
amended by Workforce Innovation and Opportunity Act title IV?
361.130 What is the development, submission, and approval process of 
the Unified State Plan?
361.135 What are the requirements for modification of the Unified 
State Plan?
361.140 What are the general requirements for submitting a Combined 
State Plan?
361.143 What is the development, submission, and approval process of 
the Combined State Plan?
361.145 What are the requirements for modifications of the Combined 
State Plan?

    Authority: Secs. 102, 103, and 503, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart D--Unified and Combined State Plans Under Title I of the 
Workforce Innovation and Opportunity Act


Sec.  361.100  What are the purposes of the Unified and Combined State 
Plans?

    (a) The Unified and Combined State Plans provide the framework for 
States to outline a strategic vision of, and goals for, how their 
workforce development systems will achieve the purposes of the 
Workforce Innovation and Opportunity Act (WIOA).
    (b) The Unified and Combined State Plans serve as 4-year action 
plans to develop, align, and integrate the State's systems and provide 
a platform to achieve the State's vision and strategic and operational 
goals. A Unified or Combined State Plan is intended to:
    (1) Align, in strategic coordination, the six core programs 
required in the Unified State Plan pursuant to Sec.  361.105(b), and 
additional Combined State Plan partner programs that may be part of the 
Combined State Plan pursuant to Sec.  361.140;
    (2) Direct investments in economic, education, and workforce 
training programs to focus on providing relevant education and training 
to ensure that individuals, including youth and individuals with 
barriers to employment, have the skills to compete in the job market 
and that employers have a ready supply of skilled workers;
    (3) Apply strategies for job-driven training consistently across 
Federal programs; and
    (4) Enable economic, education, and workforce partners to build a 
skilled workforce through innovation in, and alignment of, employment, 
training, and education programs.


Sec.  361.105  What are the general requirements for the Unified State 
Plan?

    (a) The Unified State Plan must be submitted in accordance with 
Sec.  361.130 and WIOA sec. 102(c), as explained in joint planning 
guidelines issued by the Secretaries of Labor and Education.
    (b) The Governor of each State must submit, at a minimum, in 
accordance with Sec.  361.130, a Unified State Plan to the Secretary of 
Labor to be eligible to receive funding for the workforce

[[Page 56023]]

development system's six core programs:
    (1) The adult, dislocated worker, and youth programs authorized 
under subtitle B of title I of WIOA and administered by the U.S. 
Department of Labor (DOL);
    (2) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA and administered by the U.S. 
Department of Education (ED);
    (3) The Employment Service program authorized under the Wagner-
Peyser Act of 1933, as amended by WIOA title III and administered by 
DOL; and
    (4) The Vocational Rehabilitation program authorized under title I 
of the Rehabilitation Act of 1973, as amended by title IV of WIOA and 
administered by ED.
    (c) The Unified State Plan must outline the State's 4-year strategy 
for the core programs described in paragraph (b) of this section and 
meet the requirements of sec. 102(b) of WIOA, as explained in the joint 
planning guidelines issued by the Secretaries of Labor and Education.
    (d) The Unified State Plan must include strategic and operational 
planning elements to facilitate the development of an aligned, 
coordinated, and comprehensive workforce development system. The 
Unified State Plan must include:
    (1) Strategic planning elements that describe the State's strategic 
vision and goals for preparing an educated and skilled workforce under 
sec. 102(b)(1) of WIOA. The strategic planning elements must be 
informed by and include an analysis of the State's economic conditions 
and employer and workforce needs, including education and skill needs.
    (2) Strategies for aligning the core programs and Combined State 
Plan partner programs as described in Sec.  361.140(d), as well as 
other resources available to the State, to achieve the strategic vision 
and goals in accordance with sec. 102(b)(1)(E) of WIOA.
    (3) Operational planning elements in accordance with sec. 102(b)(2) 
of WIOA that support the strategies for aligning the core programs and 
other resources available to the State to achieve the State's vision 
and goals and a description of how the State Workforce Development 
Board (WDB) will implement its functions, in accordance with sec. 
101(d) of WIOA. Operational planning elements must include:
    (i) A description of how the State strategy will be implemented by 
each core program's lead State agency;
    (ii) State operating systems, including data systems, and policies 
that will support the implementation of the State's strategy identified 
in paragraph (d)(1) of this section;
    (iii) Program-specific requirements for the core programs required 
by WIOA sec. 102(b)(2)(D);
    (iv) Assurances required by sec. 102(b)(2)(E) of WIOA, including an 
assurance that the lead State agencies responsible for the 
administration of the core programs reviewed and commented on the 
appropriate operational planning of the Unified State Plan and approved 
the elements as serving the needs of the population served by such 
programs, and other assurances deemed necessary by the Secretaries of 
Labor and Education under sec. 102(b)(2)(E)(x) of WIOA;
    (v) A description of joint planning and coordination across core 
programs, required one-stop partner programs, and other programs and 
activities in the Unified State Plan; and
    (vi) Any additional operational planning requirements imposed by 
the Secretary of Labor or the Secretary of Education under sec. 
102(b)(2)(C)(viii) of WIOA.
    (e) All of the requirements in this subpart that apply to States 
also apply to outlying areas.


Sec.  361.110  What are the program-specific requirements in the 
Unified State Plan for the adult, dislocated worker, and youth programs 
authorized under Workforce Innovation and Opportunity Act title I?

    The program-specific requirements for the adult, dislocated worker, 
and youth programs that must be included in the Unified State Plan are 
described in sec. 102(b)(2)(D) of WIOA. Additional planning 
requirements may be explained in joint planning guidelines issued by 
the Secretaries of Labor and Education.


Sec.  361.115  What are the program-specific requirements in the 
Unified State Plan for the Adult Education and Family Literacy Act 
program authorized under Workforce Innovation and Opportunity Act title 
II?

    The program-specific requirements for the AEFLA program in title II 
that must be included in the Unified State Plan are described in secs. 
102(b)(2)(C) and 102(b)(2)(D)(ii) of WIOA.
    (a) With regard to the description required in sec. 
102(b)(2)(D)(ii)(I) of WIOA pertaining to content standards, the 
Unified State Plan must describe how the eligible agency will, by July 
1, 2016, align its content standards for adult education with State-
adopted challenging academic content standards under the Elementary and 
Secondary Education Act of 1965, as amended.
    (b) With regard to the description required in sec. 
102(b)(2)(C)(iv) of WIOA pertaining to the methods and factors the 
State will use to distribute funds under the core programs, for title 
II of WIOA, the Unified State Plan must include--
    (1) How the eligible agency will award multi-year grants on a 
competitive basis to eligible providers in the State; and
    (2) How the eligible agency will provide direct and equitable 
access to funds using the same grant or contract announcement and 
application procedure.


Sec.  361.120  What are the program-specific requirements in the 
Unified State Plan for the Employment Service program authorized under 
the Wagner-Peyser Act, as amended by Workforce Innovation and 
Opportunity Act title III?

    The Employment Service program authorized under the Wagner-Peyser 
Act of 1933, as amended by WIOA title III, is subject to requirements 
in sec. 102(b) of WIOA, including any additional requirements imposed 
by the Secretary of Labor under secs. 102(b)(2)(C)(viii) and 
102(b)(2)(D)(iv) of WIOA, as explained in joint planning guidelines 
issued by the Secretaries of Labor and Education.


Sec.  361.125  What are the program-specific requirements in the 
Unified State Plan for the State Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by Workforce Innovation and Opportunity Act title IV?

    The program specific-requirements for the vocational rehabilitation 
services portion of the Unified or Combined State Plan are set forth in 
sec. 101(a) of the Rehabilitation Act of 1973, as amended. All 
submission requirements for the vocational rehabilitation services 
portion of the Unified or Combined State Plan are in addition to the 
jointly developed strategic and operational content requirements 
prescribed by sec. 102(b) of WIOA.


Sec.  361.130  What is the development, submission, and approval 
process of the Unified State Plan?

    (a) The Unified State Plan described in Sec.  361.105 must be 
submitted in accordance with WIOA sec. 102(c), as explained in joint 
planning guidelines issued jointly by the Secretaries of Labor and 
Education.
    (b) A State must submit its Unified State Plan to the Secretary of 
Labor pursuant to a process identified by the Secretary.
    (1) The initial Unified State Plan must be submitted no later than 
120 days prior to the commencement of the second full program year of 
WIOA.
    (2) Subsequent Unified State Plans must be submitted no later than 
120

[[Page 56024]]

days prior to the end of the 4-year period covered by a preceding 
Unified State Plan.
    (3) For purposes of paragraph (b) of this section, ``program year'' 
means July 1 through June 30 of any year.
    (c) The Unified State Plan must be developed with the assistance of 
the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 101(d), 
and must be developed in coordination with administrators with optimum 
policy-making authority for the core programs and required one-stop 
partners.
    (d) The State must provide an opportunity for public comment on and 
input into the development of the Unified State Plan prior to its 
submission.
    (1) The opportunity for public comment must include an opportunity 
for comment by representatives of Local WDBs and chief elected 
officials, businesses, representatives of labor organizations, 
community-based organizations, adult education providers, institutions 
of higher education, other stakeholders with an interest in the 
services provided by the six core programs, and the general public, 
including individuals with disabilities.
    (2) Consistent with the ``Sunshine Provision'' of WIOA in sec. 
101(g), the State WDB must make information regarding the Unified State 
Plan available to the public through electronic means and regularly 
occurring open meetings in accordance with State law. The Unified State 
Plan must describe the State's process and timeline for ensuring a 
meaningful opportunity for public comment.
    (e) Upon receipt of the Unified State Plan from the State, the 
Secretary of Labor will ensure that the entire Unified State Plan is 
submitted to the Secretary of Education pursuant to a process developed 
by the Secretaries.
    (f) The Unified State Plan is subject to the approval of both the 
Secretary of Labor and the Secretary of Education.
    (g) Before the Secretaries of Labor and Education approve the 
Unified State Plan, the vocational rehabilitation services portion of 
the Unified State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be 
approved by the Commissioner of the Rehabilitation Services 
Administration.
    (h) The Secretaries of Labor and Education will review and approve 
the Unified State Plan within 90 days of receipt by the Secretary of 
Labor, unless the Secretary of Labor or the Secretary of Education 
determines in writing within that period that:
    (1) The plan is inconsistent with a core program's requirements;
    (2) The Unified State Plan is inconsistent with any requirement of 
sec. 102 of WIOA; or
    (3) The plan is incomplete or otherwise insufficient to determine 
whether it is consistent with a core program's requirements or other 
requirements of WIOA.
    (i) If neither the Secretary of Labor nor the Secretary of 
Education makes the written determination described in paragraph (h) of 
this section within 90 days of the receipt by the Secretaries, the 
Unified State Plan will be considered approved.


Sec.  361.135  What are the requirements for modification of the 
Unified State Plan?

    (a) In addition to the required modification review set forth in 
paragraph (b) of this section, a Governor may submit a modification of 
its Unified State Plan at any time during the 4-year period of the 
plan.
    (b) Modifications are required, at a minimum:
    (1) At the end of the first 2-year period of any 4-year State Plan, 
wherein the State WDB must review the Unified State Plan, and the 
Governor must submit modifications to the plan to reflect changes in 
labor market and economic conditions or other factors affecting the 
implementation of the Unified State Plan;
    (2) When changes in Federal or State law or policy substantially 
affect the strategies, goals, and priorities upon which the Unified 
State Plan is based;
    (3) When there are changes in the statewide vision, strategies, 
policies, State negotiated levels of performance as described in Sec.  
361.170(b), the methodology used to determine local allocation of 
funds, reorganizations that change the working relationship with system 
employees, changes in organizational responsibilities, changes to the 
membership structure of the State WDB or alternative entity, and 
similar substantial changes to the State's workforce development 
system.
    (c) Modifications to the Unified State Plan are subject to the same 
public review and comment requirements in Sec.  361.130(d) that apply 
to the development of the original Unified State Plan.
    (d) Unified State Plan modifications must be approved by the 
Secretaries of Labor and Education, based on the approval standards 
applicable to the original Unified State Plan under Sec.  361.130. This 
approval must come after the approval of the Commissioner of the 
Rehabilitation Services Administration for modification of any portion 
of the plan described in sec. 102(b)(2)(D)(iii) of WIOA.


Sec.  361.140  What are the general requirements for submitting a 
Combined State Plan?

    (a) A State may choose to develop and submit a 4-year Combined 
State Plan in lieu of the Unified State Plan described in Sec. Sec.  
361.105 through 361.125.
    (b) A State that submits a Combined State Plan covering an activity 
or program described in paragraph (d) of this section that is, in 
accordance with WIOA sec. 103(c), approved or deemed complete under the 
law relating to the program will not be required to submit any other 
plan or application in order to receive Federal funds to carry out the 
core programs or the program or activities described under paragraph 
(d) of this section that are covered by the Combined State Plan.
    (c) If a State develops a Combined State Plan, it must be submitted 
in accordance with the process described in Sec.  361.143.
    (d) If a State chooses to submit a Combined State Plan, the plan 
must include the six core programs and one or more of the Combined 
State Plan partner programs and activities described in sec. 103(a)(2) 
of WIOA. The Combined State Plan partner programs and activities that 
may be included in the Combined State Plan are:
    (1) Career and technical education programs authorized under the 
Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 
2301 et seq.);
    (2) Temporary Assistance for Needy Families or TANF, authorized 
under part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.);
    (3) Employment and training programs authorized under sec. 6(d)(4) 
of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
    (4) Work programs authorized under sec. 6(o) of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2015(o));
    (5) Trade adjustment assistance activities under chapter 2 of title 
II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
    (6) Services for veterans authorized under chapter 41 of title 38 
United States Code;
    (7) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law);
    (8) Senior Community Service Employment Programs under title V of 
the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
    (9) Employment and training activities carried out by the 
Department of Housing and Urban Development (HUD);
    (10) Employment and training activities carried out under the

[[Page 56025]]

Community Services Block Grant Act (42 U.S.C. 9901 et seq.); and
    (11) Reintegration of offenders programs authorized under sec. 212 
of the Second Chance Act of 2007 (42 U.S.C. 17532).
    (e) A Combined State Plan must contain:
    (1) For the core programs, the information required by sec. 102(b) 
of WIOA and Sec. Sec.  361.105 through 361.125, as explained in the 
joint planning guidelines issued by the Secretaries;
    (2) For the Combined State Plan partner programs and activities, 
except as described in paragraph (h) of this section, the information 
required by the law authorizing and governing that program to be 
submitted to the appropriate Secretary, any other applicable legal 
requirements, and any common planning requirements described in sec. 
102(b) of WIOA, as explained in the joint planning guidelines issued by 
the Secretaries;
    (3) A description of the methods used for joint planning and 
coordination among the core programs, and with the required one-stop 
partner programs and other programs and activities included in the 
State Plan; and
    (4) An assurance that all of the entities responsible for planning 
or administering the programs described in the Combined State Plan have 
had a meaningful opportunity to review and comment on all portions of 
the plan.
    (f) Each Combined State Plan partner program included in the 
Combined State Plan remains subject to the applicable program-specific 
requirements of the Federal law and regulations, and any other 
applicable legal or program requirements, governing the implementation 
and operation of that program.
    (g) For purposes of Sec. Sec.  361.140 through 361.145 the term 
``appropriate Secretary'' means the head of the Federal agency who 
exercises either plan or application approval authority for the program 
or activity under the Federal law authorizing the program or activity 
or, if there are no planning or application requirements, who exercises 
administrative authority over the program or activity under that 
Federal law.
    (h) States that include employment and training activities carried 
out under the Community Services Block Grant (CSBG) Act (42 U.S.C. 9901 
et seq.) under a Combined State Plan would submit all other required 
elements of a complete CSBG State Plan directly to the Federal agency 
that administers the program, according to the requirements of Federal 
law and regulations.
    (i) States that submit employment and training activities carried 
out by HUD under a Combined State Plan would submit any other required 
planning documents for HUD programs directly to HUD, according to the 
requirements of Federal law and regulations.


Sec.  361.143  What is the development, submission, and approval 
process of the Combined State Plan?

    (a) For purposes of Sec.  361.140(a), if a State chooses to develop 
a Combined State Plan it must submit the Combined State Plan in 
accordance with the requirements described below and sec. 103 of WIOA, 
as explained in the joint planning guidelines issued by the Secretaries 
of Labor and Education.
    (b) The Combined State Plan must be developed with the assistance 
of the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 
101(d), and must be developed in coordination with administrators with 
optimum policy-making authority for the core programs and required one-
stop partners.
    (c) The State must provide an opportunity for public comment on and 
input into the development of the Combined State Plan prior to its 
submission.
    (1) The opportunity for public comment for the portions of the 
Combined State Plan that cover the core programs must include an 
opportunity for comment by representatives of Local WDBs and chief 
elected officials, businesses, representatives of labor organizations, 
community-based organizations, adult education providers, institutions 
of higher education, other stakeholders with an interest in the 
services provided by the six core programs, and the general public, 
including individuals with disabilities.
    (2) Consistent with the ``Sunshine Provision'' of WIOA in sec. 
101(g), the State WDB must make information regarding the Combined 
State Plan available to the public through electronic means and 
regularly occurring open meetings in accordance with State law. The 
Combined State Plan must describe the State's process and timeline for 
ensuring a meaningful opportunity for public comment on the portions of 
the plan covering core programs.
    (3) The portions of the plan that cover the Combined State Plan 
partner programs are subject to any public comment requirements 
applicable to those programs.
    (d) The State must submit to the Secretaries of Labor and Education 
and to the Secretary of the agency with responsibility for approving 
the program's plan or deeming it complete under the law governing the 
program, as part of its Combined State Plan, any plan, application, 
form, or any other similar document that is required as a condition for 
the approval of Federal funding under the applicable program or 
activity. Such submission must occur in accordance with a process 
identified by the relevant Secretaries in paragraph (a) of this 
section.
    (e) The Combined State Plan will be approved or disapproved in 
accordance with the requirements of sec. 103(c) of WIOA.
    (1) The portion of the Combined State Plan covering programs 
administered by the Departments of Labor and Education must be 
reviewed, and approved or disapproved, by the appropriate Secretary 
within 90 days beginning on the day the Combined State Plan is received 
by the appropriate Secretary from the State, consistent with paragraph 
(f) of this section. Before the Secretaries of Labor and Education 
approve the Combined State Plan, the vocational rehabilitation services 
portion of the Combined State Plan described in WIOA sec. 
102(b)(2)(D)(iii) must be approved by the Commissioner of the 
Rehabilitation Services Administration.
    (2) If an appropriate Secretary other than the Secretary of Labor 
or the Secretary of Education has authority to approve or deem complete 
a portion of the Combined State Plan for a program or activity 
described in Sec.  361.140(d), that portion of the Combined State Plan 
must be reviewed, and approved, disapproved, or deemed complete, by the 
appropriate Secretary within 120 days beginning on the day the Combined 
State Plan is received by the appropriate Secretary from the State 
consistent with paragraph (f) of this section.
    (f) The appropriate Secretaries will review and approve or deem 
complete the Combined State Plan within 90 or 120 days, as appropriate, 
as described in paragraph (e) of this section, unless the Secretaries 
of Labor and Education or appropriate Secretary have determined in 
writing within that period that:
    (1) The Combined State Plan is inconsistent with the requirements 
of the six core programs or the Federal laws authorizing or applicable 
to the program or activity involved, including the criteria for 
approval of a plan or application, or deeming the plan complete, if 
any, under such law;
    (2) The portion of the Combined State Plan describing the six core 
programs or the program or activity described in paragraph (a) of this 
section involved does not satisfy the criteria as provided

[[Page 56026]]

in sec. 102 or 103 of WIOA, as applicable; or
    (3) The Combined State Plan is incomplete, or otherwise 
insufficient to determine whether it is consistent with a core 
program's requirements, other requirements of WIOA, or the Federal laws 
authorizing, or applicable to, the program or activity described in 
Sec.  361.140(d), including the criteria for approval of a plan or 
application, if any, under such law.
    (g) If the Secretary of Labor, the Secretary of Education, or the 
appropriate Secretary does not make the written determination described 
in paragraph (f) of this section within the relevant period of time 
after submission of the Combined State Plan, that portion of the 
Combined State Plan over which the Secretary has jurisdiction will be 
considered approved.
    (h) The Secretaries of Labor and Education's written determination 
of approval or disapproval regarding the portion of the plan for the 
six core programs may be separate from the written determination of 
approval, disapproval, or completeness of the program-specific 
requirements of Combined State Plan partner programs and activities 
described in Sec.  361.140(d) and included in the Combined State Plan.
    (i) Special rule. In paragraphs (f)(1) and (3) of this section, the 
term ``criteria for approval of a plan or application,'' with respect 
to a State or a core program or a program under the Carl D. Perkins 
Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), 
includes a requirement for agreement between the State and the 
appropriate Secretaries regarding State performance measures or State 
performance accountability measures, as the case may be, including 
levels of performance.


Sec.  361.145  What are the requirements for modifications of the 
Combined State Plan?

    (a) For the core program portions of the Combined State Plan, 
modifications are required, at a minimum:
    (1) By the end of the first 2-year period of any 4-year State Plan. 
The State WDB must review the Combined State Plan, and the Governor 
must submit modifications to the Combined State Plan to reflect changes 
in labor market and economic conditions or other factors affecting the 
implementation of the Combined State Plan;
    (2) When changes in Federal or State law or policy substantially 
affect the strategies, goals, and priorities upon which the Combined 
State Plan is based;
    (3) When there are changes in the statewide vision, strategies, 
policies, State negotiated levels of performance as described in Sec.  
361.170(b), the methodology used to determine local allocation of 
funds, reorganizations that change the working relationship with system 
employees, changes in organizational responsibilities, changes to the 
membership structure of the State WDB or alternative entity, and 
similar substantial changes to the State's workforce development 
system.
    (b) In addition to the required modification review described in 
paragraph (a)(1) of this section, a State may submit a modification of 
its Combined State Plan at any time during the 4-year period of the 
plan.
    (c) For any Combined State Plan partner programs and activities 
described in Sec.  361.140(d) that are included in a State's Combined 
State Plan, the State--
    (1) May decide if the modification requirements under WIOA sec. 
102(c)(3) that apply to the core programs will apply to the Combined 
State Plan partner programs, as long as consistent with any other 
modification requirements for the programs, or may comply with the 
requirements applicable to only the particular program or activity; and
    (2) Must submit, in accordance with the procedure described in 
Sec.  361.143, any modification, amendment, or revision required by the 
Federal law authorizing, or applicable to, the Combined State Plan 
partner program or activity.
    (i) If the underlying programmatic requirements change (e.g., the 
authorizing statute is reauthorized) for Federal laws authorizing such 
programs, a State must either modify its Combined State Plan or submit 
a separate plan to the appropriate Federal agency in accordance with 
the new Federal law authorizing the Combined State Plan partner program 
or activity and other legal requirements applicable to such program or 
activity.
    (ii) If the modification, amendment, or revision affects the 
administration of only that particular Combined State Plan partner 
program and has no impact on the Combined State Plan as a whole or the 
integration and administration of the core and other Combined State 
Plan partner programs at the State level, modifications must be 
submitted for approval to only the appropriate Secretary, based on the 
approval standards applicable to the original Combined State Plan under 
Sec.  361.143, if the State elects, or in accordance with the 
procedures and requirements applicable to the particular Combined State 
Plan partner program.
    (3) A State also may amend its Combined State Plan to add a 
Combined State Plan partner program or activity described in Sec.  
361.140(d).
    (d) Modifications of the Combined State Plan are subject to the 
same public review and comment requirements that apply to the 
development of the original Combined State Plan as described in Sec.  
361.143(c) except that, if the modification, amendment, or revision 
affects the administration of a particular Combined State Plan partner 
program and has no impact on the Combined State Plan as a whole or the 
integration and administration of the core and other Combined State 
Plan partner programs at the State level, a State may comply instead 
with the procedures and requirements applicable to the particular 
Combined State Plan partner program.
    (e) Modifications for the core program portions of the Combined 
State Plan must be approved by the Secretaries of Labor and Education, 
based on the approval standards applicable to the original Combined 
State Plan under Sec.  361.143. This approval must come after the 
approval of the Commissioner of the Rehabilitation Services 
Administration for modification of any portion of the Combined State 
Plan described in sec. 102(b)(2)(D)(iii) of WIOA.

0
6. Revise subpart E of part 361 to read as follows:
Subpart E--Performance Accountability Under Title I of the Workforce 
Innovation and Opportunity Act
Sec.
361.150 What definitions apply to Workforce Innovation and 
Opportunity Act performance accountability provisions?
361.155 What are the primary indicators of performance under the 
Workforce Innovation and Opportunity Act?
361.160 What information is required for State performance reports?
361.165 May a State establish additional indicators of performance?
361.170 How are State levels of performance for primary indicators 
established?
361.175 What responsibility do States have to use quarterly wage 
record information for performance accountability?
361.180 When is a State subject to a financial sanction under the 
Workforce Innovation and Opportunity Act?
361.185 When are sanctions applied for a State's failure to submit 
an annual performance report?
361.190 When are sanctions applied for failure to achieve adjusted 
levels of performance?

[[Page 56027]]

361.195 What should States expect when a sanction is applied to the 
Governor's Reserve Allotment?
361.200 What other administrative actions will be applied to States' 
performance requirements?
361.205 What performance indicators apply to local areas and what 
information must be included in local area performance reports?
361.210 How are local performance levels established?
361.215 Under what circumstances are local areas eligible for State 
Incentive Grants?
361.220 Under what circumstances may a corrective action or sanction 
be applied to local areas for poor performance?
361.225 Under what circumstances may local areas appeal a 
reorganization plan?
361.230 What information is required for the eligible training 
provider performance reports?
361.235 What are the reporting requirements for individual records 
for core Workforce Innovation and Opportunity Act (WIOA) title I 
programs; the Wagner-Peyser Act Employment Service program, as 
amended by WIOA title III; and the Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as 
amended by WIOA title IV?
361.240 What are the requirements for data validation of State 
annual performance reports?

    Authority: Secs. 116, 189, and 503 of Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart E--Performance Accountability Under Title I of the 
Workforce Innovation and Opportunity Act


Sec.  361.150  What definitions apply to Workforce Innovation and 
Opportunity Act performance accountability provisions?

    (a) Participant. A reportable individual who has received services 
other than the services described in paragraph (a)(3) of this section, 
after satisfying all applicable programmatic requirements for the 
provision of services, such as eligibility determination.
    (1) For the Vocational Rehabilitation (VR) program, a participant 
is a reportable individual who has an approved and signed 
Individualized Plan for Employment (IPE) and has begun to receive 
services.
    (2) For the Workforce Innovation and Opportunity Act (WIOA) title I 
youth program, a participant is a reportable individual who has 
satisfied all applicable program requirements for the provision of 
services, including eligibility determination, an objective assessment, 
and development of an individual service strategy, and received 1 of 
the 14 WIOA youth program elements identified in sec. 129(c)(2) of 
WIOA.
    (3) The following individuals are not participants:
    (i) Individuals in an Adult Education and Family Literacy Act 
(AEFLA) program who have not completed at least 12 contact hours;
    (ii) Individuals who only use the self-service system.
    (A) Subject to paragraph (a)(3)(ii)(B) of this section, self-
service occurs when individuals independently access any workforce 
development system program's information and activities in either a 
physical location, such as a one-stop center resource room or partner 
agency, or remotely via the use of electronic technologies.
    (B) Self-service does not uniformly apply to all virtually accessed 
services. For example, virtually accessed services that provide a level 
of support beyond independent job or information seeking on the part of 
an individual would not qualify as self-service.
    (iii) Individuals who receive information-only services or 
activities, which provide readily available information that does not 
require an assessment by a staff member of the individual's skills, 
education, or career objectives.
    (4) Programs must include participants in their performance 
calculations.
    (b) Reportable individual. An individual who has taken action that 
demonstrates an intent to use program services and who meets specific 
reporting criteria of the program, including:
    (1) Individuals who provide identifying information;
    (2) Individuals who only use the self-service system; or
    (3) Individuals who only receive information-only services or 
activities.
    (c) Exit. As defined for the purpose of performance calculations, 
exit is the point after which a participant who has received services 
through any program meets the following criteria:
    (1) For the adult, dislocated worker, and youth programs authorized 
under WIOA title I, the AEFLA program authorized under WIOA title II, 
and the Employment Service program authorized under the Wagner-Peyser 
Act, as amended by WIOA title III, exit date is the last date of 
service.
    (i) The last day of service cannot be determined until at least 90 
days have elapsed since the participant last received services; 
services do not include self-service, information-only services or 
activities, or follow-up services. This also requires that there are no 
plans to provide the participant with future services.
    (ii) [Reserved].
    (2)(i) For the VR program authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV (VR program):
    (A) The participant's record of service is closed in accordance 
with Sec.  361.56 because the participant has achieved an employment 
outcome; or
    (B) The participant's service record is closed because the 
individual has not achieved an employment outcome or the individual has 
been determined ineligible after receiving services in accordance with 
Sec.  361.43.
    (ii) Notwithstanding any other provision of this section, a 
participant will not be considered as meeting the definition of exit 
from the VR program if the participant's service record is closed 
because the participant has achieved a supported employment outcome in 
an integrated setting but not in competitive integrated employment.
    (3)(i) A State may implement a common exit policy for all or some 
of the core programs in WIOA title I and the Employment Service program 
authorized under the Wagner-Peyser Act, as amended by WIOA title III, 
and any additional required partner program(s) listed in sec. 
121(b)(1)(B) of WIOA that is under the authority of the U.S. Department 
of Labor (DOL).
    (ii) If a State chooses to implement a common exit policy, the 
policy must require that a participant is exited only when all of the 
criteria in paragraph (c)(1) of this section are met for the WIOA title 
I core programs and the Employment Service program authorized under the 
Wagner-Peyser Act, as amended by WIOA title III, as well as any 
additional required partner programs listed in sec. 121(b)(1)(B) of 
WIOA under the authority of DOL to which the common exit policy applies 
in which the participant is enrolled.
    (d) State. For purposes of this part, other than in regard to 
sanctions or the statistical adjustment model, all references to 
``State'' include the outlying areas of American Samoa, Guam, 
Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, 
and, as applicable, the Republic of Palau.


Sec.  361.155  What are the primary indicators of performance under the 
Workforce Innovation and Opportunity Act?

    (a) All States submitting either a Unified or Combined State Plan 
under Sec. Sec.  361.130 and 361.143, must propose expected levels of 
performance for each of the primary indicators of performance for the 
adult, dislocated worker, and youth programs authorized under WIOA 
title I; the AEFLA program authorized under WIOA title II; the 
Employment

[[Page 56028]]

Service program authorized under the Wagner-Peyser Act, as amended by 
WIOA title III; and the VR program authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV.
    (1) Primary indicators of performance. The six primary indicators 
of performance for the adult and dislocated worker programs, the AEFLA 
program, and the VR program are:
    (i) The percentage of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (ii) The percentage of participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (iii) Median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (iv)(A) The percentage of those participants enrolled in an 
education or training program (excluding those in on-the-job training 
[OJT] and customized training) who attained a recognized postsecondary 
credential or a secondary school diploma, or its recognized equivalent, 
during participation in or within 1 year after exit from the program.
    (B) A participant who has attained a secondary school diploma or 
its recognized equivalent is included in the percentage of participants 
who have attained a secondary school diploma or recognized equivalent 
only if the participant also is employed or is enrolled in an education 
or training program leading to a recognized postsecondary credential 
within 1 year after exit from the program;
    (v) The percentage of participants who, during a program year, are 
in an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains, defined as documented academic, technical, occupational, 
or other forms of progress, towards such a credential or employment. 
Depending upon the type of education or training program, documented 
progress is defined as one of the following:
    (A) Documented achievement of at least one educational functioning 
level of a participant who is receiving instruction below the 
postsecondary education level;
    (B) Documented attainment of a secondary school diploma or its 
recognized equivalent;
    (C) Secondary or postsecondary transcript or report card for a 
sufficient number of credit hours that shows a participant is meeting 
the State unit's academic standards;
    (D) Satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training; or
    (E) Successful passage of an exam that is required for a particular 
occupation or progress in attaining technical or occupational skills as 
evidenced by trade-related benchmarks such as knowledge-based exams.
    (vi) Effectiveness in serving employers.
    (2) Participants. For purposes of the primary indicators of 
performance in paragraph (a)(1) of this section, ``participant'' will 
have the meaning given to it in Sec.  361.150(a), except that--
    (i) For purposes of determining program performance levels under 
indicators set forth in paragraphs (a)(1)(i) through (iv) and (vi) of 
this section, a ``participant'' does not include a participant who 
received services under sec. 225 of WIOA and exits such program while 
still in a correctional institution as defined in sec. 225(e)(1) of 
WIOA; and
    (ii) The Secretaries of Labor and Education may, as needed and 
consistent with the Paperwork Reduction Act (PRA), make further 
determinations as to the participants to be included in calculating 
program performance levels for purposes of any of the performance 
indicators set forth in paragraph (a)(1) of this section.
    (b) The primary indicators in paragraphs (a)(1)(i) through (iii) 
and (vi) of this section apply to the Employment Service program 
authorized under the Wagner-Peyser Act, as amended by WIOA title III.
    (c) For the youth program authorized under WIOA title I, the 
primary indicators are:
    (1) Percentage of participants who are in education or training 
activities, or in unsubsidized employment, during the second quarter 
after exit from the program;
    (2) Percentage of participants in education or training activities, 
or in unsubsidized employment, during the fourth quarter after exit 
from the program;
    (3) Median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (4) The percentage of those participants enrolled in an education 
or training program (excluding those in OJT and customized training) 
who obtained a recognized postsecondary credential or a secondary 
school diploma, or its recognized equivalent, during participation in 
or within 1 year after exit from the program, except that a participant 
who has attained a secondary school diploma or its recognized 
equivalent is included as having attained a secondary school diploma or 
recognized equivalent only if the participant is also employed or is 
enrolled in an education or training program leading to a recognized 
postsecondary credential within 1 year from program exit;
    (5) The percentage of participants who during a program year, are 
in an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains, defined as documented academic, technical, occupational or 
other forms of progress towards such a credential or employment. 
Depending upon the type of education or training program, documented 
progress is defined as one of the following:
    (i) Documented achievement of at least one educational functioning 
level of a participant who is receiving instruction below the 
postsecondary education level;
    (ii) Documented attainment of a secondary school diploma or its 
recognized equivalent;
    (iii) Secondary or postsecondary transcript or report card for a 
sufficient number of credit hours that shows a participant is achieving 
the State unit's academic standards;
    (iv) Satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training; or
    (v) Successful passage of an exam that is required for a particular 
occupation or progress in attaining technical or occupational skills as 
evidenced by trade-related benchmarks such as knowledge-based exams.
    (6) Effectiveness in serving employers.


Sec.  361.160  What information is required for State performance 
reports?

    (a) The State performance report required by sec. 116(d)(2) of WIOA 
must be submitted annually using a template the Departments of Labor 
and Education will disseminate, and must provide, at a minimum, 
information on the actual performance levels achieved consistent with 
Sec.  361.175 with respect to:
    (1) The total number of participants served, and the total number 
of

[[Page 56029]]

participants who exited each of the core programs identified in sec. 
116(b)(3)(A)(ii) of WIOA, including disaggregated counts of those who 
participated in and exited a core program, by:
    (i) Individuals with barriers to employment as defined in WIOA sec. 
3(24); and
    (ii) Co-enrollment in any of the programs in WIOA sec. 
116(b)(3)(A)(ii).
    (2) Information on the performance levels achieved for the primary 
indicators of performance for all of the core programs identified in 
Sec.  361.155 including disaggregated levels for:
    (i) Individuals with barriers to employment as defined in WIOA sec. 
3(24);
    (ii) Age;
    (iii) Sex; and
    (iv) Race and ethnicity.
    (3) The total number of participants who received career services 
and the total number of participants who exited from career services 
for the most recent program year and the 3 preceding program years, and 
the total number of participants who received training services and the 
total number of participants who exited from training services for the 
most recent program year and the 3 preceding program years, as 
applicable to the program;
    (4) Information on the performance levels achieved for the primary 
indicators of performance consistent with Sec.  361.155 for career 
services and training services for the most recent program year and the 
3 preceding program years, as applicable to the program;
    (5) The percentage of participants in a program who attained 
unsubsidized employment related to the training received (often 
referred to as training-related employment) through WIOA title I, 
subtitle B programs;
    (6) The amount of funds spent on career services and the amount of 
funds spent on training services for the most recent program year and 
the 3 preceding program years, as applicable to the program;
    (7) The average cost per participant for those participants who 
received career services and training services, respectively, during 
the most recent program year and the 3 preceding program years, as 
applicable to the program;
    (8) The percentage of a State's annual allotment under WIOA sec. 
132(b) that the State spent on administrative costs; and
    (9) Information that facilitates comparisons of programs with 
programs in other States.
    (10) For WIOA title I programs, a State performance narrative, 
which, for States in which a local area is implementing a pay-for-
performance contracting strategy, at a minimum provides:
    (i) A description of pay-for-performance contract strategies being 
used for programs;
    (ii) The performance of service providers entering into contracts 
for such strategies, measured against the levels of performance 
specified in the contracts for such strategies; and
    (iii) An evaluation of the design of the programs and performance 
strategies and, when available, the satisfaction of employers and 
participants who received services under such strategies.
    (b) The disaggregation of data for the State performance report 
must be done in compliance with WIOA sec. 116(d)(6)(C).
    (c) The State performance reports must include a mechanism of 
electronic access to the State's local area and eligible training 
provider (ETP) performance reports.
    (d) States must comply with these requirements from sec. 116 of 
WIOA as explained in joint guidance issued by the Departments of Labor 
and Education, which may include information on reportable individuals 
as determined by the Secretaries of Labor and Education.


Sec.  361.165  May a State establish additional indicators of 
performance?

    States may identify additional indicators of performance for the 
six core programs. If a State does so, these indicators must be 
included in the Unified or Combined State Plan.


Sec.  361.170  How are State levels of performance for primary 
indicators established?

    (a) A State must submit in the State Plan expected levels of 
performance on the primary indicators of performance for each core 
program as required by sec. 116(b)(3)(A)(iii) of WIOA as explained in 
joint guidance issued by the Secretaries of Labor and Education.
    (1) The initial State Plan submitted under WIOA must contain 
expected levels of performance for the first 2 years of the State Plan.
    (2) States must submit expected levels of performance for the third 
and fourth year of the State Plan before the third program year 
consistent with Sec. Sec.  361.135 and 361.145.
    (b) States must reach agreement on levels of performance with the 
Secretaries of Labor and Education for each indicator for each core 
program. These are the negotiated levels of performance. The negotiated 
levels must be based on the following factors:
    (1) How the negotiated levels of performance compare with State 
levels of performance established for other States;
    (2) The application of an objective statistical model established 
by the Secretaries of Labor and Education, subject to paragraph (d) of 
this section;
    (3) How the negotiated levels promote continuous improvement in 
performance based on the primary indicators and ensure optimal return 
on investment of Federal funds; and
    (4) The extent to which the negotiated levels assist the State in 
meeting the performance goals established by the Secretaries of Labor 
and Education for the core programs in accordance with the Government 
Performance and Results Act of 1993, as amended.
    (c) An objective statistical adjustment model will be developed and 
disseminated by the Secretaries of Labor and Education. The model will 
be based on:
    (1) Differences among States in actual economic conditions, 
including but not limited to unemployment rates and job losses or gains 
in particular industries; and
    (2) The characteristics of participants, including but not limited 
to:
    (i) Indicators of poor work history;
    (ii) Lack of work experience;
    (iii) Lack of educational or occupational skills attainment;
    (iv) Dislocation from high-wage and high-benefit employment;
    (v) Low levels of literacy;
    (vi) Low levels of English proficiency;
    (vii) Disability status;
    (viii) Homelessness;
    (ix) Ex-offender status; and
    (x) Welfare dependency.
    (d) The objective statistical adjustment model developed under 
paragraph (c) of this section will be:
    (1) Applied to the core programs' primary indicators upon 
availability of data which are necessary to populate the model and 
apply the model to the local core programs;
    (2) Subject to paragraph (d)(1) of this section, used before the 
beginning of a program year in order to reach agreement on State 
negotiated levels for the upcoming program year; and
    (3) Subject to paragraph (d)(1) of this section, used to revise 
negotiated levels at the end of a program year based on actual economic 
conditions and characteristics of participants served, consistent with 
sec. 116(b)(3)(A)(vii) of WIOA.
    (e) The negotiated levels revised at the end of the program year, 
based on the statistical adjustment model, are the adjusted levels of 
performance.
    (f) States must comply with these requirements from sec. 116 of 
WIOA as

[[Page 56030]]

explained in joint guidance issued by the Departments of Labor and 
Education.


Sec.  361.175  What responsibility do States have to use quarterly wage 
record information for performance accountability?

    (a)(1) States must, consistent with State laws, use quarterly wage 
record information in measuring a State's performance on the primary 
indicators of performance outlined in Sec.  361.155 and a local area's 
performance on the primary indicators of performance identified in 
Sec.  361.205.
    (2) The use of social security numbers from participants and such 
other information as is necessary to measure the progress of those 
participants through quarterly wage record information is authorized.
    (3) To the extent that quarterly wage records are not available for 
a participant, States may use other information as is necessary to 
measure the progress of those participants through methods other than 
quarterly wage record information.
    (b) ``Quarterly wage record information'' means intrastate and 
interstate wages paid to an individual, the social security number (or 
numbers, if more than one) of the individual, and the name, address, 
State, and the Federal employer identification number of the employer 
paying the wages to the individual.
    (c) The Governor may designate a State agency (or appropriate State 
entity) to assist in carrying out the performance reporting 
requirements for WIOA core programs and ETPs. The Governor or such 
agency (or appropriate State entity) is responsible for:
    (1) Facilitating data matches;
    (2) Data quality reliability; and
    (3) Protection against disaggregation that would violate applicable 
privacy standards.


Sec.  361.180  When is a State subject to a financial sanction under 
the Workforce Innovation and Opportunity Act?

    A State will be subject to financial sanction under WIOA sec. 
116(f) if it fails to:
    (a) Submit the State annual performance report required under WIOA 
sec. 116(d)(2); or
    (b) Meet adjusted levels of performance for the primary indicators 
of performance in accordance with sec. 116(f) of WIOA.


Sec.  361.185  When are sanctions applied for a State's failure to 
submit an annual performance report?

    (a) Sanctions will be applied when a State fails to submit the 
State annual performance report required under sec. 116(d)(2) of WIOA. 
A State fails to report if the State either:
    (1) Does not submit a State annual performance report by the date 
for timely submission set in performance reporting guidance; or
    (2) Submits a State annual performance report by the date for 
timely submission, but the report is incomplete.
    (b) Sanctions will not be applied if the reporting failure is due 
to exceptional circumstances outside of the State's control. 
Exceptional circumstances may include, but are not limited to:
    (1) Natural disasters;
    (2) Unexpected personnel transitions; and
    (3) Unexpected technology related issues.
    (c) In the event that a State may not be able to submit a complete 
and accurate performance report by the deadline for timely reporting:
    (1) The State must notify the Secretary of Labor or Secretary of 
Education as soon as possible, but no later than 30 days prior to the 
established deadline for submission, of a potential impact on the 
State's ability to submit its State annual performance report in order 
to not be considered failing to report.
    (2) In circumstances where unexpected events occur less than 30 
days before the established deadline for submission of the State annual 
performance reports, the Secretaries of Labor and Education will review 
requests for extending the reporting deadline in accordance with the 
Departments of Labor and Education's procedures that will be 
established in guidance.


Sec.  361.190  When are sanctions applied for failure to achieve 
adjusted levels of performance?

    (a) States' negotiated levels of performance will be adjusted 
through the application of the statistical adjustment model established 
under Sec.  361.170 to account for actual economic conditions 
experienced during a program year and characteristics of participants, 
annually at the close of each program year.
    (b) Any State that fails to meet adjusted levels of performance for 
the primary indicators of performance outlined in Sec.  361.155 for any 
year will receive technical assistance, including assistance in the 
development of a performance improvement plan provided by the Secretary 
of Labor or Secretary of Education.
    (c) Whether a State has failed to meet adjusted levels of 
performance will be determined using the following three criteria:
    (1) The overall State program score, which is expressed as the 
percent achieved, compares the actual results achieved by a core 
program on the primary indicators of performance to the adjusted levels 
of performance for that core program. The average of the percentages 
achieved of the adjusted level of performance for each of the primary 
indicators by a core program will constitute the overall State program 
score.
    (2) However, until all indicators for the core program have at 
least 2 years of complete data, the overall State program score will be 
based on a comparison of the actual results achieved to the adjusted 
level of performance for each of the primary indicators that have at 
least 2 years of complete data for that program;
    (3) The overall State indicator score, which is expressed as the 
percent achieved, compares the actual results achieved on a primary 
indicator of performance by all core programs in a State to the 
adjusted levels of performance for that primary indicator. The average 
of the percentages achieved of the adjusted level of performance by all 
of the core programs on that indicator will constitute the overall 
State indicator score.
    (4) However, until all indicators for the State have at least 2 
years of complete data, the overall State indicator score will be based 
on a comparison of the actual results achieved to the adjusted level of 
performance for each of the primary indicators that have at least 2 
years of complete data in a State.
    (5) The individual indicator score, which is expressed as the 
percent achieved, compares the actual results achieved by each core 
program on each of the individual primary indicators to the adjusted 
levels of performance for each of the program's primary indicators of 
performance.
    (d) A performance failure occurs when:
    (1) Any overall State program score or overall State indicator 
score falls below 90 percent for the program year; or
    (2) Any of the States' individual indicator scores fall below 50 
percent for the program year.
    (e) Sanctions based on performance failure will be applied to 
States if, for 2 consecutive years, the State fails to meet:
    (1) 90 percent of the overall State program score for the same core 
program;
    (2) 90 percent of the overall State indicator score for the same 
primary indicator; or

[[Page 56031]]

    (3) 50 percent of the same indicator score for the same program.


Sec.  361.195  What should States expect when a sanction is applied to 
the Governor's Reserve Allotment?

    (a) The Secretaries of Labor and Education will reduce the 
Governor's Reserve Allotment by five percent of the maximum available 
amount for the immediately succeeding program year if:
    (1) The State fails to submit the State annual performance reports 
as required under WIOA sec. 116(d)(2), as defined in Sec.  361.185;
    (2) The State fails to meet State adjusted levels of performance 
for the same primary performance indicator(s) under either Sec.  
361.190(d)(1) for the second consecutive year as defined in Sec.  
361.190; or
    (3) The State's score on the same indicator for the same program 
falls below 50 percent under Sec.  361.190(d)(2) for the second 
consecutive year as defined in Sec.  361.190.
    (b) If the State fails under paragraphs (a)(1) and either (a)(2) or 
(3) of this section in the same program year, the Secretaries of Labor 
and Education will reduce the Governor's Reserve Allotment by 10 
percent of the maximum available amount for the immediately succeeding 
program year.
    (c) If a State's Governor's Reserve Allotment is reduced:
    (1) The reduced amount will not be returned to the State in the 
event that the State later improves performance or submits its annual 
performance report; and
    (2) The Governor's Reserve will continue to be set at the reduced 
level in each subsequent year until the Secretary of Labor or the 
Secretary of Education, depending on which program is impacted, 
determines that the State met the State adjusted levels of performance 
for the applicable primary performance indicators and has submitted all 
of the required performance reports.
    (d) A State may request review of a sanction the Secretary of Labor 
imposes in accordance with the provisions of 20 CFR 683.800.


Sec.  361.200  What other administrative actions will be applied to 
States' performance requirements?

    (a) In addition to sanctions for failure to report or failure to 
meet adjusted levels of performance, States will be subject to 
administrative actions in the case of poor performance.
    (b) States' performance achievement on the individual primary 
indicators will be assessed in addition to the overall State program 
score and overall State indicator score. Based on this assessment, as 
clarified and explained in guidance, for performance on any individual 
primary indicator, the Secretary of Labor or the Secretary of Education 
will require the State to establish a performance risk plan to address 
continuous improvement on the individual primary indicator.


Sec.  361.205  What performance indicators apply to local areas and 
what information must be included in local area performance reports?

    (a) Each local area in a State under WIOA title I is subject to the 
same primary indicators of performance for the core programs for WIOA 
title I under Sec.  361.155(a)(1) and (c) that apply to the State.
    (b) In addition to the indicators described in paragraph (a) of 
this section, under Sec.  361.165, the Governor may apply additional 
indicators of performance to local areas in the State.
    (c) States must annually make local area performance reports 
available to the public using a template that the Departments of Labor 
and Education will disseminate in guidance, including by electronic 
means. The State must provide electronic access to the public local 
area performance report in its annual State performance report.
    (d) The local area performance report must include:
    (1) The actual results achieved under Sec.  361.155 and the 
information required under Sec.  361.160(a);
    (2) The percentage of a local area's allotment under WIOA secs. 
128(b) and 133(b) that the local area spent on administrative costs; 
and
    (3) Other information that facilitates comparisons of programs with 
programs in other local areas (or planning regions if the local area is 
part of a planning region).
    (e) The disaggregation of data for the local area performance 
report must be done in compliance with WIOA sec. 116(d)(6)(C).
    (f) States must comply with any requirements from sec. 116(d)(3) of 
WIOA as explained in guidance, including the use of the performance 
reporting template, issued by DOL.


Sec.  361.210  How are local performance levels established?

    (a) The objective statistical adjustment model required under sec. 
116(b)(3)(A)(viii) of WIOA and described in Sec.  361.170(c) must be:
    (1) Applied to the core programs' primary indicators upon 
availability of data which are necessary to populate the model and 
apply the model to the local core programs;
    (2) Used in order to reach agreement on local negotiated levels of 
performance for the upcoming program year; and
    (3) Used to establish adjusted levels of performance at the end of 
a program year based on actual conditions, consistent with WIOA sec. 
116(c)(3).
    (b) Until all indicators for the core program in a local area have 
at least 2 years of complete data, the comparison of the actual results 
achieved to the adjusted levels of performance for each of the primary 
indicators only will be applied where there are at least 2 years of 
complete data for that program.
    (c) The Governor, Local Workforce Development Board (WDB), and 
chief elected official must reach agreement on local negotiated levels 
of performance based on a negotiations process before the start of a 
program year with the use of the objective statistical model described 
in paragraph (a) of this section. The negotiations will include a 
discussion of circumstances not accounted for in the model and will 
take into account the extent to which the levels promote continuous 
improvement. The objective statistical model will be applied at the end 
of the program year based on actual economic conditions and 
characteristics of the participants served.
    (d) The negotiations process described in paragraph (c) of this 
section must be developed by the Governor and disseminated to all Local 
WDBs and chief elected officials.
    (e) The Local WDBs may apply performance measures to service 
providers that differ from the performance indicators that apply to the 
local area. These performance measures must be established after 
considering:
    (1) The established local negotiated levels;
    (2) The services provided by each provider; and
    (3) The populations the service providers are intended to serve.


Sec.  361.215  Under what circumstances are local areas eligible for 
State Incentive Grants?

    (a) The Governor is not required to award local incentive funds, 
but is authorized to provide incentive grants to local areas for 
performance on the primary indicators of performance consistent with 
WIOA sec. 134(a)(3)(A)(xi).
    (b) The Governor may use non-Federal funds to create incentives for 
the Local WDBs to implement pay-for-performance contract strategies for 
the delivery of training services described in WIOA sec. 134(c)(3) or 
activities described in WIOA sec. 129(c)(2) in the

[[Page 56032]]

local areas served by the Local WDBs. Pay-for-performance contract 
strategies must be implemented in accordance with 20 CFR part 683, 
subpart E and Sec.  361.160.


Sec.  361.220  Under what circumstances may a corrective action or 
sanction be applied to local areas for poor performance?

    (a) If a local area fails to meet the adjusted levels of 
performance agreed to under Sec.  361.210 for the primary indicators of 
performance in the adult, dislocated worker, and youth programs 
authorized under WIOA title I in any program year, technical assistance 
must be provided by the Governor or, upon the Governor's request, by 
the Secretary of Labor.
    (1) A State must establish the threshold for failure to meet 
adjusted levels of performance for a local area before coming to 
agreement on the negotiated levels of performance for the local area.
    (i) A State must establish the adjusted level of performance for a 
local area, using the statistical adjustment model described in Sec.  
361.170(c).
    (ii) At least 2 years of complete data on any indicator for any 
local core program are required in order to establish adjusted levels 
of performance for a local area.
    (2) The technical assistance may include:
    (i) Assistance in the development of a performance improvement 
plan;
    (ii) The development of a modified local or regional plan; or
    (iii) Other actions designed to assist the local area in improving 
performance.
    (b) If a local area fails to meet the adjusted levels of 
performance agreed to under Sec.  361.210 for the same primary 
indicators of performance for the same core program authorized under 
WIOA title I for a third consecutive program year, the Governor must 
take corrective actions. The corrective actions must include the 
development of a reorganization plan under which the Governor:
    (1) Requires the appointment and certification of a new Local WDB, 
consistent with the criteria established under 20 CFR 679.350;
    (2) Prohibits the use of eligible providers and one-stop partners 
that have been identified as achieving poor levels of performance; or
    (3) Takes such other significant actions as the Governor determines 
are appropriate.


Sec.  361.225  Under what circumstances may local areas appeal a 
reorganization plan?

    (a) The Local WDB and chief elected official for a local area that 
is subject to a reorganization plan under WIOA sec. 116(g)(2)(A) may 
appeal to the Governor to rescind or revise the reorganization plan not 
later than 30 days after receiving notice of the reorganization plan. 
The Governor must make a final decision within 30 days after receipt of 
the appeal.
    (b) The Local WDB and chief elected official may appeal the final 
decision of the Governor to the Secretary of Labor not later than 30 
days after receiving the decision from the Governor. Any appeal of the 
Governor's final decision must be:
    (1) Appealed jointly by the Local WDB and chief elected official to 
the Secretary of Labor under 20 CFR 683.650; and
    (2) Must be submitted by certified mail, return receipt requested, 
to the Secretary of Labor, U.S. Department of Labor, 200 Constitution 
Ave. NW., Washington, DC 20210, Attention: ASET. A copy of the appeal 
must be simultaneously provided to the Governor.
    (c) Upon receipt of the joint appeal from the Local WDB and chief 
elected official, the Secretary of Labor must make a final decision 
within 30 days. In making this determination the Secretary of Labor may 
consider any comments submitted by the Governor in response to the 
appeals.
    (d) The decision by the Governor on the appeal becomes effective at 
the time it is issued and remains effective unless the Secretary of 
Labor rescinds or revises the reorganization plan under WIOA sec. 
116(g)(2)(C).


Sec.  361.230  What information is required for the eligible training 
provider performance reports?

    (a) States are required to make available and publish annually 
using a template the Departments of Labor and Education will 
disseminate including through electronic means, the ETP performance 
reports for ETPs who provide services under sec. 122 of WIOA that are 
described in 20 CFR 680.400 through 680.530. These reports at a minimum 
must include, consistent with Sec.  361.175 and with respect to each 
program of study that is eligible to receive funds under WIOA:
    (1) The total number of participants as defined by Sec.  361.150(a) 
who received training services under the adult and dislocated worker 
programs authorized under WIOA title I for the most recent year and the 
3 preceding program years, including:
    (i) The number of participants under the adult and dislocated 
worker programs disaggregated by barriers to employment;
    (ii) The number of participants under the adult and dislocated 
worker programs disaggregated by race, ethnicity, sex, and age;
    (iii) The number of participants under the adult and dislocated 
worker programs disaggregated by the type of training entity for the 
most recent program year and the 3 preceding program years;
    (2) The total number of participants who exit a program of study or 
its equivalent, including disaggregate counts by the type of training 
entity during the most recent program year and the 3 preceding program 
years;
    (3) The average cost-per-participant for participants who received 
training services for the most recent program year and the 3 preceding 
program years disaggregated by type of training entity;
    (4) The total number of individuals exiting from the program of 
study (or the equivalent) with respect to all individuals engaging in 
the program of study (or the equivalent); and
    (5) The levels of performance achieved for the primary indicators 
of performance identified in Sec.  361.155(a)(1)(i) through (iv) with 
respect to all individuals engaging in a program of study (or the 
equivalent).
    (b) Apprenticeship programs registered under the National 
Apprenticeship Act are not required to submit ETP performance 
information. If a registered apprenticeship program voluntarily submits 
performance information to a State, the State must include this 
information in the report.
    (c) The State must provide a mechanism of electronic access to the 
public ETP performance report in its annual State performance report.
    (d) States must comply with any requirements from sec. 116(d)(4) of 
WIOA as explained in guidance issued by DOL.
    (e) The Governor may designate one or more State agencies such as a 
State Education Agency or other State Educational Authority to assist 
in overseeing ETP performance and facilitating the production and 
dissemination of ETP performance reports. These agencies may be the 
same agencies that are designated as responsible for administering the 
ETP list as provided under 20 CFR 680.500. The Governor or such 
agencies, or authorities, is responsible for:
    (1) Facilitating data matches between ETP records and unemployment 
insurance (UI) wage data in order to produce the report;
    (2) The creation and dissemination of the reports as described in 
paragraphs (a) through (d) of this section;

[[Page 56033]]

    (3) Coordinating the dissemination of the performance reports with 
the ETP list and the information required to accompany the list, as 
provided in 20 CFR 680.500.


Sec.  361.235  What are the reporting requirements for individual 
records for core Workforce Innovation and Opportunity Act (WIOA) title 
I programs; the Wagner-Peyser Act Employment Service program, as 
amended by WIOA title III; and the Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by WIOA title IV?

    (a) On a quarterly basis, each State must submit to the Secretary 
of Labor or the Secretary of Education, as appropriate, individual 
records that include demographic information, information on services 
received, and information on resulting outcomes, as appropriate, for 
each reportable individual in either of the following programs 
administered by the Secretary of Labor or Secretary of Education: A 
WIOA title I core program; the Employment Service program authorized 
under the Wagner-Peyser Act, as amended by WIOA title III; or the VR 
program authorized under title I of the Rehabilitation Act of 1973, as 
amended by WIOA title IV.
    (b) For individual records submitted to the Secretary of Labor, 
those records may be required to be integrated across all programs 
administered by the Secretary of Labor in one single file.
    (c) States must comply with the requirements of sec. 116(d)(2) of 
WIOA as explained in guidance issued by the Departments of Labor and 
Education.


Sec.  361.240  What are the requirements for data validation of State 
annual performance reports?

    (a) States must establish procedures, consistent with guidelines 
issued by the Secretary of Labor or the Secretary of Education, to 
ensure that they submit complete annual performance reports that 
contain information that is valid and reliable, as required by WIOA 
sec. 116(d)(5).
    (b) If a State fails to meet standards in paragraph (a) of this 
section as determined by the Secretary of Labor or the Secretary of 
Education, the appropriate Secretary will provide technical assistance 
and may require the State to develop and implement corrective actions, 
which may require the State to provide training for its subrecipients.
    (c) The Secretaries of Labor and Education will provide training 
and technical assistance to States in order to implement this section. 
States must comply with the requirements of sec. 116(d)(5) of WIOA as 
explained in guidance.

0
7. Add subpart F to part 361 to read as follows:
Subpart F--Description of the One-Stop Delivery System Under Title I of 
the Workforce Innovation and Opportunity Act
Sec.
361.300 What is the one-stop delivery system?
361.305 What is a comprehensive one-stop center and what must be 
provided there?
361.310 What is an affiliated site and what must be provided there?
361.315 Can a stand-alone Wagner-Peyser Act Employment Service 
office be designated as an affiliated one-stop site?
361.320 Are there any requirements for networks of eligible one-stop 
partners or specialized centers?
361.400 Who are the required one-stop partners?
361.405 Is Temporary Assistance for Needy Families a required one-
stop partner?
361.410 What other entities may serve as one-stop partners?
361.415 What entity serves as the one-stop partner for a particular 
program in the local area?
361.420 What are the roles and responsibilities of the required one-
stop partners?
361.425 What are the applicable career services that must be 
provided through the one-stop delivery system by required one-stop 
partners?
361.430 What are career services?
361.435 What are the business services provided through the one-stop 
delivery system, and how are they provided?
361.440 When may a fee be charged for the business services in this 
subpart?
361.500 What is the Memorandum of Understanding for the one-stop 
delivery system and what must be included in the Memorandum of 
Understanding?
361.505 Is there a single Memorandum of Understanding for the local 
area, or must there be different Memoranda of Understanding between 
the Local Workforce Development Board and each partner?
361.510 How must the Memorandum of Understanding be negotiated?
361.600 Who may operate one-stop centers?
361.605 How is the one-stop operator selected?
361.610 When is the sole-source selection of one-stop operators 
appropriate, and how is it conducted?
361.615 May an entity currently serving as one-stop operator compete 
to be a one-stop operator under the procurement requirements of this 
subpart?
361.620 What is the one-stop operator's role?
361.625 Can a one-stop operator also be a service provider?
361.630 Can State merit staff still work in a one-stop center where 
the operator is not a governmental entity?
361.635 What is the compliance date of the provisions of this 
subpart?
361.700 What are the one-stop infrastructure costs?
361.705 What guidance must the Governor issue regarding one-stop 
infrastructure funding?
361.710 How are infrastructure costs funded?
361.715 How are one-stop infrastructure costs funded in the local 
funding mechanism?
361.720 What funds are used to pay for infrastructure costs in the 
local one-stop infrastructure funding mechanism?
361.725 What happens if consensus on infrastructure funding is not 
reached at the local level between the Local Workforce Development 
Board, chief elected officials, and one-stop partners?
361.730 What is the State one-stop infrastructure funding mechanism?
361.731 What are the steps to determine the amount to be paid under 
the State one-stop infrastructure funding mechanism?
361.735 How are infrastructure cost budgets for the one-stop centers 
in a local area determined in the State one-stop infrastructure 
funding mechanism?
361.736 How does the Governor establish a cost allocation 
methodology used to determine the one-stop partner programs' 
proportionate shares of infrastructure costs under the State one-
stop infrastructure funding mechanism?
361.737 How are one-stop partner programs' proportionate shares of 
infrastructure costs determined under the State one-stop 
infrastructure funding mechanism?
361.738 How are statewide caps on the contributions for one-stop 
infrastructure funding determined in the State one-stop 
infrastructure funding mechanism?
361.740 What funds are used to pay for infrastructure costs in the 
State one-stop infrastructure funding mechanism?
361.745 What factors does the State Workforce Development Board use 
to develop the formula described in Workforce Innovation and 
Opportunity Act, which is used by the Governor to determine the 
appropriate one-stop infrastructure budget for each local area 
operating under the State infrastructure funding mechanism, if no 
reasonably implementable locally negotiated budget exists?
361.750 When and how can a one-stop partner appeal a one-stop 
infrastructure amount designated by the State under the State 
infrastructure funding mechanism?
361.755 What are the required elements regarding infrastructure 
funding that must be included in the one-stop Memorandum of 
Understanding?
361.760 How do one-stop partners jointly fund other shared costs 
under the Memorandum of Understanding?
361.800 How are one-stop centers and one-stop delivery systems 
certified for effectiveness, physical and programmatic 
accessibility, and continuous improvement?
361.900 What is the common identifier to be used by each one-stop 
delivery system?

    Authority: Secs. 503, 107, 121, 134, 189, Pub. L. 113-128, 128 
Stat. 1425 (Jul. 22, 2014).

[[Page 56034]]

Subpart F--Description of the One-Stop Delivery System Under Title 
I of the Workforce Innovation and Opportunity Act


Sec.  361.300   What is the one-stop delivery system?

    (a) The one-stop delivery system brings together workforce 
development, educational, and other human resource services in a 
seamless customer-focused service delivery network that enhances access 
to the programs' services and improves long-term employment outcomes 
for individuals receiving assistance. One-stop partners administer 
separately funded programs as a set of integrated streamlined services 
to customers.
    (b) Title I of the Workforce Innovation and Opportunity Act (WIOA) 
assigns responsibilities at the local, State, and Federal level to 
ensure the creation and maintenance of a one-stop delivery system that 
enhances the range and quality of education and workforce development 
services that employers and individual customers can access.
    (c) The system must include at least one comprehensive physical 
center in each local area as described in Sec.  361.305.
    (d) The system may also have additional arrangements to supplement 
the comprehensive center. These arrangements include:
    (1) An affiliated site or a network of affiliated sites, where one 
or more partners make programs, services, and activities available, as 
described in Sec.  361.310;
    (2) A network of eligible one-stop partners, as described in 
Sec. Sec.  361.400 through 361.410, through which each partner provides 
one or more of the programs, services, and activities that are linked, 
physically or technologically, to an affiliated site or access point 
that assures customers are provided information on the availability of 
career services, as well as other program services and activities, 
regardless of where they initially enter the public workforce system in 
the local area; and
    (3) Specialized centers that address specific needs, including 
those of dislocated workers, youth, or key industry sectors, or 
clusters.
    (e) Required one-stop partner programs must provide access to 
programs, services, and activities through electronic means if 
applicable and practicable. This is in addition to providing access to 
services through the mandatory comprehensive physical one-stop center 
and any affiliated sites or specialized centers. The provision of 
programs and services by electronic methods such as Web sites, 
telephones, or other means must improve the efficiency, coordination, 
and quality of one-stop partner services. Electronic delivery must not 
replace access to such services at a comprehensive one-stop center or 
be a substitute to making services available at an affiliated site if 
the partner is participating in an affiliated site. Electronic delivery 
systems must be in compliance with the nondiscrimination and equal 
opportunity provisions of WIOA sec. 188 and its implementing 
regulations at 29 CFR part 38.
    (f) The design of the local area's one-stop delivery system must be 
described in the Memorandum of Understanding (MOU) executed with the 
one-stop partners, described in Sec.  361.500.


Sec.  361.305  What is a comprehensive one-stop center and what must be 
provided there?

    (a) A comprehensive one-stop center is a physical location where 
job seeker and employer customers can access the programs, services, 
and activities of all required one-stop partners. A comprehensive one-
stop center must have at least one title I staff person physically 
present.
    (b) The comprehensive one-stop center must provide:
    (1) Career services, described in Sec.  361.430;
    (2) Access to training services described in 20 CFR 680.200;
    (3) Access to any employment and training activities carried out 
under sec. 134(d) of WIOA;
    (4) Access to programs and activities carried out by one-stop 
partners listed in Sec. Sec.  361.400 through 361.410, including the 
Employment Service program authorized under the Wagner-Peyser Act, as 
amended by WIOA title III (Wagner-Peyser Act Employment Service 
program); and
    (5) Workforce and labor market information.
    (c) Customers must have access to these programs, services, and 
activities during regular business days at a comprehensive one-stop 
center. The Local Workforce Development Board (WDB) may establish other 
service hours at other times to accommodate the schedules of 
individuals who work on regular business days. The State WDB will 
evaluate the hours of access to service as part of the evaluation of 
effectiveness in the one-stop certification process described in Sec.  
361.800(b).
    (d) ``Access'' to each partner program and its services means:
    (1) Having a program staff member physically present at the one-
stop center;
    (2) Having a staff member from a different partner program 
physically present at the one-stop center appropriately trained to 
provide information to customers about the programs, services, and 
activities available through partner programs; or
    (3) Making available a direct linkage through technology to program 
staff who can provide meaningful information or services.
    (i) A ``direct linkage'' means providing direct connection at the 
one-stop center, within a reasonable time, by phone or through a real-
time Web-based communication to a program staff member who can provide 
program information or services to the customer.
    (ii) A ``direct linkage'' cannot exclusively be providing a phone 
number or computer Web site or providing information, pamphlets, or 
materials.
    (e) All comprehensive one-stop centers must be physically and 
programmatically accessible to individuals with disabilities, as 
described in 29 CFR part 38, the implementing regulations of WIOA sec. 
188.


Sec.  361.310  What is an affiliated site and what must be provided 
there?

    (a) An affiliated site, or affiliate one-stop center, is a site 
that makes available to job seeker and employer customers one or more 
of the one-stop partners' programs, services, and activities. An 
affiliated site does not need to provide access to every required one-
stop partner program. The frequency of program staff's physical 
presence in the affiliated site will be determined at the local level. 
Affiliated sites are access points in addition to the comprehensive 
one-stop center(s) in each local area. If used by local areas as a part 
of the service delivery strategy, affiliate sites must be implemented 
in a manner that supplements and enhances customer access to services.
    (b) As described in Sec.  361.315, Wagner-Peyser Act employment 
services cannot be a stand-alone affiliated site.
    (c) States, in conjunction with the Local WDBs, must examine lease 
agreements and property holdings throughout the one-stop delivery 
system in order to use property in an efficient and effective way. 
Where necessary and appropriate, States and Local WDBs must take 
expeditious steps to align lease expiration dates with efforts to 
consolidate one-stop operations into service points where Wagner-Peyser 
Act employment services are colocated as soon as reasonably possible. 
These steps must be included in the State Plan.

[[Page 56035]]

    (d) All affiliated sites must be physically and programmatically 
accessible to individuals with disabilities, as described in 29 CFR 
part 38, the implementing regulations of WIOA sec. 188.


Sec.  361.315  Can a stand-alone Wagner-Peyser Act Employment Service 
office be designated as an affiliated one-stop site?

    (a) Separate stand-alone Wagner-Peyser Act Employment Service 
offices are not permitted under WIOA, as also described in 20 CFR 
652.202.
    (b) If Wagner-Peyser Act employment services are provided at an 
affiliated site, there must be at least one or more other partners in 
the affiliated site with a physical presence of combined staff more 
than 50 percent of the time the center is open. Additionally, the other 
partner must not be the partner administering local veterans' 
employment representatives, disabled veterans' outreach program 
specialists, or unemployment compensation programs. If Wagner-Peyser 
Act employment services and any of these 3 programs are provided at an 
affiliated site, an additional partner or partners must have a presence 
of combined staff in the center more than 50 percent of the time the 
center is open.


Sec.  361.320  Are there any requirements for networks of eligible one-
stop partners or specialized centers?

    Any network of one-stop partners or specialized centers, as 
described in Sec.  361.300(d)(3), must be connected to the 
comprehensive one-stop center and any appropriate affiliate one-stop 
centers, for example, by having processes in place to make referrals to 
these centers and the partner programs located in them. Wagner-Peyser 
Act employment services cannot stand alone in a specialized center. 
Just as described in Sec.  361.315 for an affiliated site, a 
specialized center must include other programs besides Wagner-Peyser 
Act employment services, local veterans' employment representatives, 
disabled veterans' outreach program specialists, and unemployment 
compensation.


Sec.  361.400  Who are the required one-stop partners?

    (a) Section 121(b)(1)(B) of WIOA identifies the entities that are 
required partners in the local one-stop delivery systems.
    (b) The required partners are the entities responsible for 
administering the following programs and activities in the local area:
    (1) Programs authorized under title I of WIOA, including:
    (i) Adults;
    (ii) Dislocated workers;
    (iii) Youth;
    (iv) Job Corps;
    (v) YouthBuild;
    (vi) Native American programs; and
    (vii) Migrant and seasonal farmworker programs;
    (2) The Wagner-Peyser Act Employment Service program authorized 
under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), as amended by WIOA 
title III;
    (3) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA;
    (4) The Vocational Rehabilitation (VR) program authorized under 
title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), as 
amended by WIOA title IV;
    (5) The Senior Community Service Employment Program authorized 
under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et 
seq.);
    (6) Career and technical education programs at the postsecondary 
level authorized under the Carl D. Perkins Career and Technical 
Education Act of 2006 (20 U.S.C. 2301 et seq.);
    (7) Trade Adjustment Assistance activities authorized under chapter 
2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
    (8) Jobs for Veterans State Grants programs authorized under 
chapter 41 of title 38, U.S.C.;
    (9) Employment and training activities carried out under the 
Community Services Block Grant (42 U.S.C. 9901 et seq.);
    (10) Employment and training activities carried out by the 
Department of Housing and Urban Development;
    (11) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law);
    (12) Programs authorized under sec. 212 of the Second Chance Act of 
2007 (42 U.S.C. 17532); and
    (13) Temporary Assistance for Needy Families (TANF) authorized 
under part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.), unless exempted by the Governor under Sec.  361.405(b).


Sec.  361.405  Is Temporary Assistance for Needy Families a required 
one-stop partner?

    (a) Yes, TANF, authorized under part A of title IV of the Social 
Security Act (42 U.S.C. 601 et seq.), is a required partner.
    (b) The Governor may determine that TANF will not be a required 
partner in the State, or within some specific local areas in the State. 
In this instance, the Governor must notify the Secretaries of the U.S. 
Departments of Labor and Health and Human Services in writing of this 
determination.
    (c) In States, or local areas within a State, where the Governor 
has determined that TANF is not required to be a partner, local TANF 
programs may still work in collaboration or partnership with the local 
one-stop centers to deliver employment and training services to the 
TANF population unless inconsistent with the Governor's direction.


Sec.  361.410  What other entities may serve as one-stop partners?

    (a) Other entities that carry out a workforce development program, 
including Federal, State, or local programs and programs in the private 
sector, may serve as additional partners in the one-stop delivery 
system if the Local WDB and chief elected official(s) approve the 
entity's participation.
    (b) Additional partners may include, but are not limited to:
    (1) Employment and training programs administered by the Social 
Security Administration, including the Ticket to Work and Self-
Sufficiency Program established under sec. 1148 of the Social Security 
Act (42 U.S.C. 1320b-19);
    (2) Employment and training programs carried out by the Small 
Business Administration;
    (3) Supplemental Nutrition Assistance Program (SNAP) employment and 
training programs, authorized under secs. 6(d)(4) and 6(o) of the Food 
and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
    (4) Client Assistance Program authorized under sec. 112 of the 
Rehabilitation Act of 1973 (29 U.S.C. 732);
    (5) Programs authorized under the National and Community Service 
Act of 1990 (42 U.S.C. 12501 et seq.); and
    (6) Other appropriate Federal, State or local programs, including, 
but not limited to, employment, education, and training programs 
provided by public libraries or in the private sector.


Sec.  361.415  What entity serves as the one-stop partner for a 
particular program in the local area?

    (a) The entity that carries out the program and activities listed 
in Sec.  361.400 or Sec.  361.410, and therefore serves as the one-stop 
partner, is the grant recipient, administrative entity, or organization 
responsible for administering the funds of the specified program in the 
local area. The term ``entity'' does not include the service providers 
that contract with, or are subrecipients of, the local administrative 
entity. For programs that do not include local administrative entities, 
the responsible State agency

[[Page 56036]]

must be the partner. Specific entities for particular programs are 
identified in paragraphs (b) through (e) of this section. If a program 
or activity listed in Sec.  361.400 is not carried out in a local area, 
the requirements relating to a required one-stop partner are not 
applicable to such program or activity in that local one-stop delivery 
system.
    (b) For title II of WIOA, the entity or agency that carries out the 
program for the purposes of paragraph (a) of this section is the sole 
entity or agency in the State or outlying area responsible for 
administering or supervising policy for adult education and literacy 
activities in the State or outlying area. The State eligible entity or 
agency may delegate its responsibilities under paragraph (a) of this 
section to one or more eligible providers or consortium of eligible 
providers.
    (c) For the VR program, authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV, the entity 
that carries out the program for the purposes of paragraph (a) of this 
section is the designated State agencies or designated State units 
specified under sec. 101(a)(2) of the Rehabilitation Act that is 
primarily concerned with vocational rehabilitation, or vocational and 
other rehabilitation, of individuals with disabilities.
    (d) Under WIOA title I, the national programs, including Job Corps, 
the Native American program, YouthBuild, and Migrant and Seasonal 
Farmworker programs are required one-stop partners. The entity for the 
Native American program, YouthBuild, and Migrant and Seasonal 
Farmworker programs is the grantee of those respective programs. The 
entity for Job Corps is the Job Corps center.
    (e) For the Carl D. Perkins Career and Technical Education Act of 
2006, the entity that carries out the program for the purposes of 
paragraph (a) of this section is the eligible recipient or recipients 
at the postsecondary level, or a consortium of eligible recipients at 
the postsecondary level in the local area. The eligible recipient at 
the postsecondary level may also request assistance from the State 
eligible agency in completing its responsibilities under paragraph (a) 
of this section.


Sec.  361.420  What are the roles and responsibilities of the required 
one-stop partners?

    Each required partner must:
    (a) Provide access to its programs or activities through the one-
stop delivery system, in addition to any other appropriate locations;
    (b) Use a portion of funds made available to the partner's program, 
to the extent consistent with the Federal law authorizing the partner's 
program and with Federal cost principles in 2 CFR parts 200 and 3474 
(requiring, among other things, that costs are allowable, reasonable, 
necessary, and allocable), to:
    (1) Provide applicable career services; and
    (2) Work collaboratively with the State and Local WDBs to establish 
and maintain the one-stop delivery system. This includes jointly 
funding the one-stop infrastructure through partner contributions that 
are based upon:
    (i) A reasonable cost allocation methodology by which 
infrastructure costs are charged to each partner based on proportionate 
use and relative benefit received;
    (ii) Federal cost principles; and
    (iii) Any local administrative cost requirements in the Federal law 
authorizing the partner's program. (This is further described in Sec.  
361.700.)
    (c) Enter into an MOU with the Local WDB relating to the operation 
of the one-stop delivery system that meets the requirements of Sec.  
361.500(b);
    (d) Participate in the operation of the one-stop delivery system 
consistent with the terms of the MOU, requirements of authorizing laws, 
the Federal cost principles, and all other applicable legal 
requirements; and
    (e) Provide representation on the State and Local WDBs as required 
and participate in Board committees as needed.


Sec.  361.425  What are the applicable career services that must be 
provided through the one-stop delivery system by required one-stop 
partners?

    (a) The applicable career services to be delivered by required one-
stop partners are those services listed in Sec.  361.430 that are 
authorized to be provided under each partner's program.
    (b) One-stop centers provide services to individual customers based 
on individual needs, including the seamless delivery of multiple 
services to individual customers. There is no required sequence of 
services.


Sec.  361.430  What are career services?

    Career services, as identified in sec. 134(c)(2) of WIOA, consist 
of three types:
    (a) Basic career services must be made available and, at a minimum, 
must include the following services, as consistent with allowable 
program activities and Federal cost principles:
    (1) Determinations of whether the individual is eligible to receive 
assistance from the adult, dislocated worker, or youth programs;
    (2) Outreach, intake (including worker profiling), and orientation 
to information and other services available through the one-stop 
delivery system. For the TANF program, States must provide individuals 
with the opportunity to initiate an application for TANF assistance and 
non-assistance benefits and services, which could be implemented 
through the provision of paper application forms or links to the 
application Web site;
    (3) Initial assessment of skill levels including literacy, 
numeracy, and English language proficiency, as well as aptitudes, 
abilities (including skills gaps), and supportive services needs;
    (4) Labor exchange services, including--
    (i) Job search and placement assistance, and, when needed by an 
individual, career counseling, including--
    (A) Provision of information on in-demand industry sectors and 
occupations (as defined in sec. 3(23) of WIOA); and
    (B) Provision of information on nontraditional employment; and
    (ii) Appropriate recruitment and other business services on behalf 
of employers, including information and referrals to specialized 
business services other than those traditionally offered through the 
one-stop delivery system;
    (5) Provision of referrals to and coordination of activities with 
other programs and services, including programs and services within the 
one-stop delivery system and, when appropriate, other workforce 
development programs;
    (6) Provision of workforce and labor market employment statistics 
information, including the provision of accurate information relating 
to local, regional, and national labor market areas, including--
    (i) Job vacancy listings in labor market areas;
    (ii) Information on job skills necessary to obtain the vacant jobs 
listed; and
    (iii) Information relating to local occupations in demand and the 
earnings, skill requirements, and opportunities for advancement for 
those jobs;
    (7) Provision of performance information and program cost 
information on eligible providers of education, training, and workforce 
services by program and type of providers;
    (8) Provision of information, in usable and understandable formats 
and languages, about how the local area is performing on local 
performance accountability measures, as well as any additional 
performance information

[[Page 56037]]

relating to the area's one-stop delivery system;
    (9) Provision of information, in usable and understandable formats 
and languages, relating to the availability of supportive services or 
assistance, and appropriate referrals to those services and assistance, 
including: Child care; child support; medical or child health 
assistance available through the State's Medicaid program and 
Children's Health Insurance Program; benefits under SNAP; assistance 
through the earned income tax credit; and assistance under a State 
program for TANF, and other supportive services and transportation 
provided through that program;
    (10) Provision of information and meaningful assistance to 
individuals seeking assistance in filing a claim for unemployment 
compensation.
    (i) ``Meaningful assistance'' means:
    (A) Providing assistance on-site using staff who are well-trained 
in unemployment compensation claims filing and the rights and 
responsibilities of claimants; or
    (B) Providing assistance by phone or via other technology, as long 
as the assistance is provided by trained and available staff and within 
a reasonable time.
    (ii) The costs associated in providing this assistance may be paid 
for by the State's unemployment insurance program, or the WIOA adult or 
dislocated worker programs, or some combination thereof.
    (11) Assistance in establishing eligibility for programs of 
financial aid assistance for training and education programs not 
provided under WIOA.
    (b) Individualized career services must be made available if 
determined to be appropriate in order for an individual to obtain or 
retain employment. These services include the following services, as 
consistent with program requirements and Federal cost principles:
    (1) Comprehensive and specialized assessments of the skill levels 
and service needs of adults and dislocated workers, which may include--
    (i) Diagnostic testing and use of other assessment tools; and
    (ii) In-depth interviewing and evaluation to identify employment 
barriers and appropriate employment goals;
    (2) Development of an individual employment plan, to identify the 
employment goals, appropriate achievement objectives, and appropriate 
combination of services for the participant to achieve his or her 
employment goals, including the list of, and information about, the 
eligible training providers (as described in 20 CFR 680.180);
    (3) Group counseling;
    (4) Individual counseling;
    (5) Career planning;
    (6) Short-term pre-vocational services including development of 
learning skills, communication skills, interviewing skills, 
punctuality, personal maintenance skills, and professional conduct 
services to prepare individuals for unsubsidized employment or 
training;
    (7) Internships and work experiences that are linked to careers (as 
described in 20 CFR 680.170);
    (8) Workforce preparation activities;
    (9) Financial literacy services as described in sec. 129(b)(2)(D) 
of WIOA and 20 CFR 681.500;
    (10) Out-of-area job search assistance and relocation assistance; 
and
    (11) English language acquisition and integrated education and 
training programs.
    (c) Follow-up services must be provided, as appropriate, including: 
Counseling regarding the workplace, for participants in adult or 
dislocated worker workforce investment activities who are placed in 
unsubsidized employment, for up to 12 months after the first day of 
employment.
    (d) In addition to the requirements in paragraph (a)(2) of this 
section, TANF agencies must identify employment services and related 
support being provided by the TANF program (within the local area) that 
qualify as career services and ensure access to them via the local one-
stop delivery system.


Sec.  361.435  What are the business services provided through the one-
stop delivery system, and how are they provided?

    (a) Certain career services must be made available to local 
employers, specifically labor exchange activities and labor market 
information described in Sec.  361.430(a)(4)(ii) and (a)(6). Local 
areas must establish and develop relationships and networks with large 
and small employers and their intermediaries. Local areas also must 
develop, convene, or implement industry or sector partnerships.
    (b) Customized business services may be provided to employers, 
employer associations, or other such organizations. These services are 
tailored for specific employers and may include:
    (1) Customized screening and referral of qualified participants in 
training services to employers;
    (2) Customized services to employers, employer associations, or 
other such organizations, on employment-related issues;
    (3) Customized recruitment events and related services for 
employers including targeted job fairs;
    (4) Human resource consultation services, including but not limited 
to assistance with:
    (i) Writing/reviewing job descriptions and employee handbooks;
    (ii) Developing performance evaluation and personnel policies;
    (iii) Creating orientation sessions for new workers;
    (iv) Honing job interview techniques for efficiency and compliance;
    (v) Analyzing employee turnover;
    (vi) Creating job accommodations and using assistive technologies; 
or
    (vii) Explaining labor and employment laws to help employers comply 
with discrimination, wage/hour, and safety/health regulations;
    (5) Customized labor market information for specific employers, 
sectors, industries or clusters; and
    (6) Other similar customized services.
    (c) Local areas may also provide other business services and 
strategies that meet the workforce investment needs of area employers, 
in accordance with partner programs' statutory requirements and 
consistent with Federal cost principles. These business services may be 
provided through effective business intermediaries working in 
conjunction with the Local WDB, or through the use of economic 
development, philanthropic, and other public and private resources in a 
manner determined appropriate by the Local WDB and in cooperation with 
the State. Allowable activities, consistent with each partner's 
authorized activities, include, but are not limited to:
    (1) Developing and implementing industry sector strategies 
(including strategies involving industry partnerships, regional skills 
alliances, industry skill panels, and sectoral skills partnerships);
    (2) Customized assistance or referral for assistance in the 
development of a registered apprenticeship program;
    (3) Developing and delivering innovative workforce investment 
services and strategies for area employers, which may include career 
pathways, skills upgrading, skill standard development and 
certification for recognized postsecondary credential or other employer 
use, and other effective initiatives for meeting the workforce 
investment needs of area employers and workers;
    (4) Assistance to area employers in managing reductions in force in 
coordination with rapid response activities and with strategies for the 
aversion of layoffs, which may include

[[Page 56038]]

strategies such as early identification of firms at risk of layoffs, 
use of feasibility studies to assess the needs of and options for at-
risk firms, and the delivery of employment and training activities to 
address risk factors;
    (5) The marketing of business services to appropriate area 
employers, including small and mid-sized employers; and
    (6) Assisting employers with accessing local, State, and Federal 
tax credits.
    (d) All business services and strategies must be reflected in the 
local plan, described in 20 CFR 679.560(b)(3).


Sec.  361.440  When may a fee be charged for the business services in 
this subpart?

    (a) There is no requirement that a fee-for-service be charged to 
employers.
    (b) No fee may be charged for services provided in Sec.  
361.435(a).
    (c) A fee may be charged for services provided under Sec.  
361.435(b) and (c). Services provided under Sec.  361.435(c) may be 
provided through effective business intermediaries working in 
conjunction with the Local WDB and may also be provided on a fee-for-
service basis or through the leveraging of economic development, 
philanthropic, and other public and private resources in a manner 
determined appropriate by the Local WDB. The Local WDB may examine the 
services provided compared with the assets and resources available 
within the local one-stop delivery system and through its partners to 
determine an appropriate cost structure for services, if any.
    (d) Any fees earned are recognized as program income and must be 
expended by the partner in accordance with the partner program's 
authorizing statute, implementing regulations, and Federal cost 
principles identified in Uniform Guidance.


Sec.  361.500  What is the Memorandum of Understanding for the one-stop 
delivery system and what must be included in the Memorandum of 
Understanding?

    (a) The MOU is the product of local discussion and negotiation, and 
is an agreement developed and executed between the Local WDB and the 
one-stop partners, with the agreement of the chief elected official and 
the one-stop partners, relating to the operation of the one-stop 
delivery system in the local area. Two or more local areas in a region 
may develop a single joint MOU, if they are in a region that has 
submitted a regional plan under sec. 106 of WIOA.
    (b) The MOU must include:
    (1) A description of services to be provided through the one-stop 
delivery system, including the manner in which the services will be 
coordinated and delivered through the system;
    (2) Agreement on funding the costs of the services and the 
operating costs of the system, including:
    (i) Funding of infrastructure costs of one-stop centers in 
accordance with Sec. Sec.  361.700 through 361.755; and
    (ii) Funding of the shared services and operating costs of the one-
stop delivery system described in Sec.  361.760;
    (3) Methods for referring individuals between the one-stop 
operators and partners for appropriate services and activities;
    (4) Methods to ensure that the needs of workers, youth, and 
individuals with barriers to employment, including individuals with 
disabilities, are addressed in providing access to services, including 
access to technology and materials that are available through the one-
stop delivery system;
    (5) The duration of the MOU and procedures for amending it; and
    (6) Assurances that each MOU will be reviewed, and if substantial 
changes have occurred, renewed, not less than once every 3-year period 
to ensure appropriate funding and delivery of services.
    (c) The MOU may contain any other provisions agreed to by the 
parties that are consistent with WIOA title I, the authorizing statutes 
and regulations of one-stop partner programs, and the WIOA regulations.
    (d) When fully executed, the MOU must contain the signatures of the 
Local WDB, one-stop partners, the chief elected official(s), and the 
time period in which the agreement is effective. The MOU must be 
updated not less than every 3 years to reflect any changes in the 
signatory official of the Board, one-stop partners, and chief elected 
officials, or one-stop infrastructure funding.
    (e) If a one-stop partner appeal to the State regarding 
infrastructure costs, using the process described in Sec.  361.750, 
results in a change to the one-stop partner's infrastructure cost 
contributions, the MOU must be updated to reflect the final one-stop 
partner infrastructure cost contributions.


Sec.  361.505  Is there a single Memorandum of Understanding for the 
local area, or must there be different Memoranda of Understanding 
between the Local Workforce Development Board and each partner?

    (a) A single ``umbrella'' MOU may be developed that addresses the 
issues relating to the local one-stop delivery system for the Local 
WDB, chief elected official and all partners. Alternatively, the Local 
WDB (with agreement of chief elected official) may enter into separate 
agreements between each partner or groups of partners.
    (b) Under either approach, the requirements described in Sec.  
361.500 apply. Since funds are generally appropriated annually, the 
Local WDB may negotiate financial agreements with each partner annually 
to update funding of services and operating costs of the system under 
the MOU.


Sec.  361.510  How must the Memorandum of Understanding be negotiated?

    (a) WIOA emphasizes full and effective partnerships between Local 
WDBs, chief elected officials, and one-stop partners. Local WDBs and 
partners must enter into good-faith negotiations. Local WDBs, chief 
elected officials, and one-stop partners may also request assistance 
from a State agency responsible for administering the partner program, 
the Governor, State WDB, or other appropriate parties on other aspects 
of the MOU.
    (b) Local WDBs and one-stop partners must establish, in the MOU, 
how they will fund the infrastructure costs and other shared costs of 
the one-stop centers. If agreement regarding infrastructure costs is 
not reached when other sections of the MOU are ready, an interim 
infrastructure funding agreement may be included instead, as described 
in Sec.  361.715(c). Once agreement on infrastructure funding is 
reached, the Local WDB and one-stop partners must amend the MOU to 
include the infrastructure funding of the one-stop centers. 
Infrastructure funding is described in detail in Sec. Sec.  361.700 
through 361.760.
    (c) The Local WDB must report to the State WDB, Governor, and 
relevant State agency when MOU negotiations with one-stop partners have 
reached an impasse.
    (1) The Local WDB and partners must document the negotiations and 
efforts that have taken place in the MOU. The State WDB, one-stop 
partner programs, and the Governor may consult with the appropriate 
Federal agencies to address impasse situations related to issues other 
than infrastructure funding after attempting to address the impasse. 
Impasses related to infrastructure cost funding must be resolved using 
the State infrastructure cost funding mechanism described in Sec.  
361.730.
    (2) The Local WDB must report failure to execute an MOU with a 
required partner to the Governor, State WDB, and the State agency 
responsible for administering the partner's program. Additionally, if 
the State cannot assist the Local WDB in resolving the impasse,

[[Page 56039]]

the Governor or the State WDB must report the failure to the Secretary 
of Labor and to the head of any other Federal agency with 
responsibility for oversight of a partner's program.


Sec.  361.600  Who may operate one-stop centers?

    (a) One-stop operators may be a single entity (public, private, or 
nonprofit) or a consortium of entities. If the consortium of entities 
is one of one-stop partners, it must include a minimum of three of the 
one-stop partners described in Sec.  361.400.
    (b) The one-stop operator may operate one or more one-stop centers. 
There may be more than one one-stop operator in a local area.
    (c) The types of entities that may be a one-stop operator include:
    (1) An institution of higher education;
    (2) An Employment Service State agency established under the 
Wagner-Peyser Act;
    (3) A community-based organization, nonprofit organization, or 
workforce intermediary;
    (4) A private for-profit entity;
    (5) A government agency;
    (6) A Local WDB, with the approval of the chief elected official 
and the Governor; or
    (7) Another interested organization or entity, which is capable of 
carrying out the duties of the one-stop operator. Examples may include 
a local chamber of commerce or other business organization, or a labor 
organization.
    (d) Elementary schools and secondary schools are not eligible as 
one-stop operators, except that a nontraditional public secondary 
school such as a night school, adult school, or an area career and 
technical education school may be selected.
    (e) The State and Local WDBs must ensure that, in carrying out WIOA 
programs and activities, one-stop operators:
    (1) Disclose any potential conflicts of interest arising from the 
relationships of the operators with particular training service 
providers or other service providers (further discussed in 20 CFR 
679.430);
    (2) Do not establish practices that create disincentives to 
providing services to individuals with barriers to employment who may 
require longer-term career and training services; and
    (3) Comply with Federal regulations and procurement policies 
relating to the calculation and use of profits, including those at 20 
CFR 683.295, the Uniform Guidance at 2 CFR part 200, and other 
applicable regulations and policies.


Sec.  361.605  How is the one-stop operator selected?

    (a) Consistent with paragraphs (b) and (c) of this section, the 
Local WDB must select the one-stop operator through a competitive 
process, as required by sec. 121(d)(2)(A) of WIOA, at least once every 
4 years. A State may require, or a Local WDB may choose to implement, a 
competitive selection process more than once every 4 years.
    (b) In instances in which a State is conducting the competitive 
process described in paragraph (a) of this section, the State must 
follow the same policies and procedures it uses for procurement with 
non-Federal funds.
    (c) All other non-Federal entities, including subrecipients of a 
State (such as local areas), must use a competitive process based on 
local procurement policies and procedures and the principles of 
competitive procurement in the Uniform Guidance set out at 2 CFR 
200.318 through 200.326. All references to ``noncompetitive proposals'' 
in the Uniform Guidance at 2 CFR 200.320(f) will be read as ``sole 
source procurement'' for the purposes of implementing this section.
    (d) Entities must prepare written documentation explaining the 
determination concerning the nature of the competitive process to be 
followed in selecting a one-stop operator.


Sec.  361.610  When is the sole-source selection of one-stop operators 
appropriate, and how is it conducted?

    (a) States may select a one-stop operator through sole source 
selection when allowed under the same policies and procedures used for 
competitive procurement with non-Federal funds, while other non-Federal 
entities including subrecipients of a State (such as local areas) may 
select a one-stop operator through sole selection when consistent with 
local procurement policies and procedures and the Uniform Guidance set 
out at 2 CFR 200.320.
    (b) In the event that sole source procurement is determined 
necessary and reasonable, in accordance with Sec.  361.605(c), written 
documentation must be prepared and maintained concerning the entire 
process of making such a selection.
    (c) Such sole source procurement must include appropriate conflict 
of interest policies and procedures. These policies and procedures must 
conform to the specifications in 20 CFR 679.430 for demonstrating 
internal controls and preventing conflict of interest.
    (d) A Local WDB may be selected as a one-stop operator through sole 
source procurement only with agreement of the chief elected official in 
the local area and the Governor. The Local WDB must establish 
sufficient conflict of interest policies and procedures and these 
policies and procedures must be approved by the Governor.


Sec.  361.615  May an entity currently serving as one-stop operator 
compete to be a one-stop operator under the procurement requirements of 
this subpart?

    (a) Local WDBs may compete for and be selected as one-stop 
operators, as long as appropriate firewalls and conflict of interest 
policies and procedures are in place. These policies and procedures 
must conform to the specifications in 20 CFR 679.430 for demonstrating 
internal controls and preventing conflict of interest.
    (b) State and local agencies may compete for and be selected as 
one-stop operators by the Local WDB, as long as appropriate firewalls 
and conflict of interest policies and procedures are in place. These 
policies and procedures must conform to the specifications in 20 CFR 
679.430 for demonstrating internal controls and preventing conflict of 
interest.
    (c) In the case of single-area States where the State WDB serves as 
the Local WDB, the State agency is eligible to compete for and be 
selected as operator as long as appropriate firewalls and conflict of 
interest policies are in place and followed for the competition. These 
policies and procedures must conform to the specifications in 20 CFR 
679.430 for demonstrating internal controls and preventing conflicts of 
interest.


Sec.  361.620  What is the one-stop operator's role?

    (a) At a minimum, the one-stop operator must coordinate the service 
delivery of required one-stop partners and service providers. Local 
WDBs may establish additional roles of one-stop operator, including, 
but not limited to: Coordinating service providers across the one-stop 
delivery system, being the primary provider of services within the 
center, providing some of the services within the center, or 
coordinating service delivery in a multi-center area, which may include 
affiliated sites. The competition for a one-stop operator must clearly 
articulate the role of the one-stop operator.
    (b)(1) Subject to paragraph (b)(2) of this section, a one-stop 
operator may not perform the following functions: Convene system 
stakeholders to assist in the development of the local plan; prepare 
and submit local plans (as required under sec. 107 of WIOA); be 
responsible for oversight of itself; manage or significantly 
participate in

[[Page 56040]]

the competitive selection process for one-stop operators; select or 
terminate one-stop operators, career services, and youth providers; 
negotiate local performance accountability measures; or develop and 
submit budget for activities of the Local WDB in the local area.
    (2) An entity serving as a one-stop operator, that also serves a 
different role within the one-stop delivery system, may perform some or 
all of these functions when it is acting in its other role, if it has 
established sufficient firewalls and conflict of interest policies and 
procedures. The policies and procedures must conform to the 
specifications in 20 CFR 679.430 for demonstrating internal controls 
and preventing conflict of interest.


Sec.  361.625  Can a one-stop operator also be a service provider?

    Yes, but there must be appropriate firewalls in place in regards to 
the competition, and subsequent oversight, monitoring, and evaluation 
of performance of the service provider. The operator cannot develop, 
manage, or conduct the competition of a service provider in which it 
intends to compete. In cases where an operator is also a service 
provider, there must be firewalls and internal controls within the 
operator-service provider entity, as well as specific policies and 
procedures at the Local WDB level regarding oversight, monitoring, and 
evaluation of performance of the service provider. The firewalls must 
conform to the specifications in 20 CFR 679.430 for demonstrating 
internal controls and preventing conflicts of interest.


Sec.  361.630  Can State merit staff still work in a one-stop center 
where the operator is not a governmental entity?

    Yes. State merit staff can continue to perform functions and 
activities in the one-stop center. The Local WDB and one-stop operator 
must establish a system for management of merit staff in accordance 
with State policies and procedures. Continued use of State merit staff 
for the provision of Wagner-Peyser Act services or services from other 
programs with merit staffing requirements must be included in the 
competition for and final contract with the one-stop operator when 
Wagner-Peyser Act services or services from other programs with merit 
staffing requirements are being provided.


Sec.  361.635  What is the compliance date of the provisions of this 
subpart?

    (a) No later than July 1, 2017, one-stop operators selected under 
the competitive process described in this subpart must be in place and 
operating the one-stop center.
    (b) By November 17, 2016, every Local WDB must demonstrate it is 
taking steps to prepare for competition of its one-stop operator. This 
demonstration may include, but is not limited to, market research, 
requests for information, and conducting a cost and price analysis.


Sec.  361.700  What are the one-stop infrastructure costs?

    (a) Infrastructure costs of one-stop centers are nonpersonnel costs 
that are necessary for the general operation of the one-stop center, 
including:
    (1) Rental of the facilities;
    (2) Utilities and maintenance;
    (3) Equipment (including assessment-related products and assistive 
technology for individuals with disabilities); and
    (4) Technology to facilitate access to the one-stop center, 
including technology used for the center's planning and outreach 
activities.
    (b) Local WDBs may consider common identifier costs as costs of 
one-stop infrastructure.
    (c) Each entity that carries out a program or activities in a local 
one-stop center, described in Sec. Sec.  361.400 through 361.410, must 
use a portion of the funds available for the program and activities to 
maintain the one-stop delivery system, including payment of the 
infrastructure costs of one-stop centers. These payments must be in 
accordance with this subpart; Federal cost principles, which require 
that all costs must be allowable, reasonable, necessary, and allocable 
to the program; and all other applicable legal requirements.


Sec.  361.705  What guidance must the Governor issue regarding one-stop 
infrastructure funding?

    (a) The Governor, after consultation with chief elected officials, 
the State WDB, and Local WDBs, and consistent with guidance and 
policies provided by the State WDB, must develop and issue guidance for 
use by local areas, specifically:
    (1) Guidelines for State-administered one-stop partner programs for 
determining such programs' contributions to a one-stop delivery system, 
based on such programs' proportionate use of such system, and relative 
benefit received, consistent with Office of Management and Budget (OMB) 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards in 2 CFR part 200, including 
determining funding for the costs of infrastructure; and
    (2) Guidance to assist Local WDBs, chief elected officials, and 
one-stop partners in local areas in determining equitable and stable 
methods of funding the costs of infrastructure at one-stop centers 
based on proportionate use and relative benefit received, and 
consistent with Federal cost principles contained in the Uniform 
Guidance at 2 CFR part 200.
    (b) The guidance must include:
    (1) The appropriate roles of the one-stop partner programs in 
identifying one-stop infrastructure costs;
    (2) Approaches to facilitate equitable and efficient cost 
allocation that results in a reasonable cost allocation methodology 
where infrastructure costs are charged to each partner based on its 
proportionate use of the one-stop centers and relative benefit 
received, consistent with Federal cost principles at 2 CFR part 200; 
and
    (3) The timelines regarding notification to the Governor for not 
reaching local agreement and triggering the State funding mechanism 
described in Sec.  361.730, and timelines for a one-stop partner to 
submit an appeal in the State funding mechanism.


Sec.  361.710   How are infrastructure costs funded?

    Infrastructure costs are funded either through the local funding 
mechanism described in Sec.  361.715 or through the State funding 
mechanism described in Sec.  361.730.


Sec.  361.715  How are one-stop infrastructure costs funded in the 
local funding mechanism?

    (a) In the local funding mechanism, the Local WDB, chief elected 
officials, and one-stop partners agree to amounts and methods of 
calculating amounts each partner will contribute for one-stop 
infrastructure funding, include the infrastructure funding terms in the 
MOU, and sign the MOU. The local funding mechanism must meet all of the 
following requirements:
    (1) The infrastructure costs are funded through cash and fairly 
evaluated non-cash and third-party in-kind partner contributions and 
include any funding from philanthropic organizations or other private 
entities, or through other alternative financing options, to provide a 
stable and equitable funding stream for ongoing one-stop delivery 
system operations;
    (2) Contributions must be negotiated between one-stop partners, 
chief elected officials, and the Local WDB and the amount to be 
contributed must be included in the MOU;
    (3) The one-stop partner program's proportionate share of funding 
must be calculated in accordance with the Uniform Administrative 
Requirements,

[[Page 56041]]

Cost Principles, and Audit Requirements for Federal Awards in 2 CFR 
part 200 based upon a reasonable cost allocation methodology whereby 
infrastructure costs are charged to each partner in proportion to its 
use of the one-stop center, relative to benefits received. Such costs 
must also be allowable, reasonable, necessary, and allocable;
    (4) Partner shares must be periodically reviewed and reconciled 
against actual costs incurred, and adjusted to ensure that actual costs 
charged to any one-stop partners are proportionate to the use of the 
one-stop center and relative to the benefit received by the one-stop 
partners and their respective programs or activities.
    (b) In developing the section of the MOU on one-stop infrastructure 
funding described in Sec.  361.755, the Local WDB and chief elected 
officials will:
    (1) Ensure that the one-stop partners adhere to the guidance 
identified in Sec.  361.705 on one-stop delivery system infrastructure 
costs.
    (2) Work with one-stop partners to achieve consensus and informally 
mediate any possible conflicts or disagreements among one-stop 
partners.
    (3) Provide technical assistance to new one-stop partners and local 
grant recipients to ensure that those entities are informed and 
knowledgeable of the elements contained in the MOU and the one-stop 
infrastructure costs arrangement.
    (c) The MOU may include an interim infrastructure funding 
agreement, including as much detail as the Local WDB has negotiated 
with one-stop partners, if all other parts of the MOU have been 
negotiated, in order to allow the partner programs to operate in the 
one-stop centers. The interim infrastructure funding agreement must be 
finalized within 6 months of when the MOU is signed. If the interim 
infrastructure funding agreement is not finalized within that 
timeframe, the Local WDB must notify the Governor, as described in 
Sec.  361.725.


Sec.  361.720  What funds are used to pay for infrastructure costs in 
the local one-stop infrastructure funding mechanism?

    (a) In the local funding mechanism, one-stop partner programs may 
determine what funds they will use to pay for infrastructure costs. The 
use of these funds must be in accordance with the requirements in this 
subpart, and with the relevant partner's authorizing statutes and 
regulations, including, for example, prohibitions against supplanting 
non-Federal resources, statutory limitations on administrative costs, 
and all other applicable legal requirements. In the case of partners 
administering programs authorized by title I of WIOA, these 
infrastructure costs may be considered program costs. In the case of 
partners administering adult education and literacy programs authorized 
by title II of WIOA, these funds must include Federal funds made 
available for the local administration of adult education and literacy 
programs authorized by title II of WIOA. These funds may also include 
non-Federal resources that are cash, in-kind or third-party 
contributions. In the case of partners administering the Carl D. 
Perkins Career and Technical Education Act of 2006, funds used to pay 
for infrastructure costs may include funds available for local 
administrative expenses, non-Federal resources that are cash, in-kind 
or third-party contributions, and may include other funds made 
available by the State.
    (b) There are no specific caps on the amount or percent of overall 
funding a one-stop partner may contribute to fund infrastructure costs 
under the local funding mechanism, except that contributions for 
administrative costs may not exceed the amount available for 
administrative costs under the authorizing statute of the partner 
program. However, amounts contributed for infrastructure costs must be 
allowable and based on proportionate use of the one-stop centers and 
relative benefit received by the partner program, taking into account 
the total cost of the one-stop infrastructure as well as alternate 
financing options, and must be consistent with 2 CFR part 200, 
including the Federal cost principles.
    (c) Cash, non-cash, and third-party in-kind contributions may be 
provided by one-stop partners to cover their proportionate share of 
infrastructure costs.
    (1) Cash contributions are cash funds provided to the Local WDB or 
its designee by one-stop partners, either directly or by an interagency 
transfer.
    (2) Non-cash contributions are comprised of--
    (i) Expenditures incurred by one-stop partners on behalf of the 
one-stop center; and
    (ii) Non-cash contributions or goods or services contributed by a 
partner program and used by the one-stop center.
    (3) Non-cash contributions, especially those set forth in paragraph 
(c)(2)(ii) of this section, must be valued consistent with 2 CFR 
200.306 to ensure they are fairly evaluated and meet the partners' 
proportionate share.
    (4) Third-party in-kind contributions are:
    (i) Contributions of space, equipment, technology, non-personnel 
services, or other like items to support the infrastructure costs 
associated with one-stop operations, by a non-one-stop partner to 
support the one-stop center in general, not a specific partner; or
    (ii) Contributions by a non-one-stop partner of space, equipment, 
technology, non-personnel services, or other like items to support the 
infrastructure costs associated with one-stop operations, to a one-stop 
partner to support its proportionate share of one-stop infrastructure 
costs.
    (iii) In-kind contributions described in paragraphs (c)(4)(i) and 
(ii) of this section must be valued consistent with 2 CFR 200.306 and 
reconciled on a regular basis to ensure they are fairly evaluated and 
meet the proportionate share of the partner.
    (5) All partner contributions, regardless of the type, must be 
reconciled on a regular basis (i.e., monthly or quarterly), comparing 
actual expenses incurred to relative benefits received, to ensure each 
partner program is contributing its proportionate share in accordance 
with the terms of the MOU.


Sec.  361.725  What happens if consensus on infrastructure funding is 
not reached at the local level between the Local Workforce Development 
Board, chief elected officials, and one-stop partners?

    With regard to negotiations for infrastructure funding for Program 
Year (PY) 2017 and for each subsequent program year thereafter, if the 
Local WDB, chief elected officials, and one-stop partners do not reach 
consensus on methods of sufficiently funding local infrastructure 
through the local funding mechanism in accordance with the Governor's 
guidance issued under Sec.  361.705 and consistent with the regulations 
in Sec. Sec.  361.715 and 361.720, and include that consensus agreement 
in the signed MOU, then the Local WDB must notify the Governor by the 
deadline established by the Governor under Sec.  361.705(b)(3). Once 
notified, the Governor must administer funding through the State 
funding mechanism, as described in Sec. Sec.  361.730 through 361.738, 
for the program year impacted by the local area's failure to reach 
consensus.


Sec.  361.730  What is the State one-stop infrastructure funding 
mechanism?

    (a) Consistent with sec. 121(h)(1)(A)(i)(II) of WIOA, if the Local 
WDB, chief elected official, and one-stop partners in a local area do 
not reach consensus agreement on methods of sufficiently funding the 
costs of infrastructure of one-stop centers for a

[[Page 56042]]

program year, the State funding mechanism is applicable to the local 
area for that program year.
    (b) In the State funding mechanism, the Governor, subject to the 
limitations in paragraph (c) of this section, determines one-stop 
partner contributions after consultation with the chief elected 
officials, Local WDBs, and the State WDB. This determination involves:
    (1) The application of a budget for one-stop infrastructure costs 
as described in Sec.  361.735, based on either agreement reached in the 
local area negotiations or the State WDB formula outlined in Sec.  
361.745;
    (2) The determination of each local one-stop partner program's 
proportionate use of the one-stop delivery system and relative benefit 
received, consistent with the Uniform Guidance at 2 CFR part 200, 
including the Federal cost principles, the partner programs' 
authorizing laws and regulations, and other applicable legal 
requirements described in Sec.  361.736; and
    (3) The calculation of required statewide program caps on 
contributions to infrastructure costs from one-stop partner programs in 
areas operating under the State funding mechanism as described in Sec.  
361.738.
    (c) In certain situations, the Governor does not determine the 
infrastructure cost contributions for some one-stop partner programs 
under the State funding mechanism.
    (1) The Governor will not determine the contribution amounts for 
infrastructure funds for Native American program grantees described in 
20 CFR part 684. The appropriate portion of funds to be provided by 
Native American program grantees to pay for one-stop infrastructure 
must be determined as part of the development of the MOU described in 
Sec.  361.500 and specified in that MOU.
    (2) In States in which the policy-making authority is placed in an 
entity or official that is independent of the authority of the Governor 
with respect to the funds provided for adult education and literacy 
activities authorized under title II of WIOA, postsecondary career and 
technical education activities authorized under the Carl D. Perkins 
Career and Technical Education Act of 2006, or VR services authorized 
under title I of the Rehabilitation Act of 1973 (other than sec. 112 or 
part C), as amended by WIOA title IV, the determination of the amount 
each of the applicable partners must contribute to assist in paying the 
infrastructure costs of one-stop centers must be made by the official 
or chief officer of the entity with such authority, in consultation 
with the Governor.
    (d) Any duty, ability, choice, responsibility, or other action 
otherwise related to the determination of infrastructure costs 
contributions that is assigned to the Governor in Sec. Sec.  361.730 
through 361.745 also applies to this decision-making process performed 
by the official or chief officer described in paragraph (c)(2) of this 
section.


Sec.  361.731  What are the steps to determine the amount to be paid 
under the State one-stop infrastructure funding mechanism?

    (a) To initiate the State funding mechanism, a Local WDB that has 
not reached consensus on methods of sufficiently funding local 
infrastructure through the local funding mechanism as provided in Sec.  
361.725 must notify the Governor by the deadline established by the 
Governor under Sec.  361.705(b)(3).
    (b) Once a Local WDB has informed the Governor that no consensus 
has been reached:
    (1) The Local WDB must provide the Governor with local negotiation 
materials in accordance with Sec.  361.735(a).
    (2) The Governor must determine the one-stop center budget by 
either:
    (i) Accepting a budget previously agreed upon by partner programs 
in the local negotiations, in accordance with Sec.  361.735(b)(1); or
    (ii) Creating a budget for the one-stop center using the State WDB 
formula (described in Sec.  361.745) in accordance with Sec.  
361.735(b)(3).
    (3) The Governor then must establish a cost allocation methodology 
to determine the one-stop partner programs' proportionate shares of 
infrastructure costs, in accordance with Sec.  361.736.
    (4)(i) Using the methodology established under paragraph (b)(2)(ii) 
of this section, and taking into consideration the factors concerning 
individual partner programs listed in Sec.  361.737(b)(2), the Governor 
must determine each partner's proportionate share of the infrastructure 
costs, in accordance with Sec.  361.737(b)(1), and
    (ii) In accordance with Sec.  361.730(c), in some instances, the 
Governor does not determine a partner program's proportionate share of 
infrastructure funding costs, in which case it must be determined by 
the entities named in Sec.  361.730(c)(1) and (2).
    (5) The Governor must then calculate the statewide caps on the 
amounts that partner programs may be required to contribute toward 
infrastructure funding, according to the steps found at Sec.  
361.738(a)(1) through (4).
    (6) The Governor must ensure that the aggregate total of the 
infrastructure contributions according to proportionate share required 
of all local partner programs in local areas under the State funding 
mechanism do not exceed the cap for that particular program, in 
accordance with Sec.  361.738(b)(1). If the total does not exceed the 
cap, the Governor must direct each one-stop partner program to pay the 
amount determined under Sec.  361.737(a) toward the infrastructure 
funding costs of the one-stop center. If the total does exceed the cap, 
then to determine the amount to direct each one-stop program to pay, 
the Governor may:
    (i) Ascertain, in accordance with Sec.  361.738(b)(2)(i), whether 
the local partner or partners whose proportionate shares are calculated 
above the individual program caps are willing to voluntarily contribute 
above the capped amount to equal that program's proportionate share; or
    (ii) Choose from the options provided in Sec.  361.738(b)(2)(ii), 
including having the local area re-enter negotiations to reassess each 
one-stop partner's proportionate share and make adjustments or identify 
alternate sources of funding to make up the difference between the 
capped amount and the proportionate share of infrastructure funding of 
the one-stop partner.
    (7) If none of the solutions given in paragraphs (b)(6)(i) and (ii) 
of this section prove to be viable, the Governor must reassess the 
proportionate shares of each one-stop partner so that the aggregate 
amount attributable to the local partners for each program is less than 
that program's cap amount. Upon such reassessment, the Governor must 
direct each one-stop partner program to pay the reassessed amount 
toward the infrastructure funding costs of the one-stop center.


Sec.  361.735  How are infrastructure cost budgets for the one-stop 
centers in a local area determined in the State one-stop infrastructure 
funding mechanism?

    (a) Local WDBs must provide to the Governor appropriate and 
relevant materials and documents used in the negotiations under the 
local funding mechanism, including but not limited to: the local WIOA 
plan, the cost allocation method or methods proposed by the partners to 
be used in determining proportionate share, the proposed amounts or 
budget to fund infrastructure, the amount of total partner funds 
included, the type of funds or non-cash contributions, proposed one-
stop center budgets, and any agreed upon or proposed MOUs.
    (b)(1) If a local area has reached agreement as to the 
infrastructure budget for the one-stop centers in the

[[Page 56043]]

local area, it must provide this budget to the Governor as required by 
paragraph (a) of this section. If, as a result of the agreed upon 
infrastructure budget, only the individual programmatic contributions 
to infrastructure funding based upon proportionate use of the one-stop 
centers and relative benefit received are at issue, the Governor may 
accept the budget, from which the Governor must calculate each 
partner's contribution consistent with the cost allocation 
methodologies contained in the Uniform Guidance found in 2 CFR part 
200, as described in Sec.  361.736.
    (2) The Governor may also take into consideration the extent to 
which the partners in the local area have agreed in determining the 
proportionate shares, including any agreements reached at the local 
level by one or more partners, as well as any other element or product 
of the negotiating process provided to the Governor as required by 
paragraph (a) of this section.
    (3) If a local area has not reached agreement as to the 
infrastructure budget for the one-stop centers in the local area, or if 
the Governor determines that the agreed upon budget does not adequately 
meet the needs of the local area or does not reasonably work within the 
confines of the local area's resources in accordance with the 
Governor's one-stop budget guidance (which is required to be issued by 
WIOA sec. 121(h)(1)(B) and under Sec.  361.705), then, in accordance 
with Sec.  361.745, the Governor must use the formula developed by the 
State WDB based on at least the factors required under Sec.  361.745, 
and any associated weights to determine the local area budget.


Sec.  361.736  How does the Governor establish a cost allocation 
methodology used to determine the one-stop partner programs' 
proportionate shares of infrastructure costs under the State one-stop 
infrastructure funding mechanism?

    Once the appropriate budget is determined for a local area through 
either method described in Sec.  361.735 (by acceptance of a budget 
agreed upon in local negotiation or by the Governor applying the 
formula detailed in Sec.  361.745), the Governor must determine the 
appropriate cost allocation methodology to be applied to the one-stop 
partners in such local area, consistent with the Federal cost 
principles permitted under 2 CFR part 200, to fund the infrastructure 
budget.


Sec.  361.737  How are one-stop partner programs' proportionate shares 
of infrastructure costs determined under the State one-stop 
infrastructure funding mechanism?

    (a) The Governor must direct the one-stop partners in each local 
area that have not reached agreement under the local funding mechanism 
to pay what the Governor determines is each partner program's 
proportionate share of infrastructure funds for that area, subject to 
the application of the caps described in Sec.  361.738.
    (b)(1) The Governor must use the cost allocation methodology--as 
determined under Sec.  361.736--to determine each partner's 
proportionate share of the infrastructure costs under the State funding 
mechanism, subject to considering the factors described in paragraph 
(b)(2) of this section.
    (2) In determining each partner program's proportionate share of 
infrastructure costs, the Governor must take into account the costs of 
administration of the one-stop delivery system for purposes not related 
to one-stop centers for each partner (such as costs associated with 
maintaining the Local WDB or information technology systems), as well 
as the statutory requirements for each partner program, the partner 
program's ability to fulfill such requirements, and all other 
applicable legal requirements. The Governor may also take into 
consideration the extent to which the partners in the local area have 
agreed in determining the proportionate shares, including any 
agreements reached at the local level by one or more partners, as well 
as any other materials or documents of the negotiating process, which 
must be provided to the Governor by the Local WDB and described in 
Sec.  361.735(a).


Sec.  361.738   How are statewide caps on the contributions for one-
stop infrastructure funding determined in the State one-stop 
infrastructure funding mechanism?

    (a) The Governor must calculate the statewide cap on the 
contributions for one-stop infrastructure funding required to be 
provided by each one-stop partner program for those local areas that 
have not reached agreement. The cap is the amount determined under 
paragraph (a)(4) of this section, which the Governor derives by:
    (1) First, determining the amount resulting from applying the 
percentage for the corresponding one-stop partner program provided in 
paragraph (d) of this section to the amount of Federal funds provided 
to carry out the one-stop partner program in the State for the 
applicable fiscal year;
    (2) Second, selecting a factor (or factors) that reasonably 
indicates the use of one-stop centers in the State, applying such 
factor(s) to all local areas in the State, and determining the 
percentage of such factor(s) applicable to the local areas that reached 
agreement under the local funding mechanism in the State;
    (3) Third, determining the amount resulting from applying the 
percentage determined in paragraph (a)(2) of this section to the amount 
determined under paragraph (a)(1) of this section for the one-stop 
partner program; and
    (4) Fourth, determining the amount that results from subtracting 
the amount determined under paragraph (a)(3) of this section from the 
amount determined under paragraph (a)(1) of this section. The outcome 
of this final calculation results in the partner program's cap.
    (b)(1) The Governor must ensure that the funds required to be 
contributed by each partner program in the local areas in the State 
under the State funding mechanism, in aggregate, do not exceed the 
statewide cap for each program as determined under paragraph (a) of 
this section.
    (2) If the contributions initially determined under Sec.  361.737 
would exceed the applicable cap determined under paragraph (a) of this 
section, the Governor may:
    (i) Ascertain if the one-stop partner whose contribution would 
otherwise exceed the cap determined under paragraph (a) of this section 
will voluntarily contribute above the capped amount, so that the total 
contributions equal that partner's proportionate share. The one-stop 
partner's contribution must still be consistent with the program's 
authorizing laws and regulations, the Federal cost principles in 2 CFR 
part 200, and other applicable legal requirements; or
    (ii) Direct or allow the Local WDB, chief elected officials, and 
one-stop partners to: Re-enter negotiations, as necessary; reduce the 
infrastructure costs to reflect the amount of funds that are available 
for such costs without exceeding the cap levels; reassess the 
proportionate share of each one-stop partner; or identify alternative 
sources of financing for one-stop infrastructure funding, consistent 
with the requirement that each one-stop partner pay an amount that is 
consistent with the proportionate use of the one-stop center and 
relative benefit received by the partner, the program's authorizing 
laws and regulations, the Federal cost principles in 2 CFR part 200, 
and other applicable legal requirements.

[[Page 56044]]

    (3) If applicable under paragraph (b)(2)(ii) of this section, the 
Local WDB, chief elected officials, and one-stop partners, after 
renegotiation, may come to agreement, sign an MOU, and proceed under 
the local funding mechanism. Such actions do not require the 
redetermination of the applicable caps under paragraph (a) of this 
section.
    (4) If, after renegotiation, agreement among partners still cannot 
be reached or alternate financing cannot be identified, the Governor 
may adjust the specified allocation, in accordance with the amounts 
available and the limitations described in paragraph (d) of this 
section. In determining these adjustments, the Governor may take into 
account information relating to the renegotiation as well as the 
information described in Sec.  361.735(a).
    (c) Limitations. Subject to paragraph (a) of this section and in 
accordance with WIOA sec. 121(h)(2)(D), the following limitations apply 
to the Governor's calculations of the amount that one-stop partners in 
local areas that have not reached agreement under the local funding 
mechanism may be required under Sec.  361.736 to contribute to one-stop 
infrastructure funding:
    (1) WIOA formula programs and Wagner-Peyser Act Employment Service. 
The portion of funds required to be contributed under the WIOA youth, 
adult, or dislocated worker programs, or under the Wagner-Peyser Act 
(29 U.S.C. 49 et seq.) must not exceed three percent of the amount of 
the program in the State for a program year.
    (2) Other one-stop partners. For required one-stop partners other 
than those specified in paragraphs (c)(1), (3), (5), and (6) of this 
section, the portion of funds required to be contributed must not 
exceed 1.5 percent of the amount of Federal funds provided to carry out 
that program in the State for a fiscal year. For purposes of the Carl 
D. Perkins Career and Technical Education Act of 2006, the cap on 
contributions is determined based on the funds made available by the 
State for postsecondary level programs and activities under sec. 132 of 
the Carl D. Perkins Career and Technical Education Act and the amount 
of funds used by the State under sec. 112(a)(3) of the Perkins Act 
during the prior year to administer postsecondary level programs and 
activities, as applicable.
    (3) Vocational rehabilitation. (i) Within a State, for the entity 
or entities administering the programs described in WIOA sec. 
121(b)(1)(B)(iv) and Sec.  361.400, the allotment is based on the one 
State Federal fiscal year allotment, even in instances where that 
allotment is shared between two State agencies, and the cumulative 
portion of funds required to be contributed must not exceed--
    (A) 0.75 percent of the amount of Federal funds provided to carry 
out such program in the State for Fiscal Year 2016 for purposes of 
applicability of the State funding mechanism for PY 2017;
    (B) 1.0 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2017 for purposes of applicability of the 
State funding mechanism for PY 2018;
    (C) 1.25 percent of the amount provided to carry out such program 
in the State for Fiscal Year 2018 for purposes of applicability of the 
State funding mechanism for PY 2019;
    (D) 1.5 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2019 and following years for purposes of 
applicability of the State funding mechanism for PY 2020 and subsequent 
years.
    (ii) The limitations set forth in paragraph (d)(3)(i) of this 
section for any given fiscal year must be based on the final VR 
allotment to the State in the applicable Federal fiscal year.
    (4) Federal direct spending programs. For local areas that have not 
reached a one-stop infrastructure funding agreement by consensus, an 
entity administering a program funded with direct Federal spending, as 
defined in sec. 250(c)(8) of the Balanced Budget and Emergency Deficit 
Control Act of 1985, as in effect on February 15, 2014 (2 U.S.C. 
900(c)(8)), must not be required to provide more for infrastructure 
costs than the amount that the Governor determined (as described in 
Sec.  361.737).
    (5) TANF programs. For purposes of TANF, the cap on contributions 
is determined based on the total Federal TANF funds expended by the 
State for work, education, and training activities during the prior 
Federal fiscal year (as reported to the Department of Health and Human 
Services (HHS) on the quarterly TANF Financial Report form), plus any 
additional amount of Federal TANF funds that the State TANF agency 
reasonably determines was expended for administrative costs in 
connection with these activities but that was separately reported to 
HHS as an administrative cost. The State's contribution to the one-stop 
infrastructure must not exceed 1.5 percent of these combined 
expenditures.
    (6) Community Services Block Grant (CSBG) programs. For purposes of 
CSBG, the cap on contributions will be based on the total amount of 
CSBG funds determined by the State to have been expended by local CSBG-
eligible entities for the provision of employment and training 
activities during the prior Federal fiscal year for which information 
is available (as reported to HHS on the CSBG Annual Report) and any 
additional amount that the State CSBG agency reasonably determines was 
expended for administrative purposes in connection with these 
activities and was separately reported to HHS as an administrative 
cost. The State's contribution must not exceed 1.5 percent of these 
combined expenditures.
    (d) For programs for which it is not otherwise feasible to 
determine the amount of Federal funding used by the program until the 
end of that program's operational year--because, for example, the 
funding available for education, employment, and training activities is 
included within funding for the program that may also be used for other 
unrelated activities--the determination of the Federal funds provided 
to carry out the program for a fiscal year under paragraph (a)(1) of 
this section may be determined by:
    (1) The percentage of Federal funds available to the one-stop 
partner program that were used by the one-stop partner program for 
education, employment, and training activities in the previous fiscal 
year for which data are available; and
    (2) Applying the percentage determined under paragraph (d)(1) of 
this section to the total amount of Federal funds available to the one-
stop partner program for the fiscal year for which the determination 
under paragraph (a)(1) of this section applies.


Sec.  361.740  What funds are used to pay for infrastructure costs in 
the State one-stop infrastructure funding mechanism?

    (a) In the State funding mechanism, infrastructure costs for WIOA 
title I programs, including Native American Programs described in 20 
CFR part 684, may be paid using program funds, administrative funds, or 
both. Infrastructure costs for the Senior Community Service Employment 
Program under title V of the Older Americans Act (42 U.S.C. 3056 et 
seq.) may also be paid using program funds, administrative funds, or 
both.
    (b) In the State funding mechanism, infrastructure costs for other 
required one-stop partner programs (listed in Sec. Sec.  361.400 
through 361.410) are limited to the program's administrative funds, as 
appropriate.
    (c) In the State funding mechanism, infrastructure costs for the 
adult education program authorized by title II of WIOA must be paid 
from the funds that are available for local

[[Page 56045]]

administration and may be paid from funds made available by the State 
or non-Federal resources that are cash, in-kind, or third-party 
contributions.
    (d) In the State funding mechanism, infrastructure costs for the 
Carl D. Perkins Career and Technical Education Act of 2006 must be paid 
from funds available for local administration of postsecondary level 
programs and activities to eligible recipients or consortia of eligible 
recipients and may be paid from funds made available by the State or 
non-Federal resources that are cash, in-kind, or third-party 
contributions.


Sec.  361.745  What factors does the State Workforce Development Board 
use to develop the formula described in Workforce Innovation and 
Opportunity Act, which is used by the Governor to determine the 
appropriate one-stop infrastructure budget for each local area 
operating under the State infrastructure funding mechanism, if no 
reasonably implementable locally negotiated budget exists?

    The State WDB must develop a formula, as described in WIOA sec. 
121(h)(3)(B), to be used by the Governor under Sec.  361.735(b)(3) in 
determining the appropriate budget for the infrastructure costs of one-
stop centers in the local areas that do not reach agreement under the 
local funding mechanism and are, therefore, subject to the State 
funding mechanism. The formula identifies the factors and corresponding 
weights for each factor that the Governor must use, which must include: 
The number of one-stop centers in a local area; the population served 
by such centers; the services provided by such centers; and any factors 
relating to the operations of such centers in the local area that the 
State WDB determines are appropriate. As indicated in Sec.  
361.735(b)(1), if the local area has agreed on such a budget, the 
Governor may accept that budget in lieu of applying the formula 
factors.


Sec.  361.750  When and how can a one-stop partner appeal a one-stop 
infrastructure amount designated by the State under the State 
infrastructure funding mechanism?

    (a) The Governor must establish a process, described under sec. 
121(h)(2)(E) of WIOA, for a one-stop partner administering a program 
described in Sec. Sec.  361.400 through 361.410 to appeal the 
Governor's determination regarding the one-stop partner's portion of 
funds to be provided for one-stop infrastructure costs. This appeal 
process must be described in the Unified State Plan.
    (b) The appeal may be made on the ground that the Governor's 
determination is inconsistent with proportionate share requirements in 
Sec.  361.735(a), the cost contribution limitations in Sec.  
361.735(b), the cost contribution caps in Sec.  361.738, consistent 
with the process described in the State Plan.
    (c) The process must ensure prompt resolution of the appeal in 
order to ensure the funds are distributed in a timely manner, 
consistent with the requirements of 20 CFR 683.630.
    (d) The one-stop partner must submit an appeal in accordance with 
State's deadlines for appeals specified in the guidance issued under 
Sec.  361.705(b)(3), or if the State has not set a deadline, within 21 
days from the Governor's determination.


Sec.  361.755  What are the required elements regarding infrastructure 
funding that must be included in the one-stop Memorandum of 
Understanding?

    The MOU, fully described in Sec.  361.500, must contain the 
following information whether the local areas use either the local one-
stop or the State funding method:
    (a) The period of time in which this infrastructure funding 
agreement is effective. This may be a different time period than the 
duration of the MOU.
    (b) Identification of an infrastructure and shared services budget 
that will be periodically reconciled against actual costs incurred and 
adjusted accordingly to ensure that it reflects a cost allocation 
methodology that demonstrates how infrastructure costs are charged to 
each partner in proportion to its use of the one-stop center and 
relative benefit received, and that complies with 2 CFR part 200 (or 
any corresponding similar regulation or ruling).
    (c) Identification of all one-stop partners, chief elected 
officials, and Local WDB participating in the infrastructure funding 
arrangement.
    (d) Steps the Local WDB, chief elected officials, and one-stop 
partners used to reach consensus or an assurance that the local area 
followed the guidance for the State funding process.
    (e) Description of the process to be used among partners to resolve 
issues during the MOU duration period when consensus cannot be reached.
    (f) Description of the periodic modification and review process to 
ensure equitable benefit among one-stop partners.


Sec.  361.760  How do one-stop partners jointly fund other shared costs 
under the Memorandum of Understanding?

    (a) In addition to jointly funding infrastructure costs, one-stop 
partners listed in Sec. Sec.  361.400 through 361.410 must use a 
portion of funds made available under their programs' authorizing 
Federal law (or fairly evaluated in-kind contributions) to pay the 
additional costs relating to the operation of the one-stop delivery 
system. These other costs must include applicable career services and 
may include other costs, including shared services.
    (b) For the purposes of paragraph (a) of this section, shared 
services' costs may include the costs of shared services that are 
authorized for and may be commonly provided through the one-stop 
partner programs to any individual, such as initial intake, assessment 
of needs, appraisal of basic skills, identification of appropriate 
services to meet such needs, referrals to other one-stop partners, and 
business services. Shared operating costs may also include shared costs 
of the Local WDB's functions.
    (c) Contributions to the additional costs related to operation of 
the one-stop delivery system may be cash, non-cash, or third-party in-
kind contributions, consistent with how these are described in Sec.  
361.720(c).
    (d) The shared costs described in paragraph (a) of this section 
must be allocated according to the proportion of benefit received by 
each of the partners, consistent with the Federal law authorizing the 
partner's program, and consistent with all other applicable legal 
requirements, including Federal cost principles in 2 CFR part 200 (or 
any corresponding similar regulation or ruling) requiring that costs 
are allowable, reasonable, necessary, and allocable.
    (e) Any shared costs agreed upon by the one-stop partners must be 
included in the MOU.


Sec.  361.800  How are one-stop centers and one-stop delivery systems 
certified for effectiveness, physical and programmatic accessibility, 
and continuous improvement?

    (a) The State WDB, in consultation with chief elected officials and 
Local WDBs, must establish objective criteria and procedures for Local 
WDBs to use when certifying one-stop centers.
    (1) The State WDB, in consultation with chief elected officials and 
Local WDBs, must review and update the criteria every 2 years as part 
of the review and modification of State Plans pursuant to Sec.  
361.135.
    (2) The criteria must be consistent with the Governor's and State 
WDB's guidelines, guidance, and policies on infrastructure funding 
decisions, described in Sec.  361.705. The criteria must evaluate the 
one-stop centers and one-stop delivery system for effectiveness, 
including customer satisfaction, physical and programmatic

[[Page 56046]]

accessibility, and continuous improvement.
    (3) When the Local WDB is the one-stop operator as described in 20 
CFR 679.410, the State WDB must certify the one-stop center.
    (b) Evaluations of effectiveness must include how well the one-stop 
center integrates available services for participants and businesses, 
meets the workforce development needs of participants and the 
employment needs of local employers, operates in a cost-efficient 
manner, coordinates services among the one-stop partner programs, and 
provides access to partner program services to the maximum extent 
practicable, including providing services outside of regular business 
hours where there is a workforce need, as identified by the Local WDB. 
These evaluations must take into account feedback from one-stop 
customers. They must also include evaluations of how well the one-stop 
center ensures equal opportunity for individuals with disabilities to 
participate in or benefit from one-stop center services. These 
evaluations must include criteria evaluating how well the centers and 
delivery systems take actions to comply with the disability-related 
regulations implementing WIOA sec. 188, set forth at 29 CFR part 38. 
Such actions include, but are not limited to:
    (1) Providing reasonable accommodations for individuals with 
disabilities;
    (2) Making reasonable modifications to policies, practices, and 
procedures where necessary to avoid discrimination against persons with 
disabilities;
    (3) Administering programs in the most integrated setting 
appropriate;
    (4) Communicating with persons with disabilities as effectively as 
with others;
    (5) Providing appropriate auxiliary aids and services, including 
assistive technology devices and services, where necessary to afford 
individuals with disabilities an equal opportunity to participate in, 
and enjoy the benefits of, the program or activity; and
    (6) Providing for the physical accessibility of the one-stop center 
to individuals with disabilities.
    (c) Evaluations of continuous improvement must include how well the 
one-stop center supports the achievement of the negotiated local levels 
of performance for the indicators of performance for the local area 
described in sec. 116(b)(2) of WIOA and part 361. Other continuous 
improvement factors may include a regular process for identifying and 
responding to technical assistance needs, a regular system of 
continuing professional staff development, and having systems in place 
to capture and respond to specific customer feedback.
    (d) Local WDBs must assess at least once every 3 years the 
effectiveness, physical and programmatic accessibility, and continuous 
improvement of one-stop centers and the one-stop delivery systems using 
the criteria and procedures developed by the State WDB. The Local WDB 
may establish additional criteria, or set higher standards for service 
coordination, than those set by the State criteria. Local WDBs must 
review and update the criteria every 2 years as part of the Local Plan 
update process described in Sec.  361.580. Local WDBs must certify one-
stop centers in order to be eligible to use infrastructure funds in the 
State funding mechanism described in Sec.  361.730.
    (e) All one-stop centers must comply with applicable physical and 
programmatic accessibility requirements, as set forth in 29 CFR part 
38, the implementing regulations of WIOA sec. 188.


Sec.  361.900  What is the common identifier to be used by each one-
stop delivery system?

    (a) The common one-stop delivery system identifier is ``American 
Job Center.''
    (b) As of November 17, 2016, each one-stop delivery system must 
include the ``American Job Center'' identifier or ``a proud partner of 
the American Job Center network'' on all primary electronic resources 
used by the one-stop delivery system, and on any newly printed, 
purchased, or created materials.
    (c) As of July 1, 2017, each one-stop delivery system must include 
the ``American Job Center'' identifier or ``a proud partner of the 
American Job Center network'' on all products, programs, activities, 
services, electronic resources, facilities, and related property and 
new materials used in the one-stop delivery system.
    (d) One-stop partners, States, or local areas may use additional 
identifiers on their products, programs, activities, services, 
facilities, and related property and materials.

PART 463--ADULT EDUCATION AND FAMILY LITERACY ACT

0
8. The authority citation for part 463 continues to read as follows:

    Authority: 29 U.S.C. 102 and 103, unless otherwise noted.


0
9. Add subpart H to part 463, as added elsewhere in this issue of the 
Federal Register, to read as follows:
Subpart H--Unified and Combined State Plans Under Title I of the 
Workforce Innovation and Opportunity Act
Sec.
463.100 What are the purposes of the Unified and Combined State 
Plans?
463.105 What are the general requirements for the Unified State 
Plan?
463.110 What are the program-specific requirements in the Unified 
State Plan for the adult, dislocated worker, and youth programs 
authorized under Workforce Innovation and Opportunity Act title I?
463.115 What are the program-specific requirements in the Unified 
State Plan for the Adult Education and Family Literacy Act program 
authorized under Workforce Innovation and Opportunity Act title II?
463.120 What are the program-specific requirements in the Unified 
State Plan for the Employment Service program authorized under the 
Wagner-Peyser Act, as amended by Workforce Innovation and 
Opportunity Act title III?
463.125 What are the program-specific requirements in the Unified 
State Plan for the State Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as 
amended by Workforce Innovation and Opportunity Act title IV?
463.130 What is the development, submission, and approval process of 
the Unified State Plan?
463.135 What are the requirements for modification of the Unified 
State Plan?
463.140 What are the general requirements for submitting a Combined 
State Plan?
463.143 What is the development, submission, and approval process of 
the Combined State Plan?
463.145 What are the requirements for modifications of the Combined 
State Plan?

    Authority: Secs. 102, 103, and 503, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart H--Unified and Combined State Plans Under Title I of the 
Workforce Innovation and Opportunity Act


Sec.  463.100  What are the purposes of the Unified and Combined State 
Plans?

    (a) The Unified and Combined State Plans provide the framework for 
States to outline a strategic vision of, and goals for, how their 
workforce development systems will achieve the purposes of the 
Workforce Innovation and Opportunity Act (WIOA).
    (b) The Unified and Combined State Plans serve as 4-year action 
plans to develop, align, and integrate the State's systems and provide 
a platform to achieve the State's vision and strategic and operational 
goals. A Unified or Combined State Plan is intended to:
    (1) Align, in strategic coordination, the six core programs 
required in the Unified State Plan pursuant to

[[Page 56047]]

Sec.  463.105(b), and additional Combined State Plan partner programs 
that may be part of the Combined State Plan pursuant to Sec.  463.140;
    (2) Direct investments in economic, education, and workforce 
training programs to focus on providing relevant education and training 
to ensure that individuals, including youth and individuals with 
barriers to employment, have the skills to compete in the job market 
and that employers have a ready supply of skilled workers;
    (3) Apply strategies for job-driven training consistently across 
Federal programs; and
    (4) Enable economic, education, and workforce partners to build a 
skilled workforce through innovation in, and alignment of, employment, 
training, and education programs.


Sec.  463.105  What are the general requirements for the Unified State 
Plan?

    (a) The Unified State Plan must be submitted in accordance with 
Sec.  463.130 and WIOA sec. 102(c), as explained in joint planning 
guidelines issued by the Secretaries of Labor and Education.
    (b) The Governor of each State must submit, at a minimum, in 
accordance with Sec.  463.130, a Unified State Plan to the Secretary of 
Labor to be eligible to receive funding for the workforce development 
system's six core programs:
    (1) The adult, dislocated worker, and youth programs authorized 
under subtitle B of title I of WIOA and administered by the U.S. 
Department of Labor (DOL);
    (2) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA and administered by the U.S. 
Department of Education (ED);
    (3) The Employment Service program authorized under the Wagner-
Peyser Act of 1933, as amended by WIOA title III and administered by 
DOL; and
    (4) The Vocational Rehabilitation program authorized under title I 
of the Rehabilitation Act of 1973, as amended by title IV of WIOA and 
administered by ED.
    (c) The Unified State Plan must outline the State's 4-year strategy 
for the core programs described in paragraph (b) of this section and 
meet the requirements of sec. 102(b) of WIOA, as explained in the joint 
planning guidelines issued by the Secretaries of Labor and Education.
    (d) The Unified State Plan must include strategic and operational 
planning elements to facilitate the development of an aligned, 
coordinated, and comprehensive workforce development system. The 
Unified State Plan must include:
    (1) Strategic planning elements that describe the State's strategic 
vision and goals for preparing an educated and skilled workforce under 
sec. 102(b)(1) of WIOA. The strategic planning elements must be 
informed by and include an analysis of the State's economic conditions 
and employer and workforce needs, including education and skill needs.
    (2) Strategies for aligning the core programs and Combined State 
Plan partner programs as described in Sec.  463.140(d), as well as 
other resources available to the State, to achieve the strategic vision 
and goals in accordance with sec. 102(b)(1)(E) of WIOA.
    (3) Operational planning elements in accordance with sec. 102(b)(2) 
of WIOA that support the strategies for aligning the core programs and 
other resources available to the State to achieve the State's vision 
and goals and a description of how the State Workforce Development 
Board (WDB) will implement its functions, in accordance with sec. 
101(d) of WIOA. Operational planning elements must include:
    (i) A description of how the State strategy will be implemented by 
each core program's lead State agency;
    (ii) State operating systems, including data systems, and policies 
that will support the implementation of the State's strategy identified 
in paragraph (d)(1) of this section;
    (iii) Program-specific requirements for the core programs required 
by WIOA sec. 102(b)(2)(D);
    (iv) Assurances required by sec. 102(b)(2)(E) of WIOA, including an 
assurance that the lead State agencies responsible for the 
administration of the core programs reviewed and commented on the 
appropriate operational planning of the Unified State Plan and approved 
the elements as serving the needs of the population served by such 
programs, and other assurances deemed necessary by the Secretaries of 
Labor and Education under sec. 102(b)(2)(E)(x) of WIOA;
    (v) A description of joint planning and coordination across core 
programs, required one-stop partner programs, and other programs and 
activities in the Unified State Plan; and
    (vi) Any additional operational planning requirements imposed by 
the Secretary of Labor or the Secretary of Education under sec. 
102(b)(2)(C)(viii) of WIOA.
    (e) All of the requirements in this subpart that apply to States 
also apply to outlying areas.


Sec.  463.110  What are the program-specific requirements in the 
Unified State Plan for the adult, dislocated worker, and youth programs 
authorized under Workforce Innovation and Opportunity Act title I?

    The program-specific requirements for the adult, dislocated worker, 
and youth programs that must be included in the Unified State Plan are 
described in sec. 102(b)(2)(D) of WIOA. Additional planning 
requirements may be explained in joint planning guidelines issued by 
the Secretaries of Labor and Education.


Sec.  463.115  What are the program-specific requirements in the 
Unified State Plan for the Adult Education and Family Literacy Act 
program authorized under Workforce Innovation and Opportunity Act title 
II?

    The program-specific requirements for the AEFLA program in title II 
that must be included in the Unified State Plan are described in secs. 
102(b)(2)(C) and 102(b)(2)(D)(ii) of WIOA.
    (a) With regard to the description required in sec. 
102(b)(2)(D)(ii)(I) of WIOA pertaining to content standards, the 
Unified State Plan must describe how the eligible agency will, by July 
1, 2016, align its content standards for adult education with State-
adopted challenging academic content standards under the Elementary and 
Secondary Education Act of 1965, as amended.
    (b) With regard to the description required in sec. 
102(b)(2)(C)(iv) of WIOA pertaining to the methods and factors the 
State will use to distribute funds under the core programs, for title 
II of WIOA, the Unified State Plan must include--
    (1) How the eligible agency will award multi-year grants on a 
competitive basis to eligible providers in the State; and
    (2) How the eligible agency will provide direct and equitable 
access to funds using the same grant or contract announcement and 
application procedure.


Sec.  463.120  What are the program-specific requirements in the 
Unified State Plan for the Employment Service program authorized under 
the Wagner-Peyser Act, as amended by Workforce Innovation and 
Opportunity Act title III?

    The Employment Service program authorized under the Wagner-Peyser 
Act of 1933, as amended by WIOA title III, is subject to requirements 
in sec. 102(b) of WIOA, including any additional requirements imposed 
by the Secretary of Labor under secs. 102(b)(2)(C)(viii) and 
102(b)(2)(D)(iv) of WIOA, as explained in joint planning guidelines 
issued by the Secretaries of Labor and Education.

[[Page 56048]]

Sec.  463.125  What are the program-specific requirements in the 
Unified State Plan for the State Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by Workforce Innovation and Opportunity Act title IV?

    The program specific-requirements for the vocational rehabilitation 
services portion of the Unified or Combined State Plan are set forth in 
sec. 101(a) of the Rehabilitation Act of 1973, as amended. All 
submission requirements for the vocational rehabilitation services 
portion of the Unified or Combined State Plan are in addition to the 
jointly developed strategic and operational content requirements 
prescribed by sec. 102(b) of WIOA.


Sec.  463.130  What is the development, submission, and approval 
process of the Unified State Plan?

    (a) The Unified State Plan described in Sec.  463.105 must be 
submitted in accordance with WIOA sec. 102(c), as explained in joint 
planning guidelines issued jointly by the Secretaries of Labor and 
Education.
    (b) A State must submit its Unified State Plan to the Secretary of 
Labor pursuant to a process identified by the Secretary.
    (1) The initial Unified State Plan must be submitted no later than 
120 days prior to the commencement of the second full program year of 
WIOA.
    (2) Subsequent Unified State Plans must be submitted no later than 
120 days prior to the end of the 4-year period covered by a preceding 
Unified State Plan.
    (3) For purposes of paragraph (b) of this section, ``program year'' 
means July 1 through June 30 of any year.
    (c) The Unified State Plan must be developed with the assistance of 
the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 101(d), 
and must be developed in coordination with administrators with optimum 
policy-making authority for the core programs and required one-stop 
partners.
    (d) The State must provide an opportunity for public comment on and 
input into the development of the Unified State Plan prior to its 
submission.
    (1) The opportunity for public comment must include an opportunity 
for comment by representatives of Local WDBs and chief elected 
officials, businesses, representatives of labor organizations, 
community-based organizations, adult education providers, institutions 
of higher education, other stakeholders with an interest in the 
services provided by the six core programs, and the general public, 
including individuals with disabilities.
    (2) Consistent with the ``Sunshine Provision'' of WIOA in sec. 
101(g), the State WDB must make information regarding the Unified State 
Plan available to the public through electronic means and regularly 
occurring open meetings in accordance with State law. The Unified State 
Plan must describe the State's process and timeline for ensuring a 
meaningful opportunity for public comment.
    (e) Upon receipt of the Unified State Plan from the State, the 
Secretary of Labor will ensure that the entire Unified State Plan is 
submitted to the Secretary of Education pursuant to a process developed 
by the Secretaries.
    (f) The Unified State Plan is subject to the approval of both the 
Secretary of Labor and the Secretary of Education.
    (g) Before the Secretaries of Labor and Education approve the 
Unified State Plan, the vocational rehabilitation services portion of 
the Unified State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be 
approved by the Commissioner of the Rehabilitation Services 
Administration.
    (h) The Secretaries of Labor and Education will review and approve 
the Unified State Plan within 90 days of receipt by the Secretary of 
Labor, unless the Secretary of Labor or the Secretary of Education 
determines in writing within that period that:
    (1) The plan is inconsistent with a core program's requirements;
    (2) The Unified State Plan is inconsistent with any requirement of 
sec. 102 of WIOA; or
    (3) The plan is incomplete or otherwise insufficient to determine 
whether it is consistent with a core program's requirements or other 
requirements of WIOA.
    (i) If neither the Secretary of Labor nor the Secretary of 
Education makes the written determination described in paragraph (h) of 
this section within 90 days of the receipt by the Secretaries, the 
Unified State Plan will be considered approved.


Sec.  463.135  What are the requirements for modification of the 
Unified State Plan?

    (a) In addition to the required modification review set forth in 
paragraph (b) of this section, a Governor may submit a modification of 
its Unified State Plan at any time during the 4-year period of the 
plan.
    (b) Modifications are required, at a minimum:
    (1) At the end of the first 2-year period of any 4-year State Plan, 
wherein the State WDB must review the Unified State Plan, and the 
Governor must submit modifications to the plan to reflect changes in 
labor market and economic conditions or other factors affecting the 
implementation of the Unified State Plan;
    (2) When changes in Federal or State law or policy substantially 
affect the strategies, goals, and priorities upon which the Unified 
State Plan is based;
    (3) When there are changes in the statewide vision, strategies, 
policies, State negotiated levels of performance as described in Sec.  
463.170(b), the methodology used to determine local allocation of 
funds, reorganizations that change the working relationship with system 
employees, changes in organizational responsibilities, changes to the 
membership structure of the State WDB or alternative entity, and 
similar substantial changes to the State's workforce development 
system.
    (c) Modifications to the Unified State Plan are subject to the same 
public review and comment requirements in Sec.  463.130(d) that apply 
to the development of the original Unified State Plan.
    (d) Unified State Plan modifications must be approved by the 
Secretaries of Labor and Education, based on the approval standards 
applicable to the original Unified State Plan under Sec.  463.130. This 
approval must come after the approval of the Commissioner of the 
Rehabilitation Services Administration for modification of any portion 
of the plan described in sec. 102(b)(2)(D)(iii) of WIOA.


Sec.  463.140  What are the general requirements for submitting a 
Combined State Plan?

    (a) A State may choose to develop and submit a 4-year Combined 
State Plan in lieu of the Unified State Plan described in Sec. Sec.  
463.105 through 463.125.
    (b) A State that submits a Combined State Plan covering an activity 
or program described in paragraph (d) of this section that is, in 
accordance with WIOA sec. 103(c), approved or deemed complete under the 
law relating to the program will not be required to submit any other 
plan or application in order to receive Federal funds to carry out the 
core programs or the program or activities described under paragraph 
(d) of this section that are covered by the Combined State Plan.
    (c) If a State develops a Combined State Plan, it must be submitted 
in accordance with the process described in Sec.  463.143.
    (d) If a State chooses to submit a Combined State Plan, the plan 
must include the six core programs and one or more of the Combined 
State Plan partner programs and activities described in sec. 103(a)(2) 
of WIOA. The Combined State Plan partner programs

[[Page 56049]]

and activities that may be included in the Combined State Plan are:
    (1) Career and technical education programs authorized under the 
Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 
2301 et seq.);
    (2) Temporary Assistance for Needy Families or TANF, authorized 
under part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.);
    (3) Employment and training programs authorized under sec. 6(d)(4) 
of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
    (4) Work programs authorized under sec. 6(o) of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2015(o));
    (5) Trade adjustment assistance activities under chapter 2 of title 
II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
    (6) Services for veterans authorized under chapter 41 of title 38 
United States Code;
    (7) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law);
    (8) Senior Community Service Employment Programs under title V of 
the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
    (9) Employment and training activities carried out by the 
Department of Housing and Urban Development (HUD);
    (10) Employment and training activities carried out under the 
Community Services Block Grant Act (42 U.S.C. 9901 et seq.); and
    (11) Reintegration of offenders programs authorized under sec. 212 
of the Second Chance Act of 2007 (42 U.S.C. 17532).
    (e) A Combined State Plan must contain:
    (1) For the core programs, the information required by sec. 102(b) 
of WIOA and Sec. Sec.  463.105 through 463.125, as explained in the 
joint planning guidelines issued by the Secretaries;
    (2) For the Combined State Plan partner programs and activities, 
except as described in paragraph (h) of this section, the information 
required by the law authorizing and governing that program to be 
submitted to the appropriate Secretary, any other applicable legal 
requirements, and any common planning requirements described in sec. 
102(b) of WIOA, as explained in the joint planning guidelines issued by 
the Secretaries;
    (3) A description of the methods used for joint planning and 
coordination among the core programs, and with the required one-stop 
partner programs and other programs and activities included in the 
State Plan; and
    (4) An assurance that all of the entities responsible for planning 
or administering the programs described in the Combined State Plan have 
had a meaningful opportunity to review and comment on all portions of 
the plan.
    (f) Each Combined State Plan partner program included in the 
Combined State Plan remains subject to the applicable program-specific 
requirements of the Federal law and regulations, and any other 
applicable legal or program requirements, governing the implementation 
and operation of that program.
    (g) For purposes of Sec. Sec.  463.140 through 463.145 the term 
``appropriate Secretary'' means the head of the Federal agency who 
exercises either plan or application approval authority for the program 
or activity under the Federal law authorizing the program or activity 
or, if there are no planning or application requirements, who exercises 
administrative authority over the program or activity under that 
Federal law.
    (h) States that include employment and training activities carried 
out under the Community Services Block Grant (CSBG) Act (42 U.S.C. 9901 
et seq.) under a Combined State Plan would submit all other required 
elements of a complete CSBG State Plan directly to the Federal agency 
that administers the program, according to the requirements of Federal 
law and regulations.
    (i) States that submit employment and training activities carried 
out by HUD under a Combined State Plan would submit any other required 
planning documents for HUD programs directly to HUD, according to the 
requirements of Federal law and regulations.


Sec.  463.143  What is the development, submission, and approval 
process of the Combined State Plan?

    (a) For purposes of Sec.  463.140(a), if a State chooses to develop 
a Combined State Plan it must submit the Combined State Plan in 
accordance with the requirements described below and sec. 103 of WIOA, 
as explained in the joint planning guidelines issued by the Secretaries 
of Labor and Education.
    (b) The Combined State Plan must be developed with the assistance 
of the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 
101(d), and must be developed in coordination with administrators with 
optimum policy-making authority for the core programs and required one-
stop partners.
    (c) The State must provide an opportunity for public comment on and 
input into the development of the Combined State Plan prior to its 
submission.
    (1) The opportunity for public comment for the portions of the 
Combined State Plan that cover the core programs must include an 
opportunity for comment by representatives of Local WDBs and chief 
elected officials, businesses, representatives of labor organizations, 
community-based organizations, adult education providers, institutions 
of higher education, other stakeholders with an interest in the 
services provided by the six core programs, and the general public, 
including individuals with disabilities.
    (2) Consistent with the ``Sunshine Provision'' of WIOA in sec. 
101(g), the State WDB must make information regarding the Combined 
State Plan available to the public through electronic means and 
regularly occurring open meetings in accordance with State law. The 
Combined State Plan must describe the State's process and timeline for 
ensuring a meaningful opportunity for public comment on the portions of 
the plan covering core programs.
    (3) The portions of the plan that cover the Combined State Plan 
partner programs are subject to any public comment requirements 
applicable to those programs.
    (d) The State must submit to the Secretaries of Labor and Education 
and to the Secretary of the agency with responsibility for approving 
the program's plan or deeming it complete under the law governing the 
program, as part of its Combined State Plan, any plan, application, 
form, or any other similar document that is required as a condition for 
the approval of Federal funding under the applicable program or 
activity. Such submission must occur in accordance with a process 
identified by the relevant Secretaries in paragraph (a) of this 
section.
    (e) The Combined State Plan will be approved or disapproved in 
accordance with the requirements of sec. 103(c) of WIOA.
    (1) The portion of the Combined State Plan covering programs 
administered by the Departments of Labor and Education must be 
reviewed, and approved or disapproved, by the appropriate Secretary 
within 90 days beginning on the day the Combined State Plan is received 
by the appropriate Secretary from the State, consistent with paragraph 
(f) of this section. Before the Secretaries of Labor and Education 
approve the Combined State Plan, the vocational rehabilitation services 
portion of the Combined State Plan described in WIOA sec. 
102(b)(2)(D)(iii) must be approved by the Commissioner

[[Page 56050]]

of the Rehabilitation Services Administration.
    (2) If an appropriate Secretary other than the Secretary of Labor 
or the Secretary of Education has authority to approve or deem complete 
a portion of the Combined State Plan for a program or activity 
described in Sec.  463.140(d), that portion of the Combined State Plan 
must be reviewed, and approved, disapproved, or deemed complete, by the 
appropriate Secretary within 120 days beginning on the day the Combined 
State Plan is received by the appropriate Secretary from the State 
consistent with paragraph (f) of this section.
    (f) The appropriate Secretaries will review and approve or deem 
complete the Combined State Plan within 90 or 120 days, as appropriate, 
as described in paragraph (e) of this section, unless the Secretaries 
of Labor and Education or appropriate Secretary have determined in 
writing within that period that:
    (1) The Combined State Plan is inconsistent with the requirements 
of the six core programs or the Federal laws authorizing or applicable 
to the program or activity involved, including the criteria for 
approval of a plan or application, or deeming the plan complete, if 
any, under such law;
    (2) The portion of the Combined State Plan describing the six core 
programs or the program or activity described in paragraph (a) of this 
section involved does not satisfy the criteria as provided in sec. 102 
or 103 of WIOA, as applicable; or
    (3) The Combined State Plan is incomplete, or otherwise 
insufficient to determine whether it is consistent with a core 
program's requirements, other requirements of WIOA, or the Federal laws 
authorizing, or applicable to, the program or activity described in 
Sec.  463.140(d), including the criteria for approval of a plan or 
application, if any, under such law.
    (g) If the Secretary of Labor, the Secretary of Education, or the 
appropriate Secretary does not make the written determination described 
in paragraph (f) of this section within the relevant period of time 
after submission of the Combined State Plan, that portion of the 
Combined State Plan over which the Secretary has jurisdiction will be 
considered approved.
    (h) The Secretaries of Labor and Education's written determination 
of approval or disapproval regarding the portion of the plan for the 
six core programs may be separate from the written determination of 
approval, disapproval, or completeness of the program-specific 
requirements of Combined State Plan partner programs and activities 
described in Sec.  463.140(d) and included in the Combined State Plan.
    (i) Special rule. In paragraphs (f)(1) and (3) of this section, the 
term ``criteria for approval of a plan or application,'' with respect 
to a State or a core program or a program under the Carl D. Perkins 
Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), 
includes a requirement for agreement between the State and the 
appropriate Secretaries regarding State performance measures or State 
performance accountability measures, as the case may be, including 
levels of performance.


Sec.  463.145  What are the requirements for modifications of the 
Combined State Plan?

    (a) For the core program portions of the Combined State Plan, 
modifications are required, at a minimum:
    (1) By the end of the first 2-year period of any 4-year State Plan. 
The State WDB must review the Combined State Plan, and the Governor 
must submit modifications to the Combined State Plan to reflect changes 
in labor market and economic conditions or other factors affecting the 
implementation of the Combined State Plan;
    (2) When changes in Federal or State law or policy substantially 
affect the strategies, goals, and priorities upon which the Combined 
State Plan is based;
    (3) When there are changes in the statewide vision, strategies, 
policies, State negotiated levels of performance as described in Sec.  
463.170(b), the methodology used to determine local allocation of 
funds, reorganizations that change the working relationship with system 
employees, changes in organizational responsibilities, changes to the 
membership structure of the State WDB or alternative entity, and 
similar substantial changes to the State's workforce development 
system.
    (b) In addition to the required modification review described in 
paragraph (a)(1) of this section, a State may submit a modification of 
its Combined State Plan at any time during the 4-year period of the 
plan.
    (c) For any Combined State Plan partner programs and activities 
described in Sec.  463.140(d) that are included in a State's Combined 
State Plan, the State--
    (1) May decide if the modification requirements under WIOA sec. 
102(c)(3) that apply to the core programs will apply to the Combined 
State Plan partner programs, as long as consistent with any other 
modification requirements for the programs, or may comply with the 
requirements applicable to only the particular program or activity; and
    (2) Must submit, in accordance with the procedure described in 
Sec.  463.143, any modification, amendment, or revision required by the 
Federal law authorizing, or applicable to, the Combined State Plan 
partner program or activity.
    (i) If the underlying programmatic requirements change (e.g., the 
authorizing statute is reauthorized) for Federal laws authorizing such 
programs, a State must either modify its Combined State Plan or submit 
a separate plan to the appropriate Federal agency in accordance with 
the new Federal law authorizing the Combined State Plan partner program 
or activity and other legal requirements applicable to such program or 
activity.
    (ii) If the modification, amendment, or revision affects the 
administration of only that particular Combined State Plan partner 
program and has no impact on the Combined State Plan as a whole or the 
integration and administration of the core and other Combined State 
Plan partner programs at the State level, modifications must be 
submitted for approval to only the appropriate Secretary, based on the 
approval standards applicable to the original Combined State Plan under 
Sec.  463.143, if the State elects, or in accordance with the 
procedures and requirements applicable to the particular Combined State 
Plan partner program.
    (3) A State also may amend its Combined State Plan to add a 
Combined State Plan partner program or activity described in Sec.  
463.140(d).
    (d) Modifications of the Combined State Plan are subject to the 
same public review and comment requirements that apply to the 
development of the original Combined State Plan as described in Sec.  
463.143(c) except that, if the modification, amendment, or revision 
affects the administration of a particular Combined State Plan partner 
program and has no impact on the Combined State Plan as a whole or the 
integration and administration of the core and other Combined State 
Plan partner programs at the State level, a State may comply instead 
with the procedures and requirements applicable to the particular 
Combined State Plan partner program.
    (e) Modifications for the core program portions of the Combined 
State Plan must be approved by the Secretaries of Labor and Education, 
based on the approval standards applicable to the original Combined 
State Plan under Sec.  463.143. This approval must come after the 
approval of the Commissioner of the Rehabilitation Services

[[Page 56051]]

Administration for modification of any portion of the Combined State 
Plan described in sec. 102(b)(2)(D)(iii) of WIOA.

0
10. Add subpart I to part 463, as added elsewhere in this issue of the 
Federal Register, to read as follows:
Subpart I--Performance Accountability Under Title I of the Workforce 
Innovation and Opportunity Act
Sec.
463.150 What definitions apply to Workforce Innovation and 
Opportunity Act performance accountability provisions?
463.155 What are the primary indicators of performance under the 
Workforce Innovation and Opportunity Act?
463.160 What information is required for State performance reports?
463.165 May a State establish additional indicators of performance?
463.170 How are State levels of performance for primary indicators 
established?
463.175 What responsibility do States have to use quarterly wage 
record information for performance accountability?
463.180 When is a State subject to a financial sanction under the 
Workforce Innovation and Opportunity Act?
463.185 When are sanctions applied for a State's failure to submit 
an annual performance report?
463.190 When are sanctions applied for failure to achieve adjusted 
levels of performance?
463.195 What should States expect when a sanction is applied to the 
Governor's Reserve Allotment?
463.200 What other administrative actions will be applied to States' 
performance requirements?
463.205 What performance indicators apply to local areas and what 
information must be included in local area performance reports?
463.210 How are local performance levels established?
463.215 Under what circumstances are local areas eligible for State 
Incentive Grants?
463.220 Under what circumstances may a corrective action or sanction 
be applied to local areas for poor performance?
463.225 Under what circumstances may local areas appeal a 
reorganization plan?
463.230 What information is required for the eligible training 
provider performance reports?
463.235 What are the reporting requirements for individual records 
for core Workforce Innovation and Opportunity Act (WIOA) title I 
programs; the Wagner-Peyser Act Employment Service program, as 
amended by WIOA title III; and the Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as 
amended by WIOA title IV?
463.240 What are the requirements for data validation of State 
annual performance reports?

    Authority: Secs. 116, 189, and 503 of Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart I--Performance Accountability Under Title I of the 
Workforce Innovation and Opportunity Act


Sec.  463.150  What definitions apply to Workforce Innovation and 
Opportunity Act performance accountability provisions?

    (a) Participant. A reportable individual who has received services 
other than the services described in paragraph (a)(3) of this section, 
after satisfying all applicable programmatic requirements for the 
provision of services, such as eligibility determination.
    (1) For the Vocational Rehabilitation (VR) program, a participant 
is a reportable individual who has an approved and signed 
Individualized Plan for Employment (IPE) and has begun to receive 
services.
    (2) For the Workforce Innovation and Opportunity Act (WIOA) title I 
youth program, a participant is a reportable individual who has 
satisfied all applicable program requirements for the provision of 
services, including eligibility determination, an objective assessment, 
and development of an individual service strategy, and received 1 of 
the 14 WIOA youth program elements identified in sec. 129(c)(2) of 
WIOA.
    (3) The following individuals are not participants:
    (i) Individuals in an Adult Education and Family Literacy Act 
(AEFLA) program who have not completed at least 12 contact hours;
    (ii) Individuals who only use the self-service system.
    (A) Subject to paragraph (a)(3)(ii)(B) of this section, self-
service occurs when individuals independently access any workforce 
development system program's information and activities in either a 
physical location, such as a one-stop center resource room or partner 
agency, or remotely via the use of electronic technologies.
    (B) Self-service does not uniformly apply to all virtually accessed 
services. For example, virtually accessed services that provide a level 
of support beyond independent job or information seeking on the part of 
an individual would not qualify as self-service.
    (iii) Individuals who receive information-only services or 
activities, which provide readily available information that does not 
require an assessment by a staff member of the individual's skills, 
education, or career objectives.
    (4) Programs must include participants in their performance 
calculations.
    (b) Reportable individual. An individual who has taken action that 
demonstrates an intent to use program services and who meets specific 
reporting criteria of the program, including:
    (1) Individuals who provide identifying information;
    (2) Individuals who only use the self-service system; or
    (3) Individuals who only receive information-only services or 
activities.
    (c) Exit. As defined for the purpose of performance calculations, 
exit is the point after which a participant who has received services 
through any program meets the following criteria:
    (1) For the adult, dislocated worker, and youth programs authorized 
under WIOA title I, the AEFLA program authorized under WIOA title II, 
and the Employment Service program authorized under the Wagner-Peyser 
Act, as amended by WIOA title III, exit date is the last date of 
service.
    (i) The last day of service cannot be determined until at least 90 
days have elapsed since the participant last received services; 
services do not include self-service, information-only services or 
activities, or follow-up services. This also requires that there are no 
plans to provide the participant with future services.
    (ii) [Reserved].
    (2)(i) For the VR program authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV (VR program):
    (A) The participant's record of service is closed in accordance 
with Sec.  463.56 because the participant has achieved an employment 
outcome; or
    (B) The participant's service record is closed because the 
individual has not achieved an employment outcome or the individual has 
been determined ineligible after receiving services in accordance with 
Sec.  463.43.
    (ii) Notwithstanding any other provision of this section, a 
participant will not be considered as meeting the definition of exit 
from the VR program if the participant's service record is closed 
because the participant has achieved a supported employment outcome in 
an integrated setting but not in competitive integrated employment.
    (3)(i) A State may implement a common exit policy for all or some 
of the core programs in WIOA title I and the Employment Service program 
authorized under the Wagner-Peyser Act, as amended by WIOA title III, 
and any additional required partner program(s) listed in sec. 
121(b)(1)(B) of WIOA that is under the authority of the U.S. Department 
of Labor (DOL).
    (ii) If a State chooses to implement a common exit policy, the 
policy must require that a participant is exited only

[[Page 56052]]

when all of the criteria in paragraph (c)(1) of this section are met 
for the WIOA title I core programs and the Employment Service program 
authorized under the Wagner-Peyser Act, as amended by WIOA title III, 
as well as any additional required partner programs listed in sec. 
121(b)(1)(B) of WIOA under the authority of DOL to which the common 
exit policy applies in which the participant is enrolled.
    (d) State. For purposes of this part, other than in regard to 
sanctions or the statistical adjustment model, all references to 
``State'' include the outlying areas of American Samoa, Guam, 
Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, 
and, as applicable, the Republic of Palau.


Sec.  463.155  What are the primary indicators of performance under the 
Workforce Innovation and Opportunity Act?

    (a) All States submitting either a Unified or Combined State Plan 
under Sec. Sec.  463.130 and 463.143, must propose expected levels of 
performance for each of the primary indicators of performance for the 
adult, dislocated worker, and youth programs authorized under WIOA 
title I; the AEFLA program authorized under WIOA title II; the 
Employment Service program authorized under the Wagner-Peyser Act, as 
amended by WIOA title III; and the VR program authorized under title I 
of the Rehabilitation Act of 1973, as amended by WIOA title IV.
    (1) Primary indicators of performance. The six primary indicators 
of performance for the adult and dislocated worker programs, the AEFLA 
program, and the VR program are:
    (i) The percentage of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (ii) The percentage of participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (iii) Median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (iv)(A) The percentage of those participants enrolled in an 
education or training program (excluding those in on-the-job training 
[OJT] and customized training) who attained a recognized postsecondary 
credential or a secondary school diploma, or its recognized equivalent, 
during participation in or within 1 year after exit from the program.
    (B) A participant who has attained a secondary school diploma or 
its recognized equivalent is included in the percentage of participants 
who have attained a secondary school diploma or recognized equivalent 
only if the participant also is employed or is enrolled in an education 
or training program leading to a recognized postsecondary credential 
within 1 year after exit from the program;
    (v) The percentage of participants who, during a program year, are 
in an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains, defined as documented academic, technical, occupational, 
or other forms of progress, towards such a credential or employment. 
Depending upon the type of education or training program, documented 
progress is defined as one of the following:
    (A) Documented achievement of at least one educational functioning 
level of a participant who is receiving instruction below the 
postsecondary education level;
    (B) Documented attainment of a secondary school diploma or its 
recognized equivalent;
    (C) Secondary or postsecondary transcript or report card for a 
sufficient number of credit hours that shows a participant is meeting 
the State unit's academic standards;
    (D) Satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training; or
    (E) Successful passage of an exam that is required for a particular 
occupation or progress in attaining technical or occupational skills as 
evidenced by trade-related benchmarks such as knowledge-based exams.
    (vi) Effectiveness in serving employers.
    (2) Participants. For purposes of the primary indicators of 
performance in paragraph (a)(1) of this section, ``participant'' will 
have the meaning given to it in Sec.  463.150(a), except that--
    (i) For purposes of determining program performance levels under 
indicators set forth in paragraphs (a)(1)(i) through (iv) and (vi) of 
this section, a ``participant'' does not include a participant who 
received services under sec. 225 of WIOA and exits such program while 
still in a correctional institution as defined in sec. 225(e)(1) of 
WIOA; and
    (ii) The Secretaries of Labor and Education may, as needed and 
consistent with the Paperwork Reduction Act (PRA), make further 
determinations as to the participants to be included in calculating 
program performance levels for purposes of any of the performance 
indicators set forth in paragraph (a)(1) of this section.
    (b) The primary indicators in paragraphs (a)(1)(i) through (iii) 
and (vi) of this section apply to the Employment Service program 
authorized under the Wagner-Peyser Act, as amended by WIOA title III.
    (c) For the youth program authorized under WIOA title I, the 
primary indicators are:
    (1) Percentage of participants who are in education or training 
activities, or in unsubsidized employment, during the second quarter 
after exit from the program;
    (2) Percentage of participants in education or training activities, 
or in unsubsidized employment, during the fourth quarter after exit 
from the program;
    (3) Median earnings of participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (4) The percentage of those participants enrolled in an education 
or training program (excluding those in OJT and customized training) 
who obtained a recognized postsecondary credential or a secondary 
school diploma, or its recognized equivalent, during participation in 
or within 1 year after exit from the program, except that a participant 
who has attained a secondary school diploma or its recognized 
equivalent is included as having attained a secondary school diploma or 
recognized equivalent only if the participant is also employed or is 
enrolled in an education or training program leading to a recognized 
postsecondary credential within 1 year from program exit;
    (5) The percentage of participants who during a program year, are 
in an education or training program that leads to a recognized 
postsecondary credential or employment and who are achieving measurable 
skill gains, defined as documented academic, technical, occupational or 
other forms of progress towards such a credential or employment. 
Depending upon the type of education or training program, documented 
progress is defined as one of the following:
    (i) Documented achievement of at least one educational functioning 
level of a participant who is receiving instruction below the 
postsecondary education level;
    (ii) Documented attainment of a secondary school diploma or its 
recognized equivalent;

[[Page 56053]]

    (iii) Secondary or postsecondary transcript or report card for a 
sufficient number of credit hours that shows a participant is achieving 
the State unit's academic standards;
    (iv) Satisfactory or better progress report, towards established 
milestones, such as completion of OJT or completion of 1 year of an 
apprenticeship program or similar milestones, from an employer or 
training provider who is providing training; or
    (v) Successful passage of an exam that is required for a particular 
occupation or progress in attaining technical or occupational skills as 
evidenced by trade-related benchmarks such as knowledge-based exams.
    (6) Effectiveness in serving employers.


Sec.  463.160  What information is required for State performance 
reports?

    (a) The State performance report required by sec. 116(d)(2) of WIOA 
must be submitted annually using a template the Departments of Labor 
and Education will disseminate, and must provide, at a minimum, 
information on the actual performance levels achieved consistent with 
Sec.  463.175 with respect to:
    (1) The total number of participants served, and the total number 
of participants who exited each of the core programs identified in sec. 
116(b)(3)(A)(ii) of WIOA, including disaggregated counts of those who 
participated in and exited a core program, by:
    (i) Individuals with barriers to employment as defined in WIOA sec. 
3(24); and
    (ii) Co-enrollment in any of the programs in WIOA sec. 
116(b)(3)(A)(ii).
    (2) Information on the performance levels achieved for the primary 
indicators of performance for all of the core programs identified in 
Sec.  463.155 including disaggregated levels for:
    (i) Individuals with barriers to employment as defined in WIOA sec. 
3(24);
    (ii) Age;
    (iii) Sex; and
    (iv) Race and ethnicity.
    (3) The total number of participants who received career services 
and the total number of participants who exited from career services 
for the most recent program year and the 3 preceding program years, and 
the total number of participants who received training services and the 
total number of participants who exited from training services for the 
most recent program year and the 3 preceding program years, as 
applicable to the program;
    (4) Information on the performance levels achieved for the primary 
indicators of performance consistent with Sec.  463.155 for career 
services and training services for the most recent program year and the 
3 preceding program years, as applicable to the program;
    (5) The percentage of participants in a program who attained 
unsubsidized employment related to the training received (often 
referred to as training-related employment) through WIOA title I, 
subtitle B programs;
    (6) The amount of funds spent on career services and the amount of 
funds spent on training services for the most recent program year and 
the 3 preceding program years, as applicable to the program;
    (7) The average cost per participant for those participants who 
received career services and training services, respectively, during 
the most recent program year and the 3 preceding program years, as 
applicable to the program;
    (8) The percentage of a State's annual allotment under WIOA sec. 
132(b) that the State spent on administrative costs; and
    (9) Information that facilitates comparisons of programs with 
programs in other States.
    (10) For WIOA title I programs, a State performance narrative, 
which, for States in which a local area is implementing a pay-for-
performance contracting strategy, at a minimum provides:
    (i) A description of pay-for-performance contract strategies being 
used for programs;
    (ii) The performance of service providers entering into contracts 
for such strategies, measured against the levels of performance 
specified in the contracts for such strategies; and
    (iii) An evaluation of the design of the programs and performance 
strategies and, when available, the satisfaction of employers and 
participants who received services under such strategies.
    (b) The disaggregation of data for the State performance report 
must be done in compliance with WIOA sec. 116(d)(6)(C).
    (c) The State performance reports must include a mechanism of 
electronic access to the State's local area and eligible training 
provider (ETP) performance reports.
    (d) States must comply with these requirements from sec. 116 of 
WIOA as explained in joint guidance issued by the Departments of Labor 
and Education, which may include information on reportable individuals 
as determined by the Secretaries of Labor and Education.


Sec.  463.165  May a State establish additional indicators of 
performance?

    States may identify additional indicators of performance for the 
six core programs. If a State does so, these indicators must be 
included in the Unified or Combined State Plan.


Sec.  463.170  How are State levels of performance for primary 
indicators established?

    (a) A State must submit in the State Plan expected levels of 
performance on the primary indicators of performance for each core 
program as required by sec. 116(b)(3)(A)(iii) of WIOA as explained in 
joint guidance issued by the Secretaries of Labor and Education.
    (1) The initial State Plan submitted under WIOA must contain 
expected levels of performance for the first 2 years of the State Plan.
    (2) States must submit expected levels of performance for the third 
and fourth year of the State Plan before the third program year 
consistent with Sec. Sec.  463.135 and 463.145.
    (b) States must reach agreement on levels of performance with the 
Secretaries of Labor and Education for each indicator for each core 
program. These are the negotiated levels of performance. The negotiated 
levels must be based on the following factors:
    (1) How the negotiated levels of performance compare with State 
levels of performance established for other States;
    (2) The application of an objective statistical model established 
by the Secretaries of Labor and Education, subject to paragraph (d) of 
this section;
    (3) How the negotiated levels promote continuous improvement in 
performance based on the primary indicators and ensure optimal return 
on investment of Federal funds; and
    (4) The extent to which the negotiated levels assist the State in 
meeting the performance goals established by the Secretaries of Labor 
and Education for the core programs in accordance with the Government 
Performance and Results Act of 1993, as amended.
    (c) An objective statistical adjustment model will be developed and 
disseminated by the Secretaries of Labor and Education. The model will 
be based on:
    (1) Differences among States in actual economic conditions, 
including but not limited to unemployment rates and job losses or gains 
in particular industries; and
    (2) The characteristics of participants, including but not limited 
to:
    (i) Indicators of poor work history;
    (ii) Lack of work experience;
    (iii) Lack of educational or occupational skills attainment;

[[Page 56054]]

    (iv) Dislocation from high-wage and high-benefit employment;
    (v) Low levels of literacy;
    (vi) Low levels of English proficiency;
    (vii) Disability status;
    (viii) Homelessness;
    (ix) Ex-offender status; and
    (x) Welfare dependency.
    (d) The objective statistical adjustment model developed under 
paragraph (c) of this section will be:
    (1) Applied to the core programs' primary indicators upon 
availability of data which are necessary to populate the model and 
apply the model to the local core programs;
    (2) Subject to paragraph (d)(1) of this section, used before the 
beginning of a program year in order to reach agreement on State 
negotiated levels for the upcoming program year; and
    (3) Subject to paragraph (d)(1) of this section, used to revise 
negotiated levels at the end of a program year based on actual economic 
conditions and characteristics of participants served, consistent with 
sec. 116(b)(3)(A)(vii) of WIOA.
    (e) The negotiated levels revised at the end of the program year, 
based on the statistical adjustment model, are the adjusted levels of 
performance.
    (f) States must comply with these requirements from sec. 116 of 
WIOA as explained in joint guidance issued by the Departments of Labor 
and Education.


Sec.  463.175  What responsibility do States have to use quarterly wage 
record information for performance accountability?

    (a)(1) States must, consistent with State laws, use quarterly wage 
record information in measuring a State's performance on the primary 
indicators of performance outlined in Sec.  463.155 and a local area's 
performance on the primary indicators of performance identified in 
Sec.  463.205.
    (2) The use of social security numbers from participants and such 
other information as is necessary to measure the progress of those 
participants through quarterly wage record information is authorized.
    (3) To the extent that quarterly wage records are not available for 
a participant, States may use other information as is necessary to 
measure the progress of those participants through methods other than 
quarterly wage record information.
    (b) ``Quarterly wage record information'' means intrastate and 
interstate wages paid to an individual, the social security number (or 
numbers, if more than one) of the individual, and the name, address, 
State, and the Federal employer identification number of the employer 
paying the wages to the individual.
    (c) The Governor may designate a State agency (or appropriate State 
entity) to assist in carrying out the performance reporting 
requirements for WIOA core programs and ETPs. The Governor or such 
agency (or appropriate State entity) is responsible for:
    (1) Facilitating data matches;
    (2) Data quality reliability; and
    (3) Protection against disaggregation that would violate applicable 
privacy standards.


Sec.  463.180  When is a State subject to a financial sanction under 
the Workforce Innovation and Opportunity Act?

    A State will be subject to financial sanction under WIOA sec. 
116(f) if it fails to:
    (a) Submit the State annual performance report required under WIOA 
sec. 116(d)(2); or
    (b) Meet adjusted levels of performance for the primary indicators 
of performance in accordance with sec. 116(f) of WIOA.


Sec.  463.185  When are sanctions applied for a State's failure to 
submit an annual performance report?

    (a) Sanctions will be applied when a State fails to submit the 
State annual performance report required under sec. 116(d)(2) of WIOA. 
A State fails to report if the State either:
    (1) Does not submit a State annual performance report by the date 
for timely submission set in performance reporting guidance; or
    (2) Submits a State annual performance report by the date for 
timely submission, but the report is incomplete.
    (b) Sanctions will not be applied if the reporting failure is due 
to exceptional circumstances outside of the State's control. 
Exceptional circumstances may include, but are not limited to:
    (1) Natural disasters;
    (2) Unexpected personnel transitions; and
    (3) Unexpected technology related issues.
    (c) In the event that a State may not be able to submit a complete 
and accurate performance report by the deadline for timely reporting:
    (1) The State must notify the Secretary of Labor or Secretary of 
Education as soon as possible, but no later than 30 days prior to the 
established deadline for submission, of a potential impact on the 
State's ability to submit its State annual performance report in order 
to not be considered failing to report.
    (2) In circumstances where unexpected events occur less than 30 
days before the established deadline for submission of the State annual 
performance reports, the Secretaries of Labor and Education will review 
requests for extending the reporting deadline in accordance with the 
Departments of Labor and Education's procedures that will be 
established in guidance.


Sec.  463.190  When are sanctions applied for failure to achieve 
adjusted levels of performance?

    (a) States' negotiated levels of performance will be adjusted 
through the application of the statistical adjustment model established 
under Sec.  463.170 to account for actual economic conditions 
experienced during a program year and characteristics of participants, 
annually at the close of each program year.
    (b) Any State that fails to meet adjusted levels of performance for 
the primary indicators of performance outlined in Sec.  463.155 for any 
year will receive technical assistance, including assistance in the 
development of a performance improvement plan provided by the Secretary 
of Labor or Secretary of Education.
    (c) Whether a State has failed to meet adjusted levels of 
performance will be determined using the following three criteria:
    (1) The overall State program score, which is expressed as the 
percent achieved, compares the actual results achieved by a core 
program on the primary indicators of performance to the adjusted levels 
of performance for that core program. The average of the percentages 
achieved of the adjusted level of performance for each of the primary 
indicators by a core program will constitute the overall State program 
score.
    (2) However, until all indicators for the core program have at 
least 2 years of complete data, the overall State program score will be 
based on a comparison of the actual results achieved to the adjusted 
level of performance for each of the primary indicators that have at 
least 2 years of complete data for that program;
    (3) The overall State indicator score, which is expressed as the 
percent achieved, compares the actual results achieved on a primary 
indicator of performance by all core programs in a State to the 
adjusted levels of performance for that primary indicator. The average 
of the percentages achieved of the adjusted level of performance by all 
of the core programs on that indicator will constitute the overall 
State indicator score.

[[Page 56055]]

    (4) However, until all indicators for the State have at least 2 
years of complete data, the overall State indicator score will be based 
on a comparison of the actual results achieved to the adjusted level of 
performance for each of the primary indicators that have at least 2 
years of complete data in a State.
    (5) The individual indicator score, which is expressed as the 
percent achieved, compares the actual results achieved by each core 
program on each of the individual primary indicators to the adjusted 
levels of performance for each of the program's primary indicators of 
performance.
    (d) A performance failure occurs when:
    (1) Any overall State program score or overall State indicator 
score falls below 90 percent for the program year; or
    (2) Any of the States' individual indicator scores fall below 50 
percent for the program year.
    (e) Sanctions based on performance failure will be applied to 
States if, for 2 consecutive years, the State fails to meet:
    (1) 90 percent of the overall State program score for the same core 
program;
    (2) 90 percent of the overall State indicator score for the same 
primary indicator; or
    (3) 50 percent of the same indicator score for the same program.


Sec.  463.195  What should States expect when a sanction is applied to 
the Governor's Reserve Allotment?

    (a) The Secretaries of Labor and Education will reduce the 
Governor's Reserve Allotment by five percent of the maximum available 
amount for the immediately succeeding program year if:
    (1) The State fails to submit the State annual performance reports 
as required under WIOA sec. 116(d)(2), as defined in Sec.  463.185;
    (2) The State fails to meet State adjusted levels of performance 
for the same primary performance indicator(s) under either Sec.  
463.190(d)(1) for the second consecutive year as defined in Sec.  
463.190; or
    (3) The State's score on the same indicator for the same program 
falls below 50 percent under Sec.  463.190(d)(2) for the second 
consecutive year as defined in Sec.  463.190.
    (b) If the State fails under paragraphs (a)(1) and either (a)(2) or 
(3) of this section in the same program year, the Secretaries of Labor 
and Education will reduce the Governor's Reserve Allotment by 10 
percent of the maximum available amount for the immediately succeeding 
program year.
    (c) If a State's Governor's Reserve Allotment is reduced:
    (1) The reduced amount will not be returned to the State in the 
event that the State later improves performance or submits its annual 
performance report; and
    (2) The Governor's Reserve will continue to be set at the reduced 
level in each subsequent year until the Secretary of Labor or the 
Secretary of Education, depending on which program is impacted, 
determines that the State met the State adjusted levels of performance 
for the applicable primary performance indicators and has submitted all 
of the required performance reports.
    (d) A State may request review of a sanction the Secretary of Labor 
imposes in accordance with the provisions of 20 CFR 683.800.


Sec.  463.200  What other administrative actions will be applied to 
States' performance requirements?

    (a) In addition to sanctions for failure to report or failure to 
meet adjusted levels of performance, States will be subject to 
administrative actions in the case of poor performance.
    (b) States' performance achievement on the individual primary 
indicators will be assessed in addition to the overall State program 
score and overall State indicator score. Based on this assessment, as 
clarified and explained in guidance, for performance on any individual 
primary indicator, the Secretary of Labor or the Secretary of Education 
will require the State to establish a performance risk plan to address 
continuous improvement on the individual primary indicator.


Sec.  463.205  What performance indicators apply to local areas and 
what information must be included in local area performance reports?

    (a) Each local area in a State under WIOA title I is subject to the 
same primary indicators of performance for the core programs for WIOA 
title I under Sec.  463.155(a)(1) and (c) that apply to the State.
    (b) In addition to the indicators described in paragraph (a) of 
this section, under Sec.  463.165, the Governor may apply additional 
indicators of performance to local areas in the State.
    (c) States must annually make local area performance reports 
available to the public using a template that the Departments of Labor 
and Education will disseminate in guidance, including by electronic 
means. The State must provide electronic access to the public local 
area performance report in its annual State performance report.
    (d) The local area performance report must include:
    (1) The actual results achieved under Sec.  463.155 and the 
information required under Sec.  463.160(a);
    (2) The percentage of a local area's allotment under WIOA secs. 
128(b) and 133(b) that the local area spent on administrative costs; 
and
    (3) Other information that facilitates comparisons of programs with 
programs in other local areas (or planning regions if the local area is 
part of a planning region).
    (e) The disaggregation of data for the local area performance 
report must be done in compliance with WIOA sec. 116(d)(6)(C).
    (f) States must comply with any requirements from sec. 116(d)(3) of 
WIOA as explained in guidance, including the use of the performance 
reporting template, issued by DOL.


Sec.  463.210  How are local performance levels established?

    (a) The objective statistical adjustment model required under sec. 
116(b)(3)(A)(viii) of WIOA and described in Sec.  463.170(c) must be:
    (1) Applied to the core programs' primary indicators upon 
availability of data which are necessary to populate the model and 
apply the model to the local core programs;
    (2) Used in order to reach agreement on local negotiated levels of 
performance for the upcoming program year; and
    (3) Used to establish adjusted levels of performance at the end of 
a program year based on actual conditions, consistent with WIOA sec. 
116(c)(3).
    (b) Until all indicators for the core program in a local area have 
at least 2 years of complete data, the comparison of the actual results 
achieved to the adjusted levels of performance for each of the primary 
indicators only will be applied where there are at least 2 years of 
complete data for that program.
    (c) The Governor, Local Workforce Development Board (WDB), and 
chief elected official must reach agreement on local negotiated levels 
of performance based on a negotiations process before the start of a 
program year with the use of the objective statistical model described 
in paragraph (a) of this section. The negotiations will include a 
discussion of circumstances not accounted for in the model and will 
take into account the extent to which the levels promote continuous 
improvement. The objective statistical model will be applied at the end 
of the program year based on actual economic conditions and 
characteristics of the participants served.

[[Page 56056]]

    (d) The negotiations process described in paragraph (c) of this 
section must be developed by the Governor and disseminated to all Local 
WDBs and chief elected officials.
    (e) The Local WDBs may apply performance measures to service 
providers that differ from the performance indicators that apply to the 
local area. These performance measures must be established after 
considering:
    (1) The established local negotiated levels;
    (2) The services provided by each provider; and
    (3) The populations the service providers are intended to serve.


Sec.  463.215  Under what circumstances are local areas eligible for 
State Incentive Grants?

    (a) The Governor is not required to award local incentive funds, 
but is authorized to provide incentive grants to local areas for 
performance on the primary indicators of performance consistent with 
WIOA sec. 134(a)(3)(A)(xi).
    (b) The Governor may use non-Federal funds to create incentives for 
the Local WDBs to implement pay-for-performance contract strategies for 
the delivery of training services described in WIOA sec. 134(c)(3) or 
activities described in WIOA sec. 129(c)(2) in the local areas served 
by the Local WDBs. Pay-for-performance contract strategies must be 
implemented in accordance with 20 CFR part 683, subpart E and Sec.  
463.160.


Sec.  463.220  Under what circumstances may a corrective action or 
sanction be applied to local areas for poor performance?

    (a) If a local area fails to meet the adjusted levels of 
performance agreed to under Sec.  463.210 for the primary indicators of 
performance in the adult, dislocated worker, and youth programs 
authorized under WIOA title I in any program year, technical assistance 
must be provided by the Governor or, upon the Governor's request, by 
the Secretary of Labor.
    (1) A State must establish the threshold for failure to meet 
adjusted levels of performance for a local area before coming to 
agreement on the negotiated levels of performance for the local area.
    (i) A State must establish the adjusted level of performance for a 
local area, using the statistical adjustment model described in Sec.  
463.170(c).
    (ii) At least 2 years of complete data on any indicator for any 
local core program are required in order to establish adjusted levels 
of performance for a local area.
    (2) The technical assistance may include:
    (i) Assistance in the development of a performance improvement 
plan;
    (ii) The development of a modified local or regional plan; or
    (iii) Other actions designed to assist the local area in improving 
performance.
    (b) If a local area fails to meet the adjusted levels of 
performance agreed to under Sec.  463.210 for the same primary 
indicators of performance for the same core program authorized under 
WIOA title I for a third consecutive program year, the Governor must 
take corrective actions. The corrective actions must include the 
development of a reorganization plan under which the Governor:
    (1) Requires the appointment and certification of a new Local WDB, 
consistent with the criteria established under 20 CFR 679.350;
    (2) Prohibits the use of eligible providers and one-stop partners 
that have been identified as achieving poor levels of performance; or
    (3) Takes such other significant actions as the Governor determines 
are appropriate.


Sec.  463.225  Under what circumstances may local areas appeal a 
reorganization plan?

    (a) The Local WDB and chief elected official for a local area that 
is subject to a reorganization plan under WIOA sec. 116(g)(2)(A) may 
appeal to the Governor to rescind or revise the reorganization plan not 
later than 30 days after receiving notice of the reorganization plan. 
The Governor must make a final decision within 30 days after receipt of 
the appeal.
    (b) The Local WDB and chief elected official may appeal the final 
decision of the Governor to the Secretary of Labor not later than 30 
days after receiving the decision from the Governor. Any appeal of the 
Governor's final decision must be:
    (1) Appealed jointly by the Local WDB and chief elected official to 
the Secretary of Labor under 20 CFR 683.650; and
    (2) Must be submitted by certified mail, return receipt requested, 
to the Secretary of Labor, U.S. Department of Labor, 200 Constitution 
Ave. NW., Washington DC 20210, Attention: ASET. A copy of the appeal 
must be simultaneously provided to the Governor.
    (c) Upon receipt of the joint appeal from the Local WDB and chief 
elected official, the Secretary of Labor must make a final decision 
within 30 days. In making this determination the Secretary of Labor may 
consider any comments submitted by the Governor in response to the 
appeals.
    (d) The decision by the Governor on the appeal becomes effective at 
the time it is issued and remains effective unless the Secretary of 
Labor rescinds or revises the reorganization plan under WIOA sec. 
116(g)(2)(C).


Sec.  463.230  What information is required for the eligible training 
provider performance reports?

    (a) States are required to make available and publish annually 
using a template the Departments of Labor and Education will 
disseminate including through electronic means, the ETP performance 
reports for ETPs who provide services under sec. 122 of WIOA that are 
described in 20 CFR 680.400 through 680.530. These reports at a minimum 
must include, consistent with Sec.  463.175 and with respect to each 
program of study that is eligible to receive funds under WIOA:
    (1) The total number of participants as defined by Sec.  463.150(a) 
who received training services under the adult and dislocated worker 
programs authorized under WIOA title I for the most recent year and the 
3 preceding program years, including:
    (i) The number of participants under the adult and dislocated 
worker programs disaggregated by barriers to employment;
    (ii) The number of participants under the adult and dislocated 
worker programs disaggregated by race, ethnicity, sex, and age;
    (iii) The number of participants under the adult and dislocated 
worker programs disaggregated by the type of training entity for the 
most recent program year and the 3 preceding program years;
    (2) The total number of participants who exit a program of study or 
its equivalent, including disaggregate counts by the type of training 
entity during the most recent program year and the 3 preceding program 
years;
    (3) The average cost-per-participant for participants who received 
training services for the most recent program year and the 3 preceding 
program years disaggregated by type of training entity;
    (4) The total number of individuals exiting from the program of 
study (or the equivalent) with respect to all individuals engaging in 
the program of study (or the equivalent); and
    (5) The levels of performance achieved for the primary indicators 
of performance identified in Sec.  463.155(a)(1)(i) through (iv) with 
respect to all individuals engaging in a program of study (or the 
equivalent).
    (b) Apprenticeship programs registered under the National 
Apprenticeship Act are not required to

[[Page 56057]]

submit ETP performance information. If a registered apprenticeship 
program voluntarily submits performance information to a State, the 
State must include this information in the report.
    (c) The State must provide a mechanism of electronic access to the 
public ETP performance report in its annual State performance report.
    (d) States must comply with any requirements from sec. 116(d)(4) of 
WIOA as explained in guidance issued by DOL.
    (e) The Governor may designate one or more State agencies such as a 
State Education Agency or other State Educational Authority to assist 
in overseeing ETP performance and facilitating the production and 
dissemination of ETP performance reports. These agencies may be the 
same agencies that are designated as responsible for administering the 
ETP list as provided under 20 CFR 680.500. The Governor or such 
agencies, or authorities, is responsible for:
    (1) Facilitating data matches between ETP records and unemployment 
insurance (UI) wage data in order to produce the report;
    (2) The creation and dissemination of the reports as described in 
paragraphs (a) through (d) of this section;
    (3) Coordinating the dissemination of the performance reports with 
the ETP list and the information required to accompany the list, as 
provided in 20 CFR 680.500.


Sec.  463.235  What are the reporting requirements for individual 
records for core Workforce Innovation and Opportunity Act (WIOA) title 
I programs; the Wagner-Peyser Act Employment Service program, as 
amended by WIOA title III; and the Vocational Rehabilitation program 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by WIOA title IV?

    (a) On a quarterly basis, each State must submit to the Secretary 
of Labor or the Secretary of Education, as appropriate, individual 
records that include demographic information, information on services 
received, and information on resulting outcomes, as appropriate, for 
each reportable individual in either of the following programs 
administered by the Secretary of Labor or Secretary of Education: A 
WIOA title I core program; the Employment Service program authorized 
under the Wagner-Peyser Act, as amended by WIOA title III; or the VR 
program authorized under title I of the Rehabilitation Act of 1973, as 
amended by WIOA title IV.
    (b) For individual records submitted to the Secretary of Labor, 
those records may be required to be integrated across all programs 
administered by the Secretary of Labor in one single file.
    (c) States must comply with the requirements of sec. 116(d)(2) of 
WIOA as explained in guidance issued by the Departments of Labor and 
Education.


Sec.  463.240  What are the requirements for data validation of State 
annual performance reports?

    (a) States must establish procedures, consistent with guidelines 
issued by the Secretary of Labor or the Secretary of Education, to 
ensure that they submit complete annual performance reports that 
contain information that is valid and reliable, as required by WIOA 
sec. 116(d)(5).
    (b) If a State fails to meet standards in paragraph (a) of this 
section as determined by the Secretary of Labor or the Secretary of 
Education, the appropriate Secretary will provide technical assistance 
and may require the State to develop and implement corrective actions, 
which may require the State to provide training for its subrecipients.
    (c) The Secretaries of Labor and Education will provide training 
and technical assistance to States in order to implement this section. 
States must comply with the requirements of sec. 116(d)(5) of WIOA as 
explained in guidance.
0
11. Add subpart J to part 463, as added elsewhere in this issue of the 
Federal Register, to read as follows:
Subpart J--Description of the One-Stop Delivery System Under Title I of 
the Workforce Innovation and Opportunity Act
Sec.
463.300 What is the one-stop delivery system?
463.305 What is a comprehensive one-stop center and what must be 
provided there?
463.310 What is an affiliated site and what must be provided there?
463.315 Can a stand-alone Wagner-Peyser Act Employment Service 
office be designated as an affiliated one-stop site?
463.320 Are there any requirements for networks of eligible one-stop 
partners or specialized centers?
463.400 Who are the required one-stop partners?
463.405 Is Temporary Assistance for Needy Families a required one-
stop partner?
463.410 What other entities may serve as one-stop partners?
463.415 What entity serves as the one-stop partner for a particular 
program in the local area?
463.420 What are the roles and responsibilities of the required one-
stop partners?
463.425 What are the applicable career services that must be 
provided through the one-stop delivery system by required one-stop 
partners?
463.430 What are career services?
463.435 What are the business services provided through the one-stop 
delivery system, and how are they provided?
463.440 When may a fee be charged for the business services in this 
subpart?
463.500 What is the Memorandum of Understanding for the one-stop 
delivery system and what must be included in the Memorandum of 
Understanding?
463.505 Is there a single Memorandum of Understanding for the local 
area, or must there be different Memoranda of Understanding between 
the Local Workforce Development Board and each partner?
463.510 How must the Memorandum of Understanding be negotiated?
463.600 Who may operate one-stop centers?
463.605 How is the one-stop operator selected?
463.610 When is the sole-source selection of one-stop operators 
appropriate, and how is it conducted?
463.615 May an entity currently serving as one-stop operator compete 
to be a one-stop operator under the procurement requirements of this 
subpart?
463.620 What is the one-stop operator's role?
463.625 Can a one-stop operator also be a service provider?
463.630 Can State merit staff still work in a one-stop center where 
the operator is not a governmental entity?
463.635 What is the compliance date of the provisions of this 
subpart?
463.700 What are the one-stop infrastructure costs?
463.705 What guidance must the Governor issue regarding one-stop 
infrastructure funding?
463.710 How are infrastructure costs funded?
463.715 How are one-stop infrastructure costs funded in the local 
funding mechanism?
463.720 What funds are used to pay for infrastructure costs in the 
local one-stop infrastructure funding mechanism?
463.725 What happens if consensus on infrastructure funding is not 
reached at the local level between the Local Workforce Development 
Board, chief elected officials, and one-stop partners?
463.730 What is the State one-stop infrastructure funding mechanism?
463.731 What are the steps to determine the amount to be paid under 
the State one-stop infrastructure funding mechanism?
463.735 How are infrastructure cost budgets for the one-stop centers 
in a local area determined in the State one-stop infrastructure 
funding mechanism?
463.736 How does the Governor establish a cost allocation 
methodology used to determine the one-stop partner programs' 
proportionate shares of infrastructure costs under the State one-
stop infrastructure funding mechanism?
463.737 How are one-stop partner programs' proportionate shares of 
infrastructure costs determined under the State one-stop 
infrastructure funding mechanism?
463.738 How are statewide caps on the contributions for one-stop 
infrastructure

[[Page 56058]]

funding determined in the State one-stop infrastructure funding 
mechanism?
463.740 What funds are used to pay for infrastructure costs in the 
State one-stop infrastructure funding mechanism?
463.745 What factors does the State Workforce Development Board use 
to develop the formula described in Workforce Innovation and 
Opportunity Act, which is used by the Governor to determine the 
appropriate one-stop infrastructure budget for each local area 
operating under the State infrastructure funding mechanism, if no 
reasonably implementable locally negotiated budget exists?
463.750 When and how can a one-stop partner appeal a one-stop 
infrastructure amount designated by the State under the State 
infrastructure funding mechanism?
463.755 What are the required elements regarding infrastructure 
funding that must be included in the one-stop Memorandum of 
Understanding?
463.760 How do one-stop partners jointly fund other shared costs 
under the Memorandum of Understanding?
463.800 How are one-stop centers and one-stop delivery systems 
certified for effectiveness, physical and programmatic 
accessibility, and continuous improvement?
463.900 What is the common identifier to be used by each one-stop 
delivery system?

    Authority: Secs. 503, 107, 121, 134, 189, Pub. L. 113-128, 128 
Stat. 1425 (Jul. 22, 2014).

Subpart J--Description of the One-Stop Delivery System Under Title 
I of the Workforce Innovation and Opportunity Act


Sec.  463.300  What is the one-stop delivery system?

    (a) The one-stop delivery system brings together workforce 
development, educational, and other human resource services in a 
seamless customer-focused service delivery network that enhances access 
to the programs' services and improves long-term employment outcomes 
for individuals receiving assistance. One-stop partners administer 
separately funded programs as a set of integrated streamlined services 
to customers.
    (b) Title I of the Workforce Innovation and Opportunity Act (WIOA) 
assigns responsibilities at the local, State, and Federal level to 
ensure the creation and maintenance of a one-stop delivery system that 
enhances the range and quality of education and workforce development 
services that employers and individual customers can access.
    (c) The system must include at least one comprehensive physical 
center in each local area as described in Sec.  463.305.
    (d) The system may also have additional arrangements to supplement 
the comprehensive center. These arrangements include:
    (1) An affiliated site or a network of affiliated sites, where one 
or more partners make programs, services, and activities available, as 
described in Sec.  463.310;
    (2) A network of eligible one-stop partners, as described in 
Sec. Sec.  463.400 through 463.410, through which each partner provides 
one or more of the programs, services, and activities that are linked, 
physically or technologically, to an affiliated site or access point 
that assures customers are provided information on the availability of 
career services, as well as other program services and activities, 
regardless of where they initially enter the public workforce system in 
the local area; and
    (3) Specialized centers that address specific needs, including 
those of dislocated workers, youth, or key industry sectors, or 
clusters.
    (e) Required one-stop partner programs must provide access to 
programs, services, and activities through electronic means if 
applicable and practicable. This is in addition to providing access to 
services through the mandatory comprehensive physical one-stop center 
and any affiliated sites or specialized centers. The provision of 
programs and services by electronic methods such as Web sites, 
telephones, or other means must improve the efficiency, coordination, 
and quality of one-stop partner services. Electronic delivery must not 
replace access to such services at a comprehensive one-stop center or 
be a substitute to making services available at an affiliated site if 
the partner is participating in an affiliated site. Electronic delivery 
systems must be in compliance with the nondiscrimination and equal 
opportunity provisions of WIOA sec. 188 and its implementing 
regulations at 29 CFR part 38.
    (f) The design of the local area's one-stop delivery system must be 
described in the Memorandum of Understanding (MOU) executed with the 
one-stop partners, described in Sec.  463.500.


Sec.  463.305  What is a comprehensive one-stop center and what must be 
provided there?

    (a) A comprehensive one-stop center is a physical location where 
job seeker and employer customers can access the programs, services, 
and activities of all required one-stop partners. A comprehensive one-
stop center must have at least one title I staff person physically 
present.
    (b) The comprehensive one-stop center must provide:
    (1) Career services, described in Sec.  463.430;
    (2) Access to training services described in 20 CFR 680.200;
    (3) Access to any employment and training activities carried out 
under sec. 134(d) of WIOA;
    (4) Access to programs and activities carried out by one-stop 
partners listed in Sec. Sec.  463.400 through 463.410, including the 
Employment Service program authorized under the Wagner-Peyser Act, as 
amended by WIOA title III (Wagner-Peyser Act Employment Service 
program); and
    (5) Workforce and labor market information.
    (c) Customers must have access to these programs, services, and 
activities during regular business days at a comprehensive one-stop 
center. The Local Workforce Development Board (WDB) may establish other 
service hours at other times to accommodate the schedules of 
individuals who work on regular business days. The State WDB will 
evaluate the hours of access to service as part of the evaluation of 
effectiveness in the one-stop certification process described in Sec.  
463.800(b).
    (d) ``Access'' to each partner program and its services means:
    (1) Having a program staff member physically present at the one-
stop center;
    (2) Having a staff member from a different partner program 
physically present at the one-stop center appropriately trained to 
provide information to customers about the programs, services, and 
activities available through partner programs; or
    (3) Making available a direct linkage through technology to program 
staff who can provide meaningful information or services.
    (i) A ``direct linkage'' means providing direct connection at the 
one-stop center, within a reasonable time, by phone or through a real-
time Web-based communication to a program staff member who can provide 
program information or services to the customer.
    (ii) A ``direct linkage'' cannot exclusively be providing a phone 
number or computer Web site or providing information, pamphlets, or 
materials.
    (e) All comprehensive one-stop centers must be physically and 
programmatically accessible to individuals with disabilities, as 
described in 29 CFR part 38, the implementing regulations of WIOA sec. 
188.

[[Page 56059]]

Sec.  463.310  What is an affiliated site and what must be provided 
there?

    (a) An affiliated site, or affiliate one-stop center, is a site 
that makes available to job seeker and employer customers one or more 
of the one-stop partners' programs, services, and activities. An 
affiliated site does not need to provide access to every required one-
stop partner program. The frequency of program staff's physical 
presence in the affiliated site will be determined at the local level. 
Affiliated sites are access points in addition to the comprehensive 
one-stop center(s) in each local area. If used by local areas as a part 
of the service delivery strategy, affiliate sites must be implemented 
in a manner that supplements and enhances customer access to services.
    (b) As described in Sec.  463.315, Wagner-Peyser Act employment 
services cannot be a stand-alone affiliated site.
    (c) States, in conjunction with the Local WDBs, must examine lease 
agreements and property holdings throughout the one-stop delivery 
system in order to use property in an efficient and effective way. 
Where necessary and appropriate, States and Local WDBs must take 
expeditious steps to align lease expiration dates with efforts to 
consolidate one-stop operations into service points where Wagner-Peyser 
Act employment services are colocated as soon as reasonably possible. 
These steps must be included in the State Plan.
    (d) All affiliated sites must be physically and programmatically 
accessible to individuals with disabilities, as described in 29 CFR 
part 38, the implementing regulations of WIOA sec. 188.


Sec.  463.315  Can a stand-alone Wagner-Peyser Act Employment Service 
office be designated as an affiliated one-stop site?

    (a) Separate stand-alone Wagner-Peyser Act Employment Service 
offices are not permitted under WIOA, as also described in 20 CFR 
652.202.
    (b) If Wagner-Peyser Act employment services are provided at an 
affiliated site, there must be at least one or more other partners in 
the affiliated site with a physical presence of combined staff more 
than 50 percent of the time the center is open. Additionally, the other 
partner must not be the partner administering local veterans' 
employment representatives, disabled veterans' outreach program 
specialists, or unemployment compensation programs. If Wagner-Peyser 
Act employment services and any of these 3 programs are provided at an 
affiliated site, an additional partner or partners must have a presence 
of combined staff in the center more than 50 percent of the time the 
center is open.


Sec.  463.320  Are there any requirements for networks of eligible one-
stop partners or specialized centers?

    Any network of one-stop partners or specialized centers, as 
described in Sec.  463.300(d)(3), must be connected to the 
comprehensive one-stop center and any appropriate affiliate one-stop 
centers, for example, by having processes in place to make referrals to 
these centers and the partner programs located in them. Wagner-Peyser 
Act employment services cannot stand alone in a specialized center. 
Just as described in Sec.  463.315 for an affiliated site, a 
specialized center must include other programs besides Wagner-Peyser 
Act employment services, local veterans' employment representatives, 
disabled veterans' outreach program specialists, and unemployment 
compensation.


Sec.  463.400  Who are the required one-stop partners?

    (a) Section 121(b)(1)(B) of WIOA identifies the entities that are 
required partners in the local one-stop delivery systems.
    (b) The required partners are the entities responsible for 
administering the following programs and activities in the local area:
    (1) Programs authorized under title I of WIOA, including:
    (i) Adults;
    (ii) Dislocated workers;
    (iii) Youth;
    (iv) Job Corps;
    (v) YouthBuild;
    (vi) Native American programs; and
    (vii) Migrant and seasonal farmworker programs;
    (2) The Wagner-Peyser Act Employment Service program authorized 
under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), as amended by WIOA 
title III;
    (3) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA;
    (4) The Vocational Rehabilitation (VR) program authorized under 
title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), as 
amended by WIOA title IV;
    (5) The Senior Community Service Employment Program authorized 
under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et 
seq.);
    (6) Career and technical education programs at the postsecondary 
level authorized under the Carl D. Perkins Career and Technical 
Education Act of 2006 (20 U.S.C. 2301 et seq.);
    (7) Trade Adjustment Assistance activities authorized under chapter 
2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
    (8) Jobs for Veterans State Grants programs authorized under 
chapter 41 of title 38, U.S.C.;
    (9) Employment and training activities carried out under the 
Community Services Block Grant (42 U.S.C. 9901 et seq.);
    (10) Employment and training activities carried out by the 
Department of Housing and Urban Development;
    (11) Programs authorized under State unemployment compensation laws 
(in accordance with applicable Federal law);
    (12) Programs authorized under sec. 212 of the Second Chance Act of 
2007 (42 U.S.C. 17532); and
    (13) Temporary Assistance for Needy Families (TANF) authorized 
under part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.), unless exempted by the Governor under Sec.  463.405(b).


Sec.  463.405  Is Temporary Assistance for Needy Families a required 
one-stop partner?

    (a) Yes, TANF, authorized under part A of title IV of the Social 
Security Act (42 U.S.C. 601 et seq.), is a required partner.
    (b) The Governor may determine that TANF will not be a required 
partner in the State, or within some specific local areas in the State. 
In this instance, the Governor must notify the Secretaries of the U.S. 
Departments of Labor and Health and Human Services in writing of this 
determination.
    (c) In States, or local areas within a State, where the Governor 
has determined that TANF is not required to be a partner, local TANF 
programs may still work in collaboration or partnership with the local 
one-stop centers to deliver employment and training services to the 
TANF population unless inconsistent with the Governor's direction.


Sec.  463.410  What other entities may serve as one-stop partners?

    (a) Other entities that carry out a workforce development program, 
including Federal, State, or local programs and programs in the private 
sector, may serve as additional partners in the one-stop delivery 
system if the Local WDB and chief elected official(s) approve the 
entity's participation.
    (b) Additional partners may include, but are not limited to:
    (1) Employment and training programs administered by the Social 
Security Administration, including the Ticket to Work and Self-
Sufficiency Program established under sec. 1148 of the Social Security 
Act (42 U.S.C. 1320b-19);

[[Page 56060]]

    (2) Employment and training programs carried out by the Small 
Business Administration;
    (3) Supplemental Nutrition Assistance Program (SNAP) employment and 
training programs, authorized under secs. 6(d)(4) and 6(o) of the Food 
and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
    (4) Client Assistance Program authorized under sec. 112 of the 
Rehabilitation Act of 1973 (29 U.S.C. 732);
    (5) Programs authorized under the National and Community Service 
Act of 1990 (42 U.S.C. 12501 et seq.); and
    (6) Other appropriate Federal, State or local programs, including, 
but not limited to, employment, education, and training programs 
provided by public libraries or in the private sector.


Sec.  463.415  What entity serves as the one-stop partner for a 
particular program in the local area?

    (a) The entity that carries out the program and activities listed 
in Sec.  463.400 or Sec.  463.410, and therefore serves as the one-stop 
partner, is the grant recipient, administrative entity, or organization 
responsible for administering the funds of the specified program in the 
local area. The term ``entity'' does not include the service providers 
that contract with, or are subrecipients of, the local administrative 
entity. For programs that do not include local administrative entities, 
the responsible State agency must be the partner. Specific entities for 
particular programs are identified in paragraphs (b) through (e) of 
this section. If a program or activity listed in Sec.  463.400 is not 
carried out in a local area, the requirements relating to a required 
one-stop partner are not applicable to such program or activity in that 
local one-stop delivery system.
    (b) For title II of WIOA, the entity or agency that carries out the 
program for the purposes of paragraph (a) of this section is the sole 
entity or agency in the State or outlying area responsible for 
administering or supervising policy for adult education and literacy 
activities in the State or outlying area. The State eligible entity or 
agency may delegate its responsibilities under paragraph (a) of this 
section to one or more eligible providers or consortium of eligible 
providers.
    (c) For the VR program, authorized under title I of the 
Rehabilitation Act of 1973, as amended by WIOA title IV, the entity 
that carries out the program for the purposes of paragraph (a) of this 
section is the designated State agencies or designated State units 
specified under sec. 101(a)(2) of the Rehabilitation Act that is 
primarily concerned with vocational rehabilitation, or vocational and 
other rehabilitation, of individuals with disabilities.
    (d) Under WIOA title I, the national programs, including Job Corps, 
the Native American program, YouthBuild, and Migrant and Seasonal 
Farmworker programs are required one-stop partners. The entity for the 
Native American program, YouthBuild, and Migrant and Seasonal 
Farmworker programs is the grantee of those respective programs. The 
entity for Job Corps is the Job Corps center.
    (e) For the Carl D. Perkins Career and Technical Education Act of 
2006, the entity that carries out the program for the purposes of 
paragraph (a) of this section is the eligible recipient or recipients 
at the postsecondary level, or a consortium of eligible recipients at 
the postsecondary level in the local area. The eligible recipient at 
the postsecondary level may also request assistance from the State 
eligible agency in completing its responsibilities under paragraph (a) 
of this section.


Sec.  463.420  What are the roles and responsibilities of the required 
one-stop partners?

    Each required partner must:
    (a) Provide access to its programs or activities through the one-
stop delivery system, in addition to any other appropriate locations;
    (b) Use a portion of funds made available to the partner's program, 
to the extent consistent with the Federal law authorizing the partner's 
program and with Federal cost principles in 2 CFR parts 200 and 3474 
(requiring, among other things, that costs are allowable, reasonable, 
necessary, and allocable), to:
    (1) Provide applicable career services; and
    (2) Work collaboratively with the State and Local WDBs to establish 
and maintain the one-stop delivery system. This includes jointly 
funding the one-stop infrastructure through partner contributions that 
are based upon:
    (i) A reasonable cost allocation methodology by which 
infrastructure costs are charged to each partner based on proportionate 
use and relative benefit received;
    (ii) Federal cost principles; and
    (iii) Any local administrative cost requirements in the Federal law 
authorizing the partner's program. (This is further described in Sec.  
463.700.)
    (c) Enter into an MOU with the Local WDB relating to the operation 
of the one-stop delivery system that meets the requirements of Sec.  
463.500(b);
    (d) Participate in the operation of the one-stop delivery system 
consistent with the terms of the MOU, requirements of authorizing laws, 
the Federal cost principles, and all other applicable legal 
requirements; and
    (e) Provide representation on the State and Local WDBs as required 
and participate in Board committees as needed.


Sec.  463.425  What are the applicable career services that must be 
provided through the one-stop delivery system by required one-stop 
partners?

    (a) The applicable career services to be delivered by required one-
stop partners are those services listed in Sec.  463.430 that are 
authorized to be provided under each partner's program.
    (b) One-stop centers provide services to individual customers based 
on individual needs, including the seamless delivery of multiple 
services to individual customers. There is no required sequence of 
services.


Sec.  463.430  What are career services?

    Career services, as identified in sec. 134(c)(2) of WIOA, consist 
of three types:
    (a) Basic career services must be made available and, at a minimum, 
must include the following services, as consistent with allowable 
program activities and Federal cost principles:
    (1) Determinations of whether the individual is eligible to receive 
assistance from the adult, dislocated worker, or youth programs;
    (2) Outreach, intake (including worker profiling), and orientation 
to information and other services available through the one-stop 
delivery system. For the TANF program, States must provide individuals 
with the opportunity to initiate an application for TANF assistance and 
non-assistance benefits and services, which could be implemented 
through the provision of paper application forms or links to the 
application Web site;
    (3) Initial assessment of skill levels including literacy, 
numeracy, and English language proficiency, as well as aptitudes, 
abilities (including skills gaps), and supportive services needs;
    (4) Labor exchange services, including--
    (i) Job search and placement assistance, and, when needed by an 
individual, career counseling, including--
    (A) Provision of information on in-demand industry sectors and 
occupations (as defined in sec. 3(23) of WIOA); and
    (B) Provision of information on nontraditional employment; and
    (ii) Appropriate recruitment and other business services on behalf 
of

[[Page 56061]]

employers, including information and referrals to specialized business 
services other than those traditionally offered through the one-stop 
delivery system;
    (5) Provision of referrals to and coordination of activities with 
other programs and services, including programs and services within the 
one-stop delivery system and, when appropriate, other workforce 
development programs;
    (6) Provision of workforce and labor market employment statistics 
information, including the provision of accurate information relating 
to local, regional, and national labor market areas, including--
    (i) Job vacancy listings in labor market areas;
    (ii) Information on job skills necessary to obtain the vacant jobs 
listed; and
    (iii) Information relating to local occupations in demand and the 
earnings, skill requirements, and opportunities for advancement for 
those jobs;
    (7) Provision of performance information and program cost 
information on eligible providers of education, training, and workforce 
services by program and type of providers;
    (8) Provision of information, in usable and understandable formats 
and languages, about how the local area is performing on local 
performance accountability measures, as well as any additional 
performance information relating to the area's one-stop delivery 
system;
    (9) Provision of information, in usable and understandable formats 
and languages, relating to the availability of supportive services or 
assistance, and appropriate referrals to those services and assistance, 
including: Child care; child support; medical or child health 
assistance available through the State's Medicaid program and 
Children's Health Insurance Program; benefits under SNAP; assistance 
through the earned income tax credit; and assistance under a State 
program for TANF, and other supportive services and transportation 
provided through that program;
    (10) Provision of information and meaningful assistance to 
individuals seeking assistance in filing a claim for unemployment 
compensation.
    (i) ``Meaningful assistance'' means:
    (A) Providing assistance on-site using staff who are well-trained 
in unemployment compensation claims filing and the rights and 
responsibilities of claimants; or
    (B) Providing assistance by phone or via other technology, as long 
as the assistance is provided by trained and available staff and within 
a reasonable time.
    (ii) The costs associated in providing this assistance may be paid 
for by the State's unemployment insurance program, or the WIOA adult or 
dislocated worker programs, or some combination thereof.
    (11) Assistance in establishing eligibility for programs of 
financial aid assistance for training and education programs not 
provided under WIOA.
    (b) Individualized career services must be made available if 
determined to be appropriate in order for an individual to obtain or 
retain employment. These services include the following services, as 
consistent with program requirements and Federal cost principles:
    (1) Comprehensive and specialized assessments of the skill levels 
and service needs of adults and dislocated workers, which may include--
    (i) Diagnostic testing and use of other assessment tools; and
    (ii) In-depth interviewing and evaluation to identify employment 
barriers and appropriate employment goals;
    (2) Development of an individual employment plan, to identify the 
employment goals, appropriate achievement objectives, and appropriate 
combination of services for the participant to achieve his or her 
employment goals, including the list of, and information about, the 
eligible training providers (as described in 20 CFR 680.180);
    (3) Group counseling;
    (4) Individual counseling;
    (5) Career planning;
    (6) Short-term pre-vocational services including development of 
learning skills, communication skills, interviewing skills, 
punctuality, personal maintenance skills, and professional conduct 
services to prepare individuals for unsubsidized employment or 
training;
    (7) Internships and work experiences that are linked to careers (as 
described in 20 CFR 680.170);
    (8) Workforce preparation activities;
    (9) Financial literacy services as described in sec. 129(b)(2)(D) 
of WIOA and 20 CFR 681.500;
    (10) Out-of-area job search assistance and relocation assistance; 
and
    (11) English language acquisition and integrated education and 
training programs.
    (c) Follow-up services must be provided, as appropriate, including: 
Counseling regarding the workplace, for participants in adult or 
dislocated worker workforce investment activities who are placed in 
unsubsidized employment, for up to 12 months after the first day of 
employment.
    (d) In addition to the requirements in paragraph (a)(2) of this 
section, TANF agencies must identify employment services and related 
support being provided by the TANF program (within the local area) that 
qualify as career services and ensure access to them via the local one-
stop delivery system.


Sec.  463.435  What are the business services provided through the one-
stop delivery system, and how are they provided?

    (a) Certain career services must be made available to local 
employers, specifically labor exchange activities and labor market 
information described in Sec.  463.430(a)(4)(ii) and (a)(6). Local 
areas must establish and develop relationships and networks with large 
and small employers and their intermediaries. Local areas also must 
develop, convene, or implement industry or sector partnerships.
    (b) Customized business services may be provided to employers, 
employer associations, or other such organizations. These services are 
tailored for specific employers and may include:
    (1) Customized screening and referral of qualified participants in 
training services to employers;
    (2) Customized services to employers, employer associations, or 
other such organizations, on employment-related issues;
    (3) Customized recruitment events and related services for 
employers including targeted job fairs;
    (4) Human resource consultation services, including but not limited 
to assistance with:
    (i) Writing/reviewing job descriptions and employee handbooks;
    (ii) Developing performance evaluation and personnel policies;
    (iii) Creating orientation sessions for new workers;
    (iv) Honing job interview techniques for efficiency and compliance;
    (v) Analyzing employee turnover;
    (vi) Creating job accommodations and using assistive technologies; 
or
    (vii) Explaining labor and employment laws to help employers comply 
with discrimination, wage/hour, and safety/health regulations;
    (5) Customized labor market information for specific employers, 
sectors, industries or clusters; and
    (6) Other similar customized services.
    (c) Local areas may also provide other business services and 
strategies that meet the workforce investment needs of area employers, 
in accordance with partner programs' statutory requirements and 
consistent with

[[Page 56062]]

Federal cost principles. These business services may be provided 
through effective business intermediaries working in conjunction with 
the Local WDB, or through the use of economic development, 
philanthropic, and other public and private resources in a manner 
determined appropriate by the Local WDB and in cooperation with the 
State. Allowable activities, consistent with each partner's authorized 
activities, include, but are not limited to:
    (1) Developing and implementing industry sector strategies 
(including strategies involving industry partnerships, regional skills 
alliances, industry skill panels, and sectoral skills partnerships);
    (2) Customized assistance or referral for assistance in the 
development of a registered apprenticeship program;
    (3) Developing and delivering innovative workforce investment 
services and strategies for area employers, which may include career 
pathways, skills upgrading, skill standard development and 
certification for recognized postsecondary credential or other employer 
use, and other effective initiatives for meeting the workforce 
investment needs of area employers and workers;
    (4) Assistance to area employers in managing reductions in force in 
coordination with rapid response activities and with strategies for the 
aversion of layoffs, which may include strategies such as early 
identification of firms at risk of layoffs, use of feasibility studies 
to assess the needs of and options for at-risk firms, and the delivery 
of employment and training activities to address risk factors;
    (5) The marketing of business services to appropriate area 
employers, including small and mid-sized employers; and
    (6) Assisting employers with accessing local, State, and Federal 
tax credits.
    (d) All business services and strategies must be reflected in the 
local plan, described in 20 CFR 679.560(b)(3).


Sec.  463.440  When may a fee be charged for the business services in 
this subpart?

    (a) There is no requirement that a fee-for-service be charged to 
employers.
    (b) No fee may be charged for services provided in Sec.  
463.435(a).
    (c) A fee may be charged for services provided under Sec.  
463.435(b) and (c). Services provided under Sec.  463.435(c) may be 
provided through effective business intermediaries working in 
conjunction with the Local WDB and may also be provided on a fee-for-
service basis or through the leveraging of economic development, 
philanthropic, and other public and private resources in a manner 
determined appropriate by the Local WDB. The Local WDB may examine the 
services provided compared with the assets and resources available 
within the local one-stop delivery system and through its partners to 
determine an appropriate cost structure for services, if any.
    (d) Any fees earned are recognized as program income and must be 
expended by the partner in accordance with the partner program's 
authorizing statute, implementing regulations, and Federal cost 
principles identified in Uniform Guidance.


Sec.  463.500  What is the Memorandum of Understanding for the one-stop 
delivery system and what must be included in the Memorandum of 
Understanding?

    (a) The MOU is the product of local discussion and negotiation, and 
is an agreement developed and executed between the Local WDB and the 
one-stop partners, with the agreement of the chief elected official and 
the one-stop partners, relating to the operation of the one-stop 
delivery system in the local area. Two or more local areas in a region 
may develop a single joint MOU, if they are in a region that has 
submitted a regional plan under sec. 106 of WIOA.
    (b) The MOU must include:
    (1) A description of services to be provided through the one-stop 
delivery system, including the manner in which the services will be 
coordinated and delivered through the system;
    (2) Agreement on funding the costs of the services and the 
operating costs of the system, including:
    (i) Funding of infrastructure costs of one-stop centers in 
accordance with Sec. Sec.  463.700 through 463.755; and
    (ii) Funding of the shared services and operating costs of the one-
stop delivery system described in Sec.  463.760;
    (3) Methods for referring individuals between the one-stop 
operators and partners for appropriate services and activities;
    (4) Methods to ensure that the needs of workers, youth, and 
individuals with barriers to employment, including individuals with 
disabilities, are addressed in providing access to services, including 
access to technology and materials that are available through the one-
stop delivery system;
    (5) The duration of the MOU and procedures for amending it; and
    (6) Assurances that each MOU will be reviewed, and if substantial 
changes have occurred, renewed, not less than once every 3-year period 
to ensure appropriate funding and delivery of services.
    (c) The MOU may contain any other provisions agreed to by the 
parties that are consistent with WIOA title I, the authorizing statutes 
and regulations of one-stop partner programs, and the WIOA regulations.
    (d) When fully executed, the MOU must contain the signatures of the 
Local WDB, one-stop partners, the chief elected official(s), and the 
time period in which the agreement is effective. The MOU must be 
updated not less than every 3 years to reflect any changes in the 
signatory official of the Board, one-stop partners, and chief elected 
officials, or one-stop infrastructure funding.
    (e) If a one-stop partner appeal to the State regarding 
infrastructure costs, using the process described in Sec.  463.750, 
results in a change to the one-stop partner's infrastructure cost 
contributions, the MOU must be updated to reflect the final one-stop 
partner infrastructure cost contributions.


Sec.  463.505  Is there a single Memorandum of Understanding for the 
local area, or must there be different Memoranda of Understanding 
between the Local Workforce Development Board and each partner?

    (a) A single ``umbrella'' MOU may be developed that addresses the 
issues relating to the local one-stop delivery system for the Local 
WDB, chief elected official and all partners. Alternatively, the Local 
WDB (with agreement of chief elected official) may enter into separate 
agreements between each partner or groups of partners.
    (b) Under either approach, the requirements described in Sec.  
463.500 apply. Since funds are generally appropriated annually, the 
Local WDB may negotiate financial agreements with each partner annually 
to update funding of services and operating costs of the system under 
the MOU.


Sec.  463.510  How must the Memorandum of Understanding be negotiated?

    (a) WIOA emphasizes full and effective partnerships between Local 
WDBs, chief elected officials, and one-stop partners. Local WDBs and 
partners must enter into good-faith negotiations. Local WDBs, chief 
elected officials, and one-stop partners may also request assistance 
from a State agency responsible for administering the partner program, 
the Governor, State WDB, or other appropriate parties on other aspects 
of the MOU.
    (b) Local WDBs and one-stop partners must establish, in the MOU, 
how they will fund the infrastructure costs and other shared costs of 
the one-stop centers. If agreement regarding infrastructure costs is 
not reached when

[[Page 56063]]

other sections of the MOU are ready, an interim infrastructure funding 
agreement may be included instead, as described in Sec.  463.715(c). 
Once agreement on infrastructure funding is reached, the Local WDB and 
one-stop partners must amend the MOU to include the infrastructure 
funding of the one-stop centers. Infrastructure funding is described in 
detail in Sec. Sec.  463.700 through 463.760.
    (c) The Local WDB must report to the State WDB, Governor, and 
relevant State agency when MOU negotiations with one-stop partners have 
reached an impasse.
    (1) The Local WDB and partners must document the negotiations and 
efforts that have taken place in the MOU. The State WDB, one-stop 
partner programs, and the Governor may consult with the appropriate 
Federal agencies to address impasse situations related to issues other 
than infrastructure funding after attempting to address the impasse. 
Impasses related to infrastructure cost funding must be resolved using 
the State infrastructure cost funding mechanism described in Sec.  
463.730.
    (2) The Local WDB must report failure to execute an MOU with a 
required partner to the Governor, State WDB, and the State agency 
responsible for administering the partner's program. Additionally, if 
the State cannot assist the Local WDB in resolving the impasse, the 
Governor or the State WDB must report the failure to the Secretary of 
Labor and to the head of any other Federal agency with responsibility 
for oversight of a partner's program.


Sec.  463.600  Who may operate one-stop centers?

    (a) One-stop operators may be a single entity (public, private, or 
nonprofit) or a consortium of entities. If the consortium of entities 
is one of one-stop partners, it must include a minimum of three of the 
one-stop partners described in Sec.  463.400.
    (b) The one-stop operator may operate one or more one-stop centers. 
There may be more than one one-stop operator in a local area.
    (c) The types of entities that may be a one-stop operator include:
    (1) An institution of higher education;
    (2) An Employment Service State agency established under the 
Wagner-Peyser Act;
    (3) A community-based organization, nonprofit organization, or 
workforce intermediary;
    (4) A private for-profit entity;
    (5) A government agency;
    (6) A Local WDB, with the approval of the chief elected official 
and the Governor; or
    (7) Another interested organization or entity, which is capable of 
carrying out the duties of the one-stop operator. Examples may include 
a local chamber of commerce or other business organization, or a labor 
organization.
    (d) Elementary schools and secondary schools are not eligible as 
one-stop operators, except that a nontraditional public secondary 
school such as a night school, adult school, or an area career and 
technical education school may be selected.
    (e) The State and Local WDBs must ensure that, in carrying out WIOA 
programs and activities, one-stop operators:
    (1) Disclose any potential conflicts of interest arising from the 
relationships of the operators with particular training service 
providers or other service providers (further discussed in 20 CFR 
679.430);
    (2) Do not establish practices that create disincentives to 
providing services to individuals with barriers to employment who may 
require longer-term career and training services; and
    (3) Comply with Federal regulations and procurement policies 
relating to the calculation and use of profits, including those at 20 
CFR 683.295, the Uniform Guidance at 2 CFR part 200, and other 
applicable regulations and policies.


Sec.  463.605  How is the one-stop operator selected?

    (a) Consistent with paragraphs (b) and (c) of this section, the 
Local WDB must select the one-stop operator through a competitive 
process, as required by sec. 121(d)(2)(A) of WIOA, at least once every 
4 years. A State may require, or a Local WDB may choose to implement, a 
competitive selection process more than once every 4 years.
    (b) In instances in which a State is conducting the competitive 
process described in paragraph (a) of this section, the State must 
follow the same policies and procedures it uses for procurement with 
non-Federal funds.
    (c) All other non-Federal entities, including subrecipients of a 
State (such as local areas), must use a competitive process based on 
local procurement policies and procedures and the principles of 
competitive procurement in the Uniform Guidance set out at 2 CFR 
200.318 through 200.326. All references to ``noncompetitive proposals'' 
in the Uniform Guidance at 2 CFR 200.320(f) will be read as ``sole 
source procurement'' for the purposes of implementing this section.
    (d) Entities must prepare written documentation explaining the 
determination concerning the nature of the competitive process to be 
followed in selecting a one-stop operator.


Sec.  463.610  When is the sole-source selection of one-stop operators 
appropriate, and how is it conducted?

    (a) States may select a one-stop operator through sole source 
selection when allowed under the same policies and procedures used for 
competitive procurement with non-Federal funds, while other non-Federal 
entities including subrecipients of a State (such as local areas) may 
select a one-stop operator through sole selection when consistent with 
local procurement policies and procedures and the Uniform Guidance set 
out at 2 CFR 200.320.
    (b) In the event that sole source procurement is determined 
necessary and reasonable, in accordance with Sec.  463.605(c), written 
documentation must be prepared and maintained concerning the entire 
process of making such a selection.
    (c) Such sole source procurement must include appropriate conflict 
of interest policies and procedures. These policies and procedures must 
conform to the specifications in 20 CFR 679.430 for demonstrating 
internal controls and preventing conflict of interest.
    (d) A Local WDB may be selected as a one-stop operator through sole 
source procurement only with agreement of the chief elected official in 
the local area and the Governor. The Local WDB must establish 
sufficient conflict of interest policies and procedures and these 
policies and procedures must be approved by the Governor.


Sec.  463.615  May an entity currently serving as one-stop operator 
compete to be a one-stop operator under the procurement requirements of 
this subpart?

    (a) Local WDBs may compete for and be selected as one-stop 
operators, as long as appropriate firewalls and conflict of interest 
policies and procedures are in place. These policies and procedures 
must conform to the specifications in 20 CFR 679.430 for demonstrating 
internal controls and preventing conflict of interest.
    (b) State and local agencies may compete for and be selected as 
one-stop operators by the Local WDB, as long as appropriate firewalls 
and conflict of interest policies and procedures are in place. These 
policies and procedures must conform to the specifications in 20 CFR 
679.430 for demonstrating internal controls and preventing conflict of 
interest.
    (c) In the case of single-area States where the State WDB serves as 
the Local WDB, the State agency is eligible to compete for and be 
selected as operator

[[Page 56064]]

as long as appropriate firewalls and conflict of interest policies are 
in place and followed for the competition. These policies and 
procedures must conform to the specifications in 20 CFR 679.430 for 
demonstrating internal controls and preventing conflicts of interest.


Sec.  463.620  What is the one-stop operator's role?

    (a) At a minimum, the one-stop operator must coordinate the service 
delivery of required one-stop partners and service providers. Local 
WDBs may establish additional roles of one-stop operator, including, 
but not limited to: Coordinating service providers across the one-stop 
delivery system, being the primary provider of services within the 
center, providing some of the services within the center, or 
coordinating service delivery in a multi-center area, which may include 
affiliated sites. The competition for a one-stop operator must clearly 
articulate the role of the one-stop operator.
    (b)(1) Subject to paragraph (b)(2) of this section, a one-stop 
operator may not perform the following functions: Convene system 
stakeholders to assist in the development of the local plan; prepare 
and submit local plans (as required under sec. 107 of WIOA); be 
responsible for oversight of itself; manage or significantly 
participate in the competitive selection process for one-stop 
operators; select or terminate one-stop operators, career services, and 
youth providers; negotiate local performance accountability measures; 
or develop and submit budget for activities of the Local WDB in the 
local area.
    (2) An entity serving as a one-stop operator, that also serves a 
different role within the one-stop delivery system, may perform some or 
all of these functions when it is acting in its other role, if it has 
established sufficient firewalls and conflict of interest policies and 
procedures. The policies and procedures must conform to the 
specifications in 20 CFR 679.430 for demonstrating internal controls 
and preventing conflict of interest.


Sec.  463.625  Can a one-stop operator also be a service provider?

    Yes, but there must be appropriate firewalls in place in regards to 
the competition, and subsequent oversight, monitoring, and evaluation 
of performance of the service provider. The operator cannot develop, 
manage, or conduct the competition of a service provider in which it 
intends to compete. In cases where an operator is also a service 
provider, there must be firewalls and internal controls within the 
operator-service provider entity, as well as specific policies and 
procedures at the Local WDB level regarding oversight, monitoring, and 
evaluation of performance of the service provider. The firewalls must 
conform to the specifications in 20 CFR 679.430 for demonstrating 
internal controls and preventing conflicts of interest.


Sec.  463.630  Can State merit staff still work in a one-stop center 
where the operator is not a governmental entity?

    Yes. State merit staff can continue to perform functions and 
activities in the one-stop center. The Local WDB and one-stop operator 
must establish a system for management of merit staff in accordance 
with State policies and procedures. Continued use of State merit staff 
for the provision of Wagner-Peyser Act services or services from other 
programs with merit staffing requirements must be included in the 
competition for and final contract with the one-stop operator when 
Wagner-Peyser Act services or services from other programs with merit 
staffing requirements are being provided.


Sec.  463.635  What is the compliance date of the provisions of this 
subpart?

    (a) No later than July 1, 2017, one-stop operators selected under 
the competitive process described in this subpart must be in place and 
operating the one-stop center.
    (b) By November 17, 2016, every Local WDB must demonstrate it is 
taking steps to prepare for competition of its one-stop operator. This 
demonstration may include, but is not limited to, market research, 
requests for information, and conducting a cost and price analysis.


Sec.  463.700  What are the one-stop infrastructure costs?

    (a) Infrastructure costs of one-stop centers are nonpersonnel costs 
that are necessary for the general operation of the one-stop center, 
including:
    (1) Rental of the facilities;
    (2) Utilities and maintenance;
    (3) Equipment (including assessment-related products and assistive 
technology for individuals with disabilities); and
    (4) Technology to facilitate access to the one-stop center, 
including technology used for the center's planning and outreach 
activities.
    (b) Local WDBs may consider common identifier costs as costs of 
one-stop infrastructure.
    (c) Each entity that carries out a program or activities in a local 
one-stop center, described in Sec. Sec.  463.400 through 463.410, must 
use a portion of the funds available for the program and activities to 
maintain the one-stop delivery system, including payment of the 
infrastructure costs of one-stop centers. These payments must be in 
accordance with this subpart; Federal cost principles, which require 
that all costs must be allowable, reasonable, necessary, and allocable 
to the program; and all other applicable legal requirements.


Sec.  463.705  What guidance must the Governor issue regarding one-stop 
infrastructure funding?

    (a) The Governor, after consultation with chief elected officials, 
the State WDB, and Local WDBs, and consistent with guidance and 
policies provided by the State WDB, must develop and issue guidance for 
use by local areas, specifically:
    (1) Guidelines for State-administered one-stop partner programs for 
determining such programs' contributions to a one-stop delivery system, 
based on such programs' proportionate use of such system, and relative 
benefit received, consistent with Office of Management and Budget (OMB) 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards in 2 CFR part 200, including 
determining funding for the costs of infrastructure; and
    (2) Guidance to assist Local WDBs, chief elected officials, and 
one-stop partners in local areas in determining equitable and stable 
methods of funding the costs of infrastructure at one-stop centers 
based on proportionate use and relative benefit received, and 
consistent with Federal cost principles contained in the Uniform 
Guidance at 2 CFR part 200.
    (b) The guidance must include:
    (1) The appropriate roles of the one-stop partner programs in 
identifying one-stop infrastructure costs;
    (2) Approaches to facilitate equitable and efficient cost 
allocation that results in a reasonable cost allocation methodology 
where infrastructure costs are charged to each partner based on its 
proportionate use of the one-stop centers and relative benefit 
received, consistent with Federal cost principles at 2 CFR part 200; 
and
    (3) The timelines regarding notification to the Governor for not 
reaching local agreement and triggering the State funding mechanism 
described in Sec.  463.730, and timelines for a one-stop partner to 
submit an appeal in the State funding mechanism.


Sec.  463.710  How are infrastructure costs funded?

    Infrastructure costs are funded either through the local funding 
mechanism

[[Page 56065]]

described in Sec.  463.715 or through the State funding mechanism 
described in Sec.  463.730.


Sec.  463.715  How are one-stop infrastructure costs funded in the 
local funding mechanism?

    (a) In the local funding mechanism, the Local WDB, chief elected 
officials, and one-stop partners agree to amounts and methods of 
calculating amounts each partner will contribute for one-stop 
infrastructure funding, include the infrastructure funding terms in the 
MOU, and sign the MOU. The local funding mechanism must meet all of the 
following requirements:
    (1) The infrastructure costs are funded through cash and fairly 
evaluated non-cash and third-party in-kind partner contributions and 
include any funding from philanthropic organizations or other private 
entities, or through other alternative financing options, to provide a 
stable and equitable funding stream for ongoing one-stop delivery 
system operations;
    (2) Contributions must be negotiated between one-stop partners, 
chief elected officials, and the Local WDB and the amount to be 
contributed must be included in the MOU;
    (3) The one-stop partner program's proportionate share of funding 
must be calculated in accordance with the Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards in 2 CFR part 200 based upon a reasonable cost allocation 
methodology whereby infrastructure costs are charged to each partner in 
proportion to its use of the one-stop center, relative to benefits 
received. Such costs must also be allowable, reasonable, necessary, and 
allocable;
    (4) Partner shares must be periodically reviewed and reconciled 
against actual costs incurred, and adjusted to ensure that actual costs 
charged to any one-stop partners are proportionate to the use of the 
one-stop center and relative to the benefit received by the one-stop 
partners and their respective programs or activities.
    (b) In developing the section of the MOU on one-stop infrastructure 
funding described in Sec.  463.755, the Local WDB and chief elected 
officials will:
    (1) Ensure that the one-stop partners adhere to the guidance 
identified in Sec.  463.705 on one-stop delivery system infrastructure 
costs.
    (2) Work with one-stop partners to achieve consensus and informally 
mediate any possible conflicts or disagreements among one-stop 
partners.
    (3) Provide technical assistance to new one-stop partners and local 
grant recipients to ensure that those entities are informed and 
knowledgeable of the elements contained in the MOU and the one-stop 
infrastructure costs arrangement.
    (c) The MOU may include an interim infrastructure funding 
agreement, including as much detail as the Local WDB has negotiated 
with one-stop partners, if all other parts of the MOU have been 
negotiated, in order to allow the partner programs to operate in the 
one-stop centers. The interim infrastructure funding agreement must be 
finalized within 6 months of when the MOU is signed. If the interim 
infrastructure funding agreement is not finalized within that 
timeframe, the Local WDB must notify the Governor, as described in 
Sec.  463.725.


Sec.  463.720  What funds are used to pay for infrastructure costs in 
the local one-stop infrastructure funding mechanism?

    (a) In the local funding mechanism, one-stop partner programs may 
determine what funds they will use to pay for infrastructure costs. The 
use of these funds must be in accordance with the requirements in this 
subpart, and with the relevant partner's authorizing statutes and 
regulations, including, for example, prohibitions against supplanting 
non-Federal resources, statutory limitations on administrative costs, 
and all other applicable legal requirements. In the case of partners 
administering programs authorized by title I of WIOA, these 
infrastructure costs may be considered program costs. In the case of 
partners administering adult education and literacy programs authorized 
by title II of WIOA, these funds must include Federal funds made 
available for the local administration of adult education and literacy 
programs authorized by title II of WIOA. These funds may also include 
non-Federal resources that are cash, in-kind or third-party 
contributions. In the case of partners administering the Carl D. 
Perkins Career and Technical Education Act of 2006, funds used to pay 
for infrastructure costs may include funds available for local 
administrative expenses, non-Federal resources that are cash, in-kind 
or third-party contributions, and may include other funds made 
available by the State.
    (b) There are no specific caps on the amount or percent of overall 
funding a one-stop partner may contribute to fund infrastructure costs 
under the local funding mechanism, except that contributions for 
administrative costs may not exceed the amount available for 
administrative costs under the authorizing statute of the partner 
program. However, amounts contributed for infrastructure costs must be 
allowable and based on proportionate use of the one-stop centers and 
relative benefit received by the partner program, taking into account 
the total cost of the one-stop infrastructure as well as alternate 
financing options, and must be consistent with 2 CFR part 200, 
including the Federal cost principles.
    (c) Cash, non-cash, and third-party in-kind contributions may be 
provided by one-stop partners to cover their proportionate share of 
infrastructure costs.
    (1) Cash contributions are cash funds provided to the Local WDB or 
its designee by one-stop partners, either directly or by an interagency 
transfer.
    (2) Non-cash contributions are comprised of--
    (i) Expenditures incurred by one-stop partners on behalf of the 
one-stop center; and
    (ii) Non-cash contributions or goods or services contributed by a 
partner program and used by the one-stop center.
    (3) Non-cash contributions, especially those set forth in paragraph 
(c)(2)(ii) of this section, must be valued consistent with 2 CFR 
200.306 to ensure they are fairly evaluated and meet the partners' 
proportionate share.
    (4) Third-party in-kind contributions are:
    (i) Contributions of space, equipment, technology, non-personnel 
services, or other like items to support the infrastructure costs 
associated with one-stop operations, by a non-one-stop partner to 
support the one-stop center in general, not a specific partner; or
    (ii) Contributions by a non-one-stop partner of space, equipment, 
technology, non-personnel services, or other like items to support the 
infrastructure costs associated with one-stop operations, to a one-stop 
partner to support its proportionate share of one-stop infrastructure 
costs.
    (iii) In-kind contributions described in paragraphs (c)(4)(i) and 
(ii) of this section must be valued consistent with 2 CFR 200.306 and 
reconciled on a regular basis to ensure they are fairly evaluated and 
meet the proportionate share of the partner.
    (5) All partner contributions, regardless of the type, must be 
reconciled on a regular basis (i.e., monthly or quarterly), comparing 
actual expenses incurred to relative benefits received, to ensure each 
partner program is contributing its proportionate share in accordance 
with the terms of the MOU.

[[Page 56066]]

Sec.  463.725  What happens if consensus on infrastructure funding is 
not reached at the local level between the Local Workforce Development 
Board, chief elected officials, and one-stop partners?

    With regard to negotiations for infrastructure funding for Program 
Year (PY) 2017 and for each subsequent program year thereafter, if the 
Local WDB, chief elected officials, and one-stop partners do not reach 
consensus on methods of sufficiently funding local infrastructure 
through the local funding mechanism in accordance with the Governor's 
guidance issued under Sec.  463.705 and consistent with the regulations 
in Sec. Sec.  463.715 and 463.720, and include that consensus agreement 
in the signed MOU, then the Local WDB must notify the Governor by the 
deadline established by the Governor under Sec.  463.705(b)(3). Once 
notified, the Governor must administer funding through the State 
funding mechanism, as described in Sec. Sec.  463.730 through 463.738, 
for the program year impacted by the local area's failure to reach 
consensus.


Sec.  463.730  What is the State one-stop infrastructure funding 
mechanism?

    (a) Consistent with sec. 121(h)(1)(A)(i)(II) of WIOA, if the Local 
WDB, chief elected official, and one-stop partners in a local area do 
not reach consensus agreement on methods of sufficiently funding the 
costs of infrastructure of one-stop centers for a program year, the 
State funding mechanism is applicable to the local area for that 
program year.
    (b) In the State funding mechanism, the Governor, subject to the 
limitations in paragraph (c) of this section, determines one-stop 
partner contributions after consultation with the chief elected 
officials, Local WDBs, and the State WDB. This determination involves:
    (1) The application of a budget for one-stop infrastructure costs 
as described in Sec.  463.735, based on either agreement reached in the 
local area negotiations or the State WDB formula outlined in Sec.  
463.745;
    (2) The determination of each local one-stop partner program's 
proportionate use of the one-stop delivery system and relative benefit 
received, consistent with the Uniform Guidance at 2 CFR part 200, 
including the Federal cost principles, the partner programs' 
authorizing laws and regulations, and other applicable legal 
requirements described in Sec.  463.736; and
    (3) The calculation of required statewide program caps on 
contributions to infrastructure costs from one-stop partner programs in 
areas operating under the State funding mechanism as described in Sec.  
463.738.
    (c) In certain situations, the Governor does not determine the 
infrastructure cost contributions for some one-stop partner programs 
under the State funding mechanism.
    (1) The Governor will not determine the contribution amounts for 
infrastructure funds for Native American program grantees described in 
20 CFR part 684. The appropriate portion of funds to be provided by 
Native American program grantees to pay for one-stop infrastructure 
must be determined as part of the development of the MOU described in 
Sec.  463.500 and specified in that MOU.
    (2) In States in which the policy-making authority is placed in an 
entity or official that is independent of the authority of the Governor 
with respect to the funds provided for adult education and literacy 
activities authorized under title II of WIOA, postsecondary career and 
technical education activities authorized under the Carl D. Perkins 
Career and Technical Education Act of 2006, or VR services authorized 
under title I of the Rehabilitation Act of 1973 (other than sec. 112 or 
part C), as amended by WIOA title IV, the determination of the amount 
each of the applicable partners must contribute to assist in paying the 
infrastructure costs of one-stop centers must be made by the official 
or chief officer of the entity with such authority, in consultation 
with the Governor.
    (d) Any duty, ability, choice, responsibility, or other action 
otherwise related to the determination of infrastructure costs 
contributions that is assigned to the Governor in Sec. Sec.  463.730 
through 463.745 also applies to this decision-making process performed 
by the official or chief officer described in paragraph (c)(2) of this 
section.


Sec.  463.731  What are the steps to determine the amount to be paid 
under the State one-stop infrastructure funding mechanism?

    (a) To initiate the State funding mechanism, a Local WDB that has 
not reached consensus on methods of sufficiently funding local 
infrastructure through the local funding mechanism as provided in Sec.  
463.725 must notify the Governor by the deadline established by the 
Governor under Sec.  463.705(b)(3).
    (b) Once a Local WDB has informed the Governor that no consensus 
has been reached:
    (1) The Local WDB must provide the Governor with local negotiation 
materials in accordance with Sec.  463.735(a).
    (2) The Governor must determine the one-stop center budget by 
either:
    (i) Accepting a budget previously agreed upon by partner programs 
in the local negotiations, in accordance with Sec.  463.735(b)(1); or
    (ii) Creating a budget for the one-stop center using the State WDB 
formula (described in Sec.  463.745) in accordance with Sec.  
463.735(b)(3).
    (3) The Governor then must establish a cost allocation methodology 
to determine the one-stop partner programs' proportionate shares of 
infrastructure costs, in accordance with Sec.  463.736.
    (4)(i) Using the methodology established under paragraph (b)(2)(ii) 
of this section, and taking into consideration the factors concerning 
individual partner programs listed in Sec.  463.737(b)(2), the Governor 
must determine each partner's proportionate share of the infrastructure 
costs, in accordance with Sec.  463.737(b)(1), and
    (ii) In accordance with Sec.  463.730(c), in some instances, the 
Governor does not determine a partner program's proportionate share of 
infrastructure funding costs, in which case it must be determined by 
the entities named in Sec.  463.730(c)(1) and (2).
    (5) The Governor must then calculate the statewide caps on the 
amounts that partner programs may be required to contribute toward 
infrastructure funding, according to the steps found at Sec.  
463.738(a)(1) through (4).
    (6) The Governor must ensure that the aggregate total of the 
infrastructure contributions according to proportionate share required 
of all local partner programs in local areas under the State funding 
mechanism do not exceed the cap for that particular program, in 
accordance with Sec.  463.738(b)(1). If the total does not exceed the 
cap, the Governor must direct each one-stop partner program to pay the 
amount determined under Sec.  463.737(a) toward the infrastructure 
funding costs of the one-stop center. If the total does exceed the cap, 
then to determine the amount to direct each one-stop program to pay, 
the Governor may:
    (i) Ascertain, in accordance with Sec.  463.738(b)(2)(i), whether 
the local partner or partners whose proportionate shares are calculated 
above the individual program caps are willing to voluntarily contribute 
above the capped amount to equal that program's proportionate share; or
    (ii) Choose from the options provided in Sec.  463.738(b)(2)(ii), 
including having the local area re-enter negotiations to reassess each 
one-stop partner's proportionate share and make adjustments or identify 
alternate sources

[[Page 56067]]

of funding to make up the difference between the capped amount and the 
proportionate share of infrastructure funding of the one-stop partner.
    (7) If none of the solutions given in paragraphs (b)(6)(i) and (ii) 
of this section prove to be viable, the Governor must reassess the 
proportionate shares of each one-stop partner so that the aggregate 
amount attributable to the local partners for each program is less than 
that program's cap amount. Upon such reassessment, the Governor must 
direct each one-stop partner program to pay the reassessed amount 
toward the infrastructure funding costs of the one-stop center.


Sec.  463.735  How are infrastructure cost budgets for the one-stop 
centers in a local area determined in the State one-stop infrastructure 
funding mechanism?

    (a) Local WDBs must provide to the Governor appropriate and 
relevant materials and documents used in the negotiations under the 
local funding mechanism, including but not limited to: The local WIOA 
plan, the cost allocation method or methods proposed by the partners to 
be used in determining proportionate share, the proposed amounts or 
budget to fund infrastructure, the amount of total partner funds 
included, the type of funds or non-cash contributions, proposed one-
stop center budgets, and any agreed upon or proposed MOUs.
    (b)(1) If a local area has reached agreement as to the 
infrastructure budget for the one-stop centers in the local area, it 
must provide this budget to the Governor as required by paragraph (a) 
of this section. If, as a result of the agreed upon infrastructure 
budget, only the individual programmatic contributions to 
infrastructure funding based upon proportionate use of the one-stop 
centers and relative benefit received are at issue, the Governor may 
accept the budget, from which the Governor must calculate each 
partner's contribution consistent with the cost allocation 
methodologies contained in the Uniform Guidance found in 2 CFR part 
200, as described in Sec.  463.736.
    (2) The Governor may also take into consideration the extent to 
which the partners in the local area have agreed in determining the 
proportionate shares, including any agreements reached at the local 
level by one or more partners, as well as any other element or product 
of the negotiating process provided to the Governor as required by 
paragraph (a) of this section.
    (3) If a local area has not reached agreement as to the 
infrastructure budget for the one-stop centers in the local area, or if 
the Governor determines that the agreed upon budget does not adequately 
meet the needs of the local area or does not reasonably work within the 
confines of the local area's resources in accordance with the 
Governor's one-stop budget guidance (which is required to be issued by 
WIOA sec. 121(h)(1)(B) and under Sec.  463.705), then, in accordance 
with Sec.  463.745, the Governor must use the formula developed by the 
State WDB based on at least the factors required under Sec.  463.745, 
and any associated weights to determine the local area budget.


Sec.  463.736  How does the Governor establish a cost allocation 
methodology used to determine the one-stop partner programs' 
proportionate shares of infrastructure costs under the State one-stop 
infrastructure funding mechanism?

    Once the appropriate budget is determined for a local area through 
either method described in Sec.  463.735 (by acceptance of a budget 
agreed upon in local negotiation or by the Governor applying the 
formula detailed in Sec.  463.745), the Governor must determine the 
appropriate cost allocation methodology to be applied to the one-stop 
partners in such local area, consistent with the Federal cost 
principles permitted under 2 CFR part 200, to fund the infrastructure 
budget.


Sec.  463.737  How are one-stop partner programs' proportionate shares 
of infrastructure costs determined under the State one-stop 
infrastructure funding mechanism?

    (a) The Governor must direct the one-stop partners in each local 
area that have not reached agreement under the local funding mechanism 
to pay what the Governor determines is each partner program's 
proportionate share of infrastructure funds for that area, subject to 
the application of the caps described in Sec.  463.738.
    (b)(1) The Governor must use the cost allocation methodology--as 
determined under Sec.  463.736--to determine each partner's 
proportionate share of the infrastructure costs under the State funding 
mechanism, subject to considering the factors described in paragraph 
(b)(2) of this section.
    (2) In determining each partner program's proportionate share of 
infrastructure costs, the Governor must take into account the costs of 
administration of the one-stop delivery system for purposes not related 
to one-stop centers for each partner (such as costs associated with 
maintaining the Local WDB or information technology systems), as well 
as the statutory requirements for each partner program, the partner 
program's ability to fulfill such requirements, and all other 
applicable legal requirements. The Governor may also take into 
consideration the extent to which the partners in the local area have 
agreed in determining the proportionate shares, including any 
agreements reached at the local level by one or more partners, as well 
as any other materials or documents of the negotiating process, which 
must be provided to the Governor by the Local WDB and described in 
Sec.  463.735(a).


Sec.  463.738  How are statewide caps on the contributions for one-stop 
infrastructure funding determined in the State one-stop infrastructure 
funding mechanism?

    (a) The Governor must calculate the statewide cap on the 
contributions for one-stop infrastructure funding required to be 
provided by each one-stop partner program for those local areas that 
have not reached agreement. The cap is the amount determined under 
paragraph (a)(4) of this section, which the Governor derives by:
    (1) First, determining the amount resulting from applying the 
percentage for the corresponding one-stop partner program provided in 
paragraph (d) of this section to the amount of Federal funds provided 
to carry out the one-stop partner program in the State for the 
applicable fiscal year;
    (2) Second, selecting a factor (or factors) that reasonably 
indicates the use of one-stop centers in the State, applying such 
factor(s) to all local areas in the State, and determining the 
percentage of such factor(s) applicable to the local areas that reached 
agreement under the local funding mechanism in the State;
    (3) Third, determining the amount resulting from applying the 
percentage determined in paragraph (a)(2) of this section to the amount 
determined under paragraph (a)(1) of this section for the one-stop 
partner program; and
    (4) Fourth, determining the amount that results from subtracting 
the amount determined under paragraph (a)(3) of this section from the 
amount determined under paragraph (a)(1) of this section. The outcome 
of this final calculation results in the partner program's cap.
    (b)(1) The Governor must ensure that the funds required to be 
contributed by each partner program in the local areas in the State 
under the State funding mechanism, in aggregate, do not exceed the 
statewide cap for each program as determined under paragraph (a) of 
this section.
    (2) If the contributions initially determined under Sec.  463.737 
would exceed the applicable cap determined

[[Page 56068]]

under paragraph (a) of this section, the Governor may:
    (i) Ascertain if the one-stop partner whose contribution would 
otherwise exceed the cap determined under paragraph (a) of this section 
will voluntarily contribute above the capped amount, so that the total 
contributions equal that partner's proportionate share. The one-stop 
partner's contribution must still be consistent with the program's 
authorizing laws and regulations, the Federal cost principles in 2 CFR 
part 200, and other applicable legal requirements; or
    (ii) Direct or allow the Local WDB, chief elected officials, and 
one-stop partners to: Re-enter negotiations, as necessary; reduce the 
infrastructure costs to reflect the amount of funds that are available 
for such costs without exceeding the cap levels; reassess the 
proportionate share of each one-stop partner; or identify alternative 
sources of financing for one-stop infrastructure funding, consistent 
with the requirement that each one-stop partner pay an amount that is 
consistent with the proportionate use of the one-stop center and 
relative benefit received by the partner, the program's authorizing 
laws and regulations, the Federal cost principles in 2 CFR part 200, 
and other applicable legal requirements.
    (3) If applicable under paragraph (b)(2)(ii) of this section, the 
Local WDB, chief elected officials, and one-stop partners, after 
renegotiation, may come to agreement, sign an MOU, and proceed under 
the local funding mechanism. Such actions do not require the 
redetermination of the applicable caps under paragraph (a) of this 
section.
    (4) If, after renegotiation, agreement among partners still cannot 
be reached or alternate financing cannot be identified, the Governor 
may adjust the specified allocation, in accordance with the amounts 
available and the limitations described in paragraph (d) of this 
section. In determining these adjustments, the Governor may take into 
account information relating to the renegotiation as well as the 
information described in Sec.  463.735(a).
    (c) Limitations. Subject to paragraph (a) of this section and in 
accordance with WIOA sec. 121(h)(2)(D), the following limitations apply 
to the Governor's calculations of the amount that one-stop partners in 
local areas that have not reached agreement under the local funding 
mechanism may be required under Sec.  463.736 to contribute to one-stop 
infrastructure funding:
    (1) WIOA formula programs and Wagner-Peyser Act Employment Service. 
The portion of funds required to be contributed under the WIOA youth, 
adult, or dislocated worker programs, or under the Wagner-Peyser Act 
(29 U.S.C. 49 et seq.) must not exceed three percent of the amount of 
the program in the State for a program year.
    (2) Other one-stop partners. For required one-stop partners other 
than those specified in paragraphs (c)(1), (3), (5), and (6) of this 
section, the portion of funds required to be contributed must not 
exceed 1.5 percent of the amount of Federal funds provided to carry out 
that program in the State for a fiscal year. For purposes of the Carl 
D. Perkins Career and Technical Education Act of 2006, the cap on 
contributions is determined based on the funds made available by the 
State for postsecondary level programs and activities under sec. 132 of 
the Carl D. Perkins Career and Technical Education Act and the amount 
of funds used by the State under sec. 112(a)(3) of the Perkins Act 
during the prior year to administer postsecondary level programs and 
activities, as applicable.
(3) Vocational Rehabilitation
    (i) Within a State, for the entity or entities administering the 
programs described in WIOA sec. 121(b)(1)(B)(iv) and Sec.  463.400, the 
allotment is based on the one State Federal fiscal year allotment, even 
in instances where that allotment is shared between two State agencies, 
and the cumulative portion of funds required to be contributed must not 
exceed--
    (A) 0.75 percent of the amount of Federal funds provided to carry 
out such program in the State for Fiscal Year 2016 for purposes of 
applicability of the State funding mechanism for PY 2017;
    (B) 1.0 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2017 for purposes of applicability of the 
State funding mechanism for PY 2018;
    (C) 1.25 percent of the amount provided to carry out such program 
in the State for Fiscal Year 2018 for purposes of applicability of the 
State funding mechanism for PY 2019;
    (D) 1.5 percent of the amount provided to carry out such program in 
the State for Fiscal Year 2019 and following years for purposes of 
applicability of the State funding mechanism for PY 2020 and subsequent 
years.
    (ii) The limitations set forth in paragraph (d)(3)(i) of this 
section for any given fiscal year must be based on the final VR 
allotment to the State in the applicable Federal fiscal year.
    (4) Federal direct spending programs. For local areas that have not 
reached a one-stop infrastructure funding agreement by consensus, an 
entity administering a program funded with direct Federal spending, as 
defined in sec. 250(c)(8) of the Balanced Budget and Emergency Deficit 
Control Act of 1985, as in effect on February 15, 2014 (2 U.S.C. 
900(c)(8)), must not be required to provide more for infrastructure 
costs than the amount that the Governor determined (as described in 
Sec.  463.737).
    (5) TANF programs. For purposes of TANF, the cap on contributions 
is determined based on the total Federal TANF funds expended by the 
State for work, education, and training activities during the prior 
Federal fiscal year (as reported to the Department of Health and Human 
Services (HHS) on the quarterly TANF Financial Report form), plus any 
additional amount of Federal TANF funds that the State TANF agency 
reasonably determines was expended for administrative costs in 
connection with these activities but that was separately reported to 
HHS as an administrative cost. The State's contribution to the one-stop 
infrastructure must not exceed 1.5 percent of these combined 
expenditures.
    (6) Community Services Block Grant (CSBG) programs. For purposes of 
CSBG, the cap on contributions will be based on the total amount of 
CSBG funds determined by the State to have been expended by local CSBG-
eligible entities for the provision of employment and training 
activities during the prior Federal fiscal year for which information 
is available (as reported to HHS on the CSBG Annual Report) and any 
additional amount that the State CSBG agency reasonably determines was 
expended for administrative purposes in connection with these 
activities and was separately reported to HHS as an administrative 
cost. The State's contribution must not exceed 1.5 percent of these 
combined expenditures.
    (d) For programs for which it is not otherwise feasible to 
determine the amount of Federal funding used by the program until the 
end of that program's operational year--because, for example, the 
funding available for education, employment, and training activities is 
included within funding for the program that may also be used for other 
unrelated activities--the determination of the Federal funds provided 
to carry out the program for a fiscal year under paragraph (a)(1) of 
this section may be determined by:
    (1) The percentage of Federal funds available to the one-stop 
partner program that were used by the one-stop partner program for 
education, employment, and training activities in

[[Page 56069]]

the previous fiscal year for which data are available; and
    (2) Applying the percentage determined under paragraph (d)(1) of 
this section to the total amount of Federal funds available to the one-
stop partner program for the fiscal year for which the determination 
under paragraph (a)(1) of this section applies.


Sec.  463.740  What funds are used to pay for infrastructure costs in 
the State one-stop infrastructure funding mechanism?

    (a) In the State funding mechanism, infrastructure costs for WIOA 
title I programs, including Native American Programs described in 20 
CFR part 684, may be paid using program funds, administrative funds, or 
both. Infrastructure costs for the Senior Community Service Employment 
Program under title V of the Older Americans Act (42 U.S.C. 3056 et 
seq.) may also be paid using program funds, administrative funds, or 
both.
    (b) In the State funding mechanism, infrastructure costs for other 
required one-stop partner programs (listed in Sec. Sec.  463.400 
through 463.410) are limited to the program's administrative funds, as 
appropriate.
    (c) In the State funding mechanism, infrastructure costs for the 
adult education program authorized by title II of WIOA must be paid 
from the funds that are available for local administration and may be 
paid from funds made available by the State or non-Federal resources 
that are cash, in-kind, or third-party contributions.
    (d) In the State funding mechanism, infrastructure costs for the 
Carl D. Perkins Career and Technical Education Act of 2006 must be paid 
from funds available for local administration of postsecondary level 
programs and activities to eligible recipients or consortia of eligible 
recipients and may be paid from funds made available by the State or 
non-Federal resources that are cash, in-kind, or third-party 
contributions.


Sec.  463.745  What factors does the State Workforce Development Board 
use to develop the formula described in Workforce Innovation and 
Opportunity Act, which is used by the Governor to determine the 
appropriate one-stop infrastructure budget for each local area 
operating under the State infrastructure funding mechanism, if no 
reasonably implementable locally negotiated budget exists?

    The State WDB must develop a formula, as described in WIOA sec. 
121(h)(3)(B), to be used by the Governor under Sec.  463.735(b)(3) in 
determining the appropriate budget for the infrastructure costs of one-
stop centers in the local areas that do not reach agreement under the 
local funding mechanism and are, therefore, subject to the State 
funding mechanism. The formula identifies the factors and corresponding 
weights for each factor that the Governor must use, which must include: 
the number of one-stop centers in a local area; the population served 
by such centers; the services provided by such centers; and any factors 
relating to the operations of such centers in the local area that the 
State WDB determines are appropriate. As indicated in Sec.  
463.735(b)(1), if the local area has agreed on such a budget, the 
Governor may accept that budget in lieu of applying the formula 
factors.


Sec.  463.750  When and how can a one-stop partner appeal a one-stop 
infrastructure amount designated by the State under the State 
infrastructure funding mechanism?

    (a) The Governor must establish a process, described under sec. 
121(h)(2)(E) of WIOA, for a one-stop partner administering a program 
described in Sec. Sec.  463.400 through 463.410 to appeal the 
Governor's determination regarding the one-stop partner's portion of 
funds to be provided for one-stop infrastructure costs. This appeal 
process must be described in the Unified State Plan.
    (b) The appeal may be made on the ground that the Governor's 
determination is inconsistent with proportionate share requirements in 
Sec.  463.735(a), the cost contribution limitations in Sec.  
463.735(b), the cost contribution caps in Sec.  463.738, consistent 
with the process described in the State Plan.
    (c) The process must ensure prompt resolution of the appeal in 
order to ensure the funds are distributed in a timely manner, 
consistent with the requirements of 20 CFR 683.630.
    (d) The one-stop partner must submit an appeal in accordance with 
State's deadlines for appeals specified in the guidance issued under 
Sec.  463.705(b)(3), or if the State has not set a deadline, within 21 
days from the Governor's determination.


Sec.  463.755  What are the required elements regarding infrastructure 
funding that must be included in the one-stop Memorandum of 
Understanding?

    The MOU, fully described in Sec.  463.500, must contain the 
following information whether the local areas use either the local one-
stop or the State funding method:
    (a) The period of time in which this infrastructure funding 
agreement is effective. This may be a different time period than the 
duration of the MOU.
    (b) Identification of an infrastructure and shared services budget 
that will be periodically reconciled against actual costs incurred and 
adjusted accordingly to ensure that it reflects a cost allocation 
methodology that demonstrates how infrastructure costs are charged to 
each partner in proportion to its use of the one-stop center and 
relative benefit received, and that complies with 2 CFR part 200 (or 
any corresponding similar regulation or ruling).
    (c) Identification of all one-stop partners, chief elected 
officials, and Local WDB participating in the infrastructure funding 
arrangement.
    (d) Steps the Local WDB, chief elected officials, and one-stop 
partners used to reach consensus or an assurance that the local area 
followed the guidance for the State funding process.
    (e) Description of the process to be used among partners to resolve 
issues during the MOU duration period when consensus cannot be reached.
    (f) Description of the periodic modification and review process to 
ensure equitable benefit among one-stop partners.


Sec.  463.760  How do one-stop partners jointly fund other shared costs 
under the Memorandum of Understanding?

    (a) In addition to jointly funding infrastructure costs, one-stop 
partners listed in Sec. Sec.  463.400 through 463.410 must use a 
portion of funds made available under their programs' authorizing 
Federal law (or fairly evaluated in-kind contributions) to pay the 
additional costs relating to the operation of the one-stop delivery 
system. These other costs must include applicable career services and 
may include other costs, including shared services.
    (b) For the purposes of paragraph (a) of this section, shared 
services' costs may include the costs of shared services that are 
authorized for and may be commonly provided through the one-stop 
partner programs to any individual, such as initial intake, assessment 
of needs, appraisal of basic skills, identification of appropriate 
services to meet such needs, referrals to other one-stop partners, and 
business services. Shared operating costs may also include shared costs 
of the Local WDB's functions.
    (c) Contributions to the additional costs related to operation of 
the one-stop delivery system may be cash, non-cash, or third-party in-
kind contributions, consistent with how these are described in Sec.  
463.720(c).
    (d) The shared costs described in paragraph (a) of this section 
must be allocated according to the proportion of benefit received by 
each of the partners, consistent with the Federal law authorizing the 
partner's program, and

[[Page 56070]]

consistent with all other applicable legal requirements, including 
Federal cost principles in 2 CFR part 200 (or any corresponding similar 
regulation or ruling) requiring that costs are allowable, reasonable, 
necessary, and allocable.
    (e) Any shared costs agreed upon by the one-stop partners must be 
included in the MOU.


Sec.  463.800  How are one-stop centers and one-stop delivery systems 
certified for effectiveness, physical and programmatic accessibility, 
and continuous improvement?

    (a) The State WDB, in consultation with chief elected officials and 
Local WDBs, must establish objective criteria and procedures for Local 
WDBs to use when certifying one-stop centers.
    (1) The State WDB, in consultation with chief elected officials and 
Local WDBs, must review and update the criteria every 2 years as part 
of the review and modification of State Plans pursuant to Sec.  
463.135.
    (2) The criteria must be consistent with the Governor's and State 
WDB's guidelines, guidance, and policies on infrastructure funding 
decisions, described in Sec.  463.705. The criteria must evaluate the 
one-stop centers and one-stop delivery system for effectiveness, 
including customer satisfaction, physical and programmatic 
accessibility, and continuous improvement.
    (3) When the Local WDB is the one-stop operator as described in 20 
CFR 679.410, the State WDB must certify the one-stop center.
    (b) Evaluations of effectiveness must include how well the one-stop 
center integrates available services for participants and businesses, 
meets the workforce development needs of participants and the 
employment needs of local employers, operates in a cost-efficient 
manner, coordinates services among the one-stop partner programs, and 
provides access to partner program services to the maximum extent 
practicable, including providing services outside of regular business 
hours where there is a workforce need, as identified by the Local WDB. 
These evaluations must take into account feedback from one-stop 
customers. They must also include evaluations of how well the one-stop 
center ensures equal opportunity for individuals with disabilities to 
participate in or benefit from one-stop center services. These 
evaluations must include criteria evaluating how well the centers and 
delivery systems take actions to comply with the disability-related 
regulations implementing WIOA sec. 188, set forth at 29 CFR part 38. 
Such actions include, but are not limited to:
    (1) Providing reasonable accommodations for individuals with 
disabilities;
    (2) Making reasonable modifications to policies, practices, and 
procedures where necessary to avoid discrimination against persons with 
disabilities;
    (3) Administering programs in the most integrated setting 
appropriate;
    (4) Communicating with persons with disabilities as effectively as 
with others;
    (5) Providing appropriate auxiliary aids and services, including 
assistive technology devices and services, where necessary to afford 
individuals with disabilities an equal opportunity to participate in, 
and enjoy the benefits of, the program or activity; and
    (6) Providing for the physical accessibility of the one-stop center 
to individuals with disabilities.
    (c) Evaluations of continuous improvement must include how well the 
one-stop center supports the achievement of the negotiated local levels 
of performance for the indicators of performance for the local area 
described in sec. 116(b)(2) of WIOA and part 463. Other continuous 
improvement factors may include a regular process for identifying and 
responding to technical assistance needs, a regular system of 
continuing professional staff development, and having systems in place 
to capture and respond to specific customer feedback.
    (d) Local WDBs must assess at least once every 3 years the 
effectiveness, physical and programmatic accessibility, and continuous 
improvement of one-stop centers and the one-stop delivery systems using 
the criteria and procedures developed by the State WDB. The Local WDB 
may establish additional criteria, or set higher standards for service 
coordination, than those set by the State criteria. Local WDBs must 
review and update the criteria every 2 years as part of the Local Plan 
update process described in Sec.  463.580. Local WDBs must certify one-
stop centers in order to be eligible to use infrastructure funds in the 
State funding mechanism described in Sec.  463.730.
    (e) All one-stop centers must comply with applicable physical and 
programmatic accessibility requirements, as set forth in 29 CFR part 
38, the implementing regulations of WIOA sec. 188.


Sec.  463.900  What is the common identifier to be used by each one-
stop delivery system?

    (a) The common one-stop delivery system identifier is ``American 
Job Center.''
    (b) As of November 17, 2016, each one-stop delivery system must 
include the ``American Job Center'' identifier or ``a proud partner of 
the American Job Center network'' on all primary electronic resources 
used by the one-stop delivery system, and on any newly printed, 
purchased, or created materials.
    (c) As of July 1, 2017, each one-stop delivery system must include 
the ``American Job Center'' identifier or ``a proud partner of the 
American Job Center network'' on all products, programs, activities, 
services, electronic resources, facilities, and related property and 
new materials used in the one-stop delivery system.
    (d) One-stop partners, States, or local areas may use additional 
identifiers on their products, programs, activities, services, 
facilities, and related property and materials.

    Signed at Washington, DC, this 29th day of June 2016.
Thomas E. Perez,
Secretary of Labor.
John B. King, Jr.,
Secretary of Education.
[FR Doc. 2016-15977 Filed 8-8-16; 11:15 am]
BILLING CODE 4000-01-P; 4510-FN-P; 4510-FT-P