Senior Community Service Employment Program; Performance Accountability, 36407-36417 [2018-16216]

Download as PDF 36407 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations AIRAC date State City Airport FDC No. 16–Aug–18 ....... MN Crookston .............. 16–Aug–18 ....... MN Crookston .............. 16–Aug–18 ....... MN Crookston .............. 16–Aug–18 16–Aug–18 16–Aug–18 16–Aug–18 16–Aug–18 ....... ....... ....... ....... ....... GA IL FL FL KS Thomaston ............ Mattoon/Charleston Fernandina Beach Fernandina Beach Abilene .................. Crookston Muni Kirkwood Fld. Crookston Muni Kirkwood Fld. Crookston Muni Kirkwood Fld. Thomaston-Upson County .... Coles County Memorial ........ Fernandina Beach Muni ....... Fernandina Beach Muni ....... Abilene Muni ......................... 16–Aug–18 ....... 16–Aug–18 ....... IA WY Webster City ......... Jackson ................. 16–Aug–18 ....... IL Morris .................... 16–Aug–18 16–Aug–18 16–Aug–18 16–Aug–18 ....... ....... ....... ....... IA IA TX WI Harlan ................... 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Bowling Green ...... Bowling Green ...... Bowling Green ...... Brookhaven ........... Keene .................... Keene .................... Keene .................... [FR Doc. 2018–16139 Filed 7–27–18; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF LABOR Employment and Training Administration 20 CFR Part 641 [Docket No. ETA–2017–0005] daltland on DSKBBV9HB2PROD with RULES RIN 1205–AB79 Senior Community Service Employment Program; Performance Accountability Employment and Training Administration, Labor. ACTION: Final rule. AGENCY: VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 FDC date Subject 8/2928 7/5/18 RNAV (GPS) RWY 13, Orig. 8/2929 7/5/18 RNAV (GPS) RWY 31, Orig–A. 8/2930 7/5/18 VOR/DME RWY 13, Orig–A. 8/3028 8/3782 8/3809 8/3813 8/3819 6/27/18 7/5/18 7/5/18 7/5/18 7/5/18 Webster City Muni ................ Jackson Hole ........................ 8/3826 8/4092 7/5/18 7/5/18 Morris Muni—James R Washburn Field. Harlan Muni .......................... Harlan Muni .......................... Hereford Muni ....................... Dane County Rgnl-Truax Field. Abraham Lincoln Capital ...... Harrison County .................... Jimmy Carter Rgnl ................ William P Hobby ................... Francis S Gabreski ............... 8/4370 7/5/18 8/4397 8/4408 8/4517 8/4627 7/5/18 7/5/18 6/27/18 6/27/18 GPS RWY 15, Orig–B. GPS RWY 33, Orig–B. RNAV (GPS) RWY 20, Orig–A. VOR RWY 14, Orig–D. 8/4856 8/4975 8/5187 8/5265 8/5268 7/5/18 7/5/18 6/27/18 7/5/18 7/5/18 ILS OR LOC RWY 31, Amdt 2A. VOR–A, Amdt 1. RNAV (GPS) RWY 5, Amdt 1A. RNAV (GPS) RWY 35, Amdt 1A. ILS OR LOC RWY 24, Amdt 11. 8/5921 8/5922 8/5924 8/5925 8/6174 6/27/18 6/27/18 6/27/18 6/27/18 7/5/18 RNAV RNAV RNAV RNAV RNAV 8/6407 8/6943 8/6979 8/6980 8/7378 8/8391 8/8393 8/8445 8/8453 8/8454 8/8668 8/9189 8/9190 8/9191 7/9/18 7/9/18 6/27/18 6/27/18 6/27/18 7/9/18 7/9/18 7/9/18 7/9/18 7/9/18 6/27/18 6/27/18 6/27/18 6/27/18 RNAV (GPS) RWY 19, Orig–A. ILS RWY 27, Amdt 3. RNAV (GPS) RWY 6, Amdt 1A. RNAV (GPS) RWY 24, Amdt 1A. ILS OR LOC RWY 31, Amdt 1C. ILS OR LOC RWY 7, Amdt 24. RNAV (GPS) RWY 7, Amdt 2A. VOR/DME–A, Amdt 2. RNAV (GPS) RWY 13, Orig. RNAV (GPS) RWY 31, Orig. RNAV (GPS) RWY 22, Orig. ILS OR LOC RWY 2, Amdt 4. RNAV (GPS) RWY 2, Orig. VOR RWY 2, Amdt 13. Immokalee Rgnl .................... Immokalee Rgnl .................... Immokalee Rgnl .................... Immokalee Rgnl .................... Cheraw Muni/Lynch Bellinger Field. Inverness .............................. Porter County Rgnl ............... Wings Field ........................... Wings Field ........................... Harrisburg Intl ....................... Executive .............................. Executive .............................. Bowling Green Muni ............. Bowling Green Muni ............. Bowling Green Muni ............. Brookhaven-Lincoln County Dillant-Hopkins ...................... Dillant-Hopkins ...................... Dillant-Hopkins ...................... The Employment and Training Administration (ETA) of the Department of Labor (Department) is adopting as a final rule without change the interim final rule (IFR) published by the Department in the Federal Register on December 1, 2017. The IFR revised performance accountability measures for the Senior Community Service Employment Program (SCSEP). The Older Americans Act (OAA) Reauthorization Act of 2016 (2016 OAA) amended the measures of performance for the SCSEP program in large part to align them with the performance measures mandated for programs under the Workforce Innovation and Opportunity Act (WIOA) and required implementation, including through regulation by December 31, 2017. The SUMMARY: PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 ILS OR LOC RWY 30, Amdt 2A. RNAV (GPS) RWY 11, Orig–A. RNAV (GPS) RWY 13, Amdt 2A. RNAV (GPS) RWY 22, Amdt 1B. Takeoff Minimums and Obstacle DP, Orig. NDB RWY 32, Amdt 8. RNAV (GPS) Z RWY 19, Amdt 1A. RNAV (GPS) RWY 18, Amdt 1. (GPS) (GPS) (GPS) (GPS) (GPS) RWY RWY RWY RWY RWY 9, Amdt 1. 18, Amdt 1. 27, Amdt 1. 36, Amdt 1. 8, Orig–A. IFR revised the Performance Accountability subpart of the SCSEP regulations to reflect changes necessitated by the passage of the 2016 OAA. In addition, the IFR made minor, non-substantive amendments to other subparts of the SCSEP regulations to reflect the 2016 OAA amendments that aligned the SCSEP program statutory language with WIOA, such as updating outdated terminology and outdated references to the Workforce Investment Act of 1998 (WIA), which WIOA superseded. The implemented regulations, referred to as an IFR, took effect on January 2, 2018. The Department solicited public comment on the IFR, and the Department considered these comments when it prepared this final rule. E:\FR\FM\30JYR1.SGM 30JYR1 36408 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations DATES: public comments received and finalizes the IFR. The IFR included both the definitions of the measures (as required by OAA sec. 513(b)(2)) and the processes used to implement these measures in the conduct of the SCSEP grants. These processes include how the Department and grantees initially determine and then adjust expected levels of performance for the grants, and how the Department determines whether a grantee fails, meets, or exceeds the levels of performance. The Administrative Procedure Act (APA) authorizes agencies to issue a rule without notice and comment upon a showing of good cause. 5 U.S.C. 553(b)(B). The APA’s good cause exception to public participation applies upon a finding that those procedures are ‘‘impracticable, unnecessary, or contrary to the public interest.’’ 5 U.S.C. 553(b)(B). According to the legislative history of the APA, ‘‘unnecessary’’ means ‘‘unnecessary so far as the public is concerned, as would be the case if a minor or merely technical amendment in which the public is not particularly interested were involved.’’ Senate Report No. 752 at p. 200, 79th Cong. 1st Sess. (1945). As explained by the U.S. Court of Appeals for the D.C. Circuit, ‘‘when regulations merely restate the statute they implement, notice-and-comment procedures are unnecessary.’’ Gray Panthers Advocacy Comm. v. Sullivan, 936 F.2d 1284, 1291 (DC Cir. 1991). The Department determined that there was good cause to find that a pre-publication comment period was unnecessary for the IFR. The revisions set forth in the IFR to the previous regulations at 20 CFR part 641 codified statutory changes requiring little to no agency discretion or were technical amendments updating terminology or outdated references to WIA, which WIOA superseded. Therefore, the Department’s issuance of the IFR, with provision for postpromulgation public comment, was in accordance with sec. 553(b) of the APA. The 2016 OAA requires the Department to establish and implement the new SCSEP performance measures after consultation with stakeholders. OAA sec. 513(b)(2). The Department satisfied these statutory requirements when it solicited public input on the definitions and implementation of the statutory performance measures in April and May of 2017. On May 8, 2017, the Department sent an email to 4,529 stakeholders, inviting them to register for the consultation. The Department also informed stakeholders that they could submit written comments after the consultation. Effective date: This final rule is effective August 29, 2018. Compliance date: Grantees must report performance information under the measures implemented in the IFR and adopted without change in this final rule beginning July 1, 2018. This rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866. FOR FURTHER INFORMATION CONTACT: Amanda Ahlstrand, Administrator, Office of Workforce Investment, ahlstrand.amanda@dol.gov, 202–693– 3980. (This is not a toll-free number.) SUPPLEMENTARY INFORMATION: Preamble Table of Contents daltland on DSKBBV9HB2PROD with RULES I. Background II. Summary of Public Comments Received on the Interim Final Rule III. Section-by-Section Discussion of the Final Rule IV. Regulatory Flexibility Analysis, Executive Order 13272, Small Business Regulatory Enforcement Fairness Act V. Other Regulatory Considerations I. Background The SCSEP, authorized by title V of the OAA, is the only federally sponsored employment and training program targeted specifically to lowincome, older individuals who want to enter or re-enter the workforce. Participants must be 55 years of age or older, with incomes no more than 125 percent of the Federal poverty level. The program offers participants training at community service assignments in public and non-profit organizations and agencies so that they can gain on-the-job experience. The dual goals of the program are to promote useful opportunities in community service activities and also to move SCSEP participants into unsubsidized employment, where appropriate, so that they can achieve economic selfsufficiency. The 2016 OAA, Public Law 114–144 (Apr. 19, 2016), amended the statutory provisions authorizing SCSEP and requires the Department to implement the amendments to the SCSEP performance measures by December 31, 2017. See OAA sec. 513(d)(4) (42 U.S.C. 3056k(d)(4), as amended by 2016 OAA sec. 6(d)(4) 1). The Department met this statutory deadline when it published the IFR on December 1, 2017 (82 FR 56869). This final rule responds to 1 Section 6 of the 2016 OAA amended secs. 502– 518 of title V of the original (1965) OAA (42 U.S.C. 3056 et seq.). For ease of reference, this preamble will refer to the changes to title V made by the 2016 OAA by referring to the amended sections of the OAA, and will not continue to provide the citations to sec. 6 of the 2016 OAA. VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 Of the 394 registered participants, 273 attended the consultation on May 16, 2017. The IFR discussed at length the comments received during and after the consultation and, in response to some of those comments, made the following clarifications: • The changes in the IFR to the SCSEP performance measurement system reflect in large part an alignment of the SCSEP performance measures with the three employment outcome indicators mandated for WIOA core programs under WIOA sec. 116(b)(2)(A)(i)(I) through (III). In addition to these three WIOA employment outcome indicators of performance, SCSEP has three measures related to participation in the program: service level, hours of community service employment, and service to the most-in-need. These three measures are unique to SCSEP and the 2016 OAA amendments retained them unchanged. Although WIOA has several similar measures, these SCSEP measures are not directly applicable to WIOA. In addition, the WIOA primary indicators of performance include effectiveness in serving employers; the corresponding measure for SCSEP under the OAA, as discussed below at § 641.720, is not directly parallel because it includes participants and host agencies, as well as employers. • All the SCSEP measures will be incorporated into the Participant Individual Record Layout (PIRL, the WIOA performance reporting system), along with other aspects of SCSEP performance. • Although the 2016 OAA amendments require SCSEP to adopt several of WIOA’s primary indicators of performance, SCSEP is independent of WIOA, and SCSEP performance is not included in the WIOA State program or indicator scores. • While the Department is exploring a new case management system that may replace the SCSEP Performance and Results Quarterly Progress Report (SPARQ) system in whole or in part, grantees must continue using SPARQ until the Department informs them that a new system is available. • Like the current measures, the new performance measures apply to all grantees, including both State and national grantees. See Section I of the IFR for a more detailed discussion of the comments received during stakeholder consultation process. The 2016 OAA changes to the SCSEP performance measurement system reflect in large part an alignment of the SCSEP performance measures with those mandated for WIOA core E:\FR\FM\30JYR1.SGM 30JYR1 daltland on DSKBBV9HB2PROD with RULES Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations programs under WIOA sec. 116(b)(2)(A)(i). The WIOA performance measures were implemented in a joint final rule issued by the Departments of Labor and Education on August 19, 2016 (81 FR 55792) (Joint WIOA final rule), after notice-and-comment rulemaking, and are codified in 20 CFR part 677. The IFR, which this final rule finalizes, revised the SCSEP regulations at 20 CFR part 641, subpart G (Performance Accountability) to codify the revised SCSEP performance measures in 2016 OAA sec. 513, which in large part aligns the SCSEP performance measures with the WIOA performance measures. In addition, the IFR made (and this final rule carries forward) technical amendments to other subparts of part 641 to reflect 2016 OAA amendments that aligned the SCSEP program statutory language with WIOA, such as updating outdated terminology and outdated references to WIA, which WIOA superseded. Coordination between the SCSEP and the WIOA programs continues to be an important objective of the OAA. SCSEP is a required partner in the workforce development system (per WIOA sec. 121(b)(1)(B)(v)), and SCSEP is required to coordinate with the WIOA One-Stop delivery system (OAA sec. 511, 42 U.S.C. 3056i), such as by accepting each other’s assessments and Individual Employment Plans (IEPs) (OAA sec. 502(b)(3), 42 U.S.C. 3056(b)(3)). The underlying notion of the One-Stop delivery system is the coordination of programs, services, and governance structures, to ensure customer access to a seamless system of workforce development services. Although there are many similarities to the system established under WIA, there are also significant changes under WIOA that are intended to make substantial improvements to the public workforce delivery system. The Joint WIOA final rule requires partners to collaborate to support a seamless customer-focused service delivery network; requiring that programs and providers co-locate, coordinate, and integrate activities and information, so that the system as a whole is cohesive and accessible for individuals and employers alike. The Department remains committed to a system-wide continuous improvement approach grounded upon proven quality principles and practices. Although many of the SCSEP regulations remain unchanged from the 2010 SCSEP final rule (75 FR 53786; Sept. 1, 2010), the IFR codified the 2016 OAA revisions to the program that align senior employment services with the workforce development system under WIOA. In particular, the IFR aligned the VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 SCSEP performance measures related to employment and earnings with the performance measures established by WIOA to enhance consistency and coordination between the programs and ensure effective services for older Americans. Section III discusses in more detail the changes implemented by the IFR and finalized by this final rule. II. Summary of Public Comments Received on the Interim Final Rule The Department received comments from seven organizations and individuals. Four organizations (three national grantees and an association representing State grantees) submitted substantive comments that addressed issues within the scope of the IFR: Associates for Training and Development (A4TD), Vantage Aging (previously known as Mature Services), Senior Service America (SSAI), and the National Association of States United for Aging and Disabilities (NASUAD); the three individuals submitted nonsubstantive comments. The Department considered all substantive comments received as it developed this final rule. In Section III below, ‘‘Section-by-Section Discussion of the Final Rule,’’ the Department summarizes and discusses the input received from A4TD, Vantage Aging, and NASUAD. SSAI resubmitted the same comments it submitted on June 6, 2017, in response to the May 16, 2017 stakeholder webinar, prior to the publication of the IFR. Because the Department fully responded to the SSAI comments in the preamble to the IFR, the Department will not respond further in this preamble except to clarify some of its prior responses. Three comments from individuals described general dissatisfaction with the SCSEP program and its grantees based on either negative personal experiences or unfavorable anecdotal evidence. The preamble does not address these comments, as they were not in the scope of the rulemaking. III. Section-by-Section Discussion of the Final Rule The Department has made no changes to the regulatory text issued in the IFR. Non-Substantive Technical Amendments In addition to the changes made to part 641, subpart G (Performance Accountability) codifying the 2016 OAA statutory revisions as described more fully below, the IFR made nonsubstantive, technical amendments throughout all of part 641 to reflect the 2016 OAA amendments and to align the SCSEP program language with WIOA, PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 36409 such as updating outdated terminology and outdated references to WIA, which WIOA superseded. The Department did not receive any comments on these technical amendments and the final rule adopts them as issued in the IFR. The remainder of this section-bysection discussion describes in detail only the substantive subpart G revisions. Subpart G—Performance Accountability Throughout this subpart, the Department has revised the term ‘‘core indicator(s)’’ to ‘‘core measure(s)’’ to align the regulation with the 2016 OAA, specifically sec. 513(a), 42 U.S.C. 3056k(a). The amended statute also refers to ‘‘indicators.’’ However, because the statute uses the terms interchangeably, for consistency and to reduce the possibility of confusion, the Department uses only the term ‘‘measures’’ throughout this subpart. Other changes made to the sections of subpart G are described below. Section 641.700 What performance measures apply to Senior Community Service Employment Program grantees? The Department did not receive any comments on this section. The final rule adopts the provision as originally issued in the IFR. Section 641.710 How are the performance measures defined? This section of the rule provides definitions of the core measures. The IFR revised the core indicator (now ‘‘core measure’’) definitions contained in this section to align with the revised core measures set forth in § 641.700 of the IFR. As discussed below and in the IFR, the Department deleted the entirety of former paragraph (b) to remove the definitions for the former ‘‘additional indicators,’’ which the 2016 OAA removed. Thus, as an initial change, the IFR renumbered paragraphs (a)(1) through (6) to (a) through (g) (to include the definition for an added core measure, as discussed below). Employment Measures The IFR did not revise paragraph (a), renumbered from former paragraph (a)(1), which contains the definition for the first core measure for hours of community service employment as currently implemented. In paragraph (b), renumbered from former paragraph (a)(2), the IFR included a definition for the second performance measure, ‘‘percentage of project participants who are in unsubsidized employment during the second quarter after exit from the project.’’ The IFR defined this E:\FR\FM\30JYR1.SGM 30JYR1 daltland on DSKBBV9HB2PROD with RULES 36410 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations performance measure by the following formula: The number of participants who exited during the reporting period who are employed in unsubsidized employment during the second quarter after the exit quarter, divided by the number of participants who exited during the reporting period, multiplied by 100 so as to be reported as a percentage. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in Training and Employment Guidance Letter (TEGL) 10–16, Performance Accountability Guidance for Workforce Innovation and Opportunity Act (WIOA) Title I, Title II, Title III and Title IV Core Programs, published December 19, 2016. In paragraph (c), renumbered from former paragraph (a)(3), the IFR included a definition for the third performance measure, ‘‘percentage of project participants who are in unsubsidized employment during the fourth quarter after exit from the project.’’ This performance measure is defined by the following formula: The number of participants who exited during the reporting period who are employed in unsubsidized employment during the fourth quarter after the exit quarter, divided by the number of participants who exited during the reporting period, multiplied by 100 so as to be reported as a percentage. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in TEGL 10–16. In response to the IFR, the Department received one public comment relating to the employment measures set forth in this section. Specifically, with regard to the fourth quarter unsubsidized employment measure at paragraph (c), the commenter expressed concern that the new fourth quarter unsubsidized employment measure, while simplifying the current measure for employment retention, will require grantees to follow participants for at least an entire year even if the participants did not leave the program for unsubsidized employment. The commenter contended that this core performance measure will place a significant burden on grantees while producing little increase in performance data. The commenter is correct that the new measure is no longer conditioned on a participant’s having been employed in the first quarter after the exit quarter (as the current core measure for employment retention and the additional measure for retention at 1 year require) and, therefore, includes in the pool every participant who exits from SCSEP unless the participant has VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 one of the exclusions from exit. The Department, however, declines to revise the definition for this core measure. Once wage records are available to all grantees, nearly all data for this measure will be gathered without the need for follow-up, and there will be little additional burden on the grantees. See discussion of the use of wage records at § 641.720. Until that time, grantees should first focus their follow-up efforts on those participants who leave the program for unsubsidized employment or who are employed in the second quarter after the exit quarter. Grantees should then follow participants who did not have employment at exit or in the second quarter after exit but who grantees have reason to believe might become employed thereafter. The Department will provide technical assistance and guidance on the new timing and reporting requirements for § 641.710(b) through (d), which are hereinafter called the ‘‘three new employment outcome measures’’. Although the new SCSEP measure of effectiveness parallels the language of the WIOA measure, it differs because it also measures the effectiveness in serving participants and host agencies, as well as employers. The WIOA approach to the measure, which is being piloted until 2019, does not have obvious application to SCSEP’s other two customer groups. As a result, for the SCSEP measure, the Department has decided to continue surveying all three customer groups to assess the effectiveness of the services received as an interim measure at least until the WIOA pilot is complete and a WIOA measure is defined in final form. By using the same definition as that of the current customer satisfaction measure during this period, the Department will not require SCSEP customers to change their current practices or take on any additional burden. Effectiveness Measure Other Changes To conform to the changes outlined above, the IFR renumbered former paragraph (a)(5) to (f). The IFR also renumbered former paragraph (a)(6)(i) through (xiii) to (g)(1) through (13). Renumbered paragraphs (f) and (g) correspond to the sixth and seventh SCSEP performance measures, the definitions of which were unchanged by the IFR. The Department received no comments in response to these technical changes and they are incorporated into this final rule without change. The 2016 OAA removed the additional indicators of performance previously established in sec. 513(b)(2) of the 2006 OAA. Therefore, the IFR deleted former paragraphs (b)(1) through (3) that contained definitions for the additional indicators. The Department received no comments in response to these deletions. In addition to the regulatory text changes discussed above, the IFR made various non-substantive changes to the regulations for purposes of correcting typographical errors and improving clarity. The IFR added a definition in paragraph (e) for the fifth performance measure, ‘‘effectiveness in serving employers, host agencies, and project participants.’’ While this definition is similar to the definition used for this indicator under the 2006 OAA, when it was an additional indicator, the 2016 OAA revised the definition so that it focuses more specifically on effectiveness rather than satisfaction in general. The Department received no comments in response to this definition. The final rule adopts the provision as originally issued in the IFR. Section 641.720 How will the Department and grantees initially determine and then adjust expected levels of the core performance measures? The Department received several comments related to this provision. The comments are addressed below in the ‘‘Employment Outcome Measure’’ heading. The IFR made substantial revisions to this section to align with the 2016 OAA, which in large part mirrors the process for establishing the expected performance levels required by WIOA Earnings Measure In paragraph (d), renumbered from former paragraph (a)(4), the IFR included a definition for the fourth performance measure, ‘‘median earnings of project participants who are in unsubsidized employment during the second quarter after exit from the project.’’ This performance measure is defined by the following formula: For all participants who exited and are in unsubsidized employment during the second quarter after the exit quarter, the wage that is at the midpoint (of all the wages) between the highest and lowest wage earned in the second quarter after the exit quarter. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in TEGL 10–16. The Department did not receive any comments relating to paragraph (d). The final rule adopts the provision as originally issued in the IFR. PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 E:\FR\FM\30JYR1.SGM 30JYR1 daltland on DSKBBV9HB2PROD with RULES Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations for the title I core programs, as implemented in 20 CFR 677.170. The IFR revised paragraph (a), which requires agreement between the grantee and the Department for expected levels of performance for the first 2 program years of the grant, to mirror the statutory language in 2016 OAA sec. 513(a)(2)(B) and (C)(i) and align with WIOA sec. 116(b)(3)(A)(iv)(I). Specifically, paragraph (a) of the IFR stated that each grantee must reach agreement with the Department on levels of performance for each measure listed in § 641.700 for each of the first 2 program years covered by the grant agreement. In reaching the agreement, the grantee and the Department must take into account the expected levels of performance proposed by the grantee and the factors described in paragraph (c) of this section. This paragraph also stated that the levels agreed to will be considered to be the expected levels of performance for the grantee for such program years, and the Department may not award funds under the grant until such agreement is reached. Lastly, this paragraph stated that, at the conclusion of negotiations concerning the performance levels with all grantees, the Department would make available for public review the final negotiated expected levels of performance for each grantee, including any comments submitted by the grantee regarding the grantee’s satisfaction with the negotiated levels. The IFR explained that the Department considers PY 2016 and PY 2017 to be the first 2 program years under the current SCSEP grants (i.e., the four-year grant cycle that began in PY 2016). For national grantees, these were the first 2 program years following the last (PY 2016) grant competition. For State grantees, these were the first 2 program years of the current (PY 2016) SCSEP State Plans. The IFR also revised paragraph (b), which required agreement for expected levels of performance for the third and fourth program years of the grant, to mirror the statutory language provided in 2016 OAA sec. 513(a)(2)(B) and (C)(ii) and to align with WIOA sec. 116(b)(3)(A)(iv)(II). The IFR explained, in keeping with paragraph (a) above, that the Department considers PY 2018 and PY 2019 to be the third and fourth program years of the current (PY 2016) SCSEP grant agreements. Specifically, paragraph (b) stated that each grantee must reach agreement with the Department, prior to the third program year covered by the grant agreement, on levels of performance for each measure listed in § 641.700, for each of the third and fourth program years of the grant. VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 This paragraph stated that, in reaching the agreement, the grantee and the Department must take into account the expected levels proposed by the grantee and the factors described in paragraph (c) of this section. This paragraph also stated that the levels agreed to will be considered to be the expected levels of performance for the grantee for those program years. Lastly, like the requirement in paragraph (a), this paragraph stated that, at the conclusion of negotiations concerning the performance levels with all grantees, the Department would make available for public review the final negotiated expected levels of performance for each grantee, including any comments submitted by the grantee regarding the grantee’s satisfaction with the negotiated levels. The IFR added a new paragraph (c), ‘‘Factors,’’ to require that the negotiated levels of performance must be based on the three factors listed in paragraphs (c)(1) through (3), as required by OAA sec. 513(a)(2)(D) and to align with WIOA sec. 116(b)(3)(A)(v). Paragraph (c)(1) of the IFR stated that the negotiated levels must take into account how a grantee’s levels of performance compare with the expected levels of performance established for other grantees. See OAA sec. 513(a)(2)(D)(i) and WIOA sec. 116(b)(3)(A)(v)(I). Paragraph (c)(2) stated that the negotiated levels must be adjusted using an objective statistical model based on the model established by the Department of Labor with the Department of Education in accordance with WIOA sec. 116(b)(3)(A)(viii) and implemented in § 677.170(c). See 29 U.S.C. 3141(b)(3)(A)(viii), OAA sec. 513(a)(2)(D)(ii), and WIOA sec. 116(b)(3)(A)(v)(II). The IFR explained that the objective statistical adjustment model is to account for actual economic conditions and characteristics of participants, including the factors required by WIOA sec. 116(b)(3)(A)(v)(II). Paragraph (c)(3) stated that the negotiated levels must take into account the extent to which the levels involved promote continuous improvement in performance accountability on the core measures and ensure optimal return on the investment of Federal funds. See OAA sec. 513(a)(2)(D)(iii) and WIOA sec. 116(b)(3)(A)(v)(III). The Department stated it would provide the model to grantees prior to the first negotiations under the new performance measures. The initial revision to the adjustment model was in fact presented to the grantees in a webinar held in May 2018, PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 36411 prior to the start of the negotiation period for PY 2018 and PY 2019. In paragraph (d), the IFR revised the adjustment requirements contained in former paragraph (b). The IFR replaced the adjustment factors specified in former (b)(1) through (3) with the requirement that the Department will, in accordance with the objective statistical model developed pursuant to paragraph (c)(2), adjust the expected levels of performance for a program year for grantees to reflect the actual economic conditions and characteristics of participants in the corresponding projects during such program year. The Department made these revisions in the IFR to align the pertinent regulations with OAA sec. 513(a)(2)(E). For consistency with the 2016 OAA, the IFR removed the language in paragraphs (a)(1) through (3) of § 641.720 that describes the negotiation process in detail. However, as explained in the IFR, the negotiation process that the Department intends to use under these new performance measures is similar to the process that was used prior to the IFR, and includes similar opportunities for input from the grantees: • In the spring of 2018, the Department analyzed grantees’ baseline performance and issued proposed targets and goals for the next 2 program years, PY 2018 and PY 2019, based on the new adjustment factors. • If a grantee disagreed with those targets and goals, it was allowed to propose its own goals and request to negotiate. No grantee chose to negotiate revisions to the proposed targets and goals. • Prior to the negotiation, the grantee was required to provide the Department with the data on which the grantee based its proposed goals. • The grantee and the Department must reach agreement before funds for PY 2018 and PY 2019 can be approved; the agreed-upon goals will be the expected levels of performance upon which the annual evaluation of grantee performance will be based. If the grantee and the Department fail to reach agreement, no funds may be released. • At the conclusion of the negotiation, the grantee may submit comments regarding the grantee’s satisfaction with the negotiated levels of performance, which the Department will publish, along with the expected levels of performance. • At the time of the annual evaluation of grantee performance, the expected levels of performance will be adjusted a second time using the latest available adjustment data. The Department will base this evaluation on the newly E:\FR\FM\30JYR1.SGM 30JYR1 daltland on DSKBBV9HB2PROD with RULES 36412 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations adjusted levels of performance. See preamble discussion of § 641.740. • The same process will be followed for subsequent 2-year periods. In addition to the regulatory text changes discussed above, the IFR made various non-substantive changes for purposes of correcting typographical errors and improving clarity. Those changes have been retained in this final rule. The new measures implemented by the IFR became effective on January 2, 2018, and the new measures were used during the second half of PY 2017, to negotiate the targets and goals for PYs 2018 and 2019. Performance under the PY 2018 targets and goals will begin to be reported starting July 1, 2018. The SCSEP QPR for PY 2017 will be based on the measures that were in place prior to the IFR, and the QPRs for PY 2018, will be based on the measures established in the IFR (and adopted without change in this final rule). SCSEP participants who exit during PY 2017 when goals based on the prior measures were still in effect will have their performance reported under the old measures for PY 2017. For this same cohort of exiters, reporting for the core employment outcome measures would also take place throughout PY 2018, under the new measures set forth in the IFR and adopted without change in this final rule, and would be reflected in the grantees’ PY 2018 QPRs. For example, a participant who exits in Quarter 3 of PY 2017 will be included in the previous entered employment measure for Quarter 4 of PY 2017; the grantee will also report this participant in the final rule’s new measure of employment in the second quarter after exit in Quarter 1 of PY 2018. Since the underlying data required for the new measures that will be reported in PY 2018 are the same data required for the prior measures, grantees will have to follow different timing rules for the collection of data in PY 2018, but they will not be required to collect any new or additional data beyond the data they would have reported under the old measures. The Department will provide technical assistance and guidance on the new timing and reporting requirements. As with the core measures in use prior to the IFR, the grantees will collect data for the additional measures not carried forward in the IFR and now this final rule throughout PY 2017, and the final QPR for PY 2017 will be the last report of the additional measures. Employment Outcome Measures The Department received several comments relating to § 641.720, which are summarized below. The Department VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 considered all of these comments as it finalized the IFR; our responses to each comment are set forth below. This final rule, however, adopts this provision as it was issued in the IFR for reasons discussed below. A commenter asked for clarification of the calculation of two of the measures: Whether exclusions from exit will still be applied and whether the year-to-date measure for median earnings will be based on cumulative data or an average of the quarterly results. As the Department stated in the IFR, as part of its adoption of the WIA common measures in PY 2007, SCSEP has been following the WIA exclusions. With the 2016 OAA’s adoption of the measures consistent with the WIOA primary indicators of performance, SCSEP will examine the revised WIOA exclusions and will issue revised guidance as appropriate. The calculation of the year-to-date performance will continue to be based on cumulative data, as it has always been. The Department will issue guidance on the calculations and timing rules for all the new measures. One commenter expressed concern that while achieving unsubsidized employment is a key goal of the SCSEP program, in many States and localities there remains a significant gap between the unsubsidized income needed to make ends meet and the possible reduction of public benefits due to achieving employment; that pursuit of improved performance under the new employment outcome measures could result in worsening the quality of life of SCSEP participants rather than improving it; and that the Department should work with States to identify mechanisms to ensure that every participant’s life is improved by participation in the SCSEP program. The commenter recommended that the Department allow States to use additional economic factors such as housing availability and other issues related to affordability and cost of living as a part of their outcome measures. The commenter also recommended that the Department work with partners in the Federal Government to evaluate options for a gradual reduction in benefits for individuals as they leave SCSEP instead of the current benefits cliff. The Department agrees that SCSEP is designed to improve participants’ quality of life, including selfsufficiency. In fact, data from the participant customer satisfaction surveys consistently confirm that the program does effectively improve participants’ physical, emotional, and financial quality of life, and that participants who exit from the program PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 are satisfied with SCSEP, even if they do not achieve unsubsidized employment. Section 641.535(a)(3)(iii) of the SCSEP regulations (a section not affected by the IFR or this final rule) recognizes that unsubsidized employment may not be an appropriate goal for all participants and that if it becomes apparent that unsubsidized employment is not feasible, the grantee must modify the participant’s IEP and assist the participant with other approaches to self-sufficiency, including transition to other services and programs. The Department notes also that the goals for the employment outcomes have always been set at a level that recognizes that not all participants will obtain unsubsidized employment and that because seniors generally work part-time hours at lower pay levels, the goals for earnings have also been set at realistic levels. However, the Department disagrees that SCSEP participants in general cannot improve their financial condition through unsubsidized employment. If grantees do their best to help participants find jobs at their highest wage and skill level, many participants can and do achieve economic self-sufficiency. Finally, the Department has no authority to revise the employment outcome measures required by the 2016 OAA and implemented by the IFR and this final rule. The Department will work with other Federal agencies to explore whether Federal benefits can be reduced gradually when SCSEP participants exit the program for unsubsidized employment. The Department will also consider adding additional economic factors to the statistical adjustment model as suggested by this commenter and other commenters. See discussion of the statistical adjustment model below. Use of Unemployment Insurance Wage Records Citing the additional burden the new measures place on grantees to conduct follow-ups and the incompleteness and inaccuracy of case management followup, all four commenters urged the Department to allow the use of unemployment insurance wage records to obtain employment outcome data. One commenter also urged the Department to phase out case management follow-up once access to wage records is available. As the commenters recognized and as stated in the IFR, the Department is investigating access to wage records and hopes to implement aggregate wage record matching for all grantees. However, since wage matching does not provide data on all participants in E:\FR\FM\30JYR1.SGM 30JYR1 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations daltland on DSKBBV9HB2PROD with RULES unsubsidized employment, some supplemental use of case management follow-up would still be required. In addition, the SCSEP program model requires that grantees remain in touch with participants and employers during the four quarters after exit in order to help resolve any problems that may arise and to provide supportive services needed to help participants obtain and retain unsubsidized employment. The Department will inform the grantees as soon as it ascertains when wage matching will be available to SCSEP and will consult with the grantees about the extent to which follow-up will still be required for both performance reporting and case management. In the meantime, as stated in the IFR, until the access to wage records occurs, all grantees must continue using case management follow-up. Using different methods of data collection would compromise the consistency of the performance measures and would potentially provide an unfair advantage to those grantees with access to wage records. In the meantime, the Department will review the standards for case management follow-up as set forth in various guidance materials, will confer with grantees about the changes in procedures desired, and will issue revised guidance if appropriate. Negotiation Process One commenter provided several comments relating to the negotiation process, including several concerns about the current process. The commenter described challenges that States have reported facing in negotiations on performance levels, including lack of interest from Federal partners, inconsistency regarding negotiations on a regional basis, delay resulting from confusion about what data to provide, and time pressures. The commenter requested that the Department issue guidance to States regarding the types of data the Department would take into account when negotiating performance levels. This commenter also requested that the Department work with other Federal agencies, including the Department of Health and Human Services and the Department of Agriculture, to provide guidance regarding data-sharing between programs such as SNAP, TANF, Unemployment Insurance, and the SCSEP program. Lastly, this commenter recommended that the Department allow for adjustments in the timeline for negotiations and allow for a certain percentage of funds to be released prior to agreement on the goals and/or to provide funds on an interim VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 contingency basis while negotiations are ongoing. Although the OAA provides that grantees may comment on the negotiation process and that the Department will publish such comments, very few grantees have commented at all since PY 2007, and no grantees have expressed the concerns raised by the commenter. The Department notes that it has been providing annual teleconferences and webinars on the negotiation process each year since PY 2007, and that, during the negotiations themselves, the Department and its subject matter experts make every effort to identify and help grantees locate data that may be useful to them in their negotiations. The Department thus welcomes the commenter’s suggestions for improving the negotiation process and will take them under consideration to the extent it has the authority to do so. The Department agrees that all Federal regions should be engaged in the process and that grantees should be given the support they require to participate meaningfully. The Department will work with the Federal Project Officers to ensure that all grantees are aware of their right to negotiate their goals and have a full opportunity to do so. The Department will also ensure that grantees have information about relevant data sources. As the commenter recognized, however, the requirement to reach agreement on negotiated levels of performance before the Department may release grant funds is contained in the OAA. The Department has no authority to waive or modify that requirement. The Department recognizes that the time period for negotiation is condensed and that negotiations occur during the same time that grantees are preparing their annual grant applications. The need to obtain the most recent baseline data and economic information to use in the goal setting and adjustment process necessitates this timing. The Department shares the commenter’s desire to allow for a more relaxed schedule and will explore the possibility of using a more flexible baseline once the new performance measures have been in place long enough for a new baseline to emerge. Indicators of Effectiveness One commenter who addressed the new measure of effectiveness in serving SCSEP’s three customer groups pointed out that ‘‘effectiveness’’ is more difficult to measure than ‘‘satisfaction’’, which for this commenter is a more concrete measure. The commenter expressed uncertainty about how well the WIOA PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 36413 pilot project to explore measures of effectiveness will translate to SCSEP. This commenter expressed appreciation for the Department’s continuing to utilize the current customer satisfaction measure until a more detailed and rigorous effectiveness measure can be tested and developed. The commenter recommended that the Department create a stakeholder workgroup to collaborate on evaluating the applicability of the WIOA pilot measures to SCSEP, as well as on the modification or development of new measures of effectiveness. A different commenter made a similar recommendation about involving grantees in the exploration and adoption of pilot measures of effectiveness in serving employers. Another commenter asked whether there would be any changes in the administration, substance, or timeline for the customer satisfaction surveys during the interim period while the WIOA measure of effectiveness is not yet final. The Department welcomes the suggestions for grantee involvement and reiterates that it will continue to use the current customer satisfaction surveys at least until the WIOA pilot is complete and the new WIOA effectiveness measure is finalized. During this interim period, the Department will explore with grantees, and with its three customer groups, options for best measuring the effectiveness of SCSEP’s services, including the suggestions made by the commenters. The Department will also explore ways to improve the efficiency of the current customer surveys (including the use of online surveys and changes to the administration of the employer survey) and will examine what, if any, new or revised questions would support an index of effectiveness as an alternative to the current index of satisfaction. Until the Office of Management and Budget (OMB) approves any proposed changes to the content or methods of administration of the surveys, the currently approved surveys will continue to be administered as approved. Statistical Adjustment Model One commenter had several comments that relate to the statistical adjustment model, suggesting that the Department recognize differences between employment prospects for an individual residing in a metro or urban area versus one in a rural or frontier area, which would include allowing for different regional measures within the same State; the Department should consider other factors that influence E:\FR\FM\30JYR1.SGM 30JYR1 36414 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations performance, such as access to affordable housing, transportation, and the interplay of various public benefits programs with one another; and whenever possible, the Department should use data on older workers in its calculations. This includes when determining local and regional employment and unemployment figures, among others. As the Department stated it would do in the preamble to the IFR, the Department is re-examining its current adjustment model to determine if additional aspects of the WIOA model should be incorporated into the SCSEP model or if other changes are appropriate. This consideration includes accounting for the percentage of participants who reside in rural areas, as well as examining an adjustment for the percentage of participants who are ex-offenders (as suggested by a comment made by SSAI). The Department will also explore whether it can obtain current economic data on the senior population as opposed to the general population. The adjustment model applied to the PY 2018 and PY 2019 proposed targets and goals included five new participant characteristics (including residing in a rural area) and one new economic factor (average weekly wages). The Department notes that to the greatest extent possible, it uses countylevel data in its adjustment model, thereby permitting the adjustment factors to be tailored to the specific service area of each grantee. This approach accounts for regional differences within each grantee’s service area, as requested by the commenter. In applying the revised adjustment model, the Department used economic data for the new service areas in which the grantees were located at the time of the goal setting for PY 2018 and PY 2019. See also discussion of baseline in § 641.730. daltland on DSKBBV9HB2PROD with RULES Section 641.730 How will the Department assist grantees in the transition to the new core performance measures? Although the Department received a few public comments relating to this provision, which are discussed below, the final rule adopts this provision as it was issued in the IFR. The IFR made several changes in this section to update the Department’s transition assistance plans to correspond with the 2016 OAA. As a non-substantive change, the IFR deleted the designation of paragraph (a) and its title ‘‘General transition provision,’’ because the IFR deleted paragraph (b), VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 as discussed below. This section was, thus, left with only two sentences. The first sentence as revised by the IFR stated that, as soon as practicable after January 2, 2018, the Department would determine whether a SCSEP grantee’s performance under the measures in effect prior to January 2, 2018, would have met the expected levels of performance for PY 2018. The second sentence as revised by the IFR stated that if the Department determines that a grantee would have failed to meet those expected levels of performance, then the Department would provide technical assistance to help the grantee to eventually meet the expected levels of performance under the measures in § 641.700, as those measures were revised by the IFR. The IFR explained that the Department would only make the above determination for the three new employment outcome measures, defined in § 641.710(b) through (d) of the IFR, since no transition is required for the remaining four core measures (three are unchanged, and for the fourth, the ‘‘indicators of effectiveness in serving employers, host agencies, and participants,’’ the IFR stated that the Department would use the same customer satisfaction measure that was used prior to the IFR). In making the determination, the IFR indicated that the Department intended to examine all relevant data, as feasible, in order to provide a crosswalk between the existing measures and the measures implemented in the IFR and to develop a new baseline from which to begin the development of goals for PY 2018 and PY 2019. The IFR promised to provide the analysis to all grantees when it was completed. As set forth above, the Department completed the analysis and cross-walk and provided it to the grantees prior to the development of proposed targets and goals for PY 2018 and PY 2019. As noted above, the IFR removed paragraph (b) from § 641.730, which provided that PY 2007 would be treated as a baseline year for the most-in-need indicator so that grantees and the Department may collect sufficient data to set a meaningful goal for the measure for PY 2008. The IFR explained that since this provision included dates that have already passed, and given that the Department has documented information on this measure, this provision is no longer required. Therefore, the IFR deleted it from this section. PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 Baseline Year for New Employment Outcome Measures Some comments from some of the organizations that responded to the IFR, like comments received from the stakeholder webinar, expressed concern that the new employment outcome measures are substantially different from the current SCSEP outcome measures and that there is no baseline upon which goals for the new measures can be set. For this reason, some comments suggested that the Department establish a pilot period for the new employment measures during which there would not be any expected levels of performance. One commenter noted that, as a result of the 2016 national grantee competition, many national grantees operate in service areas different from their prior service areas and that the economic conditions in the new area are different as well. This commenter urged the Department to use a valid baseline rather than old data in establishing goals for the new measures. The Department recognizes that all three of the new outcome measures use different calculations from the measures that were in place prior to the IFR, and that it will take time to establish a reliable baseline to use in setting goals for these measures. As stated in the preamble to the IFR, to help determine how performance under the prior measures relates to performance under the new measures, the Department reanalyzed prior grantee performance data reported under the prior measures using the calculations required for the new measures and created a crosswalk between the two sets of measures. Because the recalculation proved to be an inadequate basis for setting the PY 2018 and PY 2019 grantee-expected levels of performance, the Department decided to treat PYs 2018 and 2019 as baseline years for which targets, rather than expected levels of performance, are assigned, and has reserved the right to renegotiate the PY 2019 targets based on actual performance in PY 2018. Moreover, in developing the proposed goals, the Department used the grantees’ most recent, reliable baseline performance. Where the recent baseline data were not reliable, the Department used a longer, historical baseline. Use of the Participant Individual Record Layout (PIRL) and New Case Management System One commenter requested that the Department offer training on using the PIRL system and raised several questions related to the transition from SPARQ to PIRL, including whether E:\FR\FM\30JYR1.SGM 30JYR1 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations SPARQ data will migrate to PIRL and whether grantees should anticipate a period of dual entry into both systems. The comment further asked that the Department align its technical documentation with the PIRL data field specifications so that grantees may adjust their internal systems to support the new information codes and that the Department provide advanced notice of the new requirements and training on the new system. The Department has announced that it is developing a new case management system that is designed to replace SPARQ in whole or in part. The Department anticipates that SPARQ data will be migrated to the new system and that grantees will continue to use SPARQ for exited case records until the conclusion of the reporting of the PY 2017 performance data on or around September 30, 2018. Since grantees will report the new performance measures beginning July 1, 2018, SPARQ is being reconfigured to support the new measures; grantees will continue using SPARQ for at least the first quarter of PY 2018. The Department anticipates that grantees will begin using the new system for active cases in the second or third quarter of PY 2018. The Department has aligned SPARQ data collection for the case management system with the PIRL. The Department will provide details of the new case management system and the transition requirements to the grantees as soon as possible and does anticipate providing training to grantees. Section 641.740 How will the Department determine whether a grantee fails, meets, or exceeds the expected levels of performance and what will be the consequences of failing to meet expected levels of performance? The Department did not receive any comments on this section. The final rule adopts the provision as it was issued in the IFR. daltland on DSKBBV9HB2PROD with RULES Section 641.750 Will there be performance-related incentives? The Department did not receive any comments on this section. The final rule adopts the provision as it was issued in the IFR. IV. Regulatory Flexibility Analysis, Executive Order 13272, Small Business Regulatory Enforcement Fairness Act The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., requires the Department to evaluate the economic impact of this rule with regard to small entities. The RFA defines small entities to include small businesses, small organizations including not-for-profit VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 organizations, and small governmental jurisdictions. The Department must determine whether the rule imposes a significant economic impact on a substantial number of such small entities. There are 75 SCSEP grantees; 50 of these are States and are not small entities as defined by the RFA. Six grantees are governmental jurisdictions other than States (four grantees are territories such as Guam; one grantee is Washington, DC; and another grantee is Puerto Rico). Governmental jurisdictions must have a population of less than 50,000 to qualify as a small entity for RFA purposes and the population of these 6 SCSEP grantees each exceeds 50,000. The remaining 19 grantees are non-profit organizations, which includes some large, national non-profit organizations. The Department has determined that this final rule will impose no additional burden on small entities affected. Since the alignment with WIOA involved only definitions, the grantees are not required to collect any additional information that may cause a burden increase. In addition, the SCSEP program funds provided to grantees cover all such costs. The Departments certifies that this final rule does not impose a significant economic impact on a substantial number of small entities. V. Other Regulatory Considerations Executive Order 12866 Under Executive Order (E.O.) 12866, OMB’s Office of Information and Regulatory Affairs determines whether a regulatory action is significant and, therefore, subject to the requirements of the Executive Order and review by OMB. 58 FR 51735 (Oct. 4, 1993). Section 3(f) of E.O. 12866 defines a ‘‘significant regulatory action’’ as an action that is likely to result in a rule that: (1) Has an annual effect on the economy of $100 million or more, or adversely affects in a material way a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as economically significant); (2) creates serious inconsistency or otherwise interferes with an action taken or planned by another agency; (3) materially alters the budgetary impacts of entitlement grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raises novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the Executive Order. Id. OMB has determined that this PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 36415 final rule is not a ‘‘significant regulatory action’’ under sec. 3(f) of E.O. 12866. This rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866. E.O. 13563 directs agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; it is tailored to impose the least burden on society, consistent with achieving the regulatory objectives; and in choosing among alternative regulatory approaches, the agency has selected those approaches that maximize net benefits. E.O. 13563 recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts. OMB declined review of this final rule because it is not a significant regulatory action. Paperwork Reduction Act The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., include minimizing the paperwork burden on affected entities. A Federal agency may not conduct or sponsor a collection of information unless OMB approves it under the PRA and it 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). OMB has approved the information collections contained in this final rule. See ICR Reference Number 201802–1205–003. The information collection is summarized as follows. DOL-Only Performance Accountability, Information, and Reporting System Agency: DOL–ETA. Title of Collection: DOL-Only Performance Accountability, Information, and Reporting System. Type of Review: Revision. OMB Control Number: 1205–0521. Affected Public: State, Local, and Tribal Governments; Individuals or Households; and Private Sector— businesses or other for-profits and notfor-profit institutions. Obligation to Respond: Required to Obtain or Retain Benefits. E:\FR\FM\30JYR1.SGM 30JYR1 36416 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations Estimated Total Annual Respondents: 17,532,542. Estimated Total Annual Responses: 35,064,970. Estimated Total Annual Burden Hours: 8,938,029. Estimated Total Annual Other Burden Costs: $6,791,395. Regulations sections: § 684.420, § 684.610, § 684.700, § 684.800, § 685.210, § 685.400, § 688.420, § 688.610. § 641.700, § 641.710, § 641.720, § 641.730, § 641.740, § 641.750. Unfunded Mandates Reform Act For purposes of the Unfunded Mandates Reform Act of 1995, this rule does not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments in the aggregate of more than $100 million, or increased expenditures by the private sector of more than $100 million. Executive Order 13132 The Department has reviewed this rule in accordance with E.O. 13132 regarding federalism and has determined that it does not have ‘‘federalism implications.’’ The rule does not ‘‘have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.’’ This final rule defines and implements performance measures for the SCSEP and while States are SCSEP grantees, this rule merely makes changes to data collection processes that are ongoing. Requiring State grantees to implement these changes does not constitute a ‘‘substantial direct effect’’ on the States, nor will it alter the relationship or responsibilities between the Federal and State governments. daltland on DSKBBV9HB2PROD with RULES Executive Order 13045 E.O. 13045 concerns the protection of children from environmental health risks and safety risks. This rule defines and details the performance measures used by the SCSEP, a program for older Americans, and has no impact on safety or health risks to children. Executive Order 13175 E.O. 13175 addresses the unique relationship between the Federal Government and Indian tribal governments. The order requires Federal agencies to take certain actions when regulations have ‘‘tribal implications.’’ Required actions include consulting with Tribal Governments prior to promulgating a regulation with tribal VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 implications and preparing a tribal impact statement. The order defines regulations as having ‘‘tribal implications’’ when they have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. The Department has reviewed this final rule and concludes that it does not have tribal implications. While some tribes may be recipients of national SCSEP grantees, this rule will not have a substantial direct effect on those tribes because, as outlined in the RFA section of the preamble above, there are only small cost increases associated with implementing this regulation. This regulation does not affect the relationship between the Federal Government and the tribes, nor does it affect the distribution of power and responsibilities between the Federal Government and Tribal Governments. Accordingly, we conclude that this rule does not have tribal implications for the purposes of E.O. 13175. Environmental Impact Assessment The Department has reviewed this rule in accordance with the requirements of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), the regulations of the Council on Environmental Quality (40 CFR part 1500), and the Department’s NEPA procedures (29 CFR part 11). The rule will not have a significant impact on the quality of the human environment and, thus, the Department has not prepared an environmental assessment or an environmental impact statement. Assessment of Federal Regulations and Policies on Families Section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105–277, 112 Stat. 2681), requires the Department to assess the impact of this rule on family well-being. A rule that is determined to have a negative effect on families must be supported with an adequate rationale. The Department has assessed this rule and determines that it will not have a negative effect on families. Indeed, the SCSEP strengthens families by providing job training and support services to low-income older Americans so that they can obtain fruitful employment and enjoy increased economic self-sufficiency. PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 Privacy Act The Privacy Act of 1974, 5 U.S.C. 552a, provides safeguards to individuals concerning their personal information that the Government collects. The Act requires certain actions by an agency that collects information on individuals when that information contains personally identifiable information such as Social Security Numbers (SSNs) or names. Because SCSEP participant records are maintained by SSN, the Act applies here. A key concern is for the protection of participant SSNs. Grantees must collect the SSN in order to pay participants properly for their community service work in host agencies. When grantees send participant files to the Department for aggregation, the transmittal is protected by secure encryption. When participant files are retrieved within the internet-based SCSEP data management system of SPARQ, only the last four digits of the SSN are displayed. Any information that is shared or made public is aggregated by grantee and does not reveal personal information on specific individuals. The Department works diligently to ensure the highest level of security whenever personally identifiable information is stored or transmitted. All contractors that have access to individually identifying information are required to provide assurances that they will respect and protect the confidentiality of the data. ETA’s Office of Performance and Technology has been an active participant in the development and approval of data security measures—especially as they apply to SPARQ. In addition to the above, the Department provides a Privacy Act Statement to grantees for distribution to all participants. The Department advised grantees of the requirement in ETA’s Older Worker Bulletin OWB–04– 06. Participants receive this information when they meet with a caseworker or intake counselor. When the Department monitors the programs, implementation of this term is included in the review. Executive Order 12630 This 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. Executive Order 12988 This regulation has been drafted and reviewed in accordance with E.O. 12988, Civil Justice Reform, and will not unduly burden the Federal court E:\FR\FM\30JYR1.SGM 30JYR1 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Rules and Regulations system. The Department has written the regulation so as to minimize litigation and provide a clear legal standard for affected conduct, and the Department has reviewed the regulation carefully to eliminate drafting errors and ambiguities. 1.170A–14(j), 1.170A–15(h), 1.170A– 16(g), 1.170A–17(c), 1.170A–18(d), 1.664–1(f), and 1.6050L–1(h). FOR FURTHER INFORMATION CONTACT: Charles Gorham at (202) 317–7003 (not a toll-free number). SUPPLEMENTARY INFORMATION: Executive Order 13211 Paperwork Reduction Act This rule is not subject to E.O. 13211, because it will not have a significant adverse effect on the supply, distribution, or use of energy. 26 CFR Parts 1 and 602 The collections of information contained in these final regulations have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545– 1953. The collections of information in these final regulations are in §§ 1.170A– 15(a) and (d)(1); 1.170A–16(a), (b), (c), (d), (e), and (f); and 1.170A–18(a)(2) and (b). These collections of information are required to obtain a benefit and will enable the IRS to determine if a taxpayer is entitled to a claimed deduction for a charitable contribution. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and return information are confidential, as required by section 6103. [TD 9836] Background RIN 1545–BH62 This document contains amendments to the Income Tax Regulations, 26 CFR parts 1 and 602, relating to substantiating and reporting deductions for charitable contributions under section 170 of the Internal Revenue Code. These final regulations reflect amendments to section 170 made by section 883 of the American Jobs Creation Act of 2004, Public Law 108– 357 (118 Stat. 1418, 1631) (Jobs Act), and sections 1216, 1217, and 1219 of the Pension Protection Act of 2006, Public Law 109–280 (120 Stat. 780, 1079–83) (PPA), which added new rules for substantiating charitable contributions. The final regulations also update crossreferences to the section 170 regulations in other regulations. Section 170(f)(8), which has been in the Code since 1993, provides that no deduction shall be allowed for any contribution of $250 or more, cash or noncash, unless the taxpayer substantiates the contribution with a contemporaneous written acknowledgment of the contribution by Plain Language The Department drafted this IFR in plain language. List of Subjects in 20 CFR Part 641 Aged, Employment, Government contracts, Grant programs-labor, Privacy, Reporting and recordkeeping requirements. ■ Accordingly, the IFR amending 20 CFR part 641 which was published at 82 FR 56869 on December 1, 2017, is adopted as final without change. Rosemary Lahasky, Deputy Assistant Secretary for Employment and Training, Labor. [FR Doc. 2018–16216 Filed 7–27–18; 8:45 am] BILLING CODE 4510–FN–P DEPARTMENT OF THE TREASURY Internal Revenue Service Substantiation and Reporting Requirements for Cash and Noncash Charitable Contribution Deductions Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. AGENCY: These final regulations provide guidance concerning substantiation and reporting requirements for cash and noncash charitable contributions. The final regulations reflect the enactment of provisions of the American Jobs Creation Act of 2004 and the Pension Protection Act of 2006. These regulations provide guidance to individuals, partnerships, and corporations that make charitable contributions. daltland on DSKBBV9HB2PROD with RULES SUMMARY: Effective date: These regulations are effective on July 30, 2018. Applicability dates: For dates of applicability, see §§ 1.170A–1(k), DATES: VerDate Sep<11>2014 17:02 Jul 27, 2018 Jkt 244001 PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 36417 the donee organization. The contemporaneous written acknowledgment must include: (1) The amount of cash and a description (but not value) of any property other than cash contributed; (2) a statement of whether the donee organization provided any goods or services in consideration, in whole or in part, for any such cash or property; and (3) a description and good faith estimate of the value of any such goods or services or, if such goods or services consist solely of intangible religious benefits, a statement to that effect. Section 170(f)(11), as added by section 883 of the Jobs Act, restates, in part, section 155(a) of the Deficit Reduction Act of 1984 and contains reporting and substantiation requirements relating to the allowance of deductions for noncash charitable contributions. Under section 170(f)(11)(C), taxpayers are required to obtain a qualified appraisal for donated property for which a deduction of more than $5,000 is claimed. Under section 170(f)(11)(D), a qualified appraisal must be attached to any tax return claiming a deduction of more than $500,000. Section 170(h)(4)(B), as added by section 1213 of the PPA, adds the requirement that a qualified appraisal must be included with the taxpayer’s return for the taxable year of the contribution for any contribution of a qualified real property interest that is a restriction as to the exterior of a building described in section 170(h)(4)(C)(ii). Section 170(f)(11)(E), as amended by section 1219 of the PPA, provides statutory definitions of qualified appraisal and qualified appraiser for appraisals prepared with respect to returns filed after August 17, 2006. Section 170(f)(11)(E)(i) provides that the term qualified appraisal means an appraisal that is (1) treated as a qualified appraisal under regulations or other guidance prescribed by the Secretary, and (2) conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed by the Secretary. Section 170(f)(11)(E)(ii) provides that the term qualified appraiser means an individual who (1) has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary, (2) regularly performs appraisals for which the individual receives compensation, and (3) meets such other requirements as may be prescribed by the Secretary in regulations or other E:\FR\FM\30JYR1.SGM 30JYR1

Agencies

[Federal Register Volume 83, Number 146 (Monday, July 30, 2018)]
[Rules and Regulations]
[Pages 36407-36417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16216]


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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 641

[Docket No. ETA-2017-0005]
RIN 1205-AB79


Senior Community Service Employment Program; Performance 
Accountability

AGENCY: Employment and Training Administration, Labor.

ACTION: Final rule.

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

SUMMARY: The Employment and Training Administration (ETA) of the 
Department of Labor (Department) is adopting as a final rule without 
change the interim final rule (IFR) published by the Department in the 
Federal Register on December 1, 2017. The IFR revised performance 
accountability measures for the Senior Community Service Employment 
Program (SCSEP). The Older Americans Act (OAA) Reauthorization Act of 
2016 (2016 OAA) amended the measures of performance for the SCSEP 
program in large part to align them with the performance measures 
mandated for programs under the Workforce Innovation and Opportunity 
Act (WIOA) and required implementation, including through regulation by 
December 31, 2017. The IFR revised the Performance Accountability 
subpart of the SCSEP regulations to reflect changes necessitated by the 
passage of the 2016 OAA. In addition, the IFR made minor, non-
substantive amendments to other subparts of the SCSEP regulations to 
reflect the 2016 OAA amendments that aligned the SCSEP program 
statutory language with WIOA, such as updating outdated terminology and 
outdated references to the Workforce Investment Act of 1998 (WIA), 
which WIOA superseded. The implemented regulations, referred to as an 
IFR, took effect on January 2, 2018. The Department solicited public 
comment on the IFR, and the Department considered these comments when 
it prepared this final rule.

[[Page 36408]]


DATES: 
    Effective date: This final rule is effective August 29, 2018.
    Compliance date: Grantees must report performance information under 
the measures implemented in the IFR and adopted without change in this 
final rule beginning July 1, 2018. This rule is not an E.O. 13771 
regulatory action because this rule is not significant under E.O. 
12866.

FOR FURTHER INFORMATION CONTACT: Amanda Ahlstrand, Administrator, 
Office of Workforce Investment, [email protected], 202-693-3980. 
(This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: 

Preamble Table of Contents

I. Background
II. Summary of Public Comments Received on the Interim Final Rule
III. Section-by-Section Discussion of the Final Rule
IV. Regulatory Flexibility Analysis, Executive Order 13272, Small 
Business Regulatory Enforcement Fairness Act
V. Other Regulatory Considerations

I. Background

    The SCSEP, authorized by title V of the OAA, is the only federally 
sponsored employment and training program targeted specifically to low-
income, older individuals who want to enter or re-enter the workforce. 
Participants must be 55 years of age or older, with incomes no more 
than 125 percent of the Federal poverty level. The program offers 
participants training at community service assignments in public and 
non-profit organizations and agencies so that they can gain on-the-job 
experience. The dual goals of the program are to promote useful 
opportunities in community service activities and also to move SCSEP 
participants into unsubsidized employment, where appropriate, so that 
they can achieve economic self-sufficiency.
    The 2016 OAA, Public Law 114-144 (Apr. 19, 2016), amended the 
statutory provisions authorizing SCSEP and requires the Department to 
implement the amendments to the SCSEP performance measures by December 
31, 2017. See OAA sec. 513(d)(4) (42 U.S.C. 3056k(d)(4), as amended by 
2016 OAA sec. 6(d)(4) \1\). The Department met this statutory deadline 
when it published the IFR on December 1, 2017 (82 FR 56869). This final 
rule responds to public comments received and finalizes the IFR.
---------------------------------------------------------------------------

    \1\ Section 6 of the 2016 OAA amended secs. 502-518 of title V 
of the original (1965) OAA (42 U.S.C. 3056 et seq.). For ease of 
reference, this preamble will refer to the changes to title V made 
by the 2016 OAA by referring to the amended sections of the OAA, and 
will not continue to provide the citations to sec. 6 of the 2016 
OAA.
---------------------------------------------------------------------------

    The IFR included both the definitions of the measures (as required 
by OAA sec. 513(b)(2)) and the processes used to implement these 
measures in the conduct of the SCSEP grants. These processes include 
how the Department and grantees initially determine and then adjust 
expected levels of performance for the grants, and how the Department 
determines whether a grantee fails, meets, or exceeds the levels of 
performance.
    The Administrative Procedure Act (APA) authorizes agencies to issue 
a rule without notice and comment upon a showing of good cause. 5 
U.S.C. 553(b)(B). The APA's good cause exception to public 
participation applies upon a finding that those procedures are 
``impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. 553(b)(B). According to the legislative history of the APA, 
``unnecessary'' means ``unnecessary so far as the public is concerned, 
as would be the case if a minor or merely technical amendment in which 
the public is not particularly interested were involved.'' Senate 
Report No. 752 at p. 200, 79th Cong. 1st Sess. (1945). As explained by 
the U.S. Court of Appeals for the D.C. Circuit, ``when regulations 
merely restate the statute they implement, notice-and-comment 
procedures are unnecessary.'' Gray Panthers Advocacy Comm. v. Sullivan, 
936 F.2d 1284, 1291 (DC Cir. 1991). The Department determined that 
there was good cause to find that a pre-publication comment period was 
unnecessary for the IFR. The revisions set forth in the IFR to the 
previous regulations at 20 CFR part 641 codified statutory changes 
requiring little to no agency discretion or were technical amendments 
updating terminology or outdated references to WIA, which WIOA 
superseded. Therefore, the Department's issuance of the IFR, with 
provision for post-promulgation public comment, was in accordance with 
sec. 553(b) of the APA.
    The 2016 OAA requires the Department to establish and implement the 
new SCSEP performance measures after consultation with stakeholders. 
OAA sec.[thinsp]513(b)(2). The Department satisfied these statutory 
requirements when it solicited public input on the definitions and 
implementation of the statutory performance measures in April and May 
of 2017. On May 8, 2017, the Department sent an email to 4,529 
stakeholders, inviting them to register for the consultation. The 
Department also informed stakeholders that they could submit written 
comments after the consultation.
    Of the 394 registered participants, 273 attended the consultation 
on May 16, 2017. The IFR discussed at length the comments received 
during and after the consultation and, in response to some of those 
comments, made the following clarifications:
     The changes in the IFR to the SCSEP performance 
measurement system reflect in large part an alignment of the SCSEP 
performance measures with the three employment outcome indicators 
mandated for WIOA core programs under WIOA sec. 116(b)(2)(A)(i)(I) 
through (III). In addition to these three WIOA employment outcome 
indicators of performance, SCSEP has three measures related to 
participation in the program: service level, hours of community service 
employment, and service to the most-in-need. These three measures are 
unique to SCSEP and the 2016 OAA amendments retained them unchanged. 
Although WIOA has several similar measures, these SCSEP measures are 
not directly applicable to WIOA. In addition, the WIOA primary 
indicators of performance include effectiveness in serving employers; 
the corresponding measure for SCSEP under the OAA, as discussed below 
at Sec.  641.720, is not directly parallel because it includes 
participants and host agencies, as well as employers.
     All the SCSEP measures will be incorporated into the 
Participant Individual Record Layout (PIRL, the WIOA performance 
reporting system), along with other aspects of SCSEP performance.
     Although the 2016 OAA amendments require SCSEP to adopt 
several of WIOA's primary indicators of performance, SCSEP is 
independent of WIOA, and SCSEP performance is not included in the WIOA 
State program or indicator scores.
     While the Department is exploring a new case management 
system that may replace the SCSEP Performance and Results Quarterly 
Progress Report (SPARQ) system in whole or in part, grantees must 
continue using SPARQ until the Department informs them that a new 
system is available.
     Like the current measures, the new performance measures 
apply to all grantees, including both State and national grantees.
    See Section I of the IFR for a more detailed discussion of the 
comments received during stakeholder consultation process.
    The 2016 OAA changes to the SCSEP performance measurement system 
reflect in large part an alignment of the SCSEP performance measures 
with those mandated for WIOA core

[[Page 36409]]

programs under WIOA sec. 116(b)(2)(A)(i). The WIOA performance measures 
were implemented in a joint final rule issued by the Departments of 
Labor and Education on August 19, 2016 (81 FR 55792) (Joint WIOA final 
rule), after notice-and-comment rulemaking, and are codified in 20 CFR 
part 677. The IFR, which this final rule finalizes, revised the SCSEP 
regulations at 20 CFR part 641, subpart G (Performance Accountability) 
to codify the revised SCSEP performance measures in 2016 OAA sec. 513, 
which in large part aligns the SCSEP performance measures with the WIOA 
performance measures. In addition, the IFR made (and this final rule 
carries forward) technical amendments to other subparts of part 641 to 
reflect 2016 OAA amendments that aligned the SCSEP program statutory 
language with WIOA, such as updating outdated terminology and outdated 
references to WIA, which WIOA superseded.
    Coordination between the SCSEP and the WIOA programs continues to 
be an important objective of the OAA. SCSEP is a required partner in 
the workforce development system (per WIOA sec. 121(b)(1)(B)(v)), and 
SCSEP is required to coordinate with the WIOA One-Stop delivery system 
(OAA sec. 511, 42 U.S.C. 3056i), such as by accepting each other's 
assessments and Individual Employment Plans (IEPs) (OAA sec. 502(b)(3), 
42 U.S.C. 3056(b)(3)). The underlying notion of the One-Stop delivery 
system is the coordination of programs, services, and governance 
structures, to ensure customer access to a seamless system of workforce 
development services. Although there are many similarities to the 
system established under WIA, there are also significant changes under 
WIOA that are intended to make substantial improvements to the public 
workforce delivery system. The Joint WIOA final rule requires partners 
to collaborate to support a seamless customer-focused service delivery 
network; requiring that programs and providers co-locate, coordinate, 
and integrate activities and information, so that the system as a whole 
is cohesive and accessible for individuals and employers alike.
    The Department remains committed to a system-wide continuous 
improvement approach grounded upon proven quality principles and 
practices. Although many of the SCSEP regulations remain unchanged from 
the 2010 SCSEP final rule (75 FR 53786; Sept. 1, 2010), the IFR 
codified the 2016 OAA revisions to the program that align senior 
employment services with the workforce development system under WIOA. 
In particular, the IFR aligned the SCSEP performance measures related 
to employment and earnings with the performance measures established by 
WIOA to enhance consistency and coordination between the programs and 
ensure effective services for older Americans. Section III discusses in 
more detail the changes implemented by the IFR and finalized by this 
final rule.

II. Summary of Public Comments Received on the Interim Final Rule

    The Department received comments from seven organizations and 
individuals. Four organizations (three national grantees and an 
association representing State grantees) submitted substantive comments 
that addressed issues within the scope of the IFR: Associates for 
Training and Development (A4TD), Vantage Aging (previously known as 
Mature Services), Senior Service America (SSAI), and the National 
Association of States United for Aging and Disabilities (NASUAD); the 
three individuals submitted non-substantive comments.
    The Department considered all substantive comments received as it 
developed this final rule. In Section III below, ``Section-by-Section 
Discussion of the Final Rule,'' the Department summarizes and discusses 
the input received from A4TD, Vantage Aging, and NASUAD. SSAI 
resubmitted the same comments it submitted on June 6, 2017, in response 
to the May 16, 2017 stakeholder webinar, prior to the publication of 
the IFR. Because the Department fully responded to the SSAI comments in 
the preamble to the IFR, the Department will not respond further in 
this preamble except to clarify some of its prior responses.
    Three comments from individuals described general dissatisfaction 
with the SCSEP program and its grantees based on either negative 
personal experiences or unfavorable anecdotal evidence. The preamble 
does not address these comments, as they were not in the scope of the 
rulemaking.

III. Section-by-Section Discussion of the Final Rule

    The Department has made no changes to the regulatory text issued in 
the IFR.

Non-Substantive Technical Amendments

    In addition to the changes made to part 641, subpart G (Performance 
Accountability) codifying the 2016 OAA statutory revisions as described 
more fully below, the IFR made non-substantive, technical amendments 
throughout all of part 641 to reflect the 2016 OAA amendments and to 
align the SCSEP program language with WIOA, such as updating outdated 
terminology and outdated references to WIA, which WIOA superseded. The 
Department did not receive any comments on these technical amendments 
and the final rule adopts them as issued in the IFR.
    The remainder of this section-by-section discussion describes in 
detail only the substantive subpart G revisions.

Subpart G--Performance Accountability

    Throughout this subpart, the Department has revised the term ``core 
indicator(s)'' to ``core measure(s)'' to align the regulation with the 
2016 OAA, specifically sec. 513(a), 42 U.S.C. 3056k(a). The amended 
statute also refers to ``indicators.'' However, because the statute 
uses the terms interchangeably, for consistency and to reduce the 
possibility of confusion, the Department uses only the term 
``measures'' throughout this subpart. Other changes made to the 
sections of subpart G are described below.

Section 641.700 What performance measures apply to Senior Community 
Service Employment Program grantees?

    The Department did not receive any comments on this section. The 
final rule adopts the provision as originally issued in the IFR.

Section 641.710 How are the performance measures defined?

    This section of the rule provides definitions of the core measures. 
The IFR revised the core indicator (now ``core measure'') definitions 
contained in this section to align with the revised core measures set 
forth in Sec.  641.700 of the IFR. As discussed below and in the IFR, 
the Department deleted the entirety of former paragraph (b) to remove 
the definitions for the former ``additional indicators,'' which the 
2016 OAA removed. Thus, as an initial change, the IFR renumbered 
paragraphs (a)(1) through (6) to (a) through (g) (to include the 
definition for an added core measure, as discussed below).
Employment Measures
    The IFR did not revise paragraph (a), renumbered from former 
paragraph (a)(1), which contains the definition for the first core 
measure for hours of community service employment as currently 
implemented.
    In paragraph (b), renumbered from former paragraph (a)(2), the IFR 
included a definition for the second performance measure, ``percentage 
of project participants who are in unsubsidized employment during the 
second quarter after exit from the project.'' The IFR defined this

[[Page 36410]]

performance measure by the following formula: The number of 
participants who exited during the reporting period who are employed in 
unsubsidized employment during the second quarter after the exit 
quarter, divided by the number of participants who exited during the 
reporting period, multiplied by 100 so as to be reported as a 
percentage. This definition aligns with the definition of the 
corresponding WIOA performance measure, as explained in Training and 
Employment Guidance Letter (TEGL) 10-16, Performance Accountability 
Guidance for Workforce Innovation and Opportunity Act (WIOA) Title I, 
Title II, Title III and Title IV Core Programs, published December 19, 
2016.
    In paragraph (c), renumbered from former paragraph (a)(3), the IFR 
included a definition for the third performance measure, ``percentage 
of project participants who are in unsubsidized employment during the 
fourth quarter after exit from the project.'' This performance measure 
is defined by the following formula: The number of participants who 
exited during the reporting period who are employed in unsubsidized 
employment during the fourth quarter after the exit quarter, divided by 
the number of participants who exited during the reporting period, 
multiplied by 100 so as to be reported as a percentage. This definition 
aligns with the definition of the corresponding WIOA performance 
measure, as explained in TEGL 10-16.
    In response to the IFR, the Department received one public comment 
relating to the employment measures set forth in this section. 
Specifically, with regard to the fourth quarter unsubsidized employment 
measure at paragraph (c), the commenter expressed concern that the new 
fourth quarter unsubsidized employment measure, while simplifying the 
current measure for employment retention, will require grantees to 
follow participants for at least an entire year even if the 
participants did not leave the program for unsubsidized employment. The 
commenter contended that this core performance measure will place a 
significant burden on grantees while producing little increase in 
performance data.
    The commenter is correct that the new measure is no longer 
conditioned on a participant's having been employed in the first 
quarter after the exit quarter (as the current core measure for 
employment retention and the additional measure for retention at 1 year 
require) and, therefore, includes in the pool every participant who 
exits from SCSEP unless the participant has one of the exclusions from 
exit. The Department, however, declines to revise the definition for 
this core measure. Once wage records are available to all grantees, 
nearly all data for this measure will be gathered without the need for 
follow-up, and there will be little additional burden on the grantees. 
See discussion of the use of wage records at Sec.  641.720. Until that 
time, grantees should first focus their follow-up efforts on those 
participants who leave the program for unsubsidized employment or who 
are employed in the second quarter after the exit quarter. Grantees 
should then follow participants who did not have employment at exit or 
in the second quarter after exit but who grantees have reason to 
believe might become employed thereafter. The Department will provide 
technical assistance and guidance on the new timing and reporting 
requirements for Sec.  641.710(b) through (d), which are hereinafter 
called the ``three new employment outcome measures''.
Earnings Measure
    In paragraph (d), renumbered from former paragraph (a)(4), the IFR 
included a definition for the fourth performance measure, ``median 
earnings of project participants who are in unsubsidized employment 
during the second quarter after exit from the project.'' This 
performance measure is defined by the following formula: For all 
participants who exited and are in unsubsidized employment during the 
second quarter after the exit quarter, the wage that is at the midpoint 
(of all the wages) between the highest and lowest wage earned in the 
second quarter after the exit quarter. This definition aligns with the 
definition of the corresponding WIOA performance measure, as explained 
in TEGL 10-16.
    The Department did not receive any comments relating to paragraph 
(d). The final rule adopts the provision as originally issued in the 
IFR.
Effectiveness Measure
    The IFR added a definition in paragraph (e) for the fifth 
performance measure, ``effectiveness in serving employers, host 
agencies, and project participants.'' While this definition is similar 
to the definition used for this indicator under the 2006 OAA, when it 
was an additional indicator, the 2016 OAA revised the definition so 
that it focuses more specifically on effectiveness rather than 
satisfaction in general. The Department received no comments in 
response to this definition. The final rule adopts the provision as 
originally issued in the IFR.
    Although the new SCSEP measure of effectiveness parallels the 
language of the WIOA measure, it differs because it also measures the 
effectiveness in serving participants and host agencies, as well as 
employers. The WIOA approach to the measure, which is being piloted 
until 2019, does not have obvious application to SCSEP's other two 
customer groups. As a result, for the SCSEP measure, the Department has 
decided to continue surveying all three customer groups to assess the 
effectiveness of the services received as an interim measure at least 
until the WIOA pilot is complete and a WIOA measure is defined in final 
form. By using the same definition as that of the current customer 
satisfaction measure during this period, the Department will not 
require SCSEP customers to change their current practices or take on 
any additional burden.
Other Changes
    To conform to the changes outlined above, the IFR renumbered former 
paragraph (a)(5) to (f). The IFR also renumbered former paragraph 
(a)(6)(i) through (xiii) to (g)(1) through (13). Renumbered paragraphs 
(f) and (g) correspond to the sixth and seventh SCSEP performance 
measures, the definitions of which were unchanged by the IFR. The 
Department received no comments in response to these technical changes 
and they are incorporated into this final rule without change.
    The 2016 OAA removed the additional indicators of performance 
previously established in sec. 513(b)(2) of the 2006 OAA. Therefore, 
the IFR deleted former paragraphs (b)(1) through (3) that contained 
definitions for the additional indicators. The Department received no 
comments in response to these deletions.
    In addition to the regulatory text changes discussed above, the IFR 
made various non-substantive changes to the regulations for purposes of 
correcting typographical errors and improving clarity.

Section 641.720 How will the Department and grantees initially 
determine and then adjust expected levels of the core performance 
measures?

    The Department received several comments related to this provision. 
The comments are addressed below in the ``Employment Outcome Measure'' 
heading.
    The IFR made substantial revisions to this section to align with 
the 2016 OAA, which in large part mirrors the process for establishing 
the expected performance levels required by WIOA

[[Page 36411]]

for the title I core programs, as implemented in 20 CFR 677.170.
    The IFR revised paragraph (a), which requires agreement between the 
grantee and the Department for expected levels of performance for the 
first 2 program years of the grant, to mirror the statutory language in 
2016 OAA sec. 513(a)(2)(B) and (C)(i) and align with WIOA sec. 
116(b)(3)(A)(iv)(I). Specifically, paragraph (a) of the IFR stated that 
each grantee must reach agreement with the Department on levels of 
performance for each measure listed in Sec.  641.700 for each of the 
first 2 program years covered by the grant agreement. In reaching the 
agreement, the grantee and the Department must take into account the 
expected levels of performance proposed by the grantee and the factors 
described in paragraph (c) of this section. This paragraph also stated 
that the levels agreed to will be considered to be the expected levels 
of performance for the grantee for such program years, and the 
Department may not award funds under the grant until such agreement is 
reached. Lastly, this paragraph stated that, at the conclusion of 
negotiations concerning the performance levels with all grantees, the 
Department would make available for public review the final negotiated 
expected levels of performance for each grantee, including any comments 
submitted by the grantee regarding the grantee's satisfaction with the 
negotiated levels.
    The IFR explained that the Department considers PY 2016 and PY 2017 
to be the first 2 program years under the current SCSEP grants (i.e., 
the four-year grant cycle that began in PY 2016). For national 
grantees, these were the first 2 program years following the last (PY 
2016) grant competition. For State grantees, these were the first 2 
program years of the current (PY 2016) SCSEP State Plans.
    The IFR also revised paragraph (b), which required agreement for 
expected levels of performance for the third and fourth program years 
of the grant, to mirror the statutory language provided in 2016 OAA 
sec. 513(a)(2)(B) and (C)(ii) and to align with WIOA sec. 
116(b)(3)(A)(iv)(II). The IFR explained, in keeping with paragraph (a) 
above, that the Department considers PY 2018 and PY 2019 to be the 
third and fourth program years of the current (PY 2016) SCSEP grant 
agreements. Specifically, paragraph (b) stated that each grantee must 
reach agreement with the Department, prior to the third program year 
covered by the grant agreement, on levels of performance for each 
measure listed in Sec.  641.700, for each of the third and fourth 
program years of the grant. This paragraph stated that, in reaching the 
agreement, the grantee and the Department must take into account the 
expected levels proposed by the grantee and the factors described in 
paragraph (c) of this section. This paragraph also stated that the 
levels agreed to will be considered to be the expected levels of 
performance for the grantee for those program years. Lastly, like the 
requirement in paragraph (a), this paragraph stated that, at the 
conclusion of negotiations concerning the performance levels with all 
grantees, the Department would make available for public review the 
final negotiated expected levels of performance for each grantee, 
including any comments submitted by the grantee regarding the grantee's 
satisfaction with the negotiated levels.
    The IFR added a new paragraph (c), ``Factors,'' to require that the 
negotiated levels of performance must be based on the three factors 
listed in paragraphs (c)(1) through (3), as required by OAA sec. 
513(a)(2)(D) and to align with WIOA sec. 116(b)(3)(A)(v). Paragraph 
(c)(1) of the IFR stated that the negotiated levels must take into 
account how a grantee's levels of performance compare with the expected 
levels of performance established for other grantees. See OAA sec. 
513(a)(2)(D)(i) and WIOA sec. 116(b)(3)(A)(v)(I). Paragraph (c)(2) 
stated that the negotiated levels must be adjusted using an objective 
statistical model based on the model established by the Department of 
Labor with the Department of Education in accordance with WIOA sec. 
116(b)(3)(A)(viii) and implemented in Sec.  677.170(c). See 29 U.S.C. 
3141(b)(3)(A)(viii), OAA sec. 513(a)(2)(D)(ii), and WIOA sec. 
116(b)(3)(A)(v)(II). The IFR explained that the objective statistical 
adjustment model is to account for actual economic conditions and 
characteristics of participants, including the factors required by WIOA 
sec. 116(b)(3)(A)(v)(II). Paragraph (c)(3) stated that the negotiated 
levels must take into account the extent to which the levels involved 
promote continuous improvement in performance accountability on the 
core measures and ensure optimal return on the investment of Federal 
funds. See OAA sec. 513(a)(2)(D)(iii) and WIOA sec. 
116(b)(3)(A)(v)(III). The Department stated it would provide the model 
to grantees prior to the first negotiations under the new performance 
measures. The initial revision to the adjustment model was in fact 
presented to the grantees in a webinar held in May 2018, prior to the 
start of the negotiation period for PY 2018 and PY 2019.
    In paragraph (d), the IFR revised the adjustment requirements 
contained in former paragraph (b). The IFR replaced the adjustment 
factors specified in former (b)(1) through (3) with the requirement 
that the Department will, in accordance with the objective statistical 
model developed pursuant to paragraph (c)(2), adjust the expected 
levels of performance for a program year for grantees to reflect the 
actual economic conditions and characteristics of participants in the 
corresponding projects during such program year. The Department made 
these revisions in the IFR to align the pertinent regulations with OAA 
sec. 513(a)(2)(E).
    For consistency with the 2016 OAA, the IFR removed the language in 
paragraphs (a)(1) through (3) of Sec.  641.720 that describes the 
negotiation process in detail. However, as explained in the IFR, the 
negotiation process that the Department intends to use under these new 
performance measures is similar to the process that was used prior to 
the IFR, and includes similar opportunities for input from the 
grantees:
     In the spring of 2018, the Department analyzed grantees' 
baseline performance and issued proposed targets and goals for the next 
2 program years, PY 2018 and PY 2019, based on the new adjustment 
factors.
     If a grantee disagreed with those targets and goals, it 
was allowed to propose its own goals and request to negotiate. No 
grantee chose to negotiate revisions to the proposed targets and goals.
     Prior to the negotiation, the grantee was required to 
provide the Department with the data on which the grantee based its 
proposed goals.
     The grantee and the Department must reach agreement before 
funds for PY 2018 and PY 2019 can be approved; the agreed-upon goals 
will be the expected levels of performance upon which the annual 
evaluation of grantee performance will be based. If the grantee and the 
Department fail to reach agreement, no funds may be released.
     At the conclusion of the negotiation, the grantee may 
submit comments regarding the grantee's satisfaction with the 
negotiated levels of performance, which the Department will publish, 
along with the expected levels of performance.
     At the time of the annual evaluation of grantee 
performance, the expected levels of performance will be adjusted a 
second time using the latest available adjustment data. The Department 
will base this evaluation on the newly

[[Page 36412]]

adjusted levels of performance. See preamble discussion of Sec.  
641.740.
     The same process will be followed for subsequent 2-year 
periods.
    In addition to the regulatory text changes discussed above, the IFR 
made various non-substantive changes for purposes of correcting 
typographical errors and improving clarity. Those changes have been 
retained in this final rule.
    The new measures implemented by the IFR became effective on January 
2, 2018, and the new measures were used during the second half of PY 
2017, to negotiate the targets and goals for PYs 2018 and 2019. 
Performance under the PY 2018 targets and goals will begin to be 
reported starting July 1, 2018. The SCSEP QPR for PY 2017 will be based 
on the measures that were in place prior to the IFR, and the QPRs for 
PY 2018, will be based on the measures established in the IFR (and 
adopted without change in this final rule).
    SCSEP participants who exit during PY 2017 when goals based on the 
prior measures were still in effect will have their performance 
reported under the old measures for PY 2017. For this same cohort of 
exiters, reporting for the core employment outcome measures would also 
take place throughout PY 2018, under the new measures set forth in the 
IFR and adopted without change in this final rule, and would be 
reflected in the grantees' PY 2018 QPRs. For example, a participant who 
exits in Quarter 3 of PY 2017 will be included in the previous entered 
employment measure for Quarter 4 of PY 2017; the grantee will also 
report this participant in the final rule's new measure of employment 
in the second quarter after exit in Quarter 1 of PY 2018. Since the 
underlying data required for the new measures that will be reported in 
PY 2018 are the same data required for the prior measures, grantees 
will have to follow different timing rules for the collection of data 
in PY 2018, but they will not be required to collect any new or 
additional data beyond the data they would have reported under the old 
measures. The Department will provide technical assistance and guidance 
on the new timing and reporting requirements. As with the core measures 
in use prior to the IFR, the grantees will collect data for the 
additional measures not carried forward in the IFR and now this final 
rule throughout PY 2017, and the final QPR for PY 2017 will be the last 
report of the additional measures.
Employment Outcome Measures
    The Department received several comments relating to Sec.  641.720, 
which are summarized below. The Department considered all of these 
comments as it finalized the IFR; our responses to each comment are set 
forth below. This final rule, however, adopts this provision as it was 
issued in the IFR for reasons discussed below.
    A commenter asked for clarification of the calculation of two of 
the measures: Whether exclusions from exit will still be applied and 
whether the year-to-date measure for median earnings will be based on 
cumulative data or an average of the quarterly results.
    As the Department stated in the IFR, as part of its adoption of the 
WIA common measures in PY 2007, SCSEP has been following the WIA 
exclusions. With the 2016 OAA's adoption of the measures consistent 
with the WIOA primary indicators of performance, SCSEP will examine the 
revised WIOA exclusions and will issue revised guidance as appropriate. 
The calculation of the year-to-date performance will continue to be 
based on cumulative data, as it has always been. The Department will 
issue guidance on the calculations and timing rules for all the new 
measures.
    One commenter expressed concern that while achieving unsubsidized 
employment is a key goal of the SCSEP program, in many States and 
localities there remains a significant gap between the unsubsidized 
income needed to make ends meet and the possible reduction of public 
benefits due to achieving employment; that pursuit of improved 
performance under the new employment outcome measures could result in 
worsening the quality of life of SCSEP participants rather than 
improving it; and that the Department should work with States to 
identify mechanisms to ensure that every participant's life is improved 
by participation in the SCSEP program. The commenter recommended that 
the Department allow States to use additional economic factors such as 
housing availability and other issues related to affordability and cost 
of living as a part of their outcome measures. The commenter also 
recommended that the Department work with partners in the Federal 
Government to evaluate options for a gradual reduction in benefits for 
individuals as they leave SCSEP instead of the current benefits cliff.
    The Department agrees that SCSEP is designed to improve 
participants' quality of life, including self-sufficiency. In fact, 
data from the participant customer satisfaction surveys consistently 
confirm that the program does effectively improve participants' 
physical, emotional, and financial quality of life, and that 
participants who exit from the program are satisfied with SCSEP, even 
if they do not achieve unsubsidized employment. Section 
641.535(a)(3)(iii) of the SCSEP regulations (a section not affected by 
the IFR or this final rule) recognizes that unsubsidized employment may 
not be an appropriate goal for all participants and that if it becomes 
apparent that unsubsidized employment is not feasible, the grantee must 
modify the participant's IEP and assist the participant with other 
approaches to self-sufficiency, including transition to other services 
and programs.
    The Department notes also that the goals for the employment 
outcomes have always been set at a level that recognizes that not all 
participants will obtain unsubsidized employment and that because 
seniors generally work part-time hours at lower pay levels, the goals 
for earnings have also been set at realistic levels. However, the 
Department disagrees that SCSEP participants in general cannot improve 
their financial condition through unsubsidized employment. If grantees 
do their best to help participants find jobs at their highest wage and 
skill level, many participants can and do achieve economic self-
sufficiency.
    Finally, the Department has no authority to revise the employment 
outcome measures required by the 2016 OAA and implemented by the IFR 
and this final rule. The Department will work with other Federal 
agencies to explore whether Federal benefits can be reduced gradually 
when SCSEP participants exit the program for unsubsidized employment. 
The Department will also consider adding additional economic factors to 
the statistical adjustment model as suggested by this commenter and 
other commenters. See discussion of the statistical adjustment model 
below.
Use of Unemployment Insurance Wage Records
    Citing the additional burden the new measures place on grantees to 
conduct follow-ups and the incompleteness and inaccuracy of case 
management follow-up, all four commenters urged the Department to allow 
the use of unemployment insurance wage records to obtain employment 
outcome data. One commenter also urged the Department to phase out case 
management follow-up once access to wage records is available.
    As the commenters recognized and as stated in the IFR, the 
Department is investigating access to wage records and hopes to 
implement aggregate wage record matching for all grantees. However, 
since wage matching does not provide data on all participants in

[[Page 36413]]

unsubsidized employment, some supplemental use of case management 
follow-up would still be required. In addition, the SCSEP program model 
requires that grantees remain in touch with participants and employers 
during the four quarters after exit in order to help resolve any 
problems that may arise and to provide supportive services needed to 
help participants obtain and retain unsubsidized employment.
    The Department will inform the grantees as soon as it ascertains 
when wage matching will be available to SCSEP and will consult with the 
grantees about the extent to which follow-up will still be required for 
both performance reporting and case management. In the meantime, as 
stated in the IFR, until the access to wage records occurs, all 
grantees must continue using case management follow-up. Using different 
methods of data collection would compromise the consistency of the 
performance measures and would potentially provide an unfair advantage 
to those grantees with access to wage records. In the meantime, the 
Department will review the standards for case management follow-up as 
set forth in various guidance materials, will confer with grantees 
about the changes in procedures desired, and will issue revised 
guidance if appropriate.
Negotiation Process
    One commenter provided several comments relating to the negotiation 
process, including several concerns about the current process. The 
commenter described challenges that States have reported facing in 
negotiations on performance levels, including lack of interest from 
Federal partners, inconsistency regarding negotiations on a regional 
basis, delay resulting from confusion about what data to provide, and 
time pressures. The commenter requested that the Department issue 
guidance to States regarding the types of data the Department would 
take into account when negotiating performance levels. This commenter 
also requested that the Department work with other Federal agencies, 
including the Department of Health and Human Services and the 
Department of Agriculture, to provide guidance regarding data-sharing 
between programs such as SNAP, TANF, Unemployment Insurance, and the 
SCSEP program. Lastly, this commenter recommended that the Department 
allow for adjustments in the timeline for negotiations and allow for a 
certain percentage of funds to be released prior to agreement on the 
goals and/or to provide funds on an interim contingency basis while 
negotiations are ongoing.
    Although the OAA provides that grantees may comment on the 
negotiation process and that the Department will publish such comments, 
very few grantees have commented at all since PY 2007, and no grantees 
have expressed the concerns raised by the commenter. The Department 
notes that it has been providing annual teleconferences and webinars on 
the negotiation process each year since PY 2007, and that, during the 
negotiations themselves, the Department and its subject matter experts 
make every effort to identify and help grantees locate data that may be 
useful to them in their negotiations. The Department thus welcomes the 
commenter's suggestions for improving the negotiation process and will 
take them under consideration to the extent it has the authority to do 
so. The Department agrees that all Federal regions should be engaged in 
the process and that grantees should be given the support they require 
to participate meaningfully. The Department will work with the Federal 
Project Officers to ensure that all grantees are aware of their right 
to negotiate their goals and have a full opportunity to do so. The 
Department will also ensure that grantees have information about 
relevant data sources.
    As the commenter recognized, however, the requirement to reach 
agreement on negotiated levels of performance before the Department may 
release grant funds is contained in the OAA. The Department has no 
authority to waive or modify that requirement. The Department 
recognizes that the time period for negotiation is condensed and that 
negotiations occur during the same time that grantees are preparing 
their annual grant applications. The need to obtain the most recent 
baseline data and economic information to use in the goal setting and 
adjustment process necessitates this timing. The Department shares the 
commenter's desire to allow for a more relaxed schedule and will 
explore the possibility of using a more flexible baseline once the new 
performance measures have been in place long enough for a new baseline 
to emerge.
Indicators of Effectiveness
    One commenter who addressed the new measure of effectiveness in 
serving SCSEP's three customer groups pointed out that 
``effectiveness'' is more difficult to measure than ``satisfaction'', 
which for this commenter is a more concrete measure. The commenter 
expressed uncertainty about how well the WIOA pilot project to explore 
measures of effectiveness will translate to SCSEP. This commenter 
expressed appreciation for the Department's continuing to utilize the 
current customer satisfaction measure until a more detailed and 
rigorous effectiveness measure can be tested and developed. The 
commenter recommended that the Department create a stakeholder 
workgroup to collaborate on evaluating the applicability of the WIOA 
pilot measures to SCSEP, as well as on the modification or development 
of new measures of effectiveness. A different commenter made a similar 
recommendation about involving grantees in the exploration and adoption 
of pilot measures of effectiveness in serving employers.
    Another commenter asked whether there would be any changes in the 
administration, substance, or timeline for the customer satisfaction 
surveys during the interim period while the WIOA measure of 
effectiveness is not yet final.
    The Department welcomes the suggestions for grantee involvement and 
reiterates that it will continue to use the current customer 
satisfaction surveys at least until the WIOA pilot is complete and the 
new WIOA effectiveness measure is finalized. During this interim 
period, the Department will explore with grantees, and with its three 
customer groups, options for best measuring the effectiveness of 
SCSEP's services, including the suggestions made by the commenters. The 
Department will also explore ways to improve the efficiency of the 
current customer surveys (including the use of online surveys and 
changes to the administration of the employer survey) and will examine 
what, if any, new or revised questions would support an index of 
effectiveness as an alternative to the current index of satisfaction. 
Until the Office of Management and Budget (OMB) approves any proposed 
changes to the content or methods of administration of the surveys, the 
currently approved surveys will continue to be administered as 
approved.
Statistical Adjustment Model
    One commenter had several comments that relate to the statistical 
adjustment model, suggesting that the Department recognize differences 
between employment prospects for an individual residing in a metro or 
urban area versus one in a rural or frontier area, which would include 
allowing for different regional measures within the same State; the 
Department should consider other factors that influence

[[Page 36414]]

performance, such as access to affordable housing, transportation, and 
the interplay of various public benefits programs with one another; and 
whenever possible, the Department should use data on older workers in 
its calculations. This includes when determining local and regional 
employment and unemployment figures, among others.
    As the Department stated it would do in the preamble to the IFR, 
the Department is re-examining its current adjustment model to 
determine if additional aspects of the WIOA model should be 
incorporated into the SCSEP model or if other changes are appropriate. 
This consideration includes accounting for the percentage of 
participants who reside in rural areas, as well as examining an 
adjustment for the percentage of participants who are ex-offenders (as 
suggested by a comment made by SSAI). The Department will also explore 
whether it can obtain current economic data on the senior population as 
opposed to the general population. The adjustment model applied to the 
PY 2018 and PY 2019 proposed targets and goals included five new 
participant characteristics (including residing in a rural area) and 
one new economic factor (average weekly wages).
    The Department notes that to the greatest extent possible, it uses 
county-level data in its adjustment model, thereby permitting the 
adjustment factors to be tailored to the specific service area of each 
grantee. This approach accounts for regional differences within each 
grantee's service area, as requested by the commenter. In applying the 
revised adjustment model, the Department used economic data for the new 
service areas in which the grantees were located at the time of the 
goal setting for PY 2018 and PY 2019. See also discussion of baseline 
in Sec.  641.730.

Section 641.730 How will the Department assist grantees in the 
transition to the new core performance measures?

    Although the Department received a few public comments relating to 
this provision, which are discussed below, the final rule adopts this 
provision as it was issued in the IFR.
    The IFR made several changes in this section to update the 
Department's transition assistance plans to correspond with the 2016 
OAA. As a non-substantive change, the IFR deleted the designation of 
paragraph (a) and its title ``General transition provision,'' because 
the IFR deleted paragraph (b), as discussed below. This section was, 
thus, left with only two sentences.
    The first sentence as revised by the IFR stated that, as soon as 
practicable after January 2, 2018, the Department would determine 
whether a SCSEP grantee's performance under the measures in effect 
prior to January 2, 2018, would have met the expected levels of 
performance for PY 2018. The second sentence as revised by the IFR 
stated that if the Department determines that a grantee would have 
failed to meet those expected levels of performance, then the 
Department would provide technical assistance to help the grantee to 
eventually meet the expected levels of performance under the measures 
in Sec.  641.700, as those measures were revised by the IFR.
    The IFR explained that the Department would only make the above 
determination for the three new employment outcome measures, defined in 
Sec.  641.710(b) through (d) of the IFR, since no transition is 
required for the remaining four core measures (three are unchanged, and 
for the fourth, the ``indicators of effectiveness in serving employers, 
host agencies, and participants,'' the IFR stated that the Department 
would use the same customer satisfaction measure that was used prior to 
the IFR). In making the determination, the IFR indicated that the 
Department intended to examine all relevant data, as feasible, in order 
to provide a crosswalk between the existing measures and the measures 
implemented in the IFR and to develop a new baseline from which to 
begin the development of goals for PY 2018 and PY 2019. The IFR 
promised to provide the analysis to all grantees when it was completed. 
As set forth above, the Department completed the analysis and cross-
walk and provided it to the grantees prior to the development of 
proposed targets and goals for PY 2018 and PY 2019.
    As noted above, the IFR removed paragraph (b) from Sec.  641.730, 
which provided that PY 2007 would be treated as a baseline year for the 
most-in-need indicator so that grantees and the Department may collect 
sufficient data to set a meaningful goal for the measure for PY 2008. 
The IFR explained that since this provision included dates that have 
already passed, and given that the Department has documented 
information on this measure, this provision is no longer required. 
Therefore, the IFR deleted it from this section.
Baseline Year for New Employment Outcome Measures
    Some comments from some of the organizations that responded to the 
IFR, like comments received from the stakeholder webinar, expressed 
concern that the new employment outcome measures are substantially 
different from the current SCSEP outcome measures and that there is no 
baseline upon which goals for the new measures can be set. For this 
reason, some comments suggested that the Department establish a pilot 
period for the new employment measures during which there would not be 
any expected levels of performance.
    One commenter noted that, as a result of the 2016 national grantee 
competition, many national grantees operate in service areas different 
from their prior service areas and that the economic conditions in the 
new area are different as well. This commenter urged the Department to 
use a valid baseline rather than old data in establishing goals for the 
new measures.
    The Department recognizes that all three of the new outcome 
measures use different calculations from the measures that were in 
place prior to the IFR, and that it will take time to establish a 
reliable baseline to use in setting goals for these measures. As stated 
in the preamble to the IFR, to help determine how performance under the 
prior measures relates to performance under the new measures, the 
Department reanalyzed prior grantee performance data reported under the 
prior measures using the calculations required for the new measures and 
created a crosswalk between the two sets of measures. Because the 
recalculation proved to be an inadequate basis for setting the PY 2018 
and PY 2019 grantee-expected levels of performance, the Department 
decided to treat PYs 2018 and 2019 as baseline years for which targets, 
rather than expected levels of performance, are assigned, and has 
reserved the right to renegotiate the PY 2019 targets based on actual 
performance in PY 2018. Moreover, in developing the proposed goals, the 
Department used the grantees' most recent, reliable baseline 
performance. Where the recent baseline data were not reliable, the 
Department used a longer, historical baseline.
Use of the Participant Individual Record Layout (PIRL) and New Case 
Management System
    One commenter requested that the Department offer training on using 
the PIRL system and raised several questions related to the transition 
from SPARQ to PIRL, including whether

[[Page 36415]]

SPARQ data will migrate to PIRL and whether grantees should anticipate 
a period of dual entry into both systems. The comment further asked 
that the Department align its technical documentation with the PIRL 
data field specifications so that grantees may adjust their internal 
systems to support the new information codes and that the Department 
provide advanced notice of the new requirements and training on the new 
system.
    The Department has announced that it is developing a new case 
management system that is designed to replace SPARQ in whole or in 
part. The Department anticipates that SPARQ data will be migrated to 
the new system and that grantees will continue to use SPARQ for exited 
case records until the conclusion of the reporting of the PY 2017 
performance data on or around September 30, 2018. Since grantees will 
report the new performance measures beginning July 1, 2018, SPARQ is 
being reconfigured to support the new measures; grantees will continue 
using SPARQ for at least the first quarter of PY 2018. The Department 
anticipates that grantees will begin using the new system for active 
cases in the second or third quarter of PY 2018. The Department has 
aligned SPARQ data collection for the case management system with the 
PIRL. The Department will provide details of the new case management 
system and the transition requirements to the grantees as soon as 
possible and does anticipate providing training to grantees.

Section 641.740 How will the Department determine whether a grantee 
fails, meets, or exceeds the expected levels of performance and what 
will be the consequences of failing to meet expected levels of 
performance?

    The Department did not receive any comments on this section. The 
final rule adopts the provision as it was issued in the IFR.

Section 641.750 Will there be performance-related incentives?

    The Department did not receive any comments on this section. The 
final rule adopts the provision as it was issued in the IFR.

IV. Regulatory Flexibility Analysis, Executive Order 13272, Small 
Business Regulatory Enforcement Fairness Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
requires the Department to evaluate the economic impact of this rule 
with regard to small entities. The RFA defines small entities to 
include small businesses, small organizations including not-for-profit 
organizations, and small governmental jurisdictions. The Department 
must determine whether the rule imposes a significant economic impact 
on a substantial number of such small entities.
    There are 75 SCSEP grantees; 50 of these are States and are not 
small entities as defined by the RFA. Six grantees are governmental 
jurisdictions other than States (four grantees are territories such as 
Guam; one grantee is Washington, DC; and another grantee is Puerto 
Rico). Governmental jurisdictions must have a population of less than 
50,000 to qualify as a small entity for RFA purposes and the population 
of these 6 SCSEP grantees each exceeds 50,000. The remaining 19 
grantees are non-profit organizations, which includes some large, 
national non-profit organizations.
    The Department has determined that this final rule will impose no 
additional burden on small entities affected. Since the alignment with 
WIOA involved only definitions, the grantees are not required to 
collect any additional information that may cause a burden increase. In 
addition, the SCSEP program funds provided to grantees cover all such 
costs.
    The Departments certifies that this final rule does not impose a 
significant economic impact on a substantial number of small entities.

V. Other Regulatory Considerations

Executive Order 12866

    Under Executive Order (E.O.) 12866, OMB's Office of Information and 
Regulatory Affairs determines whether a regulatory action is 
significant and, therefore, subject to the requirements of the 
Executive Order and review by OMB. 58 FR 51735 (Oct. 4, 1993). Section 
3(f) of E.O. 12866 defines a ``significant regulatory action'' as an 
action that is likely to result in a rule that: (1) Has an annual 
effect on the economy of $100 million or more, or adversely affects in 
a material way a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local or 
tribal governments or communities (also referred to as economically 
significant); (2) creates serious inconsistency or otherwise interferes 
with an action taken or planned by another agency; (3) materially 
alters the budgetary impacts of entitlement grants, user fees, or loan 
programs, or the rights and obligations of recipients thereof; or (4) 
raises novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order. Id. OMB has determined that this final rule is not a 
``significant regulatory action'' under sec. 3(f) of E.O. 12866.
    This rule is not an E.O. 13771 regulatory action because this rule 
is not significant under E.O. 12866.
    E.O. 13563 directs agencies to propose or adopt a regulation only 
upon a reasoned determination that its benefits justify its costs; it 
is tailored to impose the least burden on society, consistent with 
achieving the regulatory objectives; and in choosing among alternative 
regulatory approaches, the agency has selected those approaches that 
maximize net benefits. E.O. 13563 recognizes that some benefits are 
difficult to quantify and provides that, where appropriate and 
permitted by law, agencies may consider and discuss qualitatively 
values that are difficult or impossible to quantify, including equity, 
human dignity, fairness, and distributive impacts.
    OMB declined review of this final rule because it is not a 
significant regulatory action.

Paperwork Reduction Act

    The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 
U.S.C. 3501 et seq., include minimizing the paperwork burden on 
affected entities.
    A Federal agency may not conduct or sponsor a collection of 
information unless OMB approves it under the PRA and it 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). OMB has approved the information collections contained in 
this final rule. See ICR Reference Number 201802-1205-003. The 
information collection is summarized as follows.
DOL-Only Performance Accountability, Information, and Reporting System
    Agency: DOL-ETA.
    Title of Collection: DOL-Only Performance Accountability, 
Information, and Reporting System.
    Type of Review: Revision.
    OMB Control Number: 1205-0521.
    Affected Public: State, Local, and Tribal Governments; Individuals 
or Households; and Private Sector--businesses or other for-profits and 
not-for-profit institutions.
    Obligation to Respond: Required to Obtain or Retain Benefits.

[[Page 36416]]

    Estimated Total Annual Respondents: 17,532,542.
    Estimated Total Annual Responses: 35,064,970.
    Estimated Total Annual Burden Hours: 8,938,029.
    Estimated Total Annual Other Burden Costs: $6,791,395.
    Regulations sections: Sec.  684.420, Sec.  684.610, Sec.  684.700, 
Sec.  684.800, Sec.  685.210, Sec.  685.400, Sec.  688.420, Sec.  
688.610. Sec.  641.700, Sec.  641.710, Sec.  641.720, Sec.  641.730, 
Sec.  641.740, Sec.  641.750.

Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995, this rule 
does not include any Federal mandate that may result in increased 
expenditures by State, local, and tribal governments in the aggregate 
of more than $100 million, or increased expenditures by the private 
sector of more than $100 million.

Executive Order 13132

    The Department has reviewed this rule in accordance with E.O. 13132 
regarding federalism and has determined that it does not have 
``federalism implications.'' The rule does not ``have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' This final 
rule defines and implements performance measures for the SCSEP and 
while States are SCSEP grantees, this rule merely makes changes to data 
collection processes that are ongoing. Requiring State grantees to 
implement these changes does not constitute a ``substantial direct 
effect'' on the States, nor will it alter the relationship or 
responsibilities between the Federal and State governments.

Executive Order 13045

    E.O. 13045 concerns the protection of children from environmental 
health risks and safety risks. This rule defines and details the 
performance measures used by the SCSEP, a program for older Americans, 
and has no impact on safety or health risks to children.

Executive Order 13175

    E.O. 13175 addresses the unique relationship between the Federal 
Government and Indian tribal governments. The order requires Federal 
agencies to take certain actions when regulations have ``tribal 
implications.'' Required actions include consulting with Tribal 
Governments prior to promulgating a regulation with tribal implications 
and preparing a tribal impact statement. The order defines regulations 
as having ``tribal implications'' when they have substantial direct 
effects on one or more Indian tribes, on the relationship between the 
Federal Government and Indian tribes, or on the distribution of power 
and responsibilities between the Federal Government and Indian tribes.
    The Department has reviewed this final rule and concludes that it 
does not have tribal implications. While some tribes may be recipients 
of national SCSEP grantees, this rule will not have a substantial 
direct effect on those tribes because, as outlined in the RFA section 
of the preamble above, there are only small cost increases associated 
with implementing this regulation. This regulation does not affect the 
relationship between the Federal Government and the tribes, nor does it 
affect the distribution of power and responsibilities between the 
Federal Government and Tribal Governments. Accordingly, we conclude 
that this rule does not have tribal implications for the purposes of 
E.O. 13175.

Environmental Impact Assessment

    The Department has reviewed this rule in accordance with the 
requirements of the National Environmental Policy Act of 1969 (NEPA) 
(42 U.S.C. 4321 et seq.), the regulations of the Council on 
Environmental Quality (40 CFR part 1500), and the Department's NEPA 
procedures (29 CFR part 11). The rule will not have a significant 
impact on the quality of the human environment and, thus, the 
Department has not prepared an environmental assessment or an 
environmental impact statement.

Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act, enacted as part of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 
2681), requires the Department to assess the impact of this rule on 
family well-being. A rule that is determined to have a negative effect 
on families must be supported with an adequate rationale.
    The Department has assessed this rule and determines that it will 
not have a negative effect on families. Indeed, the SCSEP strengthens 
families by providing job training and support services to low-income 
older Americans so that they can obtain fruitful employment and enjoy 
increased economic self-sufficiency.

Privacy Act

    The Privacy Act of 1974, 5 U.S.C. 552a, provides safeguards to 
individuals concerning their personal information that the Government 
collects. The Act requires certain actions by an agency that collects 
information on individuals when that information contains personally 
identifiable information such as Social Security Numbers (SSNs) or 
names. Because SCSEP participant records are maintained by SSN, the Act 
applies here.
    A key concern is for the protection of participant SSNs. Grantees 
must collect the SSN in order to pay participants properly for their 
community service work in host agencies. When grantees send participant 
files to the Department for aggregation, the transmittal is protected 
by secure encryption. When participant files are retrieved within the 
internet-based SCSEP data management system of SPARQ, only the last 
four digits of the SSN are displayed. Any information that is shared or 
made public is aggregated by grantee and does not reveal personal 
information on specific individuals.
    The Department works diligently to ensure the highest level of 
security whenever personally identifiable information is stored or 
transmitted. All contractors that have access to individually 
identifying information are required to provide assurances that they 
will respect and protect the confidentiality of the data. ETA's Office 
of Performance and Technology has been an active participant in the 
development and approval of data security measures--especially as they 
apply to SPARQ.
    In addition to the above, the Department provides a Privacy Act 
Statement to grantees for distribution to all participants. The 
Department advised grantees of the requirement in ETA's Older Worker 
Bulletin OWB-04-06. Participants receive this information when they 
meet with a caseworker or intake counselor. When the Department 
monitors the programs, implementation of this term is included in the 
review.

Executive Order 12630

    This 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.

Executive Order 12988

    This regulation has been drafted and reviewed in accordance with 
E.O. 12988, Civil Justice Reform, and will not unduly burden the 
Federal court

[[Page 36417]]

system. The Department has written the regulation so as to minimize 
litigation and provide a clear legal standard for affected conduct, and 
the Department has reviewed the regulation carefully to eliminate 
drafting errors and ambiguities.

Executive Order 13211

    This rule is not subject to E.O. 13211, because it will not have a 
significant adverse effect on the supply, distribution, or use of 
energy.

Plain Language

    The Department drafted this IFR in plain language.

List of Subjects in 20 CFR Part 641

    Aged, Employment, Government contracts, Grant programs-labor, 
Privacy, Reporting and recordkeeping requirements.

0
Accordingly, the IFR amending 20 CFR part 641 which was published at 82 
FR 56869 on December 1, 2017, is adopted as final without change.

Rosemary Lahasky,
Deputy Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2018-16216 Filed 7-27-18; 8:45 am]
 BILLING CODE 4510-FN-P