Workforce Innovation and Opportunity Act; Notice of Proposed Rulemaking

DEPARTMENT OF LABOR

Employment and Training Administration

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

[Docket No. ETA-2015-0001]

RIN 1205-AB73

Workforce Innovation and Opportunity Act; Notice of Proposed Rulemaking

AGENCY:

Employment and Training Administration (ETA), Labor.

ACTION:

Notice of Proposed Rulemaking (NPRM).

SUMMARY:

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

DATES:

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

ADDRESSES:

You may submit comments, identified by docket number ETA-2015-0001, for Regulatory Information Number (RIN) 1205-AB73, by one of the following methods:

Federal e-Rulemaking Portal:

http://www.regulations.gov

. Follow the Web site instructions for submitting comments.

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

Instructions:

Label all submissions with “RIN 1205-AB73.”

Please submit your comments by only one method. Please be advised that the Department will post all comments received that related to this NPRM on

http://www.regulations.gov

without making any change to the comments or redacting any information. The

http://www.regulations.gov

Web site is the Federal e-rulemaking portal and all comments posted there are available and accessible to the public. Therefore, the Department recommends that commenters remove personal information such as Social Security Numbers (SSNs), personal addresses, telephone numbers, and email addresses included in their comments as such information may become easily available to the public via the

http://www.regulations.gov

Web site. It is the responsibility of the commenter to safeguard personal information.

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

http://www.regulations.gov

.

Docket:

All comments on this proposed rule will be available on the

http://www.regulations.gov

Web site and can be found using RIN 1205-AB73. The Department also will make all the comments it receives available for public inspection by appointment during normal business hours at the above address. If you need assistance to review the comments, the Department will provide appropriate aids such as readers or print magnifiers. The Department will make copies of this proposed rule available, upon request, in large print and electronic file on computer disk. To schedule an appointment to review the comments and/or obtain the proposed rule in an alternative format, contact the Office of Policy Development and Research (OPDR) at (202) 693-3700 (this is not a toll-free number). You may also contact this office at the address listed below.

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

OIRA_submission@omb.eop.gov

.

FOR FURTHER INFORMATION CONTACT:

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

SUPPLEMENTARY INFORMATION:

Preamble Table of Contents

I. Executive Summary

II. Acronyms and Abbreviations

III. Background

A. Workforce Innovation and Opportunity Act Principles

B. Major Changes From Current Workforce Investment Act of 1998

C. Rule Format

D. Legal Basis

IV. Section-by-Section Discussion of Proposal

A. Part 603—Federal-State Unemployment Compensation Program

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

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

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

E. Part 681—Youth Activities Under Title I of the Workforce Innovation and Opportunity Act

F. Part 682—Statewide Activities Under Title I of the Workforce Innovation and Opportunity Act

G. Part 683—Administrative Provisions Under Title I of the Workforce Innovation and Opportunity Act

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

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

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

K. Part 687—National Dislocated Worker Grants

L. Part 688—Provisions Governing the YouthBuild Program

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

N. Part 652—Establishment and Functioning of State Employment Services

O. Part 653—Services of the Employment Service System

P. Part 654—Special Responsibilities of the Employment Service System

Q. Part 658—Administrative Provisions Governing the Employment Service System

V. Rulemaking Analyses and Notices

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

B. Paperwork Reduction Act

C. Executive Order 13132 (Federalism)

D. Unfunded Mandates Reform Act of 1995

E. Plain Language

F. Assessment of Federal Regulations and Policies on Families

G. Regulatory Flexibility Act

H. Small Business Regulatory Enforcement Fairness Act of 1996

I. Executive Order 13175 (Indian Tribal Governments)

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

K. Executive Order 12988 (Civil Justice Reform)

L. Executive Order 13211 (Energy Supply)

I. Executive Summary

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

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

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

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

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

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

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

• Promoting improvement in the structure and delivery of services.

• Increasing the prosperity of workers and employers.

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

WIOA is complemented by the groundwork laid by the Administration-wide review of employment, education, and training programs to ensure Federal agencies do everything possible to prepare ready-to-work-Americans with ready-to-be-filled jobs. The review identified seven priorities for these Federal programs:

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

• Offer work-based learning opportunities with employers—including on-the-job training, internships, and pre-apprenticeships and registered apprenticeships—as training paths to employment;

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

• Measure and evaluate employment and earnings outcomes;

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

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

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

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

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

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

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

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

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

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

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

II. Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act

ALJ Administrative Law Judge

ANVSA Alaska Native Village Service Area

AOP Agricultural Outreach Plan

ARS Agricultural Recruitment System

AWOL Absent Without Official Leave

BLS Bureau of Labor Statistics

CBO Community-based organization

CCC Civilian Conservation Center

CEO Chief elected official

CFR Code of Federal Regulations

Complaint System Employment Service and Employment-Related Law Complaint System

COSO Committee of Sponsoring Organizations of the Treadway Commission

CTT Career Technical Training

DINAP Division of Indian and Native American Programs

DOL Department of Labor

ED Department of Education

E.O. Executive Order

EO Equal opportunity

ES Employment Service

ESA Employment Standards Administration

ESARS Employment Security Automated Reporting System

ETA Employment and Training Administration

ETP Eligible training provider

ETPL Eligible training provider list

FECA Federal Employees Compensation Act

FEIN Federal employer identification number

FEMA Federal Emergency Management Agency

FERPA Family Educational Rights and Privacy Act

FLSA Fair Labor Standards Act

FOA Funding Opportunity Announcement

FR Federal Register

GED General Educational Development

GIS Geographic information system

GPRA Government Performance and Results Act

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

HHS Department of Health and Human Services

HSD High School Diploma

HUD U.S. Department of Housing and Urban Development

IC Information collection

IEVS Income and Eligibility Verification System

INA Indian and Native American

ISDEAA Indian Self-Determination and Education Assistance Act

ISY In-school youth

ITA Individual Training Account

JIS Job Information Service

JS Job Service

JTPA Job Training Partnership Act

JVSG Jobs for Veterans State Grants

LEHD Longitudinal Employer-Household Dynamics

LEP Limited English proficiency

MOU Memorandum of Understanding

MSFW Migrant and Seasonal Farmworker

NAACP National Association for the Advancement of Colored People

NAFTA North American Free Trade Agreement

NAICS North American Industry Classification System

NDWG National Dislocated Worker Grant

NEG National Emergency Grant

NFJP National Farmworker Jobs Program

NICRA Negotiated Indirect Cost Rate Agreement

NPRM Notice of Proposed Rulemaking

OALJ Office of Administrative Law Judges

OBS On-board strength

OFLC Office of Foreign Labor Certification

OJT On-the-job training

OMB Office of Management and Budget

OMS Outcome Measurement System

OPDR Office of Policy Development and Research

OSHA Occupational Safety and Health Administration

OSY Out-of-school youth

OTSA Oklahoma Tribal Service Area

OWI Office of Workforce Investment

PART Program Assessment and Rating Tool

PBP Program Budget Plan

PRA Paperwork Reduction Act of 1995

PRH Policy and Requirements Handbook

Pub. L. Public Law

PY Program year

RFA Regulatory Flexibility Act

RFP Requests for proposals

Richey Order Judge Richey Court Order

RIN Regulatory Information Number

SBA Small Business Administration

SBREFA Small Business Regulatory Enforcement Fairness Act of 1996

SDA Service delivery area

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

SESA State Employee Security Act

SMA State Monitor Advocate

SOC Standard Occupational Classification

SNAP Supplemental Nutrition Assistance Program

SSA Social Security Act

SSN Social Security Number

State Board State Workforce Development Board

STAWRS Simplified Tax and Wage Reporting System

SWA State Workforce Agency

TAA Trade Adjustment Assistance

TANF Temporary Assistance for Needy Families

TEGL Training and Employment Guidance Letter

TEN Training and Employment Notice

UC Unemployment Compensation

UCX Unemployment Compensation for Ex-service members

UI Unemployment insurance

U.S.C. United States Code

VA Department of Veterans Affairs

VETS Veterans' Employments and Training Service

VR Vocational rehabilitation

Wagner-Peyser Wagner-Peyser Act of 1933

WARN Worker Adjustment and Retraining Notification

WDB Workforce Development Board

WHD Wage and Hour Division

WIA Workforce Investment Act of 1998

WIAC Workforce Information Advisory Council

WIC Workforce Information Council

WIOA Workforce Innovation and Opportunity Act of 2014

WLMI Workforce and Labor Market Information

WLMIS Workforce and Labor Market Information System

WRIS Wage Record Interchange System

III. Background

A. Workforce Innovation and Opportunity Act Principles

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

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

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

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

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

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

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

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

The remainder of WIOA title I authorizes the adult, dislocated worker, and youth formula programs; the State and local workforce development (formerly investment) boards; the designation of regions and local areas; local plans; the one-stop system; national programs, including Job Corps, YouthBuild, Indian and Native American programs, and Migrant and Seasonal Farmworker (MSFW) programs; technical assistance and evaluations; and general administrative provisions currently authorized under title I of WIA. Title II retains and amends the Adult Education and Family Literacy Program currently authorized under title II of WIA. Title III contains amendments to the Wagner-Peyser Act relating to the ES and Workforce and Labor Market Information System (WLMIS), and requires the Secretary to establish a Workforce Information Advisory Council (WIAC). Title IV contains amendments to the Rehabilitation Act of 1973, which were also included under title IV of WIA; it also requires the Secretary of Labor to establish an Advisory Committee on Increasing Competitive Integrated Employment for Individuals with Disabilities. Finally, title V contains general provisions similar to the provisions applicable under title V of WIA as well as the effective dates and transition provisions.

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

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

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

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

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

• Established a WIOA Resource Page (

www.doleta.gov/WIOA

) to provide updated information related to WIOA implementation to the public workforce system and stakeholders;

• Established a dedicated email address for the public workforce system and stakeholders to ask questions and offer ideas related to WIOA (

DOL.WIOA@dol.gov

);

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

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

B. Major Changes From Current Workforce Investment Act of 1998

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

Major changes in WIOA are:

•

Aligns Federal investments to support job seekers and employers.

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

•

Streamlines the governing bodies that establish State, regional

and local workforce investment priorities.

WIOA makes State and Local Workforce

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

•

Creates a common performance accountability system and information for job s

eekers and the public.

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

•

Fosters regional collaboration to meet the needs of regional economies.

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

•

Enhances access to high quality services through the network of one-stop system.

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

•

Improves services to individuals with disabilities.

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

•

Makes key investments for disconnected youth.

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

•

Helps Employers Find Workers with the Necessary Skills.

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

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

C. Rule Format

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

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

D. Legal Basis

On July 22, 2014, the President signed the Workforce Innovation Opportunity Act (WIOA) (Pub. L. 113-128) into law. WIOA repeals WIA (29 U.S.C. 2801

et seq.

). As a result, the WIA regulations no longer reflect current law. Section 503(f) of WIOA requires that the Department issue an NPRM and then a final rule that implements the changes WIOA makes to the public workforce system in regulations. Therefore, DOL seeks to develop and issue a NPRM that proposes to implement WIOA. The Department of Labor will issue regulations regarding the Section 188 Nondiscrimination provisions through separate rulemaking.

IV. Section-by-Section Discussion of Proposal

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

Relationship Between 20 CFR Part 603 and WIOA

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

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

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

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

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

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

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

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

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

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

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

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

The proposed amendments to § 603.2(d) would clearly enumerate that “public official” includes officials from public post-secondary educational organizations, State performance accountability and customer information agencies, the chief elected officials (CEOs) of local Workforce Development Areas (as that term is used in WIOA sec. 106), and a public State educational authority, agency, or institution. Proposed § 603.2(d)(2) would permit disclosure to public post-secondary educational institutions, regardless of how those institutions are structured or organized under State law. The regulation, as proposed, specifically mentions three categories of institutions. Proposed § 603.2(d)(2)(i) would permit disclosure to public post-secondary educational institutions that are part of a State's executive branch,

i.e.,

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

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

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

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

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

Section 603.5(e)

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

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

The Department notes that the proposed amendment to § 603.5(e) would permit disclosure to a public official for purposes of performance accountability of the entities on the State's eligible training provider list (ETPL). In addition, disclosure of confidential UC information for other programs' performance accountability purposes (

e.g.,

TANF or SNAP) may be accomplished under existing § 603.5, as these entities are public officials and are performing their public duty, as defined in this section.

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

Section 603.6(8)

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

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

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

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

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

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

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

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

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

Contract: The proposed definition for “contract” incorporates the definition established by OMB at 2 CFR 200.22. Specifically, the proposed term “contract” refers to the legal document that a non-Federal entity uses to purchase property or services used to carry out its duties under a grant authorized under WIOA. If the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

et seq.

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

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

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

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

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

1. Subpart A—State Workforce Development Board

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

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

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

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

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

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

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

Section 679.110 What is the State Workforce Development Board?

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

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

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

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

Proposed § 679.110(b)(3)(i)(A) through (C), implementing sec. 101(b)(1)(C)(i) of WIOA, require the majority of State Board representatives to be from businesses or organizations in the State. These representatives must either be the owner or chief executive of the business or be an executive with optimum policy-making or hiring authority as defined in proposed § 679.120. These representatives must also come from businesses or organizations that represent businesses which provide employment and training opportunities that include high-quality, work-relevant training, and development opportunities in in-demand industry sectors or occupations. Work-relevant and development opportunities may include customized training, registered apprenticeship, or OJT. Finally, the Governor must appoint these members based on nominations from business organizations and trade associations in the State. The Department envisions that these members will be individuals that will be able to drive the board to align the workforce investment, education, and economic development systems in support of a comprehensive, accessible, and high-quality workforce development system.

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

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

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

Proposed § 679.110(b)(3)(iii)(A)(

1

) and (

2

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 679.130 What are the functions of the State Board?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 679.200 What is the purpose of a region?

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

Section 679.210 What are the requirements for identifying a region?

Proposed § 679.210 outlines the requirements for identifying a region.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 679.270 What are the special designation provisions for single-area States?

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

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

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

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

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

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

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

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

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

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

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

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

3. Subpart C—Local Boards

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

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

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

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

Section 679.310 What is the Local Workforce Development Board?

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

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

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

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

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

same requirements found at 20 CFR 661.300(3).

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

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

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

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

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

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

In addition to these required members, proposed paragraphs (c)(3) and (4) explain that the CEO may appoint one or more representatives of CBOs with experience in addressing the employment needs of individual barriers to employment including organizations that serve veterans or that provide or support competitive integrated employment for individuals with disabilities, and one or more representative of organizations with experience addressing the employment needs of WIOA-eligible youth, including serving OSY. While not mandatory, the two representative categories in proposed paragraphs (c)(3) and (4) count towards reaching the 20 percent threshold. Proposed § 679.320(c) underscores both the importance of registered apprenticeship, a proven training strategy that effectively meets the needs of both employers and workers,

1

and the role of organized labor in workforce development, particularly in developing registered apprenticeship programs.

1

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

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

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

et seq.

) other than sec. 112 or part C of that title.

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

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

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

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

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

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

Section 679.330 Who must chair a Local Board?

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

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

Proposed § 679.120 explains what is meant by “optimum policy-making authority” and “demonstrated experience and expertise” for members of the Local Board under sec. 107(b)(5) of WIOA. Proposed paragraph (a) defines an individual with “optimum policy-making authority” as someone who can reasonably be expected to speak affirmatively on behalf of the entity he or she represents and to commit that entity to a chosen course of action. In order for the decisions of the board to have the greatest possible impact, all board members must be able to speak authoritatively when committing their organization to a decided course of action.

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

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

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

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

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

Proposed paragraph (a) expressly authorizes Local Boards to establish standing committees that include individuals who are not formal members of the board, but who have expertise to advise on issues that support the board's ability to attain the goals of the State, local and regional plans, and the objective of providing customer-focused services to individuals and businesses. The subpart provides examples of areas where standing committees may be particularly beneficial, including serving targeted groups of customers such as individuals with disabilities and youth, and addressing one-stop system issues.

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

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

Section 679.370 What are the functions of the Local Board?

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

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

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

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

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

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

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

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

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

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

et seq.

) (other than sec. 112 or part C of that title (29 U.S.C. 732, 741) to enhance the provision of services to individuals with disabilities and other individuals.

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

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

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

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

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

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

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

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

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

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

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

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

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

assist the board in carrying out its functions.

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

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

Proposed § 679.410 explains the situations in which the Local Board may directly act as a one-stop operator, a provider of career services or training services. Proposed § 679.410(a)(1)(i) and (ii) establishes that a Local Board may act as a one-stop operator where a Local Board successfully participates in a competition or if the board meets the criteria for sole source procurement. Under both circumstances, as required by proposed § 679.410(a)(2), implementing WIOA sec. 107(g)(2), the Governor and CEO must agree to such selection. This clarifies the interaction between sec. 122(d)(2)(A) of WIOA, which requires that Local Boards select a one-stop operator through a competitive process, and WIOA sec. 107(g)(2), which states that a Local Board can be designated as a one-stop operator only with the agreement of the Governor and CEO in the local area. One interpretation of sec. 107(g)(2) is that Local Boards, with approval of the Governor and CEO, could be selected as one-stop operators without undergoing a competitive process. However, such a non-competitive selection is only appropriate after a competitive process has been conducted as required by WIOA sec. 122(d)(2)(A). The Department welcomes comments regarding this interpretation.

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

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

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

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

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

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

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

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

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

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

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

4. Subpart D—Regional and Local Plan

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

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

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

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

Section 679.510 What are the requirements for regional planning?

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

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

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

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

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

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

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

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

Section 679.530 When must the regional plan be modified?

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

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

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

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

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

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

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

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

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

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

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

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

Section 679.560 What are the contents of the local plan?

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

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

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

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

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

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

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

and requires descriptions regarding how the Local Board will ensure the continuous improvement of eligible providers of services, including through the promotion of proven and promising approaches and evaluation; how the Local Board will facilitate access to services, including in remote areas, through the use of technology and other means; how entities within the one-stop delivery system, including one-stop operators and the one-stop partners, will comply with WIOA sec. 188, if applicable, and applicable provisions of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101

et seq.

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

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

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

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

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

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

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

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

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

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

Section 679.580 When must the local plan be modified?

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

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

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

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

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

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

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

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

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

A description of what provisions of WIOA and Wagner-Peyser may and may not be waived is included, along with an explanation of the procedures for requesting a waiver. The subpart also describes what may and may not be waived under a Workforce Flexibility Plan, and the procedures for obtaining approval of a plan. The WIOA requirements for obtaining approval for a waiver or Workforce Flexibi

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