[Excerpt from Federal Register / Vol. 59, No. 170 / Friday, September 2, 1994
/ 45815 (amendments to JTPA regulations)]


    7. Part 637 is revised to read as follows:

PART 637--PROGRAMS UNDER TITLE V OF THE JOB TRAINING PARTNERSHIP 
ACT

Subpart A--General Provisions

637.100  Scope and purpose.
637.105  Definitions.

Subpart B--Program Planning and Operation

637.200  Allotments to States.
637.205  Notice of intent to participate.
637.210  Incentive bonus program applications.
637.215  Review and approval of applications for incentive bonus 
payments.
637.220  Eligibility criteria for individuals to be counted in 
determining incentive bonuses.
637.225  Determination of incentive bonus.
637.230  Use of incentive bonuses.

Subpart C--Additional Title V Administrative Standards and Procedures

637.300  Management systems, reporting and recordkeeping.
637.305  Federal monitoring and oversight.
637.310  Audits.

Subpart D--Data Collection [Reserved]


    Authority: 29 U.S.C 1579(a); 29 U.S.C. 1791i(e).

Subpart A--General Provisions


Sec. 637.100  Scope and purpose.


     (a) This part implements Title V of the Act which creates a 
program to provide incentive bonuses to States for providing certain 
employable dependent individuals with job training to reduce welfare 
dependency, to promote self-sufficiency, to increase child support 
payments, and to increase employment and earnings (section 501).

     (b) This part applies to programs operated with funds under Title 
V of the Job Training Partnership Act.


Sec. 637.105  Definitions.

    In addition to the definitions contained in sections 4, 301, 
303(e), and in Sec. 626.4 of this chapter, the following definitions 
apply to the administration of Title V of the Act and this part:

    Absent parent means an individual who is continuously absent from 
the household and who is a non-custodial parent of a dependent child 
receiving aid to families with dependent children (AFDC) under part A 
of title IV of the Social Security Act (42 U.S.C. 601, et seq.).

    Disability assistance means benefits offered pursuant to Title XVI 
of the Social Security Act, relating to the supplemental security 
income program.

    Federal contribution means the amount of the Federal component of 
cash payments to individuals within the participating State under 
welfare and/or disability assistance programs, including Part A of 
Title IV of the Social Security Act.

Subpart B--Program Planning and Operation


Sec. 637.200  Allotments to States.


    (a) For each program year for which funds are appropriated to carry 
out programs under this part, the Secretary shall pay to each 
participating State the amount the State is eligible to receive in 
accordance with this part. No payments shall be made for any years for 
which funds are not appropriated and/or not available (section 502(a)).

    (b) If the appropriation is not sufficient to pay to each State the 
amount it is eligible to receive in accordance with this part, the 
State shall receive a percentage of the total available funds equal to 
the percentage of its bonus compared to the national total of bonuses 
(section 502(b)).

    (c) If an additional amount is made available after the application 
of paragraph (b) of this section, such additional amount shall be 
allocated among the States by increasing payment in the same manner as 
was used to reduce payment, except that no State shall be paid an 
amount which exceeds the amount to which it is eligible (section 
502(c)).


Sec. 637.205  Notice of intent to participate.


    (a) Any State seeking to participate in the incentive bonus program 
shall notify the Secretary of its intent to do so no later than 30 days 
before the beginning of its first program year of participation (i.e., 
June 1) (section 505(a)).

    (b) Pursuant to instructions issued by the Secretary, the 
notification referenced in paragraph (a) of this section shall be in 
the form of a letter from the Governor to the Secretary advising the 
Secretary of the State's intention to apply for, receive and expend 
bonuses under this program in a manner consistent with this part 
(section 505(b)).

    (c) After the State's submission of a notice of intent to 
participate, incentive bonuses may be claimed by a State for any 
individual who:

    (1)(i) Was an absent parent of any child receiving AFDC at the time 
such individual was determined to be eligible for participation in 
programs under the Act;

    (ii) Has participated in education, training, or other activities 
(including the Job Corps) funded under the Act; and

    (iii) Pays child support for a child specified in paragraph (c)(1) 
of this section following termination from activities funded under the 
Act; or

    (2)(i) Is blind or disabled;

    (ii) Was receiving disability assistance at the time such 
individual was determined to be eligible for participation in programs 
under the Act;

    (iii) Has participated in education, training, or other activities 
(including the Job Corps) funded under the Act; and

    (iv) Earns from employment a wage or an income (section 506).

    (d) A Governor may withdraw the State's participation in the 
incentive bonus program in any program year by submitting a written 
notice of withdrawal.
Sec. 637.210  Incentive bonus program applications.


    (a) Any State seeking to receive an incentive bonus under this 
title shall submit an Incentive Bonus Program application pursuant to 
instructions issued by the Secretary that will contain the criteria for 
approval of such application. Each application shall contain, at a 
minimum, the following information:

    (1) A list of eligible individuals who met the requirements of 
Sec. 637.220 of this part during the program year;

    (2) The amount of the incentive bonus attributable to each eligible 
individual who is claimed by the State; and

    (3) A statement certifying the availability of documentation to 
verify the eligibility of participants and the amount of the incentive 
bonus claimed by the State (section 505(b)).

    (b) The application for any program year shall be submitted by the 
State to the Secretary no later than August 31 following the end of the 
program year for which the bonus is being claimed. A copy of such 
application shall also be submitted at the same time to the appropriate 
DOL Employment and Training Administration Regional Office.


Sec. 637.215  Review and approval of applications for incentive bonus 
payments.


    (a) The Secretary shall review all applications for overall 
compliance with JTPA, the requirements of this part, and the 
instructions issued by the Secretary.

    (b) The Secretary shall inform a State within 30 days after receipt 
of the application whether or not its application has been approved.

    (c) If the application is not approved, the Department shall issue 
an initial notice of denial of payment indicating the reasons for such 
denial. The Governor will then have 30 days to respond to the reasons 
for the denial before a final decision is made.

    (d) If the Department determines that the additional information 
provided does not adequately respond to the questions raised in the 
initial review process, a final denial of payment shall be issued. The 
Governor may then appeal the decision in accordance with the procedures 
at subpart H of part 627 of this chapter (sections 504(c) and 505(c)).


Sec. 637.220  Eligibility criteria for individuals to be counted in 
determining incentive bonuses.


    An individual shall be eligible to be counted as part of the 
State's request for an incentive bonus payment under this part if the 
individual:

    (a)(1) Was an absent parent of any child receiving AFDC at the time 
such individual was determined to be eligible for participation in 
programs under the Act;

    (2) Has participated in education, training, or other activities 
(including the Job Corps) funded under the Act; and

    (3) Pays child support for a child specified in paragraph (a)(1) of 
this section following termination from activities funded under the 
Act; or

    (b)(1) Is blind or disabled;

    (2) Was receiving disability assistance at the time such individual 
was determined to be eligible for participation in programs under the 
Act;

    (3) Has participated in education, training, or other activities 
(including the Job Corps) funded under the Act; and

    (4) Earns a wage or an income from employment (section 506).


Sec. 637.225  Determination of incentive bonus.


    The amount of the incentive bonus to be paid to each State shall be 
the total of the incentive bonuses claimed for each eligible individual 
within the State. The amount of the incentive bonus to be paid each 
State shall be determined by the sum of:

    (a) An amount equal to the total of the amounts of child support 
paid by each individual who is eligible under Sec. 637.220(a) of this 
part, for up to 2 years after such individual's termination from JTPA; 
and

    (b) An amount equal to the total reduction in the Federal 
contribution to the amounts received under title XVI of the Social 
Security Act (42 U.S.C. 1381, et seq.) by each individual who is 
eligible under Sec. 637.220(b) of this part, for up to 2 years after 
such individual's termination from JTPA (section 503).


Sec. 637.230  Use of incentive bonuses.


    (a) During any program year, the Governor may use an amount not to 
exceed 5 percent of the State's total bonus payment for the 
administrative costs incurred under this program, including data and 
information collection and compilation, recordkeeping, or the 
preparation of applications for incentive bonuses (section 
504(a)(1)(A)).

    (b) The remainder, not less than 95 percent of the incentive 
bonuses received, shall be distributed to SDAs and Job Corps Centers 
within the State in a manner consistent with an agreement between the 
Governor and these SDA's and centers. This agreement shall reflect an 
equitable method of distribution which is based on the degree to which 
the effort of the SDA and/or Center contributed to the State's 
qualification for incentive bonus funds under title V (section 
504(a)(1)(B)).

    (c) Not more than 10 percent of the incentive bonus received in any 
program year by each SDA and/or Job Corps Center may be used for the 
administrative costs of establishing and maintaining systems necessary 
for operation of programs under title V, including the costs of 
providing incentive payments described in paragraph (d) of this 
section, technical assistance, data and information collection and 
compilation, management information systems, post-program followup 
activities, and research and evaluation activities (section 504(a)(2)).

    (d) Each SDA and/or Job Corps Center may make incentive payments to 
service providers, including participating State and local agencies, 
and community-based organizations, that demonstrate effectiveness in 
delivering employment and training services to eligible individuals 
under this title (section 504(b)).

    (e) All remaining funds received by each SDA shall be used for 
activities described in sections 204 and 264 of JTPA and shall be 
subject to the regulations governing the operation of programs under 
titles II-A and II-C of JTPA. All remaining funds received by each Job 
Corps Center shall be used for activities authorized under part B of 
title IV (section 504(a)(2).

Subpart C--Additional Title V Administrative Standards and 
Procedures


Sec. 637.300  Management systems, reporting and recordkeeping.


    (a) The Governor shall ensure that the State's financial management 
system and recordkeeping system comply with subpart D of part 627 of 
this chapter.

    (b) Notwithstanding the provisions of Sec. 629.455 of this chapter, 
the Governor shall report to the Secretary pursuant to instructions 
issued by the Secretary regarding activities funded under this part. 
Reports shall be required semi-annually and annually. Reports shall be 
provided to the Secretary within 45 calendar days after the end of the 
report period.

    (c) The Governor shall assure that appropriate and adequate records 
are maintained for the required time period to support all incentive 
bonus payment applications. Such records shall include documentation to 
support individuals' eligibility under this part.


Sec. 637.305  Federal monitoring and oversight.


    The Secretary shall conduct oversight of the programs and 
activities conducted in accordance with this part.


Sec. 637.310  Audits.


    The Governor shall ensure that the State complies with the audit 
provisions at Sec. 629.480 of this chapter.

Subpart D--Data Collection [Reserved]


    Signed at Washington, DC, this 18th day of August, 1994.
Robert B. Reich,
Secretary of Labor.

[FR Doc. 94-20871 Filed 9-1-94; 8:45 am]

BILLING CODE 4510-30-P