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Authorities and References: Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (Public L. 104-193) and Balanced Budget Act of 1997 (Public L. 105-33) amending Title IV-A of the Social Security Act. Welfare-to-Work Interim Final Rule, 20 CFR 645 (62 Fed. Reg. 61588 (Nov. 18, 1997)). Planning Guidance and Instructions for Annual State Plans for Fiscal Year (FY) 1998, dated March 1998. Background: The Balanced Budget Act of 1997, which was signed by President Clinton on August 5, 1997, authorizes the Department of Labor to provide WtW grants to States and local communities for transitional employment assistance to move hard-to-employ Temporary Assistance to Needy Families (TANF) recipients with significant employment barriers and certain noncustodial parents into unsubsidized jobs offering long-term employment opportunities. These grants are designed to provide many welfare recipients with the job placement services, transitional employment, and job retention and support services to achieve the goal of economic self-sufficiency.

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Background: Since 1966, the Employment and Training Administration (ETA) has administered, through contract, the Federal Bonding Program. Initiated as a small demonstration project, this innovative activity delivers a unique helping service that is not duplicated by any other program in the U.S. to secure the job placement of ex-offenders and other high-risk job applicants. The FBP functions as a job placement tool by providing employers with a special incentive to hire the hardest-to-place jobseekers. Program Redirection: This year, ETA is undertaking a major redirection of the FBP to a Federal-State partnership. This decision is based on several considerations: o The FBP has been administered for many years as a demonstration effort at the national level. It has a proven track record and needs to move forward to sustainability; o The declining availability of national JTPA program resources compels ETA to undertake some very stringent cost-cutting measures and to manage available funds more creatively; o The administration of the FBP as a Federal-State partnership will allow ETA to continue to maintain a Federal presence and retain the Federal character of the program while, at the same time, permitting States to play an active role in determining how this very worthwhile activity can best fit into their overall workforce development plans; and o The redirection of the FBP from a demonstration initiative to a Federal-State partnership will eliminate the program's reliance on a small national contract and will allow States and localities to tie fidelity bonding services more closely into allied efforts to assist the hardest-to-place jobseekers. Funding: During Program Year (PY) 1997, ETA utilized resources from the previous program year to support the FBP at a slightly expanded level to aid in the move to the Federal-State partnership. ETA is providing funding at a fixed reduced level to the FBP in PY 1998. Under the existing contractual arrangement, a limited bond allocation has been issued to each of the States to assure that a small Federally-financed floor is available to provide continuity in the program. States can use their own resources to supplement Federal funding to provide fidelity bonding to ex-offenders and other hard-to-place applicants. The project staff has been engaging in activities designed to facilitate the transition to partial State and local funding for bond issuance. Instructions as to how to proceed were issued to State Employment Service Directors and State Bonding Coordinators. Action Required: States are encouraged to carefully examine resources that might be available for this purpose.

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