(a) The Governor, after receiving recommendations from the SJTCC or
HRIC, shall designate substate areas for the State (section 312(a)).
(b) In designating substate areas, the Governor shall:
(1) Ensure that each service delivery area within the State is
included within a substate area and that no SDA is divided among two or
more substate areas; and
(2) Consider the availability of services throughout the State, the
capability to coordinate the delivery of services with other human
services and economic development programs, and the geographic
boundaries of labor market areas within the State.
(c) Subject to paragraph (b) of this section, the Governor shall
designate as a substate area:
(1) Any single SDA that has a population of 200,000 or more;
(2) Any two or more contiguous SDA's that:
(i) In the aggregate have a population of 200,000 or more; and
(ii) Request such designation; and
(3) Any concentrated employment program grantee for a rural area as
described in section 101(a)(4)(A)(iii) of the Act.
(d) In addition to the entities identified in paragraph (c) of this
section, the Governor may, without regard to the 200,000 population
requirement, designate SDAs with smaller populations as substate areas.
(e) The Governor may deny a request for substate area designation
from a consortium of two or more SDAs that meets the requirements of
paragraph (c)(2) of this section only upon a determination that the
request is not consistent with the effective delivery of services to
eligible dislocated workers in the relevant labor market area, or would
otherwise not be appropriate to carry out the purposes of title III. The
Governor will give good faith consideration to all such requests by a
consortium of SDAs to be a substate area. In denying a consortium's
request for substate area designation, the Governor shall set forth the
basis and rationale for the denial (section 312(a)(5)).
(f) In the case where the service delivery area is the State, the
entire State shall be designated as a single substate area.
(g)(1) Entities described in paragraphs (c)(1) and (3) of this
section may appeal the Governor's denial of substate area designation to
the Secretary of Labor. The procedures that apply to such appeals shall
be those set forth at Sec. 628.405(g) for appeals of the Governor's
denial of SDA designation.
(2) An entity described in paragraph (c)(2) of this section that has
been denied substate area designation may utilize the State-level
grievance procedures required by section 144(a) of the Act and subpart E
of part 627 of this chapter for the resolution of disputes arising from
such a denial.
(h) Designation of substate areas shall not be revised more
frequently than once every two years. All such designations must be
completed no later than four months prior to the beginning of any
program year (section 312(a)(6)).
