Reference: National Defense Authorization Act (NDAA) for Fiscal Year 1993, P.L. 102-484, section 4467; interim final JTPA regulations published in the December 29, 1992 Federal Register (57 FR 62004-62073). Background: On October 23, 1992, the President signed into law the National Defense Authorization Act for Fiscal Year 1993. Included were amendments to Title III of JTPA. The NDAA amendments became effective immediately upon signature by the President. Discussion: The JTPA regulations that were published on December 29, 1992 include revisions required by the amendments in the NDAA. While the interim final JTPA regulations apply to JTPA programs in Program Year 1993 which begins on July 1, 1993, the relevant provisions of the interim final regulations can be useful when determining the immediate impact of the NDAA Amendments, as well. The NDAA amendments to Title III of JTPA are provided below, along with the relevant provisions of the interim final JTPA regulations. STATE PLAN A. Section 311(b)(3)(D) has been amended to read as follows: "The State unit will . . . provide technical assistance and advice to sub state grantees, including immediate notification to sub state grantees of current or projected permanent closures or substantial layoffs in the sub state area of such grantee to continue and expand the services initiated by the rapid response teams;" 631.30(a)(8) of the interim final regulations reads as follows: "The State dislocated worker unit or office shall...Immediately notify (within 48 hours) the appropriate sub state grantees following receipt of an employer notice of layoff or plant closing or of any other information that indicates a projected layoff or plant closing by an employer in the grantee's sub state area, in order to continue and expand the services initiated by the rapid response team (Section 311(b)(3)(D);" B. Section 311(b)(11) has been added and reads as follows: "the State unit will provide the Secretary with a cost breakdown of all funds made available under this title used by such unit for administrative expenditures;" 631.15 of the interim final regulations reads as follows: "Notwithstanding the requirements described in Subpart D of Part 627 of this chapter, the Governor shall report to the Secretary pursuant to instructions issued by the Secretary for programs and activities funded under this part. Such reports shall include a cost breakdown of all funds made available under this part used by the Dislocated Worker Unit for administrative expenditures, in accordance with instructions issued by the Secretary. Reports shall be provided to the Secretary within 45 calendar days after the end of the report period. (Sections 165(a)(2) and 311(b)(11))" C. Section 311(b)(12) has been added and reads as follows: "the State will not transfer the responsibility for the rapid response assistance functions of the State unit under Section 314(b) to another entity, but the State may contract with another entity to perform rapid response assistance services." ~631.30(b) of the interim final regulations reads as follows: "The dislocated worker unit shall have one or more rapid response specialists, and the capability to provide rapid response assistance, on-site, for dislocation events such as permanent closures and substantial layoffs throughout the State. The State will not transfer the responsibility for the rapid response assistance functions of the State dislocated worker unit to another entity, but the State may contract with another entity to perform rapid response assistance services. Nothing in this paragraph shall remove or diminish the dislocated worker unit's accountability for ensuring the effective delivery of rapid response assistance services throughout the State. (Section 311(b)(12))" RAPID RESPONSE D. Section 314(b)(3) has been added and reads as follows: "The Secretary shall oversee the administration by each State of the rapid response assistance services provided in such State and the effectiveness, efficiency, and timeliness of the delivery of such services. If the Secretary determines that such services are not being performed adequately, the Secretary shall implement appropriate corrective action, including, where necessary, the selection of a new rapid response assistance service provider." 631.17 of the interim final regulations reads as follows: "The Secretary shall conduct oversight of State administration of programs under this part, including the administration by each State of the rapid response assistance services provided in such State. The Secretary may review and determine the effectiveness, efficiency and timeliness of service conducted by the State in accordance with 631.30(b) of this part, and may specify any corrective actions deemed appropriate and necessary. (Section 3l4(b)(3))" E. Section 314(b)(4) has been added and reads as follows: "For purposes of rapid response assistance provided by a State dislocated worker unit, the term 'substantial layoff' means a layoff of 50 or more individuals." 631.2 of the interim final regulations includes the following: "Substantial layoff (for rapid response assistance) means any reduction-in-force which is not the result of a plant closing and which results in an employment loss at a single site of employment during any 30 day period for at least 50 employees (excluding employees regularly working less than 20 hours per week). (Section 314(b)(4))" 631.30(b)(6) of the interim final regulations reads as follows: "Notwithstanding the definition of 'substantial layoff (for rapid response assistance)' at 631.2 of this part, the Governor may, under exceptional circumstances, authorize rapid response assistance provided by a State dislocated worker unit when the layoff of 50 or more individuals is not at a single site of employment or is not during a single 30 day period. For purposes of this provision, "exceptional circumstances" include those situations in which layoffs or permanent closures would have a major impact upon the community(ies) in which they occur. (Section 314(b))" NEEDS-RELATED PAYMENTS F. Section 314(e)(1) has been amended to read as follows: "Funds allocated to a sub state grantee under section 302(D) may be used pursuant to a sub state plan under section 313 to provide needs-related payments to an eligible dislocated worker who is unemployed and does not qualify or has ceased to qualify for unemployment compensation in order to enable such worker to participate in training or education programs under this Title...." 631.20 of the interim final regulations reads as follows: "Title III funds . . . may be used to provide needs-related payments to . . . [a]n eligible worker who has ceased to qualify for unemployment compensation . . . Needs-related payments shall not be provided to any participant for the period that such individual is employed, enrolled in or receiving on-the-job training, out-of-area job search, or basic readjustment services in programs under the Act, nor to any participant receiving trade readjustment allowances, on-the-job training, out-of-area job search allowances, or relocation allowances under Chapter 2 of Title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.) or Part 617 of this chapter. (Section 314(e)(1))" CLARIFICATION OF DEFINITION OF ELIGIBLE DISLOCATED WORKERS FOR CERTAIN SERVICES. G. Section 314(h) has been added and reads as follows: "CLARIFICATION OF DEFINITION OF ELIGIBLE DISLOCATED WORKERS FOR CERTAIN SERVICES. "(1) The term 'eligible dislocated workers' includes individuals who have not received specific notice of termination or lay off and work at a facility at which the employer has made a public announcement that such facility will close (except those individuals likely to remain employed with the same employer or likely to retire instead of seeking new employment) - "(A) with respect to basic readjustment services provided under paragraphs (1) through (14), (16), and (18) of subsection (c); and "(B) with respect to services provided under this section beginning 180 days before the date on which the facility is scheduled to close. "(2) Services described in paragraph (l)(A) and provided to the individuals described in paragraph (1) shall to the extent practicable be funded under section 302(c)(1)." 631.3(b) of the interim final regulations reads as follows: "(b)(1) Except as provided in paragraph (b)(3) of this section, workers who have not received an individual notice of termination but who are employed at a facility for which the employer has made a public announcement of planned closure shall be considered eligible dislocated workers with respect to provision of basic readjustment services specifically identified in section 314(c) of the Act with the exception of supportive services and relocation "(2) Such individuals identified in (b)(1) of this section shall be eligible to receive all services authorized in sections 314 of the Act after a date which is 180 days prior to the scheduled closure date of the facility, subject to the provisions of 631.20 of this part and other applicable provisions regarding receipt of supportive services. "(3) Paragraphs (b)(1) and (b)(2) of this section shall not apply to individuals who are likely to remain employed with the employer or to retire instead of seeking new employment. "(4) For the purposes of paragraph (b)(l) of this section, the Governor shall establish criteria for defining 'public announcement'. Such criteria shall include provisions that the public announcement shall be made by the employer and shall indicate a planned closure date for the facility. (Section 314(h))" 631.41(g) of the interim final regulations reads as follows: "Basic readjustment services described in 631.3(b)(1), provided to individuals who have not received a specific notice of termination or layoff and work at a facility at which the employer has made a public announcement that such facility will close, shall to the extent practicable be funded by the State with funds reserved under 631.32(c). (Section 314(h))" TERMINATION NOTICE FOR CIVILIAN DEFENSE EMPLOYEES H. Section 325(e) has been added and reads as follows: "NOTICE OF TERMINATION FOR CERTAIN DEFENSE EMPLOYEES. "(1) In General. A civilian employee of the Department of Defense employed at a military installation being closed or realigned under the laws referred to in paragraph (2) shall be eligible for training, adjustment assistance, and employment services under subsection (a) beginning on the date on which such employee receives actual notice of termination, or the date determined by the Secretary of Defense under paragraph (3), whichever occurs earlier. "(2) CERTAIN DEFENSE LAWS - The laws referred to in this paragraph are - "(A) the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note); and "(B) title II of the Defense Authorization Amendments and Base Closure and Realignment Act (Public Law 100-526; 10 U.S.C. 2687 note). "(3) DATE. The date determined under this paragraph is the date that is 24 months before the date on which the military installation is to be closed or the realignment of the installation be completed, as the case may be." This provision is not reflected in current regulations. 5. Action Required. States should take actions necessary and appropriate to comply with the NDAA amendments to Title III of JTPA.

References: a. The Job Training Partnership Act (JTPA), as amended; b. Goals 2000: The Educate America Act; c. School-to-Work Opportunities Act of 1994; d. JTPA Final Rules, as published in the Federal Register on September 2, 1994; e. Training and Employment Guidance Letter No. 4-94 (December 19, 1994): "JTPA Titles II-A, II-C, and III Allotments for Program Year (PY) 1994; Title II-B Allotments for Calendar Year (CY) 1995; and Wagner-Peyser Preliminary Planning Estimates for PY 1994"; f. Training and Employment Guidance Letter No. 5-93 (April 11, 1994): "Summer Challenge II: A Program of Work and Learning for America's Youth"; g. Training and Employment Information Notice No. 6-93 (July 30, 1993): "Instructions for the Title II Job Training Partnership Act (JTPA) Quarterly Financial Status Report" and Change 1 to this TEIN (January 13, 1994); h. Training and Employment Information Notice No. 33-92 (June 1, 1993): "Child Labor Restrictions Applicable to Youth Participants in Job Training Partnership Act (JTPA) Funded Programs"; i. Training and Employment Information Notice No. 25-93 (November 23, 1993): "Job Training Partnership Act (JTPA) Youth Assessment and Program Design Options Technical Assistance Guides". Background a. Budgetary Concerns. While we recognize that the House Appropriations Committee has proposed elimination of all funding for the Title II-B Summer Youth Employment and Training Program (SYETP) for CY 1995, planning for the 1995 summer youth program needs to continue in the event that final action on Department of Labor appropriations allows the Title II-B program to go forward. A successful program requires early, orderly, and careful planning, procurement, recruitment, and negotiation of agreements with local business, public/private organizations and educational institutions, as well as staff training sessions. Therefore, consistent with our regular program cycle, we are issuing this Training and Employment Guidance Letter (TEGL) to provide necessary guidance to States and local communities to facilitate program planning and operations. Federal funds, expended prior to a notice by the Department of Labor of a rescission, which were provided to States (Service Delivery Areas) to operate the 1995 summer youth program in accordance with the SDAs' job training plans will not be deobligated by the Department of Labor.

Reference: Final JTPA Regulations, 20 CFR 627.201, published in the Federal Register on September 2, 1994. Background: One of the major changes in the above-referenced September 2, 1994, JTPA final regulations is the addition of a new section, 20 CFR 627.201, "Waivers." This section, unlike the rest of the final regulations, became effective 30 days from the date of publication of the JTPA final rule in the Federal Register-- October 3, 1994. This was intended to complement the Department's desire to enable States, service delivery areas (SDA's), and Title III substate grantees (SSG's) to implement beneficial changes in the final rule as quickly as they choose, as provided for in the final rule, and to apply for waivers of regulatory provisions to be effective before the beginning of Program Year (PY) 1995 and thereafter. The purpose of the new waiver provision was to be responsive to suggestions and comments which have stated that some of the administrative burden or unintended effect of many regulatory requirements may be reduced through the granting of waivers. In addition to receiving this type of suggestion through the formal regulations comment process, the Department also heard this belief echoed during its recent "JTPA Dialogue" and dislocated worker "Next Steps" meetings. In addition, this was also recommended in Vice President Gore's Report of the National Performance Review--From Red Tape to Results: Creating a Government that Works Better & Costs Less--which was published in September 1993. The Department believes that in order to be responsive to the needs of the JTPA system, some guidance is appropriate in order to maintain consistency in the way that waivers are handled at the Federal level. Accordingly, the Department is issuing the attached guidance to assist Governors in submitting requests for JTPA regu-latory waivers pursuant to 20 CFR 627.201. The Department expects that, as experience is gained regarding specific waiver requests, information will be created which we anticipate will be useful in future policy deliberations, including possible regulatory revisions. Also, as the waiver process evolves, it may be adjusted to respond to concerns and issues that may surface in handling such requests. The States may be contacted periodically for their views on the effectiveness of the waiver process and on the ways the process might be improved and made more responsive. Action: States are requested to share the attached information with appropriate individuals within the State, as well as with their SDA's and SSG's. States are also encouraged to develop as soon as possible standardized internal procedures/mechanisms for SDA/SSG submission of waiver requests to the State, as well as procedures/processes for State evaluation of local level waiver requests. The procedures established should conform to the provisions of 20 CFR 627.201 and the information contained herein.

References: JTPA, as amended; JTPA Regulations, 20 CFR Parts 629 and 630 as published in the Federal Register on September 22, 1989; Preamble to the JTPA Interim Final Regulations, as published in the Federal Register on December 29, 1992. Background: President Clinton included an expanded and enriched summer jobs program for economically disadvantaged youth in his economic stimulus proposal announced on February 17, 1993. The House of Representatives passed a supplemental appropriation bill which provided policy guidance on the program, through both the bill itself and the Appropriations Committee Report. The Senate has the matter under consideration but, as of this writing, no final Congressional action has been taken. However, in recognition of the planning time required to design an effective program, the Employment and Training Administration (ETA) is issuing this directive to provide the JTPA system with a policy framework in which the 1993 Summer Challenge is expected to operate. As with the preliminary planning estimates issued on March l, 1993, final policy guidance awaits the enactment of the supplemental appropriation into law. At that time, the policy framework articulated in this directive will be either confirmed or modified, as appropriate. Goals for the CY 1993 Summer Program: In addition to the purposes of the Summer Youth Employment and Training Program set forth in the statute, ETA has established the following goals: a. Ensure that youth have meaningful, well-supervised work experiences which: (1) demonstrate the value of the work performed to the individual and to the neighborhood or community; (2) ensure that the youth acquire basic work competencies and discipline, such as: working and completing assignments as directed by overall leadership and front-line supervision; showing up for work regularly, on time, and with a positive attitude; working as a member of a team; demonstrating sound reasoning abilities; and exercising independent judgement. (3) reinforce the relationship between the skills acquired on the job and what is learned in an educational setting. b. Ensure that enrollees are provided academic enrichment which, at a minimum, counteracts the erosion of basic educational skills associated with the summer months and, to the extent possible, increases the level of educational skills, particularly reading and mathematics. c. Provide income for work to economically disadvantaged youth to benefit them, their families, and their communities; d. Enhance the level and quality of public services provided to distressed neighborhoods and communities; e. Achieve the stimulus objective of providing well-supervised, productive jobs to as many eligible youth as possible this summer; f. Preserve the integrity of the funds by implementing sound administrative systems (e.g., time and attendance; payroll) which can adequately absorb the program expansion; g. Use this summer's experience as a means to further enhance and enrich subsequent summer jobs programs in such areas as: (1) innovative educational components; (2) the relationship between success in the world of work and educational attainment; (3) providing year-round services to youth to preserve educational gains achieved in the summer. Key New Feature: Academic Enrichment: The President, the Congress, the Secretary of Labor and the Secretary of Education have placed a high priority on enriching academic services to maintain and improve basic educational skills for all summer youth enrollees during the school vacation period(s). a. Academic enrichment activities should typically include: (1) assessment of the basic skills and supportive services needs of each participant; (2) skill-based instruction in reading and math; (3) curricula matched to the learning levels and interests of each individual participant; (4) use of educational technology as an integral part of participant learning; (5) not less that 90 hours of academic enrichment instruction during the period of participation, except where fewer or more hours are indicated by the participant assessment; (6) pre- and post-testing of participants' reading and math skill levels and gains, utilizing instruments appropriate to an individual's age. (The use of existing test results, such as those available from a public school system, is allowable, provided that they reflect a participant's current achievement level so that gain as a result of enrollment in the Summer Challenge can be identified.) While improvement in reading, math, and other educational competencies (e.g., science) are the primary emphases, this does not preclude the provision of other services and activities which have a direct correlation with improving educational performance and/or which enhance the citizenship skills of youth. Innovative approaches to all aspects of academic enrichment, tailored to the widely varying backgrounds and skill levels of the youth, are strongly encouraged. b. In furtherance of these ends: (1) a percentage or a fixed amount of supplemental funds will be earmarked for academic enrichment activities which: (a) can be spent only on such activities; (b) cannot be part of the ten percent of Title II-B funds which can be transferred to JTPA Title II-C; (c) is expected to be spent during the CY 1993 summer program; and (d) cannot include participant wages and/or other payments for time spent in academic enrichment. [Note: Participants may be paid wages and/or other payments while attending academic enrichment activities. What is being said here is that the source of such payments cannot be the earmarked academic enrichment funds.] (2) the academic enrichment funds cannot be used to supplant other Federal, State or local funds for existing academic services or activities and such funds should be an addition to the funds expended on remediation in the CY 1992 summer jobs program. (3) to the extent feasible, public educational systems should be utilized to provide academic enrichment services; (4) to the extent feasible, certified teachers should be utilized to deliver educational services. The use of teacher assistants, teacher aides, student teachers, community-based educators, etc. is allowable; however, these personnel should perform under the direction of certified teachers and/or certified educational administrators to the extent possible. Technical Assistance and Training: The Department of Labor (DOL) and the Department of Education (DOE) are committed to providing and arranging for as much technical assistance and training as needed. a. National Practitioners Work Group. The two Departments have established a work group consisting of individuals who have been successful in providing training, employment services and academic enrichment to youth. This group will identify successful program models, refine them as needed, and advise DOL and DOE on the most effective means of assisting States and SDAs in utilizing the models. To the extent feasible, these practitioners will also directly deliver technical assistance and training. b. State Practitioners Network. States are expected to establish a State Practitioners Network comprised of representatives of State and SDA staff; public educators; service providers, including community-based organizations; and other appropriate individuals. Members of the Network should have proven expertise in youth programs. Responsibilities of this peer group Network should include: (1) Providing technical assistance and training to SDAs and, in conjunction with SDAs, service providers, in program design and operations; (2) Reviewing, to the extent feasible, the summer jobs program plans of SDAs for the purpose of advising the State JTPA administrator as to whether such plans are satisfactory, particularly with regard to academic enrichment and worksite supervision; (3) Assistance to the State in the oversight of the Summer Challenge. States can meet this requirement by using existing structures such as Youth Service/Resource Networks or other similar entities which meet the membership and functional requirements listed above. c. Redirection of Current ETA Contractors. ETA is concluding negotiations with Brandeis University and its major subcontractor, Public/Private Ventures (P/PV), to enlist their efforts to provide technical assistance and training for the 1993 Summer Challenge. (1) Brandeis will prepare a program "primer" covering all aspects of the Summer Challenge, but with particular emphasis on academic enrichment and worksite supervision. (2) P/PV will replicate its academically enriched Summer Training and Education Program (STEP) in 75 SDAs where the SDAs and States make a commitment to utilize the STEP model. Private Sector Summer Jobs Campaign: When President Clinton presented his economic stimulus proposal to a joint session of Congress, he challenged the private sector to match the public sector effort in providing jobs to needy youth. With the assistance and support of business leaders and organizations, DOL will be promoting a National private sector summer jobs campaign. But the success of such a campaign rests on the efforts of localized public/private initiatives. Accordingly, DOL and National business organizations will be working with localities to activate local private sector summer jobs campaigns. Thus far, a large number of large corporations and business associations (e.g., the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Alliance of Business) are committed to working with DOL. We expect other firms and private sector organizations to join DOL in this effort. States and localities are strongly urged to mount private sector summer jobs campaigns. Program Oversight and Monitoring: If the Summer Challenge is to be met, an energized oversight and monitoring effort is required at all levels: Federal, State, SDAs, and service providers. Further, such efforts must begin during the program design phase--the relative shortness of the summer program allows precious little time for corrective action once operations begin. Oversight and monitoring of program operations is essential to avert operational crises and to keep the program operating effectively. ETA Regional Offices and the States must coordinate their oversight efforts with SDAs to avoid duplication and undue burdens on SDAs and service providers. State Role/Responsibilities: ETA anticipates that up to three percent of the funds allocated to the SDAs within a State for academic enrichment may be used by the State for program administration, technical assistance, and oversight. ETA expects that most of these funds will be used for technical assistance and oversight, as described earlier in this issuance. Reporting and Data Collection: It is clear that the Summer Challenge will create a substantial demand for information on the progress of SDAs in achieving the Summer Challenge goals, especially enrollment and expenditure data. In anticipation of these information needs, States and SDAs should make preparations to: a. Provide information on planned total enrollment and planned total expenditures for the entire summer program, broken out by overall total and academic enrichment; b. Report cumulative total enrollment and cumulative enrollment in academic enrichment activities on a bi-weekly basis; c. Report monthly expenditures, broken out by overall total and by academic enrichment; d. Maintain information on pre- and post-assessment educational attainment levels for each individual; e. Submit SYETP end-of-program reports by November 15, 1993. Evaluation: Utilizing organizations recognized as having expertise in youth programs, ETA will evaluate the 1993 Summer Challenge program against four basic objectives: a. Acquisition of work competencies; b. Prevention of educational skills erosion; c. Stimulus effect; d. Impact on neighborhoods and communities. As an integral part of its evaluation endeavors, ETA will identify program designs and operational practices which prove useful in accomplishing these objectives and the goals specified in section four of this issuance. These can then form the basis for additional program enhancements for ensuing summers. Additional information on the evaluation process will be forthcoming in a future issuance. States' and SDAs' cooperation in the evaluation process is requested. Additional Guidance: More specifics on the policy guidance presented above will be forthcoming. In addition, working through its Regional Offices, ETA will operate a question-and-answer system as an integral, but identifiable, part of its JTPA Q&A system. Readers will note the "Sum Chal" classification and number in the upper right hand corner box of this directive. Because of the high priority attached to the Summer Challenge, this identification will be used to help you keep track of all issuances generated by this program. This identification scheme amplifies, but does not change, the regular TEGL and TEIN numbering system. States are strongly urged to transmit this and other TEGLs and TEINs to the SDAs as quickly as possible. In turn, States should strongly encourage SDAs to expeditiously provide relevant guidance to service providers. Success demands a truly "team effort" and information must be shared as rapidly as possible with all of those involved in the Summer Challenge. ETA is actively exploring ways of providing information via electronic bulletin boards so that the JTPA system may be kept fully informed. However, it is not our intent to interfere in State program guidance.

Background: A number of States have inquired about whether or not it is permissible to "support or supplement" "training" funds which have been carried forward with "administration" funds allocated for another program year. More broadly, the question is how to treat any unspent funds, whether "administration" or "training" funds, which are carried forward to a subsequent program year. Many States, service delivery areas (SDAs), substate grantees (SSGs), and other subrecipients, upon receipt of their program year allocation, divide the allocation into fund accounts corresponding to the JTPA cost categories. The administration fund budget is usually set at the 15% or 20% maximum limit, and retraining services/direct training services is set at the 50% minimum limit. As costs are incurred in the delivery of program services, each fund account (cost category) is charged for its share of costs. Although SDAs/SSAs are likely to have most of a current year's allocation expended at the end of the program year, any unexpended fund balances are carried forward into the second year (or even the third year) and costs continue to be charged to each category, usually on a first-in, first-out (FIFO) basis. Section 161(b)(1) of the Act provides that JTPA funds appropriated for any program year are available for expenditure during that program year and the subsequent two program years. During the period of availability, the appropriated funds may be expended for any allowable JTPA cost, subject to the cost category limitations. Sections 108(b)(4) and 315(c) of the Act provide that of the funds allocated to a subgrantee for any program year, not more than 20% or 15% (depending on the Title) may be expended to cover the costs of administration. The JTPA regulations at 20 CFR 627.445(c)(2) and 20 CFR 631.14(g) indicate that States, SDAs and SSGs have the full three year period of fund availability to comply with the cost limitations. The relevant regulatory provisions require that expenditures be reported by program year of appropriation [20 CFR 627.455(d)(1)] and that administrative and other costs be charged to a JTPA program based on benefits received by that program [20 CFR 627.440(a)]. Interpretations: The first interpretation argues that each program year allotment is a separate grant and therefore a discrete program. In other words, if a grantee expends all of its allotted "administration" funds (20% of its PY 1 allocation) in year 1, but spends less than 100% of its allotted PY 1 "training" funds, then PY 2 "administration" funds cannot be used to support the expenditure of these carry-over "training" funds. This interpretation is based on the position that benefits derived from the expenditure of PY 1 funds on administration can accrue only to PY 1 program expenditures. Expenditure of PY 2 or PY 3 funds in support of the expenditure of PY 1 carry-over funds constitutes an impermissible "shifting of funds" in violation of 20 CFR 627.435(c). A second, alternative interpretation of the statutory and regulatory provisions gives greater weight to the three-year expenditure provisions of section 161(b)(1) of JTPA. This interpretation holds that the strict application of the "benefits received" test to individual grants has the effect of nullifying the three-year expenditure flexibility built into the statute. Under this alternative interpretation, funds from different PY appropriations may be expended along side each other for the operation of the "program" (e.g., Title II-A), as long as all other conditions governing allowability of costs are met. This means that funds appropriated for one PY are available for expenditures on "administrative costs" along side and in support of "program costs" charged to another PY allocation. Action Required: ETA will apply the second, more flexible interpretation in evaluating a State's expenditure of funds unless the State explicitly adopts the first, more restrictive interpretation. However, a State may adopt either of these two interpretations to govern the expenditure of JTPA funds in their individual States, and ETA will defer to the State's decision in this regard under 20 CFR 627.200(a)(1) of the regulations.

References: The Wagner-Peyser Act, as amended (P.L. 97-300); 20 CFR 652; TEGL No. 4-94. Background: The Secretary of Labor is issuing final planning allotments for each State's share of PY 1995 funds for basic labor exchange activities. These allotments (Attachment I) are based on the FY 1995 appropriation of $845,912,000 and are distributed by the statutory formula described in Section 6 of the Act. The allotments are also being published in the Federal Register. The data used are Calendar Year 1994 averages of civilian labor force (CLF) and number of unemployed individuals. Section 6(b)(4) of the Act authorizes the Secretary of Labor to reserve up to 3 percent of the total fund availability to assure that each State will have sufficient resources to maintain statewide employment service (ES) activities. The set-aside for distribution through an administrative formula for PY 1995 is $24,791,040. The 3 percent distribution is included in the total final allotment. The set-aside was distributed in two steps to States whose relative share of resources declined from the previous year. In Step 1, those States with a CLF below one million and that are also below the median CLF density were held harmless at 100 percent of their prior year relative share of resources. The remainder was distributed in Step 2 in pro rata shares to all other States that lost in relative share from the prior year but did not meet the size and density criteria for Step 1. Differences between preliminary and final planning estimates are caused by the use of Calendar Year data as opposed to the earlier data used for preliminary planning estimates and postage savings related to U.S. Postal Service changes in methodology of calculating charges and improved mail management practices. Postage costs incurred by States during the conduct of ES activities are billed directly to the Department of Labor by the U.S. Postal Service. The States' final allotments do not include $19,544,000 of the total amount available, which is withheld for the payment of the States' ES penalty mail costs. Action: State planning activities are to be guided by the process described in the Wagner-Peyser Act, Federal Regulations at 20 CFR Part 652, and planning guidance provided by ETA Regional Offices.

References: JTPA Sections 161 and 162, as amended by the Job Training Reform Amendments Act of 1992; Department of Labor Appropriations Act, P.L. 103-333 (for PY 1995); Training and Employment Guidance Letter No. 4-94; Public Law 104-6 (Defense Department supplemental). Background: On April 10, 1995, President Clinton signed Public Law 104-6, a Defense Department supplemental appropriation, which also contained a $200 million rescission to the PY 1995 Title II-C Youth Training Program grants. This represents a 33.4 percent reduction from the previously appropriated level of $598,682,000. A second rescission package is currently pending in Congress. The House bill contains a $310 million reduction to the program, while the Senate rescission would be $272 million. The effect of the Public Law 104-6 $200 million rescission is not in the House bill, but is reflected in the Senate bill reduction; thus the possibility remains for a further reduction that could be in the range from $110 million to $272 million. The House/Senate conference to finalize the rescissions package is expected to occur during the week of May 8 and it is expected that the final bill will go to the President by May 29. Implementation: The attached table shows the $200 million reduction by State, and is being provided for planning purposes. The final revised Title II-C allocations will not be issued until final action is taken on the second bill. Notices of Obligation (NOOs) will be issued on or about July 1, 1995. One option for dealing with the Title II-C reductions is the flexibility provided by the Act to shift up to 10 percent of Title II-A funds, and/or 20 percent of Title II-B funds to Title II-C, provided such transfers are described in the Job Training Plan and approved by the Governor (20 CFR Part 628.550). Also, the Senate rescission bill includes language that would authorize transfers of up to 50 percent from II-B to II-C. Final Conference action will determine whether that provision stays. States and SDAs should ensure that all subgrants and subcontracts contain a clause which limits these agreements to the availability of Federal funds. Action: States are requested to begin adjusting their PY 1995 planning efforts in light of the information contained in this issuance and to advise their SDAs to do the same.

Background: Section 106 of JTPA directs the Secretary to establish performance standards for adult, youth, and dislocated worker programs. These standards are normally updated every two years based on the most recent JTPA program experience and on program emphases and goals established by the Department. The Secretary also issues instructions for implementing standards and parameter criteria for States to follow in making adjustments to the Title II-A performance standards. Program policies and relevant standards have remained unchanged since Program Year 1990. The Department did not update its performance standards levels in Program Year 1992 in order to maintain program management continuity amidst uncertainty about the passage of the ma Amendments and economic conditions. Program Year 1991 data indicate that outcomes have continued to decline since 1988 -- the reference year for the current standards. In addition, the Department's adjustment model cannot adequately account for decreased opportunities caused by slow economic growth. JTPA Program Performance in 1991: A review of 1991 data shows a trend of declining SDA performance on the employment-related standards (i.e., the adult and welfare follow-up employment rates and the youth entered employment rate). Thus, despite the Department's intent in setting the standards at levels that 75% of SDAs can be expected to meet or exceed, only about 65% of SDAs met or exceeded their employment-related standards in 1991. There is little reason to believe that outcomes have declined because the quality of SDA services decreased. Rather, because of the program's sensitivity to the economic environment, the most likely explanation for the employment rates is the decline in job opportunities associated with slow economic growth. Although economic conditions are improving, they have not yet been accompanied by increased employment -- and continued slow employment growth is forecast for the near future. It is likely to be some time before job opportunities improve for JTPA participants, and lower program outcomes for the employment-related standards can therefore be expected to continue in Program Years 1992-1993. Effects of Current Standards on State Incentives and Sanction Determinations: Maintaining employment standards at current levels would unfairly penalize SDAs for the effects of economic conditions and discourage enrollment of more difficult-to-serve populations. This would be unproductive and contrary to DOL's intent in setting performance standards; that is, holding SDAs harmless for factors outside their control. Secretary's Revised National Numerical Standards for Program Years 1992-1993: To ease the implementation of the Amendments and to further the Department's goal of increased service to hard-to-serve populations, the Department has decided to update the national standards to levels that 75% of SDAs can be expected to exceed -- the Department's traditional benchmark. This will result in slightly lower employment-related standards and a slightly higher standard for the youth employability enhancement rate -- reflecting performance improvements that have come with an increased program focus on skill-enhancing efforts for youth. The Title II-A earnings measures will remain at current levels. The revised Title II-A standards are: -- Adult Follow-Up Employment Rate 60% -- Welfare Follow-Up Employment Rate 46% -- Youth Entered Employment Rate 41% -- Youth Employability Enhancement Rate 36% The following standards remain unchanged: Title II-A: -- Adult Weekly Earnings at Follow-Up $228 -- Welfare Weekly Earning at Follow-Up $207 Title III: -- Title III Entered Employments Rate 64% Implementing Provisions: Implementation provisions remain unchanged. Please refer to section 6, TEGL No. 9-89, dated June 29, 1990 for these provisions. Performance Standards Provisions for Title III: Provisions for Title III remain unchanged as no drop in program performance has been noted. Please refer to section 7, TEGL No. 9-89, dated June 29, 1990 for these provisions. State Action: States are to distribute this Guidance Letter to all relevant officials within the State responsible for implementing performance management policies and requirements for Program Years 1992-1993. A copy of this Guidance Letter is also being sent to State JTPA Liaisons, the State Wagner-Peyser Administering Agencies and the State Worker Adjustment Liaisons.

References: (a) Sections 314(c), 315(a) and 315(b) of the Job Training Partnership Act, as amended; (b) Sections 631.14(a), 631.14(b) and 631.20(b)(1) of the JTPA Regulations (Federal Register, September 4, 1994); (c) National Reserve Account Application Guidelines; (d) TEGL No. 10-94, "Needs-Related Payments in National Reserve Account (NRA) Projects under Title III of the Job Training Partnership Act (JTPA)", April 24, 1995. Effective Dates: The statutory and regulatory provision changes described herein are effective for funds appropriated for Program Year 1995 (during the period of availability, or until expended whichever occurs first). Statutory Provisions: The Conference Report from the Committee on Appropriations states that in order to enable States and local communities to deliver efficient and effective Title III readjustment programs, P.L. 103-333 (excerpt attached) adds greater flexibility in three areas. The 1995 Appropriations Act provides-- "that funds used from this Act to carry out title III of the Job Training Partnership Act shall not be subject to the limitation contained in subsection (b) of section 315 of such Act; "that the waiver allowing a reduction in the cost limitation relating to retraining services described in subsection (a)(2) of such section 315 may be granted with respect to funds used from this Act if a substate grantee demonstrates to the Governor that such waiver is appropriate due to the availability of low-cost retraining services, is necessary to facilitate the provision of needs-related payments to accompany long-term training, or is necessary to facilitate the provision of appropriate basic readjustment services; and "that funds used from this Act to carry out the Secretary's discretionary grants under part B of such title III may be used to provide needs-related payments to participants who, in lieu of meeting the requirements relating to enrollment in training under section 314(e) of such Act, are enrolled in training by the end of the sixth week after grant funds have been awarded." Policy: As a result of the P.L. 103-333 and the direction provided in the Conference Report from the Committee on Appropriations, this TEGL provides for the following Title III policy guidance for the administration of PY 1995 funds: a. Supportive Services and Needs-related Payments Cost Limitation: The twenty-five (25) percent spending limit contained in Sec. 315(b) of the Act and 20 CFR 631.14(b) for supportive services and needs-related payments under Title III is removed for programs operated with PY 1995 funds. Programs operated by the States and Substates with Part A formula block grants may be adjusted for PY 1995 according to State and Substate procedures. Cost limitations for projects being operated under Part B, Sec. 322 (Secretary's National Reserve Account) may be funded based upon the grant application and the award signed by the Grant Officer. b. Retraining Expenditure Minimum: The Conference Report states that this language modifies the State waiver authority under Sec. 315(a) permitting the Governor to reduce to 30 percent the requirement that not less than 50 percent of the funds be used for retraining services. The Report concludes that this language will enable local areas to determine the appropriate share of resources for up- front, cost-effective readjustment services that can facilitate rapid reemployment. Therefore, P.L. 103-333 modifies Sec. 315(a)(2) of the Act authorizing a Governor to waive the 50% retraining require- ment if a Substate Grantee demonstrates to a Governor that such waiver: (1) is appropriate due to the availability of low-cost retraining services; (2) is necessary to facilitate the provision of needs- related payments to accompany long-term training; or (3) is necessary to facilitate the provision of appropriate basic readjustment services. States are responsible for implementing systems which provide for Substate Grantees to request waivers pursuant to this provision. c. Enrollment in Training or Education Requirement for Needs-Related Payment Eligibility: The Conference Report states that this change allows for funds "awarded under the National Discretionary Grant Program to be used to provide needs-related payments to participants who, in lieu of meeting the general EDWAA requirement that they be enrolled in training by the 13th week after layoff, have enrolled in training or education by the end of the 6th week after the grant is awarded." The Report continues that this provision adds appropriate flexibility while "preserving the principle that retraining is most effective if individuals are enroll- ed in training early in the adjustment process." Therefore, grants awarded by the Department with National Reserve Account (Part B) PY 1995 funds shall include provisions allowing for participants to meet the "enrolled in training prerequisite" if they are enrolled in training or education programs by the end of the sixth week after funds have been awarded. This provision will be included in all National Reserve Account grants (except Additional Financial Assistance) which authorize expenditures for-4- needs-related payments, including projects under Sections 322 and projects like those authorized under Sections 325 (Defense Conversion Adjustment Program), 325A (Defense Diversification Program), and 326 (Clean Air Employment Transition Assistance). Action: For Part A, formula funds: States should take actions necessary and appropriate to advise Title III staff, Substate Grantees and other entities of the information provided in this TEGL in order to ensure the efficient and effective delivery of Title III readjustment programs consistent with these provisions. For Part B, NRA grant applicants: States should take actions necessary and appropriate to advise Title III staff, Substate Grantees and other entities of the provisions relating to needs- related payments in projects operated with the Secretary's Discretionary PY 1995 funds. These provisions are effective only for programs operated with funds appropriated for Program Year 1995.

Reference: Sections 325A and 326, Job Training Partnership Act (JTPA), as amended. Discussion: Some JTPA programs use 70 percent of the Lower Living Standard Income Level (LLSIL) in determining economically disadvantaged status. In determining eligibility for needs-related payments for Clean Air Employment Transition Assistance (CAETA) and Defense Diversification Programs (DDP) grants under Title III, Section 326(f) (and by reference Section 325A(i)) provides for the use of the LLSIL (100 percent). Attached is an information package which includes: 1) the tables for the 1995 LLSIL adjusted to reflect 100 percent of the LLSIL; 2) the Federal Register notice (April 25, 1995 and May 8, 1995) which explains how to use these tables; and 3) the poverty guidelines for 1995 (Federal Register, February 8, 1995) issued by the U. S. Department of Health and Human Services which are used in determining the level of the needs-related payments. These are to be used by grantees operating dislocated worker projects under the CAETA or DDP guidelines. Action: States should make this information available to all appropriate officials and staff who deal with Title III.