[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