(a) Action by the Department of Labor. When a State agency fails,
for an extended period, to meet the standard set forth in Sec. 640.4 or
the criteria specified in Sec. 640.5, or fails to show satisfactory
improvement after having submitted a benefit payment performance plan of
action, the Department of Labor shall pursue any of the following
remedial steps that it deems necessary before considering application of
the provisions of Sec. 640.2:
(1) Initiate informal discussion with State agency officials
pursuant to Sec. 601.5(b) of this chapter.
(2) Conduct an evaluation of the State's benefit payment processes
and analyze the reasons for the State's failure to meet the standard.
(3) Recommend specific actions for the State to take to improve its
benefit payment performance.
(4) Request the State to submit a plan for complying with the
standard by a prescribed date.
(5) Initiate special reporting requirements for a specified period
of time.
(6) Consult with the Governor of the State regarding the
consequences of the State's noncompliance with the standard.
(7) Propose to the Governor of the State and on an agreed upon basis
arrange for the use of expert Federal staff to furnish technical
assistance to the State agency with respect to its payment operations.
(b) Action by the Assistant Secretary. If, after all remedial steps
have been exhausted, a State fails to take appropriate action, or
otherwise fails to meet the standard specified in Sec. 640.4, the
Assistant Secretary for Employment and Training shall, after taking all
factors into consideration, recommend to the Secretary of Labor that
appropriate notice be sent to the State agency and that an opportunity
for a hearing be extended in accordance with section 303(b) of the
Social Security Act.
