47770 Federal Register / Vol. 73, No. 158 / Thursday, August 14, 2008 / Proposed Rules 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

20 CFR Part 641 

RIN 1205–AB48 

Senior Community Service 

Employment Program; Notice of 

Proposed Rulemaking 

AGENCY: Employment and Training 

Administration, Labor. 

ACTION: Notice of proposed rulemaking 

with request for comments. 

SUMMARY: The Employment and 

Training Administration of the 

Department of Labor (Department) is 

issuing this Notice of Proposed 

Rulemaking (NPRM) to propose changes 

in the Senior Community Service 

Employment Program resulting from the 

2006 Amendments to title V of the 

Older Americans Act, and to clarify 

various policies. Key proposed changes 

include the introduction of a 48-month 

limit on participation, regular 

competition for national grants, and an 

available increase in the proportion of 

grant funds that can be used for 

participant training and supportive 

services. Comments on this proposed 

rule are welcome according to the dates 

listed below. 

DATES: Interested persons are invited to 

submit comments on this proposed rule. 

To ensure consideration, comments 

must be received on or before October 

14, 2008. Comments received after that 

date will be considered to the extent 

possible. Comments should be limited 

to the proposed changes and additions 

to the current regulations, all of which 

are discussed in the preamble to this 

NPRM, or to other changes to the 

current regulations which flow from the 

2006 Amendments. 

ADDRESSES: You may submit comments, 

identified by Regulatory Information 

Number (RIN) 1205–AB48, by either of 

the following methods: 

• Federal e-Rulemaking Portal: 

www.regulations.gov. Follow the Web 

site instructions for submitting 

comments. 

• Mail and hand delivery/courier: 

Written comments, disk, and CD–Rom 

submissions may be mailed to Thomas 

M. Dowd, Administrator, Office of 

Policy Development and Research, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Room N–5641, 

Washington, DC 20210. 

Instructions: Label all submissions 

with RIN 1205–AB48. 

Please be advised that the Department 

will post all comments received on 

www.regulations.gov without making 

any change to the comments, or 

redacting any information. The 

www.regulations.gov Web site is the 

Federal e-rulemaking portal and all 

comments posted there are available 

and accessible to the public. Therefore, 

the Department recommends that 

commenters safeguard any personal 

information such as Social Security 

Numbers, personal addresses, telephone 

numbers, and e-mail addresses included 

in their comments as such may become 

easily available to the public via the 

www.regulations.gov Web site. It is the 

responsibility of the commenter to 

safeguard his or her information. 

Also, please note that due to security 

concerns, postal mail delivery in 

Washington, DC, may be delayed. 

Therefore, the Department encourages 

the public to submit comments via the 

Internet as indicated above. 

Docket: The Department will make all 

the comments it receives available for 

public inspection during normal 

business hours at the above address. If 

you need assistance to review the 

comments, the Department will provide 

you with appropriate aids such as 

readers or print magnifiers. The 

Department will make copies of the rule 

available, upon request, in large print 

and electronic file on computer disk. 

The Department will consider providing 

the rule in other formats upon request. 

To schedule an appointment to review 

the comments and/or obtain the rule in 

an alternative format, contact the Office 

of Policy Development and Research at 

(202) 693–3700 (not a toll-free number). 

You may also contact this office at the 

address listed above. 

FOR FURTHER INFORMATION CONTACT: 

Sherril Hurd, Acting Team Leader, 

Regulations Unit, Office of Policy 

Development and Research, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Room N–5641, 

Washington, DC 20210; telephone (202) 

693–3700 (this is not a toll-free 

number). 

Individuals with hearing or speech 

impairments may access the telephone 

number above via TTY by calling the 

toll-free Federal Information Relay 

Service at 1–800–877–8339. 

SUPPLEMENTARY INFORMATION: The 

preamble to this proposed rule is 

organized as follows: 

I. Background—Provides a Brief Description 

of the Development of the Proposed Rule 

II. Section-By-Section Review of the 

Proposed Rule—Summarizes and 

Discusses Proposed Changes to the 

Senior Community Service Employment 

Program (SCSEP) Regulations 

III. Administrative Information—Sets Forth 

the Applicable Regulatory Requirements 

I. Background 

On October 17, 2006, President Bush 

signed the Older Americans Act (OAA) 

Amendments of 2006, Public Law 109– 

365 (2006 OAA). This law amended the 

statute authorizing SCSEP and 

necessitates changes to the SCSEP 

regulations. The Department’s 

Employment and Training 

Administration (ETA) promulgated an 

IFR on June 29, 2007 that implemented 

changes in the SCSEP performance 

measurement system required by the 

2006 OAA. This proposed rule proposes 

to implement the remainder of the 

changes in the SCSEP necessitated by 

the 2006 OAA, and to clarify various 

program policies. 

The SCSEP, authorized by title V of 

the OAA, is the only Federallysponsored employment and training 

program targeted specifically to lowincome older individuals who want to 

enter or re-enter the workforce. 

Participants must be unemployed, 55 

years of age or older, and have incomes 

no more than 125 percent of the Federal 

poverty level. The program offers 

participants training at community 

service employment assignments in 

public and non-profit agencies. The 

goals of the program are to move SCSEP 

participants into unsubsidized 

employment so that they can achieve 

economic self-sufficiency, and to 

promote useful opportunities in 

community service activities. In the 

2006 OAA, Congress expressed its sense 

of the benefits of the SCSEP, stating, 

‘‘placing older individuals in 

community service positions 

strengthens the ability of the individuals 

to become self-sufficient, provides 

much-needed support to organizations 

that benefit from increased civic 

engagement, and strengthens the 

communities that are served by such 

organizations.’’ OAA section 516(2). 

Many of the policy initiatives 

contained in the 2000 OAA, Public Law 

106–501, and reflected in the 2004 

SCSEP final rule, 69 FR 19014, Apr. 19, 

2004, are maintained in the 2006 OAA 

and this proposed rule. Other policies 

are amplified. Most notably, there is a 

greater emphasis on placing individuals 

in unsubsidized employment, as 

evidenced by the new 48-month 

limitation on participation in the SCSEP 

(OAA sec. 518(a)(3)(B); § 641.570 of this 

part); the new limitations on benefits 

(OAA sec. 502(c)(6)(A)(i); § 641.565 of 

this part); and the increase in available 

funds for training and supportive 

services to prepare participants for the 

unsubsidized workforce (OAA sec. 

502(c)(6)(C); § 641.874 of this part). A 

focus on the transition of participants 

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into unsubsidized employment allows 

more eligible individuals to be served 

by the SCSEP and thus to potentially 

benefit from employment opportunities 

and income gains. 

Coordination between the SCSEP and 

the programs under the Workforce 

Investment Act of 1998 (WIA), 29 U.S.C. 

2801 et seq., continues to be an 

important objective of the 2006 OAA. 

With the enactment of WIA in 1998, the 

SCSEP became a required partner in the 

workforce investment system. 29 U.S.C. 

2841(b)(1)(B)(vi). In 2000, Congress 

amended the SCSEP to require 

coordination with the WIA One-Stop 

Delivery System (Pub. L. 106–501 sec. 

505(c)(1)), including reciprocal use of 

assessment mechanisms and Individual 

Employment Plans (Pub. L. 106–501 sec. 

502(b)(4)). The underlying notion of the 

One-Stop Delivery System is the 

coordination of programs, services, and 

governance structures, so that the 

customer has access to a seamless 

system of workforce investment 

services. 

Consistent with current SCSEP 

practice, both WIA and the 2006 OAA 

require any grantee operating a SCSEP 

project in a local area to negotiate a 

Memorandum of Understanding (MOU) 

with the Local Workforce Investment 

Board. WIA section 121; OAA section 

511(b); see also OAA section 

502(b)(1)(O). The MOU must detail the 

SCSEP project’s involvement in the 

One-Stop Delivery System. In particular, 

SCSEP grantees/sub-recipients must 

make arrangements to provide their 

participants, eligible individuals the 

grantees are unable to serve, as well as 

SCSEP-ineligible individuals, with 

access to services available in the OneStop Centers. OAA secs. 510, 511; 

§§ 641.210, 641.220 of this part. 

Because the SCSEP is a required 

partner under WIA, SCSEP grantees and 

sub-recipients must ensure that they are 

familiar with WIA’s statutory and 

regulatory provisions. Congress is 

considering legislation to reauthorize 

WIA, and reauthorization may bring 

changes to the law. SCSEP grantees and 

sub-recipients must ensure that they 

keep current on any changes in WIA law 

that could impact their program. 

The 2006 OAA also increases the 

accountability of grantees by clearly 

requiring a competitive process for grant 

awards. This proposed rule implements 

the statute’s requirement that the 

national SCSEP grants be re-competed 

regularly, generally every four years. 

OAA section 514(a); § 641.490(a) of this 

part. This proposed rule also 

implements the statute’s requirement 

that a State compete its SCSEP grant if 

the current State grantee fails to meet its 

core performance goals for three 

consecutive years. OAA sec. 

513(d)(3)(B)(iii); § 641.490(b) of this 

part. 

In addition, the 2006 OAA establishes 

new funding opportunities for pilot, 

demonstration, and evaluation projects 

(OAA sec. 502(e); § 641.600–640 of this 

part), expands the priority-for-service 

categories (OAA sec. 518(b); § 641.520 

of this part), and modifies how the 

program determines income eligibility 

(OAA sec. 518(3)(A); § 641.510 of this 

part). 

To the extent that the 2006 OAA does 

not change the 2000 OAA, these 

proposed regulations do not change the 

statutory interpretations or policy 

positions that supported the current 

regulations. The SCSEP is an 

established program; we do not propose 

to begin anew with this proposed rule 

but rather build upon the regulatory 

framework that has developed over the 

years. The proposed changes, mostly 

necessitated by statutory revisions, are 

discussed further in the next section of 

the preamble. 

The Department notes that it will 

continue to use the name ‘‘Senior 

Community Service Employment 

Program’’ for this program, although the 

OAA refers to it in various terms. 

The Department solicits comments on 

this proposed rule. For ease of reading, 

the Department is publishing the full 

regulatory text for subparts B–F, H and 

I. The regulatory text that was amended 

in the IFR, which includes all of subpart 

G and some definitions in subpart A, is 

not reprinted here. With the exception 

of § 641.140 (definitions), the regulatory 

text herein includes the proposed 

changes as well as the several 

provisions that are unchanged. We are 

not reprinting unchanged definitions. 

The Department solicits comments on 

the proposed changes in this notice. We 

particularly invite comments, in 

accordance with the requirements of 

section 514(f) of the 2006 OAA, 

addressing any concerns that these 

proposed regulations significantly 

compromise the ability of grantees to 

serve their targeted populations of 

minority older individuals, in areas 

where substantial populations of 

minority individuals reside. 

II. Section-by-Section Review of the 

Proposed Rule 

This proposed rule amends subparts 

A–F, H, and I of part 641 of Title 20 of 

the Code of Federal Regulations. It 

proposes changes required by the 2006 

OAA, and proposes to clarify various 

policies. The Department previously 

promulgated an IFR, 72 FR 35832, June 

29, 2007, which addressed changes in 

the SCSEP performance measurement 

system required by the 2006 OAA. The 

IFR revised subpart G, which addresses 

performance accountability, and added 

several definitions to, and revised 

certain definitions within, subpart A 

that relate to the performance measures. 

The amendments that were contained in 

the IFR are not repeated here. 

The Department proposes to make 

two changes that affect many of the 

subparts. We now refer to sub-recipients 

along with grantees where the 

responsibility or requirement being 

discussed applies to not just the 

grantees, but their sub-recipients as 

well. We also change from the term 

‘‘community service assignment’’ to 

‘‘community service employment 

assignment’’ throughout this part to be 

consistent with a similar change in the 

language of the statute (see, e.g., OAA 

section 502(b)(1)(A)), and to emphasize 

the SCSEP’s goal of employment in 

addition to community service (OAA 

sec. 502(a)(1)). By including 

‘‘employment’’ in the phrase 

‘‘community service employment 

assignment,’’ the Department does not 

mean that participants have a right to 

long-term employment under the 

SCSEP, however. The SCSEP provides 

temporary, subsidized, part-time 

employment assignments to prepare 

older workers for unsubsidized 

employment as well as to provide 

valuable community services. 

Subpart A—Purpose and Definitions 

What Does This Part Cover? (§ 641.100) 

Section 641.100 provides an overview 

of each subpart of the SCSEP 

regulations. As reflected in paragraph 

(c) the Department proposes to change 

the name of the State Plan, and to 

include a reference to the Plan’s fouryear strategy, both in accordance with 

the 2006 OAA and as further described 

in the preamble for subpart C, below. 

We propose to add a phrase to the 

description of subpart D to clarify that 

subpart D contains provisions relating to 

the grant application and responsibility 

review requirements for ‘‘the 

Department’s award of SCSEP funds for 

State and National grants.’’ Subpart D 

does not apply to the pilot, 

demonstration, and evaluation grants 

described in subpart F. As is the case in 

the current regulations, proposed 

subpart F contains its own provision 

about applying for those grants (see 

§ 641.620). 

The Department proposes to revise 

paragraph (f) of the overview to indicate 

that subpart F provides the rules for 

pilot, demonstration, and evaluation 

projects as provided at section 502(e) of 

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47772 Federal Register / Vol. 73, No. 158 / Thursday, August 14, 2008 / Proposed Rules 

the 2006 OAA. These projects replace 

the private sector training projects that 

were authorized under section 502(e) of 

the 2000 OAA, Public Law 106–501. In 

paragraph (g) we propose to replace the 

reference to sanctions with a reference 

to corrective actions for failure to meet 

core performance measures, to mirror 

the language of the 2006 OAA (see, e.g., 

OAA section 513(d)). Finally, in 

paragraph (h), we describe subpart H as 

concerning the administrative 

requirements for SCSEP ‘‘funds’’ rather 

than SCSEP ‘‘grants’’ because many of 

the requirements contained in subpart H 

are not limited to grantees. 

What Is the SCSEP? (§ 641.110) 

This section briefly describes the 

SCSEP. We propose to add the word 

‘‘unemployed’’ to the description of 

individuals served to more thoroughly 

describe the program. In the past, 

grantees and applicants/participants 

have asked whether a person has to be 

unemployed to be eligible for the 

SCSEP. Unemployed is—and has been—

an eligibility requirement. Also, 

whereas in the current regulations the 

program description speaks of ‘‘placing’’

participants in ‘‘community service 

positions,’’ the Department now 

proposes to state that the SCSEP 

‘‘trains’’ participants in ‘‘community 

service employment assignments.’’ And, 

whereas the current regulations state 

that the SCSEP serves participants by 

‘‘assisting them to transition to 

unsubsidized employment,’’ we propose 

to clarify that the SCSEP serves 

participants by ‘‘assisting them in 

developing skills and experience to 

facilitate their transition to 

unsubsidized employment.’’ We 

propose this change to provide more 

specificity about the services the SCSEP 

provides and how these services 

advance the goal of unsubsidized 

employment. 

What Are the Purposes of the SCSEP? 

(§ 641.120) 

This section describes the purposes of 

the SCSEP, and is based on the 

statement establishing the program in 

section 502(a)(1) of the OAA. The 

Department proposes to revise this 

section in accordance with changes in 

the 2006 OAA, which rearranges the 

ordering of the purposes. In the 2006 

OAA, ‘‘foster[ing] individual economic 

self-sufficiency’’ is listed first among the 

purposes of the SCSEP; fostering and 

promoting useful community service 

activities was listed first in the 2000 

OAA. We propose to amend our 

description accordingly. The 

Department interprets the placement of 

this purpose at the front of the list of 

purposes as consistent with an 

increased focus on placing participants 

in unsubsidized employment. 

We also propose to alter the statement 

of the goal concerning community 

service. The current regulations state 

that a purpose of the SCSEP is to ‘‘foster 

and promote useful part-time 

opportunities in community service 

activities.’’ We propose to change this 

to: ‘‘Promote useful part-time 

opportunities in community service 

employment assignments.’’ We omit the 

word ‘‘foster’’ from this phrase to be 

consistent with the language of the 

statute. Our use of the term community 

service employment assignment was 

discussed above, and is changed 

consistently in the rest of this proposed 

rule. 

What Is the Scope of This Part? 

(§ 641.130) 

The proposed change in this section 

concerns administrative issuances. The 

current regulations indicate that 

administrative guidance and 

information will be provided via 

‘‘SCSEP Bulletins, technical assistance 

guides, and other SCSEP directives.’’

We propose to revise this section to 

reflect the current ETA advisory system. 

We now issue administrative guidance 

and information for the SCSEP through 

Training and Employment Guidance 

Letters (TEGLs), Training and 

Employment Notices (TENs), technical 

assistance guides, and other SCSEP 

guidance. The Department no longer 

uses Older Worker Bulletins to issue 

administrative guidance; however, 

previously issued Bulletins that have 

not been rescinded, and have not been 

superseded by the 2006 OAA, are still 

in effect. All valid administrative 

issuances, as well as an abundance of 

other program information, may be 

viewed at the SCSEP Web site, http:// 

www.doleta.gov/seniors. 

What Definitions Apply to This Part? 

(§ 641.140) 

The Department proposes to amend 

several SCSEP definitions. 

New Definitions 

We propose to add the following five 

definitions: 

Pacific Island and Asian Americans: 

The Department adds the definition of 

Pacific Island and Asian Americans that 

appears in section 518(a)(5) of the 2006 

OAA. 

Program operator: We move the 

definition of ‘‘first tier sub-recipient’’

from § 641.856 to the definitions 

section, rename it ‘‘program operators,’’

and expand it to make clear that it 

applies to all entities that operate a 

SCSEP program, not just to those 

entities that receive their funds directly 

from the grantee. Our intent is to clarify 

that all entities operating a SCSEP 

program, and not just those one tier 

down from direct SCSEP grantees, must 

adhere to program laws and regulations 

such as the requirement to track, record, 

and report administrative costs, and 

must limit those costs to comply with 

the administrative costs cap. 

Secretary: We clarify that Secretary 

means the Secretary of the Department 

of Labor. 

Supportive services: Section 518(a)(7) 

of the 2006 OAA defines supportive 

services and we adopt the statutory 

definition here. 

Unemployed: We adopt the definition 

from section 518(a)(8) of the 2006 OAA. 

Revised Definitions 

We propose to revise the following 

definitions: 

Authorized position level: We remove 

the sentence that appears at the end of 

the definition in the current regulations, 

which states that the authorized 

position level is calculated by dividing 

a grantee’s total award by the national 

unit cost, because it is repetitive of other 

language in the definition. 

Community service: We revise the 

definition of community service to align 

more precisely with the statutory 

definition. We omit the opening phrase, 

‘‘includes, but is not limited to,’’ and 

replace it with a provision at the end of 

the definition allowing the Secretary to 

include in the definition other services 

by rule as appropriate. In addition, we 

have included a lettered listing of the 

2006 OAA’s grouping of services. 

Equitable distribution report: In the 

phrase, ‘‘taking the needs of 

underserved counties into account,’’ we 

replace the word ‘‘counties’’ with 

‘‘jurisdictions’’ to be inclusive of 

entities other than counties, such as 

incorporated cities, which may also be 

underserved. 

Grantee: We alter the list of possible 

entities that may serve as grantees to 

more closely follow the language of the 

2006 OAA at section 502(b)(1). 

Accordingly, whereas the current 

regulations list both ‘‘States’’ and 

‘‘agencies of a State government’’ as 

possible grantees, we now list only 

‘‘State agencies.’’ Also, the 2006 OAA 

dropped language indicating that 

political subdivisions of a State, or a 

combination of such political 

subdivisions, could serve as a grantee; 

we therefore delete such language from 

this definition. We also modify the 

definition of grantee to eliminate the 

reference to section 502(e) grantees, 

since private sector training projects are 

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no longer authorized, and to make 

technical corrections. 

Greatest economic need: We update 

the citation for this definition. 

Greatest social need: We alter the 

definition of greatest social need to 

make technical corrections and to 

update the statutory citation. 

Host agency: The Department revises 

the definition of host agency three ways. 

First, we insert the word ‘‘training’’

before ‘‘work site’’ to underscore that 

the community service employment 

assignment is a venue for training 

SCSEP participants. We also create a 

stand-alone sentence stating that 

political parties cannot be host agencies, 

for clarity. Concerning political parties, 

we note that we interpret section 

502(b)(1)(D) of the 2006 OAA as 

containing a misplaced ending 

parenthesis. As political parties are not 

covered by section 501(c)(3) of the 

Internal Revenue Code, we consider that 

the final parenthesis should appear after 

the word ‘‘parties.’’ Our interpretation 

here simply maintains the same 

understanding of host agencies as 

existed under the 2000 OAA—political 

parties cannot be host agencies, and 

non-profit agencies that are 501(c)(3) 

may be host agencies. Finally, we 

include the word ‘‘sectarian’’ before 

‘‘religious’’ to more closely adhere to the 

language of the OAA. 

Indian: We update the citation. 

Indian tribe: We insert a citation to 

the Alaska Native Claims Settlement Act 

in the definition of Indian tribe, as is 

done in the statutory definition. We also 

update the citation. 

Individual Employment Plan or IEP: 

We modify the definition of Individual 

Employment Plan by moving to the 

beginning of the definition the 

statement that the IEP is based on an 

assessment of the participant, because 

that fact is fundamental to the 

development of an IEP. We have added 

language to acknowledge that a recent 

assessment or IEP prepared by another 

employment and training program may 

be used in lieu of one prepared by the 

grantee or sub-recipient, reflecting 

language in the statute and in § 641.230, 

related to an assessment or IEP 

completed by the One-Stop delivery 

system. We delete the language 

concerning the ‘‘appropriate sequence of 

services’’ and add language referring to 

‘‘a related service strategy,’’ reflecting 

language that has been added to the 

2006 OAA. We add the word 

‘‘appropriate’’ before ‘‘employment 

goal’’ to indicate that the employment 

goal should be one that reflects the 

assessment of the skills, talents, and 

training needs of the individual, and 

may need to be modified over time. We 

replace the phrase, ‘‘achievement of 

objectives,’’ with the phrase, ‘‘objectives 

that lead to the goal,’’ for increased 

clarity. We have added ‘‘a timeline for 

the achievement of the objectives’’

because we believe it is useful for the 

IEP to include target timeframes for the 

achievement of the identified objectives. 

We also make grammatical changes. 

Jobs for Veterans Act: We revise the 

definition of the Jobs for Veterans Act to 

clarify that the Jobs for Veterans Act is 

a distinct statute from the priority of 

service provision in the OAA, although 

we use the definition of veteran 

contained in the Jobs for Veterans Act 

to determine which participants qualify 

for the veterans’ priority for service 

(§ 641.520). We also modify the 

description of which participants 

qualify for the veterans’ preference to 

more closely follow the language of the 

Jobs for Veterans Act. 

OAA: We revise the definition of the 

Older Americans Act (OAA) to account 

for all amendments. 

Other participant (enrollee) costs: We 

revise the definition of other participant 

(enrollee) costs to make certain 

technical corrections, we replace the 

phrase ‘‘supportive services to assist’’

with ‘‘supportive services to enable,’’ to 

track the language of the statute, and we 

clarify that training costs may be 

incurred prior to commencing or 

concurrent with a community service 

employment assignment. 

Participant: We revise the definition 

of participant to clarify that an 

individual must be given a community 

service employment assignment to be 

considered a SCSEP participant, though 

the person need not have begun that 

assignment to be considered a SCSEP 

participant. This change makes it 

possible for participants to get paid their 

hourly wage for time spent on activities 

such as orientation and training before 

they begin working at their community 

service employment assignment. 

Poor employment prospects: The 

phrase ‘‘poor employment prospects’’

appeared in the 2000 OAA and the 

Department defines it in the 2004 

SCSEP final rule. The Department used 

the definition of poor employment 

prospects in the current regulations as 

the basis for developing this revised 

definition which provides that a person 

with poor employment prospects is one 

who has a significant barrier to 

employment. The barriers listed in the 

definition are mainly the same 

characteristics that appear in this 

definition in the current regulations, but 

with minor changes to reduce 

redundancy. The Department interprets 

the 2006 OAA’s term ‘‘poor employment 

prospects’’ to have the same meaning as 

the similar phrase which also appears in 

the 2006 OAA, ‘‘low employment 

prospects.’’ Thus, the same definition is 

used for the term low employment 

prospects, which is also part of this 

section, but was published in the Senior 

Community Service Employment 

Program; Performance Accountability 

IFR at 72 FR 35832, Jun. 29, 2007. 

Program Year: We alter the definition 

of Program Year to remove the statutory 

reference which no longer exists and to 

add the word ‘‘on’’ before ‘‘July 1.’’ The 

substance of the definition is not 

affected by these changes. 

Project: We revise the definition of 

project for increased readability, to 

remove the unnecessary phrase, ‘‘in a 

particular location within a State,’’ and 

to make technical corrections. We also 

change the phrase, ‘‘community 

service’’ to ‘‘service to communities’’ in 

light of the Sense of Congress provision 

at section 516 of the 2006 OAA which 

indicates that one benefit of SCSEP 

projects is their impact on communities. 

Recipient: We make technical 

corrections to the definition of recipient. 

Service area: We revise the definition 

of service area by adding the clarifying 

phrase, ‘‘in accordance with a grant 

agreement,’’ for increased accuracy. 

State grantee: We revise the definition 

of State grantee by adding the phrase, 

‘‘or the highest government official,’’

after the word ‘‘Governor,’’ to account 

for those governmental jurisdictions that 

receive State SCSEP grants but do not 

have a Governor. 

State Plan: We revise the definition of 

State Plan to specify that the State Plan 

now includes a four-year strategy for, 

and describes the planning and 

implementation process for, the 

statewide provision of SCSEP services, 

in accordance with section 503(a)(1) of 

the 2006 OAA. 

Sub-recipient: Although in the current 

regulations the Department treats the 

terms sub-grantee and sub-recipient as 

synonymous, we now clarify that subrecipient is the preferred term to use 

when referring to entities that receive 

SCSEP funds from grantees. Not all 

entities that receive SCSEP funds from 

grantees do so pursuant to a grant; in 

some cases the mechanism is a contract. 

Because the term sub-recipient is 

inclusive of both sub-grantees and subcontractors, we do not provide separate 

definitions for these terms. The 

definition of sub-recipient that we 

employ is largely the same as the 

definition of sub-grantee that appears in 

the current regulations; we deleted one 

phrase referring to subcontracts because 

the definition now includes all varieties 

of sub-awards. 

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Title V of the OAA: We revise the 

definition of title V of the OAA to 

account for all amendments. 

Tribal organization: We update the 

citation. 

Workforce Investment Act (WIA): We 

clarify in the definition of the Workforce 

Investment Act that references to this 

law include any and all amendments, 

and we make technical corrections to 

the citations. 

Deleted Definitions 

The Department proposes to omit 

several definitions that appear in the 

current regulations. First, we remove 

definitions of ‘‘placement into public or 

private unsubsidized employment’’ and 

‘‘retention in public or private 

unsubsidized employment’’ because 

those performance measures no longer 

exist. They were replaced in the IFR by 

the common measures entry and sixmonths retention indicators. We also 

eliminate the definition of coenrollment because it related to private 

sector 502(e) projects which are no 

longer authorized. We eliminate the 

definition of State workforce agency 

because that phrase no longer appears in 

this rule. Finally, we remove the 

definition of sub-grantee and replace it 

with the more technically accurate term: 

‘‘sub-recipient.’’

Unchanged Definitions 

Definitions that remain unchanged are 

not reprinted. 

The Department added and amended 

some SCSEP definitions related to 

performance accountability in the 

SCSEP; Performance Accountability; 

IFR, 72 FR 35832, Jun. 29, 2007. Those 

new and amended definitions do not 

appear in this proposed rule, and 

comments on those amendments were 

sought in the IFR. 

Subpart B—Coordination With the 

Workforce Investment Act 

This subpart covers those provisions 

of the OAA that require coordination 

with WIA. Please note that WIA 

contains additional provisions that are 

relevant to the SCSEP. The 2006 OAA 

requires changes to § 641.240 of this 

part. In addition, the Department 

proposes several clarifying changes to 

the regulatory text. 

What Is the Relationship Between the 

SCSEP and the Workforce Investment 

Act? (§ 641.200) 

The only proposed changes we make 

in this section are to clarify that subrecipients (and not just grantees) are 

included in the requirement to follow 

all WIA rules and regulations, and to 

make certain technical corrections to the 

citations. 

What Services, in Addition to the 

Applicable Core Services, Must SCSEP 

Grantees/Sub-Recipients Provide 

Through the One-Stop Delivery System? 

(§ 641.210) 

This section requires SCSEP grantees 

and sub-recipients to make 

arrangements to provide their 

participants, eligible individuals the 

grantees/sub-recipients are unable to 

serve, as well as SCSEP ineligible 

individuals, with access to other 

services available at the One-Stop 

Career Center. There is no change to this 

section other than two proposed 

clarifications. First, the Department 

clarifies that core services are those 

defined in the WIA regulations at 

§ 662.240 of this title. Second, we also 

clarify that, in addition to providing 

eligible and ineligible individuals with 

access to other activities and programs 

carried out by other One-Stop partners 

as is provided in the current regulations, 

SCSEP grantees/sub-recipients must 

also make arrangements through the 

One-Stop Delivery System to provide 

eligible and ineligible individuals with 

referrals to WIA intensive and training 

services. As a required One-Stop 

partner, and in light of the statutory 

language in both WIA and title V of the 

2006 OAA on the cross-use of 

individual assessments, it is desirable 

that SCSEP grantees and sub-recipients 

make appropriate referrals to the OneStop system for intensive and training 

services. 

Does Title I of WIA Require the SCSEP 

To Use OAA Funds for Individuals Who 

Are Not Eligible for SCSEP Services or 

for Services That Are Not Authorized 

Under the OAA? (§ 641.220) 

This section states that even in the 

One-Stop Career Center environment, 

SCSEP projects are limited to serving 

SCSEP-eligible individuals. 

As discussed in the preamble section 

addressing SCSEP definitions 

(§ 641.140), the Department is proposing 

to revise the definition of participant to 

clarify that an individual must be given 

a community service employment 

assignment, though the person need not 

have begun that assignment, to be 

considered a SCSEP participant. 

Because of this proposed modification, 

we change the language, ‘‘are 

functioning in a community service 

assignment,’’ which had qualified the 

word participants, to ‘‘have each 

received a community service 

employment assignment.’’ We also 

propose to add language clarifying what 

an MOU is, and propose to crossreference the WIA regulatory provisions 

that relate to the MOU. 

Must the Individual Assessment 

Conducted by the SCSEP Grantee/SubRecipient and the Assessment 

Performed by the One-Stop Delivery 

System Be Accepted for Use by Either 

Entity To Determine the Individual’s 

Need for Services in the SCSEP and 

Adult Programs Under Title I–B of WIA? 

(§ 641.230) 

The only proposed changes the 

Department makes to this section are 

technical ones. We add the word ‘‘subrecipient’’ to the heading for clarity. We 

also change the citation to the OAA to 

reflect the 2006 Amendments, and move 

the citation to after the first sentence, as 

the first sentence contains the provision 

located in the cited statutory section. 

Are SCSEP Participants Eligible for 

Intensive and Training Services Under 

Title I of WIA? (§ 641.240) 

This section addresses the eligibility 

of SCSEP participants for intensive and 

training services under title I of WIA. 

Under the OAA, SCSEP participants are 

not automatically eligible to receive 

intensive and training services under 

WIA, however Local Boards have the 

authority to deem SCSEP participants 

eligible to receive intensive and training 

services under title I of WIA. We note 

that WIA eligibility is not based on 

income except in the adult program 

when a local area determines that its 

funds are insufficient and provides 

priority to low-income individuals. 

Rather, WIA eligibility is based on the 

need for and utility of intensive and 

training services to obtain employment. 

The Department proposes to revise 

paragraph (a) by removing the opening 

word ‘‘yes’’ since it could be read to 

imply that SCSEP participants are 

automatically eligible for intensive and 

training services under title I of WIA, 

even though the subsequent text states 

the contrary. 

In paragraph (b) the Department 

proposes to make several changes. First, 

the current regulations state that, 

‘‘SCSEP participants who have been 

assessed through a SCSEP IEP have 

received an intensive service.’’ An 

assessment is used in developing an 

IEP, but assessments are not 

accomplished through an IEP. 

Accordingly, to clarify the distinct roles 

of the assessment and the IEP, the 

phrase is proposed to read, ‘‘SCSEP 

participants who have been assessed 

and for whom an IEP has been 

developed have received an intensive 

service.’’

Also in paragraph (b), we propose to 

revise the sentence addressing SCSEP 

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participants and training. Whereas the 

current regulations state, ‘‘SCSEP 

participants who seek unsubsidized 

employment as part of their SCSEP IEP, 

may require training to meet their 

objectives,’’ the proposed rule instead 

says, ‘‘[i]n order to enhance skill 

development related to the IEP, it may 

be necessary to provide training beyond 

the community service employment 

assignment to enable the participant to 

meet their unsubsidized employment 

objectives.’’ We propose this change to 

reinforce the role of the IEP, because 

unsubsidized employment is a goal for 

all of the SCSEP, not just certain 

participants, and to clarify that the 

training under discussion here is 

training other than that accomplished 

via the community service employment 

assignment. We also propose to add a 

reference to § 641.540, the section of 

these regulations that addresses 

participant training in depth. 

The Department proposes to delete 

what is paragraph (c) in the current 

regulations; the Department determined 

this paragraph conflicts with other 

relevant regulatory provisions. 

Paragraph (c) states that community 

service employment assignments are 

analogous to work experience activities 

or intensive services under WIA. This 

paragraph could create confusion with 

paragraph (a) of this section, which 

correctly states that SCSEP participants 

are not automatically eligible for WIA 

intensive and training services. Whether 

or not a community service employment 

assignment is considered to be an 

intensive service, a SCSEP participant 

must still meet the other WIA eligibility 

requirements to be eligible for training 

services. 

The Department also proposes to 

delete what is paragraph (d) in the 

current regulations because the subject 

of that paragraph is thoroughly covered 

in subpart E. Paragraph (d) indicates 

that SCSEP participants may be paid 

while receiving intensive or training 

services. An explanation of participant 

wages appears in § 641.565 of these 

regulations. 

Subpart C—The State Plan 

The Department proposes to change 

the title of this subpart to reflect a 

change in the name of the State Plan in 

the 2006 OAA from the prior term, the 

‘‘State Senior Employment Services 

Coordination Plan.’’ This subpart of the 

regulations implements the new 

provisions in section 503 of the 2006 

OAA, which direct the Governor, or the 

highest government official, of each 

State to submit a State Plan that 

contains a four-year strategy, and 

require that the State Plan be updated at 

least every two years. As reflected in 

these proposed regulations, the State 

Plan now has a broader role than merely 

coordination. 

Comments are welcome on 

requirements for the four-year strategy, 

as well as other changes affecting the 

State Plan that are identified in this 

preamble or other changes to the current 

regulations which flow from the 2006 

Amendments. 

What Is the State Plan? (§ 641.300) 

This section describes the State Plan 

and emphasizes that it is intended to 

foster collaboration among SCSEP 

stakeholders. As noted above, the 

Department proposes to change the 

name of the State Plan to reflect the 

2006 OAA. We also propose to add 

language reflecting the new requirement 

that the State Plan outline a four-year 

strategy for the statewide provision of 

community service and other authorized 

activities for eligible individuals under 

the SCSEP. The four-year strategy is one 

component of the State Plan; § 641.325 

of these proposed regulations specifies 

additional information required in the 

State Plan. 

What Is a Four-Year Strategy? 

(§ 641.302) 

The 2006 OAA requires that States 

include a four-year strategy in the State 

Plan; in this proposed section, the 

Department explains what States must 

include in their four-year strategy. The 

four-year strategy is only one 

component of the State Plan; other 

elements are discussed in § 641.325 of 

these regulations. The 2006 OAA does 

not elaborate on the contents of the fouryear strategy, but grants the Secretary 

authority to determine what provisions 

should be in the State Plan, consistent 

with title V. These proposed regulations 

specify what States must include in the 

four-year strategy. 

The Department views the four-year 

strategy as an opportunity for the State 

to take a longer-term view of the SCSEP 

in the State, including its role in 

workforce development, given projected 

changes in the State’s demographics 

(particularly the number of older 

workers), economy, and labor market. In 

preparing the four-year strategy, the 

State should address the role of SCSEP 

vis-a ́-vis other workforce programs and 

initiatives as well as other programs 

serving older workers, and how the 

State and SCSEP grantees can utilize 

these other programs to maximize the 

services available to the SCSEP-eligible 

population. The four-year strategy also 

should be used by the State to examine 

and, as appropriate, plan longer-term 

changes to the design of the program 

within the State, such as changes in the 

utilization of SCSEP grantees and 

program operators to better achieve the 

goals of the program. 

To achieve the objectives described 

above, the Department proposes to 

require that the four-year strategy 

include the following specific elements. 

First, it must explain the State’s longterm plan for achieving an equitable 

distribution of SCSEP positions within 

the State (the equitable distribution 

report, discussed in §§ 641.360 and 

641.365, addresses this for the shortterm). This information is required as 

part of the State Plan (see § 641.325), but 

the State should address equitable 

distribution over a longer period in its 

four-year strategy. The strategy must 

specifically address how, over the fouryear period, the State intends to: (1) 

Move positions from over-served to 

underserved locations within the State, 

pursuant to § 641.365 of these 

regulations; (2) equitably serve rural and 

urban areas; and (3) serve individuals 

afforded priority for community service 

employment and other authorized 

activities, pursuant to § 641.520 of these 

regulations. Second, a related provision 

requires that the State explain its longterm strategy for avoiding disruptions to 

the program when new Census data that 

affects the distribution of SCSEP 

positions across the State becomes 

available, or when there is overenrollment for any other reason. This 

information is included in the State 

Plan for the short-term, but the State 

should plan over a longer term for 

avoidance of disruptions when new 

Census data become available or there is 

over-enrollment. 

Third, the four-year strategy must 

provide the State’s long-term plan for 

serving minority older individuals 

under the SCSEP. Section 515 of the 

2006 OAA requires a report on services 

to minority individuals, and this 

element in the four-year strategy 

reinforces the law’s focus on minority 

individuals and will provide 

information that may be used in the 

report. Fourth, the strategy must provide 

long-term projections for job growth in 

industries and occupations in the State 

that may provide employment 

opportunities for older workers, and 

how those relate to the types of 

unsubsidized jobs for which 

participants will be trained, and the 

types of skill training to be provided. 

The 2006 OAA added to the State Plan 

provisions the current and projected 

employment opportunities in the State, 

and it makes sense to look at this, in 

relation to the types of skill training 

provided to participants, not only in the 

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short-term, but over the longer-term 

encompassed by the four-year strategy. 

Fifth, the four-year strategy must 

explain how the State plans to work 

with employers in the State to develop 

and promote opportunities for 

placement of SCSEP participants in 

unsubsidized employment. Working 

with employers to develop 

opportunities for placement of SCSEP 

participants in unsubsidized 

employment is an essential element of 

the program and necessary to achieve 

participation limits, so States should 

address this in their four-year strategy. 

Sixth, the four-year strategy must 

provide the long-term strategy for 

increasing the level of performance for 

entry into unsubsidized employment by 

SCSEP participants. Specifically, the 

strategy must demonstrate how the State 

will achieve the minimum levels of 

performance required by section 

513(a)(2)(E)(ii) of the OAA and 

§ 641.720(a)(6) of the SCSEP regulations 

(published in the IFR), which set forth 

the minimum percentage for the 

expected level of performance for entry 

into unsubsidized employment for each 

of fiscal years 2007–2011. The expected 

level of performance on this core 

indicator increases over this time 

period, from 21 percent in fiscal year 

2007, to 25 percent in fiscal year 2011. 

The Department recognizes that these 

are minimum levels and that some 

grantees already perform well above 

these minimum levels. All grantees 

should strive to continuously improve 

their performance levels to assist 

enrollees in becoming self-sufficient, 

make available opportunities for other 

individuals to enroll in SCSEP, and 

better fulfill the objectives of the 

program. 

Seventh, the four-year strategy must 

indicate how the SCSEP activities of 

grantees will be coordinated with a 

number of other programs, initiatives, 

and entities. The State Plan must 

address coordination with WIA, but 

States should plan over a longer term to 

improve coordination with a variety of 

other programs, initiatives, and entities. 

These include: (1) Planned actions to 

coordinate with activities being carried 

out in the State under title I of WIA, 

including plans for utilizing the WIA 

One-Stop Delivery System and its 

partners to serve individuals aged 55 

and older; (2) planned actions to 

coordinate with activities being carried 

out in the State under other titles of the 

OAA; (3) planned actions to coordinate 

with other public and private entities 

and programs that provide services to 

older Americans in the State (such as 

community and faith-based 

organizations, transportation programs, 

and programs for those with special 

needs or disabilities); and (4) planned 

actions to coordinate with other labor 

market and job training initiatives. 

These initiatives currently include the 

President’s High Growth Job Training 

Initiative, Community-Based Job 

Training Grants, and the Workforce 

Innovation in Regional Economic 

Development (WIRED) Initiative. 

Eighth, the State should explain its 

long-term strategy to improve SCSEP 

services, and may include 

recommendations to the Department, as 

appropriate. This is derived from 

current State Plan Instructions (Older 

Worker Bulletin 01–04), which specify 

that the State Plan may include 

recommendations to the Secretary of 

Labor on actions to be taken by SCSEP 

grantees in the State to improve SCSEP 

services. The recommendations may 

include such topics as the location of 

positions, the types of community 

services, the time required to make 

changes in the distribution of positions, 

and the types of participants to be 

enrolled. 

Who Is Responsible for Developing and 

Submitting the State Plan? (§ 641.305) 

The only change we propose to this 

section is to add the phrase, ‘‘or the 

highest government official,’’ after the 

word ‘‘Governor’’, to be inclusive of all 

jurisdictions that submit State Plans. 

May the Governor, or the Highest 

Government Official, Delegate 

Responsibility for Developing and 

Submitting the State Plan? (§ 641.310) 

The only proposed change to this 

provision is to add in the heading the 

phrase, ‘‘or the highest government 

official,’’ after the word, ‘‘Governor,’’ to 

be inclusive of jurisdictions where the 

head of the government is not a 

Governor. 

Who Participates in Developing the 

State Plan? (§ 641.315) 

This provision lists the individuals 

and organizations from whom the 

Governor, or the highest government 

official, is required to seek advice and 

recommendations related to the State 

Plan, in accordance with section 

503(a)(2) of the OAA. The 2006 OAA 

changes the task of the Governor (or 

highest government official) from 

‘‘obtaining’’ the advice and 

recommendations of these entities to 

‘‘seeking’’ advice and recommendations. 

The Department therefore proposes to 

revise this section to use the word 

‘‘seek.’’ We interpret this to mean that 

the Governor (or highest government 

official) must make a good faith effort to 

obtain advice and recommendations 

from the listed individuals and 

organizations, whether or not each of 

these chooses to submit its views. We 

also propose to replace the phrase 

‘‘underserved older individuals’’ with 

‘‘unemployed older individuals,’’ in 

accordance with the same change in the 

2006 OAA. 

Must All National Grantees Operating 

Within a State Participate in the State 

Planning Process? (§ 641.320) 

Section 503(a)(2) of the OAA requires 

the Governor, or the highest government 

official, to seek the advice and 

recommendations of a number of 

different parties concerning SCSEP 

services in the State. Although that 

particular section of the OAA does not 

require national grantees to participate 

in the State Plan process, section 

514(c)(6) of the OAA establishes that 

when selecting national grantees, the 

Department must consider an 

applicant’s ability to coordinate their 

activities with other organizations at the 

State and local levels. The State Plan is 

the process by which SCSEP services 

are coordinated at the State level; 

accordingly, section 514(c)(6) effectively 

requires national grantees to participate 

in the State planning process. To clarify 

the source of this requirement, the 

Department proposes to omit the 

language referring to OAA section 

503(a)(2) from paragraph (a) of this 

section. We have also updated the 

remaining citation in paragraph (a) to 

account for where this provision is 

located in the 2006 OAA. 

Paragraph (b) concerns exemptions 

from the requirement in paragraph (a); 

we propose several changes to this 

paragraph. The 2004 SCSEP final rule 

exempts national grantees serving older 

American Indians from the State 

planning process, based on section 

503(a)(8) of the 2000 OAA, although the 

Department encourages their 

participation. The proposed regulation 

adds grantees serving older Pacific 

Island and Asian Americans to the 

grantee exemption from the requirement 

to participate in the State planning 

process, consistent with section 

503(a)(8) of the 2006 OAA. However, 

the Department continues to encourage 

exempted grantees to participate in the 

State planning process in the areas in 

which they operate. Also in paragraph 

(b), we propose to change the phrase, 

‘‘are exempted from participating in the 

planning requirements’’ to ‘‘are 

exempted from the requirement to 

participate in the State planning 

processes,’’ for clarity. 

The Department proposes to clarify in 

paragraph (b) that the exemption from 

the requirement to participate in the 

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State planning process applies to 

grantees using funds specifically 

reserved for projects serving older 

American Indians and older Pacific 

Island and Asian Americans under OAA 

section 506(a)(3); this clarification is 

consistent with section 503(a)(8) of the 

2006 OAA. We also propose to add new 

language concerning a grantee using 

both reserved and non-reserved funds. 

All grantees of non-reserved SCSEP 

funds, including grantees that have also 

received reserved funds, are required to 

participate in the State planning process 

per paragraph (a). Having applied for 

and accepted non-reserved funds, 

grantees become subject to the same 

coordination requirements as all other 

recipients of non-reserved funds. 

Accordingly, if a grantee that receives 

reserved funds under one grant is also 

awarded a non-reserved funds grant, the 

grantee is required to participate in the 

State planning process for purposes of 

the non-reserved funds grant. 

Finally, we propose to delete from 

paragraph (b) the statement that if an 

exempt grantee chooses not to 

participate in the State planning process 

it is required to describe its plan for 

serving its constituency in its grant 

application. This is redundant because 

all grant applications require applicants 

to describe such plans, regardless of 

past participation in the State planning 

process. We also make certain 

grammatical improvements. 

What Information Must Be Provided in 

the State Plan? (§ 641.325) 

This section lists the minimum 

requirements of the State Plan, 

consistent with section 503(a)(4) of the 

OAA. In the opening sentences of the 

proposed section we add a requirement 

that the State Plan include the State’s 

four-year strategy, as required by section 

503(a)(1) of the 2006 OAA and as 

described in § 641.302. 

Paragraph (a) remains unchanged. In 

paragraph (b), we propose to add a 

requirement that the State Plan provide 

information on the relative distribution 

of eligible individuals who are limited 

English proficient as required by 2006 

OAA section 503 (a)(4)(C)(iii). In 

paragraph (c), we propose to replace the 

requirement to identify and address 

‘‘the employment situations and the 

types of skills possessed by eligible 

individuals,’’ which appears in the 

current regulations, with a new 

requirement stemming from a revised 

section 503(a)(4)(D) of the 2006 OAA, 

that the plan provide information on the 

current and projected employment 

opportunities in the State (such as by 

providing employment statistics 

available under section 15 of the 

Wagner-Peyser Act (29 U.S.C. 491–2) by 

occupation) and the type of skills 

possessed by local eligible individuals. 

State labor market information is 

available through the following link to 

America’s Career Information Network: 

http://www.acinet.org/acinet/crl/ 

library.aspx?PostVal=10&CATID=52. 

We propose to make these changes in 

accordance with the same changes in 

the 2006 OAA. 

Paragraph (d) currently requires a 

description of the localities and 

populations for which community 

service projects in the State are most 

needed. We propose to change this 

paragraph by removing the words, 

‘‘community service’’ before the word 

‘‘projects’’ to follow the same change in 

section 503(a)(4)(E) the 2006 OAA. 

We propose a slight modification to 

paragraph (e). Instead of requiring that 

the State Plan include actions taken 

‘‘or’’ planned concerning coordination 

with WIA, we require the Plan to 

include actions taken ‘‘and/or’’ planned 

to capture actions already taken in 

addition to those being planned. 

What appears as paragraph (f) in the 

current regulations is moved to 

paragraph (g), and we propose a new 

paragraph (f), which would require that 

the State Plan describe the process used 

to seek advice and recommendations on 

the State Plan from representatives of 

organizations and individuals listed in 

§ 641.315, and the process used to seek 

advice and recommendations on steps 

to coordinate SCSEP services with 

activities funded under title I of WIA 

from representatives of organizations 

listed in § 641.335. Since the 2006 OAA 

requires that advice and 

recommendations be sought from 

representatives of these organizations 

and individuals, the Department 

believes it is reasonable for the State 

Plan to describe how this input was 

obtained. 

Proposed paragraph (g) mirrors what 

is paragraph (f) in the current 

regulations, and requires the State Plan 

to describe the planning process, 

including opportunities for public 

comment. The only change to this 

paragraph is that we propose to add a 

reference to § 641.350, which requires 

the State to solicit public comments. 

There is no change to the text of what 

appears as paragraph (g) in the current 

regulations, although it appears as 

paragraph (h) here. The paragraph that 

is labeled (h) in the current regulations 

is labeled paragraph (i) here; the only 

change is that the reference to § 641.365 

has been taken out of parentheses. 

Finally, the text that appears as 

paragraph (i) in the current regulations 

is repeated verbatim here although it is 

now labeled paragraph (j). 

How Should the State Plan Reflect 

Community Service Needs? (§ 641.330) 

There is no change to this provision. 

How Should the Governor, or the 

Highest Government Official, Address 

the Coordination of SCSEP Services 

With Activities Funded Under Title I of 

WIA? (§ 641.335) 

The only proposed change to this 

provision is to add in the heading the 

phrase, ‘‘or the highest government 

official,’’ after the word, ‘‘Governor,’’ to 

be inclusive of jurisdictions where the 

head of the government is not a 

Governor. 

How Often Must the Governor, or the 

Highest Government Official, Update 

the State Plan? (§ 641.340) 

The Department proposes to reword 

the heading question for this section 

because the former heading assumed an 

annual review of the State Plan, which 

is no longer required under the 2006 

OAA, and to include the phrase, ‘‘or the 

highest government official,’’ to be 

inclusive of jurisdictions for which the 

head of the government is not a 

Governor. Instead, the 2006 OAA 

requires that the State Plan be reviewed, 

updated, and submitted to the Secretary 

not less often than every two years. The 

Department revises the proposed section 

to reflect the new requirement. We 

encourage States to review their State 

Plan more frequently than every two 

years, and make necessary adjustments 

and submit modifications as 

circumstances warrant. The Department 

intends for the State Plan to be a living 

document that will guide the strategic 

and ongoing operations of the SCSEP 

within the State. Prior to submitting an 

update of the State Plan to the 

Department the Governor, or highest 

government official, must seek the 

advice and recommendations of the 

individuals and organizations identified 

in § 641.315 about what, if any, changes 

are needed, and publish the State Plan, 

showing the changes, for public 

comment. 

We also propose to add cites to 

corresponding statutory provisions. 

What Are the Requirements for 

Modifying the State Plan? (§ 641.345) 

The Department proposes a new 

paragraph (a) to distinguish State Plan 

updates from State Plan modifications; 

the remaining paragraphs have been redesignated. Whereas States are required 

to update their State Plan not less often 

than every two years, modifications may 

be submitted anytime circumstances 

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warrant. Both updates and 

modifications require an opportunity for 

the public to comment on the State 

Plan, but only in the event of a State 

Plan update (§ 641.340) are States 

required to seek the advice and 

comment of the individuals and 

organizations identified in § 641.315. 

Paragraph (b), which is labeled 

paragraph (a) in the current regulations, 

addresses what circumstances require a 

modification to the State Plan. The only 

changes we propose in paragraph (b) are 

changing the word ‘‘strategies’’ to ‘‘fouryear strategy,’’ and adding the word 

‘‘significant’’ before the word 

‘‘changes.’’ We propose the latter change 

to clarify that trivial changes do not 

warrant a modification to the State Plan. 

In paragraph (c) we state that 

modifications to the State Plan must be 

open for public comment. We propose 

to delete a reference to § 641.325 from 

this paragraph because that section 

merely lists the required contents of the 

State Plan. We propose to leave intact 

the reference to § 641.350 which 

addresses soliciting public comment on 

the State Plan. In paragraph (d) we 

clarify that States need not seek the 

advice and recommendations of the 

individuals and organizations identified 

in § 641.315 when modifying the State 

Plan. 

Paragraph (e), which appears as 

paragraph (c) in the current regulations, 

remains unchanged. 

How Should Public Comments Be 

Solicited and Collected? (§ 641.350) 

There is no change to this provision. 

Who May Comment on the State Plan? 

(§ 641.355) 

There is no change to this provision. 

How Does the State Plan Relate to the 

Equitable Distribution Report? 

(§ 641.360) 

The equitable distribution report 

shows where SCSEP positions are 

located throughout a State on a granteeby-grantee basis and is required by 

section 508 of the OAA. State grantees 

are responsible for preparing the report 

at the beginning of each fiscal year. 

SCSEP grantees use the equitable 

distribution report to improve on the 

distribution of SCSEP positions within 

the State. The information contained in 

the equitable distribution report is used 

in preparing the State Plan; however, 

the State Plan requires additional 

information. This section is 

substantively the same as in the current 

regulations, but the Department 

proposes to change the reference to the 

State Plan to reflect the statutory 

requirement, new to the 2006 OAA, that 

the Plan be updated and sent to the 

Secretary not less often than every two 

years, whereas in the current regulations 

we reference annual State Plans. The 

Department also proposes to remove 

redundant language concerning the role 

of the equitable distribution report. 

How Must the Equitable Distribution 

Provisions Be Reconciled With the 

Provision That Disruptions to Current 

Participants Should Be Avoided? 

(§ 641.365) 

This section is largely the same as in 

the current regulations, but since the 

2006 OAA places time limits on 

participation in the SCSEP, the 

Department proposes to revise this 

section to provide a cross-reference to 

§ 641.570 of these regulations, where the 

new time limit is addressed. We 

propose to remove the reference to 

§ 641.575 because limits set on the 

amount of time a participant spends in 

a particular community service 

employment assignment do not affect 

the distribution of SCSEP positions. We 

also propose to rephrase the first 

sentence, concerning avoiding 

disruptions in services, for greater 

clarity. Finally, we make several 

grammatical and technical corrections. 

Subpart D—Grant Application and 

Responsibility Review Requirements for 

State and National SCSEP Grants 

This subpart covers the grant 

application, eligibility, and award 

requirements for all SCSEP grants under 

section 506 of the 2006 OAA, which 

describes distribution of assistance to 

State and national grantees. The 

Department proposes to change the title 

of this subpart to clarify that this 

subpart applies to National and State 

grants, but not the pilot, demonstration, 

and evaluation grants described in 

subpart F. 

The proposed changes in this subpart 

support an increased emphasis on the 

grantees’ accountability for results in 

order to achieve enhanced program 

performance. This subpart describes 

organizations eligible to apply for 

SCSEP grants, application requirements, 

eligibility criteria, responsibility 

reviews, and how the Department will 

select grantees. Comments are welcome 

on the new and revised grant 

application, eligibility, and award 

requirements that are discussed in this 

preamble or other changes to this 

subpart which flow from the 2006 OAA. 

What Entities Are Eligible To Apply to 

the Department for Funds To 

Administer SCSEP Projects? (§ 641.400) 

The Department proposes to delete 

‘‘community service’’ from the heading 

question of this section to be consistent 

with the rest of these regulations which 

generally refer simply to ‘‘SCSEP 

projects.’’

Section 502(b)(1) of the 2006 OAA 

authorizes the Secretary to make grants 

to public and nonprofit private agencies 

and organizations, agencies of a State, 

and tribal organizations, to administer 

SCSEP projects. This section is the 

corresponding regulatory provision. 

The Department proposes no changes 

to paragraph (a). In the current 

regulations, paragraph (b) specifies the 

eligible entities that can apply for 

national grant funds in a State if the 

national grantee consistently fails to 

meet State performance measures. The 

Department proposes to delete 

paragraph (b) because under the 2006 

OAA, national grantees are held 

accountable only for their national 

goals. 

The Department proposes a few 

changes to former paragraph (c), which 

is now labeled paragraph (b), 

concerning State grants. First, we divide 

the paragraph into two parts. Proposed 

paragraph (b)(1) addresses the general 

statutory requirement that the 

Department award a SCSEP grant to 

each State. We propose to change the 

phrase, ‘‘enter into agreements with 

each State,’’ to, ‘‘award each State a 

grant,’’ for clarity. Also, whereas the 

current regulations provide that States 

can use individual State agencies, 

political subdivisions of a State, a 

combination of political subdivisions, or 

a national grantee operating in the State 

to administer SCSEP funds, the 

proposed paragraph provides that a 

State may designate only an individual 

State agency. We propose to delete the 

options concerning political 

subdivisions of a State to follow the 

same change in section 502(b)(1) of the 

2006 OAA. We propose to delete the 

option of a national grantee operating in 

a State partly because, to date, all State 

grantees have been State agencies, and 

partly because in the event of the 

competition contemplated by paragraph 

(b)(2), all nonprofit private agencies and 

organizations are eligible to compete. 

Proposed paragraph (b)(2) provides 

that a State must compete for its SCSEP 

State grant funds in the event that the 

designated State grantee fails to meet 

the expected levels of performance for 

the core performance measures for three 

consecutive years. We propose to 

change what appears as the third 

sentence of paragraph (b) in the current 

regulations to the active voice for 

readability. We also propose to alter the 

statutory reference so that we now refer 

to the section of the statute that 

establishes State grant funding rather 

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than the statutory section that requires 

that a State’s funds being competed after 

repeated failure to meet performance 

measures. 

Finally, the Department proposes to 

add that the designated entity that failed 

to meet core performance measures for 

three consecutive years is not eligible to 

compete for SCSEP funds for the first 

full Program Year following the 

determination of the third year of 

consecutive failure. We add this 

sentence to ensure that the State 

competition acts as a consequence for 

repeated failure to perform. A similar 

provision governs national grantees; a 

national grantee that fails to meet the 

expected levels of performance for four 

consecutive years is ineligible to 

compete in the grant competition 

following the fourth year of consecutive 

failure (OAA sec. 513(d)(2)(B)(iii)). 

How Does an Eligible Entity Apply? 

(§ 641.410) 

This section directs interested 

applicants, including States, to follow 

instructions issued by the Department to 

apply for a SCSEP grant. National grants 

are competed, and the Department 

generally publishes application 

guidelines in Solicitations for Grant 

Applications (SGA) in the Federal 

Register. The Department usually issues 

instructions for State grants, which are 

not competed, in administrative 

guidance. 

In paragraph (a), the Department 

proposes to add ‘‘evaluation criteria’’ to 

the list of what is included in the 

application guidelines because these 

criteria will be set forth in the SGA for 

national funds and may change over 

time. We also propose to change the 

phrase, ‘‘State and national SCSEP 

funds,’’ to ‘‘national funds, and State 

funds,’’ because, under the 2006 OAA, 

those types of funds are awarded 

differently (competitively versus 

noncompetitively) and on a different 

timetable (annually for State versus 

multi-year for national). We also 

propose to delete what is the last 

sentence of paragraph (a) in the current 

regulations, because it redundantly 

provides that applications are to be 

submitted in accordance with 

Departmental instructions. 

Paragraph (b) implements OAA 

section 503(a)(5), which requires 

national grant applicants to provide 

their applications to the Governor, or 

the highest government official, of the 

State in which projects are proposed so 

that the Governor (or the highest 

government official) may make 

recommendations relating to position 

distribution. Grantees have generally 

provided Governors (or the highest 

government official) with executive 

summaries of their application; the 

Department will continue to consider 

such practice as fulfilling this 

requirement. 

The current regulations exempt 

Indian organizations from this 

requirement because they are exempt 

from State planning. The Department 

proposes to continue this exemption 

policy, again because it is consistent 

with the exemption from State planning 

under OAA section 503(a)(8). We 

propose to add organizations serving 

Pacific Island and Asian Americans to 

the exemption because the 2006 OAA 

also exempted those organizations from 

State planning. We propose to clarify 

that this exemption from submitting 

national grant applications to the 

Governor, or the highest government 

official, applies to Indian and Pacific 

Island and Asian American 

organizations seeking funding reserved 

under OAA section 506(a)(3). While it 

remains the policy of the Department 

that these organizations are not required 

to submit their applications to the 

Governor (or the highest government 

official), we nevertheless encourage 

such entities to submit their 

applications to the Governor(s) in the 

State(s) they propose to serve so that the 

Governor(s) may better plan the 

activities in their State(s). We also note 

that if a grantee that is awarded a grant 

with reserved funds chooses to compete 

for other, non-reserved SCSEP funds, 

such a grantee would be required to 

submit its non-reserved fund grant 

application to the Governor (or the 

highest government official). 

We also propose to add a phrase 

connecting the submission required in 

this paragraph to the Governor’s (or the 

highest government official’s) review, 

which is described in § 641.480 of these 

regulations. 

In paragraph (c), the Department 

proposes to delete the phrase, 

‘‘community service project’’ from 

between the words ‘‘SCSEP’’ and ‘‘grant 

application’’ to be consistent with the 

rest of these regulations which merely 

refer to ‘‘SCSEP grants’’ or ‘‘SCSEP grant 

applications.’’ We also propose to 

expand the cross-reference to State Plan 

requirements so that readers are 

directed to the entirety of subpart C. 

What Are the Eligibility Criteria That 

Each Applicant Must Meet? (§ 641.420) 

The Department proposes to move the 

former § 641.420, which addresses what 

factors we consider in selecting 

grantees, to § 641.460, so that it follows 

all the provisions relating to grant 

application requirements, and we 

renumber the remaining sections 

accordingly. 

This renumbered section, which is 

§ 641.430 in the current regulations, 

describes the eligibility criteria for 

SCSEP grant applicants. The 

Department proposes to update 

language in paragraph (a), specifying 

that applicants must demonstrate an 

ability to administer a program that 

serves the greatest number of eligible 

participants and most-in-need 

individuals, to reflect the language of 

section 514(c)(1) of the 2006 OAA. 

Paragraphs (b) and (c) remain the same. 

The Department proposes to add a 

new paragraph (d) relating to the 

applicant’s past performance to conform 

with section 514(c)(4) of the 2006 OAA, 

and to re-designate the remaining 

paragraphs accordingly. For applicants 

that have previously received a SCSEP 

grant, this criterion addresses the 

applicant’s prior performance in 

meeting SCSEP core and additional 

measures of performance. For applicants 

who have not received a SCSEP grant in 

the past, this addresses the applicant’s 

prior performance under other Federal 

or State programs. The Department 

proposes to add a phrase in paragraph 

(e) (which is paragraph (d) in the 

current regulations) specifying that 

grantees must be able to move most-inneed individuals into unsubsidized 

employment, to reflect the eligibility 

criterion specified in section 514(c)(5) of 

the 2006 OAA. 

In paragraph (f), the Department 

proposes to add the word ‘‘activities’’ to 

clarify the focus of coordination at the 

State and local levels, in accordance 

with the same change in section 

514(c)(6) of the 2006 OAA. We propose 

one change in paragraph (g), which is 

paragraph (f) in the current regulations. 

We propose to replace the word, 

‘‘including’’ with the phrase, ‘‘as 

reflected in,’’ for clarity. The 

Department also proposes to add a new 

paragraph (h), requiring that grantees be 

able to administer a project that 

provides community service to be 

considered eligible, in order to be 

consistent with section 514(c)(8) of the 

2006 OAA. The Department proposes to 

add the phrase ‘‘and in community 

services provided’’ in paragraph (i) 

when describing a grantee’s ability to 

minimize disruption, in accordance 

with section 514(c)(9) of the 2006 OAA. 

In paragraph (j) (formerly paragraph (h)), 

we propose to replace ‘‘Secretary of 

Labor’’ with ‘‘Department’’ to be 

consistent with the rest of these 

regulations. 

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What Are the Responsibility Conditions 

That an Applicant Must Meet? 

(§ 641.430) 

This section contains the 

responsibility review provisions 

codified in section 514(d) of the 2006 

OAA. The Department proposes to add 

an opening phrase, ‘‘[s]ubject to 

§ 641.440,’’ because that section 

addresses responsibility conditions that, 

alone, will disqualify a grant applicant. 

Also in the opening sentence, we 

propose to replace the phrase ‘‘any of 

the acts of misfeasance or malfeasance 

described in § 641.440(a)–(n) of this 

section’’ with the simpler, ‘‘any of the 

following acts,’’ because paragraphs (a) 

through (n) comprise the entirety of this 

section and all are acts of either 

misfeasance or malfeasance. 

In paragraph (a) the Department 

proposes to replace the word ‘‘subgrantee’’ with ‘‘sub-recipient’’ for 

consistency throughout this proposed 

rule and with the description of subrecipients in the Office of Management 

and Budget (OMB) Circular A–133. 

Accordingly, we delete the term ‘‘subcontractors’’ from this paragraph 

because the term sub-recipients 

includes both sub-grantees and subcontractors. In paragraph (e), the 

Department proposes to change the 

phrase, ‘‘meet applicable performance 

measures,’’ to ‘‘meet applicable core 

performance measures or address other 

applicable indicators of performance’’ to 

reflect the same change in section 

514(d)(4)(E) of the 2006 OAA. In 

paragraph (k), we propose to delete the 

reference to 20 CFR 667.200(b) because 

SCSEP grantees/sub-recipients are not 

required to follow the audit 

requirements in that regulation. The 

audit requirements for the SCSEP are 

located in § 641.821, which is properly 

referenced in paragraph (k). 

We also propose several grammatical 

and clarifying changes. 

Are There Responsibility Conditions 

That Alone Will Disqualify an 

Applicant? (§ 641.440) 

The Department proposes to combine 

into paragraph (a) what are paragraphs 

(a) and (b) in the current regulations for 

increased clarity. In what is now 

paragraph (b), the Department proposes 

to clarify that we will determine the 

existence of significant fraud or criminal 

activity. We also propose to revise the 

language concerning handling Federal 

funds to be grammatically correct. The 

Department proposes to revise the last 

sentence on fraud or criminal activity 

determination for readability and to 

again clarify that the Department makes 

that determination. 

How Will the Department Examine the 

Responsibility of Eligible Entities? 

(§ 641.450) 

The Department proposes to remove 

the words ‘‘conduct a’’ and ‘‘of’’ from 

the phrase ‘‘conduct a review of 

available records,’’ for readability. 

What Factors Will the Department 

Consider in Selecting National 

Grantees? (§ 641.460) 

The Department proposes to move the 

former § 641.420, which addresses what 

factors we consider in selecting 

grantees, to § 641.460, so that it follows 

all the provisions relating to grant 

application requirements, and we 

renumber the remaining sections 

accordingly. Also, we propose to add 

the word, ‘‘national,’’ to the heading of 

this section because the Department 

only executes competitions for national 

grants. Although a State grant must be 

competed if the designated State agency 

fails to achieve its core performance 

levels for three consecutive years, it is 

the State rather than the Department 

that carries out such a competition. 

This section describes the criteria to 

be used for the selection of national 

SCSEP grantees. The Department 

proposes to drop the conditional 

language ‘‘if there is a full and open 

competition’’ because the 2006 OAA 

requires a regular competition for 

national grants. The Department also 

proposes to drop the reference to past 

performance among the rating criteria 

the Department will consider, and 

instead adds a new criterion relating to 

past performance in the section on 

eligibility criteria (§ 641.420). The 

Department makes this change in 

accordance with the 2006 Amendments 

to section 514(c)(4) of the OAA. We also 

propose to clarify in the second 

sentence that the sections to which we 

refer are sections of these regulations, to 

avoid any possible confusion with 

sections of the OAA. 

Under What Circumstances May the 

Department Reject an Application? 

(§ 641.465) 

The only change we propose to make 

to this section is removing the word 

‘‘program’’ after ‘‘the SCSEP’’ because 

the ‘‘P’’ in the acronym SCSEP stands 

for program. 

What Happens If an Applicant’s 

Application Is Rejected? (§ 641.470) 

The Department proposes to revise 

this section to accurately reflect the 

process currently used by the 

Department for applications that are not 

funded. Under the current process, nonselected entities that request an 

explanation are provided with feedback 

on the shortcomings of their proposal. 

We also propose to include a reference 

in paragraph (a) to § 641.900, which 

addresses the appeal process available 

to a rejected applicant. We propose to 

reword paragraph (b) to clarify that 

incumbent grantees are not to receive 

any technical assistance related to any 

new application/proposal which they 

are submitting or planning to submit for 

a possible new award. Any technical 

assistance that incumbent grantees 

receive must relate to activities and/or 

performance under the existing grant. 

The Department proposes to revise 

what appears as paragraph (c) in the 

current regulations in several ways. 

First, we propose to divide it into three 

paragraphs, now lettered (c), (d), and (f), 

for clarity. We also revise the text of 

what is paragraph (c) so that proposed 

paragraphs (c) and (d) accurately reflect 

and clarify the possible remedies on 

appeal. We propose to include another 

reference to § 641.900 in proposed 

paragraph (c). In paragraphs (c) and (d) 

we propose to change the word ‘‘slot’’

to ‘‘position’’ to be consistent with the 

use of the term ‘‘position’’ in the rest of 

these regulations. 

The Department proposes to add a 

new paragraph (e) to clarify that if a 

party is not satisfied with the Grant 

Officer’s decision about whether the 

organization continues to meet the 

requirements of this part, whether 

positions will be awarded to the 

organization, and the timing of the 

award, the Grant Officer must return the 

decision to the Administrative Law 

Judge for review. We propose to redesignate the remaining paragraph, 

which appears as paragraph (d) in the 

current regulations, as paragraph (f). 

We also propose grammatical and 

clarifying changes. 

May the Governor, or the Highest 

Government Official, Make 

Recommendations to the Department on 

National Grant Applications? 

(§ 641.480) 

This section explains the Governor’s, 

or the highest government official’s, 

statutory authority under section 

503(a)(5) of the OAA to make 

recommendations to the Department on 

grant applications before funds are 

awarded. We propose to add the word 

‘‘national’’ to the heading because this 

section is limited in application to 

national grants. We propose to add to 

paragraph (a) a reference to § 641.410(b); 

that is the regulatory provision that 

requires national grant applicants to 

submit their application to the 

Governor, or the highest government 

official, of each State in which projects 

are proposed. We also propose to add a 

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citation to the OAA. In paragraph (b), 

the Department proposes to drop the 

reference to the Governor making 

recommendations under 

noncompetitive conditions because 

national grants will now be competed 

on a regular basis. 

When Will the Department Compete 

SCSEP Grant Awards? (§ 641.490) 

This section outlines the 

circumstances under which there must 

be a competition for SCSEP funds. The 

Department proposes to divide 

paragraph (a) into two subparagraphs. In 

paragraph (a)(1), we propose to reflect 

the statutory requirement that the 

Department will generally hold a 

competition for national grants every 

four years. We also propose to state that 

we will publish a Solicitation for Grant 

Applications in the Federal Register. In 

paragraph (a)(2) we propose to add a 

sentence indicating that the statute gives 

the Department the authority to provide 

an additional one-year grant to national 

grantees. The Department makes these 

changes to paragraph (a) in accordance 

with section 514(a) of the 2006 OAA; we 

propose to add specific statutory cites to 

both subparagraphs of paragraph (a). 

The Department proposes to revise 

paragraph (b) to specify that when a 

State grantee fails to meet its expected 

levels of performance for the core 

indicators for three consecutive Program 

Years, the State must hold a full and 

open competition for the SCSEP funds 

allotted to the State. We propose this 

change in accordance with section 

513(d)(3)(B)(iii) of the 2006 OAA, and 

propose to add a cite to this paragraph. 

When Must a State Compete Its SCSEP 

Award? (§ 641.495) 

The Department proposes a new 

section to address the competition that 

is required if a State grantee fails to 

meet its expected core levels of 

performance for three consecutive 

Program Years. Performance measures 

were discussed in the IFR, 72 FR 35832, 

June 29, 2007. 

Subpart E—Services to Participants 

This subpart covers services to SCSEP 

participants. The Department here 

proposes to implement new provisions 

in the 2006 OAA relating to income 

eligibility, priorities in enrollment of 

participants, changes in benefit policies, 

and time limits for program 

participation. We also address the types 

of services that participants may 

receive, procedures concerning 

termination from the program, and the 

grantee’s responsibilities relating to 

participants. Comments are welcome on 

the proposed changes to subpart E 

described in this preamble or on other 

changes to subpart E which flow from 

the 2006 Amendments. 

Who Is Eligible To Participate in the 

SCSEP? (§ 641.500) 

This provision establishes the 

statutorily defined eligibility criteria. 

The Department proposes to move what 

was paragraph (b) of this section, 

concerning cross-border agreements, to 

§ 641.515 of these regulations, which 

addresses participant recruitment and 

selection, because cross-border 

agreements are more relevant to 

participant recruitment than they are to 

participant eligibility. We propose to 

revise the remaining paragraph, which 

is paragraph (a) in the current 

regulations, to add the requirement that 

age- and income-eligible individuals 

must also be unemployed, as required 

by section 502(a)(1) of the 2006 OAA. In 

the current regulations, the requirement 

that the applicant be unemployed is 

only referenced in the regulations at 

§ 641.120, relating to program purpose; 

the Department subsequently issued 

administrative guidance clarifying that 

being unemployed was an eligibility 

criterion (TEGL No. 13–04). We 

interpret section 502(a)(1) of the 2006 

OAA as treating unemployment as a 

SCSEP eligibility criterion. Such an 

interpretation is consistent with the 

training purpose of this program, and is 

also consistent with the policy 

expressed in § 641.512 of these 

regulations that job-ready individuals 

cannot be enrolled in the SCSEP but 

should be referred to an employment 

provider. Moreover, including 

unemployment as an eligibility criterion 

is consistent with the role of the SCSEP 

as serving seniors who are most in need 

of employment and training services. 

We also propose to add the word, 

‘‘Federal,’’ to clarify that the poverty 

guidelines we refer to are Federal 

poverty guidelines. 

When Is Eligibility Determined? 

(§ 641.505) 

This section states that initial 

eligibility is determined at the time of 

an individual’s application. After the 

initial eligibility determination, 

grantees/sub-recipients are responsible 

for verifying the eligibility of 

participants at least once every 12 

months, and may do so more frequently 

as circumstances require. 

The Department proposes to add the 

phrase, ‘‘including instances when 

enrollment is delayed,’’ to the last 

sentence of this section. Many grantees/ 

sub-recipients maintain waiting lists 

and considerable time may pass from 

the time of initial eligibility 

determination to the time when a 

SCSEP position becomes available. 

Accordingly, we indicate through this 

additional phrase that delayed 

enrollment is one example of a 

circumstance when it may be 

appropriate to verify continued 

eligibility of an individual. 

How Is Applicant Income Computed? 

(§ 641.507) 

This proposed new section discusses 

computing income eligibility. We 

propose to move the section that is 

numbered § 641.507 in the current 

regulations, which addresses what types 

of participant income are included and 

excluded to § 641.510. 

Section 518(a)(4) of the 2006 OAA 

delineates the procedure for calculating 

participant income. The Department 

implemented these procedures effective 

January 1, 2007, when it issued TEGL 

No. 12–06. We now propose to establish 

the same procedures in this section. 

Grantees may calculate income based on 

the income received during the 12 

months prior to application, or may 

annualize the income received during 

the 6 months prior to application. 

(Program guidance prior to TEGL No. 

12–06 limited the calculation time 

period to the 6 months prior to 

application, annualized.) The 

Department encourages grantees to 

choose the computation method that is 

most favorable to each participant, on a 

case-by-case basis, for the broadest 

possible inclusion of eligible applicants. 

What Types of Income Are Included and 

Excluded for Participant Eligibility 

Determinations? (§ 641.510) 

The Department proposes to delete 

the heading and content of what appears 

as § 641.510 in the current regulations, 

which addresses terminating a 

participant who becomes income 

ineligible, because terminations are 

fully addressed in § 641.580. The 

content of what is § 641.510 in the 

current regulations is covered in 

§ 641.580(b) of this proposed rule. 

The section addressing what types of 

income are included and excluded is 

numbered § 641.507 in the current 

regulations. We propose to move this 

heading to § 641.510 so that it may 

follow the section on computing 

income. 

The Department proposes to revise 

the substance of this section to include 

the 2006 OAA’s requirements relating to 

income eligibility determinations and to 

refer to the administrative guidance that 

provides a complete explanation of 

SCSEP participant income eligibility 

determination procedures. 

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Section 518(a)(3)(A) of the 2006 OAA 

excludes four sources of income from 

SCSEP income eligibility 

determinations. The Department issued 

administrative guidance in TEGL No. 

12–06, which implemented these 

exclusions effective January 1, 2007. 

The Department implemented these 

exclusions prior to the effective date of 

the 2006 OAA (July 1, 2007) in order to 

alleviate the difficulties grantees and 

sub-recipients have encountered in 

recruiting sufficient numbers of eligible 

individuals under the prior income 

eligibility guidelines. 

In general, the Department utilizes 

definitions from the U.S. Census 

Bureau’s Current Population Survey 

(CPS) to define income for the purposes 

of SCSEP income eligibility. However, 

in addition to the statutory exclusions 

noted above, TEGL No. 12–06 carries 

forward additional exceptions to the 

CPS definitions of income for purposes 

of SCSEP income eligibility 

determinations from guidance in effect 

prior to the 2006 OAA. The additional 

exceptions are based on the recognition 

that these income sources (e.g., child 

support, public assistance, income from 

employment and training programs) rise 

out of some state of dependency or are 

intended to encourage individuals 

drawing benefits to return to work and 

should not disqualify otherwise needy 

individuals. TEGL No. 12–06 is 

available on the SCSEP Web site, 

http://www.doleta.gov/seniors, under 

the Grantee Information, Technical 

Assistance link. 

May Grantees/Sub-Recipients Enroll 

Otherwise Eligible Individuals and 

Place Them Directly Into Unsubsidized 

Employment? (§ 641.512) 

The 2006 OAA and the Department 

encourage grantees/sub-recipients to 

work with those participants who are 

the most difficult to place, rather than 

those ready for immediate job 

placement, to provide them with the 

services necessary to develop the skills 

needed for job placement. The 

Department proposes to move and 

substantially revise what is § 641.560 in 

the current regulations and replace it 

with proposed § 641.512. We propose to 

change the heading from § 641.560 to 

clarify that the subject of this section is 

not participants but potential 

participants. We propose to move this 

provision to 641.512 so that it appears 

with more closely-related topics such as 

eligibility, recruitment, and selection. 

In the current regulations, § 641.560 

encourages grantees not to enroll 

individuals who can be placed directly 

into unsubsidized employment. 

Proposed § 651.512 forbids grantees to 

enroll job-ready individuals, instead 

encouraging grantees to refer them to an 

employment provider such as the OneStop Center for job placement assistance 

under WIA. In this way, the SCSEP can 

use its limited dollars to serve those 

who need the training the SCSEP 

provides, while individuals who do not 

need training can be served by an entity 

such as the One-Stop Career Center. 

How Must Grantees/Sub-Recipients 

Recruit and Select Eligible Individuals 

for Participation in the SCSEP? 

(§ 641.515) 

This section addresses recruitment 

and selection methods, including use of 

the One-Stop Delivery System, to ensure 

that the maximum number of eligible 

individuals have an opportunity to 

participate in the SCSEP. 

In the current regulations, paragraph 

(a) includes a list of persons (such as 

minority individuals and limited 

English speakers) whom grantees should 

seek to enroll in the SCSEP. The list 

derived from OAA section 502(b)(1)(M), 

which was amended in the 2006 OAA. 

Accordingly, the Department proposes 

to revise the list in paragraph (a) to 

reflect the amended statutory language. 

In paragraph (b), we propose to delete 

the sentence concerning listing 

community service opportunities with 

the State Workforce Agency because the 

corresponding statutory language was 

omitted from section 502(b)(1)(H) in the 

2006 OAA. 

Paragraph (c), concerning cross-border 

agreements, is new to this section. In the 

current regulations this paragraph 

appears in § 641.500, which addresses 

eligibility. The Department proposes to 

move this paragraph because crossborder agreements are more relevant to 

participant recruitment than they are to 

participant eligibility. We propose to 

specify that grantees entering into crossborder agreements must submit such 

agreements to the Department ‘‘for 

approval’’ to reflect current practice. 

Also in paragraph (c), the Department 

proposes to replace the word ‘‘slot’’

with ‘‘position’’ to be consistent with 

the rest of this part. Finally we propose 

to replace the word, ‘‘between,’’ with, 

‘‘among,’’ to allow for cross-border 

agreements involving more than two 

states. 

Are There Any Priorities That Grantees/ 

Sub-Recipients Must Use in Selecting 

Eligible Individuals for Participation in 

the SCSEP? (§ 641.520) 

In paragraph (a) of this section, the 

Department proposes to list the new 

statutory selection priorities identified 

in section 518(b) of the 2006 OAA. In 

paragraph (b), we interpret the priority 

for veterans as we did in the current 

regulations, such that the veterans’

priority is afforded to individuals 

meeting the requirements of section 2(a) 

of the Jobs for Veterans Act (JVA), 

Public Law 107–288 (2002), which 

includes certain spouses of veterans. 

In paragraph (c), we propose to 

specify an order for applying the 

priorities. The order has changed from 

what appears in the current regulations 

because the statutory priorities have 

changed. The proposed ordering of 

priorities incorporates the dual statutory 

priorities contained in the JVA and the 

OAA and is consistent with 

Departmental guidance on that topic 

(TEGL No. 5–03, available on the 

Department’s Web site). Like other 

programs, veterans who also possess 

other of the OAA priority characteristics 

receive the highest preference. Because 

veteran status is a priority in both the 

OAA and the JVA, veterans without 

other of the OAA priority characteristics 

would be next in order of priority, 

followed by non-veterans with OAA 

priority characteristics. 

Are There Any Other Groups of 

Individuals Who Should Be Given 

Special Consideration When Selecting 

SCSEP Participants? (§ 641.525 in the 

Current Regulations) 

The Department proposes to delete 

the section that appears as 641.525 in 

the current regulations because the 

statutory provision upon which it is 

based, OAA section 502(b)(1)(M), is 

addressed in § 641.515(a). 

Must the Grantee/Subgrantee Always 

Select Priority or Preference 

Individuals? (§ 641.530 in the Current 

Regulations) 

The Department proposes to delete 

the section that appears as 641.530 in 

the current regulations, because 

according to section 518(b) of the 2006 

OAA, a priority individual must always 

be chosen over a non-priority 

individual, when a choice must be 

made. We note that some grantees have 

ample program openings, so that all 

eligible individuals may be served. 

However, if there is only one opening 

and two eligible individuals apply, one 

of whom is a priority individual, the 

2006 OAA requires that the priority 

individual be given the program 

position. 

What Services Must Grantees/SubRecipients Provide to Participants? 

(§ 641.535) 

This section sets forth those services 

that grantees/sub-recipients must 

provide to all SCSEP participants. 

Grantees are encouraged to utilize the 

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WIA system to assist in accomplishing 

the responsibilities outlined in this 

section. 

Paragraph (a)(2) of this section 

describes the grantees’/sub-recipient’s 

responsibility for assessing participants. 

The Department proposes to divide this 

paragraph into two subparts, the first 

addressing what should be assessed, 

and the second addressing the 

frequency of assessments. The sentence 

that now appears in proposed paragraph 

(a)(2)(i) is the first portion of paragraph 

(a)(2) in the current regulations. In 

proposed paragraph (a)(2)(ii) we revise 

the language that appears as the 

remaining portion of paragraph (a)(2) in 

the current regulations. We propose to 

state that the various assessment 

functions described in paragraph 

(a)(2)(i) of this section must be done 

initially upon program entry, and then 

subsequently as necessary, but at least 

two times a year. The initial assessment 

may count as one of the two that are 

required in the first year. This 

clarification is consistent with the 

expectation that unsubsidized 

employment is a goal for SCSEP, and all 

participants should be periodically 

assessed to check their progress toward 

transitioning to unsubsidized 

employment. 

We propose several changes to 

paragraph (a)(3) of this section, which 

concerns IEPs. First, we propose to 

divide this paragraph into two 

subparagraphs to clearly delineate 

grantee/sub-recipient responsibilities 

related to the IEP. We propose to add 

the phrase, ‘‘that includes an 

appropriate employment goal,’’ after, 

‘‘develop an IEP,’’ in paragraph (a)(3)(i) 

because unsubsidized employment is a 

goal for all of the SCSEP, and every IEP 

should be oriented toward that eventual 

goal. We propose to remove the 

reference to § 641.260 that appears in 

the current regulations; such a section 

does not exist in the current regulations 

nor is it in the proposed regulation. 

Instead, § 641.230 provides that an 

assessment or IEP completed by the 

SCSEP satisfies any condition for an 

assessment, service strategy, or IEP 

completed at the One-Stop, and viceversa, so we add a reference to that 

section in paragraph (a)(3)(i). We 

propose to add the word, ‘‘initial,’’

before the word, ‘‘assessment’’ in 

paragraph (a)(3)(i) to distinguish this 

assessment from subsequent 

assessments. Additionally, the 

Department proposes to change the 

wording in both subparagraphs of 

paragraph (a)(3) to refer to an individual 

participant and an IEP rather than using 

the plural ‘‘participants’’ and ‘‘IEPs;’’ we 

propose these changes to clarify that an 

IEP must be developed for each 

participant individually. We also 

propose to add the words ‘‘assessment 

and’’ between ‘‘WIA’’ and ‘‘IEP’’ to 

clarify that assessments and IEPs are 

distinct; an assessment is used to 

develop an IEP. Finally, in proposed 

paragraph (a)(3)(ii), which addresses 

updating the IEP, we make one change 

from the language that appears as the 

last portion of paragraph (a)(3) in the 

current regulations. We propose to add 

the word, ‘‘subsequent’’ before 

‘‘participant assessments’’ to distinguish 

these assessments from the initial 

assessment. 

With regard to the assessments and 

IEPs discussed in paragraphs (a)(2) and 

(a)(3), we note that section 502(b)(1)(N) 

of the 2006 OAA requires that grantees/ 

sub-recipients prepare an assessment of 

participants’ skills, talents, and needs 

for services, and a ‘‘related service 

strategy.’’ The Department has 

determined that preparation of the IEP 

fulfills the requirement for a related 

service strategy. 

In paragraph (a)(4) of this section we 

propose to change the word ‘‘activity’’

to ‘‘assignment’’ to be consistent with 

the term ‘‘community service 

employment assignment’’ used 

throughout this proposed rule. 

Paragraph (a)(5) broadly addresses the 

training services that grantees/subrecipients must provide to participants. 

(Section 641.540 addresses the specific 

types of training that may be provided.) 

In the current regulations there are two 

paragraphs concerning training: 

Paragraph (a)(5) addresses training 

specific to the community service 

employment assignment and paragraph 

(a)(6) addresses other training identified 

in participants’ IEP. The Department 

proposes to merge those two paragraphs 

into a single paragraph because all 

training, whether or not initially 

provided specific to a community 

service assignment, must be consistent 

with a participant’s IEP and should 

move the participant toward the goal of 

unsubsidized employment. Indeed, we 

consider the IEP to drive all services 

provided to participants, including 

training services. The remaining 

paragraphs have been renumbered 

accordingly. 

We note that it is still permissible to 

provide training that enables a 

participant to successfully fulfill the 

duties of his or her community service 

employment assignment. However, such 

training is acceptable only so long as it 

is consistent with the IEP. Further, all 

training must contribute to the eventual 

goal of unsubsidized employment. 

Clearly, IEPs and training needs will 

vary greatly among participants. 

Nevertheless, the course charted in the 

IEP should be pointed in the direction 

of unsubsidized employment, and any 

training provided should advance the 

participant further along in that same 

direction. 

Paragraph (a)(6), which appears as 

paragraph (a)(7) in the current 

regulations, remains unchanged. 

Proposed paragraphs (a)(7) and (a)(8) of 

this section appear in the current 

regulations, but are located at 

paragraphs (a)(12) and (a)(13). We 

propose to move them to paragraphs 

(a)(7) and (a)(8) to give a better sense of 

time order in the grantee’s/subrecipient’s responsibilities. In paragraph 

(a)(7), the Department proposes to add 

the phrase ‘‘or referring participants to 

appropriate services’’ to more closely 

follow the statute and to indicate that, 

in addition to providing services 

directly or through WIA partner 

programs, SCSEP grantees/subrecipients can use the One-Stop Centers 

to access the services of other service 

providers in the community. 

In paragraph (a)(9) of this section, the 

Department proposes to change the term 

‘‘fringe benefits’’ to ‘‘benefits.’’ We 

propose to delete the word ‘‘fringe’’

from the phrase ‘‘fringe benefits’’

throughout this proposed rule, to 

reinforce the notion that the SCSEP is a 

temporary training program as opposed 

to a more permanent employment 

situation, and to correspond to the same 

change in section 502(c)(6)(A) of the 

2006 OAA. The Department also 

proposes to specify in paragraph (a)(9) 

that participants must receive a wage 

while in training, to conform to the 2006 

OAA at sections 502(b)(1)(I), 

502(b)(1)(J), and 502(c)(6)(A), as well as 

during orientation. Lastly, we propose 

to add to this paragraph a reference to 

the specific regulation sections that 

address wages and benefits. 

The paragraphs that appear as (a)(9) 

and (a)(11) in the current regulations 

remain unchanged but appear here as 

paragraphs (a)(10) and (a)(11). The 

Department proposes to delete what is 

paragraph (a)(10) in the current 

regulations. That paragraph requires 

grantees to verify participant income at 

least once every 12 months and is 

repetitive of § 641.505. We also propose 

to delete what is paragraph (a)(14) in the 

current regulations, which discusses 

following up with participants to 

determine their need for supportive 

services after placement into 

unsubsidized employment, for two 

reasons. First, § 641.545 already permits 

grantees to provide or arrange for 

supportive services after placement into 

unsubsidized employment. Second, the 

paragraph’s placement in the current 

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regulations in this section meant that 

grantees/sub-recipients were required to 

follow up with participants to 

determine if they needed supportive 

services. Although the Department 

strongly encourages follow-up with 

participants to support them in their 

unsubsidized employment, it is not 

required. (OAA sec. 502(c)(6)(A)(iv)). 

We also propose to delete what is 

paragraph (a)(15) in the current 

regulations. That paragraph requires 

grantees/sub-recipients to follow up 

with former participants to determine 

whether that person was still employed. 

Although grantees/sub-recipients are 

still required to obtain retention data, it 

is not necessarily done by contacting the 

participant, nor is that a service 

provided to the participant, which is the 

subject of this section. 

Paragraph (b) of this section remains 

unchanged. Paragraph (c) of this section 

states that grantees may not use SCSEP 

funds for individuals who only need job 

search assistance or job referral services. 

We propose to add to this paragraph a 

parenthetical reference to § 641.512, 

which provides that grantees cannot 

enroll job-ready participants, but must 

refer them to an employment provider 

such as the One-Stop Center for job 

placement assistance. 

Finally, we propose several 

grammatical and technical corrections 

in this section. 

What Types of Training May Grantees/ 

Sub-Recipients Provide to SCSEP 

Participants in Addition to the Training 

Received at the Community Service 

Employment Assignment? (§ 641.540) 

This section addresses the many 

forms that SCSEP training may take. 

Training received at the community 

service employment assignment is not 

within the scope of this section, 

however. The Department proposes to 

rephrase the heading accordingly, for 

clarity. For the same reason, we also 

propose to delete what appears in the 

current regulations as the last sentence 

of paragraph (a) of this section. 

Paragraph (a) provides the conceptual 

framework for training. The Department 

proposes to add the phrase ‘‘and that 

prepares them for unsubsidized 

employment’’ to this paragraph because 

SCSEP training should advance the 

participant toward the goal of 

unsubsidized employment. 

In paragraph (b), the Department 

proposes to replace training ‘‘before or 

after placement in’’ with ‘‘prior to 

beginning or concurrent with’’ a 

community service employment 

assignment. This change is consistent 

with statutory language at section 

502(c)(6)(A)(ii) of the 2006 OAA, and 

clarifies that training may take place as 

soon as a participant has been assigned 

to a community service employment 

assignment even if the participant has 

not yet begun working at that 

assignment. 

Since the current regulations were 

published, online training has become 

more common. In many cases quality 

training can be obtained in an online 

environment that allows individuals 

with transportation difficulties access to 

training. Therefore, the Department 

proposes to add ‘‘online instruction’’ to 

the list of the types of training allowable 

in paragraph (c) to clarify that such 

instruction is an allowable use of 

training funds. 

The Department proposes to remove 

the following sentence which appears as 

paragraph (d) of this section in the 

current regulations: ‘‘Grantees and subrecipients are encouraged to place a 

major emphasis on training available 

through on-the-job experience.’’ The 

Department proposes this change 

because secs. 502(b)(1)(I) and 

502(c)(6)(A)(ii) of the 2006 OAA 

emphasize the importance of all types of 

training in the SCSEP, not only on-thejob training. What is paragraph (e) in the 

current regulations becomes proposed 

paragraph (d) and is unchanged. 

The Department proposes to split 

what is paragraph (f) in the current 

regulations into two paragraphs. The 

first portion, addressing paying for 

training, becomes paragraph (e). We 

revise the language in paragraph (e) to 

mirror the language at section 

502(c)(6)(A)(ii) of the 2006 OAA. The 

second portion, addressing wages 

during training, stands alone as the new 

paragraph (f). The Department also 

proposes to change the new paragraph 

(f), to state that participants ‘‘must’’ be 

paid wages while in training, to be 

consistent with the amended statute. 

(OAA sec. 502(b)(1)(I)). We also propose 

to add a reference to the paragraph of 

the proposed rule that describes 

participants’ wages. 

The Department proposes to broaden 

paragraph (g) to address supportive 

services generally, whereas the subject 

of this paragraph in the current 

regulations is, ‘‘travel and room and 

board.’’ We propose this change to 

conform with section 502(b)(1)(L) of the 

OAA. The Department encourages 

grantees and sub-recipients to seek 

outside sources of assistance to help 

provide supportive services to 

participants. We continue to say that a 

grantee/sub-recipient ‘‘may’’ pay for the 

costs of supportive services for two 

reasons: first, because we encourage 

grantees/sub-recipients to obtain 

supportive services from sources other 

than the grant whenever possible and 

second, because a grantee/sub-recipient 

is not required to provide supportive 

services when it determines that the 

supportive services would be too 

expensive, are not available, or would 

not be necessary to enable the 

participant to participate in the 

program. When a grantee/sub-recipient 

decides to approve supportive services, 

however, it must either pay for or obtain 

the services. 

Paragraph (h) explains that in 

addition to training paid for by the 

SCSEP, participants may obtain training 

on their own, if they wish. We propose 

to clarify that any such training would 

be at the participant’s own expense. 

What Supportive Services May 

Grantees/Sub-Recipients Provide to 

Participants? (§ 641.545) 

This section addresses the supportive 

services that grantees/sub-recipients 

may provide to participants. In 

paragraph (a), the Department proposes 

to replace ‘‘supportive services to assist 

participants’’ with ‘‘supportive services 

that are necessary to enable an 

individual’’ to successfully participate 

in SCSEP projects, to conform to 

language in secs. 502(c)(6)(A)(iv) and 

518(a)(7) of the 2006 OAA. The 

Department interprets this revision in 

statutory language concerning the 

purpose of supportive services to be 

somewhat more prescriptive. That is, 

the supportive services that are 

appropriately provided by the SCSEP 

are those that are necessary to make it 

possible for an individual to participate 

in the SCSEP—not just any supportive 

service that would assist an individual 

to participate in the program. Indeed, 

we view the new language as conveying 

a tighter requirement that the supportive 

services be more directly related to the 

eventual employment goal. 

At the same time, we also propose to 

change ‘‘child and adult care’’ to 

‘‘dependent care,’’ ‘‘temporary shelter’’

to ‘‘housing,’’ and add needs-related 

payments, as examples of supportive 

services. These revisions are consistent 

with the language in OAA section 

518(a)(7), and are chosen to be as 

inclusive as possible of all allowable 

supportive services. Therefore, while we 

interpret the purpose of SCSEP 

supportive services to be slightly 

narrower than in the past, the scope of 

available supportive services is slightly 

more expansive. We also propose to add 

to this paragraph a citation to the 

provision of the 2006 OAA that defines 

supportive services. Paragraph (b) 

remains unchanged. 

We propose to add a paragraph (c) to 

this section, and move to it a revised 

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version of what appears in § 641.555(a) 

in the current regulations. Section 

641.555(a) requires grantees to contact 

participants during the first six months 

following placement to determine their 

need for supportive services. In the 

proposed paragraph (c), the Department 

proposes to change ‘‘must’’ to ‘‘are 

encouraged to,’’ to clarify that there is 

no statutory requirement that grantees/ 

sub-recipients follow-up with 

participants after they have been placed 

in unsubsidized employment. The 

statute allows such follow-up, however, 

and the Department strongly encourages 

it. Also in paragraph (c), the Department 

proposes to extend the time period 

during which grantees/sub-recipients 

may contact placed participants from 6 

months to 12 months. We propose this 

change because one of the new 

additional SCSEP indicators of 

performance is retention in employment 

at one year; grantees/sub-recipients 

should be authorized to support placed 

participants in maintaining their 

employment throughout this one-year 

timeframe. The Department also 

proposes to change the word ‘‘during’’

to ‘‘throughout’’ in describing the 12 

month period, to clarify that the 

Department prefers that grantees/subrecipients not wait until 12 months have 

passed to contact a placed participant. 

Instead, we encourage grantees/subrecipients to contact placed participants 

as often as necessary to ensure that they 

have the needed supportive services to 

maintain unsubsidized employment. 

SCSEP grantees/sub-recipients may 

utilize other organizations, including 

One-Stop partners, to contact the placed 

participants on behalf of the SCSEP, to 

determine if supportive services are 

necessary. SCSEP grantees/subrecipients are authorized to pay for or 

arrange for necessary supportive 

services during this twelve month 

period. 

What Responsibility Do Grantees/SubRecipients Have To Place Participants in 

Unsubsidized Employment? (§ 641.550) 

This section outlines grantees’/subrecipients’ responsibility to place 

participants in unsubsidized 

employment. The Department proposes 

to change ‘‘should’’ to ‘‘must,’’ and 

‘‘reasonable efforts’’ to ‘‘every effort,’’ in 

the proposed clause ‘‘grantees and subrecipients must make every effort to 

place participants into unsubsidized 

employment.’’ We propose these 

changes to strengthen the emphasis on 

placement in unsubsidized 

employment, consistent with the 2006 

OAA. The Department proposes to 

remove the phrase ‘‘in accordance with 

each participant’s IEP,’’ which appears 

in the first sentence of this section in 

the current regulations, and the phrase 

that appears in the second sentence, 

‘‘whose IEPs include an unsubsidized 

employment placement goal,’’ to 

emphasize that a goal for all of the 

SCSEP is to move participants into 

unsubsidized employment. Similarly, 

the Department proposes to remove the 

phrase ‘‘as many as possible’’ in the first 

sentence to again emphasize that 

unsubsidized employment is a goal for 

the SCSEP. Finally, the Department 

proposes to add the phrase ‘‘and 

because the SCSEP limits the amount of 

time a participant can remain in the 

program’’ to the first sentence because 

the 2006 OAA establishes a time limit 

for SCSEP participation that reinforces 

the responsibility to place participants 

in unsubsidized employment. (OAA sec. 

518(a)(3)(B)). 

What Responsibility Do Grantees Have 

to Participants Who Have Been Placed 

in Unsubsidized Employment? 

(§ 641.555 in the Current Regulations) 

The Department proposes to remove 

this section from the regulations. 

We propose to move what is 

paragraph (a) of this section, addressing 

grantees contacting placed participants 

to determine their need for supportive 

services, to § 641.545(c). Paragraph (b) 

of this section requires grantees to 

contact participants to obtain retention 

data. Paragraph (c) of this section states 

that subparts G and H of this part may 

include follow-up requirements. We 

propose to remove paragraphs (b) and 

(c) because grantees are not required to 

contact former participants to obtain 

retention data; retention information is 

generally obtained through other means. 

May Grantees Place Participants 

Directly Into Unsubsidized 

Employment? (§ 641.560 in the Current 

Regulations) 

In the current regulations, this section 

encourages grantees not to enroll 

individuals who could be placed 

directly into unsubsidized employment. 

The Department proposes to remove this 

section; this topic is now addressed in 

a new § 641.512 in this part. 

What Policies Govern the Provision of 

Wages and Benefits to Participants? 

(§ 641.565) 

The Department proposes significant 

substantive changes to this section 

required by revisions in section 

502(c)(6)(A)(i) of the 2006 OAA. The 

Department also proposes to change the 

formatting of this section to outline 

form, rather than paragraphs containing 

multiple sentences, for clarity. 

Paragraph (a) of this section addresses 

participant wages. In paragraph (a)(1)(i) 

we propose to delete the phrase 

‘‘required by the grantee/subgrantee’’

after the word ‘‘training’’ because the 

2006 OAA requires participants to be 

paid for all time spent in training. OAA 

section 502(b)(1)(I). Also, the SCSEP no 

longer uses the term ‘‘required 

training.’’ Although the program may in 

the past have considered training called 

for in the IEP to be ‘‘necessary’’ or 

‘‘required’’ training, those terms are no 

longer employed. Indeed, under these 

proposed regulations all training 

provided by the SCSEP should be 

identified in the IEP. We also propose 

to remove the words ‘‘work in’’ before 

‘‘community service employment 

assignments’’ because they are not 

needed in the amended language. We 

also propose to change ‘‘minimum’’ to 

‘‘required’’ in the phrase, ‘‘highest 

applicable required wage,’’ because the 

prevailing rate of pay is not a minimum 

wage. 

In proposed paragraph (a)(1)(ii) the 

Department states that grantees may pay 

participants for time spent on WIA 

intensive services. This policy is not 

new; it is stated in § 641.240(d) in the 

current regulations. However, we 

propose to move the provision so that it 

appears here, in the provision relating to 

wages. 

Paragraph (a)(2) addresses the highest 

applicable required wage, and is 

essentially unchanged from the current 

regulations. The only change is to again 

change the word, ‘‘minimum’’ to 

‘‘required,’’ in the phrase ‘‘highest 

applicable required wage’’ because the 

prevailing rate of pay is not a minimum 

wage. 

In paragraph (a)(3), the Department 

proposes to add language to clarify the 

grantee’s/sub-recipient’s responsibility 

to make any necessary adjustments in 

minimum wage rates during the course 

of the grant term, should such a change 

be required by Federal, State, or local 

statute. Grantees are responsible for 

managing their funds well and enrolling 

only as many participants as they have 

the capacity to serve. In determining 

how many participants to enroll, 

grantees should make reasonable efforts 

to anticipate any likely adjustments in 

the minimum wage rates that may be 

required during the grant term. 

Paragraph (b) of this section addresses 

benefits. The Department proposes to 

change the term ‘‘Fringe Benefits’’ to 

‘‘Benefits’’ in the heading and remove 

‘‘fringe’’ from the subheadings and in 

the text of the regulations. As discussed 

above, we propose this change 

throughout this part to reinforce the 

notion that the SCSEP is a temporary 

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training program as opposed to a more 

permanent employment situation, and 

to adhere to the same change in section 

502(c)(6)(A) of the 2006 OAA. 

The Department proposes to organize 

paragraph (b) to distinguish two 

categories of participant benefits: 

required and prohibited. These 

categories clearly communicate to 

grantees and sub-recipients both 

obligations and proscriptions. This 

organization is also consistent with 

language in the 2006 OAA. In the 2000 

OAA, section 502(c)(6)(A)(i) merely 

described ‘‘enrollee wages and fringe 

benefits (including physical 

examinations),’’ but in the 2006 OAA 

the same section was expanded to 

mention various required and 

prohibited benefits. 

Proposed paragraph (b)(1) addresses 

required benefits. Grantees/subrecipients must provide such benefits as 

are required by law. Grantees should 

determine which benefits are required 

by law in their area(s) and should 

submit that information as part of their 

grant application. 

Proposed paragraph (b)(1)(i) remains 

unchanged; in this paragraph we state 

that grantees/sub-recipients must 

provide benefits uniformly to all 

participants within a project or 

subproject. Proposed paragraph (b)(1)(ii) 

also remains unchanged, and provides 

that participants must be offered the 

opportunity to receive a physical 

examination annually. Proposed 

paragraphs (b)(1)(ii)(A) and (b)(1)(ii)(B), 

which further address physical 

examinations, also remain unchanged. 

We propose a new paragraph 

(b)(1)(ii)(C) in which we state that 

SCSEP funds may be used to pay the 

costs of the physical examinations. 

Some grantees and sub-recipients are 

able to obtain physical examinations at 

no cost, or locate other sources of 

assistance to pay for the examinations. 

The Department encourages this sort of 

leveraging of community resources. 

Nevertheless paying for the physical 

examinations with grant funds is an 

allowable SCSEP cost. 

Proposed paragraph (b)(1)(iii) 

addresses workers’ compensation law; 

this paragraph is unchanged from the 

current regulations. Proposed paragraph 

(b)(1)(iv) concerns unemployment 

compensation. If State law requires 

grantees/sub-recipients to provide 

unemployment compensation coverage, 

then clearly it would be a required 

benefit under the SCSEP. For that 

reason, and to be consistent with the 

treatment of unemployment 

compensation coverage by the 2006 

OAA as a required benefit, we propose 

to move and revise the regulatory 

provision addressing unemployment 

compensation to this paragraph. In the 

current regulations this provision is 

located at paragraph (b)(4) of this 

section, and is phrased in the negative 

(‘‘[u]nless required by law, grantees may 

not * * *’’). We propose to place this 

provision at paragraph (b)(1)(iv) and 

state that if it is required by State law, 

then grantees/sub-recipients must 

provide unemployment compensation 

coverage. We note that where not 

required by State law, unemployment 

compensation coverage is not an 

allowable benefit. 

The Department proposes to add a 

requirement at paragraph (b)(1)(v), in 

accordance with section 502(c)(6)(A)(i) 

of the 2006 OAA, requiring grantees and 

sub-recipients to provide compensation 

for scheduled work hours during which 

an employer’s business is closed for a 

Federal holiday. For the limited purpose 

of implementing this provision, the 

Department proposes to interpret the 

word ‘‘employer’’ in section 

502(c)(6)(A)(i) of the 2006 OAA to mean 

host agency. This interpretation will 

promote uniform treatment of SCSEP 

participants at the same host agency, 

regardless of which entity is the 

program operator. 

The Department broadly interprets the 

word ‘‘compensation’’ in this context to 

allow for a variety of practices. 

Grantees/sub-recipients may 

compensate participants for scheduled 

work hours during which a host agency 

is closed for a Federal holiday by 

methods such as paying for the time a 

participant would have worked had it 

not been a Federal holiday (essentially 

a paid day off), or allowing a participant 

to make up the missed work hours on 

other days. Other methods of 

compensation may be allowable, but 

must be discussed in the grant 

application. Whatever the method of 

compensation offered, the compensation 

must be used within a reasonable period 

of time, and within the Program Year. 

Grantees and sub-recipients may 

develop policies that require the use of 

offered compensation sooner, for 

example, within a pay period; such 

policies must be described in the grant 

application. 

The intent of the Department here is 

to allow flexibility in administering the 

SCSEP but prevent any carry-over of 

benefits from one Program Year to the 

next. For example, if a host agency is 

closed for Memorial Day, then a 

participant assigned to that host agency 

must be compensated for that Federal 

holiday. The participant may be paid. 

Alternatively, the participant may be 

allowed to work extra hours on other 

days to make up the missed time, but 

those extra hours must be worked before 

the Program Year ends on June 30, if not 

before. Because no benefits may be 

carried over to the next Program Year, 

if a participant is provided an 

opportunity to make up the time but is 

unable to do so by June 30, the 

participant may be paid for the time. 

In paragraph (b)(1)(vi) the Department 

proposes that grantees and subrecipients are required to provide 

necessary sick leave that is not part of 

an accumulated sick leave program, 

again in accordance with section 

502(c)(6)(A)(i) of the 2006 OAA. The 

statute does not specify whether this 

sick leave must be paid or unpaid. 

Accordingly, the Department interprets 

the statute to allow either option, but 

requires grantees to explain their sick 

leave policy in their grant application. 

Necessary sick leave must be 

administered uniformly for all 

participants. 

The Department interprets the word 

‘‘accumulate’’ as meaning any storing of 

unused sick leave. Thus while it would 

be permissible for a grantee to have a 

policy allowing, say, six days of sick 

leave over the course of a Program Year, 

it would not be permissible for 

participants to ‘‘earn’’ a day of sick 

leave every two months and store the 

unused days. By way of another 

example, it would be permissible for a 

grantee to allow each participant one 

day a month of sick leave, as long as 

unused sick days did not store, or 

accumulate. We understand the sick 

leave contemplated by the statute to be 

sick leave that is either used or zeroed 

out at the end of the period provided in 

the grantee’s leave policy but at least at 

the end of the Program Year (e.g., if the 

grantee’s policy provides for one day of 

sick leave a month, the sick leave would 

be zeroed out at the end of the month; 

if the grantee’s policy provides for 12 

days of sick leave a year, the unused 

sick leave would be zeroed out at the 

end of the year). Again, grantees must 

explain their method of administering 

this required benefit in their grant 

application. 

The Department proposes to 

consolidate the provisions addressing 

prohibited benefits into a new 

paragraph (b)(2) (in the current 

regulations benefit restrictions appear in 

paragraphs (b)(3) and (b)(4)) and expand 

the prohibitions in light of the 2006 

OAA. Section 502(c)(6)(A)(i) of the 2006 

OAA prohibits grantees from using 

SCSEP funds to pay the cost of pension 

benefits, annual leave, accumulated sick 

leave, and bonuses. Again, the 

Department’s intent concerning these 

restrictions is to make compensation 

and benefits for SCSEP more consistent 

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with compensation and benefits 

received by participants in other timelimited training programs, rather than 

those in permanent employment 

situations. This is consistent with an 

increased emphasis on the goal of 

placing SCSEP participants in 

unsubsidized employment. 

The Department also proposes to 

prohibit the carry over of allowable 

benefits from one Program Year to the 

next. This policy is not new to the 

SCSEP. It was promulgated in TEGL No. 

29–04, dated April 18, 2005, and is 

designed to encourage participant selfsufficiency by discouraging participants 

from staying in the SCSEP indefinitely, 

thus preventing participation by other 

SCSEP-eligible individuals. We also 

propose to prohibit the payout of any 

unused benefits such as sick leave. This 

policy is consistent with the 2006 

OAA’s prohibition on paying the cost of 

accumulated sick leave, and supports 

the view of the SCSEP as a training 

program rather than a long-term 

employment situation. 

The Department interprets section 

502(c)(6)(A)(i) of the 2006 OAA as 

articulating which benefits are required, 

and which benefits are prohibited; no 

benefits other than the required benefits 

are allowable. Grantees/sub-recipients 

may not offer additional benefits to 

SCSEP participants. This interpretation 

of the statute is consistent with the 

Department’s vision of the SCSEP as a 

temporary training opportunity. 

Is There a Time Limit for Participation 

in the Program? (§ 641.570) 

Section 518(a)(3)(B) of the 2006 OAA 

establishes a new time limit of 48 

months for participation in the SCSEP, 

unless the Department authorizes an 

increased period of participation for 

particular participants. The 2006 OAA 

(sec. 502(b)(1)(c)) also requires SCSEP 

projects to manage their program such 

that the average participation period for 

all a project’s participants is not greater 

than 27 months, unless an extension has 

been granted. The Department proposes 

to completely revise § 641.570 to reflect 

these statutory changes. 

In the proposed paragraph (a), the 

Department describes the 48-month 

time limit required by section 

518(a)(3)(B) of the 2006 OAA, and refers 

readers to paragraph (b) of this section 

which addresses increased periods of 

participation for certain individuals, as 

well as paragraph (c) of this section, 

which addresses the average 

participation cap. In paragraph (a) the 

Department requires grantees/subrecipients to inform new participants of 

the time limit and possible extension at 

enrollment. However, grantees/subrecipients should also notify current 

participants immediately, if they have 

not already done so, because the time 

limit began on July 1, 2007 for all 

participants enrolled as of that date. 

The Department proposes a new 

paragraph (b) to provide the rules for 

requesting an exception to the 48-month 

participation limit for certain 

individuals. Section 518(a)(3)(B)(ii) of 

the 2006 OAA allows grantees to request 

to increase the period of participation 

for individuals who: have a severe 

disability; are frail or are age 75 or older; 

meet the eligibility requirements related 

to age for, but do not receive, benefits 

under title II of the Social Security Act; 

live in an area with persistent 

unemployment and have severely 

limited employment prospects; or have 

limited English proficiency or low 

literacy skills. The Department will 

authorize an increased period of 

participation up to an additional 12 

months for any participant who meets 

one or more of these criteria. Each 

participant is eligible for one extension. 

The Department is proposing to 

implement the statutory extension as a 

one-per-participant, maximum one-year 

extension to ensure that participation is 

not indefinitely extended, thus 

preventing other eligible individuals 

from benefiting from the SCSEP. The 

2006 OAA allows the average 

participation cap to be extended for an 

additional nine months (see 

§ 641.570(c)(2)). The Department 

reasoned that if the average cap could 

only be extended by nine months, then 

the individual period of participation 

should not be increased beyond a year 

to limit the risk of exceeding the average 

participation cap. 

The Department proposes a new 

paragraph (c) to implement the average 

participation cap set by section 

502(b)(1)(C) of the 2006 OAA. Each 

SCSEP project must manage the 

participation period for its enrollees 

such that the average participation cap 

for all participants in the project does 

not exceed 27 months, or 36 months 

under the extension available in 

§ 641.570(c)(2). The Department has 

determined that for the purposes of this 

paragraph, each SCSEP grantee (whether 

State or national) will be considered to 

have one project. That is, the average 

participation cap will be applied to the 

single, over-arching project, not to each 

local project independently. This is 

consistent with subpart G of this part, in 

which grantees are responsible for 

managing their various projects to 

achieve the expected levels of 

performance for the grant as a whole. 

This approach also affords grantees 

discretion to manage their subrecipients and/or individual projects in 

whatever way best suits their 

circumstances, to realize the average 

participation cap. 

The average participation cap must be 

achieved notwithstanding any 

individual extensions authorized 

pursuant to paragraph (b) of this section. 

That is, even if certain participants are 

allowed to remain in the program more 

than 48 months, each project must 

nevertheless satisfy the average 

participation cap for the project as a 

whole. 

A grantee may request an extended 

period of average participation, if the 

grantee demonstrates in a request to the 

Department the existence of extenuating 

circumstances relating to the factors 

enumerated in section 513(a)(2)(D) of 

the 2006 OAA and listed in paragraph 

(c)(2) of this section. The Department 

may authorize an extended average 

period of not more than 36 months for 

a specific project area for a particular 

Program Year. OAA section 

502(b)(1)(C)(ii). 

Proposed paragraph (d) addresses the 

circumstance of an authorized break in 

participation. Some grantees have 

developed policies for authorized breaks 

in participation, to address situations 

such as when a suitable community 

service employment assignment is not 

available, or when a participant must 

take a leave of absence to attend to a 

loved one or for medical reasons. Such 

policies must be in writing and must be 

included in the grant application. The 

Department does not consider 

authorized breaks in participation, if 

taken pursuant to an approved grantee 

policy and entered into the SCSEP 

Performance and Results Quarterly 

Performance Reporting (SPARQ) system, 

to count against the individual 

participation limit or the average 

participation cap. 

We propose to add a new paragraph 

(e), stating that we will issue 

administrative guidance detailing the 

processes by which a grantee may 

request an increased period of 

participation pursuant to paragraph (b) 

and by which a grantee may request an 

extended average participation cap 

pursuant to paragraph (c)(2). 

Finally, in proposed paragraph (f), the 

Department provides grantees the 

authority to limit individual 

participation to a time period less than 

the 48 months required by statute and 

described in paragraph (a) of this 

section. To set a lower individual 

participation limit, grantees must 

specify and describe their proposed 

participation limit in their grant 

application. In addition, only lower 

participation limits that are uniformly 

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applied to all participants are 

acceptable. 

May a Grantee/Sub-Recipient Establish 

a Limit on the Amount of Time Its 

Participants May Spend at Each Host 

Agency? (§ 641.575) 

Consistent with the current 

regulations, the Department allows 

grantees to establish time limits on host 

agency assignments. In the proposed 

rule, however, we add a phrase to the 

first sentence of this section to 

encourage rotations among different 

host agencies, or among different 

assignments within the same host 

agency, as such rotations may increase 

participants’ skills development and 

employment opportunities. The 

Department also proposes to change the 

second sentence to clarify that rotations 

should be consistent with, though not 

necessarily reflected in (as is the 

language used in the current 

regulations), the participants’ IEPs. 

Finally, we note in this proposed 

section that neither the individual 

participation limit nor the average 

participation cap is impacted by host 

agency rotations. That is, a new host 

agency assignment does not ‘‘re-start the 

clock’’ for purposes of the individual 

participation limit or the average 

participation cap. 

The Department encourages grantees 

that establish time limits to discuss this 

aspect of the program with participants, 

at least during orientation and 

preferably more often than that. Early 

and ongoing communication concerning 

host agency rotations is likely to 

decrease participants’ anxieties about 

changing assignments. 

Is There a Limit on Community Service 

Employment Assignment Hours? 

(§ 641.577) 

This proposed new section limits the 

number of community service 

employment assignment hours to 1,300 

per Program Year. Though this 

provision represents a change from the 

current regulations, a similar provision 

appeared in the 1995 final rule. In the 

1995 rule, all paid time, including time 

spent on activities such as orientation 

and training, was limited to 1,300 hours 

per year. In the proposed rule, only 

hours spent at the community service 

employment assignment are subject to 

the 1,300-hour limit. This difference is 

meaningful because, consistent with the 

2006 OAA and other aspects of this 

proposed rule, the proposed 1,300-hour 

limit does not discourage participant 

training. The Department wants to 

consistently encourage grantees and 

participants to utilize available 

resources to obtain training that will 

enhance participants’ skills and 

employability. At the same time, the 

Department wants to make sure that the 

1,300-hour limit does not significantly 

reduce the needed community services 

that participants provide, or the 

participants’ opportunity to earn needed 

wages. 

Further, a limit of 1,300 hours per 

year reinforces that SCSEP is meant to 

provide temporary, part-time 

community service employment 

assignments. It is our experience that 

most SCSEP grantees comply with the 

purpose of providing temporary, parttime employment assignments. The 

annual limit of 1,300 hours is well 

above the average hours worked per 

year by SCSEP participants, which is 20 

hours a week for 52 weeks, or 1,040 

hours. The proposed limitation will 

eliminate full-time and/or long-term 

assignments that are significantly above 

the hours worked by the average 

participant. A limit on the number of 

hours worked per year also promotes 

program efficiency by ensuring that 

grantees and sub-recipients do not 

spend a disproportionate amount of 

funds on some individual participants, 

limiting the participation of other 

eligible individuals in the program. 

Under What Circumstances May a 

Grantee/Sub-Recipient Terminate a 

Participant? (§ 641.580) 

This section addresses the various 

reasons for terminating a participant 

and describes the basic terminations 

procedures. The Department proposes 

several minor changes in this section to 

ensure consistency in termination 

proceedings, including consistently 

requiring that a grantee/sub-recipient 

‘‘must give the participant written 

notice explaining the reason(s) for 

termination.’’ The current regulations 

use various phrasings to describe the 

written notice and do not require 

written notice in every case of 

termination. 

Grantees/sub-recipients may serve 

only those individuals who are eligible 

for the SCSEP. Paragraphs (a), (b), and 

(c) of this section address situations in 

which participants are found not to be 

eligible for the program. In paragraph 

(a), describing termination based on 

false information, the Department 

proposes to add the word ‘‘knowingly’’

to clarify that the situation addressed by 

this paragraph is one where the 

participant knowingly furnished false 

information that leads to an incorrect 

eligibility determination. In the 

alternative, if a grantee/sub-recipient 

learns that a participant mistakenly 

provided incorrect information that may 

impact eligibility, the grantee/subrecipient should verify the individual’s 

eligibility. If the person is actually not 

eligible for the SCSEP, the grantee/subrecipient must terminate the individual 

pursuant to § 641.580(b). 

The Department proposes various 

changes in paragraph (b). This 

paragraph provides that if, during 

verification of eligibility, a grantee/subrecipient determines that a participant 

is no longer eligible, the participant 

must be terminated. The ‘‘must 

terminate’’ in this paragraph is a change 

from the current regulations which 

allow that grantees ‘‘may terminate’’

such a participant. We propose this 

change because the SCSEP cannot serve 

ineligible individuals. The Department 

also proposes to broaden this paragraph 

to apply to eligibility issues in general, 

and not merely income eligibility as in 

the current regulations. 

We propose to add the phrase, ‘‘under 

§ 641.505’’ after the words ‘‘eligibility 

verification,’’ to refer to the section of 

this part that addresses when eligibility 

must be verified. We also propose to 

delete the word ‘‘annual,’’ because 

verification must be done at least once 

every twelve months but may also occur 

as circumstances require (see § 641.505). 

Finally, we clarify that the written 

notice of termination must be given to 

the participant within thirty days of the 

ineligibility determination. This is 

consistent with the content of what is 

§ 641.510 in the current regulations; 

paragraph (b) of this section is silent on 

the timing of the notice in the current 

regulations. 

The only change we propose to 

paragraph (c) is to add the words ‘‘for 

termination’’ after the word, 

‘‘reason(s),’’ for clarity. 

In paragraph (d), describing 

terminations for cause, the Department 

proposes to replace the phrase ‘‘the 

proposed reasons for such terminations’’

with ‘‘their policies concerning forcause terminations’’ when describing 

what grantees must include in their 

grant applications, for clarity. We also 

propose to replace the word, ‘‘discuss,’’

with ‘‘include,’’ concerning submitting 

information on for-cause termination 

policies in the grant application, for 

clarity. The Department proposes to 

remove from paragraph (d) the 

discussion about communicating 

termination policies to participants, and 

proposes to create a new paragraph (g) 

to address that topic; the remaining 

paragraphs are re-lettered accordingly. 

In paragraph (e), the Department 

proposes to add the requirement that 

grantees/sub-recipients must provide 

participants with written notice when 

they are terminated for repeated refusals 

to accept a job offer, so that the 

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termination is clearly communicated to 

the participant and in order to be 

consistent with the requirements for 

other terminations described in this 

section. We also propose to add that the 

termination must occur 30 days after the 

participant receives the written notice; 

this is consistent with other termination 

procedures in this section. 

Proposed paragraph (f) provides that 

when an unfavorable eligibility 

determination is made pursuant to 

paragraphs (b) and (c), the grantee/subrecipient should refer the terminated 

individual to other possible assistance 

sources such as the One-Stop Delivery 

System, and when a grantee/subrecipient terminates a participant under 

paragraphs (d) and (e), it may refer the 

individual to other potential sources of 

assistance. The Department proposes to 

remove the redundant phrase ‘‘it must 

give the individual a reason for 

termination’’ from this paragraph 

because that requirement is now stated 

in each paragraph on termination. Also, 

we propose to delete the phrase, ‘‘when 

feasible,’’ because the Department 

determined that qualification was not 

necessary. Finally in paragraph (e), we 

propose to delete the reference to 

paragraph (a) because we determined 

that grantees and sub-recipients have no 

obligation to offer further assistance to 

an individual that knowingly provided 

false eligibility information. 

In proposed paragraph (g) we rephrase 

the material that appears in paragraph 

(d) of this section in the current 

regulations, concerning communicating 

termination policies to participants. We 

propose to require grantees and subrecipients to furnish a written copy of 

their termination policies to participants 

at enrollment, and to verbally review 

those policies with participants. 

The Department proposes a technical 

correction to paragraph (h); we replace 

‘‘through (f)’’ with ‘‘through (e)’’ when 

describing the paragraphs on 

terminations. Proposed paragraph (i) 

remains unchanged from what appears 

as paragraph (h) in the current 

regulations. 

What Is the Employment Status of 

SCSEP Participants? (§ 641.585) 

In the current regulations, §§ 641.585 

and 641.590 address different aspects of 

the employment status of participants. 

The Department proposes to combine 

those two sections into a revised 

§ 641.585; we propose to change the 

heading of the section accordingly. 

In proposed paragraph (a), we state 

that SCSEP participants are not 

considered Federal employees solely 

due to their participation in the SCSEP; 

this statement is derived directly from 

section 504(a) of the 2006 OAA. The 

same notion is expressed in paragraph 

(a) of this section in the current 

regulations, although in different words 

(‘‘[n]o, participants are not Federal 

employees’’). 

Proposed paragraph (b) contains the 

substance of what is § 641.590 in the 

current regulations. In the current 

regulations, we state that ‘‘[g]rantees 

must determine if a participant is an 

employee of the grantee, local project, or 

host agency as the definition of 

‘employee’ varies depending on the 

laws defining an employer/employee 

relationship.’’ The first sentence of 

proposed paragraph (b) is a close 

parallel: ‘‘[g]rantees must determine 

whether or not a participant qualifies as 

an employee of the grantee, subrecipient, local project, or host agency, 

under applicable law.’’ We propose to 

add ‘‘sub-recipient’’ to include all the 

possible employer entities. We propose 

to use the phrase, ‘‘qualifies as,’’ rather 

than the word ‘‘is,’’ for clarity. The 

phrase, ‘‘under applicable law,’’ is 

proposed to clearly give grantees 

authority to consider whatever law is 

relevant to their determination. We 

propose to change ‘‘if’’ to ‘‘whether or 

not’’ because a grantee may determine 

that participants are not employees of 

any of the listed entities. 

In the current regulations, paragraph 

(b) of § 641.585 states that ‘‘if a Federal 

agency is a grantee or host agency, 

§ 641.590 applies.’’ The Department 

proposes to keep the substance of that 

statement but revise the wording. In the 

second sentence of proposed paragraph 

(b) we state that the responsibility for 

making the employment status 

determination rests with the grantee 

even if a Federal agency is a grantee or 

host agency. That is, although SCSEP 

participants are not considered Federal 

employees by virtue of their 

participation in the SCSEP, whether a 

particular participant is a Federal 

employee because that participant’s 

grantee or host agency is a Federal 

agency, is a matter to be determined by 

the grantee. 

Are Participants Employees of the 

Grantee, the Local Project, and/or the 

Host Agency? (§ 641.590 in the Current 

Regulations) 

The Department proposes to delete 

the section that appears as 641.590 in 

the current regulations, because the 

subject of that section—the employment 

status of participants—is now addressed 

in § 641.585. 

Subpart F—Pilot, Demonstration, and 

Evaluation Projects 

This subpart describes the 

opportunities for pilot, demonstration, 

and evaluation projects that are 

authorized under section 502(e) of the 

2006 OAA. The former subpart F 

described ‘‘502(e) projects’’ which 

placed individuals in private sector job 

opportunities; the OAA now authorizes 

different types of projects. The proposed 

regulatory provisions largely reiterate 

the language in the 2006 OAA; however, 

proposed § 641.620 provides that 

additional guidance on implementation 

of these new projects will be issued 

administratively. 

The Department interprets section 

502(e)(2)(C) of the 2006 OAA, reiterated 

in § 641.630(c) of these proposed 

regulations, to mean that older 

individuals who are not SCSEP-eligible 

may participate in pilot and 

demonstration projects, but such pilot 

and demonstration projects must be 

designed to address the employment 

and training needs of SCSEP-eligible 

individuals. For example, older 

individuals who are not eligible for 

SCSEP may face challenges common to 

many older workers—e.g., skills that 

need to be upgraded (such as 

technology-related skills), disabilities or 

other health-related issues, lack of 

flexible work arrangements, or 

perceived age discrimination. Projects 

that propose to serve older individuals 

who are not eligible for the SCSEP must 

demonstrate that successful outcomes in 

their projects can result in strategies, 

models, or other tools or resources that 

can be replicated for the benefit of 

SCSEP-eligible participants. The 

Department will continue to explore 

how best to exercise this additional 

flexibility regarding pilot, 

demonstration, or evaluation projects. 

Subpart G—Performance Accountability 

Subpart G was published in an IFR, 

72 FR 35832, June 29, 2007. 

Subpart H—Administrative 

Requirements 

Subpart H covers the administrative 

requirements that apply to all SCSEP 

grants. For the most part, the proposed 

regulations remain the same as the 

current regulations. However, the 2006 

OAA necessitates several changes to this 

subpart, and the addition of a new 

§ 641.874 setting forth conditions 

regarding a grantee’s request to use 

additional funds for training and 

supportive service costs. We welcome 

comments on this new section and on 

other proposed changes to subpart H 

that are discussed in this preamble or on 

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other changes to this subpart which 

flow from the 2006 Amendments. 

What Uniform Administrative 

Requirements Apply to the Use of 

SCSEP Funds? (§ 641.800) 

There is no change to this provision. 

What Is Program Income? (§ 641.803) 

This section is substantively 

unchanged. The only change we 

propose to make to this section is the 

addition of new parenthetical 

descriptions of other regulations being 

referenced, and the revision of the 

parenthetical descriptions that appear in 

the current regulations, for clarity. 

How Must SCSEP Program Income Be 

Used? (§ 641.806) 

The program income provisions of 

this section address the application of 

the Department’s uniform 

administrative requirements to SCSEP 

activities by indicating what types of 

income earned or generated by 

recipients and sub-recipients are 

considered program income, how the 

costs of producing program income are 

to be treated, and by directing recipients 

to follow the addition method described 

in 29 CFR 95.24 (non-profit and 

commercial organizations) and 29 CFR 

97.25 (State and local governments) and 

add program income to Federal and 

non-Federal resources provided for 

SCSEP activities. The Department 

proposes to add a clarifying phrase to 

paragraph (a) to reflect the fact that 

program income must be used during 

the grant period in which it was earned, 

to be consistent with uniform 

administrative requirements. We also 

propose to add to paragraph (a) 

parenthetical descriptions by the 

references to other regulations, for 

clarity. We propose to clarify in 

paragraph (c) that the recipient has no 

obligation to the Department for 

program income earned after the end of 

the grant period. Finally, we propose 

certain grammatical corrections to this 

section. 

What Non-Federal Share (Matching) 

Requirements Apply to the Use of 

SCSEP Funds? (§ 641.809) 

This section sets forth the various 

matching fund requirements that apply 

to recipients of SCSEP funds and 

clarifies previously ambiguous 

language. We propose to add the phrase, 

‘‘allowable costs paid for with’’ to 

paragraph (b) to clarify that, to be 

counted toward the ten percent nonFederal share, costs must be allowable. 

The regulatory provisions cited in 

paragraph (c) provide information 

concerning allowable costs. 

The current regulations indicate that 

a recipient may not require a subrecipient or host agency to provide nonFederal resources for the use of the 

SCSEP project as a condition of entering 

into a sub-recipient or host relationship. 

In paragraph (e), we propose to clarify 

that this does not preclude a subrecipient or host agency from 

voluntarily contributing non-Federal 

resources for the use of the SCSEP 

project. Paragraph (f) in the current 

regulations states that the Department 

may pay all the costs of private sector 

training projects established in section 

502(e); we delete this provision from the 

proposed rule because section 502(e) 

now relates to pilot, demonstration, and 

evaluation projects. 

What Is the Period of Availability of 

SCSEP Funds? (§ 641.812) 

This section details the period of 

availability of SCSEP funds and is 

substantively unchanged. In the current 

regulations, paragraph (b) states that 

SCSEP recipients must ensure that no 

sub-agreement provides for the 

expenditure of any SCSEP funds before 

July 1, or after the end of the grant 

period, except as provided in § 641.815. 

We propose to add a phrase to 

paragraph (b) to clarify that the July 1 

at issue here is July 1 of the grant year. 

May the Period of Availability Be 

Extended? (§ 641.815) 

There is no change to this provision. 

What Happens to Funds That Are 

Unexpended at the End of the Program 

Year? (§ 641.818 in the Current 

Regulations) 

The Department proposes to delete 

the section that appears as 641.818 in 

the current regulations, because it 

relates to an internal Department 

process and is therefore not relevant for 

the rule. 

What Audit Requirements Apply to the 

Use of SCSEP Funds? (§ 641.821) 

There is no change to this provision. 

What Lobbying Requirements Apply to 

the Use of SCSEP Funds? (§ 641.824) 

There is no change to this provision. 

What General Nondiscrimination 

Requirements Apply to the Use of 

SCSEP Funds? (§ 641.827) 

In the current regulations, paragraph 

(b) of this section states that recipients 

and sub-recipients of SCSEP funds must 

comply with the Department’s 

nondiscrimination requirements at 29 

CFR part 37, for SCSEP activities that 

are administered in conjunction with 

the One-Stop Delivery System. We 

propose to add a phrase to paragraph (a) 

to clarify that DOL regulations regarding 

the equal treatment of religious 

organizations at 29 CFR part 2 subpart 

D also apply. We also propose, in 

paragraph (b)(1)(ii), to abbreviate ‘‘the 

Workforce Investment Act’’ to ‘‘WIA.’’

What Policies Govern Political 

Patronage? (§ 641.833) 

There is no substantive change to this 

provision. We propose in paragraph (a) 

to abbreviate ‘‘the Workforce Investment 

Act’’ to ‘‘WIA.’’ We also propose to add 

the word, ‘‘part’’ before ‘‘37’’ to 

accurately reference the regulation. 

What Policies Govern Political 

Activities? (§ 641.836) 

The Department proposes to make 

only a few grammatical changes to this 

section. 

What Policies Govern Union Organizing 

Activities? (§ 641.839) 

There is no change to this provision. 

What Policies Govern Nepotism? 

(§ 641.841) 

We make no substantive changes to 

this section. In paragraph (a), we 

propose to replace the word ‘‘position,’’

with ‘‘assignment,’’ so that we use the 

term ‘‘community service employment 

assignment,’’ to be consistent with the 

language used in the rest of this part. In 

the second sentence of paragraph (a), we 

propose to move the phrase ‘‘this 

requirement from’’ to later in the 

sentence and change it to, ‘‘from this 

requirement,’’ for clarity. 

What Maintenance of Effort 

Requirements Apply to the Use of 

SCSEP Funds? (§ 641.844) 

This section outlines the maintenance 

of effort responsibilities of SCSEP 

recipients. Section 502(b)(1)(G) of the 

2006 OAA consolidates and amends the 

previous statutory sections on which 

this regulatory section is based. 

Accordingly, we propose to revise this 

section to follow the statutory changes. 

First, the Department proposes to 

replace the former paragraph (a) with a 

statement that a community service 

employment assignment is permissible 

only when the maintenance of effort 

requirements are met. Proposed 

paragraph (b) contains the specific 

maintenance of effort requirements. The 

first requirement is that the community 

service employment assignment must 

not reduce the number of job 

opportunities or vacancies that would 

otherwise be available to non-SCSEP 

persons. The 2006 OAA omits the prior 

statutory requirement, which is 

reflected in § 641.844(b)(1) of the 

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current regulations, that SCSEP projects 

must result in an increase in 

employment opportunities in addition 

to those that would otherwise be 

available. The next requirement is 

rephrased but is substantively the same 

as appears in the 2000 OAA and current 

regulations: a SCSEP project must not 

displace currently employed workers, 

including partial displacements. The 

third listed requirement is that a SCSEP 

project must not impair existing 

contracts or result in the substitution of 

Federal funds for other funds in 

connection with work that would 

otherwise be performed. The only 

proposed change in this requirement is 

that we drop the phrase, ‘‘for service’’

after the word ‘‘contracts’’ to be 

consistent with the language of the 

statute. The last requirement, 

concerning a SCSEP participant not 

performing the same or substantively 

the same work as a person on layoff, is 

substantively the same as what 

appeared in the 2000 OAA and is in the 

current regulations, but again is 

proposed to be slightly rephrased. Also, 

this requirement in the current 

regulations uses the term, ‘‘participant,’’

which we propose to change to the term, 

‘‘eligible individual,’’ to be consistent 

with the language of the statute. We also 

propose to make a few formatting 

corrections. 

What Uniform Allowable Cost 

Requirements Apply to the Use of 

SCSEP Funds? (§ 641.847) 

This section is substantively 

unchanged. The only change the 

Department proposes to make to this 

section is the addition of parenthetical 

descriptions for referenced regulatory 

sections, for clarity. 

Are There Other Specific Allowable and 

Unallowable Cost Requirements for the 

SCSEP? (§ 641.850) 

The only proposed change to this 

section is found in paragraph (d), which 

provides that one allowable SCSEP cost 

is a SCSEP project’s proportionate share 

of the costs of the local One-Stop 

Delivery System. The Department 

proposes to add a sentence to this 

paragraph to clarify that the cost of 

services provided, including such things 

as the wages and benefits of a SCSEP 

participant placed at a One-Stop Career 

Center, may constitute some or all of a 

SCSEP project’s cost-sharing 

contribution. 

How Are Costs Classified? (§ 641.853) 

This section discusses whether costs 

are classified as administrative costs or 

programmatic activity costs and is 

substantively unchanged. The 

Department proposes two minor 

changes to this section. First, we 

propose to replace the term ‘‘program 

costs,’’ with the term ‘‘programmatic 

activity costs’’ to track a corresponding 

change in section 502(c)(6) of the 2006 

OAA. Second, we propose to change the 

‘‘shall’’ in the second sentence of 

paragraph (b) to ‘‘must;’’ ‘‘must’’ is a 

more appropriate word to use when 

requiring an action in a regulation. 

What Functions and Activities 

Constitute Administrative Costs? 

(§ 641.856) 

This section discusses the functions 

and activities that constitute 

administrative costs. To be consistent 

with the language of the 2006 OAA and 

the rest of this regulation, we propose to 

change the phrase, ‘‘costs of 

administration,’’ to ‘‘administrative 

costs,’’ in the heading and throughout 

this section. Pursuant to section 

502(c)(4) of the 2006 OAA, we propose 

to add the following additional 

functions and activities as 

administrative costs: preparing 

administrative reports; other activities 

necessary for general administration of 

government funds and associated 

programs; and the costs of technical 

assistance, professional organization 

membership dues, and evaluating 

results obtained by the project involved 

against stated objectives. We also 

propose to delete the word, ‘‘overall,’’

from the phrase that appears in the 

current regulations, ‘‘overall general 

administrative and coordination 

functions,’’ to mirror the same change in 

section 502(c)(4)(A) of the 2006 OAA. 

Finally, the Department proposes to 

remove paragraph (c), the definition of 

‘‘first-tier sub-recipient,’’ because the 

term has been replaced with ‘‘program 

operator’’ and that definition can be 

found in § 641.140. We do not intend for 

these changes to have a substantive 

effect on cost allocation. 

What Other Special Rules Govern the 

Classification of Costs as Administrative 

Costs or Programmatic Activity Costs? 

(§ 641.859) 

To make it easier to operate SCSEP 

activities within the WIA One-Stop 

Delivery System, the OAA imports the 

WIA cost classification system into the 

SCSEP. Accordingly, the current 

regulations divide costs into 

administrative costs and program costs 

(termed programmatic activity costs in 

the SCSEP); the same categories are 

continued in the proposed rule. As in 

other sections of these regulations, the 

Department proposes to change the 

phrase, ‘‘program costs’’ to 

‘‘programmatic activity costs’’ to be 

consistent with the OAA (see, e.g., OAA 

sec. 502(c)(6)). We also propose to 

replace the phrase, ‘‘first-tier subrecipient,’’ with ‘‘program operator,’’ as 

discussed in the definitions section of 

this preamble (§ 641.140). 

We propose a few changes to 

paragraph (b). First, we propose to 

revise paragraph (b)(3) to state that the 

costs of sub-recipients and vendors 

performing administrative functions on 

behalf of recipients and program 

operators are classified as 

administrative costs. In the current 

regulations, only vendors are mentioned 

in paragraph (b)(3). We also propose to 

delete paragraph (b)(5) and combine its 

content into a revised paragraph (b)(4) 

that states that, except pursuant to 

paragraph (b)(3), costs incurred by all 

vendors, and only those sub-recipients 

below program operators, are classified 

as programmatic activity costs. In the 

current regulations, both (b)(4) and 

(b)(5) address activities that are 

classified as programmatic activity 

costs. We propose to make these 

changes to paragraph (b) for clarity, and 

to help ensure that entities that carry 

out the program functions of the SCSEP 

have access to administrative funds. 

The only other change we propose to 

make to this section is in paragraph (d). 

Paragraph (d) addresses overhead or 

indirect cost pools. We clarify in the 

proposed paragraph (d) that that the 

allocable share of indirect or overhead 

costs for administrative and 

programmatic costs are to be in the same 

proportions as the actual costs for those 

activities which are included in the 

overhead or indirect cost pool. Because 

of reports that the language that appears 

in paragraph (d) in the current 

regulations is confusing, we have 

rewritten the text in an attempt at 

greater clarity; we do not intend to 

change the substance of the policy, 

merely our explication of it. 

Must SCSEP Recipients Provide 

Funding for the Administrative Costs of 

Sub-Recipients? (§ 641.861) 

There is no change to this section. 

Section 502(b)(1)(R) of the 2006 OAA 

requires the Department to consult with 

grantees concerning what amount of 

administrative cost allocation is 

sufficient among recipients and subrecipients. The Department has 

determined that it will determine the 

appropriate allocation on a grantee-bygrantee basis and that the process of 

grant application, review, and 

acceptance will be used to carry out the 

required consultation with each grantee. 

Grantees must include in their grant 

application their plans for allocating 

administrative monies; that is, grantees 

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must explain how much administrative 

money they intend to keep and how 

much they will be delegating. The 

Department is able to evaluate and 

respond to that information when it 

reviews the grant application. If the 

Department concludes, for example, that 

a grantee is not allocating sufficient 

administrative funds for sub-recipients, 

it could remand the application for 

further consideration by the applicant. 

The grantee could then respond with a 

revised allocation plan. The act of 

approving the grant application 

constitutes the conclusion of the 

consultation process. 

What Functions and Activities 

Constitute Programmatic Activity Costs? 

(§ 641.864) 

The Department defines 

programmatic activity costs pursuant to 

the new definition in section 

502(c)(6)(A) of the OAA as amended in 

2006. Programmatic activity costs now 

include the costs of (1) wages and 

benefits; (2) outreach, recruitment and 

selection, intake, orientation, and 

assessment functions; (3) participant 

training; (4) job placement assistance; 

and (5) participant supportive services. 

We propose to revise paragraph (a) to 

track the wages and benefits costs 

authorized by statute. These are wages 

paid to participants, such benefits as are 

required by law (such as workers’

compensation or unemployment 

compensation), the costs of physical 

examinations, compensation for 

scheduled work hours during which an 

employer’s business is closed for a 

Federal holiday, and necessary sick 

leave that is not part of an accumulated 

sick leave program. As described in the 

preamble discussion of § 641.565(b), we 

interpret the latter provision to prohibit 

any storing of sick leave. 

No amounts provided under the grant 

may be used to pay the cost of pension 

benefits, annual leave, accumulated sick 

leave, or bonuses, as described in 

§ 641.565. Unlike the current 

regulations which permit some of these 

benefits, the Department is bound by the 

statute to prohibit the use of SCSEP 

funds for these purposes. 

We propose a few changes to 

paragraph (c). First, we propose to add 

a reference to § 641.540, which 

addresses participant training. Also, we 

propose to specify that participant 

training may be provided prior to 

beginning or concurrent with a 

community service employment 

assignment. We propose to replace the 

phrase ‘‘on the job’’ with ‘‘at a host 

agency,’’ for increased clarity. The 

Department interprets the phrase 

‘‘participant training’’ to mean only 

those costs that are directly related to 

participant training, and not activities 

such as general staff development that 

relate to participant training only 

indirectly or tangentially. 

Finally, the Department proposes one 

change to paragraph (e). We propose to 

insert the phrase, ‘‘to enable an 

individual to successfully participate in 

a SCSEP project,’’ to mirror the language 

of section 502(c)(6)(A)(iv) of the 2006 

OAA concerning what supportive 

services are allowable. 

What Are the Limitations on the 

Amount of SCSEP Administrative 

Costs? (§ 641.867) 

There is no change to this provision. 

Under What Circumstances May the 

Administrative Cost Limitation Be 

Increased? (§ 641.870) 

This section continues the 

Department’s previous practice, as is 

described in the current regulations, of 

allowing increases in administrative 

cost limits as permitted under section 

502(c)(3) of the OAA, if the recipient 

demonstrates that such an increase is 

necessary to carry out the project and 

that major administrative cost increases 

are being incurred in necessary program 

components. We propose to clarify in 

the proposed rule that payments for 

workers’ compensation refers only to 

payments for staff; this is because 

workers’ compensation payments made 

on behalf of participants are classified 

as programmatic activity costs. 

Paragraph (a)(2)(iii) concerns projects 

that are so small that the amount of 

administrative expenses incurred to 

carry out the project necessarily exceeds 

13.5 percent. We propose to make 

changes to the wording of this 

paragraph in accordance with 

corresponding changes in the language 

of the statute, but do not consider any 

of the changes substantive. Whereas the 

2000 OAA referred to administrative 

‘‘expenses,’’ the 2006 OAA now uses the 

term ‘‘costs.’’ Also, the 2000 OAA used 

the phrase, ‘‘13.5 percent of the amount 

for such project,’’ and the 2006 OAA 

instead says, ‘‘13.5 percent of the grant 

amount.’’

What Minimum Expenditure Levels Are 

Required for Participant Wages and 

Benefits? (§ 641.873) 

As amended in 2006, section 

502(c)(6)(B) of the OAA provides that 

grantees generally must use not less 

than 75 percent of the grant funds to pay 

participant wages and benefits. In 

paragraph (a) the Department proposes 

to add a reference to § 641.864(a), which 

addresses wage and benefit 

programmatic activity costs. We propose 

to specify in paragraph (b) that 

recipients must spend at least 75 

percent of their total award amount on 

such costs, not 75 percent of their total 

expenditures, as is stated in the current 

regulations. In paragraph (c) we note 

that a SCSEP grantee may request 

approval to use additional funds for 

programmatic activity costs, pursuant to 

a new § 641.874. Finally, we propose to 

remove an obsolete reference to awards 

made under the former section 502(e) of 

the OAA. 

What Conditions Apply to a SCSEP 

Grantee Request To Use Additional 

Funds for Training and Supportive 

Service Costs? (§ 641.874) 

In this proposed section we 

implement a new provision at section 

502(c)(6)(C) of the 2006 OAA, which 

allows a SCSEP grantee to submit to the 

Department a request for approval to use 

up to 10 percent of grant funds that 

would otherwise be devoted to wages 

and benefits under § 641.873 to provide 

participant training and supportive 

services. This new percentage (up to 

ten) is in addition to the 25 percent of 

funds that are otherwise available for 

administrative costs to support 

participant training, job placement 

assistance, participant supportive 

services, outreach, recruitment, 

selection, intake, orientation, and 

assessments; and thus reduces the 

minimum level for wages and benefits 

to 65 percent. 

Proposed paragraph (a) tracks section 

502(c)(6)(C)(i) of the 2006 OAA. 

Proposed paragraph (a)(3) addresses 

acceptable uses of the additional 

programmatic activity monies. 

Participant training is one acceptable 

use of the money; supportive services is 

the other. The Department interprets the 

phrase ‘‘participant training’’ to mean 

only those costs that are directly related 

to participant training, and not activities 

such as general staff development that 

relate to participant training only 

indirectly or tangentially. Also, as we 

noted in the preamble to § 641.545, the 

language used in the 2006 OAA to 

describe appropriate supportive services 

has changed to, ‘‘supportive services 

that are necessary to enable an 

individual’’ to successfully participate 

in a SCSEP project. This language is 

somewhat more prescriptive than the 

language in the 2000 OAA, which stated 

that the SCSEP could provide 

supportive services ‘‘to assist an 

enrollee to successfully participate in a 

[SCSEP] project.’’

In proposed paragraph (b) we detail 

the requirements for submission of a 

request to use additional funds for 

training and supportive service costs; 

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these requirements track those set out in 

the statute (OAA sec. 502(c)(6)(C)(ii)). 

Section 502(c)(6)(C)(iii) of the 2006 

OAA requires that grantees submit a 

request to use additional funds for 

training and supportive service costs not 

later than 90 days before the proposed 

date of implementation, and that the 

Department must act on the request no 

later than 30 days before the proposed 

date of implementation. The 

Department interprets these 

requirements as applying to requests to 

modify an existing grant agreement. We 

do not consider these timing 

requirements to apply to requests to use 

additional funds for training and 

supportive service costs that are 

contained in grant applications. Indeed, 

the practical reality of the SCSEP grant 

cycle is that grant application 

instructions are generally not issued 

early enough for grant applicants to be 

able to submit their applications 90 days 

before the beginning of the Program 

Year (July 1), and may not be acted on 

30 days prior to the start of the Program 

Year. Were the Department to strictly 

enforce the 90 and 30 day deadlines, it 

would mean that grantees would be 

unable to implement the requested use 

of additional funds for programmatic 

activity costs until several weeks into 

the Program Year. Such a delay in 

implementation would harm 

participants by complicating the 

administrative management of the grant, 

by reducing the amount of funds 

available for training and supportive 

service costs, and by reducing the 

flexibility of grantees to use the funds as 

Congress intended. 

Accordingly, if a grantee wishes to 

change its grant agreement to be able to 

use the additional moneys for training 

and supportive services, it must submit 

the request not later than 90 days before, 

and the Department will act on the 

request not later than 30 days before, the 

proposed date of implementation. If a 

request to use additional funds for 

training and supportive service costs is 

part of the grant application, the request 

will be reviewed and approved as a part 

of the normal grant approval process 

and will be implemented at the start of 

the Program Year. 

Finally, we propose to state in 

paragraph (d) that grantees may apply 

this provision to individual subrecipients but need not provide this 

opportunity to all their sub-recipients. 

When Will Compliance With Cost 

Limitations and Minimum Expenditure 

Levels Be Determined? (§ 641.876) 

There is no change to this provision. 

What Are the Financial and 

Performance Reporting Requirements 

for Recipients? (§ 641.879) 

This section covers the reporting 

requirements that are authorized by the 

2006 OAA. We propose to remove a 

reference to reporting requirements for 

section 502(e) private sector 

employment projects, because reporting 

for all SCSEP recipients is now included 

in paragraph (a). In addition, proposed 

paragraph (a) now addresses financial 

reporting and proposed paragraph (b) 

addresses performance reporting, which 

conforms to the ordering in the heading 

question for this section. In the current 

regulations, paragraph (a) addresses 

performance reporting and paragraph (b) 

addresses financial reporting. 

The Department proposes to add to 

paragraphs (a) and (b) parenthetical 

descriptions of the referenced regulatory 

sections. We propose to change the form 

number referenced in paragraph (a) 

because SCSEP grantees no longer use 

reporting form SF 269 for financial 

reporting; ETA Form 9130 is now the 

proper financial reporting form. And, 

whereas the former reporting 

instructions provided that financial 

reports were due in 30 days, the 

reporting instructions for the new ETA 

Form 9130 provides grantees with 45 

days within which to submit each 

quarterly report, including the report for 

the last quarter. Under the ETA 

electronic reporting system, grantees are 

to mark their financial report for the last 

quarter of the grant as final which opens 

the link for a closeout final report which 

is due 90 days after the end of the grant 

period of performance; we propose to 

add the word ‘‘closeout’’ in the second 

sentence of paragraph (a) for clarity. 

We propose to revise paragraph (b) to 

describe the current performance 

reporting procedure. Although the 

current regulations indicate that 

recipients must submit quarterly 

progress reports, those reports are 

actually generated by the Department 

using participant data that recipients 

submit electronically. Similarly, 

whereas the current regulations stress 

timely submission of reports, the 

proposed language emphasizes the 

timely submission of electronic 

participant data. We propose to delete 

the sentence that indicates that if a grant 

period ends on a date other than the last 

day of the Program Year, the final report 

is due within 90 days after the ending 

date of the grant. The Department 

collects data by Program Year, 

regardless of the grant period. Proposed 

paragraph (c) remains unchanged. 

The Department notes that section 

502(c)(6)(D) of the 2006 OAA requires 

each SCSEP grantee to annually prepare 

and submit to the Department a report 

documenting the grantee’s use of funds 

for programmatic activities described in 

§ 641.864. Because the financial and 

participant data already reported by 

grantees necessarily includes 

information on how the grantee uses its 

funds, including any funds for 

programmatic activities described in 

§ 641.864, the Department interprets 

this new requirement as being fulfilled 

by the reports required in paragraphs (a) 

and (b) of this section. 

Proposed paragraph (d) addresses 

reporting on the performance measures. 

We propose to revise the text of this 

paragraph slightly from what appears as 

paragraph (e) in the current regulations. 

Instead of requiring data and reports on, 

‘‘the program performance measures 

and the common performance 

measures,’’ the proposed text requires 

data and reports on ‘‘the performance 

measures,’’ for simplicity and clarity. 

We also propose to change the reference 

to the specific sections of these 

regulations requiring performance 

measures, to a reference to subpart F 

generally, as all of subpart F addresses 

performance measures. 

Proposed paragraph (e) of this section 

states that grantees may be required to 

collect and submit data on the 

demographic characteristics of 

participants. The only proposed change 

to this provision, which appears as 

paragraph (f) in the current regulations, 

is to change from the singular, ‘‘this 

report,’’ to the plural, ‘‘these reports,’’ in 

the second sentence, to be consistent 

with the plural ‘‘reports’’ in the first 

sentence. Starting in 2007, in addition 

to prior uses, the Department will also 

be using this data to prepare a report for 

Congress on the levels of participation 

and performance outcomes of minority 

individuals served by SCSEP, as 

required by section 515 of the 2006 

OAA. The Department will not be 

requiring a new report from grantees. 

However, the Department may request 

additional information as part of the 

grant application process in order to 

complete its report to Congress. 

We also propose to make grammatical 

and technical corrections. 

What Are the SCSEP Recipient’s 

Responsibilities Relating to Awards to 

Sub-Recipients? (§ 641.881) 

This section specifies that the 

recipient is responsible for all SCSEP 

activities performed with SCSEP funds 

and for ensuring that sub-recipients 

comply with SCSEP requirements. We 

propose to change paragraphs (a) and (b) 

to (b) and (c). We propose to add a new 

paragraph (a) to state that recipients are 

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responsible for ensuring all sub-awards 

are made on the basis of full and open 

competition to the maximum extent 

practicable in accordance with 

procurement requirements in 29 CFR 

95.43 (non-profit and commercial 

organizations) and 29 CFR 97.36 (State 

and local governments). These are 

uniform administrative requirements, 

applicable to all Department grants. 

The parenthetical at the end of 

paragraph (b) refers to the statutory 

section on responsibility tests; we 

propose to add a reference to the section 

of these regulations addressing the 

responsibility tests, for clarity. Proposed 

paragraph (c), which appears as 

paragraph (b) in the current regulations, 

remains unchanged. We propose to add 

a new paragraph (d) to conform to the 

requirements of section 514(e) of the 

2006 OAA relating to the special 

consideration that national grantees 

serving a service area where a 

substantial population of individuals 

with barriers to employment exists must 

afford in selecting sub-recipients. 

Section 514(e)(1) of the 2006 OAA 

provides that for purposes of this 

section ‘‘individuals with barriers to 

employment’’ means minority 

individuals, Indian individuals, 

individuals with greatest economic 

need, and individuals who are most-inneed. The term most-in-need is defined 

in the portion of § 641.140 that was 

included in the IFR published at 72 FR 

35832, Jun. 29, 2007. 

What Are the Grant Closeout 

Procedures? (§ 641.884) 

The Department proposes to add 

parenthetical descriptions for the 

regulatory references provided. 

Otherwise there is no change to this 

section. 

Subpart I—Grievance Procedures and 

Appeals Process 

Subpart I describes the grievance 

procedures required of grantees, and the 

Department’s appeal process for grant 

applicants and grantees. With two 

exceptions these provisions are 

substantively identical to the provisions 

in the current regulations. 

What Appeal Process Is Available to an 

Applicant That Does Not Receive a 

Grant? (§ 641.900) 

This section describes the appeal 

process that is available to an applicant 

that does not receive a grant. We 

propose to revise the text of this section 

to more accurately reflect the current 

process actually used by the Department 

for applications that are not funded. An 

applicant may request feedback from the 

Department concerning a decision not to 

award a grant to the applicant, but 

debriefings are no longer provided. 

Under the current process, non-selected 

entities that request an explanation are 

provided with feedback on the 

shortcomings of their proposal. An 

applicant that wishes to appeal must file 

their appeal within 21 days of either the 

notification that financial assistance 

would not be awarded or the Grant 

Officer’s feedback on the proposal. 

Under the current regulations, an 

applicant is required to request that the 

Grant Officer provide the reasons for not 

awarding financial assistance in order to 

preserve the right to appeal. Under this 

proposed section, an applicant may file 

an appeal within 21 days of the 

notification that an award was not 

given; requesting an explanation from 

the Grant Officer is not a necessary step 

to preserving the right to appeal. 

The Department also proposed to 

modify two timeframes. Under the 

current regulations, the Grant Officer 

has 20 days within which to provide a 

debriefing and a written decision 

explaining the reasons for the decision. 

In the proposed section, the Grant 

Officer has 21 days to provide feedback 

concerning the proposal. Under the 

current regulations, a party dissatisfied 

with the decision of the Administrative 

Law Judge has 20 days within which to 

file a petition for review. We propose to 

change that timeframe to 21 days. We 

propose these timeframe changes to be 

consistent with the 21-day timeframe 

used in other circumstances in this 

section. We also propose to make 

technical corrections. 

What Grievance Procedures Must 

Grantees Make Available to Applicants, 

Employees, and Participants? 

(§ 641.910) 

Paragraph (c) of this section formerly 

required that any allegation of a Federal 

law violation be filed with the Chief of 

the Division of Older Worker Programs. 

Due to a reorganization within ETA, 

such an allegation will now be filed 

with the Chief of the Division of Adult 

Services. We also propose to make 

technical corrections to this section. 

What Actions of the Department May a 

Grantee Appeal and What Procedures 

Apply to Those Appeals? (§ 941.920) 

We propose to delete the sentence, 

‘‘[t]he Chief Administrative Law Judge 

will designate an Administrative Law 

Judge to hear the appeal,’’ from 

paragraph (d)(1) as it is unessential to 

these regulations. The only other 

changes we propose in this section are 

technical corrections. 

Is There an Alternative Dispute 

Resolution Process That May Be Used in 

Place of an OALJ Hearing? (§ 641.930) 

The only changes we propose in this 

section are technical ones. 

III. Administrative Information 

Regulatory Flexibility Analysis, 

Executive Order 13272, Small Business 

Regulatory Enforcement Fairness Act 

The Regulatory Flexibility Act (RFA), 

5 U.S.C. chapter 6, requires the 

Department to evaluate the economic 

impact of this proposed rule with regard 

to small entities. The RFA defines small 

entities to include small businesses, 

small organizations, including not-forprofit organizations, and small 

governmental jurisdictions. The 

Department must determine whether the 

rule imposes a significant economic 

impact on a substantial number of such 

small entities. 

First, the Department has determined 

that this NPRM does not affect a 

substantial number of small entities. 

There are about 900 SCSEP grantees, 

sub-recipients, and sub-sub-recipients. 

Of these, 50 are States and are not small 

entities as defined by the RFA. The vast 

majority of the rest are non-profit 

organizations that would be categorized 

as small entities for RFA purposes. 

However, even if all of the rest (850) are 

small non-profit organizations, that is 

simply not a substantial number. Eight 

hundred and fifty is less than one 

percent of the total number of nonprofits in the country, which has been 

estimated to be over 1 million. 

Accordingly, we conclude that this 

proposes rule does not affect a 

substantial number of small entities. 

The Department has also determined 

that the economic impact of this 

proposed rule is not significant because 

these regulations will not result in any 

additional costs to grantees. The SCSEP 

is designed such that SCSEP funds 

cover the vast majority of the costs of 

implementing this program. Subpart H 

of this proposed rule provides detailed 

information to grantees on what costs 

are proper program expenditures, how 

to properly categorize those costs, etc. 

The SCSEP statute does require a ten 

percent non-Federal match (see 

§ 641.809); however, the ten percent 

match requirement has been in effect in 

previous SCSEP regulations and 

therefore does not constitute a new 

economic burden on grantees. (We note 

that the Department allows in-kind 

contributions in lieu of monetary 

payments, which significantly 

moderates the economic impact of the 

match requirement.) Accordingly, the 

Department certifies that this proposed 

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rule will not have a significant 

economic impact on a substantial 

number of small entities. The 

Department welcomes comments on this 

RFA certification. 

We note that this analysis is also 

applicable under Executive Order 

13272; for those purposes as well we 

certify that this proposed rule does not 

impose a significant economic impact 

on a substantial number of small 

entities. 

The Department has also determined 

that this rule is not a ‘‘major rule’’ for 

purposes of the Small Business 

Regulatory Enforcement Fairness Act 

(SBREFA), 5 U.S.C. chapter 8. SBREFA 

requires agencies to take certain actions 

when a ‘‘major rule’’ is promulgated. 

SBREFA defines a ‘‘major rule’’ as one 

that will have an annual effect on the 

economy of $100,000,000 or more; that 

will result in a major increase in costs 

or prices for, among other things, State 

or local government agencies; or that 

will significantly and adversely effect 

the business climate. 

This proposed rule will not 

significantly or adversely effect the 

business climate. First, the proposed 

rule will not create a significant impact 

on the business climate at all because, 

as discussed above, SCSEP grantees are 

governmental jurisdictions and not-forprofit enterprises. Moreover, any 

secondary impact of the program on the 

business community would not be 

adverse. To the contrary, the SCSEP 

functions to assist the business 

community by training older Americans 

to participate in the workforce. 

The proposed rule will also not result 

in a major increase in costs or prices for 

States or local government agencies. The 

SCSEP has no impact on prices, and, as 

discussed above, the only costs that 

could potentially be borne by 

governmental jurisdictions are limited 

to the ten percent matching share. 

Finally, this proposed rule will not have 

an annual effect on the economy of 

$100,000,000 or more. 

Therefore, because none of the 

definitions of ‘‘major rule’’ apply in this 

instance, we determine that this 

proposed rule is not a ‘‘major rule’’ for 

SBREFA purposes. 

Executive Order 12866 

Executive Order 12866 requires that 

for each ‘‘significant regulatory action’’

proposed by the Department, the 

Department conduct an assessment of 

the proposed regulatory action and 

provide OMB with the proposed 

regulation and the requisite assessment 

prior to publishing the regulation. A 

significant regulatory action is defined 

to include an action that will have an 

annual effect on the economy of $100 

million or more, as well as an action 

that raises a novel legal or policy issue. 

As discussed with regard to the 

SBREFA analysis, this proposed rule 

will not have an annual effect on the 

economy of $100 million or more. 

However, the rule does raise novel 

policy issues concerning implementing 

the 2006 OAA in the SCSEP. The key 

policy changes that are being 

implemented include the introduction 

of a 48-month limit on participation, 

institution of a regular competition for 

national grants, and an increase in the 

proportion of grant funds that can be 

used for participant training and 

supportive services. Therefore, the 

Department has submitted this proposed 

rule to the OMB. 

Paperwork Reduction Act 

The purposes of the Paperwork 

Reduction Act of 1995 (PRA), 44 U.S.C. 

3501 et seq., include minimizing the 

paperwork burden on affected entities. 

The PRA requires certain actions before 

an agency can adopt or revise the 

collection of information, including 

publishing a summary of the collection 

of information and a brief description of 

the need for and proposed use of the 

information. 

Because the 2006 OAA necessitated 

changes in many of the SCSEP forms 

used by grantees until now, in July 2007 

the Department submitted to OMB for 

review and approval in accordance with 

section 3507(d) of the PRA a 

modification to the SCSEP information 

collection requirements. The four-year 

strategy newly required by the 2006 

OAA (see § 641.302) was accounted for 

in that PRA submission. The SCSEP 

PRA submission was assigned OMB 

control number 1205–0040 and was 

approved by OMB in October 2007. The 

approval expires October 31, 2010. The 

following proposed rule neither 

introduces new nor revises any existing 

information collection requirements. 

Unfunded Mandates Reform Act 

For purposes of the Unfunded 

Mandates Reform Act of 1995, this 

NPRM does not include any Federal 

mandate that may result in increased 

expenditure by State, local, and tribal 

governments in the aggregate of more 

than $100 million, or increased 

expenditures by the private sector of 

more than $100 million. 

Executive Order 13132 

The Department has reviewed this 

NPRM in accordance with Executive 

Order 13132 regarding federalism and 

has determined that it does not have 

‘‘federalism implications.’’ The rule 

does not ‘‘have substantial direct effects 

on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ While 

States are SCSEP grantees, the 

requirements in this NPRM flow 

directly from the 2006 OAA and thus do 

not constitute a ‘‘substantial direct 

effect’’ on the States, nor will it alter the 

relationship, power, or responsibilities 

between the Federal and State 

governments. 

Executive Order 13045 

Executive Order 13045 concerns the 

protection of children from 

environmental health risks and safety 

risks. This NPRM addresses the SCSEP, 

a program for older Americans, and has 

no impact on safety or health risks to 

children. 

Executive Order 13175 

Executive Order 13175 addresses the 

unique relationship between the Federal 

Government and Indian tribal 

governments. The order requires Federal 

agencies to take certain actions when 

regulations have ‘‘tribal implications.’’

Required actions include consulting 

with tribal governments prior to 

promulgating a regulation with tribal 

implications and preparing a tribal 

impact statement. The order defines 

regulations as having ‘‘tribal 

implications’’ when they have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes, or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

The Department has reviewed this 

NPRM and concludes that it does not 

have tribal implications. While tribes 

are sub-recipients of national SCSEP 

grantees, this proposed rule will not 

have a substantial direct effect on those 

tribes, because, as outlined in the 

Regulatory Flexibility section of the 

preamble, there are no new costs 

associated with implementing this 

proposed rule. This regulation does not 

affect the relationship between the 

Federal Government and the tribes, nor 

does it affect the distribution of power 

and responsibilities between the Federal 

Government and tribal governments. 

Accordingly, we conclude that this 

rule does not have tribal implications 

for the purposes of Executive Order 

13175. 

Environmental Impact Assessment 

The Department has reviewed this 

NPRM in accordance with the 

requirements of the National 

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Environmental Policy Act (NEPA) of 

1969 (42 U.S.C. 4321 et seq.), the 

regulations of the Council on 

Environmental Quality (40 CFR part 

1500), and the Department’s NEPA 

procedures (29 CFR part 11). The NPRM 

will not have a significant impact on the 

quality of the human environment, and, 

thus, the Department has not prepared 

an environmental assessment or an 

environmental impact statement. 

Assessment of Federal Regulations and 

Policies on Families 

Section 654 of the Treasury and 

General Government Appropriations 

Act, enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681), 

requires the Department to assess the 

impact of this rule on family well-being. 

A rule that is determined to have a 

negative affect on families must be 

supported with an adequate rationale. 

The Department has assessed this 

NPRM and determines that it will not 

have a negative effect on families. 

Indeed, we believe the SCSEP 

strengthens families by providing job 

training and support services to lowincome older Americans. 

Executive Order 12630 

This NPRM is not subject to Executive 

Order 12630, Governmental Actions and 

Interference with Constitutionally 

Protected Property Rights, because it 

does not involve implementation of a 

policy with takings implications. 

Executive Order 12988 

This regulation has been drafted and 

reviewed in accordance with Executive 

Order 12988, Civil Justice Reform, and 

will not unduly burden the Federal 

court system. The regulation has been 

written so as to minimize litigation and 

provide a clear legal standard for 

affected conduct, and has been reviewed 

carefully to eliminate drafting errors and 

ambiguities. 

Executive Order 13211 

This NPRM is not subject to Executive 

Order 13211, because it will not have a 

significant adverse effect on the supply, 

distribution, or use of energy. 

Plain Language 

The Department drafted this rule in 

plain language. 

List of Subjects in 20 CFR Part 641 

Aged, Employment, Government 

contracts, Grant programs—Labor, 

Reporting and recordkeeping 

requirements. 

For the reasons discussed in the 

preamble, the Department of Labor 

proposes to amend 20 CFR part 641 to 

read as follows: 

PART 641—PROVISIONS GOVERNING 

THE SENIOR COMMUNITY SERVICE 

EMPLOYMENT PROGRAM 

1. The authority citation for part 641 

continues to read as follows: 

Authority: 42 U.S.C. 3056 et seq. 

Subpart A—[Amended] 

2. Revise § 641.100 to read as follows: 

§ 641.100 What does this part cover? 

Part 641 contains the Department of 

Labor’s regulations for the Senior 

Community Service Employment 

Program (SCSEP), authorized under the 

title V of the Older Americans Act 

(OAA), 42 U.S.C. 3056 et seq., as 

amended by the Older Americans Act 

Amendments of 2006, Public Law 109–

365. This part, and other pertinent 

regulations expressly incorporated by 

reference, set forth the regulations 

applicable to the SCSEP. 

(a) Subpart A of this part contains 

introductory provisions and definitions 

that apply to this part. 

(b) Subpart B of this part describes the 

required relationship between the OAA 

and the Workforce Investment Act of 

1998 (WIA), 29 U.S.C. 2801 et seq. 

These provisions discuss the 

coordinated efforts to provide services 

through the integration of the SCSEP 

within the One-Stop Delivery System. 

(c) Subpart C of this part sets forth the 

requirements for the State Plan, such as 

the four-year strategy, required 

coordination efforts, public comments, 

and equitable distribution. 

(d) Subpart D of this part establishes 

grant planning and application 

requirements, including grantee 

eligibility, and responsibility review 

provisions that apply to the 

Department’s award of SCSEP funds for 

State and National grants. 

(e) Subpart E of this part details 

SCSEP participant services. 

(f) Subpart F of this part provides the 

rules for pilot, demonstration, and 

evaluation projects. 

(g) Subpart G of this part outlines the 

performance accountability 

requirements. This subpart establishes 

requirements for performance measures, 

defines such measures, and establishes 

corrective actions for failure to meet 

core performance measures. 

(h) Subpart H of this part sets forth 

the administrative requirements for 

SCSEP funds. 

(i) Subpart I of this part describes the 

grievance and appeals processes and 

requirements. 

3. Revise § 641.110 to read as follows: 

§ 641.110 What is the SCSEP? 

The Senior Community Service 

Employment Program (SCSEP) is a 

program administered by the 

Department of Labor that serves 

unemployed low-income persons who 

are 55 years of age and older and who 

have poor employment prospects by 

training them in part-time community 

service employment assignments and by 

assisting them in developing skills and 

experience to facilitate their transition 

to unsubsidized employment. 

4. Revise § 641.120 to read as follows: 

§ 641.120 What are the purposes of the 

SCSEP? 

The purposes of the SCSEP are to 

foster individual economic selfsufficiency and promote useful parttime opportunities in community 

service employment assignments for 

unemployed low-income persons who 

are 55 years of age or older, particularly 

persons who have poor employment 

prospects, and to increase the number of 

older persons who may enjoy the 

benefits of unsubsidized employment in 

both the public and private sectors. 

(OAA sec. 502(a)(1)). 

5. Revise § 641.130 to read as follows: 

§ 641.130 What is the scope of this part? 

The regulations in this part address 

the requirements that apply to the 

SCSEP. More detailed policies and 

procedures are contained in 

administrative guidelines issued by the 

Department. Throughout this part, 

phrases such as, ‘‘according to 

instructions (procedures) issued by the 

Department’’ or ‘‘additional guidance 

will be provided through administrative 

issuance’’ refer to the documents issued 

under the Secretary’s authority to 

administer the SCSEP, such as Training 

and Employment Guidance Letters 

(TEGLs), Training and Employment 

Notices (TENs), previously issued 

SCSEP Older Worker Bulletins that are 

still in effect, technical assistance 

guides, and other SCSEP guidance. 

6. Amend § 641.140 by: 

a. Removing the definitions ‘‘Coenrollment,’’ ‘‘Placement into public or 

private unsubsidized employment,’’

‘‘Retention in public or private 

unsubsidized employment,’’ ‘‘State 

Workforce Agency,’’ and ‘‘Subgrantee.’’

b. Revising the definitions 

‘‘Authorized position level,’’

‘‘Community service,’’ ‘‘Equitable 

distribution report,’’ ‘‘Grantee,’’

‘‘Greatest economic need,’’ ‘‘Greatest 

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social need,’’ ‘‘Host agency,’’ ‘‘Indian,’’

‘‘Indian tribe,’’ ‘‘Individual employment 

plan or IEP,’’ ‘‘Jobs for Veterans Act,’’

‘‘OAA,’’ ‘‘Other participant (enrollee) 

costs,’’ ‘‘Participant,’’ ‘‘Poor 

employment prospects,’’ ‘‘Program 

year,’’ ‘‘Project,’’ ‘‘Recipient,’’ ‘‘Service 

area,’’ ‘‘State grantee,’’ ‘‘State Plan,’’

‘‘Sub-recipient,’’ ‘‘Title V of the OAA,’’

‘‘Tribal organization,’’ and ‘‘Workforce 

Investment Act or WIA,’’ to read as set 

forth below. 

c. Adding in alphabetical order the 

definitions ‘‘Pacific Island and Asian 

Americans,’’ ‘‘Program operator,’’

‘‘Secretary,’’ ‘‘Supportive services,’’ and 

‘‘Unemployed,’’ as set forth below. 

§ 641.140 What definitions apply to this 

part? 

* * * * * 

Authorized position level means the 

number of SCSEP enrollment 

opportunities that can be supported for 

a 12-month period based on the average 

national unit cost. The authorized 

position level is derived by dividing the 

total amount of funds appropriated for 

a Program Year by the national average 

unit cost per participant for that 

Program Year as determined by the 

Department. The national average unit 

cost includes all costs of administration, 

other participant costs, and participant 

wage and benefit costs as defined in 

section 506(g) of the OAA. 

Community service means: 

(a) Social, health, welfare, and 

educational services (including literacy 

tutoring), legal and other counseling 

services and assistance, including tax 

counseling and assistance and financial 

counseling, and library, recreational, 

and other similar services; 

(b) Conservation, maintenance, or 

restoration of natural resources; 

(c) Community betterment or 

beautification; 

(d) Antipollution and environmental 

quality efforts; 

(e) Weatherization activities; 

(f) Economic development; and 

(g) Other such services essential and 

necessary to the community as the 

Secretary determines by rule to be 

appropriate. (OAA sec. 518(a)(1)). 

* * * * * 

Equitable distribution report means a 

report based on the latest available 

Census data which lists the optimum 

number of participant positions in each 

designated area in the State, and the 

number of authorized participant 

positions each grantee serves in that 

area, taking the needs of underserved 

jurisdictions into account. This report 

provides a basis for improving the 

distribution of SCSEP positions. 

* * * * * 

Grantee means an entity receiving 

financial assistance directly from the 

Department to carry out SCSEP 

activities. The grantee is the legal entity 

that receives the award and is legally 

responsible for carrying out the SCSEP, 

even if only a particular component of 

the entity is designated in the grant 

award document. Grantees include 

public and nonprofit private agencies 

and organizations, agencies of a State, 

tribal organizations, and Territories, that 

receive SCSEP grants from the 

Department. (OAA secs. 502(b)(1), 

506(a)(2)). As used here, ‘‘grantee’’

includes ‘‘grantee’’ as defined in 29 CFR 

97.3 and ‘‘recipient’’ as defined in 29 

CFR 95.2(gg). 

Greatest economic need means the 

need resulting from an income level at 

or below the poverty guidelines 

established by the Department of Health 

and Human Services and approved by 

the Office of Management and Budget 

(OMB). (42 U.S.C. 3002(23)). 

Greatest social need means the need 

caused by non-economic factors, which 

include: physical and mental 

disabilities; language barriers; and 

cultural, social, or geographical 

isolation, including isolation caused by 

racial or ethnic status, that restricts the 

ability of an individual to perform 

normal daily tasks or threatens the 

capacity of the individual to live 

independently. (42 U.S.C. 3002(24)). 

* * * * * 

Host agency means a public agency or 

a private nonprofit organization exempt 

from taxation under section 501(c)(3) of 

the Internal Revenue Code of 1986 

which provides a training work site and 

supervision for one or more 

participants. Political parties cannot be 

host agencies. A host agency may be a 

religious organization as long as the 

projects in which participants are being 

trained do not involve the construction, 

operation, or maintenance of any facility 

used or to be used as a place for 

sectarian religious instruction or 

worship. (OAA sec. 502(b)(1)(D)). 

Indian means a person who is a 

member of an Indian tribe. (42 U.S.C. 

3002(26)). 

Indian tribe means any tribe, band, 

nation, or other organized group or 

community of Indians (including Alaska 

Native village or regional or village 

corporation as defined in or established 

pursuant to the Alaska Native Claims 

Settlement Act, 43 U.S.C. 1601 et seq.) 

which: (1) Is recognized as eligible for 

the special programs and services 

provided by the United States to Indians 

because of their status as Indians; or (2) 

is located on, or in proximity to, a 

Federal or State reservation or 

rancheria. (42 U.S.C. 3002(27)). 

Individual employment plan or IEP 

means a plan for a participant that is 

based on an assessment of that 

participant conducted by the grantee or 

sub-recipient, or a recent assessment or 

plan developed by another employment 

and training program, and a related 

service strategy. The IEP must include 

an appropriate employment goal, 

objectives that lead to the goal, a 

timeline for the achievement of the 

objectives; and be jointly agreed upon 

with the participant. (OAA sec. 

502(b)(1)(N)). 

* * * * * 

Jobs for Veterans Act means Public 

Law 107–288 (2002). Section 2(a) of the 

Jobs for Veterans Act, codified at 38 

U.S.C. 4215(a), provides a priority of 

service for Department of Labor 

employment and training programs for 

veterans, and certain spouses of 

veterans, who otherwise meet the 

eligibility requirements for 

participation. Priority is extended to 

veterans. Priority is also extended to the 

spouse of a veteran who died of a 

service-connected disability; the spouse 

of a member of the Armed Forces on 

active duty who has been listed for a 

total of more than 90 days as missing in 

action, captured in the line of duty by 

a hostile force, or forcibly detained by 

a foreign government or power; the 

spouse of any veteran who has a total 

disability resulting from a serviceconnected disability; and the spouse of 

any veteran who died while a disability 

so evaluated was in existence. (See 

§ 641.520(b)). 

* * * * * 

OAA means the Older Americans Act, 

42 U.S.C. 3001 et seq., as amended. 

* * * * * 

Other participant (enrollee) costs 

means the costs of participant training, 

including the payment of reasonable 

costs to instructors, classroom rental, 

training supplies, materials, equipment, 

and tuition, and which may be provided 

on the job, prior to or concurrent with 

a community service employment 

assignment, in a classroom setting, or 

under other appropriate arrangements; 

job placement assistance, including job 

development and job search assistance; 

participant supportive services to enable 

a participant to successfully participate 

in a project, including the payment of 

reasonable costs of transportation, 

health care and medical services, 

special job-related or personal 

counseling, incidentals (such as work 

shoes, badges, uniforms, eyeglasses, and 

tools), child and adult care, temporary 

shelter, and follow-up services; and 

outreach, recruitment and selection, 

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intake orientation, and assessments. 

(OAA sec. 502(c)(6)(A)). 

Pacific Island and Asian Americans 

means Americans having origins in any 

of the original peoples of the Far East, 

Southeast Asia, the Indian 

Subcontinent, or the Pacific Islands. 

(OAA sec. 518(a)(5)). 

Participant means an individual who 

is determined to be eligible for the 

SCSEP, is given a community service 

employment assignment, and is 

receiving any service funded by the 

program as described in subpart E. 

* * * * * 

Poor employment prospects means 

the likelihood that an individual will 

not obtain employment without the 

assistance of the SCSEP or another 

workforce development program. 

Persons with poor employment 

prospects have a significant barrier to 

employment; significant barriers to 

employment include but are not limited 

to: Lacking a substantial employment 

history, basic skills, and/or Englishlanguage proficiency; lacking a high 

school diploma or the equivalent; 

having a disability; being homeless; or 

residing in socially and economically 

isolated rural or urban areas where 

employment opportunities are limited. 

Program operator means a subrecipient that receives SCSEP funds 

from a SCSEP grantee or a higher-tier 

SCSEP sub-recipient and performs the 

following activities for all its 

participants: eligibility determination, 

participant assessment, and 

development of and placement into 

community service employment 

assignments. 

Program Year means the one-year 

period beginning on July 1 and ending 

on June 30. 

Project means an undertaking by a 

grantee or sub-recipient in accordance 

with a grant or contract agreement that 

provides service to communities and 

training and employment opportunities 

to eligible individuals. 

Recipient means grantee. As used 

here, ‘‘recipient’’ includes ‘‘recipient’’

as defined in 29 CFR 95.2(gg) and 

‘‘grantee’’ as defined in 29 CFR 97.3. 

* * * * * 

Secretary means the Secretary of the 

Department of Labor. 

Service area means the geographic 

area served by a local SCSEP project in 

accordance with a grant agreement. 

* * * * * 

State grantee means the entity 

designated by the Governor, or the 

highest government official, to enter 

into a grant with the Department to 

administer a State or Territory SCSEP 

project under the OAA. Except as 

applied to funding distributions under 

section 506 of the OAA, this definition 

applies to the 50 States, Puerto Rico, the 

District of Columbia and the following 

Territories: Guam, American Samoa, 

U.S. Virgin Islands, and the 

Commonwealth of the Northern Mariana 

Islands. 

State Plan means a plan that the 

Governor, or the highest government 

official, of a State must submit to the 

Secretary that outlines a four-year 

strategy, and describes the planning and 

implementation process, for the 

statewide provision of community 

service and other authorized activities 

for eligible individuals under SCSEP. 

(See § 641.300). 

Sub-recipient means the legal entity to 

which a sub-award of financial 

assistance is made by the grantee (or by 

a higher-tier sub-recipient), and that is 

accountable to the grantee for the use of 

the funds provided. As used here, ‘‘subrecipient’’ includes ‘‘sub-grantee’’ as 

defined in 29 CFR 97.3 and ‘‘subrecipient’’ as defined in 29 CFR 

95.2(kk). 

Supportive services mean services, 

such as transportation, child care, 

dependent care, housing, and needsrelated payments that are necessary to 

enable an individual to participate in 

activities authorized under the SCSEP. 

(OAA sec. 518(a)(7)). 

Title V of the OAA means 42 U.S.C. 

3056 et seq., as amended. 

* * * * * 

Tribal organization means the 

recognized governing body of any 

Indian tribe, or any legally established 

organization of Indians which is 

controlled, sanctioned, or chartered by 

such governing body. (42 U.S.C. 

3002(54)). 

Unemployed means an individual 

who is without a job and who wants and 

is available for work, including an 

individual who may have occasional 

employment that does not result in a 

constant source of income. (OAA sec. 

518(a)(8)). 

* * * * * 

Workforce Investment Act or WIA 

means the Workforce Investment Act of 

1998 (Pub. L. 105–220 [Aug. 7, 1998]), 

29 U.S.C. 2801 et seq., as amended. 

* * * * * 

7. Revise subparts B through F of part 

641 to read as follows: 

Subpart B—Coordination With the 

Workforce Investment Act 

Sec. 

641.200 What is the relationship between 

the SCSEP and the Workforce Investment 

Act? 

641.210 What services, in addition to the 

applicable core services, must SCSEP 

grantees/sub-recipients provide through 

the One-Stop Delivery System? 

641.220 Does title I of WIA require the 

SCSEP to use OAA funds for individuals 

who are not eligible for SCSEP services 

or for services that are not authorized 

under the OAA? 

641.230 Must the individual assessment 

conducted by the SCSEP grantee/subrecipient and the assessment performed 

by the One-Stop Delivery System be 

accepted for use by either entity to 

determine the individual’s need for 

services in the SCSEP and adult 

programs under title I–B of WIA? 

641.240 Are SCSEP participants eligible for 

intensive and training services under 

title I of WIA? 

Subpart C—The State Plan 

641.300 What is the State Plan? 

641.302 What is a four-year strategy? 

641.305 Who is responsible for developing 

and submitting the State Plan? 

641.310 May the Governor, or the highest 

government official, delegate 

responsibility for developing and 

submitting the State Plan? 

641.315 Who participates in developing the 

State Plan? 

641.320 Must all national grantees 

operating within a State participate in 

the State planning process? 

641.325 What information must be 

provided in the State Plan? 

641.330 How should the State Plan reflect 

community service needs? 

641.335 How should the Governor, or the 

highest government official, address the 

coordination of SCSEP services with 

activities funded under title I of WIA? 

641.340 How often must the Governor, or 

the highest government official, update 

the State Plan? 

641.345 What are the requirements for 

modifying the State Plan? 

641.350 How should public comments be 

solicited and collected? 

641.355 Who may comment on the State 

Plan? 

641.360 How does the State Plan relate to 

the equitable distribution report? 

641.365 How must the equitable 

distribution provisions be reconciled 

with the provision that disruptions to 

current participants should be avoided? 

Subpart D—Grant Application and 

Responsibility Review Requirements for 

State and National SCSEP Grants 

641.400 What entities are eligible to apply 

to the Department for funds to 

administer SCSEP projects? 

641.410 How does an eligible entity apply? 

641.420 What are the eligibility criteria that 

each applicant must meet? 

641.430 What are the responsibility 

conditions that an applicant must meet? 

641.440 Are there responsibility conditions 

that alone will disqualify an applicant? 

641.450 How will the Department examine 

the responsibility of eligible entities? 

641.460 What factors will the Department 

consider in selecting national grantees? 

641.465 Under what circumstances may the 

Department reject an application? 

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641.470 What happens if an applicant’s 

application is rejected? 

641.480 May the Governor, or the highest 

government official, make 

recommendations to the Department on 

national grant applications? 

641.490 When will the Department compete 

SCSEP grant awards? 

641.495 When must a State compete its 

SCSEP award? 

Subpart E—Services to Participants 

641.500 Who is eligible to participate in the 

SCSEP? 

641.505 When is eligibility determined? 

641.507 How is applicant income 

computed? 

641.510 What types of income are included 

and excluded for participant eligibility 

determinations? 

641.512 May grantees/sub-recipients enroll 

otherwise eligible individuals and place 

them directly into unsubsidized 

employment? 

641.515 How must grantees/sub-recipients 

recruit and select eligible individuals for 

participation in the SCSEP? 

641.520 Are there any priorities that 

grantees/sub-recipients must use in 

selecting eligible individuals for 

participation in the SCSEP? 

641.535 What services must grantees/subrecipients provide to participants? 

641.540 What types of training may 

grantees/sub-recipients provide to 

SCSEP participants in addition to the 

training received at the community 

service employment assignment? 

641.545 What supportive services may 

grantees/sub-recipients provide to 

participants? 

641.550 What responsibility do grantees/ 

sub-recipients have to place participants 

in unsubsidized employment? 

641.565 What policies govern the provision 

of wages and benefits to participants? 

641.570 Is there a time limit for 

participation in the program? 

641.575 May a grantee/sub-recipient 

establish a limit on the amount of time 

its participants may spend at each host 

agency? 

641.577 Is there a limit on community 

service employment assignment hours? 

641.580 Under what circumstances may a 

grantee/sub-recipient terminate a 

participant? 

641.585 What is the employment status of 

SCSEP participants? 

Subpart F—Pilot, Demonstration, and 

Evaluation Projects 

641.600 What is the purpose of the pilot, 

demonstration, and evaluation projects 

authorized under section 502(e) of the 

OAA? 

641.610 How are pilot, demonstration, and 

evaluation projects administered? 

641.620 How may an organization apply for 

pilot, demonstration, and evaluation 

project funding? 

641.630 What pilot, demonstration, and 

evaluation project activities are 

allowable under section 502(e)? 

641.640 Should pilot, demonstration, and 

evaluation project entities coordinate 

with SCSEP grantees/sub-recipients, 

including area agencies on aging? 

Subpart B—Coordination With the 

Workforce Investment Act 

§ 641.200 What is the relationship between 

the SCSEP and the Workforce Investment 

Act? 

The SCSEP is a required partner 

under the Workforce Investment Act. As 

such, it is a part of the One-Stop 

Delivery System. SCSEP grantees/subrecipients are required to follow all 

applicable rules under WIA and its 

regulations. (29 U.S.C. 2841(b)(1)(B)(vi) 

and 29 CFR 662.200 through 662.280). 

§ 641.210 What services, in addition to the 

applicable core services, must SCSEP 

grantees/sub-recipients provide through the 

One-Stop Delivery System? 

In addition to providing core services, 

as defined at 20 CFR 662.240 of the WIA 

regulations, SCSEP grantees/subrecipients must make arrangements 

through the One-Stop Delivery System 

to provide eligible and ineligible 

individuals with referrals to WIA 

intensive and training services and 

access to other activities and programs 

carried out by other One-Stop partners. 

§ 641.220 Does title I of WIA require the 

SCSEP to use OAA funds for individuals 

who are not eligible for SCSEP services or 

for services that are not authorized under 

the OAA? 

No, SCSEP requirements continue to 

apply. Title V resources may not be 

used to serve individuals who are not 

SCSEP-eligible. The Workforce 

Investment Act creates a seamless 

service delivery system for individuals 

seeking workforce development services 

by linking the One-Stop partners in the 

One-Stop Delivery System. Although 

the overall effect is to provide universal 

access to core services, SCSEP resources 

may only be used to provide services 

that are authorized and provided under 

the SCSEP to eligible individuals. (Note, 

however, that one allowable SCSEP cost 

is a SCSEP project’s proportionate share 

of One-Stop costs; see § 641.850(d).) 

Title V funds can be used to pay wages 

to SCSEP participants receiving 

intensive and training services under 

title I of WIA provided that the SCSEP 

participants have each received a 

community service employment 

assignment. All other individuals who 

are in need of the services provided 

under the SCSEP, but who do not meet 

the eligibility criteria to enroll in the 

SCSEP, should be referred to or enrolled 

in WIA or other appropriate partner 

programs. (29 U.S.C. 2841(b)(1)). These 

arrangements should be negotiated in 

the Memorandum of Understanding 

(MOU), which is an agreement 

developed and executed between the 

Local Workforce Investment Board, with 

the agreement of the chief local elected 

official, and the One-Stop partners 

relating to the operation of the One-Stop 

Delivery System in the local area. The 

MOU is further described in the WIA 

regulations at §§ 662.300 and 662.310 of 

this title. 

§ 641.230 Must the individual assessment 

conducted by the SCSEP grantee/subrecipient and the assessment performed by 

the One-Stop Delivery System be accepted 

for use by either entity to determine the 

individual’s need for services in the SCSEP 

and adult programs under title I–B of WIA? 

Yes, section 502(b)(3) of the OAA 

provides that an assessment or IEP 

completed by the SCSEP satisfies any 

condition for an assessment, service 

strategy, or IEP completed at the OneStop and vice-versa. (OAA sec. 

502(b)(3)). These reciprocal 

arrangements and the contents of the 

SCSEP IEP and WIA IEP should be 

negotiated in the MOU. 

§ 641.240 Are SCSEP participants eligible 

for intensive and training services under 

title I of WIA? 

(a) Although SCSEP participants are 

not automatically eligible for intensive 

and training services under title I of 

WIA, Local Boards may deem SCSEP 

participants, either individually or as a 

group, as satisfying the requirements for 

receiving adult intensive and training 

services under title I of WIA. 

(b) SCSEP participants who have been 

assessed and for whom an IEP has been 

developed have received an intensive 

service according to 20 CFR 663.240(a) 

of the WIA regulations. In order to 

enhance skill development related to 

the IEP, it may be necessary to provide 

training beyond the community service 

employment assignment to enable 

participants to meet their unsubsidized 

employment objectives. The SCSEP 

grantee/sub-recipient, the host agency, 

the WIA program, or another One-Stop 

partner may provide training as 

appropriate and as negotiated in the 

MOU. (See § 641.540 for a further 

discussion of training for SCSEP 

participants.) 

Subpart C—The State Plan 

§ 641.300 What is the State Plan? 

The State Plan is a plan, submitted by 

the Governor, or the highest government 

official, in each State, as an independent 

document or as part of the WIA Unified 

Plan, that outlines a four-year strategy 

for the statewide provision of 

community service employment and 

other authorized activities for eligible 

individuals under the SCSEP as 

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described in § 641.302. The State Plan 

also describes the planning and 

implementation process for SCSEP 

services in the State, taking into account 

the relative distribution of eligible 

individuals and employment 

opportunities within the State. The 

State Plan is intended to foster 

coordination among the various SCSEP 

grantees/sub-recipients operating within 

the State and to facilitate the efforts of 

stakeholders, including State and Local 

Boards under WIA, to work 

collaboratively through a participatory 

process to accomplish the SCSEP’s 

goals. (OAA sec. 503(a)(1)). The State 

Plan provisions are listed in § 641.325. 

§ 641.302 What is a four-year strategy? 

The State Plan must outline a fouryear strategy for the statewide provision 

of community service employment and 

other authorized activities for eligible 

individuals under the SCSEP program. 

(OAA sec. 503(a)(1)). The four-year 

strategy must specifically address the 

following: 

(a) The State’s long-term strategy for 

achieving an equitable distribution of 

SCSEP positions within the State that: 

(1) Moves positions from over-served 

to underserved locations within the 

State, pursuant to § 641.365; 

(2) Equitably serves rural and urban 

areas; and 

(3) Serves individuals afforded 

priority for service, pursuant to 

§ 641.520; 

(b) The State’s long-term strategy for 

avoiding disruptions to the program 

when new Census data become 

available, or when there is overenrollment for any other reason; 

(c) The State’s long-term strategy for 

serving minority older individuals 

under SCSEP; 

(d) Long-term projections for job 

growth in industries and occupations in 

the State that may provide employment 

opportunities for older workers, and 

how those relate to the types of 

unsubsidized jobs for which SCSEP 

participants will be trained, and the 

types of skill training to be provided; 

(e) The State’s long-term strategy for 

engaging employers to develop and 

promote opportunities for the placement 

of SCSEP participants in unsubsidized 

employment; 

(f) The State strategy for continuous 

increase in the level of performance for 

entry into unsubsidized employment, 

and to achieve, at a minimum, the levels 

specified in section 513(a)(2)(E)(ii) of 

the OAA; 

(g) Planned actions to coordinate 

activities of SCSEP grantees with the 

activities being carried out in the State 

under title I of WIA, including plans for 

utilizing the WIA One-Stop Delivery 

System and its partners to serve 

individuals aged 55 and older; 

(h) Planned actions to coordinate 

activities of SCSEP grantees with the 

activities being carried out in the State 

under other titles of the OAA; 

(i) Planned actions to coordinate the 

SCSEP with other public and private 

entities and programs that provide 

services to older Americans, such as 

community and faith-based 

organizations, transportation programs, 

and programs for those with special 

needs or disabilities; 

(j) Planned actions to coordinate the 

SCSEP with other labor market and job 

training initiatives; and 

(k) The State’s long-term strategy to 

improve SCSEP services, including 

planned longer-term changes to the 

design of the program within the State, 

and planned changes in the utilization 

of SCSEP grantees and program 

operators so as to better achieve the 

goals of the program; this may include 

recommendations to the Department, as 

appropriate. 

§ 641.305 Who is responsible for 

developing and submitting the State Plan? 

The Governor, or the highest 

governmental official, of each State is 

responsible for developing and 

submitting the State Plan to the 

Department. 

§ 641.310 May the Governor, or the highest 

government official, delegate responsibility 

for developing and submitting the State 

Plan? 

Yes, the Governor, or the highest 

governmental official of each State, may 

delegate responsibility for developing 

and submitting the State Plan, provided 

that any such delegation is consistent 

with State law and regulations. To 

delegate responsibility, the Governor, or 

the highest government official, must 

submit to the Department a signed 

statement indicating the individual and/ 

or organization that will be submitting 

the State Plan on his or her behalf. 

§ 641.315 Who participates in developing 

the State Plan? 

(a) In developing the State Plan the 

Governor, or the highest government 

official, must seek the advice and 

recommendations of representatives 

from: 

(1) The State and Area Agencies on 

Aging; 

(2) State and Local Boards under the 

Workforce Investment Act (WIA); 

(3) Public and private nonprofit 

agencies and organizations providing 

employment services, including each 

grantee operating a SCSEP project 

within the State, except as provided for 

in § 641.320(b); 

(4) Social service organizations 

providing services to older individuals; 

(5) Grantees under title III of the OAA; 

(6) Affected communities; 

(7) Unemployed older individuals; 

(8) Community-based organizations 

serving older individuals; 

(9) Business organizations; and 

(10) Labor organizations. 

(b) The Governor, or the highest 

government official, may also obtain the 

advice and recommendations of other 

interested organizations and 

individuals, including SCSEP program 

participants, in developing the State 

Plan. (OAA sec. 503(a)(2)). 

§ 641.320 Must all national grantees 

operating within a State participate in the 

State planning process? 

(a) The eligibility provision at OAA 

section 514(c)(6) requires national 

grantees to coordinate activities with 

other organizations at the State and 

local levels. Therefore, except as 

provided in paragraph (b) of this 

section, any national grantee that does 

not participate in the State planning 

process may be deemed ineligible to 

receive SCSEP funds in the following 

Program Year. 

(b) National grantees serving older 

American Indians, or Pacific Island and 

Asian Americans, with funds reserved 

under OAA section 506(a)(3), are 

exempted from the requirement to 

participate in the State planning 

processes under section 503(a)(8) of the 

OAA. Although these national grantees 

may choose not to participate in the 

State planning process, the Department 

encourages their participation. Only 

those grantees using reserved funds are 

exempt; if a grantee is awarded one 

grant with reserved funds and another 

grant with non-reserved funds, the 

grantee is required under paragraph (a) 

of this section to participate in the State 

planning process for purposes of the 

non-reserved funds grant. 

§ 641.325 What information must be 

provided in the State Plan? 

The Department issues instructions 

detailing the information that must be 

provided in the State Plan. At a 

minimum, the State Plan must include 

the State’s four-year strategy, as 

described in § 641.302, and information 

on the following: 

(a) The ratio of eligible individuals in 

each service area to the total eligible 

population in the State; 

(b) The relative distribution of: 

(1) Eligible individuals residing in 

urban and rural areas within the State; 

(2) Eligible individuals who have the 

greatest economic need; 

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(3) Eligible individuals who are 

minorities; 

(4) Eligible individuals who are 

limited English proficient; and 

(5) Eligible individuals who have the 

greatest social need; 

(c) The current and projected 

employment opportunities in the State 

(such as by providing information 

available under section 15 of the 

Wagner-Peyser Act (29 U.S.C. 491–2) by 

occupation), and the types of skills 

possessed by eligible individuals; 

(d) The localities and populations for 

which projects of the type authorized by 

title V are most needed; 

(e) Actions taken and/or planned to 

coordinate activities of SCSEP grantees 

in the State with activities carried out in 

the State under title I of WIA; 

(f) A description of the process used 

to obtain advice and recommendations 

on the State Plan from representatives of 

organizations and individuals listed in 

§ 641.315, and advice and 

recommendations on steps to coordinate 

SCSEP services with activities funded 

under title I of WIA from representatives 

of organizations listed in § 641.335; 

(g) A description of the State’s 

procedures and time line for ensuring 

an open and inclusive planning process 

that provides meaningful opportunity 

for public comment as required by 

§ 641.350; 

(h) Public comments received, and a 

summary of the comments; 

(i) A description of the steps taken to 

avoid disruptions to the greatest extent 

possible as provided in § 641.365; and 

(j) Such other information as the 

Department may require in the State 

Plan instructions. (OAA sec. 503(a)(3)–

(4), (6)). 

§ 641.330 How should the State Plan 

reflect community service needs? 

The Governor, or the highest 

government official, must ensure that 

the State Plan identifies the types of 

community services that are needed and 

the places where these services are most 

needed. The State Plan should 

specifically identify the needs and 

locations of those individuals most in 

need of community services and the 

groups working to meet their needs. 

(OAA section 503(a)(4)(E)). 

§ 641.335 How should the Governor, or the 

highest government official, address the 

coordination of SCSEP services with 

activities funded under title I of WIA? 

The Governor, or the highest 

government official, must seek the 

advice and recommendations from 

representatives of the State and Area 

Agencies on Aging in the State and the 

State and Local Boards established 

under title I of WIA. (OAA sec. 

503(a)(2)). The State Plan must describe 

the steps that are being taken to 

coordinate SCSEP activities within the 

State with activities being carried out 

under title I of WIA. (OAA sec. 

503(a)(4)(F)). The State Plan must 

describe the steps being taken to ensure 

that the SCSEP is an active partner in 

each One-Stop Delivery System and the 

steps that will be taken to encourage 

and improve coordination with the OneStop Delivery System. 

§ 641.340 How often must the Governor, or 

the highest government official, update the 

State Plan? 

Pursuant to instructions issued by the 

Department, the Governor, or the 

highest government official, must 

review the State Plan and submit an 

update to the State Plan to the Secretary 

for consideration and approval not less 

often than every two years. OAA section 

503(a)(1). States are encouraged to 

review their State Plan more frequently 

than every two years, however, and 

make modifications as circumstances 

warrant, pursuant to § 641.345. Prior to 

development of the update to the State 

Plan, the Governor, or the highest 

government official, must seek the 

advice and recommendations of the 

individuals and organizations identified 

in § 641.315 about what, if any, changes 

are needed, and must publish the State 

Plan, showing the changes, for public 

comment. OAA sections 503(a)(2), 

503(a)(3). 

§ 641.345 What are the requirements for 

modifying the State Plan? 

(a) Modifications may be submitted 

anytime circumstances warrant. 

(b) Modifications to the State Plan are 

required when: 

(1) There are changes in Federal or 

State law or policy that substantially 

change the assumptions upon which the 

State Plan is based; 

(2) There are significant changes in 

the State’s vision, four-year strategy, 

policies, performance indicators, or 

organizational responsibilities; 

(3) The State has failed to meet 

performance goals and must submit a 

corrective action plan; or 

(4) There is a change in a grantee or 

grantees. 

(c) Modifications to the State Plan are 

subject to the same public review and 

comment requirements that apply to the 

development of the State Plan under 

§ 641.350. 

(d) States are not required to seek the 

advice and recommendations of the 

individuals and organizations identified 

in § 641.315 when modifying the State 

Plan. 

(e) The Department will issue 

additional instructions for the 

procedures that must be followed when 

requesting modifications to the State 

Plan. (OAA sec. 503(a)(1)). 

§ 641.350 How should public comments be 

solicited and collected? 

The Governor, or the highest 

government official, should follow 

established State procedures to solicit 

and collect public comments. The State 

Plan must include a description of the 

State’s procedures and schedule for 

ensuring an open and inclusive 

planning process that provides 

meaningful opportunity for public 

comment. 

§ 641.355 Who may comment on the State 

Plan? 

Any individual or organization may 

comment on the Plan. 

§ 641.360 How does the State Plan relate 

to the equitable distribution report? 

The two documents address some of 

the same areas, but are prepared at 

different points in time. The equitable 

distribution report is prepared by State 

grantees at the beginning of each fiscal 

year and provides a ‘‘snapshot’’ of the 

actual distribution of all of the 

authorized positions within the State, 

grantee-by-grantee, and the optimum 

number of participant positions in each 

designated area based on the latest 

available Census data. The State Plan is 

prepared by the Governor, or the highest 

government official, and covers many 

areas in addition to equitable 

distribution, as discussed in § 641.325, 

and sets forth a proposed plan for 

distribution of authorized positions in 

the State. Any distribution or 

redistribution of positions made as a 

result of a State Plan proposal will be 

reflected in the next equitable 

distribution report, which then forms 

the basis for the proposed distribution 

in the next State Plan update. This 

process is iterative in that it moves the 

authorized positions from over-served 

areas to underserved areas over a period 

of time. 

§ 641.365 How must the equitable 

distribution provisions be reconciled with 

the provision that disruptions to current 

participants should be avoided? 

Governors, or highest government 

officials, must describe in the State Plan 

the steps that are being taken to comply 

with the statutory requirement to avoid 

disruptions in the provision of services 

for participants. (OAA sec. 503(a)(6)). 

When there are new Census data 

indicating that there has been a shift in 

the location of the eligible population or 

when there is over-enrollment for any 

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other reason, the Department 

recommends a gradual shift that 

encourages current participants in 

subsidized community service 

employment assignments to move into 

unsubsidized employment to make 

positions available for eligible 

individuals in the areas where there has 

been an increase in the eligible 

population. The Department does not 

define disruptions to mean that 

participants are entitled to remain in a 

subsidized community service 

employment assignment indefinitely. As 

discussed in § 641.570, there is a time 

limit on SCSEP participation, thus 

permitting positions to be transferred 

over time. Grantees and sub-recipients 

must not transfer positions from one 

geographic area to another without first 

notifying the State agency responsible 

for preparing the State Plan and 

equitable distribution report. Grantees 

must submit, in writing, any proposed 

changes in distribution that occur after 

submission of the equitable distribution 

report to the Federal Project Officer for 

approval. All grantees are strongly 

encouraged to coordinate any proposed 

changes in position distribution with 

the other grantees in the State, including 

the State project director, prior to 

submitting the proposed changes to 

their Federal Project Officer for 

approval. 

Subpart D—Grant Application and 

Responsibility Review Requirements 

for State and National SCSEP Grants 

§ 641.400 What entities are eligible to 

apply to the Department for funds to 

administer SCSEP projects? 

(a) National Grants. Entities eligible to 

apply for national grants include 

nonprofit organizations, Federal public 

agencies, and tribal organizations. These 

entities must be capable of 

administering a multi-State program. 

State and local agencies may not apply 

for these funds. 

(b) State Grants. (1) Section 506(e) of 

the OAA requires the Department to 

award each State a grant to provide 

SCSEP services. Governors, or highest 

government officials, designate an 

individual State agency as the 

organization to administer SCSEP funds. 

(2) If the State fails to meet its 

expected levels of performance for the 

core indicators for three consecutive 

years, it is not eligible to designate an 

agency to administer SCSEP funds in 

the following year. Instead, the State 

must conduct a competition to select an 

organization as the grantee of the funds 

allotted to the State under section 

506(e). Public and nonprofit private 

agencies and organizations, State 

agencies other than the previously 

designated, failed agency, and tribal 

organizations, are eligible to be selected 

as a grantee for the funds. Other States 

may not be selected as a grantee for this 

funding. 

§ 641.410 How does an eligible entity 

apply? 

(a) General. An eligible entity must 

follow the application guidelines issued 

by the Department. The Department will 

issue application guidelines announcing 

the availability of national funds and 

State funds, whether they are awarded 

on a competitive or noncompetitive 

basis. The guidelines will contain 

application due dates, application 

instructions, evaluation criteria, and 

other necessary information. 

(b) National Grant Applicants. All 

applicants for SCSEP national grant 

funds, except organizations proposing to 

serve older Indians and Pacific Island 

and Asian Americans with funds 

reserved under OAA section 506(a)(3), 

must submit their applications to the 

Governor, or the highest government 

official, of each State in which projects 

are proposed so that he or she has a 

reasonable opportunity to make the 

recommendations described in 

§ 641.480, before submitting the 

application to the Department. (OAA 

sec. 503(a)(5)). 

(c) State Applicants. A State that 

submits a Unified Plan under WIA 

section 501 may include the State’s 

SCSEP grant application in its Unified 

Plan. Any State that submits a SCSEP 

grant application as part of its WIA 

Unified Plan must address all of the 

application requirements as published 

in the Department’s instructions. 

Sections 641.300 through 641.365 

address State Plan applications and 

modifications. 

§ 641.420 What are the eligibility criteria 

that each applicant must meet? 

To be eligible to receive SCSEP funds, 

each applicant must be able to 

demonstrate: 

(a) An ability to administer a program 

that serves the greatest number of 

eligible participants, giving particular 

consideration to individuals with 

greatest economic need, individuals 

with greatest social need, and 

individuals described in § 641.570(b) or 

§ 641.520(a)(2) through (a)(8); 

(b) An ability to administer a program 

that provides employment for eligible 

individuals in communities in which 

they reside, or in nearby communities, 

that will contribute to the general 

welfare of the community; 

(c) An ability to administer a program 

that moves eligible participants into 

unsubsidized employment; 

(d) Where the applicant has 

previously received a SCSEP grant, the 

applicant’s prior performance in 

meeting SCSEP core measures of 

performance and addressing SCSEP 

additional measures of performance; 

and where the applicant has not 

received a SCSEP grant, the applicant’s 

prior performance under other Federal 

or State programs; 

(e) An ability to move participants 

with multiple barriers to employment, 

including individuals described in 

§ 641.570(b) or § 641.520(a)(2) through 

(a)(8), into unsubsidized employment; 

(f) An ability to coordinate activities 

with other organizations at the State and 

local levels, including the One-Stop 

Delivery System; 

(g) An ability to properly manage the 

program, as reflected in its plan for 

fiscal management of the SCSEP; 

(h) An ability to administer a project 

that provides community service; 

(i) An ability to minimize program 

disruption for current participants and 

in community services provided if there 

is a change in project sponsor and/or 

location, and its plan for minimizing 

disruptions; 

(j) Any additional criteria that the 

Department deems appropriate to 

minimize disruptions for current 

participants. (OAA sec. 514(c)). 

§ 641.430 What are the responsibility 

conditions that an applicant must meet? 

Subject to § 641.440, each applicant 

must meet each of the listed 

responsibility ‘‘tests’’ by not having 

committed any of the following acts: 

(a) The Department has been unable 

to recover a debt from the applicant, 

whether incurred by the applicant or by 

one of its sub-recipients, or the 

applicant has failed to comply with a 

debt repayment plan to which it agreed. 

In this context, a debt is established by 

final agency action, followed by three 

demand letters to the applicant, without 

payment in full by the applicant. 

(b) Established fraud or criminal 

activity of a significant nature within 

the applicant’s organization. 

(c) Serious administrative deficiencies 

identified by the Department, such as 

failure to maintain a financial 

management system as required by 

Federal regulations. 

(d) Willful obstruction of the auditing 

or monitoring process. 

(e) Failure to provide services to 

applicants as agreed to in a current or 

recent grant or to meet applicable core 

performance measures or address other 

applicable indicators of performance. 

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(f) Failure to correct deficiencies 

brought to the grantee’s attention in 

writing as a result of monitoring 

activities, reviews, assessments, or other 

activities. 

(g) Failure to return a grant closeout 

package or outstanding advances within 

90 days after the grant expiration date 

or receipt of closeout package, 

whichever is later, unless an extension 

has been requested and granted. 

(h) Failure to submit required reports. 

(i) Failure to properly report and 

dispose of Government property as 

instructed by the Department. 

(j) Failure to have maintained 

effective cash management or cost 

controls resulting in excess cash on 

hand. 

(k) Failure to ensure that a subrecipient complies with applicable audit 

requirements, including OMB Circular 

A–133 and the audit requirements 

specified at § 641.821. 

(l) Failure to audit a sub-recipient 

within the period required under 

§ 641.821. 

(m) Final disallowed costs in excess 

of five percent of the grant or contract 

award if, in the judgment of the Grant 

Officer, the disallowances are egregious 

findings. 

(n) Failure to establish a mechanism 

to resolve a sub-recipient’s audit in a 

timely fashion. (OAA sec. 514(d)(4)). 

§ 641.440 Are there responsibility 

conditions that alone will disqualify an 

applicant? 

(a) Yes, an applicant may be 

disqualified if 

(1) Either of the first two 

responsibility tests listed in § 641.430 is 

not met, or 

(2) The applicant substantially, or 

persistently for two or more consecutive 

years, fails one of the other 

responsibility tests listed in § 641.430. 

(b) The second responsibility test 

addresses ‘‘fraud or criminal activity of 

a significant nature.’’ The Department 

will determine the existence of 

significant fraud or criminal activity 

which typically will include willful or 

grossly negligent disregard for the use or 

handling of, or other fiduciary duties 

concerning, Federal funding, where the 

grantee has no effective systems, checks, 

or safeguards to detect or prevent fraud 

or criminal activity. Additionally, 

significant fraud or criminal activity 

will typically include coordinated 

patterns or behaviors that pervade a 

grantee’s administration or are focused 

at the higher levels of a grantee’s 

management or authority. The 

Department will determine whether 

‘‘fraud or criminal activity of a 

significant nature’’ has occurred on a 

case-by-case basis, regardless of what 

party identifies the alleged fraud or 

criminal activity. 

§ 641.450 How will the Department 

examine the responsibility of eligible 

entities? 

The Department will review available 

records to assess each applicant’s 

overall fiscal and administrative ability 

to manage Federal funds. The 

Department’s responsibility review may 

consider any available information, 

including the organization’s history 

with regard to the management of other 

grants awarded by the Department or by 

other Federal agencies. (OAA sec. 

514(d)(1) and(d)(2)). 

§ 641.460 What factors will the Department 

consider in selecting national grantees? 

The Department will select national 

grantees from among applicants that are 

able to meet the eligibility and 

responsibility review criteria at section 

514 of the OAA. (Section 641.420 

contains the eligibility criteria and 

§ 641.430 and § 641.440 contain the 

responsibility criteria.) The Department 

also will take the rating criteria 

described in the Solicitation for Grant 

Application or other instrument into 

consideration. 

§ 641.465 Under what circumstances may 

the Department reject an application? 

(a) The Department may question any 

proposed project component of an 

application if it believes that the 

component will not serve the purposes 

of the SCSEP. The Department may 

reject the application if the applicant 

does not submit or negotiate an 

acceptable alternative. 

(b) The Department may reject any 

application that the Grant Officer 

determines unacceptable based on the 

content of the application, rating score, 

past performance, fiscal management, or 

any other factor the Grant Officer 

believes serves the best interest of the 

program, including the application’s 

comparative rating in a competition. 

§ 641.470 What happens if an applicant’s 

application is rejected? 

(a) Any entity whose application is 

rejected in whole or in part will be 

informed that they have not been 

selected. The non-selected entity may 

request an explanation of the 

Department’s basis for its rejection. If 

requested, the Department will provide 

the entity with feedback on its proposal. 

See § 641.900. 

(b) Incumbent grantees will not have 

an opportunity to obtain technical 

assistance provided by the Department 

under OAA section 513(d)(2)(B)(i) to 

cure in an open competition any 

deficiency in a proposal because that 

will create inequity in favor of 

incumbents. 

(c) If the Administrative Law Judge 

(ALJ) rules, under § 641.900, that the 

organization should have been selected, 

in whole or in part, the matter must be 

remanded to the Grant Officer. The 

Grant Officer must, within 10 working 

days, determine whether the 

organization continues to meet the 

requirements of this part, and whether 

the positions which are the subject of 

the ALJ’s decision will be awarded, in 

whole or in part, to the organization and 

the timing of the award. In making this 

determination, the Grant Officer must 

take into account disruption to 

participants, disruption to grantees, and 

the operational needs of the SCSEP. 

(d) In the event that the Grant Officer 

determines that it is not feasible to 

award any positions to the appealing 

applicant, the applicant will be awarded 

its bid preparation costs, or a pro rata 

share of those costs if the Grant Officer’s 

finding applies to only a portion of the 

funds that would be awarded. If 

positions are awarded to the appealing 

applicant, that applicant is not entitled 

to the full grant amount but will only 

receive the funds remaining in the grant 

that have not been expended by the 

current grantee through its operation of 

the grant and its subsequent closeout. 

The available remedy in a SCSEP nonselection appeal is neither retroactive 

nor an immediately effective selection; 

rather it is the potential to be selected 

as a SCSEP grantee as quickly as 

administratively feasible in the future, 

for the remainder of the grant cycle. 

(e) In the event that any party notifies 

the Grant Officer that it is not satisfied 

with the Grant Officer’s decision, the 

Grant Officer must return the decision 

to the ALJ for review. 

(f) Any organization selected and/or 

funded as a SCSEP grantee is subject to 

having its positions reduced or to being 

removed as a SCSEP grantee if an ALJ 

decision so orders. The Grant Officer 

provides instructions on transition and 

closeout to both the newly designated 

grantee and to the grantee whose 

positions are affected or which is being 

removed. All parties must agree to the 

provisions of this paragraph as a 

condition of being a SCSEP grantee. 

§ 641.480 May the Governor, or the highest 

government official, make 

recommendations to the Department on 

national grant applications? 

(a) Yes, in accordance with 

§ 641.410(b), each Governor, or highest 

government official, will have a 

reasonable opportunity to make 

comments on any application to operate 

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a SCSEP project located in the 

Governor’s, or the highest government 

official’s, State before the Department 

makes a final decision on a grant award. 

The Governor’s, or the highest 

government official’s, comments should 

be directed to the Department and may 

include the anticipated effect of the 

proposal on the overall distribution of 

program positions within the State; 

recommendations for redistribution of 

positions to underserved areas as 

vacancies occur in previously 

encumbered positions in other areas; 

and recommendations for distributing 

any new positions that may become 

available as a result of an increase in 

funding for the State. The Governor’s, or 

the highest government official’s, 

recommendations should be consistent 

with the State Plan. (OAA sec. 

503(a)(5)). 

(b) The Governor, or the highest 

government official, has the option of 

making the authorized 

recommendations on all applications or 

only on those applications proposed for 

award following the rating process. It is 

incumbent on each Governor, or the 

highest government official, to inform 

the Department of his or her intent to 

review the applications before or after 

the rating process. 

§ 641.490 When will the Department 

compete SCSEP grant awards? 

(a)(1) As provided in a Solicitation for 

Grant Applications published in the 

Federal Register, the Department will 

hold a full and open competition for 

national grants every four years. (OAA 

sec. 514(a)(1)). 

(2) If a national grantee meets the 

expected level of performance for each 

of the core indicators for each of the 

four years, the Department may provide 

an additional one-year grant to the 

national grantee. (OAA sec. 514(a)(2)). 

§ 641.495 When must a State compete its 

SCSEP award? 

If a State grantee fails to meet its 

expected levels of performance for three 

consecutive Program Years, the State 

must hold a full and open competition, 

under such conditions as the Secretary 

may provide, for the State SCSEP funds 

for the full Program Year following the 

determination of consecutive failure. 

(OAA sec. 513(d)(3)(B)(iii)). The 

incumbent (failed) grantee is not eligible 

to compete. Other states are also not 

eligible to compete for these funds. (See 

§ 641.400(b)(2)) 

Subpart E—Services to Participants 

§ 641.500 Who is eligible to participate in 

the SCSEP? 

Anyone who is at least 55 years old, 

unemployed (as defined in § 641.140), 

and who is a member of a family with 

an income that is not more than 125 

percent of the family income levels 

prepared by the Department of Health 

and Human Services and approved by 

OMB (Federal poverty guidelines) is 

eligible to participate in the SCSEP. 

(OAA sec. 518(a)(3), (8)). A person with 

a disability may be treated as a ‘‘family 

of one’’ for income eligibility 

determination purposes. 

§ 641.505 When is eligibility determined? 

Initial eligibility is determined at the 

time individuals apply to participate in 

the SCSEP. Once individuals become 

SCSEP participants, the grantee/subrecipient is responsible for verifying 

their continued eligibility at least once 

every 12 months. Grantees/subrecipients may also verify an 

individual’s eligibility as circumstances 

require, including instances when 

enrollment is delayed. 

§ 641.507 How is applicant income 

computed? 

An applicant’s income is computed 

by calculating the includable income 

received by the applicant during the 12- 

month period ending on the date an 

individual submits an application to 

participate in the SCSEP, or the 

annualized income for the 6-month 

period ending on the application date, 

whichever the grantee involved selects. 

(OAA sec. 518(a)(4)). 

§ 641.510 What types of income are 

included and excluded for participant 

eligibility determinations? 

(a) With certain exceptions, the 

Department will use the definition of 

income from the U.S. Census Bureau’s 

Current Population Survey (CPS) as the 

standard for determining SCSEP 

applicant income eligibility. 

(b) Any income that is unemployment 

compensation, a benefit received under 

title XVI of the Social Security Act (42 

U.S.C. 1381 et seq.), a payment made to 

or on behalf of veterans or former 

members of the Armed Forces under the 

laws administered by the Secretary of 

Veterans Affairs, or 25 percent of a 

benefit received under title II of the 

Social Security Act (42 U.S.C. 401 et 

seq.), must be excluded from SCSEP 

income eligibility determinations. (OAA 

sec. 518(a)(3)(A)). 

(c) The Department has issued 

administrative guidance on income 

inclusions and exclusions and 

procedures for determining SCSEP 

income eligibility. This guidance may 

be updated periodically. 

§ 641.512 May grantees/sub-recipients 

enroll otherwise eligible individuals and 

place them directly into unsubsidized 

employment? 

No, grantees/sub-recipients may not 

enroll as SCSEP participants individuals 

who can be directly placed into 

unsubsidized employment. Such 

individuals should be referred to an 

employment provider, such as the OneStop Center for job placement assistance 

under WIA. 

§ 641.515 How must grantees/subrecipients recruit and select eligible 

individuals for participation in the SCSEP? 

(a) Grantees and sub-recipients must 

develop methods of recruitment and 

selection that assure that the maximum 

number of eligible individuals have an 

opportunity to participate in the 

program. To the extent feasible, grantees 

and sub-recipients should seek to enroll 

minority and Indian eligible 

individuals, eligible individuals with 

limited English proficiency, and eligible 

individuals with greatest economic 

need, at least in proportion to their 

numbers in the area, taking into 

consideration their rates of poverty and 

unemployment. (OAA sec. 

502(b)(1)(M)). 

(b) Grantees and sub-recipients must 

use the One-Stop Delivery System in the 

recruitment and selection of eligible 

individuals to ensure that the maximum 

number of eligible individuals have an 

opportunity to participate in the project. 

(OAA sec. 502(b)(1)(H)). 

(c) States may enter into agreements 

among themselves to permit crossborder enrollment of eligible 

participants. Such agreements should 

cover both State and national grantee 

positions and must be submitted to the 

Department for approval. 

§ 641.520 Are there any priorities that 

grantees/sub-recipients must use in 

selecting eligible individuals for 

participation in the SCSEP? 

(a) Yes, in selecting eligible 

individuals for participation in the 

SCSEP, priority must be given to 

individuals who have one or more of the 

following characteristics: 

(1) Are 65 years of age or older; 

(2) Have a disability; 

(3) Have limited English proficiency 

or low literacy skills; 

(4) Reside in a rural area; 

(5) Are veterans (or, in some cases, 

spouses of veterans) for purposes of 

section 2(a) of the Jobs for Veterans Act, 

38 U.S.C. 4215(a) as set forth in 

paragraph (b) of this section; 

(6) Have low employment prospects; 

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(7) Have failed to find employment 

after utilizing services provided through 

the One-Stop Delivery System; or 

(8) Are homeless or are at risk for 

homelessness.(OAA sec. 518(b)). 

(b) Section 2(a) of the Jobs for 

Veterans Act creates a priority for 

service for veterans (and, in some cases, 

spouses of veterans) who otherwise 

meet the program eligibility criteria for 

the SCSEP. 38 U.S.C. 4215(a). Priority is 

extended to veterans. Priority is also 

extended to the spouse of a veteran who 

died of a service-connected disability; 

the spouse of a member of the Armed 

Forces on active duty who has been 

listed for a total of more than 90 days 

as missing in action, captured in the 

line of duty by a hostile force, or 

forcibly detained by a foreign 

government or power; the spouse of any 

veteran who has a total disability 

resulting from a service-connected 

disability; and the spouse of any veteran 

who died while a disability so evaluated 

was in existence. 

(c) Grantees/sub-recipients must 

apply these priorities in the following 

order: 

(1) Persons who qualify as a veteran 

or qualified spouse under section 2(a) of 

the Jobs for Veterans Act, 38 U.S.C. 

4215(a), and who possess at least one of 

the other priority characteristics; 

(2) Persons who qualify as a veteran 

or qualified spouse under section 2(a) of 

the Jobs for Veterans Act, 38 U.S.C. 

4215(a), who do not possess any other 

of the priority characteristics; 

(3) Persons who do not qualify as a 

veteran or qualified spouse under 

section 2(a) of the Jobs for Veterans Act 

(non-veterans), and who possess at least 

one of the other priority characteristics. 

§ 641.535 What services must grantees/ 

sub-recipients provide to participants? 

(a) When individuals are selected for 

participation in the SCSEP, the grantee/ 

sub-recipient is responsible for: 

(1) Providing orientation to the 

SCSEP, including information on 

project goals and objectives, community 

service employment assignments, 

training opportunities, available 

supportive services, the availability of a 

free physical examination, participant 

rights and responsibilities, and 

permitted and prohibited political 

activities (OAA sec. 502); 

(2)(i) Assessing participants’ work 

history, skills and interests, talents, 

physical capabilities, aptitudes, needs 

for supportive services, occupational 

preferences, training needs, potential for 

performing community service 

employment assignments, and potential 

for transition to unsubsidized 

employment; 

(ii) Performing an initial assessment 

upon program entry, unless an 

assessment has already been performed 

under title I of WIA as provided in 

§ 641.230. Subsequent assessments may 

be made as necessary, but must be made 

no less frequently than two times during 

a twelve month period (including the 

initial assessment); 

(3)(i) Using the information gathered 

during the initial assessment to develop 

an IEP that includes an appropriate 

employment goal for each participant, 

except that if an assessment has already 

been performed and an IEP developed 

under title I of WIA, the WIA 

assessment and IEP will satisfy the 

requirement for a SCSEP assessment 

and IEP as provided in § 641.230; 

(ii) Updating the IEP as necessary to 

reflect information gathered during the 

subsequent participant assessments 

(OAA sec. 502(b)(1)(N)); 

(4) Placing participants in appropriate 

community service employment 

assignments in the community in which 

they reside, or in a nearby community 

(OAA sec. 502(b)(1)(B)); 

(5) Providing or arranging for training 

identified in participants’ IEPs and 

consistent with the SCSEP’s goal of 

unsubsidized employment (OAA secs. 

502(a)(1), 502(b)(1)(B), 502(b)(1)(I), 

502(b)(1)(N)(ii)); 

(6) Assisting participants in arranging 

for needed supportive services 

identified in their SCSEP IEPs (OAA 

sec. 502(b)(1)(N)); 

(7) Providing appropriate services for 

participants, or referring participants to 

appropriate services, through the OneStop Delivery System established under 

WIA (OAA sec. 502(b)(1)(O)); 

(8) Providing counseling on 

participants’ progress in meeting the 

goals and objectives identified in their 

IEPs, and in meeting their supportive 

service needs (OAA sec. 

502(b)(1)(N)(iii)); 

(9) Providing participants with wages 

and benefits for time spent in the 

community service employment 

assignment, orientation, and training 

(OAA secs. 502(b)(1)(I), 502(b)(1)(J), 

502(c)(6)(A)(i)) (see also §§ 641.565 and 

641.540(f), addressing wages and 

benefits); 

(10) Ensuring that participants have 

safe and healthy working conditions at 

their community service employment 

worksites (OAA sec. 502(b)(1)(J)); 

(11) Assisting participants in 

obtaining unsubsidized employment, 

including providing or arranging for 

employment counseling in support of 

their IEPs; 

(b) In addition to the services listed in 

paragraph (a) of this section, grantees/ 

sub-recipients must provide services to 

participants according to administrative 

guidelines that may be issued by the 

Department. 

(c) Grantees may not use SCSEP funds 

for individuals who only need job 

search assistance or job referral services. 

Grantees may provide job search 

assistance and job club activities to 

participants who are enrolled in the 

SCSEP and are assigned to community 

service employment assignments. (See 

also § 641.512). 

§ 641.540 What types of training may 

grantees/sub-recipients provide to SCSEP 

participants in addition to the training 

received at the community service 

employment assignment? 

(a) In addition to the training 

provided in a community service 

employment assignment, grantees and 

sub-recipients must arrange skill 

training that is realistic and consistent 

with the participants’ IEP, that makes 

the most effective use of their skills and 

talents, and that prepares them for 

unsubsidized employment. 

(b) Training may be provided prior to 

beginning or concurrent with a 

community service employment 

assignment. 

(c) Training may be in the form of 

lectures, seminars, classroom 

instruction, individual instruction, 

online instruction, on-the-job 

experiences, or other arrangements, 

including but not limited to, 

arrangements with other workforce 

development programs such as WIA. 

(OAA sec. 502(c)(6)(A)(ii)). 

(d) Grantees/sub-recipients are 

encouraged to obtain training through 

locally available resources, including 

host agencies, at no cost or reduced cost 

to the SCSEP. 

(e) Grantees/sub-recipients may pay 

for participant training, including the 

payment of reasonable costs of 

instructors, classroom rental, training 

supplies, materials, equipment, and 

tuition. (OAA sec. 502(c)(6)(A)(ii)). 

(f) Participants must be paid wages 

while in training, as described in 

§ 641.565(a). (OAA sec. 502(b)(1)(I)). 

(g) Grantees/sub-recipients may pay 

for costs associated with supportive 

services, such as transportation, 

necessary to participate in training. 

(OAA sec. 502(b)(1)(L)). 

(h) Nothing in this section prevents or 

limits participants from engaging in selfdevelopment training available through 

other sources, at their own expense, 

during hours when not performing their 

community service employment 

assignments. 

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§ 641.545 What supportive services may 

grantees/sub-recipients provide to 

participants? 

(a) Grantees/sub-recipients may 

provide or arrange for supportive 

services that are necessary to enable an 

individual to successfully participate in 

a SCSEP project, including but not 

limited to payment of reasonable costs 

of transportation; health and medical 

services; special job-related or personal 

counseling; incidentals such as work 

shoes, badges, uniforms, eyeglasses, and 

tools; dependent care; housing; needsrelated payments; and follow-up 

services. (OAA secs. 502(c)(6)(A)(iv), 

518(a)(7)). 

(b) To the extent practicable, the 

grantee/sub-recipient should provide for 

the payment of these expenses from 

other resources. 

(c) Grantees/sub-recipients are 

encouraged to contact placed 

participants throughout the first 12 

months following placement to 

determine if they have the necessary 

supportive services to remain in the job. 

§ 641.550 What responsibility do grantees/ 

sub-recipients have to place participants in 

unsubsidized employment? 

Because one goal of the program is to 

foster economic self-sufficiency, and 

because the SCSEP limits the amount of 

time a participant can remain in the 

program, grantees and sub-recipients 

must make every effort to place 

participants in unsubsidized 

employment. Grantees/sub-recipients 

are responsible for working with 

participants to ensure that the 

participants are receiving services and 

taking actions designed to help them 

achieve this goal. Grantees/subrecipients must contact private and 

public employers directly or through the 

One-Stop Delivery System to develop or 

identify suitable unsubsidized 

employment opportunities. They must 

also encourage host agencies to assist 

participants in their transition to 

unsubsidized employment, including 

unsubsidized employment with the host 

agency. 

§ 641.565 What policies govern the 

provision of wages and benefits to 

participants? 

(a) Wages. (1)(i) Grantees/subrecipients must pay participants the 

highest applicable required wage for 

time spent in orientation, training, and 

community service employment 

assignments. 

(ii) SCSEP participants may be paid 

the highest applicable required wage 

while receiving intensive services. 

(2) The highest applicable required 

wage is either the minimum wage 

applicable under the Fair Labor 

Standards Act of 1938; the State or local 

minimum wage for the most nearly 

comparable covered employment; or the 

prevailing rate of pay for persons 

employed in similar public occupations 

by the same employer. 

(3) Grantees/sub-recipients must make 

any adjustments to minimum wage rates 

payable to participants as may be 

required by Federal, State, or local 

statute during the grant term. 

(b) Benefits. (1) Required benefits. 

Except as provided in paragraph (b)(2) 

of this section, grantees/sub-recipients 

must ensure that participants receive 

such benefits as are required by law. 

(i) Grantees/sub-recipients must 

provide benefits uniformly to all 

participants within a project or 

subproject, unless the Department 

agrees to waive this provision due to a 

determination that such a waiver is in 

the best interests of applicants, 

participants, and project administration. 

(ii) Grantees/sub-recipients must offer 

participants the opportunity to receive 

physical examinations annually. 

(A) Physical examinations are a 

benefit, and not an eligibility criterion. 

The examining physician must provide, 

to participants only, a written report of 

the results of the examination. 

Participants may, at their option, 

provide the grantee or sub-recipient 

with a copy of the report. 

(B) Participants may choose not to 

accept the physical examination. In that 

case, the grantee or sub-recipient must 

document this refusal, through a signed 

statement or other means, within 60 

workdays after commencement of the 

community service employment 

assignment. Each year thereafter, 

grantees and sub-recipients must offer 

the physical examination and document 

the offer and any participant’s refusal. 

(C) Grantees/sub-recipients may use 

SCSEP funds to pay the costs of 

physical examinations. 

(iii) When participants are not 

covered by the State workers’

compensation law, the grantee or subrecipient must provide participants with 

workers’ compensation benefits equal to 

those provided by law for covered 

employment. OAA section 504(b). 

(iv) If required by State law, grantees/ 

sub-recipients must provide 

unemployment compensation coverage 

for participants. 

(v) Grantees/sub-recipients must 

provide compensation for scheduled 

work hours during which a host 

agency’s business is closed for a Federal 

holiday. 

(vi) Grantees/sub-recipients must 

provide necessary sick leave, whether 

paid or unpaid, that is not part of an 

accumulated sick leave program. 

(2) Prohibited wage and benefits costs. 

(i) Participants may not carry over 

allowable benefits (including sick leave) 

from one Program Year to the next; 

(ii) Grantees/sub-recipients may not 

provide payment or otherwise 

compensate participants for unused 

benefits such as sick leave or holidays; 

(iii) Grantees/sub-recipients may not 

use SCSEP funds to cover costs 

associated with the following 

participant benefits: 

(A) Retirement. Grantees/subrecipients may not use SCSEP funds to 

provide contributions into a retirement 

system or plan, or to pay the cost of 

pension benefits for program 

participants. 

(B) Annual leave. 

(C) Accumulated sick leave. 

(D) Bonuses. 

(OAA sec. 502(c)(6)(A)(i)). 

§ 641.570 Is there a time limit for 

participation in the program? 

(a) Individual Time Limit. (1) Eligible 

individuals may participate in the 

program for a maximum duration of 48 

months in the aggregate (whether or not 

consecutive), from the later of July 1, 

2007, or the date of the individual’s 

enrollment in the program. 

(2) At the time of enrollment, the 

grantee/sub-recipient must inform the 

participant of the time limit and the 

possible extension, and the grantee/subrecipient must provide for a system to 

transition participants to unsubsidized 

employment or other assistance before 

the maximum enrollment duration has 

expired. Provisions for transition must 

be reflected in the participant’s IEP. 

(3) Pursuant to a request from a 

grantee/sub-recipient, the Department 

will authorize an extension for 

individuals who meet the criteria in 

paragraph (b) of this section. 

Notwithstanding any individual 

extensions granted, grantees/subrecipients must ensure that projects do 

not exceed the overall average 

participation cap for all participants, as 

described in paragraph (c) of this 

section. 

(b) Increased periods of individual 

participation. Pursuant to a request by 

a grantee, the Department will authorize 

a one-time increased period of 

participation up to an additional 12 

months for individuals who: 

(1) Have a severe disability; 

(2) Are frail or are age 75 or older; 

(3) Meet the eligibility requirements 

related to age for, but do not receive, 

benefits under title II of the Social 

Security Act (42 U.S.C. 401 et seq.); 

(4) Live in an area with persistent 

unemployment and are individuals with 

severely limited employment prospects; 

or 

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(5) Have limited English proficiency 

or low literacy skills. 

(c) Average participation cap. (1) 

Notwithstanding any individual 

extension authorized pursuant to 

paragraph (b) of this section, each 

grantee must manage its SCSEP project 

in such a way that the grantee does not 

exceed an average participation cap for 

all participants of 27 months (in the 

aggregate). 

(2) A grantee may request, and the 

Department may authorize, an extended 

average participation period of up to 36 

months (in the aggregate) for a particular 

project area in a given Program Year if 

the Department determines that 

extenuating circumstances exist to 

justify an extension, due to one more of 

the following factors: 

(i) High rates of unemployment or of 

poverty or participation in the program 

of block grants to States for temporary 

assistance for needy families established 

under part A of title IV of the Social 

Security Act, in the areas served by a 

grantee, relative to other areas of the 

State involved or Nation; 

(ii) Significant downturns in the areas 

served by the grantee or in the national 

economy; 

(iii) Significant numbers or 

proportions of participants with one or 

more barriers to employment, including 

‘‘most-in-need’’ individuals described in 

§ 641.710(a)(6), served by a grantee 

relative to such numbers or proportions 

for grantees serving other areas of the 

State or Nation; 

(iv) Changes in Federal, State, or local 

minimum wage requirements; or 

(v) Limited economies of scale for the 

provision of community service 

employment and other authorized 

activities in the areas served by the 

grantee. 

(3) For purposes of the average 

participation cap, each grant will be 

considered to be one project. 

(d) Authorized break in participation. 

On occasion a participant takes an 

authorized break in participation from 

the program, such as a formal leave of 

absence necessitated by personal 

circumstances or a break caused because 

a suitable community service 

employment assignment is not 

available. Such an authorized break, if 

taken pursuant to a formal grantee 

policy allowing such breaks and 

formally entered into the SCSEP 

Performance and Results Quarterly 

Performance Reporting (SPARQ) system, 

will not count toward the individual 

time limit described in paragraph (a) or 

the average participation cap described 

in paragraph (c). 

(e) Administrative guidance. The 

Department will issue administrative 

guidance detailing the process by which 

a grantee may request an increased 

period of participation for a 

participant(s), and the process by which 

a grantee may request an extension of 

the average participation cap. 

(f) Grantee authority. Grantees may 

limit the time of participation for 

individuals to less than the 48 months 

described in paragraph (a) of this 

section, if the grantee uniformly applies 

the lower participation limit, and if the 

grantee submits a description of the 

lower participation limit policy in its 

grant application. (OAA secs. 

502(b)(1)(C), 518(a)(3)(B)). 

§ 641.575 May a grantee/sub-recipient 

establish a limit on the amount of time its 

participants may spend at each host 

agency? 

Yes, grantees/sub-recipients may 

establish limits on the amount of time 

that participants spend at a particular 

host agency, and are encouraged to 

rotate participants among different host 

agencies, or to different assignments 

within the same host agency, as such 

rotations may increase participants’

skills development and employment 

opportunities. Such limits are 

established in the grant agreement, as 

approved by the Department, and must 

be consistent with the participants’

IEPs. Host agency rotations have no 

effect on either the individual 

participation limit or the average 

participation cap (see § 641.570). 

§ 641.577 Is there a limit on community 

service employment assignment hours? 

Yes. Each participant’s community 

service employment assignment must 

not exceed 1,300 hours during a 

Program Year. The 1,300 hours includes 

all paid hours directly related to the 

community service employment 

assignment, including any hours of 

scheduled work during a Federal 

holiday and any hours of compensated 

or uncompensated leave. Hours spent by 

a participant in SCSEP orientation and 

training do not count toward the 1,300 

hour limit. 

§ 641.580 Under what circumstances may 

a grantee/sub-recipient terminate a 

participant? 

(a) If, at any time, a grantee or subrecipient determines that a participant 

was incorrectly declared eligible as a 

result of false information knowingly 

given by that individual, the grantee/ 

sub-recipient must give the participant 

immediate written notice explaining the 

reason(s) for termination and 

immediately terminate the participant. 

(b) If, during eligibility verification 

under § 641.505, a grantee/sub-recipient 

finds a participant to be no longer 

eligible for enrollment, the grantee/subrecipient must give the participant 

written notice explaining the reason(s) 

for termination within 30 days, and 

must terminate the participant 30 days 

after the participant receives the notice. 

(c) If, at any time, the grantee/subrecipient determines that it incorrectly 

determined a participant to be eligible 

for the program through no fault of the 

participant, the grantee/sub-recipient 

must give the participant immediate 

written notice explaining the reason(s) 

for termination and must terminate the 

participant 30 days after the participant 

receives the notice. 

(d) A grantee/sub-recipient may 

terminate a participant for cause. In 

doing so, the grantee/sub-recipient must 

give the participant written notice 

explaining the reason(s) for termination. 

Grantees must include their policies 

concerning for-cause terminations in the 

grant application. 

(e) A grantee/sub-recipient may 

terminate a participant if the participant 

refuses to accept a reasonable number of 

job offers or referrals to unsubsidized 

employment consistent with the SCSEP 

IEP and there are no extenuating 

circumstances that would hinder the 

participant from moving to 

unsubsidized employment. The grantee/ 

sub-recipient must give the participant 

written notice explaining the reason(s) 

for termination and must terminate the 

participant 30 days after the participant 

receives the notice. 

(f) When a grantee/sub-recipient 

makes an unfavorable determination of 

enrollment eligibility under paragraphs 

(b) and (c) of this section, it should refer 

the individual to other potential sources 

of assistance, such as the One-Stop 

Delivery System. When a grantee/subrecipient terminates a participant under 

paragraphs (d) and (e) of this section, it 

may refer the individual to other 

potential sources of assistance, such as 

the One-Stop Delivery System. 

(g) Grantees and sub-recipients must 

provide each participant at the time of 

enrollment with a written copy of its 

policies for terminating a participant for 

cause or otherwise, and must verbally 

review those policies with each 

participant. 

(h) Any termination, as described in 

paragraphs (a) through (e) of this 

section, must be consistent with 

administrative guidelines issued by the 

Department, and the termination must 

be subject to the applicable grievance 

procedures described in § 641.910. 

(i) Participants may not be terminated 

from the program solely on the basis of 

their age. Grantees/sub-recipients may 

not impose an upper age limit for 

participation in the SCSEP. 

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§ 641.585 What is the employment status 

of SCSEP participants? 

(a) Participants are not considered 

Federal employees solely as a result of 

their participation in the SCSEP. (OAA 

sec. 504(a)). 

(b) Grantees must determine whether 

or not a participant qualifies as an 

employee of the grantee, sub-recipient, 

local project, or host agency, under 

applicable law. Responsibility for this 

determination rests with the grantee 

even when a Federal agency is a grantee 

or host agency. 

Subpart F—Pilot, Demonstration, and 

Evaluation Projects 

§ 641.600 What is the purpose of the pilot, 

demonstration, and evaluation projects 

authorized under section 502(e) of the 

OAA? 

The purpose of the pilot, 

demonstration, and evaluation projects 

authorized under section 502(e) of the 

OAA is to develop and implement 

techniques and approaches, and to 

demonstrate the effectiveness of these 

techniques and approaches, in 

addressing the employment and training 

needs of individuals eligible for SCSEP. 

§ 641.610 How are pilot, demonstration, 

and evaluation projects administered? 

The Department may enter into 

agreements with States, public agencies, 

nonprofit private organizations, or 

private business concerns, as may be 

necessary, to conduct pilot, 

demonstration, and evaluation projects. 

§ 641.620 How may an organization apply 

for pilot, demonstration, and evaluation 

project funding? 

Organizations applying for pilot, 

demonstration, and evaluation project 

funding must follow the instructions 

issued by the Department. 

§ 641.630 What pilot, demonstration, and 

evaluation project activities are allowable 

under section 502(e)? 

Allowable pilot, demonstration and 

evaluation projects include: 

(a) Activities linking businesses and 

eligible individuals, including activities 

providing assistance to participants 

transitioning from subsidized activities 

to private sector employment; 

(b) Demonstration projects and pilot 

projects designed to: 

(1) Attract more eligible individuals 

into the labor force; 

(2) Improve the provision of services 

to eligible individuals under One-Stop 

Delivery Systems established under title 

I of WIA; 

(3) Enhance the technological skills of 

eligible individuals; and 

(4) Provide incentives to SCSEP 

grantees for exemplary performance and 

incentives to businesses to promote 

their participation in the SCSEP; 

(c) Demonstration projects and pilot 

projects, as described in paragraph (b) of 

this section, for workers who are older 

individuals (but targeted to eligible 

individuals) only if such demonstration 

projects and pilot projects are designed 

to assist in developing and 

implementing techniques and 

approaches in addressing the 

employment and training needs of 

eligible individuals; 

(d) Provision of training and technical 

assistance to support a SCSEP project; 

(e) Dissemination of best practices 

relating to employment of eligible 

individuals; and 

(f) Evaluation of SCSEP activities. 

§ 641.640 Should pilot, demonstration, and 

evaluation project entities coordinate with 

SCSEP grantees/sub-recipients, including 

area agencies on aging? 

(a) To the extent practicable, the 

Department will provide an 

opportunity, prior to the development of 

a demonstration or pilot project, for the 

appropriate area agency on aging to 

submit comments on such a project in 

order to ensure coordination of SCSEP 

activities with activities carried out 

under this subpart. 

(b) To the extent practicable, entities 

carrying out pilot, demonstration, and 

evaluation projects must consult with 

appropriate area agencies on aging and 

with other appropriate agencies and 

entities to promote coordination of 

SCSEP and pilot, demonstration, and 

evaluation activities. (OAA sec. 502(e)). 

8. Revise subparts H and I of part 641 

to read as follows: 

Subpart H—Administrative Requirements 

Sec. 

641.800 What uniform administrative 

requirements apply to the use of SCSEP 

funds? 

641.803 What is program income? 

641.806 How must SCSEP program income 

be used? 

641.809 What non-Federal share (matching) 

requirements apply to the use of SCSEP 

funds? 

641.812 What is the period of availability of 

SCSEP funds? 

641.815 May the period of availability be 

extended? 

641.821 What audit requirements apply to 

the use of SCSEP funds? 

641.824 What lobbying requirements apply 

to the use of SCSEP funds? 

641.827 What general nondiscrimination 

requirements apply to the use of SCSEP 

funds? 

641.833 What policies govern political 

patronage? 

641.836 What policies govern political 

activities? 

641.839 What policies govern union 

organizing activities? 

641.841 What policies govern nepotism? 

641.844 What maintenance of effort 

requirements apply to the use of SCSEP 

funds? 

641.847 What uniform allowable cost 

requirements apply to the use of SCSEP 

funds? 

641.850 Are there other specific allowable 

and unallowable cost requirements for 

the SCSEP? 

641.853 How are costs classified? 

641.856 What functions and activities 

constitute costs of administration? 

641.859 What other special rules govern the 

classification of costs as administrative 

costs or programmatic activity costs? 

641.861 Must SCSEP recipients provide 

funding for the administrative costs of 

sub-recipients? 

641.864 What functions and activities 

constitute programmatic activity costs? 

641.867 What are the limitations on the 

amount of SCSEP administrative costs? 

641.870 Under what circumstances may the 

administrative cost limitation be 

increased? 

641.873 What minimum expenditure levels 

are required for participant wages and 

benefits? 

641.874 What conditions apply to a SCSEP 

grantee request to use additional funds 

for training and supportive service costs? 

641.876 When will compliance with cost 

limitations and minimum expenditure 

levels be determined? 

641.879 What are the financial and 

performance reporting requirements for 

recipients? 

641.881 What are the SCSEP recipient’s 

responsibilities relating to awards to subrecipients? 

641.884 What are the grant closeout 

procedures? 

Subpart I—Grievance Procedures and 

Appeals Process 

641.900 What appeal process is available to 

an applicant that does not receive a 

grant? 

641.910 What grievance procedures must 

grantees make available to applicants, 

employees, and participants? 

641.920 What actions of the Department 

may a grantee appeal and what 

procedures apply to those appeals? 

641.930 Is there an alternative dispute 

resolution process that may be used in 

place of an OALJ hearing? 

Subpart H—Administrative 

Requirements 

§ 641.800 What uniform administrative 

requirements apply to the use of SCSEP 

funds? 

(a) SCSEP recipients and subrecipients must follow the uniform 

administrative requirements and 

allowable cost requirements that apply 

to their type of organization. (OAA sec. 

503(f)(2)). 

(b) Governments, State, local, and 

Indian tribal organizations, that receive 

SCSEP funds under grants or 

cooperative agreements must follow the 

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common rule implementing OMB 

Circular A–102, ‘‘Grants and 

Cooperative Agreements with State and 

Local Governments’’ (10/07/1994) 

(further amended 08/29/1977), codified 

at 29 CFR part 97. 

(c) Nonprofit and commercial 

organizations, institutions of higher 

education, hospitals, other nonprofit 

organizations, and commercial 

organizations that receive SCSEP funds 

under grants or cooperative agreements, 

must follow the common rule 

implementing OMB Circular A–110, 

codified at 29 CFR part 95. 

§ 641.803 What is program income? 

Program income, as described in 29 

CFR 97.25 (State and local governments) 

and 29 CFR 95.2(bb) (non-profit and 

commercial organizations), is income 

earned by the recipient or sub-recipient 

during the grant period that is directly 

generated by an allowable activity 

supported by grant funds or earned as 

a result of the award of grant funds. 

Program income includes income 

earned from license fees and royalties 

for copyrighted material, patents, patent 

applications, trademarks, and 

inventions produced under an award. 

(See 29 CFR 95.24(e) (non-profit and 

commercial organizations) and 29 CFR 

97.25(e) (State and local governments)). 

Costs of generating SCSEP program 

income may be deducted from gross 

income received by SCSEP recipients 

and sub-recipients to determine SCSEP 

program income earned or generated 

provided these costs have not been 

charged to the SCSEP. 

§ 641.806 How must SCSEP program 

income be used? 

(a) SCSEP recipients that earn or 

generate program income during the 

grant period must add the program 

income to the Federal and non-Federal 

funds committed to the SCSEP and must 

use it for the program, during the grant 

period in which it was earned, as 

provided in 29 CFR 95.24(a) (non-profit 

and commercial organizations) or 29 

CFR 97.25(g) (2) (State and local 

governments), as applicable. 

(b) Recipients that continue to receive 

a SCSEP grant from the Department 

must spend program income earned or 

generated from SCSEP-funded activities 

after the end of the grant period for 

SCSEP purposes in the Program Year it 

was received. 

(c) Recipients that do not continue to 

receive a SCSEP grant from the 

Department must remit unexpended 

program income earned or generated 

during the grant period from SCSEP 

funded activities to the Department after 

the end of the grant period. These 

recipients have no obligation to the 

Department for program income earned 

after the end of the grant period. 

§ 641.809 What non-Federal share 

(matching) requirements apply to the use of 

SCSEP funds? 

(a) The Department will pay no more 

than 90 percent of the total cost of 

activities carried out under a SCSEP 

grant. (OAA sec. 502(c)(1)). 

(b) All SCSEP recipients, including 

Federal agencies if there is no statutory 

exemption, must provide or ensure that 

at least 10 percent of the total cost of 

activities carried out under a SCSEP 

grant (non-Federal share of costs) 

consists of allowable costs paid for with 

non-Federal funds, except as provided 

in paragraphs (e) and (f) of this section. 

(c) Recipients must determine the 

non-Federal share of costs in accordance 

with 29 CFR 97.24 for governmental 

units, or 29 CFR 95.23 for nonprofit and 

commercial organizations. 

(d) The non-Federal share of costs 

may be provided in cash, or in-kind, or 

a combination of the two. (OAA sec. 

502(c)(2)). 

(e) A recipient may not require a subrecipient or host agency to provide nonFederal resources for the use of the 

SCSEP project as a condition of entering 

into a sub-recipient or host relationship. 

This does not preclude a sub-recipient 

or host agency from voluntarily 

contributing non-Federal resources for 

the use of the SCSEP project. 

(f) The Department may pay all of the 

costs of activities in an emergency or 

disaster project or a project in an 

economically distressed area. (OAA sec. 

502(c)(1)). 

§ 641.812 What is the period of availability 

of SCSEP funds? 

(a) Except as provided in § 641.815, 

recipients must expend SCSEP funds 

during the Program Year for which they 

are awarded (July 1–June 30). (OAA sec. 

515(b)). 

(b) SCSEP recipients must ensure that 

no sub-agreement provides for the 

expenditure of any SCSEP funds before 

July 1 of the grant year, or after the end 

of the grant period, except as provided 

in § 641.815. 

§ 641.815 May the period of availability be 

extended? 

SCSEP recipients may request in 

writing, and the Department may grant, 

an extension of the period during which 

SCSEP funds may be obligated or 

expended. SCSEP recipients requesting 

an extension must justify that an 

extension is necessary. (OAA sec. 

515(b)). The Department will notify 

recipients in writing of the approval or 

disapproval of any such requests. 

§ 641.821 What audit requirements apply 

to the use of SCSEP funds? 

(a) Recipients and sub-recipients 

receiving Federal awards of SCSEP 

funds must follow the audit 

requirements in paragraphs (b) and (c) 

of this section that apply to their type 

of organization. As used here, Federal 

awards of SCSEP funds include Federal 

financial assistance and Federal costreimbursement contracts received 

directly from the Department or 

indirectly under awards by SCSEP 

recipients or higher-tier sub-recipients. 

(OAA sec. 503(f)(2)). 

(b) All governmental and nonprofit 

organizations that are recipients or subrecipients must follow the audit 

requirements of OMB Circular A–133. 

These requirements are codified at 29 

CFR parts 96 and 99 and referenced in 

29 CFR 97.26 for governmental 

organizations; and in 29 CFR 95.26 for 

institutions of higher education, 

hospitals, and other nonprofit 

organizations. 

(c)(1) The Department is responsible 

for audits of SCSEP recipients that are 

commercial organizations. 

(2) Commercial organizations that are 

sub-recipients under the SCSEP and that 

expend more than the minimum level 

specified in OMB Circular A–133 

($500,000, for fiscal years ending after 

December 31, 2003) must have either an 

organization-wide audit or a programspecific financial and compliance audit 

conducted in accordance with OMB 

Circular A–133. 

§ 641.824 What lobbying requirements 

apply to the use of SCSEP funds? 

SCSEP recipients and sub-recipients 

must comply with the restrictions on 

lobbying codified in the Department’s 

regulations at 29 CFR part 93. (Also 

refer to § 641.850(c), ‘‘Lobbying costs.’’) 

§ 641.827 What general nondiscrimination 

requirements apply to the use of SCSEP 

funds? 

(a) SCSEP recipients, sub-recipients, 

and host agencies are required to 

comply with the nondiscrimination 

provisions codified in the Department’s 

regulations at 29 CFR parts 31 and 32 

and the provisions regarding the equal 

treatment of religious organizations at 

29 CFR part 2 subpart D. 

(b) Recipients and sub-recipients of 

SCSEP funds are required to comply 

with the nondiscrimination provisions 

codified in the Department’s regulations 

at 29 CFR part 37 if: 

(1) The recipient: 

(i) Is a One-Stop partner listed in 

section 121(b) of WIA, and 

(ii) Operates programs and activities 

that are part of the One-Stop Delivery 

System established under WIA; or 

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(2) The recipient otherwise satisfies 

the definition of ‘‘recipient’’ in 29 CFR 

37.4. 

(c) Recipients must ensure that 

participants are provided informational 

materials relating to age discrimination 

and/or their rights under the Age 

Discrimination in Employment Act of 

1975 that are distributed to recipients by 

the Department pursuant to section 

503(b)(3) of the OAA. 

(d) Questions about, or complaints 

alleging a violation of, the 

nondiscrimination requirements cited in 

this section may be directed or mailed 

to the Director, Civil Rights Center, U.S. 

Department of Labor, Room N–4123, 

200 Constitution Avenue, NW., 

Washington, DC 20210, for processing. 

(See § 641.910(d)). 

(e) The specification of any right or 

protection against discrimination in 

paragraphs (a) through (d) of this section 

must not be interpreted to exclude or 

diminish any other right or protection 

against discrimination in connection 

with a SCSEP project that may be 

available to any participant, applicant 

for participation, or other individual 

under any applicable Federal, State, or 

local laws prohibiting discrimination, or 

their implementing regulations. 

§ 641.833 What policies govern political 

patronage? 

(a) A recipient or sub-recipient must 

not select, reject, promote, or terminate 

an individual based on political services 

provided by the individual or on the 

individual’s political affiliations or 

beliefs. In addition, as indicated in 

§ 641.827(b), certain recipients and subrecipients of SCSEP funds are required 

to comply with WIA nondiscrimination 

regulations in 29 CFR part 37. These 

regulations prohibit discrimination on 

the basis of political affiliation or belief. 

(b) A recipient or sub-recipient must 

not provide funds to any sub-recipient, 

host agency, or other entity based on 

political affiliation. 

(c) SCSEP recipients must ensure that 

every entity that receives SCSEP funds 

through the recipient is applying the 

policies stated in paragraphs (a) and (b) 

of this section. 

§ 641.836 What policies govern political 

activities? 

(a) No project under title V of the 

OAA may involve political activities. 

SCSEP recipients must ensure 

compliance with the requirements and 

prohibitions involving political 

activities described in paragraphs (b) 

and (c) of this section. 

(b) State and local employees 

involved in the administration of SCSEP 

activities may not engage in political 

activities prohibited under the Hatch 

Act (5 U.S.C. chapter 15), including: 

(1) Seeking partisan elective office; 

(2) Using official authority or 

influence for the purpose of affecting 

elections, nominations for office, or 

fund-raising for political purposes. (5 

U.S.C. 1502). 

(c) SCSEP recipients must provide all 

persons associated with SCSEP 

activities with a written explanation of 

allowable and unallowable political 

activities under the Hatch Act. A notice 

explaining these allowable and 

unallowable political activities must be 

posted in every workplace in which 

SCSEP activities are conducted. The 

Department will provide the form and 

content of the notice and explanatory 

material by administrative issuance. 

(OAA sec. 502(b)(l)(P)). 

(d) SCSEP recipients must ensure 

that: 

(1) No SCSEP participants or staff 

persons engage in partisan or 

nonpartisan political activities during 

hours for which they are being paid 

with SCSEP funds. 

(2) No participants or staff persons 

engage in partisan political activities in 

which such participants or staff persons 

represent themselves as spokespersons 

for the SCSEP. 

(3) No participants are employed or 

out-stationed in the offices of a Member 

of Congress, a State or local legislator, 

or on the staff of any legislative 

committee. 

(4) No participants are employed or 

out-stationed in the immediate offices of 

any elected chief executive officer of a 

State or unit of general government, 

except that: 

(i) Units of local government may 

serve as host agencies for participants, 

provided that their assignments are nonpolitical; and 

(ii) While assignments may 

technically place participants in such 

offices, such assignments actually must 

be concerned with program and service 

activities and not in any way involved 

in political functions. 

(5) No participants are assigned to 

perform political activities in the offices 

of other elected officials. Placement of 

participants in such offices in nonpolitical assignments is permissible, 

however, provided that: 

(i) SCSEP recipients develop 

safeguards to ensure that participants 

placed in these assignments are not 

involved in political activities; and 

(ii) These safeguards are described in 

the grant agreement and are subject to 

review and monitoring by the SCSEP 

recipient and by the Department. 

§ 641.839 What policies govern union 

organizing activities? 

Recipients must ensure that SCSEP 

funds are not used in any way to assist, 

promote, or deter union organizing. 

§ 641.841 What policies govern nepotism? 

(a) SCSEP recipients must ensure that 

no recipient or sub-recipient hires, and 

no host agency serves as a worksite for, 

a person who works in a SCSEP 

community service employment 

assignment if a member of that person’s 

immediate family is engaged in a 

decision-making capacity (whether 

compensated or not) for that project, 

subproject, recipient, sub-recipient, or 

host agency. The Department may 

exempt worksites on Native American 

reservations and in rural areas from this 

requirement provided that adequate 

justification can be documented, such as 

that no other persons are eligible and 

available for participation in the 

program. 

(b) To the extent that an applicable 

State or local legal requirement 

regarding nepotism is more restrictive 

than this provision, SCSEP recipients 

must ensure that the more restrictive 

requirement is followed. 

(c) For purposes of this section, 

‘‘immediate family’’ means wife, 

husband, son, daughter, mother, father, 

brother, sister, son-in-law, daughter-inlaw, mother-in-law, father-in-law, 

brother-in-law, sister-in-law, aunt, 

uncle, niece, nephew, stepparent, 

stepchild, grandparent, or grandchild. 

§ 641.844 What maintenance of effort 

requirements apply to the use of SCSEP 

funds? 

(a) A community service employment 

assignment for a participant under title 

V of the OAA is permissible only when 

specific maintenance of effort 

requirements are met. 

(b) Each project funded under title V: 

(1) Must not reduce the number of 

employment opportunities or vacancies 

that would otherwise be available to 

individuals not participating in the 

program; 

(2) Must not displace currently 

employed workers (including partial 

displacement, such as a reduction in the 

hours of non-overtime work, wages, or 

employment benefits); 

(3) Must not impair existing contracts 

or result in the substitution of Federal 

funds for other funds in connection 

with work that would otherwise be 

performed; and 

(4) Must not employ or continue to 

employ any eligible individual to 

perform the same work or substantially 

the same work as that performed by any 

other individual who is on layoff. (OAA 

sec. 502(b)(1)(G)). 

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§ 641.847 What uniform allowable cost 

requirements apply to the use of SCSEP 

funds? 

(a) General. Unless specified 

otherwise in this part or the grant 

agreement, recipients and sub-recipients 

must follow the uniform allowable cost 

requirements that apply to their type of 

organization. For example, a local 

government sub-recipient receiving 

SCSEP funds from a nonprofit 

organization must use the allowable cost 

requirements for governmental 

organizations in OMB Circular A–87. 

The Department’s regulations at 29 CFR 

95.27 (nonprofit and commercial 

organizations) and 29 CFR 97.22 (State 

and local governments) identify the 

Federal principles for determining 

allowable costs that each kind of 

organization must follow. The 

applicable Federal principles for each 

kind of organization are described in 

paragraphs (b)(1) through (b)(5) of this 

section. (OAA sec. 503(f)(2)). 

(b) Allowable costs/cost principles. 

(1) Allowable costs for State, local, 

and Indian tribal government 

organizations must be determined under 

OMB Circular A–87, ‘‘Cost Principles 

for State, Local and Indian Tribal 

Governments.’’

(2) Allowable costs for nonprofit 

organizations must be determined under 

OMB Circular A–122, ‘‘Cost Principles 

for Non-Profit Organizations.’’

(3) Allowable costs for institutions of 

higher education must be determined 

under OMB Circular A–21, ‘‘Cost 

Principles for Educational Institutions.’’

(4) Allowable costs for hospitals must 

be determined in accordance with 

appendix E of 45 CFR part 74, 

‘‘Principles for Determining Costs 

Applicable to Research and 

Development Under Grants and 

Contracts with Hospitals.’’

(5) Allowable costs for commercial 

organizations and those nonprofit 

organizations listed in Attachment C to 

OMB Circular A–122 must be 

determined under the provisions of the 

Federal Acquisition Regulation (FAR), 

at 48 CFR part 31. 

§ 641.850 Are there other specific 

allowable and unallowable cost 

requirements for the SCSEP? 

(a) Yes, in addition to the generally 

applicable cost principles in 

§ 641.847(b), the cost principles in 

paragraphs (b) through (g) of this section 

apply to SCSEP grants. 

(b) Claims against the Government. 

For all types of entities, legal expenses 

for the prosecution of claims against the 

Federal Government, including appeals 

to an Administrative Law Judge, are 

unallowable. 

(c) Lobbying costs. In addition to the 

prohibition contained in 29 CFR part 93, 

SCSEP funds must not be used to pay 

any salaries or expenses related to any 

activity designed to influence legislation 

or appropriations pending before the 

Congress of the United States or any 

State legislature. (See § 641.824). 

(d) One-Stop Costs. Costs of 

participating as a required partner in the 

One-Stop Delivery System established 

in accordance with section 134(c) of the 

Workforce Investment Act of 1998 are 

allowable, provided that SCSEP services 

and funding are provided in accordance 

with the MOU required by the 

Workforce Investment Act and section 

502(b)(1)(O) of OAA, and costs are 

determined in accordance with the 

applicable cost principles. The costs of 

services provided by the SCSEP, 

including those provided by 

participants/enrollees, may comprise a 

portion or the total of a SCSEP project’s 

proportionate share of One-Stop costs. 

(e) Building repairs and acquisition 

costs. Except as provided in this 

paragraph and as an exception to the 

allowable cost principles in 

§ 641.847(b), no SCSEP funds may be 

used for the purchase, construction, or 

renovation of any building except for 

the labor involved in: 

(1) Minor remodeling of a public 

building necessary to make it suitable 

for use for project purposes; 

(2) Minor repair and rehabilitation of 

publicly used facilities for the general 

benefit of the community; and 

(3) Minor repair and rehabilitation by 

participants of housing occupied by 

persons with low incomes who are 

declared eligible for such services by 

authorized local agencies. 

(f) Accessibility and reasonable 

accommodation. Recipients and subrecipients may use SCSEP funds to meet 

their obligations under section 504 of 

the Rehabilitation Act of 1973, as 

amended, and the Americans with 

Disabilities Act of 1990, and any other 

applicable Federal disability 

nondiscrimination laws, to provide 

physical and programmatic accessibility 

and reasonable accommodation/ 

modifications for, and effective 

communications with, individuals with 

disabilities. (29 U.S.C. 794). 

(g) Participants’ benefit costs. 

Recipients and sub-recipients may use 

SCSEP funds for participant benefit 

costs only under the conditions set forth 

in § 641.565. 

§ 641.853 How are costs classified? 

(a) All costs must be classified as 

‘‘administrative costs’’ or 

‘‘programmatic activity costs.’’ (OAA 

sec. 502(c)(6)). 

(b) Recipients and sub-recipients must 

assign participants’ wage and benefit 

costs and other participant (enrollee) 

costs such as supportive services to the 

programmatic activity cost category. 

(See § 641.864). When a participant’s 

community service employment 

assignment involves functions whose 

costs are normally classified as 

administrative costs, compensation 

provided to the participants must be 

charged as programmatic activity costs 

instead of administrative costs, since 

participant wage and benefit costs are 

always charged to the programmatic 

activity cost category. 

§ 641.856 What functions and activities 

constitute administrative costs? 

(a) Administrative costs are that 

allocable portion of necessary and 

reasonable allowable costs of recipients 

and program operators that are 

associated with those specific functions 

identified in paragraph (b) of this 

section and that are not related to the 

direct provision of programmatic 

activities specified in § 641.864. These 

costs may be both personnel and nonpersonnel and both direct and indirect 

costs. 

(b) Administrative costs are the costs 

associated with: 

(1) Performing general administrative 

and coordination functions, including: 

(i) Accounting, budgeting, financial, 

and cash management functions; 

(ii) Procurement and purchasing 

functions; 

(iii) Property management functions; 

(iv) Personnel management functions; 

(v) Payroll functions; 

(vi) Coordinating the resolution of 

findings arising from audits, reviews, 

investigations, and incident reports; 

(vii) Audit functions; 

(viii) General legal services functions; 

(ix) Developing systems and 

procedures, including information 

systems, required for these 

administrative functions; 

(x) Preparing administrative reports; 

and 

(xi) Other activities necessary for 

general administration of government 

funds and associated programs. 

(2) Oversight and monitoring 

responsibilities related to administrative 

functions; 

(3) Costs of goods and services used 

for administrative functions of the 

program, including goods and services 

such as rental or purchase of equipment, 

utilities, office supplies, postage, and 

rental and maintenance of office space; 

(4) Travel costs incurred for official 

business in carrying out administrative 

activities or the overall management of 

the program; 

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(5) Costs of information systems 

related to administrative functions (for 

example, personnel, procurement, 

purchasing, property management, 

accounting, and payroll systems) 

including the purchase, systems 

development, and operating costs of 

such systems; and 

(6) Costs of technical assistance, 

professional organization membership 

dues, and evaluating results obtained by 

the project involved against stated 

objectives. (OAA sec. 502(c)(4)). 

§ 641.859 What other special rules govern 

the classification of costs as administrative 

costs or programmatic activity costs? 

(a) Recipients and sub-recipients must 

comply with the special rules for 

classifying costs as administrative costs 

or programmatic activity costs set forth 

in paragraphs (b) through (e) of this 

section. 

(b)(1) Costs of awards by recipients 

and program operators that are solely for 

the performance of their own 

administrative functions are classified 

as administrative costs. 

(2) Costs incurred by recipients and 

program operators for administrative 

functions listed in § 641.856(b) are 

classified as administrative costs. 

(3) Costs incurred by vendors and 

sub-recipients performing the 

administrative functions of recipients 

and program operators are classified as 

administrative costs. (See 29 CFR 99.210 

for a discussion of factors differentiating 

sub-recipients from vendors.) 

(4) Except as provided in paragraph 

(b)(3) of this section, all costs incurred 

by all vendors, and only those subrecipients below program operators, are 

classified as programmatic activity 

costs. (See 29 CFR 99.210 for a 

discussion of factors differentiating subrecipients from vendors.) 

(c) Personnel and related nonpersonnel costs of staff who perform 

both administrative functions specified 

in § 641.856(b) and programmatic 

services or activities must be allocated 

as administrative or programmatic 

activity costs to the benefiting cost 

objectives/categories based on 

documented distributions of actual time 

worked or other equitable cost 

allocation methods. 

(d) The allocable share of indirect or 

overhead costs charged to the SCSEP 

grant are to be allocated to the 

administrative and programmatic 

activity cost categories in the same 

proportion as the costs in the overhead 

or indirect cost pool are classified as 

programmatic activity or administrative 

costs. 

(e) Costs of the following information 

systems including the purchase, systems 

development and operating (e.g., data 

entry) costs are charged to the 

programmatic activity cost category: 

(1) Tracking or monitoring of 

participant and performance 

information; 

(2) Employment statistics information, 

including job listing information, job 

skills information, and demand 

occupation information; and 

(3) Local area performance 

information. 

§ 641.861 Must SCSEP recipients provide 

funding for the administrative costs of subrecipients? 

(a) Recipients and sub-recipients must 

obtain funding for administrative costs 

to the extent practicable from nonFederal sources. (OAA sec. 502(c)(5)). 

(b) SCSEP recipients must ensure that 

sufficient funding is provided for the 

administrative activities of subrecipients that receive SCSEP funding 

through the recipient. Each SCSEP 

recipient must describe in its grant 

application the methodology used to 

ensure that sub-recipients receive 

sufficient funding for their 

administrative activities. (OAA sec. 

502(b)(1)(R)). 

§ 641.864 What functions and activities 

constitute programmatic activity costs? 

Programmatic activity costs include, 

but are not limited to, the costs of the 

following functions: 

(a) Participant wages, such benefits as 

are required by law (such as workers’

compensation or unemployment 

compensation), the costs of physical 

examinations, compensation for 

scheduled work hours during which a 

host agency is closed for a Federal 

holiday, and necessary sick leave that is 

not part of an accumulated sick leave 

program, except that no amounts 

provided under the grant may be used 

to pay the cost of pension benefits, 

annual leave, accumulated sick leave, or 

bonuses, as described in § 641.565; 

(b) Outreach, recruitment and 

selection, intake, orientation, 

assessment, and preparation and 

updating of IEPs; 

(c) Participant training, as described 

in § 641.540, which may be provided 

prior to commencing or concurrent with 

a community service employment 

assignment, and which may be provided 

at a host agency, in a classroom setting, 

or utilizing other appropriate 

arrangements, which may include 

reasonable costs of instructors’ salaries, 

classroom space, training supplies, 

materials, equipment, and tuition; 

(d) Subject to the restrictions in 

§ 641.535(c), job placement assistance, 

including job development and job 

search assistance, job fairs, job clubs, 

and job referrals; and 

(e) Participant supportive services, to 

enable an individual to successfully 

participate in a SCSEP project, as 

described in § 641.545. (OAA sec. 

502(c)(6)(A)). 

§ 641.867 What are the limitations on the 

amount of SCSEP administrative costs? 

(a) Except as provided in paragraph 

(b), no more than 13.5 percent of the 

SCSEP funds received for a Program 

Year may be used for administrative 

costs. 

(b) The Department may increase the 

amount available for administrative 

costs to not more than 15 percent, in 

accordance with § 641.870. (OAA sec. 

502(c)(3)). 

§ 641.870 Under what circumstances may 

the administrative cost limitation be 

increased? 

(a) SCSEP recipients may request that 

the Department increase the amount 

available for administrative costs. The 

Department may honor the request if: 

(1) The Department determines that it 

is necessary to carry out the project; and 

(2) The recipient demonstrates that: 

(i) Major administrative cost increases 

are being incurred in necessary program 

components, including liability 

insurance, payments for workers’

compensation for staff, costs associated 

with achieving unsubsidized placement 

goals, and other operation requirements 

imposed by the Department; 

(ii) The number of community service 

employment assignment positions in the 

project or the number of minority 

eligible individuals participating in the 

project will decline if the amount 

available for paying the cost of 

administration is not increased; or 

(iii) The size of the project is so small 

that the amount of administrative costs 

incurred to carry out the project 

necessarily exceeds 13.5 percent of the 

grant amount. (OAA sec. 502(c)(3)). 

(b) A request by a recipient or 

prospective recipient for an increase in 

the amount available for administrative 

costs may be submitted as part of the 

grant application or as a separate 

submission at any time after the grant 

award. 

§ 641.873 What minimum expenditure 

levels are required for participant wages 

and benefits? 

(a) Except as provided in § 641.874, 

not less than 75 percent of the SCSEP 

funds provided under a grant from the 

Department must be used to pay for 

wages and benefits of participants as 

described in § 641.864(a). (OAA sec. 

502(c)(6)(B)). 

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(b) A SCSEP recipient is in 

compliance with this provision if at 

least 75 percent of the total award 

amount of SCSEP funds provided to the 

recipient was spent for wages and 

benefits, even if one or more subrecipients did not expend at least 75 

percent of their SCSEP sub-recipient 

award for wages and benefits. 

(c) A SCSEP grantee may submit to 

the Department a request for approval to 

use not less than 65 percent of the grant 

funds to pay wages and benefits 

pursuant to § 641.874. 

§ 641.874 What conditions apply to a 

SCSEP grantee request to use additional 

funds for training and supportive service 

costs? 

(a) A grantee may submit to the 

Department a request for approval—

(1) To use not less than 65 percent of 

the grant funds to pay the wages and 

benefits described in § 641.864(a); 

(2) To use the percentage of grant 

funds specified in § 641.867 to pay for 

administrative costs as described in 

§ 641.856; 

(3) To use the 10 percent of grant 

funds that would otherwise be devoted 

to wages and benefits under § 641.873 to 

provide participant training (as 

described in § 641.540(e)) and 

participant supportive services to enable 

a participant to successfully participate 

in a SCSEP project (as described in 

§ 641.545), in which case the grantee 

must provide (from the funds described 

in this paragraph) the subsistence 

allowance described in § 641.565(a) for 

those individual participants who are 

receiving training from the funds 

described in this paragraph, but may not 

use the funds described in this 

paragraph to pay for any administrative 

costs; and 

(4) To use the remaining grant funds 

to provide participant training, job 

placement assistance, participant 

supportive services, and outreach, 

recruitment and selection, intake, 

orientation and assessment. 

(b) In submitting the request the 

grantee must include in the request—

(1) A description of the activities for 

which the grantee will spend the grant 

funds described in paragraphs (a)(3) and 

(a)(4) of this section; 

(2) An explanation documenting how 

the provision of such activities will 

improve the effectiveness of the project, 

including an explanation concerning 

whether any displacement of eligible 

individuals or elimination of positions 

for such individuals will occur, 

information on the number of such 

individuals to be displaced and of such 

positions to be eliminated, and an 

explanation concerning how the 

activities will improve employment 

outcomes for individuals served, based 

on the assessment conducted pursuant 

to § 641.535(a)(2); and 

(3) A proposed budget and work plan 

for the activities, including a detailed 

description of the funds to be spent on 

the activities described in paragraphs 

(a)(3) and (a)(4) of this section. 

(c)(1) If a grantee wishes to amend an 

existing grant agreement to use 

additional funds for training and 

supportive service costs, the grantee 

must submit such a request not later 

than 90 days before the proposed date 

of implementation contained in the 

request. Not later than 30 days before 

the proposed date of implementation, 

the Department will approve, approve 

as modified, or reject the request, on the 

basis of the information included in the 

request. 

(2) If a grantee submits a request to 

use additional funds for training and 

supportive service costs in the grant 

application, the request will be accepted 

and processed as a part of the grant 

review process. 

(d) Grantees may apply this provision 

to individual sub-recipients but need 

not provide this opportunity to all their 

sub-recipients. 

§ 641.876 When will compliance with cost 

limitations and minimum expenditure levels 

be determined? 

The Department will determine 

compliance by examining expenditures 

of SCSEP funds. The cost limitations 

and minimum expenditure level 

requirements must be met at the time all 

such funds have been expended or the 

period of availability of such funds has 

expired, whichever comes first. 

§ 641.879 What are the financial and 

performance reporting requirements for 

recipients? 

(a) In accordance with 29 CFR 97.41 

(State and local governments) or 29 CFR 

95.52 (non-profit and commercial 

organizations), each SCSEP recipient 

must submit a SCSEP Financial Status 

Report (FSR, ETA Form 9130) in 

electronic format to the Department via 

the Internet within 45 days after the 

ending of each quarter of the Program 

Year. Each SCSEP recipient must also 

submit a final closeout FSR to the 

Department via the Internet within 90 

days after the end of the grant period. 

The Department will provide 

instructions for the preparation of this 

report. (OAA sec. 503(f)(3)). 

(1) Financial data must be reported on 

an accrual basis, and cumulatively by 

funding year of appropriation. Financial 

data may also be required on specific 

program activities. 

(2) If the SCSEP recipient’s 

accounting records are not normally 

kept on the accrual basis of accounting, 

the SCSEP recipient must develop 

accrual information through an analysis 

of the documentation on hand. 

(b) In accordance with 29 CFR 97.40 

(State and local governments) or 29 CFR 

95.51 (non-profit and commercial 

organizations), each SCSEP recipient 

must submit updated data on 

participants, host agencies, and 

employers in electronic format via the 

Internet within 30 days after the end of 

each of the first three quarters of the 

Program Year, on the last day of the 

fourth quarter of the Program Year, and 

within 90 days after the last day of the 

Program Year. Recipients wishing to 

correct data errors or omissions for their 

final Program Year report must do so 

within 90 days after the end of the 

Program Year. The Department will 

generate SCSEP Quarterly Progress 

Reports (QPRs), as well as the final QPR, 

as soon as possible after receipt of the 

data. (OAA sec. 503(f)(3)). 

(c) Each State agency receiving title V 

funds must annually submit an 

equitable distribution report of SCSEP 

positions by all recipients in the State. 

The Department will provide 

instructions for the preparation of this 

report. (OAA sec. 508). 

(d) Each SCSEP recipient must collect 

data and submit reports regarding the 

performance measures. See Subpart F. 

The Department will provide 

instructions detailing these measures 

and how recipients must prepare this 

report. 

(e) Each SCSEP recipient may be 

required to collect data and submit 

reports about the demographic 

characteristics of program participants. 

The Department will provide 

instructions detailing these measures 

and how recipients must prepare these 

reports. 

(f) Federal agencies that receive and 

use SCSEP funds under interagency 

agreements must submit project 

financial and progress reports in 

accordance with this section. Federal 

recipients must maintain the necessary 

records that support required reports 

according to instructions provided by 

the Department. (OAA sec. 503(f)(3)). 

(g) Recipients may be required to 

maintain records that contain any other 

information that the Department 

determines to be appropriate in support 

of any other reports that the Department 

may require. (OAA sec. 503(f)(3)). 

(h) Grantees submitting reports that 

cannot be validated or verified as 

accurately counting and reporting 

activities in accordance with the 

reporting instructions may be treated as 

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failing to submit reports, which may 

result in failing one of the responsibility 

tests outlined in § 641.430 and section 

514(d) of the OAA. 

§ 641.881 What are the SCSEP recipient’s 

responsibilities relating to awards to subrecipients? 

(a) Recipients are responsible for 

ensuring that all awards to subrecipients are conducted in a manner to 

provide, to the maximum extent 

practicable, full and open competition 

in accordance with the procurement 

procedures in 29 CFR 95.43 (non-profit 

and commercial organizations) and 29 

CFR 97.36 (State and local 

governments). 

(b) The SCSEP recipient is responsible 

for all grant activities, including the 

performance of SCSEP activities by subrecipients, and ensuring that subrecipients comply with the OAA and 

this part. (See also OAA sec. 514 and 

§ 641.430 of this part on responsibility 

tests). 

(c) Recipients must follow their own 

procedures for allocating funds to other 

entities. The Department will not grant 

funds to another entity on the 

recipient’s behalf. 

(d)(1) National grantees that receive 

grants to provide services in an area 

where a substantial population of 

individuals with barriers to employment 

exists must, in selecting sub-recipients, 

give special consideration to 

organizations (including former national 

grant recipients) with demonstrated 

expertise in serving such individuals. 

(OAA sec. 514(e)(2)). 

(2) For purposes of this section, the 

term ‘‘individuals with barriers to 

employment’’ means minority 

individuals, Indian individuals, 

individuals with greatest economic 

need, and most-in-need individuals. 

(OAA sec. 514(e)(1)). 

§ 641.884 What are the grant closeout 

procedures? 

SCSEP recipients must follow the 

grant closeout procedures at 29 CFR 

97.50 (State and local governments) or 

29 CFR 95.71 (non-profit and 

government organizations), as 

appropriate. The Department will issue 

supplementary closeout instructions to 

title V recipients as necessary.XXX 

Subpart I—Grievance Procedures and 

Appeals Process 

§ 641.900 What appeal process is available 

to an applicant that does not receive a 

grant? 

(a) An applicant for financial 

assistance under title V of the OAA that 

is dissatisfied because the Department 

has issued a notification that it has not 

awarded financial assistance, in whole 

or in part, to such applicant, may 

request that the Grant Officer provide an 

explanation for not awarding financial 

assistance to that applicant. The request 

must be filed within 10 days of the date 

of notification indicating that financial 

assistance would not be awarded. The 

Grant Officer must provide the 

protesting applicant with feedback 

concerning its proposal within 21 days 

of the protest. Applicants may appeal to 

the U.S. Department of Labor, Office of 

Administrative Law Judges (OALJ), 

within 21 days of the date of the Grant 

Officer’s feedback on the proposal, or 

within 21 days of the Grant Officer’s 

notification that financial assistance 

would not be awarded if the applicant 

does not request feedback on his 

proposal. The appeal may be for a part 

or the whole of a denial of funding. This 

appeal will not in any way interfere 

with the Department’s decisions to fund 

other organizations to provide services 

during the appeal period. 

(b) Failure to file an appeal within the 

21 days provided in paragraph (a) of this 

section constitutes a waiver of the right 

to a hearing. 

(c) A request for a hearing under this 

section must state specifically those 

issues in the Grant Officer’s notification 

upon which review is requested. Those 

provisions of the Grant Officer’s 

notification not specified for review, or 

the entire notification when no hearing 

has been requested within 21 days, are 

considered resolved and not subject to 

further review. 

(d) A request for a hearing must be 

transmitted by certified mail, return 

receipt requested, to the Chief 

Administrative Law Judge, U.S. 

Department of Labor, Suite 400 North, 

800 K Street, NW., Washington, DC 

20001, with one copy to the 

Departmental official who issued the 

determination. 

(e) The decision of the ALJ constitutes 

final agency action unless, within 21 

days of the decision, a party dissatisfied 

with the ALJ’s decision, in whole or in 

part, has filed a petition for review with 

the Administrative Review Board (ARB) 

(established under Secretary’s Order No. 

2–96, published at 61 FR 19978, May 3, 

1996), specifically identifying the 

procedure, fact, law, or policy to which 

exception is taken. The Department will 

deem any exception not specifically 

urged to have been waived. A copy of 

the petition for review must be sent to 

the opposing party at that time. 

Thereafter, the decision of the ALJ 

constitutes final agency action unless 

the ARB, within 30 days of the filing of 

the petition for review, notifies the 

parties that the case has been accepted 

for review. Any case accepted by the 

ARB must be decided within 180 days 

of acceptance. If not so decided, the 

decision of the ALJ constitutes final 

agency action. 

(f) The Rules of Practice and 

Procedures for Administrative Hearings 

Before the Office of Administrative Law 

Judges, set forth at 29 CFR part 18, 

govern the conduct of hearings under 

this section, except that: 

(1) The appeal is not considered as a 

complaint; and 

(2) Technical rules of evidence, such 

as the Federal Rules of Evidence and 

subpart B of 29 CFR part 18, will not 

apply to any hearing conducted under 

this section. However, rules designed to 

assure production of the most credible 

evidence available and to subject 

testimony to test by cross-examination 

will be applied when the ALJ 

conducting the hearing considers them 

reasonably necessary. The certified copy 

of the administrative file transmitted to 

the ALJ by the official issuing the 

notification not to award financial 

assistance must be part of the 

evidentiary record of the case and need 

not be moved into evidence. 

(g) The ALJ should render a written 

decision no later than 90 days after the 

closing of the record. 

(h) The remedies available are 

provided in § 641.470. 

(i) This section only applies to multiyear grant awards. 

§ 641.910 What grievance procedures 

must grantees make available to applicants, 

employees, and participants? 

(a) Each grantee must establish, and 

describe in the grant agreement, 

grievance procedures for resolving 

complaints, other than those described 

by paragraph (d) of this section, arising 

between the grantee, employees of the 

grantee, sub-recipients, and applicants 

or participants. 

(b) The Department will not review 

final determinations made under 

paragraph (a) of this section, except to 

determine whether the grantee’s 

grievance procedures were followed, 

and according to paragraph (c) of this 

section. 

(c) Allegations of violations of Federal 

law, other than those described in 

paragraph (d) of this section, which are 

not resolved within 60 days under the 

grantee’s procedures, may be filed with 

the Chief, Division of Adult Services, 

Employment and Training 

Administration, U.S. Department of 

Labor, 200 Constitution Avenue, NW., 

Washington, DC 20210. Allegations 

determined to be substantial and 

credible will be investigated and 

addressed. 

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(d) Questions about, or complaints 

alleging a violation of, the 

nondiscrimination requirements of title 

VI of the Civil Rights Act of 1964, 

section 504 of the Rehabilitation Act of 

1973, section 188 of the Workforce 

Investment Act of 1998 (WIA), or their 

implementing regulations, may be 

directed or mailed to the Director, Civil 

Rights Center, U.S. Department of Labor, 

Room N–4123, 200 Constitution 

Avenue, NW., Washington, DC 20210. 

In the alternative, complaints alleging 

violations of WIA section 188 may be 

filed initially at the grantee level. See 29 

CFR 37.71, 37.76. In such cases, the 

grantee must use complaint processing 

procedures meeting the requirements of 

29 CFR 37.70 through 37.80 to resolve 

the complaint. 

§ 641.920 What actions of the Department 

may a grantee appeal and what procedures 

apply to those appeals? 

(a) Appeals from a final disallowance 

of costs as a result of an audit must be 

made under 29 CFR 96.63. 

(b) Appeals of suspension or 

termination actions taken on the 

grounds of discrimination are processed 

under 29 CFR 31 or 29 CFR 37, as 

appropriate. 

(c) Protests and appeals of decisions 

not to award a grant, in whole or in part, 

will be handled under § 641.900. 

(d) Upon a grantee’s receipt of the 

Department’s final determination 

relating to costs (except final 

disallowance of costs as a result of an 

audit, as described in paragraph (a) of 

this section), payment, suspension or 

termination, or the imposition of 

sanctions, the grantee may appeal the 

final determination to the Department’s 

Office of Administrative Law Judges, as 

follows: 

(1) Within 21 days of receipt of the 

Department’s final determination, the 

grantee may transmit by certified mail, 

return receipt requested, a request for a 

hearing to the Chief Administrative Law 

Judge, United States Department of 

Labor, Suite 400 North, 800 K Street, 

NW., Washington, DC 20001 with a 

copy to the Department official who 

signed the final determination. 

(2) The request for hearing must be 

accompanied by a copy of the final 

determination, and must state 

specifically those issues of the 

determination upon which review is 

requested. Those provisions of the 

determination not specified for review, 

or the entire determination when no 

hearing has been requested within the 

21 days, are considered resolved and 

not subject to further review. 

(3) The Rules of Practice and 

Procedures for Administrative Hearings 

Before the Office of Administrative Law 

Judges, set forth at 29 CFR part 18, 

govern the conduct of hearings under 

this section, except that: 

(i) The appeal is not considered as a 

complaint; and 

(ii) Technical rules of evidence, such 

as the Federal Rules of Evidence and 

subpart B of 29 CFR part 18, will not 

apply to any hearing conducted under 

this section. However, rules designed to 

assure production of the most credible 

evidence available and to subject 

testimony to test by cross-examination 

will be applied when the 

Administrative Law Judge conducting 

the hearing considers them reasonably 

necessary. The certified copy of the 

administrative file transmitted to the 

Administrative Law Judge by the official 

issuing the final determination must be 

part of the evidentiary record of the case 

and need not be moved into evidence. 

(4) The Administrative Law Judge 

should render a written decision no 

later than 90 days after the closing of the 

record. In ordering relief, the ALJ may 

exercise the full authority of the 

Secretary under the OAA. 

(5) The decision of the ALJ constitutes 

final agency action unless, within 21 

days of the decision, a party dissatisfied 

with the ALJ’s decision, in whole or in 

part, has filed a petition for review with 

the ARB (established under Secretary’s 

Order No. 2–96), specifically identifying 

the procedure, fact, law, or policy to 

which exception is taken. The 

Department will deem any exception 

not specifically urged to have been 

waived. A copy of the petition for 

review must be sent to the opposing 

party at that time. Thereafter, the 

decision of the ALJ constitutes final 

agency action unless the ARB, within 30 

days of the filing of the petition for 

review, notifies the parties that the case 

has been accepted for review. Any case 

accepted by the ARB must be decided 

within 180 days of acceptance. If not so 

decided, the decision of the ALJ 

constitutes final agency action. 

§ 641.930 Is there an alternative dispute 

resolution process that may be used in 

place of an OALJ hearing? 

(a) Parties to a complaint that has 

been filed according to the requirements 

of § 641.920 (a), (c), and (d) may choose 

to waive their rights to an 

administrative hearing before the OALJ. 

Instead, they may choose to transfer the 

settlement of their dispute to an 

individual acceptable to all parties who 

will conduct an informal review of the 

stipulated facts and render a decision in 

accordance with applicable law. A 

written decision must be issued within 

60 days after submission of the matter 

for informal review. 

(b) Unless the parties agree in writing 

to extend the period, the waiver of the 

right to request a hearing before the 

OALJ will automatically be revoked if a 

settlement has not been reached or a 

decision has not been issued within the 

60 days provided in paragraph (a) of this 

section. 

(c) The decision rendered under this 

informal review process will be treated 

as the final agency decision. 

Signed at Washington, DC, this 30th day of 

July 2008. 

Brent R. Orrell, 

Deputy Assistant Secretary, Employment and 

Training Administration. 

[FR Doc. E8–17802 Filed 8–13–08; 8:45 am] 

BILLING CODE 4510–FN–P 

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