Part 669--National Farmworker Jobs Program Under Section 167

New Name of the MSFW (WIA Sec. 167 & JTPA Sec. 402) Training Program

On August 27, 1999, the Secretary's Migrant and Seasonal Farmworker Advisory Committee voted to name the job training portion of the workforce investment program for farmworkers, ``The National Farmworker Jobs Program (NFJP)''. We have incorporated the name in the definitions section, Sec. 660.300, to establish the NFJP as the farmworker training and assistance program that is a required One-Stop partner, and to distinguish the NFJP from the other workforce investment grants and activities funded under WIA section 167, such as the farmworker housing assistance grants. We have adopted the NFJP name in the portions of the 20 CFR Part 669 regulations that apply exclusively to the NFJP, and the NFJP name is used to identify the program in this preamble.

Introduction:

The comments we received about the regulations governing the operation of the National Farmworker Jobs Program under WIA section 167 primarily came from the current NFJP grantee community. The grantees submitted written comments during the formal comment period. Additionally, we consulted with the migrant and seasonal farmworker grantee community during ETA's Seasonal Farmworker Program National Conference and through the Secretary's Migrant and Seasonal Farmworker Program Advisory Committee. The comments reflect a substantial level of interest in how the regulations will impact the program as it implements under the Workforce Investment Act. The commenters seek to make the WIA regulations' impact on their ability to serve their farmworker customers under WIA as positive for the farmworkers as possible.

During these consultations, the NFJP grantees reported on their initial experiences in seeking partnership participation on Workforce Investment Boards in a number of states and local areas. The conditions these NFJP grantees encountered in a significant number of locations, as their state and local systems prepare for WIA implementation, are not conducive to their successful participation in the local One-Stop systems. As reported, the specific approach being taken by the representatives from some State and Local Boards fails to recognize the independent standing of the NFJP program partner as a party with which the Local Board must negotiate a Memorandum of Understanding. A required objective of the negotiations is to develop the arrangements, including costs or cost sharing, for making the services of the Local One-Stop Center available to the farmworker community the grantee serves. We expect the terms for participating in a local One-Stop service delivery system to develop rationally from the negotiations when the task is approached in good faith by both parties.

The grantees reported that they most often encountered an adverse negotiating climate in those States and local workforce investment areas where the States have exercised their authority under the alternative entity provisions of WIA sections 111(e) and 117(i) (20 CFR 661.210 and 661.330, respectively) by approving existing boards to serve as the State and/or Local Workforce Investment Boards under WIA. The grantees reported that some States and Boards exercise the alternative entity option in a manner that seriously impairs the NFJP grantee's ability to participate as a One-Stop partner by failing to provide an opportunity for good faith negotiation over the terms of the MOU. Consequently, the necessary arrangements for making the services of the local One-Stop Centers available to the farmworker customers served by the NFJP program grantee may be inadequately developed.

Through a motion unanimously passed by the Migrant and Seasonal Farmworker Employment and Training Advisory Committee, MSFW grantees communicated their concerns in a letter to Secretary Alexis Herman, dated September 27, 1999. In their letter, the grantees made specific recommendations for changes to the Interim Final Rule that may be summarized as follows: (1) To clarify that the composition of State Workforce Investment Boards must include representation from the required partner; (2) where the State Board is established under the alternative entity authority of WIA section 111(e), the States be advised through policy guidance that representation of farmworker and other subtitle D operators is the ``preferred response to the spirit of the Act''; and (3) that where a Local Workforce Board is an approved alternative entity, there must be a way to ensure that an ongoing role is actually provided to the required partners that are not members of the alternative entity, or provision for regulatory relief from the required partner obligations should be available for the national grantees. These issues and other comments are discussed below.

The NFJP and Workforce Investment System Governance:

As discussed above, the rules relating to the participation of NFJP grantees in the state and local workforce investment system generated many comments from the NFJP community. Below, we discuss issues relating to alternative entities and representation on State Boards and Local Boards. Similar issues are discussed in relation to the WIA section 168 Indian and Native American Program in the preamble to part 668, and for the workforce investment system in general in the preamble to part 661.

General Representational Question Regarding the NFJP and Appointments to State and Local Workforce Investment Boards:

The answer to the representational issue raised by the Farmworker Advisory Committee is found within the design of the One-Stop system and in the requirement that it be operated through the collaboration of the required partners. In order for a partner's participation to be viable, the regulations provide that the partner must have representation in the One-Stop system, either through Local Board representation or, when the partner is not represented on an alternative entity, through an on-going role in the workforce investment system.

We are not able to change the regulations to permit One-stop partner programs to choose whom they wish to represent them. Under WIA, the authority to select State and local board members lies with the Governor and local chief elected official, respectively. However, there are objective standards to ensure that all parties have a voice in the workforce investment system through bona fide representation. We expect that Local Workforce Investment Areas will follow the regulations and that States will ensure that all required partners have appropriate and effective representation on Local Boards. The final regulations attempt to facilitate this process by providing local areas with flexibility to find the right mix of representatives on the Local Board, while ensuring that the Board is an effective policy-making body by protecting the rights of all participants in the system and by stressing the requirement that members be individuals with optimum policy-making authority. We believe that the party who may most authoritatively speak for any partner program is an official of the partner in the State or local area or a representative acceptable to the partner. Consequently, for effective governance, official representation of the partner program on the State and Local Workforce Investment Boards will usually be by such a person.

As discussed in the preamble to 20 CFR part 661, above, changes have been made to the regulations governing board membership to clarify the role of One-stop partner representatives. For example, when there is more than one partner program grantee in a local area, 20 CFR 661.317 permits the appointment of one member to represent the group of grantees. This section also authorizes the chief elected official to solicit nominations from One-Stop partner program entities to facilitate the selection of such representatives. Of course, the chief elected official can opt to appoint more than one member to represent this program, if he or she so chooses and the selection criteria permit it. Also, as discussed below, we have added new regulations defining the terms ``optimal policy-making authority'' and ``expertise relating to [a] program, service or activity.''

State Board Representation for Required National Program Partners:

The Farmworker Advisory Committee commenters indicated that the Interim Final Rule is unclear as to whether representation on the State Boards is mandatory for all required partners such as the national program partners. As a result, the commenters reported that many States are claiming to represent the NFJP on the State's Workforce Investment Board through a non-partner surrogate, possibly a State agency representative having familiarity with farmworker or related agricultural issues, such as the State Monitor Advocate or a representative from the State's Farm Bureau.

Response: WIA section 111(b)(1)(C)(vi)(II) requires representation of the Title I partner on the State Board by its provision for ``the lead State agency officials with responsibility for the programs'' or ``a representative in the State with expertise relating to such [section 121(b)] program.'' WIA section 111(b)(2) requires that Board members who represent organizations, agencies or other entities be individuals with ``optimum policy-making authority'' within the program they represent. We believe WIA section 111(b)(1)(C)(vi)(II) is clear that a State agency official may only be appointed to represent those One-stop partner programs over which the official has ``responsibility.'' Where there is no such state agency official, an individual with expertise relating to the One-stop partner program must be appointed to represent the program. We have revised the regulations in part 661 to clarify this. Under new 20 CFR 661.203(b), the representation of a One-Stop partner program may be fulfilled by an official from the program partner, such as the NFJP grantee, or the Governor may appoint a representative in the State having ``documented expertise relating to'' the required partner program in the State. For purposes of the NFJP, we believe that documented expertise in the NFJP is shown by a minimum of two years combined managerial level experience in the operation of the NFJP or with an NFJP grantee association, and suggest that Governors adopt this standard when selecting representatives for the NFJP program.

Without the clarification that representation must be specific to the required partner program, appointments made to represent the interests of a required partner could include a person who may have no vested interest to represent the partner. This condition, which leaves the required national partners vulnerable to the consequences of unqualified representation, is what the NFJP grantees reported has been occurring initially in some States. An agency official or other individual representing a One-stop partner program must be an official with optimum policy-making authority in the organization he or she represents. As defined in 20 CFR 661.205(a), a representative with ``optimum policy making authority'' is an individual who can reasonably be expected to speak affirmatively on behalf of the entity he or she represents and to commit that entity to a chosen course of action.

Local Boards Authorized by Governors Under the Alternative Entity Provisions:

Commenters reported that the national programs, possibly without exception, are not included on a Local Workforce Investment Board where the Local Board is an alternative entity approved by the Governor under WIA section 117(i) (and under 20 CFR 661.330). This is to be expected because the composition of Local Boards approved under the alternative entity provision is derived from arrangements developed under JTPA, and the JTPA did not provide for the participation of the national programs in local workforce systems as now required by WIA. However, where the membership of the approved alternative entity does not provide for the representation required by WIA section 117(b), the Interim Final Rule at Sec. 661.330(b)(2) required Local Boards to ``ensure an ongoing role for any such group in the local workforce investment system'' which is not represented on the alternative entity Local Board.

The commenters found that the use of the word ``group'' in the Interim Final Rule, to be too generalized to make a clear requirement that the local workforce investment plan must provide an ongoing role for each unrepresented partner category whenever the membership requirement of WIA section 117(b)(2) is not matched by the incumbent membership of the alternative entity Local Board. At the National Conference, the commenters described instances of alternative entity boards refusing to negotiate MOU's with their NFJP program representatives. They pointed out that in the instance of a required partner, a Local Board cannot have established a working relationship or demonstrated that it has provided for an ongoing role for the unrepresented partner until it has attempted good faith negotiations of an MOU with that partner.

Response: To clarify that the required partners must be included among ``any such group,'' we have amended the local governance provision at 20 CFR 661.330(b)(2), by replacing that phrase with the phrase ``the unrepresented membership group,'' and by inserting the phrase ``including all the partners'' following ``each of the categories of required Local Board membership under WIA sec. 117(b).'' We have added a new paragraph (b)(3) to 20 CFR 661.330 which provides that the ongoing role requirement may be met by providing for ongoing consultations with an unrepresented One-stop partner program, such as the NFJP grantee operating in the State of local area. It also provides that, as part of its ``ongoing role'' responsibility, the alternative entity must undertake good faith negotiations with each unrepresented partner on the terms of its Memorandum of Understanding with the unrepresented partner. We have added a corollary requirement to the NFJP regulations by adding a new third sentence to Sec. 669.220(a) requiring the NFJP grantee to negotiate with the Local Board on the terms of its ongoing role in the workforce investment system.

Ensuring Fair Treatment When Negotiations Between a Partner and an Alternative Entity Board Fail:

In connection with the reports from NFJP grantees of the instances where they had been approached by State and Local Boards with non- negotiable terms or they were not offered an ongoing role, the grantee commenters expressed their concern over how such practices might influence the outcome of the next NFJP competition in the State. The commenters explained that where the State does not foster an environment supporting good faith negotiations between its State and Local Boards and the non-governmental NFJP grantee, the consequent nonparticipation by the NFJP grantee in the State's local workforce investment systems could be viewed unfavorably. The commenters were concerned that such a condition could result in an unfair rating of the incumbent non-State agency grantee.

Response: To promote competitions that are perceived as fair and merit-based in their treatment of all the eligible applicants, we have revised Sec. 669.200 by adding to the eligible applicant criteria in paragraph (a), the capacity to work effectively as a One-Stop system partner. The manner by which applicants may demonstrate this capacity is explained in a new paragraph (c). Where an incumbent grantee cannot demonstrate its capacity to work as a One-Stop partner, it will be found to lack the capacity to work as a One-Stop partner under Sec. 669.200(a)(4) unless the policies or actions of a Local Board that is established under the alternative entity provisions of WIA section 117(i) precluded such participation or contributed to the failure to reach agreement on an MOU. Wherever a Local Board is an alternative entity and fails to agree on terms for its MOU with the incumbent NFJP grantee, despite good faith negotiations on the part of the grantee, new paragraph (d) requires the Grant Officer to consider the impact of the policies and actions of the alternative entity board on the incumbent grantee's ability to participate in the One-Stop system and determine whether the policies or actions contributed to the failed participation of the incumbent NFJP grantee. Where the Grant Officer finds the local policy actions of an alternative entity Board precluded or failed to promote the participation of the incumbent NFJP grantee through an MOU, and the eligible applicant is a State-controlled entity, or is an entity represented on the alternative entity Board within the State, the Grant Officer must consider this fact when weighing the capacity of the competitors. Under this provision, the Grant Officer has the discretion to determine that the incumbent has the capacity to work effectively as a One-Stop partner. (The provisions of Sec. 669.200 (d)(1) apply only when the incumbent grantee does not have voting status in the alternative entity Local Board.)

The Judge Richey Court Order and the NFJP:

Several non-NFJP commenters raised a question about the relationship between the Judge Richey Court Order and the NFJP for serving migrant and seasonal farmworkers under WIA section 167. The comments basically inquire whether the NFJP is the program for farmworkers under WIA, and, as such, whether it brings to an end the system of monitor advocates created by the Order.

Response: These commenters seem to be unaware of the fact that the NFJP has been authorized continuously since its creation under the Economic Opportunity Act of 1964, and most recently under section 402 of JTPA. The NFJP supplements the workforce investment activities of the States with services that respond to the unique needs of farmworkers and their families. The NFJP is not a substitute for the other WIA services that must be made available to the farmworker job seekers in the State.

The States are required to make the services of the One-Stop systems in the State available to all job seekers in an equitable fashion. The services available from the Adult and Dislocated Workers program, from the Job Service, and from all other DOL-funded Workforce Investment System partners in the State, must be available to farmworkers in an equitable fashion, appropriate to their needs as job seekers as well as to their needs as farmworkers. Judge Richey's decision in the case brought against the Employment Service required the entire system to serve farmworkers equitably. That requirement has not changed under WIA.

Subpart A--Purpose, Definitions, and Federal Administration
Technical Corrections to Definitions:

The commenters noted several typographical errors and suggested clarifications in the definitions for the farmworker program in Sec. 669.110 of the Interim Final Rule. Response: The word ``be'' is missing from the definition of ``work experience'' in the Interim Final Rule and is added in the Final Rule. The definition of ``farmwork'' is corrected by removing the reference to the allocation formula. To correct for an omission, the definition of ``allowances'' is amended to permit receipt of allowance payments to participants enrolled in intensive services as well as in training services.

Add Definition of "Related Assistance":

Questions about the characterization of emergency assistance as a form of related assistance in Sec. 669.360 led some commenters to ask about the nature of related assistance and what other services it includes.

Response: We have added a definition of ``related assistance'' in Sec. 669.110. We discuss related assistance further in the discussion below of ``Classification of Emergency Assistance and Other Named Activities as Related Assistance.''

Eligibility:

There were a variety of comments asking that we define certain terms related to participant eligibility, in particular that we specify which dependents of a farmworker are eligible for NFJP assistance and that we add an adjustment for family-size to the definition of "disadvantaged'' for eligibility purposes. Other comments raised a variety of issues that include: clarification of the floating 12 month eligibility determination period; allowing for exceptions to the eligibility period for formerly institutionalized and hospitalized applicants; identifying the qualifying farmwork occupations and defining the farmwork thresholds--expressed in terms of income from farmwork and time employed in farmwork--that must be met by an applicant to qualify as a farmworker who is eligible for NFJP services. Response: While most requests for clarification of eligibility provisions will be addressed in the policy guidance on participant eligibility to be provided by the Division of Seasonal Farmworker Programs (DSFP), we have revised the definitions section in response to these comments. We have added a definition of ``dependent'' to the Final Rule to specify the family member relationships within the family of an eligible farmworker who qualify for receipt of assistance from the NFJP. Because of comments suggesting that the definition of "disadvantaged'' needed to be clarified to consider family size when making eligibility determinations, we have revised the definition of "disadvantaged'' by adding "adjusted for family size'' to be clear that the requirement to be economically disadvantaged, as determined under the poverty line or the Lower Living Standard Income Level, must take family size into account.

The comments about the clarification of the floating 12 month eligibility determination period, formerly institutionalized and hospitalized applicants, identifying the qualifying farmwork occupations and defining the farmwork thresholds topics will be addressed in policy guidance on participant eligibility. Grantees should refer to WIA nondiscrimination regulations, at 29 CFR 37.8, for guidance on whether an extension of the eligibility period for formerly institutionalized and hospitalized participants may be a form of reasonable accommodation.

The commenters raised a related concern that allowance be made for situations where a farmworker may be disqualified by the income of an abusive spouse and the family unit may technically remain in place. The commenters prefer that there be the flexibility available to accommodate such situations where appropriate.

Response: We have revised the definition of ``disadvantaged'' to recognize this concern by permitting consideration of circumstances where, due to known instability of the family unit, the inclusion of income from certain members would be inappropriate or unjust. We will provide policy guidance in consultation with the grantee partners to provide clarification for determining what is appropriate.

Additional Technical Corrections:

We have removed the definition of ``Department'' from Sec. 669.110 since it appears in 20 CFR 660.300. In addition, we have added a new paragraph (e) to Sec. 669.170 clarifying that the Department's regulations implementing the nondiscrimination provisions in WIA section 188 (29 CFR part 37) apply to NFJP grants.

Subpart B--MSFW Program's Service Delivery System

Clarification of the Areas of a State Where the NFJP Program Operates:

Commenters reported that there was confusion between the NFJP grantees and the States and Local Boards over the areas within the States where the NFJP grantee is a mandatory partner in the local One- Stop system. The grantees asked that the regulations be amended to clarify that the NFJP is a One-Stop partner in those local workforce investment areas where the NFJP operates by serving NFJP customers, not necessarily where there is ``field office'' presence, as provided in Sec. 669.220(a) of the Interim Final Rule.

Response: We have modified Sec. 669.220(a) to clarify that the NFJP grantee is a required One-Stop partner for the local workforce investment areas where it operates its NFJP program.

Subpart C--The National Farmworker Jobs Program Customers and Available Program Services

Classification of Emergency Assistance and Other Named Activities as Related Assistance:

Commenters questioned the consistency of classifying emergency assistance as a form of related assistance and of classifying certain non-occupational training activities as training services. Specifically, the commenters questioned the classification of ``workplace safety'' training and ``farmworker pesticide training'' as training services in Sec. 669.410(a)(2) of the Interim Final Rule. The commenters suggested that the designation of emergency assistance as a form of related assistance, without further clarifying the nature of related assistance, also contributed to the confusing organization of the service classifications.

Response: Pesticide safety instruction for farmworkers means educational instruction on health and safety information about agricultural pesticides. To protect their health, farmworkers need to have a general understanding of this information and a full appreciation of the seriousness of these hazzards when approved procedures are compromised or disregarded. The instruction typically includes information on the hazzards associated with pesticide exposure, the physical symptoms of toxic exposures, use of protective equipment and the importance of adhering to the manufacturer's instructions on when fields may be entered following application. These activities are considered supportive services under JTPA and are often provided under JTPA in a ``non-training related'' context that advance the farmworker's welfare as a farmworker. These types of farmworker ``training'' activities are very short term instructional services. They are not occupational skills training. Although they may be provided to participants enrolled in intensive services or training services, these activities are principally designed to assist farmworkers who are continuing to be employed in farmwork. We agree with the commenters that the classification of these non-skills- training activities as training services and the classification of emergency assistance as the only form of ``related assistance'' is confusing.

To resolve the confusing classifications, we have decided to combine the short-term, non-occupational skills training activities with supportive services such as emergency assistance. This will form a classification of congruous services that historically have been provided to MSFW's and that are uniquely required by them. To accomplish this, we have amended Sec. 669.310 to create a fourth basic service component of the NFJP service delivery strategy, called ``related assistance services.'' Related assistance consists of short- term forms of direct assistance to eligible farmworkers and their family members. The related assistance services are ones that stabilize farmworkers' agricultural employment. The activities include such services as emergency assistance, English language instruction, short duration basic education, workplace safety training, farmworker pesticide safety instruction, and farmworker housing development assistance. The services under related assistance encompass all the activities formerly classified under JTPA as ``services-only.'' Related assistance activities also include the non training-related ``enhancement-only'' services that were recognized under JTPA. These forms of assistance predominantly assist farmworkers to maintain their current lifestyle within the agricultural community by supporting them in their endeavors to remain employed in farmwork, thereby contributing collaterally to the economic stabilization of the agricultural community. Related assistance services also may be used to support farmworkers who have enrolled in either intensive or training services.

To establish the "related assistance services'' category, we made a number of changes. We added a definition of ``related assistance,'' as described above, in Sec. 669.110. Related assistance services are identified in Sec. 669.310 as one of the four basic components of the NFJP service delivery strategy. A new Sec. 669.430 is added to classify the activities that are included in related assistance services as described above. The description of training services in Sec. 669.410 has been revised to reflect that training services are activities focusing on occupational training, including basic education activity. A new Sec. 669.440 provides that related assistance services may be provided at any time there is a need identified for any eligible farmworker or family member. This includes farmworker youth enrolled in the MSFW Youth program. Accordingly, we added a clause to Sec. 669.680 clarifying that the related assistance services available under Sec. 669.430 are authorized under the MSFW Youth program. The need for related assistance may be documented by the grantee or in a statement by the farmworker that is acceptable to the grantee.

We also added a definition for "farmworker housing development assistance'' as requested by comments made at the National Conference. Finally, a technical correction is made by adding the word ``grantee'' to Sec. 669.360(b) where it was omitted from the Interim Final Rule.

Work Experience Classification:

We received a number of comments about the treatment of work experience in the Interim Final Rule. The comments addressed two issues. One issue is the authorization under Sec. 669.370(b)(3)(i) to develop arrangements with private for-profit businesses to host work experience activities. The commenters were concerned that this will lead to abuse of program resources by providing favored businesses with free, albeit unskilled, WIA-funded laborers. Commenters were also concerned that the authorization for unpaid work experience contained in the definition could lead to abuses.

Response: Unlike ETA's relationship with the States, the NFJP grantees are the program operators in most instances. After considering the commenters' concerns, we agree that a closer federal-level oversight of work experience is appropriate to ensure the farmworker program participants are adequately protected where the activity will be unpaid or will be hosted by for-profit entities.

We have changed Sec. 669.370(b)(3)(i) to authorize NFJP work experience in the for-profit sector only when there is a system described in the approved grant plan for the use of for-profit businesses to host the structured learning experience for NFJP participants. Similarly, to reconcile the authorization for unpaid work experience to the requirement in Sec. 669.370(b)(3)(ii), which establishes a minimum compensation rate for paid work experience, we have revised Sec. 669.370(b)(3)(ii) to require that the grantee's unpaid work experience activity be described in the approved grant plan. To be acceptable, the plan must show how the work experience participation at a for-profit host or in an unpaid activity will provide tangible benefits to the work experience participant. The plan must show that such benefits will be commensurate with the participant's contributions to the hosting agency.

We also received comments about the classification of work experience as an intensive service under Sec. 669.370. A number of commenters urged that work experience be considered a training service. Some commenters explained that work experience is effectively used to ``train'' farmworker participants on the different working conditions of non-agricultural work environments, since the participants have developed the basic workplace-values from their farmwork experiences.

Response: In our view, work experience primarily functions as a workplace-values activity, while training activities are about the acquisition of specific occupational or job skills. Work experience provides an opportunity for new entrants in the workforce to acquire, through close supervision, an appreciation of workplace norms that may include self-discipline, relating to others, attendance and accountability, understanding compensation and learning to appreciate and meet employers' reasonable expectations. The concept of intensive services in WIA is more than sufficiently broad to encompass the full range of activities traditionally undertaken as work experience. The classification of work experience as a WIA intensive service does not change the nature of work experience as it was authorized and operated under the predecessor laws: the Job Training Partnership Act, the Comprehensive Employment and Training Act and the Economic Opportunity Act. As a practical matter, the grantees retain the same degree of flexibility in designing service strategies for meeting the needs of their customers, regardless of perceived differences caused by the classification nomenclature used under WIA. The adult program under Sec. 663.200(b) also classifies work experience as an intensive service.

WIA section 134(d)(4)(D) does recognize ``job readiness training'' as a training service. Job readiness training provides, through classroom lecture and role play, the development of the same set of skills and understanding to be acquired through work experience. It is generally offered as pre-vocational world-of-work skills that may include showing up on time, work place attitudes and behaviors, and the like. Job readiness training usually does not include an associated work component, but it may.

For these reasons, we have made no change to the Final Rule about the classification of work experience as an intensive service. Subpart D--Performance Accountability, Planning and Waiver Provision

Administrative Costs Limitation:

The issue on which we received the largest number of comments during the formal comment period is the administrative costs limitation. The Interim Final Rule, at 20 CFR 667.210(b), provides that the administrative costs for the NFJP ``will be identified in the grant or contract award document.'' In the guidance (Farmworker Bulletin No. 99-04) to grantees for preparation of their 1999 Program Year plans, we established an administrative cost limitation policy for those grantees implementing WIA for the 1999 Program Year. The policy limited the amount budgeted for administration to 20 percent, with costs over 15 percent requiring justification satisfactory to the Grant Officer. It was anticipated that, after WIA transition, the rates could be expected to fall. The grantees have traditionally operated within a 20 percent limitation for administrative costs, without having to justify the administrative cost rates to the Department.

The grantees' comments on administrative costs limitations were based on the historical context of this stated policy. They expressed concern that a 10-15% administrative costs limitation was unjust because of the state-wide scope of most NFJP operations and the continuing need to participate in the business of the State Board and to serve on and negotiate MOU's with numerous Local Boards.

Response: In order to provide clarification on this issue, we are adding a new section, Sec. 669.555 to the Final Rule stating that limits on administrative costs for NFJP grants will be negotiated with the grantee and identified in the grant award document. In addition, 20 CFR 667.210 (b), which provides that the administrative costs limitation for Subtitle D programs (INA and NFJP) will be identified in the grant award document, is unchanged.