Modification to add clause 8 for the period July 1, 1997 through June 30, 1998 (or longer where specified herein or if subsequently modified).

8. Pursuant to the statutory waiver authority at Pub. L. 104-208 § 101(e) for JTPA funds available for expenditure during Program Year (PY) 1997, i.e., July 1, 1997 through June 30, 1998 (this includes available funds from PYs 1995, 1996 and 1997), and pursuant to the administrative regulatory waiver authority provided for at 20 CFR 627.201:

A. The Secretary waives the prohibition on stand-alone work experience, job search assistance, job search skills training, and job club, for both youth and adults, in instances when an individual service strategy substantiates its use as appropriate, by waiving JTPA § 204(c)(2)(B)(ii) and 20 CFR 628.535(b)(2) and applying JTPA § 264(d)(3)(B) as if it reads ". . . shall be accompanied by . . . additional services . . . unless the individual service strategy demonstrates such additional services are not warranted." Additionally, the title III prohibition on work experience at 20 CFR 627.245(e), where such strategy is supported by an individual assessment, and the combination requirements at 20 CFR 627.245(d) and 628.804(e) and (f) are waived.

B. The Secretary will apply JTPA § 204(c)(4) and 20 CFR 627.310(e) to title III to enable title III participants to receive post-termination services, except for financial assistance, for up to one year, consistent with title II. Additionally, the Secretary will apply JTPA §§ 204(b)(2)(J) and (c)(4) and 314(c)(15) and 20 CFR 627.310(e) to authorize training as a post-termination service and waives that portion of 20 CFR 627.240(f)(3) which precludes OJT with a participant's "current employer" in "an upgraded job" for title II eligible participants, on condition that the OJT with a title II eligible participant's current employer results in the acquisition of new skills and higher pay by the participant and is contingent upon the Governor:

i. Developing a record keeping system that will track post-termination training provided and outcomes achieved for any post-termination training provided.

ii. Maintaining current safeguards to ensure that employers do not receive federal funding for training/retraining laid off and subsequently recalled/rehired employees.

iii. Developing a policy that addresses the limited circumstances under which the on-the-job-training methodology and means of reimbursement will be used for additional upgrade training.

However, the provision within 20 CFR 627.310(e), which prohibits the use of financial assistance as a post-termination service is not waived. Therefore, needs-based and needs-related payments are not post-termination options under this waiver for both title II and III.

C. The Secretary will apply the definition of "family income" in 20 CFR 626.5 such that ". . . such income shall also exclude Social Security Disability Income for an individual with a disability. . . ." This administrative regulatory waiver is being granted under the provisions of 20 CFR 627.201 for a period of four years from the effective date of this Grant Modification.

D. The Secretary waives the two core performance standards for youth programs in Training and Employment Information Notice (TEIN) 5-93, the Entered Employment Rate and the Employability Enhancement Rate, and substitutes the Positive Termination Rate, defined as: "The number of youth who had a positive termination (either entered employment or met one of the employability enhancement definitions) as a percentage of the total number of youth who terminated." Performance on the Positive Termination Rate shall be calculated in the same way for both the PY 1996 baseline and the PY 1997 goal.

E. The Secretary waives the youth OJT wage requirement at JTPA § 264(d)(3)(C)(i)(I) and the related regulations at 20 CFR 628.804(j)(1)(i) for youth on-the-job training. The State shall assure that the OJT positions for youth have substantial training content and that the training time is correctly determined.

F. The Secretary waives the requirements in TEIN 5-93, Change 1, dated June 23, 1994, that to obtain the Youth Employability Enhancement outcome for either "Returned to Full-Time School" or "Remained in School" definitions, the Youth Employment Competency that is also required is age-specific. The State may allow attainment of any recognized Youth Employment Competency by any age youth to meet the required Youth Employment Competency under the "Returned to Full-Time School" or "Remained in School" definitions for the Youth Employability Enhancement outcome.

G. The Secretary waives the prohibition in §141(q) only on employment generating activities and economic development activities to the extent that these activities are directly for the benefit of JTPA participants by resulting in training or job placement for such participants. Funding for such activities shall be limited to a total of 5 percent from JTPA Title IIA 77% and/or Title III 50% formula allocated funds and may be used to support local economic development activities. In smaller SDAs where 5 percent is less than $50,000 of such funds, SDAs may use up to $50,000. In all other SDAs, such funds may not exceed $400,000. Prior to implementation of this waiver, the Governor agrees to establish a policy to define allowable employment generating activities, to ensure that these activities are charged to appropriate cost categories, and to set appropriate parameters for using JTPA funds for this purpose.

H. The Secretary waives the provisions of the JTPA regulations at 20 CFR 627.450(c)(1)(i), and (c)(1)(iv) which require that program income be used for the same purposes as the funds of the grant, subgrant and title under which it was earned, and that the administrative cost limitation shall apply to the use of program income. Program income may be used for any allowable JTPA purpose regardless of title. Also, the administrative cost limitation will not apply to the use of program income. JTPA § 141(m)(1) will be read to require that income earned under JTPA may be retained for use on any JTPA program regardless of title.

I. The Secretary waives JTPA §§ 108(b)(4)(B) and 315(a), and (b); 20 CFR 627.445(a)(1)(i), and (a)(2)(i) and 631.14(a) and (b) eliminating the non-administration cost limitations for titles II and III [except for national reserve account (NRA) grants]; the 20% administration limitation for titles II-A and II-C, at JTPA § 108(b)(4)(A), the 15% limitation for title III, at JTPA § 315(c), and the 15% limitation for title II-B, at JTPA § 253(a)(3) and 20 CFR 627.445(b)(3), will remain in effect. The provisions at § 108(b)(1) and (c), and all references in the JTPA regulations that address the cost limitations under titles II-A, II-B, II-C, and III [except for NRA grants] shall refer only to the administration cost limitations. The Secretary will apply JTPA § 108(b)(2) and (3) and 20 CFR 627.440(b), (c)(1) and (d) and 631.13(a)(1) to reduce the number of cost categories to two: Administration and Program Costs. The costs of Administration shall be those defined at 20 CFR 627.440(d)(5) for title II and 631.13(f) for title III. Program Costs will consist of all other costs including those defined at 20 CFR 627.440(d)(1), (2), (3), and (4) for title II and at 631.13(c), (d), and (e) for title III. The costs of Rapid Response activities identified at JTPA § 314(b) and 20 CFR 631.13(b) shall continue to be separately reported.

J. For Title III only, the JTPA Standardized Program Information Report (SPIR) instructions in TEIN 5-93, Change 1 that require follow-up by participant contact for the 13th week after termination are waived on the condition that the State adopt the provisions in the Department's "JTPA Statutory Waiver Guidelines: Substitution of Wage Record Follow-Up for Survey Follow-Up in JTPA Performance Standards" and future implementing guidance.

K. In consideration of the waivers contained in this grant modification, the State agrees to a performance improvement of four percent (4%) at the State level measured at the conclusion of Program Year 1997 using actual performance in PY 1996 as the baseline for improvement. Performance improvements will apply to all the Secretary's performance measures or to their approved equivalents, for Titles II-A, II-C, and III. In order to meet this performance improvement, the State is expected to require that each SDA/SSG make some improvement in performance and that those SDAs/SSGs which demonstrate comparatively lower levels of performance be required to make greater performance improvements. States will take into account the SDA's performance improvement targets in determining the receipt of Title II incentive grant awards for PY 1997. In considering whether the State has attained the agreed upon performance improvement for PY 1997, the

Department will apply the Secretary's Adjustment Models, exclusive of Governor's Adjustments, to the performance improvement goals. Program Year 1996 and Program Year 1997 performance will be calculated in the same way for both years.

The Standardized Participant Information Report (SPIR) instructions in Training and Employment Information Notice 5-93, Change 1 (dated June 23, 1994), as modified by Training and Employment Information Notice 5-93, Change 2 (dated January 24, 1997), remain in effect where not specifically waived or modified in this Agreement. Also in effect unless specifically waived are the Performance Standards Status Summary Report requirements put forth in Training and Employment Guidance Letter 2-95 (dated August 10, 1995). This requires Governors to report each SDA's final standard and actual performance for each of the Secretary's Title II core standards, with required technical assistance plans and reorganization plans attached.

Clause 8 shall be open to further modification as authorized under the waiver authority. The effective date of this modification shall be September 30, 1997.


Governor or JTPA Signatory OfficialDate
(Typed Name/Signature)




Employment Development Department
800 Capitol Mall
P.O. Box 826880, MIC 83
Sacramento, California 94280-0001

Grant Agreement Nos.
(Check affected agreements, statutory waivers)

/ / PY 97 JTPA Grant Agreement
/ / PY 96 JTPA Grant Agreement
/ / PY 95 JTPA Grant Agreement