Statutory and Regulatory Issues that Impact Service Delivery

Discussion Paper

Background

The Texas Workforce Commission (TWC) operates an integrated workforce development system that is responsible for all core programs under the Workforce Innovation and Opportunity Act (WIOA) – Workforce Development Adult Education and Training (AEL), Vocational Rehabilitation (VR), and Wagner-Peyser Employment Services (ES). TWC is also responsible for the Supplemental Assistance Nutrition Program Employment and Training (SNAP E&T), the Temporary Assistance for Needy Families (TANF) employment program, and subsidized child care services.TWC also oversees the state’s Unemployment Insurance (UI) program which provides temporary, partial income replacement for individuals who lose their jobs through no fault of their own.

Decision Point

This document summarizes the issues identified by staff as priorities that require consideration by TWC’s three-member Commission (Commission). Staff requests the Commission’s guidance on issues that require departmental action, regulatory or statutorychanges that would further TWC’s integrated workforce development system.

Of note, Congress will be considering several of these issues in the coming months. Both TANF and SNAP must be reauthorized by September 30, 2018.

Federal Issues - Summary

Child Care

  1. Eligibility Period. Eliminate the entitlement nature of the program, and provide stateswith the flexibility that existed prior to child care reauthorization, and allow states to establish the eligibility period, rather than mandating a federal 12-month eligibility period.
  2. Eligibility/Parent Share of Cost Requirements. Assuming the federal 12-month eligibility period requirements remain in place, allow states to adjust a parent’s eligibility for child care based on the parent’s working status, and allow states to modify the parent’s share of cost contribution based on increases in the parent’s earnings.

Vocational Rehabilitation (WIOA Title IV)

  1. Waive State Match Requirement for FFY 2017 Reallotment Funds. Authorize the Rehabilitation Services Administration (RSA) to waive the state match requirements for the FFY 2017 reallotment funds received by TWC in the wake of Hurricane Harvey.
  2. Ability to Subgrant Funds. Remove regulatory barriers to allow the subgranting of vocational rehabilitation (VR) funds, thereby enabling states to achieve greater alignment and integration of core WIOA programs as envisioned by WIOA.
  3. Pre-ETS – Recognition of Additional Pre-ETS Services. Revise statute to clarify and expand the parameters for Pre-ETS services, thereby recognizing that there are other services that assist students with disabilities in preparing for postsecondary and employment success. Support students’ preparation for and participation in postsecondary education opportunities, including but not limited to early college high schools and dual credit programs.
  4. VR Needs Assessment Alignment with WIOA State Plan. Modify WIOA Title IV to require states to conduct the VR Comprehensive Needs Assessment every four years, instead of every three years, to align with the WIOA Combined State Plan’s four-year submission requirement.

Workforce Development (WIOA Title I)

  1. Consolidated Workforce Development Grant. The existing WIOA Title I grant should be consolidated into one workforce development grant, providing states with needed flexibility to address the workforce needs of their state.
  2. Governors’Reserve Sanction. Spend Governor’s Reserve funds on technical assistance and performance improvement planning rather than recapturing those funds from the state. (The reserve is funded through collection of the penalty for failing to meet performance for standards.)
  3. Infrastructure. Limit required infrastructure payments to only those partners that are co-located, or give states more flexibility in determining their calculation methodology and the frequency of reconciling the actual costs to allow for continued local flexibility in how infrastructure costs are funded and maintain an environment that promotes integration among partners.

Adult Education and Literacy (WIOA Title II)

  1. AEL Provider Procurement. Give states the flexibility to subgrant funds to Local Workforce Development Boards (Boards) that would in turn, conduct a local competitive procurement for the delivery of AEL services.
  2. Alignment with WIOA Career Pathways in Service Delivery. OCTAE should eliminate the requirement that literacy, workforce preparation, and workforce training services must “occur simultaneously” and instead, align the delivery of AEL services with the WIOA Career Pathways framework.

TANF

  1. Work Emphasis. Ensure that TANF reauthorization continues to emphasize the importance of work, and gives states the flexibility to design and deliver services that focus on employment, allowing Texas to continue to operate as we currently do.
  2. Outcome Focus/Common Measures. Modify TANF outcome measures so they are outcome focused, rather than process measures, usingWIOA’s Common Measures framework, allowing Texas to continue to focus on important outcome based measures.

SNAP E&T

  1. Integration with the Workforce System. Modify statute to give states the flexibility to allow their workforce systems to administer and operate the SNAP E&T program.
  2. Use of Non-Merit Staff Good Cause. Recommend that the U.S. Department of Agriculture’s Food and Nutrition Service reconsider its interpretation that good cause determinations are a certification function, or expand the recently issued national guidance regarding the types of services that non-merit staff may provide, to include good cause determinations by SNAP E&T-contracted service providers.
  3. Common Measures. US Department of Agriculture (USDA) should adopt the WIOA Common Measures framework to measure the employment-related outcomes of SNAP E&T participants.

Unemployment Insurance

  1. UI – Drug Testing. The revised Final Regulations should be written in a way that allows States to implement State statutory provisions, in this case only explicitly relating to occupations subject to drug testing,
  2. UI -Trust Fund Solvency Mitigation. States should continue to have maximum flexibility in determining the correct mix of options – appropriate tax-rate setting in conjunction with benefit rate and duration level adjustments; bonding trust fund debt – without the imposition of a one-size-fits-all approach to UI trust fund solvency.

WIOA Performance and Data Collection

  1. AEL Alignment with other WIOA Core Programs. OCTAE should be required to revisit its implementation of key performance related items.
  2. WIOA Performance – Data Collection. Recommend that departments work with states on how to streamline the data collection requirements. Alternatively, recommend that the statute be modified regarding data reporting requirements to exclude projects funded with the governor’s discretionary funds.

Federal Issues – Details

Child Care

  1. Child Care – Eligibility Period (Statutory)

The statute should be modified to provide states the flexibility that existed prior to child care reauthorization and allow states to establish eligibility periods, rather than mandating a federal 12-month eligibility period. This change would support the end of the entitlement nature of child care that was implemented during the most recent child care reauthorization.

  1. Child Care – Eligibility/Parent Share of Cost Requirements (Statutory)
    Under the recent child care reauthorization, states were precluded from adjusting the child care that a parent receives during the parent’s eligibility period. This prevented states that required parents to work from implementing those requirements. For example, Texas had required a minimum number of hours that parents must work. Amend the law to allow states to adjust a parent’s eligibility for child care based on the parent’s working status, and allow states to modify the parent’s share of cost contribution based on increases in the parent’s earnings.This change would also support the end of the entitlement nature of child care that was implemented during the most recent child care reauthorization.

Vocational Rehabilitation (WIOA Title IV)

  1. Waive State Match Requirement for FFY 2017 Reallotment Funds. (Statutory)

Statutory authority is necessary to allow the U.S. Department of Education’s Rehabilitation Services Administration (RSA) to waive the state match requirements for the FFY 2017 reallotment funds received by TWC in the wake of Hurricane Harvey. In anticipation of the impact on individuals with disabilities, Texas proactively requested and received $33 million in Vocational Rehabilitation (VR) reallotment funds from RSA. Obtaining these funds was essential to ensure that TWC is prepared to meet the needs of current, former, and new customers who need VR services in both the immediate and longer-term aftermath of the devastating storm. In order to receive the reallotment funds, TWC was required to identify $9 in state funds from other agency program to match the requested federal reallotment funds. These funds are no longer available to those programs, which provide valuable employment, training and support services for individuals who need services to succeed in employment.

TWC requests statutory authority for RSA to grant a waiver for $9 million in state match for the $33 million Texas received in VR reallotment funds. Similar statutory authority has previously been granted. On September 30, 2005, Congress passed the Assistance for Individuals with Disabilities Affected by Hurricane Katrina or Rita Act of 2005. As part of the Act, Louisiana VR received a waiver of the state match requirement.

  1. VR – Ability to Subgrant Funds (Regulatory/Statutory)

RSA currently prohibits states from subgranting VR funding[1]. Thispresents an alignment challenge in Texas where all WIOA core programs are part of the same state agency and therefore the same administrative infrastructure. With all WIOA core programs operating within the same agency, Texas has a unique opportunity to more fully realize the vision of WIOA to “promote stronger alignment of workforce, education, VR, and other human services systems and to improve the structure and delivery of services to individuals.” However, the prohibition against subgranting impedes Texas’ ability to align and effectively implement this vision with entities that are part of the Texas workforce system, and specifically with the Boards.

In Texas, where all WIOA core programs are part of the same state agency and consequently all part of the same administrative infrastructure, consideration should be given to allowing the subgranting of VR funds[2].Subgranting would provide flexibility, which would make the process more efficient, reduce the administrative burden, and further promote local integration across all WIOA programs.

  1. VR Pre-ETS – Recognition of Additional Pre-ETS Services (Statutory)

WIOA (Title IV §113),requires 15 percent of VR funds to be spent on pre-employment transition services (Pre-ETS), specifying five required activities and nine authorized activities. As currently enacted, the legislation is too prescriptive, and it limits states’authority to tailor services to the needs to transitional students.

The intent was to support students with disabilities to successfully transition from school to post-secondary life and ultimately to successful employment. The five required Pre-ETS activities (job exploration counseling; work-based learning experiences; counseling on opportunities for enrollment in comprehensive transition or postsecondary educational programs; workplace readiness training, and instruction in self-advocacy) address some of the services that students may need, but has limited states in their ability to provide a full array of activities to address this challenge.

Additionally, the current sequential nature of a state’s ability to use the 15 percent funding to provide the authorized nine activities, rather than allowing them to be provided concurrently with the required activities, creates hurdles for states to both design and deliver innovate service strategies.

TWC requests that the statute berevisited regarding the parameters for Pre-ETS services and recognize that there are other services that assist students with disabilities in preparing for post-secondary and employment success. The statuteshould also eliminate needless hurdles for providing required activities prior to authorized activities, and simply require states to document how they are providing all Pre-ETS services in a manner that ensures they are outreaching all students with disabilities.

The list of allowable pre-ETS activities should be modified to include other services which allow students to engage in post-secondary opportunities, such as dual credit while in secondary school, and the payment of tuition and fees. Consideration should also be given to allowing students to engage in pre-apprenticeship activities. Currently, states are precluded from using 15% funds for pre-apprenticeship because pre-ETS must focus on the early stages of employment exploration. This position does not recognize the value that specific occupational training and work experience has in engaging students, and supporting a positive transition to students’ post-secondary and employment opportunities.

Additionally, states should be allowed to expend the 15% funds on all supporting costs associated with a student’s participation in Pre-ETS, such as transportation, assistive technology, and other supporting goods and services. As currently implemented, states are faced with difficult tracking and documentation standards to bifurcate allowable costs from unallowable costs for programs designed for Pre-ETS.

  1. VR Needs Assessment Alignment with WIOA State Plan (Statutory)

The existing timeframes for the WIOA Combined State Plan and the VR Comprehensive Needs Assessment, which is a part of the Combined State Plan, do not align. Under WIOA, the unified or combined state plan is a four-year action plan. Within the unified or combined state plan, the VR portion must contain the required VR Comprehensive Statewide Needs Assessment, which is modified every three years.The WIOA statute pertaining to the timeframe for conducting the VR Comprehensive Needs Assessment should be modified from every three years to every four years to align with the WIOA Combined State Plan’s four-year submission requirement.Without this modification to modify the timeframes, the WIOA Combined State Plan and the VR Comprehensive Needs Assessment align only once every 12 years.

Workforce Development Adult, Dislocated Worker, Youth (WIOA Title I)

  1. Workforce – Consolidated WIOA Grant (Statutory)

The existing WIOA Title I grant should be consolidated into one workforce development grantthat provides states with needed flexibility to address the workforce needs of their state.The grant could be used in support of services to adults, dislocated workers, and youth. Funding should be consolidated, providing states with the flexibility to dedicate funds to populations in the state in need.

For example, WIOA §129(a)(4) states that the 75 percent OSY expenditure requirement applies to both statewide activity funds and local formula funds, with the exception of statewide activity funds that are not spent on direct services to youth. While the provision of services to OSY is vital, the requirement prohibits states and local areas from using discretion when serving youth based on state and local demographics, and it weakens Title I’s ability to design and deliver meaningful career pathway programs to all youth regardless of the youths’ school-related status. A consolidated Workforce Development grant should be designed to give states flexibility in determining how to use their funds to support any eligible adult, dislocated worker, or youth. Consideration should also be given to eliminating the existing parameters on serving out of school youth with statewide funds. This change would allow statewide funds to support more innovative in-school youth programs that align with WIOA’s intent to support the preparation of young people for in-demand careers in the workforce, regardless of a youth’s school-related status.

  1. Workforce - Governors’Reserve Sanction for Failure to Meet Performance Accountability Expectations (Statutory)

Under WIOA, a state that fails to meet performance expectations for two consecutive years is subject to a financial sanction. Given that a financial sanction under WIOA was primarily intended to be the result of a failure to achieve acceptable results for a system’s customers, the funds raised from the penalty should be reserved to be spent on technical assistance and performance improvement planning rather than recapturing those funds from the state. Simply removing money from the state rather than redirecting it to deficient areas is a less effective way of improving performance and would negatively impact system customers.

  1. Workforce - Local Infrastructure Funding Requirements (Statutory)

Under WIOA, all required one-stop partners must pay infrastructure costs based on a proportionate share of their use of the workforce system and the relative benefit received, regardless of whether they are physically colocated or not. The requirement imposes a disincentive for all one-stop partners to fully integrate, as integration would require going through the cumbersome, burdensome, and costly process of determining, and periodically reassessing, their proportionate contribution to infrastructure funding. These requirements could also create a disincentive for partner programs to make referrals to other partner programs, thereby inhibiting integration and continuous improvement. Limiting the requirement to only those partners that are colocated, or giving states more flexibility in determining their calculation methodology and the frequency of reconciling the actual costs, would allow for continued local flexibility in how infrastructure costs are funded and maintain an environment that promotes integration among partners.