Explanation:
The Recovery Act provides $200,000,000 for NEG's under the Dislocated Workers National Reserve. The additional resources in the Recovery Act for NEGs provide a unique opportunity for the system to fulfill a critical role in assisting workers who are facing challenges to retool their skills and re-establish themselves in viable career paths.
NEGs are discretionary grants awarded by the Secretary of Labor (the Secretary), pursuant to section 173 of the WIA, as amended, to provide employment-related services for dislocated workers. NEGs are intended to temporarily expand service capacity at the state and local levels by providing time-limited funding assistance in response to significant dislocation events. Significant events are those that create a sudden need for assistance that cannot be accommodated within the ongoing operations of the WIA Dislocated Worker (DW) formula program, including statewide activities and Rapid Response funds reserved at the state level.
NEG funds are not generally intended to address general formula shortfalls or fluctuations in the annual WIA DW formula allotment, but rather to be used in response to unanticipated and specific dislocation events, in accordance with the policies in the NEG Application Guidelines, TEGL 16-03, Changes 1-5, and new policies contained in this guidance.
It is especially important that states coordinate their NEG activities under the Recovery Act with the workforce investment system's WIA formula activities to ensure that participants receive the appropriate services they need while maintaining the integrity of public funds. Several types of NEG applications will be considered for Recovery Act funding. Traditional regular and dual-enrollment NEG applications will continue to be considered for Recovery Act funds.
However, as a result of the severe economic downturn, many states and local areas are experiencing wide-ranging impacts on employment that have not been seen in recent times and a number of these events may not satisfy the current criteria for traditional regular and dual-enrollment NEGs. To address this issue, ETA has created two new types of Recovery Act-funded NEGs - regional economic impact NEGs and formula funds replenishment NEGs - which are intended to provide states and local areas with additional options to address the impacts of the economic downturn in a manner that is appropriate to their specific economic situation and labor markets.
Application requirements for regular and dual-enrollment NEGs will remain the same as what is outlined in the NEG Application Guidelines. Application requirements for regional economic impact NEGs will consist of the same forms required for regular and dual-enrollment NEGs, while the application requirements for the formula funds replenishment NEGs will be a subset of these forms in an effort to maintain consistency with current application procedures and minimize the paperwork burden for applicants.
Regular:
Recovery Act-funded NEGs are available to applicants to respond to significant dislocation events that arise from the effects of the economic downturn. Regular Recovery Act-funded NEG applications will continue to be evaluated under the NEG Application Guidelines. Dislocation events eligible for assistance under regular application criteria include:
- Plant closures
- Layoffs at one company that impacts 50 or more workers
- Layoffs at several companies, where at least one of the layoff events impacts 50 or more workers
- Industry-wide layoffs from companies in the same industry as determined by the threedigit North American Industrial Classification System (NAICS) code
- Community impact layoffs, where the employer base is primarily small employers and multiple small dislocations over a six-month period have had a significant impact on the unemployment rate of the local workforce area. Applicants should continue to submit regular NEG applications via the NEG Electronic Application System.
Dual-Enrollment:
Recovery Act-funded NEGs can also be requested for dual-enrollment projects. These projects provide dislocated workers certified as eligible for Trade Adjustment Assistance (TAA) - 19 U.S.C. 2271 et seq. - with "wrap-around" services, including supportive services for which funds are not authorized. Beginning May 18, 2009, career counseling and case management will be authorized under TAA. A dual-enrollment NEG can be requested when funds are not available for these services through the TAA for Workers program and where WIA DW formula funds are not sufficient to provide these services. Funds are also available to provide training to TAAeligible participants if the state demonstrates it has spent its annual TAA allotment, reserve TAA funds are unavailable, and the state has met the disbursement threshold requirements for WIA DW formula funds.
Formula Funds Replenishment:
A new type of Recovery Act-funded NEG is a formula funds replenishment NEG. Based on the extraordinary effect that the recent economic downturn has had on the labor market and available reemployment resources, requests for NEG funds will be considered to replenish WIA DW formula funds in limited circumstances. Use of formula funds replenishment NEGs may be used for intensive and training services, as well as supportive services and needs related payments. In circumstances where other resources, such as Wagner-Peyser or WIA Adult formula funds are available, the costs of core services should be covered by one of these funding sources prior to using resources available under the NEG.
In general, no more than one quarter's worth of funding, as determined by the state's WIA DW PY 2008 formula allotment, will be approved for this type of application. If the application is received during the last quarter of the PY, any award will be prorated for the period of time remaining until the next PY begins.
Regional Economic Impact:
The new Recovery Act-funded regional economic impact NEG allows for a consistent, regional approach to workforce services in response to layoffs and economic events. Regional economic impact NEGs are designed to respond to the needs of an entire region that is impacted by economic changes. These NEGs permit the aggregation of a series of layoff events that do not meet the requirements of other NEG categories, such as community impact NEGs and industry-wide NEGs. These regional economic impact NEGs encourage joint service planning between local providers and foster communication and collaborative leadership to serve dislocated workers with an eye towards strengthening a region's current and future economic competitiveness. In addition, regional economic impact NEGs allow regional economies to respond to widespread economic challenges in a coherent and cohesive manner, even when regional economies cross state or local workforce investment area borders.
Regional economic impact NEGs can consist of two components. The first, direct reemployment-related services to workers impacted by layoffs, is required. The second is an optional planning component. The planning component occurs simultaneously to the direct services component, and is intended to support tactical planning associated with preparing workers for in-demand occupations within the regional economy, developing capabilities on a regional basis to deliver services, and positioning the region to better compete in the global economy and to respond more effectively to economic events in the future. For both aspects of regional economic impact NEGs, it is critical that the applicant properly define the regional economy to fully meet the goals of this new type of NEG (see Eligible Applicants section for more detail on defining the region).
Direct Services Component: Regional economic impact NEGs are intended to serve participants in the same manner as other NEGs, by providing funding for retraining and reemployment services as well as for supportive services and, where applicable, needs-related payments. Regional economic impact NEGs may serve affected workers from companies that are, or are expected to be, impacted by layoffs within the defined regional economy within one year of the award date of the grant. Applicants will be required to estimate the number of workers that will be served within the one year time frame in their initial application.
In order for regions impacted by widespread layoffs to be better positioned to respond to reasonably foreseeable additional layoffs, regional economic impact NEGs may include an optional planning component. The planning component may not exceed 15 percent of the overall request for funds, or $250,000, whichever is less. Allowable planning activities include such things as:
- Convening of key regional stakeholders to develop plans that will respond to the current needs of workers impacted by major dislocations;
- Establishing collaborative partnerships, networks, and organizational structures, including expanding staff resources as necessary to successfully collaborate with partners in the region and to manage the process and plan development;
- Developing systems and structures that will be sustainable and responsive to future dislocation events;
- Leveraging and aligning resources to ensure that efforts can move from planning to implementation to sustainability;
- Developing effective and regular external and internal communications among partners in the region.
If an applicant intends to include a planning component in its project, the initial regional economic impact NEG application should include language describing the planning component, including the type of planning activities that will take place. It is expected that the leadership group brought together for the direct services component of the NEG will further shape the planning aspect of the grant, if the NEG is awarded.
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